Following a hearing, the borough assessor rejected Tyonek’s claim of exemption on the grounds that although the property was no longer leased it was developed. Tyonek appealed this determination to the superior court. The superior court decided that the parcel was exempt, stating: “It is clear that [Tyonek] is entitled to a moratorium on taxation so long as the property lies unleased or otherwise unproductive and idle.” From this decision the borough appeals.
The Kenai Peninsula Borough (borough) appeals from a decision of the superior court which ruled that a tax parcel owned by the Tyonek Native Corporation (Tyonek) was exempt from taxation for 1985. The parcel consists of 385 acres located on the west side of Cook Inlet. In the early 1970’s, Tyonek leased the parcel to Kodiak Lumber Mills, which constructed substantial improvements. These include a chip mill, warehouses, a 1475-foot dock, an air strip, 15 mobile homes, 4 bunk houses, 5 houses, 6 duplexes, 3 shop buildings, an office building, a recreation hall, a mess hall, a 400,000 gallon fuel tank farm, and sewage, water and electrical utilities. Kodiak Lumber Mills used the property until it went bankrupt in 1983. Tyonek then took possession. During the period the parcel was leased to Kodiak Lumber Mills it was included on the borough tax rolls.In 1985 Tyonek claimed that the parcel was exempt from taxation under 43 U.S.C. § 1620(d), which provides that real property conveyed to village corporations under the Alaska Native Claims Settlement Act (ANCSA) is exempt from property taxation for 20 years so long as the property is “not developed or leased to third parties”.[1] Tyonek also relied on a state statute, AS 29.45.030, which exempts from property taxation land which is exempt under 43 U.S.C. § 1620(d).[2] AS 29.45.030(m)(1) purports to define the word “developed” as used in the federal statute “unless superseded by applicable federal law” to mean “a purposeful modification of the property from its original state that effectuates a condition of gainful and productive present use without further substantial modification . . . .” We have discussed at length the legislative history of 1620(d) as well as its interaction with the Alaska National Interest Lands Conservation Act (ANILCA) and AS 29.45.030 in a companion case, Kenai Peninsula Borough v. Cook Inlet Region, Inc., 807 P.2d 487 (Alaska, March 15, 1991).Following a hearing, the borough assessor rejected Tyonek’s claim of exemption on the grounds that although the property was no longer leased it was developed. Tyonek appealed this determination to the superior court. The superior court decided that the parcel was exempt, stating: “It is clear that [Tyonek] is entitled to a moratorium on taxation so long as the property lies unleased or otherwise unproductive and idle.” From this decision the borough appeals.
Adds precedent that influences how ANCSA corporations, regulators, and shareholders interpret governance rights and remedies.