Legislature(2015 - 2016)BELTZ 105 (TSBldg)

04/07/2015 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
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= bill was previously heard/scheduled
Heard & Held
<Pending Referral>
<Above Item Removed from Agenda>
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 146-MUNICIPAL TAX EXEMPTION                                                                             
3:34:23 PM                                                                                                                    
CHAIR BISHOP announced the consideration of HB 146. [CSHB
146(CRA) was before the committee.]                                                                                             
3:34:33 PM                                                                                                                    
TERRY HARVEY, Staff, Representative Cathy Munoz, Alaska State                                                                   
Legislature, Juneau, Alaska, explained that HB 146 will provide                                                                 
a tax exemption incentive for housing as follows:                                                                               
     HB 146  will give  municipalities around the  state the                                                                    
     option  to provide  an incentive  to  develop land  for                                                                    
     housing and it does so  by offering an exemption for up                                                                    
     to  five   years,  a   property  tax   increase  that's                                                                    
     associated with  subsidizing a  piece of  property, and                                                                    
     it  would  need  to  be  three  or  more  parcels.  The                                                                    
     emphasis   on  this   bill  is   it  is   optional  for                                                                    
     municipalities to  decide if  this could  be a  tool to                                                                    
     help spur housing development.                                                                                             
MR. HARVEY specified the issues in Juneau as follows:                                                                           
     In our own  community of Juneau, we've  had issues with                                                                    
     limited  housing   availability  and  this   issue  was                                                                    
     brought to  us first  by the Juneau  Affordable Housing                                                                    
     Commission.  We had  encouragement  from  the City  and                                                                    
     Borough of Juneau Assembly and  we know there are other                                                                    
     areas  in the  state that  are interested  in having  a                                                                    
     local choice option like this.                                                                                             
     Typically when  a piece of property  is subdivided, you                                                                    
     get permitted and a property  tax will increase as soon                                                                    
     as all  of the paperwork  is filed. This  statute would                                                                    
     allow,  if adopted  by a  local  community, to  suspend                                                                    
     that additional increase in a  property tax value while                                                                    
     the  development was  underway  for up  to five  years.                                                                    
     There  is  flexibility  in  the   statute  to  allow  a                                                                    
     community to  exempt all or  a portion of  the increase                                                                    
     in property tax value.                                                                                                     
3:36:53 PM                                                                                                                    
MR. HARVEY  summarized that the intent  of the bill is  to create                                                               
an incentive to develop properties to get housing on the market.                                                                
3:38:11 PM                                                                                                                    
At ease.                                                                                                                        
3:38:46 PM                                                                                                                    
SENATOR STEDMAN moved  to adopt [Senate CS for  CSHB 146, labeled                                                               
29-LS0048\H, as the working document.]                                                                                          
CHAIR BISHOP announced that without  objection version H has been                                                               
3:39:52 PM                                                                                                                    
EDRA  MORLEDGE,   Staff,  Senator   Kevin  Meyer,   Alaska  State                                                               
Legislature,  Juneau, Alaska,  explained that  the Senate  CS for                                                               
CSHB 146 includes  SB 87, a bill that was  heard in the committee                                                               
the previous week. She detailed that  the CS will do three things                                                               
as follows:                                                                                                                     
        1. Fixes the omission of the word "not," which is a                                                                     
          technical change on page 2, line 27.                                                                                  
        2. Allows the eight unit minimum to be either at the                                                                    
          time of application or at the time of the                                                                             
          completion of the project.                                                                                            
        3. Allows multiple properties in one deteriorated                                                                       
          area of a municipality to be considered                                                                               
          collectively for that eight unit minimum.                                                                             
3:41:06 PM                                                                                                                    
MERRILL  SANFORD,  Mayor, City  and  Borough  of Juneau,  Juneau,                                                               
Alaska,  explained that  the concept  was brought  up within  the                                                               
past two years  as a tax deferral and no  one had shown interest.                                                               
He said  local building and  construction committees  in addition                                                               
to  the Juneau  Affordable  Housing [Commission]  asked that  the                                                               
incentive be  a tax exemption.  He specified that the  bill gives                                                               
local  community governments  the option  to adopt  the exemption                                                               
and  provide  another  tool to  address  housing  shortages  that                                                               
almost all communities face.                                                                                                    
3:42:47 PM                                                                                                                    
NORTON  GREGORY,  Chair,  Juneau  Affordable  Housing  Commission                                                               
(JAHC),  Juneau,  Alaska,  noted  that  he  also  serves  on  the                                                               
management   team   for   the  Tlingit-Haida   Regional   Housing                                                               
Authority,  the   largest  provider  of  affordable   housing  in                                                               
Southeast Alaska.  He stated  that JAHC  supports HB  146 because                                                               
there  is  a disincentive  for  property  owners that  own  large                                                               
parcels  to  subdivide.  He   explained  the  disincentive  under                                                               
current state statute to subdivide as follows:                                                                                  
     With  the  current mill  rate  in  Juneau, if  somebody                                                                    
     subdivided their property,  let's say un-subdivided for                                                                    
     that chunk  of property, that  tax would be  $1,000 per                                                                    
     year; once they subdivide  that property, the mill rate                                                                    
     changes  and  all  of  a  sudden  that  same  chunk  of                                                                    
     property ends up being taxed at $12,000.                                                                                   
He said current  state statute allows for  property tax deferral,                                                               
but JAHC  would like  to see property  tax abatement  until there                                                               
has  actually  been an  improvement  made  on the  property  that                                                               
ultimately generates  a higher  tax rate.  He summarized  that HB
146 is  important for providing affordable  housing and community                                                               
3:44:23 PM                                                                                                                    
SHIRLEY  MARQUARDT, Mayor,  City of  Unalaska, Unalaska,  Alaska,                                                               
said HB 146 is good  legislation. She remarked that landowners do                                                               
not have  a very good  incentive to subdivide their  large pieces                                                               
of  property due  to higher  value taxes.  She said  HB 146  will                                                               
provide Unalaska with  a valuable tool that  will bring immediate                                                               
help in bringing down the cost of building.                                                                                     
3:46:24 PM                                                                                                                    
CHUCK HOMAN,  President, Alaska  State Home  Building Association                                                               
(ASHBA),  Eagle River,  Alaska, declared  that ASHBA  supports HB
146  as a  way for  municipal governments  to have  an option  to                                                               
provide tax incentives to help in meeting their housing needs.                                                                  
3:47:14 PM                                                                                                                    
KATHIE  WASSERMAN, Executive  Director,  Alaska Municipal  League                                                               
(AML), Juneau,  Alaska, declared that  AML supports HB 146  as an                                                               
opt-in tool to help municipalities develop land.                                                                                
3:48:16 PM                                                                                                                    
DAVE HANNA,  General Contractor, Juneau,  Alaska, said HB  146 is                                                               
enabling  legislation that  is not  mandatory.  He asserted  that                                                               
progressive  communities will  embrace HB  146. He  remarked that                                                               
the current  tax law is  a disincentive  and is horrible.  He set                                                               
forth  that   a  property  owner's   raw  land   for  subdivision                                                               
development  that is  taxed $6,000  to  $10,000 a  year would  be                                                               
taxed  at $150,000  per  year before  a shovel  full  of dirt  is                                                               
turned.  He  summarized  that municipalities  will  collect  more                                                               
taxes from bringing developed properties online.                                                                                
3:50:30 PM                                                                                                                    
SENATOR  STEDMAN  asked  what Juneau's  high-low  range  was  for                                                               
building rate values and its millage rate.                                                                                      
MR. HANNA  answered that Juneau's millage  rate was approximately                                                               
12. He  explained that a  non-waterfront building lot  will range                                                               
from $100,000 to $125,000.                                                                                                      
3:51:18 PM                                                                                                                    
RUSS  MCDOUGAL, Member,  Alaska  State Homebuilders  Association,                                                               
Juneau, Alaska,  noted that  he serves  on the  Juneau Affordable                                                               
Housing Commission (JAHC) as well.  He remarked that Juneau needs                                                               
more housing.  He noted  that he  presented to  JAHC the  need to                                                               
reintroduce tax  incentive legislation  and let the  Alaska State                                                               
Home  Builders  sign-on  as the  sponsor  through  Representative                                                               
Munoz. He asserted that HB 146 is a win-win situation.                                                                          
3:52:49 PM                                                                                                                    
CHAIR BISHOP  closed public testimony  and announced that  HB 146                                                               
will be set aside.                                                                                                              

Document Name Date/Time Subjects
CSHB 75 Cole Legal Memo.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Fiscal Note.PDF SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal memo Administrative Procedures Act.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal Memo Cap on Plants.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal Memo Conceptual Amendment Marijuana Clubs.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal Memo Criminal Penalties.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal Memo Equal Protection.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Legal Memo Revocation of Marijuana Establishment's Registration.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Supporting, AML.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Supporting, MOA.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Supporting, MPP.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 VersionUA.PDF SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB75 Explanation of Changes, U.Aversion.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB75(JUD)am Sectional Analysis versionUA.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
HB 146 Explanation of Changes made in (H)CRA.doc SCRA 4/7/2015 3:30:00 PM
HB 146
HB 146 Fiscal Note.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
HB 146 Leg Research.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
HB 146 Sectional.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
HB 146 Sponsor Statement.doc SCRA 4/7/2015 3:30:00 PM
HB 146
HB 146 Support Documents.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
CSHB 75 Sponsor Statement versionU A.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 146 version H.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
CSHB 146 version H Resolution.pdf SCRA 4/7/2015 3:30:00 PM
HB 146
CSHB 75 Testimony Brooks Chandler.pdf SCRA 4/7/2015 3:30:00 PM
HB 75
CSHB 75 Testimony Hardenbrook FNSB.pdf SCRA 4/7/2015 3:30:00 PM
HB 75