Legislature(2009 - 2010)HOUSE FINANCE 519

04/03/2009 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 161 CERTIFICATES OF PARTICIPATION FOR SUBPORT TELECONFERENCED
Heard & Held
+= HB 121 MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT TELECONFERENCED
Moved CSHB 121(FIN) Out of Committee
HOUSE BILL NO. 121                                                                                                            
                                                                                                                                
     "An Act relating to a municipal property tax credit for                                                                    
    an improvement that aids in improving air quality."                                                                         
                                                                                                                                
Vice-Chair  Thomas  MOVED  to  ADOPT CSHB  121,  labeled  26-                                                                   
LS0540\P, Cook, 4/2/09.                                                                                                         
                                                                                                                                
Co-Chair Hawker OBJECTED.                                                                                                       
                                                                                                                                
BEN MULLIGAN,  STAFF, CO-CHAIR BILL STOLTZE,  explained three                                                                   
changes in the new CS.  The first  change is on page 1, lines                                                                   
5-7,  and stipulates  that the  air  quality improvement  tax                                                                   
credit only  applies to a  municipality that has  air quality                                                                   
issues with  fine particles  that are less  than or  equal to                                                                   
2.5  micrometers.   The second  change is  that language  was                                                                   
removed that set  guidelines for how the  municipality should                                                                   
award the tax credits.   The third change occurs  on line 13,                                                                   
and adds a sunset clause on January 1, 2016.                                                                                    
                                                                                                                                
Co-Chair  Hawker agreed  with the second  change, taking  out                                                                   
guidelines because  it gives municipalities wide  latitude to                                                                   
make their  own determination  as to how  they might  want to                                                                   
structure  such a  program.   He  requested more  information                                                                   
about the repeal.                                                                                                               
                                                                                                                                
Mr.  Mulligan related  that it  is a  pilot project.   If  it                                                                   
works, the legislature can extend or modify it.                                                                                 
                                                                                                                                
2:52:33 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  spoke to the  first change, which  responded                                                                   
to his and Representative Stoltz's  concern that the bill was                                                                   
designed to target Fairbanks and  Juneau, not Anchorage.  The                                                                   
broadness  of  the language  also  included Anchorage.    The                                                                   
intent of the  bill was to benefit only the  two communities.                                                                   
The  change   would  make   Anchorage  ineligible   for  this                                                                   
legislation.                                                                                                                    
                                                                                                                                
2:54:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker WITHDREW his OBJECTION  to adopting CSSB 121.                                                                   
There being NO OBJECTION, CSSB 121 was adopted.                                                                                 
                                                                                                                                
Representative  Gara  maintained  that  the  bill  gives  the                                                                   
municipalities an  option, not a mandate.  It  is giving only                                                                   
those municipalities  that are violating federal  air quality                                                                   
standards  the  ability   to  give  a  tax   break  at  their                                                                   
discretion  to folks who  use energy  efficient heating.   He                                                                   
thought that should be a local  decision.  The amendment says                                                                   
that  any community  that wants  to give  their taxpayers  an                                                                   
incentive  to use energy  efficient heating  could.   It does                                                                   
not impose a mandate, it gives  discretion to municipalities,                                                                   
and it  is a policy statement.   He did  not see it  having a                                                                   
high cost.                                                                                                                      
                                                                                                                                
2:58:00 PM                                                                                                                    
                                                                                                                                
Representative  Kelly reported  that Fairbanks  is in  a bind                                                                   
regarding  the 2.5 air  quality standard.   He was  concerned                                                                   
that the  amendment would  open the  bill to further  protest                                                                   
and would  kill it.   He was not  opposed to the  discussion.                                                                   
He gave examples of his support  of energy-saving devices and                                                                   
his concern  when the borough shuts  them down.  The  bill is                                                                   
important because it helps people  convert to modern devices.                                                                   
The bill also helps Fairbanks address pollution issues.                                                                         
                                                                                                                                
Co-Chair Hawker echoed Representative  Kelly's concerns.  The                                                                   
bill is very  specific and addresses a specific  problem.  He                                                                   
feared the unknown of the amendment.                                                                                            
                                                                                                                                
3:02:54 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to ADOPT Amendment 1:                                                                                 
                                                                                                                                
     Page 1, line 5, following "municipality":                                                                                  
     Delete "that includes within its boundaries an area                                                                        
     that fails to meet federal or state air quality                                                                            
     standards for fine particles that are less than or                                                                         
     equal to 2.5 micrometers in diameter"                                                                                      
                                                                                                                                
Co-Chair Hawker OBJECTED.                                                                                                       
                                                                                                                                
Representative Gara didn't see  a problem letting a community                                                                   
decide to  write its local  tax code.   He maintained  it was                                                                   
not a mandate.                                                                                                                  
                                                                                                                                
3:04:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas  gave examples from Haines  showing that it                                                                   
already has the ability to write  its local tax code.  He did                                                                   
not think the amendment was necessary.                                                                                          
                                                                                                                                
Representative  Crawford wondered  if  Fairbanks already  had                                                                   
the option to correct the problem.   He thought local control                                                                   
was good.                                                                                                                       
                                                                                                                                
Co-Chair Hawker agreed with Representative  Gara's wanting to                                                                   
provide discretion  to local communities.  He viewed  it as a                                                                   
creation  of different  classes  of taxpayers.    He did  not                                                                   
trust the municipalities to fairly reallocate tax zones.                                                                        
                                                                                                                                
3:07:30 PM                                                                                                                    
                                                                                                                                
Representative  Gara reported  that he  discovered that  some                                                                   
communities do not have this discretion.                                                                                        
                                                                                                                                
Co-Chair Hawker  stated that  the bill  was brought  forth by                                                                   
communities that saw a need.                                                                                                    
                                                                                                                                
Representative  Kelly  reported that  Fairbanks  does have  a                                                                   
problem.   He  gave as  an example  the  Senior Exemption  on                                                                   
property tax.  He maintained that the bill was necessary.                                                                       
                                                                                                                                
Representative  Crawford  asked  how Haines  could  grant  an                                                                   
exemption from the sales tax.   Representative Kelly said the                                                                   
bill is  relative to property tax,  not to sales tax  and the                                                                   
exemption must be approved by the state.                                                                                        
                                                                                                                                
3:10:47 PM                                                                                                                    
                                                                                                                                
Representative  Crawford suggested  rebating  the sales  tax.                                                                   
Representative Kelly said they do not have a sales tax.                                                                         
                                                                                                                                
Co-Chair Hawker MAINTAINED his objection.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Crawford, Gara                                                                                                   
                                                                                                                                
OPPOSED:       Thomas, Austerman, Fairclough, Joule, Kelly,                                                                     
               Hawker                                                                                                           
                                                                                                                                
The MOTION FAILED (2-6).                                                                                                        
                                                                                                                                
3:14:11 PM                                                                                                                    
                                                                                                                                
Representative Kelly  MOVED to ADOPT Conceptual  Amendment 2,                                                                   
to change 2.5 "micrometers" to "microns" on line 7.                                                                             
                                                                                                                                
Co-Chair Hawker OBJECTED.                                                                                                       
                                                                                                                                
Representative Kelly noted the  change was on page 1, line 7.                                                                   
                                                                                                                                
Co-Chair Hawker MAINTAINED his objection.                                                                                       
                                                                                                                                
KAREN  LIDSTER, STAFF,  REPRESENTATIVE  JOHN COGHILL,  quoted                                                                   
the Department  of Environmental Conservation  and maintained                                                                   
that  the correct  term is  "micrometers".   Co-Chair  Hawker                                                                   
asked  if  the  sponsor  prefers  the  bill  to  reflect  the                                                                   
language of  the federal EPA  designation.  Ms.  Lidster said                                                                   
yes.                                                                                                                            
                                                                                                                                
3:17:28 PM                                                                                                                    
                                                                                                                                
Representative Kelly  argued that it should say  microns.  He                                                                   
suggested  holding  the bill  and  asking the  Department  of                                                                   
Environmental  Conservation  for   an  opinion,  although  he                                                                   
preferred to move the bill.                                                                                                     
                                                                                                                                
Representative Kelly WITHDREW Conceptual Amendment 2.                                                                           
                                                                                                                                
3:19:13 PM                                                                                                                    
                                                                                                                                
Representative  Kelly MOVED  to  REPORT CSHB  121 (FIN)  with                                                                   
individual recommendations and  the accompanying fiscal note.                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB  121 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with zero  fiscal note  #1 by  the                                                                   
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                

Document Name Date/Time Subjects
CSHB 121 Amendment 1.doc HFIN 4/3/2009 1:30:00 PM
HB 121