House of Representatives

HB 2451

tax credit; school site donation

Sponsors: Representatives Marsh, Horne, Griffin, et al

 

DP

Committee on Ways and Means

DPA

Caucus and COW

 

DPA

As Passed the House

x

As Transmitted to Governor

 

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 for donations to a school district or charter school of school sites.  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.

·                      Provides that the land donation can not violate the buffer zone requirements for schools locating near agricultural land.  Provides that a school district or charter school may refuse the donation.

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

·                   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.

·                   Provides an effective date for taxable years beginning from and after December 31, 2000.

School District Provisions/Responsibilities in regards to the Donation

·                      The school district shall notify the School Facilities Board (Board) of any donation and shall furnish the Board with any information the board requests regarding the donation. 

·                      A school district shall not accept a donation unless the Board has reviewed the proposed donation and has issued a written determination that the property is suitable as a school site or as a school.  The Board will determine that any property that costs more money then the value of the donation to make suitable as a site as unsuitable and the school shall refuse the donation.

·                      The district may sell the property, but the proceeds from the sale shall only be used for capital projects.  The Board shall withhold an amount that corresponds to the amount of the proceeds from any monies that would otherwise be due to the district from the Board.

Charter School Provisions/Responsibilities in regards to the Donation

·                   Provides that a charter school must immediately notify their sponsor of any donations the charter school receives that would qualify for a tax credit under the provisions of this act. Provides that the charter school shall also provide the sponsor with any information requested by the sponsor regarding the donation including if the charter school fails to operate a school on the property.

·                   Provides that if a charter school does not establish a school or provide instruction on the property within 48 months, the charter school shall reimburse the state general fund for the amount of the allowable tax credit increased by the GDP price deflator for each year.

·                   Provides that if the charter school ceases to operate the charter school the property for 24 consecutive months, then the charter school shall reimburse the state general fund for the amount of the allowable tax credit increased by the GDP price deflator for each year.

·                   Provides that a tax credit constitutes a lien on the property.  The lien is the amount of the allowable credit adjusted by the GDP price deflator with a maximum of 12.5% over the allowable credit.

·                   Provides that the lien may extinguished if the following happen:

1)      After 10 years

2)      Upon payment by the charter school of the allowable credit and any penalties and interest that may have accrued.

3)      The charter school donates the property to a school district

4)      The state treasurer has foreclosed on the property.

 

·                   Changes the effective date from a retroactive date to a prospective date for taxable years beginning from and after December 31, 2000.

·                    

·                    

·                   ---------- DOCUMENT FOOTER ---------

·                   44th Legislature                                                                                     Analyst Initials _______

·                   Second Regular Session                                                                                      April 14, 2000

·                    

·                   ---------- DOCUMENT FOOTER ---------