Assigned to CED & FIN                                                                                                                  FOR COMMITTEE

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FACT SHEET FOR H.B. 2702

Rio Nuevo; shared revenue

Purpose

            Extends the diversion of state transaction privilege tax revenues to the Rio Nuevo Multipurpose Facilities District for an additional 30 years.

Background

            Laws 1990, Chapter 390 authorized Maricopa County to form a county stadium district and impose a transaction privilege tax (TPT) upon the award of a Major League Baseball franchise within the district. Laws 1991, Chapter 285 expanded the authorization to form county stadium districts to any county in which a Major League Baseball organization establishes or seeks to establish a spring training operation. Finally, Laws 1997, Chapter 297 further expanded the county stadium district concept to multipurpose facilities defined as facilities located in the district designed to accommodate sporting and entertainment, cultural, civic, meeting or convention events. This legislation also expanded the ability to form a district between two or more municipalities located within a county and authorized the diversion of 50 percent of state TPT collections generated at the multipurpose facility site or in the construction of the facility that costs at least $200 million for a ten-year period.

            Laws 1999, Chapter 172 limited the formation of the expanded county stadium districts for multipurpose facilities and required that in order for a district to qualify to receive state TPT revenues, the municipality in which the multipurpose facility is located pay an equal match by the end of the ten-year period.  Laws 1999, Chapter 162 increased the payment of TPT revenue to stadium districts by allowing the diversion of taxes from businesses adjacent to a multipurpose facility site.  TPT payments are limited to net new revenues compared to revenues received prior to the year of the election authorizing the district.  The Rio Nuevo Multipurpose Facilities District (District), located in the City of Tucson, meets the qualifications of the expanded county stadium district. The District is a downtown redevelopment project, which includes the Tucson Convention Center and proposes new hotels, residential housing, shops and parking.

            According to the City of Tucson, an estimated $32.9 million has been contributed to meet the local match requirement and approximately $17.1 million in state TPT revenues has been distributed to the District.

Provisions

1. Extends the diversion of 50 percent of state TPT revenues generated at the multipurpose facility site or in the construction of the facility to the county stadium district, from 10 years to 40 years.

2. Allows monies from any governmental entity to be included in the local match requirement.

3. Allows the district to use TPT revenues for the construction, operation, maintenance and repair of roads within and adjacent to the district to serve any incidental and necessary project in the district.

4. Changes the reporting requirements to allow either the district board of directors or a city or town that is part of the district to provide the Department of Revenue with requested information.

5. Makes technical and conforming changes.

6. Becomes effective on the general effective date.

House Action

WM                 2/6/06      DP     7-2-0-0

3^rd Read           2/21/06              35-18-7-0

Prepared by Senate Research

March 20, 2006

SL/jas