Legislature(2023 - 2024)BARNES 124
04/13/2023 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Department of Corrections | |
| HB70 | |
| HB134 | |
| SB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 70 | TELECONFERENCED | |
| *+ | HB 134 | TELECONFERENCED | |
| + | SB 77 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 13, 2023
8:02 a.m.
MEMBERS PRESENT
Representative CJ McCormick, Chair
Representative Kevin McCabe, Vice Chair
Representative Tom McKay
Representative Josiah Patkotak
Representative Justin Ruffridge
Representative Rebecca Himschoot
Representative Donna Mears
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION(S): DEPARTMENT OF CORRECTIONS
- HEARD
HOUSE BILL NO. 70
"An Act relating to property exempt from municipal taxation."
- HEARD & HELD
HOUSE BILL NO. 134
"An Act prohibiting municipalities from levying a tax on the
transfer of real property; prohibiting the state from levying a
tax on the transfer of real property; and relating to municipal
taxation of mobile telecommunications services."
- HEARD & HELD
CS FOR SENATE BILL NO. 77(CRA) AM
"An Act relating to municipal property tax; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 70
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTIONS
SPONSOR(s): REPRESENTATIVE(s) TOMASZEWSKI
02/13/23 (H) READ THE FIRST TIME - REFERRALS
02/13/23 (H) CRA
04/06/23 (H) CRA AT 8:00 AM BARNES 124
04/06/23 (H) Heard & Held
04/06/23 (H) MINUTE(CRA)
04/13/23 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 134
SHORT TITLE: PROPERTY TRANSFER TAX; MUNI TELECOMM TAX
SPONSOR(s): REPRESENTATIVE(s) COULOMBE
03/27/23 (H) READ THE FIRST TIME - REFERRALS
03/27/23 (H) CRA
04/13/23 (H) CRA AT 8:00 AM BARNES 124
BILL: SB 77
SHORT TITLE: MUNI PROP TAX EXEMPTION/TAX BLIGHTED PROP
SPONSOR(s): SENATOR(s) DUNBAR
02/22/23 (S) READ THE FIRST TIME - REFERRALS
02/22/23 (S) CRA
03/16/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
03/16/23 (S) Heard & Held
03/16/23 (S) MINUTE(CRA)
03/23/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
03/23/23 (S) -- MEETING CANCELED --
03/28/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
03/28/23 (S) Moved CSSB 77(CRA) Out of Committee
03/28/23 (S) MINUTE(CRA)
03/29/23 (S) CRA RPT CS 5DP SAME TITLE
03/29/23 (S) DP: DUNBAR, GRAY-JACKSON, OLSON,
GIESSEL, BJORKMAN
04/11/23 (S) TRANSMITTED TO (H)
04/11/23 (S) VERSION: CSSB 77(CRA) AM
04/12/23 (H) READ THE FIRST TIME - REFERRALS
04/12/23 (H) CRA, FIN
04/13/23 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
JENNIFER WINKELMAN, Commissioner
Department of Corrections
Anchorage, Alaska
POSITION STATEMENT: Co-presented the PowerPoint on the
Department of Corrections.
JAKE WYCKOFF, Deputy Commissioner
Department of Corrections
Juneau, Alaska
POSITION STATEMENT: Co-presented the PowerPoint on the
Department of Corrections.
APRIL WILKERSON, Deputy Commissioner
Department of Corrections
Juneau, Alaska
POSITION STATEMENT: Co-presented the PowerPoint on the
Department of Corrections.
REPRESENTATIVE FRANK TOMASZEWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, answered questions on HB
70.
MICHAELLA ANDERSON, Staff
Representative Frank Tomaszewski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Tomaszewski,
gave a brief overview of HB 70.
BRYCE WARD, Mayor
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Provided invited testimony on HB 70.
SAMANTHA KIRSTEIN, Community Development Director
Fairbanks Community Food Bank
Fairbanks, Alaska
POSITION STATEMENT: Provided invited testimony on HB 70.
GENE THERRIAULT, Board President
Fairbanks Community Food Bank
Fairbanks, Alaska
POSITION STATEMENT: Provided invited testimony on HB 70.
REPRESENTATIVE JULIE COULOMBE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 134.
MAGY ELLIOTT, Staff
Representative Julie Coulombe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Coulombe, prime
sponsor, gave the sectional analysis of HB 134.
ERROL CHAMPION, Managing Broker; Chair
Coldwell Banker Race Realty;
Industry Issues Committee
Alaska Association of Realtors
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony and answered
questions on HB 134.
SENATOR FORREST DUNBAR
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented the changes to
CSSB 77(CRA) am.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony on CSSB 77(CRA)
am.
ACTION NARRATIVE
8:02:05 AM
CHAIR CJ MCCORMICK called the House Community and Regional
Affairs Standing Committee meeting to order at 8:02 a.m.
Representatives McKay, Patkotak, Ruffridge, Himschoot, Mears,
McCabe, and McCormick were present at the call to order.
^PRESENTATION(S): Department of Corrections
PRESENTATION(S): Department of Corrections
8:03:48 AM
CHAIR MCCORMICK announced that the first order of business would
be a presentation on the Department of Corrections.
8:04:18 AM
JENNIFER WINKELMAN, Commissioner Designee, Department of
Corrections, co-presented the PowerPoint on the Department of
Corrections (DOC) [hard copy included in the committee packet].
She gave a brief history of DOC and moved to slide 2, which
addressed DOC's mission and core services. She stated that its
mission is to provide secure confinement, reformative programs,
and a process of supervised release. She stated that the
department has over 2,000 positions with a budget of $419
million. She pointed out the divisions in DOC and what core
services each division provides. She stated that Alaska has a
unified correctional system, as its state-level prison and jail
systems are integrated. She pointed out that states without a
unified system will have jailhouses within municipalities. She
advised that problems could arise from this, as unsentenced
individuals will often be housed with sentenced individuals.
She stated that DOC books into custody around 30,000 people a
year, and at the beginning of the year it was responsible for
around 11,000 individuals. This includes individuals in prisons
or jails, electronically monitored, and under partial
supervision.
8:08:40 AM}
JAKE WYCKOFF, Deputy Commissioner, Department of Corrections,
co-presented the PowerPoint. He stated that he currently
oversees the Division of Institutions and the Division of Health
and Behavioral Services. He commented on the quality and
effectiveness of the entire staff in these two divisions. He
pointed to slide 5 and reviewed the Division of Institutions,
which is the largest in DOC, with 13 correctional centers, 7
community residential centers, 6 sentenced electronic monitoring
offices, and the organization of inmate transportation. He
stated that DOC works collectively with the Department of Public
Safety (DPS), as DPS delegates some authority to DOC for
population movement. He pointed to a graph on slide 6, which
showed the prison population disbursement in all DOC
institutions, and he noted that each of the incarceration sites
on the graph are under capacity. He discussed the work the
department has put in to achieve this. He expressed the belief
that this population disbursement creates a less stressful
environment for staff and inmates.
MR. WYCKOFF, in response to a committee question, stated that
there is a priority in the department to try to keep
incarcerated individuals close to home. He stated that when
deciding where a person is to be incarcerated, these factors are
considered; however, keeping sites below capacity is also an
important factor. In response to a follow-up question, he
expressed the opinion that there will be a point where the
ability to house the inmates will outpace the space available.
He discussed how this is being managed. He deferred the
question.
8:18:48 AM
APRIL WILKERSON, Deputy Commissioner, Department of Corrections,
expressed the understanding that the question related to what
future prison populations would look like. She suggested that
in the future there may be a need for more facilities. She
stated that it is projected the capacity will be exceeded in
2027, and other resources may be needed then. She stated that
DOC is currently looking at all options. In response to a
committee question, she stated that future prison populations
are estimated by looking at the state's population changes, the
legislative changes, community factors, and global factors. She
added that the estimates are "rough" because of the recent
uncertainty in factors, such as the COVID-19 pandemic.
8:22:25 AM
MR. WYCKOFF moved to slide 7, which addressed the prison
population by status of whether the inmate has been sentenced or
not. He indicated that the unsentenced population currently
exceeds the sentenced population. These numbers are broken down
into the prison population by offense class, as seen on slide 8.
He added that inmates were classified by their most serious
charge.
MR. WYCKOFF moved to slide 9 to address the Division of Health
and Rehabilitation Services (HARS). He stated that DOC is
mandated by law to provide timely access to essential health
care, and it follows national guidelines and standards in
providing this. He pointed out the sections under HARS, which
include sex offender management, a program on domestic violence,
the reentry and recidivism unit, and education and vocational
programs. He discussed the various education and vocational
programs. He added that there are also components on behavioral
health care and substance abuse. He highlighted the new mental
health care unit in the women's facility in Eagle River.
8:26:34 AM
MS. WILKERSON, co-presenting the PowerPoint, moved to slide 10,
and discussed the Division of Pretrial, Probation, and Parole,
which is the third largest division. She stated that this
division provides the core services for individuals in pretrial
status and individuals who have served their sentences and have
been released on probation. She stated that the division also
oversees the 15 regional and community jails. In response to a
funding question on jails, she stated that the contracts are
being reworked, and there is the expectation this will be in
place by July 1, with a solid funding amount.
MS. WILKERSON continued to slide 11 and addressed the Board of
Parole, which has two major functions: holding hearings on
individuals already on parole and reviewing applications for
parole. She discussed how parole board members are chosen. She
moved to slide 12 and discussed the DOC's Division of
Administrative Services, which provides support to all the core
functions of DOC. She pointed out additional statewide support
the division receives, which includes support from the research
unit, the records repository, and the inmate DNA collection
program. She further discussed other functions of the division.
MS. WILKERSON moved to slide 13, which outlined the Office of
the Commissioner. She stated that the commissioner provides
oversite to all the areas under the department and its core
services. There are two primary items of concern for the
commissioner's office: the recruitment and retention of staff
and the training academy. In response to a committee question,
she moved to slide 14, titled "Positions by Category" and stated
that she would report back to the committee with more current
information on vacancies and pay for DOC staff. She pointed out
that in 2022, for all statewide positions, DOC had 13 percent
staff vacancies. Once vacancies are broken down by job class,
they fluctuate by location. She further discussed these
fluctuations and vacancies.
8:36:14 AM
COMMISSIONER WINKELMAN, for the record, stated that she is "very
passionate about this department and the work we do." She
reiterated the quality of DOC's staff. She emphasized the
difficulty in working in facilities with individuals who do not
want to be there. She concluded on slide 15, pointing out DOC's
first priority of taking care of the health and well-being of
the staff. She further discussed the difficulties for the
staff. She stated that the second priority for DOC is that
inmates leave the facility better than when they entered. She
addressed the third priority, which is to identify the
efficiencies and resources to reduce recidivism.
COMMISSIONER WINKELMAN, in response to a committee comment,
pointed out that because she came up through the ranks of DOC,
she has been able to identify gaps in the system. She expressed
the importance of working with stakeholders and departments
outside of DOC to get a different perspective. She noted that
the police dogs in the K9 unit do not only work in the
facilities, as they also are out in the communities, seizing
contraband. She discussed the process of "catching drugs"
coming into facilities and referenced the diligence of the staff
in two recent drug busts. In response to a committee request,
she stated that she would report back with a breakdown of drug
seizures in different communities.
8:45:08 AM
CHAIR MCCORMICK thanked the presenters.
8:46:05 AM
The committee took an at-ease from 8:46 a.m. to 8:50 a.m.
HB 70-MUNICIPAL PROPERTY TAX EXEMPTIONS
8:50:05 AM
CHAIR MCCORMICK announced that the next order of business would
be HOUSE BILL NO. 70, "An Act relating to property exempt from
municipal taxation."
8:50:31 AM
REPRESENTATIVE FRANK TOMASZEWSKI, Alaska State Legislature,
introduced his staff to the committee members.
8:50:49 AM
MICHAELLA ANDERSON, Staff, Representative Frank Tomaszewski, on
behalf of Representative Tomaszewski, gave a brief overview of
HB 70. She explained that HB 70 would clarify tax exemptions
for some nonprofits concerning parking lots, space rentals, and
real property. She explained that the real property would be
free items, such as food, clothes, shelter, books, and health
care. She stated that the intent of the legislation is to
prevent any litigation between nonprofits and municipalities in
the future.
8:51:29 AM
REPRESENTATIVE MEARS questioned the status of the new language
for the proposed legislation.
MS. ANDERSON replied that this is still in progress. She
explained that the new language would allow for a grace period
on construction on properties owned by a nonprofit organization;
the organization would have two years to develop the property
before it is not exempt. She added that this would also allow
for fund raising ability. In response to several follow-up
questions, she responded that other scenarios have been
considered; however, the primary concern for the proposed
legislation would be the food bank in Fairbanks. Concerning
other municipalities, the tax-exempt status for nonprofits would
fall under the same statute as Fairbanks. She stated that other
municipalities have not been contacted, as this is a Fairbanks'
issue. She added that any litigation could cause other
municipalities to take steps. In response, she stated that it
has been discussed with the Fairbanks North Star Borough (FNSB)
to resolve this in other ways, but this has been to no avail.
8:54:10 AM
REPRESENTATIVE HIMSCHOOT questioned whether there is an option
of using the assembly's Board of Equalization in Fairbanks to
address the food bank's issues.
REPRESENTATIVE TOMASZEWSKI replied that there is a Board of
Equalization; however, because of changes in the way the board
works, it is not easy for property owners to go to the board.
He added that the first step would be going to the Alaska
Superior Court.
8:55:15 AM
CHAIR MCCORMICK indicated the committee would hear from invited
testimony.
8:55:31 AM
BRYCE WARD, Mayor, Fairbanks North Star Borough, provided
invited testimony on HB 70. He expressed the opinion that the
Community Food Bank is a pillar of the community. He stated
that, as drafted, the proposed legislation would add language
under AS 29.45.030, clarifying state required property tax
exemptions. He explained that for nonprofits to receive tax
exemptions from boroughs, they would be required to prove public
benefit. He stated that Article 9, Section 4, of the
Constitution of the State of Alaska gives direction on
exemptions for real property tax on properties which are used
exclusively for the purposes of nonprofits, religious
ceremonies, and cemeteries. He explained that properties owned
by nonprofits are not necessarily exempt from taxes, as there
are other criteria, and assigning tax exemption to ownership, as
opposed to use, could undermine public benefit. He continued
that just because a property is owned by a nonprofit does not
mean it is being exclusively used for an eligible purpose, as
defined by law. He stated that HB 70 is a good start at
addressing this; however, there are some problematic areas. He
explained that the Board of Equalization in Fairbanks is
reserved for evaluation cases, while taxability is referred
directly to the courts. He added that other communities may do
this differently.
8:58:07 AM
REPRESENTATIVE HIMSCHOOT expressed support for local control and
expressed uncertainty concerning the proposed bill because of
localization. She questioned whether the duties of FNSB's Board
of Equalization can be changed to address the problem at the
local level.
MR. WARD responded that this would be a question for the
assembly. From an administration perspective, he pointed out
the difference between issues of taxability and the duties of
the board. He explained that equalization is an issue of value,
while taxability is an issue of law, which is why these cases
are referred to the courts.
8:59:14 AM
REPRESENTATIVE MEARS expressed the understanding that AS
29.45.050 concerns the optional exemptions and exclusions for
municipalities. She expressed the understanding that this
statute would give the borough the opportunity to exempt the
properties; therefore, the issue could be resolved on the
borough level.
MR. WARD replied that this is correct, and it is required that
the property owner file an application. He continued that this
has been communicated to the food bank.
9:01:15 AM
SAMANTHA KIRSTEIN, Community Development Director, Fairbanks
Community Food Bank, provided invited testimony on HB 70. She
shared that she has worked for the food bank for 32 years, and
until 2022 the food bank has had exempt property. She stated
that an exemption was applied for, but it was partially denied.
She argued that the work the food bank does is for community
purposes only, and this has been explained.
9:03:11 AM
GENE THERRIAULT, Board President, Fairbanks Community Food Bank,
provided invited testimony on HB 70. He added that his work for
the food bank is pro bono. He observed the widespread support
that the food bank receives. He pointed out that the food bank
has recently received emergency money from the state for the
food shortage. He continued that the food bank has partnerships
with other food supply entities in the state; therefore, it
serves a larger portion of the state. He reiterated that in 40
years the food bank has never been levied with a property tax
against any of its facilities until last year. He expressed the
understanding that this has been perceived as an upcoming
problem, but FNSB is the first to experience this in the state.
He described the food bank's spaces in Fairbanks which were
assessed with $8,200 in taxes. He explained that while this is
not "crushing," in the middle of the winter the food bank's
energy bill can be up to $16,000 per month. He pointed out the
denial letter from the tax assessor addressed several fund
raisers held in the food bank's spaces. The letter conveyed
that use of the property must be for a direct and primary
purpose, but any charitable fund raising for this purpose is not
exempt.
9:08:13 AM
MR. THERRIAULT continued that the tax assessor's determination
related that if the food bank is raising money, it is not
feeding people, which is its primary purpose. He stated that
the tax assessor's office determined the property tax by
measuring the square footage which had been used for fund
raising. He described how another recent fund-raising event at
a food bank space may have put another, bigger facility at risk
for a tax. He stated that if this happens, the only recourse is
to go to court; however, the food bank does not have the
resources to go to court, which is why the food bank paid the
2022 property taxes. He explained the details of how HB 70 came
to be and how it may be applied to other nonprofits. He stated
that it has been recommended the definition of the word "use" be
expanded in a way which would not risk misuse of the statute.
He discussed the expense which goes along with meeting the
state's needs during the food shortages, and he argued that the
food bank needs help to make sure it is not subjected to a
property tax.
9:13:30 AM
REPRESENTATIVE MCCABE questioned how much food $8,200 would
supply.
MR. THERRIAULT replied that recently 31,000 pounds of bycatch
fish from Seattle had no cost; however, it had cost $8,000 for
freight to ship it to Fairbanks.
REPRESENTATIVE MCCABE questioned what changed in 2022 to cause a
tax to be levied.
MR. THERRIAULT expressed the understanding that it was a
reinterpretation of statute. He stated that the tax assessor's
office had not indicated there would be a change.
REPRESENTATIVE MCCABE requested a copy of the letter. He said,
"It seems a little much to have to do this via statute." He
requested clarity that the food bank is a nonprofit for the
community and not just for a small group of people.
MR. THERRIAULT responded in the affirmative. He stated that he
would provide a copy of the denial letter. He added that the
food bank only leases property to other qualified nonprofits.
He gave the example of the Literacy Council of Alaska selling
used books, and how this was determined to create a taxable
space. He described some of the other properties the food bank
owns and how tax was determined. He expressed the desire to
strike a balance with something which is not subject to abuse.
9:18:32 AM
REPRESENTATIVE MCCABE questioned what the Literacy Council of
Alaska, as a nonprofit, does with the proceeds when it sells a
book.
MR. THERRIAULT replied these profits are used to support its
charitable function. He stated that, concerning the proposed
legislation, the language addresses entities reselling donated
goods at a lower price. He expressed the desire not to impact
other charities whose definitions may not align; therefore, he
suggested that the language needs to be more nuanced and
sensitive.
9:20:12 AM
CHAIR MCCORMICK announced that HB 70 was held over.
9:20:43 AM
The committee took an at-ease from 9:20 a.m. to 9:22 a.m.
HB 134-PROPERTY TRANSFER TAX; MUNI TELECOMM TAX
9:22:18 AM
CHAIR MCCORMICK announced that the next order of business would
be HOUSE BILL NO. 134, "An Act prohibiting municipalities from
levying a tax on the transfer of real property; prohibiting the
state from levying a tax on the transfer of real property; and
relating to municipal taxation of mobile telecommunications
services."
9:22:27 AM
REPRESENTATIVE JULIE COULOMBE, Alaska State Legislature, as
prime sponsor, introduced HB 134. She stated that the proposed
legislation would prohibit state and local governments from
imposing real estate transfer taxes, fees, and other assessments
on sales, grants, assignments, or transfers of real property.
She stated that transfer fees are increasingly being assessed
for property transactions in other states. She pointed out the
housing problems in the state and argued that in Alaska this tax
would add the obstacle of increased costs. Concerning local
control versus state control, she argued that housing is not
just a local issue, as these struggles affect the entire state.
She stated that the tax is not currently imposed, and the
proposed legislation is a preventative action.
9:25:50 AM
MAGY ELLIOTT, Staff, Representative Julie Coulombe, Alaska State
Legislature, on behalf of Representative Coulombe, prime
sponsor, presented the sectional analysis of HB 134 [copy
included in the committee packet], which read as follows
[original punctuation provided]:
Section 1: (Page one line 5-7) Conforming to Section
4, amends AS.29.10.200(56) to add the provisions of
this bill to the Limitation of Home Rule Powers
statute.
Section 2: (Page one line 8-9) Conforming to Section
6, amends AS 29.10.200(57) to add the provisions of
this bill to the Limitation of Home Rule Powers
statute.
Section 3: (Starting on page 1, line 10, to page 2,
line 2) Conforming language to amend AS.29.45.650(a),
to add new subsection (l) of this bill to the statues
regarding Borough Sales and Use Tax.
Section 4: (Page two lines 3-5) Amends AS.29.45.650,
to add new subsection (l) to the Borough Sales and Use
Tax statue to provide that a borough may not levy or
collect sales tax on the transfer of real property.
Section 5: (Page two line 6-11) Conforming to Section
6, amends AS.29.45.700(a) to add new section
subsection (h) of this bill to the Power of Levy
statute.
Section 6: (Page two line 12-14) Amends AS 29.45.700
to Add a new subsection (h) to the Power of Levy
Statute, which states that a city may not levy or
collect a sales or use tax on the transfer or real
property.
Section 7: (Page two line 15-17) Adds a new section to
Article 3, No tax on real property transfers, which
stipulates that the state may not levy or collect on
sales or use tax on the transfer of real property.
Section 8: (Page two line 16-19) Repealer section
related to municipal taxation of mobile
telecommunications.
9:28:32 AM
REPRESENTATIVE MCKAY expressed the understanding that the
definition of real property is bigger than just a residential
home. He requested a comment on the definition of "real
property."
REPRESENTATIVE COULOMBE stated that the intention of the
proposed legislation would be for residential housing.
REPRESENTATIVE MCKAY expressed concern that the legislation
designates the term "real property," and this could have an
expansive definition.
9:30:11 AM
ERROL CHAMPION, Managing Broker, Coldwell Banker Race Realty;
Chair, Industry Issues Committee, Alaska Association of
Realtors, provided invited testimony on HB 134. He addressed
Representative McKay's concern and stated that, in terms of real
property transactions, around less than 10 percent of this
volume is commercial property. He stated that an exact
definition cannot be given, as something sold as commercial
could be developed into residential property. He expressed the
concern that 35 states have already moved forward with leveeing
transfer fees, and this would be added to the cost of real
property. In response to a follow-up question, he reiterated
that there is no way to determine the difference between
commercial and residential property.
9:32:27 AM
REPRESENTATIVE MCCABE questioned the transfer fee cost in other
states.
MR. CHAMPION added that the ten percent stated was the estimated
ratio of the commercial property to residential property.
Answering the question, he stated that the highest transfer fee
he is aware of is in Washington State. He explained that the
fees vary, and some states have a county transfer fee, a state
transfer fee, and a municipal transfer fee, while other places
have a flat rate transfer fee. He stated that realtors who
support this bill argue against any costs which would increase
the cost of acquiring a home.
9:33:35 AM
REPRESENTATIVE COULOMBE expounded that Washington State and
Colorado have the highest transfer fee rates. She stated that
fees varied from 0.1 per $100,000 all the way to 3.5 per
$100,000, per level of government, as some states have three
levels of government which charge the tax. She added that if
all three impose a tax, the tax could be raised to 10 percent.
She continued that the way transfer fees are structured, it is
hard to determine a rate across the board.
MR. CHAMPION, in response to a follow-up question, stated that
most sellers will recognize they have to pay this; therefore,
the tax is added to the asking price of the home. He expressed
the understanding that [governments like] transfers because it
is a one-time charge collected by the escrow office, with the
seller paying at closing.
9:35:53 AM
MR. CHAMPION explained this has been an issue in the Lower 48,
and it is being monitored by the Alaska Realtors Association.
He stated that only recently the City and Borough of Juneau
passed a disclosure concerning this; however, compliance was
poor, and a second ordinance with a fee was adopted. The
ordinance was afterwards reversed, but it presented the idea to
those in the industry that the inclination "to go after the sell
of real property" is there. He reiterated that 35 states have
this tax, while 12 other states do not require disclosure. He
expressed the opinion that without disclosure, there cannot be a
transfer fee. He expressed the preference that the state remain
a nondisclosed state. He argued that this is a privacy issue,
which is referenced in the state's constitution.
9:38:37 AM
REPRESENTATIVE HIMSCHOOT questioned if the bill would address
whether Alaska remains a nondisclosure state.
REPRESENTATIVE COULOMBE responded in the negative, as it would
not address this part; the proposed legislation would only
address the transfer tax. She added that this would be the
community's choice.
REPRESENTATIVE HIMSCHOOT questioned why the proposed bill skips
addressing a state tax and directly addresses the municipal
level.
REPRESENTATIVE COULOMBE responded that it would address the
borough, state, and municipality levels. She offered to point
out the sections in the bill which do this.
REPRESENTATIVE HIMSCHOOT stated that she would support taking
everything out of the proposed legislation which deals with
municipalities and leaving only the provisions which address the
state. She reiterated that she is a proponent of local control.
9:41:27 AM
CHAIR MCCORMICK announced that HB 134 was held over.
9:41:55 AM
The committee took an at-ease from 9:41 a.m. to 9:43 a.m.
SB 77-MUNI PROP TAX EXEMPTION/TAX BLIGHTED PROP
9:43:16 AM
CHAIR MCCORMICK announced that the final order of business would
be CS FOR SENATE BILL NO. 77(CRA) am, "An Act relating to
municipal property tax; and providing for an effective date."
9:43:54 AM
SENATOR FORREST DUNBAR, Alaska State Legislature, mentioned that
CSSB 77(CRA) am is the companion bill to HB 84, which is
sponsored by Representative Jesse Sumner. He explained that
CSSB 77(CRA) am would create two optional tools, of which
municipalities could choose. He pointed out that this aligns
with local control. He explained that several changes were made
to the bill. First there would be a cap on the blight tax, as
only 50 percent of the property's annual assessed property tax
could be used. He expressed the understanding that this is a
much lower tax than in other parts of the country. He stated
this would also prevent an owner-occupied primary residence from
being the subject of a blight tax. He stated another change
would allow home rule and first-class cities to implement the
blight tax. He referenced two other small changes: the blight
tax would be removed once remediation has begun, as opposed to
when it is completed, and a primary residence could not be
identified as blighted.
9:47:47 AM
REPRESENTATIVE MCCABE questioned whether an ordinance adopted by
the assembly in Anchorage would automatically go to the voters.
SENATOR DUNBAR responded that most ordinances do not go to the
voters, with some exceptions, such as a bond. He explained the
two ways an ordinance would go to the voters.
REPRESENTATIVE MCCABE expressed the understanding that, with no
voter input, the assembly could adopt an ordinance which
"designates 'blighted' as somebody that didn't mow their lawn."
He questioned the protection in the proposed legislation for a
home owner and the definition of "blighted."
SENATOR DUNBAR responded that if a person is in his/her home,
the home is not subject to this. He stated that removing
something for public purpose is not the definition of "blighted"
and not eminent domain, which is a difficult process. He added
that there is an appeals process, and the primary check for
local governments is the ability for the public to vote
individuals out of office. In discussing the definition of
"blighted," he stated that there had been one put forward, but
he expressed the opinion that it had been inappropriate to amend
the bill on the floor. He continued that the Alaska Municipal
League has expressed the opinion that local governments should
define the term themselves. He discussed the definition that
other states have put forward and concluded that defining
"blighted" is not an easy task. He stressed the importance of
local control in most cases.
9:51:59 AM
REPRESENTATIVE MCCABE expressed appreciation for local control;
however, because there are some unorganized boroughs in the
state, blighted will need to have a basic definition, such as
having a floor. He conceded that Alaska is spread out, so
creating a definition and having control would be difficult.
SENATOR DUNBAR expressed agreement; however, he reminded the
committee that the proposed legislation would only apply to
entities that impose property tax.
9:53:47 AM
REPRESENTATIVE MCKAY argued that the legislature's job is to
pass laws, but also its job is to protect citizens from
overzealous local governments. He expressed caution because
these types of laws could have unintended consequences, and he
gave an example.
SENATOR DUNBAR expressed appreciation for the concern. He
stated that this is why he welcomed the amendment concerning
remediation of the property, rather than completion. He stated
that remediation shows "a good faith effort." He reminded the
committee members that this would not apply to primary
residences. He gave the example of a hotel in Anchorage with an
out-of-state owner, as it sat abandoned for many years and
became a center of criminal activity and a fire hazard. He
pointed out that this type of property would be the
legislation's focus. He stated that it is not intended to be a
punitive tool which leads to foreclosure.
REPRESENTATIVE MCKAY pointed out that the Anchorage hotel in the
given example was taken care of without legislation. He argued
that laws do not always respect good intentions.
SENATOR DUNBAR responded that in this example, the assembly
passed an ordinance which imposed fees for unsecured property.
This had not worked, and he discussed the complicated agreement
which had rectified the problem. He explained that this had
been a very long process. He suggested that the proposed
legislation would lead to an easier solution.
9:59:56 AM
NILS ANDREASSEN, Executive Director, Alaska Municipal League,
provided invited testimony on CSSB 77(CRA) am. On behalf of the
Alaska Municipal League, he expressed the opinion that, as
currently drafted, the proposed bill would support local control
and community redevelopment priorities. It would provide local
decision making for all the local governments in Alaska. He
continued that the proposed legislation would empower the
communities, make properties more valuable, and protect the
vulnerable populations, ensuring quality of life, public health,
and public safety.
10:01:08 AM
CHAIR MCCORMICK announced that CSSB 77(CRA) am was held over.
10:02:01 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 10:02 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOC Overview - (H) Community Regional Affairs April 13 2023.pdf |
HCRA 4/13/2023 8:00:00 AM |
DOC |
| HB 134 CCED Fiscal Note.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 134 |
| HB 134 DOR Fiscal Note.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 134 |
| HB 134 22-LS0618B.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 134 |
| HB 134 Sectional Analysis.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 134 |
| HB 134 Sponsor Statement.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 134 |
| HB 70 Sectional Analysis.pdf |
HCRA 4/6/2023 7:30:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |
| HB70 Sponsor Statement.pdf |
HCRA 4/6/2023 7:30:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |
| HB 70 FCFB Service Map.pdf |
HCRA 4/6/2023 7:30:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |
| HB 70 Fiscal Note CCED.pdf |
HCRA 4/6/2023 8:00:00 AM HCRA 4/13/2023 8:00:00 AM |
HB 70 |
| 3. SB 77 - Sectional Analysis vers. A.pdf |
HCRA 4/13/2023 8:00:00 AM SCRA 3/16/2023 1:30:00 PM |
SB 77 |
| 1. SB 77 - Sponsor Statement vers. A.pdf |
HCRA 4/13/2023 8:00:00 AM SCRA 3/16/2023 1:30:00 PM |
SB 77 |
| 2. SB 77 vers. A.PDF |
HCRA 4/13/2023 8:00:00 AM SCRA 3/16/2023 1:30:00 PM |
SB 77 |
| 5. SB 77 - Supporting Doc.; Agnew Beck Memo.pdf |
HCRA 4/13/2023 8:00:00 AM SCRA 3/16/2023 1:30:00 PM |
SB 77 |
| SB 77, Amendment #1.pdf |
HCRA 4/13/2023 8:00:00 AM SCRA 3/28/2023 1:30:00 PM |
SB 77 |
| C. Schutte, SB 77, LOS 3.16.23.pdf |
HCRA 4/13/2023 8:00:00 AM SCRA 3/28/2023 1:30:00 PM |
SB 77 |
| 4. SB 77 Sectional Analysis, vers. S.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 Amendment S.1.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 CIHA LOS for SB77-HB84.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 84 SB 77 |
| CS SB 77.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| S.2.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| Sitka Support Letter.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 HLC Support Letter_SB 77 HB 84.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 84 SB 77 |
| 2. SB 77 vers. S, 3.29.2023.PDF |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| 5. SB 77 Summary of Changes, vers. B to vers. S.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| 3. SB 77 vers. B.PDF |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| 7. SB 77 LOS Received as of 4.6.2023.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| 8. SB 77 LOO through 4.7.2023.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 Sponsor Statement vers. C.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 Sectional Analysis vers. C.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB0077C.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| SB 77 Summary of Changes vers. C.pdf |
HCRA 4/13/2023 8:00:00 AM |
SB 77 |
| HB 70 Letter of Denial FNSB 04.05.2022.pdf |
HCRA 4/13/2023 8:00:00 AM |
HB 70 SB 4 |