SB1259 - 451R

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 ¦ REFERENCE TITLE: truth in taxation ¦
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 ¦                                 ¦
 ¦                                 ¦
 ¦                                 ¦
 ¦ State of Arizona                ¦
 ¦ Senate                          ¦
 ¦ Forty-fifth Legislature         ¦
 ¦ First Regular Session           ¦
 ¦ 2001                            ¦
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 ¦            SB 1259              ¦
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 ¦         Introduced by           ¦
 ¦       Senator Bundgaard         ¦
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AN ACT

AMENDING SECTIONS 15-905.01, 15-1461.01, 42-17003, 42-17004, 42-17005, 42-17104 AND 42-17107, ARIZONA REVISED STATUTES; RELATING TO PROPERTY TAX ASSESSMENT.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-905.01, Arizona Revised Statutes, is amended to read:

15-905.01. Truth in taxation; calculation; notice and hearing; vote on tax increase

A. Each school district shall determine its truth in taxation base limit for expenditures as follows:

1. Determine the amounts budgeted in fiscal year 1999-2000 for expenditures in the following categories:

(a) Desegregation pursuant to section 15-910.

(b) Dropout prevention programs.

(d) Vocational and ~~technical~~ TECHNOLOGICAL center operations pursuant to section 15-910.01.

(e) Small school adjustments pursuant to section 15-949.

2. The sum of the expenditures in paragraph 1 of this subsection for fiscal year 1999-2000 shall become the truth in taxation base limit.

3. For any year after fiscal year 1999-2000, a school district whose aggregate budgeted expenditures for the expenditures prescribed in paragraph 1 of this subsection exceed the truth in taxation base limit shall publish a truth in taxation hearing notice that meets the requirements of subsection B of this section. If the amount exceeding the previous truth in taxation base limit is approved by the school district governing board following the hearing prescribed in subsection B of this section, the excess amount plus the previous truth in taxation base limit becomes the school district's new truth in taxation base limit.

4. If a school district no longer qualifies for one or more of the expenditures prescribed in paragraph 1 of this subsection, the amount budgeted for the most recent fiscal year in which the school district was eligible for that expenditure shall be deducted from the school district's truth in taxation base limit.

B. For any fiscal year in which a school district governing board budgets an amount that is higher than the truth in taxation base limit calculated pursuant to subsection A of this section, any fiscal year in which a school district levies any amount for adjacent ways pursuant to section 15-995 or any fiscal year in which the school district levies any amount for liabilities in excess of the school district budget pursuant to section 15-907:

1. The school district shall publish a notice that meets the following requirements:

(a) The notice shall be published once in a newspaper of general circulation in the school district. The publication shall be at least ten but not more than twenty days before the date of the hearing.

(b) The notice shall be published in a location other than the classified or legal advertising section of the newspaper in which it is published.

(c) The notice shall be at least one-fourth page in size and shall be surrounded by a solid black border at least one-eighth inch in width.

(d) The notice shall be in the following form, EXCLUDING THE PARENTHETICAL EXPLANATIONS AND with the "truth in taxation hearing - notice of tax increase" headline in at least eighteen point type:

Truth in Taxation Hearing

Notice of Tax Increase

In compliance with section 15-905.01, Arizona Revised Statutes, _________ school district is notifying its property taxpayers of _________ school district's intention to raise its primary property taxes over the current level to pay for increased expenditures over the state-imposed spending limit. The _________ school district is proposing an increase in its primary property tax levy of $_________ (amount of levy increase to pay for truth in taxation base increase PLUS ANY AMOUNT LEVIED FOR ADJACENT WAYS OR LIABILITIES IN EXCESS OF THE BUDGET) or _____% (THE AMOUNT OF THE INCREASE EXPRESSED AS A PERCENTAGE OVER THE PREVIOUS YEAR'S TRUTH IN TAXATION BASE LIMIT EXCLUDING AMOUNTS LEVIED FOR ADJACENT WAYS OR LIABILITIES IN EXCESS).

For example, the proposed tax increase will cause _________ school district's primary property taxes on a $100,000 home to increase from $_________ (the rate used to pay for the current truth in taxation base limit [the amount divided by the current net assessed value) available February 10 pursuant to section 42-17052] applied to $100,000] ) to $____________ (the rate used to pay for the proposed truth in taxation base limit [the amount divided by the current net assessed value available February 10 pursuant to section 42-17052] applied to $100,000).

This proposed increase is exclusive of the amount produced by levying the qualifying tax levy as prescribed in Arizona Revised Statutes section 15- 971, subsection B, section 15-918.05, if applicable, and section 15-919.05, if applicable. The increase is also exclusive of any changes that may occur from property tax levies for voter approved bonded indebtedness or budget and tax overrides.

All interested citizens are invited to attend the public hearing on the proposed tax increase scheduled to be held _________ (date and time) at _________ (location).

2. In lieu of publishing the truth in taxation notice, the governing board may mail the truth in taxation notice prescribed by paragraph 1, subdivision (d) of this subsection to all registered voters in the district at least ten but not more than twenty days before the date of the hearing.

3. In addition to publishing the truth in taxation notice under paragraph 1 of this subsection or mailing the notice under paragraph 2 of this subsection, the governing board shall issue a press release containing the truth in taxation notice to all newspapers of general circulation in the school district.

4. The governing board shall consider a motion to levy the increased property taxes by roll call vote.

5. Within three days after the hearing, the governing board shall mail a copy of the truth in taxation notice, a statement of its publication or mailing and the result of the governing board's vote under paragraph 4 of this subsection to the property tax oversight commission established by section 42-17002.

6. The governing board shall hold the truth in taxation hearing on or before the adoption of the school district budget under section 15-905.

7. Expenditures for adjacent ways and liabilities in excess of the school district budget do not become part of the school district's truth in taxation base limit.

C. The department of education shall maintain a listing of each school district's truth in taxation base limit and shall verify the accuracy of the school district's computations. A school district governing board shall notify the department of education of any change in the district's truth in taxation base limit.

D. The department of education shall develop a budget form for school districts to show the primary tax rate associated for each of the expenditure categories mentioned in subsection A, paragraph 1 of this section and for expenditures for adjacent ways pursuant to section 15-995 or any other expenditure in excess of the school district budget pursuant to section 15-907. A school district shall make this information available to the general public at truth in taxation hearings and shall submit the information to the department of education

Sec. 2. Section 15-1461.01, Arizona Revised Statutes, is amended to read:

15-1461.01. Truth in taxation notice and hearing; roll call vote on tax increase; definition

A. On or before July 1, the county assessor shall transmit to the district an estimate of the total net assessed valuation of the district, including an estimate of new property that has been added to the tax roll since the previous levy of property taxes in the district. If the proposed primary property tax levy, excluding amounts that are attributable to new construction, is greater than the amount levied in the preceding tax year by the district:

1. The district governing board shall publish a notice that meets the following requirements:

(a) The notice shall be published twice in a newspaper of general circulation in the district. The first publication shall be at least fourteen but not more than twenty days before the date of the hearing. The second publication shall be at least seven but not more than ten days before the date of the hearing.

(b) The notice shall be published in a location other than the classified or legal advertising section of the newspaper in which it is published.

(c) The notice shall be at least one-fourth page in size and shall be surrounded by a solid black border at least one-eighth inch in width.

(d) The notice shall be in the following form, with the "truth in taxation hearing - notice of tax increase" headline in at least eighteen point type:

Truth in Taxation Hearing

Notice of Tax Increase

In compliance with section 15-1461.01, Arizona Revised Statutes, __________ community college district is notifying its property taxpayers of __________ community college district's intention to raise its primary property taxes over last year's level. The __________ community college district is proposing an increase in primary property taxes of $__________ or _____%.

For example, the proposed tax increase will cause __________ community college district's primary property taxes on a $100,000 home to increase from $__________ (total taxes that would be owed without the proposed tax increase) to $__________ (total proposed taxes including the tax increase).

This proposed increase is exclusive of increased primary property taxes received from new construction. The increase is also exclusive of any changes that may occur from property tax levies for voter approved bonded indebtedness or budget and tax overrides.

All interested citizens are invited to attend the public hearing on the tax increase that is scheduled to be held __________ (date and time) at __________ (location).

2. In lieu of publishing the truth in taxation notice, the district board may mail the truth in taxation notice prescribed by paragraph 1, subdivision (d) to all registered voters in the district at least ten but not more than twenty days before the date of the hearing.

3. In addition to publishing the truth in taxation notice under paragraph 1 or mailing the notice under paragraph 2, the district governing board shall issue a press release containing the truth in taxation notice to all newspapers of general circulation in the district.

4. The district board shall consider a motion to levy the increased property taxes by roll call vote.

5. Within three days after the hearing, the district board shall mail a copy of the truth in taxation notice, a statement of its publication or mailing and the result of the district board's vote under paragraph 4 to the property tax oversight commission established by section 42-17002.

6. The district board shall hold the truth in taxation hearing on or before the adoption of the county, city or town budget under section 42-17105.

B. EXCLUDING AMOUNTS ATTRIBUTABLE TO NEW CONSTRUCTION, THE GOVERNING BOARD SHALL NOT FIX, LEVY OR ASSESS AN AMOUNT OF PRIMARY PROPERTY TAXES THAT EXCEEDS THE PREVIOUS YEAR'S AMOUNT UNLESS THE PROVISIONS OF THIS SECTION ARE MET.

B. C. For purposes of this section, "amount attributable to new construction" means the net assessed valuation of property added to the tax roll since the previous year multiplied by a property tax rate computed by dividing the district's primary property tax levy in the preceding year by the estimate of the district's total net assessed valuation for the current year, excluding the net assessed valuation attributable to new construction.

Sec. 3. Section 42-17003, Arizona Revised Statutes, is amended to read:

42-17003. Duties

A. The commission shall:

1. Establish procedures for deriving the information required by SECTIONS 15- 905.01, 15-1461.01 AND 42-17107 AND article 2 of this chapter.

2. Review the primary property tax levy of each political subdivision to determine violations of SECTIONS 15-905.01, 15-1461.01 AND 42-17107 AND article 2 of this chapter.

3. Review the reports made by the department concerning valuation accuracy.

4. Hold hearings to determine the adequacy of compliance with articles 2 and 3 of this chapter.

B. If the commission determines that a political subdivision has violated SECTION 15-905.01, 15-1461.01 OR 42-17107 OR article 2 of this chapter, then on or before September 15 the commission shall notify the political subdivision and the county board of supervisors, in writing, of:

1. The nature of the violation.

2. The necessary adjustment to the primary property tax levy and tax rate to comply with SECTION 15-905.01, 15-1461.01 OR 42-17107 OR article 2 of this chapter.

Sec. 4. Section 42-17004, Arizona Revised Statutes, is amended to read:

42-17004. Hearing and appeals of commission findings

A. If the commission notifies a political subdivision of a violation of SECTION 15-905.01, 15-1461.01 OR 42-17107 OR article 2 of this chapter, and the political subdivision disputes the commission's findings, then on or before October 1 the political subdivision may request a hearing before the commission to attempt to resolve the dispute.

B. The commission shall conduct the hearing as prescribed in title 41, chapter 6, article 10.

C. If the dispute is resolved at the hearing, the commission shall immediately notify the county board of supervisors of the proper primary tax levy and tax rate.

D. If a political subdivision continues to dispute the commission's findings after the hearing under this section, the political subdivision may:

1. Appeal the matter to tax court within thirty days after the commission renders the decision.

2. Levy primary property taxes in the amount that the political subdivision considers to be proper, pending the outcome of the appeal.

Sec. 5. Section 42-17005, Arizona Revised Statutes, is amended to read:

42-17005. Adjustments to levy

A. If a governing body of a political subdivision receives written notice of a violation of its allowable levy LIMIT OR TRUTH IN TAXATION limit under section 42- 17003, and has not appealed the commission's decision pursuant to section 42-17004, the governing body shall correct its primary property tax levy and tax rate to properly reflect the allowable levy for the current year. The county board of supervisors shall make the necessary adjustments to the political subdivision's primary property tax levy and tax rate to ensure that the corrected information is contained in the assessment and tax roll that is transmitted to the county treasurer pursuant to section 42-18003. If the governing body receives the notice after it is too late to correct the levy in the current year, the difference between the amount actually levied and the allowable primary property tax levy shall be set aside in a special fund and used to reduce the primary property taxes levied in the following year.

B. If, after a hearing under section 42-17004, it is impossible for the board of supervisors to correct a property tax levy in the current year, the political subdivision shall hold the difference between the amount the political subdivision actually levied and the allowable primary property tax levy prescribed by the commission in a separate fund to be used to reduce the primary property taxes levied by the political subdivision in the following year.

C. If the commission discovers that it has made an error in computing the levy limit after September 15, it shall notify the political subdivision's governing body about the error. The error shall be corrected as prescribed in subsection A of this section. If the error results in the maximum allowable primary property tax levy being raised, the corrected maximum allowable primary property tax levy shall be used in section 42-17051, subsection A, paragraph 1 in determining the following year's levy limit.

D. If, on appeal under section 42-17004, subsection D, the ruling of the court provides for a primary property tax levy in an amount that is less than the amount levied by the political subdivision, the political subdivision shall hold the difference between the amounts in a separate fund to be used to reduce the primary property taxes levied by the political subdivision in the following year.

Sec. 6. Section 42-17104, Arizona Revised Statutes, is amended to read:

42-17104. Hearing and special meeting on expenditures and tax levy

A. The governing body of each county, city or town shall hold a public hearing and special meeting on or before the ~~seventh~~ FOURTEENTH day before the day on which it levies taxes as stated in the notice under section 42-17103. Any taxpayer may appear and be heard in favor of or against any proposed expenditure or tax levy.

B. If a truth in taxation notice and hearing is required under section 42-17107, the governing body may combine the hearing under this section with the truth in taxation hearing.

Sec. 7. Section 42-17107, Arizona Revised Statutes, is amended to read:

42-17107. Truth in taxation notice and hearing; roll call vote on tax increase; definition

A. On or before July 1, the county assessor shall transmit to the county, city or town an estimate of the total net assessed valuation of the county, city or town, including an estimate of new property that has been added to the tax roll since the previous levy of property taxes in the county, city or town. If the proposed primary property tax levy, excluding amounts that are attributable to new construction, is greater than the amount levied by the county, city or town in the preceding tax year in the county, city or town:

1. The governing body shall publish a notice that meets the following requirements:

(a) The notice shall be published twice in a newspaper of general circulation in the county, city or town. The first publication shall be at least fourteen but not more than twenty days before the date of the hearing. The second publication shall be at least seven but not more than ten days before the date of the hearing.

(b) The notice shall be published in a location other than the classified or legal advertising section of the newspaper in which it is published.

(c) The notice shall be at least one-fourth page in size and shall be surrounded by a solid black border at least one-eighth inch in width.

(d) The notice shall be in the following form, with the "truth in taxation hearing - notice of tax increase" headline in at least eighteen point type:

Truth in Taxation Hearing

Notice of Tax Increase

In compliance with section 42-17107, Arizona Revised Statutes, __________ (name of county, city or town) is notifying its property taxpayers of __________'s (name of county, city or town) intention to raise its primary property taxes over last year's level. __________ (name of county, city or town) is proposing an increase in primary property taxes of $__________ or _____%.

For example, the proposed tax increase will cause __________'s (name of county, city or town) primary property taxes on a $100,000 home to increase from $__________ (total taxes that would be owed without the proposed tax increase) to $__________ (total proposed taxes including the tax increase).

All interested citizens are invited to attend the public hearing on the tax increase that is scheduled to be held __________ (date and time) at __________ (location).

2. In lieu of publishing the truth in taxation notice, the governing body may mail the truth in taxation notice prescribed by paragraph 1, subdivision (d) to all registered voters in the county, city or town at least ten but not more than twenty days before the date of the hearing on the estimates pursuant to section 42-17104.

3. In addition to publishing the truth in taxation notice under paragraph 1 or mailing the notice under paragraph 2, the governing body shall issue a press release containing the truth in taxation notice.

4. The governing body shall consider a motion to levy the increased property taxes by roll call vote.

5. Within three days after the hearing, the governing body shall mail a copy of the truth in taxation notice, a statement of its publication or mailing and the result of the governing body's vote under paragraph 4 to the property tax oversight commission.

6. The governing body shall hold the truth in taxation hearing on or before the adoption of the county, city or town budget under section 42-17105.

B. EXCLUDING AMOUNTS ATTRIBUTABLE TO NEW CONSTRUCTION, THE GOVERNING BODY OF A COUNTY, CITY OR TOWN SHALL NOT FIX, LEVY OR ASSESS AN AMOUNT OF PRIMARY PROPERTY TAXES THAT EXCEEDS THE PREVIOUS YEAR'S AMOUNT UNLESS THE PROVISIONS OF THIS SECTION ARE MET.

B. C. For purposes of this section, "amount attributable to new construction" means the net assessed valuation of property added to the tax roll since the previous year multiplied by a property tax rate computed by dividing the primary property tax levy of the county, city or town in the preceding year by the estimate of the total net assessed valuation of the county, city or town for the current year, excluding the net assessed valuation attributable to new construction.