Assigned to NRRA                                                                                                                          FOR COMMITTEE

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FACT SHEET FOR H.B. 2428

water service providers; corporate dissolution

Purpose

            Authorizes the Arizona Corporation Commission (ACC) to transfer corporate assets to a domestic water or wastewater improvement district or a municipality from a nonprofit corporation that provided domestic water or wastewater service and has been administratively dissolved by the ACC for at least three years.

Background

            The ACC was established by Article 15 of the Arizona Constitution. The ACC’s mission is to exercise exclusive state regulatory authority over public utilities in the public interest, to grant corporate status and maintain public records, to ensure the integrity of the securities marketplace and to foster the safe operations of railroads and gas pipelines in Arizona.

            Arizona statute provides the ACC with regulatory authority over nonprofit public service corporations and prescribes procedures for administrative dissolution that the ACC must follow if the ACC determines that dissolution is warranted. According to statute, circumstances that warrant administrative dissolution include failure to follow procedural reporting requirements, improper record maintenance and failure to file corporate information. A corporation that has been administratively dissolved continues its corporate existence but may not carry on any activities except those necessary to wind up and liquidate its affairs.

            Domestic water improvement districts and domestic wastewater improvement districts (DWIDs) are county improvement districts (CIDs) formed for the purpose of constructing, operating, improving or purchasing a domestic water delivery system or domestic wastewater treatment facility within the proposed district. A CID is a special taxing district established by a county board of supervisors (Board) to construct and operate wastewater facilities and other local improvements through special assessments. Statute provides the Board governing authority to create, divide and supervise improvement districts.

            There is no anticipated impact to the state General Fund associated with this measure.

Provisions

1. Authorizes the ACC to transfer corporate assets to a DWID or municipality from a nonprofit corporation that provided domestic water or wastewater service and has been administratively dissolved for at least three years.

2. Requires a written request to the ACC from a county board of supervisors or a municipality to transfer assets of an administratively dissolved nonprofit corporation.

3. Requires the ACC to notify interested parties regarding a transfer of assets and provide opportunity for objection and a hearing prior to the transfer.

4. Prohibits an administratively dissolved nonprofit corporation that provided domestic water or wastewater service and whose assets have been transferred to a DWID or municipality from applying for corporate reinstatement.

5. Makes a conforming change.

6. Becomes effective on the general effective date.

House Action

NRA               2/6/06     DP     8-0-0-2

3^rd Read           3/2/06               56-0-4-0

Prepared by Senate Research

March 13, 2006

FB/DA/jas