October 16, 2003
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.
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: