Rose Law Group Reporter
The Arizona House of Representatives approved 58-0 a bill adding some new reforms to property tax breaks that cities offer to developers and businesses.
House Bill 2126 ended up being a compromise measure between fiscal conservatives, real estate groups and cities over Government Property Lease Excise Taxes or GPLETs, reports Phoenix Business Journal.
GPLETs involve city governments owning land but leasing it to private developers and businesses who then pay lower property taxes than if they owned it outright.
Cities and real estate interests argue GPLETs are a key economic development tool especially since Arizona doesn’t have tax increment financing.
Critics counter GPLETs are unfair because they offer special and lower tax treatment to certain developers and businesses, but not those who own private property.
HB 2126 centers on GPLETs and downtown and redevelopment areas that cities can designate as qualifying for the areas where the property tax break can be used, The Journal reports.
Going forward cities can only designate 2.5 percent of their total land, or 960 acres, as a central business district. The bill does allow existing designations by Mesa and Tempe to be grandfathered.
