AZ HB2988

Authorizes Arizona municipalities to establish Tax Increment Financing (TIF) improvement areas within their boundaries for up to 30 years to fund public infrastructure projects including transit systems, water/sewer systems, streets, flood control, and public recreation areas.

Requires municipal improvement areas to meet specific qualifying conditions: a minimum percentage of acreage must be suitable for residential use, designated as blighted/slum areas, or in need of rehabilitation, with total TIF acreage capped at specified percentages of municipal land based on population size.

Mandates approval from multiple entities before establishment: the county, community college district, and school district governing bodies must each pass resolutions; a joint review board must certify compliance; and qualified municipal voters must approve at a regular election.

Diverts primary property tax revenues from increased assessed values in the TIF area away from the county, municipality, community college district, and school districts to fund approved project costs, though tax increment monies cannot be diverted from state education levies or used for bond debt service.

Requires annual reporting to the joint review board, independent annual audits of TIF financial transactions, and establishes a separate municipal tax increment fund that cannot be commingled with other municipal monies.