SB1337 - 502R

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

Section 1. Section 42-5031, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5031. Distribution of multipurpose facility revenues to district

A. Subject to the requirements of subsection D of this section, if a county stadium district is authorized by an election pursuant to section 48‑4237, subsection E, paragraph 5 to use the amounts paid to the district pursuant to subsection B of this section as permitted by law, then after delivery of a resolution of the district board of directors requesting payment, which resolution shall contain notice of the exercise of the option to begin payments provided for in this subsection, the state treasurer shall pay each month, beginning with the second calendar month after the optional payment commencement event contained in the resolution, from the amount designated as distribution base pursuant to section 42‑5029, subsection D, the amount determined under subsection B of this section to the district. Payments under this section shall continue until July 1, 2025 or until the date all authorized debt service payments are completed as provided by section 48-4203, subsection B, paragraph 3, whichever date is earlier.

B. The amount to be paid each month under subsection A of this section is one-half of the amount of state transaction privilege tax revenues received in the second preceding calendar month from all persons conducting business under any business classification under this article at a multipurpose facility site, or in the construction of a multipurpose facility, the public or district owned components of which cost at least two hundred million dollars to construct. In no event shall the amount to be paid each month under this section exceed the net new state transaction privilege tax revenues received from the multipurpose facility site as compared to the revenues received in the same month during the twelve months prior to the month in which the public vote pursuant to section 48‑4237 is held. The amount paid to the district shall not exceed the amount required to service the debts and obligations of the district and to meet the purposes set forth in section 48-4204, subsection B.

C. The primary component, as described in section 48‑4201, shall be constructed during the first phase of the project.

D. To qualify for payments under this section, the municipality in which the multipurpose facility site is located must either obtain voter approval for a local transaction privilege tax to pay costs associated with a multipurpose facility, or make a financial commitment by intergovernmental agreement between the municipality and the district to make direct payments to the district from any lawful source, including municipal transaction privilege taxes or to expend monies for land, infrastructure or other improvements directly related to the multipurpose facility or the multipurpose facility site, by June 30, 2012 and by the end of the date referred to in subsection A of this section each fiscal biennium thereafter, in an aggregate amount equal to the amount received by the district in that biennium pursuant to this section.

E. If the municipality in which the multipurpose facility site is located fails to satisfy the obligations of the municipality pursuant to subsection D of this section, then beginning six months after the date referred to in subsection A of this section, distributions otherwise payable to the municipality pursuant to section 42‑5029, subsection C shall be reduced by an amount equal to the excess of the amount received by the district pursuant to this section over the amount paid or expended by the municipality. The amount of the reduction shall be distributed to the district to satisfy the financial commitment of the municipality pursuant to subsection D of this section.

F. To comply with the requirements of this section, the county stadium district board of directors or any city or town that is part of the county stadium district shall supply the department with all requested information necessary to administer this section. END_STATUTE

Sec. 2. Section 48-4202, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4202. Formation of district

A. The board of supervisors of each county having a population of more than one million five hundred thousand persons according to the most recent United States decennial census or any county in which a major league baseball organization has established or seeks to establish a spring training operation may organize a countywide district to include both the incorporated and unincorporated areas of the county, if the board determines that the public convenience, necessity or welfare will be promoted by establishing the district.

B. Two or more municipalities in the same county may organize a district for multipurpose facilities if the governing bodies of the municipalities determine that the public convenience, necessity or welfare will be promoted by establishing the district. The district shall be comprised of the areas within the corporate boundaries of the municipalities. After formation, the boundaries of the district shall not be altered. A district may be established under this subsection in the same county in which a district is established under subsection A of this section. A district formed pursuant to this subsection shall be deemed a county stadium district for purposes of this chapter. Notwithstanding any other law, a district may not be organized under this subsection from and after October 31, 1999, except that a district may be organized under this subsection after October 31, 1999 if before that date the governing body of two or more of the municipalities identified the location of a multipurpose facility site and has voted with the purpose of forming a district for multipurpose facilities under this subsection.

C. The board of supervisors of any county in which a state supported university is established may organize a single university athletic facilities district if the board determines that the public convenience, necessity or welfare will be promoted by establishing the district. The district shall include only the area in the county within the contiguous exterior boundaries of real property owned by the Arizona board of regents and shall exclude any such real property subject to an existing ground lease or subject to an existing agreement granting a third party the right or option to a ground lease. After formation, the boundaries of the district shall be altered only as the Arizona board of regents acquires and disposes of real property. A district may be established under this subsection in the same county in which a district is established under subsection A of this section. A district formed pursuant to this subsection is deemed a county stadium district for the purposes of this chapter.

D. The county board of supervisors shall be the board of directors of a countywide district established under subsection A of this section.

E. The board of directors of a district established under subsection B of this section shall consist of members appointed to staggered four‑year terms of office as follows:

1. Five members who are appointed by the governor, at least three of whom must reside in the municipality in which the district is located and each of whom must have experience in commercial real estate, construction, redevelopment, real estate law, architecture, economic development or commercial or public finance. The governor may receive nominations for appointment from any interested organization or person. Members appointed by the governor serve at the pleasure of the governor.

2. Two members who are appointed by the president of the senate, at least one of whom must reside in the municipality in which the district is located. The members appointed by the president serve at the pleasure of the president.

3. Two members who are appointed by the speaker of the house of representatives, at least one of whom must reside in the municipality in which the district is located. The members appointed by the speaker serve at the pleasure of the speaker.

F. The board of directors of a district established under subsection C of this section shall be established pursuant to an intergovernmental agreement between the county and the Arizona board of regents.

G. The directors of any district are not eligible for compensation for their services but are eligible for reimbursement for their necessary expenses in attending to and traveling on district business.

H. The board of supervisors may pay the necessary costs incurred in connection with establishing a countywide district from any county monies available for that purpose. The municipalities may pay their proportionate share of the necessary costs incurred in establishing a district formed by two or more municipalities under subsection B of this section from any monies available for that purpose. The Arizona board of regents may pay the necessary costs incurred in connection with establishing a district under subsection C of this section from any monies available for that purpose.

I. Subject to limitations imposed by this chapter, by intergovernmental agreement and by the ordinance or resolution authorizing the formation of the district, the district is a tax levying public improvement district and a political taxing subdivision of this state and has all the powers, privileges and immunities granted generally to municipal corporations for the purposes of implementing this chapter, including:

1. Eminent domain, as provided by section 48‑4203, subsection A, paragraph 7. , and

2. Immunity of its property, bonds and interest on and transfer of its bonds from taxation.

3. Exemption from the provisions of article IX, section 7, Constitution of Arizona, as provided by article XIII, section 7, Constitution of Arizona. END_STATUTE

Sec. 3. Section 48-4204, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4204. Constructing and operating a stadium and other structures; regulating alcoholic beverages

A. From the taxes and surcharges levied pursuant to article 2 of this chapter for use with respect to major league baseball spring training, the district may acquire land and construct, finance, furnish, maintain, improve, operate, market and promote the use of existing or proposed major league baseball spring training facilities or stadiums and other structures, utilities, roads, parking areas or buildings necessary for full use of the training facilities or stadiums for sports and other purposes and do all things necessary or convenient to accomplish those purposes. The board shall require that any project undertaken by the district include financial participation from the county or municipality in which the project is located, from a private party or from any combination of these entities which that equals or exceeds one-half of the amount to be expended or distributed by the district. Capital improvement funds expended at any time after June 1, 1991 by a county, municipality or private party for a purpose authorized by this section may be deemed financial participation with respect to any project the district may undertake.

B. From the taxes and charges levied or identified pursuant to section 48‑4237 for use with respect to multipurpose facilities and from other monies lawfully available to the district, the district may acquire land and construct, finance, furnish, maintain, improve, operate, market and promote the use of multipurpose facilities and other structures, utilities, roads, parking areas or buildings necessary for full use of the multipurpose facilities and do all things necessary or convenient to accomplish those purposes. The allocation, budgeting and expenditure of monies of the district from any source are under the exclusive authority of the board of directors. Monies of the district from any source may be used only on projects that are entirely within the district boundaries or on improvements to parcels of real property that are located both within and outside the district boundaries. Public funds identified in section 48‑4237, including funds distributed pursuant to section 42‑5031, may only be used for the components for a multipurpose facility which that are owned by the district or which that are publicly owned, except that:

1. An annual amount of up to fifteen per cent of the district's administrative operations budget may be used each year for community development projects to further the community and education components of the district's plan for capital improvements and investment.

2. Monies paid to the district pursuant to section 42-5031 may only be used for the following purposes until a notice to proceed is issued for a hotel and convention center located on the multipurpose facility site:

1. (a) Debt service for bonds issued by the district before January 1, 2009.

2. (b) Contractual obligations incurred by the district before June 1, 2009.

3. (c) Fiduciary, reasonable legal and administrative expenses of the district.

4. (d) The design and construction of the hotel and convention center located on the multipurpose facility site.

C. A district established pursuant to section 48-4202, subsection B may not use monies distributed pursuant to section 42-5031 for the salaries or compensation of any employee of the municipality in which the district is located.

D. Pursuant to an intergovernmental agreement with the Arizona board of regents, from the revenues collected from assessments pursuant to section 48‑4235 for use with respect to Arizona board of regents owned intercollegiate athletic facilities, the district may construct, reconstruct, finance, furnish, maintain and improve existing intercollegiate athletic facilities located on Arizona board of regents' property, including utilities, roads, parking areas or buildings necessary for full use of the athletic facilities.

E. Title 34 applies to the district, except that regardless of the funding source for design and construction of facilities and structures the district may establish alternative systems and procedures, including the use of the design-build method of construction or the use of qualifications-based selection of contractors with experience in stadium design or construction, to expedite the design and construction or reconstruction of any of its facilities or structures or any facilities or structures leased to it or used by it pursuant to an intergovernmental agreement. For the purposes of this subsection:

1. "Design-build" means a process of entering into and managing a contract between the district and another party in which the other party agrees to both design and build a structure, a facility or other items specified in the contract.

2. "Qualifications-based selection" means a process of entering into and managing a contract between the district and another party in which the other party is selected by the district on the basis of the party's qualifications and experience in designing or constructing facilities, structures or other items similar to those the district is authorized to construct or lease. The other party may be selected by direct selection or by public competition.

F. For the purposes of financing, designing, constructing, reconstructing or operating facilities or structures, the district is not the agent of any municipality, this state or any agency or instrumentality of this state participating in the funding of such facilities or structures.

G. Subject to the requirements of title 4, the board of directors may permit and regulate the sale, use and consumption of alcoholic beverages at events held on property acquired, leased or subleased under this article. END_STATUTE

Sec. 4. Section 48-4231.01, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4231.01. Financial and performance audits of districts owning multipurpose facilities; appearance before joint committee on capital review

A. Beginning in 2010 and every three years thereafter, the auditor general shall contract with an independent auditor to conduct a performance audit as defined in section 41-1278, including a financial audit, of each district organized under section 48-4202, subsection B. The independent auditor must have national status with expertise in evaluating public construction, ownership and management of capital improvements that include hospitality, convention and sports venue facilities. The audit must be completed within one hundred twenty days after the end of the fiscal year.

B. The audit shall include consideration of:

1. Capital costs, including debt service, of the multipurpose facility and other assets of the district.

2. The level of the district's indebtedness, the amount of principal, interest and other debt service expenses paid in the preceding fiscal year and the remaining term to maturity with respect to each outstanding bond issue.

3. Operation and maintenance costs of the multipurpose facility and other assets of the district.

4. The district's overall expenditures in the preceding fiscal year, including:

(a) The level of expenses for administration, planning, travel and entertainment.

(b) The success of those expenditures in supporting and achieving the district's purposes.

5. A description of and the amount of municipal payments pursuant to section 42-5031, subsection D during the preceding fiscal year and the cumulative amount of those payments through the end of the preceding fiscal year.

6. The public use of each component of the multipurpose facility.

7. Revenues derived from each component of the multipurpose facility and other revenues of the district by source.

8. District projects that are currently under construction and that are included in the district's plans for capital improvements and investment.

C. The audit shall make findings and recommendations regarding the construction, financing, operation and maintenance of each component of the multipurpose facility, including whether the facility exceeds, meets or fails to meet nationally recognized design and performance standards.

D. The district and the board of directors shall cooperate with and submit to the auditor general and the auditor contracted to conduct the audit information necessary to conduct and complete the audit in a timely manner.

E. Within forty-five days after the audit is released, the board of directors shall:

1. Hold a public hearing on the audit's findings and recommendations and allow any person to make or submit oral or written comments on the audit.

2. By majority vote adopt a public response agreeing, agreeing with reservations or disagreeing with each finding and recommendation in the audit.

F. The auditor general shall distribute copies of the audit and the board of director's response to:

1. The mayor and governing body of the municipality in which the district is located.

2. The governor.

3. The president of the senate and the speaker of the house of representatives.

4. The department of revenue and the state treasurer.

5. The secretary of state.

6. Any other person who requests a copy of the audit.

G. The cost incurred by the auditor general in contracting with independent auditors under this section is an operating expense of the district and shall be paid from revenues payable to the district pursuant to section 42-5031. The auditor general shall deposit the payments in the audit services revolving fund established by section 41-1279.06.

H. At the request of the chairperson of the Joint committee on capital review, the executive director or a representative of the board of directors shall appear before the joint committee on capital review to report on any aspect At least once each calendar year the executive director, chairperson of the board of directors or other officer designated by the board of directors shall report to the joint committee on capital review and to the joint legislative audit committee on all aspects of the district's operation, including the activities and financial performance of the district during the previous fiscal year, the district's plans for capital improvements and investment and the district's response to the audit conducted under this section. END_STATUTE

Sec. 5. Terms of office of incumbent members of board of directors

A. Notwithstanding section 48-4202, subsection E, Arizona Revised Statutes, as amended by this act, by September 30, 2012 the incumbent members of a board of directors of a county stadium district established under section 48-4202, subsection B, Arizona Revised Statutes, shall assign themselves by lot to staggered terms of office as follows:

1. If appointed by the governor pursuant to section 48-4202, subsection E, paragraph 1, Arizona Revised Statutes, as amended by this act:

(a) Two members shall be assigned to terms ending January 1, 2014.

(b) Three members shall be assigned to terms ending January 1, 2015.

2. If appointed by the president of the senate pursuant to section 48‑4202, subsection E, paragraph 2, Arizona Revised Statutes, as amended by this act:

(a) One member shall be assigned to a term ending January 1, 2014.

(b) One member shall be assigned to a term ending January 1, 2015.

3. If appointed by the speaker of the house of representatives pursuant to section 48-4202, subsection E, paragraph 3, Arizona Revised Statutes, as amended by this act:

(a) One member shall be assigned to a term ending January 1, 2014.

(b) One member shall be assigned to a term ending January 1, 2015.

B. On the expiration of the terms of office prescribed by this section, subsequent members of the board of directors shall be appointed to four-year terms of office as prescribed by section 48-4202, subsection E, Arizona Revised Statutes, as amended by this act.