House of Representatives

SCR1025

property tax assessed valuation; limitation

Sponsors: Senators Yarbrough: McComish, Reagan

 

DP

Committee on Ways and Means
DP

Caucus and COW
X

As Transmitted to the Secretary of State

Overview

SCR 1025 proposes a constitutional amendment, subject to voter approval, to limit the annual growth in the limited property value of locally assessed properties, beginning in Tax Year (TY) 2015.

History

Arizona has two distinct types of property taxes, primary and secondary, and two different property values, the primary or limited property value (LPV) and the secondary or full cash value (FCV). 

The Arizona Constitution limits the amount LPV may increase each year to the greater of either 10 percent of the previous year’s LPV or 25 percent of the difference between the current year’s FCV and the previous year’s LPV, with the stipulation that LPV can never exceed the FCV. 

Primary property taxes are levied by counties, municipalities, community colleges, and school districts to pay for the maintenance and operation of the respective jurisdiction.  Additionally, the Arizona Constitution limits the growth in the total amount of primary property taxes that can be levied to 2 percent annually, plus new construction.  Owner-occupied residential property is further protected by a provision in the Arizona Constitution that prohibits the combined primary tax collected by all jurisdictions on such property from exceeding 1 percent of the property’s FCV.

Unlike LPV, there is no limit placed on the amount FCV may increase each year since it fluctuates with the market.  Secondary property taxes are levied to pay for voter-approved bonded indebtedness, voter-approved budget overrides, and special districts.  Most special districts do not have limitations on the growth in the total amount of secondary property taxes they can levy annually; however some districts do have maximum tax rates they are prohibited from exceeding. 

Provisions

·          Limits the annual growth of LPV to the lesser of FCV or an amount 5 percent greater than the property’s prior year value, beginning in TY 2015.

·          Makes technical corrections.

·          Directs the Arizona Secretary of State to submit the proposition to the voters at the next general election.

 

 

 

 

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Fiftieth Legislature

Second Regular Session          2          March 2, 2012

 

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