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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:
I wish I was not writing “Greetings from Juneau” – but we are definitely here for at least the first two weeks of the FIRST 30 day special session. After May 23rd the Resources Committee may start holding hearings on its section of the yet-to-be-seen Stranded Gas Act amendment bills in Anchorage. Although there is not a definite schedule, we will probably be back here after the first week of June to vote on those bills. Another run at PPT may be included in the second special session. If those decisions are accomplished, a third special session could occur later in the summer or early fall, after the 45 day public comment and renegotiations and finalization of the Gas Pipeline Contract.
Rewriting the oil tax structure and a gas line project are the most important considerations in decades. The complexity of these issues requires much study before voting. It appears that I may miss the entire fishing season but Tina will be coming home soon to get the garden planted. I hope to see you soon, during breaks in the action.
Petroleum Production Tax (Profit Tax)
The House worked through the night to pass out a version of the Petroleum Production Tax. A prominent feature of the House floor version is the 21.5% net tax rate for oil, up from the 20% rate in the House Finance bill. Also added to the bill on the House floor is a cap to the progressivity element when the tax reaches 50%, and the creation of three different tax rates for gas: North Slope, Cook Inlet and the rest of the state. This version was narrowly rejected by the Senate and the whole tax proposal died at the close of the regular session. As the Legislature considers the fiscal terms in the Alaska Natural Gas Pipeline Contract during the special session I am sure the oil/gas tax rewrite effort will continue. It may also be added by the Governor to the special session agenda as a stand-alone item. I hope we will modify some provisions in a final bill.
Gas Line
Presentations and discussions on the draft gas-line contract have consumed the legislature since the close of the regular session. This major issue deserves close scrutiny by both the legislature and the public. On Wednesday morning, after finishing the session with two late-to-all-night floor sessions the Legislature was given the draft gas-line contract and the preliminary fiscal interest findings document comprising, in total, over 600 pages of technical reading. These documents can be viewed on the administration web-page by clicking on this link: I would encourage you to look over these documents and contact my office with any questions that you may have as we move forward.
Education Funding
This year the legislature demonstrated a strong commitment to education by funding the cost differential and a variety of programs designed to improve the learning environment for children.
The cost differential was incorporated into , school bond debt reimbursement, as a one-time grant. One-quarter of the ISER formula was distributed across school districts for a total of $35 million. This equates to an additional $3.66 million for the KPBSD. The House also added $6 million to the governor’s $90 million increase in the base student allocation. The total increase in education funding is $131 million over last year. Although I would have preferred to see the cost differential built into the foundation formula instead of as a one-time grant, I am pleased that we have achieved some parity. However, we will face the challenge again next year and I will be working for a long-term solution.
Also incorporated into HB 13 was the public school performance incentive. This program awards teachers and personnel at schools with outstanding student achievement an annual bonus. Teachers are awarded $5,000 per year and non-certified personnel $2,500. Some organizations are concerned that because only 850 payments to certified employees can be made per year on a first come first serve basis, only a small number of schools will continuously receive the benefit.
The legislature also fully funded the teacher mentor program with State dollars. This program was established as a trial under a federal grant. Outstanding teachers spend one year mentoring first year teachers. This has a very positive impact on teacher retention and job satisfaction.
Capital Budget
Given the large budget surplus, we had the opportunity to catch up on much-needed projects for District 35 and the State. Appropriations range from large infrastructure projects that will help the economic growth of our communities to smaller equipment purchases that increase the safety and quality of life for residents.
Also incorporated into this year’s budget was a one-time revenue sharing grant to municipalities to offset the increased cost of energy and the 5% increase in PERS payments. I hope we can work on a future program with a sustainable and identified funding mechanism.
Line items that affect our district and beyond include a $5 million loan to Agrium and $12.5 million to Homer Electric Association for augmentation of their power generation capability. Below is a list of project or items that were either partially or fully funded in this year’s capital budget:
Homer, new city hall; Homer, deep water dock; Homer, water treatment plant; Seward. T-dock; Seward ferry infrastructure; Seward, back up generator; Nanwalek water system upgrade; Anchor Point campground rehabilitation; AVTEC deferred maintenance, hydraulic rock drill, distance training program; HEA clearing beetle kill trees; Seldovia Village Tribe Kachemak Bay ferry and docking facilities; Brush fire attack unit for Anchor Point Fire Service Area; Funding for developing a trail along Diamond Ridge Road; Seward Senior Center replacement of elevator shaft; Homer rescue systems equipment upgrade; Homer Senior Center land purchase, Kachemak Bay Campus debt payments; Kachemak Gun Club shooting range improvements; Anchor Point Senior Citizens pre-development housing study; Homer smolt stocking in Fishing Hole; South Peninsula Hospital respiratory equipment for newborns; Zamboni for Homer Hockey Association; minimum $5,000 for each school to purchase equipment and supplies; Lowell Point fire department building; Bear Creek Fire Service Area tanker; Moose Pass Community Center upgrades; Cooper Landing Senior Citizens senior housing project; Seldovia slough smolt stocking; Seldovia economic development study; Seward Shellfish Hatchery.
Roads
I am pleased to announce that the Diamond Ridge/East Skyline/Mission Road paving project has gone out to bid. This will be a two-year project. The bid will be awarded by early July with construction to begin this summer. Many in the Diamond Ridge area have expressed a desire for a pedestrian trail to be included in the paving project. Given the timeline and budget for the roadwork, the trail cannot be included in the bid package, but I have worked to get funds in the capital budget that will begin the surveying and right-of-way work for this trail. I have also worked to include funds for calcium chloride in order to keep the dust down on local roads.
In other road news, DOT has informed my office that repaving work will take place on Jerrel’s hill this summer, and flashing beacons will be installed at MP 168, in addition to Gwin’s corner in Cooper Landing. It is my hope that these measures will help to improve the safety of the Sterling Highway until a major realignment occurs.
Methajuana
The legislature passed which increases penalties for the production of methamphetamines and increasingly criminalizes the use of marijuana and anabolic steroids. Although I am very concerned with drug use in our communities, I voted against this bill for procedural reasons. When it originally passed the House, HB 149 was structured to deal with the methamphetamine problems that have become so apparent throughout the state. Separate bills addressing steroid and marijuana use were rolled into HB 149 in the Senate, but neither of these had been adequately examined in the House. This circumvented both the legislative and public processes. I have addressed additional concerns with HB 149 on my website at,
Eminent Domain
, clarifying the property rights of Alaskans by limiting the use of eminent domain proceedings, passed both bodies by a unanimous vote. The recent US Supreme Court decision, Kelo v. New London, put these rights in question by declaring that a government could take private land for the purposes of other private economic development. HB 318 prohibits the use of eminent domain for private economic development and clarifies that the government is prohibited from taking all or part of a primary residence through eminent domain so that others may have a recreational opportunity. The bill does not affect the legitimate use of eminent domain, but affirms private property rights by raising the standard through which the power can be exercised.
Personal Legislation
HB 25 Redistribution of Fish Tax
Over the last two years an equitable distribution of taxes paid on fish that are exported out of state unprocessed. Under the current distribution system the Fisheries Business Tax paid on exported/unprocessed fish (including the gutted and gilled halibut that are trucked out of Homer and Seward from March to November) is split 50/50 between the State’s general fund, and a revenue sharing program administered by the Department of Commerce, Community, and Economic Development. When fish are “processed” in a municipality the split is 50% to the general fund and 50% back to the municipality or borough. Homer and Seward lose over one hundred thousand tax dollars per year on “unprocessed” fish that are landed at local docks and trucked out of state. Local infrastructure is impacted by off-loading and transporting of unprocessed fish, yet the tax it generates is distributed to coastal communities statewide. My goal is to ensure that municipalities receive their rightful share of the fish tax.
HB 328 Mixing Zones
I introduced legislation this session to maintain the long-standing ban on pollution mixing zones in freshwater spawning areas (). Mixing zones are a common feature in wastewater discharge permits, the term referring to areas where a pollutant discharge is diluted. However, mixing zones have been outlawed in freshwater spawning areas for many years to protect the resource and salmon marketing efforts. The Murkowski administration introduced regulations in both 2004 and 2005 to allow mixing zones in spawning areas of both freshwater resident and anadromous species. Both of these proposals were withdrawn due to public outcry. I introduced legislation in late 2005 to maintain the mixing zone ban. Prompted by this, the Murkowski administration changed their final mixing zone regulation to retain some protection of salmon spawning areas.
HB 415 Recreational Land Use
encourages the recreational use of private lands by providing landowner immunity for allowing use of land without charge for a recreational activity. It limited landowner liability, unless the owner’s conduct involved gross negligence or reckless or intentional misconduct, and eliminated adverse possession and prescriptive easements arising from the free recreational use of land. Many people and organizations from the Kenai Peninsula helped get this bill through the House but it failed to get a hearing in the Senate.
HB 20 Early Funding of Education
that would let school districts know the funding they would receive by March 15th of every year. The legislature would have been required to pass the education budget early so schools could avoid the demoralizing cycle of laying-off teachers only to re-hire them in the fall. Early funding of education did not pass because it could be an easy target of a new tactic in which one body of the legislature agrees to adoption of the increased education funding, but only based on the passage of their priority legislation. We saw this happen with in 2005.
HB 238 PERS Unfunded Liability Relief Account
With , we attempted to create an account that would help employers make annual payments toward their unfunded liability over the next 25 years. Many bills were presented as options for relief to employers; however no long term solution was passed. The 5% increase in their PERS rates that cities and boroughs would have faced this year has been covered in the capital budget. Nevertheless, State aid to employers to help pay the $6.9 billion unfunded liability will need to be structurally addressed in the future. Drastically increasing payroll contributions is simply not an acceptable long term solution.
HB 24 Cruise Ship Tax
sought to levy a $75 per passenger per voyage tax on the company or corporation that operates a cruise ship.
This would have generated approximately $60 million annually. $20 million would have been divided between ports of call and destination ports in order to support the larger infrastructure needed to accommodate the operators of large vessels and the many passengers they carry. With the remaining $40 million the legislature could consider developing matching marketing grants to promote tourism in coastal and interior Alaska and could view these funds as a recurrent source of revenue to support statewide community revenue sharing.
HB 24 did not pass this session, but Alaskans will have a chance to decide if the State should tax cruise ships as this issue will be a proposition on the ballot in the August primary election.
HB 418 Mining Tax
This session I raised the issue of Alaska’s mining tax structure. I don’t believe the people of Alaska are receiving their constitutionally required "maximum benefit" for their natural resources when the combined state and municipal taxes plus royalties yield less than 2% of the mineral value.
Although this issue was overwhelmed by the petroleum profit tax discussion, a number of hearings refined and advanced the concepts for the next legislature.
Several important issues are:
- Increasing state land royalties to be consistent with Mental Health Trust, University, and private royalties,
- Limiting depletion allowance,
- Updating land rental charges which have not been changed since statehood.
If you are interested in this issue, much of the background information is available at
HB 496 Charitable Giving
As Chair of the House State Affairs Committee to mirror Senate legislation to create a funding mechanism for charitable organizations in Alaska. The goal was to establish a check-off on the electronic Permanent Fund Dividend application form that would allow an applicant to donate a portion of their PFD to an eligible charitable organization, community foundation, campus of the University of Alaska, or a postsecondary education and vocational training organization. While the bill did not make it through the Senate, numerous organizations expressed interest in the idea, and the Rasmuson Foundation had agreed to underwrite the administrative costs for the proposed three-year pilot program.
HB 475 Defined Contribution Retirement Clean-Up Legislation
for the legislation that created a new defined contribution retirement plan for teachers and state employees did not pass this year due to procedural conflicts between the bodies. These technical changes will need to be incorporated via legislation at a later date since the new system becomes active in July.
HCR 5 Encouraging Fluoridation
encourages communities to fluoridate their water systems. This resolution made it all the way through the House and the Senate committees but was never scheduled for a Senate Floor vote.
HCR 28 Village Safe Water
requires the Village Safe Water (VSW) program under the Department of Environmental Conservation (DEC) to apply the same rules to a project throughout its duration. Many communities in the District are having problems with the requirements for VSW projects changing in the middle of the project, stalling progress. Instead of pushing this resolution, I requested an audit of VSW that will take place this summer examining these issues. It is my hope that the audit will bring to light some of the problems that are delaying the completion of projects so they can be addressed and DEC can provide safe water and sanitation systems to Alaskans in an efficient manner.
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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