HB 22 - INVESTIGATIONS BY MUNICIPAL ASSESSOR Number 018 CO-CHAIRMAN HARRIS announced the first order of business was HOUSE BILL NO. 22, "An Act relating to investigations of property by a municipal assessor or the assessor's agent; and providing for an effective date." REPRESENTATIVE OGAN, Alaska State Legislature, explained that HB 22 was introduced out of concern of an incident, albeit isolated, that occurred to a constituent. Representative Ogan noted that the committee packet contained written testimony from the constituent involved. The constituent heard someone in his house who turned out to be the borough tax assessor who was already 10-15 feet inside of the house with the door closed. Representative Ogan believed the following provisions in the Alaska Constitution regarding the right of privacy, Article I, Section 22, searches and seizures in Article I, Section 14, and due process in Article I, Section 7, were recognized in HB 22. He reviewed Alaska Statute (AS) Section 29.45.130, specifically (b) of that section which reads, "For investigation, the assessor or the assessor's agent may enter a premise during reasonable hours and may examine property on the premise." Representative Ogan explained that HB 22 would require the assessor to gain permission from the possessor of the property before entering the property. He commented that the reference to "reasonable hours" may not be considered the same by all. Number 134 REPRESENTATIVE KOOKESH asked if the normal process of going through the channels of the municipal government, such as contacting this assessor's supervisor or bringing the situation before the borough assembly, was attempted. Representative Kookesh said that HB 22 seemed far-reaching in response to a single incident. REPRESENTATIVE OGAN said that Representative Kookesh's point was well taken, but he viewed his obligation to defend the constitution and his constituent's rights as a serious responsibility. Any time the government has leeway, abuses occur. In talking with the local people, Representative Ogan did not believe this situation would happen again, but the incident prompted review of the statute which was cause for concern. Representative Ogan did not believe it to be good policy to allow the state assessor the authority to have access to a house whenever he wants. REPRESENTATIVE MURKOWSKI understood that the assessors observe the exterior of a property, but not actually come inside the dwelling. She interpreted the statute language, "enter a premise" as allowing the assessor to enter the real property, but not into the dwelling. Is the intent of HB 22 to require permission only when the assessor wants to enter a dwelling or would permission also be necessary to come on the real property itself? Number 200 REPRESENTATIVE OGAN referred to Section 1 of HB 22 where "[A PREMISE]" was deleted and "real property" is included. Representative Ogan said that an assessor would be allowed to drive on the property and look around, but permission from the person in possession of the property would be required to enter the dwelling. Representative Ogan noted that there had been concerns that "possession" was somewhat ambiguous. He suggested that the language be amended to "actual possession" which is defined in Black's Law Dictionary as "exists where the thing is in immediate occupancy and physical control of the party" which Representative Ogan said could be an owner or renter. Representative Ogan further suggested that language should be considered that would allow an assessor to enter when a property is under the possession of a contractor and is under construction. REPRESENTATIVE MURKOWSKI asked if the intent was to only require permission if the assessor wanted to enter a dwelling. REPRESENTATIVE OGAN replied yes. He envisioned a form that the assessor would have the owner sign to indicate permission was granted. This would alleviate later civil liability. Representative Ogan noted that the assessor can get a court order to enter a dwelling if so compelled which is specified on page 1, line 10 of HB 22. Representative Ogan mentioned that assessors have told him that it is in the favor of the owner to enter the house because the assessor would take some things for granted if only looking at the exterior. Number 284 REPRESENTATIVE DYSON was startled with the statutory language regarding assessors. REPRESENTATIVE JOULE asked if there would be a way to address this isolated problem at the borough level through borough code or ordinances. REPRESENTATIVE OGAN said that the borough could pass a code, but that ignores the legislative responsibility to protect citizens' rights under the constitution. REPRESENTATIVE JOULE noted that this issue was similar to the wolf snare issue where a particular area had a problem that some were trying to deal with on a statewide level. He indicated that passage of a law could be avoided, if local areas could deal with this situation on their own. Representative Joule agreed with where Representative Ogan was attempting to go. REPRESENTATIVE OGAN believed that past legislators across the nation have ignored the constitution, passed laws that are unconstitutional and let the courts make the decisions. Representative Ogan said that he takes his oath seriously and wants to close the loop holes that could result in possible injustice and abuse by the government. Representative Ogan suspected this problem to be more widespread than is evident; who wants to make an issue of it? Number 351 CO-CHAIRMAN HALCRO explained that in the Municipality of Anchorage one must receive a Certificate of Occupancy from a building inspector before moving into a new home. Does that apply in the Mat-Su Valley? REPRESENTATIVE OGAN replied no, as with most of the state there are no building codes nor inspections. Commercial buildings are reviewed by the state fire inspector. In further response to Co-Chairman Halcro, Representative Ogan said there is no authority that approves building plans in Mat-Su or most areas of the state. REPRESENTATIVE MURKOWSKI asked if the municipal regulations or borough ordinances had been reviewed with regard to assessors and their ability to be on property. She wondered if there was a lack of uniformity within municipal or borough government regarding the power of the assessors. Number 391 REPRESENTATIVE OGAN said that he did not do an extensive review of the authority of municipal assessors because they have broad authority in the statutes. This legislation would cleanup the statute and establish the standard. REPRESENTATIVE MURKOWSKI restated her question. She asked if there was language in municipal ordinances or regulations that specify that an assessor shall not enter a dwelling or property without permission. Is it possible to monitor this on a local level? REPRESENTATIVE OGAN agreed with Co-Chairman Harris' assessment that HB 22 only deals with entering the premise. Representative Ogan read the language on page 1, line 5 which states, "For investigation, the assessor or the assessor's agent may enter real property [A PREMISE] during reasonable hours to [AND MAY] examine visible personal property and the exterior of a dwelling or other structure on the real property." He said that the assessor must knock on the door and identify himself as an assessor and receive permission to enter the house from the owner. Representative Ogan did not believe that would be an unreasonable policy to impose statewide whether a borough or municipality already does so or not. CO-CHAIRMAN HARRIS inquired as to whether mobile homes would be included in the definition of personal property. REPRESENTATIVE OGAN read the following definition of personal property as found in Black's Law Dictionary, "Personal property includes money, goods, chattels, things in action, evidence of debt. Personal property is divisible into corporal personal property and incorporeal personal property." Number 450 STEVE VAN SANT, State Assessor, Department of Community & Regional Affairs(DCRA), testified via teleconference. He stated that most assessors do not have a problem with HB 22 which encompasses what is typically done. In this particular case in Mat-Su, this was an isolated incident. Mr. Van Sant did not know of any written policies, but every assessor has been instructured not to enter a home unless invited nor should an assessor enter a home if only children are present. With regard to who is in possession of a property, there could be some problems. For example, who is in possession when property is under construction or can an assessor look around if no one is present. Who should the assessor contact when inspecting a commercial property? Mr. Van Sant believed that the case that prompted HB 22 involved miscommunication. REPRESENTATIVE MURKOWSKI asked if the rule in which assessors ask permission before entering a property was an unwritten rule or is it contained in any municipal or borough ordinances. MR. VAN SANT did not know of any written manuals or policies. As a former assessor in Anchorage and Mat-Su, Mr. Van Sant said that all new appraisers are instructed not to enter a premise unless permission is granted. Mr. Van Sant agreed with Representative Murkowski that it was an industry practice. Number 511 CO-CHAIRMAN HALCRO inquired as to who would be liable if an assessor is in the property and the assessor falls down the stairs or is bitten by a dog. MR. VAN SANT did not know. The industry discourages even opening a door if someone inside says, "Come in" because children could be home alone. The industry does not want assessors in the house with underage children. CO-CHAIRMAN HARRIS noted that he had never heard of any assessor entering a home in Valdez without being invited. The assessor would note that he/she could not enter the dwelling, therefore, the assessment could be higher or lower based on that criteria. Is that always the case? Co-Chairman Harris characterized HB 22 as housekeeping. MR. VAN SANT believed that to be the case. An assessor would hopefully report a better indication of value if he/she could enter the dwelling. Mr. Van Sant noted that he had been an assessor for over 30 years and very rarely is an assessor allowed inside a home. Number 550 WAYNE HEARER, Municipal Assessor and Director of Property Appraisal, Municipality of Anchorage, testified via teleconference. He informed the committee that he had been in the appraisal and assessment practice in Alaska for nearly 20 years. Mr. Hearer said that respect for property owners has always been maintained. He noted that he had worked in this capacity in Kodiak, Kenai, and Anchorage. In all three municipalities, if no one is home a door hanger was left requesting contact from the property owner. Mr. Hearer echoed Mr. Van Sant's comments regarding the industry practice to not enter a premise without permission. REPRESENTATIVE MURKOWSKI asked if this legislation was necessary or helpful in light of the current industry practice. MR. HEARER said that initially he did not have a problem with HB 22 because it specified how the industry already interprets AS Section 29.45.130(b). Mr. Hearer expressed the need to clarify the definition of possession and permission. REPRESENTATIVE OGAN agreed with Co-Chairman Harris' characterization of HB 22 as a housekeeping measure. This legislation simply clarifies the existing unwritten policy of the assessors. Representative Ogan believed that the current statute violates the constitutional principle of right to privacy. REPRESENTATIVE OGAN recommended the following, page 1, line 10 insert "actual" before "possession" and on line 9, insert "written" before "permission". Representative Ogan further recommended including language that would "exempt buildings under construction and possession of a general contractor" which would allow assessors to enter building under construction without any impediment. In response to Co-Chairman Harris, Representative Ogan did not know exactly where to insert the language and thought it may be for the committee to discuss. Number 607 REPRESENTATIVE KOOKESH expressed concern with the procedure to attain written permission. Will a written form be required? If written permission is required a burden is created for someone. REPRESENTATIVE OGAN foresaw an assessor getting a form initialed to enter a dwelling before entering. Placing this in statute could expose municipalities to liability if there is a violation with civil action. This type of procedure is required of Fish & Wildlife Protection officers for search and seizures. REPRESENTATIVE DYSON asked if HB 22 had a Judiciary referral. REPRESENTATIVE OGAN replied no. REPRESENTATIVE DYSON said that it seemed the committee could pass HB 22 with individual recommendations, deal with changes in the committee, or hold the bill to Thursday when the sponsor could come back with the changes incorporated in a committee substitute. He inquired as to the preference of Representative Ogan. REPRESENTATIVE OGAN said that he would be happy to accommodate the Chair's wishes. REPRESENTATIVE JOULE asked if HB 22 would necessitate the property owner physically getting up and answering the door. Representative Joule said that he typically says, "Come in." REPRESENTATIVE OGAN said that if he were the assessor, he would open the door and identify himself as the state assessor and ask if the owner would still allow him to enter the premise. Number 657 CO-CHAIRMAN HARRIS said that HB 22 would be held to Thursday's meeting so that Representative Ogan could work on this. Co-Chairman Harris asked Mr. Van Sant if he believed that this would be an unfair burden on the state or local assessor. MR. VAN SANT believed that the written permission would be burdensome, seem to inhibit the process and perhaps intimidate people. Assessors are not searching for anything. To obtain permission is not a problem and is already practiced. Mr. Van Sant believed that written permission could result in inequities in assessments. With regard to mobile homes, mobile homes are considered personal property by statute unless classified otherwise by ordinance. Mr. Van Sant said that he would be happy to work with the sponsor. CO-CHAIRMAN HALCRO agreed with the intent of the legislation, but written permission would seem problematic. REPRESENTATIVE OGAN inquired as to if the assessors had an opinion on including the exemption for construction sites. MR. HEARER did not see a problem with inclusion of that exemption. Mr. Hearer also offered to work with the sponsor.