House District 37 Legislative Report
United States Arctic Research Commission (USARC) Meeting in Western Alaska
I was honored to present at the USARC’s 100th meeting March 21. It was good to see the Commission meeting in Western Alaska and paying attention to research needs of the region. I informed the USARC about my plans for the Alaska Arctic Policy Commission, and about our first meeting this Saturday, March 23rd (see next item).
First Alaska Arctic Policy Commission, Web-Streamed Live from Juneau
Interested parties can watch the first Alaska Arctic Policy Commission meeting, which I will be Co-Chairing, web-streamed live at http://www.akl.tv from Noon-6 PM this Saturday, March 23rd. The meeting will take place at Centennial Hall, Ballroom 1, in Juneau.
US Department of the Interior Reconsidering Izembek Decision
I welcomed the news from Washington, D.C ., March 21 that the U.S. Department of the Interior will take additional steps to consider approval of a road from King Cove to the airport at Cold Bay, about 25 miles away, that residents have been requesting for years. Interior Secretary Ken Salazar announced that the Assistant Secretary for Indian Affairs will travel to King Cove for consultations with the local tribes, the city of King Cove, Aleutians East Borough, and Native corporation officials. Salazar also directed that his successor as Interior Secretary, Sally Jewell, will travel to King Cove to gather firsthand information and to hold an official meeting. I find it very encouraging that Secretary Salazar appreciates the human dimension that underlies this issue. It comes as no surprise to me that the delegation from King Cove that met with the Secretary last week was successful in persuading him to seek a more complete understanding of the life safety needs of the community. I’m relieved that Secretary Salazar has made sure the incoming secretary will have a full understanding of how crucial this road is for medical emergencies.
Vietnam Veteran’s Day Celebration and Bill Signing Ceremony
On March 27, 2013 the Alaska State Legislature will be celebrating the anniversary of the U.S. Armed Forces’ withdrawal from South Vietnam with a dedicated Vietnam Veteran’s Day bill signing ceremony. The ceremony will take place at 1:00 pm at the Alaska State Capitol in the Speaker’s Chamber where members of the Joint Veterans Caucus, including me, Representative Thompson, and Senate President Huggins, will be in attendance.
Several guests of honor include Vietnam Combat Veterans from across the state: former legislator Bill Thomas (Haines) | Aircraft Crew Chief, Vietnam; Mr. Joseph N. Fields III (Fairbanks) | Recovery Helicopter Crew Chief, Vietnam; Mr. John Guinn (Bethel) | U.S. Marine Corps, Vietnam; Mr. Hank Bartos (Fairbanks) | LTC USAF Ret. B-52 pilot, Vietnam; Mr. Terry W. Pardee (Haines) | U.S. Army Special Forces - SOG, Vietnam; Mr. Art Peters (Ninilchik) | U.S. Army, Special Forces Medic, SOG, Vietnam; Howard Colbert (Juneau) | 101st Airborne Infantry, Vietnam.
Senate Bill 21: Oil Tax Reform Bill Moves to House
Wednesday evening (March 20, 2013), on an 11-9 split vote, the Senate narrowly approved its revised version of Governor Sean Parnell’s latest attempt at oil tax reform. The vote to move Senate Bill 21 forward for additional by the House of Representatives came after many more hours of testimony in three Senate committees.
Wasting no time, the House Resources Committee began its own hearings on the bill this afternoon (Friday, March 22, 2013). The committee expects to spend at least six meetings, including every day next week, vetting the bill before it moves to the House Finance Committee for further consideration. Bills often change as they move through the legislative process. SB 21 is no exception. As it reads today, SB 21:
·Will reduce the oil companies’ tax liability to the people of Alaska, depending on the barrel price, anywhere from $600 to $700 million per year. In other words, the oil producers get more money!
·Repeals the monthly progressivity tax instituted in 2007 under ACES (“Alaska’s Clear and Equitable Share” – our current tax regime) and establishes a flat 35% annual tax rate on oil and gas produced after December 31, 2013, with a $5.00 tax credit for each barrel of oil subject to the new tax;
·Limits the current 20% qualified capital expenditure tax credit to costs incurred during activity on the North Slope before January 1, 2014. The 20% credit would continue indefinitely for activity south of the Slope;
·Sets a “Gross Revenue Exclusion” to reduce by 20% the tax value of some oil and gas produced North of 68 degrees latitude;
·Provides a corporate income tax credit for qualified oil and gas service industry spending;
·Sets guidelines for the amount the legislature may appropriate to the community revenue sharing fund that our rural communities rely heavily upon;
·Establishes a 9-member “Oil and Gas Competitiveness Review Board” to collect information relating to oil and gas matters in Alaska, and to make annual written findings and recommendations to the Legislature.
The conversation about oil taxes in Alaska is not new. For decades, a vast majority (now over 90%) of Alaska’s unrestricted general fund revenues have come from oil production taxes. Those revenues have funded a wide array of state services over the years - including education, public health and safety, energy improvements, transportation and economic development infrastructure, and all the other basics our diverse communities need to thrive.
Oil taxes are a perennial topic of debate in the Alaska Legislature, always contentious. Everyone agrees that oil flowing through the 35 year old Trans-Alaska Pipeline System (TAPS), which stretches 800 miles from the North Slope to Valdez, is on the decline. Everyone agrees that the State and the oil industry must partner to ensure Alaska’s success. But not everyone agrees on what that partnership should look like. According to our State Constitution, Alaska is an owner-state – meaning that the resources beneath our ground belong to the people of Alaska. But we are only able to realize the economic gains we have come to rely on so heavily, with the help of the companies who explore, extract, refine, and market those resources. The key question in this debate: where is the solid middle ground? How do we find the right balance between protecting our ownership rights and rewarding the companies who produce Alaska’s resources? Where is the “sweet spot” that is fair to both?
I will continue following SB 21 as it moves through the House Resources and Finance Committees. Depending on what changes the House may make, this week’s narrow Senate support may or may not hold. Stay tuned for updates in future eNews editions.
Below are bills that have been heard in various house committees.
HR 6: Chinook Bycatch Limits
HB 49: Chinook Research & Restoration Endowment
HB 143: Commercial Fishing Crewmember Licenses
Community and Regional Affairs
HB 131: Abandoned and Derelict Vessels
HB 163: Regulation of Solid Burning Fuel Burning Devices
Labor and Commerce
HB 122: Repeal Film Tax Production Tax
HB 76: Unemployment Electric Filing of Labor Information
HB 74: AIDEA: LNG; Dividends; Financing
HB 102: Retirement Plans; Roth Individual Retirement Accounts; Probate
SB 21: Oil and Gas Production Tax
HB 158: DNR Hunting Concessions
Reminder: Permanent Fund Dividend Applications Are Due March 31st! http://www.pfd.state.ak.us/
Once again, it is a great honor to represent you in Juneau – I appreciate your trust and look forward to working together for the good of our communities.
As always, I hope to hear your thoughts on any issue or matter of interest to you or your community. Please feel free to contact my office any time.