Last week I wrote about two AKLNG bills and two ways of thinking about resource development. SB 280, the Governor’s bill, was written to help a project get built. SB 275, out of Senate Resources, was written to maximize the state’s take whether the project gets built or not. I closed that piece by saying we needed a House Resources committee substitute that pulled the few good accountability pieces out of SB 275 and folded them into SB 280.

The Committee Substitute to HB 381 came out this week. That’s closer to what we need, and the House Resources Chair and the committee have done a pretty good job.

The CS keeps the core trade the Governor put on the table. No property tax during construction. A low volumetric tax once gas is moving. That is the whole reason this approach can work, and the House did not touch it.

The numbers did move. SB 280 set abatement at up to ten years or until the line hit one billion cubic feet per day, then six cents per Mcf escalating one percent a year. The CS for HB 381 sets it at six years or 250 million cubic feet per day, then five cents on the pipeline and ten cents at the LNG plant, escalating with the five-year CPI for urban Alaska.

That is a shorter, tighter abatement window and a split rate that charges more at liquefaction. House Resources is basically saying we will do the Governor’s deal, but on a faster clock, and we will charge more where the margin is. Whether that still works for Glenfarne is a question DOR and the developer have to answer. It is not a hostile rewrite. But it is a tougher one.

As I wrote last week, the Gulf Coast terminals all got ten-year exemptions, so six years with a hard throughput trigger is tighter than what those states offered, and Alaska is the higher-cost build.

What HB 381 added

Section 23 is where the philosophy changes. The Governor’s bill was a clean tax swap. The CS conditions most of the bill on the project owners committing in writing to four things. Community benefit agreements with every community within fifty miles of the plants or the corridor. An impact fund for those communities. A project labor agreement that prioritizes qualified Alaska residents. And starting the Fairbanks spur within two years after the first 750 miles of main line are laid.

The Fairbanks spur is in-state gas first, which is the whole reason Article VIII Section 2 matters in the first place. I just wish it included more communities along the alignment. Tying the tax break to a real delivery obligation to the Interior is defensible on constitutional grounds and on politics.

Construction is usually a net positive, but some communities along the corridor have absorbed real impacts from every major project that has moved through. A CBA, if structured right, is a better answer than the usual promise that someone will figure it out later.

The PLA is interesting. I believe in prioritizing Alaska labor. But I am not a fan of any provisions that turn this into a two-year fight over union scope while the rest of the tax treatment, or even the project, sit frozen waiting on Section 23 to trigger. The PLA needs a clear scope and a clock.

Section 6 adds something that was not in either Senate bill. A municipality along the corridor can opt out of regular property tax and either take its share of the volumetric tax or negotiate a direct equity stake in the project. The equity has to be proportional to the taxes given up and carry the same voting and governance rights as other holders.

That is a serious idea. A borough with an equity stake in AKLNG has a permanent aligned interest in the project succeeding. That is different from collecting a tax check. For MatSu in particular, given Port MacKenzie, the rail extension, and West Susitna access, a long-term ownership position in the midstream is worth thinking hard about.

None of the SB 275 tax overlays survived in the House CS. No 9.4 percent corporate income tax. No fifteen-cent surcharge. No elimination of the cross-commodity deduction. No blanket foreign-entity gate that would have given a future Legislature a kill switch on Korean, Japanese, and Taiwanese customers. Those were the weight of SB 275, and they are why that bill was written to say no. In place of SB 275’s broader valuation-publication regime, the CS substitutes a tighter eligibility certification under AS 43.59.030, RCA review of project design, and quarterly throughput reporting to the department. That is auditable in the ways that matter for this tax framework, without the cost-and-control overlays.

What the Senate is doing in parallel

The Senate took a diametrically opposite path with the same vehicle. The CS to SB 280 that came out of Senate Resources on April 19 is not the Governor’s bill anymore. It uses the SB 280 vehicle to carry most of SB 275’s content forward. The graduated 5 to 9.4 percent pass-through tax retroactive to January 1, 2026. The AGDC governance package. The foreign-entity legislative-approval gate. Legislator confidentiality access. Bond-issuance approval. Statutory price caps to in-state utilities at twelve dollars pre-LNG and five dollars post-LNG.

So, SB 275 is not a separate vehicle that died. It is now embedded in the Senate-side SB 280, and that is what will move out of Senate Resources to Senate Finance. The two chambers will produce two very different bills under the same numbers, and the conference committee is where the real fight happens. The House CS is the better starting position from there. That is the work we have to protect on the way to the Governor’s desk.

Three things to watch

The abatement clock. Six years and 250 MMcf/day is a step down from the original SB 280. If Glenfarne or DOR says it does not work, the committee needs to hear that now, not on the floor.

Section 23. The whole bill is on a single trigger tied to all four owner commitments. If any one of them hangs up, the tax treatment does not activate. That’s a single point of failure. The committee should think about belt and suspenders so a fight over PLA scope or community benefit agreements cannot tank the property tax relief.

The spur deadline. Two years after the first 750 miles of main line is hard, and consideration should be given to extending or changing it. If the main line hits a permitting or supply chain delay, the project loses eligibility even if everyone is acting in good faith. A commissioner extension for causes outside the owners’ control would protect that without gutting the spur requirement.

The bigger picture

Harold Hollis had an op-ed in the Alaska Landmine this week saying the Legislature is the greatest risk to AKLNG. He is not wrong about the risk. The motivations he describes showed up in SB 275. But his piece was a diagnosis. The CS to HB381 is the start of a cure.

The House took the Governor’s original bill (SB 280), kept what works, added real community and in-state gas protections, and rejected the cost-and-control provisions that would have killed it. It is tougher than SB 280 in a couple of specific places that need further negotiations and developer sign-off. But it is a lot better than the Senate’s version on every fiscal provision that determines whether this project gets built or dies a very ugly death.

Capital goes where the numbers work and the rules are clear. Alaska is not the only place with gas to sell. The House just wrote a bill that could actually get this project built.

Now we have to make sure it stays that way on the way to the Governor’s desk.

The CS for HB 381 gets us much closer to yes.