Legislature(2023 - 2024)BARNES 124
03/12/2024 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB347 | |
| SJR13 | |
| HB12 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 13 | TELECONFERENCED | |
| *+ | HB 347 | TELECONFERENCED | |
| *+ | HB 12 | TELECONFERENCED | |
HB 347-PROPERTY ASSESSMENT
8:07:47 AM
CHAIR MCCORMICK announced that the first order of business would
be HOUSE BILL NO. 347, "An Act relating to assessment of
property, boards of equalization, and certification of
assessors; and providing for an effective date."
8:08:15 AM
REPRESENTATIVE JULIE COULOMBE, Alaska State Legislature, prime
sponsor, presented HB 347. She explained that in the original
version of the bill, the definition of "real and true value" was
inadvertently taken out. She added that the forthcoming
committee substitute (CS) would reinsert that definition.
8:09:03 AM
REPRESENTATIVE MEARS asked whether [the CS] is on par with the
companion bill in the Senate.
REPRESENTATIVE COULOMBE answered yes.
8:09:24 AM
REPRESENTATIVE HIMSCHOOT asked whether the bill sponsor had
reached out to the Alaska Association of Assessing Officers
(AAAO). She shared her belief that the bill would place a
burden on them.
REPRESENTATIVE COULOMBE asked Representative Himschoot to
clarify what burden she referred to.
8:10:23 AM
REPRESENTATIVE MCCABE moved to adopt the proposed committee
substitute (CS) for HB 347, Version 33-LS1430\B, Dunmire,
3/8/24, as the working document. There being no objection,
Version B was before the committee.
8:10:54 AM
REPRESENTATIVE COULOMBE paraphrased the sponsor statement for HB
347 [included in the committee packet], which read as follows
[original punctuation provided]:
Alaskans deserve transparency and fairness when it
comes to property taxes. HB 347 puts some baseline
requirements in place for Alaska municipalities, while
preserving the important principle of local control.
The bill has the State set baseline standards for
assessors to use so Alaskans know what the rules are
for figuring property values. It also lets
municipalities adopt their own by ordinance if state
or national standards don't fit.
It also changes the default for who hears tax appeals
to an appointed Board of Equalization instead of local
elected officials. It's important to keep those
separate because Alaskans can't talk freely about
problems with the assessment process with an elected
official who will later sit as a quasi-judge over
their appeal. Citizens shouldn't lose access to their
representatives when they disagree with city hall.
Because some municipalities may be unable to fill
appointed seats, the bill lets them opt out of this
change by passing an ordinance.
HB 347 stops a municipality from raising the assessed
value during an appeal process. Government's bite at
the apple comes when it sends you a notice of assessed
value. Raising that value when a citizen disagrees can
chill taxpayers from exercising their rights.
The bill also levels the playing field for citizens
with a recent appraisal in hand by requiring any Board
of Equalization that doesn't agree with a fee
appraisal to explain its findings on the record.
Finally, HB 347 ensures assessors have the experience
and credentials to do the job well.
8:13:43 AM
ELEILIA PRESLEY, Staff, Representative Julie Coulombe, Alaska
State Legislature, on behalf of Representative Coulombe, prime
sponsor of HB 347, presented the sectional analysis [included in
the committee packet], which read as follows [original
punctuation provided]:
Section 1: Requires local assessors to use published
standards. Default standards will be adopted by the
state, or a local governing body can adopt alternate
standards by ordinance.
Section 2: Requires the Department of Commerce,
Community, and Economic Development to adopt the
default assessment standardsbased on those published
by the International Association of Assessing
Officersby regulation.
Section 3: Requires a local assessor to have or be
supervised by someone who has a level 3 certification
from the Alaska Association of Assessing Officers.
Section 4: Says a local governing body must appoint a
Board of Equalization unless it adopts an ordinance to
set itself as the Board of Equalization.
Section 5: Prohibits local government from raising the
assessed value of the property during the appeals
process, unless requested by the appellant. Sec. 5
also requires a Board of Equalization to make specific
findings on the record if it disagrees with a fee
appraisal.
Section 6: Lets the Department of Commerce, Community,
and Economic Development adopt regulations setting the
default assessment standards.
Section 7: Sets an immediate effective date for the
department to put out regulations.
Section 8: Sets a January 1, 2025 effective date for
all other changes in the bill.
CHAIR MCCORMICK opened invited testimony.
8:15:44 AM
BRENDA JOSEPHSON, representing self, gave invited testimony
during the hearing on HB 347. She said she was passionate about
the need to codify assessment standards and best practices
because she had personally witnessed unjust actions that
occurred in Haines. Last year, the Haines Borough hired an
uncertified contract assessor who enacted a new hybrid
replacement cost new mass appraisal methodology, which ignored
actual market sales conditions by adding speculative costs for
replacing existing structures. The stated goal was to equalize
property values across large areas of the community. However,
the new replacement cost did not properly consider the specific
marketability of the parcels, nor did it give due weight to the
physical and functional obsolescence of the buildings, resulting
in excessive assessments. The approach resulted in what
appeared to be a regressive taxation scheme, she said, by
shifting a disproportionate burden of the tax to the lower and
middle value properties. She reported that over 200 appeals
were filed with the assessor's office, and many more went
unreported. The assessor refused to address the merits of many
appeals and property owners were faced with a confrontational
process, including unprofessional interactions, an unwillingness
to correct obvious errors, retaliatory increases, willful
misdescriptions, a lack of sufficient notice for hearing dates,
and failure to receive the assessor's staff reports, as required
by the borough's policy. She shared several examples of
wrongful conduct. She stated that HB 347 would establish needed
guardrails to bring trust to the assessment process and help
promote a transparent and professional approach by requiring
certification. Further, the bill would protect the ability to
redress the government by defaulting to an appointed Board of
Equalization and reduce the "chilling" effect of retaliatory
increases in assessments.
8:27:48 AM
REPRESENTATIVE MCCABE asked whether the assessor works for the
mayor.
MS. JOSEPHSON explained that the assessor was hired by the
administration and directly reported to the borough manager. In
response to a follow up question, she explained that there was a
community petition for the contract assessor's removal on the
basis that he was uncertified. The petition was signed by
nearly 600 people. Ultimately, she explained that his contract
was not renewed.
REPRESENTATIVE MCCABE asked what happened to the money that was
collected from the over-assessments.
MS. JOSEPHSON confirmed that the money was spent by the borough.
8:32:23 AM
REPRESENTATIVE HIMSCHOOT asked whether citizens appointed to the
Board of Equalization would be required to avoid talking about
the cases in the same way the assembly members were.
MS. JOSEPHSON agreed that at any quasi-judicial hearing, any
[board member] cannot have ex parte communication with
appellants.
REPRESENTATIVE HIMSCHOOT sought to confirm that if the board was
composed, at least partially, of regular citizens, the assembly
could then speak with them about these issues without violating
any confidentiality rules.
MS. JOSEPHSON said, "That is correct."
8:37:25 AM
JOE GELDHOF, representing self, gave invited testimony during
the hearing on HB 347. He stated that this is a statewide
problem driven by local governments deciding that they need more
money. He opined that the bill is grounded in fundamental
fairness and would eliminate potential for abuse. He explained
his support for allowing local governments to opt out because
not all municipalities need the full "belt and braces."
Nonetheless, he stressed that the standards in HB 347 should be
a floor. He described the three methods of assessing property:
sales comparison approach, income approach, and cost replacement
approach.
8:44:24 AM
DAVE HANNA, representing self, gave invited testimony during the
hearing on HB 347. He stated that there is no reason not to
pass the legislation because it would assign no cost to the
state and force the municipalities to do that which they claim
to already do. He shared his experience attending 70-80 Board
of Equalization meetings, characterizing many of those as
"horror stories." He pointed out that assessors are not
required to show their work or justify their assessments;
further that no assessor certification is required. He shared
several anecdotal examples of wrongful conduct.
8:52:07 AM
REPRESENTATIVE MCCABE recalled an instance in Juneau in which
the value of the property was being shared on public record to
allow the assessor to tax the property on the cost of the
property, versus its actual value.
MR. HANNA responded, "That's true." He discussed the disclosure
rules in Juneau and characterized them as a double-edged sword,
noting that they were eventually removed by an initiative.
Nonetheless, he pointed out that the sales data is easy to find.
REPRESENTATIVE HIMSCHOOT highlighted the assessor certification
on page 2 of the bill. She asked who would keep track of [the
certification requirements].
REPRESENTATIVE COULOMBE said did not anticipate a large increase
in workload.
8:56:37 AM
REPRESENTATIVE MCCABE asked how often property assessments are
required.
REPRESENTATIVE COULOMBE answered every five years.
REPRESENTATIVE MCCABE asked whether there would be a way to
encourage the borough to follow those guidelines or a way to
self-report.
CHAIR MCCORMICK shared her understanding that there are no
penalties at the local level. She pointed out that conducting
assessments on a regular basis is in the best interest of
municipalities to avoid under-assessments.
8:59:56 AM
SANDRA MOLLER, Director, Division of Community & Regional
Affairs, Department of Commerce, Community & Economic
Development (DCCED), stated that it's up to the municipality to
decide when to conduct assessments.
9:00:47 AM
REPRESENTATIVE RUFFRIDGE questioned the difference between
assessors and appraisers.
REPRESENTATIVE COULOMBE indicated that there are different
standards used by assessors versus appraisers.
CHAIR MCCORMICK sought closing remarks from the bill sponsor.
9:04:24 AM
REPRESENTATIVE COULOMBE concluded that the bill would help fix the
cracks in the system and retain local control.
CHAIR MCCORMICK announced that HB 347 would be held over.