SB1471 - 541R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 41-3955, Arizona Revised Statutes, is amended to read:

START_STATUTE41-3955. Housing trust fund; purpose; annual report

A. The housing trust fund is established, and the director shall administer the fund. The fund consists of:

1. Monies from unclaimed property deposited in the fund pursuant to section 44‑313. ,

2. Monies transferred pursuant to section 35‑751. and

3. Withholding tax collections from nonresident real estate sales deposited pursuant to section 43‑404.01. Up to $10,000,000 of the monies deposited pursuant to this paragraph shall be used exclusively for capital projects, rental assistance and services for homeless youth and families and shall supplement, and not supplant, homeless youth and family funding from other sources. Monies deposited pursuant to this paragraph in excess of $10,000,000 may be used by the department for other projects and programs.

4. Investment earnings.

B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund.

C. Fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44‑313, subsection A, a portion of fund monies shall be used exclusively for housing in rural areas.

D. In approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low income low‑income families and that provide housing and shelter to families that have children.

E. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, no later than September 1 of each year.

F. Monies in the housing trust fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

G. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund.

H. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations. END_STATUTE

Sec. 2. Section 42-1116, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1116. Disposition of tax revenues

A. The department of revenue shall promptly deposit, pursuant to sections 35‑146 and 35‑147, all monies it collects from the taxes administered pursuant to this article except the telecommunication services excise tax, separately accounting for each type of tax and each tax classification within each type of tax. At the same time the department of revenue shall also furnish copies of the transmittal schedules to the director of the department of administration.

B. Except as provided by subsection C of this section, the department shall deposit all monies and remittances received under this section to the credit of the following specific funds and accounts:

1. Amounts sufficient to meet the requirements for tax refunds to the tax refund account established by section 42‑1117.

2. Amounts sufficient to meet the requirements of urban revenue sharing to the urban revenue sharing fund established by section 43‑206.

3. Amounts collected pursuant to chapter 5, articles 1 and 5 of this title to the transaction privilege and severance tax clearing account established by section 42‑5029.

4. Amounts sufficient to meet the requirements of section 42‑3104 to the corrections fund.

5. Amounts sufficient to meet the requirements of section 49‑282, subsection B relating to the water quality assurance revolving fund.

6. Amounts collected pursuant to, and distributed as provided by, section 43‑404.01 to the Arizona health care cost containment system and the housing trust fund established by section 41‑3955.

6. 7. All remaining monies to the state general fund.

C. From the monies and remittances received under this section, each month beginning July 2001 the state treasurer shall transmit to the tourism and sports authority, established by title 5, chapter 8, for deposit in its facility revenue clearing account established by section 5‑834 one‑twelfth of the amount reported by the department pursuant to section 43‑209. END_STATUTE

Sec. 3. Title 43, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 43-404.01, to read:

START_STATUTE43-404.01. Extension of withholding to real estate sales; nonresident transfers; exceptions; penalties; definitions

A. Except as otherwise provided in this section, in the case of any conveyance of an Arizona real property interest, the title insurance company or a subsidiary, the title insurance agent or any financial institution or the attorney that provides closing and settlement services shall withhold an amount equal to two percent of the sales price of the Arizona real property interest conveyed or the net proceeds resulting from the conveyance, whichever is less, if the transferor is an individual and either the return required to be filed with the secretary of the treasury pursuant to section 6045(e) of the internal revenue code indicates or the authorization for the disbursement of the monies resulting from the transaction instructs that the monies be disbursed to either:

1. A transferor with a last known address outside the boundaries of this state at the time of the transfer of the title to the Arizona real property interest.

2. The escrow agent of a transferor described in paragraph 1 of this subsection.

B. This section does not apply to a conveyance of real property or interest if:

1. The sales price of the Arizona real property interest conveyed is $100,000 or less.

2. The transferee is a financial institution or corporate beneficiary under a mortgage, or a beneficiary under a deed of trust, and the Arizona real property interest is acquired in judicial or nonjudicial foreclosure or by a deed in lieu of foreclosure.

3. The title insurance company or subsidiary, title insurance agent or financial institution or attorney relies on a written affirmation executed by the transferor certifying one of the following under penalty of perjury:

(a) That the transferor is a resident of this state.

(b) That the transferor, if a corporation, has a permanent place of business in this state.

(c) That the Arizona real property being conveyed by the transferor meets the principal residence ownership and use requirements set forth in section 121 of the internal revenue code.

(d) That the transferor will not owe tax reasonably estimated to be due under this title from the inclusion of the actual gain required to be recognized on the transaction in the transferor's Arizona gross income, as defined in section 43-1001 or 43-1101, as applicable.

4. The transferor is a resident of a state that would be allowed a credit against taxes imposed by this title under section 43-1096 for a conveyance of real property or interest that occurs in another state.

C. The title insurance company or other person or institution that is required to withhold monies pursuant to subsection A of this section shall:

1. Electronically report and remit the amount to the department as provided by this article.

2. Submit written affirmations executed pursuant to subsection B, paragraph 3 of this section to the department in a manner prescribed by the department.

D. Notwithstanding section 43-401, the department shall separately account for monies collected pursuant to this section for deposit pursuant to section 42‑1116, subsection B, paragraph 6. The monies shall be distributed each fiscal year as follows:

1. $2,000,000 to the Arizona health care cost containment system administration to provide housing in a contained community setting that provides secure twenty-four-hour onsite supervision and fosters a person's compliance with the person's medication and treatment plans for persons who have serious mental illness and who have demonstrated the inability to successfully live in an independent setting.

2. After the distribution of monies pursuant to paragraph 1 of this subsection, the remaining monies to the housing trust fund established by section 41‑3955.

E. An amount not to exceed one percent of the monies collected pursuant to this section may be appropriated annually by the legislature to the department for administrative costs in providing services relating to this section.

F. A title insurance company or other person or institution that is required to withhold and remit any monies pursuant to this section and that fails to do so is liable for the greater of the following amounts:

1. $500.

2. Ten percent of the amount required to be withheld pursuant to this section but not more than $2,500.

G. For the purposes of this section:

1. "Arizona real property interest" means an interest in real property, including an interest in a mine, well or other natural deposit, that is located in this state.

2. "Sales price" means the sum of the following:

(a) The cash paid or to be paid for the conveyance of the arizona real property interest, not including stated or unstated interest or original issue discount as determined pursuant to sections 1271 through 1275 of the internal revenue code.

(b) The fair market value of other property transferred or to be transferred in connection with the transaction.

(c) The outstanding amount of any liability assumed by the transferee to which the Arizona real property interest is subject immediately before and after the transfer. END_STATUTE

Sec. 4. Effective date

This act is effective from and after December 31, 2019.