CS FOR HOUSE BILL NO. 264(CRA)                                                                                                
                                                                                                                                
     "An  Act  allowing  a deferral  of  municipal  property                                                                    
     taxes on  the increase  in the  value of  real property                                                                    
     attributable  to  subdivision  of  that  property;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:31:14 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for   CSHB  264(CRA),  Work   Draft  27-LS1090\X                                                                    
(Bullard, 4/14/12).                                                                                                             
                                                                                                                                
Mr. Peterson  stated that Sections  1 to 3 of  the committee                                                                    
substitute  would  exclude  the   value  of  the  lease-hold                                                                    
interest on  the properties for  the purpose  of determining                                                                    
the  full  and  true  value  by the  state,  only  if  local                                                                    
government chooses to exempt that property from taxation.                                                                       
                                                                                                                                
Co-Chair  Stedman  REMOVED  his OBJECTION.  There  being  NO                                                                    
FURTHER OBJECTION, Work Draft 27-LS1090\X was ADOPTED.                                                                          
                                                                                                                                
9:32:19 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:22 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CHRISTOPHER  CLARK,   STAFF,  REPRESENTATIVE   CATHY  MUNOZ,                                                                    
looked at  Sections 1  and 4, and  stated that  the property                                                                    
deferral   was   an   option  allowed   to   municipalities.                                                                    
Municipalities could defer any  tax increase associated with                                                                    
subdivided  property. The  intent was  to encourage  housing                                                                    
development.  You could  defer the  tax increase  for up  to                                                                    
five years, and the deferral would  end as soon as a lot was                                                                    
sold or a  new home or commercial building was  built on the                                                                    
lot.  He  stated  that  Sections  5 and  6  related  to  the                                                                    
municipal tax cap.                                                                                                              
                                                                                                                                
9:35:15 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman discussed the  fiscal notes in the members'                                                                    
packets.                                                                                                                        
                                                                                                                                
JOHANNA BALES, DEPUTY DIRECTOR,  TAX DIVISION, DEPARTMENT OF                                                                    
REVENUE  (via teleconference),  testified  the  DOR and  the                                                                    
governor were  against Sections 5  and 6 of the  bill. Those                                                                    
Sections  removed   the  municipal  tax  cap   on  petroleum                                                                    
property   and   other    property   within   municipality's                                                                    
jurisdiction.                                                                                                                   
                                                                                                                                
RANDY HOFFBECK,  CHIEF OF STAFF, NORTH  SLOPE BOROUGH, spoke                                                                    
to Sections 5 and 6 of the  bill. He stated that the tax cap                                                                    
did not  limit the total amount  of money in tax  that could                                                                    
be  collected  by a  municipality,  but  parse it  into  two                                                                    
sections:  operation and  debt. The  provision would  remove                                                                    
the  225  percent cap,  and  allow  the municipalities  more                                                                    
flexibility to  use the money  in the most  efficient manner                                                                    
possible. Currently,  in order to  collect a portion  of the                                                                    
debt, the North  Slope Borough had to cycle  money through a                                                                    
bond market by selling general obligation debt.                                                                                 
                                                                                                                                
Senator  Olson pointed  out that  he had  a letter  from the                                                                    
mayor of Juneau that expressed support of the legislation.                                                                      
                                                                                                                                
Senator  Olson MOVED  to  report SCS  CSHB  264(FIN) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB 264(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation  and with  a previously  published zero                                                                    
fiscal note: FN2(DCCED),  and a new zero fiscal  note by the                                                                    
Senate Finance Committee for the Department of Revenue.