Legislature(2025 - 2026)
2026-05-21 Senate Journal
Full Journal pdf2026-05-21 Senate Journal Page 2915 SB 2001 SENATE BILL NO. 2001 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "An Act relating to the taxation of certain natural gas project property and related facilities; relating to the determination of the value of taxable real and personal property for purposes of calculating local contributions for public school funding; relating to municipal property taxes; relating to the Alaska Gasline Development Corporation; relating to revenue from a North Slope natural gas project; relating to an alternative volumetric tax on natural gas throughput; relating to agreements and payments related to a natural gas project; relating to community impact grants; relating to the regulation of liquefied natural gas import facilities by the Regulatory Commission of Alaska; relating to an Alaska liquefied natural gas project mitigation fund; and providing for an effective date." was read the first time and referred to the Finance Committee. The following fiscal information was published today: Fiscal Note No. 1, Department of Revenue Fiscal Note No. 2, Department of Commerce, Community, and Economic Development Fiscal Note No. 3, zero, Department of Commerce, Community, and Economic Development 2026-05-21 Senate Journal Page 2916 Governor’s transmittal letter dated May 20: Dear President Stevens: Under the authority of Article III, Section 18 of the Alaska Constitution, I am transmitting a bill relating to the taxation of certain natural gas pipeline property, municipal taxation limitations, the establishment of an alternative volumetric tax on natural gas throughput, and the allocation of revenue from that tax for the Alaska Liquefied Natural Gas (AKLNG) Project. This legislation builds on the bill transmitted earlier this year and reflects the most recent negotiated framework developed during the regular session. It preserves the central purpose of the original proposal: replacing a property-tax structure that creates front-end costs and uncertainty with a volume-based tax structure that is tied to project performance, while adding provisions intended to address local community impacts, revenue allocation, labor stability, and in-state energy access. The AKLNG Project remains one of the most significant economic and energy-infrastructure opportunities in Alaska’s history. For decades, Alaska has sought a way to deliver abundant North Slope natural gas to market while ensuring affordable and reliable energy for Alaskans. The need for action is urgent. Cook Inlet gas supplies are declining, energy costs remain a serious burden for families and businesses, and Alaska must make the necessary decisions to secure its long-term energy future. Development of the AKLNG Project will help lower long-term energy costs for Alaska families and businesses, provide long-term energy security for communities across the state, and enable the responsible development of North Slope oil and gas resources that might otherwise remain stranded. The project will generate thousands of construction jobs, long-term operations employment, and significant economic activity. In addition, the project will provide substantial stable new revenue for state and local governments while supporting long-term economic growth across multiple sectors of Alaska’s economy. 2026-05-21 Senate Journal Page 2917 The project includes a 739-mile natural gas pipeline in Phase One, and completion of the pipeline, compressor stations, a North Slope gas treatment facility, and an LNG export facility in Cook Inlet in subsequent phases. Phase One is key to bringing affordable energy to Alaskans. Access to North Slope natural gas will help stabilize and lower long-term energy costs for homes, businesses, and utilities throughout Alaska. Under the existing annual 20 mill, or two percent, property tax on oil and gas property, investors have indicated that the AKLNG Project would face a tax structure that imposes significant costs before the project is fully operational. To deliver energy at the lowest possible cost to Alaskans and improve the project’s ability to attract private investment, this bill adopts an alternative method of taxation based on natural gas throughput rather than assessed infrastructure value. This modified proposal continues to provide tax relief during construction and initial operations, while establishing clear conditions for when the alternative volumetric tax begins. The alternative tax structure applies when the project reaches the throughput threshold or the applicable initial operating period has concluded, as provided in the bill. This approach gives the project a predictable path through construction and start-up while ensuring that public revenues are tied to actual project performance. The bill establishes an alternative volumetric tax structure for major components of the AKLNG Project, including the pipeline, gas treatment and related facilities, and LNG facilities. By tying the tax to throughput, the legislation aligns public revenue with the volume of gas moving through the project, provides greater predictability for investors, reduces the risk of repeated valuation disputes, and supports the short- and long-term economic viability of the project. This version also incorporates additional protections and commitments developed through the legislative process. The bill provides for the allocation of revenue between the State and affected municipalities, recognizes the impacts on communities that will host or support project infrastructure, and includes a community impact fund to help address construction-related effects. It also includes provisions related to a Fairbanks spur line commitment and project labor agreements to support in-state energy access, labor stability, and timely construction. 2026-05-21 Senate Journal Page 2918 The bill further provides that the alternative tax structure will not remain available indefinitely if the project does not move forward. If the project does not meet the construction and development requirements established in the bill, the tax structure will terminate and the project will revert to the existing oil and gas property tax framework. This ensures that tax relief is tied to actual project advancement. This legislation provides a clear, predictable, and performance-based tax structure for the AKLNG Project while incorporating additional community, labor, and revenue protections. It advances a project that can deliver affordable energy to Alaskans, strengthen Alaska’s energy security, support economic growth, create jobs, and unlock the full potential of North Slope natural gas resources. I urge your prompt and favorable action on this measure. Sincerely, /s/ Mike Dunleavy Governor