AZ Rev Stat § 48-708 (2021)
2021 Arizona Revised Statutes|Title 48 - Special Taxing Districts|§ 48-708 - Formation; debt limitation; disclosure

48-708.  Formation;  debt limitation;  disclosure A. If the formation of the district is approved by a majority of the votes cast at the election,  the governing body shall order the formation and if applicable,  appoint the initial directors of the district board who are not members of the governing body,  ex officio,  set the district boundaries and order that a map showing the district boundaries be drawn and a copy of the order forming the district be delivered to the county assessor and the board of supervisors of the county in which the district is located and to the department of revenue. A notice of the formation showing the number and date of the order and giving a description of the land included in the district shall be recorded with the county recorder. B. On its formation,  the district is a special purpose district for purposes of article IX,  section 19,  Constitution of Arizona,  a tax levying public improvement district for the purposes of article XIII,  section 7,  Constitution of Arizona,  and a municipal corporation for all purposes of title 35,  chapter 3,  articles 3,  3.1,  3.2,  4 and 5. A district that distributes or sells groundwater is a private water company only for purposes of title 45,  chapters 2 and 3.1. Except as otherwise provided in this section,  a district is considered to be a municipal corporation and political subdivision of this state,  separate and apart from the municipality or county. Under no circumstances may the amount of indebtedness evidenced by general obligation bonds issued pursuant to section 48-719 and revenue bonds issued pursuant to section 48-720 exceed the estimated cost of the public infrastructure improvements plus all costs connected with the public infrastructure purposes and issuance and sale of bonds,  including,  without limitation,  credit enhancement and liquidity support fees and costs. The total aggregate outstanding amount of bonds and any other indebtedness for which the full faith and credit of the district are pledged shall not exceed sixty percent of the aggregate of the estimated market value of the real property and improvements in the district after the public infrastructure of the district is completed plus the value of the public infrastructure owned or to be acquired by the district with the proceeds of the bonds. C. On formation of the district,  the district board shall make a good faith effort to implement the general plan for the public infrastructure of the district and any development agreement entered into pursuant to section 9-500.05 or 11-1101,  as applicable,  between the governing body and owners of land in the district. The district board shall be considered a party to that agreement. D. For districts approved after August 9,  2017,  the district board shall require that a seller of a property in the district who is otherwise required to obtain a subdivision public report as prescribed by section 32-2183 disclose to a prospective purchaser the existence of the district,  the purpose for which the district was formed as set forth in the resolution adopted by the governing body,  the estimated tax rate and the estimated annual tax amount that is based on applying that tax rate to a hypothetical residential property value. E. Fees and other charges assessed by a municipality or county in connection with the submission and consideration of an application to form a district shall not exceed $15, 000. If an application is denied by the governing body,  the municipality or county may not assess a fee or other charge in connection with the submission and consideration of a substantially similar application that is submitted within one year following the denial. Fees and other charges assessed by a municipality,  county or district in connection with the administration of a district,  including the issuance and sale of bonds,  shall not exceed the actual expense incurred by the municipality,  county or district for staff and consultant services and support facilities supplied by the municipality,  county or district or the financial,  legal and administrative costs of the district that are not reimbursed from proceeds of the bonds or other district revenue. Any fees or other charges paid by the applicant before formation of the district that exceed the actual costs of forming the district shall be transferred by the municipality or county to the district and the district shall use the transferred monies solely to support the formation or administration of the district,  including the issuance and sale of bonds.