Legislature(2001 - 2002)

02/28/2002 09:08 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     SENATE BILL NO. 337                                                                                                        
     "An Act relating to eligibility for an exemption from                                                                      
     municipal property taxes for certain seniors and disabled                                                                  
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Donley, sponsor,  testified  this bill  would allow  local                                                            
governments  to  adopt eligibility  requirements  for  the  existing                                                            
senior  citizens  and veterans  property  tax  exemption,  that  are                                                            
parallel  to eligibility  requirements  for receipt  of a  permanent                                                            
fund dividend.                                                                                                                  
Co-Chair Donley  stated the public  policy of the existing  mandated                                                            
exemption, which  he noted is an unfunded mandate  by the State upon                                                            
local  governments,  is to  encourage  senior  citizens  to live  in                                                            
Alaska  and to  assist  disabled  veterans.  He explained  the  same                                                            
criteria as used  for qualification for the permanent  fund dividend                                                            
is proposed  for the tax  exemption because  senior citizens  who do                                                            
not qualify  for the  dividend are  also not residing  in the  State                                                            
long  enough to  make  significant  economic  and community-service                                                             
contributions necessary to warrant the exemption.                                                                               
Co-Chair   Donley   explained  this   legislation   provides   local                                                            
governments "a tool" for managing the tax exemption program.                                                                    
TIM  ROGERS,  Legislative   Program  Coordinator,  Municipality   of                                                            
Anchorage testified in  Juneau in support of the bill. He noted this                                                            
legislation is  a result of recommendations of the  Anchorage Senior                                                            
Citizens  Advisory   Commission  made  in  1997.  He   detailed  the                                                            
recommendations identified a "loophole" in existing law.                                                                        
Mr.  Rogers listed  that  the Municipality  of  Anchorage  currently                                                            
exempts   $18.2  million   worth  of  property   taxes  for   86,000                                                            
participants through  this program. He continued that  approximately                                                            
five-percent  of those  participants  do not  qualify  to receive  a                                                            
permanent  fund dividend.  He clarified this  legislation would  not                                                            
automatically exclude these participants.                                                                                       
Mr.  Rogers added  that this  legislation  would  also simplify  the                                                            
application   process  both  for   the  participants  and   for  the                                                            
Co-Chair Kelly asked the amount of funds that would be "saved".                                                                 
Mr.  Rogers  answered  the  Municipality  of  Anchorage  would  save                                                            
between $100,000 and $200,000.                                                                                                  
Senator Leman  asked the percentage  of property owners who  receive                                                            
this exemption.                                                                                                                 
Mr. Rogers replied that  approximately 16 percent participate, which                                                            
has increased approximately five percent a year.                                                                                
KEVIN RITCHIE,  Alaska Municipal  League,  testified in Juneau  that                                                            
the League's  Revenue Finance  subcommittee  discussed and  endorsed                                                            
this bill.  He thanked  the Committee for  considering granting  the                                                            
municipalities  the authority  to make these  decisions. He  relayed                                                            
the fairness  issue was also  discussed and  it was agreed  that the                                                            
purpose  of  the senior  citizens  property  tax  exemption  program                                                            
should encourage Alaskans  to remain in the State as they get older.                                                            
He  continued,  however,  that  if these  senior  citizens  are  not                                                            
residents,  the  tax  exemption  might  not  be  a  benefit  to  the                                                            
Senator Green offered a  motion "move Senate Bill 337 from Committee                                                            
with individual recommendations."                                                                                               
There was no  objection and SB 337  MOVED from Committee  with a new                                                            
zero fiscal  note, dated 2/26/02,  from the Department of  Community                                                            
and Economic Development.                                                                                                       

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