Chapter 3.11
CRITERIA FOR REAL PROPERTY EXEMPTIONS AND DEFERRALS1
Sections:
3.11.010 General criteria.
3.11.020 Categories.
3.11.030 Economic development property – Specific criteria.
3.11.040 Limitations on economic development property tax exemptions and deferrals.
3.11.050 Deteriorated property – Specific criteria.
3.11.060 Limitations on deteriorated property tax exemptions and deferrals.
3.11.070 Definitions.
3.11.080 Community purposes property – Specific criteria and factors for consideration.
3.11.010 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 3.10 FNSBC. (Ord. 2005-77 § 2, 2005; Ord. 2005-26 § 3, 2005)
3.11.020 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)
3.11.030 Economic development property – Specific criteria.
The assembly may grant a partial or total exemption and/or deferral for economic development 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 property will be used by a trade, industry, or business that is not already developed within the borough and such use will:
1. a. Directly generate sales outside of the borough of goods and/or services produced in the borough; or
b. Materially reduce the importation of goods and/or services from outside of the borough; and
2. Directly create significant new employment in the borough;
B. The exemption and/or deferral is necessary to:
1. a. The long-term viability of the trade, industry, or business operation; or
b. The economic feasibility of initiating a trade, industry, or business with the reasonable likelihood of long-term economic viability; and
2. Promote or improve the economic development of the borough;
C. 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 location of the trade, industry, or business is compatible with land use and development plans of the borough. (Ord. 2005-26 § 3, 2005)
3.11.040 Limitations on economic development property tax exemptions and deferrals.
Real property that has previously been taxed by the borough shall not qualify for an economic development property tax exemption or deferral under this chapter. (Ord. 2005-26 § 3, 2005)
3.11.050 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)
3.11.060 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)
3.11.070 Definitions.
“Deteriorating” or “deteriorated area” as used in this chapter means an area that is characterized by:
A. Unsafe, unsanitary, vacant, or overcrowded building(s);
B. Overgrown or unsightly vacant lots;
C. A significant percentage of tax delinquent properties; and/or
D. Economically or socially undesirable land uses. (Ord. 2005-26 § 3, 2005)
3.11.080 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).
Code reviser’s note: Ordinance 2005-26, the basis of the provisions of this chapter, may be repealed by voters through referendum.