Legislature(1993 - 1994)

01/27/1994 01:00 PM House CRA

Audio Topic
* first hearing in first committee of referral
+ 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                                                               
  COMMITTEE CALENDAR                                                           
  *HB 263:  "An Act relating to municipal property tax                         
             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                                                                
  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                               
  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                                                                   
  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                   
  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."                                                            
  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                   
  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                    
  CHAIRMAN OLBERG adjourned the meeting at 1:45 p.m.                           

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