HB 271 Alaska House · 34th Legislature (2025-2026)

An Act relating to the royalty rate for the Kitchen Lights Unit; and providing for an effective date.

HB 271 modifies the royalty rate for specific natural gas leases in Alaska's Cook Inlet's Kitchen Lights Unit, affecting leaseholders with division numbers 389196, 389197, 389198, 389507, 389514, 389515, and 389923. It sets a fixed 3% royalty rate on gross production value starting January 1, 2026, to make continued gas production economically viable amid declining output and rising costs. The bill also allows the department to audit royalty calculations and permits termination of the rate modification if leases were improperly assigned. This change aims to secure reliable, affordable energy for Southcentral Alaska residents and utilities while maximizing state economic benefits from the gas leases.

Bill status in committee 1 of 4 stages cleared

Introduction

Jan 2026

Committee Review

Floor Vote

Governor

Introduced Jan 23, 2026 Last action May 8, 2026

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What changed between versions

CSHB 271(RES) → CSHB 271(FIN) · 5 edits

MODERATE

The bill was amended to broaden its scope from a specific 'Kitchen Lights Unit' to the entire 'Cook Inlet sedimentary basin' and to include Interior utilities in its findings. It added a new requirement for lessees to prove cost savings to end-users before receiving a royalty rate reduction and established a mandatory five-year reporting system to monitor the financial impact of these changes.

Scope change

The bill's applicability expanded from a single specific unit to the entire Cook Inlet sedimentary basin, and the effective date for the broader basin royalty rate was set for January 1, 2027, rather than 2026.

SCOPE

The legislative findings and royalty rate provisions were changed to apply to all leases in the Cook Inlet sedimentary basin instead of just the specific 'Kitchen Lights Unit' leases.

ELIGIBILITY

A new condition was added requiring lessees to demonstrate that the reduced royalty rate will result in actual cost savings for end-users of natural gas.

REQUIREMENT

A new requirement mandates that the Commissioner of Natural Resources prepare and submit a detailed five-year report on production, finances, and the effects of the royalty relief to the legislature.

The bill now explicitly includes Interior utilities alongside Southcentral utilities in the legislative findings regarding energy supply needs.

TIMELINE

The timeline for the broader basin royalty rate reduction was set to begin January 1, 2027, while the specific Kitchen Lights Unit rate begins January 1, 2026.

Floor votes

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

May 8, 2026

Committee

(H) REFERRED TO RULES

lower

May 6, 2026

Lower · Passed

(H) Moved CSHB 271(FIN) Out of Committee

lower

Feb 23, 2026

Lower · Passed

(H) Moved CSHB 271(RES) Out of Committee -- Delayed to 15 minutes Following Session --

lower

1 primary · 0 co-sponsors