HB 185: "An Act relating to an exemption from municipal property taxes for certain primary residences; and providing for an effective date."

00HOUSE BILL NO. 185 01 "An Act relating to an exemption from municipal property taxes for certain 02 primary residences; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. FINDINGS. (a) The senior citizen disabled veteran property tax exemption 05 was enacted by the legislature in 1973. It exempted people over the age of 65 from paying 06 municipal property tax. In 1985, the program was extended to include disabled veterans with 07 a disability of 50 percent or more. The state was to reimburse municipalities for tax revenue 08 lost because of the exemption. The original cost of the program was $197,050. The cost of 09 the program in fiscal year 1995 was $16,800,000. The state reimbursed municipalities only 10 $1,500,000 for fiscal year 1995, an underfunding of $15,700,000. Since inception, there has 11 been a steady increase in the number of applicants. The last year the program was fully 12 funded, 1985, there were 5,418 taxpayers eligible. For fiscal year 1995, the number increased 13 to 12,197 applicants. The legislature finds that this program has become an unfunded mandate 14 passed on to the municipalities who have taken on the fiscal responsibility for this policy.

01 (b) Municipalities have identified the senior citizen disabled veterans property tax 02 exemption as the most problematic unfunded mandate placed on municipalities by the state. 03 The municipalities believe that municipal taxpayers should have the right to address their 04 needs in each community that currently pays the cost of the mandate and the senior citizens 05 and disabled veterans of each community will have ample opportunity to address their needs 06 before their respective local governments. The legislature finds that it is appropriate to permit 07 this issue to be resolved on the local level. 08 * Sec. 2. AS 29.45.030(h) is amended to read: 09  (h) Nothing [EXCEPT AS PROVIDED IN (g) OF THIS SECTION, 10 NOTHING] in (j) [(e) - (j)] of this section affects similar exemptions from property 11 taxes granted by a municipality on September 10, 1972, or prevents a municipality 12 from granting similar exemptions by ordinance as provided in AS 29.45.050. 13 * Sec. 3. AS 29.45.030(k) is amended to read: 14  (k) The department shall adopt regulations to implement the provisions of [(g) 15 AND] (j) of this section. 16 * Sec. 4. AS 29.45 is amended by adding a new section to read: 17  Sec. 29.45.052. OPTIONAL EXEMPTION FOR CERTAIN PRIMARY 18 RESIDENCES. (a) The real property owned and occupied as the primary residence 19 and permanent place of abode by a resident of the state who is (1) 65 years of age or 20 older, (2) a disabled veteran, or (3) at least 60 years old and who is the widow or 21 widower of a person who qualified for an exemption under (1) or (2) of this 22 subsection, may by ordinance be exempted from taxation on all or part of the assessed 23 value of the real property. The exemption may be based on financial need as provided 24 in the ordinance. Only one exemption may be granted for the same property. If two 25 or more persons are eligible for an exemption for the same property, the exemption 26 may not be granted unless the parties decide between or among themselves who is to 27 receive the benefit of the exemption. Real property may not be exempted under this 28 subsection if the local assessor determines, after notice and hearing to the parties, that 29 the property was conveyed to the applicant primarily for the purpose of obtaining the 30 exemption. The determination of the assessor may be appealed to the superior court 31 under procedures set out in AS 44.62.560 - 44.62.570.

01  (b) In this section, 02  (1) "disabled veteran" means a disabled person 03  (A) separated from the military service of the United States 04 under a condition that is not dishonorable who is a resident of the state, whose 05 disability was incurred or aggravated in the line of duty in the military service 06 of the United States, and whose disability has been rated as 50 percent or more 07 by the branch of service in which that person served or by the Veterans' 08 Administration; or 09  (B) who served in the Alaska Territorial Guard, who is a 10 resident of the state, whose disability was incurred or aggravated in the line of 11 duty while serving in the Alaska Territorial Guard, and whose disability has 12 been rated as 50 percent or more; 13  (2) "real property" includes mobile homes, whether classified as real 14 or personal property for municipal tax purposes. 15 * Sec. 5. AS 29.45.030(a)(6), 29.45.030(e), 29.45.030(f), 29.45.030(g), 29.45.030(i), and 16 29.45.050(i) are repealed. 17 * Sec. 6. This Act takes effect January 1, 1996.