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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 on this 64th day of the legislative session.
70th day of the legislative session.
I am much relieved with the passage of HB 488 – Oil and Gas Tax reform out of Resources Committee. We made a number of important changes to the bill and will now be able to focus on other resource issues I am also concerned about. Last Saturday I had the sad experience of watching the Holy Trinity Episcopal Church burn to the ground just down the street from our apartment. We were very lucky that the high winds we have been experiencing for about a week did not begin until after the fire was extinguished.
I was happy to hear such nice reports about the Artic Winter Games events in Homer and wish I could have joined you for them.
We had several visitors last week, including our first intern, Jessica Coon from Seward. She was a big help to us in the office and was able to spend the week learning about the legislative process and life here in the capitol. You can read more about her experience later in the newsletter.
Also in from Seward were Amy Collman, her father Robin, and Debbie Bond. All three were here for the Boys and Girls Club Youth of the Year Award Ceremony. This was Amy’s second year to be nominated and she was second runner up this year, earning her a $1,500 scholarship to the University of Alaska. Tim Barnum from Seward also stopped in to say hello.
I had the additional pleasure of visiting with Seldovia Mayor, Dick Wyland and City Manager, Kurt Reynertson. Rick Eckert, Joe Gallagher and other HEA officials were also in, as were Susan Drathman and Mary Jane Shows as part of the Key Campaign Coalition. All of the Key Campaign members had our respect - rallying outdoors during what has been our coldest and windiest week this year.
In other news, Jim Herbert, of Seward, has been re-appointed to the Fisheries Fund Advisory and Appeals Council. If you need to speak to someone about the Fisheries Fund issues, he is still the man to get in touch with.
Jessica’s Corner
My week here at the capitol has truly been a learning experience. I got to attend committee meetings, which, while boring at times, were studded with enough interesting parts to keep me awake and paying attention! Going to the House Floor Sessions was actually pretty fun. I also toured the building and learned some history, which is always nice to know. I really did learn a lot about government at the state level.
Most of all, I was very impressed with how nice everyone I met was. Not that I expected to shake their hand and have them slap me, or anything, I just wasn’t expecting how honestly pleasant they were! Everybody, especially the staff in the office, was very helpful and amiable.
And while the weather prevented me from seeing as much of Juneau as I would have liked, it’s not like I had much time, anyway! On three out of the five days I was here, there were receptions and dinners that kept me busy until after 9 pm, and by the time I got in for the night, I was so tired that I crawled in bed and conked out for the night. As a low-energy kind of person who needs a lot of sleep to function properly, I don’t think I could keep up this sort of schedule for very long. I guess I’ll have to come back to Juneau some time to explore at will!
And so I extend a huge thank-you to Rep. Seaton for giving me this opportunity, and to his staff, Katie, Ian, and Louie, for being so helpful and fun. And another thank-you to Rep. Seaton and his wife for so graciously allowing me to stay in their home. This has been a wonderful experience that I will not soon forget!
Personal Legislation
HB 415 – Recreational Land Use
My Recreational Land Use Liability bill, HB 415, will have its first hearing in the Resources Committee this week on Wednesday from 1 – 3:30pm. If you are interested in testifying on this bill, please go to your local LIO to participate. If you are unable to get to the LIO, you can also get in touch with Jim Pound in Representative Ramras’ office, and he can arrange for you to call in.
HB 418 – Mining Taxes
My Mining Tax bill, HB 418, will be heard again in the Ways and Means Committee on Wednesday from 9 – 10am. We will be presenting a CS for the bill, which changes the existing Mining License Tax, as well as royalty and rent rates for minerals and coal. Anyone interested in testifying on the bill should go to their local LIO, or get in touch with Ginny Austerman in Rep. Weyhrach’s office so she can arrange for you to call in. We have heard from some people in the gravel business regarding the bill. These operators will only be affected by the changes to the Mining License Tax, and the affect should be relatively small for most individuals.
State Affairs Committee
HB 475, the clean up bill to the Retirement Security Act was passed out of committee. We adopted one additional amendment establishing the procedure for employers to terminate from participation in the plan.
HB 438, relating to collecting signatures for petitions, was heard and held. Testimony was taken from individuals involved with the "Ogan Is So Gone" recall campaign. This group carried the only recall petition to be certified for a ballot in state history. The committee will consider changing the penalty currently in the bill if the $15 per-diem for signature gatherers is exceeded. Part of the penalty in the bill is the invalidation of all the signatures on the petition carried by the circulator. The concern is that by disqualifying the signatures you are violating the rights of voters who signed the petition. Most provisions changing recall procedures are being dropped by the sponsor.
HB 45 was heard and held. It lowers the monetary threshold for when candidates and groups must report campaign contributions to the Alaska Public Offices Commission (APOC). There were concerns by the committee that individuals representing municipalities or citizens lobbying on their own time would be included in the restriction. However, APOC assured the committee that those individuals would not be required to file with APOC.
HB 290 assures that driver’s licenses are only issued to legal residents and US citizens and puts tighter requirements on who is eligible for this piece of identification. The bill is part of the implementation of the Federal Real ID Act. Proponents of the Real ID Act see it as a necessary security measure. Opponents believe it encroaches on our civil liberties.
This week in State Affairs we will rehear HB 45 (contributions, lobbyists, disclosures), HB 383 (motor vehicle transaction), and HB 344 (motor vehicle agents). We will hear the following bills for the first time: HJR 27 urges the US Congress to pass legislation allowing Native Alaskan Vietnam Veterans to obtain allotments of vacant land in the State; HB 354 adds 5 years of National Guard service to the requirement for becoming an Adjutant General (The Adjutant General is the top military official in Alaska and the Commissioner of the Department of Military and Veteran’s Affairs); SB 86 decreases the award of attorney fees that a public interest litigant may collect if they prevail in a court case from 100% to 30% and only on issues within the case upon which the litigant prevailed. This bill attempts to make it more difficult for members of the public to sue state and municipal government if they believe laws and ordinances are not being carried out correctly.
Resources Committee
After nearly a month of daily meetings on HB 488, the Petroleum Production Tax, we passed a committee substitute on to the House Finance Committee. Here are some of the major changes that the committee made to the legislation:
1. Progressivity. In addition to the 20% net profits tax, we included a progressive scale on oil that is triggered when a barrel of oil reaches a price of $50 a barrel on the West Texas Intermediate (WTI) price scale. After $50 a barrel there is an additional tax set at three tenths of a percent per each one-dollar increase until the price reaches $110 per barrel. I crafted an amendment to the bill that sets government take at 50% of net profits after the price per barrel exceeds $110. A separate progressivity scale was crafted for gas as the market forces affecting gas are widely divergent from oil. The formula is essentially equivalent on a gas market scale to the oil formula.
2. Transitional deductions. The committee deleted the provision that would have allowed companies to recoup, as deductions, the cost of capital expenditures made during the last five years. The language in the Governor’s bill was seen as overly generous considering the allowances that have already been granted under the existing Economic Limit Factor. The committee originally pared down the allowance to 75% of 2005 expenditures, 50% of 2004 and 25% of 2003 expenditures. An amendment deleted this provision entirely. I offered an amendment that allows companies to deduct expenditures starting at the beginning of this calendar year, in order to keep the tax timeline consistent. This will help companies adjust to the new system.
3. Effective Date. We moved the effective date of the new tax from July 1st as proposed by the Governor to April 1st, ensuring that the State will recapture a portion of the currently high net profits that are not being captured under the existing severance tax.
4. Underpayment Interest. As proposed by the Governor, companies would only have to pay 90% of their net tax per month and would be charged an interest penalty on payments below 90%. This provision did not promote the full and timely payment of taxes and would have made state budgeting less accurate. I worked to change this provision so that any delinquent tax below 100% gains interest.
5. Hazardous Materials Surcharge. I worked to change the existing structure of the five-cent surcharge levied per-barrel on oil, and to ensure that it would not be allowed as a credit against the net tax. The existing surcharge is designed so that 3-cents per-barrel goes into the Prevention Account and helps fund ongoing oil spill prevention and clean-up activities. The 2-cent levy created the Response Account (to respond to catastrophic oil spills) and was deactivated when the account reached $50 million. I amended this structure so that a 4-cents per barrel will go to fund the active Prevention Account and 1-cent per barrel will be available to renew the Response Account should it be drawn below $50 million.
6. $73 million allowance. We eliminated the provision that gave companies an ongoing flat, yearly $73 million tax allowance. Instead, we implemented an annual non tradable tax credit, dollar for dollar, against the first $12 million of production tax.
Ways and Means Committee
The Department of Administration reported a 50 million dollar savings to the State’s health insurance fund due to the fact that health care costs last year were less than anticipated. This money will be refunded to employers who paid into the system. Also, the Department recently signed a contract with Primera Blue Cross to change the third party administrator for all State health insurance plans from Aetna to Primera. In June of this year all state employees, retirees and dependents will switch over to Blue Cross. Some in the legislature are concerned that the procurement process for awarding the bid to Primera was flawed. With the State contract, Primera will cover around 80% of those insured in the State of Alaska, making the market increasingly closed to new insurance providers.
This week in Ways and Means we will be hearing HB 492, which addresses the PERS/TRS unfunded liability through the transfer of state interests in certain future gas revenues. We will also be hearing my Mining Tax bill, HB 418, on Wednesday. Please get in touch with my office if you are interested in testifying.
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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