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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
employers;
medical products; religious exemption
(NOW: municipal improvement districts; petitions)
As passed by the Senate, S.B. 1016 expanded the employer COVID-19 vaccine religious exemption to apply to any medical product and prohibited an employer from inquiring into the veracity of an employee's religious beliefs or discriminating against an employee based on the employee's refusal to take a medical product.
The House of Representatives adopted a strike everything amendment that does the following:
Purpose
Expedites the process for the formation of a municipal improvement district (district) when the petition is signed by the owners of all the real property in the proposed district. Requires a petition to be signed by more than one half of the property owners in a district before a governing body may pass a resolution or ordinance to make an improvement. Allows, from January 1, 2027, through January 1, 2030, a political subdivision with more than one district formed for the purpose of providing lighting for public streets or parks, to consolidate existing lighting districts into a single district by resolution.
Background
Before ordering an improvement in accordance with a district, the governing body of a municipality must pass an authorizing resolution or ordinance that briefly describes the improvement. By resolution or ordinance and the subsequent proceedings, one or more improvements may be made on one or more streets constituting one improvement and be constructed under one or more contracts. The resolution or ordinance of intention may be combined in a single resolution or ordinance of intention to open, extend, widen, straighten or close public streets or off-street parking areas in accordance with statutory procedures. If the work proposed is already done for a lot, the lot must be excepted from the assessment to the extent of the work done.
If the governing body determines that the district should be formed after the final resolution of any protests made in accordance with statutory procedures, the governing body must submit, within 120 days to the city or town clerk, a petition to form the district that is signed by owners of more than one-half of the taxable property units within the area of the proposed district and that is signed by persons owning collectively more than one-half of the assessed valuation of the property within the area of the proposed district. Property that is exempt from property tax is not considered in determining the total assessed valuation of the proposed district and owners of property that is not subject to taxation are not eligible to sign the petition. On verification of petition signatures, the governing body may form the improvement district and order the improvement as provided by law (A.R.S. § 48-576).
If it is the opinion of the governing body that a territory adjacent to a district would benefit from being a part of the district, the governing body, by resolution, may include the territory in the district formed if: 1) improvements that meet the standards and specifications established by the governing body have been constructed in the territory and will be used for the purposes of the district; 2) any required public dedications of property have been made or will be made before the inclusion of the territory in the district; 3) including the territory in the district will not adversely affect the district; 4) notice of the proposed inclusion of the territory in the district has been published in five consecutive issues of a daily newspaper or two consecutive issues of a weekly or semiweekly newspaper of general circulation published in the municipality and a public hearing has been held to consider the inclusion of the territory in the district; and 5) notice has been sent by first class mail at least 10 days prior to the hearing with an accurate map of the territory proposed for inclusion to each property owner within the district and in the proposed area of inclusion (A.R.S. § 48-574).
Statute allows the governing body of a municipality to establish improvement districts for the sole purpose of purchasing and not generating energy to light public streets and parks of the district, commonly referred to as a SLID. The governing body must produce an annual estimate of the SLID expenses that will be provided for by the levy and collection of taxes on the assessed value of the real and personal property in the SLID or by an equal apportionment of taxes based on the number and classification of properties within the SLID. A municipality may, by ordinance or resolution, consolidate existing SLIDs. Property owners within the SLID proposed to be consolidated must submit a petition to the municipality. The governing body of the municipality must publish a hearing notice in a newspaper of general circulation in the municipality in which the affected SLIDs are located and the municipality must follow outlined requirements at the public hearing at which interested persons can appear and give comment (A.R.S. § 48-616).
The Joint Legislative Budget Committee fiscal note for S.B. 1016 estimates that the bill may marginally reduce municipal costs for developing proposals relating to a district, however the costs cannot be estimated in advance (JLBC Fiscal Note).
Provisions
1. Stipulates that, if the petition is signed by the owners of all the real property in the proposed district and is approved by the governing body, then the municipality and owners may enter into a written agreement waiving any or all requirements relating to posting, publication, mailing, notice, frontage owner written requirements and directions and protest and objection.
2. Allows, on receipt of the petition signed by the owners of all the real property in the proposed district, the governing body to adopt a resolution or ordinance of intention to order the improvement, to have immediate jurisdiction to adopt the resolution ordering the improvement and combine the resolutions into one resolution.
3. Requires the petition signed by the owners of all the real property in the proposed district to set forth:
a) the name of the proposed district;
b) the necessity for the proposed district;
c) that the public convenience, necessity or welfare will be promoted by establishing the district and that the property to be included in the district will be benefited;
d) a legal description of the boundaries of the proposed district and a map that shows generally the location of the proposed district;
e) a general description of the proposed improvement;
f) a maximum amount of the assessment;
g) that the petitioners consent to the assessment, except that an assessment will not be levied without the governing body's compliance with the statutory requirements relating to district assessments;
h) the assessor's parcel number for each lot to be included in the proposed district with each petition signer indicating that the applicable assessor's parcel number corresponds to the lot owned by the signer; and
i) any other matters pursuant to the statutory petition requirements.
4. Requires a governing body, before passing a resolution or ordinance of an intention to make an improvement, to receive a petition that is filed with the clerk and signed by the owners of real property in the proposed improvement district as follows:
a) for districts for operation, maintenance, repair and improvement of pedestrian malls, off-street parking facilities, retention and detention basins and parking and parkways, the petition must be signed by:
i. a majority of the persons owning taxable property within the area of the proposed improvement district; and
ii. the owners of 51 percent or more of the assessed valuation of the property within the area of the proposed district.
b) for districts other than a district for operation, maintenance, repair and improvement of pedestrian malls, off-street parking facilities, retention and detention basins and parking and parkways, the petition must be signed by:
i. a majority of the persons owning real property within the area of the proposed district; and
ii. the owners of 51 percent or more of the real property, determined by acreage, within the area of the district, excluding public property and a public right-of-way.
5. Adds that a resolution or ordinance for a governing body making an improvement must include an estimate of the assessment.
6. Prohibits the assessment estimate from exceeding the maximum assessment amount that is included in the petition to order improvement.
7. Allows the governing body and other persons to rely on the taxable property units as determined by the county assessor as of the date of the petition to determine a majority of the persons owning taxable property and a majority of the persons owning real property within the area of the proposed district.
8. Prohibits the determination of a majority of persons owning taxable property within the district from including property that is exempt from property tax.
9. Requires the determination of a majority of persons owning real property within the district to include property that is exempt from property tax and exclude the owners of public property or a public right-of-way.
10. Allows public property to be included within the proposed district subject to the declaration of the governing body in the resolution or ordinance of intention.
11. Specifies that petition requirements for a district do not apply to a community facilities district issuing a special assessment bond.
12. Specifies, for petitions for an improvement district for operation, maintenance, repair and improvement of pedestrian malls, off-street parking facilities, retention and detention basins and parking and parkways, property that is exempt from property tax is not considered in determining the total assessed valuation of the proposed district and the owners are not eligible to sign the petition.
13. Allows the governing body to adopt a resolution to add a territory adjacent to a district that would benefit from being a part of the district without requiring a petition to be filed as prescribed by statute.
14. Prohibits, for districts formed for enhanced municipal services after the general effective date, the governing body from ordering an improvement for enhanced municipal services until after the governing body has received a petition as prescribed by statute.
SLIDs
15. Allows from January 1, 2027, through January 1, 2030, and notwithstanding current consolidation requirements, a political subdivision with more than one SLID to consolidate existing SLIDs into a single SLID by resolution.
16. Requires a political subdivision to provide a 60-day notice to all real property owners in the SLIDs that are proposed for consolidation and to provide for receiving public comments.
17. Requires the 60-day notice to include:
a) the geographic areas of the SLIDs proposed for consolidation;
b) the date that the proposed consolidation would take effect if the resolution to consolidate is adopted;
c) a notice that the SLID tax rate may increase or decrease depending on the outcome of the consolidation;
d) the new estimated tax rate for the consolidated SLID; and
e) the time and location for public comment on the proposed consolidation.
18. Requires, on approval of the resolution to consolidate the SLIDs, the governing body of the political subdivision to submit a copy of its resolution to the county recorder for recording.
19. Specifies that any SLID established beginning January 1, 2027, through January 1, 2030, is eligible for the modified consolidation process.
Miscellaneous
20. Adds on-street parking to the definition of street.
21. Makes technical and conforming changes.
22. Becomes effective on the general effective date.
Amendments Adopted by the House of Representatives
· Adopted the strike-everything amendment relating to municipal improvement districts.
House Action
COM 3/26/26 W/D
RED 3/26/26 DPA/SE 5-0-1-1
3rd Read 6/11/26 47-8-5
Prepared by Senate Research
June 11, 2026
AN/ci