Bill Text: AZ HB2353 | 2020 | Fifty-fourth Legislature 2nd Regular | Introduced
Bill Title: Bonds; counsel; financial advisor; fees
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2020-03-11 - Senate FIN Committee action: Do Pass, voting: (7-1-2-0) [HB2353 Detail]
Download: Arizona-2020-HB2353-Introduced.html
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REFERENCE TITLE: bonds; counsel;
financial advisor; fees |
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State of
Arizona House of
Representatives Fifty-fourth
Legislature Second Regular
Session 2020 |
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HB 2353 |
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Introduced by Representative Toma |
AN ACT
amending sections
15-491, 15-1024, 35-452 and 35-457, Arizona Revised Statutes; relating to
bonds.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 15-491, Arizona Revised Statutes, is amended to read:
15-491. Elections on school
property; exceptions
A. The governing board of a school district may, and on petition of fifteen percent of the school electors as shown by the poll list at the last preceding annual school election shall, call an election for the following purposes:
1. To locate or change the location of school buildings.
2. To purchase or sell school sites or buildings or sell school sites pursuant to section 15‑342 or to build school buildings, but the authorization by vote of the school district shall not necessarily specify the site to be purchased.
3. To decide whether the bonds of the school district shall be issued and sold for the purpose of raising money monies for purchasing or leasing school lots, for building or renovating school buildings, for supplying school buildings with furniture, equipment and technology, for improving school grounds, for purchasing pupil transportation vehicles or for liquidating any indebtedness already incurred for such purposes. Bonds issued for furniture, equipment and technology, other than fixtures, shall mature no not later than the July 1 that follows the fifth year after the bonds were issued. A school district shall not issue class B bonds until the school district has obligated in contract the entire proceeds of any class A bonds issued by the school district. The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, sections 8 and 8.1, Constitution of Arizona.
4. To lease for twenty or more years, as lessor or as lessee, school buildings or grounds. Approval by a majority of the school district electors voting authorizes the governing board to negotiate for and enter into a lease. The ballot shall list the school buildings or grounds for which a lease is sought. If the governing board does not enter into a lease of twenty or more years of the school buildings or grounds listed on the ballot within twenty years of after the date of the election and the board continues to seek such a lease, the governing board shall call a special election to reauthorize the board to negotiate for and to enter into a lease of ten twenty or more years.
5. To change the list of capital projects or the purposes authorized by prior voter approval to issue bonds.
6. To extend from six to ten years the time period to issue class B bonds authorized in 2009 or earlier. Elections pursuant to this paragraph may not be held later than the sixth November after the election approving the issuance of the bonds.
B. No A petition shall be is not required for the holding of the first election to be held in a joint common school district for any of the purposes specified in subsection A of this section. The certification of election results required by section 15‑493 shall be made to the board of supervisors of the jurisdictional county.
C. When the election is called to determine whether or not bonds of the school district shall be issued and sold for the purposes enumerated in the call for the election, the question shall be submitted to the vote of the qualified electors of the school district as defined in section 15‑401 and subject to section 15‑402.
D. The governing board shall order the election to be held and the election notice and procedures to be conducted in the manner prescribed in title 35, chapter 3, article 3. If a petition for an election has been filed with the governing board as provided in subsection A of this section, the board shall act on the petition within sixty days by ordering the election to be held as provided in this subsection. If a school district bond election is scheduled for the same date a school district will hold an override election, the governing body shall deliver a copy of the notice of election and ballot to the county school superintendent who shall include the notice of election and ballot with the informational pamphlet and ballot prepared for the override election. Mailing of the information required for both the override and bond elections shall constitute compliance with the notice provisions of this section.
E. The elections to be held pursuant to this section shall only be held on dates prescribed by section 16‑204, except that elections held pursuant to this section to decide whether class B bonds shall be issued, or any other obligation incurred that will require the assessment of secondary property taxes, shall only be held on the first Tuesday after the first Monday of November.
F. Subsection A, paragraph 2 of this section does not apply to the sale of school property if the market value of the school property is less than fifty thousand dollars $50,000.
G. Bond counsel fees, financial
advisory fees, printing costs and paying agent and registrar fees for bonds
issued pursuant to an election under this section shall be paid from either the
amount authorized by the qualified electors of the school district or current
operating funds. Bond election expenses
shall be paid from current operating funds only.
H. G. For any election conducted to decide whether class B bonds will be issued pursuant to this section:
1. Except as provided in paragraph 2 of this subsection, the ballot shall include the following statement:
The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.
__________ school district is proposing to issue class B general obligation bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for new construction and renovation of school buildings in accordance with state law.
2. For a school district that is a career technical education district, the ballot shall include the following statement:
___________, a career technical education district, is proposing to issue class B general obligation bonds totaling $___________ to fund capital improvements at a campus owned or operated and maintained by the career technical education district.
3. The ballot shall conform to the requirements of title 35, chapter 3, article 3.
4. At least eighty‑five days before the election, the school district shall submit proposed ballot language to the county school superintendent and the director of the Arizona legislative council. The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of after receiving the proposed ballot language, shall notify the school district and the county school superintendent of the director's objections, and the school district shall resubmit revised ballot language to the director for approval.
5. No Not later than thirty‑five days before a class B bond election conducted pursuant to this section, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household that contains a qualified elector in the school district. The informational pamphlet shall contain, at a minimum, the following information:
(a) An executive summary of the school district's most recent capital plan submitted to the school facilities board.
(b) A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.
(c) The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at one hundred thousand dollars $100,000.
I. H. For any election conducted to decide whether impact aid revenue bonds shall be issued pursuant to this section:
1. The ballot shall include the following statement:
The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.
__________ school district is proposing to issue impact aid revenue bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for new construction and renovation of school buildings in accordance with state law.
2. The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.
3. At least eighty‑five
days before the election, the school district
shall submit proposed ballot language to the director of the legislative council. The director of the legislative council shall
review the proposed ballot language to determine whether the proposed ballot
language complies with this section. If the director of the
legislative council determines that the proposed ballot language does not
comply with this section, the director, within ten calendar days of the receipt
of the proposed ballot language, shall notify the school district of the
director's objections and the school district shall resubmit revised ballot
language to the director for approval.
4. No Not later than thirty‑five days before an impact aid revenue bond election conducted pursuant to this section, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household that contains a qualified elector in the school district. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) An executive summary of
the school district's most recent capital plan submitted to the school
facilities board.
(d) A complete list of
each proposed capital improvement that will be funded with the proceeds of the
bonds and a description of the proposed cost of each improvement, including a
separate aggregation of capital improvements for administrative purposes as
defined by the school facilities board.
(e) A statement that impact aid revenue bonds will be fully funded by aid that the school district receives from the federal government and do not require a levy of taxes in the district.
(f) A statement that if the bonds are approved, the first priority for the impact aid will be to pay the debt service for the bonds and that other uses of the monies are prohibited until the debt service obligation is met.
(g) A statement that if the impact aid revenue bonds are approved, the school district shall not issue or sell class B bonds while the district has existing indebtedness from impact aid revenue bonds, except for bonds issued to refund any bonds issued by the board.
J. I. If the voters approve the issuance of school district class B bonds or impact aid revenue bonds, the school district shall not use the bond proceeds for any purposes other than the proposed capital improvements listed in the informational pamphlet, except that up to ten percent of the bond proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements. The proposed capital improvements may be changed by a subsequent election as provided by this section.
K. J. Each school district that issues bonds under this section is required to shall hold a public meeting each year between September 1 and October 31, until the bond proceeds are spent, at which an update of the progress of capital improvements financed through bonding is discussed and at which the public is permitted allowed an opportunity to comment. At a minimum, the update shall include a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital bonding plans of the school district. The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter‑approved capital overrides in funding capital improvements, if any.
L. K. If an election is held to change the purpose or list of capital projects authorized by prior voter approval to issue bonds pursuant to subsection A, paragraph 5 of this section, the following requirements apply:
1. The election may be held only on the first Tuesday after the first Monday in November.
2. No Not later than thirty‑five days before the election, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household in the school district that contains a qualified elector. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) A statement as to why the election was called.
(d) A complete list of each proposed capital improvement that is in addition to the initial capital improvements presented in the informational pamphlet when the bonds were approved and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.
(e) A complete list of each capital improvement that was presented in the informational pamphlet when the bonds were initially approved and that is proposed to be eliminated or to have its cost reduced, and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.
(f) Arguments for and against the proposed change, if submitted, as provided by section 15‑481, subsection B, paragraph 9. The ballot arguments for the proposed change shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed change.
3. The ballot shall contain the words "change capital improvements, yes" and "change capital improvements, no", and the voter shall signify the voter's desired choice.
4. If the election is to add a purpose that was not on the initial ballot, the ballot shall list the purpose that is proposed to be added.
M. L. If an election is held to extend the time to issue bonds pursuant to subsection A, paragraph 6 of this section, the following requirements apply:
1. The election may be held only on the first Tuesday after the first Monday in November.
2. No Not later than thirty‑five days before the election, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household in the school district that contains a qualified elector. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) A statement as to why the election was called.
(d) Arguments for and against the proposed change, if submitted, as provided in section 15‑481, subsection B, paragraph 9. The ballot arguments for the proposed change shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed change.
3. The ballot shall contain the words "extend time to issue bonds, yes" and "extend time to issue bonds, no", and the voter shall signify the voter's desired choice.
Sec. 2. Section 15-1024, Arizona Revised Statutes, is amended to read:
15-1024. Interest on bonds; sale; disposition of proceeds; definition
A. The bonds shall bear interest, payable semiannually at the rate or rates set by the accepted bid, which shall not exceed the maximum rate of interest set forth in the resolution calling the election. The bonds may be made payable at such a place within the United States as the governing board of the school district directs and shall be sold in the manner prescribed by the governing board of the school district for not less than par.
B. The proceeds of the sale of the bonds shall be deposited in the county treasury to the credit of the bond building fund of the school district. Such deposits may be drawn out for the purposes authorized by this article as other school monies are drawn. If a balance remains in the bond building fund after the acquisition or construction of facilities is completed for which the bonds were issued and on written request of the governing board:
1. If the school district has outstanding bonded indebtedness, the balance remaining in the bond building fund shall be transferred to the debt service fund of the district.
2. If the district has no outstanding bonded indebtedness, the balance remaining in the bond building fund shall be used for reduction of to reduce school district taxes.
C. When bonds are sold and the proceeds are not required to be used for a period of ten days or more, such proceeds may be invested as provided by section 15‑1025, subsection B. All monies earned as interest or otherwise derived from the investment of the proceeds of the sale of the bonds shall be credited to the debt service fund, except that on the request of the district, the monies earned as interest shall be deposited to the bond building fund if federal laws or rules require the interest to be used for capital expenditures or the monies earned as interest shall be credited to the bond building fund if the voters authorized such use of the monies in a separate question at the bond election. The separate question shall inform the voters that the monies will be credited to the debt service fund, and may therefore reduce the amount of the secondary property tax, if the measure authorizing the monies to be credited to the bond building fund does not pass.
D. The amount of net premium associated with a bond issue may be used only for one or more of the following:
1. To pay costs incurred in issuing the bonds, subject to section 15‑491, subsection G and section 15‑1465, subsection A.
2. As a deposit in a debt service fund and used only to pay interest on the bonds.
3. For any other purpose, if the district has voter authorization and available capacity under its debt limitations and the amount of net premium used for such purpose will reduce in an equal amount both:
(a) The available aggregate indebtedness capacity of the district under the statutes and constitution of this state.
(b) The principal amount authorized at the election for the district from which the issue of bonds is being sold.
E. Any net premium used as provided in subsection D, paragraph 3 of this section shall be amortized for all debt limitation purposes on a pro rata basis each year by multiplying the net premium used by a percentage equal to the percentage of the total principal amount of the bond issue that matures in that year.
F. For the purposes of this section, "net premium" means the difference between the par amount of the bond issue and the bond issue price determined pursuant to United States treasury regulations.
Sec. 3. Section 35-452, Arizona Revised Statutes, is amended to read:
35-452. Election to authorize indebtedness; costs
A. The governing body or board of a political subdivision enumerated in section 35‑451 may, and upon on a petition signed by fifteen per cent percent of the qualified electors shall, order an election by such electors to determine whether such indebtedness shall be authorized. The election shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d) F.
B. If a majority of the qualified electors voting at the election votes in favor of creating an indebtedness, such the political subdivision may become so indebted.
C. Bond counsel fees, financial
advisory fees, printing costs and paying agent and registrar fees shall be paid
from either the amount authorized by the qualified electors of the political
subdivision or current operating funds.
D. C. Bond election expenses shall be paid from current operating funds only.
Sec. 4. Section 35-457, Arizona Revised Statutes, is amended to read:
35-457. Sale of bonds; bids; forfeiture of deposit; definitions
A. Any or all of the bonds may be sold at public sale or through an online bidding process in a manner prescribed by the governing body or board that includes the following:
1. If sold by public sale before the sale of any bonds, the governing body or board shall meet and enter on its record an order directing the sale of the bonds and the date and hour of the sale, and cause a copy of the order to be published at least once a week for two successive weeks in cities having a population of fifteen thousand or more persons, and once a week for four successive weeks in all other political subdivisions before the sale in one or more designated daily or weekly newspapers, together with a notice that sealed proposals will be received for purchase of the bonds on the date and hour named in the order.
2. If sold through an online bidding process, bids for the bonds that are entered into the system may be concealed until a specified time or disclosed in the online bidding process, may be subject to improvement in favor of the political subdivision before a specified time and may be for an entire issue of bonds or specified maturities according to the manner, terms and notice provisions ordered by the governing body.
B. If the bonds are sold by public sale or through an online bidding process, all proposals shall be received on the date and hour or in the manner stated in the order and the governing body or board shall award the bonds to the highest and most responsible bidder. The successful bidder shall provide a bid guarantee for not less than two percent of the total par value of the bonds within twenty‑four hours after the date and time the bid is awarded. The bid guarantee may be in the form of a certified check or a bond issued by a surety company licensed by the department of insurance to do business in this state. The governing body or board may reject any and all bids. If the successful bidder does not carry out the terms of the proposal to purchase the bonds, the bid guarantee shall be forfeited as stipulated and liquidated damages.
C. Notwithstanding any other provision of this section, bonds may be sold by negotiated sale on terms the governing body deems to be the best then available and may bear interest payable at such times as shall be determined by the governing body.
D. The bonds may be sold below, at or above par. If an issue of bonds is sold below par, the aggregate amount of discount plus interest to be paid on the bonds must not exceed the amount of interest that would be payable on the bonds over the maturity schedule prescribed by the governing body at the maximum rate set out in the resolution calling the election at which the bonds were voted. The amount of net premium associated with a bond issue may be used only for one or more of the following:
1. To pay costs incurred in issuing the bonds, subject to section 35‑452, subsection C.
2. As a deposit in a debt service fund and used only to pay interest on the bonds.
3. For any other purpose, if the political subdivision has voter authorization and available capacity under its debt limitations and the amount of net premium used for such purpose will reduce in an equal amount both:
(a) The available aggregate indebtedness capacity of the political subdivision under the statutes and constitution of this state.
(b) The principal amount authorized at the election for the political subdivision from which the issue of bonds is being sold.
E. Any net premium used as provided in subsection D, paragraph 3 of this section shall be amortized for all debt limitation purposes on a pro rata basis each year by multiplying the net premium used by a percentage equal to the percentage of the total principal amount of the bond issue that matures in that year.
F. For the purposes of this section:
1. "Net premium" means the difference between the par amount of the bond issue and the bond issue price determined pursuant to United States treasury regulations.
2. "Online bidding process" means a
procurement process in which the governing body receives bids electronically
over the internet in a real‑time, competitive bidding event.
