Senate Resources, 4/22/26, 3:30pm

I call Senate Resources Committee meeting to order. Today is Wednesday, April 22nd, 2026, and the time is 3:30 PM. Please turn off your cell phones. Committee members present today: Senator Rauscher, Senator Kawasaki, Senator Dunbar, Senator Myers, Senator Clayman, and myself, Chair Giesel. I am expecting Vice Chair Senator Wilkowski along shortly.

He's away on other business. We have a quorum to conduct business. Thank you to Heather and to Chloe who are helping us out keeping the minutes and running the audio for us. The one item on today's agenda is Senate Bill 280, oil and gas property tax, and municipal tax. Today we're going to talk with mayors and city managers and folks like that related to, uh, the potential impacts they might foresee related to a gas pipeline project.

And near the end, uh, if there's time, we also have members of the Department of Natural Resources online for, uh, questions related to their jurisdiction. We also have online from AGDC Frank Richards and Matt Kissinger, it looks like. So starting out today, we're going to start with Mayor Chris Noel with the Denali Borough. Mayor Noel, can you hear us? Welcome.

If you would introduce yourself for the record and give us your thoughts.

Okay, Chair Giesel, can you hear me okay? Yes, very well. Okay, thank you. Well, and members of the committee, thank you for the opportunity to testify here on SB 280, the committee substitute. So I just, you know, I'll start by saying this, you know, I— we see this alternative volumetric tax as an important opportunity to enhance our current services and provide new services without imposing property taxes or raising existing tax rates.

As you all likely know, we're the only municipality along the gas line without a current property tax. And so, you know, we, under the previous, you know, under an all-or-nothing proposition, the previous rate of 6 cents per 1,000 cubic feet, it appeared workable. And I think the increase obviously works too. I wanted to speak broadly for a second. Just the— I just wanted to flag that this legislation would fundamentally alter our abilities as local governments to collect revenue to meet our current and future needs.

And, you know, I just— I would propose that project subsidies should be proportional to the benefit received and may not be— need to be or should be borne equally by the state and local governments. Unique resource demands, and we also have unique revenue mechanisms. A couple things— well, a few things I wanted to flag, things we like in the substitute. The increased rate obviously, you know, works, works well. It has— the substitute has the community impact fee program, and I understand that was modeled off of recommendations from the previous MAG board, Municipal Advisory Gas Board effort.

That works. We appreciate that, the certainty. One thing I wanted to raise, you know, it's a concern with the lag, and I think you all as a committee have kind of considered this. There's, you know, with a lag from it being based on actual miles of pipe constructed, you know, then the payments would follow the following year. That's going to lead to a delay when the impacts are going to be immediate.

And I'll just share, you know, based on estimates shared by Glenfard, construction could occur as soon as July 2026 through November 2029. And only a fraction of the impacts for here in the Denali Borough physically involve construction of pipe. There's other things like, you know, camps, laydown yards, temporary access roads, improvements to the easement, things like that. So I guess I just propose considering an alternative where the developer, you know, require the developer to implement some kind of community impact fee program. We could negotiate directly with them, and then I would, you know, I think we would encourage them to submit payments directly to municipalities prior to construction, investing in mitigation on the front end of development.

The ramp-up period was removed, and I'll just add that in general, as mayors, I think we were in support of the concept of not taxing instant gas a ramp-up floor of 250,000 cubic feet of gas per day. We felt like that included interstate gas plus a margin for short-term growth. We definitely support the, the anchorage, the inclusion of the Anchorage CPI index adjustment to the ABT. A couple other ideas would be a floor for that, like 1%, ceiling of 3.5%, or basing on a rolling average.

One thing I definitely wanted to flag, the removal of the broad-based preemptions of local revenue. We really value the certainty that the alternative volumetric tax is just in lieu, exclusively in lieu of property taxes, and that enables the Denali Borough to address some of the, some of the unique aspects for us specific land use agreements with the developer for temporary leases for those construction camps, pipe laydown yards, and then for a long-term easement for the pipeline itself. So I would think I mentioned in my last testimony, of the 87 miles of pipe in the Denali Borough, about 10 miles would cross Denali Borough municipal lands directly. Lastly, I just wanted to flag, with all due respect, we, we don't support the ABT or the Community Impact Payment flowing through the legislature subject to appropriation. Definitely have concerns with that as written, you know, and we just advocate for payments to go directly to the municipalities.

And I wanted to mention Community Impact Payments would be added on to the Community Assistance Program, formerly revenue sharing, and this is a perennial issue that we and other municipalities have advocated for and requires that consistent advocacy The program should be a reliable source of revenue for us in recognition of the partnership we share with the state, and the value has eroded over time. Um, last thing I wanted to mention is that the Denali Borough Assembly has broadly supported this project in the past. They have not considered it yet, the kind of the specifics of the legislation before you. We do intend to consider it at our main meeting, and I'd be happy to share the outcome of that meeting. And really, just thank you for the opportunity to share thoughts and feedback.

Very good. Thank you, Mayor Noel. Any questions for Mayor Noel? Senator Kawasaki. Thank you, Madam Chair.

Thank you for being online, Mayor. I had a question. Because you don't have a property tax, has the borough ever thought about instituting a property tax or even growing or annexing area that might be outside of your current boundaries?

Um, Senator Kawasaki, through the chair, no, I would say that, you know, that we have not really considered.