HB2675 - 472R

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

Section 1. Section 9-441.02, Arizona Revised Statutes, is amended to read:

START_STATUTE9-441.02. Powers of municipalities

A. A municipality has the authority to carry out the provisions of this article, including the following:

1. Enter into contracts or leases with developers of housing development projects containing covenants, restrictions and conditions regarding the use of the property for residential purposes.

2. Finance or refinance, by loan, grant, lease or otherwise contract with private developers to, construct, purchase, acquire, own, modify, maintain, improve, sell, operate, develop or manage housing development projects, and pay the costs of any housing development project from the proceeds of bonds or other obligations of the municipality or any other monies of the municipality, or from any contributions or loans by persons, corporations, partnerships or other entities, all of which the municipality is authorized to receive, accept and use.

3. Encourage and promote the improvement and revitalization of a housing development area and make, contract for or otherwise cause to be made long‑range proposals for the housing development area.

4. Enter into contracts necessary to effectuate the purposes of this article.

5. Do all things necessary or convenient to carry out the powers conferred by this article, except acquire real property by eminent domain for the purpose of this article unless a property owner voluntarily offers the property owner's real property for sale.

B. This section does not affect the authority of local governing bodies to acquire property by eminent domain in slum or blighted areas established under title 36. END_STATUTE

Sec. 2. Section 9-500.11, Arizona Revised Statutes, as amended by Laws 2005, chapter 200, section 1, is amended to read:

START_STATUTE9-500.11. Expenditures for economic development; requirements; definitions

A. In addition to any other powers granted to a city or town, the governing body of a city or town may appropriate and spend public monies for and in connection with economic development activities.

B. To fund economic development activities under this section, a city or town subject to the requirements of section 9‑500.06 shall not impose a new fee or tax on a single specific industry or type of business.

C. Notwithstanding section 19‑142, subsection B, a decision by the governing body involving an expenditure pursuant to this section shall not be enacted as an emergency measure and that decision is not effective for at least thirty days after final approval of the expenditure.

D. Before entering into a retail development tax incentive agreement, a city or town shall make a finding by a simple majority vote of the governing body without the use of consent calendar that includes both of the following:

1. That the proposed tax incentive is anticipated to raise more revenue than the amount of the incentive within the duration of the agreement.

2. That in the absence of a tax incentive, the retail business facility or similar retail business facility would not locate in the city or town in the same time, place or manner.

E. A city or town located in or within twenty‑five miles of the exterior boundary of a metropolitan statistical area having a population of more than two million persons shall make a finding pursuant to subsection D of this section, by a two-thirds vote of the governing body.

F. A city or town shall not enter into a retail development tax incentive agreement if the proposed tax incentive raises less revenue than the amount of the incentive.

G. A city or town shall present a status report of the revenues and expenses associated with the tax incentive every two years for the duration of the agreement in a public meeting.

H. The finding made pursuant to subsection D, paragraph 1 of this section shall be verified by an independent third party before the city or town enters into the retail development tax incentive agreement.

I. The adoption of the retail development tax incentive agreement shall be approved by a simple majority vote of the governing body without the use of consent calendar. For a city or town located in or within twenty‑five miles of the exterior boundary of a metropolitan statistical area having a population of more than two million persons, the adoption of a retail development tax incentive agreement shall be approved by an affirmative vote of at least two-thirds of the governing body without the use of consent calendar.

J. A person or business entity receiving the retail development tax incentive agreement shall not finance the independent third party verification of the findings or have input into the selection of the independent third party verifying the findings.

K. A city or town shall adopt a notice of intent to enter into a retail development tax incentive agreement at least fourteen days before approving a retail development tax incentive agreement.

L. Subsection D of this section does not apply to tax incentives given to a business entity in an area that is designated by a city or town as a redevelopment slum clearance project as defined in section 36-1471.

M. For the purposes of this section:

1. "Economic development activities" means any project, assistance, undertaking, program or study, whether within or outside the boundaries of the city or town, including acquisition, improvement, redevelopment, leasing or conveyance of improved or unimproved real or personal property or other activity, that the governing body of the city or town has found and determined will assist in the creation or retention of jobs or will otherwise improve or enhance the economic welfare of the inhabitants of the city or town.

2. "Expenditure" includes any waiver, exemption, deduction, credit, rebate, discount, deferral or other abatement or reduction of the normal municipal tax liability that otherwise applies to similar existing business entities and properties in that city or town, however denominated, computed or applied, and that is generally understood as an inducement to locate a business facility or other operation in the city or town.

3. "Metropolitan statistical area" means a geographical area consisting of cities, towns and other populated areas defined for federal statistical and census purposes by the United States office of management and budget with technical assistance from the United States bureau of the census.

4. "Retail" means the sale of tangible personal property, except the sale of tangible personal property to a person who is engaged in the business of selling such property.

5. "Retail development activities" means those economic development activities that involve the acquisition, improvement, leasing or conveyance of improved or unimproved real or personal property or other activity to facilitate the sale of goods at retail, including the sale of automobiles, or to facilitate other activities, including theater and restaurant development, that generate revenues that are subject to municipal transaction privilege taxation.

6. "Retail development tax incentive agreement" means an agreement between a city or town and a person engaged in or planning to engage in retail development activities within that city or town in which the city or town agrees to pay, refund, credit, rebate or otherwise provide to that person all or a portion of the sales, use or transaction privilege taxes payable to that city or town in connection with the construction, development or operation of the retail development activities. END_STATUTE

Sec. 3. Section 35-701, Arizona Revised Statutes, is amended to read:

START_STATUTE35-701. Definitions

In this chapter, unless the context otherwise requires:

1. "Corporation" means any corporation organized as an authority as provided in this chapter.

2. "Designated area" means any area of this state which that is either designated pursuant to section 36‑1479 as a slum or blighted area as defined in section 36‑1471, designated by regulation as a pocket of poverty or a neighborhood strategy area by the United States department of housing and urban development pursuant to title I of the housing and community development act of 1977 (P.L. 108-6 95-128; 42 United States Code sections 5301 through 5320), as amended, and the department of housing and urban development act (P.L. 108‑6 89-174; 42 United States Code section 3535(d)), or designated by the United States department of housing and urban development as an empowerment or enterprise zone pursuant to the federal omnibus budget and reconciliation act of 1993 (P.L. 108‑6 103-66; 26 United States Code section 1391(g)), or an area certified as an enterprise zone pursuant to section 41‑1524, subsection B.

3. "Governing body" means:

(a) The board or body in which the general legislative powers of the municipality or the county are vested.

(b) The Arizona board of regents with respect to a corporation formed with the permission of the Arizona board of regents.

4. "Income" means gross earnings from wages, salary, commissions, bonuses or tips from all jobs, net earnings from such person's or family's own nonfarm business, professional practice or partnership, and net earnings from such person's or family's own farm. Income includes income, other than earnings, that consists of amounts received from social security or railroad retirement, interest, dividends, veterans payments, pensions and other regular payments, public assistance or welfare payments, including aid for dependent children, old age assistance, general assistance and aid to the blind or totally disabled, but excluding separate payments for hospital or other medical care.

5. "Manufactured house" means a structure that is manufactured in a factory after June 15, 1976, that is delivered to a homesite in more than one section and that is placed on a permanent foundation. The dimensions of the completed house shall not be less than twenty feet by forty feet, the roof must be sloping, the siding and roofing must be the same as those found in site‑built houses and the house must be eligible for thirty year real estate mortgage financing.

6. "Municipality" or "county" means the Arizona board of regents or any incorporated city or town, including charter cities, or any county in this state in which a corporation may be organized and in which it is contemplated the corporation will function.

7. "Persons of low and moderate income" means, for the purposes of financing owner‑occupied single family dwelling units in areas which that the municipality has found, pursuant to section 36‑1479, to be slum or blighted areas, as defined in section 36‑1471, persons and families whose income does not exceed two and one‑half times the median family income of this state. In all other areas it means persons and families whose income does not exceed one and one‑half times the median family income of this state.

8. "Project" means any land, any building or any other improvement and all real and personal properties, including machinery and equipment whether or not now in existence or under construction and whether located within or without the municipality or county approving the formation of the corporation, that are suitable for any of the following:

(a) With respect to a corporation formed with the permission of a municipality or county other than the Arizona board of regents:

(i) Any enterprise for the manufacturing, processing or assembling of any agricultural or manufactured products.

(ii) Any commercial enterprise for the storing, warehousing, distributing or selling of products of agriculture, mining or industry, or of processes related thereto, including research and development.

(iii) Any office building or buildings for use as corporate or company headquarters or regional offices or the adaptive use for offices of any building within this state that is on the national register of historic places or rehabilitation of residential buildings located in registered historic neighborhoods.

(iv) A health care institution as defined in section 36‑401.

(v) Residential real property for dwelling units located within the municipality or county approving the formation of the corporation and, in the case of a county, whether or not also within a municipality that is within the county.

(vi) Repairing or rehabilitating single family dwelling units or constructing or repairing residential fences and walls.

(vii) Convention or trade show facilities.

(viii) Airports, docks, wharves, mass commuting facilities, parking facilities or storage or training facilities directly related to any of the facilities as provided in this item.

(ix) Sewage or solid waste disposal facilities or facilities for the furnishing of electric energy, gas or water.

(x) Industrial park facilities.

(xi) Air or water pollution control facilities.

(xii) Any educational institution that is operated by a nonprofit educational organization that is exempt from taxation under section 501(c)(3) of the United States internal revenue code and that is not otherwise funded by state monies, any educational institution or organization that is established under title 15, chapter 1, article 8 and that is owned by a nonprofit organization, any private nonsectarian school or any private nonsectarian organization established for the purpose of funding a joint technological education school district.

(xiii) Research and development facilities.

(xiv) Commercial enterprises, including facilities for office, recreational, hotel, motel and service uses if the facilities authorized by this item are to be located in a designated area.

(xv) A child welfare agency, as defined in section 8‑501, owned and operated by a nonprofit organization.

(xvi) A transportation facility constructed or operated pursuant to title 28, chapter 22, article 1 or 2.

(xvii) A museum operated by a nonprofit organization.

(xviii) Facilities owned or operated by a nonprofit organization described in section 501(c) of the United States internal revenue code of 1986 that is primarily engaged in delivering community services on that property consisting of fitness programs, camping programs, health and recreation services, youth programs, child care, senior citizen programs, individual and family counseling, employment and training programs, services for individuals with disabilities, meals, feeding programs or disaster relief.

(xix) New or existing correctional facilities that contract exclusively with the state department of corrections or the department of juvenile corrections for the housing of inmates or committed youths.

(b) With respect to a corporation formed with the permission of the Arizona board of regents, any facility consisting of classrooms, lecture halls or conference centers or any facility for research and development or for manufacturing, processing, assembling, marketing, storing and transferring items developed through or connected with research and development or in which the results of such research and development are utilized, but only if the facility is located in an area designated as a research park by the Arizona board of regents.

9. "Property" means any land, improvements thereon, buildings and any improvements thereto, machinery and equipment of any and all kinds necessary to a project and any other personal properties deemed necessary in connection with a project.

10. "Research park" means an area of land that has been designated by the Arizona board of regents as a research park for a university and that, at the date of designation, is owned by this state or by the Arizona board of regents.

11. "Single family dwelling unit" includes any new, used or manufactured house that meets the insuring requirements of the federal housing administration, the veterans administration or any other insuring entity of the United States government or any private mortgage insurance or surety company that is approved by the federal home loan mortgage corporation or the federal national mortgage association. END_STATUTE

Sec. 4. Section 35-706, Arizona Revised Statutes, is amended to read:

START_STATUTE35-706. Corporate powers

A. In addition to the powers granted to an industrial development authority by law, the authority shall have has the following powers, together with all powers incidental or necessary for the performance of the following those powers:

1. To acquire, whether by purchase, exchange, gift, lease or otherwise establish, construct, improve, maintain, equip and furnish one or more projects.

2. To lease to others any or all of its projects, to charge and collect rent and to terminate any lease upon the failure of the lessee to comply with any of the obligations of the lease.

3. To sell, exchange, donate and convey to others any or all of its projects or properties upon terms and conditions as its board of directors may deem advisable, including the power to receive for any sale the note or notes of the purchaser of the project or property, whenever its board of directors finds the action to further advance the interest of the corporation.

4. To issue its bonds for the purpose of carrying out any of its powers.

5. To mortgage and pledge any or all of its projects and properties, whether owned or acquired, and to pledge the revenues, proceeds and receipts or any portion of the revenues, proceeds and receipts from a project as security for the payment of the principal of and interest on any bonds so issued and any agreements made in connection therewith.

6. To contract with and employ others to provide and to pay compensation for professional services and other services as the board of directors deems necessary for the financing of projects and for the business of the corporation.

7. To refund outstanding obligations incurred by an enterprise to finance the cost of a project when the board of directors finds that the refinancing is in the public interest.

8. To invest and reinvest funds under the control of the corporation and bond proceeds pending application thereof to the purposes for which the bonds were issued, subject only to the provisions of any bond resolution, lease or other agreement entered into by the board of directors.

9. To make secured or unsecured loans for the purpose of financing or refinancing the acquisition, construction, improvement, equipping or operating of a project and to charge and collect interest on the loans and pledge the proceeds of loan agreements as security for the payment of the principal and interest of any bonds, or designated issues of bonds, issued by the corporation, and any agreements made in connection with the loan, whenever the board of directors finds the loans to further advance the interest of the corporation or the public.

10. To acquire and hold obligations of any kind to carry out any of its purposes.

11. Subject to the provisions of this section to make loans to any bank, savings and loan institution, credit union or other mortgage lender, whether organized or existing under the laws of this state, another state or the United States, which is qualified to do business in this state, for the purpose of enabling the institutions to make loans to finance the acquisition, construction, improvement or equipping of projects which that are owner‑occupied single family dwelling units to be occupied by persons of low and moderate income, as determined by the corporation. The loans shall be fully secured in the same manner as deposits of public funds or by loans secured by mortgages, deeds of trust or other security instruments guaranteed or insured by the United States, or any instrumentality thereof, or by any private mortgage insurance or surety company which that is approved by the federal home loan mortgage corporation or the federal national mortgage association and which that is licensed to do business in this state, if the private mortgage insurance shall be in a dollar amount sufficient to satisfy the mortgage insurance requirements for loans eligible to be purchased by the federal home loan mortgage corporation or the federal national mortgage association or any other agency or department of the United States. The security shall not be necessary if the bonds issued to make the loans are guaranteed or insured by an agency, department or instrumentality of the United States. Any bonds issued to make loans shall be ratable as "A" or better by a nationally recognized bond rating agency.

12. Subject to the provisions of this section to purchase or enter into advance commitments to purchase loans or any loan interests secured by mortgages, deeds of trust or other security instruments relating to projects which that are owner‑occupied single family dwelling units from or with any bank, savings and loan institution, credit union or other mortgage lender, whether organized or existing under the laws of this state, another state or the United States, which is qualified to do business in this state, on terms and conditions as may be determined by the corporation. The purpose of the purchases shall be to finance directly or indirectly the acquisition, construction, improvement or equipping of projects which that are owner‑occupied single family dwelling units to be occupied by persons of low and moderate income. If the bonds issued to make purchases are not guaranteed or insured by an agency, department or instrumentality of the United States or secured by a letter of credit, insurance policy, surety bond or other credit facility from a financial institution or a combination of such instruments, the purchased loans shall be guaranteed or insured by the United States or any agency, department, or instrumentality thereof, or by any private mortgage insurance or surety company which that is approved by the federal home loan mortgage corporation or the federal national mortgage association or secured by a letter of credit, insurance policy, surety bond or other credit facility from a financial institution or a combination of such instruments. In the case of private mortgage insurance, the insurance shall be in a dollar amount sufficient to satisfy the mortgage insurance requirements for loans eligible to be purchased by the federal home loan mortgage corporation or the federal national mortgage association or any other agency or department of the United States. Any bonds issued to purchase loans shall be ratable as "A" or better by a nationally recognized bond rating agency. If the purchased loans have not been originated on behalf of the corporation to directly finance projects, the corporation shall require that the institution receiving proceeds from the sale of the loans use the proceeds to make loans to finance or refinance the acquisition, construction, improvement or equipping of projects which that are owner‑occupied single family dwelling units to be occupied by persons of low and moderate income, as determined by the corporation.

13. To elect not to issue an amount of qualified mortgage revenue bonds which that it may otherwise issue during any calendar year and to issue instead mortgage credit certificates pursuant to a qualified mortgage credit certificate program as defined in section 35‑901.

14. To make loans to any person or entity owning residential property or to make loans to any bank, savings and loan association, credit union or other mortgage lender, or to purchase or enter into advance commitments to purchase funding for the repair or improvement of property related to residential or neighborhood improvement projects. An authority may issue its bonds or incur other obligations to fund loans or purchases. An authority shall establish the provisions relating to bonds or other obligations, including the security for the loans, and shall establish the guidelines for the approval, funding, purchasing and security of the loans.

15. To enter into contracts and execute any agreements or instrument and do any other act necessary or appropriate to carry out its purposes.

B. The corporation shall not have the power to operate any project as a business other than as lessor or seller nor shall any corporation make any loans pursuant to subsection A, paragraph 9 of this section for projects which that are owner‑occupied single family dwelling units except by utilizing as its contract agent a mortgage lender, whether organized or existing under the laws of this state, another state or the United States, which is qualified to do business in this state. Any project established pursuant to subsection A, paragraph 14 of this section is not required to use a mortgage lender as its contract agent. The corporation shall not permit any funds derived from the sale of its bonds to be used, loaned or provided for the acquisition of any facilities of a public utility or public service corporation, except as provided in section 35‑701. The corporation shall comply with the provisions of title 38, chapter 3, article 3.1.

C. A person's or family's eligibility for an owner‑occupied single family dwelling unit financed pursuant to subsection A, paragraph 11, 12 or 13 of this section shall be determined by considering the person's or family's income. Owner‑occupied single family dwelling units shall only be financed as provided in subsection A, paragraphs 11, 12 and 13 of this section unless the owner‑occupied single family dwelling units are located in an area designated pursuant to section 36‑1479 as a slum or blighted area as defined in section 36‑1471 by a municipality having a population of more than two hundred fifty thousand persons according to the most recent United States decennial census or a special census conducted in accordance with section 42‑5033.

D. In the exercise of its powers authorized in this section with respect to projects which that are owner‑occupied single family dwelling units to be occupied by persons of low and moderate income and financed pursuant to subsection A, paragraphs 11 and 12 of this section, the corporation shall establish, subject to approval by the governing body of the authorizing county or municipality, standards and requirements applicable to the purchase of loans or the making of loans to mortgage lenders, including:

1. The eligibility of mortgage lenders, including the requirement that all mortgage lenders be approved as mortgagees by the federal housing administration and the veterans administration and be approved as sellers and servicers of mortgage loans by the federal national mortgage association or federal home loan mortgage corporation.

2. The time within which mortgage lenders must make commitments and disbursements for mortgage loans.

3. The character of residences to be financed by mortgage loans.

4. The eligibility of persons of low and moderate income, including the requirement that no person of low and moderate income may receive, more than once in a three year period, a mortgage loan financed directly or indirectly from the proceeds of bonds issued by the corporation.

5. The terms and conditions of mortgage loans to be acquired.

6. The amounts and types of insurance coverage required on residences, mortgages and bonds.

7. The representations and warranties of mortgage lenders confirming compliance with the standards and requirements.

8. Restrictions as to interest rate and other terms of mortgage loans and the return realized on mortgage loans by mortgage lenders.

9. The type and amount of collateral security to be provided to assure repayment of any loans from the corporation and to assure repayment of bonds.

10. Assignment of the mortgage loans to a trustee acting on behalf of the corporation which shall be either a bank or trust company doing business in this state, having an officially reported combined capital surplus, undivided profits and reserves of not less than fifteen million dollars. Trustees must be approved to sell mortgages to and service mortgages for the federal national mortgage association and the federal home loan mortgage corporation.

11. Any other matters related to the purchase of mortgage loans or the making of loans to mortgage lenders deemed relevant by the corporation. In establishing standards and requirements, the corporation shall be guided by the following standards:

(a) The amount of mortgage monies proposed to be made available in the area is to be reasonably related to the demand for mortgage monies.

(b) For projects of owner‑occupied single family dwelling units to be occupied by persons of low and moderate income and financed pursuant to subsection A, paragraphs 11 and 12 of this section, at least ten per cent of all mortgage monies proposed to be made available by the corporations other than mortgage monies reserved for any period to finance mortgage loans on residences located within an area designated as a slum or blighted area as defined in section 36‑1471 shall be reserved for at least a three month period for the financing of mortgage loans on manufactured housing unless the department of commerce makes a determination that any bonds issued to make loans will not be ratable as "A" or better by a nationally recognized bond rating agency, in which case no such reservation is required. If all the mortgage monies reserved for manufactured housing are not committed or used to make mortgage loans during this three month period, the mortgage lender may allocate the remaining monies to finance mortgage loans on any single family dwelling unit.

(c) Any departure from the level of commitment fees, origination fees or servicing fees normally charged by a mortgage lender is to be justified in the context of the transaction.

(d) The costs, fees and expenditures associated with the issuance of bonds are to be reasonably related to the services provided.

E. Only corporations, the formations of which have been approved by the governing body of a county, having a population of more than nine per cent of the total state population computed according to the most recent United States decennial census or by the governing body of a municipality having a population of more than nine per cent of the total state population computed, according to the most recent United States decennial census, shall have the powers granted in subsection A, paragraphs 11, 12 and 13 of this section. Except as provided in section 35‑913, subsections E and F, a corporation shall not exercise the powers granted in subsection A, paragraphs 11, 12 and 13 of this section outside of its jurisdiction. For the purposes of a refunding of any mortgage revenue bond issued before January 1, 2000, the proceeds from the refunding may be used outside the jurisdiction of the corporation issuing the refunding bonds except the corporation issuing the refunding bonds shall obtain the consent from another corporation with powers granted in subsection A, paragraphs 11, 12 and 13 of this section if the proceeds of the refunding are to be used within the jurisdiction of that corporation. For the purposes of exercising the powers granted in subsection A, paragraphs 11, 12 and 13 of this section, the jurisdiction of a corporation formed on behalf of a county includes all incorporated and unincorporated territory in the county.

F. A corporation may not permit proceeds of bonds or a qualified mortgage credit certificate program to be used to finance projects which that are owner‑occupied single family dwelling units within the corporate limits of an incorporated city or town unless the governing body of the city or town has approved the general location and character of the residences to be financed. The corporation shall, prior to the issuance of bonds or mortgage credit certificates for that purpose, give written notice to the governing body of each city or town in which it intends to permit proceeds of an issue of bonds or mortgage credit certificates to be used to finance projects which that are owner‑occupied single family dwelling units and of the general location and character of the residences which may be financed. The governing body of the city or town shall be deemed to have given its approval unless it has denied approval by formal action of the governing body within twenty‑one days after receiving the written notice from the corporation. Approvals given or deemed to have been given with respect to use of proceeds of an issue of bonds or mortgage credit certificates under this subsection may not be withdrawn. Denials may be withdrawn by the governing body of a city or town and approval may be given thereafter if the corporation issuing the bonds or mortgage credit certificates approves the withdrawal of the denial.

G. Two or more corporations with the powers granted by subsection E of this section may provide:

1. That a corporation, the formation of which was approved by the governing body of a county or city, may exercise the powers granted in subsection A, paragraphs 11, 12 and 13 of this section, with respect to owner‑occupied single family dwelling units located in all counties and cities which that are parties to a cooperative agreement.

2. For the joint exercise by two or more corporations, each formed with the approval of a governing body executing the cooperative agreement, of the powers granted in subsection A, paragraphs 11, 12 and 13 of this section, with respect to owner‑occupied single family dwelling units located in all counties and cities which that are parties to the cooperative agreement. The agreement shall specify the calendar year or years for which it is effective, the means by which the agreement may be terminated prior to the expiration of the calendar year or years and the aggregate principal amount of bonds which that may be issued by the designated corporation or corporations to exercise the powers pursuant to the agreement. The corporation or corporations designated in the agreement to exercise the powers in the counties and cities which that are parties to the agreement are the only corporation or corporations authorized and having jurisdiction to exercise the powers and to issue bonds to carry out the powers in the counties and cities while the agreement is in effect. The combined jurisdictions of all the counties and cities which that are parties to the cooperative agreement are the jurisdictions of the corporation or corporations designated to exercise the powers granted in subsection A, paragraphs 11, 12 and 13 of this section within the meaning of the mortgage subsidy bond tax act of 1980 (P.L. 96-499; 26 United States Code section 103A).

H. It shall not be a conflict of interest under title 38, chapter 3, article 8, and this chapter, for any trustee or any mortgage lender to enter into loan agreements with, or to sell mortgage loans to, the corporation as contemplated in subsection A, paragraphs 11, 12 and 13 of this section, act for or under contract with the corporation as a mortgage originator, servicer, paying agent or depository, act as holder or dealer of bonds of the corporation, or have as a director, officer or employee any member of the board of directors of the corporation or any combination.

I. The department of economic security shall once in each calendar year on or before March 1 determine the median family income of this state for the purposes of this chapter.

J. All areas in this state which that are either designated pursuant to section 36‑1479 as slum or blighted areas as defined in section 36‑1471 or designated as pockets of poverty by the United States department of housing and urban development are designated as areas of chronic economic distress within the meaning of the mortgage subsidy bond tax act of 1980 (p.L.96-499; 26 United States Code section 103A).

K. Any corporation that is described in subsection E of this section and that desires to exercise the powers granted in subsection A, paragraphs 11, 12 and 13 of this section, with respect to owner‑occupied single family dwelling units located in two or more counties, may do so if the corporation, before issuing bonds or mortgage credit certificates for that purpose, gives written notice to the governing bodies of the other counties and their respective corporations, if any, of its intent to permit the proceeds of an issue of bonds or mortgage credit certificates to finance projects within its jurisdiction which that are owner‑occupied single family dwelling units. The governing body of a county and its respective corporation, if any, which have been given notice are deemed to have approved the use of the proceeds or mortgage credit certificates for owner‑occupied single family dwelling units within their jurisdiction and approved the use of any state ceiling, as defined in section 35‑901, unless approval is denied by formal action of the governing body or the board of directors of the corporation, if any, within twenty‑one days after receiving written notice from the corporation. Absent a denial of approval as stated in this subsection, a cooperative agreement providing for the exercise of the powers granted in subsection A, paragraphs 11, 12 and 13 of this section is deemed to exist among the applicable counties or corporations. Approvals given or deemed to have been given with respect to the matters stated in this subsection may not be withdrawn. Denials by the governing body of a county apply only to the unincorporated areas of the county. Denials may be withdrawn by the governing body of a county and approval may be given thereafter if the corporation issuing the bonds or mortgage credit certificates approves the withdrawal of the denial. Mortgage credit certificates and bond proceeds issued pursuant to this subsection shall be available on an equitable basis within each of the participating counties. END_STATUTE

Sec. 5. Section 35-726, Arizona Revised Statutes, is amended to read:

START_STATUTE35-726. Approval of general plan before issuing bonds; fee; definition

A. Bonds shall not be issued by a corporation for the purpose of financing single family dwelling units pursuant to section 35‑706, subsection A, paragraph 11 or 12 without approval of a general plan by its governing body. The corporation shall submit a general plan for each respective series of bonds to its governing body. The general plan shall briefly describe:

1. The amount of the proposed bonds.

2. The maximum term of the bonds.

3. The maximum interest rate on the bonds.

4. The need for the bond issue.

5. The terms and conditions for originating or purchasing mortgage loans or making loans to lenders.

6. The area in which the single family dwelling units to be financed may be located.

7. The proposed fees, charges and expenditures to be paid for originators, servicers, trustees, custodians, mortgage administrators and others.

8. All insurance requirements with respect to mortgage loans, mortgaged property, mortgagors, originators, servicers and trustees.

9. The anticipated date of issuance of the bonds.

B. The governing body shall review general plans submitted by corporations pursuant to subsection A of this section. In reviewing the plans the governing body shall consider:

1. Whether the amount of the mortgage monies proposed to be made available is reasonably related to the demand for the mortgage monies.

2. Whether the terms of the general plan are justifiable in the context of the transaction and in the context of similar transactions.

3. Whether the fees, costs and expenditures as set forth in the general plan are reasonably related to the services provided.

4. For projects of owner‑occupied single family dwelling units to be occupied by persons of low and moderate income and financed pursuant to section 35‑706, subsection A, paragraphs 11 and 12, whether the proposed mortgage monies to be made available will fulfill a public purpose by providing housing for persons of low and moderate income or by encouraging single family developments in all participating jurisdictions, including such jurisdictions' slum or blighted areas as defined in section 36‑1471.

C. The governing body shall approve or disapprove the general plan not later than thirty days after receipt of the plan. If the governing body does not act upon the general plan within thirty days from the date of receipt, the general plan shall be deemed approved. If a general plan is approved, the corporation may issue the series of bonds covered by the general plan with a total principal amount, maximum term and maximum interest rate no greater than that which is set forth in the general plan. The origination and servicing fees pertaining to mortgage loans to be financed in accordance with the general plan shall not exceed those proposed in the general plan. The corporation may vary other items in the general plan upon a finding that the variation is minor and that the variations will not impair the security for the bonds or substantially increase the cost of financing the single family dwelling units and the findings of the corporation shall be conclusive.

D. The governing body may charge any corporation submitting a general plan for review a fee of not to exceed ten thousand dollars together with reimbursement of its actual costs and expenses incurred in reviewing the general plan.

E. A corporation shall not issue bonds, other than refunding bonds the proceeds of which are used exclusively to refund a prior bond issue, to finance a multifamily residential rental project, sanitarium, clinic, medical hotel, rest home, nursing home, skilled nursing facility or life care facility as prescribed in section 20‑1801, unless the department approves the project. The department, with or without a hearing, shall review the project and consider at least the following factors:

1. The demand for and feasibility of the project in the area set forth in the application to the corporation.

2. The terms and conditions of the proposed bonds.

3. The proposed use of bond proceeds.

4. The benefit to the public if the project provides rental housing for persons of low and moderate income or encourages rental housing in slum or blighted areas as defined in section 36‑1471.

5. If the project consists of a nursing home, or a life care facility as prescribed in section 20‑1801, the benefit to the public of the project, including the proposed rent, fees and other charges of the project in relation to the level of services to be offered.

F. Subsection E of this section does not apply to bonds issued to finance a sanitarium, clinic, medical hotel, rest home, nursing home, skilled nursing facility, or life care facility as prescribed in section 20‑1801, if the facility is to be owned and operated by this state or a political subdivision or agency of this state.

G. The department with or without a hearing shall approve or disapprove the project not later than thirty days after receipt of the request for approval. If the project is approved the corporation may issue the bonds described in the approval request with the total principal amount, maximum term and maximum interest rate no greater than as set forth in the request. The department shall charge each applicant submitting a project approval request pursuant to this subsection a fee of not to exceed five thousand dollars together with reimbursement of its actual costs and expenses incurred in reviewing the project. Beginning on October 1, 2002, the department shall remit the fees to the state treasurer for deposit in the Arizona department of housing program fund established by section 41‑3957.

H. For the purposes of this section, "department" means the Arizona department of housing. END_STATUTE

Sec. 6. Heading change

The article heading of title 36, chapter 12, article 3, Arizona Revised Statutes, is changed from "SLUM CLEARANCE AND REDEVELOPMENT" to "SLUM CLEARANCE".

Sec. 7. Section 36-1471, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1471. Definitions

In this article, unless the context otherwise requires:

1. "Area of operation" means the area within the territorial boundaries of the municipality.

2. "Blighted area" means an area, other than a slum area, where sound municipal growth and the provision of housing accommodations is substantially retarded or arrested in a predominance of the properties by any of the following:

(a) A dominance of defective or inadequate street layout.

(b) Faulty lot layout in relation to size, adequacy, accessibility or usefulness.

(d) Deterioration of site or other improvements.

(e) Diversity of ownership.

(f) Tax or special assessment delinquency exceeding the fair value of the land.

(g) Defective or unusual conditions of title.

(h) Improper or obsolete subdivision platting.

(i) The existence of conditions that endanger life or property by fire and other causes.

3. 2. "Bonds" means any bonds, including refunding bonds, notes, interim certificates, debentures or other obligations.

4. 3. "Clerk" means the clerk or other official of the municipality who is the custodian of the official records of the municipality.

5. 4. "Commission" or "slum clearance and redevelopment commission" means an agency of a municipality created pursuant to section 36‑l476.

5. "Developer" means a property owner, person, partnership or public or private corporation or agency that enters into or proposes to enter into a slum clearance contract.

6. "Economic development" means any activity to increase tax revenue, tax base, employment or general economic health if that activity does not result in a public use.

6. 7. "Federal government" includes the United States or any agency or instrumentality, corporate or otherwise, of the United States.

7. 8. "Local governing body" means the council or other legislative body charged with governing the municipality.

8. 9. "Mayor" means the mayor of a municipality or other officer or body having the duties customarily imposed upon on the executive head of a municipality.

9. 10. "Municipality" means any incorporated city or town in the state.

10. 11. "Obligee" includes any bondholder, agents or trustees for any bondholders, or lessor demising to the municipality property used in connection with a redevelopment slum clearance project, or any assignee or assignees of a lessor's interest or any part thereof, and the federal government when it is a party to any contract with the municipality.

11. 12. "Person" means any individual, firm, partnership, corporation, company association, joint stock association or body politic, and includes any trustee, receiver, assignee or other similar representative thereof.

12. 13. "Public body" means the state or any municipality, county, village, board, commission, authority, district or any other subdivision or public body of the state.

14. "Public use"

(a) Means:

(i) The possession, occupation and enjoyment of the land by the public at large or by public agencies.

(ii) The use of land for the creation or the functioning of public utilities.

(iii) The acquisition of property in a slum area to cure an immediate threat caused by the current use of the land, including the removal of structures that are beyond repair or that are unfit for human habitation or use.

(iv) The acquisition of abandoned property.

(b) Does not include an increase in tax base, tax revenues, employment or general economic health.

13. 15. "Real property" includes all lands, including improvements and fixtures on the land, and property of any nature appurtenant to the land, or used in connection with the land, and every estate, interest and right, legal or equitable therein, including terms for years and liens by way of judgment, mortgage or otherwise and the indebtedness secured by the liens.

14. "Redeveloper" means any person, partnership or public or private corporation or agency which enters or proposes to enter into a redevelopment contract.

15. "Redevelopment contract" means a contract entered into between a municipality and a redeveloper for the redevelopment of an area in conformity with a redevelopment plan.

16. "Redevelopment plan" means a plan, other than a preliminary or tentative plan, for the acquisition, clearance, reconstruction, rehabilitation or future use of a redevelopment project area.

17. "Redevelopment project":

(a) Means any work or undertaking:

(i) To acquire slum or blighted areas or portions of these areas and lands, structures or improvements, the acquisition of which is necessary or incidental to the proper clearance or redevelopment of these areas or to the prevention of the spread or recurrence of slum conditions or conditions of blight in the area.

(ii) To clear any areas by demolition or removal of existing buildings, structures, streets, utilities or other improvements thereon and to install, construct or reconstruct streets, utilities and site improvements essential to the preparation of sites for uses in accordance with a redevelopment plan.

(iii) To sell, lease or otherwise make available land in areas for residential, recreational, commercial, industrial or other use or for public use or to retain land for public use, in accordance with a redevelopment plan.

(b) Includes the preparation of a redevelopment plan, the planning, surveying and other work incident to a redevelopment project and the preparation of all plans and arrangements for carrying out a redevelopment project.

18. "Slum area" means an area in which both of the following are true:

(a) There is a predominance of buildings or improvements, whether residential or nonresidential.

(b) The public health, safety or welfare is threatened because of any of the following:

(i) Dilapidated, deteriorated, aging or obsolescent buildings or improvements.

(ii) The inadequate provision for ventilation, light, air, sanitation or open spaces.

(iii) Overcrowding.

(iv) The existence of conditions that endanger life or property by fire and other causes.

16. "Slum area" means an area in which a predominance of buildings, whether residential or nonresidential, are maintained in a slum condition and where the municipality has determined that the existing slum conditions cannot be corrected by regulatory processes or by the ordinary operations of private enterprise without acting pursuant to this article.

17. "Slum clearance contract" means a contract entered into between a municipality and a developer for the removal of slum conditions in a slum area in conformity with a slum clearance plan.

18. "Slum clearance plan" means a plan, other than a preliminary or tentative plan, for the acquisition, clearance, reconstruction, rehabilitation or future use of a slum area.

19. "Slum clearance project":

(a) Means any work or undertaking:

(i) To acquire slum area or portions of these areas, and lands, structures or improvements that are necessary to acquire in order to properly clear or remove slum conditions from these areas or to the prevent the spread or recurrence of slum conditions in these areas.

(ii) To clear any areas by demolition or removal of existing buildings, structures, streets, utilities or other improvements on the area and to install, construct or reconstruct streets, utilities and site improvements essential to prepare sites for uses in accordance with a slum clearance plan.

(iii) To sell, lease or otherwise make available land in slum areas for residential, recreational, commercial, industrial or other use or for public use or to retain land for public use, in accordance with a slum clearance plan.

(b) Includes the preparation of a slum clearance plan, the planning, surveying and other work incident to a slum clearance project and the preparation of all plans and arrangements for carrying out a slum clearance project.

20. "Slum condition" means that a building, whether residential or nonresidential, is unhealthy or unsafe for persons to live or work because of any of the following:

(a) Physical conditions.

(b) Serious building code violations.

(d) Structures that are beyond repair or that are unfit for human habitation or use.

(e) Abandoned property.

(f) The existence of physical conditions that endanger life or property by fire.

(g) Other causes that jeopardize the health and safety of persons living or working in the building. END_STATUTE

Sec. 8. Section 36-1472, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1472. Legislative findings

It is declared:

1. That there exist in municipalities of the state slum or blighted areas which constitute a serious and growing menace, injurious and inimical to that represent serious health and safety concerns and that jeopardize the public health, safety, morals and welfare of the residents of the state.

2. That the existence of these areas contributes substantially and increasingly to the spread of disease and crime, necessitating excessive and disproportionate expenditures of public funds for the preservation of the public health and safety, for crime prevention, correction, prosecution, punishment and the treatment of juvenile delinquency and for the maintenance of adequate police, fire and accident protection and other public services and facilities, constitutes an economic and social liability, substantially impairs or arrests the sound growth of municipalities and retards the provision of housing accommodations.

3. That this menace is these slum areas are sometimes beyond remedy and control solely by regulatory process in the exercise of the police power and cannot be dealt with effectively by the ordinary operations of private enterprise without the aids provided by this article.

4. That the acquisition of property for the purpose of eliminating the conditions or preventing recurrence of these conditions in the a slum area, the removal of structures and improvement of sites, the disposition of the property for redevelopment slum clearance and any assistance which that may be given by any public body in connection with these activities are public uses and purposes for which public money may be expended and the power of eminent domain exercised.

5. That the necessity in the public interest for the provisions of this article is declared as a matter of legislative determination.

5. That the fundamental purpose of any slum clearance project is to protect the physical health and safety of all citizens and not economic development.

6. That the question of whether the acquisition of property by eminent domain is necessary is a judicial question to be determined without regard to any legislative assertion that the acquisition is necessary. END_STATUTE

Sec. 9. Section 36-1473, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1473. Designation of slum area or areas by municipality

A. A municipality shall not exercise any of the powers conferred on municipalities by this article until its local governing body adopts a resolution by a two‑thirds vote finding that one or more slum areas exist in the municipality and that the removal of slum conditions in that area or areas is in the interest of the public health, safety, morals or welfare of the residents of the municipality. both of the following:

1. One or more slum or blighted areas exist in the municipality.

2. The redevelopment of that area or areas is necessary in the interest of the public health, safety, morals or welfare of the residents of the municipality.

B. Before a municipality makes a finding that a slum area or areas exists, the municipality must prepare:

1. Maps and plats that show:

(a) The proposed boundaries of the slum area or areas.

(b) The location of the various parcels of real property that exhibit slum conditions, including a detailed description of the specific slum conditions existing on each parcel and a statement as to why the municipality believes those conditions cannot be corrected by regulatory processes or by the ordinary operations of private enterprise without resort to this article.

2. Lists of the owners of the parcels of real property that are being maintained in a slum condition.

3. An estimate of the cost of acquisition and slum clearance if the owners of the real property identified as being maintained in a slum condition fail to remove or clear the identified slum conditions in conformance with a valid slum clearance plan approved pursuant to section 36‑1479.

B. c. A municipality must notify the owner of real property that is within the boundaries of a proposed redevelopment slum clearance area, including owners of real property identified in subsection B, paragraph 1, subdivision (c) of this section, of the time, date and location of a public meeting concerning the findings. The municipality must provide this notice by first class mail to the address stated on the most recent records of the county assessor. END_STATUTE

Sec. 10. Section 36-1474, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1474. Powers of municipalities

A. Every municipality shall have has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this article, including the following powers in addition to others granted by this article:

1. To prepare or cause to be prepared redevelopment slum clearance plans and to undertake and carry out redevelopment slum clearance projects within its area of operation.

2. To arrange or contract for the furnishing or repair, by any person or agency, public or private, of services, privileges, works, streets, roads, public utilities or other facilities for or in connection with a redevelopment slum clearance project, and anything to the contrary contained in this article or any other provision of law notwithstanding, to agree to any conditions that it deems reasonable and appropriate attached to federal financial assistance and imposed pursuant to federal law relating to the determination of prevailing salaries or wages or compliance with labor standards, in the undertaking or carrying out of a redevelopment slum clearance project, and to include in any contract let in connection with a redevelopment slum clearance project, provisions to fulfill the conditions as it deems reasonable and appropriate.

3. Within its area of operation:

(a) To purchase, lease, obtain options upon on, or acquire by gift, grant, bequest, devise, eminent domain or otherwise, any real or personal property or any interest in the property, together with any improvements on the property, necessary or incidental to a redevelopment to a slum clearance project.

(b) To exercise eminent domain as prescribed in this article to clear or remove slum conditions in a slum area.

(b) (c) To hold, improve, clear or prepare for redevelopment slum clearance any such property.

(c) (d) To sell, lease, exchange, transfer, assign, subdivide, retain for its own use, mortgage, pledge, hypothecate or otherwise encumber or dispose of any real or personal property or any interest in the property in a redevelopment project slum clearance area.

(d) (e) To enter into contracts with redevelopers developers of property containing covenants, restrictions and conditions regarding the use of the property for residential, commercial, industrial, recreational or other purposes or for public purposes in accordance with a redevelopment slum clearance plan and the other covenants, restrictions and conditions as the municipality deems necessary to prevent a recurrence of conditions that qualify an area as a slum or blighted area or to effectuate the purposes of this article. A municipality may not exercise the power of eminent domain unless the municipality makes a separate determination by a two‑thirds vote of the local governing body that the property is critical to the project and the existing use of the property is not compatible with the proposed use and cannot be incorporated into or excluded from the proposed redevelopment project.

(e) (f) To make any of the covenants, restrictions or conditions of the foregoing contracts covenants running with the land and to provide appropriate remedies for any breach of these covenants or conditions, including the right in the municipality to terminate these contracts and any interest in the property created pursuant thereto.

(f) (g) To borrow money and issue bonds and provide security for loans or bonds.

(g) (h) To insure or provide for the insurance of any real or personal property or operations of the municipality in a redevelopment slum clearance project of the municipality against any risks or hazards, including the power to pay premiums on the insurance.

(h) (i) To enter into any contracts necessary to effectuate the purposes of this article.

No statutory provision with respect to the acquisition, clearance or disposition of property by public bodies shall restrict restricts a municipality in these functions with respect to a redevelopment project, unless the legislature specifically so states.

4. To invest any redevelopment slum clearance project funds held in reserves or sinking funds or any redevelopment slum clearance project funds not required for immediate disbursement, in property or securities in which savings banks may legally invest funds subject to their control and to redeem the bonds which that have been issued pursuant to section 36‑1481 at the redemption price established therein or to purchase the bonds at less than redemption price, all bonds so redeemed or purchased to be cancelled.

5. To borrow money and to apply for and accept advances, loans, grants, contributions and any other form of financial assistance from the federal government, the state, county or other public body or from any sources, public or private, for the purposes of this article, to give such security as may be required and to enter into and carry out contracts in connection therewith. Notwithstanding any other law, a municipality may include in any contract for financial assistance with the federal government for a redevelopment slum clearance project conditions imposed pursuant to federal law the municipality deems reasonable and appropriate and which that are not inconsistent with the purposes of this article.

6. Within its area of operation, to make or have made all surveys, appraisals, studies and plans, including the preparation of a general plan for the development of the municipality, necessary to carry out the purposes of this article and to contract or cooperate with any and all persons or agencies, public or private, to make and to carry out the surveys, appraisals, studies and plans.

7. To prepare plans and provide reasonable assistance for the relocation of families displaced from a redevelopment slum clearance project area to the extent essential for acquiring possession of and clearing the area or parts of the area to permit the carrying out of the redevelopment slum clearance project.

8. To appropriate funds and make expenditures necessary to carry out the purposes of this article and to make expenditures from funds obtained from the federal government without regard to any other laws pertaining to the making and approval of appropriations and expenditures.

9. To exercise all or any part or combination of powers granted by this section.

B. A municipality must notify each owner of real property located within the boundaries of a proposed redevelopment slum clearance project area of the time, date and location of a public meeting concerning the proposed adoption of the redevelopment slum clearance plan if the municipality intends determines that it may be necessary to acquire by eminent domain that owner's property or any interest in that property to eliminate slum conditions. The municipality must provide this notice by first class mail to the address stated on the most recent records of the county assessor.

C. The designation of an area as a slum or blighted area terminates ten years after this designation unless substantial action has been taken to remove the slum or blighted conditions. The termination does not affect existing projects as described in section 35‑701, paragraph 8, subdivision (a), item (xiv) that are within that designated area.

C. The designation of an area as a slum area terminates five years after a municipality makes that designation unless the municipality has taken substantial action to remove the slum conditions. END_STATUTE

Sec. 11. Section 36-1475, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1475. Delegation of powers of municipalities

In undertaking redevelopment slum clearance projects under this article, every municipality, by resolution of its governing body, may delegate to the slum clearance and redevelopment commission of the municipality, if any, created by it pursuant to section 36‑1476, as an agent of the municipality any or all of the powers conferred upon on municipalities by this article except the power to borrow money, issue bonds, acquire and dispose of real property, enter into contracts with the federal government or any public body, prepare a general plan for the development of the municipality or approve redevelopment slum clearance plans. END_STATUTE

Sec. 12. Section 36-1476, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1476. Slum clearance commission

A. In addition to the other powers conferred by this article a municipality by resolution of its governing body may create a slum clearance and redevelopment commission, which shall be an agent of the municipality for the exercise of powers of the municipality under this article.

B. If the governing body of a municipality adopts a resolution as described in subsection A of this section, the mayor, by and with the advice and consent of the governing body, shall appoint a board of commissioners for the slum clearance and redevelopment commission, which shall consist of five commissioners. Three of the commissioners first appointed pursuant to this article shall be designated to serve for terms of one, two and three years respectively and two commissioners shall be appointed for four years each, from the date of their appointment. After the initial appointment of commissioners, members of the commission shall be appointed for a term of office of four years, except that all vacancies shall be filled for the unexpired term.

C. A commissioner is not eligible to receive compensation but is eligible to receive reimbursement of expenses. Each commissioner shall hold office until a successor has been appointed and has qualified. A certificate of the appointment or reappointment of any commissioner shall be filed with the clerk of the municipality and is conclusive evidence of the due and proper appointment.

D. The powers delegated by a municipality to a slum clearance and redevelopment commission shall be exercised by the commissioners. A majority of the commissioners constitutes a quorum for the purpose of conducting business and exercising the powers of the commission and for all other purposes. Action may be taken by the commission upon a vote of a majority of the commissioners present. Any person may be appointed as a commissioner if the person resides within the area of operation of the commission and is otherwise eligible under this article.

E. The mayor shall designate a chairman and vice‑chairman from among the commissioners. A commission may be authorized by the local governing body to employ an executive director, technical experts and other officers, agents and employees, permanent and temporary, as it requires and to determine their qualifications, duties and compensation. For legal services a commission may, with approval of the mayor, may call upon on the chief law officer of the municipality or it may be authorized by the local governing body to employ its own counsel and legal staff. A commission shall file a report of its activities with the local governing body periodically as the local governing body requires, but at least once a year, and shall make recommendations regarding additional legislation or other action that may be necessary to enable it to carry out the purposes of this article.

F. For inefficiency or neglect of duty or misconduct in office, a commissioner may be removed by the mayor, but a commissioner shall be removed only after a hearing and after the commissioner has been given a copy of the charges at least ten days prior to before the hearing and had an opportunity to be heard in person or by counsel. END_STATUTE

Sec. 13. Section 36-1477, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1477. Interest of public officials, commissioners or employees in project prohibited

A. A public official of a municipality, commissioner or employee of a housing authority or slum clearance and redevelopment commission to which the powers of a municipality have been delegated pursuant to this article shall not voluntarily acquire any interest, direct or indirect, in a redevelopment slum clearance project, or in any property included or planned to be included in a redevelopment slum clearance project of the municipality, in any property within one-half mile of A SLUM clearance project or in any contract or proposed contract in connection with a redevelopment slum clearance project. If an acquisition is not voluntary, the interest acquired shall be immediately disclosed in writing to the local governing body and the disclosure shall be entered upon on the minutes of the governing body.

B. If any official, commissioner or employee presently owns or controls, or owned or controlled within the preceding two years, any interest, direct or indirect, in any property which that the person knows is included or planned by the municipality to be included in any redevelopment slum clearance project, or any property within one-half mile of a slum clearance project, the person shall immediately disclose this fact in writing to the local governing body, and this disclosure shall be entered upon on the minutes of the governing body. The person shall not participate in any action by the municipality, housing authority or commission affecting the property. Any violation of this section shall constitute constitutes misconduct in office. END_STATUTE

Sec. 14. Section 36-1478, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1478. Eminent domain

A. A municipality may acquire by condemnation any interest in real property, including a fee simple title to that real property, that it deems necessary for or in connection with a redevelopment slum clearance project under this article, after the adoption by a two-thirds vote by the local governing body of a resolution declaring that the acquisition of the real property described in that resolution is necessary for those purposes.

B. A municipality may not exercise the power of eminent domain unless the municipality makes a separate determination by a two-thirds vote of the local governing body that the property is maintained in a slum condition and the owner of the property is unwilling or unable to cure the slum condition in accordance with the slum clearance plan.

C. Property may be acquired by condemnation only after it has been demonstrated by clear and convincing evidence that the property is maintained in a slum condition. This showing must be made on a property-by-property basis.

D. Unless a property owner in a slum clearance project area has maintained and is maintaining the property in a slum condition, the power of eminent domain may not be used to acquire that property for transfer to a private party without the owner's consent.

E. The existence of slum conditions sufficient to justify the use of eminent domain may not be presumed for an entire slum area.

F. Notwithstanding any other law, this state or any political subdivision of this state may not use eminent domain to take private property for economic development.

B. G. Before a municipality may initiate a condemnation action it must make a good faith effort to negotiate the purchase of the property. If the municipality determines that it cannot acquire the property without the use of a condemnation action it must notify the property owner of the time, date and location of the public meeting concerning the municipality's proposed action. The municipality must provide this notice by certified mail to the property owner's address as stated on the most recent records of the county assessor.

C. H. The governing body of a municipality must authorize the condemnation of real property by a vote of at least two‑thirds of its members.

D. I. A municipality may exercise the power of eminent domain in the manner provided in articles 2 or 3 of chapter 8, title 12, chapter 8, article 2 or 3 or in the manner provided by any other applicable statutory provisions for the exercise of the power of eminent domain except that a municipality may not request an order permitting immediate possession of the property in connection with a slum clearance project.

E. J. Property already devoted to a public use may be acquired in like manner, but real property belonging to this state or any political subdivision of this state shall not be acquired without its consent. END_STATUTE

Sec. 15. Section 36-1479, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1479. Preparation and approval of slum clearance plans

A. A municipality shall not prepare a redevelopment slum clearance plan for a redevelopment slum clearance project area unless the local governing body, by resolution, has declared the area to be a slum or blighted area in need of redevelopment clearance or the removal of slum conditions. The local governing body shall not consider a redevelopment slum clearance plan for approval until a general plan for the development of the municipality has been prepared. A municipality shall not acquire real property for a redevelopment slum clearance project unless the local governing body has approved the redevelopment slum clearance plan, as prescribed in subsection F G.

B. The municipality may itself prepare or cause to be prepared a redevelopment slum clearance plan. or In addition, any person or agency, public or private, may submit a slum clearance plan to a municipality for a designated slum area. A redevelopment slum clearance plan shall be sufficiently complete to indicate its relationship to definite local objectives as to appropriate land uses, improved traffic, public transportation, public utilities, recreational and community facilities and other public improvements and the proposed land uses and building requirements in the redevelopment slum clearance project area. The plan shall include, at a minimum:

1. A statement of the boundaries of the redevelopment slum clearance project area.

2. A map showing the existing uses and conditions of the real property within the redevelopment slum clearance project area on a property‑by-property basis.

3. A land use plan showing proposed uses of the real property within the redevelopment slum clearance project area.

4. Information showing the standards of population densities, land coverage and building intensities in the area after redevelopment slum clearance.

5. A statement of the proposed changes, if any, in zoning ordinances or maps, street layouts, street levels or grades, building codes and ordinances.

6. A statement of how the owners of the parcels of real property identified as being maintained in a slum condition will be allowed to participate in the slum clearance project so that those owners may be afforded the opportunity to remove or clear the slum conditions in accordance with the slum clearance plan.

7. Alternative provisions, such as the use of eminent domain, for removing or clearing the slum conditions if an owner declines to participate in the slum clearance project or if an owner fails to participate in the slum clearance project after agreeing in writing to remove or clear the slum conditions.

6. 8. A statement as to the kind and number of site improvements and additional public utilities which that will be required to support the new land uses in the area after redevelopment slum clearance.

7. 9. A statement of the proposed method and estimated cost of the acquisition and preparation for redevelopment slum clearance of the redevelopment slum clearance project area and the estimated proceeds or revenues from its disposal to redevelopers developers.

8. 10. A statement of the proposed method of financing the redevelopment slum clearance project.

9. 11. A statement of a feasible method proposed for the relocation of families to be displaced from the redevelopment slum clearance project area.

C. The land uses and building requirements proposed in a redevelopment slum clearance plan shall be designed with the general purpose of accomplishing, in conformance with the general plan. , a coordinated, adjusted and harmonious development of the municipality and its environs which will, in accordance with present and future needs, promote health, safety, morals, order, convenience, prosperity and the general welfare, as well as efficiency and economy in the process of development, and including, among other things, adequate provision for traffic, vehicular parking, the promotion of safety from fire, panic and other dangers, adequate provision for light and air, the promotion of the healthful and convenient distribution of population, the provision of adequate transportation, water, sewerage and other public utilities, schools, parks, recreational and community facilities and other public requirements, the promotion of sound design and arrangement, the wise and efficient expenditure of public funds, the prevention of the recurrence of slum conditions or conditions of blight and the provision of adequate, safe and sanitary dwelling accommodations.

D. Prior to Before its approval of a redevelopment slum clearance plan, the local governing body shall submit a redevelopment slum clearance plan to the planning commission of the municipality, if any, for review and recommendations as to its conformity with the general plan for the development of the municipality as a whole. The planning commission shall submit its written recommendations with respect to the proposed redevelopment slum clearance plan to the local governing body within thirty days after receipt of the plan for review. Upon On receipt of the recommendations of the planning commission or, if no recommendations are received within thirty days, the local governing body may proceed with the hearing on the proposed redevelopment slum clearance plan prescribed by subsection E.

E. The local governing body shall hold a public hearing on any redevelopment slum clearance plan or substantial modification to a plan being considered for approval. A municipality must notify each owner of real property located within the boundaries of a proposed redevelopment slum clearance plan area of the time, date and location of a public meeting concerning the proposed adoption of the redevelopment slum clearance plan. The municipality must provide this notice by first class mail to the address stated on the most recent records of the county assessor. The local governing body shall publish a public notice in a newspaper with a general circulation in the area of operation, once each week for two consecutive weeks, the last publication to be at least ten days prior to before the date set for hearing. The notice shall describe the time, place and purpose of the hearing and shall also generally identify the area to be redeveloped under the plan. All interested parties shall be afforded a reasonable opportunity to express their views respecting the proposed redevelopment slum clearance plan at the hearing.

F. The owners of a building maintained in a slum condition must be permitted to participate in a slum clearance project in conformity with the slum clearance plan.

F. g. Approval of a redevelopment slum clearance plan requires a two‑thirds vote of the local governing body.

G. H. Following the hearing, the local governing body may approve a redevelopment slum clearance plan if it finds that the plan is feasible and in conformity with the general plan for the development of the municipality as a whole. , but if the redevelopment project area is a blighted area, the local governing body must also find that:

1. A shortage of housing of sound standards and design, adequate for family life, exists in the municipality.

2. The need for housing accommodations has been or will be increased as a result of the clearance of slums in other areas under redevelopment.

3. The conditions of blight in the area and the shortage of decent, safe and sanitary housing cause or contribute to an increase in and spread of disease and crime and constitute a menace to the public health, safety, morals or welfare.

4. The development of the area for predominately residential uses is an integral part of and essential to the program of the municipality for the elimination of the slum or blighted area.

H. I. A redevelopment slum clearance plan may be modified at any time, but if modified after the lease or sale of real property in the redevelopment slum clearance project area, the modification shall be consented to by the redeveloper developer or redevelopers developers of real property or a successor or their successors in interest affected by the proposed modification. Any proposed modification which that will substantially change the redevelopment slum clearance plan as previously approved by the local governing body shall be is considered a new plan and shall be is subject to all the requirements of this section before it may be approved. END_STATUTE

Sec. 16. Section 36-1480, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1480. Disposal of property in slum clearance project area

A. A municipality may sell, lease, exchange or otherwise transfer real property or any interest in the property in a redevelopment slum clearance project area to any redeveloper developer for residential, recreational, commercial, industrial or other uses or for public use in accordance with the redevelopment slum clearance plan, subject to covenants, conditions and restrictions as it deems to be in the public interest or to carry out the purposes of this article. The sale, lease, exchange or other transfer, and any related agreement may be made only after, or subject to, the approval of the redevelopment slum clearance plan by the local governing body. Real property shall be sold, leased or transferred at its fair value for uses in accordance with the redevelopment slum clearance plan even though the fair value may be less than the cost of acquiring and preparing the property for redevelopment slum clearance. In determining the fair value of real property for uses in accordance with the redevelopment slum clearance plan, a municipality shall take into account and give consideration to the uses and purposes required by the plan, the restrictions upon on, and the covenants, conditions and obligations assumed by the redeveloper developer of the property, the objectives of the redevelopment slum clearance plan for the prevention of the recurrence of slum or blighted areas, and other matters the municipality specifies as being appropriate.

B. Sale, lease, exchange or other transfer of real property or any interest of the property shall not be made until after public advertising for bids has been made for at least thirty days in a newspaper of general circulation within the municipality and the posting of notices in three or more public places within the municipality. If there is no newspaper within the corporate limits of the municipality, the municipality shall post in three or more public places within the municipality, notices for bidders for the property proposed to be sold.

C. Prior to Before the consideration of any redevelopment slum clearance contract proposal, the municipality shall publish the notice at least once a week for two consecutive weeks in a newspaper having a general circulation in the area of operation, invite proposals from and make all pertinent information available to, private redevelopers developers or any persons interested in carrying out the redevelopment clearance or removal of slum conditions from a slum or blighted area, or any part of a slum or blighted area, which the local governing body has declared to be in need of redevelopment. The notice shall identify the slum or blighted area, and shall state where any further information available may be obtained. The municipality shall consider all redevelopment proposals and the financial, technical and legal ability of the prospective redevelopers developers to carry out their proposals and may negotiate with any redevelopers developers for proposals for the purchase or lease of any real property in the redevelopment slum clearance project area. The municipality, with the approval of the local governing body, may accept redevelopment slum clearance contract proposals it deems to be in the public interest and in furtherance of the purposes of this article and may execute the redevelopment slum clearance contracts in accordance with the provisions of subsection A and deliver deeds, leases and other instruments and take all steps necessary to effectuate the redevelopment slum clearance contracts. In its discretion, the municipality may, without regard to the provisions of this subsection, may dispose of real property in a redevelopment slum clearance project area to private redevelopers developers for redevelopment slum clearance under the reasonable competitive bidding procedures as it prescribes, subject to the provisions of subsection A.

D. A municipality may temporarily operate and maintain real property in a redevelopment slum clearance project area pending the disposition of the property for redevelopment, without regard to the provisions of subsections A, B and C, for uses and purposes deemed desirable even though not slum clearance in conformity with the redevelopment slum clearance plan. If the real property is not disposed of for redevelopment slum clearance within one year, the municipality, immediately upon on expiration of the one year period, shall remove or demolish all buildings thereon in the slum clearance project area. END_STATUTE

Sec. 17. Section 36-1481, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1481. Issuance of bonds

A. A municipality may issue bonds in its discretion to finance the undertaking of any redevelopment slum clearance project under this article, including the payment of principal and interest upon on any advances for surveys and plans for redevelopment slum clearance projects, and may also issue refunding bonds for the payment or retirement of such bonds previously issued by it. Such bonds shall be made payable, as to both principal and interest, solely from the income, proceeds, revenues and funds of the municipality derived from or held in connection with its undertaking and carrying out of redevelopment slum clearance projects under this article, whether or not they are financed in whole or in part with the proceeds of such bonds, but payment of such bonds, both as to principal and interest, may be further or exclusively secured by a pledge of any loan, grant or contribution from the federal government or other source, in aid of any redevelopment slum clearance projects of the municipality undertaken under this article and by a mortgage of any of such redevelopment the slum clearance projects.

B. The bonds and other obligations of the municipality issued pursuant to subsection A of this section are not a general obligation or general debt of the municipality, the state or any of its political subdivisions, and neither the municipality, the state, nor any of its political subdivisions are generally liable for them, nor in any event shall the bonds or obligations give rise to a general obligation or liability of the municipality, the state or any of its political subdivisions, or a charge against their general credit or taxing powers, or be payable from any funds or properties other than those funds or properties specifically described in subsection A of this section and those bonds and obligations shall so state on their face. Bonds issued under this section shall do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Bonds issued under the provisions of this article are declared to be issued for an essential public and governmental purpose, and together with interest thereon and income therefrom, shall be are exempted from all taxes.

C. Bonds issued under this section shall be authorized by resolution of the local governing body, may be issued in one or more series, shall bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, be in such denomination or denominations, be in such form either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, with or without premium, as provided by the resolution or trust indenture or mortgage issued pursuant thereto.

D. Such bonds or any bonds issued to refund such bonds may be sold at public or private sale at such price or prices as may be determined by the local governing body or may be exchanged for other bonds on the basis of par. If sold at public sale, notice shall be published once at least ten days prior to before the sale in a newspaper having a general circulation in the area of operation and in such other medium of publication as the municipality determines.

E. If any of the public officials of the municipality whose signatures appear on any bonds or coupons issued under this article cease to be such officials before delivery of the bonds, their signatures shall nevertheless be valid and sufficient for all purposes the same as if the officials had remained in office until delivery. Any provision of law to the contrary notwithstanding, bonds issued pursuant to this article shall be fully negotiable.

F. In any action or proceedings involving the validity or enforceability of any bond issued under this article or the security for such bond, the recitation in substance in the bond that it has been issued by the municipality in connection with a redevelopment slum clearance project shall be is conclusive proof that the bond was issued for such purpose and such project shall be is conclusively deemed to have been planned, located and carried out in accordance with the purposes and provisions of this article.

G. Neither the members of the governing body of a municipality or a commission nor any persons executing the bonds are liable personally on the bonds by reason of their issuance. END_STATUTE

Sec. 18. Section 36-1482, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1482. Power of municipality to provide additional security for bonds

A. In connection with the issuance of bonds pursuant to section 36‑1481, or the incurring of obligations under leases, and in order to secure the payment of such bonds or obligations, a municipality, in addition to its other powers, may:

1. Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which shall consent thereto and the manner in which such consent may be given.

2. Vest in any obligees the right to enforce the payment of such bonds or any covenants securing or relating to the bonds.

3. Vest in any obligee or obligees holding a specified amount in such bonds the right, in the event of a default, to take possession of and use, operate and manage any redevelopment slum clearance project or any part thereof, title to which is in the municipality, or any funds connected therewith, and to collect the rents and revenues arising therefrom and to dispose of such monies in accordance with the agreement of the municipality with such obligees.

4. Provide for the powers and duties of such obligees and limit the liabilities thereof.

5. Provide the terms and conditions upon on which such obligees may enforce any covenant or rights securing or relating to the bonds.

6. Exercise all or any part or combination of the powers granted by this subsection.

7. Make such covenants and do any and all such acts and things necessary, convenient or desirable in order to secure its bonds, or, in the absolute discretion of the municipality, as will tend to make the bonds more marketable even if such covenants, acts or things are not enumerated in this section.

B. A municipality may by its resolution, trust indenture, mortgage, lease or other contract confer upon on any obligee holding or representing a specified amount in bonds issued pursuant to section 36‑1481, the right following rights, in addition to all rights that may otherwise be conferred, upon on the happening of an event of default as defined in such resolution or instrument, by an action or proceeding in any court of competent jurisdiction:

1. The right to require the municipality and the officials, agents and employees thereof to account as if it and they were the trustees of an express trust. , and

2. The right to obtain the appointment of a receiver of any redevelopment slum clearance project of the municipality or any part thereof, title to which is in the municipality, and of the rents and profits therefrom.

C. If such receiver is appointed, he the receiver may enter and take possession of, carry out, operate and maintain the project or any part thereof and collect and receive all fees, rents, revenues or other charges thereafter arising therefrom, and shall keep such monies in a separate account or accounts and apply them in accordance with the obligations of the municipality as the court directs. END_STATUTE

Sec. 19. Section 36-1486, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1486. Property exempt from execution sale

All property of a municipality, including funds, owned or held by it for the purposes of this article shall be exempt from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against it nor shall judgment against a municipality be a charge or lien upon on such property, but the provisions of this section shall does not apply to or limit the right of obligees to pursue any remedies for the enforcement of any pledge or lien given by a municipality on its rents, fees, grants or revenues from redevelopment slum clearance projects. END_STATUTE

Sec. 20. Section 36-1487, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1487. Cooperation by public bodies

A. For the purpose of aiding in the planning, undertaking or carrying out of a redevelopment slum clearance project located within the area in which it is authorized to act, any public body may, upon on such terms, with or without consideration, as it determines, may:

1. Dedicate, sell, convey or lease any of its interest in any property, or grant easements, licenses or other rights or privileges therein to a municipality.

2. Incur the entire expense of any public improvements made by such public body in exercising the powers granted by this section.

3. Do any and all things necessary to aid or cooperate in the planning or carrying out of a redevelopment slum clearance plan.

4. Lend, grant or contribute funds to a municipality.

5. Employ any funds belonging to such public body or within its control, including funds derived from the sale or furnishing of property, service or facilities to a municipality, in the purchase of the bonds or other obligations of a municipality issued pursuant to section 36‑1481.

6. Enter into agreements, which may extend over any period, any provision or rule of law to the contrary notwithstanding, with a municipality respecting action to be taken by such public body pursuant to any of the powers granted by this article.

7. Where otherwise authorized to perform functions of a similar character:

(a) Cause parks, playgrounds, recreational, water, sewer or drainage facilities, or any other works to be furnished.

(b) Furnish, dedicate, close, vacate, pave, install, grade, regrade, plan or replan streets, roads, sidewalks, ways or other places.

(d) Cause administrative and other services to be furnished to the municipality.

B. If at any time title to or possession of any redevelopment slum clearance project is held by a public body or governmental agency other than the municipality which that is authorized by law to engage in the undertaking, carrying out or administration of redevelopment slum clearance projects, including any agency or instrumentality of the United States, the provisions of the agreements referred to in this section shall inure to the benefit of and may be enforced by such public body or governmental agency.

C. Any sale, conveyance, lease or agreement provided for in this section may be made by a public body without appraisal, public notice, advertisement or public bidding. END_STATUTE

Sec. 21. Section 36-1488, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1488. Use of municipal revenue powers to provide funds for project

Every municipality may use its funds for the purposes of aiding in the planning, undertaking or carrying out of a redevelopment slum clearance project in its area of operation. To obtain funds for this purpose, every municipality may, in addition to other powers set forth in this article, may levy taxes, incur indebtedness and issue bonds in amounts the local governing body determines by resolution necessary for the purpose or raising funds for use in connection with a redevelopment slum clearance project. Any bonds to be issued by the municipality pursuant to this section shall be issued in the manner and within the limitations prescribed by the laws of the state for the issuance and authorization of bonds for public purposes generally. END_STATUTE

Sec. 22. Section 41-1362, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1362. Powers and duties; governmental mall description; duty of city of Phoenix; general plan application

A. The commission may:

1. Accept gifts or grants of monies or other property from any person, including the United States or any agencies, departments or officers of the state.

2. Appoint and employ officers and employees as it deems necessary.

3. Prescribe rules as necessary to carry out the provisions of this article.

B. The commission shall:

1. Elect a chairman from among its members.

2. Develop and maintain and amend as necessary a comprehensive long‑range general plan for the development of the governmental mall comprised of the area described in subsection C of this section.

3. Encourage public agencies as defined in section 11‑951 to enter into intergovernmental agreements or contracts pursuant to title 11, chapter 7, article 3 as necessary to implement the general plan for the development of the governmental mall.

4. Review and approve or disapprove in writing requests for permission to develop structures or sites or award construction contracts for new buildings or improvements within the governmental mall. The commission shall review requests submitted by the state or a political subdivision of this state in which the state or political subdivision has a contractual interest to ensure consistency with the approved general plan.

5. Review all planning activities within governmental mall boundaries.

6. Publish an annual report on the issues brought before the commission and its recommendations.

C. The governmental mall is comprised of the area with a western boundary of nineteenth avenue, a northern boundary of all lots abutting Van Buren street, an eastern boundary of seventh avenue and a southern boundary of the Harrison street alignment.

D. The city of Phoenix annually shall inform the commission of new major development projects and new major infrastructure improvements including but not limited to parks, streets and street‑scaping within the downtown area redevelopment slum clearance plan as defined pursuant to in section 36‑1471.

E. If the general plan of the city, county or state agency for land development does not conform with the general plan developed by the commission for the development of the governmental mall, the general plan developed by the commission for the development of the governmental mall applies and shall be enforced. END_STATUTE

Sec. 23. Section 42-6203, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6203. Rates of tax

A. Except as otherwise provided in this section, the tax authorized by this article shall be levied and collected at the following rates:

1. One dollar per square foot of gross building space for office buildings with one floor above ground.

2. One dollar twenty‑five cents per square foot of gross building space for office buildings with more than one but fewer than eight floors above ground.

3. One dollar seventy‑five cents per square foot of gross building space for office buildings with eight floors or more above ground.

4. One dollar fifty cents per square foot of retail building space, including space that is devoted to the sale of tangible personal property, restaurants, health clubs, hair salons, dry cleaners, travel agencies and other retail services.

5. One dollar fifty cents per square foot of hotel or motel building space.

6. Seventy‑five cents per square foot of warehouse or industrial building space.

7. Fifty cents per square foot of residential rental building space.

8. One hundred dollars per parking space located in a parking garage or deck.

9. One dollar per square foot of all other government property improvements not included in paragraphs 1 through 8 of this subsection.

B. The tax rate for government property improvements for which the original certificate of occupancy was issued:

1. At least ten years but less than twenty years before the date the tax is due is eighty per cent of the rate provided in subsection A of this section.

2. At least twenty years but less than thirty years before the date the tax is due is sixty per cent of the rate provided in subsection A of this section.

3. At least thirty but less than forty years before the date the tax is due is forty per cent of the rate provided in subsection A of this section.

4. At least forty but less than fifty years before the date the tax is due is twenty per cent of the rate provided in subsection A of this section.

5. Fifty or more years before the date the tax is due is zero.

C. If no certificate of occupancy can be located, dated aerial photographs or other evidence of substantial completion may be used to determine the age of the building for purposes of subsection B of this section.

D. The tax rate for a government property improvement that was constructed pursuant to a lease or development agreement entered into from and after June 30, 1996 and that is located outside a slum or blighted area established pursuant to title 36, chapter 12, article 3 is one and one‑half times the rate established by subsections A and B of this section.

E. Within the first twenty years after the issuance of the original certificate of occupancy, the tax rate on the use or occupancy of a government property improvement is twenty per cent of the rate established in subsections A and B of this section for any of the following:

1. Government property improvements that are subject to leases or agreements that were entered into before April 1, 1985, and options and rights contained in the leases or agreements.

2. Government property improvements that are subject to leases entered into based on a redevelopment contract, as defined in section 36‑1471, entered into before April 1, 1985.

3. Government property improvements that are subject to leases entered into based on an agreement for a redevelopment project for which federal grant monies have been received and that was entered into before April 1, 1985.

4. Government property improvements that are located at an airport that was owned on or before January 1, 1988 by a county having a population of four hundred thousand persons or less or by a city or town that is located in a county having a population of four hundred thousand persons or less if the property is used primarily for manufacturing, retail, distribution, research or commercial purposes. In For the purposes of this paragraph, "commercial" includes facilities for office, recreational, hotel, motel and service uses.

F. Within the first ten years after the issuance of the certificate of occupancy, the tax rate on the use or occupancy of a government property improvement that is located in a slum or blighted area established pursuant to title 36, chapter 12, article 3, resulted or will result in an increase in property value of at least one hundred per cent and is not eligible for abatement pursuant to section 42‑6209 is eighty per cent of the rate established in subsections A and B of this section.

G. The tax rate to be applied under subsection A of this section shall be determined by the predominant use to which the government property improvement is devoted, except that in all cases the tax rate prescribed by subsection A, paragraph 8 of this section shall be applied to any parking garage or deck. If there is no single predominant use, the tax shall be determined by applying the appropriate tax rate to the building space devoted to each use identified in that subsection. For the purposes of this subsection, the functional area of a government property improvement does not include subsidiary, auxiliary or servient areas such as lobbies, stairwells, mechanical rooms and meeting and banquet rooms. For the purposes of this subsection, "predominant use" means the use to which eighty‑five per cent or more of the functional area of a government property improvement is devoted.

H. Prime lessees of government property improvements who become taxable or whose taxable status terminates during the calendar year in which the taxes are due, including prime lessees subject to exemption or abatement under sections 42‑6208 and 42‑6209, shall pay tax for that calendar year on a pro rata basis. END_STATUTE

Sec. 24. Section 42-6209, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6209. Abatement of tax for government property improvements in single central business district

A. A government lessor shall abate the tax provided for under this article for a limited period beginning when the certificate of occupancy is issued and ending eight years after the certificate of occupancy is issued on a government property improvement that is constructed either before or after July 20, 1996 and that meets the following requirements:

1. The improvement is located in a single central business district in a slum or blighted area that is established pursuant to title 36, chapter 12, article 3 and is subject to a lease or development agreement entered into on or after April 1, 1985.

2. The government property improvement resulted or will result in an increase in property value of at least one hundred per cent.

B. Unless waived by the government lessor, the prime lessee shall apply for the abatement before the taxes under this article are due and payable in the first year after the certificate of occupancy is issued. The prime lessee shall notify the government lessor if the government property improvement no longer qualifies for abatement under this section. END_STATUTE

Sec. 25. Section 48-571, Arizona Revised Statutes, is amended to read:

START_STATUTE48-571. Definitions; appointment of officer

A. In this article and article 1 of this chapter, unless the context otherwise requires:

1. "Assessment" or "assessment roll" means a special assessment made under the provisions of this article.

2. "Block" means any parcel of ground, whether regular or irregular, which that is bounded by streets, or by one or more streets and by one or more boundary lines of the city or town.

3. "Clerk" includes any person or official who performs the duties of clerk of the city or town.

4. "Contractor" includes the contractor's personal representative or assignee.

5. "Council" or "governing body" includes and means the body or board which that by law is constituted the legislative department of an incorporated city or town.

6. "Delinquency" means delinquency in the payment of an assessment made under the provisions of this article.

7. "Designated area" means an area of the municipality which that is either designated pursuant to section 36‑1479 as a slum or blighted area or designated as a pocket of poverty or a neighborhood strategy area by the United States department of housing and urban development, pursuant to title I of the housing and community development act of 1977, as amended (P.L. 95‑128; 42 United States Code sections 5301 through 5320) and the department of housing and urban development act (P.L. 89-174; 42 United States Code section 3535(d)).

8. "Engineer" includes any person who, under whatever official name, is the civil engineer or surveyor of the city or town, and where if there is no elected or appointed official, then the engineer is the person who may be appointed or employed by the council to perform the duties required of an engineer under the provisions of this article.

9. "Improvement bond" means a bond issue under the provisions of this article.

10. "Lighting plants" includes electric light plants, electric power plants, gas plants, distribution systems, poles, parts, pipes, conduits, wires, tanks, reservoirs, generators for gas or electricity, transmission lines, towers, lamps, transformers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete municipal electric light, power and gas plant and distribution system, placed on the streets improved, though extended beyond.

11. "Lot" includes any portion, piece, parcel or subdivision of land, and includes property owned or controlled by any person as a railroad right‑of‑way.

12. "Mayor" includes the chairman or president of the governing body.

13. "Municipality" or "city" includes incorporated cities and towns.

14. "Owner" means the person in whom, on the day the action or proceeding is commenced, appears the legal title to the lot by deed recorded in the recorder's office, or the person in possession of the lot under claim of title, or exercising acts of ownership over the lot for the person, or as the personal representative of the owner.

15. "Railroad" includes street railroad and interurban railroad.

16. "Sewers" includes tunnels, excavations, ditches, drains, conduits, channels, outlets, outfalls, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete sewer system, for either sanitary or drainage purposes.

17. "Street" includes avenues, alleys, highways, lanes, crossings, intersections, courts, places and grounds now open or dedicated or hereafter opened or dedicated to public use, and public ways.

18. "Street superintendent" or "superintendent" includes any person who, under whatever official name, is charged with the care or supervision of the streets of the city or town.

19. "Time of delinquency" means the time fixed when assessments become delinquent.

20. "Treasurer" includes any person who, under whatever official name, is the custodian of the funds of the city or town.

21. "Waterworks" includes pipes, hydrants, reservoirs, wells, pumps, pumping plants, conduits, settling basins, filtering plants of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete municipal waterworks system, for fire protection, or for domestic irrigation, mechanical or power purposes, placed on the streets improved, though extended beyond.

22. "Work" or "improvement" includes any or all of the improvements mentioned and authorized to be made in this article and article 1 of this chapter and the construction, reconstruction and repair of all or any portion of the improvements, and all labor, services, incidental expenses and material necessary or incidental to the construction, reconstruction or repair.

B. In any city or town having no officer in this article designated, or performing like duties, the governing body may appoint a suitable person to discharge the duties. END_STATUTE

Sec. 26. Section 48-574, Arizona Revised Statutes, is amended to read:

START_STATUTE48-574. Improvement districts for operation, maintenance, repair and improvement of pedestrian malls, off‑street parking facilities and parkings and parkways

A. In addition to the purposes for which an improvement district may be formed under the provisions of section 48‑572, an improvement district may be formed for the sole purpose of the operation, maintenance, repair and improvements of pedestrian malls, off‑street parking facilities, and parkings and parkways.

B. Subject to the powers granted and the limitations contained in this section, the powers and duties of the governing body of the municipality and the procedure to be followed shall be as provided in this article for other types of special improvement districts.

C. If a petition for the formation of an improvement district under the provisions of this section is presented to the governing body purporting to be signed by all of the real property owners in the proposed district, exclusive of mortgagees and other lienholders, the governing body, after verifying the property ownership and making a finding of that fact, shall adopt a resolution of intention to order the improvement pursuant to the provisions of section 48‑576 and shall have immediate jurisdiction to adopt the resolution ordering the improvement pursuant to the provisions of section 48‑581, without the necessity of the publication and posting of the resolution of intention provided for in section 48‑578.

D. The governing body shall make annual statements and estimates of the expenses of the district, which shall be provided for either:

1. By the levy and collection of ad valorem taxes upon on the assessed value of all the real and personal property in the district.

2. By assessment of the total sum upon on the several lots, each respectively in proportion to the benefits to be received by each lot.

E. If the expenses of the district are provided for by ad valorem taxes, the governing body shall publish notice, have hearings and adopt the taxes at the times and in the manners provided for incorporated cities and towns by the applicable portions of title 42, chapter 17, article 3. The governing body, on or before the third Monday in August of each year, shall fix, levy and assess the amount to be raised by ad valorem taxes upon all of the property of the district. If the expenses of the district are assessed upon on the several lots in proportion to the benefits received by each lot, the governing body shall follow the procedures established in section 48‑575 for the assessment and collection of the assessments. All statutes providing for the levy and collection of general county taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, shall be applicable to the district taxes provided for under this section.

F. An improvement district formed under the provisions of this section shall not be authorized to issue improvement bonds.

G. No improvement district formed under the provisions of this section shall be authorized to engage in any activity other than as provided in subsection A of this section. If the municipality is willing to participate in the cost of the district, the governing body may, by resolution, may summarily order such participation.

H. The formation of an improvement district under the provisions of this section shall not prevent the subsequent establishment of improvement districts for any other purpose authorized by law.

I. If, in the opinion of the governing body, any portion of the territory of a district formed under this section is no longer benefited by being a part of the district, the governing body may, by resolution, may summarily delete from the district formed under this section any area and may form a new district from the balance of the original district formed under this section.

J. If, in the opinion of the governing body, territory adjacent to a district formed under this section would benefit from being a part of the district, the governing body, by resolution, may include the territory in the district formed under this section if the following conditions are met:

1. Improvements that meet the standards and specifications established by the governing body have been constructed in the territory and will be used for the purposes of the district.

2. Any required public dedications of property have been made or will be made before the inclusion of the territory in the district.

3. Including the territory in the district will not adversely affect the district.

4. Notice of the proposed inclusion of the territory in the district has been published in five consecutive issues of a daily newspaper or two consecutive issues of a weekly or semiweekly newspaper of general circulation published in the municipality and a public hearing has been held to consider the inclusion of the territory in the district.

5. Notice has been sent by first class mail at least ten days prior to before the hearing specified in paragraph 4 of this subsection with an accurate map of the territory proposed for inclusion in the district to each owner of real and personal property within the district and in the proposed area of inclusion as shown on the statement furnished pursuant to subsection K of this section that is now or would be subject to taxation by the district in the event of inclusion of the proposed area.

K. The county assessor and the department of revenue, respectively, shall furnish to the district within thirty days after a request a statement in writing showing the name and the address of each owner of real and personal property within the district and in the proposed area of inclusion that is now or that would be subject to taxation by the district in the event of inclusion of the proposed area.

L. Within ten days after the governing body adopts a resolution pursuant to subsection J of this section, the municipality shall record the resolution in the office of the county recorder in the county in which the district is located to give notice of the inclusion of the territory in the district to all property owners in the district. If, before the governing body adopts the resolution pursuant to subsection J of this section, a majority of the property owners, by area, of either the original district formed under this section or the territory proposed to be included in the district files with the governing board written objections to the proposed inclusion of the territory, the territory shall not be included in the district.

M. Within ten days after adoption of the resolution of intention to order the improvement pursuant to section 48‑576, the municipality shall record the resolution in the office of the county recorder in the county in which the district is located to give notice of formation of the district to all property owners within the district.

N. For the purposes of this subsection, a property owner is an owner of real property, exclusive of mortgagees and other lienholders, that is within an improvement district that was formed as prescribed by this section. A property owner may petition the governing body to dissolve the district pursuant to the following procedures:

1. A property owner shall file with the clerk of the governing body in which the district is located a written notice of the property owner's intent to circulate a petition to dissolve the district. The notice shall include the name, address and telephone number of at least one property owner living within the district who intends to circulate the petition, the name, location and general purpose of the district which is to be dissolved and a true and concise statement of two hundred words or less explaining the advantages of dissolving the district. A petition shall not be circulated for thirty days after the property owner files with the governing body the notice of intent to circulate a dissolution petition.

2. The governing body may provide a form of petition to be used to dissolve the district. Any petition shall include the statement provided in the notice of intent to circulate a petition regarding the advantages of dissolving the district.

3. The governing body may provide a true and concise written statement of two hundred words or less regarding the petition or dissolution of the district. If so provided, the property owner must circulate this statement affixed to the petition.

4. Property owners shall submit to the clerk of the governing body a petition for the dissolution of an improvement district formed under this section that purports to be signed by more than fifty per cent of the property owners in the district.

5. Within twenty days of receipt of the signed petition, the governing body shall verify that the petition is signed by more than fifty per cent of the property owners as set forth in paragraph 4 of this subsection.

6. If the governing body finds the petition contains valid signatures of more than fifty per cent of the property owners, the governing body shall set the date for dissolution of the district within ninety days. The district may continue to operate after dissolution only as needed to collect money and make payments on any outstanding district obligations.

7. Each property in the district with outstanding assessments or liens attached shall remain subject to those assessments or liens for payment of the existing obligations of the district, notwithstanding dissolution of the district.

8. If a district formed under this section subsequently dissolves as prescribed in this subsection, the governing body may not attempt to form any district for the same purpose for at least two years after the date the district is dissolved if the proposed district includes lands formerly located within the dissolved district.

O. Districts that are located in slum or blighted areas as defined in section 36‑1471 are exempt from subsection N of this section. END_STATUTE

Sec. 27. Section 48-709, Arizona Revised Statutes, is amended to read:

START_STATUTE48-709. Powers of a community facilities district

A. In addition to the powers otherwise granted to a district pursuant to this article, a district may to further the general plan:

1. Enter into contracts and expend monies for any public infrastructure purpose with respect to the district.

2. Enter into intergovernmental agreements as prescribed in title 11, chapter 7, article 3 for the planning, design, inspection, ownership, control, maintenance, operation or repair of public infrastructure or the provision of enhanced municipal services by the municipality in the district.

3. Sell, lease or otherwise dispose of district property if the sale, lease or conveyance is not a violation of the terms of any contract or bond resolution of the district.

4. Reimburse the municipality for providing enhanced municipal services in the district.

5. Operate, maintain and repair public infrastructure.

6. Establish, charge and collect user fees, rates or charges for the use of any public infrastructure or service.

7. Employ staff, counsel and consultants.

8. Reimburse the municipality or county for staff and consultant services and support facilities supplied by the municipality or county.

9. Accept gifts or grants and incur and repay loans for any public infrastructure purpose.

10. Enter into agreements with landowners and the municipality or county for the collection of fees and charges from landowners for public infrastructure purposes, the advance of monies by landowners for public infrastructure purposes or the granting of real property by the landowner for public infrastructure purposes.

11. By resolution, levy and assess the costs of any public infrastructure purpose on any land benefited in the district.

12. Pay the financial, legal and administrative costs of the district.

13. Enter into contracts, agreements and trust indentures to obtain credit enhancement or liquidity support for its bonds and process the issuance, registration, transfer and payment of its bonds and the disbursement and investment of proceeds of the bonds.

14. With the consent of the governing body of the municipality or county which formed the district, enter into agreements with persons outside of the district to provide services to persons and property outside of the district.

15. Use public easements and rights‑of‑way in or across public property, roadways, highways, streets or other thoroughfares and other public easements and rights‑of‑way, whether in or out of the geographical limits of the district, the municipality or the county.

B. This article does not authorize:

1. A district to acquire, construct, operate or maintain an electric generation or distribution system or natural gas distribution system without the written consent of any affected public service corporation, electric cooperative, agricultural improvement or power district or other district described in article XIII, section 7, Constitution of Arizona, the service area of which encompasses all or part of the district, if that entity is providing or is capable of adequately providing electrical utility service or natural gas utility service in the district.

2. A district to provide service outside its boundaries without the written consent of any affected public service corporation, electric cooperative, agricultural improvement or power district or other district described in article XIII, section 7, Constitution of Arizona, with a service area that lies outside of the district, if that entity is providing or is capable of adequately providing electrical utility service or natural gas utility service in the area that the district proposes to serve.

C. If a district is granted written consent pursuant to this section, the district shall provide a copy to the governor, the president of the senate, the speaker of the house of representatives and each commissioner of the Arizona corporation commission no later than thirty days after consent is granted.

D. In connection with any power authorized by statute, the district may:

1. Contract.

2. Enter into intergovernmental agreements pursuant to title 11, chapter 7, article 3.

3. Adopt and change a seal.

4. Sue and be sued.

5. Enter into development agreements, as defined in section 9‑500.05.

6. Exercise the same right and power of eminent domain as a public service corporation pursuant to title 12, chapter 8, articles 2 and 3 to acquire any property or right‑of‑way, except political subdivision, county, state or federal property, for any public infrastructure purpose.

E. A district which proposes to provide domestic water service in the certificated area of a public service corporation serving domestic water shall provide just compensation to the public service corporation pursuant to section 9‑516.

F. Public infrastructure other than personalty may be located only in or on lands owned by the state, a county, a municipality or the district or dedicated or otherwise designated as public roadways, highways, streets, thoroughfares, easements or rights‑of‑way, whether in or out of the district or the municipality. Personalty may be used only for purposes authorized by the district board. School sites and facilities, by agreement, may be transferred to a school district.

G. An agreement pursuant to subsection A, paragraph 10 of this section may include agreements to repay all or part of such advances, fees and charges from the proceeds of bonds if issued or from advances, fees and charges collected from other landowners or users or those having a right to use any public infrastructure. A person does not have authority to compel the issuance or sale of the bonds of the district or the exercise of any taxing power of the district to make repayment under any agreement.

H. A district shall not contract with a municipality for enhanced municipal services unless the area for which the services are to be provided is designated by the municipality as a slum or blighted area pursuant to title 36, chapter 12, or an urban core business district of the municipality determined by formal resolution of the municipality to be in need of enhanced municipal services to encourage or preserve commercial development in the area.

I. Notwithstanding title 34 or article 2 of this chapter, the district at the option of the district board may enter into contracts for the performance of district projects with landowners in the district after calling for bids but before publishing notice of the award of a contract if all of the following conditions are met:

1. The landowner or landowners own three‑fourths or more of the total land area of the district.

2. The landowner or landowners contract to perform the work at a cost which does not exceed the cost specified in the bid of the bidder who would have been awarded that bid.

3. The work for which the contract was let is to be financed pursuant to this article.

4. All contracts and work executed pursuant to this section are subject to those rules as the district board may prescribe. END_STATUTE

Sec. 28. Existing slum clearance and redevelopment area designations

A. All slum clearance and redevelopment area designations existing before the effective date of this act are terminated.

B. This act applies to all condemnation actions filed but not yet concluded before the effective date of this act.