HB381 — OIL & GAS PROPERTY TAX; MUNI TAX; AGDC

* Sec.

6.

AS 37.14 is amended by adding a new section to read:

Article 12.

Constitutional Education Fund.

Sec.

37.14.900.

Alaska education fund.

(a) Under art.

IX, sec.

18, Constitution of the State of Alaska, the Alaska education fund is established as a HB0381b -3- CSHB 381(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T separate fund in the state treasury.

(b) Notwithstanding any other provision of law, the Alaska education fund consists of all revenue received by the state associated with a North Slope natural gas project that remains after (1) the payment to the Alaska permanent fund under AS 37.13.010;

(2) the payments to municipalities, reserves, and communities in the unorganized borough under AS 43.59.040;

and (3) the payment to the renewable energy grant fund under AS 42.45.045(m).

(c) The commissioner of revenue is the fiduciary of the Alaska education fund.

The commissioner of revenue shall manage and invest the fund assets as provided in AS 37.10.071.

(d) In this section, "North Slope natural gas project" has the meaning given to "natural gas project" in AS 43.59.100.

* Sec.

7.

AS 42.45.045(b) is amended to read:

(b) The authority shall administer the fund as a fund distinct from other funds of the authority.

The fund consists of (1) money appropriated to the fund by the legislature, including appropriations made under (m) of this section, to provide grants for certain energy projects determined by the legislature;

(2) gifts, bequests, contributions from other sources, and federal money;

(3) interest earned on the fund balance;

and (4) investments to be managed by the Department of Revenue, which shall be the fiduciary of the fund under AS 37.10.071.

* Sec.

8.

AS 42.45.045 is amended by adding a new subsection to read:

(m) Each year, the legislature may appropriate to the fund 20 percent of the revenue received from the state's royalty gas transported in an Alaska liquefied natural gas project that remains after the payment to the Alaska permanent fund under AS 37.13.010.

In this subsection, "Alaska liquefied natural gas project" has the meaning given in AS 31.25.390.

CSHB 381(RES) -4- HB0381b New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T * Sec.

9.

(a) Except as provided in AS 43.59.020,43.56.021 and 43.56.022, an [AN] annual tax of 20 mills is levied each tax year beginning January 1, 1974, on the full and true value of taxable property taxable under this chapter.

10.6.

AS 43.56.010(a), as amended by sec.

9 of this Act, is amended to read:

(a) An [EXCEPT AS PROVIDED IN AS 43.59.020, AN] annual tax of 20 mills is levied each tax year beginning January 1, 1974, on the full and true value of taxable property taxable under this chapter.

* Sec.

11.

(b) AExcept as provided in AS 29.45.080(g), a [A] municipality may levy and collect a tax under AS 29.45.080 at the rate of taxation that applies to other property taxed by the municipality.

The tax shall be levied at a rate notno [NO] higher than the rate applicable to other property taxable by the municipality.

ExceptA as provided in this section and AS 29.45.085, a [A] municipality may not exempt from taxation property authorized to be taxed under this chapter.

12.7.

AS 43.56.010(b), as amended by sec.

11 of this Act, is amended to read:

(b) A municipality may levy and collect a tax under AS 29.45.080 at the rate of taxation that applies to other property taxed by the municipality.

The tax shall be levied at a rate not higher than the rate applicable to other property taxable by the municipality.

Except as provided in this section [AND AS 29.45.085], a municipality may not exempt from taxation property authorized to be taxed under this chapter.

Exemptions shall be limited to those in AS 29.45.030, 29.45.050, and AS 43.56.020.

* Sec.

13.

(d) Taxable property subjectof toa themajor volumetriccomponent taxof imposeda undernatural ASgas 43.59.020pipeline [OFproject Athat NATURALis GASa PIPELINEqualified PROJECTproperty OWNEDas ORdefined FINANCEDin BYAS 43.56.027 [owned or financed by THE ALASKA GASLINE DEVELOPMENT CORPORATION ORor Aa JOINTjoint VENTURE,venture, PARTNERSHIP,partnership, ORor OTHERother ENTITYentity THATthat INCLUDESincluded THE ALASKA GASLINE DEVELOPMENT CORPORATION] is exempt from state taxes levied or authorized under AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) [BEFOREbefore THEthe COMMENCEMENTcommencement OFof HB0381bcommercial -5-operations CSHBof 381(RES)that major component of the HB 381 -2- HB0381a New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T34-GH2038\A COMMERCIALnatural OPERATIONSgas OFpipeline THATproject. NATURAL GAS PIPELINE PROJECT.

INThe THISexemption SUBSECTION,under "COMMENCEMENTthis OFsubsection COMMERCIALapplies OPERATIONS"to MEANSreal THEand FIRSTpersonal FLOWproperty OFused NATURALor GAScommitted INby THEcontract PROJECTor THATother GENERATESagreement REVENUEfor TOthe THEconstruction, OWNERSoperation, OFor THEmaintenance NATURALof GASthe PIPELINEqualified PROJECT].property.

In this subsection, (1) "commencement of commercial operations" means the first flow of natural gas in the qualified property that generates revenue to the owners of a major component of the natural gas pipeline project;

(2) "major component of a natural gas pipeline project" means each part of an Alaska liquefied natural gas project as defined in AS 31.25.390, an in-state natural gas pipeline as defined in AS 31.25.390, and integrated carbon capture, utilization, and storage infrastructure, including a carbon dioxide storage facility under AS 41.06;

(3) "taxable property" has the meaning given in AS 43.56.027.

14.8.

AS 43.56.020(d),43.56 asis amended by sec.adding new sections to read:

13 of this Act, is amended to read:

(d) Taxable property of a natural gas pipeline project owned or financed by the Alaska Gasline Development Corporation or a joint venture, partnership, or other entity that includes the Alaska Gasline Development Corporation [SUBJECT TO THE VOLUMETRIC TAX IMPOSED UNDER AS 43.59.020] is exempt from state taxes levied or authorized under AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) before the commencement of commercial operations of that natural gas pipeline project.

In this subsection, "commencement of commercial operations" means the first flow of natural gas in the project that generates revenue to the owners of the natural gas pipeline project.

* Sec.

15.

AS 43.56.210(5) is amended to read:

(5) "taxable property" (A) means real and tangible personal property used or committed by contract or other agreement for use within this state primarily in the exploration for, production of, or pipeline transportation of gas or unrefined oil (except for property used solely for the retail distribution or liquefaction of natural gas), or in the operation or maintenance of facilities used in the exploration for, production of, or pipeline transportation of gas or unrefined oil;

"taxable property" includes (i) machinery, appliances, supplies, and equipment;

(ii) drilling rigs, wells (whether producing or not), gathering lines and transmission lines, pumping stations, compressor stations, power plants, topping plants, and processing units;

(iii) roads, tank farms, tanker terminals, docks and other port facilities, and air strips;

CSHB 381(RES) -6- HB0381b New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T (iv) aircraft and motor vehicles owned by a person whose principal business in the state is the exploration for, production of, or pipeline transportation of gas or unrefined oil and whose operation of the aircraft or motor vehicle directly relates to the conduct of that business;

(v) maintenance equipment and facilities, and maintenance camps and other related facilities;

and (vi) communications facilities owned by a person whose principal business in the state is the exploration for, production of, or pipeline transportation of gas or unrefined oil and whose operation of the communications facilities directly relates to the conduct of that business;

(B) does not include (i) permanent residences;

(ii) office buildings requiring substantial local government services;

(iii) oil and gas pipeline systems owned and operated by a public utility that is certificated under AS 42.05.221 and is regulated by the Regulatory Commission of Alaska;

(iv) aircraft and motor vehicles, except aircraft and motor vehicles taxable under (A)(iv) of this paragraph;

[AND] (v) communications facilities, except communications facilities taxable under (A)(vi) of this paragraph;

and (vi) property related to a gas treatment plant, as defined in AS 43.59.100;

* Sec.

16.

AS 43 is amended by adding a new chapter to read:

Chapter 59.

Natural Gas Project Volumetric Tax.

43.59.020.43.56.021.

Temporary abatement.

(a) Taxable property of a qualified property and any real or personal property used or committed by contract or other agreement for the construction, operation, or maintenance of the qualified property is not subject to the tax levied under AS 43.56.010(a) or a municipal tax levied under AS 29.45.080 during the ramp-up period.

For purposes of this subsection, the ramp-up period begins on the date of commencement of commercial operations, as defined in AS 43.56.020(d), and ends on the earlier of (1) the day after the qualified property achieves a throughput of 1,000,000,000 cubic feet of natural gas per day, calculated as a rolling average over a consecutive 30-day period;

or (2) 10 years after the date of commencement of commercial operations.

(b) During the ramp-up period described in (a) of this section, the owner of a qualified property shall submit quarterly reports to the department detailing the daily volume of natural gas throughput.

Upon verification that the throughput threshold has been met and the ramp-up period has ended, the commissioner shall issue a written determination to the owner and to any municipality within which the qualified HB0381a -3- HB 381 New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\A property is located.

The abatement provided in (a) of this section expires permanently upon the issuance of the written determination and does not resume if the daily gas volume subsequently decreases below the throughput threshold.

(c) The provisions of this section do not apply to a spur line.

In this subsection, "spur line" means a natural gas transmission line or lateral line that branches from the main natural gas pipeline project to deliver natural gas to a local community or utility distribution system, including a line described in AS 31.25.005(4) and 31.25.390 or similar infrastructure not serving as the primary export or mainline transmission facility and not defined as a major component under AS 43.56.020(d).

Taxable property associated with a spur line remains subject to taxation under AS 43.56.010 without the benefit of the abatement in (a) of this section.

Sec.

43.56.022.

(a) The owner of propertya subjectqualified toproperty tax under this section shall pay an alternative volumetric tax on the throughput of the qualified property.

The alternative volumetric tax applies beginning on the firstday dateafter ofthe commencementexpiration of commercial operations of a major component of the HB0381bramp-up -7-period CSHBdescribed 381(RES)in NewAS Text43.56.021. Underlined [DELETED TEXT BRACKETED] 34-GH2038\T project.

(b) The volumetricrate of tax is $0.15$0.06 forper each 1,000 cubic feet of natural gas transportedthroughput. through a gas pipeline.

(c)The Beginningrate thein firstthis yearsubsection theincreases taxby appliesone topercent throughput of a gas pipeline, the rate ofimposed taxduring forthe throughputprior underyear this subsection shall be adjusted on January 1 of each year forfollowing inflation, using 100 percent of the changefirst overyear the preceding five calendar years in the Consumer Price Index for all urban consumers for urban Alaska, as determined by the United States Department of Labor,imposition. Bureau of Labor Statistics.

(d)(c) AThe naturaltax gaslevied projectunder this section is subjectin toplace theof alternative(1) volumetricall taxtaxes underlevied thison sectiontaxable onlyproperty, ifincluding theproperty departmentused determinesor thatcommitted theby projectcontract isor eligibleother underagreement ASfor 43.59.030.use in the qualified property;

(e) The tax levied under this section is in place of (1) all state taxes levied on taxable property, including property used or committed by contract or other agreement for use in the natural gas project;

and (3) ad valorem taxes levied under AS 29.45.080.29.45.080;

(f)and Each(4) ownerduring the construction, operation, or maintenance of propertythe subjectqualified toproperty, any municipal sales or use tax levied under thisAS section29.45.650 shallor file29.45.700, amunicipal returntaxes withon theor departmentmeasured by gross or net income, or any municipal license, excise, fee charge, or other tax on or beforepertaining to the lastpurchase, dayuse, consumption, or ownership of eachproperty month.or services.

The(d) A return mustshall statebe thefiled throughput,with inthe cubicdepartment feetand ofto naturaleach gasmunicipality forthat eachtaxes day,qualified forproperty eachunder propertythis subjectsection toon taxor forbefore the monthlast precedingday theof each month infor which the returnpreceding ismonth's due.throughput.

The ownertax ofshall thebe propertypaid shall,to at the timedepartment thewith return is filed, pay the taxHB due381 under-4- thisHB0381a sectionNew forText theUnderlined month[DELETED precedingTEXT theBRACKETED] 34-GH2038\A return.

(g)(e) A payment is considered late if the payment is not received by the department on or before the last day of the month in which the return is due.

(h)(f) NotwithstandingThe ASprovisions 43.05.220, if the tax levied in this section is delinquent, the department shall assess a penalty of 15AS percent43.56.090, of43.56.100, the43.56.135, amount43.56.140, ofand delinquent43.56.150 taxesdo andnot interestapply onto the delinquentalternative taxes,volumetric exclusivetax oflevied penalty,under atthis thesection. rate specified in AS 43.05.225.

(g) When the tax levied in this section becomes delinquent, a penalty of 10 percent shall be added.

Interest on the delinquent taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225.

(h) The remedy of distraint of property set out in AS 43.20.270 applies to the tax levied in this section.

However, only the qualified property may be distrained.

43.59.030.43.56.023.

Eligibility.

(a) A natural gas project is eligible for the alternative volumetric tax under AS 43.59.020 only if the department determines that the plans for the project meet the requirements of this section.

CSHB 381(RES) -8- HB0381b New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T (b) To be eligible under this section, plans for the project must include a spur line meeting the requirements of this subsection that serves the City of Fairbanks and the Fairbanks North Star Borough.

The spur line must (1) have sufficient capacity to serve reasonably projected residential, commercial, and industrial demand in the Interior area of the state;

(2) be scheduled to begin operations within two years after the commencement of commercial operations of a major component of the natural gas project;

(3) be designed to connect with local distribution infrastructure capable of delivering natural gas to the City of Fairbanks and the surrounding urban area;

(4) be designed and operated to deliver gas at the lowest reasonable cost consistent with safe and reliable service;

and (5) allocate costs, including capital, financing, construction, operations, and maintenance costs, (A) across all consumers systemwide;

costs related to financing, construction, operations, or maintenance of the spur line may not be allocated solely to the Interior area of the state;

in this subparagraph, "systemwide" means the area from the North Slope to the Southcentral regions of the state;

and (B) justly, reasonably, and not unduly discriminatorily.

(c) If the department determines that the requirements of (b) of this section have been met, the department shall issue a written determination that the natural gas project is eligible for the alternative volumetric tax under AS 43.59.020.

Sec.

43.59.040.

(a) TheA departmentmunicipality shall levy and collect the alternative volumetric tax imposedon bythe thisportion chapter.of the qualified property located within the municipality.

(b) The departmentstate shall separatelylevy accountand forcollect the alternative volumetric tax collectedon bythe portion of the statequalified underproperty ASlocated 43.59.020.in the unorganized borough.

Each(b) year,Revenue thecollected legislatureby may appropriate (1) 50 percent of the taxstate collected under AS(a) 43.59.020(b) to the portion of thethis statesection throughshall whichbe adeposited gasin pipeline runs, with appropriations proportionately divided among the municipalitiesgeneral andfund. unorganized borough through HB0381b -9- CSHB 381(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T which the gas pipeline runs;

(c) The department shall adopt regulations providing for a methodology to determine the proportionalamount distributionthat undereach thismunicipality paragraph,and the lengthstate ofmay pipelinelevy inbased aon municipalitythe isoriginal dividedcost byof the totalportion length of the pipeline;qualified property located within each municipality and the unorganized borough.

theIf statea shallportion retainof the portionsqualified ofproperty theis taxlocated forwithin theboth proportiona ofborough theand pipelinea incity thewithin unorganizedthat boroughborough, thatthe isdepartment alsoshall outsidedevelop a municipality;methodology by regulation to allocate the tax revenue between the taxing jurisdictions.

and(d) (2)The 50assessment percent of the tax collectedlevied underon ASqualified 43.59.020(b)property tofor municipalities,purposes reserves,of andthis communitiessection inis thelegally unorganizedvested borough,in distributedthe ondepartment. a per capita basis.

Any dispute regarding the assessment, including the allocation or jurisdiction of the tax, shall be treated as an administrative decision under AS 43.56.024.

43.59.050.43.56.024.

Administrative appeals;appeals.

distraint(a) Notwithstanding AS 43.56.120, a decision by the department regarding the imposition or calculation of property.the tax levied under AS 43.56.022 may be appealed to the department for an informal conference HB0381a -5- HB 381 New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\A under AS 43.05.240, and a final decision may be appealed to the office of administrative hearings under AS 43.05.405.

(a)(b) AThe decisionState byAssessment theReview departmentBoard regardingestablished the imposition or calculation of the tax levied under AS 43.59.02043.56.040 maydoes benot appealedhave tojurisdiction theover department for an informal conference under AS 43.05.240, and a finalqualified decisionproperty. may be appealed to the office of administrative hearings under AS 43.05.405.

(b) The remedy of distraint of property set out in AS 43.20.270 applies to the tax levied in this section.

However, only the property subject to tax under AS 43.59.020 may be distrained.

43.59.060.43.56.025.

The alternativebenefits volumetricand alternative tax applicablestatus toprovided for a naturalqualified gasproperty project under AS 43.59.02043.56.021 terminatesand 43.56.022 terminate on January 1, 2032,2040, if commencementthe ofqualified constructionproperty ofhas thenot firstcommenced 730commercial milesoperations, ofas thedefined gasin pipelineAS has43.56.020(d), noton begunor bybefore that date.

43.59.070.43.56.026.

The department shall adopt regulations under AS 44.62 (Administrative Procedure Act) to implement thisAS chapter,43.56.021 - 43.56.027, including procedures for (1)throughput measuringreporting, throughput;the determination of original cost for allocation purposes, and the calculation of the rolling average.

(2)Regulations adopted under this section shall further define throughput reporting;for the purposes of AS 43.56.021 - 43.56.027.

(3) calculating the rolling average of throughput.

43.59.100.43.56.027.

In thisAS chapter,43.56.021 (1)- "commencement43.56.027, of(1) commercial"qualified operations"property" means thean firstAlaska flowliquified of natural gas throughproject aas naturaldefined gasin AS 31.25.390 and any other facilities or sub-projects attendant or related to the project thator deliversintegrated acarbon commercialcapture, supplyutilization, and storage infrastructure, that, at the commencement of naturalconstruction gasof tothe first major component of the Southcentralproject, was owned or Interiorfinanced areaby an instrumentality of the state;state or a joint venture, partnership, or other affiliated entity that included an instrumentality of the state that commenced construction on or after January 1, 2026;

(2) "gas"taxable pipeline"property" (A)has means a main natural gas pipeline from the outletmeaning flangegiven ofin CSHBAS 381(RES)43.56.210, -10-except HB0381bit Newincludes Textproperty Underlinedused [DELETEDfor TEXTthe BRACKETED]liquefaction 34-GH2038\Tof thenatural gas treatmentand plantcarbon oncapture, theutilization, Northand Slopestorage toinfrastructure theintegrated inletwith flangea of the liquefied natural gas plantpipeline locatedproject, inincluding thea Southcentralcarbon regiondioxide ofstorage thefacility state;under AS 41.06;

(B)"taxable doesproperty" notincludes includereal anyand gaspersonal linesproperty downstreamused ofor anycommitted offtakeby pointcontract betweenor aother gasagreement treatmentfor plantthe andqualified aproperty liquefieddescribed naturalin gasAS plant;43.56.020(d);

(3) "gas"throughput" treatment plant" means a facility and the relatedvolume activitiesof required to receive natural gas frommeasured aby Prudhoesumming Bayall unitvolumes gassold transmissionor line,otherwise adelivered Pointat Thomsoneach unitoutlet gas transmission line, or otherofftake facilities,point toalong treat the natural gas to pipeline specifications,as todefined disposein ofAS or31.25.390; deliver byproducts, to deliver liquid products for further transportation, and to deliver treated natural gas for transportation through a gas pipeline;

(4)"throughput" "liquefiedincludes natural gas plant"HB means381 a-6- facilityHB0381a forNew liquefyingText naturalUnderlined gas[DELETED andTEXT includesBRACKETED] structures,34-GH2038\A equipment,consumed underlyingas landfuel rights,for andthe otheroperation associatedof systems,a storage,liquefaction andfacility facilitiesbut fordoes off-loadingnot liquefiedinclude natural gas;gas consumed as fuel for pipeline compression.

(5) "natural gas project" and "project" means a natural gas project that includes, collectively, a Prudhoe Bay unit gas transmission line, a Point Thomson unit gas transmission line, a gas pipeline, a gas treatment plant, a liquefied natural gas plant, and a marine terminal;

in this paragraph, (A) "marine terminal" means a terminal and those facilities required to receive liquefied natural gas from the boundary of the liquefied natural gas plant for marine transportation, including auxiliary vessels used in the operation of the terminal;

(B) "Point Thomson unit gas transmission line" means a natural gas transmission line from the outlet flange of the Point Thomson unit production facility to the inlet flange of the gas treatment plant;

and (C) "Prudhoe Bay unit gas transmission line" means a natural gas transmission line from the outlet flange of the Prudhoe Bay unit central gas facility to the inlet flange of the gas treatment plant;

(6) "spur line" (A) means (i) a natural gas transmission or lateral line that branches from the main gas pipeline for the primary purpose of HB0381b -11- CSHB 381(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T delivering natural gas to a local community or utility distribution system;

and (ii) compressing and metering equipment and interconnection facilities related to the transmission or lateral line described in (A)(i) of this paragraph;

(B) does not include infrastructure used for the export of natural gas or lateral lines not necessary for delivering natural gas to a local community or utility distribution system;

(7) "throughput" (A) means (i) the volume of natural gas measured by summing all volumes sold or otherwise delivered at each outlet or offtake point, as along the gas pipeline, transported through a gas treatment plant or carbon capture facility, or processed by a liquefied natural gas plant, as applicable;

and (ii) natural gas consumed as fuel for the operation of a liquefaction facility;

(B) does not include natural gas consumed as fuel for pipeline compression.

17.9.

ASThis 14.17.510(d),Act 14.17.990(6)(B);takes effect immediately under AS 01.10.070(c).

ASHB0381a 29.45.050(aa),-7- 29.45.085;HB 381 New Text Underlined [DELETED TEXT BRACKETED]

AS 37.14.900;

AS 43.56.210(5)(B)(vi);

AS 43.59.020, 43.59.030, 43.59.040, 43.59.050, 43.59.060, 43.59.070, and 43.59.100 are repealed.

* Sec.

18.

AS 37.05.610 is repealed.

* Sec.

19.

The uncodified law of the State of Alaska is amended by adding a new section to read:

REQUIRED REPORT:

PHASE TWO OF THE ALASKA LIQUEFIED NATURAL GAS PROJECT.

(a) Before a final investment decision is made on phase two of the Alaska liquefied natural gas project, the Alaska Gasline Development Corporation shall deliver a report to the senate secretary and the chief clerk of the house of representatives and shall notify the legislature that the report is available.

The report must include (1) a discussion and review of the effects and effectiveness of this Act on the CSHB 381(RES) -12- HB0381b New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T Alaska liquefied natural gas project;

(2) if applicable, suggestions for additional changes to law related to the Alaska liquefied natural gas project, before implementation of phase two.

(b) In this section, (1) "Alaska liquefied natural gas project" has the meaning given in AS 31.25.390;

(2) "phase two" means a phase of the Alaska liquefied natural gas project that includes a liquefied natural gas plant, as defined in AS 31.25.390, and other related infrastructure required for the export of liquefied natural gas.

* Sec.

20.

The uncodified law of the State of Alaska is amended by adding a new section to read:

APPLICABILITY.

The adjustment for inflation of the volumetric tax, required under AS 43.59.020(c), added by sec.

16 of this Act, applies January 1 after the first full year of tax under the rates set out in AS 43.59.020(b), added by sec.

16 of this Act.

* Sec.

21.

The uncodified law of the State of Alaska is amended by adding a new section to read:

CONDITIONAL EFFECT:

BILL;

NOTIFICATION TO THE REVISOR OF STATUTES.

(a) Sections 1 - 5, 9, 11, 13, 15, 16, 19, and 20 of this Act take effect only if, before July 1, 2056, the commissioner of revenue determines that (1) each owner of property that could be taxable under AS 43.59.020, added by sec.

16 of this Act, has committed to (A) deposit $40,000,000 into a designated community impact fund with the following conditions:

(i) the fund administrator shall pay an impacted municipality from the fund 25 percent of the anticipated costs to the municipality related to construction of the gas pipeline;

(ii) in addition to the payments under (i) of this subparagraph, an impacted municipality may submit to the fund administrator additional actual costs related to the effects of construction for reimbursement from the fund;

(iii) the fund administrator shall pay reimbursements under (ii) HB0381b -13- CSHB 381(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T of this subparagraph to impacted municipalities at least quarterly;

(iv) the fund shall be administered by the primary owner who contributes to the fund;

(B) negotiate a project labor agreement for the construction of the gas pipeline;

in this subparagraph, "project labor agreement" means a comprehensive collective bargaining agreement between the owner of the gas treatment plant, carbon capture facility, liquefied natural gas plant, or gas pipeline and the appropriate labor representatives to ensure expedited construction with labor stability by employing qualified residents of the state;

and (2) each owner of property that could be taxable under AS 43.59.020, added by sec.

16 of this Act, who would be responsible for constructing a spur line has committed to construct the spur line;

to meet the requirement of this paragraph, the owner shall (A) on or before completion of construction of 730 miles of the gas pipeline, timely and in good faith begin all necessary permit applications and take action on any other regulatory requirements necessary for the construction of the spur line, including, if the Regulatory Commission of Alaska has jurisdiction over the tariffs, (i) initiating a tariff proceeding;

and (ii) filing with the commission for systemwide tariff treatment for the spur line;

and (B) begin construction on a spur line within one year after receiving all permits and meeting the necessary regulatory requirements described in (A) of this paragraph.

(b) If the commissioner of revenue determines that the conditions in (a) of this section have been met, the commissioner of revenue shall notify the revisor of statutes in writing within 30 days after making the determination.

(c) In this section, (1) "gas pipeline" means a gas pipeline, as defined in AS 31.25.390, that is expected to be subject to the alternative volumetric tax under AS 43.59.020, enacted by sec.

16 of this Act;

(2) "impacted municipality" means the North Slope Borough, Fairbanks North CSHB 381(RES) -14- HB0381b New Text Underlined [DELETED TEXT BRACKETED] 34-GH2038\T Star Borough, Denali Borough, Municipality of Anchorage, Matanuska-Susitna Borough, and Kenai Peninsula Borough;

(3) "spur line" means a spur line, as defined in AS 43.59.100, enacted by sec.

16 of this Act, that serves the City of Fairbanks and the Fairbanks North Star Borough;

(4) "systemwide" has the meaning given in AS 43.59.030(b)(5)(A), enacted by sec.

16 of this Act.

* Sec.

22.

The uncodified law of the State of Alaska is amended by adding a new section to read:

CONDITIONAL EFFECT:

EDUCATION FUND.

Section 6 of this Act takes effect only if (1) a constitutional amendment to art.

IX, Constitution of the State of Alaska, establishing an education fund and allowing the proceeds of a state tax or license to be dedicated to and deposited into the fund by law is passed by the Thirty-Fourth Alaska State Legislature and approved by the voters at the 2026 general election;

and (2) the conditions in sec.

21(a) of this Act are met.

* Sec.

23.

The uncodified law of the State of Alaska is amended by adding a new section to read:

CONDITIONAL EFFECT:

TAX SUNSET.

Sections 10, 12, 14, and 17 of this Act take effect only if the conditions in sec.

21(a) of this Act are met.

* Sec.

24.

Sections 7, 8, 18, and 21 - 23 of this Act take effect immediately under AS 01.10.070(c).

* Sec.

25.

If, under sec.

21 of this Act, secs.

1 - 5, 9, 11, 13, 15, 16, 19, and 20 of this Act take effect, they take effect on the day after the date the commissioner of revenue determines that the conditions in sec.

21(a) of this Act have been met.

* Sec.

26.

If, under sec.

22 of this Act, sec.

6 of this Act takes effect, it takes effect on the later of (1) the day after the date the 2026 general election is certified;

or (2) the day after the date the commissioner of revenue determines that the conditions in sec.

21(a) of this Act have been met.

* Sec.

27.

If, under sec.

23 of this Act, secs.

10, 12, 14, and 17 of this Act take effect, they take effect January 1, 2056.

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