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Alaska State Chamber of Commerce Capital Notes

Tuesday March 16, 2010

Progress Check
The Legislature is now just over half way through the legislative session.  After taking nearly a week off for an energy break, the legislature is poised to finish work on the operating and capital budgets.  Just a little more than a week ago, 1/3 of the legislature flew to Washington D.C. to participate in the annual conference regarding energy issues.  In what used to be a four or five member, legislative travel delegation, the group has expanded into a full legislative break during the shortened 90-day session.  For one entire week, most if not all committees were shut down and no real legislative sessions occurred at all.  Some legislators used the time to attend the conference, some used the time to travel to their districts, while others used the time for vacation travel.  After this year's weeklong break including weekends on either side, the legislature would be hard-pressed to justify reverting back to the 120-day legislative calendar. 

State Chamber Annual Legislative Fly-In
Two weeks ago, the State Chamber held its annual legislative fly-in here in Juneau.  We had roughly 20 presenters from the legislature and the administration speak on a variety of subjects.  As always, the State Chamber was able to gather some of the capitals busiest of folks with Speaker Mike Chenault and Senate President Gary Stevens talking to our business members.  House Finance Co-Chair Bill Stoltz also spoke to us along with Sen. Dennis Egan, Rep. John Coghill, Sen. Con Bunde, and Rep. Jay Ramras. 

Most notable at this year's fly-in the State Chamber of Commerce unveiled its new partnership with The Foraker Group to provide health care options for Alaska's businesses.  Alaska State Chamber of Commerce members are now able to access The Foraker Group health benefit plan.  This new partnership allows State Chamber members to have the option to purchase a plan aimed at helping employees live healthier lifestyles.  See more information about this State Chamber benefit online at our website www.alaskachamber.com.

Overall, the fly-in was a success with many participants leaving Juneau with new information along with steady and continued access to the state legislature. 

Budgets
After many weeks of subcommittee work, the House passed the operating budget this past weekend with many democrats on the House side voting with the Republican Majority.  The budget passed by the House incorporates a 2.3% increase of about $182 million in additional spending primarily being used to fund formula programs in the Department of Health & Social Services and Department of Education budgets. The total budget passed by the House is slightly down from the governor's proposed budget of  $8. 2 billion.  The total budget passed by the House was roughly $8.1 billion in spending.  The Senate is in the process of completing their budget subcommittee work, with the budget expected to be finalized in the next two weeks.   Afterwards, the legislature will appoint a joint-committee to work out the two different versions of the budget. 

Work on the Capital Budget is also heating up.  Both the House and the Senate have been meeting with the governor's office to work on projects for deferred maintenance of existing state facilities while also putting together a detailed list on new transportation and capital expenditures.  At this stage, we are unsure what the final numbers will be but expect the capital budget to be in the $2 billion dollar range.  There are additional revenues beyond existing needs but the legislature is also aware of the impending decline in future revenues. 

New Oil Tax Legislation
We reported in our last set of notes that there were new bills to allow for new investment and some rollback of the existing tax structure on oil and gas.  These bills were introduced in the two Resource Committees respectively.  After a few committee hearings, the bills have been accompanied by new legislation to divide oil and gas taxes entirely along with administration bills to provide for additional incentives to galvanize new investment in oil with funding for gas infrastructure.

Where is the legislature at on many of these bills.well we don't really know at this time.  There is confusion and disarray amongst many of the legislators and it is likely there will be no significant oil & gas legislation passing the legislature this year.  

Governor's Scholarship Plan
We are still working on the Governor's Scholarship plan.  The State Chamber believes that incentivizing young Alaskans to stay in state for schooling will help maintain an adequate and educated workforce while providing new minds for new ideas.  The legislature is inclined to change the name of the program and may add additional opportunities for children with extra financial needs.  As long as the program maintains the existing structure while providing mechanisms to keep more of our kids in state, we support those changes as the name of the program is of little concern.  We are optimistic that HB 297/SB 224 will pass the legislature in some form or another.  The existing endowment scenario suggested by the governor is also running into problems, as some legislators do not want to appropriate $400 million into an endowment fund.  The House Education committee has already moved the bill from the committee.  We will see how things progress in coming weeks. 

Legislation
Here are some of the other bills followed by the state chamber of commerce:

SB 86-Mandatory Sick Leave-Senate Finance

HB 225-Procurement for state agencies-House Finance

HB 17 - End Daylight Savings Time-House Finance-Poll results show strong opposition from Business members.  See Poll Results

SB 54/HB 68 - Price gouging involving energy resources-Senate Finance/House L&C respectively

HB 36 - Ballot Initiative -no hearing scheduled in House Finance, waiting for legal questions. 

The following bills are just a few of the oil and gas bills being looked at along with their senate versions:

HB 229 - Gas Exploration

HB 280 - Natural Gas

HB 308 - Oil & Gas Production Tax

HB 337 - Oil & Gas Production Tax Credits

HB 414 - Separate Oil and Gas taxes

SB 303 - Workers' Compensation liability for subcontractors 

There are many other bills we are following, but if there is a concern or a bill important to you and your business please contact the State Chamber with your specific issue. 

Following legislation?
Any person can follow the legislative process and access new bills, committee substitutes or find out which legislator is on a particular committee by using the Legislature'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 also view all bills relating to your specific areas of interest by selecting "Subject Summary" from the menu on the right.  Just click on the link below and bookmark it for later use.

http://www.legis.state.ak.us/basis/start.asp

www.alaskachamber.com

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