Reference Title: taxation; accounting and conformity

AN ACT
AMENDING SECTIONS 9-101, 9-131, 9-471 AND 48-2001, ARIZONA REVISED STATUTES; REPEALING SECTION 9-101.01, ARIZONA REVISED STATUTES; REPEALING LAWS 1997, CHAPTER 204, SECTION 2; RELATING TO MUNICIPAL INCORPORATION AND ANNEXATION.

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

Section 1. Section 9-101, Arizona Revised Statutes, is amended to read:

9-101 . Incorporation; definition

A. When two-thirds of the qualified electors residing in a community containing a population of fifteen hundred or more inhabitants petition the board of supervisors, setting forth the metes and bounds of the community, and the name under which the petitioners desire to be incorporated, and praying for the incorporation of the community into a city or town, and the board is satisfied that two-thirds of the qualified electors residing in the community have signed the petition, it shall, by an order entered of record, declare the community incorporated as a city or town.

B. When ten per cent of the qualified electors residing in a community containing a population of fifteen hundred or more persons petition the board of supervisors in the manner prescribed in subsection A of this section, praying for the calling of an election for the purpose provided in this section, the board shall within sixty days after filing the petition call the election, and the election shall take place on a date prescribed by section 16-204 but not more than one hundred eighty days after the petition is filed, except that no such election shall be called within twelve months from the date of a previous election for incorporation of substantially the same territory. Only qualified electors of the community shall vote on this question. If a majority of qualified electors voting thereon votes for incorporation, then the board of supervisors shall, by an order entered of record, declare the community incorporated as a city or town.

C. Prior to obtaining any signatures on a petition required by subsection A or B of this section, a copy of such petition shall be filed with the county recorder or, in a county having an elections department, with the county elections department. The petition shall state its purpose clearly and concisely and shall be in the form and signed and verified as generally provided for initiative petitions. Petitioners shall have one hundred eighty TWO HUNDRED SEVENTY days from the date of such filing to obtain the required number of signatures.

D. By whichever proceeding the incorporation of a city or town is accomplished, the order shall designate the name of the city or town, and its metes and bounds, and thereafter the inhabitants within the area so defined shall be a body politic and corporate by the name designated.

E. For the purposes of this section, "community" means a locality in which a body of people resides in more or less proximity having common interests in such services as public health, public protection, fire protection and water which bind together the people of the area, and where the people are acquainted and mingle in business, social, educational and recreational activities.

F. An area to be incorporated shall not include large areas of uninhabited, rural or farm lands, but it shall be urban in nature. LARGE AREAS OF UNINHABITED LANDS MEANS SIX HUNDRED FORTY OR MORE CONTIGUOUS ACRES OF UNINHABITED LANDS UNDER SINGLE OWNERSHIP. IF STATE LAND IS INCLUDED IN THE AREA TO BE INCORPORATED AND CONSISTS OF AT LEAST ONE HUNDRED SIXTY TOTAL ACRES, WRITTEN APPROVAL OF THE STATE LAND COMMISSIONER AND THE SELECTION BOARD ESTABLISHED BY SECTION 37-202 SHALL BE FILED.

G. Territory shall not be incorporated if, as a result of such incorporation, unincorporated territory is completely surrounded by incorporated areas , nor shall EXCEPT IF THE SURROUNDED AREA IS AIRPORT PROPERTY AS DESCRIBED IN SUBSECTION H OF THIS SECTION. An area to be incorporated SHALL NOT exclude interior county streets and roads, unless the board of supervisors approves the exclusion of such territory, streets and roads.

H. AN AREA SHALL NOT BE INCORPORATED IF ANY OF THE FOLLOWING APPLY:

1. IT INCLUDES ANY PROPERTY THAT IS OWNED OR OPERATED IN WHOLE OR IN PART BY AN EXISTING CITY, TOWN OR COUNTY FOR AIRPORT OR AIRPORT RELATED PURPOSES UNLESS THE EXISTING CITY, TOWN OR COUNTY CONSENTS IN WRITING TO THE INCORPORATION.

2. IT INCLUDES ANY PROPERTY OPERATED BY A NONPROFIT CORPORATION FOR AIRPORT OR AIRPORT RELATED PURPOSES PURSUANT TO SECTION 28-8423 UNLESS THE NONPROFIT CORPORATION CONSENTS IN WRITING TO THE INCORPORATION.

3. IT INCLUDES CONTIGUOUS PROPERTY OF ONE HUNDRED SIXTY ACRES OR MORE UNDER SINGLE OWNERSHIP THAT IS ZONED FOR A COMMON PLAN OF DEVELOPMENT THAT INCLUDES RECREATIONAL AMENITIES AND COMMON AREAS, UNLESS THE PROPERTY OWNER CONSENTS IN WRITING TO THE INCORPORATION.

4. IT INCLUDES ANY PROPERTY WITHIN A NONPROFIT PROPERTY OWNERS ASSOCIATION WHOSE RECORDED ASSOCIATION BOUNDARY COVERS MORE THAN THREE HUNDRED TWENTY ACRES UNLESS THE NONPROFIT ASSOCIATION CONSENTS IN WRITING TO THE INCORPORATION PETITION AND BOUNDARY MAP.

5. IT IS LOCATED INSIDE AN AREA THAT IS SURROUNDED BY THE EXTERIOR BOUNDARIES AND STRIP ANNEXATION BOUNDARIES OF AN EXISTING INCORPORATED CITY OR TOWN.

6. IF IT INCLUDES ANY PROPERTY OWNED OR OPERATED BY THE FEDERAL GOVERNMENT FOR MANUFACTURING AND DEVELOPMENT PURPOSES.

H. I. The board of supervisors shall exclude from the community proposed to be incorporated pursuant to subsection A or B of this section any territory which has been included in an annexation ordinance adopted by a city or town pursuant to law after the incorporation petition has been filed pursuant to subsection C of this section. If the remaining community fails to meet the qualifications for incorporation, the board of supervisors shall reject the petition.

Sec. 2. Repeal

Section 9-101.01 , Arizona Revised Statutes, is repealed.

Sec. 3. Section 9-131, Arizona Revised Statutes, is amended to read:

9-131 . Incorporation; definition

A. When two-thirds of the qualified electors in each county residing in a single community containing a collective population of fifteen hundred or more inhabitants petition their respective boards of supervisors, setting forth the metes and bounds of the community and the name under which the petitioners desire to be incorporated, and praying for the incorporation of the community into a city or town, and the respective boards meeting in a joint session are satisfied that two-thirds of the qualified electors residing in the community in each county have signed the petition, they shall by an order entered of record by each board declare the community incorporated as a city or town.

B. When ten per cent of the qualified electors in each county residing in a single community containing a collective population of fifteen hundred or more inhabitants petition their respective boards of supervisors in the manner prescribed by subsection A of this section, praying for the calling of an election for the purpose provided in this section, the respective boards meeting in joint session shall within sixty days after the filing of the petition call the election, and the election shall take place on a date prescribed by section 16-204 but not more than one hundred eighty days after the petition is filed, except that no such election shall be called within twelve months from the date of a previous election for incorporation of substantially the same territory. Only qualified electors of the community shall vote on this question. If a majority of qualified electors in each county voting thereon votes for incorporation, then the boards of supervisors again meeting in joint session shall by an order entered of record by each board declare the community incorporated as a city or town.

C. The provisions of section 9-231 shall apply to cities and towns incorporated under this article, except that the first common council shall be appointed by the boards of supervisors of the respective counties meeting in joint session.

D. By whichever proceeding the incorporation of a city or town is accomplished, the order shall designate the name of the city or town, and its metes and bounds, and thereafter the inhabitants within the area so defined shall be a body politic and corporate by the name designated.

E. For the purposes of this section, "community" means a locality in which a body of people resides in more or less proximity having common interests in such services as public health, public protection, fire protection and water which bind together the people of the area, and where the people are acquainted and mingle in business, social, educational and recreational activities.

F. An area to be incorporated shall not include large areas of uninhabited, rural or farm lands, but it shall be urban in nature. LARGE AREAS OF UNINHABITED LANDS MEANS SIX HUNDRED FORTY OR MORE CONTIGUOUS ACRES OF UNINHABITED LANDS UNDER SINGLE OWNERSHIP. IF STATE LAND IS INCLUDED IN THE AREA TO BE INCORPORATED AND CONSISTS OF AT LEAST ONE HUNDRED SIXTY TOTAL ACRES, WRITTEN APPROVAL OF THE STATE LAND COMMISSIONER AND THE SELECTION BOARD ESTABLISHED BY SECTION 37-202 SHALL BE FILED.

G. AN AREA SHALL NOT BE INCORPORATED IF ANY OF THE FOLLOWING APPLY:

1. IT INCLUDES CONTIGUOUS PROPERTY OF ONE HUNDRED SIXTY ACRES OR MORE UNDER SINGLE OWNERSHIP THAT IS ZONED FOR A COMMON PLAN OF DEVELOPMENT THAT INCLUDES RECREATIONAL AMENITIES AND COMMON AREAS, UNLESS THE PROPERTY OWNER CONSENTS IN WRITING TO THE INCORPORATION.

2. IT INCLUDES ANY PROPERTY WITHIN A NONPROFIT PROPERTY OWNERS ASSOCIATION WHOSE RECORDED ASSOCIATION BOUNDARY COVERS MORE THAN THREE HUNDRED TWENTY ACRES UNLESS THE NONPROFIT ASSOCIATION CONSENTS IN WRITING TO THE INCORPORATION PETITION AND BOUNDARY MAP.

3. IT IS LOCATED INSIDE AN AREA THAT IS SURROUNDED BY THE EXTERIOR BOUNDARIES AND STRIP ANNEXATION BOUNDARIES OF AN EXISTING INCORPORATED CITY OR TOWN.

Sec. 4. Section 9-471, Arizona Revised Statutes, is amended to read:

9-471 . Annexation of territory; procedures; notice; petitions; access to information; restrictions

A. The following procedures are required to extend and increase the corporate limits of a city or town by annexation:

1. A city or town shall file in the office of the county recorder of the county in which the annexation is proposed a blank petition required by paragraph 4 of this subsection setting forth a description and an accurate map of all the exterior boundaries of the territory contiguous to the city or town proposed to be annexed. Notice and a copy of the filing shall be given to the clerk of the board of supervisors and to the county assessor. The accurate map shall include all county rights-of-way and roadways with no taxable value that are within or contiguous to the exterior boundaries of the area of the proposed annexation. If state land is included in the territory, written approval of the state land commissioner and the selection board established by section 37-202 shall also be filed. IF THE PROPERTY THAT IS THE SUBJECT OF THE PETITION INCLUDES ANY PROPERTY THAT IS OWNED OR OPERATED, IN WHOLE OR IN PART, FOR AIRPORT OR AIRPORT RELATED PURPOSES BY A CITY, TOWN OR COUNTY OTHER THAN THE CITY OR TOWN SEEKING THE ANNEXATION, THE WRITTEN APPROVAL OF THE CITY, TOWN OR COUNTY TO THE PROPOSED ANNEXATION SHALL ALSO BE FILED. IF THE PROPERTY THAT IS THE SUBJECT OF THE PETITION INCLUDES ANY PROPERTY THAT IS OPERATED BY A NONPROFIT CORPORATION FOR AIRPORT OR AIRPORT RELATED PURPOSES PURSUANT TO A LEASE ENTERED INTO PURSUANT TO SECTION 28-8423 WITH A CITY, TOWN OR COUNTY OTHER THAN THE ONE SEEKING THE ANNEXATION, THE CONSENT OF THE NONPROFIT CORPORATION TO THE ANNEXATION SHALL ALSO BE FILED.

2. Signatures on petitions filed for annexation shall not be obtained for a waiting period of thirty days after filing the blank petition.

3. After filing the blank petition pursuant to paragraph 1 of this subsection, the governing body of the city or town shall hold a public hearing within the last ten days of the thirty day waiting period to discuss the annexation proposal. The public hearing shall be held in accordance with the provisions of title 38, chapter 3, article 3.1, except that, notwithstanding the provisions of section 38-431.02, subsections C and D, the following notices of the public hearing to discuss the annexation proposal shall be given at least six days before the hearing:

(a) Publication at least once in a newspaper of general circulation, which is published or circulated in the city or town and the territory proposed to be annexed, at least fifteen days before the end of the waiting period.

(b) Posting in at least three conspicuous public places in the territory proposed to be annexed.

(c) Notice by first class mail sent to the chairman of the board of supervisors of the county in which the territory proposed to be annexed is located.

(d) Notice by first class mail with an accurate map of the territory proposed to be annexed sent to each owner of the real and personal property as shown on the list furnished pursuant to subsection G of this section that would be subject to taxation by the city or town in the event of annexation in the territory proposed to be annexed. For purposes of this subdivision, real and personal property includes mobile, modular and manufactured homes and trailers only if the owner also owns the underlying real property.

4. Within one year after the last day of the thirty day waiting period a petition in writing signed by the owners of one-half or more in value of the real and personal property and more than one-half of the persons owning real and personal property that would be subject to taxation by the city or town in the event of annexation, as shown by the last assessment of the property, may be circulated and filed in the office of the county recorder. For purposes of this paragraph, real and personal property includes mobile, modular and manufactured homes and trailers only if the owner also owns the underlying real property.

5. No alterations increasing or reducing the territory sought to be annexed shall be made after a petition has been signed by a property owner.

6. The petitioner shall determine and submit a sworn affidavit verifying that no part of the territory for which the filing is made is already subject to an earlier filing for annexation. The county recorder shall not accept a filing for annexation without the sworn affidavit.

B. All information contained in the filings, the notices, the petition, tax and property rolls and other matters regarding a proposed or final annexation shall be made available by the appropriate official for public inspection during regular office hours.

C. Any city or town, the attorney general, the county attorney, or any other interested party may upon verified petition move to question the validity of the annexation for failure to comply with the provisions of this section. The petition shall set forth the manner in which it is alleged the annexation procedure was not in compliance with the provisions of this section and shall be filed within thirty days after adoption of the ordinance annexing the territory by the governing body of the city or town and not otherwise. The burden of proof shall be upon the petitioner to prove the material allegations of his verified petition. No action shall be brought to question the validity of an annexation ordinance unless brought within the time and for the reasons provided in this subsection. All hearings provided by this section and all appeals therefrom shall be preferred and heard and determined in preference to all other civil matters, except election actions. In the event more than one petition questioning the validity of an annexation ordinance is filed, all such petitions shall be consolidated for hearing. If two or more cities or towns show the court that they have demonstrated an active interest in annexing any or all of the area proposed for annexation, the court shall consider any oral or written agreements or understandings between or among the cities and towns in making its determination pursuant to this subsection.

D. The annexation shall become final after the expiration of thirty days from the adoption of the ordinance annexing the territory by the city or town governing body, provided the annexation ordinance has been finally adopted in accordance with procedures established by statute, charter provisions, or local ordinances, whichever is applicable, subject to the review of the court to determine the validity thereof if petitions in objection have been filed.

E. For the purpose of determining the sufficiency of the percentage of the value of property under this section, such values of property shall be determined as follows:

1. In the case of property assessed by the county assessor, values shall be the same as shown by the last assessment of the property.

2. In the case of property valued by the department of revenue, values shall be appraised by the department in the manner provided by law for municipal assessment purposes.

F. For the purpose of determining the sufficiency of the percentage of persons owning property under this section, the number of persons owning property shall be determined as follows:

1. In the case of property assessed by the county assessor, the number of persons owning property shall be as shown on the last assessment of the property.

2. In the case of property valued by the department of revenue, the number of persons owning property shall be as shown on the last valuation of the property.

3. If an undivided parcel of property is owned by multiple owners, such owners shall be deemed as one owner for the purposes of this section.

4. If a person owns multiple parcels of property, such owner shall be deemed as one owner for the purposes of this section.

G. The county assessor and the department of revenue, respectively, shall furnish to the city or town proposing an annexation within thirty days after a request therefor a statement in writing showing the owner, the address of each owner and the appraisal and assessment of all such property.

H. Territory is not contiguous for the purposes of subsection A, paragraph 1 of this section unless:

1. It adjoins the exterior boundary of the annexing city or town for at least three hundred feet.

2. It is, at all points, at least two hundred feet in width, excluding rights-of-way and roadways.

3. The distance from the existing boundary of the annexing city or town where it adjoins the annexed territory to the furthest point of the annexed territory from such boundary is no more than twice the maximum width of the annexed territory.

I. A city or town shall not annex territory if as a result of such annexation unincorporated territory is completely surrounded by the annexing city or town.

J. Notwithstanding any provisions of this article to the contrary, any town incorporated prior to 1950 which had a population of less than two thousand persons by the 1970 census and which is bordered on at least three sides by Indian lands may annex by ordinance territory owned by the state within the same county for a new townsite which is not contiguous to the existing boundaries of the town.

K. The provisions of subsections H and I of this section shall not apply to territory which is surrounded by the same city or town or which is bordered by the same city or town on at least three sides.

L. A city or town annexing an area shall adopt zoning classifications which permit densities and uses no greater than those permitted by the county immediately before annexation. Subsequent changes in zoning of the annexed territory shall be made according to existing procedures established by the city or town for the rezoning of land.

M. The annexation of territory within six miles of territory included in a pending incorporation petition filed with the county recorder pursuant to section 9-101.01, subsection C shall not cause an urbanized area to exist pursuant to section 9-101.01 which did not exist prior to the annexation.

N. M. As an alternative to the procedures established in this section, a county right-of-way or roadway with no taxable real property may be annexed to an adjacent city or town by mutual consent of the governing bodies of the county and city or town if the property annexed is adjacent to the annexing city or town for the entire length of the annexation and if the city or town and county each approve the proposed annexation as a published agenda item at a regular public meeting of their governing bodies.

Sec. 5. Section 48-2001, Arizona Revised Statutes, is amended to read:

48-2001 . Establishment of sanitary district; territory; purposes; change of name

A. Notwithstanding the provisions of section 48-261 or 48-262, a sanitary district shall not include territory located within an incorporated city or town at the time the district is established and the territory included in a sanitary district is required to be contiguous except as provided in section 48-2002.

B. In addition to the requirements set forth in section 48-261, a sanitary district may be formed only for:

1. The purposes of regulating, purchasing, establishing, constructing and operating a sewerage system or a sewage sludge or by-product processing and disposal system which is owned by the district or any person and which provides for sewage collection, treatment and disposal in the district. The system may include the collection, transportation, pumping, treatment and disposal of sewage , AND processing, treating and disposing of sewage sludge and other by-products of sewage treatment.

2. Purchasing, establishing, constructing and operating a garbage disposal and treatment system. The garbage system shall be limited to the disposal and treatment of garbage, rubbish, trash and waste materials and shall not include collection.

C. In addition to the requirements set forth in sections 48-261 and 48-262, no territory which lies within an urbanized area , as defined in section 9-101.01, shall be included in or annexed to a sanitary district unless the city or town shall have approved the inclusion or annexation of said territory into the sanitary district, or, upon request of the parties seeking annexation or inclusion of territory within the sanitary district, the city or town has failed to act upon such request and either approve or deny the request within one hundred twenty days of its presentation to the city or town.

D. A sanitary district established under this chapter is a body corporate with the powers, privileges and immunities generally granted to municipal corporations by the constitution and laws of this state for the purposes prescribed by this chapter.

E. A sanitary district may change its name by resolution unanimously adopted by its board of directors. Before adopting a resolution to change the name of the district, the board shall give notice to all residents and property owners within the district by publication of the notice at least twenty days before the date of the hearing of the board at which the name change will be considered. The notice shall be placed in a newspaper of general circulation within the district. The district shall also mail to each customer of the district within the district a notice of name change at least thirty days before the hearing on the change of name. At the hearing the customers and landowners shall be entitled to be heard as to why the name should or should not be changed. Following the hearing the board shall act on the resolution changing the name of the district.

F. FOR PURPOSES OF THIS SECTION, "URBANIZED AREA" MEANS ALL TERRITORY WITHIN SIX MILES OF AN INCORPORATED CITY OR TOWN WITH A POPULATION OF FIVE THOUSAND OR MORE PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS AND ALL TERRITORY WITHIN THREE MILES OF AN INCORPORATED CITY OR TOWN WITH A POPULATION OF LESS THAN FIVE THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS.

Sec. 6. Repeal

Laws 1997, chapter 204, section 2 is repealed.

Sec. 7. Applicability

If inclusion of airport or airport related property within an area sought to be incorporated or annexed, without the consent required by section 9-101 or 9-471, Arizona Revised Statutes, as amended by this act, was proper at the time the petitions were filed, the board of supervisors shall delete any such airport or airport related property from the area to be incorporated or annexed but shall proceed to incorporate or annex the remaining area if it meets the other criteria for incorporation or annexation, notwithstanding this act.

Sec. 8. Retroactive application; exception

A. Section 9-101, subsection F, Arizona Revised Statutes, and section 9-131, subsection F, Arizona Revised Statutes, as amended by this act, apply retroactively to January 1, 1998, except that approval for incorporation by the state land commissioner and selection board is not required for any community that has filed a map or petition for incorporation before January 1, 1998, even if a subsequent amendment of the map or petition is required.

B. Section 9-101, subsection C, Arizona Revised Statutes, as amended by this act and sections 2 and 4 of this act apply retroactively to July 1, 1997.

Sec. 9. Nonseverability

If any portion of this act is finally adjudicated invalid, the entire act is void.