Legislature(2023 - 2024)GRUENBERG 120
04/22/2024 05:30 PM House RULES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB264 | |
| SB77 | |
| SB159 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 264 | TELECONFERENCED | |
| + | SB 77 | TELECONFERENCED | |
| + | SB 159 | TELECONFERENCED | |
SB 77-MUNI PROP TAX EXEMPTION/TAX BLIGHTED PROP
5:48:01 PM
CHAIR C. JOHNSON announced that the next order of business would
be CS FOR SENATE BILL NO. 77(CRA) am, "An Act relating to
municipal property tax; and providing for an effective date."
5:48:22 PM
The committee took a brief at-ease at 5:48 p.m.
5:48:43 PM
REPRESENTATIVE TILTON moved to adopt the proposed House
committee substitute (HCS) for CSSB 77(CRA) am, Version 33-
LS0416\D, Dunmire, 4/15/24, as the working document.
CHAIR C. JOHNSON objected for the purpose of discussion, to hear
an explanation of changes to Version D.
5:49:06 PM
TOM WRIGHT, Staff, Representative Craig Johnson, Alaska State
Legislature, explained the changes that would occur under the
proposed HCS to CSSB 77(CRA), Version D.
5:49:43 PM
CHAIR C. JOHNSON removed his objection.
5:49:47 PM
REPRESENTATIVE FIELDS objected for the purpose of discussion and
asked the bill sponsor to speak to the original bill, the
committee substitute, and the differences between the two.
5:49:59 PM
SENATOR FORREST DUNBAR, Alaska State Legislature, as prime
sponsor, answered questions related to the proposed HCS to CSSB
77(CRA), Version D. He explained how CSSB 77 would be a more
viable and effective bill than the proposed HCS to CSSB 77 and
urged the committee not to adopt Version D.
REPRESENTATIVE FIELDS asked what kind activities and timeframes
of resolve people are experiencing at blighted properties.
SENATOR DUNBAR responded that constituents around the state are
experiencing blighted properties as drug houses, fire hazards,
and crime bases. He said both community members and local law
enforcement are generally aware of these properties, and neither
have any idea of how long it would take to vacate the blighted
property.
5:54:52 PM
A roll call vote was taken. Representatives Allard, Sumner (via
teleconference), Shaw, Tilton, and C. Johnson voted in favor of
the motion to adopt the proposed HCS for CSSB 77(CRA), Version
33-LS0416\D, Dunmire, 4/15/24, as the working document.
Representatives Fields and Schrage voted against it. Therefore,
Version D was before the committee by a vote of 5-2.
5:55:27 PM
REPRESENTATIVE SHAW moved to adopt Amendment 1 to the proposed
HCS for CSSB 77(CRA), Version 33-LS0416\D, Dunmire, 4/15/24
("Version D").
[Note: Amendment 1 was not made available in the committee file
or on BASIS but was determined based on the subsequent analysis
by Mr. Goff to mirror an amendment, labeled 33-LS0416\R.5,
Dunmire, 4/22/24, which read as follows:]
Page 1, line 1:
Delete "; and providing for an effective date"
Page 1, following line 2:
Insert new bill sections to read:
"* Section 1. AS 29.45.030(a) is amended to read:
(a) The following property is exempt from
general taxation:
(1) municipal property, including property
held by a public corporation of a municipality, state
property, property of the University of Alaska, or
land that is in the trust established by the Alaska
Mental Health Enabling Act of 1956, P.L. 84-830, 70
Stat. 709, except that
(A) a private leasehold, contract, or other
interest in the property is taxable to the extent of
the interest; however, an interest created by an
operating agreement or nonexclusive use agreement
between the Alaska Industrial Development and Export
Authority and a user of a shipyard or an integrated
transportation and port facility, if the shipyard or
integrated transportation and port facility is owned
by the authority and initially placed in service
before January 1, 1999, is taxable only to the extent
of, and for the value associated with, those specific
improvements used for lodging purposes;
(B) notwithstanding any other provision of
law, property acquired by an agency, corporation, or
other entity of the state through foreclosure or deed
in lieu of foreclosure and retained as an investment
of a state entity is taxable; this subparagraph does
not apply to federal land granted to the University of
Alaska under AS 14.40.380 or 14.40.390, or to other
land granted to the university by the state to replace
land that had been granted under AS 14.40.380 or
14.40.390, or to land conveyed by the state to the
university under AS 14.40.365;
(C) an ownership interest of a municipality
in real property located outside the municipality
acquired after December 31, 1990, is taxable by
another municipality; however, a borough may not tax
an interest in real property located in the borough
and owned by a city in that borough;
(2) household furniture and personal
effects of members of a household;
(3) property used exclusively for nonprofit
religious, charitable, cemetery, hospital, or
educational purposes;
(4) property of a nonbusiness organization
composed entirely of persons with 90 days or more of
active service in the armed forces of the United
States whose conditions of service and separation were
other than dishonorable, or the property of an
auxiliary of that organization;
(5) money on deposit;
(6) the real property of certain residents
of the state to the extent and subject to the
conditions provided in (e) of this section;
(7) real property or an interest in real
property that is
(A) exempt from taxation under 43 U.S.C.
1620(d), as amended or under 43 U.S.C. 1636(d), as
amended; or
(B) acquired from a municipality in
exchange for land that is exempt from taxation under
(A) of this paragraph, and is not developed or made
subject to a lease;
(8) property of a political subdivision,
agency, corporation, or other entity of the United
States to the extent required by federal law; except
that a private leasehold, contract, or other interest
in the property is taxable to the extent of that
interest unless the property is located on a military
base or installation and the property interest is
created under 10 U.S.C. 2871 - 2885 (Military Housing
Privatization Initiative), if the leaseholder enters
into an agreement to make a payment in lieu of taxes
to the political subdivision that has taxing
authority;
(9) natural resources in place including
coal, ore bodies, mineral deposits, and other proven
and unproven deposits of valuable materials laid down
by natural processes, unharvested aquatic plants and
animals, and timber;
(10) property not exempt under (3) of this
subsection that
(A) is owned by a private, nonprofit
college or university that is accredited by a regional
or national accrediting agency recognized by the
Council for Higher Education Accreditation or the
United States Department of Education, or both; and
(B) was subject to a private leasehold,
contract, or other private interest on January 1,
2010, except that a holder of a private leasehold,
contract, or other interest in the property shall be
taxed to the extent of that interest;
(11) parking lots that are primarily used
to serve real property that is exempt under this
subsection and not used to derive income.
* Sec. 2. AS 29.45.030(b) is amended to read:
(b) In (a) of this section, "property used
exclusively for nonprofit religious purposes" includes
the following property owned by a religious
organization:
(1) the residence of an educator in a
private religious or parochial school or a bishop,
pastor, priest, rabbi, minister, or religious order of
a recognized religious organization; for purposes of
this paragraph, "minister" means an individual who is
(A) ordained, commissioned, or licensed as
a minister according to standards of the religious
organization for its ministers; and
(B) employed by the religious organization
to carry out a ministry of that religious
organization;
(2) a structure, its furniture, and its
fixtures used solely for a purpose that is directly
incidental to and vitally necessary for public
worship, charitable purposes, religious administrative
offices, religious education, or a nonprofit hospital;
(3) lots required by local ordinance for
parking near a structure defined in (2) of this
subsection.
* Sec. 3. AS 29.45.030(c) is repealed and reenacted
to read:
(c) Property described in (a)(3) or (4) of this
section from which income is derived is exempt from
general taxation only if the income is from
(1) use of the property by a nonprofit
religious, charitable, or hospital group;
(2) use of the property by an educational
group exclusively as classroom space;
(3) use of the property for fundraising for
a nonprofit religious, charitable, hospital, or
educational group; or
(4) leasing the property to another person
to accomplish the purpose for which the property is
exempt; this paragraph does not apply to property
owned by an educational group.
* Sec. 4. AS 29.45.030 is amended by adding new
subsections to read:
(o) Property described in (a)(3) of this section
that is under construction or reconstruction and
intended to be used primarily for exempt purposes upon
completion is exempt from general taxation if the
construction or reconstruction is completed within two
years after the date a building permit is issued for
the property. In this subsection, construction or
reconstruction is completed on the first day the
property is occupied and used for the exempt purpose.
(p) Property described in (a)(3) of this section
remains exempt from general taxation if the property
is used for
(1) a purpose that is directly incidental
to and vitally necessary for the exempt use of other
property; or
(2) a nonexempt purpose for an
insubstantial period.
(q) If property described in (a)(3) of this
section is used for exempt and nonexempt purposes,
only the part of the property that is devoted to and
used for the exempt purpose is exempt from general
taxation. However, property devoted to and used for an
exempt purpose may be used for a nonexempt purpose and
remain exempt from general taxation if the nonexempt
purpose is occasional, isolated, and irregular and
does not generate substantial income. If a part of the
property is used for a nonexempt purpose, the property
is taxable and the assessed value of the property is
the value of the part of the property that is not
exempt."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 5"
Renumber the following bill sections accordingly.
Page 3, line 18:
Delete all material.
REPRESENTATIVE FIELDS objected.
5:55:46 PM
The committee took an at-ease from 5:55 p.m. to 5:56 p.m.
5:56:08 PM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature,
offered to have his staff give a sectional analysis of Amendment
1.
5:57:20 PM
DAVID GOFF, Staff, Representative Frank Tomaszewski, offered a
sectional analysis of Amendment 1 to HCS CSSB 77(CRA), Version
D, as follows:
Relating to the property exempt[ion] from municipal
taxation amendment, Section 1 amends AS 29.45.030(a).
This section establishes [that] parking lots ...
primarily used to serve real property and ... not used
to derive income are exempt under municipal taxation.
Section 2 amends AS 28.45.030(b), clarifies that
property in this section should be used for non-
profit, religious purposes, [and] further in this
section clarifies that exempt property remains exempt
if it is used solely for the purpose that is directly
incidental to and ... vitally necessary for the exempt
use of the property. Section 3, AS 29.45.030(c),
clarifies that properties described in (a)(3) or (4)
of this section that generate income and are used
primarily are exempt from general taxation if the
income is from use of a property by a non-profit
religious, charitable, hospital group, or an
educational group - educational group only as a
classroom space. Use for fundraising by these groups
is also allowed. ... Section 4 establishes that
property described in (a)(3) of this section is under
construction or reconstruction and is intended for use
for tax-exempt purposes upon completion is exempt from
general taxation if completion is within two years of
permitting. This section clarifies completion as the
first day the property is occupied for the mission.
This section also adds language based on City &
Borough of Juneau municipal ordinance code, which
outlined how assessors should assess exempt property
which has portions used for non-exempt purposes. This
language provides legislative guidance on how such
property should be assessed, codifies best practices
for within the state, and addresses ambiguity that has
been prevalent within assessors' interpretations of
the law.
6:00:09 PM
REPRESENTATIVE FIELDS noted this would be mandatory and inquired
as to the foregone revenue for the localities that would be
affected.
MR. GOFF responded that this would take things back to the way
they were in 2018. He indicated that the bill would keep
exemptions as they were and clarify what is exempt; it would not
expand exemptions. In response to a follow-up, he clarified
that prior to 2018, taxes were not collected on exempt
properties but assessors were portioning out nonexempt uses on
exempt properties and taxing them.
REPRESENTATIVE FIELDS noted that his question had not been
answered. He mentioned a parking lot in Anchorage and inquired
whether there were any real-world examples of the effects of
Amendment 1.
MR. GOFF answered, "Each of these parking lots are part of the
non-profit organization." He reiterated that the proposed bill
would not expand the exemptions.
6:03:57 PM
CHAIR C. JOHNSON, in response to Representative Allard, said the
director of DCCED was online to answer questions but no
assessors were available.
MR. GOFF, in response to Representative Allard, said he did not
know the current amount in property taxes paid by [Providence
Alaska Medical Center].
6:04:54 PM
REPRESENTATIVE SUMNER stated that as cross-sponsor to the bill,
carrying the House companion bill, he is "violently opposed to
this amendment." He said he objects to adding another mandatory
exemption for local governments that is not funded.
6:05:27 PM
REPRESENTATIVE SCHRAGE asked whether prospective stakeholders
have been given the chance to weigh in on this issue. He
predicted there may be "strong consequences" for municipalities.
6:06:06 PM
REPRESENTATIVE ALLARD noted that currently, 78 percent of taxes
for Providence has been exempted, and she said she knows that
about $86 million "will be a reduction of that." She asked,
"How much that Providence is currently exempt from is currently
parking lot?"
6:06:36 PM
REPRESENTATIVE TOMASZEWSKI responded that his staff has "had
questions out to these folks, and they can't seem to put a
number on that" or specify how Amendment 1 would "change what
they have already." He said the bill specifies parking lots.
He indicated that departments are continuing to look for revenue
through assessments, and clarifying language is needed when
assessors start charging non-profit entities for the use of
their parking lot when using it for snow removal or overflow
parking. He stated that [Amendment 1] would not change anything
"unless they have already been taxing parking lots."
REPRESENTATIVE ALLARD said she just wants to know where the
other 22 percent is. She said she is not getting answers from
the Municipality of Anchorage; therefore, she indicated her only
choice is to support Amendment 1.
6:09:11 PM
REPRESENTATIVE FIELDS referred to a letter from a municipal
assessor and indicated that the mayor [of Anchorage] has
recommended the legislature not approve HB 267 in its current
form. He mentioned "a shift from exclusive to primary use"
related to charitable exemption. He cautioned that adopting
"this" could result ambiguity in tax collecting if, for example,
a for-profit entity were to operate on a non-profit property.
CHAIR C. JOHNSON asked whether Representative Fields was talking
about SB 77 or HB 267.
REPRESENTATIVE FIELDS explained that Amendment 1 would place HB
267 into SB 77, Version D. He offered his understanding that
the Municipality of Anchorage may not have been aware that this
was going to be proposed.
REPRESENTATIVE ALLARD remarked that the Municipality of
Anchorage has not responded.
6:12:03 PM
MR. GOFF said the original bill had used "primarily" and this
was changed back to "exclusively". He noted that Amendment 1
adopts changes recommended by the Municipal League with regards
to use of the word of "exclusively". He noted that "primarily"
gives an opportunity for more leeway. He explained that the
current Municipal Leagues opinion on Amendment 1 is not
currently known. He read a section from the most recent
Municipal Minute Newsletter that this bill attempts to clarify
taxation of non-profits and that they look forward to a CS that
improves the bill from its current version.
REPRESENTATIVE ALLARD mentioned that she was told by the
municipality that the assessor would likely be on this call, but
he was absent to answer these questions.
6:13:37 PM
REPRESENTATIVE SCHRAGE asked if the legislature has reached out
to any other municipalities such as Fairbanks, Sitka, or Wasilla
to understand the impact of this amendment. He was concerned
that other affected groups couldn't testify on an amendment that
could have financial repercussions to budgets.
CHAIR C. JOHNSON noted that he had not reached out to other
municipalities.
REPRESENTATIVE SCHRAGE asked whether the House Community and
Regional Affairs Standing Committee heard this issue.
MR. GOFF said that they held an initial meeting and tried to
have a follow-up to introduce the CS but it was unsuccessful.
REPRESENTATIVE SCHRAGE said he did not think the public process
was followed and that time was still available for public
testimony. He reaffirmed concern of potential financial
repercussions to municipal budgets that the bill may have.
6:16:41 PM
REPRESENTATIVE TOMASZEWSKI noted that it would be good to have
the opportunity to present these things, but this bill concept
has been in development for two years and the opportunity for
municipalities to come forward has existed. He remarked that
over aggressive tax assessors have hit non-profits such as food
banks and these types of issues are statewide. He claimed that
the state tax assessor has put forth a process to where they are
being aggressive to certain institutions in the state and while
it would be great to talk about these things, getting held up
has resulted in the current timeline issue.
6:18:42 PM
REPRESENTATIVE FIELDS mentioned that this amendment has the
potential to unlevel the playing field significantly to the
disadvantage of private parking lot owners because of the way
the language reads. He mentioned that Providence could rent one
of their parking lots. He mentioned that this could increase
operating costs for private lot owners.
6:20:02 PM
REPRESENTATIVE ALLARD made a correction for the record that as
of April 16, the conversation about parking lots at Providence
was directly spoken about from the MOA. She clarified that they
had time to digest the mechanisms of the bill.
6:20:44 PM
REPRESENTATIVE SUMNER noted that in his time in the Mat-Su
Borough Assembly, they have always opposed mandatory state
exemptions and supported optional local exemptions. He noted
that he does not believe that the Mat-Su Borough Assembly has
weighed in, but they would likely be opposed to state
exemptions. He remarked that after reading the bill, he felt
that it may exempt all Providence property from taxation because
of an argument of what is incidental. He asked the committee to
take a strong look at the bill.
6:21:58 PM
MR. GOFF responded to Representative Sumner by describing what
the section on page 4 highlights, as follows:
Only the part of the property that is devoted to and
used for the exempt purpose is exempt from general
taxation. However, property devoted to and used for
exempt purposes may be used for non-exempt purposes
and remained exempt from general taxation. Of the non-
exempt purpose is occasional, isolated, and, irregular
and does not generate substantial income.
MR. GOFF said if part of that property is used for a non-exempt
purpose, then the property is taxable and assessed value of the
property is that part of the property that is non-exempt.
REPRESENTATIVE SUMNER read a portion from Section 2 of the bill
and mentioned that Providence is a religious non-profit. Based
on his reading, he reaffirmed that Providence would be tax-
exempt.
6:23:29 PM
The committee took an at-ease from 6:23 p.m. to 6:29 p.m.
6:29:44 PM
REPRESENTATIVE TOMASZEWSKI gave wrap-up comment on Amendment 1
to SB 77, Version D. He said it looks like "we" have more work
to do, and he looked forward to a more robust discussion in the
House Community and Regional Affairs Standing Committee. He
mentioned that there had been public testimony, which gave
municipalities time to weigh in. He asked Representative Shaw
to withdraw Amendment 1.
6:30:52 PM
REPRESENTATIVE SHAW [moved to withdraw] Amendment 1. There
being no objection, it was so ordered.
6:31:14 PM
REPRESENTATIVE TILTON moved to report HCS CSSB 77, Version 33-
LS0416\D, Dunmire, 4/15/24, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, HCS CSSB 77(RLS) was reported out of the House
Rules Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 264-STAR Amendment Support.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 - Explanation of Changes from v.U.A to R.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264, CS, ver. R.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 (HSS).pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 - Engrossed.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 - My House Alaska Trafficking Surveys Example - Supporting Document.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 - Sectional Analysis.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 - Explanation of Changes from v.S to v.U.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 Fiscal Note 2 DFCS.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 Sponsor Statement - Screening for child sex trafficking (CST) 2.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB 264 Fiscal Note 1 DFCS.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB0264 ver. B.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| HB0264 ver. U.pdf |
HRLS 4/22/2024 5:30:00 PM |
HB 264 |
| SB 77, ver. D.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Sectional Analysis, vers. R.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Sponsor Statement, vers. R.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Supporting Doc.; Agnew Beck Memo, 4.25.23.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Summary of Changes, vers. R.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Fiscal Note.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 Letters of Support Received as of 4.25.23.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 ver. R.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 ver. U.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 77 ver. S.A.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 77 |
| SB 159 American Legion Auxiliary Resolution 2023.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |
| SB 159 In Flanders Fields.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |
| SB 159 Sponsor Statement 1.18.2024.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |
| SB 159 VA Article 5.16.2023.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |
| SB 159.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |
| SB 159 Fiscal Note.pdf |
HRLS 4/22/2024 5:30:00 PM |
SB 159 |