HB 289 Summary

• Exempts lessees of liquefied natural gas (LNG) storage facilities on state land from lease payments for the first 10 calendar years of commercial operation, provided the facility meets specified requirements.

• Establishes a refundable tax credit up to $15,000,000 or 50 percent of facility costs for owners of LNG storage facilities that commence commercial operation before January 1, 2020, and are regulated as utilities under AS 42.05.

• Classifies liquefied natural gas storage service as a regulated utility service in Alaska, defining LNG storage facilities and their components including reservoirs, pipes, compressors, liquefaction/gasification plants, and monitoring systems.

• Requires utilities storing LNG to reflect the value of lease payment exemptions and tax credits in reduced storage rates charged to customers.

• Imposes recapture provisions requiring repayment of credits if an LNG storage facility ceases commercial operation within nine years of commencing operations, calculated on a prorated basis.