04/22/2025 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

            HB  13-MUNICIPAL PROPERTY TAX EXEMPTIONS                                                                        
                                                                                                                                
8:06:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT announced  that the  first order  of business                                                               
would  be SPONSOR  SUBSTITUTE  FOR  HOUSE BILL  NO.  13, "An  Act                                                               
relating  to  optional  municipal  property  tax  exemptions  for                                                               
certain long-term  rental units, certain mobile  home parks, real                                                               
property rented  to low-income families, real  property owned and                                                               
occupied as a  permanent place of abode, and  real property owned                                                               
by  first-time homebuyers."   [Before  the committee,  adopted as                                                               
the  working  document on  4/10/25,  was  the proposed  committee                                                               
substitute  (CS)  for  SSHB  13,  Version  34-LS0194\T,  Dunmire,                                                               
4/8/25 ("Version T").]                                                                                                          
                                                                                                                                
8:06:55 AM                                                                                                                    
                                                                                                                                
KYLE JOHANSEN,  Staff, Representative  Andrew Gray,  Alaska State                                                               
Legislature,  on behalf  of Representative  Gray, prime  sponsor,                                                               
gave opening  remarks on Version  T.   He said the  bill contains                                                               
five optional  municipal tax exemptions  for owners  that convert                                                               
from short-term  rental to long-term rental;  certain mobile home                                                               
park  renovation   projects;  properties  rented   to  low-income                                                               
families; people who  reside in owner occupied  homes; and owner-                                                               
occupied first-time home  buyers.  In response  to concerns about                                                               
the bill,  he reminded members  that ordinances are passed  by an                                                               
elected  body;  additionally, AS  29.26.100  ensures  that if  an                                                               
ordinance  were passed,  the  voters could  repeal  it through  a                                                               
referendum.                                                                                                                     
                                                                                                                                
8:11:07 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT  asked whether voters in  municipalities could                                                               
approve a property  tax exemption for something  not listed under                                                               
AS 29.45.050.  In other  words, she asked whether AS 29.45.050(a)                                                               
would allow the exemptions in Version  T to be approved by a vote                                                               
of the people in a municipality without the bill passing.                                                                       
                                                                                                                                
8:11:44 AM                                                                                                                    
                                                                                                                                
ANDREW   DUNMIRE,    Attorney,   Legislative    Legal   Services,                                                               
Legislative  Affairs Agency  (LAA), said  AS 29.45.050(a)  grants                                                               
voters  the  ability  to approve  a  residential  exemption  that                                                               
cannot exceed an assessed value of $75,000.                                                                                     
                                                                                                                                
8:12:35 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 8:12 a.m.                                                                                 
                                                                                                                                
8:13:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT questioned the impact of the bill.                                                                           
                                                                                                                                
MS. DUNMIRE  said the  bill would  add four  new options  into AS                                                               
29.45.050   that  would   permit  the   governing  body   of  the                                                               
municipality to adopt  any of the exemptions in  the bill without                                                               
going through  the voters.   Under  current law,  AS 29.45.050(a)                                                               
allows  a municipality  to adopt  a residential  exemption that's                                                               
limited to $75,000 as long as it's approved by the voters.                                                                      
                                                                                                                                
8:15:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLLAND sought  to  confirm that  the bill  would                                                               
open the bill up beyond the $75,000 limit in AS 29.45.050(a).                                                                   
                                                                                                                                
MR.  DUNMIRE stated  that  the $75,000  limit  in subsection  (a)                                                               
wouldn't apply to the exemptions proposed in Version T.                                                                         
                                                                                                                                
8:17:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT noted  that  public testimony  had been  left                                                               
open [from  3/27/25].  She closed  public testimony on HB  13 and                                                               
sought further questions from committee members.                                                                                
                                                                                                                                
8:18:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRAX referred  to page  2, Section  9, and  asked                                                               
what would happen  if the renter's income were  to increase above                                                               
30 percent  of their  income making them  no longer  eligible for                                                               
the  exemption.   He asked  whether  the landlord  would need  to                                                               
evict them or lose the tax exemption.                                                                                           
                                                                                                                                
MR. JOHANSEN  imagined that any  tenant would be  protected under                                                               
[the   Landlord  Tenant   Act];   furthermore,   he  shared   his                                                               
understanding  that the  landlord would  have the  right to  stop                                                               
renting to anyone if its lawful.                                                                                                
                                                                                                                                
8:21:12 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MEARS  pointed out  that  the  local government  that's                                                               
implementing these exemptions would have  the ability to add more                                                               
details.   In addition,  she speculated  that the  tenant's lease                                                               
would stipulate  a timeframe  for checking  in on  this exemption                                                               
and any potential increase in income.                                                                                           
                                                                                                                                
MR.  JOHANSEN confirmed  that the  bill  sponsor envisioned  that                                                               
sideboards would  be implemented  by the  municipalities building                                                               
these  programs.     He   agreed  with   the  comments   made  by                                                               
Representative Mears.                                                                                                           
                                                                                                                                
REPRESENTATIVE PRAX expressed  concern that sub-subparagraph (cc)                                                               
would prohibit the establishment of sideboards.                                                                                 
                                                                                                                                
CO-CHAIR HIMSCHOOT shared her understanding that this bill would                                                                
not be "reinventing the wheel," it would instead be applying                                                                    
some of the same definitions that are already in practice.                                                                      
                                                                                                                                
8:25:46 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HIMSCHOOT announced that CSSSHB 13, Version T would be                                                                 
held over.