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HomeMy WebLinkAboutOrdinance No. 2582-2011Sponsored by: Council Member Moore thec/t. of / CITY OF KENAI KENALALASKA ORDINANCE NO. 2582 -2011 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING THE KENAI MUNICIPAL CODE CHAPTER 7.05, "TAXATION OF REAL AND PERSONAL PROPERTY," ADDING A NEW SUB - SECTION 7.05.090, "PERSONAL PROPERTY TAX — ASSESSMENTS - WATERCRAFT," AND AMENDING SUB - SECTION 7.05.010, "PROPERTY SUBJECT TO TAXATION" TO PROVIDE FOR EXEMPTION FROM TAXATION ALL WATERCRAFT WITH AN OVERALL LENGTH OF LESS THAN TWENTY (20) FEET. WHEREAS, the City of Kenai currently imposes an ad valorem personal property tax on all watercraft within the City of Kenai; and, WHEREAS, Kenai Peninsula Borough (KPB) Code 5.12. 150 establishes a flat tax schedule for the taxation of watercraft based upon the overall length of the watercraft; and, WHEREAS, the Borough's current Watercraft Flat Tax Schedule calls for a flat tax of $0.00 for watercraft with an overall length of less than twenty feet; and, WHEREAS, the difference in the taxes assessed between the Borough and City has led to frustration and confusion of tax payers; and, WHEREAS, a City exemption for watercraft with overall length less than twenty -feet, like the KPB taxing policy, would result in no tax due to the City on the watercraft, thereby reducing confusion and frustration expressed by City taxpayers; and, WHEREAS, AS 29.45 -050 (b)(2) authorizes a municipality to classify as to type and exempt or partially exempt some or all types of personal property from ad valorem taxes. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. Form: This is a Code ordinance Section 2. Amendment of Section 7.05.010 (a) of the Kenai Municipal Code: The Kenai Municipal Code, Section 7.05.010(a), Property Subject to Taxation, is hereby amended as follows: jj All real and personal property not expressly exempt by shall be subject to annual taxation at its full and true value based upon the actual value of the property assessed. This shall not apply to property subject to a flat tax and /or exempted from the ad valorem tax in this chapter. New Text Underlined; [DELETED TEXT BRACKETED] Ordinance No. 2582 -2011 Page 2 of 3 (b) The rate of levy of tax shall be fixed by resolution of the City Council, but the aggregate thereof shall not exceed three percent (3 %) of the assessed value of the property assessed. f� In addition to exemptions presently authorized by the Kenai Peninsula Borough, the inventory of a business held for resale in the normal course of that business is hereby classified as personal property exempt from taxation for the City of Kenai. Section 3. Amendment of Chapter 7.05 of the Kenai Municipal Code: The Kenai Municipal Code, Section 7.05, Taxation of Real and Personal Property, is hereby amended as by adding a new subsection 7.05.090, Personal property tax - Assessments - Watercraft, to read as follows: 7.05.090 Personal property tax - Assessments - Watercraft. Lai For purposes of taxation. watercraft for which the United States Coast Guard certificate of number, or U.S. or foreign documentation, or State of Alaska Department of Motor Vehicles boat registration, or a State of Alaska Department of Fish and Game number has been issued, or other form of maritime licensing have been issued by January 1 of the tax year shall be subject to ad valorem taxes of the City. This shall not apply to any class of watercraft exempted from the ad valorem tax in this chapter. (b) For purposes of taxation, the City adopts the following classification schedule for watercraft based upon the overall length of the watercraft: Class Overall Length 1 Less than 15 feet 2 15 to less than 20 feet 3 20 to less than 25feet 4 25 to less than 36feet 5 36 to less than 60feet 6 60 to less than 100feet 7 100 or more feet in length fpj For purposes of taxation Class 1 and 2 watercraft are hereby classified as personal property exempt from taxation for the City of Kenai. Section 4. Severability: If any part or provision of this ordinance or application thereof to any person or circumstance is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. New Text Underlined [DELETED TEXT BRACKETED] Ordinance No. 2582 -2011 Page 3 of 3 Section 5. Effective Date: Pursuant to KMC 1.15.0700, this ordinance shall take effect one month after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 21st day of September, 2011. ATTEST: Corene Hall, Deputy City Clerk Approved by Finance: PAT PORTER, MAYOR Introduced: September 7, 2011 Adopted: September 21, 2011 Effective: October 21, 2011 New Text Underlined DELETED TEXT BRACKETEDI \fheu #af KENAI, ALASKA y/ Rick Koch, City Manager "Village with a Past, Ci y with a Future" FINANCE DEPARTMENT 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 - 283 -7535 ext 221 / FAX: 907 - 283 -3014 From: Terry Eubank, Finance Director Date: August 31, 2011 Re: Ordinance 2582 -2011 Exempting watercraft less than twenty -foot in overall length from property tax. At the request of Councilor Moore, 1 have researched the feasibility and financial impacts of exempting watercraft with and overall length of less than twenty feet from taxation by the City. Currently the Kenai Peninsula Borough assesses watercraft using a flat tax schedule and the City assesses on an ad valorem basis. The Borough's flat tax schedule for watercraft is $0.00 for all watercraft with an overall length of less than twenty feet. The effect of the difference in taxing methodologies and the Borough's flat tax rate of $0.00 on watercraft with an overall length of less than twenty feet is taxpayers in the City with watercraft less than twenty feet receiving tax bills with no balance due to the Borough and a small balance due from the City. The finance department has received calls from citizens who were confused as to why the Borough charged no tax and the City is choosing to tax for minor amounts. There are currently ninety -five watercraft assessed on the City's behalf by the Borough with a total ad valorem value of $338,665 and generating annual tax revenue of $1,303.86 at the City's current mill rate of 3.85. The average tax bill to these ninety -five watercraft owners is $13.72. Exemption from taxation all watercraft with an overall length of less than twenty feet will reduce confusion on the part of taxpayers, create consistency in the elimination of taxes due on these watercraft between the Borough's taxing policy and the City's, and have a minimal revenue impact ($1,303.86) on the City.