Assigned to COMPS & TRANSIT FOR
COMMITTEE
Assigned to COMPS & TRANSIT FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
international trade; authority; transportation
Purpose
Establishes the International Transportation and Trade Corridor Authority (Authority).
Background
The Arizona Department of Transportation (ADOT) is authorized to establish public‑private partnerships for the development and operation of facilities enabling the safe transport of people, information or goods (A.R.S. § 28-7703). ADOT is exempt from the Arizona Procurement Code in executing any of the various, authorized project delivery methods (A.R.S. § 28-7704). In operating a transportation facility, ADOT or its private partners may establish and collect user charges, tolls, fares, rents, advertising revenues and sponsorship proceeds (A.R.S. § 28-7705). The state may exercise the power of eminent domain to acquire property, rights-of-way or other property rights for public-private partnership projects (A.R.S. § 28-7709). H.B. 2622 extends ADOT's authority in public-private partnerships to the International Transportation and Trade Corridor Authority (Authority).
Current law allows tax levying public improvement districts (districts) to be designated as municipal corporations and political subdivisions with the same rights, powers and immunities as cities and towns (Ariz. Const. art. 13, § 7). Functioning under their own separate identity, districts are governmental entities exempt from taxation on their governmental activities and property. Districts are also exempt from local debt limits prescribed by the Arizona Constitution (Ariz. Const. art. 9, § 8).
H.B. 2622 appropriates $200,000 from the state General Fund (GF) to the Authority in FY 2019.
Provisions
International Transportation and Trade Corridor Authority
1. Establishes the Authority as:
a) a tax levying public improvement district with statewide boundaries;
b) a corporate and political body;
c) possessing all the rights, powers and immunities of municipal corporations; and
d) performing a government function in its activities.
2. Extends, to the Authority, ADOT's powers in developing transportation facilities through public-private partnerships.
3. Allows the Authority's residing qualified electors to fund fiscal needs by levying a tax or surcharge on the use of owned or created facilities.
4. Exempts the following from state and local income and property taxation:
a) property acquired, constructed or allowed to be constructed by the Authority;
b) property maintenance and care activities by the Authority; and
c) revenue derived from the Authority's operation of the property.
5. Allows the Authority to:
a) acquire real and personal property;
b) enter into contracts, including with private sector partners for the construction and operation of transportation and trade facilities;
c) enter into intergovernmental agreements;
d) access highway easements;
e) retain legal counsel or other consultants;
f) sue and be sued; and
g) adopt administrative rules.
6. Requires the Authority to:
a) approve transportation and trade facility sites by December 31, 2025;
b) maintain accurate records; and
c) provide for the use, maintenance and operation of properties and interests
7. Permits the Authority to hold review hearings at the discretion of the Chairpersons of the Senate Commerce and Public Safety Committee (COMPS) and House Local and International Affairs Committee (LIA), or their successor committees.
8. Prohibits the Authority from using public monies for lobbying services.
9. Appropriates $200,000 from the state GF to the Authority in FY 2019.
10. Sunsets the Authority on July 1, 2022.
Leadership
11. Establishes the Authority Board of Directors (Board) consisting of the following members appointed to four-year terms:
a) five members appointed by the Governor;
b) two members appointed by the President of the Senate; and
c) two members appointed by the Speaker of the House of Representatives.
12. Requires the Board membership to be geographically diverse and appointed within 10 days of the general effective date.
13. Requires Board members to appoint a Chairperson, Secretary and other necessary officers.
14. Requires the Board to employ an Executive Director responsible for:
a) negotiating, executing and performing contracts or other agreements, subject to approval of the Board;
b) managing Authority activities;
c) employing a Treasurer to serve as a fiscal agent;
d) employing administrative and clerical employees;
e) recommending consultants to the Board, including outside counsel and a professional facility management company; and
f) directing the activities of consultants.
15. Prohibits a principal or lobbyist from giving a gift to a Board member or Board employee, with exceptions for travel, lodging, personal hospitality, special events, food and beverages.
16. Applies conflict of interest laws to Authority directors, officers and agents and designates violations as a class 1 misdemeanor.
17. Allows Board members to receive compensation.
Transportation and Trade Facilities
18. Requires the Authority to construct, finance, furnish, maintain, improve, operate, market and promote use of transportation and trade facilities (TTFs).
19. Allows jurisdictional sponsors to provide land for TTFs.
20. Establishes the Authority's ownership of TTFs, subject only to leases, contracts, agreements, liens or other security interests of record.
21. Requires, subject to Board approval, the Executive Director to manage TTF creation and administration by:
a) recommending a contractor and architect;
b) assisting design preparation;
c) creating a construction schedule;
d) preparing the annual operating budget;
e) negotiating use agreements;
f) reviewing and recommending action on construction change order requests;
g) arranging capital and operating financing;
h) identifying potential TTF sites;
i) negotiating land and infrastructure agreements with jurisdictional sponsors, including intergovernmental agreements;
j) negotiating TTF operation agreements; and
k) negotiating contracts for concessionaries and other providers of food, beverage or other services.
22. Requires jurisdictional sponsors to maintain insurance and indemnify the Authority and state from any liability associated with public access ways.
23. Exempts the Authority from the Arizona Procurement Code and allows application of:
a) qualifications-based selection, whereby a party's qualifications and experience building similar structures serves as the basis for selection; and
b) the design-build method of construction, whereby the contracted party agrees to both design and build a structure.
24. Requires TTF plans, specifications and operations to be approved and monitored by the Board.
25. Requires the Authority to establish disadvantaged business enterprise participation goals in TTF construction and receive monthly goal progress reports.
26. Stipulates that TTF construction contracts must require prime contractors and major subcontractors to provide health insurance to employees and dependents, except to employees working less than 120 days a year.
27. Requires the Authority, before executing TTF agreements, to either independently verify a jurisdictional sponsors' financial capability or attain a bond, letter of credit or other financial assurance of future obligation payments.
28. Requires, in TFF agreements, Indian tribe jurisdictional sponsors to:
a) waive sovereign immunity in agreement enforcement actions;
b) consent to the jurisdiction of state and federal courts,
c) waive the right to require the Authority to exhaust tribal remedies before court action; and
d) accept state and federal law interpretations of agreements.
29. Allows the Authority to authorize and regulate the sale, use and consumption of alcoholic beverages on acquired property.
Oversight
30. Requires the Authority to submit monthly progress reports to the Governor, the Legislature and the Joint Legislative Budget Committee (JLBC).
31. Requires, if requested by the JLBC Chairperson, the Authority Executive Director to annually report on activities and financial performance before JLBC.
32. Requires, if requested by the COMPS and LIA Chairpersons or their successor committees, the Executive Director to appear before the committee within 30 days of request.
33. Requires the Board to solicit an annual independent audit and file the audit with the Auditor General.
34. Allows the Auditor General to make further audits or examinations.
35. Requires the Board to pay audit-related expenses.
Accounting and Budgeting
36. Requires the Board, beginning in 2019, to hold a public hearing annually to adopt a budget for the upcoming fiscal year that includes:
a) receipts and expenditures during the last fiscal year;
b) estimated expenses for the next fiscal year;
c) anticipated revenue and its sources;
d) a complete asset and liability statement;
e) a profit or loss statement;
f) cash on hand and anticipated current fiscal year end balances; and
g) an itemized statement of commitments, reserves and anticipated obligating for the next fiscal year.
37. Requires the Authority to maintain a general fund divided into the following accounts:
a) a construction account, consisting of bond proceeds or other monies received to purchase land and fund construction of TTFs;
b) a facility revenue clearing account, consisting of revenues received from city or county financial participation, lease or rent agreements, concession facilities, property sales or other dedicated public funding sources; and
c) an operating account, consisting of monies for Authority administration, future operating cost reserves and a $25,000,000 reserve for TFF repair, replacement and removal.
38. Requires the Authority to pay monthly bond and other debt service from the facility revenue clearing account before making distributions to the Authority's operating account.
Bonding
39. Allows the Authority to issue negotiable bonds by Board resolution in a principal amount necessary to:
a) provide monies for TTF purposes, including acquiring, designing developing, operating and improving a TTF;
b) pay bond-related expenses;
c) establish reserves or sinking accounts; or
d) issue refunding bonds.
40. Prescribes bond proceeds subaccount and debt service account requirements.
41. Allows the Board to:
a) pledge for the payment of principal and interest on bonds;
b) establish priorities among bondholders;
c) contract with a financial institution in bond administration;
d) use surplus bond monies for other Authority debt repayment; and
e) invest bond account funds.
42. Deems any pledge made by the Board to be valid and binding.
43. Exempts bonds from taxation.
44. Characterizes bonds as fully negotiable, legally valid and the sole obligations of the Authority, not the state.
Definitions
45. Defines authority as the International Transportation and Trade Corridor Authority.
46. Defines board as the Authority board of directors.
47. Defines Indian tribe as any organized Indian nation, tribe, band or community recognized by the United States Department of the Interior.
48. Defines jurisdictional sponsor as a city, town, county, Indian tribe or state entity that owns all or part of a transportation and trade facility site.
49. Defines transportation and trade facility as any suitable facility used to accommodate transportation and trade of rail vehicles, roadway vehicles, fuel, energy, water, wastewater, electromagnetic signals or other products and services.
House Action
LIA 2/14/18 DP 7-0-0-0
3rd Read 2/22/18 55-1-4
Prepared by Senate Research
March 8, 2018
GH/lb