MEMORANDUM

TO: Timothy Navarre, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

THRU: Colette Thompson, Borough Attorney

FROM: Shane Horan, Director of Assessing

John E. Simmons, Assistant Borough Attorney

DATE: July 25, 2002

SUBJECT: Ordinance 2002-30: An Ordinance Enacting KPB 5.12.111 to Provide a Tax Exemption For an Increase in the Assessed Value of Property Resulting From Harvesting Insect-Infested Timber

In order to reduce fire danger and to promote the growth of healthy forests, it is necessary that timber on land that is significantly infested or at risk of being significantly infested with insects be appropriately harvested. Property owners who act to remove insect infested timber may in the process increase the assessed value of their property or, in the case of Alaska Native Claims Settlement Act (ANCSA) land, convert exempt property into taxable property. The ANCSA Native Corporations requested an ordinance authorizing an exemption last year. Alaska State law, however, did not permit municipalities to grant such an exemption. The Twenty-Second Alaska State Legislation recently enacted HB 358 providing such authority. It also permits the municipalities to make the ordinance retroactive to January 1, 2001.

If this ordinance is enacted, property owners may apply for an exemption for the increase in assessed value of their real property that results from a timber harvest on land that is significantly infested or at risk of being significantly infested with insects. It also permits an application for an exemption for the 2001 assessment year.