SB1387 - 512R

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

Section 1. Section 48-251, Arizona Revised Statutes, is amended to read:

START_STATUTE48-251. Annual report

A. Each district organized under this title and not exempted under subsection C of this section shall submit an annual report as prescribed by this section that contains the following information:

1. A schedule of the beginning and ending fund balances and all revenues and expenditures for the preceding fiscal year on a form prescribed by the auditor general or the same information contained in a financial statement for the preceding fiscal year that has been attested to by an independent certified public accountant. The schedule or statement shall include all monies, gifts or donations that are received from all sources and that have a value exceeding one hundred dollars.

2. Legal descriptions of any boundary changes occurring during the preceding fiscal year.

3. The names, occupations and business telephone numbers of all members of the governing board and officers of the district on the last day of the preceding fiscal year.

4. The schedule and location of regular meetings of the district governing board.

5. The location or locations where public notices of meetings are posted pursuant to section 38‑431.02.

6. The name and title of the person or persons completing the reporting requirements pursuant to this subsection.

7. Except for a district organized pursuant to chapter 5, article 3 of this title, a copy of any audit or financial review required to be prepared pursuant to section 48-253, subsection G.

B. The secretary or other officer of the district governing board shall submit the report within two hundred forty days of the close of the district's fiscal year to the clerk of the board of supervisors of each county in which the district is located.

C. Districts organized under chapters 4, 6, 17, 22, 27 and 28 of this title are exempt from the requirements of this section. Districts that do not provide services or otherwise operate during the entire period covered by the report and that notify the clerk of the board of supervisors in writing of such these circumstances within the time for filing the report are exempt from the requirements of subsection A of this section.

D. If a district fails to submit a report as required by this section, any taxpayer residing in the district may petition the superior court in a county in which the district is organized to order the district to show cause why the report has not been submitted. On a failure to show cause the court shall order the district to file all reports as required by this section. A failure to obey the order of the court is punishable as contempt of court.

E. If the court finds that a district has violated this section, it shall award the taxpayer attorney fees and costs associated with bringing the action.

F. The board of supervisors of each county shall submit annually by March 31 a report on compliance with the requirements of this section to the president of the senate, the speaker of the house of representatives and the governor. The annual report shall include a listing of all those districts required to comply with the requirements of this section, the districts in compliance and not in compliance with the requirements and an analysis of the sufficiency of each district report.

G. The board of supervisors shall notify each district not in compliance with the reporting requirements of this section to comply within thirty days after receipt by certified mail of such the noncompliance and that the district is subject to a civil penalty if it fails to comply. The board of supervisors shall assess, and the county treasurer shall collect from the monies of a district remaining in noncompliance thirty days after receipt of certified mail a penalty assessment of one hundred dollars per day for each day that such the district is not in compliance with the reporting requirements of this section from thirty days after receipt by certified mail of the noncompliance notice until such time as the board of supervisors receives a copy of the district's annual report, to the extent that district monies are available and unencumbered. Penalty monies collected shall be deposited in the county general fund. END_STATUTE

Sec. 2. Section 48-253, Arizona Revised Statutes, is amended to read:

START_STATUTE48-253. District audits and financial reviews

A. Each district that is organized under this title, that is not exempt under subsection G or H of this section and that is required to make an annual report under this article shall have its reports audited in accordance with generally accepted government auditing standards and the following:

1. Audits required by this section shall be performed annually for districts whose budgets are one million dollars or more. Districts whose budgets are one hundred thousand dollars or more but less than one million dollars shall have a financial review performed annually. Districts whose budgets are more than fifty thousand dollars and less than one hundred thousand dollars shall have a financial review performed at least biennially. Districts whose budgets are fifty thousand dollars or less shall have a financial review performed at the request of the county board of supervisors or on receipt of a request for a financial review that is signed by at least ten residents of that district. A district shall not be required to perform a financial review more than once per fiscal year.

2. A district may select an outside auditor who is a certified public accountant or a representative who is selected by the board of supervisors and who is trained as an auditor.

3. A district may advertise and use competitive bidding practices to select an agent to perform the audits or financial reviews required by this section.

B. Each district that submits a financial statement for the preceding fiscal year that has been attested to by an independent certified public accountant pursuant to section 48‑251 is deemed to have complied with this section by submitting a copy of the financial statement to the county treasurer.

C. Each district shall submit a copy of the completed audit or financial review to the county treasurer and the board of supervisors within two hundred forty days after the close of the district's fiscal year or within one hundred eighty days after a request for a financial review is received by the district pursuant to subsection A, paragraph 1 of this section.

D. If a district fails to submit an audit or financial review as required by this section, any taxpayer residing in the district, the board of supervisors or the county treasurer may petition the superior court in a county where the district is organized to show cause why the audit or financial review has not been submitted. On a failure to show cause the court shall order the district to submit the audit or financial review within ten days after the judgment is entered. Except for a district organized pursuant to chapter 5, article 3 of this title, on complaint made to the county attorney, the county attorney may investigate any claimed failure to comply with this section, report publicly on the investigation's findings and take any enforcement action deemed appropriate by the county attorney.

E. If the court enters a judgment against the district under this section, the court may award the taxpayer, board of supervisors or county treasurer reasonable attorney fees and costs associated with bringing the action.

F. For districts organized under chapter 19 of this title, a district with an annual budget of at least five million dollars shall have an audit performed annually and a district with an annual budget of at least one million dollars but less than five million dollars shall have an audit performed every five years and a financial review performed each year an audit is not performed. A district with an annual budget of at least one hundred thousand dollars but less than one million dollars shall have an audit performed every ten years and a financial review performed each year an audit is not performed.

G. For districts organized under chapter 5 of this title and except for districts organized under chapter 5, article 3 of this title, a district that receives five hundred thousand dollars or more in total revenues shall perform an annual audit. For the purposes of this subsection, revenues include monies generated by tax levies, monies received through appropriations, grants and other federal and state sources and monies received from services or other private sources, including ambulance and similar services. If a district's total budgeted revenues in a fiscal year are less than five hundred thousand dollars and the district receives total actual revenues in a fiscal year of five hundred thousand dollars or more, the district shall have an audit performed for that preceding fiscal year as if the audit had originally been required by this section. Districts whose total annual revenues are one hundred thousand dollars or more but less than five hundred thousand dollars shall have a financial review performed annually. Districts whose total annual revenues are more than fifty thousand dollars and less than one hundred thousand dollars shall have a financial review performed at least biennially. Districts whose total annual revenues are fifty thousand dollars or less shall have a financial review performed at the request of the county board of supervisors or on receipt of a request for a financial review that is signed by at least ten residents of that district. A district shall not be required to perform a financial review more than once per fiscal year. All financial reviews prescribed by this section must be conducted according to generally accepted government auditing standards.

G. H. Districts organized under chapters 4, 6, 17, 22, 27 and 28 of this title are exempt from the requirements of this section. END_STATUTE

Sec. 3. Section 48-261, Arizona Revised Statutes, is amended to read:

START_STATUTE48-261. District creation; procedures; notice; hearing; determinations; petitions

A. A fire district, community park maintenance district, sanitary district or hospital district for either a hospital or an urgent care center shall be created by the following procedures:

1. Any adult person desiring to propose creation 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 formation of the district a detailed list of all taxed taxable properties in the area proposed for inclusion in the district. The person proposing formation of the district shall prepare and submit a district impact statement to the board of supervisors of the county in which the district is to be located. Except for a proposed community park maintenance district that is to be located in more than one county, if a proposed district is located in more than one county, the impact statement shall be submitted to the board of supervisors of the county in which the majority of the assessed valuation of the proposed district is located. The boards of supervisors of any other counties in which a portion of the district is to be located shall provide information and assistance to the responsible board of supervisors. For a community park maintenance district that is to be located in more than one county, the impact statement shall be submitted to the board of supervisors for each of the affected counties. If the person desiring to create a district pursuant to this section is unable to complete the district impact statement, the board of supervisors may assist in the completion of the impact statement if requested to do so, provided the bond required in subsection C of this section is in an amount sufficient to cover any additional cost to the county. The district impact statement shall contain at least the following information:

(a) A legal description of the boundaries of the proposed district and a map and a general description of the area to be included in the district sufficiently detailed to permit a property owner to determine whether a particular property is within the proposed district.

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

(d) An estimate of the change in the property tax liability, as a result of the proposed district, of a typical resident of the proposed district.

(e) A list and explanation of benefits that will result from the proposed district.

(f) A list and explanation of the injuries that may result from the proposed district.

(g) The names, addresses and occupations of the proposed members of the district's organizing board of directors.

(h) A description of the scope of services to be provided by the district during its first five years of operation. At a minimum this description shall include an estimate of anticipated capital expenditures, personnel growth and enhancements to service.

2. On receipt of the district impact statement, the board of supervisors shall set a day, not fewer than at least thirty nor but not more than sixty days from that date, for a hearing on the impact statement. The board of supervisors, at any time before making a determination pursuant to paragraph 4 of this subsection, may 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 district impact statement, the clerk of the board of supervisors shall mail, by first class mail, notice of the day, hour and place of the hearing on the proposed district to each owner of taxable property within the boundaries of the proposed district. The written notice shall state the purpose of the hearing and shall state where a copy of the impact statement may be viewed or requested. The clerk of the board of supervisors shall post the notice in at least three conspicuous public places in the area of the proposed district and shall publish twice in a daily newspaper of general circulation in the area of the proposed district, at least ten days before the hearing, or, if no daily newspaper of general circulation exists in the area of the proposed district, 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 area of the proposed district and the day, hour and place of the hearing.

4. At the hearing called pursuant to paragraph 2 of this subsection, the board of supervisors shall hear those who appear for and against the proposed district and shall determine whether the creation of the district will promote public health, comfort, convenience, necessity or welfare. If the board of supervisors determines that the public health, comfort, convenience, necessity or welfare will be promoted, it shall approve the district impact statement and authorize the persons proposing the district to circulate petitions as provided in this subsection. For a community park maintenance district that is required to obtain the approval of more than one county's board of supervisors, the petitions may only be circulated after approval of the board of supervisors from each affected county. The order of the board of supervisors shall be final, but if the request to circulate petitions is denied, a subsequent request for a similar district may be refiled with the board of supervisors after six months from the date of such the denial. The county board of supervisors shall authorize the circulation of petitions of only one proposed new district of the same type in which any property owner's land is proposed for inclusion. No A new petition circulation shall not be authorized until the one-year period to submit signatures prescribed by section 48‑261, subsection A, paragraph 6, of this subsection of the original petition circulation has expired or has otherwise been extinguished.

5. Within fifteen days after receiving the approval of the board of supervisors as prescribed by paragraph 4 of this subsection, the clerk of the board shall determine the minimum number of signatures and assessed valuation required for compliance with paragraph 7 of this subsection. After making that determination, the number of signatures shall remain fixed and the assessed valuation of the taxed taxable properties within the boundaries of the proposed district shall remain fixed for purposes of determining compliance with the property valuation requirement prescribed in paragraph 7 of this subsection.

6. After receiving the approval of the board of supervisors as provided in paragraph 4 of this subsection, any adult person may circulate and present petitions to the board of supervisors of the county in which the district is located. All petitions circulated shall be returned to the board of supervisors within one year from the date of the approval of the board of supervisors pursuant to paragraph 4 of this subsection. Any petition that is returned more than one year from that date is void.

7. The petitions presented pursuant to paragraph 6 of this subsection shall comply with the provisions regarding verification in section 48‑266 and shall:

(a) At all times, contain a map and general description of the boundaries of the proposed district sufficiently detailed to permit a property owner to determine whether a particular property is within the proposed district and the names, addresses and occupations of the proposed members of the district's organizing board of directors. No An alteration of the proposed district shall not be made after receiving the approval of the board of supervisors as provided in paragraph 4 of this subsection. The items required to be contained with the petition under this subsection subdivision shall be printed on the back of the petition form required pursuant to section 48‑266 unless the size of the items preclude precludes compliance with this requirement. An error in the legal description of the proposed district 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 subsection A of this section this subdivision.

(b) Be signed by owners of more than one‑half of the taxed taxable property units in the area of the proposed district and be signed by persons owning collectively more than one‑half of the assessed valuation of the property in the area of the proposed district. Property exempt pursuant to title 42, chapter 11, article 3 shall not be considered in determining the total assessed valuation of the proposed district nor shall owners of property not subject to taxation be eligible to sign petitions.

8. On receipt of the petitions, including any supplemental signatures, and the report of the county assessor, the board of supervisors shall set a day, not fewer than ten nor more than thirty days from that date, for a hearing on the petition. The hearing shall be postponed if a timely request to supplement petition signatures is made pursuant to section 48‑266, subsection K, so that any supplemental petition signatures submitted pursuant to that section may be considered by the board of supervisors. The postponed hearing shall be held no more than thirty days after the submission of any supplemental petition signatures.

9. Before the hearing called pursuant to paragraph 8 of this subsection, the board of supervisors shall determine the validity of the petitions presented.

10. At the hearing called pursuant to paragraph 8 of this subsection, the board of supervisors, if the petitions are valid, shall order the creation of the district. The board of supervisors shall enter its order setting forth its determination in the minutes of the meeting, not later than ten days from the day of the hearing, and a copy of the order shall be filed in the county recorder's office. The order of the board of supervisors shall be final, and the proposed district shall be created thirty days after the board of supervisors votes to create the district, except that for a community park maintenance district that is proposed for more than one county, the proposed district is created thirty days after the approval of the board of supervisors of the final county of the counties in which the district is to be located. A decision of the board of supervisors under this subsection is subject to judicial review under title 12, chapter 7, article 6.

B. For the purpose of determining the validity of the petitions presented pursuant to subsection A, paragraph 6 of this section:

1. Property held in multiple ownership shall be treated as if it had only one property owner, so that and the signature of only one of the owners of property held in multiple ownership is required on the formation petition. The number of persons owning property inside the boundaries of the proposed district 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 such 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 board of supervisors, within twenty days after such a request, a statement in writing showing the owner, the address of each owner and the appraisal or assessment value of properties contained within the boundaries of the proposed district as described in subsection A of this section.

3. Petition signatures representing real property on which taxes and assessments are not current at the time of petition review shall be invalidated are invalid.

C. The board of supervisors may require of the person desiring to propose creation of a district pursuant to subsection A, paragraph 1 of this section a reasonable bond to be filed with the board at the start of proceedings under this section. The bond shall be in an amount sufficient to cover costs incurred by the county if the district is not finally organized. County costs covered by the bond include any expense incurred from completion of the district impact statement, mailing of the notice of hearing to district property owners, publication of the notice of hearing and other expenses reasonably incurred as a result of any requirements of this section.

D. If a district is created pursuant to this section, the cost of publication of the notice of hearing, the mailing of notices to property owners and all other costs incurred by the county as a result of this section shall be a charge against the district.

E. If a proposed district would include property located within an incorporated city or town, in addition to the other requirements of subsection A of this section, the board shall approve the creation and authorize the circulation of petitions only if the governing body of the city or town has by ordinance or resolution endorsed such the creation.

F. Except as provided in section 48‑851 and section 48‑2001, subsection A, the area of a district created pursuant to this section shall be contiguous.

G. A district organized pursuant to this section shall have an organizing board of directors to administer the affairs of the district until a duly constituted board of directors is elected as provided in this title. The organizing board shall have all the powers, duties and responsibilities of an elected board. The organizing board shall consist of the three individuals named in the district impact statement and the petitions presented pursuant to subsection A of this section. If a vacancy occurs on the organizing board, the remaining board members shall fill the vacancy by appointing an interim member. Members of the organizing board shall serve without compensation but may be reimbursed for actual expenses incurred in performing their duties. The organizing board shall elect from its members a chairman and a clerk.

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

Sec. 4. 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 taxed 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 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 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 are being circulated on the date that the boundary change impact statement is filed with the governing body.

(b) The detailed list of taxed 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, not fewer than at least twenty nor but not more than thirty days from that date, for a hearing on the boundary change impact statement. The board of supervisors may at any time prior to 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 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 in which the district is located. The chairman of the board of supervisors shall order a review of the proposed change and may submit written comments to the governing body of the district within ten days of 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 persons proposing the change to circulate 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 the date of such 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. No 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.

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 provided 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 taxed taxable properties within the boundaries of the proposed change shall remain fixed for 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 a property owner to determine whether a particular property is included within the proposed change. No 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 subsection subdivision shall be printed on the back of the petition form required pursuant to section 48‑266 unless the size of the items preclude 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 subsection A of this section this subdivision.

(b) Be signed by owners of more than one‑half of the taxed 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. 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, not fewer than at least ten nor but not more than thirty days from that date, for a hearing on the request. The hearing shall be postponed if a timely request to supplement petition signatures is made pursuant to section 48‑266, subsection K, so that any supplemental petition signatures submitted pursuant to that section may be considered by the board of supervisors. The postponed hearing shall be held no more than thirty days after the submission of any supplemental petition signatures.

12. Prior to 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, not later than at least ten days from 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 such 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, so that 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 such 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 such a 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.

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 such 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 such 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 such 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 such the annexation and such the annexation is authorized pursuant to this title.

H. Except as provided in subsection D of this section and section 48‑2002, no a change in the boundaries of a district pursuant to this section shall not result in a district which 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 the effective date of this amendment to this section 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. 5. Section 48-266, Arizona Revised Statutes, is amended to read:

START_STATUTE48-266. Petitions of property owners; form; verification

A. The secretary of state shall promulgate sample petition forms, with instructions for completing the form, that comply with the requirements of this statute section. Petitions that conform to the sample form will be deemed to have complied with sections subsections B, C and D of this section. Petitions that do not conform to the sample petition are void and shall not be counted in determining the legal sufficiency of the petition.

B. A petition of property owners that is submitted to comply with section 48‑261, subsection A, paragraph 7 shall contain a heading that clearly identifies the type of petition circulated and a statement that clearly describes the type of action being proposed. The petition shall be in a form that is substantially similar to the following:

Special taxing district creation petition

To the board of supervisors of (insert name) county:

We the undersigned, property owners of (insert name of county), state of Arizona and owning property within the boundaries as illustrated and defined on the attached exhibit(s), legal description and map of the proposed boundaries, petition the county board of supervisors to create a (insert description of district) as described in the attached exhibit(s). I have personally signed this petition with my first and last names. I have not signed any other petition for the same measure. I am a property owner of the state of Arizona, county of _____________.

Notice: this is only a description of the district sought to be created by the sponsor of the measure. It may not include every provision contained in the measure. Before signing, make sure the exhibits are attached. You have the right to read or examine the district impact statement before signing.

Warning

It is a class 1 misdemeanor for any person to knowingly do any of the following:

1. Sign a district creation petition with a name other than the person's own name, except in a circumstance where the person signs for another person, in the presence of and at the specific request of that person, who is incapable of signing that person's own name because of physical infirmity.

2. Sign the person's name more than once for the same measure.

3. Sign a district creation petition if the person is not a property owner.

Signature Name Actual Arizona City or Date

(first and Address Post Office Town

last name (street & Address (if any)

printed) no. and if & Zip

no street Code

address,

describe

residence

location)

(Fifteen numbered lines for signatures)

C. A petition of property owners that is submitted to comply with section 48-262, subsection A, paragraph 10 shall contain a heading that clearly identifies the type of petition circulated and a statement that clearly describes the type of action being proposed. The petition shall be in a form substantially similar to the following:

Special taxing district annexation petition

To the governing body of the (insert name) district:

We the undersigned, property owners of (insert name of county), state of Arizona and owning property within the boundaries as illustrated and defined on the attached exhibit(s), legal description and map of the proposed boundaries, petition the district to annex the territory as described in the attached exhibit(s). The area petitioning for annexation, if approved by the governing body of the district, shall become part of the annexing district and subject to all relevant provisions of the Arizona Revised Statutes. I have personally signed this petition with my first and last names. I have not signed any other petition for the same measure. I am a property owner of the state of Arizona, county of _____________.

Notice: this is only a description of the territory sought to be annexed by the sponsor of the measure. It may not include every provision contained in the measure. Before signing, make sure the exhibits are attached. You have the right to read or examine the boundary change impact statement before signing.

Warning

It is a class 1 misdemeanor for any person to knowingly do any of the following:

1. Sign a district annexation petition with a name other than the person's own name, except in a circumstance where the person signs for another person, in the presence of and at the specific request of that person, who is incapable of signing that person's own name because of physical infirmity.

2. Sign the person's name more than once for the same measure.

3. Sign a district annexation petition if the person is not a property owner.

Signature Name Actual Arizona City or Date

(first and Address Post Office Town

last name (street & Address (if any)

printed) no. and if & Zip

no street Code

address,

describe

residence

location)

(Fifteen numbered lines for signatures)

D. Each petition sheet shall have printed in capital letters in no less than twelve point bold-faced type in the upper right-hand corner of the face of the petition sheet the following:

"___________ paid circulator" "______________ volunteer"

E. A circulator of petitions shall state whether the circulator is a paid circulator or volunteer by checking the appropriate line on the petition form before circulating the petition for signatures.

F. Signatures obtained on petitions in violation of subsection C D of this section are void and shall not be counted in determining the legal sufficiency of the petition. The presence of signatures that are invalidated under this subsection on a petition does not invalidate other signatures on the petition that were obtained as prescribed by this section.

G. At the time of signing, the property owner shall sign the property owner's first and last names in the spaces provided and the property owner so signing for the person circulating the petition shall print the first and last names and write, in the appropriate spaces following the signature, the signer's residence address, giving street and number, and if the property owner has no street address, a description of the residence location. The property owner so signing or the person circulating the petition shall write, in the appropriate spaces following the property owner's address, the date on which the property owner signed the petition.

H. The title and text of petitions shall be in at least eight point type.

I. The eight point type required by subsection G H of this section does not apply to maps, charts or other graphics.

J. The board of supervisors or other governing body of a political subdivision that receives a petition pursuant to this section shall submit a copy of the signature sheets to the county assessor for verification. The county assessor shall:

1. Verify that the petition contains the names of more than one‑half of the property owners in the area of the proposed district.

2. Determine the total assessed valuation of the property owned by the persons whose names are signed on the petition.

K. The county assessor shall report the results of the verification to the board of supervisors or other governing body within ten days after receiving the copy of the signature sheets, not including Saturdays, Sundays and other legal holidays.

L. If the report of the county assessor prepared pursuant to subsection K of this section determines that the valid signatures submitted are insufficient to meet the requirements of section 48‑261, subsection A, paragraph 7, subdivision (b) and the one-year period to submit signatures pursuant to section 48‑261, subsection A, paragraph 6 has not yet expired or to meet the requirements of section 48‑262, subsection A, paragraph 10, subdivision (b), and the one-year period to submit signatures pursuant to section 48‑262, subsection B, paragraph 3 has not yet expired, the person submitting the petitions may request that any hearing on the petitions be extended by a period of up to thirty days to permit submission of submit additional petition signatures. The request to extend must be made within five days from the preparation of the county assessor's report or before the conclusion of the board of supervisors' hearing on the petitions, whichever is earlier. Only one request to extend may be made, and only one additional submission of petitions may be made during the extension period. The original petition signatures may be submitted any time during the one-year period for submittal and the additional submission must also be made within the same one-year period to submit signatures set by section 48‑261, subsection A, paragraph 6 or section 48‑262, subsection B, paragraph 3. If additional signatures are submitted, they shall be submitted to the county assessor for verification pursuant to subsections I and J and K of this section.

Sec. 6. Section 48-802, Arizona Revised Statutes, is amended to read:

START_STATUTE48-802. Election procedures; qualifications

A. All elections held pursuant to this article shall conform to the requirements of this section.

B. Except as otherwise provided in this article, the manner of conducting and voting at an election, contesting an election, keeping poll lists, canvassing votes and certifying returns shall be the same, as nearly as practicable, as in elections for county officers. If the fire district is administered by a board, after consultation with the officer in charge of elections, a fire district may divide itself into precincts. To the extent practicable, the precincts shall be equal or as nearly equal in population and shall conform to the boundaries of precincts adopted by the board of supervisors of the county. The fire district shall thereafter conduct its elections using those precincts.

C. No person may vote at the election other than a qualified elector of this state who has registered to vote at least twenty‑nine days before the election as a resident within the district boundaries, proposed district boundaries created by the merger of fire districts or the proposed district boundaries created by a consolidated district. A person offering to vote at a fire district election for which no fire district register has been supplied shall sign an affidavit stating the person's address and the fire district in which the person resides and swearing the person is qualified to vote and has not voted at the fire district election being held. A person offering to vote at a fire district election for which a fire district register has been supplied shall proceed as required for voting at any election at which precinct registers are used.

D. In elections for an elected chief and secretary‑treasurer or district board members:

1. The person or persons within the district or precinct, as applicable, receiving the highest number of votes shall be declared elected.

2. Candidates must be, and during incumbency must remain, qualified electors of the fire district and, except for a district formed pursuant to article 3 of this chapter, must be a resident of the district for at least one year immediately preceding the date of the election. In a fire district that is divided into precincts as prescribed by subsection B of this section, candidates shall be qualified electors of the precinct in which they are candidates and during incumbency must remain qualified electors of that precinct. Except for a district formed pursuant to article 3 of this chapter, a person is not eligible to be a candidate for election to the fire district board if that person is related by affinity or consanguinity within the third degree to a person who serves on the board during the potential candidate's term of office. Any person who violates this paragraph is not eligible to serve on the board.

3. Elections, other than special elections to fill a vacancy or elections to merge or dissolve fire districts, shall be held on the first Tuesday after the first Monday in November of the first even numbered year following the year the district is declared organized by the board of supervisors and, in the case of a fire district administered by a district board, every two years thereafter on the first Tuesday after the first Monday in November. Elections shall be held every four years thereafter in districts administered by an elected chief.

4. Except for an election to reorganize a fire district, nominating petitions shall be filed with the board of supervisors as prescribed by title 16, chapter 3. If only one person files or no person files a nominating petition for an election to fill a position on the district board or the position of elected fire chief or elected secretary‑treasurer for which the term of office is to expire, the board of supervisors may cancel the election for that position and appoint the person who filed the nominating petition to fill the position. If no person files a nominating petition for an election to fill a district office, the board of supervisors may cancel the election for those offices and those offices are deemed vacant and shall be filled as otherwise provided by law. A person who is appointed pursuant to this paragraph is fully vested with the powers and duties of the office as if elected to that office.

5. The names of all nominated persons for office within the district or precinct, as applicable, shall appear on the ballot without partisan designation.

E. In an election to reorganize, notice of the appropriate order of the board of supervisors or governing body of the district shall be given as prescribed by title 16.

F. In an election to merge fire districts, notice of the appropriate order of the board of supervisors shall be given as prescribed by title 16. In addition, notice of the election with an accurate map of the territory proposed to be merged shall be sent by first class mail to each owner of property that would be subject to taxation by the merged district at least sixty days before the election. An order to hold an election shall be issued not more than thirty days after the receipt of the resolution to merge fire districts pursuant to section 48‑820.

G. In an election to consolidate fire districts, notice of the appropriate order of the board of supervisors shall be given as prescribed by title 16. In addition, notice of the election with an accurate map of the territory proposed to be consolidated shall be sent by first class mail to each owner of property that would be subject to taxation by the consolidated district at least sixty days before the election. An order to hold an election shall be issued not more than thirty days after the receipt of the resolution to consolidate fire districts pursuant to section 48-822. END_STATUTE

Sec. 7. Section 48-803, Arizona Revised Statutes, is amended to read:

START_STATUTE48-803. District administered by a district board; report

A. In a district that the board of supervisors estimates has a population of fewer than four thousand inhabitants, the district board may consist of three or five members. In a district that the board of supervisors estimates has a population of four thousand or more inhabitants, the district board shall consist of five members, and for a noncontiguous county island fire district formed pursuant to section 48‑851, the board shall consist of five members. The estimate of population by the board of supervisors is conclusive and shall be based on available census information, school attendance statistics, election or voter registration statistics, estimates provided by state agencies or the county assessor, or other information as deemed appropriate by the board of supervisors. If the board of supervisors determines, at any time prior to one hundred twenty days before the next regular scheduled election for members of a district board, that the population of a fire district administered by a district board consisting of three members exceeds four thousand inhabitants, estimated as provided in this section, the board of supervisors shall order an increase in the number of members of the district board. If the board of supervisors determines at any time prior to one hundred eighty days before the next regularly scheduled election for members of a district board that the population of a fire district administered by a district board that consists of five members exceeds fifty thousand inhabitants as prescribed in this section, the board of supervisors shall inform the district board that it may expand to seven members. Any expansion to seven members shall occur by majority vote of the district board. The increase is effective for the election of the additional members at the next regular election of members of the district board.

B. If a vacancy occurs on the district board other than from expiration of a term, the remaining board members shall fill the vacancy by appointment of an interim member and except for a district formed pursuant to article 3 of this chapter, the remaining board members shall fill the vacancy within ninety days after the date the vacancy occurs. Except for a district formed pursuant to article 3 of this chapter, if the remaining district board members do not appoint an interim member within that ninety-day period, the board of supervisors shall appoint an interim member to the district board within sixty days after expiration of the ninety-day period, and if the district is located in more than one county, the board of supervisors of the county in which the majority of the assessed valuation of the district is located shall make the appointment after the expiration of the ninety-day period. If the entire board resigns or for any reason cannot fulfill its duties, the board of supervisors shall appoint an administrator to administer the district with the same duties and obligations of the elected board. If the board of supervisors fails to appoint an administrator within thirty days AFTER the resignation of the entire board or its inability to FULFILL its duties, a special election shall be held to fill the vacancies on the fire district board.

C. Members of the district board shall serve without compensation, but may be reimbursed for actual expenses incurred in performing duties required by law.

D. The board of a fire district shall appoint or hire a fire chief.

E. The district board shall elect from its members a chairman and a clerk. Except for a district formed pursuant to article 3 of this chapter, the election of the chairman and the clerk must occur at the district board meeting that first occurs in the month immediately following each general election.

F. For districts formed under article 3 of this chapter, of the members first elected to district boards consisting of three members, the two people receiving the first and second highest number of votes shall be elected to four‑year terms, and the person receiving the third highest number of votes shall be elected to a two-year term. Of the members first elected to district boards consisting of five members, the three people receiving the first, second and third highest number of votes shall be elected to four-year terms, and the two people receiving the fourth and fifth highest number of votes shall be elected to two-year terms. Thereafter, the term of office of each district board member shall be four years from the first day of the month next following such member's election. Of the members elected as additional members to a five-member district board, the person with the highest number of votes is elected to a four-year term and the person with the second highest number of votes is elected to a two‑year term. If a district resolves to increase the governing board to seven members pursuant to subsection A of this section, the governing board may appoint two additional members to serve until the next general election. After the general election at which the two additional members are elected, the newly elected member with the highest number of votes serves a four-year term and the other member serves a two-year term. Thereafter, the term of office for these two new members is four years.

G. For any fire district administered by a three-member board and that levies taxes in a fiscal year in the amount of five hundred thousand dollars or more, the district must be administered by a five-member board, beginning with the first general election held after the end of the fiscal year in which the district levied the prescribed amount, the change to a five-member board must occur as prescribed in this subsection. On levying the prescribed amount, the district may not reorganize as a three-member board regardless of any subsequent change in the district's levy. For three-person boards with a single vacancy for an existing board membership position and that are adding two additional members, the three persons with the highest number of votes are elected to a four-year term of office. For three-person boards with two vacancies for existing board membership positions and that are adding two additional members, the three persons with the first, second and third highest numbers of votes are elected to four-year terms of office and the person with the fourth highest number of votes is elected to a two‑year term of office. Thereafter, all terms of office for members of these five-person boards of directors must be four years. This subsection applies to any three-member board that is expanding to a five-member board, regardless of whether the expansion is the result of the amount of the district's levy. This subsection does not apply to districts formed under article 3 of this chapter.

H. Beginning with the 2014 general election and except for a district formed pursuant to article 3 of this chapter, all persons who are elected or appointed to a fire district board and the fire chief who is appointed or hired by the district board shall attend professional development training that is provided by an association of Arizona fire districts. District board members and the fire chief shall complete at least six hours of professional development training, with board members completing their training within one year after the date of the certification of their election and for the fire chief, within one year after the date of hiring. The fire district shall reimburse board members and the fire chief for the reasonable costs of the training. The professional development training must include training on open meetings laws, finance and budget matters and laws relating to fire district governance and other matters that are reasonably necessary for the effective administration of a fire district.

I. On or before December 31 of each year, the fire district association that has provided training required pursuant to subsection h of this section shall submit a report that describes the compliance with the training requirements to the county board of supervisors for every county in which the fire district operates. The annual report must include at least the following:

1. A compilation of the professional development training delivered by the association pursuant to this section and the names of the fire district board members and fire chiefs who are compliant and noncompliant with the requirements of this section.

2. Recommendations regarding improvements to the laws of this state or to administrative actions that are required under the laws of this state pertaining to fire districts.

J. For fire district governing board members and fire chiefs who are required to attend professional development training pursuant to subsection H of this section, a fire district governing board member or fire chief who fails to complete the professional development training within the time prescribed in this section is guilty of nonfeasance in office. Any person may make a formal complaint to the county board of supervisors regarding this failure to comply, and the county board of supervisors may submit the complaint to the county attorney for possible action. The county attorney may take appropriate action to achieve compliance, including filing an action in superior court against a fire district governing board member or a fire chief for failure to comply with the professional development training requirements prescribed in this section. If the court determines that a fire district governing board member or fire chief failed to comply with the professional development training requirements prescribed in this section, the court shall issue an order removing the fire district governing board member from office or the fire chief from employment or appointment with the district. Any vacancy in the office of a fire district governing board as a result of a court order that is issued pursuant to this subsection must be filled in the manner provided by law. END_STATUTE

Sec. 8. Section 48-804, Arizona Revised Statutes, is amended to read:

START_STATUTE48-804. District administered by elected chief and secretary‑treasurer

A. Until the first term of office that commences immediately after the next regular election for that fire district after the effective date of this amendment to this section, a district which the board of supervisors estimates has a population of fewer than four thousand inhabitants may be administered by an elected chief and secretary-treasurer. Upon organization of a fire district administered by an elected chief and secretary-treasurer or reorganization of a fire district administered by a district board as a district administered by an elected chief and secretary-treasurer, the elected chief and secretary-treasurer shall serve until the qualification of their successors at the next election held as provided in section 48‑802, subsection D, paragraph 3. Thereafter, the elected chief and secretary‑treasurer shall serve terms of four years from the first day of the month next following their election.

B. If a vacancy occurs in the office of elected chief or secretary‑treasurer other than from expiration of a term, the board of supervisors shall fill the vacancy by appointment of an interim chief or secretary‑treasurer. If the board of supervisors fails to appoint a replacement within thirty days, a special election shall be held to fill the vacancy.

C. The secretary‑treasurer is responsible for keeping records of all meetings of the district.

D. a. Beginning with the first term of office that commences immediately after the next regular election for that fire district after the effective date of this amendment to this section july 29, 2010, all districts that are administered by an elected chief and secretary-treasurer shall be administered by a three-member elected board of directors or a five-member elected board of directors as provided in section 48-803, subsection A and the position positions of elected chief and elected secretary‑treasurer no longer exist for that district and have no legal or administrative authority for and in the district. Persons elected to a three-member board of directors or a five-member board of directors pursuant to this subsection shall be designated to serve staggered terms of four years, with the initial terms of office for the three-member board or five-member board determined as prescribed in section 48-803, subsection F G. Thereafter, all terms of office for members of these three-person or five-person boards of directors shall be four years.

E. b. Beginning on the effective date of this amendment to this section july 29, 2010, no new fire district may be established with an elected chief and secretary‑treasurer and no existing fire district may be reorganized into a district with an elected chief and secretary‑treasurer. END_STATUTE

Sec. 9. Section 48-805, Arizona Revised Statutes, is amended to read:

START_STATUTE48-805. Fire district; powers and duties

A. A fire district, through its board, shall:

1. Hold public meetings at least once each calendar month unless a board consists of three members and the fire district levies less than five hundred thousand dollars annually then the board shall meet in July and at least every two months thereafter. A board for a district organized pursuant to article 3 of this chapter shall hold public meetings at least every two months.

2. Determine the compensation payable to district personnel.

3. Require probationary employees in a paid sworn firefighter position, a reserve firefighter position or a volunteer firefighter position to submit a full set of fingerprints to the fire district. The fire district shall submit the fingerprints to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

B. A fire district, through its board, may:

1. Employ any personnel and provide services deemed necessary for fire protection, for preservation of life and for carrying out its other powers and duties, including providing ambulance transportation services when authorized to do so pursuant to title 36, chapter 21.1, article 2, but a member of a district board shall not be an employee of the district. The merger of two or more fire districts pursuant to section 48‑820 or the consolidation with one or more fire districts pursuant to section 48‑822 shall not expand the boundaries of an existing certificate of necessity unless authorized pursuant to title 36, chapter 21.1, article 2.

2. Construct, purchase, lease, lease‑purchase or otherwise acquire the following or any interest therein and, in connection with the construction or other acquisition, purchase, lease, lease‑purchase or grant a lien on any or all of its present or future property, including:

(a) Apparatus, water and rescue equipment, including ambulances and equipment related to any of the foregoing.

(b) Land, buildings, equipment and furnishings to house equipment and personnel necessary or appropriate to carry out its purposes.

3. Finance the acquisition of property as provided in this section and costs incurred in connection with the issuance of bonds as provided in section 48‑806. Bonds shall not be issued without the consent of a majority of the electors of the district voting at an election held for that purpose. For the purposes of an election held under this paragraph, all persons who are eligible to vote in fire district elections under section 48‑802 are eligible to vote.

4. Enforce the fire code adopted by the district, if any, and assist the state fire marshal in the enforcement of fire protection standards of this state within the fire district including enforcement of a nationally recognized fire code if expressly authorized by the state fire marshal.

5. After the approval of the qualified electors of the fire district voting at a regular district election or at a special election called for such that purpose by the district board, as appropriate, or at any election held in the county that encompasses the fire district, adopt the __________ fire code, which is a nationally recognized fire code approved by the state fire marshal. The words appearing on the ballots shall be "should ______________ fire district adopt the ______________ fire code, which is a nationally recognized fire code approved by the state fire marshal‑‑yes", "should ________________ fire district adopt the ______________ fire code, which is a nationally recognized fire code approved by the state fire marshal‑‑no". The code shall be enforced by the county attorney in the same manner as any other law or ordinance of the county. Any inspection or enforcement costs are the responsibility of the fire district involved. The district shall keep the code on file which shall be open to public inspection for a period of thirty days before any election for the purpose of adopting a fire code. Copies of the order of election shall be posted in three public places in the district at least twenty days before the date of the election, and if a newspaper is published in the county having a general circulation in the district, the order shall be published in the newspaper at least once a week during each of the three calendar weeks preceding the calendar week of the election.

6. Amend or revise the adopted fire code, including replacement of the adopted fire code with an alternative nationally recognized fire code, with the approval of the state fire marshal and after a hearing held pursuant to posted and published notice as prescribed by section 48‑805.02, subsection A. The district shall keep three copies of the adopted code, amendments and revisions on file for public inspection.

7. Enter into an agreement procuring the services of an organized private fire protection company or a fire department of a neighboring city, town, district or settlement without impairing the fire district's powers.

8. Contract with a city or town for fire protection services for all or part of the city or town area until the city or town elects to provide regular fire department services to the area.

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

10. Retain private legal counsel.

11. Accept gifts, contributions, bequests and grants and comply with any requirements of those gifts, contributions, bequests and grants that are not inconsistent with this article.

12. Appropriate and expend annually 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.

13. Adopt resolutions establishing fee schedules both within and outside of the jurisdictional boundaries of the district for providing fire protection services and services for the preservation of life, including emergency fire and emergency medical services, plan reviews, standby charges, fire cause determination, users' fees or facilities benefit assessments or any other fee schedule that may be required.

14. With the approval of two of the three members of a three-member board, four of the five members of a five-member board or five of the seven members of a seven-member board, change the district's name and on so doing shall give written notice to the board of supervisors of the change. The governing board of a fire district may place a question on the general election ballot as to whether the fire district shall change its name.

15. Require all employees to submit a full set of fingerprints as prescribed by subsection A, paragraph 3 of this section.

16. Enter into intergovernmental agreements or contracts as follows:

(a) Enter into an intergovernmental agreement with another political subdivision for technical or administrative services or to provide fire services to the property owned by the political subdivision, including property that is outside the district boundary.

(b) Enter into a contract with individuals to provide technical or administrative services.

(c) Enter into a contract with individuals to provide fire protection services or emergency medical services, or both, to the extent not regulated by title 36, chapter 21.1 to property owned by the individual located outside the district boundaries if the individual's property is not located in a county island as defined in section 11‑251.12 and at least one of the following apply:

(i) The existing fire service provider where the individual's property is located has issued a notice to the individual that the provider plans to discontinue service.

(ii) Fire service is not available to the individual's property.

(iii) Fire service is offered pursuant to a contract or subscription and the individual has not obtained service for a period of twenty-four months before the date of the contract with the district.

(d) Enter into a contract with individuals to provide fire services to property owned by the individual located outside the district boundaries, where the individual's property is located in a county island as defined in section 11‑251.12, if both of the following apply:

(i) The existing fire service provider where the individual's property is located has issued a notice to the residents of the county island and the individual that the provider plans to discontinue or substantially reduce service.

(ii) The district offers contracts to all residents and property owners of the county island who will be affected by the discontinuance or substantial reduction in service by the current fire service provider.

(e) For the purposes of subdivision (a), (b), (c) or (d) of this paragraph, a district may contract with any public or private fire service provider to provide some or all of the contractual services the district is contracting to deliver.

(f) Any contract entered into pursuant to subdivisions (b), (c) and (d) of this paragraph shall include a provision setting forth the cost of service and performance criteria.

C. A fire district may not administratively add or annex additional property or delete property or otherwise modify its boundaries except in a merger or consolidation pursuant to this chapter or in a boundary change made pursuant to section 48-262. This subsection does not apply to a district organized pursuant to article 3 of this chapter.

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

D. E. For any fire district that designates one or more board members to have access to the financial books and records of the district, those board members are authorized by law to have full access to those financial books and records.

E. F. The district board may assess and levy a secondary property tax pursuant to this article to pay for the costs of fire protection services or emergency medical services except for services regulated pursuant to title 36, chapter 21.1.

F. G. The county attorney may advise and represent the district if in the county attorney's judgment the 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. END_STATUTE

Sec. 10. Section 48-805.02, Arizona Revised Statutes, is amended to read:

START_STATUTE48-805.02. Fire district annual budget; levy; requirements

A. A fire district shall prepare an annual budget that contains detailed estimated expenditures for each fiscal year and that clearly shows salaries payable to employees of the district. The budget summary shall be posted in three public places and a complete copy of the budget shall be published on the district's official website for twenty days before a public hearing at a meeting called by the board to adopt the budget. 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. A complete copy of the adopted budget shall be posted in a prominent location on the district's official website within seven business days after final adoption and shall be retained on the website for at least sixty months. For any fire district that does not maintain an official website, the fire district may comply with this subsection by posting on a website of an association of fire districts in this state.

B. Not more than ten days after the organization of a fire district and not later than August 1 of each year thereafter, the chairman of the district board shall submit to the county board of supervisors a budget estimate that contains certifications by item and that specifies the amount of money required for the maintenance and operation of the district for the ensuing year.

C. Based on the budget submitted by the district, the board of supervisors shall levy the tax as prescribed in section 48‑807, subsection E.

D. Every budget adopted by a fire district shall include the following:

1. A certification by the chairman and clerk of the district board as to both of the following:

(a) That the district has not incurred any debt or liability in excess of taxes levied and to be collected and the money actually available and unencumbered at that time in the district general fund, except for those liabilities as prescribed in section 48‑805, subsection B, paragraph 2 and sections 48‑806 and 48‑807.

(b) That the district complies with subsection E F of this section.

2. For each of the items listed in the budget summary approved pursuant to subsection A of this section, the district shall estimate the revenue or expense for the next two fiscal years. Estimates shall be based on the average increase or decrease of the item for the previous two fiscal years unless more certain information is available to the district. Estimates shall include any applicable levy or rate limitations.

3. If a district's total estimate of expenses exceeds its total estimate of revenues for any fiscal year, the district shall undertake a study of merger, consolidation or joint operating alternatives. The study required by this subsection paragraph shall be presented to the fire district board in a special public meeting called for the sole purpose of evaluating the study. The study shall include an identification of districts available for merger, consolidation or joint operations, an analysis of the level of service and cost of service that may be provided to the residents of a merged, consolidated or jointly operated district as compared to the level and cost of service to the residents of the districts without any merger, consolidation or joint operations.

E. For any district that amends its budget after its initial adoption, the district board shall hold at least two hearings on the revision of the budget and the revised budget must be considered and adopted in a special meeting that is called for the adoption of the revised budget. The special meeting must be held one week after the consideration of the revision of the budget at a regularly scheduled meeting of the board of directors of the district. This subsection does not apply to a district organized pursuant to article 3 of this chapter.

E. F. When a fire district has adopted a budget and the board of supervisors has levied a fire district tax as provided in subsection C of this section and the district has insufficient monies in its general fund with the county treasurer to operate the district, the chairman of the fire district board of directors, 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 monies 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.

F. G. Any audit or report of a fire district made pursuant to section 48‑253 shall be presented in person to the district board by the auditor and the district board shall accept the audit or report. The audit or report shall include a certification by the auditor of the district as to both of the following:

1. That the district has not incurred any debt or liability in excess of taxes levied and to be collected and the monies actually available and unencumbered at that time in the district general fund except for those liabilities as prescribed in section 48‑805, subsection B, paragraph 2 and sections 48‑806 and 48‑807.

2. That the district complies with subsection E F of this section. END_STATUTE

Sec. 11. Title 48, chapter 5, article 1, Arizona Revised Statutes, is amended by adding section 48-805.03, to read:

START_STATUTE48-805.03. Employment of relatives; violation; classification

A. It is unlawful for an elected or appointed officer or employee of A fire district to do any of the following:

1. Appoint or vote for appointment of any person who is related to that officer or employee by affinity or consanguinity within the third degree to any clerkship, office, position, employment or duty in any department of that fire district when the salary, wages or compensation of that appointee is to be paid from public monies or fees.

2. Appoint, vote for or agree to appoint or to work for, suggest, arrange or be a party to the appointment of any person in consideration of the appointment of a person who is related to that officer or employee within the degree prescribed by this section.

B. An employee of a fire district or the spouse of an employee of a fire district may not hold membership on the governing board of the fire district that employs that employee.

C. This section does not apply to a fire district formed pursuant to article 3 of this chapter.

D. A person who violates this section is guilty of a class 2 misdemeanor. END_STATUTE

Sec. 12. Section 48-851, Arizona Revised Statutes, is amended to read:

START_STATUTE48-851. Noncontiguous county island fire district; formation; definition

A. A noncontiguous county island fire district shall be formed by the following procedures:

1. One or more persons who wish to petition for a noncontiguous county island fire district shall request and the county assessor shall provide a map and a detailed list of all property parcels that includes the assessed values of all of the county island areas that are contained within the municipal planning area of a city or other unincorporated area as prescribed in subsection E, paragraph 2 of this section.

2. Within sixty days after receiving a map from the county assessor, the person shall submit a revised map that indicates those county island areas that are proposed to be included in the noncontiguous county island fire district and shall submit a district impact statement that shall contain at least the following:

(a) A general description of the boundaries of the proposed district, a map of the area to be included in the district and a list of the parcels to be included in the district by assessor parcel number.

(b) An estimate of the assessed valuation within the proposed district.

(c) An estimate of the change in the property tax liability, as a result of the proposed district, of a typical resident of the proposed district.

(d) A list and explanation of benefits that will result from the proposed district.

(e) A list and explanation of the injuries that will result from the proposed district.

(f) The names, addresses and occupations of the three proposed members of the district's organizing board of directors.

(g) A description of the scope of services to be provided by the district during its first five years of operation.

3. On receipt of the revised map and the impact statement, the board of supervisors shall set a day for a hearing on the proposed district formation not more than sixty days from the date the map and impact statement are received.

4. The clerk of the board of supervisors shall mail, by first class mail, written notice of the day, hour and place of the hearing on the proposed district to each owner of taxable property within the boundaries of the proposed district. The written notice shall state the purpose of the hearing and shall state where a copy of the impact statement may be viewed or requested. The clerk of the board of supervisors shall post the notice in at least three conspicuous public places in the area of the proposed district and shall publish twice in a daily newspaper of general circulation in the area of the proposed district, at least ten days before the hearing, or, if no daily newspaper of general circulation exists in the area of the proposed district, at least twice at any time before the date of the hearing, a notice setting forth the purpose of the proposed district formation, the description of the area of the proposed district and the day, hour and place of the hearing.

5. At the hearing called pursuant to paragraph 3 of this subsection, the board of supervisors shall hear those who appear for and against the proposed district and shall determine whether the creation of the district will promote public health, comfort, convenience, necessity or welfare. If the board of supervisors determines that the public health, comfort, convenience, necessity or welfare will be promoted, it shall authorize the persons proposing the district to circulate petitions as provided in this subsection. The order of the board of supervisors shall be final, but if the request to circulate petitions is denied, a subsequent request for a similar district may be refiled with the board of supervisors after six months from the date of the denial.

6. Within fifteen days after receiving the approval of the board of supervisors as prescribed by paragraph 5 of this subsection, the clerk of the board shall:

(a) Determine the minimum number of signatures required for compliance with paragraph 8, subdivision (b) of this subsection. After making that determination, that number of signatures shall remain fixed.

(b) Certify whether the petition form to be used is valid and in compliance with section 48-266.

7. After receiving the approval of the board of supervisors as provided in paragraph 5 of this subsection, any adult person may circulate and present petitions to the board of supervisors of the county in which the district is located. All petitions circulated shall be returned to the board of supervisors within one year from the date of the approval of the board of supervisors pursuant to paragraph 5 of this subsection. Any petition that is returned more than one year from that date is void. On authorization of the board of supervisors to circulate petitions, the organizing board of the district established pursuant to this subsection may enter into written agreements with third parties to provide services related to the formation of the district that may include the cost of circulating petitions and associated expenses, but in no event may the cost of reimbursable expenses exceed fifteen dollars per parcel. The district shall reimburse third parties subject to the successful formation of the district and on receipt of secondary property tax revenues by the district.

8. The petitions presented pursuant to paragraph 7 of this subsection shall comply with the provisions regarding verification in section 48‑266 and shall:

(a) At all times, contain a general description of the boundaries of the proposed district, the assessor's map of the proposed district and the names, addresses and occupations of the proposed members of the district's organizing board of directors. No alteration of the proposed district shall be made after receiving the approval of the board of supervisors as provided in paragraph 5 of this subsection.

(b) Be signed by more than one-half of the aggregate number of property owners in the county island areas contained in the proposed district.

9. On receipt of the petitions, the board of supervisors shall set a day, not more than thirty days from that date, for a hearing on the petition.

10. Before the hearing called pursuant to paragraph 9 of this subsection, the board of supervisors shall determine the validity of the petition signatures presented. At the hearing called pursuant to paragraph 9 of this subsection, the board of supervisors, if the petitions are valid, shall order the formation of the district. The board of supervisors shall enter its order setting forth its determination in the minutes of the meeting, not later than ten days from the day of the hearing, and a copy of the order shall be filed in the county recorder's office. The order of the board of supervisors shall be final, and the proposed district is formed thirty days after the board of supervisors votes to form the district. A decision of the board of supervisors under this subsection is subject to judicial review under title 12, chapter 7, article 6.

B. For the purpose of determining the validity of the petitions presented pursuant to subsection A, paragraph 7 of this section property held in multiple ownership shall be treated as if it had only one property owner, so that the signature of only one of the owners of property held in multiple ownership is required on the formation petition.

C. If a district is formed pursuant to this section, the cost of publication of the notice of hearing and the mailing of notices to electors and property owners and all other costs incurred by the county as a result of this section shall be a charge against the district.

D. A district organized pursuant to this section shall have an organizing board of directors to administer the affairs of the district until a duly constituted board of directors is elected as provided in this title. The organizing board shall have all the powers, duties and responsibilities of an elected board. The organizing board shall consist of the three individuals named in the petitions presented pursuant to subsection A of this section. If a vacancy occurs on the organizing board, the remaining board members shall fill the vacancy by appointing an interim member. Members of the organizing board shall serve without compensation but may be reimbursed for actual expenses incurred in performing their duties. The organizing board shall elect from its members a chairperson and a clerk. For any challenge to the formation of the district, the district board is a proper party to the challenge and any petition circulators are not proper parties.

E. For the purposes of this article, "noncontiguous county island fire district" means a district that is formed pursuant to this section and for which either all of the following applies apply:

1. The district consists of only noncontiguous county islands in a geographic boundary area that is contained in a municipal planning area and:

(a) is within the boundaries of an automatic aid or mutual aid consortium.

(b) 2. Fire protection services are not funded pursuant to section 48‑807 at the time of the district's formation.

(c) 3. There is only one fire district within the geographic area of the municipal planning area for any one city or town.

2. The district consists of only one or more noncontiguous county islands that are not contained in a municipal planning area in which the geographic boundary area of the district is surrounded by any combination of federal, state, county, municipal or fire district jurisdictional boundaries and:

(a) The area is currently served by a private fire protection service provider.

(b) Fire protection services are not funded pursuant to section 48‑807 at the time of the district's formation. END_STATUTE

Sec. 13. 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 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 no 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 no 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 in an electronic media or digital imaging format according to standards for the storage of permanent public records established by the director of the Arizona state library, archives and public records. The director of the Arizona state library, archives and public records shall approve an acceptable electronic media or digital imaging format for the district. The county in which the district is located shall maintain an official copy of the permanent public records of the district. The copy of the permanent public records shall be provided to the county by the district annually no later than ninety days after the end of the fiscal year.

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 fire code of the municipality whose municipal planning area includes the district except that 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 (c) (b) of this subsection.

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

(a) If the district is formed pursuant to section 48‑851, subsection E, paragraph 1, 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 formed pursuant to section 48‑851, subsection E, paragraph 1 shall make a formal expression of intent to enter into an agreement with the district within twenty‑one days of district formation.

(b) If the district is formed pursuant to section 48‑851, subsection E, paragraph 2, enter into a contract with a private fire protection service provider for the district. The private fire protection service provider seeking to enter into a contract with the district shall make a formal expression of intent within twenty-one days of district formation to enter into the contract with the district. If the private fire protection service provider makes a formal expression of intent to enter into a contract with the district, the provider shall have a right of first refusal to contract with the district on terms established by the district pursuant to subdivision (c) of this paragraph.

(c) (b) Issue a request for proposals for nonmunicipal private providers of fire protection services for the district if the current private provider fails to notify the district of its intention to enter into a contract with the district or for any contract to be awarded pursuant to subdivision (b) of this paragraph. 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.

(d) (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 as defined in section 48‑851, subsection E, paragraph 1 does not enter into an intergovernmental agreement pursuant to subdivision (a) of this paragraph or enter into a contract pursuant to subdivision (c) (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.

(e) On formation and subject to the availability of funds, reimburse third parties for services rendered pursuant to section 48‑851, subsection A, paragraph 7.

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 city's or a town's municipal planning area 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 on the county treasurer for money required to operate the district in accordance with the budget and, as so drawn, the warrants 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 money 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 and 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

Sec. 14. Approved petitions for fire district formation; reimbursement

Notwithstanding section 48-851, subsection A, paragraph 7, Arizona Revised Statutes, as amended by this act, for any petition approved for circulation by the county board of supervisors before the effective date of this act, an organizing board may lawfully reimburse third parties for agreed-upon services relating to the formation of the district that may include reimbursement of expenses of not more than fifteen dollars per parcel.

Sec. 15. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.