Arizona 2023 Regular Session

Arizona House Bill HB2683 Compare Versions

Only one version of the bill is available at this time.

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1	1	REFERENCE TITLE: real estate transfer tax State of Arizona House of Representatives Fifty-sixth Legislature First Regular Session 2023 HB 2683 Introduced by Representatives De Los Santos: Aguilar, Austin, Gutierrez, Hernandez L, Ortiz, Salman, Stahl Hamilton, Sun, Travers, Senator Mendez An Act amending section 11-1132, Arizona Revised Statutes; amending title 11, chapter 8, article 2, Arizona Revised Statutes, by adding section 11-1132.01; amending sections 11-1134, 11-1136, 11-1137 and 41-3955, Arizona Revised Statutes; relating to real estate transfers. (TEXT OF BILL BEGINS ON NEXT PAGE)
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9	9	REFERENCE TITLE: real estate transfer tax
10	10	State of Arizona House of Representatives Fifty-sixth Legislature First Regular Session 2023
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12	12	Introduced by Representatives De Los Santos: Aguilar, Austin, Gutierrez, Hernandez L, Ortiz, Salman, Stahl Hamilton, Sun, Travers, Senator Mendez
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14	14	REFERENCE TITLE: real estate transfer tax
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46	46	Representatives De Los Santos: Aguilar, Austin, Gutierrez, Hernandez L, Ortiz, Salman, Stahl Hamilton, Sun, Travers, Senator Mendez
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64	64	An Act
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68	68	amending section 11-1132, Arizona Revised Statutes; amending title 11, chapter 8, article 2, Arizona Revised Statutes, by adding section 11-1132.01; amending sections 11-1134, 11-1136, 11-1137 and 41-3955, Arizona Revised Statutes; relating to real estate transfers.
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78	78	Be it enacted by the Legislature of the State of Arizona: Section 1. Heading change The article heading of title 11, chapter 8, article 2, Arizona Revised Statutes, is changed from "REAL ESTATE TRANSFER AFFIDAVIT AND FEE" to "REAL ESTATE TRANSFERS, FEES AND TAXES". Sec. 2. Section 11-1132, Arizona Revised Statutes, is amended to read: START_STATUTE11-1132. Real estate transfer fee; collection; disposition of proceeds A. Before recording a deed or contract relating to the sale or transfer of real property, the county recorder shall collect: 1. A real estate transfer fee of two dollars $2 for the deed or contract. 2. If applicable, the real estate transfer tax collected pursuant to section 11-1132.01. B. The real estate transfer fee prescribed in subsection A, paragraph 1 of this section is included in the amount charged pursuant to section 11-475, subsection A. C. The county shall retain all monies collected pursuant to Subsection A, paragraph 1 of this section in the same manner as monies collected under section 11-475. D. The county recorder shall transfer the monies collected pursuant to subsection A, paragraph 2 of this section to the state treasurer for deposit in the housing trust fund established by section 41-3955.END_STATUTE Sec. 3. Title 11, chapter 8, article 2, Arizona Revised Statutes, is amended by adding section 11-1132.01, to read: START_STATUTE11-1132.01. Real estate transfer tax; definition A. There is tax levied and the county recorder shall collect a real estate transfer tax on the transfer of title to residential real property in the county to an institutional investor. B. The tax is levied at a rate of one hundred percent of the value of the property determined for the purposes of this article. C. The tax is in addition to the recording fee collected pursuant to section 11-475 and the real estate transfer fee collected pursuant to section 11-1132. D. The tax applies only to the transfer of title to residential real property classified as class three or four for the purposes of property tax pursuant to section 42-12003 or 42-12004 to an institutional investor. E. The tax shall be paid to and collected by the county recorder at the same time and in the same manner as the real estate transfer fee collected pursuant to section 11-1132, and county recorder shall transfer monies collected to the state treasurer pursuant to section 11-1132, subsection D. F. For the purposes of this section, "institutional investor" means any entity or person whose aggregate fair market value of all assets, minus the entity's or person's aggregate debt, exceeds $25,000,000 at any time during any taxable year in the past twenty-five years. END_STATUTE Sec. 4. Section 11-1134, Arizona Revised Statutes, is amended to read: START_STATUTE11-1134. Exemptions A. The affidavit, and real estate transfer fee and real estate transfer tax required by this article do not apply to the following instruments: 1. A deed that represents the payment in full or forfeiture of a recorded contract for the sale of real property. 2. A lease or easement on real property, regardless of the length of the term. 3. A deed, patent or contract for the sale or transfer of real property in which an agency or representative of the United States, this state, a county, city or town of this state or any political subdivision of this state is the named grantor, and authorized seller, or purchaser. 4. A quitclaim deed to quiet title as described in section 12-1103, subsection B or otherwise executed for no monetary consideration. 5. A conveyance of real property that is executed pursuant to a court order. 6. A deed to an unpatented mining claim. 7. A deed of gift. B. The affidavit, and real estate transfer fee and real estate transfer tax required by this article do not apply to a transfer of title: 1. Solely in order to provide or release security for a debt or obligation, including a trustee's deed pursuant to power of sale under a deed of trust. 2. That confirms or corrects a deed that was previously recorded. 3. When the transfer of title has only nominal actual consideration for the transfer of residential property between: (a) Husband and wife or ancestor of the husband and wife. (b) Parent and child, including natural or adopted children and their descendants. (c) Grandparent and grandchild. (d) Natural or adopted siblings. 4. On a sale for delinquent taxes or assessments. 5. On partition. 6. Pursuant to a merger. 7. For no consideration or nominal consideration: (a) By a subsidiary to its parent or from a parent to a subsidiary. (b) Among commonly controlled entities. (c) From a member to its limited liability company or from a limited liability company to a member. (d) From a partner to its partnership. (e) From a partnership to a partner. (f) From a joint venturer to its joint venture. (g) From a joint venture to a joint venturer. (h) From a trust beneficiary to its trustee. (i) From a trustee to its trust beneficiary. (j) From any of the entities in subdivisions (a) through (i) of this paragraph to a single purpose entity in order to obtain financing. 8. From a person to a trustee or from a trustee to a trust beneficiary with only nominal actual consideration for the transfer. 9. To and from an intermediary for the purpose of creating a joint tenancy estate or some other form of ownership. 10. From a husband and wife or one of them to both husband and wife to create an estate in community property with right of survivorship. 11. From two or more persons to themselves to create an estate in joint tenancy with right of survivorship. 12. Pursuant to a beneficiary deed with only nominal actual consideration for the transfer. 13. From an owner to itself or a related entity for no or nominal consideration solely for the purpose of consolidating or splitting parcels. 14. Due to a legal name change. C. Any instrument that describes a transaction that is exempt under this section shall note the exemption on the face of the instrument at the time of recording, indicating the specific exemption that is claimed. END_STATUTE Sec. 5. Section 11-1136, Arizona Revised Statutes, is amended to read: START_STATUTE11-1136. Administrative and enforcement powers of department A. The department may prescribe rules that are reasonably necessary to facilitate and expedite the imposition, collection and administration of the real estate transfer fee imposed and real estate transfer tax levied pursuant to this article. B. The department or its authorized agents may: 1. Examine books, papers, records or other data bearing on the correctness of any affidavit that is filed or the real estate transfer fee and real estate transfer tax that is are collected pursuant to this article. 2. Require the attendance of any person and administer oaths and take testimony with respect to these matters. END_STATUTE Sec. 6. Section 11-1137, Arizona Revised Statutes, is amended to read: START_STATUTE11-1137. Violations; classification A. A county recorder or employee of the recorder who knowingly records any deed or contract for which a real estate transfer fee and real estate transfer tax is charged by this article without collecting the additional fee and tax is guilty of a class 2 misdemeanor. B. Any person who knowingly fails to provide or knowingly falsifies the information that is required by this article on the affidavit of legal value is guilty of a class 2 misdemeanor. END_STATUTE Sec. 7. Section 41-3955, Arizona Revised Statutes, is amended to read: START_STATUTE41-3955. Housing trust fund; purpose; annual report A. The housing trust fund is established, and the director shall administer the fund. The fund consists of monies from the real estate transfer tax deposited pursuant to section 11-1132, monies from unclaimed property deposited in the fund pursuant to section 44-313, monies transferred pursuant to section 35-751 and investment earnings. B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. C. Except as provided in subsection D of this section, fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44-313, subsection A, A portion of fund monies shall be used exclusively for housing in rural areas. D. Fund monies may be spent on constructing or renovating facilities and on housing assistance, including support services, for persons who have been determined to be seriously mentally ill and to be chronically resistant to treatment. E. For the purposes of subsection C of this section, in approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low-income families and that provide housing and shelter to families that have children. F. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall also include the number of individuals who benefit from housing assistance pursuant to subsection D of this section. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, not later than September 1 of each year. G. Monies in the housing trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. H. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund. I. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations. END_STATUTE Sec. 8. Requirements for enactment; two-thirds vote Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.
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80	80	Be it enacted by the Legislature of the State of Arizona:
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82	82	Section 1. Heading change
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84	84	The article heading of title 11, chapter 8, article 2, Arizona Revised Statutes, is changed from "REAL ESTATE TRANSFER AFFIDAVIT AND FEE" to "REAL ESTATE TRANSFERS, FEES AND TAXES".
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86	86	Sec. 2. Section 11-1132, Arizona Revised Statutes, is amended to read:
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88	88	START_STATUTE11-1132. Real estate transfer fee; collection; disposition of proceeds
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90	90	A. Before recording a deed or contract relating to the sale or transfer of real property, the county recorder shall collect:
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92	92	1. A real estate transfer fee of two dollars $2 for the deed or contract.
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94	94	2. If applicable, the real estate transfer tax collected pursuant to section 11-1132.01.
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96	96	B. The real estate transfer fee prescribed in subsection A, paragraph 1 of this section is included in the amount charged pursuant to section 11-475, subsection A.
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98	98	C. The county shall retain all monies collected pursuant to Subsection A, paragraph 1 of this section in the same manner as monies collected under section 11-475.
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100	100	D. The county recorder shall transfer the monies collected pursuant to subsection A, paragraph 2 of this section to the state treasurer for deposit in the housing trust fund established by section 41-3955.END_STATUTE
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102	102	Sec. 3. Title 11, chapter 8, article 2, Arizona Revised Statutes, is amended by adding section 11-1132.01, to read:
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104	104	START_STATUTE11-1132.01. Real estate transfer tax; definition
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106	106	A. There is tax levied and the county recorder shall collect a real estate transfer tax on the transfer of title to residential real property in the county to an institutional investor.
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108	108	B. The tax is levied at a rate of one hundred percent of the value of the property determined for the purposes of this article.
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110	110	C. The tax is in addition to the recording fee collected pursuant to section 11-475 and the real estate transfer fee collected pursuant to section 11-1132.
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112	112	D. The tax applies only to the transfer of title to residential real property classified as class three or four for the purposes of property tax pursuant to section 42-12003 or 42-12004 to an institutional investor.
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114	114	E. The tax shall be paid to and collected by the county recorder at the same time and in the same manner as the real estate transfer fee collected pursuant to section 11-1132, and county recorder shall transfer monies collected to the state treasurer pursuant to section 11-1132, subsection D.
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116	116	F. For the purposes of this section, "institutional investor" means any entity or person whose aggregate fair market value of all assets, minus the entity's or person's aggregate debt, exceeds $25,000,000 at any time during any taxable year in the past twenty-five years. END_STATUTE
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118	118	Sec. 4. Section 11-1134, Arizona Revised Statutes, is amended to read:
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120	120	START_STATUTE11-1134. Exemptions
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122	122	A. The affidavit, and real estate transfer fee and real estate transfer tax required by this article do not apply to the following instruments:
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124	124	1. A deed that represents the payment in full or forfeiture of a recorded contract for the sale of real property.
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126	126	2. A lease or easement on real property, regardless of the length of the term.
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128	128	3. A deed, patent or contract for the sale or transfer of real property in which an agency or representative of the United States, this state, a county, city or town of this state or any political subdivision of this state is the named grantor, and authorized seller, or purchaser.
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130	130	4. A quitclaim deed to quiet title as described in section 12-1103, subsection B or otherwise executed for no monetary consideration.
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132	132	5. A conveyance of real property that is executed pursuant to a court order.
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134	134	6. A deed to an unpatented mining claim.
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136	136	7. A deed of gift.
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138	138	B. The affidavit, and real estate transfer fee and real estate transfer tax required by this article do not apply to a transfer of title:
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140	140	1. Solely in order to provide or release security for a debt or obligation, including a trustee's deed pursuant to power of sale under a deed of trust.
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142	142	2. That confirms or corrects a deed that was previously recorded.
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144	144	3. When the transfer of title has only nominal actual consideration for the transfer of residential property between:
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146	146	(a) Husband and wife or ancestor of the husband and wife.
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148	148	(b) Parent and child, including natural or adopted children and their descendants.
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150	150	(c) Grandparent and grandchild.
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152	152	(d) Natural or adopted siblings.
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154	154	4. On a sale for delinquent taxes or assessments.
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156	156	5. On partition.
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158	158	6. Pursuant to a merger.
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160	160	7. For no consideration or nominal consideration:
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162	162	(a) By a subsidiary to its parent or from a parent to a subsidiary.
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164	164	(b) Among commonly controlled entities.
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166	166	(c) From a member to its limited liability company or from a limited liability company to a member.
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168	168	(d) From a partner to its partnership.
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170	170	(e) From a partnership to a partner.
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172	172	(f) From a joint venturer to its joint venture.
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174	174	(g) From a joint venture to a joint venturer.
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176	176	(h) From a trust beneficiary to its trustee.
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178	178	(i) From a trustee to its trust beneficiary.
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180	180	(j) From any of the entities in subdivisions (a) through (i) of this paragraph to a single purpose entity in order to obtain financing.
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182	182	8. From a person to a trustee or from a trustee to a trust beneficiary with only nominal actual consideration for the transfer.
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184	184	9. To and from an intermediary for the purpose of creating a joint tenancy estate or some other form of ownership.
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186	186	10. From a husband and wife or one of them to both husband and wife to create an estate in community property with right of survivorship.
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188	188	11. From two or more persons to themselves to create an estate in joint tenancy with right of survivorship.
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190	190	12. Pursuant to a beneficiary deed with only nominal actual consideration for the transfer.
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192	192	13. From an owner to itself or a related entity for no or nominal consideration solely for the purpose of consolidating or splitting parcels.
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194	194	14. Due to a legal name change.
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196	196	C. Any instrument that describes a transaction that is exempt under this section shall note the exemption on the face of the instrument at the time of recording, indicating the specific exemption that is claimed. END_STATUTE
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198	198	Sec. 5. Section 11-1136, Arizona Revised Statutes, is amended to read:
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200	200	START_STATUTE11-1136. Administrative and enforcement powers of department
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202	202	A. The department may prescribe rules that are reasonably necessary to facilitate and expedite the imposition, collection and administration of the real estate transfer fee imposed and real estate transfer tax levied pursuant to this article.
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204	204	B. The department or its authorized agents may:
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206	206	1. Examine books, papers, records or other data bearing on the correctness of any affidavit that is filed or the real estate transfer fee and real estate transfer tax that is are collected pursuant to this article.
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208	208	2. Require the attendance of any person and administer oaths and take testimony with respect to these matters. END_STATUTE
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210	210	Sec. 6. Section 11-1137, Arizona Revised Statutes, is amended to read:
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212	212	START_STATUTE11-1137. Violations; classification
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214	214	A. A county recorder or employee of the recorder who knowingly records any deed or contract for which a real estate transfer fee and real estate transfer tax is charged by this article without collecting the additional fee and tax is guilty of a class 2 misdemeanor.
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216	216	B. Any person who knowingly fails to provide or knowingly falsifies the information that is required by this article on the affidavit of legal value is guilty of a class 2 misdemeanor. END_STATUTE
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218	218	Sec. 7. Section 41-3955, Arizona Revised Statutes, is amended to read:
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220	220	START_STATUTE41-3955. Housing trust fund; purpose; annual report
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222	222	A. The housing trust fund is established, and the director shall administer the fund. The fund consists of monies from the real estate transfer tax deposited pursuant to section 11-1132, monies from unclaimed property deposited in the fund pursuant to section 44-313, monies transferred pursuant to section 35-751 and investment earnings.
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224	224	B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
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226	226	C. Except as provided in subsection D of this section, fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44-313, subsection A, A portion of fund monies shall be used exclusively for housing in rural areas.
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228	228	D. Fund monies may be spent on constructing or renovating facilities and on housing assistance, including support services, for persons who have been determined to be seriously mentally ill and to be chronically resistant to treatment.
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230	230	E. For the purposes of subsection C of this section, in approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low-income families and that provide housing and shelter to families that have children.
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232	232	F. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall also include the number of individuals who benefit from housing assistance pursuant to subsection D of this section. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, not later than September 1 of each year.
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234	234	G. Monies in the housing trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.
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236	236	H. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund.
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238	238	I. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations. END_STATUTE
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240	240	Sec. 8. Requirements for enactment; two-thirds vote
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242	242	Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.