Rep Lyda Green (r) Newsletter

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news from the valley

The Senate Finance Committee is gearing up for hearings on Senate Bill 305, the Governor’s proposed Petroleum Production Tax. This bill proposes to eliminate the economic limit factor (ELF) from being used to calculate the production tax owed to the State by companies that produce oil and gas economic Limit Factor The ELF was originally established in 1977 to encourage production in marginal oil fields. Each oil field was essentially given its own individualized tax rate based on its age and production levels. Twenty-nine years after the ELF was established,it has become evident that it is an archaic tax system that no longer taxes the production of Alaska’s oil wealth in a fair and reasonable manner. For example, because of ELF, the second largest producing oil field in the nation (Kuparuk) will no longer pay a production tax after this year. PPT Specifics SB 305 will create a new
petroleum production tax based on a percentage of net profit, after deducting capital and operating
expenditures. As a result, production taxes would be lower when new capital investment is made at the beginning of a field’s life and higher as the field becomes productive and companies’ profits increase.
• A credit for 20% of a company’s annual
loss;
• A transition provision that allows for
cost recovery of investments made as
far back as July, 2001.

The Next Step The Governor has stated that a new petroleum production tax is an essential step in
finalizing negotiations with the major producers over a gas pipeline contract. In fact, we have heard from the oil and gas companies who would be affected by this legislation and they are sopportive. They, too, understand that the current production tax The tax rate proposed in the bill is 20% of the net profit. At current oil prices, this will increase revenues to the State by over one
billion dollars per year. In response to such a high tax increase, a litany of tax credits have been offered to ease the financial burden while also providing incentives for companies to reinvest,
explore and develop Alaska’s oil and gas resources. The credits proposed in the bill include:
• A 20% credit for new capital investment
made in Alaska;
• A $73 million annual allowance for
every oil company operating in the
state;
using ELF has outlived its useful purpose and must be amended. Since the bill was introduced two and half weeks ago, most legislators have worked day and night to develop a keen understanding of this complex issue. The only thing we all agree on at this point in the process is that the bill will go through many changes before it is passed. Ultimately, we all have the same goal in mind – to develop
a fair tax scheme that is in the best interest of Alaska and will stand the test of time for generations to come. For more information and to follow the progress of this legislation, visit http://www.akrepublicans.org/info/ongtax.php.

FY 06 Supplemental Budget Amended, Includes $3.85 M for Su-Valley Roof Senator Lyda Green and Senator
Charlie Huggins influenced an amendment to the FY 06 supplemental budget to include $3.85 million in funding to replace the Su-Valley High School roof, seventy percent of the total cost. Senator Green spent several weeks meeting with the Governor’s budget director to secure the emergency funding for this project. The Governor recognized the importance of this project and worked graciously with Valley Senators to secure the funding for this project. Senator Huggins has been a strong advocate for the high school for Upper Mat-Su residents. If the supplemental budget is approved by the Legislature with the Su-Valley roof appropriation included, construction can begin in May. Senator
Green and Senator Huggins continue to work diligently to encourage members of the Senate to recognize the importance of this project as the supplemental bill is passed on to the House.
An additional $1.6 million is needed for the project, however the Valley Delegates and Mat-Su
Borough representatives were pleased with the outcome and will continue to work on this project.
Project completion is slated for December.


SB 216 BAIL RESTRICTIONS Allows a judge to temporarily or periodically release a prisoner
before trial or after conviction. Unanimously passed Senate Judiciary. Passed out of Senate
Finance on March 8. Goes to vote on Senate Floor. SB 218 CRIMINAL SENTENCING AND POLYGRAPH
Increase penalties for first felony conviction and failure to report a sex offender or
child kidnapper, increases length of probation and the Department of Public Safety provides an internet directory of offenders. Passed Senate Y19 E1. Transmitted to House and referred to (H) Finance. Senator Green and her Finance Committee Aide, Darwin Peterson, discuss upcoming
bills before the start of a Senate Finance Committee Meeting.

The state of Alaska is pursuing the purchase of the Valley Hospital building with plans to turn the vacant building into a justice center. Senator Green added intent language to the Governor’s FY06 supplemental budget requesting the Department of Administration to investigate the purchase of the vacant Valley Hospital building to provide a centralized facility for justice related offices
and reduce over all rent costs for the State agencies in the Mat-Su Valley. Turning the old Valley Hospital into a justice center will save the state millions of dollars. The construction of a new building would cost the State upwards of $40 M. Senator Green began thinking about the possibilities for the old hospital long before the hospital closed. “The old Valley Hospital building is the perfect location to build the State’s first justice center. It is within walking distance to the Palmer Court House, Mat-Su Pre Trial, Palmer Police Department and the Alaska State Trooper
Post.” She went on to say, “The justice center would allow the Palmer Court House to expand. We’ve all heard that Mat-Su is the fastest growing region in the State but what people may not know is that we have rapidly growing public safety concerns and overburdening case loads.”The new justice center goes hand-in-hand with a recent proposal to build the State’s largest prison in Mat-Su. The justice center would allow district attorneys, public defenders and various other court and public
safety agencies a central location to work and hold meetings.


Justice Center Coming to Palmer: Senator Lyda Green influential in the State’s proposal to purchase Valley Hospital Building President Ben Stevens (R)Anchorage appointed three members from the Senate to the conference committee. The conference committee on HB 149 will hold their first meeting during the week of March 20-24 to begin working through the details of this bill. Both the Senate and the
House are confident an agreement can be reached on HB 149. Appointed to the HB 149 conference committee are:
Rep John Coghill (chair)
Rep Bill Stoltze
Rep Harry Crawford
Sen Ralph Seekins (chair)
Sen Con Bunde
Sen Hollis French.


With overwhelming support, HB 149 Controlled Substances passed the Senate with a vote of Y18 N2. HB 149 was transmitted to the other body with attached Senate amendments, however the other body failed
to concur with those changes. On February 1, Speaker of the House John Harris (R) Valdez appointed three members of the House to the HB 149 conference committee. The following week Senate HB 149 Controlled Substances Goes to Conference Committee Both the Senate and the House are confident an
agreement can be reached on HB 149.