Legislature(2005 - 2006)SENATE FINANCE 532

01/24/2006 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
= SB 54 PROTECTIVE ORDERS FOR SEXUAL ASSAULT
Moved CSSB 54(FIN) Out of Committee
= HB 217 FULL & TRUE VALUE OF TAXABLE MUNI PROP.
Heard & Held
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                         January 24, 2006                                                                                     
                             9:02 a.m.                                                                                        
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Lyda  Green convened the  meeting at approximately  9:02:28                                                          
AM.                                                                                                                           
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also Attending:  JASON  HOOLEY, Staff  to Senator  Fred Dyson;  PETE                                                          
FELLMAN, Staff to Representative John Harris                                                                                    
                                                                                                                                
Attending via Teleconference:  From Anchorage: STEVE VAN SANT, State                                                          
Assessor,   Central   Office,  Division   of   Community   Advocacy,                                                            
Department of Commerce, Community and Economic Development                                                                      
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 54-PROTECTIVE ORDERS FOR SEXUAL ASSAULT                                                                                      
                                                                                                                                
The Committee  heard from the bill's  sponsor and reported  the bill                                                            
from Committee.                                                                                                                 
                                                                                                                                
HB 217-FULL & TRUE VALUE OF TAXABLE MUNI PROP.                                                                                  
                                                                                                                                
The Committee heard from  the bill's sponsor and the State Assessor,                                                            
Department  of  Commerce,  Community  and  Economic  Development.  A                                                            
committee  substitute   was  adopted  and  the  bill   was  held  in                                                            
Committee.                                                                                                                      
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 54(JUD)                                                                                             
     "An  Act relating  to protective  orders  for crimes  involving                                                            
     sexual  assault or  stalking,  to notifications  to victims  of                                                            
     sexual  assault, and to mandatory  arrest for crimes  involving                                                            
     violation of protective orders and violation of conditions of                                                              
     release; and amending Rule 65, Alaska Rules of Civil                                                                       
     Procedure."                                                                                                                
                                                                                                                                
                                                                                                                                
This  was the third  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
JASON  HOOLEY, Staff  to Senator  Fred  Dyson, the  bill's  sponsor,                                                            
explained  that  committee  substitute,  Version  24-LS0132\B  would                                                            
change two  provisions. The  first being the  addition of the  words                                                            
"and sexual abuse" in the  bill's title on page 1 line 2. The second                                                            
change, which was requested  by the Department of Public Safety, was                                                            
the  addition of  language  pertaining to  the entry  of  protective                                                            
orders  into the State's  central  registry as specified  in  Sec. 3                                                            
page 2 lines 19 through 24.                                                                                                     
                                                                                                                                
Mr.  Hooley noted  that,  rather  than imposing  new  procedures  in                                                            
regards  to the  central  registry,  the language  in  Sec. 3  would                                                            
simply  require protective  orders to  be entered  into the  central                                                            
registry.                                                                                                                       
                                                                                                                                
In  response   to  a  request  from   Co-Chair  Green,  Mr.   Hooley                                                            
communicated  that  the rational  for  the inclusion  of  Sec. 3  is                                                            
included  in  the  analysis  section of  the  Department  of  Public                                                            
Safety's February 16, 2005 fiscal note #4.                                                                                      
                                                                                                                                
Co-Chair Green understood  the language to relate to peace officers.                                                            
                                                                                                                                
Mr.  Hooley  clarified  that  the  previous  committee  substitute,                                                             
Version  24-LS0132\N, had  included  a new provision  that  required                                                            
protective  order information to be  entered into the registry.  The                                                            
Department of  Public Safety suggested that instead  of adding a new                                                            
provision,  the language  be inserted  into an  existing Statute  to                                                            
which regulations  and procedures regarding such things  as domestic                                                            
violence orders already exist.                                                                                                  
                                                                                                                                
9:06:12 AM                                                                                                                      
                                                                                                                                
Co-Chair  Green communicated  that the changes  included in  Version                                                            
"B"  were recommended  by  the bill's  drafter  rather  than by  the                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken moved to  adopt committee substitute, Version "B" as                                                            
the working document.                                                                                                           
                                                                                                                                
There being no  objection, the Version "B" committee  substitute was                                                            
ADOPTED.                                                                                                                        
                                                                                                                                
In order  to  correct recent  criticism  regarding  his position  on                                                            
protective  orders, Senator Stedman  stated that current  protective                                                            
orders  statutes  "don't   have  enough  teeth"  in  them.  This  is                                                            
substantiated  by the  fact that  in one  recent case,  a woman  was                                                            
found  dead hours  after "a  particular  person"  was released  from                                                            
incarceration.  Furthermore, two women  with protective orders  have                                                            
died in  his Senate  district in  the past three  years. This  issue                                                            
must  be addressed.  He  has  worked  with both  Senator  Dyson  and                                                            
Senator Gretchen Guess on this issue.                                                                                           
                                                                                                                                
9:07:45 AM                                                                                                                      
                                                                                                                                
Senator Stedman  stated that  he takes "personal  offense"  to being                                                            
mischaracterized as someone  who "feels that the State's restrictive                                                            
restraining  orders are  too restrictive.  It is  actually just  the                                                            
opposite."  He would  appreciate his  position on  this issue  to be                                                            
clarified with the public.                                                                                                      
                                                                                                                                
9:09:01 AM                                                                                                                    
                                                                                                                                
Senator  Dyson stressed  that  it would  be "naïve"  for someone  to                                                            
assume  that a  protective  order  would insure  the  safety of  the                                                            
person. "It does not unfortunately."  While a protective order would                                                            
provide another  legal tool  for arrest in  the case of contempt  of                                                            
the order, it would not  prevent "the perpetrator from showing up at                                                            
their door  or confronting them in  a parking lot." A victim  should                                                            
not interpret  a  protective  order as  meaning that  they would  be                                                            
safe. However,  a victim should have  the right to be notified,  "in                                                            
real  time,  before  the conditions  of  restraint  of  the  alleged                                                            
perpetrator   are  changed."  While   this  notification   has  been                                                            
statutorily  required, sometimes that  notification "breaks  down in                                                            
execution."                                                                                                                     
                                                                                                                                
Senator Dyson stated that  Senator Stedman has raised a valid point.                                                            
While a protective order  is a tool that would allow law enforcement                                                            
to act,  "the order  in and of  itself does nothing  in real  world,                                                            
real  time to  protect  the  victim from  physical  violence  and/or                                                            
harassment."                                                                                                                    
                                                                                                                                
Co-Chair  Green observed  that several zero  fiscal notes  accompany                                                            
the bill. An updated sponsor statement had also been provided.                                                                  
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There being no objection,  CS SB 54(FIN) was REPORTED from Committee                                                            
with six new fiscal  notes: a Department of Corrections  zero fiscal                                                            
note dated  January 17, 2006; a zero  fiscal note dated January  18,                                                            
2006   from  the   Office   of  Public   Advocacy,   Department   of                                                            
Administration;  a zero fiscal note dated January  17, 2006 from the                                                            
Public  Defenders Agency,  Department  of Administration;  a  $4,200                                                            
fiscal note dated January  24, 2006 from the Criminal Records and ID                                                            
Division, Department  of Public Safety, a $10,000  fiscal note dated                                                            
January  24, 2006  from the  Alaska  State Troopers,  Department  of                                                            
Public Safety;  and a zero fiscal  note dated January 25,  2006 from                                                            
the Department of Law                                                                                                           
                                                                                                                                
Senator Dyson  thanked the Committee, his staff, and  the Department                                                            
of Public Safety for their efforts in developing this bill.                                                                     
                                                                                                                                
9:11:59 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
     HOUSE BILL NO. 217(title am)                                                                                               
     "An Act  relating to the determination  of full and  true value                                                            
     of  taxable  municipal  property   for  purposes  of  providing                                                            
     planning  assistance to the Department  of Education  and Early                                                            
     Development  and  the  legislature,   calculating  funding  for                                                            
     education,  calculating  school district  participating  shares                                                            
     for school  construction grants,  and calculating tax  resource                                                            
     equalization  payments  and excluding  from that determination                                                             
     the  value  of  property  in  certain  areas  detached  from  a                                                            
     municipality  and the value of  certain property involved  with                                                            
     oil and gas that is not taxed by a municipality."                                                                          
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Green noted that  the bill had been  held in Committee  in                                                            
order  to continue  discussion  and receive  additional information                                                             
regarding concerns that had been raised.                                                                                        
                                                                                                                                
PETE  FELLMAN,  Staff to  Representative  John  Harris,  the  bill's                                                            
sponsor,  explained  that  additional  testimony  pertinent  to  the                                                            
discussion  could   be  presented  by  Eddy  Jeans,  Department   of                                                            
Education  and Early Development,  Steve Van  Sant, State  Assessor,                                                            
and Dan Bockhorst,  both with the Department of Commerce,  Community                                                            
and Economic Development.                                                                                                       
                                                                                                                                
Co-Chair Green  asked for confirmation  that Mr. Bockhorst  was with                                                            
the Local  Boundary Commission,  Department  of Commerce,  Community                                                            
and Economic Development.                                                                                                       
                                                                                                                                
Mr. Fellman affirmed.                                                                                                           
                                                                                                                                
Mr.  Fellman  stated that  this  bill  would  provide "a  choice  to                                                            
communities"  that are considering  forming a borough. "That  choice                                                            
being that,  were there a pipeline  or gas property in the  proposed                                                            
borough boundaries,  their value could be excluded  from the overall                                                            
value of the proposed  borough. This would enable  proposed boroughs                                                            
to find other  ways to fund a borough that doesn't  include property                                                            
tax."  Such alternate  taxation methods  could  include utility  and                                                            
fuel taxes.                                                                                                                     
                                                                                                                                
Mr. Fellman  noted that the  State's Assessor,  Steve Van Sant,  has                                                            
developed and  would be explaining  two handouts: "Explanation  of 4                                                            
mill  Equivalency   (Local  Contribution  for  Education)   For  the                                                            
Proposed  Deltana  Borough"  and  "The  Full  Value  Determination"                                                             
[copies on file].                                                                                                               
                                                                                                                                
9:14:26 AM                                                                                                                    
                                                                                                                                
STEVE  VAN  SANT,  State  Assessor,  Central   Office,  Division  of                                                            
Community Advocacy,  Department of Commerce, Community  and Economic                                                            
Development   testified  via  teleconference   from  Anchorage   and                                                            
explained  that the  Department  utilizes Full  Value Determination                                                             
(FVD) to  compare the wealth  of different  municipalities  based on                                                            
the community's property tax.                                                                                                   
                                                                                                                                
Mr. Van  Sant exampled some  of the tax  methods and tax  exemptions                                                            
that different  boroughs have  incorporated.  Of the 16 boroughs  in                                                            
the State,  twelve  levy property  taxes. The  Fairbanks North  Star                                                            
Borough  does  not  levy  a  personal  property   tax,  however  the                                                            
Municipality  of Anchorage  does. Fairbanks  has exempted the  first                                                            
$20,000 of residential  property, and Anchorage has recently allowed                                                            
that  exemption.  The  Mat-Su  Borough  exempts up  to  $250,000  of                                                            
business  inventory  as well  as all  business  equipment;  however,                                                            
Anchorage does not.                                                                                                             
                                                                                                                                
Mr.  Van Sant  continued  that,  in  order to  compare  boroughs  as                                                            
"apples to  apples and not apples  to oranges", a formula,  referred                                                            
to as the "Full Value Determination" has been developed.                                                                        
                                                                                                                                
Mr. Van  Sant explained  that the  FVD formula  utilizes "the  total                                                            
value of a  municipality that could  be taxed should they  decide to                                                            
levy a property  tax". Once that value  is determined, the  boroughs                                                            
could be compared.  The FVD for each  municipality is based  "on the                                                            
full value  of all the  taxable property  within their boundaries".                                                             
That value  is utilized  by the  Department of  Education and  Early                                                            
Development  to calculate  the municipality's  "4-mill equivalency"                                                             
education contribution.                                                                                                         
                                                                                                                                
Mr. Van Sant referred  to the handout titled "Explanation  of 4 mill                                                            
Equivalency  (Local Contribution  for  Education)  For the  Proposed                                                            
Deltana Borough". The top  portion of that handout defines a mill as                                                            
being  "one-one-thousandth  of  a dollar."  Therefore,  the  minimum                                                            
local  contribution  for  a  $1,000 property  value  would  be  four                                                            
dollars. The minimum local  contribution for a $100,000,000 property                                                            
value would be $400,000.                                                                                                        
                                                                                                                                
Mr. Van Sant  continued that, as reflected  on the lower  portion of                                                            
that  handout,  the estimated  valuation  of  the  proposed  Deltana                                                            
Borough  would be  $182,078,000. This  area also  includes the  Pogo                                                            
Mine, which was  valued at $125,000,000 in 2005. He  noted that that                                                            
value  would  be  expected  to  double  when  mine  construction  is                                                            
completed  in  the  near future.  In  addition,  the  area  includes                                                            
$194,500,000 in oil and gas property.                                                                                           
                                                                                                                                
Mr.  Van  Sant  pointed   out  that  the  "Explanation   of  4  mill                                                            
Equivalency  (Local Contribution  for  Education)  For the  Proposed                                                            
Deltana Borough"  handout also depicts  how the Mandatory  Education                                                            
Contribution  (MEC) would  be calculated for  the proposed  Borough.                                                            
Based  on  the  Borough's  $182,078,000  estimated   valuation,  the                                                            
minimum MEC  local contribution would  be $728,312. The minimum  MEC                                                            
for the Pogo Mine would  be $500,000. Those two numbers would equate                                                            
to a minimum MEC obligation of approximately $1,200,000.                                                                        
                                                                                                                                
Mr.  Van  Sant continued   that were  the  oil  and  gas  properties                                                            
included  within its boundaries,  the Borough  would be required  to                                                            
contribute an  additional $778,000 MEC. It should  be noted that the                                                            
MEC  required  of the  borough  on  the value  of  the gas  and  oil                                                            
properties  within its boundaries  would reduce the amount  of money                                                            
the State  would receive  under its ability  to collect 20  mills on                                                            
the value of  oil and gas properties.  In other words, were  the oil                                                            
and gas properties excluded  from the borough, the revenue the State                                                            
would collect  from the 20  mills on the  value of those  properties                                                            
would amount to $3,900,000.  Otherwise, the State's revenue would be                                                            
lowered to approximately $3,222,000.                                                                                            
                                                                                                                                
Mr. Van  Sant stated that  even were the borough  to exempt  the oil                                                            
and gas entities  from its local property  taxes, the borough  would                                                            
be required  to  replace the  $778,000  MEC through  other  taxation                                                            
means. "That's  difficult to do if you're talking  about a sales tax                                                            
or utility  tax, or  whatever it might  be. It  just doesn't  make a                                                            
whole lot  of sense when  we talking about  what we call  'centrally                                                            
assessed property'. That's  property assessed by the State of Alaska                                                            
and in this  case the State  is already getting  tax dollars  off of                                                            
it." Therefore,  were the oil and  gas properties excluded  from the                                                            
Borough's  FVD and  were no  Borough  property taxes  levied,  "this                                                            
Legislation is  a wash: they don't have to include  it in their full                                                            
value, they  don't have to come up  with the money, and they're  not                                                            
going to be taking any out of the State's pockets."                                                                             
                                                                                                                                
Mr.  Van  Sant continued   that were  the  oil  and  gas  properties                                                            
included in the  Deltana FVD, the total minimum MEC  would amount to                                                            
$2,000,000.  Absent the oil  and gas properties,  the minimum  local                                                            
MEA would be $1,200,000.                                                                                                        
                                                                                                                                
9:20:00 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  stated that in a recent discussion  about the bill,                                                            
a question arose  in regards to borough and first  class cities that                                                            
do not  have property  taxes.  He referred  to language  in Mr.  Van                                                            
Sant's "The Full Value  Determination" handout that states "the full                                                            
value 'equalizes' the values  in all municipalities by measuring the                                                            
local  'wealth'  using the  total  taxable  value as  the  measuring                                                            
stick."  The Fairbanks  North Star  Borough has  developed a  market                                                            
value  system  through  which to  measure  the  borough's  valuation                                                            
increase  or   decrease.  Thus  the   Borough's  4-mill   obligation                                                            
calculation could be automatically  increased or deceased each year.                                                            
However,  there  is  no  "mechanism  in  place"  through  which  the                                                            
Legislature  could  annually  revisit  the valuations  of  the  four                                                            
boroughs  that  do  not levy  property  taxes.  To  that  point,  he                                                            
suggested that  consideration be given to incorporating  a measuring                                                            
mechanism in this legislation.                                                                                                  
                                                                                                                                
9:21:39 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  referred  to a  handout  developed by  his  office                                                            
titled "Required  Local Contribution  for Schools Residents  of Four                                                            
Boroughs  Elected Alternate  Method  of Payment  -  Not by  Property                                                            
Tax". The four  communities include  the Aleutian East Borough,  the                                                            
Lake &  Peninsula  Borough, the  Denali Borough,  and the  Northwest                                                            
Arctic Borough.  The handout depicts  the 4-mill MEC requirement  of                                                            
those  communities' FVD  from 1995  through 2006.  This handout  was                                                            
accompanied by  another handout titled "Required Local  Contribution                                                            
for Schools  Residents of Six First  Class Cities Elected  Alternate                                                            
Method of Payment - Not  by Property Tax". That handout depicted the                                                            
MEC based on the FVD of  Galena, Kake, Hoonah, St. Mary's, Hydaburg,                                                            
and Tanana.  Since the assessed  values of  many of six first  class                                                            
cities have remained  flat over the time period of  FY 95 through FY                                                            
06, this might be the time  to incorporate a system through which to                                                            
review the FVD of those  communities "that have chosen not to have a                                                            
property  tax and ask  that the  State Assessor  go and visit  those                                                            
areas."  He noted that  Mr. Van  Sant had visited  the community  of                                                            
Delta in his  effort to determine  their FVD, their MEC,  and "their                                                            
contribution  to government". To that  point, he asked Mr.  Van Sant                                                            
his opinion on this suggestion.                                                                                                 
                                                                                                                                
9:22:49 AM                                                                                                                    
                                                                                                                                
Mr. Van Sant  voiced support for the  suggestion; however,  he noted                                                            
that  due to  the fact  that he  is the  sole staffer  in the  State                                                            
Assessor's Office, "It is difficult to get around in the State".                                                                
                                                                                                                                
Mr. Van Sant continued  that he is currently endeavoring  to develop                                                            
a model through  which to determine the FVD of the  Lake & Peninsula                                                            
Borough. "It's  just impossible for one person to  get around in the                                                            
State" in addition  to having to provide  education and training  to                                                            
the different  boroughs and conducting FVDs on cities  and boroughs.                                                            
To that  point, he shared  that a recent  request for an  additional                                                            
staff position had been denied.                                                                                                 
                                                                                                                                
Mr. Van Sant stated  that the Assessors Office must  conduct FVDs on                                                            
95 cities and  boroughs, and "luckily"  many, such as the  Fairbanks                                                            
North  Star  Borough,  have  their own  assessors  who  conduct  the                                                            
majority of the FVD effort.                                                                                                     
                                                                                                                                
9:24:14 AM                                                                                                                    
                                                                                                                                
Mr. Van  Sant noted however,  that other areas,  such as the  Lake &                                                            
Peninsula Borough,  are difficult to get to on a regular  basis. The                                                            
lack of funding for his Office would be an obstacle.                                                                            
                                                                                                                                
Co-Chair  Wilken  asked  for an  estimate  of  the number  of  hours                                                            
required to develop the Deltana FVD.                                                                                            
                                                                                                                                
Mr. Van  Sant responded  that, in  addition to  an untold number  of                                                            
office hours, the effort required "800 man hours in the field".                                                                 
                                                                                                                                
9:24:53 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  understood  therefore  that  the  effort  required                                                            
"between one-third and one-half of a man year".                                                                                 
                                                                                                                                
Mr. Van  Sant affirmed.  He reminded  that the  Deltana FVD  started                                                            
"from scratch." This would be the case with numerous others.                                                                    
                                                                                                                                
9:25:21 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  opined that one of  the most interesting  pieces of                                                            
information that  Legislators are provided each year  is the "Alaska                                                            
Taxable"  book [copy  not provided].  That book  provides the  basic                                                            
information "about how  this State runs their government and the way                                                            
different  areas have chosen  through our  eleven different  ways of                                                            
organizing  to fund  different  governments". The  creative  manners                                                            
through which  this State of 640,000 people has addressed  its local                                                            
needs are "fascinating".                                                                                                        
                                                                                                                                
9:25:47 AM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken shared  being fascinated  by Mr.  Van Sant's  work.                                                            
While the  work is difficult  to address,  the information  that has                                                            
been developed  is good and reliable. To that point,  he stated that                                                            
the "potshot"  efforts  that have  been directed  at Mr. Van  Sant's                                                            
work "have come up unsuccessful".                                                                                               
                                                                                                                                
Co-Chair Wilken noted that  while this is a good bill, this might be                                                            
"an opportune  time"  to "up  the profile  of how  we ascertain  the                                                            
values so that  all of Alaskans are paying their fair  share towards                                                            
education".  Therefore,  he  requested  that  the  bill be  held  in                                                            
Committee  in order for  this "important  discussion" to occur.  The                                                            
determination could be  that staff should be added to the Assessor's                                                            
Office.                                                                                                                         
                                                                                                                                
9:26:54 AM                                                                                                                    
                                                                                                                                
Co-Chair Green commented  that, in that case, the fiscal notes would                                                            
require revision.  Further discussion  with the bill's sponsor,  Mr.                                                            
Van Sant,  the Department  of Education and  Early Development,  and                                                            
others should transpire.                                                                                                        
                                                                                                                                
9:27:31 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  asked Mr. Van Sant  to assist the Committee  in the                                                            
development   of  an  appropriate   fiscal  note.  Were   it  deemed                                                            
acceptable, it would be formalized.                                                                                             
                                                                                                                                
9:27:50 AM                                                                                                                    
                                                                                                                                
Mr. Van Sant affirmed that he would work on that.                                                                               
                                                                                                                                
With Co-Chair  Green's concurrence, Co-Chair Wilken  offered to work                                                            
with Mr. Van  Sant and others in developing  a committee  substitute                                                            
to  address the  issue  at hand.  In anticipation  of  developing  a                                                            
committee substitute  that would be acceptable to  the Committee, he                                                            
asked Mr. Van  Sant to work on developing a mechanism  through which                                                            
to determine the FVD on communities throughout the State.                                                                       
                                                                                                                                
Mr. Van Sant agreed.                                                                                                            
                                                                                                                                
9:28:34 AM                                                                                                                    
                                                                                                                                
Senator Stedman noted that  of the six first class cities identified                                                            
in Co-Chair  Wilken's handout, the  small village of Hydaburg  might                                                            
cease to  exist in the future  due to a  decrease in population  and                                                            
there being  no economic base. He  noted that Kake's population  has                                                            
dropped by one third.                                                                                                           
                                                                                                                                
Co-Chair Green observed that that would "change the landscape".                                                                 
                                                                                                                                
Senator Stedman noted that  the community of Kake is over 1000 years                                                            
old.                                                                                                                            
                                                                                                                                
9:30:02 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  asked Mr. Fellman whether the substance  of Co-Chair                                                            
Wilken's comments had previously been considered.                                                                               
                                                                                                                                
Mr. Fellman replied in the negative.                                                                                            
                                                                                                                                
Co-Chair  Green stated that  in order to  address the concerns  that                                                            
have been raised, further work would be conducted on the bill.                                                                  
                                                                                                                                
9:30:33 AM                                                                                                                    
                                                                                                                                
Senator Olson  asked the number of  boroughs that have exempted  all                                                            
or a  significant  portion of their  property  taxes. He  understood                                                            
that Fairbanks had no personal property tax.                                                                                    
                                                                                                                                
9:31:17 AM                                                                                                                    
                                                                                                                                
Mr. Van  Sant  affirmed that  neither Fairbanks  nor  Valdez levy  a                                                            
personal  property  tax. The  City  of Valdez  does  however levy  a                                                            
tanker tax.                                                                                                                     
                                                                                                                                
Senator  Olson  asked   for  further  clarification   regarding  the                                                            
exemption of the first $20,000 of residential property taxes.                                                                   
                                                                                                                                
Mr. Van  Sant  communicated that  AS 29.45.050  contains  a list  of                                                            
optional exemptions  allowed to municipalities.  One of those  would                                                            
allow  a  municipality  to  exempt  up  to  $20,000  of residential                                                             
property.  The communities  of Fairbanks,  the City  of Valdez,  the                                                            
North Slope,  Borough, the  Municipality of  Anchorage, the  Bristol                                                            
Bay Borough, and the Kenai Borough have allowed this exemption.                                                                 
                                                                                                                                
9:32:23 AM                                                                                                                    
                                                                                                                                
Senator Olson,  noting the  lack of calls  in regards to this  bill,                                                            
specifically  asked the  sponsor about  the "local  input" from  the                                                            
communities of Delta and Greely.                                                                                                
                                                                                                                                
9:32:44 AM                                                                                                                    
                                                                                                                                
Mr.  Fellman  responded  that  this  issue  has  been  underway  for                                                            
approximately  two years. There has been a lot of  discussion. Delta                                                            
Junction  is  a community  that  is fairly  split  on  the issue  of                                                            
forming a borough. However,  this legislation "is really an issue of                                                            
choice"; it would not "force  or mandate" that a borough exclude gas                                                            
and oil  properties  "from a  proposed borough  funding mechanism".                                                             
Therefore,  people are  against the  formation of  a borough  "don't                                                            
really care."  People who  support the formation  of a borough  have                                                            
weighed in favor of the bill.                                                                                                   
                                                                                                                                
9:33:58 AM                                                                                                                    
                                                                                                                                
Senator Olson asked whether  the community might be equally split on                                                            
the issue.                                                                                                                      
                                                                                                                                
9:34:06 AM                                                                                                                    
                                                                                                                                
Mr. Fellman  communicated  that it  would be  approximately a  50/50                                                            
split even though the community  of Delta has changed quite a bit in                                                            
last few years due to the  development of the anti-ballistic missile                                                            
site.                                                                                                                           
                                                                                                                                
9:34:35 AM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  clarified for the  record that while the  Fairbanks                                                            
North Star  Borough  does not have  personal property  tax, it  does                                                            
have  a real  property  tax. The  City  has opted  to  exempt up  to                                                            
$20,000 off real property taxes.                                                                                                
                                                                                                                                
Co-Chair Green ordered the bill HELD in Committee.                                                                              
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 9:35:17 AM                                                                       

Document Name Date/Time Subjects