Alaska House committee advances gas pipeline tax bill sought by governor, Glenfarne

Alaska lawmakers, meeting in a special session, advanced a bill intended to spur construction of a long-desired pipeline carrying natural gas from the North Slope to markets.

The legislature’s House Finance Committee approved the bill, House Bill 381, which would largely eliminate state and municipal property taxes on project-related infrastructure, replacing those revenues with money from gas flowing through the system.

The bill now heads to the House floor for consideration. For the bill to become law, it must be approved by the House and then reviewed and approved by the Senate before the special session ends on June 19. If the Senate makes changes to the bill, the House must vote to concur with them.

The Senate has its own version of the bill, Senate Bill 2001, which is currently under review in that body’s finance committee.

The House bill has been a top priority of Gov. Mike Dunleavy, who called the special session, and the Glenfarne Group LLC, a private asset manager and developer leading the current plan to commercialize long-stranded North Slope natural gas. They argue that property taxes are the major impediment to the project’s construction.

The Glenfarne project, which is in partnership with the state-owned Alaska Gasline Development Corp. proposes an approximately 800-mile pipeline from Prudhoe Bay to tidewater at Cook Inlet, where gas would be liquefied. Glenfarne became involved in the project last year, acquiring a 75% share from the Alaska Gasline Development Corp.

In comments just before their vote to move the bill, some House Finance Committee members said they had high hopes the measure will result in a pipeline project.

Rep. Frank Tomaszewski, R-Fairbanks, said the project will be as important as the trans-Alaska oil pipeline that his father helped build in the 1970s.

“I’m just humbled and honored right now to be able to be working on this legislation that is going to bring that next step, that gas pipeline, because 40, 50 years ago, that was what we were talking about,” Tomaszewski said at the hearing. “I’m looking forward to the groundbreaking ceremony for this project, because it will be transformational for the state, not only with lower gas prices and affordable energy but also tremendous amount of revenue for the state and local communities.”

Rep. Will Stapp, R-Fairbanks, had similar comments.

“Generally, at the end of the day, I think the vast majority of us and Alaskans really want to see the best chance possible to be provided to move forward with this transformational project,” Stapp said.

The bill went through numerous amendments, many of which were aimed at protecting local governments dependent on property taxes.

The special session began on May 21.