Legislative Session Ends with Changes for Energy, Healthcare, and Resource Industries
Cecoffman | Dreamstime
The second regular session of the 33rd Alaska State Legislature adjourned in the early hours of its 121st day in Juneau. The state Senate adjourned at 11:47 p.m. on Wednesday, shortly before the midnight deadline, and the House continued work during the first 15 minutes after midnight, passing five more bills.
In the end, lawmakers finished an operating budget for the fiscal year that begins in July. The session also brings new legal frameworks for energy, health insurance, and natural resources industries.
Billions and Bonuses
The most significant legislation enacted on the final day was the $6 billion operating budget. Including federal and fee-funded programs, the budget directs $11.3 billion in spending for state services. The budget sets the Permanent Fund dividend at $1,360 for every eligible recipient, plus a $295 “energy relief” bonus.
A separate capital budget for more than $4 billion in construction and renovation projects passed earlier this month. The governor may choose to eliminate or reduce items in either budget with line-item vetoes.
One of the more contentious issues during the session was education funding. Lawmakers approved $175 million in extra funding, equivalent to a one-time $680 per pupil increase in the regular funding formula. Additional one-time increases for student transportation and reading programs for kindergarten through 3rd grade are also included.
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Energy Legislation
A bill to establish a regulatory framework for carbon dioxide storage, House Bill 50 (HB50), became a vehicle for broader changes to address a looming energy shortage in Southcentral. The final version combines carbon storage, new regulation of natural gas storage, state financing for new Cook Inlet natural gas development, and expansion of geothermal energy. Governor Mike Dunleavy requested the carbon sequestration bill as an opportunity for the state to earn revenue by storing carbon dioxide in depleted underground oil and gas basins.
The governor also proposed HB307, which adjusts electricity transmission fees and exempts independent power producers from local taxes, the same as nonprofit cooperatives. It streamlines taxation and tariff policies to make new and existing electrical generation projects more affordable, further incentivizing renewable power projects like solar and wind farms.
To address energy concerns outside of the Railbelt region, the legislature enacted Senate Bill 98 (SB98) earlier in the session. It transfers management of the Power Cost Equalization trust fund, which subsidizes the high cost of electricity in rural Alaska, to the experienced financial wizards at the Alaska Permanent Fund Corporation.
To finance sustainable energy development statewide, HB273 establishes an Alaska Energy Independence Fund, also known as a Green Bank. The fund would operate as a subsidiary of the Alaska Housing Finance Corporation. The bill also grants the corporation the authority to issue mortgage loans for single-family homes to Alaskans who cannot qualify for low interest mortgage programs offered by other government agencies.
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Health Insurance Options
To explore demonstration projects focused on addressing health-related needs and support services for Alaska Medicaid recipients, the legislature enacted HB344. It authorizes the Alaska Department of Health to apply for a section 1115 Medicaid waiver, allowing the department to employ evidence-based, Alaska-specific strategies to improve health outcomes and lower the cost of Medicaid to the state treasury.
Alaskans can try out “concierge care” under SB45. Also known as “direct healthcare agreements,” patients buy a subscription to a doctor’s office for a monthly fee, rather than insurance paying for regular checkups or other services. The sponsor, Wasilla Senator David Wilson, compares it to a gym membership. The new law exempts subscription healthcare from insurance regulations. Wilson says it offers a cheaper alternative to traditional health insurance.
Healthcare costs for commercial fishing medical claims would be covered by the Fishermen’s Fund. SB93 boosts allowable payouts to $15,00 per injury for disablement, up from the previous $10,000 maximum. Because commercial fishing in Alaska is exempt from traditional workers’ compensation insurance, the Fishermen’s Fund serves as a stand-in.
Move Alaska Forward
To grow more local crops, the Food Freedom Act makes reforms to the agriculture industry. Sutton Representative George Rauscher introduced HB251 to exempt homemade foods from labeling and inspection requirements, and it became a vehicle for the governor’s proposed CROP Act. It updates loan limits from the Alaska Division of Agriculture’s Agricultural Revolving Loan Fund and increases the categories of loans to include food manufacturing and shipping, and it allows refinancing of loans.
To support the timber industry, the legislature last August enacted SB87, creating a state lumber grading program. By training local sawmill operators, the program could reduce dependence on out-of-state construction material.
“We are proud to have passed several bills this session that move Alaska forward,” Dunleavy says. “My administration will spend the interim preparing new initiatives for next session on public safety, education reform, expanding the agricultural sector, and much more.”
The governor was particularly proud of HB66, which became an omnibus crime reform bill. A person who sells or manufactures fentanyl or methamphetamine can be charged with second-degree murder if a user dies as a direct result of those drugs. The legislation also strengthens the crime of stalking in the first degree, and sex offender registration requirements. It allows multidisciplinary child protection teams to investigate instances of sexual contact between young children. It also amends Criminal Rule 6 to allow witnesses to summarize testimony of other witnesses at grand jury.
