Alaska Legislature: House Floor Session - July 20, 2026 10:00am

Would the House please come to order.

Will members please indicate their presence by voting?

Will the clerk please tally the board? 40 Members present. With 40 members present, we have a quorum present to conduct business. Mr. Majority Leader.

Mr. Speaker, I have no previous excused absences for today. Leading the invocation this morning is our very own Representative Johnson. Members, please rise. Thank you, Mr. Speaker.

With the deepest respect for all Alaskans, I offer the following prayer. Dear Heavenly Father, we gather today to carry out the work entrusted to us. We seek your presence, your wisdom, and your blessing. Thank you for the opportunity to serve and the responsibility placed upon us to make decisions that affect the lives of those we represent. [FOREIGN LANGUAGE] Lord, grant us the patience in our deliberations, grant grace in our conversations, and wisdom as we make decisions.

Help us do what is right for Alaska. Help us to listen to each other with understanding. Give us strength to complete our time here and to bring this session to a conclusion. We ask for your blessing upon us and upon this legislature and upon its members and upon its staff. And upon all those who are affected by the work that we do here.

May our efforts be guided by integrity, compassion, and a commitment to the needs of every Alaskan. As we continue inside and outside of this building, Lord, please bless us and keep us. Make your face shine upon us and be gracious to us and give us peace. May your light guide our decisions, your favor rest upon our work, and your peace dwell within us. May all that is said what is said and done today bring honor to your name and be of benefit to the people we serve.

In your holy name we pray. Amen. Representative Vance, will you please lead us in the Pledge of Allegiance? I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Representative Story. Thank you, Mr. Speaker. I move and ask unanimous consent that the prayer be spread across the journal. Hearing no objection, the prayer will be spread across the journal. Will the clerk please certify the journal for the previous legislative days?

I certify as to the correctness of the journal for the 23rd through the 30th legislative days of the 2nd special session. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the journal of the previous days be approved as certified by the Chief Clerk. Hearing no objection, the journal stands approved.

Not seeing any guests for introduction this morning. Madam Clerk, are there messages from the Governor?

A message dated May 19th.

Will the House please come back to order? Madam Clerk. A message dated June 19th at 9:37 AM, stating under the authority of Article II, Section 9, and Article III, Section 17, Constitution of the State of Alaska, and in the public interest, the governor calls the 34th Legislature of the State of Alaska into its 3rd special session in Juneau, Alaska, in the legislative chambers on June 20, 2026, at 10:00 AM, to consider passage of bills on subjects germane to the title of the following bill. While the bill was under consideration by the 34th Legislature during the second special session: HB 381, relating to the taxation of certain natural gas pipeline 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, an 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. Also a message dated June 19th at 7:04 PM stating under the authority of Article II, Section 9 and Article III, Section 17, Constitution of the State of Alaska and in the public interest, the Governor hereby amends his proclamation of June 19th calling the 34th Legislature of the State of Alaska into special session as follows: Under the authority of Article II, Section 9 and Article III, Section 17 Constitution of the State of Alaska and in the public interest, the Governor calls the 34th Legislature of the State of Alaska into its 3rd special session in Juneau, Alaska— in the legislative chambers on June 20th at 10:00 a.m. to consider the passage of bills on subjects germane to the following Senate Committee Substitute for Committee Substitute for House Bill 381, Finance, under consideration in the Second Special Session of the 34th Alaska Legislature, 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 pipeline projects, 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, 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 and providing for an effective date, as well as reduction or elimination of income taxes on pass-through entities adopted in the second special session of the 34th Alaska State Legislature.

I have no further messages from the governor this morning. Madam Clerk, with a very well-deserved pause, Pause.

Are there any messages from the other body? Messages dated June 19th stating the Senate passed committee substitute for House Bill number 381 Finance amended with the following amendments. Senate committee substitute for committee substitute for House Bill number 381 Finance amended Senate oil and property, gas property tax, municipal tax, AGDC title change SCR 281. And it is returned for consideration. And the Senate has also passed and is transmitting the following for consideration: Senate Concurrent Resolution Number 203 by the Senate Finance Committee, suspending Rules 24C, 35, 41B, and 42E, Uniform Rules of the Alaska State Legislature, concerning House Bill Number 381, 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, an 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 and relating to municipal impact grants.

I have no further messages from the other body. Madam Clerk, are there any communications? There are no communications this morning. Any reports of standing committees? There are no reports of standing committees.

Any reports of special committees? There are no reports of special committees. Madam Clerk, are there any citations or resolutions resolutions for introduction. House Concurrent Resolution Number 301 by the House Rules Committee, suspending Rules 47 and 55, Uniform Rules of the Alaska State Legislature, relating to the carryover of bills to a special session. And House Concurrent Resolution Number 302 by the House Rules Committee, authorizing the Senate and House of Representatives to recess for a period of not more than 3 days.

I have no further citations or resolutions for introduction.

Brief it is.

Will the House please come back to order. Mr. Majority Leader, if I could turn to you next. Yes. Okay, Mr. Speaker, so it's my understanding that we are speaking to the resolution that authorizes the Senate and House to recess for a period of more than 3 days.

And that is— Actually, we're doing HCR 301, which is carryover of—. All right, so we— and that was brought to our attention that there was a miscommunication. So now I will be speaking to House Bill— or House Concurrent Resolution 301 that suspends Rules 47 and 55, Uniform Rules of the State Legislature relating to the carryover of bills into a special session. Session. Mr. Speaker, what this resolution does is it allows the legislation on the governor's special session call to pick up where we left off.

Our body has done substantial work on property tax legislation thus far, and we should keep the momentum going. And this just allows us to not lose the progress of this session and continue working on it when we meet again next. Thank you, Mr. Speaker. With the indulgence of Members of the body, Mr. Majority Leader, if I could get you to articulate just exactly where that bill is in terms of its journey and how it carries over into the new session that just started today is.

In essence, talking about how 381 is primarily before the body right now. Yes. The bill on the call is House Bill 381. What this resolution does is allows us to carry only this bill forward, including the work we've done on it to the present day, and get it to where it is a bill that can pass muster and we don't have to start from the beginning as we did on day one before we had done any work. So we can carry the work forward into the next special session that we had done as a complete package rather than starting over from ground zero.

Thank you. And our House Finance Committee did some great work, and I think it's really important to this body. Thank you, Mr. Speaker. So for further clarification before we go to that at ease, I think an additional translation would be that the bill passed the other body last night. For bill drafting reasons and some other reasons, the House did not get to its job in terms of concurring or not concurring.

Not concurring on the bill. What this resolution proposes to do is to complete that process, bring the bill back before the body for concurrence or not concurrence vote. That's the upshot of it all. And the motion, as I understand it, is to just procedurally enable us to allow for that to happen and then a concurrence vote will follow, or not concur. Thank you.

Madam Clerk, did I get that correct? Correct. Okay, so we have House Concurrent Resolution 301 before us and hopefully with a clear understanding of what that proposes to do. If there's not any debate, I'm going to call for the question. And the question being, shall House Concurrent Resolution 301 pass the body I believe we do have a motion in front of us, Madam Clerk, to do that, or did— am I getting ahead of the process?

I think procedurally we are where we need to be. So if you're ready to vote, the question is, shall ACR 3.1 pass the body? Members may proceed to vote.

Aye. Will the clerk please lock the roll? Does any member wish to change his or her vote? Will the clerk please announce the vote? 40 Ayes, 0 nays.

With a vote of 40 ayes to 0 nays, the House has approved House Concurrent Resolution 301. Our next move will be to approve HCR 302, And I'm going to, at this point, hit the pause button, do a quick at ease, talk to the majority and the minority leader, and then we'll go from there.

Thank you.

Will the House please come back to order. We're doing things here a little bit sort of improvisationally. And after consulting with the majority and minority leader, we're going to take up the concurrence vote first. So Mr. Majority Leader, if you might be able to speak as best as you can to a lot of changes that occurred yesterday, I would yield the floor to you.

Thank you, Mr. Speaker. With apologies to the body, there is no limbo file today, but we'll— with the indulgence of the body, I will refer to my notes and give some highlights of the changes that were made by the Senate to House Bill 381. 381. Mr. Majority Leader, I think procedurally we should have you move to make your motion.

I move and ask unanimous consent that the members take up House Bill 381. Hearing no objections, so moved, Mr. Majority Leader. Thank you, Mr. Speaker. So brief explanation of changes.

The school funding changes are new, Mr. Speaker. The Senate version adds a large new piece dealing with how the state funds our public education system. None of this was addressed in the House version. It creates a cushion for school districts whose enrollment drops sharply or that consolidate schools so funding does not fall off a cliff right away. The Alaska Gas Line Development Corporation's funds are reorganized.

The Senate version repeals the old in-state natural gas pipeline fund and replaces it with a single new Alaska LNG Project Bond Fund. The third change is a new annual check on the Alaska Gas Line Development Corporation's money. The Senate version requires the AGDC's board to review its assets every year and tell the legislature by January 10th whether it is holding more money than it needs, with an independent audit attached. This oversight requirement was not in the House version. Confidentiality rules for AGDC are narrower.

In the House version. A new public dashboard requirement in the Senate version requires Alaska Gas Line Development Corporation to maintain a public website dashboard tracking the project status, cost, risks, permitting, gas supply, the Fairbanks Spur Line, community impact grants, and Alaska Hire numbers, and it must be updated monthly or more often. The Senate version Um, also did stricter approval requirements for bonds. Both versions involve the legislature in AGDC's bond issuance. The House version allowed the Gas Line Development Corporation to issue bonds unless the legislature affirmatively voted to stop it within 90 days.

The Senate version flips the default where the Alaska Gas Line Development Corporation now needs the legislature to actively approve a bond issuance within 90 days, and there is no small-dollar exception. There's a new heating fuel assistance fund established in the Senate version that creates a new fund setting aside 20% of the state's royalty gas revenue from the project to help lower heating costs in parts of Alaska that will not have direct pipeline access. Mr. Speaker, the tax itself is calculated differently—. Mm-hmm. The ABT tax I'm speaking of.

The House version charged a separate rate for each piece of the project: the pipeline, the treatment plant, and the LNG plant. And it was weighted by how much was spent building each one of those pieces. The Senate version instead charges one flat rate per unit of gas that increases over time. First, when the LNG plant starts running, it's at 10.6 cents per 1,000 cubic feet of gas. Then after 10 years, it doubles to 21.2 cents per thousand cubic feet of gas, and then in 2060 it doubles again to 42.4 cents per thousand cubic feet of gas.

Where the tax money goes is also differently. The House version gave a 93 to 7 split favoring municipalities hosting the treatment plant and the LNG export plant, and a 50/50 split for the pipeline portion. The Senate version uses a different more granulated percentages that change once the LNG plant comes online with established shares for the Kenai Peninsula Borough, the North Slope Borough, and the state and communities along the pipeline route. The Senate version, the tax break no longer expires but continues permanently. The House set a sunset at 2060.

The deadlines for losing eligibility are also different. The Senate version adds an earlier deadline that did not exist in the House version. Thank you. If a final investment decision by the developer is not reached by January 1st, 2028, the project loses access to the alternate volumetric tax rate altogether. The Senate version also raises the bar for a construction deadline requiring the Phase 1 pipeline to be finished in 4 years, Mr. Speaker, by the end of 2032.

The Municipal Impact Grant Fund is simplified and the dollar figures are removed. More significantly, the S-Corp tax provision was inserted on the Senate floor. This bill would add a new graduated income tax to pass-through entities that produce, transport, treat, store, or process oil or gas in Alaska. The tax is bracketed from 0 below $1 million in taxable income up to 9.4% on income over $5 million. This provision, Mr. Speaker, is considered economically counterproductive at the moment the state is trying to attract final investment decision on Phase 1 and Phase 2 of the gas pipeline.

Layering a new entity-level income tax on top of the property tax abatement and volumetric tax regime the rest of the bill is designed to create raises the effective cost of capital for the pass-through structures commonly used by pipeline treatment and LNG developers undercutting the certainty and competitiveness the underlying community substitute is trying to lock in and risk discouraging the very investment the bill's tax abatement and AVT structure were built to attract. Further amendments were made impacting foreign entity participation, cost overruns, effects of project failure, and inflation adjustments. These amendments were not vetted or extensively explained on the other body's floor, and we do not yet know their full impact. Thank you. I urge members to vote no on concurrence.

Thank you.

Are we ready for the question?

The question being—.

Brief, please.

Will the House please come back to order? Mr. Majority Leader. Yeah, I'll follow the exact script language here, but I do believe I actually made the motion, but I'll say it. Mr. Speaker, I move that the House concur in the Senate amendments to committee substitute for House Bill 381 Finance amended, thus adopting Senate committee substitute Committee Substitute for House Bill 381 Finance Amended and recommend the members vote no.

Are you ready for the question? The question being, shall the House concur in the Senate changes to Committee Substitute for House Bill 381 Finance Amended, thus adopting Senate Committee Substitute for Committee Substitute for House Bill 381 Finance Amended Senate? Members may proceed to vote.

Will the clerk please lock the roll?

Does any member wish to change his or her vote?

Will the clerk please announce the vote? 12 Yeas, 28 nays. So with a vote of 12 yeas to 28 nays, the House has failed to concur in the Senate change to House Bill 381. In the event that the Senate fails to recede from its amendments, I appoint the following members to a conference committee to meet with a like committee from the Senate to consider House Bill 381. Chair, Representative Schragg, myself, Representative Edgeman, and Representative Ruffridge.

Madam Clerk.

House Concurrent Resolution number 302 by the House Rules Committee authorizing the Senate and the House of Representatives to recess for a period of more than 3 days. Mr. Majority Leader, if we could—. Yes, Mr. Speaker, this resolution allows the legislature to focus on the work of resolving the differences between the House and the Senate version By not having to hold floor sessions every day, Mr. Speaker, it is our intention that we are going to be adjourning to a time certain, which we have shared with the minority, making certain that it is well understood this body intends to bring this to a conclusion in short order. And that will be for Tuesday, June 30th, at 10:30 a.m. when I do make that motion.

We can call another session even earlier than that if needed, but it's intent that the important discussions going towards agreement on a bill that works will continue during this 10-day interlude. But that is the time certain that we will be coming back together as a full body. Thank you, Mr. Speaker. Okay, brief it is.

Will the House please come back to order. Minority Leader Johnson. Thank you, Mr. Speaker. So I would say that this continuing resolution has been one of the things that has been of some concern because what we don't want to happen is we do not want to take it up, gavel out, not come back for a month, and sometimes things like that have happened. I just want to put on the record the conversation that I've had with you, Mr. Speaker, and what I understand the intention to be.

Even though at one time we talked about having this continued continuing resolution have a time certain, the 1st of July, the 29th of June, a specific time certain. Instead, we are going to vote on this today, and even though it doesn't have a time certain on it, the intention is to adjourn to, I think, around the 1st of July. With the intention that the conference committee will be meeting during that 10 days that we won't be in session, but they will have the opportunity to take things up, that people would be working in good faith and come to a resolution on this. I've had a lot of good conversations indicating that that's the plan. And that's— The other thing that's on the calendar that's of note is that we do have another bill from the governor.

So even though we've taken up 381 and we brought it back in the same condition, or we're getting ready to bring it back in the same condition that it's in. There may be an opportunity, or there may be some use for this other bill that the governor has, and whether that's put together in conference committee or in the future, my hope and my goal and my conversation has been that there will be a good faith effort to pass legislation that will continue the conversations that we're having, and that this won't be an excuse to not be here, that this will be— is just a method of being able to make things work well and work smoothly and acting in good faith and working with the other body to bring this legislation to a conclusion. Thank you, Mr. Speaker. Thank you, Representative Johnson. Your comments are as I understand them, so thank you for articulating all of the above.

So I'm Looking at the— Mr. Majority Leader, I think procedurally we have satisfied.

So I'm going to turn the body, if you're ready to vote. The question before the House is, shall HCR 32 pass the body? Members may proceed to vote.

Will the clerk please lock the roll. Does any member wish to change his or her vote? Will the clerk please announce the vote? 40 Ayes, 0 nays. By a vote of 40 ayes to 0 nays, HCR 302 has passed the House.

Madam Clerk.

I have no further citations or resolutions for introduction.

Madam Clerk, are there any bills for introduction? House Bill Number 3001 by the House Rules Committee by request of the Governor, entitled 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 Act. Development Corporation and funds of the Alaska Gas Line Development Corporation relating to reporting requirements for natural gas pipeline projects, creating the Alaska Affordable Heating Fuel Fund, relating to approval of contracts by the Regulatory Commission of Alaska and inflation adjust—. Of the—. Inflation adjustment of the maximum price of natural gas, relating to an alternative volumetric tax on natural gas throughput, relating to a municipal Impact Grant Fund Program and Fund relating to agreements and a payment related to a natural gas project and providing for an effective date.

As a matter of procedure, I'm going to refer the bill to the Finance Committee, although I don't believe it will be the vehicle going forward to be consistent with the minority leader's comments.

Madam Clerk. House Bill number 3002 by the House Rules Committee by request of the Governor entitled an Act Relating to the Elimination of Income Taxes on Pass-Through Entities attached as a letter and one indeterminate fiscal note. It will also be referred to the Finance Committee. I have no further bills from the Governor this morning, Mr. Speaker. This brings us to consideration of the daily calendar.

Madam Clerk, please read the first item. There are no items on today's calendar, Mr. Speaker. This takes us to unfinished business. Is there any unfinished business before the body? Mr.

Majority Leader, any excused absences? Mr. Speaker, I move and ask unanimous consent that the following members be excused from the call of the House on the following dates and times: Representative Carrick from Saturday, June 20th at 12 noon to Friday, June 26th at 11:59 PM. Representative Hannan from Monday, June 22nd at 6 AM to to Monday, July 6th at 8:00 a.m. and Representative Josephson from Wednesday, June 24th at 8:00 a.m. to Friday, July 3rd at 9:00 p.m. Hearing no objection, the members are excused on the dates and times indicated by the majority leader. Brief ease.

Will the House please come back to order. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the House stand at adjournment until Wednesday, July 1st at 10:30 AM. There being no objection, the House is standing adjourned until Wednesday, July 1st at 10:30 AM.

10:30 AM.

Good morning.