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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
Website:
Email:
Greetings from Juneau! Committee meetings are in full swing with a number of important issues being considered. Two of my committees are considering options for addressing the massive debt in our state retirement systems. Since earnings on deposited money generates 75% of the money used to pay future benefits, current under-funding creates a much larger problem in the future.
Another issue receiving a lot of attention lately is the state's current oil tax system. There is a general agreement that the current tax structure is outdated and in need of revision. Both Representatives Gara and Croft have offered bills dealing with this issue, and this week in Resources Committee we had our first glimpse of the Governor's new tax proposal. There are many details to examine in all of these propositions and I look forward to further hearings.
I had the pleasure of meeting with constituents Arthur Walters, from Seward and Ken Castner from Homer this week. If you or someone you know from the district is planning a visit, please let my office know since we may be able to help with arrangements.
HB 328 – Ban on Mixing Zones in Spawning Areas
was heard in the House Fisheries Committee on Friday. Testimony on the recently revised Mixing Zone regulations was also offered by the Departments of Natural Resources, Fish and Game, and Environmental Conservation. The committee had many questions for the agency staff at the meeting. One of these questions dealt with the language found in section (j) of the new regulation, which directs the Department of Environmental Conservation to work with the Department of Natural Resources and the Department of Fish and Game in determining spawning areas "both spatially and temporally". According Fish and Game Commissioner, McKie Campbell, spawning areas have historically been interpreted as existing in a physical area in a river, but only during a portion of the year. The language referring to spatial and temporal spawning areas was not included in either of the two previous Mixing Zone regulatory proposals and knowing what constitutes a Pacific salmon “spawning area” in the new regulations is quite important. We are crafting a change to allow continuation of existing municipal wastewater Mixing Zones for the life of existing facilities.
Our office has received many constituent letters and e-mails on this important issue. HB 328 will be heard again on Friday, January 27th in House Fisheries.
Resources Committee
On Wednesday we met in joint session to hear a presentation on the Governor's new oil tax proposal. This is one of the more interesting propositions to surface addressing the state’s need for oil tax restructuring.
The current tax situation is based on the production value of oil produced. This percentage is determined by multiplying the base percentage (15%) by what is called the Economic Limit Factor, or ELF. The ELF factor acts as a depletion allowance for oil fields. Many fields, however, including some of the largest in North America, pay little to no production tax.
The Governor has proposed replacing this structure with a Percent Profit Tax, or net tax. Though we have yet to see the details of this proposal, I believe we need to proceed rapidly with these restructuring efforts independent of the gas line negotiations.
State Affairs Committee
The committee looked at two bills this week, both of which received a great deal of interest.
authorizes the Alaska Municipal Bond Bank to issue Pension Obligation Bonds for municipalities in order to help with the unfunded liabilities of their retirement systems. If allowed, the bonds would be issued at a fixed interest rate around 6%. The borrowed funds would then be placed in the PERS/TRS retirement fund as a lump sum payment towards their unfunded liability. These bonds would be successful only if the PERS/TRS fund performs at or above the rate at which the bonds were issued. It is important to note that HB 278 does not actually issue these bonds, but simply allows communities the option to use them.
I question if municipalities should require a vote of the people before they incur the debt of Pension Obligation Bonds the same way they do for General Obligation Bonds. An additional concern with HB 278 is that many small communities do not have a steady stream of income such as property tax, so a pooling mechanism may be added which would increase their ability to issue bonds.
attempts to provide an incentive for trained and educated Alaskans to return to the state by holding dividends claimed under allowable absence until they reestablished physical residency in Alaska.
The Legislature has created thirteen allowable absences through which individuals may claim dividends while residing outside the state. These are provided with the good faith understanding that individuals intend to return and will contribute to the betterment of the state.
While these allowable absences are well intentioned, many individuals never return to Alaska. The Permanent Fund Division estimates that the average rate of return for individuals who are out of state on allowable absences, to be only 30%. Over a ten year period the Division estimates that the sum paid out to individuals that never returned to the state was approximately $154 million dollars. This indicates a problem with the basic philosophy of using the stated, “intent to return,” as an accurate proxy for determining that dividends go to Alaskan residents, the requirement of the Permanent Fund statute.
HB 273 does not affect an individual's ability to qualify for the dividend under an allowable absence, but asks that they return to the state in order to collect that money. Any dividends left unclaimed would then revert to the fund and be added to the dividends of other qualifying residents.
Critics of the measure have claimed that it would unfairly punish service personnel and students, which depend on dividends as income. However, in many cases withholding dividends would actually benefit claimants. Students, for instance, would not need to claim the dividend as income, allowing them to qualify for more financial assistance. They would then have a nest egg waiting for them in Alaska when they reestablished residency. In addition to helping to keep money in the Alaskan economy, this incentive would hopefully help attract educated and well-trained individuals back to the state.
On Tuesday of next week we will hold confirmation hearings for Scott Nordstrand as the appointed Commissioner of the Department of Administration; William Walters, to serve on the Alaska Public Offices Commission; and for William A. Corbus as the new Lieutenant Governor Designee. We will also resume our discussion of - Retirement System Bonds, and - Executive Branch Ethics. HB 194 establishes a threshold of $10,000 as the limit of financial interest a public officer may have in a company his actions affect that will be considered insignificant.
On Thursday, we will continue working on , and will also begin hearings on . This legislation seeks to create a commission that will make recommendations regarding legislative pay. This commission would consist of three Alaskans appointed by the President of the Senate, and three Alaskans appointed by the Speaker of the House of Representatives.
Health Education and Social Services Committee
On Tuesday, representatives of Petersburg Mental Health Services made a presentation of their program, which has helped treat chronic mental illness and addiction in adolescents through mixed media storytelling. One teen read his own writings and others showed short movies constructed around their own individual experiences. These were truly touching and helped give depth to the perspective legislators held on addiction and mental health conditions. They were very much appreciated.
Next week we will revisit , which limits mandatory overtime for nurses, and will have our first hearings on , clarifying statutory references to diabetes.
Ways and Means Committee
On Wednesday we continued our discussion of HB 223, the so-called, "Gas Line Now Act". As I had written last week, the bill tries to ensure construction of the gas pipeline by taxing known gas reserves currently under lease. 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. We did not vote on the bill but will take up the discussion again at a later date.
On Friday we looked at two bills created by the committee as ways for addressing the past service liabilities of the Public Employee and Teacher Retirement Systems. establishes a Retirement Benefit Liability Account, and provides for an annual dividend to be paid into that account by the Alaska Housing Finance Corporation. HB 375 also establishes a Retirement Benefit Liability Account, but provides for revenue to be generated from half of the annual earnings of the state’s Amerada Hess settlement account. Both measure will be revisited again as we continue our debate on the unfunded PERS/ TRS liabilities.
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
(907) 465-4963
louie_flora ''@'' legis.state.ak.us
Ian Laing
Legislative Assistant
(907) 465-2689
Ian Laing ''@'' legis.state.ak.us
Katie Shows
Health Education and Social Services
(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 # # # |
