HB2621 - 502R

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

Section 1. Section 15-1461, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1461. District budget; annual estimate; computation; notice; hearing; adoption

A. Not later than June 5, each district established pursuant to this chapter, and any other community college established prior to the enactment of this chapter, shall prepare a proposed budget for the budget year on a form which the auditor general prescribes to be transmitted to the district board. The proposed budget shall be accompanied by an estimate of the amount of funds needed for the ensuing year as determined by the district based on the proposed budget prepared by it.

B. The district shall establish and set forth in the proposed budget the per capita expenditure per full‑time equivalent student, which shall be the total operational expenses.

C. The district shall establish and set forth in the proposed budget the per capita expenditure per full‑time equivalent student, which shall be the total capital outlay expenses.

D. The number of basic full‑time equivalent students shall be computed by dividing the total community college credit units by fifteen per semester and shall be based on regular day enrollment. The number of additional short‑term full‑time equivalent students shall be computed by dividing the total community college credit units from additional short‑term classes by thirty. The number of skill center full‑time equivalent students shall be computed by dividing the total number of clock hours in approved vocational training programs by six hundred forty.

E. The governing board of each district shall prepare a notice fixing a time not later than June 20 and designating a public place within each district at which a public hearing and special board meeting shall be held. The governing board of each district shall publish a notice of the public hearing and special board meeting not later than fifteen days before the meeting. The governing board shall publish the proposed budget on its website and present the proposed budget for consideration of the residents and the taxpayers of the district at such meeting.

F. The proposed budget shall contain but need not be limited to the following information:

1. The estimated cost of all operational, capital outlay and debt service expenses.

2. The percentage of increase or decrease in each budget category as compared to each category of the budget for the current year.

3. The total amount of revenues by source that was necessary to meet the district's budget for the current year.

4. The total amount of revenues by source that will be necessary to meet the proposed district budget.

5. The total property tax levy of the district for the current year.

6. The levy for primary property taxes and the levy for secondary property taxes for the current year.

7. The primary property tax rate and secondary property tax rate for the current year.

8. The estimated amount of total property tax levies for the district and the primary property tax and secondary property tax components thereof necessary for the budget year.

9. The maximum amount of primary property tax dollars which the district is permitted to levy pursuant to title 42, chapter 17, article 2 for the budget year.

10. The amount of secondary property tax dollars which the district will levy for the budget year.

11. The amount of monies received from primary property taxation in the previous fiscal year in excess of the maximum allowable amount as calculated pursuant to title 42, chapter 17, article 2.

12. Beginning in fiscal year 2013-2014, the total estimated personnel compensation, which shall separately include employee salaries and employee related expenses for retirement costs and health care costs.

13. Beginning in fiscal year 2013-2014, all unencumbered cash, both restricted and unrestricted.

G. The governing board shall publish the proposed budget and the notice of the public hearing and special board meeting a second time not later than five days prior to the meeting. Publication shall be made in a newspaper of general circulation within the district. The cost of publication shall be a charge against the district. If a truth in taxation notice and hearing is required under section 15‑1461.01, the district may combine the notice and hearing under this section with the truth in taxation notice and hearing. Beginning for fiscal year 2013-2014, within seven days after the adoption of the proposed budget presented before the governing board and the budget finally adopted under this section shall be accessible in a prominent location on the district's official website and the final adopted budget shall be retained on the website for at least sixty months.

H. If the district fails to publish the proposed budget, notice and statements required by subsection F of this section, the board of supervisors shall levy on the property in the district the lesser of the amount of primary property taxes which were levied for the district in the current year or the amount which would be produced by the primary property tax rate which was levied for the district in the current year.

I. At the time and place fixed in the notice, the members of the governing board shall hold the public hearing and present the proposed budget to the persons attending the hearing. Upon request of any person, the governing board shall explain the budget and any resident or taxpayer of the district may protest the inclusion of any item in the proposed budget.

J. Immediately following the public hearing the chairman shall call to order the special board meeting for the purpose of adopting the budget. The governing board shall adopt the budget making deductions from the budget as it sees fit but making no additions to the budget and shall enter the budget as adopted in its minutes. The governing board shall not adopt the budget if the property tax requirements of the budget, excluding amounts budgeted and levied for secondary property taxes, exceed the amounts authorized pursuant to title 42, chapter 17, article 2. END_STATUTE

Sec. 2. Section 42-17102, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17102. Contents of estimate of expenses

A. The annual estimate of expenses of each county, city and town shall include:

1. An estimate of the amount of money required for each item of expenditure necessary for county, city or town purposes, which must include, by fund:

(a) Beginning in fiscal year 2013-2014, the estimated number of full‑time employees.

(b) Beginning in fiscal year 2013-2014, the total estimated personnel compensation, which shall separately include the employee salaries and employee related expenses for retirement costs and health care costs.

2. The amounts necessary to pay the interest and principal of outstanding bonds.

3. The items and amounts of each special levy provided by law.

4. An amount for unanticipated contingencies or emergencies.

5. A statement of the receipts for the preceding fiscal year from sources other than direct property taxes.

6. The amounts that are estimated to be received during the current fiscal year from sources other than direct property taxes and voluntary contributions.

7. The amounts that were actually levied and the amounts that were actually collected for county, city or town purposes on the primary and secondary property tax rolls of the preceding fiscal year.

8. The amounts that were collected through primary property taxes and secondary property taxes levied for the years before the preceding fiscal year.

9. The amount that is proposed to be raised by direct property taxation for the current fiscal year for the general fund, bonds, special assessments and district levies.

10. The separate amounts to be raised by primary property tax levies and by secondary property tax levies for the current fiscal year.

11. The amount of voluntary contributions estimated to be received pursuant to section 48-242, based on the information transmitted to the governing body by the department of revenue.

12. The maximum amount that can be raised by primary property tax levies by the county, city or town pursuant to article 2 of this chapter for the current fiscal year.

13. The amount that the county, city or town proposes to raise by secondary property tax levies and the additional amounts, if any, that the county, city or town will levy pursuant to the authority given to the governing body by the voters at an election called pursuant to article 5 of this chapter.

14. The property tax rate for county, city or town purposes for the preceding fiscal year for the primary property tax and the secondary property tax.

15. The estimated property tax rate for county, city or town purposes for the current fiscal year for the primary property tax and the secondary property tax.

16. The expenditure limitation for the preceding fiscal year and the total amount that was proposed to be spent for the preceding fiscal year.

17. The total expenditure limitation for the current fiscal year.

18. The amount of monies received from primary property taxation in the preceding fiscal year in excess of the maximum allowable amount as computed pursuant to article 2 of this chapter.

B. The estimate shall be fully itemized according to forms supplied by the auditor general showing under separate headings:

1. The amounts that are estimated as required for each department, public office or official.

2. A complete disclosure and statement of the contemplated expenditures for the current fiscal year, showing the amount proposed to be spent from each fund and the total amount of proposed public expense.

C. The total of amounts proposed in the estimates to be spent shall not exceed the expenditure limitation established for the county, city or town. END_STATUTE

Sec. 3. Section 42-17103, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17103. Public access to estimates of revenues and expenses; notice of public hearing; access to adopted budget

A. The governing body of each county, city or town shall publish the estimates of revenues and expenses, or a summary of the estimates of revenues and expenses, and a notice of a public hearing of the governing body to hear taxpayers and make tax levies at designated times and places. The summary shall set forth the total estimated revenues and expenditures by fund type, truth in taxation calculations and primary and secondary property tax levies for all districts. A complete copy of the estimates of revenues and expenses shall be made available at the city, town or county libraries and city, town or county administrative offices and shall be posted in a prominent location on the official websites, or on a website of an association of cities and towns for cities and towns that do not have official websites, no later than seven business days after the estimates of revenues and expenses are initially presented before the governing body. A complete copy of the budget finally adopted under section 42‑17105 shall be posted in a prominent location on the official websites no later than seven business days after final adoption.

B. Beginning with fiscal year 2011‑2012, both the estimates of revenues and expenses initially presented before the governing body and the budget finally adopted under section 42‑17105 shall be retained and accessible in a prominent location on the official websites, or on a website of an association of cities and towns for cities and towns that do not have official websites, for at least sixty months.

C. The summary of estimates and notice, together with the library addresses and websites where the complete copy of estimates may be found, shall be published once a week for at least two consecutive weeks after the estimates are tentatively adopted in the official newspaper of the county, city or town, if there is one, and, if not, in a newspaper of general circulation in the county, city or town.

D. If a truth in taxation notice and hearing is required under section 42‑17107, the governing body may combine the notice under this section with the truth in taxation notice. END_STATUTE

Sec. 4. Section 42-17151, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17151. County, municipal, community college and school tax levy

A. On or before the third Monday in August each year, the governing body of each county, city, town, community college district and school district shall:

1. Fix, levy and assess the amount to be raised from primary property taxation and secondary property taxation. This amount, plus all other sources of revenue, as estimated, and restricted and unrestricted unencumbered balances from the preceding fiscal year, shall equal the total of amounts proposed to be spent in the budget for the current fiscal year.

2. Designate the amounts to be levied for each purpose appearing in the adopted budget.

3. Fix and determine a primary property tax rate and a secondary property tax rate, each rounded to four decimal places on each one hundred dollars of taxable property shown by the finally equalized valuations of property, less exemptions, that appear on the tax rolls for the fiscal year and that when extended on those valuations will produce, in the aggregate, the entire amount to be raised by direct taxation for that year.

B. The governing body of a county, city, town or community college district shall not fix, levy or assess an amount of primary property taxes in excess of the amount permitted by section 42-17051, subsection A, paragraph 7 or section 42‑17005 as determined by the property tax oversight commission.

C. The governing board of a common school district, a high school district or a unified school district shall not fix, levy or assess a primary property tax rate higher than the current year's rate if the district meets both of the following criteria, as determined by the property tax oversight commission:

1. The total primary property taxes levied for all taxing jurisdictions on at least one-half of the residential property of the district exceed the limitation described in section 15-972, subsection E.

2. The school district primary property tax rate exceeds one hundred fifty per cent of the applicable qualifying tax rate pursuant to section 41‑1276.

D. No later than December 31, the property tax oversight commission shall notify those school districts that meet the criteria described in subsection C of this section and the county school superintendents and boards of supervisors of the counties in which the school districts are located.

E. Within three days after the final levies are determined for a county, city, town or community college district, the chief county fiscal officer shall notify the property tax oversight commission of the amount of the primary property tax levied.

F. Pursuant to section 15‑465.01, subsection E, an accommodation school governing board shall not levy a primary or secondary property tax. The property tax oversight commission shall consider any amount of property tax levied by a county in support of an accommodation school to be part of the county's primary levy for the purposes of determining the county's compliance with subsection B of this section. END_STATUTE

Sec. 5. Section 48-807, Arizona Revised Statutes, is amended to read:

START_STATUTE48-807. County fire district assistance tax; annual budget; override

A. The board of supervisors of a county shall levy, at the time of levying other property taxes, a county fire district assistance tax on the taxable property in the county of not more than ten cents per one hundred dollars of assessed valuation. The tax levy provided for in this subsection shall be a levy of secondary property taxes and shall not be subject to title 42, chapter 17, article 2. The county treasurer shall pay to each fire district, including a fire district formed pursuant to section 48‑851, in the county from the proceeds of the tax an amount equal to twenty per cent of the property tax levy adopted by the district for the fiscal year in which the tax will be levied, except that:

1. The amount of assistance from the county to a fire district shall be reduced as follows:

(a) Through the fiscal year that ends June 30, 2012, by the dollar amount that the fire district receives from the fire district assistance tax that exceeds three hundred thousand dollars from and after June 30 of each fiscal year.

(b) Beginning with the fiscal year that starts July 1, 2012, by the dollar amount that the fire district receives from the fire district assistance tax that exceeds four hundred thousand dollars from and after June 30 of each fiscal year, without regard to whether the district is located in more than one county.

(c) Except as provided in paragraph 2 of this subsection, if the total amount to be paid to all districts in the county under this paragraph exceeds the amount to be raised by the levy of ten cents per one hundred dollars assessed valuation, then the county treasurer shall pay an amount less than twenty per cent of the property tax levy of each district. The amount to be paid by the county treasurer to each district shall be determined by multiplying the proceeds of the county fire district assistance tax against the proportion that twenty per cent of the property tax levy of each district bears to the total of twenty per cent of the property tax levies of all fire districts in the county.

2. For fiscal years beginning from and after July 1, 1992, the amount of assistance from the county to a fire district shall not be less than the assistance provided from and after June 30, 1991 through June 30, 1992, if, for the fiscal year in which the tax will be levied, the district levies a tax, in addition to any tax levied under section 48‑806, of three dollars per one hundred dollars of assessed valuation and the assessed valuation is at least ninety per cent of the assessed valuation for the 1991 tax year. This paragraph does not apply to fire districts subject to paragraph 1, subdivision (a) or (b) of this subsection.

B. For the purpose of subsection A of this section, the property tax levy of the fire district shall include in lieu contributions pursuant to chapter 1, article 8 of this title but shall not include property tax levies to be applied to the payment of principal and interest on bonds issued pursuant to section 48‑806.

C. Notwithstanding subsection A of this section and through the fiscal year that ends June 30, 2012, if two or more fire districts merge to form a consolidated district, the last amount received by each fire district from the fire district assistance tax prior to the merger shall be combined, and if the combined amount exceeds three hundred thousand dollars, the consolidated district may continue to receive the sum of the average of the fire district assistance tax received by each fire district in the three previous years prior to the merger from the fire district assistance tax. Beginning with the fiscal year that starts July 1, 2012, a consolidated district shall not receive more than four hundred thousand dollars in fire district assistance tax monies, without regard to whether the consolidated district is located in more than one county.

D. Through the fiscal year that ends June 30, 2012, if two or more fire districts merge to form a consolidated district and the total of the amounts received by each fire district from the fire district assistance tax is less than three hundred thousand dollars, the consolidated district may continue to receive monies until its receipts total three hundred thousand dollars, as prescribed in subsection A of this section, without regard to whether the consolidated district is located in more than one county. Beginning with the fiscal year that starts July 1, 2012, if two or more fire districts merge to form a consolidated district and the total of the amounts received by each fire district from the fire district assistance tax is less than four hundred thousand dollars, the consolidated district may continue to receive monies until its receipts total four hundred thousand dollars, as prescribed in subsection A of this section, without regard to whether the consolidated district is located in more than one county.

E. Not more than ten days after the perfection of the organization of a fire district, and thereafter not later than August 1 of each year, the chief and the secretary‑treasurer of the district, or if there is a district board, the chairman of the board, shall submit to the board of supervisors an estimate, certified by items, of the amount of money required for the equipment and maintenance of the district for the ensuing year.

F. The board, based on the budget submitted by the district, shall levy, in addition to any tax levied as provided in section 48‑806, a tax not to exceed three dollars twenty-five cents per one hundred dollars of assessed valuation, or the amount of the levy in the preceding tax year multiplied by 1.08, whichever levy is less, and minus any amounts required to reduce the levy pursuant to subsection I of this section, against all property situated within the district boundaries and appearing on the last assessment roll. The levy shall be made and the taxes collected in the manner, at the time and by the officers provided by law for the collection of general county taxes.

G. Beginning for fiscal year 2013-2014, a complete copy of the adopted budget shall be posted in a prominent location on the district's official website, or on a website of an association of fire districts for districts that do not have official websites, within seven business days after final adoption and retained on the website for at least sixty months.

G. H. The qualified electors of the district, voting in an election as prescribed by subsection H I of this section, may authorize the board to levy a tax exceeding the limits prescribed by subsection F of this section under one, but not both, of the following options:

1. The electors may authorize a permanent override allowing annual levies without reference to the levy in the preceding tax year, but remaining subject to the tax rate limit of three dollars twenty-five cents per one hundred dollars of assessed valuation. An election for the purposes of this paragraph must be held at a regularly scheduled general election held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

2. If the net assessed valuation of all property in the district declines by a combined total of twenty per cent or more over two consecutive valuation years, the electors voting at the next regularly scheduled general election held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d) may authorize an override for five consecutive tax years allowing annual levies that are exempt from the tax rate limit of three dollars twenty-five cents, but subject to an annual levy limit of the amount of the levy in the preceding tax year multiplied by 1.05. After the fifth tax year, the district is again subject to the limits prescribed by subsection F of this section, computed by multiplying the levy beginning in the year preceding the override by 1.08 for each year through the current tax year.

H. I. The call for an override election held for the purposes of subsection G H of this section must state:

1. The purpose for requesting additional secondary property tax revenue for the district.

2. If the voters approve the levy:

(a) The maximum dollar amount of secondary property tax that may be collected in the first year compared to the existing maximum secondary property tax levy prescribed in subsection F of this section.

(b) The estimated secondary property tax rate to fund the proposed levy under subdivision (a) in the first tax year compared to the secondary property tax rate levied in the current year.

I. J. If the district annexes additional territory, the limit under subsection F of this section shall be adjusted by applying the district's tax rate to the assessed valuation of the annexed property in the preceding tax year. If districts are merged or consolidated under this chapter, the limitation under this subsection in the first year after the districts are merged or consolidated is the total of the levies of the merged or consolidated districts in the preceding tax year multiplied by 1.08 or the amount of the levies allowed by the maximum rate prescribed by subsection F of this section, whichever is less.

J. K. The district shall maintain any property tax revenues collected in excess of the sum of the amounts of taxes collectible pursuant to section 42‑17054 and the allowable levy determined under subsection F of this section in a separate fund and used to reduce the property tax levy in the following tax year.

K. L. The levy limit under this section is considered to be increased each year to the maximum limit permissible under subsection F of this section regardless of whether the district actually levies taxes up to the maximum permissible amount in that year.

L. M. The county treasurer shall keep the money received from taxes levied pursuant to subsection F of this section in a separate fund known as the "fire district general fund" of the district for which collected. Any surplus remaining in the fire district general fund at the end of the fiscal year shall be credited to the fire district general fund of the district for which it was collected for the succeeding fiscal year and after subtraction of accounts payable and encumbrances, shall be used to reduce the property tax levy in the following tax year.

M. N. A fire district may maintain separate accounts with a financial institution that is authorized to do business in this state for the purpose of operating a payroll account or for holding contributions, grants, special revenues or trust monies as necessary to fulfill the district's fiduciary responsibilities.

N. O. A fire district, through the county treasurer, shall establish the relevant governmental funds necessary for the proper management and fiscal accountability of district monies from property taxes, grants, contributions and donations, as defined by the government accounting standards board. Unless the monies received are legally restricted by contract, agreement or law, those monies may be transferred between accounts according to the original or amended budget of the fire district.

O. P. Notwithstanding section 11-605, a fire district may register warrants only if separate accounts are maintained by the county treasurer for each governmental fund of a fire district. Warrants may only be registered on the maintenance and operation account, the unrestricted capital outlay account and the special revenue account, and only if the total cash balance of all three accounts is insufficient to pay the warrants and after any revolving line of credit has been expended as prescribed in section 11‑635.

P. Q. When a fire district has adopted a budget and the board of supervisors has levied a fire district tax as provided in subsection F of this section and the district has insufficient money in its general fund with the county treasurer to operate the district, the elected chief and the secretary‑treasurer, or if there is a district board, the chairman of the board, on or after August 1 of each year, may draw warrants for the purposes prescribed in section 48‑805 on the county treasurer, payable on November 1 of that year or on April 1 of the succeeding year. The aggregate amounts of the warrants may not exceed ninety per cent of the taxes levied by the county for the district's current fiscal year. If the treasurer cannot pay a warrant for lack of funds in the fire district general fund, the warrant shall be endorsed, be registered, bear interest and be redeemed as provided by law for county warrants, except that the warrants are payable only from the fire district general fund. END_STATUTE