Chapter 0071 - 562R - H Ver of HB2381

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

Section 1. Section 48-262, Arizona Revised Statutes, is amended to read:

START_STATUTE48-262. District boundary changes; procedures; notice; hearing; determinations; petitions

A. Except as prescribed by subsection I of this section, a fire district, community park maintenance district or sanitary district shall change its boundaries by the following procedures:

1. Any adult person desiring to propose any change to the boundaries of a district shall provide a legal description of the area proposed for inclusion in the district to the county assessor of the county in which the district is to be located. The county assessor shall provide to the person proposing any change to the boundaries of the district a detailed list of all taxable properties in the area proposed for inclusion in the district. The person proposing any change to the boundaries of the district shall prepare and submit a boundary change impact statement to the governing body of the district. The county assessor's parcel map and the assessed valuation of the properties as prescribed by section 42-17052 and as shown in the county assessor's records at the time the boundary change impact statement is submitted are deemed sufficient for any required maps and for determining the assessed valuations prescribed by this section. The boundary change impact statement shall contain at least the following information:

(a) A legal description of the boundaries of the area to be included within the proposed change and a map and general description of the area sufficiently detailed to permit allow a property owner to determine whether a particular property is within the proposed district. The boundaries of the proposed change shall not overlap with the boundaries of any other proposed new district of the same type or any annexation by a district of the same type for which petitions have been authorized for circulation as determined on the date that the boundary change impact statement is filed with the governing body.

(b) The detailed list of taxable properties provided by the assessor pursuant to this paragraph.

(d) An estimate of the change in the tax rate of the district if the proposed change is made.

(e) An estimate of the change in the property tax liability, as a result of the proposed change, of a typical resident of a portion of the district, not in the area of the proposed change, before and after the proposed change and of a typical resident of the area of the proposed change.

(f) A list and explanation of benefits that will result from the proposed change to the residents of the area and of the remainder of the district.

(g) A list and explanation of the injuries that may result from the proposed change to residents of the area and of the remainder of the district.

2. On receipt of the boundary change impact statement, the governing body shall set a day, at least twenty but not more than thirty days after that date, for a hearing on the boundary change impact statement. The board of supervisors may at any time before making a determination pursuant to paragraph 5 of this subsection require that the impact statement be amended to include any information that the board of supervisors deems to be relevant and necessary.

3. On receipt of the boundary change impact statement, the clerk of the governing body shall mail, by first class mail, written notice of the statement, its purpose and notice of the day, hour and place of the hearing on the proposed change to each owner of taxable property within the boundaries of the proposed change. The notice shall state the purpose of the hearing and shall describe where a copy of the boundary change impact statement may be obtained and reviewed. The clerk of the governing body shall post the notice in at least three conspicuous public places in the area of the proposed change and also publish twice in a daily newspaper of general circulation in the area of the proposed change, at least ten days before the hearing, or if no daily newspaper of general circulation exists in the area of the proposed change, at least twice at any time before the date of the hearing, a notice setting forth the purpose of the impact statement, the description of the boundaries of the proposed change and the day, hour and place of the hearing.

4. On receipt of the boundary change impact statement, the clerk shall also mail notice, as provided in paragraph 3 of this subsection, to the chairman of the board of supervisors of the county or counties in which the proposed new property in the district is located. The chairman of the board of supervisors of the county that contains the majority of the assessed valuation of the present and proposed district property shall order a review of the proposed change and may submit written comments to the governing body of the district within ten days after receipt of the notice.

5. At the hearing called pursuant to paragraph 2 of this subsection, the governing body shall consider the comments of the board of supervisors, hear those who appear for and against the proposed change and determine whether the proposed change will promote the public health, comfort, convenience, necessity or welfare. If the governing body determines that the public health, comfort, convenience, necessity or welfare will be promoted, it shall approve the impact statement and authorize the circulation of petitions as provided in this subsection. The order of the governing body shall be final, but if the request to circulate petitions is denied, a subsequent request for a similar change may be refiled with the governing body after six months from after the date of the denial. The county board of supervisors shall authorize the circulation of petitions for only one boundary change of a district of the same type in which any property owner's land is proposed for inclusion. A new petition circulation shall not be authorized until the one-year period to submit signatures set by subsection B, paragraph 3 of this section of the original petition circulation has expired or has otherwise been extinguished.

6. Except as provided by section 48-851, The governing body shall not approve a proposed annexation if the property to be annexed is not contiguous with the district's existing boundary. For the purposes of determining whether or not the proposed addition is contiguous, the addition is deemed contiguous if land that is owned by or under the jurisdiction of the United States government, this state or any political subdivision of this state, other than an incorporated city or town, intervenes between the proposed addition and the current district boundary. The requirement for a proposed annexation to be CONTIGUOUS with the districts' existing boundary does not apply to fire districts formed PURSUANT to section 48-851.

7. The governing body shall not approve a proposed annexation if the area proposed to be annexed surrounds any unincorporated territory and that unincorporated territory is not also included in the district.

8. After receiving the approval of the governing body as provided in paragraph 5 of this subsection and if no appeal filed pursuant to paragraph 14 of this subsection remains unresolved, any adult person may circulate and present petitions to the governing body of the district.

9. Within fifteen days after receiving the approval of the governing body as prescribed by paragraph 5 of this subsection, the clerk of the board shall determine the minimum number of signatures and the assessed valuation required to comply with paragraph 10, subdivision (b) of this subsection. After making that determination, the number of signatures shall remain fixed and the assessed valuation of the taxable properties within the boundaries of the proposed change shall remain fixed as prescribed in this subsection for the purposes of determining compliance, notwithstanding any subsequent changes in ownership of the property within the boundaries of the proposed change.

10. The petitions presented pursuant to paragraph 8 of this subsection shall comply with the provisions regarding petition form in section 48-266 and shall:

(a) At all times, contain a map and general description of the boundaries of the area to be included within the proposed change sufficiently detailed to permit allow a property owner to determine whether a particular property is included within the proposed change. An alteration of the described area shall not be made after receiving the approval of the governing body as provided in paragraph 5 of this subsection. The items required to be contained with the petition under this subdivision shall be printed on the back of the petition form required pursuant to section 48-266 unless the size of the items precludes compliance with this requirement. An error in the legal description of the proposed change shall not invalidate the petitions if considered as a whole the information provided is sufficient to identify the property as illustrated in the map required pursuant to this subdivision.

(b) Be signed by owners of more than one-half of the taxable property units within the boundaries of the proposed change and be signed by persons owning collectively more than one-half of the assessed valuation of the property within the boundaries of the proposed change. The assessed valuations of the properties as prescribed by section 42-17052 and as shown in the county assessor's records at the time the boundary change impact statement is submitted are deemed sufficient for determining the assessed valuations prescribed by this section. Property exempt pursuant to title 42, chapter 11, article 3 shall not be considered in determining the total assessed valuation of the proposed change nor shall owners of property not subject to taxation be eligible to sign petitions.

11. On receipt of the petitions, including any supplemental signatures and the report of the county assessor, the governing body shall set a day, at least ten but not more than thirty days after that date, for a hearing on the request.

12. Before the hearing called pursuant to paragraph 11 of this subsection, the board of supervisors shall determine the validity of the petitions presented pursuant to subsection B of this section.

13. At the hearing called pursuant to paragraph 11 of this subsection, the governing body, if the petitions are valid, shall order the change to the boundaries. The governing body shall enter its order setting forth its determination in the minutes of the meeting, at least ten days after the day of the hearing, and a copy of the order shall be sent to the officer in charge of elections and a copy shall be recorded in the county recorder's office. The order of the governing body shall be final, and the proposed change shall be made to the district boundaries thirty days after the governing body votes.

14. On filing a verified complaint with the superior court, the attorney general, the county attorney or any other interested party may question the validity of the annexation for failure to comply with this section. The complaint shall include a description of the alleged noncompliance and shall be filed within thirty days after the governing body of the district adopts a resolution that annexes the territory of the district. The burden of proof is on the plaintiff to prove the material allegations of the verified complaint. An action shall not be brought to question the validity of an annexation resolution unless it is filed within the time and for the reasons prescribed in this subsection. All hearings that are held pursuant to this paragraph and all appeals of any orders shall be preferred and shall be heard and determined in preference to all other civil matters, except election actions. If more than one complaint questioning the validity of an annexation resolution is filed, all complaints shall be consolidated for the hearing.

B. For the purpose of determining the validity of the petitions presented pursuant to subsection A, paragraph 8 of this section:

1. Property held in multiple ownership shall be treated as if it had only one property owner, and the signature of only one of the owners of property held in multiple ownership is required on the boundary change petition. The number of persons owning property inside the boundaries of the proposed boundary change shall be determined as follows:

(a) In the case of property assessed by the county assessor, the number of persons owning property shall be as shown on the most recent assessment of property.

(b) In the case of property valued by the department of revenue, the number of persons owning property shall be as shown on the most recent valuation of property.

(c) If an undivided parcel of property is owned by multiple owners, those owners are deemed to be one owner for the purposes of this section.

(d) If a person owns multiple parcels of property, that owner is deemed to be a single owner for the purposes of this section.

2. The value of property shall be determined as follows:

(a) In the case of property assessed by the county assessor, values shall be the same as those shown on the last assessment roll of the county containing the property.

(b) In the case of property valued by the department of revenue, the values shall be those determined by the department in the manner provided by law, for municipal assessment purposes. The county assessor and the department of revenue, respectively, shall furnish to the governing body, within twenty days after the request, a statement in writing showing the owner, the address of each owner and the appraisal or assessment value of properties contained within the area of a proposed change as described in subsection A of this section.

3. All petitions circulated shall be returned to the governing body of the district within one year from the date of the approval given by the governing body pursuant to subsection A, paragraph 5 of this section. Any petition returned more than one year from that date is void. If an appeal is filed pursuant to subsection A, paragraph 14 of this section, this time period for gathering signatures is tolled beginning on the date an action is filed in superior court and continuing until the expiration of the time period for any further appeal.

C. For the purposes of determining whether or not the proposed addition is contiguous, the addition is deemed contiguous if land that is owned by or under the jurisdiction of the United States government, this state or any political subdivision of this state, other than an incorporated city or town, intervenes between the proposed addition and the current district boundary. Property shall not be approved for annexation if the area proposed to be annexed surrounds any unincorporated territory and that unincorporated territory is not also included in the district unless that unincorporated territory is in a noncontiguous county island fire district.

D. If the change in the boundaries proposed pursuant to subsection A of this section would result in a withdrawal of territory from an existing district, the petitions shall be approved by the governing body only if the proposed withdrawal would not result in a noncontiguous portion of the district that is less than one square mile in size.

E. If the impact statement described in subsection A of this section relates to the withdrawal of property from a district, in addition to the other requirements of subsection A of this section, the governing body shall also determine:

1. If the district has any existing outstanding bonds or other evidences of indebtedness.

2. If those bonds were authorized by an election and issued during the time the property to be withdrawn was lawfully included within the district.

F. If the conditions of subsection E of this section are met:

1. The property withdrawn from the district shall remain subject to taxes, special assessments or fees levied or collected to meet the contracts and covenants of the bonds. The board of supervisors shall provide for the levy and collection of taxes, special assessments or fees.

2. The governing body shall:

(a) Annually determine the amount of special property taxes, special assessments or fees that must be levied and collected from property withdrawn from the district and the mechanism by which that amount is to be collected.

(b) Notify the board of supervisors on or before the third Monday in July of the amount determined in subdivision (a) of this paragraph.

3. Property withdrawn from an existing district shall not be subject to any further taxes, special assessments or fees arising from the indebtedness of the district except as provided in this subsection.

G. If the statement described in subsection A, paragraph 1 of this section requests the annexation of property located within an incorporated city or town, in addition to the other requirements of subsection A of this section, the governing body shall approve the district boundary change impact statement and authorize the circulation of petitions only if the governing body of the city or town has by ordinance or resolution endorsed the annexation and the annexation is authorized pursuant to this title.

H. Except as provided in subsection D of this section and section 48-2002, a change in the boundaries of a district pursuant to this section shall not result in a district that contains area that is not contiguous.

I. Notwithstanding subsection A of this section, any property owner, including a county, this state or the United States government, whose land is within a county that contains a sanitary district or fire district and whose land is contiguous to the boundaries of the sanitary district or fire district may request in writing that the governing body of the district amend the district boundaries to include that property owner's land. If the property is located in an incorporated city or town, in addition to the other requirements prescribed in this subsection, the governing body of the fire district or sanitary district may approve the boundary change only if the governing body of the affected city or town by ordinance or resolution has approved the inclusion of the property in the district. If the governing body determines that the inclusion of that property will benefit the district and the property owner, the boundary change may be made by order of the governing body and is final on the recording of the governing body's order that includes a legal description of the property that is added to the district. A petition and impact statement are not required for an amendment to a sanitary district's or fire district's boundaries made pursuant to this subsection.

J. Until August 1, 2014, in a county with a population greater than two million persons, notwithstanding subsection I of this section, any property owner, including the United States, this state or a county, whose land is within two thousand six hundred forty feet of an adjacent sanitary district or fire district, not contiguous to the boundaries of the sanitary district or fire district and within an unincorporated area or county island may request in writing that the governing body of the district amend the district boundaries to include that property owner's land.

K. A fire district shall not annex or otherwise add territory that is already included in another existing fire district, unless deannexed pursuant to subsections D, E and F of this section.

L. A fire district, community park maintenance district or sanitary district may appropriate and spend monies as necessary or reasonably required to assist one or more individuals or entities to change the district's boundaries pursuant to this section.

M. Notwithstanding subsection A of this section, if an incorporated city or town has previously adopted a resolution designating a fire district as the fire service agency for the city or town, the jurisdictional boundaries of the fire district without further notice or election shall be changed to include any property annexed into the city or town. If the annexation occurs pursuant to a joint petition for annexation, any joint petition for annexation shall clearly indicate in its title and in the notice required in the petition that the property to be annexed will be subject to the jurisdiction of both the city or town and the fire district. A joint petition for annexation shall comply with both section 9-471 and this section. Any fire district boundary change that occurs through city or town annexation pursuant to this subsection is effective on the effective date of the annexation by the incorporated city or town. If an incorporated city or town that has designated a fire district as the fire service agency for that city or town annexes property that is already part of another fire district, the annexed property shall remain part of the fire district in which it was located before the city or town's annexation.

N. Notwithstanding subsection I of this section, from August 2, 2012 until July 1, 2015, in counties with a population of more than two million five hundred thousand persons, any property owner, including the United States, this state or a county, whose land is within two thousand six hundred forty feet of an adjacent sanitary district or fire district and is not contiguous to the boundaries of the sanitary district or fire district may request in writing that the governing body of the district amend the district boundaries to include that property owner's land. If the property is located in an incorporated city or town, in addition to the other requirements prescribed in this subsection, the governing body of the sanitary district or fire district may approve the boundary change only if the governing body of the affected city or town, by ordinance or resolution, has approved the inclusion of the property in the district. If the governing body determines that the inclusion of that property will benefit the district and the property owner, the boundary change may be made by order of the governing body and is final on the recording of the governing body's order that includes a general description of the property, including the assessor's parcel number, that is added to the district. A petition and impact statement are not required for an amendment to a sanitary district's or fire district's boundaries made pursuant to this subsection.

O. For the purposes of this section, assessed valuation does not include property exempt pursuant to title 42, chapter 11, article 3. END_STATUTE

Sec. 2. Section 48-853, Arizona Revised Statutes, is amended to read:

START_STATUTE48-853. District board; powers and duties; intergovernmental agreements; contract; administration; definition

A. A fire district formed pursuant to this article, through its board shall:

1. Hold public meetings as necessary to carry out its powers and duties but at least once every ninety days.

2. Prepare an annual budget that contains detailed estimated expenditures for each fiscal year and that clearly shows expenses of the district. The budget shall be posted in three public places and published in a newspaper of general circulation in the district at least twenty days before a public hearing at a meeting called by the board to adopt the budget. The budget shall be posted in a prominent location on the official website not later than seven business days after the estimates of revenues and expenses are tentatively adopted. A complete copy of the approved estimates of revenues and expenses shall be posted in a prominent location on the official website not later than seven business days after final adoption. Copies of the budget shall also be available to members of the public on written request to the district. Following the public hearing, the district board shall adopt a budget. Both the tentatively adopted estimates of revenues and expenses and the budget finally adopted under this section shall be retained and accessible in a prominent location on the official website for at least sixty months.

3. Maintain a website for the purpose of providing access to public records. The district shall post permanent public records to its website.

4. Maintain and store all permanent public records according to standards for the storage of permanent public records established by the director of the Arizona state library, archives and public records.

5. Appoint the fire chief of the fire service provider selected pursuant to paragraph 9 of this subsection, either public or private, as the fire chief for the district.

6. Adopt the state fire code. The fire district's authority to conduct inspections shall apply only to commercial and industrial properties and shall not apply to residential properties.

7. Keep three copies of the applicable fire code, amendments and revisions on file for public inspection.

8. Notify the county board of supervisors of the cost of providing fire protection service and emergency medical service for each household or other structure in the district if the district provides service pursuant to paragraph 9, subdivision (a) or (b) of this subsection.

9. Act within sixty days after the formation of the district to do any of the following:

(a) Enter into an intergovernmental agreement with a municipal provider for fire protection services for the district. A municipal provider seeking to enter into an agreement with the district shall make a formal expression of intent to enter into an agreement with the district within twenty-one days after district formation.

(b) Issue a request for proposals for nonmunicipal private providers of fire protection services for the district. Notwithstanding any other law, municipal annexation shall not be undertaken during the term of any contract entered into between the district and a private fire service provider, except that in the one hundred eighty day-period before the end of the contract, the municipality shall notify the residents of the opportunity to annex into the municipality. A resident shall notify the district and the municipality within ninety days before the end of the contract that the resident is annexing into the municipality and shall complete the annexation within ten days after the completion of the contract. If no district residents notify the municipality that the resident is annexing, the district may renew the contract automatically. If a resident proposes to annex into the municipality, the district shall issue a request for proposals again as prescribed in this subdivision.

(c) Before applying this subdivision, request an independent review by the county attorney of the negotiations, if any, that were conducted as prescribed in subdivision (a) of this paragraph and the request for proposals and resulting bids. After the independent review, the county attorney shall certify whether the negotiations and proposals were based on commercially reasonable assumptions. If the county attorney certifies that any one or more of the provisions are not commercially reasonable, the district and the other party to the negotiations have ten days to cure and continue negotiations before resubmitting information on the negotiations and proposals to the county attorney for certification. Notwithstanding any other law, the county attorney shall have access to sealed bids for purposes of this subdivision. The county attorney shall review and issue a certification pursuant to this subdivision within thirty days after the information and documents regarding negotiations and proposals are submitted to the county attorney. If a fire district does not enter into an intergovernmental agreement pursuant to subdivision (a) of this paragraph or enter into a contract pursuant to subdivision (b) of this paragraph, the surrounding municipality shall provide fire protection and emergency medical services except for services regulated pursuant to title 36, chapter 21.1 in the district immediately on request by the district, following final certification by the county attorney. The municipality shall be compensated by the district as follows:

(i) A three-person board shall set the secondary property tax rate for the district. The district shall appoint one person to the board, the surrounding municipality shall appoint one person to the board, and the two appointees shall agree on a third person for the board. If the two appointees cannot agree on a third appointee within five days after the two persons are appointed, the county board of supervisors shall appoint the third person to the board.

(ii) The three-person board shall meet and set the tax rate within thirty days after the third person is appointed to the board.

(iii) The district shall levy the tax at the rate as determined by the three-person board and the tax shall be collected as other property taxes are collected. On receipt of monies from the property tax levied, the district shall reimburse the county for the costs associated with the formation of the district, including administrative expenses.

10. Require that any intergovernmental agreement or contract between the district and a provider of fire protection services include:

(a) A term of duration between three and five years.

(b) A provision setting forth the cost of service and performance criteria.

(c) An acknowledgment of the right of the municipality to determine the location of future infrastructure if the district is in the municipality's planning area at the time of the execution of the contract.

11. If necessary, issue a request for proposals for providers of emergency medical services and enter into an intergovernmental agreement or contract with a provider of emergency medical services except for those services regulated by title 36, chapter 21.1.

12. Assess and levy a secondary property tax to pay for the costs of the fire protection service or emergency medical service except for those services regulated by title 36, chapter 21.1. A secondary property tax assessed pursuant to this section is not subject to the levy limitation prescribed by section 48-807.

13. Defend, indemnify and hold harmless a municipal provider or any other provider of fire protection from and against any claims or expenses to which it may be subjected by reason of injury or death of any person or loss or damage to any property directly attributable to the provision of the services unless the services were provided in a grossly negligent manner. The fire district shall secure insurance sufficient to cover liability exposure.

B. A fire district formed pursuant to this article, through its board, may:

1. Contract for administrative staff services, if any, deemed necessary or appropriate to carry out its powers and duties, but a member of a district board shall not be an employee of the district.

2. Retain a certified public accountant to perform an annual audit of district books.

3. Retain private legal counsel.

4. Sue and be sued.

5. Accept gifts, contributions, bequests and grants and comply with any requirements of such gifts, contributions, bequests and grants not inconsistent with this article.

6. Appropriate and expend annually such monies as are necessary for the purpose of fire districts belonging to and paying dues in the Arizona fire district association and other professional affiliations or entities.

7. Expand its boundaries pursuant to the requirements of section 48-262 to include unincorporated parcels within a city's or a town's municipal planning area if the parcel is contiguous with the city's or town's boundaries or contiguous with the existing district formed pursuant to this article and with the permission of the city or town.

C. The county attorney may advise and represent the district when in the county attorney's judgment such advice and representation are appropriate and not in conflict with the county attorney's duties under section 11-532. If the county attorney is unable to advise and represent the district due to a conflict of interest, the district may retain private legal counsel or may request the attorney general to represent it, or both.

D. The chairperson and clerk of the district board or their respective designees, as applicable, shall draw warrants, substitute checks or electronic funds transfers on the county treasurer for money required to operate the district in accordance with the budget and, as so drawn, the warrants, substitute checks or electronic funds transfers shall be sufficient to authorize the county treasurer to pay from the fire district fund.

E. The district shall not incur any debt or liability in excess of taxes levied and to be collected and the monies actually available and unencumbered at the time in the fund, except as provided in section 48-807.

F. If a district formed under section 48-851 agrees to provide fire and emergency medical services in a county island where a private provider of fire or emergency services has facilities and provides fire service, or where the private provider is the closest responding fire service provider, the district and the private provider shall enter into an agreement covering the roles and relationships regarding mutual aid or backup and any services for which the district wishes to contract. The agreement shall include an allocation of the district's property tax revenues to the municipal contractor or the private provider, or both, based on the proportionate share of the fire services each contractor will provide to the district. The agreement shall be executed before the district begins providing service in the county island. If an agreement is not reached within ninety days after the district requests the private provider to establish a plan, either party may request that the matter be arbitrated pursuant to title 12, chapter 21.

G. This section does not require a fire district or a city or town to provide fire protection or emergency medical services to an area of the county that is receiving services from a private provider, except as provided by a mutual aid or backup agreement pursuant to this section.

H. For the purposes of this article, "fire service" and "fire protection" include fire prevention, emergency medical services and inspection of commercial or industrial property. END_STATUTE