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Technically another special session for gasline begins, but without a bill for legislators to consider
- Mark Sabbatini
- Jul 27
- 4 min read
Dunleavy says he will ‘continue meeting with all parties’ before submitting proposal to Legislature; a few House and Senate members convene and quickly adjourn until Friday
By Mark Sabbatini
Juneau Independent
A third consecutive special session to consider tax breaks for a proposed natural gas pipeline got off to a short and subdued start Monday, with four members of the House and Senate meeting for a total of six minutes. No legislation was introduced for consideration, with Gov. Mike Dunleavy stating it is still being drafted.
"Before reintroducing the legislation, my administration is going to continue meeting with all parties to determine the best path forward to an agreement," the Republican governor stated in a message posted on his official social media accounts. "I believe that by having these discussions now we can come to an agreement on a bill that would get the support it needs to pass both bodies and get this vital project moving forward and conclude this special session quickly."
The House and Senate both convened technical floor sessions Monday with a minimal number of members present and no action on legislation possible due to the lack of a quorum. Both adjourned until Friday, with technical sessions also planned that day.
House Speaker Bryce Edgmon, I-Dillingham, who presided over a two-minute floor session at 10 a.m. with only a majority leader and minority leader present, said afterward he is willing to give new legislation by Dunleavy’s serious consideration depending on its specifics. But Edgmon said he also believes this is the governor’s last chance to get a gasline bill passed before he leaves office at the end of the year.
"I think the clock is ticking very loudly right now and the governor realizes that, and I could tell you that if we don't get it done this special session that I don't know that there will be another opportunity this year," Edgmon said. "And there are an increasing number of legislators calling for just a timeout and to wait for the next administration to come in, and the dust will have settled by then hopefully."
Sen. Jesse Kiehl, D-Juneau, sat alone in the Senate Chambers as he presided over a four-minute technical session that lasted four minutes while Dunleavy’s proclamation ordering the special session was read.
Kiehl, after the floor session, said that like Bryson he is waiting to see what Dunleavy proposes before deciding how seriously he will consider it.
"If the governor takes a new and different approach and works on some of these overarching issues, then I think the Senate will absolutely be willing to put in some real time and work," Kiehl said. "But unless that's the case I think we're going to waste as little money as we possibly can. The governor has the constitutional power to waste it, but we're going to do this as cheaply as possible."
Dunleavy is seeking legislation to advance the long-proposed Alaska LNG Project by giving incentives to developers who say the project will be unaffordable otherwise. The governor and proponents of the pipeline say it will earn many billions of dollars for the state, create a significant number of jobs and help resolve a natural gas supply shortage for people in Alaska.
The primary change sought by the governor would replace property taxes paid on the Alaska LNG Project — consisting of an 800-mile pipeline from the North Slope to the Kenai Peninsula, plus processing facilities — with a tax on gas flowing through the pipeline.
But some legislators, particularly in the Senate, are questioning the legitimacy of the developers’ cost and earnings projections. Also, skeptical lawmakers worry the state may be asked to pay high additional costs to complete the project and could lose tens of billions of tax revenue during the decades the pipeline is in operation.
The gas pipeline was Dunleavy’s top declared issue during much of the regular legislative session that ended in May and he declared a special session immediately afterward when lawmakers failed to pass a bill he considered acceptable. That special session and another immediately afterward that ended July 16 also ended without a resolution, as a compromise bill approved by a joint House-Senate committee was rejected by Dunleavy.
A key sticking point for Dunleavy is a so-called "S Corp" provision that makes privately owned oil and gas companies subject to the state’s corporate income tax. The tax is currently imposed on publicly traded companies (referred to as "C Corps") and some policymakers favoring the change say private companies (S Corps) are benefiting from a "loophole" that costs the state significant tax revenue.
The compromise bill was adjusted so the S Corp tax would not apply to the gasline’s earnings by Glenfarne, a privately owned company that is the primary developer of the project. But Dunleavy said he still wasn’t willing to accept it and suggested legislators pass a bill with that provision separately. Legislators opposing that possibility said they believe Dunleavy would veto such a bill, so combining what amounts to a tax increase with the tax breaks in the gasline proposal is reasonable.
Additional controversy has arisen during the special sessions as some lawmakers have accused Hilcorp, a private oil and gas firm owned by billionaire businessman Jeffery Hildebrand, as being the primary influencer on Dunleavy’s rejection of a gasline bill with the S Corp provision, since that company would be most affected by it. Dunleavy has rejected that accusation.
• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.
