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REFERENCE TITLE: leased religious property; class nine |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HB 2281 |
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Introduced by Representatives Lesko, Allen, Smith, Thorpe, Senators Barto, Murphy, Yarbrough, Yee: Representatives Forese, Gray, Livingston, Montenegro, Senators Burges, Crandell, Farnsworth D, Melvin, Ward
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AN ACT
amending title 42, chapter 11, article 3, Arizona Revised Statutes, by adding section 42‑11134; amending sections 42-11153 and 42-12009, Arizona Revised Statutes; relating to property classification.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 42, chapter 11, article 3, Arizona Revised Statutes, is amended by adding section 42-11134, to read:
42-11134. Property leased to a religious assembly or institution
A. Property, buildings and fixtures that are leased to a nonprofit religious assembly or institution and that are primarily used for religious worship shall be classified as class nine property pursuant to section 42‑12009. If only part of a parcel of real property or improvements to real property is leased to a nonprofit religious assembly or institution that is primarily used or held for religious worship, only the portion leased qualifies as class nine property.
B. Property, buildings and fixtures that are owned by an educational, a religious or a charitable organization, institution or association, that are leased to a nonprofit religious assembly or institution and that are primarily used for religious worship are exempt from taxation.
C. If the educational, religious or charitable organization, institution or association that owns the property files with the assessor evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code and an affidavit by the nonprofit religious assembly or institution that it uses or holds the property primarily for religious worship as described in subsection b of this section, the property qualifies for the tax exemption under this section and is exempt from the requirement of filing subsequent affidavits under section 42‑11152 until all or part of the property is conveyed to a new owner or is no longer primarily used or held by a religious assembly or institution. At that time the educational, religious or charitable organization, institution or association must notify the assessor of the change in writing.
Sec. 2. Section 42-11153, Arizona Revised Statutes, is amended to read:
42-11153. Deadline for filing affidavit
A. Except as provided in section 42-11104, subsection E, section 42‑11109, subsection B, section 42‑11110, subsection B, section 42‑11111, subsection H, section 42‑11131, subsection C and section 42‑11132, subsection C and section 42‑11134, subsection c, a failure by a taxpayer who is entitled to an exemption to make an affidavit or furnish evidence required by this article between the first Monday in January and March 1 of each year constitutes a waiver of the exemption.
B. If a widow, widower or disabled person whose property is exempt from tax under section 42‑11111, or an organization that is exempt from federal income tax under section 501(c) of the internal revenue code and is exempt from property tax under article 3 of this chapter, submits a petition after the deadlines prescribed by subsection A of this section, the person or organization may have the waiver redeemed by the county board of supervisors at any regular meeting, except that no taxes that were due and payable before the petition was submitted may be refunded or abated.
Sec. 3. Section 42-12009, Arizona Revised Statutes, is amended to read:
42-12009. Class nine property
A. For purposes of taxation, class nine is established consisting of:
1. Improvements that are located on federal, state, county or municipal property and owned by the lessee of the property if:
(a) The improvements are required to become the property of the federal, state, county or municipal owner of the property on termination of the leasehold interest in the property.
(b) Both the improvements and the property are used exclusively for athletic, recreational, entertainment, artistic or cultural facilities.
2. Improvements that are located on federal, state, county or municipal property and owned by the lessee of the property if:
(a) The improvements are required to become the property of the federal, state, county or municipal owner of the property on termination of the leasehold interest in the property.
(b) Both the improvements and the property are:
(i) Used for or in connection with aviation, including hangars, tie‑downs, aircraft maintenance, sales of aviation related items, charter and rental activities, parking facilities and restaurants, stores and other services located in a terminal.
(ii) Located on a state, county, city or town airport or a public airport operating pursuant to sections 28‑8423, 28‑8424 and 28‑8425.
3. Property that is defined as "contractor-acquired property" or "government-furnished property" in the federal acquisition regulations (48 Code of Federal Regulations section 45.101) and that is leased to or acquired by the government and used to perform a government contract.
4. Property of a corporation that is organized by or at the direction of this state or a county, city or town to develop, construct, improve, repair, replace or own any property, improvement, building or other facility to be used for public purposes that the state, county, city or town pledges to lease or lease-purchase with state, county or municipal special or general revenues and that is not otherwise exempt under chapter 11, article 3 of this title.
5. Real property and improvements, including land, buildings, furniture and equipment, regardless of ownership, that are leased for the entire valuation year to, and used exclusively by, a nonprofit organization that is recognized under section 501(c)(3) of the internal revenue code and that operates on the premises as a charter school pursuant to section 15‑183 or that are leased for the entire valuation year to, and used exclusively by, a nonprofit religious assembly or institution. If only part of a parcel of real property or improvements to real property is leased for operation of a charter school or a religious assembly or institution as provided by this paragraph, only the portion so leased qualifies for classification under this section. A property owner who leases property to a charter school or a religious assembly or institution as provided by this paragraph shall file an affidavit with the county assessor stating that the charter school or religious assembly or institution shall be the sole beneficiary of the change in property tax classification pursuant to this section and that the lease rate that is charged to the charter school or religious assembly or institution is consistent with the lease rates that are charged to other tenants of the property or a fair market rate.
6. Improvements that are located on federal, state, county or municipal property and owned by the lessee of the property if:
(a) The improvements become the property of the federal, state, county or municipal owner of the property on termination of the leasehold interest in the property.
(b) Both the improvements and the property are used primarily for convention activities.
B. Improvements that are located in an area defined as a research park pursuant to section 35‑701 may not be classified under this section.
C. All property classified as class nine is subject to valuation at full cash value.