00                            HOUSE BILL NO. 411                                                                          
01 "An Act relating to municipal tax exemptions and deferrals on economic development                                      
02 property."                                                                                                              
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 29.45.050(m) is amended to read:                                                                     
05 (m)  A municipality may by ordinance partially or totally exempt all or some                                            
06 types of economic development property from taxation for a designated period. Except                                    
07 as otherwise provided by an ordinance enacted by the municipality before January 1,                                     
08 2017, a municipality that is a school district may only exempt all or a portion of the                                  
09 amount of taxes that exceeds the amount levied on other property for the school                                         
10 district's required local contribution under AS 14.17.410(b)(2). A municipality may by                                  
11 ordinance permit deferral of payment of taxes on all or some types of economic                                          
12 development property for a designated period. A municipality may [NOT] apply an                                         
13 exemption or deferral under this subsection to taxes levied for special services in a                                   
14 service area that is supervised by a service area board under AS 29.35.460 unless the                               

01 board objects to the exemption or deferral by resolution adopted not later than                                       
02 30 days after the effective date of the municipal ordinance enacting the tax                                          
03 exemption or deferral. A municipality may adopt an ordinance under this subsection                                    
04 only if, before it is adopted, copies of the proposed ordinance made available at a                                     
05 public hearing on it contain written notice that the ordinance, if adopted, may be                                      
06 repealed by the voters through referendum. An ordinance adopted under this                                              
07 subsection must include specific eligibility requirements and require a written                                         
08 application for each exemption or deferral. In this subsection, "economic development                                   
09 property" means real or personal property, including developed property conveyed                                        
10       under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act),                                               
11                 (1)  to which one or more of the following apply:                                                       
12 (A)  the property has not previously been taxed as real or                                                              
13            personal property by the municipality;                                                                       
14                      (B)  the property is used in a trade or business in a way that                                     
15                           (i)  creates employment in the municipality;                                                  
16 (ii)  generates sales outside of the municipality of goods                                                              
17                 or services produced in the municipality; or                                                            
18 (iii)  materially reduces the importation of goods or                                                                   
19                 services from outside the municipality;                                                                 
20 (C)  an exemption or deferral on the property enables a                                                                 
21            significant capital investment in physical infrastructure that                                               
22                           (i)  expands the tax base of the municipality; and                                            
23 (ii)  will generate property tax revenue after the                                                                      
24                 exemption expires; or                                                                                   
25 (2)  that has not been used in the same trade or business in another                                                    
26 municipality for at least six months before the application for deferral or exemption is                                
27 filed; this paragraph does not apply if the property was used in the same trade or                                      
28 business in an area that has been annexed to the municipality within six months before                                  
29 the application for deferral or exemption is filed; this paragraph does not apply to                                    
30       inventories.