Enrolled SB 179: Relating to municipal property tax; relating to assessment of property, boards of equalization, and certification of assessors; prohibiting municipalities from levying a tax on the transfer of real property; prohibiting the state from levying a tax on the transfer of real property; relating to municipal taxation of mobile telecommunications services; and providing for an effective date.
00Enrolled SB 179 01 Relating to municipal property tax; relating to assessment of property, boards of equalization, 02 and certification of assessors; prohibiting municipalities from levying a tax on the transfer of 03 real property; prohibiting the state from levying a tax on the transfer of real property; relating 04 to municipal taxation of mobile telecommunications services; and providing for an effective 05 date. 06 _______________ 07 * Section 1. AS 29.10.200(56) is amended to read: 08 (56) AS 29.45.650(c), (d), (e), (f), (i), (j), [AND] (k), and (l) (sales and 09 use tax); 10 * Sec. 2. AS 29.10.200(57) is amended to read: 11 (57) AS 29.45.700(d), (e), [AND] (g), and (h) (sales and use tax); 12 * Sec. 3. AS 29.45.050(m) is amended to read: 13 (m) A municipality may by ordinance partially or totally exempt all or some 14 types of economic development property from taxation for a designated period. 15 [EXCEPT AS OTHERWISE PROVIDED BY AN ORDINANCE ENACTED BY
01 THE MUNICIPALITY BEFORE JANUARY 1, 2017, A MUNICIPALITY THAT IS 02 A SCHOOL DISTRICT MAY ONLY EXEMPT ALL OR A PORTION OF THE 03 AMOUNT OF TAXES THAT EXCEEDS THE AMOUNT LEVIED ON OTHER 04 PROPERTY FOR THE SCHOOL DISTRICT'S REQUIRED LOCAL 05 CONTRIBUTION UNDER AS 14.17.410(b)(2).] A municipality may by ordinance 06 permit deferral of payment of taxes on all or some types of economic development 07 property for a designated period. A municipality may apply an exemption or deferral 08 under this subsection to taxes levied for special services in a service area that is 09 supervised by an elected service area board under AS 29.35.460 unless the elected 10 service area board objects to the exemption or deferral by resolution adopted not later 11 than 60 days after the effective date of the municipal ordinance enacting the tax 12 exemption or deferral. A municipality may adopt an ordinance under this subsection 13 only if, before it is adopted, copies of the proposed ordinance made available at a 14 public hearing on it contain written notice that the ordinance, if adopted, may be 15 repealed by the voters through referendum. An ordinance adopted under this 16 subsection must include specific eligibility requirements and require a written 17 application for each exemption or deferral. 18 * Sec. 4. AS 29.45.050(t) is amended to read: 19 (t) A municipality may by ordinance [APPROVED BY THE VOTERS] 20 partially or totally exempt from taxation farm land and farm structures [A FARM 21 STRUCTURE] used exclusively for farming activity, or purposes directly related to 22 farming activity, if the farm land or farm structure meets the criteria set out in this 23 subsection. The farm land or farm structure must be [IS] owned or leased by a 24 person that is actively engaged in farming, and the owner or lessee must sell at least 25 $2,500 of agricultural products produced from the land during the tax year and 26 file an Internal Revenue Service Schedule F (Form 1040) with the United States 27 Internal Revenue Service. The farm land or farm [THAT DERIVES AT LEAST 28 10 PERCENT OF THE PERSON'S YEARLY GROSS INCOME FROM FARMING 29 ACTIVITY, AND THE] structure must be [IS] used for 30 (1) the growing, storage, or processing of grains, fruits, vegetables, 31 aquatic farm products as defined in AS 16.40.199, or other crops specified by
01 ordinance [INTENDED FOR HUMAN CONSUMPTION] and produced by the 02 owner's or lessee's farming activity; 03 (2) the storage or processing of 04 (A) feed for livestock; 05 (B) livestock, poultry, or other animals used in the owner's or 06 lessee's farming activity; 07 (C) [(B)] milk or milk products produced by the owner's or 08 lessee's farming activity; or 09 (3) sheltering, stabling, or milking the owner's or lessee's dairy 10 animals, poultry, or livestock. 11 * Sec. 5. AS 29.45.050(y) is amended to read: 12 (y) In this section, "farming activity" means raising and harvesting crops; 13 feeding, breeding, and managing livestock; dairying; propagating, farming, or 14 cultivating an aquatic farm product as defined in AS 16.40.199; or any 15 combination of those activities. 16 * Sec. 6. AS 29.45.050 is amended by adding a new subsection to read: 17 (z) In the event that an owner or lessee of farm use land does not sell $2,500 18 of agricultural products produced from the land during a tax year because of 19 circumstances beyond the control of the owner or lessee, the owner may secure the 20 exemption under (t) of this section if the farm use land qualified for the exemption 21 under (t) of this section for the three preceding tax years. In this subsection, 22 "circumstances beyond the control of the owner or lessee" includes crop failure or 23 physical injury that prevents the owner or lessee from conducting farming activity. 24 * Sec. 7. AS 29.45.060(a) is amended to read: 25 (a) Farm use land, and structures on farm use land that are used for farm 26 operations, included in a farm unit and not dedicated or being used for nonfarm 27 purposes shall be assessed on the basis of full and true value for farm use and may not 28 be assessed as if subdivided or used for some other nonfarm purpose. The assessor 29 shall maintain records valuing the land for both full and true value and farm use value. 30 If the land is sold, leased, or otherwise disposed of for uses incompatible with farm 31 use or converted to a use incompatible with farm use by the owner, the owner is liable
01 to pay an amount equal to the additional tax at the current mill levy together with eight 02 percent interest for the preceding seven years, as though the land had not been 03 assessed for farm use purposes. Payment by the owner shall be made to the state to the 04 extent of its reimbursement for revenue loss under (d) of this section for the preceding 05 seven years. The balance of the payment shall be made to the municipality. 06 * Sec. 8. AS 29.45.060(b) is amended to read: 07 (b) An owner of farm use land shall, to secure the assessment under this 08 section, apply to the assessor on or before May 15 of each year in which the 09 assessment is desired. The application shall be made on [UPON] forms prescribed by 10 the state assessor for the use of the local assessor, and must include information that 11 may reasonably be required to determine the entitlement of the applicant. If the land is 12 leased for farm use purposes, the applicant shall furnish to the assessor a copy of the 13 lease bearing the signatures of both lessee and lessor along with the completed 14 application. The applicant shall furnish the assessor a copy of the lease covering the 15 period for which the exemption is requested. This subsection does not apply to a 16 person with an interest in land that is classified by the state for agricultural use or that 17 is restricted by the state for agricultural purposes. 18 * Sec. 9. AS 29.45.060(c) is amended to read: 19 (c) In the event that an owner or lessee of farm use land does not sell 20 $2,500 of agricultural products produced from the land during a tax year 21 because of circumstances beyond the control of the owner or lessee, the owner 22 may secure the assessment under this section if the farm use land qualified for 23 the assessment under this section for the three preceding tax years. In this 24 subsection, "circumstances beyond the control of the owner or lessee" includes 25 [OF A] crop failure or physical injury that prevents the owner or lessee from 26 conducting farming activity [BY AN ACT OF GOD THE PREVIOUS YEAR, THE 27 OWNER OR LESSEE MAY SUBMIT AN AFFIDAVIT AFFIRMING THAT 10 28 PERCENT OF GROSS INCOME FOR THE PAST THREE YEARS WAS FROM 29 FARMING]. 30 * Sec. 10. AS 29.45.060(f) is amended to read: 31 (f) This section does not apply to land for which the owner has granted, and
01 has outstanding, a lease or option to buy the surface rights. A property owner wishing 02 to file for farm use classification having no history of farm-related income may submit 03 a declaration of intent at the time of filing the application with the assessor setting out 04 the intended use of the land and certifying that the property owner intends to file 05 an Internal Revenue Service Schedule F (Form 1040) with the United States 06 Internal Revenue Service for the current tax year [THE ANTICIPATED 07 PERCENTAGE OF INCOME]. An applicant using this procedure shall file with the 08 assessor on or before April 15 [FEBRUARY 1] of the following year a copy of the 09 Schedule F (Form 1040) the applicant files with the Internal Revenue Service 10 [NOTARIZED STATEMENT OF THE PERCENTAGE OF GROSS INCOME 11 ATTRIBUTABLE TO THE LAND]. Failure to make a [THE] filing required in this 12 subsection forfeits the exemption. 13 * Sec. 11. AS 29.45.060(g) is amended to read: 14 (g) In this section, 15 (1) "farm use" means the use of land for the production of crops, 16 fruits, or other agricultural products for human or animal consumption or for 17 the sustenance or grazing of livestock if the owner or lessee sells at least $2,500 of 18 agricultural products produced from the land during the tax year and files an 19 Internal Revenue Service Schedule F (Form 1040) with the United States Internal 20 Revenue Service; 21 (2) "livestock" includes cattle, hogs, sheep, goats, chickens, 22 turkeys, pigeons, and other poultry raised to provide meat or other products for 23 human consumption [PROFIT FOR RAISING AND HARVESTING CROPS, FOR 24 THE FEEDING, BREEDING, AND MANAGEMENT OF LIVESTOCK, FOR 25 DAIRYING, OR ANOTHER AGRICULTURAL USE, OR ANY COMBINATION 26 OF THESE. TO BE FARM USE LAND, THE OWNER OR LESSEE MUST BE 27 ACTIVELY ENGAGED IN FARMING THE LAND, AND DERIVE AT LEAST 10 28 PERCENT OF YEARLY GROSS INCOME FROM THE LAND]. 29 * Sec. 12. AS 29.45.110(a) is amended to read: 30 (a) The assessor shall assess property at its full and true value as of January 1 31 of the assessment year, except as provided in this section, AS 29.45.060, and
01 29.45.230. The full and true value is the estimated price that the property would bring 02 in an open market and under the then prevailing market conditions in a sale between a 03 willing seller and a willing buyer both conversant with the property and with 04 prevailing general price levels. The assessor shall determine the full and true value 05 as provided in standards adopted by the department under (e) of this section or 06 another set of standards provided by ordinance. 07 * Sec. 13. AS 29.45.110 is amended by adding a new subsection to read: 08 (e) The department shall adopt standards for assessing the full and true value 09 of property under (a) of this section that are not inconsistent with standards adopted by 10 the International Association of Assessing Officers and update the standards when 11 necessary. 12 * Sec. 14. AS 29.45 is amended by adding a new section to read: 13 Sec. 29.45.115. Assessor certification. A municipality may not employ an 14 assessor, including a private contractor, unless the assessor has a level 3 certification 15 from the Alaska Association of Assessing Officers or works under the supervision of 16 an individual with a level 3 certification from the Alaska Association of Assessing 17 Officers. 18 * Sec. 15. AS 29.45.180(a) is amended to read: 19 (a) A person receiving an assessment notice shall advise the assessor of errors 20 or omissions in the assessment of the person's property. If requested by the person, 21 the assessor or a person designated by the assessor shall meet with the person and 22 answer reasonable questions relating to the methods used to assess the person's 23 property. The meeting required under this subsection may be virtual or 24 telephonic. The assessor may correct errors or omissions in the roll before the board 25 of equalization hearing. 26 * Sec. 16. AS 29.45.200(a) is amended to read: 27 (a) The governing body shall appoint one or more boards [SITS AS A 28 BOARD] of equalization for the purpose of hearing an appeal from a determination of 29 the assessor [, OR IT MAY DELEGATE THIS AUTHORITY TO ONE OR MORE 30 BOARDS APPOINTED BY IT]. An appointed board shall [MAY] be composed of 31 not less than three persons, who shall be members of the governing body, municipal
01 residents, or a combination of members of the governing body and residents. The 02 governing body shall by ordinance establish the qualifications for membership. The 03 governing body may by ordinance appoint itself to sit as a board of equalization. 04 * Sec. 17. AS 29.45.210(b) is amended to read: 05 (b) The appellant bears the burden of proof. The only grounds for adjustment 06 of assessment are proof of unequal, excessive, improper, or under valuation based on 07 facts that are stated in a valid written appeal or proven at the appeal hearing. The [IF 08 A VALUATION IS FOUND TO BE TOO LOW, THE] board of equalization may not 09 raise the assessment in the current year unless requested to do so by the appellant. 10 If the appellant provides a long form fee appraisal to support the appellant's 11 valuation and the board of equalization does not find in favor of the appellant, 12 the board shall make specific findings on the record to support its decision. 13 * Sec. 18. AS 29.45.650(a) is amended to read: 14 (a) Except as provided in AS 04.21.010(c), AS 29.45.750, and in (f), (h), (i), 15 [AND] (j), (k), and (l) of this section, a borough may levy and collect a sales tax on 16 sales, rents, and [ON] services provided in the borough. The sales tax may apply to 17 any or all of these sources. Notwithstanding other statutes, exemptions may be granted 18 by ordinance. A borough may wholly or partially exempt a source from a borough 19 sales tax that is taxed by a city in that borough under AS 29.45.700. 20 * Sec. 19. AS 29.45.650 is amended by adding a new subsection to read: 21 (l) A borough may not levy or collect a sales or use tax on the transfer of real 22 property. This subsection applies to home rule and general law municipalities. In this 23 subsection, "transfer" has the meaning given in AS 34.70.200. 24 * Sec. 20. AS 29.45.700(a) is amended to read: 25 (a) A city in a borough that levies and collects areawide sales and use taxes 26 may levy sales and use taxes on all sources taxed by the borough in the manner 27 provided for boroughs. Except as provided in (d), [AND] (e), (g), and (h) of this 28 section, the assembly may by ordinance authorize a city to levy and collect sales and 29 use taxes on other sources. 30 * Sec. 21. AS 29.45.700 is amended by adding a new subsection to read: 31 (h) A city may not levy or collect a sales or use tax on the transfer of real
01 property. This subsection applies to home rule and general law municipalities. In this 02 subsection, "transfer" has the meaning given in AS 34.70.200. 03 * Sec. 22. AS 43.98 is amended by adding a new section to article 3 to read: 04 Sec. 43.98.035. No tax on real property transfers. The state may not levy or 05 collect a sales or use tax on the transfer of real property. In this section, "transfer" has 06 the meaning given in AS 34.70.200. 07 * Sec. 23. Section 4, ch. 100, SLA 2002, as repealed and reenacted by sec. 9, ch. 117, SLA 08 2003, and by sec. 2, ch. 30, SLA 2005; and secs. 6 and 9, ch. 100, SLA 2002, are repealed. 09 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 APPLICABILITY. AS 29.45.650(l), enacted by sec. 19 of this Act, and 12 AS 29.45.700(h), enacted by sec. 21 of this Act, do not apply to an ordinance that establishes 13 a sales or use tax on the transfer of real property adopted by a municipality before the 14 effective date of secs. 19 and 21 of this Act. 15 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 18 Economic Development may adopt regulations necessary to implement the changes made by 19 secs. 12 - 17 of this Act. The regulations take effect under AS 44.62 (Administrative 20 Procedure Act), but not before the effective date of the law implemented by the regulation. 21 * Sec. 26. Sections 12, 13, and 15 - 17 of this Act take effect January 1, 2025. 22 * Sec. 27. Section 14 of this Act takes effect January 1, 2026. 23 * Sec. 28. Sections 3 - 11 and 25 of this Act take effect immediately under AS 01.10.070(c). 24