State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2330: 1% property tax limit; GPLET

PRIME SPONSOR: Representative Leach, LD 11

BILL STATUS: Caucus & COW

APPROP: DP 8-5-0-0

 

 

Legend: BOS – Board of Supervisors FCV – Full Cash Value GPLET – Government Property Lease Excise Tax improvement – government property improvement PTOC – Property Tax Oversight Commission Amendments – BOLD and Stricken (Committee)

Abstract

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRelating to withholdings for additional state aid and the 1% cap.

Provisions

Shared Revenue Withholding for Additional State Aid

1.       Requires PTOC to determine the amount of primary property tax that would have been assessed against all improvements by each school district that receives additional state aid and is located in a municipality or stadium district with an improvement, using values provided by the county assessor.

a.       Requires PTOC to notify the municipality and any affected stadium district of the amount. (Sec. 1)

b.       Requires the county assessor to determine the FCV of improvements at market value and transmit those valuations to PTOC and BOS by January 1st of each year. (Sec. 4)

2.       Directs the State Treasurer, on notice from PTOC, to withhold the distribution of shared revenues to the municipality or stadium district and instead pay the monies to the affected school district by February 1st of each year.

a.       Requires the State Treasurer to continue to withhold monies until the full payment amount reported by PTOC has been made. (Sec. 1, 2, 3)

3.       Specifies that payments from monies withheld from state shared revenues are:

a.       Considered to be additional state aid for the school district in which the improvement is located; and

b.       Excluded from the affected municipality's constitutional expenditure limits. (Sec. 1)

4.       Requires any other payments of additional state aid to be made by appropriation from the GF. (Sec. 1)

5.       Requires improvements subject to GPLET, including properties subject to abatement of the tax, to be listed on the tax roll. (Sec. 5)

1% Cap

6.       Removes the requirement that the state contribute up to $1 million of additional state aid to counties in violation of the 1% cap and other applicable statutes. (Sec. 1)

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

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 improvement is: 1) located in a single central business district 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 unified districts or 36.5% for an elementary or high school district).

The maximum amount of taxes that may be collected in any TY is prohibited from exceeding 1% of a property's FCV (Article IX, Section 18, Constitution of Arizona). Before levying taxes for school purposes, the BOS is required to determine whether total primary property taxes to be levied exceeds the 1% cap. Such excess amounts are considered to be additional state aid for the school district in which the property is located. The maximum amount of additional state aid that will be funded by the state is $1 million per county. For a county with a school district that would receive more than $1 million in additional state aid, PTOC is required to determine the proportion exceeding the 1% cap that is attributable to each taxing jurisdiction. Based on those proportions, PTOC determines the amount that each taxing jurisdiction is required to transfer to the affected school district in order to compensate for its pro rata share of the reduction in additional state aid (A.R.S. § 15-972).

 

 

 

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Fifty-third Legislature                  HB 2330

Second Regular Session                               Version 3: Caucus & COW 

 

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