HB2568 - 522R

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

Section 1. Section 48-701, Arizona Revised Statutes, is amended to read:

START_STATUTE48-701. Definitions

In this article, unless the context otherwise requires:

1. "Clerk" includes any person or official who performs the duties of clerk of the municipality or county or any person appointed by the district board to be the district clerk pursuant to section 48‑711, subsection D.

2. "County" means a county that forms a community facilities district pursuant to this article in an unincorporated area or in an incorporated area with the municipality's consent.

3. "Debt service" means the principal of, interest on and premium, if any, on the bonds, when due, whether at maturity or prior redemption and fees and costs of registrars, trustees, paying agents or other agents necessary to handle the bonds and the costs of credit enhancement or liquidity support.

4. "District" means a tax levying community facilities district formed pursuant to this article by a municipality or formed pursuant to this article by a county in an unincorporated area or in an incorporated area with the municipality's consent.

5. "District board" means the board of directors of the district, which shall be comprised consist of the members of the governing body of the municipality or county, ex officio, or, at the option of the governing body, five directors appointed by the governing body under this article pursuant to section 48-711.

6. "Enhanced municipal services" means public service provided by a county or municipality within the district at a higher level or to a greater degree than provided in the remainder of the county or municipality, including such services as public safety, fire protection, street or sidewalk cleaning or landscape maintenance in public areas.

7. "General obligation bond" means a bond that is issued pursuant to section 48‑719 and that is secured by a pledge of ad valorem taxes levied by the district.

8. "General plan" means the general plan described in section 48‑702, subsection B, as the plan may be amended.

9. "Governing body" means the body or board which that by law is constituted as the legislative department of the municipality or county.

10. "Municipality" means an incorporated city or town.

11. "Owner" means the person who, on the day the action, election or proceeding is begun or held, appears to be the owner of real property as shown on the property tax assessment roll.

12. "Public infrastructure" means all improvements listed in this paragraph that will result in a beneficial use principally to land within the geographical limits of the district and may include a district's share of any improvements listed in this paragraph if the district board determines such share is proportionate to the beneficial use of such improvements to land within the geographical limits of the district, improvements within or outside the geographical limits of the district, necessary or incidental work, whether newly constructed, renovated or existing, and all necessary or desirable appurtenances. For the purposes of this paragraph, adoption by the district board of a resolution of intent pursuant to section 48‑715 shall conclusively establish that the improvements or, if applicable, share of the improvements that are the subject of the resolution will result in a beneficial use principally to land within the geographical limits of the district. Public infrastructure improvements are:

(a) Sanitary sewage systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge.

(b) Drainage and flood control systems, including collection, transport, diversion, storage, detention, retention, dispersal, use and discharge.

(c) Water systems for domestic, industrial, irrigation, municipal or fire protection purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal, but not including facilities for agricultural irrigation purposes unless for the repair or replacement of existing facilities when required by other improvements permitted by this article.

(d) Highways, streets, roadways and parking facilities, including all areas for vehicular use for travel, ingress, egress and parking.

(e) Areas for pedestrian, equestrian, bicycle or other nonmotor vehicle use for travel, ingress, egress and parking.

(f) Pedestrian malls, parks, recreational facilities other than stadiums, and open space areas for the use of members of the public for entertainment, assembly and recreation.

(g) Landscaping, including earthworks, structures, lakes and other water features, plants, trees and related water delivery systems.

(h) Public buildings, public safety facilities and fire protection facilities.

(i) Lighting systems.

(j) Traffic control systems and devices, including signals, controls, markings and signage.

(k) Equipment, vehicles, furnishings and other personalty related to the items listed in this paragraph.

13. "Public infrastructure purpose" means:

(a) Planning, design, engineering, construction, acquisition or installation of public infrastructure.

(b) Acquiring, converting, renovating or improving existing facilities for public infrastructure.

(d) Establishing, maintaining and replenishing reserves from any source described in section 48‑717 or from any other source in order to secure payment of debt service on bonds.

(e) Notwithstanding section 48‑589, funding and paying from bond proceeds interest accruing on bonds for a period of not to exceed three years from their date of issuance.

(f) Providing for the timely payment of debt service on bonds or other indebtedness of the district.

(g) Refinancing any matured or unmatured bonds with new bonds.

(h) Incurring expenses of the district incident to and reasonably necessary to carry out the purposes specified in this paragraph.

14. "Revenue bonds" means those bonds that are issued pursuant to section 48‑720 and that are secured by a pledge of revenues of the district or revenues collected by the county or municipality and returned to the district.

15. "Treasurer" includes any person or official who performs the duties of treasurer of the municipality or county or any person appointed by the district board as the district treasurer pursuant to section 48‑711, subsection D. END_STATUTE

Sec. 2. Section 48-702, Arizona Revised Statutes, is amended to read:

START_STATUTE48-702. Resolution declaring intention to form district

A. If the public convenience and necessity require, and on presentation of a petition signed by the owners of at least twenty‑five per cent percent of the land area proposed to be included in the district, the governing body may adopt a resolution declaring its intention to form a community facilities district to that shall include contiguous or noncontiguous property which shall be that is wholly within the corporate boundaries of the municipality or county. Beginning with districts formed after the effective date of this amendment to this section, if the land proposed to be included in the district is more than six hundred acres, on presentation of a petition signed by the owners of all of the land area proposed to be included in the district, the governing body shall adopt a resolution declaring its intention to form a community facilities district to include contiguous or noncontiguous property that is wholly within the corporate boundaries of the municipality or county. The resolution shall state the following:

1. The area or areas to be included in the district.

2. The purposes for which the district is to be formed.

3. That a general plan for the district is on file with the clerk.

4. The date, time and place of the hearing to be held on the formation of the district.

5. The place where written objections to the formation of the district may be filed.

6. That formation of the district may result in the levy of taxes to pay the costs of improvements constructed by the district and for their operation and maintenance.

7. A reference to this article.

8. Whether the district will be governed by a district board comprised that consists of the members of the governing body, ex officio, or, at the option of the governing body or, for districts formed after the effective date of this amendment to this section, at the option of the landowners and if the total area to be included in the district is larger than six hundred acres, five directors appointed by the governing body pursuant to section 48‑711, subsection C.

B. Before adopting a resolution under this section, a general plan for the district shall be filed with the clerk setting out a general description of the public infrastructure improvements for which the district is proposed to be formed and the general areas to be improved. END_STATUTE

Sec. 3. Section 48-711, Arizona Revised Statutes, is amended to read:

START_STATUTE48-711. Records; board of directors; open meetings

A. The district shall keep the following records which that shall be open to public inspection:

1. Minutes of all meetings of the district board.

2. All resolutions.

3. Accounts showing all monies received and disbursed.

4. The annual budget.

5. All other records required to be maintained by law.

B. If the resolution ordering formation of the district provides that the district will be governed by a district board appointed by the governing body, each appointed director shall serve for a term of six years, except that two directors initially appointed by the governing body in the resolution shall serve for a term of four years. The resolution shall state which directors shall serve four year terms and which shall serve six year terms. On the expiration of the term of an appointed director, the governing body shall appoint a person to fill the position and, for districts formed on or after the effective date of this amendment to this section, shall do so in a manner that complies with this section and that maintains the composition of the board as prescribed by subsection C of this section. If a vacancy occurs on the district board because of death, resignation or inability of the director to discharge the duties of director, the vacancy shall be filled by appointment made by the governing body and, for districts formed on or after the effective date of this amendment to this section, in a manner that complies with this section and that maintains the composition of the board as prescribed by subsection C of this section. A director appointed by the governing body after a vacancy shall hold office for the remainder of the unexpired term until his that director's successor is appointed. An appointed A director appointed pursuant to this subsection in a district formed before the effective date of this amendment to this section shall not be a landowner owning more than forty acres in the district, an elected official of the municipality or county or an employee or agent of the landowner or municipality or county but may be a director of more than one district.

C. Beginning with districts formed on or after the effective date of this amendment to this section, The appointed district board shall consist of two members who are selected by the governing body, two members who are selected by designation of the persons who each own more than twenty-five acres in the district and one member who is selected by the governing body from a list of at least four persons who are submitted by designation of the persons who each own more than twenty-five acres in the district. A director appointed pursuant to this subsection may be a director of more than one district.

D. The members of the governing body of the municipality or county district are not eligible to receive compensation for their services as members of the district board.

C. E. The board of directors shall comply with title 38, chapter 3, article 3.1 as a separate political subdivision.

D. F. The district manager, clerk and district treasurer shall be the manager, clerk of the municipality or county and the treasurer of the municipality or county, respectively, unless the district board appoints a district manager, clerk and district treasurer.END_STATUTE

Sec. 4. Section 48-723, Arizona Revised Statutes, is amended to read:

START_STATUTE48-723. District taxes; annual financial estimate and budget

A. Except as provided in subsection D of this section and at any time after the hearing on formation of the district, the district board, or, if before formation, the governing body, may call an election to submit to the qualified electors of the district or to the persons qualified to vote pursuant to section 48‑707, subsection G the question of authorizing the district board to levy an ad valorem tax on the assessed value of all the real and personal property in the district at a rate or rates which that do not exceed the maximum rate or rates specified in the ballot. All taxes attributable to the operation and maintenance expenses of the district, excluding expenses for an area described in section 48‑709, subsection G, shall not exceed, for districts formed before the effective date of this amendment to this section, an amount equal to thirty cents per one hundred dollars of assessed valuation for all real and personal property in the district or for districts formed on or after the effective date of this amendment to this section, fifty cents per one hundred dollars of assessed valuation for all real and personal property in the district, unless, for any district, a higher rate is approved by a vote of the electors of the district, or by the persons who are qualified to vote as provided in section 48‑707, subsection G, voting at an election not less than three years after the date of the formation of the district. The election may be held in conjunction with the formation election. Once approved at an election, the maximum rate remains in effect until increased or decreased at a subsequent election. If a maximum rate is in effect, the district board, on petition of twenty-five per cent percent of the qualified electors of the district, or by those persons owning twenty-five per cent percent of the land area who are qualified to vote pursuant to section 48‑707, subsection G, shall call an election to reduce the maximum tax rate but not below the lesser of that rate determined by the district board to be necessary to maintain the district's facilities and improvements or the actual rate then in effect. On the presentation to the district board of a petition signed by the owners of a majority of the property in the district, the district board shall adopt a resolution to reduce or eliminate the portion of the tax, beginning the next fiscal year, required for one or more enhanced municipal services specified in the petition. Signatures on a petition to reduce or eliminate a tax are valid for a period of sixty days.

B. The district may not levy, other than for the payment of debt service on general obligation bonds, at a rate or rates in excess of the maximum rate then in effect.

C. When levying an ad valorem tax, the district board shall make annual statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the tax levy or levies and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy or levies and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district. The district board shall file the annual statements and estimates with the clerk. The district board shall publish a notice of the filing of the estimate, shall hold hearings on the portions of the estimate not relating to debt service on general obligation bonds and shall adopt a budget. The board, on or before the date set by law for certifying the annual budget of the county or municipality, shall fix, levy and assess the amounts to be raised by ad valorem taxes of the district and shall cause certified copies of the order to be delivered to the board of supervisors and to the department of revenue. All statutes relating to the levy and collection of general county taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to the district taxes provided for by this section.END_STATUTE