truth in taxation; bonds; notices

HB2289 - 572R - H Ver

House Engrossed

truth in taxation;
bonds; notices

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2289

AN
ACT

amending sections 15-481, 15-491,
15-905.01, 15-1461.01, 35-454, 41-1276, 42-17107
and 48-254, Arizona Revised Statutes; relating to taxation.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section
1.
1. Section
15-481, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-481.

Override election; budget increases; informational pamphlet;
notice; ballot; effect

A. If
a proposed budget of a school district exceeds the aggregate budget limit for
the budget year, at least ninety days before the proposed election the
governing board shall order an override election to be held on the first
Tuesday following the first Monday in November as prescribed by section 16-204,
subsection F for the purpose of presenting the proposed budget to the qualified
electors of the school district who by a majority of those voting either shall
affirm or reject the budget. At the same time as the order of the
election, the governing board shall publicly declare the deadline for
submitting arguments, as set by the county school superintendent pursuant to
subsection B, paragraph 9 of this section, to be submitted in the informational
pamphlet and shall immediately post the deadline in a prominent location on the
district's website. In addition, the governing board shall prepare
an alternate budget that does not include an increase in the budget of more
than the amount allowed 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 pamphlet on the
proposed increase in the budget and a sample ballot and, at least forty days
before the election, shall transmit the informational pamphlet and the sample
ballot to the governing board of the school district. The governing board, on
receipt of the informational pamphlet and the ballot, shall mail or distribute
the informational pamphlet and the ballot to the households in which qualified
electors reside within the school district at least thirty-five days
before 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 informational pamphlet shall contain the
following information:

1. The
date of the election.

2. The
voter's polling place and the times it is open.

3. The
proposed total increase in the budget that exceeds the amount allowed 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 that will fund the increase in the budget and
the amount that will be obtained from a levy of taxes on the taxable property
within the school district for the first year for which the budget increase was
adopted.

7. The
proposed amount of revenues that will fund the increase in the budget and that
will be obtained from other than a levy of taxes on 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. The purpose statement shall only present factual
information in a neutral manner. Advocacy for the expenditures is strictly
limited to the arguments submitted pursuant to paragraph 9 of this subsection.

9. At
least two arguments, if submitted, but not more than ten arguments for and two
arguments, if submitted, but not 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. The
ballot arguments for the proposed increase in the budget shall be signed as the
governing board of the school district without listing any member's individual
name for the arguments for the proposed increase. If submitted,
additional arguments in favor of the proposed increase in the budget shall be
provided in writing with a signed, sworn statement by those in
favor. Arguments against the proposed increase in the budget shall
be provided in writing with a signed, sworn statement by those in
opposition. If the argument is submitted by an organization, it
shall contain the sworn statement of two executive officers of the
organization. If the argument is submitted by a political committee,
it shall contain the sworn statement of the committee's chairperson or
treasurer. If the argument is submitted by an individual and not on
behalf of an organization, a political committee or any other group, the
person

individual
shall submit the
argument with a sworn, notarized statement. The names of persons and
entities submitting written arguments shall be included in the informational
pamphlet. Persons signing the argument shall identify themselves by
giving their residence address and telephone number, which may not appear in
the informational pamphlet, except that the person's city or town and state of
residence shall appear in the pamphlet. Any argument that is
submitted and that does not comply with this paragraph may not be included in
the pamphlet. 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 that 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 pamphlet 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
current limited property value and the net assessed valuation provided by the
department of revenue, the first year 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 oversight 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 oversight 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
$80,000

$100,000
and $300,000
.

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 pamphlet at the school district office or
at public hearings and to produce such information as required in subsection B
of this section. This subsection does not 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 written information provided by the
district pertaining to the override election shall include financial
information showing the estimated first year 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 F. 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 any date prescribed
by section 16-204. The elections shall be conducted as nearly
as practicable in the manner prescribed in article 1 of this chapter, sections
15-422
,

through

15-423,
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 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 P 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 the current net
assessed valuation used for secondary property tax purposes, to fund the
proposed increase in the school district's budget would require an estimated
tax rate of $_____________ per $100 of net 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.

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 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:

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 that
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 fifteen
percent of the revenue control limit as provided in section 15-947,
subsection A for the budget year. �If a school district requests an override
pursuant to section 15-482 or to continue with a budget override pursuant
to section 15-482 for pupils in kindergarten programs and grades one
through three that was authorized before December 31, 2008, the maximum budget
increase that 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 percent 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)

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Small Isolated������������������� Reduction

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���
Count Limit
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School
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���
Base Level
���
Factor

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125
� x 1.358
+ (0.0005 x���� x
$
=
$

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Count))

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Isolated

���������� Phase Down���� Phase Down������������� School
District

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Base
����
Reduction
Factor
�������
Elementary Limit

���������� $150,000��� -�
$

����� =
$

(ii)

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���
Count Limit
��
School
Districts
������
Base Level
���
Factor

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125

x 1.278 + (0.0003 x���� x
$
=
$

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- Student Count))

��������������������������������������������������� Small

���������� Phase
Down���� Phase Down��������������� School District

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Base
����
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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

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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

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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 percent of the revenue control limit attributable to those grade levels
that do not meet the eligibility requirements of th
is
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
percent
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 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 the current net
assessed valuation used for secondary property tax purposes, to fund the
proposed increase in the school district's budget that will be funded by a levy
of taxes on the taxable property within this school district would require an
estimated tax rate of $__________ per $100 of net 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 percent of the revenue control limit as provided in
section 15-947, subsection A for the budget year. For 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 percent of the revenue control limit
means five percent 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. �For a unified school district, five percent of the revenue
control limit means five percent of the revenue control limit attributable to
the weighted student count in preschool programs for children with
disabilities, kindergarten programs and grades one through twelve. For
a union high school district, five percent of the revenue control limit means
five percent of the revenue control limit attributable to the weighted student
count in grades nine through twelve.

L. If
the election is to exceed district additional assistance 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. 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 on 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 the current net
assessed valuation used for secondary property tax purposes, to fund the
proposed increase in the school district's budget would require an estimated
tax rate of $____________ per $100 of net 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 district additional assistance
allowed by law.

M. If
the election is to exceed district additional assistance and if the proposed
increase will be fully funded by revenues from 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. �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 district additional assistance
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 before the election, the department of
revenue shall provide the school district governing board and the county school
superintendent with the current net assessed valuation of the school
district. The governing board and the county school superintendent
shall use the current net assessed valuation of the school district 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, however, may levy on the net 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 allowed 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 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.

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 net 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.

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.

R. If
the voters in a school district vote to adopt a budget in excess of district
additional assistance 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, however, may levy on the net 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 district
additional assistance 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 that, 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 eighty days
before 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 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 after receiving
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
informational pamphlet, except that up to ten percent 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 this section
shall hold a public meeting each year between September 1 and October 31 at
which an update of the programs or capital improvements financed through the
override is discussed and at which the public is allowed an opportunity to
comment and:

1. If
the increase is pursuant to subsection L or M of this section, at a minimum,
the update shall include the progress of capital improvements financed through
the override, 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.

2. If
the increase is pursuant to subsection E, F, I or J of this section, the update
shall include at a minimum the amount expended in the previous fiscal year and
the amount included in the current budget for each of the purposes listed in the
informational pamphlet prescribed by subsection B of this section.

Z. If
a budget in excess of district additional assistance 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
district additional assistance. If the voters in a school district authorize
the additional budget in excess of district additional assistance, the existing
district additional assistance budget increase remains in effect.

AA. Notwithstanding
any other law, the maximum budget increase that may be authorized pursuant to
subsection L or M of this section is ten percent of the school district's
revenue control limit.

BB. If
the election is to continue to exceed the revenue control limit and if the
proposed override will be fully funded by a continuation of a levy of taxes on
the taxable property in the school district, the ballot shall contain the words
"budget override continuation, yes" and "budget override
continuation, no", and the voter shall signify the voter's desired choice.
�The ballot shall also contain the amount of the proposed continuation of the
budget 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 continuation
authorized by this election shall be entirely funded by a levy of taxes on the
taxable property in 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 the current net
assessed valuation used for secondary property tax purposes, to fund the
proposed continuation of the increase in the school district's budget would
require an estimated continuation of a tax rate of $______________ per $100 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.

CC. If
the election is to continue to exceed the revenue control limit as provided in
section 15-482 and if the proposed override will be fully funded by a
continuation of a levy of taxes on the taxable property in the school district,
the ballot shall contain the words "budget override continuation,
yes" and "budget override continuation, no", and the voter shall
signify the voter's desired choice. �The ballot shall also contain the amount
of the proposed continuation of the budget 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 continuation
authorized by this election shall be entirely funded by a levy of taxes on the
taxable property in 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 the current net
assessed valuation used for secondary property tax purposes, to fund the
proposed continuation of the increase in the school district's budget would
require an estimated continuation of a tax rate of $______________ per $100 of
net 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.
END_STATUTE

Sec.
2.
2. Section
15-491, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-491.

Elections on school property; exceptions

A. The governing board of a school district may, and
on petition of fifteen percent 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 monies for
purchasing or leasing school lots, for building or renovating school buildings,
for supplying school buildings with furniture, equipment and technology, for
improving school grounds, for purchasing pupil transportation vehicles or for
liquidating any indebtedness already incurred for such purposes. �Bonds issued
for furniture, equipment and technology, other than fixtures, shall mature not
later than the July 1 that follows the fifth year after the bonds were issued. �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 twenty 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 twenty or more years of the school
buildings or grounds listed on the ballot within twenty years after 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 twenty or more years.

5. To change the list of capital projects or the
purposes authorized by prior voter approval to issue bonds.

6. To extend from six to ten years the time period
to issue class B bonds authorized in 2009 or earlier. �Elections pursuant to
this paragraph may not be held later than the sixth November after the election
approving the issuance of the bonds.

B. A petition is not required for holding 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 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 section 15-402.

D. The governing board shall order the election to
be held and the election notice and procedures to be conducted 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 on 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 informational pamphlet 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 $50,000.

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 new
construction and renovation of school buildings in accordance with state law.

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

________, a career technical education district, is proposing
to issue class B general obligation bonds totaling $_________ to fund capital
improvements at a campus owned or operated and maintained by the career
technical education district.

3. The ballot shall conform to the requirements of
title 35, chapter 3, article 3.

4. At least eighty-five days before the
election, the school district shall submit proposed ballot language to the
county school superintendent and 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 after
receiving the proposed ballot language, shall notify the school district and
the county school superintendent of the director's objections, and the school
district shall resubmit revised ballot language to the director for approval.

5. Not later than thirty-five days before a
class B bond election conducted pursuant to this section, the school district
shall mail an informational pamphlet prepared by the county school
superintendent to each household that contains a qualified elector in the
school district. The informational 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 oversight 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 oversight 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 $100,000
and $300,000
.

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 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
after receiving
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. Not later than thirty-five days before an
impact aid revenue bond election conducted pursuant to this section, the school
district shall mail an informational pamphlet prepared by the county school
superintendent to each household that contains a qualified elector in the school
district. �The informational pamphlet shall contain, at a minimum, the
following information:

(a) The date of the election.

(b) The voter's polling place and the times it is
open.

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

(d) 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
oversight
board.

(e) 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.

(f) 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.

(g) 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 informational pamphlet, except that up to ten
percent of the bond proceeds may be used for general capital expenses,
including cost overruns of proposed capital improvements. The
proposed capital improvements may be changed by a subsequent election as provided
by this section.

K. Each school district that issues bonds under this
section shall 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 allowed 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.

L. If an election is held to change the purpose or
list of capital projects authorized by prior voter approval to issue bonds
pursuant to subsection A, paragraph 5 of this section, the following
requirements apply:

1. The election may be held only on the first
Tuesday after the first Monday in November.

2. Not later than thirty-five days before the
election, the school district shall mail an informational pamphlet prepared by
the county school superintendent to each household in the school district that
contains a qualified elector. The informational pamphlet shall contain, at a
minimum, the following information:

(a) The date of the election.

(b) The voter's polling place and the times it is
open.

(c) A statement as to why the election was called.

(d) A complete list of each proposed capital
improvement that is in addition to the initial capital improvements presented
in the informational pamphlet when the bonds were approved and the proposed
cost of each improvement, including a separate aggregation of capital
improvements for administrative purposes as defined by the school facilities
oversight board.

(e) A complete list of each capital improvement that
was presented in the informational pamphlet when the bonds were initially
approved and that is proposed to be eliminated or to have its cost reduced, and
the proposed cost of each improvement, including a separate aggregation of
capital improvements for administrative purposes as defined by the school
facilities oversight board.

(f) Arguments for and against the proposed change,
if submitted, as provided by section 15-481, subsection B, paragraph
9. The ballot arguments for the proposed change shall be signed as
the governing board of the school district without listing any member's
individual name for the arguments for the proposed change.

3. The ballot shall contain the words "change
capital improvements, yes" and "change capital improvements,
no", and the voter shall signify the voter's desired choice.

4. If the election is to add a purpose that was not
on the initial ballot, the ballot shall list the purpose that is proposed to be
added.

M. If an election is held to extend the time to
issue bonds pursuant to subsection A, paragraph 6 of this section, the
following requirements apply:

1. The election may be held only on the first
Tuesday after the first Monday in November.

2. Not later than thirty-five days before the
election, the school district shall mail an informational pamphlet prepared by
the county school superintendent to each household in the school district that
contains a qualified elector. The informational pamphlet shall contain,
at a minimum, the following information:

(a) The date of the election.

(b) The voter's polling place and the times it is
open.

(c) A statement as to why the election was called.

(d) Arguments for and against the proposed change,
if submitted, as provided in section 15-481, subsection B, paragraph
9. The ballot arguments for the proposed change shall be signed as
the governing board of the school district without listing any member's
individual name for the arguments for the proposed change.

3. The ballot shall contain the words "extend
time to issue bonds, yes" and "extend time to issue bonds, no",
and the voter shall signify the voter's desired choice.
END_STATUTE

Sec.
3.
3. Section
15-905.01, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-905.01.

Truth in taxation; calculation; notice and hearing; vote on tax
increase

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

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

(a) Desegregation pursuant to section 15-910.

(b) Dropout prevention programs.

(c) Career and technical education and vocational
education center operations pursuant to section 15-910.01.

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

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

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

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

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

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

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

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

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

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

Truth
in Taxation Hearing

Notice
of Tax Increase

In compliance with section 15-905.01, Arizona Revised
Statutes, _________ school district is notifying its property taxpayers of
_________ school district's intention to raise its primary property taxes over
the current level to pay for increased expenditures in those areas where the
governing board has the authority to increase property taxes for the fiscal
year beginning July 1, ____. The _________ school district is
proposing an increase in its primary property tax levy of $_________ (amount of
levy increase to pay for truth in taxation base increase, the amount of the
total levy for the adjacent ways fund and amounts for liabilities in excess of
the school district budget pursuant to section 15-907).

The amount proposed above will cause _________ school
district's primary property taxes on a $100,000
and $300,000

home to be $_________
and $_______, respectively
(the
amount used to pay for the budget year's proposed truth in taxation base limit
and adjacent ways levy, including adjacent ways and liabilities in excess of
the school district budget [the amount divided by the current net assessed
value available February 10 pursuant to section 42-17052] applied to $100,000

and
$300,000
). Without
the tax increase, the total taxes that would be owed would have been $_________

and $_______, respectively
(the amount used to pay
for the current year's truth in taxation base limit [the amount divided by the
current net assessed value available February 10 pursuant to section 42-17052]
applied to $100,000
and $300,000
).

These amounts proposed are above the qualifying tax levies as
prescribed by state law, if applicable. The increase is also
exclusive of any changes that may occur from property tax levies for voter
approved bonded indebtedness or budget and tax overrides.

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

at
(location)
.

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

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

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

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

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

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

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

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

Sec.
4.
4. Section
15-1461.01, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-1461.01.

Truth in taxation notice and hearing; roll call vote on tax
increase; definition

A. On or before February 10 of the tax year, the
county assessor shall transmit and certify to the property tax oversight
commission and to the district governing board the total net assessed values
that are required to compute the levy limit prescribed by section 42-17051.
�If the proposed primary property tax levy, excluding amounts that are
attributable to new construction, is greater than the amount levied in the
preceding tax year by the district:

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

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

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

(c) Is at least one-fourth page in size and is
surrounded by a solid black border at least one-eighth inch in width.

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

Truth in Taxation Hearing

Notice
of Tax Increase

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

For example, the proposed tax increase will cause
(name of
community college district's
) primary property taxes on a $100,000
and $300,000
home to be $
(total proposed taxes
including the tax increase)

and $
(total proposed taxes
including the tax increase)
, respectively
. Without the
proposed tax increase, the total taxes that would be owed on a $100,000
and $300,000
home would have been $_____
and
$_____, respectively
.

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

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

(e) Is included in the proposed budget and in the
budget finally adopted pursuant to section 15-1461.

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

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

(a) Include the name of the newspaper of general
circulation in which the truth in taxation notice will be published and the
dates on which the truth in taxation notice will be published.

(b) Be posted on the official website of the
community college district.

4. The district board shall consider a motion to
levy the increased property taxes by roll call vote. If the proposed
levy, exclusive of increased property taxes received from new construction,
constitutes an increase over the preceding tax year's levy by fifteen percent
or more, the motion to levy the increased property taxes must be approved by a
unanimous roll call vote of the district board.

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

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

B. If the governing board fails to comply with the
requirements of this section, the governing board shall not fix, levy or assess
an amount of primary property taxes that exceeds the preceding year's amount,
except for amounts attributable to new construction.

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

Sec.
5.
5. Section 35-454, Arizona Revised Statutes, is
amended to read:

START_STATUTE
35-454.

Informational pamphlet for bond election; review; ballot;
election; return; canvass of votes; certificate of election

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

1. At least thirty-five days before the bond
election, mail a copy of an informational pamphlet to every 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 net assessed valuation as reported by the department of
revenue and the current adopted and estimated tax rates. �For the purposes of
this paragraph, "net 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) of this paragraph, the projected total annual
increase in net 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 net assessed valuation of the political subdivision.

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

(e) Source of repayment.

(f) Estimated issuance costs.

(g) Estimated tax impact of debt service for the
bonds on an owner-occupied residence classified as class three pursuant
to section 42-12003, on commercial property classified as class one
pursuant to section 42-12001, paragraph 12 and on agricultural or other
vacant property classified as class two pursuant to section 42-12002,
assuming the net assessed valuation of the property increases annually at the
lesser of five percent or fifty percent of the projected total annual increase
in net assessed valuation as determined pursuant to subdivision (d) of this
paragraph over the term of the bonds using the same average annual tax rate as
under subdivision (d) of this paragraph, as follows:

The tax impact over the term of the bonds on an owner-occupied
residence valued by the county assessor at $250,000
and $300,000

is estimated to be $___ per year for __ years, or $___ total cost
and $___ per year for ___ years, or $___ total cost, respectively
.

The tax impact over the term of the bonds on commercial
property valued by the county assessor at $1,000,000
and
$2,000,000
is estimated to be $____ per year for __ years, or $______
total cost
and $___ per year for ___ years, or $___ total cost,
respectively
.

The tax impact over the term of the bonds on agricultural or
other vacant property valued by the county assessor at $100,000 is estimated to
be $____ per year for ___ years, or $______ total cost.

(h) In
bold-faced

boldface
type, estimated total cost of the proposed bond
authorization, including principal and interest.

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

(j) Projects and expenditures for which the bonds
are to be issued. The purpose statement shall only present factual information
in a neutral manner. Advocacy for the expenditures is strictly
limited to the arguments submitted pursuant to subdivision (n) of this
paragraph.

(k) Purpose for which the bonds are to be issued
and, if applicable, in
bold-faced

boldface

type, that the amount of the proposed bond authorization combined with
the current outstanding debt exceeds the political subdivision's constitutional
debt limit.

(l) Polling location for the addressee.

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

(n) Arguments for and against the authorization of
one or more of the bond propositions. Each argument filed shall
contain the sworn statement of the person submitting it. If the
argument is submitted by an organization, it shall contain the sworn statement
of two executive officers of the organization. �If the argument is submitted by
a political committee, it shall contain the sworn statement of the committee's
chairperson or treasurer. �If the argument is submitted by an individual and
not on behalf of an organization, a political committee or any other group, the
person shall submit the argument with a sworn, notarized statement. �The names
of persons and entities submitting written arguments shall be included in the
informational pamphlet. Persons signing the argument shall identify
themselves by giving their residence address and telephone number, which may
not appear in the informational pamphlet, except that the person's city or town
and state of residence shall appear in the pamphlet. Any argument that is
submitted and that does not comply with this subdivision may not be included in
the pamphlet.

2. Set a deadline to submit arguments for and
against the authorization of one or more of the bond propositions at a public
meeting and publish the deadline in a newspaper of general circulation in the
jurisdiction of the political subdivision.

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 this
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 for which the principal and interest will be paid by a levy of
property taxes, the ballot shall contain the phrase
in boldface
type
"the issuance of these bonds will result in a property tax
increase sufficient to pay the annual debt service on
bonds". Any written information provided by the political
subdivision pertaining to the bond election shall include financial information
showing the estimated average tax rate for the proposed bond authorization. If
the bonds are to be repaid with secondary property taxes, the ballot shall
contain the words "bond approval, yes" and "bond approval,
no", and the voter shall signify the voter's desired choice. �The ballot
shall also contain the following statement:

A "yes" vote shall authorize the ______ governing
body to issue and sell $______ of ______ bonds of the district to be repaid
with secondary property taxes.

A "no" vote shall not authorize the ______
governing body to issue and sell such bonds of the district.

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 a property tax increase sufficient to pay the annual debt service on
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. �On 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 of this section 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.
6.
6. Section
41-1276, Arizona Revised Statutes, is amended to read:

START_STATUTE
41-1276.

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 chairpersons of the house of representatives
ways and means committee and the senate finance committee, or their successor
committees.

2. The chairpersons 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 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 net assessed value for
the preceding tax year as provided in section 42-17151, subsection A,
paragraph 3.

2. Determine the statewide 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 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 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 of each year.

E. If the legislature proposes qualifying tax rates
that 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 subject to 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
and
$300,000
home to be
$(total
proposed taxes including the tax increase)

and $
(total
proposed taxes including the tax increase)
, respectively
. Without
the proposed tax increase, the total taxes that would be owed on a $100,000
and
$300,000
home would have been
$_______
and $_______, respectively
.

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 the purposes of computing the tax increase
on a

$100,000
and
$300,000
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 qualifying tax rates pursuant
to section 15-971 that 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 tax year 2025 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 is $1.5606 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
$3.1212.
END_STATUTE

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

START_STATUTE
42-17107.

Truth in taxation notice and hearing; roll call vote on tax
increase; definition

A. On or before February 10 of the tax year, the
county assessor shall transmit and certify to the property tax oversight
commission and to the governing body of the county, city or town the total net
assessed values that are required to compute the levy limit prescribed by
section 42-17051. If the proposed primary property tax levy,
excluding amounts that are attributable to new construction, is greater than
the amount levied by the county, city or town in the preceding tax year in the
county, city or town:

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

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

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

(c) Is at least one-fourth page in size and is
surrounded by a solid black border at least one-eighth inch in width.

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

Truth in Taxation Hearing

Notice of Tax Increase

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

For example, the proposed tax increase will cause
(name of
county, city or town)'s
primary property taxes on a $100,000
and
$300,000
home to be $
(total
proposed taxes including the tax increase)

and $
(total proposed taxes including the tax increase)
,
respectively
. Without the proposed tax increase, the total taxes that
would be owed on a $100,000
and
$300,000

home would have been $_____
and $_____, respectively
.

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

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

(e) Is included in the estimates of revenues and
expenses pursuant to section 42-17103 and in the budget finally adopted
pursuant to section 42-17105.

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

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

(a) Include the name of the newspaper of general
circulation in which the truth in taxation notice will be published and the
dates on which the truth in taxation notice will be published.

(b) Be posted on the official website of the county,
city or town.

4. The governing body shall consider a motion to
levy the increased property taxes by roll call vote. If the proposed
levy, exclusive of increased property taxes received from new construction,
constitutes an increase over the preceding tax year's levy by fifteen percent
or more, the motion to levy the increased property taxes must be approved by a
unanimous roll call vote of the governing body.

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

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

B. If the governing body fails to comply with the
requirements of this section, the governing body shall not fix, levy or assess
an amount of primary property taxes that exceeds the preceding year's amount,
except for amounts attributable to new construction.

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

Sec.
8.
8. Section
48-254, Arizona Revised Statutes, is amended to read:

START_STATUTE
48-254.

Truth in taxation notice and hearing; roll call vote on tax
increase; definition

A. On or before February
10 of the tax year, the county assessor shall transmit and certify to the
property tax oversight commission and to the governing body of each county
flood control district, county free library district, county jail district and
public health services district the total net assessed values that are required
to compute the levy prescribed by sections 48-3620, 48-3903, 48-4023,
48-4023.01 and 48-5805. If the proposed secondary property tax levy
of the special taxing district, excluding amounts attributable to new
construction, is greater than the amount levied by the special taxing district
in the preceding tax year:

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

(a) Is published twice in a newspaper of general
circulation in the county. 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) Is published in a location other than the
classified or legal advertising section of the newspaper in which it is
published.

(c) Is at least one-fourth page in size and is
surrounded by a solid black border at least one-eighth inch in width.

(d) Is 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 48-254, Arizona Revised
Statutes,
(name of special taxing district)
is notifying its property
taxpayers of
(name of special taxing district)'s
intention to raise its
secondary property taxes over last year's level. �
(name of special taxing
district)
is proposing an increase in secondary property taxes of
$__________ or _____%.

For example, the proposed tax increase will cause
(name of
special taxing district)'s
secondary property taxes on a $100,000
and $300,000
home to be $
(total proposed taxes
including the tax increase)

and $
(total proposed taxes
including the tax increase)
, respectively
. Without the proposed tax
increase, the total taxes that would be owed on a $100,000
and $300,000

home would have been $_______
and $_____, respectively
.

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

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

(e) Is included in the proposed budget and in the
budget finally adopted pursuant to section 48-252.

2. Instead of
publishing the truth in taxation notice, the governing body may mail the truth
in taxation notice prescribed by paragraph 1, subdivision (d) of this
subsection to all registered voters in the special taxing district at least ten
but not more than twenty days before the date of the hearing on the estimates
pursuant to section 42-17104.

3. In addition to publishing the truth in taxation
notice under paragraph 1 of this subsection or mailing the notice under
paragraph 2 of this subsection, the governing body shall issue a press release
containing the truth in taxation notice. �The press release must:

(a) Include the name of the newspaper of general
circulation in which the truth in taxation notice will be published and the
dates on which the truth in taxation notice will be published.

(b) Be posted on the official website of the special
taxing district.

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

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

6. The governing body shall hold the truth in
taxation hearing concurrently with the adoption of the county budget under
section 42-17105.

B. If the governing body fails to comply with the
requirements of this section, the governing body may not fix, levy or assess an
amount of secondary property taxes that exceeds the preceding year's amount,
except for amounts attributable to new construction.

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