Assembly member presses mayor on tax treatment of proposed LNG import terminals

Assembly member Dunn asked whether proposed LNG import terminals would be taxed at the same 20-mil oil-and-gas rate and whether such facilities would provide property taxes to the borough, prompting a cautionary reply from the mayor at the Kenai Peninsula Borough policies and procedures committee meeting.

The mayor said import terminals—citing examples such as Agrium and Marathon—are treated as Title 29 properties rather than the "43.56" classification Dunn referenced. He added that none of the three proposals he had seen had formally asked the borough for special treatment, and he warned that a separate Glenfarn bill, as written, would include an import terminal in a 90% reduction in property taxes, which he described as "problematic and unfair competition."

The exchange began when Dunn noted he had read of three different proposals for an import facility and asked, "if an import facility starts, is that taxed at the same rate as the other oil and gas, the 20 mil state of Alaska rate, would that import facility be providing the borough with property taxes?" The mayor replied, "The import facilities are like Agrium or Marathon facilities... They are title 29 properties," and cautioned that legislative changes could limit the borough's ability to negotiate tax treatment locally.

The mayor said his "best case outcome is not losing a local municipality's ability to negotiate a Title 29 property," and stressed concern that picking winners and losers through state legislation would disadvantage some proposals. Committee discussion did not include a formal motion or vote on taxation policy or any of the projects; the mayor said he would postpone a fuller public briefing on AKLNG-related matters because of public interest.

The committee moved on to new business after the exchange; no formal action on taxation or on the Glenfarn bill was recorded in the meeting transcript.