42-6203

42-6203. Rates of tax

A. Except as otherwise provided in this section, if a lease of a government
property improvement was entered into before June 1, 2010, or if a development agreement,
ordinance or resolution was approved by the governing body of the government lessor
before June 1, 2010 that authorized a lease on the occurrence of specified conditions and
the lease was entered into within ten years after the date the development agreement was
entered into or the ordinance or resolution was approved by the governing body:

1. The tax authorized by this article shall be levied and collected at the
following rates:

(a) One dollar per square foot of gross building space for office buildings with
one floor above ground.

(b) One dollar twenty-five cents per square foot of gross building space for office
buildings with more than one but fewer than eight floors above ground.

(c) One dollar seventy-five cents per square foot of gross building space for
office buildings with eight floors or more above ground.

(d) One dollar fifty cents per square foot of retail building space, including
space that is devoted to the sale of tangible personal property, restaurants, health
clubs, hair salons, dry cleaners, travel agencies and other retail services.

(e) One dollar fifty cents per square foot of hotel or motel building space.

(f) Seventy-five cents per square foot of warehouse or industrial building space.

(g) Fifty cents per square foot of residential rental building space.

(h) One hundred dollars per parking space located in a parking garage or deck.

(i) One dollar per square foot of all other government property improvements not
included in subdivisions (a) through (h) of this paragraph.

2. The tax rate for government property improvements for which the original
certificate of occupancy was issued:

(a) At least ten years but less than twenty years before the date the tax is due is
eighty per cent of the rate provided in paragraph 1 of this subsection.

(b) At least twenty years but less than thirty years before the date the tax is due
is sixty per cent of the rate provided in paragraph 1 of this subsection.

(c) At least thirty but less than forty years before the date the tax is due is
forty per cent of the rate provided in paragraph 1 of this subsection.

(d) At least forty but less than fifty years before the date the tax is due is
twenty per cent of the rate provided in paragraph 1 of this subsection.

(e) Fifty or more years before the date the tax is due is zero.

3. If no certificate of occupancy can be located, dated aerial photographs or other
evidence of substantial completion may be used to determine the age of the building for
purposes of paragraph 2 of this subsection.

4. A lease or development agreement, originally subject to this subsection, that is
subsequently amended remains subject to this subsection if the amended lease or
development agreement meets all of the following requirements:

(a) The government lessor determines that the amendment furthers the original
purpose of the lease or development agreement.

(b) Any land added under the amendment is contiguous to the land under the original
lease or development agreement and does not increase the land area under the original
lease or development agreement by more than fifty per cent.

(c) Any government property improvement added under the amendment does not increase
the area of gross building space of government property improvements under the original
lease or development agreement by more than one hundred per cent.

B. Except as otherwise provided in this section, if a lease of a government
property improvement does not meet the conditions for applying subsection A of this
section:

1. Subject to paragraphs 2 and 3 of this subsection, the tax authorized by this
article shall be levied and collected at the following base rates, which apply through
December 31, 2011:

(a) Two dollars per square foot of gross building space for office buildings with
one floor above ground.

(b) Two dollars thirty cents per square foot of gross building space for office
buildings with more than one but fewer than eight floors above ground.

(c) Three dollars ten cents per square foot of gross building space for office
buildings with eight floors or more above ground.

(d) Two dollars fifty-one cents per square foot of retail building space, including
space that is devoted to the sale of tangible personal property, restaurants, health
clubs, hair salons, dry cleaners, travel agencies and other retail services.

(e) Two dollars per square foot of hotel or motel building space.

(f) One dollar thirty-five cents per square foot of warehouse or industrial
building space.

(g) Seventy-six cents per square foot of residential rental building space.

(h) Two hundred dollars per parking space located in a parking garage or deck.

(i) Two dollars per square foot of all other government property improvements not
included in subdivisions (a) through (h) of this paragraph.

2. If, in the tax year in which the lease of the government property improvement is
entered into, the aggregate of all ad valorem property tax rates of all taxing
jurisdictions in which the government property improvement is located is within ninety
per cent and one hundred ten per cent of the countywide average combined property tax
rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently
adjusted pursuant to paragraph 3 of this subsection, applies with respect to that
government property improvement. If, in the tax year in which the lease of the
government property improvement is entered into, the aggregate of all ad valorem property
tax rates of all taxing jurisdictions in which the government property improvement is
located is less than ninety per cent of the countywide average combined property tax
rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently
adjusted pursuant to paragraph 3 of this subsection, shall be reduced by ten per cent.

3. On or before December 1, 2011 and December 1 of each year thereafter, for all
government property leases that are subject to this subsection the department of revenue
shall adjust the tax rates that apply under paragraphs 1 and 2 of this subsection in the
following calendar year for each property use according to the average annual positive or
negative percentage change for the two most recent fiscal years in the producer price
index for new construction or its successor index published by the United States bureau
of labor statistics. On or before December 15 of each year, the department shall post
the adjusted rates for the following calendar year on its official website and transmit
the adjusted rates to each county treasurer.

C. The tax rate for a government property improvement that was constructed pursuant
to a lease or development agreement entered into from and after June 30, 1996 and that is
located outside a slum or blighted area established pursuant to title 36, chapter 12,
article 3 is one and one-half times the rate established by subsections A and B of this
section.

D. Within the first twenty years after the issuance of the original certificate of
occupancy, the tax rate on the use or occupancy of a government property improvement is
twenty per cent of the rate established in subsections A and B of this section for any of
the following:

1. Government property improvements that are subject to leases or agreements that
were entered into before April 1, 1985, and options and rights contained in the leases or
agreements.

2. Government property improvements that are subject to leases entered into based
on a redevelopment contract, as defined in section 36-1471, entered into before April 1,
1985.

3. Government property improvements that are subject to leases entered into based
on an agreement for a redevelopment project for which federal grant monies have been
received and that was entered into before April 1, 1985.

4. Government property improvements that are located at an airport that was owned
on or before January 1, 1988 by a county having a population of four hundred thousand
persons or less or by a city or town that is located in a county having a population of
four hundred thousand persons or less if the property is used primarily for
manufacturing, retail, distribution, research or commercial purposes. For the purposes of
this paragraph, "commercial" includes facilities for office, recreational, hotel, motel
and service uses.

E. Within the first ten years after the issuance of the certificate of occupancy,
the tax rate on the use or occupancy of a government property improvement that is located
in a slum or blighted area established pursuant to title 36, chapter 12, article 3, that
resulted or will result in an increase in property value of at least one hundred per cent
and that is not eligible for abatement pursuant to section 42-6209 is eighty per cent of
the rate established in subsections A and B of this section.

F. The tax rate to be applied under subsection A or B of this section shall be
determined by the predominant use to which the government property improvement is
devoted, except that in all cases the tax rate prescribed by subsection A, paragraph 1,
subdivision (h) or subsection B, paragraph 1, subdivision (h) of this section shall be
applied to any parking garage or deck. If there is no single predominant use, the tax
shall be determined by applying the appropriate tax rate to the building space devoted to
each use identified in that subsection. For the purposes of this subsection, in applying
the tax rates under subsection A of this section the functional area of a government
property improvement does not include subsidiary, auxiliary or servient areas such as
lobbies, stairwells, mechanical rooms and meeting and banquet rooms. For the purposes of
this subsection, "predominant use" means the use to which eighty-five per cent or more of
the functional area of a government property improvement is devoted.

G. Prime lessees of government property improvements who become taxable or whose
taxable status terminates during the calendar year in which the taxes are due, including
prime lessees subject to exemption or abatement under sections 42-6208 and 42-6209, shall
pay tax for that calendar year on a pro rata basis.