If the bill isn’t acceptable to Gov. Dunleavy and project developers, the governor could call lawmakers back into a third consecutive special session on the topic.
Sen. Bert Stedman, R-Sitka, seen at center left, and Sen. Lyman Hoffman, D-Bethel, at center right, listen to a presentation from Matt Kissinger, commercial director of the Alaska Gasline Development Corp., left, and Adam Prestidge, Glenfarne Alaska LNG president, right, at the Alaska State Capitol in Juneau on June 27.
JUNEAU — Lawmakers say they expect to vote Thursday on a new version of legislation providing a steep tax cut for the long-envisioned Alaska LNG megaproject.for the proposed 800-mile pipeline that would transport long-stranded North Slope natural gas to the Kenai Peninsula. Alaska LNG has proposed delivering gas in state starting in 2029, with exports to large Asian buyers starting in 2031.
, has been under discussion by a bicameral conference committee for weeks as legislators worked to reconcile the differing versions passed by the House of Representatives and Senate in mid-June at the end of the previous special session. The bill, meant to incentivize the construction of the gas line, would replace the state’s existing property tax with a so-called alternative volumetric tax, which would tax the amount of gas flowing through the pipeline, if it is built.
The conference committee initially planned to advance a compromise bill to the full Legislature on July 1, but that was postponed as debates on the contents of the bill continued. Lawmakers then planned to move a new version Wednesday afternoon, but that meeting was delayed shortly before it was canceled. Members are now scheduled to meet at 8 a.m. Thursday, when Rep. Calvin Schrage, the conference committee chair, said they expect to unveil the compromise legislation.
Bills sent from a conference committee to the House and Senate floors must be considered in an up-or-down vote, with no possibility for amendments. Rep. Calvin Schrage, I-Anchorage, left, reflects on comments by Rep. Justin Ruffridge, R-Soldotna, right, on the most recent version of a bill that would cut property taxes in an effort to facilitate the construction of the Alaska LNG project.
Members of the conference committee met Thursday, July 2, 2026, at the Alaska State Capitol building in Juneau during the second special session on the topic to discuss changes to the bill. The special session is scheduled to end Sunday. If the bill isn’t acceptable to Gov. Mike Dunleavy and project developers, the governor could call lawmakers back into a third consecutive special session.
Asked whether he would call another special session, Dunleavy said at the Capitol on Wednesday that “if this doesn’t work out, our chances are pretty good. ” Schrage, an Anchorage independent, said that some version of a pass-through entity provision is included in the bill, which would extend the state’s corporate income tax — currently applicable only to C corporations — to apply to S corporations and limited liability companies.
A majority of senators support applying the tax to oil and gas companies with that type of corporate structure, like gas line developer Glenfarne and major Alaska producer Hilcorp. But the House last monthThat part of the bill, known as the S-corp or pass-through entity tax, will look different from its previous form, Schrage said.
“It’s a true compromise piece of legislation. It helps to move the project forward while also addressing a tax loophole that we’ve heard pretty loudly from Alaskans they want addressed as part of this process,” Schrage said. Schrage said canceling Wednesday’s meeting was needed to review the legal draft of the bill and make any technical changes before it was “ready to put on the table for people to consider.
”The provision has been one of the primary sticking points throughout negotiations and could determine whether the bill has enough votes to pass.
“It all hinges on the S-corp tomorrow, and whether the votes are there in the Senate and certainly in the House,” said House Speaker Bryce Edgmon, a Dillingham independent and member of the conference committee, on Wednesday afternoon. House Speaker Bryce Edgmon at the Alaska State Capitol in Juneau on Monday, May 18, 2026. It’s unclear exactly when the Legislature is set to take a vote.
The Senate floor session has been delayed to an unspecified time. Edgmon said he will likely do the same in the House to accommodate caucus and leadership meetings after the new bill version is introduced.
“I hope that it does enough to bridge that divide that we’re able to get the 21 and 11 necessary to pass the bill” in the House and Senate respectively, Schrage said. “I hope it’s a bill that works and gets us a gas line and doesn’t stick it to other industry members,” Dunleavy said.
Proponents of taxing S corps say the provision is long overdue, and that the state should enact it to help bring in additional revenue as the state faces a structural budget deficit. They also argue it would make up for revenue lost under the agreed-upon tax break.
But Republican minority lawmakers argue the provision complicates what would otherwise be a “clean” bill to advance a project they say would help address Southcentral Alaska’s looming natural gas shortage while boosting the state’s economy.
“We cannot lose sight of why we are here,” Rep. Justin Ruffridge, a Soldotna Republican and member of the conference committee, said in a prepared statement.
“This isn’t about state government squeezing every last penny out of a pipeline that hasn’t even been built yet. ” Tim Fitzpatrick, a spokesperson for Glenfarne, said that Glenfarne had not seen the new version of the bill. He declined to comment on whether Glenfarne leaders had discussed the changes with conference committee members Wednesday. Schrage said lawmakers are growing weary of the special session process and hope to finish the bill this week.
“I think this is our opportunity to pass a bill, and if this bill does not pass or is vetoed, I think that will be the end of the discussion for this year, and we’ll be looking at taking this back up in January,” Schrage said.
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