Legislature(1993 - 1994)
02/09/1993 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 9, 1993
1:00 p.m.
MEMBERS PRESENT
Representative Harley Olberg, Chairman
Representative Jerry Sanders, Vice-Chair
Representative Con Bunde
Representative John Davies
Representative Cynthia Toohey
Representative Ed Willis
Representative Bill Williams
MEMBERS ABSENT
None
OTHER HOUSE MEMBERS PRESENT
Representative Tom Brice
COMMITTEE CALENDAR
*HB 66: "An Act relating to municipal property tax
exemptions for certain residences and to property
tax equivalency payments for certain residents;
and providing for an effective date."
CS PASSED FROM COMMITTEE WITH INDIVIDUAL
RECOMMENDATIONS
*HB 30: "An Act amending the definition of 'municipality'
for purposes of the human services community
matching grant program."
CS PASSED FROM COMMITTEE WITH INDIVIDUAL
RECOMMENDATIONS
(* first public hearing)
WITNESS REGISTER
Bruce Geraghty, Deputy Commissioner
Department of Community and Regional Affairs
P.O. Box 112100
Juneau, AK 99811
Phone: 465-4700
POSITION STATEMENT: Supported HB 66
Duncan Monroe, Administrative Assistant
Property Tax Exemption Program
Department of Community and Regional Affairs
P.O. Box 112100
Juneau, AK 99811
Phone: 465-4787
POSITION STATEMENT: Supported HB 66
Kent Swisher, Executive Director
Alaska Municipal League
217 Second Street, Suite 200
Juneau, AK 99801
Phone: 586-1325
POSITION STATEMENT: Opposed HB 66
Joe Alter, Chairperson
American Association of Retired Persons
P.O. Box 20304
Juneau, AK 99802
Phone: 586-6680
POSITION STATEMENT: Opposed HB 66
Barbara Blasco, Assistant Attorney General
Department of Law
P.O. Box 110300
Juneau, AK 99811
Phone: 465-3600
POSITION STATEMENT: Provided legal expertise on the proposed
amendment to HB 66
Representative Tom Brice
Court Building, Room 605
Juneau Alaska 99811-1182
Phone: 465-3466
POSITION STATEMENT: Prime Sponsor, HB 30
PREVIOUS ACTION
BILL: HB 66
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTIONS
BILL VERSION:
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act relating to municipal property tax exemptions
for certain residences and to property tax equivalency
payments for certain residents; and providing for an
effective date."
JRN-DATE JRN-PG ACTION
01/15/93 84 (H) READ THE FIRST TIME/REFERRAL(S)
01/15/93 84 (H) CRA, HEALTH, EDUCATION & SS,
FINANCE
01/15/93 84 (H) -3 ZERO FNS (2-DCRA, ADM)
1/15/93
01/15/93 84 (H) GOVERNOR'S TRANSMITTAL LETTER
02/09/93 (H) CRA AT 01:00 PM CAPITOL 124
BILL: HB 30
SHORT TITLE: HUMAN SERVICES MATCHING GRANTS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) BRICE,Sitton,Therriault,
Davies, James
TITLE: "An Act amending the definition of `municipality' for
purposes of the human services community matching grant
program."
JRN-DATE JRN-PG ACTION
01/04/93 32 (H) PREFILE RELEASED
01/11/93 32 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 32 (H) CRA, HES, FINANCE
01/15/93 92 (H) COSPONSOR(S): DAVIES, JAMES
02/09/93 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 93-4, SIDE A
Number 000
CHAIRMAN HARLEY OLBERG called the meeting to order at 1:09
p.m. He noted for the record that Representatives Sanders,
Toohey, Williams, Davies and Willis were present.
HB 66: MUNICIPAL PROPERTY TAX EXEMPTIONS
Number 030
BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY
AND REGIONAL AFFAIRS (DCRA), gave a synopsis of HB 66 and
read for the record the third paragraph of the governor's
transmittal letter dated January 15, 1993. (A copy of this
letter may be found in the House Community and Regional
Affairs Committee Room, Capitol #110, and after the
adjournment of the second session of the 18th Alaska State
Legislature, in the Legislative Reference Library.) He also
favorably acknowledged the amendment proposed by the
Attorney General's Office.
(Representative Bunde joined the committee at 1:10 p.m.)
REPRESENTATIVE ED WILLIS questioned the hardship effects of
Section 5 of HB 66 which states, "This Act is retroactive to
January 1, 1993."
MR. GERAGHTY replied, "...There is no money in the budget to
reimburse municipalities for this program at this time." He
added the municipalities he was familiar with had indicated
they would continue granting exemptions this year (1993).
Number 125
REPRESENTATIVE CON BUNDE gave Sitka as an example noting
that a $500,000 shortfall could not be absorbed in Sitka's
budget. He supported Representative Willis' concerns
regarding retroactive taxes.
CHAIRMAN OLBERG suggested decisions be made at the community
level.
MR. GERAGHTY reminded the committee property tax exemption
funding was currently only at 20 percent. "There's short
funding now of 80 percent," said Mr. Geraghty.
REPRESENTATIVE WILLIS inquired about the time frame the
municipalities had to implement HB 66 if it passed.
DUNCAN MONROE, ADMINISTRATIVE ASSISTANT, DCRA, pointed out
the municipalities in tax year 1993 would "only be losing 20
percent...then by tax year '94 they can implement their own
ordinances exempting none or all of the assessed value."
Number 214
REPRESENTATIVE WILLIS asked what determined the percentage
rendered by the DCRA in this program.
MR. GERAGHTY replied that it was prorated based on what the
legislature appropriated to the program. He pointed out
since 1985, the program had been increasingly short funded.
REPRESENTATIVE CYNTHIA TOOHEY believed the municipalities
would take indigent senior citizens into consideration.
REPRESENTATIVE BILL WILLIAMS said, "We do need to get
spending under control (but) ...the seniors, all of them in
Ketchikan probably do not understand what's happening."
REPRESENTATIVE BUNDE shared Representative William's
concerns and added when HB 66 was referred to the House HESS
committee, of which he was the co-chair, a more "user-
friendly" committee substitute would be developed.
Number 334
KENT SWISHER, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE,
testified against HB 66 in its current form. He indicated
the league would prefer that the state maintain the tax
exemption program: "We feel the State has the greatest
ability to support the kind of tax forgiveness that we're
talking about for senior citizens and disabled veterans and
the state can make that program work in a way that's fair
and equally applicable to everyone who lives here."
MR. SWISHER explained the procedures regarding this program
and expressed concern on the retroactivity of HB 66. "A
great many senior citizens who file as of January 15th have
every reason to expect that the system is working in the
normal way and it's not if the bill is passed...the rules
are going to change," he said.
Number 398
REPRESENTATIVE TOOHEY explained this was not the issue
before the committee as she saw it. She said, "We are no
longer mandating or funding a mandate."
CHAIRMAN OLBERG said the issue was whether or not local
municipalities were going to determine if tax exemptions
should be granted. "It's obvious that funding has declined
to 20 percent and now it is zero. ...we are talking about
taking a state mandated program and turning it into a local
option," he said.
REPRESENTATIVE JERRY SANDERS pointed out the difference HB
66 would make was only 20 percent.
MR. SWISHER informed that the statutory commitment was to
fund the program 100 percent and added, "You do need to
understand that we cannot mechanically, by the time this
bill becomes law place into effect an exemption in 1993,
even if we wanted to. There isn't simply going to be time
given how the process works. So you are, in fact, entirely
repealing that exemption. Now that's fine, that's our
second preference. Our first preference would be that you
fund it. If the State doesn't want to fund it, then the
state should outright repeal it."
MR. SWISHER added further, "If it goes away we reinstitute
it by option, if we don't reinstitute it by option, it's
gone."
CHAIRMAN OLBERG said, "The procedures are all in place, its
up to the municipalities to eliminate them or not."
MR. SWISHER stressed the time limitations and said, " Many
of us (municipalities) would want to pose this as a
referendum to the public."
Number 487
REPRESENTATIVE JOHN DAVIES pointed out if HB 66 passed, the
residents of Fairbanks would have to vote on this issue
since their local property taxes were capped, "in order to
cover the additional $300,000 plus" at 20 percent to
maintain this program.
REPRESENTATIVE TOOHEY disputed the validity of the previous
comment and said, "We're discussing relieving the state of
the responsibility... We don't have the money to do this,
it's very clear."
REPRESENTATIVE WILLIS inquired, "If we pass this bill as it
is, we would in effect repeal ... and if nothing happened at
the local level, the local level didn't by ordinance reenact
this, then it's gone."
MR. SWISHER reiterated many municipalities would want to
take that to the local public in terms of a referendum and
pointed out the time limits. He said, "I think maybe you
ought to hold the senior citizen harmless for just a little
bit longer while that decision gets made."
Number 542
JOE ALTER, CHAIRPERSON, AMERICAN ASSOCIATION OF RETIRED
PERSONS, testified against HB 66. He suggested tax reform
in Alaska was long overdue. He said, "I would see this bill
as an option to allow even further discrepancies in equal
treatment under the law, so far as taxation of senior
citizens is concerned. At the same time, I see a very
serious problem in this 'last man out' approach to who pays
the bill," he added.
MR. ALTER continued, "Our 40,000 member association is
heartily in favor of tax reform, one which gives equal
treatment under the law. I would not attempt to tell you
exactly what that tax reform should be... It's a matter of
public policy as to whether you take that reform out on the
backs of a few senior citizens or whether you take it out on
the public at large.
MR. ALTER continued further, "We have progressed from the
'old poor house' system of the 'lower 48' to a model system
in Alaska which has encouraged senior citizens to retire in
Alaska. ...It's a system which allows a person to stay in
their own home as long as possible, which is the cheapest
place for a senior to be. Therefore, I speak in opposition
to any program that would tend to take this privilege away.
It takes the dignity away. It increases the cost to society
and I would add that this is a billion dollar industry which
most state courts would be threatened if you were to pass
this legislation."
Number 584
MR. ALTER said, "It would not only threaten the social
structure of Alaska with these thousands of volunteers that
help your tourism business and so forth. Florida wants
them. It's a post office mailbox industry which can move.
They can take their portable income wherever they wish.
This industry has been evaluated for Alaska to be about a
billion dollar industry..."
Number 615
REPRESENTATIVE BUNDE refuted the previous testimony. With
regard to taxes, he said, "If you use services you have to
pay for them."
REPRESENTATIVE TOOHEY pointed out there was a lot of fraud
in relation to the senior citizen tax exemption program.
JOE ALTER said there would always be people who try to beat
the system and expounded again on his position.
Number 668
BARBARA BLASCO, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, testified on behalf of an amendment brought forth by
the Attorney General's Office. She gave a detailed and
mechanical explanation of the amendments.
REPRESENTATIVE DAVIES moved that the amendment be adopted.
REPRESENTATIVE OLBERG asked if it was possible to amend HB
66 further to add "a sunset clause to give some lead time to
this process" and change the effective date to January 1,
1994.
TAPE 93-4, SIDE B
Number 000
MR. MONROE reiterated the current lack of funding for the
program.
REPRESENTATIVE BUNDE described his plan for a committee
substitute for HB 66 when it was referred to the House HESS
committee.
REPRESENTATIVE OLBERG positively acknowledged Representative
Bunde's plan.
REPRESENTATIVE WILLIS asked if any veterans' organizations
had been notified of the hearing.
REPRESENTATIVE OLBERG said not to his knowledge.
REPRESENTATIVE DAVIES moved to amend Section 5 of HB 66 to
read January 1, 1994.
REPRESENTATIVE TOOHEY objected to the amendment due to the
lack of funding.
Number 090
REPRESENTATIVE DAVIES replied by comparing the Governor's
Longevity Bonus phase out plan and how that program was
scheduled in advance to phase out at a future date, not
retroactively. He said, "I think its important that we give
not only the individual senior citizens some time to react
to this kind of thing, I think we need to give some time to
the municipalities who want to consider how to deal with
this sometime also...
REPRESENTATIVE DAVIES continued, "...[I]f in fact the
longevity bonus gets phased out and this program gets
eliminated, we have really taken some major whacks at one
portion of our population. ...The property tax exemption
really gets perhaps closer to the original intent of the
Longevity Bonus in its present incarnation than the
longevity bonus now does..."
REPRESENTATIVE BUNDE pointed out a "significant" fiscal note
would be needed for the proposed amendment.
REPRESENTATIVE DAVIES said it would be necessary to work
with the governor and the legislature to acquire funding for
this fiscal year.
Number 200
CHAIRMAN OLBERG requested a roll call vote be taken on the
motion to adopt the second amendment to HB 66.
Representatives Davies and Willis voted for the adoption of
the second amendment. Representatives Bunde, Sanders,
Toohey, Williams and Olberg voted against the adoption of
the second amendment. The MOTION FAILED.
REPRESENTATIVE SANDERS moved that HB 66, as amended, be
moved to the next committee of referral.
REPRESENTATIVE WILLIS objected and asked that there be
further discussion. He stated for the record that he was a
senior and recognized a potential conflict of interest.
REPRESENTATIVE WILLIS expounded on his objection by pointing
out the tax exemption program had been in effect prior to
the abundance of oil money. He said, "By doing this, the
evidence that I have read and substantiated by Mr. Alter is
that the seniors in this state bring in about a billion
dollars... because of this we have to look at it in the
context of an industry."
Number 292
REPRESENTATIVE WILLIAMS restated his objection. "I still
don't feel we have sat down long enough at the table and I
want everybody to understand that we should be trying to get
spending under control before we start cutting services.
...the people out in the community feel it first," he said.
REPRESENTATIVE DAVIES concurred with Representative Williams
and repeated his reasoning.
REPRESENTATIVE TOOHEY reiterated that the municipalities
would responsibly take care of the indigent elderly.
CHAIRMAN OLBERG requested a roll call on the motion to move
HB 66, as amended, out of committee with individual
recommendations. Representatives Willis, Davies and
Williams voted against the motion. Representatives Bunde,
Sanders, Toohey and Olberg voted to move HB 66 out of
committee. The MOTION CARRIED.
Number 355
CHAIRMAN OLBERG called an at ease at 2:10 p.m.
HB 30: HUMAN SERVICES MATCHING GRANTS
CHAIRMAN OLBERG reconvened the meeting at 2:21 p.m. with all
members except Representative Williams present and took up
HB 30.
REPRESENTATIVE TOM BRICE, PRIME SPONSOR of HB 30, stated the
bill had been introduced to facilitate eligibility of Human
Services Community Grants by the Fairbanks North Star
Borough in lieu of the City of Fairbanks. He said, "The CS
has an added section which would basically disallow 'double-
dipping' of funds. So in other words, the City of Fairbanks
could not participate in the program at the same time as the
Fairbanks North Star Borough."
REPRESENTATIVE DAVIES moved that the committee adopt the CS
provided by the sponsor. There being no objections, CS HB
30 was ADOPTED.
Number 422
REPRESENTATIVE DAVIES gave his support for CS HB 30 and
expounded on his experience as a North Star Borough
assemblyman.
(Representative Williams rejoined the committee at 2:27
p.m.)
REPRESENTATIVE TOOHEY asked about the effect of CS HB 30 on
the City of Fairbanks.
REPRESENTATIVE BRICE said the Fairbanks and North Pole City
Councils passed resolutions in support of HB 30.
REPRESENTATIVE BUNDE asked if the North Star Borough was
more willing to provide social services than the City of
Fairbanks.
REPRESENTATIVE BRICE replied in the affirmative and added,
"The services provided by City non-profits are area-wide and
borough-wide so it's probably more appropriate that the
borough be the entity administering the grants."
REPRESENTATIVE DAVIES moved that CS HB 30 be moved out of
committee with individual recommendations. Without
objections, IT WAS SO MOVED.
ADJOURNMENT
CHAIRMAN OLBERG adjourned the meeting at 2:29 p.m.
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