FY2012-20 Amending Title 3 Revenue and Finance Section 3.35.085 Regarding LIHTC Assessments Introduced by: Borough Manager
Requested by: Borough Assessor
1 Drafted by: Borough Assessor
Introduced: 04/19/2012
2
Amended: 05/03/2012
3 Public Hearing: 05/03/2012
4 Adopted: 05/03/2012
5 KODIAK ISLAND BOROUGH
6 ORDINANCE NO. FY2012 -20
7
8 AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
9 AMENDING TITLE 3 REVENUE AND FINANCE, CHAPTER 3.35 REAL PROPERTY
10 TAX BY ADDING SECTION 3.35.085 METHOD OF DETERMINING
11 THE ASSESSED VALUE OF PROPERTY THAT QUALIFIES
12 FOR A LOW - INCOME HOUSING UNDER 26 USC 42
13
14 WHEREAS, according to Alaska Statute 29.45.110(d), the Kodiak Island Borough
15 Assessor is required to value low- income housing tax credit projects existing as of January
16 1, 2001, the effective date of the legislation, based on the actual income derived from the
17 property, which can result in a value that is less than the full and true value required by
18 Alaska Statute 29.45.110(a); and
19
20 WHEREAS, these projects must be qualified and recognized under the United States
21 Tax Code 26 USC. 42; and
22
23 WHEREAS, AS 29.45.110(d) requires the borough assembly to determine by ordinance
24 whether the projects that qualify on or after January 1, 2001, shall be assessed based on
25 the actual income which is from restricted rents versus market rents; and
26
27 WHEREAS, to date there are no low- income housing projects in the Kodiak Island
28 Borough receiving the benefit of the restricted rent income approach to value; and
29
30 WHEREAS, Fir Terrace Apartments located at 2610 Mill Bay Road, containing sixty (60)
31 units total has applied for consideration under AS 29.45.110(d)(2); and
32
33 WHEREAS, in accordance with AS 29.45.110(d)(2), the Kodiak Island Borough Assembly
34 finds that properties that first qualify for the low- income housing tax credit exemption after
35 January 1, 2001 may be exempt from tho full and truo valuo roquiromont undor AS
36 29.45.110(a)(d)(1) method of assessment and may be assessed bacod on tho actual
37 -
38 income -tax crodit using the full and true value requirement under AS 29.45.110(a) or
39 may be assessed based on the actual income derived from the property without
40 adjustment based on the amount of any federal income tax credit. The assembly
41 shall determine on a parcel by parcel basis whether such property shall be valued at its full
42 and true value or based on its restricted rents.
43
44 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
45 BOROUGH THAT:
46
47 Section 1: This ordinance is of a general and permanent nature and shall become a
48 part of the Kodiak Island Borough Code of Ordinances; and
Kodiak Island Borough Ordinance No FY2012 -20
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49
50 Section 2: That Kodiak Island Borough Code Title 3 Revenue and Finance, Chapter
51 3.35 Real Property Tax is hereby amended by adding Section 3.35.085 to
52 read as follows:
53
54 3.35.085. Method of determining the assessed value of property that qualifies
55 for a low- income housing tax credit under 26 USC 42.
56 A. In accordance with AS 29.45.110(d) (1), the full and true value of all property
57 within the Kodiak Island Borough that first qualifies for low- income housing tax
58 credit under 26 USC 42 before January 1, 2001, shall be based on the actual
59 income derived from the property and may not be adjusted based on the
60 amount of any federal income tax credit for the property.
61
62 B. Pursuant to AS 29.45.110(d)(2), the full and true value of all property within the
63 Kodiak Island Borough that first qualifies for a low- income housing credit under
64 26 USC 42 on or after January 1, 2001, shall be exempt from the requirement
65 that the value be based on the actual income derived from the property. For
66 property that first qualifies for a low- income housing credit under 26 USC 42 on
67 or after January 1, 2001, the assembly may determine, by parcel, whether the
68 property shall be assessed based on AS 29.45.110(a) or on the basis of actual
69 income derived from the property without adjustment based on the amount of
70 any federal income tax credit given for the property. Once the manner of
71 assessment of the property has been determined under this subparagraph, the
72 assembly may not change the manner of assessment of that parcel of property
73 if debt relating to the property incurred in conjunction with the property
74 qualifying for the low- income housing tax credit remains outstanding.
75
76 C. To secure an assessment based upon the actual income derived from the
77 property under this section, an owner of property that qualifies for the low -
78 income housing tax credit under 26 USC 42 shall apply to the assessor before
79 May 15 of each year in which the assessment is desired. The property owner
80 shall submit an application on forms prescribed by the assessor and shall
81 include information that may reasonably be required by the assessor to
82 determine the entitlement of the applicant and to assess the property under this
83 subsection. All such applications shall be forwarded to the assembly for
84 determination, by resolution, for a determination of the manner of assessment.
85
86. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
87 THIS THIRD DAY OF MAY 2012
88
89 KODIAK ISLAND BOROUGH
90
91 r r •�(fi
92 Jelbme M. Selby, Borough yor
93 , — ._.
94 A
tit
97 Nova M. Javier, M , Borough Clerk
Kodiak Island Borough Ordinance No. FY2012 -20
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