02/21/2008 09:00 AM Senate FINANCE

CS FOR HOUSE BILL NO. 67(FIN) am                                                                                              
                                                                                                                                
     "An  Act   relating  to   a  mandatory  exemption   from                                                                   
     municipal property  taxes for certain  college property,                                                                   
     to a mandatory  exemption from municipal  property taxes                                                                   
     for  residences of  certain widows  or widowers,  and to                                                                   
     optional  exemptions from  municipal property  taxes for                                                                   
     property  of  certain fraternal  organizations  and  for                                                                   
     certain  residences  of law  enforcement  officers;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG, CO-SPONSOR,  addressed HB 67.  Rep.                                                                   
Gruenburg referred to HB 67 as  the "cop in the neighborhood"                                                                   
bill.   The  provision allows  a municipality  to provide  an                                                                   
exemption from  municipal property  taxes for peace  officers                                                                   
who move into a high crime neighborhood.   He maintained that                                                                   
having an officer  in the neighborhood is a  crime deterrent.                                                                   
He outlined the sections of the bill:                                                                                           
                                                                                                                                
     Sec.  1  extends  the  disabled   veteran  property  tax                                                                   
     exemptions  to widows  and widowers  of peace  officers.                                                                   
     He noted the  definitions used for this are  the same as                                                                   
     those in SB 204.                                                                                                           
                                                                                                                                
     Sec.  2 added  by Senator  Thomas  expands the  optional                                                                   
     municipal tax exemption for residences to 40,000.                                                                          
                                                                                                                                
     Sec. 3  was added by  Representative Meyer.   Originally                                                                   
     the  exemption  was  mandatory.   This  was  changed  to                                                                   
     optional to  allow municipalities to exempt  property of                                                                   
     a private  none profit four  year college  or university                                                                   
     that is accredited that is  not subject to the mandatory                                                                   
     exemption. He  added that other taxing  provisions would                                                                   
     still apply.                                                                                                               
                                                                                                                                
Representative  Gruenberg noted that  section 3 is  important                                                                   
to  a  facility  located on  the  Alaska  Pacific  University                                                                   
campus.                                                                                                                         
                                                                                                                                
     Sec. 4 provides the option  for municipalities to exempt                                                                   
     religious, charitable, education,  scientific, literary,                                                                   
     and fraternal  organizations.  Representative  Gruenburg                                                                   
     explained  that many  of the  facilities are  used as  a                                                                   
     meeting place and serve the entire communities.                                                                            
                                                                                                                                
Representative Gruenburg  purported that HB 67  has served as                                                                   
a repository  for many tax relief  provisions.  He  urged the                                                                   
Committee  to pass  HB 67  because it  provides property  tax                                                                   
relief to a wide variety of people and organizations.                                                                           
                                                                                                                                
Senator Elton asked  how the tax exemption effects  "full and                                                                   
true value" that is applied to the school funding formula.                                                                      
                                                                                                                                
Representative Gruenburg  was not certain. He  explained that                                                                   
the exemption  may trigger a round of  additional assessments                                                                   
or  trigger the  municipality  to look  at the  rest of  it's                                                                   
taxing structure.                                                                                                               
                                                                                                                                
10:50:17 AM                                                                                                                   
                                                                                                                                
Mr.  Van  Sant  explained  that HB  67  deals  with  optional                                                                   
exemptions  and  has  no  revenue impact  to  the  State.  He                                                                   
addressed   the    question   regarding   the    full   value                                                                   
determination.    Any  optional exemption,  authorized  by  a                                                                   
municipality  is put  back  into the  full  value, and  would                                                                   
thereby  not effect  school funding.    "If a  municipality's                                                                   
full value  is $100  and they  exempt optionally a  fraternal                                                                   
organization, for example, those  are put back in so the full                                                                   
value will remain  $100 even though the local  assessed value                                                                   
may be $85."   The full value  will not be effected  by this.                                                                   
For school  funding purposes  the 4 mills  would be  based on                                                                   
$100 rather than  $85.  He reiterated that  because these are                                                                   
all optional  exemptions it would  not have an impact  on the                                                                   
State.                                                                                                                          
                                                                                                                                
Mr. Van  Sant added a clarification:  Sec. 1 does  not extend                                                                   
the exemption to  widowers; it clarifies that  it removes the                                                                   
age  requirement.   The language  combines  the criteria  for                                                                   
disabled veterans  and widowers.  The language  is removed so                                                                   
that there is no age restriction for veterans.                                                                                  
                                                                                                                                
10:52:38 AM                                                                                                                   
                                                                                                                                
Rep.  Gruenburg  said the  effective  date needed  to  change                                                                   
because, if HB  67 was enacted now, the effective  date would                                                                   
be retroactive.                                                                                                                 
                                                                                                                                
Co-Chair Stedman  MOVED to  ADOPT Amendment 1,  25-LS0314/J.2                                                                   
Cook, 2/19/08.                                                                                                                  
                                                                                                                                
Co-Chair Stedman OBJECTED for purposes of clarification.                                                                        
                                                                                                                                
REPRESENTATIVE  CHENAULT,  Co-Sponsor,   explained  that  the                                                                   
amendment allows  for boroughs,  to charge cities  inside the                                                                   
borough,  for collecting  a tax  that is not  uniform to  the                                                                   
borough.  The amendment provides  for the borough to charge a                                                                   
fee to pay for purchases necessary for tax collection.                                                                          
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
There being NO OBJECTION, Amendment 1 was adopted.                                                                              
                                                                                                                                
Senator  Dyson asked  if there  would be  efforts to  combine                                                                   
legislation dealing with tax exemptions.                                                                                        
                                                                                                                                
10:55:19 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  stated the  intention  was  to provide  an                                                                   
opportunity  for discussion on  various proposed  legislation                                                                   
dealing with property tax exemption.                                                                                            
                                                                                                                                
Senator   Dyson  supported   combining   the  tax   exemption                                                                   
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Stedman said the provision  may fit into a long-term                                                                   
fiscal bill.                                                                                                                    
                                                                                                                                
HB  67   was  Heard  and   HELD  in  Committee   for  further                                                                   
consideration.