SB1312 - 521R

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

Section 1. Section 48-253, Arizona Revised Statutes, is amended to read:

START_STATUTE48-253. District audits and financial reviews

A. Each district that is organized under this title, that is not exempt under subsection G or H of this section and that is required to make an annual report under this article shall have its reports audited in accordance with generally accepted government auditing standards and the following:

1. Audits required by this section shall be performed annually for districts whose budgets are one million dollars or more. Districts whose budgets are one hundred thousand dollars or more but less than one million dollars shall have a financial review performed annually. Districts whose budgets are more than fifty thousand dollars and less than one hundred thousand dollars shall have a financial review performed at least biennially. Districts whose budgets are fifty thousand dollars or less shall have a financial review performed at the request of the county board of supervisors or on receipt of a request for a financial review that is signed by at least ten residents of that district. A district shall not be required to perform a financial review more than once per fiscal year.

2. A district may select an outside auditor who is a certified public accountant or a representative an agent of a certified public accountant who is selected by the board of supervisors and who is trained as an auditor.

3. A district may advertise and use competitive bidding practices to select an agent to perform the audits or financial reviews required by this section.

B. Each district that submits a financial statement for the preceding fiscal year that has been attested to by an independent certified public accountant pursuant to section 48‑251 is deemed to have complied with this section by submitting a copy of the financial statement to the county treasurer.

C. Each district shall submit a copy of the completed audit or financial review to the county treasurer and the board of supervisors within two hundred forty days after the close of the district's fiscal year or within one hundred eighty days after a request for a financial review is received by the district pursuant to subsection A, paragraph 1 of this section.

D. If a district fails to submit an audit or financial review as required by this section, any taxpayer residing in the district, the board of supervisors or the county treasurer may petition the superior court in a county where the district is organized to show cause why the audit or financial review has not been submitted. On a failure to show cause the court shall order the district to submit the audit or financial review within ten days after the judgment is entered. Except for a district organized pursuant to chapter 5, article 3 of this title, on complaint made to the county attorney, the county attorney may investigate any claimed failure to comply with this section, report publicly on the investigation's findings and take any enforcement action deemed appropriate by the county attorney.

E. If the court enters a judgment against the district under this section, the court may award the taxpayer, board of supervisors or county treasurer reasonable attorney fees and costs associated with bringing the action.

F. For districts organized under chapter 19 of this title, a district with an annual budget of at least five million dollars shall have an audit performed annually and a district with an annual budget of at least one million dollars but less than five million dollars shall have an audit performed every five years and a financial review performed each year an audit is not performed. A district with an annual budget of at least one hundred thousand dollars but less than one million dollars shall have an audit performed every ten years and a financial review performed each year an audit is not performed.

G. For districts organized under chapter 5 of this title and except for districts organized under chapter 5, article 3 of this title, a district that receives five hundred thousand dollars or more in total revenues shall perform an annual audit. For the purposes of this subsection, revenues include monies generated by tax levies, monies received through appropriations, grants and other federal and state sources and monies received from services or other private sources, including ambulance and similar services. If a district's total budgeted revenues in a fiscal year are less than five hundred thousand dollars and the district receives total actual revenues in a fiscal year of five hundred thousand dollars or more, the district shall have an audit performed for that preceding fiscal year as if the audit had originally been required by this section. Districts whose total annual revenues are one hundred thousand dollars or more but less than five hundred thousand dollars shall have a financial review performed annually. Districts whose total annual revenues are more than fifty thousand dollars and less than one hundred thousand dollars shall have a financial review performed at least biennially. Districts whose total annual revenues are fifty thousand dollars or less shall have a financial review performed at the request of the county board of supervisors or on receipt of a request for a financial review that is signed by at least ten residents of that district. A district shall not be required to perform a financial review more than once per fiscal year. All financial reviews and audits prescribed by this section must be conducted according to generally accepted government auditing standards.

H. Districts organized under chapters 4, 6, 17, 22, 27 and 28 of this title are exempt from the requirements of this section. END_STATUTE

Sec. 2. Section 48-805, Arizona Revised Statutes, is amended to read:

START_STATUTE48-805. Fire district; powers and duties

A. A fire district, through its board, shall:

1. Hold public meetings at least once each calendar month unless a board consists of three members and the fire district levies less than five hundred thousand dollars annually then the board shall meet in July and at least every two months thereafter. A board for a district organized pursuant to article 3 of this chapter shall hold public meetings at least every two months.

2. Determine the compensation payable to district personnel.

3. Require probationary employees in a paid sworn firefighter position, a reserve firefighter position or a volunteer firefighter position to submit a full set of fingerprints to the fire district. The fire district shall submit the fingerprints to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

B. A fire district, through its board, may:

1. Employ any personnel and provide services deemed necessary for fire protection, for preservation of life and for carrying out its other powers and duties, including providing ambulance transportation services when authorized to do so pursuant to title 36, chapter 21.1, article 2, but a member of a district board shall not be an employee of the district. The merger of two or more fire districts pursuant to section 48‑820 or the consolidation with one or more fire districts pursuant to section 48‑822 shall not expand the boundaries of an existing certificate of necessity unless authorized pursuant to title 36, chapter 21.1, article 2.

2. Construct, purchase, lease, lease‑purchase or otherwise acquire the following or any interest therein and, in connection with the construction or other acquisition, purchase, lease, lease‑purchase or grant a lien on any or all of its present or future property, including:

(a) Apparatus, water and rescue equipment, including ambulances and equipment related to any of the foregoing.

(b) Land, buildings, equipment and furnishings to house equipment and personnel necessary or appropriate to carry out its purposes.

3. Finance the acquisition of property as provided in this section and costs incurred in connection with the issuance of bonds as provided in section 48‑806. Bonds shall not be issued without the consent of a majority of the electors of the district voting at an election held for that purpose. For the purposes of an election held under this paragraph, all persons who are eligible to vote in fire district elections under section 48‑802 are eligible to vote.

4. Enforce the fire code adopted by the district, if any, and assist the state fire marshal in the enforcement of fire protection standards of this state within the fire district including enforcement of a nationally recognized fire code if expressly authorized by the state fire marshal.

5. After the approval of the qualified electors of the fire district voting at a regular district election or at a special election called for that purpose by the district board, as appropriate, or at any election held in the county that encompasses the fire district, adopt the __________ fire code, which is a nationally recognized fire code approved by the state fire marshal. The words appearing on the ballots shall be "should __________ fire district adopt the ___________ fire code, which is a nationally recognized fire code approved by the state fire marshal‑‑yes", "should _____________ fire district adopt the ____________ fire code, which is a nationally recognized fire code approved by the state fire marshal‑‑no". The code shall be enforced by the county attorney in the same manner as any other law or ordinance of the county. Any inspection or enforcement costs are the responsibility of the fire district involved. The district shall keep the code on file which shall be open to public inspection for a period of thirty days before any election for the purpose of adopting a fire code. Copies of the order of election shall be posted in three public places in the district at least twenty days before the date of the election, and if a newspaper is published in the county having a general circulation in the district, the order shall be published in the newspaper at least once a week during each of the three calendar weeks preceding the calendar week of the election.

6. Amend or revise the adopted fire code, including replacement of the adopted fire code with an alternative nationally recognized fire code, with the approval of the state fire marshal and after a hearing held pursuant to posted and published notice as prescribed by section 48‑805.02, subsection A. The district shall keep three copies of the adopted code, amendments and revisions on file for public inspection.

7. Enter into an agreement procuring the services of an organized private fire protection company or a fire department of a neighboring city, town, district or settlement without impairing the fire district's powers.

8. Contract with a city or town for fire protection services for all or part of the city or town area until the city or town elects to provide regular fire department services to the area.

9. Retain a certified public accountant to perform an annual audit of district books.

10. Retain private legal counsel.

11. Accept gifts, contributions, bequests and grants and comply with any requirements of those gifts, contributions, bequests and grants that are not inconsistent with this article.

12. Appropriate and expend annually monies as are necessary for the purpose of fire districts belonging to and paying dues in the Arizona fire district association and other professional affiliations or entities.

13. Adopt resolutions establishing fee schedules both within and outside of the jurisdictional boundaries of the district for providing fire protection services and services for the preservation of life, including emergency fire and emergency medical services, plan reviews, standby charges, fire cause determination, users' fees or facilities benefit assessments or any other fee schedule that may be required.

14. With the approval of two of the three members of a three‑member board, four of the five members of a five‑member board or five of the seven members of a seven-member board, change the district's name and on so doing shall give written notice to the board of supervisors of the change. The governing board of a fire district may place a question on the general election ballot as to whether the fire district shall change its name.

15. Require all employees to submit a full set of fingerprints as prescribed by subsection A, paragraph 3 of this section.

16. Enter into intergovernmental agreements or contracts as follows:

(a) Enter into an intergovernmental agreement with another political subdivision for technical or administrative services or to provide fire services to the property owned by the political subdivision, including property that is outside the district boundary.

(b) Enter into a contract with individuals to provide technical or administrative services.

(c) Enter into a contract with individuals to provide fire protection services or emergency medical services, or both, to the extent not regulated by title 36, chapter 21.1 to property owned by the individual located outside the district boundaries if the individual's property is not located in a county island as defined in section 11‑251.12 and at least one of the following apply:

(i) The existing fire service provider where the individual's property is located has issued a notice to the individual that the provider plans to discontinue service.

(ii) Fire service is not available to the individual's property.

(iii) Fire service is offered pursuant to a contract or subscription and the individual has not obtained service for a period of twenty‑four months before the date of the contract with the district.

(d) Enter into a contract with individuals to provide fire services to property owned by the individual located outside the district boundaries, where the individual's property is located in a county island as defined in section 11‑251.12, if both of the following apply:

(i) The existing fire service provider where the individual's property is located has issued a notice to the residents of the county island and the individual that the provider plans to discontinue or substantially reduce service.

(ii) The district offers contracts to all residents and property owners of the county island who will be affected by the discontinuance or substantial reduction in service by the current fire service provider.

(e) For the purposes of subdivision (a), (b), (c) or (d) of this paragraph, a district may contract with any public or private fire service provider to provide some or all of the contractual services the district is contracting to deliver.

(f) Any contract entered into pursuant to subdivisions (b), (c) and (d) of this paragraph shall include a provision setting forth the cost of service and performance criteria.

17. Sell or otherwise dispose of any real property, facilities or equipment if the district board determines the real property, facilities or equipment to be surplus.

C. A fire district may not administratively add or annex additional property or delete property or otherwise modify its boundaries except in a merger or consolidation pursuant to this chapter or in a boundary change made pursuant to section 48‑262. This subsection does not apply to a district organized pursuant to article 3 of this chapter.

D. The chairman and clerk of the district board or their respective designees, as applicable, shall draw warrants on the county treasurer for money required to operate the district in accordance with the budget and, as so drawn, the warrants shall be sufficient to authorize the county treasurer to pay from the fire district fund.

E. For any fire district that designates one or more board members to have access to the financial books and records of the district, those board members are authorized by law to have full access to those financial books and records.

F. The district board may assess and levy a secondary property tax pursuant to this article to pay for the costs of fire protection services or emergency medical services except for services regulated pursuant to title 36, chapter 21.1.

G. The county attorney may advise and represent the district if in the county attorney's judgment the advice and representation are appropriate and not in conflict with the county attorney's duties under section 11‑532. If the county attorney is unable to advise and represent the district due to a conflict of interest, the district may retain private legal counsel or may request the attorney general to represent it, or both. END_STATUTE

Sec. 3. Section 48-805.02, Arizona Revised Statutes, is amended to read:

START_STATUTE48-805.02. Fire district annual budget; levy; requirements

A. A fire district shall prepare an annual budget that contains detailed estimated expenditures for each fiscal year and that clearly shows salaries payable to employees of the district. The budget summary shall be posted in three public places and a complete copy of the budget shall be published on the district's official website for twenty days before a public hearing at a meeting called by the board to adopt the budget. Copies of the budget shall also be available to members of the public on written request to the district. Following the public hearing, the district board shall adopt a budget. A complete copy of the adopted budget shall be posted in a prominent location on the district's official website within seven business days after final adoption and shall be retained on the website for at least sixty months. For any fire district that does not maintain an official website, the fire district may comply with this subsection by posting on a website of an association of fire districts in this state.

B. Not more than ten days after the organization of a fire district and not later than August 1 of each year thereafter, the chairman of the district board shall submit to the county board of supervisors a budget estimate that contains certifications by item and that specifies the amount of money required for the maintenance and operation of the district for the ensuing year.

C. Based on the budget submitted by the district, the board of supervisors shall levy the tax as prescribed in section 48‑807, subsection E.

D. Every budget adopted by a fire district shall include the following:

1. A certification by the chairman and clerk of the district board as to both of the following:

(a) That the district has not incurred any debt or liability in excess of taxes levied and to be collected and the money actually available and unencumbered at that time in the district general fund, except for those liabilities as prescribed in section 48‑805, subsection B, paragraph 2 and sections 48‑806 and 48‑807.

(b) That the district complies with subsection F of this section.

2. For each of the items listed in the budget summary approved pursuant to subsection A of this section, the district shall estimate the revenue or expense for the next two fiscal years. Estimates shall be based on the average increase or decrease of the item for the previous two fiscal years unless more certain information is available to the district. Estimates shall include any applicable levy or rate limitations.

3. If a district's total estimate of expenses exceeds its total estimate of revenues for any fiscal year, the district shall undertake a study of merger, consolidation or joint operating alternatives. The study required by this paragraph shall be presented to the fire district board in a special public meeting called for the sole purpose of evaluating the study. The study shall include an identification of districts available for merger, consolidation or joint operations, an analysis of the level of service and cost of service that may be provided to the residents of a merged, consolidated or jointly operated district as compared to the level and cost of service to the residents of the districts without any merger, consolidation or joint operations.

E. For any district that amends its budget after its initial adoption, the district board shall hold at least two hearings on the revision of the budget and the revised budget must be considered and adopted in a special meeting that is called for the adoption of the revised budget. The special meeting must be held one week after the consideration of the revision of the budget at a regularly scheduled meeting of the board of directors of the district. This subsection does not apply to a district organized pursuant to article 3 of this chapter.

F. When a fire district has adopted a budget and the board of supervisors has levied a fire district tax as provided in subsection C of this section and the district has insufficient monies in its general fund with the county treasurer to operate the district, the chairman of the fire district board of directors, on or after August 1 of each year, may draw warrants for the purposes prescribed in section 48‑805 on the county treasurer, payable on November 1 of that year or on April 1 of the succeeding year. The aggregate amounts of the warrants may not exceed ninety per cent percent of the taxes levied by the county for the district's current fiscal year. If the treasurer cannot pay a warrant for lack of monies in the fire district general fund, the warrant shall be endorsed, be registered, bear interest and be redeemed as provided by law for county warrants, except that the warrants are payable only from the fire district general fund.

G. Any audit, or report or review of a fire district made pursuant to section 48‑253 shall be presented in person to the district board by the auditor and telephonically or in another live electronic format during a public meeting of the board or, as directed by the board, in person at a public meeting of the board. The district board shall accept take formal action at the public meeting to review and receive the audit, or report or review. The audit, or report or review shall include a certification an attestation by the auditor of the district as to both all of the following:

1. That the district has not incurred any debt or liability in excess of taxes levied and to be collected and the monies actually available and unencumbered at that time in the district general fund except for those liabilities as prescribed in section 48‑805, subsection B, paragraph 2 and sections 48‑806 and 48‑807.

2. That the district complies with subsection F of this section.

3. Whether the audit, report or review disclosed any information contrary to the certification made as prescribed by subsection D, paragraph 1 of this section. END_STATUTE

Sec. 4. Section 48-807, Arizona Revised Statutes, is amended to read:

START_STATUTE48-807. County fire district assistance tax; annual budget; override

A. The board of supervisors of a county shall levy, at the time of levying other property taxes, a county fire district assistance tax on the taxable property in the county of not more than ten cents per one hundred dollars of assessed valuation. The tax levy provided for in this subsection shall be a levy of secondary property taxes and shall not be subject to title 42, chapter 17, article 2. The county treasurer shall pay to each fire district, including a fire district formed pursuant to section 48‑851, in the county from the proceeds of the tax an amount equal to twenty per cent percent of the property tax levy adopted by the district for the fiscal year in which the tax will be levied, except that:

1. The amount of assistance from the county to a fire district shall be reduced as follows:

(a) Through the fiscal year that ends June 30, 2012, by the dollar amount that the fire district receives from the fire district assistance tax that exceeds three hundred thousand dollars from and after June 30 of each fiscal year.

(b) Beginning with the fiscal year that starts July 1, 2012, by the dollar amount that the fire district receives from the fire district assistance tax that exceeds four hundred thousand dollars from and after June 30 of each fiscal year, without regard to whether the district is located in more than one county.

(c) Except as provided in paragraph 2 of this subsection, if the total amount to be paid to all districts in the county under this paragraph exceeds the amount to be raised by the levy of ten cents per one hundred dollars assessed valuation, then the county treasurer shall pay an amount less than twenty per cent percent of the property tax levy of each district. The amount to be paid by the county treasurer to each district shall be determined by multiplying the proceeds of the county fire district assistance tax against the proportion that twenty per cent percent of the property tax levy of each district bears to the total of twenty per cent percent of the property tax levies of all fire districts in the county.

2. For fiscal years beginning from and after July 1, 1992, the amount of assistance from the county to a fire district shall not be less than the assistance provided from and after June 30, 1991 through June 30, 1992, if, for the fiscal year in which the tax will be levied, the district levies a tax, in addition to any tax levied under section 48‑806, of three dollars per one hundred dollars of assessed valuation and the assessed valuation is at least ninety per cent percent of the assessed valuation for the 1991 tax year. This paragraph does not apply to fire districts subject to paragraph 1, subdivision (a) or (b) of this subsection.

B. For the purpose of subsection A of this section, the property tax levy of the fire district shall include in lieu contributions pursuant to chapter 1, article 8 of this title but shall not include property tax levies to be applied to the payment of principal and interest on bonds issued pursuant to section 48‑806.

C. Beginning with the fiscal year that starts July 1, 2012, a consolidated district shall not receive more than four hundred thousand dollars in fire district assistance tax monies, without regard to whether the consolidated district is located in more than one county.

D. Beginning with the fiscal year that starts July 1, 2012, if two or more fire districts merge to form a consolidated district and the total of the amounts received by each fire district from the fire district assistance tax is less than four hundred thousand dollars, the consolidated district may continue to receive monies until its receipts total four hundred thousand dollars, as prescribed in subsection A of this section, without regard to whether the consolidated district is located in more than one county.

E. The board, based on the budget submitted by the district, shall levy, in addition to any tax levied as provided in section 48‑806, a tax not to exceed three dollars twenty-five cents per one hundred dollars of assessed valuation, or the amount of the levy in the preceding tax year multiplied by 1.08, whichever levy is less, and minus any amounts required to reduce the levy pursuant to subsection H of this section, against all property situated within the district boundaries and appearing on the last assessment roll. The levy shall be made and the taxes collected in the manner, at the time and by the officers provided by law for the collection of general county taxes.

F. The qualified electors of the district, voting in an election as prescribed by subsection G of this section, may authorize the board to levy a tax exceeding the limits prescribed by subsection E of this section under one, but not both, of the following options:

1. The electors may authorize a permanent override allowing annual levies without reference to the levy in the preceding tax year, but remaining subject to the tax rate limit of three dollars twenty-five cents per one hundred dollars of assessed valuation. An election for the purposes of this paragraph must be held at a regularly scheduled general election held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d) F.

2. If the net assessed valuation of all property in the district declines by a combined total of twenty per cent percent or more over two consecutive valuation years, the electors voting at the next regularly scheduled general election held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d) F may authorize an override for five consecutive tax years allowing annual levies that are exempt from the tax rate limit of three dollars twenty-five cents, but subject to an annual levy limit of the amount of the levy in the preceding tax year multiplied by 1.05. After the fifth tax year, the district is again subject to the limits prescribed by subsection E of this section, computed by multiplying the levy beginning in the year preceding the override by 1.08 for each year through the current tax year.

G. The call for an override election held for the purposes of subsection F of this section must state:

1. The purpose for requesting additional secondary property tax revenue for the district.

2. If the voters approve the levy:

(a) The maximum dollar amount of secondary property tax that may be collected in the first year compared to the existing maximum secondary property tax levy prescribed in subsection E of this section.

(b) The estimated secondary property tax rate to fund the proposed levy under subdivision (a) of this paragraph in the first tax year compared to the secondary property tax rate levied in the current year.

H. If the district annexes additional territory, the limit under subsection E of this section shall be adjusted by applying the district's tax rate to the assessed valuation of the annexed property in the preceding tax year. If districts are merged or consolidated under this chapter, the limitation under this subsection in the first year after the districts are merged or consolidated is the total of the levies of the merged or consolidated districts in the preceding tax year multiplied by 1.08 or the amount of the levies allowed by the maximum rate prescribed by subsection E of this section, whichever is less.

I. The district shall maintain any property tax revenues collected in excess of the sum of the amounts of taxes collectible pursuant to section 42‑17054 and the allowable levy determined under subsection E of this section in a separate fund and used to reduce the property tax levy in the following tax year.

J. The levy limit under this section is considered to be increased each year to the maximum limit permissible under subsection E of this section regardless of whether the district actually levies taxes up to the maximum permissible amount in that year.

K. The county treasurer shall keep the money received from taxes levied pursuant to subsection E of this section in a separate fund known as the "fire district general fund" of the district for which collected. Any surplus remaining in the fire district general fund at the end of the fiscal year shall be credited to the fire district general fund of the district for which it was collected for the succeeding fiscal year and after subtraction of accounts payable and encumbrances, shall be used to reduce the property tax levy in the following tax year.

L. A fire district may maintain separate accounts with a financial institution that is authorized to do business in this state for the purpose of operating a payroll account or for holding special revenues or ambulance revenues, or both, as necessary to fulfill the district's fiduciary responsibilities.

M. A fire district, through the county treasurer, shall establish the relevant governmental funds necessary for the proper management and fiscal accountability of district monies from property taxes, grants, contributions and donations, as defined by the government accounting standards board. Unless the monies received are legally restricted by contract, agreement or law, those monies may be transferred between fund accounts according to the original or amended budget of the fire district.

N. A fire district shall reconcile all balance sheet accounts for accounts for each calendar month of the fiscal year within thirty days after the end of that calendar month. The fire district board shall review the reconciled balance sheet accounts monthly, except that for a fire district that is governed by a three-member board, the board may review the reconciled balance sheet accounts every two months.

O. A fire district shall produce monthly financial reports to include a register of checks, warrants and deposits, a statement of financial activities and a statement of net assets for each calendar month. A fire district shall produce a cash flow projection report for each fiscal year. The cash flow projection report shall be updated monthly with the actual revenues and expenditures from the preceding month. Each month, the fire district board shall review the financial reports, the updated cash flow projections report and all month-end fund statements and reports of the preceding month to include those reports provided by the county treasurer and each of the financial institutions in which the district maintains an account, except that for a fire district that is governed by a three‑member board, the board may review the reports and statements prescribed by this subsection every two months. Any financial report or cash flow projection report that would indicate that the district is likely to violate section 48‑805.02, subsection D, paragraph 1 or that would indicate an adverse impact on the ongoing operations or liquidity of the district shall be reported by the fire district board chairman in writing and delivered by certified mail to the county treasurer and the county board of supervisors within ten days after the discovery.

P. Notwithstanding section 11‑605, a fire district may register warrants only if separate accounts are maintained by the county treasurer for each governmental fund of a fire district. Warrants may only be registered on the maintenance and operation account, the unrestricted capital outlay account and the special revenue account, and only if the total cash balance of all three accounts is insufficient to pay the warrants and after any revolving line of credit has been expended as prescribed in section 11‑635.

Q. When a fire district has adopted a budget and the board of supervisors has levied a fire district tax as provided in subsection E of this section and the district has insufficient money in its general fund with the county treasurer to operate the district, the chairman of the board, on or after August 1 of each year, may draw warrants for the purposes prescribed in section 48‑805 on the county treasurer, payable on November 1 of that year or on April 1 of the succeeding year. The aggregate amounts of the warrants may not exceed ninety per cent percent of the taxes levied by the county for the district's current fiscal year. If the treasurer cannot pay a warrant for lack of funds in the fire district general fund, the warrant shall be endorsed, be registered, bear interest and be redeemed as provided by law for county warrants, except that the warrants are payable only from the fire district general fund. END_STATUTE

Sec. 5. Section 48-820, Arizona Revised Statutes, is amended to read:

START_STATUTE48-820. Election to merge fire districts; notice; hearing; approval; joint meeting; merged district board

A. Except as provided in subsection K of this section, the board of supervisors shall make an order calling for an election to decide whether to merge fire districts when a resolution for merger from each district is submitted to the board. The board of supervisors shall not make an order calling for an election to merge fire districts more frequently than once every two years. Whether or not the districts are merged, the fire districts shall reimburse the counties for the expenses of the election, including the cost of mailing any notices required pursuant to this section. If the proposed district is located in more than one county, the resolutions shall be submitted to the board of supervisors of the county in which the majority of the assessed valuation of the proposed district is located. The words appearing on the ballot shall be "(insert fire districts' names) merge as a fire district‑‑yes" and "(insert fire districts' names) merge as fire district‑‑no."

B. Except for a district organized pursuant to article 3 of this chapter, at least six days but not more than twenty days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election in each of the affected districts is in favor of merging the fire districts, the board shall enter that fact on its minutes.

C. For a district organized pursuant to article 3 of this chapter, within fourteen days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election in each of the affected districts is in favor of merging the fire districts, the board shall enter the fact on its minutes.

D. Except as prescribed in subsection E of this section, two or more fire districts may merge if the governing body of each affected fire district, by a majority vote of the members of each governing body, adopts a resolution declaring that a merger be considered and a public hearing be held to determine if a merger would be in the best interests of the district and would promote public health, comfort, convenience, necessity or welfare. After each district adopts such a resolution, the governing body by first class mail shall send written notice of the resolution, its purpose and notice of the day, hour and place of a hearing on the proposed merger to each owner of taxable property within the boundaries of the district. The notice shall contain the name and a general description of the boundaries of each district proposed to be merged and a detailed, accurate map of the area to be included in the merger. The notice also shall contain an estimate of the assessed value of the merged district, the estimated change in property tax liability for a typical resident of the proposed merged district and a list of the benefits and injuries that may result from the proposed merged district. No new territory may be included as a result of the merger.

E. A noncontiguous county island fire district formed pursuant to section 48‑851 shall not merge with a fire district formed pursuant to section 48‑261.

F. The clerk of the governing body shall post notice in at least three conspicuous public places in the district and shall also publish notice twice in a daily newspaper of general circulation in the county in which the district is located, at least ten days before the public hearing. The clerk of each governing body affected by the proposed merger shall also mail notice and a copy of the resolution in support of considering the merger to the chairman of the board of supervisors of the county or counties in which the affected districts are located. The chairman of the board of supervisors shall order a review of the proposed merger and shall submit written comments to the governing body of each fire district located in that county within ten days after receipt of the notice.

G. At the hearing, each governing body of the district shall consider the comments of the board of supervisors, hear those persons who appear for or against the proposed merger and determine whether the proposed merger will promote public health, comfort, convenience, necessity or welfare. If, after the public hearing each of the governing bodies of the districts affected by the proposed merger adopt a resolution by a majority vote that the merger will promote public health, comfort, convenience, necessity or welfare, each of the governing bodies of the districts affected by the proposed merger shall submit to the board of supervisors the resolutions that call for an election.

H. Before considering any resolution of merger pursuant to this section, a governing body shall obtain written consent to the merger from any single taxpayer residing within each of the affected districts who owns thirty per cent percent or more of the net assessed valuation of the total net assessed valuation of the district. If written consent contemplated by this subsection is not obtained, subsections A and B of this section apply, and the merger may only be accomplished by election. If one of the affected districts does not have a single taxpayer residing in the district who owns thirty percent or more of the net assessed valuation of the total net assessed valuation of the district, this subsection does not apply to that district and written consent is not required for that district.

I. If the merger is approved as provided by subsection B or K of this section, within thirty days after the approval, the governing body of the affected district with the largest population shall call a joint meeting of the governing bodies of all of the affected districts. At the joint meeting, a majority of the members of the governing body of each affected district constitutes a quorum for the purpose of transacting business. The members of the governing body shall appoint a total of five persons from those currently serving on the governing bodies who shall complete their regular terms of office, except that no more than three of the persons appointed may serve terms that end in the same year. No more than three members shall be appointed from the same fire district board. Subsequent terms of office for district board members shall be filled by election of board members who shall be qualified electors of the merged district.

J. The appointed governing body shall immediately meet and organize itself and elect from its members a chairman and a clerk. The appointed governing body shall immediately have the powers and duties prescribed by law for governance and operation of the newly merged district. The appointed board by resolution shall declare the districts merged and each affected district joined. The governing board by resolution shall declare and the name of the newly merged fire district. The resolution and the names of the new board members for the newly organized district shall be sent to the board of supervisors, and the districts are merged effective thirty days after the adoption of the resolution. If the newly merged district is authorized to operate an ambulance service pursuant to title 36, chapter 21.1, article 2, the name of the ambulance service shall be changed administratively by the director of the department of health services to the name of the newly merged district and a hearing on the matter is not required pursuant to section 36‑2234.

k. the merger of two or more fire districts pursuant to this section or the consolidation with one or more fire districts pursuant to section 48‑822 shall not expand the boundaries of an existing certificate of necessity unless authorized pursuant to title 36, chapter 21.1, article 2.

K. L. If the requirements of subsection H of this section are met and each of the governing body votes required by subsections D and subsection G of this section are unanimous, the following apply:

1. The governing bodies of each district may choose to merge by unanimous resolution without an election and subsections A and B of this section do not apply.

2. The governing bodies of each district may choose to hold an election on the question of merger and subsections A and B of this section apply. END_STATUTE

Sec. 6. Section 48-821, Arizona Revised Statutes, is amended to read:

START_STATUTE48-821. Disposition of assets on merger of fire districts

A. If fire districts established under this article are merged, all the equipment, assets and liabilities of the affected districts shall be transferred to the fire district created by the merger.

B. All assets and liabilities of whatever description and all books and records belonging to the fire fighters' relief and pension fund of merged fire districts shall be transferred to and become the property of the fire fighters' relief and pension fund of the fire district created by the merger.

C. On merger of fire districts pursuant to section 48‑820, the fire districts that were merged are dissolved by operation of law and no longer exist and the newly organized and merged fire district is a separate and new legal entity by operation of law. END_STATUTE

Sec. 7. Section 48-822, Arizona Revised Statutes, is amended to read:

START_STATUTE48-822. Election to consolidate fire districts; resolution; hearing

A. Except as provided in subsection E of this section, the board of supervisors shall make an order calling for an election to decide whether to consolidate fire districts when a resolution for consolidation of fire districts from each district is submitted to the board of supervisors. The board of supervisors shall not make an order calling for an election to consolidate fire districts more frequently than once every two years. Whether or not the districts are consolidated, the fire districts shall reimburse the counties for the expenses of the election, including the cost of mailing any notices. If the proposed district is located in more than one county, the resolutions shall be submitted to the board of supervisors of the county in which the majority of the assessed valuation of the proposed district is located. The words appearing on the ballot shall be "(insert fire districts' names) consolidate as a fire district-–yes" and "(insert fire districts' names) consolidate as fire district-–no."

B. Within fourteen days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election in each of the affected districts is in favor of consolidating the fire districts, the board shall enter that fact on its minutes.

C. Except as proscribed by subsection D of this section, a fire district may consolidate with one or more other fire districts formed pursuant to section 48‑261 as follows:

1. A resolution requesting the consolidation of a fire district is passed by a majority vote of the governing body requesting consolidation into another fire district. The requesting district shall send by first class mail the notice of request to consolidate districts to the fire district in which the consolidation is requested.

2. On receipt of the resolution requesting consolidation, and on approval by majority vote of the governing body receiving the request, two or more fire districts may consolidate if the governing body of each affected fire district by a majority vote of the members of each governing body adopts a resolution declaring that a consolidation be considered and a public hearing be held to determine if a consolidation would be in the best interest of the districts and would promote the public health, comfort, convenience, necessity or welfare. After each district adopts such a resolution, the governing body by first class mail shall send written notice of the resolution, its purpose and notice of the day, hour and place of a hearing on the proposed consolidation to each owner of taxable property within the boundaries of the district. The notice shall contain the name and a general description of the boundaries of each district that is proposed to be consolidated and a detailed, accurate map of the area to be included in the consolidation. The notice also shall contain an estimate of the assessed value of the consolidated district, the estimated change in the property tax liability for a typical resident of the proposed consolidated district and a list of the benefits and injuries that may result from the proposed consolidated district. No new territory may be included as a result of the consolidation.

3. The clerk of the governing body of the fire districts affected by the proposed consolidation shall post notice in at least three conspicuous public places in the district and also shall publish notice twice in a daily newspaper of general circulation in the county in which the district is located at least ten days before the public hearing. The clerk of each governing body affected by the proposed consolidation shall also mail notice and a copy of the resolution in support of considering consolidation to the chairman of the board of supervisors of the county or counties in which the affected districts are located. The chairman of the board of supervisors shall order a review of the proposed consolidation and shall submit written comments to the governing body of each fire district located in the county within ten days after receipt of the notice.

4. At the hearing, the governing body of the district shall consider the comments of the board of supervisors, hear those persons who appear for or against the proposed consolidation and determine whether the proposed consolidation will promote the public health, comfort, convenience, necessity or welfare. If, after the public hearing, each of the governing bodies of the districts affected by the proposed consolidation adopt a resolution by a majority vote that the consolidation will promote the public health, comfort, convenience, necessity or welfare, each of the governing bodies of the districts affected by the proposed consolidation shall submit the resolutions calling for an election to the board of supervisors.

5. If the proposal for consolidation is approved as provided in subsections A and B of this section, the governing body of the district into which consolidation was requested shall by resolution declare the district consolidated and each affected district joined. Those persons currently serving as the governing body of the district into which consolidation was requested shall serve as the governing body of the newly consolidated district and complete their regular terms of office. The newly consolidated district governing body shall consist of at least five members who shall immediately have the powers and duties prescribed by law for governance and operation of the newly consolidated district.

6. If the consolidation results in a new district population that is greater than fifty thousand persons, the new governing board may appoint an additional two members to serve until the next general election at which time the newly elected member with the highest number of votes serves a four year term and the other member serves a two year term. Thereafter, the term of office for these two new members is four years.

7. The governing body by resolution shall declare the name of the newly consolidated fire district. If the newly consolidated fire district is authorized to operate an ambulance service pursuant to title 36, chapter 21.1, article 2, the name of the ambulance service shall be changed administratively by the director of the department of health services to the name of the newly consolidated district and a hearing on the matter is not required pursuant to section 36-2234.

8. If a proposed consolidated district would include property located in an incorporated city or town, in addition to the other requirements of this section, the governing body of the district shall approve the creation of the consolidated district only if the governing body of the city or town endorses the creation by ordinance or resolution.

9. Before considering any resolution of consolidation pursuant to this section, a governing body shall obtain written consent to the consolidation from any single taxpayer residing within each of the affected districts who owns thirty per cent percent or more of the net assessed valuation of the total net assessed valuation of the district. If one of the affected districts does not have a single taxpayer residing in the district who owns thirty percent or more of the net assessed valuation of the total net assessed valuation of the district, this subsection does not apply to that district and written consent is not required for that district.

D. A noncontiguous county island fire district formed pursuant to section 48‑851 shall not consolidate with a fire district formed pursuant to section 48‑261.

e. The merger of two or more fire districts pursuant to section 48-820 or the consolidation with one or more fire districts pursuant to this section shall not expand the boundaries of an existing certificate of necessity unless authorized pursuant to title 36, chapter 21.1, article 2.

E. F. If the requirements of subsection C, paragraph 9 of this section are met and each of the governing body votes required by subsection C, paragraph 4 of this section are unanimous, the following apply:

1. The governing bodies of each district may choose to consolidate by unanimous resolution without an election and subsections A and B of this section do not apply.

2. The governing bodies of each district may choose to hold an election on the question of consolidation and subsections A and B of this section apply. END_STATUTE

Sec. 8. Title 48, chapter 5, article 1, Arizona Revised Statutes, is amended by adding section 48-823, to read:

START_STATUTE48-823. Disposition of assets on consolidation of fire districts

A. If fire districts established under this article are consolidated, all the equipment, assets and liabilities of the affected districts shall be transferred to the fire district created by the consolidation.

B. All assets and liabilities of whatever description and all books and records belonging to the fire fighters' relief and pension fund of consolidated fire districts shall be transferred to and become the property of the fire fighters' relief and pension fund of the fire district created by the consolidation.

C. On consolidation of fire districts pursuant to section 48‑822, the fire districts that were consolidated into another fire district are dissolved by operation of law and no longer exist and the newly organized and consolidated fire district is a separate and new legal entity by operation of law. END_STATUTE