ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

HB 2671: water supply development fund; appropriation

S/E: appropriation; water supply development fund

Sponsor: Representative Griffin, LD 14

Committee on Natural Resources, Energy & Water

Summary of the Strike-Everything Amendment to HB2671

Overview

Appropriates $50,000,000 from the state General Fund to the Water Supply Development Revolving Fund (Fund) in FY 2021 and makes several changes to the Fund's statutes.

History

The Fund is administered by the Arizona Finance Authority Board and provides financial assistance to water providers for constructing water supply projects and obtaining additional water supplies to meet long-term water demands (A.R.S. § 49-1271(C) and A.R.S. § 49-1272). The Fund consists of monies received from water supply development bonds, legislative appropriations, U.S. government monies for water supply development, monies from water providers that have taken loans and investment income (A.R.S. § 49-1271(A)). Monies can be used for:

1) Making loans to water providers for water supply development purposes;

2) Making loans or grants to water providers to plan or design water supply development projects;

3) Purchasing or refinancing debt obligations of water providers at or below market rate if the obligation was for water supply development;

4) Providing financial assistance to water providers with bonding authority to purchase insurance for local bond obligations incurred for water supply development;

5) Paying the Fund's administration costs; and

6) Providing linked deposit guarantees through third party lenders by depositing monies with the lender provided the lender makes a loan on the terms and rate of return approved by the committee.

However, Fund monies cannot provide financial assistance to a water provider (other than an Indian tribe) unless one of the following apply:

1) The county board of supervisors where the water provider is located has adopted a regulation requiring that subdivided lands have an adequate water supply;

2) The municipality where the water provider is located has enacted an ordinance requiring subdivided lands to have an adequate water supply;

3) The water provider is in an active management area (AMA); or

4) The water provider is outside of an AMA and either:

a) Is designated as having an adequate water supply; or

b) Will use the financial assistance for a water supply development project and the Arizona Department of Water Resources has determined that there is an adequate water supply for all subdivided land that will be served by the project (A.R.S. § 49-1273).

Provisions

Qualifications and Uses of Fund Monies

1. Broadens the definition of water provider by:

a) Including all municipal water delivery systems.

b) Adding a public water system and a county with a population of less than 300,000 persons. (Sec. 1)

2. Expands the definition of water supply development by including planning, designing, building or developing facilities and adding structures that actively or passively recharge stormwater. (Sec. 1)

3. Increases the cap on the amount of a single Fund grant to water providers for planning or designing water supply development projects from $100,000 to $250,000. (Sec. 2)

4. Repeals the requirements that the Fund only provide financial assistance to a water provider, other than an Indian tribe, if:

a) The county board of supervisors where the water provider is located has adopted a regulation requiring that subdivided lands have an adequate water supply;

b) The municipality where the water provider is located has enacted an ordinance requiring subdivided lands to have an adequate water supply; and

c) The water provider is outside of an AMA and either:

i. Is designated as having an adequate water supply; or

ii. Will use the financial assistance for a water supply development project and the Arizona Department of Water Resources has determined that there is an adequate water supply for all subdivided land that will be served by the project.

Appropriation (Sec. 3)

5. Appropriates $50,000,000 from the state General Fund to the Fund in FY 2021.

6. Exempts the appropriation from lapsing.

Miscellaneous (Sec. 1 and 2)

7. Makes technical and conforming changes.

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11. Initials PAB Natural Resources, Energy & Water

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