HB2408 - 451R

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  Senate Engrossed House Bill
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  State of Arizona
  House of Representatives
  Forty-fifth Legislature
  First Regular Session
  2001
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      HOUSE BILL 2408
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AN ACT

CHANGING THE DESIGNATION OF TITLE 9, CHAPTER 5, ARTICLE 6, ARIZONA REVISED STATUTES, TO "FINANCIAL ASSISTANCE FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA"; AMENDING SECTION 9-571, ARIZONA REVISED STATUTES; CHANGING THE DESIGNATION OF TITLE 11, CHAPTER 4, ARTICLE 4, ARIZONA REVISED STATUTES, TO "FINANCIAL ASSISTANCE FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA"; AMENDING SECTIONS 11-671, 48-909.01, 48-1019, 48-2011.01, 49-1201, 49-1203, 49-1224, 49-1225, 49-1244, 49-1245 AND 49-1262, ARIZONA REVISED STATUTES; RELATING TO WATER INFRASTRUCTURE.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Heading change

The article heading of title 9, chapter 5, article 6, Arizona Revised Statutes is changed from "WASTEWATER TREATMENT FACILITIES FINANCING" to "FINANCIAL ASSISTANCE FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA".

Sec. 2. Section 9-571, Arizona Revised Statutes, is amended to read:

9-571. Wastewater treatment and drinking water treatment facilities and nonpoint source projects; financial assistance loan repayment agreements; definitions

A. Notwithstanding any other law, a city or town may construct, acquire from a willing ~~provider~~ SELLER or improve a wastewater treatment facility, drinking water facility or nonpoint source project with monies borrowed from or financial assistance including forgivable principal provided by the water infrastructure finance authority of Arizona.

B. To repay ~~a loan~~ FINANCIAL ASSISTANCE from the water infrastructure finance authority of Arizona a city or town may enter into a FINANCIAL ASSISTANCE loan repayment agreement with the authority. A FINANCIAL ASSISTANCE loan repayment agreement is payable from any revenues otherwise authorized by law to be used to repay long-term obligations. If revenue from a property tax assessment is the designated source of repayment under the agreement, the property tax assessed and levied is a secondary property tax levy for purposes of article IX, Constitution of Arizona.

C. The governing body of a city or town shall submit the question of entering and performing a FINANCIAL ASSISTANCE loan repayment agreement to the qualified electors voting at a regular or special general election in the city or town. An election is not required if voter approval has previously been obtained for substantially the same project with another funding source or if the project is constructed with an improvement district. If a majority of the qualified electors voting on the question:

1. Approves, the governing body may execute, deliver and perform the FINANCIAL ASSISTANCE loan repayment agreement.

2. Disapproves, the governing body shall not execute a FINANCIAL ASSISTANCE loan repayment agreement ~~and shall not resubmit the issue to the voters for two years~~.

D. Payments made pursuant to a FINANCIAL ASSISTANCE loan repayment agreement are not subject to section 42-17106.

E. A FINANCIAL ASSISTANCE loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction, acquisition or improvement of a wastewater treatment or drinking water facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. FINANCIAL ASSISTANCE loan REPAYMENT agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the city's or town's proportionate share of the expenses of administering the clean water and drinking water revolving funds established by sections 49-1221 and 49-1241 and may provide that the city or town pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the ~~loan~~ FINANCIAL ASSISTANCE. Cities and towns are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The city or town shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

F. A FINANCIAL ASSISTANCE loan repayment agreement under this section does not create a debt of the city or town, and the authority shall not require that payment of a FINANCIAL ASSISTANCE loan REPAYMENT agreement be made from other than those sources permitted in subsection B of this section AND AS PRESCRIBED BY SECTIONS 49-1225 AND 49-1245.

G. A city or town may employ attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the FINANCIAL ASSISTANCE loan repayment agreement.

H. This section is supplemental and alternative to any other law under which a city or town may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

I. A CITY OR TOWN MAY BORROW ADDITIONAL MONIES OR ENTER INTO ADDITIONAL FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENTS WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY IN AN AMOUNT UP TO THE AMOUNT APPROVED BY THE VOTERS PURSUANT TO SUBSECTION C OF THIS SECTION LESS THE AMOUNT THAT THE CITY OR TOWN IS ALREADY OBLIGATED TO REPAY TO THE WATER INFRASTRUCTURE FINANCE AUTHORITY PURSUANT TO A FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENT.

I. J. For purposes of this section:

1. "City" includes both cities formed pursuant to this title and charter cities.

2. "Nonpoint source project" has the same meaning prescribed in section 49-1201.

Sec. 3. Heading change

The article heading of title 11, chapter 4, article 4, Arizona Revised Statutes, is changed from "WASTEWATER TREATMENT FACILITIES FINANCING" to "FINANCIAL ASSISTANCE FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA".

Sec. 4. Section 11-671, Arizona Revised Statutes, is amended to read:

11-671. Financing wastewater treatment facilities and nonpoint source projects; financial assistance loan repayment agreements; definition

A. Notwithstanding any other law, a county authorized to operate a sewage system pursuant to section 11-264 may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona.

B. To repay ~~a loan~~ FINANCIAL ASSISTANCE from the water infrastructure finance authority of Arizona a county may enter into a FINANCIAL ASSISTANCE loan repayment agreement with the authority. A FINANCIAL ASSISTANCE loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long-term obligations. If revenue from a property tax assessment is the designated source of repayment under the agreement, the property tax assessed and levied is a secondary property tax levy for purposes of article IX, Constitution of Arizona.

C. The county board of supervisors shall submit the question of entering and performing a FINANCIAL ASSISTANCE loan repayment agreement to the qualified electors voting at a regular or special general election in the county. An election is not required if voter approval has previously been obtained for substantially the same project with another funding source. If a majority of the qualified electors voting on the question:

1. Approves, the board of supervisors may execute, deliver and perform the FINANCIAL ASSISTANCE loan repayment agreement.

2. Disapproves, the board of supervisors shall not execute a FINANCIAL ASSISTANCE loan repayment agreement ~~and shall not resubmit the issue to the voters for two years~~.

D. Payments made pursuant to a FINANCIAL ASSISTANCE loan repayment agreement are not subject to section 42-17106.

E. A FINANCIAL ASSISTANCE loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. FINANCIAL ASSISTANCE loan REPAYMENT agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the county's proportionate share of the expenses of administering the clean water revolving fund established by section 49-1221 and may provide that the county pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the ~~loan~~ FINANCIAL ASSISTANCE. Counties are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The county shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

F. A FINANCIAL ASSISTANCE loan repayment agreement under this section does not create a debt of the county, and the authority shall not require that payment of a FINANCIAL ASSISTANCE loan agreement be made from other than those sources permitted in subsection B of this section.

G. A county may employ attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the FINANCIAL ASSISTANCE loan repayment agreement.

H. This section is supplemental and alternative to any other law under which a county may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

I. A COUNTY MAY BORROW ADDITIONAL MONIES OR ENTER INTO ADDITIONAL FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENTS WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY IN AN AMOUNT UP TO THE AMOUNT APPROVED BY THE VOTERS PURSUANT TO SUBSECTION C OF THIS SECTION LESS THE AMOUNT THAT THE COUNTY IS ALREADY OBLIGATED TO REPAY TO THE WATER INFRASTRUCTURE FINANCE AUTHORITY PURSUANT TO A FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENT.

I. J. For purposes of this section, "nonpoint source project" has the same meaning as prescribed in section 49-1201.

Sec. 5. Section 48-909.01, Arizona Revised Statutes, is amended to read:

48-909.01. Wastewater treatment facility; sewer collection system and nonpoint source projects; financial assistance loan repayment agreements; definition

A. Notwithstanding any other law, a county improvement district including a domestic wastewater improvement district may construct or improve a wastewater treatment facility, sewer collection system or nonpoint source project or any combination of those projects with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona pursuant to title 49, chapter 8.

B. To repay ~~a loan~~ FINANCIAL ASSISTANCE from the water infrastructure finance authority of Arizona, a county improvement district including a domestic wastewater improvement district may enter into a FINANCIAL ASSISTANCE loan repayment agreement with the authority. A FINANCIAL ASSISTANCE loan repayment agreement is payable from any revenues otherwise authorized by law to be pledged to repay long-term indebtedness. A FINANCIAL ASSISTANCE loan repayment agreement may be secured either by assessments or by a pledge of revenues of the district or any combination of those sources. If the FINANCIAL ASSISTANCE loan repayment agreement is secured in whole or in part by assessments levied pursuant to this article, the FINANCIAL ASSISTANCE loan repayment agreement shall be treated as a series of bonds to the extent that they are secured by those assessments and the board of directors of the district has all powers and duties to collect assessment installments and enforce delinquent assessments through sale and eventual issuance of deeds in the same manner as if the assessments were evidenced by bonds.

C. The board of directors of the district shall obtain approval for the FINANCIAL ASSISTANCE loan repayment agreement in the same manner provided by law for approving and issuing bonds or other long-term indebtedness that is secured by those assessments or revenues or a combination of assessments and revenues that are to be pledged to repay the loan.

D. A FINANCIAL ASSISTANCE loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to constructing a wastewater treatment facility, sewer collection system or nonpoint source project or any combination of those projects and repaying the loan as the water infrastructure finance authority of Arizona deems proper. FINANCIAL ASSISTANCE loan REPAYMENT agreements may provide for paying interest on the unpaid principal balance of the agreement at the rates established in the agreement. The agreement may also provide for paying the district's proportionate share of the expenses of administering the clean water revolving fund established by section 49-1221 and may provide that the district pay financing and loan administration fees approved by the water infrastructure authority of Arizona. These costs may be included in the assessment and revenue amounts pledged to repay the FINANCIAL ASSISTANCE loan REPAYMENT AGREEMENT. Districts are bound by and shall fully perform the FINANCIAL ASSISTANCE loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. The water infrastructure finance authority of Arizona shall not require that payment of a FINANCIAL ASSISTANCE loan repayment agreement be made from other than those sources permitted in subsection B of this section. The FINANCIAL ASSISTANCE loan repayment agreement may also include covenants concerning the operation of the system, the setting of rates and provisions for the appointment of a receiver to take charge of and operate a sewer collection and wastewater treatment system if the FINANCIAL ASSISTANCE loan repayment agreement is not paid in a timely manner and, in the sole discretion of the water infrastructure finance authority of Arizona, if the district will not be able to cure the default.

F. A district may employ or contract for the services of attorneys, accountants, financial consultants and other experts in their fields as deemed necessary to perform services with respect to the FINANCIAL ASSISTANCE loan repayment agreement. These costs are incidental expenses and shall be included in any assessments.

G. This section is supplemental and alternative to any other law under which a district may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the water infrastructure finance authority of Arizona.

H. A DISTRICT MAY BORROW ADDITIONAL MONIES OR ENTER INTO ADDITIONAL FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENTS WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY IN AN AMOUNT UP TO THE AMOUNT APPROVED PURSUANT TO SUBSECTION C OF THIS SECTION LESS THE AMOUNT THAT THE DISTRICT IS OBLIGATED TO REPAY TO THE WATER INFRASTRUCTURE FINANCE AUTHORITY PURSUANT TO A FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENT.

H. I. For purposes of this section, "nonpoint source project" has the same meaning prescribed in section 49-1202.

Sec. 6. Section 48-1019, Arizona Revised Statutes, is amended to read:

48-1019. Drinking water facility projects; financial assistance loan repayment agreements; definitions

A. Notwithstanding any other law, a domestic water improvement district may construct, acquire, or improve a drinking water facility with monies borrowed from or financial assistance, including forgivable principal, provided by the water infrastructure finance authority of Arizona pursuant to title 49, chapter 8.

B. To repay ~~a loan~~ FINANCIAL ASSISTANCE from the authority a district may enter into a FINANCIAL ASSISTANCE loan repayment agreement with the authority. A FINANCIAL ASSISTANCE loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long-term obligations.

C. The board shall obtain approval for the FINANCIAL ASSISTANCE loan repayment agreement in the same manner provided by law for approving and issuing other obligations payable from those revenues that are to be used to pay the loan.

D. A FINANCIAL ASSISTANCE loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction, acquisition or improvement of a drinking water facility and repayment of the loan as the authority deems proper. FINANCIAL ASSISTANCE loan REPAYMENT agreements may provide for the payment of interest on the unpaid principal balance of the agreement at the rates established in the agreement. The agreement may also provide for payment of the domestic water improvement district's proportionate share of the expenses of administering the drinking water revolving fund established by section 49-1241 and may provide that the domestic water improvement district pay financing and loan administration fees approved by the authority. These costs may be included in the assessment amounts pledged to repay the loan. Districts are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the authority. The domestic water improvement district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. A FINANCIAL ASSISTANCE loan repayment agreement under this section does not create a debt of the domestic water improvement district, and the authority shall not require that payment of a loan agreement be made from other than those sources permitted in subsection B of this section.

F. A domestic water improvement district may employ or contract for the services of attorneys, accountants, financial consultants and other experts in their field as deemed necessary to perform services with respect to the FINANCIAL ASSISTANCE loan repayment agreement.

G. This section is supplemental and alternative to any other law under which a district may borrow money or issue bonds. This section shall be construed as the exclusive authorization to enter into loan agreements with the authority.

H. I. For the purposes of this section:

1. "Authority" means the water infrastructure finance authority of Arizona.

2. "Board" means the water infrastructure finance authority of Arizona board of directors.

Sec. 7. Section 48-2011.01, Arizona Revised Statutes, is amended to read:

48-2011.01. Wastewater treatment facility and nonpoint source projects; financial assistance loan repayment agreements; definition

A. Notwithstanding any other law, a sanitary district may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona.

B. To repay ~~a loan~~ FINANCIAL ASSISTANCE from the water infrastructure finance authority of Arizona, a sanitary district may enter into a FINANCIAL ASSISTANCE loan repayment agreement with the authority. A FINANCIAL ASSISTANCE loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long-term obligations including a special assessment on a designated area that is levied and collected pursuant to article 2 of this chapter.

C. The board of directors shall submit the question of entering and performing a FINANCIAL ASSISTANCE loan repayment agreement to the qualified electors voting at a regular or special general election in the district. An election is not required if voter approval has previously been obtained for substantially the same project with another funding source or if the project is constructed with an assessment levied against a designated area pursuant to article 2 of this chapter. If a majority of the qualified electors voting on the question:

1. Approves, the board of directors may execute, deliver and perform the FINANCIAL ASSISTANCE loan repayment agreement.

2. Disapproves, the board of directors shall not execute a FINANCIAL ASSISTANCE loan repayment agreement ~~and shall not resubmit the issue to the voters for two years~~.

D. A FINANCIAL ASSISTANCE loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. FINANCIAL ASSISTANCE loan REPAYMENT agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the sanitary district's proportionate share of the expenses of administering the clean water revolving fund established by section 49-1221 and may provide that the sanitary district pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the ~~loan~~ FINANCIAL ASSISTANCE. Districts are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The sanitary district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. A FINANCIAL ASSISTANCE loan repayment agreement under this section does not create a debt of the sanitary district, and the authority shall not require that payment of a loan agreement be made from other than those sources permitted in subsection B of this section.

F. A sanitary district may employ or contract for the services of attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the FINANCIAL ASSISTANCE loan repayment agreement. Charges for these services may be included in the assessment amounts pledged to repay the loan.

G. This section is supplemental and alternative to any other law under which a sanitary district may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority.

H. Any FINANCIAL ASSISTANCE loan repayment agreement between the district and the water infrastructure finance authority of Arizona may be secured by unpaid assessments certified in the manner prescribed by section 48-2067. The FINANCIAL ASSISTANCE loan repayment agreement may provide for different due dates for annual installments of principal, different interest payment dates, different dates of delinquency and different dates for holding sales of delinquent properties than otherwise provided for in article 2 of this chapter. The FINANCIAL ASSISTANCE loan repayment agreement may also provide for mailed notice to property owners in lieu of the publication requirement prescribed by section 48-2068 and section 48-2069.

I. A DISTRICT MAY BORROW ADDITIONAL MONIES OR ENTER INTO ADDITIONAL FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENTS WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY IN AN AMOUNT UP TO THE AMOUNT APPROVED PURSUANT TO SUBSECTION C OF THIS SECTION LESS THE AMOUNT THAT THE DISTRICT IS OBLIGATED TO REPAY TO THE WATER INFRASTRUCTURE FINANCE AUTHORITY PURSUANT TO A FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENT.

I. J. For purposes of this section, "nonpoint source project" has the same meaning prescribed in section 49-1201.

Sec. 8. Section 49-1201, Arizona Revised Statutes, is amended to read:

49-1201. Definitions

In this article, unless the context otherwise requires:

1. "Authority" means the water infrastructure finance authority of Arizona.

2. "Board" means the board of directors of the authority.

3. "Bonds of a political subdivision" means bonds issued by a city or town pursuant to title 9, chapter 5, article 3, title 35, chapter 3, article 3, title 48, chapter 4, article 2 or title 48, chapter 4, article 6, by a county pursuant to sections 11-264 and 11-264.01 through 11-264.06 or by any special district if the special district's bonds are authorized by an election in the manner provided by law or are payable from special assessments levied pursuant to title 48, chapter 6, article 1, title 48, chapter 6, article 4, title 48, chapter 14, article 2 or title 48, chapter 19, article 10 POLITICAL SUBDIVISION AS AUTHORIZED BY LAW.

4. "Clean water act" means the federal water pollution control act amendments of 1972 (P.L. 92-500; 86 Stat. 816), as amended by the water quality act of 1987 (P.L. 100-4; 101 Stat. 7).

5. "Drinking water facility" means a community water system or a nonprofit noncommunity water system as defined in the safe drinking water act (P.L. 93-523; 88 Stat. 1660; P.L. 95-190; 91 Stat. 1393; P.L. 104-182; 110 Stat. 1613) that is located in this state. For purposes of this article, drinking water facility does not include water systems owned by federal agencies.

6. "FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENT" MEANS AN AGREEMENT TO REPAY A LOAN PROVIDED TO DESIGN, CONSTRUCT, ACQUIRE, REHABILITATE OR IMPROVE WATER OR WASTEWATER INFRASTRUCTURE, RELATED PROPERTY AND APPURTENANCES.

6. 7. "Indian tribe" means any Indian tribe, band, group or community that is recognized by the United States secretary of the interior and that exercises governmental authority within the limits of any Indian reservation under the jurisdiction of the United States government, notwithstanding the issuance of any patent and including rights-of-way running through the reservation.

7. "Loan repayment agreement" means an agreement to repay a loan entered into by a city, town, county, sanitary district, drinking water facility or Indian tribe pursuant to title 9, chapter 5, article 6, title 11, chapter 4, article 4 or title 48, chapter 14, article 1 or any other applicable law.

8. "Nonpoint source project" means a project designed to implement a certified water quality management plan.

9. "Political subdivision" means a county, city, town or special taxing district authorized by law to construct wastewater treatment facilities, drinking water facilities or nonpoint source projects.

10. "Safe drinking water act" means the federal safe drinking water act (P.L. 93-523; 88 Stat. 1660; P.L. 95-190; 91 Stat. 1393; P.L. 104-182; 110 Stat. 1613), as amended in 1996.

11. "TECHNICAL ASSISTANCE LOAN REPAYMENT AGREEMENT" MEANS AN AGREEMENT TO REPAY A LOAN PROVIDED TO DEVELOP, PLAN AND DESIGN WATER OR WASTEWATER INFRASTRUCTURE, RELATED PROPERTY AND APPURTENANCES. THE AGREEMENT SHALL BE FOR A TERM OF NOT MORE THAN THREE YEARS AND THE MAXIMUM AMOUNT THAT MAY BE BORROWED IS LIMITED TO NOT MORE THAN FIVE HUNDRED THOUSAND DOLLARS.

~~11.~~ 12. "Wastewater treatment facility" means a treatment works, as defined in section 212 of the clean water act, that is located in this state and that is designed to hold, cleanse or purify or to prevent the discharge of untreated or inadequately treated sewage or other polluted waters for purposes of complying with the clean water act.

Sec. 9. Section 49-1203, Arizona Revised Statutes, is amended to read:

49-1203. Powers and duties of authority; definition

A. The authority is a corporate and politic body and shall have an official seal that shall be judicially noticed. The authority may sue and be sued, contract and acquire, hold, operate and dispose of property.

B. The authority, through its board, may:

1. Issue negotiable water quality bonds pursuant to section 49-1261 for the following purposes:

(a) To generate the state match required by the clean water act for the clean water revolving fund and to generate the match required by the safe drinking water act for the drinking water revolving fund.

(b) To provide financial assistance to political subdivisions, Indian tribes and eligible drinking water facilities for constructing, acquiring or improving wastewater treatment facilities, drinking water facilities, nonpoint source projects and other related water quality facilities and projects.

2. Provide financial assistance to political subdivisions and Indian tribes from monies in the clean water revolving fund to finance wastewater treatment projects.

3. Provide financial assistance to drinking water facilities from monies in the drinking water revolving fund to finance these facilities.

4. Guarantee debt obligations of, and provide linked deposit guarantees through third party lenders to:

(a) Political subdivisions that are issued to finance wastewater treatment projects.

(b) Drinking water facilities that are issued to finance these facilities.

5. Provide linked deposit guarantees through third party lenders to political subdivisions and drinking water facilities.

6. Apply for, accept and administer grants and other financial assistance from the United States government and from other public and private sources.

7. Enter into capitalization grant agreements with the United States environmental protection agency.

8. Adopt rules pursuant to title 41, chapter 6 governing the application for and awarding of wastewater treatment facility, drinking water facility and nonpoint source project financial assistance under this article, the administration of the clean water revolving fund and the drinking water revolving fund and the issuance of water quality bonds.

9. Hire a director and staff for the authority.

10. Contract for the services of outside advisors, attorneys, consultants and aides reasonably necessary or desirable to allow the authority to adequately perform its duties.

11. Contract and incur obligations as reasonably necessary or desirable within the general scope of authority activities and operations to allow the authority to adequately perform its duties.

12. Assess financial assistance origination fees and annual fees to cover the reasonable costs of administering the authority and the monies administered by the authority. Any fees collected pursuant to this paragraph constitute governmental revenue and may be used for any purpose consistent with the mission and objectives of the authority.

13. Perform any function of a fund manager under the CERCLA Brownfields cleanup revolving loan fund program as requested by the department. The board shall perform any action authorized under this article on behalf of the Brownfields cleanup revolving loan fund program established pursuant to chapter 2, article 1.1 of this title at the request of the department. In order to perform these functions, the board shall enter into a written agreement with the department.

14. PROVIDE GRANTS, STAFF ASSISTANCE OR TECHNICAL ASSISTANCE IN THE FORM OF LOAN REPAYMENT AGREEMENTS AND OTHER PROFESSIONAL ASSISTANCE TO POLITICAL SUBDIVISIONS, INDIAN TRIBES AND COMMUNITY WATER SYSTEMS IN CONNECTION WITH THE DEVELOPMENT OR FINANCING OF WASTEWATER, DRINKING WATER, WATER RECLAMATION OR RELATED WATER INFRASTRUCTURE. ASSISTANCE PROVIDED UNDER A TECHNICAL ASSISTANCE LOAN REPAYMENT AGREEMENT SHALL BE IN A FORM AND UNDER TERMS DETERMINED BY THE AUTHORITY AND SHALL BE REPAID NOT MORE THAN THREE YEARS AFTER THE DATE THAT THE MONIES ARE ADVANCED TO THE APPLICANT. THE PROVISION OF TECHNICAL ASSISTANCE BY THE AUTHORITY DOES NOT CREATE ANY LIABILITY FOR THE AUTHORITY OR THIS STATE REGARDING THE DESIGN, CONSTRUCTION OR OPERATION OF ANY INFRASTRUCTURE PROJECT.

C. The board shall deposit, pursuant to sections 35-146 and 35-147, any monies received pursuant to subsection B, paragraph 6 of this section in the appropriate fund as prescribed by the grant or other financial assistance agreement.

D. Disbursements of monies by the water infrastructure finance authority pursuant to a financial assistance agreement are not subject to title 41, chapter 23.

E. For purposes of this section, "CERCLA" has the same meaning prescribed in section 49-201.

Sec. 10. Section 49-1224, Arizona Revised Statutes, is amended to read:

49-1224. Clean water revolving fund financial assistance; procedures; rules

A. In compliance with any applicable requirements, a political subdivision may apply to the authority for, accept and incur indebtedness as a result of a loan, or other financial assistance under section 49-1223, subsection A, paragraphs 1, 2 and 3, from the clean water revolving fund to support a wastewater treatment facility or nonpoint source project owned by the political subdivision. An Indian tribe may apply to the authority for, accept and incur indebtedness as a result of a loan or refinancing under section 49-1223, subsection A, paragraphs 1 and 2 from the clean water revolving fund to support a wastewater treatment facility or nonpoint source project owned by the Indian tribe. To qualify for financial assistance under this section the wastewater treatment facility or nonpoint source project must appear on this state's priority list pursuant to section 212 of the clean water act.

B. In compliance with any applicable requirements, the board shall:

1. Prescribe a simplified form and procedure to apply for and approve assistance.

2. Establish by rule criteria by which assistance will be awarded, including requirements for local participation in project costs, if deemed advisable. The criteria shall include a determination of the ability of the applicant to repay a loan according to the terms and conditions established by this section. At the option of the board, the existence of a current investment grade rating on existing debt of the applicant that is secured by the same revenues to be pledged to secure repayment under the loan repayment agreement constitutes evidence regarding ability to repay a loan.

3. Determine the order and priority of projects assisted under this section based on the merits of the application with respect to water quality issues.

C. The authority shall review on its merits each application received and shall inform the applicant of the board's determination within ~~sixty~~ NINETY days after receipt of a complete and correct application. If the application is not approved, the board shall notify the applicant, stating the reasons. If the application is approved, the board may condition the approval on assurances the board deems necessary to ensure that the financial assistance will be used according to law and the terms of the application.

Sec. 11. Section 49-1225, Arizona Revised Statutes, is amended to read:

49-1225. Clean water revolving fund financial assistance; terms

A. Financial assistance from the clean water revolving fund shall be evidenced by a financial assistance agreement or bonds of a political subdivision, delivered to and held by the authority.

B. A loan under this section:

1. Shall be repaid in not to exceed ~~twenty~~ THIRTY years from the date incurred for wastewater treatment facility and nonpoint source loans.

2. Shall require that interest payments begin not later than the next date that either principal or interest must be paid by the authority to the holders of any of the authority's bonds that provided funding for the loan. The authority may provide that loan interest accruing during construction and one year beyond completion of the construction be capitalized in the loan.

3. Shall be conditioned on the establishment of a dedicated revenue source for repaying the loan.

4. To an Indian tribe shall either be conditioned on the establishment of a dedicated revenue source under the control of a tribally chartered corporation, or any other tribal entity that is subject to suit by the attorney general to enforce the loan contract, or be secured by assets that, in the event of default of the loan contract, are subject to execution by the attorney general without the waiver of any claim of sovereign immunity by the tribe.

C. The authority shall prescribe the rate of interest on loans made under this section, but the rate shall not exceed the prevailing market rate for similar types of loans. The authority may also provide for flexible interest rates and interest free loans under rules adopted by the authority. All financial assistance agreements or bonds of a political subdivision shall clearly specify the amount of principal and interest and any redemption premium that is due on any payment date.

D. The approval of a loan is conditioned on a written commitment by the political subdivision or Indian tribe to complete all applicable reviews and approvals and to secure all required permits in a timely manner.

E. All monies received from political subdivisions or Indian tribes as loan repayments, interest and penalties shall be deposited in the appropriate accounts of the clean water revolving fund.

F. A LOAN MADE TO A POLITICAL SUBDIVISION UNDER THIS SECTION AFTER JUNE 30, 2001 MAY BE SECURED ADDITIONALLY BY AN IRREVOCABLE PLEDGE OF THE SHARED STATE REVENUES DUE TO THE POLITICAL SUBDIVISION FOR THE DURATION OF THE LOAN AS PRESCRIBED BY A RESOLUTION OF THE AUTHORITY'S BOARD. IF THE AUTHORITY'S BOARD REQUIRES AN IRREVOCABLE PLEDGE OF THE SHARED STATE REVENUES FOR FINANCIAL ASSISTANCE LOAN REPAYMENT AGREEMENTS AFTER JUNE 30, 2001, THE AUTHORITY'S BOARD SHALL ENTER INTO AN INTERCREDITOR AGREEMENT WITH THE GREATER ARIZONA DEVELOPMENT AUTHORITY TO DEFINE THE ALLOCATION OF SHARED STATE REVENUES IN RELATION TO INDIVIDUAL BORROWERS. IF A PLEDGE IS REQUIRED AND A POLITICAL SUBDIVISION FAILS TO MAKE ANY PAYMENT DUE TO THE AUTHORITY UNDER ITS LOAN REPAYMENT AGREEMENT OR BONDS, THE AUTHORITY SHALL CERTIFY TO THE STATE TREASURER AND NOTIFY THE GOVERNING BODY OF THE DEFAULTING POLITICAL SUBDIVISION THAT THE POLITICAL SUBDIVISION HAS FAILED TO MAKE THE REQUIRED PAYMENT AND SHALL DIRECT A WITHHOLDING OF STATE SHARED REVENUES AS PRESCRIBED IN SUBSECTION G OF THIS SECTION. THE CERTIFICATE OF DEFAULT SHALL BE IN THE FORM DETERMINED BY THE AUTHORITY, EXCEPT THAT THE CERTIFICATE SHALL SPECIFY THE AMOUNT REQUIRED TO SATISFY THE UNPAID PAYMENT OBLIGATION OF THE POLITICAL SUBDIVISION.

G. ON RECEIPT OF A CERTIFICATE OF DEFAULT FROM THE AUTHORITY, THE STATE TREASURER TO THE EXTENT NOT EXPRESSLY PROHIBITED BY LAW SHALL WITHHOLD THE MONIES DUE TO THE DEFAULTING POLITICAL SUBDIVISION FROM THE NEXT SUCCEEDING DISTRIBUTION OF MONIES PURSUANT TO SECTION 42-5029. IN THE CASE OF A CITY OR TOWN, THE STATE TREASURER SHALL ALSO WITHHOLD FROM THE MONIES DUE TO THE DEFAULTING CITY OR TOWN FROM THE NEXT SUCCEEDING DISTRIBUTION OF MONIES PURSUANT TO SECTION 43-206 THE AMOUNT SPECIFIED IN THE CERTIFICATE OF DEFAULT AND SHALL IMMEDIATELY DEPOSIT THE MONIES IN THE FUND. THE STATE TREASURER SHALL CONTINUE TO WITHHOLD AND DEPOSIT MONIES UNTIL THE AUTHORITY CERTIFIES TO THE STATE TREASURER THAT THE DEFAULT HAS BEEN CURED. THE STATE TREASURER SHALL NOT WITHHOLD ANY AMOUNT THAT IS NECESSARY TO MAKE ANY REQUIRED DEPOSITS THEN DUE FOR THE PAYMENT OF PRINCIPAL AND INTEREST ON BONDS OF THE POLITICAL SUBDIVISION IF SO CERTIFIED BY THE DEFAULTING POLITICAL SUBDIVISION TO THE STATE TREASURER AND THE AUTHORITY. THE POLITICAL SUBDIVISION SHALL NOT CERTIFY DEPOSITS AS NECESSARY FOR PAYMENT FOR BONDS UNLESS THE BONDS WERE ISSUED BEFORE THE DATE OF THE LOAN REPAYMENT AGREEMENT AND THE BONDS WERE SECURED BY A PLEDGE OF DISTRIBUTION MADE PURSUANT TO SECTIONS 42-5029 AND 43-206.

Sec. 12. Section 49-1244, Arizona Revised Statutes, is amended to read:

49-1244. Drinking water revolving fund financial assistance; procedures

A. In compliance with any applicable requirements, a drinking water facility may apply to the authority for and accept and incur indebtedness as a result of a loan or any other financial assistance pursuant to section 49-1243, subsection A, paragraphs 2, 3 and 4 from the drinking water revolving fund to construct, acquire or improve a drinking water facility. To qualify for financial assistance pursuant to this section, the drinking water facility must appear on this state's priority list pursuant to the safe drinking water act.

B. In compliance with any applicable requirements, the board shall:

1. Prescribe a simplified form and procedure to apply for and approve assistance.

3. Determine the order and priority of projects assisted under this section based on the merits of the application with respect to water quality issues.

Sec. 13. Section 49-1245, Arizona Revised Statutes, is amended to read:

49-1245. Drinking water revolving fund financial assistance; terms

A. A loan from the drinking water revolving fund shall be evidenced by a loan repayment agreement or bonds of a political subdivision, delivered to and held by the authority.

B. A loan under this section:

1. Shall be repaid in not to exceed thirty years from the date incurred for drinking water facility loans.

3. Shall be conditioned on the establishment of a dedicated revenue source for repaying the loan.

~~4. Shall not be made for the nonfederal share of any project that has received a grant under section 201 of the clean water act.~~

5. 4. To an Indian tribe shall either be conditioned on the establishment of a dedicated revenue source under the control of a tribally chartered corporation, or any other tribal entity that is subject to suit by the attorney general to enforce the loan contract, or be secured by assets that, in the event of default of the loan contract, are subject to execution by the attorney general without the waiver of any claim of sovereign immunity by the tribe.

C. The authority shall prescribe the rate of interest on loans made under this section, but the rate shall not exceed the prevailing market rate for similar types of loans. The authority may also provide for flexible interest rates, interest free loans and forgivable principal under rules adopted by the authority. All financial assistance agreements or bonds of a political subdivision shall clearly specify the amount of principal and interest and any redemption premium that is due on any payment date.

E. All monies received from political subdivisions or Indian tribes as loan repayments, interest and penalties shall be deposited in the appropriate accounts of the drinking water revolving fund.

Sec. 14. Section 49-1262, Arizona Revised Statutes, is amended to read:

49-1262. Water quality bonds; purpose

A. Bonds may be issued to provide matching state monies for the clean water revolving fund and the drinking water revolving fund. These bonds shall be designated as "revolving fund capitalization bonds". Proceeds from the sale of revolving fund capitalization bonds shall be deposited in the appropriate separate accounts of the clean water revolving fund and the drinking water revolving fund. When the initial issue of bonds has been fully paid or amounts sufficient to pay all such bonds have been set aside and are held in trust solely for the holders of the outstanding bonds, the special account or accounts of the clean water revolving fund and the drinking water revolving fund established to service revolving fund capitalization bonds shall be dissolved, and all monies and investments not needed to pay the remaining debt service on these bonds shall be transferred to the unrestricted funds account.

B. A. Water quality bonds may be issued to provide financial assistance, TO PROVIDE MATCHING STATE MONIES FOR THE CLEAN WATER REVOLVING FUND AND THE DRINKING WATER REVOLVING FUND, to increase the capitalization of the clean water revolving fund and to increase the capitalization of the drinking water revolving fund to accomplish the purposes stated in sections 49-1223 and 49-1243. These bonds may be secured by any monies received or to be received in the clean water revolving fund and the drinking water revolving fund except those receipts and anticipated receipts of interest or early redemption premiums on loan repayment agreements or bonds of a political subdivision that may be pledged to the repayment of revolving fund capitalization bonds. Amounts in the clean water revolving fund may be used to cure defaults on loans made from the drinking water revolving fund and amounts in the drinking water revolving fund may be used to cure defaults on loans made from the clean water revolving fund to the extent permitted by applicable federal law.

C. B. Any pledge made under this article is valid and binding from the time when the pledge is made. The monies pledged and received to be placed in the appropriate fund are immediately subject to the lien of the pledge without any future physical delivery or further act, and any such lien of any pledge is valid or binding against all parties having claims of any kind in tort, contract or otherwise against the board regardless of whether the parties have notice of the lien. The official resolution or trust indenture or any instrument by which this pledge is created, when placed in the board's records, is notice to all concerned of the creation of the pledge, and those instruments need not be recorded in any other place.

D. C. The bonds issued under this section, their transfer and the income they produce are exempt from taxation by this state or by any political subdivision of this state.