State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2280: universities; lease-back financing

PRIME SPONSOR: Representative Leach, LD 11

BILL STATUS: Ways & Means

 

Legend: ABOR – Arizona Board of Regents R&D – Research & Development Amendments – BOLD and Stricken (Committee)

Abstract

Relating to ABOR lease-back financing.☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

Provisions

1.       Prohibits ABOR or a corporation formed by a university under its jurisdiction, beginning July 1, 2018, from entering into a development agreement or executing a transaction in which the deed to a property improvement is transferred to ABOR or a university before immediately being leased back to a private lessor for a commercial use, unrelated to academic purposes or student housing. (Sec. 1,3)

a.       Stipulates ABOR is not restricted from acting as a ground lessor or commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a university purpose. (Sec. 1)

2.       Requires any lease between ABOR and a lessee for a research park, used as a regional or national headquarters for R&D or educational activities, to be entered into prior to July 31, 2018. (Sec. 2)

3.       Prohibits ABOR from designating a new research park or increasing the size of an existing research park beyond contiguous borders as they existed on January 1, 2018 without the approval of the Legislature. (Sec. 2)

4.       Requires ABOR to review for compliance and approve all research park leases entered into after July 31, 2018.

a.       Prohibits ABOR from approving a lease that does not demonstrate the link between the lease and an academic mission of the university.

b.       Prohibits ABOR from designating the authority to review and approve. (Sec. 2)

5.       Makes technical and conforming changes. (Sec. 1)

Current Law

ABOR is authorized to purchase, receive, hold, make and take leases of and sell real and personal property for the benefit of the state and for the use of its institutions (A.R.S. § 15-1625).

A.R.S § 15-1636 allows ABOR to lease improvements and unimproved lots for use in a research park to a lessee for the following uses:

·         Laboratories, offices and other facilities for testing, consulting and information processing relating to R&D;

·         Production, assembly or sale of products for R&D activities;

·         Pilot plants in which processes planned for use in production elsewhere can be tested and treated;

·         Regional or national headquarters of the lessee or its subsidiaries that are engaged in R&D or education activities;

·         Education and training facilities; and

·         Operations required to maintain or support any specified permitted use.

All leases must contain a covenant prohibiting unlimited manufacturing on the site, in addition to language allowing the board to enforce the covenant and terminate the lease.

 

 

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Fifty-third Legislature                  HB 2280

Second Regular Session                               Version 1: Ways & Means

 

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