AlaskaHB 26334th Legislature - Second Session (2026)HouseWALLET

APPROP: OPERATING BUDGET;FUNDS;SUPP

Sponsored By: HOUSE RULES BY REQUEST OF THE GOVERNOR

Became Law

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Bill Overview

Analyzed Economic Effects

45 provisions identified: 34 benefits, 3 costs, 8 mixed.

Permanent Fund dividend: $1,000 per person

The law funds a $1,000 Permanent Fund Dividend for each eligible person for FY2027. It also sets a possible one‑time energy relief payment: if FY2026 unrestricted revenue is over $6.3 billion, $96 million goes to the dividend fund, $111 million goes to school grants, and any remainder (up to a $700 million cap in total) goes to the budget reserve. The state also moves Permanent Fund earnings and deposits money into principal as required.

Big boost for rural health care

About $272.17 million in federal funds go to the rural health transformation program. The money supports services across FY 2027, FY 2028, and FY 2029.

State worker pay, bonuses, pensions

The law funds salary and benefit changes in listed union contracts for FY 2027. Bonuses can be paid if unions sign letters of agreement and the budget office meets reporting rules. OMB must share each agreement and costs within 30 days and report payments by Feb 1 and Sep 30, 2027. The state adds $106.323 million to the public employees’ pension and $163.926 million to the teachers’ pension. It also sets aside $1,436,710 to pay elected officers’ retirement benefits.

Funding to run Alaska ferries

The state provides $174.963 million to operate the Alaska Marine Highway System in FY 2027 and FY 2028. If federal receipts fall short in FY 2027, up to $49.5 million from the general fund can backfill the gap.

More money for disasters and wildfires

The disaster relief fund gets $48 million from the state plus about $9 million in federal receipts. The fire suppression fund gets about $86.6 million for FY 2027 to fight fires. This strengthens Alaska’s disaster and wildfire response.

More money for public schools

The state funds K–12 for FY 2027. It puts about $1.27 billion into the public education fund and $72.83 million for student transportation. Small and rural districts get $19.60 million. Districts named in the law get $29.10 million for energy relief. About $467,050 from donations is granted to districts. DEED can use extra federal education money above section 1. Money from selling Mt. Edgecumbe land goes to the school’s operations.

Big funding for state housing loans

The Alaska Housing Finance Corporation gets large funding for home loans. $800 million supports housing loans that are not subsidized by the corporation. $30 million supports subsidized housing loan programs. AHFC also expects $54.275 million available in FY 2027; $2.5 million stays for bond debt service and the rest goes to the general fund. This increases loan capacity for buyers and builders.

Medicaid money cannot fund most abortions

The Department of Health cannot spend its budget on abortions that are not mandatory Medicaid services under AS 47.07.030(a). The department spends only on Medicaid mandatory services, unless a new U.S. Supreme Court ruling changes precedent. Optional services are allowed only if they are in the approved state Medicaid plan. People seeking non‑mandatory abortions lose state‑funded coverage and may face higher out‑of‑pocket costs.

Power cost equalization stays funded

The state provides up to $56.07 million from the endowment for power cost equalization in FY 2027. If that is not enough, up to about $7.98 million more can come from endowment earnings. This helps lower electric bills in eligible communities.

Backstop for fishermen and injured workers

If the fishermen’s fund, the workers’ comp guaranty fund, or the second injury fund need more than first budgeted for FY 2027, the law provides the extra money. This keeps benefit payments going for injured workers and fishermen.

Higher pay for private duty nursing

The law raises Medicaid private duty nursing rates. Each RN service increment now pays $30, up from $20. Each LPN or LVN increment now pays $26.25, up from $18.75. To estimate your yearly change, multiply your annual service increments by the per‑increment increase.

Medicaid and vaccine funding protected

Federal Medicaid money received in FY 2027 is used to run Medicaid services that year. The state sends about $20 million in vaccine assessment receipts to the vaccine fund. The Health Commissioner can move up to $5,000,000 inside the department but cannot move money out of Medicaid Services. The Commissioner must report any transfers by September 30, 2027.

More funding for job training

The state gives $8,663,500 to run job training in FY 2027. $6,930,800 goes to the State Training and Employment Program and $1,732,700 to Job Centers. Technical and vocational funds are shared among named schools and the university, and unused balances on June 30, 2027 go to the unemployment fund. If AVTEC gets more contributions than budgeted, the extra money also supports AVTEC operations.

State pays required debt and leases

The state pays principal, interest, fees, and lease payments on outstanding bonds and leases in FY 2027. The law lists the amounts and projects covered.

More money for cities and ports

The state boosts local aid. It gives $10 million for community assistance and about $20 million more in proportional payments for FY2027, and adds $50 million to the community assistance fund. Cities and schools get unspent national forest funds for FY2027. Local governments receive shared tax and fee refunds, including fisheries business tax ($20.903 million), landing tax ($5.014 million), electric/telephone cooperative tax ($4.408 million), liquor license fees ($785,000), and aviation fuel tax refunds (about $175,000). Ports of call share about $31.014 million from the 2026 commercial vessel passenger tax; if the account has less, payments are reduced proportionately.

Budget flexibility and insurance reserves

Agencies can use federal and other program receipts above amounts in this Act if they follow state review rules. The law restores prior‑year deposits back to the original operating funds and ratifies listed past expenditures. It sets reserve targets: $5 million for the working reserve and $50 million for the state insurance catastrophe reserve, using lapsing balances. It also allows up to $18.5 million to keep a minimum claim reserve in the group health and life benefits fund for unplanned AlaskaCare costs.

How federal mineral money is split

For FY 2026 federal receipts after certain grants, the law sets shares: 25% to the Alaska Permanent Fund principal, 70% to the small and REAA school fund, 0.5% to the public school trust, and 4.5% to the power cost equalization endowment.

State pays its bond debt service

The state pays required debt service and interest on listed general obligation bonds for the year ending June 30, 2026. It also pays trustee fees and any required arbitrage rebates. The law lets the state cover short‑term cash gaps and repay when bond proceeds arrive.

Highway and aviation funds will lapse

Money allocated for highways and aviation returns to the general fund on August 31, 2027. This can reduce funding for road and aviation projects after that date.

State pays Kwigillingok fuel loan

The state pays $351,902 to clear Kwigillingok’s bulk fuel loan balance. The payment covers principal and interest under the bulk fuel and bridge loan programs. This removes the listed loan obligations for the community.

Faster Community Assistance in rural areas

Community Assistance payments go out as fast as possible after the fiscal year starts. Rural communities get paid first. All payments must be done by August 1, 2026.

More help at farmers markets

The state gives $300,000 to support SNAP Market Match, WIC farmers market benefits, and the senior farmers market program. The funding covers FY 2027, FY 2028, and FY 2029.

Funding boosts for fishing and seafood groups

Starting July 1, 2026, the state pays industry groups amounts equal to taxes and assessments. About $4.858 million from the 2025 salmon enhancement tax goes to qualified regional associations in FY 2027. About $2.278 million from the 2025 seafood development tax goes to regional seafood development associations in FY 2027. About $300,000 from the 2026 dive fishery assessment goes to the regional dive association in FY 2027. Any fisheries disaster receipts received in FY 2027 (estimated $0) go to Fish and Game for relief in FY 2027–2029.

Arts plate fees support arts programs

Fees from the “celebrating the arts” license plates collected in FY2026, minus the cost to issue the plates (about $80,000), go to the Alaska State Council on the Arts for FY2027. The money supports arts programs statewide.

Civil legal aid gets court fee share

Ten percent of Alaska Court System filing fees from FY2025, about $306,380, goes to the civil legal services fund. The fund gives grants to groups that help low‑income people with civil legal problems.

Money for mine and well cleanup

The state directs small amounts to land and well cleanup. It uses about $150,000 of interest from a Cook Inlet reclamation bond, about $30,000 from the mine reclamation trust, and about $50,000 from a bond settlement. The funds pay for reclaiming affected mines and lands.

More funding for outdoor safety and access

Boating and marine safety get fee‑based support. Sixty percent of boat receipts (about $272,298, capped at $300,000) funds boating safety. Forty percent (about $181,531, capped at $200,000) funds the Alaska Marine Safety Education Association. A special plate fee (about $7,440) supports the Alaska Scholastic Clay Target Program. The fish and game fund also gets about $1.318 million from range, permit, and access‑site fees.

More money for crime victim claims

The crime victim compensation fund gets more money for FY2027. About $85,000 in program receipts and $1,005,480 from ineligible dividend amounts are added. This helps pay eligible victims’ claims.

Muldoon Road wall repairs and report

Transportation must repair and maintain the block wall along Muldoon Road. A report on repairs, partner agreements, and maintenance plans is due by December 1, 2026. This is meant to improve local safety and upkeep.

Oil spill prevention and cleanup funds

The law funds oil and hazardous substance prevention and response accounts for FY2026 and FY2027. It moves surcharge receipts and account balances, totaling about $15.9 million for FY2026 and about $17.6 million for FY2027. This money supports prevention and cleanup work statewide.

Small grants for veterans memorials

The law provides about $8,676 from the veterans’ memorial endowment for FY 2027. It also directs about $7,300 from veteran license plate fees (after costs) to build and care for veterans memorials.

Election fund gets HAVA money

The state puts $982,800 into the Help America Vote Act election fund for the fiscal year. $163,800 comes from the general fund and $819,000 from federal receipts. The money supports eligible election activities.

Funds to run elections and services

The state sets aside $2,870,300 to run the statewide primary and general elections in FY 2027 and FY 2028. If central service cost allocations fall short, up to $2,000,000 of lapsed funds can support core state services in FY 2027 and FY 2028.

Funds for governor ops and payment processing

The law provides $7,831,500 for the Governor’s operations from January 1, 2027 through June 30, 2027. It also lets agencies pay needed amounts to collectors and credit‑card processors from the funds where payments are deposited. This keeps executive operations and receipt processing running.

Backup funds for retirement actuarial costs

If retirement system funds are not enough, up to $500,000 from the general fund can pay plan sponsor and actuarial costs in FY2027. This applies only after allowable payments from retirement system sources are used.

Plan to decentralize state payroll

The Department of Administration must submit a plan to decentralize payroll by December 1, 2026. The plan must cover workloads, needed positions, funding, and training and support. It aims to improve payroll operations for state workers.

Grant for critical minerals accelerator

The University of Alaska Fairbanks gets $15.75 million for a critical minerals accelerator in FY2027. $750,000 comes from university receipts and $15 million from federal receipts. This funding only applies if the National Science Foundation awards a related grant in 2026.

Funding for state legal cases

The law funds state legal needs. It provides up to $75,000 in FY2027 for special counsel to the Commission on Judicial Conduct. It adds $2,120,251 in FY2026 to pay judgments and settlements. It provides $4,000,000 for the Vail v. State litigation across FY2026–FY2028.

Corrections must seek out-of-state prison data

Corrections must ask private out‑of‑state prisons for information on beds, costs, services, and who they accept. A public report (without proprietary data) is due to finance leaders by December 1, 2026. The data supports future planning.

Road insulation rules review by 2026

The transportation department must review its rule for using rigid insulation board in road work. Any change must follow University of Alaska Fairbanks research and other evidence. The department must report any policy change by December 1, 2026. This may change future road construction methods.

Flexibility to shift family services funds

The Commissioner of Family and Community Services may move up to $5 million between the department’s accounts. Money cannot be moved out of the Office of Children’s Services. Any transfers must be reported by September 30, 2027.

AIDEA dividend and aerospace receipts

AIDEA declares a $17 million dividend for FY2027; after deductions, the balance goes to the general fund. AIDEA’s unrestricted loan interest and other receipts are allocated among its revolving, energy, and Arctic infrastructure funds under board rules. The Alaska Aerospace Corporation may use any FY2027 federal and corporate receipts above the base appropriation for operations.

Budget controls and capital funds protected

For FY 2027, the state tightens some budget rules and protects capital money. It bars increasing appropriation items based on new Alaska Gasline Development Corporation receipts for the year ending June 30, 2027. It reduces each department’s FY 2027 appropriation to clear prior‑year negative balances of $1,000 or less, starting July 1, 2026. It also keeps listed capital fund appropriations from lapsing, starting July 1, 2026.

Permanent Fund to close Anchorage office

The legislature directs the Permanent Fund to decommission its Anchorage office and not open new offices without added budget. The Fund must report any spending tied to the Anchorage office by February 17, 2027. This limits office costs and requires transparency.

Public retirement funds fees and transfers

Beginning July 1, 2026, about $13.6 million is paid from public retirement funds for external investment profit‑sharing fees in FY 2027. Up to $500,000 of budget authority can be moved among named funds: Group Health and Life (1017), Public Employees Retirement (1029), Teachers Retirement (1034), Judicial Retirement (1042), and National Guard Retirement (1045). This adds fee costs but also gives funds limited flexibility to manage money.

Sponsors & Cosponsors

Sponsor

HOUSE RULES BY REQUEST OF THE GOVERNOR
Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 17 • No: 3

Senate vote • 5/7/2026

PASSED Y17 N3