ACEC Alaska Bill Tracking Spreadsheet - February 19, 2024
Article IX, Section 12 of the Alaska Constitution and AS37.07.020 direct the governor to prepare and release a proposed operating, capital, and mental health budget by December 15. Additionally, the statute requires the release of any proposed tax or revenue-raising measures, if any, along with a six-year capital spending plan and a 10-year estimated sources and uses revenue/spending plan.
Also, on or before December 15, the Alaska Department of Revenue will issue its Fall Revenue Forecast. Given that Alaska's revenue stream is largely based upon North Slope oil production, the department's forecast represents a baseline for the legislature when reviewing the budget. The 2023 Spring revenue forecast estimated oil prices to average $73/barrel and production to average 485,000 barrels/day through the fiscal year. Since July 1, oil prices have averaged between $84-$85, with production perhaps slightly lower than projected.
In 2020, the governor proposed legislation to allow lotteries in Alaska and in 2023, legislation related to carbon capture sequestration, suggested the potential for significant new state revenues. The legislature did not act on the gaming legislation and passed one of the carbon capture bills, but expert testimony downplayed the likelihood of significant new revenues. The remaining carbon-related legislation is available for action beginning in January. For now, Alaska's revenues remain tied to oil production and the Permanent Fund.
The legislative approved FY2024 budget included a revenue surplus. Adding the governor's June veto reductions and higher oil prices, the state surplus will be significantly higher. The likelihood of a veto override is slim, given the high vote threshold (45/60). However, there are supplemental budget needs and considerable demand for additional education and capital funds, so expect a spirited budget process.
The Second Session begins January 16, and the 121st day is May 15.
The 2nd Session of the 33rd Alaska State Legislature will convene on January 16, 2024. Unless extended, the Session will adjourn on or before May 15, 2024.
There were no state elections in 2023; however, due to the resignation of Representative Josiah Patkotak (House District 40), the governor will be making an appointment to fill that vacant seat. Former Representative Patkotak became Mayor of the North Slope Borough following the October municipal election.
Since the beginning of the fiscal year (July 1), oil prices have trended higher than the $73/barrel forecast, which, if higher prices hold, would result in a considerable revenue surplus. The Department of Revenue will release a Fall Revenue Forecast in mid-December. The governor will release his proposed FY2025 operating & capital budget on or before December 15.
An area of particular focus during the 2nd Session is the budget, including the increased challenge for the AK Permanent Fund to grow while distributing a 5% Percent of Market Value (POMV). State government operations rely heavily upon POMV distribution, as does the dividend. Given that 2024 is an election year, I expect adjournment to be intense, much like the end of the 1st Session earlier this year.
Closer to ACEC interests, I expect a concerted effort by the administration and legislative leadership to advance the matter of assuming state primacy on Section 404 permitting. Senate Joint Resolution 12 (SJR12) was introduced on May 12 and passed the Senate on May 15! The resolution seeks to secure federal funding for state costs in managing the permitting function and request the creation of a stand-alone EPA office for Alaska, separating it from the current Region X office. House Speaker Tilton assigned SJR12 to one committee of referral in the House. An early signal could come in the governor's proposed Department of Environmental Conservation budget.
National wanted to report on a recent meeting we had with Mayor Landrieu's team at the White House, and specifically on some action items they've asked us to assist with. The focus of the meeting was the infrastructure roadshow, where we walked through a number of recent EEA award winning projects as options for roadshow events that showcase industry innovation in transportation, water, green buildings and other transformational projects. As we've discussed before, the roadshow has a number of key goals – showcasing how our industry delivers value in the built environment and inspiring future generations to pursue a career in engineering are among them -- but a key goal is showcase examples of successful projects as a way to lay the groundwork for the next big infrastructure program to replace IIJA. The White House team gets this and going forward will continue to work with us and our association partners to provide high level speakers in support of these events.
During the meeting, the White House team also asked us for any intel on new project starts and groundbreaking events that might be good candidates for the President or others in the administration to attend. They're particularly interested in manufacturing facilities (that might be happening because of the CHIPs bill for example) or water projects (including western water and projects for the tribes), but they seemed very open to all options with respect to projects that are moving forward because of IIJA or other recently enacted initiatives. This leads us to action item #1 and where we need your help -- please alert us to any projects in your respective states that are moving ahead because of IIJA or other recently passed initiatives (such as the Inflation Reduction Act or the CHIPs Act), as we'll want to take advantage of the opportunity to showcase not only the impact of the project to the community but also the critical role our member firms play in making the project a success.
We also discussed workforce issues -- they're very much aware of ACEC's advocacy in support of more H-1B visas, but the White House team was particularly interested in learning more about how our firms are working with 2-year colleges to design curriculums that meet the needs of engineering firms looking to fill non-engineer positions, such as surveying, CAD operators, and other support positions. We have some examples of this already but could use your help in identifying additional examples in your states of how our industry is working with 2-year colleges and trade schools as part of the effort to solve the talent challenge – action item #2.
Action item #3 is Permitting Reform – while Congress and the Administration look at options for streamlining NEPA, the White House has asked us to identify the top 2-3 permitting challenges and reforms needed at the state level, examples of challenges and regulatory bottlenecks that are within the governor's purview to fix. Please let us know if you have specific examples that we can share with Mayor Landrieu's team.
Senior Vice President for Advocacy