AZ HB4007

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, roads, water and sewer systems, and affordable housing improvements.

Requires approval from multiple entities before a TIF district can be created: the county, affected school districts, community college districts, a joint review board, and municipal voters at a regular election.

Mandates that at least 25% of tax increment revenues be deposited into a municipal housing trust fund dedicated to developing and preserving affordable housing within the municipality.

Prohibits using diverted tax increment monies for bond debt service, requires annual independent audits, and limits TIF areas to 30 years with all construction and improvements completed within 5 years of board approval.

Protects state education funding by excluding state property tax levies for education from TIF diversion and requiring the state to use the original tax increment base valuation when computing state aid to school districts in TIF areas.