Legislature(1993 - 1994)
02/25/1993 09:12 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.