Bill Text: AZ HB2504 | 2010 | Forty-ninth Legislature 2nd Regular | Chaptered


Bill Title: GPLET; lease records and reporting

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2010-05-11 - Governor Signed [HB2504 Detail]

Download: Arizona-2010-HB2504-Chaptered.html

 

 

 

Senate Engrossed House Bill

 

 

 

 

State of Arizona

House of Representatives

Forty-ninth Legislature

Second Regular Session

2010

 

 

HOUSE BILL 2504

 

 

 

AN ACT

 

Amending sections 42-6202, 42-6203, 42-6204, 42-6205, 42-6206, 42-6208, 42‑6209 and 42-6210, Arizona Revised Statutes; relating to government property lease excise tax.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



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

Section 1.  Section 42-6202, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6202.  Commercial government property lease excise tax

A.  A government lessor shall levy and the county treasurer shall collect an annual excise tax on each prime lessee for the use or occupancy of the each government lessor's government property improvement.

B.  A government lessor may not own or operate a government property improvement unless one of the following applies:

1.  The government lessor levies and collects a commercial The improvement is subject to the government property lease excise tax under this article with respect to the improvement.

2.  The improvement is exempt from tax under section 42‑6208.

3.  Tax on the improvement has been abated under section 42‑6209.

C.  Within thirty days after entering into a lease for the occupancy of a government property improvement, the government lessor shall:

1.  Record a memorandum of lease in the office of the county recorder in the county in which the government property improvement is located.  The memorandum of lease must include the basic lease terms, including the names of the parties, the leased property, the lease term, including the beginning and ending dates, and any options to renew the lease or to purchase any of the government property improvement or government owned land.

2.  Submit to the county treasurer and the department of revenue copies of the lease or an abstract of the lease.

D.  The department of revenue shall maintain a public database by county, city and town of all government property leases that are subject to the tax under this article.

E.  If a county assessor becomes aware of a government property improvement that is or should be subject to the tax under this article, the assessor shall notify the county treasurer and the department of revenue for confirmation that the improvement is included in their databases. END_STATUTE

Sec. 2.  Section 42-6203, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6203.  Rates of tax

A.  Except as otherwise provided in this section, if a lease of a government property improvement was entered into before June 1, 2010, or if a development agreement, ordinance or resolution was approved by the governing body of the government lessor before June 1, 2010 that authorized a lease on the occurrence of specified conditions and the lease was entered into within ten years after the date the development agreement was entered into or the ordinance or resolution was approved by the governing body:

1.  The tax authorized by this article shall be levied and collected at the following rates:

1.  (a)  One dollar per square foot of gross building space for office buildings with one floor above ground.

2.  (b)  One dollar twenty‑five cents per square foot of gross building space for office buildings with more than one but fewer than eight floors above ground.

3.  (c)  One dollar seventy‑five cents per square foot of gross building space for office buildings with eight floors or more above ground.

4.  (d)  One dollar fifty cents per square foot of retail building space, including space that is devoted to the sale of tangible personal property, restaurants, health clubs, hair salons, dry cleaners, travel agencies and other retail services.

5.  (e)  One dollar fifty cents per square foot of hotel or motel building space.

6.  (f)  Seventy‑five cents per square foot of warehouse or industrial building space.

7.  (g)  Fifty cents per square foot of residential rental building space.

8.  (h)  One hundred dollars per parking space located in a parking garage or deck.

9.  (i)  One dollar per square foot of all other government property improvements not included in paragraphs 1 through 8 subdivisions (a) through (h) of this subsection paragraph.

B.  2.  The tax rate for government property improvements for which the original certificate of occupancy was issued:

1.  (a)  At least ten years but less than twenty years before the date the tax is due is eighty per cent of the rate provided in subsection A paragraph 1 of this section subsection.

2.  (b)  At least twenty years but less than thirty years before the date the tax is due is sixty per cent of the rate provided in subsection A paragraph 1 of this section subsection.

3.  (c)  At least thirty but less than forty years before the date the tax is due is forty per cent of the rate provided in subsection A paragraph 1 of this section subsection.

4.  (d)  At least forty but less than fifty years before the date the tax is due is twenty per cent of the rate provided in subsection A paragraph 1 of this section subsection.

5.  (e)  Fifty or more years before the date the tax is due is zero.

C.  3.  If no certificate of occupancy can be located, dated aerial photographs or other evidence of substantial completion may be used to determine the age of the building for purposes of subsection B paragraph 2 of this section subsection.

4.  A lease or development agreement, originally subject to this subsection, that is subsequently amended remains subject to this subsection if the amended lease or development agreement meets all of the following requirements:

(a)  The government lessor determines that the amendment furthers the original purpose of the lease or development agreement.

(b)  Any land added under the amendment is contiguous to the land under the original lease or development agreement and does not increase the land area under the original lease or development agreement by more than fifty per cent.

(c)  Any government property improvement added under the amendment does not increase the area of gross building space of government property improvements under the original lease or development agreement by more than one hundred per cent.

B.  Except as otherwise provided in this section, if a lease of a government property improvement does not meet the conditions for applying subsection a of this section:

1.  Subject to paragraphs 2 and 3 of this subsection, the tax authorized by this article shall be levied and collected at the following base rates, which apply through December 31, 2011:

(a)  Two dollars per square foot of gross building space for office buildings with one floor above ground.

(b)  Two dollars thirty cents per square foot of gross building space for office buildings with more than one but fewer than eight floors above ground.

(c)  Three dollars ten cents per square foot of gross building space for office buildings with eight floors or more above ground.

(d)  Two dollars fifty-one cents per square foot of retail building space, including space that is devoted to the sale of tangible personal property, restaurants, health clubs, hair salons, dry cleaners, travel agencies and other retail services.

(e)  Two dollars per square foot of hotel or motel building space.

(f)  One dollar thirty-five cents per square foot of warehouse or industrial building space.

(g)  Seventy-six cents per square foot of residential rental building space.

(h)  Two hundred dollars per parking space located in a parking garage or deck.

(i)  Two dollars per square foot of all other government property improvements not included in subdivisions (a) through (h) of this paragraph.

2.  If, in the tax year in which the lease of the government property improvement is entered into, the aggregate of all ad valorem property tax rates of all taxing jurisdictions in which the government property improvement is located is within ninety per cent and one hundred ten per cent of the county-wide average combined property tax rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently adjusted pursuant to paragraph 3 of this subsection, applies with respect to that government property improvement.  If, in the tax year in which the lease of the government property improvement is entered into, the aggregate of all ad valorem property tax rates of all taxing jurisdictions in which the government property improvement is located is Less than ninety per cent of the county-wide average combined property tax rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently adjusted pursuant to paragraph 3 of this subsection, shall be reduced by ten per cent.

3.  On or before December 1, 2011 and December 1 of each year thereafter, for all government property leases that are subject to this subsection the department of revenue shall adjust the tax rates that apply under paragraphs 1 and 2 of this subsection in the following calendar year for each property use according to the average annual positive or negative percentage change for the two most recent fiscal years in the producer price index for new construction or its successor index published by the United States bureau of labor statistics.  On or before December 15 of each year, the department shall post the adjusted rates for the following calendar year on its official website and transmit the adjusted rates to each county treasurer.

D.  C.  The tax rate for a government property improvement that was constructed pursuant to a lease or development agreement entered into from and after June 30, 1996 and that is located outside a slum or blighted area established pursuant to title 36, chapter 12, article 3 is one and one‑half times the rate established by subsections A and B of this section.

E.  D.  Within the first twenty years after the issuance of the original certificate of occupancy, the tax rate on the use or occupancy of a government property improvement is twenty per cent of the rate established in subsections A and B of this section for any of the following:

1.  Government property improvements that are subject to leases or agreements that were entered into before April 1, 1985, and options and rights contained in the leases or agreements.

2.  Government property improvements that are subject to leases entered into based on a redevelopment contract, as defined in section 36‑1471, entered into before April 1, 1985.

3.  Government property improvements that are subject to leases entered into based on an agreement for a redevelopment project for which federal grant monies have been received and that was entered into before April 1, 1985.

4.  Government property improvements that are located at an airport that was owned on or before January 1, 1988 by a county having a population of four hundred thousand persons or less or by a city or town that is located in a county having a population of four hundred thousand persons or less if the property is used primarily for manufacturing, retail, distribution, research or commercial purposes.  In For the purposes of this paragraph, "commercial" includes facilities for office, recreational, hotel, motel and service uses.

F.  E.  Within the first ten years after the issuance of the certificate of occupancy, the tax rate on the use or occupancy of a government property improvement that is located in a slum or blighted area established pursuant to title 36, chapter 12, article 3, that resulted or will result in an increase in property value of at least one hundred per cent and that is not eligible for abatement pursuant to section 42‑6209 is eighty per cent of the rate established in subsections A and B of this section.

G.  F.  The tax rate to be applied under subsection A or B of this section shall be determined by the predominant use to which the government property improvement is devoted, except that in all cases the tax rate prescribed by subsection A, paragraph 1, subdivision (h) or subsection B, paragraph 1, subdivision (h) of this section shall be applied to any parking garage or deck.  If there is no single predominant use, the tax shall be determined by applying the appropriate tax rate to the building space devoted to each use identified in that subsection.  For the purposes of this subsection, in applying the tax rates under subsection A of this section the functional area of a government property improvement does not include subsidiary, auxiliary or servient areas such as lobbies, stairwells, mechanical rooms and meeting and banquet rooms.  For the purposes of this subsection, "predominant use" means the use to which eighty‑five per cent or more of the functional area of a government property improvement is devoted.

H.  G.  Prime lessees of government property improvements who become taxable or whose taxable status terminates during the calendar year in which the taxes are due, including prime lessees subject to exemption or abatement under sections 42‑6208 and 42‑6209, shall pay tax for that calendar year on a pro rata basis. END_STATUTE

Sec. 3.  Section 42-6204, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6204.  Payment; return; interest; penalty

A.  The taxes that are levied pursuant to this article are:

1.  Due and payable to the county treasurer annually on or before December 1.

2.  Delinquent if not paid on or before that date.

B.  The prime lessee, if subject to the tax or qualified for an abatement under this article, shall submit a return to the government lessor county treasurer on a return form prescribed by the government lessor department of revenue and submit a copy of the return to the government lessor.  If the prime lessee is exempt from the tax pursuant to section 42‑6208, the prime lessee shall keep and maintain the information required in this subsection.  The return form shall be made available by the government lessor county treasurer at least sixty days before the taxes are due and payable and shall include:

1.  The name and address of the prime lessee.

2.  The location of the government property improvement.

3.  The amount of gross building space or number of parking garage or deck spaces.  The prime lessee may submit an initial statement of gross building space that is certified by a person who is professionally credentialed in this state as an architect, general contractor, surveyor or appraiser and thereafter shall file an annual statement with the return, under penalty of perjury, that the gross building space is unchanged from the amount previously certified.

4.  The date of the original certificate of occupancy.

5.  The use or uses of the property.

6.  If an abatement under section 42‑6209 applies, a certification under penalty of perjury that all elements necessary to qualify for the abatement are satisfied for the year covered by the return.

7.  Any other pertinent information that the government lessor may require is required by the return form.

C.  If any part of the tax is not paid before it becomes delinquent, interest accrues on the unpaid amount at the rate and in the manner prescribed by section 42‑1123 until it is paid.  Interest on overpayments accrues at the rate and in the manner prescribed by section 42‑1123 until the refund is paid by the county treasurer.

D.  The government lessor county treasurer shall assess and collect a penalty of five per cent of any part of the tax that is not paid before it becomes delinquent.

E.  The government lessor county treasurer shall issue a receipt to the prime lessee for payments under this article.

F.  On or before February 15 of each year, the county treasurer shall submit a report to:

1. The department of revenue of all returns and payments received for the preceding calendar year under this section.  The report shall be in a form and contain data prescribed by the department of revenue.

2.  Each government lessor of all returns and payments received for the preceding calendar year with respect to leases of government property improvements owned by the government lessor.  These reports shall contain the same data prescribed pursuant to paragraph 1 of this subsection.

F.  G.  The government lessor shall be county treasurer is entitled to rely upon any information contained in any abatement certification described in subsection B, paragraph 6 of this section unless the government lessor county treasurer has actual knowledge that the certification is inaccurate. END_STATUTE

Sec. 4.  Section 42-6205, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6205.  Disposition of revenue

A.  The government lessor county treasurer shall separately account for payments received under this article with respect to each government property improvement.

B.  Within thirty days after receiving tax revenues under this article, the government lessor county treasurer shall pay to the following taxing jurisdictions in which the government property improvement is located the monies received with respect to the improvement, allocating the revenue among the jurisdictions as follows:

1.  The county, for deposit in its general fund, thirteen per cent.

2.  The city or town, seven per cent.  If the government property improvement is located in an unincorporated area, the revenue that would otherwise be allocated to a city or town shall be allocated to the other jurisdictions identified in this section in the same proportion that the remaining revenues are allocated to them.

3.  The community college district, seven per cent.  If the government property improvement is not located in a community college district, the revenue that would otherwise be allocated to the district shall be allocated to the other jurisdictions identified in this section in the same proportion that the remaining revenues are allocated to them.

4.  The common school district, thirty-six and one-half per cent, the high school district, thirty‑six and one-half per cent, the common school district not within a high school district, seventy-three per cent, or the unified school district, seventy-three per cent.  If the government property improvement is not located in any school district, the revenue that would otherwise be allocated under this paragraph shall be allocated to the other jurisdictions identified in this section in the same proportion that the remaining revenues are allocated to them.

C.  The county treasurer shall distribute all monies collected or received under this article as delinquent or back taxes in the same manner and proportions as required by subsection B, except that the county treasurer shall credit to the county general fund any interest and penalties collected under this article with respect to delinquent taxes. END_STATUTE

Sec. 5.  Section 42-6206, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6206.  Leases and development agreements; acknowledgment of tax liability; approval requirements; default

A.  Each lease or development agreement between a prime lessee and a government lessor entered into after June 30, 1996 shall include:

1.  A notice of the tax liability under this article.

2.  A provision that failure by the prime lessee to pay the tax after notice and an opportunity to cure is an event of default that could result in divesting the prime lessee of any interest in or right of occupancy of the government property improvement.

B.  Except as provided by subsection C of this section, each lease or development agreement between a prime lessee and a government lessor for a government property improvement located in a slum or blighted area that is established pursuant to title 36, chapter 12, article 3, that is entered into from and after May 31, 2010 and that does not meet the conditions provided in section 42-6203, subsection A:

(a)  Shall not be approved unless the government lessor:

(i)  Notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval.  The notice must include the name and address of the intended prime lessee, the location and proposed use of the government property improvement and the proposed term of the lease or development agreement.

(ii)  Determines that, within the term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the development agreement or lease on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor.  The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body.  A lease or development agreement between a prime lessee and a government lessor involving residential rental housing is exempt FRoM the economic estimate analysis requirements of this item.

(b)  Must be approved by a simple majority vote of the governing body without the use of a consent calendar.

C.  A lease or development agreement that is subject to subsection B of this section must provide that the lease begins within ten years after approval of the development agreement and the term of the lease does not exceed twenty-five years, including any abatement period authorized under section 42-6209, and regardless of whether the lease is transferred or conveyed to subsequent prime lessees during that period.  As soon as reasonably practicable but within twelve months after the expiration date of the lease the government lessor must convey to the current prime lessee title to the government property improvement and underlying land.  Property conveyed to the prime lessee under this subdivision does not qualify for classification as class six property or for any other discounted assessment regardless of the location or condition of the property.

D.  Subsections B and C of this section do not apply if the government lessor is acting as a commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a public purpose.

B.  E.  No later than June 30 of each year the government lessor shall provide the county assessor with a complete list of development agreements between the government lessor and the prime lessees, including the commencement and termination dates of the agreements, the names and addresses of the prime lessees and the locations of the properties that are subject to the agreements. END_STATUTE

Sec. 6.  Section 42-6208, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6208.  Exempt government property improvements

The tax under this article does, section 42-6206, subsection B and section 42-6209, subsection C do not apply with respect to:

1.  Property that is used for a governmental activity.

2.  Property that is used for public housing.

3.  Easements and rights-of-way of railroads and gas, electric, water, pipeline and telephone utilities.

4.  Interests in all or any part of a facility that is owned of record by a government lessor and used primarily for athletic, recreational, entertainment, artistic, cultural or convention activities if the interest is used for those activities or activities directly related and incidental to these uses including concession stands.

5.  Property that is located on municipal airports and airports that operate pursuant to sections 28‑8423, 28‑8424 and 28‑8425, if the property is used for or in connection with aviation, including hangars, tie-downs, aircraft maintenance, sale of aviation related items, charter and rental activities, commercial aircraft terminal franchises, rental car operations, parking facilities and restaurants, stores and other services that are located in a terminal.

6.  The use by a commercial airline of the runways and terminal facilities of state, city, town or county airports and public airports operating pursuant to sections 28‑8423, 28‑8424 and 28‑8425.

7.  Leases of property or interests in a transportation facility that is constructed or operated pursuant to title 28, chapter 22.

8.  Interests in lands held in trust by this state pursuant to title 37, chapter 2, article 1.

8.  9.  Interests in property held in trust for an Indian or an Indian tribe by the United States government.

9.  10.  Interests in 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 owned by the government and used to perform a government contract.

10.  11.  Property of a corporation that is organized by or at the direction of 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 county, city or town pledges to lease or lease‑purchase with county or municipal special or general revenues.

11.  12.  Interests in property used by a chamber of commerce recognized under section 501(c)(6) of the United States internal revenue code if the property is used predominately for those federal tax exempt purposes.

12.  13.  Interests in property used by organizations that are exempt from taxation under section 501(c)(3) of the internal revenue code.

13.  14.  Interests in parking garages or decks if the parking garages or decks are owned and operated by a government lessor or operated on behalf of a government lessor, by an entity other than the prime lessee, pursuant to a management agreement with the government lessor.

14.  15.  Residential rentals if the prime lessee is the occupant. END_STATUTE

Sec. 7.  Section 42-6209, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6209.  Abatement of tax for government property improvements in single central business district

A.  A government lessor shall city or town may abate the tax provided for under this article for a limited period beginning when the certificate of occupancy is issued and ending eight years after the certificate of occupancy is issued on a government property improvement that is constructed either before or after July 20, 1996 and that meets the following requirements:

1.  The improvement is located in a single central business district in a slum or blighted area that is established pursuant to title 36, chapter 12, article 3 the city or town and is subject to a lease or development agreement entered into on or after April 1, 1985.  for the purposes of this section:

(a)  A city or town shall not designate more than one central business district within its corporate boundaries.

(b)  A city or town shall not approve or enter into a development agreement or lease for a government property improvement within one year after the designation of the central business district in which the improvement is located.

(c)  "Central business district" means a single and contiguous geographical area designated by resolution of the governing body of the city or town and meeting the following requirements:

(i)  The central business district is located entirely WITHIN a slum or blighted area that is established pursuant to title 36, chapter 12, article 3.

(ii)  The central business district is geographically compact and no larger than the greater of five per cent of the total land area within the exterior boundaries of the city or town or six hundred forty acres.

2.  The government property improvement resulted or will result in an increase in property value of at least one hundred per cent.

B.  Unless waived by the government lessor, The prime lessee shall notify the county treasurer and the government lessor and apply for the abatement before the taxes under this article are due and payable in the first year after the certificate of occupancy is issued. The prime lessee shall notify the government lessor if the government property improvement no longer qualifies for abatement under this section.

C.  Except as provided by subsection D, each lease between a prime lessee and a government lessor for which the tax is abated under this section and that is entered into from and after May 31, 2010, and that does not meet the conditions provided in section 42-6203, subsection A, must be approved by a simple majority vote of the governing body without the use of a consent calendar and shall not be approved unless:

1.  The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval.  The notice must include the name and address of the intended prime lessee, the location and proposed use of the government property improvement and the proposed term of the lease or development agreement.

2.  The government lessor determines that, within the term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the development agreement or lease on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor.  The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body.  A lease or development agreement between a prime lessee and a government lessor involving residential rental housing is exempt from the economic estimate analysis requirements of this PARAGRAPH.

3.  The lease or development agreement provides that the government lessor may not approve an amendment to change the use of the government property improvement during the period of abatement unless:

(a)  The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval.  The notice must include the name and address of the prime lessee, the location and proposed use of the government property improvement and the remaining term of the lease or development agreement.

(b)  The government lessor determines that, within the remaining term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the change in the lease or development agreement on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor.  The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located  at least thirty days before the vote of the governing body.  A change in use under a lease or development agreement between a prime lessee and a government lessor to residential rental housing is exempt from the economic estimate analysis requirements of this subdivision.

D.  Subsection C does not apply if:

1.  The tax is not abated under this section.

2.  The government lessor is acting as a commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a public purpose. END_STATUTE

Sec. 8.  Section 42-6210, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6210.  Park property lease excise tax

A.  A county shall levy and collect an annual excise tax on each prime lessee of a lease with the national park service of the United States department of the interior of a property improvement located in the county.

B.  The tax prescribed by this section shall be assessed, collected and distributed in the same manner as prescribed in this article for the government property lease excise tax, except that:

1.  Section 42‑6206 does not apply to a lease with the national park service.

2.  The tax rate shall not be less than twenty per cent of the tax rate prescribed in section 42‑6203, subsection A or B, as applicable. END_STATUTE

Sec. 9.  Existing government property leases; recording and compiling data; definitions

A.  By December 31, 2010, each government lessor shall for each lease of a government property improvement in effect on the effective date of this act:

1.  Record a memorandum of lease in the office of the county recorder in the county in which the government property improvement is located.  The memorandum of lease must include the basic lease terms, including the names of the parties, the leased property, the lease term, including the beginning and ending dates, and any options to renew the lease or to purchase any of the government property improvement or government owned land.

2.  Submit copies of the lease or memorandum of lease to the treasurer of the county in which the government property improvement is located and to the department of revenue.

B.  For the purposes of this section, "government lessor" and "government property improvement" have the same meanings prescribed in section 42-6201, Arizona Revised Statutes.

Sec. 10.  Special audit; government property lease excise tax

A.  In 2015 the auditor general shall conduct and complete a special audit, as defined in section 41-1278, Arizona Revised Statutes, of title 42, chapter 6, article 5, Arizona Revised Statutes, to determine whether the government property lease excise tax, as modified by this act, achieves the goal of providing, in lieu of an ad valorem property tax on possessory interests, a viable revenue stream for counties, cities, towns, school districts and community college districts in which government property improvements are leased for private commercial, residential rental and industrial purposes.  The audit shall include consideration of:

1.  Accountability for government property leases subject to the tax.

2.  Compliance by government property lessors and prime lessees.

3.  Efficiencies in collecting the tax and distributing tax revenues and the use of tax revenues by counties, municipalities, community college districts and school districts.

4.  The statutory rates of tax in producing the expected revenues.

5.  The tax revenue previously being received from the vacant or underutilized property being redeveloped.

6.  The tax revenue generated from new economic activity conducted in government property improvements compared with the loss of ad valorem property tax revenues from tax-exempt government property improvements.

7.  The success of tax abatement under section 42-6209, Arizona Revised Statutes, as amended by this act, in promoting redevelopment in slum and blighted areas.

8.  Issues relating to government property improvements that are exempt from the tax.

9.  Any other issues relating to abuse or noncompliance with the requirements of the law.

10.  Other recommendations for achieving the goals described in this subsection.

B.  County treasurers and the department of revenue shall cooperate with and assist the auditor general in compiling data and other information necessary for the purposes of the audit.

C.  The auditor general shall provide copies of the audit report to:

1.  The governor, the president of the senate and the speaker of the house of representatives.

2.  The chairpersons of the house of representatives ways and means committee and the senate finance committee.

3.  The secretary of state.

4.  Any other person who requests a copy of the report.

D.  After the completion of the audit, each county treasurer shall pay the cost of the audit prescribed in this section before making any distribution as provided in section 42-6205, subsection B, Arizona Revised Statutes.  Each county treasurer shall pay the amount billed to each county by the auditor general within thirty days of the billing date.  In the event monthly tax collections are less than the amount billed, the county treasurer shall continue in the succeeding months to first pay the balance due the auditor general before making any other distribution until the bill is paid in full.

Sec. 11.  Review of government property lease excise tax rates

A.  By December 15, 2016, the joint legislative budget committee shall conduct an analysis to determine the effectiveness of the government property lease excise tax rates prescribed by section 42-6203, Arizona Revised Statutes, as amended by this act.  The analysis shall include consideration of:

1.  The total ad valorem property tax revenues that would be produced by the properties to counties, cities and towns, community college districts and school districts if the properties were taxable.

2.  The actual total annual amount of government property lease excise taxes collected and the amounts distributed to counties, cities and towns, community college districts and school districts.

3.  The tax revenue previously being received from the vacant or underutilized property being redeveloped.

4.  Determine the average aggregate ad valorem property tax levy per square foot for the various property types listed in section 42-6203, Arizona Revised Statutes, as amended by this act, and compare that levy with the levy rates prescribed by section 42-6203, subsection B, Arizona Revised Statutes, as amended by this act.

B.  The department of revenue shall cooperate with the joint legislative budget committee for the purposes of this section and, by October 1, 2015, provide the joint legislative budget committee with the public database of all government property leases maintained pursuant to section 42‑6202, Arizona Revised Statutes, as amended by this act.

C.  The joint legislative budget committee shall submit copies of its analysis pursuant to this section to:

1.  The governor, the president of the senate and the speaker of the house of representatives.

2.  The chairpersons of the house of representatives ways and means committee and the senate finance committee.

3.  The secretary of state.

4.  Any other person who requests a copy of the analysis.

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