House Finance amendment lets pipeline-route municipalities bill Alaska LNG directly — skipping the state appropriation step

Alaska municipalities along the proposed Alaska LNG pipeline route would be able to bill the project operator directly for their share of a new pipeline tax — rather than waiting for the Legislature to appropriate the money each year — under an amendment the House Finance Committee adopted Monday.

Amendment 9 passed without objection. It applies to the alternative volumetric tax that would replace the project's property tax once the pipeline is operating, and it grew out of municipal pushback about whether the state would actually pass through the locally owed share.

"It came from the municipalities themselves," said Ken Alper, staff to amendment sponsor Rep. Andy Josephson, D-Anchorage. Municipalities, Alper said, "sought the ability to collect directly rather than passing through state coffers and subject to appropriation." He cited two municipal concerns: that the state might choose not to appropriate funds in a fiscal crisis, and that they could see a delay of up to a fiscal year in receiving the money even when it was appropriated.

The distribution formula stays the same — half by pipeline mileage through each jurisdiction, half by population through the existing community assistance formula. The Department of Revenue would still calculate each municipality's percentage; the change simply lets municipalities invoice the operator directly for their share, with the state collecting the remainder.

Rep. Sara Hannan, D-Juneau, asked whether the change would create parallel mitigation streams. Alper clarified that Amendment 9 applies only after the pipeline begins operating, not to construction-phase impact aid — which would continue as a grant program through the state Department of Commerce, Community, and Economic Development. Rep. Neal Foster, D-Nome, withdrew an initial objection after discussion, and the amendment was adopted.