Legislature(2007 - 2008)SENATE FINANCE 532
02/21/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB122 | |
| SB204 | |
| HB67 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 201 | TELECONFERENCED | |
| + | SB 122 | TELECONFERENCED | |
| + | SB 204 | TELECONFERENCED | |
| + | HB 67 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 21, 2008
9:08 a.m.
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee meeting
to order at 9:08:10 AM.
MEMBERS PRESENT
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
ALSO PRESENT
Senator Bill Weilechowski; Michelle Sydeman, Staff, Senator
Bill Wielechowski; Kim Garnero, Director, Division of
Finance, Department of Administration; Gary Superman, self,
Kenai; Jennifer Yuhas, Special Assistant to Mayor, Fairbanks
North Star Borough; Senator Gene Therriault; Ernest Prax,
staff Senator Therriault, Representative Gruenburg,
Representative Mike Chenault, Michelle Sydemen, Staff to
Senator Wielechowski; Grier Hopkins, staff, Senator Joe
Thomas; Steve Van Sant, State Assessor, Department of
Commerce Community Economic Development Ernest Prax, Staff,
Senator Gene Therriault
PRESENT VIA TELECONFERENCE
Sandra Fabry, State Government Affairs Director, Americans
for Tax Reform; Chris Nelson, Alaska for Tax Reform; Steve
Cleary, Executive Director, Alaska Public Interest Research
Group (AKPIRG); Steve Van Sant, State Assessor, DCCED;
Tammie Wilson, Fairbanks; Susan Hernandez, Fairbanks Tammie
Wilson, North Pole; Susan Hernandez, Fairbanks
SUMMARY
SB 201 "An Act relating to the establishment and
maintenance of an Internet website providing
public finance information; and identifying
the information to be available on the
Internet website."
SB 201 was HEARD and HELD in Committee for
further consideration.
SB 122 "An Act relating to an optional exemption
from municipal property taxes for residential
property."
SB 122 was heard and HELD in Committee for
further consideration.
SB 204 "An Act relating to an optional exemption
from municipal property taxes for residences
of widows and widowers of certain members of
the armed forces of the United States; and
providing for an effective date."
SB 204 was heard and HELD in Committee for
further consideration.
HB 67(FIN) am "An Act relating to a mandatory exemption
from municipal property taxes for certain
college property, to a mandatory exemption
from municipal property taxes for residences
of certain widows or widowers, and to
optional exemptions from municipal property
taxes for property of certain fraternal
organizations and for certain residences of
law enforcement officers; and providing for
an effective date."
CS HB 67 (FIN) am was heard and HELD in
Committee for further consideration.
9:08:27 AM
SENATE BILL NO. 122
"An Act relating to an optional exemption from
municipal property taxes for residential property."
SENATOR BILL WEILECHOWSKI, sponsor, explained SB 201, Alaska
Open Government Act. The legislation mandates a free,
searchable website that provides Alaskans with easy access
to detailed and comprehensive information on state spending.
He asserted that this will encourage better understanding of
state operations and, ultimately, reduce waste and ensure
that funds are directed to the state's most important needs.
He informed the Committee that in 2006 President Bush signed
into law the Federal Funding Accountability and Transparency
Act. The Act calls for the creation of a searchable website
(www.federalspending.gov)of federal contracts and grants
over $25,000.00. He underlined that the legislation was
introduced by a bipartisan team of 4 United States Senators
including: Senator John McCain and Barack Obama. In 2007,
five states (Kansas, Texas, Oklahoma Minnesota and Hawaii)
passed similar legislation mandating an on-line data base
outlining state expenditures. Efforts are underway in 14
other states to adopt a similar mandate. Senator
Weilechowski referenced the handout showing examples of
websites in Texas, Virginia and Missouri. He said that the
states with the information websites had large numbers of
citizens using the site with Missouri reporting as many as
one million hits. He underlined the importance of placing
the provision in statute so it is not affected by political
changes in leadership. He added that placing the provision
in statute gives the Legislature a say in what may or may
not be on the website. He informed the Committee that SB
201 has a zero fiscal note.
Co-Chair Stedman addressed page 3, line 10: "shall be
available October 1, 2009". He asked why the date is so far
in the future.
Senator Weilechowski responded that the Governor provided
the timeline. Previous committees urged the Administration
to have the website finalized before any action was taken on
the bill. He did not object to changing the date. He
acknowledged that the Governor's office has a website up and
running and that it could evolve into something more
polished.
Senator Huggins asked what the difference was between the
Governor's website and the proposed in the bill.
9:15:20 AM
MICHELLE SYDEMEN, STAFF TO SENATOR WIELECHOWSKI, explained
that the Governor's website, Checkbook Online, only lists
some expenditures, but none of the revenue information
outlined in SB 122. She deferred to Kim Garnero for further
clarification. Co-Chair Stedman noted that most of the
information is already available. Senator Weilechowski said
the information is available, but the information would be
consolidated on the website to provide a clearer
understanding for the public. Co-Chair Stedman said the
Legislature is working toward a more easily interpreted
process.
9:17:28 AM
Senator Thomas noted the difficulties of communicating the
future revenue forecast and state expenses to the public.
He asked Senator Weilechowski if the website would help
provide understanding to the public, given the complexity of
the variables involved.
Senator Weilechowski said that the website would help in
providing a level of understanding to the public about
future revenue and expenditures. He noted several ways in
which other states expressed the information on their
websites. There are many ways to explain where the state
revenue comes from and how it is spent.
Senator Dyson felt it would also be helpful to have the
state's outstanding liabilities on the website.
9:19:37 AM
Co-Chair Stedman agreed that both assets and liabilities
should be represented.
Senator Dyson emphasized the importance of clarifying for
the public, the value/erosion of the dollar over time. He
commended the Sponsor for his efforts and underlined the
importance of establishing the provision in statute.
Senator Elton asked about the language on page 2 regarding
receipts and expenditures. He expressed frustration with
the difference between the amount collected and the cost of
operations within the Division of Motor Vehicles (DMV)
licensing. He thought the amount taken in was three times
the amount spent. He asked if the disparity between what is
collected and what is spent would be reflected in the
information on the website.
9:21:47 AM
Ms. Sydeman, answered that the bill, as written, would not
require that information, but thought the idea worth
exploring. She noted that the Administration is attempting
to keep costs down by working within the capabilities of the
State's central accounting system.
9:22:32 AM
KIM GARNERO, DIRECTOR, DIVISION OF FINANCE, DEPARTMENT OF
ADMINISTRATION, added that the relationship of expenditures
to funding source is clear in the budget process and not so
clear in the accounting system. Most appropriations have
multiple funding sources, which means an allocation process
is necessary to match the expenditure to the dollar amount
collected. Attempting to clarify what DMV collects and what
is expended is far more complicated than the first version
of Checkbook Online that is currently available to the
Division. Checkbook Online does not include some
expenditures of the State and certain confidential
information. She explained that the Department of Law would
need to do an analysis on the confidential information. The
provision requires the information be aggregated, which is
not possible with the current system. She noted that as
confidential information comes available, the detail will be
added or a summary will be provided.
Ms. Garnero stated that revenues are not on the website, but
will be by the end of the fiscal year. She went on to
explain that the Alaska Data Enterprise Reporting System
(ALDER) is the first step in replacing aging accounting
payroll systems. She observed that ALDER is a reporting
system data warehouse that is taking legacy information from
the accounting system to a reporting system. The payroll
information is not yet in ALDER, but will be by the end of
the year. How much payroll detail will be added to the
website is yet to be determined. She clarified that the zero
fiscal note is based on using Excel to meet the requirements
on line 5, page 3, with no need to purchase additional
software. She said both the press and the public have
provided positive feedback on the user friendly aspect of
the website.
Co-Chair Stedman asked about the detail of payroll
information. Ms. Garnero said the payroll piece was not
even at the design stage of how detailed it would be.
9:27:16 AM
Senator Elton asked if the Administration could track the
number of hits to the website. Ms. Garnero agreed tracking
the number of hits would be useful, though she did not know
if it was being done.
Senator Huggins noted the value of tracking particular
indicators of government growth; number of people and
authorized positions by year. He wondered if the provision
intends to provide citizens with the ability to track such
information thru the website.
9:28:05 AM
Ms. Garnero said some information is available on the web in
a comprehensive annual report. The report tracks trends
over the years.
Senator Huggins felt that the information should be in a
condensed form to aid understanding of what transpires over
time.
Senator Dyson noted the importance of representing impacts
of the supplemental budget over calendar and fiscal years.
He also noted capital and operating costs are often unclear.
Ms. Garnero said the beauty of using the state's accounting
system is that it is categorized by payments made, not by
legislation that authorized the expenditure.
9:30:17 AM
Senator Olson asked why there is a zero fiscal note if the
compilation of information is required. Ms. Garnero said
the information is currently managed through Excel There are
no costs associated because the software is already
available for processing information. There is financial
impact only if there is a need to purchase software. She
reiterated that the ALDER system will allow for the
retrieval and accounting of 25 years worth of data.
Co-Chair Stedman assumed that by using Excel, the public can
download information more readily. Ms. Garnero agreed and
noted that there has been a great deal of positive support
for the website.
9:31:18 AM
Co-Chair Stedman asked if a person wanted to research a
payment made to the State by British Petroleum, within a
specific month, would that be available as a specific number
or an aggregate number.
Ms. Garnera said the plan now is to present revenues by type
not by source. She further noted that revenues are not
tracked as clearly as expenditures are. That information
would come from the Department of Revenue (DOR) and may or
may not be confidential.
Co-Chair Stedman asked if he understood correctly that the
number would be an aggregate rather than specific.
9:32:40 AM
Ms. Garnero responded that the revenue information would be
by category not by payee.
Co-Chair Stedman asked if the detail on expenses could be
broken down per individual employee of the State.
Ms. Garnero reiterated that only non-payroll expenses equal
to or greater than $1000 would be provided on the website.
The level of payroll information that would be available is
yet to be determined.
Co-Chair Stedman noted that the legislature does receive a
report that provides payroll information regarding salaries
for the higher positions within the executive branch as well
the legislative branch. Ms. Garnero noted that the Division
of Finance produces that report. Senator Thomas asked if
the $1000 threshold is for any non-payroll payment to any
state employee.
9:34:09 AM
Ms. Garnero noted she was uncertain if payroll parameters
are the same as the non-personnel services, parameters.
With non-personnel services the attempt was to cut the
number of venders down to an amount that could be presented
in Excel.
Co-Chair Stedman asked if the website allows a subcontractor
to look up payments of $1000 paid out to general
contractors. Ms. Garnero said that was correct.
Senator Elton concluded from the discussion that there is
currently no ability to track expenses under $1000. He
provided an example of a state employee traveling frequently
with accrued expenses exceeding $1000 in total. Ms. Garnero
responded that in order to track and compile that
information, hundreds of man hours are required. Senator
Elton noted the travel expense information for the executive
branch and the legislative branch is already available. He
asked if providing the information is just a matter of data
entry.
9:36:35 AM
Ms. Garnero reiterated that the manual aggregation of
information is time consuming. She said the information is
not retrievable in an automated fashion from the accounting
system.
Senator Elton assumed that detailed employee travel
information could be obtained through the Legislative
Affairs Agency or the executive branch.
Ms. Garnero also pointed out that the Travel and
Compensation Report is on the Checkbook Online website.
Co-Chair Stedman wondered where the line was between the
amount of information provided for clarity and when to much
information becomes convoluted.
9:37:49 AM
Ms. Garnero said Checkbook On-line is what is currently
being used to meet the research needs regarding any entity
the State makes payments too. With regards to debt loads
and revenue projections, the Comprehensive Annual Financial
Report is a great resource. She further noted that the
budget system produces helpful reports for more strategic
planning objectives.
Co-Chair Stedman noted that the reports mentioned are used
regularly by the legislature. He emphasized the challenges
of reviewing data and thought that the financial reports
could be quite daunting for the general public and even some
staff. He reiterated the desire for a user friendly
information base for true understanding of the financials of
the state.
Ms. Garnero recommended reading the management discussion
and analysis section of the financial report. She explained
that a high level executive overview of financial statements
and the significant events for the year are provided within
the report.
9:41:42 AM
Co-Chair Stedman made a point that it is very easy to get
lost in the complexity of detailed financial reports. He
emphasized the importance of providing information in a
format that is easily understood by the general public.
Ms. Garnero believed the website had potential for being a
communication tool for citizens in understanding the fiscal
health of the State.
Co-Chair Stedman said he would speak to the sponsor about
his concerns.
SANDRA FABRY, STATE GOVERNMENT AFFAIRS DIRECTOR, AMERICANS
FOR TAX REFORM (Testified via teleconference), testified in
support of SB 201 and noted the letter of support from
Americans for Tax Reform (copy on file.) She explained that
she had been working with lawmakers to move towards
providing transparency in government. She said SB 201 is
about providing taxpayers with a consolidated place to get
well-rounded state government finance information. She
quoted Ralph Nadar and noted his support for the concept.
She further pointed out that the movement transcends party
lines at both the federal and state level. She noted the
large percentage of citizens that supported the creation of
the website in other states.
9:49:12 AM
CHRIS NELSON, ALASKANS FOR TAX REFORM (Testified via
teleconference), spoke in support of SB 201 noting the
importance of one, easily accessible information website on
state operations and finances. He maintained that this
provision is an important step and urged that Committee to
move SB 201.
STEVE CLEARY, EXECUTIVE DIRECTOR, ALASKA PUBLIC INTEREST
RESEARCH GROUP (AKPIRG) (Testified via teleconference),
spoke in support SB 201 noting the unique ability to unite
all sides of the political spectrum. He further underlined
the importance of enabling citizens to be actively involved
in government.
9:52:24 AM
Co-Chair Stedman asked Ms. Garnero if the information would
be readily available to citizens. He asked specifically if
the number of state employees requested to be added to the
budget could be accessed through the website. Ms. Garnero
said the information is not available on the Division's
accounting system. The number of employees is a part of the
statistical data within the financial statement. Co-Chair
Stedman said he understood the report was available. He
wanted to make the point that by having understandable,
accessible information online, there is greater potential
for a clearer understanding of government operations and
finances.
9:54:07 AM
Senator Weilechowski concluded his comments by noting that
there is bipartisan support for SB 201. He purported that in
order for the citizenry to function, there needs to be
access to information. He maintained that the bill provides
for that access: information in a simple consolidated area.
9:56:22 AM
SENATE BILL NO. 122
"An Act relating to an optional exemption from
municipal property taxes for residential property."
GRIER HOPKINS, STAFF, SENATOR JOE THOMAS, read from the
Sponsor Statement (On File).
Senate Bill 122 increases the optional municipal
property tax exemption for a private residence from
$20,000 to up to $100,000. This bill does not mandate
any action by municipalities. This bill only allows
local governments the option of increasing their
residential property tax exemption.
Currently there are 12 boroughs and 13 cities - with a
combined population of over 590,000 Alaskans - which
levy property taxes. Each of these is attempting to
respond to homeowners struggling under the rising cost
of energy across the state. In some instances these
issues are coupled with rapidly rising assessed values
of private residences. Across the state, these citizens
are crying for relief.
SB 122 would not affect a smaller, revenue-strapped
community's sources of tax income. Instead, it would
give those municipalities with a large enough
population the ability to relieve the tax burden
largely borne by homeowners. SB 122 would allow local
for control in setting the allowable exemption at any
amount up to $100,000. A local ordinance would then
require voter approval before enactment.
The original option of exempting up to $20,000 was a
good idea when it passed both houses of the Alaska
Legislature unanimously in 2004, and has been a
valuable tool for the municipalities which exercised
this option.
As municipalities around our state attempt to diversify
their income base and respond to the needs of private
citizens struggling under today's rising energy costs,
I urge you to support the timely passage Senate Bill
122.
Co-Chair Stedman asked how many municipalities have used the
exemption. Mr. Hopkins responded that the City and Borough
of Yakutat, Anchorage Municipality, Fairbanks Borough and
the City of Fairbanks and Valdez would implement the
$100,000 exemption.
Senator Huggins asked Mr. Grier to explain the Fairbanks
North Star Borough's allocation of $150,000 for a ballot
initiative in 2008.
JENNIFER YUHAS, SPECIAL ASSISTANT TO MAYOR, FAIRBANKS NORTH
STAR BOROUGH, explained that the $150,000 allocation was
provided for a statewide citizen initiative. If the bill is
passed there would be no need for the allocation.
Senator Huggins referenced Ms. Yuhas' handout and asked
about the three ways communities could respond to the
potential revenue loss from the exemption. He quoted from
the handout "Allowable municipal Property Tax Exemption
increase" (On File):
Each municipality will have the burden to manage
diversification of revenue or retraction of services
associated with implementation of an increased
exemption.
There are 3 options reduction of services:
-decreased budget
-shifting tax burden to non residential properties
-implementing sales, gross receipts, or other taxes.
Senator Huggins asked about the third option that lists:
implementation of sales, gross receipts, or other taxes. He
asked if the list represents a strategy by FBNSB to
implement a tax. Ms. Yuhas said there has not been a
strategy outlined to implement a tax. The tax is just one
option of the three. She reiterated that each community
would decide how to manage the revenue loss.
Co-Chair Stedman asked if there was no other way the
municipalities could relieve this tax burden without passing
legislation. Ms. Yuhas said after researching through the
borough attorney, the assessor's office, and the financial
department, there was no other legal option available.
10:02:29 AM
Ms. Yuhas acknowledged the expressed concern regarding the
implementation of a higher property tax exemption and the
potential shift of the burden to non-residential property
owners. The City of Valdez testified in the last committee
that they would not shift the tax burden to non-residential
property owners. She said it would be up to each
municipality to decide how they would recoup the costs or
work with a decreased budget.
10:04:21 AM
STEVE VAN SANT, STATE ASSESSOR, DEPARTMENT OF COMMERCE
COMMUNITY ECONOMIC DEVELOPMENT, said the Administration does
not have a position on SB 122. The provision expands the
current residential exemption of $20,000. The fiscal note
reflects the cost associated with the implementation of the
$100,000 exemption. In the six communities that use the
exemption, the cost to the State is $4-5 million. This is
due to city oil and gas revenue receiving communities. He
explained that the communities would have to increase the
mill rate, which would cause the State to lose money on oil
and gas revenues.
Co-Chair Stedman asked for an estimate. Mr. Van Sant
reiterated the cost to the state in tax revenue would be $4-
5 million.
Co-Chair Stedman observed that the fiscal note is for $3
million. He asked about mandatory tax exemptions. Mr. Van
Sant explained that the $150,000 exemption is for seniors
who are at least 65 years old and living in their own home.
He elaborated that this exemption is a mandate that all
municipalities must abide by. Municipalities have the
option of exempting anything over $150,000 as outlined in
Title 29, Chapter 45, Section .050. At the present time,
there is only one municipality that has taken advantage of
the option.
10:07:59 AM
TAMMIE WILSON, NORTH POLE (Testified via teleconference),
spoke in support of SB 122. She informed the Committee that
her property tax bill has increased by 63% in one year. She
further explained that in the past four years the tax has
increased 95%. She said her income has not increased at the
same rate. She felt SB 122 is the only way the State can
allow a difference between property tax on homes versus
commercial or other properties. She supported the provision
as optional rather than a mandate. She urged passage of
SB 122.
Co-Chair Stedman noted that citizens do have the right to
appeal an assessment. Ms. Wilson responded that she had
pursued that option.
GARY SUPERMAN, KENAI, spoke in support of SB 122. He
outlined his experience with municipal taxing. In 2004, a
resolution was passed in Kenai supporting SB 136 and raising
the exemption to $20,000. Kenai has since implemented a
sales tax to cover revenue losses from property tax
exemption. He said he understood concerns regarding the
significant increase in the exemption and the potential
impacts to communities. He suggested tying the exemption to
a sliding scale, based on sales tax usage. He maintained
that the concept could provide tax relief, and the necessary
impetus for those without a sales tax, to put one in place.
10:16:26 AM
Co-Chair Stedman asked if Mr. Superman was speaking for
himself. Mr. Superman said he was speaking for himself, but
explained that the Kenai Peninsula Borough (KPB) did support
the property tax exemption in 2004. He said KPB had not yet
taken a stand on SB 122.
SB 122 was HEARD and HELD in Committee for further
consideration.
10:18:07 AM
SENATE BILL NO. 204
"An Act relating to an optional exemption from
municipal property taxes for residences of widows and
widowers of certain members of the armed forces of the
United States; and providing for an effective date."
SENATOR GENE THERRIAULT, SPONSOR, explained that SB 204
proposes optional property tax allowance for widows or
widowers of military personel who were killed in the line of
duty. In deference to the geographic differences around the
state and wanting to protect local control, the bill
provides an option rather than a mandate for property tax
exemption. He explained that the companion legislation, HB
285, removed the 90 day requirement.
Co-Chair Stedman asked Senator Therriault to define
"permanent place of abode". Senator Therriault explained
that the permanent place of abode is where a person lives.
He added that, with the latitude in the bill, the definition
would be created through local ordinances. He further
explained that, if a person owns multiple properties, the
state law suggests that the exemption be granted for the
property on which the person lives.
Senator Dyson asked if any consideration had been given to
extending the exemption to handicapped veterans who are
unable to earn income.
10:21:21 AM
Senator Therriault responded that in current law the senior
property tax exemption includes disabled veterans.
Senator Elton asked if the municipality has the option to
provide the exemption to someone who is not a resident.
Senator Therriault responded that SB 204 would allow for a
person to move to the State to qualify for the exemption.
He said thought had been given to whether to differentiate
between a spouse that gave their life in the line of duty
based on residency. He further noted that he didn't expect
people to move to Alaska to take advantage of the property
tax exemption. He provided an example of a soldier
stationed overseas who was an Alaska resident; he was
stationed overseas, but had property in Alaska.
10:23:46 AM
Senator Elton asked if the provision mandates that the
municipality offer the exemption to an individual who was
not a resident, or could the municipality determine
criteria. Senator Therriault clarified that the current
wording is a mandate. He said that, if that was not the
desired result, language would need to be added to clarify.
Senator Elton restated for clarification that the program is
optional, but some of the options may be precluded. Senator
Therriault said the level and length were optional; the
prospective pool is mandated.
Senator Huggins suggested the 90 day language is irrelevant.
He also clarified that Alaska is considered an overseas
tour-of-duty. A permanent place of abode means different
things to different people, particularly those who work for
the military. He supported the bill, but wanted to be
certain the language was correct.
10:26:39 AM
Senator Thomas assumed that line 11, 12, and 13 are critical
in indicating that the ordinance would allow a particular
entity to manage some of the residency issues. He said he
was troubled by the possibility of someone moving to the
State to take advantage of the exemption. He also
questioned the eligibility of someone who remarried.
Senator Therriault said if a person remarries they are no
longer a widower and would not be eligible for the property
tax exemption.
Co-Chair Stedman asked about those living in a commercial
building and how they are considered for the exemption as
opposed to those who own a home.
10:28:43 AM
Senator Therriault reiterated that there is enough
flexibility in the provision to allow municipalities to make
determinations. He informed the Committee that the Alaska
Municipal League supports SB 204.
Co-Chair Stedman asked how many municipalities were
anticipated to take advantage of the exemption.
ERNEST PRAX, STAFF, SENATOR GENE THERRIAULT, said that 80-
100 soldiers stationed in Alaska have been killed in combat
duty. There is uncertainty with regard to how many soldiers
had families, and how many of those families had chosen to
stay in Alaska.
10:31:04 AM
Senator Thomas referenced the wording on line 9, and asked
if the language included a person who is killed under
"friendly fire". He explained that in a previous committee
there was a question regarding a suicide case and whether
dependents would be the eligible for the exemption. Mr. Prax
said that if a soldier intentionally took his own life, then
the family would not be eligible for the exemption. He went
on to say that if a soldier was killed in the line of fire
while protecting another soldier, they would not only be
eligible, but would be bumped up the priority list for
receipt of benefits. With regard to being killed under
"friendly fire" the answer is yes, they would be eligible.
Senator Huggins asked the Sponsor if it was his intention to
make a widower who had remarried ineligible.
Senator Therriault responded yes. He further clarified that
the eligibility for the exemption is based on "hostile" or
"friendly" fire. Any individual receiving "imminent danger"
pay is eligible for the exemption.
10:33:41 AM
Co-Chair Stedman asked if the definition includes a soldier
who is preparing to go to Iraq and dies before being
deployed. Senator Therriault said that the soldier in that
scenario would not be eligible as they would not yet be
receiving "imminent danger" pay.
10:35:16 AM
Senator Huggins clarified that an individual is considered
eligible for imminent danger pay when in the combat zone
circle, regardless of what capacity they serve.
10:36:52 AM
SUSAN HERNANDEZ, FAIRBANKS (Testified via teleconference),
testified in support of SB 204. Her husband was killed in
Iraq in 2006. She reiterated the definition of "imminent
danger pay". She further commented that she did not feel it
appropriate for a soldier to receive benefits if their death
was at their own hand.
Mr. Van Sant provided definitions:
-permanent place of abode: 185 days a year
-Widow: benefits stop if remarry, municipalities could
extend
-"90 days" was taken out of house bill due to assessors
seeing it as problematic. He suggested the 90 day
language be removed from SB 204.
Senator Therriault said he did not have a problem with
omitting the 90 day provision and noted he would work with
staff to draft a CS.
SB 204 was HEARD and HELD in Committee for further
consideration.
10:42:36 AM
CS FOR HOUSE BILL NO. 67(FIN) am
"An Act relating to a mandatory exemption from
municipal property taxes for certain college property,
to a mandatory exemption from municipal property taxes
for residences of certain widows or widowers, and to
optional exemptions from municipal property taxes for
property of certain fraternal organizations and for
certain residences of law enforcement officers; and
providing for an effective date."
REPRESENTATIVE GRUENBERG, CO-SPONSOR, addressed HB 67. Rep.
Gruenburg referred to HB 67 as the "cop in the neighborhood"
bill. The provision allows a municipality to provide an
exemption from municipal property taxes for peace officers
who move into a high crime neighborhood. He maintained that
having an officer in the neighborhood is a crime deterrent.
He outlined the sections of the bill:
Sec. 1 extends the disabled veteran property tax
exemptions to widows and widowers of peace officers.
He noted the definitions used for this are the same as
those in SB 204.
Sec. 2 added by Senator Thomas expands the optional
municipal tax exemption for residences to 40,000.
Sec. 3 was added by Representative Meyer. Originally
the exemption was mandatory. This was changed to
optional to allow municipalities to exempt property of
a private none profit four year college or university
that is accredited that is not subject to the mandatory
exemption. He added that other taxing provisions would
still apply.
Representative Gruenberg noted that section 3 is important
to a facility located on the Alaska Pacific University
campus.
Sec. 4 provides the option for municipalities to exempt
religious, charitable, education, scientific, literary,
and fraternal organizations. Representative Gruenburg
explained that many of the facilities are used as a
meeting place and serve the entire communities.
Representative Gruenburg purported that HB 67 has served as
a repository for many tax relief provisions. He urged the
Committee to pass HB 67 because it provides property tax
relief to a wide variety of people and organizations.
Senator Elton asked how the tax exemption effects "full and
true value" that is applied to the school funding formula.
Representative Gruenburg was not certain. He explained that
the exemption may trigger a round of additional assessments
or trigger the municipality to look at the rest of it's
taxing structure.
10:50:17 AM
Mr. Van Sant explained that HB 67 deals with optional
exemptions and has no revenue impact to the State. He
addressed the question regarding the full value
determination. Any optional exemption, authorized by a
municipality is put back into the full value, and would
thereby not effect school funding. "If a municipality's
full value is $100 and they exempt optionally a fraternal
organization, for example, those are put back in so the full
value will remain $100 even though the local assessed value
may be $85." The full value will not be effected by this.
For school funding purposes the 4 mills would be based on
$100 rather than $85. He reiterated that because these are
all optional exemptions it would not have an impact on the
State.
Mr. Van Sant added a clarification: Sec. 1 does not extend
the exemption to widowers; it clarifies that it removes the
age requirement. The language combines the criteria for
disabled veterans and widowers. The language is removed so
that there is no age restriction for veterans.
10:52:38 AM
Rep. Gruenburg said the effective date needed to change
because, if HB 67 was enacted now, the effective date would
be retroactive.
Co-Chair Stedman MOVED to ADOPT Amendment 1, 25-LS0314/J.2
Cook, 2/19/08.
Co-Chair Stedman OBJECTED for purposes of clarification.
REPRESENTATIVE CHENAULT, Co-Sponsor, explained that the
amendment allows for boroughs, to charge cities inside the
borough, for collecting a tax that is not uniform to the
borough. The amendment provides for the borough to charge a
fee to pay for purchases necessary for tax collection.
Co-Chair Stedman WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment 1 was adopted.
Senator Dyson asked if there would be efforts to combine
legislation dealing with tax exemptions.
10:55:19 AM
Co-Chair Stedman stated the intention was to provide an
opportunity for discussion on various proposed legislation
dealing with property tax exemption.
Senator Dyson supported combining the tax exemption
legislation.
Co-Chair Stedman said the provision may fit into a long-term
fiscal bill.
HB 67 was Heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 10:57:28 AM.
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