Senate passes Murkowski-Stevens Exxon Valdez Oil Spill provision, and additional funding for Southeast Alaska communities and schools
Contact - Mike Brumas at 202.224.9301 or Anne Johnson at 202.224.8069
WASHINGTON, D.C. – U.S. Sens. Lisa Murkowski and Ted Stevens, R-Alaska, today won Senate approval of legislation that would give plaintiffs in the Exxon Valdez oil spill case the ability to increase retirement contributions and provide tax relief through income averaging.
The proposal was included in a tax extenders package that would continue expiring tax breaks, provide energy conservation and renewable energy incentives and provide another one-year fix to keep the alternative minimum tax from raising taxes on millions more Americans.
The tax package, which passed 93 – 2, also includes a provision that would extend the Secure Rural Schools and Community Self Determination Act, which provides federal assistance to communities and schools adjacent to National Forests, through September 30, 2011. The tax package must be approved by the House of Representatives before it is sent to the President.
“While I am extremely disappointed in the Supreme Court’s decision to reduce the punitive damage award to the victims of the Exxon Valdez oil spill, this legislation will help lessen the tax burden and allow the 30,000 plaintiffs to keep more of the compensation they receive.” Murkowski said.
The Exxon Valdez provision:
• Allows individual plaintiffs to income average settlement payouts over a three year period of time. Currently, fishermen can average their income over three years due to the volatile nature of the industry. Despite the fact that any income from this case is essentially lost income for fishermen and others whose livelihoods were negatively impacted by the spill, punitive damage or settlement-related income from litigation cannot be averaged over three years under current law.
• Permits individual plaintiffs to contribute up to $100,000 to a traditional IRA, Roth IRA, SEP (Simplified Employee Pension) IRA and other retirement plans, such as 401(k) plans, 403(b) plans and 457 plans.
• Exempts plaintiffs from having to pay self-employment taxes or payroll taxes on any payouts from this case.
In Alaska, the “Secure Rural Schools” legislation currently benefits communities and schools adjacent to the Tongass National Forest in Southeast Alaska. The Secure Rural Schools legislation expired on September 30, 2007, and no payments were made to school districts for the 2007-2008 and 2008-2009 school years. The new legislation directs that the federal government make payments for both school years.
“Our Southeast communities and school districts have been waiting for two school years wondering whether the Secure Rural Schools Act would be extended. The Senate has long supported the extension of this crucial program, but our efforts have not met with success in the House of Representatives. I’m cautiously optimistic that this effort will meet with better success,” Murkowski said.
The extension legislation includes a new formula for the distribution of Secure Rural Schools payments, which for the first time takes into account the number of National Forest acres in each state. Alaska has about 22 million acres of National Forest lands, divided among the Tongass and Chugach National Forests. Eleven percent of all of the lands which are part of the National Forest System are located in Alaska.
The new formula is expected to increase Alaska’s share of the national Secure Rural Schools funding pie from about $9.7 million to about $19 million for the 2007-2008 federal fiscal year. Although Alaska’s funding drops to approximately $14 million in the 2010-2011 federal fiscal year it gains much from the new formula.
The legislation also funds at the maximum level authorized by law through September 30, 2011, the Payments in Lieu of Taxes (“PILT) program, which is administered by the U.S. Department of the Interior. Alaska communities received $15.6 million in PILT funding for federal fiscal year 2008 which ends September 30.
“The federal government controls some 232.8 million acres in Alaska, more than 60 percent of Alaska’s total land mass,” Murkowski said. “PILT payments compensate governments for property taxes lost from tax exempt federal lands.”