Legislature(1993 - 1994)
04/21/1993 09:05 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 66(FIN) am An Act relating to an exemption from and deferral of municipal property taxes for certain primary residences, to property tax equivalency payments for certain residents, to the determination of full and true value of taxable property in a municipality; and providing for an effective date. Co-chair Pearce directed that CSHB 66 (Fin)am be brought on for discussion and referenced a new draft SCS CSHB 66 (Fin) (8-GH1032\M, Cook, 4/20/93), two new fiscal notes from the Dept. of Community and Regional Affairs, and an April 20, 1993, memorandum from Tam Cook regarding the optional tax exemption. RICK SOLIE, aide to Co-chair Frank, came before committee. He advised of need for a technical amendment. Co-chair Frank MOVED for adoption of the "M" version of SCS CSHB 66 (Fin). He explained that the draft contains provisions for municipalities to opt out of the senior citizens' portion of the tax exemption but not from the exemption for veterans. Senator Rieger voiced his understanding that the draft would prohibit a municipality from opting out of an exemption for disabled veterans. He then requested clarification of language at Sec. 5. Rick Solie advised that changes within Sec. 5 allow a municipality to increase the exempted amount for disabled veterans. Senator Kelly suggested that reference to the municipal option should be included within title language. He then MOVED to amend the title as follows: Page 1, line 1: Following the word "to" add: "a municipal option for" He said that the thrust of the Senate Finance version is the option, and it should be so stated in the title. No objection having been raised, the title amendment was ADOPTED. CAROLYN BERG came before committee representing "most of the pioneers in Alaska." She stressed that the state has an important and legitimate interest in preserving and protecting the health of its senior citizens. That cannot be done when the existing senior citizen property tax exemption is posed for cut off at a time when health care costs are the greatest. Senator Kelly attested to Mrs. Berg's many years of involvement in issues before the legislature. Senator Kerttula concurred in need for the state to take the leadership on behalf of senior citizens. Narrow-tax-based local communities often cannot provide much support. Much of available local resources are devoted to schools. Seniors are a contributing influence by virtue of expenditure of their income. It would be an "incorrect posture for the state not to give direction to local governments to continue a senior citizen discount program." He termed the proposed legislation "a bad bill." KEN SWISHER, Alaska Municipal League, next came before committee. He voiced a preference for the House version of the legislation over the newly adopted SCS CSHB 66(Fin). The House legislation allowed maximum flexibility to local governments to structure programs most fitting the local level. The preferred option is for full funding of the exemptions. Support for CSHB 66 (Fin)am is the second choice. The Municipal League surveyed local officials to determine what action might be taken should the legislation pass. Most agree that the matter will become an issue at the local level, and some form of action will be taken. The survey covered Anchorage, Kenai, Juneau, MatSu, Cordova, and Valdez. Referencing the disabled veterans mandate, Mr. Swisher expressed a preference for municipalities to be able to consider need. The needy should be helped rather than those who do not require assistance. Assistance to those who are not needy comes at the expense of those who do. Preserving seniors in their homes is of great value. The league supports that effort. On the other hand, a number of young families have difficulty keeping their children fed and clothed. Senator Kerttula spoke to tax payments by seniors over many years. He reiterated that most of the support at the local level goes to schools. Taxpayers continue to support schools long after their children have graduated. Mandating the continued exemption should not adversely impact boroughs. Senator Kerttula took exception to the position taken by the league, terming it "intolerable." BRUCE GERAGHTY, Deputy Commissioner, Dept. of Community and Regional Affairs, next came before committee. He initially spoke to problems surrounding lack of a disability threshold for the disabled veteran exemption and suggested that the committee include language relating to 50% disability. At the present time there are 703 disabled veterans who would qualify for the program. Of that number, 421 are in Anchorage. Mr. Geraghty expressed the department preference for an earlier work draft of the bill, distributed for review at a prior meeting. That version allows municipalities the greatest flexibility and maintains programs unless municipalities take action to alter them. Discussion followed between Mr. Geraghty and committee members regarding inclusion of the 50% disability threshold in the earlier version and lack thereof in adopted version "M." Rick Solie clarified the issue by explaining that the since the "M" version does not amend "any aspect of the disabled veterans' program" there was no need for the definition. Mr. Geraghty said the department would have no problem with the bill if the definition remains in law. Mr. Solie concurred that it remains in existing statutes. Senator Kerttula noted that a 10% disability in youth may comprise a much larger percentage as one grows older. He then asked if statutes contain a method of reevaluating injuries. Mr. Geraghty said that the department does not determine disability. It is identified at the time of discharge from the military. If an adjustment needs to be made, the issue would be dealt with by the Dept. of Military and Veterans' Affairs. Co-chair Pearce asked that Mr. Geraghty research the matter and provides members information on available avenues. Co-chair Pearce called for additional questions or comments on the bill. Senator Kerttula MOVED to TABLE the bill. Co- chair Frank OBJECTED. Co-chair Pearce called for a show of hands. The motion FAILED on a vote of 1 to 5. Co-chair Frank MOVED for passage of SCS CSHB 66 (Fin) with individual recommendations and the appropriate fiscal notes. Senator Kerttula OBJECTED. Co-chair Pearce called for a show of hands. The motion CARRIED on a vote of 5 to 1, and SCS CSHB 66 (Fin) was REPORTED OUT of committee with the following fiscal notes: DOA 0 DOE 0 DC&RA (homeowner exemption, seniors) 0 DC&RA (renter rebate, seniors) 0 DC&RA (homeowner exemption, veterans) $1,109,520 DC&RA (renter rebate, veterans) $ 162,294 Co-chairs Pearce and Frank and Senators Rieger and Sharp signed the committee report with a "do pass" recommendation. Senator Kelly signed "do pass as amended." Senator Kerttula signed "do not pass." (Senator Jacko was absent from the meeting and did not sign.) RECESS Co-chair Pearce directed that the meeting be recessed at this time, and scheduled to reconvene later in the day for continued hearing and action on SB 7, SB 88, and SB 150. The meeting was recessed at approximately 11:00 a.m.