04/23/2024 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

        SB 179-PROPERTY TRANSFER TAX; MUNI TELECOMM TAX                                                                     
                                                                                                                                
8:03:56 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK announced  that the only order  of business would                                                               
be  CS  FOR  SENATE  BILL   NO.  179(CRA),  "An  Act  prohibiting                                                               
municipalities  from  levying  a  tax on  the  transfer  of  real                                                               
property;  prohibiting  the  state  from levying  a  tax  on  the                                                               
transfer of real property; and  relating to municipal taxation of                                                               
mobile telecommunications services."                                                                                            
                                                                                                                                
8:04:30 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:04 a.m. to 8:10 a.m.                                                                       
                                                                                                                                
8:10:16 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK gave opening remarks for SB 179 and introduced                                                                  
invited testifiers to the committee.                                                                                            
                                                                                                                                
8:10:59 AM                                                                                                                    
                                                                                                                                
}SENATOR  JESSE  BJORKMAN*   Alaska  State  Legislature*  Juneau,                                                               
Alaska*  As prime  sponsor, presented  CSSB  179(CRA).{ as  prime                                                               
sponsor,  presented CSSB  179(CRA).   He paraphrased  the sponsor                                                               
statement  [included  in the  committee  packet],  which read  as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Senate   Bill   179   is   the   result   of   numerous                                                                    
     conversations with  realtors from  around the  state as                                                                    
     well   as   representatives  of   municipalities.   The                                                                    
     legislation  proposes  to prohibit  municipalities  and                                                                    
     the state from  imposing a transfer tax,  fees or other                                                                    
     assessments  on sales,  grants assignments  or transfer                                                                    
     of real property.                                                                                                          
                                                                                                                                
     Imposing these  taxes increases the cost  of purchasing                                                                    
     a home, the largest  investment most Alaskans will make                                                                    
     in their lifetime. Increasing the  cost of purchasing a                                                                    
     home  through  implementing   transfer  fees  or  taxes                                                                    
     simply increases the upfront cost to those purchases.                                                                      
                                                                                                                                
     Increasing the overall cost to  home sellers and buyers                                                                    
     will   dampen  all   home  and   property  sales.   The                                                                    
     additional  burden  of  these  type  of  taxes  have  a                                                                    
     negative  impact on  young, first  time home  buyers as                                                                    
     they begin  to raise their families.  Seniors, on fixed                                                                    
     incomes, lose retirement income  as the equity in their                                                                    
     homes are reduced.                                                                                                         
                                                                                                                                
     We've all been there,  struggling to purchase our first                                                                    
     home. With a new spouse and  maybe a child or two. Some                                                                    
     of us are  moving to larger homes as  our family grows.                                                                    
     Others of  us are  nearing retirement or  have retired.                                                                    
     We will all be affected by these taxes.                                                                                    
                                                                                                                                
     SB 179  provides relief by ensuring  additional charges                                                                    
     to  real estate  property purchases  are not  forced on                                                                    
     owners and purchasers.                                                                                                     
                                                                                                                                
     I   respectfully  ask   for   your   support  of   this                                                                    
     legislation  for  the  benefit  of  home  and  property                                                                    
     buyers and sellers all across our state.                                                                                   
                                                                                                                                
8:13:13 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK opened public testimony  on CSSB 179(CRA).  After                                                               
ascertaining  that no  one wished  to testify,  he closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
8:13:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HIMSCHOOT asked  how many  states have  a similar                                                               
tax ban to the one proposed in CSSB 179(CRA).                                                                                   
                                                                                                                                
SENATOR BJORKMAN said he did not know.                                                                                          
                                                                                                                                
REPRESENTATIVE HIMSCHOOT asked whether  Alaska Marine Lines (AML)                                                               
had taken a position on the proposed legislation.                                                                               
                                                                                                                                
SENATOR BJORKMAN explained  that AML is not in favor  of the bill                                                               
and  pointed  out  that  no   transfer  tax  is  currently  being                                                               
collected.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HIMSCHOOT  commented that transfer taxes  in other                                                               
states  are comparatively  small and  asked which  municipalities                                                               
were consulted in regard to CSSB 179(CRA).                                                                                      
                                                                                                                                
SENATOR BJORKMAN  answered that his  office spoke with  the Kenai                                                               
Peninsula  Borough  and said  that  he  couldn't recall  anything                                                               
further.                                                                                                                        
                                                                                                                                
8:15:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE  asked  whether  the proposed  bill  is  a                                                               
response  to  a  policy  in Juneau  involving  sales  prices  and                                                               
transfer taxes.                                                                                                                 
                                                                                                                                
SENATOR BJORKMAN said that his understanding is correct.                                                                        
                                                                                                                                
8:16:21 AM                                                                                                                    
                                                                                                                                
CHAIR  MCCORMICK moved  to  adopt Amendment  1  to CSSB  19(CRA),                                                               
labeled 33-LS1093\B.1, Dunmire, 4/22/24, which read:                                                                            
                                                                                                                                
     Page 2, following line 22:                                                                                                 
     Insert a new bill section to read:                                                                                         
         "* Sec. 9. The uncodified law of the State of                                                                      
     Alaska is amended by adding a new section to read:                                                                         
      APPLICABILITY. AS 29.45.650(l), enacted by sec. 4 of                                                                      
      this Act, and AS 29.45.700(h), enacted by sec. 6 of                                                                       
     this   Act,  do   not  apply   to  an   ordinance  that                                                                    
     establishes a sales or use  tax on the transfer of real                                                                    
     property   adopted  by   a   municipality  before   the                                                                    
     effective date of this Act."                                                                                               
                                                                                                                                
REPRESENTATIVE MCCABE objected.                                                                                                 
                                                                                                                                
8:16:36 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK explained Amendment 1,  saying it would create an                                                               
exemption for  communities that  already have  a transfer  tax in                                                               
place.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  MCCABE removed  his  objection.   There being  no                                                               
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
8:18:00 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
8:18:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE moved to report  CSSB 179(CRA), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal  notes.  There  being no objection,  HCS CSSB
(CRA)  was  reported from  the  House  Community and  Regional                                                               
Affairs Standing Committee.