The Alaska Senate Resources Committee adopted a revised gas pipeline bill Monday that doubles a proposed oil surcharge intended to fund maintenance along the Dalton Highway corridor while cutting local government property tax revenue by roughly 90 percent.

The committee substitute version H of Senate Bill 280 establishes a 30-cent-per-barrel surcharge on non-royalty oil, twice the 15-cent rate Governor Dunleavy proposed in Senate Bill 227 as part of his fiscal plan earlier this session. The surcharge would generate approximately $50 million annually, according to committee discussion, but falls short of the estimated $80 million needed for annual Dalton Highway maintenance.

Committee Chair Cathy Giessel said the increase responds to the federal government's plan to transfer the Dalton Corridor to Alaska for mining development, raising concerns about additional road impacts beyond the gas pipeline construction.

"We had concerns that there was going to be even more impacts to the Dalton Highway corridor that needs more updating in maintenance," Giessel said. "So that was part of why we raised the amount from what the governor had originally proposed."

The bill's central provision replaces property taxes on the natural gas pipeline project with an Alternative Volumetric Tax, reducing revenue to local governments by approximately 90 percent. Pipeline developers would benefit from the reduced tax burden, while municipalities along the pipeline route would see substantial revenue losses.

Revenue from the surcharge would flow into a new pipeline corridor maintenance fund available for legislative appropriation. The fund could be used for maintenance and operations costs along the Dalton Highway corridor or other impacted areas.

Senator Myers raised concerns that the appropriation structure could allow the new revenue to replace existing highway funding rather than supplement it.

"While the state was bringing in more money, it wouldn't have actually helped with that, help actually improve the situation on the Dalton Highway or any of the other roads in question," Myers said, referencing earlier testimony from the Department of Transportation.

Giessel acknowledged the bill does not include formulas or statements of intent to prevent the new funds from replacing current appropriations. "To the extent that there should be either a formula or a statement of intent or something like that, on adding to current funding for the Dalton Highway, we have not added that," she said.

Senator Dunbar noted Alaska's constitutional prohibition on dedicated funds limits the legislature's ability to guarantee the surcharge revenue supplements rather than replaces existing highway appropriations.