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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 57th day of the legislative session.
We are experiencing an exhaustive meeting schedule similar to what we would expect at the end of session. Our regular Resource Committee meetings considering the oil tax structure have been lasting from 4 to 5 hours per day with additional meetings on Saturday. This week we will be hearing from our legislative international oil consultant starting Monday at 12:30. This should clarify many of the important issues and will be carried on Gavel-to-Gavel. Later in the week we will be developing amendments to ensure the production tax is a good one for Alaska. If you would like a peek at the details, you can get all the information you ever wanted at,
This month we will have two high school interns each spending a week with us. I asked the Homer and Seward High Schools to each use a competitive process for selecting a student interested in getting some hands-on experience in State government. Jessica Coon from Seward will be working with us during the week of March 12-18th, and Jenna Raymond will be in from Homer, March 18-25th. We are looking forward to having both these bright young women down here helping with the workload.
This week I had the pleasure of meeting with Will Files from Homer to discuss the latest projects at the Kachemak Bay Research Reserve, as well as with Ritchie Caffroy who represents the National Education Association. Buck Laukitis was here for meetings of the United Fishermen of Alaska, and stopped in to pay us a visit.
HB 475 – PERS/TRS Cleanup
HB 475 makes small technical changes to the Retirement Security Act (SB 141) that passed last session. There were a handful of issues in the 125-page bill that should be fixed to guarantee a smooth transition to Tier IV. I will be approaching each section of this piece of legislation as a separate idea and encourage comments on those individual sections. You can view the CS for the bill along with a sectional analysis that discusses the implications of each component on my website. It is important to note that this bill does not establish any new policy and is for technical issues only.
State Affairs Committee
We passed HJR 25 and HB 485 out of committee and also heard a report from the Conference of Young Alaskans. HJR 25 asks congress to adopt a section of the version of the Tax Relief Extension Reconciliation Act passed by the U.S. House of Representatives allowing veterans that served after 1977 to qualify for a veteran’s housing loan. HB 485 places certain executive branch pharmacists in the exempt service category, removing them from classified service at the end of their collective bargaining agreement. It also creates three new tax auditor positions in the exempt service category.
Up this week in committee: a confirmation hearing for Alfred Tamagni, reappointed to the Personnel Board, HB 475 the Defined Contribution retirement system “clean-up” bill, HB 448 allowing the Division of Motor Vehicles to design specialty license plates for members of the Free and Accepted Masons, HB 383 requiring auto dealers to disclose all fees (other than title, registration, and licensing fees paid to the state) in the advertised or negotiated price of a motor vehicle, HB 438 instituting a $15 per-diem for petition circulators, penalties for exceeding this amount, and extending the period in which a recall petition may not be circulated, HB 290, placing restrictions on the issuance of I.D. cards and driver’s licenses, and HJR 34 seeking to amend the Alaska Constitution by requiring that the legislature create a yearly budget using funds appropriated at a five year average of oil tax revenue levels.
Resources Committee
This week we heard presentations on the production tax by major and minor players in the Alaska petroleum industry. A general theme among the major producers is that the production tax, as proposed, strikes a livable balance between taxes and tax credit rates. However, they believe that the provision allowing companies to pay no taxes on the first $73 million unfairly targets the major companies. The minor companies that testified before the committee generally find the allowable credits and the non-taxed income levels to be favorable.
On Friday we heard further testimony from the Administration (please see for a discussion of questions posed by the House and Senate to the Administration so far.) One point discussed was the tax credit allowed in the bill on payment of the Hazardous Release Surcharge. This surcharge is paid by producers on a per barrel basis and was imposed following the Exxon Valdez spill to provide for spill response and mitigation activities. One portion of this surcharge goes into a disaster account and automatically switches off at the point that this account reaches $50 million. Another portion of this surcharge funds the clean-up and remediation of sites where smaller-scale spills have occurred. In FY 06 roughly $8 million in surcharges is expected to fund this account. By allowing these surcharges to be considered as credits against tax payments, we would be essentially funding these activities out of the General Fund, which I find unacceptable.
Saturday we heard testimony from a consultant hired by the Legislative Budget and Audit Committee. The discussion focused on themes that have historically been the subject of litigation and arbitration between the State and the producers and the need to clarify elements in the legislation prior to its adoption. Concepts needing further clarification include the definition of terms in the bill detailing points of taxation and points of tax deduction and credits. An additional topic of concern is the unknown amount of future liability the state could incur if the costs of field abandonment (dismantling of production facilities and the reclamation of production sites) were allowed as deductions or as a carry forward credit against taxes.
Health Education and Social Services Committee
In HESS we moved HJR 31, which establishes September 9, 2006 as Fetal Alcohol Spectrum Disorder Awareness Day. We also moved HB 442, a bill that allows a physician to disregard a Do Not Resuscitate (DNR) order if the reason a patient ‘flat lines’ does not have to do with a qualifying condition of the DNR order. My concern that a patient’s wishes are respected was addressed in an amendment I offered during committee. HB 271 limits mandatory overtime for nurses and was also moved out of committee. The CS requires hospitals to report any mandatory overtime hours so we can more accurately analyze the severity of the problem, but imposes no penalty to the hospital. My resolution, HCR 5, which recognizes the medical/dental benefit of fluoridating water, was moved as well. The measure ensures that new water facilities will be engineered to accomodate fluoridating mechanisms. This allows local communities that want the benefits of fluoridation to make the necessary water connections without having to reengineer their facilities.
On Friday we heard a presentation by the Ready to Read, Ready to Learn task force. The task force is made up of members of the education, scientific, business and philanthropic communities and has spent the last year studying alternatives for early education in Alaska. The presentation highlighted several recent studies that underscore the great importance of engaging and reading to children well before they enter kindergarten. Since the majority of neural connections are established during the first three years of life, encouraging brain development during this period has a tremendous impact on how well a child will be able to learn and function later in life.
On another note, I was encouraged to see an article in the Tuesday February 28th Anchorage Daily News Life and Health section on Project Access in Anchorage. Project Access helps individuals without health care insurance gain access to healthcare through a network of physicians who donate their time. A bill I sponsored in 2003 that allows retired doctors and nurses to donate their time without having to carry costly medical malpractice insurance has helped this endeavor. I am pleased to see this legislation have such an immediate impact on our state and look forward to more communities exploring the institution of such a program.
Ways and Means Committee
We heard my Mining Tax bill, HB 418 during both Monday’s and Wednesday’s meetings. Testimony on the bill has come almost entirely from Industry and has been mostly negative. All express the sentiment that if the state is to demand an increased return for its mineral wealth, our mineral resources development will be negatively impacted. I am still unsure how accurate this message is. My office has looked closely at the tax burden placed on mining in other states and internationally. It is clear that other governments have been able to establish a more fair relationship with the industry without significantly harming mineral extraction investment.
The committee has reviewed many aspects of the industry affecting development. Companies considering investment in an area look at a number of factors including mineral potential, regulatory environment, infrastructure, political stability, as well as taxation. Alaska’s tax policy is very attractive to mining companies as it requires companies to pay very little when compared to the resource value. We will continue our review of this bill in Ways and Means next week. I again ask for your ideas and assessment of any local impacts to the proposed changes.
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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