House Finance lets boroughs bill Alaska LNG operator directly

The Alaska House Finance Committee adopted an amendment Monday allowing municipalities to bill the Alaska LNG operator directly for their share of the alternative volumetric tax once the pipeline is operating.

Amendment 9 passed without objection. The change does not alter the distribution formula. Half goes by pipeline mileage, half by population via the community assistance formula. The amendment removes the state as intermediary for municipalities that choose to use the direct-billing authority. The Department of Revenue will still calculate each municipality's percentage. Municipalities can then invoice for their share. The state collects the remainder.

Andy Josephson sponsored the amendment. He said the change addresses municipal concern about whether the legislature would appropriate the dollars. Ken Alper, staff to Josephson, explained that the amendment came from the municipalities themselves. They sought the ability to collect directly rather than passing through state coffers and subject to appropriation. Alper said municipalities raised concerns both that the state might choose not to appropriate funds in a fiscal crisis and that there could be a delay of up to a fiscal year in receiving the money.

Sara Hannan asked whether the amendment would create two streams of mitigation money: some directly from the impact fund and some via the AVT distributed by formula. Alper clarified that Amendment 9 addresses only the tax after the pipeline is operating, not construction-phase impact aid. Impact aid remains a grant program administered by the Department of Commerce, Community, and Economic Development.

The amendment applies to the alternative volumetric tax after pipeline operations begin. Construction-phase impact aid would continue as a fund administered by the developer or as a grant program administered by DCCED, depending on other amendments. Under the amendment, some municipalities may choose to bill directly while others may still receive distributions through the state.

Neal Foster removed his objection after discussion. Seeing no further objection, Amendment 9 was adopted.