Capitol Notes - April 10-14, 2017
|April 10-14, 2017|
In this Issue
Bills We're Watching
Documents of Interest
Items of Interest
As we approach the 90-day mark we see the Senate and the House move the major pieces of legislation to the point where their passage will be determined by the outcome of negotiations between the two bodies.
The Senate completed their work on the operating budget, House Bill 57, not without some drama. While the Senate Majority reduced the size of the operating budget it wasn't enough for one of their members. Senator Dunleavy broke away from his caucus to vote against the operating budget. In the past we've seen other legislators break away from their caucuses, and not without consequences. Usually this means losing committee chairmanships and staff, but it is still unclear what might happen. The House now has possession of the budget and it is on their calendar for today. We anticipate them to go through the motions and not accept the changes made by the Senate and send it back to them to see if they will recede from their changes. From there it will be a matter of each body appointing their conference committee members, which will then initiate the 24-hour rule.
The House Finance Committee has been busy working to pass out of committee their two big revenue bills, House Bill 111 and House Bill 115. Last Friday we saw a new version of HB 111 released that would significantly increase taxes on the oil industry as well as end cash payouts for Net Operating Loss (NOL) tax credits. The Committee moved quickly on this latest version taking up amendments on Saturday, and then moving it to the House floor where the House is scheduled to take up the bill later today.
While no formal action was taken on HB 115 we saw a potential version of Senate Bill 26, the Senate's fiscal plan bill, being gutted and replaced with all the provisions of HB 115 except for the income tax. One aspect of this new version is the conditional language placed in the bill that would mandate that the Senate pass the version of HB 111 that passes out of the House along with a broad-based tax, directed at education, and generate at least $650 million annually. This conditional language would be a poison pill to the Senate Majority who has already said they would not take up a broad based tax or an increase in taxes to the oil industry this session. The House Majority is having an extremely difficult time getting their own caucus members to support a broad-based tax and they view this as a way to make it easier on their own members and put all the pressure on the Senate. The House Finance Committee gaveled in early at 8 a.m. today and debated the aspects of this new version of SB 26. They will take up the bill again today at 4 p.m. where they will take public testimony on this new version of SB 26.
Get ready to see the legislature go to the constitutionally allowed 120 days. With such large issues still pending, and the gap that still seems to loom between the two bodies, you can assume they won't finish their work anytime soon. While these major issues are definitely the focus of the legislature and the public many other bills are still moving and we are also monitoring these bills and weighing in where appropriate.
As always, please feel free to reach me by email or by phone at (907) 223-8270.
Curtis W. Thayer
President and CEO
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|Legislative Committee Schedule|
MONDAY, APRIL 10
(H)JUDICIARY - 1 P.M.
HB 200 NONPARTISAN OPEN PRIMARY ELECTIONS
HB 208 TRUSTS; COMM PROP TRUSTS; POWERS OF APPT
(H)FINANCE - 4 P.M.
SB 26 APPROP LIMIT & PER FUND:DIVIDEND;EARNINGS
- Public Testimony
- Please arrive 30 min. prior to end of allotted time or testimony will close early
- Call 465-4648 for call-in number
- All Off Net callers must hang up immediately after testifying to keep lines open
- Continue to access meeting through akleg.gov
- The hearing may be televised on Gavel to Gavel, please check listings
- Submit written testimony to firstname.lastname@example.org
TUESDAY, APRIL 11
(S)FINANCE - 9 A.M.
SB 23 APPROP: CAPITAL BUDGET
(H)FINANCE - 1 P.M.
SB 26 APPROP LIMIT & PER FUND:DIVIDEND;EARNINGS
HB 115 INCOME TAX; PFD CREDIT; PERM FUND INCOME
(S)COMMUNITY & REGIONAL AFFAIRS - 3:30 P.M.
SB 106 MUNI TAX EXEMPTION: ECON DEVEL PROPERTY
(H)STATE AFFAIRS - 5:30 P.M.
HB 73 CLIMATE CHANGE COMMISSION
WEDNESDAY, APRIL 12
(H)JUDICIARY - 1 P.M.
HB 170 AK SECURITIES ACT; PENALTIES; CRT. RULES
HB 200 NONPARTISAN OPEN PRIMARY ELECTIONS TRUSTS; COMM PROP
HB 208 TRUSTS; POWERS OF APPT
HB 175 US PRESIDENT ELECT. POPULAR VOTE COMPACT
(S)JUDICIARY - 1:30 P.M.
Confirmation Hearings: Jahna Lindemuth, Attorney General
(H)LABOR & COMMERCE - 3:15 P.M.
HB 36 TAX: INCOME FROM NON C CORP ENTITIES
THURSDAY, APRIL 13
(H)COMMUNITY & REGIONAL AFFAIRS ENTITIES - 8 A.M.
SB 63 - REGULATION OF SMOKING
(H)JOINT SESSION - 11 A.M.
Consideration of Governor's Appointees
(S)STATE AFFAIRS - 3:30 P.M.
SB 106 MUNI TAX EXEMPTION: ECON DEVEL PROPERTY
FRIDAY, APRIL 14
(H)RESOURCES - 1 P.M.
Presentation: AK Gasline Development Corp. Status Update
(H)LABOR & COMMERCE - 3:15 P.M.
HB 209 PRODUCT WARRANTIES & REQUIRED UPDATES
|Bills We're Watching|
As the statewide advocate for the Alaska business community, the Alaska Chamber keeps an eye on the bills that come up during the legislative session that could affect your interests. The bills we're watching this legislative session can be viewed on our "Bills We're Watching" web page here. If you have a question about the "Bills We're Watching" system, please contact Curtis W. Thayer at email@example.com.
|Documents of Interest|
TRUSTS;COMM PROP TRUSTS; POWERS OF APPT
B 94 - Background Document - Decanting Matrix.pdf
SB 94 - Background Document - Trust & Estate Glossary.pdf
SB 94 - Background Document - Decanting Rankings.pdf
SB 94 - Fiscal Note - Law.pdf
SB 94 - Opposition Letter - David Shaftel.pdf
SB 94 - Sectional Analysis.pdf
SB 94 - Support Letter - AK Bankers Assoc..pdf
SB 94 - Support Letter - Manley Brautigam.pdf
SB 94 - Support Letter - Northern Law Group.PDF
MOTOR FUEL TAX;TRANSPORTATION MAINT. FUND
HB60 Sponsor Statement - Governor's Transmittal letter.pdf
HB60 Supporting Document - DOR Presentation - 4.5.17.pdf
HB60 Motor Fuel Tax Briefing - 5 April 2017.pdf
Motor Fuel Tax Background Information.pdf
HB 60 DOC (005HB 60 Opposition Documents 4.5.17.pdf
HB 60 Opposition Letter.pdf
HB 60 SILC Position Paper Two Cents for Transit (Recovered) (004).pdf
HB 60 Support Documents 4.5.17.pdf
INSURER'S USE OF CREDIT HISTORY/SCORES
HB195 Fiscal Note DCCED-DOI 3.28.17.pdf
HB195 Sectional Analysis ver A 3.28.17.pdf
HB195 Supporting Documents-Letter of Support 3.28.17.pdf
HB195 Supporting Documents-Side by Side 3.28.17.pdf
HB195 Transmittal Letter 3.28.17.pdf
AK WORKFORCE INVESTMENT BOARD;FUNDS
SB 85 - Background Document - TVEP 2016 Report Cover Letter.pdf
SB 85 - Background Document - TVEP Distribution FY09-17.pdf
SB 85 - Background Document - TVEP 2016 Report.pdf
SB 85 - Background Document - TVEP Program Basics.pdf
SB 85 - Background Document - UA TVEP Advocacy Package.pdf
SB 85 - DOL&WD Presentation.pdf
SB 85 - Fiscal Note - DEED.pdf
SB 85 - Fiscal Note - DOLWD 2.pdf
SB 85 - Fiscal Note - DOLWD 3.pdf
SB 85 - Fiscal Note - DOLWD.pdf
SB 85 - Fiscal Note - UA.pdf
SB 85 - Support Letter - NACTEC.pdf
SB 85 - Support Letter - UA.pdf
SB 85 - Support Resolution - APICC.pdf
SB 85 - Support Resolution - Maritime Works.pdf
AK SECURITIES ACT; PENALTIES; CRT. RULES
HB170 ver J 4.7.17.pdf
HB170 Sectional Analysis 4.7.17.pdf
HB170 Sponsor Statement 4.7.17.pdf
HB170 Repealers List 4.7.17.pdf
HB170 DCCED Whitepaper 4.7.17.pdf
HB170 Supporting Document-Letter ANCSA Regional Association 4.7.17.pdf
HB170 Supporting Document-Letter NASAA 4.7.17.pdf
HB170 HJUD Slide Presentation 4.7.17.pdf
HB170 Fiscal Note DCCED-DBS 4.7.17.pdf
HB170 Fiscal Note DHSS-SDSA 4.7.17.pdf
MUNICIPAL LIENS: AUTHORITY FOR & PRIORITY
SB 100 - Letter of Support - Juneau.pdf
SB 100 - Letter of Support - Municipality of Anchorage.pdf
SB 100 - Sectional Analysis.pdf
SB 100 - Sponsor Statement.pdf
SB 100 - Supporting Document - Benintendi Legislative History.pdf
ALASKA RAILROAD CORPORATION LAND
SB 86 - Version A.PDF
SB 86 - Sponsor Statement.pdf
SB 86 - Sectional Analysis.pdf
SB 86 - Supporting Document - ARRC Fact Sheets.pdf
SB 86 - Fiscal Note - AK Railroad - 3 - 31 - 17.pdf
SB 86 - Support- Denali Borough.pdf
SB 86 - Support - Usibelli Coal Mine.pdf
OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS
HB 111 DOR Tax Division NEW FN 4-7-17.pdf
HB 111 Gara 4.8.17 Potential Maximum Royalty Reduction Allowed Under Royalty Relief.pdf
PF/ POMV/ Dividend
SB 26 CS version U.pdf
SB 26 Comparision_Senate to House Finance CS_4.7.2017.pdf
|Bills Introduced Last Week|
|Items of Interest|
Alaska Gov. Walker joins other states in urging feds not to interfere with legal pot
Alaska and three other western states on Monday asked the Trump administration not to scrap federal policies that have served as the foundation for state cannabis industries. Existing federal policy is "vital to maintaining control over marijuana in our states" says a letter dated April 3, signed by Gov. Bill Walker and the governors of Oregon, Washington and Colorado. Read More
Chuitna coal mine shelved after company suspends permitting
The company behind a large and contentious coal mine proposed for the west side of Cook Inlet is suspending all permitting efforts, suddenly putting the Chuitna Coal Project in limbo. Dan Graham, project manager for PacRim Coal, told officials at the Alaska Department of Natural Resources about the company's decision late last week. DNR posted an update on its website Friday. Read More
Alaska homebuilders push for action in Juneau for housing market success
Alaskans in the homebuilding industry are looking to state lawmakers to ensure their industry’s future is successful. Andre Spinelli, the design and redevelopment manager at Spinell Homes, said he is cautiously optimistic about the housing market. Read More
Anchorage, railroad clash over split of federal funds
Anchorage Mayor Ethan Berkowitz and the Alaska Railroad Corp. are at odds over a longstanding stream of federal transportation grants that neither side will receive until the dispute is resolved. The railroad took a $7.4 million loss in 2016 that CEO Bill O’Leary says is directly attributable to Berkowitz’s refusal to sign a joint letter the Anchorage mayor and railroad head must send to the Federal Transit Administration before $15.3 million in 2016 formula grant funds is released. Read More
Looking back, looking forward
Since October 2014, when I began writing Empire op-ed columns, a lot has happened on both the national stage and in our state and community. Throughout, I have advocated some basic principles I believe are important as our state and country struggle to contend with declining revenues, deepening government dependence, exploding health care costs and growing political division. Read More
GCI to be sold to Colorado media conglomerate for $1.1 billion
General Communication Inc., Alaska's largest telecommunications company, will be acquired by Liberty Ventures Group, a subsidiary of Colorado-based media conglomerate Liberty Interactive Corp., the company announced Tuesday. The $1.12 billion buyout allows GCI to magnify its already dominant position in Alaska and expand to markets outside the state. Read More
Lockheed Martin: Cargo airship on track for Alaska delivery in 2019
An official with Lockheed Martin told Alaska lawmakers Tuesday that efforts are on track to bring a modern cargo airship to the state in 2019. The aircraft builder is working with Alaskans and is close to finishing deals to help make that happen, said Craig Johnston, director of business strategy and development for a California-based Lockheed Martin program, Skunk Works, that is developing a helium-filled airship. Read More
Alaska Railroad reports $4.4 million loss in 2016
The Alaska Railroad Corporation had a rough year in 2016, where it saw a dramatic drop in revenue. The company finished 2016 $4.4 million in the red. Read More
Bill addressing contaminated property moves fast in Senate
A bill easing transfers of contaminated properties is moving fast in the state Senate. Senate Bill 64, related to environmental covenants, was introduced Feb. 17, moved out of the Senate Community and Regional Affairs committee March 7 and out of Senate Labor and Commerce March 16. Read More
Reducing exposure, GCI looks to its own fiscal certainty by merging
Alaska-born GCI is merging with a Colorado-based company in a $1.12 billion deal. The merger between Liberty Ventures Group and Alaska’s largest telecommunication company was announced this morning. Read More
Anchorage utility consolidation pondered
City-owned Municipal Light and Power services Downtown and Midtown Anchorage, as well as Joint-Base Elmendorf Richardson. Chugach Electric Association, a cooperative utility, covers the remaining majority of the city and small portions of the northern Kenai Peninsula Borough. Strunk, who has testified before the Regulatory Commission of Alaska on utility matters in the past, said full consolidation of Chugach and ML&P is the single biggest thing the utilities could do to capture operational savings. Read More
State launches review of Premera’s finances
After the state’s sole individual market health care insurance provider posted a higher than expected profit this year, the Alaska Division of Insurance launched an investigation into the company’s financials. Premera Blue Cross Blue Shield of Alaska is the last health insurance company standing on the state’s federally facilitated individual insurance marketplace, where Alaskans who don’t get employer-sponsored health insurance or qualify for public options like Medicare or Medicaid can purchase insurance. Read More
Native health corporation dedicated its $300 million hospital project Wednesday. Now it's time to build.
The vision came in 2002, but key pieces didn't begin to fall into place until 12 years later. Now the biggest construction project in Southwest Alaska is underway, a complete redo of the regional hospital and associated clinics in the Bethel hub. Read More
Insurance officials hope federal waiver will cover reinsurance costs
State officials and insurance companies in Alaska say they are encouraged by positive receptions so far from President Donald Trump’s administration on an application for federally-backed health “reinsurance” program for individual health insurance policies sold in the state that have been hit hard with losses. If the proposal is accepted, federal funds could replace a $55 million, one-year backstop put in place by the state in 2016, in House Bill 367, to prop up the individual health insurance market. Read More
Oil & Gas
Cook Inlet leaks draw more scrutiny for Hilcorp and its aging infrastructure
State regulators on Monday announced an oil leak from an underwater pipeline owned by Hilcorp in Cook Inlet was halted successfully. But at this point, the state doesn’t have its own estimate for how much oil was released into the Inlet or knowledge of what caused the leak. Read More
Federal regulators say they are investigating a third Hilcorp pipeline leak in Cook Inlet
Federal pipeline regulators said Friday they are investigating a third recent leak from a subsea pipeline in Cook Inlet — this one involving produced natural gas from a pipeline at the Steelhead platform — although the platform operator said Friday that several helicopter flights spotted no release. Darius Kirkwood, a spokesman with the U.S. Pipeline and Hazardous Materials Safety Administration, said the agency confirmed on Friday that there was a leak. Read More
State take quintupled BP profit in 2016
BP made $115 million worldwide last year and $85 million of those profits came from Alaska, according to the oil major’s 2016 annual report published April 6. On the flipside, a BP spokesperson noted the company paid $464 million in taxes and royalties to the State of Alaska before realizing the $85 million in-state profit. Read More
Alaska session expected to run long with big issues pending
Alaska legislative leaders plan to work beyond the voter-approved 90-day session limit, with the state budget and elements of a deficit-reduction plan unresolved. The session is scheduled to end April 16. Read More
Nearing 90-day deadline, Alaska lawmakers advance bills on health care, campaign fundraising and crime
Alaska legislative leaders plan to work beyond the voter-approved 90-day session limit, with the state budget and elements of a deficit-reduction plan unresolved. The session is scheduled to end April 16. But House and Senate leaders expect to miss that deadline. Read More
Dunleavy leaves Senate majority before voting against budget
Wasilla Republican Sen. Mike Dunleavy announced he’s leaving the Senate majority, before the Senate passed its budget on Thursday. Dunleavy joined five minority-caucus Democrats to oppose the $4 billion spending plan, which passed 14-6. He said he felt constrained in the majority, which requires members to support the budget. Read More
Alaska Gov. Walker: 'My focus is what we get done, not when we get it done'
Alaska Gov. Bill Walker has stayed away from public view during the current legislative session, as the House and Senate advance separate deficit-reduction plans. With lawmakers nearing a flexible, 90-day deadline set by a citizens initiative — the state constitution allows them to keep working through 121 days — Walker says he's more concerned about the Legislature's final product and less worried about its timing, even with signs of a deepening standoff. Read More
Changing the rules to survive
Apparently unsatisfied with simply denying her constituents the Republican they thought they were voting for when they elected her, Rep. Gabrielle LeDoux now wants to change the voting system to include an open primary election with all candidates on one ballot, apparently to improve her odds in the next election. Nowadays, the Republican primary in Alaska is closed to everyone but registered Republicans, nonpartisan and undeclared voters. Read More
Alaska Disconnect skews budget debate
In debating the state's fiscal future amid an almost $3 billion annual budget gap, many Alaskans talk about how more state-supported public services should "pay their own way," or at least get closer to covering the costs. The users should pick up more of the tab, they say, not the state treasury. Read More
Does Jahna Lindemuth have the votes for confirmation as AG?
Jahna Lindemuth has been Alaska’s acting attorney general since the sudden exit of Gov. Bill Walker’s first attorney general, Craig Richards, in 2016. But her confirmation is less than certain. Read More
A surprise guest: Chinese president makes Anchorage stopover, meets Gov. Walker and takes in some sights
Chinese President Xi Jinping made a surprise visit to Alaska on Friday evening, catching a seafood dinner in Anchorage, meeting with Gov. Bill Walker, and taking in a sightseeing moment in Turnagain Arm before returning to the sky again in his Boeing 747 for the journey back to Beijing. The Alaska stop underscored the significance of the Arctic to China's long-term economic interests. Read More
Alaska Senate approves changes to criminal justice law
The Alaska Senate has approved changes to sweeping criminal justice legislation passed last year, following public outcry about crime. In a statement, Sen. John Coghill says the changes provide a balance between rehabilitation and a need to confine offenders for public safety. Read More
Gov. Walker breaks down his Alaska meeting with Chinese President Xi Jinping
As Chinese President Xi Jinping and his large entourage gazed at the wintry mountains along Turnagain Arm during a surprise visit to Anchorage this week, he mentioned to Alaska Gov. Bill Walker, who stood at his side, that China was hosting the Winter Olympics in 2022 and its athletes were looking for snowier venues to train. Walker gestured down the Seward Highway to the community of Girdwood, home to a popular ski resort, and the two briefly discussed downhill skiing. Read More
LeDoux's bid for jungle primary is real chutzpah
If you must give Rep. Gabrielle LeDoux credit for anything it must be for her sheer, unbridled chutzpah, a magnificent, brassy chutzpah that almost makes you want to cheer for her. It is the kind of audacity that would have a carjacker complaining to his victim about gas mileage. Read More
Time for state budget action: Whichever plan prevails, closing deficit is an absolute necessity
Our backs are against the wall. As the legislative session in Juneau approaches its 90th day, there remain deep divisions between the State House and Senate on budget issues, particularly the mechanism by which the deficit of nearly $3 billion should be closed. The answer to the budget question will have effects that reverberate in the state for years and decades to come — but there must be an answer. Read More
Tax rules, not politics, delay state revenue forecast, Alaska official says
Gov. Bill Walker's administration says the publication of the annual spring forecast of government revenue has stalled, fueling Republican speculation that the state's budget situation may not be as dire as it once was. But Walker administration officials said complications over new tax guidance for oil companies, not politics or strategy, are responsible for the delay in the forecast — one of two key state financial reports behind schedule this year. Read More
Alaska Senate adds new cuts for university and scholarships to schools' reduction
The Alaska Senate's Republican-led majority on Monday followed through on its pledge to cut 5 percent from schools, pairing that proposal with a new cut to the university system and legislation to eliminate a state-sponsored scholarship program. Senate leaders, at a Monday morning news conference where they announced the cuts, simultaneously unveiled a set of three new bills they said could offset the impact of the reductions. Read More
Education funding in crosshairs as House, Senate tussle over fiscal plan
Lawmakers have said filling the state fiscal gap is their top priority this year, but chances of getting that done on time just got slimmer — especially with education funding emerging as one of the flash points. On Monday, the Alaska Senate majority unveiled a 5-percent cut to classroom funding, known as the base student allocation – a move that has widened the divide between the House and the Senate. Read More
Senate Finance budget cut falls short of $300 million goal
The Senate will debate a state government budget for the coming year that is $262 million less than the current budget. The Senate Finance Committee’s proposed cut is much deeper than the $32 million cut the House passed. Read More
The Alaska Senate’s cuts are close to $300 million on paper. But their effect on state spending will be far less.
The Alaska Senate's Republican majority has pledged to cut $300 million from the state budget as part of its deficit-reduction plan. But while the Senate's latest spending plan would use $262 million less next year from the state's unrestricted general fund, the real reduction in the size of government will be far less. Read More
House wavers on income tax
Ketchikan and Anchorage independent coalition members’ uncertainty leaves bill one vote short. Does the Alaska House of Representatives have the votes to approve Alaska’s first income tax since 1980? “We’re working on it,” Speaker of the House Bryce Edgmon told reporters at a Tuesday morning press conference. Read More
Cuts? What cuts?
While the Alaska Senate GOP majority claims it has cut spending by $300 million in its version of the budget fix, the true amount is in question because some of it is very iffy. The majority, for instance, anticipates $70 million from a state gasoline tax that would bring half that amount, the Alaska Dispatch News reports, adding that some cuts here are being made up over there; that some cuts in spending from unrestricted funds will be made up by increased spending in restricted fund accounts. Read More
New Alaska House oil tax bill emerges but faces an uphill climb in Senate
With its income tax proposal stalled, the Alaska House majority is now moving its oil tax bill instead, unveiling a new version of the legislation Friday that limits cash subsidies for companies and makes substantial changes to tax rates and credits. The oil tax measure, House Bill 111, passed the House Finance Committee in a 6-5 vote Saturday and will head next to the floor over the objection of GOP minority members. Read More