Arizona § 9-102 - Disincorporation

§ 9-102. Disincorporation

A. The supervisors of the county in which a city or town is situated shall, upon the petition of two-thirds of the qualified electors residing within the city or town within sixty days of when the petition is filed, do either of the following:

1. Disincorporate the city or town, and appoint a trustee with authority to wind up the affairs of the corporation, sell and convey its property, real and personal, pay the debts of the city or town and deposit the surplus of the proceeds of the property in the county treasury to be there disposed of for the benefit of the inhabitants of the disincorporated city or town.

2. Call for an election for the purpose of deciding for or against the disincorporation of the city or town. The election shall take place on a date prescribed by section 16-204 but not more than one hundred eighty days after the petition is filed, except that no such election shall be called within twelve months from the date of a previous election for disincorporation of the same city or town. Only qualified electors of the city or town shall vote on this question. If a majority of the qualified electors voting thereon votes for disincorporation, then the board of supervisors shall, by an order entered of record, declare the city or town disincorporated and shall proceed in the manner prescribed in paragraph 1 of this subsection.

B. If the incorporation of a city or town is rescinded or declared null and void by a court of competent jurisdiction for any reason, the superior court in the county in which that city or town is situated may appoint a trustee with authority to wind up the affairs of the corporation, sell and convey its property, real and personal, and pay the debts of the city or town. Any net proceeds remaining from the liquidation of such property shall be spent for the benefit of the inhabitants of the disincorporated city or town. An expenditure for the benefit of such inhabitants shall be determined in the following manner:

1. The superior court shall conduct a public hearing to receive the recommendations of the inhabitants for the disposition of such proceeds. The superior court shall determine the object or objects for which such proceeds shall be spent by determining in its discretion that such object or objects benefit and are in the best interests of the majority of all age groups of the inhabitants. The object or objects may include private, nonprofit organizations.

2. The superior court may appoint an advisory committee composed of the inhabitants to assist it in rendering its decision and to ensure that such object or objects are carried out and shall require the committee to provide a strict accounting of the expenditure of such monies.

3. After receiving and approving a final accounting of the expenditure of such monies, the superior court may discharge the advisory committee and trustee.

C. Indebtedness and obligations of or issued by or on behalf of such city or town shall not become indebtedness or obligations of the county, except that the county is responsible as a trustee to insure that all obligations and debts of the city or town are paid. The indebtedness and obligations of such city or town shall be paid pursuant to subsection D of this section. The city or town which is disincorporated shall continue as a political subdivision until all of the debts and obligations of the city or town are satisfied.

D. The appointed trustee shall annually estimate an amount to be levied as a tax on all taxable property in the disincorporated city or town to pay the indebtedness or obligations of the city or town. Subject to the limitation contained in subsection E of this section, on or before June 30 the appointed trustee shall certify to the board of supervisors the amount of taxes necessary to be levied for these purposes, and the board of supervisors shall levy and cause the amount to be collected as secondary taxes at the same time and in the same manner as levying and collecting general county taxes.

E. The taxes levied pursuant to subsection D of this section shall be levied until such time as the indebtedness or obligations of the city or town shall have been satisfied. The amount levied each year shall not exceed the amount levied for the tax year preceding the year in which the city or town is disincorporated.

F. In addition to the authority provided in subsection A of this section, the appointed trustee may operate the facilities of the city or town until such facilities are sold or otherwise disposed of as determined by the county board of supervisors.

G. Before obtaining any signatures on a petition required by subsection A of this section, a copy of the petition shall be filed with the clerk of the board of supervisors. The petition shall state its purpose clearly and concisely and shall be in the form and signed and verified as generally provided for initiative petitions. Petitioners have one hundred eighty days from the date of such filing to obtain the required number of signatures.

H. The county recorder shall verify the names on the petition within thirty days after the petition is completed and filed and, if valid, the board of supervisors shall proceed as prescribed in subsection A, paragraph 1 or 2 of this section. If the city or town is disincorporated pursuant to this section, the board of supervisors shall appoint the trustee pursuant to subsection A of this section within thirty days after disincorporation.