Legislature(2011 - 2012)BARNES 124
02/09/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB184 | |
| HB305 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 184 | TELECONFERENCED | |
| *+ | HB 305 | TELECONFERENCED | |
HB 305-MUNI. PROP.TAX EXEMPTION: RELIGIOUS ORGS.
8:37:19 AM
CHAIR MUNOZ announced that the next order of business would be
HOUSE BILL NO. 305, "An Act relating to a mandatory exemption
for certain residences owned by a religious organization."
8:37:29 AM
REPRESENTATIVE GARDNER, speaking as the sponsor, explained that
HB 305 seeks to correct an error made in 2006 and return to a
property tax system in which all property taxpayers are treated
equally. The legislation removes the property tax exemptions
for teachers of private religious and parochial schools that
live in church-owned housing. The legislation returns to the
pre-2006 language describing a "minister" living in church
property that is tax exempt. In 2006, the legislature passed
House Bill 334, which broadened the definition of "religious
property" by adding a mandatory exemption for the residence of
an educator in a private religious or parochial school.
Furthermore, House Bill 334 expanded the definition of
"minister" to include "those individuals ordained, commissioned,
or licensed as a minister according to the standards of the
religious organization for its ministers". House Bill 334 also
required that the ministers be employed by the religious
organization to carry out the ministry of that organization.
Representative Gardner specified that the problem with mandatory
tax exemption reductions, such as those for senior citizens and
veterans, is that they enjoy broad public support, although they
are unfunded mandates. However, the 2006 legislation was
controversial with the public because it gave special treatment
to some individuals, religious educators, and was perceived as
unfair to other educators and all other taxpayers. The
definition of "minister" in [House Bill 334] was expanded such
that it was difficult for municipal tax officials to know who
qualifies. In conclusion, Representative Gardner reiterated
that the existing law is an unfunded mandate borne by all
taxpayers.
8:39:56 AM
REPRESENTATIVE LINDSEY HOLMES, Alaska State Legislature,
speaking as a co-sponsor of HB 305, explained that HB 305
eliminates the religious teacher housing as well as the 2006
definition of "minister" that allowed [religious] organizations
to define "minister." The legislation before the committee
today, HB 305, returns the definition of "minister" to what it
was prior to 2006 and removes the requirement that the minister
be employed by the church as a religious leader. Representative
Holmes pointed out that the basis for this discussion can be
found in Article 9, Section 4 of the Alaska State Constitution,
which identifies "properties that are used exclusively for
nonprofit religious purposes as being exempt from taxation, as
defined by law". The language "as defined by law" is what the
legislature specifies. The proposed legislation doesn't change
or undermine the long-standing support for tax exemptions for
homes of religious leaders, such as those residences of a
bishop, pastor, rabbi, priest, minister, or religious order of a
recognized religious organization. The proposed legislation, HB
305, maintains the exemption regarding other religious property
tax exemptions, such as exemptions for churches, synagogues,
religious educational facilities, and other property that is
used exclusively for religious purposes. Representative Holmes
related that Legislative Research was only able to locate five
properties in Anchorage and five properties in Kenai that
specifically used the religious educator exemption. Legislative
Research didn't have numbers, but estimated that [the
exemptions] amount to about $25,000 a year. Although it isn't a
lot of money, the issue is fairness to other taxpayers who are
required to "pick up the slack." Furthermore, by making it a
mandatory exemption [in House Bill 334], the legislature passed
on an unfunded mandate to communities.
8:44:03 AM
REPRESENTATIVE GARDNER informed the committee that HB 305 has
generated waves of public support since the Anchorage Daily News
article. She noted that the committee packet contains about 80
emails in support of HB 305 and the Anchorage Daily News article
generated, on last count, about 300 comments of which 98 percent
were in support of changing the law as proposed by HB 305. In
conclusion, HB 305 rights a wrong enacted in 2006 without
interfering with the broad support for tax exemptions for homes
of religious officials and it's a measure to restore public
trust in the legislative process by eliminating special
treatment.
8:46:52 AM
DEBBIE OSSIANDER, Member, Anchorage Assembly, Municipality of
Anchorage, began by informing the committee that she has been
active in local government in Anchorage for about 20 years. She
related that in the last three years serving on the Anchorage
Assembly she has spent much of her time explaining mill levies
and property assessments. Anchorage has attempted to diversify
its tax base so it's not so heavily on local property taxpayers
but rather is spread throughout the community. Moreover,
Anchorage has tried to ensure openness and explain to citizens
how their taxes are collected fairly and equitably. The
[Anchorage Assembly] has created a process by which residents
can appeal their taxes for free and has established a citizen
board that talks to those in the community regarding taxes and
appeals. Often, [the Anchorage Assembly] has to say no to good
and worthwhile efforts in order to avoid harming those in the
community who are struggling to pay the taxes they have now.
Ms. Ossiander encouraged the committee to be as clear and
concise as it can with the language it uses. She related her
personal belief that it's appropriate to give tax exemptions to
churches and to nonprofits, but it's critical for everyone to be
able to understand the language and its meaning.
8:50:26 AM
REPRESENTATIVE CISSNA highlighted that the money the
municipalities have don't spread as far as desired. She
informed the committee that she has qualified for the senior
property tax exemption the last four years, but has chosen not
to take the exemption. She opined that when one has the
ability to pay the tax it's the honorable and responsible thing
to do. This legislation fixes what she felt was unfair.
8:52:58 AM
CHAIR MUNOZ inquired as to the mill rate in Anchorage.
MS. OSSIANDER answered that it depends upon where one lives.
Anchorage is divided into districts and residents pay for
services depending upon where they live in a district. In
further response to Chair Munoz, Ms. Ossiander said she didn't
know the mill rate for the area that would be impacted by HB 305
or the financial impact to the municipality.
REPRESENTATIVE GARDNER interjected that since the properties
[now receiving the exemption] haven't been assessed in many
years, there's no way to know exactly. However, the estimate is
about $15,000 to Anchorage and $9,000 to Kenai. Although it's a
relatively small financial impact, the existence "poisons the
well" for everyone and creates a tremendous amount of
resentment.
8:54:55 AM
CHAIR MUNOZ requested that the state assessor speak to the law
as it relates to 501(c)(3) organizations and the status of
municipalities granting exemptions to those organizations. She
asked if the state law offers the opportunity for exemptions for
501(c)(3) organizations.
8:55:05 AM
STEVE VAN SANT, State Assessor, Division Programs, Division of
Community and Regional Affairs, clarified that there is a
charitable exemption, the criteria for which is that the
organization has to be a nonprofit which is typically a
501(c)(3), 501(c)(8), or 501(c)(9). In further response to
Chair Munoz, Mr. Van Sant confirmed that typically churches are
501(c)(3) nonprofits. The charitable exemption that is found
under AS 29.45.030 is mandatory.
8:56:06 AM
CHAIR MUNOZ questioned then whether the organization in question
could still receive the exemption under the aforementioned
charitable exemption, if this is repealed.
MR. VAN SANT stated that teacher housing probably wouldn't
qualify for a charitable exemption, which is why it was placed
under the religious exemptions statute.
8:57:10 AM
REPRESENTATIVE GARDNER informed the committee that SB 183
proposes to provide a property tax exemption for the primary
residence of a widow/widower of a person killed in military
service. The language used by SB 183 to grant the exemption, "A
municipality may by ordinance approved by the voters", seems
more reasonable. Representative Gardner said that although she
considered doing something similar for the teacher exemption,
she felt it didn't get to the "heart of the matter."
Furthermore, she said she didn't believe it would have the
support of voters in Anchorage.
8:58:13 AM
REPRESENTATIVE SADDLER asked if although the sponsor didn't hold
a press conference regarding the introduction of HB 305, she
referenced it in her newsletter.
REPRESENTATIVE GARDNER replied yes.
REPRESENTATIVE HOLMES informed the committee that she, too,
referenced HB 305 in her newsletter.
REPRESENTATIVE SADDLER expressed concern about some of the
rhetoric surrounding this legislation, adding that he even found
some of it offensive. He opined that it's possible to disagree
on issues without being disagreeable and thus he expressed hope
that the discussion could be maintained at a high level. He
noted that he has concerns and has heard concerns about the
property tax exemption from his city council member in
Anchorage.
REPRESENTATIVE HOLMES offered to share her newsletter. She
stressed that it wasn't a tactic or intention of the sponsor to
[elicit such rhetoric]. Furthermore, the legislation isn't
targeted at any particular entity, rather it's targeted at what
is perceived as a largely unpopular measure by the public. The
legislation, she related, is not intended to be partisan in any
way. There are many in the community that believe their
property taxes are increasing while other entities are being
given exemptions; because this was a mandatory exemption, the
legislation is aimed at that. Representative Holmes agreed with
Representative Saddler and said that she didn't want the issue
to turn into firestorm; however, she reminded the committee that
letters are received from a broad variety of people and they say
what they say.
REPRESENTATIVE GARDNER told the committee that when she
initially embarked on this, she had no idea how many properties
and exemptions were being claimed under the statute. As it
turned out, all the exemptions were affiliated with one church.
She acknowledged that when that information came to light, she
realized that it would look as if she was targeting one entity.
However, that was not the intention. In fact, she recalled that
in 2006 when the original legislation was enacted, it was
anticipated that other schools would avail themselves of the
exemption.
REPRESENTATIVE SADDLER, speaking to the public, expressed the
importance of maintaining civility on issues like this.
REPRESENTATIVE GARDNER stated her agreement.
9:02:55 AM
REPRESENTATIVE DICK related his appreciation for the focus on
fairness. He posed a scenario in which [private school]
teachers were made to pay more property taxes. In such a
situation, he opined that many private school teachers would
have to be paid more since they are often paid less than public
school teachers. In order for the schools to pay the teachers
more, the parents of the students in the private schools would
have to pay more. He then told the committee that his
grandchildren attend the Christian school in Kenai. The parents
of his grandchildren had to pay for school twice because they
had to pay property taxes and pay for the cost of the school.
He related that his daughter paid $4,500 a year for the
education of his grandson, whereas public schools pay $15,000-
$20,000 per student. In terms of fairness, he questioned
whether parents of students in private school should have to pay
property tax for schools their children don't attend and pay for
private school.
REPRESENTATIVE DICK then related his understanding that the
separation of church and state ensures that the state won't
dictate how churches operate. However, that separation of
church and state has been construed to prohibit any discussion
of church in school or at any given state function. Therefore,
many have separated themselves from the public system. He
opined that if one person's belief system is called religion, it
has no place in state-funded operations whereas a belief system
referred to as a philosophy can be endorsed. By default, he
stressed that the religion of the public schools is secular
humanistic atheism because nothing religious can be named in
public schools. The aforementioned, he suggested, is why many
choose not to send their children to public schools.
Representative Dick then related that his granddaughter attended
Alaska Christian College where most of the teachers she had
weren't paid by the college. Those teachers travel to the Lower
48 in the summer to obtain enough funds to teach at the Alaska
Christian College for free. He opined that Alaska Christian
College is doing a fantastic service on a shoe string. He
further opined that if teachers at Alaska Christian College had
to pay property taxes, they would have to solicit more funds to
be able to continue to teach at the college. In closing,
Representative Dick opined that the issue is one of fairness.
9:07:34 AM
REPRESENTATIVE CISSNA opined that HB 305 actually specifies to
communities what is in state law and provides boundaries. With
regard to unfunded mandates, allowing communities to decide what
they will and will not do seems to be appropriate, she further
opined. She expressed the need to keep to the law of the state
and leave campaigning out of the conversation.
9:09:19 AM
REPRESENTATIVE GARDNER stated she knows, for a fact, there are
many deeply religious teachers in public schools who represent a
wide variety of faiths and who would be offended by the
characterization that [the religion of] public schools is
[secular humanistic atheism]. Representative Gardner then
clarified that she is not hostile to religious schools. In
fact, her son attended a Catholic college and she began her
academic career in a Catholic school and three years of high
school in an Anglican school that was founded by the Orphaned
Daughters of the English Clergy. She opined that she had
wonderful experiences and education in those schools, but her
parents weren't asking other taxpayers to subsidize their choice
to place her in a religious school. Representative Gardner
emphasized that it is appropriate for people to choose whatever
type of education they believe is appropriate for their children
and she supports that. However, she said she didn't believe
it's appropriate for all the taxpayers in a community to
subsidize that parental choice, which is what a mandatory
exemption for teaching housing does.
9:11:26 AM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League,
informed the committee that the Alaska Municipal League (AML)
has always opposed mandatory property tax exemptions. As a
rule, AML doesn't believe the state, which doesn't have any
taxing authority, should mandate what property tax exemptions
should be given by the municipalities. When the existing
exemption passed in 2006, it seemed to open the door to more
[property tax exemptions]. More exemptions place more of a
burden on less people. Therefore, AML is in opposition to
mandatory property tax exemptions and is in strong support of HB
305.
9:13:00 AM
CHAIR MUNOZ announced that public testimony would remain open
and HB 305 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB305 2006 statutes.pdf |
HCRA 2/9/2012 8:00:00 AM |
HB 305 |
| HB305 Leg research memo.pdf |
HCRA 2/9/2012 8:00:00 AM |
HB 305 |
| HB305 Sponsor Statement.pdf |
HCRA 2/9/2012 8:00:00 AM |
HB 305 |
| HB305-Public comments sent to Rep Gardner.pdf |
HCRA 2/9/2012 8:00:00 AM |
HB 305 |
| HB305 Support-Repasky.msg |
HCRA 2/9/2012 8:00:00 AM |
HB 305 |