Legislature(2013 - 2014)BUTROVICH 205
02/28/2013 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 40 | TELECONFERENCED | |
HB 40-MUNICIPAL TAX EXEMPTION: FARM STRUCTURES
3:32:43 PM
CHAIR MICCICHE announced HB 40 to be up for consideration [CSHB
40(CRA) was before the committee].
3:33:09 PM
GINGER BLAISDELL, staff to Representative Hughes, sponsor of HB
40, reviewed that this measure was introduced to encourage
agriculture throughout the state and to encourage food storage
for the purposes of having longer sustainable food products
available on our shelves for human or animal consumption, and
also in the event there is a disaster.
She said the bill allows a municipality the option to entertain
a tax exemption, either fully exempt or a percentage, for a
building that is 100 percent for food storage or production. It
must be 100 percent related to a farming activity, which
disqualifies a lot of buildings that may be partially for food
and partially for some other purpose. The individual must derive
at least 10 percent of his/her annual income from that farming
activity.
3:34:43 PM
CHAIR MICCICHE opened public testimony.
3:34:51 PM
At ease from 3:34 to 3:35.
3:35:43 PM
BARBARA MILLER, representing herself, Wasilla, Alaska, opposed
HB 40 saying it would cost the taxpayers of MatSu roughly $3
million more annually in addition to the many millions of
dollars in subsidies farmers get due to their land assessments
of only $350 an acre. There are many homeowners on one or two
acres with a house who have at least a $175,000 assessment and
they are subsidizing the farmer who has 500 acres. Additionally,
she said old structures should not be included in the bill; only
new ones should since the old structures are already paid for.
On line 4, "totally exempt" should be deleted, because the
farmer should have some skin in the game instead of getting a
free ride on an already extremely generous subsidy. In line 6,
there shouldn't be any leasing at all. If this happens, the
farmer then gets revenue for property that has little or no tax
bill attached so he could actually be making a big profit with
little or no expenditure, again, at the expense of the borough
taxpayer. On line 7, 10 percent is ridiculous; if a farmer earns
that little on his income from farming, he is not a farmer. It
should be 100 percent before the farmer gets any exemption or
that person could not be classified as a farmer.
3:37:19 PM
SENATOR BISHOP joined the meeting.
MS. MILLER continued that MatSu farmers sell 75 percent of their
products to Anchorage, yet the taxpayers of the MatSu subsidize
100 percent of this already too generous tax exemption. She
supported farming as a business, but it should be run as a
business not as a private club.
3:38:29 PM
CHAIR MICCICHE, finding no further comments, closed public
testimony.
3:39:00 PM
SENATOR GIESSEL moved to report CSHB 40(CRA), version 28-
LS0229\N from committee to the next committee of referral with
individual recommendations and attached zero fiscal note.
3:39:27 PM
CHAIR MICCICHE objected for purpose of discussion. He asked Ms.
Blaisdell to comment on Ms. Miller's testimony.
3:40:00 PM
MS. BLAISDELL responded that when this bill was originally
drafted, they thought it was just for property owned by the
farmer, but they found that many farms are leased to new young
families that actually work and manage the whole farm. The lease
part seemed to cause a little strife for those who do not
actually own the land, because their lease cost would go up as
long as the property is exempt or there is some kind of tax
value that is lessened a little bit. It didn't seem that it
would be going to the actual land owner, but that the savings
would be passed onto the lessor. They know of only a couple of
families leasing a farm, because they can't afford to purchase
the land.
3:41:07 PM
CHAIR MICCICHE asked for the actual impact to MatSu.
MS. BLAISDELL responded that she spoke with the MatSu tax
assessor who said if 50 percent of a building would be eligible
for food storage or production it would take him so much work to
go into every single building and determine what the 50 percent
is. Is it volume? Is it square footage of the floor or of the
upstairs full of hay and the downstairs is doing something else?
So they changed it to the entire building to be used for food
storage and production. When it was a 50 percent consideration,
the assessor thought the impact would be slightly more than $3
million. Being 100 percent for food storage and production would
bring that down significantly, but he couldn't give her a
specific number since he hadn't been inside all of those
buildings to determine that.
3:42:31 PM
CHAIR MICCICHE noted that there wasn't any opposition from AML
or the MatSu Borough; and no other municipality was testifying.
SENATOR GIESSEL said that might be because the bill says "may".
But she agreed with Ms. Miller on the line 7 language that
deriving at least 10 percent of the person's yearly gross from
farming activity seemed extremely minimal and it, in fact, made
her uncomfortable.
3:43:54 PM
CHAIR MICCICHE asked staff about the 10 percent.
MS. BLAISDELL replied that the 10 percent was used, because it
is the same as that used by the state and federal governments in
the Agriculture Bill for a farmer's income. They kept it at 10
percent, because numerous farmers have one spouse working the
farm as the primary income and the other spouse has a job
somewhere else that actually pays for the farm. So, if the farm
makes $100,000 a year and the job brings in $100,000, it all
goes to pay for the farm; it's more of a lifestyle choice. Ten
percent still shows that you're in the farming business as a
business and selling goods, and they felt that anyone who wants
to engage in the business of food should be somehow able to
receive a benefit, because it's so important to have fresh food
on our shelves.
3:45:43 PM
SENATOR BISHOP said everyone is cognizant of food security and
hopefully this is a step in the right direction to revitalize
the industry and grow it a little bit.
3:46:49 PM
CHAIR MICCICHE said the battle occurs in the Assembly Chambers,
not in the legislature. As a former small town mayor he knew how
painful it was when the legislature made some of these
exemptions that are "shall"; this is a "may", so locals can
decide. He hoped growing food would be supported by the
municipalities.
3:47:39 PM
CHAIR MICCICHE removed his objection and finding no further
objections, announced that CSHB 40(CRA) moved from committee.
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