04/17/2002 01:45 PM Senate CRA

                                                                                                                                
         HB 455-MUNICIPAL TAXATION OF AGRICULTURAL LAND                                                                     
                                                                                                                                
CHAIRMAN  TORGERSON  stated  this   was  a  companion  to  Senator                                                              
Therriault's  Senate bill  that the committee  heard the  previous                                                              
week. Since the House bill came over  it overcame the Senate bill.                                                              
                                                                                                                                
PETER FELLMAN,  staff to Representative  John Harris, said  HB 455                                                              
is the  companion bill to  SB 352, but  there was a  slight change                                                              
made  by the  House.  They worked  with the  Office  of the  State                                                              
Assessor and changed  some language on the last page  of the bill.                                                              
They took  out the  word, "for  farm use  in accordance  with this                                                              
section."  and  added,  "based  upon  that  restricted  use."  The                                                              
assessor thought the bill was acceptable  to them with the change.                                                              
                                                                                                                                
Alaska  already  recognizes  there   are  agricultural  restricted                                                              
lands,  fee  simple  lands  and agricultural  lands  that  have  a                                                              
covenant  in this  state. Under  this legislation,  it would  free                                                              
farmers with agriculturally  restricted land from  having to apply                                                              
for the required  annual exemption. They are trying  to remove the                                                              
requirement because  the land is  already restricted in  the state                                                              
and it  is cumbersome to  fill out an  annual request to  have the                                                              
land reassessed.                                                                                                                
                                                                                                                                
SENATOR LINCOLN  asked for the approximate difference  between the                                                              
current tax  assessment and  what it  would be  if this  bill were                                                              
enacted.                                                                                                                        
                                                                                                                                
MR. FELLMAN  replied  the assessment  would still  be made  on the                                                              
value  of the  land.  This  will  allow people  with  agricultural                                                              
restricted land to go to the borough  assessor's office and make a                                                              
case for valuing  their land on its agricultural use  not on a fee                                                              
simple basis.                                                                                                                   
                                                                                                                                
SENATOR  LINCOLN  said  the  bill   was  intended  to  reduce  the                                                              
assessment on lands that are used  for farms and that would reduce                                                              
the  amount of  money  collected. She  asked  what the  difference                                                              
would be because it could have an affect on the borough.                                                                        
                                                                                                                                
MR.  FELLMAN said  that  would be  between  the  assessor and  the                                                              
people that own the agriculturally restricted land.                                                                             
                                                                                                                                
SENATOR AUSTERMAN asked for the assessed  value of a piece of land                                                              
used for agricultural purposes if  it were appraised [assessed] at                                                              
$100,000.00 as fee simple land.                                                                                                 
                                                                                                                                
MR. FELLMAN  replied the  law would stay  the same for  fee simple                                                              
land.  It requires  that  if  you are  using  fee simple  land  as                                                              
agricultural  land, they you  make an  annual application  and the                                                              
state  assessor  appraises  what   you  are  doing  then  makes  a                                                              
determination. That  wouldn't change under this  legislation. This                                                              
bill would remove  the requirement that agriculturally  restricted                                                              
land be evaluated on an annual basis.                                                                                           
                                                                                                                                
CHAIRMAN  TORGERSON  asked  Mr.   Van  Sant  whether  he  had  any                                                              
comments.                                                                                                                       
                                                                                                                                
STEVE VAN  SANT, State Assessor,  explained this bill  states that                                                              
those people with  agriculturally restricted lands  will no longer                                                              
have to  go to the  assessors office each  year to fill  out paper                                                              
work  to  remain  in  the  agricultural   tax  deferment  program.                                                              
Hypothetically, someone with agriculturally  restricted land could                                                              
have some fee simple  land that is worth between  3 thousand and 5                                                              
thousand  dollars per  acre. If that  land owner  is farming  that                                                              
land and  they apply to  the assessor on  an annual basis  for the                                                              
deferment, it will be assessed in  the neighborhood of 400 dollars                                                              
per acre and  the remainder of that  is being deferred  out of the                                                              
program.  Individuals who  have those parcels  are paying  between                                                              
400 and  600 dollars  per acre not  the 4  thousand to  6 thousand                                                              
dollars per acre it might be assessed as fee simple.                                                                            
                                                                                                                                
                                                                                                                                
SENATOR  AUSTERMAN  said that  process  is  already going  on.  He                                                              
wanted assurance  this bill only  removes the requirement  for the                                                              
annual deferment application.                                                                                                   
                                                                                                                                
MR.  VAN SANT  said that's  what it  does. Those  people with  the                                                              
agriculturally  restricted lands wouldn't  have to apply  annually                                                              
and  they  would  be assessed  on  the  agriculturally  restricted                                                              
value.                                                                                                                          
                                                                                                                                
There were no further questions or testimony.                                                                                   
                                                                                                                                
CHAIRMAN TORGERSON asked for the will of the committee.                                                                         
                                                                                                                                
SENATOR  AUSTERMAN made  a  motion  to move  HB  455 and  attached                                                              
fiscal note from committee with individual recommendations.                                                                     
                                                                                                                                
There being no objection, it was so ordered.