04/27/2023 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

        HB 134-PROPERTY TRANSFER TAX; MUNI TELECOMM TAX                                                                     
                                                                                                                                
8:28:15 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK announced  that the next order  of business would                                                               
be HOUSE  BILL NO. 134,  "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."                                                                                                                      
                                                                                                                                
8:28:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JULIE  COULOMBE,  Alaska  State  Legislature,  as                                                               
prime sponsor,  presented HB  134.   She paraphrased  the sponsor                                                               
statement  [included  in the  committee  packet],  which read  as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     HB 134  prohibits the state and  local governments from                                                                    
     imposing  real  estate   transfer  taxes,  fees,  other                                                                    
     assessments on sales,  grants, assignments, or transfer                                                                    
     of real property. A transfer  fee is an additional cost                                                                    
     that is increasingly being assessed  by local and state                                                                    
     governments for property transactions in other states.                                                                     
                                                                                                                                
     Over the  last several years  we have seen  an increase                                                                    
     in tax rates across America.  By increasing the cost of                                                                    
     purchasing a home, higher transfer  taxes have a ripple                                                                    
     effect on this pattern  of homeownership. Those seeking                                                                    
     to be  first-time homeowners  face great  upfront costs                                                                    
     to  purchase a  home,  thereby  reducing the  potential                                                                    
     number  of first-time  homebuyers. Families  seeking to                                                                    
     purchase  larger homes  may find  it difficult  to sell                                                                    
     their homes and/or find a  home. This impact extends to                                                                    
     seniors, who are  retired and on fixed  incomes and are                                                                    
     dependent on  selling their homes home  to help finance                                                                    
     their  retirement.  In  short, transfer  tax  increases                                                                    
     disrupt   a  lifecycle   model   of  housing,   whereby                                                                    
     households adjust their housing as their needs change.                                                                     
                                                                                                                                
     HB 134  will aid not  only homebuyers and  sellers, but                                                                    
     existing  real  estate  laws   overall  in  Alaska.  It                                                                    
     reassures the  state will not enact  additional charges                                                                    
     to real estate property  purchases which would increase                                                                    
     affordability for the housing market and raise real                                                                        
     estate economy.                                                                                                            
                                                                                                                                
     I respectfully request the support of my colleagues on                                                                     
     HB 134.                                                                                                                    
                                                                                                                                
8:30:14 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK welcomed invited testifiers.                                                                                    
                                                                                                                                
8:30:40 AM                                                                                                                    
                                                                                                                                
RYLEH BODYSELT gave invited testimony in  support of HB 134.  She                                                               
began  by mentioning  Alaska's several  military bases,  and that                                                               
military  personnel  often  face  challenges  when  it  comes  to                                                               
finding housing.   She  stated some of  the most  "gut wrenching"                                                               
experiences in her  career had been helping clients  that are not                                                               
able  to find  affordable housing.   She  opined that  HB 134  is                                                               
needed, as the  bill would help fight to  keep housing affordable                                                               
in Alaska.                                                                                                                      
                                                                                                                                
8:33:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HIMSCHOOT offered  her understanding that military                                                               
families have programs or federal  assistance that help them with                                                               
buying and selling  homes due to the transient  nature of serving                                                               
in the military.                                                                                                                
                                                                                                                                
8:33:52 AM                                                                                                                    
                                                                                                                                
MS. BODYSELT  confirmed there are  programs to help buy  and sell                                                               
homes -  most commonly  being VA loans  - but  military personnel                                                               
must be able to afford it.                                                                                                      
                                                                                                                                
8:34:24 AM                                                                                                                    
                                                                                                                                
BARBARA ANGAIAK gave invited testimony  in support of HB 134, and                                                               
she stated  the cost  of living  in Alaska  is already  high, and                                                               
affordable housing is  a huge factor for families as  well as the                                                               
ability to  attract and retain  employees in all sectors.   Added                                                               
fees on top of already high  prices cause even more problems, she                                                               
concluded.                                                                                                                      
                                                                                                                                
8:37:46 AM                                                                                                                    
                                                                                                                                
MARK  MASLEY gave  invited testimony  in support  of HB  134, and                                                               
expressed his belief that the bill  is critical for the future of                                                               
home ownership  in Alaska.   As other  testifiers have  noted, he                                                               
acknowledged that Alaska is facing  an affordable housing crisis.                                                               
The potential  for a transfer  tax could harm current  and future                                                               
homeowners,  in particular  first-time  buyers,  who are  already                                                               
facing  rising interest  rates, property  taxes, and  significant                                                               
financial  challenges that  affect  their ability  to purchase  a                                                               
home.   Senior  citizens on  fixed incomes,  he explained,  could                                                               
also be significantly  impacted by a transfer tax.   He urged the                                                               
committee to support HB 134 and thanked them for their time.                                                                    
                                                                                                                                
8:40:29 AM                                                                                                                    
                                                                                                                                
LARRY BURKE  gave invited  testimony in  support of  HB 134.   He                                                               
explained  that  the  transfer  tax  is  separate  from  recorded                                                               
mortgage  taxes;  the  transfer  tax is  not  tax  deductible  on                                                               
federal taxes.  He stressed his  support for moving HB 134 out of                                                               
committee.                                                                                                                      
                                                                                                                                
8:42:23 AM                                                                                                                    
                                                                                                                                
CALLIE  BACON,  Seward  Properties,  gave  invited  testimony  in                                                               
support of HB  134.  She stated  that a transfer tax  on the sale                                                               
of  real  estate would  be  harmful  to  the residents  of  rural                                                               
Alaska, and she  noted 45 percent of all buyer  clients served in                                                               
2022  were  first-time buyers,  and  affordability  is already  a                                                               
challenge.   People  in  rural communities  such  as Seward,  she                                                               
explained,  cannot  afford  a  real estate  transfer  tax.    She                                                               
stressed her opposition  to the transfer tax and  her support for                                                               
the passage of HB 134 that it may be heard by the full body.                                                                    
                                                                                                                                
8:44:33 AM                                                                                                                    
                                                                                                                                
TERRY  BRYAN gave  invited testimony  in  support of  HB 134  and                                                               
provided a brief  background of his time in title  insurance.  He                                                               
said  that  although  title  companies   would  not  be  directly                                                               
impacted by the  implementation of transfer fees, he  is still in                                                               
support  of  HB 134.    Adding  any  additional expense  to  home                                                               
ownership  would force  many first-time  home buyers  out of  the                                                               
market.  Being  the real estate industry is a  key economic force                                                               
in the  state of Alaska, the  legislature should look at  ways to                                                               
support and ensure the state's  growth, not to impede or handicap                                                               
the  path  to  homeownership.     He  stated  he  personally  and                                                               
professionally supports HB 134.                                                                                                 
                                                                                                                                
8:48:04 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK opened public testimony on HB 134.                                                                              
                                                                                                                                
8:48:14 AM                                                                                                                    
                                                                                                                                
NILS ANDREASSEN,  Alaska Municipal League, gave  testimony during                                                               
the  hearing of  HB 134.  He stated  not being  sure if  the bill                                                               
addresses housing  costs in  Alaska, and  the lack  of definition                                                               
within the bill does not help  clarify what a transfer is applied                                                               
to  and   would  require  a   definition  of  "transfer"   to  be                                                               
applicable.    He  highlighted   a  specific  concern  about  the                                                               
ambiguity of  the bill  and its effect  on local  government, and                                                               
its intent  to address the housing  crisis Alaska is facing.   He                                                               
encouraged the committee to spend  time on the housing crisis, as                                                               
well as the many other costs involved in housing consideration.                                                                 
                                                                                                                                
8:51:11 AM                                                                                                                    
                                                                                                                                
TONJA MOSER, representing  self, testified in support  of HB 134.                                                               
She noted her disagreement with  the last testifier, but said she                                                               
understood his  intent.   She stated her  concern is  that adding                                                               
another  tax  to  an already  expensive  transaction  would  make                                                               
housing  more unaffordable  than it  already is.   She  urged the                                                               
committee  to  work  towards positive  solutions  for  affordable                                                               
housing.                                                                                                                        
                                                                                                                                
8:52:43 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK,  after ascertaining  there was  no one  else who                                                               
wished to testify, closed public testimony on HB 134.                                                                           
                                                                                                                                
8:52:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COULOMBE thanked  the committee  for hearing  the                                                               
bill,  and   to  the   testifier  referencing   definitions,  she                                                               
confirmed that  there are statutory definitions  for transferring                                                               
real property that can be given to the committee.                                                                               
                                                                                                                                
8:53:36 AM                                                                                                                    
                                                                                                                                
CHAIR MCCORMICK announced that HB 134 was held over.