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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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Hello from Juneau on this 85th day of the legislative session. I appreciated all the feedback we’ve received from my trip back to the District. I am still recovering from a bronchial infection that has been widespread both here and back home. As discussed later in this newsletter, I have been immersed in a debate over the course of this session, centered on reforming our state worker and teacher retirement systems. The State Affairs Committee, which I chair, is the hub of this debate in the House. The issue has become much more urgent since both bodies of the legislature have tied over half the education funding increase, as well as municipal aide, to the adoption of a new defined contribution plan for all new state employees. I am not convinced, however, that there is adequate commitment to adopt these drastic changes in the House. The Legislative Council chairman has contracted for an independent valuation of the assumptions and the anticipated liabilities for the retirement system that will not be available until after the session is over. Time is running short and we will not know where the votes will fall until a final bill is proposed.
Another issue we will be working on over next two weeks is the extension for local district plans of the Alaska Coastal Management Program.
K2 Caucus Teleconference
Our next constituent teleconference will be held on Thursday, April 7th at 6PM. The Senators and Representatives from the Kenai and Kodiak (K2) areas will be available to answer questions and talk about our activities in the legislature. If you would like to participate, please contact your local Legislative Information Office or get in touch with my office. You can also listen-in on KBBI radio.
HB 238
This week the State Affairs committee introduced its much-anticipated PERS/TRS bill, . The current Public Employees Retirement System and Teachers Retirement System are faced with an enormous unfunded liability, which could extremely hard to pay. Both the House and Senate have taken up the issue with the hopes of establishing a more predictable and sustainable system.
HB 238 contains three main elements: changes to existing tiers, pension accounts created under a new defined contribution tier, and medical benefits under a new tier.
The most significant change to the existing tiers is an increase in the employee contribution rate (no more than 13% for PERS and 14% for TRS) to help pay for projected increased expenses. It would also only allow ad hoc Post Retirement Pension Adjustments, an additional cost of living increase given out to tier one retirees, when the system is 100% funded. A third change pertaining to medical benefits would require current and future retirees to purchase prescription medication from a state preferred drug list, a cost saving measure that could save the system up to 10 million dollars annually.
HB 238 creates defined contribution account – similar to a 401k – for future employees. Under PERS, 20% of an employee’s salary (from equal contributions by employee and employer) would go into an individual’s account with a range of investment options to choose from. The contribution rate would be slightly higher for TRS members, 22%. A portion of the employer’s contribution (4.5% for PERS and 5.25 for TRS) would be used to cover medical benefits.
In a 2004 survey of employees and employers by Mercer Human Resources Consulting, medical benefits were identified as the most important element included in retirement plans. In HB 238, an employee is eligible for medical benefits when they retire directly from the system with 30 years of service or at normal retirement age with 10 years of service. Before normal retirement age a retiree has access to a medical plan and pays a premium amount set by the board. Once a retire reaches normal retirement age, 5 years before Medicare eligible age (currently 60) they receive a percentage subsidy to their premium based on their years of service. The subsidy ranges from 30% of the premium benefit for 10-year employees and increases incrementally with each additional year of service to a maximum of 90% for 30+ year employees. Once a retiree reaches Medicare eligibility – currently age 65 – their premium amount drops significantly.
In addition to having access to a medical plan, retirees have a Health Reimbursement Account (HRA) that their employer has contributed to over the course of their employment (1% of average salary for PERS and 1.5% of average salary for TRS). The HRA is automatically used to pay the remaining portion of the premium for the medical plan after the subsidy is applied. This account may also be used to cover any medical expenses.
Developing a bill to address these needed changes in the retirement system has been a long and involved process. We are going over HB 238 in House State Affairs and encourage your involvement. Your input will be crucial in creating the best possible retirement program for future Alaskan employees and retirees. For a further explanation of HB 238, please go to my website,
HB 25
The House Finance committee heard on Friday. Testimony on the bill was taken from participants in Unalaska, King Cove, Homer, Craig, and Wrangell. Opponents claim the bill derives from the lack of a locally imposed fish tax in the Kenai Peninsula Borough. They argue that areas with a large percentage of high value fresh fish being trucked or shipped out, such as the KPB, should impose a local tax to generate the revenue. I believe that this argument has little, if anything to do with HB 25. What the bill attempts to do is allow ports where fish is landed to keep a fair share of the generated revenue. HB 25 simply says that if fish are delivered to a port in a municipality and then transported out of state fresh, this port would be considered the place of processing for fish tax sharing. HB 25 has been referred to a sub-committee consisting of Rep. Mike Hawker (R-Anchorage), Rep. Bruce Weyhrauch (R-Juneau) and Rep. Carl Moses (D-Unalaska). This sub-committee has been given two weeks to work with me on the bill and report back to the full committee.
Resources Committee
Last week we passed three bills and two resolutions from committee. , urging congress to refrain from enacting legislation to affect the outcome of the Exxon Valdez Oil Spill case, received a unanimous Do Pass from the committee. This is a statement of support for the many plaintiffs in this important case.
requests congress not to approve any international land designation, such as a "biosphere reserve" in Alaska without the approval of the state legislature and local governments. This resolution was supported by the Alaska Support Industry Alliance, The Bering Straits Native Corporation, The Resource Development Council, The Alaska Miners Association, and the group Concerned Alaskans for Resource and Environment.
raises permit renewal fees and vessel license fees in order to fund the Commercial Fisheries Entry Commission. The Resource committee substitute changed the permit renewal fee cap to $3,000. The Fishery committee bill had eliminated the previous $300 cap. The annual base fee must reasonably reflect the different rates of economic return for different fisheries and has been based on 0.4% of the value of each fishery. Any cap serves to shift the fee (tax) burden from the most lucrative to the smaller fisheries and I will offer an amendment to eliminate the cap later. The CS also raised vessel license fees by 20% across the board.
HB 198 amends the state’s Aquatic Farming Act to allow aquatic farm permit holders to harvest and sell "insignificant populations" of wild shellfish on their farm site. This bill reflects a compromise reached by the dive fishing interests and the shellfish growers. In the compromise, the definition of an "insignificant population" in relation to geoduck clams is a population of no greater than 12,000 pounds per farm site. This language is not in the bill but has been put on the record during testimony in the Fisheries Committee as well as in Resources.
gives the state primacy over regulating certain classes of oil extraction by-product re-injection wells.
This week we will hear two bills. would extend the sunset date on the oil and gas exploration credit against the production tax. This credit is only for the Alaska Peninsula sale area. The Alaska Peninsula sale is tentatively scheduled for this fall, with leases to be issued in the spring of 2006. On Wednesday we will hear . This bill seeks to amend the Commercial Fishing Revolving Loan Fund to allow the Department of Commerce, Community and Economic Development to make loans for the upgrade of existing tenders to improve the seafood quality. The total of balance of outstanding loans may not exceed $300,000 per person.
House State Affairs Committee
In addition to our work on the bills dealing with the Public Employee Retirement and Teachers Retirement Systems (PERS/TRS), we moved three bills out of committee last week: campaign finance, anatomical gifts, and Local Boundary Commission.
This week we will continue our work on PERS/TRS, in addition to hearing four unrelated bills. would elevate the crime of permanent fund dividend fraud from a class A misdemeanor to a class C felony. creates an anonymous hotline for state employees to report fraud, waste or abuse of government resources. authorizes the Department of Military and Veterans Affairs to establish and maintain an Alaskan veterans’ cemetery, and establish the Alaska veterans’ cemetery fund within the general fund. would allow a statewide vote in the next general election on whether or not voters would approve the annual use of $150 million in the Permanent Fund earnings reserve account to pay a community dividend to each municipality and unincorporated community.
HESS Committee
We heard and passed out of committee , , , and HB 220.
establishes a task force composed of members of the legislature, school districts, and physicians to discuss ways to increase physical activity in Alaska’s schools. Currently over one-half of Alaska’s school age children are obese or overweight.
extends the date by which schools can receive debt bond reimbursement from the state for up to 70% of the cost of new facilities. This would allow rapidly growing areas like Mat Su and Anchorage, to acquire much needed additional classroom space. I am concerned about this legislation because the state would incur a large debt without first knowing the cost of the debt bond reimbursement program that ending in 2002. A study showing the costs will be out sometime next year. I am also concerned that this school debt reimbursement liability to the state would preclude the use of these education dollars from funding a phase-in of the much-needed geographic cost differential. I have worked to hold this bill in committee for this reason. There is possibly a better solution to the needed schools in , which would directly fund many needed projects including the three Mat-Su elementary schools.
Makes emergency response personnel eligible for a workman’s compensation claim for health problems that develop after termination, based on the assumption their illness developed from exposure on the job. Fire fighters, EMTs, and other emergency response or trauma personal are all covered in the bill. Although I respect the intention of this bill, I have reservations over the burden it places on the flounder workman’s compensation system. Workmen's Compensation rates have risen so highly and quickly that many small business can no longer afford to operate. This is one of the larger issues the legislature is attempting to grapple with this session. Individuals affected by this bill are already covered if a link can be shown between their illness and work, and I am hesitant for the state to assume an added liability until we have a handle on the larger issue.
allows recipient of a Permanent Fund Dividend to receive PFD payments in quarterly installments instead of a lump sum.
moved out of committee on Thursday. Entitled the Family Rights Act, HB 53 is an omnibus bill that does many things to protect Children In Need of Aid (CINA). It creates a standard of care for social workers, makes the CINA process more transparent, opens court proceedings to the public, and strengthens rights for adult family members. It also establishes a state review panel to adopt policies, compile reports, and conduct hearings on complaints filed against the Office of Children Services (OCS). The intent of this legislation is to protect and preserve Alaskan families and hold the government accountable for its actions when children are in state custody.
allows mental health patients to choose the gender of care provider that attends to them in intimate situations like bathing.
Ways and Means Committee
The committee began discussing , a resolution sponsored by Speaker Harris, to repeal the Constitutional Budget Reserve (CBR). The CBR was established in 1990 as a rainy day account to help balance the budget in years when revenue – primarily from oil – was insufficient to cover government expenses. Recent high oil prices have allowed us to leave the CBR in tact for the first time in many years.
Repealing the CBR would eliminate the three-quarter vote now necessary to access the fund, which could be rolled in to the permanent fund, as suggested in the resolution, or placed in a different account like the general fund, a statutory budget reserve account, capitol construction account, or other type chosen by the legislature. Repealing the account would also urge the legislature to create a fiscal plan based on recurrent revenues.
Any amendment to the constitution would require a vote of the public. If passed the issue would be put on the ballot for the next regularly scheduled election. The bill remained in committee for further discussion and I anticipate an amendment to change the CBR into a capitol funding account.
Following Bills
All bills can be found on 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. Don't forget that you can view all bills relating to your areas of interest by selecting "Subject Summary" from the menu on the right. You can access BASIS through the link below.
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 25
(907) 465-4963
louie_flora ''@'' legis.state.ak.us
Katie Shows
Health Education and Social Services, HB 20, HB 24
(907) 465-2028
katie_shows ''@'' legis.state.ak.us
Ian Laing
Ways and Means, HB 50
(907) 465-2689
ian_laing ''@'' legis.state.ak.us
Rep. Paul Seaton
House District 35
(800) 665-2689
representative_paul_seaton ''@'' legis.state.ak.us # # # |
