Read the full stored bill text
SB3001A -1- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
34-GS3141\A
SENATE BILL NO. 3001
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - THIRD SPECIAL SESSION
BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
Introduced: 6/20/26
Referred: Finance
A BILL
FOR AN ACT ENTITLED
"An Act relating to the taxation of certain natural gas project property and related 1
facilities; relating to local contributions for public school funding; relating to municipal 2
property taxes; relating to the Alaska Gasline Development Corporation and funds of 3
the Alaska Gasline Development Corporation; relating to reporting requirements for 4
natural gas pipeline projects; creating the Alaska affordable heating fuel fund; relating 5
to approval of contracts by the Regulatory Commission of Alaska and inflation 6
adjustment of the maximum price of natural gas; relating to an alternative volumetric 7
tax on natural gas throughput; relating to a municipal impact grant program and fund; 8
relating to agreements and a payment related to a natural gas project; and providing for 9
an effective date." 10
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11
* Section 1. The uncodified law of the State of Alaska is amended by adding a new section 12
34-GS3141\A
SB 3001 -2- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
to read: 1
LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that the tax 2
treatment in sec. 26 of this Act is necessary to advance a major natural gas project and to 3
ensure that 4
(1) the project maximizes the benefit to the state by ensuring direct and 5
affordable access to natural gas to the residents of the state; and 6
(2) communities affected by the natural gas project are protected from the 7
negative effects of the project. 8
(b) Nothing in this Act is intended to establish, modify, impair, waive, or otherwise 9
affect the tax treatment, assessment methodology, valuation, taxing authority, or applicability 10
of taxes imposed under AS 29.45 or AS 43.56 with respect to any other property, project, 11
facility, infrastructure, or taxpayer. It is the intent of the legislature that this Act be narrowly 12
construed and not serve as precedent, guidance, or interpretive authority for the taxation of 13
any other property subject to taxation under AS 29.45 or AS 43.56. 14
* Sec. 2. AS 14.17.410(b), as amended by sec. 7, ch. 22, SLA 2026, is amended to read: 15
(b) Public school funding consists of state aid, a required local contribution, 16
and eligible federal impact aid determined as follows: 17
(1) state aid equals basic need minus a required local contribution and 18
90 percent of eligible federal impact aid for t hat fiscal year; basic need equals the sum 19
obtained under (D) of this paragraph, multiplied by the base student allocation set out 20
in AS 14.17.470; district adjusted ADM is calculated as follows: 21
(A) the ADM of each school in the district is calculated by 22
applying the school size factor to the student count as set out in AS 14.17.450; 23
(B) the number obtained under (A) of this paragraph is 24
multiplied by the district cost factor described in AS 14.17.460; 25
(C) the ADMs of each school in a district, as adjusted 26
according to (A) and (B) of this paragraph, are added; the sum is then 27
multiplied by the special needs factor set out in AS 14.17.420(a)(1) and the 28
secondary school vocational and technical instruction funding factor set out in 29
AS 14.17.420(a)(3); 30
(D) the number obtained for intensive services under 31
34-GS3141\A
SB3001A -3- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
AS 14.17.420(a)(2) and the number obtained for correspondence study under 1
AS 14.17.430 are added to the number obtained under (C) of this paragraph or 2
under (H) and (I) of this paragraph; 3
(E) notwithstanding (A) - (C) of this paragraph, if a school 4
district's ADM adjusted for school size under (A) of this paragraph decreases 5
by five percent or more from one fiscal year to the next fiscal year, the school 6
district may use the last fiscal year before the decrease as a base fiscal year to 7
offset the decrease, according to the following method: 8
(i) for the first fiscal year after the base fiscal year 9
determined under this subparagraph, the school district's ADM adjusted 10
for school size determined under (A) of this paragraph is calculated as 11
the district's ADM adjusted for school size, plus 75 percent of the 12
difference in the district's ADM adjusted for school size between the 13
base fiscal year and the first fiscal year after the base fiscal year; 14
(ii) for the second fiscal year after the base fiscal year 15
determined under this subparagraph, the school district's ADM adjusted 16
for school size determined under (A) of this paragraph is calculated as 17
the district's ADM adjusted for school size, plus 50 percent of the 18
difference in the district's ADM adjusted for school size between the 19
base fiscal year and the second fiscal year after the base fiscal year; 20
(iii) for the third fiscal year after the base fiscal year 21
determined under this subparagraph, the school district's ADM adjusted 22
for school size determined under (A) of this paragraph is calculated as 23
the district's ADM adjusted for school size, plus 25 percent of the 24
difference in the district's ADM adjusted for school size between the 25
base fiscal year and the third fiscal year after the base fiscal year; 26
(F) the method established in (E) of this paragraph is available 27
to a school district for the three fiscal years following the base fiscal year 28
determined under (E) of this paragraph only if the district's ADM adjusted for 29
school size determined under (A) of this paragraph for each fiscal year is less 30
than the district's ADM adjusted for school size in the base fiscal year; 31
34-GS3141\A
SB 3001 -4- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
(G) the method established in (E) of this paragraph does not 1
apply to a decrease in the district's ADM adjusted for school size resulting 2
from a loss of enrollment that occurs as a result of a boundary change under 3
AS 29; 4
(H) notwithstanding (A) - (C) of this paragraph, if one or more 5
schools close and consolidate with one or more other schools in the same 6
community and district and, as a result of the consolidation, basic need 7
generated by the district's ADM of the consolidated schools as adjusted under 8
(A) - (C) of this paragraph decreases, the district may use the last fiscal year 9
before the consolidation as the base fiscal year to offset that decrease for the 10
first four fiscal years following consolidation according to the following 11
method: 12
(i) for the first two fiscal years after the base fiscal year, 13
the district's ADM of the consolidated schools as adjusted under (A) - 14
(C) of this paragraph is calculated by dividing the sum of the district's 15
ADM of the consolidated schools as adjusted under (A) - (C) of this 16
paragraph for the base fiscal year by the sum of the district's ADM of 17
the consolidated schools for the base fiscal year without adjustment, 18
and subtracting the quotient obtained by dividing the district's ADM of 19
the consolidated schools for the current fiscal year as adjusted under 20
(A) - (C) of this paragraph by the sum of the district's ADM of the 21
consolidated schools for the current fiscal year without adjustment, 22
multiplying that number by the sum of the district's ADM of the 23
consolidated schools for the current fiscal year without adjustment, and 24
adding that number to the sum of the district's ADM of the consolidated 25
schools for the current fiscal year as adjusted under (A) - (C) of this 26
paragraph; 27
(ii) for the third fiscal year after the base fiscal year, the 28
district's ADM of the consolidated schools as adjusted under (A) - (C) 29
of this paragraph is calculated by dividing the sum of the district's 30
ADM of the consolidated schools as adjusted under (A) - (C) of this 31
34-GS3141\A
SB3001A -5- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
paragraph for the base fiscal year by the sum of the district's ADM of 1
the consolidated schools for the base fiscal year without adjustment, 2
and subtracting the quotient obtained by dividing the sum of the 3
district's ADM of the consolidated schools for the current fiscal year as 4
adjusted under (A) - (C) of this paragraph by the sum of the district's 5
ADM of the consolidated schools for the current fiscal year, 6
multiplying that number by the sum of the district's ADM of the 7
consolidated schools for the current fiscal year without adjustment, 8
multiplying that number by 66 percent, and adding that number to the 9
sum of the district's ADM of the consolidated schools for the current 10
fiscal year as adjusted under (A) - (C) of this paragraph; 11
(iii) for the fourth fiscal year after the base fiscal year, 12
the district's ADM of the consolidated schools as adjusted under (A) - 13
(C) of this paragraph is calculated by dividing the sum of the district's 14
ADM of the consolidated schools as adjusted under (A) - (C) of this 15
paragraph for the base fiscal year by the sum of the district's ADM of 16
the consolidated schools for the base fiscal year without adjustment, 17
and subtracting the quotient obtained by dividing the sum of the 18
district's ADM of the consolidated schools for the current fiscal year as 19
adjusted under (A) - (C) of this paragraph by the sum of the district's 20
ADM of the consolidated schools for the current fiscal year, 21
multiplying that number by the sum of the district's ADM of the 22
consolidated schools for the current fiscal year without adjustment, 23
multiplying that number by 33 percent, and adding that number to the 24
sum of the district's ADM of the consolidated schools for the current 25
fiscal year as adjusted under (A) - (C) of this paragraph; 26
(iv) to calculate the district's basic need for each fiscal 27
year, the number obtained through the calculation in (i), (ii), or (iii) of 28
this subparagraph is added to the number obtained under (C) of this 29
paragraph for the remainder of the district; 30
(I) if the basic need calculated under (H)(i) - (iii) of this 31
34-GS3141\A
SB 3001 -6- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
paragraph for one of the first four fiscal years after consolidation is less than 1
the basic need calculated under (A) - (C) of this paragraph for that fiscal year, 2
the basic need may not be adjusted under (H) of this paragraph for that fiscal 3
year; 4
(J) a district may not offset a decrease under (H) of this 5
paragraph if 6
(i) a new facility is constructed in the district for the 7
consolidation; or 8
(ii) the district offset a decrease under (E) of this 9
paragraph in the same fiscal year; 10
(K) a district that offsets a decrease under (H) of this paragraph 11
may not reopen a school that was closed for consolidation in the district until 12
(i) four or more years have passed since the school 13
closure; and 14
(ii) the district provides evidence satisfactory to the 15
department that the schools affected by the consolidation are over 16
capacity; 17
(L) a district may not reopen and reconsolidate a school that 18
was consolidated in the district more than once every four years for purposes 19
of the calculations made under (H) of this paragraph; 20
(M) a district offsetting a decrease under (H) of this paragraph 21
shall provide the department with the list of schools participating in the 22
consolidation and the corresponding ADM; 23
(2) the required local contribution of a city or borough school district 24
(A) is calculated by combining 25
(i) the equivalent of a 2.65 mill tax levy on the full and 26
true value of the taxable real and personal property in the district as of 27
January 1 of the second preceding fiscal year, as determined by the 28
Department of Commerce, Community, and Economic Development 29
under AS 14.17.510 and AS 29.45.110, not to exceed the amount 30
calculated under this sub -subparagraph for the preceding fiscal 31
34-GS3141\A
SB3001A -7- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
year by more than four percent; and 1
(ii) if the city or borough of the school district 2
collects an alternative volumetric tax under AS 43.59.030, or if the 3
state collects an alternative volumetric tax on behalf of the city or 4
borough of the school district under AS 43.59.030, an amount equal 5
to a portion of the alternative volumetric tax collected, calculated 6
by multiplying the alternative volumetric tax collected by or on 7
behalf of the city or borough under AS 43.59.030 by 2.65 and 8
dividing the product by the mill rate set out in AS 43.56.010(a); 9
(B) [; THE REQUIRED LOCAL CONTRIBUTION] may not 10
exceed [(A)] 45 percent of a district's basic need for 11
(i) the preceding fiscal year as determined under (1) of 12
this subsection; or 13
(ii) [(B) THE AMOUNT OF THE DISTRICT'S 14
REQUIRED LOCAL CONTRIBUTION FOR] the second preceding 15
fiscal year as determined under (1) of this subsection by more than 16
four percent. 17
* Sec. 3. AS 14.17.510 is amended by adding a new subsection to read: 18
(d) In this section, the full and true value of the taxable real and personal 19
property does not include property subject to tax abatement under AS 43.59.010 or the 20
alternative volumetric tax levied under AS 43.59.020. 21
* Sec. 4. AS 29.45.030 is amended by adding a new subsection to read: 22
(o) Property of a natural gas project subject to tax abatement under 23
AS 43.59.010 or to the alternative volumetric tax under AS 43.59.020 is exempt from 24
taxation under AS 29.45. In this subsection, "natural gas project" has the meaning 25
given in AS 43.59.100. 26
* Sec. 5. AS 29.45.080(c) is amended to read: 27
(c) A municipality may levy and collect a tax on the full and true value of that 28
portion of taxable property taxable under AS 43.56 as assessed by the Department of 29
Revenue which value, when combined with the value of property otherwise taxable by 30
the municipality, does not exceed the product of the percentage determined in (f) of 31
34-GS3141\A
SB 3001 -8- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
this section of the average per capita assessed full and true value of property in the 1
state multiplied by the number of residents of the taxing municipality. Property 2
subject to tax abatement under AS 43.59.010 or to the alternative volumetric tax 3
levied under AS 43.59.020 is not included in the value of property for the purpose 4
of making the calculation under this subsection. 5
* Sec. 6. AS 31.25.010 is amended to read: 6
Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a 7
public corporation and government instrumentality acting in the best interest and as a 8
fiduciary of the state for the purposes required by AS 31.25.005, located for 9
administrative purposes in the Department of Commerce, Community, and Economic 10
Development, but having a legal existence independent of and separate from the state. 11
The corporation may not be terminated as long as it has bonds, notes, or other 12
obligations outstanding. The corporation may dissolve when no bonds, notes, or other 13
obligations of the corporation or a subsidiary of the corporation are outstanding and 14
the corporation or a subsidiary of the corporation is no longer engaged in the 15
development, financing, construction, or operation of an in -state natural gas pipeline 16
or an Alaska liquefied natural gas project. Upon termination of the corporation, its 17
rights and property pass to the state. 18
* Sec. 7. AS 31.25.040(b) is amended to read: 19
(b) The board shall by regulation adopted under AS 44.62 (Administrative 20
Procedure Act) adopt and publish procedures to govern the procurement by the 21
corporation of supplies, services, professional services, and construction. The 22
procurement procedures must 23
(1) reflect competitive bidding principles and provide vendors 24
reasonable and equitable opportunities to participate in the procurement 25
process; 26
(2) include procurement methods to meet emergency and 27
extraordinary circumstances; 28
(3) comply with the five percent preference under AS 36.30.321(a); 29
and 30
(4) provide for an Alaska veterans' preference that is consistent with 31
34-GS3141\A
SB3001A -9- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
the Alaska veterans' preference in AS 36.30.175. 1
* Sec. 8. AS 31.25.080(a) is amended to read: 2
(a) In addition to other powers granted in this chapter, the corporation may 3
(1) determine the form of ownership and the operating structure of an 4
in-state natural gas pipeline developed by the corporation and may , subject to 5
AS 31.25.120(b), enter into agreements with other persons for joint ownership, joint 6
operation, or both of an in -state natural gas pipeline or an Alaska liquefied natural gas 7
project; 8
(2) plan, finance, construct, develop, acquire, maintain, and operate a 9
pipeline system and other transportation mechanism, including pipelines, compressors, 10
storage facilities, and other related facilities, equipment, and works of public 11
improvement, in the state to facilitate production, transportation, and delivery of 12
natural gas or other related natural resources to the point of consumption or to the 13
point of distribution for consumption; 14
(3) lease or rent facilities, structures, and properties; 15
(4) exercise the power of eminent domain and file a declaration of 16
taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is 17
necessary for an in-state natural gas pipeline or an Alaska liquefied natural gas project; 18
the exercise of powers by the corporation under this paragraph may not exceed the 19
permissible exercise of the powers by the state; 20
(5) acquire, by purchase, lease, or gift, land, structures, real or personal 21
property, an interest in property, a right -of-way, a franchise, an easement, or other 22
interest in land, or an interest in or right to capacity in a pipeline system determined to 23
be necessary or convenient for the development, financing, construction, or operation 24
of an in-state natural gas pipeline project or an Alaska liquefied natural gas project or 25
part of an in -state natural gas pipeline project or an Alaska liquefied natural gas 26
project; 27
(6) subject to AS 31.25.120(b), transfer or otherwise dispose of all or 28
part of an in-state natural gas pipeline project, an Alaska liquefied natural gas project, 29
or an interest in an asset of the corporation; 30
(7) elect to provide transportation of natural gas as a contract carrier, 31
34-GS3141\A
SB 3001 -10- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
common carrier, or otherwise; 1
(8) provide light, water, security, and other services for property of the 2
corporation; 3
(9) conduct hearings to gather and develop data consistent with the 4
purpose and powers of the corporation; 5
(10) advocate for new pipeline capacity before the Federal Energy 6
Regulatory Commission; 7
(11) make and execute agreements, contracts, and other instruments 8
necessary or convenient in the exercise of the powers and functions of the corporation 9
under this chapter, including a contract with a person, firm, corporation, governmental 10
agency, or other entity; 11
(12) sue and be sued in its own name; 12
(13) adopt an official seal; 13
(14) adopt bylaws for the regulation of its affairs and the conduct of its 14
business and adopt regulations and policies in connection with the performance of its 15
functions and duties; 16
(15) employ fiscal consultants, engineers, attorneys, appraisers, and 17
other consultants and employees that may, in the judgment of the corporation, be 18
required and fix and pay their compensation from funds available to the corporation; 19
(16) procure insurance against a loss in connection with its operation; 20
(17) borrow money as provided in this chapter to carry out its 21
corporate purposes and issue its obligations as evidence of borrowing; 22
(18) include in a borrowing the amounts necessary to pay financing 23
charges, to pay interest on the obligations, and to pay the interest, consultant, advisory, 24
and legal fees, and other expenses that are necessary or incident to the borrowing; 25
(19) receive, administer, and comply with the conditions and 26
requirements of an appropriation, gift, grant, or donation of property or money; 27
(20) do all acts and things necessary, convenient, or desirable to carry 28
out the powers expressly granted or necessarily implied in this chapter; 29
(21) invest or reinvest, subject to its contracts with noteholders and 30
bondholders, money or funds held by the corporation, including funds in the [IN -31
34-GS3141\A
SB3001A -11- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
STATE NATURAL GAS PIPELINE FUND (AS 31.25.100) AND THE] Alaska 1
liquefied natural gas project bond fund (AS 31.25.150 [AS 31.25.110]), in obligations 2
or other securities or investments in which banks or trust companies in the state may 3
legally invest funds held in reserves or sinking funds or funds not required for 4
immediate disbursement, and in certificates of deposit or time deposits secured by 5
obligations of, or guaranteed by, the state or the United States; 6
(22) enter into, as it determines to be necessary or appropriate, any 7
swap or hedge, cap, or other contract providing for payments based on levels of or 8
changes in interest rates or indices or in the cost or price of any commodity, supply, or 9
expense expected to be used or incurred in connection with the acquisition, 10
construction, or operation of any facility or property owned, leased, or operated by the 11
corporation, or an option with respect to any of the foregoing; 12
(23) except as provided in (g) of this section, acquire an ownership or 13
participation interest in an Alaska liquefied natural gas project, natural gas treatment 14
facilities, natural gas pipeline facilities, liquefaction facilities, marine terminal 15
facilities related to the infrastructure of an Alaska liquefied natural gas project, or an 16
entity or joint venture that has an ownership interest in or is engaged in the planning, 17
financing, acquisition, maintenance, construction, and operation of an Alaska liquefied 18
natural gas project; 19
(24) after consultation with the commissioner of revenue and the 20
commissioner of natural resources, enter into contracts relating to an Alaska liquefied 21
natural gas project, including contracts for services related to operation, marketing, 22
transportation, gas treatment, marine terminal operation, or liquefaction. 23
* Sec. 9. AS 31.25.080 is amended by adding a new subsection to read: 24
(h) The corporation shall, to the maximum extent possible, use contractors and 25
suppliers in the state in order to benefit from the experience of workers and businesses 26
in the state in arctic engineering and construction. 27
* Sec. 10. AS 31.25.090(f) is amended to read: 28
(f) Subject to the restrictions in this section, the [THE] corporation may 29
enter into confidentiality agreements necessary to acquire or provide information to 30
carry out its functions. If a state agency determines that a law or provision of a 31
34-GS3141\A
SB 3001 -12- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
contract to which the state agency is a party requires the state agency to preserve the 1
confidentiality of the information and that delivering the information to the 2
corporation would violate the confidentiality provision of that law or contract, the state 3
agency shall 4
(1) identify the applicable law or contract provision to the corporation; 5
and 6
(2) obtain the consent of the person who has the right to waive the 7
confidentiality of the information under the applicable law or contract provision before 8
the state agency transfers the information to the corporation. 9
* Sec. 11. AS 31.25.090 is amended by adding new subsections to read: 10
(j) A confidentiality agreement entered into under (f) of this section may not 11
(1) prevent compliance with an administrative or court order 12
mandating disclosure; 13
(2) make confidential contract terms, or prospective contract terms, 14
that could extend to or encumber the state with fiscal or performance liability, 15
obligation, or risk, either directly or indirectly; 16
(3) except as provided in (k) of this section, make confidential 17
information that may lead to 18
(A) a significant fiscal liability, obligation, or risk to the state; 19
or 20
(B) appropriations or other state funding or in -kind payments 21
or services from the state; 22
(4) make confidential the ownership or management structure of a 23
subsidiary of the corporation; or 24
(5) make confidential information related to the existence of a state 25
interest option under AS 31.25.125. 26
(k) A confidentiality agreement entered into under (f) of this section may 27
make confidential specific known or reasonably anticipated project economics or costs 28
related to the Alaska liquefied natural gas project only if 29
(1) one or more parties to the agreement reasonably assert that release 30
of the project economics or costs would cause commercial or competitive harm to an 31
34-GS3141\A
SB3001A -13- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
entity involved in the Alaska liquefied natural gas project; and 1
(2) the parties to the contract agree to release reasonable estimated 2
ranges or a summarization of project economics and costs sufficient for a legislator or 3
a public agent to assess the fiscal liability, obligation, or risk to the state, to the extent 4
that the ranges or summarization does not cause commercial or competitive harm to an 5
entity involved in the Alaska liquefied natural gas project. 6
(l) In this section, 7
(1) "public agent" means 8
(A) a public agency, as defined in AS 40.25.220, or an agent or 9
contractor of a public agency; 10
(B) an agent or contractor of a member of the legislature or of a 11
legislative committee; 12
(2) "revenue -generating project" has the meaning given in 13
AS 31.25.125(i). 14
* Sec. 12. AS 31.25.120 is amended to read: 15
Sec. 31.25.120. Creation of subsidiaries. The corporation may create 16
subsidiary corporations for the purpose of developing, constructing, operating, and 17
financing in-state natural gas pipeline projects or other transportation mechanisms; for 18
the purpose of aiding in the development, construction, operation, and financing of in -19
state natural gas pipeline projects; or for the purpose of acquiring natural gas from the 20
North Slope, and natural gas from other regions of the state, including the state's outer 21
continental shelf, and making that natural gas available to markets in the state, 22
including the delivery of natural gas, including propane and other hydrocarbons 23
associated with natural gas other than oil, to coastal communities in the state, or for 24
export. Subject to the limitations for the use of money appropriated to [THE IN -25
STATE NATURAL GAS PIPELINE FUND (AS 31.25.100) AND] the Alaska 26
liquefied natural gas project bond fund ( AS 31.25.150 [AS 31.25.110]), the 27
corporation may transfer assets of the corporation to a subsidiary created under this 28
section. A subsidiary created under this section may borrow money and issue bonds as 29
evidence of that borrowing and has all the powers of the corporation that the 30
corporation grants to it. Unless otherwise provided by the corporation, the debts, 31
34-GS3141\A
SB 3001 -14- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
liabilities, and obligations of a subsidiary corporation created under this section are not 1
the debts, liabilities, or obligations of the corporation. 2
* Sec. 13. AS 31.25.120 is amended by adding a new subsection to read: 3
(b) The corporation may transfer, sell, or otherwise dispose of an ownership or 4
management interest in a subsidiary of the corporation only after the legislature has 5
had the opportunity to disapprove the issuance of the transfer, sale, or disposition. 6
Legislative disapproval under this subsection must be by law. The corporation shall 7
notify the presiding officer of each house if the corporation intends to transfer, sell, or 8
otherwise dispose of an ownership or management interest in a subsidiary of the 9
corporation. The legislature shall have 90 days to consider the transfer, sale, or 10
disposition. If the legislature does not disapprove the transfer, sale, or disposition of an 11
ownership interest within 90 days, the corporation may move forward with the 12
transfer, sale, or disposition. 13
* Sec. 14. AS 31.25 is amended by adding a new section to read: 14
Sec. 31.25.125. Involvement in revenue -generating projects. (a) If the 15
corporation negotiates with another entity for participation by the corporation in a 16
revenue-generating project, the corporation shall negotiate an option for the state or, 17
subject to (h) of this section, a municipality to acquire an interest in the project. The 18
corporation shall immediately notify the president of the senate, the speaker of the 19
house of representatives, and the chairs of the finance committee of each house of the 20
legislature on each occasion that an option for the state is available for consideration 21
by the legislature under (b)(1) of this section. 22
(b) An option exercisable under this section 23
(1) by the state must, before being exercised, be approved by the 24
legislature by law; and 25
(2) must allow the state or a municipality at least 180 days to exercise 26
the option after notification of the legislature under (d) of this section. 27
(c) At the request of the legislature, a state agency shall cooperate with and 28
assist the legislature in determining whether to approve under (b)(1) of this section the 29
terms of an option for the state negotiated under (a) of this section. 30
(d) The corporation shall immediately notify the president of the senate, the 31
34-GS3141\A
SB3001A -15- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
speaker of the house of representatives, and the chairs of the finance committee of 1
each house of the legislature on each occasion that the state may exercise an option 2
negotiated under (a) of this section. 3
(e) The state may not acquire an interest in a revenue -generating project under 4
this section unless the interest is approved by the legislature by law. When making an 5
investment decision under this section, the legislature shall act as a prudent investor. 6
(f) The Department of Revenue shall cooperate with and assist the legislature 7
in determining whether to acquire an interest in a revenue -generating project under (e) 8
of this section by exercising an option negotiated under (a) of this section, including 9
by identifying potential funding sources for exercising the option and potential fiscal 10
effects on the state. If requested by the legislature, another state agency shall cooperate 11
with and assist the legislature with making a determination under (e) of this section. 12
(g) The corporation, and any other entity participating in a revenue -generating 13
project, shall 14
(1) cooperate with and assist the legislature in determining whether to 15
approve the terms of an option negotiated under (a) of this section or to acquire an 16
interest in the project by exercising an option negotiated under this section; 17
(2) provide information requested by the legislature related to the 18
project, including 19
(A) information necessary for the legislature to act as a prudent 20
investor; and 21
(B) financial records of or related to the revenue -generating 22
project; and 23
(3) ensure that at least one representative of the corporation and of 24
each participating entity are available to testify during public hearings of legislative 25
committees requesting testimony. 26
(h) If the corporation negotiates with another entity for participation by the 27
corporation in a revenue -generating project under (a) of this section , the corporation 28
shall provide an opportunity for municipalities in the state to purchase a portion of the 29
corporation's right to acquire additional equity interest in the natural gas project not 30
exercised by the corporation, through an entity managed by the corporation. A 31
34-GS3141\A
SB 3001 -16- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
municipality may not acquire a direct interest in a revenue-generating project under 1
this subsection. 2
(i) In this section, 3
(1) "corporation" includes a subsidiary of the corporation; 4
(2) "revenue -generating project" means a project, entity ownership, 5
legal business arrangement, partnership, joint venture, or other commercial endeavor 6
expected to generate revenue. 7
* Sec. 15. AS 31.25.130(a) is amended to read: 8
(a) Except as otherwise provided in this chapter and except for 9
AS 44.62.310 - 44.62.319 (Open Meetings Act), AS 44.62 (Administrative Procedure 10
Act) does not apply to this chapter. The corporation shall make available to members 11
of the public copies of the regulations adopted under (b) - (e) of this section. 12
* Sec. 16. AS 31.25.140(c) is amended to read: 13
(c) To further ensure effective budgetary decision making by the legislature, 14
the board shall 15
(1) annually review the corporation's assets, including the assets of 16
[THE IN-STATE NATURAL GAS PIPELINE FUND UNDER AS 31.25.100 AND] 17
the Alaska liquefied natural gas project bond fund under AS 31.25.150 18
[AS 31.25.110], to determine whether assets of the corporation exceed an amount 19
required to fulfill the purposes of the corporation as defined in this chapter; in making 20
its review, the board shall determine whether, and to what extent, assets in excess of 21
the amount required to fulfill the purposes of the corporation during the next fiscal 22
year are available without 23
(A) breaching an agreement entered into by the corporation; 24
(B) materially impairing the operations or financial integrity of 25
the corporation; or 26
(C) materially affecting the ability of the corporation to fulfill 27
the purposes of the corporation as defined in this chapter; 28
(2) specifically identify in the corporation's assets the amounts that the 29
board believes are necessary to meet the requirements of (1)(C) of this subsection; and 30
(3) present to the legislature by January 10 of each year a complete 31
34-GS3141\A
SB3001A -17- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
accounting of all assets of the corporation, including assets of [THE IN -STATE 1
NATURAL GAS PIPELINE FUND UNDER AS 31.25.100 AND] the Alaska 2
liquefied natural gas project bond fund under AS 31.25.150 [AS 31.25.110], and a 3
report of the review and determination made under (1) and (2) of this subsection; the 4
accounting shall be audited by an independent outside auditor. 5
* Sec. 17. AS 31.25 is amended by adding new sections to article 1 to read: 6
Sec. 31.25.145. Accounting. (a) The corporation shall deposit into separate 7
accounts in the general fund revenue 8
(1) generated by a subsidiary of the corporation; and 9
(2) resulting from an option negotiated under AS 31.25.125. 10
(b) The legislature may appropriate the annual estimated amount necessary for 11
the payment of obligations associated with bonds issued by the corporation to the 12
Alaska liquefied natural gas project bond fund (AS 31.25.150). 13
Sec. 31.25.150. Alaska liquefied natural gas project bond fund. The Alaska 14
liquefied natural gas project bond fund is established in the corporation and consists of 15
money appropriated to the fund. The corporation shall determine fund management 16
and may contract with the Department of Revenue for fund management. The 17
corporation may use money in the fund without further appropriation for the purpose 18
of paying obligations associated with bonds issued by the corporation. 19
* Sec. 18. AS 31.25.160 is amended by adding a new subsection to read: 20
(g) The corporation shall immediately notify the president of the senate, the 21
speaker of the house of representatives, and the chairs of the finance committee of 22
each house of the legislature on each occasion on which the corporation intends to 23
issue bonds. The corporation, or a subsidiary of the corporation, may issue bonds only 24
after the legislature approves the issuance of the bonds by law. The legislature shall 25
have 90 days after the notification under this subsection to approve the issuance of the 26
bonds. If the legislature does not approve the issuance of the bonds within 90 days, the 27
corporation may not issue the bonds. The limitation in this subsection does not apply 28
to refunding bonds. Refunding bonds may be issued without further approval by the 29
legislature in a principal amount sufficient to provide funds for the payment of all 30
bonds to be refunded by the refunding bonds and, in addition, for the payment of all 31
34-GS3141\A
SB 3001 -18- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
other amounts that the corporation considers appropriate in connection with the 1
refunding, including expenses incident to the redeeming, calling, retiring, or paying of 2
the outstanding bonds, the funding of reserves, and the issuance of the refunding 3
bonds. 4
* Sec. 19. AS 31.25.270 is amended by adding new subsections to read: 5
(d) By February 15 and August 15 of each year, the board shall deliver a 6
report on natural gas pipeline projects in the state to the commissioner of revenue, 7
notify the governor and the legislature that the report is available, and publish notice to 8
the public on the Alaska Online Public Notice System under AS 44.62.175 that the 9
report is available on the corporation's Internet website. The board shall prepare the 10
report regardless of whether the corporation owns or operates the projects. The report 11
must 12
(1) provide a current status of natural gas projects in the state, 13
including construction status, projected timeline for completion, and a 14
description of any remaining phases of construction; 15
(2) provide a qualitative assessment and update of the timeline, budget, 16
and cost containment progress since the last report; 17
(3) provide an assessment of the effect of the projects on the state labor 18
market, including 19
(A) the number of jobs created or affected, listed by region of 20
the state; 21
(B) the total estimated payroll dollars attributable to the 22
projects since the last report; and 23
(C) the proportion of resident and nonresident employees or 24
contractors working on the projects; 25
(4) set out secured intake and offtake contracts, by annual volume; and 26
(5) provide total capital expenditures for each major component of the 27
projects; an entity invested in a project with the corporation shall provide to the 28
corporation the information necessary to meet the requirements of this paragraph; in 29
this paragraph, "capital expenditure" means a cost that is properly chargeable to a 30
capital account under federal income tax principals, as determined at the time the 31
34-GS3141\A
SB3001A -19- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
property is paid for. 1
(e) The corporation shall maintain on the corporation's Internet website a 2
publicly accessible dashboard for project accountability for each natural gas pipeline 3
project. The dashboard must 4
(1) show the status of each major phase of the project, including front -5
end and preliminary front-end engineering design, permits, financing, final investment 6
decision, notice to proceed, procurement, construction, startup, commercial 7
operations, phase two final investment decision, expansion, and decommissioning 8
planning; 9
(2) if the state exercises an option to invest in the natural gas pipeline 10
project, include the public cost estimate range, estimate class if available, schedule 11
baseline, current forecast, and summary explanation of material changes or variances; 12
(3) include a material risk register and mitigation status; 13
(4) provide the status of permitting and rights-of-way; 14
(5) include information on 15
(A) gas supply and offtake status by aggregate annual volume; 16
and 17
(B) in-state gas delivery and ratepayer protection status; 18
(6) include the status of the spur line, as defined in AS 42.05.438; 19
(7) include the status of community impact grants and mitigation; 20
(8) provide information regarding the number and proportion of state 21
resident hires and resident contractor or supplier participation; 22
(9) be updated at least monthly before commencement of commercial 23
operations of the natural gas pipeline project and at least quarterly thereafter; and 24
(10) be updated within 10 business days after the corporation becomes 25
aware of a material change affecting cost, schedule, financing, permitting, in -state gas 26
delivery, ratepayer protection, community impacts, state fiscal exposure, or other 27
public-interest issue affecting the natural gas pipeline project. 28
(f) The corporation may use reasonable redactions, estimated ranges, 29
summaries, or status indicators to protect confidential or commercially sensitive 30
information on the dashboard required by (e) of this section. 31
34-GS3141\A
SB 3001 -20- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
(g) The corporation shall preserve dashboard updates made under (e) of this 1
section in a public archive on the corporation's Internet website, with date -stamped 2
changes and version history. 3
(h) A project developer shall provide to the corporation the information 4
required for the dashboard under (e) of this section. In this subsection, "project 5
developer" means an entity responsible for coordinating the financing and construction 6
of a natural gas pipeline project. 7
(i) In this section, 8
(1) "natural gas pipeline project" includes the Alaska liquefied natural 9
gas project or a similar project; 10
(2) "major component of the project" means a natural gas treatment 11
facility, carbon capture or underground storage facility, liquefaction facility, import or 12
export facility, or any other major facility associated with a natural gas pipeline 13
project. 14
* Sec. 20. AS 31.25 is amended by adding a new section to read: 15
Sec. 31.25.285. Legislative notification of ownership change. (a) The 16
corporation shall promptly notify the president of the senate, the speaker of the house 17
of representatives, and the chairs of the finance committee of each house of the 18
legislature if 19
(1) the corporation becomes aware that an entity in a legal relationship 20
with the corporation, or a subsidiary of the corporation, plans to make a significant 21
change in ownership structure; or 22
(2) an entity in a legal relationship with the corporation, or a subsidiary 23
of the corporation, has a significant change in ownership structure. 24
(b) In this section, "legal relationship" means a partnership, joint venture, joint 25
ownership agreement, or other legally binding business arrangement 26
(1) of which the corporation, or a subsidiary of the corporation, has at 27
least a 10 percent interest; or 28
(2) that has an interest in a third entity in which the corporation, or a 29
subsidiary of the corporation, also has at least a 10 percent interest; and 30
(3) that formed for the purpose of shared ownership or shared 31
34-GS3141\A
SB3001A -21- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
management of, or pooling of resources for, an entity in which the corporation, or a 1
subsidiary of the corporation, has an ownership or management interest. 2
* Sec. 21. AS 31.25.390 is amended by adding a new paragraph to read: 3
(8) "subsidiary of the corporation" means a subsidiary controlled by 4
the corporation. 5
* Sec. 22. AS 37.05 is amended by adding a new section to article 6 to read: 6
Sec. 37.05.615. Alaska affordable heating fuel fund. (a) The Alaska 7
affordable heating fuel fund is created as a separate fund in the state treasury. The 8
fund consists of the amount determined and deposited in the fund under (b) of this 9
section and interest earned on the fund balance. 10
(b) The amount to be deposited in (a) of this section is 20 percent of the 11
revenue received from the state's royalty gas transported in an Alaska liquefied natural 12
gas project that remains after the payment to the Alaska permanent fund under 13
AS 37.13.010. The deposit made under this section may not interfere with the deposit 14
to the Alaska affordable energy fund (AS 37.05.610) or the contribution to the public 15
school trust fund (AS 37.14.150). 16
(c) The legislature may make appropriations from the Alaska affordable 17
heating fuel fund to fund programs that will reduce the cost of heating fuel in areas of 18
the state that are not expected to have or do not have direct access to a North Slope 19
natural gas pipeline. 20
(d) Nothing in this section creates a dedicated fund. 21
(e) In this section, 22
(1) "Alaska liquefied natural gas project" has the meaning given in 23
AS 31.25.390; 24
(2) "North Slope natural gas pipeline" has the meaning given in 25
AS 42.06.630. 26
* Sec. 23. AS 42.05 is amended by adding new sections to read: 27
Sec. 42.05.435. Alaska liquefied natural gas project gas supply contracts. 28
(a) The commission may not approve a gas supply contract between a public utility 29
and an owner or operator of a gas pipeline advanced, operated, or owned, in whole or 30
in part, by the Alaska Gasline Development Corporation, or a subsidiary of the 31
34-GS3141\A
SB 3001 -22- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
corporation, that obligates the utility to pay more than $16 for each 1,000,000 British 1
thermal units of natural gas. 2
(b) The dollar amount in (a) of this section shall be adjusted each year for 3
inflation under the agreed-on escalation factor in the terms of the gas supply contract. 4
(c) In this section, "gas pipeline" has the meaning given in AS 31.25.390. 5
Sec. 42.05.438. Alaska liquefied natural gas project utility contract 6
requirements. (a) In addition to other approval requirements under this chapter, a 7
public utility must obtain the approval of the commission to recover costs related to a 8
contract with a duration of more than one year that reserves capacity in a gas pipeline 9
or liquefied natural gas plant. In this subsection, "contract" includes any agreement 10
that contains conditions that must be satisfied before the agreement becomes effective. 11
(b) The commission may not approve a gas supply contract for natural gas 12
transported by a gas pipeline, or a contract that requires approval under (a) of this 13
section, that 14
(1) requires the utility's customers to assume cost overruns from 15
construction of an Alaska liquefied natural gas project; or 16
(2) increases a commission-approved rate if throughput decreases. 17
(c) In this section, 18
(1) "Alaska liquefied natural gas project" has the meaning given in 19
AS 31.25.390; 20
(2) "gas pipeline" and "liquefied natural gas plant" mean a gas pipeline 21
or liquefied natural gas plant associated with an Alaska liquefied natural gas project; 22
"gas pipeline" does not include a spur line; 23
(3) "spur line" 24
(A) means 25
(i) a natural gas transmission or lateral line that 26
branches from the main gas pipeline for the primary purpose of 27
delivering natural gas to a local community or utility distribution 28
system; and 29
(ii) compressing and metering equipment and 30
interconnection facilities related to the transmission or lateral line 31
34-GS3141\A
SB3001A -23- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
described in (i) of this subparagraph; 1
(B) does not include infrastructure used for the export of 2
natural gas or lateral lines not necessary for delivering natural gas to a local 3
community or utility distribution system. 4
* Sec. 24. AS 43.56.010(a) is amended to read: 5
(a) Except as provided in AS 43.59.010 and 43.59.020, an [AN] annual tax 6
of 20 mills is levied each tax year beginning January 1, 1974, on the full and true 7
value of taxable property taxable under this chapter. 8
* Sec. 25. AS 43.56.020(d) is amended to read: 9
(d) Taxable property subject to tax abatement under AS 43.59.010 or the 10
volumetric tax imposed under AS 43.59.020 [OF A NATURAL GAS PIPELINE 11
PROJECT OWNED OR FINANCED BY THE ALASKA GASLINE 12
DEVELOPMENT CORPORATION OR A JOINT VENTURE, PARTNERSHIP, OR 13
OTHER ENTITY THAT INCLUDES THE ALASKA GASLINE DEVELOPMENT 14
CORPORATION] is exempt from state taxes levied or authorized under 15
AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) 16
[BEFORE THE COMMENCEMENT OF COMMERCIAL OPERATIONS OF THAT 17
NATURAL GAS PIPELINE PROJECT. IN THIS SUBSECTION, 18
"COMMENCEMENT OF COMMERCIAL OPERATIONS" MEANS THE FIRST 19
FLOW OF NATURAL GAS IN THE PROJECT THAT GENERATES REVENUE 20
TO THE OWNERS OF THE NATURAL GAS PIPELINE PROJECT]. 21
* Sec. 26. AS 43 is amended by adding a new chapter to read: 22
Chapter 59. Natural Gas Project Temporary Tax Abatement and Volumetric Tax. 23
Sec. 43.59.010. Temporary tax abatement. Property of a natural gas project 24
is not subject to the taxes levied under AS 29.45.080, AS 43.56.010, or AS 43.59.020 25
during the temporary tax abatement period. The abatement period begins on the 26
effective date of this section and ends on the earlier of 27
(1) the first day of a consecutive 30 -day period in which the natural 28
gas project achieves a throughput of 500,000,000 cubic feet of natural gas a day, 29
calculated as a rolling average over the 30-day period; or 30
(2) five years after the date of commencement of commercial 31
34-GS3141\A
SB 3001 -24- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
operations of phase one of the natural gas project. 1
Sec. 43.59.020. Imposition of alternative volumetric tax. (a) The owner of 2
property subject to tax under this section shall pay an alternative volumetric tax on the 3
throughput of the property. The alternative volumetric tax applies beginning on the 4
day after the expiration of the abatement period under AS 43.59.010. 5
(b) The volumetric tax is 6
(1) $0.062 for each 1,000 cubic feet of natural gas before 7
commencement of commercial operations of a liquefied natural gas plant related to the 8
natural gas project; 9
(2) $0.106 for each 1,000 cubic feet of natural gas on and after 10
commencement of commercial operations of a liquefied natural gas plant related to the 11
natural gas project; 12
(3) beginning 10 years after commencement of commercial operations 13
of a liquefied natural gas plant related to the natural gas project, in addition to the 14
amount collected under (2) of this subsection, an additional $0.106 for each 1,000 15
cubic feet of natural gas; 16
(4) beginning January 1, 2060, in addition to the amounts collected 17
under (2) and (3) of this subsection, an additional $0.212 for each 1,000 cubic feet of 18
natural gas. 19
(c) Beginning after the first year the tax applies to throughput of a natural gas 20
project under (b)(1) of this section, the tax rates under (b) of this section shall be 21
adjusted on January 1 of each year for inflation, using 100 percent of the average of 22
the annual change over the preceding five calendar years in the Consumer Price Index 23
for all urban consumers for urban Alaska, as determined by the United States 24
Department of Labor, Bureau of Labor Statistics. However, the annual adjustment 25
under this subsection must increase the rates by at least one percent and not more than 26
three percent. Each tax rate under (b) of this section shall be adjusted for inflation 27
under this subsection even if the tax rate does not yet apply. 28
(d) An owner of property subject to tax under this section shall, on or before 29
the last day of each month, file a return with the department and with each 30
municipality collecting tax under this section. The return must state the throughput, in 31
34-GS3141\A
SB3001A -25- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
cubic feet of natural gas for each day, of property subject to tax for the month 1
preceding the month in which the return is due and include an installment payment for 2
the month of the return. An installment payment is considered delinquent if the 3
payment is not received by the department on or before the last day of each month. 4
(e) The tax levied under this section is due annually, on the calendar year. The 5
owner of the property shall, on or before April 30 each year, pay any remaining tax 6
due under this section for tax accruing from throughput in the previous calendar year. 7
A tax payment under this subsection is considered delinquent if the payment is not 8
received by the department on or before April 30 each year. 9
(f) Notwithstanding AS 43.05.220, if a tax payment or installment payment 10
required under this section is delinquent, the department or a municipality shall assess 11
a penalty of 15 percent of the amount of delinquent taxes and interest on the 12
delinquent taxes, exclusive of penalty, at the rate specified in AS 43.05.225. 13
Sec. 43.59.030. Collection and allocation of alternative tax. (a) The 14
department shall levy and collect the alternative volumetric tax imposed by this 15
chapter that is allocated to the state. Unless otherwise elected by the municipality 16
under (h) of this section, a municipality that is not in the unorganized borough may 17
levy and collect the portion of the alternative volumetric tax imposed by this chapter 18
that is allocated to the municipality. The amount of tax allocated to each municipality 19
and to the state is determined under (b) - (f) of this section. 20
(b) Before commencement of commercial operations of a liquefied natural gas 21
plant related to a natural gas project, 22
(1) six percent of the tax under AS 43.59.020(b)(1) is allocated to the 23
North Slope Borough; 24
(2) 47 percent of the tax under AS 43.59.020(b)(1) is allocated to the 25
areas of the state through which a gas pipeline runs; and 26
(3) 47 percent of the tax under AS 43.59.020(b)(1) is allocated to the 27
state for community assistance payments. 28
(c) On and after the commencement of commercial operations of a liquefied 29
natural gas plant related to a natural gas project, 30
(1) 48.4 percent of the tax under AS 43.59.020(b)(2) is allocated to the 31
34-GS3141\A
SB 3001 -26- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
Kenai Peninsula Borough; 1
(2) 27 percent of the tax under AS 43.59.020(b)(2) is allocated to the 2
North Slope Borough; 3
(3) 5.6 percent of the tax under AS 43.59.020(b)(2) is allocated to the 4
state; 5
(4) 9.5 percent of the tax under AS 43.59.020(b)(2) is allocated to the 6
areas of the state through which a gas pipeline runs; 7
(5) 9.5 percent of the tax under AS 43.59.020(b)(2) is allocated to the 8
state for community assistance payments; 9
(6) 100 percent of the tax under AS 43.59.020(b)(3) is allocated to the 10
state for community assistance payments; and 11
(7) 100 percent of the tax under AS 43.59.020(b)(4) is allocated to the 12
state. 13
(d) For purposes of (b)(2) and (c)(4) of this section, the portion allocated to 14
the state is equal to the proportion of the gas pipeline in the unorganized borough, and 15
the portion allocated to each municipality that is not in the unorganized borough is 16
equal to the proportion of the gas pipeline in the municipality. To determine the 17
proportional distribution under this subsection, the length of pipeline in the 18
unorganized borough or a municipality that is not in the unorganized borough is 19
divided by the total length of the pipeline. 20
(e) Each year, the legislature may appropriate the amount allocated to the state 21
under (b)(3), (c)(5), and (c)(6) of this section to the municipalities, communities, and 22
reserves in the unorganized borough, distributed as community assistance payments in 23
accordance with AS 29.60.855 and 29.60.860. 24
(f) The amount of tax allocated to the state under (c)(3) and (7) of this section 25
shall be deposited into the general fund. 26
(g) Each month, the department shall report to a municipality collecting tax 27
under this section the amount of tax allocated to the municipality for the preceding 28
month. 29
(h) A municipality may by ordinance elect for the department to collect, on 30
behalf of the municipality, the portion of the tax levied under this chapter that is 31
34-GS3141\A
SB3001A -27- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
allocated to the municipality. 1
Sec. 43.59.040. Administrative appeals; distraint of property. (a) A 2
decision by the department regarding the imposition or calculation of the tax levied 3
under AS 43.59.020 may be appealed to the department for an informal conference 4
under AS 43.05.240, and a final decision may be appealed to the office of 5
administrative hearings under AS 43.05.405. 6
(b) The remedy of distraint of property set out in AS 43.20.270 applies to the 7
tax levied in this chapter. However, only the property subject to tax under 8
AS 43.59.020 may be distrained. 9
Sec. 43.59.050. Termination of status; application. (a) The tax abatement 10
under AS 43.59.010 and the alternative volumetric tax under AS 43.59.020 do not 11
apply to a natural gas project if, by 12
(1) January 1, 2028, a final investment decision has not been made on 13
phase one of the natural gas project; 14
(2) January 1, 2037, at least one major component of the natural gas 15
project has not been completed and commencement of commercial operations of that 16
component has not occurred. 17
(b) If, under (a) of this section, neither the tax abatement under AS 43.59.010 18
nor the alternative volumetric tax under AS 43.59.020 applies to property of a natural 19
gas project, the property is subject to all other state and municipal taxes on taxable 20
property, including taxes levied under AS 29.45.080 and AS 43.56.010. 21
(c) In this section, 22
(1) "commencement of construction" means the 23
(A) laying and welding together in an excavated trench 24
multiple sections of steel pipe that are intended for use as part of the gas 25
pipeline; and 26
(B) establishment of at least one work camp along the gas 27
pipeline route that is intended to provide crew quarters and services during 28
construction of the gas pipeline; 29
(2) "final investment decision" means a final affirmative decision of a 30
natural gas project developer or a subsidiary of the primary project owner to proceed 31
34-GS3141\A
SB 3001 -28- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
from the planning phase to the implementation and construction phase of phase one of 1
the natural gas project; a final investment decision has not been made until the project 2
developer or a subsidiary of the primary project owner has 3
(A) obtained firm commitments for all debt and financing 4
required to construct phase one of the project; 5
(B) entered into binding engineering, procurement, and 6
construction agreements for construction of phase one of the project; 7
(C) entered into offtake agreements sufficient to underwrite 8
construction and operation of phase one of the project; 9
(D) completed a cost estimate for phase one of the project; 10
(E) completed a final resource report of phase one of the 11
project. 12
Sec. 43.59.060. Reporting; regulations. (a) The owner of property subject to 13
tax under this chapter shall, at the request of the department, provide to the department 14
the information necessary to calculate the tax under this chapter. Notwithstanding 15
AS 40.25.100(a) and AS 43.05.230, the department shall hold confidential proprietary 16
information provided to the department under this subsection at the request of the 17
owner. In this subsection, "proprietary information" means information that, if 18
publicly disclosed, would adversely affect the competitive position of the owner or 19
materially diminish the commercial value of the information to the owner. 20
(b) The department shall adopt regulations under AS 44.62 (Administrative 21
Procedure Act) to implement this chapter, including procedures for 22
(1) measuring throughput; 23
(2) throughput reporting; 24
(3) calculating the rolling average of throughput; and 25
(4) allocating the tax levied under this chapter to the state and 26
municipalities under AS 43.59.030. 27
Sec. 43.59.100. Definitions. In this chapter, 28
(1) "commencement of commercial operations" means the first flow of 29
natural gas through a natural gas project or a component of a natural gas project, as 30
applicable, that treats, transports, or processes a commercial amount of natural gas; 31
34-GS3141\A
SB3001A -29- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
(2) "gas pipeline" 1
(A) means a main natural gas pipeline from the outlet flange of 2
the gas treatment plant on the North Slope to 3
(i) for purposes of phase one of the project, the inlet 4
flange of infrastructure providing natural gas to the Southcentral region 5
of the state; 6
(ii) for purposes of phase two of the project, the inlet 7
flange of the liquefied natural gas plant located in the Kenai Peninsula 8
region of the state; 9
(B) does not include any gas lines downstream of any offtake 10
point between a gas treatment plant and a liquefied natural gas plant; 11
(3) "gas treatment plant" means a facility and the related activities 12
required to receive natural gas from a Prudhoe Bay unit gas transmission line, a Point 13
Thomson unit gas transmission line, or other facilities, to treat the natural gas to 14
pipeline specifications, to dispose of or deliver byproducts, to deliver liquid products 15
for further transportation, and to deliver treated natural gas for transportation through a 16
gas pipeline; 17
(4) "liquefied natural gas plant" means a facility for liquefying natural 18
gas and includes structures, equipment, underlying land rights, and other associated 19
systems, storage, and facilities for off-loading liquefied natural gas; 20
(5) "natural gas project" and "project" means a natural gas project that 21
includes, collectively, a Prudhoe Bay unit gas transmission line, a Point Thomson unit 22
gas transmission line, a gas pipeline, a gas treatment plant, a liquefied natural gas 23
plant, and a marine terminal; in this paragraph, 24
(A) "marine terminal" means a terminal and those facilities 25
required to receive liquefied natural gas from the boundary of the liquefied 26
natural gas plant for marine transportation, including auxiliary vessels used in 27
the operation of the terminal; 28
(B) "Point Thomson unit gas transmission line" means a natural 29
gas transmission line from the outlet flange of the Point Thomson unit 30
production facility to the inlet flange of the gas treatment plant; and 31
34-GS3141\A
SB 3001 -30- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
(C) "Prudhoe Bay unit gas transmission line" means a natural 1
gas transmission line from the outlet flange of the Prudhoe Bay unit central gas 2
facility to the inlet flange of the gas treatment plant; 3
(6) "phase one" means a phase of a natural gas project that includes a 4
gas pipeline and other related infrastructure required for the transportation of natural 5
gas from the North Slope to the Southcentral region of the state; 6
(7) "phase two" means a phase of a natural gas project that includes a 7
gas treatment plant, a marine terminal, a liquefied natural gas plant, and other related 8
infrastructure required for the export of natural gas; 9
(8) "throughput" 10
(A) means 11
(i) the volume of natural gas measured by summing all 12
volumes sold or otherwise delivered at each outlet or offtake point 13
along the gas pipeline; and 14
(ii) natural gas consumed as fuel for the operation of a 15
liquefaction facility; 16
(B) does not include natural gas consumed as fuel for pipeline 17
compression. 18
* Sec. 27. AS 44.33 is amended by adding a new section to read: 19
Article 13A. Natural Gas Project Municipal Impact Grant Fund. 20
Sec. 44.33.850. Natural gas project municipal impact grant fund . (a) The 21
natural gas project municipal impact grant fund is established in the department. The 22
fund consists of money received by the state from a project developer of an Alaska 23
liquefied natural gas project and appropriated to the fund by the legislature. 24
(b) The department shall use the money appropriated to the fund to timely 25
distribute grants to impacted municipalities for activities, services, or facilities that 26
offset verified actual or reasonably expected effects of construction of a gas pipeline. 27
When administering grants under this subsection, the department shall prioritize grant 28
awards based on the needs of the impacted municipality, the severity of the effects 29
caused by construction of the pipeline, and the correlation of the effect to the 30
construction of the pipeline. The department shall adopt regulations governing the 31
34-GS3141\A
SB3001A -31- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
distribution of grants under this subsection. 1
(c) In this section, 2
(1) "department" means the Department of Commerce, Community, 3
and Economic Development; 4
(2) "fund" means the natural gas project municipal impact grant fund 5
established in (a) of this section; 6
(3) "gas pipeline" has the meaning given in AS 31.25.390; 7
(4) "impacted municipality" means the North Slope Borough, 8
Fairbanks North Star Borough, Denali Borough, Municipality of Anchorage, 9
Matanuska-Susitna Borough, and Kenai Peninsula Borough; 10
(5) "project developer" means an entity responsible for coordinating 11
the financing and construction of a natural gas project. 12
* Sec. 28. AS 31.25.100 and 31.25.110 are repealed. 13
* Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to 14
read: 15
REQUIRED REPORT: PHASE TWO OF THE ALASKA LIQUEFIED NATURAL 16
GAS PROJECT. (a) Before a final investment decision is made on phase two of the Alaska 17
liquefied natural gas project, the Alaska Gasline Development Corporation shall deliver a 18
report to the senate secretary and the chief clerk of the house of representatives and shall 19
notify the legislature that the report is available. The report must include 20
(1) a discussion and review of the effects and effectiveness of this Act on the 21
Alaska liquefied natural gas project; 22
(2) if applicable, suggestions for additional changes to law related to the 23
Alaska liquefied natural gas project, before implementation of phase two. 24
(b) In this section, 25
(1) "Alaska liquefied natural gas project" has the meaning given in 26
AS 31.25.390; 27
(2) "final investment decision" means a final affirmative decision of a natural 28
gas project developer or a subsidiary of the primary project owner to proceed from the 29
planning phase to the implementation and construction phase of phase two of the Alaska 30
liquefied natural gas project; a final investment decision has not been made until the project 31
34-GS3141\A
SB 3001 -32- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
developer or a subsidiary of the primary project owner has 1
(A) obtained firm commitments for all debt and financing required to 2
construct phase two of the project; 3
(B) entered into binding engineering, procurement, and construction 4
agreements for construction of phase two of the project; 5
(C) entered into offtake agreements sufficient to underwrite 6
construction and operation of phase two of the project; 7
(D) completed a cost estimate for phase two of the project; 8
(E) completed a final resource report of phase two of the project; 9
(3) "phase two" means a phase of the Alaska liquefied natural gas project that 10
includes a gas treatment plant, a marine terminal, a liquefied natural gas plant, as defined in 11
AS 31.25.390, and other related infrastructure required for the export of liquefied natural gas. 12
* Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 13
read: 14
APPLICABILITY: ALASKA GASLINE DEVELOPMENT CORPORATION 15
CONFIDENTIALITY AGREEMENTS, SUBSIDIARIES, NOTIFICATIONS, LEGAL 16
RELATIONSHIPS. (a) AS 31.25.080(a)(1) and (6), as amended by sec. 8 of this Act, apply to 17
a transfer or disposition occurring on or after the effective date of sec. 8 of this Act. 18
(b) AS 31.25.090(j) and (k), added by sec. 11 of this Act, apply to a confidentiality 19
agreement entered into on or after the effective date of sec. 11 of this Act. 20
(c) AS 31.25.145(a), added by sec. 17 of this Act, applies to revenue generated on and 21
after the effective date of sec. 17 of this Act. 22
(d) AS 31.25.285, added by sec. 20 of this Act, applies to a legal relationship entered 23
into on or after the effective date of sec. 20 of this Act. In this subsection, "legal relationship" 24
has the meaning given in AS 31.25.285(b), added by sec. 20 of this Act. 25
* Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 26
read: 27
TRANSITION: EXISTING OPTIONS. (a) Within 30 days after the effective date of 28
sec. 14 of this Act, the Alaska Gasline Development Corporation shall notify the president of 29
the senate, the speaker of the house of representatives, and the chairs of the finance committee 30
of each house of the legislature of any existing options to invest in a revenue -generating 31
34-GS3141\A
SB3001A -33- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
project, as required under AS 31.25.125, added by sec. 14 of this Act. 1
(b) An option for state participation in a revenue -generating project negotiated by the 2
Alaska Gasline Development Corporation agreed to before the effective date of sec. 14 of this 3
Act must allow the state to exercise the option for at least 180 days after the corporation 4
notifies the legislature under AS 31.25.125, added by sec. 14 of this Act. 5
* Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 6
read: 7
CONDITIONAL EFFECT: BILL; NOTIFICATION TO THE REVISOR OF 8
STATUTES. (a) Sections 1 - 5 and 24 - 26 of this Act take effect only if, before January 1, 9
2032, the commissioner of revenue determines that 10
(1) the project developer of a natural gas project has paid the state 11
$40,000,000 within 60 days after a final investment decision is made on phase one of the 12
natural gas project and contractually agrees to pay an additional $40,000,000 to the state 13
within 60 days after a final investment decision is made on phase two of the natural gas 14
project; the legislature may appropriate amounts required to be paid under this section to the 15
natural gas project municipal impact grant fund, established in AS 44.33.850, added by sec. 16
27 of this Act; neither the state nor a corporation of the state may be responsible for the 17
payment or a portion of the payment required by this paragraph; 18
(2) the primary owner of property that could be taxable under AS 43.59.020, 19
added by sec. 26 of this Act, has entered into a project labor agreement for the construction of 20
the gas pipeline; in this paragraph, "project labor agreement" means a comprehensive 21
collective bargaining agreement between the owner of the gas treatment plant, carbon capture 22
facility, liquefied natural gas plant, or gas pipeline and the appropriate labor representatives to 23
ensure expedited construction with labor stability by employing qualified residents of the 24
state; and 25
(3) the project developer of a natural gas project who would be responsible for 26
constructing a spur line has committed to construct the spur line that serves the City of 27
Fairbanks and the Fairbanks North Star Borough; to meet the requirement of this paragraph, 28
(A) the project developer shall commit to, on or before completion of 29
phase one of the project, timely and in good faith begin all necessary permit 30
applications and take action on any other regulatory requirements necessary for the 31
34-GS3141\A
SB 3001 -34- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
construction of the spur line, including, if the Regulatory Commission of Alaska has 1
jurisdiction over the tariffs, 2
(i) initiating a tariff proceeding; and 3
(ii) filing with the commission for systemwide tariff treatment 4
for the spur line with an economically viable gas sales contract; 5
(B) the project developer shall commit to begin construction on a spur 6
line within one year after receiving all permits and meeting the necessary regulatory 7
requirements described in (A) of this paragraph; and 8
(C) the spur line must 9
(i) have sufficient capacity to serve reasonably projected 10
residential, commercial, and industrial demand in the Interior area of the state; 11
(ii) be scheduled to begin operations within two years after the 12
commencement of commercial operations of a major component of the natural 13
gas project; 14
(iii) be designed to connect with local distribution 15
infrastructure capable of delivering natural gas to the City of Fairbanks and the 16
surrounding urban area; 17
(iv) be designed and operated to deliver gas at the lowest 18
reasonable cost consistent with safe and reliable service; and 19
(v) allocate costs, including capital, financing, and construction 20
costs, justly, reasonably, and not unduly discriminatorily, across all consumers 21
systemwide, including consumers in the area from the North Slope to the 22
Southcentral regions of the state and, to the extent allowed under federal law, 23
export consumers; costs related to financing or construction of the spur line 24
may not be allocated solely to the Interior area of the state. 25
(b) If the commissioner of revenue determines that the conditions in (a) of this section 26
have been met, the commissioner of revenue shall notify the revisor of statutes in writing 27
within 30 days after making the determination. 28
(c) In this section, 29
(1) "economically viable gas sales contract" means a contract, precedent 30
agreement, memorandum of understanding, tariff -supported sales arrangement, or other 31
34-GS3141\A
SB3001A -35- SB 3001
New Text Underlined [DELETED TEXT BRACKETED]
commercially reasonable arrangement for the sale, delivery, transportation, or distribution of 1
natural gas to serve current or reasonably projected residential, commercial, institutional, 2
utility, or industrial demand in the City of Fairbanks, the Fairbanks North Star Borough, or 3
the surrounding Interior area of the state, including demand aggregated by a public utility, gas 4
distribution utility, local government, state agency, or other entity serving customers in the 5
Interior area of the state; the gas sales contract need not demonstrate that the spur line alone 6
will recover all capital, financing, construction, operation, or maintenance costs solely from 7
customers in the Interior area of the state; 8
(2) "final investment decision" means a final affirmative decision of a natural 9
gas project developer or a subsidiary of the primary project owner to proceed from the 10
planning phase to the implementation and construction phase of the applicable phase of the 11
natural gas project; a final investment decision has not been made until the project developer 12
or a subsidiary of the primary project owner has 13
(A) obtained firm commitments for all debt and financing required to 14
construct the applicable phase of the project; 15
(B) entered into binding engineering, procurement, and construction 16
agreements for construction of the applicable phase of the project; 17
(C) entered into offtake agreements sufficient to underwrite 18
construction and operation of the applicable phase of the project; 19
(D) completed a cost estimate for the applicable phase of the project; 20
(E) completed a final resource report of the applicable phase of the 21
project; 22
(3) "gas pipeline" means a gas pipeline, as defined in AS 31.25.390, that is 23
expected to be subject to the alternative volumetric tax under AS 43.59.020, added by sec. 26 24
of this Act; 25
(4) "phase one" means a phase of a natural gas project that includes a gas 26
pipeline and other related infrastructure required for the transportation of natural gas from the 27
North Slope to the Southcentral region of the state; 28
(5) "phase two" means a phase of a natural gas project that includes a gas 29
treatment plant, a marine terminal, a liquefied natural gas plant, and other related 30
infrastructure required for the export of natural gas; 31
34-GS3141\A
SB 3001 -36- SB3001A
New Text Underlined [DELETED TEXT BRACKETED]
(6) "spur line" 1
(A) means 2
(i) a natural gas transmission or lateral line that branches from 3
the main gas pipeline for the primary purpose of delivering natural gas to the 4
City of Fairbanks and the Fairbanks North Star Borough; and 5
(ii) compressing and metering equipment and interconnection 6
facilities related to the transmission or lateral line described in (i) of this 7
subparagraph; 8
(B) does not include infrastructure used for the export of natural gas or 9
lateral lines not necessary for delivering natural gas to a local community or utility 10
distribution system; 11
(7) "systemwide" means the area from the North Slope to the Southcentral 12
regions of the state. 13
* Sec. 33. If, under sec. 32(a) of this Act, secs. 1 - 5 and 24 - 26 of this Act take effect, they 14
take effect on the day after the date the commissioner of revenue determines that the 15
conditions in sec. 32(a) of this Act have been met. 16
* Sec. 34. Except as provided in sec. 33 of this Act, t his Act takes effect immediately under 17
AS 01.10.070(c). 18