HB2574 - 492R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 48-572, Arizona Revised Statutes, is amended to read:

START_STATUTE48-572. Purposes for which public improvements may be undertaken; powers incidental to public improvements

A. When the public interest or convenience requires, the governing body of a municipality may:

1. Order the whole or any portion, either in length or width, of one or more of the streets of the municipality graded or regraded, paved or repaved, or otherwise improved or reimproved.

2. Order the construction, reconstruction or repair of any tunnel, subway, viaduct or conduit in, on, under or over any street, or land of the municipality or any land on, under or over which the municipality may have an easement or right-of-way therefor.

3. Order the construction or reconstruction of sidewalks, crosswalks, curbs, gutters, culverts, bridges, tunnels, siphons, manholes, steps, parkings and parkways and also pipes, hydrants and appliances for fire protection.

4. Order construction, reconstruction or acquisition of sewers, ditches, drains, conduits, pipelines and channels for sanitary and drainage purposes, or either or both thereof, with outlets, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers, ditches, drains, conduits, channels and other appurtenances in, under, over or through any street, or any land of the municipality or any right-of-way granted or obtained for such purpose, either within or without the limits of the municipality.

5. Order construction, reconstruction or acquisition of waterworks, ditches, canals, channels, conduits, pipelines and siphons, together with the necessary or usual appurtenances for carrying storm water or water from irrigation ditches, watercourses, streams or springs into, through or out of the municipality, in, under, over or through any street, or any land of the municipality or any right-of-way granted or obtained for such purpose, either within or without the limits of the municipality.

6. Order construction, reconstruction or acquisition of breakwater levees or walls, docks, wharves, marinas, boat harbors and related facilities.

7. Order construction, reconstruction or acquisition of lighting plants and poles, wires, conduits, lamps, standards and other appliances for the purpose of lighting and beautifying the streets improved.

8. Order the whole or any portion of any off‑street parking area and entrances thereto of the municipality graded or regraded, paved or repaved, or otherwise improved or reimproved, order lighting plants and poles, wires, conduits, lamps, standards, and other appliances for the purpose of lighting, landscaping and beautifying the streets or off-street parking areas and entrances thereto to be improved and order construction on such land of parking structures that may have any portion at, above or below grade. If in connection with any lot or parcel within a proposed assessment district adequate off-street parking facilities have been provided, such lot or parcel shall be excluded from the assessment district and shall not be assessed for such improvements if within the time and in the manner provided in section 48‑579, subsection C the owner or owners file a written objection to the extent of the assessment district. For purposes of this paragraph in cities having a zoning code or ordinance, unless the off-street parking facilities provided meet or exceed the requirements of the zoning code or ordinance for a lot or parcel of that size in that zone, then such off‑street parking facilities shall not be deemed adequate. In cities not having a zoning code or ordinance, the facilities provided shall not be deemed adequate unless parking space for one motor vehicle is provided for each three hundred square feet of floor space in the building served by such off‑street parking site. If any lot or parcel within a proposed assessment district organized for improvements provided for in this paragraph is zoned and used exclusively for single family residential purposes, such lot or parcel shall be excluded from the assessment district and shall not be assessed for such improvements if within the time and in the manner provided in section 48‑579, subsection C the owner or owners file a written objection to the extent of the assessment district.

9. Order the construction or reconstruction of any work incidental to or connected with the improvements set forth in this subsection.

10. Pursuant to section 48‑622, and notwithstanding any other law, construct, acquire or improve a wastewater treatment facility, drinking water facility or nonpoint source project with monies borrowed from or financial assistance including forgivable principal provided by the water infrastructure finance authority of Arizona.

11. Pursuant to section 48-623, order the acquisition, installation and improvement of energy efficiency and renewable energy improvements and water conservation improvements, including solar energy systems, combined heat and power systems, rainwater harvesting equipment and systems and gray water systems.

B. In addition to all powers specifically granted by or reasonably inferred under the provisions of this article, cities and towns, acting through their governing bodies, may:

1. Join with other cities or towns or any improvement district or sanitary district or the state, or any of its departments or agencies, the federal government or any of its departments, agencies or instrumentalities, in the construction, operation or maintenance of improvements authorized by this section.

2. Join with any other city, town, improvement district or sanitary district in improving streets running upon or along the boundaries of the city or town and levy assessments or issue bonds for the proportionate part of the city or town of the cost of the improvement.

3. Accept from the state, or federal government, or any agency, department or instrumentality of either, grants for or in aid of the construction of any of the improvements provided by this article, and enter into contracts with the state, the federal government, or any agency, department or instrumentality of either or both, for the construction or supervision of construction by the state, the federal government or any agency, department or instrumentality of either or both of any such improvements, in accordance with the plans, specifications, rules and regulations of the state, the federal government, or any agency, department or instrumentality of either or both, but reserving to the city or town the right to assess against the property benefited by the improvement, and located within the city or town, that portion of the cost of the improvement which does not qualify for aid under the state or federal grant. END_STATUTE

Sec. 2. Title 48, chapter 4, article 2, Arizona Revised Statutes, is amended by adding section 48-623, to read:

START_STATUTE48-623. Improvement districts for energy efficiency, renewable energy, water conservation and water management improvements; notice; assessments

A. In addition to the purposes for which an improvement district may be formed pursuant to section 48-572, an improvement district may be formed for the purpose of the acquisition, installation and improvement of energy efficiency and renewable energy improvements and water conservation improvements, including solar energy systems, combined heat and power systems, rainwater harvesting equipment and systems and gray water systems. These improvements may be on or in publicly or privately owned real property or buildings, or both.

B. An improvement district formed pursuant to this section shall be formed only if a petition for the formation of such an improvement district is presented to the governing body and purports to be signed by all of the real property owners in the proposed district, exclusive of mortgagees and other lienholders, or by the real property owners, exclusive of mortgagees and other lienholders, that will be subject to assessment for the annual expenses. A property owner may choose to join the district after formation or may choose to join a proposed DISTRICT before formation by submitting to the governing body a petition stating that intent INCLUDING the intent to be bound by an assessment, and bearing the notarized signature of the property owner. If such a petition is presented, the governing body, after verifying ownership and making a finding of those facts, may adopt a resolution of intention to order the improvements pursuant to section 48-576 and shall have immediate jurisdiction to adopt a resolution ordering the improvement pursuant to section 48-581, without the necessity of the publication and posting of the resolution of intention prescribed in section 48-578. The resolution of intention to order the improvements and the resolution ordering the improvements shall describe the energy efficiency and renewable energy improvements that the governing body is authorizing for acquisition, installation and improvement.

C. The governing body shall make annual statements and estimates of the expenses of the district, and shall assess the total sum on the several lots, each respectively in proportion to the benefits to be received by each lot. When the assessments have been completed, the governing body shall fix a time when it will hear and pass on the assessments and the prior proceedings relating to the assessments, which shall not be less than twenty days after the date of the notice. Notice of hearing shall be given as prescribed in section 48-590, subsection E. Any person who owns real property affected by the assessment and who has any objection to the legality of the assessment, or to any of the previous proceedings connected to the assessment, before the time fixed for the hearing, may file a written notice briefly specifying the grounds of the objection. At the time fixed for the hearing or at any time not later than ten days after the time fixed for the hearing to which the hearing may be postponed, the governing body shall hear and pass on the objections. The decision of the governing body shall be final and conclusive on all persons entitled to object as to all errors, informalities and irregularities that the governing body might have remedied or avoided any time during the progress of the proceedings.

D. The assessments for the annual expenses shall be collectible in the manner and by the officers provided by law for the collection and enforcement of general taxes that the municipality is authorized to levy. All statutes providing for the levy and collection of county and city taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to the district assessments provided for under this section.

E. This section does not authorize a district formed pursuant to this section to distribute or transmit electrical power, except that the operation of a net metering system as prescribed by applicable rules or tariffs or under federal law is not prohibited.

F. If a property that is improved or assessed by a district formed under this section is divided, future assessments shall be levied only on the portion or portions of the property that have been improved.

G. A city or town shall not take any action that requires a person or entity to participate in a district formed pursuant to this section, including requiring participation as a condition of rezoning, a development agreement or an ordinance. END_STATUTE

Sec. 3. Section 48-909, Arizona Revised Statutes, is amended to read:

START_STATUTE48-909. Purposes for which public improvements may be undertaken; powers incidental to public improvements

A. When the public interest or convenience requires, the board of directors of an improvement district may order:

1. The whole or any portion, either in length or width, of one or more of the streets of the district graded or regraded, paved or repaved, landscaped or otherwise maintained, improved or reimproved.

2. The acquisition, construction, reconstruction or repair of any street, tunnel, subway, viaduct or conduit in, on, under or over which the district may have an easement or right‑of‑way therefor.

3. The construction or reconstruction of sidewalks, crosswalks, curbs, gutters, culverts, bridges, tunnels, siphons, manholes, steps, parkings and parkways.

4. The placement, replacement or repair of pipes, hydrants and appliances for fire protection.

5. The acquisition, construction, reconstruction, maintenance or repair of wastewater treatment facilities, sewers, ditches, drains, conduits, pipelines and channels for sanitary and drainage purposes, with outlets, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers, ditches, drains, conduits, channels and other appurtenances in, under, over or through any street or any land of the district or any right‑of-way granted or obtained for such purpose, either within or without the district limits.

6. The acquisition, construction, reconstruction or repair of waterworks for the delivery of water for domestic purposes, and of wells, ditches, canals, channels, conduits, pipelines and siphons, together with the necessary or usual appurtenances for carrying storm water or water from irrigation ditches, watercourses, streams or springs into, through or out of such district in, under, over or through any street, or any land of the district or any right-of-way granted or obtained for such purpose, either within or without the district limits. Nothing in this section shall be construed to prohibit the board of directors of an improvement district from purchasing an existing domestic water delivery system within the district or outside the district or constructing an initial or improving an existing domestic water delivery system inside or outside the district.

7. The construction, reconstruction or repair of breakwater levees or walls, riverbank protection or replacement of riverbanks and supporting land. A district established for this purpose shall cooperate and coordinate its plans and activities with the county flood control district established in the county and any incorporated city or town in which the district is established.

8. The acquisition, construction, reconstruction or repair of lighting plants and poles, wire conduits, lamps, standards and other appliances for the purpose of lighting and beautifying streets or other public lands.

9. The construction, reconstruction or repair of any work incidental to or connected with any such improvement.

10. The acquisition, in the name of the district, by gift, purchase or otherwise and the maintenance, repair, improvement or disposal of any real or personal property necessary or convenient for district operation for a community center, park or recreational area.

11. Pursuant to section 48‑902, the board of directors of an improvement district may contract for or in any other manner provide transportation services within the district.

12. Pursuant to section 48-909.03, the acquisition, installation and improvement of energy efficiency and renewable energy improvements and water conservation improvements, including solar energy systems, combined heat and power systems, rainwater harvesting equipment and systems and gray water systems.

B. In addition to the powers specifically granted by or reasonably inferred from this article, an improvement district through its board of directors may:

1. Acquire by gift, purchase, condemnation or otherwise in the name of the district and own, control, manage and dispose of any real or personal property or interest in such property necessary or convenient for the construction, operation and maintenance of any of the improvements provided for by this article.

2. Join with any other improvement district, any city, town, governmental agency or Indian tribe, or any agency or instrumentality of an Indian tribe, or any person in the construction, operation or maintenance of any of the improvements hereby authorized.

3. Join with any other improvement district or any city, town, county or Indian tribe, or any agency or instrumentality of an Indian tribe, in improving streets running upon or along the boundary of the district and levy assessments and issue bonds for the district's part of the cost of such improvements.

4. Sell, lease or otherwise dispose of any property of the district or interest in such property when the property is no longer required for the purposes of the district or the use of which may be permitted without interfering with the use thereof by the district.

5. Sell or otherwise dispose of any property or material acquired in the construction or operation of any improvements as a by-product or otherwise, and acquire rights‑of‑way for such disposal by condemnation or otherwise.

6. Accept from the state of Arizona or the federal government, or any agency, department or instrumentality of either, grants for or in aid of the construction of any of the improvements provided for by this chapter.

7. Notwithstanding any other law, sell improvement bonds to the federal government, or any agency, department or instrumentality of the federal government, for the construction of any of the improvements provided by this chapter.

8. Enter into contracts with the state of Arizona or the federal government, or any agency, department or instrumentality of either or both, for the construction or supervision of construction by the state of Arizona or the federal government, or any agency, department or instrumentality of either or both, but reserving to the district the right to assess against the property benefited by the improvement, and located within the district, that portion of the cost of the improvement which does not qualify for aid under a state or federal grant.

9. Operate, maintain and repair the streets within the district and any improvements made pursuant to this chapter.

10. Do all things incidental to the exercise of the powers granted by this article.

C. A county improvement district formed for the purpose of purchasing an existing or constructing a new domestic water delivery system within the district or outside the district shall have the same authority and responsibility as an incorporated city or town pursuant to title 45 and chapters 22 and 28 of this title.

D. An improvement district which proposes to provide domestic water service within the certificated area of a public service corporation serving domestic water shall provide just compensation to the public service corporation pursuant to section 9‑516 for the facilities or certificated area taken. The right to compensation for a public service corporation from an improvement district shall not apply if no facilities of the public service corporation are actually acquired by the improvement district and either of the following conditions exist:

1. At the time the law providing for compensation became effective the certificated area for which compensation is sought is an area which was within the boundaries of an improvement district.

2. A certificate is issued to a public service corporation for any area which is within an improvement district at the time the certificate is issued.

E. If the county board of supervisors determines that the public interest or convenience so requires, an improvement district that is formed for the purposes of providing domestic water service pursuant to article 4 of this chapter may also provide domestic wastewater service. END_STATUTE

Sec. 4. Title 48, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 48-909.03, to read:

START_STATUTE48-909.03. Improvement districts for energy efficiency, renewable energy, water conservation and water management improvements; notice; assessments

A. In addition to the purposes for which an improvement district may be formed pursuant to section 48-909, an improvement district may be formed for the purpose of the acquisition, installation and improvement of energy efficiency and renewable energy improvements and water conservation improvements, including solar energy systems, combined heat and power systems, rainwater harvesting equipment and systems and gray water systems. These improvements may be on or in publicly or privately owned real property or buildings, or both.

B. An improvement district formed pursuant to this section shall be formed only if a petition for the formation of such an improvement district is presented to the governing body and purports to be signed by the real property owners in the proposed district, exclusive of mortgagees and other lienholders, or by all of the real property owners, exclusive of mortgagees and other lienholders, that will be subject to assessment for the annual expenses. A property owner may choose to join the district after formation or may choose to join a proposed DISTRICT before formation by submitting to the governing body a petition stating that intent, INCLUDING the intent to be bound by an assessment, and bearing the notarized signature of the property owner. a District formed pursuant to this section may include portions of a city or town only after formal approval of that inclusion by the governing body of the city or town. If such a petition is presented, the board, after verifying ownership and making a finding of those facts, may adopt a resolution of intention to order the improvements pursuant to section 48-912 and shall have immediate jurisdiction to adopt a resolution ordering the improvement pursuant to section 48-919, without the necessity of mailing the notice of the resolution of intention prescribed in section 48-916. The resolution of intention to order the improvements and the resolution ordering the improvements shall describe the energy efficiency and renewable energy improvements that the board is authorizing for acquisition, installation and improvement.

C. The board shall make annual statements and estimates of the expenses of the district, and shall assess the total sum on the several lots, each respectively in proportion to the benefits to be received by each lot. When the assessments have been completed, the board shall fix a time when it will hear and pass on the assessments and the prior proceedings relating to the assessments, which shall not be less than twenty days after the date of the notice. Notice of hearing shall be given as prescribed in section 48‑928, subsection E. Any person who owns real property affected by the assessment and who has any objection to the legality of the assessment, or to any of the previous proceedings connected to the assessment, before the time fixed for the hearing, may file a written notice briefly specifying the grounds of the objection. At the time fixed for the hearing or at any time not later than ten days after the time fixed for the hearing to which the hearing may be postponed, the board shall hear and pass on the objections. The decision of the board shall be final and conclusive on all persons entitled to object as to all errors, informalities and irregularities that the board might have remedied or avoided any time during the progress of the proceedings.

D. The assessments for the annual expenses shall be collectible in the manner and by the officers provided by law for the collection and enforcement of general taxes that the county is authorized to levy. All statutes providing for the levy and collection of county and city taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to the district assessments provided for under this section.

G. A county shall not take any action that requires a person or entity to participate in a district formed pursuant to this section, including requiring participation as a condition of rezoning, a development agreement or an ordinance. END_STATUTE

Sec. 5. Legislative intent

The legislature finds, determines and declares that:

1. The development, production and efficient use of renewable energy will continue to play a central and critical role in the future of this state and of the nation as a whole.

2. The development, production and efficient use of renewable energy will advance the security, economic well-being and public and environmental health of this state, as well as contribute to the energy independence of our nation.

3. The conservation and efficient use of water resources likewise play a central and critical role in the future of this state and its individual cities and counties and serve to advance the security, economic well-being and public and environmental health of this state.

4. The inclusion of energy efficiency and renewable energy production projects and water conservation improvements for residential and commercial use in improvement districts, and the powers conferred under this section, as well as the expenditures of public monies made pursuant to this section and article, serve a valid public purpose, and that the enactment of this section is expressly declared to be in the public interest.