https://apps.azleg.gov/BillStatus/BillOverview/27280
After three years of intense negotiations and in the final days of the 2010 legislative session, an agreement was finally reached between the business community and Arizona's cities to reform the government property lease excise tax (GPLET). As signed by the Governor, HB2504 protects existing GPLET deals and reforms the GPLET law on a prospective basis.
As enacted, HB2504 established new rates for leases and development agreements of government property improvements entered into on or after June 1, 2010. Development agreements entered into before June 1, 2010 and that enter into a lease within ten years are grandfathered into the existing rate structure with the allowance to amend the agreement within specific parameters. The new rates are adjusted annually according to the producer price index for new construction. The eight-year abatement is maintained; however, a central business district (CBD) is defined to mean a single, contiguous geographical area within a slum and blighted area that is no larger than the greater of 5% or 640 acres. In addition, HB2504 institutes a maximum lease not to exceed 25 years, including any abatement period if applicable, and requires the government lessor to convey the property to the prime lessee upon expiration of the lease, at which time the property is added to the property tax rolls (whereas under the old GPLET rate structure, a property is no longer subject to tax after 50 years). HB2504 also included reporting requirements of the government lessor.