|
REFERENCE TITLE: bonding; net premiums |
|
State of Arizona House of Representatives Forty-ninth Legislature Second Regular Session 2010
|
|
HB 2489 |
|
|
|
Introduced by Representative Yarbrough
|
AN ACT
Amending sections 15‑1024, 35‑457, 35‑471 and 35‑473.01, Arizona Revised Statutes; relating to bonding.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. 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 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 upon 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 transferred to the general fund of the district.
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 the monies 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 not exceed the greater of:
1. Two ten per cent of the par value of the bond issue.
2. One hundred thousand dollars.
E. Costs incurred in issuing the bonds may be paid from the net premium associated with a bond issue. Any net premium not used to pay the costs of the bond issue incurred in issuing the bonds shall be deposited in a debt service fund and used to pay interest on the bonds.
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. 2. 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 by calling for bids at public sale or through an on‑line online bidding process, or bonds may be sold under an accelerated bidding process as follows in a manner prescribed by the governing body or board that includes the following:
1. If sold under an accelerated bidding process, the bonds shall be sold at the lowest cost the governing body deems then available after having received at least three pricing quotations from recognized purchasers of bonds of the type being sold.
2. 1. If sold by public sale before the sale of any bonds the governing body or board shall meet and enter upon 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 according to the most recent federal census, 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.
3. 2. If sold through an on‑line online bidding process, bids for the bonds that are entered into the system may be concealed until a specified time or disclosed in the on‑line online bidding process, may be subject to improvement in favor of the municipality 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 on‑line 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. All bids shall be accompanied by The successful bidder shall provide a bid guarantee for not less than two per cent 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. and return the bid guarantees. 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 to natural persons residing in this state 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 not exceed the greater of:
1. Two ten per cent of the par value of the bond issue.
2. One hundred thousand dollars.
E. Costs incurred in issuing the bonds may be paid from the net premium associated with a bond issue. Any net premium not used to pay the costs of the bond issue incurred in issuing the bonds shall be deposited in a debt service fund and used only to pay interest on the bonds.
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. "On‑line 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.
Sec. 3. Section 35-471, Arizona Revised Statutes, is amended to read:
35-471. Refunding bonds; resolution authorizing issuance; definition
A. The board of supervisors, on behalf of the county, the governing body of a city or town or similar municipal corporation and a school district governing board may issue refunding bonds to refund the bonded indebtedness of such county, school district, city or town or other similar municipal corporation when it is expedient to do so.
B. The board of supervisors or other governing body desiring to issue refunding bonds shall adopt and include in its minutes a resolution stating:
1. The facts and determination of the necessity or advisability of refunding such bonded indebtedness, including an estimate of the present value of the debt service savings, net of all costs associated with the refunding bonds, that will occur.
2. The amount of bonds to be issued, the date of such bonds and the denominations.
3. The rate of interest and the maturity date.
4. The place of payment, within or without the state, of the principal and interest.
C. The amount of net premium associated with a refunding bond issue may not exceed the total of the following: The amount of net premium associated with a refunding bond issue may not exceed the sum of the following:
1. An amount not to exceed ten per cent of the par value of the refunding bonds.
1. 2. The amount equal to the difference between the amount required to fund the escrow account and the par amount of the refunded bonds.
2. 3. The amount equal to the costs of the issuance of incurred in issuing the refunding bonds. that may be paid from premium, up to two per cent of the par value of the refunded bonds.
D. Any net premium not used to pay the costs of the bond issue or to fund the escrow account shall be deposited in a debt service fund and used only to pay interest on the bonds.
E. 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. 4. Section 35-473.01, Arizona Revised Statutes, is amended to read:
35-473.01. Refunding bonds issued in advance of maturity of the bonds to be refunded; definition
A. Refunding bonds, designated as such, may also be authorized, issued and sold pursuant to this article for the purpose of refunding any bonds theretofore issued under the authority of article 3 of this chapter or under the authority of both article 3 of this chapter and title 9, chapter 5, article 3 or under the authority of title 15, chapter 4, article 5 and chapter 9, article 7 or by any political subdivision which that is a public, corporate body under the laws of this state the property of which is exempt from taxation, for the purpose of refunding any bonds, theretofore issued under authority of law and payable from the proceeds of taxes, including assessments, which may be levied annually at uniform rates and are secured by property subject thereto in the political subdivision, in advance of the maturity or call date of such bonds to be refunded. If the weighted average maturity of the refunding bonds is at least seventy-five per cent of the weighted average maturity of the bonds being refunded, no election on the issuance of the refunding bonds shall be required. If the refunding bonds are combined into a single issue with bonds authorized for nonrefunding purposes, the bonds so authorized for nonrefunding purposes shall have been submitted at an election as otherwise provided by law.
B. When refunding bonds issued pursuant to this section are sold, the net proceeds shall be invested in obligations issued by or guaranteed by the United States government, if these investments will mature with interest so as to provide funds to pay when due, or called for redemption, the bonds to be refunded together with interest thereon and redemption premiums, if any, and such proceeds or obligations shall, and other funds legally available for such purposes may, be deposited in the respective principal and interest redemption funds and shall be held in trust for the payment of the refunded bonds with interest and redemption premiums, if any, on maturity or upon an available redemption date or upon an earlier voluntary surrender with the consent of the issuer.
C. When bonds are issued in advance of maturity of the bonds being refunded, the holder of the refunding bonds shall rely upon the sufficiency of the funds or securities held in trust for the payment of the refunded bonds. The issuance of refunding bonds shall in no way infringe upon the rights of the holder of the refunded bonds to rely upon a tax levy for the payment of principal and interest on the refunded bonds if the investments in the redemption funds prove insufficient. The total aggregate of taxes levied to pay principal and interest on the refunding bonds in the aggregate shall not exceed the total aggregate principal and interest to become due on the refunded bonds from the date of issuance of the refunding bonds to the final date of maturity on the bonds being refunded. Subject to such limitation, taxes in an amount sufficient to pay the interest on all refunding bonds issued pursuant to this section, then outstanding, the installments of the principal thereof becoming due and payable in the ensuing year, and the annual portion of such sinking fund as may be set up for retirement thereof, shall be levied, assessed and collected as other taxes of the political subdivision and the proceeds therefrom kept in a special fund and used only for the purposes for which collected.
D. Proceedings pursuant to this section shall be had by the board or boards which that would be authorized to issue and sell the bonds to be refunded if such bonds were then to be issued and sold. The refunding bonds to be issued pursuant hereto may be of serial, including semiannual, or term maturities payable at any time on or before the maximum maturity date otherwise authorized by this article, and the provisions relating to execution, validity, records, place of payment and payment, cancellation and destruction upon maturity of the bonds to be refunded shall apply to such refunding bonds.
E. Refunding bonds to be issued pursuant to this section may be combined with bonds otherwise authorized, provided that they are of equal priority.
F. The powers conferred by this section are in addition to, and not in substitution of, and the limitations imposed by this section shall not affect the powers conferred by any other law.
G. The amount of net premium associated with a refunding bond issue may not exceed the total of the following: The amount of net premium associated with a refunding bond issue may not exceed the sum of the following:
1. An amount not to exceed ten per cent of the par value of the refunding bonds.
1. 2. the amount equal to the difference between the amount required to fund the escrow account and the par amount of the refunded bonds.
2. 3. The amount equal to the costs of the issuance of incurred in issuing the refunding bonds. that may be paid from premium, up to two per cent of the par value of the refunded bonds.
H. Any net premium not used to pay the costs of the bond issue or to fund the escrow account shall be deposited in a debt service fund and used only to pay interest on the bonds.
I. 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.