04/22/2025 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         April 22, 2025                                                                                         
                           8:05 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Rebecca Himschoot, Co-Chair                                                                                      
Representative Donna Mears, Co-Chair                                                                                            
Representative Carolyn Hall                                                                                                     
Representative Ky Holland                                                                                                       
Representative Mike Prax                                                                                                        
Representative Justin Ruffridge                                                                                                 
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 13                                                                                        
"An Act  relating to optional  municipal property  tax exemptions                                                               
for certain  long-term rental units,  certain mobile  home parks,                                                               
real property rented to low-income  families, real property owned                                                               
and occupied  as a  permanent place of  abode, and  real property                                                               
owned by first-time homebuyers."                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB  13                                                                                                                  
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTIONS                                                                                  
SPONSOR(s): REPRESENTATIVE(s) GRAY                                                                                              
                                                                                                                                
01/22/25       (H)       PREFILE RELEASED 1/10/25                                                                               

01/22/25       (H)       READ THE FIRST TIME - REFERRALS                                                                        

01/22/25       (H)       CRA, FIN                                                                                               
03/10/25       (H)       SPONSOR SUBSTITUTE INTRODUCED                                                                          
03/10/25       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/25       (H)       CRA, FIN                                                                                               
03/25/25       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/25/25       (H)       Heard & Held                                                                                           
03/25/25       (H)       MINUTE(CRA)                                                                                            
03/27/25       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/27/25       (H)       Heard & Held                                                                                           
03/27/25       (H)       MINUTE(CRA)                                                                                            
04/10/25       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/10/25       (H)       Heard & Held                                                                                           
04/10/25       (H)       MINUTE(CRA)                                                                                            
04/15/25       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/15/25       (H)       -- MEETING CANCELED --                                                                                 
04/22/25       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KYLE JOHANSEN, Staff                                                                                                            
Representative Andrew Gray                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Gave opening remarks on  CSSSHB 13, Version                                                             
T, on behalf of Representative Gray, prime sponsor.                                                                             
                                                                                                                                
ANDREW DUNMIRE, Legislative Counsel                                                                                             
Legislative Legal Division                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Answered questions  during the  hearing on                                                             
CSSSHB 13, Version T.                                                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:05:47 AM                                                                                                                    
                                                                                                                                
CHAIR REBECCA  HIMSCHOOT called the House  Community and Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:05  a.m.                                                               
Representatives Hall, Holland, Himschoot,  and Mears were present                                                               
at the call to order.   Representative Ruffridge and Prax arrived                                                               
as the meeting was in progress.                                                                                                 
                                                                                                                                
            HB  13-MUNICIPAL PROPERTY TAX EXEMPTIONS                                                                        
                                                                                                                                
8:06:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT announced  that the  first order  of business                                                               
would  be SPONSOR  SUBSTITUTE  FOR  HOUSE BILL  NO.  13, "An  Act                                                               
relating  to  optional  municipal  property  tax  exemptions  for                                                               
certain long-term  rental units, certain mobile  home parks, real                                                               
property rented  to low-income families, real  property owned and                                                               
occupied as a  permanent place of abode, and  real property owned                                                               
by  first-time homebuyers."   [Before  the committee,  adopted as                                                               
the  working  document on  4/10/25,  was  the proposed  committee                                                               
substitute  (CS)  for  SSHB  13,  Version  34-LS0194\T,  Dunmire,                                                               
4/8/25 ("Version T").]                                                                                                          
                                                                                                                                
8:06:55 AM                                                                                                                    
                                                                                                                                
KYLE JOHANSEN,  Staff, Representative  Andrew Gray,  Alaska State                                                               
Legislature,  on behalf  of Representative  Gray, prime  sponsor,                                                               
gave opening  remarks on Version  T.   He said the  bill contains                                                               
five optional  municipal tax exemptions  for owners  that convert                                                               
from short-term  rental to long-term rental;  certain mobile home                                                               
park  renovation   projects;  properties  rented   to  low-income                                                               
families; people who  reside in owner occupied  homes; and owner-                                                               
occupied first-time home  buyers.  In response  to concerns about                                                               
the bill,  he reminded members  that ordinances are passed  by an                                                               
elected  body;  additionally, AS  29.26.100  ensures  that if  an                                                               
ordinance  were passed,  the  voters could  repeal  it through  a                                                               
referendum.                                                                                                                     
                                                                                                                                
8:11:07 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT  asked whether voters in  municipalities could                                                               
approve a property  tax exemption for something  not listed under                                                               
AS 29.45.050.  In other  words, she asked whether AS 29.45.050(a)                                                               
would allow the exemptions in Version  T to be approved by a vote                                                               
of the people in a municipality without the bill passing.                                                                       
                                                                                                                                
8:11:44 AM                                                                                                                    
                                                                                                                                
ANDREW   DUNMIRE,    Attorney,   Legislative    Legal   Services,                                                               
Legislative  Affairs Agency  (LAA), said  AS 29.45.050(a)  grants                                                               
voters  the  ability  to approve  a  residential  exemption  that                                                               
cannot exceed an assessed value of $75,000.                                                                                     
                                                                                                                                
8:12:35 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 8:12 a.m.                                                                                 
                                                                                                                                
8:13:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT questioned the impact of the bill.                                                                           
                                                                                                                                
MS. DUNMIRE  said the  bill would  add four  new options  into AS                                                               
29.45.050   that  would   permit  the   governing  body   of  the                                                               
municipality to adopt  any of the exemptions in  the bill without                                                               
going through  the voters.   Under  current law,  AS 29.45.050(a)                                                               
allows  a municipality  to adopt  a residential  exemption that's                                                               
limited to $75,000 as long as it's approved by the voters.                                                                      
                                                                                                                                
8:15:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLLAND sought  to  confirm that  the bill  would                                                               
open the bill up beyond the $75,000 limit in AS 29.45.050(a).                                                                   
                                                                                                                                
MR.  DUNMIRE stated  that  the $75,000  limit  in subsection  (a)                                                               
wouldn't apply to the exemptions proposed in Version T.                                                                         
                                                                                                                                
8:17:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT noted  that  public testimony  had been  left                                                               
open [from  3/27/25].  She closed  public testimony on HB  13 and                                                               
sought further questions from committee members.                                                                                
                                                                                                                                
8:18:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRAX referred  to page  2, Section  9, and  asked                                                               
what would happen  if the renter's income were  to increase above                                                               
30 percent  of their  income making them  no longer  eligible for                                                               
the  exemption.   He asked  whether  the landlord  would need  to                                                               
evict them or lose the tax exemption.                                                                                           
                                                                                                                                
MR. JOHANSEN  imagined that any  tenant would be  protected under                                                               
[the   Landlord  Tenant   Act];   furthermore,   he  shared   his                                                               
understanding  that the  landlord would  have the  right to  stop                                                               
renting to anyone if its lawful.                                                                                                
                                                                                                                                
8:21:12 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MEARS  pointed out  that  the  local government  that's                                                               
implementing these exemptions would have  the ability to add more                                                               
details.   In addition,  she speculated  that the  tenant's lease                                                               
would stipulate  a timeframe  for checking  in on  this exemption                                                               
and any potential increase in income.                                                                                           
                                                                                                                                
MR.  JOHANSEN confirmed  that the  bill  sponsor envisioned  that                                                               
sideboards would  be implemented  by the  municipalities building                                                               
these  programs.     He   agreed  with   the  comments   made  by                                                               
Representative Mears.                                                                                                           
                                                                                                                                
REPRESENTATIVE PRAX expressed  concern that sub-subparagraph (cc)                                                               
would prohibit the establishment of sideboards.                                                                                 
                                                                                                                                
CO-CHAIR HIMSCHOOT shared her understanding  that this bill would                                                               
not  be "reinventing  the wheel,"  it would  instead be  applying                                                               
some of the same definitions that are already in practice.                                                                      
                                                                                                                                
8:25:46 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT announced that CSSSHB 13, Version T would be                                                                 
held over.                                                                                                                      
                                                                                                                                
8:26:27 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Community and Regional Affairs Standing Committee meeting was                                                                   
adjourned at 8:26 a.m.