Alaska gas project property would get a conditional tax break

Eligible natural gas project property would get a temporary break from property taxes, then pay a tax based on gas throughput. The rules cover the defined project, including its gas lines, main pipeline, treatment plant, liquefied natural gas plant, and marine terminal. The Department of Revenue must find that the project plans include a spur line serving Fairbanks and the Fairbanks North Star Borough, with enough capacity for expected demand and systemwide cost sharing. Before January 1, 2032, the commissioner must find that the main owner committed to pay $40 million to the state, negotiate a project labor agreement, and take the required spur-line permitting and construction steps. The break would start when this section takes effect. It would end the day after throughput reaches 500 million cubic feet a day, averaged over 30 days, or five years after commercial operations begin, whichever comes first; the alternative tax would start the next day.

The Alaska Gasline Development Corporation would have to negotiate an option for the state to buy an interest in revenue-generating projects. The requirement applies when the corporation or one of its subsidiaries negotiates to participate in a project expected to generate revenue. The state could acquire an interest only if the legislature approves it by law and acts as a prudent investor. The Department of Revenue would help lawmakers identify possible funding and effects on state finances. The corporation would notify legislative leaders when an option is available and when the state may exercise it. The second notice is due by the earlier of reasonable assurance the project will be completed or a final investment decision.

The legislature could set aside project revenue for community grants and a state fund that distributes money to communities. The fund directs money to six named boroughs and municipalities, and, for larger appropriations, may also distribute money to other municipalities based on population, with an exception for places benefiting from a spur line. The legislature may appropriate up to $90 million each fiscal year to the fund; the bill does not require an appropriation. Distribution amounts depend on how much lawmakers appropriate. A separate appropriation of $40 million for grants may be made only after the state receives the owner's $40 million payment. Grants would support activities, services, or facilities that offset actual or expected pipeline construction effects. The legislature could appropriate up to $90 million to the fund each fiscal year. It could appropriate the separate $40 million for grants only after the state receives the payment.