SB1448 - 532R

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

Section 1. Section 9-461.05, Arizona Revised Statutes, is amended to read:

START_STATUTE9-461.05. General plans; authority; scope

A. Each planning agency shall prepare and the governing body of each municipality shall adopt a comprehensive, long‑range general plan for the development of the municipality. The planning agency shall coordinate the production of its general plan with the creation of the state land department conceptual land use plans under title 37, chapter 2, article 5.1 and shall cooperate with the state land department regarding integrating the conceptual state land use plans into the municipality's general land use plan. The general plan shall include provisions that identify changes or modifications to the plan that constitute amendments and major amendments. The plan shall be adopted and readopted in the manner prescribed by section 9‑461.06.

B. The general plan shall be so prepared that all or individual elements of it may be adopted by the governing body and that it may be made applicable to all or part of the territory of the municipality.

C. The general plan shall consist of a statement of community goals and development policies. It shall include maps, any necessary diagrams and text setting forth objectives, principles, standards and plan proposals. The plan shall include the following elements:

1. A land use element that:

(a) Designates the proposed general distribution and location and extent of such uses of the land for housing, business, industry, agriculture, recreation, education, public buildings and grounds, open space and other categories of public and private uses of land as may be appropriate to the municipality.

(b) Includes a statement of the standards of population density and building intensity recommended for the various land use categories covered by the plan.

(c) Identifies specific programs and policies that the municipality may use to promote infill or compact form development activity and locations where those development patterns should be encouraged.

(d) Includes consideration of air quality and access to incident solar energy for all general categories of land use.

(e) Includes policies that address maintaining a broad variety of land uses, including the range of uses existing in the municipality when the plan is adopted, readopted or amended.

(f) For cities and towns with territory in the vicinity of a military airport or ancillary military facility as defined in section 28‑8461, includes consideration of military airport or ancillary military facility operations. On or before December 31, 2005, if a city or town includes land in a high noise or accident potential zone as defined in section 28‑8461, the city or town shall identify the boundaries of the high noise or accident potential zone in its general plan for purposes of planning land uses in the high noise or accident potential zone that are compatible with the operation of the military airport or ancillary military facility pursuant to section 28‑8481, subsection J.

(g) Includes sources of currently identified aggregates from maps that are available from state agencies, policies to preserve currently identified aggregates sufficient for future development and policies to avoid incompatible land uses, except that this subdivision shall not be construed to affect any permitted underground storage facility or limit any person's right to obtain a permit for an underground storage facility pursuant to title 45, chapter 3.1.

2. A circulation element consisting of the general location and extent of existing and proposed freeways, arterial and collector streets, bicycle routes and any other modes of transportation as may be appropriate, all correlated with the land use element of the plan.

D. For cities and towns having a population of more than two thousand five hundred persons but less than ten thousand persons and whose population growth rate exceeded an average of two per cent percent per year for the ten year ten‑year period before the most recent United States decennial census and for cities and towns having a population of ten thousand or more persons according to the most recent United States decennial census, the general plan shall include, and for other cities and towns the general plan may include:

1. An open space element that includes:

(a) A comprehensive inventory of open space areas, recreational resources and designations of access points to open space areas and resources.

(b) An analysis of forecasted needs, policies for managing and protecting open space areas and resources and implementation strategies to acquire additional open space areas and further establish recreational resources.

(c) Policies and implementation strategies designed to promote a regional system of integrated open space and recreational resources and a consideration of any existing regional open space plans.

2. A growth area element, specifically identifying those areas, if any, that are particularly suitable for planned multimodal transportation and infrastructure expansion and improvements designed to support a planned concentration of a variety of uses, such as residential, office, commercial, tourism and industrial uses. This element shall include policies and implementation strategies that are designed to:

(a) Make automobile, transit and other multimodal circulation more efficient, make infrastructure expansion more economical and provide for a rational pattern of land development.

(b) Conserve significant natural resources and open space areas in the growth area and coordinate their location to similar areas outside the growth area's boundaries.

(c) Promote the public and private construction of timely and financially sound infrastructure expansion through the use of infrastructure funding and financing planning that is coordinated with development activity.

3. An environmental planning element that contains analyses, policies and strategies to address anticipated effects, if any, of plan elements on air quality, water quality and natural resources associated with proposed development under the general plan. The policies and strategies to be developed under this element shall be designed to have community‑wide applicability and shall not require the production of an additional environmental impact statement or similar analysis beyond the requirements of state and federal law.

4. A cost of development element that identifies policies and strategies that the municipality will use to require development to pay its fair share toward the cost of additional public service needs generated by new development, with appropriate exceptions when in the public interest. This element shall include:

(a) A component that identifies various mechanisms that are allowed by law and that can be used to fund and finance additional public services necessary to serve the development, including bonding, special taxing districts, development fees, in lieu fees, facility construction, dedications and service privatization.

(b) A component that identifies policies to ensure that any mechanisms that are adopted by the municipality under this element result in a beneficial use to the development, bear a reasonable relationship to the burden imposed on the municipality to provide additional necessary public services to the development and otherwise are imposed according to law.

5. A water resources element that addresses:

(a) The known legally and physically available surface water, groundwater and effluent supplies.

(b) The demand for water that will result from future growth projected in the general plan, added to existing uses.

(c) An analysis of how the demand for water that will result from future growth projected in the general plan will be served by the water supplies identified in subdivision (a) of this paragraph or a plan to obtain additional necessary water supplies.

E. The general plan shall include for cities of fifty thousand persons or more and may include for cities of less than fifty thousand persons the following elements or any part or phase of the following elements:

1. A conservation element for the conservation, development and utilization of natural resources, including forests, soils, rivers and other waters, harbors, fisheries, wildlife, minerals and other natural resources. The conservation element may also cover:

(a) The reclamation of land.

(b) Flood control.

(d) Regulation of the use of land in stream channels and other areas required for the accomplishment of the conservation plan.

(e) Prevention, control and correction of the erosion of soils, beaches and shores.

(f) Protection of watersheds.

2. A recreation element showing a comprehensive system of areas and public sites for recreation, including the following and, if practicable, their locations and proposed development:

(a) Natural reservations.

(b) Parks.

(d) Beaches.

(e) Playgrounds and playfields.

(f) Open space.

(g) Bicycle routes.

(h) Other recreation areas.

3. The circulation element provided for in subsection C, paragraph 2 of this section shall also include for cities of fifty thousand persons or more and may include for cities of less than fifty thousand persons recommendations concerning parking facilities, building setback requirements and the delineations of such systems on the land, a system of street naming and house and building numbering and other matters as may be related to the improvement of circulation of traffic. The circulation element may also include:

(a) A transportation element showing a comprehensive transportation system, including locations of rights‑of‑way, terminals, viaducts and grade separations. This element of the plan may also include port, harbor, aviation and related facilities.

(b) A transit element showing a proposed system of rail or transit lines or other mode of transportation as may be appropriate.

4. A public services and facilities element showing general plans for police, fire, emergency services, sewage, refuse disposal, drainage, local utilities, rights‑of‑way, easements and facilities for them.

5. A public buildings element showing locations of civic and community centers, public schools, libraries, police and fire stations and other public buildings.

6. A housing element consisting of standards and programs for the elimination of substandard dwelling conditions, for the improvement of housing quality, variety and affordability and for provision of adequate sites for housing. This element shall contain an identification and analysis of existing and forecasted housing needs. This element shall be designed to make equal provision for the housing needs of all segments of the community regardless of race, color, creed or economic level.

7. A conservation, rehabilitation and redevelopment element consisting of plans and programs for:

(a) The elimination of slums slum, transformation, reinvestment and blighted areas.

(b) Community redevelopment, including housing sites, business and industrial sites and public building sites.

8. A safety element for the protection of the community from natural and artificial hazards, including features necessary for such protection as evacuation routes, peak load water supply requirements, minimum road widths according to function, clearances around structures and geologic hazard mapping in areas of known geologic hazards.

9. A bicycling element consisting of proposed bicycle facilities such as bicycle routes, bicycle parking areas and designated bicycle street crossing areas.

10. An energy element that includes:

(a) A component that identifies policies that encourage and provide incentives for efficient use of energy.

(b) An assessment that identifies policies and practices that provide for greater uses of renewable energy sources.

11. A neighborhood preservation and revitalization element, including:

(a) A component that identifies city programs that promote home ownership, that provide assistance for improving the appearance of neighborhoods and that promote maintenance of both commercial and residential buildings in neighborhoods.

(b) A component that identifies city programs that provide for the safety and security of neighborhoods.

F. The water resources element of the general plan does not require:

1. New independent hydrogeologic studies.

2. The city or town to be a water service provider.

G. The land use element of a general plan of a city with a population of more than one million persons shall include protections from encroaching development for any shooting range that is owned by this state and that is located within or adjacent to the exterior municipal boundaries on or before January 1, 2004. The general plan shall establish land use categories within at least one‑half mile from the exterior boundaries of the shooting range that are consistent with the continued existence of the shooting range and that exclude incompatible uses such as residences, schools, hotels, motels, hospitals or churches except that land zoned to permit these incompatible uses on August 25, 2004 are exempt from this exclusion. For the purposes of this subsection, "shooting range" means a permanently located and improved area that is designed and operated for the use of rifles, shotguns, pistols, silhouettes, skeet, trap, black powder or any other similar sport shooting in an outdoor environment. Shooting range does not include:

1. Any area for the exclusive use of archery or air guns.

2. An enclosed indoor facility that is designed to offer a totally controlled shooting environment and that includes impenetrable walls, floor and ceiling, adequate ventilation, lighting systems and acoustical treatment for sound attenuation suitable for the range's approved use.

3. A national guard facility located in a city or town with a population of more than one million persons.

4. A facility that was not owned by this state before January 1, 2002.

H. The policies and strategies to be developed under these elements shall be designed to have community‑wide applicability and this section does not authorize the imposition of dedications, exactions, fees or other requirements that are not otherwise authorized by law. END_STATUTE

Sec. 2. Section 28-7511, Arizona Revised Statutes, is amended to read:

START_STATUTE28-7511. Bonds; freeway mitigation; matching amount

A. A city or town may issue general obligation bonds for the purpose of planning, undertaking and carrying out projects for the elimination of present slum, transformation, reinvestment and blighted areas and the prevention of the development of those conditions in the future by mitigating the effects of existing and proposed freeway conditions on cities, towns and neighborhoods. The projects may include acquiring land for recreation, water, sewage and drainage facilities, streets, sidewalks, ways and other public places and other projects to develop or redevelop affected areas.

B. The board may use bond monies obtained pursuant to section 28‑7510 to match on a one to one basis the city or town general obligation bond monies obtained pursuant to this section to provide funding for expenses related to mitigation measures on property located within the department's right‑of‑way. If a city or town obtains bond monies pursuant to this section for the purpose of mitigating the effects of proposed freeway conditions on cities, towns and neighborhoods, this state shall not construct the freeway unless the board agrees to the mitigation measures proposed by the city or town. 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. "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.

3. "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 and aid to the blind or persons with total disability, but excluding separate payments for hospital or other medical care.

4. "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 thirty‑year real estate mortgage financing.

5. "Municipality" or "county" means the Arizona finance authority, 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.

6. "Persons of low and moderate income" means, for the purposes of financing owner‑occupied single family dwelling units in areas that the municipality has found, pursuant to section 36‑1479, to be slum, transformation, reinvestment 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.

7. "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 this state or 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 the Arizona finance authority, a municipality or a 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) A health care institution as defined in section 36‑401.

(iv) 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.

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

(vi) Convention or trade show facilities.

(vii) 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.

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

(ix) Industrial park facilities.

(x) Air or water pollution control facilities.

(xi) 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 technical education school district.

(xii) Research and development facilities.

(xiii) Any commercial enterprises, including facilities for manufacturing, office, recreational, hotel, motel and service uses.

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

(xv) A transportation facility constructed or operated pursuant to title 28, chapter 22.

(xvi) A museum operated by a nonprofit organization.

(xvii) Facilities owned or operated by a nonprofit organization described in section 501(c) of the United States internal revenue code of 1986.

(xviii) New or existing correctional facilities within this state.

(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.

8. "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.

9. "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.

10. "Single family dwelling unit" includes any new, used or manufactured house that meets the insuring requirements of the federal housing administration, the United States department of veterans affairs 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 has the following powers, together with all powers incidental or necessary for the performance of 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 on 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 on 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 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, that 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 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 that is approved by the federal home loan mortgage corporation or the federal national mortgage association and 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 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 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, that 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 is to finance directly or indirectly the acquisition, construction, improvement or equipping of projects 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 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 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.

16. To exercise the powers granted by this chapter, including through the issuance of bonds, to provide financing or refinancing for projects other than a project as defined in section 35‑701, paragraph 7, subdivision (a), item (ii), located in whole or in part outside this state, provided that the board of directors of the corporation has determined that the exercise of such powers will provide a benefit within this state.

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 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, that 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 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, transformation, reinvestment 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 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 United States department of veterans affairs 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 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 percent 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, transformation, reinvestment or blighted area as defined in section 36‑1471 shall be reserved for at least a three month three‑month period for the financing of mortgage loans on manufactured housing unless the Arizona commerce authority determines 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 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 seven percent 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 seven percent 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 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, prior to before the issuance of bonds or mortgage credit certificates for that purpose, shall 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 that are owner‑occupied single family dwelling units and of the general location and character of the residences that may be financed. The governing body of the city or town shall be is 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 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 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 before the expiration of the calendar year or years and the aggregate principal amount of bonds 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 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 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 is 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 that are either designated pursuant to section 36‑1479 as slum, transformation, reinvestment 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 that are owner‑occupied single family dwelling units. The governing body of a county and its respective corporation, if any, that 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.

L. The corporation within thirty days shall upon on actual notice notify the governing body of:

1. Any lawsuit filed against the corporation related to the issuance of bonds.

2. Any formal investigation of the corporation initiated by the United States securities and exchange commission. END_STATUTE

Sec. 5. Section 35-708, Arizona Revised Statutes, is amended to read:

START_STATUTE35-708. Financing certain owner‑occupied single family dwellings; exception

A. For the purposes of section 35‑701, paragraph 6, in areas other than a slum, transformation, reinvestment or blighted area, the authority undertaking the bond issue shall set aside for sixty days thirty percent of the mortgages for owner‑occupied single family dwelling units for persons and families whose income is below the median family income of this state.

B. This section does not apply to projects described in section 35‑701, paragraph 7, subdivision (a), item (iii) or programs established pursuant to section 35‑706, subsection A, paragraph 14. END_STATUTE

Sec. 6. 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, transformation, reinvestment 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 on the general plan within thirty days after 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 on 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 are 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. Except for a corporation approved by the Arizona finance authority or a governing body of a county or a municipality having a population of more than seven percent of the total state population, 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, transformation, reinvestment 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:

1. 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.

2. A nursing home, rest home, skilled nursing facility, life care facility or senior residential facility providing on-site medical and support services if the facility is owned and operated by a nonprofit organization that is exempt from taxation under section 501(c)(3) of the United States internal revenue code.

G. Except for a corporation that is exempt under subsection E of this section, 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. 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. 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" or "reinvestment area" means an area, other than a slum or transformation 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. "Bonds" means any bonds, including refunding bonds, notes, interim certificates, debentures or other obligations.

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

5. "Commission" or "slum clearance and redevelopment commission" means an agency of a municipality created pursuant to section 36‑1476.

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

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

8. "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. "Municipality" means any incorporated city or town in the this state.

10. "Obligee" includes any bondholder, agents or trustees for any bondholders, or lessor demising to the municipality property used in connection with a redevelopment 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. "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. "Public body" means the this state or any municipality, county, village, board, commission, authority, district or any other subdivision or public body of the this state.

13. "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 that 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, transformation, reinvestment 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" or "transformation 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. END_STATUTE

Sec. 8. Section 36-1473, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1473. Finding of necessity by local governing body

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 both of the following:

1. One or more slum, transformation, reinvestment 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. A municipality must notify the owner of real property that is within the boundaries of a proposed redevelopment project area 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. 9. 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 plans and to undertake and carry out redevelopment 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 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 project, and to include in any contract let in connection with a redevelopment project, provisions to fulfill the conditions as it deems reasonable and appropriate.

3. Within its area of operation:

(a) To purchase, lease, obtain options on, 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 project.

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

(c) 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.

(d) To enter into contracts with redevelopers 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 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, transformation, reinvestment 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) 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) To borrow money and issue bonds and provide security for loans or bonds.

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

(h) 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 a municipality in these functions with respect to a redevelopment project, unless the legislature specifically so states.

4. To invest any redevelopment project funds held in reserves or sinking funds or any redevelopment 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 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 project conditions imposed pursuant to federal law that the municipality deems reasonable and appropriate and 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 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 project.

8. To appropriate funds monies 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 project area of the time, date and location of a public meeting concerning the proposed adoption of the redevelopment plan if the municipality intends to acquire that owner's property or any interest in that property. 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, transformation, reinvestment 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 7, subdivision (a), item (xi) that are within that designated area. END_STATUTE

Sec. 10. Section 36-1479, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1479. Preparation and approval of redevelopment plans

A. A municipality shall not prepare a redevelopment plan for a redevelopment project area unless the local governing body, by resolution, has declared the area to be a slum, transformation, reinvestment or blighted area in need of redevelopment. The local governing body shall not consider a redevelopment 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 project unless the local governing body has approved the redevelopment plan, as prescribed in subsection F of this section.

B. The municipality may itself prepare or cause to be prepared a redevelopment plan or any person or agency, public or private, may submit a plan to a municipality. A redevelopment 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 project area. The plan shall include, at a minimum:

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

2. A map showing the existing uses and conditions of the real property within the redevelopment project area.

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

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

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 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.

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

8. A statement of the proposed method of financing the redevelopment project.

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

C. The land uses and building requirements proposed in a redevelopment 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 that 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 plan, the local governing body shall submit a redevelopment 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 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 plan prescribed by subsection E of this section.

E. The local governing body shall hold a public hearing on any redevelopment 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 plan area of the time, date and location of a public meeting concerning the proposed adoption of the redevelopment 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 plan at the hearing.

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

G. Following the hearing, the local governing body may approve a redevelopment 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 or reinvestment 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. A redevelopment plan may be modified at any time, but if modified after the lease or sale of real property in the redevelopment project area, the modification shall be consented to by the redeveloper or redevelopers 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 plan as previously approved by the local governing body shall be considered a new plan and shall be subject to all the requirements of this section before it may be approved. END_STATUTE

Sec. 11. Section 36-1480, Arizona Revised Statutes, is amended to read:

START_STATUTE36-1480. Disposal of property in redevelopment project area

A. A municipality may sell, lease, exchange or otherwise transfer real property or any interest in the property in a redevelopment project area to any redeveloper for residential, recreational, commercial, industrial or other uses or for public use in accordance with the redevelopment 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 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 plan even though the fair value may be less than the cost of acquiring and preparing the property for redevelopment. In determining the fair value of real property for uses in accordance with the redevelopment 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 of the property, the objectives of the redevelopment plan for the prevention of the recurrence of slum, transformation, reinvestment 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 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 or any persons interested in carrying out the redevelopment of a slum, transformation, reinvestment or blighted area, or any part of a slum, transformation, reinvestment or blighted area, which the local governing body has declared to be in need of redevelopment. The notice shall identify the slum, transformation, reinvestment 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 to carry out their proposals and may negotiate with any redevelopers for proposals for the purchase or lease of any real property in the redevelopment project area. The municipality, with the approval of the local governing body, may accept redevelopment contract proposals it deems to be in the public interest and in furtherance of the purposes of this article and may execute the redevelopment contracts in accordance with the provisions of subsection A of this section and deliver deeds, leases and other instruments and take all steps necessary to effectuate the redevelopment contracts. In its discretion, the municipality may, without regard to the provisions of this subsection, dispose of real property in a redevelopment project area to private redevelopers for redevelopment under the reasonable competitive bidding procedures as it prescribes, subject to the provisions of subsection A of this section.

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

Sec. 12. Section 42-6203, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6203. Rates of tax

A. Except as otherwise provided in this section, if a lease of a government property improvement was entered into before June 1, 2010, or if a development agreement, ordinance or resolution was approved by the governing body of the government lessor before June 1, 2010 that authorized a lease on the occurrence of specified conditions and the lease was entered into within ten years after the date the development agreement was entered into or the ordinance or resolution was approved by the governing body and the lease was determined by the department of revenue to be in compliance with this subsection:

1. The tax authorized by this article shall be levied and collected at the following rates:

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

(b) 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.

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

(d) 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.

(e) One dollar fifty cents per square foot of hotel or motel building space.

(f) Seventy‑five cents per square foot of warehouse or industrial building space.

(g) Fifty cents per square foot of residential rental building space.

(h) One hundred dollars per parking space located in a parking garage or deck.

(i) One dollar per square foot of all other government property improvements not included in subdivisions (a) through (h) of this paragraph.

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

(a) At least ten years but less than twenty years before the date the tax is due is eighty percent of the rate provided in paragraph 1 of this subsection.

(b) At least twenty years but less than thirty years before the date the tax is due is sixty percent of the rate provided in paragraph 1 of this subsection.

(c) At least thirty but less than forty years before the date the tax is due is forty percent of the rate provided in paragraph 1 of this subsection.

(d) At least forty but less than fifty years before the date the tax is due is twenty percent of the rate provided in paragraph 1 of this subsection.

(e) Fifty or more years before the date the tax is due is zero.

3. 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 paragraph 2 of this subsection.

4. A lease or development agreement, originally subject to this subsection, that is subsequently amended remains subject to this subsection if the amended lease or development agreement meets all of the following requirements:

(a) The government lessor determines that the amendment furthers the original purpose of the lease or development agreement.

(b) Any land added under the amendment is contiguous to the land under the original lease or development agreement and does not increase the land area under the original lease or development agreement by more than fifty percent.

(c) Any government property improvement added under the amendment does not increase the area of gross building space of government property improvements under the original lease or development agreement by more than one hundred percent.

B. Except as otherwise provided in this section, if a lease of a government property improvement does not meet the conditions for applying subsection A of this section:

1. Subject to paragraphs 2 and 3 of this subsection, the tax authorized by this article shall be levied and collected at the following base rates, which apply through December 31, 2011:

(a) Two dollars per square foot of gross building space for office buildings with one floor above ground.

(b) Two dollars thirty cents per square foot of gross building space for office buildings with more than one but fewer than eight floors above ground.

(c) Three dollars ten cents per square foot of gross building space for office buildings with eight floors or more above ground.

(d) Two dollars fifty-one 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.

(e) Two dollars per square foot of hotel or motel building space.

(f) One dollar thirty-five cents per square foot of warehouse or industrial building space.

(g) Seventy-six cents per square foot of residential rental building space.

(h) Two hundred dollars per parking space located in a parking garage or deck.

(i) Two dollars per square foot of all other government property improvements not included in subdivisions (a) through (h) of this paragraph.

2. If, in the tax year in which the lease of the government property improvement is entered into, the aggregate of all ad valorem property tax rates of all taxing jurisdictions in which the government property improvement is located is at least ninety percent of the countywide average combined property tax rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently adjusted pursuant to paragraph 3 of this subsection, applies with respect to that government property improvement. If, in the tax year in which the lease of the government property improvement is entered into, the aggregate of all ad valorem property tax rates of all taxing jurisdictions in which the government property improvement is located is less than ninety percent of the countywide average combined property tax rates, the rate of tax prescribed by paragraph 1 of this subsection, as currently adjusted pursuant to paragraph 3 of this subsection, shall be reduced by ten percent.

3. On or before December 1, 2011 and December 1 of each year thereafter, for all government property leases that are subject to this subsection, the department of revenue shall adjust the tax rates that apply under paragraphs 1 and 2 of this subsection in the following calendar year for each property use according to the average annual positive or negative percentage change for the two most recent fiscal years in the producer price index for new construction or its successor index published by the United States bureau of labor statistics. On or before December 15 of each year, the department shall post the adjusted rates for the following calendar year on its official website and transmit the adjusted rates to each county treasurer.

C. 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, transformation, reinvestment 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.

D. 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 percent 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. For the purposes of this paragraph, "commercial" includes facilities for office, recreational, hotel, motel and service uses.

E. 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, transformation, reinvestment or blighted area established pursuant to title 36, chapter 12, article 3, that resulted or will result in an increase in property value of at least one hundred percent and that is not eligible for abatement pursuant to section 42‑6209 is eighty percent of the rate established in subsections A and B of this section.

F. The tax rate to be applied under subsection A or B 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 1, subdivision (h) or subsection B, paragraph 1, subdivision (h) 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, in applying the tax rates under subsection A of this section 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 percent or more of the functional area of a government property improvement is devoted.

G. 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. 13. Section 42-6206, Arizona Revised Statutes, is amended to read:

START_STATUTE42-6206. Leases and development agreements; notice of tax liability; approval requirements; default

A. Each lease or development agreement between a prime lessee and a government lessor entered into after June 30, 1996 shall include:

1. A notice of the tax liability under this article.

2. A provision that failure by the prime lessee to pay the tax after notice and an opportunity to cure is an event of default that could result in divesting the prime lessee of any interest in or right of occupancy of the government property improvement.

B. Except as provided by subsection C of this section, each lease or development agreement between a prime lessee and a government lessor for a government property improvement located in a slum, transformation, reinvestment or blighted area that is established pursuant to title 36, chapter 12, article 3, that is entered into from and after May 31, 2010 and that does not meet the conditions provided in section 42‑6203, subsection A:

1. Shall not be approved unless the government lessor:

(a) Notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval. The notice must include the name and address of the intended prime lessee, the location and proposed use of the government property improvement and the proposed term of the lease or development agreement.

(b) Determines that, within the term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the development agreement or lease on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor. The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body. A lease or development agreement between a prime lessee and a government lessor involving residential rental housing is exempt from the economic estimate analysis requirements of this subsection subdivision.

2. Must be approved by a simple majority vote of the governing body without the use of a consent calendar.

C. A lease or development agreement that is subject to subsection B of this section must provide that the lease begins within ten years after approval of the development agreement and the term of the lease does not exceed twenty-five years, including any abatement period authorized under section 42‑6209, and regardless of whether the lease is transferred or conveyed to subsequent prime lessees during that period. As soon as reasonably practicable but within twelve months after the expiration date of the lease the government lessor must convey to the current prime lessee title to the government property improvement and underlying land unless the parcel is controlled by an airport subject to federal regulation or by the local federal transit authority. Property conveyed to the prime lessee under this subsection does not qualify for classification as class six property or for any other discounted assessment regardless of the location or condition of the property.

D. Subsections B and C of this section do not apply if the government lessor is acting as a commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a public purpose.

E. No Not later than June 30 of each year the government lessor shall provide the county assessor with a complete list of development agreements between the government lessor and the prime lessees, including the commencement and termination dates of the agreements, the names and addresses of the prime lessees and the locations of the properties that are subject to the agreements. END_STATUTE

Sec. 14. 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 city or town may 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 the city or town and is subject to a lease or development agreement entered into on or after April 1, 1985. For the purposes of this section:

(a) A city or town shall not designate more than one central business district within its corporate boundaries.

(b) A city or town shall not approve or enter into a development agreement or lease for a government property improvement within one year after the designation of the central business district in which the improvement is located.

(c) "Central business district" means a single and contiguous geographical area that is designated by resolution of the governing body of the city or town and that is both of the following:

(i) Located entirely within a slum, transformation, reinvestment or blighted area that is established pursuant to title 36, chapter 12, article 3.

(ii) Geographically compact and no not larger than the greater of five percent of the total land area within the exterior boundaries of the city or town or six hundred forty acres.

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

B. The prime lessee shall notify the county treasurer and the government lessor and 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.

C. Except as provided by subsection D of this section, each lease between a prime lessee and a government lessor for which the tax is abated under this section and that is entered into from and after May 31, 2010, and that does not meet the conditions provided in section 42‑6203, subsection A, must be approved by a simple majority vote of the governing body without the use of a consent calendar and shall not be approved unless:

1. The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval. The notice must include the name and address of the intended prime lessee, the location and proposed use of the government property improvement and the proposed term of the lease or development agreement.

2. The government lessor determines that, within the term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the development agreement or lease on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor. The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body. A lease or development agreement between a prime lessee and a government lessor involving residential rental housing is exempt from the economic estimate analysis requirements of this paragraph.

3. The lease or development agreement provides that the government lessor may not approve an amendment to change the use of the government property improvement during the period of abatement unless:

(a) The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval. The notice must include the name and address of the prime lessee, the location and proposed use of the government property improvement and the remaining term of the lease or development agreement.

(b) The government lessor determines that, within the remaining term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the change in the lease or development agreement on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor. The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body. A change in use under a lease or development agreement between a prime lessee and a government lessor to residential rental housing is exempt from the economic estimate analysis requirements of this subdivision.

D. Subsection C of this section does not apply if:

1. The tax is not abated under this section.

2. The government lessor is acting as a commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a public purpose.

E. Notwithstanding section 42‑6206, subsection C, beginning with development agreements, ordinances or resolutions for the lease of government property improvements approved by the governing body of the government lessor from and after December 31, 2016, the lease period for a property for which the tax is abated under this section may not exceed eight years, including any abatement period, regardless of whether the lease is transferred or conveyed to subsequent prime lessees during that period. As soon as reasonably practicable but within twelve months after the expiration date of the lease, the government lessor must convey to the current prime lessee title to the government property improvement and the underlying land. Property conveyed to the prime lessee under this subsection does not qualify for classification as class six property or for any other discounted assessment regardless of the location or condition of the property. This subsection does not apply to leases or the development agreements for the lease of government property if either of the following occurred before January 1, 2017:

1. A corresponding resolution or ordinance for the lease or intent to lease such property subject to this section was approved by the governing body of the government lessor.

2. A proposal was submitted to the government lessor in response to a request for proposals. END_STATUTE

Sec. 15. 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 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, transformation, reinvestment 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 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. 16. 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, retention and detention basins 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, retention and detention basins 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 are 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 on 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, 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, 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 that 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 percent 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 percent 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 percent 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 monies 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, transformation, reinvestment or blighted areas as defined in section 36‑1471 are exempt from subsection N of this section. END_STATUTE

Sec. 17. 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 that 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 not 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 that 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.

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, transformation, reinvestment 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 that 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.