SB1480 - 531R

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 that consists 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 or entity that, 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, and 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 forming a community facilities district that shall include contiguous or noncontiguous property that is wholly within the corporate boundaries of the municipality or county. Noncontiguous property may be included in a district only if it is under common ownership or control and would be served by common infrastructure as part of a single unified project. Beginning with districts formed after the effective date of this amendment to this section, the governing body shall adopt the resolution within ninety days after the submittal of the petition. 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 one of the following:

(a) For districts formed before the effective date of this amendment to this section, the members of the governing body, ex officio, or, at the option of the governing body and if the total area to be included in the district is larger than six hundred acres, five directors appointed by the governing body.

(b) For districts formed on or after the effective date of this amendment to this section:

(i) If the total area to be included in the district is larger than six hundred acres, at the option of the landowners submitting the petition for formation of the district, five directors appointed pursuant to section 48-711, subsection C. If the landowners do not choose appointment pursuant to section 48-711, subsection C, the members of the governing body, ex officio, are the district board.

(ii) If the total area to be included in the district is six hundred acres or less, the members of the governing body, ex officio.

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.

C. The property to be included in a district formed by a county must meet all of the following requirements:

1. The zoning for the property must allow development in excess of one residential dwelling unit per acre.

2. The property must be included within the planning area of a municipality or the land use element of a municipality's general plan adopted pursuant to section 9-461.05 or must be located immediately adjacent to the municipality.

3. The property must be the subject of a specific plan, a planned area development or a development agreement that is approved by the county pursuant to section 11-1101. END_STATUTE

Sec. 3. Section 48-705, Arizona Revised Statutes, is amended to read:

START_STATUTE48-705. Order forming district; election

A. After the hearing, the governing body may adopt a resolution ordering the formation of the district, deleting any property determined not to be benefited by the district or modifying the general plan and then ordering the formation of the district or determining that the district not be formed. Notwithstanding any agreement with the municipality or the county to the contrary, 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 or, if the land is located in the UNINCORPORATED area of a county, the land meets the requirements prescribed by section 48-702, subsection C, the governing BODY shall adopt a resolution within ninety days after the receipt of the petition to form the district as prescribed in section 48‑702 that orders the formation of the district. A resolution ordering formation of the district shall state 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 five directors appointed by the governing body. For districts formed after the effective date of this amendment to this section, at the option of the landowners and if the total area included in the district is larger than six hundred acres, the district board consists of five directors appointed by the governing body pursuant to section 48-711, subsection C. If the district board will be comprised consist of appointed directors, the resolution shall contain the names of the five initial directors and the terms of office of each.

B. If the governing body determines that the district should or must be formed, it shall submit the formation to an election of the owners of land in the district who are qualified electors of this state and other landowners, according to section 48‑3043, unless a petition is presented to the governing body pursuant to section 48‑707, subsection F. Each owner has the number of votes or portions of votes equal to the number of acres or portions of acres rounded upward to the nearest one-fifth of an acre owned by that owner in the submitted district. In addition to holding the landowner election required by this subsection or receipt of the landowner petition pursuant to section 48‑707, subsection F, and subject to section 48‑707, subsection G, the governing body shall submit the formation of the district to a vote of the qualified electors who reside within the boundaries of the proposed district. END_STATUTE

Sec. 4. Section 48-707, Arizona Revised Statutes, is amended to read:

START_STATUTE48-707. Notice and conduct of elections; waiver

A. Any election under this article shall be a nonpartisan election called by posting notices in three public places within the boundaries of the district not less than twenty days before the election. Notice shall also be published in a newspaper of general circulation in the municipality or county or if there is no newspaper so circulated in the municipality in a newspaper of general circulation in the county in which the municipality is located once a week for two consecutive weeks before the election. The notice shall state:

1. The place of holding the election.

2. The hours during the day, not less than six, in which the polls will be open.

3. If it is a formation election, the boundaries of the proposed district.

4. If it is a bond election, the amount of bonds to be authorized for the district, the maximum rate of interest to be borne on the bonds, the maximum term of the bonds, not exceeding twenty‑five years, and the purposes for which the monies raised will be used.

5. If it is an ad valorem tax levy election pursuant to section 48‑723, the maximum tax rate per one hundred dollars of assessed valuation to be imposed, the purposes for which the monies raised will be used and the existing maximum tax rate, if any.

6. That a general plan is on file with the clerk.

B. The district board or the governing body, as applicable, shall determine the date of the election and the polling places for the election and may consolidate county precincts. For other than a formation election pursuant to section 48‑705, subsection B, and an election held pursuant to subsection G of this section, precinct registers shall be used. The county recorder shall submit precinct registers on the request of the clerk, and if the district includes land lying partly in and partly out of any county election precinct, the precinct registers may contain the names of all registered voters in the precinct and the election boards at those precincts shall require that a prospective elector execute an affidavit stating that the elector is also a qualified elector of the district. For formation elections and elections held pursuant to subsection G of this section, a prospective elector shall execute an affidavit stating that the elector is the owner of land in the proposed district and is a qualified elector of this state or otherwise qualified to vote pursuant to section 48‑3043 and stating the area of land in acres owned by the elector. Election board members may administer oaths or take all affirmations for these purposes. A community facilities district election held pursuant to this article is not subject to title 16, chapter 2, article 3.

C. Except as otherwise provided by this article, the election shall comply with the general election laws of this state, except that the words to appear on the ballots shall be for a formation election "district, yes" and "district, no", for a bond election "bonds, yes" and "bonds, no", for a tax election if no tax is in place "tax, yes" and "tax, no" and for a tax election to change an existing maximum or eliminate an existing tax "tax change, yes" and "tax change, no". The returns of election shall be made to the governing body or, if after formation, to the district board.

D. Within fourteen days after an election, the governing body, or if after formation, the district board, shall meet and canvass the returns, and if a majority of the votes cast at the election is in favor of formation, issuing the bonds, imposing the tax or changing the tax, the governing body or the district board, as appropriate, shall enter that fact on its minutes. The canvass may be continued from time to time. Failure of a majority to vote in favor of the matter submitted does not prejudice the submission of the same or similar matters at a later election.

E. If a person listed on the assessment roll is no longer the owner of land in the district and the name of the successor owner becomes known and is verified by recorded deed or other similar evidence of transfer of ownership, the successor owner is deemed to be the owner for the purposes of this article.

F. Notwithstanding any other provision of this article, if a petition for formation is signed by owners of all of the land in the district described in the petition and, only for districts formed before the effective date of this amendment to this section, if it is approved by the municipality or county, the municipality or county may, and for districts formed after the effective date of this amendment to this section shall, waive any or all requirements of posting, publication, mailing, notice, hearing and landowner election. On receipt of such a petition, and after approval by an election of resident electors, if any, the municipality or county shall declare the district formed without being required to comply with the provisions of this article for posting, publication, mailing, notice, hearing or landowner election.

G. Notwithstanding any other provision of this article, if no person has registered to vote within the district within fifty days immediately preceding any scheduled election date, any election required to be held pursuant to this article shall be held with the vote by the owners of land within the district who are qualified electors of this state and other landowners according to section 48‑3043. Each owner has the number of votes or portion of votes equal to the number of acres or portion of acres rounded upward to the nearest one-fifth of an acre owned in the district by that person.

H. For a district that is proposed to be formed by a county, a district may be formed only if a petition for formation is signed by the owners of all of the land in the district that is described in the petition and, only for districts formed before the effective DATE of this amendment to this section, if it is approved by the county. If the district is proposed to be formed in a county island, as defined in section 11-251.12, in existence on the effective date of this amendment to this section September 21, 2006, the petition must be signed by the owners of all of the land in the district that is described in the petition and the district must be approved by the county and by the municipality or all municipalities that form the county island. If the petition is signed by the owners of all of the land in the district, the county may, and for districts formed after the effective date of this amendment to this section shall, waive any or all requirements of posting, publication, mailing, notice, hearing and landowner election. On receipt of such a petition, and after approval by an election of one hundred per cent percent of the resident electors, if any, the county shall declare the district formed without being required to comply with the provisions of this article for posting. END_STATUTE

Sec. 5. Section 48-708, Arizona Revised Statutes, is amended to read:

START_STATUTE48-708. Formation; debt limitation

A. If the formation of the district is approved by a majority of the votes cast at the election, the governing body shall order the formation, appoint the initial directors of the district board if the district will be governed by an appointed board, set the district boundaries and order that a map showing the district boundaries be drawn and a copy of the order forming the district be delivered to the county assessor and the board of supervisors of the county in which the district is located and to the department of revenue. A notice of the formation showing the number and date of the order and giving a description of the land included in the district shall be recorded with the county recorder.

B. On its formation, the district is a special purpose district for purposes of article IX, section 19, Constitution of Arizona, a tax levying public improvement district for the purposes of article XIII, section 7, Constitution of Arizona, and a municipal corporation for all purposes of title 35, chapter 3, articles 3, 3.1, 3.2, 4 and 5. A district that distributes or sells groundwater is a private water company only for purposes of title 45, chapters 2 and 3.1. Except as otherwise provided in this section, a district is considered to be a municipal corporation and political subdivision of this state, separate and apart from the municipality or county. Under no circumstances may the amount of indebtedness evidenced by general obligation bonds issued pursuant to section 48‑719 and revenue bonds issued pursuant to section 48‑720 exceed the estimated cost of the public infrastructure improvements plus all costs connected with the public infrastructure purposes and issuance and sale of bonds, including, without limitation, credit enhancement and liquidity support fees and costs. The total aggregate outstanding amount of bonds and any other indebtedness for which the full faith and credit of the district are pledged shall not exceed sixty per cent percent of the aggregate of the estimated market value of the real property and improvements in the district after the public infrastructure of the district is completed plus the value of the public infrastructure owned or to be acquired by the district with the proceeds of the bonds.

C. On formation of the district, the district board shall administer, in a reasonable manner, the implementation of the general plan for the public infrastructure of the district and any development agreement entered into pursuant to section 9‑500.05 between the governing body and owners of land in the district. The district board shall be considered a party to that agreement.

D. Fees and other charges assessed by a municipality or county in connection with the submission and consideration of an application or petition to form a district, or shall not exceed fifteen thousand dollars, fees and other charges assessed by a municipality, county or district in connection with the administration of a district, including the issuance and sale of bonds, shall not exceed the estimated actual expense incurred by the municipality, county or district for staff and consultant services and support facilities supplied by the municipality, county or district or the financial, legal and administrative costs of the district that are not reimbursed from proceeds of the bonds or other district revenue. END_STATUTE

Sec. 6. 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. Notwithstanding any agreement with the municipality or county to the contrary, beginning with districts that are formed on or after the effective date of this amendment to this section and that meet the requirements of section 48‑702, subsections A and C, the appointed district board shall consist of five members. Three members shall be elected members of the governing body who are selected by the governing body. The governing body may remove and replace any one or more of these three members selected by the governing body at any time. Two additional members shall be persons who each own more than twenty‑five acres in the district, who shall be designated by the landowners petitioning to form the district and who may be replaced at the discretion of the landowner who owns the largest number of acres of undeveloped private land in the district. A director appointed pursuant to this subsection may be a director of more than one district.

D. If a district that is in existence on the effective date of this amendment to this section does not contain any qualified electors and has not issued any bonds pursuant to this article, the owners of all of the land in the district may submit a petition to the governing body that requests that the district board consist of five members as prescribed by subsection C of this section. Within ninety days after receipt of the petition, the governing body shall vote to approve or disapprove the petition.

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

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

D. G. 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. 7. Section 48-715, Arizona Revised Statutes, is amended to read:

START_STATUTE48-715. Project approval

Before constructing or acquiring any public infrastructure, the district board shall cause a study of the feasibility and benefits of the project to that shall be prepared by engineers and other qualified persons, which and that shall include a description of the public infrastructure to be constructed or acquired and all other information useful to understand the project, a map showing, in general, the location of the project, an estimate of the cost to construct, acquire, operate and maintain the project, an estimated schedule for completion of the project, a map or description of the area to be benefited by the project, and a plan for financing the project. Within sixty days after receiving the report, the board shall hold a public hearing on the report and provide notice of the hearing by publication not less than ten days in advance in the official newspaper of the municipality or county or, if none in the municipality, a newspaper of general circulation in the county and by mail to the governing body of the municipality. Within sixty days after the hearing, the district board may reject, amend or approve the report. If the report is amended substantially a new hearing shall be held within sixty days after the date the amended report is received and before approval. If the report is approved, the district board shall adopt a resolution of intent which that identifies the public infrastructure of the project, the areas benefited, the expected method of financing, including the nature and timing of the issuance of bonds, if any, and an appropriate system of providing revenues to operate and maintain the project. The district board shall execute the provisions of the report within the time frames identified in the approved report. END_STATUTE

Sec. 8. Title 48, chapter 4, article 6, Arizona Revised Statutes, is amended by adding sections 48-726, 48‑727, 48‑728 and 48-729, to read:

START_STATUTE48-726. Jurisdictional limitation; organizational documents

The governing body of the jurisdiction in which the district is to be located may not require the petitioner to increase the infrastructure elements, debt limit, tax rate or duration of the district beyond the levels and limits set out in the petition and the associated documents that are submitted for the formation of the district. END_STATUTE

START_STATUTE48-727. District website; district records database

A. The district shall establish and maintain an official website that is electronically searchable by the public and that contains a comprehensive database of district contracts, public notices, meeting minutes, resolutions and accounts showing all monies received and disbursed, the annual budget and other records required to be maintained by law.

B. The database may not include:

1. Tax payment or refund data that includes confidential taxpayer information.

2. Work product in anticipation of litigation or other information that is subject to attorney‑client privilege.

3. Any other information that is designated by law as confidential.

C. The district shall provide a link to the database on the district's main website maintained by the district and shall provide a link to that database to the department of administration. END_STATUTE

START_STATUTE48-728. Property owner; county law enforcement agreement

unless otherwise provided for in a development agreement entered into pursuant to section 11-1101 before the effective date of this section, If the property within a district formed by a COUNTY meets the requirements PRESCRIBED in section 48-702, subsection C before the effective date of this SECTION and either the property boundary is not located within ten miles of a county sheriff substation or county law enforcement is PROVIDED to the property at a SERVICE level of less than one officer per thousand population, all of the following apply:

1. The owner shall provide to the county an agreement limited in scope to the provision of law enforcement services to the property within the district. The agreement shall be provided by the owner with the first FINAL plat submitted to the county BY the owner.

2. The agreement shall obligate the owner or the owner's assignee to fund law ENFORCEMENT services at the level of SERVICE provided by the county, which may be provided by the county, an adjacent municipality or another entity.

3. If the county subsequently approves a new funding source dedicated to law enforcement service WITHIN the county or if the property within the district is incorporated or annexed by a city or town, the law enforcement agreement prescribed by this section is terminated. END_STATUTE

START_STATUTE48-729. Legislative intent; district agreements

It is the intent of the legislature by enacting and amending this article to supersede and replace any contrary, inconsistent or conflicting provisions relating to community facilities districts as addressed in this article of any agreement, ordinance, rule, regulation, procedure, policy or similar action that is entered into or taken by any municipality, county, district or other governmental entity. A municipality, county, district or other governmental entity may not enter into or take any actions that abrogate, contravene, infringe, conflict, modify, amend, replace or annul the provisions of this article. END_STATUTE