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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
AMENDED
dude ranches; historical markers
Purpose
Modifies requirements relating to the guest ranch property valuation for property tax purposes. Requires the Arizona Historical Society (Historical Society) to issue historical markers for a dude ranch that is designated for inclusion on the Arizona Dude Ranch Heritage Trail Program (Trail Program).
Background
The Historical Society, administered by the 25-member Board of
Directors, must procure: 1) materials pertaining to the history of Arizona and
the west; 2) narratives of the historical exploration, early settlement and
overland travel of Arizona and the west; 3) data relating to Indian tribes that
portrays Arizona's antiquities, past and present conditions and progress; and
4) historical and scientific reports of the western states and materials and
facilities for investigation of historical, scientific, social, educational and
literary subjects. The Historical Society administers the permanent Arizona
Historical Society Revolving Fund (Fund), which consists of monies that the
Historical Society receives from operating gift shops, book shops, food service
facilities, and charging for the use of or admission into any of the Historical
Society's facilities. The Historical Society may operate a program to establish
and maintain historical markers in Arizona (A.R.S.
§§ 41-821;
41-823;
and 41-826).
Laws 2022, Chapter 203 established the Trail Program under the Arizona State Parks Board (ASPB) to serve as a guide to working dude ranches in Arizona. The ASPB may designate a dude ranch for inclusion on the Trail Program if the dude ranch: 1) applies to ASPB; 2) has been in business for at least 25 years; 3) consists of 1,000 contiguous acres of private or leased property adjacent to the headquarters; 4) provides recreational activities for guests, including horseback riding, hiking, biking or a working cattle ranch experience; 5) has a horse program with a number of horses that is equal to or greater than the total number of guest accommodations; 6) uses at least one permanent structure that has running water, sewage disposal and a kitchen; 7) provides guests with three meals each day as part of the dude ranch's primary package; and 8) includes the word ranch or rancho in the dude ranch's name.
Laws 2021, Chapter 185 established the guest ranch valuation for locally assessed property. As a condition of guest ranch valuation, a guest ranch must meet the definition of guest ranch and the owner must record a deed restriction with the county recorder that restricts the property to use as a guest ranch for at least 10 years. Real and personal guest ranch property and improvements are classified as class 2 property.
There is no anticipated fiscal impact to the state General Fund (state GF) associated with this legislation.
Provisions
Guest Ranch Property Valuation
1. Classifies, as class 4 property, real and personal guest ranch property and improvements that:
a) are included on the Trail Program;
b) meet the statutory definition of guest ranch and for which the owner has recorded a deed restriction with the county recorder; and
c) are valued at full cash value.
2. Specifies that class 2 property includes real and personal guest ranch property and improvements that:
a) are not included in class 4 property;
b) meet the statutory definition of guest ranch and for which the owner has recorded a deed restriction with the county recorder; and
c) are valued at full cash value.
3. Specifies that a change in a guest ranch's property classification is not a change in use, in and of itself, for the purposes of:
a) determining the limited property value of property for which a change in physical, objectively verifiable use has occurred since the preceding tax year; or
b) changing or correcting the tax roll to reflect determinations on review or appeal.
4. Specifies, in the definition of guest ranch, that the horse herd size requirement applies during the operating season in which guests are present.
Historical Society
6. Specifies that the horse herd size requirement for designation in the Trail Program applies during the operating season in which guests are present.
7. Allows Fund monies to be spent for issuing historical markers for a dude ranch that is designated for inclusion on the Trail Program.
8. Adds, to the Fund's sources, gifts, grants, donations and contributions to the Fund.
Miscellaneous
9. Makes technical and conforming changes.
10. Becomes effective on the general effective date.
Amendments Adopted by the Finance Committee
1. Removes the $75,000 appropriation from the state GF in FY 2024 to the Historical Society to issue historical markers for a dude ranch that is designated for inclusion in the Trail Program.
3. Specifies, retroactive to tax years beginning September 29, 2021, in the definition of guest ranch, that the horse herd size requirement applies during the operating season in which guests are present.
4. Requires, retroactive to tax years beginning September 29, 2021, a guest ranch's property valuation to be made on the assumption that no other property use is possible.
Amendments Adopted by Committee of the Whole
1. Classifies, as class 4 property, real and personal guest ranch property and improvements that:
a) are included on the Trail Program;
b) meet the statutory definition of guest ranch and for which the owner has recorded a deed restriction with the county recorder; and
c) are valued at full cash value.
2. Specifies that class 2 property includes real and personal guest ranch property and improvements that:
a) are not included in class 4 property;
b) meet the statutory definition of guest ranch and for which the owner has recorded a deed restriction with the county recorder; and
c) are valued at full cash value.
3. Specifies that a change in a guest ranch's property classification is not a change in use, in and of itself, for the purposes of:
a) determining the limited property value of property for which a change in physical, objectively verifiable use has occurred since the preceding tax year; or
b) changing or correcting the tax roll to reflect determinations on review or appeal.
4. Removes the requirement that guest ranch valuation be made on the assumption that no other property use is possible.
5. Removes the retroactive date of September 29, 2021, for the purposes of guest ranch valuation.
House Action Senate Action
LARA 2/13/23 DP 9-0-0-0 NREW 3/23/23 DP 7-0-0
3rd Read 2/22/23 45-15-0 FIN 3/27/23 DPA 6-1-0
Prepared by Senate Research
June 12, 2023
MG/FB/slp