Legislature(1999 - 2000)
05/04/1999 08:08 AM House CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
May 4, 1999
8:08 a.m.
MEMBERS PRESENT
Representative Andrew Halcro, Co-Chairman
Representative John Harris, Co-Chairman
Representative Carl Morgan
Representative Lisa Murkowski
Representative Fred Dyson
Representative Reggie Joule
Representative Albert Kookesh
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
*HOUSE BILL NO. 215
"An Act making an appropriation to the Department of Community and
Regional Affairs for renters' tax equivalency payments; and
providing for an effective date."
- MOVED OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 23
Proposing amendments to the Constitution of the State of Alaska
relating to the community development fund, the permanent fund, and
the budget reserve fund.
- MOVED CSHJR 23(CRA) OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 215
SHORT TITLE: APPROP: RENTERS' EQUIV REBATE PROGRAM
SPONSOR(S): REPRESENTATIVES(S) BERKOWITZ, Croft, Grussendorf,
Cissna, Smalley, Moses, Kemplen, Brice, Kerttula
Jrn-Date Jrn-Page Action
4/01/99 (H) CRA AT 8:00 AM CAPITOL 124
4/28/99 1051 (H) READ THE FIRST TIME - REFERRAL(S)
4/28/99 1051 (H) CRA, FIN
5/04/99 (H) CRA AT 8:00 AM CAPITOL 124
BILL: HJR 23
SHORT TITLE: COMMUNITY DEVELOP FUND/PFD/BUD RESERVE
SPONSOR(S): REPRESENTATIVES(S) DAVIS
Jrn-Date Jrn-Page Action
3/05/99 366 (H) READ THE FIRST TIME - REFERRAL(S)
3/05/99 366 (H) CRA, JUDICIARY, FINANCE
4/08/99 (H) CRA AT 8:00 AM CAPITOL 124
4/08/99 (H) HEARD AND HELD
4/08/99 (H) MINUTE(CRA)
5/04/99 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
PATRICK FLYNN, Legislative Assistant
for Representative Berkowitz
Alaska State Legislature
Capitol Building, Room 404
Juneau, Alaska 99801
Telephone: (907) 465-4919
POSITION STATEMENT: Presented HB 215.
STEVE VAN SANT, State Assessor
Department of Community & Regional Affairs
333 West 4th, Suite 220
Anchorage, Alaska 99501
Telephone: (907) 269-4605
POSITION STATEMENT: Answered questions.
GERALD DORSHER, Appointed Legislative Officer
Veterans of Foreign Wars
PO Box 240003
Douglas, Alaska 99824
Telephone: (907) 364-3346
POSITION STATEMENT: Supported HB 215.
JANE DEMMERT, Executive Director
Alaska Commission on Aging
PO Box 110209
Juneau, Alaska 99811-0209
Telephone: (907) 465-4879
POSITION STATEMENT: Requested that serious consideration be given
to HB 215.
REPRESENTATIVE BERKOWITZ, Sponsor of HB 215
Alaska State Legislature
Capitol Building, Room 404
Juneau, Alaska 99801
Telephone: (907) 465-4919
POSITION STATEMENT: Testified as Sponsor of HB 215.
REPRESENTATIVE DAVIS
Alaska State Legislature
Capitol Building, Room 513
Juneau, Alaska 99801
Telephone: (907) 465-2693
POSITION STATEMENT: Testified as Sponsor of HJR 23.
KEVIN RITCHIE
Alaska Municipal League
217 Second Street
Juneau, Alaska
Telephone: (907) 586-1325
POSITION STATEMENT: Testified on HJR 23.
ACTION NARRATIVE
TAPE 99-29, SIDE A
Number 0001
CO-CHAIRMAN HALCRO called the House Community and Regional Affairs
Standing Committee meeting to order at 8:08 a.m. Members present
at the call to order were Representatives Halcro, Harris, Morgan,
Murkowski and Dyson. Representatives Joule and Kookesh were not
present.
HB 215 - APPROP: RENTERS' EQUIV REBATE PROGRAM
CO-CHAIRMAN HALCRO announced that the first order of business would
be HOUSE BILL NO. 215, "An Act making an appropriation to the
Department of Community and Regional Affairs for renters' tax
equivalency payments; and providing for an effective date."
Number 0050
PATRICK FLYNN, Legislative Assistant for Representative Berkowitz,
Alaska State Legislature, explained that HB 215 would simply
appropriate $300,000 in order to fund the renters' equivalency
rebate program at the same level as funded in the fiscal year (FY)
99. If this program was fully funded, it would cost the state over
$1 million. Mr. Flynn informed the committee that the funding for
this program has been zeroed out in the FY 2000 budget. He noted
that the committee should have a letter from the Disabled American
Veterans which states its support for this program. Mr. Flynn
recalled that the committee had recently heard legislation that
would make the senior and disabled veteran property tax exemption
an option for municipalities. Within HB 215, there is no local
option. Once the renters' rebate program is eliminated in the
state budget, the program is eliminated for good. This program
impacts people who live from month to month and from check to
check. Therefore, the modest sum of $277 per year makes a big
difference for these people.
REPRESENTATIVE MURKOWSKI inquired as to how many people take
advantage of the seniors renters' rebate versus the disabled
veterans renters' rebate.
MR. FLYNN said that he did not have those specific numbers.
However, Mr. Flynn believed that the program has roughly 1,200
participants in total. In further response to Representative
Murkowski, Mr. Flynn informed the committee that a disabled veteran
must be 50 percent disabled or more in order to qualify for this
program.
REPRESENTATIVE MURKOWSKI asked if a $300,000 appropriation would
reach the same number of those eligible for the program on a
reduced basis or are some eliminated.
MR. FLYNN stated that there would be a reduction in the benefit
level rather than the number of benefit participants.
Number 0403
STEVE VAN SANT, State Assessor, Department of Community & Regional
Affairs, testified via teleconference from Anchorage. He noted
that he was present for informational purposes as his office
handles the administration of the renters' rebate program.
REPRESENTATIVE MURKOWSKI inquired as to the breakdown of numbers
regarding how many participants are seniors and how many are
disabled veterans participating in the renters' rebate program.
MR. VAN SANT informed the committee that in 1998, there were 993
seniors and 112 disabled veterans.
REPRESENTATIVE MURKOWSKI asked what would a senior's income have to
be in order to qualify for the renters' rebate program.
MR. VAN SANT clarified that the renters' rebate program is not
needs based. This program is similar to the senior citizens'
property tax exemption program. In order to qualify for the
renters' rebate program, a senior citizen must be 65 years of age
or older and rent their home in a municipality that levies taxes.
For a disabled veteran, that individual must have a 50 percent
service-connected disability and live in a municipality that levies
taxes in order to qualify for the renters' rebate program.
CO-CHAIRMAN HALCRO inquired as to the number of applicants for this
program over the years since the funding has decreased.
MR. VAN SANT informed the committee of the number of participants
in the program in the following years: 1992 - 1,032; 1993 - 1,207;
1994 - 1,233; 1995 - 1,048; 1996 - 1,092; 1997 - 1,111; 1998 -
1,105. Typically, the applications are sent to all previous
filers, municipalities, Legislative Information Offices, senior
centers, and to the assessor's offices throughout the state.
CO-CHAIRMAN HALCRO asked if there is a geographic breakdown as to
where these folks are located.
MR. VAN SANT said that he did not have that information broken down
percentage wise. He informed the committee that out of the
$300,000 approximately over half is given to Anchorage. Almost
every community that has property taxes has participants in this
program.
Number 0728
GERALD DORSCHER, Appointed Legislative Officer, Veterans of Foreign
Wars, informed the committee that the renters' rebate program was
established in 1976. He requested the committee's support for
HB 215. Veterans are the backbone of America and Alaska. The
freedoms everyone enjoys were protected by the veterans. Seniors
work to build our communities and our state. Mr. Dorscher
emphasized that budget cuts should not be placed on the backs of
disabled veterans and senior citizens. He noted that the program
has dwindled from $820,000 in 1991 to $300,000 in 1998. As
mentioned earlier, the current year's budget zeros out the renters'
rebate program completely. Mr. Dorscher stressed that senior
citizens and disabled veterans serve and continue to serve the
country and their communities and are assets to the state.
CO-CHAIRMAN HARRIS said that $277 per person per year for an
individual on a $1,000 budget would not seem to make a huge
difference. He asked if there are other programs similar to this
which would help subsidize the cost of living for seniors and
disabled veterans.
MR. DORSCHER deferred to Mr. Van Sant.
CO-CHAIRMAN HARRIS asked if there are other programs available.
MR. DORSCHER stated, "Not in the veterans .... programs that are
available."
Number 1058
JANE DEMMERT, Executive Director, Alaska Commission on Aging, said
that this is a difficult year for the legislature, Alaskans and
particularly difficult for older Alaskans and disabled veterans.
When the constellation of legislation and the budget is reviewed,
the impact on almost all of the dimensions of economic stability
becomes apparent. These are dimensions with which older Alaskans
have planned their retirement. Although the renters' rebate
program is small, the program is significant for those who depend
upon the program. These are Alaskans for whom the program can make
a difference as to whether there is a roof over their head or not.
MS. DEMMERT explained that all Alaskans, but older Alaskans and
disabled veterans in particular, are facing the following: the
property tax exemption legislation for seniors and disabled
veterans, the renters' rebate program, legislation prorating
benefits, municipal assistance reductions, and cuts to the Alaska
Housing Finance Corporation budget. The Commission on Aging would
request the committee seriously consider HB 215 as well as the
interplay between the aforementioned legislation. Ms. Demmert
recommended that the larger picture be reviewed in order to create
a humanely developed approach to the budgets for the future.
REPRESENTATIVE MURKOWSKI agreed that the constellation or mix of
all this legislation is very significant. With regards to HB 215,
it is a drop in the bucket. Representative Murkowski said that Ms.
Demmert's point of the impact of all this legislation is well
taken.
There being no one else to testify, the public testimony on HB 215
was closed.
CO-CHAIRMAN HARRIS asked if HB 215 is the appropriate vehicle to
place the renters' rebate program funding back in the budget. He
indicated that this seems to be a slow way in which to return the
funding for this program in the budget.
Number 1470
REPRESENTATIVE BERKOWITZ, Sponsor of HB 215, Alaska State
Legislature, agreed that this is a slow way to return funds to the
budget, but when an item has been zeroed in both bodies that item
is gone. Therefore, there needs to be another vehicle to keep the
program alive for further consideration. Representative Berkowitz
noted that he had offered amendments on the House floor during the
budget debate in order to encourage the retention of this program.
He believed that this is a self-selective low income group since
these folks are renters on a fixed income. This legislation was
the only vehicle that Representative Berkowitz could think of to
help.
CO-CHAIRMAN HARRIS inquired as to the parameters of the program.
REPRESENTATIVE BERKOWITZ said that he did not know the exact
parameters of the program. Most of these individuals are living on
small fixed incomes of approximately $1,000 per month. Although
there are some taking advantage of this program who do not need to
do so, substantial numbers of people are depending on this program.
Representative Berkowitz said that he would be willing to
contemplate means testing, but it would probably be a cumbersome
bureaucracy given the small sums involved. In further response to
Co-Chairman Harris, Representative Berkowitz agreed that funding
the program at $300,000 was chosen because that was the funding
level last year.
CO-CHAIRMAN HALCRO reiterated the earlier question regarding
whether there are similar federal programs available should this
money not be restored to the budget.
REPRESENTATIVE BERKOWITZ said that he would continue his search for
alternative funding sources which he seemed to think should exist.
Number 1643
REPRESENTATIVE DYSON moved to report HB 215 out of committee with
individual recommendations. There being no objection, it was so
ordered.
The committee stood at-ease from 8:29 a.m. to 8:30 a.m.
HJR 23 - COMMUNITY DEVELOP FUND/PFD/BUD RESERVE
CO-CHAIRMAN HALCRO announced that the final order of business
before the committee would be HOUSE JOINT RESOLUTION NO. 23,
Proposing amendments to the Constitution of the State of Alaska
relating to the community development fund, the permanent fund, and
the budget reserve fund.
Number 1681
REPRESENTATIVE DAVIS, Sponsor of HJR 23, Alaska State Legislature,
recalled that three questions were brought forth at the last
meeting which have been addressed in a memorandum. Representative
Davis believed that HJR 23 would develop into a revenue source for
local municipalities to deal with many of the funding schemes put
in place by past legislatures. People have come to depend on those
programs. This legislation goes a long way in correcting and
continuing valuable programs that would be subject to decreasing
funding. Representative Davis pointed out that the concerns
regarding the eligibility of these funds is addressed on page 1,
lines 14-16.
CO-CHAIRMAN HARRIS moved to adopt CSHJR 23, Version LS0573\D, Cook,
4/8/99, as the working document before the committee. There being
no objection, it was so ordered.
REPRESENTATIVE DAVIS pointed out that the language incorporated on
page 1, lines 14-16 of the proposed CS should be broad enough to
accommodate the formation of additional municipalities and other
municipalities under statute. With regard to the question of how
the fund will be invested and who will administer it,
Representative Davis said that initially the Department of Revenue
will invest and administer the fund. It is possible that in the
future the legislature could establish an investment group similar
to the Permanent Fund Corporation. Representative Davis emphasized
that this resolution merely puts the question to the voters as to
whether this fund should be created, no statute is established.
Therefore, there is much leeway for future legislatures to develop
the statute. With regard to the distribution of the funds,
Representative Davis said it was his intention that the funds be
distributed with no strings attached. Here again, this will be
left up to future legislatures.
CO-CHAIRMAN HALCRO understood that when the permanent fund was
developed, such investment and distribution questions were
determined after the fund was established. He asked if that was
Representative Davis' understanding as well.
REPRESENTATIVE DAVIS replied yes. The constitutional amendment for
the permanent fund only asked if a savings account should be
established. How the earnings would be distributed or spent was
not addressed.
REPRESENTATIVE MURKOWSKI asked if the community development fund
would mesh with any long-term fiscal plan.
REPRESENTATIVE DAVIS said that he believed it would. This fund is
the answer to the elimination of municipal assistance and revenue
sharing which is the intent. He noted that this legislation was
offered during the last legislature. As this fund grows, the state
would be able to transfer many of its functions and expenditures to
municipalities.
REPRESENTATIVE MURKOWSKI noted that former Governor Hickel had
discussed an individual community permanent fund. How would this
fund relate to the former Governor Hickel's idea?
REPRESENTATIVE DAVIS stated that he was not exactly sure, but the
idea for this fund came from the former Governor Hickel's idea.
There are definitely differences between the two proposals. He
indicated that Representative Moses may have a similar proposal as
well.
Number 2205
KEVIN RITCHIE, Alaska Municipal League (AML), noted that the
committee should have two brown sheets from the AML. He said that
this legislation is a way to eliminate the general funds for state
revenue sharing and potentially capital matching grants. This is
part of a long-range fiscal plan. The public needs to know that
those services most important to them, roads, police, fire, et
cetera, are things that can continue. Therefore, this would be
important in selling a long-range fiscal plan to the public. Mr.
Ritchie stated that the legislature will have to answer the
question, "Does this somehow hurt the state budget?" He pointed
out that the "Alaska Plan" and the community development fund are
endowments. A separate endowment of $750 million would be set
aside for the community development fund. The AML feels that would
further the state's goals to transition programs to municipalities.
He emphasized the importance of those municipalities being able to
accept those programs. Furthermore, municipalities would need to
be assured that there will be a long-term source of funding that
will not be reduced in one year, two years, or three years. He
indicated that this fund would be a way to achieve such.
MR. RITCHIE referred the committee to the example listed on the
bottom of the first page of the AML document. The example points
out that currently there are separate state and local road
maintenance shops. Local governments in some communities would not
be able to accept, consolidate and pay for road maintenance.
Historically, the state has only been able to commit funds for road
maintenance for one year. Mr. Ritchie said that having a fund like
the proposed community development fund would allow a long-term
plan between state and local governments. For that reason, the AML
supports this legislation. Mr. Ritchie noted that page 2 of the
AML document is an example of what could comprise a long-range
fiscal plan. By doing this, municipalities would not be after a
windfall of funds from the state. As funding increases, so would
the level of services provided by municipalities. As funding
increases, there would also potentially be a decrease in the level
of service provided by the state. That is why page 2 of the AML
document has $0 indicating that there would not be a net revenue
increase for local governments.
CO-CHAIRMAN HARRIS referred to page 2 of the AML document which has
a heading, "Eliminate $68 million State GF to:". If the state
eliminates some areas, how would the municipality eliminate those
as well because those figures are bracketed.
MR. RITCHIE explained that it would take two years for the
community development fund to create revenue. Therefore, the
elimination of municipal revenue sharing is not recommended for
this year. This would be a transition from revenue sharing to a
community development fund. He pointed out that the revenue in
brackets which would be eliminated for revenue sharing and
municipal capital matching grants could be replaced with a gas tax
and the community development fund. He reiterated that this is
just an example and there are many options.
CO-CHAIRMAN HARRIS asked if it was the intent to include education
funding.
MR. RITCHIE replied no. Currently, education funding is
approximately $800 million. Mr. Ritchie said that it would be
difficult to imagine placing enough money in the community
development fund to replace that type of state funding. He
reiterated that this is just an example and there are many options.
CO-CHAIRMAN HALCRO asked if there was anyone who would like to
testify on HJR 23. There being no one, the public testimony was
closed.
Number 2600
CO-CHAIRMAN HARRIS moved to report CSHJR 23, Version LS0573\D,
Cook, 4/8/99, out of committee with individual recommendations and
the accompanying two fiscal notes. There being no objection, it
was so ordered.
ADJOURNMENT
There being no further business before the committee, the House
Community & Regional Affairs Standing Committee meeting was
adjourned at 8:49 a.m.
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