04/12/1995 01:40 PM Senate CRA

  CSHB 86(CRA) (title am) MUNICIPAL PERSONAL PROPERTY TAXATION                
                                                                              
 SENATOR TORGERSON introduced  CSHB 86(CRA) (title am)  as the next            
 order of business.                                                          
                                                                               
 REPRESENTATIVE MARK HANLEY, prime sponsor of HB 86, explained that            
 the legislation allows municipalities to exempt or partially exempt           
 personal property from ad valorem taxes.  It also allows                      
 municipalities to levy a flat tax on personal property that has               
 been exempted.                                                                
                                                                               
 Representative Hanley noted that the 18th Alaska State Legislature            
 passed SSHB 263, which allowed the exemption of certain types of              
 personal property from taxation, but did not allow for a flat rate            
 tax to be levied as was intended.  The legislation before the                 
 committee is clean-up legislation, and in addition to allowing the            
 flat tax, wording has been changed to allow exemption of any type             
 of personal property, as defined in AS 29.71.800 (16), rather than            
 listing each item.                                                            
                                                                               
 TAPE 95-12, SIDE B                                                            
 Number 001                                                                    
                                                                               
 REPRESENTATIVE HANLEY noted that this is an option for the                    
 municipalities and will give them more flexibility in their tax               
 structure.  It does not affect the amount of money that comes to              
 the state, nor the assessments for any other purposes.                        
                                                                               
 Number 015                                                                    
                                                                               
 SENATOR TORGERSON commented that the only part of the bill that he            
 had even a little problem with was the procedure for the appeal and           
 the request that the municipalities would include that procedure in           
 their flat tax ordinance.  His concern was that an appeal procedure           
 could be substantially different from municipality to municipality,           
 based on what was adopted by that particular group.  However, he              
 has discussed this with the state assessor and he convinced him               
 that it is probably something that couldn't be put into statute and           
 is best left at the local level.                                              
                                                                               
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 MAYOR DON LONG of Barrow, President of the Alaska Municipal League,           
 testifying from Barrow, stated the Alaska Municipal League's                  
 support for HB 86.                                                            
                                                                               
 Mayor Long said the bill offers municipalities an alternative that            
 may significantly reduce the administrative costs of property                 
 valuation.  It also allows communities the flexibility to design a            
 tax on personal property that meets the needs of that community.              
                                                                               
 Mayor Long pointed out that over the past several years the state             
 has asked its municipalities to take over and pay for more and more           
 state programs and services, and he said it is essential that the             
 state also provide municipalities with more flexible methods of               
 designing taxes so the cost of new mandates can be fairly                     
 distributed to all residents.                                                 
                                                                               
 Number 045                                                                    
                                                                               
 STEVE VAN SANT, State Assessor, Department of Community & Regional            
 Affairs, noted he was present in Anchorage to answer questions on             
 the legislation.                                                              
                                                                               
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 TOM PITMAN, Municipal Assessor, Municipality of Anchorage, stated             
 his support for the bill and the flexibility it provides,                     
 especially from his perspective of administrating the law.                    
                                                                               
 Number 065                                                                    
                                                                               
 There being no further testimony on the legislation, SENATOR                  
 TORGERSON asked for the will of the committee.                                
                                                                               
 SENATOR R. PHILLIPS moved that CSHB 86(CRA)(title am) be passed out           
 of committee with individual recommendations.  Hearing no                     
 objection, it was so ordered.