Legislature(2005 - 2006)BELTZ 211


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
Moved CSSB 193(CRA) Out of Committee
Moved CSSB 291(CRA) Out of Committee
Moved CSSB 247(CRA) Out of Committee
Moved CSSB 246(CRA) Out of Committee
Heard & Held
          SB 193-DEFERRAL OF MUNICIPAL PROPERTY TAXES                                                                       
CHAIR STEDMAN  announced SB  193 to be  up for  consideration. He                                                               
reminded  members   that  the  committee  previously   heard  the                                                               
presentation  on   version  F   committee  substitute   (CS).  He                                                               
highlighted the  following: AS  29.45.030(b) doesn't  provide tax                                                               
assessors  clear direction  to  exempt properties  owned by  non-                                                               
profit religious  organizations that are used  to house educators                                                               
in private  or parochial schools; individual  educators living in                                                               
their own  homes do not  benefit; privately owned  residences are                                                               
not  applicable;  version  F  only  clarifies  existing  statutes                                                               
regarding  the tax  exempt  status of  properties  owned by  non-                                                               
profit religious  organizations; version  F is  appropriate under                                                               
the  original  bill because  it  deals  with the  same  statutory                                                               
He advised  that he would  take public testimony even  though the                                                               
committee had previously heard the bill.                                                                                        
SENATOR THOMAS WAGONER asked for a brief at-ease.                                                                               
2:13:55 PM                                                                                                                    
SHANE  HORAN, Assessor  for the  Kenai Peninsula  Borough, stated                                                               
that version F CS for SB  193 would establish an unfunded mandate                                                               
that  could  cause  the  borough  to lose  between  $20  and  $30                                                               
thousand in revenue.  The potential loss would be  greater if the                                                               
various  service areas  were considered.  He  expressed the  view                                                               
that the  language is  broad and might  not exclude  coaches, for                                                               
example, who are oftentimes looked  upon as educators. He further                                                               
questioned  whether  volunteer   teachers,  substitute  teachers,                                                               
part-time  or seasonal  teachers might  be included.  He said  he                                                               
assumed that Sunday  school teachers would be  excluded. He asked                                                               
the committee  to keep  in mind that  most educators  in private,                                                               
religious  or   parochial  schools  are  compensated   for  their                                                               
services. Finally, he  said, this would be  an additional program                                                               
that would require administering and monitoring.                                                                                
SENATOR THOMAS  WAGONER said  this is permissive  so it  isn't an                                                               
unfunded mandate.                                                                                                               
CHAIR  STEDMAN clarified  that just  one section  of the  bill is                                                               
discretionary  and  that  is the  original  section  that  allows                                                               
certain  citizens to  apply to  a municipality  for property  tax                                                               
deferral.  The other  section is  new and  it cleans  up language                                                               
dealing with non-profit religious organizations.                                                                                
2:16:48 PM                                                                                                                    
CLYDE BAXLEY, Anchorage resident,  stated opposition to version F                                                               
committee substitute (CS) for SB 193  describing it as a huge tax                                                               
giveaway to the Anchorage Baptist  Temple. He urged the committee                                                               
to return  to the original  bill as sponsored by  Senators Bunde,                                                               
Dyson and Ellis  because the CS opens the  floodgates to lawsuits                                                               
for  discrimination against  public  schoolteachers  in favor  of                                                               
private schoolteachers.                                                                                                         
MR. BAXLEY  asserted that the  legislation would  violate Article                                                               
1, Section  15 of  the Alaska State  Constitution because  it's a                                                               
special  bill for  special  people. It  also  violates Article  2                                                               
Section 9 and Article 1, Section 1.  This is a special act and it                                                               
only favors teachers working for religious organizations.                                                                       
Taxpayers around the  state are looking for ways  to reduce their                                                               
property  taxes  and  this  bill  does  the  opposite,  he  said.                                                               
Furthermore the proposed definition  of "minister" is designed to                                                               
expand  the list  of  titles  conferred on  members  of a  church                                                               
organization for the  purpose of qualifying properties  for a tax                                                               
exemption. No  state criterion  governs how  a church  titles its                                                               
members  so title  decisions  are left  to  the principle  church                                                               
leader. That, he said, is  a flimsy basis for determining whether                                                               
or not a church property qualifies for tax-exempt status.                                                                       
He  suggested that  if the  committee really  wants to  quiet the                                                               
complaints from  taxpayers then  it should  amend the  statute to                                                               
make it clear  that no church shall be entitled  to more than one                                                               
tax-exempt  residence  that is  occupied  by  one church  leader.                                                               
Doing so would  satisfy the Alaska State Constitution  and put to                                                               
rest the  squabbles that  have plagued  Anchorage for  last three                                                               
MR. BAXLEY urged the committee  to return to the original version                                                               
of SB 193.                                                                                                                      
CHAIR STEDMAN  reiterated that the CS  clarified existing statute                                                               
and it fits under the original version of the bill title.                                                                       
2:22:45 PM                                                                                                                    
AL SUNQUIST, Anchorage,  spoke in opposition to version  F CS for                                                               
SB 193. He  said that he's aware that many  church properties are                                                               
in violation of  existing laws according to the  tax assessor and                                                               
he supports efforts to crack down  on what he refers to as "black                                                               
collar crimes."  He stated  that the  issue before  the committee                                                               
represents  an entanglement  of church  and state  and should  be                                                               
2:24:42 PM                                                                                                                    
ART GRISWOLD, Delta Junction, testified  in opposition to version                                                               
F CS  for SB 193.  He acknowledged that the  area did not  have a                                                               
property tax  yet, but that it  was a possibility. He  noted that                                                               
the  state  doesn't  currently fund  tax  exemptions  for  senior                                                               
citizens or disabled veterans in  the organized boroughs and this                                                               
bill represents an additional exemption.  He reported that in his                                                               
area  there are  three major  church farms  with huge  homes that                                                               
will be completely  exempt from taxes if the area  is forced into                                                               
a  borough.  He  said  he  would like  to  see  legislation  that                                                               
clarifies that  religious organizations receive tax  exemption on                                                               
just one building where services are held.                                                                                      
CHAIR STEDMAN asked  that the record reflect  that Delta Junction                                                               
does not pay property tax.                                                                                                      
2:27:01 PM                                                                                                                    
MARTY  McGEE,   Assessor  for  the  Municipality   of  Anchorage,                                                               
provided the following facts:  Anchorage Baptist Temple currently                                                               
owns 24 pieces  of property; 20 of the  properties are residences                                                               
of some  kind; 10 of the  residences are currently tax  exempt; 6                                                               
of the residences  will soon move to taxable  status leaving just                                                               
4 residences in exempt status.                                                                                                  
If  this  bill  moves  forward  in  its  current  form  it  would                                                               
represent about  $80,000 of  tax revenue  that would  be exempted                                                               
from income. He  emphasized that whenever a property  is moved to                                                               
exempt status, it's  the remaining taxpayers who have  to make up                                                               
the lost  revenue. With that  in mind, he said,  the Municipality                                                               
of Anchorage does not support version F CS for SB 193.                                                                          
2:28:46 PM                                                                                                                    
SENATOR WAGONER  asked if  there are  other parochial  schools in                                                               
MR. McGEE replied there are  about 10 parochial schools, but only                                                               
Anchorage Baptist Temple  has an exempt status  issue with regard                                                               
to  housing for  teachers. "No  other  teachers of  any kind,  in                                                               
Anchorage, have any exempt status on homes," he said.                                                                           
SENATOR  WAGONER asked  if the  other parochial  schools own  any                                                               
MR.  McGEE  replied he  couldn't  answer  directly. The  Catholic                                                               
Church owns  a number of  homes in  Anchorage and he  thought all                                                               
were  residences  of ministers  or  church  officials. He  didn't                                                               
believe  that any  of those  individuals are  educators, but  his                                                               
investigation of all religious exempt property is ongoing.                                                                      
2:30:33 PM                                                                                                                    
STEVE VAN  SANT, State Assessor, Division  of Community Advocacy,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  said  he would  like  to  make several  clarifications.                                                               
First  the  bill  really doesn't  clarify  anything  because  the                                                               
Alaska  Supreme Court  has  said that  educator's  homes are  not                                                               
exempt under statute. As currently  written the bill would expand                                                               
the statutes to include residences  of educators, but the meaning                                                               
of that particular term is somewhat unclear, he said.                                                                           
He advised  that he has  been polling assessors across  the state                                                               
to get  an idea of  what this  unfunded mandate might  cost other                                                               
taxpayers and he believes it would be about $200,000 statewide.                                                                 
2:32:10 PM                                                                                                                    
SENATOR GARY STEVENS  referenced the section on  tax deferral for                                                               
primary  residences  on page  2,  line  24  and asked  whether  a                                                               
surviving spouse would immediately  be responsible for paying the                                                               
deferred property taxes.                                                                                                        
MR.  VAN SANT  responded it's  his understanding  that under  the                                                               
existing language the  surviving spouse wouldn't have  to pay the                                                               
deferred taxes. Subparagraph (C) on line 24 speaks to combined-                                                                 
income. If one  spouse were to pass away the  survivor would then                                                               
fall under subparagraph  (C) on line 16, which  relates to income                                                               
that is less than three times the federal poverty level.                                                                        
2:33:42 PM                                                                                                                    
SENATOR ELLIS participated via  teleconference from Anchorage. He                                                               
said he would like to hear  Mr. Ritchie with the Alaska Municipal                                                               
League (AML) comment on version F committee substitute.                                                                         
2:34:16 PM                                                                                                                    
KEVIN  RITCHIE,  Executive  Director  for  the  Alaska  Municipal                                                               
League  (AML),  thanked  the  committee   and  Senator  Ellis  in                                                               
particular  for  asking  for an  additional  hearing  to  provide                                                               
opportunity  for the  assessors to  report on  the impacts.  As a                                                               
policy, he said, AML is  against anything that would take revenue                                                               
away from  communities. He  noted that  the committee  heard from                                                               
assessors around the state today and he couldn't add to that.                                                                   
2:35:02 PM                                                                                                                    
CHAIR STEDMAN asked for a motion.                                                                                               
SENATOR ELLIS stated that the  testimony has been completely one-                                                               
sided  in   opposition  to  version   F  and  he  has   heard  no                                                               
justification in  favor of  the most  recent change.  He reported                                                               
that he  had spoken  to Tam  Cook about  the rules  governing his                                                               
participation via teleconference and that  she advised that he is                                                               
allowed  full participation  with the  exception that  he is  not                                                               
allowed to vote on a motion to move a bill from committee.                                                                      
SENATOR ELLIS moved to return to the original version of SB 193.                                                                
At-ease from 2:35:40 PM to 2:36:05 PM.                                                                                      
CHAIR  STEDMAN   acknowledged  that  he  hadn't   run  into  this                                                               
situation  before and  asked  Senator Ellis  if  his staff  could                                                               
present any verifying information from Tam Cook.                                                                                
SENATOR ELLIS  replied he spoke  with Ms. Cook very  recently and                                                               
she advised that  he is allowed to participate,  to make motions,                                                               
and to vote  telephonically. He is allowed to object  to a motion                                                               
to move a bill  from committee, but he is not  allowed to vote on                                                               
moving the bill.                                                                                                                
2:37:19 PM                                                                                                                    
CHAIR STEDMAN asked Senator Ellis to repeat his motion.                                                                         
SENATOR ELLIS  motioned for the  committee to return from  the CS                                                               
to the original version of SB 193.                                                                                              
CHAIR STEDMAN objected and asked for a roll call vote.                                                                          
SENATOR  ELLIS reiterated  that justification  is lacking  in the                                                               
public  record   and  the  testimony   in  opposition   has  been                                                               
overwhelming. Senator  Bunde had  a great idea,  he said,  and he                                                               
and Senator Dyson  signed on as co-sponsors.  Public testimony is                                                               
on my side of the argument, he concluded.                                                                                       
The motion  to return to  the original  version of SB  193 failed                                                               
with Senator  Kookesh and  Senator Ellis  voting yea  and Senator                                                               
Gary Stevens, Senator Wagoner and Chair Stedman voting nay.                                                                     
CHAIR STEDMAN called an at-ease from 2:38:41 PM to 2:39:15 PM.                                                              
2:39:28 PM                                                                                                                    
MERYL THOMPSON, Wasilla, testified that  in its original form the                                                               
bill was  good, but that he  is totally against version  F CS for                                                               
SB 193. This  is an attempt to give the  Anchorage Baptist Temple                                                               
a tax  break and it's  a slippery slope and  a can of  worms that                                                               
you're opening  up. He could find  no support for the  bill other                                                               
than  a  Baptist  Temple  official  and  some  of  the  committee                                                               
members. He said he would imagine  that if this received a proper                                                               
public hearing you would hear  overwhelming opposition because it                                                               
simply isn't right or fair.                                                                                                     
2:41:20 PM                                                                                                                    
MARIE DARLIN,  Capital City Task  Force for AARP,  announced that                                                               
AARP did not  support Section 1 of  version F CS for  SB 193, but                                                               
it did  support the original  version. The issue of  property tax                                                               
deferral  needs  to be  addressed  and  AARP appreciates  Senator                                                               
Bunde's leadership in this area.                                                                                                
2:44:08 PM                                                                                                                    
SENATOR  WAGONER  commented that  this  is  the second  or  third                                                               
hearing on  the bill so  he didn't  agree that there  hadn't been                                                               
proper public  hearings. He acknowledged  that the  testimony had                                                               
been negative and he was  surprised that people who supported the                                                               
amendment hadn't come forward to  testify. He noted that the next                                                               
committee of referral is the  Finance Committee and Senator Bunde                                                               
could deal with it there.                                                                                                       
2:45:07 PM                                                                                                                    
SENATOR KOOKESH  clarified that no  action was taken on  the bill                                                               
at the last  meeting because people testifying from  the LIOs and                                                               
from off  net didn't  have a copy  of the CS.  There had  been no                                                               
public hearing on  the new CS, but there was  plenty of testimony                                                               
on the original version.                                                                                                        
CHAIR STEDMAN  agreed with Senator Kookesh's  statement, but that                                                               
the hearing today  was thorough and under no  time constraint. He                                                               
asked for a motion.                                                                                                             
2:45:40 PM                                                                                                                    
SENATOR GARY STEVENS  motioned to report version F CS  for SB 193                                                               
and  attached  fiscal  note(s)  from  committee  with  individual                                                               
SENATOR KOOKESH objected.                                                                                                       
SENATOR ELLIS voiced  objection and advised that he  had tried to                                                               
keep  an  open mind  and  had  been  looking forward  to  someone                                                               
stepping  forward to  justify the  current  changes. That  didn't                                                               
happen, which made him uncomfortable  moving the bill forward. He                                                               
announced that  he would remove his  name as a co-sponsor  if the                                                               
bill continued in its current form.                                                                                             
CHAIR STEDMAN said he appreciated his position.                                                                                 
SENATOR ELLIS said he would  restate his previous comment that if                                                               
this  had  been  the  intent  of  the  majority  members  on  the                                                               
committee then it would have  been more respectful and proper for                                                               
the  CRA Committee  to  introduce a  committee  bill rather  than                                                               
taking Senator Bunde's bill.                                                                                                    
2:47:14 PM                                                                                                                    
SENATOR  WAGONER  acknowledged  that  it would  be  a  burden  to                                                               
Anchorage  taxpayers to  make additional  properties tax  exempt,                                                               
but he takes a different  view because the parochial schools save                                                               
municipalities and  cities in terms of  educational expenditures.                                                               
At  last  estimate  Kenai  had  between  600  and  800  parochial                                                               
students  and  that  is  a  tremendous  burden  lifted  from  the                                                               
taxpayer, he said.                                                                                                              
CHAIR STEDMAN restated  the point that the changes in  the CS fit                                                               
under the same section of the statutes.                                                                                         
CHAIR STEDMAN asked the clerk to call the roll.                                                                                 
CSSB  193(CRA), version  F, moved  from  committee with  Senators                                                               
Wagoner, Gary Stevens,  and Chair Stedman voting  yea and Senator                                                               
Kookesh voting nay.                                                                                                             

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