Alaska Legislature: Joint Conference on HB381, 6/27/26, 10am

I call this meeting of the Conference Committee for House Bill 381 to order. The time is 10:05 a.m. on Saturday, June 27, 2026. Present today we have Senators— excuse me, Chair Hoffman, Senator Steadman, and Senator Cronk. In the House, Representative Edgman, Representative Ruffridge, and myself, Chair Sharagi. Today, this morning, we'll begin where we left off yesterday by hearing a presentation by the Department of Revenue starting at the appendix on page 47.

Dan Stickel, Chief Economist for DOR, if you could please come up, put yourself on the record, and begin with your presentation when you're ready. Good morning.

Good morning. All right, good morning. Dan Stickel, Chief Economist with Department of Revenue. And as you mentioned, Mr. Chair, we were about to jump into the appendix from the presentation from yesterday.

This appendix goes through the calculation of the alternative volumetric tax rates that was in the House bill, is passed through the House, and then explains how those were kind of incorporated into the version that passed out of the Senate. So what slide 48 shows is a— it's a slide that I presented in the Senate Finance Committee, and this shows the alternative volumetric tax calculation for House Bill 381 as passed the House. And so under the House version of the bill, the alternative volumetric tax was calculated and levied on a per-component basis as a— using a weighted average of capital expenditures. And so once the full project was complete, we would look at the, the total capital expenditures that were spent on each component of the project, being the treatment plant, the pipeline, and the LNG export facility. And we would look at what share of the total capital expenditures for the entire project that represented to come up with a component weight.

And then there was a different tax rate that was applied to each of those components, a 13 cents per MCF tax rate for the treatment plant and LNG export plant, and then a 6 cents per MCF tax rate for the pipeline. And those were not the, the final tax rates that necessarily applied to each of the components, but rather a a headline tax rate that was then adjusted by the component weight to come up with an effective tax rate for each component, which we show here was 3.1 cents for the treatment plant, 2 cents for the pipeline, and 5.5 cents for the LNG export plant. Added those all together, and once the full project was online, there was a modeled-out effective tax rate of about 10.6 cents per 1,000 cubic feet. And then that revenue number that we show at the bottom here, that's not at full production, that's in the first year of production. So that's just an example.

But the key, the key piece of information from this slide is for a pipeline-only portion of the project, you'd have a 6-cent per MCF tax rate, and then once the full project was in operations, we would estimate that the tax rate on a weighted average basis would be about 10.6 cents per 1,000 cubic feet.

And slide 49 shows what was, what was done in the Senate Finance Committee substitute. So they moved away from this weighted average approach and instead just put in the flat rates for each component of the project. So they took that about 6 cents per MCF rate on the pipeline component and made that a 6.2 cents per 1,000 cubic feet tax rate for phase 1 of the project. And then they took that 10.6 cents per thousand cubic feet weighted average with the capital expenditures weighting and just made that the tax rate once LNG exports began. And so those— the 6.2 and then the 10.6— both of those are roughly taken from the House version of the bill, but made— took out some of the complexity in the calculations.

Worth mentioning is too, once we get to the next slide and talk about the municipal allocations, so the capital expenditure weighting and the project component weighting, that applied both for calculating the initial tax rates, but then also applied for calculating the sharing out to municipalities. And that sharing out to municipalities has also been fixed in statute. In the Senate version of the bill. So removing some of that complexity. The other addition that the Senate made is the two step-ups.

So under the House bill, there was the 10.6 cents per thousand cubic feet. The Senate version added the two step-ups. The first effective 10 years, after 10 years of LNG export operations, where the tax rate doubles. And then the second effective in 2060, where the tax rate doubles. Again.

And to mention, all of these tax rates are before applying the inflation adjustments that are in the bill.

Please continue. So slide 50 looks at the state and municipal allocation of the alternative volumetric tax under Senate versions of, of the bill. And so the state share varies. We have 4 columns here in the chart. We have a cumulative revenue to each of the municipalities and the state, and then we have 3 columns for showing individual years.

So the FY 34, we show what the allocation to different municipalities would be after— that's the first full year of full operations. And so we have in those early years, the vast majority of the revenue is allocated to the communities that the project is directly in. So $109 million of the AVT in 2034 would go to those 5 municipalities, with an additional $13 million spread statewide to community revenue sharing and $12 million to the state. And then the second column shows after the first step up in the alternative volumetric tax, and that additional step up goes entirely to community revenue sharing. And so come 2042, in our baseline modeling, we'd be looking at $132 million directly to the impact— the communities that the project is in, an additional $178 million to community revenue sharing, Now, those communities that the project is in, they do get a share of that community revenue sharing as well.

So their total share, for instance, for the North Slope Borough, they would get $48 million for the allocation of the AVT for the portion of the project within their direct jurisdiction. And then they would get an additional $3 million through the community assistance allocation for a total of $51 million.. But in that 2042 example, community revenue sharing, which gets the entirety of that first step up in the ABT, that would come out to $178 million, which would be per year, which would be shared statewide based on population, with the state receiving the remaining $15 million. And then we show in fiscal year 2061, which would be the first full fiscal year after the the second step up of the alternative volumetric tax. At that point in time, after adjusting for the inflation, there would be $212 million shared directly with the communities that the project resides in, an additional $285 million shared across the state based on population for community revenue sharing, and then the state at that point in time would get a little over $500 million.

$100 Million per year from the alternative volumetric tax since that second step-up goes entirely to the state. And so the— I guess a key point here with the different changes in how the AVT is shared over time is the portion of the revenue that goes to each municipality changes over time with the various step-ups. Then also for the state. So the state starts out receiving about 9% of the AVT revenue. That will drop to 5% with the first doubling of the tax rate.

But then increase to 52% of the total AVT with the second doubling of the tax rate.

Questions from committee members? Representative Ruffridge. Thank you, Chair Schroegge. I assume when we were talking yesterday, you were taking into account some of the inflationary factors that are built into the bill. Is that included in this cumulative through 2062 line?

Representative Rutherford, through the Chair, yes. So the cumulative through 2062 is in nominal terms and includes— all of these numbers are in nominal terms and includes an assumption of 2.5% inflation, which is our official inflation assumption. So we assume that inflation would be within that 1% and 3% bound over the life of the project. And a follow-up, Mr. Chair?

Just a follow-up. Thank you. What assumptions did you use for population?

Just what the current population percentages are now, or any sort of idea on growth or shift in population? Representative Ruffridge to the Chair, so we used the most recent population population information from Department of Labor.

We didn't attempt to predict out how the populations will change, and importantly, with a project of this magnitude, that would likely impact population in certain regions of the state, including the region that you represent. Yes, thank you. One final follow-up, Mr. Chair. Final follow-up.

Inside the bill, seemed like there was not a clear guideline for how often those population numbers would be, I guess, measured. Do you have a way of determining it? Would that be a yearly— I guess, a guess— would it be based off of a census every 10 years? How would we go about allocating that should this bill go forward. Sure.

Representative Ruffridge, to the Chair. So the community revenue sharing, that would go through Department of Commerce, Community and Economic Development. So I would defer to them on the details of how they do that. I know they have some revenue sharing that's done presently. If there was a Department of Revenue component to that, we would establish regulations, and I think we would look at, you know, we would look at things like past community revenue sharing and Department of Labor information as a basis for that.

Okay. Thank you. Thank you. Mr. Stickle, please continue.

All right. Moving on to Slide 51. So we have been asked by numerous folks to do some detailed analysis of this community revenue sharing. And so what this slide does is it simply breaks out those community revenue sharing numbers from the previous slide into more detail based on the different, the different communities. And so, for instance, over life of project, we can see that a little over $2 million or $2 billion would be expected to be available for the municipality of of Anchorage, um, and you can see the, the numbers for all the other communities there.

And every community in the state would benefit through that community revenue sharing allocation, and in particular benefit through that doubling of the tax rate after 10 years of LNG export operations.

Please continue.

So slide 52. This shows the total percent of the alternative volumetric tax that— from the various step-ups of the tax rate that applies to different municipalities and the state. And so we can see that Initially, in the first column here, when there's Phase 1 only, the North Slope Borough receives— would receive 6% of the alternative volumetric tax. 47% Would be shared between municipalities in the state based on where the pipeline itself goes. And so the state would retain the portion of that mileage-based allocation for the portion of the pipeline in the unorganized borough, and then 47% of the alternative volumetric tax would go to community assistance per capita distribution.

So, so 6%, 6% to the North Slope borough, and then the remainder of that tax is split 50/50 between the mileage distribution and the community assistance distribution. Once LNG operations begin and we have the 10.7 6 per thousand cubic feet alternative tax rate. There would be fixed allocations to the municipalities. Again, this was based on the estimated portion that would go to each of the municipalities under the, the House version of the bill, and basically those allocations were fixed in the Senate version of the bill. So once LNG export operations begin, 27% of the AVT would go to the North Slope Borough, 48.4% to the Kenai Peninsula Borough, uh, 9.5% each to the, uh, mileage-based pipeline allocation and the community assistance program, and then an additional 5.6% to the state.

And for the first doubling of the tax rate, 100% of that doubling would go to community assistance, and then for the second doubling of the tax rate, 100% of that that next doubling would go to the state unrestricted general fund.

Okay, please continue. So moving on to slide 53. So what this shows is a simplified illustration of the alternative volumetric tax and a comparison to the mill rate. And wanted to point out these numbers did not include the inflation-adjusted— the inflation adjustments, so they are not necessarily tying out to any specific year, but rather showing kind of an illustration of how the tax calculation works. But I do have some inflation-adjusted numbers that I will read off for some additional context.

So for Phase 1, if you— Assuming a $16.9 billion pipeline cost, these were some updated capital expenditure scenarios that were requested by the Senate Finance Committee when we were presenting to them, so don't necessarily tie out exactly to the baseline assumptions that we presented earlier in the presentation.

But using— and those updated assumptions correspond to a $54.5 billion real capital cost as opposed to the $46.2 that was in our baseline modeling. But under those assumptions, the, the 6 cents per 1,000 cubic feet for Phase 1 would equivalent— would be the equivalent of about a 0.67 mils tax rate.

So still a fairly low tax rate compared to property tax. Under Phase 2, when LNG exports begin, that would equate to a 2.13 mills tax rate. With the first doubling of the, of the, um, the AVT, that would be the equivalent of about a 4.26 mills tax rate. And if we adjust that for inflation inflation, that would be more like a 5.4 mils tax rate. With the final doubling of the tax rate in 2060, that would be about a 5— or an 8.52 mils tax rate under this simple adjustment.

When we adjust for inflation, that would be closer to 17.5 mils. And so actually, interestingly, the inflation-adjusted adjustments continue beyond 2060. And so once you get out into the later in the 2060s and beyond, you'll actually have a situation where under this bill, the effective mill rate with the AVT will actually end up higher than the 20 mills property tax would be, looking out many, many years into the future.

Okay, question, uh, Senator Stubman. So with that final comment, I think that this piece of legislation isn't going to be in the Constitution, subject to change from any legislature and/or administration, you know, if they can agree. So worrying here what's going to go on in 2070 or 2010, 2010, 2090. I'll be here. Senator Hoffman will be here, but nobody else will.

It might be a little much for us to be concerned about.

Additional comments from committee members? I'm not seeing any. Please take us to the next slide, the last one here. All right, so slide 54 is takeaways from this this particular set of calculations. So the Senate version of the bill removes some of the complexity in the calculation that was in the prior version of the bill.

It does start with the same effective tax rates as the House version and simply fixes those rates and allocations in, in statute. The Senate version then added in the two doublings of the tax rate that was a major change from the House version.

And then, yeah, again, the initial— just pointing out that change in the allocation to the different municipalities in the state, as I mentioned earlier, with the first step-up allocated statewide by population and the second to the state general fund. And so that concludes the presentation I had on the Appendix here.

Thank you, Mr. Stickell. Senator Cronk. Thank you, thank you, Chair Schroedter. I'm looking at page 50. So I had somebody ask this.

So we just looked at the AVT. What other revenues will be generated to the state besides the AVT? Mr. Stickell. Sure, Senator Cronk, through the chair. So the AVT is just the one, one of the many components of of the project.

So alternative volumetric tax would accrue to the state and the municipalities. State and municipalities would also— well, state and North Slope Borough in particular would receive additional property tax for any additional upstream developments that are outside of this project. So an example would be drilling of additional wells or installation of additional facilities on the slope. There would be corporate income tax to the state from the current producers expanding— our current corporate income taxpayers expanding their operations and hopefully achieving additional profitability through the sale of gas. There would additionally be the additional corporate income tax in the version that passed the Senate floor from expanding that tax to pass-through entities.

The state would receive royalties from gas going into the pipeline and would also potentially receive royalties from incremental oil production that is associated with the project. And then the state would receive oil and gas production tax, which is our severance tax on both the gas end of the pipeline as well as the incremental oil production associated with the project. Follow-up, Senator Cronk? Thank you, Mr. Shih. So, I mean, maybe it's hard to predict, so how many more millions of dollars would that bring the state?

Sure, Senator Cronk, through the chair, and we're happy to provide this table that I'm looking at to the committee as a resource after this, but total state benefits under our baseline model assumptions, which which we talked about yesterday, through 2042 would be $7.5 billion to the state.

Under 2052— excuse me, these are not including the pass-through entity tax. So with the pass-through entity tax included, through 2042, $8.2 billion to the state, through 20— and through 2062, which is the to the extent of our modeling, $32.2 billion to the state. And those are cumulative nominal under our baseline modeling assumptions. Follow-up? Thank you, Mr.

Chair. And so I'm looking at this, I'm looking at the value, uh, this does bring a lot of our communities, especially our organized areas. So I guess when I'm looking at this, if we do nothing, these numbers go away, we have nothing here. There's zero revenue brought to this state. There's zero revenue brought to many communities.

I'm looking through the next 30 years.

I mean, municipality of Anchorage, that's $2 billion. I mean, I think this is— that just highlights the importance of this project. And we know it's a, um, you know, it's a marginal project cost-wise, but the value of this project getting built, um, and the revenue it brings to so many of our communities, and then even the communities that aren't organized. So I just really, I really appreciate the numbers and that shows the impact that this project could have on Alaska. So thank you.

Thank you, Senator Cronk. Senator Hoffman. Thank you, Mr. Chairman. On the first bullet point where the Senate version removes the calculation complexities, does the department have an opinion on that? Especially since it has the same effective rate as the House version simplification, does that reduce the amount of work to the department.

Senator Hoffman, through the chair, so I don't know if we have an official position. It did testify that there— the House version did add some— it would be a complex calculation. It would require some, some regulations and some work on our part and would create some uncertainty. But that is something that we could work through. The, the Senate version of the calculation is certainly easier to implement.

And would create less work for us. And if I might continue, Mr. Chairman. Please. On the second bullet point where the Senate version fixes— has a fixed percentage for the calculation, I think that accomplishes the same. You have— you don't have an opinion on it, but it seems to be more clear to the average person in the state.

Senator Hoffman, through the chair, so it would be simpler to administer. I'm not sure if the department or administration has an official position on that language. And I would also, on the other bullet points, echo the comments that Senator that Mr. Tronk made, where it increases over time, as a key takeaway.

Thank you, Senator Hoffman. Mr. Stickel, you talk about reducing the complexity through the Senate changes. What's the impact on risk of litigation and the abundance of litigation that may or may not occur?

Chair Chiraghi, so I'm not a lawyer. I can't opine on the risk of litigation.

I guess from my perspective, anytime there's uncertainty, that creates a challenge. And so fixing the percentages does increase some of the certainty and makes it easier to calculate and plan. Removes one item of potential contention going forward. Thank you. Senator Cronk.

Thank you, Mr. Chair. One last question. How much revenue would importing gas bring the state and communities? Senator Cronk, through the Chair, so obviously no direct revenue from importing gas.

Pass. Thank you, Mr. Stickle. Speaker Edgeman. Yes, good morning. Thank you, Mr. Chairman.

So if I were to have a conversation with one of my constituents and say that we've got this sort of generational bill in front of us that we hope will jumpstart, kickstart, whatever the term is, this, you know, the next phase in Alaska's energy security— of course, getting a gas get the gas line into place. But I have one constituent who tells me that they want us to do whatever it takes to get the gas line built. And this is pretty close to reality. But I've also got another constituent who says we want to make sure that the state and the communities and those affected are getting their fair share. And we've debated this time immemorial with oil, of course, ups and downs, many regime shifts and changes and what have you.

But how would I tell my constituent who's concerned about the fair share component that we have done everything we can at this point vis-à-vis comparison to the oil industry? You know, and I guess I could sort of layer my own question here and make it even more sort of complicated, but you know, knowing that a gas line project has a lot of upfront expenses that maybe the oil project wouldn't have. But I think there's a lot of people out there wondering that very question about, you know, doing this in a way that gets this project moving, of course, but also, you know, being equitable in terms of Alaskans and future generations. Because not all— we got to be very mindful here. There's a few of us at this table who represent communities that will never get this LNG product directly.

They will never get it. So, you know, that's the responsibility that I bear. One, to get this thing up and going, but number two, to make sure we're doing it in a manner that's, you know, has some semblance to the state being at the table getting its sort of, you know, wonderful term of art, fair share. But how would you characterize it in simple terms to my constituent who says, oh, we kind of know what we're doing with the oil industry, we've got this new project with LNG, we get some of that oil revenue by way of the state treasury, probably a whole lot more than what this bill envisions. But how would you put that in simple terms?

Mr. Stickel? Wow. Well, it's the question that we face. It's not your job to be the principal spokesman for the administration, but I don't see anybody else in the administration helping us have that understanding either. Speaker Edmonds to the Chair.

Challenging question. Obviously, with the extreme time pressures that we're all facing and the lack of detailed information about the project, that's a difficult question to, to answer. You know, I would say, you know, legislature has consultants that can look at what's going on in other jurisdictions, and we can look at the the fact that objectively it's a marginal project, and so the pie in terms of profit from the project is fairly small. But in terms of saying, are we taking the appropriate share— and I understand the desire to set the appropriate tax rate— that's— we don't have all the information to make that decision and cast a judgment on that, unfortunately. Thank you, Mr. Chairman.

Senator Steadman. Thank you, Mr. Chairman. I just, from my own perspective, I take Phase 2 with a grain of salt. They're on what, Level 4 cost estimate, and we're Level 2 with the gas lines. We have a better idea that the gas line is going to be $17-18 billion.

Who knows what Phase 2 is going to be, somewhere around $60, $55-60, or maybe more with cost overrun. Ones. We don't know if the oil industry that owns the gas— well, we own the gas, but they have the leases on the North Slope— if they're going to sell at the point of production, basically the wellhead, or they're going to retain ownership or pick it up later on, take it all the way to Tokyo. So we don't know and will not know on Phase 2 until we get into that discussion when they come in and ask for more concessions. This is not the final concession meeting that I think we're gonna have in the legislature.

So I'd encourage folks to take the whole project with a grain of salt and don't get locked into the dollars yet, 'cause they're too much in flux.

And clearly there's been testimony that the state could possibly have some of its potential positive revenue from this project reduced or eliminated through high prices of oil and loss of oil harvesting in the basin, basically Prudhoe Bay. So we have to work all that out coming in the future. Clearly there's no money to the state per se in the gas line itself, phase one. It's to get the bridge to phase 2 and then to get gas to Fairbanks and gas to Anchorage and gas to the Kenai. And I think we're all, even those of us that are not on that corridor, recognize that the $20 mils is way too high and we need to have an adjustment or nothing happens.

So I just, you know, and if we look at revenue to the state, let's look at, like we do the oil industry, let's look at the gross. And we take it on the way down. Don't get locked into one piece of the pie. You got to look at the whole pie.

And there's going to be significant cash flows if we get through Phase 2 and we get the debt retired on the project. Then it's going to be a cash cow that's going to be unbelievable. But we— some of us frankly won't live long enough. I'll be 100 years old before before that happens.

90 At best, probably 95 or 100. So it's our grandkids that we're actually talking about impacting here in the long run.

Thank you for those comments, Senator Steadman. Representative Ruffridge. Yeah, thank you, Chair Sharkey. I really appreciate Speaker Edgeman in bringing up the fair share dialogue. And I want to ask just a couple questions, I think, Mr. Stickel, that we've kind of touched on already, which is this idea that we have essentially a resource on the North Slope.

I think many have called it stranded.

Is—. I mean, other than a pipeline, is there another way that the Department of Revenue has looked at— we'll call monetizing these other options that we talked about with Senator Cronk, the royalties and production tax. Is there another way to, I guess, receive royalties and production tax for that resource that the Department of Revenue has looked at? Representative Ruffridge, through the Chair, so qualitatively, yes. I don't have a quantitative analysis, but certainly the gas is a resource.

Resource, and there's multiple ways that that resource could be developed. I would defer to the operators for detailed discussion of those options, but presently gas is being reinjected at Prudhoe Bay. That's supporting oil production. So continued reinjection of the gas does— can support oil production. There's also costs to reinjecting that gas.

So the companies are spending a lot of money to handle and reinject to inject that gas. We are seeing some small-scale sales of gas. So the LNG being sold into the Fairbanks market by truck presently. There is a chemical plant that was recently opened on the slope.

And then for larger-scale development, there's talk of— there's been a news release about a potential data center on directly on the north slope that would burn the gas. There's been a— I understand a trial project along those lines. That would be an option. And certainly in terms of exporting gas, there are multiple projects that are exploring exporting directly from the slope, which is what they do over across the Bering Strait in Russia. So there are multiple options for commercializing that gas and receiving benefit from it.

And for all of those options that I just mentioned, those would touch state revenues. So this is— the AK LNG project is one option that is currently at the top of the list in terms of the discussions. Thank you. Mr. Stickle, follow-up, Mr. Chair?

Yes, follow-up. Of those other options that you mentioned, which of those options would be providing this large list of community benefits from the department's perspective? Representative Ruffridge to the chair, so any development of gas would provide essentially a similar subset of revenues. And then it would be, as far as the, some of the community revenue sharing that's been carved out specifically in the AK LNG bill, that would certainly be the prerogative of the legislature if there was an alternative major distribution or major monetization of the gas, if the legislature wanted to appropriate some of that money for community revenue sharing. Understood.

Thank you, Senator Krumm. Um, thank you, Chair Schragg. Um, I guess I'm going to come back to the question where we're trying to compare this project to anywhere else in America. I look at it this way: when people come and talk about, oh, how we spend the highest per capita in Alaska per person, it's like, well, I don't know if anybody's looked at a map, but we probably should be spending the highest per capita because of our state. So how do we actually compare this project to Louisiana.

Like, we're gonna have an 800-mile pipeline in the harshest conditions in the world to run. So how do we—. How is it even comparable? Sure, Senator Cronk, to the chair. So we've seen comparisons from the legislative consultant and AGDC comparing the tax burden.

So that's one way, is how do, how do we tax a project versus how do other jurisdictions tax a project. I think at the end of the day, you can run all the analysis you want, but at the end of the day, it's— does the project compete in the global market? What is the delivered cost of AK LNG? And for a volume of AK LNG flowing into Asia, we compete directly with a project from British Columbia or from the Middle East or from the Gulf Coast.

Follow-up. Thank you, Chair Sharkey. I think I'm just going to— Senator Steadman said this. Realistically, most of us won't be around at the end of this project. And I'm OK with that because I know Representative Puckadeck would always call something like this a legacy project, right?

And so I take that very seriously 'cause there's something that I get to do while I'm sitting in this legislature that I know is gonna benefit my kids, grandkids, our kids, our grandkids. I think it's something we all take really seriously because I think that's the purpose of us being here is to make sure that we're creating a better place for our kids and grandkids. So thank you. Any additional discussion from committee members? Yes, Mr. Chairman.

Speaker Edgeman. Mr. Stickle, you mentioned something about dire pressure on the timeline. What were you meaning by that? Mr. Stickle. Speaker Edgeman to the Chair, I was simply referencing the desire to complete this process soon.

We've been going at this hard since March. You know, understand that there are— there is a potential window of opportunity that's being targeted through the development and decisions that are being made this year. Certainly, as I mentioned yesterday when we were talking about some of the assumptions in the project, if If we had a longer timeframe, we could do more detailed analysis on things like updated modeling assumptions, looking at government take, things like that.

Senator Steadman. Just as a reminder, we've already several years ago removed property tax through through the construction of the project, no matter what the project is. And that was the biggest hurdle, to relieve the A project, whatever it is, of that burden. Now in front of us is after First Gas, and what's in front of us at the table is a 0.67 mil tax rate down from 20.

I guess we could take away the 0.67 and make it zero for added stimulus, and we'll ask that question coming up with Ledge Finance. How much does that move the needle? I don't think it's going to move it much. So there's a limit to what we can do here in the legislature, and we can— with Ledge Finance, we've asked them to do some cash flow analysis to see when we move that millage rate around, what is the rate of return impact? What are we giving up and what are we gaining?

But there's not much difference between 0.67 mils and zero for all practical purposes. Thank you, Senator Steadman. Senator Hoffman. Thank you, Mr. Chairman. I'd like to divert dialogue to the S Corp. We've had presentations on this many times, and one of the problems that many people in the legislature feel is that there is no level playing field.

Although the bill has some graduated implications or implementation, the crux of it, of having Hill Corp tax structure applied to them. There has been considerable analysis on the comparison of those two, and I would say, do you agree with that? There has been considerable analysis on the S corp provisions for Hill Corp. Senator Hoffman, through the Chair, yes, I would agree. We have done— there's been lots of analysis of pass-through entity tax over the years.

And I would completely agree.

If we need to do our fiduciary responsibility I see that as one of the high priorities of what we can get accomplished to follow the state's Constitution to get our maximum benefit from our resources. And that is one of the high priorities that I have. Thank you, Mr. Chairman. Thank you, Senator Hoffman. Any final comments or questions from committee members before we let Mr. Stickle go for the time being?

Okay. Mr. Stickle? Mr. Chair, if I could, I do have 2 quick follow-ups from yesterday that I'd like to put on the record. Yes, please, Mr. Stickle, proceed.

So there were 2 follow-up questions. One was from Representative Ruffridge asking for a comparison of our break-even price from the version that passed the House to the version that passed the Senate. In the version that passed the House, our break-even price was $8.57 under our baseline scenarios for gas delivered into the global market. Under the version that passed the Senate, it was $8.62 per 1,000 cubic feet. So a 5 cents per 1,000 cubic feet increase from the House version to the Senate version.

And then the other follow-up question The other question I had agreed to respond to was on operating costs for the project. So under, and that was a question from Senator Steadman. So under the Phase 1 scenario, our assumption for Phase 1 pipeline operating cost is $44 million per year. That's in real terms. And for Phase 2, upon full operations of the project, We assume $85 million per year in pipeline operating costs, $331 million per year in treatment plant operating costs, and $441 million per year in LNG plant operating costs for a total ongoing operating and maintenance cost of $857 million per year for the full project..

And those numbers that I read off are all in real 2026 dollars terms and do not include fuel gas, which— fuel gas is assumed to account for about 2% of throughput for the pipeline in Phase 1 and about 13% of total throughput for the full project. And if it's helpful to the committee, we'd be happy to provide a formal response letter with that information as well. Thank you, Mr. Stickell. With that, Senator Steadman. Yeah, that would be helpful so we make sure we have the right numerics.

And does that include or exclude the property tax or property tax equivalency on the operating costs? Uh, Senator Steadman, through the chair, so this is excluding the property tax. Okay, so if I could just repeat it real quick, it's $44 million per year for the pipe phase one, correct? $85 Million for the pipe on Phase 2? Correct.

Then $331 for the treatment? Correct. Slope? And then $441— and these are all in millions— for LNG liquefaction on— in the Kenai? Okay.

And those are all in 2026 real dollars. Okay, thank you.

Thank you, Senator Stebbins. Thank you, Mr. Stickel. Any additional questions or comments? Okay. Thank you again, Mr. Stickel, for being with us this morning.

We look forward to seeing you later today. But for now, we are going to move on. Our next presentation will be from the Alaska Gas Line Development Corporation to outline the amendments and changes to HB 381 that occurred on the Senate floor. The presenters for this presentation will be Matt Kissinger, Commercial Director, AGDC President Frank Richards, and Glenfarm President Adam Prestidge. If you gentlemen would like to come up.

I see we do not have Mr. Richards today. That's correct. That's all right. All right. Very good.

When you are ready, put yourselves on the record and begin with your presentation.

And I believe we have two documents. I assume we are starting with the thicker packet. Thank you, Chair Sharkey. This is Adam Prestidge from Glenfarm, Alaska. That's correct.

We've got a presentation that walks through analysis of the Senate finance bill and the Senate floor version as well. Thank you.

This is Matt Kissinger, commercial director for AGDC. Under a consultation contract.

And we will take a very brief at ease while we get the presentation pulled up. We're at ease.

Back on the record at 10:56 AM. Got the presentation pulled up on screen for those that are following on the big screen here. Mr. Prestidge, please proceed when you're ready. Thank you. Adam Prestidge from Glenfarm for the record.

In this presentation, I want to just give a bit of an overview of where we're going here. We'll talk about some of the project perspectives perspectives on the Senate— on the version of the bill that came out of Senate Finance, some project perspectives on the version of the bill that came out of the Senate floor, and a bit of a detailed discussion of one of the amendments in particular related to project labor agreements. So we'll step through each of those.

First, as we get into talking about the versions themselves, want to highlight our appreciation, of course, for the tremendous amount of effort that has gone into this bill, an incredible amount of thought that's gone into it by the multiple committees, Senate Finance Committee in particular, which is the version we're speaking about now, and just recognize how seriously everyone is taking this, and we appreciate that very much. ¡Hola! So, first we will talk through the provisions of the Senate Finance Bill and just give some reactions to it. Matt and I will be kind of trading off the microphone as some of the provisions relate specifically to AGDC and some of them relate more broadly to the project. And so, first will be Matt talking about some of the AGDC provisions.

Questions? All right, this is Matt Kissinger for the record on slide 3. So definitely there is— appears to be an evolution happening with, um, you know, AGDC's powers as we go from the part of the project where we're trying to bring in this developer and then going forward as we, as we work with this developer. And so I think it's logical that some of the powers would change. There's a new requirement that we get— or that we notify legislature of any transfer of ownership or if we're going to dispose of any assets similar to how we did the 8 Star transaction with Glenfarn.

With this law on the book, we would be required to notify legislature and provide 90 days for them to disapprove. Again, we talked about that yesterday a bit, but it's 90 days, not 90 legislative days, and So it does allow us to operate somewhat within the commercial timelines. There's also a new LNG— Alaska LNG Project Bond Fund. It's really as they retire a couple of the funds that we had used previously, this would be a new fund in place for revenues to go into and then directly pay the revenue bondholders. And later when we talk about things that still need to be addressed, we'll talk about the other aspect of that, which is our ability to service those bonds.

This is Adam Prestidge. Note, as you can see on the slide, we consider that this additional provision protects the state's— provides additional protection for the state without really imposing any burden or issue for the project. So that's our positive commentary on that one.

Mr. Chairman, can I skip one? Yes. Speaker Edgeman. Yeah, I had to think about that a little bit because your comment, Mr. Prestidge, was it protects the state. I'm sitting here thinking again as someone who hasn't served on a committee before, AGDC is in a minority ownership position of 8 Star Gold.

I know there's a definitive agreement out there. There's also Alaskan advantage principles that aren't codified in this bill as I understand it. And given the fact that AGDC is the minority voice at the table with 8 Star Gold and we've got these subcompanies, I think that comment about protecting the state's interest deserves at least some amplification, you know, and maybe throughout this conversation as we go forward because that's something that I think is very keen to all of us and probably including yourself as a developer because you want stability and you want certainty throughout the lifecycle of this entire project. So I just put that out there.

Mr. Chairman, maybe now is a little bit early to bring that into full conversation, but I'd like to talk more about it as we go along. Thank you for getting that on the table. Speaker:EDGEMAN] Please continue, or if you would like to respond, by all means. Thank you for highlighting that. We will continue throughout this presentation to identify the provisions that we think add additional protections to the state.

It is very important for us as a developer. We want there to be a feeling of fairness and accommodation and protection for the state risk management for the state. The more that we can build that into the law in a way that also facilitates the project going forward is just honestly good for everyone. So we will continue to highlight that as we go through. Mr. Chairman, I appreciate that comment and I will continue with questions as we go along.

Very good. Please continue, Mr. Prestidge.

This is Matt Kissinger for the record. Another change is the types of subsidiaries that AGDC has, so subsidiaries that we have control of. In the past, we created 8 Star as a subsidiary, it was a project company. Obviously, we divested of a portion of that, 75%, to Glenfarm. Going forward, the likely subsidiaries for AGDC will be more as vehicles for co-investment in the project.

For example, if municipalities or if other state agencies wanted to invest in part of the 5 to 25% option that AGDC has carved out, they would do so through a subsidiary that we create to hold the benefits of that investment in. And so it is more appropriate that there is limitations on what we can do as far as transfers to those subsidiaries. This is all wrapped up in the new language around the Alaska LNG Project Bond Fund, ensuring that we have this fund available to pay bonds. I think we also need an ability to service our co-investors, but this is all in, in, in the state's best interest, so we feel that this provision is great. Senator Hoffman.

Thank you, Mr. Chairman, he mentioned 8 Star Alaska, and in the legislation, for the committee and those watching, you would agree that 8 Star is the primary owner, referred to as a primary owner in the legislation, and the project developer is Glenfarm. Senator Hoffman, through the chair, that's a very good clarification, and that's correct, that 8 Star is the property owner and the project developer is Glenfarn. Adam, if you want to confirm that as well. Senator Hoffman, I agree with that summary. Thank you.

Definition. Thank you, Senator Hoffman. Please continue.

This is Adam Press, again, for the record. As Matt said, We also think that that addition here on the screen is protective of the state's interest. My personal view is that a lot of the legislation that formed AGDC was meant— was really focused on this pre-operational phase. And some of what the committee added was statutes that go more into how is AGDC managed when this project is operating and producing revenues. And this puts guidelines around how those operational revenues will be handled.

This is Matt Kissinger for the record. Going to slide 5. More provisions regarding AGDC with respect to really our assets going forward that protect the state's interest. Again, our assets going forward primarily will be related to the revenues coming back to us as we structure the AGDC to be a true participant in the project and perhaps to even exercise our 5 to 25% option. We create this bond fund.

This requires us, the board of AGDC, to review that bond fund and provide provide the legislature with a complete accounting of the assets of that fund and of the corporation with an eye of ensuring that the fund does not accumulate more revenues and more funding or more funds within that fund than are necessary. Mr. Chairman. Yes, Speaker Edgeman. Will the Department of Revenue be managing that fund? Speaker Edgeman, through the chair, Our existing statutes already allow that the Department of Revenue can provide us with advice on managing that fund.

And so the way the fund mechanically within this legislation, what is really happening is the existing Alaska LNG Fund is being renamed into the bond fund. And so those existing statutes, as I read them, would still be in place. Okay, thank you. Thank you. Please continue.

Matt Kissinger, still for the record. On slide 6, this is just saying that, you know, there is also the statute that creates the fund as I just described it.

Please continue. Slide 7. This is Adam Prestidge. The addition in Senate Finance version The addition of AS3705-615 creates an Alaska Affordable Heating Fuel Fund. This is a new fund in the state treasury that would help Alaskans with the affordability of heating fuel.

From the project perspective, we're very happy to see this added to the legislation.

As we've talked about many times, we are— we want this project to be to the benefit of Alaskans. We're trying to do everything that we can to deliver low-cost, reliable energy to Alaskans. One of the limitations that we have as a project developer is that not all Alaskans have access or are in within range of the gas pipeline itself, and so there's just been a physical limitation on how much this project that can help from an energy affordability, uh, perspective to particularly rural Alaskans. And so this is a very thoughtful addition, uh, to make sure that the benefit of having gas transported on the pipeline isn't limited to only those who are in proximity to the pipeline corridor itself, but to make sure that some of those benefits do go to rural Alaska in particular to make heating fuel more affordable. And so, you know, very good for Alaskans, good for the project, and we're happy to see this in the legislation.

Not seeing any questions, please proceed. Thank you, Chair. Uh, the next slide here again goes to the price cap. Uh, we'll talk a little bit about the, uh, the nuances of how inflation is handled. My sense is that there is general alignment on it, but we just need to get the— quite frankly, kind of all of the pieces to fit together.

So we'll talk about that later in this presentation. Obviously, having a price cap creates certainty for, for Alaskan consumers. Uh, the bill also includes a, a cost overrun prohibition to ensure that utility rate utility payers aren't on the hook to pay the cost of cost overruns.

Please continue.

Next, the Senate Finance Bill maintains an abatement period for a period of 5 years. The sooner of 5 years after commercial commencement of—. Sorry,—. Sorry, commencement of commercial operations of the pipeline or exceeding 500 million cubic feet a day of throughput on the pipeline. Effectively, that is no tax on the— there's no property tax on the pipeline while it is serving only Alaskans.

So that's a benefit to Alaskans in the sense that that cost can't get passed on The abatement period starts after the Revenue Commission determines that the project has qualified and is eligible and has a, as you would, I guess I describe it as an outside date of 5 years to ensure that this abatement doesn't become a permanent abatement of tax if for some reason Phase 2 of the LNG project, the LNG export facility were delayed. Senator Hoffman? Okay, thanks. Okay, thank you. Please continue.

Thank you, Chair.

Section 43.59.030 was discussed in the Department Department of Revenue's discussion of the updated numbers for the alternative volumetric tax. Generally, what's been proposed we think is workable for the project. We note that the change to the alternative volumetric tax does not change the actual allocation to communities.. And in fact, when the, when the AVT increases after year 11 and after 2060, 100% of those increases go to, to the state, but to be used for community assistance. And so again, a thoughtful way to make sure that this project is benefiting communities across the state.

Chairman. Senator Steadman. I think after January 1st, 60, 100% goes to the general fund, not community assistance. Is that right? That's my understanding, Senator Steadman.

I have a small error there. Large error. An error. All right. Very good.

Thank you for noting that for the record, Senator Steadman. With that, please continue. Thank you, Chair.

The addition of some of the definitions in AS 43.59.100 are important because the— ultimately what will happen to this bill is that it will be put in the hands of highly sophisticated investors and lenders who will read it and trying to determine if it is drafted in a way that is clear enough and certain enough to warrant putting billions of dollars of their money to work. It will be read from a risk perspective to say— to understand, is this a reliable piece of legislation? Is our— the lenders and investors, is our money going to be protected or have a reliable return based on the legal framework that we're investing into. And so some of the definitions that the Senate Finance Committee added in are helpful just to provide clarification ultimately that will be to the benefit of the project and make financing more feasible. Thank you.

Please continue. Continue to slide 12.

The Senate Finance version included a slight update to the Municipal Impact Fund. I will talk about that a bit more because I am following the sequential order of the statutes. Again, this is something that has a foundation in our earliest discussions with the mayors of the various boroughs. Obviously, this includes also the Municipality of Anchorage, and so we, as the project developer, have been very supportive of this concept from the beginning, so happy to see it included. Mr. Chairman.

Yes, Speaker Edgeman. So this fund can be capitalized up to $80 million, but this is a one-time capitalization, is that right? Over the— between now and 2062? Representative Benjamin, through the chair, it's a 2-time capitalization. The first time is $40 million at FID of the pipeline, and the second is an additional $40 million at FID of the export facility.

That's got a way of essentially balancing out how the funds will be used. It ensures that a municipal impact fund isn't fully exhausted just by Phase 1 before Phase 2 even comes online, and it basically preserves community impact compensation for Phase 2, which will have the largest impacts in the Kenai Peninsula borough while we're doing a major, major construction project there. And for the record, that was Mr. Prestidge. Follow-up, Speaker Edmonds? Yes, thank you, Mr. Chairman.

So this I'm just trying to mechanically, you know, come to grips with how this works. So on Phase 1 and Phase 2, there will be AVT revenue presumably and hopefully quickly into Phase 2 of the project in order to make all this work, of course. So the affected boroughs will be getting revenue from their AVT component, but this impact The fund will be there for verified actual and reasonably expected costs that are above and beyond what the borough— pick Denali Borough, Fairbanks, North Slope, Kenai, whoever else is impacted, would be impacted. And I'm trying to get to a little bit more how this works, but also I'm going to squeeze in where does Anchorage fit into this picture? Speaker:MR.

BATTLES] Through the Chair, the Municipal Impact Fund is unique because it applies and benefits municipalities sooner than any other benefit would come. And so under AGDC's formation statutes, there is no tax paid and so no tax revenues that come from the project during its construction period. So this takes essentially the very beginning of construction construction of the project FID and makes capital available to municipalities while construction is starting, years before any tax revenue would otherwise be generated through the AVT.

Just one last follow-up, please. Mr. Chairman, so the decision makers of all how all this is executed will be the Department of Commerce and Economic Development? Mr. President. Speaker Edgerton, that's correct. And the legislation now includes that the Department of Commerce, Community and Economic Development will use the funds for verified actual and reasonably expected impacts to ensure that they're used responsibly to offset real impacts on communities resulting from construction.

Okay, thank you. Thank you. Please continue.

This is Matt Kissinger for the record. Just as part of cleanup, it repeals these what would be now outdated, and these funds have no money in them currently. So the In-State Natural Gas Pipeline Fund and the AK LNG Project Fund, which as I said, really morphs into the bond fund.

Okay, I think that takes us to the next section of this presentation. Mr. Prestidge, please continue. Thank you, Chair Schwargy. Adam Prestidge for the record. Next we'll talk about some of the provisions in the Senate Finance Version where we'd suggest some modifications and we'll walk through those and what they are.

The first that I'll go to is AS14.

17.410. This was a change that changed the municipal required local contribution for school funding.

The impact on the project direct economics is nonexistent. However, we do want to go on the record and say that we want to see the municipalities not put in a worse position by any of this legislation. The legislation, again, came from a very collaborative working group with the borough mayors. My understanding is that this provision in particular has a negative impact on one particular municipality, and so we urge that to be considered very carefully. We want to to see municipalities not put in any worse position by the legislation.

Mr. Prestidge, did this change occur in the House and Senate Finance or on the floor? Can you remind me? Chair Schwargenmayer, my understanding is this one occurred in the Senate Finance version. Okay, thank you. Mr. Chairman.

Speaker Edgeman, and then I've got Senator Steadman. So I've read that in order to— during the development stage of something like 12,000 jobs attached to this project. And then ensuing years, it will be 6,000 or so people involved with sort of maintaining, doing additional work throughout the lifecycle of this project. So is that what this fund sort of contemplates? Is the additional pressure that this is going to place on schools, or is this just something that's put into place for other reasons?

Through the chair.

So just to clarify, when we talk about jobs created, it's approximately 7,000 for the construction of the pipeline and an additional 5,000 for the construction of the LNG facility. When it goes into full operations, you're looking at a much lower number, around 1,000 permanent— 1,000, 1,500 permanent operational jobs. To my knowledge, the labor headcount is not directly tied to this provision.

That's my understanding.

Okay, Senator Steadman. Could I have you explain this a little more? It was too high a level. Could you get down into more detail of what you're talking about on this? Mr. Prestidge or Mr. Kissinger?

This is Matt Kissinger for the record. Senator Steadman, through the chair, my understanding is as this bill came out of the House, and this doesn't have a direct impact on the project, I would say. This is more about how the state allocates the funds. But again, we don't want to see that— the communities we're operating in be negatively impacted. But the way I understand it is you have a local contribution that you're required to make, and that is based on the amount of property tax that you're bringing in.

And in the House bill, it removed this property from that calculation. And please, someone correct me if I'm wrong on this. And then as it went through the Senate, that was changed so that this would still be accounted for. I think there's a limitation on how much it gets accounted for. But that's my understanding of it.

And so it has the impact of, as the bill came through the House, or through the Senate, it increased the amount of local contribution that, for example, Kenai would have— would be required to make. Okay. And I think, Mr. Chairman, we have a more detailed presentation coming up. Yes, we do, Senator Stebbins.

Okay. Very good. Does that satisfy you for the moment? Okay, very good. Please continue.

Thank you, Chair Sharkey. The next couple points, Matt will speak to.

With respect to the AGDC confidentiality agreement language, I think what it's really gotten to is a point where all parties need to agree to waive the confidentiality. It doesn't have a huge, a lot of impact. We are trying to reach, we're trying to reach a situation where we're still able to negotiate everything in confidence, and that's really required. And then once there is an opportunity available to the state investment option, then that information needs to be supplied to the state. And so we didn't feel that the way the confidentiality agreement language is framed, that it truly accomplishes that.

And this is Adam Prestidge. What I'll add is I expect this was unintentional, but the way that this provision, 31.25.90, 6 was drafted would have the impact of making it impossible for the project to share information confidentially with investors. I can't imagine that was intentional because it would really make communication, business communication, impossible and so not feasible for the project.

Senator Hoffman. Thank you, Mr. Chairman. Understanding your position, instead of suggesting deletion, is there any suggested language change that could come forward? Thank you, Mr. Chairman. Senator Hoffman, I believe that the answer is yes, and we'd be happy to propose that over— in a very, very short period of time.

For the record, that was Mr. Prestidge. Thank you. Representative Ruffridge. Thank you, Chair Sharagi. I just wanted to clarify that currently in the bill, Section 12 is adding a whole number of subsections.

The only potential problematic area is just number 6. The rest of that section there was not proposed changes from AGDC? Representative Ruffridge, through the chair, that's correct. Later we'll talk about AS3125270, which is the AGDC reporting and public dashboard, and these two are very closely related, and so there's some other issues that raise their head there. Thank you.

That was Mr. Kissinger for the record. Senator Steadman. I think it might be helpful if they happen to know the— you know, we're going through this, and if they happen to know the amendment number, please, then it would be helpful. Senator Steadman, through the chair. So right now we are not going through the floor amendments.

This instead is going through the language as it came out of the Senate Finance Committee.

And again, that was Mr. Kissinger. Just again, with two gentlemen presenting, if you can, when you start talking, reintroduce yourself. It's helpful for the clerks taking record. All right. I believe that takes us to the second bullet here on this slide.

Or have we covered that already? We've covered it. Thank you. Please proceed. This is Matt Kissinger for the record.

With respect to AGDC accounting, this is— this is what I've discussed a few times is Right now, it directs AGDC to deposit money generated by the subsidiary into different accounts in the general fund, and then it allows legislative approval or legislative appropriation back into, for example, the bond fund. What we're trying to achieve is the ability to issue revenue bonds. Of course, there's the notification, and so the legislature would be involved. Involved in any of the revenue bonds that we issued. But we'd like to be able to service those bonds in the future, or we'd like to be able to guarantee to the bondholders, the buyers of those bonds, that they will be serviced without that servicing needing to go through appropriation year after year.

And the same goes through for co-investors. For example, if a municipality or a sister agency co-invested through one of these vehicles that we've discussed, we would want to to be able to put the revenues to service their investment into that vehicle without appropriation. There are two models that I think have been looked at, and I don't think anyone has ever disagreed on what we're trying to achieve here. I just don't think that we've struck it correctly yet.

ADA is, is one example. I think it's ADA under AS4488060. ADA has their revolving fund, and so ADA are able to just bring in their revenues They're able to use those revenues to service their bonds, and then the remaining portion after servicing bonds or co-investors, etc., then has to be remitted to the general fund. Another example is the Alaska International Airport System, and I think they tried to model this after that one, but what they— I think they may have missed a key element of that one, which is when it was enacted, legislature enacted a continuing appropriation. So there wouldn't need to be future appropriations for the funds to service the bonds.

So I think we need to pick one of these two models. I think our preference is the ADA model. But certainly we need to be able— we need to be able to provide certainty to co-investors or purchasers of bonds that those payments will not be obstructed by future appropriations.

Okay, please continue.

This is out of Prestige. One of the additions from the Senate Finance Committee is the publication of a project dashboard that will provide public updates about elements of the project. We are generally supportive of that concept. And just have— I call them some minor suggested modifications to some of the information that would be very commercially sensitive. One is we'd suggest deleting the requirement to publish payroll updates.

It just gets into, like I said, commercial sensitivities. The—. We'd suggest leading the regular updates on capital expenditures. Again, that gets very detailed into kind of the project development status and how capital is being deployed and when. And then there is a long list of all the different components that would require status updates.

We'd suggest something a little bit more high level. For public consumption on a public dashboard. On a similar perspective, there is a proposal in the dashboard to give an update on each offtake contract. Again, that gets into kind of sensitive commercial negotiations, and we'd suggest that that is an update on aggregate offtake marketing on kind of a product a project-wide basis rather than a customer— a per-customer basis.

We suggest, like, the following two points are reducing some of the details required in point E1 and E10. And then lastly, that point F at the end there, that language says that we can redact information from the dashboard if it's deemed too commercially sensitive, but that redaction ability is only limited to the dashboard. We'd like to see that redaction ability also apply to AGDC's semiannual report. And so, just in summary of this slide, we're supportive of the dashboard concept. We think it provides, on a monthly basis, information for the public.

We just want to be thoughtful about not requiring the project to disclose commercial— too much commercially sensitive information.

I'm not seeing any questions. Please continue.

I'll speak to this one as well. This is Adam Prestidge. There are a few different places where The legislation requires AGDC to provide notices to the legislature about— regarded to changes of ownership.

One of the concerns there is it does provide or it does require— it requires AGDC to make notifications of information that might be confidential. The language requires actually that AGDC has to notify the legislature if there is even a planned or contemplated change of ownership. If there were a contemplated change of ownership, that would almost certainly be highly confidential and definitely not public in any way. And so we would suggest deleting that in order to provide some, some certainty to investors and financiers that their ownership won't be required to be made public. As an alternative to deleting this provision, one thing that we could rely upon is the requirements that the project has to make federal disclosures regarding ownership.

There is no doubt Make no mistake about it, this project has tremendous federal regulatory oversight. There are numerous federal permits. Each of them has a whole regime of reporting requirements and obligations and regulations. This project is heavily regulated by the federal government in addition to state regulations. Regardless of whether the project takes federal funding or not, those— that federal oversight stays in place.

Some of that federal oversight does require the project to disclose, for example, to the Department of Energy, changes in ownership. And so one alternative here would be for the legislature— legislation to require that if the project makes ownership-related disclosure filings with federal agencies, that those disclosures, filings, are also provided to the state. Senator Stubman. So if I'm understanding correctly, if you have— I think the ownership may be 10% or something, 10% change or whatever it is at the federal level, and you can help me with that. And then, so then less than whatever the federal guidance number is, just hypothetically say it's 10%, then your position is we shouldn't concern ourselves with that?

And why wouldn't we want to know who is all the equity investors, who owns and what share of the liquefaction plant, the conditioning plant, and the pipe? Why wouldn't we want to know that? Mr. Prestidge. Senator Sedman, through the chair, it's a good question. Yes, the answer is 10%, the 10% ownership change.

Again, there is part of this that is just creating some operational efficiencies for the project to not have, you know, multiple layers of different reporting requirements. And our position would be that, you know, if the federal government has set a standard for reporting ownership, it is— it's a clean solution to duplicate that for the state. If the state were an equity investor, I think there would be additional rights to understanding the equity makeup of the project. So that's something that would be discussed in that subsequent investment conversation.

Senator Steppen. I have to think about this a little bit.

There's— I don't think we have a lot of ownership in our oil basin that's non-disclosed.

So I don't— I'll have to, I guess, ask Revenue that question when we have the opportunity.

Yeah, I just kind of lean more to full disclosure than less disclosure.

Within reason.

Senator Steadman, through the chair, fully take your point, and I think we would— we'd be very willing to work with the committee to help identify what would be the right disclosure requirement within reason, as you say. If I may, Matt Kissinger for the record. Senator Steadman, through the chair, With respect to the upstream, I think there actually are instances where, with respect to new exploration leases, the lessee will be a vehicle that in a sense hides the true ownership behind those leases. So I do think there is precedent for that in the upstream, to be honest.

But it sounds like we know the front company anyway.

Correct, which would be similar to 8-star in this case.

Likely a topic for further conversation. Please continue. Thank you, Chair Sharkey. This is Adam Prestidge. Next, on the inflation adjustment, the price cap, my general view is that between all the different committees and versions and amendments, I think there's a general concept of what works, but I'm not sure that there is any specific— any of the different versions have it fully comprehensively.

And so I'm just going to describe my personal understanding of what I think everyone has agreed to, and by that I mean the different committees and the different floor votes. With one small modification. And so this is a summary of my personal understanding. So we've agreed that the project would have a $16 cap, price cap on the cost of the price of gas. That $16 is subject to inflation.

The inflation for the project formula would be the formula set out in the contract between the project and the buyer that has been approved by the RCA, subject to a limit of 3% of escalation. And then the only distinction I have is that we think it would be more stable and reliable for investors if that were a 3% US CPI limit rather than— sorry, a US CPI adjustment rather than an Alaska CPI adjustment.

Not seeing any questions. Please—. Oh, Senator Coleman.

We have generally published inflation numbers coming out of Anchorage, right, the state. Can you give a little more detail why you want the national inflation rate that's published in the Wall Street Journal, or what are you asking us to do? Senator Sullivan, truthfully, it comes down to a bit more familiarity for global financing markets who are more familiar with U.S. inflation, operating under U.S. inflation, than Alaskan inflation. So that's Senator Stebbins. That would be the Department of Labor publications, Federal Department of Labor.

Yes, Senator Stebbins. Okay, thank you, Mr. Prestidge. Additional questions on this slide? Not seeing any, please continue. Thank you, Chair Sharkey.

This next slide— this is Adam Prestidge— goes to the definition of taxable property and what I would call this is a very important technical cleanup. There was a definition in the House bill of technical— sorry, excuse me— taxable property that made it very clear that exempt property is subject to the alternative volumetric tax, and it is very clear that it can't be subject to additional property tax. I believe that is absolutely the intent of everyone involved. We just think the language could be a little bit more clear, and this is a core issue, which is why we are highlighting it here.

And we can— we will follow up with the committee to provide specific suggested language on that clarification. Thank you, Mr. Press. Costage? And just because you mentioned it, timing or expectation on when we would receive that? We've got a team working around the clock to provide that, Representative Sharkey.

So I'd say the next day or so. Okay, thank you. Senator Steppen. Just need a little clarification. So we got a 3% inflation cap suggestion.

Inflation, say, 5% and then drops back down below that 3%, can you pick up that extra 2% you left on the table when inflation drops down, or do you lose it? Mr. Prestidge. Senator Steadman, through the Chair, obviously there's different ways you could do that under contract. In this specific instance, I haven't considered that.

It would come down to what was agreed between the customer and the project.

So I don't have an answer to that, Senator Stabenow. Okay.

Mr. Prestidge, do you recall, is there an averaging mechanism in there for CPI?

Chair Sharkey, yes, there is a 5-year average look back. Thank you. Additional questions? Senator Sebelius. Just to that point, we faced that with other legislation.

If that 5-year average is say 5% and the cap is at 3%, is that 2% lost forever? You take a real reduction reduction or can you pick it up as the economic swing in the opposite direction? It's just something that we need to clarify. And Senator Steadman, at least for the state side of the revenue, he's on his own, his own haggling with his own contracts. But for us, we don't want to lose it, right?

Senator Steadman, Mr. Prestidge, did you have additional comments? I would say, Senator Steadman, just the kind of commercial default would be that unless you had provisions saying that you could make that up later, it would be lost. And so if it were negotiating with a customer contract subject to inflation that had a cap, unless it were agreed separately between the customer and the project, if you went above that cap, it would be disregarded forever unless you had agreed to bank it for the future. Okay. Thank you.

Mr. Chair, I've got Representative Ruffridge. Thank you, Mr. Chair. I guess I'm confused now by this conversation because I assume with a 5-year look back you would essentially be able to level out the peaks and the troughs.

So to answer Senator Steadman's question, the answer is yes, you would potentially pick it up unless you were under that under the number for 5 years straight or over the number for 5 years straight. Is that a correct assessment? Representative Rafferty, through the Chair, I agree with that. The 5-year lookback definitely blends, creates a blending that makes this scenario less likely to occur. Thank you.

Thank you, Mr. Prestidge. I'm going to go back to Senator Steadman. I don't agree with that at all. You run an inflation cycle, say the inflation cycle is running between 4% and 6% for a decade and you're capped at 3%.

You can lose your shorts. So if it's just something that affects the state, we need to make sure we can pick that back up on our revenue side. It's, you know, they don't want to run inflation cycles. They want to control them, but inflation does get out of hand and in the event the governor or the government ever wanted to run a long, longer-run inflation cycle to dilute the value of our debt, which is significant federally, I think we need to ensure that we are protected on that. Thank you, Senator Steadman.

Senator Hoffman. We have a brief at ease, Mr. Chairman. Brief at ease.

Back on the record at 11:46 AM. Senator Steadman. Thank you, Mr. Chairman. Yeah, I had my wires crossed a little bit. We need an electrician at the table so I don't get short-circuited.

But I think I was concerned about revenue impacts to the state, and I think we're dealing with a different cap. So anything that affects the dollars coming into the state, I want to make sure we don't leave anything on the table with some kind of an inflation spike. So disregard those last comments on your slide. I was looking actually ahead of you on a different slide, but that's okay. To further clarify, if I may, Senator Steadman, the prior discussion has actually been on the cap on the gas sales to consumers in Alaska of $16 and the inflation adjustment on that.

And Senator Steadman, your concern is on the revenue side, the revenue to the state. Okay, thank you. All right, additional discussion on slide 21?

Not seeing any, please continue.

Thank you, Chair Trauger. So we immediately go to the inflation on the AVT, which is what Senator Steadman was asking about before. What is, what is in the bill is that the AVT inflates, adjusts on an annual basis with inflation between 1 to 3%. Again, we'd suggest that being Alaska CPI, not U.S. CPI. Either way, it would be floating within a band of 1 to 3%, and Senator Sedman's questions about how that would be banked above 3% would apply— that discussion would apply to this slide.

Mr. Prestidge, I'm not sure if I misheard you or if you misspoke, but you would You prefer U.S. CPI, not Alaska CPI, is that correct? That's correct. Okay, thank you.

Any additional discussion on slide 22? I'm not seeing any. Please continue.

Thank you, Chair Schwargen. This is a bit of a recap slide. Again, just for the formality of going through each of the provisions, the AVT proposed by the Senate Finance Committee allocates across the different municipalities in a way that does not have a direct impact on the project, but we view it as generally positive.

Thank you. Please continue.

Thank you, Chair Sharkey. The Senate Finance version set out a couple of new dates. One is a requirement that in order to be eligible for— sorry, that automatically terminates the tax arrangement if FID has not occurred by January 1st, 2028, or if the completion of construction has not occurred by December 31st, 2032. That is in addition to what was existing in the bill, the House version that required that the commencement of operations needs to occur by January 1, 2037. I think it was flagged in committee discussion that there is not much of a distinction between the completion of construction and the commencement of commercial operations.

Those are Essentially nearly the same event. And so you have a bit of duplication between the 2032 deadline and the 2037 deadline. I think folks appreciate that. What I will say from the project perspective is that the 2032 deadline creates a risk on the financing. Certainly 2028 deadline has the impact of pushing the project to go, to go as fast as possible delivering gas.

There's a— it creates an added incentive to speeding up the project. However, having a construction deadline of 2032 doesn't create any additional incentive that isn't already in place to complete the project as fast as possible. What I mean by that is that But when we— once we've achieved FID, lenders and investors will have put billions of dollars into work, will spend billions of dollars that will go to construction, that will be accruing interest until the project commences operations and starts generating revenue. And so billions of dollars will be just becoming more expensive and generating revenue, and everyone involved in the project will have every incentive to complete construction as quickly as possible. And so essentially, this 2032 deadline doesn't create any additional incentive.

It just creates a penalty. That penalty is— would be losing the tax— the tax treatment of the project. The result of that would be at the front end, investors would look at this as additional risk, And they would have to price in that risk into how they invest in the project. And so the ultimate outcome of this would be making the project more expensive and require more investment capital.

The deadline of 2037 is well within— well beyond the project completion deadline, even if we put a couple years of contingency on that. And so a 2037 deadline doesn't have that same risk profile to the FID investors. And so for that reason, we suggest deleting the 2032 deadline. Speaker Edgeman.

Yes, I'm just trying to understand sort of contextually here. We had a representative from the Department of Revenue before the table saying there was extreme pressure on a timeline. To get this through. And if that's the case, and I'm being told at every turn, and you know, appropriately so, I believe that there's a window of time here that's in front of the developer, in front of the state, in front of the legislature, and to put these milestones in place, you know, perhaps like as you described, is prescriptive. But really, if this moment in time sort of exists, are these these timelines sort of inconsequential, or is your comment to the conference committee, you get to FID, but you may not get to construction of the gas pipeline 4 years later, I'm just trying to reconcile all this.

Sure. Speaker Edmond, through the chair, that's a very good point, and I think that point is especially applicable on the 2028 deadline. There is a moment, there is a window of opportunity we are trying to achieve on this project. And it is before 2028. And if you will recall, the version that came out of the House had an FID deadline of 2032.

And the Senate Finance version changed that 2032 FID deadline to 2028, in part based on I think the argument that you are making right now, and we, the developer, haven't objected to it because we agree with that principle that there is an opportunity to do this right now that is timing-based. The 2032 completion of construction is more about managing theoretical risk that lenders and investors will look at when they make an investment decision on the project. And so regardless of how we all want to move fast, Regardless of the timing around the energy availability out of the Cook Inlet, lenders and investors will just see this numerically and assign it a hypothetical risk that will make the project more expensive. And so we don't see it adding any additional incentive that isn't there already. It just adds risk to the project that will be priced into the financing.

Mr. Speaker. Yeah, so again, I'm thinking— out loud here. Gas certainty for Cook Inlet, which Glen Farn underscores at every opportunity, and that's very much appreciated, but that certainty, that period of gas deliveries, that window is 2033, right? And so in theory, back to that term, construction of the gas pipeline by 2032 would align with this window of time for Cook Inlet consumers of 2033, but you're telling us that the 2028 deadline of FID basically sort of has the same impact of 2032, but because of the certainty element with investors, the 2032 timeline is probably overly prescriptive? Speaker:KARUBAS] Speaker Esmond, I think that is a good way to look at it.

So I agree with that. What I will say is to add on to that is the 2028 deadline, it puts a bit of a risk on the developer and it puts an incentive on the developer, but it does that at a time before billions of construction dollars have been put at risk on the project. And so essentially putting that 2032 deadline puts additional risk on all the investment dollars that doesn't serve the benefit of actually accelerating anything. And the issue that then comes up is if there were a delay in construction, if there were litigation, if there was COVID, you know, an epidemic, that's just, those are all hypothetical risks that could occur, that have occurred on other projects, that lenders and investors are going to be nervous about. Speaker Edmond.

Well, it just causes me a little bit of pause here because, you know, FID has been a floating term It's also been a term that's not been defined up until the proposed legislation in front of us. And it's also been the vehicle for a lot of skepticism out and about for us as policymakers having to deal with our constituents. So, you know, FID was going to be 2025, then it was going to be January 2026, and now, if I recollect correctly, it's going to be sometime in the fourth quarter quarter of this year, and I just bring that up because, you know, there's also an argument to be made if you don't get to FID by 2028, this thing doesn't happen, right? So I just feel like I need to be answerable to those concerns that are out there.

Any response to that that you'd like to provide? Necessary, but wanted to give you the opportunity. Um, thank you, Trish Argonneau. Okay, Senator Stubman. So I understand the concern that investors, at least as much as I can, you know, face if there's a deadline and they could walk into a $20 mil property tax.

That's the issue, right? And so we have these deadlines And when we looked at this, we talked about force majeure, and we'll talk about that later, I guess, because I think everybody realizes that that should be addressed.

So there's risk that you're saying that the financial markets will put in the project, it's going to cost you more in interest or what have you, harder to find equity investors or whatever. Senator Simpson, that's correct. But your FERC project import permit expires May 21st, 2030, and your export permit expires August 20th, 2032, as I recall. So I would think that would also be something that would be applied for an extended. And I think there's 8 of the 22 permits sitting at FERC are in extension modes, at least counted them up the other day, yesterday or year or so.

So that's not an unforeseen or abnormal issue to get FERC extensions because they gave you 10 years on construction that expires again May 21st, 2030. So one of the options that we may want to consider is tying the deadlines into the FERC system.

Through the chair, what I will comment on that is that it is highly customary for FERC to provide those extensions to projects, particularly after they've gone into construction. I would need to triple-check, but I would say that I think it is almost— it is 100% that projects in construction have been granted extended extensions, that program or that track record of extending permits after a project has gone into construction has become reliable enough that that's not an issue that projects— that investors are concerned about, because FERC has such a reliable track record of extending those deadlines. And so that is is, so that risk is managed and understood. Senator Steadman, this is Matt Kissinger for the record. Senator Steadman, through the chair, if I can clarify what you were proposing was not that you tie it to the FERC dates, but to tie it to the FERC date as it gets modified itself through time, is that correct?

Well, just thinking through these things, We've had dialogue on this FID and we landed on January 28th and we put it in the statute here in the bill. There was some consternation on the December 32nd date in discussions and then the January 37th date didn't seem to be much of an issue. I'm just trying to to, I guess, think of ways to not be an inhibitor in moving the project forward and adding more risk, but to try to work with the system that's already in place and accomplish the same goal. 'Cause I don't think that the, I would be surprised if future legislators would want pull the plug on the project if it's, you know, two-thirds of the way through construction. That makes no sense.

Senator Steadman, this is something that I'd be happy to consider with the team a little bit more, but what I will say is that lenders and investors are very comfortable and familiar with the FERC deadline process and the reliability of getting extensions for that deadline. And so the dates that are tied to FERC permits generally don't provide an increased risk on projects.

Mr. Chairman? Speaker Edgeman, and then I'll have Representative Ruffridge. So thanks for your indulgence. Again, thinking out loud here, we're facing a couple different deadlines here as I see it, hearkening back to our conversations with utilities and their gas supply contracts and the need possibly to import and, you know, their long-term outlook as well.

Could you speak a little bit to why this project is on the cusp of being developed? And why this window that we are facing right now is so advantageous vis-à-vis waiting a couple of years. And if in fact this window is very unique, there is an alignment that we may not see in a couple of years, I don't know why these timelines would be an obstacle.

Mr. Prestidge. Thank you, Mr. Speaker, Adjournment. Yes, very happy to. If you will pardon me, I will give a condensed version because the answer of why this project is on the cusp is something I could talk about quite extensively.

It does go— one of the key elements is that the project does have all of its core permits in place necessary to go to FID. And so that is a unique position for any project to be in. That's not a— that's not always a position that a project can maintain in perpetuity, 'cause permits need to be updated. There's also the market dynamics of the need for replacement gas from an alternative source other than Coke Inlet. That is driving— that has the impact of driving customers and customer discussions where people want to figure out how to solve this.

And the solution, one of the solutions, is through pipeline gas as opposed to LNG imports.

The markets are very familiar with this project now. They're seeing its advancement and its progress. The project has certainly benefited from the support of the Trump administration, who have been advocating to see it go forward. The project also sits in the position of providing a lot of benefits that can solve some of the issues of global LNG buyers, particularly as they're seeing now with the conflict in Iran and the blockage of the Straits of Hormuz. Regardless of the the acute impact of that conflict itself.

Buyers are seeing real evidence of how, how geopolitical events can disrupt energy flows in, in the Asia Pacific, and they're very cognizant that those issues don't apply to the Alaska LNG project because we are able to ship LNG to Asia without going through any infrastructure maritime choke points. And so So those are just a few examples of why the project is primed and ready right now. Again, to your point about the timelines, I think it's a very good point, and I want to be clear, like, our practical expectation is that we will complete the project ahead of these timelines, and so the deadline or the timeline that you said The end of the year for FID maintains— continues to be our target. And we would— if we were to follow a target construction schedule, even with some delays, we would complete the project before December 31st, well before December 31st, 2032. And so those are the practical targets of what we intend to achieve and what we think is achievable.

And so really it goes down to to the hypothetical risks and just trying to minimize the hypothetical risks. And so that's where the objection, or I guess the raise of concern around the 2032 date, is that even though we practically intend to be well ahead of that, that hypothetical risk will be mitigated by investors who will just require, you know, a little bit higher of a return to balance out that risk. Risk. Follow-up, Speaker Edgeman. Just to wrap things up, the reason why I'm, I guess, at this juncture supportive of keeping in the 2028 timeline, if anything at all, it's just speaking of risk, poring through the Gaffney Klein document that was presented to the legislature in December 2025 that talks about all these sort of jurisdictions around the globe and the need for property tax relief and some sort of relief to get these very expensive front-end projects, gas line infrastructure, into place, is supported by years of analysis and efforts.

We've got weeks or months here in the legislature, and I feel like I think if FID isn't, for Phase 1, arrived at by 2028, there's justification for this issue to come back before the legislature to have a longer runway to engage in this discussion. I would submit to you or anyone else that we should not have gotten this bill on March 20th. We should have gotten this a lot earlier so we could, to pour over this in a way that complies with all the sort of what-if scenarios that are out there and also to be maybe a better partner to you as a developer overall to get our work done in a longer frame of time. So I guess at this point I'm not convinced that removing that 2028 FID deadline— and remember, it's just for Phase 1, it's not for Phase 2. You know, I don't know that it serves our best interests and de-risks makes everything that we're involved in here as policymakers.

So, Speaker, can you clarify your request for the change? Are you requesting that the 2028 deadline come out, or is it just the 2032 deadline? Can you help differentiate those again for us, please? This is out of precedence, uh, and yes, to clarify and to respond to Speaker Edgeman, uh, we as the project developer at 8 Star have no objection to the 2028 FID deadline. We're only raising concerns around the 2032 completion of construction deadline.

Next I've got Representative Ruffridge, unless you wanted back in, Mr. Speaker. No, I'll hold. Representative Ruffridge, and then I have Senator Steben. Yeah, thank you, Chair Sharagi. I'm, I'm wondering If you could just walk through, again, this bill adjusts or defines final investment decision, and I think highlights maybe the point you're trying to make, which is if you reach FID by January 1st, 2028, the items that are necessary for FID essentially compel construction.

And, and maybe put that here for us to hear on the record, all of the items that would go into making a final investment decision by January 1st of 2028, and why, and why the 2032 deadline only, only makes the project more expensive and ultimately maybe delays even further the thing that we're trying to accomplish by risking or having a more risky investment. I feel like the definition of final investment decision is very key here. Mr. Prestidge? This is Matt Kissinger for the record. Representative Ruffridge, through the Chair, the definition of final investment decision has indeed been worked very extensively as we— as this bill has been crafted.

And in fact, this is one Senate Finance change, I think, that— or one change that came through Senate Finance that I think made it a lot more robust. If I may read the full definition of final investment decision, it means a final affirmative decision of a natural gas project developer or a subsidiary of the primary project —owner to proceed from the planning phase to the implementation and construction phase of the Alaska liquefied natural gas project. A final investment decision has not been made until the project developer or a subsidiary of the primary project owner has obtained firm commitments for all debt and financing required to construct the project. So that's all the money required to construct the whole project. Entered into binding engineering procurement construction agreements for construction of the project.

So now that is the construction contractors having full agreements, again, binding agreements that they will build it. Entered into offtake agreements sufficient to underwrite construction and operation of the project. So this is where the debt, the credit support of the project comes through. Completed a cost estimate for the project and completed a final resource resource report for the project, meaning that there's enough resource, enough natural gas for the project. That is a very robust definition of a final investment decision, and it, it mirrors what is in the agreements between AGDC and Glenfarm, actually.

So the way these timelines are set up is by the 1st of January 2028, so a year and a half away essentially, You have to have all of that lined up. Once you have all of that lined up, the lenders, as Mr. Prestige mentioned, the lenders and the investors are going to keep you on track for getting the project done, because now they're expending billions of dollars, billions and billions of dollars. Interest is accruing on many, many of those billions of dollars, 70 to 80% of those dollars accruing interest during that entire time. So there's already enough incentive for the 2032 timeline. It's just by putting that in here as a penalty, all those investors up front are going to look at it and they're going to say, wow, if there's just one event that, you know, lasts more than a year, then we're going to miss that timeline.

And that's a huge risk. Even though everyone's going to be incentivized to reach that timeline. It just puts a risk in there without any actual incentive. So just to be really clear, supportive of the 2028 FID timeline. That's a very good one.

It's sooner than I think we realize. And also support for the long stop date of 2037 to ensure that this just doesn't drag out forever. It's just that highly penalizing 2032 date that we want to focus on.

Follow-up, Representative Ruffridge? Yeah, thank you. And I wanted to ask just as a follow-up to that, what would be— if this final investment decision is made by January 1st, 2028, what other than, you know, these force majeure things we'll talk about later, some sort of act of God, would stop this project from moving forward if FID has been obtained?

Representative Ruffridge, through the chair, I think you can only imagine the number of unintended things that can occur with respect to supply chains, with respect to global commodities, with respect to the labor market. If there's a robust a strict enough definition of force majeure would capture nearly all that. But if you look in commercial contracts around the world, the definition of force majeure varies. And it's varied through time, in fact. And so, you know, what is an act of God and what is an act of, you know, a supply chain somewhere else that just happens to have been impactful to you but not necessarily fall under the force majeure definition.

So many things that can happen in a project of this enormous complexity. And again, it's the risk of those things happening that the investors are going— and the financiers are going to be taking into account when they price in their— the money that they lend or provide to the project. Understood. Thank you. Thank you.

Senator Steadman. In brevity to get to lunch, because you're between me and my sandwich. But this is the third project that I could recall that we're facing a window, and that's not an uncommon term here at the table. I think it's actually a door we walked through several years ago, although possibly accelerated here with what's going on in Iran and the Persian Gulf. But I think that the time element is the ticking of the permits, the clock.

They give you 10 years. I think on the FERC permit and they give you— I think everybody else got 7 on the export permit and we got 10, 12, 12. Yeah, so it's the permit ticking. I think that I look at that as more of a window than the marketplace itself. It's a door.

Just a quick comment. Yes, thank you. Speaker Edmond. Yes, there seems to be a little bit of incongruity between bullet number 1, no FID on Phase 1, Phase 1 by January 1st, 2028, and definition of FID in the bill itself, which brings in Phase 2 in the definition. So we might want to take a closer look at that.

Speaker Edmondson, thank you for that clarification. There is a definition of Phase 1 FID on page 28. I apologize for not having the section reference. Two different—. An additional one of Phase 2 on page 38.

Thank you. I stand clear.

All right. We have been going at it for quite a while now. I want to thank you guys for getting us this far in the presentation. I was going to adjourn at this time to pick this back up at 2 o'clock, but I see that the esteemed Senator Hoffman would like a moment here. Senator Hoffman.

To Mr. Kissinger, this presentation, as Glen Farnell Alaska on the label being presented, but you're at the table and representing the state. So between now and then— between now and when we reconvene, I'd like to know to what extent are you sitting at the end of the table, are you representing the state's interest in— or are you participating as a primary owner in 8 Star Alaska with Glenfarm and AGDC? So think about that. We can get a response after lunch. Very good.

With that, we've concluded our business for this morning's meeting. We will resume at 2:00 PM this afternoon, right where we're leaving off now. So thank you again, gentlemen. We are adjourned at 12:18 PM.