Legislature(2025 - 2026)BUTROVICH 205
03/21/2025 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 114 | TELECONFERENCED | |
| *+ | SB 125 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 21, 2025
3:31 p.m.
DRAFT
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Bill Wielechowski, Vice Chair (via teleconference)
Senator Matt Claman
Senator Scott Kawasaki
Senator Shelley Hughes
Senator Robert Myers
MEMBERS ABSENT
Senator Forrest Dunbar
COMMITTEE CALENDAR
SENATE BILL NO. 125
"An Act establishing the Alaska Gasline Finance Corporation; and
relating to contributions from permanent fund dividends for the
financing of a natural gas pipeline."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 125
SHORT TITLE: AK GASLINE FINANCE CORPORATION
SPONSOR(s): SENATOR(s) YUNDT
03/12/25 (S) READ THE FIRST TIME - REFERRALS
03/12/25 (S) RES, FIN
03/21/25 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
SENATOR ROBERT YUNDT, District N
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 125.
RYAN MCKEE, Staff, Senator Robert Yundt
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for and
answered questions on SB 125.
ACTION NARRATIVE
3:30:58 PM
CHAIR GIESSEL called the Senate Resources Standing Committee
meeting to order at 3:31 p.m. Present at the call to order were
Senators Myers, Kawasaki, Claman, Hughes, Wielechowski (via
teleconference) and Chair Giessel.
SB 125-AK GASLINE FINANCE CORPORATION
3:31:52 PM
CHAIR GIESSEL announced the consideration of SENATE BILL NO. 125
"An Act establishing the Alaska Gasline Finance Corporation; and
relating to contributions from permanent fund dividends for the
financing of a natural gas pipeline."
3:32:19 PM
SENATOR ROBERT YUNDT, District N, Alaska State Legislature,
Juneau, Alaska, Sponsor of SB 125, said SB 125 was an early-
stage proposal aimed at allowing Alaska residents to voluntarily
invest in a future gas pipeline, if it was built. He explained
that residents could voluntarily opt in to purchase a minimum
$2,500 share, potentially by committing portions of their next
three Permanent Fund Dividends (PFDs) until that amount was
reached. Residents could also make a one-time upfront investment
with no maximum limit. He said the proposal envisioned
participation from hundreds of thousands of Alaskans,
potentially raising several billion dollars, with the investment
being transferable and inheritable like any other private
investment. The fund would be structured to be self-sustaining
and not impose costs on taxpayers, with fiscal impacts still
undetermined. He said the details would be finalized only if and
when the gas pipeline project moved forward.
3:34:26 PM
RYAN MCKEE, Staff, Senator Robert Yundt, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 125:
[Original punctuation provided.]
Sectional Analysis
SB 125
Section 1: Adds a new chapter to read: Chapter 27.
Alaska Gasline Finance Corporation.
Sec. 31.27.010: Establishes the Alaska Gasline Finance
Corporation within the Department of Revenue.
Sec. 31.27.020: Specifies that the board of directors
will consist of 4 public members, the commissioner of
revenue, and a public member appointed by the
governor.
Sec. 31.27.030: Specifies how the corporation will
operate.
3:35:02 PM
MR. MCKEE continued to present the sectional analysis for SB
125:
Sec. 31.27.040: Establishes the fund for the AK
Gasoline Finance Corporation and specifies what the
fund will consist of.
Sec. 31.27.050: Specifies the minimum amount an
individual can invest in shares of a natural gas
pipeline, except for the initial share offering where
there will be no minimum or maximum investment amount.
Sec: 31.27.060: Establishes regulations.
Sec. 31.27.090: Establishes definitions in this
chapter.
Section 2: Adds a new section
43.23.135: Natural Gas Pipeline Share Purchase.
Outlines how an individual can purchase a share and
specifies what they are not allowed to contribute to,
if they do purchase shares.
Section 3: Amends the uncodified law of the State of
Alaska by adding a new section specifying the terms of
the initially appointed public members.
3:36:13 PM
SENATOR HUGHES referred to SB 125, Section 2. She noted the
mechanism for purchasing shares in the pipeline through
deductions from PFDs and asked whether it would be possible to
purchase shares by writing a check.
3:36:42 PM
SENATOR YUNDT said yes.
3:36:46 PM
SENATOR HUGHES asked whether the vision for SB 125 included
working with investors across the country and conceivably
worldwide to finance a natural gas pipeline.
3:37:08 PM
SENATOR YUNDT affirmed that the vision was to reserve a portion
of the investment pool for Alaska residents while still opening
the project to outside investors as needed. He said Alaskans
alone could not fully fund the project, and the goal was to give
residents a meaningful opportunity to participate at a small to
medium level as the project moved forward.
3:37:38 PM
SENATOR KAWASAKI said he thought there was strong interest in a
gas pipeline project. He asked for clarification on to
understand how the investment would work under Title 43,
specifically:
• How a person would buy shares
• How the value of the shares would be determined
3:38:07 PM
SENATOR YUNDT said the corporation would need to provide regular
reports, likely annually, with quarterly payouts being the most
practical. He said updates would be managed by the Board of
Directors, similar to how an investor receives updates from a
broker.
3:38:35 PM
SENATOR KAWASAKI noted that in similar legislation, the entity
would be a state instrument to minimize tax issues. He asked
whether individual investments and dividends would be taxable.
3:38:56 PM
SENATOR YUNDT affirmed that any profits in life will be taxable
events.
3:39:07 PM
SENATOR CLAMAN asked whether, under SB 125, the investment
opportunity would initially be open only to Alaska residents.
3:39:25 PM
SENATOR YUNDT clarified that the fund would not be limited
exclusively to Alaska residents, but would include a designated
pool for Alaska residents with varying levels of share
ownership.
3:39:41 PM
SENATOR CLAMAN asked whether a publicly available investment
could legally distinguish between Alaska residents and non-
residents, even if the investment is structured into separate
pools.
3:40:16 PM
SENATOR YUNDT said it would be easiest to [administer the
investment program] through the MyAlaska accounts through which
Alaska residents apply for their PFDs. He said it would be
necessary to make the investment opportunity available to
others.
3:40:35 PM
SENATOR CLAMAN suggested the sponsor consult with legislative
legal counsel. He noted that residency requirements applied to
the Permanent Fund Dividend (PFD), and he recalled the Zobel
case in the 1980's which clarified the requirement for equal
treatment of individuals regardless of the length of their
residency. He expressed concern that offering a public
investment while distinguishing between residents and non-
residents may raise federal legal issues.
3:41:24 PM
SENATOR YUNDT said he would research the issue and follow up
with the committee. He emphasized the goal of giving Alaska
residents an affordable opportunity to invest by committing
future PFDs. He acknowledged the legal question raised and
expressed appreciation for it.
3:41:53 PM
SENATOR CLAMAN asking what would happen if an Alaska resident
investor later moved out of state and whether they would remain
in the Alaska investment pool or be shifted to a non-resident
pool.
3:42:28 PM
SENATOR YUNDT said he expected that the investment would remain
in the original investment pool.
3:42:37 PM
SENATOR CLAMAN asked how Alaska resident investment would work
in a pipeline that was only partially state-owned. Specifically,
he questioned whether Alaska investors could increase the
state's initial ownership share, for example 10 percent, by
investing more money, or whether Alaska ownership would remain
fixed at the percentage negotiated with private owners,
regardless of additional in-state investment.
3:43:50 PM
SENATOR YUNDT argued that the ownership structure would need to
be fixed and the investment offering closed at a certain point
to avoid legal issues. He said Alaska's ownership percentage
would be determined by the amount committed when the offering
closed and would remain permanent, since changing it later would
likely lead to lawsuits.
3:44:41 PM
SENATOR CLAMAN asked whether an Alaskan's share of the Alaska
pool would depend on how much other Alaskans invested.
3:45:00 PM
SENATOR YUNDT confirmed that it would. He pointed out that if $1
billion dollars were raised up front, then the original [fixed]
investment amount would be a larger [share of the total Alaska
pool] than if $2 billion were raised.
3:45:17 PM
SENATOR MYERS asked whether an individual who purchased shares
would be able to resell them to other residents or out of state.
3:45:28 PM
SENATOR YUNDT said he hoped the fund would simply cash someone
out. He said it should be inheritable, allowing it to be passed
on to children. He noted that the decision was subject to the
legislative process to determine whether the fund would buy the
shareholder out or whether the shareholder would need to sell
their interest.
3:45:55 PM
SENATOR MYERS noted mention in SB 125 of money appropriated to
the fund by the legislature. He asked whether the shares would
be equal in value, for example $2,500.
3:46:13 PM
SENATOR YUNDT said each share would be of equal value,
regardless of who purchased it. He said the provision allowing
the legislature to appropriate to the fund was to allow the
legislature to commit some money on behalf of all Alaskans.
3:46:36 PM
CHAIR GIESSEL asked whether SB 125 specified that only Alaska
residents could participate in the investment.
3:46:55 PM
SENATOR YUNDT referred to SB 125, page 2, line 28. He said the
only benefit Alaska residents would have over non-residents was
the ability to commit PFD's to the fund.
3:47:14 PM
CHAIR GIESSEL referred to SB 125, page 2, line 30 and 31, and
quoted, "at the time of initial share offering, the corporation
shall offer shares with no minimum or maximum investment
amount." She asked for clarification, referring to SB 125, page
2, lines 27 - 29 which specified a minimum investment amount of
$2,500.
3:47:52 PM
MR. MCKEE said the initial investment could be made as a one-
time contribution with no minimum or maximum amount. After that
initial investment, all subsequent contributions must meet a
minimum requirement of $2,500.
3:48:13 PM
SENATOR YUNDT clarifies that his original intent was to require
a $2,500 minimum investment. He acknowledged the need to revisit
this with legal. He said the $2,500 minimum existed to ensure
meaningful participation, with the option for those without the
full amount upfront to commit future PFDs to reach the minimum,
since very small investments would be impractical to manage.
3:48:41 PM
CHAIR GIESSEL asked what would prevent someone from investing
$800,000 or even $1 million.
3:48:56 PM
SENATOR YUNDT said nothing would prevent that and he hoped they
would.
3:48:59 PM
SENATOR HUGHES asked for clarification on when the program would
begin, given that it involved a large, multi-billion-dollar
project developed in stages. She noted the absence of an
effective date in the bill and asked at what point shares would
become available
3:49:28 PM
SENATOR YUNDT said he intentionally omitted an effective date.
He said he would want guidance from the Department of Revenue
(DOR) to determine an appropriate effective date.
3:49:49 PM
CHAIR GIESSEL noted that a single investment might be $800,000.
She asked whether there would be a cap on the share price.
3:50:04 PM
SENATOR YUNDT said the share price would be determined [and
fixed], for example, at $2500, but there would be no cap on the
number of shares an Alaska resident could purchase.
3:50:16 PM
CHAIR GIESSEL asked what would happen if there was a flood of
outside investors that came in and purchased up shares. She
questioned whether there would be unlimited shares.
3:50:38 PM
SENATOR YUNDT explained that shares would be allocated when the
offering closed, based on the total upfront equity raised. Using
a hypothetical $48 billion project, if investors contributed $16
billion and the rest was financed through bank loans, shares
would be calculated by dividing the invested amount by $2,500.
Share ownership would vary by investor, but key factors, such as
share value, investment duration, and total equity required,
would need to be determined in advance, based on how much cash
was raised upfront and how much debt financing banks were
willing to provide.
3:51:45 PM
CHAIR GIESSEL asked whether these decisions would be made by the
fund's board of directors.
3:51:52 PM
SENATOR YUNDT affirmed that they would be board decisions. He
expressed doubt about the accuracy of the current cost
estimates, noting that rising steel and labor prices meant
construction costs were likely to increase and that the figures
had not been updated recently.
3:52:13 PM
SENATOR CLAMAN observed that if a project was primarily owned by
private investors, for example, 90 precent, with a smaller
public ownership portion, ten percent, then before any public
shares could be sold, there must be an agreement with the
private owners defining the structure and terms under which the
public's ownership stake was offered.
3:52:53 PM
SENATOR YUNDT said an upfront ownership agreement was not
needed. Instead, public ownership would be determined by how
much capital was raised through the offering. There would be no
predetermined percentage for Alaska residents; rather, share
price and total capital needs would be set, and the final
ownership percentage would be established when the offering
closed based on how much Alaskans invested.
3:53:33 PM
SENATOR CLAMAN argued that without knowing the Alaska ownership
stake, it was premature to define investment terms like minimum
contributions. He said SB 125 should first address ownership
structure and secure approval from the majority owner of the
pipeline to sell any minority interest. He emphasized that, from
an investor's perspective, clarity was needed on how a personal
investment related to the majority owner's rights and control.
He said shares should not be offered until the ownership
structure and relationship with the majority owner were clearly
established.
3:55:06 PM
SENATOR YUNDT concurred and noted that discussions with the
Department of Revenue were ongoing. He acknowledged that the
identity of the majority owner was not yet known and that many
broader questions about the pipeline remained unresolved.
However, he confirmed that ownership structure and related
issues would need to be determined upfront before moving
forward.
3:55:29 PM
CHAIR GIESSEL referred to SB 125, page 2, lines 1 - 7 and said
she supported including the Commissioner of the Department of
Revenue on the board but suggested that the qualifications for
all board members should be more clearly defined. She
recommended specifying expertise requirements similar to the
requirements for members of other regulatory bodies. She also
raised the question of whether board members must be Alaskans,
noting that necessary expertise may not always be available
within the state.
3:56:40 PM
SENATOR YUNDT agreed that requirements for board members merited
further consideration and said a proposed structure would be
presented at the next committee hearing. He emphasized that
setting the qualifications was ultimately the legislature's
responsibility and should be decided collaboratively by
lawmakers.
3:57:00 PM
CHAIR GIESSEL explained that the board qualifications and
compensation were defined in statute for the Regulatory
Commission of Alaska in the prior year. She indicated that a
similar statutory framework would be expected in this case.
3:57:20 PM
SENATOR CLAMAN recommended that board members be subject to
legislative confirmation and serve fixed terms rather than at
the governor's pleasure. He argued that this would ensure board
independence, continuity, and institutional knowledge,
preventing governors from replacing members based on political
or personal disagreement, similar to the structure of the
Regulatory Commission of Alaska.
3:58:30 PM
SENATOR YUNDT concurred and noted that investors would support
board stability to avoid policy swings driven by election
changes.
3:58:42 PM
SENATOR KAWASAKI asked how SB 125 would affect the current and
ongoing international discussions, particularly with countries
like Taiwan and Japan, and whether the bill would complement,
add to, or potentially hinder those efforts.
3:59:11 PM
SENATOR YUNDT expressed hope that SB 125 would be complementary
to ongoing international efforts but noted that this will become
clearer over time. He acknowledged speculation about potential
partners and emphasized that the project could not be completed
alone and will require support from Washington, DC, and
international allies.
3:59:37 PM
SENATOR MYERS raised a concern that allowing out-of-state
investors could also permit foreign individuals or corporations
to purchase shares and asked whether that had been considered.
4:00:03 PM
SENATOR YUNDT explained that SB 125 did not address foreign or
out-of-state investment, as its primary purpose was to establish
a framework for resident participation through PFD commitments
and a minimum share amount. He acknowledged, however, that
foreign investment will need to be addressed, since completing
the project will likely require involvement from non-U.S.
companies.
4:00:35 PM
CHAIR GIESSEL suggested that SB 125 could include provisions to
prevent or limit foreign investment, from China for example, in
the program.
4:00:43 PM
SENATOR HUGHES concurred. She referred to SB 125, page 2, lines
12 - 16 and asked whether the intent was to contract staff to
support the board rather than state employees.
4:01:11 PM
SENATOR YUNDT said that was correct.
4:01:15 PM
SENATOR HUGHES asked whether the sponsor of SB 125 had had any
discussions with Glenfarne, Frank Richards, or the governor
regarding SB 125, noting that there may already be conversations
or deals in progress.
4:01:38 PM
SENATOR YUNDT said he had discussed SB 125 with the governor's
team, but no one else.
4:01:46 PM
SENATOR HUGHES asked whether he received any feedback in favor
of or in opposition to SB 125.
4:01:52 PM
SENATOR YUNDT said no one opposed allowing Alaskan residents to
invest, and those present seemed open and optimistic about the
idea. He deferred to Mr. McKee.
4:02:16 PM
MR. MCKEE referred to SB 125, page 2, lines 27-28 and suggested
clarifying the language to define the public as individual, non-
corporate, in-state investors, thereby preventing companies or
out-of-state entities from buying large amounts of shares.
4:03:03 PM
SENATOR HUGHES questioned whether restricting investment to
Alaskans might raise [United States] constitutional issues,
despite supporting the idea, and asked whether there were any
legal concerns.
4:03:55 PM
SENATOR YUNDT said his goal with SB 25 was not to exclude non-
residents, but to create an accessible investment option for
Alaskans using future PFDs. He said a legal opinion would be
needed only if exclusion were intended.
4:04:47 PM
SENATOR CLAMAN acknowledging limited experience in this area,
expressed concerns about legally restricting who can buy or sell
shares, whether to Alaskans only, individuals, or excluding
corporations and investment groups. He recognized potential
issues, but said he was uncertain of the legal validity.
4:06:31 PM
SENATOR YUNDT emphasized that while SB 125 aimed to allow Alaska
residents to invest, the sale of shares should remain open to
anyone to ensure free market access and maximize value for
shareholders.
4:06:59 PM
CHAIR GIESSEL invited closing remarks on SB 125.
4:07:26 PM
SENATOR YUNDT expressed appreciation for the questions and
comments on SB 125. He compared the intended opportunity to
invest in a gas pipeline to the Pick, Click, Give program.
4:07:52 PM
CHAIR GIESSEL held SB 125 in committee.
4:08:24 PM
There being no further business to come before the committee,
Chair Giessel adjourned the Senate Resources Standing Committee
meeting at 4:08 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 125 Fiscal Note DoR Alaska Gasline Finance Corporation.pdf |
SRES 3/21/2025 3:30:00 PM |
SB 125 |
| SB 125 Sectional Analysis.pdf |
SRES 3/21/2025 3:30:00 PM |
SB 125 |
| SB 125 Fiscal Note DoR Taxation and Treasury.pdf |
SRES 3/21/2025 3:30:00 PM |
SB 125 |
| SB 125 Sponsor Statement.pdf |
SRES 3/21/2025 3:30:00 PM |
SB 125 |
| SB0125A.pdf |
SRES 3/21/2025 3:30:00 PM |
SB 125 |