House of Representatives

HB 2451

tax credit; school site donation

Sponsors: Representatives Marsh, Horne, Griffin, et al

DP	Committee on Ways and Means
	Caucus and COW
	As Passed the House

HB 2451 allows a personal or corporate income tax credit for any real property and improvements that are donated to a school district or charter school for use as a school or as a site for the construction of a new school.

History

The Students FIRST program provides guidelines to school districts for the purchasing of land as sites for the construction of new schools. Current law requires the School Facilities Board to distribute monies to school districts from the New School Facilities Fund for the purchase of land for new school construction. The purchase price must be lower than or equal to the fair market value of the land. If a site is donated, the School Facilities Board will distribute an amount equal to 20 per cent of the fair market value of the land, which the school district must place in the Unrestricted Capital Outlay Fund.

HB 2451 provides a personal or corporate income tax credit equal to 30 per cent of the appraised value of the donated property and improvements.

Provisions

· Allows a personal or corporate income tax credit in the amount of 30 per cent of the appraised value of the donated property and improvement beginning after December 31, 1998. The credit is in lieu of any tax deduction.

· Requires the donated property to be in Arizona and to be conveyed to the donee unencumbered and in fee simple.

· Specifies that the donated property must be used as a school, or as a site for the construction of a new school.

· States that in the event of a charter school’s financial failure, the charter school shall reimburse the state general fund for the amount of the tax credit increased by an inflation factor.

· Provides that the land donation can not violate the buffer zone requirements for schools locating near agricultural land.

· Provides that the value of the donated land is the property’s fair market value determined by an appraisal paid for by the donee.

· Allows the donee to:

1. Refuse the donation

2. Sell the property. School districts must use the proceeds from the sale for capital projects only. Charter schools must reimburse the state general fund for any credit amount if the charter school sells any donated property to a buyer other than a school district or other charter school.

· Provides that a school district must notify the School Facilities Board of any property donations.

· Limits the total tax credit allowed for property donated by co-owners to the amount that would have been allowed a sole donor and allows a carry forward of up to five years.

· Contains a retroactive date of December 31, 1998.

Ways and Means Committee Action – No amendments

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44th Legislature Analyst Initials _______

Second Regular Session January 27, 2000

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