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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 on this 28th day of the legislative session. It looks a lot more like winter here even with many hot issues under consideration.
I was very happy to hear reports that the tanker in Nikiski was floated and that there does not appear to be any oil spilling. Once again the necessity for preventative measures is brought to everyone’s attention.
The fluoride resolution, HCR 5, which I sponsored, moved out of Community and Regional Affairs and on to the HESS Committee with all “Do Pass” recommendations. People were pleased that this resolution enables, but does not require, communities to promote healthy teeth.
I introduced two new bills this week. HB 418 revises the mining tax structure and HB 425 protects private landowners allowing recreational use of their lands.
The Senate-combined methamphetamine/marijuana/steroid bill was not accepted by the House and was sent back to the Senate with the request to remove their amendments. The Senate will probably not agree to recede from their amendments so the bill will proceed to a House/Senate conference committee to see if they can work out an acceptable compromise before we see it again. I voted not to accept the combined bill.
The administration conducted another presentation of the long-awaited Production Profit Tax rewrite of the State oil tax structure with a range of possible tax and credit percentages. Although this gives us a little clearer idea, much analysis will need to be performed to look for unintended consequences under various future scenarios.
It was good to be able to visit with Matt Shadle from Homer on his extended visit, also Eileen and Bill Bechtol from Anchor Point.
HB 418 – Mining Production Tax
House Bill 418 realizes our constitutional duty by providing a reasonable share of Alaska’s non-renewable resources to benefit all Alaskans. Through the institution of a 3% production tax on all mined products, the bill establishes more parity between the State’s resource industries and guarantees a reliable source of revenue to the State.
HB 418 replaces the existing Mining License Tax, AS.09.65.010, and applies the tax to all mined products at the value immediately following their removal from the mine.
Alaska’s mining industry bears a light tax burden compared to Alaska’s other high value resource industries. State revenue generally amounts to about 7/10 of 1% of the mined resource value, while an additional 1% is paid to municipalities. State revenue from oil and gas amounts to about 20% of total production value, while an additional 2 % is paid to municipalities. State revenue from Fisheries amounts to about 2.8% of the total production value, while an additional 2.5% is paid to municipalities.
It is certainly time to revise our mining tax structure to address the changing complexion of the mining industry in Alaska. In the new HB 418 tax structure a threshold value before reporting is required will alleviate the current tax-filing requirement on recreational and very small operators. A higher mineral value threshold before the tax is applied will ensure that marginal and initial operations will not be delayed. And finally, deferment of the tax for the first 3 years of production will aid in capital cost payback but will not deprive the people of Alaska of their constitutionally mandated benefit.
HB 415 – Recreational Land Use Liability
House Bill 418 encourages the recreational use of private lands by limiting the liability of landowners who allow free public access to their lands. By delineating landowner responsibilities, confusion is eliminated and individuals are able to make a clear decision when considering opening their land to the public. This could be important to the development of ski and other recreational trails across the Kenai Peninsula.
State Affairs Committee
SB 186, sponsored by Senator Ralph Seekins (R-Fairbanks) amends the Executive Branch Ethics Act by establishing a $10,000 “bright line” test for when a personal or a financial interest creates a significant conflict of interest. This bill would allow a financial interest that exceeds the significant standard to be placed in a blind trust or managed account. The bill also imposes a civil penalty of up to $5,000 for anyone who discloses the subject of an executive branch ethics complaint before the case has been found to contain probable cause by the personnel board. The committee has questions about these points and the bill was held pending additional information from the sponsor.
HB 160 originally sought to prohibit the state, the University of Alaska and all municipalities, school districts and regional education attendance areas from expending money to influence the outcome of ballot propositions. A new version of the bill allows municipalities to use funds to influence the outcome of a municipal, but not statewide, ballot proposition as long as the funds have been specifically appropriated for that purpose by a municipal ordinance.
HB 347 prevents drivers with valid insurance from being charged with driving without a license simply because they neglect to return required paperwork. Currently, if an insured driver is involved in an automobile crash and does not receive and return the required post-accident proof of insurance to the Department of Motor Vehicles, that driver’s license may be revoked. HB 347 provides that it is a defense to the charge of driving without a license if the driver had the legally required auto insurance at the time of the crash. It also allows the DMV to send the paperwork to the address on the police report rather than the DMV databanks, which may not be current. Most people do not realize that they are required to send a change of address to DMV within 30 days of moving.
HB 238 has been substantially changed from last session when it was the House bill to modify the PERS/TRS systems. Municipalities face staggering future employer contribution rates to the Public Employees Retirement System (PERS). Without assistance many will have to cut essential community services. CSHB 238 proposes a long-term solution to assist communities with the growing unfunded liability payments. It creates a Past Service Offset Account (PSCOA) from which payments would be made into the PERS pension fund on behalf of municipalities as new defined contribution hires enter the workforce. Over the course of 25 years the PSCOA would reduce employer contributions to the unfunded liability by approximately 44%. Please check my website for additional information on CSHB 238.
The committee heard a very interesting report from DEC on their Village Safe Water Program. The 2004 audit had discovered a number of deficiencies and several questions remain. We are also investigating why the rules and project design are being changed after projects have been approved and funded. This has delayed several local projects. The wastewater division said they anticipate continuing this disruptive practice. I was able to establish during the DEC Finance Subcommittee hearing that the drinking water division incorporates anticipated rule changes so they will require no projects changes after funding.
This week four bills are on tap: HB 34 seeks to clear the record on cases that have been set aside by the court; HB 399 establishes an office of elder fraud and assistance within the Office of Public Advocacy to investigate complaints involving elder fraud and to provide assistance to older Alaskans; HB 349 establishes a commission to make recommendations on legislative pay; and HB 413 requires that all cigarettes sold in Alaska are designed to extinguish when they are not being actively smoked.
Health Education & Social Services Committee
In HESS this week we moved HB 357, which changes the way persons with disabilities are referred to. We heard and held HB 312 that addresses Fetal Alcohol Syndrome (FAS) in Alaska. It requires that every newborn be screened for early diagnosis, which can improve the risks associated with FAS later in life. HB 312 also encourages an aggressive public awareness campaign requiring schools and hospitals to distribute information on this 100% preventable condition.
We also heard an overview of the Medicare Part D prescription drug program and how the State is working to educate seniors and others about how to access all the resources available to them. Although Medicare part D is a Federal program, please call my office if you are confused about any aspect of it. Although we may not be able to answer your questions, we can direct you to someone who can.
Ways and Means Committee
We continued our review both HB 374 and HB 375; committee bills intended to address the PERS/TRS liability by creating an account and identifying continuing revenue sources. Our discussion was accompanied by a continuing presentation by the Division of Retirement and Benefits. The bills are being combined and revised to eliminate the identification of funding sources. On Wednesday we also held brief hearings on both HB 223, a gas reserves tax, and HB 63, revising the Economic Limit Factor of the states oil tax structure. Both received little testimony.
Our Friday meeting focused again on HB 63 and HB 223. Although I find both bills interesting in principle, I expressed my concerns that neither has received the necessary expert attention. The legislature must thoroughly understand the potential economic impacts of the measures before passing either. I voted to pass both bills with the understanding that they will go to Resources where we I hope to see more in-depth technical analysis. Both bills moved from committee.
Resources Committee
Last week in House Resources we heard an overview on the Murkowski Administration’s proposal to replace the current oil and gas production tax with a net tax. No legislation has come forward on this proposal, but the Administration may submit legislation in the near future.
This week the committee will hear three bills, one resolution and three overviews.
HB 360 directs the Department of Environmental Conservation to regulate small public water systems to ensure safe drinking water. This legislation defines a small public water system as having fewer than fifteen service connections or as regularly servicing fewer than twenty-five individuals.
HB 380 updates the powers of the Department of Environmental Conservation and the State Veterinarian to allow them to respond to an outbreak of animal borne illness, such as avian flu.
HB 395 extends the official state wild fire season. Currently the season begins on May 1st. However, the largest uncontained fire on the Southern Kenai Peninsula occurred prior to May last year. This bill, which I co-sponsored, would allow the state to become involved in fire prevention starting on April 1.
On Wednesday we will hear overviews of the Alaska Mining Association, the Alaska Minerals Commission, and the Division of Mining, Land and Water within DNR.
On Friday we will hear HCR 29. This resolution asks on the Administration to update the Bristol Bay Area Plan to include an updated consideration of the effects of developing the Pebble deposit. The recently revised Bristol Bay Area Plan does not contain a discussion of the deposit based on the most recent data collected by Northern Dynasty. The “East Zone” discovered near the original site is believed to contain a gold deposit so substantial that all previous plans for the mine are currently under modification. This resolution seeks to allow the public and the legislature to address potential mine impacts using a more current management plan for the area. It also requests that no permits be issued for development of the mine until the updated plan is prepared, public testimony on the plan is considered by the Commissioner of DNR, and a report on potential conflicts is submitted by DNR to the legislature.
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".
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. .
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 328
(907) 465-4963
Ian Laing
Scheduling, Ways and Means, HB 415, HB 418
(907) 465-2689
Katie Shows
Health Education and Social Services, PERS/TRS, Budget, HCR 5, HCR 28, HB 238
(907) 465-2028
Rep. Paul Seaton
House District 35
(800) 665-2689
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