05/05/2006 09:00 AM Senate FINANCE

6:11:37 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 334(FIN)                                                                                             
     "An Act relating to an exemption from and deferral of                                                                      
     municipal property taxes for certain types of deteriorated                                                                 
     property."                                                                                                                 
                                                                                                                                
                                                                                                                                
AT EASE 6:11:51 PM / 6:12:12 PM                                                                                             
                                                                                                                                
AT EASE 6:13:17 PM / 6:13:38 PM                                                                                             
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Green moved for adoption  of SCS CS HB 334, 24-LS1353\Y,                                                               
as a working  document and objected to receive  an explanation of                                                               
the bill and proposed changes.                                                                                                  
                                                                                                                                
6:13:56 PM                                                                                                                    
                                                                                                                                
Senator  Bunde  thanked  the  Committee   for  including  in  the                                                               
proposed  legislation  a  provision  that  would  allow  a  local                                                               
government  to defer  the property  tax obligations  of a  person                                                               
experiencing "catastrophic  hard times"  until they were  able to                                                               
make  payment  or  sell  the   property.  He  had  developed  the                                                               
provision in a  different bill, and appreciated  its inclusion in                                                               
this legislation.                                                                                                               
                                                                                                                                
6:15:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAY  RAMRAS, sponsor  of the bill,  testified that                                                               
the  bill  would  assist  developers  and  local  governments  in                                                               
refurbishing deteriorated  properties by revising  and clarifying                                                               
existing  tax  deferral  language.  It would  allow  a  municipal                                                               
government to enter in to an  agreement with a developer to defer                                                               
property  taxes  until  a specified  time,  thus  binding  future                                                               
assemblies or councils to the terms of the agreement.                                                                           
                                                                                                                                
Representative Ramras excused himself for a prior commitment.                                                                   
                                                                                                                                
6:18:24 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken noted  for  the record  that  he'd had  concerns                                                               
about  the bill's  affect on  the  "chain of  ownership". He  had                                                               
discussed the  issue with  the bill's  sponsor, and  his concerns                                                               
had been alleviated.                                                                                                            
                                                                                                                                
6:18:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green remarked  that  the provisions  of  the bill  are                                                               
"permissive language",  which allow the  tax deferral but  do not                                                               
require it.                                                                                                                     
                                                                                                                                
6:19:01 PM                                                                                                                    
                                                                                                                                
Senator Olson asked the sponsor's  opinion of the changes made by                                                               
Senator Bunde's amendment.                                                                                                      
                                                                                                                                
6:19:11 PM                                                                                                                    
                                                                                                                                
JIM  POUND,  Staff to  Representative  Ramras,  replied that  the                                                               
amendment had no affect on the  existing language of the bill; it                                                               
simply added additional permissive  language. The sponsor favored                                                               
the amendment.                                                                                                                  
                                                                                                                                
Co-Chair  Green removed  her  objection to  the  adoption of  the                                                               
committee substitute.                                                                                                           
                                                                                                                                
Without  further  objection, SCS  CS  HB  334, Version  "Y",  was                                                               
ADOPTED as a working document.                                                                                                  
                                                                                                                                
6:19:57 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
Amendment #1: This amendment inserts a new bill section to read                                                                 
as follows.                                                                                                                     
                                                                                                                                
     Section 1. AS 27.45.030(b) is amended to read:                                                                             
          (b) In (a) of this section, "property used exclusively                                                                
     for  religious  purposes"  includes the  following  property                                                               
     owned by a religious organization:                                                                                         
               (1) the residence of an educator in a private                                                                  
     religious or  parochial school or a  bishop, pastor, priest,                                                             
     rabbi,  minister,   or  religious  order  of   a  recognized                                                               
     religious  organization;  for  purposes of  this  paragraph,                                                             
     "minister" means an individual who is                                                                                    
                    (A) ordained, commissioned, or licensed as a                                                              
          minister                                                                                                            
                    (B) employed by the religious organization                                                                
          to   carry   out   a   ministry   of   that   religious                                                             
          organization;                                                                                                       
               (2) a structure, its furniture, and its fixtures                                                                 
     used  solely   for  public  worship,   charitable  purposes,                                                               
     religious administrative offices,  religious education, or a                                                               
     nonprofit hospital;                                                                                                        
               (3) lots required by local ordinance for parking                                                                 
     near a structure defined in (2) of this subsection.                                                                        
                                                                                                                                
                    New Text Underlined                                                                                       
                                                                                                                                
Co-Chair Green offered a motion to adopt the amendment and                                                                      
objected to provide an explanation.                                                                                             
                                                                                                                                
Co-Chair Green read the language of the changes into the record                                                                 
and stated this would further clarify statute.                                                                                  
                                                                                                                                
Co-Chair Green removed her objection.                                                                                           
                                                                                                                                
6:20:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken asked the impact of this provision to the                                                                       
Fairbanks local governments.                                                                                                    
                                                                                                                                
6:20:44 PM                                                                                                                    
                                                                                                                                
Mr. Pound responded that it would have no effect in Fairbanks;                                                                  
the provision is primarily intended to address issues with the                                                                  
Municipality of Anchorage.                                                                                                      
                                                                                                                                
6:20:59 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken commented  that  the  language was  particularly                                                               
broad.                                                                                                                          
                                                                                                                                
6:22:52 PM                                                                                                                    
                                                                                                                                
Co-Chair Green remarked the changes  were intended to clarify the                                                               
definition of "minister".                                                                                                       
                                                                                                                                
6:23:08 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken exampled  a teacher  who taught  in a  religious                                                               
school, but was not a "minister".  He asked if that teacher would                                                               
receive tax exemption.                                                                                                          
                                                                                                                                
Co-Chair Green clarified that only  the property of the religious                                                               
organization was eligible.                                                                                                      
                                                                                                                                
Co-Chair  Wilken then  asked if  a house  owned by  the religious                                                               
organization but occupied by the teacher would qualify.                                                                         
                                                                                                                                
Co-Chair Green affirmed.                                                                                                        
                                                                                                                                
6:24:15 PM                                                                                                                    
                                                                                                                                
There was no  further objection to the adoption  of the amendment                                                               
and it was ADOPTED.                                                                                                             
                                                                                                                                
6:24:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilken  offered a motion  to report  SCS CS HB  334, 24-                                                               
LS1353\Y,  from  Committee  with individual  recommendations  and                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Without objection, SCS  CS HB 334 (FIN) was  MOVED from Committee                                                               
with zero fiscal note #1 from  the Office of the Governor, Office                                                               
of  Management  and Budget,  for  all  State agencies,  and  zero                                                               
fiscal note  #2 from  the Department  of Commerce,  Community and                                                               
Economic Development.