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Scroll down to read the new section which is in capitals.  The strike through of the old language is required by AZ law.

 

 

Prop 13 Arizona

OFFICIAL TITLE

AN INITIATIVE MEASURE

PROPOSING AN AMENDMENT TO THE CONSTITUTION OF ARIZONA; REPEALING ARTICLE IX, SECTION 18 AND SECTION 19, CONSTITUTION OF ARIZONA; AMENDING ARTICLE IX, CONSTITUTION OF ARIZONA BY ADDING A NEW SECTION 18; RELATING TO PROPERTY TAXATION

Be it enacted by the People of the State of Arizona:

Section 1. Title

This measure shall be known as Prop 13 Arizona.

Section 2. Intent

The intent of Prop 13 Arizona is to enact property tax reform in Arizona by amending Article IX, Constitution of

Arizona, repealing the existing Sections 18 and 19 and adding a new Section 18. Upon approval of the voters,

Article IX, Sections 18 and Section 19, Constitution of Arizona are repealed and Article IX is amended by

adding a new Section 18 as follows.

Section 3. Amendment of Article IX, Constitution of Arizona through the repeal of existing Section 18 and Section 19 and

addition of a new Section 18.

18.¦¦Residential ad valorem tax limits; limit on increase in values; definitions

Section 18. (1) The maximum amount of ad valorem taxes that may be collected from residential property in any tax year shall not exceed one per cent of the property's full cash value as limited by this section.

(2) The limitation provided in subsection (1) does not apply to:

(a) Ad valorem taxes or special assessments levied to pay the principal of and interest and redemption charges on bonded indebtedness or other lawful long-term obligations issued or incurred for a specific purpose.

(b) Ad valorem taxes or assessments levied by or for property improvement assessment districts, improvement districts and other special purpose districts other than counties, cities, towns, school districts and community college districts.

(c) Ad valorem taxes levied pursuant to an election to exceed a budget, expenditure or tax limitation.

(3) Except as otherwise provided by subsections (5), (6) and (7) of this section the value of real property and improvements and the value of mobile homes used for all ad valorem taxes except those specified in subsection (2) shall be the lesser of the full cash value of the property or an amount ten per cent greater than the value of property determined pursuant to this subsection for the prior year or an amount equal to the value of property determined pursuant to this subsection for the prior year plus one-fourth of the difference between such value and the full cash value of the property for current tax year, whichever is greater.

(4) The legislature shall by law provide a method of determining the value, subject to the provisions of subsection (3), of new property.

(5) The limitation on increases in the value of property prescribed in subsection (3) does not apply to equalization orders that the legislature specifically exempts by law from such limitation.

(6) Subsection (3) does not apply to:

(a) Property used in the business of patented or unpatented producing mines and the mills and the smelters operated in connection with the mines.

(b) Producing oil, gas and geothermal interests.

(c) Real property, improvements thereto and personal property used thereon used in the operation of telephone, telegraph, gas, water and electric utility companies.

(d) Aircraft that is regularly scheduled and operated by an airline company for the primary purpose of carrying persons or property for hire in interstate, intrastate or international transportation.

(e) Standing timber.

(f) Property used in the operation of pipelines.

(g) Personal property regardless of use except mobile homes.

(7) A resident of this state who is sixty-five years of age or older may apply to the county assessor for a property valuation protection option on the person's primary residence, including not more than ten acres of undeveloped appurtenant land. To be eligible for the property valuation protection option, the resident shall make application and furnish documentation required by the assessor on or before September 1. If the resident fails to file the application on or before September 1, the assessor shall process the application for the subsequent year. If the resident files an application with the assessor on or before September 1, the assessor shall notify the resident whether the application is accepted or denied on or before December 1. The resident may apply for a property valuation protection option after residing in the primary residence for two years. If one person owns the property, the person's total income from all sources including nontaxable income shall not exceed four hundred per cent of the supplemental security income benefit rate established by section 1611(b)(1) of the social security act. If the property is owned by two or more persons, including a husband and wife, at least one of the owners must be sixty-five years of age or older and the owners' combined total income from all sources including nontaxable income shall not exceed five hundred per cent of the supplemental security income benefit rate established by section 1611(b)(1) of the social security act. The assessor shall review the owner's income qualifications on a triennial basis and shall use the owner's average total income during the previous three years for the review. If the county assessor approves a property valuation protection option, the value of the primary residence shall remain fixed at the full cash value in effect during the year the property valuation protection option is filed and as long as the owner remains eligible. To remain eligible, the county assessor shall require a qualifying resident to reapply for the property valuation protection option every three years and shall send a notice of reapplication to qualifying residents six months before the three year reapplication requirement. If title to the property is conveyed to any person who does not qualify for the property valuation protection option, the property valuation protection option terminates, and the property shall revert to its current full cash value.

(8) The legislature shall provide by law a system of property taxation consistent with the provisions of this section.

(9) For purposes of this section:

(a) "Owner" means the owner of record of the property and includes a person who owns the majority beneficial interest of a living trust.

(b) "Primary residence" means all owner occupied real property and improvements to that real property in this state that is a single family home, condominium, townhouse or an owner occupied mobile home and that is used for residential purposes.

19. Limitation on annual increases in local ad valorem tax levies; exceptions

Section 19. (1) The maximum amount of ad valorem taxes levied by any county, city, town or community college district shall not exceed an amount two per cent greater than the amount levied in the preceding year.

(2) The limitation prescribed by subsection (1) does not apply to:

(a) Ad valorem taxes or special assessments levied to pay the principal of and the interest and redemption charges on bonded indebtedness or other lawful long-term obligations issued or incurred for a specific purpose.

(b) Ad valorem taxes or assessments levied by or for property improvement assessment districts, improvement districts and other special purpose districts other than counties, cities, towns and community college districts.

(c) Ad valorem taxes levied by counties for support of school districts.

(3) This section applies to all tax years beginning after December 31, 1981.

(4) The limitation prescribed by subsection (1) shall be increased each year to the maximum permissible limit, whether or not the political subdivision actually levies ad valorem taxes to such amounts, except that beginning in 2007 the limitation prescribed by subsection (1) shall be computed from the actual tax levy of the county, city, town or community college district in 2005.

(5) The voters, in the manner prescribed by law, may elect to allow ad valorem taxation in excess of the limitation prescribed by this section.

(6) The limitation prescribed by subsection (1) of this section shall be increased by the amount of ad valorem taxes levied against property not subject to taxation in the prior year and shall be decreased by the amount of ad valorem taxes levied against property subject to taxation in the prior year and not subject to taxation in the current year. Such amounts of ad valorem taxes shall be computed using the rate applied to property not subject to this subsection.

(7) The legislature shall provide by law for the implementation of this section.

18. Property tax limits; limit on increase in values; definitions

SECTION 18.

A. THE MAXIMUM AMOUNT, INCLUSIVE OF ALL AD VALOREM AND NON-AD VALOREM TAXES FROM ANY SOURCE, THAT MAY BE COLLECTED FROM RESIDENTIAL PROPERTY IN ANY TAX YEAR SHALL NOT EXCEED ONE-HALF OF ONE PER CENT (0.5%) OF THE PROPERTY'S BASELINE VALUE AS DETERMINED PURSUANT TO THIS SECTION.

B. THE MAXIMUM AMOUNT, INCLUSIVE OF ALL AD VALOREM AND NON-AD VALOREM TAXES FROM ANY SOURCE, THAT MAY BE COLLECTED FROM ALL OTHER REAL PROPERTY IN ANY TAX YEAR SHALL NOT EXCEED ONE PER CENT (1.0%) OF THE PROPERTY'S BASELINE VALUE AS DETERMINED PURSUANT TO THIS SECTION.

C. BEGINNING ON JANUARY 1, 2011, A PROPERTY’S BASELINE VALUE SHALL BE DETERMINED AS FOLLOWS:

1. FOR REAL PROPERTY PURCHASED PRIOR TO JANUARY 1, 2004, THE "FULL CASH VALUE" SHOWN ON THE 2003 TAX BILL FROM THE COUNTY ASSESSOR SHALL BE THE BASELINE VALUE.

2. FOR REAL PROPERTY PURCHASED ON OR AFTER JANUARY 1, 2004, THE APPRAISED VALUE OF REAL PROPERTY WHEN PURCHASED, NEWLY CONSTRUCTED, OR A CHANGE IN OWNERSHIP HAS OCCURRED SHALL BE THE BASELINE VALUE.

D. THE BASELINE VALUE MAY REFLECT FROM YEAR TO YEAR THE INFLATIONARY RATE NOT TO EXCEED TWO PERCENT (2%) FOR ANY GIVEN YEAR OR REDUCTION AS SHOWN IN THE CONSUMER PRICE INDEX OR COMPARABLE DATA FOR THE AREA UNDER TAXING JURISDICTION.

E. A RESIDENT OF THIS STATE WHO IS SIXTY-FIVE YEARS OF AGE OR OLDER MAY APPLY TO THE COUNTY ASSESSOR FOR A PROPERTY VALUATION PROTECTION OPTION ON THE PERSON’S PRIMARY RESIDENCE, INCLUDING NOT MORE THAN TEN ACRES OF UNDEVELOPED APPURTENANT LAND. TO BE ELIGIBLE FOR THE PROPERTY VALUATION PROTECTION OPTION, THE RESIDENT SHALL MAKE APPLICATION AND FURNISH DOCUMENTATION REQUIRED BY THE ASSESSOR ON OR BEFORE SEPTEMBER 1. IF THE RESIDENT FAILS TO FILE THE APPLICATION ON OR BEFORE SEPTEMBER 1, THE ASSESSOR SHALL PROCESS THE APPLICATION FOR THE SUBSEQUENT YEAR. IF THE RESIDENT FILES AN APPLICATION WITH THE ASSESSOR ON OR BEFORE SEPTEMBER 1, THE ASSESSOR SHALL NOTIFY THE RESIDENT WHETHER THE APPLICATION IS ACCEPTED OR DENIED ON OR BEFORE DECEMBER 1. THE RESIDENT MAY APPLY FOR A PROPERTY VALUATION PROTECTION OPTION AFTER RESIDING IN THE PRIMARY RESIDENCE FOR TWO YEARS. IF ONE PERSON OWNS THE PROPERTY, THE PERSON’S TOTAL INCOME FROM ALL SOURCES INCLUDING NONTAXABLE INCOME SHALL NOT EXCEED FOUR HUNDRED PER CENT OF THE SUPPLEMENTAL SECURITY INCOME BENEFIT RATE ESTABLISHED BY SECTION 1611(B)(1) OF THE SOCIAL SECURITY ACT. IF THE PROPERTY IS OWNED BY TWO OR MORE PERSONS, INCLUDING A HUSBAND AND WIFE, AT LEAST ONE OF THE OWNERS MUST BE SIXTY-FIVE YEARS OF AGE OR OLDER AND THE OWNERS’ COMBINED TOTAL INCOME FROM ALL SOURCES INCLUDING NONTAXABLE INCOME SHALL NOT EXCEED FIVE HUNDRED PER CENT OF THE SUPPLEMENTAL SECURITY INCOME BENEFIT RATE ESTABLISHED BY SECTION 1611(B) (1) OF THE SOCIAL SECURITY ACT. THE ASSESSOR SHALL REVIEW THE OWNER’S INCOME QUALIFICATIONS ON A TRIENNIAL BASIS AND SHALL USE THE OWNER’S AVERAGE TOTAL INCOME DURING THE PREVIOUS THREE YEARS FOR THE REVIEW. IF THE COUNTY ASSESSOR APPROVES A PROPERTY VALUATION PROTECTION OPTION, THE VALUE OF THE PRIMARY RESIDENCE SHALL REMAIN FIXED AT THE BASELINE VALUE IN EFFECT DURING THE YEAR THE PROPERTY VALUATION PROTECTION OPTION IS FILED AND AS LONG AS THE OWNER REMAINS ELIGIBLE. TO REMAIN ELIGIBLE, THE COUNTY ASSESSOR SHALL REQUIRE A QUALIFYING RESIDENT TO REAPPLY FOR THE PROPERTY VALUATION PROTECTION OPTION EVERY THREE YEARS AND SHALL SEND A NOTICE OF REAPPLICATION TO QUALIFYING RESIDENTS SIX MONTHS BEFORE THE THREE YEAR REAPPLICATION REQUIREMENT. IF TITLE TO THE PROPERTY IS CONVEYED TO ANY PERSON WHO DOES NOT QUALIFY FOR THE PROPERTY VALUATION PROTECTION OPTION, THE PROPERTY VALUATION PROTECTION OPTION TERMINATES, AND THE PROPERTY SHALL REVERT TO ITS BASELINE VALUE DETERMINED PURSUANT TO THIS SECTION.

G. THE LEGISLATURE SHALL PROVIDE BY LAW A SYSTEM OF PROPERTY TAXATION CONSISENT WITH THIS SECTION.

I. FOR THE PURPOSES OF THIS SECTION:

1. "OWNER" MEANS THE OWNER OF RECORD OF THE PROPERTY AND INCLUDES A PERSON WHO OWNS THE MAJORITY BENEFICIAL INTEREST OF A LIVING TRUST.

2. "RESIDENTIAL REAL PROPERTY" INCLUDES ALL OWNER OCCUPIED RESIDENTIAL REAL PROPERTY AND IMPROVEMENTS, ALL MOBILE HOMES USED FOR RESIDENTIAL PURPOSES AND ALL REAL PROPERTY AND IMPROVEMENTS USED AS LEASED OR RENTED PROPERTY PRIMARILY FOR RESIDENTIAL PURPOSES.

J. THIS SECTION SHALL BE SELF-EXECUTING AND EFFECTIVE ON JANUARY 1, 2011.

K. IF ANY PORTION OF THIS SECTION IS HELD INVALID FOR ANY REASON, THE REMAINING PORTIONS OF THIS SECTION SHALL NOT BE AFFECTED BUT WILL REMAIN IN FULL FORCE AND EFFECT.

Section 4. The Secretary of State shall submit this proposition to the voters at the next general election as provided by Article XXI, Constitution of Arizona.