MEMORANDUM

TO: Timothy Navarre, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

FROM: Shane Horan, Director of Assessing

DATE: January 8, 2002

SUBJECT: Resolution 2002-006, A Resolution Supporting State Legislation Allowing Tax Exemption of Alaska Native Claims Settlement Act (ANCSA) Lands For Fuel Reduction and Timber Salvage Operations.

This resolution supports the Native Corporations in pursuing state legislation to exempt certain ANCSA timber harvested lands from taxation. Specifically, the legislation would exempt lands where timber that has been infested or killed by the spruce bark beetle is harvested. The Alaska Native Claims Settlement Act of 1971 provides for these native owned lands to be exempted from local property taxes until those lands are "developed or leased or sold to third parties." When Congress defined, "developed", under the 1987 amendments to ANCSA, they stipulated that, "land upon which timber resources are being harvested shall be considered developed only during the period of such harvest and only to the extend that such land is integrally related to the timber harvesting operation."

Congress could not have anticipated the significant devastating impacts of the spruce bark beetle infestation. As a result of this infestation, the Native Corporations have taken an active roll in reducing the fire hazard potential by fuel reduction and timber salvage operations on their lands. However, in compliance with ANCSA, the Borough has been compelled to place these properties on the assessment roll (for the year in which the harvest takes place).

To date, at my request, and with the cooperation of the Kenai Peninsula Native Corporations, I have received certified Toll Agreements from the six corporations: Cook inlet Region, Inc., Tyonek Native Corporation, Kenai Natives Association, Inc., Ninilchik Native Association, Inc., Salamatof Native Association, Inc., and Seldovia Native Association, Inc. These Toll Agreements essentially act as an agreement to postpone assessing these harvests until legislation, addressing possible exemption, has been pursued.