Legislature(2013 - 2014)BUTROVICH 205
03/28/2013 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB73 | |
| HCR4 | |
| SB45 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 73 | TELECONFERENCED | |
| + | HCR 4 | TELECONFERENCED | |
| = | SB 45 | ||
SB 73-PROPERTY TAX EXEMPTION/MILITARY WIDOW(ER)
9:02:06 AM
CHAIR DYSON announced that the first order of business would be
SB 73.
EDRA MORLEDGE, Staff, Senator Kevin Meyer, sponsor of SB 73,
introduced the bill on behalf of the sponsor. She explained that
SB 73 provides a property tax exemption for widows and widowers
of military service members. The bill came about because of a
constituent of Senator Meyers, Theresa Dayton, who lost her
husband who was in the military. She referred to a letter of
support for Ms. Dayton in members' packets. She related that in
2012, Ms. Dayton worked hard with the Municipality of Anchorage
to pass Proposition 7, which would exempt the first $150,000 of
property taxes for surviving military spouses; however, the
proposition cannot take effect until the legislature amends AS
29.45.030(e).
MS. MORLEDGE related that SB 73 amends the aforementioned
statute so that Proposition 7 can take effect and so any other
municipality can do the same thing.
CHAIR DYSON noted the arrival of Senator Meyer.
MS. MORLEDGE continued to explain that the bill is intended to
support the families of service members who die while serving
their country and to encourage the families to remain in Alaska.
It is not an unfunded mandate, but allows municipalities the
statutory language needed to provide this exemption, should they
wish to. She noted there is a zero fiscal note from the
Department of Commerce, Community and Economic Development.
MS. MORLEDGE offered to explain the changes between the original
bill and the CS, version N.
9:04:52 AM
SENATOR GIESSEL moved to adopt CS for SB 73, version N, as the
working document. There being no objection, it was so ordered.
MS. MORLEDGE described the changes from the original version of
the bill, which was modeled on previous legislation. The CS does
not limit the exemption to those 60 years and older as the
original bill did. The CS was also tightened up regarding what
it means to be killed in the military. It now states that the
provision applies to a member of the armed forces of the United
States who died because of illness or injury suffered while
serving on active duty or complications relating to the
treatment of the illness or injury suffered while on active
duty. The language mirrors another statute and is clearer,
according to the Department of Law. Also, the definitions of
widow and widower were clarified.
9:07:09 AM
At ease
9:07:56 AM
SENATOR KEVIN MEYER, sponsor of SB 73, related that the
legislation would apply to only five people. He commented that
he didn't know why people join the military because of the
inadequate life insurance offered. He explained that Anchorage
put this issue on the ballot in 2012 and it passed; however, it
cannot be implemented until a statute change is made.
9:09:34 AM
CHAIR DYSON asked if there was a legal opinion from Anchorage
regarding the need to modify the state statute.
MS. MORLEDGE referred to an item in the packet - the Anchorage
ordinance, which specifies the statute must be changed. She
noted that there is a similar statute that allows a municipality
to exempt property tax for widows and widowers, but it states
that the person must be serving on active duty while eligible
for hostile fire or imminent danger pay. Senate Bill 73 does not
use that language and requires a vote of the people before the
exemption is allowed, which the other statute does not.
9:11:18 AM
SENATOR WIELECHOWSKI asked for a definition of active duty
service.
MS. MORLEDGE responded that legislative research came up with
many definitions. The sponsor wished the definition to be
broader than what was in current statute. For example, SB 73
would apply to the family of a person who contracted malaria and
died, but was not necessarily in combat.
SENATOR WIELECHOWSKI asked if all branches are covered,
including the National Guard and the Coast Guard.
MS. MORLEDGE said yes.
SENATOR WIELECHOWSKI asked if the language "who dies because of
illness or injury" refers 100 percent to death caused by their
military service.
MS. MORLEDGE clarified that the intent is if the person died as
a result of their active duty experience.
9:14:23 AM
CHAIR DYSON assumed that the legislature is making it possible
for the municipalities to enact their own propositions and the
municipalities can set the criteria.
SENATOR MEYER agreed. He said he did not want the state to
hinder municipalities' flexibility to apply their own
guidelines.
SENATOR GIESSEL noted she worked on another bill that used the
terms "active duty" and "overseas," which also apply to "in
Alaska." She clarified that illness or injury experienced while
on active duty applies to those serving at home. She concluded
the bill is very broad.
MS. MORLEDGE said that is the intent of the bill. She gave an
example of a constituent whose husband was killed in Alaska.
9:16:04 AM
RACHEL WITTY, Assistant Attorney General, Labor and State
Affairs Section, Department of Law, answered questions related
to SB 73. She commented that she did not have an answer about
whether the cause of death had to be a substantial factor or a
contributing factor.
CHAIR DYSON asked if the statute change is needed.
MS. WITTY said, based on Anchorage's ordinance, it is needed.
CHAIR DYSON asked if current statute allows a municipality to
provide relief for certain people on property taxes.
MS. WITTY replied that if it is not one of the categories
included under the current statute, which is limited to persons
65 and older, or a disabled veteran, or a widow or widower, aged
60 or more, of a person 65 or older, it is needed. The
municipalities were not able to give the exception to military
widows or widowers of someone who was killed who was not 65 or
older or a disabled veteran.
9:18:27 AM
CHAIR DYSON looked at AS 29.45.050 and read subsection (s), "a
municipality may by ordinance partially or wholly exempt from
taxation, a real property owned and occupied as a permanent
place of abode by resident who is the widow or widower of a
member of the armed services injured on active duty." He opined
that municipalities could have provided for the exemption under
those tighter conditions in current code. He asked if that was
correct.
MS. WITTY said she believed that to be correct. She suggested
that someone else from the Department of Law could clarify that
issue.
CHAIR DYSON said the bill broadens the scope and is probably
necessary to accomplish the sponsor's intent.
SENATOR WIELECHOWSKI asked if the bill would only affect five
people in Anchorage.
MS. WITTY deferred to Marty McGee, the Anchorage assessor, to
answer. She understood that the bill would have a relatively
minor effect.
SENATOR MEYER noted that the number was attained by the
assessor.
SENATOR WIELECHOWSKI asked if that was in only Anchorage.
SENATOR MEYER said that was correct.
9:21:41 AM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League,
testified on SB 73. She said she appreciates that the bill is
optional. She also wondered if this provision was already in
statute and she maintained that AS 29.45.050(s) was broader than
SB 73 in that it allows a municipality to partially or wholly
exempt someone from taxation. She thought most municipalities
did not have "wiggle room" to exempt anyone from property taxes.
SENATOR COGHILL asked if Ms. Wasserman heard the debate
regarding Proposition 7 in Anchorage.
MS. WASSERMAN said no.
SENATOR WIELECHOWSKI recalled that a similar bill passed
recently.
MS. WASSERMAN said Fairbanks North Star Borough passed an
ordinance to broaden exemptions several years ago.
SENATOR COGHILL said AS 29.45.050 was passed in 2008.
9:24:37 AM
SUSAN TOW, representing herself, testified in favor of including
same sex domestic partners in the bill. She related that she
served 22 years of honorable service in the United States Air
Force. She provided her military history and her personal
history. She noted the potential value of the benefits provided
by this legislation for her and her family. She detailed a
number one fear that families such as hers will not be taken
care of. She concluded that gay and lesbian military families
must be included in the provisions of SB 73.
CHAIR DYSON thanked Ms. Tow for her service.
9:27:51 AM
PAT CARLSON, Director of Assessing, Fairbanks North Star
Borough, testified about problems with SB 73. He noted that he
is also a Vietnam veteran with the Coast Guard. He described
significant changes between the optional exemptions adopted by
the Fairbanks North Star Borough and the mandatory provisions of
SB 73. He said version N, changes the impact from a relatively
small one to a much larger one by increasing the number who
could benefit. There is no age limit and no way for
municipalities to correct or modify the terms. He stated that
Fairbanks has 716 disabled vets under the mandatory exemption
program, which equals about $100 million in assessed value or
about $1.5 million in revenue exempted. There is the potential
for the new version of the bill to greatly increase that amount.
He maintained that SB 73 is not a local option and cannot be
modified without further legislative action. He called it an
unfunded mandate. He noted that he supports the concept, but not
the increase in local liability.
9:31:20 AM
SENATOR WIELECHOWSKI questioned Mr. Carlson's statement that the
statute is mandatory and has no age limit. He stated that the
widow or widower has to be 60 years or older. He read on page 1,
lines 10-14, "A municipality may by ordinance approved by the
voters grant the exemption under this subsection to the widow or
widower under 60 years of age." He asked why Mr. Carlson thought
the bill was mandatory.
MR. CARLSON said he was reading from the original bill. He
maintained that the bill is mandatory because it modifies AS
29.45.030(e), which is mandatory language. He said AS
29.45.050(s) is a local option.
SENATOR COGHILL suggested "adding an 'a' and a 'b' under
subsection (e)." He agreed that there is no age limit on "or to
a resident." He agreed with Mr. Carlson's second point and
suggested line 13 could be modified to clarify whether there is
an age limit.
CHAIR DYSON agreed that was a "good catch."
9:33:40 AM
STEVE VAN SANT, State Assessor, Division of Community and
Regional Affairs, Department of Commerce, Community and Economic
Development, answered questions related to SB 73. He agreed that
Mr. Carlson is correct. He understood the intent of the CS is to
remove the 60-years-of-age limitation because veterans are much
younger today. He noted a difference between the two statutes,
AS 29.45.030(e) and AS 29.45.050(s). The law under the latter
(s) is more pointed and directly aimed at those who have died in
the line of duty, while (e) is broader. He estimated that
previous to version N, SB 73 would have had a statewide effect
on taxes in less than a dozen cases; now he is not sure.
SENATOR WIELECHOWSKI requested further clarification.
MR. VAN SANT replied, as version N now reads, it could apply to
more people.
CHAIR DYSON asked for an approximation of how many it could
affect.
MR. VAN SANT thought it could apply to less than 50 people, but
he said it is difficult to guess.
9:36:51 AM
SENATOR COGHILL asked what would happen if someone died due to
illness while serving on active duty.
MR. VAN SANT said the original bill could have covered anyone
who had a ski accident and died. He noted he has not seen
version N to see if the language was tightened up.
CHAIR DYSON asked who decides who qualifies for the tax
exemption.
MR. VAN SANT said it is up to the local assessor's office. The
Alaska Association of Assessing Office would draft a standard so
all municipalities handle the issue the same way, as was done
with other exemption programs.
CHAIR DYSON asked if Mr. Van Sant dealt with the issue while he
was in Anchorage.
MR. VAN SANT said yes, regarding senior citizen exemptions.
9:39:16 AM
CHAIR DYSON commented that figuring out someone's age is easier
than determining if their death was caused directly or
indirectly by combat exposure.
SENATOR WIELECHOWSKI noted a zero fiscal note. He suggested if
50 people qualify for the exemption it would increase the amount
of property tax the state would have to pay.
MR. VAN SANT replied that it would still be a zero fiscal note
from the state's perspective because it is not funding the
program.
SENATOR WIELECHOWSKI asked if the state pays property taxes to
local municipalities.
MR. VAN SANT said no.
9:40:36 AM
JEFFREY MITTMAN, Executive Director, Alaska Civil Liberties
Union (ACLU) of Alaska, testified on SB 73. He noted he has
provided written testimony. He suggested a minor amendment to
protect same sex military families who qualify for this
exemption. He said every court has decided that it is
unconstitutional to exclude those families. He asked that the
committee make the amendment.
9:42:33 AM
SENATOR WIELECHOWSKI asked for clarification.
MR. MITTMAN reiterated that the widow or widower of same sex
couples who were married in other states would be excluded from
the tax exemption, so a change in language would be required.
CHAIR DYSON said the information is found on line 12, page 2.
SENATOR WIELECHOWSKI asked if a same sex marriage recognized in
another state is recognized in Alaska, should the couple move
here. He inquired if the language, as it is written, would cover
that.
MR. MITTMAN explained that the Alaska Constitution would prevent
recognition of same sex couples, so therefore the bill, as
currently written, would not apply to those couples. He gave an
example of a couple who were married at West Point and moved to
Alaska.
9:44:37 AM
SCOTT RUBY, Director, Division of Community and Regional
Affairs, Department of Commerce, Community, and Economic
Development, testified on SB 73. He echoed Mr. Van Sant's
comments.
SENATOR WIELECHOWSKI requested clarification of "active duty
service" and whether it applies to National Guard members, and
"injury or illness" definitions.
CHAIR DYSON added that Senator Coghill's question on page 1,
line 13, "or a resident" also needs clarification.
9:46:30 AM
At ease
9:47:34 AM
CHAIR DYSON said the committee would like to have their
questions answered by the Attorney General's Office and get a
legal opinion in writing. He asked Ms. Morledge if she could do
that by the next meeting.
MS. MORLEDGE said yes.
SENATOR WIELECHOWSKI read the language as "a member of the armed
forces of the United States who dies because of illness or
injuries suffered while serving on active duty service." He
asked if that includes suicide. He also requested more
information about proportionality.
SENATOR COGHILL said that under [AS 29.45.050] the
municipalities must include requirements to determine
eligibility. He suggested that language might be added.
CHAIR DYSON asked for clarification on "residency" and "age."
MS. MORLEDGE noted that one of the changes made in the CS was to
remove the 60-year age limit. The sponsor wanted the provision
to apply to any widow or widower.
CHAIR DYSON asked why that was not included in the first
section.
MS. MORLEDGE was not clear which section Chair Dyson was
referring to.
CHAIR DYSON held SB 73 in committee.