SB1480 - 531R

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

Section 1. Section 48-701, Arizona Revised Statutes, is amended to read:

START_STATUTE48-701. Definitions

In this article, unless the context otherwise requires:

1. "Clerk" includes any person or official who performs the duties of clerk of the municipality or county or any person appointed by the district board to be the district clerk pursuant to section 48‑711, subsection D.

2. "County" means a county that forms a community facilities district pursuant to this article in an unincorporated area or in an incorporated area with the municipality's consent.

3. "Debt service" means the principal of, interest on and premium, if any, on the bonds, when due, whether at maturity or prior redemption and fees and costs of registrars, trustees, paying agents or other agents necessary to handle the bonds and the costs of credit enhancement or liquidity support.

4. "District" means a tax levying community facilities district formed pursuant to this article by a municipality or formed pursuant to this article by a county in an unincorporated area or in an incorporated area with the municipality's consent.

5. "District board" means the board of directors of the district. , which shall be comprised of the members of the governing body of the municipality or county, ex officio, or, at the option of the governing body, five directors appointed by the governing body under this article.

6. "Enhanced municipal services" means public service provided by a county or municipality within the district at a higher level or to a greater degree than provided in the remainder of the county or municipality, including such services as public safety, fire protection, street or sidewalk cleaning or landscape maintenance in public areas.

7. "Entity" means any of the following:

(a) A corporation.

(b) A general partnership, including a general partnership that is registered as a limited liability partnership.

(d) A limited liability company, including a professional limited liability company.

(e) A business trust, statutory trust entity or similar trust.

(f) An unincorporated association.

(g) A cooperative.

(h) Any other person that has a separate legal existence or has the power to acquire an interest in real property in its own name other than any of the following:

(i) An individual.

(ii) A testamentary, inter vivos or charitable trust, with the exception of a business trust, statutory trust entity or similar trust.

(iii) A decedent's estate.

(iv) A government, a governmental or political subdivision, a governmental agency or entity or a municipal corporation.

7. 8. "General obligation bond" means a bond that is issued pursuant to section 48‑719 and that is secured by a pledge of ad valorem taxes levied by the district.

8. 9. "General plan" means the general plan described in section 48‑702, subsection B D, as the plan may be amended.

9. 10. "Governing body" means the body or board which that by law is constituted as the legislative department of the municipality or county.

10. 11. "Municipality" means an incorporated city or town.

11. 12. "Owner" means the person who or entity that, on the day the action, election or proceeding is begun or held, appears to be the owner of real property as shown on the property tax assessment roll.

12. 13. "Public infrastructure" means all improvements listed in this paragraph that will result in a beneficial use principally to land within the geographical limits of the district and may include a district's share of any improvements listed in this paragraph if the district board determines such share is proportionate to the beneficial use of such improvements to land within the geographical limits of the district, improvements within or outside the geographical limits of the district, necessary or incidental work, whether newly constructed, renovated or existing, and all necessary or desirable appurtenances. For the purposes of this paragraph, adoption by the district board of a resolution of intent pursuant to section 48‑715 shall conclusively establish that the improvements or, if applicable, share of the improvements that are the subject of the resolution will result in a beneficial use principally to land within the geographical limits of the district. Public infrastructure improvements are:

(a) Sanitary sewage systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge.

(b) Drainage and flood control systems, including collection, transport, diversion, storage, detention, retention, dispersal, use and discharge.

(c) Water systems for domestic, industrial, irrigation, municipal or fire protection purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal, but not including facilities for agricultural irrigation purposes unless for the repair or replacement of existing facilities when required by other improvements permitted by this article.

(d) Highways, streets, roadways and parking facilities, including all areas for vehicular use for travel, ingress, egress and parking.

(e) Areas for pedestrian, equestrian, bicycle or other nonmotor vehicle use for travel, ingress, egress and parking.

(f) Pedestrian malls, parks, recreational facilities other than stadiums, and open space areas for the use of members of the public for entertainment, assembly and recreation.

(g) Landscaping, including earthworks, structures, lakes and other water features, plants, trees and related water delivery systems.

(h) Public buildings, public safety facilities and fire protection facilities.

(i) Lighting systems.

(j) Traffic control systems and devices, including signals, controls, markings and signage.

(k) Equipment, vehicles, furnishings and other personalty related to the items listed in this paragraph.

13. 14. "Public infrastructure purpose" means:

(a) Planning, design, engineering, construction, acquisition or installation of public infrastructure.

(b) Acquiring, converting, renovating or improving existing facilities for public infrastructure.

(d) Establishing, maintaining and replenishing reserves from any source described in section 48‑717 or from any other source in order to secure payment of debt service on bonds.

(e) Notwithstanding section 48‑589, funding and paying from bond proceeds interest accruing on bonds for a period of not to exceed three years from their date of issuance.

(f) Providing for the timely payment of debt service on bonds or other indebtedness of the district.

(g) Refinancing any matured or unmatured bonds with new bonds.

(h) Incurring expenses of the district incident to and reasonably necessary to carry out the purposes specified in this paragraph.

14. 15. "Revenue bonds" means those bonds that are issued pursuant to section 48‑720 and that are secured by a pledge of revenues of the district or revenues collected by the county or municipality and returned to the district.

15. 16. "Treasurer" includes any person or official who performs the duties of treasurer of the municipality or county or any person appointed by the district board as the district treasurer pursuant to section 48‑711, subsection D. END_STATUTE

Sec. 2. Section 48-702, Arizona Revised Statutes, is amended to read:

START_STATUTE48-702. Resolution declaring intention to form district

A. If the public convenience and necessity require, and on presentation of a petition signed by the owners of at least twenty‑five per cent percent of the land area proposed to be included in the district, the governing body may adopt a resolution declaring its intention to form a community facilities district to that shall include contiguous or noncontiguous property which shall be that is wholly within the corporate boundaries of the municipality or county.

B. On presentation of a petition signed by the owners of at least twenty‑five percent of the land area proposed to be included in the district and a completed application for formation of a district by an individual or entity, the governing body of a municipality or county within sixty days after submission of the completed application shall hold a public hearing to consider the application for formation of the district. Immediately after completion of the hearing, the governing body may adopt a resolution declaring its intention to form a community facilities district that shall include contiguous or noncontiguous property that is wholly within the corporate boundaries of the municipality or county. If the governing body does not adopt a resolution declaring its intention to form a district, the governing body shall provide a written basis for not adopting the resolution and shall identify the specific changes needed for the application to be approved. This subsection does not create a presumption of district formation.

C. The resolution adopted by the governing body shall state the following:

1. The area or areas to be included in the district.

2. The purposes for which the district is to be formed.

3. That a general plan for the district is on file with the clerk.

4. The date, time and place of the hearing to be held on the formation of the district.

5. The place where written objections to the formation of the district may be filed.

6. That formation of the district may result in the levy of taxes to pay the costs of improvements constructed by the district and for their operation and maintenance.

7. A reference to this article.

8. Whether the district will be governed by a district board comprised that consists of the members of the governing body, ex officio, with two additional members who are designated by the owner who owns the largest amount of privately owned acreage in the proposed district and who are appointed by the governing body, or, at the option of the governing body and if the total area to be included in the district is larger than six hundred acres, five directors appointed by the governing body. The applicant for formation of the district shall provide in the application a process for the designation of the two additional district board members, if applicable, on completion of the development of all of the property in the district.

B. Before adopting a resolution under this section, a general plan for the district shall be filed with the clerk setting out a general description of the public infrastructure improvements for which the district is proposed to be formed and the general areas to be improved.

D. A completed application shall include at least the following information:

1. A petition signed by the owners of at least twenty-five percent of the land to be included in the district.

2. A description of the applicant, including the corporate and organizational structure of the entity or individual making the application, the names of all officers and corporate directors directly related to or associated with the proposed district, the name, address and telephone number of the primary contact for the applicant, the names of any legal representatives, engineers, architects, financial consultants or other consultants significantly involved in the application and a general description of the applicant's experience with similar types of developments.

3. A general plan setting out a general description of the public infrastructure for which the district is proposed to be formed, the general areas to be improved and the estimated costs of construction or acquisition of the public infrastructure to be financed, constructed or acquired by the district.

4. A preliminary financing plan that includes the sources and uses of monies for the public improvements.

E. In reviewing an application for formation of a district in a county, the governing body of the county may consider the district's proximity to a city or town, its inclusion in a metropolitan planning area or county growth area, the availability and capacity of utilities and public infrastructure, including the transportation network, law enforcement services, current levels of other public services and the terms of existing zoning, development agreements and capital IMPROVEMENT plans. END_STATUTE

Sec. 3. Section 48-704, Arizona Revised Statutes, is amended to read:

START_STATUTE48-704. Hearing on objections

A. Within thirty days after adoption of the resolution of intent to form a district, any person claiming an interest in real property which that the resolution discloses is situated in the district may file a written objection with the clerk before 5:00 p.m. on the business day preceding the date and time set for the hearing on the question of formation of the district. The objection may raise one or more of the following:

1. That the objector's property would not be benefited from the improvements set forth in the general plan and that the property should be excluded from the district.

2. That the district should not be formed, stating the specific reasons.

3. That the general plan should be modified, stating the reasons for modification.

B. At the hearing, including any adjournments or continuances, the governing body shall hear and pass only on the written objections and the testimony and evidence presented in support of or opposition to the objections. The hearing shall be either transcribed by a court reporter or recorded by a tape recorder. The court reporter's transcript or a transcription of the tape recording certified to be true and correct by the clerk shall be filed in the official records of the governing body.

C. In furtherance of the hearing, the clerk, on written request or praecipe being presented, shall issue subpoenas or subpoenas duces tecum to compel the attendance and testimony of any person or the submission of any documents at the hearing. Compliance with the subpoena shall be enforced as if the subpoena were issued by a clerk of the superior court.

D. Testimony at the hearing need not be under oath, unless requested by any owner or required by the governing board. Requests by owners that the testimony be under oath must be made in writing and be filed with, or served on, the clerk before the hearing begins or the request is deemed waived.

E. The minutes or a copy of a written transcript or a tape recording of the proceedings of a hearing conducted pursuant to this section shall be open to public inspection three working days after the conclusion of a hearing. Any person may request to examine or be furnished copies, printouts, photographs, transcripts or recordings of a hearing during regular office hours of the governing body. The custodian of the records shall furnish the copies, printouts, photographs, transcripts or recordings and may charge a reasonable fee which that does not exceed the actual cost of reproducing the item requested. END_STATUTE

Sec. 4. Section 48-708, Arizona Revised Statutes, is amended to read:

START_STATUTE48-708. Formation; debt limitation; disclosure

A. If the formation of the district is approved by a majority of the votes cast at the election, the governing body shall order the formation, appoint the initial directors of the district board if the district will be governed by an appointed board, set the district boundaries and order that a map showing the district boundaries be drawn and a copy of the order forming the district be delivered to the county assessor and the board of supervisors of the county in which the district is located and to the department of revenue. A notice of the formation showing the number and date of the order and giving a description of the land included in the district shall be recorded with the county recorder.

B. On its formation, the district is a special purpose district for purposes of article IX, section 19, Constitution of Arizona, a tax levying public improvement district for the purposes of article XIII, section 7, Constitution of Arizona, and a municipal corporation for all purposes of title 35, chapter 3, articles 3, 3.1, 3.2, 4 and 5. A district that distributes or sells groundwater is a private water company only for purposes of title 45, chapters 2 and 3.1. Except as otherwise provided in this section, a district is considered to be a municipal corporation and political subdivision of this state, separate and apart from the municipality or county. Under no circumstances may the amount of indebtedness evidenced by general obligation bonds issued pursuant to section 48‑719 and revenue bonds issued pursuant to section 48‑720 exceed the estimated cost of the public infrastructure improvements plus all costs connected with the public infrastructure purposes and issuance and sale of bonds, including, without limitation, credit enhancement and liquidity support fees and costs. The total aggregate outstanding amount of bonds and any other indebtedness for which the full faith and credit of the district are pledged shall not exceed sixty per cent percent of the aggregate of the estimated market value of the real property and improvements in the district after the public infrastructure of the district is completed plus the value of the public infrastructure owned or to be acquired by the district with the proceeds of the bonds.

C. On formation of the district, the district board shall administer, in a reasonable manner, the implementation of make a good faith effort to implement the general plan for the public infrastructure of the district and any development agreement entered into pursuant to section 9‑500.05 between the governing body and owners of land in the district. The district board shall be considered a party to that agreement.

D. For districts approved after the effective date of this amendment to this section, the district board shall require that a seller of a property in the district who is otherwise required to obtain a subdivision public report as prescribed by section 32‑2183 disclose to a prospective purchaser the existence of the district, the purpose for which the district was formed as set forth in the resolution adopted by the governing body, the estimated tax rate and the estimated annual tax amount that is based on applying that tax rate to a hypothetical residential property value.

D. E. Fees and other charges assessed by a municipality or county in connection with the submission and consideration of an application or petition to form a district, or shall not exceed fifteen thousand dollars. If an application is denied by the governing body, the municipality or county may not assess a fee or other charge in connection with the submission and consideration of a substantially similar application that is submitted within one year following the denial. fees and other charges assessed by a municipality, county or district in connection with the administration of a district, including the issuance and sale of bonds, shall not exceed the estimated actual expense incurred by the municipality, county or district for staff and consultant services and support facilities supplied by the municipality, county or district or the financial, legal and administrative costs of the district that are not reimbursed from proceeds of the bonds or other district revenue. Any fees or other charges paid by the applicant before formation of the district that exceed the actual costs of forming the district shall be used by the municipality or county solely to support the formation or administration of the district, including the issuance and sale of bonds. END_STATUTE

Sec. 5. Section 48-711, Arizona Revised Statutes, is amended to read:

START_STATUTE48-711. Records; board of directors; open meetings

A. The district shall keep the following records which that shall be open to public inspection:

1. Minutes of all meetings of the district board.

2. All resolutions.

3. Accounts showing all monies received and disbursed.

4. The annual budget.

5. All other records required to be maintained by law.

B. If the resolution ordering formation of the district provides that the district will be governed by a district board appointed by the governing body, each appointed director shall serve for a term of six years, except that two directors initially appointed by the governing body in the resolution shall serve for a term of four years. The resolution shall state which directors shall serve four year terms and which shall serve six year terms. On the expiration of the term of an appointed director, the governing body shall appoint a person to fill the position if a vacancy occurs on the district board because of death, resignation or inability of the director to discharge the duties of director, the vacancy shall be filled by appointment made by the governing body. A director appointed by the governing body shall hold office for the remainder of the unexpired term until his that director's successor is appointed. An appointed director shall not be a landowner owning more than forty acres in the district, an elected official of the municipality or county or an employee or agent of the landowner or municipality or county but may be a director of more than one district.

C. The members of the governing body of the municipality or county are not eligible to receive compensation for their services as members of the district board.

C. D. The board of directors shall comply with title 38, chapter 3, article 3.1 as a separate political subdivision, and the members of the board of directors are deemed public officers for the purposes of and shall comply with title 38, chapter 3, article 8.

D. E. The district manager, clerk and district treasurer shall be the manager, clerk of the municipality or county and the treasurer of the municipality or county, respectively, unless the district board appoints a district manager, clerk and district treasurer. END_STATUTE

Sec. 6. Section 48-715, Arizona Revised Statutes, is amended to read:

START_STATUTE48-715. Project approval

Before constructing or acquiring any public infrastructure, the district board shall cause a study of the feasibility and benefits of the project to that shall be prepared by engineers and other qualified persons, which and that shall include a description of the public infrastructure to be constructed or acquired and all other information useful to understand the project, a map showing, in general, the location of the project, an estimate of the cost to construct, acquire, operate and maintain the project, an estimated schedule for completion of the project, a map or description of the area to be benefited by the project, and a plan for financing the project. Within sixty days after receiving the report, the board shall hold a public hearing on the report and provide notice of the hearing by publication not less than ten days in advance in the official newspaper of the municipality or county or, if none in the municipality, a newspaper of general circulation in the county and by mail to the governing body of the municipality. Within sixty days after the hearing, the district board may reject, amend or approve the report. If the report is amended substantially a new hearing shall be held within sixty days after the date the amended report is received and before approval. If the report is approved, the district board shall adopt a resolution of intent which that identifies the public infrastructure of the project, the areas benefited, the expected method of financing, including the nature and timing of the issuance of bonds, if any, and an appropriate system of providing revenues to operate and maintain the project. The district board shall execute the provisions of the report within the time frames identified in the approved report. END_STATUTE

Sec. 7. Title 48, chapter 4, article 6, Arizona Revised Statutes, is amended by adding sections 48-726, 48‑727 and 48‑728, to read:

START_STATUTE48-726. Jurisdictional limitation; organizational documents

The governing body of the jurisdiction in which the district is to be located may not require the petitioner to increase the infrastructure elements, debt limit or duration of the district beyond the levels and limits set out in the petition and the associated documents that are submitted for the formation of the district. END_STATUTE

START_STATUTE48-727. District website; district records database

A. The district board shall establish and maintain an official website that is electronically searchable by the public and that contains a comprehensive database of district contracts, public notices, meeting minutes, resolutions and accounts showing all monies received and disbursed, the annual budget and other records required to be maintained by law.

B. The database may not include:

1. Tax payment or refund data that includes confidential taxpayer information.

2. Work product in anticipation of litigation or other information that is subject to attorney‑client privilege.

3. Any other information that is designated by law as confidential.

C. The district board shall provide a link to the database on the district's main website maintained by the district board and shall provide a link to that database to the department of administration. END_STATUTE

START_STATUTE48-728. Public infrastructure acceptance; bond

A. On completion of a discrete segment of public infrastructure, the individual or entity constructing the discrete segment of public infrastructure may submit a letter of completion to the governing body. Within thirty days after receiving a letter of completion, the governing body, or the governing body's designee, shall conduct an inspection of the discrete segment of public infrastructure and provide the individual or entity with a written list of deficiencies not later than thirty days after initiating the inspection.

B. Within thirty days after submittal of an engineer's certification that a discrete segment of public infrastructure has been constructed according to the plans and specifications required by the governing body and that the deficiencies identified by the governing body or the governing body's designee have been remedied, the governing body shall adopt and accept the discrete segment of public infrastructure for ownership, operation and maintenance.

C. Acceptance of a discrete section of public INFRASTRUCTURE pursuant to this section does not modify the assurances and warranty requirements of a governing body prescribed by a municipal or county code or ordinance or as outlined in a development agreement entered into pursuant to section 9‑500.05 or 11-1101. END_STATUTE