SB1206 - 472R - House Bill Summary

House of Representatives

SB 1206

schools; maximum property tax rate

Sponsor: Senator Burns

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

SB 1206 establishes a maximum tax rate that school districts can impose on taxpayers and specifies notification requirements.

History

The Tax Reform for Arizona Citizens Committee (TRACC) was established in 2002 and issued final recommendations in December 2003. The TRACC was established to examine the current tax structure, with one of their duties being to study and make recommendations on the tax policies of this State and local jurisdictions, including counties, municipalities, school districts and special taxing districts and to assure that the policies are adequate, equitable, competitive and consistent with economic development strategies. One of the recommendations of this committee was a proposal to cap the primary property tax rate of any school district that has 50% or more of the homeowners at the 1% cap and the primary tax rate is 150% of the Qualifying Tax Rate (QTR) set by the Legislature.

A.R.S. Section 42-17151 requires the governing body of each county, city, town, community college district and school district to fix, levy and assess taxes on primary and secondary property. The amount collected, plus all other sources of revenue, must equal the total of amounts proposed to be spent in the budget for the current fiscal year. Additionally, these entities must designate the amounts to be levied for each purpose appearing in the adopted budget.

For FY 2005-06, the QTR was set by the Legislature at $3.618 for unified districts, $1.8090 for non-unified districts and $0.4358 for the county equalization rate.

Provisions

· Prohibits the governing board of a common school district, a high school district or a unified school district to fix, levy or assess a primary property tax rate that is higher than the current year’s rate if the district meets the following criteria:

· The total primary property taxes levied for all taxing jurisdictions results in at least 50% of the homeowners exceeding the 1% constitutional cap.

· The primary property tax rate exceeds 150% of the QTR.

· Requires the Property Tax Oversight Commission (PTOC), by December 31, to notify school districts that meet the maximum tax rate criteria. The PTOC must additionally notify the county school superintendent and the county board of supervisors.

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Forty-seventh Legislature