Legislature(1999 - 2000)
04/22/1999 06:05 PM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 151
"An Act relating to exemptions for municipal property
taxes for certain primary residences; relating to
property tax equivalency payments for certain
residents; and providing for an effective date."
Co-Chair Parnell explained that the bill addresses the
municipal property tax exemptions for senior citizens and
disabled veterans. He spoke to work draft 1-LS0842\G, Cook,
4/22/99 and the unfunded mandate. Co-Chair Parnell noted
that the committee substitute would add a new Section #1, so
that any property exempted from taxation for purposes not
included in the local contribution calculation for school
funding would remain in State law. Additionally, the
proposed committee substitute would add Section #4, Page 3,
which would move the exemption for the seniors to the
optional exemption portion of the statute.
Co-Chair Parnell MOVED to adopt the committee substitute as
the working draft before the Committee. Senator Adams
OBJECTED.
Senator Adams questioned the exclusion from local tax
limitations. Co-Chair Torgerson pointed out that Amendment
Senator Donley asked if local government would be
responsible for passing an ordinance in order to continue
the existing exemption. Co-Chair Parnell explained that the
legislation would clarify that the municipality, by
ordinance, would be wholly or partially exempted by taxation
and would be responsible for taking that step.
Senator Phillips referenced Page 2, Line 19, and asked if
$150 thousand dollars was the determined cap. Following
discussion among Committee members, Senator Adams maintained
his objection to adopting version "G" of the proposed
legislation. He advised that pressure would be released in
specific portions, however, would be applied more deeply to
other cost areas.
A roll call vote was taken on the motion.
IN FAVOR: Donley, Green, P. Kelly, Leman, Parnell,
Phillips, Torgerson, Parnell
OPPOSED: Adams
The MOTION PASSED (8-1).
EDDY JEANS, Manager, School Finance Section, Department of
Education, commented that the Department of Education did
have a "problem" with Section #1 of the legislation
because it changes the way the value determination is
calculated. It would make it vary from community to
community based upon what the voters of that community
accepts for property tax.
He continued that under Title 29, the State Assessor
determines the full and true calculation of real and
personal property within each community in the State. There
exists a "mandatory exemption", which is $150 thousand
dollars and an "optional" exemption which the community
can exempt over and above the $150 thousand dollars. Under
Section #1, it states that the property value may not be
included in the determination to the extent of the
exemption.
TAPE SFC-99 #106 Side B
Mr. Jeans continued. He stated that the Department
recommends that there is a uniform calculation used in
applying for a determination for State foundation purposes.
Co-Chair Torgerson asked if the end result would be
increased local effort, and State aid decreased. Mr. Jeans
acknowledged that was correct. Co-Chair Torgerson pointed
out that the $150 thousand dollars was already deducted from
the full and true value. Mr. Jeans advised that an amount
must be set and that vague language will create a problem.
Senator Adams asked if there should be a "grandfather
clause" included in the legislation. Mr. Jeans replied
that his concern was only with the inclusion of the language
"$150 thousand dollars". He recommended that a uniform
process be used to determine the local effort.
In response to Co-Chair Torgerson's concern, Mr. Jeans
reiterated that he had had a conversation with the State
assessor and that by moving it from a required exemption of
$150 thousand dollars to an "optional" exemption would
cost municipalities approximately $6 million dollars
statewide.
ROSALEE WALKER, Older Persons Action Group, Juneau,
requested that the legislation be held in Committee. She
noted that many important groups had not been consulted
regarding such an important piece of legislation. Ms.
Walker emphasized that this should not be an "optional"
amount, and that instead it should stay mandatory.
GARY BERRY, American Legion, Juneau, indicated that he was
present to testify on a section of the bill which had been
deleted.
KEVIN RITCHIE, Alaska Municipal League (AML), Juneau,
advised that the AML supports the passage of SB 151. He
agreed that it is important that the school issue had been
addressed. Additionally, AML supports giving the
municipalities the broadest possible options in working with
the senior community. Some of the options discussed by the
municipalities would be to make that option "needs" based,
potentially reducing the amount. The average exemption
under the program is a little under $100 thousand dollars.
He recommended that options be included in the package in
order to allow the opportunity for deferral.
Senator Parnell requested Mr. Ritchie to explain the concept
of "deferral". Mr. Ritchie explained that tax deferral is
a concept used nationally which would simply allow a senior
to defer taxes, and that it essentially becomes a lien on
the property and not become payable until the property is
either sold or the senior dies.
Senator Leman inquired if AML would continue to support the
legislation if the exemption was included, but the
municipalities were allowed to opt out. Mr. Ritchie replied
that the bill in the present form is relatively new and that
he would not be able to comment on that possibility. He
noted that the AML policy, which was adopted in November
1998, states that the choices of the organization provide
that there are exemptions.
Senator Adams asked if AML would support the desires of the
senior citizens with the property tax exemptions. Mr.
Ritchie replied that AML adopt its policy statement
annually. Co-Chair Torgerson requested that Mr. Ritchie
closely study Section #1 to further discuss the impact.
GERALD DORSCHER, Legislative Officer, Veterans of Foreign
Wars (VFW), Juneau, asked if the disabled veterans would be
affected by the proposed legislation. Co-Chair Parnell
acknowledged that was correct. The disabled veterans'
exemption would remain in place under the proposed draft and
would not be affected.
DALE BONDURANT, Kenai, (Testified via Teleconference),
testified against SB 151. He stated that it would downgrade
medical health care, social benefits, schools, roads and so
forth. The oil company knows that the citizens as a whole
have less personal benefits from the income of depleting oil
resources than the oil industry can easily rate. Mr.
Bondurant noted that fewer benefits equate to less public
watchdog interest. He claimed that the oil companies are
raping the Alaska resources.
ED ZASTROW, Alaska Association of Retired Persons (AARP),
Ketchikan, (Testified via Teleconference), spoke in
opposition to SB 151. He noted that there are a growing
number of senior citizens that have chosen to live in their
homes because of the property tax exemption, permanent fund
checks and longevity bonus. These monies are major factors
in their fixed income. He emphasized that a threat to
eliminate any of these sources of funds creates a major fear
within the senior population.
Mr. Zastrow pointed out that the latter portion of the bill
addresses local elections. AARP sees that as "pitting"
the seniors against their neighbors which is totally
unacceptable. He urged that the bill be left in Committee.
BOB GORE, Past President, Pioneers of Alaska, Ketchikan,
(Testified via Teleconference), spoke in opposition to the
proposed legislation. He stated that this is a "hardship"
bill and that there is not enough space in the Pioneer Homes
to take care of all the seniors that will need to sell their
homes with the bill's passage. He emphasized that this bill
does not treat the older Alaskans with respect.
Co-Chair Parnell MOVED to adopt Amendment #1, 1-LS0842\A.2,
Cook, 4/22/99. [Copy on File]. There being NO OBJECTION,
it was adopted.
Co-Chair Parnell MOVED to adopt Amendment #2. [Copy on
File]. The amendment would insert language on Page 3, Line
4: "An ordinance adopted under this subsection may limit
the exemption to only those individuals with financial need
as defined in the ordinance". There being NO OBJECTION, it
was adopted.
Senator Leman MOVED a conceptual amendment, Amendment #3,
which would change the "opt in" method to the "opt out"
option on Page 4, Line 3. The language would make the
option a municipal decision rather than going before the
voters.
Senator Adams questioned language on Page #2 regarding the
$150 thousand dollars. Co-Chair Torgerson noted that these
concerns would be addressed at a later time.
Senator P. Kelly requested clarification regarding the
proposed amendment. Co-Chair Parnell explained that it
would be by ordinance and not by the approval of voters.
There being NO OBJECTION, Amendment #3 was adopted.
SB 151 was HELD in Committee for further discussion.
| Document Name | Date/Time | Subjects |
|---|