Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/07/2015 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB146 | |
| HB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 146 | TELECONFERENCED | |
| = | SB 79 | ||
| + | HB 75 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 146-MUNICIPAL TAX EXEMPTION
3:34:23 PM
CHAIR BISHOP announced the consideration of HB 146. [CSHB
146(CRA) was before the committee.]
3:34:33 PM
TERRY HARVEY, Staff, Representative Cathy Munoz, Alaska State
Legislature, Juneau, Alaska, explained that HB 146 will provide
a tax exemption incentive for housing as follows:
HB 146 will give municipalities around the state the
option to provide an incentive to develop land for
housing and it does so by offering an exemption for up
to five years, a property tax increase that's
associated with subsidizing a piece of property, and
it would need to be three or more parcels. The
emphasis on this bill is it is optional for
municipalities to decide if this could be a tool to
help spur housing development.
MR. HARVEY specified the issues in Juneau as follows:
In our own community of Juneau, we've had issues with
limited housing availability and this issue was
brought to us first by the Juneau Affordable Housing
Commission. We had encouragement from the City and
Borough of Juneau Assembly and we know there are other
areas in the state that are interested in having a
local choice option like this.
Typically when a piece of property is subdivided, you
get permitted and a property tax will increase as soon
as all of the paperwork is filed. This statute would
allow, if adopted by a local community, to suspend
that additional increase in a property tax value while
the development was underway for up to five years.
There is flexibility in the statute to allow a
community to exempt all or a portion of the increase
in property tax value.
3:36:53 PM
MR. HARVEY summarized that the intent of the bill is to create
an incentive to develop properties to get housing on the market.
3:38:11 PM
At ease.
3:38:46 PM
SENATOR STEDMAN moved to adopt [Senate CS for CSHB 146, labeled
29-LS0048\H, as the working document.]
CHAIR BISHOP announced that without objection version H has been
adopted.
3:39:52 PM
EDRA MORLEDGE, Staff, Senator Kevin Meyer, Alaska State
Legislature, Juneau, Alaska, explained that the Senate CS for
CSHB 146 includes SB 87, a bill that was heard in the committee
the previous week. She detailed that the CS will do three things
as follows:
1. Fixes the omission of the word "not," which is a
technical change on page 2, line 27.
2. Allows the eight unit minimum to be either at the
time of application or at the time of the
completion of the project.
3. Allows multiple properties in one deteriorated
area of a municipality to be considered
collectively for that eight unit minimum.
3:41:06 PM
MERRILL SANFORD, Mayor, City and Borough of Juneau, Juneau,
Alaska, explained that the concept was brought up within the
past two years as a tax deferral and no one had shown interest.
He said local building and construction committees in addition
to the Juneau Affordable Housing [Commission] asked that the
incentive be a tax exemption. He specified that the bill gives
local community governments the option to adopt the exemption
and provide another tool to address housing shortages that
almost all communities face.
3:42:47 PM
NORTON GREGORY, Chair, Juneau Affordable Housing Commission
(JAHC), Juneau, Alaska, noted that he also serves on the
management team for the Tlingit-Haida Regional Housing
Authority, the largest provider of affordable housing in
Southeast Alaska. He stated that JAHC supports HB 146 because
there is a disincentive for property owners that own large
parcels to subdivide. He explained the disincentive under
current state statute to subdivide as follows:
With the current mill rate in Juneau, if somebody
subdivided their property, let's say un-subdivided for
that chunk of property, that tax would be $1,000 per
year; once they subdivide that property, the mill rate
changes and all of a sudden that same chunk of
property ends up being taxed at $12,000.
He said current state statute allows for property tax deferral,
but JAHC would like to see property tax abatement until there
has actually been an improvement made on the property that
ultimately generates a higher tax rate. He summarized that HB
146 is important for providing affordable housing and community
development.
3:44:23 PM
SHIRLEY MARQUARDT, Mayor, City of Unalaska, Unalaska, Alaska,
said HB 146 is good legislation. She remarked that landowners do
not have a very good incentive to subdivide their large pieces
of property due to higher value taxes. She said HB 146 will
provide Unalaska with a valuable tool that will bring immediate
help in bringing down the cost of building.
3:46:24 PM
CHUCK HOMAN, President, Alaska State Home Building Association
(ASHBA), Eagle River, Alaska, declared that ASHBA supports HB
146 as a way for municipal governments to have an option to
provide tax incentives to help in meeting their housing needs.
3:47:14 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), Juneau, Alaska, declared that AML supports HB 146 as an
opt-in tool to help municipalities develop land.
3:48:16 PM
DAVE HANNA, General Contractor, Juneau, Alaska, said HB 146 is
enabling legislation that is not mandatory. He asserted that
progressive communities will embrace HB 146. He remarked that
the current tax law is a disincentive and is horrible. He set
forth that a property owner's raw land for subdivision
development that is taxed $6,000 to $10,000 a year would be
taxed at $150,000 per year before a shovel full of dirt is
turned. He summarized that municipalities will collect more
taxes from bringing developed properties online.
3:50:30 PM
SENATOR STEDMAN asked what Juneau's high-low range was for
building rate values and its millage rate.
MR. HANNA answered that Juneau's millage rate was approximately
12. He explained that a non-waterfront building lot will range
from $100,000 to $125,000.
3:51:18 PM
RUSS MCDOUGAL, Member, Alaska State Homebuilders Association,
Juneau, Alaska, noted that he serves on the Juneau Affordable
Housing Commission (JAHC) as well. He remarked that Juneau needs
more housing. He noted that he presented to JAHC the need to
reintroduce tax incentive legislation and let the Alaska State
Home Builders sign-on as the sponsor through Representative
Munoz. He asserted that HB 146 is a win-win situation.
3:52:49 PM
CHAIR BISHOP closed public testimony and announced that HB 146
will be set aside.