11-671. Financing wastewater treatment facilities and nonpoint source projects; financial assistance loan repayment agreements; financial assistance; definitions

A. Notwithstanding any other law, a county that is authorized to operate a sewage system pursuant to section 11-264 or that identifies and remediates a cesspool pursuant to subsection G of this section may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona.

B. To repay financial assistance from the water infrastructure finance authority of Arizona, a county 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. If revenue from a property tax assessment is the designated source of repayment under the agreement, the property tax assessed and levied is a secondary property tax levy for the purposes of article IX, Constitution of Arizona.

C. The county board of supervisors shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors voting at a regular or special general election in the county, except that if revenue from a secondary property tax levy is the designated source of repayment or if the project is constructed with an improvement district, the question shall be submitted to the qualified electors at an election held on the first Tuesday following the first Monday in November. Otherwise, an election is not required if voter approval has previously been obtained for substantially the same project with another funding source. If a majority of the qualified electors voting on the question:

1. Approves, the board of supervisors may execute, deliver and perform the financial assistance loan repayment agreement.

2. Disapproves, the board of supervisors shall not execute a financial assistance loan repayment agreement.

D. Payments made pursuant to a financial assistance loan repayment agreement are not subject to section 42-17106.

E. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the county's proportionate share of the expenses of administering the clean water revolving fund established by section 49-1221 and may provide that the county pay financing and loan administration fees approved by the water infrastructure finance authority of Arizona. These costs may be included in the levy or assessment amounts pledged to repay the financial assistance.  Counties 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 county shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan.

F. A financial assistance loan repayment agreement under this section does not create a debt of the county, and the authority shall not require that payment of a financial assistance loan agreement be made from other than those sources allowed in subsection B of this section.

G. A county may apply for and receive financial assistance, including forgivable principal, from the water infrastructure finance authority of Arizona for the remediation, closure or replacement of cesspools that present a demonstrated risk to surface water, groundwater or public health. The water infrastructure finance authority of Arizona may award financial assistance, including forgivable principal, using monies from the clean water revolving fund established by section 49-1221 or the drinking water revolving fund established by section 49-1241. Financial assistance, including forgivable principal, received pursuant to this subsection may be used only for projects that eliminate existing cesspools and replace the existing cesspool with an on-site wastewater system that is approved by the department of environmental quality or that has a connection to a wastewater treatment facility. A county that receives financial assistance, including forgivable principal, pursuant to this subsection shall prioritize the remediation, closure or replacement of cesspools that are located within areas of known groundwater vulnerability, that are near surface waters or that are in communities with low-to-moderate income households. A county may establish income-based eligibility criteria for owner-occupied properties but may not apply means testing to the remediation of abandoned or uninhabitable properties. A county shall coordinate with the department of environmental quality to ensure that each project that has received financial assistance, including forgivable principal, pursuant to this subsection is consistent with the county's water quality management plan or the department of environment quality's nonpoint source management plan developed pursuant to section 319 of the clean water act.  A county that receives financial assistance, including forgivable principal, pursuant to this subsection is not required to obtain voter approval to accept the financial assistance, including forgivable principal.

H. A county may employ 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.

I. This section is supplemental and alternative to any other law under which a county may borrow monies or issue bonds. This section is not the exclusive authorization to enter into loan agreements with the authority.

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

K. For the purposes of this section:

1. "Clean water act" has the same meaning prescribed in section 49-1201.

2. "Nonpoint source project" has the same meaning prescribed in section 49-1201.