04/24/2003 03:40 PM Senate STA

          SB  63-MUNICIPAL ANNEXATIONS AND DETACHMENTS                                                                      
                                                                                                                                
MARY  JACKSON, staff  to Senator  Thomas Wagoner,  explained this                                                               
bill  was  introduced  as  a  result  of  the  contentious  Homer                                                               
annexation that  raised the question  of when the taxation  of an                                                               
annexed area  would begin.  This bill  remedies the  question and                                                               
sets it in statute.                                                                                                             
                                                                                                                                
The  Local  Boundary  Commission (LBC)  reviewed  original  draft                                                               
legislation in  September 2002 and recommended  additional issues                                                               
be addressed  in the bill. The  new LBC concurred with  the bill,                                                               
but requested  it be  expanded to  include new  incorporations as                                                               
well. The bill was amended and the proposed CS is the product.                                                                  
                                                                                                                                
CHAIR GARY  STEVENS asked  for a  motion to adopt  the CS  as the                                                               
working document.                                                                                                               
                                                                                                                                
SENATOR GRETCHEN GUESS made a motion  to adopt CSSB 63 \H version                                                               
as the working document. There was no objection.                                                                                
                                                                                                                                
MS. JACKSON explained the LBC  supports the \H version that makes                                                               
the following changes:                                                                                                          
                                                                                                                                
    · Section 1 extends the same time restrictions for annexed                                                                  
     areas in the current bill to newly incorporated areas.                                                                     
    · The CS deletes the immediate effective date that was in                                                                   
      the original bill.                                                                                                        
                                                                                                                                
In  addition, the  LBC asked  for intent  language and  the legal                                                               
department  was  in  the  process of  drafting  an  amendment  to                                                               
accommodate the request.                                                                                                        
                                                                                                                                
CHAIR  GARY  STEVENS  said  he  would hold  the  bill  until  the                                                               
amendment was available, but he  would take public testimony that                                                               
day.                                                                                                                            
                                                                                                                                
MARY GRISWOLD from  Homer testified in support of  the CS because                                                               
it clarifies  in statute in  cases of  incorporation, annexation,                                                               
and detachments that  property taxes accrue in  full each January                                                               
1.  It's consistent  with existing  policy across  the state  for                                                               
assessing property and adding new property to the tax rolls.                                                                    
                                                                                                                                
With many  annexations there is  also a  corresponding detachment                                                               
from  another government.  Using January  1 as  a cutoff  date to                                                               
establish  value  and   jurisdiction  provides  less  disruption.                                                               
During the  transition period, the  government that  is providing                                                               
services  can be  appropriately  compensated  through a  contract                                                               
agreement worked out in the transition plans.                                                                                   
                                                                                                                                
If the  LBC was able  to direct  municipalities to levy  taxes on                                                               
property  within their  jurisdiction as  of any  date other  than                                                               
January 1,  serious conflicts could  arise. Also, adopting  SB 63                                                               
without including incorporations risks  multiple taxation when an                                                               
area within a  service area of an  organized borough incorporates                                                               
as a city before July 1. If  the city levies taxes in the initial                                                               
year  following incorporation  while  the taxes  in the  detached                                                               
area of the borough remain in  effect, the property owners in the                                                               
new city would be taxed twice.                                                                                                  
                                                                                                                                
DAN BOCKHORST, staff  to the LBC, advised the  commission wrote a                                                               
letter  to  the Chair  expressing  three  concerns regarding  the                                                               
original legislation. Two were addressed  in the CS and the third                                                               
issue is the subject of  the proposed amendment Ms. Jackson spoke                                                               
to. He  preferred to defer  his comments until the  amendment was                                                               
available for review.                                                                                                           
                                                                                                                                
DARROLL HARGRAVES  said he  sent a  letter to  the Chair  on 4/23                                                               
addressed satisfactorily in the CS.                                                                                             
                                                                                                                                
CHAIR GARY STEVENS acknowledged the letter was in the  file   and                                                               
advised the  committee would  take action on  the bill  when they                                                               
had the intent language from Legislative Legal.                                                                                 
                                                                                                                                
DR. DOUGLAS STARK from Homer testified in support of SB 63.                                                                     
                                                                                                                                
CHAIR GARY STEVENS held SB 63 in committee.