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Contact Information:
Toll Free:(800) 665-2689
In the Homer Area:(907) 235-2921
Via Mail or in Person: 345 W. Sterling Hwy., Suite 102B
Homer, Alaska 99603
Fax:(907) 235-4008
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Email:
Greetings from Juneau! We have settled into our new apartment just a few blocks from the capitol building and I'm enjoying the short morning walk. My excellent office staff has returned and all were able to find equally close housing. This first week has seen a flurry of activity. In addition to my normal schedule I was able to attend an interesting presentation by ex-DNR commissioner Irwin and ex-Oil and Gas director Meyers on potential problems with the gas line negotiations. The School District Cost Task Force met again but was still unable to establish an agreeable position on the new Area Cost Differential numbers.
I was pleased to hear in the Governor's speech that the administration will be moving away from permitting mixing zones in salmon spawning areas. However, the new regulations would allow pollution mixing zones in all other fish spawning areas including trout, landlocked salmon, Arctic Grayling, sheefish, Artic Char, etc. For more information on this subject, read the following section on Mixing Zones.
Many of us in the House are concerned about the Governor's large proposed budget increases and want to ensure that any new programs are created with a continuing source of funding. There is increasing agreement that the oil tax structure needs to be updated but no specifics of the Governor’s proposed net profits tax are yet available. I've included some additional details on the Governor’s proposals in a later section.
HB 328 - Mixing Zone Legislation
I have introduced legislation that would retain the former regulatory prohibition on pollution Mixing Zones in freshwater spawning areas. Representative Carl Gatto (R-Palmer), Representative Kurt Olson (R-Kenai) and Representative Gabrielle LeDoux (R-Kodiak) are prime co-sponsors of this legislation. Senator Gary Stevens (R-Kodiak) has introduced the same legislation in the Senate.
HB 328 Prohibits the Alaska Department of Environmental Conservation from authorizing a mixing zone in a lake, stream, river or other flowing fresh water body where anadramous or resident fish are spawning or have existing redds, (or fish-egg nests). With the exception of "lake," this language is taken directly from the current regulations at 18 AAC 70.255(h). The 2005 ADEC mixing zone proposed regulation includes lakes along with streams, rivers and other flowing fresh waters.
HB 328 clarifies that the prohibition on mixing zones in spawning areas does not apply when spawning occurs in the water of an entirely man-made holding pond or channel.
This bill will be heard in the House Fisheries Committee on Friday, January 20th at 8:30am and will be teleconferenced.
Link to House Bill 328:
http://www.legis.state.ak.us/basis/
get_bill.asp?session=24&bill=hb328
Alaska Department of Environmental Conservation Mixing Zone Regulation
On January 12th, the Murkowski Administration adopted a third and final version of regulations governing pollution-mixing zones in Alaska in response to our proposed legislation.
In these new regulations mixing zones will not be authorized in fish spawning areas, but this applies only for salmon. The recently adopted language at 18 AAC 70.240(e) does not explicitly prohibit mixing zones in salmon rearing areas. Mixing zones will be allowed in areas where spawning is not present as long as DEC and the permit applicant determine that the mixing zone will not "... adversely affect the present and future capacity of an area to support spawning, incubation, or rearing of any of the five species of Pacific Salmon". The new regulations also authorize mixing zones in the spawning areas of many resident freshwater fish species where mixing zones were prohibited under the old regulations.
Language in section (a) of the recently adopted regulation clearly puts the burden of proof on the permit applicant to determine that salmon spawning is not occurring in the area of discharge, and that the mixing zone will not adversely affect the future capacity of the area to support spawning, incubation or rearing.
A troubling issue is language in Section (i) of the new regulations, which states that mixing zones may be authorized (apparently forever after) if, "... spawning was not occurring at the time of the previous authorization, but, successful spawning, incubation, and rearing has occurred within the mixing zone subsequent to the previous authorization of that mixing zone." This appears to indicate that if the permit applicant does not document fish spawning (they do not have to document egg incubation, or rearing) at the time of first permitting, they are allowed to retain their mixing zone authorization if spawning fish are found in the area afterward.
I presume DEC will explain these changes at the House Fisheries Committee during the Friday hearing for HB 328.
Link to Alaska Department of Environmental Conservation Mixining Zone Regulations:
http://www.dec.state.ak.us/water/wqsar/
trireview/pdfs/Mixing_Zones_with_TitlePage1.pdf
Governor's Address
The Governor gave both his State of the Budget and State of the State addresses this week. While noting the progress his administration has made in resource development and education funding, the Governor proposed spending the $1.2 billion revenue surplus on public education, the natural gas pipeline project and transportation. About $400 million of the surplus would be used to acquire the state a 20% share of a gas pipeline. $565 million would go towards K-12 education, and $1.3 billion for highway improvements - $185 million of which would be federal funds for the proposed Knik Arm and Gravina Island bridge projects. Obligatory increases include $104 million in Medicaid, $65 million in salary increases for State employees and $33 million in ferry, roads, and airport maintenance. The Governor also unveiled a new plan for opening ANWAR through a nation-wide advertising campaign, and announced that the state would move forward with the building of a prison in the Matanuska-Susitna Borough.
House State Affairs Committee
During this first week we heard two bills, as well as overviews from the Department of Public Safety and the Department of Military and Veterans Affairs Disaster Preparedness Program.
HB 23 would permit the Alaska Legislative Council to develop specifications and solicit proposals for a new Legislative Hall. This bill allows proposals from municipalities and boroughs with at least 30,000 residents. The bill draft currently before the committee repeals the FRANK (Fiscally Responsible Alaskans Needing Knowledge) Initiative. This initiative requires that voters around the state know and approve the bondable costs of a Capitol or legislative move.
Pension Obligation Bonds
The committee also began hearings on HB 278, the bill that gives the Municipal Bond Bank the authority to issue Pension Obligation Bonds.
The unfunded liability of the PERS/TRS system was valued at $5.6 billion on June 30, 2004 and is projected to increase to $6.5 billion by July 1st of this year. Employers are facing payments upwards of 32% of salary in PERS and 50% in TRS by the year 2011. Pension Obligation Bonds have been proposed as a mechanism for helping employers cover these liabilities. The bonds would allow employers to borrow funds at a fixed interest rate and to invest those funds in the PERS/TRS retirement fund as a lump sum payment of all or a portion of their unfunded liability. The employer then makes fixed payments to the lending institution, rather than the retirement system over a period of 25 years. For example, if an employer has borrowed at a fixed rate of 6% and the retirement fund grows at the projected rate of 8.25%, the employer reduces their payments by the dollar amount of the 2.25% difference compounded over 25 years. While these bonds may help employers to meet their obligations, they can backfire if the retirement fund earns less than the cost of borrowing the money. Since there is a possibility that the bonds may not cover their cost, it is important that we fully weigh the risk of allowing political subdivisions this ability.
This Tuesday we will continue hearings on HB 278 and begin hearing HB 273; a bill that delays payment of Permanent Fund Dividends to those that are out of state on allowable absences until they return to Alaska for one year. On Thursday the committee will hear HB 34, a bill that seeks to clear or expunge the record of a conviction that has been set aside following a suspended imposition of sentence.
Ways and Means Committee
The committee heard two bills this week, which we had looked at during last session, and continued discussing options for addressing the PERS/TRS unfunded liability.
HB 223, introduced by Representative Croft, attempts to ensure construction of the gas pipeline by taxing known gas reserves currently under lease. Under the bill, companies would be taxed on gas leases until the gas pipeline is built. Once gas is flowing, taxes paid on the reserves would be credited against subsequent royalty and gas payments.
HB 63, introduced by Representative Gara, reforms the existing Oil Production Tax structure. The production tax – sometimes called a severance tax - was one of the major components of the state’s oil and gas tax structure. Though the formula is somewhat complex, the tax is generally based on a percentage of the net production value for oil produced. This percentage is determined by multiplying the base percentage (15%) by what is called the Economic Limit Factor (ELF). The ELF factor is a number between 0-1, which acts as a depletion allowance for oil fields. Many fields now, however, pay little to no production tax. HB 63 establishes a minimum threshold for the production tax rate and adds an additional factor to the ELF calculation, which ties the tax rate to the price of oil. This allows the state to benefit from higher oil prices, while still providing oil producers with generous allowances during periods of lower prices.
Following Bills
All bills can be accessed through the state's Bill Action and Status Inquiry System (BASIS). You can see what committee a bill is in, when it will be heard, how committee members voted, and much more. You can view all bills relating to your specific areas of interest by selecting "Subject Summary" from the menu on the right. Access BASIS through the link below, or by doing a search for "BASIS Alaska". http://www.legis.state.ak.us/basis/start.asp
Live on the Web
Most committee hearings can be seen and heard on Gavel-to-Gavel, which is broadcast on both local access TV and on the Internet. You can also access online archives from their website. http://www.ktoo.org/gavel/schedule.cfm.
Contact Us
If you would like to speak to me regarding a specific issue, it is helpful to first get in touch with the member of my staff handling related issues. You can click on their email addresses to send them a note, or just give us a call at the office. Please provide your full name, address and phone number on any correspondence with the office. Your time and effort are much appreciated.
Louie Flora
State Affairs, Resources, Fisheries, HB 25
(907) 465-4963
louie_flora ''@'' legis.state.ak.us
Katie Shows
Health Education and Social Services, HB 20, HB 24
(907) 465-2028
katie_shows ''@'' legis.state.ak.us
Rep. Paul Seaton
House District 35
(800) 665-2689
representative_paul_seaton ''@'' legis.state.ak.us # # # |
