|
|
ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: COM DPA/SE 8-1-1-1 |Third Read 32-21-6-0-1Senate: FIN DPA 6-1-0-0 | Third Read 21-6-3-0-0 |
HB
2999: municipal improvement districts; technical correction
NOW: infrastructure finance districts
Sponsor: Representative Weninger, LD 13
Senate Engrossed
Overview
Enables the formation of a State Affordability Infrastructure District (District).
History
A municipality and a county are authorized to assess development fees to offset costs associated with providing necessary public services to a development, including the costs of infrastructure, improvements, real property, engineering and architectural services, financing and professional services required for the preparation or revision of a development, including the relevant portion of the infrastructure improvements plan (A.R.S. §§ 9-463.05, 11-1102).
Special taxing districts are usually created to fill a need and to enable the provision of services in an area that might otherwise be limited from receiving those services for various reasons, including size, location, financial limitations or unavailability of other government support. The formation of a special taxing district creates a funding stream to pay for the desired or needed services by placing the responsibility on those who benefit from that service.
Title 48 of the Arizona Revised Statutes currently allows and outlines the process for the formation of various types of special taxing districts including fire districts, irrigation districts, hospital districts, pest abatement districts and power districts. Although the specific process depends on the type of district created, the formation in many cases requires the submission of petitions to the county board of supervisors followed by a public hearing. Sometimes an election may be required to form a district.
Provisions
State Affordability Infrastructure Districts
2. Outlines requirements for the location of the District which may include contiguous or noncontiguous property. (Sec. 5)
3. Details the contents of the petition. (Sec. 5)
4. Specifies any financial burden of a District and any liability, judgment or claim against a District is the sole responsibility of the District. (Sec. 5)
5. Provides requirements for providing written notice of the filing of the petition and rejecting the petition by the Authority. (Sec. 5)
6. Requires certifications, determinations, approvals, findings and actions be made by the executive director and deems executive director actions as an action of the Authority. (Sec. 5)
District Formation
7. Declares a District is formed only on the issuance of a formation order by the Authority. (Sec. 5)
8. Instructs the Authority to review the petition for evaluation against specified standards. (Sec. 5)
9. Instructs the Authority to approve the formation of the District and issue a formation order if specified requirements occurred and the petition meets statutory requirements. (Sec. 5)
10. Outlines the contents of the formation order. (Sec. 5)
11. Limits the Authority's review to confirming that the statutory requirements are satisfied and provides specified factors for petition rejection. (Sec. 5)
12. Provides requirements relating to failure to issue the formation order within 60 days after submission of a complete petition and recording the formation order in the county's real property records. (Sec. 5)
13. Declares the District is a special purpose district, a tax levying public improvement district and a municipal corporation in accordance with constitutional and statutory provisions. (Sec. 5)
14. Instructs the District's board of directors to implement the general plan for the public infrastructure of the District. (Sec. 5)
15. Prescribes limitation and requirements relating to fees and other charges assessed by the Authority in connection with the District. (Sec. 5)
16. Authorizes the owners of at least 50% of the land in the District to petition the Authority to amend the formation order to modify the powers or financial parameters of the District. (Sec. 5)
17. Provides requirements relating to the petition to amend the formation. (Sec. 5)
18. Declares the Authority's issuance of a formation order is a governmental determination of statewide financial compliance and does not constitute zoning, planning or land-use approval. (Sec. 5)
19. Asserts any action of the Authority or the Executive Director is the exercise of an administrative function involving the determination of fundamental governmental policy. (Sec. 5)
District Governance and Powers
20. Requires the District to be governed by a board of directors (board) consisting of three directors. (Sec. 5)
21. Prescribes the qualifications, terms, responsibilities and vacancies requirements of the board. (Sec. 5)
22. Outlines the records that must be kept and open to public inspection by the board. (Sec. 5)
23. Delineates the powers of the District. (Sec. 5)
24. Prohibits a District from exercising land use or zoning authority and adopting or enforcing zoning ordinances or similar land use regulations. (Sec. 5)
25. Asserts public infrastructure other than personalty may be located only in or on lands owned by this State, a county, a municipality or the district or dedicated or otherwise designated as public roadways, highways, streets, thoroughfares, easements or rights-of-way, whether in or out of the district or a municipality. (Sec. 5)
26. Outlines information that may be included in an agreement between landowners and a local government for the collection of fees and charges from landowners for public infrastructure purposes. (Sec. 5)
27. Declares a person does not have authority to compel the issuance or sale of the bonds of the District or the exercise of any taxing power of the District to make repayment under any agreement. (Sec. 5)
District Revenue
28. Specifies the projects to be constructed or acquired as shown in the general plan may be financed from the following sources of revenue:
a. proceeds received from the sale of bonds of the district;
b. monies of a municipality or Indian tribe or community that are contributed to the district;
c. assessments;
d. ad valorem taxes;
e. private contributions;
f. user, landowner and other fees and charges;
g. proceeds of loans or advances; and
h. any other monies available to the district by law. (Sec. 5)
Infrastructure Finance Districts Project Approval
29. Instructs and outlines the requirements for the board to conduct a study of the feasibility and benefits of the project prior to constructing or acquiring any public infrastructure. (Sec. 5)
30. Directs the board to provide outlined information, in addition to the study, to the Authority. (Sec. 5)
31. Requires the Authority to review the information to confirm that all information required has been submitted and that the construction or acquisition of the public infrastructure complies with the formation order and the general plan and does not otherwise violate District provisions. (Sec. 5)
32. Instructs the Authority to notify the District if the submitted information is incomplete or has not been submitted or if the submitted information indicates that the construction or acquisition of the public infrastructure does not comply with the formation order or the general plan or does not otherwise comply with District provisions. (Sec. 5)
33. Prohibits the board from holding the required public hearing until 30 days has elapsed since the submission of the information and the District has not received from the Authority the prescribed notice. (Sec. 5)
34. Limits fees and other charges assessed in connection with the review of the submitted information to $15,000 per submission. (Sec. 5)
35. Specifies fees and other charges assessed in connection with the review are in addition to the fees and other charges associated with the submission and consideration of an application and petition to form a district. (Sec. 5)
Infrastructure Finance Districts Tax
36. Prescribes the limitation regarding the total aggregate outstanding amount of bonds and the ad valorem tax rate levied to pay the debt service on all general obligation bonds. (Sec. 5)
37. Provides for criteria to determine the maximum authorized tax rate of which the ad valorem tax rate cannot exceed. (Sec. 5)
38. Authorizes the board to call a general obligation bond election for providing monies for any public infrastructure purposes consistent with the general plan. (Sec. 5)
39. Prescribes requirements for bond issuance and bond refunds. (Sec. 5)
40. Specifies all bonds are secured by a lien on all revenues received in accordance with the ad valorem tax levy and provides stipulations for the lien. (Sec. 5)
Infrastructure Finance Districts Assessment
41. Authorizes the board to levy an assessment of the costs of any public infrastructure purpose or any operation and maintenance of public infrastructure on any land in the District that is based on the benefit determined by the board to be received by the land. (Sec. 5)
42. Outlines requirements for issuing assessment bonds. (Sec. 5)
43. Allows the board to issue and sell assessment bonds, after the adoption of a resolution levying an assessment on property in the District. (Sec. 5)
44. Provides requirements for collection of the assessment and delinquent assessments by the county treasurer. (Sec. 5)
45. Allows the District to issue and sell refunding bonds to refund any assessment bonds of the District. (Sec. 5)
Infrastructure Finance Districts Revenue Bonds
46. Authorizes the board to issue revenue bonds to provide monies for any infrastructure purposes consistent with the general plan. (Sec. 5)
47. Requires the District to prescribe fees and charges to generate revenue sufficient to pay when due the principal and interest of all revenue bonds for the payment of which revenue has been pledged, which are to be identified with the annual budget process of the district. (Sec. 5)
48. Outlines restrictions and limitations for revenue bonds. (Sec. 5)
49. Allows the District to issue and sell refunding bonds to refund any revenue bonds of the District. (Sec. 5)
50. Prescribes requirements for the term, denomination, interest rates, selling of bonds and use. (Sec. 5)
Infrastructure Finance Districts O/M Tax
51. Allows the board to call an election to authorize the board to levy an O/M tax on the net limited assessed property valuation of property in the District. (Sec. 5)
52. Outlines the requirements for levying the O/M tax, including the tax rate. (Sec. 5)
53. Specifies the conditions under which the board may reduce the O/M tax and when levying an O/M tax is prohibited. (Sec. 5)
Infrastructure Finance Districts Budgets
54. Instructs the treasurer to prepare a proposed budget for the ensuing fiscal year to be submitted to the board for approval. (Sec. 5)
55. Requires the board to indicate its approval of the budget by resolution, which shall provide for a hearing on the budget as approved. (Sec. 5)
56. Allows entities to review and submit comments for its assistance and information in adopting the annual budget. (Sec. 5)
57. Requires the board to adopt a budget before October 1 each year. (Sec. 5)
District Dissolution
58. Requires a District that does not have any outstanding bonds or other obligations to be dissolved 10 years after the date of formation, unless the Authority by resolution extends the District by an additional period of 10 years. (Sec. 5)
59. Outlines the conditions for the board to dissolve a District. (Sec. 5)
60. Requires a District to be dissolved automatically and without any action from the board or the qualified electors five years after the completion of the work of the general plan, as long as the authority has verified that no bonds or obligations remain outstanding. (Sec. 5)
61. Stipulates the District must be dissolved in the year after the bonds or obligations are paid in full if any bonds or obligations remain outstanding. (Sec. 5)
62. Requires the Authority to approve the dissolution provided the outlined conditions are met. (Sec. 5)
63. Subjects all property in the District to the lien for payment of ad valorem taxes levied and to an assessment lien. (Sec. 5)
64. Includes additional conditions for dissolution relating to outstanding bonds. (Sec. 5)
Municipality and County Involvement
65. Includes requirements relating to:
a. zoning and land use authority; and
b. financing, constructing or acquiring public infrastructure. (Sec. 5)
66. Specifies District requirements and regulations do not authorize the District to pledge the full faith and credit, or the taxing power of a municipality or county and any bonds or other obligations of a district are obligations only of the district and are payable only from the sources that are pledged for their payment. (Sec. 5)
Miscellaneous
67. Includes a community facilities district or a state affordability infrastructure district within certain development fee requirements relating to credits toward the payment of a development fee and determining and assessing a development fee applicable to land in the district. (Sec. 1, 4)
68. Requires monies collected from the state affordability infrastructure district special assessment fee and the count treasurer's fee for expenses relating to the collection of the special assessment be deposited in the Taxpayers' Information Fund. (Sec. 2, 3)
69. Prescribes District requirements relating to:
a. displaying ad valorem tax or assessment tax on each property tax bill;
b. notice and conducting any election;
c. recording documents with the county recorder;
d. establishing and maintaining an official website;
e. annual reporting;
f. seller disclosures;
g. changes in District boundaries or general plan; and
h. district improvements. (Sec. 5)
70. Defines pertinent terms. (Sec. 5)
71. Cites this act as the State Affordability Infrastructure District Act. (Sec. 7)
72. Contains a legislative findings clause. (Sec. 6)
73. Makes technical and conforming changes. (Sec. 1, 3, 4)
Senate Amendments
1. Modifies the definitions of maximum authorized tax rate and public infrastructure.
2. Modifies the contents of the petition to form a state affordability infrastructure district.
3. Includes the statutes governing state affordability infrastructure districts do not impose any additional regulation or requirements on or alter the service territory, including certificates of convenience and necessity, of any county, irrigation district, electrical district, agricultural improvement district, municipality or public service corporation.
4. Specifies the Authority may not assess a fee for considering a similar petition that is submitted within 90 days, rather than 1 year.
5. Classifies public infrastructure construction contracts as a private construction contract between an owner and the contractor for the purposes of prompt pay.
6. Grants mechanics' and materialmen's lien rights to any person furnishing labor, professional services, materials, machinery, fixtures or tools to public infrastructure and subjects contracts to statute governing such liens.
7. Adds that a construction contract for public infrastructure must include certain provisions relating to financial assurances.
8. Includes, within the information required to be provided by the Board to the authority, a certification that the ad valorem tax rate levied to pay the debt service on general obligation bonds of the district in the current and immediately preceding fiscal year is not in excess of the maximum authorized tax rate.
9. Increases, from $15,000 to $30,000, the fees associated with the Authority's review of the additional information in connection with the feasibility study.
10. Sets the maximum authorized tax rate at $5 per $100 of net assessed limited property valuation of property within the boundaries of the district.
11. Stipulates that, if the maximum authorized tax rate together with monies from other authorized sources is insufficient to pay debt service on general obligation bonds in the fiscal year, the district must levy additional secondary property taxes necessary to pay the debt service when due, up to a maximum of $7.50 per $100 of net assessed limited property valuation.
12. Prohibits the Board from approving bond issuance other than refunding bonds if the ad valorem tax rate levied to pay the debt service on general obligation bonds in the current or immediately preceding fiscal year is in excess of the maximum authorized tax rate.
13. Prohibits the Authority from issuing a formation order for a District after June 30, 2036.
14. Ensures, for Districts formed by June 30, 2036:
a. the continued existence, powers or operations remain unaffected by the new formation deadline, and
b. the validity or enforceability of any bonds or obligations or revenue pledges to secure the bonds or obligations are not impaired.
15. Makes technical and clarifying changes.
---------- DOCUMENT FOOTER ---------
Initials PB/ZE HB 2999
4/01/2026 Page 0 Senate Engrossed
---------- DOCUMENT FOOTER ---------