Bill Text: AZ HB2321 | 2022 | Fifty-fifth Legislature 2nd Regular | Introduced
Bill Title: Short-term rentals; property classification
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-01-24 - House read second time [HB2321 Detail]
Download: Arizona-2022-HB2321-Introduced.html
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REFERENCE TITLE: short-term rentals; property classification |
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State of Arizona House of Representatives Fifty-fifth Legislature Second Regular Session 2022
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HB 2321 |
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Introduced by Representative Kavanagh
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AN ACT
amending sections 33-1901, 33-1902, 42-11054, 42-12001 and 42-12004, Arizona Revised Statutes; relating to property classification.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 33-1901, Arizona Revised Statutes, is amended to read:
33-1901. Definitions
In this article, unless the context otherwise requires:
1. "Managing agent" means a person, corporation, partnership or limited liability company that is authorized by the owner to operate and manage the property.
2. "Residential rental property" means property that is used solely primarily as leased or rented property for residential purposes. If the property is a space rental mobile home park, residential rental property includes the rental space that is leased or rented by the owner of that rental space but does not include the mobile home or recreational vehicle that serves as the actual dwelling if the dwelling is owned and occupied by the tenant of the rental space and not by the owner of the rental space.
3. "Slum property" means residential rental property that has deteriorated or is in a state of disrepair and that manifests one or more of the following conditions that are a danger to the health or safety of the public:
(a) Structurally unsound exterior surfaces, roof, walls, doors, floors, stairwells, porches or railings.
(b) Lack of potable water, adequate sanitation facilities, adequate water or waste pipe connections.
(c) Hazardous electrical systems or gas connections.
(d) Lack of safe, rapid egress.
(e) Accumulation of human or animal waste, medical or biological waste, gaseous or combustible materials, dangerous or corrosive liquids, flammable or explosive materials or drug paraphernalia.
Sec. 2. Section 33-1902, Arizona Revised Statutes, is amended to read:
33-1902. Residential rental property; recording with the assessor; agent designation; civil penalty; fee
A. An owner of residential rental property shall maintain with the assessor in the county where the property is located information required by this section in a manner to be determined by the assessor. The owner shall update any information required by this section within ten days after a change in the information occurs. The following information shall be maintained:
1. The name, address and telephone number of the property owner.
2. If the property is owned by a corporation, limited liability company, partnership, limited partnership, trust or real estate investment trust, the name, address and telephone number of any of the following:
(a) For a corporation, a corporate officer.
(b) For a partnership, a general partner.
(c) For a limited liability company, the managing or administrative member.
(d) For a limited partnership, a general partner.
(e) For a trust, a trustee.
(f) For a real estate investment trust, a general partner or an officer.
3. The street address and parcel number of the property.
4. The year the building was built.
5. If the property is rented for periods of less than thirty days.
B. An owner of residential rental property who lives outside this state shall designate and record with the assessor a statutory agent who lives in this state and who will accept legal service on behalf of the owner. The owner shall designate the agent in a manner to be determined by the assessor. The information shall include the name, address and telephone number of the agent.
C. Residential rental property shall not be occupied if the information required by this section is not on file with the county assessor. If the owner has not filed the information required by this section with the county assessor and the residential rental property is occupied by a tenant and the tenant chooses to terminate the tenancy, the tenant shall deliver to the landlord, owner or managing agent of the property a written ten day notice to comply with this section. The notice shall be delivered by certified mail, return receipt requested, or by hand delivery. If the owner does not comply with this section within ten days after receipt of the notice, the tenant may terminate the rental agreement and the landlord shall return all prepaid rent to the tenant. Security deposits shall be returned in accordance with section 33-1321, subsection D. The landlord shall return those monies by certified mail, return receipt requested, or by hand delivery to the tenant within ten days after the termination of terminating the rental agreement. This subsection applies to any existing lease and to any new lease after August 25, 2004. Notwithstanding this subsection, an owner is in compliance with this subsection only if the owner had filed the information required by subsection A of this section with the county assessor.
D. All records, files and documents that are required by this section are public records.
E. For residential rental property that is acquired by an owner after the date of the notice of assessed valuation and the notice prescribed by section 42-15103 and until the issuance of the next notice of assessed valuation, a city or town shall assess a civil penalty of one thousand dollars $1,000 against a person who fails to comply with this section, plus an additional one hundred dollars $100 for each month after the date of the original violation until compliance occurs. The court shall not suspend any portion of the civil penalty provided by this subsection.
F. Notwithstanding subsection E of this section, if a person complies within ten days after receiving the complaint that notices the violation, the court shall dismiss the complaint and shall not impose a civil penalty.
G. Except for newly acquired residential rental property as prescribed by subsection E of this section, if a residential rental property owner fails to register with the county assessor as prescribed by this section, the city or town may impose a civil penalty in the amount of one hundred fifty dollars per day $150 for each day of violation after the date of the most recent notice of assessed valuation and the notice prescribed by section 42-15103. If a person complies within ten days after receiving the notice from the county assessor, the court shall dismiss the complaint and shall not impose a civil penalty.
H. In carrying out this section, the county assessor shall have immunity as provided in section 12-820.01.
I. The county assessor may assess a fee of not more than ten dollars $10 for each initial registration and each change of information in the registry.
J. On request from a city or town, the county assessor shall provide the most current list of all registered rental property owners within the city's or town's boundaries.
Sec. 3. Section 42-11054, Arizona Revised Statutes, is amended to read:
42-11054. Standard appraisal methods and techniques
A. Subject to subsection B of this section, the department shall:
1. Prescribe guidelines for applying standard appraisal methods and techniques, including guidelines for a property with multiple uses, that shall be used by the department and county assessors in determining the valuation of property.
2. Prepare and maintain manuals and other necessary guidelines, consistent with this section, reflecting the standard methods and techniques to perpetuate a current inventory of taxable property and the valuation of that property.
B. Before they are adopted, the department shall submit each substantive proposed guideline, table and manual that is developed, amended or otherwise modified from and after December 31, 2006 to the joint legislative oversight committee on property tax assessment and appeals. The department shall not finally adopt, amend or otherwise modify a substantive guideline, table or manual for at least thirty days after submitting the measure to the committee. The committee may hold one or more informational hearings on the proposed measure within thirty days after submission. In adopting, amending or modifying the measure the department shall consider the committee's comments. If the committee fails to hold a hearing within thirty days after submission, the department may adopt, amend or modify the measure without further consideration.
C. In applying prescribed standard appraisal methods and techniques:
1. Current usage shall be included in the formula for reaching a determination of full cash value.
2. Solar energy devices, as defined in section 44-1761, grid-tied photovoltaic systems and any other device or system designed to produce solar energy primarily for on-site consumption are considered to add no value to the property on which such a device or system is installed.
3. If characterized as personal property, subject to any applicable constitutional exemption from taxation, solar energy devices, as defined in section 44-1761, grid-tied photovoltaic systems and any other device or system designed to produce solar energy primarily for on-site consumption shall be valued as provided in section 42-13056.
4. Energy efficient building components, renewable energy equipment and combined heat and power systems are considered to add no value to the property, if the property owner provides the county assessor with documentation of all elements that qualify pursuant to this paragraph, including documents showing actual acquisition and installation costs. The documentation must be submitted to the county assessor not later than six months before the notice of full cash value is issued for the initial evaluation year pursuant to section 42-15101 or, if the component is added after September 30 of the preceding year, not later than March 31 of the initial valuation year. For the purposes of this paragraph:
(a) "Combined heat and power system" means a system that generates electricity or mechanical power and useful thermal energy in a single, integrated system such so that the useful power output of the facility plus one-half the useful thermal output during any twelve-month period is not less than 42.5 percent of the total energy input of fuel to the facility.
(b) "Energy efficient building components" means high performance sustainable building components installed so that the buildings or building components meet or exceed the energy efficiencies prescribed by the United States environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the United States green building council, or an equivalent green building standard, or that are at least fifteen percent more energy efficient than the international energy conservation code in effect at the time of building permit issuance.
(c) "Renewable energy equipment" means equipment that is used to produce energy primarily for on-site consumption from renewable resources, including wind, forest thinnings, agricultural waste, biogas, biomass, geothermal, low-impact hydropower and solar energy not included under paragraph 2 of this subsection.
D. If the methods and techniques prescribe using market data as an indication of market value, the price paid for future anticipated property value increments shall be excluded.
E. For the purposes of determining full cash value, the department and county assessors shall use and apply the ratio standard guidelines issued by the department for tax year 1993 in the same manner as they were applied in tax year 1993. This subsection does not apply to property that is valued according to prescribed statutory methods or to property for which values are determined in the year after an appeal pursuant to section 42-16002.
Sec. 4. Section 42-12001, Arizona Revised Statutes, is amended to read:
42-12001. Class one property
For the purposes of taxation, class one is established consisting of the following subclasses:
1. Producing mines and mining claims, personal property used on mines and mining claims, improvements to mines and mining claims and mills and smelters operated in conjunction with mines and mining claims that are valued at full cash value pursuant to section 42-14053.
2. Standing timber that is valued at full cash value.
3. Real and personal property of gas distribution companies, electric transmission companies, electric distribution companies, combination gas and electric transmission and distribution companies, and companies engaged in the generation of generating electricity that are valued at full cash value pursuant to section 42-14151.
4. Real and personal property of airport fuel delivery companies that are valued pursuant to section 42-14503.
5. Real and personal property that is used by producing oil, gas and geothermal resource interests that are valued at full cash value pursuant to section 42-14102.
6. Real and personal property of water, sewer and wastewater utility companies that are valued at full cash value pursuant to section 42-14151.
7. Real and personal property of pipeline companies that are valued at full cash value pursuant to section 42-14201.
8. Real and personal property of shopping centers that are valued at full cash value or pursuant to chapter 13, article 5 of this title, as applicable, other than property that is included in class nine.
9. Real and personal property of golf courses that are valued at full cash value or pursuant to chapter 13, article 4 of this title.
10. All property, both real and personal, of manufacturers, assemblers or fabricators, other than property that is specifically included in another class described in this article, that is valued under this title.
11. Real and personal property that is used in communications transmission facilities and that provides public telephone or telecommunications exchange or interexchange access for compensation to effect two-way communication to, from, through or within this state.
12. Real property and improvements that are devoted to any other commercial or industrial use, other than property that is specifically included in another class described in this article, and that are valued at full cash value.
13. Personal property that is devoted to any other commercial or industrial use, other than property that is specifically included in another class described in this article, and that is valued at full cash value.
14. Real and personal property of electric cooperatives that are valued at full cash value pursuant to section 42-14159.
15. Real and personal property and improvements that are rented to lodgers for periods of less than thirty days for a total of more than one hundred twenty days in a calendar year and that are valued at full cash value, except:
(a) Property that is occupied by the owner of the property as the owner's primary residence and that is included in class three.
(b) Property that the owner of the property attests to the county assessor that the owner occupies for at least sixty days in a calendar year. IF the owner of the property will no longer meet the sixty-day occupancy requirement, the owner of the property shall notify the county assessor.
(c) Property for residential purposes that is rented and that is included in class four.
Sec. 5. Section 42-12004, Arizona Revised Statutes, is amended to read:
42-12004. Class four property
A. For the purposes of taxation, class four is established consisting of:
1. Real and personal property and improvements to the property that are used for residential purposes, including residential property that is owned in foreclosure by a financial institution, that is not otherwise included in another classification and that is valued at full cash value. The homesite that is included in class four may include:
(a) Up to ten acres on a single parcel of real property on which the residential improvement is located.
(b) More than ten, but not more than forty, acres on a single parcel of real property on which the residential improvement is located if it is zoned exclusively for residential purposes or contains legal restrictions or physical conditions that prevent the division of the parcel. For the purposes of this subdivision, "physical conditions" means topography, mountains, washes, rivers, roads or any other configuration that limits the residential usable land area.
2. Real and personal property and improvements to the property that are used solely as leased or rented property for residential purposes, that are not included in class one, two, three, six, seven or eight and that are valued at full cash value.
3. Child care facilities that are licensed under title 36, chapter 7.1 and that are valued at full cash value.
4. Real and personal property and improvements to property that are used to operate nonprofit residential housing facilities that are structured to house or care for persons with disabilities or who are at least sixty-two years of age or older and that are valued at full cash value.
5. Real and personal property and improvements that are used to operate licensed residential care institutions or licensed nursing care institutions that provide medical services, nursing services or health related health-related services and that are structured to house or care for persons with disabilities or who are at least sixty-two years of age or older and that are valued at full cash value.
6. Real and personal property consisting of no not more than eight rooms of residential property that are leased or rented to transient lodgers, together with furnishing no not more than a breakfast meal, by the owner who resides on the property and that is valued at full cash value.
7. Real and personal property consisting that consists of residential dwellings that are maintained for occupancy by agricultural employees as a condition of employment or as a convenience to the employer, that is not included in class three and that is valued at full cash value. The land associated with these dwellings shall be valued as agricultural land pursuant to chapter 13, article 3 of this title.
8. Real property and improvements to property constituting common areas that are valued pursuant to chapter 13, article 9 of this title.
9. Real and personal property that is defined as timeshare property by section 32-2197 and valued pursuant to chapter 13, article 10 of this title, except for any property used for commercial, industrial or transient occupancy purposes and included in class one to the extent of that use.
10. Real and personal property and improvements that are used for residential purposes and that are leased or rented to lodgers for periods of less than thirty days for either a total of one hundred twenty days or less in a calendar year or a total of more than one hundred twenty days in a calendar year and the owner of the property occupies the property for at least sixty days in that calendar year, except for:
(a) Property that is occupied by the owner of the property as the owner's primary residence and that is included in class three.
(b) Property that is used for commercial purposes and that is included in class one pursuant to section 42-12001, paragraph 15.
11. Low-income multifamily residential rental properties that are valued pursuant to chapter 13, article 13 of this title.
B. Subsection A, paragraphs 4 and 5 of this section do not limit eligibility for exemption from taxation under chapter 11, article 3 of this title.
Sec. 6. Applicability
This act applies to tax years beginning from and after December 31, 2022.
