Format Document

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

Section 1. Section 9-121, Arizona Revised Statutes, is amended to read:

START_STATUTE9-121. Consolidation of towns

A. When the common councils of two incorporated towns having a common boundary and located in a county having a population of less than one hundred fifty thousand persons each pass a resolution requesting an election for the purpose of consolidating the two towns into one incorporated town, the board of supervisors of the county shall, within sixty days after certified copies of the resolutions of the two towns are filed with the clerk of the board of supervisors, adopt a resolution calling an election upon the question of the consolidation, and the question of the name of the new proposed town, which election shall be held on a date prescribed by section 16‑204 but not more than one hundred eighty days after the county resolution is filed. The resolution shall set forth the following:

1. The date on which the election is to be held.

2. The places where votes may be cast, and at least one place shall be designated within the corporate limits of each of the two towns.

3. The hours between which the polling places will be open.

4. The name of the proposed consolidated town listing two to four choices.

B. The election resolution shall be published in full at least once, not less than fifteen nor more than thirty days prior to the date of the election in a newspaper published in the county. If there is no such newspaper, the resolution shall be posted in five conspicuous places in each of the municipalities not less than fifteen nor more than thirty days prior to the date of the election.

C. At the election, the ballot shall contain and may be limited to the following:

1. The phrases "for the consolidation" and "against the consolidation". To the right of and opposite each phrase shall be placed a square approximately the size of squares placed opposite the names of candidates on ballots. The voter shall indicate his vote for the consolidation or against the consolidation by inserting the mark "X" in the square opposite the appropriate phrase. No other question, word nor figure need be printed on the ballot. The ballot need not be any particular size nor need sample ballots be printed, posted or distributed.

2. The phrase "if consolidation is approved, choose one of the following as the name of the new proposed town." To the right of and opposite each suggested name shall be placed a square approximately the size of squares placed opposite the names of candidates on ballots. The voter shall indicate the vote for the name of the new proposed town by inserting the mark "X" in one square only opposite the name chosen.

D. Only qualified electors of the towns shall vote on the question. If a majority of the qualified electors voting thereon, in each incorporated town, votes for consolidation, then the board of supervisors shall by an order entered of record by the board declare the two incorporated towns consolidated into one incorporated town, and the order of the board shall designate the name of the town, which shall be the name chosen by the most voters in the election as set forth in the resolution calling the election.

E. Except as otherwise provided in this article, the manner of conducting the registration and election, keeping the poll lists, making the returns, declaring the results and doing all acts relating to the election shall conform to the procedure provided by law for the registration and qualification of electors and holding special elections wherein the question of issuance of bonds of municipal corporations is submitted to an election.

F. The first common council for the new town shall be appointed by the board of supervisors in the manner provided in section 9‑231, for towns newly incorporated.

G. The incorporated limits of the new town shall be the combined corporate limits of the two former incorporated towns at the time of the election. The ordinances and resolutions of the former towns shall continue in force unless repealed or changed by the new common council. In case of conflict between ordinances or resolutions, the ordinance or resolution of the former town having the largest population at the last federal decennial census shall prevail. The new town shall be liable for all debts and liabilities of the two former towns, and shall be entitled to receive all property and rights of action belonging to the former towns.

H. Towns incorporated pursuant to the provisions of this article shall have all powers, duties, rights and privileges granted to incorporated towns under the laws and constitution of the state of Arizona. END_STATUTE

Sec. 2. Section 9-122, Arizona Revised Statutes, is amended to read:

START_STATUTE9-122. Unification of a city and a town

A. If the common council of a city and the common council of a town whose boundaries are within five miles of each other at one or more points pass a resolution requesting an election for the purpose of unifying the city and the town into one incorporated city, and a petition is received from the unincorporated areas which that separate the city or town boundaries or are contiguous to the boundaries and is signed by at least ten per cent of the qualified electors in such unincorporated area, within sixty days, the board of supervisors of the county shall adopt a resolution calling an election on the question of the unification and the question of the name of the new proposed city. The election shall be held on a date prescribed by section 16‑204 but not more than one hundred eighty days after the county resolution is filed. The resolution shall set forth the following:

1. The date on which the election is to be held.

2. The places where votes may be cast. At least one place shall be designated within the corporate limits of the city and the town and the unincorporated area proposing the unification.

3. The hours between which the polling places will be open.

4. The name of the proposed unified city.

B. The election resolution shall be published in full at least once, not less than thirty nor more than sixty days before the date of the election, in a newspaper published in the county. If there is no such newspaper, the resolution shall be posted in five conspicuous places in each of the municipalities and the affected unincorporated areas not less than thirty nor more than sixty days before the date of the election.

C. At the election, the ballot shall contain and may be limited to the phrases "for the unification" and "against the unification". A square approximately the size of the squares placed opposite the names of candidates on ballots shall be placed to the right of and opposite each phrase. A voter shall indicate a vote for the unification or against the unification by marking the ballot pursuant to the ballot instructions. The ballot is not required to be any particular size, and sample ballots are not required.

D. Only qualified electors of the city, the town and the unincorporated areas shall vote on the question. If a majority of the qualified electors voting on the question in each area votes for unification, the board of supervisors shall declare by an order entered of record the city, town and unincorporated areas unified into one incorporated city. The order of the board shall designate the name of the city.

E. Except as otherwise provided in this article, the manner of conducting the registration and election, keeping the poll lists, making the returns, declaring the results and doing all acts relating to the election shall conform to the procedure provided by law for the registration and qualification of electors and holding special elections in which the question of issuance of bonds of municipal corporations is submitted to an election.

F. The board of supervisors shall appoint the first common council for the new city. The board of supervisors shall appoint seven members at least two of whom shall be from each of the three areas unified. Following appointment, the council shall designate one of its members to serve as mayor. At the earliest possible date following the formation of the new city, the new city shall be divided by the appointed council into six districts, and an election shall be called to fill the six council districts and elect at large a directly elected mayor. The mayor and council members shall serve four year staggered terms. At the first election, the three council members with the highest vote shall serve four year terms and the three other council members elected shall serve two year terms in order to accomplish staggered terms for future elections.

G. The incorporated limits of the new city shall be those shown on the resolutions from the incorporated city and town and shall be their combined corporate limits plus the unincorporated areas that appear on the petition submitted pursuant to subsection A of this section and that are between or adjacent to the city and the town. In no event shall any such petition include land or improvements utilized for mining, metallurgical or related environmental remediation purposes without written consent of the landowner. The ordinances and resolutions of the former city, town and county shall continue in force unless repealed or changed by the new common council, including franchises and transaction privilege taxes. In the case of conflict between ordinances or resolutions, the ordinances or resolutions of the former city or town with the larger population shall prevail, except that zoning regulations applying to property at the time of unification shall remain in effect until the council of the new unified city adopts a zoning ordinance applying to the property. The new city shall be liable for all debts and liabilities of the former city and town and shall be entitled to receive all property and rights of action belonging to the former city and town.

H. A city incorporated pursuant to this article section has all powers, duties, rights and privileges granted to incorporated cities and towns under the laws and constitution of this state. For purposes of state shared revenues, including state sales transaction privilege tax, state income tax, vehicle license taxes, highway user revenues and local transportation assistance fund monies, a combined amount which that would have been distributed to the former town and city unified shall be distributed to the new city until a combined census count including the unincorporated areas can be obtained. Once the combined census count is obtained, the updated census count shall be used for the distribution of the state shared revenues retroactive to the first of the month following unification. The annual population estimate of the unified city prepared by the department of economic security shall be used for distribution of local transportation assistance fund monies.

I. The unified city shall have a property tax levy limit calculated as the combined maximum allowable levy limit of the town and city unless another levy limit is approved by the voters of the unified city at a regularly scheduled election. The expenditure limit of the unified city shall be the alternative expenditure limitation of the largest city until the fiscal year following the unified city's first general election. At such election, the council may propose an alternative expenditure limitation or permanent base adjustment and if not approved the unified city's expenditure limitation shall be calculated using the formula provided for a newly incorporated city unless subsequently changed by the voters. END_STATUTE

Sec. 3. Section 9-524, Arizona Revised Statutes, is amended to read:

START_STATUTE9-524. Election order and call; publication; posting

A. The governing body shall order and call an election upon the question of the issuance of bonds. The order and call shall state in substance:

1. The maximum amount of bonds to be issued.

2. The purpose for which the bonds are to be issued.

3. The maximum rate of interest which the bonds are to bear.

4. A brief concise statement, which need not include any detail other than the mere statement of the fact, showing that the bonds will be payable solely from revenues unless the bonds are to be tax secured bonds in which case the order and call shall state in substance that the bonds shall be payable from revenues and shall additionally be payable from taxes levied upon all taxable property in the municipality.

5. The date on which the election is to be held as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

6. The places where votes may be cast.

7. The hours between which polling places will be open.

B. The order and call of election shall be published in full at least once, not less than fifteen nor more than thirty days prior to the date of the election, in a newspaper published in the county and of general circulation in the municipality. If there is no such newspaper, the order and call shall be printed in full and posted in five conspicuous places in the municipality not less than fifteen nor more than thirty days prior to the date of the election.

C. If the bonds are to be tax secured bonds, the order and call of election shall state, in addition to the requirements of subsection A of this section, the matters required by title 35, chapter 3, article 3 and shall be posted and published as required by that article rather than as provided in subsection B of this section. END_STATUTE

Sec. 4. Section 9-528, Arizona Revised Statutes, is amended to read:

START_STATUTE9-528. Application of election laws

Except as otherwise provided in this article, the manner of conducting the registration and election, keeping the poll lists, making the returns, declaring the results and doing all acts relating to the election shall conform to the procedure provided by law for the registration and qualification of electors and holding special elections wherein the question of issuance of bonds of municipal corporations is submitted to an election. END_STATUTE

Sec. 5. Section 9-571, Arizona Revised Statutes, as amended by Laws 2006, chapter 239, section 2, is amended to read:

START_STATUTE9-571. Wastewater treatment and drinking water treatment facilities and nonpoint source projects; financial assistance loan repayment agreements; definitions

A. Notwithstanding any other law, a city or town may construct, acquire from a willing seller or improve a wastewater treatment facility, drinking water facility or nonpoint source project with monies borrowed from or financial assistance including forgivable principal provided by the water infrastructure finance authority of Arizona.

B. To repay financial assistance from the water infrastructure finance authority of Arizona a city or town may enter into a financial assistance loan repayment agreement with the authority. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be used to repay long‑term obligations. If revenue from a property tax assessment is the designated source of repayment under the agreement, the property tax assessed and levied is a secondary property tax levy for purposes of article IX, Constitution of Arizona.

C. For any city or town with a population of more than fifty thousand persons, the governing body of the city or town shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors voting at a regular or special election in the city or town, except that if revenue from a secondary property tax levy is the designated source of repayment or if the project is constructed with an improvement district, the question shall be submitted to the qualified electors at an election held on the first Tuesday following the first Monday in November. For a city or town with a population of fifty thousand persons or less, the revenues of the city's or town's utility system or systems may be pledged to the payment of the repayment agreement without an election, if the pledge of revenues does not violate any covenant pertaining to the utility system or systems or the revenues pledged to secure outstanding bonds or other obligations of the city or town. An election is not required if voter approval has previously been obtained for substantially the same project with another funding source or if the project is constructed with an improvement district. If a majority of the qualified electors voting on the question:

1. Approves, the governing body may execute, deliver and perform the financial assistance loan repayment agreement.

2. Disapproves, the governing body shall not execute a financial assistance loan repayment agreement.

D. Payments made pursuant to a financial assistance loan repayment agreement are not subject to section 42‑17106.

E. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction, acquisition or improvement of a wastewater treatment or drinking water facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the city's or town's proportionate share of the expenses of administering the clean water and drinking water revolving funds established by sections 49‑1221 and 49‑1241 and may provide that the city or town pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the financial assistance. Cities and towns are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The city or town shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

F. A financial assistance loan repayment agreement under this section does not create a debt of the city or town, and the authority shall not require that payment of a financial assistance loan repayment agreement be made from other than those sources permitted in subsection B of this section and as prescribed by sections 49‑1225 and 49‑1245.

G. A city or town may employ attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the financial assistance loan repayment agreement.

H. This section is supplemental and alternative to any other law under which a city or town may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

I. A city or town may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved by the voters pursuant to subsection C of this section less the amount that the city or town is already obligated to repay to the water infrastructure finance authority pursuant to a financial assistance loan repayment agreement.

J. For the purposes of this section:

1. "City" includes both cities formed pursuant to this title and charter cities.

2. "Nonpoint source project" has the same meaning prescribed in section 49‑1201. END_STATUTE

Sec. 6. Section 9-824, Arizona Revised Statutes, is amended to read:

START_STATUTE9-824. Registration for elections

A. In special elections where the question of issuing bonds of the municipal corporation is submitted to the qualified electors thereof, who are the owners of real property subject to taxation within the municipal corporation, the governing body may by resolution may require a registration of all persons to vote at the special elections, who possess such qualifications. The resolution shall be passed at least thirty days prior to holding the election, and the registration shall begin at least thirty days before and close ten days prior to holding the election, and no person shall be permitted to vote unless the real property of the person offering to vote which is subject to taxation within the corporation appears on the last assessment or tax roll of the municipal corporation.

B. The assessor or tax collector of the corporation shall enter on the assessment or tax roll the property of persons owning real property subject to taxation within the corporation at any time prior to the day on which the election is held upon application of such persons. END_STATUTE

Sec. 7. Section 11-269.02, Arizona Revised Statutes, is amended to read:

START_STATUTE11-269.02. Public facilities; voter approval; exemptions

A. Notwithstanding any other law, a county with a population of more than one million five hundred thousand persons according to the most recent United States decennial census shall not spend public monies, grant tax concessions or relief, incur debt or exchange property in any combined amount or value totaling more than three million dollars to construct or aid in the construction of an amphitheater, a sports facility, arena or complex or a convention facility, arena or complex without presenting the proposed expenditure to the qualifying qualified electors of the county with a population of more than one million five hundred thousand persons according to the most recent United States decennial census and approval of the expenditure by a majority of those voting in the election. If revenue from a secondary property tax levy is the designated source of payment or if the project is constructed with an improvement district, the question shall be submitted to the qualified electors at an election held on the first Tuesday following the first Monday in November.

B. This section does not apply to an expenditure for a park, parkway, trail, recreational area or playground that is established, maintained or administered by a county with a population of more than one million five hundred thousand persons according to the most recent United States decennial census and that was not developed primarily for the commercial use of a private enterprise or collection of private enterprises. END_STATUTE

Sec. 8. Section 11-671, Arizona Revised Statutes, is amended to read:

START_STATUTE11-671. Financing wastewater treatment facilities and nonpoint source projects; financial assistance loan repayment agreements; definition

A. Notwithstanding any other law, a county authorized to operate a sewage system pursuant to section 11‑264 may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona.

B. To repay financial assistance from the water infrastructure finance authority of Arizona a county may enter into a financial assistance loan repayment agreement with the authority. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long‑term obligations. If revenue from a property tax assessment is the designated source of repayment under the agreement, the property tax assessed and levied is a secondary property tax levy for purposes of article IX, Constitution of Arizona.

C. The county board of supervisors shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors voting at a regular or special general election in the county, except that if revenue from a secondary property tax levy is the designated source of repayment or if the project is constructed with an improvement district, the question shall be submitted to the qualified electors at an election held on the first Tuesday following the first Monday in November. Otherwise, an election is not required if voter approval has previously been obtained for substantially the same project with another funding source. If a majority of the qualified electors voting on the question:

1. Approves, the board of supervisors may execute, deliver and perform the financial assistance loan repayment agreement.

2. Disapproves, the board of supervisors shall not execute a financial assistance loan repayment agreement.

D. Payments made pursuant to a financial assistance loan repayment agreement are not subject to section 42‑17106.

E. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the county's proportionate share of the expenses of administering the clean water revolving fund established by section 49‑1221 and may provide that the county pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the financial assistance. Counties are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The county shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

F. A financial assistance loan repayment agreement under this section does not create a debt of the county, and the authority shall not require that payment of a financial assistance loan agreement be made from other than those sources permitted in subsection B of this section.

G. A county may employ attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the financial assistance loan repayment agreement.

H. This section is supplemental and alternative to any other law under which a county may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

I. A county may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved by the voters pursuant to subsection C of this section less the amount that the county is already obligated to repay to the water infrastructure finance authority pursuant to a financial assistance loan repayment agreement.

J. For purposes of this section, "nonpoint source project" has the same meaning as prescribed in section 49‑1201. END_STATUTE

Sec. 9. Section 15-365, Arizona Revised Statutes, is amended to read:

START_STATUTE15-365. Service programs operated through the office of a county school superintendent; reports; definitions

A. The county school superintendent may establish service programs which shall be available to any local school district governing board officially requesting such programs.

B. Both central administrative costs and general service costs shall be shared on a user basis and budgeted and paid as contract costs by the districts using such programs, except as provided in subsections E, F and H of this section.

C. Agreements or contracts entered into pursuant to this section shall not be subject to the provisions of title 11, chapter 7, article 3 relating to intergovernmental agreements and contracts.

D. Each county school superintendent shall submit to the school districts involved and to the board of supervisors no later than May 31 of each year a program progress report and a fiscal report including actual expenditures through March 31 and estimates for the remainder of the fiscal year on each service program in operation in such county.

E. County school superintendents may establish special small district service programs designed to meet the special needs of school districts with a total student count of fewer than six hundred in such areas as administrative assistance and specialized services as follows:

1. For counties with seven or more school districts with a student count of fewer than six hundred, the small district service program may serve a single county or two or more counties.

2. Except as provided in subsection I of this section, for counties with fewer than seven school districts with a student count of fewer than six hundred, the small district service program shall serve two or more counties as determined by the superintendent of public instruction.

F. The costs of the small district service program are payable in part from the small district service program fund. Costs in excess of the amount available in the small district service program fund shall be shared on a user basis and budgeted and paid as contract costs by the district using such programs. The small district service program fund for each program shall consist of a base amount plus a per district amount for each school district in the county or counties served which has a student count of fewer than six hundred. For fiscal year 1989‑1990, the base amount is fifty‑six thousand four hundred ninety‑four dollars and the per district amount is five thousand eighty‑four dollars. Beginning with fiscal year 1990‑1991, the base amount and per district amount are the amounts for the prior year adjusted by the growth rate prescribed by law, subject to appropriation. The county treasurer shall pay the appropriate amount into the small district service program fund from monies collected from the tax levy for county equalization assistance for education as provided in section 15‑994 before the monies that are used to provide equalization assistance for education as provided in section 15‑971, subsection C, except that for small district service programs which serve two or more counties payment into the fund shall be as provided in subsection H of this section.

G. School districts which provide only financing for pupils who are instructed by another district shall be included in determining the number of districts counted for the small district service program fund.

H. For each small district service program which serves two or more counties, a county of jurisdiction shall be selected by the superintendent of public instruction. Payment shall be made into the small district service program fund in the county of jurisdiction from monies collected from the tax levy for county equalization assistance for education as provided in section 15‑994 before the monies that are used to provide equalization assistance for education as provided in section 15‑994 15-971, subsection C by each county participating in the small district service program as follows:

1. The county treasurer of each county which is not the county of jurisdiction shall pay to the county of jurisdiction an amount determined as follows:

(a) Determine the total amount of the small district service program fund as provided in subsection F of this section.

(b) Determine the total number of school districts with a student count of fewer than six hundred in all counties served by the small district service program.

(c) Divide the amount determined in subdivision (a) of this paragraph by the amount determined in subdivision (b) of this paragraph.

(d) Multiply the number of school districts with a student count of fewer than six hundred in each county by the amount determined in subdivision (c) of this paragraph.

(e) The product determined in subdivision (d) of this paragraph is the amount which shall be paid to the county of jurisdiction.

2. The county treasurer of the county of jurisdiction shall deposit the monies received from the other counties as provided in paragraph 1 of this subsection into the small district service program fund and shall also pay into the fund an amount equal to the quotient obtained in paragraph 1, subdivision (c) of this subsection multiplied by the number of school districts with a student count of fewer than six hundred in the county of jurisdiction.

I. If a small district service program is established before fiscal year 1987‑1988, the program may continue to operate as a single county program if the county contains fewer than seven, but at least four, school districts with a student count of fewer than six hundred.

J. A school district with a student count of six hundred or more in the current year which participated in a small district service program and which had a student count of fewer than six hundred in the prior year may continue to participate in the program for the current year and one additional year. The amount in the small district service program fund shall be determined as if the district had a student count of fewer than six hundred.

K. In this section, unless the context otherwise requires:

1. "Central administrative costs" means only those costs which are incurred by the county school superintendent in administering any service program which benefits all the school districts in the program and which are shared on a user basis and budgeted and paid as contract costs by districts, except as provided in subsections E, F and H of this section.

2. "General service costs" means those costs which are directly related to each of the service programs, which are shared on a user basis and which are budgeted and paid as contract costs by districts, except as provided in subsections E, F and H of this section.

3. "Service programs" means those programs which can be accomplished more efficiently and economically as multidistrict or multicounty operations.

4. "Student count" means the student count as defined in section 15‑901, subsection A, except that it shall not include pupils enrolled in grades nine through twelve to whom the district does not provide instruction if the district is a common school district which is not within a high school district. END_STATUTE

Sec. 10. Section 15-393, Arizona Revised Statutes, is amended to read:

START_STATUTE15-393. Joint technological education district governing board; definition

A. The management and control of the joint district are vested in the joint technological education district governing board. Unless the governing boards of the school districts participating in the formation of the joint district vote to implement an alternative election system as provided in subsection B of this section, the joint board shall consist of five members elected from five single member districts formed within the joint district. The single member district election system shall be submitted as part of the plan for the joint district pursuant to section 15‑392 and shall be established in the plan as follows:

1. The governing boards of the school districts participating in the formation of the joint district shall define the boundaries of the single member districts so that the single member districts are as nearly equal in population as is practicable, except that if the joint district lies in part in each of two or more counties, at least one single member district may be entirely within each of the counties comprising the joint district if this district design is consistent with the obligation to equalize the population among single member districts.

2. The boundaries of each single member district shall follow election precinct boundary lines, as far as practicable, in order to avoid further segmentation of the precincts.

3. A person who is a registered voter of this state and who is a resident of the single member district is eligible for election to the office of joint board member from the single member district. The terms of office of the members of the joint board shall be as prescribed in section 15‑427, subsection B.

4. Nominating petitions shall be signed by the number of qualified electors of the single member district as provided in section 16‑322.

B. The governing boards of the school districts participating in the formation of the joint district may vote to implement any other alternative election system for the election of joint district board members. If an alternative election system is selected, it shall be submitted as part of the plan for the joint district pursuant to section 15‑392, and the implementation of the system shall be as approved by the United States justice department.

C. The joint technological education district shall be subject to the following provisions of this title:

1. Chapter 1, articles 1 through 6.

2. Sections 15‑208, 15‑210, 15‑213 and 15‑234.

3. Articles 2, 3 and 5 of this chapter.

4. Section 15‑361.

5. Chapter 4, articles 1, 2 and 5.

6. Chapter 5, articles 1, 2 and 3.

7. Sections 15‑701.01, 15‑722, 15‑723, 15‑724, 15‑727, 15‑728, 15‑729 and 15‑730.

8. Chapter 7, article 5.

9. Chapter 8, articles 1, 3 and 4.

10. Sections 15‑828 and 15‑829.

11. Chapter 9, articles 1, 6 and 7.

12. Sections 15‑941, 15‑943.01, 15‑948, 15‑952, 15‑953 and 15‑973.

13. Sections 15‑1101 and 15‑1104.

14. Chapter 10, articles 2, 3, 4 and 8.

D. Notwithstanding subsection C of this section, the following apply to a joint technological education district:

1. A joint district may issue bonds for the purposes specified in section 15‑1021 and in chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding one per cent of the taxable property used for secondary tax purposes, as determined pursuant to title 42, chapter 15, article 1, within the joint technological education district as ascertained by the last property tax assessment previous to issuing the bonds.

2. The number of governing board members for a joint district shall be as prescribed in subsection A of this section.

3. If a career and technical education and vocational education course or program provided pursuant to this article is provided in a facility owned or operated by a school district in which a pupil is enrolled, including satellite courses, the sum of the daily attendance, as provided in section 15‑901, subsection A, paragraph 6, for that pupil in both the school district and joint technological education district shall not exceed 1.250 and the sum of the fractional student enrollment, as provided in section 15‑901, subsection A, paragraph 2, subdivision (a), shall not exceed 1.250 for the courses taken in the school district and the facility, including satellite courses. The school district and the joint district shall determine the apportionment of the daily attendance and fractional student enrollment for that pupil between the school district and the joint district.

4. The student count for the first year of operation of a joint technological education district as provided in this article shall be determined as follows:

(a) Determine the estimated student count for joint district classes that will operate in the first year of operation. This estimate shall be based on actual registration of pupils as of March 30 scheduled to attend classes that will be operated by the joint district. The student count for the district of residence of the pupils registered at the joint district shall be adjusted. The adjustment shall cause the district of residence to reduce the student count for the pupil to reflect the courses to be taken at the joint district. The district of residence shall review and approve the adjustment of its own student count as provided in this subdivision before the pupils from the school district can be added to the student count of the joint district.

(b) The student count for the new joint district shall be the student count as determined in subdivision (a) of this paragraph.

(c) After the first one hundred days or two hundred days in session, as applicable, for the first year of operation, the joint district shall revise the student count to the actual student count for students attending classes in the joint district. A joint district shall revise its student count, the base support level as provided in section 15‑943.02, the revenue control limit as provided in section 15‑944.01, the capital outlay revenue limit and the soft capital allocation as provided in section 15‑962.01 prior to May 15. A joint district that overestimated its student count shall revise its budget prior to May 15. A joint district that underestimated its student count may revise its budget prior to May 15.

(d) After the first one hundred days or two hundred days in session, as applicable, for the first year of operation, the district of residence shall adjust its student count by reducing it to reflect the courses actually taken at the joint district. The district of residence shall revise its student count, the base support level as provided in section 15‑943, the revenue control limit as provided in section 15‑944, the capital outlay revenue limit as provided in section 15‑961 and the soft capital allocation as provided in section 15‑962 prior to May 15. A district that underestimated the student count for students attending the joint district shall revise its budget prior to May 15. A district that overestimated the student count for students attending the joint district may revise its budget prior to May 15.

(e) A joint district for the first year of operation shall not be eligible for adjustment pursuant to section 15‑948.

(f) The procedures for implementing this paragraph shall be as prescribed in the uniform system of financial records.

(g) If the district of residence utilizes section 15‑942 to determine its student count, the district shall reduce its student count as provided in this paragraph by subtracting the appropriate count from the student count determined as provided in section 15‑942.

For the purposes of this paragraph, "district of residence" means the district that included the pupil in its average daily membership for the year before the first year of operation of the joint district and that would have included the pupil in its student count for the purposes of computing its base support level for the fiscal year of the first year of operation of the joint district if the pupil had not enrolled in the joint district.

5. A student includes any person enrolled in the joint district without regard to the person's age or high school graduation status, except that:

(a) A student in a kindergarten program or in grades one through eight who enrolls in courses offered by the joint technological education district shall not be included in the joint district's average daily attendance or average daily membership.

(b) A student in a kindergarten program or in grades one through six who is enrolled in vocational education courses shall not be funded in whole or in part with monies provided by a joint technological education district.

(c) A student who is over twenty‑two years of age shall not be included in the student count of the joint district for the purposes of chapter 9, articles 3, 4 and 5 of this title.

6. A joint district may operate for more than one hundred seventy‑five days per year, with expanded hours of service.

7. A joint district may use the excess utility costs provisions of section 15‑910 in the same manner as a school district for fiscal years 1999‑2000 and 2000‑2001, except that the base year shall be the first full fiscal year of operations.

8. A joint district may use the carryforward provisions of section 15‑943.01 retroactively to July 1, 1993.

9. A school district that is part of a joint district shall use any monies received pursuant to this article to supplement and not supplant base year career and technical education and vocational education courses, and directly related equipment and facilities, except that a school district that is part of a joint technological education district and that has used monies received pursuant to this article to supplant career and technological education and vocational education courses that were offered before the first year that the school district participated in the joint district or the first year that the school district used monies received pursuant to this article or that used the monies for purposes other than for career and technological education and vocational education courses shall:

(a) Use at least thirty‑three per cent of the monies received pursuant to this article in fiscal year 2005‑2006 to supplement and not supplant base year career and technical education and vocational education courses.

(b) Use at least sixty‑six per cent of the monies received pursuant to this article in fiscal year 2006‑2007 to supplement and not supplant base year career and technical education and vocational education courses.

(c) Use one hundred per cent of the monies received pursuant to this article in fiscal year 2007‑2008 and each fiscal year thereafter to supplement and not supplant base year career and technical education and vocational education courses.

10. A joint technological education district shall use any monies received pursuant to this article to enhance career and technical education and vocational education courses, and directly related equipment and facilities.

11. A joint technological education district or a school district that is part of a joint district shall only include pupils in grades nine through twelve in the calculation of average daily membership or average daily attendance if the pupils are enrolled in courses that are approved jointly by the governing board of the joint technological education district and each participating school district for satellite courses taught within the participating school district, or approved solely by the joint technological education district for centrally located courses. Average daily membership and average daily attendance from courses that are not part of an approved program for career and technical education shall not be included in average daily membership and average daily attendance of a joint technological education district.

E. The joint board shall appoint a superintendent as the executive officer of the joint district.

F. Taxes may be levied for the support of the joint district as prescribed in chapter 9, article 6 of this title. Except for the taxes levied pursuant to section 15‑994, such taxes shall be obtained from a levy of taxes on the taxable property used for secondary tax purposes.

G. The schools in the joint district are available to all persons who reside in the joint district subject to the rules for admission prescribed by the joint board.

H. The joint board may collect tuition for adult students and the attendance of pupils who are residents of school districts that are not participating in the joint district pursuant to arrangements made between the governing board of the district and the joint board.

I. The joint board may accept gifts, grants, federal monies, tuition and other allocations of monies to erect, repair and equip buildings and for the cost of operation of the schools of the joint district.

J. One member of the joint board shall be selected chairman. The chairman shall be selected annually on a rotation basis from among the participating school districts. The chairman of the joint board shall be a voting member.

K. A joint board and a community college district may enter into agreements for the provision of administrative, operational and educational services and facilities.

L. For the purposes of this section, "base year" means the complete school year in which voters of a school district elected to join a joint technological education district. END_STATUTE

Sec. 11. Section 15-403, Arizona Revised Statutes, is amended to read:

START_STATUTE15-403. Elections; notice; bond election procedure; qualifications of voters; closing of registrations; election precincts; polling places

A. The county school superintendent shall cause notices of a special election except a bond election to be posted at least ninety days previous to the date of the election. The notices shall be posted in at least three public places in the school district. One notice shall be posted at the school if there is one. Bond election notices and procedures shall comply with the requirements of title 35, chapter 3, article 3.

B. The notices shall specify the day and the polling places of the special election and the time the polls will be open. A special election or a bond election may be held only on a date prescribed by section 16‑204.

C. If the county school superintendent fails to give notice as provided in subsections A and B of this section, any two qualified electors who reside within the district may give similar notice of the special election at least seventy‑five days prior to the special election.

D. A person is not entitled to vote at a special election or an election held at a time and place other than a general election in a school district who has not been a qualified elector in a precinct in the boundaries of the school district for twenty‑nine days preceding the election, who is not qualified to register to vote as provided in section 16‑101 and who has not registered to vote prior to midnight of the twenty‑ninth day preceding the date of the election.

E. The governing board of a school district shall establish school district election precincts that have the same boundaries as the county election precincts as provided in section 16‑411 and designate one polling place within each precinct, except that the governing board of a union high school district may divide a county election precinct along the boundaries of common school districts within the boundaries of the union high school district and establish polling places within each common school district. In those cases where a school district boundary bisects a county election precinct, that portion of the election precinct that is within the school district shall be the school district election precinct. The governing board may consolidate school district election precincts if it deems it necessary for each special election and designate one polling place for the election precincts which that it consolidates. If school district election precincts are consolidated, a school district precinct register shall be prepared for the consolidated precinct. Upon a specific finding of the board, included in the order or resolution designating polling places pursuant to this subsection, that no suitable polling place is available within a precinct of the school district, a polling place for such precinct may be designated within an adjacent precinct. The adjacent precinct need not be within the school district. Any such polling places shall be listed in a separate section of the order or resolution.

F. All special elections which that are called either by the county school superintendent or the governing board of a school district and which that are held at a time other than the general election shall be conducted by the use of school district precinct registers. END_STATUTE

Sec. 12. Section 15-450, Arizona Revised Statutes, is amended to read:

START_STATUTE15-450. Formation of a new joint unified school district; petition; report; election; notice; ballots; canvass of votes; appointment of governing board

A. Notwithstanding any other statute, a new joint unified school district may be formed if the formation is approved by the state board of education and if the following requirements are met:

1. The boundaries of the proposed new joint unified school district include an incorporated city that is divided by two counties.

2. The proposed new joint unified school district includes territory within the boundaries of two or more existing school districts.

3. The proposed new joint unified school district would have a student count of not less than six hundred.

4. A high school is not located within the boundaries of the proposed new joint unified school district.

5. The assessed valuation of the proposed school district is at least two million dollars.

6. The governing boards of the districts affected have been given notice of the proposed change and an opportunity to be heard pursuant to section 15‑442, subsection B.

B. If it is desired that a new joint unified school district be formed pursuant to the provisions of this section, ten per cent or more of the qualified electors residing within the boundaries of the proposed joint unified school district shall file petitions with the county school superintendents of the counties in which the territory of the proposed district is situated. The petitions shall describe the territory to be included in the proposed joint unified school district and shall request that the formation of the proposed district be submitted to the qualified electors who reside within the proposed district.

C. Each county school superintendent with whom petitions for the formation of a joint unified school district are filed shall examine the petitions within fifteen days of the date of receipt to determine their sufficiency, including the adequacy of the signatures from the portion of the proposed district within his county. If the petitions are found sufficient, the county school superintendent shall transmit the petitions to the state board of education.

D. The state board of education shall promptly schedule a review of the issue of the formation of the proposed joint unified school district after receiving the petitions from the county school superintendents pursuant to subsection C of this section. The board shall approve or reject the formation of the proposed joint unified school district within sixty days of the date of receipt of the petitions. The board shall consider:

1. Operational costs of the existing and proposed districts.

2. Travel times and distances.

3. Climatic conditions.

4. Local terrain.

5. The number of pupils.

6. The fairness and appropriateness of any redistribution of taxable wealth from an existing school district to a proposed joint unified school district.

7. Whether the assessed valuation of the proposed joint unified school district is sufficient to support the district in a manner comparable to other districts of similar size.

If the state board after considering all such factors determines that the proposed new district will not cause an undue adverse effect on the operations of any existing school district, jeopardize the operation of the proposed joint common school district or cause a disproportionate amount of taxable wealth to be redistributed, it shall approve the petitions and return them to the respective county school superintendents.

E. On approval from the state board of education, the county school superintendent of each county whose territory or a portion of whose territory will be included in the proposed joint unified school district shall submit the question of the formation of the proposed joint unified school district to the voters at a general election or at a special election to be held for that purpose. If no general election is scheduled to be held within sixty days after the date the county school superintendent receives the approved petitions from the state board of education, he shall promptly call a special election to be held within sixty days after receipt of the approved petitions. Notice of the election shall be given by the county school superintendent to the boards of supervisors. At least ten days before the election, the county school superintendent shall cause notice of the proposed election to be posted in not less than three public places in the proposed district and to be published at least once in a newspaper of general circulation in the proposed district. The notice shall state the following:

1. The question to be voted on and the boundaries of the proposed joint unified school district with sufficient definiteness to make them readily ascertainable.

2. A description of voter qualifications, including requirements that the voters shall be residents of the proposed district.

3. The location of voting places within the proposed district, at least one of which shall be in each county.

F. Within ten days after the election, the county school superintendent and the chairman of the board of supervisors of each county shall canvass the vote. If a majority of the votes cast in each county of persons who reside within the proposed district favors formation of the proposed joint unified school district, the boards of supervisors shall jointly declare the election and the joint unified school district shall become operative from and after June 30 next following the election.

G. If the joint unified school district includes territory located in two or more counties, the county of jurisdiction is the county in which the largest number of qualified electors of the joint unified school district resides, except that if all of the existing school buildings are located in one county, that county is the county of jurisdiction. The county school superintendent of the jurisdictional county shall perform all duties for and with respect to the joint unified school district required to be performed by county school superintendents. The board of supervisors of the jurisdictional county shall perform all duties for and with respect to the joint unified school district required to be performed by boards of supervisors, except that school district taxes to be levied on property in the portion of the joint unified school district lying in another county shall be levied by the board of supervisors of the other county or counties and on receipt shall be transferred to the county of jurisdiction.

H. If a new joint unified school district is authorized, the governing boards of the existing school districts shall prepare a projected list of assets for the existing districts prior to the end of the fiscal year in which the election is held. The governing boards of the original school districts and the new joint unified school district shall prepare a final statement of assets for the formerly existing school districts as of the end of the fiscal year in which the election was held and shall have the statement of cash and bonded indebtedness certified by the county treasurers by August 30 of the year in which the new school district becomes operative. The governing boards of the original school districts and the new joint unified school district shall set aside sufficient assets or provide other means to satisfy the liabilities of the former existing districts except for bonded indebtedness and approve the final division of all assets by September 15 of the year in which the new school district becomes operative. If one or more of the governing boards fail to provide for satisfying the liabilities and fail to approve the division of assets by September 15, the county attorney or attorneys shall determine the means to satisfy the liabilities and final division of assets by October 1 of the fiscal year in which the new school district becomes operative.

I. The division of bonded indebtedness of the original school districts shall be in accordance with the provisions of section 15‑457, subsection B. In addition, any debt due to lease-purchase agreements shall be handled in a similar manner as outlined for bonded indebtedness in section 15‑457, subsection B.

J. Sections 15‑457, 15‑975 and 15‑997 apply to joint unified school districts formed under this section.

K. A joint unified school district shall not be formed if any of the resulting school districts would have a student count for the current year of less than six hundred.

L. The governing board of the joint unified school district shall prepare policies, curricula and budgets for the new school district. These policies shall require that:

1. The base salary of each teacher for the first year of operation of the new school district shall not be lower than the teacher's base salary for the prior year in the previously existing school district.

2. The teacher's years of employment in the previously existing school district shall be included in determining the teacher's years of employment in the new joint unified school district.

M. If a new joint unified school district is authorized, the governing board of a district which that will have its boundaries reduced by creation of the new joint unified district may hold an override election for the year beginning July 1 after the election that authorized the formation of the new joint unified district. The governing board of a school district which that will have its boundaries reduced by creation of the new joint unified district may hold a bond election for bonds applicable to and paid solely by the school district as it will exist after the formation of the new joint unified school district. Override elections and bond elections under this subsection shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204. The electors who reside in an area which that property will not be subject to taxation for operation or payment of the bonds of the school district calling the override or bond election after creation of the new joint unified school district are not eligible to vote in such an override or bond election. END_STATUTE

Sec. 13. Section 15-481, Arizona Revised Statutes, as amended by Laws 2006, chapter 217, section 4, is amended to read:

START_STATUTE15-481. Override election; budget increases; notice; ballot; effect

A. If the proposed budget of a school district exceeds the aggregate budget limit for the budget year, the governing board shall order an override election to be held not less than ninety days from the date of the order on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d) for the purpose of presenting the proposed budget to the qualified electors of the school district who shall by a majority of those voting either affirm or reject the budget. In addition, the governing board shall prepare an alternate budget which does not include an increase in the budget of more than the amount permitted as provided in section 15‑905. If the qualified electors approve the proposed budget, the governing board of the school district shall follow the procedures prescribed in section 15‑905 for adopting a budget that includes the authorized increase. If the qualified electors disapprove the proposed budget, the governing board shall follow the procedures prescribed in section 15‑905 for adopting a budget that does not include the proposed increase or the portion of the proposed increase that exceeds the amount authorized by a previously approved budget increase as prescribed in subsection P of this section.

B. The county school superintendent shall prepare an informational report on the proposed increase in the budget and a sample ballot and, at least thirty‑five days prior to the election, shall transmit the report and the ballot to the governing board of the school district. The governing board, upon receipt of the report and the ballot, shall mail or distribute the report and the ballot to the households, in which qualified electors reside, within the school district at least thirty days prior to the election. Any distribution of material concerning the proposed increase in the budget shall not be conducted by children enrolled in the school district. The report shall contain the following information:

1. The date of the election.

2. The polling places and times they are open.

3. The proposed total increase in the budget which exceeds the amount permitted pursuant to section 15‑905.

4. The total amount of the current year's budget, the total amount of the proposed budget and the total amount of the alternate budget.

5. If the override is for a period of more than one year, a statement indicating the number of years the proposed increase in the budget would be in effect and the percentage of the school district's revenue control limit that the district is requesting for the future years.

6. The proposed total amount of revenues which will fund the increase in the budget and the amount which will be obtained from a levy of taxes upon the taxable property within the school district for the first year for which the budget increase was adopted.

7. The proposed amount of revenues which will fund the increase in the budget and which will be obtained from other than a levy of taxes upon the taxable property within the school district for the first year for which the budget increase was adopted.

8. The dollar amount and the purpose for which the proposed increase in the budget is to be expended for the first year for which the budget increase was adopted.

9. At least two arguments, if submitted, but no more than ten arguments for and two arguments, if submitted, but no more than ten arguments against the proposed increase in the budget. The arguments shall be in a form prescribed by the county school superintendent and each argument shall not exceed two hundred words. Arguments for the proposed increase in the budget shall be provided in writing and signed by the governing board. If submitted, additional arguments in favor of the proposed increase in the budget shall be provided in writing and signed by those in favor. Arguments against the proposed increase in the budget shall be provided in writing and signed by those in opposition. The names of those persons other than the governing board or superintendent submitting written arguments shall not be included in the report without their specific permission, but shall be made available only upon request to the county school superintendent. The county school superintendent shall review all factual statements contained in the written arguments and correct any inaccurate statements of fact. The superintendent shall not review and correct any portion of the written arguments which are identified as statements of the author's opinion. The county school superintendent shall make the written arguments available to the public as provided in title 39, chapter 1, article 2. A deadline for submitting arguments to be included in the informational report shall be set by the county school superintendent.

10. A statement that the alternate budget shall be adopted by the governing board if the proposed budget is not adopted by the qualified electors of the school district.

11. The full cash value, the assessed valuation, the annual tax rate for the proposed override and the estimated amount of the secondary property taxes if the proposed budget is adopted for each of the following:

(a) An owner‑occupied residence whose assessed valuation is the average assessed valuation of property classified as class three, as prescribed by section 42‑12003 for the current year in the school district.

(b) An owner‑occupied residence whose assessed valuation is one‑half of the assessed valuation of the residence in subdivision (a) of this paragraph.

(c) An owner‑occupied residence whose assessed valuation is twice the assessed valuation of the residence in subdivision (a) of this paragraph.

(d) A business whose assessed valuation is the average of the assessed valuation of property classified as class one, as prescribed by section 42‑12001, paragraphs 12 and 13 for the current year in the school district.

12. If the election is conducted pursuant to subsection L or M of this section, the following information:

(a) An executive summary of the school district's most recent capital improvement plan submitted to the school facilities board.

(b) A complete list of each proposed capital improvement that will be funded with the budget increase and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(c) The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at eighty thousand dollars.

C. For the purpose of this section, the school district may use its staff, equipment, materials, buildings or other resources only to distribute the informational report at the school district office or at public hearings and to produce such information as required in subsection B of this section, provided that nothing in this subsection shall preclude school districts from holding or participating in any public hearings at which testimony is given by at least one person for the proposed increase and one person against the proposed increase. Any information provided by the district pertaining to the proposed override shall include financial information showing the estimated annual tax rate for the proposed budget override amount.

D. If any amount of the proposed increase will be funded by a levy of taxes in the district, the election prescribed in subsection A of this section shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). If the proposed increase will be fully funded by revenues from other than a levy of taxes the elections prescribed in subsection A of this section shall be held on a any date prescribed by section 16‑204. and The elections shall be conducted as nearly as practicable in the manner prescribed in article 1 of this chapter, sections 15‑422 through 15‑424 and section 15‑426, relating to special elections, except that:

1. The notices required pursuant to section 15‑403 shall be posted not less than twenty‑five days before the election.

2. Ballots shall be counted pursuant to title 16, chapter 4, article 10.

E. If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify his desired choice. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes upon the taxable property within this school district for the year for which adopted and for ____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on an estimate of assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget over that allowed by law would result in require an estimated increase in the school district's tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate which will be levied to fund the school district's revenue control limit allowed by law.

F. If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by revenues from other than a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain:

1. The amount of the proposed increase of the proposed budget over the alternate budget.

2. A statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section.

3. The following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.

G. Except as provided in subsection H of this section, the maximum budget increase which may be requested and authorized as provided in subsection E or F of this section or the combination of subsections E and F of this section is ten per cent of the revenue control limit as provided in section 15‑947, subsection A for the budget year.

H. Special budget override provisions for school districts with a student count of less than one hundred fifty‑four in kindergarten programs and grades one through eight or with a student count of less than one hundred seventy‑six in grades nine through twelve are as follows:

1. The maximum budget increase that may be requested and authorized as provided in subsections E and F of this section is the greater of the amount prescribed in subsection G of this section or a limit computed as follows:

(a) For common or unified districts with a student count of less than one hundred fifty‑four in kindergarten programs and grades one through eight, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:

(i)

Small School Support Level Weight Phase Down

Student Student for Small Isolated Reduction

Count Count Limit School Districts Base Level Factor

- 125 x 1.358 + (0.0005 x x $ = $

(500 - Student Count))

Small Isolated

Phase Down Phase Down School District

Base Reduction Factor Elementary Limit

$150,000 - $ = $

(ii)

Small School Support Level Weight Phase Down

Student Student for Small Reduction

Count Count Limit School Districts Base Level_ Factor

- 125 x 1.278 + (0.0003 x x $ = $

(500 - Student Count))

Small

Phase Down Phase Down School District

Base Reduction Factor Elementary Limit

$150,000 - $ = $

(b) For unified or union high school districts with a student count of less than one hundred seventy-six in grades nine through twelve, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:

(i)

Small School Support Level Weight Phase Down

Student Student for Small Isolated Reduction

Count Count Limit School Districts Base Level Factor

- 100 x 1.468 + (0.0005 x x $ = $

(500 - Student Count))

Small Isolated

Phase Down Phase Down District

Base Reduction Factor Secondary Limit

$350,000 - $ = $

(ii)

Small School Support Level Weight Phase Down

Student Student for Small Reduction

Count Count Limit School Districts Base Level_ Factor

- 100 x 1.398 + (0.0004 x x $ = $

(500 - Student Count))

Small

Phase Down Phase Down School District

Base Reduction Factor Secondary Limit

$350,000 - $ = $

(c) If both subdivisions (a) and (b) of this paragraph apply to a unified school district, its limit for the purposes of this paragraph is the combination of its elementary limit and its secondary limit.

(d) If only subdivision (a) or (b) of this paragraph applies to a unified school district, the district's limit for the purposes of this paragraph is the sum of the limit computed as provided in subdivision (a) or (b) of this paragraph plus ten per cent of the revenue control limit attributable to those grade levels that do not meet the eligibility requirements of this subsection. If a school district budgets monies outside the revenue control limit pursuant to section 15‑949, subsection E, the district’s limit for the purposes of this paragraph is only the ten per cent of the revenue control limit attributable to those grade levels that are not included under section 15‑949, subsection E. For the purposes of this subdivision, the revenue control limit is separated into elementary and secondary components based on the weighted student count as provided in section 15‑971, subsection B, paragraph 2, subdivision (a).

2. If a school district utilizes the provisions of this subsection to request an override of more than one year, the ballot shall include an estimate of the amount of the proposed increase in the future years in place of the statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, as prescribed in subsections E and F of this section.

3. Notwithstanding subsection P of this section, the maximum period of an override authorized pursuant to this subsection is five years.

4. Subsection P, paragraphs 1 and 2 of this section do not apply to overrides authorized pursuant to this subsection.

I. If the election is to exceed the revenue control limit as provided in section 15‑482 and if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed increase of the budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q of this section, and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes on the taxable property within this school district for the year for which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on an estimate of assessed valuation used for secondary property tax purposes, the portion of to fund the proposed increase in the school district's budget over that allowed by law which will be funded by a levy of taxes upon the taxable property within this school district would result in require an estimated increase in the school district's tax rate of __________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.

J. If the election is to exceed the revenue control limit as provided in section 15‑482 and if the proposed increase will be fully funded by revenues other than a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q of this section and the following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for _____ subsequent years and shall not be realized from monies furnished by the state.

K. The maximum budget increase that may be requested and authorized as provided in subsection I or J of this section, or a combination of both of these subsections, is five per cent of the revenue control limit as provided in section 15‑947, subsection A for the budget year. For a unified school district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15‑447, five per cent of the revenue control limit means five per cent of the revenue control limit attributable to the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight as provided in section 15‑971, subsection B.

L. If the election is to exceed the capital outlay revenue limit and if the proposed increase will be fully funded by a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes upon the taxable property within this school district for the year in which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on an estimate of assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget over that allowed by law would result in require an estimated increase in the school district's tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate which will be levied to fund the school district's capital outlay revenue limit allowed by law.

M. If the election is to exceed the capital outlay revenue limit and if the proposed increase will be fully funded by revenues from other than a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year in which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.

N. If the election is to exceed a combination of the revenue control limit as provided in subsection E or F of this section, the revenue control limit as provided in subsection I or J of this section or the capital outlay revenue limit as provided in subsection L or M of this section, the ballot shall be prepared so that the voters may vote on each proposed increase separately and shall contain statements required in the same manner as if each proposed increase were submitted separately.

O. If the election provides for a levy of taxes on the taxable property within the school district, at least thirty days prior to the election, the department of revenue shall provide the school district governing board and the county school superintendent with an estimate of the school district's assessed valuation used for secondary property tax purposes for the ensuing fiscal year. The governing board and the county school superintendent shall use this estimate to translate the amount of the proposed dollar increase in the budget of the school district over that allowed by law into a tax rate figure.

P. If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection E or F of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. Any additional increase shall be excluded from the determination of equalization assistance. The school district governing board may, however, levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection E of this section for the period of one year, two years or five through seven years as authorized. If an additional increase is approved as provided in subsection F of this section, the school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance to fund the additional increase. If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection E or F of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted which shall not exceed the maximum amount permitted under subsection G of this section. If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect. If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized. The maximum additional increase authorized as provided in subsection E or F of this section and the additional increase which is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year. If the additional increase:

1. Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.

2. Is for five years or more, the proposed increase is equal to the initial proposed percentage increase in the following years of the proposed increase, except that in the next to last year it is two‑thirds of the initial proposed percentage increase and it is one‑third of the initial proposed percentage increase in the last year of the proposed increase.

Q. If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection I or J of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. Any additional increase shall be excluded from the determination of equalization assistance. The school district governing board, however, may levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection I of this section for the period of one year, two years or five through seven years as authorized. If an additional increase is approved as provided in subsection J of this section, the increase may only be budgeted and expended if sufficient monies are available in the maintenance and operation fund of the school district. If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection I or J of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted that does not exceed the maximum amount permitted under subsection K of this section. If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect. If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized. The maximum additional increase authorized as provided in subsection I or J of this section and the additional increase that is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year. If the additional increase:

1. Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.

R. If the voters in a school district vote to adopt a budget in excess of the capital outlay revenue limit as provided in subsection L of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. The additional increase shall be excluded from the determination of equalization assistance. The school district governing board may, however, levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase for the period authorized but not to exceed ten years. For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.

S. If the voters in a school district vote to adopt a budget in excess of the capital outlay revenue limit as provided in subsection M of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. The additional increase shall be excluded from the determination of equalization assistance. The school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance and capital outlay fund ending cash balance to fund the additional increase for the period authorized but not to exceed ten years. For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.

T. In addition to subsections P and S of this section, from the maintenance and operation fund and capital outlay fund ending cash balances, the school district governing board shall first use any available revenues to reduce its primary tax rate to zero and shall use any remaining revenues to fund the additional increase authorized as provided in subsections F and M of this section.

U. If the voters in a school district disapprove the proposed budget, the alternate budget which, except for any budget increase authorized by a prior election, does not include an increase in the budget in excess of the amount provided in section 15‑905 shall be adopted by the governing board as provided in section 15‑905.

V. The governing board may request that any override election be cancelled if any change in chapter 9 of this title changes the amount of the aggregate budget limit as provided in section 15‑905. The request to cancel the override election shall be made to the county school superintendent at least ten days prior to the date of the scheduled override election.

W. For any election conducted pursuant to subsection L or M of this section:

1. The ballot shall include the following statement in addition to any other statement required by this section:

The capital improvements that are proposed to be funded through this override election are to exceed the state standards and are in addition to monies provided by the state.

___________ school district is proposing to increase its budget by $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2. The ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.

3. At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the Arizona legislative council. The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

X. If the voters approve the budget increase pursuant to subsection L or M of this section, the school district shall not use the override proceeds for any purposes other than the proposed capital improvements listed in the publicity pamphlet, except that up to ten per cent of the override proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements.

Y. Each school district that currently increases its budget pursuant to subsection L or M of this section is required to hold a public meeting each year between September 1 and October 31 at which an update of the progress of capital improvements financed through the override is discussed and at which the public is permitted an opportunity to comment. At a minimum, the update shall include a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital plans of the school district. The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter‑approved bonding in funding capital improvements, if any.

Z. If a budget in excess of the capital outlay revenue limit was previously adopted by the voters in a school district and will be in effect for the budget year or budget year and subsequent years, as provided in subsection L or M of this section, the governing board may request an additional budget in excess of the capital outlay revenue limit. If the voters in a school district authorize the additional budget in excess of the capital outlay revenue limit, the existing capital outlay revenue limit budget increase remains in effect. END_STATUTE

Sec. 14. Section 15-491, Arizona Revised Statutes, as amended by Laws 2006, chapter 217, section 5, is amended to read:

START_STATUTE15-491. Elections on school property; exceptions

A. The governing board of a school district may, and upon petition of fifteen per cent of the school electors as shown by the poll list at the last preceding annual school election shall, call an election for the following purposes:

1. To locate or change the location of school buildings.

2. To purchase or sell school sites or buildings or sell school sites pursuant to section 15‑342 or to build school buildings, but the authorization by vote of the school district shall not necessarily specify the site to be purchased.

3. To decide whether the bonds of the school district shall be issued and sold for the purpose of raising money for purchasing or leasing school lots, for building or renovating school buildings, for improving school grounds, for purchasing pupil transportation vehicles or for liquidating any indebtedness already incurred for such purposes. Except as provided in section 15‑1021, subsection H, the proceeds of class B bonds or impact aid revenue bonds shall not be used for soft capital purposes except for pupil transportation vehicles. A school district shall not issue class B bonds until the school district has obligated in contract the entire proceeds of any class A bonds issued by the school district. The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, sections 8 and 8.1, Constitution of Arizona.

4. To lease for five or more years, as lessor or as lessee, school buildings or grounds. Approval by a majority of the school district electors voting authorizes the governing board to negotiate for and enter into a lease. The ballot shall list the school buildings or grounds for which a lease is sought. If the governing board does not enter into a lease of five or more years of the school buildings or grounds listed on the ballot within five years of the date of the election and the board continues to seek such a lease, the governing board shall call a special election to reauthorize the board to negotiate for and to enter into a lease of five or more years.

B. No petition shall be required for the holding of the first election to be held in a joint common school district for any of the purposes specified in subsection A of this section. The notice of election required by section 15‑492 shall be published in each of the counties which comprise the joint common school district. The certification of election results required by section 15‑493 shall be made to the board of supervisors of the jurisdictional county.

C. When the election is called to determine whether or not bonds of the school district shall be issued and sold for the purposes enumerated in the call for the election, the question shall be submitted to the vote of the qualified electors of the school district as defined in section 15‑401 and subject to the provisions of section 15‑402.

D. The governing board shall order the election to be held in the manner prescribed in title 35, chapter 3, article 3. If a petition for an election has been filed with the governing board as provided in subsection A of this section, the board shall act upon the petition within sixty days by ordering the election to be held as provided in this subsection. If a school district bond election is scheduled for the same date a school district will hold an override election, the governing body shall deliver a copy of the notice of election and ballot to the county school superintendent who shall include the notice of election and ballot with the information report and ballot prepared for the override election. Mailing of the information required for both the override and bond elections shall constitute compliance with the notice provisions of this section.

E. The elections to be held pursuant to this section shall only be held on dates prescribed by section 16‑204, except that elections held pursuant to this section to decide whether class B bonds shall be issued, or any other obligation incurred that will require the assessment of secondary property taxes, shall only be held on the first Tuesday after the first Monday of November.

F. Subsection A, paragraph 2 of this section does not apply to the sale of school property if the market value of the school property is less than fifty thousand dollars.

G. Bond counsel fees, financial advisory fees, printing costs and paying agent and registrar fees for bonds issued pursuant to an election under this section shall be paid from either the amount authorized by the qualified electors of the school district or current operating funds. Bond election expenses shall be paid from current operating funds only.

H. For any election conducted to decide whether class B bonds will be issued pursuant to this section:

1. Except as provided in paragraph 2 of this subsection, the ballot shall include the following statement:

The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.

___________ school district is proposing to issue class B general obligation bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2. For a school district that is a joint technological education district, the ballot shall include the following statement:

___________, a joint technological education district, is proposing to issue class B general obligation bonds totaling $___________ to fund capital improvements at the main campus of the joint technological education district.

3. The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.

4. The ballot shall also contain the phrase "the issuance of these bonds will result in an annual levy of property taxes sufficient to pay the debt on the bonds".

5. At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the Arizona legislative council. The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

6. No later than ten days before a class B bond election conducted pursuant to this section, the school district shall mail a publicity pamphlet to each household that contains a qualified elector in the school district. The publicity pamphlet shall contain, at a minimum, the following information:

(a) An executive summary of the school district's most recent capital plan submitted to the school facilities board.

(b) A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

I. For any election conducted to decide whether impact aid revenue bonds shall be issued pursuant to this section:

1. The ballot shall include the following statement:

The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.

__________ school district is proposing to issue impact aid revenue bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2. The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.

3. At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the legislative council. The director of the legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

4. No later than ten days before an impact aid revenue bond election conducted pursuant to this section, the school district shall mail a publicity pamphlet to each household that contains a qualified elector in the school district. The publicity pamphlet shall contain, at a minimum, the following information:

(a) An executive summary of the school district's most recent capital plan submitted to the school facilities board.

(c) A statement that impact aid revenue bonds will be fully funded by aid that the school district receives from the federal government and do not require a levy of taxes in the district.

(d) A statement that if the bonds are approved the first priority for the impact aid will be to pay the debt service for the bonds and that other uses of the monies are prohibited until the debt service obligation is met.

(e) A statement that if the impact aid revenue bonds are approved, the school district shall not issue or sell class B bonds while the district has existing indebtedness from impact aid revenue bonds, except for bonds issued to refund any bonds issued by the board.

J. If the voters approve the issuance of school district class B bonds or impact aid revenue bonds, the school district shall not use the bond proceeds for any purposes other than the proposed capital improvements listed in the publicity pamphlet, except that up to ten per cent of the bond proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements.

K. Each school district that issues bonds under this section is required to hold a public meeting each year between September 1 and October 31, until the bond proceeds are spent, at which an update of the progress of capital improvements financed through bonding is discussed and at which the public is permitted an opportunity to comment. At a minimum, the update shall include a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital bonding plans of the school district. The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter‑approved capital overrides in funding capital improvements, if any. END_STATUTE

Sec. 15. Section 15-913, Arizona Revised Statutes, is amended to read:

START_STATUTE15-913. Education program; juvenile detention centers

A. Each county that operates a juvenile detention center shall offer an education program to serve all school‑age children in its juvenile detention center. The county school superintendent and the presiding juvenile court judge in each county shall agree on the method of delivery of the juvenile detention center education program.

B. The state board of education shall prescribe standards and achievement testing requirements for county juvenile detention center education programs that shall attempt to ensure that the programs are compatible with public school education goals and requirements. The county school superintendent shall attempt to coordinate the program with each pupil's school district of residence to assist the pupil's transition back to the school district at the appropriate time.

C. A county may operate its juvenile detention center education program through an existing accommodation school.

D. If a county chooses not to operate its juvenile detention center education program through an existing accommodation school, the county school superintendent may establish a detention center education fund to provide financial support to the program. The detention center education fund for each program shall consist of a base amount plus a variable amount. For fiscal year 1994‑1995 the base amount is twenty thousand dollars and the variable amount shall be determined pursuant to subsection E of this section. Beginning with fiscal year 1995‑1996 the base amount is the amount for the prior year adjusted by the growth rate prescribed by law, subject to appropriation. The county treasurer shall deposit the appropriate amount into the detention center education fund from monies that are collected from the tax levy for county equalization assistance for education pursuant to section 15‑994 after the monies are used pursuant to section 15‑365, subsection F and before the monies that are used to provide equalization assistance for education pursuant to section 15‑971, subsection C, except that if a county detention center education program serves more than one county, payment into the fund shall be pursuant to subsection F of this section.

E. The variable amount shall be determined as follows:

1. Determine the number of days in the prior fiscal year that each child who had been in the detention center for more than forty‑eight hours received an instructional program of at least two hundred forty minutes. No school district may count a child as being in attendance in that school district on a day that the child is counted for the purposes of this paragraph.

2. Multiply the number of days determined under paragraph 1 of this subsection by the following amount:

(a) For fiscal year 1994‑1995, fifteen dollars.

(b) For fiscal year 1995‑1996 and thereafter, the amount for the prior year adjusted by the growth rate prescribed by law, subject to appropriation.

3. For each child with a disability as defined in section 15‑761 who had been in the detention center for more than forty‑eight hours:

(a) Determine the amount prescribed in section 15‑1204, subsection E, paragraph 1 or 2 and add one hundred dollars for capital outlay costs.

(b) Divide the sum determined under subdivision (a) of this paragraph by one hundred seventy‑five.

(c) Subtract the amount prescribed in paragraph 2, subdivision (a) or (b) of this subsection from the quotient determined in subdivision (b) of this paragraph.

(d) Determine the number of days in the prior fiscal year that the child received an instructional program of at least two hundred forty minutes.

(e) Multiply the amount determined in subdivision (d) of this paragraph by the difference determined in subdivision (c) of this paragraph.

4. Add the amounts determined in paragraph 3 of this subsection for all children with disabilities.

5. Add the sum determined in paragraph 4 of this subsection to the product determined in paragraph 2 of this subsection. This sum is the variable amount.

F. If a county detention center education program serves more than one county, the county school superintendents and the presiding juvenile court judges of the counties being served shall agree on a county of jurisdiction. The county treasurer shall pay the appropriate amount into the detention center education fund of the county of jurisdiction from monies collected pursuant to subsection D of this section that are used to provide equalization assistance for education as provided in section 15-971, subsection C as follows:

1. The total base amount shall be prorated among the counties based on the total number of days as determined under subsection E, paragraph 1 of this section that children from each county were served.

2. The variable amount shall be calculated separately for each county.

3. The county treasurer of each county that is not the county of jurisdiction shall pay its variable amount and its portion of the base amount to the county of jurisdiction.

4. The county treasurer of the county of jurisdiction shall deposit the monies received from the other counties pursuant to paragraph 3 of this subsection into the detention center education fund and shall pay into the fund its variable amount and its portion of the base amount.

G. If a county operated a juvenile detention center education program through an accommodation school in the year before it begins to operate its juvenile detention center education program as provided in subsection D of this section, for the first year of operation as provided in subsection D of this section, the student count of the accommodation school shall be reduced by the student count attributable to the detention center program. The provisions of section 15‑942 shall not apply to this reduction in student count. END_STATUTE

Sec. 16. Section 15-913.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-913.01. Education program; county jails

A. Each county that operates a county jail shall offer an education program to serve all prisoners who are under eighteen years of age and prisoners with disabilities who are age twenty‑one or younger and who are confined in the county jail. The county school superintendent and the sheriff in each county shall agree on the method of delivery of the education program.

B. The county school superintendent shall develop policies and procedures for the transfer of educational records of any prisoner confined in a county jail who has been transferred from a juvenile detention center or from any other public agency which has provided educational services to that prisoner.

C. A county may operate its county jail education program through an accommodation school that provides alternative education services pursuant to section 15‑308, except that each pupil enrolled in the accommodation school county jail education program shall be funded at an amount equal to seventy‑two per cent of the amount for that pupil if that pupil was were enrolled in another accommodation school program.

D. If a county chooses not to operate its county jail education program through an accommodation school, the county school superintendent may establish a county jail education fund to provide financial support to the program. The county jail education fund for each program shall consist of a base amount plus a variable amount. For fiscal year 1999‑2000 the base amount is fourteen thousand four hundred dollars and the variable amount shall be determined pursuant to subsection E of this section. The county treasurer shall deposit the appropriate amount into the county jail education fund from monies that are collected from the tax levy for county equalization assistance for education pursuant to section 15‑994 after the monies are used pursuant to section 15‑365, subsection F and before the monies that are used to provide equalization assistance for education pursuant to section 15‑971, subsection C, except that if a county jail education program serves more than one county, payment into the fund shall be pursuant to subsection F of this section.

E. The variable amount shall be determined as follows:

1. Determine the number of days in the prior fiscal year that each pupil who is a prisoner and had been in the county jail for more than forty‑eight hours received an instructional program of at least two hundred forty minutes. No school district may count a pupil as being in attendance in that school district on a day that the pupil is counted as a prisoner for the purposes of this paragraph.

2. Multiply the number of days determined under paragraph 1 of this subsection by the following amount:

(a) For fiscal year 1999‑2000, ten dollars and eighty cents.

(b) For fiscal year 2000‑2001 and each year thereafter, the amount for the prior year adjusted by any growth rate prescribed by law, subject to legislative appropriation.

3. For each pupil who is a child with a disability as defined in section 15‑761, who is a prisoner and who had been in the county jail for more than forty‑eight hours:

(a) Determine the amount prescribed in section 15‑1204, subsection E, paragraph 1 or 2, multiply the amount by .72 and add seventy‑two dollars for capital outlay costs.

(b) Divide the sum determined under subdivision (a) of this paragraph by one hundred seventy‑five.

(c) Subtract the amount prescribed in paragraph 2 of this subsection from the quotient determined in subdivision (b) of this paragraph.

(d) Determine the number of days in the prior fiscal year that the pupil received an instructional program of at least two hundred forty minutes.

(e) Multiply the amount determined in subdivision (d) of this paragraph by the difference determined in subdivision (c) of this paragraph.

4. Add the amounts determined in paragraph 3 of this subsection for all pupils with disabilities who are prisoners.

5. Add the sum determined in paragraph 4 of this subsection to the product determined in paragraph 2 of this subsection. This sum is the variable amount.

F. If a county jail education program serves more than one county, the county school superintendents and the sheriffs of the counties being served shall agree on a county of jurisdiction. The county treasurer shall pay the appropriate amount into the county jail education fund of the county of jurisdiction from monies collected pursuant to subsection D of this section that are used to provide equalization assistance for education as provided in section 15-971, subsection C as follows:

1. The total base amount shall be prorated among the counties based on the total number of days as determined under subsection E, paragraph 1 of this section that pupils who are prisoners from each county were served.

2. The variable amount shall be calculated separately for each county.

3. The county treasurer of each county that is not the county of jurisdiction shall pay its variable amount and its portion of the base amount to the county of jurisdiction.

4. The county treasurer of the county of jurisdiction shall deposit the monies received from the other counties pursuant to paragraph 3 of this subsection into the county jail education fund and shall pay into the fund its variable amount and its portion of the base amount.

G. If a county operated a county jail education program through an accommodation school in the year before it begins to operate its county jail education program as provided in subsection D of this section, for the first year of operation as provided in subsection D of this section, the student count of the accommodation school shall be reduced by the average daily membership attributable to the accommodation school's county jail program in its last fiscal year of operation. The provisions of section 15‑942 shall not apply to this reduction in student count.END_STATUTE

Sec. 17. Section 15-971, Arizona Revised Statutes, is amended to read:

START_STATUTE15-971. Determination of equalization assistance payments from county and state funds for school districts

A. Equalization assistance for education is computed by determining the total of the following:

1. The lesser of a school district's revenue control limit or district support level as determined in section 15‑947 or 15‑951.

2. The capital outlay revenue limit of a school district as determined in section 15‑951 or 15‑961.

3. The soft capital allocation of a school district as determined in section 15‑951 or 15‑962.

B. From the total of the amounts determined in subsection A of this section subtract:

1. The amount that would be produced by levying the applicable qualifying tax rate determined pursuant to section 41‑1276 for a high school district or a common school district within a high school district which does not offer instruction in high school subjects as provided in section 15‑447.

2. The amount that would be produced by levying the applicable qualifying tax rate determined pursuant to section 41‑1276 for a unified school district, a common school district not within a high school district or a common school district within a high school district which offers instruction in high school subjects as provided in section 15‑447. The qualifying tax rate shall be applied in the following manner:

(a) For the purposes of the amount determined in subsection A, paragraph 1 of this section:

(i) Determine separately the percentage that the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight and the weighted student count in grades nine through twelve is to the weighted student count determined in subtotal A as provided in section 15‑943, paragraph 2, subdivision (a).

(ii) Apply the percentages determined in item (i) of this subdivision to the amount determined in subsection A, paragraph 1 of this section.

(b) For the purposes of the amounts determined in subsection A, paragraphs 2 and 3 of this section determine separately the amount of the capital outlay revenue limit and the amount of the soft capital allocation attributable to the student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight and grades nine through twelve.

(c) From the amounts determined in subdivisions (a) and (b) of this paragraph subtract the levy which would be produced by the current qualifying tax rate for a high school district or a common school district within a high school district that does not offer instruction in high school subjects as provided in section 15‑447. If the qualifying tax rate generates a levy which is in excess of the total determined in subsection A of this section, the school district shall not be eligible for equalization assistance. In this subsection "assessed valuation" includes the values used to determine voluntary contributions collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1, article 8.

3. The amount that would be produced by levying a qualifying tax rate in a joint vocational and technological education district, which shall be five cents per one hundred dollars assessed valuation unless the legislature sets a lower rate by law.

4. The amount of government property lease excise tax monies that were distributed to the district pursuant to section 42‑6205 during the preceding fiscal year.

C. County aid for equalization assistance for education shall be computed as follows:

1. Determine the total equalization assistance for all school districts in the county as provided in subsections A and B of this section.

2. Determine the total amount of county aid collected for all school districts in the county as provided in section 15‑994.

3. Divide the amount determined in paragraph 2 of this subsection by the amount determined in paragraph 1 of this subsection.

4. Multiply the amount determined in subsections A and B of this section by the quotient determined in paragraph 3 of this subsection for each school district.

5. The amount determined in paragraph 4 of this subsection shall be the county aid for equalization assistance for education for a school district.

D. C. State aid for equalization assistance for education for a school district shall be computed as follows:

1. Determine the equalization assistance for education for a school district as provided in is the amount computed pursuant to subsections A and B of this section.

2. For each county, determine the levy that would be produced by the tax rate for equalization assistance for education prescribed in section 15‑994, subsection A.

3. For each county, determine the total amount to be paid from monies collected from the tax levy for equalization assistance for education into the small district service program fund as prescribed by section 15‑365 and into the detention center education fund as prescribed by section 15‑913.

4. Subtract the amount determined in paragraph 3 of this subsection from the amount determined in paragraph 2 of this subsection.

5. Prorate the amount determined in paragraph 4 of this subsection to each school district in the county as prescribed by subsection C of this section.

6. Subtract the amount determined in paragraph 5 of this subsection from the amount determined in paragraph 1 of this subsection.

E. D. Equalization assistance for education shall be paid from appropriations for that purpose to the school districts as provided in section 15‑973.

F. E. A school district shall report expenditures on approved career and technical education and vocational education programs in the annual financial report according to uniform guidelines prescribed by the uniform system of financial records and in order to facilitate compliance with sections 15‑255 and 15‑904.

G. F. The additional weight for state aid purposes given to special education as provided in section 15‑943 shall be given to school districts only if special education programs comply with the provisions of chapter 7, article 4 of this title and the conditions and standards prescribed by the superintendent of public instruction pursuant to rules of the state board of education for pupil identification and placement pursuant to sections 15‑766 and 15‑767.

H. G. In addition to general fund appropriations, all amounts received pursuant to section 37‑521, subsection B, paragraph 3 and section 42‑5029, subsection E, paragraph 5 and from any other source for the purposes of this section are appropriated for state aid to schools as provided in this section.

I. H. The total amount of state monies that may be spent in any fiscal year for state equalization assistance shall not exceed the amount appropriated or authorized by section 35‑173 for that purpose. This section shall not be construed to impose a duty on an officer, agent or employee of this state to discharge a responsibility or to create any right in a person or group if the discharge or right would require an expenditure of state monies in excess of the expenditure authorized by legislative appropriation for that specific purpose.END_STATUTE

Sec. 18. Section 15-974, Arizona Revised Statutes, is amended to read:

START_STATUTE15-974. Equalization assistance for education for accommodation schools; definition

A. Equalization assistance for education for accommodation schools shall be computed as follows:

1. Determine the total of the lesser of an accommodation school's revenue control limit or district support level as determined in section 15‑947, an accommodation school's capital outlay revenue limit as determined in section 15‑961 and an accommodation school's soft capital allocation as determined in section 15‑962.

2. From the amount determined in paragraph 1 of this subsection subtract the monies received from P.L. 81‑874 for the prior fiscal year if the amount to be received in the current fiscal year is equal to or greater than the amount received in the prior fiscal year. If the amount to be received during the current fiscal year is less than the amount received in the prior fiscal year, the subtraction shall be determined as follows:

(a) Subtract the amount to be received in the current fiscal year, adjusting the final payment to reflect actual receipts during the fiscal year.

(b) If additional P.L. 81‑874 monies are received after the computation of the last payment of state aid but before the end of the fiscal year, the amount received late shall be subtracted from the equalization assistance for the following fiscal year, except that the total amount reduced pursuant to subdivision (a) of this paragraph and this subdivision shall not exceed the amount of P.L. 81‑874 monies received in the prior year.

3. Equalization assistance for an accommodation school shall be the amount determined in paragraph 2 of this subsection.

B. Equalization assistance for education for accommodation schools shall be paid from appropriations for that purpose to the school districts as provided in section 15‑973.

C. When an accommodation school has a positive total cash balance at the end of a fiscal year in its maintenance and operation fund, the county school superintendent of the county in which the accommodation school is located may authorize an addition to the accommodation school's revenue control limit as provided in section 15‑947, subsection A for the following fiscal year. The county school superintendent may not authorize an addition that exceeds the lesser of the ending cash balance less the amount budgeted for the budget balance carryforward as provided in section 15‑943.01 or ten per cent of the revenue control limit of the accommodation school. If an accommodation school has a cash balance in excess of the amount needed to fund the budget balance carryforward, the addition authorized pursuant to this subsection and the items listed in section 15‑947, subsection C, paragraph 2, subdivisions (c) and (f) for the following fiscal year, the remaining cash balance shall be used to reduce the amount of state aid for equalization assistance for education for the accommodation school as provided in section 15‑971, subsection D C for the following year.

D. The provisions of subsection C of this section shall not apply to an accommodation school with a student count of one hundred twenty‑five or less in kindergarten programs and grades one through eight or to an accommodation school which offers instruction in grades nine, ten, eleven or twelve and which has a student count of one hundred or less in grades nine through twelve.

E. For the purpose purposes of this section, "monies received from P.L. 81‑874" means total P.L. 81‑874 monies less P.L. 81‑874 monies for children with disabilities, children with specific learning disabilities and children residing on Indian lands which are in addition to the basic assistance as provided in 20 United States Code section 238, subsection (d), paragraph 2, clauses (C) and (D). END_STATUTE

Sec. 19. Repeal

Section 15-994, Arizona Revised Statutes, is repealed.

Sec. 20. Section 15-1465, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1465. Election; issuance and sale of bonds for capital outlay; disposition of proceeds; proration of expenditures by counties

A. A district may conduct an election to determine whether or not bonds shall be issued and sold for the purpose of paying its share of the expenditures incurred for capital outlay. The election shall be originated and conducted, the bonds issued, sold and redeemed and a tax levy imposed for payment of interest on such bonds and redemption of bonds in accordance with the provisions of title 35, chapter 3, article 3 and the limitations imposed on school districts by article IX, section 8, Constitution of Arizona, insofar as those provisions are applicable. The election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). Bond counsel fees, financial advisory fees, printing costs and paying agent and registrar fees shall be paid from either the amount authorized by the qualified electors of the community college district or current operating funds. Bond election expenses shall be paid from current operating funds only.

B. The proceeds of all bonds sold as provided in subsection A of this section shall be used only for capital outlay, including the purchase of land, the purchase, erection, remodeling or completion of buildings and the purchase of equipment and facilities for educational or auxiliary purposes of the community college district.

C. Where a district contains more than one county, subsections A and B of this section shall be applicable separately to each of the counties as to its portion of the expenditures to be paid for capital outlay in setting up the physical plant of the district even though the proposed plant is to be established, wholly or partly, in one county of the district.

D. The portion of the expenditures for capital outlay to be prorated by each county of a district shall be determined in the ratio that the assessed valuation of each county within the district bears to the total assessed valuation of all counties within the district.

E. If a majority of the qualified electors voting at an election held as provided in this chapter disapproves the issuance of bonds for any purpose, the governing board of the community college district shall not authorize the expenditure of funds from any source for such purpose without subsequent approval of a majority of the qualified electors voting at an election held as provided in this chapter, except that a subsequent vote of the district electors shall not be necessary to:

1. Construct buildings and site improvements on existing campuses.

2. Repair and remodel existing facilities and to purchase equipment.

3. Purchase land adjacent to an existing campus. END_STATUTE

Sec. 21. Section 16-204, Arizona Revised Statutes, as amended by Laws 2006, chapter 44, section 5, is amended to read:

START_STATUTE16-204. Declaration of statewide concern; consolidated election dates

A. While the legislature recognizes that the method of conducting elections by political subdivisions, including charter counties and cities, may be a matter of local concern, the legislature finds and determines that for the purposes of increasing voter participation and for decreasing the costs to the taxpayers it is a matter of statewide concern that all elections in this state be conducted on a limited number of days and, therefore, the legislature finds and declares that the holding of all elections on certain specific consolidated days is a matter of statewide concern.

B. Notwithstanding any other law or any charter or ordinance of any county, city or town to the contrary, an election held for or on behalf of a county, city or town, a school district, a community college district or special districts organized pursuant to title 48, chapters 5, 6, 8, 10, 13 through 16 and 33 may only be held on the following dates:

1. Except for regular elections for candidates in a city or town with a population of one hundred seventy-five thousand or more persons, all elections, including recall elections and special elections to fill vacancies, shall be held on:

(a) The second Tuesday in March.

(b) The third Tuesday in May.

(d) The first Tuesday after the first Monday in November. Notwithstanding any other law, any election to approve an obligation or other authorization requiring or authorizing the assessment of secondary property taxes by a county, city, town, school district, community college district or special taxing district shall be held on this date.

2. For regular elections that are only for candidates in a city or town with a population of one hundred seventy-five thousand or more persons and not including recall elections and special elections to fill vacancies in those cities or towns, elections shall be held on:

(a) The eighth Tuesday before the first Tuesday after the first Monday in November.

(b) The first Tuesday after the first Monday in November.

C. For any city or town, including a charter city, that holds its regularly scheduled candidate elections in even-numbered years pursuant to subsection B, paragraph 2, including a charter city, the term of office for a member of the city council or for the office of mayor begins on or after the second Tuesday in January in the year following the election.

D. This section does not apply to an election regarding a county or city charter committee or county or city charter proposal that is conducted pursuant to article XIII, section 2 or 3 or article XII, section 5, Constitution of Arizona. END_STATUTE

Sec. 22. Section 35-452, Arizona Revised Statutes, is amended to read:

START_STATUTE35-452. Election to authorize indebtedness; costs

A. The governing body or board of a political subdivision enumerated in section 35‑451 may, and upon petition signed by fifteen per cent of the qualified electors shall, order an election by such electors to determine whether such indebtedness shall be authorized. The election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. If a majority of the qualified electors voting at the election votes in favor of creating an indebtedness such political subdivision may become so indebted.

C. Bond counsel fees, financial advisory fees, printing costs and paying agent and registrar fees shall be paid from either the amount authorized by the qualified electors of the political subdivision or current operating funds.

D. Bond election expenses shall be paid from current operating funds only. END_STATUTE

Sec. 23. Section 35-453, Arizona Revised Statutes, is amended to read:

START_STATUTE35-453. Order for election

A. The governing body or board of the political subdivision shall order the election to be held at the regular voting places within the limits of such subdivision not less than thirty nor more than one hundred fifty days from the date of the order on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. If the election is to be held for creating an indebtedness by a county, the order shall be made by the board of supervisors of the county in which the election will be held.

C. The order shall state the object of the election, and shall be prima facie evidence that all provisions necessary to give the order validity or qualify the governing body or board to make such order have been fully complied with. END_STATUTE

Sec. 24. Section 35-454, Arizona Revised Statutes, as amended by Laws 2006, chapter 217, section 7, is amended to read:

START_STATUTE35-454. Informational pamphlet for election; review; election; return; canvass of vote; certificate of election

A. The governing body or board of the political subdivision shall:

1. Not less than ten days and not more than fifty days before the bond election mail a copy of an informational pamphlet to each household within the political subdivision that contains a registered voter. The pamphlet shall contain information on the:

(a) Amount of the bond authorization.

(b) Maximum interest rate of the bonds.

(c) Estimated debt retirement schedule for the current amount of bonds outstanding, showing both principal and interest payments, the current secondary assessed valuation as reported by the department of revenue or the county assessor and the current adopted and estimated tax rates. In this paragraph, "secondary assessed valuation" may include the values used to determine voluntary contributions collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1, article 8.

(d) Estimated debt retirement schedule for the proposed bond authorization, showing both the estimated principal and interest payments and the estimated average annual tax rate for the proposed bond authorization. In preparing this information and the information prescribed by subdivision (c), the projected total annual increase in secondary assessed valuation for any future year shall not exceed:

(i) For the first five years of the estimated debt retirement schedule, the average of the annual percentage growth for the previous ten years in the secondary assessed valuation of the political subdivision.

(ii) For the remaining years of the estimated debt retirement schedule, twenty per cent of the average of the annual percentage growth for the previous ten years in the secondary assessed valuation of the political subdivision.

(e) Source of repayment.

(f) Estimated issuance costs.

(g) Estimated tax impact on the owner‑occupied residential property, agricultural property and commercial and industrial property for the current year in the political subdivision. The tax impact shall be shown for property with a full cash value of one hundred thousand dollars and for property with an average assessed valuation for that class, as determined by the governing body or board. The tax impact shall show the projected average annual cost of the proposed bond authorization, including principal and interest, over the life of the proposed bond authorization. The information on estimated tax impact shall be set forth in substantially the following form:

Estimated average annual tax rate per $100 of secondary assessed valuation: $_________________

[The following table for each specified class of property]

___________________ property

(assessed at ____%)

Assessor's full Secondary assessed Estimated annual cost

Cash value Value

_______________ _________________(*) $________________

$100,000 _________________ $________________

(Other values

may be included) _________________ $________________

(*) Estimated average value

(g) The estimated tax impact of debt service for the bonds on an owner-occupied residence classified as class three pursuant to section 42‑12003 and on commercial property classified as class one pursuant to section 42-12001, paragraph 12, in current dollars and assuming the assessed valuation of the property and the aggregate net assessed valuation of the political subdivision remain constant over the term of the bonds, as follows:

The tax impact over the term of the bonds on an owner‑occupied residence valued by the county assessor at $250,000 is estimated to be $___ per year for __ years, or $___ total cost.

The tax impact over the term of the bonds on commercial property valued by the county assessor at $2,500,000 is estimated to be $____ per year for __ years, or $______ total cost.

(h) If outstanding bonds will be redeemed or retired within twelve months, other than through issuance of refunding bonds, the estimated net effect in the first year of debt service on the new bonds after the retirement of the obligation on the outstanding bonds on an owner-occupied residence classified as class three pursuant to section 42‑12003 and on commercial property classified as class one pursuant to section 42‑12001, paragraph 12.

(h) (i) In bold faced type, estimated total cost of the proposed bond authorization, including principal and interest.

(i) (j) Current outstanding general obligation debt and constitutional debt limitation.

(j) (k) Purpose for which the bonds are to be issued.

(k) (l) Polling location for the addressee.

(l) (m) Hours during the day when the polls will be open.

(m) (n) Arguments for and against the authorization of one or more of the bond propositions.

2. Submit a copy of the informational pamphlet to the department of revenue within thirty days after the bond election. The department of revenue shall maintain copies of the pamphlets.

B. The failure of any one or more electors to receive the informational pamphlet shall not be grounds to invalidate the election. The election shall conform with the general election laws of the state. The return of the election held in a county shall be made to the board of supervisors and, in any other case, to the governing body or board of the municipal corporation or district within twelve days after the election.

C. For any proposed general obligation bond authorization where the principal and interest will be paid by a levy of property taxes, the ballot shall contain the phrase "the issuance of these bonds will result in an annual levy of property taxes sufficient to pay the debt on the bonds". Any information provided by the political subdivision pertaining to the proposed bond election shall include financial information showing the estimated average tax rate for the proposed bond authorization.

D. If the governing body intends to use revenues other than property taxes to pay the debt on proposed general obligation bonds, the ballot shall contain the phrase "the issuance of these bonds will result in an annual levy of property taxes sufficient to pay the debt on the bonds, unless the governing body provides for payment from other sources".

E. The board of supervisors, governing body or governing board shall hold a special meeting within twenty days after the election to canvass the votes cast and certify the result. The certificate of the result shall be prima facie evidence of full performance of all conditions and requirements precedent to holding the election.

F. The governing board or body shall file and record in the office of the county recorder a certificate disclosing the purpose of the election, the total number of votes cast and the total number of votes for and against creating the indebtedness, and stating whether or not the indebtedness is ordered. Upon filing and recording the certificate, the governing board or body shall carry out the purpose of the election.

G. Variations between the estimates required by subsection A and the actual debt retirement schedules, issuance costs, annual and total costs and tax rates shall not invalidate either the election or the bonds. END_STATUTE

Sec. 25. Section 37-521, Arizona Revised Statutes, is amended to read:

START_STATUTE37-521. Permanent state school fund; composition; use

A. The permanent state school fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for the support of common schools.

2. All property which accrues to the state by escheat or forfeiture.

3. All property donated for the benefit of the common schools, unless the terms of the donation otherwise provide.

4. All unclaimed shares and dividends of any corporation incorporated under the laws of this state.

5. The proceeds of sale of timber, mineral, gravel or other natural products or property from school lands and state lands other than those granted for specific purposes.

6. The residue of the lands granted for payment of the bonds and accrued interest issued by Maricopa, Pima, Yavapai and Coconino counties, after the purpose of the grant has been satisfied, and the five per cent of the proceeds of sales of public lands lying within this state sold by the United States subsequent to admission of this state into the union, as granted by the enabling act.

B. The fund shall be and remain a perpetual fund and distributions from the fund pursuant to article X, section 7, Constitution of Arizona, plus monies derived from the rental of the lands and property, interest and accrued rent for that year credited pursuant to section 37‑295 and interest paid on installment sales, shall be used as follows:

1. If there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 6, outstanding qualified zone academy bonds pursuant to title 15, chapter 16, article 7 or outstanding state school trust revenue bonds issued to correct existing deficiencies prescribed by section 15‑2021, the state treasurer and the state land department shall annually transfer to the state school facilities revenue bond debt service fund established in section 15‑2054, the state school improvement revenue bond debt service fund established in section 15‑2084 and the state school trust revenue bond debt service fund the amount that is necessary to pay that fiscal year's debt service on outstanding state school facilities revenue bonds, qualified zone academy bonds and state school trust revenue bonds, before transferring amounts for any other uses.

2. If there are no outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 6 or if the amount of monies available under this subsection exceeds the amount required under paragraph 1 of this subsection, the monies are subject to legislative appropriation to the new school facilities fund established by section 15‑2041.

3. If the amount of monies available under this subsection exceeds the amount required under paragraphs 1 and 2 of this subsection, the legislature may annually appropriate an amount to be used as provided in section 15‑971, subsection H G, except that the amount appropriated may not exceed the amount appropriated from the permanent state school fund and from the rent and interest paid on installment sales for this purpose in fiscal year 2000‑2001.

4. Notwithstanding paragraphs 1, 2 and 3 of this subsection, from and after June 30, 2001, any expendable earnings under this subsection that exceed the fiscal year 2000‑2001 expendable earnings shall be deposited in the classroom site fund established by section 15‑977. END_STATUTE

Sec. 26. Section 41-1276, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1276. Truth in taxation levy for equalization assistance to school districts

A. On or before February 15 of each year, the joint legislative budget committee shall compute and transmit the truth in taxation rates for equalization assistance for school districts for the following fiscal year to:

1. The chairmen of the house of representatives ways and means committee and the senate finance committee or their successor committees.

2. The chairmen of the appropriations committees of the senate and the house of representatives or their successor committees.

B. The truth in taxation rates consist of the qualifying tax rate for a high school district or a common school district within a high school district that does not offer instruction in high school subjects pursuant to section 15‑971, subsection B, paragraph 1, and a qualifying tax rate for a unified district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects pursuant to section 15‑971, subsection B, paragraph 2 and a county equalization assistance for education tax rate pursuant to section 15‑994 that will offset the change in net assessed valuation of property that was subject to tax in the prior year.

C. The joint legislative budget committee shall compute the truth in taxation rates as follows:

1. Determine the statewide primary net assessed value for the preceding tax year as provided in section 42‑17151, subsection A, paragraph 3.

2. Determine the statewide primary net assessed value for the current tax year, excluding the net assessed value of property that was not subject to tax in the preceding year.

3. Divide the amount determined in paragraph 1 of this subsection by the amount determined in paragraph 2 of this subsection.

4. Adjust the qualifying tax rates and the county equalization assistance for education tax rate for the current fiscal year by the percentage determined in paragraph 3 of this subsection in order to offset the change in net assessed value.

D. Except as provided in subsections E and G of this section, the qualifying tax rate for a high school district or a common school district within a high school district that does not offer instruction in high school subjects, and the qualifying tax rate for a unified school district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects and the county equalization assistance for education tax rate for the following fiscal year shall be the rate determined by the joint legislative budget committee pursuant to subsection C of this section. The committee shall transmit the rates to the superintendent of public instruction and the county boards of supervisors by March 15 each year.

E. If the legislature proposes either qualifying tax rates or a county equalization assistance for education tax rate that exceeds exceed the truth in taxation rate:

1. The house of representatives ways and means committee and the senate finance committee or their successor committees shall hold a joint hearing on or before February 28 and publish a notice of a truth in taxation hearing that meets the following requirements:

(a) The notice shall be published twice in a newspaper of general circulation in this state that is published at the state capital. 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.

(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 41‑1276, Arizona Revised Statutes, the state legislature is notifying property taxpayers in Arizona of the legislature’s intention to raise the property tax levy over last year’s level.

The proposed tax increase will cause the taxes on a $100,000 home to increase by $_____.

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

(e) For purposes of computing the tax increase on a one hundred thousand dollar home as required by the notice, the joint meeting of the house of representatives ways and means committee and the senate finance committee or their successor committees shall consider the difference between the truth in taxation rate and the proposed increased rate.

2. The joint meeting of the house of representatives ways and means committee and the senate finance committee or their successor committees shall consider any motion to recommend the proposed tax rates to the full legislature by roll call vote.

F. In addition to publishing the truth in taxation notice under subsection E, paragraph 1 of this section, the joint meeting of the house of representatives ways and means committee and the senate finance committee or their successor committees shall issue a press release containing the truth in taxation notice.

G. Notwithstanding any other law, the legislature shall not adopt a state budget that provides for either qualifying tax rates pursuant to section 15‑971 or a county equalization assistance for education tax rate pursuant to section 15‑994 that exceeds exceed the truth in taxation rates computed pursuant to subsection A of this section unless the rates are adopted by a concurrent resolution approved by an affirmative roll call vote of two‑thirds of the members of each house of the legislature before the legislature enacts the general appropriations bill. If the resolution is not approved by two‑thirds of the members of each house of the legislature, the rates for the following fiscal year shall be the truth in taxation rates determined pursuant to subsection C of this section and shall be transmitted to the superintendent of public instruction and the county boards of supervisors.

H. Notwithstanding subsection C of this section and if approved by the qualified electors voting at a statewide general election, the legislature shall not set a qualifying tax rate that exceeds $2.1265 for a common or high school district or $4.253 for a unified school district. The legislature shall not set a county equalization assistance for education rate that exceeds $0.5123.

I. Pursuant to subsection C of this section, the qualifying tax rate in fiscal year 2006 2006-2007 for a common or high school district or a common school district within a high school district that does not offer instruction in high school subjects as provided in section 15-447 is $1.8090 $1.7394 and for a unified school district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15-447 is $3.6180 $3.4788. The county equalization assistance for education rate in fiscal year 2006 is $0.4358. END_STATUTE

Sec. 27. Section 42-1116, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1116. Disposition of tax revenues

A. The department shall promptly deposit, pursuant to sections 35‑146 and 35‑147, all monies it collects from the taxes administered pursuant to this article except the telecommunication services excise tax, separately accounting for each type of tax and each tax classification within each type of tax. At the same time the department of revenue shall also furnish copies of the transmittal schedules to the director of the department of administration.

B. Except as provided by subsection C of this section, the department shall deposit all monies and remittances received under this section to the credit of the following specific funds and accounts:

1. Amounts sufficient to meet the requirements for tax refunds to the tax refund account established in section 42‑1117.

2. Amounts sufficient to meet the requirements of urban revenue sharing to the urban revenue sharing fund established in section 43‑206.

3. Amounts collected pursuant to chapter 5, articles 1, and 5 and 9 of this title and section 42‑5352, subsection A, to the transaction privilege and severance tax clearing account established in by section 42‑5029.

4. Through June 30, 2010 amounts sufficient to meet the requirements of section 42‑3104 to the corrections fund.

5. Amounts sufficient to meet the requirements of section 49‑282, subsection B relating to the water quality assurance revolving fund.

6. All remaining monies to the state general fund.

C. From the monies and remittances received under this section, each month beginning July, 2001 the state treasurer shall transmit to the tourism and sports authority, established by title 5, chapter 8, for deposit in its facility revenue clearing account established by section 5‑834, the greater of:

1. One‑twelfth of the amount reported by the department pursuant to section 43‑209.

2. Two hundred ninety‑two thousand dollars per month for the first twelve month period, increased in each subsequent twelve month period by an additional eight per cent over the prior twelve months' distribution. END_STATUTE

Sec. 28. Section 42-5001, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5001. Definitions

In this article and article 2 of this chapter, unless the context otherwise requires:

1. "Business" includes all activities or acts, personal or corporate, engaged in or caused to be engaged in with the object of gain, benefit or advantage, either directly or indirectly, but not casual activities or sales.

2. "Distribution base" means the portion of the revenues derived from the tax levied by this article and articles 5, and 8 and 9 of this chapter designated for distribution to counties, municipalities and other purposes according to section 42‑5029, subsection D.

3. "Engaging", when used with reference to engaging or continuing in business, includes the exercise of corporate or franchise powers.

4. "Gross income" means the gross receipts of a taxpayer derived from trade, business, commerce or sales and the value proceeding or accruing from the sale of tangible personal property or service, or both, and without any deduction on account of losses.

5. "Gross proceeds of sales" means the value proceeding or accruing from the sale of tangible personal property without any deduction on account of the cost of property sold, expense of any kind or losses, but cash discounts allowed and taken on sales are not included as gross income.

6. "Gross income" and "gross proceeds of sales" do not include goods, wares or merchandise, or value thereof, returned by customers if the sale price is refunded either in cash or by credit, nor the value of merchandise traded in on the purchase of new merchandise when the trade‑in allowance is deducted from the sales price of the new merchandise before completion of the sale.

7. "Gross receipts" means the total amount of the sale, lease or rental price, as the case may be, of the retail sales of retailers, including any services that are a part of the sales, valued in money, whether received in money or otherwise, including all receipts, cash, credits and property of every kind or nature, and any amount for which credit is allowed by the seller to the purchaser without any deduction from the amount on account of the cost of the property sold, materials used, labor or service performed, interest paid, losses or any other expense. Gross receipts do not include cash discounts allowed and taken nor the sale price of property returned by customers if the full sale price is refunded either in cash or by credit.

8. "Person" or "company" includes an individual, firm, partnership, joint venture, association, corporation, estate or trust, this state, any county, city, town, district, other than a school district, or other political subdivision and any other group or combination acting as a unit, and the plural as well as the singular number.

9. "Qualifying community health center":

(a) Means an entity that is recognized as nonprofit under section 501(c)(3) of the United States internal revenue code, that is a community‑based, primary care clinic that has a community‑based board of directors and that is either:

(i) The sole provider of primary care in the community.

(ii) A nonhospital affiliated clinic that is located in a federally designated medically underserved area in this state.

(b) Includes clinics that are being constructed as qualifying community health centers.

10. "Qualifying health care organization" means an entity that is recognized as nonprofit under section 501(c) of the United States internal revenue code and that uses, saves or invests at least eighty per cent of all monies that it receives from all sources each year only for health and medical related educational and charitable services, as documented by annual financial audits prepared by an independent certified public accountant, performed according to generally accepted accounting standards and filed annually with the department. Monies that are used, saved or invested to lease, purchase or construct a facility for health and medical related education and charitable services are included in the eighty per cent requirement.

11. "Qualifying hospital" means any of the following:

(a) A licensed hospital which is organized and operated exclusively for charitable purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

(b) A licensed nursing care institution or a licensed residential care institution or a residential care facility operated in conjunction with a licensed nursing care institution or a licensed kidney dialysis center, which provides medical services, nursing services or health related services and is not used or held for profit.

(c) A hospital, nursing care institution or residential care institution which is operated by the federal government, this state or a political subdivision of this state.

(d) A facility that is under construction and that on completion will be a facility under subdivision (a), (b) or (c) of this paragraph.

12. "Retailer" includes every person engaged in the business classified under the retail classification pursuant to section 42‑5061 and, when in the opinion of the department it is necessary for the efficient administration of this article, includes dealers, distributors, supervisors, employers and salesmen, representatives, peddlers or canvassers as the agents of the dealers, distributors, supervisors or employers under whom they operate or from whom they obtain the tangible personal property sold by them, whether in making sales on their own behalf or on behalf of the dealers, distributors, supervisors or employers.

13. "Sale" means any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatever, including consignment transactions and auctions, of tangible personal property or other activities taxable under this chapter, for a consideration, and includes:

(a) Any transaction by which the possession of property is transferred but the seller retains the title as security for the payment of the price.

(b) Fabricating tangible personal property for consumers who furnish either directly or indirectly the materials used in the fabrication work.

(c) Furnishing, preparing or serving for a consideration any tangible personal property consumed on the premises of the person furnishing, preparing or serving the tangible personal property.

14. "Solar daylighting" means a device that is specifically designed to capture and redirect the visible portion of the solar beam, while controlling the infrared portion, for use in illuminating interior building spaces in lieu of artificial lighting.

15. "Solar energy device" means a system or series of mechanisms designed primarily to provide heating, to provide cooling, to produce electrical power, to produce mechanical power, to provide solar daylighting or to provide any combination of the foregoing by means of collecting and transferring solar generated energy into such uses either by active or passive means, including wind generator systems that produce electricity. Solar energy systems may also have the capability of storing solar energy for future use. Passive systems shall clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window.

16. "Tangible personal property" means personal property which may be seen, weighed, measured, felt or touched or is in any other manner perceptible to the senses.

17. "Tax year" or "taxable year" means either the calendar year or the taxpayer's fiscal year, if permission is obtained from the department to use a fiscal year as the tax period instead of the calendar year.

18. "Taxpayer" means any person who is liable for any tax which is imposed by this article.

19. "Wholesaler" or "jobber" means any person who sells tangible personal property for resale and not for consumption by the purchaser. END_STATUTE

Sec. 29. Section 42-5010, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5010. Rates; distribution base

A. The tax imposed by this article is levied and shall be collected at the following rates:

1. Five per cent of the tax base as computed for the business of every person engaging or continuing in this state in the following business classifications described in article 2 of this chapter:

(a) Transporting classification.

(b) Utilities classification.

(d) Pipeline classification.

(e) Private car line classification.

(f) Publication classification.

(g) Job printing classification.

(h) Prime contracting classification.

(i) Owner builder sales classification.

(j) Amusement classification.

(k) Restaurant classification.

(l) Personal property rental classification.

(m) Retail classification.

(n) Membership camping classification.

2. Five and one‑half per cent of the tax base as computed for the business of every person engaging or continuing in this state in the transient lodging classification described in section 42‑5070.

3. Three and one‑eighth per cent of the tax base as computed for the business of every person engaging or continuing in this state in the mining classification described in section 42‑5072.

4. Zero per cent of the tax base as computed for the business of every person engaging or continuing in this state in the commercial lease classification described in section 42‑5069.

B. Twenty per cent of the tax revenues collected at the rate prescribed by subsection A, paragraph 1 of this section from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (a) through (i) of this section is designated as distribution base for purposes of section 42‑5029.

C. Forty per cent of the tax revenues collected at the rate prescribed by subsection A, paragraph 1 of this section from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (j) through (n) (m) of this section is designated as distribution base for purposes of section 42‑5029.

D. Thirty‑two per cent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 3 of this section is designated as distribution base for purposes of section 42‑5029.

E. Fifty‑three and one‑third per cent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 4 of this section is designated as distribution base for purposes of section 42‑5029.

F. Fifty per cent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 2 of this section is designated as distribution base for purposes of section 42‑5029.

G. In addition to the rates prescribed by subsection A of this section, if approved by the qualified electors voting at a statewide general election, an additional rate increment is imposed and shall be collected through June 30, 2021. The taxpayer shall pay taxes pursuant to this subsection at the same time and in the same manner as under subsection A of this section. The department shall separately account for the revenues collected with respect to the rates imposed pursuant to this subsection and the state treasurer shall distribute all of those revenues in the manner prescribed by section 42‑5029, subsection E. The rates imposed pursuant to this subsection shall not be considered local revenues for purposes of article IX, section 21, Constitution of Arizona. The additional tax rate increment is levied at the rate of six‑tenths of one per cent of the tax base of every person engaging or continuing in this state in a business classification listed in subsection A, paragraph 1 of this section.

H. Any increase in the rate of tax that is imposed by this chapter and that is enacted by the legislature or by a vote of the people does not apply with respect to contracts entered into by prime contractors or pursuant to written bids made by prime contractors on or before the effective date of the legislation or the date of the election enacting the increase. To qualify for the exemption under this subsection, the prime contractor must maintain sufficient documentation, in a manner and form prescribed by the department, to verify the date of the contract or written bid.

I. For taxpayers taxable under this chapter other than prime contractors taxable pursuant to section 42‑5075:

1. Any increase in the rate of tax that is levied by this article or article 2 of this chapter enacted by the legislature or by a vote of the people does not apply for a period of one hundred twenty days from the date of the tax rate increase to the gross proceeds of sales or gross income from the business of the taxpayer with respect to written contracts entered into before the effective date of the tax rate increase unless the taxpayer has entered into a contract that contains a provision that entitles the taxpayer to recover from the purchaser the amount of the additional tax levied.

2. The provisions of this subsection apply without regard to the accounting method used by the taxpayer to report the taxes imposed under article 2 of this chapter.

3. The provisions of this subsection shall not be considered in determining the rate of tax imposed under chapter 6, article 3 of this title. END_STATUTE

Sec. 30. Section 42-5029, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5029. Remission and distribution of monies; definition

A. The department shall deposit, pursuant to sections 35‑146 and 35‑147, all revenues collected under this article and articles 4, 5, and 8 and 9 of this chapter pursuant to section 42‑1116, separately accounting for:

1. Payments of estimated tax under section 42‑5014, subsection D.

2. Revenues collected pursuant to section 42‑5070.

3. Revenues collected under this article and article 5 of this chapter from and after June 30, 2000 from sources located on Indian reservations in this state.

4. Revenues collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D.

B. The department shall credit payments of estimated tax to an estimated tax clearing account and each month shall transfer all monies in the estimated tax clearing account to a fund designated as the transaction privilege and severance tax clearing account. The department shall credit all other payments to the transaction privilege and severance tax clearing account, separately accounting for the monies designated as distribution base under sections 42‑5010, 42‑5164, 42‑5205, and 42‑5353 and 42‑5409. Each month the department shall report to the state treasurer the amount of monies collected pursuant to this article and articles 4, 5, and 8 and 9 of this chapter.

C. On notification by the department, the state treasurer shall distribute the monies deposited in the transaction privilege and severance tax clearing account in the manner prescribed by this section and by sections 42‑5164, 42‑5205, and 42‑5353 and 42‑5409, after deducting warrants drawn against the account pursuant to sections 42‑1118 and 42‑1254.

D. Of the monies designated as distribution base the department shall:

1. Pay twenty‑five per cent to the various incorporated municipalities in this state in proportion to their population to be used by the municipalities for any municipal purpose.

2. Pay 38.08 per cent to the counties in this state by averaging the following proportions:

(a) The proportion that the population of each county bears to the total state population.

(b) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and sections section 42‑5353 and 42‑5409 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and sections section 42‑5353 and 42‑5409 throughout the state for the calendar month.

3. Pay an additional 2.43 per cent to the counties in this state as follows:

(a) Average the following proportions:

(i) The proportion that the assessed valuation used to determine secondary property taxes of each county, after deducting that part of the assessed valuation that is exempt from taxation at the beginning of the month for which the amount is to be paid, bears to the total assessed valuations used to determine secondary property taxes of all the counties after deducting that portion of the assessed valuations that is exempt from taxation at the beginning of the month for which the amount is to be paid. Property of a city or town that is not within or contiguous to the municipal corporate boundaries and from which water is or may be withdrawn or diverted and transported for use on other property is considered to be taxable property in the county for purposes of determining assessed valuation in the county under this item.

(ii) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and sections section 42‑5353 and 42‑5409 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and sections section 42‑5353 and 42-5409 throughout the state for the calendar month.

(b) If the proportion computed under subdivision (a) of this paragraph for any county is greater than the proportion computed under paragraph 2 of this subsection, the department shall compute the difference between the amount distributed to that county under paragraph 2 of this subsection and the amount that would have been distributed under paragraph 2 of this subsection using the proportion computed under subdivision (a) of this paragraph and shall pay that difference to the county from the amount available for distribution under this paragraph. Any monies remaining after all payments under this subdivision shall be distributed among the counties according to the proportions computed under paragraph 2 of this subsection.

4. After any distributions required by sections 42‑5030, 42‑5030.01, 42‑5031, 42‑5032 and 42‑5032.01, and after making any transfer to the water quality assurance revolving fund as required by section 49‑282, subsection B, credit the remainder of the monies designated as distribution base to the state general fund. From this amount:

(a) The legislature shall annually appropriate to:

(i) The department of revenue sufficient monies to administer and enforce this article and articles 5, and 8 and 9 of this chapter.

(ii) The department of economic security monies to be used for the purposes stated in title 46, chapter 1.

(iii) The Arizona arts endowment fund established by section 41‑986, the full amount by which revenues derived from the amusement classification pursuant to section 42‑5073 for the current fiscal year exceed the revenues that were derived from that classification in fiscal year 1993‑1994, except that this amount shall not exceed two million dollars through fiscal year 2008‑2009.

(iv) The firearms safety and ranges fund established by section 17‑273, fifty thousand dollars derived from the taxes collected from the retail classification pursuant to section 42‑5061 for the current fiscal year.

(b) The state treasurer shall transfer to the tourism fund an amount equal to the sum of the following:

(i) Three and one‑half per cent of the gross revenues derived from the transient lodging classification pursuant to section 42‑5070 during the preceding fiscal year.

(ii) Three per cent of the gross revenues derived from the amusement classification pursuant to section 42‑5073 during the preceding fiscal year.

(iii) Two per cent of the gross revenues derived from the restaurant classification pursuant to section 42‑5074 during the preceding fiscal year.

E. If approved by the qualified electors voting at a statewide general election, all monies collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D shall be distributed each fiscal year pursuant to this subsection. The monies distributed pursuant to this subsection are in addition to any other appropriation, transfer or other allocation of public or private monies from any other source and shall not supplant, replace or cause a reduction in other school district, charter school, university or community college funding sources. The monies shall be distributed as follows:

1. If there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 7, each month one‑twelfth of the amount that is necessary to pay the fiscal year's debt service on outstanding state school improvement revenue bonds for the current fiscal year shall be transferred each month to the school improvement revenue bond debt service fund established by section 15‑2084. The total amount of bonds for which these monies may be allocated for the payment of debt service shall not exceed a principal amount of eight hundred million dollars exclusive of refunding bonds and other refinancing obligations.

2. After any transfer of monies pursuant to paragraph 1 of this subsection, twelve per cent of the remaining monies collected during the preceding month shall be transferred to the technology and research initiative fund established by section 15‑1648 to be distributed among the universities for the purpose of investment in technology and research‑based initiatives.

3. After the transfer of monies pursuant to paragraph 1 of this subsection, three per cent of the remaining monies collected during the preceding month shall be transferred to the workforce development account established in each community college district pursuant to section 15‑1472 for the purpose of investment in workforce development programs.

4. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the amount a community college that is owned, operated or chartered by a qualifying Indian tribe on its own Indian reservation would receive pursuant to section 15‑1472, subsection D, paragraph 2 if it were a community college district shall be distributed each month to the treasurer or other designated depository of a qualifying Indian tribe. Monies distributed pursuant to this paragraph are for the exclusive purpose of providing support to one or more community colleges owned, operated or chartered by a qualifying Indian tribe and shall be used in a manner consistent with section 15‑1472, subsection B. For purposes of this paragraph, "qualifying Indian tribe" has the same meaning as defined in section 42‑5031.01, subsection D.

5. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the following amounts shall be transferred each month to the department of education for the increased cost of basic state aid under section 15‑971 due to added school days and associated teacher salary increases enacted in 2000:

(a) In fiscal year 2001‑2002, $15,305,900.

(b) In fiscal year 2002‑2003, $31,530,100.

(d) In fiscal year 2004‑2005, $66,957,200.

(e) In fiscal year 2005‑2006 and each fiscal year thereafter, $86,280,500.

6. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, seven million eight hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the department of education to be used for school safety as provided in section 15‑154 and two hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments to the department of education to be used for the character education matching grant program as provided in section 15‑154.01.

7. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, no more than seven million dollars may be appropriated by the legislature each fiscal year to the department of education to be used for accountability purposes as described in section 15‑241 and title 15, chapter 9, article 8.

8. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one million five hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the failing schools tutoring fund established by section 15‑241.

9. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, twenty‑five million dollars shall be transferred each fiscal year to the state general fund to reimburse the general fund for the cost of the income tax credit allowed by section 43‑1072.01.

10. After the payment of monies pursuant to paragraphs 1 through 9 of this subsection, the remaining monies collected during the preceding month shall be transferred to the classroom site fund established by section 15‑977. The monies shall be allocated as follows in the manner prescribed by section 15‑977:

(a) Forty per cent shall be allocated for teacher compensation based on performance.

(b) Twenty per cent shall be allocated for increases in teacher base compensation and employee related expenses.

F. The department shall credit the remainder of the monies in the transaction privilege and severance tax clearing account to the state general fund, subject to any distribution required by section 42‑5030.01.

G. Notwithstanding subsection D of this section, if a court of competent jurisdiction finally determines that tax monies distributed under this section were illegally collected under this article or articles 5, and 8 and 9 of this chapter and orders the monies to be refunded to the taxpayer, the department shall compute the amount of such monies that was distributed to each city, town and county under this section. The department shall notify the state treasurer of that amount plus the proportionate share of additional allocated costs required to be paid to the taxpayer. Each city's, town's and county's proportionate share of the costs shall be based on the amount of the original tax payment each municipality and county received. Each month the state treasurer shall reduce the amount otherwise distributable to the city, town and county under this section by one thirty‑sixth of the total amount to be recovered from the city, town or county until the total amount has been recovered, but the monthly reduction for any city, town or county shall not exceed ten per cent of the full monthly distribution to that entity. The reduction shall begin for the first calendar month after the final disposition of the case and shall continue until the total amount, including interest and costs, has been recovered.

H. On receiving a certificate of default from the greater Arizona development authority pursuant to section 41‑1554.06 or 41‑1554.07 and to the extent not otherwise expressly prohibited by law, the state treasurer shall withhold from the next succeeding distribution of monies pursuant to this section due to the defaulting political subdivision the amount specified in the certificate of default and immediately deposit the amount withheld in the greater Arizona development authority revolving fund. The state treasurer shall continue to withhold and deposit the monies until the greater Arizona development authority certifies to the state treasurer that the default has been cured. In no event may the state treasurer withhold any amount that the defaulting political subdivision certifies to the state treasurer and the authority as being necessary to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued before the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to this section.

I. Except as provided by sections 42‑5033 and 42‑5033.01, the population of a county, city or town as determined by the most recent United States decennial census plus any revisions to the decennial census certified by the United States bureau of the census shall be used as the basis for apportioning monies pursuant to subsection D of this section.

J. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 and that is a political subdivision of this state. END_STATUTE

Sec. 31. Section 42-5069, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5069. Commercial lease classification; definitions

A. The commercial lease classification is comprised of the business of leasing for a consideration the use or occupancy of real property.

B. A person who, as a lessor, leases or rents for a consideration under one or more leases or rental agreements the use or occupancy of real property that is used by the lessee for commercial purposes is deemed to be engaged in business and subject to the tax imposed by article 1 of this chapter, but this subsection does not include leases or rentals of real property used for residential or agricultural purposes.

C. The commercial lease classification does not include:

1. Any business activities which that are classified under the transient lodging classification.

2. Activities engaged in by the Arizona exposition and state fair board or county fair commissions in connection with events sponsored by those entities.

3. Leasing real property to a lessee who subleases the property if the lessee is engaged in business classified under the commercial lease classification or the transient lodging classification.

4. Leasing real property pursuant to a written lease agreement entered into before December 1, 1967. This exclusion does not apply to:

(a) the businesses of hotels, guest houses, dude ranches and resorts, rooming houses, apartment houses, office buildings, automobile storage garages, parking lots or tourist camps, or to the extension or renewal of any such written lease agreement.

(b) Any such written lease agreement unless a rental occupancy tax is paid pursuant to article 9 of this chapter.

5. Leasing real property by a corporation to an affiliated corporation. For the purposes of this paragraph, "affiliated corporation" means a corporation which that owns or controls at least eighty per cent of the lessor, that is at least eighty per cent owned or controlled by the lessor or that is at least eighty per cent owned or controlled by a corporation which that also owns or controls at least eighty per cent of the lessor. Ownership and control are determined by reference to the voting shares of a corporation.

6. Leasing real property for sublease if the tenant in possession of the property is subject to the rental occupancy tax pursuant to article 9 of this chapter.

7. Leasing real property for boarding horses.

8. Leasing or renting real property or the right to use real property at exhibition events in this state sponsored, operated or conducted by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the organization is associated with major league baseball teams or a national touring professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

9. Leasing or renting real property or the right to use real property for use as a rodeo featuring primarily farm and ranch animals in this state sponsored, operated or conducted by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the internal revenue code and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

10. Leasing or renting dwelling units, lodging facilities or trailer or mobile home spaces if the units, facilities or spaces are intended to serve as the principal or permanent place of residence for the lessee or renter or if the unit, facility or space is leased or rented to a single tenant thirty or more consecutive days.

11. Leasing or renting real property and improvements for use primarily for religious worship by a nonprofit organization that is exempt from taxation under section 501(c)(3) of the internal revenue code and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

12. Leasing or renting real property used for agricultural purposes under either of the following circumstances:

(a) The lease or rental is between family members, trusts, estates, corporations, partnerships, joint venturers or similar entities, or any combination thereof, if the individuals or at least eighty per cent of the beneficiaries, shareholders, partners or joint venturers share a family relationship as parents or ancestors of parents, children or descendants of children, siblings, cousins of the first degree, aunts, uncles, nieces or nephews of the first degree, spouses of any of the listed relatives and listed relatives by the half-blood or by adoption.

(b) The lessor leases or rents real property used for agricultural purposes under no more than three leases or rental agreements.

13. Leasing, renting or granting the right to use real property to vendors or exhibitors by a trade or industry association which that is a qualifying organization pursuant to section 513(d)(3)(C) of the internal revenue code for a period not to exceed twenty-one days in connection with an event that meets all of the following conditions:

(a) Where The majority of such vending or exhibition activities relate to the nature of the trade or business sponsoring the event.

(b) The event is held in conjunction with a formal business meeting of the trade or industry association.

14. Leasing, renting or granting the right to use real property for a period not to exceed twenty-one days by a coliseum, civic center, civic plaza, convention center, auditorium or arena owned by this state or any of its political subdivisions.

15. Leasing or subleasing real property used by a nursing care institution as defined in section 36-401 that is licensed pursuant to title 36, chapter 4.

16. Leasing or renting a transportation facility as provided in section 28‑7705, subsections A and B.

17. Granting or providing rights to real property that constitute a profit à prendre for the severance of minerals, including all rights to use the surface or subsurface of the property as is necessary or convenient to the right to sever the minerals. This paragraph does not exclude from the commercial lease classification leasehold rights to the real property that are granted in addition to and not included within the right of profit à prendre, but the tax base for the grant of such a leasehold right, if the gross income derived from the grant is not separately stated from the gross income derived from the grant of the profit à prendre, shall not exceed the fair market value of the leasehold rights computed after excluding the value of all rights under the profit à prendre. As used in For the purposes of this paragraph, "profit à prendre" means a right to use the land of another to mine minerals, and carries with it the right of entry and the right to remove and take the minerals from the land and also includes the right to use the surface of the land as is necessary and convenient for exercise of the profit.

D. The tax base for the commercial lease classification is the gross proceeds of sales or gross income derived from the business, but reimbursements to the lessor for utility service shall be deducted from the tax base.

E. Notwithstanding section 42‑1104, subsection B, paragraph 1, subdivision (b) and paragraph 2, the failure to file tax returns for the commercial lease classification that report gross income derived from any agreement that constitutes, in whole or in part, a grant of a right of profit à prendre for the severance of minerals does not constitute an exception to the general rule for the statute of limitations.

F. For the purposes of this section:

1. "Leasing" includes renting.

2. "Real property" includes any improvements, rights or interest in such property. END_STATUTE

Sec. 32. Repeal

Section 42-5077, Arizona Revised Statutes, is repealed.

Sec. 33. Section 42-5201, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5201. Definitions

In this article, unless the context otherwise requires:

1. "Gross value of production" means the sum of the value of production determined for each metalliferous mineral mined by the severer.

2. "Metallic product" means any metalliferous mineral or metalliferous mineral product.

3. "Metalliferous mineral" means copper, gold, silver, molybdenum or other metal or any ore or substance containing such metals including turquoise that is severed within this state.

4. "Metalliferous mineral product" means the material resulting from the processing of a metalliferous mineral including any concentrate of an ore, any precipitate of a metalliferous mineral or any metal bullion.

5. "Mining" means the activity of extracting from the earth substances that become metalliferous minerals and:

(a) In the case of ore that is customarily milled, concentrated, agitation leached, or vat leached, mining includes all activity from the breaking of ground to the delivery of ore to the primary crusher, including blasting, loading, hauling, including hauling of waste, and dumping. The quantity mined shall be measured after final crushing.

(b) In the case of ore that is not customarily milled, concentrated, agitation leached, or vat leached, mining includes all activity from the breaking of ground to the delivery of the ore to the reduction works, or if the reduction works are located away from the situs of the mining activity, to the point at which the ore is loaded on a means of transport to the reduction works. The quantity mined shall be measured upon delivery to the reduction works, or if the reduction works are located away from the situs of mining activity, upon loading on a means of transport to the reduction works.

(c) In the case of dump or in situ leaching where the leach liquor is precipitated, mining includes all activity from the breaking of ground, if any, to the delivery of the leach liquor to the facility at which precipitation takes place. The quantity mined shall be measured upon precipitation.

(d) In the case of dump or in situ leaching where the leach liquor is converted through a chemical, electrolytic or other means directly from a liquor to a solid metallic mass, mining includes all activity from the breaking of ground, if any, to the delivery of the leach liquor to the solvent extraction or similar facility. The quantity mined shall be measured upon delivery to the solvent extraction facility.

6. "Mining costs" means production costs incurred in mining.

7. "Out-of-state processing costs" means processing costs incurred by the severer out of this state including freight charges incurred for shipping metallic products out of this state.

8. "Price" means the per unit consideration a severer receives from the sale during the reporting period of a metallic product whether sold within or without this state. If a severer engages in manufacturing, fabricating or other transforming activities of a refined metalliferous mineral product before making a sale, the charges made by the severer for such activities shall not be a part of the consideration in establishing the price. If no sales occurred during the reporting period, price shall be derived from the last reporting period in which sales occurred.

9. "Processing" means any non-mining activity that transforms metalliferous minerals into metalliferous mineral products including precipitating, crushing, concentrating, smelting and refining. "Processing" does not include manufacturing or fabrication or other transformation activities beyond refining.

10. "Processing costs" means production costs other than mining costs.

11. "Production costs" means the costs incurred by the severer in mining and processing until the point of sale including but not limited to energy, fuel, labor, supplies, depreciation, transportation and other expenses reasonably allocable to mining or processing including but not limited to labor benefits, property taxes, lease payments for equipment used in mining or processing and support services such as maintenance, security and administration if such services are site specific. Production costs also include selling expenses but do not include severance taxes or depletion expenses. Production costs also do not include corporate salary and office expenses, income taxes, interest expense on debt or corporate capital charges.

12. "Recoverable units" means metalliferous mineral units based on processing or contractual recoveries during the period of production.

13. "Sale" shall have the meaning ascribed to it in section 42‑5001.

14. "Severer" means a person engaging in the business of mining or timbering.

15. "Severing" means mining or timbering.

16. "Timber product" means poles, saw logs, pulpwood or firewood which result from timbering.

17. "Timbering" includes all activities of a severer within this state resulting in the production of a timber product, including felling, limbing, bucking, skidding, loading and all activities ordinarily required under the terms of United States forest service timber contracts granted under 36 Code of Federal Regulations section 223.1, whether performed by the severer or a contractor of the severer.

18. 16. "Value of production" means the price multiplied by the recoverable units of a metallic product mined by the severer. END_STATUTE

Sec. 34. Section 42-5202, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5202. Levy of tax

A. There is levied on any severer, and the department shall collect, an excise tax, denominated as a severance tax.

B. Except as provided in section 42-5203, the severance tax is in lieu of any other tax imposed upon the activities of timbering or mining and processing by article 1 of this chapter.

C. The amount of the severance tax levied on a severer engaging in the business of mining shall be determined by multiplying the net severance base by two and one-half per cent.

D. The amount of the severance tax levied on a severer engaging in the business of timbering shall be:

1. Two dollars thirteen cents per thousand board feet for timber products that are derived from ponderosa pine.

2. One dollar fifty-one cents per thousand board feet for timber products derived from all species except ponderosa pine. END_STATUTE

Sec. 35. Repeal

Title 42, chapter 5, article 9, Arizona Revised Statutes, is repealed.

Sec. 36. Section 42-17051, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17051. Limit on county, municipal and community college primary property tax levy

A. In addition to any other limitation that may be imposed, a county, charter county, city, charter city, town or community college district shall not levy primary property taxes in any year in excess of an aggregate amount computed as follows:

1. Determine the maximum allowable primary property tax levy limit for the jurisdiction for the preceding tax year.

2. Multiply the amount determined in paragraph 1 by 1.02.

3. Determine the assessed value for the current tax year of all property in the political subdivision that was subject to tax in the preceding tax year.

4. Divide the dollar amount determined in paragraph 3 by one hundred and then divide the dollar amount determined in paragraph 2 by the resulting quotient. The result, rounded to four decimal places, is the maximum allowable tax rate for the political subdivision.

5. Determine the finally equalized valuation of all property, less exemptions, appearing on the tax roll for the current tax year including an estimate of the personal property tax roll determined pursuant to section 42‑17053.

6. Divide the dollar amount determined in paragraph 5 by one hundred and then multiply the resulting quotient by the rate determined in paragraph 4. The resulting product is the maximum allowable primary property tax levy limit for the current year for all political subdivisions.

7. The allowable levy of primary property taxes for the current fiscal year for all political subdivisions is the maximum allowable primary property tax levy limit less any amounts required to reduce the levy pursuant to subsections B and C of this section.

B. Any monies that a political subdivision received from primary property taxation in excess of the sum of the amount of taxes collectible pursuant to section 42‑15054 and the allowable levy determined under subsection A of this section shall be maintained in a separate fund and used to reduce the primary property tax levy in the following year. Monies that are received and that are attributable to the payment of delinquent taxes that were properly assessed in prior years shall not be applied to reduce the levy in the following year.

C. If, pursuant to section 41‑1279.07, the auditor general determines that in any fiscal year a county has exceeded its expenditure limitation, the allowable levy of primary property taxes of the county determined under subsection A of this section shall be reduced in the fiscal year following the auditor general's hearing by the amount of the expenditures that exceeded the county's expenditure limitation.

D. The limitations prescribed by this section do not apply to levies made pursuant to section 15-994 or article 5 of this chapter.

E. The levy limitation for a political subdivision is considered to be increased each year to the maximum permissible limit under subsection A of this section regardless of whether the county, city, town or district actually levies taxes in any year up to the maximum permissible amount.

F. For purposes of determining a county's levy limit under this article, remote municipal property, as defined in section 42‑15251, is considered to be taxable property in the county. END_STATUTE

Sec. 37. Section 42-17201, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17201. County levy limit override

A. The board of supervisors of a county may conduct an election to authorize a property tax levy that is not within the limitations on primary property taxation otherwise prescribed by section 42‑17051.

B. In order to levy taxes exceeding the limitations prescribed on primary property tax, the board of supervisors shall adopt a resolution, by an affirmative vote of at least two-thirds of its membership, requesting the voters to approve a secondary property tax levy.

C. The board of supervisors shall submit the question to the qualified electors of the county at a special an election held on the third Tuesday in May before the beginning of the fiscal year in which the taxes are to be levied first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

D. In the resolution requesting the voters to approve the levy, the board shall state:

1. The number of years in which the authority to levy taxes in excess of the limitations otherwise prescribed is to be in effect. The board shall not request authority from the voters for a period of less than two years nor more than seven years.

2. The purpose for providing revenue to the county.

3. The maximum dollar amount of secondary property tax that may be collected in each year of the authority if voters approve the levy.

4. The estimated secondary property tax rate that will be levied in the first year if the voters approve the levy.

E. If the levy is approved by the voters, the maximum amount of taxes that the board may levy for any year in which the authority is in effect is the amount stated in the resolution requesting voter approval of the levy. The board shall levy the tax in the same manner as county secondary property taxes as provided in section 42‑17151.

F. The board may use monies it collects pursuant to this section only for the purposes stated in the resolution requesting approval of the levy. If an unexpended balance of the monies collected pursuant to this section remains after satisfying the requirements of the resolution requesting the approval of the levy, the board shall use the balance to reduce the levy in the following year. If the balance exceeds the requirements for the following year or if the authority granted by the voters to collect the taxes pursuant to this section expires and is not renewed, the board shall use the balance to reduce the county primary property tax in the following year.

G. The board shall deposit and separately account for the amounts collected pursuant to this section in a fund in the county treasury.

H. The amounts collected pursuant to this section:

1. Shall not be included in the primary property tax levy limitation prescribed by section 42-17051 for any subsequent year, except as provided in this section.

2. Shall be collected from a levy of secondary property taxes.

3. Are not subject to limitations on taxes prescribed by article IX, section 18, Constitution of Arizona. END_STATUTE

Sec. 38. Section 42-17202, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17202. Community college district levy limit override

A. If the governing board of a community college district determines that the amounts permitted to be levied as primary property taxes in any year pursuant to section 42‑17051 would provide insufficient revenue to the district, the board may conduct an election to authorize a property tax levy that is not within the limitations on primary property taxation.

B. In order to levy taxes exceeding the limitations prescribed on primary property tax, the board shall adopt a resolution, by an affirmative vote of at least two‑thirds of its membership, requesting the voters to approve a secondary property tax levy.

C. The resolution shall state:

1. The maximum dollar amount of secondary property tax that may be collected in each year of the authority if the voters approve the levy.

2. The number of years for which the authority to levy in excess of the levy limitation is to be in effect, which shall be at least two years but not more than seven years.

D. The election shall be held at a regularly scheduled election on the first Tuesday after the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d).

E. The impact of the proposal shall appear on the ballot and in publicity pamphlets in the same manner as provided for local alternative expenditure limitations pursuant to section 41‑563.03.

F. If a majority of the qualified electors voting at the election approves, the governing board may levy the additional amount as authorized in the election. The additional amount approved by the voters:

1. Shall not be included in computing the primary property tax levy limitation for any subsequent year.

2. Shall be collected from a levy of secondary property taxes.

3. Is not subject to the limitations on taxes prescribed by article IX, section 18, Constitution of Arizona. END_STATUTE

Sec. 39. Section 42-17203, Arizona Revised Statutes, is amended to read:

START_STATUTE42-17203. County levy for community college; election

A. A county that is not in an organized community college district may conduct an election to authorize a property tax levy for community college purposes that is not within the limitation on primary property taxes that is otherwise prescribed by section 42‑17051.

B. In order to levy taxes for community college purposes in excess of the limitations otherwise prescribed on primary property tax, the board of supervisors of a county that is not in an organized community college district shall adopt a resolution by an affirmative vote of at least two‑thirds of its membership requesting the voters to approve a community college reimbursement levy and setting the time and place for the election.

C. If the board approves the resolution within six months before the time in which a general election is to be conducted but not later than sixty days before the general election, the board shall submit the question to the voters at the general election. If the board approves the resolution, but not within six months before the time in which a general election is to be conducted, the board shall submit the question to the voters at a special election held on the third Tuesday in May. The board shall submit the questions to the qualified electors at an election held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). Except as otherwise provided in this section, the election shall be held according to the provisions applying to bond issuance elections in title 35, chapter 3, article 3.

D. In the resolution requesting the voters to approve the levy and setting the time and place for the election, the board shall state:

1. The estimated maximum dollar amount of secondary property taxes that could be collected in the first year if the voters approve the levy for payment of tuition under section 15‑1469, subsection B, paragraph 1.

2. The estimated secondary property tax rate that will be levied if the voters approve the levy.

3. The estimated decrease of the primary property tax rate if the voters approve the levy for the payment of tuition under section 15‑1469, subsection B, paragraph 1.

4. That the amount of community college reimbursement levy will vary from year to year to pay tuition under section 15‑1469, subsection B, paragraph 1.

5. The maximum dollar amount of secondary property taxes that could be collected in the first year if the voters approve the levy for payment of tuition under section 15‑1469, subsection B, paragraph 2 or to establish a campus in the county that is affiliated with a community college district as provided in subsection E of this section.

6. The maximum growth rate that will be allowed for secondary property taxes collected in each subsequent year if the voters approve the levy for payment of tuition under section 15-1469, subsection B, paragraph 2 or to establish a campus in the county that is affiliated with a community college district as provided in subsection E of this section.

E. The board may use monies it collects under this section to either:

1. Reimburse the costs of students pursuant to section 15‑1469, subsection B, paragraphs 1 and 2 as approved by the voters.

2. Establish a campus in the county that is affiliated with a community college district.

F. If the levy is approved by the voters for purposes of reimbursement pursuant to section 15-1469, the maximum amount of taxes that the board may levy for any year in which the authority is in effect is the amount of reimbursement pursuant to section 15-1469, subsection B, paragraph 1 and any portion of the reimbursement as specified in the resolution pursuant to subsection D, paragraphs 5 and 6 of this section as approved by the board of supervisors.

G. The board of supervisors shall levy the tax in the same manner as county property taxes as provided in section 42-17151. If an unexpended balance of the monies collected pursuant to this section remains after satisfying the requirements of subsection E of this section, the board shall use the balance to reduce the community college levy under this section in the following year. If the balance exceeds the requirements for the following year, the board shall use the balance to reduce any other property tax authorized by law to be collected by the county.

H. The amounts collected pursuant to this section:

1. Shall not be included in the levy limitation pursuant to section 42‑17051 for any subsequent year.

2. Shall be collected from a levy of secondary property taxes.

3. Except as provided in this section, are exempt pursuant to article IX, section 19, subsection (5), Constitution of Arizona, from levy limitations. END_STATUTE

Sec. 40. Section 43-222, Arizona Revised Statutes, as amended by Laws 2005, chapter 12, section 1, chapter 264, section 1, chapter 316, section 2 and chapter 317, section 10, is amended to read:

START_STATUTE43-222. Income tax credit review schedule

Each year the joint legislative income tax credit review committee shall review the following income tax credits:

1. In 2005, sections 43‑1087, 43‑1088 and 43‑1175.

2. In 2006, sections 43‑1073, 43‑1089, 43‑1089.01, 43‑1089.02, 43‑1090, 43‑1176 and 43‑1181.

3. In 2007, sections 43‑1077, 43‑1078, 43‑1079, 43‑1080, 43‑1165, 43‑1166, 43‑1167 and 43‑1169.

4. In 2008, sections 43‑1074.01, 43‑1081, 43‑1168, 43‑1170 and 43‑1178.

5. In 2009, sections 43‑1076, 43‑1081.01, 43‑1083, 43‑1084, 43‑1162 and 43‑1170.01.

6. In 2010, sections 43‑1075, and 43‑1163.

7. In 2010, sections 43‑1079.01, and 43-1090.01, 43-1163, 43‑1167.01 and 43‑1182.

8. 7. In 2011, section sections 43‑1074.02, 43-1085 and 43-1184. END_STATUTE

Sec. 41. Repeal

Section 43-222, Arizona Revised Statutes, as amended by Laws 2005, chapter 292, section 1, is repealed.

Sec. 42. Section 43-1011, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1011. Taxes and tax rates

There shall be levied, collected and paid for each taxable year upon the entire taxable income of every resident of this state and upon the entire taxable income of every nonresident which is derived from sources within this state taxes determined in the following manner:

1. For taxable years beginning from and after December 31, 1996 through December 31, 1997:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 - $10,000 2.90% of taxable income

$10,001 - $25,000 $290, plus 3.30% of the excess over $10,000

$25,001 - $50,000 $785, plus 3.90% of the excess over $25,000

$50,001 - $150,000 $1,760, plus 4.80% of the excess over $50,000

$150,001 and over $6,560, plus 5.17% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 - $20,000 2.90% of taxable income

$20,001 - $50,000 $580, plus 3.30% of the excess over $20,000

$50,001 - $100,000 $1,570, plus 3.90% of the excess over $50,000

$100,001 - $300,000 $3,520, plus 4.80% of the excess over $100,000

$300,001 and over $13,120, plus 5.17% of the excess over $300,000

2. For taxable years beginning from and after December 31, 1997 through December 31, 1998:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 - $10,000 2.88% of taxable income

$10,001 - $25,000 $288, plus 3.24% of the excess over $10,000

$25,001 - $50,000 $774, plus 3.82% of the excess over $25,000

$50,001 - $150,000 $1,729, plus 4.74% of the excess over $50,000

$150,001 and over $6,469, plus 5.10% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 - $20,000 2.88% of taxable income

$20,001 - $50,000 $576, plus 3.24% of the excess over $20,000

$50,001 - $100,000 $1,548, plus 3.82% of the excess over $50,000

$100,001 - $300,000 $3,458, plus 4.74% of the excess over $100,000

$300,001 and over $12,938, plus 5.10% of the excess over $300,000

3. For taxable years beginning from and after December 31, 1998 through December 31, 2005:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 - $10,000 2.87% of taxable income

$10,001 - $25,000 $287, plus 3.20% of the excess over $10,000

$25,001 - $50,000 $767, plus 3.74% of the excess over $25,000

$50,001 - $150,000 $1,702, plus 4.72% of the excess over $50,000

$150,001 and over $6,422, plus 5.04% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 - $20,000 2.87% of taxable income

$20,001 - $50,000 $574, plus 3.20% of the excess over $20,000

$50,001 - $100,000 $1,534, plus 3.74% of the excess over $50,000

$100,001 - $300,000 $3,404, plus 4.72% of the excess over $100,000

$300,001 and over $12,844, plus 5.04% of the excess over $300,000

4. For taxable years beginning from and after December 31, 2005:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 - $10,000 2.59% of taxable income

$10,001 - $25,000 $259, plus 2.88% of the excess over $10,000

$25,001 - $50,000 $691, plus 3.36% of the excess over $25,000

$50,001 - $150,000 $1,531, plus 4.24% of the excess over $50,000

$150,001 and over $5,771, plus 4.54% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 - $20,000 2.59% of taxable income

$20,001 - $50,000 $518, plus 2.88% of the excess over $20,000

$50,001 - $100,000 $1,382, plus 3.36% of the excess over $50,000

$100,001 - $300,000 $3,062, plus 4.24% of the excess over $100,000

$300,001 and over $11,542, plus 4.54% of the excess over $300,000 END_STATUTE

Sec. 43. Section 43-1022, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1022. Subtractions from Arizona gross income

In computing Arizona adjusted gross income, the following amounts shall be subtracted from Arizona gross income:

1. The amount of exemptions allowed by section 43‑1023.

2. Benefits, annuities and pensions in an amount totaling not more than two thousand five hundred dollars received from one or more of the following:

(a) The United States government service retirement and disability fund, retired or retainer pay of the uniformed services of the United States, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law.

(b) The Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan, an optional retirement program established by the Arizona board of regents under section 15‑1628, an optional retirement program established by a community college district board under section 15‑1451 or a retirement plan established for employees of a county, city or town in this state.

3. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43‑1333 decreases the beneficiary's Arizona gross income.

4. The amount of any distributions from an individual retirement account as provided for in section 408 of the internal revenue code or from a qualified retirement plan of a self‑employed individual as provided for in section 401 of the internal revenue code to the extent that total adjustments made pursuant to this paragraph in all tax years do not exceed the total of all contributions made by the taxpayer to such plans prior to December 31, 1975, which were included in computing Arizona taxable income.

5. The amount of income on an installment receivable which is recognized pursuant to the internal revenue code and which has already been recognized on the death of the taxpayer for purposes of this title for tax years ending before January 1, 1990.

6. Interest income received on obligations of the United States, less any interest on indebtedness, or other related expenses, and deducted in arriving at Arizona gross income, which were incurred or continued to purchase or carry such obligations.

7. The amount of any income tax refunds which were received from states other than Arizona and which were included as income in computing federal adjusted gross income.

8. Annuity income included in federal adjusted gross income pursuant to section 72 of the internal revenue code if the first payment with respect to such annuity was received prior to December 31, 1978.

9. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title.

10. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code.

11. The amount by which the adjusted basis of property described in this paragraph and computed pursuant to this title and the income tax act of 1954, as amended, exceeds the adjusted basis of such property computed pursuant to the internal revenue code. This paragraph shall apply to all property which is held for the production of income and which is sold or otherwise disposed of during the taxable year other than depreciable property used in a trade or business.

12. The amount allowed by section 43‑1024 for amortization, by a qualified defense contractor certified by the department of commerce under section 41‑1508, of a capital investment for private commercial activities.

13. The amount of gain included in federal adjusted gross income on the sale or other disposition of a capital investment that a qualified defense contractor has elected to amortize pursuant to section 43‑1024.

14. The amount allowed by section 43‑1025 for contributions during the taxable year of agricultural crops to charitable organizations.

15. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code.

16. The amount of prizes or winnings less than five thousand dollars in a single taxable year from any of the state lotteries established and operated pursuant to title 5, chapter 5, article 1, except that all such winnings before March 22, 1983, including periodic distributions from such winnings made after March 22, 1983, may be subtracted.

17. The amount of exploration expenses that is determined pursuant to section 617 of the internal revenue code, that has been deferred in a taxable year ending before January 1, 1990 and for which a subtraction has not previously been made. The subtraction shall be made on a ratable basis as the units of produced ores or minerals discovered or explored as a result of this exploration are sold.

18. The amount included in federal adjusted gross income pursuant to section 86 of the internal revenue code, relating to taxation of social security and railroad retirement benefits.

19. To the extent not already excluded from Arizona gross income under section 112 of the internal revenue code, compensation received for active service as a member of the reserves, the national guard or the armed forces of the United States for any month during any part of which the member served, including compensation for service in a combat zone as determined under section 112 of the internal revenue code or in an area given the same treatment as a combat zone for purposes of section 112 of the internal revenue code.

20. The amount of unreimbursed medical and hospital costs, adoption counseling, legal and agency fees and other nonrecurring costs of adoption not to exceed three thousand dollars. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife shall not exceed three thousand dollars. The subtraction under this paragraph may be taken for the costs that are described in this paragraph and that are incurred in prior years, but the subtraction may be taken only in the year during which the final adoption order is granted.

21. The amount authorized by section 43‑1027 for the taxable year relating to qualified wood stoves, wood fireplaces or gas fired fireplaces.

22. With respect to a medical savings account established pursuant to section 43‑1028:

(a) An eligible individual may subtract:

(i) The amount of contributions made by the individual's employer during the taxable year to the individual's medical savings account pursuant to section 43‑1028 to the extent that the employer contributions are included in the individual's federal adjusted gross income.

(ii) The amount deposited by the individual in the account during the taxable year to the extent that the individual's contributions are included in the individual's federal adjusted gross income.

(b) The individual's employer may subtract the amount of contributions made by the employer to a medical savings account established on the individual's behalf to the extent that the contributions are not deductible under the internal revenue code.

23. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 43‑1029, subsection F exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code.

24. Any amount of qualified educational expenses that is distributed from a qualified state tuition program determined pursuant to section 529 of the internal revenue code and that is included in income in computing federal adjusted gross income.

25. Any item of income resulting from an installment sale that has been properly subjected to income tax in another state in a previous taxable year and that is included in Arizona gross income in the current taxable year.

26. The amount authorized by section 43‑1030 relating to holocaust survivors.

27. The amount authorized by section 43‑1031 for constructing an energy efficient residence.

28. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k)(2)(C)(iii) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service.

29. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43‑1021, paragraph 26 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current or prior taxable years.

30. With respect to property for which an adjustment was made under section 43‑1021, paragraph 27, an amount equal to one‑fifth of the amount of the adjustment pursuant to section 43‑1021, paragraph 27 in the year in which the amount was adjusted under section 43‑1021, paragraph 27 and in each of the following four years. END_STATUTE

Sec. 44. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1085, to read:

START_STATUTE43-1085. Credit for charitable organizations supporting overseas military personnel; definition

A. For taxable years Beginning from and after December 31, 2006, A credit is allowed against the taxes imposed by this title for fifty per cent of the amount of voluntary cash donations made by the taxpayer during the taxable year to a qualifying charitable organization for the purpose of supporting overseas military personnel. The maximum credit in a taxable year may not exceed:

1. Two hundred fifty dollars in any taxable year for a single individual or a head of household.

2. Five hundred dollars in any taxable year for a married couple filing a joint return.

B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.

C. to qualify for the credit the donation must be made to a qualified charitable organization approved by the United States department of defense to send packages to active members of the United States armed forces serving in a foreign country.

D. In any case the amount of the credit shall not exceed the amount of the tax otherwise due from the taxpayer under this title for the taxable year, after subtracting all other applicable credits. No portion of the credit may be refunded or carried forward to subsequent taxable years.

E. A qualifying charitable organization that receives donations under this section must register with the department. The maximum amount of donations that the qualifying charitable organization may receive under this section for which tax credits may be claimed is two hundred thousand dollars in any calendar year. The qualifying charitable organization shall continuously account for donations that are received during the calendar year and issue a receipt to the taxpayer. The receipt shall indicate whether the taxpayer's donation qualifies for a credit under this section and the amount of the credit. After the qualifying charitable organization has received two hundred thousand dollars in donations under this section in a calendar year, the qualifying charitable organization shall Issue receipts to subsequent taxpayers indicating that their donations are not eligible for a credit under this section. The department shall cancel an organization's registration under this section for one year if the organization fails to comply with this subsection.

F. A qualifying charitable organization that receives donations under this section shall use one hundred per cent of the donations to pay for the postage and shipping expenses of gift packages that are sent to active members of the armed forces of the United States who are serving in a foreign country.

G. For the purposes of this section, "qualifying charitable organization" means a charitable organization that:

1. is exempt from federal income taxation under section 501(c)(3) of the internal revenue code.

2. Has a primary purpose and spends at least fifty per cent of its budget to send gift packages to active members of the armed forces of the united states who are serving in a foreign country.

3. Is registered with the department. END_STATUTE

Sec. 45. Section 43-1121, Arizona Revised Statutes, as amended by Laws 2005, chapter 317, section 13, is amended to read:

START_STATUTE43-1121. Additions to Arizona gross income; corporations

In computing Arizona taxable income for a corporation, the following amounts shall be added to Arizona gross income:

1. The amounts computed pursuant to section 43‑1021, paragraphs 3 through 9, 12, 26 and 27.

2. The amount of dividend income received from corporations and allowed as a deduction pursuant to sections 243, 244 and 245 of the internal revenue code.

3. Taxes which are based on income paid to states, local governments or foreign governments and which were deducted in computing federal taxable income.

4. Expenses and interest relating to tax‑exempt income on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the tax imposed by this title. Financial institutions, as defined in section 6‑101, shall be governed by section 43‑961, paragraph 2.

5. Commissions, rentals and other amounts paid or accrued to a domestic international sales corporation controlled by the payor corporation if the domestic international sales corporation is not required to report its taxable income to this state because its income is not derived from or attributable to sources within this state. If the domestic international sales corporation is subject to article 4 of this chapter, the department shall prescribe by rule the method of determining the portion of the commissions, rentals and other amounts which are paid or accrued to the controlled domestic international sales corporation and which shall be deducted by the payor. "Control" for purposes of this paragraph means direct or indirect ownership or control of fifty per cent or more of the voting stock of the domestic international sales corporation by the payor corporation.

6. Federal income tax refunds received during the taxable year to the extent they were deducted in arriving at Arizona taxable income in a previous year.

7. The amount of net operating loss taken pursuant to section 172 of the internal revenue code.

8. The amount of exploration expenses determined pursuant to section 617 of the internal revenue code to the extent that they exceed seventy‑five thousand dollars and to the extent that the election is made to defer those expenses not in excess of seventy‑five thousand dollars.

9. Amortization of costs incurred to install pollution control devices and deducted pursuant to the internal revenue code or the amount of deduction for depreciation taken pursuant to the internal revenue code on pollution control devices for which an election is made pursuant to section 43‑1129.

10. The amount of depreciation or amortization of costs of child care facilities deducted pursuant to section 167 or 188 of the internal revenue code for which an election is made to amortize pursuant to section 43‑1130.

11. Arizona state income tax refunds received, to the extent the amount of the refunds is not already included in Arizona gross income, if a tax benefit was derived by deduction of this amount in a prior year.

12. The amount paid as taxes on property in this state by a qualified defense contractor with respect to which a credit is claimed under section 43‑1166.

13. The loss of an insurance company that is exempt under section 43‑1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43‑947.

14. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43‑1169 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

15. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1169 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1169.

16. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under either section 43‑1170 or 43‑1170.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

17. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under either section 43‑1170 or 43‑1170.01 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1170 or 43‑1170.01, as applicable.

18. The deduction referred to in section 1341(a)(4) of the internal revenue code for restoration of a substantial amount held under a claim of right.

19. The amount by which a capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds the capital loss carryover allowable pursuant to section 43‑1130.01, subsection F.

20. Any amount deducted in computing Arizona taxable income as expenses for installing solar stub outs or electric vehicle recharge outlets in this state with respect to which a credit is claimed pursuant to section 43‑1176.

21. Any wage expenses deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1175 and representing net increases in qualified employment positions for employment of temporary assistance for needy families recipients.

22. Any amount of expenses that were deducted pursuant to the internal revenue code and for which a credit is claimed under section 43‑1178.

23. Any amount deducted for conveying ownership or development rights of property to an agricultural preservation district under section 48‑5702 for which a credit is claimed under section 43‑1180.

24. The amount of any deduction that is claimed in computing Arizona gross income and that represents a donation of a school site for which a credit is claimed under section 43‑1181.

25. The amount of any deductions that are claimed in computing federal taxable income representing expenses for which a credit is claimed under section 43‑1163.

26. Any amount deducted in computing Arizona taxable income as expenses for installing water conservation system plumbing stub outs in this state with respect to which a credit is claimed pursuant to section 43-1182.

27. The amount of any deduction that is claimed in computing arizona gross income and that represents a contribution to a charitable organization for which a credit is claimed under section 43-1184. END_STATUTE

Sec. 46. Repeal

Section 43-1121, Arizona Revised Statutes, as amended by Laws 2005, chapter 292, section 4, is repealed.

Sec. 47. Title 43, chapter 11, article 6, Arizona Revised Statutes, is amended by adding section 43-1184, to read:

START_STATUTE43-1184. Credit for charitable organizations supporting overseas military personnel; definition

A. For taxable years beginning from and after December 31, 2006, A credit is allowed against the taxes imposed by this title for fifty per cent of the amount of voluntary cash donations made by the taxpayer during the taxable year to a qualifying charitable organization for the purpose of supporting overseas military personnel. The maximum credit in a taxable year may not exceed one thousand dollars.

B. to qualify for the credit the donation must be made to a qualified charitable organization approved by the United States department of defense to send packages to active members of the United States armed forces serving in a foreign country.

C. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

E. A qualifying charitable organization that receives donations under this section must register with the department. The maximum amount of donations that the qualifying charitable organization may receive under this section for which tax credits may be claimed is two hundred thousand dollars in any calendar year. The qualifying charitable organization shall continuously account for donations that are received during the calendar year and issue a receipt to the taxpayer. The receipt shall indicate whether the taxpayer's donation qualifies for a credit under this section and the amount of the credit. After the qualifying charitable organization has received two hundred thousand dollars in donations under this section in a calendar year, the qualifying charitable organization shall Issue receipts to subsequent TAXPAYERs indicating that their donations are not eligible for a credit under this section. The department shall cancel an organization's registration under this section for one year if the organization fails to comply with this subsection.

F. A qualifying charitable ORGANIZATION that receives donations under this section shall use one hundred per cent of the donations to pay for the postage and shipping EXPENSES of gift packages that are sent to active members of the armed forces of the United States who are serving in a foreign country.

G. For the purposes of this section, "qualifying charitable organization" means a charitable organization that:

1. is exempt from federal income taxation under section 501(c)(3) of the internal revenue code.

2. Has a primary purpose and spends at least fifty per cent of its budget to send gift packages to active members of the armed forces of the united states who are serving in a foreign country.

3. Is registered with the department. END_STATUTE

Sec. 48. Section 48-707, Arizona Revised Statutes, as amended by Laws 2006, chapter 132, section 2, is amended to read:

START_STATUTE48-707. Notice and conduct of elections; waiver

A. Any election under this article shall be a nonpartisan election called by posting notices in three public places within the boundaries of the district not less than twenty days before the election. Notice shall also be published in a newspaper of general circulation in the municipality or county or if there is no newspaper so circulated in the municipality in a newspaper of general circulation in the county in which the municipality is located once a week for two consecutive weeks before the election. The notice shall state:

1. The place of holding the election.

2. The hours during the day, not less than six, in which the polls will be open.

3. If it is a formation election, the boundaries of the proposed district.

4. If it is a bond election, the amount of bonds to be authorized for the district, the maximum rate of interest to be borne on the bonds, the maximum term of the bonds, not exceeding twenty‑five years, and the purposes for which the monies raised will be used.

5. If it is an ad valorem tax levy election pursuant to section 48‑723, the maximum tax rate per one hundred dollars of assessed valuation to be imposed, the purposes for which the monies raised will be used and the existing maximum tax rate, if any.

6. That a general plan is on file with the clerk.

B. The district board or the governing body, as applicable, shall determine the date of the election and the polling places for the election and may consolidate county precincts. If it is a bond election or an ad valorem tax levy election pursuant to section 48-723, the election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). For other than a formation election pursuant to section 48‑705, subsection B, and an election held pursuant to subsection G of this section, precinct registers shall be used. The county recorder shall submit precinct registers on the request of the clerk, and if the district includes land lying partly in and partly out of any county election precinct, the precinct registers may contain the names of all registered voters in the precinct and the election boards at those precincts shall require that a prospective elector execute an affidavit stating that the elector is also a qualified elector of the district. For formation elections and elections held pursuant to subsection G of this section, a prospective elector shall execute an affidavit stating that the elector is the owner of land in the proposed district and is a qualified elector of this state or otherwise qualified to vote pursuant to section 48‑3043 and stating the area of land in acres owned by the elector. Election board members may administer oaths or take all affirmations for these purposes. A community facilities district election held pursuant to this article is not subject to title 16, chapter 2, article 3.

C. Except as otherwise provided by this article, the election shall comply with the general election laws of this state, except that the words to appear on the ballots shall be for a formation election "district, yes" and "district, no", for a bond election "bonds, yes" and "bonds, no", for a tax election if no tax is in place "tax, yes" and "tax, no" and for a tax election to change an existing maximum or eliminate an existing tax "tax change, yes" and "tax change, no". The returns of election shall be made to the governing body or, if after formation, to the district board.

D. Within fourteen days after an election, the governing body, or if after formation, the district board, shall meet and canvass the returns, and if a majority of the votes cast at the election is in favor of formation, issuing the bonds, imposing the tax or changing the tax, the governing body or the district board, as appropriate, shall enter that fact on its minutes. The canvass may be continued from time to time. Failure of a majority to vote in favor of the matter submitted does not prejudice the submission of the same or similar matters at a later election.

E. If a person listed on the assessment roll is no longer the owner of land in the district and the name of the successor owner becomes known and is verified by recorded deed or other similar evidence of transfer of ownership, the successor owner is deemed to be the owner for the purposes of this article.

F. Notwithstanding any other provision of this article, if a petition for formation is signed by owners of all of the land in the district described in the petition and is approved by the municipality or county, the municipality or county may waive any or all requirements of posting, publication, mailing, notice, hearing and landowner election. On receipt of such a petition, and after approval by an election of resident electors, if any, the municipality or county shall declare the district formed without being required to comply with the provisions of this article for posting, publication, mailing, notice, hearing or landowner election.

G. Notwithstanding any other provision of this article, if no person has registered to vote within the district within fifty days immediately preceding any scheduled election date, any election required to be held pursuant to this article shall be held with the vote by the owners of land within the district who are qualified electors of this state and other landowners according to section 48‑3043. Each owner has the number of votes or portion of votes equal to the number of acres or portion of acres rounded upward to the nearest one-fifth of an acre owned in the district by that person.

H. For a district that is proposed to be formed by a county, a district may be formed only if a petition for formation is signed by the owners of all of the land in the district that is described in the petition and if it is approved by the county. If the district is proposed to be formed in a county island, as defined in section 11-251.12, in existence on the effective date of this amendment to this section, the petition must be signed by the owners of all of the land in the district that is described in the petition and the district must be approved by the county and by the municipality or by all municipalities that form the county island. If the petition is signed by the owners of all of the land in the district, the county may waive any or all requirements of posting, publication, mailing, notice, hearing and landowner election. On receipt of such a petition, and after APPROVAL by an election of one hundred per cent of the resident electors, if any, the county shall declare the district formed without being required to comply with the provisions of this article for posting. END_STATUTE

Sec. 49. Section 48-719, Arizona Revised Statutes, as amended by Laws 2006, chapter 132, section 5, is amended to read:

START_STATUTE48-719. General obligation bonds; tax levy; exception

A. At any time after the hearing on formation of the district, the district board, or, if before formation, the governing body, may from time to time order and call a general obligation bond election to submit to the qualified electors of the district or to those persons who are qualified to vote pursuant to section 48‑707, subsection G the question of authorizing the district board to issue general obligation bonds of the district to provide monies for any public infrastructure purposes consistent with the general plan. The election may be held in conjunction combined with the formation election, but must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. If general obligation bonds are approved at an election, the district board may issue and sell general obligation bonds of the district.

C. If the bonds are to be sold in a public offering, no bonds may be issued by the district unless the bonds receive one of the four highest investment grade ratings by a nationally recognized bond rating agency.

D. The district may issue and sell refunding bonds to refund any general obligation bonds of the district. If general obligation bonds are issued to refund any general obligation bonds of the district no election on the issuance of such refunding bonds is required.

E. After the bonds are issued, the district board shall enter in its minutes a record of the bonds sold and their numbers and dates and shall annually levy and cause an ad valorem tax to be collected, at the same time and in the same manner as other taxes are levied and collected on all taxable property in the district, sufficient, together with any monies from the sources described in section 48‑717, to pay debt service on the bonds when due. Monies derived from the levy of the tax provided in this section when collected constitute funds to pay the debt service on the bonds and shall be kept separately from other funds of the district. END_STATUTE

Sec. 50. Section 48-723, Arizona Revised Statutes, as amended by Laws 2006, chapter 132, section 6, is amended to read:

START_STATUTE48-723. District taxes; annual financial estimate and budget

A. Except as provided in subsection D of this section and at any time after the hearing on formation of the district, the district board, or, if before formation, the governing body, may call an election to submit to the qualified electors of the district or to the persons qualified to vote pursuant to section 48‑707, subsection G the question of authorizing the district board to levy an ad valorem tax on the assessed value of all the real and personal property in the district at a rate or rates which do not exceed the maximum rate or rates specified in the ballot. All taxes attributable to the operation and maintenance expenses of the district, excluding expenses for an area described in section 48‑709, subsection G, shall not exceed an amount equal to thirty cents per one hundred dollars of assessed valuation for all real and personal property in the district, unless a higher rate is approved by a vote of the electors of the district, or by the persons who are qualified to vote as provided in section 48‑707, subsection G, voting at an election not less than three years after the date of the formation of the district. The election may be held in conjunction combined with the formation election, but must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). Once approved at an election, the maximum rate remains in effect until increased or decreased at a subsequent election. If a maximum rate is in effect, the district board, on petition of twenty-five per cent of the qualified electors of the district, or by those persons owning twenty-five per cent of the land area who are qualified to vote pursuant to section 48‑707, subsection G, shall call an election to reduce the maximum tax rate but not below the lesser of that rate determined by the district board to be necessary to maintain the district's facilities and improvements or the actual rate then in effect. On the presentation to the district board of a petition signed by the owners of a majority of the property in the district, the district board shall adopt a resolution to reduce or eliminate the portion of the tax, beginning the next fiscal year, required for one or more enhanced municipal services specified in the petition. Signatures on a petition to reduce or eliminate a tax are valid for a period of sixty days.

B. The district may not levy, other than for the payment of debt service on general obligation bonds, at a rate or rates in excess of the maximum rate then in effect.

C. When levying an ad valorem tax, the district board shall make annual statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the tax levy or levies and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy or levies and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district. The district board shall file the annual statements and estimates with the clerk. The district board shall publish a notice of the filing of the estimate, shall hold hearings on the portions of the estimate not relating to debt service on general obligation bonds and shall adopt a budget. The board, on or before the date set by law for certifying the annual budget of the county or municipality, shall fix, levy and assess the amounts to be raised by ad valorem taxes of the district and shall cause certified copies of the order to be delivered to the board of supervisors and to the department of revenue. All statutes relating to the levy and collection of general county taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to the district taxes provided for by this section. END_STATUTE

Sec. 51. Section 48-1037, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1037. Notice and conduct of elections; waiver

A. Any election under this article shall be called by posting notices in three public places within the boundaries of the district not less than twenty days before the election. Notice shall also be published in a newspaper of general circulation in the county once a week for two consecutive weeks before the election. The notice shall state:

1. The place of holding the election.

2. The hours during the day, not less than six, when the polls will be open.

3. If it is a formation election, the boundaries of the proposed district.

4. If it is a bond election, the amount of bonds to be authorized for the district, the maximum rate of interest to be borne on the bonds, the maximum term of the bonds, not exceeding thirty years, and the purposes for which the monies raised will be used.

B. A bond election under this section must be held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d).

B. C. The district board or the board of supervisors, as applicable, shall determine the polling places for the election and may consolidate county precincts. For other than a formation election, precinct registers shall be used. The county recorder shall submit precinct registers on the request of the clerk, and if the district includes land lying partly in and partly out of any county election precinct, the precinct registers may contain the names of all registered voters in the precinct and the election boards at such precincts shall require that a prospective elector execute an affidavit stating that he is also a qualified elector of the district. For formation elections a prospective elector shall execute an affidavit stating that he is the owner of land in the district, is a qualified elector of this state and stating the area of land in acres owned by the elector. Election board members may give oaths or take all affirmations for these purposes.

C. D. Except as otherwise provided by this article, the election shall comply with the general election laws of this state, except that the words to appear on the ballots shall be for a formation election "district, yes" and "district, no" or for a bond election "bonds, yes" and "bonds, no". The returns of election shall be made to the district board.

D. E. On the seventh day after the election or within seven days of the election, the board of supervisors, or if after formation, the district board, shall meet and canvass the returns, and if a majority of the votes cast at the election is in favor of formation or issuing the bonds, the board shall enter that fact on its minutes. The board may continue the canvass from time to time.

E. F. Notwithstanding any other provision of this article, a petition for formation signed by owners of all of the land in the district described and approved by the county board of supervisors waives any requirements of posting, publication, mailing, notice, hearing and election. On receipt of such a petition, the county board of supervisors shall declare the district formed without being required to comply with the provisions of this article for posting, publication, mailing, notice, hearing or election. END_STATUTE

Sec. 52. Section 48-1045, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1045. General obligation bonds

A. At any time after the hearing on formation of the district, the district board, or if before formation, the board of supervisors, may order and call a general obligation bond election to submit to the qualified electors of the district the question of authorizing the district board to issue general obligation bonds of the district to provide monies for any rural road improvements. The election may be held in conjunction combined with the formation election, but must be held on the first Tuesday following the first Monday in November as Prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. The district shall not issue bonds which would cause the aggregate principal amount of bonds outstanding to exceed twenty-five per cent of the full cash value of real property in the district on the date of issue.

C. If general obligation bonds are approved at an election, the district board may issue and sell general obligation bonds of the district.

D. The district board may issue and sell general obligation refunding bonds to refund any general obligation bonds of the district. No election on the issuance of such refunding bonds is required. END_STATUTE

Sec. 53. Section 48-1409, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1409. Conduct of election

A. The election shall be held, except as otherwise provided by this article, in conformity with the general election laws of the state, except that:

1. The election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

2. The words to appear on the ballots shall be "bonds, yes. ( ), "bonds, no. ( )". , and

3. The returns of election shall be made to the board of trustees of the district.

B. On the seventh day after the election at 1:00 p.m., the board of trustees shall meet and canvass the returns, and if a majority of the votes cast at the election is in favor of issuing the bonds, then the board of trustees shall make an entry of that fact upon their minutes, and certify to the board of supervisors all proceedings had in the premises. END_STATUTE

Sec. 54. Section 48-1413, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1413. Dissolution of district

A. When a petition signed by twenty-five electors within a special road district is presented to the board of supervisors of the county in which the special road district is located, requesting the dissolution of the district, the board shall, within twenty days, shall call an election of the electors within the special road district to vote for or against the dissolution of the district. An election may be called and a special road district may dissolve only if there is another governmental entity which will accept dedication of the roads in that special road district. 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.

B. Notice of the time, place and purpose of the election shall be posted, the election officers shall be appointed, the election shall be conducted, returned and canvassed, and the ballots shall be similar in form, as prescribed by this article for bond elections of a district, except that the date requirements that apply to bond elections do not apply to an election on the dissolution of the district.

C. The board of trustees of a special road district by a vote of a majority of the board of trustees, or if a joint special road district, by a vote of a majority of its joint board, also may request the dissolution of the district.

D. If a majority of the votes cast at the election favors the dissolution, or if the board of trustees of the district requests it, the board of supervisors shall enter in its records an order declaring the dissolution of the district, and from that time the district ceases to exist, except that all real property and mobile homes in the district remain subject to taxation for all the bonds outstanding at the time of dissolution. END_STATUTE

Sec. 55. Section 48-1416, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1416. Formation of overlay district; hearing; procedures; election

A. On request of the board of trustees of two or more contiguous special road districts, or two or more contiguous special road districts which comprise a joint special road district, the board of supervisors shall set a hearing on the creation of a new special road district overlaying the requesting districts. The proposed overlay district shall have boundaries coextensive with the exterior boundaries of the contiguous districts regardless of their shape or dimension, including any portion within any incorporated city or town.

B. Notice of the hearing shall be given by posting in four public places within the proposed district and by publication two times in a newspaper of general circulation in the proposed district.

C. Interested parties may file written objections with the clerk of the board of supervisors no later than five days before the date set for the hearing.

D. At the hearing, written and oral objections shall be heard and the board of supervisors shall rule on the objections. The hearing may be continued from time to time. If the board determines that the land within the districts will be benefited by the formation of the new district, it shall order an election to be held in the proposed district. The determination of the board is final and conclusive.

E. The election shall be called and conducted, notice shall be given and the results shall be canvassed as provided in title 16, except that sections 16‑226 and 16‑227 do not apply. and The election may be held on any date set by the board of supervisors which is not less than thirty days after the date the board of supervisors adopts the order, except that if the election is combined with an election on the sale of bonds as provided by subsection I of this section, the election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

F. If a majority of the qualified electors of the proposed district voting at the election favors formation of an overlay district, the board of supervisors shall order the formation of the overlay district.

G. If the formation of the overlay district is ordered the existing districts shall be dissolved and cease to exist, except that all real property and mobile homes within the dissolved districts remain subject to taxation for all the bonds, debts or obligations outstanding at the time of dissolution. All taxes levied and monies collected before dissolution shall be credited to the overlay district except for those levied or collected to pay bonds, debts and obligations of the dissolved districts outstanding at the date of dissolution. The dissolved districts shall transfer to the overlay district all other assets, including all other monies and the roads and rights-of-way, of the dissolved districts, and the overlay district shall assume the combined budget, operations and maintenance of the dissolved districts.

H. The initial board of trustees of the overlay district shall be comprised of the trustees of the dissolved districts who shall continue to serve only until their respective existing terms are completed. At the first annual trustee election after formation of the overlay district, only one trustee shall be elected at large from the overlay district for a three year term to replace all former trustees whose terms are expiring. At each of the second and third annual trustee elections after formation, two trustees shall be elected at large for three year terms to replace all former trustees whose terms are expiring. Thereafter the district board shall consist of five trustees, elected at large, serving staggered three year terms.

I. If requested by the boards of trustees of the districts requesting the overlay district, the board of supervisors shall call, conduct and canvass, on behalf of the overlay district, an election on the sale of bonds by the overlay district to be held in conjunction with the election on formation and as provided in subsection E of this section.

J. The formation of the overlay district and dissolution of the previous districts become effective on a date set by the board of supervisors which is no earlier than thirty days after the canvass of the formation election.

K. A special road district formed pursuant to this section is subject to this article as a special road district. END_STATUTE

Sec. 56. Section 48-1612, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1612. Election to authorize issuance of bonds

A. Upon receiving the report from the engineer provided by section 48‑1611, the board of directors shall proceed to determine the amount of money necessary to be raised and the character and extent of contract obligations to be undertaken to carry into effect the adopted plans and purposes, and shall forthwith call a special an election at which shall be submitted to the electors of the district possessing the qualifications prescribed by this chapter the question of whether or not bonds of the district shall be issued in the amount so determined. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. Notice of the election shall be given by posting notices in three public places in each election precinct in the district for at least twenty days, and by publication in a newspaper published in the county where the office of the board of directors is maintained, once a week for at least three consecutive weeks. The notice shall specify the time of holding the election, the amount of bonds proposed to be issued and the maximum rate of interest to be borne on the bonds.

C. The election shall be held conducted and the results thereof determined and declared in all respects as nearly as possible in conformity with article 3 of this chapter governing the election of directors. No informalities in conducting the election shall invalidate the election if it has been otherwise fairly conducted.

D. At the election the ballots shall contain the words "bonds - -yes" and "bonds - -no". If the majority of the votes cast is "bonds - -yes, . " the board of directors shall cause a series of bonds in the amount authorized to be prepared. If the majority of the votes cast is "bonds - -no," the result of the election shall be so declared and entered of record.

E. When the board thereafter deems it for the best interest of the district to issue bonds for district purposes and that the question of the issuance thereof be submitted to the electors, the board shall adopt resolutions to that effect and record them in its minutes, and the board may thereupon submit the question to the electors in the same manner and with like effect as at the previous election. END_STATUTE

Sec. 57. Section 48-1615, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1615. Issuance of additional bonds; priority of liens

A. When the money provided by the previous issue of bonds has become exhausted by expenditures authorized by this chapter, and it is necessary to raise additional money for such purposes, additional bonds may be issued by submitting the question at a special election to the qualified voters of the district and by complying with the provisions of procedures prescribed by this article in respect to an original issue of bonds, but the lien for taxes for the payment of the interest and the principal of any bond of a prior issue shall be prior to the lien of any bond of a subsequent issue.

B. When the owner of land within the district for which title had not been obtained at the time of previous issues of bonds obtains a patent or title thereto, the board of directors may levy an assessment upon the land for the owner's proportionate share of the taxes levied by the district to pay the bonded indebtedness of the district. END_STATUTE

Sec. 58. Section 48-1793, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1793. Bond election; notice; terms of bonds

A. The board of directors, upon complying with sections 48‑1791 and 48‑1792, shall as soon as practicable call a special an election at which shall be submitted to the qualified electors of the district the question of issuing negotiable bonds of the district in an amount necessary to carry out the proposed general purposes of the district. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The bonds, if voted, shall be sold at such times and in such amounts as the board of directors deems advisable, which shall be determined only approximately in the proceedings of the board, and shall so state in the notice of election.

B. The bonds shall run for such length of time as the board of directors decides upon and submits to the electors, but for not more than thirty years, and may provide for optional or progressive maturity in the discretion of the board. Such facts shall be included in the notice of the election. The bonds shall bear interest payable semiannually at the rate or rates set by the accepted bid which shall not exceed the maximum rate set forth in the notice of the election. The bonds may be made payable any place in the United States that is agreeable to the board and the purchasers. END_STATUTE

Sec. 59. Section 48-1907, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1907. Powers of hospital district

A. A hospital district may:

1. Adopt and use a corporate seal.

2. Sue and be sued in all courts and places and in all actions and proceedings.

3. Purchase, receive, have, take, hold, lease, use and enjoy property of every kind and description within the limits of the district, and control, dispose of, convey, encumber and create leasehold interests in such property for the benefit of the district.

4. Administer trusts declared or created for the hospital district, and receive by gift, devise or bequest and hold in trust or otherwise, property located within the state or elsewhere and, when not otherwise provided, dispose of such property for the benefit of the hospital district.

5. Provide for the operation and maintenance at a single location within the district of a hospital, urgent care center, combined hospital and ambulance service when authorized to do so pursuant to title 36, chapter 21.1, article 2, or combined urgent care center and ambulance service, when authorized to do so pursuant to title 36, chapter 21.1, article 2, owned or operated by the district. If the hospital district provides for the operation of an ambulance service, ambulance services shall be provided to all areas within the district. An existing hospital district that is located in a county with a population of less than five hundred thousand persons and that is operating at a single location may expand to a second location if the board of directors of the hospital district finds at a public hearing on the matter that an additional location is reasonably necessary for the persons served by the district.

6. Impose a secondary property tax on all taxable property within the district for the purpose of funding the operation and maintenance of a hospital, urgent care center, combined hospital and ambulance service or combined urgent care center and ambulance service that is owned or operated by the district or to pay costs of an ambulance service contract entered into pursuant to this section. The amount of the levy necessary for the operation and maintenance of the ambulance service, if any, shall be separately stated in the levy. Prior to the initial imposition of such a tax a majority of the qualified electors voting in a regular or special election must approve such initial imposition. The continued imposition of such a tax must be approved by a majority of the qualified electors voting in a regular or special election at least every five years from the date of the initial imposition. Elections under this paragraph must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

7. Contract with an existing hospital, ambulance service, city, town or fire district within the district to provide ambulance related services. If the district does contract for ambulance services, the district shall ensure that ambulance services are provided to all areas within the district. No such contract may provide for the use of aircraft.

B. The amount of a levy under subsection A, paragraph 6 shall not exceed the greater of:

1. Six hundred thousand dollars, adjusted annually from a 1989 base year according to the health services component of the metropolitan Phoenix consumer price index published by the bureau of business and economic research, college of business administration, Arizona state university, or its successor.

2. Ten per cent of the hospital's or urgent care center's total expenses for all purposes required or authorized by this chapter and incurred in the fiscal year ending immediately before the levy.

C. An existing hospital may be converted into an urgent care center by a vote of the board of directors of the district if the conversion is in the best interests of the district. An existing urgent care center shall not be converted into a hospital unless the hospital district is created pursuant to section 48‑261 and this chapter. END_STATUTE

Sec. 60. Section 48-1912, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1912. Bonds

A. Bonds may be issued by the hospital district for the purpose of carrying out any of the provisions of this article. If the board of directors determines that bonds should be issued, application shall be made to the board of supervisors by the board, and the board of supervisors shall submit to a vote of the real property tax-paying taxpaying electors residing in the district the question in the manner provided by article 3 of chapter 3, title 35, chapter 3, article 3, and if the majority of the electors voting on the issue approve, the bonds shall be issued as provided by law. Elections under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. Any bonds issued under this article may contain a provision requiring the establishment of a reserve or reserves in an amount equal to the requirements of principal and interest payments for the two years during the life of the bonds requiring the largest amount of principal and interest payments, and the district shall maintain the reserve during the life of the bond issue for the purpose of protecting against any deficiency in rental payments or tax collections. If it becomes necessary to withdraw funds from the reserve to protect against any deficiency, the board of directors of the district shall levy a tax on all the taxable property in the district sufficient to maintain the reserve fund in an amount equal to the original amount thereof. In making the levy for the payment of principal and interest for the last year when the bonds mature, the board of directors shall take into consideration the amount of money then in the reserve fund and shall levy an amount sufficient to pay the principal and interest on the bonds, less the amount then in the reserve fund. END_STATUTE

Sec. 61. Section 48-2011.01, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2011.01. Wastewater treatment facility and nonpoint source projects; financial assistance loan repayment agreements; definition

A. Notwithstanding any other law, a sanitary district may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona.

B. To repay financial assistance from the water infrastructure finance authority of Arizona, a sanitary district may enter into a financial assistance loan repayment agreement with the authority. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long‑term obligations including a special assessment on a designated area that is levied and collected pursuant to article 2 of this chapter.

C. The board of directors shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors voting at a regular or special general election in the district. Elections under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). An election is not required if voter approval has previously been obtained for substantially the same project with another funding source or if the project is constructed with an assessment levied against a designated area pursuant to article 2 of this chapter. If a majority of the qualified electors voting on the question:

1. Approves, the board of directors may execute, deliver and perform the financial assistance loan repayment agreement.

2. Disapproves, the board of directors shall not execute a financial assistance loan repayment agreement.

D. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the sanitary district's proportionate share of the expenses of administering the clean water revolving fund established by section 49‑1221 and may provide that the sanitary district pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the financial assistance. Districts are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The sanitary district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. A financial assistance loan repayment agreement under this section does not create a debt of the sanitary district, and the authority shall not require that payment of a loan agreement be made from other than those sources permitted in subsection B of this section.

F. A sanitary district may employ or contract for the services of attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the financial assistance loan repayment agreement. Charges for these services may be included in the assessment amounts pledged to repay the loan.

G. This section is supplemental and alternative to any other law under which a sanitary district may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

H. Any financial assistance loan repayment agreement between the district and the water infrastructure finance authority of Arizona may be secured by unpaid assessments certified in the manner prescribed by section 48‑2067. The financial assistance loan repayment agreement may provide for different due dates for annual installments of principal, different interest payment dates, different dates of delinquency and different dates for holding sales of delinquent properties than otherwise provided for in article 2 of this chapter. The financial assistance loan repayment agreement may also provide for mailed notice to property owners in lieu of the publication requirement prescribed by section sections 48‑2068 and section 48‑2069.

I. A district may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved pursuant to subsection C of this section less the amount that the district is obligated to repay to the water infrastructure finance authority pursuant to a financial assistance loan repayment agreement.

J. For the purposes of this section, "nonpoint source project" has the same meaning prescribed in section 49‑1201. END_STATUTE

Sec. 62. Section 48-2020, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2020. Bond election; subsequent bond election

A. After approval of the survey or plan and report prepared under section 48‑2015 the board of directors of the district shall submit to the qualified electors of the district, at a special election called for that purpose, the proposition of incurring bonded indebtedness to obtain funds with which to acquire the property and perform the work set forth by the report. An election under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The resolution calling the election shall set forth:

1. The purposes of the proposed indebtedness.

2. A reference to the report for particulars.

3. The amount of the proposed indebtedness.

4. The part of the principal to be paid each year.

5. The maximum rate of interest to be paid.

6. The date of the election.

7. The election precincts, polling places and election officers.

B. Notice of the election shall be given and the election shall be held in the manner prescribed by title 16.

C. If the proposition of issuing bonds fails to receive the requisite number of votes to authorize issuance of the bonds, the board of directors may call another election on the question of issuing bonds under the terms of this article, either for the same purposes or for any lawful purpose of the district. END_STATUTE

Sec. 63. Section 48-2214, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2214. Bond election; subsequent bond election

A. After approval of the health service survey report the board of directors of the district shall submit to the qualified electors of the district, at a special election called for that purpose, the proposition of incurring bonded indebtedness to obtain funds with which to acquire the property and perform the work set forth by the report. elections under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The resolution calling the election shall set forth:

1. The purposes of the proposed indebtedness.

2. A reference to the report for particulars.

3. The amount of the proposed indebtedness.

4. The maximum numbers of years for which the bonds may be outstanding.

5. The maximum rate of interest to be paid.

6. The date of the election.

7. The election precincts and polling places.

B. The resolution shall be published once each week for three successive weeks in a newspaper of general circulation in the district.

C. If the proposition of issuing bonds fails to receive a majority of the votes cast at the election to authorize issuance of the bonds, the board of directors may, not less than six months after that election, may call another election on the question of issuing bonds under the terms of this article, either for the same purposes or for any lawful purpose of the district.

D. No bond election shall take place until the board of directors has demonstrated to the department that contractual arrangements have been made for staff and a coordinating medical provider, as defined in section 36‑2351, and the department has certified to the board of directors and to the organizing board that the above arrangements are sufficient to ensure that ambulatory care services will be available to the district for a period of at least one year of medical clinic operation. END_STATUTE

Sec. 64. Section 48-2223, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2223. Tax levy for current expenses

A. The board of directors of a health service district may, at the time of certifying the amount required for payment of principal and interest on bonds, may certify to the board of supervisors the amount necessary to maintain and operate the health service system of the district during the ensuing year, and to defray all other expenses incidental to the exercise of powers granted by this article, together with an estimate of the revenue which will be received from rentals and service charges. In that event, the board of supervisors shall, at the time of levying county taxes, shall levy and cause to be collected in the manner prescribed by law for county taxes, a tax on real property within the health service district based on the current assessment roll, sufficient to pay the amount certified, less the amount estimated to be received from rentals and service charges. The levy for operational purposes shall not exceed seventy-five cents per one hundred dollars of assessed valuation except for a district that provides for ambulance service or a combined medical clinic and ambulance service as prescribed by section 48‑2209.

B. The board of directors of a health service district may certify to the board of supervisors an amount to levy on all taxable property within the district for the purpose of funding the operation and maintenance of ambulance service or combined medical clinic and ambulance service that is owned or operated by the district or to pay the cost of an ambulance service contract entered into pursuant to section 48‑2209. The amount of the levy necessary for the operation and maintenance of the ambulance service, if any, shall be separately stated in the levy. Before the initial imposition of such a tax, a majority of the qualified electors voting in a regular or special an election conducted in the same manner provided in section 48‑2213 must approve the initial imposition. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d). The levy under this subsection for operation of ambulance service pursuant to this subsection shall not exceed seventy-five cents per one hundred dollars of assessed valuation, or one hundred thousand dollars, whichever is less. The one hundred thousand dollar limit in this subsection shall be adjusted annually from a 1991 base year according to the health services component of the metropolitan Phoenix consumer price index published by the bureau of business and economic research, college of business administration, Arizona state university or its successor.

C. The tax, when collected, shall be paid into the county treasury to the credit of the operating fund of the district, and the board of directors may order expenditure of the fund for the purposes for which levied. Payments from the operating fund shall be made upon claims allowed by the board of directors, prepared, presented and audited in the same manner as claims against the county.

D. Not less than twenty nor more than thirty days prior to making the certification to the board of supervisors provided by subsections A and B of this section, the board of directors shall publish in a newspaper of general circulation in the district an itemized statement of the amounts proposed to be certified, and the statement shall contain notice of a meeting to be held by the board of directors prior to the time for the certification. At that meeting, any owner of real property within the district may appear and present objections to any item of the amount proposed to be certified.

E. If a district lies in more than one county the amount necessary to maintain and operate the health service system of the district during the ensuing year shall be apportioned and the tax levied and collected in the same manner as established in section 48‑2220, subsection E. END_STATUTE

Sec. 65. Section 48-2442, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2442. Bond election; results

A. Upon determining the amount of money necessary to be raised for any or all of the purposes set forth in section 48‑2441, the board of directors shall immediately call a special an election at which shall be submitted to the electors of the district the question of whether or not the bonds of the district shall be issued in the amount so determined. The election must be held on the first Tuesday after the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. Notice of the election shall be given by posting notice thereof in three public places in each election precinct of the district, or if the district is not divided into divisions, in three public places in the district, for at least twenty days, and by publication of the notice in a newspaper published in the county in which the office of the board of directors of the district is located, once a week for at least two successive weeks. The notice shall specify the time of holding the election, the amount of bonds proposed to be issued, the maximum rate of interest to be borne on the bonds and the denominations thereof.

C. Except as otherwise provided, the election shall be held and the results thereof determined and declared in all respects as nearly as practicable in conformity with the provisions of article 4 of this chapter governing the election of directors. No informality in conducting the election shall invalidate the election if it has been otherwise fairly conducted.

D. At the election the ballots shall contain the words "bonds - -yes" and "bonds - -no." If a majority of the votes cast at the election is "bonds - -yes", the board of directors shall cause the bonds to be issued. If a majority of the votes cast is "bonds - -no," the result of the election shall be declared by the board of directors and entered on its record, and at any time thereafter when a petition signed by one-fourth or more of the qualified electors of the district is presented to the board of directors, the board shall record such presentation in its minutes, and shall thereupon again submit such question to the electors of the district in the same manner and with like effect as at the previous election. END_STATUTE

Sec. 66. Section 48-2635, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2635. Notice of petition and hearing

A. The secretary of the board of directors shall cause notice of filing of the petition to be given and published in the same manner and for the same time that notice of special elections for the issuance of bonds is required to be published under the provisions of this chapter.

B. The notice shall set forth the filing of the petition and the names of petitioners, a description of the lands mentioned in the petition, and the prayer of the petition. The notice shall inform all persons interested in, or who may be affected by the change of boundaries of the district, to appear at the office of the board at the time stated in the notice and show cause in writing why the change in the boundaries of the district as proposed in the petition should not be made. The time to be specified in the notice for showing cause shall be the next regular meeting of the board after expiration of the time required for publication of the notice. END_STATUTE

Sec. 67. Section 48-2708, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2708. Levy of special assessment; election; collection; disbursement

A. The board of directors may, when it deems it advisable, may call a special an election, and submit to the qualified electors of the district the question of whether or not a special assessment shall be levied for the purpose of raising money to be applied to any of the purposes provided in this chapter.

B. The election shall be called, held and the result thereof determined and declared in all respects in conformity with the provisions of section 48‑2751. The notice of the election shall specify the amount of money proposed to be raised and the purpose for which it is intended to be used. The ballots shall contain the words, "assessment - -yes" and "assessment - -no." If a majority of the votes cast is "assessment - -yes," the board shall proceed in the manner prescribed in this article for providing funds for the district by taxation.

C. When collected the money shall be paid into the county treasury to the credit of the district, and may be used for the purposes specified in the notice of the special election. END_STATUTE

Sec. 68. Section 48-2709, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2709. Levy of assessments for completion of drainage works; election

A. If the money raised by the sale of bonds issued pursuant to this chapter is insufficient, or if the bonds are unavailable for completion of the plans for drainage and works adopted and additional bonds are not voted, the board of directors shall provide for the completion of the plans by the levy of assessments therefor, but such levy shall not be made except as provided by this section, and the question as to whether or not an assessment shall be made, levied and collected shall first be submitted to a vote of the electors of the district.

B. Before the question is submitted the order of submission shall be entered in the minutes of the board of directors, stating the amount to be levied and the purpose thereof, and if submitted at a special an election shall in addition fix the day of election as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

C. Notice of the special election shall be given by posting notices thereof in three public places in each election precinct in the district for at least fifteen days, and by publication of the notice in a newspaper published in the county in which the office of the board of directors is located for two successive weeks. The notice shall specify the time of holding the election and the amount of the assessment proposed to be levied.

D. The special election shall be held and the result declared in all respects as nearly as practicable in conformity with the provisions of article 4 of this chapter. No informalities in conducting the election shall invalidate it if the election has been otherwise fairly conducted. The ballots at the election shall contain the words, "assessment - -yes" and "assessment - -no."

E. If a majority of the votes cast is "assessment - -yes," the board shall proceed in the same manner as nearly as practicable as prescribed by this article for raising funds for annual expenditures of the district. If a majority of the votes cast is "assessment - -no," the result of the election shall be declared and entered of record on the minutes of the board of directors. END_STATUTE

Sec. 69. Section 48-2751, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2751. Bond election; results

A. For the purpose of constructing the necessary conduits, drains, sluices, water-gates, pumps, pumping plants, embankments and any and all other works and appliances necessary for the drainage of the lands of the district, acquiring the necessary property and rights therefor and otherwise carrying out the provisions of this chapter, the board of directors of the district shall, as soon after the district has been organized as is practicable, and thereafter when the construction fund has been exhausted and it is necessary to raise additional money for such purposes, estimate and determine the amount of money necessary to be raised therefor.

B. The board shall immediately call a special an election at which shall be submitted to the electors of the district the question of whether or not the bonds of the district shall be issued in the amount so determined. The election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

C. Notice of the election shall be given by posting notice thereof in three public places in each election precinct of the district, or if the district is not divided into divisions, in three public places in the district, for at least twenty days, and by publication of the notice in a newspaper published in the county in which the office of the board of directors is located, once a week for at least two successive weeks. The notice shall specify the time of holding the election, the amount of bonds proposed to be issued, the denominations thereof and the maximum rate of interest which the bonds shall bear.

D. The election shall be held and the results thereof determined and declared in all respects as nearly as practicable in conformity with article 4 of this chapter governing the election of directors. No informality in conducting the election shall invalidate it if the election has been otherwise fairly conducted.

E. At the election the ballots shall contain the words, "bonds - -yes" and "bonds - -no." If a majority of the votes cast at the election is "bonds - -yes," the board of directors shall cause the bonds to be issued. If a majority of the votes cast at the election is "bonds - -no," the result of the election shall be declared by the board of directors and entered on its record, and at any time thereafter when a petition signed by one fourth or more of the qualified electors of the district is presented to the board of directors, the board shall record such presentation in its minutes and shall thereupon again submit such question to the electors of the district in the same manner and with like effect as at the previous election. END_STATUTE

Sec. 70. Section 48-2773, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2773. Election to authorize issuance of refunding bonds

A. Immediately after entering the petition on its minutes, the board shall call a special an election at which shall be submitted to the qualified electors of the district the question of whether or not the bonds of the district, in the amount set forth in the petition, shall be issued. The election must be held on the first Tuesday after the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. Notice of the election shall be given by posting notice thereof in three public places in each election precinct in the district for at least twenty days, and by publication of the notice in a newspaper published in the county in which the office of the board of directors is located, once a week for at least two consecutive weeks before the election. The amount of refunding bonds proposed to be issued and the amount of bonds, coupons or other evidences of indebtedness proposed to be refunded, together with a general description thereof, and the time of holding the election, shall be specified in the notice.

C. The election shall be held, and the results thereof determined and declared, in all respects as nearly as practicable in conformity with the provisions of article 4 of this chapter. No informalities in conducting the election shall invalidate it if the election has been otherwise fairly conducted. The ballots at the election shall contain the words, "Bonds ‑ ‑Yes" and "Bonds - -No". If two thirds of the votes cast is "Bonds - -Yes", the board of directors shall issue the refunding bonds. If more than one third of the votes cast at the election is "Bonds - -No", the result of the election shall be so declared. The result in either event shall be entered of record in the minutes of the board of directors. END_STATUTE

Sec. 71. Section 48-3189, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3189. Resolution adopting plan and calling for issuance of bonds; call for bond election

A. Upon receipt of the report of the state certification board the board of directors may determine and declare by resolution that its original plan of works or some modified plan recommended by the state certification board is adopted and that the amount of bonds as stated in its original estimate or a different amount suggested by the state certification board should be issued in order to raise the money necessary therefor.

B. Bonds issued for carrying out a plan disapproved by the state certification board shall not be certified for any purpose by the state certification board, or if any district issues bonds in an amount approved by the state certification board, the district shall not make any material change in the plans thereafter without written consent of the state certification board.

C. Immediately after adoption of the resolution determining the amount of bonds, the board of directors shall call a special an election at which shall be submitted to the qualified electors of the district the question of whether or not the bonds of the district in such amount shall be authorized. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). END_STATUTE

Sec. 72. Section 48-3190, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3190. Election to authorize issuance of bonds

A. Notice of election shall be given by posting notices in three public places in the district for at least twenty days prior to the date of the election and by publication thereof in a newspaper published in the county in which the office of the board of directors is located, once a week for at least three successive weeks prior to the election. The notice shall specify the time of holding the election, the maximum principal amount of bonds proposed to be issued, the purpose for which the bonds are to be issued and the maximum rate of interest which the bonds are to bear and the location of the polling places.

B. Except as otherwise provided, the election shall be held and the result thereof determined and declared in all respects as nearly as practicable in conformity with article 4 of this chapter governing the election of directors. No informalities in conducting the election shall invalidate the election if it has been otherwise fairly conducted.

C. At the election the ballot shall contain the words: "Bonds - -Yes," and "Bonds - -No,". To the right of and opposite each phrase shall be placed a square approximately the size of the squares placed opposite the names of candidates on ballots. The voter shall indicate his vote "Bonds - -Yes" or "Bonds - -No" by inserting the mark "X" in the square opposite such phrase. No other question, word or figure need be printed on the ballot. The ballot need not be of any particular size, and sample ballots are not required to be printed, posted or distributed. If the majority of the votes cast is "Bonds - -Yes," the bonds shall be sold at such times and in such amounts as the board of directors deems advisable.

D. When thereafter the board deems it for the best interest of the district that bonds be issued for district purposes and that the question of issuance thereof be submitted to the electors, the board shall adopt a resolution to that effect and record it in its minutes, and the board may thereupon submit the questions to the electors in the same manner and with like effect as at the previous election. END_STATUTE

Sec. 73. Section 48-3618, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3618. Resolution calling for bond election; notice; manner of conducting election

A. After a county flood control district has been established pursuant to this article, the board may order that facilities be acquired, constructed, operated and maintained from available monies of the district. If sufficient monies are not available, the board may call an election of the electors of the district qualified to vote under article VII, section 13, Constitution of Arizona, to obtain approval for incurring bonded indebtedness of the district to obtain revenue to acquire by purchase, construction or otherwise all or any portion of such facilities.

B. After authority has been acquired for instituting a project within a zone or a joint project by two or more contiguous zones in a district established under this article, the board may order that the facilities approved in the project or joint project be acquired, constructed, operated and maintained from the monies held by the district treasurer for expenditure in the respective zone or zones. If sufficient monies are not available, the board may call an election of the electors of the zone, or of the zones for which a joint project has been authorized, who are qualified to vote under article VII, section 13, Constitution of Arizona, to obtain approval for incurring bonded indebtedness, to obtain revenue to acquire by purchase, construction or otherwise all or any portion of the facilities.

C. The board resolution shall set forth the purpose of the indebtedness, the amount of the indebtedness, the maximum number of years for which the indebtedness is to be incurred, the maximum rate of interest to be paid and the date of the election and shall list the voting places to be used at the election. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The resolution constitutes a notice of the election and shall be published once each week for three consecutive weeks in a newspaper of general circulation in the area of jurisdiction, or if there is no such newspaper, then notice shall be posted in not less than three public places within the area of jurisdiction, the first of which publications shall be not less than twenty days before the date fixed for the election. Publication on the same day of each week is sufficient whether or not a daily newspaper is used for the publication.

D. Except as otherwise expressly provided, the election shall be called and held and the results canvassed in the manner provided by the laws of this state for holding elections on the issuance of bonds by counties for general county purposes. The board may For purposes of the election the board may treat the entire district as a single precinct or may divide the district into such precincts and fix such polling places as it may see fit.

E. If a majority of the votes cast on the proposition is in favor of incurring the bonded indebtedness proposed, the bonds so authorized may be sold and issued by the board of directors either at one time or in blocks. END_STATUTE

Sec. 74. Section 48-3620, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3620. Certification and levy of taxes; limitation

A. The district shall annually, not less than fifteen days before the first day of the month in which the county board of supervisors is required by law to levy county taxes, certify to the board of supervisors:

1. The amount of taxes to be levied in each year on the taxable real property in the district as it considers necessary or appropriate to pay the expenses of administering the district and maintaining and operating the district's flood control system, to carry out its regulatory functions and to carry out any of the objects and purposes of this article of common benefit to the district. The maintenance and operation tax proceeds not used for current expenses of maintenance and operation may either be paid into a reserve to be accumulated for such purpose or may be used for extending, improving and constructing the flood control system including acquiring rights-of-way.

2. The amount of taxes to be levied in each year on all taxable real property in each zone or in any of the zones into which the district has been divided, according to the benefits derived or to be derived by the respective zones, to pay the cost and expenses of carrying out any of the objects or purposes of this article of special benefit to the respective zones, including acquiring, constructing, maintaining, operating, extending, repairing or otherwise improving any or all flood control works or improvements in the respective zones and including acquiring rights‑of‑way. No revenues derived from any of the several zones from the taxes levied under this section may be expended for acquiring, constructing, maintaining, operating, extending, repairing or otherwise improving any works or improvements located in any other zone, except under section 48‑3620.01.

3. The amount of secondary property taxes necessary to be levied to pay the principal and interest falling due during the ensuing year on, or to provide a sinking fund for, any bonds issued pursuant to section 48‑3619.

B. The taxes collected pursuant to this section shall be paid to the district treasurer and used solely for the purpose for which they were levied.

C. The board of supervisors at the time of levying general county taxes shall levy and cause to be collected in the manner prescribed by law for county taxes a property tax or taxes on the taxable real property in the district, zone or zones sufficient to provide the amounts set forth in subsection A of this section.

D. If the district fails to certify to the board of supervisors any of the amounts of taxes necessary to be levied as required by this section, the board of supervisors shall ascertain the amount which should have been certified and shall levy the tax sufficient to produce such amount.

E. If a district is located in a county having a population of less than six hundred thousand persons according to the most recent United States decennial census, beginning with the 1993 tax year, the aggregate taxes levied in any year under this article by the district for the purposes listed in subsection A, paragraph 1 of this section shall not exceed twenty per cent of the county primary property tax rate exclusive of the county equalization assistance for education rate or fifty cents per one hundred dollars of assessed valuation, whichever is greater. The aggregate taxes levied for any year under this article on property in a zone for the purposes listed in subsection A, paragraph 2 of this section in a district located in a county having a population of less than six hundred thousand persons according to the most recent United States decennial census, if added to the aggregate taxes, if any, levied for the purposes listed in subsection A, paragraph 1 of this section, shall not exceed twenty per cent of the county primary property tax rate exclusive of the county equalization assistance for education rate or fifty cents per one hundred dollars of assessed valuation, whichever is greater. The taxes levied under this article in a district located in a county having a population of less than six hundred thousand persons according to the most recent United States decennial census may exceed the limits prescribed by this subsection if approved by a majority of the qualified electors of the district voting in a regular general election held pursuant to title 16, chapter 2, article 2 or at a special election held pursuant to title 16, chapter 2, article 3. The ballot for the election shall specifically state the proposed rate and the fiscal year or years in which the excess tax levies are proposed to be assessed. END_STATUTE

Sec. 75. Section 48-4021, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4021. Community corrections taxes; election

A. If approved at an election pursuant to this section, the district board of directors may levy either an excise tax in the district as provided by section 48‑4022 or an ad valorem tax on the taxable property in the district as provided by section 48‑4023. A district may not levy both an excise tax and an ad valorem property tax.

B. If the board of directors proposes such a an excise tax levy, the board, by resolution, shall either order and call a district-wide special election or place the issue on the ballot of a regular general election held in the district. If the board proposes an ad valorem tax, the board, BY resolution, shall order and call a district-wide election to be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The board shall specify on the ballot the purpose of the tax, the maximum rate of tax, the number of years for which the tax will be authorized and the estimated future revenue needs including the maintenance of effort requirements imposed on the county by this article. The rate of tax shall not exceed the limits prescribed by this article. To be valid the tax authorization must be approved by a majority of the qualified electors voting at the election.

C. In addition to any other requirements prescribed by law, the board shall prepare, print and distribute publicity pamphlets concerning the tax issue proposed. The board shall distribute one copy of the publicity pamphlet to each household containing a registered voter in the district at least ten but not more than thirty days before the election. The publicity pamphlet shall contain all of the following:

1. The date of the election.

2. Polling places and the times the polling places will be open.

3. A true copy of the title and text of the resolution proposing the tax.

4. A summary of the purposes for which the tax is proposed to be levied.

5. The estimated revenue needs, including the maintenance of effort requirements imposed on the county by this article, for the described purposes.

6. An estimate of the annual amount of revenues to be raised from the proposed tax levy.

7. Arguments for and against the proposed tax levy. END_STATUTE

Sec. 76. Section 48-4543, Arizona Revised Statutes, is amended to read:

START_STATUTE48-4543. General obligation bond election; results

A. On determining the amount of money that is necessary to be raised for any of the purposes set forth in section 48‑4542 and that may be subject to repayment under section 48‑4503, subsection B, paragraph 1, the board shall immediately call a special an election to submit to the electors of the district the question of whether the bonds of the district shall be issued in the amount so determined. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. Notice of the election shall be posted in three public places in each election precinct of the district for at least twenty days and by publication in a newspaper published in the county in which the office of the board of directors of the district is located once a week for at least two consecutive weeks. The notice shall state the date of the election, the amount of bonds proposed to be issued, the maximum rate of interest to be borne on the bonds and the denominations.

C. The election shall be held and the results shall be determined and declared in a manner as nearly as practicable as provided by section 48‑4433 governing the election of board members. Informalities in conducting the election do not invalidate the election if it has been otherwise fairly conducted.

D. At the election the ballots shall contain the words "bonds--yes" and "bonds--no". If a majority of the votes cast at the election is "bonds--yes", the board of directors shall cause the bonds to be issued. If a majority of the votes cast is "bonds--no", the result of the election shall be declared by the board of directors and entered on its record, and at any time thereafter when a petition signed by one-fourth or more of the qualified electors of the district is presented to the board of directors, the board shall record such presentation in its minutes and shall again submit the question to the electors of the district in the same manner and with similar effect as at the previous election. END_STATUTE

Sec. 77. Section 48-5501.01, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5501.01. Establishment of special health care district

A. In a county with a population of two million or more persons, the county board of supervisors may submit to a vote of the qualified electors the question of forming a special health care district. The board of supervisors may submit as a single issue the question of forming the special health care district with authority to impose a secondary property tax pursuant to sections 48‑5563 and 48‑5565 and bonding authority. A special health care district formed pursuant to this section shall be geographically coterminous with the county boundaries, and the qualified electors of the county are qualified electors for any election held pursuant to this section.

B. If a majority of the qualified electors voting on the issue approves the formation of the special health care district, the board of supervisors shall order the establishment of the special health care district and shall serve as the board of directors of the district until directors are elected at the next general election as prescribed by section 48‑5541.01. The order of the board of supervisors establishing the special health care district is final, and the special health care district is established on issuance of the order establishing the district.

C. The board of supervisors may also include at the formation election or at any other election called for that purpose the question of issuance of bonds pursuant to section 48‑5566. Any election that includes the question of issuance of bonds must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

D. A special health care district is a tax levying public improvement district for all purposes of article XIII, section 7, Constitution of Arizona, to the extent of the powers, privileges and immunities conferred by this chapter or granted generally to tax levying public improvement districts by the constitution and statutes of this state.

E. If a special health care district is established pursuant to this section, beginning in the fiscal year that county health care system operations are transferred to the district, the economic estimates commission shall decrease the county's base expenditure limit as provided by section 41‑563 by an amount determined as follows:

1. Divide the amount of the county’s expenditures subject to limitation that pertain to the transferred health care system operations for the preceding fiscal year, as determined by the auditor general from the annual expenditure limitation report of the county, by the GDP price deflator, as defined in section 41‑563, for that fiscal year used to calculate expenditure limitations for the fiscal year of the transfer.

2. Multiply the quotient by the GDP price deflator determined for fiscal year 1979‑1980.

3. Divide the amount determined in paragraph 2 for the fiscal year of the transfer by the population of the county, as defined in article IX, section 20, subsection (3), paragraph (f), Constitution of Arizona, for the same fiscal year used to calculate expenditure limitations for the fiscal year of the transfer.

4. Multiply the quotient by the population of the county for fiscal year 1979‑1980. END_STATUTE

Sec. 78. Section 48-5566, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5566. Issuing bonds; election

A. On the approval of a majority of the qualified electors, a special health care district may issue bonds to carry out any of the provisions of this article. If the board of directors determines that bonds should be issued, the board of directors shall apply to the board of supervisors, and the board of supervisors shall submit to a vote of the qualified electors residing in the district the question in the manner prescribed by title 35, chapter 3, article 3. The election must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d).

B. If a majority of the qualified electors voting on the issue at an election scheduled pursuant to section 48‑5503, subsection B approves the issue, the bonds shall be issued as provided by law. END_STATUTE

Sec. 79. 2006 primary property tax levies; counties, cities, towns and community college districts

Notwithstanding sections 15-1461.01 and 42-17107, Arizona Revised Statutes, for the 2006 tax year a county, city, town or community college district shall not fix, levy or assess an amount of primary property taxes that exceeds the lesser of:

1. The amount levied in the 2005 tax year multiplied by 1.02, plus any amounts that are attributable to new construction.

2. The levy limit prescribed by article IX, section 19, Constitution of Arizona, for the county, city, town or community college district for the 2006 tax year.

Sec. 80. Urban revenue sharing fund; appropriation; deposit

A. The sum of $717,127,575 is appropriated from the state general fund in fiscal year 2008-2009 for deposit in the urban revenue sharing fund established by section 43-206, subsection A, Arizona Revised Statutes.

B. Notwithstanding section 43-206, subsection A, Arizona Revised Statutes, the appropriation in subsection A of this section is in lieu of the transfer of the state income tax revenues to the urban revenue sharing fund in fiscal year 2008-2009 as provided by section 43-206, subsection A, Arizona Revised Statutes.

C. The $717,127,575 deposited in the urban revenue sharing fund pursuant to subsection A of this section shall be distributed to incorporated cities and towns pursuant to section 43-206, subsections B, C, D and E.

Sec. 81. Purpose

Pursuant to section 43-223, Arizona Revised Statutes, the legislature enacts sections 43-1085 and 43-1184, Arizona Revised Statutes, as added by this act, to encourage taxpayers to support active members of the armed forces of the United States who are serving in a foreign country by donating to charitable organizations that send gift packages to active members of the armed forces of the United States serving in a foreign country.

Sec. 82. Retroactivity

Section 43-1011, Arizona Revised Statutes, as amended by this act, applies retroactively to taxable years beginning from and after December 31, 2005.

Sec. 83. Effective date

A. Sections 28 through 35 of this act are effective from and after October 31, 2006.

B. Section 43-1022, Arizona Revised Statutes, as amended by this act, is effective and applies to taxable years beginning from and after December 31, 2006.

C. Sections 1 through 8, 11 through 14, 20 through 23, 37, 38, 39, 48 through 73 and 75 through 78 of this act are effective from and after June 30, 2007.