03/02/1994 09:05 AM Senate STA

 CHAIRMAN LEMAN brings up HB 263 (TAX EXEMPTION FOR CERTAIN PERSONAL           
 PROP.) as the next order of business before the State Affairs                 
 Committee.  The chairman calls the sponsor to testify.                        
                                                                               
 Number 035                                                                    
                                                                               
 REPRESENTATIVE MARK HANLEY, prime sponsor of HB 263 says the bill             
 will give municipalities more flexibility in their tax laws.  It              
 does not require municipalities to do anything.  Municipalities               
 will still have to pass any changes by ordinance.                             
                                                                               
 What brought this situation to light in Anchorage is that while a             
 50,000 dollar motor home is taxed fifty dollars under the motor               
 vehicle tax, a 50,000 dollar private airplane is taxed 1,000                  
 dollars.  Municipalities have no option of exempting or partially             
 exempting aircraft.  What the municipality of Anchorage would like            
 do is set a straight fee of a 100 or 150 dollars for a single                 
 engine aircraft and 200 dollars for a twin engine aircraft.  That             
 way, the municipality would not have to go through the assessment             
 every year, the appeals of the valuation, etcetera.  The                      
 Municipality of Anchorage thinks it will actually save one and a              
 half to three full time positions by doing this.                              
                                                                               
 HB 263 would also apply to undocumented boats and vessels, pick-up            
 camper shells and canopies, and unlicensed atv's, snowmachines, and           
 trail bikes.  Right now, if the municipality wants to tax these               
 items, it has to be at the mill rate, which means the municipality            
 has to go through the valuation process, send out notices, instead            
 of taxing these items at a flat rate.                                         
                                                                               
 Number 069                                                                    
                                                                               
 REPRESENTATIVE HANLEY states it also gives municipalities the                 
 flexibility to craft tax credits or deferrals to encourage business           
 development.  HB 263 is a flexibility bill, and it doesn't cost the           
 state anything.                                                               
                                                                               
 Number 079                                                                    
                                                                               
 CHAIRMAN LEMAN asks if there are any questions for Representative             
 Hanley.  The chairman comments it seems to be straightforward and             
 a reasonable approach.  The chairman asks if anyone in the audience           
 wishes to testify.                                                            
                                                                               
 Number 087                                                                    
                                                                               
 SENATOR TAYLOR makes a motion to release HB 263 from the State                
 Affairs Committee with individual recommendations.                            
                                                                               
 Number 089                                                                    
                                                                               
 CHAIRMAN LEMAN, hearing no objections, orders HB 263 released from            
 committee with individual recommendations.