|
|
ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: ED DP 6-4-2-0 |
HB 2384: school districts; lease agreements; requirements
Sponsor: Representative Gress, LD 4
House Engrossed
Overview
Modifies lease requirements for school district governing boards (governing boards). Requires a governing board to spend the proceeds from the lease of school property for the payment of bonded indebtedness or to reduce school district taxes. Modifies property tax exemptions for property and buildings leased from a school district.
History
Statute authorizes a governing board to:
1) enter into leases or lease-purchase agreements for school buildings or grounds, as lessor or lessee, for less than 20 years without voter approval, unless the lease is to construct school buildings, in which case voter approval is required;
2) enter into leases or lease-purchase agreements for school buildings or grounds, as lessor or lessee, for between 20 and 99 years with voter approval, though statute outlines specific conditions in which voter approval is not required;
3) enter into option agreements to purchase school sites;
4) lease school sites without voter approval if the buildings and sites are totally funded from specified sources; and
5) lease, or approve the superintendent or chief administrative officer to lease, school property to any person, group or organization for any lawful purpose (A.R.S. §§ 15-342, 15-491 and 15-1105).
A school district may expend the proceeds from the sale or lease of school property for the payment of any outstanding bonded indebtedness of the school district or to reduce school district taxes. Statute details the permissible uses of such monies based on a school district's percent of outstanding bonded indebtedness. However, the restrictions on the permissible uses of proceeds from the sale or lease of school property do not apply to proceeds from specified sources (A.R.S. § 15-1102).
Statute exempts the following properties from property taxes: 1) school buildings and other buildings that are used for education, including the land, if used for education and not used or held for profit; 2) property and buildings if leased from a school district pursuant to a lease or lease-purchase agreement that is for less than 20 years without voter approval or for between 20 and 99 years with voter approval; and 3) property used exclusively for affordable rental housing if prescribed criteria are met (A.R.S. §§ 42-11104 and 42-11133).
SFD must maintain a school facilities database that includes all buildings owned by school districts. School districts must annually report information required by SFD and the School Facilities Oversight Board to administer school capital funding (A.R.S. § 41-5702).
Provisions
Lease Agreements
1. Stipulates a governing board may enter into a lease or lease-purchase agreement as lessee only if the school buildings or grounds are located within the school district's boundaries. (Sec. 1, 2)
2. Requires a governing board to obtain voter approval for a lease that is for at least 10 years, rather than at least 20 years. (Sec. 1)
3. Specifies authorization by the school district electors in an election is not required if the lease or lease-purchase agreement is for not more than 10 years. (Sec. 1)
4. Caps the lease of school property by a governing board to specified governmental entities at not more than 10 years without voter approval or 99 years with voter approval. (Sec. 1)
5. Allows a governing board to enter into option agreements for the purchase of school sites only if the school sites are located within the school district's boundaries. (Sec. 1)
6. Prohibits a governing board from purchasing a school site or building that is located outside of the school district's boundaries. (Sec. 1, 2)
7. Requires a governing board to call a special election to reauthorize negotiations for a lease that is for at least 10 years but not more than 99 years if the governing board does not enter into the lease within 10 years, rather than 20 years, after the date of the election for the lease. (Sec. 2)
8. Limits the lease of school property by a governing board, or the superintendent or chief administrative officer with governing board approval, at not more than 10 years without voter approval or not more than 99 years with voter approval. (Sec. 4)
9. Requires, rather than allows, a governing board, or the superintendent or chief administrative officer with governing board approval, to spend the proceeds from the lease of school property for the:
a. payment of any outstanding bonded indebtedness of the school district; or
b. reduction of school district taxes. (Sec. 3)
10. Prohibits a governing board from leasing, or approving the lease of, school property to any person or for any person if the school district leased that property, in whole or in part, from another person. (Sec. 4)
11. Stipulates that property and buildings that are leased from a school district are:
a. eligible for a property tax exemption for educational and library property only if the property and buildings are used for education purposes; and
b. not eligible for the property tax exemption for affordable housing projects. (Sec. 4, 6, 7)
12. Applies the lease requirements to any lease executed, renewed or amended after the general effective date. (Sec. 8)
13. Specifies property, buildings and improvements, if leased from a school district pursuant to a lease or lease-purchase agreement as authorized by statute, are exempt from taxation if the:
a. buildings and improvements are constructed on land that is leased from a school district;
b. lease was executed by January 1, 2026; and
c. buildings and improvements become the property of the school district on termination of the lease. (Sec. 8)
Real Estate Holding Reporting
14. Requires, by October 1, 2026 and annually thereafter, each school district to report to SFD the following information about each real estate holding owned or leased by a school district during the immediately preceding school year:
a. the address and a description of the real estate holding as specified;
b. a description of the current use of each building that is part of the real estate holding;
c. whether the real estate holding is located outside the school district's boundaries;
d. the owner of the real estate holding; and
e. if the real estate holding is subject to a lease agreement:
i. the parties to the lease agreement;
ii. the terms of the lease;
iii. an estimate of the total amount of revenue that will be generated; and
iv. the total amount received or paid by the school district according to the lease agreement during the immediately preceding school year. (Sec. 5)
15. Directs SFD to compile the school district reports into a single report for the previous school year and submit the report to specified individuals by December 1, 2026, and annually thereafter. (Sec. 5)
16. Defines real estate holding. (Sec. 5)
Miscellaneous
17. Makes technical and conforming changes. (Sec. 1, 2, 3, 4, 6)
---------- DOCUMENT FOOTER ---------
Initials CH HB 2384
2/25/2026 Page 0 House Engrossed
---------- DOCUMENT FOOTER ---------