03/28/2023 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

        SB  77-MUNI PROP TAX EXEMPTION/TAX BLIGHTED PROP                                                                    
                                                                                                                                
2:05:31 PM                                                                                                                    
CHAIR DUNBAR  announced the consideration  of SENATE BILL  NO. 77                                                               
"An Act relating to municipal  property tax; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
He stated that  this is the second hearing of  this bill, and the                                                               
intention is to consider amendments today.                                                                                      
                                                                                                                                
2:05:57 PM                                                                                                                    
CHAIR  DUNBAR  moved  to  adopt  Amendment  1B,  work  order  33-                                                               
LS0416\B.3, for SB 77.                                                                                                          
                                                                                                                                
                                               33-LS0416\B.3                                                                    
                                                     Dunmire                                                                    
                                                     3/28/23                                                                    
                                                                                                                                
                                                                                                                                
                          AMENDMENT 1B                                                                                      
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                BY SENATOR DUNBAR                                                                     
          TO:  SB 77                                                                                                            
                                                                                                                                
                                                                                                                                
     Page 2, line 17, following "rate":                                                                                         
          Insert ", not to exceed 50 percent of the annual                                                                      
     property tax assessed on a property,"                                                                                      
                                                                                                                                
2:05:58 PM                                                                                                                    
SENATOR OLSON objected for purposes of discussion.                                                                              
                                                                                                                                
CHAIR DUNBAR  spoke to the  amendment, stating there  was concern                                                               
that local governments might abuse  the process by unduly raising                                                               
taxes  on different  properties and  then foreclose  on them.  He                                                               
opined that this possibility is  relatively unlikely based on his                                                               
experience serving  in local  government. However,  he recognized                                                               
that, as written,  a "blight tax" upper limit is  not defined. In                                                               
some places,  in Georgia  for example, the  "blight tax"  is used                                                               
more  aggressively and  can be  two or  three times  the assessed                                                               
property tax.  Alaska has no  sales or  income tax, so  the state                                                               
property taxes  are often  a larger percentage  of the  total tax                                                               
burden. He said  that Amendment 1B proposes a tighter  cap on the                                                               
amount a local government can increase property taxes.                                                                          
                                                                                                                                
2:07:40 PM                                                                                                                    
SENATOR OLSON asked whether there  is any history of property tax                                                               
abuse in Alaska.                                                                                                                
                                                                                                                                
CHAIR DUNBAR replied  his research found no evidence  of that. He                                                               
expressed some confidence that local  governments would not abuse                                                               
the "blight tax,"  and Amendment 1B ensures a tax  cap. He said a                                                               
future  legislature   could  amend  the  cap   upwards  if  local                                                               
governments find this tool needs more power to be effective.                                                                    
                                                                                                                                
SENATOR OLSON removed his objection to Amendment 1B.                                                                            
                                                                                                                                
2:08:43 PM                                                                                                                    
CHAIR  DUNBAR found  no further  objection and  Amendment 1B  was                                                               
adopted. He solicited the will of the committee.                                                                                
                                                                                                                                
2:09:07 PM                                                                                                                    
SENATOR OLSON  moved to  report SB  77, 33-LS0416\B,  as amended,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR DUNBAR  found no  objection and  CSSB 77(CRA)  was reported                                                               
from  the   Senate  Community   and  Regional   Affairs  Standing                                                               
Committee.