Legislature(2005 - 2006)CAPITOL 124
03/31/2005 01:00 PM House MILITARY & VETERANS' AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB208 | |
| HB212 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 208 | TELECONFERENCED | |
| *+ | HB 212 | TELECONFERENCED | |
HB 212-PROPERTY TAX EXEMPTIONS FOR SENIORS/VETS 1:43:57 PM CHAIR LYNN announced that the final order of business would be HOUSE BILL NO. 212, "An Act relating to exemptions from municipal property taxes for certain primary residences; and providing for an effective date." REPRESENTATIVE THOMAS moved to adopt CSHB 212, Version 24- LS0684\F, Cook, 3/31/05, as the working document. There being no objection, Version F was before the committee. REPRESENTATIVE THOMAS, speaking as the sponsor of HB 212, explained that current law mandates that senior citizens and disabled veterans are exempt from the first $150,000 of their assessed property value. In a community with 12 mills, that amounts to about $1,800 a year, he specified. However, revenues [from the state] going to communities have been suspended for several years, which has cost many communities a significant amount. For instance, since [the state] has stopped providing funds for [the senior citizens property tax exemption], [the program] has cost Haines over $ 1 million. Therefore, this legislation places the senior citizen tax exemption under the local municipalities' jurisdiction. The effective date of 2008 provides the municipalities two years to decide how to deal with this exemption. Representative Thomas also pointed out that Version F allows the municipalities the ability to base the eligibility for the exemption on financial resources. Version F also includes a description of the term "disabled veteran" in this section of statutes. REPRESENTATIVE THOMAS informed the committee that the statewide revenue loss [for this exemption] is about 6 percent. However, in Wrangell it's about 16 percent of the tax base while it's 13 percent of Ketchikan's tax base and 9 percent of the Mat-Su [Borough's] and Petersburg's tax base. Representative Thomas clarified that the idea behind this legislation is to provide the local municipalities the authority to phase out the senior tax exemption if they so choose. He characterized this legislation as providing municipalities another tool [to deal with diminishing revenue sharing]. 1:47:56 PM REPRESENTATIVE DAHLSTROM said she thinks HB 212 is a good bill, but asked whether the word "veteran" needs to be in the title. REPRESENTATIVE GRUENBERG pointed out that this legislation also affects the senior citizen property tax exemption. Therefore, he opined that the language "veterans" shouldn't be included in the title. REPRESENTATIVE THOMAS offered to research the need for a title change and address it in the next committee of referral, the House Community and Regional Affairs Standing Committee. REPRESENTATIVE ELKINS expressed concern with this legislation because [the senior property tax exemption] program was mandated by the legislature. "For us to opt out and put the responsibilities on the municipalities is wrong. And we should try to do what's right," he stressed. Therefore, Representative Elkins stated that the legislature should either do away with the program or help fund it. Representative Elkins said he wouldn't support this legislation, although he has served on a municipal government and sympathizes with the sponsor's position. 1:50:55 PM REPRESENTATIVE GRUENBERG agreed with Representative Elkins. He highlighted programs, such as the longevity bonus and revenue sharing, for which the burden has been placed on the municipalities. He related his understanding that Representative Elkins has introduced legislation that would fund the [revenue sharing and municipal assistance] programs. REPRESENTATIVE THOMAS said he introduced this legislation per the request of several communities and the Southeast Conference. He informed the committee that he reviewed the possibility of eliminating the program and phasing it out over time. However, he relayed that he was told that the program couldn't be phased out over time and that the best option was to transfer the authority to the local municipalities. Representative Thomas expressed concern that when the Baby Boomers, of which he is a member, reaches the tax base at the same time, it will be a big problem statewide. Representative Thomas noted that he, too, has served at the local government level, but that local government wished it had the tool to hold local meetings on the option of phasing out the program. Furthermore, allowing the aforementioned to be done via ordinance versus an election would save the local government the cost of holding an election. Representative Thomas related his understanding that the Alaska Municipal League (AML) is in support of this as a tool to address the large problem that will arise in about five years. He then reminded the committee that the legislation does provide individuals with a means for relief from the municipality. 1:54:48 PM REPRESENTATIVE ELKINS confirmed that he has introduced legislation to reimburse municipalities up to 25 percent. He noted that the aforementioned legislation carries an approximately $29 million fiscal note. Returning to HB 212, Representative Elkins opined that when looking at seniors, in general, they should be viewed in a different light than HB 212 provides. He suggested that seniors should be viewed as an economic engine, and offered that in his community seniors, as an economic engine, provide over $3 million dollars annually and that dollar is estimated to turn three to five times in the community. Furthermore, the tax exempt dollars turn three to five times in a community. Representative Elkins related his belief that it's shortsighted to not view seniors as an economic engine. 1:56:07 PM REPRESENTATIVE DAHLSTROM said she would like to do more research on this issue, and related her preference for holding HB 212. REPRESENTATIVE THOMAS highlighted that HB 212 does not eliminate the senior citizen tax exemption. The legislation merely provides a local option. He then added that the [Baby Boomer] generation has had the benefit of inflation and thus should have built up enough money and not be a burden on society. In fact, some people receiving the exemption can afford to pay. Representative Thomas specified that he's not trying to cripple anyone, but merely wants to provide municipalities a tool. 1:57:35 PM CHAIR LYNN noted that he is a senior and a veteran, and would hate for the existence of the exemption to be dependent on where one lives. He opined that there should be some form of municipal sharing. In fact, he informed the committee of his proposal to fund municipal governments with some of the Amerada Hess funds. Chair Lynn reiterated his concern with regard to this exemption being dependent upon where one lives in the state. Therefore, he said he would like to table HB 212. 1:59:59 PM REPRESENTATIVE THOMAS informed the committee that he introduced HB 144, which would provide $150 million of the permanent fund earnings reserve, by a vote, to be distributed to municipalities. The aforementioned [and HB 212] are steps to better the health of communities. REPRESENTATIVE GRUENBERG said that his legislation, HB 52, requiring the state to adopt a fiscal plan should include this issue before the committee today. 2:02:38 PM CHAIR LYNN announced that HB 212 would be tabled for further discussion and study.
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