Legislature(1993 - 1994)
02/25/1993 09:12 AM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= 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.
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