HB2098 - County water augmentation authorities; bond

House Engrossed county water augmentation authorities; bond State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 CHAPTER 42 HOUSE BILL 2098 AN ACT amending sections 45-1901, 45-1973 and 45-1976, Arizona Revised Statutes; repealing section 45-1991, Arizona Revised Statutes; amending title 45, chapter 11, article 5, Arizona Revised Statutes, by adding a new section 45-1991; amending sections 45-1993, 45-1994 and 45-1996, Arizona Revised Statutes; repealing section 45-1997, Arizona Revised Statutes; amending title 45, chapter 11, article 5, Arizona Revised Statutes, by adding a new section 45-1997; amending title 45, chapter 11, article 5, Arizona Revised Statutes, by adding section 45-2000; relating to the county water AUGMENTATION authority. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 45-1901, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1901. Definitions In this chapter, unless the context otherwise requires: 1. "Active management area" means an active management area established under chapter 2 of this title. 2. "Authority" means a county water augmentation authority established under this chapter. 3. "Board" means the board of directors of the authority. 4. "County" means the county containing over fifty per cent percent of the area of the authority. 5. "Operating unit" means a county, city, town, water company or political subdivision, this state, the United States, an Indian tribe or any other public or private entity with which an authority has a contractual relationship for the acquisition, delivery, exchange, treatment, storage or recharge of water. 6. "Project" means a any of the following: ( a ) any facility necessary or convenient to obtain, divert, withdraw, transport, exchange, deliver, treat , conserve, store or recharge water, including rights-of-way, canals, pipelines, pumping stations, storage projects, recovery wells, DELIVERY and RETENTION FACILITIES, water and wastewater treatment plants, real and personal property, interests in property and improvements to property that are necessary or appropriate to maintain and operate the facilities. ( b ) the ACQUISITION of water and rights to water. ( c ) a loan of bond proceeds from an AUTHORITY to An operating unit to ACQUIRE or construct any facility prescribed in SUBDIVISION ( a ) of this PARAGRAPH. 7. "Water company" means either a private water company as defined in section 45-402 or an irrigation district that primarily serves municipal water. END_STATUTE Sec. 2. Section 45-1973, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1973. Water supply fees The authority may assess fees, including extraction fees, development impact fees, connection fees, user fees, replenishment fees and administrative fees, against any operating unit or other person with which the authority has a contractual responsibility to provide any service. The amount of the fee and the method of payment shall be determined pursuant to the agreement between the authority and the operating unit or person, based on the cost of the service the authority provides, including the cost of developing an equivalent water supply for an operating unit that has exchanged with the authority a water right or right to receive water for a water supply contract with the authority. Any fee assessed under this section is not a rate or charge of the operating unit and is not subject to regulation by the Arizona corporation commission. The secretary-treasurer of the authority shall deposit all monies received under this section in either of the following: 1. The general fund of the authority. 2. if the monies are collected PURSUANT to the contracting and bonding powers of the AUTHORITY, the bond fund of the authority. END_STATUTE Sec. 3. Section 45-1976, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1976. Payment of interest; investment of bond fund monies The secretary-treasurer of the authority shall: 1. Pay matured principal and interest coupons from due on bonds of the authority from the bond fund. 2. Invest monies in the bond fund, under the direction of the board, in bonds of the United States or this state that shall be kept in the bond fund and that may be used to redeem bonds of the authority, on the request of the holders, either by exchanging them for bonds of the authority or by converting them into cash as provided in title 35, CHAPTER 2 . END_STATUTE Sec. 4. Repeal Section 45-1991, Arizona Revised Statutes, is repealed. Sec. 5. Title 45, chapter 11, article 5, Arizona Revised Statutes, is amended by adding a new section 45-1991, to read: START_STATUTE 45-1991. Authority to issue bonds The authority, acting through the board, may issue revenue bonds in a principal amount that the authority determines is necessary to provide sufficient monies to acquire or construct PROJECTS pursuant to this chapter. the authority may issue revenue bonds in conjunction with any other optional or alternative plans provided in this chapter. END_STATUTE Sec. 6. Section 45-1993, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1993. Scope of resolution A. Resolutions for a bond issue or issues shall state the amount of the proposed issue or issues, the proposed interest rate and types and terms of bonds , that all other methods of necessary financing by the authority have been found impractical, inadvisable or inadequate and that the issuance of the bonds is necessary and advisable as proposed. B. The authority chairman chairperson and secretary-treasurer shall sign the resolutions. In support of the resolution the authority shall enter into its record pertinent engineering, economic and financial data, appropriate maps, drawings, plans, outlines, calculations, summaries and related agreements and any other essential information constituting a record appropriate to the resolution. C. The resolution may approve a bond issue to finance an entire plan or system or any single or joint project, section or other facility of a related system or plan proposed for ultimate integration and completion. END_STATUTE Sec. 7. Section 45-1994, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1994. Hearing; findings A. The chairman chairperson of the board, at the earliest practical date, the EXECUTIVE director of the board or the chairperson's or executive director's designee shall fix a time and place for a hearing at least twenty but not more than thirty days after before adopting the resolution. The authority shall publish provide notice of the time and place fixed for the hearing twice at least twenty days in ADVANCE of the hearing in a newspaper of general circulation in the county in which the authority is established. B. All pertinent records and documents shall be filed with the board at least ten days before the date set for the hearing. Prehearings respecting any particular document, feature or incidental matter or any separable part or portion of any resolution may be held by the board on ten days' previous written notice if the board deems that holding a prehearing is conducive to expediting a final hearing PURSUANT to subsection A of this section , and a decision as to the issues presented may thereupon be rendered. C. At the time and place fixed for the hearing, the board shall examine and determine the matters and questions involved. Hearings may be recessed, adjourned or continued as the board orders. D. Any person who holds an original agreement or proposal made with the authority relating to or concerning the handling, sale, control or disposition of a proposed issue of bonds or who has previously made an offer or bid in good faith to purchase the bonds pursuant to a published invitation for bids by the authority, and any operating unit holding contracts with the authority at least ten days before the date fixed for the hearing, may qualify to be heard. E. d. at the CONCLUSION of the HEARING, if the board finds that all precedent requirements and conditions have been fulfilled, it the board shall approve the bond issue in whole or in part or shall otherwise disapprove the bond issue as a whole or as to such features or proposals as do not meet the essential requirements. When the board has made and entered its findings, it the board shall enter a decision accordingly. F. e. The decision of the board based on findings of fact that are supported by a preponderance of the evidence and that are not arbitrary or unreasonable is final and conclusive. END_STATUTE Sec. 8. Section 45-1996, Arizona Revised Statutes, is amended to read: START_STATUTE 45-1996. Provisions of bonds; sale A. The bonds shall provide that: 1. The bond is purchased and taken after a complete disclosure and with a full knowledge of all of the surrounding relevant facts and circumstances and not on the representation, faith or credit of the authority, this state or any of its political subdivisions. 2. The holder in order to obtain payment may not compel this state or any of its political subdivisions to exercise its appropriation or taxing power. 3. The bond does not constitute a debt of this state, any political subdivision of this state or any operating unit and is payable only from revenues of the authority. B. The gross or net revenue derived from any project or any part of a project may be pledged to secure the payment of any series of bonds. A. to secure any bonds PURSUANT to this article, the board, by RESOLUTION, may: 1. Provide that bonds issued pursuant to this chapter may be secured by a first lien on all or part of the monies paid into the appropriate account or subaccount administered by the authority. 2. PLEDGE or assign to or in trust for the benefit of The holder any part or APPROPRIATE account or SUBACCOUNT of the monies in the funds as is necessary to pay the PRINCIPAL and interest of the bonds as they come due. 3. Set aside, REGULATE and DISPOSE of any 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 established by the 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 that the holders must consent to and the manner in which that 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. Do any other matters that may affect the security and protection of the bonds. B. The bonds shall be signed by the chairperson or vice chairperson and the secretary-treasurer of the authority. Board members or any person executing the bonds are not personally liable for the payment of the bonds. The bonds are valid and binding obligations unless before the delivery of the bonds any of the persons whose signatures appear on the bonds ceases to be a member of the board. From and after the sale and delivery of the bonds, the BOARD may not contest the validity of a bond. C. The authority may provide for reimbursement to the holder of any bonds of all expenses of litigation and attorney fees incurred in collecting the bonds in the event of default and may provide for and fix the powers and duties of a trustee if necessary to enforce collection. Bond resolutions, agreements and bonds may be in such form and may contain such other conditions and terms as the authority deems appropriate or necessary to make the bonds fully salable and marketable. D. The board may use available monies to purchase bonds that may 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. D. e. The authority may provide that any holder of bonds, or a trustee designated by the authority at the time of issuing the bonds, on proper showing may secure an order of the superior court requiring the authority, subject to the contracts with operating units then in effect, to fix and collect rates and charges that will produce adequate revenues to permit setting up adequate yearly reserves with which to meet future payments according to the terms of the bond. F. Any pledge made PURSUANT to this article is valid and binding from the time 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 against the board regardless of whether the parties have notice of the lien. the resolution or trust indenture or any instrument by which a pledge is created and PLACED in the board's records shall serve as notice to all concerned of the creation of the pledge. the board is not required to record these instruments of creation in any other place. G. bonds issued PURSUANT to this article, the transfer of such bonds and the income such bonds produce are exempt from taxation by this state or any political subdivision of this state. H. Bonds issued PURSUANT to this article are obligations of the authority and are payable only according to their terms and are not obligations general, special or otherwise of this state, the county in which the authority is established or, other than the authority, a POLITICAL SUBDIVISION of this state. Payment of the bonds is not enforceable out of any monies of this state other than the income and revenue pledged and assigned to or in trust for the benefit of the holder or holders of the bonds. E. i. All bonds issued by the authority and agreements of the authority with respect to bonds are subject to this chapter, and no bond or agreement may contain any provision in conflict with this chapter. An amendment of this chapter does not diminish or impair the remedy and rights of the bondholder. F. The bonds shall be signed by the chairman or vice-chairman and the secretary-treasurer of the authority in office at the date of signing and are valid obligations of the authority although before delivery or sale the persons whose signatures appear on the bonds may have ceased to be officers of the authority. G. j. The validity of the bonds is not dependent on or affected by the legality of any proceeding relating to the acquisition, construction, improvement or extension of a project for which the bonds are issued. The bonds shall recite that they are regularly issued pursuant to this chapter and that recital is [Text truncated for display. Full text available on LegiScan.]