ARIZONA STATE SENATE
Phoenix, Arizona
Establishes a property tax
exemption for eligible veterans conditional upon voters amending the Arizona Constitution.
The Arizona Constitution
currently provides for a tiered property tax exemption for eligible veterans
who meet very specific residency requirements.
The Constitution also allows for the Legislature to increase exemption
amounts periodically. However, there is
currently no corresponding provision in statute to allow the Legislature to
modify the exemptions. Further, the
courts have declared that the current residency requirements violate the U.S.
Constitution.
To resolve these concerns,
S.B. 1094 is being offered in conjunction with S.C.R. 1003. S.C.R. 1003 proposes amending the Arizona
Constitution to remove the tiered exemption structure, increase the total
exemption and reduce residency requirements to one year for all veterans. S.B. 1094 establishes the exemptions in
statute, and its effectiveness is contingent on voters approving S.C.R. 1003.
Joint Legislative Budget
Committee staff estimate that S.B. 1094 will have an annual impact on the state
general fund ranging between $3 million and $6.2 million in FY 2004-2005. Most of the estimated impact is attributable
to an increase in basic state aid to schools, which would need to increase to
offset expected decreases in local property tax bases.
1. Includes veterans among those individuals who are not allowed to receive aggregate property tax exemptions that exceed maximum allowances.
2. Allows qualifying veterans, beginning with the 2003 valuation year, to receive a property tax exemption of up to $3,000 if the veteran’s total assessment is less than $10,000.
3. Specifies that the $10,000 total property tax assessment limit does not include any vehicle for which the state’s vehicle license tax has been paid.
4. Provides for the $3,000 exemption to apply independently to valuations determined for both primary and secondary property tax, and allows any unused portion of the exemption to apply to motor vehicle or watercraft taxes.
5. Specifies that this act does not become effective unless the voters approve a corresponding constitutional amendment at the next general election.
Prepared by Senate Staff
January 22, 2002