Assigned to COMPS FOR
COMMITTEE
Assigned to COMPS FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
community facilities districts; directors
Purpose
An emergency measure that allows a community facilities district (CFD) to provide for the designation of subsequent board members upon term expiration or vacancy.
Background
On the petition of 25 percent of land owners, a governing body may adopt a resolution declaring its intention to form a CFD. The resolution must include: 1) the applicable land area; 2) the purpose of the CFD; 3) a general plan to be filed with the clerk; 4) the date, time and place of the hearing to form the CFD; 5) the location to send written objections; 6) that the formation of the CFD may result in a levy of taxes to pay the cost of CFD made improvements; 7) a reference to applicable special taxing district statute; and 8) whether the CFD is to be run by a board that consists of members of the governing body, ex officio, or, if more than 600 acres, five directors appointed by the governing body (A.R.S. § 48-702).
CFDs have the authority to enter into contracts and spend money to operate and maintain public infrastructure. If legally permitted, the CFDs can sell, lease or dispose of property and establish, charge and collect user fees and rates (A.R.S. § 48-709). Constructed or acquired projects as shown in the general plan may be financed by: 1) proceeds from the sale of CFD bonds; 2) contributions from the municipality, county, state, federal government or private sector; 3) annual tax levies; 4) special assessments; 5) grants from the state or federal governments; 6) landowner, user and other fees and charges; 7) proceeds from loans or advances; or 8) any other legally available money (A.R.S. § 48-717).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows a CFD resolution to provide for the designation of subsequent board members upon term expiration or vacancy caused by death, resignation or an inability to discharge duties.
2. Adds two additional members, selected by the largest land owner in the CFD, to the board designated to govern in a CFD formation order.
3. Establishes six-year terms for the two additional CFD directors appointed by the largest land owner and provides for their vacancies to be filled by the governing body as prescribed by the CFD application, or by the current, largest land owner if no process is prescribed.
4. Allows a CFD smaller than 600 acres to be governed by a district board consisting of five directors appointed by the governing body.
5. Stipulates that following an election approving a CFD, the governing body only appoints initial directors who are not members of the governing body, ex officio.
6. Makes technical and conforming changes.
7. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Prepared by Senate Research
February 8, 2018
GH/lb