Bill Text: AZ SB1309 | 2021 | Fifty-fifth Legislature 1st Regular | Introduced


Bill Title: Property classification; gasoline manufacturing equipment

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Introduced) 2021-02-17 - Senate FIN Committee action: Held, voting: (0-0-0-0) [SB1309 Detail]

Download: Arizona-2021-SB1309-Introduced.html

 

 

 

REFERENCE TITLE: property classification; gasoline manufacturing equipment

 

 

 

 

State of Arizona

Senate

Fifty-fifth Legislature

First Regular Session

2021

 

 

 

SB 1309

 

Introduced by

Senators Shope: Borrelli, Contreras

 

 

AN ACT

 

amending sections 42‑12006 and 42‑13054, 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 42-12006, Arizona Revised Statutes, is amended to read:

START_STATUTE42-12006.  Class six property

For purposes of taxation, class six is established consisting of:

1.  Noncommercial historic property as defined in section 42‑12101 and valued at full cash value.

2.  Real and personal property that is located within the area of a foreign trade zone or subzone established under 19 United States Code section 81 sections 81a through 81u and title 44, chapter 18, that is activated for foreign trade zone use by the district port director of the United States customs service and border protection pursuant to 19 Code of Federal Regulations section 146.6 and that is valued at full cash value.  Property that is classified under this paragraph shall not thereafter be classified under paragraph 6 of this section.

3.  Real and personal property and improvements that are located in a military reuse zone that is established under title 41, chapter 10, article 3 and that is devoted to providing aviation or aerospace services or to manufacturing, assembling or fabricating aviation or aerospace products, valued at full cash value and subject to the following terms and conditions:

(a)  Property may not be classified under this paragraph for more than five tax years.

(b)  Any new addition or improvement to property already classified under this paragraph qualifies separately for classification under this paragraph for not more than five tax years.

(c)  If a military reuse zone is terminated, the property in that zone that was previously classified under this paragraph shall be reclassified as prescribed by this article.

(d)  Property that is classified under this paragraph shall not thereafter be classified under paragraph 6 of this section.

4.  Real and personal property and improvements or a portion of such property comprising an environmental technology manufacturing, producing or processing facility that qualified under section 41‑1514.02, valued at full cash value and subject to the following terms and conditions:

(a)  Property shall be classified under this paragraph for twenty tax years from the date placed in service.

(b)  Any addition or improvement to property already classified under this paragraph qualifies separately for classification under this subdivision for an additional twenty tax years from the date placed in service.

(c)  After revocation of certification under section 41‑1514.02, property that was previously classified under this paragraph shall be reclassified as prescribed by this article.

(d)  Property that is classified under this paragraph shall not thereafter be classified under paragraph 6 of this section.

5.  That portion of real and personal property that is used on or after January 1, 1999 specifically and solely for remediation of the environment by an action that has been determined to be reasonable and necessary to respond to the release or threatened release of a hazardous substance by the department of environmental quality pursuant to section 49‑282.06 or pursuant to its corrective action authority under rules adopted pursuant to section 49‑922, subsection B, paragraph 4 or by the United States environmental protection agency pursuant to the national contingency plan (40 Code of Federal Regulations part 300) and that is valued at full cash value.  Property that is not being used specifically and solely for the remediation objectives described in this paragraph shall not be classified under this paragraph.  For the purposes of this paragraph, "remediation of the environment" means one or more of the following actions:

(a)  Monitoring, assessing or evaluating the release or threatened release.

(b)  Excavating, removing, transporting, treating and disposing of contaminated soil.

(c)  Pumping and treating contaminated water.

(d)  Treatment, containment Treating, containing or removal of removing contaminants in groundwater or soil.

6.  Real and personal property and improvements constructed or installed from and after December 31, 2004 through December 31, 2024 and owned by a qualified business under section 41‑1516 and used solely for the purpose of harvesting, transporting or processing qualifying forest products removed from qualifying projects as defined in section 41‑1516.  The classification under this paragraph is subject to the following terms and conditions:

(a)  Property may be initially classified under this paragraph only in valuation years 2005 through 2024.

(b)  Property may not be classified under this paragraph for more than five years.

(c)  Any new addition or improvement, constructed or installed from and after December 31, 2004 through December 31, 2024, to property already classified under this paragraph qualifies separately for classification and assessment under this paragraph for not more than five years.

(d)  Property that is classified under this paragraph shall not thereafter be classified under paragraph 2, 3 or 4 of this section.

7.  Real and personal property and improvements to the property that are used specifically and solely to manufacture, from and after December 31, 2006 through December 31, 2023, biodiesel fuel that is one hundred per cent percent biodiesel and its by‑products or motor vehicle biofuel and its by-products and that are valued at full cash value.  This paragraph applies only to the portion of property that is used specifically for manufacturing and processing one hundred per cent percent biodiesel fuel, or its related by-products, or motor vehicle biofuel, or its related by‑products, from raw feedstock obtained from off-site sources, including necessary on‑site storage facilities that are intrinsically associated with the manufacturing process.  Any other commercial or industrial use disqualifies the entire property from classification under this paragraph.  For the purposes of this paragraph, "motor vehicle biofuel" means a solid, liquid or gaseous fuel that is derived from biological material such as plant or animal matter, excluding organic material that has been transformed by geological processes into substances such as coal or petroleum or derivatives thereof, and that:

(a)  Contains fuel additives in compliance with federal and state law.

(b)  Is manufactured exclusively for use in a motor vehicle.

8.  Real and personal property and improvements that are certified pursuant to section 41‑1511, subsection C, paragraph 2 and that are used for renewable energy manufacturing or headquarters operations as provided by section 42‑12057.  This paragraph applies only to property that is used in manufacturing and headquarters operations of renewable energy companies, including necessary on-site research and development, testing and storage facilities that are associated with the manufacturing process.  Up to ten per cent percent of the aggregate full cash value of the property may be derived from uses that are ancillary to and intrinsically associated with the manufacturing process or headquarters operation.  Any additional ancillary property is not qualified for classification under this paragraph.  No new properties may be classified pursuant to this paragraph from and after December 31, 2014.  Classification under this paragraph is limited to the time periods determined by the Arizona commerce authority pursuant to section 41‑1511, subsection C, paragraph 2, subdivision (a) or (b).  Property that is classified under this paragraph shall not thereafter be classified under any other paragraph of this section.

9.  Real and personal property and improvements that are specifically and solely used to manufacture, from and after December 31, 2020 through December 31, 2051, zero-sulfur gasoline from natural gas and that are valued at full cash value. This paragraph applies only to the portion of the property that is used specifically for manufacturing, processing and storing zero-sulfur gasoline and liquid petroleum gases made from natural gas feedstock obtained from off‑site sources.  Any commercial or industrial use that is not associated with manufacturing zero-sulfur gasoline and liquid petroleum gases disqualifies the entire property from classification under this paragraph.  For the purposes of this paragraph, "zero-sulfur gasoline" means gasoline and natural gas liquids made from natural gas that contain less than one part per million of sulfur on an annual basis at the facility gate, excluding sulfur contained in additives that comply with federal or state law. END_STATUTE

Sec. 2.  Section 42-13054, Arizona Revised Statutes, is amended to read:

START_STATUTE42-13054.  Taxable value of personal property; depreciated values of personal property in class one, class two (P) and class six

A.  The taxable value of personal property that is valued by the county assessor is the result of acquisition cost less minus any appropriate depreciation as prescribed by tables adopted by the department.  The taxable value shall not exceed the market value.

B.  Except as provided in subsection C of this section and notwithstanding any other statute, the assessor shall adjust the depreciation schedules prescribed by the department as follows to determine the valuation of personal property:

1.  For personal property that is initially classified during tax year 1994 through tax year 2007 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42‑12001 and personal property that is initially classified during tax year 1995 through tax year 2007 as class two (P) pursuant to section 42‑12002:

(a)  For the first tax year of assessment, the assessor shall use thirty‑five percent of the scheduled depreciated value.

(b)  For the second tax year of assessment, the assessor shall use fifty‑one percent of the scheduled depreciated value.

(c)  For the third tax year of assessment, the assessor shall use sixty‑seven percent of the scheduled depreciated value.

(d)  For the fourth tax year of assessment, the assessor shall use eighty‑three percent of the scheduled depreciated value.

(e)  For the fifth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines.

2.  For personal property that is initially classified during tax year 2008 through tax year 2011 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42‑12001 and personal property that is initially classified during tax year 2008 through tax year 2011 as class two (P) pursuant to section 42‑12002:

(a)  For the first tax year of assessment, the assessor shall use thirty percent of the scheduled depreciated value.

(b)  For the second tax year of assessment, the assessor shall use forty‑six percent of the scheduled depreciated value.

(c)  For the third tax year of assessment, the assessor shall use sixty-two percent of the scheduled depreciated value.

(d)  For the fourth tax year of assessment, the assessor shall use seventy‑eight percent of the scheduled depreciated value.

(e)  For the fifth tax year of assessment, the assessor shall use ninety‑four percent of the scheduled depreciated value.

(f)  For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines.

3.  For personal property that is initially classified during or after tax year 2012 as class one, paragraph 8, 9, 10 or 13 pursuant to section 42‑12001, personal property that is initially classified during or after tax year 2012 as class two (P) pursuant to section 42‑12002 and personal property that is acquired during or after tax year 2017 and initially classified during or after tax year 2018 as class six pursuant to section 42‑12006, paragraph 2, or 3 or 9:

(a)  For the first tax year of assessment, the assessor shall use twenty‑five percent of the scheduled depreciated value.

(b)  For the second tax year of assessment, the assessor shall use forty‑one percent of the scheduled depreciated value.

(c)  For the third tax year of assessment, the assessor shall use fifty‑seven percent of the scheduled depreciated value.

(d)  For the fourth tax year of assessment, the assessor shall use seventy‑three percent of the scheduled depreciated value.

(e)  For the fifth tax year of assessment, the assessor shall use eighty‑nine percent of the scheduled depreciated value.

(f)  For the sixth and subsequent tax years of assessment, the assessor shall use the scheduled depreciated value as prescribed in the department's guidelines.

C.  The additional depreciation prescribed in subsection B of this section:

1.  Does not apply to any property valued by the department.

2.  Shall not reduce the valuation below the minimum value prescribed by the department for property in use. END_STATUTE

Sec. 3.  Retroactivity

This act applies retroactively to tax years beginning from and after December 31, 2020.

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