Legislature(2017 - 2018)BARNES 124
03/28/2017 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB156 | |
| Presentation by Chris Rose, Reap and Bert Hunter, Connecticut Green Bank | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 156 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 156-MUNI TAX EXEMPTION: ECON DEVEL PROPERTY
8:03:28 AM
CO-CHAIR PARISH announced that the first order of business would
be HOUSE BILL NO. 156, "An Act relating to a municipal tax
exemption or deferral for economic development property."
CO-CHAIR PARISH opened public testimony on HB 156.
8:03:51 AM
JOHN MOOSEY, Manager, Matanuska-Susitna (Mat-Su) Borough,
Palmer, Alaska, testified in support of HB 156. He mentioned
the state's heavy reliance on oil and municipalities being asked
"to share in that burden." He said the proposed legislation
would give municipalities the tools other states currently have
to compete in a world market and have a part in raising revenue
to cover governmental costs and provide jobs for their
communities.
8:05:11 AM
GEORGE PIERCE testified in opposition to HB 156. He said
legislators have taken an oath to represent all Alaskans, but he
opined that instead of doing so, they instill exemptions, tax
breaks, and incentives for "special people," corporations, and
non-profit organizations. He said the City of Soldotna owns
prime acreage along the Kenai River, yet its Chamber of Commerce
is allowed extended time to get enough funding to get land and
build a structure on it. He questioned why, if the city needs
financial support from the state every year, it does not sell
its prime acreage. Mr. Pierce emphasized that everyone should
pay equally, but when special interest groups are exempted, the
people pay the price. He stated, "It's a revenue killer - it's
not a helper. People who want to invest in Alaska should not be
getting special treatment." He urged the committee not to
support HB 156.
8:08:44 AM
JEREMY PRICE, Director, Americans for Prosperity - Alaska,
testified in support of HB 156, which he said would give local
governments greater control over managing long-term investments
that would provide greater tax revenue for municipalities. He
opined that local governments should have greater flexibility to
provide property tax exemptions based on the knowledge of local
elected officials who often have firsthand experience and
knowledge of development projects within their jurisdictions.
He stated that the current statute of five years seems arbitrary
and unnecessary when local officials should be able to make
decisions at the local level. He concluded, "Flexibility is
needed now more than ever for local governments to determine
where scarce resources should be used and how public investment
should be managed."
8:09:53 AM
KEN SLAUSON said that although he is the chairman of the Board
of Supervisors for the Central Mat-Su Fire Service, he is
testifying on behalf of himself. He said he is concerned about
certain aspects of HB 156. He stated that the Central Mat-Su
Fire Service derives its entire revenue for fire and life safety
operations from property taxes, and every time a commercial
structure is exempted, fire service is provided without any
revenue to cover it. He said, "We already do this for schools,
for government buildings, for churches, [and] for a number of
other worthy causes." He indicated that HB 156 does not have
sufficient checks and balances to accommodate the fire service
in dealing with large gas facilities or warehouses that have
"substantial fire exposure." He said while Mat-Su has a large
service area, he suspects that the impact [of HB 156] on even
smaller service areas would be worse, and he warned that giving
exemptions to large property operations would shift the cost to
homeowners, which he said gives him concern.
8:12:34 AM
CO-CHAIR PARISH asked if Mr. Slauson's concern is shared by his
peers.
MR. SLAUSON reminded Co-Chair Parish that he was testifying on
behalf of himself, but surmised the answer is yes.
8:13:41 AM
DAN TUCKER testified that he is a member of two local boards but
is testifying on behalf of himself. He said HB 156 has "snuck
up" in such a manner that he and [Mr. Clausen] have not been
able to get together to discuss its possible ramifications. He
indicated that they had spoken about the legislation that was
introduced during the Twenty-Ninth Alaska State Legislature. He
said he would "speak with the same knowledge and relative
awareness as Mr. Clausen." He stated that he is familiar with
efforts required to maintain adequate roads. He opined that HB
156 does not "take this into consideration." He said there is
great potential for increased traffic, for example, on a road
that carries numerous vehicles to a new facility, but [the
proposed legislation makes] "no consideration for the
maintenance of that road."
MR. TUCKER stated that he has worked over 35 years as a career
fire fighter - 29 of those years in Anchorage. He noted that
Mr. Clausen had made note of structures that are tax exempt or
tax-free, such as churches and large public facilities. He
added that those are the buildings that demand the highest level
of fire service response and for which insurance companies deem
the fire stations must be adequately equipped, manned, and
within close proximity. He said, "That takes money." He said,
"We're talking about adding potential structures that would tax
the limits of the services available without giving any credit
to responding to that from a fiscal standpoint."
MR. TUCKER said he does not know if there is much room for
development in the road service area number nine (RSA9), which
includes Wasilla, but the upgrade of the meridian in that area
has cost his residential service area $37,000 a year to maintain
a Seward meridian. He said he does not view that as a local
road, and if any more structure or "load" was added onto that
road, the maintenance cost of it would rise. He said he is
familiar with the infrastructure services pertaining to fire and
roads and realizes that "the fire insurance rates for all of the
residents and commercial structures are based on being able to
provide the required, adequate fire protection - but again it
costs money to keep that adequate." Mr. Tucker stated that road
maintenance has a significant effect on the ability of fire and
emergency medical services (EMS) to respond.
8:18:01 AM
CO-CHAIR PARISH asked Mr. Tucker what changes would make the
bill more palatable.
MR. TUCKER first suggested a time limit of five years on an
exemption should allow the developer a solid start on a project,
and he opined that after five years the developer should be
paying taxes like everyone else. Second, Mr. Tucker said
essential infrastructure services - fire and EMS - are not paid
for out of the general fund but solely by taxes. He said, "I
believe those should be exempted from the tax and that those
services should be covered and taxed as if there was no
exemption at all."
8:19:34 AM
MICHAEL SHIELDS testified that although he is a supervisor of
the Butte road service area in Palmer, Alaska, and the secretary
of the borough-wide local road service area advisory board, he
is testifying on behalf of himself. He echoed the comment of
Mr. Tucker that [HB 156] "snuck up on us." He said road
service, life/fire service, and emergency medical technicians
(EMTs) are funded by property taxes specific to those defined
services areas. He said HB 156 would add road miles, which he
said would probably increase traffic and related maintenance
costs, but it would eliminate the funding source. He said that
would leave raising the mil rate on residents in the service
area as the only option. He said he would like a cost/benefit
analysis done on that scenario to better inform the
legislature's discussion on HB 156.
MR. SHIELDS posited that service areas should be exempted. He
concurred with Mr. Tucker that a time limit on property tax
exemption should be made; he stated his preference that the
limit be set at 5 years - at the most 10 years. He opined that
if a developer cannot afford property taxes, which is a normal
cost of doing business, then he/she should not be in that
business. Mr. Shields concluded that Alaska is notorious for
building "new stuff" and not being able to maintain it, and he
expressed concern that HB 156 would accelerate that trend. He
added that he does not think the intent of HB 156 could "pass
the red-face test."
8:21:36 AM
REPRESENTATIVE SADDLER asked Mr. Shields what the trend has been
in the assessed valuation in the Mat-Su Borough.
MR. SHIELDS answered that it has been "pretty flat" in the last
few years. He explained that raising the mil rate above the
existing tax cap takes a vote of the people. He said he has
attempted that twice with no success. He said, "We're barely
holding our own with our current maintenance load." He
indicated that an attempt to raise the mil rate could counteract
HB 156 but, based on past history, he questioned the success of
asking people to pay more taxes.
REPRESENTATIVE SADDLER indicated that he has heard that Mat-Su
Borough has been growing at a rate that necessitates a new
school built every year. He said he assumes that reflects
increased residential construction. He asked Mr. Shields to
confirm that he had said the total assessed valuation has
remained flat in recent years.
MR. SHIELDS answered yes, but suggested part of that may have to
do with how often the existing property can be reassessed.
REPRESENTATIVE SADDLER said he would like to hear from the
borough about this issue, because the information from Mr.
Shields seems to run counter to the basis for the proposed
legislation.
MR. SHIELDS added that new homes are "going for good price"
while existing homes don't seem to be going for much.
8:24:15 AM
CO-CHAIR PARISH, after ascertaining that there was no one else
who wished to testify, closed public testimony on HB 156.
[HB 156 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 156 Legal Memo 17-271dls.pdf |
HCRA 3/28/2017 8:00:00 AM |
HB 156 |
| Bert Hunter - Green Bank Presentation.pdf |
HCRA 3/28/2017 8:00:00 AM |
|
| GreenBankWhitePaper .pdf |
HCRA 3/28/2017 8:00:00 AM |