HB2787 - 542R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 45-1901, Arizona Revised Statutes, is amended to read:

START_STATUTE45-1901. 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. "Annual contract assessment" means an amount that is charged by the authority on contract land and that is specified in the contract executed between the authority and the contract land owner.

2. 3. "Authority" means a county water augmentation authority established under this chapter.

3. 4. "Board" means the board of directors of the authority.

5. "Contract land" means real property that meets the requirements of section 45-1948.

4. 6. "County" means the county containing over fifty per cent percent of the area of the authority.

5. 7. "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. 8. "Project" means a facility necessary or convenient to obtain, divert, withdraw, transport, exchange, deliver, treat or recharge water, including rights-of-way, real and personal property, interests in property and improvements to property that are necessary or appropriate to maintain and operate the facilities.

7. 9. "Water company" means either a private water company as defined in section 45‑402 or an irrigation district that primarily serves municipal water.

10. "Water provider" means any of the following:

(a) A municipal water delivery system as defined in section 42‑5301.

(b) A county water augmentation authority established under chapter 11 of this title.

(d) A community facilities district formed pursuant to title 48, chapter 4, article 6. END_STATUTE

Sec. 2. Title 45, chapter 11, article 3, Arizona Revised Statutes, is amended by adding section 45-1948, to read:

START_STATUTE45-1948. Qualification as contract land

A. Real property qualifies as contract land only if all of the following apply:

1. The real property is located in an active management area in which the authority is located.

2. The owner of the real property, or other person or entity, such as a property owners' or homeowners' association, if the person or entity has proper authority, records a declaration that has been approved by the authority against the real property in the official records of the county where the real property is located that:

(a) Contains the legal description of the real property.

(b) Declares the intent of the owner that the real property qualify as contract land under this chapter.

(c) Declares that, in order to facilitate financing, each parcel of contract land thereafter established at the real property is subject to a contract land assessment to be determined by the authority.

(d) Declares that qualifying as contract land and subjecting the real property to the contract land assessment directly benefits the real property by increasing the potential of the property to qualify for a certificate of assured water supply issued by the department of water resources pursuant to chapter 2, article 9 of this title, thereby allowing the development, use and enjoyment of the real property.

(e) Contains a covenant that is binding against the real property and each parcel of contract land thereafter established at the real property to pay to the authority a contract land assessment based on the amount determined by the contract.

(f) Declares that the authority may impose a lien on the real property and each parcel of contract land thereafter established at the real property to secure payment of the contract land assessment and any applicable fees.

(g) Declares that the covenants, conditions and restrictions contained in the declaration run with the land and bind all successors and assigns of the owner.

B. The declaration may contain covenants, conditions and restrictions in addition to those prescribed by this section. The declaration may be an amendment or supplement to covenants, conditions and restrictions recorded against developed or undeveloped land.

C. Notwithstanding subsection A of this section, no real property qualifies as contract land unless the water provider that will provide water to the real property that is subject to the declaration enters into and records in the official records of the county where the real property is located an agreement between the authority and the water provider that contains both of the following:

1. The legal description of the real property and the tax parcel numbers for the real property.

2. An agreement by the water provider to submit to the authority by March 31 of each year after the recordation of the instrument information as the authority may reasonably request.

D. Real property previously accepted as contract land pursuant to subsection A of this section terminates its contract land status only if all of the following apply:

1. No lot or parcel of subdivided land within the real property has been sold or leased to a retail purchaser or lessee. For the purposes of this paragraph, "retail purchaser or lessee" means a purchaser or lessee of a lot or parcel of subdivided lands that is entitled to receive a public report from the seller or lessor pursuant to section 32‑2183, subsection I.

2. The state real estate commissioner has not issued a public report for the real property.

3. If lot or parcel boundaries were previously recorded for the real property, the planning agency having planning authority over the real property has approved a plat vacating the lot or parcel boundaries that were previously recorded for the real property.

4. The owner or owners of the real property or other person or entity, such as a property owners' or homeowners' association, if the person or entity has proper authority, records a declaration that has been executed by the authority and the director of water resources against the real property in the official records of the county where the real property is located and that:

(a) Contains the legal description of the real property that is substantially similar to the legal description of the real property included in the declaration recorded pursuant to subsection A, paragraph 2 of this section.

(b) Declares that the covenants, conditions and restrictions previously recorded pursuant to subsection A, paragraph 2 of this section are revoked.

5. The agreement recorded pursuant to subsection C of this section has been revoked by mutual agreement of the parties to that agreement and the water provider has recorded notice of the revocation in the official records of the county where the real property is located.

6. If the department of water resources has issued a certificate of assured water supply for the real property, the director of water resources has revoked the certificate pursuant to a written agreement for revocation entered into between the holder of the certificate and the director.END_STATUTE

Sec. 3. Section 45-1972, Arizona Revised Statutes, is amended to read:

START_STATUTE45-1972. Groundwater augmentation and conservation assistance fee; transfer to authority

A. Within sixty days after the authority is formed, the department shall transfer to the secretary-treasurer of the authority one-half of all unencumbered monies and the accrued interest on those monies that were collected in the active management area in which the authority is located during the prior year pursuant to section 45‑611, subsection C, paragraph 2.

B. Each year the director shall transfer an amount of not more less than two hundred thousand dollars $200,000 to the secretary-treasurer of the authority from the monies collected in that year in the active management area in which the authority is located pursuant to section 45‑611, subsection C, paragraphs 2 and 3. The director shall specify the amount from each funding source to be transferred.

C. The secretary-treasurer shall deposit the transferred monies in the general fund of the authority, and the authority may spend the monies to carry out the purposes of this chapter. END_STATUTE

Sec. 4. Title 45, chapter 11, article 4, Arizona Revised Statutes, is amended by adding section 45-1973.01, to read:

START_STATUTE45-1973.01. Annual contract assessment

A. On or before the third Monday of August of each year, the authority shall charge an annual contract assessment against each parcel of contract land that is subject to an annual contract assessment. This charge becomes a lien on the parcel and shall be collected in the same manner as an ad valorem tax. The assessments shall be calculated by the authority pursuant to this chapter and the applicable contract for the contract land that has been recorded against that land.

B. The authority shall promptly certify the assessments to the board of supervisors of the county in which the authority is established, and the board of supervisors at the time of levying general county taxes shall take the necessary steps for collection of contract land assessments against the parcels within that county.

C. The secretary-treasurer shall deposit the assessments in the general fund of the authority and the authority may spend the monies in the fund only for the purposes authorized by this chapter.

D. All provisions of the general revenue laws for the collection of taxes on real estate for county purposes apply to the collection of the contract land assessments imposed by this chapter, including all remedies of the revenue laws for collecting delinquent taxes and provisions relating to sales of real property for delinquent taxes. The exemptions applicable to ad valorem taxes do not apply to assessments charged pursuant to this section. END_STATUTE

Sec. 5. Section 48-901, Arizona Revised Statutes, is amended to read:

START_STATUTE48-901. Definitions

In this article, unless the context otherwise requires:

1. "Assessment" or "assessment roll" means a special assessment made under this article.

2. "Block" means a parcel of ground, regular or irregular, bounded by streets or by streets and district boundary lines.

3. "Chairman of the board" means the person designated to preside over meetings of the board of directors.

4. "Clerk" or "district clerk" means the clerk of the board of supervisors, who shall be the clerk under this article and in whose office shall be filed all papers directed or required to be filed with the clerk.

5. "Commercial farming" means the intensive cultivation of arable land by the raising of agricultural or horticultural products as a principal source of the owner's livelihood.

6. "Commercial stock raising" means the breeding, raising and care of domestic animals as a principal source of the owner's livelihood.

7. "Contractor" includes personal representatives or assignee of the contractor.

8. "Delinquency" means delinquency in the payment of an assessment.

9. "Engineer" or "district engineer" means a person designated or employed by the board of directors of a district to perform any or all of the engineering work authorized to be done by the district under this article.

10. "Improvement bond" means a bond issued under this article.

11. "Lighting plants" includes electric light plants, electric power plants, gas plants, distribution systems, poles, parts, pipes, conduits, wires, tanks, reservoirs, generators for gas or electricity, transmission lines, towers, lamps, transformers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete electric light, power and gas plant and distribution system placed on the streets improved, though extended beyond.

12. "Lot" includes any portion, piece, parcel or subdivision of land, but not property owned or controlled by any person as a railroad right of way.

13. "Owner" means the person in whom legal title appears by recorded deed, or the person in possession under claim or title, or the person exercising acts of ownership for himself or as the personal representative of the owner, including the boards of trustees of school districts and the boards of education of high school districts owning property within the proposed improvement district.

14. "Sewers" includes wastewater treatment facilities, tunnels, excavations, ditches, drains, conduits, channels, outlets, outfalls, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete sewer system for either sanitary or drainage purposes.

15. "Street" includes avenues, alleys, highways, lanes, crossings, intersections, courts, places and grounds opened or dedicated to public use and public ways.

16. "Street superintendent" or "superintendent" means a county employee designated by the board of supervisors to perform the duties of street superintendent for all the districts organized under this article in any county.

17. "Time of delinquency" means the time when assessments become delinquent.

18. "Treasurer" or "district treasurer" means the treasurer of the county in which a district is situated, who shall be the treasurer of the district.

19. "Unincorporated area" means any portion of a county not within the limits of an incorporated city or town, so situated that any of the improvements provided for in this article might reasonably or properly be made or constructed for the benefit of the inhabitants of the area under existing special assessment statutes if the area were situated within an incorporated city or town.

20. "Wastewater systems" means sewers and other wastewater treatment facilities.

21. "Water assets" MEANS water and water rights, including groundwater, surface water, treated wastewater, central Arizona project water, Colorado River water, stored water as defined in section 45-802.01, long-term storage credits as defined in section 45-802.01, grandfathered rights as defined in section 45-402, grandfathered right extinguishment credits, groundwater withdrawal permits and exchanged water.

21. 22. "Waterworks" means works for the storage or development of water for domestic uses, including drinking water treatment facilities, wells, pumping machinery, power plants, pipelines and all equipment necessary for those purposes.

22. 23. "Work" or "improvement" includes any of the improvements mentioned and authorized to be made in this article, including water assets, the acquisition, creation, construction, reconstruction and repair of all or any portion of any such improvement, and labor, services, expenses and material necessary or incidental thereto. END_STATUTE

Sec. 6. Section 48-909, Arizona Revised Statutes, is amended to read:

START_STATUTE48-909. Purposes for which public improvements may be undertaken; powers incidental to public improvements

A. When the public interest or convenience requires, the board of directors of an improvement district may order:

1. The whole or any portion, either in length or width, of one or more of the streets of the district graded or regraded, paved or repaved, landscaped or otherwise maintained, improved or reimproved.

2. The acquisition, construction, reconstruction or repair of any street, tunnel, subway, viaduct or conduit in, on, under or over which the district may have an easement or right‑of‑way therefor.

3. The construction or reconstruction of sidewalks, crosswalks, curbs, gutters, culverts, bridges, tunnels, siphons, manholes, steps, parkings and parkways.

4. The placement, replacement or repair of pipes, hydrants and appliances for fire protection.

5. The acquisition, construction, reconstruction, maintenance or repair of wastewater treatment facilities, sewers, ditches, drains, conduits, pipelines and channels for sanitary and drainage purposes, with outlets, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers, ditches, drains, conduits, channels and other appurtenances in, under, over or through any street or any land of the district or any right‑of-way granted or obtained for such a purpose, either within or without the district limits.

6. The acquisition, construction, reconstruction, maintenance or repair of waterworks, including drinking water treatment facilities, for the delivery of water for domestic purposes, and of wells, ditches, canals, channels, conduits, pipelines and siphons, together with the necessary or usual appurtenances for carrying storm water or water from irrigation ditches, watercourses, streams or springs into, through or out of the district in, under, over or through any street, or any land of the district or any right-of-way granted or obtained for such a purpose, either within or without the district limits. This section does not prohibit the board of directors of an improvement district from purchasing an existing domestic water delivery system within the district or outside the district or constructing an initial or improving an existing domestic water delivery system inside or outside the district.

7. The construction, reconstruction or repair of breakwater levees or walls, riverbank protection or replacement of riverbanks and supporting land. A district established for this purpose shall cooperate and coordinate its plans and activities with the county flood control district established in the county and any incorporated city or town in which the district is established.

8. The acquisition, construction, reconstruction or repair of lighting plants and poles, wire conduits, lamps, standards and other appliances for the purpose of lighting and beautifying streets or other public lands.

9. The construction, reconstruction or repair of any work incidental to or connected with any improvement.

10. The acquisition, in the name of the district, by gift, purchase or otherwise and the maintenance, repair, improvement or disposal of any real or personal property necessary or convenient for district operation for a community center, park or recreational area.

11. Pursuant to section 48‑902, the board of directors of an improvement district may contract for or in any other manner provide transportation services within the district.

12. The acquisition, creation, maintenance or pledge of water assets for the purpose of municipal, INDUSTRIAL, commercial or domestic development.

B. In addition to the powers specifically granted by or reasonably inferred from this article, an improvement district through its board of directors may:

1. Acquire by gift, purchase, condemnation or otherwise in the name of the district and own, control, manage and dispose of any real or personal property or interest in the property necessary or convenient for the construction, operation and maintenance of any of the improvements provided for by this article.

2. Join with any other improvement district, any city, town, governmental agency or Indian tribe, or any agency or instrumentality of an Indian tribe, or any person in the construction, operation or maintenance of any of the improvements hereby authorized.

3. Join with any other improvement district or any city, town, county or Indian tribe, or any agency or instrumentality of an Indian tribe, in improving streets running on or along the boundary of the district and levy assessments and issue bonds for the district's part of the cost of those improvements.

4. Sell, lease or otherwise dispose of any property of the district or interest in the property when the property is no longer required for the purposes of the district or the use of which may be permitted without interfering with the use thereof by the district.

5. Sell or otherwise dispose of any property or material acquired in the construction or operation of any improvements as a by-product or otherwise, and acquire rights‑of‑way for the disposal by condemnation or otherwise.

6. Accept from this state or the federal government, or any agency, department or instrumentality of either, grants for or in aid of the construction of any of the improvements provided for by this chapter.

7. Notwithstanding any other law, sell improvement bonds to the federal government, or any agency, department or instrumentality of the federal government, for the construction of any of the improvements provided by this chapter.

8. Enter into contracts with this state or the federal government, or any agency, department or instrumentality of either or both, for the construction or supervision of construction by the this state of Arizona or the federal government, or any agency, department or instrumentality of either or both, but reserving to the district the right to assess against the property benefited by the improvement, and located within the district, that portion of the cost of the improvement that does not qualify for aid under a state or federal grant.

9. Operate, maintain and repair the streets within the district and any improvements made pursuant to this chapter.

10. Do all things incidental to the exercise of the powers granted by this article.

C. A county improvement district formed for the purpose of purchasing an existing or constructing a new domestic water delivery system within the district or outside the district shall have the same authority and responsibility as an incorporated city or town pursuant to title 45 and chapters 22 and 28 of this title.

D. An improvement district that proposes to provide domestic water service within the certificated area of a public service corporation serving domestic water shall provide just compensation to the public service corporation pursuant to section 9‑516 for the facilities or certificated area taken. The right to compensation for a public service corporation from an improvement district shall not apply if no facilities of the public service corporation are actually acquired by the improvement district and either of the following conditions exist:

1. At the time the law providing for compensation became effective the certificated area for which compensation is sought is an area that was within the boundaries of an improvement district.

2. A certificate is issued to a public service corporation for any area that is within an improvement district at the time the certificate is issued.

E. If the county board of supervisors determines that the public interest or convenience so requires, an improvement district that is formed for the purposes of providing domestic water service pursuant to article 4 of this chapter may also provide domestic wastewater service. END_STATUTE

Sec. 7. Section 48-909.01, Arizona Revised Statutes, is amended to read:

START_STATUTE48-909.01. Wastewater treatment facility; waterworks; sewer collection system and nonpoint source projects; financial assistance loan repayment agreements; definitions

A. Notwithstanding any other law, a county improvement district, including a domestic wastewater improvement district, may construct or improve a wastewater treatment facility, sewer collection system, waterworks, including a drinking water treatment facility, or nonpoint source project or undertake water supply development or any combination of those projects with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona pursuant to title 49, chapter 8.

B. To repay financial assistance from the water infrastructure finance authority of Arizona, a county improvement district, including a domestic wastewater improvement district, may enter into a financial assistance loan repayment agreement with the authority to repay any financial assistance provided by the water infrastructure finance authority of Arizona. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be pledged to repay long‑term indebtedness. A financial assistance loan repayment agreement may be secured either by assessments or by a pledge of revenues of the district or any combination of those sources. If the financial assistance loan repayment agreement is secured in whole or in part by assessments levied pursuant to this article, the financial assistance loan repayment agreement shall be treated as a series of bonds to the extent that they are secured by those assessments and the board of directors of the district has all powers and duties to collect assessment installments and enforce delinquent assessments through sale and eventual issuance of deeds in the same manner as if the assessments were evidenced by bonds.

C. The board of directors of the district shall obtain approval for the financial assistance loan repayment agreement in the same manner provided by law for approving and issuing bonds or other long‑term indebtedness that is secured by those assessments or revenues or a combination of assessments and revenues that are to be pledged to repay the loan.

D. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to constructing a wastewater treatment facility, sewer collection system, waterworks, including a drinking water treatment facility, or nonpoint source project or water supply development or any combination of those projects and repaying the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for paying interest on the unpaid principal balance of the agreement at the rates established in the agreement. The agreement may also provide for paying the district's proportionate share of the expenses of administering the clean water revolving fund established by section 49‑1221 and may provide that the district pay financing and loan administration fees approved by the water infrastructure authority of Arizona. These costs may be included in the assessment and revenue amounts pledged to repay the financial assistance loan repayment agreement. Districts are bound by and shall fully perform the financial assistance loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. The water infrastructure finance authority of Arizona shall not require that payment of a financial assistance loan repayment agreement be made from other than those sources permitted in subsection B of this section. The financial assistance loan repayment agreement may also include covenants concerning the operation of the system, the setting of rates and provisions for the appointment of a receiver to take charge of and operate a sewer collection system, a waterworks, including a drinking water treatment facility, and a wastewater treatment system if the financial assistance loan repayment agreement is not paid in a timely manner and, in the sole discretion of the water infrastructure finance authority of Arizona, if the district will not be able to cure the default.

F. A district may employ or contract for the services of attorneys, accountants, financial consultants and other experts in their fields as deemed necessary to perform services with respect to the financial assistance loan repayment agreement. These costs are incidental expenses and shall be included in any assessments.

G. This section is supplemental and alternative to any other law under which a district may borrow monies or issue bonds. This section is not the exclusive authorization to enter into loan agreements with the water infrastructure finance authority of Arizona.

H. A district may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved pursuant to subsection C of this section less the amount that the district is obligated to repay to the water infrastructure finance authority of Arizona pursuant to a financial assistance loan repayment agreement.

I. For the purposes of this section: ,

1. "Nonpoint source project" has the same meaning prescribed in section 49‑1201.

2. "Water supply development" has the same meaning prescribed in section 49-1201. END_STATUTE

Sec. 8. Section 48-1014, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1014. Powers and duties of an elected or appointed board of directors

A. The board of directors of a domestic water improvement district or domestic wastewater improvement district elected or appointed pursuant to this article shall have all the powers and duties of the board of supervisors sitting as the board of directors of a county improvement district formed for the purposes prescribed in section 48‑909, subsection A, paragraph 1, 2, 3, 4, 5, or 6 or 12, including the related powers and duties prescribed in section 48‑909, subsection B and section 48‑910, and that are not in conflict with this article. A single district may be formed for or converted to a combination of water and wastewater purposes.

B. Additions to and alterations of the district shall be made as follows:

1. A petition addressed to the district governing board requesting the addition or alteration may be filed with the clerk of the governing body, if signed by a majority of the persons owning property and by the owners of fifty-one per cent percent or more of the assessed valuation of the property within the limits of the proposed addition or alteration.

2. A petition with the required number of signatures shall not be declared void on account of any alleged defect, but the governing body shall allow the petition to be amended in form and substance to conform to the requirements of this article. One or more similar petitions, or copies of the same petition with additional signatures, for the addition to or alteration of the improvement district may be filed before the time of the hearing on the first petition, and shall be considered as though filed with the first petition. The petition shall be presumed to contain the signatures of the persons whose signatures appear on the petition, unless the contrary is proved.

3. The petition shall set forth:

(a) The name of the improvement district to which the addition or alteration is proposed.

(b) The necessity for the proposed addition or alteration.

(c) That the public convenience, necessity or welfare will be promoted by the addition or alteration of the district and that the property to be included in the district will be benefited.

(d) The boundaries of the proposed addition or alteration.

4. Each copy of the petition shall be verified by one of the petitioners and shall be accompanied by a plat or sketch indicating the approximate area and boundaries of the district.

5. On receipt of a petition for an addition or alteration of a district, the governing body shall set a date for a hearing on the petition not later than forty days after presentation of the petition. At the hearing all interested property owners may appear and be heard on any matter relating to the addition to or alteration of the district. Any person wishing to object to the addition or alteration may file, before the date set for the hearing, the person's objections with the clerk of the governing body.

6. Notice announcing the hearing and stating the boundaries of the proposed addition or alteration shall be published twice in a newspaper of general circulation in the county within which the district is located. The publications shall be one week apart, and the first publication shall be not less than ten days before the date of the hearing. The notice shall also be mailed by first class mail at least twenty days before the hearing to the property owners within the area of the proposed addition or alteration according to the names and addresses that appear on the most recent property tax assessment roll.

7. At the hearing, if it appears after consideration of all objections that the petition is signed by the requisite number of property owners, and that the public convenience, necessity or welfare will be promoted by the addition to or alteration of the district, the governing body by formal order shall declare its findings and order the addition to or alteration of the district.

8. If the governing board finds that the public convenience, necessity or welfare will not be promoted by the addition to or alteration of the district, the governing body by formal order shall declare its findings.

C. Notwithstanding subsection B of this section, any property owner whose land is within a county that contains an improvement district and whose land is adjacent to the boundaries of the improvement district may request in writing that the governing body of the district amend the district boundaries to include that property owner's land. If the governing body determines that the inclusion of that property will benefit the district and the property owner, the boundary change may be made by order of the governing body and is final on the recording of the governing body's order that includes a legal description of the property that is added to the district. A petition is not required for an amendment to an improvement district's boundaries made pursuant to this subsection.

D. On approval of any boundary change of the district, the district board may order the successful petitioners or requesters to pay all of the costs of the boundary change. END_STATUTE

Sec. 9. Section 48-1019, Arizona Revised Statutes, is amended to read:

START_STATUTE48-1019. Drinking water facility and wastewater facility projects; financial assistance loan repayment agreements; definitions

A. Notwithstanding any other law, a domestic water or wastewater improvement district may construct, acquire, or improve a drinking water, wastewater or water reclamation facility or undertake water supply development with monies borrowed from or financial assistance, including forgivable principal, provided by the water infrastructure finance authority of Arizona pursuant to title 49, chapter 8.

B. To repay financial assistance from the authority a district may enter into a financial assistance loan repayment agreement with the authority. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long‑term obligations.

C. For a district with a population of more than fifty thousand persons, the board of directors of the district shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors voting at a regular or special election in the district. An election is not required if voter approval has previously been obtained for substantially the same project with another funding source. For a district with a population of fifty thousand persons or less, the board may enter into the financial assistance loan repayment agreement on the approval of the board and an election is not required.

D. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to water supply development or to the construction, acquisition or improvement of a drinking water, wastewater or water reclamation facility and repayment of the loan as the authority deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of the agreement at the rates established in the agreement. The agreement may also provide for payment of the domestic water or wastewater improvement district's proportionate share of the expenses of administering the drinking water revolving fund established by sections 49-1221 and 49‑1241 and may provide that the domestic water or wastewater improvement district pay financing and loan administration fees approved by the authority. These costs may be included in the assessment or revenue amounts pledged to repay the loan. Districts are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the authority. The domestic water improvement district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

E. A financial assistance loan repayment agreement under this section does not create a debt of the domestic water or wastewater improvement district, and the authority shall not require that payment of a loan agreement be made from other than those sources permitted in subsection B of this section.

F. A domestic water or wastewater improvement district may employ or contract for the services of attorneys, accountants, financial consultants and other experts in their field as deemed necessary to perform services with respect to the financial assistance loan repayment agreement.

G. This section is supplemental and alternative to any other law under which a district may borrow money or issue bonds. This section shall be construed as constitutes the exclusive authorization to enter into loan agreements with the authority.

H. A district may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved pursuant to subsection C of this section less the amount that the district is obligated to repay to the water infrastructure finance authority pursuant to a financial assistance loan repayment agreement.

I. For the purposes of this section:

1. "Authority" means the water infrastructure finance authority of Arizona.

2. "Water supply development" has the same meaning prescribed in section 49-1201.END_STATUTE