Enrolled HB 411: Relating to municipal economic development; increasing the residential property tax exemption; relating to municipal tax exemptions and deferrals on economic development property; relating to economic development; and relating to a municipal tax exemption for certain farm structures.
00Enrolled HB 411 01 Relating to municipal economic development; increasing the residential property tax 02 exemption; relating to municipal tax exemptions and deferrals on economic development 03 property; relating to economic development; and relating to a municipal tax exemption for 04 certain farm structures. 05 _______________ 06 * Section 1. AS 29.35.110(c) is amended to read: 07 (c) Notwithstanding (a) of this section, a borough that has entered into an 08 agreement with a city located in the borough to cooperatively or jointly provide for 09 economic development may use borough revenue from taxes or funding from other 10 sources [, WHETHER COLLECTED ON AN AREAWIDE OR NONAREAWIDE 11 BASIS,] to carry out the terms of the agreement. 12 * Sec. 2. AS 29.45.050(a) is amended to read: 13 (a) A municipality may exclude or exempt or partially exempt residential 14 property from taxation by ordinance ratified by the voters at an election. An exclusion
01 or exemption authorized by this subsection may be applied with respect to taxes levied 02 in a service area to fund the special services. An exclusion or exemption authorized by 03 this subsection may not exceed the assessed value of $75,000 [$50,000] for any one 04 residence except that a municipality may, by ordinance, annually adjust the 05 municipality's [THEIR] voter-authorized exemption by the amount calculated by the 06 State Assessor to reflect the increase, if any, in the annual average cost of living, using 07 the United States [U.S.] Department of Labor Consumer Price Index for Urban 08 Alaska [CPI-U FOR ANCHORAGE]. 09 * Sec. 3. AS 29.45.050(m) is amended to read: 10 (m) A municipality may by ordinance partially or totally exempt all or some 11 types of economic development property from taxation for a designated period. Except 12 as otherwise provided by an ordinance enacted by the municipality before January 1, 13 2017, a municipality that is a school district may only exempt all or a portion of the 14 amount of taxes that exceeds the amount levied on other property for the school 15 district's required local contribution under AS 14.17.410(b)(2). A municipality may by 16 ordinance permit deferral of payment of taxes on all or some types of economic 17 development property for a designated period. A municipality may [NOT] apply an 18 exemption or deferral under this subsection to taxes levied for special services in a 19 service area that is supervised by an elected service area [A] board under 20 AS 29.35.460 unless the elected service area board objects to the exemption or 21 deferral by resolution adopted not later than 60 days after the effective date of 22 the municipal ordinance enacting the tax exemption or deferral. A municipality 23 may adopt an ordinance under this subsection only if, before it is adopted, copies of 24 the proposed ordinance made available at a public hearing on it contain written notice 25 that the ordinance, if adopted, may be repealed by the voters through referendum. An 26 ordinance adopted under this subsection must include specific eligibility requirements 27 and require a written application for each exemption or deferral. [IN THIS 28 SUBSECTION, "ECONOMIC DEVELOPMENT PROPERTY" MEANS REAL OR 29 PERSONAL PROPERTY, INCLUDING DEVELOPED PROPERTY CONVEYED 30 UNDER 43 U.S.C. 1601 ET SEQ. (ALASKA NATIVE CLAIMS SETTLEMENT 31 ACT),
01 (1) TO WHICH ONE OR MORE OF THE FOLLOWING APPLY: 02 (A) THE PROPERTY HAS NOT PREVIOUSLY BEEN 03 TAXED AS REAL OR PERSONAL PROPERTY BY THE MUNICIPALITY; 04 (B) THE PROPERTY IS USED IN A TRADE OR BUSINESS 05 IN A WAY THAT 06 (i) CREATES EMPLOYMENT IN THE 07 MUNICIPALITY; 08 (ii) GENERATES SALES OUTSIDE OF THE 09 MUNICIPALITY OF GOODS OR SERVICES PRODUCED IN THE 10 MUNICIPALITY; OR 11 (iii) MATERIALLY REDUCES THE IMPORTATION 12 OF GOODS OR SERVICES FROM OUTSIDE THE 13 MUNICIPALITY; 14 (C) AN EXEMPTION OR DEFERRAL ON THE PROPERTY 15 ENABLES A SIGNIFICANT CAPITAL INVESTMENT IN PHYSICAL 16 INFRASTRUCTURE THAT 17 (i) EXPANDS THE TAX BASE OF THE 18 MUNICIPALITY; AND 19 (ii) WILL GENERATE PROPERTY TAX REVENUE 20 AFTER THE EXEMPTION EXPIRES; OR 21 (2) THAT HAS NOT BEEN USED IN THE SAME TRADE OR 22 BUSINESS IN ANOTHER MUNICIPALITY FOR AT LEAST SIX MONTHS 23 BEFORE THE APPLICATION FOR DEFERRAL OR EXEMPTION IS FILED; 24 THIS PARAGRAPH DOES NOT APPLY IF THE PROPERTY WAS USED IN THE 25 SAME TRADE OR BUSINESS IN AN AREA THAT HAS BEEN ANNEXED TO 26 THE MUNICIPALITY WITHIN SIX MONTHS BEFORE THE APPLICATION 27 FOR DEFERRAL OR EXEMPTION IS FILED; THIS PARAGRAPH DOES NOT 28 APPLY TO INVENTORIES.] 29 * Sec. 4. AS 29.71.800 is amended by adding a new paragraph to read: 30 (26) "economic development" means an action intended to result in an 31 outcome that causes an increase in, or avoids a decrease of, economic activity, gross
01 domestic product, or the tax base. 02 * Sec. 5. Section 2, ch. 66, SLA 2013, is repealed.