ARIZONA STATE SENATE
water
infrastructure finance authority
(NOW: H20
infrastructure finance authority)
Makes a number of changes to the state financial assistance program for wastewater and drinking water systems, which is administered by the Water Infrastructure Finance Authority (WIFA). Authorizes WIFA to enter into technical assistance loan agreements with cities, towns, counties and eligible special districts for the planning and design of wastewater and drinking water systems.
The Wastewater Management Authority of Arizona (WMA) was established by the Arizona Legislature in 1989 to administer the State Revolving Fund (SRF), as required by amendments to the federal Clean Water Act (CWA) of 1987. In 1997, the Legislature established the Drinking Water Revolving Fund (DWRF) in response to the congressional reauthorization of the federal Safe Drinking Water Act in the fall of 1996. The state legislation in 1997, (Laws 1997, Chapter 130) also reorganized WMA into the Water Infrastructure Finance Authority of Arizona (WIFA) to administer both the DWRF and the Clean Water Revolving Fund (CWRF), formerly the SRF. WIFA also administers the Technical Assistance Program (TAP), which is a program that provides grants and loans for technical assistance to eligible wastewater and drinking water systems serving populations of 10,000 or less. To be considered for WIFA financial assistance, a project must be on either the CWRF or DWRF Project Priority List (PPL) of the respective Intended Use Plan (IUP).
WIFA is seeking several modifications and clarifications of the statutes governing the administration of the CWRF and DWRF to be consistent with the reorganization of WIFA and the establishment of the DWRF in 1997. Additionally WIFA is seeking the authority to provide technical and financial assistance to communities for the planning and designing of water or wastewater systems.
H.B. 2408 has no anticipated fiscal impact to the general fund.
1. Specifies that Financial Assistance Loan Repayment Agreements (FALRAs) entered into by WIFA are for construction of water and wastewater infrastructure and nonpoint source projects. (Sections 9-571, 11-671, 48-909.01, 48-1019, 48-2011.01 and 49-1201)
2. Allows cities, towns, counties and authorized special districts to borrow additional financial assistance in the amount approved by the voters less the amount they are already obligated to repay through an established FALRA. (Sections 9-571, 11-671,48-909.01, 48-1019 and 48-2011.01)
3. Eliminates the prohibition against resubmitting approval of a FALRA to the voters for two years for loan agreements that are disapproved on the ballot. (Sections 9-571, 11-671 and 48-2011.01)
4. Authorizes WIFA to provide assistance, including technical assistance in the form of loan repayment agreements, to political subdivisions, Indian tribes and community water systems for the development or financing of wastewater, drinking water, water reclamation or related water infrastructure. (Section 49-1203)
5. Allows WIFA to enter into Technical Assistance Loan Repayment Agreements (TALRAs) for the development, planning and design of water and wastewater projects. These agreements may be entered into with cities, towns, counties, county improvement districts, domestic water improvement districts and sanitary districts. (Sections 9-571, 11-671, 48-909.01, 48-1019 and 48-2011.01)
6. Prohibits technical assistance loans from exceeding $500,000 and requires them to be repaid within three years. Specifies that technical assistance does not create any liability for the authority or state regarding the design, construction or operation of any infrastructure project. (Sections 49-1201 and 49-1203)
7. Authorizes WIFA to intercept a municipal borrower’s state shared revenues in order to cure loan defaults (DWRF and CWRF). (Sections 49-1225 and 49-1245)
8. Provides that if WIFA determines that a political subdivision must pledge its state shared revenues for FALRAs, the Board must enter into an intercreditor agreement with GADA to define the allocation of state shared revenues relative to the borrower. If a pledge of these revenues is made and the political subdivision fails to make a payment, WIFA is required to notify the State Treasurer and the governing body of the political subdivision, through a certificate of default, and withhold state shared revenues as necessary to cure the default. (Sections 49-1225 and 49-1245)
9. Specifies the manner in which the State Treasurer is to withhold state-shared revenues and deposit them to the DWRF or CWRF. (Sections 49-1225 and 49-1245)
10. Prohibits the Treasurer from withholding any amount of state shared revenues necessary for the payment of principal and interest on a political subdivision’s bonds and prohibits a political subdivision from certifying deposits as necessary for payment of bonds unless the bonds were issued before the date of the loan repayment agreement and the bonds were secured by a pledge of distribution of TPT and monies received under urban revenue sharing. (Sections 49-1225 and 49-1245)
11. Increases the loan repayment term from twenty to thirty years for CWRF loans, to be consistent with DWRF loans. (Section 49-1225)
12. Extends WIFA's deadline to process an application for a loan or other financial assistance from sixty to ninety days. (Sections 49-1224 and 49-1244)
13. Eliminates technically obsolete provisions relating to bond reorganization by WIFA. (Section 49-1262)
14. Makes technical corrections and conforming changes.
15. Provides for a general effective date.
House Action Senate
Action
NRA 3/7/01 DPA/SE 9-0-0-1 NRAE 4/5/01 DPA 8-0-0
ENV 3/6/01 DPA/SE 10-0-0-0
Third Read 3/19/01 56-0-4-0
Amendment Adopted by Committee
1. Authorizes WIFA to intercept a municipal borrower's state shared revenue to cure loan defaults. Specifies the procedures and requirements to be followed for effectuating an intercept provision.
2. Makes technical corrections
Prepared by Senate Staff
April 9, 2001