Legislature(2001 - 2002)
03/28/2001 01:37 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 118-SR CIT./DISABLED VET. PROP TAX EXEMPTION Lori Backes, staff to Representative Whittaker introduced the bill and explained that HB 118 allows municipalities to establish, by their own ordinance, methods for accepting applications for the senior citizen, disabled veterans, and widows and widowers property tax exemption. Under current state law, these citizens must file yearly for this exemption and Representative Whittaker thought it was best that communities establish their own procedures for accepting these applications. For example, he thought it was unfair that seniors had to apply yearly for the exemption when the general residential property tax exemption could be made on a one time basis. SENATOR PHILLIPS asked if he was correct that, at the local option, a senior citizen would have to file just once for a property tax exemption. MS. BACKES said that is correct if that is the choice of the municipality. SENATOR PHILLIPS asked how the municipality would check to see whether the seniors had moved and their non-senior children were now occupying the house. MS. BACKES said that would be addressed the same way that municipalities currently address that situation; the house would no longer qualify for the exemption. SENATOR PHILLIPS thought he was missing some point; registering for the exemption just once could invite fraud. MS. BACKES said that municipalities could set their own methods for checking that the exemptions were allowable. One suggestion is that a reminder or question card could be sent on a yearly basis asking whether the individual still lives at the same location. If the card isn't sent back, that residence should be checked. SENATOR PHILLIPS thought that people would cheat. CHAIRMAN TORGERSON asked Steve Van Sant to address Senator Phillips' concerns. STEVE VAN SANT, local assessor for the Department of Community and Economic Development, responded that they have this problem now. There is a small percentage of senior citizens throughout the state who sign that they live at a particular residence when they really don't live there. There is a safeguard that the local municipality can put in whereby certain requirements must be met and the assessors expect that those procedures would be written in so that they would be able to check if there was a question. There is no perfect solution, however. SENATOR PHILLIPS asked whether it would be mandatory to include procedures for checking or not. MR. VAN SANT said the bill says, "…shall by ordinance establish procedures." Within those procedures each municipality has latitude. SENATOR PHILLIPS said this is non-mandatory. MR. VAN SANT agreed. CHAIRMAN TORGERSON asked whether assessors generally support the bill. MR. VAN SANT said they do generally but the one concern they have is on page 1, line 14 where "for that year" is removed. If an individual asks for an exemption to be retroactive for several years there would be no way for the assessor to go back and check whether they met criteria for the exemption. CHAIRMAN TORGERSON asked for confirmation that removing "for that year" might make this retroactive. MR. VAN SANT said he believed it would. To this point, that language has been used to mean that the governing body may only waive an application late file for that year only. It cannot be retroactive. MS. BACKES responded that it hinges upon the word "may" in line 13. "The governing body of the municipality for good cause shown may waive…" It would be a borough or municipal assembly decision to waive the application or not waive it. This allows the applicant the opportunity to appeal the decision. Without the change in language, local municipalities can only address that type of situation during that current application year. SENATOR LINCOLN spoke about a woman from Fairbanks who was ill and didn't realize that she had to request a waiver. The borough said its hands were tied because they weren't allowed to waive that year or prior years. MS. BACKES was familiar with the case and said that she wasn't ill but illiterate and didn't know that she had to file more than once. By the time the borough noticed the problem, she was many years in arrears and her property was foreclosed upon. The borough said that state statute would not allow them to go back and look at extenuating circumstances. SENATOR LINCOLN said that she would leave the language out due to cases such as that. The local government should be able to make those decisions. CHAIRMAN TORGERSON asked if the money being discussed was local with no State treasury affect. MR. VAN SANT said that was correct, the legislature "hasn't funded this since 1996." CHAIRMAN TORGERSON said he knew that, he just wanted it on the record. There were no other questions or individuals giving testimony. He asked for the will of the committee. SENATOR AUSTERMAN moved HB 118 and zero fiscal note from committee with individual recommendations. There were no objections.