Legislature(2005 - 2006)BELTZ 211

02/22/2006 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 265 Out of Committee
Heard & Held
<Bill Hearing Postponed>
<Bill Hearing Postponed>
          SB 193-DEFERRAL OF MUNICIPAL PROPERTY TAXES                                                                       
1:33:30 PM                                                                                                                    
CHAIR BERT  STEDMAN announced SB  193 to be up  for consideration                                                               
and asked for a motion to adopt the committee substitute (CS).                                                                  
SENATOR  GARY  STEVENS  moved  \G  version  CS  for  SB  193  for                                                               
discussion purposes.                                                                                                            
CHAIR STEDMAN called a brief at ease at 1:35:18 PM.                                                                           
1:37:44 PM                                                                                                                    
CHAIR STEDMAN asked Senator Bunde to comment on the CS.                                                                         
SENATOR CON  BUNDE, Sponsor of  SB 193, explained he  changed the                                                               
title  and  removed  "owned  and  occupied  by  individuals  with                                                               
incomes  at  or below  the  federal  poverty guidelines  for  the                                                               
state". In  Section 1  the requirement of  10 years  occupancy in                                                               
the  home  was  changed  to  eligibility  for  a  permanent  fund                                                               
dividend. That  streamlines the requirement with  current statute                                                               
relating to the  senior and veteran exemptions. Page  1, line 13,                                                               
(C) increases the income requirements  to three times the federal                                                               
poverty  guidelines. That  allows municipalities  more discretion                                                               
in choosing  eligibility guidelines. He  noted that the  last two                                                               
changes were  made at the Chair's  request. Page 2, line  2 deals                                                               
with partial ownership. It requires  that all owners maintain the                                                               
property as  a primary  residence; that they  are eligible  for a                                                               
permanent fund  dividend; and  that the  combined income  is less                                                               
than three times the federal  poverty guideline. Page 2, line 10,                                                               
(b) requires  that all  owners apply annually.  Page 2,  line 18,                                                               
(c) allows  municipalities to  record a lien  on the  property to                                                               
ensure that they would be reimbursed.                                                                                           
CHAIR STEDMAN  asked if he was  comfortable with the bill  in its                                                               
current form.                                                                                                                   
1:39:41 PM                                                                                                                    
SENATOR BUNDE  replied yes. He  then emphasized that the  bill is                                                               
designed as a local option.                                                                                                     
CHAIR STEDMAN  asked if  the reason  for the  bill is  that under                                                               
current statute  communities don't have the  flexibility to offer                                                               
the deferral.                                                                                                                   
SENATOR BUNDE responded if this  were established in statute more                                                               
communities  would  probably  consider  offering  residents  this                                                               
option. He  reiterated that people in  catastrophic circumstances                                                               
shouldn't have  to worry  about losing their  property due  to an                                                               
inability to pay property taxes.                                                                                                
CHAIR STEDMAN asked about anticipated participation.                                                                            
SENATOR BUNDE replied anecdotal  evidence indicates that there is                                                               
considerable interest in the option.                                                                                            
CHAIR  STEDMAN asked  him  to  clarify that  there  isn't an  age                                                               
limit. He then reiterated the requirements listed previously.                                                                   
SENATOR BUNDE said  correct. Some people have  suggested that the                                                               
senior deferral [exemption] be increased,  but that program is an                                                               
unfunded mandate.                                                                                                               
CHAIR STEDMAN opened public testimony.                                                                                          
1:43:05 PM                                                                                                                    
ANDY  HERRINGTON,  Fairbanks,  testified  via  teleconference  to                                                               
state support for SB 193.                                                                                                       
1:44:50 PM                                                                                                                    
STEVE  VAN   SANT,  State   Assessor,  Department   of  Commerce,                                                               
Community  &  Economic  Development  clarified  that  the  senior                                                               
program is an exemption rather  than a deferment. He advised that                                                               
most   assessors  see   this   as  a   useful   tool,  but   some                                                               
municipalities have  expressed concern  that there is  no ability                                                               
to collect interest on the deferred property tax.                                                                               
CHAIR STEDMAN asked about anticipated participation.                                                                            
MR. VAN SANT replied  it's hard to say, but in  the five years he                                                               
was an  assessor in  Anchorage about  a dozen  or so  people came                                                               
forward who would have benefited from this proposal.                                                                            
CHAIR  STEDMAN asked  if this  would impact  the senior  hardship                                                               
MR. VAN SANT  explained that very few  senior hardship exemptions                                                               
are applied  for or granted.  This would offer  municipalities an                                                               
option other than granting an outright exemption.                                                                               
1:49:43 PM                                                                                                                    
SENATOR BUNDE  referenced the concern  Mr. Van Sant  voiced about                                                               
municipalities not  receiving interest on the  deferred taxes and                                                               
said  he   still  views   this  as   a  win-win   situation.  The                                                               
municipality would eventually get its money.                                                                                    
1:51:23 PM                                                                                                                    
MARIE DARLIN, Capital  City Task Force for AARP,  reported that a                                                               
supporting  letter had  been submitted.  She  expressed the  view                                                               
that the \G version CS improves the bill further.                                                                               
1:52:23 PM                                                                                                                    
CHAIR STEDMAN reiterated  there is no tie between SB  193 and the                                                               
current $150,000 senior property tax exemption.                                                                                 
There was no further testimony and he closed the public hearing.                                                                
CHAIR STEDMAN  stated that he  didn't have  a quorum so  he would                                                               
hold SB 193 in committee.                                                                                                       

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