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ArizonaHB 2999Fifty-seventh Legislature - Second Regular SessionHouseWALLET

municipal improvement districts; technical correction

Sponsored By: Jeff Weninger (Republican)

Signed by Governor

applicability (s)authority (s)board of directors (s)bonds (s)cities and towns - title 9community facilities district (s)contents of petition (s)counties - title 11definitions (s)district finances (s)district formation period (s)district governance (s)district powers (s)district websiteelections (s)fees (s)filings (s)formation order (s)hearing (s)infrastructure finance districtslegislative findings (s)limitation of liability (s)limitations on rejection (s)municipal improvement districtsnotice (s)open meetings (s)perpetual successionpetition to form district (s)powers and duties (s)project review by authority (s)purpose (s)records (s)revenue (s)short titlespecial taxing districts (s)special taxing districts - title 48state affordability infrastructure district act (s)state housing affordability district actstrike everything amendmenttaxpayers' information fund (s)technical correctiontermination (s)

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Bill Overview

Analyzed Economic Effects

15 provisions identified: 3 benefits, 1 costs, 11 mixed.

District assessments create property liens

After voter approval, a district can assess land for infrastructure and its operation and maintenance, based on the benefit the board finds the land will receive. The assessment becomes a lien on the property, subject to general property taxes and prior assessments. An owner has 30 days after the assessment resolution takes effect to ask a court to review whether the land benefits. A district can skip specified notices, hearings, and landowner-election steps only when owners of all land in the district sign a written consent.

Limits on district taxes and debt

The regular tax for district general obligation bond payments is capped at $5 per $100 of assessed value. A district can levy up to $7.50 per $100 when the regular rate and other money are not enough to pay debt service. Districts cannot assume property values will grow more than 5% a year when sizing bonds, and tax-backed debt cannot exceed 60% of specified property and infrastructure values. Operation and maintenance taxes are capped at $0.30 per $100 of assessed value. Voters must approve the maximum rate at least every seven years, with an exception for rates the board finds necessary for maintenance and debt payments; the tax ends when planned work is done and no obligations remain. Revenue bonds can last up to 30 years, and pledged fees must be enough to pay them. Districts cannot approve new non-refunding bonds after exceeding the authorized bond tax rate in the current or prior fiscal year. Bond premiums generally must go toward issuance costs or interest; other uses can reduce debt capacity by the same amount.

Buyers can see district charges upfront

A seller must give buyers a written notice before they become bound to buy qualifying homes with district charges shown separately on the tax bill. The notice explains the district, current charges, and an example calculation. Districts must post searchable information about budgets, taxes, debts, infrastructure, benefits, and risks. Property tax bills must show district taxes separately, and assessments collected by the county treasurer must show the district name and “STATE-CERTIFIED.” District records and meetings must also be open to the public.

Cities keep land-use control

Municipal improvement districts cannot use eminent domain or set zoning, building, permit, or other land-use rules. Cities and counties keep those powers, and the same generally applicable rules apply inside and outside district boundaries. A city or county does not have to provide services, pay costs, or take over district infrastructure just because a district is formed; it can agree to those duties in an authorized written document. Cities also keep oversight and security requirements for qualifying district-funded improvements. A district cannot sign a public-infrastructure construction contract, but it can acquire the infrastructure or repay its costs.

Clearer district petitions and fee caps

The authority must explain petition problems in writing, and petitioners have 60 days to fix them. It must decide on a complete petition within 60 days or explain what changes are needed. Petition review charges cannot exceed $15,000; project review charges cannot exceed $30,000. A similar petition filed within 90 days after denial has no new petition charge, and district administration charges cannot exceed specified actual expenses and unreimbursed costs.

Long-term district bonds mean property charges

District general obligation and refunding bonds can last up to 30 years. Each year, the district must collect enough taxes and other available money to make bond payments, subject to legal limits. Assessment bonds can also last up to 30 years and may be paid from assessments and other district funds. The bond amount cannot exceed the amount assessed, or the certified unpaid amount when advance payment is required.

County fees support information systems

State affordability infrastructure district assessment fees go into county taxpayers’ information funds. Counties can use those funds only for specified public information system costs. A county treasurer can also charge a fee for costs directly related to collecting those district assessments; the law does not set the fee amount.

Owners can petition to change district rules

Owners of at least 50% of a district’s land can ask the authority to change its formation order. The request must include updated financial information and meet applicable rules. Any request to raise the maximum tax rate or total assessment limit requires signatures from every real-property owner in the district.

Payment protections for district construction work

Before added work begins, the owner must show how the full cost will be paid when approved change orders raise the total contract price by more than 10%. Proof can include a bond, letter of credit, guaranty, or proof of funds. People and businesses that provide labor, services, or materials for qualifying district infrastructure also receive lien rights available under Arizona law, subject to that law’s requirements and limits.

District boundaries and end dates

Adding land to a district requires a petition signed by every owner in the proposed area. Removing land requires notice, a hearing, board action, and landowner approval; removed land still pays levies for earlier bonds. A district cannot form over land in certain community facilities or revitalization districts while their secured debt remains unpaid. Districts with no outstanding obligations generally must dissolve 10 years after formation, unless extended for another 10 years. Dissolution is also required five years after planned work is complete if no obligations remain; outstanding bonds must be funded before dissolution. Beginning July 1, 2036, no new municipal improvement districts can form, but existing districts and their obligations can continue.

District projects face added review

Before building or acquiring public infrastructure, a district must study the project, hold a public hearing, and send required information to the Arizona authority. If the authority has not issued a deficiency notice, the hearing cannot happen until 30 days after submission. Infrastructure meant for a city or county must meet its standards for similar projects. Before transfer, a designated official must certify the work is complete and meets applicable plans and standards; the city or county can accept or reject it.

Property owners shape district elections

Property owners and their chosen representatives can vote on district taxes, assessments, board seats, and dissolution. Votes generally depend on land owned: one vote per one-seventh acre, with one vote for a smaller share. If no one registers to vote during the 50 days before an election, landowners vote based on acres owned, rounded up to the nearest one-fifth acre. Qualified voters can still vote in general obligation bond elections. Board vacancies have set deadlines, and election challenges must be filed within 30 days after the canvass and concern only required procedures.

County development fee credits and reporting

Counties must credit qualifying infrastructure provided by developers or districts against development fees. At a developer’s request, a county must instead reimburse actual qualifying costs from fees paid by developments that use the infrastructure. Counties that charge development fees must file and post annual reports within 90 days after the fiscal year ends; they cannot collect fees until they do. Legal actions to collect fees must start within two years after payment becomes due. Some older county fees remain allowed for facilities financed before June 1, 2016, under limits on how the money can be used. A temporary rule allowed certain fees to fund listed facilities and related debt through January 1, 2018.

More ways to finance district projects

District projects in the general plan can use bond money, city or tribal contributions, assessments, property taxes, private contributions, fees, loans, or other money allowed by law. Districts can borrow for public infrastructure and repay the debt from future district revenue or related reimbursements. They can also confirm or assign payment rights, including with a landowner’s consent. The law does not set a borrowing amount or require a district to use a particular funding source.

New districts can fund infrastructure

The law allows new state affordability infrastructure districts to fund public projects that mainly benefit land inside the district. All property owners must petition, and estimated infrastructure costs must exceed $5 million. The regular bond tax rate is capped at $5 per $100 of assessed value, subject to a statutory exception. A district needs a utility’s written approval to build specified water or sewer facilities in its service area; approved facilities must meet the utility’s standards and transfer to it. Districts also cannot build or maintain water parks or decorative water features, except for a stated legal exception.

Sponsors & Cosponsors

Sponsor

  • Jeff Weninger

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 118 • No: 38

House vote • 6/1/2026

Concurrence: Passed

Yes: 0 • No: 0

House vote • 6/1/2026

Final Reading: Passed

Yes: 45 • No: 9

Senate vote • 4/14/2026

Third Reading: Passed

Yes: 21 • No: 6

Senate vote • 3/23/2026

Finance: DPA

Yes: 6 • No: 1

House vote • 3/17/2026

Third Reading: Passed

Yes: 32 • No: 21

House vote • 2/23/2026

Rules: C&P

Yes: 6 • No: 0

House vote • 2/17/2026

Commerce: DPA/SE

Yes: 8 • No: 1 • Other: 1

Actions Timeline

  1. Signed by Governor

    6/4/2026Governor

  2. Final Reading: Passed

    6/1/2026House

  3. Concurrence: Passed

    6/1/2026House

  4. Third Reading: Passed

    4/14/2026Senate

  5. Committee of the Whole: do pass amended

    4/14/2026Senate

  6. Rules: PFC

    3/30/2026Senate

  7. Finance: DPA

    3/23/2026Senate

  8. Senate Second Reading

    3/19/2026Senate

  9. Senate First Reading

    3/18/2026Senate

  10. Third Reading: Passed

    3/17/2026House

  11. Additional Committee of the Whole: do pass amended

    3/16/2026House

  12. Miscellaneous Motion: Passed

    3/16/2026House

  13. Committee of the Whole: do pass amended

    3/5/2026House

  14. Committee of the Whole: Retained on the Calendar

    2/25/2026House

  15. Rules: C&P

    2/23/2026House

  16. House Second Reading

    2/17/2026House

  17. Commerce: DPA/SE

    2/17/2026House

  18. House First Reading

    2/16/2026House

Bill Text

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