Dunleavy called a second special session over the unresolved LNG tax bill

A lot of things happened in Juneau on Friday, June 19. The second special session expired at midnight with the Alaska LNG tax bill still unresolved. Gov. Mike Dunleavy responded by calling the legislature into a second special session beginning Saturday at 10 a.m.

Earlier in the day, the Senate Finance Committee finally moved HB 381 with a significant rewrite. And the legislature met in joint session on veto overrides — overturning two of Dunleavy's vetoes and failing on three more.

HB 381: the bill that wouldn't quite pass

The Alaska LNG tax bill passed the Alaska House on June 12 with 34-5 bipartisan support. It then sat while Senate Finance worked on its own version. On Friday — hours before the session expired — the committee voted 7-0 to advance a committee substitute to the full Senate floor.

The Senate version makes substantive changes. The bill now uses fixed per-unit tax rates instead of capital-expenditure formulas: 6.2 cents per thousand cubic feet for Phase 1 (pipeline to Mat-Su Borough) and 10.6 cents for Phase 2 (which adds the Cook Inlet crossing, the Nikiski terminal, and an expanded North Slope gas treatment facility). The Senate version also adds hard deadlines: a final investment decision by January 1, 2028, and construction complete by December 31, 2032. Missing either deadline voids the tax relief.

"The most significant change is that the committee substitute in front of you does not use capital expenditures as a component of the tax rate or the collection of the tax," said Pete Eklund, staff to Senate Finance Chair Lyman Hoffman. "Instead, it returns to a single tax rate at each stage of the project."

Sen. James Kaufman flagged a concern about the construction deadline as "possibly being a deal killer with respect to finance." Sen. Bert Stedman pushed back, arguing the legislature could revisit deadlines later if circumstances changed.

The session expired at midnight with the bill still on the Senate floor. Dunleavy issued the second-special-session call shortly after.

Veto overrides: two won, three lost

The legislature also met in joint session to consider overriding Dunleavy's vetoes on five of the nine bills he vetoed June 18.

Two overrides succeeded:

• HB 195 (pharmacist prescription authority): 43-17. Pharmacists can now prescribe and administer medications for routine conditions like strep throat and UTIs. Supporters said it matters most in rural Alaska, where pharmacies are often more accessible than physician offices.

• HB 314 (architects, engineers, and surveyors licensing board): 45-15.

Alaska requires a 40-vote supermajority to override a governor's veto — one of the highest override bars in the country. A 2026 constitutional amendment on the November ballot would reduce the threshold from three-fourths to two-thirds for revenue and appropriations bills.

What happens Saturday

The Senate returns at 10 a.m. for the second special session. HB 381 sits on the floor with the committee substitute ready and floor amendments expected. If the bill passes, it returns to the House for concurrence; if the House doesn't concur, the chambers will need to reconcile. The LNG tax framework is the financial structure Glenfarne Group says it needs to attract investors to the long-proposed pipeline, which has been almost-happening for decades.