Denali Borough, Alaska

Ordinance 03-03

 

Version C

 

Introduced by:  Assembly member David W. Evans

 

AN ORDINANCE AMENDING THE DENALI BOROUGH CODE OF ORDINANCES, CHAPTER 21 PERTAINING TO THE SEVERANCE TAX

 

 

BE IT ENACTED by the Assembly of the Denali Borough, Alaska that:

 

Section 1.  Classification.  This ordinance is of a general and permanent nature.

 

Section 2.  Purpose.  The purpose of this ordinance is to amend Chapter 21 of the Denali Borough Code of Ordinances as follows:

 

CHAPTER 21

 

SEVERANCE TAX

 

Sections:

 

[1. Classification.]

[2.]  1.  [General Provisions.] Definitions.

[3.]  2.  [Definitions] Imposition of Severance Tax.

[4.] 3.  [Collection and Accrual of Severance Tax Permit] Registration Required.

4.  Exemptions.

[4]  5.  [Violation is a misdemeanor] Collection and accrual of severance tax.

6. [Effective Date] Duty to file a Tax Return and to transmit Taxes to the Borough.

7.  Confidentiality.

8.  Penalty.

9.  Appeal.

10.  Violations a misdemeanor.

[11.  Effective date.]

 

 

[Section 1. Classification.

     This ordinance is of a general and permanent nature. ]

 

[Section 2.  General Provisions. There is levied in the Denali Borough, on any severer of certain natural resources an excise tax, denominated as a severance tax.  The tax rate shall be in an amount equal to $0.05 (five cents) per ton of the gross production of coal and limestone and $0.05 (five cents) per cubic yard of gravel resulting from the following activities:  mining, quarrying, extracting, removing, or producing for sale, profit, or commercial use, any coal, gravel and limestone.  The tax liability is accrued upon sale.]

 

Section [3 2]1. Definitions.

 

A.)      "The gross production" means the number of recovered units of the natural resource severed. [and sold.] 

 

B.)      "Severer" means a person, company, corporation or other entity engaged in the business of mining, quarrying, extracting, removing, or producing for sale, profit, or commercial use, any coal, gravel or limestone.

 

C.)     "Recovered Units" means all units mined, quarried, extracted, or removed and sold whether produced directly or contractually during the period of production.

 

D.)     “Quarterly” means March 31, June 30, September 30, and December 31.

 

E.)      “Contractual Transfer” means the event where gross production leaves the possession, custody or control of the severer.

 

Section [3] 2.  Imposition of Severance Tax.  There is levied in the Denali Borough, on any severer of certain natural resources an excise tax, denominated as a severance tax.  The tax rate shall be in an amount equal to $0.05 (five cents) per ton of the gross production of coal and limestone and $0.05 (five cents) per cubic yard of gravel resulting from the following activities:  mining, quarrying, extracting, removing, or producing for sale, profit, or commercial use, any coal, gravel and limestone.  The tax liability is accrued upon sale or contractual transfer.

 

Section [4] 3.  [Permit] Registration required. 

 

A.)           Every severer shall [file] register with the Borough Clerk [an application for a permit] on a form prescribed by the Clerk no later than January 1st for each year of operation or no later than 10 days after the date of commencing operation. 

 

B.)           Upon receipt of a properly executed application and all delinquent severance taxes are paid in full, the Clerk shall issue a register without charge to the severer, which shows the principal place of business.

 

Section 4.       Exemptions.

 

A.)      All projects for the Denali Borough where the Denali Borough provides the severed resources being used.

 

B.)      Single extraction events from civil excavations under 1000 cubic yards that are utilized on site.

 

 

Section [4] 5.  Collection and accrual of severance tax.  Every severer subject to taxation under this ordinance shall accrue the taxes imposed by this ordinance at the time of sale and shall transmit the same, [monthly] quarterly, to the Denali Borough.  The tax imposed shall be shown on the bill of sale as a separate and distinct item.

 

Section 6.  Duty to File a Tax Return and to Transmit Taxes to the Borough.

 

A.)      Every severer subject to taxation under this ordinance shall fill out a return for each quarter due on or before the last day of the following month.  Should that last day fall on a closed business day then the deadline will be extended to the next Borough business day.  A return that is not timely filed is delinquent.  The return shall be filled out upon forms furnished by the Borough and shall contain the following information:

1.)   The total yards/tons extracted.

2.)   Total amount of taxes due.

3.)   Such other information and documentation as the Clerk may require.

A severer which makes no taxable sales in a given quarter shall file a return with the Clerk establishing that no taxable sales were made.

 

B.)      On or before the due date of the return for each quarter, every severer shall transmit the taxes due on sales completed during that quarter to the Clerk.  Regardless of whether the return has been filed, taxes due for a given quarter which are not transmitted to the Clerk on or before the due date of the return for that quarter are delinquent.

 

C.)     For purposes of this section, taxes and returns are timely transmitted and/or filed only when the taxes and/or returns are actually received in the office of the Borough Clerk, or placed in the U.S. Mail properly addressed to the Clerk, with proper postage affixed and postmarked, on or before the date on which the taxes are due to be transmitted and/or the return is due to be filed.

 

D.)     Upon accrual by a severer of taxes imposed by this ordinance, title to and ownership of the collected taxes shall vest in the Borough.  Pending transmittal to the Borough, every severer shall hold the tax funds in trust for the use and benefit of the Borough.  Every severer shall segregate and identify the tax funds on its books and records as being held in trust for the Borough.

 

Section 7.  Confidentiality

 

A.)      Except as provided below, all returns filed with the Borough for the purpose of complying with the terms of this ordinance and all data obtained from such returns are confidential and shall be kept from inspection of all persons except officers, agents, and employees of the Borough; provided however, that the Assembly may discuss such returns and/or information obtained therefrom in public session if the severer affected consents in writing.

 

B.)      In the course of a criminal or civil action to enforce any provision of this ordinance, the Borough may allege, prove, publish, and produce for any purpose any return and/or information previously filed with the Borough.  The Borough may deliver to a severer a copy of any return filed by him.  The Borough may also publish statistics concerning the information contained in returns, if the publication is done in such a manner that the information contained in a particular return cannot be identified.

 

C.)     It is unlawful for any person to divulge to another any return or any information obtained from a return filed with the Borough except as provided in this section.

 

Section 8.  Penalty and interest.  A severer who fails timely to file a return and transmit the tax required by this ordinance shall pay a penalty of 50% of the tax shown or which should have been shown on the return but the penalty shall not exceed [one] ten thousand dollars [($1,000.00)] ($10,000).  Provided however, that if the return is filed more then thirty (30) days after it is due then the severer shall pay a penalty of up to [one] ten thousand dollars [($1,000.00)] ($10,000).  Penalties are due immediately upon accrual and are delinquent thereafter.  Interest will be assessed on any unpaid tax at the statutory rate of interest set forth in AS 45.45.010 - 10.5% per annum.

 

Section 9. Appeal. 

 

A.)      A person aggrieved by the application or interpretation of any provision of this ordinance shall present his/her complaint in writing to the Mayor not later than thirty (30) days after the payment is made, or should have known, of his/her complaint.  The Mayor shall investigate the matter and respond in writing to the grievant within a thirty (30) day time period.  If the Mayor does not reply within a thirty (30) day time period the appeal is deemed denied at the expiration of the thirty (30) days.  The Mayor may either personally deliver or mail his/her response to the grievant.  If mailed, the response shall be sent to the grievant by certified mail, return receipt requested, at the address contained in the grievance.

 

B.)      If the grievant is not satisfied with the Mayor's response, the grievant shall file his/her complaint in writing with the Borough Clerk not later than thirty (30) days after the date on which the Mayor’s decision was made.  The Assembly shall hold a hearing on the grievance at which the grievant and the Mayor may appear and give evidence, within two regularly scheduled Assembly meetings after the grievance is filed with the Clerk.  The Assembly shall determine whether this ordinance has been properly interpreted and applied to the grievant and shall grant or deny such relief as may be appropriate in the circumstances.  The Assembly shall deliver or mail its decision to the grievant and to the Mayor, in the manner provided above for the Mayor's response, within ten (10) business days following termination of the hearing.  The Assembly's decision shall be the final action of the Borough on the matter.  In its discretion, the Assembly may appoint a hearing officer to take evidence and recommend a decision to the Assembly, which the Assembly could accept or reject, as it deems appropriate.

 

C.)     A person aggrieved by the final action of the Borough may appeal to the Superior Court in the manner provided in the Alaska Rules of Appellate Procedure for appeals from administrative agencies.

 

 

Section [5] 10.  Violations a misdemeanor.  Any severer violating any of the provisions of this ordinance is guilty of a misdemeanor.

 

Section [6 11] 3. Effective Date.  This ordinance becomes effective upon adoption by the Borough Assembly and signature of the Mayor.

 

 

DATE INTRODUCED: March 12, 2003          

FIRST READING: March 12, 2003

PUBLIC HEARING:  November 19, 2003

 

 

PASSED and APPROVED by the DENALI BOROUGH ASSEMBLY this 19th day of November, 2003.

 

    SIGANTURE ON FILE                         

Borough Mayor                                             

 

    SIGANTURE ON FILE                         

Borough Clerk

ATTEST: