Legislature(2001 - 2002)
04/08/2002 01:40 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 358-EXEMPTION FROM PROPERTY TAX: TIMBER
REPRESENTATIVE MIKE CHENAULT, bill sponsor, introduced the bill
via teleconference. This would give municipalities an additional
tool to lower the threat of fire on spruce bark beetle killed
forestland by allowing the option to waive property taxes on
roads or other property improvements that facilitate the removal
of the timber.
The Kenai Peninsula Borough has approximately 2.2 million acres
of spruce forest and 1.1 million of it is affected by the spruce
bark beetle infestation. In an effort to mitigate the fire
threat, the Kenai Peninsula Borough tried to enact a property tax
waiver program but the plan was blocked because state law doesn't
allow for such breaks. This bill makes the necessary changes in
state law to allow the Kenai Peninsula Borough or other
municipalities in a similar situation to help protect themselves
without having to take on additional tax liabilities. The tax
breaks aren't mandated rather they are an option.
Included in member's packets were copies of the supporting
resolution from the Kenai Peninsula Borough and photos of the
beetle infestation on the peninsula.
SENATOR PHILLIPS asked whether there was any opposition to the
bill.
REPRESENTATIVE CHENAULT replied he wasn't aware of any
opposition.
CHAIRMAN TORGERSON asked whether they anticipated that this would
affect smaller parcels of land and individual owners.
REPRESENTATIVE CHENAULT thought this would give the borough the
opportunity to look at each parcel then make a determination
about which lands would be included.
CHAIRMAN TORGERSON wanted it a matter of record what was being
exempted from taxation. He wanted examples of "improvements to
real property, including personal property affixed to the
improvements…."
REPRESENTATIVE CHENAULT replied the improvements would be any
roads that were built into parcels to make access to the timber
harvest.
CHAIRMAN TORGERSON asked whether they would have to apply for the
exemption every year.
REPRESENTATIVE CHENAULT thought that would be a borough decision.
CHAIRMAN TORGERSON asked the state assessor whether the exemption
would need to be renewed annually and whether he supported the
bill.
STEVE VAN SANT, State Assessor, said this was well deserved and
he did support the bill. An assembly grants the exemption and
they could set it up with any timeframe they wanted. There would
be no requirement from the state to set any particular timeframe.
CHAIRMAN TORGERSON replied it was written that way but he wanted
his opinion whether a timeframe was needed.
STEVE VAN SANT said this seems to be an issue where you never
know whether the issue will arise again. He rarely supports
exemptions, but feels this has merit. It gives municipalities the
ability to deal with a dangerous situation.
JEFF JAHNKE, Director of the Division of Forestry and State
Forester, testified in support of the bill. Although the value of
the affected spruce has declined substantially there are still
three important reasons why the harvest should continue.
1. It reduces the hazard caused by dead and dying trees
2. It encourages reforestation
3. It continues to recover the value that still remains
MARVIN RUSE, Mapping Director of the Spruce Bark Beetle Task
Force, testified in support of the bill. The tax incentives might
encourage some vacant landowners to become more active in moving
the hazard on their land. Two thirds of the Kenai Peninsula is in
federal or state ownership so the only opportunity is on private,
Native and borough land. They want to encourage the removal of
any and all of the hazard.
MR. VAN SANT questioned including "or at risk of being infested"
because a municipality that was oil rich could use that as an
excuse to exempt lands which could cost the state money from oil
and gas revenues. He wanted his concern a matter of record.
CHAIRMAN TORGERSON said he noticed that as well. The bill ought
to do what the testimony says it's supposed to, which is to spur
the removal of the infested trees or enhance the probability of
reforestation. Unfortunately, the bill is silent on that. He
encouraged local governments to take this a step further and
develop a plan for removal of the risk otherwise there would be
no exemption.
MR. VAN SANT said he understood that but unfortunately it doesn't
always work that way.
TIM NAVARRE from the Kenai Borough Assembly assured members they
would act quickly once the bill is passed and would probably work
with Mr. Van Sant. There is much work to be done before they pass
an ordinance that covers their intent.
CHAIRMAN TORGERSON said he appreciates that. He likes intent
placed in the bill, but this bill just gives authority for tax
relief and doesn't accomplish the goals as expressed in the
testimony. He didn't intend to amend the bill; local governments
would have to do that on their own. If the state assessor sees
it's being abused he expects him to bring the matter back before
the Legislature and they would repeal the law.
MR. NAVARRE said they would be working diligently to come up with
a good ordinance.
There was no further testimony.
CHAIRMAN TORGERSON asked for the will of the committee.
SENATOR PHILLIPS made a motion to move CSHB 358(CRA) and attached
fiscal note from committee with individual recommendations.
There being no objection, it was so ordered.
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