Anchorage Board of Equalization — Property Taxes

Jolly Roger of “Calico Jack” Rackham
Image in public domain

The annual right of passage for Anchorage property owners is the receipt in the mail of the Anchorage Board of Equalization green property appraisal card.  If you do not agree with the property value as assessed you may appeal the valuation.  You may appeal on the grounds that the appraisal is “unequal, excessive, improper or under evaluation.” Continue reading “Anchorage Board of Equalization — Property Taxes”

Excessive Police Responses

  Anchorage, like many other big cities nationwide, has created a whole new field of revenue generation.  Traditionally we all just sucked it up that there would be nice parts of town, bad parts of town, and a few parts of town that were truly horrendous.  The folks up in the mountain chalets of Hillside or Rabbit Creek would comfortably look down upon the rest of us, knowing and accepting the fact that their hard earned property taxes would go to police responses elsewhere.  And, despite a bit of angst over State Trooper versus Anchorage Police response areas, were mostly OK with that.

But with ever increasing budget needs, the seemingly ever decreasing available funds, municipalities like Anchorage are always seeking additional sources of revenue.  Heavily taxed home owners are getting sick and tired of having to foot t he bill for that ever increasing police budget.  Anchorage, like most cities, also often has problems with a few gregarious hot spots of crime and infamy.  Those truly notorious places that seem to warrant their very own police substation.  Crack houses, hotels of ill repute, fighting in-laws, you name it.  So, in order to kill two birds with stone,  Anchorage has adopted Excessive Police Response regulations.

Excessive Police Response regulations allow municipalities and other jurisdictions to set limits upon how many times police may respond to a certain address, and charge fees for each response beyond that number.  Seems simple enough.  But this does come with questions:  what happens in medical emergencies?  how about the ol’ man beatin’ his ol’ lady around every Saturday night?  How about child abuse calls?  Will the number of responses allowed prevent folks from calling when they really need help?

The State of Alaska has statutes that outline what municipalities and others may or may not do in these situations.  Fortunately the statutes are pretty specific, and cover everything from the amount allowed per call, notice to the property owner that polices responses are happening, and certain exemptions that do not count toward the excessive number.

What does this mean for you?  Well,  hopefully nothing.  But are you a property owner?  Are you a slum lord extraordinaire owning several blocks of housing in the seedier parts of town?  Perhaps you have just one problem tenant that enjoys a, shall we say, second income from nocturnal recreational pharmaceutical sales?  Anchorage’s Excessive Police Response regulations place the burden not just on the resident of the property being responded to, but to the property owner as well.  Considering who is likely to actually have money to pay, I think we all know who it is the Muni would  be coming after.

The Excessive Police Response statutes and regulations can be complicated for those not used to reading reg-speak.  What does the State require of municipalities? Do the Muni’s regulations follow the requirements of the enabling state statutes.  When confronted with notices of pending fines one should look carefully to ensure the statutes and regulations are  being followed correctly.  But don’t waste time, failure to follow through on any required administrative  hearings may waive any claim you have against the Muni.  Study the regulations yourself, or call someone who already knows how they work.  As in anything, know the law and know your rights.

 

A Negligence Primer — Good Samaritan Defense

This was originally written for my EMS friends, but the basic concepts still apply:  duty, breech, causation, and damages.

Setting the stage:  It’s 3am (of course), and you just laid down after watching a Star Trek – The Next Generation marathon when the tones go off, and the dispatcher announces another of a long line of winter vehicle rollovers.  Blah, blah, blah, icy roads and drunk drivers.  Wind and snow, minor extrication, neck pain and minor bleeding from the head, the patient intoxicated but friendly.  C-collar, the requisite uncomfortable backboard, and couple of big IVs just because, and a quick drop off at the local ER.  The next afternoon you hear the patient began seizing shortly after you left the ER, and died a short time later from a massive subdural.  Three years later you get the summons and complaint, naming you, your partner, your duty supervisor, your service, the hospital, the ER Doc, the radiologist, and the high school janitor as defendants in a lawsuit claiming negligence.

First, let’s dispense with the Good Samaritan defense.  You were on duty and paid a decent hourly wage.  Therefore, you’re not covered under the statute.

Negligence in the common parlance simply means you screwed up and you should have known better.  However, in legal terms, “negligence” has a very specific meaning, and very specific elements that require evidence to reach the conclusion that someone is “legally” negligent.  If the plaintiff is unable to prove each element of negligence, then the defendant cannot be found liable.

In order to be legally negligent, the plaintiff must show that the defendant had a duty to act (duty), that the defendant failed to follow the standard of required conduct (breach), that the failure was the cause of harm to the victim (causation), and that actual harm resulted (damages.)  These four elements: duty, breach, causation, and damages, must all be proven in order to prevail.  The Good Samaritan statute, which all EMTs seem to consider when thinking of negligence, speaks to two levels of negligence – simple negligence and gross negligence.  Outside of this narrow statute, however, the level of egregiousness is relevant only in the amount of punishment given.

Let’s flesh out this discussion a bit.  “Duty” is the easy one – did you have a duty to provide care to the patient.  Yes or no.  In the above case, for example, you were on duty and being paid to respond.  Therefore, yes, you had a duty.  This is the easiest of the four elements to prove, or to defend.  You’re off duty and drive past an accident scene which already has numerous responders present.  No duty, no negligence claim.  Volunteers can sometime have a bit more difficult time, but the standard becomes whether you in any way held yourself out at the time of the event to be available to respond.  If you were “on call,” duty attaches, if not, duty likely does not attach.

“Breach” is slightly more difficult to prove, but still often relatively easy.  Did you do (or not do) something beyond or outside the industry standard?  In other words, did you breach your duty to treat a particular illness or injury in an appropriate manner?  This is gross simplification, of course, because evidence would be required at trial about what, exactly, was the “standard of care” required in the given circumstance.  This makes this particular element the most wishy-washy, as dueling experts vie for the attention of the judge or jury.

“Causation” is the often missed elements by the lay public.  This means that your actions, or inactions, actually caused the harm being alleged.  If your patient was hit in the head by a pipe wrench, and you later drop him injuring his knee, you’re only responsible for the knee injury, not the whole shebang.  This can often be difficult to determine.  For example, a COPD patient presents with severe respiratory distress.  You provide high flow oxygen, but not CPAP; when the patient continues to deteriorate you elect to sedate and intubate, causing dental trauma, increased swelling to the throat and worsening of the distress.  The patient eventually arrests due to extreme hypoxemia.  How much was your fault, if any?  Would she have continued to deteriorate regardless of your actions?

“Damages” is reasonably straight forward, if the above elements have been met and determined.  First, were there actual injuries that caused harm to the patient?  It’s the “no harm, no foul” rule of negligence.  You should have given Amiodarone, not lidocaine, for an SVT according to your medical standing orders.  But the patient persevered and lived despite your best efforts.  You had a duty to act, you breached that duty, but you did not cause compensable harm.  While you may be on the soup line because you dangerously violated your standing orders, at least you won’t end up in court.   However, if actual harm was caused by you, then you are responsible for those damages.

One can be negligent in the common sense but not be legally negligent.  While this may be of little real comfort, EMTs should have a basic understanding of the general concepts of legal negligence.  As for the scenario mentioned above?  A good attorney will bring in a lot of questions.  Was the alcohol masking signs and symptoms of head trauma the EMTs and hospital should have recognized earlier?  Should the patient have been taken to a trauma center rather than just the local ER?  Did the EMTs adequately describe for the ER staff the circumstances surrounding the crash such that the physician and staff could better assess the totality of the patient’s potential injuries?  Obviously there aren’t enough details to make any reasoned response, and in the end it may take a judge or jury to flesh out all the answers.  Such is the nature of the legal world.

Are You An Employer? Workers Compensation Required?

Do you laugh at the home and garden shows on cable TV?  Do you snort in derision watching those folks spend tens of thousands of dollars on contractors?  Do you smirk to yourself because you know you can do the same thing better, faster, and cheaper?  Well of course you do, you’re an Alaskan.  Even before Home Depot and Lowes came to town we had Spenard Builder’s Supply, Eagle Hardware, and you could quote the price of a spanner wrench at your local ACE store.  When it comes to adding on or building from scratch, no one beats an Alaskan at getting things done.  And not just with Visqueen, blue tarps, and duct tape, either.

On a normal day you could sheetrock a hanger holding Alaska Airlines’ latest 737-stretch in an easy day’s work.  But what happens when you only have a morning?  Perhaps your spouse has lined you up for a snowshoe softball game this evening, or some fish is running in some creek somewhere.  Unfortunately your best bud is rough-necking on the Slope this week, and your brother is sleeping off a 4-pack of wine coolers on a beach in Hawaii.  What now?

Well, normally if you needed a little extra help you’d head on down to Beans Café where there are plenty of folks looking for honest work.  The modern version is to check on Craig’s List from your smartphone while driving to the local man store.  Either way you’ll find some chap willing to hammer, screw, lay tile, hang ‘rock, or just generally clean up your mess when you’re done.  For a hundred bucks or a promise of fresh salmon, Alaskan men will do most anything.

Unfortunately, you have now begun to tread upon the realm of The Man.  The Government.  The State.  The usurious villainy of a democratic republic.  A homeowner, or anyone else for that matter, who chooses to hire someone to do something, must comply with all the rules and regulations just like those fancy contractors who have websites and their names on their pickups.  This can be a rude awakening for many.  You just needed someone to haul Trex around the house while you’re putting on the hot tub deck, or perhaps someone to mix and pour concrete on the motorhome pad next to the garage.  But if you’re paying them, you’re an employer in the eyes of the state.

Fortunately this probably doesn’t mean you’ll have to read up on Obamacare.  But you do have certain responsibilities.  Perhaps the foremost of real concern is workman’s compensation.  Didn’t come to mind?  Paying insurance for just hiring some dude off the internet now and again?  Actually, yes, you are responsible.  If that poor fella trips over the water hose, bangs his thumb with a hammer, or slips and cracks his head while shoveling your driveway, he is a worker by Alaska standards and you are his employer.  It is necessary to report to the state that you have worker’s compensation insurance, and of course pay necessary premiums.

There are other requirements, too, such as keeping records of your employees, tax records, immigration forms, minimum wage laws, etc. etc. etc.  If nothing ever goes wrong one never has to worry, right?  More or less.  Of course our laws aren’t written for when things go right, but for when the unexpected happens.  Let’s say that poor fella really does get hurt.  There he is banging away with the nail gun and the compressor hose bursts.  Safety glasses are for wimps, so naturally splinters and other debris fly straight to his face blinding him for all eternity.  Or at least until the trial is over.  The State will try to hold you responsible for the entirety of his medical care and later disability, and will be knocking on your door grinning from ear to ear.  Actually you’ll get a nasty little letter letting you know that a worker’s comp claim has been filed, the State presumes you are responsible for the costs, and, by the way, there will be fines galore for not having the proper insurance in place and on file.

So what does this all actually mean?  The average Joe Alaska isn’t going to run out and get worker’s compensation insurance.  He’s also not going to be checking the bonafides of his day help.  He may not be keeping records or reporting employment taxes to the IRS.  This is Alaska, free man’s country, where we take care of things up front and don’t need nor want the government standing around looking over our shoulder making sure the paint is the proper color, consistency, and lead-free.  This ain’t Bolder or San Francisco, it’s Willow, or Tok, or Aleknagik.  What it means is that we need to carefully consider what we’re doing, how we’re doing it, and who’s doing it.  We  need to remain aware that we are responsible if something untoward happens.  After an accident you’ll probably think hiring that licensed small business contractor who already has the proper employment credentials and insurance would have been faster and cheaper.  He hires the fella from Beans or off Craigslist and actually insures them.

Will anything change after reading this little blerb?  Likely not, but us attorneys are around when the unthinkable or the unknowable happens.  So if your brother is snoring away on a tropical isle and your high school buddy is raking in big coin in the oil patch and you still need help slinging mud, keep in mind you are an employer, and subject to the crushing wheels of justice.

Federal Tax Liens

Understanding a Federal Tax Lien

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. A federal tax lien exists after the IRS:

  • Assesses your liability;
  • Sends you a bill that explains how much you owe (Notice and Demand for Payment); and
  • You neglect or refuse to fully pay the debt in time.

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

How to Get Rid of a Lien

Paying your tax debt – in full – is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt.

Options: When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.

  • Discharge of property — Allows property to be sold free of the lien. The seller or buyer can submit Publication 783, Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien.
  • Subordination — Does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. For more information review Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien.
  • Withdrawal — Removes the public notice and assures that the IRS is not competing with other creditors for your property. If applying for a withdrawal, use Form 12277, Application for the Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien.

How a Lien Affects You

  • Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
  • Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
  • Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.
  • Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

Avoid a Lien

You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.

Lien vs. Levy

A lien is not a levy. A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.

Clayton Walker

Alaska Corporation Voluntary Dissolution Outline

Outline for Alaska Corporate Dissolution.

A. Corporation Has Not Issued Stock or Commenced Business.

1. If the corporation has not issued stock and has not commenced business, a voluntary dissolution may be authorized by a majority of the incorporators.

B. Corporation has issued stock or has commenced business.

1. If the corporation has issued stock and has commenced business, the approval of the shareholders is required for voluntary dissolution of the corporation.

2. Shareholder approval is obtained as follows:

a. The board of directors of the corporation adopts a plan of liquidation and refers the plan to the shareholders for action.

b. A majority of shareholders, and a majority of the holders of each class of shares entitled to vote as a class, approve the plan of liquidation.

II. Filings and Notice.

A. Filings.

1. Under the Alaska Business Corporation Act, a Certificate of Election to dissolve is filed initially with the Alaska Corporations Commissioner. Articles of dissolution are filed after the completion of the winding up and liquidation of the corporation. A.S. 10.06.608.

2. Articles of dissolution stating compliance with A.S. 10.06.620.  A.S. 10.06.623.

B. Revocation.

1. The dissolution may be revoked prior to any actual distributions to shareholders under A.S. 10.06.610.

2. Revocation of dissolution is effective on filing.

C. Notice.

1. The corporation must give notice of the dissolution to holders of known claims against the corporation.  The notice must provide for a procedure and deadline for filing claims against the corporation.  See, A.S. 10.06.615 and .620

2. In order to notify holders of unknown claims, notice of the dissolution is published by the corporation in a newspaper. See, A.S. 10.06.653 (The heading discusses publication issues in the context of court and non-court directed winding up of the enterprise.  However, the actual provisions only discuss court winding up.) This notice must also provide for a procedure for filing claims against the corporation.

D. Effect.  The effect of dissolution is to cease the existence of the enterprise for all purposes other than suits, legal proceedings and actions by shareholders, directors and officers.  A.S. 10.06.625.

III. Winding Up and Liquidation.

A. Cessation of Business.

1. The operation of the business of the corporation must cease on or before the filing of certificate of intent to terminate, except as necessary to wind up the business operations and preserve good will.  A.S. 10.06.615.

2. The only continuing activity of the corporation should be that necessary to wind up its affairs and distribute its assets in liquidation.

B. Assemble Assets.

1. The corporation must assemble its assets and sell or otherwise dispose of those assets that will not be distributed to shareholders or to claimants.

2. Particular care should be given to identifying assets such as prepaid items and contingent claims that might otherwise be overlooked.

C. Satisfy Obligations and Liabilities.

1. The corporation must pay or provide for payment of all corporate obligations and liabilities and all claims against the corporation.

2. In the case of disputed or contingent claims, provision may be made for payment by depositing funds into an escrow or liquidating trust.

D. Distribution to Shareholders.

1. The assets of the corporation remaining after payment of or providing for claims should be distributed to the shareholders.

2. All known assets should be transferred with appropriate forms of transfer or conveyance, such as deeds, bills of sale, or assignments.

3. Unknown assets can be transferred to shareholders by an assignment specifically covering such assets.

4. A statement of the fair market value of all assets transferred should be provided by the corporation to each shareholder. This statement will be required for the shareholders’ income tax returns.

E. Stock Certificates.

1. All stock certificates of the corporation should be collected and canceled.

2. Stock certificates should be collected from shareholders in exchange for the assets distributed to them.

F. Timing.

1. If installment obligations of the corporation will be distributed in the liquidation, the liquidation should be completed within 12 months following the adoption of the plan of liquidation to enable noncorporate shareholders to report gain attributable to the installment obligations on the installment basis.

2. In other cases, the liquidation should proceed as quickly as possible. A protracted liquidation may result in the corporation’s being subjected to personal holding company or accumulated earnings taxes.

IV. Tax Filings.

A. Corporation.

1. Form 966 must be filed by the corporation with the Internal Revenue Service within 30 days after adoption of the plan of complete liquidation.

2. Forms 1099-DIV must be issued to all shareholders who have received $600 or more in the liquidation by January 31 of the year following the liquidation, and copies of these forms must be filed with the Internal Revenue Service, accompanied by Form 1096.

3. The corporation’s final income tax return must be filed by the 15th day of the third month following the close of its final tax year, which will generally be the date on which its assets are distributed to shareholders.

B. Shareholders.

1. Shareholders must report any gain or loss on the liquidation on their income tax returns for the year in which the liquidation occurs. If the shareholders have a loss, it may qualify as an ordinary loss under IRC §1244.

2. Shareholders must file certain information regarding the liquidation with those returns.

The following is my Outline for Corporate Dissolution.

 

A. Corporation Has Not Issued Stock or Commenced Business.

1. If the corporation has not issued stock and has not commenced business, a voluntary dissolution may be authorized by a majority of the incorporators under the Model Business Corporation Act.

2. If the corporation has not issued stock or has not commenced business, a voluntary dissolution may be authorized by a majority of the incorporators or by a majority of the members of the initial board of directors under the Revised Model Business Corporation Act.

B. Corporation has issued stock or has commenced business.

1. If the corporation has issued stock and has commenced business, the approval of the shareholders is required for voluntary dissolution of the corporation.  Under the Model Business Corporation Act, shareholder approval is required if the corporation has either issued stock or commenced business.

2. Shareholder approval is obtained as follows:

a. The board of directors of the corporation adopts a plan of liquidation and refers the plan to the shareholders for action.

b. A majority of shareholders, and a majority of the holders of each class of shares entitled to vote as a class, approve the plan of liquidation.

II. Filings and Notice.

A. Filings.

1. Under the Alaska Business Corporation Act, a Certificate of Election to dissolve is filed initially with the Alaska Corporations Commissioner. Articles of dissolution are filed after the completion of the winding up and liquidation of the corporation. A.S. 10.06.608.

2. Articles of dissolution stating compliance with A.S. 10.06.620.  A.S. 10.06.623.

B. Revocation.

1. The dissolution may be revoked prior to any actual distributions to shareholders under A.S. 10.06.610.

2. Revocation of dissolution is effective on filing.

C. Notice.

1. The corporation must give notice of the dissolution to holders of known claims against the corporation.  The notice must provide for a procedure and deadline for filing claims against the corporation.  See, A.S. 10.06.615 and .620

2. In order to notify holders of unknown claims, notice of the dissolution is published by the corporation in a newspaper. See, A.S. 10.06.653 (The heading discusses publication issues in the context of court and non-court directed winding up of the enterprise.  However, the actual provisions only discuss court winding up.) This notice must also provide for a procedure for filing claims against the corporation.

D. Effect.  The effect of dissolution is to cease the existence of the enterprise for all purposes other than suits, legal proceedings and actions by shareholders, directors and officers.  A.S. 10.06.625.

III. Winding Up and Liquidation.

A. Cessation of Business.

1. The operation of the business of the corporation must cease on or before the filing of certificate of intent to terminate, except as necessary to wind up the business operations and preserve good will.  A.S. 10.06.615.

2. The only continuing activity of the corporation should be that necessary to wind up its affairs and distribute its assets in liquidation.

B. Assemble Assets.

1. The corporation must assemble its assets and sell or otherwise dispose of those assets that will not be distributed to shareholders or to claimants.

2. Particular care should be given to identifying assets such as prepaid items and contingent claims that might otherwise be overlooked.

C. Satisfy Obligations and Liabilities.

1. The corporation must pay or provide for payment of all corporate obligations and liabilities and all claims against the corporation.

2. In the case of disputed or contingent claims, provision may be made for payment by depositing funds into an escrow or liquidating trust.

D. Distribution to Shareholders.

1. The assets of the corporation remaining after payment of or providing for claims should be distributed to the shareholders.

2. All known assets should be transferred with appropriate forms of transfer or conveyance, such as deeds, bills of sale, or assignments.

3. Unknown assets can be transferred to shareholders by an assignment specifically covering such assets.

4. A statement of the fair market value of all assets transferred should be provided by the corporation to each shareholder. This statement will be required for the shareholders’ income tax returns.

E. Stock Certificates.

1. All stock certificates of the corporation should be collected and canceled.

2. Stock certificates should be collected from shareholders in exchange for the assets distributed to them.

F. Timing.

1. If installment obligations of the corporation will be distributed in the liquidation, the liquidation should be completed within 12 months following the adoption of the plan of liquidation to enable noncorporate shareholders to report gain attributable to the installment obligations on the installment basis.

2. In other cases, the liquidation should proceed as quickly as possible. A protracted liquidation may result in the corporation’s being subjected to personal holding company or accumulated earnings taxes.

IV. Tax Filings.

A. Corporation.

1. Form 966 must be filed by the corporation with the Internal Revenue Service within 30 days after adoption of the plan of complete liquidation.

2. Forms 1099-DIV must be issued to all shareholders who have received $600 or more in the liquidation by January 31 of the year following the liquidation, and copies of these forms must be filed with the Internal Revenue Service, accompanied by Form 1096.

3. The corporation’s final income tax return must be filed by the 15th day of the third month following the close of its final tax year, which will generally be the date on which its assets are distributed to shareholders.

B. Shareholders.

1. Shareholders must report any gain or loss on the liquidation on their income tax returns for the year in which the liquidation occurs. If the shareholders have a loss, it may qualify as an ordinary loss under IRC §1244.   Shareholders must file certain      information regarding the liquidation with those returns.

 

Fun at work

“Unless you have fun, you can’t truly bring your intellect, your skills, and your deep knowledge to push the boundaries of the unknown, to invent and create.” Vandebroek

Alaska Eminent Domain

Alaska Statutes address Eminent Domain at 09.55.240 through .460.  When a governmental entity makes a taking, there are actually two portions to the valuation process.   First, the taken parcel’s value and the remaining parcel’s diminished value.   The government will  focus the target’s attention solely on parcel taken.  Typically people will forget to consider the affect to the remaining parcel.

Government offers frequently select valuation methods that support low prices.  For example they will suggest that vacant land value should be measured by a gross proportion of the whole.  By measuring the property as a percentage of gross they pay the lowest cost on the valuation.

I advise against providing the entity with a right of entry on the premises prior to resolving the property valuation and damages issues.  Absent a project deadline the entity has no pressure related to making a full and fair offer on the property.  You will generally fair better by withholding the right of entry permit.  The following provides a summary of a few of the important provisions in Alaska.

Valuation Date

 

  1. The valuation date for the taking is the day the government enters the property and begins construction.  Alaska Stat. 09.55.280. Wickwire v. City & Borough of Juneau, 557 P.2d 783 (Alaska 1976).
  2. The taking “. . . shall be located in the manner that will be most compatible with the greatest public good and the least private injury. . .”  Alaska Stat. 09.55.280.
  3. If the property boundaries change at all, the agency must apply for and obtain a preliminary replat approval before the acquisition and then shall also obtain a final plat.  Alaska Stat. 09.55.275.

Hearings

  1. If you object to the taking, the extent of the taking, the value of the consideration paid, the manner or nature of crossings you have a right to a hearing before the court.  Alaska Stat. 09.55.300.
  2. You have a right to a jury trial as to damages and the value of property.  Alaska Stat. 09.55.320.
  3. If you do not reach an agreement on value and damages then in a court action value is established on the day the suit is filed.  Alaska Stat. 09.55.330.
  4. If those attempting to condemn the property file an action, they may also seek an order to allow them to take possession before the value is determined.  Alaska Stat. 09.55.380.  When they do this then they must also pay interest from the date of suit until the final value determination.  Alaska Stat. 09.55.330.
  5. If there is a hearing and judgment rendered, the entity taking the property must pay within 30 days of judgment.  Alaska Stat. 09.55.350.
  6. If they fail to pay then you are entitled to vacate the condemnation award.  Alaska Stat. 09.55.360.

Damages

  1. When the state takes a parcel you are entitled to the value of the parcel and all the appurtenances on the parcel.  Alaska Stat. 09.55.310(a)(1)
  2. When the state takes only a portion of a larger parcel you are entitled to the damages related to the remaining parcel that they failed to take.  Alaska Stat. 09.55.310(a)(2).
  3. When the benefit of the state’s investment to a parcel not taken, exceeds the damages to the remaining parcel, you only get the value of the parcel taken.  Alaska Stat. 09.55.310(a)(3).
  4. As far as practicable, compensation shall be assessed for each source of damages separately.  Alaska Stat. 09.55.310(b).
  5. Alaska has very little settled case law on the sources and methods of establishing other damages.  The list from other jusidictions can be very long.  Some of the more common Damages Sources include:
    1. Just compensation for real estate that is taken;
    2. Severance damages to property impacted, but not directly taken;
    3. Tenant lease value damages;
    4. Property and business fixture damages;
    5. Loss of going concern damages when a business is destroyed by a taking;
    6. Residential and homeowner relocation damages;
    7. Business relocation damages;
    8. Highway and right-of-way accesses damages;
    9. Construction related damages;
    10. Minimum compensation damages to make business owners whole;
    11. Diminution of value damages in land use cases;
    12. Attorney’s fees payments to landowners; and,
    13. Loss of land development potential damages.

To establish the individual components of each of these elements of damages you will need to have admissible evidence.  The evidence will need to be reasonably certain in the measurement of the damages.  You typically will need to enlist the services of not only counsel but, appraisers, site analysts and engineers to evaluate and present evidence supporting the value of these damages.

 

Valuation

  1. Valuation is based on “fair market value” or the price a willing buyer would pay a willing seller for the property.  State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  2. Value is established by what the owner has lost and not what the condemner gains.  Gacksetter v. State, 618 P.2d 564 (Alaska 1980) (owner of residential property lost residence and value was set based on that loss not on the value of the gravel pit developed after condemnation).
  3. Owner’s loss in value does not include the value of the project giving rise to the project.  But, if the taking is unrelated to another project that adds value to the owner, the owner does capture the other projects value.  See, e.g., State v. Alaska Continental Dev. Corp. 630 P.2d 977 (Alaska 1980).
  4. Owner’s improvements made in anticipation of condemnation is ordinarily not relevant or admissible even with knowledge of the prospects of taking; unless, the improvements are made solely to enhance their award.  Babinec v. State, 51 P.2d 563 (Alaska 1973) rev’d on other grounds, 586 P.2d 966 (Alaska 1978).
  5. Valuing a larger parcel generally results in a lower value.
  6. Severence Damages

Attorney’s fees and experts

You are not entitled to be compensated for your experts or your counsel unless the fact finder determines that the value the government offered you was more than 10% less than the value they should have offered to you.  This rule pretty much guarantees that the government is always going to take your property at a discount to the actual full and fair value.

Alaska AHFC Energy Rebate should Not Be Taxable

Q. IS THE AHFC HOME ENERGY REBATE TAXABLE INCOME? I HEARD THAT I WILL RECEIVE A 1099 FORM FROM AHFC.   AHFC has received a legal opinion from the State of Alaska Department of Law that requires AHFC to issue a 1099-G to individuals who receive payments under this program. It is up to the recipient to contact their tax advisor about any possible tax consequences. – See more at: .  Indeed AHFC reports the amount in block 6 and reports the amount as a “taxable grant.”

The Internal Revenue Code provides for the exclusion from income of Energy conservation subsidies provided by public utilities under 26 USC § 136.

(a) Exclusion

Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.
(b) Denial of double benefit
Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any subsidy which was provided with respect to such expenditure. The adjusted basis of any property shall be reduced by the amount excluded under subsection (a) which was provided with respect to such property.
(c) Energy conservation measure
(1) In general
For purposes of this section, the term “energy conservation measure” means any installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.
2) Other definitions
For purposes of this subsection—

(A) Dwelling unit

The term “dwelling unit” has the meaning given such term by section 280A (f)(1).
(B) Public utility
The term “public utility” means a person engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers. For purposes of the preceding sentence, the term “person” includes the Federal Government, a State or local government or any political subdivision thereof, or any instrumentality of any of the foregoing.
(d) Exception
This section shall not apply to any payment to or from a qualified cogeneration facility or qualifying small power production facility pursuant to section 210 of the Public Utility Regulatory Policy Act of 1978.
Other Precedent
There are no reported decisions as of the date of this post.  There are only three private letter rulings regarding the statute and its application.  The letter agreements can only be relied upon by the parties that obtained the letter rulings.  However, at least two of those letter rulings support the finding that Alaska Homeowners should not be paying tax on the AHFC energy rebates.  The other ruling appears to not be relevant.

Utility customers participating in test of “smart grid” technology utilizing new solar photovoltaic system to be installed in homes by taxpayer utility were not required to include value thereof in income per IRC § 61 because same was excludable as IRC § 136 “energy conservation measure;” nor was IRC § 6041 information reporting required. Private Letter Ruling 201046013, 2010 PLR LEXIS 2352.

As IRC § 136 did not apply to homeowner who received one-time renewable energy credit from utility upon installation of residential renewable energy system, homeowner was required to include gain from sale of associated environmental credits and benefits triggered by resulting electricity generation in income and to credit for 30% of expenditure. Private Letter Ruling 201035003, 2010 PLR LEXIS 1080.

Payments to residential customers by exempt entity to promote energy efficiency through state program were not income to recipients under I.R.C. § 61 but were energy conservation subsidies excluded under section 136; because payments were not income to customers, entity did not have to report payments under section 6041. Private Letter Ruling 200717010, 2007 PLR LEXIS 93.

It would be nice if AHFC would obtain a private letter ruling establishing that Alaska homeowners are not liable for taxes on the AHFC Energy rebate.  The cost of the letter agreement exceeds the benefit to any single homeowner.  But, AHFC would establish a lot of good will and keep more money in Alaska instead of shipping it off to DC.  Instead, they issue the 1099 and give you the following advice.  The IRS also provides advice here.  

The U.S. Treasury Department requires us to advise you that this written advice is not intended or written by our firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to Federal tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer, other than the recipient of the written advice.