A piece of legislation relating to municipal economic development became law without Governor Dunleavy’s signature. During the final week of the legislative session, Sen. Scott Kowasaki introduced an amendment to insert Senate Bill 172 into House Bill 411 to provide Alaska communities the ability to increase property tax exemptions from $50,000 to $75,000. HB 411 relates to property tax exemption, municipal tax exemptions and deferrals on economic development property, economic development, as well as a municipal tax exemption for certain farm structures.
In testifying about HB 411, Rep. Calvin Schrage said there were some concerns about special service areas and the impact of economic development programs on those:
“What this bill does is it takes a slightly more flexible approach so that we can allow those economic development programs in those areas but still protect those special service areas by allowing them an opportunity to opt out.”
Earlier this year, residential property owners in the Municipality of Anchorage received property appraisals increasing their property taxes an average of 8-10% from the prior year. At the same time, commercial property taxes remained flat or were decreased by similar percentages.
Rep. Schrage added:
“We clarified that if a borough and a municipality want to jointly work together and go into an agreement to provide for economic development jointly, they can share federal funds or use federal funds together for the purpose of economic development. This would allow for greater cooperation between our municipalities and boroughs and then there was a change to the definition of economic development within Title 29 that just simply allows more flexibility for municipalities and local governments so that they can better define for their programs and their efforts what economic development means to them and how to approve and carry out those programs.”
HB 411 goes into effect on October 9, 2022 and it will be up to local municipalities to enact this additional relief.
Click here for more information on the legislation.
Transcribed audio courtesy of KTOO 360TV.
