ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

House: APPROP DPA/SE 10-2-1-0

HB 2001: false claims; agriculture; technical correction

S/E Credit for Donation of Site

Sponsor:  Representative Cobb, LD 5

Caucus & COW

Summary of the Strike-Everything Amendment to HB 2001

Overview

Creates a corporate tax credit for the donation of real property to a school district or charter school.

History

Under current law, individuals may claim a tax credit for donating real property to a public school. The tax credit for the individual is equal to 30% of the value of the property and improvements. The credit may be carried over for up to five consecutive years if it is not completely used in offsetting the donor's income taxes in the first year. (A.R.S. § 43-1089.02)

Provisions

1.   ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteAllows a tax credit to be given for the donation of real property — equal to 30% of the value of the property and improvements — to a school district or charter school for use as a school or site for construction of a school. (Sec. 4)

2.   Requires the donated property and improvements to be located within the State. (Sec. 4)

3.   Requires the donated property and improvements to be unencumbered except that:

a)   The conveyance must have a deed restriction and protective covenant that requires the recipient use the property as a school site.

b)   In the case of a donation to a charter school, the donor shall record a lien on the property equal to the allowable tax credit to the donor. (Sec. 4)

4.   Requires that the donated property not be within a quarter mile of agricultural land that uses toxic pesticides. (Sec. 4)

5.   Stipulates that a donated property's fair market value is to be determined by an independent party's appraisal paid by the recipient. (Sec. 4)

6.   Stipulates that, for co-owners who donate their properties, the allowable credits are to be divided based on ownership interest of the donated property. (Sec. 4)

7.   Allows the tax credit to be carried over for up to five consecutive years. (Sec. 4)

8.   States that, for Arizona income tax purposes, the credit may not also be claimed as a charitable deduction. (Sec. 4)

9.   Permits the recipient, upon request to the donor, to know the amount of the credit which the donor receives with respect to the donated property. (Sec. 4)

10.  Permits a school district or charter school to refuse a property donation. (Sec. 4)

11.  Requires a school district to notify the School Facilities Board (SFB) of the donation and for the SFB to determine if an offered property is suitable as a school or school site before accepting it. (Sec. 4)

12.  Allows a school district to sell any donated property but stipulates that sales proceeds from such property must be used for capital projects. (Sec. 4)

13.  Requires a charter school to notify its sponsor of the donation by certified mail and any information requested regarding the donation during the 10 year period after the donation. (Sec. 4)

14.  Requires a charter school to notify its sponsor and state treasurer by certified mail if:

a)   the charter school has failed to establish a charter school or fails to provide instruction on the property within 48 months of receiving the property; or

b)   has ceased to operate the charter school or fails to provide instruction for a period of 24 consecutive months. (Sec. 4)

15.  Requires a charter school, or its successor in interest, to pay to the state treasurer an amount equal to the tax credit given to the donor if any failure listed in provision 14 occurs. requires penalty and interest to be added if the amount due is not paid within one year. (Sec. 4)

16.  States that a tax credit for donation of a school site constitutes a lien against the property, which the donor must record to qualify for the credit and that the lien is subordinate to any liens securing the financing of the school construction. (Sec. 4)

17.  Directs the state treasurer to foreclose a charter school's property if the charter school has not begun teaching on the property within 48 months of receiving the property or has ceased to operate it for a period of 24 consecutive months. (Sec. 4)

18.  States that the lien may be discharged:

a)   After 10 years;

b)   Upon paying the required amount;

c)   Upon conveyance of the property to a school district; or

d)   Upon foreclosure of the property. (Sec. 4)

19.  Allows a charter school to sell any donated property, subject to the lien placed against it. (Sec. 4)

20.  Allows shareholders of an S corporation to claim tax credits for the donation of real property to a public school. (Sec. 2)

21.  Requires any deduction claimed in computing Arizona gross income for a school site donation to be added back to calculate Arizona gross income. (Sec. 3)

22.  Adds this tax credit to the income tax credit review schedule. (Sec. 1)

23.  Contains a retroactivity clause of January 1, 2020. (Sec. 6)

24.  Contains a legislative intent clause. (Sec. 5)

25.  Contains technical changes. (Sec. 1, 2)

 

 

 

 

 

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                        HB 2001

Initials VP/NM Page 0 Caucus & COW

 

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