00                      CS FOR SENATE BILL NO. 161(CRA)                                                                    
01 "An Act relating to municipal taxation of farm land and farm structures; and providing                                  
02 for an effective date."                                                                                                 
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 29.45.050(t) is amended to read:                                                                 
05 (t)  A municipality may by ordinance [APPROVED BY THE VOTERS]                                                           
06 partially or totally exempt from taxation farm land and farm structures [A FARM                                     
07 STRUCTURE] used [EXCLUSIVELY] for farming activity, or purposes directly                                                
08 related to farming activity, if the farm land or farm structure meets the criteria set                          
09 out in this subsection. The farm land or farm structure must be [IS] owned or                                       
10 leased by a person that is actively engaged in farming, [AND] that normally                                     
11 produces at least $1,000 of agricultural products offered for sale, and that files an                               
12 Internal Revenue Service Schedule F (Form 1040) with the United States Internal                                     
13 Revenue Service. The farm land or farm [DERIVES AT LEAST 10 PERCENT OF                                              
14 THE PERSON'S YEARLY GROSS INCOME FROM FARMING ACTIVITY, AND                                                             
01       THE] structure must be [IS] used for                                                                          
02                 (1)  the growing, storage, or processing of grains, fruits, vegetables, or                              
03       other crops [INTENDED FOR HUMAN CONSUMPTION] and produced by the                                                  
04       owner's or lessee's farming activity;                                                                             
05                 (2)  the storage or processing of                                                                       
06                      (A)  feed for livestock;                                                                       
07                      (B)  livestock, poultry, or other animals used in the owner's or                               
08            lessee's farming activity;                                                                                   
09                      (C) [(B)]  milk or milk products produced by the owner's or                                    
10            lessee's farming activity; or                                                                                
11 (3)  sheltering, stabling, or milking the owner's or lessee's dairy                                             
12       animals, poultry, or livestock.                                                                               
13    * Sec. 2. AS 29.45.060(a) is amended to read:                                                                      
14 (a)  Farm use land, and structures on farm use land that are used for farm                                          
15 operations, included in a farm unit and not dedicated or being used for nonfarm                                     
16 purposes shall be assessed on the basis of full and true value for farm use and may not                                 
17 be assessed as if subdivided or used for some other nonfarm purpose. The assessor                                       
18 shall maintain records valuing the land for both full and true value and farm use value.                                
19 If the land is sold, leased, or otherwise disposed of for uses incompatible with farm                                   
20 use or converted to a use incompatible with farm use by the owner, the owner is liable                                  
21 to pay an amount equal to the additional tax at the current mill levy together with eight                               
22 percent interest for the preceding seven years, as though the land had not been                                         
23 assessed for farm use purposes. Payment by the owner shall be made to the state to the                                  
24 extent of its reimbursement for revenue loss under (d) of this section for the preceding                                
25       seven years. The balance of the payment shall be made to the municipality.                                        
26    * Sec. 3. AS 29.45.060(f) is amended to read:                                                                      
27 (f)  This section does not apply to land for which the owner has granted, and                                           
28 has outstanding, a lease or option to buy the surface rights. A property owner wishing                                  
29 to file for farm use classification having no history of farm-related income may submit                                 
30 a declaration of intent at the time of filing the application with the assessor setting out                             
31 the intended use of the land and certifying that the property owner intends to file                                 
01 an Internal Revenue Service Schedule F (Form 1040) with the United States                                           
02 Internal Revenue Service for the current tax year [THE ANTICIPATED                                                  
03 PERCENTAGE OF INCOME]. An applicant using this procedure shall file with the                                            
04 assessor on or before April 15 [FEBRUARY 1] of the following year a copy of the                             
05 Schedule F (Form 1040) the applicant files with the Internal Revenue Service                                        
06 [NOTARIZED STATEMENT OF THE PERCENTAGE OF GROSS INCOME                                                                  
07 ATTRIBUTABLE TO THE LAND]. Failure to make a [THE] filing required in this                                          
08       subsection forfeits the exemption.                                                                                
09    * Sec. 4. AS 29.45.060(g) is amended to read:                                                                      
10            (g)  In this section,                                                                                        
11 (1)  "farm use" means the use of land for the production of crops,                                              
12 fruits, or other agricultural products for human consumption or for the                                             
13 sustenance or grazing of livestock if the land produces at least $1,000 of                                          
14 agricultural products during the tax year and those products are offered for sale,                                  
15 or the land would normally produce at least $1,000 of agricultural products                                         
16 offered for sale during the tax year, and the owner or lessee of the land has filed                                 
17 an Internal Revenue Service Schedule F (Form 1040) with the United States                                           
18       Internal Revenue Service;                                                                                     
19 (2)  "livestock" includes cattle, hogs, sheep, goats, chickens,                                                     
20 turkeys, pigeons, and other poultry raised to provide meat or other products for                                    
21 human consumption [PROFIT FOR RAISING AND HARVESTING CROPS, FOR                                                     
22 THE FEEDING, BREEDING, AND MANAGEMENT OF LIVESTOCK, FOR                                                                 
23 DAIRYING, OR ANOTHER AGRICULTURAL USE, OR ANY COMBINATION                                                               
24 OF THESE. TO BE FARM USE LAND, THE OWNER OR LESSEE MUST BE                                                              
25 ACTIVELY ENGAGED IN FARMING THE LAND, AND DERIVE AT LEAST 10                                                            
26       PERCENT OF YEARLY GROSS INCOME FROM THE LAND].                                                                    
27    * Sec. 5. AS 29.45.060(c) is repealed.                                                                             
28    * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).