Legislature(2005 - 2006)BELTZ 211
03/06/2006 01:30 PM COMMUNITY & REGIONAL AFFAIRS
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* first hearing in first committee of referral
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SB 193-DEFERRAL OF MUNICIPAL PROPERTY TAXES CHAIR BERT STEDMAN announced SB 193 to be up for consideration. He asked for a motion to adopt the \F Version committee substitute (CS). SENATOR GARY STEVENS moved \F Version CS for SB 193. CHAIR STEDMAN objected for explanation purposes. He asked the sponsor, Senator Bunde, to come forward. 1:34:16 PM SENATOR CON BUNDE, Sponsor of SB 193, registered objection to the \F Version CS. He stated that the original bill focused on deferral of property taxes for people who were having financial emergencies. Version F provides an expansion that neither he nor the co-sponsors expected. Certainly the added subject is worthy of a separate bill, he said, but in his view the changes don't fall within the purview of SB 193 as originally conceived. CHAIR STEDMAN clarified that the amendment excludes the residences of an educator in a private religious or parochial school from paying property tax when the organization owns the property. SENATOR JOHNNY ELLIS asked whose idea it was to change the bill contrary to the sponsor's wishes. CHAIR STEDMAN replied he brought the amendment to the committee. SENATOR ELLIS asked if he had discussed the change with the sponsor. CHAIR STEDMAN responded he had discussed the change and the sponsor expressed his dissatisfaction. SENATOR ELLIS stated that the committee could introduce a bill to accomplish the goal of the CS and doing so would avoid the current awkward conflict among majority members. SENATOR BUNDE responded it's within the committee's purview to change bills and he took no personal umbrage. However, he didn't believe the change falls within the scope of the original bill and suggested it could inhibit passage. SENATOR STEDMAN noted that the next committee of referral was the Finance Committee. SENATOR BUNDE commented the bill has a way to go and bills have a way of changing during the process. SENATOR ELLIS asked about the fiscal note. CHAIR STEDMAN replied the fiscal note is zero because the fiscal impact would be at the municipal level. SENATOR BUNDE pointed out that the original bill was a local option and the religious exemption is mandatory in the \F Version. 1:38:58 PM MARTY McGEE, Assessor for the Municipality of Anchorage, reported that he hadn't seen the amendments so he couldn't comment on them. His concern with the original bill relates to the potential cost to other taxpayers. He suggested the bill should address the issue of unrealized interest on the deferred taxes because the impact could be very different in the various taxing jurisdictions. SENATOR THOMAS WAGONER noted that the bill is a local option and judging from the previous testimony, he'd assume that the Municipality of Anchorage wouldn't adopt the ordinance. MR. McGEE said the assembly would make that decision, but it would also have to address the problems associated with the current version. SENATOR ELLIS asked if the CRA staff could fax Mr. McGee a copy of the CS. CHAIR STEDMAN responded a copy should be available in the Anchorage LIO, but he would call on Mr. McGee again at the end of the public testimony to get his comments on the CS. 1:41:28 PM SCOTT BRANDT-ERICHSEN, Ketchikan Gateway Borough Attorney, said his comments related to the work he does as the borough attorney, which is to collect real property tax for the borough and the City of Ketchikan on an annual basis. Although he hadn't seen a copy of the CS, his comments would probably apply to both. Points that need clarification include: how the tax liens would be recorded to protect the municipality; whether a surviving spouse would immediately be subject to tax repayment; and whether all back taxes would be due if an individual no longer qualified for the deferral. CHAIR STEDMAN advised that the bill had two previous public hearings and the next referral is to the Finance Committee. 1:45:58 PM KARL SHORT, Finance Director of the Kodiak Island Borough, testified that his conflict with the bill is that if a homeowners financial situation changes, the deferred tax still isn't collectable until the property is sold. He suggested that it would be reasonable to have some sort of trigger for a repayment schedule if the person is no longer in financial difficulty. He agreed with previous testimony regarding the tax lien so it's clear that taxes are outstanding against the property. 1:46:44 PM SENATOR STEDMAN removed his objection to adopting the F Version CS for SB 193. SENATOR ELLIS objected. CHAIR STEDMAN asked the clerk to call the roll. Version F CS for SB 193 was adopted with Senator Gary Stevens, Senator Wagoner and Chair Stedman voting yea and Senator Ellis and Senator Kookesh voting nay. CHAIR STEDMAN asked for a motion to move the bill from committee. 1:47:50 PM SENATOR GARY STEVENS motioned to report CSSB 193(CRA) and attached fiscal notes from committee with individual recommendations. 1:48:04 PM SENATOR ELLIS objected and asked the Chair whether he though the committee substitute had gotten an adequate hearing. He wasn't clear about what happened, but this big change came as quite a surprise and it isn't even in alignment with the sponsor. In conclusion he said this is an amazing way to conduct business. CHAIR STEDMAN responded he could understand his concern, but the bill had been heard three times. The committee was backed up in its work and he was finding it difficult to get a quorum for meetings. He recognized that this is a change, but the bill would have further hearing at the Finance Committee. SENATOR ELLIS responded there are lots of important things happening in the building. CHAIR STEDMAN asked if there was objection to the motion to move the bill. SENATOR ELLIS maintained his objection and continued to say: I don't think the Community and Regional Affairs Committee has done an adequate job or done its job on your latest version of the bill. If you're representing to us that what the CRA Committee should have done will happen in the Finance Committee, I hope that's the case, but this committee ought to do its job is my opinion. SENATOR ELLIS added that he would hope that the Alaska Municipal League could comment on the new version. 1:49:52 PM CHAIR STEDMAN called on Mr. McGee from Anchorage. MR. McGEE said the Legislative Affairs Office (LIO) in Anchorage hadn't received a copy of the new version. At ease at 1:50:18 PM CHAIR STEDMAN announced he would hold SB 193 in committee until the following meeting. SENATOR ELLIS asked the Chair to find out why the Anchorage LIO didn't receive a copy of the proposed CS. CHAIR STEDMAN agreed to do so.