Legislature(2007 - 2008)BARNES 124
02/28/2008 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB356 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 356 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 28, 2008
8:19 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Kurt Olson
COMMITTEE CALENDAR
HOUSE BILL NO. 356
"An Act relating to an exemption from municipal property taxes
for certain real property that is exempt from levy and
collection of real property taxes when conveyed by the federal
government to implement the Alaska Native Claims Settlement Act
or when conveyed under a land exchange authorized by that Act
involving land or an interest in land that is made exempt from
local property taxes by that Act; and providing for an effective
date."
- MOVED CSHB 356(CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 356
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTION
SPONSOR(s): REPRESENTATIVE(s) STOLTZE
02/06/08 (H) READ THE FIRST TIME - REFERRALS
02/06/08 (H) CRA, FIN
02/28/08 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 356.
STEVE VAN SANT, State Assessor
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 356, answered
questions.
JIM ARNESEN, Corporate Lands and Regulatory Manager
Eklutna, Inc. Board of Directors
Eagle River, Alaska
POSITION STATEMENT: Testified on HB 356.
CURTIS MCQUEEN, Chief Executive Officer
Eklutna, Inc.
Eagle River, Alaska
POSITION STATEMENT: Testified in support of HB 356.
BARBARA DONATELLI, Senior Vice President
Administration and Government Relations
Cook Inlet Region, Inc. (CIRI)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 356.
ACTION NARRATIVE
CO-CHAIR ANNA FAIRCLOUGH called the House Community and Regional
Affairs Standing Committee meeting to order at 8:19:31 AM.
Representatives Fairclough, LeDoux, Cissna, and Salmon were
present at the call to order.
HB 356-MUNICIPAL PROPERTY TAX EXEMPTION
8:19:54 AM
CO-CHAIR FAIRCLOUGH announced that the only order of business
would be HOUSE BILL NO. 356, "An Act relating to an exemption
from municipal property taxes for certain real property that is
exempt from levy and collection of real property taxes when
conveyed by the federal government to implement the Alaska
Native Claims Settlement Act or when conveyed under a land
exchange authorized by that Act involving land or an interest in
land that is made exempt from local property taxes by that Act;
and providing for an effective date."
8:20:20 AM
REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, speaking
as the sponsor of HB 356, explained that he introduced HB 356
after being approached by Eklutna, Inc., which is the largest
private land holder in the Municipality of Anchorage. He
directed attention to the fiscal note analysis, which read
[original punctuation provided]:
This legislation would expand the list of property
exempt from municipal taxation to include certain real
property of native corporations conveyed under the
Alaska Native Claims Settlement Act (ANCSA) when it is
exchanged with a municipality and not leased or
developed.
While this legislation has no fiscal impact on the
operations of the division, it would have the
potential of creating a positive economic impact on
local municipalities. It would allow municipalities
and native corporations to exchange lands without
immediate property tax consequences. This exchange of
lands could expedite development of lands by the
native corporations in exchange for lands which the
municipality may need for public uses, such as
recreational uses and public schools.
REPRESENTATIVE STOLTZE highlighted that Eklutna, Inc., owns the
sites of two schools in the area and leases the land to the
Municipality of Anchorage for $1 a year. Land trades are
important as illustrated by the Mount Baldy land swap. However,
Eklutna, Inc., ends up trading nontaxable property for taxable
property. Eklutna, Inc., he related, isn't interested in
selling and developing all of its land, but rather is a small
cooperation looking to the future. The legislation allows the
Title 29 exemption for something that local governments want to
do.
8:26:05 AM
CO-CHAIR LEDOUX asked if under current law a municipality would
be required to tax the land for which a Native organization
swapped its land.
REPRESENTATIVE STOLTZE replied yes.
CO-CHAIR LEDOUX surmised then that the municipality doesn't have
a choice with regard to whether to tax the property the Native
organization receives in a land exchange.
REPRESENTATIVE STOLTZE clarified that the municipality has the
choice with regard to accepting the land trade, but exemptions
to tax have to be set in statute under Title 29.
8:28:43 AM
STEVE VAN SANT, State Assessor, Department of Commerce,
Community, & Economic Development, explained that under current
law unless land is given under the Alaska Native Claims
Settlement Act (ANCSA), it can't be exempt. Therefore, any land
traded to ANCSA corporations would be taxable. This legislation
is necessary and clarifies matters for municipalities, the
department, and Native organizations. He then explained that
there are no fiscal ramifications because municipalities
currently don't pay taxes on their properties and Native
corporations don't pay taxes on undeveloped property or property
that's not leased. Therefore, under HB 356 if the property is
undeveloped or not leased at the time of the trade, the
exemption remains.
8:30:54 AM
JIM ARNESEN, Corporate Lands and Regulatory Manager, Eklutna,
Inc., Board of Directors, characterized this legislation as an
issue of fairness. State law needs to catch up with federal
law, he said. Native corporations have been frustrated for many
years in these situations in which it tries to do something good
for a community by trading lands with a municipality, but are
stuck with the tax bill. Eklutna, Inc., in particular, has
faced this situation due to its location. He related that
Eklutna, Inc., has had various entities approach the corporation
desiring to trade land. It doesn't make sense for the
corporation to trade undeveloped lands on which the corporation
doesn't pay taxes for undeveloped lands on which it will have to
pay taxes. The Mount Baldy exchange is a prime example of the
aforementioned.
8:33:35 AM
CURTIS MCQUEEN, Chief Executive Officer, Eklutna, Inc., related
that Eklutna, Inc., has 167 shareholders, the majority of which
live in Alaska, in particular in the Municipality of Anchorage.
He noted that Eklutna owns the land on which five schools sit
and only charges $10 a year for those. The aforementioned
illustrates the commitment of the shareholders to education and
growing the community. Eklutna, Inc., is an environmentally
friendly and pro-recreation group as illustrated with the
participation in the Mount Baldy land exchange. Shareholders
have become concerned because the corporation is being solicited
for more land trades as urban sprawl occurs. In fact, there is
a new housing development at which a school sight has been set
aside. The school district has asked if Eklutna, Inc., would be
willing to do a land exchange in that situation. Due to the
current situation in which the land that Eklutna, Inc., would
take would be taxable, the corporation can't discuss it. Mr.
McQueen stated that Eklutna, Inc., is highly supportive of HB
356.
8:37:27 AM
REPRESENTATIVE SALMON asked if the current law applies to the
federal government.
MR. MCQUEEN explained that currently ANCSA land trades with the
federal and state government are tax exempt, it's only with the
municipality that it becomes taxable. He echoed earlier
information that Eklutna, Inc., is the largest land holder in
the Municipality of Anchorage, and added that the corporation is
also a significant land owner in the Matanuska-Susitna Borough.
In fact, Eklutna, Inc., has just completed its final ANCSA
conveyance selections for an additional 67,000 acres in the
Matanuska-Susitna Borough. The Matanuska-Susitna Borough has
indicated that it may be interested in some future land trades
with Eklutna, Inc.
8:38:57 AM
BARBARA DONATELLI, Senior Vice President, Administration and
Government Relations, Cook Inlet Region, Inc. (CIRI), reminded
the committee that CIRI is 1 of the 12 Alaska Native regional
corporations created by an Act of Congress in 1971. Ms.
Donatelli related CIRI's strong support for HB 356. She noted
that CIRI is a large holder of ANCSA lands in the Anchorage
vicinity. The lack of an express provision such as HB 356
stands as a substantial barrier to any land exchange.
8:41:12 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, closed the public hearing.
8:41:27 AM
MR. VAN SANT related his impression that the Municipality of
Anchorage assessor is currently working on a land trade with
Eklutna, Inc., and thus suggested that perhaps the legislation
should be made retroactive to January 1, 2008. The
aforementioned would accommodate any land exchange that would
occur this year.
8:42:06 AM
REPRESENTATIVE STOLTZE said he is amenable to such a change, if
it's the will of the committee.
8:43:12 AM
CO-CHAIR FAIRCLOUGH inquired as to how the proposed
retroactivity would impact the current land exchange with
Eklutna, Inc.
MR. MCQUEEN said that such a change would help tremendously. He
informed the committee that the [proposed land exchange] went
before voters in 2006, state funding was appropriated in 2007,
and then work began with regard to all the details. The mayor
signed the official paperwork, but Eklutna, Inc., hasn't signed
the final paperwork for this transaction. This land exchange is
going through the planning and zoning process at the moment. To
make this legislation retroactive would result in the Mount
Baldy land exchange not being a taxable event.
MR. ARNESEN related his support of the proposed retroactivity.
8:45:14 AM
CO-CHAIR LEDOUX moved that the committee adopt Conceptual
Amendment 1, as follows:
Page 4, line 1;
Delete "2009"
Insert "2008"
There being no objection, Conceptual Amendment 1 was adopted.
8:45:58 AM
CO-CHAIR LEDOUX moved to report HB 356, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 356(CRA) was
reported from the House Community and Regional Affairs Standing
Committee.
8:46:24 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:46 a.m.
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