Legislature(2023 - 2024)BARNES 124
04/06/2023 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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 | |
| HB70 | |
| HB69 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 70 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 70-MUNICIPAL PROPERTY TAX EXEMPTIONS
8:03:50 AM
CHAIR MCCORMICK announced that the first order of business would
be HOUSE BILL NO. 70, "An Act relating to property exempt from
municipal taxation."
8:04:18 AM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature, as
prime sponsor, thanked the committee for hearing HB 70 and
introduced his staff to give an overview of the bill.
8:04:43 AM
MICHAELLA ANDERSON, Staff, Representative Frank Tomaszewski,
Alaska State Legislature, gave a brief overview of HB 70 on
behalf of Representative Tomaszewski, prime sponsor. She
paraphrased the sponsor statement [included in the committee
packet] which read as follows [original punctuation provided]:
House Bill 70 adds new language exempting non-
profits from municipal taxation on certain properties.
This includes parking lots owned by non-profits and
used for parking or other uses free of charge. This
also includes property of a store operated by a non-
profit that distributes food, shelter, clothes, or
health care for below market value or free.
Additionally, this maintains a non-profit's tax
exemption if they rent out their property to another
non-profit.
The Fairbanks Community Food Bank was founded in
1982 in the midst of a recession. People were
struggling to put food on their table, but stores had
an excess and food was going to waste. While in the
first year they collected and distributed a few
thousand pounds of food to a couple hundred people,
they now collect and distribute approximately five
million pounds of food.
Food banks and other charitable non-profits are a
pillar of our communities. They help our communities'
least fortunate when they need basic goods and
services. Of course, many nonprofits turn to
fundraising and facility rentals to keep their lights
on and doors open so they can continue to provide
their essential services.
This bill aims to support our non-profits in a
time of economic uncertainty in our state. With
revenues being down and permanent fund dividends being
cut creating a regressive tax on our least fortunate,
we must help those who help those in need.
MS. ANDERSON pointed out locations on a service map [included in
the committee packet], showing all areas the Fairbanks Community
Food Bank had assisted with "food through shipping."
8:06:38 AM
REPRESENTATIVE HIMSCHOOT asked if Representative Tomaszewski's
office had spoken with any local municipalities about the
possible impact of HB 70 on local revenue.
MS. ANDERSON replied that Representative Tomaszewski's staff
have talked to the Fairbanks North Star Borough and are
currently working with the borough on potential minor changes in
the bill language that would work better. She noted she had not
reached out to any other municipalities.
REPRESENTATIVE HIMSCHOOT questioned what the potential impacts
to education funding would be in terms of how the cap is related
to property tax.
MS. ANDERSON replied that she can provide the answer at a later
date.
REPRESENTATIVE HIMSCHOOT presumed that this would be a state
statute governing what happens at the local level while removing
some of the tax base at the local level, and she inquired about
a tax reimbursement.
MS. ANDERSON replied that staff can do research and provide the
committee with clarification at a later date.
8:08:35 AM
REPRESENTATIVE TOMASZEWSKI explained that the food bank
traditionally has had no property taxes; this would be new
revenue from the municipality.
8:09:16 AM
REPRESENTATIVE HIMSCHOOT commented that she favored local
control. She stated she will have to look into HB 70 more.
8:09:41 AM
REPRESENTATIVE RUFFRIDGE, [regarding Section 1 of HB 70, which
lists property exempt from taxation], referenced [subsection
(3)], beginning on page 2, line 16, which read:
(3) property used exclusively for nonprofit religious,
charitable, cemetery, hospital, or educational
purposes;
REPRESENTATIVE RUFFRIDGE questioned why the additional language
[proposed on page 3, line 19, through page 4, line 2] is
necessary and not covered already by subsection (3).
MS. ANDERSON replied that the intent of the added language is to
make explicit in statute that the other instances would be
exempt.
8:10:43 AM
REPRESENTATIVE MCCABE asked Representative Tomaszewski to
confirm that the City of Fairbanks is trying to tax the
foodbank, which does not make money.
REPRESENTATIVE TOMASZEWSKI responded that the food bank brings
in food donated by many organizations and gives the food away
for free.
8:12:04 AM
MS. ANDERSON clarified to Representative McCabe it is the
Fairbanks North Star Borough, not just the City of Fairbanks.
8:12:11 AM
REPRESENTATIVE MCCABE asked for clarity that the food bank does
not have any income to speak of other than what is donated to
them, but under HB 70, it would have to find a source of revenue
to pay taxes to the Fairbanks North Star Borough.
REPRESENTATIVE TOMASZEWSKI replied he did not know about income
sources; mostly [food banks] work on grants and do not generate
a lot of money.
8:13:00 AM
MS. ANDERSON gave the sectional analysis for HB 70 [included in
committee packet] which read as follows [original punctuation
provided]:
Section 1: Amends AS 29.45.0303(a) to add new
subsections (11) and (12)
(11): Adds parking lots
(A) owned by organizations incorporated
under state law being exempt under 26 U.S.C.
501(c)
(B) that is used for parking or other use
free of charge
(12): Adds real and personal property of a store
operated by organizations incorporated under
state law being exempt under 26 U.S.C. 501(c) if
the store
(A) deals with exclusively donated inventory
of food, shelter, clothes, or health care
distributed at no cost to needy individuals
(B) sells merchandise below market value to
support a literacy program or a program
providing needy persons with food, shelter,
clothes, or health care free of charge.
Section 2: Amends AS 29.45.030 to add a new subsection
(o) stating organizations exempt from (a)(11) or
(a)(12) may lease property and still qualify if
(1): the leasing organization is incorporated
under state law being exempt under 26 U.S.C.
501(c) and that organization uses the property
for an exempt activity under (a)(11) or (12)
(2): the lease payments are not the product of
the owner's main profit motive
(3): The amount charged is incidental and
reasonable for the exempt use of the property not
exceeding operational requirements for the
activity.
8:15:00 AM
REPRESENTATIVE HIMSCHOOT asked for understanding on whether it
is a local decision to tax a parking lot.
MS. ANDERSON offered her understanding it is under the
discretion of local control.
[HB 70 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 70 Fiscal Note CCED.pdf |
HCRA 4/6/2023 8:00:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |