[1]
Prior history: AO No. 77-205; AO No. 84-69; AO No. 89-128(S); AO No. 97-93, 7-1-1997; AO No. 98-135(S-1), 9-15-1998; AO No. 2000-65, 4-18-2000.
The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
"Deteriorated area"
means an area within boundaries designated by ordinance which meets one or more of the following criteria: unsafe, unsanitary or overcrowded buildings; environmentally contaminated; vacant, overgrown and unsightly lots of ground; a disproportionate number of tax delinquent properties; excessive land coverage; economically or socially undesirable land uses. Property adjacent to areas meeting these criteria, but which would not otherwise qualify, may be included within the deteriorated area designated in the ordinance if the assembly determines that new construction on such property would encourage, enhance or accelerate improvement of the adjacent deteriorated properties.
"Deteriorated property"
means real property that, either at the time of application for exemption or deferral or at the time of completion of the project for which an exemption or deferral is requested, is:
1. 
Residential property located in a deteriorating or deteriorated area with boundaries that have been determined by the municipality, if the property is owned by an entity that owns at least two residential properties and eight or more residential units among those properties in that deteriorating or deteriorated area; or
2. 
Commercial property not used for residential purposes or that is multi-unit residential property with at least eight residential units, and that meets one of the following:
a. 
Within the last five years, has been the subject of an order by a government agency requiring environmental remediation of the property or requiring the property to be vacated, condemned or demolished by reason of noncompliance with laws, ordinances or regulations; or
b. 
Has a structure on it not less than 15 years of age that has not undergone substantial rehabilitation, renovation, demolition, removal or replacement; or
c. 
Is located in a deteriorating or deteriorated area with boundaries that have been determined by the municipality after a public hearing.
"Economic development property"
means real or personal property, including developed property conveyed under 43 USC 1601—1629e (Alaska Native Claims Settlement Act), that:
1. 
Has not previously been taxed as real or personal property by the municipality;
2. 
Is used in a trade or business in a way that:
a. 
Creates employment in the municipality directly related to the use of the property;
b. 
Generates sales outside of the municipality of goods or services produced in the municipality; or
c. 
Materially reduces the importation of goods or services from outside the municipality; and
3. 
Has not been used in the same trade or business in another municipality for at least 12 months before the application for deferral or exemption is filed.
"Qualified inventory"
means personal property subject to taxation and consisting of goods held for sale and intended for export outside the state.
"Rehabilitation"
means repair, replacement, construction or reconstruction, including alterations and additions, having the effect of rehabilitating a deteriorated property so that it becomes habitable or attains higher standards of safety, health, economic use or amenity, or is brought into compliance with laws, ordinances or regulations governing such standards. Ordinary upkeep and maintenance shall not be deemed rehabilitation.
(AO No. 2002-103(S), § 1, 8-6-2002; AO No. 2004-116(S-1), § 1, 9-8-2004; AO No. 2009-74(S-1), § 1, 2-16-2010; AO No. 2021-62, § 1, 7-13-2021)
A. 
Application for an exemption, deferral, or renewal under this chapter shall be made in writing to the chief fiscal officer or his or her designee. The application shall contain:
1. 
A description of the property for which the application is made and the business in which it is to be used;
2. 
A description of the employment created or sustained by the property;
a. 
The requirement of this subsection does not apply to deteriorated property applications.
3. 
Demonstration that the property meets the requirements of this chapter;
4. 
Evidence that an exemption, deferral or renewal is necessary to:
a. 
The long-term viability of the business operation after expiration of the tax incentive(s); or
b. 
The economic feasibility of initiating an operation, program or project with a reasonable likelihood of long-term economic viability; and
c. 
Except for an application for deteriorated property, the proposed business operation or program or project will create additional employment for the community; and
d. 
Promote or improve the economic development of the municipality.
5. 
Evidence that an exemption, deferral or renewal will provide measurable public benefits commensurate with the level of incentive granted;
6. 
Financial statement of the applicant; and
7. 
Other information as may be required by the finance department.
B. 
The chief fiscal officer may adopt administrative procedures for determining standards for designation of areas as deteriorated.
C. 
The chief fiscal officer or his or her designee, which may be a contractor of the municipality, shall verify the eligibility for the application. The chief fiscal officer shall advise the mayor and the assembly as to the eligibility of the proposed exemption, deferral or renewal within 90 days after receiving the application from his or her designee or contractor. If the application is recommended for approval by the chief fiscal officer, a resolution may be submitted by the mayor to the assembly for action. If the application is denied by the chief fiscal officer or a resolution is not submitted by the mayor, the applicant may appeal directly to the assembly.
1. 
The chief fiscal officer may, consistent with Title 7, contract with an entity to receive and review applications for tax exemption, the renewal of tax exemption or deferral and to verify annual certifications that economic development property or qualified inventory remains eligible for exemption, pursuant to this section. If such a contract is entered into, the chief fiscal officer shall be deemed to have received the application for the purposes of subsection D of this section when he or she receives it from the contractor.
D. 
The assembly may set a public hearing on an application. The assembly may grant an exemption to the extent that the property is qualified under this chapter. The assembly shall make an effort to treat similarly situated applications requesting the same tax relief in as reasonable and equitable manner as practicable.
(AO No. 2002-103(S), § 1, 8-6-2002; AO No. 2004-116(S-1), § 2, 9-8-2004)
A. 
The owner of property shall certify annually by February 1 to the chief fiscal officer or his or her designee that the factors establishing qualification for the tax relief under this chapter upon which approval was granted remain in existence and that the property remains eligible for tax relief pursuant to this chapter. All books and records of the owner shall be subject to the inspection of the chief fiscal officer for a period of three years after the annual certification is made. If the property is determined to be wholly or partially ineligible, the tax relief granted shall terminate to the extent of the deficiency and all sums that would have been levied in that year shall be due and payable to the municipality with interest, if any is due, as if such property has been subject to regular taxation. The nature and extent of any deficiency in the taxpayer's eligibility for the tax incentive or relief or the conditions under which such was granted shall be reported to the Assembly together with a statement of the impact of the tax incentive and deficiencies on the municipality. The assembly may terminate or modify the tax incentive/relief.
1. 
The requirement of this subsection A does not apply to deteriorated property tax relief.
(AO No. 2002-103(S), § 1, 8-6-2002)
The grant or denial of an application is a discretionary act which shall not give rise to any claim against the municipality or its agents.
(AO No. 2002-103(S), § 1, 8-6-2002; AO No. 2004-116(S-1), § 3, 9-8-2004)
A. 
The municipality may, upon written application, partially or totally exempt all or some types of economic development property from real and personal property taxation under this Code for up to ten years.
1. 
The assembly may grant a partial or total exemption under this section, with or without conditions, if it finds the exemption is necessary to:
a. 
The long-term viability of the business operation after expiration of the tax incentive(s); or
b. 
The economic feasibility of initiating an operation, program or project with a reasonable likelihood of long-term economic viability; and
c. 
The proposed business operation or program or project will create additional employment for the community.
B. 
The municipality may renew an exemption granted under this section provided that the assembly finds, upon consideration of the renewal application, that:
1. 
The property continues to meet the definition of economic development property, and
2. 
That continuation of an exemption is necessary:
a. 
Pursuant to subsection A.1 of this section; and
b. 
The creation or sustaining of employment related to the use of the property.
C. 
Under this section, the municipality may only exempt all or a portion of the amount of taxes that exceeds the amount levied on other property for the school district's required local contribution under AS 14.17.410(b)(2). The municipality may not apply an exemption under this section to taxes levied for special services in a service area that is supervised by a board under chapter 27.20.
D. 
This section does not apply to inventories.
E. 
The authorization for a renewal of a tax exemption under this section may be applied to all real and personal property of a qualified applicant previously granted an economic development exemption under this chapter as now or previously constituted. Any property granted a renewal under this section may be exempt from real and personal property taxes to the full extent authorized by this section.
(AO No. 2002-103(S), § 1, 8-6-2002; AO No. 2021-62, § 2, 7-13-2021)
A. 
Deteriorated property shall be partially or totally exempt from taxation under Chapter 12.15 for up to ten years starting in the year beginning January 1 after:
1. 
An application for exemption has been approved in accordance with section 12.35.010, and
2. 
Substantial completion or beneficial occupancy of the rehabilitation, renovation, demolition, removal or replacement.
B. 
An exemption may be transferred, in whole only, to another entity or owner after substantial completion or beneficial occupancy as set forth in subsection A.2 above, or earlier when the change in ownership is required for the inclusion of low income housing, under the low income housing tax credit program or another program funding low income housing if:
1. 
The original applicant has affirmatively exercised the exemption;
2. 
The exemption authorized by state statute has not sunset; and
3. 
The transfer is recommended by the municipality and approved by the assembly by resolution.
C. 
In accordance with section 12.35.010, deteriorated property applications may be granted to defer payment of taxes on all or some types of deteriorated property for up to five years beginning on or any time after the day substantial rehabilitation, renovation, demolition, removal or replacement of any structure on the property begins. However, if the ownership of property for which a deferral has been granted is transferred, all tax payments deferred under this subsection are immediately due and the deferral ends or, if ownership of any part of the property is transferred, all tax payments are immediately due, unless the change in ownership is required for the inclusion of low income housing, under the low income housing tax credit program or another program funding low income housing, with municipal approval.
1. 
Deferred taxes shall be assessed in the year of deferral in accordance with chapter 12.15 and any appeal of an assessment of deferred taxes shall be filed in accordance with section 12.05.055 within 30 days from the date the assessment notice was mailed.
2. 
The amount deferred each year is a lien on that property for that year.
3. 
The deferral shall be effective until:
a. 
The ownership of the property for which a deferral has been granted is transferred, in whole or in part. Upon transfer, all tax payments deferred under this subsection are immediately due and the deferral ends. Deferred taxes not paid at the time of transfer shall be assessed interest and penalties from date of the transfer.
4. 
This subsection C shall not apply to a lease of all or part of the property.
D. 
Only one exemption and only one deferral may be granted to the same property under this section. An exemption and deferral granted the same property may not be in effect on the same portion of the property during the same time.
E. 
An application for deteriorated property tax relief shall be submitted prior to substantial completion of rehabilitation work.
F. 
Any amendments or revisions to an approved application including, but not limited to, extended time periods under subsequent amendments to state statute or this chapter, shall be submitted by the original applicant, prior to substantial completion or beneficial occupancy and prior to scheduled sunset of the statute authorizing the exemption or deferral, under the process set forth in section 12.35.010.
(AO No. 2002-103(S), § 1, 8-6-2002; AO No. 2004-116(S-1), § 4, 9-8-2004; AO No. 2007-69, § 1, 5-1-2007; AO No. 2009-74(S-1), § 2, 2-16-2010; AO No. 2021-62, § 3, 7-13-2021)
A. 
Subject to eligibility and qualification under this chapter, partial waiver or total exemption from municipal fees listed in this section may be recommended for development of deteriorated property or development of housing or services for homeless, low-income and workforce residents. An application for municipal fee relief shall be made in writing to the municipal manager. The application shall be subject to the requirements of this section and the review process, criteria, requirements, and municipal discretion established in this chapter for deteriorated property tax relief.
B. 
The application shall include:
1. 
A comprehensive project scope, schedule and budget;
2. 
A pro forma forecast of the project cash flows demonstrating the financial feasibility of the project and identifying the impact that the requested fee waivers will have on the project's financial results;
3. 
A narrative description and analysis showing how the project will meet or exceed established community goals and objectives of the comprehensive plan for the targeted area.
C. 
An application for partial waiver or total exemption from municipal fees may be included in an application for deteriorated property tax relief under this chapter, or submitted in a supplemental application, or submitted in a stand-alone application without a request for tax relief. The municipal manager shall identify departmental review based on the scope of the application.
D. 
Other provisions of municipal code notwithstanding, partial waiver or total exemption from municipal fees listed in this section for the development of deteriorated property shall be approved by ordinance. Municipal fee relief under this section shall not waive code compliance and does not authorize work to proceed without the permits, inspections, and land use authorizations required by law.
E. 
If partial waiver or total exemption of a fee is granted, the applicant may be required to pay the municipal fee, subject to refund to the applicant only if a certificate of occupancy is issued. Change order fees and permit application amendment fees shall not be waived for development of deteriorated property. Municipal fee relief may be granted for the following fees:
1. 
Building permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-A, 1-5 for New Construction (Commercial): New Construction (Residential): Alternations and/or Addition (Residential or Commercial): Change of Use Only: Electrical, Mechanical, Plumbing (Residential or Commercial - No Structural Work).
2. 
Demolition permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-A.6.C.
3. 
Elevator, escalator, dumbwaiter and other lift permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-F.1 and 2. Annual registration fees set out in AMC Chapter 23.10 Table 3-F 3 shall not be granted municipal fee relief by assembly resolution.
4. 
Grading, excavation and fill permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-G.
5. 
Plan review fees under AMC Section 23.10.104.13.3, set out in AMC Chapter 23.10 Table 3-B, 1. Building Permits Plan Review Fees, except that fees for expedited plan review, commercial out-sourcing plan review, and express permitting shall not be granted municipal fee relief by assembly resolution.
6. 
Inspection fees for alteration, additions, remodels, and retro-fits under AMC Section 23.10.106, set out in AMC Chapter 23.10 Table 3-C.1. Inspection or re-inspection hourly fee. Fees for inspections and re-inspections that are unscheduled, outside normal business hours, on Sundays or holidays, or for code compliance, or a fine, set out in AMC Chapter 23.10 Table 3-C, 2-6. shall not be granted municipal fee relief by assembly resolution.
7. 
Electrical Permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-D.1.B.
8. 
Plumbing Permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-E.1.A.
9. 
Grading, excavation and fill permit fees under AMC Section 23.10.104.13.2, set out in AMC Chapter 23.10 Table 3-G.
10. 
Land use permit fees under AMCR Section R21.20.001.
11. 
Zoning fees for services under AMCR Section R21.20.002.
12. 
Platting fees for services under AMCR Section R21.20.003.
13. 
Permit and inspection fees under AMC chapter 24.30 for temporary uses during construction.
F. 
Inclusion of workforce housing. The application for municipal fee relief shall state whether the municipal fee relief will assist the applicant in the inclusion of homes for workforce households, and the applicant's level of commitment for inclusion of workforce homes, if any. The inclusion of workforce housing is a factor in the exercise of municipal discretion under this section. To qualify for inclusion as workforce housing, these conditions shall apply:
1. 
Workforce homes shall mean homes developed on the same site as the proposed development and made affordable for sale, rent, or lease as permanent, primary year-round residences for families and individuals with household income at or below 120 percent of the median annual income for the Anchorage metropolitan statistical area, adjusted for household size, as determined annually by the United States Department of Housing and Urban Development.
a. 
For rental housing, affordable means that the rent will be no more than 80 percent of the United States Department of Housing and Urban Development (HUD) Fair Market Rents (FMR) adjusted annually by the United States Department of Housing and Urban Development.
b. 
For ownership housing, affordable means that the total monthly payments, including principal, interest, taxes, insurance, homeowner's association fees and assessments, will not exceed 95 percent of the median purchase price as determined by the Municipality of Anchorage under the United States Department of Housing and Urban Development Home investment Partnership Program.
2. 
Workforce homes in the project shall be mixed with market rate housing units and shall not be clustered together or segregated in any way from market-rate units. The exterior appearance of workforce units shall be made similar to market-rate units by the provision of exterior building materials and finishes substantially the same in type and quality. The workforce units must be the same size, in terms of square footage and number of bedrooms, as the market rate units. If the project contains a phasing plan, the phasing plan shall provide for the development of workforce units concurrently with the market-rate units.
3. 
Workforce homes shall continue to be affordable to households at or below 120 percent of the annually adjusted median household income for at least 15 years commencing upon issuance of the certificate of occupancy for the development. If the project has a phasing plan, the 15-year period commences upon the issuance of the certificate of occupancy for each phase.
4. 
Prior to the issuance of a building permit for any portion of the project, the applicant shall have entered into a workforce home development agreement with the municipality. The development agreement shall set forth the commitments and obligations of the municipality and the applicant.
5. 
Prior to the issuance of a building permit for any portion of the project, the applicant shall record a declaration of covenants, conditions, and restrictions on the property to ensure the continued affordability of the workforce housing units in accordance with this section.
G. 
Compliance requirements. Compliance requirements shall include, but are not limited to, the following:
1. 
Development of the property shall be subject to public site plan review by the planning and zoning commission.
a. 
The parcel, or a larger unit of a phased development of which the parcel is a part, shall be developed in conformance with an approved site plan.
b. 
Development of the property shall comply with the comprehensive plan, district plan and neighborhood plan in effect at the time of the application, or as otherwise set out in the approval.
2. 
The applicant shall submit annually a financial performance report, including an income and expense budget showing performance against the budget, and a status report on the inclusion of work force housing, showing occupancy, financial performance, other matters required by the workforce home development agreement or made a condition of approval, for each year of the compliance period.
a. 
If the annual report is not timely provided, or shows material inconsistency with what was presented in the application, or the development is not in compliance with the terms of approval, the municipality shall give notice to the applicant that the municipal fee waivers are revoked and subject to repayment as set out in the approval or the workforce home development agreement.
(AO No. 2009-74(S-1), § 3, 2-16-2010)
A. 
Real and personal property taxes for property exempted from tax under this chapter shall be due and payable in the same manner as nonexempt property taxes as billed by the municipality, except:
1. 
If the application for exemption, deferral or renewal is approved by the assembly or an annual certification is approved prior to the date the taxes are due, the amount of the exemption shall be credited against the real and personal property taxes.
2. 
If the application for exemption, deferral or renewal is approved by the assembly or an annual certification is approved after the date the taxes are due and paid, the amount of the exemption shall be refunded to the person who paid the tax.
(AO No. 2002-103(S), § 1, 8-6-2002)