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SB1613 - 572R - S Ver
Senate Engrossed
reviser's technical
corrections; 2026
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1613
AN
ACT
Repealing
section 4-205.11, Arizona Revised Statutes;
amending
section 13-2910.11, Arizona Revised Statutes, as added by Laws 2021,
chapter 366, section 1; repealing section 13-2910.11, Arizona Revised
Statutes, as amended by laws 2025, chapter 255, section 2;
amending section
36-2212, Arizona Revised Statutes, as amended by Laws 2025, chapter 212,
section 1; repealing section 36-2212, Arizona Revised Statutes, as
amended by laws 2025, chapter 212, section 2; amending section 42-5159,
Arizona Revised Statutes, as amended by Laws 2025, chapter 135, section 2 and
chapter 247, section 2; repealing section 42-5159, Arizona Revised
Statutes, as amended by laws 2025, chapter 251, section 13; amending section 48-261,
Arizona Revised Statutes, as amended by laws 2017, chapter 46, section 1;
repealing section 48-261, Arizona Revised Statutes, as amended by laws
2025, chapter 61, section 1; relating to multiple, defective and conflicting
legislative dispositions of statutory text.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1.
Purpose
1. Section 4-205.11,
Arizona Revised Statutes, was repealed by Laws 2025, chapter 36, section
5. However, this section was erroneously identified in the title of
the act.� In order to comply with article IV, part 2, section 13, Constitution
of Arizona, this act repeals section 4-205.11, Arizona Revised Statutes.
2. Section 13-2910.11,
Arizona Revised Statutes, was amended by Laws 2025, chapter 255, section
2. However, this version did not reflect the previous valid version
of the section. In order to comply with article IV, part 2, section
14, Constitution of Arizona, this act amends section 13-2910.11, Arizona
Revised Statutes, as added by Laws 2021, chapter 366, section 1, to incorporate
the amendments made by Laws 2025, chapter 255 and repeals the chapter 255
version.
3. Section 36-2212, Arizona
Revised Statutes, was amended by Laws 2025, chapter 212, section 2, as amended
by Laws 2025, chapter 212, section 1. However, this version did not
reflect the previous valid version of the section.� In order to comply with
article IV, part 2, section 14, Constitution of Arizona, this act amends
section 36-2212, Arizona Revised Statutes, as amended by Laws 2025, chapter
212, section 1, to incorporate the amendments made by Laws 2025, chapter 212,
section 2 and repeals the chapter 212, section 2 version.
4. Section 42-5159, Arizona
Revised Statutes, was amended by Laws 2025, chapter 251, section
13. However, this version did not reflect the previous valid version
of the section.� In order to comply with article IV, part 2, section 14,
Constitution of Arizona, this act amends section 42-5159, Arizona Revised
Statutes, as amended by Laws 2025, chapter 135, section 2 and chapter 247,
section 2, to incorporate the amendments made by Laws 2025, chapter 251 and
repeals the chapter 251 version.
5. Section 48-261, Arizona
Revised Statutes, was amended by Laws 2025, chapter 61, section
1. However, this version did not reflect the previous valid version
of the section.� In order to comply with article IV, part 2, section 14,
Constitution of Arizona, this act amends section 48-261, Arizona Revised
Statutes, as amended by Laws 2017, chapter 46, section 1, to incorporate the
amendments made by Laws 2025, chapter 61 and repeals the chapter 61 version.
Sec. 2.
Repeal
Section 4-205.11, Arizona Revised
Statutes, is repealed.
Sec.
3. Section 13-2910.11, Arizona Revised Statutes, as added by Laws
2021, chapter 366, section 1, is amended to read:
START_STATUTE
13-2910.11.
Unlawful animal ownership or possession; transfer of animals;
restoration of right to possess animals; classification; good cause exception;
definitions
A. It is unlawful for a
person who has been convicted of any of the following offenses to own, possess,
adopt, foster, reside with or otherwise intentionally contact, care for or have
custody of any animal in the person's household:
1. An
intentional or knowing violation of cruelty to animals pursuant to section 13-2910,
subsection A, paragraph 1, 2, 3, 7, 8, 9,
11, 14
12, 15
or
15
16
.
2. Cruelty
to animals pursuant to section 13-2910, subsection A, paragraph 4.
3. Animal
fighting pursuant to section 13-2910.01.
4. Bestiality
pursuant to section 13-1411.
B. Except
as provided in subsection D of this section, the prohibitions listed in
subsection A of this section shall remain in place for the following amount of
time:
1. For
a first misdemeanor conviction, at least five years.
2. For
a first felony conviction or a second or subsequent misdemeanor conviction, at
least ten years.
3. For
a second or subsequent felony conviction, for the person's lifetime.
C. Within
thirty days after a person is prohibited from possessing an animal pursuant to
this section, the person shall transfer all animals in the person's care or
custody to another person who is not in the person's household.
D. On
proper application and not less than one year after the person is convicted of
a misdemeanor violation of an offense listed in subsection A of this section or
two and one-half years after the person is convicted of a felony
violation
OF AN OFFENSE LISTED
IN SUBSECTION A OF THIS SECTION
, the person may apply to have the
person's right to possess an animal restored. Any time spent on
absconder status while on probation, on escape status or incarcerated is
excluded in calculating the minimum time requirement. The person may
apply to the judge, justice of the peace or magistrate who pronounced sentence
or imposed probation or the
SUCCESSOR IN OFFICE OF THE
judge, justice of the peace or
magistrate's successor in office
MAGISTRATE
. The applicant shall serve a copy
of the application on the prosecutor. The court shall conduct a
hearing on the request within sixty days after the application is filed.� The
defendant bears the burden by a preponderance of evidence at the
hearing. To assist the court in making a determination, the court
shall require the person to complete a psychiatric or psychological examination
and undergo counseling, if necessary, before restoring the person's right to
possess an animal. The court may terminate or reduce the time period
required by subsection B of this section on a finding that:
1. The
applicant does not present a danger to self, the animal's immediate family and
the public.
2. The
applicant has the ability to properly care for all animals in the applicant's
possession.
3. The
applicant has successfully completed all classes or counseling that was ordered
by the sentencing court.
E. A convicted person who lives in a household with
an animal that is owned, possessed, adopted or fostered by another person in
the household may apply to the court for a good cause exception.� A good cause
exception is valid for one year and allows the convicted person to reside in
the same household as an animal. The convicted person may request
the court to renew a good cause exception sixty days before the good cause
exception expires.� The court may grant a good cause exception or renew a good
cause exception if all of the following apply:
1. The convicted person is on supervised or
unsupervised probation, community supervision or parole or agrees to be subject
to the court's jurisdiction and supervision while living in the household.
2. The court determines that it is in the best
interests of the animal and the person who owns, possesses, adopts or fosters
the animal to allow the convicted person to remain in the same household and
reside with the animal.
3. The convicted person agrees to not intentionally
contact, care for or have custody of the animal.
F. A
person who violates this section is guilty of a class 1 misdemeanor.
G. For
the purposes of this section:
1. "Animal":
(a) Means
any domesticated dog or cat.
(b) Does
not include livestock as defined in section 3-1201 or wildlife as defined
in section 17-101.
2. "Household" includes all of the persons
who occupy a housing unit as the person's usual place of residence, including
all of the following:
(a) The related family members and all unrelated
persons, if any, such as lodgers, foster children, wards or employees who share
the housing unit.
(b) A person who lives alone in a housing unit or a
group of unrelated persons sharing a housing unit such as partners or roomers.
3. "Housing unit" means a house, an
apartment, a mobile home or trailer, a group of rooms or a single room occupied
as separate living quarters for a household and includes any front, side or
rear yards and any garages and detached garages that are under the control of
the household.
END_STATUTE
Sec. 4.
Repeal
Section 13-2910.11, Arizona Revised
Statutes, as amended by Laws 2025, chapter 255, section 2, is repealed.
Sec. 5. Section 36-2212, Arizona Revised
Statutes, as amended by Laws 2025, chapter 212, section 1, is amended to read:
START_STATUTE
36-2212.
Certificate of registration to operate an ambulance; termination
on change in ownership; fees
A. A person shall not operate an ambulance in this
state unless the ambulance has a certificate of registration and complies with
this article and the rules, standards and criteria adopted pursuant to this
article.
B. A person may obtain a certificate of registration
to operate an ambulance by submitting an application on a form prescribed by
the director and by demonstrating to the director's satisfaction that the
applicant is in compliance with this article and all rules, standards and
criteria adopted by the director for the operation of an ambulance.
C. A certificate of registration issued under this
section terminates on any change of ownership or control of the
ambulance. Following any change of ownership, the new owner of an
ambulance shall apply for and receive a new certificate of registration from
the director before the ambulance may again be operated in this
state. This subsection does not apply if an ambulance service
borrows, leases, rents or otherwise obtains a registered ambulance from another
ambulance service to temporarily replace an inoperable ambulance.
D. The department shall issue a certificate of
registration to a person that complies with the requirements of this article
and that pays an initial registration fee. A certificate of
registration is valid for one year but an ambulance service may request that
the department issue an initial certificate of registration that expires before
the end of one year in order for the department to conduct an annual inspection
of all of the ambulance service's ambulances at one time. A person
may renew a certificate of registration by complying with the requirements of
this article and by paying a renewal fee prescribed by the
director. The fee for initial registration and registration renewal
shall not exceed $50 for each ambulance. The department shall base
these fees on an amount that approximates the per vehicle costs incurred by the
department to administer this chapter. The director shall deposit,
pursuant to sections 35-146 and 35-147, fees collected under this
subsection in the state general fund. The department shall not
charge a registration fee for an ambulance to an ambulance service that
operates an ambulance or ambulances only as a volunteer not-for-profit service.
E. Notwithstanding the period of time
for which a certificate of registration is valid pursuant to subsection D of
this section, if the
certificate of registration holder
timely submits a complete renewal application in compliance with this article
and the rules adopted pursuant to this article and the department
is unable to perform an inspection of an ambulance within the time
frame prescribed by section 36-2232, subsection A, paragraph 13,
the department may allow an ambulance's registration
to remain valid and in effect until the department completes the
required inspection.
END_STATUTE
Sec. 6.
Repeal
Section 36-2212, Arizona Revised
Statutes, as amended by Laws 2025, chapter 212, section 2, is repealed.
Sec. 7. Section 42-5159, Arizona Revised
Statutes, as amended by Laws 2025, chapter 135, section 2 and chapter 247,
section 2, is amended to read:
START_STATUTE
42-5159.
Exemptions
A. The tax levied by this article does not apply to the
storage, use or consumption in this state of the following described tangible
personal property:
1. Tangible personal property, sold in this state, the
gross receipts from the sale of which are included in the measure of the tax
imposed by articles 1 and 2 of this chapter.
2. Tangible personal
property, the sale or use of which has already been subjected to an excise tax
at a rate equal to or exceeding the tax imposed by this article under the laws
of another state of the United States. If the excise tax imposed by
the other state is at a rate less than the tax imposed by this article, the tax
imposed by this article is reduced by the amount of the tax already imposed by
the other state.
3. Tangible personal property, the storage, use or
consumption of which the constitution or laws of the United States prohibit
this state from taxing or to the extent that the rate or imposition of tax is
unconstitutional under the laws of the United States.
4. Tangible personal property that directly enters
into and becomes an ingredient or component part of any manufactured,
fabricated or processed article, substance or commodity for sale in the regular
course of business.
5. Motor vehicle fuel and use fuel, the sales,
distribution or use of which in this state is subject to the tax imposed under
title 28, chapter 16, article 1, use fuel that is sold to or used by a person
holding a valid single trip use fuel tax permit issued under section 28-5739,
aviation fuel, the sales, distribution or use of which in this state is subject
to the tax imposed under section 28-8344, and jet fuel, the sales,
distribution or use of which in this state is subject to the tax imposed under
article 8 of this chapter.
6. Tangible personal property brought into this state
by an individual who was a nonresident at the time the property was purchased
for storage, use or consumption by the individual if the first actual use or
consumption of the property was outside this state, unless the property is used
in conducting a business in this state.
7. Purchases of implants used as growth promotants and
injectable medicines, not already exempt under paragraph 16 of this subsection,
for livestock and poultry owned by, or in possession of, persons who are
engaged in producing livestock, poultry, or livestock or poultry products, or
who are engaged in feeding livestock or poultry commercially. For
the purposes of this paragraph, "poultry" includes ratites.
8. Purchases of:
(a) Livestock and poultry to persons engaging in the
businesses of farming, ranching or producing livestock or poultry.
(b) Livestock and poultry feed, salts, vitamins and
other additives sold to persons for use or consumption in the businesses of
farming, ranching and producing or feeding livestock or poultry or for use or
consumption in noncommercial boarding of livestock. For the purposes
of this paragraph, "poultry" includes ratites.
9. Propagative
materials for use in commercially producing agricultural, horticultural,
viticultural or floricultural crops in this state. For the purposes
of this paragraph, "propagative materials":
(a) Includes
seeds, seedlings, roots, bulbs, liners, transplants, cuttings, soil and plant
additives, agricultural minerals, auxiliary soil and plant substances,
micronutrients, fertilizers, insecticides, herbicides, fungicides, soil
fumigants, desiccants, rodenticides, adjuvants, plant nutrients and plant
growth regulators.
(b) Except
for use in commercially producing industrial hemp as defined in section 3-311,
does not include any propagative materials used in producing any part,
including seeds, of any plant of the genus cannabis.
10. Tangible personal property not exceeding $200 in
any one month purchased by an individual at retail outside the continental
limits of the
United States for the individual's own
personal use and enjoyment.
11. Advertising supplements that are intended for sale
with newspapers published in this state and that have already been subjected to
an excise tax under the laws of another state in the United States that equals
or exceeds the tax imposed by this article.
12. Materials that are purchased by or for publicly
funded libraries
,
including school
district libraries, charter school libraries, community college libraries,
state university libraries or federal, state, county or municipal libraries
,
for use by the public as follows:
(a) Printed or photographic materials, beginning August
7, 1985.
(b) Electronic or digital media materials, beginning
July 17, 1994.
13. Tangible personal property purchased by:
(a) A hospital organized and operated exclusively for
charitable purposes, no part of the net earnings of which inures to the benefit
of any private shareholder or individual.
(b) A hospital operated by this state or a political
subdivision of this state.
(c) A licensed nursing care institution or a licensed
residential care institution or a residential care facility operated in
conjunction with a licensed nursing care institution or a licensed kidney
dialysis center, which provides medical services, nursing services or health
related services and is not used or held for profit.
(d) A qualifying health care organization, as defined
in section 42-5001, if the tangible personal property is used by the
organization solely to provide health and medical related educational and
charitable services.
(e) A qualifying health care organization as defined in
section 42-5001 if the organization is dedicated to providing
educational, therapeutic, rehabilitative and family medical education training
for blind and visually impaired children and children with multiple
disabilities from the time of birth to age twenty-one.
(f) A nonprofit charitable organization that has
qualified under section 501(c)(3) of the United States internal revenue code
and that engages in and uses such property exclusively in programs for persons
with mental or physical disabilities if the programs are exclusively for
training, job placement, rehabilitation, or testing.
(g) A person that is subject to tax under this chapter
by reason of being engaged in business classified under section 42-5075,
or a subcontractor working under the control of a person that is engaged in
business classified under section 42-5075, if the tangible personal
property is any of the following:
(i) Incorporated or fabricated by the person into a
structure, project, development or improvement in fulfillment of a contract.
(ii) Incorporated or fabricated by the person into any
project described in section 42-5075, subsection
O
P
.
(iii) Used in environmental response or remediation
activities under section 42-5075, subsection B, paragraph 6.
(h) A person that is not subject to tax under section
42-5075 and that has been provided a copy of a certificate described in
section 42-5009, subsection L, if the property purchased is incorporated
or fabricated by the person into the real property, structure, project,
development or improvement described in the certificate.
(i) A nonprofit charitable organization that has
qualified under section 501(c)(3) of the internal revenue code if the property
is purchased from the parent or an affiliate organization that is located
outside this state.
(j) A qualifying community health center as defined in
section 42-5001.
(k) A nonprofit charitable organization that has
qualified under section 501(c)(3) of the internal revenue code and that
regularly serves meals to the needy and indigent on a continuing basis at no
cost.
(l) A person engaged in business under the transient
lodging classification if the property is a personal hygiene item or articles
used by human beings for food, drink or condiment, except alcoholic beverages,
which are furnished without additional charge to and intended to be consumed by
the transient during the transient's occupancy.
(m) For taxable periods beginning from and after June
30, 2001, a nonprofit charitable organization that has qualified under section
501(c)(3) of the internal revenue code and that provides residential apartment
housing for
low-income
persons over sixty-two
years of age in a facility that qualifies for a federal housing subsidy, if the
tangible personal property is used by the organization solely to provide
residential apartment housing for
low-income
persons over sixty-two
years of age in a facility that qualifies for a federal housing subsidy.
(n) A qualifying health sciences educational
institution as defined in section 42-5001.
(o) A person representing or working on behalf of any
person described in subdivision (a), (b), (c), (d), (e), (f), (i), (j), (k),
(m) or (n) of this paragraph, if the tangible personal property is incorporated
or fabricated into a project described in section 42-5075, subsection
O
P
.
14. Commodities, as defined by title 7 United States
Code section 2, that are consigned for resale in a warehouse in this state
in or from which the commodity is deliverable on a contract for future delivery
subject to the rules of a commodity market regulated by the United States
commodity futures trading commission.
15. Tangible personal property sold by:
(a) Any nonprofit organization organized and
operated exclusively for charitable purposes and recognized by the United
States internal revenue service under section 501(c)(3) of the internal revenue
code.
(b) A nonprofit organization that is exempt from
taxation under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal
revenue code if the organization is associated with a major league baseball
team or a national touring professional golfing association and no part of the
organization's net earnings inures to the benefit of any private shareholder or
individual. This subdivision does not apply to an organization that
is owned, managed or controlled, in whole or in part, by a major league
baseball team, or its owners, officers, employees or agents, or by a major
league baseball association or professional golfing association, or its owners,
officers, employees or agents, unless the organization conducted or operated
exhibition events in this state before January 1, 2018 that were exempt from
transaction privilege tax under section 42-5073.
(c) A nonprofit organization that is exempt from
taxation under section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8)
of the internal revenue code if the organization sponsors or operates a rodeo
featuring primarily farm and ranch animals and no part of the organization's
net earnings inures to the benefit of any private shareholder or individual.
16. Drugs and medical oxygen, including delivery hose,
mask or tent, regulator and tank,
if
prescribed by
a member of the medical, dental or veterinarian profession who is
licensed by law to administer such substances.
17. Prosthetic appliances, as defined in section 23-501,
prescribed or recommended by a person who is licensed, registered or otherwise
professionally credentialed as a physician, dentist, podiatrist, chiropractor,
naturopath, homeopath, nurse or optometrist.
18. Prescription eyeglasses and contact lenses.
19. Insulin, insulin syringes and glucose test strips.
20. Hearing aids as defined in section 36-1901.
21. Durable medical equipment that has a centers for
medicare and medicaid services common procedure code, is designated
reimbursable by medicare, is prescribed by a person who is licensed under title
32, chapter 7, 13, 17 or 29, can withstand repeated use, is primarily and
customarily used to serve a medical purpose, is generally not useful to a
person in the absence of illness or injury and is appropriate for use in the
home.
22. Food, as provided in and subject to the conditions
of article 3 of this
chapter
and sections 42-5074 and 42-6017.
23. Items purchased with United States department of
agriculture coupons issued under the supplemental nutrition assistance program
pursuant to the food and nutrition act of 2008 (P.L. 88-525; 78 Stat
.
703; 7 United States Code sections 2011
through 2036b) by the United States department of agriculture food and
nutrition service or food instruments issued under section 17 of the child
nutrition act (P.L. 95-627; 92 Stat. 3603; P.L. 99-661,
section 4302; P.L. 111-296; 42 United States Code
section 1786).
24. Food and drink provided without monetary charge by
a taxpayer that is subject to section 42-5074 to its employees for their
own consumption on the premises during the employees' hours of employment.
25. Tangible
personal property that is used or consumed in a business subject to section 42-5074
for human food, drink or condiment, whether simple, mixed or compounded.
26. Food, drink or condiment and accessory tangible
personal property that are acquired for use by or provided to a school district
or charter school if they are to be either served or prepared and served to
persons for consumption on the premises of a public school in the school
district or on the premises of the charter school during school hours.
27. Lottery tickets or shares purchased pursuant to
title 5, chapter 5.1, article 1.
28. Textbooks, sold by a bookstore, that are required
by any state university or community college.
29. Magazines, other periodicals or other publications
produced by this state to encourage tourist travel.
30. Paper machine clothing, such as forming fabrics and
dryer felts, purchased by a paper manufacturer and directly used or consumed in
paper manufacturing.
31. Coal, petroleum, coke, natural gas, virgin fuel oil
and electricity purchased by a qualified environmental technology manufacturer,
producer or processor as defined in section 41-1514.02 and directly used
or consumed in
generating
or
providing
on-site power
or energy solely for environmental technology manufacturing, producing or
processing or environmental protection. This paragraph
applies
for twenty full
consecutive calendar or fiscal years from the date the first paper
manufacturing machine is placed in service. In the case of an
environmental technology manufacturer, producer or processor
that
does not manufacture paper, the time
period
begins
with the date the
first manufacturing, processing or production equipment is placed in service.
32. Motor vehicles that are removed from inventory by a
motor vehicle dealer as defined in section 28-4301 and that are provided
to:
(a) Charitable or educational institutions that are
exempt from taxation under section 501(c)(3) of the internal revenue code.
(b) Public educational institutions.
(c) State universities or affiliated organizations of a
state university if no part of the organization's net earnings inures to the
benefit of any private shareholder or individual.
33. Natural gas or liquefied petroleum gas used to
propel a motor vehicle.
34. Machinery, equipment, technology or related
supplies that are only useful to assist a person with a physical disability as
defined in section 46-191 or a person who has a developmental disability
as defined in section 36-551 or has a head injury as defined in section
41-3201 to be more independent and functional.
35. Liquid, solid or gaseous chemicals used in
manufacturing, processing, fabricating, mining, refining, metallurgical
operations, research and development and, beginning on January 1, 1999,
printing, if using or consuming the chemicals, alone or as part of an
integrated system of chemicals, involves direct contact with the materials from
which the product is produced for the purpose of causing or allowing a chemical
or physical change to occur in the materials as part of the production process. This
paragraph does not include chemicals that are used or consumed in activities
such as packaging, storage or transportation but does not affect any exemption
for such chemicals that is otherwise provided by this section. For
the purposes of this paragraph, "printing" means a commercial
printing operation and includes job printing, engraving, embossing, copying and
bookbinding.
36. Food, drink and condiment purchased for
consumption within the premises of any prison, jail or other institution under
the jurisdiction of the state department of corrections, the department of
public safety, the department of juvenile corrections or a county sheriff.
37. A motor vehicle and any repair and replacement
parts and tangible personal property becoming a part of such motor vehicle sold
to a motor carrier
that
is subject to a fee
prescribed in title 28, chapter 16, article 4 and
that
is engaged in the business of leasing or
renting such
a
property.
38. Tangible personal property that is or directly
enters into and becomes an ingredient or component part of cards used as
prescription plan identification cards.
39. Overhead materials or other tangible personal
property that is used in performing a contract between the United States
government and a manufacturer, modifier, assembler or repairer, including
property used in performing a subcontract with a government contractor who is a
manufacturer, modifier, assembler or repairer, to which title passes to the
government under the terms of the contract or subcontract. For the
purposes of this paragraph:
(a) "Overhead materials" means tangible
personal property, the gross proceeds of sales or gross income derived from
which would otherwise be included in the retail classification, that is used or
consumed in performing a contract, the cost of which is charged to an overhead
expense account and allocated to various contracts based on generally accepted
accounting principles and consistent with government contract accounting
standards.
(b) "Subcontract" means an agreement between
a contractor and any person who is not an employee of the contractor for
furnishing of supplies or services that, in whole or in part, are necessary to
perform
one or more
government contracts, or under which any portion of the contractor's obligation
under one or more government contracts is performed, undertaken or assumed, and
that includes provisions causing title to overhead materials or other tangible
personal property used in
performing
the subcontract to
pass to the government or that includes provisions incorporating such title
passing clauses in a government contract into the subcontract.
40. Through December 31, 1994, tangible personal
property sold pursuant to a personal property liquidation transaction, as
defined in section 42-5061. From and after December 31, 1994,
tangible personal property sold pursuant to a personal property liquidation
transaction, as defined in section 42-5061, if the gross proceeds of the
sales were included in the measure of the tax imposed by article 1 of this
chapter or if the personal property liquidation was a casual activity or
transaction.
41. Wireless telecommunications equipment that is
held for sale or transfer to a customer as an inducement to enter into or
continue a contract for telecommunications services that are taxable under
section 42-5064.
42. Alternative fuel, as defined in section 1-215,
purchased by a used oil fuel burner who has received a permit to burn used oil
or used oil fuel under section 49-426 or 49-480.
43. Tangible personal property purchased by a
commercial airline and consisting of food, beverages and condiments and
accessories used for serving the food and beverages, if those items are to be
provided without additional charge to passengers for consumption in
flight. For the purposes of this paragraph, "commercial
airline" means a person holding a federal certificate of public
convenience and necessity or foreign air carrier permit for air transportation
to transport persons, property or United States mail in intrastate, interstate
or foreign commerce.
44. Alternative fuel vehicles if the vehicle was
manufactured as a diesel fuel vehicle and converted to operate on alternative
fuel and equipment that is installed in a conventional diesel fuel motor
vehicle to convert the vehicle to operate on an alternative fuel, as defined in
section 1-215.
45. Gas diverted from a pipeline, by a person engaged
in the business of:
(a) Operating a natural or artificial gas pipeline,
and used or consumed for the sole purpose of fueling compressor equipment that
pressurizes the pipeline.
(b) Converting natural gas into liquefied natural
gas, and used or consumed for the sole purpose of fueling compressor equipment
used in the conversion process.
46. Tangible personal property that is excluded, exempt
or deductible from transaction privilege tax pursuant to section 42-5063.
47. Tangible
personal property purchased to be incorporated or installed as part of
environmental response or remediation activities under section 42-5075,
subsection B, paragraph 6.
48. Tangible personal property sold by a nonprofit
organization that is exempt from taxation under section 501(c)(6) of the
internal revenue code if the organization produces, organizes or promotes
cultural or civic related festivals or events and no part of the organization's
net earnings inures to the benefit of any private shareholder or individual.
49. Prepared food, drink or condiment donated by a
restaurant as classified in section 42-5074, subsection A to a nonprofit
charitable organization that has qualified under section 501(c)(3) of the
internal revenue code and that regularly serves meals to the needy and indigent
on a continuing basis at no cost.
50. Application
services that are designed to assess or test student learning or to promote
curriculum design or enhancement purchased by or for any school district, charter
school, community college or state university. For the purposes of this
paragraph:
(a) "Application services" means software
applications provided remotely using hypertext transfer protocol or another
network protocol.
(b) "Curriculum design or enhancement" means
planning, implementing or reporting on courses of study, lessons, assignments
or other learning activities.
51. Motor vehicle fuel and use fuel to a qualified
business under section 41-1516 for off-road use in harvesting, processing
or transporting qualifying forest products removed from qualifying projects as
defined in section 41-1516.
52. Repair parts installed in equipment used directly
by a qualified business under section 41-1516 in harvesting, processing
or transporting qualifying forest products removed from qualifying projects as
defined in section 41-1516.
53. Renewable energy credits or any other unit created
to track energy derived from renewable energy resources. For the
purposes of this paragraph, "renewable energy credit" means a unit
created administratively by the corporation commission or governing body of a
public power entity to track kilowatt hours of electricity derived from a
renewable energy resource or the kilowatt hour equivalent of conventional
energy resources displaced by distributed renewable energy resources.
54.
Coal
acquired from an owner or operator of a power plant by a person
that
is responsible for refining coal if both
of the following apply:
(a) The transfer of title or possession of the coal is
for the purpose of refining the coal.
(b) The title or possession of the coal is transferred
back to the owner or operator of the power plant after completion of the coal
refining process. For the purposes of this subdivision, "coal
refining process" means the application of a coal additive system that
aids the reduction of power plant emissions during the combustion of coal and
the treatment of flue gas.
55. Tangible personal property incorporated or
fabricated into a project described in section 42-5075, subsection
O
P
, that is located within the
exterior boundaries of an Indian reservation for which the owner, as defined in
section 42-5075, of the project is an Indian tribe or an affiliated
Indian. For the purposes of this paragraph:
(a) "Affiliated Indian" means an individual
Native American Indian who is duly registered on the tribal rolls of the Indian
tribe for whose benefit the Indian reservation was established.
(b) "Indian reservation" means all lands that
are within the limits of areas set aside by the United States for the exclusive
use and occupancy of an Indian tribe by treaty, law or executive order and that
are recognized as Indian reservations by the United States department of the
interior.
(c) "Indian tribe" means any organized
nation, tribe, band or community that is recognized as an Indian tribe by the
United States department of the interior and includes any entity formed under
the laws of the Indian tribe.
56.
Cash
equivalents, precious metal bullion and monetized bullion purchased by the
ultimate consumer, but coins or other forms of money for manufacture into
jewelry or works of art are subject to tax, and tangible personal property that
is purchased through the redemption of any cash equivalent by the holder as a
means of payment for goods that are subject to tax under this article is
subject to tax. For the purposes of this paragraph:
(a) "Cash equivalents" means items, whether
or not negotiable, that are sold to one or more persons, through which a value
denominated in money is purchased in advance and that may be redeemed in full
or in part for tangible personal property, intangibles or
services. Cash equivalents include gift cards, stored value cards,
gift certificates, vouchers, traveler's checks, money orders or other tangible
instruments or orders. Cash equivalents do not include either of the following:
(i) Items that are sold to one or more persons and
through which a value is not denominated in money.
(ii) Prepaid calling cards for telecommunications
services.
(b) "Monetized bullion" means coins and other
forms of money that are manufactured from gold, silver or other metals and that
have been or are used as a medium of exchange in this or another state, the
United States or a foreign nation.
(c) "Precious metal
bullion" means precious metal, including gold, silver, platinum, rhodium
and palladium, that has been smelted or refined so that its value depends on
its contents and not on its form.
B. In addition to the exemptions allowed by subsection
A of this section, the following categories of tangible personal property are
also exempt:
1. Machinery, or equipment, used directly in
manufacturing, processing, fabricating, job printing, refining or metallurgical
operations. The terms "manufacturing", "processing",
"fabricating", "job printing", "refining" and
"metallurgical" as used in this paragraph refer to and include those
operations commonly understood within their ordinary meaning.
"Metallurgical operations" includes leaching, milling, precipitating,
smelting and refining.
2. Machinery, or equipment, used directly in the
process of extracting ores or minerals from the earth for commercial purposes,
including equipment required to prepare the materials for extraction and
handling, loading or transporting such extracted material to the surface.�
"Mining" includes underground, surface and open pit operations for
extracting ores and minerals.
3. Tangible personal property sold to persons
engaged in business classified under the telecommunications classification
under section 42-5064, including a person representing or working on
behalf of such a person in a manner described in section 42-5075,
subsection
O
P
, and consisting
of central office switching equipment, switchboards, private branch exchange
equipment, microwave radio equipment and carrier equipment including optical
fiber, coaxial cable and other transmission media that are components of
carrier systems.
4. Machinery, equipment or transmission lines used
directly in producing or transmitting electrical power, but not including
distribution.� Transformers and control equipment used at transmission
substation sites constitute equipment used in producing or transmitting
electrical power.
5. Machinery and equipment used directly for energy
storage for later electrical use. For the purposes of this paragraph:
(a) "Electric utility scale" means a
person that is engaged in a business activity described in section 42-5063,
subsection A or such person's equipment or wholesale electricity suppliers.
(b) "Energy storage" means commercially
available technology for electric utility scale that is capable of absorbing
energy, storing energy for a period of time and thereafter dispatching the
energy and that uses mechanical, chemical or thermal processes to store energy.
(c) "Machinery and equipment used
directly" means all machinery and equipment that are used for electric
energy storage from the point of receipt of such energy in order to facilitate
storage of the electric energy to the point where the electric energy is
released.
6.
Neat
animals, horses, asses, sheep, ratites, swine or goats used or to be used as
breeding or production stock, including sales of breedings or ownership shares
in such animals used for breeding or production.
7.
Pipes or valves
four inches in diameter or larger used to transport oil, natural gas,
artificial gas, water
,
wastewater
or coal slurry, including compressor units, regulators, machinery and
equipment, fittings, seals and any other part that is used in operating the
pipes or valves.
8.
Aircraft,
navigational and communication instruments and other accessories and related
equipment sold to:
(a) A person:
(i) Holding, or exempted by federal law from obtaining,
a federal certificate of public convenience and necessity for use as, in
conjunction with or becoming part of an aircraft to be used to transport
persons for hire in intrastate, interstate or foreign commerce.
(ii) That is certificated or licensed under federal
aviation administration regulations (14 Code of Federal Regulations part 121 or
135) as a scheduled or unscheduled carrier of persons for hire for use as or in
conjunction with or becoming part of an aircraft to be used to transport
persons for hire in intrastate, interstate or foreign commerce.
(iii) Holding a foreign air carrier permit for air
transportation for use as or in conjunction with or becoming a part of aircraft
to be used to transport persons, property or United States mail in intrastate,
interstate or foreign commerce.
(iv) Operating an aircraft to transport persons in any
manner for compensation or hire, or for use in a fractional ownership program
that meets the requirements of federal aviation administration regulations (14
Code of Federal Regulations part 91, subpart K), including as an air carrier, a
foreign air carrier or a commercial operator or under a restricted category,
within the meaning of 14 Code of Federal Regulations, regardless of whether the
operation or aircraft is regulated or certified under part 91, 119, 121, 133,
135, 136 or 137, or another part of 14 Code of Federal Regulations.
(v) That will lease or otherwise transfer operational
control, within the meaning of federal aviation administration operations
specification A008, or its successor, of the aircraft, instruments or
accessories to one or more persons described in item (i), (ii), (iii) or (iv)
of this subdivision, subject to section 42-5009, subsection Q.
(b) Any foreign government.
(c) Persons
who are not residents of this state and who will not use such property in this
state other than in removing such property from this state. This
subdivision also applies to corporations that are not incorporated in this state,
regardless of maintaining a place of business in this state, if the principal
corporate office is located outside this state and the property will not be
used in this state other than in removing the property from this state.
9.
Machinery,
tools, equipment and related supplies used or consumed directly in repairing,
remodeling or maintaining aircraft, aircraft engines or aircraft component
parts by or on behalf of a certificated or licensed carrier of persons or property.
10.
Rolling
stock, rails, ties and signal control equipment used directly to transport
persons or property.
11.
Machinery
or equipment used directly to drill for oil or gas or used directly in the
process of extracting oil or gas from the earth for commercial purposes.
12.
Buses or
other urban mass transit vehicles that are used directly to transport persons
or property for hire or pursuant to a governmentally adopted and controlled
urban mass transportation program and that are sold to bus companies holding a federal
certificate of convenience and necessity or operated by any city, town or other
governmental entity or by any person contracting with such governmental entity
as part of a governmentally adopted and controlled program to provide urban
mass transportation.
13.
Groundwater
measuring devices required under section 45-604.
14.
Machinery
and equipment consisting of agricultural aircraft, tractors,
off-highway vehicles,
tractor-drawn
implements, self-powered implements, machinery and equipment necessary
for extracting milk, and machinery and equipment necessary for cooling milk and
livestock, and drip irrigation lines not already exempt under paragraph
7
of this subsection and that are used for
commercially
producing
agricultural,
horticultural, viticultural and floricultural crops and products in this
state. For the purposes of this paragraph:
(a) "Off-highway vehicles" means off-highway
vehicles as defined in section 28-1171 that are modified at the time of
sale to function as a tractor or to tow tractor-drawn implements and that
are not equipped with a modified exhaust system to increase horsepower or speed
or an engine that is more than one thousand cubic centimeters or that have a
maximum speed of fifty miles per hour or less.
(b) "Self-powered implements" includes
machinery and equipment that are electric-powered.
15.
Machinery
or equipment used in research and development. For the purposes of
this paragraph, "research and development" means basic and applied
research in the sciences and engineering, and designing, developing or testing
prototypes, processes or new products, including research and development of
computer software that is embedded in or an integral part of the prototype or
new product or that is required for machinery or equipment otherwise exempt
under this section to function effectively. Research and development
do not include manufacturing quality control, routine consumer product testing,
market research, sales promotion, sales service, research in social sciences or
psychology, computer software research that is not included in the definition
of research and development, or other nontechnological activities or technical
services.
16.
Tangible
personal property that is used by either of the following to receive, store,
convert, produce, generate, decode, encode, control or transmit
telecommunications information:
(a) Any direct broadcast satellite television or data
transmission service that operates pursuant to 47 Code of Federal Regulations
part 25.
(b) Any satellite television or data transmission
facility, if both of the following conditions are met:
(i) Over two-thirds of the transmissions,
measured in megabytes, transmitted by the facility during the test period were
transmitted to or on behalf of one or more direct broadcast satellite
television or data transmission services that operate pursuant to 47 Code of
Federal Regulations part 25.
(ii) Over two-thirds of the transmissions,
measured in megabytes, transmitted by or on behalf of those direct broadcast
television or data transmission services during the test period were
transmitted by the facility to or on behalf of those services.
For the purposes of subdivision (b) of this paragraph, "test
period" means the three hundred sixty-five day period beginning on
the later of the date on which the tangible personal property is purchased or
the date on which the direct broadcast satellite television or data
transmission service first transmits information to its customers.
17.
Clean
rooms that are used for manufacturing, processing, fabrication or research and
development, as defined in paragraph
15
of this subsection,
of semiconductor products. For the purposes of this paragraph,
"clean room" means all property that comprises or creates an
environment where humidity, temperature, particulate matter and contamination
are precisely controlled within specified parameters, without regard to whether
the property is actually contained within that environment or whether any of
the property is affixed to or incorporated into real property. Clean
room:
(a) Includes the integrated systems, fixtures, piping,
movable partitions, lighting and all property that is necessary or adapted to
reduce contamination or to control airflow, temperature, humidity, chemical
purity or other environmental conditions or manufacturing tolerances, as well
as the production machinery and equipment operating in conjunction with the
clean room environment.
(b) Does not include the building or other permanent,
nonremovable component of the building that houses the clean room environment.
18.
Machinery
and equipment that are used directly in feeding poultry,
environmentally controlling
housing for poultry,
moving
eggs within a
production and packaging facility or sorting or cooling eggs.� This exemption
does not apply to vehicles used for transporting eggs.
19.
Machinery
or equipment, including related structural components
and containment structures
, that is employed in
connection with manufacturing, processing, fabricating, job printing, refining,
mining, natural gas pipelines, metallurgical operations, telecommunications,
producing or transmitting electricity or research and development and that is
used directly to meet or exceed rules or regulations adopted by the federal
energy regulatory commission, the United States environmental protection
agency, the United States nuclear regulatory commission, the Arizona department
of environmental quality or a political subdivision of this state to prevent,
monitor, control or reduce land, water or air pollution.
For the purposes of this
paragraph, "containment structure" means a structure that prevents,
monitors, controls or reduces noxious or harmful discharge into the
environment.
20.
Machinery
and equipment that are used in
commercially
producing
livestock,
livestock products or agricultural, horticultural, viticultural or
floricultural crops or products in this state, including production by a person
representing or working on behalf of such a person in a manner described in
section 42-5075, subsection
O
P
, if the machinery and
equipment are used directly and primarily to prevent, monitor, control or
reduce air, water or land pollution.
21.
Machinery
or equipment that enables a television station to originate and broadcast or to
receive and broadcast digital television signals and that was purchased to
facilitate compliance with the telecommunications act of 1996 (P.L. 104-104;
110 Stat. 56; 47 United States Code section 336) and the federal communications
commission order issued April 21, 1997 (47 Code of Federal Regulations part
73). This paragraph does not exempt any of the following:
(a) Repair or replacement parts purchased for the
machinery or equipment described in this paragraph.
(b) Machinery or equipment purchased to replace
machinery or equipment for which an exemption was previously claimed and taken
under this paragraph.
(c) Any machinery or equipment purchased after the
television station has ceased analog broadcasting, or purchased after November
1, 2009, whichever occurs first.
22.
Qualifying equipment that is
purchased from and after June 30, 2004 through
December 31, 2028
by a qualified business under section 41-1516
for harvesting or processing qualifying forest products removed from qualifying
projects as defined in section 41-1516. To qualify for this
exemption, the qualified business must obtain and present its certification
from the Arizona commerce authority at the time of purchase.
23.
Machinery,
equipment, materials and other tangible personal property used directly and
predominantly to construct a qualified environmental technology manufacturing,
producing or processing facility as described in section 41-1514.02. This
paragraph applies for ten full consecutive calendar or fiscal years after the
start of initial construction.
24. Computer
data center equipment sold to the owner, operator or qualified colocation
tenant of a computer data center that is certified by the Arizona commerce
authority under section 41-1519 or an authorized agent of the owner,
operator or qualified colocation tenant during the qualification period for use
in the qualified computer data center. For the purposes of this
paragraph, "computer data center", "computer data center
equipment", "qualification period" and "qualified
colocation tenant" have the same meanings prescribed in section 41-1519.
C. The exemptions provided by subsection B of this
section do not include:
1. Expendable materials. For the purposes of
this paragraph, expendable materials do not include any of the categories of
tangible personal property specified in subsection B of this section regardless
of the cost or useful life of that property.
2. Janitorial equipment and hand tools.
3. Office equipment, furniture and supplies.
4. Tangible personal property used in selling or
distributing activities, other than the telecommunications transmissions
described in subsection B, paragraph
16
of this
section.
5. Motor vehicles required to be licensed by this
state, except buses or other urban mass transit vehicles specifically exempted
pursuant to subsection B, paragraph
12
of this
section, without regard to the use of such motor vehicles.
6. Shops, buildings, docks, depots and all other
materials of whatever kind or character not specifically included as exempt.
7. Motors and pumps used in drip irrigation systems.
8. Machinery and equipment or tangible personal
property used by a contractor in
performing
a
contract.
D. The following shall be deducted in computing the
purchase price of electricity by a retail electric customer from a utility
business:
1. Revenues received from sales of ancillary services,
electric distribution services, electric generation services, electric
transmission services and other services related to providing electricity to a
retail electric customer who is located outside this state for use outside this
state if the electricity is delivered to a point of sale outside this state.
2. Revenues received from providing electricity,
including ancillary services, electric distribution services, electric
generation services, electric transmission services and other services related
to providing electricity with respect to which the transaction privilege tax
imposed under section 42-5063 has been paid.
E. The tax levied by this article does not apply to the
purchase of solar energy devices from a retailer that is registered with the
department as a solar energy retailer or a solar energy contractor.
F. The following shall be deducted in computing the purchase
price of electricity by a retail electric customer from a utility business:
1. Fees charged by a municipally owned utility to
persons constructing residential, commercial or industrial developments or
connecting residential, commercial or industrial developments to a municipal
utility system or systems if the fees are segregated and used only for capital
expansion, system enlargement or debt service of the utility system or systems.
2. Reimbursement or contribution compensation to any
person or persons owning a utility system for property and equipment installed
to provide utility access to, on or across the land of an actual utility
consumer if the property and equipment become the property of the utility. This
deduction shall not exceed the value of such property and equipment.
G. The tax levied by this article does not apply to the
purchase price of electricity, natural gas or liquefied petroleum gas by:
1. A qualified manufacturing or smelting
business. A utility that claims this deduction shall report each
month, on a form prescribed by the department, the name and address of each
qualified manufacturing or smelting business for which this deduction is
taken. This paragraph applies to gas transportation
services. For the purposes of this paragraph:
(a) "Gas transportation services" means the
services of transporting natural gas to a natural gas customer or to a natural
gas distribution facility if the natural gas was purchased from a supplier
other than the utility.
(b) "Manufacturing" means the performance as
a business of an integrated series of operations that places tangible personal
property in a form, composition or character different from that in which it
was acquired and transforms it into a different product with a distinctive
name, character or use. Manufacturing does not include job printing,
publishing, packaging, mining, generating electricity or operating a
restaurant.
(c) "Qualified manufacturing or smelting
business" means one of the following:
(i) A business that manufactures or smelts tangible
products in this state, of which at least fifty-one percent of the manufactured
or smelted products will be exported out of state for incorporation into
another product or sold out of state for a final sale.
(ii) A business that derives at least fifty-one
percent of its gross income from the sale of manufactured or smelted products
manufactured or smelted by the business.
(iii)
A
business
that uses at least fifty-one percent of its square footage in this state
for manufacturing or smelting and business activities directly related to
manufacturing or smelting.
(iv) A business that employs at least fifty-one
percent of its workforce in this state in manufacturing or smelting and
business activities directly related to manufacturing or smelting.
(v) A business that uses at least fifty-one
percent of the value of its capitalized assets in this state, as reflected on
the business's books and records, for manufacturing or smelting and business
activities directly related to manufacturing or smelting.
(d) "Smelting" means to melt or fuse a
metalliferous mineral, often with an accompanying chemical change, usually to
separate the metal.
2. A business that operates an international operations
center in this state and that is certified by the Arizona commerce authority
pursuant to
section
41-1520.
H. A city or town may exempt proceeds from sales of
paintings, sculptures or similar works of fine art if such works of fine art
are sold by the original artist. For the purposes of this
subsection, fine art does not include an art creation such as jewelry, macrame,
glasswork, pottery, woodwork, metalwork, furniture or clothing if the art
creation has a dual purpose, both aesthetic and utilitarian, whether sold by
the artist or by another person.
I. For
the
purposes of subsection B of this section:
1. "Agricultural aircraft" means an aircraft
that is built for agricultural use for the aerial application of pesticides or
fertilizer or for aerial seeding.
2. "Aircraft" includes:
(a) An airplane flight simulator that is approved by
the federal aviation administration for use as a phase II or higher flight
simulator under appendix H, 14 Code of Federal Regulations part 121.
(b) Tangible personal property that is permanently
affixed or attached as a component part of an aircraft that is owned or
operated by a certificated or licensed carrier of persons or property.
3. "Other
accessories and related equipment" includes aircraft accessories and
equipment such as ground service equipment that physically contact aircraft at
some point during the overall carrier operation.
J. For
the purposes of
subsection D of this section, "ancillary services", "electric
distribution service", "electric generation service",
"electric transmission service" and "other services" have
the same meanings prescribed in section 42-5063.
END_STATUTE
Sec. 8.
Repeal
Section 42-5159, Arizona Revised
Statutes, as amended by Laws 2025, chapter 251, section 13, is repealed.
Sec. 9. Section 48-261, Arizona Revised
Statutes, as amended by Laws 2017, chapter 46, section 1, is amended to read:
START_STATUTE
48-261.
District creation; procedures; notice; hearing; determinations;
petitions
A. A fire district, community park maintenance
district, sanitary district or hospital district for either a hospital or an
urgent care center shall be created by the following procedures:
1. Any adult person desiring to propose creation of
a district shall provide a legal description of the area proposed for inclusion
in the district to the county assessor of the county in which the district is
to be located.� The county assessor shall provide to the person proposing
formation of the district a detailed list of all taxable
real
and personal
properties in the area proposed for inclusion in
the district. The person proposing formation of the district shall
prepare and submit a district impact statement to the board of supervisors of
the county in which the district is to be located. The county
assessor's parcel map and the assessed valuation of the properties as
prescribed by section 42-17052 and as shown in the county assessor's records at
the time the district impact statement is submitted are deemed sufficient for
any required maps and for determining the assessed valuations prescribed by
this section. Except for a proposed community park maintenance
district that is to be located in more than one county, if a proposed district
is located in more than one county, the impact statement shall be submitted to
the board of supervisors of the county in which the majority of the
total
assessed valuation of the proposed district is located.�
The boards of supervisors of any other counties in which a portion of the
district is to be located shall provide information and assistance to the
responsible board of supervisors.� For a community park maintenance district
that is to be located in more than one county, the impact statement shall be
submitted to the board of supervisors for each of the affected
counties. If the person desiring to create a district pursuant to
this section is unable to complete the district impact statement, the board of
supervisors may assist in the completion of the impact statement if requested
to do so, provided the bond required in subsection C of this section is in an
amount sufficient to cover any additional cost to the county. The
district impact statement shall contain at least the following information:
(a) A legal description of the boundaries of the
proposed district and a map and a general description of the area to be
included in the district sufficiently detailed to
permit
allow
a property owner to determine whether a particular
property is within the proposed district.
(b) The detailed list of taxable
real
and personal
properties provided by the assessor
pursuant to this paragraph.
(c) An estimate of the
total
assessed
valuation within the proposed district.
(d) An estimate of the change in the property tax
liability, as a result of the proposed district, of a typical resident of the
proposed district.
(e) A list and explanation of benefits that will
result from the proposed district.
(f) A list and explanation of the injuries that may
result from the proposed district.
(g) The names, addresses and occupations of the
proposed members of the district's organizing board of directors.
(h) A general description of the scope of services
to be provided by the district during its first five years of
operation. At a minimum this description shall include an estimate
of anticipated capital expenditures, personnel growth and enhancements to
service.
2. On receipt of the district impact statement, the
board of supervisors shall set a day, at least thirty but not more than sixty
days after that date, for a hearing on the impact statement. The
board of supervisors, at any time before making a determination pursuant to
paragraph 4 of this subsection, may require that the impact statement be
amended to include any information that the board of supervisors deems to be
relevant and necessary.
3. On receipt of the district impact statement, the
clerk of the board of supervisors shall mail, by first class mail, notice of
the day, hour and place of the hearing on the proposed district to each owner
of taxable
real
or personal
property
within the boundaries of the proposed district. The written notice
shall state the purpose of the hearing and shall state where a copy of the
impact statement may be viewed or requested.� The clerk of the board of
supervisors shall post the notice in at least three conspicuous public places
in the area of the proposed district and shall publish twice in a daily
newspaper of general circulation in the area of the proposed district, at least
ten days before the hearing, or, if no daily newspaper of general circulation
exists in the area of the proposed district, at least twice at any time before
the date of the hearing, a notice setting forth the purpose of the impact
statement, the description of the area of the proposed district and the day,
hour and place of the hearing.
4. At the hearing called pursuant to paragraph 2 of
this subsection, the board of supervisors shall hear those who appear for and
against the proposed district and shall determine whether the creation of the
district will promote public health, comfort, convenience, necessity or
welfare. If the board of supervisors determines that the public
health, comfort, convenience, necessity or welfare will be promoted, it shall
approve the district impact statement and authorize the circulation of
petitions as provided in this subsection.� For a community park maintenance
district that is required to obtain the approval of more than one county's
board of supervisors, the petitions may only be circulated after approval of
the board of supervisors from each affected county.� The order of the board of
supervisors shall be final, but if the request to circulate petitions is
denied, a subsequent request for a similar district may be refiled with the
board of supervisors after six months from the date of the denial.� The county
board of supervisors shall authorize the circulation of petitions of only one
proposed new district of the same type in which any property owner's land is
proposed for inclusion. A new petition circulation shall not be
authorized until the one-year period to submit signatures prescribed by
paragraph 6 of this subsection of the original petition circulation has expired
or has otherwise been extinguished.
5. Within fifteen days after receiving the approval
of the board of supervisors as prescribed by paragraph 4 of this subsection,
the clerk of the board shall determine the minimum number of signatures and
total
assessed valuation required for compliance with paragraph
7 of this subsection. After making that determination, the number of signatures
shall remain fixed and the assessed valuation of the taxable
real
or personal
properties within the boundaries of
the proposed district shall remain fixed as prescribed in this subsection for
the purposes of determining compliance with the property valuation requirement
prescribed in paragraph 7 of this subsection.
6. After receiving the approval of the board of
supervisors as provided in paragraph 4 of this subsection, any adult person may
circulate and present petitions to the board of supervisors of the county in
which the district is located.� All petitions circulated shall be returned to
the board of supervisors within one year from the date of the approval of the
board of supervisors pursuant to paragraph 4 of this subsection.� Any petition
that is returned more than one year from that date is void.
7. The petitions presented pursuant to paragraph 6
of this subsection shall comply with the provisions regarding verification in
section 48-266 and shall:
(a) At all times, contain a map and general
description of the boundaries of the proposed district sufficiently detailed to
permit
allow
a
real
or personal
property owner to determine whether a particular
property is within the proposed district and the names, addresses and
occupations of the proposed members of the district's organizing board of
directors. An alteration of the proposed district shall not be made
after receiving the approval of the board of supervisors as provided in
paragraph 4 of this subsection. The items required to be contained with the
petition under this subdivision shall be printed on the back of the petition
form required pursuant to section 48-266 unless the size of the items
precludes compliance with this requirement.� An error in the legal description
of the proposed district shall not invalidate the petitions if considered as a
whole the information provided is sufficient to identify the property as
illustrated in the map required pursuant to this subdivision.
(b) Be signed by owners of more than one-half
of the taxable property units in the area of the proposed district and be
signed by persons owning collectively more than one-half of the assessed
valuation of the property in the area of the proposed district.� Property
exempt pursuant to title 42, chapter 11, article 3 shall not be considered in
determining the total assessed valuation of the proposed district nor shall
owners of property not subject to taxation be eligible to sign petitions.
8. On receipt of the petitions, including any
supplemental signatures, and the report of the county assessor, the board of
supervisors shall set a day for a hearing on the petition.�
9. Before the hearing called pursuant to paragraph 8
of this subsection, the board of supervisors shall determine the validity of
the petitions presented.
10. At the hearing called pursuant to paragraph 8 of
this subsection, the board of supervisors, if the petitions are valid, shall
order the creation of the district. The board of supervisors shall
enter its order setting forth its determination in the minutes of the meeting,
not later than ten days after the day of the hearing, and a copy of the order
shall be filed in the county recorder's office. The order of the
board of supervisors shall be final, and the proposed district shall be created
thirty days after the board of supervisors votes to create the district, except
that for a community park maintenance district that is proposed for more than
one county, the proposed district is created thirty days after the approval of
the board of supervisors of the final county of the counties in which the
district is to be located.� A decision of the board of supervisors under this
subsection is subject to judicial review under title 12, chapter 7,
article 6.
B. For the purpose of
determining the validity of the petitions presented pursuant to subsection A,
paragraph 6 of this section:
1.
Real
or personal
property held in multiple ownership
shall be treated as if it had only one property owner, and the signature of
only one of the owners of property held in multiple ownership is required on
the formation petition.� The number of persons owning property inside the
boundaries of the proposed district shall be determined as follows:
(a) In the case of property assessed by the county
assessor, the number of persons owning property shall be as shown on the most
recent assessment of property.
(b) In the case of property valued by the department
of revenue, the number of persons owning property shall be as shown on the most
recent valuation of property.
(c) If an undivided parcel of property is owned by
multiple owners, those owners are deemed to be one owner for the purposes of
this section.
(d) If a person owns multiple parcels of property,
that owner is deemed to be a single owner for the purposes of this section.
2. The value of
real
or personal
property shall be determined as follows:
(a) In the case of property assessed by the county
assessor, values shall be the same as those shown on the day the district
impact statement is submitted.
(b) In the case of property valued by the department
of revenue, the values shall be those determined by the department in the
manner provided by law, for municipal assessment purposes. The
county assessor and the department of revenue, respectively, shall furnish to
the board of supervisors, within twenty days after a request, a statement in
writing showing the owner, the address of each owner and the appraisal or
assessment value of properties contained within the boundaries of the proposed
district as described in subsection A of this section.
3. Petition signatures representing real property on
which taxes and assessments are not current at the time of petition review are
invalid.
C. The board of supervisors may require of the
person desiring to propose creation of a district pursuant to subsection A,
paragraph 1 of this section a reasonable bond to be filed with the board at the
start of proceedings under this section.� The bond shall be in an amount
sufficient to cover costs incurred by the county if the district is not finally
organized. County costs covered by the bond include any expense incurred from
completion of the district impact statement, mailing of the notice of hearing
to district property owners, publication of the notice of hearing and other
expenses reasonably incurred as a result of any requirements of this section.
D. If a district is created pursuant to this
section, the cost of publication of the notice of hearing, the cost of the
mailing of notices to property owners, the cost of the bond and all other costs
incurred by the county as a result of this section shall be a charge against
the district.
E. If a proposed district would include property
located within an incorporated city or town, in addition to the other
requirements of subsection A of this section, the board shall approve the
creation and authorize the circulation of petitions only if the governing body
of the city or town has by ordinance or resolution endorsed the creation.
F. Except as provided in section 48-851 and
section 48-2001, subsection A, the area of a district created pursuant to
this section shall be contiguous.
G. A district organized pursuant to this section
shall have an organizing board of directors to administer the affairs of the
district until a duly constituted board of directors is elected as provided in
this title. The organizing board shall have all the powers, duties
and responsibilities of an elected board. The organizing board shall
consist of the three or five individuals named in the district impact statement
and the petitions presented pursuant to subsection A of this
section. If a vacancy occurs on the organizing board, the remaining
board members shall fill the vacancy by appointing an interim
member. Members of the organizing board shall serve without
compensation but may be reimbursed for actual expenses incurred in performing their
duties. The organizing board shall elect from its members a chairman
and a clerk.
H. For the purposes of this section
,
assessed valuation does not include property exempt pursuant to title 42,
chapter 11, article 3
and is determined as prescribed by
section 48-261.01
.
END_STATUTE
Sec. 10.
Repeal
Section 48-261, Arizona Revised
Statutes, as amended by Laws 2025, chapter 61, section 1, is repealed.
Sec. 11.
Retroactivity
A. Sections 2, 3, 4, 7, 8,
9 and 10 of this act apply retroactively to from and after September 25, 2025.
B. Sections 5 and 6 of this
act apply retroactively to from and after December 31, 2025.