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KIC Tax Case Settled With Borough


October 16, 2003
Thursday - 12:45 am

Ketchikan, Alaska - According to information provided by the Ketchikan Indian Community (KIC), the Ketchikan Indian Community and the Ketchikan Gateway Borough have settled all property tax issues surrounding KIC's property at 2960 Tongass Avenue, the location of KIC's Health Clinic and several BIA programs. "KIC is pleased with the outcome," said President Stephanie Rainwater-Sande speaking from Dorsey & Whitney's Anchorage Office Wednesday morning. She said, "It is a good thing that the Borough and KIC were able to reach an amicable settlement on a government-to-government basis."

Initially, KIC challenged the year 2000 tax assessment. As the process went forward, property taxes for the years 2001 and 2002 were held in abeyance pending the outcome of the 2000 tax assessment case. According to the news release, from the tax year 2003 and forward, KIC has received an undisputed tax exemption since KIC uses the entire building for governmental purposes under its self-governance compacts.

According to information provided by KIC, after the Borough's 2000 Board of Equalization determined that the property was subject to tax, Superior Court Judge Trevor Stephens held that KIC's use of the property was 100% tax exempt because KIC was using it for governmental purposes under its self-governance compacts with the Indian Health Service and Bureau of Indian Affairs under federal law, the Indian Self-Determination and Education Assistance Act. In his decision, Judge Stephens held that that federal law pre-empted local tax of property used for such purposes and he awarded KIC over $60,000 in fees and costs. The Borough appealed Judge Stephens' decision to the Alaska Supreme Court, but only to the extent it applied to the uncommitted space in the building. It also appealed the attorney's fees award.

Quoting the KIC news release, "In a split decision, the Alaska Supreme Court recently held that the space that was vacant and not considered to be part of any particular program was not exempt from tax because it was not being used for the governmental purposes under KIC's self-governance compact. The Court also vacated the fee award for KIC because it could no longer tell if KIC was the prevailing party. The Court directed that if it prevails on remand, KIC would be entitled to full fees and costs."

KIC's Chief Executive Officer, Georgianna Zimmerle, said today, "In our discussions of the settlement pros and cons, it was apparent that agreement between us would be equally beneficial to KIC and the Borough." Rather than continue litigation over the tax that was due for the small amount of uncommitted space in the clinic property during years 2000 - 2002, and the award of fees and costs that KIC was entitled to, KIC and the Borough agreed to settle all issues between them by releasing all claims against each other. KIC's Tribal Council made an offer to settle with the Borough at the end of September. The offer was accepted by the Borough at their October 6th Assembly meeting. Final settlement documents will be signed this week.



Source of News Release:

Ketchikan Indian Community
Web Site


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