Legislature(2023 - 2024)BARNES 124
04/06/2023 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB70 | |
| HB69 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 70 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 70-MUNICIPAL PROPERTY TAX EXEMPTIONS
8:03:50 AM
CHAIR MCCORMICK announced that the first order of business would
be HOUSE BILL NO. 70, "An Act relating to property exempt from
municipal taxation."
8:04:18 AM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature, as
prime sponsor, thanked the committee for hearing HB 70 and
introduced his staff to give an overview of the bill.
8:04:43 AM
MICHAELLA ANDERSON, Staff, Representative Frank Tomaszewski,
Alaska State Legislature, gave a brief overview of HB 70 on
behalf of Representative Tomaszewski, prime sponsor. She
paraphrased the sponsor statement [included in the committee
packet] which read as follows [original punctuation provided]:
House Bill 70 adds new language exempting non-
profits from municipal taxation on certain properties.
This includes parking lots owned by non-profits and
used for parking or other uses free of charge. This
also includes property of a store operated by a non-
profit that distributes food, shelter, clothes, or
health care for below market value or free.
Additionally, this maintains a non-profit's tax
exemption if they rent out their property to another
non-profit.
The Fairbanks Community Food Bank was founded in
1982 in the midst of a recession. People were
struggling to put food on their table, but stores had
an excess and food was going to waste. While in the
first year they collected and distributed a few
thousand pounds of food to a couple hundred people,
they now collect and distribute approximately five
million pounds of food.
Food banks and other charitable non-profits are a
pillar of our communities. They help our communities'
least fortunate when they need basic goods and
services. Of course, many nonprofits turn to
fundraising and facility rentals to keep their lights
on and doors open so they can continue to provide
their essential services.
This bill aims to support our non-profits in a
time of economic uncertainty in our state. With
revenues being down and permanent fund dividends being
cut creating a regressive tax on our least fortunate,
we must help those who help those in need.
MS. ANDERSON pointed out locations on a service map [copy
included in the committee packet], showing all the areas that
the Fairbanks Community Food Bank has assisted with "food
through shipping."
8:06:38 AM
REPRESENTATIVE HIMSCHOOT asked if Representative Tomaszewski's
office had spoken with any local municipalities about the
possible impact of HB 70 on local revenue.
MS. ANDERSON replied that there have been conversations with the
Fairbanks North Star Borough (FNSB) on potential minor changes
in the bill language. She noted she has not reached out to any
other municipalities.
REPRESENTATIVE HIMSCHOOT questioned any potential impacts to
education funding in terms of how the cap is related to property
tax.
MS. ANDERSON replied that she can provide the answer at a later
date.
REPRESENTATIVE HIMSCHOOT expressed the understanding that this
would be a state statute governing at the local level, as it
would be removing some of the tax base at the local level.
Because of this, she inquired whether there would be a tax
reimbursement.
MS. ANDERSON replied that staff will research this issue and
provide the committee with clarification at a later date. She
suggested that there would not be a loss of revenue, as the
assessment is new revenue.
REPRESENTATIVE TOMASZEWSKI explained that the food bank
traditionally has had no property taxes, and the assessment is
new to the municipality.
REPRESENTATIVE HIMSCHOOT expressed support for local control.
She stated she would further investigate HB 70.
8:09:41 AM
REPRESENTATIVE RUFFRIDGE, [regarding Section 1 of HB 70, which
lists property that is exempt from taxation], referenced
[paragraph (3)], beginning on page 2, line 16, which read:
(3) property used exclusively for nonprofit religious,
charitable, cemetery, hospital, or educational
purposes;
REPRESENTATIVE RUFFRIDGE questioned why the additional language
[proposed on page 3, line 19, through page 4, line 2] is
necessary and not covered already by paragraph (3).
MS. ANDERSON replied that the intent of the added language is to
make explicit in statute that the other instances would be
exempt.
8:10:43 AM
REPRESENTATIVE MCCABE requested confirmation that the City of
Fairbanks is attempting to tax the foodbank, which is a
nonprofit that does not make money.
REPRESENTATIVE TOMASZEWSKI responded that the food bank brings
in food donated by many organizations and gives the food away
for free.
MS. ANDERSON clarified that it is FNSB, not the City of
Fairbanks.
REPRESENTATIVE MCCABE expressed the understanding that the food
bank does not have any income except what is donated, and the
food bank would have to find a source of revenue to pay taxes to
FNSB.
REPRESENTATIVE TOMASZEWSKI expressed uncertainty concerning the
food bank's income sources. He suggested that it is mostly run
on grants and does not generate very much money.
8:13:00 AM
MS. ANDERSON gave the sectional analysis for HB 70 [included in
the committee packet] which read as follows [original
punctuation provided]:
Section 1: Amends AS 29.45.0303(a) to add new
subsections (11) and (12)
(11): Adds parking lots
(A) owned by organizations incorporated
under state law being exempt under 26 U.S.C.
501(c)
(B) that is used for parking or other use
free of charge
(12): Adds real and personal property of a store
operated by organizations incorporated under
state law being exempt under 26 U.S.C. 501(c) if
the store
(A) deals with exclusively donated inventory
of food, shelter, clothes, or health care
distributed at no cost to needy individuals
(B) sells merchandise below market value to
support a literacy program or a program
providing needy persons with food, shelter,
clothes, or health care free of charge.
Section 2: Amends AS 29.45.030 to add a new subsection
(o) stating organizations exempt from (a)(11) or
(a)(12) may lease property and still qualify if
(1): the leasing organization is incorporated
under state law being exempt under 26 U.S.C.
501(c) and that organization uses the property
for an exempt activity under (a)(11) or (12)
(2): the lease payments are not the product of
the owner's main profit motive
(3): The amount charged is incidental and
reasonable for the exempt use of the property not
exceeding operational requirements for the
activity.
8:15:00 AM
REPRESENTATIVE HIMSCHOOT questioned whether it was a local
decision to tax a parking lot.
MS. ANDERSON offered her understanding that it is under the
discretion of local control.
[HB 70 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 70 Fiscal Note CCED.pdf |
HCRA 4/6/2023 8:00:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |