ARIZONA STATE SENATE
Phoenix, Arizona
street lighting districts;
annexation
Purpose
Establishes a procedure for
the transfer of a street lighting district to an electric power provider and
establishes a procedure for merging two or more street lighting districts.
Background
Special taxing districts are
usually created to fill a need to enable services to be provided in an area
that might otherwise be limited from receiving these services. 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 directly benefiting from that service. Most special taxing districts are funded by
ad valorem taxes levied on all real property within the district limits. A special taxing district levy is a
secondary levy and is based on the full cash valuation of the property.
State statute allows for an
improvement district to be formed for the sole purpose of purchasing, but not
generating, energy for the lighting of the public streets and parks of the
improvement district. Recently, some
districts have expressed a need to allow the merger between two districts in an
attempt to better serve the needs of the residents. Currently, there is no statutory process to merge these two
districts. Additionally, some utility
companies have expressed interest in having all or a portion of the improvement
district transferred to the local provider of electric power. This legislation
provides a process for both merging two districts and for transferring control
to a local provider.
There is no fiscal impact to
the state general fund associated with this legislation.
Provisions
1. Authorizes the transfer of all or any portion of a county improvement district that is organized for purchasing energy for the lighting of public streets and parks to the local provider of electric power.
2. Requires the board of directors to hold a hearing on the question of transferring authority to the local electric power provider. Notice must be published 30 days prior to the hearing.
3. Allows the board of directors to authorize, by resolution, the transfer if the board finds that a transfer of authority would benefit the public.
4. Requires the board of directors to allow any property owner who objects to the transfer of authority to pay for that owner's share of the fixed cost of the street lighting expense, if that amount is less than $100,000, and requires the property owner to pay the amount to the electric power provider.
5. Prohibits the electric power provider from charging the property owner for any of the fixed costs.
6. Allows the electric power provider to charge the property owner for ongoing use of electric power.
7. Allows the electric power provider to charge fees to those properties that were transferred from the district, upon completion of the transfer of authority.
8. Authorizes two or more county improvement districts that are organized for purchasing energy for lighting public streets and parks to merge into a single district.
9. Requires the board of directors of each district to hold a hearing before September 1 of the year before the beginning of the fiscal year in which the merger is to occur. Notice must be published containing an impact statement.
10. Details impact statement requirements.
11. Limits the new merged district to a tax rate that is no more than three percent more than the lowest tax rate for any property in the proposed merged district, if the difference in tax rates between the two existing districts is more than 15 percent.
12. Requires any shortage of revenue for the merged district to be carried forward to the next tax year if the limited tax rate results in a shortage.
13. Allows the tax rate to be increased up to three percent annually.
14. Adds planned community associations to the list of those entities that may assume control over a street lighting district.
15. Requires counties to notify the city, town or planned community association that has assumed jurisdiction of the taxing district boundaries and the Department of Revenue of any special taxing districts that have been fully or partially annexed by a city or town, or that have been assumed by a planned community association.
16. Requires this notification to occur by November 1 of the year proceeding the year in which assessments or taxes are to be levied.
17. Requires the annual estimates of the expenses of the district, furnished by the county board of supervisors, to take into account any deficit or surplus from the preceding year or years, plus 15 percent for delinquencies.
18. Requires cities, towns and planned community associations to operate and fund the entire, or a portion of the, improvement district if the city or town annexes the district or the planned community association takes responsibility for the district.
19. Requires the board of directors to transfer any monies remaining in the accounts of the improvement district for the operation of that street lighting to the responsible city, town or planned community association.
20. Allows cities and towns to continue to levy assessments for any street lighting district that is formed and that is fully or partially annexed by a city or town and requires the city or town to operate the improvement district.
21. Provides for a general effective date.
Prepared by Senate Staff
January 17, 2002