Legislature(2011 - 2012)BARNES 124
03/24/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB196 | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 196 | TELECONFERENCED | |
| *+ | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 170-MUNI TAX EXEMPTION FOR CERTAIN VOLUNTEERS
9:18:55 AM
CHAIR MUNOZ announced that the final order of business would be
HOUSE BILL NO. 170, "An Act relating to municipal property tax
exemptions on residences of certain volunteer emergency services
personnel and the widows and widowers of volunteer emergency
services personnel; and providing for an effective date."
9:19:54 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, speaking as
the sponsor of HB 170, provided the following testimony:
House Bill 170 addresses an issue that is one of the
more consistent problems faced by volunteer emergency
service organizations, that is recruitment and
retention of volunteer firefighters. With little or
no incentive to volunteer, individuals find something
else to do with their time. Those that do volunteer
receive little or no recognition, except for the
satisfaction of helping a neighbor in need. At times,
this is not enough. House Bill 170 provides for an
exemption to municipal property tax on the primary
place of abode for a resident who serves as an active
volunteer with a fire department, or emergency medical
or rescue services agency, or widow or widower of a
similar person who was an active volunteer at the time
of their death. The exemption applies to the first
$200,000 of assessed value of real property.
REPRESENTATIVE FEIGE then explained that Sections 1-4 provide
clarification and a definition for the term "volunteer" as
stated in AS 18.15.250, as follows: "(4) "volunteer" means
that the person is an active volunteer of a first responder
service, a rescue service, an ambulance service, or a fire
department that provides emergency medical or rescue services as
part of its duties." The exact numbers of individuals who will
qualify for this exemption are almost impossible to quantify.
Based upon information from state agencies, he estimated that
statewide there are less than 2,000 volunteers living within
taxing municipalities. Of those 2,000, no data exists to
determine the number of property owners. However, informal
conversations with fire departments suggest that about half of
the membership of most departments own property. Representative
Feige expected the exemption to primarily help with the
retention of stable community members that provide the core
leadership in a department. As noted in the letters of support
for HB 170, many of the volunteers are relatively young and
don't own property. The exemption would help the department in
terms of those volunteers in middle management positions. He
pointed out that HB 170 doesn't make the exemption optional,
although he said he wasn't opposed to it being optional.
However, if the exemption being elective is important to the
passage of the legislation, it could be amended such that it's
the responsibility of the local taxing entity to vote not to
extend the exemption. Representative Feige said he anticipated
that with the passage of HB 170, [fire] departments will
experience reduced turnover, improved training and capability,
which will ultimately lower their insurance rating and result in
lower home insurance rates in the area.
9:25:24 AM
CHAIR MUNOZ noted that the mill rate in Juneau is about 12
mills. She inquired as to the mill rate in Fairbanks and
Anchorage.
REPRESENTATIVE FEIGE replied no, but related that in his
district the areawide mill rate is 11 mills and the non areawide
mill rate is 2 mills for a total of about 13 mills in the Mat-Su
Valley.
9:25:54 AM
REPRESENTATIVE AUSTERMAN directed attention to page 1, line 7,
and inquired as to the use of the term "may."
REPRESENTATIVE FEIGE clarified that "may" doesn't speak to the
entire exemption, but rather it refers to the fact that a
municipality may require that individuals receive a permanent
fund or that the individuals would be eligible for the permanent
fund.
9:27:03 AM
REPRESENTATIVE DICK said that he likes the idea, but asked if
this would be a disincentive for people who are renters to
volunteer.
REPRESENTATIVE FEIGE answered that he wasn't sure it was a
disincentive, but it certainly wouldn't apply to volunteers who
rent rather than own property.
9:27:27 AM
REPRESENTATIVE GARDNER related her understanding that Chugiak
has a volunteer firefighter force that receives a retirement
benefit and workers' compensation. There are also volunteer
firefighters who receive stipends and pension benefits. Would
the aforementioned volunteer firefighters be "volunteers," she
asked. She also inquired as to the definition of "active."
REPRESENTATIVE FEIGE clarified that Representative Gardner is
referring to a paid on-call volunteer firefighter versus the
separate category of volunteer that doesn't get paid. He
related that HB 170 would apply only to volunteers. With regard
to the definition of "active," Representative Feige pointed out
that the legislation specifies municipalities determine how to
apply that term. He suggested he would leave it to the local
fire chief to determine who the "active" volunteers are because
every year fire departments that want to be recognized as such
by the state fire marshal have to submit rosters to the state.
The rosters specify the various personnel and whether they are
full-time, paid on-call, or volunteer.
REPRESENTATIVE GARDNER asked if a firefighter who isn't paid but
receives benefits would be considered a volunteer.
REPRESENTATIVE FEIGE informed the committee that state law
allows fire departments to extend workers' compensation benefits
to volunteer firefighters, even though they are not being paid.
He explained that an annual salary of $2,000 is used to
determine the workers' compensation benefit. Regarding whether
workers' compensation would qualify as a benefit, Representative
Feige said he didn't believe it would.
REPRESENTATIVE GARDNER then asked if those volunteer
firefighters who participate in pension plans would still
qualify as a volunteer [under HB 170].
9:31:00 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, related that some states have enacted specific
pension programs for volunteers. Therefore, he expected that
receipt of a pension plan doesn't eliminate one from being
classified as a volunteer.
9:31:28 AM
CHAIR MUNOZ asked whether there would be a legal problem with
providing a benefit to one class of individuals and not to a
similar group performing the same work but for which they are
paid.
REPRESENTATIVE FEIGE said that didn't come up with his
discussion with Legislative Legal and Research Services. He
highlighted that the state already has exemptions for certain
classes of people. Furthermore, these are volunteers who
support their community. He recalled starting a volunteer fire
department in his community. Prior to the existence of the
volunteer fire department, his community was losing a structure
every year. Having volunteer firefighters present in a
community provides a certain measure of relief. Furthermore,
having the volunteer fire department resulted in lower home
insurance rates for residents who subscribed to the department's
services, which more than offset the cost of subscribing to the
fire department for most residents.
9:34:12 AM
REPRESENTATIVE SADDLER expressed concern with an expansion of
the property tax exemption, particularly since he's heard
complaints from various local government entities that the state
property tax exemption is an unfair burden on local communities.
Although the proposal in HB 170 would benefit emergency medical
services personnel and volunteer firefighters, others in the
community will face increased property taxes to pay for it. He
also expressed concern that offering salary, benefits, or
exemptions as proposed in HB 170 would seem to [change the
volunteer's status] and muddies the line. To extend this
proposed benefit to widows makes it a multi-generational
exemption, which he indicated is of concern as well.
Representative Saddler related that he might view the exemption
more favorably if it were provided to [volunteer] firefighters
upon retirement, which he likened to the exemption for senior
citizens and disabled veterans.
REPRESENTATIVE FEIGE reminded the committee that he is proposing
an incentive program to assist the local fire chiefs with
obtaining and maintaining staff at fire departments. He opined
that generally, most communities want to have some sort of fire
protection as it's more economical to do so with volunteers. As
mentioned earlier, one of the biggest problems for fire chiefs
is recruiting volunteers, which would ultimately result in the
area losing the service or having to pay for it, which is more
expensive in the long term.
9:37:55 AM
REPRESENTATIVE AUSTERMAN inquired as to why the sponsor chose an
exemption in the amount of $200,000 rather than staying in line
with the other exemption amounts of $150,000. He also inquired
as to whether the sponsor would oppose changing the exemption
amount to $150,000. He then recalled that the sponsor said he
was open to making the exemption optional rather than making it
a state law.
REPRESENTATIVE FEIGE noted that legislation, HB 190, has been
introduced to increase the senior property tax exemption to
$200,000. However, he said that he didn't have a problem if the
committee decided to lower the volunteer emergency services
personnel exemption to $150,000. With regard to the optional
aspect of HB 170, the legislation is currently written under the
mandatory exemptions [of AS 29.45.030]. Placing the proposal
under AS 29.45.050 would place it with the optional exemptions.
If the committee decides to include language in HB 170 that
makes the election of this exemption optional, Representative
Feige recommended that the language relate that the local taxing
authority has to vote not to extend the exemption in order to
provide the local fire chiefs more weight in the argument.
9:39:58 AM
REPRESENTATIVE FOSTER expressed interest in the impact of this
proposed exemption on a typical community. He related that in
his community with a mill rate of 12 mills, a $200,000 exemption
would result in about $2,400 per home. If one was to assume 30
firefighters and that 20 have homes, the [exemption] would
result in about $48,000. Spreading that cost over 3,500 people
results in about $13 per person.
9:40:59 AM
TIMOTHY ROONEY, Borough Manager, City of Wrangell, testified in
opposition to HB 170. Although he related support for volunteer
firefighters, the community of Wrangell cannot take any more
hits to its tax base. Wrangell is an aging community, and
therefore the number of people moving into the category of the
senior exemption is always increasing. Wrangell has a strong
volunteer firefighter department of 38 members. If each
received a $200,000-value tax exemption, it would cost the city
$96,000 a year. Wrangell raises $1.4 million in property taxes,
so this proposed exemption could result in a 7 percent
reduction. Mr. Rooney said that although it may be noble to
provide an exemption to volunteer firefighters, he questioned
where one would stop because there are plenty of volunteers that
could be recognized. Since Wrangell is a small community, it
takes volunteers on many levels to make it successful.
Therefore, he didn't believe it's appropriate to single out one
volunteer group. Mr. Rooney related, "As a volunteer I don't
need incentive to volunteer, I do so to give back to my
community and to the state." He opined that passage of HB 170
would open a door that will be impossible to close and one that
would greatly impact Wrangell in the future. In closing, Mr.
Rooney suggested that if each municipality is charged with
determining who is a volunteer, each municipality should be
allowed to vote to participate in this exemption rather than to
opt out.
9:43:14 AM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), related that AML has opposed mandatory exemptions all
along because it has to consider the impact cumulatively. She
reminded the committee that last year there was legislation to
provide an exemption for all fraternal organizations, the year
prior there was legislation proposing an exemption for teachers
occupying homes for religious schools. Currently,
municipalities loose approximately $50 million per year on the
senior citizen property tax exemption. She pointed out that the
total loss is $10 million less than they receive for revenue
sharing. Furthermore, although statute specifies the state is
to reimburse [the municipality for the senior citizen property
tax exemption], that's not the case. Therefore, AML is leery of
doing any exemption. Mr. Wasserman related her complete
agreement with Representative Feige's comments regarding
firemen. She noted that AML's board includes a seat for the
Alaska Fire Chief's Association. Municipalities, she related,
must take care when allowing more exemptions as it leaves less
people to carry the load. Therefore, Ms. Wasserman suggested
that either this proposal be an optional exemption that
municipalities vote to opt into, or the state should pay for the
exemption.
9:46:14 AM
PAUL DELAS, President, Board of Directors, Chena Goldstream Fire
& Rescue (CGFR), testified in support of HB 170. He informed
the committee that he has been a volunteer with Chena Goldstream
Fire & Rescue since 1989. Last year, 63 volunteers at CGFR
spent nearly 42,000 hours on shift, which is an average of 660
hours each. The 11 highest performing volunteers, 20 percent of
the department, contributed 43 percent of the hours or 18,000
hours total. Seven of those volunteers are homeowners who would
be positively impacted by HB 170. Mr. Delas told the committee
that beyond the hours volunteers spend on shift, they are
required to participate in a minimum of 100 hours taking classes
and attending training. The CGFR draws its volunteers from
college students who are fairly transient and established
residents. Since the college students and a few other young
volunteers are normally with CGFR for only a few years, the
backbone of CGFR are the volunteers who are permanent residents.
Mr. Delas estimated that it takes about five years of training
and experience to become an effective lead volunteer. The long-
term volunteers have the knowledge and ability to teach other
volunteers how to respond, he pointed out. Mr. Delas related
that the minimally accepted commitment at CGFR is 600 hours
annually. However, some of CGFR's volunteers actually
contribute over 2,000 hours, which is the equivalent of a full-
time job. He acknowledged that many of the hours spent on shift
are hours in which the volunteer is sleeping or at work, but
being on shift is a promise to take care of others. This
legislation, he opined, is a powerful incentive. Without
volunteers, either the service will be eliminated or paid
professionals would have to be hired. A minimally staffed fire
department with four responders every day of the year would cost
about $1 million in salaries and benefits. A $70,000 salary and
benefit package for each paid responder is equivalent to 23
volunteers receiving the proposed exemption, which he estimated
would amount to about $3,000 for each volunteer in his area. He
characterized this as "Wall Street style leveraging of
resources." In conclusion, he related that the volunteers who
own property in his area are excited about the possible passage
of HB 170 and has generated local interest for those who have
been contemplating becoming a volunteer.
9:51:30 AM
CHAIR MUNOZ announced that Mr. Van Sant, State Assessor,
Department of Commerce, Community & Economic Development, is
available for questions.
9:51:54 AM
JEFF TUCKER, President, Alaska Fire Chiefs Association; Fire
Chief, North Star Volunteer Fire Department, characterized HB
170 as a good tool for the recruitment and retention of
volunteer firefighters throughout the state. He, too, mentioned
that returning volunteers are the backbone of volunteer fire
departments.
9:53:21 AM
PAT CARLSON, Assessor, Fairbanks North Star Borough, said that
although everyone supports volunteers, the service and
commitment levels of these volunteers aren't recognized.
Furthermore, there's clearly difficulty with attracting new
volunteers. This needs to be addressed on a statewide level.
He pointed out that with a mandatory exemption there is no
option for the local jurisdiction to create an option that works
for it. Currently, Fairbanks provides a homeowner exemption
that the [borough] voted on and tailored to ensure that it is
fair, equitable, and documented. The struggle with HB 170 is
the language "active" versus "volunteer," "rescue service," and
"widow" and "widower." He expressed concern with the exemption
for senior citizens and disabled veterans, which is increasing
in his jurisdiction by about 8 percent per year, which may call
for the higher exemption amount in HB 170. He expressed further
concern because this forces an exemption against the borough's
base levy as well as against the fire and road service area
levies. He then pointed out that in some jurisdictions there is
no property tax, and therefore he questioned what volunteers in
those areas will receive. Mr. Carlson opined that the only way
to fairly address this matter is for the fire chiefs and that
the state to develop a statewide stipend that offsets the
tremendous cost for volunteers. He then reiterated concern with
regard to the definition of "volunteer" as it's from the
vaccination program section of statute. Moreover, using the
term "rescue service" provides an opportunity for abuse.
9:56:24 AM
CHAIR MUNOZ announced that HB 170 will be held over for further
committee work. She asked if the sponsor wanted to work with
the ideas brought forward today to develop a committee
substitute (CS).
REPRESENTATIVE FEIGE answered that he is amenable to that.
9:57:03 AM
REPRESENTATIVE FEIGE pointed out that HB 170 primarily benefits
the middle management volunteers in these [volunteer fire
departments]. With regard to the number of members in a fire
department, that is set by the community. Therefore, if a
community wants to limit its tax exemption exposure, they can
limit the number of people they consider active volunteers in
their department. With regard to Mr. Carlson's comments about
the property tax exemption in the Fairbanks North Star Borough,
Representative Feige clarified that the exemption is only for
the first $10,000 of property tax value.
9:58:42 AM
CHAIR MUNOZ reviewed the concerns expressed by the committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB170-CCED-DCRA-03-18-11.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Fire Chiefs Assn Support Letter.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Girdwood Member Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| NFIB HB170.PDF |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Salcha Fire Rescue Support Letter.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Hollis Member Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Hanies Asst Chief Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
|
| HB196 repealer statutes.docx |
HCRA 3/24/2011 8:00:00 AM |
HB 196 |
| HB196repealstatutes.docx |
HCRA 3/24/2011 8:00:00 AM |
HB 196 |
| Haines Asst. Chief support HB 170.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Valdez Member Major Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| HB 170 Letter 3-23-11 CES.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Chena Member Solomon Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| CGFR-support-for-HB170.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Alaska Professional Volunteers Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Alaska Firefighters Assn Support Letter.tif |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |