Legislature(1993 - 1994)
01/27/1994 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
January 27, 1994
1:00 p.m.
MEMBERS PRESENT
Representative Harley Olberg, Chairman
Representative Jerry Sanders, Vice-Chair
Representative Con Bunde
Representative John Davies
Representative Cynthia Toohey
Representative Ed Willis
Representative Bill Williams
MEMBERS ABSENT
none
COMMITTEE CALENDAR
*HB 263: "An Act relating to municipal property tax
exemptions."
MOVED OUT OF COMMITTEE
WITNESS REGISTER
REPRESENTATIVE MARK HANLEY
Alaska State Legislature
State Capitol Building, Room 515
Juneau, AK 99801-1182
Phone: 465-4939
Position Statement: Prime Sponsor of SSHB 263
JERRY ANDERSON, Chief Fiscal Officer
Municipality of Anchorage
632 W. 6th Street
Anchorage, AK 99501
Phone: 343-6610
Position Statement: Supported SSHB 263
BOB STANBURY
Alaska Airmen Association
AAC Aviation Complex
2811 Merrill Field Drive
Anchorage, AK 99501
Phone: 272-1251
Position Statement: Supported SSHB 263
PREVIOUS ACTION
BILL: HB 263
SHORT TITLE: TAX EXEMPTION FOR CERTAIN PERSONAL PROP.
SPONSOR(S): REPRESENTATIVE(S) HANLEY,Green,B.Davis,Bunde
JRN-DATE JRN-PG ACTION
03/29/93 825 (H) READ THE FIRST TIME/REFERRAL(S)
03/29/93 825 (H) COMMUNITY & REGIONAL AFFAIRS
04/02/93 960 (H) COSPONSOR(S): GREEN
04/12/93 1164 (H) COSPONSOR(S): B.DAVIS
04/20/93 (H) CRA AT 01:30 PM CAPITOL 124
04/20/93 1388 (H) COSPONSOR(S): BUNDE
01/10/94 2006 (H) SPONSOR SUBSTITUTE
INTRODUCED-REFERRALS
01/27/94 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 94-3, SIDE A
Number 001
CHAIRMAN HARLEY OLBERG called the meeting to order at 1:08
p.m. He noted for the record Representatives Willis,
Williams, Sanders, Bunde and Davies were present and noted
that a quorum was present.
Number 024
REPRESENTATIVE MARK HANLEY, PRIME SPONSOR OF SSHB 263,
testified saying, "It amends Title 29, to allow
municipalities to exempt or partially exempt aircraft,
undocumented boats and vessels, pickup campers, and
motorized vehicles such as all terrain vehicles or
motorcycles. It gives them the flexibility to do that, they
don't have to. It has no fiscal impact on the state. I
might give you a brief example of what generated this
support in Anchorage for this anyway is: If you own an
airplane, $50,000 assessment, you're taxed as personal
property, just as a house. And they probably pay around
$1,000 a year, for that aircraft. If you owned a $50,000
condo, you would also pay the same $1,000. There's no real
differentiation. However, if you own a $50,000 motor home,
or even $100,000 motor home that drives around, because we
have motor vehicle laws in this state where the
municipalities piggy-back onto the registration fees, based
on how old the vehicle is, that person would pay about $70 a
year for the first five years of its life and then after
that it drops down to $40 or something like that. Just like
your car. So people using similar assets, I guess you'd
say, for similar purposes, motor home, airplanes, same
values, incredible difference in what they're taxed. The
municipality was interested in the ability to have some
flexibility for that. If you look at the bill itself, the
first change that's made (is) where it says 'They may
classify' on page two as the type and exempt or partially
exempt any or all types of aircrafts from taxation. So that
gives them the flexibility, it doesn't mean they have to.
If you look at the beginning of the section, 'Municipality
made by ordinance' so it has to be an ordinance that's
passed. The assembly, the locally elected bodies from that
area, have to debate it, and put it out for public review
and they decide whether they want to do this or not. But
they would have the option, in Anchorage for example, what
they had proposed doing was a $75 a year single engine
aircraft tax and $125 for twin engine aircraft. Just a
straight fee. Their legal opinion came back from their
legal department that they could not do that, because the
statute does not allow them. Basically they can either
exempt all property...or no property..."
Number 114
REPRESENTATIVE CON BUNDE said, "This bill, as I understand
it would move it out of the category of personal property
and into vehicle and wouldn't impede registering snow
machines as a vehicle, it would encourage it."
REPRESENTATIVE HANLEY replied, "This doesn't actually move
it out; and again, this gives the municipalities the
flexibility to determine how they will tax something. And
they can distinguish between single and twin engine aircraft
because it classifies as to type. So that it gives them the
flexibility. It doesn't mean they're going to. It doesn't
really have an effect on whether you're going to require
licenses for snow machines."
REPRESENTATIVE BUNDE continued, "But it wouldn't prevent
municipalities from them getting involved in vehicle
registration for snow machines."
REPRESENTATIVE HANLEY said, "No, that's a separate issue."
Number 136
REPRESENTATIVE JOHN DAVIES said, "I basically don't see
anything wrong with this bill... but why is it that
municipalities can't do this now."
REPRESENTATIVE HANLEY said, "I don't know, to be honest with
you," and then, "It's clear they can and if you read this
(Title 29), this specifically sets out in statute what
they're allowed to exempt and what they aren't. Because
they aren't listed under some of these already, you can
classify boats and vessels, based on their net tonnage,
that's already in statute, and you can exempt from taxation
nonprofit organizations and things like that, historic sites
and land. You can exempt personal property from
taxation...you can exempt all of it or you can have the
personal property taxed, but it doesn't give them the
ability and I don't know the history behind why they didn't
allow for the flexibility before."
REPRESENTATIVE DAVIES continued, "Could you explain to me
why, what the reason for specifying nondocumented...and
amplify a little bit more issue of unlicensed vehicles...
My concern there is why would you specify..."
REPRESENTATIVE HANLEY said, "I believe unlicensed, motorized
vehicles generally can be taxed...have to be totally, you
can't just put a $15 fee on them, which is probably what
they'd like to do. Right now they've got to go determine
the value and apply the mill rate to that because they're
not exempted..." He continued, "They can already tax
documented vessels..."
REPRESENTATIVE CYNTHIA TOOHEY joined the committee at 1:17
p.m.
Number 211
REPRESENTATIVE JERRY SANDERS asked, "We're not cutting any
taxes with this, we're just turning this over to the
municipalities discretion."
REPRESENTATIVE HANLEY said, "We give them more flexibility
to distinguish the types... We are not mandating anything,
requiring anything...we're only giving them the tools to be
able to utilize."
JERRY ANDERSON, CHIEF FISCAL OFFICER, MUNICIPALITY OF
ANCHORAGE, testified via teleconference, in favor of SSHB
263, saying, "The Anchorage Assembly passed a resolution
that was sponsored by the mayor in 1993, asking for these
tax exemptions. I believe there were about 200 people
present at public hearings and I don't remember anybody
testifying against optional exemptions. On this particular
issue, both the assembly and the mayor uniformly support it.
We had hoped that this would pass last year. Now we're
hoping it will pass this year..." He then spoke to the lack
of "uniformity" in municipal taxes throughout the state.
REPRESENTATIVE DAVIES asked, "Did you say that the Fairbanks
North Star Borough exempts aircraft?"
MR. ANDERSON replied, "Yes sir," and cited his reference,
Alaska Taxable 1992, published by the Department of
Community and Regional Affairs, page 20.
REPRESENTATIVE DAVIES continued, "Why is it...that we need
to have this bill? Why can't the Municipality of Anchorage
just go ahead and exempt aircraft if they want to since it
seems that the Fairbanks North Star Borough is presently
doing that?"
MR. ANDERSON said, "It's my understanding you could exempt
all personal property, but you can't pick and choose. The
current law says you can exempt personal property from
taxation. You can exempt business inventory, and then
classify as to type, and exempt or partially exempt any or
all types of motor vehicles from taxation, so our reading
here is that we don't have the authority to do what we want
to do, and that's why we're asking the state to change the
statute."
Number 318
BOB STANBURY, ALASKA AIRMEN ASSOCIATION, testified via
teleconference, saying, "We are in support of this bill
because we believe the current taxing structure as
implemented in Anchorage is driving aviation out of
Anchorage and out of the state... So what we're trying to
do is get something that is more equitable where airplanes
are taxed at the same rate perhaps as motorhomes or
something along those lines.
REPRESENTATIVE BUNDE moved that SSHB 263 be moved out of
committee with individual recommendations. There were no
objections.
CHAIRMAN OLBERG adjourned the meeting at 1:45 p.m.
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