03/18/1993 01:31 PM House FIN

  HB 66     An  Act   relating  to   municipal  property   tax                 
            exemptions for certain  residences and to property                 
            tax  equivalency  payments for  certain residents;                 
            and providing for an effective date.                               
                                                                               
            CS  HB 66 (FIN) was  held in Committee for further                 
            discussion.                                                        
  HOUSE BILL 66                                                                
                                                                               
       "An Act  relating to municipal  property tax exemptions                 
       for certain residences and  to property tax equivalency                 
       payments  for certain  residents; and providing  for an                 
       effective date."                                                        
                                                                               
  Co-Chair MacLean provided the Committee  a brief overview of                 
  the changes made by the Subcommittee to HB 66 work draft #8-                 
  GH1032\R dated 3/15/93.   [Attachment #12].   She noted that                 
  Section 4 contains the changes made by  the Subcommittee and                 
  does not include:                                                            
                                                                               
       1.   Renters rebate;                                                    
       2.   Deferral option;                                                   
       3.   Hardship language;                                                 
       4.   Full and true value exemption.                                     
                                                                               
  Representative  Grussendorf pointed  out  that changing  the                 
  effective date to January 1, 1994 would place responsibility                 
  on  the  municipalities  for the  transitional  period.   He                 
  recommended adding a contribution.                                           
                                                                               
  Co-Chair MacLean MOVED CS HB 66 (FIN) work draft 8-GH1032\R,                 
  Cook, dated  3/15/93 as  the version  before the  Committee.                 
  There being NO OBJECTIONS, it was ordered.                                   
                                                                               
  Representative Brown  provided the Committee  with Amendment                 
  net for the poorest citizens that they not loose their homes                 
  as a result  of the phase out of the program.  The amendment                 
  would provide that  there be a mandatory  deferment of taxes                 
  owed for an individual  whose adjusted gross income  is less                 
  than  $24 thousand  dollars.   She  urged  the Committee  to                 
  consider the amendment for the senior citizens.                              
                                                                               
  (Tape Change, HFC 93-50, Side 2).                                            
                                                                               
  KENT  E.  SWISHER,  EXECUTIVE   DIRECTOR,  ALASKA  MUNICIPAL                 
  LEAGUE, JUNEAU,  ALASKA,  noted  specific  concerns  of  the                 
  Alaska Municipal League (AML).                                               
                                                                               
       *    Community  Approval - Granting  an exemption  or a                 
            deferral  is an  important public  policy decision                 
            having impacts on  all other taxpayers and  on the                 
            level of service offered  by the local government.                 
            He   stated  the  local  public  should  have  the                 
            opportunity to participate in the decision through                 
            the  polls.    ALM  requests  that  the  Committee                 
            consider  amending  HB  66  to  provide for  voter                 
            approval of local ordinances creating exemption or                 
                                                                               
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            deferral structures.                                               
                                                                               
       *    Personal Financial Circumstances -  Currently, the                 
            statute  does  not  include  authority  for  local                 
            government to consider  individual financial  need                 
            or other  circumstances in creating  an exemption,                 
            deferral, or combination  system.   AML urges  the                 
            Committee  to  amend  HB   66  to  clarify   local                 
            government's ability  to consider needs  in making                 
            decisions for that area.                                           
                                                                               
       *    Effective Date - When HB 66 was introduced, it had                 
            an effective date of January  1, 1993, which would                 
            be consistent.   There is no money provided in the                 
            Governor's  budget  proposal   for  funding   this                 
            mandate.  The concept of deferral was not included                 
            in the bill, and the required action at  the local                 
            level was to grant or not grant tax exemption to a                 
            clearly  defined  group  per   regulations  to  be                 
            adopted by DCRA.                                                   
                                                                               
  Representative Brown questioned the Subcommittee elimination                 
  of the authority  for communities to develop  programs based                 
  on "need".   Co-Chair MacLean  stated that the  Subcommittee                 
  intended to eliminate that authority.  Representative Hanley                 
  pointed  out  that  Amendment #1  requires  a  "needs based"                 
  program  and asked if that was permissive.  Co-Chair MacLean                 
  stated  that "needs  based" would  be made  optional  by the                 
  municipalities.                                                              
                                                                               
  BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY                 
  AND REGIONAL AFFAIRS, stated the  "needs based" sentence was                 
  left out in order that the municipalities would not act only                 
  on that.  He noted, y not  adding the "needs based" language                 
  would allow the municipalities the option.                                   
                                                                               
  Co-Chair Larson recommended  drafting a Subcommittee  Letter                 
  of Intent explaining the "needs based" concern.                              
                                                                               
  Co-Chair  MacLean  suggested  that the  amendment  could  be                 
  placed on  Page 3, Line 9.   She explained that language had                 
  been   modified   so   to   include    no   dollar   amount.                 
  Representative  Brown  restated  that  the  amendment  would                 
  assure  that  low  income people  would  not  loose property                 
  because of their  inability to  pay the tax.   Mr.  Geraghty                 
  pointed out that the amendment would change the language and                 
  at which time all the seniors would not be given the  option                 
  to  have  their taxes  deferred.   This  would create  a tax                 
  liability and/or a municipal lien on the property.                           
                                                                               
  GENE DOW,  LEGISLATIVE  OFFICER, VETERANS  OF  FOREIGN  WARS                 
  (FVW), JUNEAU, ALASKA, testified in opposition of HB 66.  He                 
                                                                               
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  state  that  the  proposed legislation  would  affect senior                 
  citizens and  veterans income.   He added that  the veterans                 
  also  oppose  the  elimination  of  the $750  dollar  burial                 
  gratuity further discussion followed.                                        
                                                                               
  Co-Chair Larson noted  that CS HB 66 (FIN) would  be HELD in                 
  Committee for further discussion.