02/21/2013 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Local Government by the Alaska Municipal League | |
| HB40 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 40 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 21, 2013
3:33 p.m.
MEMBERS PRESENT
Senator Peter Micciche, Chair
Senator Dennis Egan
Senator Click Bishop
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Cathy Giessel, Vice Chair
OTHER LEGISLATORS PRESENT
Representative Shelley Hughes
COMMITTEE CALENDAR
PRESENTATION: LOCAL GOVERNMENT BY THE ALASKA MUNICIPAL LEAGUE
- HEARD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 40(CRA)
"An Act establishing a municipal tax exemption for certain farm
structures."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 40
SHORT TITLE: MUNICIPAL TAX EXEMPTION: FARM STRUCTURES
SPONSOR(s): REPRESENTATIVE(s) HUGHES
01/16/13 (H) PREFILE RELEASED 1/7/13
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) CRA
01/31/13 (H) CRA AT 8:00 AM BARNES 124
01/31/13 (H) Moved CSHB 40(CRA) Out of Committee
01/31/13 (H) MINUTE(CRA)
02/01/13 (H) CRA RPT CS(CRA) 6DP
02/01/13 (H) DP: FOSTER, REINBOLD, OLSON, DRUMMOND,
LEDOUX, NAGEAK
02/08/13 (H) TRANSMITTED TO (S)
02/08/13 (H) VERSION: CSHB 40(CRA)
02/11/13 (S) READ THE FIRST TIME - REFERRALS
02/11/13 (S) CRA
02/21/13 (S) CRA AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
KATHIE WASSERMAN
Executive Director
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Provided presentation on local government
operations.
REPRESENTATIVE HUGHES
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 40.
GINGER BLAISDELL
Staff to Representative Hughes
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on HB 40 for the sponsor.
STEVE VAN SANT, State Assessor
Department of Commerce, Community and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Available to answer questions on HB 40.
ACTION NARRATIVE
3:33:01 PM
CHAIR PETER MICCICHE called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:33 p.m. Present
at the call to order were Senators Hoffman, Egan, Bishop and
Chair Micciche.
^PRESENTATION: Local Government by the Alaska Municipal League
PRESENTATION: Local Government by the Alaska Municipal League
CHAIR MICCICHE said the first item on the agenda was a
presentation by Kathie Wasserman.
3:34:44 PM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), Juneau, Alaska, said the reason she prepared the "Local
Government 101" was last year while listening to a committee
hearing she heard a member in the House say they would have to
stop some of these property tax exemptions, because if they
didn't it would totally break the state's budget. She called him
and said the state doesn't pay for it, and he disagreed. That is
when she saw a reason to help people understand how local
government works.
3:37:15 PM
MS. WASSERMAN said the AML represents all 162 cities and
boroughs in the state; a municipality includes cities and
boroughs. Ninety-seven percent of the population lives in these
cities and boroughs; the rest are in unorganized communities.
AML does three things: they represent the voice of all cities
and boroughs and take those messages to the legislature and to
the Congress; they try to build consensus as much as possible
and working closely with the State Division of Community and
Regional Affairs provide training, picking up some gaps they
can't pick up for whatever reason (low staffing or not enough
funds); and they also provide a joint insurance association -
pooling insurance and risk management, and an investment pool
where municipalities can put money they are setting aside for
projects.
MS. WASSERMAN said with their staff of five people, the AML not
only represents all municipalities but the municipal affiliates,
as well. They support and do the work for the Alaska Conference
of Mayors, the Alaska Clerks Association, the Managers
Association, Alaska Finance Officers, the Municipal Assessors,
the Municipal Attorneys, Municipal Planners, and the Municipal
Fire Chiefs.
3:38:06 PM
MS. WASSERMAN said page 4 listed the powers cities can select
from depending on what status the city is. Page 6 listed all the
boroughs; she added that the 19th borough, Petersburg, was added
last month. She said the largest borough is the unorganized
borough and that has an assembly that is the legislature. In the
last 50 years they don't know of any time where the legislature
actually went into session as the assembly.
She had references to the Alaska Constitution that provide for
maximum local self-government and minimum local government units
and said that having minimum local government is one of the
goals of the Local Boundary Commission. All the boroughs and
their different powers were listed on page 8 and were helpful as
a reference. She explained that sometimes laws are written
asking municipalities to do things that aren't under their
authority to do under Title 29.
3:40:35 PM
MS. WASSERMAN said the senior citizens property tax exemption is
a mandated exemption under Title 29.45.050(g). This year those
exemptions totaled $57 million split between 19 municipalities.
Revenue sharing is a total of $60 million split between more
than 162 communities (including unorganized communities). So
they are very quickly getting to where the senior citizens
property tax exemption is more than the revenue sharing. In the
Municipality of Anchorage, for instance, this year senior
citizens property tax exemptions is up to $28 million and their
revenue sharing is $15 million. The mayor is very concerned,
because at some point the state decided it didn't have the money
to reimburse the municipalities entirely. She didn't know of a
municipality in the state that levies a property tax that would
not be willing to give breaks to seniors and disabled veterans
that need it. However, AML thought it should be under the
purview of the municipalities to make their own decisions and to
do what they can afford rather than have it mandated by the
state and the cost not picked up.
3:43:59 PM
MS. WASSERMAN said when she gave this presentation to the House
she was asked if they wanted money back for reimbursement for
the last 15 years and that is not what they want. They have
always been opposed to mandated property tax exemptions and are
very careful in their response to optional property tax
exemptions. However, they are not taking a position against HB
40, because some municipalities think it is good for them.
She said the AML appreciates revenue sharing, because
municipalities need help with providing basic services. They
can't raise enough money through taxes and fees and don't want
to provide less services or lay people off. Laying people off
right now is also a bit problematic, because under SB 125 a
number of years ago, municipalities get "dinged" on laying
people off if they are part of a group or classification.
She said the revenue sharing program gives them $60 million out
of progressivity and the last two years they received
supplementals in the amount of $20 million two years ago and
last year $25 million (based on the price of oil). This year,
once again, they are asking for an additional supplemental of
$25 million.
3:45:57 PM
CHAIR MICCICHE said he thought some folks misunderstand the
Boundary Commission's mission statement - maximum local
government/minimum local government units - on page 7 and asked
her to clarify it.
MS. WASSERMAN said the intent of the framers of the Constitution
was to not have a lot of little governments all over. In fact,
their original intent was to have boroughs not cities as seats
of government.
3:47:03 PM
SENATOR BISHOP asked if any training is offered for rural
Alaska.
MS. WASSERMAN replied yes. She had been a mayor of a rural
community and always thinks of them first, because she knows
what it's like to be out there in the middle of nowhere and not
know what to do next. The AML has four meetings a year and at
their large annual conference they have newly elected officials
training when about 120 people show up, 60-70 percent are from
small villages. They also try to put money aside and offer
scholarships to fly in. The mayors also have a little
scholarship program to help mayors from rural villages fly in
and do all they can to make sure they get that training. The
larger communities have the ability to get that in other places,
but the small ones don't.
3:49:13 PM
CHAIR MICCICHE said they also offer sectional training for
planning directors that are appointed and staff; it's a great
organization. He said it would be nice for new folks in the
legislature to have an early visit that helps them understand
the impacts of exemptions on smaller communities.
MS. WASSERMAN answered that she agreed and they try to encourage
legislators to look at the big picture; when you do something
over here it affects something else over there.
3:50:40 PM
CHAIR MICCICHE thanked Ms. Wasserman for her presentation.
HB 40-MUNICIPAL TAX EXEMPTION: FARM STRUCTURES
3:51:03 PM
CHAIR MICCICHE announced HB 40 to be up for consideration [CSHB
40(CRA) was before the committee].
3:51:06 PM
REPRESENTATIVE HUGHES, sponsor of HB 40, Alaska State
Legislature, Juneau, Alaska, said this measure is a farm food
storage building tax exemption. HB 40 points to the fact that
agriculture remains important to Alaska and its purpose is to
strengthen a small but important section of Alaska's economy.
She said Greg Wolf with the World Trade Center commented in the
Economic Development Committee last week about how Alaska
compares economically to other states. He said two factors cause
us to lag: agriculture and manufacturing.
REPRESENTATIVE HUGHES said back in the 1950s more than 50
percent of the food consumed by Alaskans was from Alaska and now
it's less than 5 percent. HB 40 would allow, not mandate, local
municipalities to exempt specific food storage and production
buildings for those who derive at least 10 percent of their
income from farming activities. She hoped that reducing the tax
on certain buildings would encourage food storage and production
without diminishing a significant tax percentage for the
municipalities, which would help farmers. But it will also
increase access to locally grown food for Alaskans for a longer
period of time. She said bringing food up on a barge can take
seven to nine days and when food is grown locally it can be on
the shelf within a day or two.
3:54:09 PM
REPRESENTATIVE HUGHES said she has a lot of farmers in her
district and they were turning under crops and dumping produce
because it didn't make financial sense to store it because of
the tax they pay on the buildings. She sought input from
municipalities around the state who had good ideas which were
incorporated into the bill. The 10 percent income requirement
was to prevent someone who is just doing gardening as a hobby
from getting the credit.
Initially, she considered a building that would have 50 percent
farming use and decided that would be too hard on the local
municipalities. They would have to get out a measuring tape to
figure out if it's 50 percent, but it would also apply to a lot
more buildings and the fiscal impact would be harder on those
local municipalities. So, they tightened it up in that the
structure must be used exclusively for farming, which must
include the food storage, processing or growing and not storing
a sail boat.
3:56:15 PM
REPRESENTATIVE HUGHES said Bethel has no tax and it wouldn't
apply in the Delta area that is unorganized, but it could apply
to a few greenhouses in Juneau.
3:57:17 PM
GINGER BLAISDELL, staff to Representative Hughes, sponsor of HB
40, Alaska State Legislature, Juneau, Alaska, added the
Fairbanks assessor said the tax would be non-eventful. The Kenai
and Homer assessors said their farming activity is done in hoop
houses made of large PVC arched pipe with plastic over it, but
because they are not architecturally attached to the ground they
aren't considered a building structure. Kodiak also used hoop
houses; the only place that gave her a specific number for a
possible tax exemption was the MatSu Borough and he was trying
to count how many houses would be 50 percent food storage or
production and came up with over $3 million in tax. Once they
changed it to be exclusively for food storage or production, he
felt that that figure would be significantly reduced, but he
would have to look at some of the buildings again.
REPRESENTATIVE HUGHES said Kenai came up with a figure of
$45,000.
MS. BLAISDELL added the whole borough, including Homer and
Soldotna, would be a total of $75,000.
CHAIR MICCICHE said he thought it was a good bill and asked for
questions.
3:59:10 PM
SENATOR BISHOP agreed with Senator Micciche.
4:00:05 PM
CHAIR MICCICHE said he thought just one part of the bill that
talked about home kitchens might be awkward.
MS. BLAISDELL said she talked to a couple of assessors who had
individuals who might be picking their own raspberries and
selling them at a farmers market, and because their kitchen is
part of a household structure and not solely for the purpose of
a farming activity, it would not qualify for an exemption.
REPRESENTATIVE HUGHES said she could remove the word "likely" to
make language clearer.
CHAIR MICCICHE said he thought that would be the only thing that
might concern assessors.
4:01:52 PM
SENATOR EGAN asked if this language applied to the committee
substitute (CS).
REPRESENTATIVE HUGHES answered yes.
4:02:26 PM
CHAIR MICCICHE clarified that the CS doesn't mention kitchens at
all, so she would be free to remove the word "likely".
REPRESENTATIVE HUGHES answered yes.
4:02:48 PM
STEVE VAN SANT, State Assessor, Department of Commerce,
Community and Economic Development (DCCED), Anchorage, Alaska,
said he was available to answer questions on HB 40.
CHAIR MICCICHE said he would leave public testimony open and
bring the bill up next Thursday.
4:03:29 PM
There being no further business to come before the committee,
Chair Micciche adjourned the Community and Regional Affairs
Committee at 4:03 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Local Government 101 - Alaska Municipal League.pdf |
SCRA 2/21/2013 3:30:00 PM |
|
| Local Government 101 - Additional documentation distributed by AML at the 2-21 meeting.PDF |
SCRA 2/21/2013 3:30:00 PM |
|
| CSHB 40 CRA.pdf |
SCRA 2/21/2013 3:30:00 PM |
HB 40 |
| HB 40 Sponsor Statement (S)CRA 13Feb13.doc |
SCRA 2/21/2013 3:30:00 PM |
HB 40 |
| HB 40-1-2-020113-CED-N.pdf |
SCRA 2/21/2013 3:30:00 PM |
HB 40 |
| HB 40 side by side - original bill to CS (S)CRA 13Feb13.docx |
SCRA 2/21/2013 3:30:00 PM |
HB 40 |
| HB 40 - letter from Alaska Municipal League.pdf |
SCRA 2/21/2013 3:30:00 PM |
HB 40 |