ARIZONA STATE SENATE
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MOLLY GRAVER |
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LEGISLATIVE RESEARCH ANALYST FINANCE COMMITTEE Telephone: (602) 926-3171 |
RESEARCH STAFF
TO: MEMBERS OF THE SENATE
FINANCE COMMITTEE
DATE: February 13, 2025
SUBJECT: Strike everything amendment to S.B. 1145, relating to special districts; construction; payments
Purpose
Prescribes requirements and prohibitions for construction contract payments for infrastructure projects in revitalization special taxing districts.
Background
The governing body of one or more municipalities may adopt a resolution declaring its intention to form a tax levying revitalization district to include property within the corporate boundaries of the district, if the public convenience and necessity require and on presentation of a petition signed by the owners of at least 51 percent of the net assessed property value proposed to be included in the district and a petition signed by at least 51 percent of the property owners in the area proposed to be included in the district.
To further the implementation of the general plan, a revitalization district may enter into contracts and spend monies for any infrastructure purposes and enter into agreements with landowners and the municipality for the collection of fees and charges from landowners for infrastructure purposes, the advance of monies by landowners for infrastructure purposes or the granting of real property by the landowner for infrastructure purposes. An agreement between a landowner and a revitalization district 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 infrastructure. Public infrastructure, other than movable property, may be located only in or on lands owned by the state, the revitalization district or a municipality or county or dedicated or otherwise designated as public roadways, highways, streets, thoroughfares, easements or rights-of-way, whether in or out of the district or municipality.
A revitalization district has perpetual succession and, if the district does not have bonds or other outstanding obligations, must be dissolved 10 years after the date of formation unless the governing bodies extend the district by resolution for another 10 years. The governing body by resolution may order the participation in the costs of any public infrastructure purpose, including the payment of bond debt service (A.R.S. Title 48, Chapter 39, Article 1).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits a revitalization district from using any infrastructure for its intended purpose until the contractor performing the work has been paid in full pursuant to the contract.
2. Prohibits a revitalization district from being dissolved if the district owes monies to a licensed contractor for the installation of any type of district infrastructure.
3. Adds, to the conditions required before dissolving a revitalization district, a requirement that all monies due to contractors that performed work for the district have been paid in full.
4. Stipulates that an agreement between a landowner and revitalization district may include repayment provisions only if the contractor constructing the infrastructure has been paid in full for the work performed.
5. Requires the state, county or municipality that owns or controls the land on which public infrastructure is constructed to pay the balance due and owing to a contractor for the work performed, if the contractor is not paid in full for the work performed due to the district having insufficient monies or any other reason.
6. Requires all construction contracts for the revitalization district to comply with statute governing prompt payment of public works projects.
7. Makes technical changes.
8. Becomes effective on the general effective date.