Legislature(1993 - 1994)

02/08/1993 01:00 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 73:  ANCSA STATE TAX EXEMPTIONS                                           
  CHAIRMAN PORTER announced that the next item of business was                 
  a hearing on HB 73, relating to ANCSA (Alaska Native Claims                  
  Settlement Act) state tax exemptions.  He noted that Rep.                    
  MacLean was not present, but her aide, Rena Bukovich, would                  
  address the committee on HB 73.                                              
  Number 414                                                                   
  PRIME SPONSOR OF HB 73, came forward to address the                          
  committee.  She noted that Rep. MacLean was chairing a House                 
  Finance Committee meeting and could not attend the Judiciary                 
  Committee meeting.  Ms. Bukovich said that HB 73 had been                    
  introduced primarily to bring state law into compliance with                 
  federal law regarding the exemption of ANCSA property from                   
  taxation.  She noted that in 1987, federal law was changed                   
  to continue the property tax exemption from federal, state,                  
  or local taxation on ANCSA land until development occurred.                  
  MS. BUKOVICH mentioned that HB 73 reflected those changes in                 
  state law in order to avoid confusion in the application of                  
  the state's tax laws.  In the drafting process, she added,                   
  the attorney noticed other sections of state law which                       
  needed to be updated and included those changes in HB 73.                    
  For the most part, she said, those changes were technical in                 
  nature.  The bill did not expand or reduce any laws already                  
  mandated by federal government, she added, it merely cleaned                 
  up state law and ensured that obsolete statutes did not lead                 
  to misinterpretation by state assessors and others who                       
  worked with Alaska's tax laws.  She noted that the bill had                  
  the support of the Alaska Federation of Natives.                             
  MS. BUKOVICH noted that HB 73 had a zero fiscal note.  The                   
  same bill passed the House last year, she said, but died in                  
  the Senate Rules Committee.  To her knowledge, there were no                 
  problems or concerns with the bill, as it was primarily a                    
  housekeeping measure.                                                        
  Number 440                                                                   
  CHAIRMAN PORTER thanked Ms. Bukovich for her testimony.                      
  Number 445                                                                   
  REP. GREEN asked if federal law would allow the state to                     
  help the Native community to improve its land, instead of                    
  giving tax breaks for unimproved land.                                       
  Number 459                                                                   
  MS. BUKOVICH said that she could not address federal law                     
  questions, but noted that a representative from the Alaska                   
  Federation of Natives could probably answer Rep. Green's                     
  Number 469                                                                   
  REP. NORDLUND asked Ms. Bukovich what the exact changes in                   
  federal law were that required the introduction of HB 73.                    
  Number 468                                                                   
  MS. BUKOVICH again noted that she could not address                          
  questions of federal law.                                                    
  Number 473                                                                   
  address the committee.                                                       
  MR. CHENOWETH told the committee that he had drafted both                    
  the bill now before the committee and its predecessor.                       
  Number 476                                                                   
  REP. NORDLUND asked Mr. Chenoweth what changes in federal                    
  law had prompted introduction of HB 73.                                      
  Number 480                                                                   
  MR. CHENOWETH noted that there were two principal changes,                   
  in the form of two federal laws passed since the Alaska                      
  Native Claims Settlement Act - the Alaska National Interest                  
  Lands Conservation Act and the 1987 ANCSA Amendments.  The                   
  principal change that pertained to HB 73 is that regarding                   
  the handling of the taxable, or improved, property.                          
  Number 500                                                                   
  MR. CHENOWETH added that congress had removed some language                  
  from one section of ANCSA and reworked it in another section                 
  of the law.  He stated that HB 73 reflected those changes in                 
  federal law.  Another part of ANCSA which was changed dealt                  
  with who could receive property in the event of the death of                 
  a Native, and whether or not the exemption enjoyed by the                    
  original property owner carried over to the new owner.  Most                 
  of the rest of HB 73, he noted, was an attempt to clean up                   
  cross references in the Alaska Statutes.                                     
  Number 522                                                                   
  MR. CHENOWETH stated that he had tried to clean up the                       
  statutes so that this exercise would not be necessary every                  
  time congress made changes to ANCSA, through the use of the                  
  phrase "as amended" in the bill.                                             
  Number 530                                                                   
  REP. PHILLIPS mentioned that this bill had passed the House                  
  unanimously the year before.  She added that she was pleased                 
  to see the addition of the "as amended" phrases.                             
  Number 535                                                                   
  MR. CHENOWETH commented that HB 73 should ensure that the                    
  Alaska statutes automatically kept pace with changes in                      
  federal law.                                                                 
  Number 542                                                                   
  CHAIRMAN PORTER asked if the federal laws which pertained to                 
  HB 73 resulted in a change in the general notion that these                  
  lands were not taxable until they were developed.                            
  Number 552                                                                   
  MR. CHENOWETH responded that there had been no material                      
  changes.  He reiterated that in drafting the bill, he had                    
  simply updated the statutes to reflect changes in federal                    
  law.  He further indicated that some changes were made when                  
  language was deleted from one section of ANCSA and                           
  reinserted into another section, but they were not                           
  significant changes.                                                         
  Number 568                                                                   
  CHAIRMAN PORTER asked if federal law had altered the                         
  provision by which regional corporation shares were                          
  Number 573                                                                   
  MR. CHENOWETH noted that there had been changes in the                       
  handling of shares.  That change, he added, was reflected in                 
  HB 73 on page 3, lines 22-26.  The federal law was changed                   
  to clarify who was eligible to receive shares.                               
  Number 596                                                                   
  CHAIRMAN PORTER asked if a non-Native could inherit regional                 
  corporation shares.                                                          
  Number 602                                                                   
  MR. CHENOWETH replied that the holder of ANCSA corporation                   
  shares could make those shares available to an adopted or a                  
  natural non-Native child.  He said that the changes in                       
  federal law did not make it possible to sell corporation                     
  Number 611                                                                   
  CHAIRMAN PORTER asked if any changes made by HB 73 did not                   
  reflect changes that had been made in federal law.                           
  Number 615                                                                   
  MR. CHENOWETH indicated that there was nothing in HB 73                      
  which did not reflect changes in federal law.  He commented                  
  that he had worked closely with the Alaska Federation of                     
  Natives in drafting the bill.                                                
  Number 621                                                                   
  REP. GREEN said that at first glance, the bill appeared to                   
  be discriminatory in that Natives could have tax relief on                   
  unimproved property, whereas non-Natives holding the same                    
  property would have to pay taxes on it.  He asked Mr.                        
  Chenoweth how the federal government had addressed the                       
  discriminatory nature of the law.  He also asked about the                   
  state helping to develop this unimproved land, instead of                    
  granting tax relief to Native owners.                                        
  Number 641                                                                   
  MR. CHENOWETH responded that Rep. Green's point about                        
  discrimination was well taken.  However, he called Rep.                      
  Green's attention to the fact that congress held the                         
  exclusive right to handle relations with Indian tribes.                      
  Because of that exclusive relationship, he said, the state                   
  of Alaska had no choice but to follow suit.                                  
  MR. CHENOWETH stated that some efforts had been made in the                  
  past to try to identify existing state programs and how they                 
  could assist rural Alaskans develop lands.  He expressed an                  
  opinion that that was the state's principal means of                         
  encouraging development of Native lands.                                     
  Number 670                                                                   
  CHAIRMAN PORTER thanked Mr. Chenoweth for addressing                         
  committee members' questions.  He asked the committee how it                 
  wished to proceed.                                                           
  Number 674                                                                   
  REP. GREEN moved to pass HB 73 out of committee.                             
  Hearing no objections, CHAIRMAN PORTER approved the motion                   
  to pass HB 73 out of committee.                                              

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