Legislature(2011 - 2012)HOUSE FINANCE 519
02/15/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB118 | |
| HB10 || HB64 | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 10 | TELECONFERENCED | |
| + | HB 64 | TELECONFERENCED | |
| + | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 118 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 15, 2012
1:38 p.m.
1:38:06 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:38 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative Anna Fairclough, Vice-Chair
Representative Les Gara
ALSO PRESENT
Darrell Breese, Staff, Representative Bill Stoltze; Michael
Pascal, Staff, Representative Eric Feige.
PRESENT VIA TELECONFERENCE
Whitney Brewster, Director, Division of Motor Vehicles,
Department of Administration; Alice Edwards, Director,
Division of Air Quality, Department of Environmental
Conservation; Scott Ruby, Alaska Division of Community and
Regional Affairs, Department of Commerce, Community and
Economic Development.
SUMMARY
HB 10 NONCOMMERCIAL TRAILER REGISTRATION FEE
HB 10 was HEARD and HELD in committee for further
consideration.
HB 64 PERMANENT MOTOR VEHICLE REGISTRATION
HB 64 was HEARD and HELD in committee for further
consideration.
HB 118 RESEARCH AND DEVELOPMENT TAX CREDIT
CSHB 118(FIN) was REPORTED out of committee with
"no recommendation" and accompanying new
indeterminate fiscal note from the Department of
Revenue and new zero fiscal note from the
Department of Labor and Workforce Development.
HB 170 MUNI TAX EXEMPTION FOR CERTAIN VOLUNTEERS
HB 170 was HEARD and HELD in committee for
further consideration.
1:38:13 PM
HOUSE BILL NO. 118
"An Act relating to a tax credit for corporate
income taxes paid for qualified research and
development expenditures; and providing for an
effective date."
1:38:22 PM
Co-Chair Stoltze announced a procedural error in reporting
out of committee the Labor and Commerce version of CSHB 118
instead of the Finance version of the bill.
Co-Chair Thomas MOVED to RESCIND CSHB 118(L&C) that
reported out of committee on 2/13/2012. There being NO
OBJECTION, it was so ordered.
Co-Chair Thomas MOVED to report CSHB 118(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
Co-Chair Stoltze OBJECTED for purpose of discussion. There
being NO further OBJECTION, it was so ordered.
CSHB 118(FIN) was REPORTED out of committee with "no
recommendation" and accompanying new indeterminate fiscal
note from the Department of Revenue and new zero fiscal
note from the Department of Labor and Workforce
Development.
1:41:13 PM
HOUSE BILL NO. 10
"An Act relating to the registration fee for
noncommercial trailers and to the motor vehicle
tax for trailers."
HOUSE BILL NO. 64
"An Act relating to permanent motor vehicle
registration; and providing for an effective
date."
1:41:28 PM
Co-Chair Thomas MOVED to ADOPT proposed committee
substitute for HB 64, Work Draft 27-LS0327\T (Luckhaupt
2/13/12.)
Co-Chair Stoltze OBJECTED for purpose of discussion.
DARRELL BREESE, STAFF, REPRESENTATIVE BILL STOLTZE,
explained the purpose for merging HB 10 and HB 64 into one
committee substitute was for efficiency. Both bills deal
with similar sections of state statutes, therefore moving
forward with one bill would be more effective. The one
additional change to the bill would be to remove the
state's responsibility to collect the Motor Vehicle
registration tax required for sixteen municipalities and
cities within the state of Alaska. The local legislative
body sets the rate and the Department of Motor Vehicles
(DMV) collects the tax with an eight percent collection
fee. Since the tax is a municipal or city tax, the bill
shifts the collection responsibility from the Department of
Motor Vehicles back to the municipalities and cities.
Co-Chair Stoltze asked if the reference applied only to
vehicles eligible for the permanent registration. Mr.
Breese responded that the language was crafted to remove
all motor vehicle tax collection from the department. Co-
Chair Stoltze indicated his intent as sponsor was to
clarify the bill as a policy question.
1:44:41 PM
Mr. Breese elaborated that the bill establishes two sets of
vehicle classifications; one for non-commercial vehicles,
eight years or older where the owner can choose to adopt a
permanent rather than bi-annual registration, and
establishes a fee rate for the permanent registration. The
bill sets a one-time $300 fee for the permanent
registration of a non-commercial vehicle. Permanent vehicle
registration for both non-commercial motor vehicles and
trailers would be an option, not mandatory, and the
registration would not be transferable if the vehicle is
sold. The Department of Motor Vehicles estimates
approximately ten percent of motor vehicle owners and
twenty percent of trailer owners would choose permanent
registration.
Co-Chair Stoltze reiterated that the DMV numbers were an
estimate.
Mr. Breese pointed out that the DMV estimation was based on
the number of vehicle transactions, but agreed it was just
an approximation. Permanent non-commercial trailer
registration is consistent with legislative decisions
regarding commercial trailers. Commercial vehicles are
currently allowed to register for a $25 one-time fee.
Currently the DMV is charging $30 for non-commercial
trailer owners every two years. The bill establishes a one-
time fee of $100 for non-commercial vehicles.
1:48:22 PM
Co-Chair Stoltze pointed out that many states follow the
same procedure and there would be potential changes in
revenue. He remarked that many owners register their
vehicles or trailers as commercial rather than non-
commercial in order to only pay the one-time fee.
1:50:41 PM
Mr. Breese referenced the 20th legislature in 1998, HB 104
which created the permanent trailer registration for
commercial trailers. Co-Chair Stoltze noted the logical
reference used in the present bill.
1:51:15 PM
Representative Guttenberg wondered how the license plate
and tag would work under this plan. Presently, when a
vehicle is registered, it receives a license plate, then
after renewal, a tag is issued with the year and month.
1:52:00 PM
WHITNEY BREWSTER, DIRECTOR, DIVISION OF MOTOR VEHICLES
(DMV), DEPARTMENT OF ADMINISTRATION (via teleconference),
signified that the DMV does not issue tags for permanent
registration of commercial trailers. She indicated that the
DMV could consider issuing a tag for permanent non-
commercial trailers.
Co-Chair Stoltze requested any concerns that the DMV may
have with this bill.
Ms. Brewster agreed the bill would be more equable for
trailer owners. As far as the permanent registration for
vehicles, the information in the fiscal note is only the
department's estimate on how many people may choose the
permanent registration option. She added that the DMV does
retain eight percent for the fees collected for the motor
vehicle registration tax which is approximately $1 million
a year into the general fund. She indicated that the DMV
would look further into the fee collection loss.
1:55:29 PM
Co-Chair Stoltze asked if she saw any administrative
problems for the DMV if the bill is passed. Ms. Brewster
indicated changes would be needed in the DMV database. Co-
Chair Stoltze indicated after talking with the Department
of Public Safety regarding concerns, they did not foresee
any problems.
1:57:22 PM
ALICE EDWARDS, DIRECTOR, DIVISION OF AIR QUALITY,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC) (via
teleconference), responded that the DEC had no concerns
with the bill. Co-Chair Stoltze questioned the need for
resubmitting the previous fiscal note of $81,000. Ms.
Edwards responded that a new zero fiscal note had been
submitted as the EPA had approved the suspension of the
emission program in Anchorage.
Co-Chair Stoltze applauded the department for the financial
savings.
1:59:08 PM
Co-Chair Stoltze signified that public testimony will
remain open.
CSHB 64(FIN) was HEARD and HELD in committee for further
consideration.
2:00:46 PM
AT EASE
2:09:51 PM
RECONVENED
HOUSE BILL NO. 170
"An Act relating to municipal property tax
exemptions on residences of certain volunteer
emergency services personnel and the widows and
widowers of volunteer emergency services
personnel; and providing for an effective date."
2:10:06 PM
MICHAEL PASCAL, STAFF, REPRESENTATIVE ERIC FEIGE, disclosed
that Representative Feige is the Fire Chief of the
Chickaloon Fire Department and also on their board of
directors, therefore he could benefit from this bill. Mr.
Pascal indicated that he was an assistant Fire Chief of the
rural Deltana Fire Department, but would not benefit from
this bill because of the department's location in an
unorganized borough where there is no property tax. He
explained that the bill allows a municipality that levies a
property tax to provide an exemption of up to $150,000 to
volunteers for fire emergency services. The exception could
be used by the community as a recruitment tool. The bill
also offers a provision that the state could, if it chooses
to appropriate funds, reimburse a community for the lost
revenue tax. Recruitment of volunteers is increasingly more
difficult in Alaska. Communities throughout Alaska have
tried many methods of volunteer enlistment. He emphasized
that the bill could be used as an inducement to attract
volunteers, but would not force a municipality to implement
the program. Co-Chair Stoltze indicated that a required
ordinance would be necessary. Mr. Pascal agreed that an
ordinance needed to be created to define how an active
volunteer is measured and how the exemption would be given.
2:13:26 PM
Representative Wilson asked for clarification on the
financial impact in the Fairbanks North Star Borough. Mr.
Pascal indicated the difficulty in determining the impact
to various communities throughout Alaska as the information
is not readily available. In using Girdwood as an example,
out of the thirty volunteers, about eighteen of them own
property with the maximum evaluation being $150,000. If a
community looked at the local mill rate based on the
$150,000 evaluation of the property, the local financial
impact could be determined.
2:15:01 PM
Co-Chair Stoltze inquired if the debate would take place on
the local level which is the reason for having a local
option. Mr. Pascal agreed that the local community would
have that debate and decide whether to offer the exemption.
Representative Wilson asked if the current $20,000 that is
stacked on top of the senior exemption would go on top of
the proposed volunteer exemption. Mr. Pascal replied that
the $150,000 is the sole amount so it would not go on top
of senior or any other exemption.
Co-Chair Stoltze inquired if the $150,000 is the upper
limit or could the local government opt for a lower amount.
Mr. Pascal replied that the $150,000 limit is the current
one in statute for the senior exemption. Since there is a
possibility the state could fund the exemption at a later
date, the $150,000 limit was put into the bill. Co-Chair
Stoltze reiterated if the local community could opt for a
lesser amount. Mr. Pascal replied that was correct.
2:16:36 PM
Representative Wilson inquired about the retroactive status
for widows and widowers. Mr. Pascal suggested that the
defining guidelines and procedures would be left to the
municipality. Co-Chair Thomas commented on a personal
experience where a friend's widow could miss the exemption.
Representative Neuman read page one, line 13, of the bill
stating that there needs to be clarification in the statue
of "up to" $150,000. Co-Chair Stoltze agreed that would be
a valid change to the bill. He noted the bill needs to
reflect the sponsor's intent. Representative Neuman offered
to draft an amendment to reflect the change.
2:19:26 PM
Representative Costello agreed that the retroactive
possibilities need further discussion. Co-Chair Stoltze
agreed that further discussion on retroactive options would
be needed. Co-Chair Thomas suggested that retroactivity
could be addressed as a local option. Co-Chair Stoltze
noted that the bill has an effective date and any
discussions regarding retroactive exemptions would need to
be placed within the bill.
2:21:14 PM
Representative Guttenberg referred to page 2, line 16-21,
determining who is covered if an individual applies late or
forgets to apply. He wondered who is being covered, besides
those that apply late and how it would be determined. Mr.
Pascal reported that the language was pulled from existing
exemptions already in place. Representative Guttenberg
requested examples of other exemptions. Mr. Pascal noted
the elderly exemption which is mandatory, but was unable to
name others. Co-Chair Stoltze listed other exemptions, such
as disabled veterans, widows of disabled veterans, and
widows of senior exemptions.
2:23:34 PM
SCOTT RUBY ALASKA DIVISION OF COMMUNITY AND REGIONAL
AFFAIRS, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), signified that he would
provide a comprehensive list to the committee.
Representative Guttenberg noted if someone does not apply
for the permanent fund for whatever reason, but wants the
property tax exemption; it could bring up a policy call
dilemma. He indicated support for the bill, but needed some
policy clarifications. Co-Chair Stoltze indicated that the
permanent fund dividend eligibility is a constitutionally
tested time for allowable residency. Representative Edgmon
noted various definitions of permanent residency. Co-Chair
Stoltze agreed, but indicated that the permanent fund had
the most universal determination.
2:25:46 PM
Representative Doogan wondered if the bill's assumption was
that people would not become volunteer fight fighters if
the benefit was not offered. He questioned if the benefit
was an inducement or a reward. Mr. Pascal replied that the
bill offers an inducement. Over time volunteerism often
becomes more difficult on the individual so this inducement
would be an added incentive to recruit and retain
volunteers.
2:26:49 PM
Co-Chair Thomas queried if volunteer hospice workers would
be eligible for this benefit. Mr. Pascal replied that
hospice workers would not be covered in this bill. The bill
does not cover scheduled volunteerism, but those
individuals responding to spontaneous emergency situations
on any day or time. Co-Chair Thomas offered that a hospice
volunteer and an emergency medical responder may be one
person. Mr. Pascal agreed that most community volunteers
overlap in positions.
2:28:19 PM
Co-Chair Stoltze pointed out that he represented one of the
largest volunteer fire departments in the state. He
elaborated that a volunteer board of supervisors was
connected to the fire department and wondered about their
eligibility. Mr. Pascal remarked that the designation was
for active volunteers under the definition the state
provided for the hepatitis vaccine. The local community
would have the final determination on defining the active
volunteer status. Co-Chair Stoltze remarked that the
hepatitis vaccine was just another test and standard for
determining eligibility. Mr. Pascal interjected that the
hepatitis vaccine is a serious issue with increased
awareness in communities.
2:29:38 PM
Representative Wilson mentioned that volunteers in her
larger community do not overlap positions. She opined that
the bill was making one group more important than another.
She also believed the state could end up with a large
financial burden. Mr. Pascal indicated that the volunteer
eligibility issue was discussed in the previous committee
and the agreed upon distinction was the requirement of
immediate sacrifice versus the scheduling of the sacrifice.
Representative Wilson stressed that true volunteers do make
sacrifices even if the service is scheduled.
2:31:14 PM
Co-Chair Stoltze reminded the committee that the money must
derive from somewhere, but signified that volunteers do
save the state money. He acknowledged that the financial
impact on each community would be different. Representative
Edgmon noted the committee support for the bill, but needed
clarification with a definition on page 2, line 7, that
reads a person qualified as a volunteer for purposes of
this section only if the person has been a volunteer of the
fire department, emergency medical or rescue services for
at least two years before the date. He noted Representative
Guttenberg's point on line 16-21, that referenced the
permanent fund dividend. On page 3 another definition of
volunteer is under Title 18. He questioned the differences
and if they overlapped. Mr. Pascal agreed the definitions
were qualifications designed so that an individual could
not sign up to volunteer one day and immediately receive
the exemption. The bill's intent is to ensure a minimum
qualification for the volunteer definition and eligibility.
2:33:48 PM
Representative Edgmon recounted that an individual must be
a volunteer for two years and have residency verified by
the permanent fund dividend. He asked for further
information regarding volunteer requirements in Title 18.
Co-Chair Stoltze remarked that local governments would look
at how it overlaps their tax cycle. Mr. Pascal agreed and
signified he would provide wording for Section 18.
2:34:36 PM
Representative Doogan questioned the problem this
legislation was intended to solve. He wondered if the
problem was not enough volunteer fire fighters or the bill
would just provide a compensation award. Mr. Pascal
remarked that the issue addressed in the bill was the lack
of volunteers in many communities. Representative Doogan
questioned if the bill provided the best method for solving
the volunteer problem.
2:35:45 PM
Mr. Pascal agreed there is not just one method to address
the problem. He stressed the great financial burden if
communities replaced volunteers with permanent employees.
Representative Doogan contended he was not questioning the
value of the volunteers, but trying to establish whether
the inducement was necessary and if the bill provided the
most appropriate way to handle the situation at the
appropriate level. Co-Chair Thomas interjected that younger
members of some communities were not volunteering at the
rate of previous generations. He believed the bill provided
a good incentive to reward and recruit volunteers.
2:39:04 PM
Representative Costello stressed that the state may end up
replacing the community's loss revenue from property taxes.
The state may be in the red by 2015 and, without more oil
production, cash reserves could be depleted by 2025. The
state could decide at a later date not to help the
communities with lost revenue. She wondered what would
prevent a local community from increasing the mill rate to
property owners paying taxes.
Mr. Pascal remarked that the provision for the state is not
loaded on the front, but only if the state later chooses to
enact legislation to fund it. If the state does decide to
fund the program and later pulls out, the municipality
would have to fund the program or end the exemption.
Co-Chair Stoltze remarked that clarification was needed to
indicate the possibility of a lower threshold than $150,000
to provide local flexibility. He requested more detailed
information on eligibility status, volunteer definitions,
and a list of other exemptions.
2:42:10 PM
Representative Doogan remarked that fiscal note discussion
was needed. Co-Chair Stoltze noted the relevance of the
fiscal note and that local communities needed to weigh in
on the fiscal impact to their community. Representative
Doogan suggested the fiscal note be indeterminate rather
than zero. Decisions made regarding the exemption would
roll into municipalities which could eventually roll to the
legislature. More information was needed on the potential
cost of the volunteer exemption program.
2:44:04 PM
Co-Chair Stoltze requested Mr. Pascal provide the mill
rates for cost projections. He declared most community fire
chiefs could provide needed answers. Co-Chair Thomas
reminded the committee of an earlier proposed bill allowing
the municipalities to phase out the senior citizen tax
exemption over a ten year period. If implemented, the
municipality could have the option to phase out the
exemption to a volunteer after a declared time period.
2:46:31 PM
Representative Neuman indicated his approval of the concept
and local option proposed. He noted, in Willow, the
difficulty in attracting volunteers, but was concerned over
the potential lost revenue for a community. Personal taxes
in a fire service area could change depending on the number
of volunteers. He questioned how municipalities would
distribute the payment to volunteers throughout a borough.
2:49:17 PM
Mr. Pascal asked Representative Neuman if he questioned
that the bill was envisioned to be a specific fire service
area or for the entire municipality. Representative Neuman
queried, if the state does not reimburse the expenditure,
would the cost be passed on to people in a specific fire
service area or would it be borough wide taxation. Mr.
Pascal indicated the cost would be borough wide.
2:50:22 PM
Representative Wilson agreed that was part of her concern.
The many divisions in Fairbanks make it difficult to
determine who would eventually pay; where the volunteer
lives or where the individual volunteers. She indicated she
would run numbers in her community to assess the impact.
Co-Chair Stoltze suggested working with the volunteers who
would know the demographics of their departments.
HB 170 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 2:52 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SPONSOR STATEMENT HB 170.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 170 |
| HB 170 Support Letters.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 170 |
| HB010CS(FIN)-NEW FN-DOA-DMV-2-10-12-.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 10 |
| HB064CS(TRA)-NEW FN-DEC-AQ-02-09-12.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| HB064CS(FIN)-NEW FN-DOA-DMV-2-10-12.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| CS HB64 (FIN) WORKDRAFT 27-LS0327-T.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| CS HB64 Line summary.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| CS HB64Sponsor statement.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| HB 64 DMV FEbrurary 2012 Trailer Count.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| HB064_Class Codes (2).pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| HB64 statewide non-commercial vehicle count.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |
| CS HB64 workdraftNewFN ADM 2-15-12.pdf |
HFIN 2/15/2012 1:30:00 PM |
HB 64 |