02/09/1994 01:34 PM Senate JUD

 SENATOR TAYLOR returned HB 73 (ALASKA NATIVE CLAIMS SETTLEMENT ACT            
 STATE TAX EXEMPTIONS) (ANCSA) to committee and asked DAVID HARDING            
 to review the bill.                                                           
                                                                               
 MR. HARDING explained HB 73 was introduced to bring state law into            
 compliance with federal law regarding the exemption from taxation             
 of property conveyed under the Alaska Native Claims Settlement Act.           
 He also explained several years ago federal law was changed to                
 continue a property tax exemption from federal, state, or local               
 taxation on ANCSA land until development occurs.                              
                                                                               
 MR. HARDING said, in the drafting process, the attorney noted other           
 sections of state law which needed to be updated to conform to the            
 amended federal law.  He described the changes as technical or                
 stylistic changes, and he explained the bill does not expand or               
 reduce any benefits or protection already mandated by federal law,            
 but simply cleans up the state law to assure that obsolete state              
 statutes do not lead to misinterpretation by those working with               
 Alaska tax laws.                                                              
                                                                               
 MR. HARDING said HB 73 has a zero fiscal note from the Department             
 of Revenue; it passed the House unanimously, and he reviewed the              
 prior history of the bill.                                                    
                                                                               
 Number 061                                                                    
                                                                               
 SENATOR TAYLOR was reminded of a foreclosure case on taxes being              
 assessed in Fairbanks on some property acquired by the native                 
 corporation there.  He said the corporation had protested the                 
 foreclosure on the property, saying the lands they had acquired had           
 come to them as an investment of proceeds of ANCSA, and were                  
 therefore exempt.  He wondered if such a case would be resolved by            
 HB 73.                                                                        
                                                                               
 MR. HARDING said the first question would be whether it was                   
 developed land, and SENATOR TAYLOR said it was developed commercial           
 property in Fairbanks.  MR. HARDING said it shouldn't be affected             
 by HB 73, since the legislation only covers undeveloped land, and             
 he referred to the definition in the bill that mirrors the federal            
 definition.                                                                   
                                                                               
 MR. HARDING explained it was possible for land to move into                   
 development status, become taxable, and later to move back to                 
 undeveloped status.  He gave several examples of how this would               
 work.                                                                         
                                                                               
 SENATOR TAYLOR asked why there was a need for the legislation, and            
 MR. HARDING said there was concern that those who use the Alaska              
 tax laws might be making assumptions about Native land that would             
 not be correct.                                                               
                                                                               
 SENATOR TAYLOR asked if there were any on-going cases that would be           
 impacted by this legislation, and MR. HARDING said REPRESENTATIVE             
 MACLEAN has not heard of any cases during the three years he has              
 worked on the legislation.                                                    
                                                                               
 Number 108                                                                    
                                                                               
 SENATOR JACKO referred to page 3, lines 24 and 5 to ask about the             
 definition of Native, and MR. HARDING said it was the federal                 
 language in the United States Code.  SENATOR JACKO asked whether he           
 had the definition as specified in the statutes in the legislation.           
                                                                               
 SENATOR TAYLOR thought those two provisions had to do with the                
 transfer of shares upon death, and if the recipient was of a                  
 certain blood, then they would receive the share as well as the               
 right to vote the share.  He described another scenario in which              
 the person inheriting the share would not have the right to vote              
 the share.                                                                    
                                                                               
 SENATOR JACKO thought SENATOR TAYLOR was correct, but he wanted the           
 exact definition of the statute.  MR. HARDING could not find the              
 definitions in the United States Code.  SENATOR JACKO said he would           
 get the answer later.                                                         
                                                                               
 Number 154                                                                    
                                                                               
 SENATOR DONLEY questioned the technical changes, and MR. HARDING              
 said the bill was only technical changes to conform to the federal     l    
 law and state law.                                                            
                                                                               
 SENATOR JACKO moved to pass HOUSE BILL NO. 73 (ALASKA NATIVE CLAIMS           
 SETTLEMENT ACT STATE TAX EXEMPTIONS) from committee with individual           
 recommendations.  Without objections, so ordered.