By an 11-9 vote, the Alaska Senate moved to close the Hilcorp loophole as part of a gas pipeline bill on the last day of the legislative special session.

The Senate approved the bill 12-8. The House did not bring it up, however, and the special session ended. The next special session begins Saturday.

Afterwards, in an angry exchange videoed by the Alaska Landmine outside Gov. Mike Dunleavy’s office and posted online, Sen. Bill Wielechowski and GOP legislators argued about including the tax change in the gasline bill.

Wielechowski supported the tax that would apply to Texas billionaire Jeff Hildebrand and others in the oil and gas business.

“We did the process. We passed the bill. We sent you the bill,” said Wielechowski to Rep. Jeremy Bynum of Ketchikan, who began to walk away. “You don’t like it? Vote against it.”

“Vote for the Texas billionaire,” said Wielechowski.

Bynum turned back and said, “It’s not voting for a Texas billionaire” and claimed Wielechowski was not telling the truth.

“You go make that decision Jeremy,” said Wielechowski. “I’m telling the truth. What am I not telling the truth on?”

Three other Republicans nearby, including Mike Prax, clad in Carhartts and carrying a hardhat to show he was ready to “Build the Line!”, witnessed the exchange was being recorded and wanted Bynum to stop arguing and leave.

“Go ahead and vote up or down whether you want to give a billion dollars in tax breaks to a Texas billionaire,” said Wielechowski, now speaking to all four Republicans.

“That’s the decision that you guys will make. Go ahead. Go vote on that. I look forward to that. And go back to your districts and defend that. Defend killing the pipeline for the people of Alaska so that you can you can protect the Texas billionaire. Go vote right now,” Wielechowski said.

“We will,” said DeLena Johnson.

They didn’t. The House did not meet Friday night and the session ended.

Gov. Mike Dunleavy claimed at a Friday night press conference that the amendment killed the bill. The amendment should not have been “jammed” into the bill. He complained at length about politics derailing the gasline bill.

Extending the oil tax laws to Glenfarne and other oil and gas companies is the easiest oil tax vote in the history of oil tax votes.

The provision would mean that Hilcorp and other firms with a similar structure would pay the same tax as ExxonMobil and ConocoPhillips, a tax they avoid because the corporate structure was not envisioned by the Legislature decades ago when tax laws were written.

Earlier, Anchorage Sen. Matt Claman, who is running for governor, opposed closing the Hilcorp loophole as he has in the past. He has given different excuses about this.

Fairbanks Sens. Robb Myers and Mike Cronk voted against closing the loophole, while Sen. Scott Kawasaki voted to end the tax break for the company owned by the Texas billionaire.

The House rejected an effort to end the Hilcorp loophole in April on a 17-23 vote.

At the time, Rep. Chuck Kopp, the majority leader, joined with minority republicans and Rep. Alyse Galvin, Rep. Robyn Frier and Rep. Carolyn Hall to preserve the loophole.

“This policy creates uncertainty at the exact moment Alaska needs more energy development,” said Kopp.

He was joined in opposing the bill by Reps. Alyse Galvin, Robyn Frier, Carolyn Hall and the 19 minority Republicans. Kopp repeated his complaints Friday night and opposed the tax amendment during the Dunleavy press conference.

Hilcorp would not be the only oil and gas company subject to the income tax, but it would be the largest by far.

Even Dunleavy has supported closing the loophole in the past, a position he later abandoned.

On Aug. 5, 2021 and again on Aug. 10, 2021, Revenue Commissioner Lucinda Mahoney testified that Dunleavy would support ending the Hilcorp loophole, reducing oil tax credits and taxing digital businesses if the Legislature approved them first.

In a followup 9-page letter on October 1, 2021 to legislators, there was no mention that anything Mahoney had said about Dunleavy’s support for revenue measures was false.

No one suggested that Mahoney lied to the Legislature or was mistaken about Dunleavy’s position until early 2025. These were not off-the-cuff remarks by Mahoney. She repeated them at two meetings five days apart.

Filling the Hilcorp loophole would not be a major change to the tax structure, though Hilcorp claims that is the case.

“Some of our oil and gas producing companies are not paying corporate income tax due to the way that their legal structure is set up. We are proposing that those entities begin to pay the corporate income tax and establish parity between the oil industry,” Mahoney said in 2021.

Closing the Hilcorp loophole is long overdue to establish parity, as Mahoney said five years ago.

Predictably, the oil companies complained about the amendment to close the Hilcorp loophole, claiming that the Legislature should not increase “taxes on the very companies needed to invest in Alaska.”

This conflicts with with the oil companies claimed in 2020 when they spent at least $25 million telling Alaskans that defeating an oil tax initiative would “SAVE JOBS and the PFD.” They said that the Legislature is the proper place to write the rules on taxes.

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Senate votes to close Hilcorp loophole again, as House, Dunleavy object