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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
REVISED
property tax; class one; equalization assistance
Purpose
Reduces the percentage of assessed valuation of class 1 property over two years to 15 percent in calendar year (CY) 2027 and sets, at unspecified amounts, the state equalization assistance property tax rate (SETR) for TYs 2022 through 2027.
Background
Assessed Valuation of Class 1 Property
Class 1 property
consists of properties of mining, telecommunication companies, utilities,
standing timber, airport fuel delivery, oil and gas production, pipelines,
shopping centers, golf courses and most other commercial uses (A.R.S.
§ 42-12001). The assessed valuation of class 1 property is currently 17.5
percent of its full cash value or limited valuation, as applicable
(A.R.S.
§ 42-15001).
Laws 2021, Chapter 412 reduced the percentage of assessed valuation of class 1 property to: 1) 17 percent in CY 2023; 2) 16.5 percent in CY 2024; and 3) 16 percent thereafter.
State Equalization Assistance Property Tax Rate
Each county
board of supervisors must levy the state equalization property tax each year
and it is the responsibility of the county treasurer to apportion the monies to
school districts within the county as provided by law (A.R.S.
§ 15-994). The SETR in tax year 2021 is $0.4263
(A.R.S.
§ 41-1276).
The Joint
Legislative Budget Committee fiscal note estimates an increase to the state
General Fund cost for the K-12 school funding formula by $48.2 million in FY
2027 and
$88.2 million in FY 2028 (JLBC
fiscal note).
Provisions
1. Reduces the percentage of assessed valuation of class 1 property to:
a) 15.5 percent in CY 2026; and
b) 15 percent thereafter.
2. Sets the SETR at:
a) $_____ in TY 2022;
b) $_____ in TY 2023;
c) $_____ in TY 2024;
d) $_____ in TY 2025;
e) $_____ in TY 2026; and
f) $_____ in TY 2027.
3. Makes technical changes.
4. Becomes effective on the general effective date.
Revisions
· Updates the fiscal impact statement.
Prepared by Senate Research
January 27, 2022
MG/slp