Alaska Legislature: Senate Floor Session - June 19, 2026 2:15pm

Would the Senate come back to order, please? Madam Majority Leader. Mr. President, I move and ask unanimous consent that the first supplemental calendar be adopted. Thank you. Hearing no objection, the first supplemental calendar has been adopted.

I would like to make an announcement at this point that I'm setting a deadline of 3:45 for amendments, for additional amendments. If you have already ordered an amendment, if it is in the process, that is fine, but no new amendments after 3:45. That means they have to have been submitted to alleged legal by that time.

So, Madam Secretary, would you please read the first item on today's supplemental calendar?

[SPEAKING NATIVE LANGUAGE] CS for House Bill 381, Finance, amended by the House Finance Committee, an act relating to the taxation of certain natural gas project property and related facilities, relating to local contributions for public school funding, relating to municipal property taxes, relating to the Alaska Gas Line Development Corporation, relating to reporting requirements for natural gas pipeline projects, relating to approval of contracts by the Regulatory Commission of Alaska, and inflation adjustment of the maximum price of natural gas, relating to an alternative volumetric tax on natural gas throughput, relating to agreements and a payment related to a natural gas project, relating to municipal impact grants, and providing for an effective date. The Finance Committee considered the bill, recommended it be replaced with a Finance Senate Committee subcommittee Substitute, new title with SCR 203. New fiscal notes, signing do pass, Senators Steadman, Hoffman co-chairs. Signing amend, Senator Olson co-chair, Senators Kaufman, Cronk, Merrick, Keel. The bill has no further referral.

The bill is in the Rules Committee. The Rules Committee has placed the bill on today's first supplemental calendar. Thank you. Senator Hoffman, please go ahead. Mr. President, I move and ask unanimous consent I move, Mr. President, that the Senate Finance Committee substitute for House Bill 381 be adopted in lieu of the original bill.

Thank you. Would you please explain the changes? Yes, Mr. President. The committee substitute for House Bill 381 Finance makes the following changes. The bill in the language— the language changes.

The first area is the alternative volumetric tax calculation and tax abatement. The House version used a weighted average of 3 tax rates on the project components. This version replaces that with a 6.2-cent tax per 1,000 cubic feet on Phase 1 of the project and a 10.6-cent tax on the first 10 years of Phase 2 of the project and a 21.2-cent tax beginning 10 years after the first LNG throughput. The first two rates align with the Department of Revenue's modeling of the combination taxes for— of the phases under Version WA. The fourth rate doubles the tax in 2060 to a total of 42 cents.

Thank you.

$0.022.4. The tax rates will grow with CPI once the tax takes effect, except that it will grow by at least 1% and not more than 3%. The other body's version had a lower inflation cap of 2%. Specified that once gas flows, the when the tax rate starts. The other body's language had the first month of tax— gas untaxed.

The initial tax is split between local governments and the state with a percentage that matches DOR's modeling of the effect of the House Bill. 6% To the North Slope, 47% to municipalities by pipe mileage. 47% To community assistance. After first gas on Phase 2, the Kenai Borough will receive 48.4%. North Slope Borough, 27%.

9.5% Will go to communities along the pipeline by mileage. 9.5% Will go through the community assistance formula. And 5.6 will go through the state as UGF revenue. When taxes double after 10 years of Phase 2 production, the added revenue will go through the community assistance formula. Then it doubles again in 2060.

The added revenue will go to the state. The new potential terminations of the abatement period of AVT applicability if a final investment decision for Phase 1 is not reached by January 1st, 2028. And if construction of the pipeline component is not completed by December 31st, 2032, a termination based on the start of the construction was removed. Thank you. Conforming changes are made due to moving away from using capital expenditures.

Definitions were added for final investment decision, primary owners of H-Star, project developer, which is Glenfarn for Phase 1, and another definition for Phase 2. Exemptions from the required local contribution. In the version of the bill that came from the other body, Section 2 exempted property subject to tax abatement and the AVT from K-12 required local contribution. The Senate Finance version subjects a portion of the AVT to the required local contribution at a ratio of 2.65%. To 20%.

In effect, this subjects 13.25% of the AVT municipal revenue to the required local contribution. As HB 82 became law yesterday, Section 2 exempts the portion of the required local contribution attributable to the AVT from 4% cap on an annual increase contained in the bill. Amendments of the AGDC provisions. Bond approval. The previous version of this bill allowed the legislature to disapprove the revenue bonds by AGDC by passing a bill within within 90 days.

The Senate version switches that to require affirmative approval of the bonds within 90 days. Reporting requires AGDC to provide total capital expenditures for each of the major components of the project. Since the capital projects are not used in the tax calculation of the CS. Mr. Chair, This language ensures that the legislature still knows the final cost of the project, prevents AGDC from entering into confidentiality agreements that would not allow AGDC to present to the legislature the financial information other investors receive, and that a prudent investment would need to —make an entity decision to invest in the project.

Places municipal options to invest in the project on the same 180-day timeline that the legislature has under the bill. Directs AGDC to maintain a publicly available internet website which informs the public with detailed information on project status. Establishes AK LNG Project Bond Fund. The fund may be spent without further appropriation for the purpose of paying bonds issued by the corporation. It establishes that revenue of the Alaska Minnesota Gas Line Development Corporation will be deposited into a separate account in the general fund and that the legislature may appropriate from the account into the bond fund and for the corporate budget.

The remainder will be general fund revenue. Additionally, two accounts were repealed because they have no remaining funds and are no longer needed. Those two are the In-State Natural Gas Pipeline Fund, and the second was the Alaska Liquified Natural Gas Project Fund.

Establishes— excuse me— establishes the Affordable Heating Fuel Fund, provides that the legislature may appropriate 20% of the gas royalties from the LNG project remaining after depositing into the permanent fund. The fund is to be used for programs that will reduce cost of heating fuels in areas of the state that do not have access to the pipeline. Firms up conditions to be met for tax abatement and —implementation of an AVT. The project developer must pay $40 million to the Natural Gas Municipal Impact Fund within 60 days of final investment decision on Phase 1 and contractually commit to pay another $40 million within 60 days of FID on Phase 2. DCCED would administer administer the impact fund and decide which municipalities get reimbursed.

The primary property owner entering into the— into project labor agreements for the construction of the gas line. The project developer commits to constructing a Fairbanks spur line. This portion is substantially the same as the House version. Except for the addition of "to the extent allowed by federal law" before requiring that the cost be spread to export consumers. Various technical and conforming changes were made to clean up the bill and to make for better interpretation of current and future statutes.

Thank you. There were no additional changes to the fiscal notes. Those are the differences between the House version and the one that the Senate Finance Committee submits and is in front of the body today. Thank you, Senator Hoffman. Hearing no objection, the Senate Finance Committee substitute has been adopted.

Madam Secretary. There is an amendment number 1 by Senator Hoffman on Members' Day to the desk.

Senator Hoffman. Thank you, Mr. President. I move amendment number 1. Objection. There's an objection.

Senator, please explain the amendment. Amendment number 1 is in relationship to the S corps and the effective date is an immediate effective date of January 2026, and I would request that the senator from District— Brief eddies. Brief eddies.

Senator Hoffman. I would request that the senator from District J explain the amendment. But this amendment would have an immediate effective date of January 1st of this year. Thank you. Senator Dunbar.

Thank you, Mr. President, and I appreciate Senator from Bethel for bringing this amendment forward. We have debated this extensively in this legislature. This legislature already passed a substantially similar amendment to another oil and gas bill. This would create a stepped system for taxable income in oil and gas pass-through entities, not just S corps but also LLCs and similar legal entities. This is necessary.

Necessary. Necessary in this bill because of the least expenditure issue. And I'm going to speak more probably— I hope that I get an opportunity to address any kind of misinformation that might be out there at a later time because I didn't realize I was going to be introducing this amendment. But in the Senate Resources Committee, we worked for many hearings to try to deal with decoupling issue. So the decoupling issue is gas lease expenditures can be counted against oil production taxes.

Initially in Senate Resources, we had an amendment that decoupled the two. Unfortunately, AOGA came in and said, this is impossible, we cannot do this. And then that was confirmed by DOR. Not that you couldn't do it, but it'd be very expensive and complicated. So we worked with the Department of Revenue at the Resources Committee to try to find simpler ways to address this issue.

So again, in construction— in the construction phase, when you're not getting gas taxes, you are going to be losing oil revenue. So this bill, as it's currently written, unamended, it won't just raise very little in gas taxes in the long term, it'll also actually substantially harm Alaska's existing oil tax revenue in the short term and during the, and during the construction phase. That means less money for schools, less money for the PFD, less money for road maintenance, which we know we're going to need more of. So again, this bill actively harms Alaska's existing tax revenue unless we find some way to address the lease expenditure issue. So in the Resources Committee, we had 3 potential solutions.

We could have hardened the GVR floor, and I won't go into detail of that because we're talking about S corps. We could have raised the GVR level from 4.5% to 6%, or we could do something like the S corp. This is probably the simplest way to do it, and it prevents it from becoming an expansive oil tax change. Instead, it's addressing pass-through entities, where of course Glenfarm is one of those entities. Mm-hmm.

So in the short term, you're addressing the lease expenditure issue and trying to protect the finances of the state. In the long term, we know that Glenfarn, according to the modeling of Department of Revenue, will become one of the largest entities in our state. They estimated more than $400 million of revenue at full gas because of this provision. Now, that might have been overstated a little. We don't get to actually see Glenfarn's books, so We don't know how much money you would raise, but even if it was half of that, we're talking about a very substantial amount of money that Glenfarn originally said they were happy to pay, or at least they didn't fight.

So that's what this amendment does. It has an immediate effective date back to January. And again, this is relevant to this bill and necessary to this bill because of the lease expenditure issue that was unaddressed by the House, extensively discussed in Senate Resources, and not addressed yet in this Senate Finance version. I would urge folks to please vote for this amendment. Thank you, Mr.

Chair. Thank you, Senator Dunbar. Under discussion. Senator Cronk. Thank you, Mr. President.

Obviously, this is a very interesting amendment for this gas line bill. From everything I have— as much as we you've listened and you're trying to figure out what's going on. It's— we've spent $1 billion in the state to try to make this come to fruition. $1 Billion. And I think having a clean bill without any of these, you know, an S corp amendment is an appropriate way to move this forward.

Because even passing this bill doesn't guarantee we're building the gas line. We're giving them parameters. With permission to read, I would like to go through some things. This has been a very public issue whether you are on Facebook or any social media. There are a lot of people on both sides of the aisle.

With permission, I would like to read some. Without objection, so ordered, Senator Cronkite. Some of our concerns with this, the language is incomplete, untested, and poorly drafted. This proposal is incomplete and leaves major questions unanswered regarding entry-level treatment, apportionment, deductions, depreciation, loss carryforward, or as an investor taxation. Tax professionals from impacted parties agree the language is unworkable and would have chilling effects on the project's economics and the ability to attract investors.

I think that's key. We're going to have to attract investors, and so we want to make sure that we don't have any distractions from that. If we decide to do a delayed implementation, it doesn't fix the proposal. All proposals impacting S corps and other pass-through entities, including delayed implementation dates, harms this project. It makes it impossible for investors to commit to financing.

Delay doesn't cure any of the technical and practical issues with the bill. From a Cook Inlet perspective and from a project— project developer's perspective, severely impacts North Slope producers responsible for delivering every molecule of gas supplies. Every molecule of gas delivered during Phase 1 and Phase 2 will come from North Slope fields operated by Hillcorp. Thank you. Hillcorp.

Every well facility upgrade, compressor, pipeline connection, and investment required to deliver that gas into the project must be completed by Hillcorp. This tax will harm their ability to do so and could even unintentionally result in higher gas prices to consumers, which I don't think any of us want. Increase the cost of delivering gas. A tax on upstream producers increases the cost of developing, producing, processing, and delivering gas into their project. Higher costs ultimately challenge project economics and make investment decisions more difficult.

I think we've known over the course of the years this is a marginal profit project. So I think we want to make sure that we're, you know, we're doing everything we can to make it happen. The proposal relies on a corporate income tax framework that does not fit pass-through entities. S-corps and pass-throughs do not pay federal corporate income tax in the same way C-corps do. That creates a major disconnect.

Okay. Equal protection concerns could jeopardize underlying bill and scare away investors. The proposals contain serious equal protections concerns and can be locked up in lengthy legal challenges, jeopardizing not only the underlying bill but sending a chilling message to investors. If the authorizing legislation is behind challenge by the very companies who will supply the gas, that's pretty problematic. If we looked at the vetting part of it, yeah, we've had a lot of hearings, but I've tried to keep up with every hearing, whether it's Senate research, but I don't remember any hearing specifically addressing S-Corp and how it would affect the companies or the developer.

The proposal directly undermines the LNG project it is supposed to advance. The legislation is intended to advance the Alaska LNG project, yet the pass-through S-Corp provision imposes new taxes and new costs costs to upstream producers and the project developers themselves. This is fundamentally at odds with the bill's purpose of improving the project economics. Uncertainty around the S Corp implementation will kill investment. Uncertainty surrounding a potential pass-through entity tax, investor tax treatment, or other unresolved fiscal issues will significantly impact current and prospective investors at a time when certainty is critical to advancing financing, commercial agreements, to and make final investment decisions.

Years of regulatory uncertainty, the regulatory process could take years, leaving investors, producers, and project participants without clear rules. This hurts Cook Inlet gas development before any guarantees of a gas line. These proposals harm Cook Inlet before we even know if a gas line will be built. At a minimum, any future escrow tax should be conditioned upon actual North Slope gas deliveries at meaningful commercial volumes. It should not take effect until those benefits are This harms Cook Inlet gas development.

Cook Inlet gas supply is already a break-even proposition with operators reinvesting heavily to meet existing utility contracts and maintain deliverability. Imposing a new tax burden reduces available capital for drilling and infrastructure investments at the same— or at the exact same time Southcentral Alaska needs additional gas supplies and reliability. Significant legal and constitutional questions The proposal raises concerns regarding equal treatment of businesses. Legal challenges could jeopardize the underlying bill. Does not guarantee a gas line gets built.

The proposal imposes immediate cost and uncertainty while offering no guarantee the project ultimately proceeds. Alaska should be cautious about adopting new burdens before project benefits are realized. I just want to say, for my 2 years in here and then watching the 4 years previous, this body prides itself on hearings. In modeling. And I don't think we've done the modeling on this exact tax charge and how this is going to affect companies.

I believe this body should move this legislation forward clean without— it's a tax burden which allows the developer and AGDC the best chance of success. Alaska's invested the billion dollars. You know, let's give this project— let's give them the opportunity to see if this project can be built. This is a long-awaited project for Alaska. So my suggestion is we keep this legacy project clean, Mr. President.

So I would urge people to not support this. Thank you, Senator Cronkite. Is there further discussion?

Senator Rauscher. Mr. President, producers like Hillcrest, they are I mean, Hill Corp, they are professionals at taking brownfields and turning them into something that we can actually gain a lot more revenue from.

They bailed us out many years ago. Before they entered into the arena, we were slated at a 6%, 7% decline. And after they entered into the arena, we leveled off into a 3% decline. They've bailed us out over a period of many, many years. It's— it equals over $50 to $1 million a year.

They revived the prolonged revenue stream for our state. They provided gas for the inlet. They provided gas for our homes and free electric. I believe this might be very counterproductive to what they've actually accomplished and how they might be able to accomplish for us in the future. The numbers are very tight for Glen Farm right now, and if this doesn't pencil out, it doesn't get built.

Yeah, we heard that we're going to need extra money for schools, we're going to need extra money for roads, we're getting extra money for this, we're getting the extra money for that, but if it doesn't get built, we get no revenue at all. So I'm not sure that what I'm hearing is more revenue. I may be hearing that it's no revenue. Thank you, Mr. Speaker. Mr. President.

Thank you, Senator Rosser. Is there further discussion? Senator Wilkowski.

Thank you, Mr. President.

The fundamental question that we are being asked right now is how many billions in tax breaks shall we give to Glenfarn or whoever ends up producing this project so that they can make, according to the Department of Revenue's projections, $5 billion a year in profits? Let me repeat that for the public. Yes, this is a marginal project in the initial years, and that's why under this bill the company is getting a 90% tax break in production tax— in property taxes. They're getting 90% production, roughly $700 million to $1 billion per year in property tax cuts for the state, from the local communities. But once this project ramps up, according to our Department of Revenue, which is controlled by the governor, Glenfarm will be making $5 billion in profits per year.

And they will be paying zero corporate income taxes. So they'll be getting a 90% tax break on their property taxes, 100% tax break on their corporate income taxes. That's a billion and a half dollars because that's a loss of $462 million per year that the state is foregoing unless this amendment passes. Now, you can talk about royalties, but with the passage of this bill, 52.5% of the royalties are committed to outside the general fund. And the royalties are calculated on rates of gas, which are extremely low.

Mm-hmm. We see that the spot price might be $15, might be $20, but the reality is the gas is being sold on the North Slope for $1.50. And so we get 12.5% of that. And of that 12.5%, 52.5% is already committed to other things under this bill. Production taxes, similar.

Thank you. In fact, under our existing statutes, companies that will be developing gas, building gas transit lines, will be writing all of those expenses off of our oil production taxes. The state, as this project is being developed, will be losing tens to hundreds of millions of dollars.

It's sort of like the Willow Project. We— everyone rushed into it and it's costing us $300 million to $500 million per year in lost production taxes. We rush into these things without thoroughly analyzing them, and it looks great to the people of Alaska. And then we go and we check the bank account and we realize we're broke because we gave it all away. That's what this amendment tries to stop.

It says, you know what, we're very happy that you will make $5 billion per year in profits. We just think you should pay a very small portion of that to the state of Alaska in corporate income taxes. That's what this amendment does. Okay. And so You know, I've heard discussions about there's going to be equal protection issues.

There's no equal protection issues here. They can assert one, but we've discussed this on the record extensively. I don't want to get in too much technical detail, but it's a rational basis test. Did the legislature have a rational basis to enact this? Absolutely.

We've discussed this on the record in Senate Resource resources, what's the rational basis? Well, the rational basis is simple. We have a constitutional obligation to get the maximum value for our resource. The legislature— that is directly an obligation put on the legislature to get the maximum value for the resource. Mm-hmm.

Are we really getting the maximum value for the resource when we say to one producer on the North Slope who's making billions of dollars a year in profit, We're gonna charge Conoco a tax, we're gonna charge Exxon a tax, we charged BP a tax for decades, but you outside Texas billionaire, because you figured out a way to incorporate so that you don't have to pay taxes, you pay zero. That is not fair to the, quite frankly, to the other corporations who are shouldering the load up there. It's not fair to the people of Alaska. Thank you. That we're being deprived every year of $100 million, $150 million per year.

And if this doesn't pass, when this project goes into full development, we will be losing $462 million per year. That's not even inflation adjusted, Mr. President. Who knows what the number will be? That's according to Governor Don Levy's own Department of Revenue. And so in following our constitutional obligation, absolutely.

If we pass a bill and say we're gonna let you pay virtually nothing on property taxes and nothing on corporate income taxes, are we really following our constitutional mandate? I would suggest we're not. I would suggest we're not. And we're getting very little in royalties for the general fund. Thank you.

Production taxes are being written off, off the expenses of oil. So absolutely, you want to talk about equal protection? Yeah. Yeah, talk about equal protection for the other corporations who are paying their fair share right now in corporate income taxes and one corporation is not. That is not fair.

That is not how a structure is supposed to be written. And it is manifestly unfair to the people of Alaska. Thank you. To say, you know what, yet Norway gets 78% for their resource. They've got a $2 trillion sovereign wealth fund.

Middle East getting 99% for their resource, building islands in the ocean with billion-dollar hotels and office buildings. But in Alaska, we're just gonna give it away and not get our fish or not follow our constitutional mandate. And we've got schools falling in the ocean. [SPEAKING SWEDISH] We've got education funds that we can't meet. We've got roads that don't get plowed.

We've got services we have to provide and we can't keep providing those services that we're constitutionally obligated to provide when we give it away. We can't do it, Mr. President. I would love to. We would all love to. Just give it away.

We can't do it. That's not fair. That's not meeting our constitutional obligation. We've got— We've got to close this. We should have closed this years ago.

People say, "Oh, it's not fair to do it retroactive." We should have done this 8 years ago. This should be retroactive for 8 years, quite frankly. We're— they're fortunate we're only going back 6 months. And the people say, "Oh, that's unfair to go back a few months." No, it's not. That's— if you don't, you're rewarding— you're rewarding a company that has systematically come in and lobbied this legislature to continue tax breaks and give them special preferential treatment.

That is fundamentally unfair to the people of Alaska. We need to change that. I want to talk about the impacts on Cook Inlet. This will have zero impacts on Cook Inlet. How is that possible?

Well, yes, there is a company in Cook Inlet. We are— Hillcorp, owned by an outside Texas billionaire. They control 90% of the basin, 90% of Cook Inlet. And we know that there is roughly a 200-year supply of gas in Cook Inlet. They control 90% of the leases.

We've also heard from the Department of Revenue— or Department of Natural Resources— the rate of return in Cook Inlet— you know, you put your money in the bank, maybe you get a couple percent these days. You put your money in the stock market, maybe you get 6, 7, 8. Maybe you get 9, 10%. Their rate of return, according to Governor Dunleavy's Department of Natural Resources in Cook Inlet, is 30%. We're not giving away, they're not doing us any charity work, they're making money.

They're making money. Well, why aren't they doing more? Well, that's a good question. It's probably 'cause they can make 100% rate of return up at Prudhoe Bay. And it's probably because if this gas line deal goes through, through, then they're gonna get a pipeline right to their doorstep where according to the Department of Revenue, they're gonna make an 82% rate of return on the gas with no further investment.

Well, they'll have to make a little investment, but they get to write that off their oil taxes. We'll pay for it. We'll pay for it. People of Alaska will subsidize that. That's how our tax structure works, Mr. President.

So, you got a company sitting there controlling an outside Texas billionaire controlling 90% of our leases in Cook Inlet. 200-Year— people like, what are you gonna do? If you don't pass this, what are you gonna do? Well, there's a 200-year supply of gas sitting at your doorstep. And guess what?

They are sitting on it. They have sat on it. And it's not just me saying that. The utilities in South Central sent a letter to the governor, sent a letter to the Attorney General and said, "Hey, we're gonna run out of gas." This is a couple years ago. "We're running out of gas in Cook Inlet.

You need to get on Hilcorp and order them to comply with their leases and with the consent decree that they signed that requires them to develop their gas in Cook Inlet." Do you know what the Attorney General did in response to that? Nothing. Nothing. He never even responded to their letter. So I sent him a letter.

You know what he did in response to that letter? Nothing. He never even responded to my letter. I sent him a second letter. You know what he did in response to that?

Nothing. He didn't even respond to that second letter. Finally, I went to the press. And I said, "Hey, press, what do you think about this? How about taking some action?" Sure enough, he writes a letter.

Oh, they're fine. They're meeting their requirements. So is Hillcorp gonna stop developing and cooking Cukiland, if we pass this, they legally cannot do so. Why is that? Why can they legally not develop and stop developing Cukiland?

Because they have a firm contract with NSTAR. They're not doing it out of charity. They have a legal binding contract. They are required to deliver gas to NSTAR until 2033. And if they stop, they got to pay them a whole bunch of damages.

Thank you. Is. They are legally— they're not doing this out of the goodness of their heart. They're not doing this for any charity reasons. They're doing it because they— good financial— good financial, you know, hey, if I was in their shoes, you know, maximize the benefit for the corporation.

They're doing their fiduciary duty for their company, for their own wallets. But you know what? We're the board of directors for the people of Alaska, and it's about time we started doing our constitutional obligation to get the maximum benefit for the resource, stop being bullied around by huge corporations, by huge outside companies, and say we're gonna get the maximum value. And one way we get the maximum value for our resource is through corporate income taxes. It's through corporate income taxes.

We get it through property taxes. We're giving a 90% break on that under this bill. Thank you.

So help us pass this piece of legislation we've been trying to pass for years. We've been trying to pass this for years. There are no legal issues. This is going to have zero impact on coconut production. But this is going to make the state finally start getting some revenue that we are constitutionally obligated to.

I urge the ask the body to vote yes for this. Thank you. Thank you, Senator Wielechowski. Is there further discussion? Senator Giesel.

Thank you, Mr. President. I'm just going to tag on to that a little bit. Mr. President, these companies that we're talking about have corporate boards, board of directors, who have a mandate to the people operating those boards make a profit. Mr. President, these are S organized under federal tax law. We're talking federal tax law here.

S corporations, limited liability corporations, and sole proprietorships. We also have a mandate, Mr. President, and it's found in Article 9, Section 1 of our Constitution. Taxing power. The power of taxation shall never be surrendered. That's what the words say, Mr. President.

It goes on in this section to say the power shall not be suspended or contracted away except as provided in this article. Mr. President, we are contracting away our right of taxation. This bill corrects that. We are the board of directors. We're not a charity.

It's wonderful that Hill Corp came here, but they came here knowing that this state did not have a personal income tax. And that's how Hillcorp would have been taxed. Don't think they didn't know that. Because these corporations have stables full of corporate tax attorneys. In fact, Glenfarm is here today in Juneau with several tax attorneys tagging along behind them.

We are the country bumpkins that have no assistance in that realm. We have no expertise. Mr. Mm-hmm. President. In fact, our Department of Revenue is down 30 positions in the auditing division.

Mr. President, 30 positions.

We are so underqualified and undersupplied with the resources we need to really look at this and be equal at the table. One of the things that is said about this bill is it has not been modeled. Mr. President, then how the heck do you think we know that they will be making about $5 billion, Glenfarm, when this is at full production and we will be losing out on more than $400 million? Because it has been modeled by our own Department of Revenue, Mr. President. I'm not sure that the Department of Revenue considered the 45 credits that Glenfarm will make on the gas treatment facility on the North Slope as they sequester the CO2.

They will make $135 per ton to sequester this CO2. We're not even counting that. That's profits above and beyond. Mr. President, this is a net tax. Mm-hmm.

It's a net tax. All those deductions are taken into account. I appreciate the document that was read from AOGA, Alaska Oil and Gas Association, and with input from Glenfarm. We've seen that same thing because this bill has been heard before. All of the points can be rebutted.

None of them hold water. Mr. President, I urge a yes vote on Amendment Number 1. Thank Thank you. You. Thank you, Senator Giesel.

Senator Myers. Thank you, Mr. President. We did talk about this provision quite a bit in Senate Resources with previous versions of this bill. We had some interesting comparisons done by our consultants comparing us to some other jurisdictions that have done LNG projects over the last decade or so. And one of the things that was emphasized surprised to us was that our closest competitor, also closest geographic, is Canada.

Because they just finished an LNG project, went into operation last year down in British Columbia. They're currently working through a potential expansion of that project that's going to double their output here. There were just a couple things in the news, not just in the last couple of weeks, —weeks here about customers signing up for them. And one of the things that was emphasized by our consultants had to do with tax rate differences between us and Canada. And one of the things they mentioned was specifically our corporate tax rate.

When you take our state corporate rate of 9.4%, which is what this amendment is proposing, add it in with our federal corporate rate of 21%— 21%. You end up with a corporate rate that is higher than the corporate rate being charged in Canada to a similar project. And that's with Canada already having a lower property tax than what we are proposing in the underlying bill. So what we're doing with this amendment is we're taking one of the few places that we're actually a little more competitive than Canada and we're getting rid of it. We might actually get some C-Corp investors anyway.

That's potential. We haven't put the— we haven't had announcements as to who's investing yet. Of course, I'm sure they're waiting for this bill to pass to see if they're going to invest. [FOREIGN LANGUAGE] invest. But we might get C corp investors, we might get S corp investors, I don't know.

But that's going to be a significant portion of the question is what is the tax rate comparison, Mr. President. And we're intentionally hurting ourselves in the international market in that way. There's been a little talk about— brought up about modeling based on this amendment. We've modeled state revenue. That's definitely true.

We haven't modeled what this amendment would do to future investment and future production. Not only with Cook Inlet, but also up on the North Slope, Mr. President. So again, we might be hurting our own— there was concern mentioned earlier by a previous speaker about hurting our oil production. Very good chance this amendment hurts our oil production, Mr. President. Thank you.

A little talk about how this could affect Cook Inlet. And there was talk about the one large producer that we have there. We also have two other producers there that are also organized as other entities that would get caught in this amendment, Mr. President. Both of those entities are having a hard time producing. One finally got some gas out of the ground last year, but only after getting some royalty relief from the state.

The other one is having other problems garnering investment dollars. We're not going to make it any easier on them by passing this amendment either. We're not just catching one company here.

There was talk about how much gas we have left in Cook Inlet. Mr. President, if there was that much gas left in Cook Inlet and if the rate of return is as high as was mentioned, Why is it we're not getting more investment in Cook Inlet, Mr. President? So we're already taking a marginal basin that most companies are leaving. You know, we used to have a half dozen different producers down there, and most of them all got bought up 'cause they decided they wanted to leave the state. And they've sold pretty much to the one company that's the large producer down there that was mentioned.

If other— If we were that lucrative, why were those companies leaving and why don't we have other companies that want to get a 30% rate of return for their customers showing up as well? And then finally, we— previous speaker touched on the potential equal protection issue and said, "Well, it's because of our constitutional mandate to get the maximum value, maximum benefit for the people for our resources." Um. Yeah, that's there, and oil and gas definitely qualifies as resources, but if we're going to look at an equal protection issue, it's based on our value from our resources. Why are we only looking at oil and gas companies? Why aren't we looking at companies that are involved in mining and timber and fishing that are other, also other resources that we are constitutionally mandated to get the maximum value from, Mr. President?

I don't find the arguments persuasive and I believe we are hurting our position if we actually want this project to go forward, Mr. President. Thank you. Thank you, Senator Myers. Senator Tilton. Thank you, Mr. President.

Amendment number 1 that we are discussing right now to the piece of legislation HB 381 which builds a gas line for Alaskans and is a retroactive S-Corp taxation. And previously, at the beginning of this conversation, the Minority Leader read 14 reasons why this doesn't make sense to add this to this piece of legislation. And Mr. President, I just want to add the final reason at the end. [FOREIGN LANGUAGE] was that it doesn't guarantee that a gas line gets built. This proposal here in front of us, Amendment Number 1, adds immediate costs and uncertainty while offering no guarantee that the project ultimately proceeds.

Alaskans should be cautious about adopting new burdens before project benefits are realized. Mr. President, I just— I just want to say that I know that my constituents are excited about having a gas line here for Alaska, having energy that people can afford and the businesses can afford, and that we can ultimately help move the economy of the state of Alaska forward. And I think that we're putting something here that is a retroactive that goes backwards to January, um, of 2026, not considering the effects, these 14 reasons that the minority leader already went through. I'm not going to go through and read every single one of them again. But I want to just remind the body that it does not guarantee that a gas line gets built.

Thank you, Mr. President. Thank you, Senator Tilton. Senator Keele. Thank you, Mr. President. I'll do my best to buck my usual trend and be brief.

I will start by unfortunately having to argue to my friend from the Fairview Loop and Palmer area of the valley that ain't nothing in any bill guarantees a gas line gets built. It's not on the table. We might make it a little more, a little less likely, but there's no guarantees in any of this. I think, and while I appreciate the member from North Pole's argument for a much broader approach to taxation. A broad-based, truly broad-based tax doesn't fit within the subject of this bill.

And so we're going to have to leave that aside. I do think, and I think it's important to note, that Amendment 1 really does fix an equity problem in our corporate income tax. We have some companies that develop, transport, and sell Alaska's hydrocarbons, and pay our corporate income tax. And some— the pass-through entities— S corps, LLCs— some, they develop, they transport, and they sell Alaska's hydrocarbons, and they don't. That's winners and losers in the tax code, Mr. President.

That's not good tax design. We should have taxes that don't advantage one business model over another. Company goes out, does a better job, they're more efficient, whatever, they should win, absolutely. But the tax code shouldn't pick that, and today it does. And the provisions in this fix it with pass-through parity.

I do have a little concern about the retroactive effect, and I'm of two minds, Mr. President, because there have been times that the legislature has had very good reasons to place a retroactive effect on a tax change. And I won't tell history stories to a history professor, but I wonder if the member who is carrying the bill might, when they come to their wrap-up, make the pitch for a retroactive approach as opposed to a prospective approach. That one element does give me pause. Thank you. Thank you, Senator Heil.

Is there further discussion? Seeing none— I'm sorry, yes, please go ahead, Senator Bjorkman. Thank you very much, Mr. President. I appreciate the comments from the member in Juneau as I think he stuck to the most prescient arguments about this tax policy, about leveling up corporate income tax and didn't include other things which might be an annex to what's actually happening here. I believe what the member from Palmer was trying to say earlier is that this tax change is a permanent 100% for sure tax change.

Yes. That some people may or may not agree to for a project that we have no idea is going to happen. We heard multiple speakers speak before that the rationale and the reason for this tax change was to offset lease expenditures. Well, if that were the case, Mr. President, you would make this tax change conditional on the project moving forward forward so that when those lease expenditures do happen as a result of the new policy and the gas project starting, that you're protected from that. It's not what this amendment does.

It is a 100% for sure tax change added on to this property tax bill that will happen whether the project happens or not. That's simply a tax increase. It's not to accommodate for— Lease Mr. Mayor. Expenditures that may or may not happen.

I want to come to the defense of many of my friends and neighbors who work in Cook Inlet every day on drilling projects and platforms and in the Swanson River oil field where our statehood dreams really took light, the discoveries there in the late '50s. To say that those folks work hard and their company managers and superintendents, and those folks work hard to make sure that we have volumes of gas. The member behind me from Muldoon said, "We're not at risk." By Jove, they're required to require— to drill for and produce that gas. All the requirements in the world cannot make more molecules appear. Thank you.

So here's the deal. Hilcorp delivered over a half a billion cubic feet of natural gas beyond what they were required to for their NStar contract alone this spring. They'll likely do that again in the very near future. Our electrical utilities are also asking for additional gas beyond what they are contracted for and firm contracts. So here's the problem.

We have claims, wild claims, that we have nothing to worry about, but oh, Mr. President, we do. Because the reality downhole at the drill bit and where the molecules come up and go to your boiler, your hot water heater, That's not the reality of what's being portrayed here on the floor today. There is significant risk. We'll talk about that more as we continue this conversation. But I appreciate our partners in developing our natural resources.

I wish our state functioned more like Governor Wally Hickel intended with our Department of Natural Resources, going out and being the business arm of our state, maximizing revenue. Maybe one day we can be there again. But this provision, it's a 100% tax for sure increase. It's going to happen 100% if we pass it for a project that may or may not happen. So is it to offset lease expenditures?

Well, it could be if it was conditional, but it's not. Are we at risk in Cook Inlet? You betcha we are. So what happens then? Thank you.

Thank you. Thank you, Senator Dunbar. Brief— I'm sorry, Senator Bjorkman. Briefly.

Will the Senate come back to order again? The bill was introduced— or the amendment was introduced by Senator Hoffman. Senator Dunbar then carried the amendment. I think it's in order for him to do the wrap-up, if that is acceptable. All right.

Senator Dunbar in wrap-up. Thank you, Mr. President. I'll try to address some of the concerns that were raised, starting with the most recent about— they're very much related. The Senator from Kenai and the Senator Thank you. I have a question for Senator from Juneau asking about the retroactivity and also the certainty of the escrow provision versus the rest of the bill.

I think it's very much tied to both the rhetoric of the developer and the challenges we saw in Resources Committee. The first thing to remember is that the developer has stated they're going to start right now. They've said that they want to put pipe in the ground in December. Now, whether that's realistic or not, it's hard to say, but we know there's going to be a lot of preparatory work on those gas lease expenditures that's likely to occur from the producers on the North Slope. And that gets also to the, the idea of whether it should be certain or not.

It's very difficult to know what of the expenditures are attributable to the project and what are sort of more regular activities on the North Slope. And those are the kind of challenges we heard at the Resources Committee. It's impossible for them to decouple gas lease expenditures from oil lease expenditures. Mm-hmm. It's also going to be very difficult to know as we head hopefully towards FID, what exactly is the producers getting geared up for this project versus some other kind of normal activity, because we can't again differentiate between oil lease expenditures and gas lease expenditures.

And so I do believe that is why, both because of the rhetoric of the developer and all of our hopes that this bill will lead to immediate action and will start to head towards a gas line. And I'll say, For those folks who say that this might not get us a gas line in opposition to this amendment, in the same way that they say there's no modeling in opposition to this amendment, I think they'll be singing a different tune once we get to the underlying bill. Because the same kind of critiques apply to the underlying bill. And we've heard a lot of promises from the governor and from some of the supporters here that this indeed will be the silver bullet that gets us the gas line. Whether or not you believe that is true.

We're going to have to vote on hopefully that belief. Now, getting back to some of the concerns raised by the member from Tok, and they're also connected to things that were said by the member from Muldoon. The issue of does this burden the project? It doesn't. And we've heard from Glenfarm earlier that it wouldn't.

And the reason is because— [SPEAKING IN TOKI] It's a tax on taxable income. In Alaska, we have a net tax, as the Majority Leader discussed. So it's different from a higher rate of the AVT. It's different from a property tax. Those you pay regardless of how much money you're going to make on it.

You're going to have to pay that however many cents we decide that go down that pipe. In contrast, if you're not making profits, you're going to pay less, potentially nothing, on your corporate income taxes because again, it's a tax on profits. That also gets to the concerns about the smaller operators in Cook Inlet. If it is true, as the member from Tok said, that it's a break-even proposition in Cook Inlet, then they will pay almost nothing in corporate income taxes because they won't have taxable income to, to do so. If it is such a burden to them that they are dropped and near nothing in profits, then we do have another lever to pull.

And the DNR can work with— DNR, excuse me, can work with them to pull, and that is royalty relief. Some of them have gotten royalty relief, but not as much as they want. So we have the tools in Cook Inlet to allow the small producers to go forward even with this tax provision in. And we know that it doesn't burden the project because it's on taxable income. And for those reasons, I think it is a low-risk proposition for the project, but potentially a high-benefit proposition for the state.

Now, we have to meet the rational basis for equal protection in this case. I wouldn't say we have a rational basis. I would say we have a narrowly tailored amendment for a compelling government interest, a much, much higher level, because this addresses the lease expenditure issue that we— Yes. Spoke about before. The last thing I'll say, there's been rhetoric about this being a clean bill.

We need to keep a clean bill. This right now, without this amendment in here, is not a clean bill. It's a bill with a PFD and school-shaped hole in it that we are trying to repair. We need to repair this bill so that the people of Alaska don't see a substantial loss in their income during the construction phase because of the lease expenditure issue. So I urge your support for this amendment.

Thank you, Mr. President. Thank you, Senator Dunbar. There was objection earlier. Is that objection maintained? Very well.

If you are ready for the question, question being, shall the Senate adopt Amendment Number 1? Senators, you may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 9 Yeas, 11 nays. By a vote of 9 yeas and 11 nays, Amendment 1 has failed to pass the Senate.

Madam Secretary. There is Amendment 2 by Senator Hoffman on members' desks. Thank you. Senator Hoffman. Mr. President, I move Amendment No.

2. There's no objection. Please explain your amendment. The difference between Amendment No. 1 And Amendment No.

2 Is on page 5, line 10, where the effective date would be January 1st, 2028. Thank you, Senator Hoffman. Is there discussion?

Who asked for that? Brief it is.

Will the Senate come back to order, please? We are on Amendment Number 2. And Senator Clayman, you have an amendment to the amendment, is that right? Thank you, Mr. President. I move amendment number 2— amendment number 1 to amendment number 2.

Objection. As an objection, would you please explain your amendment, Senator Clayman? Thank you, Mr. Speaker. The amendment number 1 to amendment number 2 changes the effective date of amendment number 2 from January— from 2028 to 2029. Page 6, the reason to go from a— instead of a 2-year delay for the S corp tax to a 3-year delay for the S corp tax is to give a bit more time for that to take effect, for regulations to take effect, and give companies a little bit more space in terms of that dynamic.

I think it makes it particularly from certain perspectives, not speaking for the industry, but I think some in that business would feel like a little a little bit longer effective date would be more reasonable. That's the reason for the 3 years instead of 2 years in Amendment No. 1. Thank you, Senator Clayman. Is there discussion on Amendment No.

1 To Amendment No. 2? Senator Yunt. Thank you, Mr. President. I rise in support of this amendment to the amendment.

Everybody here is fully aware that I actually support a whole lot of what's in than the original amendment. And I do think we need to get there, but I think we need a little more time to look it over. I think I firmly believe CPAs and everybody else needs a little more time to look this over, so I'll keep it brief, but I support the delay. It gets us there in the long run, but it gives everybody time to prepare. Thank you.

Thank you, Senator Yount. Is there further discussion?

Please go ahead, Senator Dunbar. Thank you, Mr. President. I rise in opposition to this amendment to the amendment. Several reasons, but most of them have to do with what we talked about before with the lease expenditure issue. We know that that will start soon as the preparations are made to produce some of the gas, we hope.

But it's also the case is that the bill itself is geared around this date. This is not an arbitrary date. We know that the— as some folks call it, the kill switch, which reverts the bill back to the property tax system if there is no FID, that happens in 2028. Now, effectively what we are doing, if lease expenditures begin and construction begins, and those write-offs are occurring, and we've pushed this out another year, we have reduced oil revenue for that entire year to the tune of potentially tens or even hundreds of millions of dollars. And for that reason, this is an anti-schools amendment to the amendment, essentially.

Mm-hmm. Because we know that that is where the real battle around funding is happening right now. We are running out of money to fund education and PFDs and road maintenance and everything else. The last thing I'll say is it might be the case that some folks will only support the underlying amendment if this gets in. But unfortunately, I can't— I just don't have trust in that.

We've seen on this floor too many times folks will amend something and then vote against it. And that inability to be consistent which was a much stronger social norm on the Assembly where I came from. If you voted— if you amended something, you voted for it. But that's just not the policy here. And too many times on this floor, people have put forward something like this amendment to the amendment and then voted against the underlying amendment.

And so because of that, because the lease expenditure issue we expect to happen a lot sooner, because the bill is geared towards 2028 and not 2029, I urge folks to oppose this amendment to the amendment. Thank you, Mr. President. Thank you, Senator Anbar. Is there further discussion?

Senator Bjorklund. Thank you very much, Mr. President. I rise to just point out a rhetorical flourish in the previous speaker mentioned that this amendment was somehow anti-schools. Once again, If it were, if the underlying bill about property taxes wanted to mirror our current property tax structure in any way, as we think about adjusting AVT, it would direct a large portion of that AVT toward the state general fund. But it doesn't.

We know, we've heard from the member from Sitka many times and others that when oil prices are low, that the chunk of revenue we get from oil and gas that's largest is property taxes. And so as decisions were made by members to craft increases to AVT in this bill, Again, which has been argued by members that we need more revenue from, choices were not made to put additional funds in the general fund, but distributed through the community assistance program. It's a choice. We will have amendments on that later. But to say that somehow delaying an effective date for this is anti-schools is— is the kind of rhetoric that's not conducive toward building consensus or teams.

It's a policy call about if you really want this to happen and want to build stability, then you might delay the effective date. And that might build more consensus for bill support. And as we go and talk about this generally, I think if we stick to to the policy at hand and talk about what it does or doesn't do, then I think that's better in the long run. Thank you. Thank you, Senator Bjorkman.

Is there further discussion?

If you are ready for the question— I want to wrap up, please go ahead. Just briefly, Mr. President, I appreciate the comments from my colleague from East Anchorage suggesting people sponsor amendments. And then don't vote for the bill if the amendment gets adopted. That's never been my practice. The suggestion that I might be doing that has no basis.

I introduced this amendment to make the bill more attractive to my vote. Thank you, Senator Kliman. If you are ready for the question, the question is, shall the Senate adopt the amendment to Amendment Number 2? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 7 Yeas, 13 nays. And so by a vote of 7 yeas to 13 nays, Amendment 1 to Amendment 2 has failed to pass the Senate.

We are now back in the second reading.

Is there further discussion on Amendment No. 2?

There was objection. Is the objection— pardon me, go ahead, Senator Myers. Thank you, Mr. President. First off, I want to thank the sponsor for introducing a very similar amendment so I could speak I don't want to speak twice on the same topics.

So we've talked a little bit about how the S-Corp tax might affect Cook Inlet. I just wanted to mention a little bit about how it might affect Fairbanks. We've got provisions for a spur line to Fairbanks in the underlying bill here. And while nothing is finalized, things are still being discussed, there are a couple of entities that are talking about building it, and one of those entities, while they often participate in oil and gas services, they are not an oil and gas company. They don't operate pipelines.

But if they built the spur, they would. So they're currently not subject to tax— to corporate tax, excuse me, but they would be if this amendment passed.. And what I'm concerned about, like a lot of taxes that get put on businesses, this corporate tax is then going to get passed along to the cost of the gas to the consumer up in Fairbanks. And then just— we're just passing another tax and increasing costs on our own residents again. And that's— as opposed to the underlying bill where we hope that we're eventually exporting a lot of gas.

The Fairbanks Spur, that's not the case. It's going to one place. It's going to Fairbanks. There was some talk about how if we make things harder on Cook Inlet, well, we've got another way to fix that with the royalty relief. Well, two things.

One, one company's already getting royalty relief. So that already tells me how much trouble we're in. And second, how much sense does it make to increase one revenue stream knowing you're going to have to decrease another revenue stream to make it all work.

There was talk about it's not a burden for the project because it's only on profits. True, but if the profit margin drops, sometimes people look elsewhere. You know, if I can get— even if this is profitable, if I can get a higher profit, I move somewhere else. And that's— A big question for this gas line is, where do we get the investment dollars? Are we attractive as an investment?

So even if the project is still profitable, if we're lowering the profit margin, we're making ourselves less attractive, Mr. President. And finally, since the PFD was brought up, saying that not having this amendment makes the PFD go down— Mr. President, according to current law, the PFD is one of the few things in our budget that already starts the year fully funded and We are the ones that change that. Thank you. Thank you, Senator Myers. Is there further discussion?

Brief at ease. Brief at ease.

Will the Senate come back to order, please? We are considering a movement Amendment number 2. Is there further discussion?

Seeing none, there has been an objection. Are you ready for the question?

Question being, shall the Senate adopt amendment number 2? Senators may proceed to vote.

The Secretary will lock the roll. Do any senators wish to change their vote? No. The secretary will announce the vote. 11 Yeas, 9 nays.

And so by a vote of 11 yeas to 9 nays, Amendment Number 2 has passed the Senate. Madam Secretary. There is an Amendment Number 3 by Senator Hoffman on members' desks. Senator Hoffman. President, I move Amendment Number 3.

President, objection. Would you please explain The amendment, Senator. Amendment number 3 is regarding the off-ramp on page 27, line 30. There was much discussion about force majeure. We felt that if something happened to that nature, that the legislature would go back and address an extension.

So this was not necessary, but I believe this clarifies the issue and the legislature can go back and extend the date if there was an event of force majeure. Thank you, Senator Hoffman. Is there discussion? Brief at ease.

Back to order, please. We are under Amendment No. 3. Senator Clayman. Thank you, Mr. President.

I just want to note that force majeure is a term that is not defined in the in this act. I'm not sure whether we're dating back to Roman times, the definition of force majeure, something in France, or whether it comes from England, but I am confident that hopefully the force majeure does not occur, and if they do, the courts will figure out what it means. Thank you, Mr. President. I'm pleased to support the amendment.

Thank you for clarifying that, Senator Clayman. Senator Kaufman. I appreciate the point made by my My colleague from Anchorage, that's part of the problem. Having this date in the bill that this is attempting to mitigate is part of the problem with getting investment.

If people are looking at this and we have a hard stop date as noted on line 26, 27 about construction completion, completion, and then there's force majeure and the debates around all of that. I'm afraid we're creating something that's going to be unattractive to investment. So I'll support the amendment because it sprinkles a little sugar on a bad problem, but it doesn't fix it. Thank you. Thank you, Senator Kaufman.

Is there further discussion? If you are ready for the question. I'm sorry, what? The objection has been removed. If there are no additional objections, then Amendment No.

3 Has been adopted. Madam Secretary. There is an Amendment No. 4 By Senator Bjorkman on members' desks. Thank you.

Senator Bjorkman. Thank you very much, Mr. President. I move Amendment No. 4. Objection.

Objection. Would you please explain, Senator Bjorkman? Absolutely, Mr. President. Amendment number 4 removes a provision added by the Senate Finance Committee to subject the alternative volumetric tax revenue to provisions under the required local contribution. We talked a little bit about this during the regular session and how required local contributions work, Mr. President.

But I'll spare those details and cut to the chase. Effectively, what this provision added to the bill does is it cuts the ABT revenue that was asked for by the Kenai Peninsula and revenue asked for by the Denali Borough and revenue asked for by the Mat-Su Borough. Mm-hmm. It cuts that effectively by over 25%. How does that happen?

Well, by making AVT subject to required local contribution, it reduces the amount of state aid that the state gives school districts equal to that amount. For my borough, it'd be, according to legislative finance, $26 million per year. So this was money that my borough was expecting to receive to help maintain roads that would be impacted by the project, to be able to pay firefighters and EMS personnel and the Kiskee Fire and Central Emergency Services and other places around the borough who are going to be called on to respond to the increased traffic, population, and all the impacts that come with the project. It also was asked for to provide for additional solid waste use and additional facilities at our dump, which is a huge portion of what we do at our borough.

Because this eats away at that revenue, our local taxpayers now on the Kenai Peninsula are going to be asked to pay more taxes to cover those costs. And Mr. President, that simply wasn't the deal. The Kenai Peninsula Borough is not looking to get rich off of this scheme. This is not a get-rich-quick deal. I would note that the boroughs affected here by this required local contribution are only 3 along the project corridor.

[SPEAKING NATIVE LANGUAGE] according to alleged finance. It's the Denali Borough, the Mat-Su Borough, and our borough, Mr. President, Kenai Peninsula Borough. The other two are absent from that discussion. It's fascinating. But as we talk about the impacts and what it is we're asking for, the Kenai Peninsula Borough is willing to accept reduced revenue from property tax The axe is leveled on this project.

But we asked for enough. We didn't ask for more. We didn't ask for some with icing on top just because. We're the only community along this project corridor that has a facility that will be there for my lifetime and my kids' lifetime and probably theirs too. Mm-hmm.

And it'll be there every day with increased traffic, increased cost, and increased impact. Other facilities are 60 miles from town. Or the facility is property that's a pipe buried in the ground. What the element that has to do with the required local contribution added at the finance table does is it shifts cost onto to the local taxpayers of the Kenai Peninsula Borough. I urge members to support me in this amendment and support sticking to the deal that was begun in August with conversations among mayors and others to get enough to cover project impact costs.

Thank you very much. Thank you, Senator Bjorkman. Is there further discussion? Please. Brief at ease.

Will the Senate come back to order, please? We are on Amendment Number 4. Senator Tobin.

Thank you, Mr. President. I appreciate this opportunity to speak in opposition to this amendment. And, you know, I will tell you that the underlying bill, this particular proposal that's included, isn't actually a full evaluation of the particular assets that are going to be built in the Kenai Peninsula. And I struggle with that. I struggle with that, Mr. President, because we don't exempt any other resource project from the required local contribution for public education.

[FOREIGN LANGUAGE] We don't exempt TAPS or the marine terminal in Valdez. They have to pay their fair share. We don't exempt White Pass or the Yukon Railroad. No, those have to pay their fair share. We don't exempt fish processing facilities in Naknek or Unalaska.

No, they are a part of the calculation that contributes to their public education system. And it has been that way since 2012. Now, what my colleague from Kenai is talking about is exactly why in the bill before you, you see a second or clause. And that second or clause says that you either pay 2.65 mils on the value of all real and true property in your community or 45% of total basic need for the education system in your community. That 45%, that stipulation exists for exactly situations like this.

That's why places like Valdez on Alaska, Bristol Bay, North Slope, and Skagway pay the alternative 45% because they have large facilities in their communities that drive economic boom in their communities. Now, one of the things I think is really important that I just want to highlight is what is being asked for by removing this section of the underlying bill is to give one community special treatment, special treatment that is not provided to any other community with oil and gas facilities or property. I just mentioned Valdez. The Valdez Marine Terminal is worth $1.4 billion. In 2012, that was a huge impact to their total required local school funding.

And what did they do? [FOREIGN LANGUAGE] They paid their fair share and they paid it proudly. They actually talked about it when they called into our Senate Education Committee and said, we are proud to pay our portion of local school education funding because we want to support our students. Let's talk about North Slope and their property that they have on oil and gas. What is its value?

$28 Billion. And we do not exempt any of that from the required local contribution. Constitution statute, Mr. President, that would mean that North Slopeboro would in effect pay $500 million to support their public education system if that 45% cap was not already in statute and currently is here in this legislation. And North Slopeboro can do it, and they have some great facilities up there. I think Keenei Tan as well.

Under this bill, they're making out pretty well. They'll have the resources to support their public schools. Now, one of the things I think is really important to note in this conversation is not all communities' economies are the same. We don't carve out, as I've mentioned before, special exemptions for canneries or fish processing or potentially fairgrounds or ports. We say that they're all part of the required local contribution formula because we recognize that when we have local buy-in from our communities, we get better education outcomes.

I think it's really critical to highlight that piece. Because it's going back to what our constitutional delegates discussed. This is a shared responsibility to support our public schools. Public education is the foundation of our communities, and we all have an obligation to ensure that our kids receive the best education possible. But that's not solely on the state's shoulders, and that's surely not solely on our community's shoulders.

This is a collective obligation that we share. That is why the 45% cap is is not 50, it's not 55, it's 45. That means that the local community gives a significant amount, but not the lion's share. That is the state's obligation. Now, one of the things I think is really important is that this required local contribution calculation started in 2012 at a time where we had a very different dynamic in our state.

What is asked for in the underlying bill is a novel tax structure. It's called AVT, Alternative Volumetric Tax. And what this amendment would do is say if you have those type of facilities in your communities, you don't have to contribute to your public education system with those resources. Those resources that are going to bring jobs to your community, new homeowners, they're going to have new businesses prop up. You're going to have all sorts of economic boon, but none of that is going to be a part of how you calculate your local contribution for schools.

That's all separate because we're not going to tax the facility that brings in those community members, those dollars. Now, what does that mean? That means someone has to pay for that public education system. And who's on the hook? The state.

The state will take funds that should be for statewide projects and give it to communities specifically who have these AVT facilities and infrastructure. That means instead of paying for state troopers, instead of paying for state plowed roads, instead of paying for the PFD or road maintenance projects that help all Alaskans get to and from places, we're going to be supplanting a local contribution for schools. Instead of statewide investment in projects, we're going to be paying a community's required local contribution to only those whose facilities are subject to this AVT. Now, one of the things I think is really important is the idea of fairness. That is incredibly important.

Important to me, Mr. President, that was incredibly important to you and colleagues who wrote the formula for required local contributions. It's got to be fair. That's why we have a 2.65 mills on all real and true property in a community or 45% of basic need for a school system in your community. That was considered fair in 2012. There are 5 communities who currently pay that 45%.

If this bill passes, if these are built, there might be 6. 6 That can fully fund their education system at that 45%. I urge members to vote no on this particular amendment because it is not fair for Alaska. It's not fair for all of our communities, and it's definitely not fair for the students in our schools. Thank you, Mr. President.

Thank you, Senator Tobin. Further discussion? In wrap-up, Senator Bjorkman.

Thank you very much, Mr. President. I found out many things along the way in discussing this bill and kind of how we came to be. And the agreement between the mayors along the pipeline corridor about these properties not being subject to RLC was unanimous and wide. And it was adopted by the House and understood that this would throw a wrench into how impacts are calculated. If the Kenai Peninsula Borough and the Mat-Su Borough and the Denali Borough, who all lose significant percentages of revenue that they would generate from the ABT due to this provision, knew that it would be included in the deal, they would have asked for additional monies from the project.

They didn't do that. If the amendment crafted at the finance table were designed to be fair and treat everybody equally, it would have done that. But it didn't. It left out— out one very large community from having their AVT calculation being reduced. They're held harmless under this provision.

It's interesting. Also, when we talk about fairness as a portion of, of this amendment that got added at the finance table, only AVT is included in this portion subject to required local contribution. Mm-hmm. Not money that local communities get under the Community Assistance Program, which is also money included in the bill. As AVT doubles, that money, if again, if it were a concern to fund schools and roads and public safety and the dividend, as stated by the previous speaker, that money would have gone largely to to the general fund.

But that's not what the bill says.

So as we look at what the deal was and what the understanding was, to reduce the economic burden of this project to the maximum amount that we could and still provide for maximum benefit for Alaskans so that we could get a project, that was the deal that was agreed to by the mayors and many other folks, if we knew that we were going to have additional dollars burdening our borough, a reduction of over 25% here under this provision that would add— was added, we would have asked for more. We need more to cover our costs. If this provision goes through, I'm very concerned that the taxpayers of the Kenai Peninsula Borough are going to be on the hook for project impacts. That's one thing that my goal I've sought to avoid. One more thing that RLC doesn't apply to.

Any community benefit agreement or arrangement that a muni might agree to with the developer to get money on the side is not subject to AVT. [SPEAKING SPANISH] There was a deal floated last night and earlier today, Mr. President, to do just that. Said, hey, certain legislators, if you do this, we'll give you some more money on the side, a CBA. You can spend it on education, you can spend it on whatever you want. Would that money be subject to the required local contribution?

No. But if you have lots of legislators in your community and the project needs your vote, get a little some of that sugar that one legislator was talking about earlier. If this is about fairness, it would be fair. The deal that the mayor struck is a deal to treat everybody the same and to not have this project implicate RLC. Thank you.

And further burden the project. Thank you very much, Mr. President. Thank you, Senator Bjorkman. Brief at ease.

Will the Senate come back to order, please?

So we have had Amendment 4 presented. We have had the discussion. We have had the wrap-up. If you are ready for the question, question being, shall the Senate adopt Amendment Number 4? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 8 Yeas, 12 nays. And so by a vote of 8 yeas and 12 nays, Amendment Number 4 has failed to pass the Senate.

Madam Secretary. There is an Amendment Number 5 by Senator Keel on members' desks. Thank you, Senator Keel. Thank you, Mr. President.

I move Amendment Number 5. That's one objection. Senator Keogh. Thank you, Mr. President. Amendment number 5 is project labor agreement language.

The bill the Governor introduced to start the special session, SB 2001, included some project labor agreement language. It was a little vague. And about a week ago, there was a great step forward, the signing of a memorandum of understanding between 8 Star and the building trades— or many of the building trades. Great, excellent step forward. But it revealed, I think, especially the conversation after, a little bit of confusion about what the requirements were and should be for a PLA.

So this amendment is our chance to clarify what we expect that minimum to be. Mr. President, you will see in this amendment that it applies to all work on all phases of of the project that take place in Alaska. And you'll see that phrase peppered— or the phrase "in the state" peppered throughout the amendment. I am not attempting to extend a project labor agreement to a Korean steel mill. They're not our job or our problem or our jurisdiction.

But for work in Alaska, Mr. President, this amendment requires a PLA for all phases. A project as big and as complex as this really needs one. They reduce risk. They reduce cost overruns. If nothing else, they make labor costs predictable.

I think folks remember some of the tales of the pipeline days with bidding wars for workers. They allow a more efficient and effective way to coordinate work. They prevent all kinds of worksite issues. And they help deliver projects on time. Thank you.— the other element that you will see in Amendment Number 5 that is added, Mr. President, is a requirement for at least 15% apprenticeship use on the project.

It's a pretty standard provision in lots and lots of PLAs. It is particularly important here, Mr. President. Training up apprentices are a crucial way to bring the next generation of Alaska workers into these skilled trades, into these high-wage jobs that support families, to help them build and develop and cement skills that apply not only to the construction of this pipeline, but to future construction projects throughout the state. Depending on the trade, that might— those skills might translate to highway work, they might translate to oil patch work. We could go on and on and on.

[SPEAKING ENGLISH] Mr. President, our nation has a terrible dearth of skilled hands. 5 Out, 2 in is the shorthand. For every 5 skilled trades workers who retire in America today, 2 are entering. That's a national problem.

Alaska's not doing any better. The member who sits next to me here often talks about nonresident hire. Recently, the Alaska Department of Labor published a finding that we imported 23% of our workers in 2024 was the highest percentage since tracking began, and that the long-term trends and demographic changes mean the challenge of finding workers will persist. This amendment doesn't imagine that, uh, every single person who works on the Alaska LNG project will stay in Alaska. That'd be great.

But to the extent possible, We should hire Alaskans. We should make sure they have a living wage. We should avoid confusion and cost overruns and labor difficulties on a project. And we should make sure that we are training the next generation of skilled people in these trades. We will need them for Alaska's future.

So, Mr. President, with that, I recommend a yes vote on Amendment Number 5. Thank you, Senator Keogh. Is there discussion?

Brief adieu.

Will the Senate come back to order, please? We are dealing with Amendment Number 5. Is there further discussion at this time? Senator Kaufman. I think this is well-intended, but it is an example of things that keep getting piled on that make the project less tenable.

I believe that the developer will have to negotiate with labor, and the biggest challenge is going to be finding qualified people. I have been on multibillion-dollar projects. Nobody there is going hungry. Trust me, everybody gets paid a pretty good rate. And the more that we get in the middle of it with things like this, the more that we're making it difficult.

So I can appreciate the sense that we need to do something like this, but I can also say that from the folks that are going to be looking at the framework that we're setting in this legislation, that keep piling this stuff on, it's a deal killer. Yes. And it will just let the thing sit there and languish. Developers and labor are— that's what they do. Let them negotiate.

They are very good at it. Projects get done all the time and there does not have to be statute that narrows it down. They are going to probably hire everybody they can possibly get from Alaska because that shows good numbers. There's a number of drivers for that already anyway. But just piling on with this, I'm just— I'm afraid we're losing track of getting something done that will deliver gas for Alaskans, stage 1 and stage 2, make the potential project, you know, the big financial play for the state.

First thing is get a dang pipe put through Alaska. And the more we pile on with things like this, I'm afraid we're just falling off the mark. Thank you. Thank you, Senator Kaufman. Is there additional discussion?

Senator Merrick. Thank you, Mr. President. I move and ask unanimous consent to abstain from voting due to a possible conflict of interest arising from my spouse's work as a business manager of a trade union and his role as the president of the Alaska Petroleum Joint Crafts Council. There has been objection. You will be required to vote.

Thank you.

Please go ahead, Senator Dunbar. Thank you, Mr. President. I rise in support of this amendment. It's actually largely for some of the reasons that the previous speaker from Anchorage mentioned. It is true that most contractors at this point— we're having a construction boom in Alaska right now.

There's a lot of federal money coming into the state. It is true that most contractors already pay above prevailing wage. This is a floor and not a particularly large ask. This provision will help ensure a stable workforce for the project. And I'll say, we just had, we all saw, a very large announcement about an MOU and a PLA.

These are basic things that will go into that PLA that we in Alaska expect. The last thing I want to say about apprentice utilization is important to me. Apprentice utilization is an important pathway for veterans to get into our workforce. We know that there is a higher rate of hiring in the veterans community using these apprenticeship programs. In fact, at the end of the regular session, we passed a bill sponsored by a member of the other body trying to help veterans get into the construction trades.

Because we know it provides that meaning for a lot of folks coming out of the military. Because of that, I'm strongly in support of the apprenticeship utilization portion and I urge folks' support for the amendment. Thank you, Mr. President. Thank you, Senator Dunbar, for the discussion. Senator Wilkowski.

Thank you, Mr. President. I move and ask unanimous consent to be excused from voting on this amendment and for the bill later because of a potential conflict. I work for an organization that is a party to this agreement, labor organization that is a party to this project labor agreement. Thank you. Senator Wolkowski, it has been objected to.

You will be required to vote. Thank you. Senator Wolkowski. I could speak briefly to the concern and why this amendment came about. We all saw the press conference, organized labor, a lot of guys in hard hats, and it carried a lot of weight in the state and in the building.

With people all across the state. There was a lot of excitement about it. I know people in organized labor were very excited about it. They thought they had an agreement, and to be a binding agreement, a binding agreement. The problem is they signed it.

It was a, I can tell you it was a heated negotiation. I was not a party to it, but I heard some of the stories about it. But they came to an agreement, and they thought it was binding. And then after the press conference, there's a press release put out by Glen Fahren saying they signed a non-binding agreement. And then the governor puts out a statement saying there's a non-binding agreement.

It's just a letter of intent. That's why— that's where this comes from. It's simply putting into statute what the parties agreed to. And so take away— you know, that's how you take away disputes. That's how you avoid lawsuits.

You— we just clarify it right now. Avoid that. And I also, on the apprenticeship utilization, I think it's a critical portion. It's actually lower wages, a 15% requirement, apprentices get paid lower. That's lower wages.

And it's also training our future workforce. So support the amendment. Thank you, Mr. President. Thank you, Senator Wielechowski, for the discussion.

And wrap up, Senator Keehl. Thank you, Mr. President. Cue the soaring music and the eagle should fly Mr. Chairman, this amendment clarifies what we expect from a massive project in Alaska for which we are providing a lot of incentives and a lot of benefits. Project labor agreement pays prevailing wage. We have heard that won't be a problem at all.

Hires apprentices. We have heard that it will hire everybody who is possibly interested in working on it. And just get some of the potential labor issues out of the way so that this project has a better chance of coming in on time and on budget. So good for Alaska, good for workers. I ask for a yes vote.

Thank you, Senator Keogh. If you are ready for the question, question being, shall the Senate adopt Amendment Number 5? Senators may proceed to vote. The Secretary will lock the roll. Do any Senators wish to change their vote?

The Secretary will announce the vote. I'm sorry, Senator Rosser. Let's avoid the roll and we'll try that again. [FOREIGN LANGUAGE] Okay, we have voided the roll. If you are ready for the question, the question being, shall the Senate adopt Amendment Number 5?

Senators may proceed to vote.

The Secretary— there we go.

All right. The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 16 Yeas, 4 nays.

And so by a vote of 16 yeas and 4 nays, Amendment Number 5 has passed the Senate. Madam Secretary. There is an Amendment Number 6 by Senator Keele on members' desks. Thank you, Senator Keele. Thank you, Mr. President.

I move Amendment Number 6. Objection. There has been an objection. Senator Keele. Thank you, Mr. President.

Amendment Number 6. It's a little hard to read, so I'll just make it very simple. Here's what it does. The project developer doesn't get the benefits we're proposing to offer until they get a full export project ready to go. Why on earth would Kiel do that?

Mr. President, we've been told that this project was phased into Phase 1, an 800-and-some-odd-mile, 42-inch 2-inch diameter steel pipeline. And phase 2— sizable gas treatment plant, huge LNG plant— to de-risk the project. Mr. President, there are a few things you can do that actually take risk out of a project here and there. We just voted for one of them. But when you talk about the cost overruns on megaprojects, there's a lot less you can to do.

And what phasing this project really does is shift the risk. It moves the risk. Mr. President, we should talk about the price tag on a theoretical Phase 1 pipeline. The developer came in with some good numbers, or numbers that they say are their best numbers. The midpoint on the pipeline, Phase 1, was just a little over $15 billion.

Of hard costs. That doesn't include a contingency. Mr. President, a kitchen remodel needs a contingency. There is no DOT project for construction that doesn't have a contingency. So, you add a 20% contingency, that's an $18 billion pipe, and that's before you get to cost overruns.

Mm-hmm. $18 Billion does not spread well across the amount of gas that Alaskans burn in-state. Now I look forward to that happening down a pipeline. I look forward to Enstar and Chugach Electric and MEA having the gas they need and Fairbanks getting gas and replacing an old coal plant and getting more and more homes on gas. That'd be great.

But you put all that together and you're not up to 200 million cubic feet a day averaged out across the year. [FOREIGN LANGUAGE] Mr. President. Mm-hmm. 200 Million cubic feet a day, you know, they sell it in 1,000 cubic feet, so in rough terms, that's about 200,000 units you're selling.

So we worked through some of these numbers, numbers provided by the Department of Revenue, numbers provided by our consultant from Gaffney Cline who works for the legislature. We heard talk about an 80/20 debt-to-equity structure, so, If you need to raise $20 billion— or 20%, excuse me, of $18 billion, that's more than $3.5 billion, $3.6 billion. State can exercise an option to put in a quarter of that equity. Well, there's $900 million. Maybe we'll come up with that $900 million, maybe we won't.

But all of that is before cost overruns. Mr. President, when you get into cost overruns, in the billions of dollars— and we'll talk in just a second about how common that is— you don't have a lot of flexibility to spread that across 200,000 units for sale each day. You just don't have a lot of room to soak it up. So with $3.6 billion in equity and $14.5, $14.4 billion borrowed from the bank, how do you come up with extra money? You probably can't borrow much more.

It's hard to get to less than a 20% down payment on these things, or how I think of the equity because I'm just a homeowner. You could reduce equity investors' return, right? We've done all our modeling figuring somebody puts in equity, expects to get a 10% return. Well, maybe they'll take a haircut. I'll take, you know, 7% or something.

But that doesn't get you much, not when you have billions and billions of dollars to come up with. So where does it come from? Well, highly likely, be an extra cash call. Turn to those equity investors and say, you know, we're going to need some more money, cash up front. Now, if we invest, Mr. President, 25%, that's us.

We're one of those equity investors.

Probably, with the economics as tight as they have to be to do an $18 billion, 800-plus mile pipe, it's probably just us. I don't know how many of the hedge funds or pension funds or big investment groups are going to go in for cash calls in addition to reduced return on equity. That gets pretty unattractive to your investors. So what are we talking about in terms of cost overrun risk?

Well, the folks at Pegasus Financial who have done— worked on megaprojects and also advised about megaprojects— they've been on both sides of the table— talk about cost overruns being almost a certainty, Mr. President. I won't rehash the hearings we had in Senate Finance and their testimony. I know they spoke as well to Senate Resources. The iron law of megaprojects is big cost overruns and delays. So we should look maybe at some, some recent big pipeline projects.

What did those look like? Mountain Valley Pipeline, supposed to cost $3.5 billion. That's not too bad. Cost $9.5 billion by the time it was done. It's not quite 3 times its cost estimate.

3 Times. But it's a lot. The Atlantic Coast Pipeline is supposed to cost $4.5 billion. By the time— I don't know how much they'd spent— by the time they cancelled it and left the project alone, it was up to $8 billion. Then we could look relatively nearby, down in Canada, at the Trans Mountain Pipeline expansion.

This should have been an easy one, Mr. President. Long pipeline, yes, but the Trans Mountain Pipeline, almost the entire thing, follow— it was an expansion, followed the existing pipe. In fact, a bunch of their costs were for new pumps and compressors in buildings that serve both the old pipe and the new pipe. That's how tightly it followed the route, right? And I think that was 70, 75, I don't remember, percent of the route.

11%. 11% Of the route was existing, pre-existing utility pipeline core— or utility corridors, most of them pipelines. So they had good geotech, they had all the rights in hand, no problems, right? Just a little bit, they didn't have the rights of Way Too and the geotech and engineering all done before they started this project. It was supposed to cost $5.4 billion.

$34.2 Billion, Mr. President. That's coming up pretty quick on 6x. That's a lot of money. So, let's not assume disaster. What would it look like if we only had a 50% cost overrun?

Say the $18 billion project needed 9 more. Well, that's almost 3 times the initial equity, right? But hey, let's assume that some of those investors take a cut on their return and some of those bankers will let us do the debt for more than 30 years. I know 20 is the standard, but we're already talking about 30 to stretch the dollar. But maybe somebody will loan us 40-year money or maybe they'll do a balloon payment at the end, you know.

So, let's assume we only need to raise 2 times the initial equity. That turns Alaska's $900 million into $2.7 billion. Hedge fund that wants to get in at $100 million, which is not chump change, all of a sudden they got to come in at almost a third of a billion dollars. How do they explain that to their their investors? Mr. President, they don't.

That's not where the money's going to come from. Because they're all going to say, "Thanks anyway." So does the project go bankrupt? Do we get building 4 camps or 4 construction crews working simultaneously, you know, so we're not just running north to south? That's what the developer said. Get a couple hundred miles in the pipe in the ground as the cost overruns mount.

Mm-hmm. Right? We all celebrated FID. We went and we all wore hard hats at the ribbon-cutting. I guarantee you we will, Mr. President.

We're politicians. A couple hundred miles on the pipe and the pipe in the ground and cost overruns mount, the equity doesn't come. Think they go bankrupt? Think we just leave it? Uh-huh.

Mr. President, nobody in this room is that naïve. There's one deep pocket around around this project. There's one entity that's had a 50-year dream of building the pipe.

There's one place you can go for billions and billions of dollars so that we're not abandoned, so we don't let the dream die. You can write the political ads now, Mr. President. Actually, come to think of it, they sound in my head a lot like the ads that are being run today in support of passing this bill. Where would we get that money? Right?

When they come to the state, it's not in the law, right? You can't ban somebody from saying, "Please, sir." Right? Where would we get that money? It's not in the CBR. There's $3 billion in the CBR.

That takes 30 votes in the House and 15 votes in the Senate to get at. Good luck. Well, maybe we could borrow it. Alaskans support the Project? Then we put a general obligation bond on the ballot.

Please, Alaskans, let's max out the state's credit card. We want that pipe. If we max out the state's credit card today, I think we've got a debt capacity unused of about $1.7 billion. That ain't gonna fill it. Where do we go, Mr. President?

What do we do? 'Cause the ads are running constantly and people are emailing and calling saying, "Don't let the dream die. We need the gas." Hmm. Where's that kind of— oh, wait. You know what, Mr. President?

I looked at the permanent fund website and there's $11 billion uncommitted in the earnings reserve today. That takes 21 votes in the House, 11 votes in the Senate. Whew. That ever happen before? People wouldn't do that.

Well, Mr. President, remember I mentioned the Trans Mountain Pipeline down in Canada? That's what it took— great developer. I think Kinder Morgan, right? An internationally known firm. They are experts.

They know what they're doing. But I gave you the numbers before for how far over they were.

So, with a multi-, multi-billion-dollar government bailout from Canada, they finished the pipe.

Multibillion-dollar bailout. So, Mr. President, when we look at phasing the project, we're not reducing the risk. We're talking about shifting the risk. And we can't shift it to a couple hundred thousand units for sale a day. Now, the export terminal, a full project, that's the golden goose.

That's the dream we all share. That's genuinely cheap gas. From Fairbanks to South Central. It's a potential for great income. But it's also an order of magnitude more units across which you could set— spread a cost overrun.

We throw that term around, order of magnitude, usually it just sort of means it's a lot bigger. Literally, mathematically, an order of magnitude more. 3 Million units a day. Well, now you've got something, Mr. President. Now you've got something to take to a banker.

Admittedly, it's a bigger project. It's more expensive. Call it $60 billion, whole thing. And it'll have a different distribution of debt to equity. You know, I ran some numbers based on stuff Glen Farniss said in public, maybe $15, $16 billion of equity.

So now you've got the potential to really move the needle by investors taking a little haircut. Mm-hmm. So if you can convince the investors, you could get somewhere, and the risk doesn't all come to the Alaska Permanent Fund to bail this thing out. Mr. President, still a gamble? Yeah.

It's still a gamble, but that's one I think is smart money. So the way this amendment is written, Mr. President, it says— You can have all these tax incentives once you have a real project, the whole project that takes the risk and spreads it across 3 million units for sale every day. That's got potential. Mr. President, I ask for a yes vote on Amendment Number 6. Thank you, Senator Kiel.

Senator Myers. Yeah, thank you, Mr. President. I would like to slightly amend the statement from the maker of the amendment. If I'm there with a hard hat, it's not because I'm a politician, it's because I wear one anyway.

Aside from that, Mr. President, so the concern here is cost overruns and where that leaves the state potentially liable. The developer was quite clear in committee that the only way in which the the state is liable for cash call in the case of cost overruns is if we choose to be an investor, if we choose to be an equity investor. And that's an option, as opposed to previous versions where we were required, you know, previous versions of this project we were required to be an equity investor. We're not required to in this case.

Underlying bill actually says that if AGDC is going to supply the bonds, you know, is going to buy the bonds that are necessary to fund the state's portion because they don't have cash lying around either. We have to approve it. So we're going to have some direct oversight and they've also been very clear and it's— at least some of it is spelled out in the bill in front of us. The developer's also been clear that if we go that route that they're going to open the full books, we're going to get treat— We're going to get the information just as much as any other equity investor, and we can make that decision. We don't have to, Mr. President.

Talk about potentially the project bankrupting along the way. Yeah, that's a possibility with any large project. It is. Something interesting happened with some bankrupted projects about 30-ish years ago, Mr. President. In the late '90s, when we had the the first kind of big dot-com boom, there were companies laying fiber optic cables every which way across this globe, Mr. President.

And everybody was saying how much the Internet was going to change the world. They were right, but they were 10 or 20 years early. And so a good chunk of those companies laid the fiber or maybe laid part of the fiber and they— They They ended up— some of them ended up going bankrupt because they couldn't make their money back. Well, what ended up happening is that fiber then got sold through bankruptcy to other investors who then operated it. Most of that fiber that got laid is still in use today.

And they made bank on it once things— once the Internet really did take off a few years later, Mr. President. So— and they made themselves a hefty return. So worst case scenario, I hope it doesn't happen, but worst case scenario, if they get partway through and they go bankrupt, you know, they've laid half, three-quarters of the pipe and they decide to pull the plug on it, you know, I actually expect that to actually help us a little bit in the state because the eventual cost, they'll sell that off in bankruptcy court, eventual cost is gonna actually go down to the company that finally owns it in the end and actually starts operating it. So that's— I don't necessarily see that as the end of the world, Mr. President. So one of the things that I've always been concerned about is I've heard about the gas line for— well, it's been around longer than I've been alive— is the concern that we make political decisions on building it, not economic ones.

And one of the things that I like about this iteration going around, Mr. President, is that because the state is not obligated to be an equity partner, we're staying about as far away from the political decisions as you can. So this amendment is getting into a business decision, an economic decision, and we're substituting political decisions for economic ones, Mr. President. So for that reason, I can't support this amendment. Thank you. Thank Thank you.

You, Senator Myers, for the discussion.

If you are ready for the question, the question being, shall Amendment Number 6 pass the Senate? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 7 Yeas, 13 nays. So by a vote of 17 yeas to 13 nays, Amendment Number 6 has failed to pass the Senate.

Brief at ease.

The minority has asked for a 15-minute break and we will take that as well. We'll come back in 15 minutes at 6 o'clock, please.

Seneca back to order, please. Will everyone sit down and encourage your colleagues to get back in here?

We had a 15-minute break. It's now gone 30 minutes. Brief at ease.

Will the Senate come back to order, please? Couple of announcements. I asked for a 15-minute break. You took 30 minutes. There will be no more breaks.

We have got 34 amendments. We are now on number 7. You need to show some discipline and keep your comments brief. We're going to put a 2-minute limit on everyone.

Realize the problem we're facing here.

Back to order, please. Madam Secretary. There is an amendment number 7 by Senator Merrick on members' desks. Senator Merrick. Thank you, Mr. President.

I move amendment number 7. Thank you. Any objection? Please explain the amendment, if you will, Senator Merrick. Yes, thank you, Mr. President.

We all want cheaper, more dependable energy for our constituents. With the concerns about availability of Cook Inlet gas, I want to ensure my community can keep their lights on and their homes heated. Needed. From conversations with the developer, they want this to move quickly too. And we all hope that this will be done before the 2032 deadline.

However, Mr. President, there is significant concern that the hard deadline for completion of Phase 1 will place doubt in the mind of investors, making it difficult to raise the needed capital for this project. Lenders take the most conservative view and will make a risk assumption that a delay may occur, resulting in a dramatic change in the developer's ability to service the debt. At best, this makes the debt more expensive. At the worst, completely unavailable. Mr. President, if construction is completed on January 1st, 2033, rather than a day earlier, the tax abatement and the AVT no longer apply to this project.

And I don't want that to be something that kills it. This amendment simply deletes the deadline for completion of Phase 1. Thank you. Thank you, Mr. President. Thank you, Senator Maric.

Senator Giesel. Mr. President, I urge a no vote on this amendment. Mr. President, that deadline of January 1st, 2037— excuse me, 2032— demonstrates how serious Alaska is, how urgent— urgently this needs to be done. That should motivate investors. Thank you, Mr. President.

Thank you, Senator Giesel, for the discussion. Senator Coffman. Thank you. I promise to be brief. This clause will chase away investors.

It's an axe hanging over their head. Our need for gas is true, and I'm afraid with clauses like this, what we're doing is making sure we don't get a gas line. Thank you. Thank you, Senator Kaufmann, for the discussion. Senator Young.

Thank you, Mr. President. I urge a yes vote. Simply put, if you want to limit how long you're going to let something go before someone starts, that's one thing. But if they take the effort to start and then you tell them you have to be done by this deadline, I can tell you after 1,000 to 1,200 houses, there are a lot of supply chain management issues you run into that are beyond the control the developer, if we should absolutely not limit when they can finish. Right?

They've taken the effort, they've put their money on the line, they've gotten started, they want to finish too, I promise you. They're not making money when they're just working. They're making money when they start flowing. So this is a bad message to the world. Thank you, Senator Young, for the discussion.

And wrap-up? No wrap-up. If you are ready for the question. The question being, shall the Senate adopt Amendment Number 7? Senators may proceed to vote.

The Secretary will— Senator Rosser, thank you. The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 9 Yeas, 11 nays.

And so by a vote of 9 yeas and 11 nays, Amendment Number 7 has failed to pass the Senate. Madam Secretary. There is an amendment number 8 by Senator Merrick on members' desks. Thank you, Senator Merrick. Thank you, Mr. President.

I move amendment number 8. Objection. Thank you. There has been an objection. Please explain your amendment.

Thank you. With the failure of amendment number 7, I offer amendment number 8 as a compromise. Rather than the completion of the pipeline by the end of 2032, this amendment requires the construction of Phase 1 commence by December 31, 2032. The definition of commence can be found on page 28 beginning on line 5. Thank you.

Thank you, Senator Merrick. Is there further discussion?

Senator Wielechowski. Thank you, Mr. President. I respectfully object to the amendment. The producer developer has testified in Senate Resources they will be laying pipe this December. I think this is way too late.

We have a crisis situation in Cook Inlet. We need this project developed by 2033 if we are putting all all our eggs in this basket. Thank you. Thank you, Senator Murkowski. Further discussion?

And wrap up, Senator Murray? Thank you. So if you're ready for the question, question being, shall the Senate adopt Amendment Number 8? Senators may proceed to vote. The secretary will lock the roll.

Do any senators wish to change their vote? The secretary will announce the vote. 10 Yeas, 10 nays. And so by a vote of 10 yeas and 10 nays, Amendment No. 8 Has failed to pass the Senate.

Madam Secretary. Amendment No. 9 Will not be offered. There is an Amendment No. 10 By Senator Bjorkman on members' desks.

Thank you, Senator Bjorkman. Thank you very much, Mr. President. Amendment No. 10 Simply redistributes what happens with the increase increase in AVT after 10 years when it is in place. You will note on page 26, line 21 and 22, you will see that after 10 years, the AVT increase goes 100% to the community assistance program.

0% Of that increase goes to the state. 0% Of that increase increase goes to the communities in which the property resides. And so they would get none of that increase to help pay for schools and roads, public safety. The state would get none of that increase. It all goes to community assistance programs, which are largely spent by community councils and other groups around the state.

Significantly different in a— significantly different significant departure from how our state property tax law currently works, Mr. President. So under this amendment, 50% would still go to community assistance, but the other 50% of that increase would be divided proportionally exactly how the first $2 mil equivalent before cost overruns would be divvied up. I urge members to vote yes. Thank you. Thank you, Senator Bjorkman.

Under discussion, Senator Yant. Thank you, Mr. President. I too am a big fan of community assistance, but I can tell you I do not value it so much that I'd be willing to limit money that goes to education, roads, state troopers, and other valuable things. I think right now we're leaning very heavy towards community assistance and we need to refocus. This amendment does that.

I think it gives us the opportunity to put more money in the general fund and let it go through the process and be spent in ways we all find valuable. Thank you. Thank you, Senator Young. Senator Steadman. Thank you, Mr. President.

I oppose this amendment. This concentrates, continually concentrates the wealth along the corridor that's generated from this project by putting that incremental increase of the throughput tax through the community assistance program. All communities, even the ones on the corridor, all of them get treated equally. Through the formula, and all Alaskans get to benefit from this project. And I think that's one of the most important things that we're trying to do here, is benefit the entire state, not just a narrow corridor.

Thank you. Thank you, Senator Stebbins. Further discussion? In wrap-up, Senator Bjorkman. Thank you very much, Mr. President.

I can let the senator from Sitka know that all residents will benefit. Benefit from the production taxes as well as royalties that are generated by this project. You may have seen headlines that the state will get $800 million. That is the benefit for all Alaskans. The problem here with the split of this increase, Mr. President, is that this money is collected as a replacement for property taxes.

Now, I don't look to the the shores of Sitka and southeast and say, "My, there is some property there in the DNR-managed tidelands that is to benefit all Alaskans, and by Jove, I think that the people of the Kenai Peninsula should get a little bit of the property tax revenue on those cruise ship docks that are sitting on state land." That's not what happens. That's not the correct purpose property tax. We're talking about property tax here, Mr. President, and that's important. And as such, I think it is entirely appropriate half of this increase go to community assistance and half be distributed to communities where the property is, because that's the purpose of property tax. Thank you.

Thank you, Senator Bjorkman. If you are ready for the question, the question being: Shall the Senate adopt Amendment number 10. Senators may proceed to vote. The secretary will lock the roll, please. Do any senators wish to change their vote?

The secretary will announce the vote. 10 Yeas, 10 nays. And so by a vote of 10 yeas and 10 nays, amendment number 10 has failed to pass the Senate. Madam Secretary. Amendment number 11 is being copied and distributed.

Stand at ease.

Will the Senate come back to order again? Madam Secretary. There is an amendment number 11 by Senator Giesel on members' desks. Thank you. Senator Giesel.

I move amendment number 11. Thank you. Is there an objection? Would you please explain the amendment? Thank you, Mr. President.

If you turn in the amendment, in the bill to page 24, you'll see on line 28— or excuse me, 29. It actually begins on line 28. This is after 2020— 2060. Mr. President, the gas LNG facility is now in operation, and this is setting the additional— an additional 2 and 1— 2.12 cents for the gas going through the entire project. It is distributed, it is allocated in this bill right now on page 26, item number 3, 100% of this tax is allocated to the state.

Mr. President, what this amendment does is changes the number on line 29 from $0.212 to $0.388, which will equate to the— it will, as you— as it compiles with the other years, will reach $0.60. This is what our full mill rate is, Mr. President. This would restore that full mill rate, over a progressive period of time, as you see in the bill already.

So this maintains, you know, the AVT. That means that it's a stability situation for the company itself in that that isn't changed. But the amount coming in now is equal to what our property tax is now. Thank you, Mr. President. Thank you, Senator Guiso.

Is there discussion?

There was an objection. Yes, Senator Wilkowski. Yes, thank you, Mr. President. Our experts testified that the property tax breaks that are typically given in the lower 48 are 10 years. In the Senate Resources version, we had a 10-year and then a sunset.

This is a 34-year property tax break. Our expert says 7 to 10 years is what's needed economics. We're going 34 years with an ABT structure that lasts forever. That will help them avoid litigation, help them provide stability. They will be making $5 billion in profits when this kicks in.

And then we should have a reversion. We are not going back to the current status quo, which I think many of us would like, but we are keeping the AVT, which industry wants. And— but after 34 years, we should— the state should be making and the community should be making a higher share when the industry is making $5 billion a year in profits. Thank you. Thank you.

Thank you, Senator Bolkowski, for the discussion. And wrap up, Senator Giesel? Very well. If you are ready for the question, the question being, shall the Senate adopt Amendment Number 11? Senators may proceed to vote.

The Secretary will lock and roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 9 Yeas, 11 nays. So by a vote of 9 yeas and 11 nays, Amendment Number 11 has failed to pass the Senate.

Madam Secretary. Amendment Number 12 is being duplicated. We'll stand at ease.

Senate come back to order, please. Madam Secretary. There's an amendment number 12 by Senator Wielechowski on members' desks. Thank you, Senator Wielechowski. Mr. President, I move amendment number 12.

I ask for an objection. Would you please explain the amendment? Thank you. This creates is a parity between the way inflation is adjusted. Under the existing bill, there is different inflation adjusters for industry, and there is a higher one potentially for consumers.

And what this does is it sets the— so you have inflation adjustment for Glenfarn on their property tax rate. It's capped at 1 to 3%. But for the consumers of Alaska, the ratepayers, there is a different unconstrained increase for consumers. So this This is a consumer protection amendment. It caps the amount at the same amount as Glenfarm property tax increase could rise at 1 to 3% or the rate that percentage increase set by the gas supply contract, whichever is less.

Thank you, Mr. President. Thank you, Senator Bulkowski. Is there discussion?

If you are ready for the question, question being. Shall the Senate adopt Amendment Number 12? Senators may proceed to vote. The Secretary will lock the roll. I'm sorry, thank you.

Now they will lock the roll, please. Do any Senators wish to change your vote? The Secretary will announce the vote. 14 Yeas, 6 nays. And so by a vote of 14 yeas to 6 nays, Amendment Number 12 has passed the Senate.

Madam Secretary. There is an amendment number 13 by Senator Wielekowski on members' desks. Thank you. Senator Wielekowski. Mr. President, I move amendment number 13.

There has been an objection. Please explain. Okay. So in the House they added a provision that protected the consumers against cost overruns. They set it at $16 for 1,000 MCF.— well, it's 1 million British thermal units of natural gas.

What this does is it says after phase 2, that number would go to no more than $5. Where do we get the $5 number? Well, promises are made. This amendment is about protecting Alaskans, Alaskan consumers. We've heard this bill sold as this is going to protect Alaskan consumers, the ratepayers of Alaska.

And in phase 2, You're going to pay the governor, according to Governor Don Levy, between $4.50 and $4.70. We also heard from one of his energy experts, Andrew Jensen, who publicly said on my Facebook page that, attacking me, that no, gas prices will be $5. So I said, let's put it in statute. So we're putting it in statute. You want to make a promise publicly that it's going to be $5?

Here you go. Here's your chance to vote for $5 gas. Here's a chance to protect Alaskan consumers. Consumers [SPEAKING NATIVE LANGUAGE] so that we genuinely get the benefits of this project. $5 Gas in Phase 2, Mr. President.

Thank you. Consumer protection. Thank you, Senator Wielechowski. Is there further discussion? If you are ready for the question, the question being, shall the Senate adopt Amendment Number 13?

Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The Secretary will announce the vote. 9 Yeas, 11 nays. And so by a vote of 9 yeas to 11 nays, Amendment Number 13 has failed to pass the Senate.

Madam Secretary. There is an Amendment Number 14 by Senator Wielechowski on members' desks. Thank you. Senator Wielechowski. Thank you, Mr. President.

Move Amendment Number 14. Is there an objection? Please explain. Thank you. This amendment is called the No Recourse or Reimbursement to Glenfarn for Project Failure.

Throughout the public testimony, we've heard repeated statements from the project developer, we've heard it from AGDC, the state has no burden if this project fails. If they miss milestones, there's no burden. If the project fails, there's no burden. This just simply codifies it. This just protects the Alaskans, their, their— From having to—— we've heard testimony there could be an enormous draw required on the permanent fund or the state general fund.

This simply protects the Alaskan treasury, protects Alaskan consumers from having to bear the burden if this project fails. If the project fails, the developer has said publicly numerous times Alaskans are off the hook. This just puts it in writing. Thank you. Thank you.

Thank you, Senator Wielechowski. Is there further discussion? Seeing none, if you are ready for the question, the question being, shall the Senate adopt Amendment Number 14? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 14 Yeas, 6 nays. Nays.

And so by a vote of 14 yeas and 6 nays, Amendment Number 14 has passed the Senate. Madam Secretary. Amendment Number 15 is being duplicated. Thank you.

Please, Madam Secretary. There's an amendment, number 15, by Senator Giesel on members' desks. Thank you, Senator Giesel. I move Amendment Number 15. There's no objection.

Senator Giesel, if you would explain the amendment. Yes. Mr. President, this is pretty straightforward. This prohibits the imposition of cost overruns onto ratepayers. It also requires the definition of final investment decision.

We have heard We have heard over and over that cost overruns, it's been stated at the table, will not be passed on to ratepayers, that the company themselves will eat the cost overruns. So this should be no impairment to the development of this project. It simply puts in writing what we've heard verbally, Mr. President. Thank you. Thank you, Senator Giesel.

Is there further discussion? Very well. If you are ready for the question, the question being, shall the Senate adopt Amendment Number 15? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce. I'm sorry, Senator Clay— Senator Clayman from nay to yay.

Thank you. Secretary, lock the roll. And no other senators wish to change their vote. Secretary will announce the vote. 14 Yeas, 6 nays.

And so by a vote of 14 yeas to 6 nays. Amendment number 15 has passed the Senate. Madam Secretary. Amendment number 16 is being duplicated. 16?

Okay. We'll stand at ease.

Please, Madam Secretary. There is an amendment number 16 by Senator Giesel on members' desks. Thank you. Senator Giesel. I move amendment number 16.

Objection. Please explain. Thank you, Mr. President. This amendment would require a written notice. That's all.

A written notice of any relationships that are formed with foreign entities. Notifying you, Mr. President, the Speaker of the House, and the chairs of the Finance Committee. It would also be required— it would be provided in quarterly reports to you. This is important. Mr. President, some of us were here in— I'm going to say it was '16, '17, '18— when a governor was pursuing China as the main partner in this Transit Pipeline.

That concerned a lot of us, Mr. President. It still concerns me that assets could be— could be given over to foreign entities, or foreign entities could take possession or take some kind of ownership in this project. We want to know if China or Saudi Arabia has a part in this. Mr. President, We were told when this was offered in the Resources Committee that it's not a problem because the federal government supervises this.

Well, that is true, Mr. President, I found, if there's a federal loan engaged with this. There's not. In fact, I have from a credible source that Glenfarm has removed, has withdrawn their application to to the energy dominance at the Department of Energy's loan program. So there would not be federal oversight because there would be no federal loan. We ourselves need to keep this oversight.

This is a written notice. That's all. Thank you, Mr. President. Thank you, Senator Giesel. Is there further discussion?

If you are ready for the question, question being: Shall the Senate adopt Amendment Number 16? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 13 Yeas, 7 nays. And so by a vote of 13 yeas and 7 nays, Amendment Number 16 has passed the Senate.

Madam Secretary. There is an Amendment Number 17 by Senator Giesel on members to the clerk's desk. Thank you. Senator Giesel. Amendment number 17.

Pass or objection? Senator Giesel. Thank you, Mr. President. Again, as we keep surveillance on the project itself, we are 25% owner, therefore we should know if any disposal of ownership or management interest in this this project is being transferred or sold or otherwise disposed of, not only of the project but of a subsidiary of the corporation, that subsidiary being, of course, 8 Star. So, Mr. President, that is what this would require, that we be notified and that we actually take action by law to make sure that the ownership transfer or disposal of any ownership or management of this corporation is something that we approve of.

Thank you, Mr. President. Thank you, Senator Giesel. Is there discussion?

Say again?

Brief at ease. A brief at ease.

We will be at ease.

Listen, come back to order, please. Senator Bjorkman. Thank you, Mr. President. This amendment would add additional burden and legislative approval to the business functions of the project that's overseen by AGDC. Already in the bill, we are going to be notified and AGDC will have oversight over ownership when that is more than a 10% stake.

So I can't support I support this amendment. Thank you. Thank you, Senator Bjorkman. Further discussion? Senator Giesel, in wrap-up.

Mr. President, we are the board of directors for a company called the State of Alaska. Legislative burden. Is that what boards of directors say when they want to be notified of transfers, selling, or disposal of part of their their corporation or something they have owner or management of. This is not a legislative burden. This is not a burden on the project.

Thank you, Mr. President. Thank you, Senator Giesel. If you are ready for the question, the question being: Shall the Senate adopt Amendment No. 17? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 10 Yeas, 10 nays. And so by a vote of 10 yeas and 10 nays, Amendment Number 17 has failed to pass the Senate.

Madam Secretary. There is an Amendment Number 18 by Senator Giesel on members' desks. Thank you. Senator Giesel. Mr. President, I'm not offering Amendment 18 at this time.

18 Has been withdrawn. Thank you. We'll stand at ease for further amendments.

Will the Senate come back to order, please?

We need everyone here. President. Senator Wolkowski. Call on the Senate. The call has been placed on the Senate.

Nobody leave. Everybody's— Will the Senate come back to order, please? Madam Secretary. There is an amendment number 19 by Senator Bjorkman on members' desks. Before we go to that, just reminding people we have placed a call on the Senate that has not been lifted.

Senator Bjorkman. Thank you very much, Mr. President. I move Amendment 19. Objection. There has been an objection.

Senator Bjorkman. Thank you, Mr. President, and I appreciate the body's indulgence as we waited for this amendment. This amendment is similar to a previous amendment I offered offered. It simply takes into account an RLC provision being in place for the affected communities. Again, the communities that have funds reduced due to RLC being applied to the alternative volumetric tax are Denali, Matsu, and Kenai.

All three of those municipalities lose money due to this provision. What this would do is it would apply RLC requirements when there is significant population increase in student count under construction of Phase 2 for a period of 5 years. They figure it's about a 4-year project, but I figured 5 years was good. And then sunset that RLC requirement, providing relief to my borough and back to the original plan of not having RLC apply to the AVT revenue. Thank you, Mr. President.

Thank you. Is there any further discussion? Senator Tobin. Thank you, Mr. President. I rise in opposition to this particular amendment.

I just want to mention for the listening public that the proposed taxation structure in this legislation, the alternative volumetric tax is in lieu of a property tax. If there were property taxes that were still applied to these projects, that would be subject to the required local contribution. Again, that required local contribution is based off of 2.65 mils of all real and true value in the community, including oil and gas, or— Mm-hmm. There is a 45% cap on a community's contribution to their local school system that that is in place if the 2.65 mils would exceed the total amount of school funding. Now I just want to mention again for folks' edification here that there is a task force on education funding.

We are deliberating these issues. We are trying to look at these concerns. Of course, this particular policy has not gone through the typical vetting process of education funding. In the previous required— contribution that was established in 2012. There was multiple conversations with all sorts of stakeholders, including the 5 communities that pay that 45% alternative tax to fund their public education systems.

They haven't been included in this conversation. They're not being discussed. Their oil and gas property are still going to be subject to that required local contribution while this amendment gives special special treatment to a particular type of alternative tax structure in lieu of property taxes. I think that is simply just unfair. If this bill passes and this goes into law, there will be ample time for us to consider a new funding mechanism for education funding.

We have been working on what that looks like through the task force, and I know this body will continue to deliberate in full transparency with all stakeholders so that nobody is left behind, nobody gets special treatment, treatment and nobody gets a boon over another community. I urge members to vote no on this amendment because it's just unfair for all of us. Thank you, Senator Tobin. Is there further discussion? If you are ready for the question, the question being, shall the Senate adopt Amendment Number 19?

Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote?

The Secretary will announce the vote. 11 Yeas, 9 nays. And so by a vote of 11 yeas to 9 nays, Amendment Number 9 has passed the Senate. Madam Secretary.

I have no further amendments. Are there any other amendments anyone was expecting from Ledge Legal. Okay.

Madam Secretary, we have no further amendments, so we will go on to Madam Majority Leader. Mr. President, I move and ask unanimous consent that the bill be considered engrossed, advanced to third reading, and placed on final passage. Thank you. Without objection. Madam Secretary.

Senate CS for CS for House Bill 381, Finance, amended Senate, an act relating to the taxation of certain natural gas project property and related facilities relating to local contributions for public school funding, relating to municipal property taxes, relating to the Alaska Gas Line Development Corporation and funds of the Alaska Gas Line Development Corporation, relating to reporting requirements for natural gas Creating the Alaska Affordable Heating Fuel Fund. Relating to approval of contracts by the Regulatory Commission of Alaska. An inflation adjustment of the maximum price of natural gas. Establishing an income tax on certain entities producing or transporting oil or gas in the state. Relating to an alternative volumetric tax on natural gas throughput.

Relating to a municipal impact grant program and fund. Relating to agreements and a payment related to a natural gas project. Project and providing for an effective date before the Senate in third reading on final passage. Thank you. Is there discussion at this time?

Brief at ease.

Will the Senate come back to order, please? We are under discussion on this bill. Is there discussion? Senator Cronk. Thank you, Mr. President.

Coming in today, I was truly, truly excited about the AKNLG project. Since we started talking about this project, I was excited to vote for to vote for a bill that was truly what I believe was a game changer, what I would call a legacy project. I probably doubt I'll ever get a chance to vote on something like this. But after seeing the changes that were made today, I'm definitely no longer excited to vote for this bill. I wanted to say I was going to vote yes, but I'm pretty sure I'm going to vote no on this bill because it doesn't work.

It doesn't work for investors. Doesn't work for developers, and I don't think it works for Alaskans. And, you know, 20 years ago we had Johnny Cash, we had Bob Hope, Steve Jobs. And I believe with the changes in this bill, we lost our cash, we lost our hope, we lost our jobs. So I sure hope Kevin Bacon doesn't come to Alaska.

We don't want to lose our bacon. Thank you, Senator Croft. Is there further discussion? Are you ready for the question? Question being, shall Senate CS for CS for House Bill 381 Finance as amended in the Senate pass the Senate?

Senators may proceed to vote.

The Secretary will lock the roll. I'm sorry, not the yes just yet. Now the Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote.

12 Yeas, 8 nays. And so by a vote of 12 yeas and 8 nays, Senate CS for CS for House Bill 381 Finance has passed the Senate. Madam Majority Leader. Mr. President, I move the effective date clause. Thank you.

Hearing no objection, the effective date clause has been adopted. Madam— the brief at ease.

Please, we need to return to the effective date. It is something we need to vote on. So if you are ready for the question, the question being, shall the effective date be adopted? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 20 Yeas, 0 nays. And so by a vote of 20 yeas to 0 nays, the effective date clause has been adopted.

We have a title change, Madam Secretary. That brings the title change SCR 203 before the Senate in final passage. Thank you. And if you're ready for the question, the question being, shall the title change Title Change Resolution SCR-203 pass the Senate. Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change your vote? The Secretary will announce the vote. 20 Yeas, 0 nays. And so by a vote of 20 yeas, 0 nays, the Title Change Resolution SCR-203 H.R.

203 Has passed the Senate. Take a brief adieu to sign the bill and get it to the House.

Senate come back to order, please. Madam Secretary. There are no further items for consideration on today's daily calendar. Thank you. Is there unfinished business at this time?

Yes, please, Senator Myers. Thank you, Mr. President. I move and ask unanimous consent to be excused from, and not subject to a call of the Senate, call to the Senate tomorrow. Without objection, so ordered. Additional unfinished business?

Senator Clayman. Thank you, Mr. President. I, too, ask to be excused from the call to the Senate tomorrow. Without objection, so ordered. Additional unfinished business?

Are there— yes, please go ahead, Senator Yant. I ask unanimous consent to be excused from the call to the Senate from tomorrow, plain time morning, until Sunday, time morning. Without objection, so ordered. Senator Yunt, any additional unfinished business? Are there committee announcements?

I don't think so. Are there any other announcements? Are there special orders?

Senator—. Thank you, Mr. President. I just want to speak briefly about my brother. Without objection, so ordered. My brother David is 13 months older than me and he has been working as long as I can remember.

Whether it was in high school, he was working at school, in college, medical school, residency, or his fellowship, he has always been working. He has developed an expertise in pulmonary and sleep medicine. He started the Sleep Medicine Center at UC California at San Francisco over 30 years ago. He's won numerous awards, a national and state recognition in California. He has a reputation, to my amazement, as a real doctor's doctor.

It is no small irony that he developed a pulmonary infection about 8 years ago that, that significantly changed his health path and has caused a significant loss of lung function, which is about the last thing you would ever expect for a person person with pulmonary expertise as he brings to the world. And so it is with my amazement that next week he will retire, long before I ever expected that he would retire, and long before I ever believed he would stop working. He will actually stop working and see his last patient on June 25th, about 4 days before what would be my mother's 100th birthday had she still been with us. [FOREIGN LANGUAGE] And so I just want to say to my brother, rock on. Thank you, Senator Clayman.

Congratulations to your brother. Any additional special orders? Senator Tobin. Thank you, Mr. President. I request a special mission of the— special permission of the floor to speak on the topic of Juneteenth.

No objections. So ordered. Thank you. I didn't give a speech. I just gave a speech about why I didn't vote for the bill that we just passed this body, and I want to talk a little bit about the why, because today is Juneteenth.

It is a day of recognition that we have codified not just in state law because one of the members of this body, a member from Midtown Anchorage, fought valiantly to ensure that this day is in our statute books and a day off for all Alaskans, but it's also in federal law, although at this current moment in time, we are not recognizing it as such. It is a day that reminds us on whose backs was this country built. Who built the roads like the Alcan? Who constructed our unique spaces like our White House? Who is responsible for the vast majority of the infrastructure that has spurred the economic growth that we all enjoy?

[FOREIGN LANGUAGE] enjoy and appreciate as one of the top world superpowers today. It is an auspicious day. And as I looked at the pages of the bill that we just passed, that effectively gives a 90% tax break to a private company, I can't help but remember who is not included in that legislation. If the pipeline that we all hope gets built Whose port does a majority of the resources receive those materials from and is located in the heart of a downtown area get receipts or receive resources for? What neighborhood corridor do the trucks who will take the raw materials and resources for that pipeline project have transported through their neighborhood?

What community that has been long bifurcated by this transportation corridor that takes you either to Interior Alaska or to the Kenai Peninsula. What community holds that thoroughfare? What community has long been denied an opportunity for revitalization, for reclamation, to receive resources because they have been subject to truck pollution? They have been subjected to depressed property values. They have had their community significantly impacted as we here in the state of Alaska have built our economic might.

What district has the great places that you and I both go to enjoy a lovely glass of wine or eat a good meal or maybe take in a show at a performing arts center? Where will all of the workers workers who are going to be coming for this project to go to take their break, to maybe imbibe at a bar, hang out in a town square? What community is going to bear the brunt of this project but does not get one single direct dollar from the resources that are going to be dispersed to a handful of communities who get special treatment under this bill?

What policy is included in legislation in that we just passed that is going to support the ongoing public safety that's going to keep the neighbors in that downtown district safe when there are thousands of workers who come to enjoy their time off? What dollars were in that bill that we just passed that's going to ensure that that community's roads get maintained, that the kids who are breathing in that contaminated air get treatment and an affordable healthcare facility? What neighborhood gets passed through. Well, today is Juneteenth, so I want to talk about the historic Black neighborhood of this state, Fairview. Fairview, which is where I live.

Fairview, in which I walk along the roads and I see those trucks barreling down at us, taking away lives of Alaskans. We live in the most— The most impacted corridor of this particular project, and we don't receive $1 that's included in this bill. Some communities get quite a bit. They're getting additional dollars that they've just advocated for because there's somehow this idea that when one of us is successful, that it has to come at the sacrifice of someone else. And that is a history that has long been repeated in this country.

Now, there are only two roads out of the Port of Alaska, one that goes right by my house on Ingram Gamble and another that goes right past my front door, which is on the Glenn Highway.

This community of Fairview is important. It is the lifeblood of this state. If you're trying to get from the Seward Peninsula to the Matsu, you have to go right by my house. Now, one of the things that I'm really frustrated by, and I've tried really hard to overlook, although I personally just cannot wrap my brain around is the alternative volumetric tax that has been included in this legislation. And as I've said to many folks, I lived in a country for 4 years that had a tax structure like that, where they passed through communities just like they're going to be passing through Fairview.

And as they pass those communities, what I noticed— and I lived in that, in that country— was the rich oligarchs who bathed and the public dollars that have been privatized, because under the bill that we just passed, we privatized the heck out of Alaska state resources while we socialized all the losses.

I am very frustrated at the legislation that we passed here today on Juneteenth, a day that is supposed to be about remembering who built this country, on whose back we built this country, of acknowledging and understanding that We have an obligation not just to our communities, but to all of Alaska to uplift everyone. But there's nothing I could do, and I knew the vote was going to be the way it was. So I saved my comments till now, Mr. President. But I'm going to ask something of all of you here on this floor.

The next time you drive through Fairview, you're in Gambell or Ingra, or you're driving out the Glen, please take a very brief moment take a moment and look around. Look around to see whose back this pipeline is being built on. Thank you, Mr. President. Thank you, Senator Tobin.

Senator Dunbar. Thank you, Mr. President. Thank you, Mr. President. I move and ask unanimous consent to roll back up the calendar to unfinished business. Without objection.

So ordered. If I may, Mr. President. Please go ahead. Thank you, Mr. President. I move and ask unanimous ask unanimous consent to be excused from a call to the Senate on Sunday, the 21st, Father's Day, for state and personal business.

Without objection, so ordered. Senator Dunbar. Senator Hoffman. Mr. President, I move and ask unanimous consent that I be excused till January 1st, 2027. Without objection, so ordered.

Senator Hoffman. Any additional Pieces of unfinished business. I move back down the calendar to special orders. Are there any additional special orders? Seeing none, Senator Giesel.

Mr. President, I move that the Senate of the Second Special Session of the 34th Legislature adjourn sine die. Thank you. Hearing no objection, the Senate of the Second Special Session of the 34th Alaska Legislature is adjourned sine die.