Alaska gas project taxes depend on owner commitments

Eligible project property would get a temporary break from certain property taxes, followed by a tax based on gas throughput. The rules cover the defined natural gas project, including North Slope gas lines, a main pipeline, gas treatment and liquefied natural gas plants, and a marine terminal. The Department of Revenue must find that project plans meet the eligibility rules, including a spur line serving Fairbanks and the Fairbanks North Star Borough. These tax provisions take effect only if, before January 1, 2032, the revenue commissioner finds that the primary owner committed to pay $40 million to the state, negotiate a project labor agreement, and build the spur line. If the commissioner does not make that finding, these tax provisions do not take effect. The break ends when throughput reaches 500 million cubic feet a day, averaged over 30 days, or five years after commercial operations begin, whichever comes first. The throughput tax starts the next day. It ends January 1, 2032, if construction of the first 730 pipeline miles has not begun by then.

The Alaska Gasline Development Corporation would negotiate options for the state to invest in revenue-generating projects and notify lawmakers when those options are available or could be exercised. The option rules cover revenue-generating projects pursued by the corporation or its subsidiaries. The state could invest only if the legislature approves the investment by law. Lawmakers must act as prudent investors, and the Department of Revenue would help assess possible funding sources and effects on state finances. If the corporation negotiates for an additional project interest that it does not take, municipalities must have an opportunity to buy a portion through a corporation-managed entity. A municipality may not hold a direct project interest. The corporation would notify legislative leaders when an option is available and when the state could exercise it. For existing options, it must give notice within 30 days after the relevant section takes effect.

The Department of Commerce, Community, and Economic Development would administer a project mitigation fund and distribute money if the legislature appropriates it. The rules name the North Slope, Fairbanks North Star, Denali, Matanuska-Susitna, and Kenai Peninsula boroughs, and Anchorage. A population-based share may also go to other municipalities, subject to the spur line exception. Each year, lawmakers may appropriate up to $90 million of state revenue from an Alaska liquefied natural gas project to the fund. The amount distributed to local governments depends on the amount appropriated. If more than $60 million is appropriated, municipalities benefiting from a spur line cannot receive the population-based share. The legislature may appropriate money each fiscal year. The department would distribute that year's fund balance using the applicable funding tier.

The Department of Commerce, Community, and Economic Development could distribute community impact grants for pipeline construction effects. Eligible communities could receive grants for activities, services, or facilities that offset actual or expected effects of gas pipeline construction. The legislature may appropriate $40 million for the grants only after the state receives the owner's committed $40 million payment. The department would prioritize grants based on community needs, the severity of construction effects, and how closely those effects relate to pipeline construction. The grant appropriation could occur only after the state receives the payment. The bill does not set a grant distribution deadline.

The corporation could release information covered by a confidentiality agreement when all parties waive confidentiality, with limits on what agreements may keep secret. These rules concern information held by the corporation, its subsidiaries, or entities working with it under a confidentiality agreement. With all parties' consent, information may be released to a legislator or public agent, and information may be discussed in a legislative committee if consent is lawful and a consenting party can testify. An agreement may not block disclosure required by an administrative or court order, hide information that may lead to significant state financial risk or state funding, or hide the existence of a state interest option. Specific project costs or financial details may be kept confidential if release would cause commercial or competitive harm. The limits on confidentiality agreements apply to agreements made on or after the relevant section takes effect.