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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 64th day of the legislative session.
Of course oil tax restructuring has been the main topic for me as Vice-chairman of the House Resource Committee. Individual members are still working on proposed modifications and amendments to the proposed Percent Profits Tax and we hope to have a committee substitute bill drafted by next week for discussion. This was the normal "energy break" weekend and I had hoped to be back in the district to celebrate the Arctic Winter Games and the NPFA Seafood Dinner, but it became critical to remain here for oil tax work and the public hearing. I hope you all got to enjoy the events.
Most other things have been on slow speed though we are still working on background and revisions to the mining tax, mixing zone, and PERS/TRS legislation. Next week committees will again be meeting on more regular schedule although Resources is still scheduled to meet every day again.
I had the pleasure of visiting with Sharon Howerton-Clark last week, who was down from Homer representing the Alaska Commission on Aging.
Personal Legislation
HB 475 – PERS/TRS Cleanup
On Tuesday the committee adopted amendments to , a cleanup bill to the Retirement Security Act () that passed last session. We clarified the intent of the legislature last year to create an occupational death and disability benefit for tier IV members. For regular PERS members and TRS members the disability benefit mirrors Tier III. Police/fire PERS are able to elect upon retirement either their defined contribution account or a pension as in the defined benefit program. We also established a funding mechanism for employer's to pay for death and disability benefits: 0.4% for police/fire and 0.3% for all others. These amendments and the version of the bill we have been working from are all available on my website.
HB 418 – Mining Taxes
After 3 hearings in Ways and Means my mining tax bill, , is still being reviewed in committee. Taxes on the industry are very complex and the bill makes several changes to the overall tax structure. We plan to hear the bill again next week to help clarify the various aspects of the bill.
We have been trying to determine whether the current industry tax structure delivers a good value for Alaska’s mineral resources. The mining industry generally pays less than one percent of the mined resource value to the state, while a slightly larger amount is paid to local governments. This tax burden is comparatively light when compared with the other major resource industries in Alaska.
In response to the testimony in committee we are drafting a committee substitute (CS) that we hope to present next week. The CS makes changes to three main components of the mining tax system; the Mining License Tax, Mineral Rents, and Royalties.
The Mining License Tax applies to all mining activity in the state and is being amended to allow only for the deduction of direct mining expenses. Exploration and development costs are accounted for in separate credits and depletion allowances. An additional provision allows the state to share in mineral wealth when prices are high, much like the Governor’s proposed oil tax bill. This is the only change made in HB 418 that affects the mining of sand, rock and gravel.
The royalty for both minerals and coal apply only to mining on state-owned land. The coal royalty, which has not been updated in statute since statehood, is changed to match the 5% adjusted gross value currently in regulation. The mineral royalty is revised to mirror royalty systems used by other mineral rights holders in the state. Most native corporations and the Mental Health Trust use a Net Smelter Return type tax (NSR). These agreements range from 2-5% of the recovered resource value, less the costs of refining, transportation and marketing. The royalty on state land is a profits tax of 3 percent. With an NSR royalty we will still be competitive with other lands in the state while also generating more revenue.
The land rent for both coal and minerals are also updated to match what is currently set in regulation, and are linked to the Consumer Index currently used only for minerals rents.
We have compiled a lot of information through this process, examining international and domestic tax structures, as well as the impact of those taxes on industry and investment. Much of this is available on my website at
Resources Committee
We heard testimony from the petroleum industry expert Daniel Johnston – hired by the legislature - as well as from the Department of Revenue, the Department of Law, and Dan Dickinson, the former director of the Tax Division who is serving as a private consultant to the Murkowski Administration. Mr. Johnston presented the proposed tax in comparison to taxation systems worldwide. His comparisons between the proposed tax system and those currently active in other countries added to the growing discussion in the legislature of making sure the tax is structured progressively so it can function well at a wide range of oil prices. Another item that Mr. Johnston discussed was the risk of tying negotiations on the proposed oil/gas tax to negotiations over the proposed gas-line. To view last week's presentations please go to . Feel free to contact my office with specific questions on the legislation, and on the presentation material.
This week we will take testimony from Econ One, the economic consulting group hired by the Legislature, and we will begin amending the Governor’s bill.
State Affairs Committee
We did not have a quorum on Thursday, due to Energy Break, so the bills scheduled for hearing that day have been rolled to this week. We will hear , the DC retirement "clean-up" bill again as well as allowing the DMV to add the Free and Accepted Masons to the list of approved specialty license plates. Eighteen specialty license plates are currently authorized by the DMV including plates for those associated with the Alaska Children's Trust, Purple Heart Recipients, Dog Mushers, Veterans, and for Amateur Mobile Radio Station Vehicles.
Two bills making changes to the Elections statute will be up Tuesday. requires petition circulators not to be registered to vote in any state other than Alaska and allows petition circulators to collect fifteen dollars per diem for meals each day they are over 100 miles from home. A penalty of $1 for each signature gathered by a circulator is levied on circulators and petition organizations if the $15 per-diem is exceeded. In addition, each signature collected by a circulator convicted of receiving more than $15 a day per-diem is no longer eligible to be counted toward petition certification. This bill also increases the time wherein a recall petition cannot be filed from 180 to 270 days prior to the end of the normal term of office. lowers the contribution size that groups must report to the Alaska Public Office Commission from $250 to $100. It reduces from $1000 to $500 the amount an individual is allowed to contribute to a candidate or non-political party group, and from $10,000 to $5,000 the amount an individual can contribute to a political party. HB 45 also changes the definition of lobbyist by reducing the hours in a 30-day period from 40 to 20 that a person may lobby the legislature without registering with APOC. This bill mirrors a ballot initiative certified for the 2006 primary election. Passage of HB 45 un-amended would take the initiative off the ballot.
seeks to require that the yearly budget is calculated and appropriated according to a five year rolling average of oil prices. places restrictions (US citizen) on the issuance of State I.D. cards and driver’s licenses. Both of these bills will be heard on Thursday.
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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