Alaska Senate minority demands clean floor vote on LNG tax bill

The Alaska Senate Republican minority caucus held a press conference Wednesday pressing the majority to bring HB 381 — the Alaska LNG volumetric tax bill — to a floor vote without attached amendments. Senate Minority Leader Mike Cronk convened the press conference alongside Senators James Kaufman, Robert Myers, George Rauscher, Cathy Tilton, and Robert Yundt.

The Senate majority has not publicly stated its position on whether to attach an S-corporation tax provision the minority is pressing against, and no majority leadership or majority members participated in the press event.

The House passed HB 381 on a 35-4 vote, replacing the state's oil and gas property tax on the pipeline with a volumetric tax tied to gas throughput. The framework only takes effect if first-phase pipeline construction begins by 2032 and at least one project component is in commercial operation by 2037. According to testimony the Alaska Gasline Development Corporation delivered to the Senate Finance Committee on June 4, Alaska's oil and gas property tax runs roughly ten times higher than comparable LNG jurisdictions.

The minority senators argued that the project's most important public benefit is lower and more stable in-state energy costs. Cronk said the project "benefits nearly every Alaskan, whether it's directly through cheaper energy costs, indirectly through PCE, or by employment or economic opportunities." Myers noted that Fairbanks residents already pay nearly 40 cents per kilowatt hour for electricity.

Kaufman directed criticism at the majority's process, saying committee hearings have been canceled while the majority works out its position. "I hope with all of my heart that we can get a clean bill to the floor and we can have a good up and down vote," he said. Yundt warned against attaching the S-corporation tax provision, saying it has not completed committee work or financial modeling: "We are nowhere near ready to even consider that right now."

Substantive arguments on the broader HB 381 framework that were not raised at Wednesday's press event but are part of the public legislative record include the structural critique of volumetric tax frameworks — that they defer state and municipal revenue to operational years that may never arrive — and dissent from North Slope Borough representatives, who argued during House consideration that the framework reduces local property tax authority that has historically funded village infrastructure, schools, and utilities. Two amendments from Rep. Robyn Niayuq Frier reflecting those concerns were rejected on 12-27 and 8-31 votes.

The special session was in its final days as of Wednesday. If the Senate does not act, Cronk said he hoped the governor would call legislators back immediately. Myers added that the project's timeline cannot be set by the legislature, noting the developer needs to finalize contracts by around September based on agreements signed the previous year.