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SCS CSHB 264(FIN): "An Act relating to municipal taxation of interests in property owned by the Alaska Industrial Development and Export Authority and to the effect of the tax status of that property on the local contribution for public education; allowing a deferral of municipal property taxes on the increase in the value of real property attributable to subdivision of that property; relating to municipal taxation of oil and gas production and pipeline property; and providing for an effective date."

00                SENATE CS FOR CS FOR HOUSE BILL NO. 264(FIN)                                                             
01 "An Act relating to municipal taxation of interests in property owned by the Alaska                                     
02 Industrial Development and Export Authority and to the effect of the tax status of that                                 
03 property on the local contribution for public education; allowing a deferral of municipal                               
04 property taxes on the increase in the value of real property attributable to subdivision of                             
05 that property; relating to municipal taxation of oil and gas production and pipeline                                    
06 property; and providing for an effective date."                                                                         
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. AS 14.17.410(b) is amended to read:                                                                   
09            (b)  Public school funding consists of state aid, a required local contribution,                             
10       and eligible federal impact aid determined as follows:                                                            
11                 (1)  state aid equals basic need minus a required local contribution and                                
12       90 percent of eligible federal impact aid for that fiscal year; basic need equals the sum                         
13       obtained under (D) of this paragraph, multiplied by the base student allocation set out                           
14       in AS 14.17.470; district adjusted ADM is calculated as follows:                                                  
01                      (A)  the ADM of each school in the district is calculated by                                       
02            applying the school size factor to the student count as set out in AS 14.17.450;                             
03                      (B)  the number obtained under (A) of this paragraph is                                            
04            multiplied by the district cost factor described in AS 14.17.460;                                            
05                      (C)  the ADMs of each school in a district, as adjusted                                            
06            according to (A) and (B) of this paragraph, are added; the sum is then                                       
07            multiplied by the special needs factor set out in AS 14.17.420(a)(1) and the                                 
08            high school vocational education factor set out in AS 14.17.420(a)(3);                                       
09                      (D)  the number obtained for intensive services under                                              
10            AS 14.17.420(a)(2) and the number obtained for correspondence study under                                    
11            AS 14.17.430 are added to the number obtained under (C) of this paragraph;                                   
12                      (E)  notwithstanding (A) - (C) of this paragraph, if a school                                      
13            district's ADM adjusted for school size under (A) of this paragraph decreases                                
14            by five percent or more from one fiscal year to the next fiscal year, the school                             
15            district may use the last fiscal year before the decrease as a base fiscal year to                           
16            offset the decrease, according to the following method:                                                      
17                           (i)  for the first fiscal year after the base fiscal year                                     
18                 determined under this subparagraph, the school district's ADM adjusted                                  
19                 for school size determined under (A) of this paragraph is calculated as                                 
20                 the district's ADM adjusted for school size, plus 75 percent of the                                     
21                 difference in the district's ADM adjusted for school size between the                                   
22                 base fiscal year and the first fiscal year after the base fiscal year;                                  
23                           (ii)  for the second fiscal year after the base fiscal year                                   
24                 determined under this subparagraph, the school district's ADM adjusted                                  
25                 for school size determined under (A) of this paragraph is calculated as                                 
26                 the district's ADM adjusted for school size, plus 50 percent of the                                     
27                 difference in the district's ADM adjusted for school size between the                                   
28                 base fiscal year and the second fiscal year after the base fiscal year;                                 
29                           (iii)  for the third fiscal year after the base fiscal year                                   
30                 determined under this subparagraph, the school district's ADM adjusted                                  
31                 for school size determined under (A) of this paragraph is calculated as                                 
01                 the district's ADM adjusted for school size, plus 25 percent of the                                     
02                 difference in the district's ADM adjusted for school size between the                                   
03                 base fiscal year and the third fiscal year after the base fiscal year;                                  
04                      (F)  the method established in (E) of this paragraph is available                                  
05            to a school district for the three fiscal years following the base fiscal year                               
06            determined under (E) of this paragraph only if the district's ADM adjusted for                               
07            school size determined under (A) of this paragraph for each fiscal year is less                              
08            than the district's ADM adjusted for school size in the base fiscal year;                                    
09                      (G)  the method established in (E) of this paragraph does not                                      
10            apply to a decrease in the district's ADM adjusted for school size resulting                                 
11            from a loss of enrollment that occurs as a result of a boundary change under                                 
12            AS 29;                                                                                                       
13                 (2)  the required local contribution of a city or borough school district is                            
14       the equivalent of a four mill tax levy on the full and true value of the taxable real and                         
15       personal property in the district, excluding property owned by the Alaska                                     
16       Industrial Development and Export Authority that is exempt from city or                                       
17       borough tax, as of January 1 of the second preceding fiscal year, as determined by the                        
18       Department of Commerce, Community, and Economic Development under                                                 
19       AS 14.17.510 and AS 29.45.110, not to exceed 45 percent of a district's basic need for                            
20       the preceding fiscal year as determined under (1) of this subsection.                                             
21    * Sec. 2. AS 14.17.410(c) is amended to read:                                                                      
22            (c)  In addition to the local contribution required under (b)(2) of this section, a                          
23       city or borough school district in a fiscal year may make a local contribution of not                             
24       more than the greater of                                                                                          
25                 (1)  the equivalent of a two mill tax levy on the full and true value of                                
26       the taxable real and personal property in the district, excluding property owned by                           
27       the Alaska Industrial Development and Export Authority that is exempt from                                    
28       city or borough tax, as of January 1 of the second preceding fiscal year, as                                  
29       determined by the Department of Commerce, Community, and Economic                                                 
30       Development under AS 14.17.510 and AS 29.45.110; or                                                               
31                 (2)  23 percent of the district's basic need for the fiscal year under                                  
01       (b)(1) of this section.                                                                                           
02    * Sec. 3. AS 14.17.490(b) is amended to read:                                                                      
03            (b)  A city or borough school district is not eligible for additional funding                                
04       authorized under (a) of this section unless, during the fiscal year in which the district                         
05       receives funding under (a) of this section, the district received a local contribution                            
06       equal to at least the equivalent of a four mill tax levy on the full and true value of the                        
07       taxable real and personal property in the district, excluding property owned by the                           
08       Alaska Industrial Development and Export Authority that is exempt from city or                                
09       borough tax, as of January 1 of the second preceding fiscal year as determined by the                         
10       Department of Commerce, Community, and Economic Development under                                                 
11       AS 14.17.510 and AS 29.45.110.                                                                                    
12    * Sec. 4. AS 29.45 is amended by adding a new section to read:                                                     
13            Sec. 29.45.051. Tax deferral for certain subdivided property. (a) A                                        
14       municipality may by ordinance permit deferral of payment of taxes on all or a portion                             
15       of the increase in assessed value directly attributable to                                                        
16                 (1)  the subdivision of a single parcel of property into three or more                                  
17       parcels; and                                                                                                      
18                 (2)  any improvements made to the property necessitated by its                                          
19       subdivision.                                                                                                      
20            (b)  A deferral from taxation allowed under (a) of this section shall be limited                             
21       to a maximum period of five years. A municipality may by ordinance provide for the                                
22       deferral of payment of taxes permitted under (a) of this section to be of a shorter                               
23       duration.                                                                                                         
24            (c)  Subject to (b) of this section, a municipality may also by ordinance provide                            
25       that                                                                                                              
26                 (1)  the deferral is terminated when                                                                    
27                      (A)  a lot in the subdivision is sold; or                                                          
28                      (B)  a residential or commercial building is built on a lot in the                                 
29            subdivision; or                                                                                              
30                 (2)  the deferral continues for the unsold lots in the subdivision after                                
31                      (A)  a lot in the subdivision is sold; or                                                          
01                      (B)  a residential or commercial building is constructed on a lot                                  
02            in the subdivision.                                                                                          
03    * Sec. 5. AS 29.45.080(a) is amended to read:                                                                      
04            (a)  A municipality may levy and collect taxes on the full and true value of                             
05       taxable property taxable under AS 43.56 as valued by the Department of Revenue                                
06       [ONLY BY USING ONE OF THE METHODS SET OUT IN (b) OR (c) OF THIS                                                   
07       SECTION].                                                                                                         
08    * Sec. 6. AS 29.45.080(b), 29.45.080(c), 29.45.080(d), 29.45.080(e), 29.45.090(b),                                 
09 29.45.090(c), 29.45.090(d); and AS 43.56.010(c)  are repealed.                                                        
10    * Sec. 7. This Act takes effect July 1, 2012.