Alaska Senate minority demands clean floor vote on LNG tax bill

The Alaska Senate Republican minority caucus held a press conference Wednesday to pressure the majority to bring **HB 381** to a floor vote without unrelated additions, warning that attaching items such as an S-corporation tax provision could jeopardize the project and its financing timeline.

Senate Minority Leader Mike Cronk convened the press conference alongside Senators James Kaufman, Robert Myers, George Rauscher, Cathy Tilton, and Robert Yundt. 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. To qualify, first-phase pipeline construction must begin by 2032 and at least one project component must be completed and in commercial operation by 2037.

Alaska's oil and gas property tax runs roughly ten times higher than comparable LNG jurisdictions, according to testimony the Alaska Gasline Development Corporation delivered to the Senate Finance Committee on June 4. Department of Revenue modeling projected that current law could yield a little over $700 million to about $750 million a year in combined state and municipal property tax revenue from the project by 2033. The department gave the bill an indeterminate fiscal note, citing uncertainty over whether the project proceeds with or without tax relief.

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 and that the project would cap costs and provide a path to lower prices that no other option offers.

Myers said the developer requires a 30-year tax treatment to match a 30-year loan structure and had indicated a need to finalize contracts by around September. "Waiting until next year does not work for this project. They are going to have to start from square one on so many things," he said. Cronk added: "They need it to match the loan."

"Passing this bill does not guarantee us a gas line, but not passing this bill guarantees we don't get a gas line," Myers said.

Kaufman directed the minority's sharpest criticism at the majority's process. "Suddenly committee hearings are being canceled and the majority's caught in a huddle apparently trying to figure out what they're gonna do," he said. "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."