SB1402 - 492R

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

Section 1. Section 42-17001, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17001. Definitions

In this chapter, unless the context otherwise requires:

1. "Commission" means the property tax oversight commission established by section 42‑17002.

2. "Fire district" means a fire district established pursuant to title 48, chapter 5.

3. 2. "Political subdivision" means a county, charter county, city, charter city, town or community college district.

3. "Special taxing district" means:

(a) A fire district established pursuant to title 48, chapter 5.

(b) A county free library district established pursuant to title 48, chapter 24.

(d) A public health services district established pursuant to title 48, chapter 33. END_STATUTE

Sec. 2. Section 42-17003, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17003. Duties

A. The commission shall:

1. Establish procedures for deriving the information required by sections 15‑905.01, 15‑1461.01 and 42‑17107 and article 2 of this chapter.

2. Review the primary property tax levy of each political subdivision to determine violations of sections 15‑905.01, 15‑1461.01 and 42‑17107 and article 2 of this chapter.

3. Review the secondary property tax levy of each fire special taxing district to determine violations of section sections 48‑807, 48-3903, 48‑4023, 48-4023.01 and 48-5805.

4. Review the reports made by the department concerning valuation accuracy.

5. Hold hearings to determine the adequacy of compliance with articles 2 and 3 of this chapter.

6. Upon On the request of a county, city, town or community college district, hold hearings as prescribed in section 42‑17004 regarding the calculation of the maximum allowable primary property tax levy limits prescribed in section 42‑17051, subsection A.

B. If the commission determines that a political subdivision has violated section 15‑905.01, 15‑1461.01 or 42‑17107 or article 2 of this chapter, or that a fire special taxing district has violated section 48-807, 48-3903, 48-4023, 48-4023.01 or 48-5805, then on or before September 15 the commission shall notify the political subdivision or district, and the county board of supervisors, in writing, of:

1. The nature of the violation.

2. The necessary adjustment to:

(a) The primary property tax levy and tax rate to comply with section 15‑905.01, 15‑1461.01 or 42‑17107 or article 2 of this chapter.

(b) The secondary property tax levy and tax rate to comply with section 48-807, 48-3903, 48-4023, 48-4023.01 or 48-5805. END_STATUTE

Sec. 3. Section 42-17004, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17004. Hearing and appeals of commission findings

A. If the commission notifies a political subdivision of a violation of section 15‑905.01, 15‑1461.01 or 42‑17107 or article 2 of this chapter, or notifies a fire special taxing district of a violation of section 48-807, 48‑3903, 48-4023, 48-4023.01 or 48-5805 and the political subdivision or district disputes the commission's findings, then on or before October 1 the political subdivision or district may request a hearing before the commission to attempt to resolve the dispute.

B. A governing body of a county, city, town, community college district or fire special taxing district may request a hearing before the commission regarding the calculation of the maximum allowable primary or secondary property tax levy limits prescribed in section 42‑17051, or 48-807, 48-3903, 48-4023, 48-4023.01 or 48-5805. The commission may resolve any disputes.

C. The commission shall conduct the hearing as prescribed in title 41, chapter 6, article 10.

D. If the dispute is resolved at the hearing, the commission shall immediately notify the county board of supervisors of the proper primary or secondary tax levy and tax rate.

E. If a political subdivision or fire special taxing district continues to dispute the commission's findings after the hearing under this section, the political subdivision or district may:

1. Appeal the matter to tax court within thirty days after the commission renders the decision.

2. Levy primary or secondary property taxes in the amount that the political subdivision or district considers to be proper, pending the outcome of the appeal. END_STATUTE

Sec. 4. Section 42-17005, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17005. Adjustments to levy

A. If a governing body of a political subdivision or a fire special taxing district receives written notice of a violation of its allowable levy limit or truth in taxation limit under section 42‑17003, and has not appealed the commission's decision pursuant to section 42‑17004, the governing body shall correct its property tax levy and tax rate to properly reflect the allowable levy for the current year. The county board of supervisors shall make the necessary adjustments to the political subdivision's or district's property tax levy and tax rate to ensure that the corrected information is contained in the assessment and tax roll that is transmitted to the county treasurer pursuant to section 42‑18003. If the governing body receives the notice after it is too late to correct the levy in the current year, the difference between the amount actually levied and the allowable property tax levy shall be set aside in a special fund and used to reduce the property taxes levied in the following year.

B. If, after a hearing under section 42‑17004, the commission determines that errors were made in the calculation of the maximum allowable primary property tax levy limit pursuant to section 42‑17051, subsection A, or secondary property tax levy limit pursuant to section 48‑807, 48-3903, 48‑4023, 48-4023.01 or 48-5805, the commission shall have five days to notify the governing body of the county, city, town, community college district or fire special taxing district of the corrected levy limit. The commission shall also notify the county board of supervisors within five days. The corrected maximum allowable primary property tax levy shall be used in section 42‑17051, subsection A, paragraph 1 in determining the following year's levy limit. The corrected maximum allowable secondary property tax levy shall be used in section 48-807, 48-3903, 48-4023, 48-4023.01 or 48-5805 in determining the following year's levy limit.

C. If, after a hearing under section 42‑17004, it is impossible for the board of supervisors to correct a property tax levy in the current year, the political subdivision or fire special taxing district shall hold the difference between the amount the political subdivision or district actually levied and the allowable property tax levy prescribed by the commission in a separate fund to be used to reduce the property taxes levied by the political subdivision or district in the following year.

D. If the commission discovers that it has made an error in computing the levy limit after September 15, it shall notify the political subdivision's or fire special taxing district's governing body about the error. The error shall be corrected as prescribed in subsection A of this section. If the error results in the maximum allowable property tax levy being raised:

1. The corrected maximum allowable primary property tax levy shall be used in section 42‑17051, subsection A, paragraph 1 in determining the following year's levy limit.

2. The corrected maximum allowable secondary property tax levy shall be used for the purposes of section 48‑807, 48-3903, 48-4023, 48-4023.01 or 48-5805 in determining the following year's levy limit.

E. If, on appeal under section 42‑17004, subsection E, the ruling of the court provides for a property tax levy in an amount that is less than the amount levied by the political subdivision or fire special taxing district, the political subdivision or district shall hold the difference between the amounts in a separate fund to be used to reduce the property taxes levied by the political subdivision or district in the following year. END_STATUTE

Sec. 5. Section 42-17052, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17052. Values furnished by county assessor

A. On or before February 10 of the tax year, the county assessor shall transmit and certify to the property tax oversight commission and to the governing body of the political subdivision or district in the county the values that are required to compute the levy limit prescribed by sections 42‑17051, and 48-807, 48-3903, 48-4023, 48-4023.01 and 48-5805. For the purposes of this section, these values shall not be changed for the official calculation of levy limits and tax rates after February 10 without the approval of the property tax oversight commission. These values shall include:

1. The finally equalized valuation of all property, less estimated exemptions, appearing on the tax roll for the current tax year to be used to fix, levy and assess the political subdivision's taxes.

2. The value of the property on the personal property tax roll determined pursuant to section 42‑17053.

B. On or before February 10 of the tax year, the county assessor shall determine the limited property value for the current tax year of each school district in the county and shall transmit the values to the county school superintendent to assist the superintendent in computing equalization assistance for education as provided in section 15‑991.

C. On or before February 10 of the tax year, the county assessor shall transmit to the staff of the joint legislative budget committee and to the governor's office of strategic planning and budgeting the values that are required to compute the truth in taxation rates prescribed by section 41‑1276.

D. On or before February 10 of the tax year, the governing board of each fire district shall transmit to the property tax oversight commission the total assessed value of all property annexed by the district in the preceding calendar year. END_STATUTE

Sec. 6. Section 42-17054, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17054. Levy limit worksheet

A. When the county assessor transmits valuations under section 42‑17052, the assessor shall prepare and transmit a final levy limit worksheet to each city, town and community college district that imposes a primary property tax, to each fire special taxing district that imposes a secondary property tax and to the property tax oversight commission.

B. Each city, town, community college district and fire special taxing district shall notify the property tax oversight commission in writing within ten days of its agreement or disagreement with the final levy limit worksheet. END_STATUTE

Sec. 7. Section 42-17055, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17055. Public inspection of values used in computing levy limitation

A. On or before February 15 of the tax year, the governing body of each county, city, town, community college district and fire special taxing district shall make available for public inspection the values determined in each numbered paragraph of section 42‑17051, subsection A and in section sections 48‑807, 48-3903, 48-4023, 48-4023.01 and 48-5805.

B. The property tax oversight commission shall not alter the values that have been determined and made available for public inspection under this section unless the county assessor transmits and certifies new values to the governing body. The new values shall be made available for public inspection on the request of any individual. END_STATUTE

Sec. 8. Section 48-3903, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3903. Tax levies; limitation

A. The board of directors, after a county free library is established, shall may annually levy in the same manner and at the same time as other county secondary property taxes are levied a county free library district tax sufficient to establish the district and to insure ensure the payment of salaries, maintenance and upkeep and other necessary expenses of the county free library district.

B. The tax shall be levied and collected upon on all property in the county and upon on all property within incorporated cities and towns in the county.

C. Beginning in tax year 2010, the maximum amount of a levy under this section shall not exceed the amount of the levy in the preceding tax year, adjusted annually by a percentage equal to the rate of change in the levy limit between the current year and the preceding year for the county in which the district is located as determined pursuant to section 42-17051. The limitation under this subsection shall be increased each year to the maximum permissible limit regardless of whether the district actually levies that amount. For a district that is established from and after December 31, 2009, the limit shall be based on the initial levy of the district as approved by the board of directors pursuant to this section. END_STATUTE

Sec. 9. Section 48-4023, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4023. Property tax levy; limitation

A. If a majority of the qualified electors voting at an election held pursuant to section 48‑4021 approves approve a county jail district ad valorem property tax, on or before the third Monday in August each year the district shall certify to the county board of supervisors the amount of taxes to be levied for the taxable year on the taxable property in the district which, together with unexpended balances carried forward from the previous fiscal year and revenues from all other sources, is necessary to pay the maintenance and operation expenses of the district in carrying out the objects and purposes of this chapter.

B. The board of supervisors shall levy a secondary property tax on the taxable property in the district, at the same time and in the same manner as county taxes are levied, sufficient to provide the amount certified under subsection A of this section, but the tax rate is limited to, and shall not exceed in any event, the lesser of:

1. Twenty cents per one hundred dollars of assessed valuation, except as provided in subsection D E of this section.

2. Beginning in tax year 2010, the amount of the levy in the preceding tax year, adjusted annually by a percentage equal to the rate of change in the levy limit between the current year and the preceding year for the county in which the district is located as determined pursuant to section 42‑17051. The limitation under this paragraph shall be increased each year to the maximum permissible limit regardless of whether the district actually levies that amount. For a district that is established from and after December 31, 2009, the limit shall be based on the initial levy of the district as approved by the qualified electors pursuant to section 48-4021.

C. The tax revenues collected pursuant to this section shall be paid to the district treasurer and deposited in the county jail district general fund and used solely for the purposes for which they were collected.

C. D. The tax shall be levied on all of the taxable property in the district.

D. E. Notwithstanding subsection B of this section, for tax years 2006, 2007 and 2008, the district may certify and the board of supervisors shall levy a secondary property tax on the taxable property in the district in an amount equal to the amount levied in tax year 2005. END_STATUTE

Sec. 10. Section 48-4023.01, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4023.01. Property tax levy for juvenile detention facilities; limitation

A. If a majority of the qualified electors voting at an election held pursuant to section 48‑4021 approves approve an ad valorem property tax for the district that includes juvenile detention facilities or if a majority of the qualified electors voting at an election held pursuant to section 48‑4004 approves approve the inclusion of juvenile detention facilities in a district that was created by an election held pursuant to section 48‑4021, the district may impose an ad valorem property tax pursuant to this section. The district shall certify to the county board of supervisors on or before the third Monday in August of each year the amount of taxes to be levied in addition to the levy in section 48‑4023 for the taxable year on the taxable property in the district. The amount certified together with unexpended balances carried forward from the previous fiscal year and revenues from all other sources shall be the amount necessary to pay the maintenance and operation expenses of the district in carrying out this chapter in relation to juvenile detention facilities.

B. The board of supervisors may levy a secondary property tax on the taxable property in the district at the same time and in the same manner as county taxes are levied in an amount that is sufficient to provide the amount certified pursuant to subsection A of this section. The tax rate is limited to the lesser of:

1. Ten cents per one hundred dollars of assessed valuation, except as provided in subsection D E of this section.

C. The tax revenues collected pursuant to this section shall be paid to the district treasurer for deposit in the county jail district general fund and shall be used solely for juvenile detention facilities.

C. D. The tax shall be levied on all of the taxable property in the district.

Sec. 11. Section 48-5805, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5805. Transaction privilege tax; property tax; limitation

A. The board of directors of the district by resolution may levy, and if levied, the department of revenue shall collect, a transaction privilege tax pursuant to this section to be used and spent for the purposes described in section 48‑5804. The board shall set the rate of the tax at not more than two per cent of the tax rate that applies to each business in the district that is subject to taxation under title 42, chapter 5, article 1. The board shall levy the tax on each person engaging in the district in a business taxed under title 42, chapter 5, article 1.

B. Each month the state treasurer shall remit to the district treasurer the net revenues collected under subsection A of this section during the second preceding month. The district treasurer shall deposit the monies in the public health services district's accounts and shall account for all expenditures.

C. In lieu of a transaction privilege tax pursuant to subsection A of this section, the board by resolution may levy in the same manner and at the same time as other county secondary property taxes are levied a public health services district tax. The tax shall not exceed the lesser of:

1. Twenty-five cents per one hundred dollars of assessed valuation and shall be levied on all property in the county and on all property within incorporated cities and towns in the county.

D. The district shall deposit all monies collected pursuant to this subsection in a separate account and shall account for all expenditures. END_STATUTE