Senate approves bill to raise millions for state, while House signs energy efficiency program

A bill to raise as much as $37 million for the state of Alaska through the sale of its royalty oil has been approved by the Alaska Senate.

In a 17-0 vote Friday, lawmakers approved Senate Bill 30, which now goes to the House for consideration.

Under the state’s oil royalty system, Alaska receives a portion of all oil produced from state land. The state can accept that royalty “in kind” (as oil), or it can accept it “in value” (as a cash payment). While the state typically accepts in-value royalties, it has occasionally taken royalties in kind, usually to support local industry.

SB 30, if approved by the House and signed into law by the governor, would sell royalty oil to Petro Star, a refiner based in Alaska and owned by the Arctic Slope Regional Corporation. The sale will earn Alaska between $29 million and $37 million more than if it accepted a royalty in-value.

Sen. Click Bishop, R-Fairbanks; Sen. Mia Costello, R-Anchorage; and Sen. Mike Dunleavy, R-Wasilla, were absent from the vote. All other senators voted in favor of the bill.

Shortly after the Senate voted to send SB 30 to the House, the House voted to send a bill to the Senate.

House Bill 80, approved in a 36-1 vote, permits municipalities to create programs that loan money to businesses that make energy efficiency improvements with the loan.

The thought behind HB 80 is that people who own commercial property are discouraged from making improvements because they take a long time to pay off. An energy improvement, such as a heat pump or better insulation, might cost $5,000 but only save $100 per month on energy costs. The owner would have to own the building for four and a half years for it to pay off. If a building owner sells the building before paying off the improvements, he or she loses money.

Under the new program, the building owner would take out a loan from the municipality. An assessment would be added to the building’s property tax bill. That assessment would stay on the bill even if the building’s owner sells the building.

Thus, property owners would be encouraged to make improvements even if they don’t intend to keep the building for an extended period, because they wouldn’t be liable for the entire cost.

Rep. David Eastman, R-Wasilla, was the sole vote against HB 80. Rep. Matt Claman, D-Anchorage; Rep. Mark Neuman, R-Big Lake; and Rep. Lora Reinbold, R-Eagle River, were absent from the vote.

HB 80 advances to the Senate for consideration.

Gas tax hike advances

On Thursday, the Senate Transportation Committee approved a plan proposed by Gov. Bill Walker to triple Alaska’s gasoline tax by 2018. Senate Bill 25 now goes to the Senate Finance Committee for consideration.

Alaska has the lowest state gasoline tax in the nation, and even if SB 25 is implemented, its tax would remain below the nationwide average. The measure also raises taxes on boat fuel, jet fuel and aviation gasoline.

If approved by the Senate and the House, SB 25 would raise $40 million more for the state in 2017 and $80 million more per year from 2018 onward.

Uber drives onward

The Senate Labor and Commerce Committee has approved a bill that would allow ride-sharing services like Uber and Lyft to operate in Alaska.

Senate Bill 14, sponsored by Sen. Mia Costello, R-Anchorage, advances to the Senate Finance Committee for consideration. Hearings have been scheduled for 9 a.m. Monday and 9 a.m. Wednesday.

SB 14, if enacted, would change Alaska’s insurance and workers’ compensation laws so Uber and Lyft drivers would be classified as independent contractors, not company employees, under state law.

Other committee action

Bills on the move Thursday and Friday:

• The Senate State Affairs Committee approved Senate Bill 5, sponsored by Sen. Kevin Meyer, R-Anchorage, on Thursday. SB 5 now goes to the Senate Judiciary Committee for consideration. If approved by the full Senate, House and governor, SB 5 would prevent political action committees controlled by legislators from accepting contributions during a legislative session.

• The Senate Health and Social Services Committee has approved Senate Bill 20, sponsored by Sen. Kevin Meyer, R-Anchorage. The bill now goes to the Senate Judiciary Committee. If approved by the Senate, House and governor, SB 20 would list U-47700, a synthetic form of heroin known as “pink,” as a controlled substance. That would make it illegal to sell, use, purchase, possess, make, transport or deliver “pink” in Alaska.

• House Bill 69, eliminating the Workers’ Compensation Appeals Committee, was approved by the House Labor and Commerce Committee on Friday. HB 69 was introduced by the governor and now advances to the House Judiciary Committee.

• The House Labor and Commerce Committee also approved House Bill 48, sponsored by Rep. Sam Kito III, D-Juneau, on Friday. The bill advances to the House Finance Committee. If approved, HB 48 would keep the state board of registration for architects, engineers and land surveyors through 2025. The bill also adds a landscape architect to the board.

Contact Empire reporter James Brooks at or call 419-7732.

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