SB1083 - 492R

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

Section 1. Section 48-589, Arizona Revised Statutes, is amended to read:

START_STATUTE48-589. Diagrams of property affected; estimate of benefits; assessment; warrant

A. The engineer shall make duplicate diagrams of the property fronting upon the proposed work or improvement, or contained within the assessment district when the expenses of the proposed improvement are to be assessed upon a district. The diagrams shall show each separate lot, numbered consecutively, the approximate area in square feet of each lot, and the location of the lot in relation to the work proposed to be done.

B. When the diagrams have been approved by the governing body, and the clerk has certified that fact and the date thereof, the diagrams shall be delivered to the superintendent of streets.

C. At any time after bids have been received for the construction of the work or the municipality has entered into a contract to purchase an existing facility, the superintendent shall estimate on the lots fronting on the work when no district has been established, or, when a district has been established, upon each of the lots within the district, the benefits arising, or expected to arise, from the work. The superintendent shall thereupon make an assessment to cover the sum due for the work performed and specified in the bid of the person to whom the contract was awarded, including incidental expenses, and shall assess upon and against the lots the total amount of the costs and expenses of the work. In so doing the superintendent shall assess the total sum upon the several lots, each respectively in proportion to the benefits to be received by each lot.

D. When the work has not been declared by the resolution of intention to be of more than local or ordinary public benefit, and has not been made assessable upon a district, the lots liable to be assessed for the improvement shall be those fronting upon the street or streets improved, and those situated in the quarter blocks and irregular blocks adjoining and cornering upon the crossings, or where there is a termination in the two quarter blocks adjoining and cornering thereon, halfway to the next main street crossing and all the way to a boundary line of the municipality when no cross street intervenes.

E. The assessment shall cover the sum due for the work performed or to be performed as specified in the bid of the person to whom the contract may be awarded, and shall also include incidental expenses. The incidental expenses shall include the compensation of the city or town engineer for work done by him, the cost of printing, advertising and posting, the compensation of the person appointed by the superintendent to take charge of and superintend the work of constructing the improvements and the expenses of making the assessment, interest on the bonds for a period not longer than the expected period of construction and six months beyond and all legal and financial fees, expenses and costs incurred in drafting the proceedings and in the sale of the bonds. The amount of incidental expenses shall be settled and allowed by the superintendent upon verified itemized bills. If deemed necessary by the governing board, a reserve fund and additional, similar funds may be established either with proceeds from the sale of the bonds and that will be covered by the assessment or by increasing the collections of the annual installments of principal, over and above the amounts required to pay maturing principal on the bonds. The monies in those funds may be used only to cure deficits in the principal and interest funds or to pay interest and principal on the final maturity or maturities of the bonds.

F. The assessment shall briefly refer to the award of the contract or to the contract if it has then been executed and shall name the person to whom the contract has been awarded and such person's surety, and the amount to be paid therefor as stated in the winning bid or as finally computed by the engineer, if the assessment is not made until the work is completed, together with the incidental expenses, the amount of each assessment, the name of the owner of each lot, if known, and if unknown the word "unknown" shall be written opposite the number of the assessment, together with the amount assessed thereon. The superintendent of streets shall list the names of owners as shown on the most recently certified property tax assessment roll and any other person of whom the superintendent has personal knowledge that such other person may be the owner of the respective lot. The assessments upon the lots assessed shall be consecutively numbered, and the diagram shall be numbered to correspond with the numbers of the assessments.

G. There shall be attached to the assessment a warrant signed by the superintendent and countersigned by the mayor, which shall be substantially in the following form: "By virtue hereof, I (name of superintendent of streets), of the (name of municipality and county), and state of Arizona, by virtue of the authority vested in me as said superintendent of streets, do authorize and empower (name of contractor or the municipality, if the municipality elects to sell the bonds instead of delivering the bonds to the contractor), or the contractor's agents or assigns, to demand and receive the several assessments upon the assessment hereto attached, and this shall be the contractor's warrant for the same."

H. The warrant and assessment shall be recorded in the office of the superintendent not earlier than the date of execution of the construction contract and one diagram shall be there filed. When so recorded, the several amounts assessed shall be a first lien on the lots assessed subject only to the lien for general property taxes and prior special assessments for a period terminating on the date the assessment against the respective lot is paid in full, and such recording shall be notice to all persons interested of the contents of the record.

I. For a community facilities district and in compliance with section 48-721, subsection a, after adoption by the district board of a resolution that levies a special assessment on property in the district for a public infrastructure purpose pursuant to section 48-709, subsection a but before the issuance of special assessment bonds, the district may enter into a written agreement with a landowner as to the manner in which the assessment is to be allocated if the land is to be divided into more than one parcel. Based on that agreement, the district may provide that the collection of installments of assessments be paid to that landowner for the costs of public infrastructure purposes on the same basis that payments would be made on bonds, until the district board determines, if ever, that bonds should be issued. Until bonds are issued, assessments may bear interest at the rate specified by the district board in the written agreement. Installments on assessments or principal that are paid to the landowner shall be credited against the costs of public infrastructure purposes, including incidental expenses as provided in the written agreement. END_STATUTE

Sec. 2. Section 48-597, Arizona Revised Statutes, is amended to read:

START_STATUTE48-597. List of unpaid assessments; issuance of bonds; denominations; due date

A. After the return of the warrant, and after recording the return, the superintendent shall make and certify to the clerk a complete list of all assessments unpaid, which amount to twenty‑five dollars or over, upon any assessment.

B. If any person before certification of the list to the clerk presents to the superintendent an affidavit that the person owns a lot in the list, accompanied by the certificate of a searcher of records that the person is the owner of record, and notifies the superintendent in writing that the person desires no bond to be issued for the assessment upon the lot, then the assessment shall not be included in the list, and shall remain collectible as provided by this article. Omission to file the notice shall bar any defense against the bonds except the defense that the governing body did not have authority to issue the bonds.

C. The clerk shall present the list to the governing body at its next meeting after the return has been recorded. At any time after awarding a contract for construction or acquisition, the governing body may, by resolution, direct improvement bonds to be issued in an amount which shall not exceed the amount of unpaid assessments exceeding twenty‑five dollars as may be shown on the certified list. The resolution shall prescribe the maximum number and denomination of the bonds, and the times when payable, which shall be so fixed that an approximately equal amount of principal shall be paid each year or any approximately equal aggregate amount of principal and interest shall be paid each year until the whole amount is paid. The bonds shall mature in a period which shall not exceed twenty‑five years and three months from the date of the bonds. The denominations of the bonds shall be fixed by the governing body. The governing body may provide in the form of bond for redemption prior to maturity upon the giving of such notice as the governing body determines to be reasonable and for the payment of a premium at redemption if the governing body determines the premium to be advisable. The resolution shall also fix the place, if any, other than the office of the treasurer, at which the bonds and the interest shall be payable.

D. The bonds shall be issued as of the date determined by the governing body, and shall bear interest from such date at the rate rates specified in the resolution, payable semiannually beginning on January 1 or July 1, as the case may be, occurring no earlier than ninety days after the later of the date of the bond or the expected completion of the work, and shall be for the interest accrued at that time.

E. The due date of all bonds shall be January 1 in the years in which they respectively become due.

F. The city shall have the option to sell the bonds at public or private sale or by an on‑line bidding process, at a price not below par and accrued interest to the date of payment, and at an interest rate not in excess of the maximum rate set in the resolution of intention. In the event the bonds are not sold by the city they shall be delivered to the contractor for the amount of the assessments remaining unpaid and the bonds shall bear interest at the maximum interest rate set forth in the resolution or ordinance of intention.

G. If the bonds are sold before the work or acquisition is completed, the proceeds from the sale of the bonds shall be placed in a special fund to be held by the treasurer and to be used for payment of incidental expenses and payments for construction or acquisition. Proceeds from the sale of the bonds shall be used for the acquisition mentioned in the resolution of intention or to make semimonthly or monthly payments to the contractor upon a basis of ninety per cent of the value of the work actually performed as estimated by the superintendent or engineer employed for such purposes to and including the fifteenth or last day of each calendar month. The balance shall be paid after the governing body has approved the assessment after the hearing. Pending use of the bond proceeds, the treasurer may invest the proceeds in any investments for which sinking funds of this state may be invested. Notwithstanding the foregoing, if bond anticipation notes have been issued, the bond proceeds, or so much as is necessary, shall be used to redeem such notes.

H. The city and the county treasurer for the county in which the city is located may enter into an agreement for the county treasurer to collect the assessments in the manner and by the officers provided by law for the collection and enforcement of general taxes. The city and the county treasurer may provide by agreement for the payment of the county treasurer's collection expenses that are directly related to the levy of the assessment and, if so provided, the levy of the assessment may include an amount for compensation of the county treasurer's expenses directly related to the collection of the assessment. Section 11-496 applies to the compensation received by the county treasurer pursuant to the agreement.END_STATUTE

Sec. 3. Section 48-603, Arizona Revised Statutes, is amended to read:

START_STATUTE48-603. Sale procedure; municipality as purchaser; disposition of property by municipality

A. On the day fixed for the sale, the superintendent shall, at 10:00 a.m., or at any time thereafter to which the sale may be adjourned, begin the sale of the property advertised, commencing at the head of the list and continuing in the numerical order of lots, until all are sold. The superintendent may postpone or continue the sale from day to day until all the property is sold. Each lot separately assessed shall be offered for sale separately. The sale shall be for the entire assessment including the delinquent installments, and the person who will take the least quantity of land and then and there pay the amount of the assessment, penalty and costs due, including fifty cents to the superintendent for a certificate of sale, shall become the purchaser.

B. The municipality may provide by ordinance that if there is no purchaser other than the municipality who will pay the entire amount of the assessment, penalty and costs, including fifty cents to the superintendent for a certificate of sale, the superintendent shall sell the lot or portion of the lot to the person who will take the least quantity of land and then and there pay the amount of the assessment then delinquent, including interest, penalty and costs due, and fifty cents to the superintendent for a certificate of sale, and deed shall issue to the purchaser, subject to redemption, as provided by this article. The municipality may also provide by ordinance that the lien on the entire lot, piece or parcel of land assessed shall continue to be in effect for the amount of the assessment or portion thereof, including interest, penalties and costs, thereafter to become due, and the land may again be sold should the assessment again become delinquent. When so provided by ordinance such fact shall be stated in the notice of sale and the superintendent shall comply with the provisions.

C. If there is no purchaser for any lot offered for sale, it shall be struck off to the municipality as the purchaser, and the governing body shall appropriate first from any reserve and any additional, similar fund and then from the general fund of the treasury the amount bid for such purpose, and shall order the treasurer to place the amount in a special fund for such improvement. The governing body, however, may direct the treasurer to pay into the special fund only the sum required to pay the installment then due or to become due upon the bonds issued for the assessment, and thereupon the municipality shall become obligated to pay first from any reserve and any additional, similar fund and then from the general fund the succeeding installments and interest on the bonds, as are payable by the assessments on the lot. Thereafter the lien of the assessment shall not be extinguished for nonpayment of general taxes or prior special assessments, and the annual installments of principal and interest of the assessment shall constitute a first lien on the respective lot, piece or parcel of land, coequal with the lien for general taxes. If the lien has not been extinguished prior to the property being stricken off to the state, such lien shall extinguish upon sale of the property pursuant to title 42, chapter 18, article 7 and the municipality shall share pro rata in the proceeds of such sale to the extent of the delinquent assessments.

D. The municipality may sell any lot so purchased after the expiration of the time for redemption at public or private sale. All sums received by the municipality from redemption of property purchased by it and from sale by it of property so purchased, less the amount paid into the special fund first from any reserve and any additional, similar fund and then from the general fund, shall be paid into the special fund for the payment of the bonds until the special fund is sufficient to pay all outstanding bonds. If the municipality has provided that the installment of principal and interest may be paid in partial payments prior to the time each of the installments becomes due, and the owner of the property against which the installment of principal and interest has become delinquent has paid in to the superintendent partial payments on the installments, that the owner of the property advertised for sale shall have the right to pay the balance due on the annual installments of principal and interest plus penalties and costs, and no sale shall be held on the parcel of land.

E. The superintendent shall record the date of the payment and mark the installment of principal or interest paid. In the event the owner does not pay the balance due on the installment of principal or interest, and the property is sold for the full amount of the assessment, the superintendent shall refund to the owner all money received from the owner by way of partial payments. END_STATUTE

Sec. 4. Section 48-609, Arizona Revised Statutes, is amended to read:

START_STATUTE48-609. Deficiency in collections

If there is a deficiency in the funds collected from the special assessments by reason of the inadequacy of the method of collection adopted by the municipality under section 48‑608, the municipality shall make good the deficiency, reimbursing itself from the funds collected from the installments when they are received. If such method has not been adopted and the deficiency has not been funded by monies from a reserve, the municipality may, but is not so obligated, make good the deficiency by a temporary loan first from any reserve and any additional, similar fund and then from some other the general fund. END_STATUTE