SRES-260513-0900

I call Senate Resources Committee meeting to order. Today is Wednesday, May 13th, 2026, and the time is 9:00 a.m. Please turn off your cell phones. Committee members present today: Senator Rauscher is possibly online. Senator Kawasaki, Senator Dunbar, Senator Myers, Vice Chair Senator Wilkowski, and I'm Senator Giesel.

I believe Senator Clayman will be along at some point. We have a quorum to conduct business. I want to call out Heather, who is keeping the minutes for us. This is actually a seriously important role because what happens in these committee meetings is often used in Courts of law. Thank you, Heather, for your work, and thank you, Chloe, for the audio.

Welcome to Senator Clayman, who is joining us. On the agenda today is Senate Bill 280, Supporting a Gas Line for Alaskans Act. This is the 28th hearing of this bill by Senate Resources. First, we're going to take up amendments today. We are continuing.

We're going to start with Amendment H5. Then we're going to hear from our consultant, Daphne Klein. If there is time at the end, we will take public testimony. We do have to adjourn a bit before 11 today because of some other commitments related to the floor. So going to amendments.

Senator Rauscher, are you able to hear us?

Amazing. He just materializes. Welcome, Senator Rauscher, to the committee.

Directly from the plane, I understand. Senator Rauscher, we're taking up amendments and they're your amendments, so I'll let you get your papers together. Yeah, I appreciate it. Thank you, Madam Chair. I just had to go to Texas.

Yes, understood. So we're on Amendment Number H5.

Senator Rosier. Okay, Madam Chair, I move Amendment Number H5. And I'll object for purposes of discussion. Senator Rosier. Thank you, Madam Chair.

So Amendment Number H5 allows relationships with foreign entities unless it results in controlling interest of 50% or more or exceeds $500 million. Legislature shall act within 90 days if approval is required. The amendment's about finding the right balance between oversight and practicality. We all agree that significant transactions deserve careful review, But the blanket approval requirement casts too wide of a net and risks slowing down the routine and agreements that are necessary to keep the project moving. This focuses on being able to make that happen more efficiently.

Thank you. Is there discussion?

Well, Senator Rosier, I'm going to oppose I obviously objected. I am going to continue to object to the amendment because we need to know where the ownership is going. This is an asset of the state and for an entity purchasing in controlling ownership, any controlling ownership, we need to know about. So that would be my opposition to it. Senator Myers?

Yeah, um, so Madam Chair, we— I raised a couple of weeks ago, I raised, uh, a concern about legislative approval of gas sales overseas, and that part got taken out, um, because as I, as I raised then, the question is how much power does the legislature actually have to regulate foreign trade, in effect? And so that's primarily a federal issue. Um, we've got, in my opinion,.

Similar problem dealing with the legislative approval of these contracts, whether if we're talking about foreign— especially if we're talking about only foreign ownership as opposed to either foreign or domestic. You know, if somebody from a U.S. company wanted to invest, we're not requiring legislative approval for that. So this looks like something that I'm concerned with, that we're overstepping on constitutional grounds, that this would have to be at the federal level. Glenn Farn and a couple of others have reminded us that we've got federal regulation on how much foreign companies can invest and otherwise be involved in business in this country in general. A decade ago, when there was talk about the Chinese investing in our gas pipeline, the federal government did intervene then.

So we've already got another government body that is providing some oversight on that. And so I would agree with Senator Rauscher that we need to either limit or, or or potentially even eliminate this provision in the bill. Madam Chair. Further discussion? Senator Dunbar.

Yeah, I think that— thank you, Madam Chair. I agree with Senator Myers. I agreed with him when it came to the gas sales. And I think in most cases you are correct. The state government could not intervene and say that a private company couldn't have foreign ownership.

But that's not what's happening here. This is sort of a unique situation. We own AGDC. I think we have much more control over what AGDC can say or do, or the stakes that they can take, than we would over a typical private company. I think most of those federal laws and most other states' laws don't contemplate a state entity of this size.

You know, most other states don't have, you know, this is a government corporation. And so, I don't think that there is a constitutional concern with us, with what we do. Vis-à-vis our own state corporation. And I do think here, $500 million, first of all, I just think that number is set a bit too high. I remain a bit concerned about us, what we do here, maybe impacting some of the financing, not the equity ownership, but some of the financing.

But I don't think that is I don't think that's an issue in this particular provision. So I agree with the chair and I will oppose this amendment. Thank you, Madam Chair. Further discussion?

Seeing none, I will maintain my objection. Heather, please call the roll. The question before us is: shall Amendment H5 be adopted? Heather? Senator Clayman.

No. Senator Wilkowski. No. Senator Kawasaki. No.

Senator Rauscher. Yes. Senator Dunbar. No. Senator Myers.

Yes. Senator Giesel. No.

2 Yeas, 5 nays. And so by a vote of 2 yeas and 5 nays, Amendment H5 has failed to be adopted. Senator Rosier, you have the next amendment, number H6. Thank you, Madam Chair. Um, I have an H6 and an H7.

They're two different numbers. I figure one's just never gonna make it, so I'm just gonna run H6. I'm not going to present H7 in the future, so, um, uh, just to let you know. All right, your motion, uh, motion is to move H6. I will object for purposes of discussion.

Senator Rauscher. Yeah, thank you. So this number, um, it has to do with the, uh, the amount, uh, from $1 million to $500,000, uh, per mile. Just listening to the testimonies, uh, week after week, meeting after meeting, everything has to pencil out. I think it's getting harder and harder for this to pencil out.

We're not seeing FID sometimes, maybe suggest that. So, and they're waiting for us to decide somewhere. And so I'm just thinking maybe the million might be just a little bit of a reach, and I'm hoping that it might pencil out a little better at about $500,000. I'm thinking that we could probably go lower, but I'm willing to go with the $500,000, and I think it aligns the cost with the project cash flow. I believe it preserves full benefit to communities, yet still is able to save face where a million dollars might be more.

And I know some of the communities are probably banking on a million dollars. If they're banking on a million dollars on a pipeline that doesn't happen, they won't get it anyway. So I'm just hoping that this might help it pencil out a little better. Thank you, Senator Roscher. Is there discussion?

Senator Wilkowski. Thank you, Madam Chair. The million dollars a mile came from— was an attempt to try to replicate the MAG report from 10 years ago, which adjusted for inflation would obviously be much more. The producers got together with the local communities and the governor's office at the time And they came up with a number, community impact fee, of around $800 million. And so that's where the million dollars a mile came from.

It wasn't just picked out of the air. That said, I understand the economics of this project are a challenge. And if this is what it takes, this is a significant, significant cut in the community impact fee. But if this is what it takes to get this pipeline forward, I could be open to supporting it.

Reduction. Further discussion? Senator Myers. Yeah, um, so we've had a lot of talk in the committee here about what are the true costs of the project and asking those questions of the developer, DOR, and a couple of others. But we've had no talk that I'm aware of of what the true costs to the municipalities are going to be.

Will there be some? Absolutely. Will they be as high as what's in this bill? I find that highly unlikely. In 1970, we had a population in this state of about 300,000.

We had, I believe, approximately 70,000 people come up to work on the pipeline at any given time. I think the high— I think the highest number working on it at any given time was about 20,000. Um, yes, it was nutty enough that my stepmother, who was living in Fairbanks at the time, decided to leave town for 7 years until it was all over and done with.

It was harder to commute back then, so pretty much— so almost everybody had to live in-state. You couldn't do the two-on-two-off thing like we do now. Our current population is 740,000. It's almost 2.5 times what it was back then.

The projected employment for this pipe is 10,000 to 12,000, so roughly half of what TAPS construction was in terms of employment. And honestly, a lot of people, especially if we're talking about the remote camps out, a lot of them probably will do some sort of remote commute, you know, and stay living in, you know, I don't know, Oklahoma or Montana or what have you, further reducing the local impacts. So We've been throwing up alarms about outmigration for years now, and now that we have a chance of people coming in, we're freaking out about it. That seems very backwards to me. You know, my initial thought is, as I'm looking at how this is going to impact our communities, is at least some of it's going to be absorbed just by reviving already existing infrastructure and services that, that we've had to be slowly shrinking here over the last decade or so.

So The dollar figure looks way too high. It's copied from, as was just said, it's copied from a project that did not go forward. So staying with that model says to me, well, we're trying to copy from something that didn't work. That's not something we should be copying from. And as I was trying to bring up with Mr. Stickel, was that just yesterday?

I don't know. It all blends together.

If there's— if it's supposed to go out in grants, it doesn't go out directly to municipalities. So if there's extra, it's just going to stay with the state, and then it's no longer a community impact fee. Then it's the state pulling down extra money. So I would support, uh, this amendment, and I'd support lowering even further if that was a possibility. So thank you, Senator Myers.

Um, I, I have to comment because of course I was here at TAPPS We had an income tax on all those out-of-state workers, all those Texans and Okies that were here. We also had an education head tax, which probably would equate to $1 million a mile, but that's speculation. Further discussion? Yeah, I guess—. Senator Kawasaki.

Thank you, Madam Chair, and I appreciated both Speaker to my— both speakers to my right. This was a discussion about 10 years ago when they did have the Municipal Advisory Group, and it was discussed how much a municipality or community would be impacted, and that's why they came up with the $800 million construction-related payment-in-lieu-of-tax system. I think that, you know, there was a lot of.

Thought that went into what it would take and what kind of pressures a community would feel. And they did a lot of studies. Greengate was one of the contractors. The other one was— I'm trying to remember. But there were several contractors that did the analysis to kind of figure out how it would impact the municipal.

We pass laws all the time at the state level. Sometimes we pass laws that essentially just push this responsibility onto state government, or to local government. As a person who sat on a city council before and had revenue sharing at the $8 million level— it's $80,000 this year, $8 million 20 years ago— I recognize that there are some tremendous costs that we potentially are going to be passing on to municipalities by what we— our actions are here today. And so I think that the original $800 million was a good look at it. I think that I might be able to support something lower too, but I think it's hard to say that we didn't do any analysis because there was a lot of analysis that went into the $800 million that's in this bill currently.

And the costs that would be borne by small municipalities and big municipalities all up and down the rail belt. So thank you, Senator Kozuch. Further discussion?

Senator Rauscher. Yeah, appreciate it. I don't— I'm not going to dispute where the number came from, the 1 million. And I imagine it has good intention purposes, too. I'm just trying to get a pipeline built.

That's all. I want to make sure that they get the benefit from low-cost energy in a few years after that's up and running. And if the pipeline doesn't get built, they don't get that, and we don't get this, and nobody gets anything. So I'm just hoping that this will help the number. Thank you, Senator Rauscher.

I will remove my objection. Is there further objection to adopting Amendment H6? Seeing none, amendment number H6 is adopted.

Senator Rauscher, H— amendment H7 has your name on it as well. Madam Chair, I'm going to roll that to the bottom for now. Very good. Now we're to amendment H8. Senator Rauscher.

Madam Chair, I move Amendment H. I will object for purposes of discussion. Senator Rauscher. Basically, there's a lot of pages and just a lot of marks, right? Delete, insert, delete, insert.

What it does, it allows the municipalities to levy taxes and not us, so the property taxes. So in the original governor's Property tax bill, he, uh, it originally went to the, uh, the communities themselves, okay, the municipalities. In the newer versions, we basically had control of the money and we allocated it back out to them. Now, hearing from each one of the municipalities, it seemed like they were not really happy with that idea for various reasons. They thought we only meet 4 times— I mean, 4 months out of the year.

They thought the expediency would not actually fall toward a time when they can actually utilize the money, considering we kind of allocate things during session and then it gets applied in July sometimes on an appropriation, if it's signed by the governor or in a budget or however we do it. So they had a little angst about whether or not that would actually work out profitably for them when they're incurring some of those things that they need right now. So that's what this bill does. It returns it back to the original form the governor had in his bill. Thank you, Senator Rauscher.

Is there discussion? Senator Dunbar? Thank you, Madam Chair. I guess a question— trying to read through this now— the Our version, I say the, the most recent version of the legislation, H version, H also contains a split between the localities and the, um, and the, uh, state. Does this amendment maintain that split, or does it just say it all goes to localities and they, um, and they're the ones who administer it, or do they I believe—.

I have a question for Senator Rosier. Yeah. I believe the question would be for the writer, but I believe it's 50% is supposed to go to them directly. Senator Dunbar? No, I was just making sure that— there's just a lot of deletions and repealers in here, and I'm just trying to figure out if they also deleted the portion that goes to the state.

Is there further Discussion.

Well, I will maintain my objection and comment. Senator Roscher, this is a giga project. You heard our consultant Pegasus make that statement. Probably the largest industrial project in the world at this time, just as TAPS was at the time. We— the version that is before us today, version H, recognizes that the entire state should benefit.

And so there is the provision in the current bill that puts 50% of the asset, of the taxing, to the local areas, but then distributes the rest to the rest of the state. So that every Alaskan benefits from the project. So I will maintain my objection.

So Heather, we are voting on Amendment Number H8. Should Amendment H8 be adopted? Heather? Senator Wielekowski? No.

Senator Kawasaki? No. Senator Rauscher? Yes. Senator Dunbar?

No. Senator Clayman? No. Senator Myers? Yes.

Senator Giesel? No.

2 Yeas, 5 nays. And so by a vote of 2 yeas, 5 nays, H8 amendment has not been adopted. That takes us to amendment number H9. Senator Rosier. I move amendment number H9.

And I'll object for purposes of discussion. Senator Rosier. So basically, I appreciate it. So basically what this one does, um, I had talked to, um, AGDC and others, and I said, what happens to the gas in the inlet? Once this pipeline is built.

And there was basically remarks made, mentioned that they may cease to exist as far as being able to keep— well, they're drilling holes right now for the future, and what happens to that? Well, apparently there might not be any future for them, okay. So basically what this does is says, yes, they have a future, they can sell their gas in this pipeline also. That's what it says. That's what this amendment about, because I just want to make sure that people that are keeping the lights on for us right now are able to not have to go out of business once the pipe's built.

Thank you, Senator Roscher. Senator Dunbar. Thank you, Madam Chair. Um, I appreciate where this amendment is coming from, and I, I don't oppose it. I think that there's probably no harm in guaranteeing that cooking with producers are able to sell into the project.

I'll just say that I think, if the project's own rhetoric is to be believed, by the time you get to the end of Phase 2, the gas from the North Slope is supposed to be much cheaper than the gas from the inlet. Whether or not that actually happens, that's what we— we have had 26 or whatever hearings about that. But, um, I, I think that the, the gas in the inlet will be difficult to recover economically once the project is at full bore. That being said, I don't think there's any harm— I I don't believe that I can see any harm in putting this into the bill. If the project itself comes back to us and says there's some technical reason why this can't happen, we can reevaluate.

But for now, at least, I would support this amendment. Thank you, Madam Chair. Thank you, Senator Dunbar. Further discussion? Senator Kawasaki.

Thank you to the sponsor of the amendment. I was wondering how the commissioner would decide whether a supply is economically recoverable. And what sort of wherewithal, what sort of decision points have to be made for that to happen. Senator Rosier. Thank you, Madam Chair.

Senator Kawasaki, I don't believe that this says they must do anything, but it just says if they want to be able to sell their gas, they still have gas in the ground, it's still You know, they're drilling holes, they're looking for it every day, because right now we don't know whether we're gonna get a pipeline, whether we're gonna go overseas, or whether.

We're going to be able to keep up with what we have today. We haven't gone overseas yet. It's getting close, but they're still drilling and they're still anticipating and they're still hoping. So if by chance they still have gas under the ground that they want to sell, they'll now have to sell it overseas because we've got a contract with whatever's coming out of the pipeline. Um, if they still want to be able to sell their gas, which they've already got I think they should be able to put it in the pipeline.

Further questions, Senator Kawasaki? No. Further discussion?

Seeing none, I will remove my objection. Is there further objection?

Seeing none, Amendment Number H9 has been adopted. Senator Rauscher, you asked that Amendment number, I think it was 9 or 7. Amendment number 7 be rolled to the bottom. Senator Rauscher.

Well, you know, what the heck. That's right. Madam Chair, I move H7. All right. I'll object for purposes of discussion.

Senator Rauscher. Madam Chair, the same discussion, different number, uh, as earlier. This talks about the million dollars, uh, and now apparently it's in the current form of the legislation at $500,000. Number 7 actually lowers it to, uh, $250,000, and for the same reasons, all of the same reasons. I don't need to repeat them all.

It's the same reason. It's up for you guys to decide whether or not I think it's a good idea. Discussion. Senator Dunbar. Thank you, Madam Chair.

So I'm just trying to do the math right here. So we've been saying $800 million, but I think it's actually $740 million if it's a 740-mile pipe at $1 million a mile. And so this, I believe, if it is a 740-mile pipe, and that might be a little bit off, but if it's that, then this is $185 million. Which is still a very substantial amount of money, but obviously 75% less than was in the initial bill. I think it's worth considering.

I do. I know that Senator Wilkowski has made good arguments about why that initial number was put in there, and Senator Kawasaki has pointed out that that wasn't just pulled out of the air, that there was a lot of analysis done. But I also feel that there's other things in this bill that try to make the state and the communities whole. And so long as those provisions remain in, I think that this initial upfront cost can be brought down a bit. And so I think I would lean towards supporting this amendment.

Thank you, Madam Chair. Thank you, Senator Dunbar. Is there further discussion? Senator Kawasaki. Yeah.

So I found the actual quote I was looking for when they were discussing under Senate Bill 138 what that base case was. For how much the property taxes should be during construction, uh, that it, uh, was supposed to be that they would likely see $1.68 billion to $1.79 billion if temporary construction costs were 10% lower, $1.58 billion if temporary constructions were 10% higher. So they created sensitivity graphs to figure out what would be the, the variable. The agreed-upon in the end, because it was required under Senate Bill 138, was the $800 million. So you can tell that even then it was roughly 50%, 48% of the base case, uh, status quo tax during the project, during the project construction timeline.

And I mean, it was pointed out that, okay, that didn't work, the $800 million didn't work. So the construction bill, maybe that's too high. But this is coming down again from $1.8 billion. And I think that, you know, I feel like we need to get, they need to get something at the local level to ensure that they're not just, that they're just not run over completely as local communities. And so I'm okay with that half million per mile.

Again, that's a quarter. This would be down to an eighth of what the original base case was, analysis was under Greenberg, under Senate Bill 138. So. Thank you, Senator Wielekowski. Senator Myers.

Yeah, I got a question for Senator something key over here. The, that $1.8 billion or whatever you came up with, was that Was that based on calculated community impacts or was that based on just calculated property tax based off of the value of construction of the line? Senator Kawasaki. Sure, thanks. There was a lot of analysis done on both the impact and the property tax.

So I don't exactly know how it was— what the machinations were, but it was both. It was both. Senator Myers, further discussion?

Well, just as an addendum to Senator Dunbar's comment about the mileage. So the initial mileage, yes, is 740, but then if I'm reading the bill correctly, they would build an additional piece of pipeline to get to Nakiski for the export portion, and that would apply as well. So phase 1 of it, it's the 740 ish miles, but then you got that extra 65 or something to get it to get to Nakiski. So it does put it a little over 800. I think that— I thought the total figure was 807, if I remember right.

But pretty close, something like that. Further discussion? Senator Clayman. Thank you, Madam Chair. I would just— listening to Senator Kawasaki, Senator Rauscher, I'm struck with inflation, and I think about the figures from some years ago which were apparently over $1 billion, although I'm unclear about exactly how much of that was taxed and whatnot.

But I am struck that Senator Rauscher is doing a good job of showing deflation from $500,000 to $250,000. And if I try to put a match between the inflation costs, which I am certain have gone up, with the deflation suggested, I find myself not really comfortable going to $250,000. $1,000. Thank you, Madam Chair. Thank you, Senator Clayman.

Further discussion?

With that, I'm going to maintain my objection. So the question before us is Amendment H7. Should this be adopted? Heather? Senator Dunbar?

Yes. Senator Clayman? No. Senator Wilkowski? No.

Senator Kawasaki. No. Senator Myers. Yes. Senator Rauscher.

Yes. Senator Giesel. No. 3 Yeas, 4 nays. So on a vote of 3 yeas, 4 nays, H— Amendment H7 has failed to be adopted.

That is the end of the amendments that I had. Senator Myers. Yeah, Madam Chair, if I remember right, we set aside G3 that I had, and I'd like to bring that back up at this time. We had some— we did a little research overnight on a couple questions that got asked, if that's fine at this time. I'd be happy to do that, Senator Myers.

So we are now looking at Amendment G3. Senator Myers. Thank you. I can't remember if I need to move the amendment again or not. It'd be good.

Okay. Just to be on the safe side, I'll move G3. All right. And I'll object for purposes of discussion. Senator Myers.

Yeah, thank you, Madam Chair. So as a reminder, so what this amendment did is it is exempting spur lines from the standard property taxation at both the state and municipal level.

And, you know, again, I'm primarily doing this for the Fairbank spur, but the way we wrote it, it would apply to all spurs that go to a community or to a utility. It would not apply to something like a spur line going off to an industrial project such as Donlin Mine. Um, we— there was some question about how this would apply to the natural gas utility up in Deadhorse. That's Norgasco. It is a privately owned regulated utility regulated by the RCA.

So from a legal standpoint, it's in the same legal category as NStar. In South Central. And we took a look at Title 43, the property— the oil and gas property tax statute. And under the definitions, and I've got some extra copies here if people are interested, in the definition of taxable property, it says 5 does not include, number 3, oil and gas pipeline systems owned and operated by a public utility that is certified under AS 42, et cetera, and is regulated by the RCA. So the question was whether or not the amendment in question would— could potentially make Norgasco tax-exempt.

Norgasco is already tax-exempt because of the way the statute is saying it does not tax utilities.

Whether that's public— whether that's— yeah, any— it does not tax utilities that are not owned by municipalities. Now, utilities that are owned by municipalities are already tax-exempt because anything municipally owned is tax-exempt, which we covered previously. So this amendment would not change anything related to Norgasco up in Deadhorse. It doesn't change anything related to Enstar. It doesn't change anything related to any other natural gas utility in the state.

I think, I think IGU is the only other one because I believe NStar covers all of South Central.

So, oh, yeah, I believe Norgasco covers Ukdiyabik as well. So should not— it shouldn't affect anything utility related because they're already tax exempt. So it's just affecting the spur lines that get to those utilities then.

Further discussion?

Senator Myers, you have discussed another spur line that already exists. The question is, what does this— how will this affect future spur lines? We had talked about Cantwell, for example, possibly putting— requesting a spur line. So what have you considered related to future potential spur lines? So that, Madam Chair, that's why we wrote the amendment the way we did, because if a spur line goes to— for example, I mentioned Cantwell and Healy yesterday— those spur lines would be tax-exempt as well because they are going to a community distribution network.

Now, it's already in those communities, it's already going to be difficult enough to build out a distribution network with a very small customer base to get them started. Adding in a property tax on top of a spur just to get the gas to that distribution network is just going to get passed on to local Alaskan consumers. And, uh, that I, I don't see that that's beneficial for us in the long run. So the future spurs would be tax-exempt as well. And any sort of local distribution network would fall under standard state and municipal taxation that's handled completely separately.

It's not handled at all in the oil and gas property tax title that we're discussing here.

Thank you. Senator Rosier. Yeah, thank you, Madam Chair. Just for clarification, doyon, it leaves the Matsu Borough and it stays in the Matsu Borough for a few miles, um, before it actually leaves the borough. So how does that work?

Senator Myers. I'm sorry, what? What? Builds a gas line and they want to build a gas line. Oh, okay.

And it originates in the Matsu Borough. Mm-hmm. And then it stays there for a while before it leaves. So how's that work? So— According to what you have here.

The portion of it would be potentially taxed by the borough under standard property tax rules, not under the oil and gas property tax rules. That's handled under Title 29, not handled under Title 43, which is what this bill is talking about. So that's— that is completely and totally separate. Madam Chair. Yes, Senator Dunbar.

Thank you, Madam Chair. And I think I know the answer to this question, but we also need to build the legislative record on this. So the line going out to— there's a proposal for a spur line or another line that runs out towards Donlan, but then branches to potentially a trunk that splits and then it goes to Bethel. Portion of it goes to Bethel. At the same time, along the way, it might drop off at mining projects, right?

So you might have, you might have a, um, before and after the split, you have the spur serving mining projects, but also going to a utility. So it, I think it would be possible, but would it be sort of proportionate that the portion that is going to the, you know, the calculation, the proportion that is going to the utility is tax exempt, but the proportion that are going to the mining projects or whatever the project may be would still be subject to the tax? Senator Rausch or Senator Myers. Yeah, so, um, I would have to take a look at that. And, uh, I know that we're a long ways off from that anyway on a timeline basis.

So, uh, you know, the Fairbanks spur is something that is, um, in the relatively immediate future here. Uh, I know they are still working on some permitting, uh, but the Donlin connection just first got brought up last year, so they got, they got a long way to go on that. From, from a permitting side before they get into construction. So that does give us some time to look into that. Um, again, the, the, the way that I read the amendment, the way that I read the underlying bill, if it's just going to Donlan, it's not going to qualify because it's not going to community.

It's going strictly to a single industrial customer. Um, if we're going to, you know, branch off from that into Bethel or Naknak or something along the way, then yeah, I think we should definitely look into making sure that the piece that is then going to, uh, to those communities should be tax-exempt as well. I'm not aware of any other line in this state that handle— that goes directly to a, uh, or that goes, you know, half the line goes to industrial projects and another half goes to regular customers. I don't think we've addressed that in statute anywhere just yet. I think that's something that we may need to address here in 5 years or so, potentially, if that spur line to Donlin gets built.

Because again, Donlin is— Donlin itself is still up in the air too. So it may be a moot point. But I do believe that the goal here is To an industrial customer, a large-scale single-use customer, no. To a distribution network that goes to a community, yes, that should be.

Further discussion? Senator Wielechowski. Thank you. There are some other changes to the fundamental underlying law, and I'm just curious what those changes mean, if anything. On page 1, for example, on lines 11 and 12, It changes taxable property to real or personal property used or committed by contract or other agreement for the construction, operation, or maintenance.

I'm curious what that change means, if anything. Senator Wielechowski, my understanding is that change was made by Ledge Legal to conform to existing statute because if you go back to the definition of taxable property, it's It's saying roughly the same thing. It says taxable property means real and tangible personal property used or committed by contract or other agreement for use within the state primarily in exploration for production of or pipeline transportation of gas or unrefined oil. And then in parentheses, except for property used solely for the retail distribution of liquefied natural gas. So that was not a change that we requested.

That was a change that legislative legal put in, and I believe it's a conforming change to to match existing statute. Senator Wilkowski. Does— just as an example, if Glenfarn were to build an office building in Anchorage, under this provision, would they be exempt from paying property taxes for that office building? Senator Myers. Actually, under the taxable property definition, it's already exempt because taxable property does not include B-2, office buildings requiring substantial local government services.

I'm going to ask Sonya Kawasaki, Majority Counsel, to come forward and comment. The reason we set this aside, Senator Myers, is we actually do see value to what you're proposing. The question is unintended consequences and making sure that we are not falling into something we don't intend. Ms. Kawasaki. Thank you, Madam Chair.

Good morning, members of the committee. Sonia Kawasaki, Senate Majority Legal Counsel. I reviewed this amendment last night and I spoke to the sponsor and I do feel I understand that there are members of the committee who are interested in supporting the policy of supply to communities and community use. Um, and so I would just caution that perhaps the, uh, the amendment itself could be tailored a little bit better to ensure that the intent of the committee is captured by it, because I understand, and I don't believe this is the sponsor's fault, but in referencing certain other areas of the bill, it might not actually be the most appropriate way to capture that policy intent. And so, I mean, if the committee would like, I mean, we could work together and try to figure out how to get the policy captured a little bit better.

I just want to speak to Senator Wielechowski's comment.

Senator Myers' part of the amendment is only adding or spurline. The rest of Section 31 and Section 32 are actually already in the bill. Those actually were adopted through the governor's original version of the bill, and my understanding of reading it is it's in— it was incorporated into the bill, Section 31, for a purpose of of ensuring that the project as it's proceeding right now is what receives the exemption, the tax exemption. And just because the way that the language is phrased in current statute doesn't actually sort of fit what AGDC has, the business relationship that it's come up with Glenvarn. And so that was the intent of the provision that the governor, I believe, introduced and we adopted it for our CS that now applies a different type of alternative volumetric tax.

Thank you. Is there further discussion?

Senator Myers, I think your amendment has definite value. I would again ask, could we set it aside and ask Senator— or Madam Kawasaki to assist us in making sure we've got some belt and suspenders on this?

I suspect we could probably get back to it again tomorrow.

Madam Chair, I'm willing to continue working on it. I guess in my conversation with Ms. Kawasaki last night, I was getting a little frustrated because we talked about some different ways to draft it and we actually did some sent some, uh, some direction over to Ledge Legal hoping to get a draft. Again, recognizing that, yeah, well, it was just a few hours ago, um, and it's that time of year. Um, but I, I got to admit, I was having some frustration in my conversation with her last night because, uh, it, it felt like as we addressed each, uh, concern, other concerns were brought up that did not feel appropriate to the amendment. And so I'm at the point— I could somewhat understand the concern yesterday about Norgasco.

I'm at the point where honestly I don't understand what the other concerns are that could potentially be unintentional consequences. I mean, I understand that's our job. That's what we're trying to avoid all the time. But I don't understand what the— what the other concerns are. And so I'm concerned that this is a delay without a purpose, in effect.

So, again, I'm happy to continue working on it, but at this point, I— as I said, I don't understand what the additional concerns are, so I don't understand what we can do to make it better.

Well, we can vote on it now if you'd like. What I'm suggesting is that people do see some value here, but there are still questions. Well, I'm trying to, I'm trying to understand what those questions are. I'm not understand— I, I think I've been able to answer all the questions that have been brought up, and, uh, I don't understand what, what the questions that are left are.

Where else will Spurs crop up that should not be tax-exempt. That's the question. Well, in my understanding, Madam Chair, is we've already effectively covered that in the underlying bill because it says that a spur line is defined as something that is going to either a community or a utility. And if it's going to something besides one of those two, then it doesn't qualify and it would still be taxable. So is there further discussion?

I'm going to maintain my objection. You would like to vote today? We certainly can.

I'm offering you the opportunity to further define it, but it's up to you. All right, I'll hold off for now.

I'm sorry, I didn't understand. Sorry, I'll, I'll, I'll, I'll move that we that we table it for now to be brought up at a future meeting. And I do positively guarantee we will bring it up again. We're not setting it aside as a delay tactic. We just need to have clarification for sure.

That then is the end of our amendments. We're holding over Amendment Number H— or excuse me, G3. It was drafted to Version G but also fits into Version H. So at this time, we have online our consultant, Nick Fulford. He has been given some questions related to sunset provisions and things like that. He's prepared a presentation for us.

Mr. Fulford, welcome. To the committee.

Thank you, Chair Giesel, and it's a pleasure to be with you again this morning.

Just for the record, this is Nick Faulford from Gaffney Klein. Just to be clear, I don't think I have been given specific guidance for today's meeting, but nevertheless had prepared a few comments which hopefully will help the committee given where we are with this important piece of legislation.

So what I thought might be helpful was, was just to offer some general remarks about where we are and what the bill does, and then perhaps open it up to questions for yourself, Chair Giesel, and the committee as we try to progress this, what is a very important piece of legislation. So if that's all right, I'll proceed with my comments. That would be great. Please proceed.

Thank you, Chair Giesel. So I thought it would be helpful to recap a little bit in terms of why we're all here and why we're trying to pass a piece of legislation which will move the project forward in an appropriate way, which serves the commercial interests of the project developers, but equally protects the people of the state and ensures that appropriate value is coming from the project. So as we turn the clock back, probably a month or so, to some of the earlier discussions, I think it's useful to remind ourselves why we're here, which is that when the original property tax legislation was drafted, it was never, it was never really drafted with the intent that a project like this LNG project would be subject to it. And with the various iterations of the LNG project, the, the goal of these sort of early discussions has been to set what I would call the sort of basic fiscal framework for the project. So that would include a whole host of things, but one of the biggest unresolved questions really for the last decade or more has been this question of property tax.

So the initial driver for all this discussion was to replace the property tax framework and mechanism with a different tax framework that was fit for purpose and would enable a more robust framework for the project to move forward. So 10 years ago, I think some of you today have referred to the dialogue that took place with the MAGPR and so forth. At that time it was a PILT, payment in lieu of tax, This time around, through I think a dialogue with the project developers and the governor's office and so forth, the proposal now is to adopt this alternative volumetric tax as a long-term sustainable framework to deliver value from the project. So that's, you know, point number one, that one of the things that— one of the most important things this bill does is that it removes a— what some might term an unworkable tax and replaces it with something which is appropriate for the type of project we're talking about. So that said, the next question is at what level should that tax be set?

And even today we've heard quite a lot of discussion about the— what I would call the secondary features of the AVT, although that's not really the appropriate way to put it because every feature of it is very important. But we've got the impact fees, we've got the various mechanisms which appropriately compensate the borrowers and the people affected by the project. But which add to cost. So as things stand today,.

Agreeing an alternative framework to replace property tax is the most important thing. I think it's useful to put that out there. So, moving on from that, in effect, with each layer that we delve into with the AVT comes an extra layer of complexity and it reveals a set of unknowns, if you like, which are important to resolve before the bill is passed, particularly with respect to specific tax rates.

And again, over the last 3, 4 weeks, we've done a lot of work on the midstream part of the project, the Glenfarm AGDC part of the project. And it's tempting to do that because the midstream economics are in broad terms very simple. There's a huge amount of capital being invested. It has a debt regime that has to be funded and returns to the project sponsors. But ultimately it's a relatively simple concept of deploying capital and paying for it with a very, very long-term stream of revenues.

So in that sense, you know, we've had a lot of discussion about the capital cost of the project, what the cost of the upstream gas might be, because those are the two things which determine if the project will go forward, including of course the various tax rates, not just the AVT but the corporate income tax. And so as we, as I say, delve into that, we peel the layers away, we look at the economics.

It's very easy to focus on those, to use the —well-worn analogy is the kind of known unknowns. It is things like the capital cost, the upstream and so forth.

Now once you push that dialogue into the upstream, you face a whole additional series of known unknowns and then you also encounter and I think this has come out very strongly in the excellent DOR analysis which has been done over the last few days. You get into a level of complexity which is very hard to deal with, particularly in just a few weeks of analysis.

And, you know, because of that challenge, because there are so many interdependencies in the upstream between the gas, the condensates, the oil, it's very easy to kind of focus on the midstream, which is much easier to grasp than the upstream. But I made the point, I think, at the last committee meeting that really, really we should take a holistic look at this entire project all the way from the gas production right through to delivery of the LNG because There have been various proposals to monetize gas from the North Slope, but at the moment this is the one that will unlock many hundreds or certainly tens of trillions of cubic feet of gas for the upstream providers. So as we look at the impact on the boroughs and so forth, we should look holistically, and I think you've started to do that with some of your analysis around changes to the upstream. You know, we should look at how the broad value being generated by the project is allocated, not necessarily how it's split between the midstream and the upstream. So I think, you know, we're at this point where many, many of these unknown factors have, have a bearing on different types of tax, whether it's the AVT, whether it's the impact payments, or whether it's the upstream tax regime.

Um, and so going back to my initial comments, really one of the main goals of this legislation was to put in place a replacement for property tax. I think the AVT does that.

How you set that level of tax is problematic, I think, given that the project still has a way to go.

But even with that, it's perhaps worth, you know, looking at the numbers. I'd refer back to the DOR heat map or the breakeven matrix that I think was presented maybe the day before yesterday. You're very familiar with this by now, but what that shows— and this, I think this was version H, I think this was the version with the 55-cent aggregate tax, so I hope I'm right in that— but what that showed is that under the existing property tax at $1.50 upstream cost, there was a break-even of $9.07. The bill as introduced reduced it to $8.48, and with version H, that took it back to $9.11. So that's an increase of 6 cents over the existing legislation.

And 63 cents over the original proposal. Obviously, the amendment we're talking about now is a more modest tax rate of 40 cents in total once the plant becomes operational. So that, in very rough numbers, and I haven't done the proper analysis on this, but in order of magnitude it reduces the breakeven by about a quarter, about roughly $0.25. So, so one of the main positives of the version we have in front of us is that it does offer a cost saving for the project and it will increase the chance that the project can get out over the line. But again, you know, looking back at the various projects that we work on over the years, probably, you know, a dozen or more that we've been involved with in some detail, they are iterative, as I said in my last discussion with the committee.

I think it's likely that the legislature will have to remain very close to the development and the evolution of the project for the next many months, and I think it's likely that many of the things that we've talked about today may have to be relooked at. But again, coming back to my first comment, a tax framework that replaces the current property tax and puts in place at least a framework that is more— project appropriate, I think would be, you know, a very positive thing for this session or where we go with it. I had a couple of more questions about the Phase 1 gas line, a couple of more detailed remarks, but I'll pause there for questions. Mr. Fulford, one of the questions that we've been wrestling with is what other states do. Specifically Texas.

And we believe that Texas has time limits on tax abatements, and that's what we were hoping you could enlighten us. Is, is a repealer at 10 years on this AVT appropriate to go back then after 10 years to our regular 20 mil Property tax, what do other states do, specifically Texas?

If I may ask a clarifying question, Chair Giesel, are we talking about a scenario where a property tax amendment is made but the project isn't built, or one where the project has been operating for 10 years and that the property tax is changed. Well, I think it's the latter. Mr. Fulford, we have provisions, uh, some in, some not yet, that, that these, uh, abatements are repealed if the project doesn't go forward. But what if it does go forward?

There are projects in Texas that have gone forward. Do they revert to regular taxes after period of time of production?

Yes, Senator Giesel, they do. Texas, Louisiana both have effectively the whole, the whole property.

Tax framework in Texas and Louisiana for LNG is, is based around a 10-year holiday or partial holiday, after which the property tax reverts to, broadly speaking, I think, the, the standard rates. Um, I would add that the way in which the taxable value of the property is established in, in those states is different. To, to how it is in Alaska. And the mill rates are typically less as well. But yes, they, they, the, the concept is to offer these LNG projects a reduction in tax burden for 10 years, which, as I've noted before, is, is the critical period for an LNG project.

Um, after which, um, regular property taxes come in. Thank you. Um, Senator Dunbar has a further question. Senator Dunbar? Yes, thank you, Madam Chair.

Um, I have a question for Mr. Fulford. Then do we have someone from AGDC on the line? Is there anyone today? Uh, yes, Mr. Richards, I believe I saw his name here.

There it is. Yes, Mr. Richards is online. So I guess two quick questions for you, Mr. Fulford. Um, one is, um, so is the assumption that at that 10 years that the full normal property tax regime will be reinstated, or have any of these LNG projects got to the point where there— it's basically negotiating a second negotiation where the expectation is either that it will be extended or sort of renegotiated at that point. So I guess that's my first question for you, Mr. Fulford.

Thank you, Senator Dunbar. Through the chair, I think it's worth differentiating a little bit between the environment in Texas and Louisiana compared to the one in Alaska.

Certainly the, the Louisiana property tax abatement legislation, it is a blanket legislation which applies to any major petrochemical investment which can meet certain job creation requirements. So it's not written specifically for LNG. It's written as a kind of a to benefit major capital projects which are considered to provide economic growth for the state. So while there is some scope for individual negotiation between the LNG project and, and the state government, whether it be Texas or Louisiana, that there is this broader framework. So, so that's— I think that's an important difference that we're dealing with blanket legislation in those two states, whereas here, because frankly the LNG project is such a key, you know, binary economic event for the state, that we're focusing very much on just the project as opposed to a broader legislation which would affect, you know, a power project or something like that.

Follow-up, Jay. Well, thank you, Mr. Fulford. That's actually really interesting information. That means that it's not a forcing function. It's not expected to be renegotiated because it's not individualized.

That means they must build into their economics that after 10 years, they're going to restore— they're going to have the property tax regime restored to them. So that is actually a key point that hasn't, I don't think, been brought up in prior hearings and is interesting. And so my question for Mr. Richards, if Mr. Richards can hear me, is You know, the justification for this tax reform was to not burden the project on the front end, and that was the AVT, you know, switching from the property tax to AVT. But we do have the ability to use that kind of repealer, not in a generalized way, but just on this project, because we aren't dealing with multiple projects like Texas. Why, why didn't AGDC and the governor's office put in some kind of sunset like that so that future, you know, in 10 years or 20 years, we would be forced back to the table and we could reevaluate the work that we are doing in haste at the moment.

Mr. Richards, did you hear the question? Can you join us?

Yes, Madam Chair. For the record, Frank Richards, president of AGDC. Through the chair to Senator Dunbar, the question that I heard was that why didn't we include this in the original legislation in terms of putting in a sunset? I would say that the original intent was that the— from our perspective as well as the reviews that were done for us by the likes of Gas Strategies and Wood Mackenzie and then what you've heard from Gaffney Klein was that putting in place an alternative volumetric tax aligned with the principles of trying to have gas delivered to Alaskans at the lowest cost meant that we were looking for a structure that was going going to be in place that would essentially be aligned with the contracts for the offtake with the major utilities in Southcentral Alaska. And so, those were going to be around 30 years.

So, that's why we didn't look to provide that sunset in a 10-year timeframe or a 20-year timeframe but more aligned with what was going to be aligned with the contracts. And then to make sure that there was certainty in going out to the market for not only equity but also the debt financing to ensure that there was going to be a defined tax regime in place for the state of Alaska that would be long-term and could be counted on. Follow-up, Senator— Senator Dunbar. Thank you, Madam Chair. I mean, I guess that It makes some sense, but it sounds like other, frankly, more successful jurisdictions that already have these projects do have sunsets and sunsets that you can't even renegotiate.

And I think ours, I think we have a state has dem— have demonstrated that we are very open to, uh, passing legislation that, uh, is of very great benefit to the oil and gas industry. And so I find that answer a little puzzling. Also the idea that we're building it around NSTAR contracts when we know that Once you hit Phase 2, everything changes for both NSTAR and the developers. And I don't think anyone is contemplating, I hope not, that Phase 1 would last 10 years or more. That seems untenable.

We have to very quickly get to Phase 2 when the prices would drop very significantly, but then potentially the potential tax revenue would also, would increase very substantially. So I think your answer makes some sense, but I don't know if it's practical from our perspective as policymakers. Thank you, Madam Chair. Any further questions? We do have Mr. Richards online.

Any other questions for him? Senator Wielechowski. Yes. I don't know if this is for Mr. Richards or Mr. Fulford, but I'm just curious, out of the 8 operating and 20 FERC-approved LNG export facilities in the United States, how many are actually taxed on a volumetric basis?

Mr. Richards, do you feel qualified to answer that question? Through the Chair to Senator Wielechowski, I do not feel qualified to answer that, and I will defer to Mr. Fulford. Mr. Fulford.

Thank you, Cagizel. And I'm, I'm thinking through the, the different projects and the different taxes that apply, but I think, you know, if, if there is a volumetric tax that applies, and I don't know of any, um, it wouldn't be even close to the magnitude that we're talking about today. So, so I think we could assume that a comparable AVT to what we're talking about now would be hard to find. Follow-up, Senator Wilkowski.

Do any lower 48 LNG export facilities pay a lower total rate than 2 mills averaged over a full project life?

Mr. Fulford. Thank you, Senator Wielechowski. Through the chair, um, I think it's likely because many of the projects operate under at less than a $2 million rate, and if you then assume some degree of 10-year tax holiday at the start the average mill rate across the entire life of the project could well be significantly under 2— sorry, I'm getting mixed up between mills and percent.

Yeah, I think it would be.

Unlikely that averaging the full tax rate, which I think is about 10 mils in Texas, for example, across the life of the project, even with a 10-year holiday, you'd probably get to more than 2 mils.

But that's just an initial estimate. Follow-up, Senator Wielekowski. I know you had done some your work previously and discussing other projects around the country. And I don't know how familiar you are with Glenfarm's application for property tax concessions at the Texas LNG Brownsville plant, but I'm curious if, if you believe that what that project was as economic as the Alaska project.

Thank you, Senator Wielekowski. And I believe Glenfarn's property tax rebates for the Texas LNG project have certainly been reported in the public domain.

I made the point at one of my earlier presentations that the different tranches of property tax that apply in Texas includes school districts, towns, um, port facilities. And in about 2024, the school district property tax element, which is about half of it, was removed from the property tax rebate mechanism. So all those LNG projects that applied for a property tax rebate after 2024 Effectively, what they got was about half the rebate that the previous projects would have received, and that I think is what applies to Glenfarm. Follow-up? And are those projects still going forward after losing the property tax rebate they thought they were going to get?

Thank you, Senator Wodakowski. One of them certainly is. I'd have to, um, Check back. It is on one of my previous slides.

And it remains to be seen if the others do.

Senator Myers. Thank you, Madam Chair. So, Mr. Fulford, we have heard from Glenn Farnham from AGDC that part of the reason they wanted to switch to the volumetric tax was not just the take, but also because they were concerned about lawsuits over the valuation. If you're looking at Texas or Louisiana or those other Gulf Coast projects, did you— do you see the kind of lawsuits over valuation that we've seen over the last 50 years on TAPS and their property taxes?

Thank you, Senator Myers, through the chair. Yes. That there are— there is litigation around property tax valuations for LNG. Cove Point in Maryland is a classic example where because of the ongoing litigation concerning the appropriate level of property taxes to be paid, I think the, the school district and the various towns affected ended up in a very difficult budget situation because of wild swings in budget allocations. So Cove Point is a good example of that.

Follow-up? No, thank you. Further questions for Mr. Fulford? Senator Wilkowski? I have some AGDC questions.

Oh, of course. Mr. Richards, some AGDC questions from Senator Wilkowski. These were questions I asked for revenue the other day that they deferred to you, but with the buyers, are they taking LNG at the dock or is Glenfarn maintaining custody of the LNG through to the market?

Through the chair, Senator Wilkowski, again, the offerings for LNG offtake would be to either have purchase at the dock face or at a delivered cost, and that will be a negotiated provision between Glenfarm as the marketer and the actual offtake.

Follow-up. How does the project treat expansion costs for new gas beyond the initial contracted volumes? Through the chair, Senator Wielechowski, part of the provisions that AGDC required in our agreements with Glenfarm what was what we call the Alaskan Advantage principles. And that's where we, again, for in-state needs reserved 500 million standard cubic feet a day. But also if there was need beyond that 500 million that required expansion, that it would be built in and the cost for the additional compression volumes were needed above the design throughput were needed, and that would be factored in across the volumes to make them economic for instant use.

Follow-up. We spent quite a bit of time during a GEA discussing the idea of rolled-in rates for expansion, and I'm curious how this project would deal with rate charges in the case of expansion. Who picks up the additional costs?

Through the chair, Senator Wachowski, that will be a negotiated element between the developer and the new entrance into the project. I mean, it's always envisioned that as there is a transportation mechanism for gas from the North Slope, that there would then be the opportunities for additional development of gas resources, and that the line does have the capacity for additional expansion. It would require, as I said, not only compression along the pipeline, but also additional treatment on the slope. So that would have to be designed, it would have to then be factored into what those costs would be on those additional volumes to be able to then see if the market is willing to bear those additional costs. Senator Wilkowski.

And in— the concern is for South Central or interior customers. They go ahead and they contract for gas and then there's an expansion and there's increased compression costs and other costs that are incurred, and would the utilities and the consumers be expected to pick up those costs, or would they be solely borne by the new entrants?

Uh, through the chair, Senator Wolkowski, again, the contracts that, let's say, for offtake to utility will be through the RCA process, which would then set those rates for that consumer. Any additional cost incurred for new entrants would would not be borne by those existing contracts.

Follow-up, Senator Wielekowski. Is the expectation that the entire project will have postage stamp rate? In other words, every single customer up throughout the project, and including spur lines, would pay the same rate?

Through the Chair, Senator Wielekowski, that's a variable within the model and has yet to be, I think, ultimately decided or determined in put into the contracts. We'll see when the actual contracts are in front of RCA.

Follow-up, Senator Wielechowski, but before you ask the next question, there are a couple folks here in the room that wish to testify today. They did make an effort to be here in the room. We do need to adjourn at 10:30. We have some additional activity on the House— or excuse me, on the Senate floor today. Last question then, if that's okay, Madam Chair.

Yes. Has Glenfarno or the state engaged with producers to ensure that a gas balancing agreement has been reached allowing major gas sales to occur?

Through the chair, Senator Wielechowski, I'm not privy to the negotiations on the gas balancing agreement. That's something that is, again, with the leaseholders, and I think that's going to be an issue between the Department of Natural Resources and leaseholders.

Thank you, Mr. Richards, for joining us today. Mr. Fulford, thank you for joining us as well. We will be in touch with additional questions for you, Mr. Fulford. So with that, I am going to briefly open public testimony today. As I said, we need to adjourn at 10:30.

Um, in the room I see, uh, again Based on time you signed in, Charmaine Gatteau was signed up to speak today. Charmaine, are you present here in the room?

Not seeing her. Doug Woodby is here in the room. Mr. Woodby, welcome. As is our usual Our time limit is 2 minutes. I'll have you introduce yourself for the record, identifying any affiliations you might have, and give us your testimony.

Welcome. Thank you, Chairwoman.

Good evening, Commissioners and committee members. My name is Doug Woodby. I represent 350 Juno and I live here in Juno. Thank you for the opportunity to comment. How did we get to where we are now in this process?

In April of 2024, AGDC was on the ropes, vowing to shut itself down if it couldn't, quote, secure funding for the entire project or for the initial phase of the project, end quote, by the close of 2024. But then they joined up with Glenfarn, a minor company that had no track record of successfully building a gas pipeline, let alone what is now billed as the world's largest project. Despite that, AGDC gave Glenfarm 75% ownership of the project in what is still a secret deal. Before last year, the project was not markedly different from the dozen or so prior efforts for a gas pipeline and was like them in being of questionable economic viability. But then there was a bolt of lightning from on high.

On day one of President Trump's second term, he jump-started the project when he announced his backing for it. Unlike the president's first term, he is surrounded by loyalists who will say yes to his every whim, and it is unlikely that any economic due diligence was done prior to the president's wholehearted support. So members of this committee have taken on the responsibility of due diligence to protect Alaskans without the benefit of actual cost estimates. Yet promoters of this project are looking to blame you if this project does not go forward. The weeks of hearings and analysis have shown that the project is marginal and possibly a loser if it is much more expensive than proponents will admit.

Please do not set up Alaskans to subsidize this megaproject with rushed legislation and minimal transparency. Thank you. Thank you very much for your testimony, Mr. Woodby.

Thank you. Thank you. All right. Someone has just signed up. Siobhan Cutright.

Is that individual in the room? Please come forward. I would like to concede my seat to Mayor— former Mayor Bronson, if that's appropriate. Well, it's— it's not typically done.

Fine. I appreciate the opportunity, so I will take the opportunity to speak. All right, um, you heard the guidelines, 2 minutes, and introduce yourself for the record and any affiliations. Welcome. Thank you to the Chair Giesel and the members for the opportunity to speak.

I am the 2026 President of the Valley Board of Realtors. And, uh, that also makes me a member of the board of the Alaska Association of Realtors. We are 1,700 members strong, and I am here personally as a citizen to express my support of the Alaska LNG project and asking you to provide the policy that is certain to move it forward. I understand in sitting here today, because I'm a novice to this process, that there are some concerns on both sides. However, for Alaska, this is, as I understand it, beyond the conception phase.

So it outlines a lot of meaningful benefits to Alaskans. So the question that we have before you is whether we will capture this opportunity in order to be able to bring revenue to the state that for most of us, we see the decline coming. And the decline for our Cook Inlet gas shortage is not only going to affect Anchorage, it's going to ripple throughout. So without any new supply, it's difficult to understand how we're going to sustain sustain the rising cost and the instability that it'll bring. It provides a long-term, reliable, in-state solution.

I'm a transplant plant from Louisiana. I've been in Alaska for 25 years. I understand the rumblings of everything that was brought forth in Louisiana. They have benefits beyond what Alaska is projecting in this moment. So it will behoove you to do your due diligence and research it.

The second point that I'd like to bring up is that—. Ms. Cutright, I apologize, your 2 minutes is up. The bells that are ringing are calling us to the Senate floor. Yes, ma'am. So if you would conclude, please.

Yes, ma'am. In conclusion, I'd really appreciate it if if we adopt a philosophy that a lot of the younger constituents are looking at. Keep talking about it, but we need to stop talking about it and be about it. Come up with a solution that everybody is agreeable to, but don't miss the opportunity to bring this to Alaska to sustain us. Thank you so much.

Thank you for your testimony. It will be recorded in the record. If you'd like to submit it in writing, you may do that. The secretary is right there. Thank you so much.

At this time, that concludes our agenda for today. Our next meeting will be this afternoon at 3:30. It will be the 29th hearing of SB 28. At this time, we will stand adjourned. Let the record reflect the time is 10:29 AM.