Legislature(2009 - 2010)BELTZ 105 (TSBldg)

02/18/2010 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 120(CRA) Out of Committee
Moved SB 232 Out of Committee
            SB 120-MUNICIPAL PROPERTY TAX EXEMPTION                                                                         
3:33:59 PM                                                                                                                    
VICE-CHAIR THOMAS announced  the first order of  business to come                                                               
before the committee to be SB  120. Senator Thomas, as sponsor of                                                               
SB 120,  handed the  gavel over  to Senator  French to  chair the                                                               
SENATOR MENARD  moved to adopt the  proposed committee substitute                                                               
to  SB 120,  labeled CSSB  120(CRA),  Version R,  as the  working                                                               
document.  There being no objection, the motion carried.                                                                        
SENATOR  THOMAS  said CSSB  120(CRA),  Version  R, increases  the                                                               
maximum optional  municipal property tax exemption  for a private                                                               
residence from $20,000  to $50,000. SB 120  originally proposed a                                                               
maximum of  $100,000 and this was  lowered to $50,000 on  page 1,                                                               
line 9. SB 120 does not  mandate any action by the municipalities                                                               
but allows  those which have  taxing authority to  increase their                                                               
residential property  tax exemptions. Currently, 14  boroughs and                                                               
12  cities with  a  combined population  of  about 590,000,  levy                                                               
property tax.                                                                                                                   
3:36:43 PM                                                                                                                    
SENATOR THOMAS said SB 120,  by allowing local control in setting                                                               
the  exemption   at  any  amount   up  to  $50,000,   would  give                                                               
municipalities  with a  large enough  population  the ability  to                                                               
relieve  the  tax burden  borne  by  homeowners. Local  ordinance                                                               
would then  require voter approval before  enactment. Legislation                                                               
in  2004 resulted  in the  implementation of  a $20,000  optional                                                               
exemption which has  been a valuable tool  for municipalities. He                                                               
urged the timely  passage of SB 120 as  municipalities attempt to                                                               
diversify their income  base and respond to the  needs of private                                                               
citizens struggling with today's rising costs.                                                                                  
SENATOR MENARD asked if SB  120 was being brought forward because                                                               
of rising energy costs.                                                                                                         
SENATOR THOMAS answered yes and  referred to Table 1 which showed                                                               
which  municipalities have  property  tax, sales  tax or  special                                                               
taxes. Currently,  only some municipalities have  taken advantage                                                               
of the allowable  exemption of up to $20,000 and  SB 120 does not                                                               
mean that all  municipalities will implement the  exemption up to                                                               
$50,000.  He  mentioned that an initiative had  also been started                                                               
to put an increased exemption before the voters.                                                                                
3:39:22 PM                                                                                                                    
SENATOR  FRENCH asked  if any  table showed  which municipalities                                                               
had taken advantage  of the municipal property  tax exemption and                                                               
how much they had exempted.                                                                                                     
SENATOR  THOMAS  referred  him   to  a  table  called  "Municipal                                                               
Residential Property Tax Exemptions Authorized."                                                                                
GRIER  HOPKINS,  staff  to  Senator  Thomas,  explained  that  30                                                               
municipalities assess property  tax but do not  use any exemption                                                               
and  6  municipalities  enacted   some  portion  of  the  $20,000                                                               
exemption:  Anchorage, Valdez,  Bristol Bay,  Fairbanks Northstar                                                               
Borough, Kenai Peninsula and the North Slope Borough.                                                                           
SENATOR  FRENCH  stated  that  some  municipalities  were  taking                                                               
advantage of  the law that  was put on the  books in 2004  and SB
120 would give them the opportunity to continue doing so.                                                                       
3:41:44 PM                                                                                                                    
SENATOR FRENCH closed public testimony.                                                                                         
SENATOR MENARD  said she thought SB  120 was an excellent  way to                                                               
allow the  different municipalities  and cities  to do  what they                                                               
want. She remembered  the past governor doing  away with property                                                               
taxes in  Wasilla because they were  so high and it  worked well.                                                               
She appreciated  that they were  "stepping this up a  little bit"                                                               
so it wouldn't have to go out as an initiative.                                                                                 
SENATOR MENARD moved to report  CSSB 120(CRA) from committee with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, the motion carried.                                                                                         
SENATOR FRENCH  noted that the  fiscal note  for the CS  might be                                                               
different than for SB 120.                                                                                                      

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