SB 1613

Senate Engrossed
reviser's technical
  corrections; 2026
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 184
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Arizona Revised Statutes, was repealed by Laws 2025, chapter 36, section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_STATUTE13-2910.11. 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_STATUTE36-2212. 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_STATUTE42-5159. 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_STATUTE48-261. 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.
APPROVED BY THE GOVERNOR JUNE 19, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 22, 2026.