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.