HOUSE BILL NO. 170 "An Act relating to municipal property tax exemptions on residences of certain volunteer emergency services personnel and the widows and widowers of volunteer emergency services personnel; and providing for an effective date." 1:45:57 PM Vice-chair Fairclough MOVED to ADOPT proposed committee substitute for HB 170, Work Draft 27-LS0562\T (Bullard, 3/12/12). There being NO OBJECTION, it was so ordered. MICHAEL PASCHALL, STAFF, REPRESENTATIVE ERIC FEIGE, disclosed the Representative Feige was the Chief of the Chickaloon Fire Department, and that Mr. Paschall was Assistant Chief of the Rural Deltana Fire Department. He discussed HB 170. He stated that the bill provided incentives for recruitment and retention of volunteer firefighters and emergency services volunteers. Co-Chair Stoltze asked Mr. Paschall to discuss his interaction with Representative Wilson. Mr. Paschall explained that there were two significant issues that were addressed in the last hearing on the bill. He looked at page 1, lines 12 and 13. There was an exemption added for taxes for service areas. Also, it was unclear whether or not the exemption, if it was enacted by a municipality, could be for less than $150,000. Therefore, the language "up to $150,000" was added. Co-Chair Stoltze noted there had been questions about policy, but that significant technical issues were addressed in the work draft. Representative Gara wondered where the municipal option was located in the work draft. Mr. Paschall pointed to page 1, line 12, "may by ordinance be exempted." 1:49:10 PM Representative Gara wondered why the municipalities were not given the opportunity grant exemptions to firefighters who were not volunteers. Mr. Paschall responded that the purpose of the bill was to provide an incentive that might entice someone to become a volunteer firefighter, emergency services worker, or to retain an individual in either one of those positions. Representative Gara wondered whether there was a shortage of volunteer firefighters. Mr. Paschall responded in the affirmative. He elaborated that almost any fire chief in the state would agree with him. He stated that there may be situations and locations where there was not a shortage of volunteer emergency workers. He pointed out that his department's volunteer membership was at the highest it had ever been, but when his department responds to a large fire, they were short-handed. Representative Gara felt that municipalities should also be given the opportunity to incentivize paid firefighters. Mr. Paschall replied that the intention of the bill was to recruit volunteer firefighters, and did not object to the option of including paid firefighters. Although, many paid departments utilized a recall system in order to recall paid firefighters in the event of a large fire. 1:53:53 PM Vice-chair Fairclough noted that she had two sons that were volunteer firefighters. She queried the estimated number of volunteer firefighters in the state. Mr. Paschall responded that the total number of volunteer firefighters in the state was 4,000, which included volunteer emergency medical services (EMS) providers that were part of a fire department. He stressed that the records that were kept for the fire departments included EMS volunteers. There were approximately 250 fire departments, and 78 of those departments were in municipalities that levy a property tax. Vice-chair Fairclough asked how many departments were in the municipalities. Mr. Paschall answered that there were 78 municipal departments. Vice-chair Fairclough queried the cost that would be subtracted from the tax rolls. Mr. Paschall replied that that information was not calculated for every department in the state, because of the time associated with that research. He stated that Legislative Research was contacted for some information. However, the process to determine the cost subtracted from the tax rolls would require examining membership of each department and then digging through the tax rolls for each municipality for every individual. Even with that kind of research, the accuracy was not trusted because of the name that the property ownership is often listed under is often a spouse or other family member. He stated that there was an analysis run in Girdwood, and offered to provide that information. 1:56:50 PM AT EASE 1:59:43 PM RECONVENED Vice-chair Fairclough queried the tax consequence of the bill. She remarked that many middle class and middle aged people were caught in the "crossfire" related to tax exemptions, because that set of people were often dealt a new tax burden of tax exemptions. She pointed out that 300,000 people in Anchorage may pick up the tax burden of this proposed property tax exemption. She agreed that there needed to be more volunteer firefighters in the state, but remarked that the tax burden placed on municipalities seemed heavy. Representative Neuman looked at page 3, line 8. He expressed concern regarding the payment of the fire response pertaining to a fire that may take place over multiple municipalities or boroughs. He specifically wondered if the cost would be covered by the municipality at a local controlled level. Mr. Paschall asked for a restating of Representative Neuman's question. Co-Chair Stoltze clarified that the question was related to where the fire would be assessed: the fire service area, the road service area, or the general taxation. Mr. Paschall responded that the assessment would be on the general taxation of the municipality. Co-Chair Stoltze remarked that a municipality could, if it had a fire service area, make it a policy that a volunteer firefighter not be assessed up to $20,000 of the evaluation of the fire service cost. 2:06:32 PM Representative Wilson communicated that Fairbanks had a $10,000 exemption for volunteer firefighters. That definition of "volunteer firefighter" was provided by the department fire chief. The fire chief that she spoke to expressed discomfort, because he was made to determine the difference between a "true volunteer" and "just volunteer." Mr. Paschall responded that one standard across the state might make it more difficult for rural areas to meet the same standards as urban areas. Representative Gara surmised, from Representative Wilson's comments, that there must be an allowance in state law that already granted an exemption. He wondered how the bill changed the current law. Vice-chair Fairclough read from state statute 18.15.250 "volunteer means that a person is an active volunteer of a first responder service, a rescue service, an ambulance service of a fire department that provides emergency medical or rescue services as part of its duties." There was no time requirement or additional requirement; the person only had to be an active member. Mr. Paschall responded to a question from Representative Gara. He stated that there was a provision to allow municipalities to exempt property tax up to either $10,000 or $20,000 under certain broad criteria. 2:10:20 PM Vice-chair Fairclough remarked that the proposal was "stackable" on other exemptions. Representative Doogan felt that the problem with the bill was the disallowance of inclusion of paid firefighters. He remarked that once certain people were given financial exemptions, the question was skewed regarding who would be considered "volunteer." He stressed that once one person applied for the exemption; everyone would want to apply for the exemption. He felt that a determination of the full cost of the proposal should be made. He was uncomfortable with the bill as it was currently written. Co-Chair Stoltze did not believe the cost could be determined, because of the unknown pertaining to options of the local governments. Representative Wilson moved to amend the bill, page 1, line 13 insert the word "road" before the words "service areas." Co-Chair Stoltze OBJECTED for the purpose discussion. He explained that there were some areas in the state that were considered unified road service areas. Co-chair Stoltze removed his objection. There being NO further OBJECTION, it was so ordered. Conceptual amendment 1 was ADOPTED. Co-Chair Thomas told a personal story. He stated that he spent four years on the borough assembly at a time when the state was not paying the unfunded mandate. The borough assemble sued the State of Alaska for not funding the mandate. He furthered that during his first year in the legislature, he proposed a bill that allowed the municipalities to opt out in five years. He liked the idea of exempting volunteers. He wondered if the volunteers received any workers compensation if they were injured during an emergency response. 2:17:31 PM Mr. Paschall explained that workman's compensation in most cases was provided by the volunteer departments. Co-Chair Thomas had spoken to people from Unalaska, who expressed concern regarding the tax burden placed on them. Representative Neuman discussed complaints related to lack of insurance. He hoped that the bill included the ability for local control related to how benefits were dispersed. He believed that the term "volunteer" was too broad. He supported the legislation, but hoped for some expansion regarding insurance and how a volunteer was defined. Vice-chair Fairclough clarified that one of her boys was in college and one was a volunteer firefighter. She pointed out that volunteers were currently part of the training ground for joining the firefighter's union setting. She wondered if there would be less benefit by becoming a unionized firefighter. Co-Chair Stoltze WITHDREW objection to. There being NO further OBJECTION, Work Draft 27-LS0562\T was ADOPTED as amended. Co-Chair Stoltze discussed the zero fiscal note from the Department of Commerce, Community and Economic Development. Co-Chair Thomas MOVED to report CSHB 170(FIN) out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 170(FIN) was REPORTED out of committee with "no recommendation" and with a new zero impact fiscal note from the Department of Commerce, Community and Economic Development. 2:24:03 PM AT EASE 2:26:38 PM RECONVENED