Bill Text: AZ HB2074 | 2019 | Fifty-fourth Legislature 1st Regular | Chaptered


Bill Title: Treatment and education facilities; exemption

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2019-05-13 - Chapter 208 [HB2074 Detail]

Download: Arizona-2019-HB2074-Chaptered.html

 

 

House Engrossed

 

 

 

State of Arizona

House of Representatives

Fifty-fourth Legislature

First Regular Session

2019

 

 

 

CHAPTER 208

 

HOUSE BILL 2074

 

 

AN ACT

 

Amending sections 42‑11001, 42‑11104, 42‑11132 and 42‑12009, Arizona Revised Statutes; relating to property tax.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 


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

Section 1.  Section 42-11001, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11001.  Definitions

In chapters 11 through 19 of this title, unless the context otherwise requires:

1.  "Assessed valuation" means the value derived by applying the applicable percentage prescribed by chapter 15, article 1 of this title to the full cash value or limited property value of the property, as applicable.

2.  "Board" or "state board" means the state board of equalization.

3.  "County board" means the county board of supervisors sitting as the county board of equalization.

4.  "Current usage" means the use to which property is put at the time of valuation by the assessor or the department.

5.  "Due date" means the next business day if a due date of any report, claim, return, statement, payment, deposit, petition, notice or other document or filing falls on Saturday, Sunday or a legal holiday.

6.  "Full cash value", for property tax purposes, means the value determined as prescribed by statute.  If no a statutory method is not prescribed, full cash value is synonymous with market value, which means the estimate of value that is derived annually by using standard appraisal methods and techniques.  Full cash value is the basis for assessing, fixing, determining and levying primary and secondary property taxes on property described in section 42‑13304. Full cash value shall not be greater than market value regardless of the method prescribed to determine value for property tax purposes.

7.  "Limited property value" means the value determined pursuant to section 42‑13301.  Limited property value is the basis for:

(a)  Computing levy limitations for counties, cities, towns and community college districts.

(b)  Assessing, fixing, determining and levying primary and secondary property taxes on all property except property described in section 42‑13304.

8.  "Net assessed value" means the assessed value minus any exempt property.

9.  "Person" means a natural person, individual, proprietor, proprietorship, company, corporation, organization, association, joint venture, partner, partnership, trust, estate or limited liability company, the federal or state government, a political subdivision of a state or any other legal entity or combination of entities that owns, controls or has possession of real or personal property.

10.  "Personal property" includes property of every kind, both tangible and intangible, that is not included in the term as real estate.

11.  "Primary property taxes" means all ad valorem taxes except for secondary property taxes.

12.  "Producing mine" or "mining claim" means a mine or mining claim from which coal or any other mineral or mineral substance, except for clay, sand, gravel, building stone or a mineral or mineral substance that is normally processed into artificial stone, has been extracted for commercial purposes at any time during a period of one year before the first Monday in January of the valuation year.

13.  "Real estate" includes the ownership of, claim to, possession of or right of possession to lands or patented mines.

14.  "Residential treatment and education facility" means any residential facility that is subject to title 15, chapter 10, article 6.

14.  15.  "Roll" means the assessment and tax roll.

15.  16.  "Secondary property taxes" means:

(a)  Ad valorem taxes or special property assessments that are used to pay the principal of and the interest and redemption charges on bonded indebtedness or other lawful long‑term obligations that are issued or incurred for a specific capital purpose by a municipality, county or taxing district.

(b)  Ad valorem taxes or assessments that are levied by or for special taxing districts and assessment districts other than school districts and community college districts.

(c)  Amounts that are levied pursuant to an election to exceed a budget, expenditure or tax limitation.

16.  17.  "Tax year" for all property means the calendar year in which the taxes are levied.

17.  18.  "Valuation" means the full cash value or limited property value that is determined for real or personal property, as applicable.

18.  19.  "Valuation date", for the purposes of real property and property valued by the department, means January 1 of the year preceding the year in which taxes are levied.

19.  20.  "Valuation year" means:

(a)  For real property and property valued by the department, the calendar year preceding the year in which the taxes are levied.

(b)  For personal property, the calendar year in which the taxes are levied. END_STATUTE

Sec. 2.  Section 42-11104, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11104.  Exemption for educational and library property

A.  Libraries, colleges, school buildings and other buildings that are used for education, with their furniture, libraries and equipment and the land that is appurtenant to and used with them, are exempt from taxation if they are used for education and not used or held for profit.

B.  Property and buildings are exempt from taxation if leased from:

1.  A school district pursuant to a lease or lease-purchase agreement under section 15‑342, paragraph 9 or 10.

2.  A community college district pursuant to a lease or lease‑purchase agreement under section 15‑1444.

C.  Property and buildings, including land, improvements, furniture and equipment, that are owned by a nonprofit organization that is recognized under section 501(c)(3) of the internal revenue code and that operates as:

1.  A charter school pursuant to section 15-183 are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit.

2.  A trap and skeet shooting club that teaches, trains, sponsors, coaches or hosts or sponsors clinics, shooting leagues, competitive tournaments or other events, including hunter and firearm safety classes, are exempt from taxation if the property and buildings are used for education purposes and not used or held for profit.

3.  A residential treatment and education facility are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit.

D.  Within ten days after receiving an initial affidavit of eligibility submitted under section 42‑11152 by a nonprofit organization described under subsection C of this section, the county assessor, on request, shall issue a receipt for the affidavit.

E.  If the a nonprofit organization described under subsection C of this section files with the assessor evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code, the organization is exempt from the requirement of filing subsequent affidavits under section 42‑11152 until all or part of the property is conveyed to a new owner or is no longer used for education.  At that time the organization shall notify the assessor of the change in writing.

F.  A nonprofit organization described under subsection C of this section that acquires ownership of property that was previously owned by another nonprofit organization and used primarily for education shall comply with the requirements of section 42‑11152 to qualify and establish eligibility for exemption.

G.  If a nonprofit organization described under subsection C of this section that holds title to property used primarily for education fails to file the affidavit required by section 42‑11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to:

1.  Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer.  The county treasurer is entitled to a credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted.

2.  Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid. END_STATUTE

Sec. 3.  Section 42-11132, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11132.  Property leased to educational institutions

A.  Property, buildings and fixtures that are leased to a nonprofit charter school or a residential treatment and education facility and that are used for educational instruction in any grade or program through grade twelve shall be classified as class nine property pursuant to section 42‑12009. If only part of a parcel of real property or improvements to real property is leased for operation of a charter school or a residential treatment and education facility, only the portion so leased qualifies as class nine property.

B.  Property, buildings and fixtures that are owned by an educational, a religious or a charitable organization, institution or association and leased to a nonprofit educational organization, institution or association are exempt from taxation if the property is used for educational instruction in any grade or program through grade twelve.

C.  If the educational, religious or charitable organization, institution or association that owns the property files with the assessor evidence of the organization's, institution's or association's tax exempt status under section 501(c)(3) of the internal revenue code and an affidavit by the educational organization, institution or association that it uses the property for educational instruction as described in subsection B of this section, the property qualifies for the tax exemption under this section and is exempt from the requirement of filing subsequent affidavits under section 42‑11152 until all or part of the property is conveyed to a new owner or is no longer used for educational purposes. At that time the educational, religious or charitable organization, institution or association must notify the assessor of the change in writing. END_STATUTE

Sec. 4.  Section 42-12009, Arizona Revised Statutes, is amended to read:

START_STATUTE42-12009.  Class nine property

A.  For purposes of taxation, class nine is established consisting of:  

1.  Improvements that are located on federal, state, county or municipal property and owned by the lessee of the property if:

(a)  The improvements are required to become the property of the federal, state, county or municipal owner of the property on termination of the leasehold interest in the property.

(b)  Both the improvements and the property are used exclusively for convention activities or athletic, recreational, entertainment, artistic or cultural facilities.

2.  Improvements that are located on federal, state, county or municipal property and owned by the lessee of the property if:

(a)  The improvements are required to become the property of the federal, state, county or municipal owner of the property on termination of the leasehold interest in the property.

(b)  Both the improvements and the property are:

(i)  Used for or in connection with aviation, including hangars, tie‑downs, aircraft maintenance, sales of aviation‑related items, charter and rental activities, parking facilities and restaurants, stores and other services located in a terminal.

(ii)  Located on a state, county, city or town airport or a public airport operating pursuant to sections 28‑8423, 28‑8424 and 28‑8425.

3.  Property that is defined as "contractor-acquired property" or "government-furnished property" in the federal acquisition regulations (48 Code of Federal Regulations section 45.101) and that is leased to or acquired by the government and used to perform a government contract.

4.  Property of a corporation that is organized by or at the direction of this state or a county, city or town to develop, construct, improve, repair, replace or own any property, improvement, building or other facility to be used for public purposes that the state, county, city or town pledges to lease or lease-purchase with state, county or municipal special or general revenues and that is not otherwise exempt under chapter 11, article 3 of this title.

5.  Real property and improvements, including land, buildings, furniture and equipment, regardless of ownership, that are leased for the entire valuation year to, and used exclusively by, a nonprofit organization that is recognized under section 501(c)(3) of the internal revenue code and that operates on the premises as either a charter school pursuant to section 15‑183 or a residential treatment and education facility or that are leased for the entire valuation year to, and used exclusively by, a nonprofit church, religious assembly or religious institution. If only part of a parcel of real property or improvements to real property is leased for operation of a charter school or residential treatment and education center or a church, religious assembly or religious institution as provided by this paragraph, only the portion so leased qualifies for classification under this section. A property owner who that leases property to a charter school or residential treatment and education facility or a church, religious assembly or religious institution as provided by this paragraph shall file an affidavit with the county assessor stating that the charter school or residential treatment and education facility or the church, religious assembly or religious institution shall be the sole beneficiary of the change in property tax classification pursuant to this section and that the lease rate that is charged to the charter school or residential treatment and education facility or the church, religious assembly or religious institution is consistent with the lease rates that are charged to other tenants of the property or a fair market rate.

B.  Improvements that are located in an area defined as a research park pursuant to section 35‑701 may not be classified under this section.

C.  All property classified as class nine is subject to valuation at full cash value. END_STATUTE

Sec. 5.  Retroactivity

This act applies retroactively to taxable years beginning from and after December 31, 2018.


 

 

 

 

APPROVED BY THE GOVERNOR MAY 13, 2019.

 

FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 13, 2019.

feedback