ARIZONA
HOUSE OF REPRESENTATIVES
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HB 2126: government property; abatement; slum; blight |
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PRIME SPONSOR: Representative Leach, LD 11 BILL STATUS: Ways & Means
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Relating to the GPLET slum or blighted area
abatement.
Provisions
1. Prohibits the approval of a GPLET abated lease unless, for development agreements, ordinances or resolutions for the lease of government property approved after June 30, 2018, the lessor determines that a public benefit to the state and the applicable county or municipality will occur, due to the fact that within the location of the proposed improvement or any existing improvement within 400 feet, at least one of the following exists:
a. A structure that is dilapidated, unsanitary, unsafe, vermin-infested and unfit for habitation.
b. An abandoned structure or land that is government-owned due to eminent domain.
c. A site designated by the United States Environmental Protection Agency as a Superfund.
d. A site that requires substantial historical or cultural heritage management that adds significant costs to the project.
e. A property used for public housing.
f. A parcel that is functionally obsolete or held in fractured ownership.
g. The tax or special assessment delinquency exceeds the fair value of the land. (Sec. 2)
2. Requires a municipal slum or blighted area designation to terminate after 10 years, without exception. (Sec. 1)
o A.R.S. § 36-1474 establishes an exception to this requirement if substantial action has been taken to remove the slum or blighted area conditions.
3. Adjusts the maximum size of a central business district to the greater of 2.5% of the total land area within the exterior boundaries of the municipality or 960 acres.
a. Directs a municipality that designated a central business district before September 1, 2018 to modify the district to comply with this size adjustment.
b. Specifies an approved improvement located in a district required to adjust is still considered to be in the district for the purposes of a GPLET abatement. (Sec. 2)
5. Requires each municipality, within one year of the effective date of this Act, to review each area within its boundaries that has been designated as a slum or blighted area for over ten years and either renew or terminate the designation.
a. Specifies if a municipality does not review the designation, the designation is terminated one year after the effective date of this Act.
b. Exempts existing projects for various educational institutions located inside a designated area from this provision. (Sec. 3)
Current Law
Title 42, Chapter 6, Article 5, Arizona Revised Statutes establishes the GPLET. A GPLET applies to any entity that leases property from a city, town, county or county stadium district for at least 30 consecutive days for commercial or industrial use. The tax is based in terms of dollars per square foot, rather than the value of the property, to be calculated by each lessee.
The GPLET may be abated for a period of eight years if the property is: 1) located in a single central business district (no larger than the greater of 5% of the land area within the exterior boundaries of the municipality or 640 acres) within a slum and blighted area and subject to a lease or development agreement entered into on or after April 1, 1985; and 2) if the improvement resulted or will result in an increase in property value of at least 100%. Any lease with an abated GPLET is limited to eight years, at which point the property is conveyed to the lessee.
The government jurisdiction levying the tax must remit GPLET collections to the county (13%), the municipality (7%), the community college district (7%) and the school district (73% for a unified district or 36.5% for an elementary or high school district).
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Fifty-third Legislature HB 2126
Second Regular Session Version 1: Ways & Means
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