Legislature(2005 - 2006)CAPITOL 124
04/04/2006 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB299 | |
| HB390 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 299 | TELECONFERENCED | |
| *+ | HB 390 | TELECONFERENCED | |
HB 390-PROPERTY ASSESSMENT APPEAL FEE 8:43:24 AM CO-CHAIR THOMAS announced that the final order of business would be HOUSE BILL NO. 390, "An Act limiting the amount that a municipality may charge for an appeal of a residential real property tax assessment to the municipality's board of equalization." 8:43:45 AM REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, sponsor, explained that HB 390 limits the amount a municipality can charge for a board of equalization appeal. He reminded the committee that this was a proposed amendment to the real estate appraisers legislation last year. He characterized this legislation as a due process issue and related that he would prefer that there be no fee. Representative Stoltze noted that only a few communities have appeal fees. 8:46:06 AM REPRESENTATIVE KOTT asked if the state charges individual property owners an assessment fee for appealing his/her taxes. 8:46:20 AM STEVE VAN SANT, State Assessor, Department of Commerce, Community, & Economic Development (DCCED), specified that Anchorage, Kenai, and Ketchikan charge an assessment fee for appealing property taxes. With regard to whether the state charges such a fee, Mr. Van Sant explained that the state doesn't have a board of equalization, except for the state assessment and review board. The state assessment and review board hears appeals of oil and gas properties for which there is no charge. Mr. Van Sant said that the fees charged by the aforementioned communities are based on a sliding scale. In Ketchikan, the first appeal is free while $30-$100 is charged for multiples thereafter. In Anchorage, the fee is $30 for property assessed up to $100,000, $100 for property assessed between $100,000-$500,000, and it increases from there. He related his understanding that Kenai has a similar fee scale. Furthermore, in all cases, if a change is made by the board of equalization, the fee is refunded. 8:47:49 AM DENNIS FINEGAN related that Ketchikan was the first jurisdiction in Alaska to implement an appeals fee. He expressed the need to be sure that no one loses his/her appeal rights, which is why Ketchikan's ordinance was crafted to allow one parcel to be appealed without the $25 fee. Mr. Finegan opined that the appeal fee has provided credibility to the appeal process and has saved about three employee months in the appeal process. The fee that is collected is insignificant, he said. Mr. Finegan explained that the first step in the appeals process is review of the property and reviews not to the taxpayer's satisfaction can be appealed. He opined that if the legislation utilized language to the effect of "a fee of not more than $10 for the first appeal" would allow Ketchikan to not charge for the first appeal and continue to utilize the $25 fee for later appeals. The aforementioned would stem situations in which individuals with multiple properties appeal all of their properties, although they only have an issue with one property. 8:52:06 AM REPRESENTATIVE LEDOUX inquired as to whether those communities with the appeal fee have a waiver for those who can't afford it. MR. VAN SANT said that he wasn't sure and deferred to others on line. 8:53:01 AM CO-CHAIR THOMAS asked if any communities have a professional board of equalization. MR. VAN SANT specified that Anchorage, Fairbanks, Mat-Su, and Kenai have appointed boards that consist mainly of individuals who are familiar with property values along with city council members and assembly members. 8:53:51 AM SHANE HORAN, Assessor, Kenai Peninsula Borough, related that Kenai instituted an appeal filing fee in 2005 that mirrors that of Anchorage. According to Kenai's code, if the appeal results in a reduction from the original assessed value or if the appeal is withdrawn before evidence is due to the board of equalization, the filing fee is refunded. In fact, the appeal fee may be waived based on an individual's annual income. He opined that the filing fee has reduced the number of frivolous appeals and has helped the [assessor's] office become more efficient and effective with the appraisers in the field in order to ensure equity in all assessments. He reminded the committee that the burden of proving that the assessment is unequal, improper, excessive, or undervalued lies with the property owner. The fee provides the property owner more responsibility and ownership in the appeal process itself. Mr. Horan related his belief that because the fee is reimbursed to anyone winning the appeal or withdrawn due to the hardship waiver, reasonable accommodations have been made such that due process is afforded to those wishing to appeal. He informed the committee that Kenai, through ordinance, offers the opportunity for anyone receiving an assessment notice an informal meeting with the appraiser or assessor regarding his/her assessment. The aforementioned has been successful in resolving numerous appeals. In conclusion, Mr. Horan opined that the $10 fee proposed in HB 390 wouldn't be a sufficient deterrent to those frivolous appeals and may consume more resources than necessary. 8:57:11 AM REPRESENTATIVE NEUMAN commented that he takes exception to the notion that there are frivolous appeals because those who work in government are responsible to [the citizens in the area] in which they work. Furthermore, he questioned whether the work load increases commensurate to the sliding scale fee amounts. 8:58:01 AM REPRESENTATIVE KOTT inquired as to the number of appeals that Kenai receives annually. He further inquired as to how many of those the property owner wins on appeal. MR. HORAN answered that in the past the Kenai Peninsula Borough has had from 400-500 appeals, of which approximately 50-70 have moved on to the board of equalization. Of those before the board, approximately 50 percent attend the board hearing. He estimated that a small fraction of that 50 percent win the appeal. 9:00:02 AM CO-CHAIR THOMAS related his understanding that HB 390 only applies to residential property owners. REPRESENTATIVE STOLTZE replied yes. 9:00:21 AM KATHIE WASSERMAN, Alaska Municipal League, opined that HB 390 impinges on local control. She commented that she finds it ironic that it's acceptable for Kenai to fund over and above the senior citizens tax exemption, but that it's not acceptable for it to charge a bit more for property tax appeals. Kenai, like all other communities, needs to find ways to continue to operate its government. Ms. Wasserman related that prior to the implementation of the fee in Anchorage there were an estimated 2,000-3,000 [appeals] a year, which has decreased to 600-700 since the implementation of the fee. If appealing one's property tax is important to the property owner, she surmised that he/she would find the funds to pay for it. She highlighted that the local governments can fairly set the fees. 9:01:53 AM MR. VAN SANT related that Marty McGee, Anchorage Assessor, had e-mailed him with the following information. Anchorage, prior to the institution of the fee, had approximately 2,500 appeals per year of which 1,300 were addressed administratively and less than 2 percent of the appeals were changed. The cost per appeal was about $725, including the assessor's time and the board's costs. Mr. Van Sant further related that with the commercial property appeals sometimes the municipality will have to hire experts, which increases the cost of appeals. Mr. Van Sant clarified that he wasn't advocating one way or another on this matter. 9:03:08 AM CO-CHAIR THOMAS closed public testimony. 9:03:20 AM REPRESENTATIVE KOTT characterized HB 390 as a worthy idea. However, he said that he doesn't like to enter into issues of local control, but he also didn't want to prohibit/prevent those who want to appeal. He further said he didn't believe it to be the purview of this committee to determine whether $10 is the correct amount for the appeal fee. 9:04:48 AM CO-CHAIR OLSON inquired as to whether the sponsor would accept a friendly amendment exempting political subdivisions with populations of 30,000 or less. REPRESENTATIVE STOLTZE indicated that he would accept such an amendment. CO-CHAIR THOMAS expressed concern with regard to accelerated rates and senior citizens who may not come forward. 9:06:41 AM REPRESENTATIVE LEDOUX suggested that a $1,000 fee would probably be related to commercial property because she didn't believe there would be many properties in Alaska that are assessed at the $2 million level. CO-CHAIR THOMAS said that Anchorage might have $2 million homes. He noted that Fairbanks had its first home that was assessed at over $1 million last year. REPRESENTATIVE CISSNA opined that in Anchorage if the appeals process is made too easy, there are enough homes to slow municipal government. She related that she views it as a local issue that should be left at the local level. 9:08:40 AM REPRESENTATIVE STOLTZE informed the committee that he introduced HB 390 because many believe that the process is rigged. He indicated agreement with Representative Kott that residential homeowners should be treated with the same standards as large corporate taxpayers on their oil production property for which there isn't an appeal fee. He emphasized that the burden is on the property owner and it's a fairly tough case to win. He then noted his disappointment that the city of Anchorage didn't provide it's own testimony today. 9:11:58 AM CO-CHAIR OLSON moved Amendment 1, which would exempt political subdivisions with populations under 30,000. There being no objection, Amendment 1 was adopted. 9:12:26 AM CO-CHAIR OLSON moved to report HB 390, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE CISSNA objected. A roll call vote was taken. Representatives LeDoux, Salmon, Kott, Olson, and Thomas voted in favor of reporting HB 390, as amended, from committee. Representative Cissna voted against it. Therefore, CSHB 390(CRA) was reported out of the House Community and Regional Affairs Standing Committee by a vote of 5-1.
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