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House and Senate conference committee members unveiled a draft compromise bill on Thursday for the proposed Alaska LNG gas line project, pledging that debate, input and revisions will continue on the state tax break legislation up until a floor vote scheduled for July 16.
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“We know we have more work to do,” said House Speaker Rep. Bryce Edgmon, I-Dillingham, following the committee hearing. “It’s a complex topic, and our goal today was to first get through the working draft that had, we thought, a lot of areas of compromise between, you know, sort of all the partners involved in crafting the bill.”
The six member conference committee is tasked with negotiating a compromise bill from the versions of House Bill 381, which was passed by the House and Senate in a special session in June.
Amid high political pressure, lawmakers are now in a second special session called by Gov. Mike Dunleavy to hammer out a state tax proposal that is workable for both the state and the project developer, Glenfarne, which owns 75% of the project. Glenfarne executives say the multibillion dollar tax break is essential to the project’s economics — and that it must come before the company determines a final investment decision with investors.
Dunleavy and members of the House and Senate have taken decidedly different approaches to the size and scope of the state tax break for the proposed project. The project would be built in two phases — first, an 807-mile gas line from the North Slope to Cook Inlet, then gas treatment facilities on the North Slope and on the Kenai Peninsula to export gas internationally.
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One of the most fiercely debated provisions in the draft compromise is a proposal to apply the state’s corporate income tax to privately-owned oil and gas companies that currently do not pay them. The provision is favored by some lawmakers and was included in the version of the bill passed by the Senate. But Dunleavy has called the tax a “poison pill” and pledged to veto any bill that includes it. Legislative leaders say they will revisit the topic and expect to make changes to the draft.
Edmon called the corporate tax provision the “elephant in the room” and said further negotiation will continue after the holiday weekend. “I’m really looking forward to after this period of what I would call percolation that we come back and make further changes to the bill,” he said.
Rep. Calvin Schrage, I-Anchorage, who chairs the conference committee, said its members will continue hearing input on the draft bill from relevant groups, and many provisions will be further debated and revised.
“We’re going to continue that work, see how far apart the goal posts are, and do what it takes to try and bring those together,” he said. “And again, ultimately arrive with a bill on the floor that we think can be successful, and give this project a chance.”
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