HB 13-MUNICIPAL PROPERTY TAX EXEMPTIONS  9:48:36 AM CO-CHAIR HIMSCHOOT announced that the final order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 13, "An Act relating to optional municipal property tax exemptions for certain long-term rental units, certain mobile home parks, real property rented to low-income families, real property owned and occupied as a permanent place of abode, and real property owned by first-time homebuyers." [Before the committee, adopted as the working document on 4/10/25, was the proposed committee substitute (CS) for SSHB 13, Version 34-LS0194\T, Dunmire, 4/8/25 ("Version T").] 9:48:50 AM REPRESENTATIVE RUFFRIDGE moved to adopt Amendment 1 to Version T, labeled 34-LS0194\T.3, Dunmire, 4/22/25, which read: Page 1, line 12: Delete "31 consecutive days" Insert "one year" CO-CHAIR HIMSCHOOT objected. REPRESENTATIVE RUFFRIDGE explained that Amendment 1 would change the definition of "long-term rental unit" from a dwelling unit offered for rent for periods of not less than 31 consecutive days to one year. CO-CHAIR HIMSCHOOT asked for input from the bill sponsor. 9:49:54 AM REPRESENTATIVE ANDREW GRAY, Alaska State Legislature, as prime sponsor, clarified that the goal is to allow as much flexibility for municipalities, boroughs, and cities because a long-term rental may look different in each community. For that reason, he said he opposed Amendment 1. CO-CHAIR HIMSCHOOT maintained her objection. 9:51:09 AM A roll call vote was taken. Representatives Prax and Ruffridge voted in favor of Amendment 1. Representatives Hall, Holland, Mears, and Himschoot voted against it. Therefore, Amendment 1 failed by a vote of 2-4. 9:51:34 AM REPRESENTATIVE RUFFRIDGE moved to adopt Amendment 2 to Version T, labeled 34-LS0194\T.4, Dunmire, 4/22/25, which read: Page 2, following line 21: Insert a new subsection to read: "(ff) A municipality may only adopt an exemption under (aa) - (ee) of this section after conducting a fiscal impact study on how tax revenue lost under the proposed exemption would be addressed without disproportionately burdening vulnerable homeowners." CO-CHAIR HIMSCHOOT objected. 9:51:40 AM REPRESENTATIVE RUFFRIDGE explained that Amendment 2 would add a new sub-subparagraph (ff) to conduct a fiscal impact study that shows how lost tax revenue would be made up for before adopting the proposed exemptions by ordinance. CO-CHAIR HIMSCHOOT pointed out that in Sitka, the mil rate cannot be changed without a vote of the people. 9:53:24 AM REPRESENTATIVE GRAY said he expected municipal governments to have the fiduciary interest of citizens at heart. He opined that the proposed amendment would micromanage the bill and said he opposed Amendment 2. 9:54:45 AM REPRESENTATIVE PRAX said based on his experience serving on a municipal assembly, he does not have as much faith in elected officials. He opined that if assemblies could enact this without voter approval, there should be tighter sideboards. CO-CHAIR HIMSCHOOT asked for the definition of "vulnerable homeowner." REPRESENTATIVE RUFFRIDGE defined vulnerable homeowner as someone on the edge of the income limit who qualifies for no exemptions. 9:58:11 AM A roll call vote was taken. Representatives Prax and Ruffridge voted in favor of Amendment 2. Representatives Hall, Holland, Mears, and Himschoot voted against it. Therefore, Amendment 2 failed by a vote of 2-4. 9:58:47 AM REPRESENTATIVE RUFFRIDGE moved to adopt Amendment 3 to Version T, labeled 34-LS0194\T.1, Dunmire, 4/22/25, which read: Page 1, line 4, following "buyers": Insert "; and relating to annual increases in  property assessments" Page 2, following line 21: Insert a new bill section to read: "* Sec. 2. AS 29.45.110 is amended by adding a new subsection to read: (f) A municipality may by ordinance limit to five percent or less the amount by which the assessed value of real property may be increased over the previous year's assessed value. An ordinance adopted under this section must allow the assessor to increase the value of real property above the percentage limit established in the ordinance if the increase is based on an improvement to the real property or information about the real property that the assessor did not know at the time of the previous assessment." CO-CHAIR HIMSCHOOT objected. 9:59:04 AM REPRESENTATIVE RUFFRIDGE explained that Amendment 3 would allow municipalities by ordinance to impose a cap on property assessments to ensure that taxes are not increasing at a rate that makes homes unaffordable for the vulnerable population. The proposed amendment would limit the increase to 5 percent, or less the amount by which the assessed value of real property may be increased over the previous year's assessed value. It would allow for incremental growth but not massive spikes of 20-30 percent, for example. 10:00:56 AM REPRESENTATIVE GRAY stated that the proposed amendment offers an optional limit by ordinance and shows a great understanding of the bill while making it better. He said he is grateful for Amendment 3. CO-CHAIR MEARS asked whether Representative Ruffridge had discussed Amendment 3 with any assessors. REPRESENTATIVE RUFFRIDGE said the proposed amendment would still allow the assessors to do their job with certain sideboards. For example, if property values are increasing by 20 percent, it would have to be a four-year increase at five percent each year if this ordinance were enacted by the municipality. In response to a follow up question, he referred to lines 10-12 of Amendment 3, and explained that the assessor could increase the value past the percentage limit if it's based on an improvement to the real property or information about the property that the assessor did not have at the time of the previous assessment. CO-CHAIR HIMSCHOOT said she liked the amendment but expressed concerned about how it would play out if the assessment does not happen annually. REPRESENTATIVE RUFFRIDGE stated that Amendment 3 seeks to be a protector of vulnerable homeowners. He shared an example of a home with an artificially inflated assessed value and said Amendment 3 would help keep home prices somewhat protected and help keep vulnerable homeowners protected from large increases to property tax. 10:06:07 AM CO-CHAIR MEARS stated that Amendment 3 is too in depth to support without further discussion. REPRESENTATIVE HOLLAND expressed concern that property tax value would no longer match the value of the property. He said the disconnect between the assessments versus the mil rate versus the real market value is a step that he's uncomfortable with. CO-CHAIR HIMSCHOOT asked how Amendment 3 would impact the local contribution to school districts. 10:08:05 AM REPRESENTATIVE RUFFRIDGE said the real question is whether the mil rate had been reduced in Anchorage over the past three years, as property values have increased dramatically. REPRESENTATIVE HOLLAND shared his understanding that the Municipality of Anchorage is subject to a tax cap, and the mil rate is readjusted to keep the municipality within that limit. REPRESENTATIVE GRAY responded yes; the tax rate has decreased. 10:09:33 AM REPRESENTATIVE RUFFRIDGE, in response to Co-Chair Himschoot, said Amendment 3 would have no impact on the local contribution to schools. In response to a follow up question, he explained that the local contribution amount is set by the local government. CO-CHAIR HIMSCHOOT shared her understanding that the amount is based on the assessed value of real property. REPRESENTATIVE RUFFRIDGE shared his understanding that the assessed value sets the floor and the ceiling, and there are very few municipalities that get close to either. CO-CHAIR HIMSCHOOT stated that she is aware of two that are funding completely to the cap. She said she would like to see Amendment 3 as its own bill, adding that she's uncomfortable adopting it at this time. 10:10:56 AM REPRESENTATIVE PRAX [moved to adjourn] because the subject is complicated and requires more time. 10:12:00 AM A roll call vote was taken. Representatives Prax and Ruffridge voted in favor of the motion to adjourn. Representatives Hall, Holland, Mears, and Himschoot voted against it. Therefore, the motion to adjourn failed by a vote of 2-4. 10:12:20 AM A roll call vote was taken. Representatives Prax and Ruffridge voted in favor of Amendment 3. Representatives Holland, Hall, Mears, and Himschoot voted against it. Therefore, Amendment 3 failed by a vote of 2-4. 10:12:45 AM REPRESENTATIVE RUFFRIDGE moved to adopt Amendment 4 to Version T, labeled 34-LS0194\T.5, Dunmire, 4/23/25, which read: Page 1, line 7, following "ordinance": Insert "approved by the voters" Page 2, line 6, following "ordinance": Insert "approved by the voters" Page 2, line 9, following "ordinance": Insert "approved by the voters" Page 2, line 17, following "ordinance": Insert "approved by the voters" Page 2, line 20, following "ordinance": Insert "approved by the voters" CO-CHAIR HIMSCHOOT objected. 10:12:52 AM REPRESENTATIVE RUFFRIDGE explained that Amendment 4 would require that the ordinances proposed in HB 184 be approved by the voters. 10:14:42 AM REPRESENTATIVE GRAY said he opposed the amendment. He recalled that last year, the House voted to add an existing exemption and to remove a voting requirement, which Representative Ruffridge, Himschoot, Mears, Prax, and himself, all voted to for. He added that this has been done before. 10:16:11 AM A roll call vote was taken. Representatives Prax and Ruffridge voted in favor of Amendment 4. Representatives Hall, Holland, Mears, and Himschoot voted against it. Therefore, Amendment 4 failed by a vote of 2-4. 10:16:57 AM CO-CHAIR MEARS moved to report CSSSHB 13, Version 34-LS0194\T, Dunmire, 4/8/25, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE RUFFRIDGE objected. 10:17:15 AM A roll call vote was taken. Representatives Hall, Holland, Mears, Himschoot voted in favor of reporting Version T out of committee. Representatives Prax and Ruffridge voted against it. Therefore, CSSSHB 13(CRA) was reported out of the House Community and Regional Affairs Standing Committee by a vote of 4-2.