MEMORANDUM

TO: Ron Long, Assembly President

Members, Kenai Peninsula Borough Assembly

FROM: Gary Superman, Assembly Member

Deb Germano, Assembly Member

DATE: April 6, 2006

SUBJECT: Ordinance 2006-21, amending KPB 5.12.105 regarding eligibility requirements for the senior citizen and disabled resident exemptions

If enacted, this ordinance would require that, in order to qualify for the senior citizens and disabled residents $150,000 property tax exemption, the applicant must be eligible for the permanent fund dividend for the year of the application or the prior year. This restriction is authorized in AS 29.45.030(f). It would also require that, in order to be eligible for the balance of the unlimited tax exemption above $150,000, a person must have lived in the Kenai Peninsula borough for two years before the year that they apply for the exemption, and that they not be absent from the borough for more than 90 days in the subject year with certain exceptions. The exceptions are the same as those allowed for absence from the state under the permanent fund dividend program.

These restrictions are intended to help ensure that the senior citizen and disabled resident exemptions are available for people who are truly residents of the borough and intend to remain in the borough. Utilizing the permanent fund dividend program as a method of determining eligibility will help with properly enforcing this exemption.

The administration and assembly members have heard numerous complaints that many people who are granted the exemption are not in fact present in the state for more than half of the year. In our view, using the permanent fund dividend criteria for eligibility will aid in enforcing the requirements of residency. For the exemption that was approved by voters in excess of $150,000 this ordinance would impose greater residential requirements to better help ensure that the applicants do intend to remain in the borough. As this is an optional rather than a mandatory exemption the borough can legally impose tighter restrictions than are set out specifically in the statutes. Your consideration of this ordinance would be appreciated.