ARIZONA HOUSE OF REPRESENTATIVES

57th Legislature, 2nd Regular Session

Majority Research Staff

HB 2496: revitalization districts; construction contracts

Sponsor: Representative Way, LD 15

Committee on Commerce

Overview

Delineates requirements for contracts entered into by a revitalization district.

History

The governing body of one or more municipalities may adopt a resolution declaring its intention to form a tax levying revitalization district to include property within the corporate boundaries of the district, if the public convenience and necessity require and on presentation of a petition signed by the owners of at least 51% of the net assessed property value proposed to be included in the district and a petition signed by at least 51% of the property owners in the area proposed to be included in the district. The resolution must include a general plan for the district which sets out a description of the improvements for which the district is proposed to be formed and the areas to be improved.

To further the implementation of the general plan, a revitalization district may enter into contracts and spend monies for any infrastructure purposes and enter into agreements with landowners and the municipality for the collection of fees and charges from landowners for infrastructure purposes, the advance of monies by landowners for infrastructure purposes or the granting of real property by the landowner for infrastructure purposes. An agreement between a landowner and a revitalization district may include agreements to repay all or part of such advances, fees and charges from the proceeds of bonds if issued or from advances, fees and charges collected from other landowners or users or those having a right to use any infrastructure. Public infrastructure, other than movable property, may be located only in or on lands owned by the state, the revitalization district or a municipality or county or dedicated or otherwise designated as public roadways, highways, streets, thoroughfares, easements or rights-of-way, whether in or out of the district or municipality.

A revitalization district has perpetual succession and, if the district does not have bonds or other outstanding obligations, must be dissolved 10 years after the date of formation unless the governing bodies extend the district by resolution for another 10 years. The governing body by resolution may order the participation in the costs of any public infrastructure purpose, including the payment of bond debt service (Title 48, Chapter 39, Article 1, A.R.S.).

Provisions

1. Declares any construction contract a revitalization district enters into must provide for:

a. allowing a contractor to suspend performance or terminate a construction contract for failure by the district to make timely payment of amounts certified and approved for payment;

b. allowing a subcontractor to suspend performance or terminate a contract with a general contractor or subcontractor for a district if specified conditions are met;

c. allowing a subcontractor to suspend performance or terminate if the district makes timely payment of certified and approved amounts for the subcontractor's work but the contractor fails to pay the subcontractor;

d. allowing a subcontractor to suspend performance or terminate if the district declines to approve and certify portions of the contractor's billing for the subcontractor's work for reasons that are not the fault of or directly related to that subcontractor's work;

e. allowing a contractor or subcontractor that suspends performance to cease furnishing further labor, materials or services until being paid the amount that was certified and approved;

f. requiring the award of reasonable attorney fees and costs to the successful party in any action or arbitration; and

g. requiring that any written notice is deemed provided upon specified occurrences. (Sec. 1)

2. Provides a time frame for providing written notice relating to intention of suspension or termination of a contraction contract. (Sec. 1)

3. Adds that a contractor or subtractor is not in breach of the construction contract for suspending performance or terminating the contract. (Sec. 1)

4. Apples the construction contract requirements prospectively. (Sec. 2)

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8. Initials PB HB 2496

9. 2/5/2026 Page 0 Commerce

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