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Dear Friends and
Neighbors,
Photo: Common Lilac in
bloom at Bells Nursery on Specking, in Senate District E.
Special Session - Day 28
Needless to say, I'm here
in the rain forest of Juneau. Twice a day meetings continue for
Senate Finance. House members have taken a break to go home but are
coming back again for last day or two.
Gas Pipeline - only
special session topic
Meeting summaries are
located in newsletter section below.
I share some highlights:
The bill that the House
sent us (HB 381). What's in it?
Property Tax: Abatement
("free" time, no tax) until 2060. (Yes, not a misprint -
2060. No property taxes until then).
Senate Resources
committee gave
the abatement (tax free) for 10 years, then the property tax is
restored.
Alternative Volumetric
Tax (replaces the property
tax) - 13 cents on the Gas Treatment Plant, 6 cents on the
pipeline, 13 cents on the LNG plant. The House created that it be
levied in a weighted average calculation - the value of the
infrastructure times the cents AVT times the amount gas flow
through the infrastructure; inflation rate is 2%.
Senate Resources did simple: cents of tax
times gas flow through the infrastructure (straightforward).
Inflation rate full CPI.
3 Things Required before
Tax Abatement
Spur Line to Fairbanks - cost
about $150 Million. 38 miles, 12-14 inch pipeline. Connect to gas
distribution in Fairbanks, and possibly North Pole, Eielson AFB. It
is a requirement in order for the large gas pipeline to get the
property tax abatement. Question as to who would regulate it (RCA
or FERC).
Senate required Spur Line also.
$80 Million Community
Impact Fund -
money that impacted municipalities and boroughs along the pipeline
route can apply to for payment of increased community needs due to
pipeline construction.
Senate - $200 Million to
communnities along the project, less to State treasury shared with
all communities in the State based on population.
Project Labor Agreement -
Local Alaska Union agreements for hiring priority and wages.
Glenfarne says 12,000 jobs on this project. They have made PLA with
Lower 48 unions who will do the specialized work on the project
(and likely highest wages (which will be deposited in L48 banks and
pay no taxes in Alaska)).
Senate also required this.
Suspension of tax
abatement provisions: 2032 if construction not started, 2037 if pipeline
not completed.
Senate said suspension Jan. 1,
2028 if construction not started on pipeline, 2032 if pipeline
construction not completed. The ENSTAR contract with Hilcorp for
secure gas supply ends in 2033. The Senate felt that the pipeline
has to be completed before then, if this project is supposed to
save us from imported gas.
Transparency and
Oversight: The House provisions
are minimal. If AGDC enters into contracts, the Legislature can
review and approve them if done quickly, otherwise the contracts
simply go into effect.
Senate was much more restrictive
- want to know if Glenfarne is divesting the project or major part
of the project and who are they divesting to; no bonding without
Legislative approval (just like Alaska Railroad is required to do).
Senate believes the people of Alaska should have more input and
control of this project that is extracting our gas. We want control
on who buys out Glenfarne.
These items above are
just a few of the many questions being asked. I haven't even
gone into contract carrier status of the pipeline and the
implications for Alaska of that.
This is a generational
project. It can have good
result, no question! It can also have bad result as well. That
would happen because we, the Legislature, didn't have access to the
facts, the implications, and the advice from financial experts.
Glenfarne and AGDC have all those assets that we don't.
I come back to our Constitutional
duty that I swore to uphold: Maximum benefit from our
resources, never give up the taxing authority.
Next Steps
Special Session ends on
Friday, June 19.
Senate Finance committee
has to put out a bill that would be voted on by the Senate. If the
Senate passes the bill, it will go back to the House for
concurrence.
Then it would go to the
Governor. He could sign it or veto it.
Alaska
House appears likely to pass 85% tax cut for proposed gas pipeline Alaska
Beacon
LNG
Special Session: Developer says bill can create a gas line if
legislature passes it without changes Alaska News Source
Alaska
LNG tax break bill advances to House floor for consideration Anchorage
Daily News
Alaska
House committee advances gas pipeline tax bill sought by governor,
Glenfarne Alaska
Beacon
House Finance Committee voted unanimously to
advance a bill that would effectively cut taxes on the project by
about 85% for 30 years.
LNG
Special Session: Labor unions, pipeline developer sign non-binding
pledge to prioritize Alaska workers ahead of key House debate Alaska News Source
Gasline
tax bill heads for House vote as developer pledges to prioritize
Alaska labor Alaska Public Media
Alaska
LNG project and unions sign preliminary agreement to maximize
Alaska hires Anchorage
Daily News
AKLNG
advances without option for local governments to cut their own
deals. The Alaska Memo
Thursday’s non-binding
memorandum is a step toward a formal project labor agreement, but
the two sides have not yet committed to anything legally
enforceable. The document — a written promise, not a legally
binding contract — commits developers to prioritizing ‘Alaska
workers for construction and related work,’ according to a joint
press release. A formal project labor agreement, which would be
enforceable, has not yet been reached.
Opinion:
Alaska needs a resource win, not another slogan Anchorage
Daily News
What revenue, if any,
would we make from a gas line? What are the costs to Alaska
communities? Someone somewhere is saying, “But jobs.” How many
Alaskans will hold those jobs? Where does the money come from to
pay for the increase in needed services for these workers and their
families? Did you know we have already spent $1 billion on “the”
gas line?
The
trans-Alaska pipeline paid taxes. So can the LNG. Alaska Beacon
History matters here. The
trans-Alaska pipeline was not built because Alaska handed the
Alyeska consortium a 90% tax cut. It was built because the
consortium companies financed the roughly $8 billion construction —
that’s in 1970s dollars — themselves.
Alaska
LNG project signs preliminary deal to sell gas to Chugach Electric Anchorage
Daily News
The developer of the
Alaska LNG megaproject said Monday it had struck a preliminary deal
with the state’s largest power company that could lead to sales of
natural gas, if the project is built. The letter of intent with the
Chugach Electric Association lays out terms of negotiation that
could lead to a final agreement for gas sales from the project
developer, Glenfarne, to the utility.
Alaska
House passes tax cut for North Slope gas pipeline, sending bill to
Senate Alaska Public Media
Alaska
House advances gas pipeline tax break to state Senate for further
work Alaska
Beacon
Alaska
LNG's big secret: Who would pay billions in cost overruns? Reporting from Alaska
The bill would replace a
2% annual statewide oil and gas property tax with a per-unit tax on
gas flowing through the pipeline. It amounts to a substantial
tax cut for the project, an 80% to 90% reduction
compared to current law. Without it, developer Glenfarne told
lawmakers the future of the project would be in doubt.
Items in this Newsletter:
· Gasline Finance Committee Meetings
· Oil and Gas Pipeline Topics with Current
Topics, Stuff I Found Interesting, Education, Politics, Healthcare
· Resource Values, Permanent Fund Data
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