42-11102

42-11102. Exemption for government property;
application of procedural provisions

A. Federal, state, county and municipal property is exempt from taxation,
including:

1. Property that is owned by a nonprofit organization but is used by this state or
a political subdivision during the entire tax year exclusively for a governmental
activity.

2. Property that is the subject of a lease-purchase agreement that is authorized by
law and in which this state or a political subdivision is the lessee-purchaser and the
property is used by this state or a political subdivision during the entire taxable year
exclusively for a governmental activity.

3. Improvements that are placed on public lands held under grazing permits, the
title to which passes to the federal government.

B. Article 4 of this chapter does not apply to the exemption from taxation for
federal, state, county and municipal property.

C. Notwithstanding subsection A relating to state property, property that is owned
by the Arizona state retirement system, the corrections officer retirement plan, the
public safety personnel retirement system or the elected officials' retirement plan, that
is not used during the entire taxable year exclusively for a governmental activity and
that is acquired either by foreclosure of an authorized investment or for the purposes of
producing income for the system or plan is subject to either a government property lease
tax under chapter 6, article 5 of this title or, if a government property lease tax is
not paid or is not economically feasible, to voluntary contributions of money to the
county, municipality, school district and community college district and any other
special taxing district in which the property is located in lieu of taxes otherwise
levied by those entities. The system or plan may not continue to hold title to the
property as an authorized investment under title 38 unless a tax or voluntary
contribution is paid pursuant to this subsection. On or before April 1 of each year the
plan or system shall notify the county assessor of the county in which the property is
located whether a government property lease tax or voluntary contribution will be
paid. If a tax is not economically feasible, the county assessor may require the plan or
system to pay voluntary contributions. If the system or plan pays a voluntary
contribution:

1. The assessor shall determine the full cash value of the property at market value
and shall transmit that determination to the board of supervisors on or before the third
Monday in June.

2. On or before the third Friday in September the assessor shall compute the
contribution to be made based on the determined valuation using the method of assessment
applied in assessing ad valorem taxes of properties of similar character and devoted to
the same use in the county for the current tax year.

3. The assessor shall:

(a) Submit the computation of the contribution to the board of supervisors at the
same time that the assessor submits the assessment roll.

(b) Notify the county school superintendent of the amount of the contribution.

4. The plan or system shall pay one-half of the amount determined not later than
the first Monday in November and the other one-half not later than the first Monday in
May of the next year.

5. The county treasurer shall distribute the monies received to the various taxing
jurisdictions in the same manner as property taxes are distributed.

6. Any person, public official or taxing entity that is not satisfied by a
determination under this subsection has the same remedies provided by this title or may
file a civil action to determine the correct amount due. In any such action the only
issue shall be the correctness of the computation of the amount due.