HB 2383 — school districts; leases; housing development

The school plant fund is a continuing fund that is not subject to reversion.

E.

Proceeds from sales by condemnation or sales under threat of condemnation may be deposited with the county treasurer for deposit in the condemnation fund or the school plant fund of the school district.

The condemnation fund is a continuing fund that is not subject to reversion, except that after ten years any unspent monies shall be placed in the school plant fund to be used as prescribed in this section.

The governing board, or the superintendent or chief administrative officer with the approval of the governing board, may apply the proceeds in the condemnation fund to:

1.

The payment of any outstanding bonded indebtedness of the school district that is payable from the levy of taxes on property within the school district.

2.

Construct, acquire, improve, repair or furnish school facilities or sites after notice and a hearing.

F.

Proceeds from a right-of-way settlement shall be deposited with the county treasurer for deposit in the condemnation fund of the school district.

The governing board, or the superintendent or chief administrative officer with the approval of the governing board, shall apply those proceeds in the condemnation fund to construct, acquire, - 2 - H.B.

2383 improve, repair or furnish school facilities or sites after notice and a hearing.

G.

The restrictions prescribed in subsections B and C of this section do not apply to the proceeds from:

1.

Leases of school property to other schools.

2.

Leases of school property for less than one year.

3.

sales of school property of less than one hundred thousand dollars $100,000 per transaction.

H.

A lease of school property for less than one year that includes an automatic lease renewal resulting in a total lease duration that exceeds one year is considered a lease for more than one year for the purposes of this section.

I.

H.

For the purposes of this section, "capital outlay" means unrestricted capital outlay as prescribed in section 15-903, subsection C.

Sec.

2.

Section 15-1105, Arizona Revised Statutes, is amended to read:

15-1105.

Lease of school property;

immunity;

fee schedule;

use of monies;

tax exemption;

definitions A.

The SCHOOL DISTRICT governing board, or the superintendent or chief administrative officer with the approval of the governing board, may lease school property, including school buildings, grounds, buses and equipment, to any person, group or organization for any lawful purpose, including ANY recreational, educational, political, economic, artistic, moral, scientific, social, religious or other civic or governmental purpose in the interest of the community, including extended day resource programs.

The governing board, superintendent or chief administrative officer shall charge a reasonable use fee for the lease of the school property, which may include goods contributed or services rendered by the person, group or organization to the school district.

B.

The governing board, or the superintendent or chief administrative officer with the approval of the governing board, may permit ALLOW the uncompensated use of school buildings, grounds, buses, equipment and other school property by any school related SCHOOL-RELATED group, including student political organizations, or by any organization whose membership is open to the public and whose activities promote the educational function of the school district as determined in good faith by the school district's governing board, or the superintendent or chief administrative officer with the approval of the governing board, including extended day resource programs, except as provided in section 15-511.

C.

A school district and its employees, including the governing board, superintendent or chief administrative officer, are immune from civil liability with respect to all decisions made and actions taken to allow the lease or use of school property, unless the school district or its employees are guilty of gross negligence or intentional misconduct.

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2383 This subsection does not limit any other immunity provisions that are prescribed by law.

D.

A person, group or organization that is otherwise eligible to lease school property shall not be denied use of or charged differentiated fees for school property on the basis of the person's, group's or organization's beliefs, expression of beliefs or exercise of the rights of association that are protected under the laws of this state, the Constitution of Arizona, the laws of the United States or AND the United States Constitution.

E.

The governing board shall annually approve a fee schedule for the lease of school property.

The fee schedule shall include a designation of the persons, groups or organizations that shall have uncompensated use of the school property, and a procedure for determining the value of goods and services being provided as compensation for the use of school property.

The governing board, superintendent or chief administrative officer shall require proof of liability insurance for such use or lease of school property.

F.

Except as provided in section 15-1102, monies received for and derived from the use or lease of school property under this section shall be promptly deposited with the county treasurer, who shall credit the deposits to the civic center school fund of the respective school district.

Monies placed to the credit of a civic center school fund may be expended SPENT for civic center school purposes by warrants drawn upon ON AN order of the school district governing board, or the superintendent or chief administrative officer with the approval of the governing board.

The civic center school fund of a school district or multiple school district civic center school program is a continuing fund not subject to reversion, except upon ON termination of a civic center school program.

Upon ON termination of a civic center school program, any remaining funds shall MONIES revert to the school plant fund of the school district or districts.

G.

A SCHOOL DISTRICT GOVERNING BOARD MAY LEASE, OR APPROVE THE LEASE, OF SCHOOL PROPERTY TO ANY PERSON FOR A HOUSING DEVELOPMENT PROJECT SUBJECT TO THE REQUIREMENTS PRESCRIBED BY SECTION 15-342, 15-491, 15-789 OR 41-5704 OR THIS SECTION.

H.

PROPERTY AND BUILDINGS THAT ARE LEASED FROM A SCHOOL DISTRICT PURSUANT TO SECTION 15-342, 15-491, 15-789 OR 41-5704 OR THIS SECTION ARE:

1.

ELIGIBLE FOR A TAX EXEMPTION PURSUANT TO SECTION 42-11104 ONLY IF THE PROPERTY AND BUILDINGS ARE USED FOR EDUCATION PURPOSES.

2.

NOT ELIGIBLE FOR A TAX EXEMPTION PURSUANT TO SECTION 42-11133.

G.

I.

For the purposes of this section:

1.

"Educational function" means uses A USE that are IS directly related to the educational mission of the school district as adopted by the school district governing board and includes parent-teacher organizations, youth organizations and school employee organizations.

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2383 2.

"Extended day resource programs" means activities offered on school property before or after school or at times when school is not customarily in session for children who are of the age required for kindergarten programs and grades one through eight.

The program may be offered for children who are of the age required for a kindergarten program or for one grade or for any combination of kindergarten programs and grades.

Activities may include physical conditioning, tutoring, supervised homework or arts activities.

3.

"Reasonable use fee" means an amount that is at least equal to the school district's cost for utilities, services, supplies or personnel that the school provides to the lessee pursuant to the terms of the lease.

Sec.

3.

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

42-11104.

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 IF THE PROPERTY AND BUILDINGS ARE USED FOR EDUCATION PURPOSES.

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, SUBSECTION A, PARAGRAPH 1 by a nonprofit organization described under subsection C of this section, the county assessor, on request, shall issue a receipt for the affidavit.

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2383 E.

A nonprofit organization described under subsection C of this section shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt TAX-EXEMPT status under section 501(c)(3) of the internal revenue code when initially claiming the exemption.

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.

Sec.

4.

Section 42-11133, Arizona Revised Statutes, is amended to read:

42-11133.

Exemption for affordable housing projects;

definition A.

Property that is used exclusively for affordable rental housing pursuant to section 42 of the internal revenue code or another recorded restrictive covenant imposed by financing for affordable housing and related facilities are IS exempt from taxation if:

1.

The property is owned and operated by, or is a wholly owned subsidiary of, a corporation that is qualified pursuant to section 501(c)(3) or 501(c)(4) of the internal revenue code or a limited partnership or limited liability company in which the general partner or the managing member, as applicable, is an eligible nonprofit corporation or a single purpose entity that is wholly owned by one or more eligible nonprofit corporations.

2.

Either of the following applies:

(a) The acquisition, rehabilitation, development or operation of the property, or any combination of these factors, is financed with tax exempt TAX-EXEMPT mortgage revenue bonds or general obligation bonds or is financed by local, state or federal loans or grants and the amount of rent paid by or on behalf of the occupants does not exceed the amount of rent - 6 - H.B.

2383 that is prescribed by deed restrictions or by regulatory agreements pursuant to the property's financing or financial assistance terms.

(b) The owner of the property is eligible for and receives tax credits for low-income or moderate-income residential housing established under section 42 of the internal revenue code and the amount of rent paid by or on behalf of the occupants does not exceed the amount that is prescribed by deed restrictions or by regulatory agreements pursuant to the property's financing or financial assistance terms.

3.

THE PROPERTY IS NOT LEASED FROM A SCHOOL DISTRICT.

B.

To qualify under this section, the owner of the property must:

1.

For any claim that is filed in any fiscal year, certify and ensure, subject to paragraph 2 of this subsection, that there is an enforceable and verifiable agreement with a public agency, a recorded deed restriction or any other legal document that restricts the use of the property and requires that the rents do not exceed the terms that are prescribed by the financing or financial assistance terms.

2.

Certify that the monies that would have been necessary to pay the property taxes are used to maintain the affordability of or otherwise reduce the rents of the units that are occupied by eligible low-income households.

C.

For the purposes of this section, "eligible nonprofit corporation" means a corporation that is qualified pursuant to section 501(c)(3) or 501(c)(4) of the internal revenue code and for which one of its exempt purposes includes providing affordable housing.

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