A.R.S. tit. 41 ch. 18 — Arizona Revised Statutes Title 41 Chapter 18 — Greater Arizona Development Authority

41-2251. Definitions In this article, unless the context otherwise requires: 1. "Authority" means the greater Arizona development authority. 2. "Board" means the board of directors of the Arizona finance authority established by chapter 53, article 2 of this title. 3. "Financial assistance" means assistance provided by the authority to eligible political subdivisions, special districts and Indian tribes pursuant to section 41-2257. 4. "Fund" means the greater Arizona development authority revolving fund established by section 41-2254. 5. "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. 6. "Infrastructure" means any land, building or other improvement and equipment or other personal property that will make up part of a facility that is located in this state for public use and that is owned by a political subdivision, special district or Indian tribe that retains ultimate responsibility for its operation and maintenance. 7. "Loan" means bonds, leases, loans or other evidences of indebtedness. 8. "Loan repayment agreement" means an agreement to repay a loan entered into by a political subdivision, special district or Indian tribe. 9. "Pledged revenues" means any monies to be received by a political subdivision, special district or Indian tribe, including property taxes, other local taxes, fees, assessments or charges pledged by a political subdivision, special district or Indian tribe as a source for repayment of a loan repayment agreement. 10. "Political subdivision" means a county, city or town. 11. "Short-term assistance" means assistance provided by the authority to political subdivisions, special districts and Indian tribes in connection with the financing of infrastructure. 12. "Special district" means any of the following entities established pursuant to title 48: (a) Municipal improvement district. (b) Fire district. (c) County improvement district. (d) Special road district. (e) Sanitary district. (f) Drainage or flood protection district. (g) County flood control district. (h) County jail district. (i) Regional public transportation authority. (j) Regional transportation authority. 13. "Technical assistance" means assistance provided pursuant to section 41-2256. 14. "Technical assistance repayment agreement" means an agreement to repay assistance provided pursuant to section 41-2256. 15. "Tribal subdivision" means any chapter, district or village that is recognized by an Indian tribe by resolution or through tribal constitution and that receives technical assistance. 41-2252. Greater Arizona development authority The greater Arizona development authority is established in the Arizona finance authority. The authority shall be governed by the board of directors of the Arizona finance authority. 41-2253. Powers and duties of authority A. The authority is a body corporate and politic and shall have an official seal that is judicially noticed. The authority may sue and be sued, contract and acquire, hold, operate and dispose of property as necessary to carry out its responsibilities under this article. B. The authority, through its board, may: 1. Issue bonds to provide financial assistance to political subdivisions, special districts and Indian tribes for acquiring, constructing, improving or equipping infrastructure or for refinancing outstanding bonds or other obligations of the political subdivisions, special districts or Indian tribes that were issued to acquire, construct, improve or equip infrastructure. The bonds shall be in the name of the authority. 2. Provide financial assistance to political subdivisions, special districts and Indian tribes to finance or refinance infrastructure projects. 3. Guarantee debt obligations of political subdivisions, special districts and Indian tribes that are issued to finance or refinance infrastructure projects. 4. Provide technical assistance or short-term assistance to political subdivisions, special districts, Indian tribes and tribal subdivisions. 5. Apply for, accept and administer grants and other monetary assistance from the United States government and from other public and private sources to carry out its responsibilities under this article. 6. Hire professional assistance as needed to carry out this article. C. The board shall: 1. Approve all policies and procedures of the authority. 2. Approve which projects receive technical and financial assistance. 3. Approve loan repayment agreements entered into with political subdivisions, special districts and Indian tribes. D. The authority may impose administrative fees and penalties that are necessary to recover the costs incurred in connection with entering into or enforcing a loan repayment agreement or providing financial or technical assistance. E. The board shall deposit, pursuant to sections 35-146 and 35-147, any monies received pursuant to subsection B, paragraph 5 of this section in the fund. 41-2254. Greater Arizona development authority revolving fund A. The greater Arizona development authority revolving fund is established consisting of: 1. Monies appropriated by the legislature. 2. Monies received from the United States government to carry out this article. 3. Monies received from political subdivisions, Indian tribes, tribal subdivisions and special districts as loan repayments, technical assistance repayments, interest, administrative fees and penalties. 4. Interest and other income received from investing monies in the fund. 5. Gifts, grants and donations received from any public or private source to carry out this article. 6. Any other monies received by the authority. B. The board shall administer the fund in compliance with the requirements of this article. The board shall separately account for monies received from each source listed in subsection A of this section. Monies received pursuant to subsection A, paragraph 1 of this section shall not be used for any purpose except securing bonds issued by the authority and providing assistance under technical assistance repayment agreements if the amount used for providing this assistance is not more than eight hundred thousand dollars. This subsection does not limit the power of the authority to pledge other monies in the fund to secure bonds issued by the authority or to provide assistance under technical assistance repayment agreements. C. The board may establish accounts and subaccounts as necessary to properly account for and use monies received by the authority. D. Monies in the fund may be used for securing bonds of the authority. E. Monies in the fund received pursuant to subsection A, paragraphs 2, 3, 4, 5 and 6 of this section may be used for: 1. Providing technical assistance to political subdivisions, special districts, Indian tribes and tribal subdivisions. 2. Providing financial assistance to political subdivisions, special districts and Indian tribes. 3. Paying compensation and employment-related expenses. 4. Paying the costs to operate the authority, to administer the fund and to carry out the requirements of this article. 5. Paying the costs of professional assistance hired by the authority pursuant to section 41-2253, subsection B, paragraph 6. F. On notice from the board, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. G. If the monies pledged to secure the bonds become insufficient to pay the principal and interest on the bonds, the board may direct the state treasurer to divest monies in the fund as may be necessary and may apply those proceeds to make current all payments then due on the bonds. The state treasurer shall immediately notify the attorney general and auditor general of the insufficiency. The auditor general shall audit the circumstances surrounding the depletion of the fund and shall report these findings to the attorney general. The attorney general shall conduct an investigation and report these findings to the governor and the legislature. 41-2255. Project application and prioritization A. The authority shall: 1. Establish an application form for technical and financial assistance. 2. Establish a procedure to review and approve or disapprove on its merits each administratively complete application for technical and financial assistance. 3. Establish by rule criteria by which technical and financial assistance will be awarded. For financial assistance the criteria shall include a determination of the ability of the applicant to repay a loan according to its terms and other conditions established by this article. 4. Adopt rules to prioritize applications for technical and financial assistance. 5. Inform the applicant of the board's determination within ninety days after the application date established by the authority pursuant to paragraph 2 of this subsection. B. The board shall: 1. Approve or disapprove applications for financial and technical assistance. 2. Determine the order and priority of projects assisted under this article based on the merits of the applications. C. If the application is approved, the board may condition the approval on assurances the board deems necessary to ensure that the technical assistance or financial assistance will be used according to law and the terms of the application. The loan repayment agreement shall include any conditions concerning financial assistance deemed necessary by the board. D. The authority shall only make financial assistance or short-term assistance available when the applicant is ready to proceed or, if the financial assistance is for refinancing outstanding bonds or other obligations, when the outstanding bonds or other obligations are to be refunded. The authority may provide technical assistance on an as needed basis. The authority may charge the applicant fees sufficient to cover the authority's costs related to the project. E. A political subdivision, a special district or an Indian tribe may apply to the authority for financial assistance and may accept assistance in connection with an infrastructure project owned by the political subdivision, special district or Indian tribe. 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 may be accepted by the board as evidence regarding the ability of the applicant to repay a loan. F. The authority shall only make financial assistance available upon a determination of the ability of the applicant to repay the financial assistance according to its terms and conditions. G. Applications for financial assistance shall: 1. Be solicited annually, semiannually, quarterly or monthly as determined by the authority pursuant to subsection A, paragraph 2. 2. Be administratively complete before being reviewed by the authority. 3. Include documentation concerning the ability of the applicant to repay the financial assistance according to its terms and conditions. 4. Include a resolution from the governing body of the political subdivision, special district or Indian tribe that the project is in the best interests of the residents. H. Applications for technical assistance shall: 1. Be solicited annually or semiannually as determined by the authority pursuant to subsection A, paragraph 2, except that an application for short-term assistance may be solicited at those times as the authority determines. 2. Be administratively complete before being reviewed by the authority. 3. Include a resolution from the governing body of the political subdivision, special district or Indian tribe that the project is in the best interests of the residents. 41-2256. Technical assistance; repayment agreements A. The authority may provide technical assistance to political subdivisions, special districts, Indian tribes and tribal subdivisions in connection with the development or financing of infrastructure. B. Technical assistance may include the following: 1. Assistance in selecting outside consultants. 2. Evaluation of design and construction options. 3. Financial advisory services. 4. Assistance in satisfying statutory requirements. 5. Short-term assistance. C. Assistance provided under a technical assistance repayment agreement: 1. Shall not be more than two hundred fifty thousand dollars for a single project. 2. Shall be repaid not more than three years after the date the monies for the assistance are advanced to the applicant. 3. Shall be in a form and under terms determined by the authority. D. Short-term assistance represents an advance of financial assistance. The authority shall not provide short-term assistance unless the political subdivision, special district or Indian tribe has an approved financial assistance application on file with the authority. A political subdivision, special district or Indian tribe shall repay short-term assistance pursuant to a technical assistance repayment agreement. E. The authority shall establish an application process and method of determining the allocation of technical assistance pursuant to section 41-2255. F. Before technical assistance may be provided, the board shall approve the application for technical assistance. G. 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. 41-2257. Financial assistance A. The authority may provide financial assistance to political subdivisions, special districts and Indian tribes in developing, acquiring, constructing, improving, equipping or refinancing infrastructure. The financial assistance shall include: 1. Loans as provided in this section. 2. Credit enhancements purchased for a political subdivision's, special district's or Indian tribe's bonds or other forms of indebtedness. B. A loan shall be evidenced by a loan repayment agreement, lease purchase agreement or bonds of a political subdivision, special district or Indian tribe that are delivered to and held by the authority. C. The authority shall prescribe a principal repayment schedule for each loan made. Loan principal payments may be rescheduled at the discretion of the authority but may not be forgiven. D. A loan under this section: 1. Shall be repaid not more than thirty years after the date it is incurred. 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 holders of any of the authority's bonds that provided funding for the loan. The authority may provide that loan interest accruing during construction of the borrower's infrastructure project and up to one year after completion of the construction be capitalized in the loan. 3. Shall be repayable in at least annual principal installments and at least semiannual interest installments. 4. Shall be conditioned on the identification of pledged revenues for repaying the loan. If the infrastructure financed by the loan is part of a municipal utility and the city or town pledges revenues of the utility to repay the loan, the loan shall be treated under section 9-530, subsection B as a lawful long-term obligation incurred for a specific capital purpose. 5. To the extent permitted by law, shall be secured by a debt service reserve account that is held in trust and that is in such amount, if any, as determined by the authority. 6. Shall be either: (a) For a political subdivision, additionally secured by an irrevocable pledge of the shared state revenues due the political subdivision for the life of the loan as provided by a resolution of the board. (b) For an Indian tribe, conditioned on the establishment of a dedicated revenue source under the control of a tribally chartered corporation or 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. E. The authority shall prescribe the rate or rates of interest on loans made under this section, but the rate or rates shall not exceed the prevailing market rate for similar types of loans. A political subdivision or special district may negotiate the sale of its bonds to or a loan repayment agreement with the authority without complying with any public or accelerated bidding requirements imposed by any other law for the sale of its bonds. F. The approval of a loan is conditioned on a written commitment by the political subdivision or special district to complete all applicable reviews and approvals and to secure all required permits in a timely manner. G. The approval of financial assistance to a city or town having a population of more than one hundred fifty thousand persons shall be conditioned on approval of its voters. An election is not required if voter approval has previously been received for substantially the same project. H. The approval of financial assistance to a county having a population of more than five hundred thousand persons shall be conditioned on approval of its voters. An election is not required if voter approval has previously been received for substantially the same project. I. By resolution of the board, the authority may impose any additional requirements it considers necessary to ensure that the loan principal and interest are timely paid. J. All monies received from political subdivisions, special districts and Indian tribes as loan repayments, interest and penalties shall be deposited, pursuant to sections 35-146 and 35-147, in the fund. K. The attorney general may take whatever actions are necessary to enforce the loan contract and achieve repayment of loans provided by the authority pursuant to this article. L. If 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 direct a withholding of state shared revenues as provided in subsection M of this section. The certificate of default shall be in the form determined by the authority, provided the certificate specifies the amount required to satisfy the unpaid payment obligation of the political subdivision. M. On receipt of a certificate of default from the authority, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold the monies from the next succeeding distribution of monies pursuant to section 42-5029 due to the defaulting political subdivision. In the case of a city or town, the state treasurer shall also withhold from the next succeeding distribution of monies pursuant to section 43-206 due to the defaulting city or town the amount specified in the certificate of default and immediately deposit the amount withheld in the fund. The state treasurer shall continue to withhold and deposit the monies until the authority certifies to the state treasurer that the default has been cured. In no event shall the state treasurer withhold any amount that is necessary, as certified by the defaulting political subdivision to the state treasurer and the authority, to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued prior to the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to sections 42-5029 and 43-206. 41-2258. Greater Arizona development authority bonds A. The authority, through the board, may issue negotiable bonds in a principal amount that in its opinion is necessary to provide sufficient monies for assistance under this article, to refund bonds, when the authority deems it expedient to do so, maintaining sufficient reserves in the fund to secure the bonds, to pay the necessary costs of issuing, selling and redeeming the bonds and to pay other expenditures of the authority incidental to and necessary and convenient to carry out the purposes of this article. B. The board shall authorize the bonds by resolution. The resolution shall prescribe: 1. The rate or rates of interest and the denominations of the bonds. 2. The date or dates of the bonds and maturity. 3. The coupon or registered form of the bonds. 4. The manner of executing the bonds. 5. The medium and place of payment. 6. The terms of redemption. C. The bonds shall be sold at public or private sale at the price and on the terms determined by the board. All proceeds from the issuance of bonds, except any amounts used to pay costs associated with the issuance and sale of the bonds, shall be deposited in the fund or a separately held account as specified in the resolution. D. To secure any bonds authorized by this section the board by resolution may: 1. Provide that bonds issued under this section may be secured by a lien on all or part of the monies paid into the appropriate account or subaccount of the fund. 2. Pledge or assign to or in trust to be held by the state treasurer or a trustee appointed by the authority for the benefit of the holder or holders of the bonds any part of the appropriate account or subaccount of the fund monies as is necessary to pay the principal and interest of the bonds as they come due. 3. Set aside, regulate and dispose of reserves and sinking funds. 4. Provide that sufficient amounts of the proceeds from the sale of the bonds may be used to fully or partly fund any reserves or sinking funds set up by the bond resolution. 5. Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent to and the manner in which consent may be given. 6. Provide for payment from the proceeds of the sale of the bonds of all legal and financial expenses incurred by the board in issuing, selling, delivering and paying the bonds. 7. Provide terms necessary to secure credit enhancement or other sources of payment or security. 8. Provide any other terms and conditions that in any way may affect the security and protection of the bonds. E. Any pledge of revenues by a political subdivision, a special district, an Indian tribe or the authority made under this article is valid and binding from the time when the pledge is made. The monies pledged and received by the state treasurer to be placed in the fund or in any account or subaccount in the fund are immediately subject to the lien of the pledge without any future physical delivery or further act, and any 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. F. A member of the board or any person executing the bonds is not personally liable for the payment of the bonds. The bonds are valid and binding obligations notwithstanding that before the delivery of the bonds any of the persons whose signatures appear on the bonds cease to be members of the board. From and after the sale and delivery of the bonds, they are incontestable by the board. G. The board, out of any available monies, may purchase bonds, which may then be canceled, at a price not exceeding either of the following: 1. If the bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date. 2. If the bonds are not then redeemable, the redemption price applicable on the first date after purchase on which the bonds become subject to redemption plus accrued interest to that date. H. 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. I. If a political subdivision fails to make a 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 payment and direct withholding pursuant to subsection J of this section. The authority may determine the form of the certificate of default, except that the certificate must specify the amount of money required to satisfy the unpaid payment obligation of the political subdivision. J. On receipt of a certificate of default from the authority, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold an amount from the defaulting political subdivision's next distribution of monies pursuant to section 42-5029 and an amount from a defaulting city's or town's next distribution of monies pursuant to section 43-206 necessary to meet the certified amount of the deficiency. The state treasurer shall immediately deposit in the fund the amount withheld. The state treasurer shall continue to withhold distributions pursuant to sections 42-5029 and 43-206 and deposit them into the fund until the authority certifies to the state treasurer that the default has been cured. K. Notwithstanding subsection J of this section, the state treasurer shall not withhold from the distribution of monies under section 42-5029 any amount, as certified by the defaulting political subdivision to the state treasurer and the authority, that is necessary to make any required deposits then due for payment of principal and interest on bonds of the political subdivision that have been secured by a pledge of the distribution. 41-2259. Bond obligations of the authority Bonds issued under this article are obligations of the authority, are payable only according to their terms and are not general, special or other obligations of this state. The bonds do not constitute a legal debt of this state and are not enforceable against this state. Payment of the bonds is not enforceable out of any state monies other than the income and revenue pledged and assigned to, or in trust for the benefit of, the holder or holders of the bonds. 41-2260. Agreement of state A. This state pledges to and agrees with the holders of the bonds that this state will not limit or alter the rights vested in the authority or any successor agency to collect the monies necessary to produce sufficient revenue to fulfill the terms of any agreements made with the holders of the bonds, or in any way impair the rights and remedies of the bondholders, until all bonds issued under this article, together with interest, with interest on any unpaid installments of interest and all costs and expenses in connection with any action or proceedings by or on behalf of the bondholders, are fully met and discharged. B. The board as agent for this state may include this pledge and undertaking in its resolutions and indentures securing its bonds. 41-2261. Certifications of bonds by attorney general A. The board may submit any bonds issued under this article to the attorney general after all proceedings for their authorization have been completed. Within fifteen days after submission the attorney general shall examine and pass on the validity of the bonds and the regularity of the proceedings. B. If the proceedings comply with this article, and if the attorney general determines that, when delivered and paid for, the bonds will constitute binding and legal obligations of the board, the attorney general shall certify on the back of each bond, in substance, that it is issued according to the constitution and laws of this state. 41-2262. Bonds as legal investments Bonds issued under this article are securities: 1. In which public officers and bodies of this state and of municipalities and political subdivisions of this state, all companies, associations and other persons carrying on an insurance business, all financial institutions, investment companies and other persons carrying on a banking business, all fiduciaries and all other persons who are authorized to invest in obligations of this state may properly and legally invest. 2. That may be deposited with public officers or bodies of this state and municipalities and political subdivisions of this state for purposes that require the deposit of state bonds or obligations. 41-2263. Annual audit and reporting A. The board shall cause an annual audit to be made of the fund. The audit shall be conducted by a certified public accountant within one hundred fifty days after the close of the fiscal year. The board shall immediately file a certified copy of the audit with the auditor general. B. The auditor general may make further audits and examinations that the auditor general considers to be necessary and take appropriate action relating to the audit or examination pursuant to title 41, chapter 7, article 10.1. If the auditor general takes no official action within twenty days after the annual audit is filed pursuant to subsection A, the audit is considered to be sufficient. C. The board shall pay any fees and costs of the certified public accountant and auditor general under this section from the earnings on the fund. D. Not later than January 1 of each year, the board shall submit an annual report of its activities, including a copy of the annual audit, to the governor, the president of the senate and the speaker of the house of representatives.