(a) "Reconstruction
(of Real Property)" shall mean the subdividing of real property
and, in addition, all construction contracting activities performed
upon said real property; provided, however, that each of the following
conditions are met:
(1) a structure
existed on said real property prior to the reconstruction activity;
and
(2) the "prior
value" of said structure exceeds fifteen percent (15%) of the "prior
value" of the integrated property (land, improvements, and structure);
and
(3) the total
cost of all construction contracting activities performed on said
real property in the twenty-four (24) month period prior to the
sale of any part of the real property exceeds fifteen percent (15%)
of the "prior value" of the real property; and
(4) the structure
which existed on the real property prior to the reconstruction activity
still exists in some form upon the property, and is included, in
whole or in part, in the property sold.
(b) Except as
provided in subsection (c) below, "prior value" means the value
of the total integrated property, with improvements, as existing immediately
prior to any reconstruction activity. Where, according to Title 42
of the Arizona Revised Statutes, a property's full cash value for
secondary tax purposes is intended to represent the property's fair
market value, "prior value" shall be the property's full cash
value for secondary property tax purposes as determined by the County
Assessor in the year immediately preceding the year in which the reconstruction
improvement(s) are or could have been included in the County Assessor's
valuation. If the County Assessor's valuation is contested or appealed,
the final determination at either the administrative or judicial level
shall apply. Where, according to Title 42 of the Arizona Revised Statutes,
a property's full cash value for secondary property tax purposes is
not intended to represent the property's fair market value, "prior
value" shall be the property's fair market value prior to the
reconstruction improvement(s).
(c) "Alternative
Prior Value" shall mean that as an alternative to the "prior value"
defined above, the taxpayer may use his actual cost of the reconstructed
property prior to reconstruction, provided that evidence of such cost
is presented to the Tax Collector and is determined by the Tax Collector,
in his sole discretion, to be satisfactory. Such evidence shall consist,
at a minimum, of proof of the actual, arms-length acquisition price,
accompanied by a full appraisal of all property involved which appraisal
shall have been performed by a real estate broker or MAI appraiser
specifically for the purpose of assisting in the acquisition and further
shall have been performed on behalf of the seller or a lending institution
which has lent at least sixty-five percent (65%) of the acquisition
price. (Only long term lending - not interim or construction financing
will be considered.) This alternative value shall be used only if
the property was acquired by the reconstruction taxpayer not more
than thirty-six (36) months prior to a "sale" as defined below.
(d) A "sale"
for the purpose of determining "alternative prior value" or "reconstruction"
only shall be deemed to have occurred as of the date of the execution
of a contract of sale or a deed (joint tenancy or warranty) whichever
is earlier, to a purchaser or grantee of any single residential or
other occupancy unit. In addition to the foregoing, a lease with option
to purchase a single residential unit shall be considered a "sale"
at the date of execution of such lease if said option is exercisable
by the lessee in not later than nine (9) months. Further in the case
of cooperative apartments, the sale date shall be the date of execution
of the contract selling (subject or not to encumbrances, liens or
security interests) of a share, or a sufficient number of shares which
entitle the purchaser to the occupancy of a residential unit. In all
cases a person shall include a husband and wife as a community, or
any co -occupants of a single unit as joint tenants.
