Chapter 8.12
CRITERIA FOR REAL PROPERTY EXEMPTIONS AND DEFERRALS

Sections:

8.12.010    General criteria.

8.12.020    Categories.

8.12.030    Economic development property – Specific criteria.

8.12.050    Deteriorated property – Specific criteria.

8.12.060    Limitations on deteriorated property tax exemptions and deferrals.

8.12.070    Community purposes property – Specific criteria and factors for consideration.

8.12.010 General criteria.

In order for property to be considered for an economic development, community purposes, or deteriorated property tax exemption or deferral, an applicant must complete the application process described in Chapter 8.08 FNSBC. (Ord. 2005-77 § 2, 2005; Ord. 2005-26 § 3, 2005. 2004 Code § 3.11.010.)

8.12.020 Categories.

The three categories of tax exemptions provided under this chapter are “community purposes property,” “economic development property” and “deteriorated property.” (Ord. 2005-77 § 3, 2005; Ord. 2005-26 § 3, 2005. 2004 Code § 3.11.020.)

8.12.030 Economic development property – Specific criteria.

A. The assembly may grant a partial or total exemption and/or deferral for economic development property only if the granting of such exemption and/or deferral will provide economic benefit to the borough, and:

1. The exemption and/or deferral will provide measurable public benefits commensurate with the level of incentive granted;

2. The property owner is in compliance with all Alaskan municipal and state of Alaska tax obligations;

3. The location of the trade, industry, or business is compatible with land use and development plans of the borough; and

4. The exemption and/or deferral is necessary to allow adequate time for improvements to be completed and revenue to be generated by the property.

B. For purposes of this section, “economic development property” means real or personal property, including developed property conveyed under 43 USC 1601 through 1629e (Alaska Native Claims Settlement Act), that:

1. Has not previously been taxed as real or personal property by the borough;

2. Is used in a trade or business in a way that:

a. Creates employment in the borough directly related to the use of the property; or

b. Generates sales outside of the borough of goods or services produced in the borough; or

c. Materially reduces the importation of goods or services from outside the borough; and

3. Has not been used in the same trade or business in another municipality for at least six months before the application for deferral or exemption is filed; this limitation does not apply if the property was used in the same trade or business in an area that has been annexed to the borough within six months before the application for deferral or exemption is filed; this subsection does not apply to inventories. (Ord. 2017-16 § 3, 2017; Ord. 2005-26 § 3, 2005. 2004 Code § 3.11.030.)

8.12.050 Deteriorated property – Specific criteria.

The assembly may grant a partial or total exemption and/or deferral for deteriorated property only if there is a clear and convincing demonstration that such exemption and/or deferral will provide direct economic benefit to the borough, and:

A. The exemption and/or deferral is necessary to:

1. The economic feasibility of completing improvements on the property; and

2. Promote or improve the economic development of the borough;

B. The property is commercial property not used for residential purposes, or is multi-unit residential property with at least eight residential units;

C. The property:

1. Within the last five years, has been the subject of an order by a government agency requiring environmental remediation of the property or requiring the property to be vacated, condemned or demolished by reason of noncompliance with laws, ordinances, or regulations; or

a. Is located in a deteriorating or deteriorated area with boundaries that have been determined by the assembly after a public hearing;

b. The exemption and/or deferral will provide measurable public benefits commensurate with the level of incentive granted;

D. The property owner is in compliance with all Alaskan municipal and state of Alaska tax obligations; and

E. The improvements planned for the property are compatible with land use and development plans of the borough. (Ord. 2005-26 § 3, 2005. 2004 Code § 3.11.050.)

8.12.060 Limitations on deteriorated property tax exemptions and deferrals.

Any tax exemption or deferral for deteriorated property shall not take effect until January 1st of the year after:

A. The exemption or deferral has been approved by the assembly; and

B. The planned improvements on the property have been substantially completed or the property is beneficially occupied. (Ord. 2005-26 § 3, 2005. 2004 Code § 3.11.060.)

8.12.070 Community purposes property – Specific criteria and factors for consideration.

A. Any entity requesting a community purpose property tax exemption pursuant to this chapter shall, with its initial application, submit exact copies of its most recent Return of Organization Exempt from Income Tax Return (Form 990) and Federal Unrelated Business Income Tax Return (Form 990T). If a tax exemption is granted to such entity, it must thereafter submit to the borough, within 30 days of the required filing date with the Internal Revenue Service, exact copies of its Return of Organization Exempt from Income Tax Return (Form 990) and Federal Unrelated Business Income Tax Return (Form 990T).

B. The borough assembly may by ordinance grant tax exemptions for community purpose property if the application meets state law requirements and the assembly determines that there is a direct and substantial benefit to the borough from the applicant’s property use. The assembly, in determining whether to grant an exemption and the amount and term of exemption to be granted, may consider various factors including, but not limited to, whether:

1. The property is open to public use regardless of sex, race, creed, color, or national origin.

2. The applicant organization is qualified as an exempt organization under Section 501(c)(3) of the Internal Revenue Code, as amended from time to time.

3. No part of the net earnings of the applicant inures to the benefit of any private entity or individual.

4. There is no evidence of a dominant financial motive such as excessive charges, excessive employee compensation, or income that exceeds operating expenses.

5. There is no evidence that the property is being used to financially benefit any officer, trustee, director, shareholder, member, or contributor, of the applicant.

6. The property is used for the actual operation of the community activity and does not exceed an amount of property reasonably necessary for the accomplishment of the community activity.

7. The fees and charges for the use of such property and facilities thereon do not effectively deny to a significant portion of the borough the privileges and benefits provided by such property.

8. The applicant organization is governed by a volunteer board of directors.

9. Whether and to what extent a tax exemption is necessary to provide the community benefit.

10. The existence of substantially similar community benefits through other public or private entities; and

11. The degree to which the organizations use of the property impacts the quality of life of borough residents. (Ord. 2005-77 § 4, 2005). (2004 Code § 3.11.080.)