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Rep. Adam Wool's 
Update from Juneau:
End of Regular Session 

 

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Dear Friends, Neighbors, and Fellow Fairbanksans, 
 

Community Coffee Hour: come have a cup of coffee and chat with Rep. Grier Hopkins (House District 4) and I this Sunday, May 19th from 11AM to 12PM at the Alaska Coffee Roasting Company (ACRC) on Geist Rd. Hope to see you there. 

Yesterday marked the 121st and final of the regular legislative session.  Last evening, the governor called the legislature back into a special session to address these issues:

  1. The operating budget
  2. Crime legislation (HB49)
  3. The capital budget
  4. The mental health trust budget

The special session may last up to 30 days. I am certainly not thrilled about this and would much rather be home in Fairbanks enjoying our warm summer weather but it’s also important that we get a good budget this year, that we fully fund education, that we have a responsible PFD and try to insure that the Gov doesn’t make huge cuts to the budget with his veto pen.
  
As with all end of session days, there was a flurry of activity in the last several days. HB 49, a bill which attempts to address many of the perceived deficiencies in Alaska’s criminal laws, policies, and implementation, passed the House and Senate earlier this week. The differences between the House and Senate versions of this bill must now be ironed out, and this is one focus of our special session.

The House and the Senate have pretty much agreed on a new compromised bill that takes elements from each version of the bill. This new version will  be introduced on the House floor on Monday and voted on.

 

 

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Representative Wool speaks on the House floor.
 

The full Senate recently passed their version of the state budget. The House and Senate budgets are now in the process of being reconciled with one another, with each difference open for debate during a conference committee. After the House and Senate accept these changes, the resulting budget will be forwarded to the governor. If he chooses to veto all or part of the budget, the legislature will have the opportunity to override the veto with a ¾ vote.

The Governor introduced a budget with major cuts and we heard from many people that they preferred to keep most services and if needed to cut the PFD. The House and the Senate budget made some cuts as well but not nearly as deep as the governor’s cuts.
 
The Senate budget contains differences from the House but most of those differences have been ironed out including the University, the ferries, Medicaid and more.  The biggest differences between the two relate to the Permanent Fund and this year’s dividend.
 
The PFD has historically been included as a separate appropriation from the budget. As such, the House did not include a PFD in our budget. The Senate included a $3000 dividend in theirs, without providing a mechanism to pay for it. If maintained, this will result in a $1.2B deficit which will have to be paid using the Permanent Fund’s Earnings Reserve or the state’s Constitutional Budget Reserve. The Senate also approved moving $12B from the Earnings Reserve (which can be accessed by the legislature) to the principal of the Permanent Fund (which cannot). The PFD is paid from the Earnings Reserve. While this move protects these funds from legislative appropriation, it also means that there will be far less money available next year for both the PFD and the budget, especially if the state’s investments lose value over the next year. A separate proposal in the House would move $8B into the principal of the Fund.
 
If the Senate had balanced their budget, there would be enough left for a $1200 PFD next year without spending any money out of our savings and have a truly balanced budget.
 
The Senate budget implements a smaller cut to the University system while endorsing deeper cuts to both Medicaid and ferries than the House. The conference committee accepted the Senate’s proposal for University funding (which represents a smaller cut than the House), split the difference on Medicaid funding (a net reduction of $60.3M), and chose the Senate’s number on marine highway funding and cut $40M. During the House subcommittee process, I sponsored an amendment to add $10M to the University budget to help offset the significant reductions it has been forced to absorb in recent years. While initially accepted, it was removed during a later committee. While I have concerns about the impact of these cuts, I am pleased that the cut to University funding is less than the House and the governor proposed.

 

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Representative Wool speaks with Representative Claman on the House floor.


PERSONAL LEGISLATION: 
This year, I’ve introduced three pieces of legislation:
 
HB 102: Vehicle Rental Tax
Currently, Alaska collects a 10% tax on any car rented in Alaska, with tourists making up most of the income generated by the State Motor Vehicle Rental Tax. Most Alaskans are happy with this arrangement, and the existing businesses which rent these vehicles don’t have a problem collecting the tax and passing it on to the state.

Alaska state law is quite clear that these taxes shall be collected and paid by the entity who provides the vehicle. However, new business models that allow companies to employ “hosts” that rent their personal vehicles through apps have refused to collect the taxes on vehicles rented through their app. HB 102 defines a ‘vehicle rental business’ and a ‘vehicle rental network’ in order to prevent these types like this from shirking their legal responsibilities. This is similar to the bed tax that many municipalities collect on AirBnb. This bill is in house finance right now.
 
HB123: Electric-Assisted Bicycles
We’ve heard from a number of our constituents who enjoy their electric-assisted bicycles, but aren’t clear about how and where they can be legally operated. The state of Alaska does not have any laws pertaining to electric-assisted bicycles, nor any related references to operating licenses, safety requirements, local traffic laws, or related definitions. A new definition is required to bring clarity for operators of these bicycles.

My bill defines electric-assisted bicycles and regulates them as regular bicycles, with a provision for local municipalities to further regulate them as desired. The bill passed through the House Transportation and Judiciary committees this year.  
  
HB 132: PFD Formula Change
The money to pay for government services overwhelmingly comes from the state’s oil wealth, either directly or through investments derived from previous oil industry payments. The money to pay for Alaskan’s Permanent Fund Dividends comes entirely from investment earnings. A formula exists in statute to pay the PFD as a percentage of investment earnings, but this formula has not been followed each of the last three years, due to the state’s ongoing fiscal uncertainty.

One of the issues with the current formula is that it obligates the state to pay potentially huge dividends, even if the fund itself loses money. Historically, the amount of the PFD has been largely inversely correlated with the broader economy – when oil revenue goes up, the PFD has gone down, and vice versa.

My bill would change the formula and tie the dividend directly to oil and gas revenues – if the price of oil, volume of oil produced, or taxes paid to the state increased, so too would our annual checks. This would help to stabilize state revenue while ensuring that residents remained engaged on the details of oil prices, production, and policy.  This bill was just passed out of State Affairs and is now in House Finance.

 

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Representative Wool with Dr. Rajive Ganguli from UAF's Mineral Industry Research Laboratory 

 

Guests in the Capitol
I always appreciate seeing constituents in the Capitol. Dr. Rajive Ganguli from UAF’s Mineral Industry Research Laboratory recently visited. Using a federal grant, he has developed a training simulator for mill operators which is now going worldwide, with mills in Brazil and Mongolia currently using his technology. This technology is in the process of being patented, and will be of direct financial benefit to both the University as well as UAF’s Community and Technical College.


Thanks,

 

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Contact me with your questions, concerns, and ideas. You can always reach me at rep.adam.wool@akleg.gov, and while we are in Juneau for the session call us at 907-465-4976. If you are in Juneau, come visit us on the 4th Floor of the State Capitol in Room 412. We'll be here in Juneau for the special session. 

 

 

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