Assigned to FIN                                                                                                                              AS ENACTED

ARIZONA STATE SENATE

Fifty-Fifth Legislature, First Regular Session

ENACTED

FACT SHEET FOR S.B. 1012/H.B. 2432

community colleges; lease-purchase agreements; indebtedness

Purpose

            Increases, from 15 years to 20 years, the maximum obligation period for lease or lease-purchase agreements entered into by community college district boards (district boards). Bifurcates, by country population, the maximum amount of outstanding indebtedness. 

Background

            Statute requires district boards to make and take leases of real or personal property for the benefit of the community colleges under its jurisdiction (A.R.S. § 15-1444). Additionally, a district board may enter into lease or lease-purchase agreements for real property, including buildings and improvements to the property.

            A district board may not enter into lease or lease-purchase agreements that create an obligation of payment for periods longer than 15 years, except for real property lease agreements that: 1) are with an Indian tribe; 2) involve land owned or controlled by the federal government; 3) involve land owned or controlled by a joint powers airport authority; or 4) involve real property owned by a nongovernmental nonprofit corporation that is offered for lease in an annual amount not exceeding $1,000 to expand health care education programs. The maximum amount of outstanding indebtedness a community college district may incur in acquiring real property by lease-purchase is $2,500,000 in any one year and $15,000,000 in the aggregate (A.R.S. § 15-1446).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Extends, from 15 years to 20 years, the maximum obligation period for a lease or lease-purchase agreements that do not meet specified criteria entered into by a district board.

2. Modifies the amount of outstanding indebtedness a community college district may incur in acquiring real property by lease-purchase agreements to either:

a) $2,500,000 in any one year and $15,000,000 in the aggregate for a district located in a county with a population of fewer than 750,000 persons; or

b) $25,000,000 in any one year and $50,000,000 in the aggregate for a district located in a county with a population of 750,000 persons or more.

3. Makes technical and conforming changes.

4. Becomes effective on the general effective date.

Senate Action House Action

FIN                 1/13/21      DP     9-1-0                    WM                 2/10/21      DP     9-1-0-0          

3^rd Read          1/28/21                 28-1-1                  3^rd Read          2/22/21                 46-14-0         

                                                                                 (S.B. 1012 was substituted for H.B. 2432 on

                                                                                 3^rd Read)

Signed by the Governor 2/26/21

Chapter 38

Prepared by Senate Research

March 3, 2021

JO/JP/FDR/gs