Ariz. Rev. Stat. § 49-1309 – Long-term water augmentation bonds; requirements; authority; exemption from liability

A. The authority, through the board, may issue negotiable long-term water augmentation bonds in a principal amount that, in its opinion, is necessary to do all of the following:
1. 1. Provide sufficient monies for water supply development projects and financial assistance for water supply development projects approved under this chapter.
2. 2. Refund long-term water augmentation bonds, when the authority deems it expedient to do so.
3. 3. Increase the capitalization of the long-term water augmentation fund.
4. 4. Maintain sufficient reserves in the long-term water augmentation fund to secure the long-term water augmentation bonds.
5. 5. Pay the necessary costs of issuing, selling and redeeming the long-term water augmentation bonds.
6. 6. 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 long-term water augmentation bonds by resolution. The resolution shall prescribe all of the following:
1. 1. The rate or rates of interest and the denominations of the long-term water augmentation bonds.
2. 2. The date or dates and maturity of the long-term water augmentation bonds.
3. 3. The coupon or registered form of the long-term water augmentation bonds.
4. 4. The manner of executing the long-term water augmentation bonds.
5. 5. The medium and place of payment.
6. 6. The terms of redemption.
C. The long-term water augmentation 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 long-term water augmentation bonds, except any amounts used to pay costs associated with the issuance and sale of the long-term water augmentation bonds, shall be deposited in the long-term water augmentation fund or a separately held account as specified in the resolution.
D. To secure any long-term water augmentation bonds authorized by this section, the board by resolution may:
1. 1. Require that long-term water augmentation bonds issued under this section be secured by a lien on all or a part of the monies paid into the appropriate account or subaccount of the long-term water augmentation fund and provide the priority of the lien.
2. 2. Pledge or assign to or in trust to be held by the state treasurer for the benefit of the holder or holders of the long-term water augmentation bonds any part of the appropriate account or subaccount of the long-term water augmentation fund monies as is necessary to pay the principal and interest of the long-term water augmentation bonds as the bonds come due.
3. 3. Set aside, regulate and dispose of reserves and sinking funds.
4. 4. Require that sufficient amounts of the proceeds from the sale of the long-term water augmentation bonds be used to fully or partly fund any reserves or sinking funds established by the board resolution authorizing the long-term water augmentation bonds.
5. 5. Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of long-term water augmentation bonds the holders of which must consent to and the manner in which consent may be given.
6. 6. Provide for payment from the proceeds of the sale of the long-term water augmentation bonds of all legal, financial and other expenses incurred by the authority in issuing, selling, delivering and paying the long-term water augmentation bonds.
7. 7. Provide terms necessary to secure credit enhancement or other sources of payment or security.
8. 8. Provide any other terms and conditions that in any way may affect the security and protection of the long-term water augmentation bonds.
E. The pledge of pledged revenues by an eligible entity, or the pledge of any other revenues by the authority or pursuant to a public-private partnership agreement, under this article is valid and binding from the time the pledge is made. The monies pledged and received by the state treasurer to be placed in the long-term water augmentation fund or in any account or subaccount in the long-term water augmentation 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 or the authority 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 long-term water augmentation bonds is not personally liable for the payment of the long-term water augmentation bonds. The long-term water augmentation bonds are valid and binding obligations notwithstanding that before the delivery of the long-term water augmentation bonds any of the persons whose signatures appear on the long-term water augmentation bonds cease to be members of the board. From and after the sale and delivery of the long-term water augmentation bonds, the bonds are incontestable by the board.
G. The board, out of any available monies, may purchase long-term water augmentation bonds, which may then be canceled, at a price not exceeding either of the following:
1. 1. If the long-term water augmentation bonds are then redeemable, the redemption price then applicable plus accrued interest to the date of redemption.
2. 2. If the long-term water augmentation bonds are not then redeemable, the redemption price applicable on the first date after purchase by the authority on which the long-term water augmentation bonds become subject to redemption plus accrued interest to the date of redemption.