03/14/2012 01:30 PM House FINANCE

HOUSE BILL NO. 170                                                                                                            
                                                                                                                                
     "An Act  relating to municipal property  tax exemptions                                                                    
     on residences  of certain volunteer  emergency services                                                                    
     personnel  and the  widows  and  widowers of  volunteer                                                                    
     emergency  services  personnel;  and providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
1:45:57 PM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough  MOVED  to ADOPT  proposed  committee                                                                    
substitute  for HB  170,  Work  Draft 27-LS0562\T  (Bullard,                                                                    
3/12/12). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
MICHAEL   PASCHALL,   STAFF,  REPRESENTATIVE   ERIC   FEIGE,                                                                    
disclosed  the Representative  Feige  was the  Chief of  the                                                                    
Chickaloon  Fire  Department,  and  that  Mr.  Paschall  was                                                                    
Assistant  Chief of  the Rural  Deltana Fire  Department. He                                                                    
discussed  HB   170.  He  stated  that   the  bill  provided                                                                    
incentives  for  recruitment   and  retention  of  volunteer                                                                    
firefighters and emergency services volunteers.                                                                                 
                                                                                                                                
Co-Chair  Stoltze   asked  Mr.   Paschall  to   discuss  his                                                                    
interaction with Representative Wilson.                                                                                         
                                                                                                                                
Mr.  Paschall  explained  that there  were  two  significant                                                                    
issues that were addressed in  the last hearing on the bill.                                                                    
He  looked  at  page  1,  lines 12  and  13.  There  was  an                                                                    
exemption added  for taxes for  service areas. Also,  it was                                                                    
unclear whether or  not the exemption, if it  was enacted by                                                                    
a municipality, could be for  less than $150,000. Therefore,                                                                    
the language "up to $150,000" was added.                                                                                        
                                                                                                                                
Co-Chair  Stoltze  noted  there  had  been  questions  about                                                                    
policy,   but  that   significant   technical  issues   were                                                                    
addressed in the work draft.                                                                                                    
                                                                                                                                
Representative Gara wondered where  the municipal option was                                                                    
located in the  work draft. Mr. Paschall pointed  to page 1,                                                                    
line 12, "may by ordinance be exempted."                                                                                        
                                                                                                                                
1:49:10 PM                                                                                                                    
                                                                                                                                
Representative  Gara wondered  why  the municipalities  were                                                                    
not given  the opportunity grant exemptions  to firefighters                                                                    
who  were not  volunteers. Mr.  Paschall responded  that the                                                                    
purpose of the  bill was to provide an  incentive that might                                                                    
entice someone to become  a volunteer firefighter, emergency                                                                    
services worker,  or to retain  an individual in  either one                                                                    
of those positions.                                                                                                             
                                                                                                                                
Representative Gara  wondered whether  there was  a shortage                                                                    
of  volunteer firefighters.  Mr. Paschall  responded in  the                                                                    
affirmative.  He elaborated  that almost  any fire  chief in                                                                    
the state would agree with him.  He stated that there may be                                                                    
situations and locations  where there was not  a shortage of                                                                    
volunteer  emergency  workers.  He   pointed  out  that  his                                                                    
department's volunteer membership was  at the highest it had                                                                    
ever  been, but  when  his department  responds  to a  large                                                                    
fire, they were short-handed.                                                                                                   
                                                                                                                                
Representative Gara felt that  municipalities should also be                                                                    
given the opportunity to  incentivize paid firefighters. Mr.                                                                    
Paschall  replied that  the  intention of  the  bill was  to                                                                    
recruit volunteer  firefighters, and  did not object  to the                                                                    
option of  including paid firefighters. Although,  many paid                                                                    
departments  utilized a  recall  system in  order to  recall                                                                    
paid firefighters in the event of a large fire.                                                                                 
                                                                                                                                
1:53:53 PM                                                                                                                    
                                                                                                                                
Vice-chair Fairclough noted that she  had two sons that were                                                                    
volunteer firefighters. She queried  the estimated number of                                                                    
volunteer firefighters in the  state. Mr. Paschall responded                                                                    
that  the  total number  of  volunteer  firefighters in  the                                                                    
state was 4,000, which  included volunteer emergency medical                                                                    
services  (EMS)   providers  that   were  part  of   a  fire                                                                    
department. He stressed that the  records that were kept for                                                                    
the  fire departments  included EMS  volunteers. There  were                                                                    
approximately  250   fire  departments,  and  78   of  those                                                                    
departments  were in  municipalities  that  levy a  property                                                                    
tax.                                                                                                                            
                                                                                                                                
Vice-chair  Fairclough asked  how many  departments were  in                                                                    
the municipalities.  Mr. Paschall  answered that  there were                                                                    
78 municipal departments.                                                                                                       
                                                                                                                                
Vice-chair  Fairclough  queried  the   cost  that  would  be                                                                    
subtracted  from the  tax rolls.  Mr. Paschall  replied that                                                                    
that information was not calculated  for every department in                                                                    
the  state,  because  of  the   time  associated  with  that                                                                    
research. He stated that  Legislative Research was contacted                                                                    
for some information. However, the  process to determine the                                                                    
cost subtracted  from the tax rolls  would require examining                                                                    
membership of  each department and then  digging through the                                                                    
tax rolls  for each municipality for  every individual. Even                                                                    
with that  kind of  research, the  accuracy was  not trusted                                                                    
because of  the name  that the  property ownership  is often                                                                    
listed under  is often a  spouse or other family  member. He                                                                    
stated  that there  was  an analysis  run  in Girdwood,  and                                                                    
offered to provide that information.                                                                                            
                                                                                                                                
1:56:50 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:59:43 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-chair  Fairclough queried  the tax  consequence of  the                                                                    
bill. She  remarked that many  middle class and  middle aged                                                                    
people  were  caught  in  the  "crossfire"  related  to  tax                                                                    
exemptions, because  that set of  people were often  dealt a                                                                    
new  tax burden  of  tax exemptions.  She  pointed out  that                                                                    
300,000 people  in Anchorage may  pick up the tax  burden of                                                                    
this proposed property tax exemption.  She agreed that there                                                                    
needed to be  more volunteer firefighters in  the state, but                                                                    
remarked  that  the  tax  burden  placed  on  municipalities                                                                    
seemed heavy.                                                                                                                   
                                                                                                                                
Representative  Neuman   looked  at  page  3,   line  8.  He                                                                    
expressed  concern   regarding  the  payment  of   the  fire                                                                    
response  pertaining to  a  fire that  may  take place  over                                                                    
multiple   municipalities  or   boroughs.  He   specifically                                                                    
wondered if  the cost would  be covered by  the municipality                                                                    
at  a  local controlled  level.  Mr.  Paschall asked  for  a                                                                    
restating of Representative Neuman's question.                                                                                  
                                                                                                                                
Co-Chair Stoltze clarified that  the question was related to                                                                    
where the  fire would  be assessed:  the fire  service area,                                                                    
the road service area, or the general taxation.                                                                                 
                                                                                                                                
Mr. Paschall responded  that the assessment would  be on the                                                                    
general taxation of the municipality.                                                                                           
                                                                                                                                
Co-Chair Stoltze  remarked that a municipality  could, if it                                                                    
had a fire  service area, make it a policy  that a volunteer                                                                    
firefighter not be assessed up  to $20,000 of the evaluation                                                                    
of the fire service cost.                                                                                                       
                                                                                                                                
2:06:32 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  communicated  that Fairbanks  had  a                                                                    
$10,000   exemption   for   volunteer   firefighters.   That                                                                    
definition of  "volunteer firefighter"  was provided  by the                                                                    
department  fire chief.  The fire  chief that  she spoke  to                                                                    
expressed discomfort,  because he was made  to determine the                                                                    
difference between a "true  volunteer" and "just volunteer."                                                                    
Mr. Paschall  responded that one  standard across  the state                                                                    
might make  it more  difficult for rural  areas to  meet the                                                                    
same standards as urban areas.                                                                                                  
                                                                                                                                
Representative Gara  surmised, from  Representative Wilson's                                                                    
comments, that there must be  an allowance in state law that                                                                    
already  granted  an exemption.  He  wondered  how the  bill                                                                    
changed the current law.                                                                                                        
                                                                                                                                
Vice-chair  Fairclough  read  from state  statute  18.15.250                                                                    
"volunteer means that  a person is an active  volunteer of a                                                                    
first  responder service,  a  rescue  service, an  ambulance                                                                    
service  of  a  fire   department  that  provides  emergency                                                                    
medical or  rescue services  as part  of its  duties." There                                                                    
was  no  time  requirement or  additional  requirement;  the                                                                    
person only had to be an active member.                                                                                         
                                                                                                                                
Mr.  Paschall responded  to a  question from  Representative                                                                    
Gara.  He  stated  that  there  was  a  provision  to  allow                                                                    
municipalities to  exempt property tax up  to either $10,000                                                                    
or $20,000 under certain broad criteria.                                                                                        
                                                                                                                                
2:10:20 PM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough   remarked  that  the   proposal  was                                                                    
"stackable" on other exemptions.                                                                                                
                                                                                                                                
Representative Doogan  felt that  the problem with  the bill                                                                    
was the  disallowance of inclusion of  paid firefighters. He                                                                    
remarked  that  once  certain people  were  given  financial                                                                    
exemptions, the  question was skewed regarding  who would be                                                                    
considered  "volunteer." He  stressed that  once one  person                                                                    
applied for the exemption; everyone  would want to apply for                                                                    
the  exemption. He  felt that  a determination  of the  full                                                                    
cost of  the proposal should  be made. He  was uncomfortable                                                                    
with the bill as it was currently written.                                                                                      
                                                                                                                                
Co-Chair  Stoltze   did  not  believe  the   cost  could  be                                                                    
determined, because of the unknown  pertaining to options of                                                                    
the local governments.                                                                                                          
                                                                                                                                
Representative Wilson moved to amend  the bill, page 1, line                                                                    
13 insert the word "road" before the words "service areas."                                                                     
                                                                                                                                
Co-Chair  Stoltze OBJECTED  for the  purpose discussion.  He                                                                    
explained that there were some  areas in the state that were                                                                    
considered unified road service areas.                                                                                          
                                                                                                                                
Co-chair  Stoltze  removed  his objection.  There  being  NO                                                                    
further OBJECTION,  it was so ordered.  Conceptual amendment                                                                    
1 was ADOPTED.                                                                                                                  
                                                                                                                                
Co-Chair Thomas  told a  personal story.  He stated  that he                                                                    
spent four years on the borough  assembly at a time when the                                                                    
state  was  not paying  the  unfunded  mandate. The  borough                                                                    
assemble  sued  the State  of  Alaska  for not  funding  the                                                                    
mandate.  He furthered  that during  his first  year in  the                                                                    
legislature,   he  proposed   a   bill   that  allowed   the                                                                    
municipalities to opt  out in five years. He  liked the idea                                                                    
of  exempting  volunteers.  He wondered  if  the  volunteers                                                                    
received  any  workers  compensation if  they  were  injured                                                                    
during an emergency response.                                                                                                   
                                                                                                                                
2:17:31 PM                                                                                                                    
                                                                                                                                
Mr. Paschall  explained that workman's compensation  in most                                                                    
cases was provided by the volunteer departments.                                                                                
                                                                                                                                
Co-Chair  Thomas had  spoken to  people  from Unalaska,  who                                                                    
expressed concern regarding the tax burden placed on them.                                                                      
                                                                                                                                
Representative Neuman  discussed complaints related  to lack                                                                    
of insurance.  He hoped that  the bill included  the ability                                                                    
for local  control related to  how benefits  were dispersed.                                                                    
He  believed that  the term  "volunteer" was  too broad.  He                                                                    
supported  the legislation,  but  hoped  for some  expansion                                                                    
regarding insurance and how a volunteer was defined.                                                                            
                                                                                                                                
Vice-chair Fairclough clarified that one  of her boys was in                                                                    
college  and one  was a  volunteer firefighter.  She pointed                                                                    
out  that volunteers  were currently  part  of the  training                                                                    
ground  for joining  the  firefighter's  union setting.  She                                                                    
wondered  if  there would  be  less  benefit by  becoming  a                                                                    
unionized firefighter.                                                                                                          
                                                                                                                                
Co-Chair  Stoltze  WITHDREW  objection to.  There  being  NO                                                                    
further  OBJECTION, Work  Draft 27-LS0562\T  was ADOPTED  as                                                                    
amended.                                                                                                                        
                                                                                                                                
Co-Chair  Stoltze discussed  the zero  fiscal note  from the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
Co-Chair  Thomas  MOVED  to  report  CSHB  170(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  170(FIN)  was  REPORTED  out  of  committee  with  "no                                                                    
recommendation" and with a new  zero impact fiscal note from                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
2:24:03 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:26:38 PM                                                                                                                    
RECONVENED