MEMORANDUM

TO: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

FROM: Shane Horan, Director of Assessing

DATE: August 26, 2004

SUBJECT: Ordinance 2004-30 Enacting KPB Chapter 5.12.114

to provide for Property Tax Reduction for Disaster Damage

The Twenty-Third Legislature, Second Session, passed House Bill 209 in February of 2004. This bill allows municipalities to write standards allowing for the reassessment and refund or reduction of property tax bills for damages resulting from a "disaster" without a disaster declaration being issued by the Governor of Alaska or the President of the United States.

AS 29.45.230(d) has been amended to read: In an ordinance authorized by this section, the municipality shall establish criteria for the reduction of taxes on property damaged, destroyed, or otherwise reduced in value as a result of disaster, and may, consistent with this section, prescribe procedures, restrictions, and conditions for assessing or reassessing property and for remitting, refunding, or forgiving taxes.

The administration recommends such relief be provided by allowing the Assessing Department, under specified conditions and application, to reassess the property after the lien date (January 1) to recognize the loss in a property's market value. The current year assessed value of the damaged property would be reduced in proportion to the loss in market value. The new reduced value would be used to calculate a pro-rata reduction in taxes. The affected property would retain its lower value until December 31 of the year, and would then be assessed at full and true value as of January 1 for the next year.

Application would be made on a form prescribed by the Assessor. All appeals of determinations by the Assessor would be made to the Board of Equalization.

The recommended effective date of this ordinance is January 1, 2005.