Legislature(1993 - 1994)

02/25/1993 09:12 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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          SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                        
                        February 25, 1993                                      
                            9:12 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Senator Randy Phillips, Chairman                                             
  Senator Robin Taylor, Vice Chairman                                          
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Senator Rick Halford                                                         
  Senator Al Adams                                                             
  Senator Fred Zharoff                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  SENATE BILL NO. 42                                                           
  "An  Act  relating   to  municipal  taxation  of   alcoholic                 
  beverages; and providing for an effective date."                             
                                                                               
  SENATE BILL NO. 102                                                          
  "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."                 
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
  SB 42 - No previous action to record.                                        
                                                                               
  SB 102 - See Community & Regional Affairs minutes                            
           dated 2/18/93.                                                      
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Senator George Jacko                                                         
  State Capitol                                                                
  Juneau, AK 99801-1182                                                        
  POSITION STATEMENT:  Prime Sponsor of SB 42                                  
                                                                               
  Kent Swisher, Executive Director                                             
  Alaska Municipal League                                                      
  2217 2nd St.                                                                 
  Juneau, AK 99801                                                             
  POSITION STATEMENT:  Testified in support of SB 42                           
                       and SB 102                                              
                                                                               
  Paul Dick                                                                    
  Income & Excise Audit Division                                               
  Department of Revenue                                                        
  P.O. Box 110420                                                              
  Juneau, AK 998011-0420                                                       
                                                                               
                                                                               
  POSITION STATEMENT:  Present to answer questions on                          
                       SB 42                                                   
                                                                               
  Lennie Gorsuch, Representing Miller Brewing Co.                              
  Box 240904                                                                   
  Douglas, AK 99824                                                            
  POSITION STATEMENT:  Opposed to SB 42                                        
                                                                               
  Rick Urion, Representing Alaska Wine & Spirits                               
    Wholesalers Association                                                    
  Box 20868                                                                    
  Juneau, AK 99801                                                             
  POSITION STATEMENT:  Opposed to SB  42                                       
                                                                               
  Rupe Andrews, Representing AARP                                              
  Juneau, AK 99801                                                             
  POSITION STATEMENT:  Opposed to SB 102                                       
                                                                               
  "Shorty" Oliver, Representing the American Legion                            
  Juneau, AK 99801                                                             
  POSITION STATEMENT:  Opposed to SB 102                                       
                                                                               
  Bruce Geraghty, Deputy Commissioner                                          
  Department of Community & Regional Affairs                                   
  P.O. Box 112100                                                              
  Juneau, AK 99811-2100                                                        
  POSITION STATEMENT:  Offered information on SB 102                           
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-9, SIDE A                                                            
                                                                               
  Number 001                                                                   
                                                                               
  The Senate Community & Regional Affairs Committee was called                 
  to order by Chairman Randy Phillips at 9:12 a.m.  Due to the                 
  lack of a quorum, the Chairman stated that there would be no                 
  action  on the  calendared bills  other than  the taking  of                 
  public testimony.                                                            
                                                                               
  Number 010                                                                   
  SENATOR GEORGE JACKO, prime sponsor of SB 42, explained that                 
  the  legislation  will  provide  local  municipalities   the                 
  ability  to tax above the level of other commodities subject                 
  to  sales  tax.   Local  voters  would have  to  approve the                 
  measure  before   implementation  could  take  place.     If                 
  approved, it would be up to  the local governments to decide                 
  how  they  want to  spend  the revenues  generated  from the                 
  increased tax.                                                               
                                                                               
  Senator  Jacko  said he  views  the legislation  as creating                 
  another  revenue  tool  for  local  governments  to increase                 
  revenues.   Not all  communities may decide  to utilize  the                 
                                                                               
                                                                               
  higher alcohol beverage sales tax, but it would be available                 
  to those who decide it is needed.                                            
                                                                               
  Senator Jacko noted  that many  communities in his  district                 
  are supportive of the legislation.                                           
                                                                               
  Number 050                                                                   
                                                                               
  KENT SWISHER,  Executive Director, Alaska  Municipal League,                 
  voiced their support for  SB 42.  He agreed  the legislation                 
  would  be  another  revenue  source  for  local governments,                 
  especially in the smaller communities.                                       
                                                                               
  Mr. Swisher  suggested the bill  might be amended  to create                 
  the  ability to  impose  a tax  on  this particular  product                 
  whether or not there is a sales tax on other items.                          
                                                                               
  Number 080                                                                   
                                                                               
  PAUL DICK,  Income &  Excise Audit  Division, Department  of                 
  Revenue, stated he was present to respond to questions.                      
                                                                               
  Number 085                                                                   
                                                                               
  LENNIE GORSUCH, representing the Miller Brewing Co.,  stated                 
  the  company's opposition  to  SB 42,  which she  said would                 
  allow   municipalities  to  isolate  one  industry  and  one                 
  commodity to tax disproportionately.                                         
                                                                               
  Ms.  Gorsuch said that  the majority of  beer drinkers enjoy                 
  the beverage responsibly.   Most beer  drinkers in the  U.S.                 
  and  Alaska are  low to  middle income citizens,  and taxing                 
  them  at  a  higher  rate   would  decrease  the  amount  of                 
  discretionary funding  that they  would  have available  for                 
  other purchases.                                                             
                                                                               
  Ms.  Gorsuch   reiterated  the   Miller  Brewing   Company's                 
  opposition  to SB 42, saying they do  not believe it is good                 
  public  policy  to  isolate  just   this  one  industry  for                 
  taxation.                                                                    
                                                                               
  Number 115                                                                   
                                                                               
  RICK   URION,  representing  the   Alaska  Wine   &  Spirits                 
  Wholesalers Association,  stated their opposition to  SB 42,                 
  which, in essence, would repeal the law that the legislature                 
  passed in  1985.   He noted  that law  has been  challenged,                 
  taken to the State Supreme Court and upheld.                                 
                                                                               
  Mr. Urion said  the issue is one of equity.   Alcohol should                 
  be taxed at the same rate that anything else is taxed.                       
                                                                               
  There being  no further witnesses  present to testify  on SB
  42,  CHAIRMAN RANDY PHILLIPS  stated it would  be held until                 
                                                                               
                                                                               
  there was a quorum present.                                                  
  Number 142                                                                   
  CHAIRMAN  RANDY   PHILLIPS  introduced  SB   102  (MUNICIPAL                 
  PROPERTY TAX EXEMPTIONS) as the next order of business.                      
                                                                               
  RUPE ANDREWS, a member of the Capital City Task Force of the                 
  American  Association  of   Retired  Persons,  stated  their                 
  membership opposes  SB 102.   The  legislation has a  direct                 
  bearing on  the economic security  of older Alaskans.   When                 
  the exemption was implemented over 30  years ago, it was the                 
  policy  of the  state to protect  these seniors  from losing                 
  their  homes  because  they  couldn't   afford  to  pay  the                 
  increased property taxes on them.                                            
                                                                               
  Mr. Andrews  said SB 102  is one of  a number of  bills this                 
  session that directly impacts the  older seniors citizens of                 
  Alaska in  reducing or  eliminating a  lot of benefits  that                 
  they have  been receiving  from the  state.   It  is a  real                 
  concern to senior citizens in that  it shows them that there                 
  has  been either  a  dramatic  change  of state  policy  and                 
  legislative policy  towards senior  citizens or  there is  a                 
  lack of policy  on the  part of the  Administration and  the                 
  legislature.   He urged  that before  the legislature  takes                 
  action on some of these  bills, that there be a  dialogue or                 
  debate to  spell out  what the  policy of  the Alaska  State                 
  Legislature, as well as the  Administration, is and is going                 
  to be towards senior citizens.                                               
  Number 230                                                                   
                                                                               
  "SHORTY" OLIVER, representing the American Legion, requested                 
  that the following letter from  William R. Weber, Department                 
  Commander,  to Representative Richard Foster, relating to HB
  66  (MUNICIPAL PROPERTY TAX EXEMPTIONS) be  made part of the                 
  record:                                                                      
                                                                               
       "The   legislative   processes   of   the   House    of                 
  Representatives and Senate committees move very quickly when                 
  word comes from the Governor.  The information  on HB 66 was                 
  only  made public  in  Anchorage  on  last  Wednesday.    On                 
  Thursday I received a Fax from  Rep. Ed willis concerning HB
  66 which would repeal  the local property tax  exemption for                 
  senior citizens and disabled veterans.                                       
                                                                               
       Has the  government of  this great  State of Alaska  no                 
  compassion  whatsoever  for  the  old,  and above  all,  the                 
  disabled veteran who  have given a  part of their lives  and                 
  bodies to defend the great State of Alaska and America?  Are                 
  the government leaders of  Alaska in such a hurry  to forget                 
  the  good  deeds  that  the old,  and  again,  the  disabled                 
  veterans have done  for this great  State of Alaska and  the                 
  nation that still another gift must be taken away?                           
                                                                               
                                                                               
       I have no  idea how many  senior citizens there are  in                 
  Alaska, but  I do know  that there are  approximately 75,000                 
  veterans  and 40  American Legion  Posts throughout  Alaska.                 
  Speaking for these veterans,  I must say please do  not pass                 
  HB 66.                                                                       
                                                                               
       One of our Past Department Commanders, Everett "Shorty"                 
  Oliver, will be asking to talk face-to-face with you on this                 
  matter.   I hope you will make time  for him to discuss this                 
  very important veteran issue."                                               
                                                                               
  Mr.  Oliver  estimated  that  there are  only  two  to three                 
  hundred disabled veterans in Alaska that are over 50 percent                 
  disabled, and  he said  they are  the ones  that are  really                 
  going to be hurt by this legislation.                                        
                                                                               
  Mr. Oliver urged that the committee  vote against SB 102 and                 
  the House version of the legislation, HB 66.                                 
                                                                               
  Number 260                                                                   
                                                                               
  CHAIRMAN  RANDY  PHILLIPS  related  that  he has  asked  the                 
  Department  of  Community &  Regional  Affairs to  provide a                 
  breakout on  how much  money it  involves as  it relates  to                 
  disabled veterans.    BRUCE  GERAGHTY, Deputy  Commissioner,                 
  Department  of  Community  &  Regional  Affairs,  said  that                 
  statewide, disabled vets number 703,  and the total property                 
  value  of  disabled veterans  is  $62 million.    Those that                 
  qualify under  the 50  percent for  the exemption  amount to                 
  approximately $1.1 million, and, of that, they are currently                 
  funding $230,000, which  amounts to about eight  percent for                 
  the  disabled  portion  of  the  approximately  $3   million                 
  program.                                                                     
                                                                               
  In response to a question that  Senator Taylor had raised at                 
  an earlier hearing  as to the affect the  bill would have on                 
  contributions  to local school  districts, Mr. Geraghty said                 
  as the  bill is currently  written, it would  increase local                 
  contributions   rather   significantly  in   the  population                 
  centers. It  ranges from  Anchorage  being the  top at  $1.6                 
  million down  to about  $470 in  Nenana.   He estimated  the                 
  total  would probably be close to $4 million.  He noted that                 
  the House HESS  committee had amended  the House version  of                 
  the legislation to exclude the school section.                               
                                                                               
  Mr.  Geraghty  related that  right  now the  communities are                 
  picking up  $11 million  under the  mandatory program.   The                 
  Administration   does  not   believe  that   mandating  this                 
  exemption is a  proper policy.   They believe the  exemption                 
  should exist on  the local  level, but they  think that  the                 
  local communities should address that issue locally.                         
                                                                               
  Number 480                                                                   
                                                                               
                                                                               
  KENT SWISHER, Executive  Director, Alaska Municipal  League,                 
  stated the League's support for SB 102, however, he outlined                 
  three suggested  changes to  the legislation:   (1)  require                 
  that the  property tax exemption for seniors  be approved by                 
  the voters at  the local level;  (2) provide the ability  to                 
  allow deferrals  as an  alternative  exemption, whereby  the                 
  senior could  defer property  taxes until  the home  changes                 
  hands, at  which time  the local  jurisdiction receives  the                 
  property tax that  it would have normally received;  and (3)                 
  exempt the  value of  property optionally  exempted under  a                 
  local program to provide tax  relief for senior citizens and                 
  disabled veterans from the full and true value determination                 
  prepared by DCRA.                                                            
                                                                               
  Number 527                                                                   
                                                                               
  SENATOR TAYLOR asked if the League would favor  granting the                 
  exemption on a needs basis.   KENT SWISHER answered that the                 
  League does support it and believes it would be appropriate.                 
  He added that their ultimate  preference, as a policy, would                 
  be that the program be fully funded at the state level.                      
                                                                               
  Number 555                                                                   
                                                                               
  CHAIRMAN RANDY  PHILLIPS requested that  Senator Taylor work                 
  with  the  people  who  had   expressed  concerns  with  the                 
  legislation, and said  the legislation would be  back before                 
  the committee the following week.                                            
  There  being  no   further  business  to  come   before  the                 
  committee, the meeting was adjourned at 9:45 a.m.                            

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