Assigned to FIN                                                                                                                FOR  COMMITTEE

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FACT SHEET FOR S.B. 1124

 

tax exemption; public housing

 

Purpose

 

Broadens the property tax exemptions for low income housing owned and operated by public housing authorities and nonprofit organizations.

 

Background

 

Currently, low income housing owned by a public housing authority is exempt from property tax. However, when a public housing authority partners with a private entity, that property shifts to Class 6 and is assessed at ten percent of its value. S.B. 1124 allows mixed finance public housing properties to be classified under the Class 9 property classification, which is not assessed any tax..                                                                                                           

 

Currently, a property that is used for nonprofit purposes and is owned by a community service organization serving a population that includes afflicted and indigent individuals is exempt from taxation. S.B. 1124 extends this exemption to single member limited liability companies that qualify under Internal Revenue Service (IRS) Code 501(c)(3).

 

            Currently, property owned by a nonprofit charitable organization is exempt from taxation if the property is used to help the indigent.  However, counties tax such properties inconsistently because the current definition of indigent can be interpreted differently.  S.B. 1124 provides a definition for indigent that conforms with a definition used and applied by Arizona Department of Commerce programs.

 

Provisions

 

1.      Includes, under the Class 9 property classification, public housing properties operated by a public-private partnership.

 

2.      Exempts the property of a single member limited liability company that qualifies as a charitable organization under IRS Code 501(c)(3) from taxation if:

 

a.  the company’s mission is to serve an indigent or afflicted population; and

b. the company is primarily engaged in delivering services on the property to such a  population.

 

3.      Includes, in the definition of “indigent,” people who earn 60 percent or less of an area’s median gross income, adjusted for family size.

 

4.      Makes a technical change.

5.      Provides for a general effective date. 

 

 

Prepared by Senate Staff

January 25, 2001