ARIZONA STATE SENATE
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ANNA NGUYEN |
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LEGISLATIVE RESEARCH INTERN |
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MOLLY GRAVER |
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LEGISLATIVE RESEARCH ANALYST FINANCE COMMITTEE Telephone: (602) 926-3171 |
RESEARCH STAFF
TO: MEMBERS OF THE SENATE
FINANCE COMMITTEE
DATE: March 18, 2022
SUBJECT: Strike everything amendment to H.B. 2337, relating to affordable housing; qualified projects; eligibility
Purpose
Narrows, retroactive to September 29, 2021, the abatements, exemptions or other reductions in state or local ad valorem property taxes for which a qualified project approved for the Affordable Housing Tax Credit (Credit) is ineligible to abatements, exemptions or other reductions prescribed in statutes governing the Government Property Lease Excise Tax (GPLET).
Background
The Low-Income Housing Tax Credit (LIHTC) Program was enacted by the U.S. Congress in 1986 to finance the construction and rehabilitation of low-income affordable rental housing for individuals and families. The Internal Revenue Service allocates housing tax credits to designated state agencies which then award the credits to developers of qualified projects. The Arizona Department of Housing allocates available credits each year in Arizona (26 U.S.C. § 42).
Laws 2021, Chapter
430 established the Credit, administered by the Arizona Department of
Housing (ADOH). ADOH must allocate $4,000,000 for the Credit in each calendar
year until January 1, 2026. A qualified project approved for the Credit is
ineligible for any abatement, exemption or other reduction in state or local ad
valorem property taxes otherwise allowed by statute.
The GPLET was enacted in 1996 to allow government lessors to lease property owned by the lessor to prime lessees. In lieu of property taxes, prime lessees must pay a GPLET on the government property improvement to the county treasurer. Certain property and interests are exempt from GPLET, including: 1) property used for public housing; 2) property of a corporation organized or directed by a county, city or town to be used for public purposes; and 3) residential rentals occupied by the prime lessee. A city or town may, for a limited period, abate the GPLET of a government property that: 1) is located in a single central business district in the city or town and is subject to a lease or development agreement entered beginning April 1, 1985; 2) is located entirely within a slum or blighted area; and 3) resulted or will result in an increase in property value of at least 100 percent (A.R.S. Title 42, Chapter 6, Article 5).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
2. Becomes effective on the general effective date, retroactive to September 29, 2021.