Senate passes modified gasline bill, but Dunleavy says it’s unacceptable and second special session will begin Saturday

Gov. Mike Dunleavy expresses disappointment with a gasline bill passed by the Senate during a press conference on Friday, June 19, 2026. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

This is a developing story.

The Senate, with four hours left in a 30-day special session, passed a bill Friday night intended to support the development of a natural gas pipeline by a 12-8 vote after numerous amendments and hours of floor debate.

But Gov. Mike Dunleavy, saying "I don’t think this is a bill that works," announced immediately afterward a second special session he ordered to work on gasline legislation will convene on Saturday with a bill similar to the one passed by the House by a 34-5 vote a week ago.

The Senate adjourned after passing the bill and the House about an hour later announced it would not meet Friday night to consider the amended version, effectively bringing the first special session on the gasline to an end.

House Bill 381, as passed by the House, cuts property taxes for the Alaska LNG Project developer would pay to state and local communities by an estimated 85% for 30 years. The Senate version provides lower incentives to the project’s developer and producer — and includes what lawmakers call an "S Corp" provision that makes the state’s corporate income tax applicable for privately held oil and gas companies.

The latter provision was denounced Friday by Glenfarne Group, which owns 75% of the project, as well as Dunleavy and others opposing the Senate’s changes.

"I want to say that without this project there is no tax revenue," said House Majority Leader Chuck Kopp, R-Anchorage, who was invited by Dunleavy to speak during the press conference. "There are no jobs without this project, and there's no energy security and no new gas supply without this project. We have to get this project off the ground. So the Senate amendments that we just saw did not move us in that direction. They moved us into the opposite direction and they effectively killed this project."

Senate Rules Chair Bill Wielechowski, D-Anchorage, said that without the S Corp provision Glenfarne could avoid paying corporate income taxes while potentially making $5 billion in annual profits. He said that given the pipeline’s planned operation beyond 2060 that could amount to hundreds of millions of dollars in tax breaks for an out-of-state corporation.

"Is (the governor) choosing the people of Alaska or outside billionaires?" Wielechowski said after listening to the governor’s press conference. "That is the decision he's making. That's the major change in the bill."

The developer and producer of the project say the tax breaks and other assistance in the House version are needed to make the project affordable.

“In contrast to the workable tax reform legislative compromise that passed the House with a bipartisan, 87% vote, many of the amendments passed in the Senate bill tonight, if put into law, would have resulted in an unworkable, unfinanceable, and uncompetitive project, unable to deliver reliable and affordable energy to Alaskans," Glenfarne Alaska LNG declared in a press statement Friday night. “Our objective has not changed: clean, fair, and equitable legislation that provides billions of tax dollars and investment while creating thousands of jobs for Alaskans."

Legislators resisting the more generous incentives say specifics on the need for them are lacking and there are concerns about the state being asked to provide a large amount of additional assistance to complete the project.

While Dunleavy has ordered another special session, the Legislature does have the option to quickly gavel out and stall further work on the project. Some lawmakers on Friday said it may be preferable to postpone consideration of gasline legislation until next year’s session, when a new governor will be in office following the November election.

"I would say it would be a travesty if tomorrow one body or the other gavels out, because they're basically telling Alaskans we're done with this, we are done trying, we want to get on with our summer," Dunleavy said.

"If people are seriously interested in getting something done it can be done tomorrow," he added,

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.