HB 70: "An Act relating to property exempt from municipal taxation."
00 HOUSE BILL NO. 70 01 "An Act relating to property exempt from municipal taxation." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 29.45.030(a) is amended to read: 04 (a) The following property is exempt from general taxation: 05 (1) municipal property, including property held by a public corporation 06 of a municipality, state property, property of the University of Alaska, or land that is 07 in the trust established by the Alaska Mental Health Enabling Act of 1956, P.L. 84- 08 830, 70 Stat. 709, except that 09 (A) a private leasehold, contract, or other interest in the 10 property is taxable to the extent of the interest; however, an interest created by 11 an operating agreement or nonexclusive use agreement between the Alaska 12 Industrial Development and Export Authority and a user of a shipyard or an 13 integrated transportation and port facility, if the shipyard or integrated 14 transportation and port facility is owned by the authority and initially placed in 15 service before January 1, 1999, is taxable only to the extent of, and for the
01 value associated with, those specific improvements used for lodging purposes; 02 (B) notwithstanding any other provision of law, property 03 acquired by an agency, corporation, or other entity of the state through 04 foreclosure or deed in lieu of foreclosure and retained as an investment of a 05 state entity is taxable; this subparagraph does not apply to federal land granted 06 to the University of Alaska under AS 14.40.380 or 14.40.390, or to other land 07 granted to the university by the state to replace land that had been granted 08 under AS 14.40.380 or 14.40.390, or to land conveyed by the state to the 09 university under AS 14.40.365; 10 (C) an ownership interest of a municipality in real property 11 located outside the municipality acquired after December 31, 1990, is taxable 12 by another municipality; however, a borough may not tax an interest in real 13 property located in the borough and owned by a city in that borough; 14 (2) household furniture and personal effects of members of a 15 household; 16 (3) property used exclusively for nonprofit religious, charitable, 17 cemetery, hospital, or educational purposes; 18 (4) property of a nonbusiness organization composed entirely of 19 persons with 90 days or more of active service in the armed forces of the United States 20 whose conditions of service and separation were other than dishonorable, or the 21 property of an auxiliary of that organization; 22 (5) money on deposit; 23 (6) [THE] real property of certain residents of the state to the extent 24 and subject to the conditions provided in (e) of this section; 25 (7) real property or an interest in real property that is 26 (A) exempt from taxation under 43 U.S.C. 1620(d), as 27 amended or under 43 U.S.C. 1636(d), as amended; or 28 (B) acquired from a municipality in exchange for land that is 29 exempt from taxation under (A) of this paragraph, and is not developed or 30 made subject to a lease; 31 (8) property of a political subdivision, agency, corporation, or other
01 entity of the United States to the extent required by federal law; except that a private 02 leasehold, contract, or other interest in the property is taxable to the extent of that 03 interest unless the property is located on a military base or installation and the 04 property interest is created under 10 U.S.C. 2871 - 2885 (Military Housing 05 Privatization Initiative), if the leaseholder enters into an agreement to make a payment 06 in lieu of taxes to the political subdivision that has taxing authority; 07 (9) natural resources in place, including coal, ore bodies, mineral 08 deposits, and other proven and unproven deposits of valuable materials laid down by 09 natural processes, unharvested aquatic plants and animals, and timber; 10 (10) property not exempt under (3) of this subsection that 11 (A) is owned by a private, nonprofit college or university that is 12 accredited by a regional or national accrediting agency recognized by the 13 Council for Higher Education Accreditation or the United States Department 14 of Education, or both; and 15 (B) was subject to a private leasehold, contract, or other private 16 interest on January 1, 2010, except that a holder of a private leasehold, 17 contract, or other interest in the property shall be taxed to the extent of that 18 interest; 19 (11) a parking lot 20 (A) owned by an organization incorporated under state law 21 that is exempt from taxation under 26 U.S.C. 501(c) (Internal Revenue 22 Code); and 23 (B) used for parking or another use as long as the parking 24 or other use is permitted without charge; 25 (12) real and personal property of a store operated by an 26 organization incorporated under state law that is exempt from taxation under 26 27 U.S.C. 501(c) (Internal Revenue Code) if the store 28 (A) deals exclusively in donated inventory that is 29 distributed without cost as part of a program to provide needy persons 30 with food, shelter, clothing, or health care without charge; or 31 (B) sells merchandise below market value to support a
01 literacy program or a program to provide needy persons with food, 02 shelter, clothing, or health care without charge. 03 * Sec. 2. AS 29.45.030 is amended by adding a new subsection to read: 04 (o) An organization that owns property exempt from taxation under (a)(11) or 05 (12) of this section may lease the property and still qualify for the exemption if 06 (1) the owner leases the property to another organization incorporated 07 under state law that is exempt from taxation under 26 U.S.C. 501(c) (Internal Revenue 08 Code) and that organization uses the property for an exempt activity under (a)(11) or 09 (12) of this section; 10 (2) the lease payments are not the product of the owner's dominant 11 profit motive; and 12 (3) the amount the owner charges to lease the property is incidental to 13 and reasonably necessary for the exempt use of the property and does not exceed the 14 operational requirements of the exempt activity.