Legislature(1993 - 1994)
02/08/1993 01:00 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 73: ANCSA STATE TAX EXEMPTIONS CHAIRMAN PORTER announced that the next item of business was a hearing on HB 73, relating to ANCSA (Alaska Native Claims Settlement Act) state tax exemptions. He noted that Rep. MacLean was not present, but her aide, Rena Bukovich, would address the committee on HB 73. Number 414 RENA BUKOVICH, LEGISLATIVE AIDE TO REP. EILEEN MACLEAN, PRIME SPONSOR OF HB 73, came forward to address the committee. She noted that Rep. MacLean was chairing a House Finance Committee meeting and could not attend the Judiciary Committee meeting. Ms. Bukovich said that HB 73 had been introduced primarily to bring state law into compliance with federal law regarding the exemption of ANCSA property from taxation. She noted that in 1987, federal law was changed to continue the property tax exemption from federal, state, or local taxation on ANCSA land until development occurred. MS. BUKOVICH mentioned that HB 73 reflected those changes in state law in order to avoid confusion in the application of the state's tax laws. In the drafting process, she added, the attorney noticed other sections of state law which needed to be updated and included those changes in HB 73. For the most part, she said, those changes were technical in nature. The bill did not expand or reduce any laws already mandated by federal government, she added, it merely cleaned up state law and ensured that obsolete statutes did not lead to misinterpretation by state assessors and others who worked with Alaska's tax laws. She noted that the bill had the support of the Alaska Federation of Natives. MS. BUKOVICH noted that HB 73 had a zero fiscal note. The same bill passed the House last year, she said, but died in the Senate Rules Committee. To her knowledge, there were no problems or concerns with the bill, as it was primarily a housekeeping measure. Number 440 CHAIRMAN PORTER thanked Ms. Bukovich for her testimony. Number 445 REP. GREEN asked if federal law would allow the state to help the Native community to improve its land, instead of giving tax breaks for unimproved land. Number 459 MS. BUKOVICH said that she could not address federal law questions, but noted that a representative from the Alaska Federation of Natives could probably answer Rep. Green's question. Number 469 REP. NORDLUND asked Ms. Bukovich what the exact changes in federal law were that required the introduction of HB 73. Number 468 MS. BUKOVICH again noted that she could not address questions of federal law. Number 473 CHAIRMAN PORTER asked JACK CHENOWETH, AN ATTORNEY FROM THE LEGISLATIVE AFFAIRS AGENCY, LEGAL SERVICES DIVISION, to address the committee. MR. CHENOWETH told the committee that he had drafted both the bill now before the committee and its predecessor. Number 476 REP. NORDLUND asked Mr. Chenoweth what changes in federal law had prompted introduction of HB 73. Number 480 MR. CHENOWETH noted that there were two principal changes, in the form of two federal laws passed since the Alaska Native Claims Settlement Act - the Alaska National Interest Lands Conservation Act and the 1987 ANCSA Amendments. The principal change that pertained to HB 73 is that regarding the handling of the taxable, or improved, property. Number 500 MR. CHENOWETH added that congress had removed some language from one section of ANCSA and reworked it in another section of the law. He stated that HB 73 reflected those changes in federal law. Another part of ANCSA which was changed dealt with who could receive property in the event of the death of a Native, and whether or not the exemption enjoyed by the original property owner carried over to the new owner. Most of the rest of HB 73, he noted, was an attempt to clean up cross references in the Alaska Statutes. Number 522 MR. CHENOWETH stated that he had tried to clean up the statutes so that this exercise would not be necessary every time congress made changes to ANCSA, through the use of the phrase "as amended" in the bill. Number 530 REP. PHILLIPS mentioned that this bill had passed the House unanimously the year before. She added that she was pleased to see the addition of the "as amended" phrases. Number 535 MR. CHENOWETH commented that HB 73 should ensure that the Alaska statutes automatically kept pace with changes in federal law. Number 542 CHAIRMAN PORTER asked if the federal laws which pertained to HB 73 resulted in a change in the general notion that these lands were not taxable until they were developed. Number 552 MR. CHENOWETH responded that there had been no material changes. He reiterated that in drafting the bill, he had simply updated the statutes to reflect changes in federal law. He further indicated that some changes were made when language was deleted from one section of ANCSA and reinserted into another section, but they were not significant changes. Number 568 CHAIRMAN PORTER asked if federal law had altered the provision by which regional corporation shares were inherited. Number 573 MR. CHENOWETH noted that there had been changes in the handling of shares. That change, he added, was reflected in HB 73 on page 3, lines 22-26. The federal law was changed to clarify who was eligible to receive shares. Number 596 CHAIRMAN PORTER asked if a non-Native could inherit regional corporation shares. Number 602 MR. CHENOWETH replied that the holder of ANCSA corporation shares could make those shares available to an adopted or a natural non-Native child. He said that the changes in federal law did not make it possible to sell corporation shares. Number 611 CHAIRMAN PORTER asked if any changes made by HB 73 did not reflect changes that had been made in federal law. Number 615 MR. CHENOWETH indicated that there was nothing in HB 73 which did not reflect changes in federal law. He commented that he had worked closely with the Alaska Federation of Natives in drafting the bill. Number 621 REP. GREEN said that at first glance, the bill appeared to be discriminatory in that Natives could have tax relief on unimproved property, whereas non-Natives holding the same property would have to pay taxes on it. He asked Mr. Chenoweth how the federal government had addressed the discriminatory nature of the law. He also asked about the state helping to develop this unimproved land, instead of granting tax relief to Native owners. Number 641 MR. CHENOWETH responded that Rep. Green's point about discrimination was well taken. However, he called Rep. Green's attention to the fact that congress held the exclusive right to handle relations with Indian tribes. Because of that exclusive relationship, he said, the state of Alaska had no choice but to follow suit. MR. CHENOWETH stated that some efforts had been made in the past to try to identify existing state programs and how they could assist rural Alaskans develop lands. He expressed an opinion that that was the state's principal means of encouraging development of Native lands. Number 670 CHAIRMAN PORTER thanked Mr. Chenoweth for addressing committee members' questions. He asked the committee how it wished to proceed. Number 674 REP. GREEN moved to pass HB 73 out of committee. Hearing no objections, CHAIRMAN PORTER approved the motion to pass HB 73 out of committee.