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.