technical correction; nonprofit
NOW: revitalization districts
HB 2003 authorizes the establishment of a special Revitalization District upon petition of a majority of the property owners within a defined area to the city, town or tribal entity.
Title 48, Arizona Revised Statutes (A.R.S.) currently authorizes the formation of 38 different special taxing districts within the State. Initially authorized by the first state Legislature in 1912, the statutory authority for these various special taxing districts were scattered throughout the statutes based on subject area. Laws 1985, Chapter 190 created the Arizona Special Taxing District Statutes and transferred all related materials to Title 48 for conformity and to facilitate access for reference.
Usually created to fill the need for services in an area that might be limited for various reasons, including size, location or financial limitations, the formation of a special taxing district establishes a dedicated funding stream to pay for the necessary services by placing responsibility on those benefiting from the services. This strike-everything amendment authorizes the creation of a new category of special taxing district entitled Revitalization District.
Establishment of Special Revitalization District
· Authorizes the establishment of a special Revitalization District in a county with a population greater than 2 million persons, if required for the public convenience and necessity and upon petition of owners of 51% of the net assessed value of affected land owners. Specific requirements include:
Ų Formation may be by a single city, joint action of two or more cities, or by a city and Indian Tribe or community.
Ų Adoption of a Resolution by the affected city/Indian Tribe declaring the intention to form a District to include contiguous property.
Ų Outlines specific information and requirements for the Resolution.
Ų Governs by a District Board and outlines membership depending on the formation.
· Requires a General Plan to be filed with the appropriate city clerk that outlines the general description of the proposed area and improvements for which the District is formed.
· Outlines the specific public notice and other duties of the city clerk. A copy of the Resolution must be attached to the notice and mailed to each affected property owner and persons having expressed an interest in the formation of the District.
· Directs the city clerk to also publish the information in the official city newspaper, if applicable, or the county newspaper in which the municipality is located. The mailing and newspaper publication must be completed a minimum of 20 days before the date of hearing.
Hearings on Objections
· Permits anyone claiming an interest in real property located in the proposed District to file a written objection with the clerk before 5:00 P.M. the day before the hearing. Objections:
Ų The person's property would not benefit from the improvements and should be excluded.
Ų The District should not be formed and state the specific reasons.
Ų The General Plan should be modified and state the specific reasons.
· Requires the governing body to hear and pass only on the written objections, testimony and evidence presented. Testimony need not be made under oath, except as requested by an owner or required by the governing board. Outlines specific requirements.
· Directs all minutes, copies of transcripts, tape recordings or proceeding be made available to the public three working days after the hearing concludes. Permits a charge for copies not to exceed the actual cost for reproducing the items.
Resolution Forming the District
· After the hearing, permits the appropriate governing body of each entity to adopt a Resolution for: formation of the District; exclusion of any property determined not to benefit by the District; modification of the general plan and then forming the District or not.
· Requires a Resolution to form the District to include the names of the initial board of directors and their terms of office.
· Establishes a process for judicial review where the affected owner or interested person who went through the process of presenting evidence at the hearing and providing testimony must petition for special action with the court of appeals.
· Outlines the process, procedures and timeframes.
Formation of the District
· Upon approval, directs the governing body of each entity to appoint the board of directors, map the District boundaries, notify the county assessor, the appropriate board of supervisors and the department of revenue. Notice of the formation, with number, date of order and land description of the District must be recorded with the appropriate county recorder.
· Stipulates the District is not deemed as officially formed until a Resolution is approved by each affected city, town, Indian Tribe or community.
· Deems the new District a special purpose district, special taxing-levying district and a municipal corporation. The District is considered a municipal corporation and political subdivision of Arizona, separate from the municipality.
· Prohibits the District from exercising eminent domain or enacting zoning ordinances.
· Authorizes the District Board to reasonably implement and administer the General Plan.
Powers of a Revitalization District
· In addition to other powers and authority granted to districts, a Revitalization District may:
Ų Enter into contracts/spend monies for infrastructure. Enter into IGAs to plan/design, for inspection, ownership, maintenance or repair of infrastructure or to enhance municipal services, including an IGA with an Indian Tribe or community.
Ų Sell, lease or otherwise dispose of district property if not a violation of the contract or bond resolution of the District.
Ų Reimburse the municipality for enhanced municipal services within the District.
Ų Operate, maintain and repair infrastructure. Establish, charge and collect user fees for the use of infrastructure or services.
Ų Employ staff, legal counsel and consultants and reimburse the municipality for such.
Ų Accept gifts, grants and incur/repay loans for any infrastructure purpose.
Ų Enter into agreements with landowners and the municipality for the collection of fees and charges, advancement of monies or granting real property by landowners for infrastructure purposes. Specifies additional permissive agreements.
Ų By Resolution, levy and assess the costs of infrastructure in the District. Pay the financial, legal and administrative costs of the District.
Ų Enter into contracts and agreements to obtain credit enhancements or liquidity support for its bonds and related processing, issuance, registration, transfers and payments, including disbursement and reinvestment of proceeds of the bonds.
Ų With proper consent, enter into agreements to provide services to persons and property outside the District. Use public easements and rights-of-ways as outlined.
· States a person does not have the authority to compel the issuance or sale of District bonds or any taxing power of the District to make repayment under any agreement.
· Mandates infrastructure be located only on lands owned by the state, county, municipality or the District, or dedicated public roadways, highways, streets, thoroughfares or rights-of-way.
District Records and Board of Directors
· Requires minutes, resolutions, accounts receivable and payable, annual budgets and all other required records be open public records.
· Outlines requirements for the board members, including terms of office and filling vacancies.
· Appoints the District Clerk and District Treasurer as those serving the relevant city or county, unless otherwise stipulated by the District Board.
Finances and Budget
· Permits General Plan projects to be financed from revenue sources as follows: proceeds from the sale of District bonds; monies contributed by the municipality, Indian Tribe or community; annual tax levies; special assessments; state or federal grants or contributions; private contributions; user, landowner and other fees or charges; proceeds from loans or advances; any other available monies as provided by law.
· Requires the District Treasurer to prepare a proposed budget by July 15 each year, and the District Board to approve the budget, by Resolution, by October 1 each year. Permits participating entities to submit written comments for the budget hearing process.
Revenue Bonds and Special Assessment Bonds
· Allows the District Board to hold a hearing regarding the authority to issue revenue bonds to provide monies for any infrastructure. Any bonds sold in a public offering must have one of the four highest investment grade ratings by a nationally recognized bond rating agency.
· Allows the District Board to pledge to the payment of its revenue bonds, any District revenues or those collected by the municipality in trust and returned to the District.
· Requires the District to prescribe fees and charges and revise them as necessary to generate sufficient bond revenues for payment of principal and interest (and include in annual budget).
· Mandates only the types of revenues pledged and cited during the resolution process be pledged and maintained by the District.
· Prohibits any bond holder from compelling any District or municipality to exercise taxing power to pay the bonds or their interest. States the revenue bonds are not a debt of the District or municipality, nor is the payment of revenue bonds enforceable out of monies other than the pledged payment of the bonds.
· Authorizes the District to issue and sell refunding bonds in order to refund any revenue bonds or special assessment bonds of the District.
· Permits the District Board, after approval at an election and according to the process and procedures of current law, to levy an assessment of the costs, maintenance and operation of any infrastructure purpose, or any enhanced municipal services on land in the District based on the benefit determined by the District Board. The District may enter into a written agreement with a landowner regarding the manner in which the assessment is to be allocated if the land is to be divided into more than one parcel. Outlines specific requirements if special assessment lien bonds finance more than one purpose or service. Authorizes a land owner to seek judicial review of whether land is benefitted by the proposed infrastructure.
· After the adoption of a resolution by the District Board to levy a special assessment of property in the District, outlines proper issuance, sales, permissive funds, including reserve funds, and collections through agreement with the county treasurer.
· States that on adoption of the resolution, but before issuing the Special Assessment Lien Bonds, the District may direct the county treasurer to require the owners of the assessed property to make advance payment. Outlines specific requirements.
Terms of Bonds
· Authorizes the District Board to determine the denomination, size and form of each bond, and establish the maturity dates, interest payment dates, interest rates, fixed or variable, but not to exceed the maximum rate stated in the resolution of the District Board.
· Sells the bonds by competitive bid or negotiated sale for public or private offering as outlined. Directs proceeds be deposited with the Treasurer, trustee or agent designated by the District Board. Bonds may contain such terms, conditions, covenants and agreements as the District Board deems proper. Makes the bonds payable from any combination of taxes, revenues or special assessments as permitted.
· States the District Board (after formation of the District) or the governing body (before formation of the District) may call an election to submit to eligible voters, the question of authorizing the District Board to levy an ad valorem tax on the assessed value of all real and personal property in the District at a rate not to exceed the maximum specified in the ballot.
· Stipulates that all taxes for District maintenance and operation expenses must not exceed $.30 per $100 assessed valuation for all real and personal property in the District, unless a higher rate is approved by voters in the District at an election no less than three years after the date of the formation of the District. Outlines the process for changing the tax rate.
· Prohibits the District from levying a rate in excess of the maximum rate then in effect, except for the payment of debt service on bonds.
· Requires the District Board to make annual statements and estimates of maintenance and operation expenses of the District, cost of capital improvements and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy as well as the amount raised to pay bonds of the District. The District Board must file the annual statements and estimates with the clerk.
Dissolution of District
· By resolution of the District Board, dissolves the District if all property is conveyed to the municipality and either the District has no obligations or the municipality has assumed them.
· Requires dissolution if the governing body consents and voters approve the dissolution or the District has been inactive for at least five years and has no future purpose and the District Board adopts a resolution dissolving the District and records the resolution.
· Permits the District Board to hold an election regarding dissolution, but requires an election if requested in a petition signed by 10% of the qualified electors of the District.
· Directs the election to be held in the same manner as a bond or tax levy election, except the ballot shall contain the words "Dissolution, YES" and "Dissolution, NO."
· Stipulates all pertinent property in the District remains subject to the lien for the payment of general obligation bonds, and any property subject to a special assessment lien remains subject to the lien. The District may not be dissolved if any revenue bonds are outstanding unless sufficient money is available to make all payments due. Permits the District to operate after its dissolution only as needed to collect money and make payments as necessary.
· Authorizes the county treasurer to collect a fee for the expenses related to collecting the special assessments. Deposits monies into the Taxpayers' Information Fund. [§ 11-496]
· Stipulates the District has perpetual succession, except that the District may be dissolved as outlined. Further, the District Sunsets after 10 years unless the affected governing bodies extend the District by resolution. [§ 48-6809]
· Allows the governing body, by resolution, to order the municipality to share in the costs of any infrastructure purpose, including the payment of bond debt service. [§ 48-6811]
· Requires an election before the District can levy and assess the costs of any infrastructure improvements. Specifies one vote may be cast for each 1/7 acre of land. [§ 48-6818]
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· Forty-ninth Legislature
· Second Regular Session 5 March 22, 2010
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