SB1519 - 551R

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

Section 1. Title 49, Arizona Revised Statutes, is amended by adding chapter 11, to read:

CHAPTER 11

ENERGY INFRASTRUCTURE FINANCE

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE49-1501. Definitions

For the purposes of THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:

1. "AFFECTED ELECTRIC ENERGY PROVIDER" MEANS a public service of company, ELECTRIC DISTRIBUTION COMPANY, ELECTRIC COOPERATIVE OR MUNICIPAL ELECTRIC COMPANY SERVING ENERGY CUSTOMERS IN THE STATE.

2. "AFFECTED ENERGY PROVIDER" MEANS AN AFFECTED ELECTRIC ENERGY PROVIDER OR AFFECTED NATURAL GAS DISTRIBUTION COMPANY.

3. "AFFECTED NATURAL GAS DISTRIBUTION COMPANY" MEANS A NATURAL GAS DISTRIBUTION COMPANY SERVING ENERGY CUSTOMERS IN this state.

4. "AGENCY" MEANS ANY STATE AGENCY, AUTHORITY OR ANY POLITICAL SUBDIVISION OF THE STATE OR LOCAL GOVERNMENT, INCLUDING A COUNTY, CITY, TOWN, LOCAL SCHOOL DISTRICT, INSTITUTION OF HIGHER EDUCATION AND ANY STATE-SUPPORTED INSTITUTION.

5. "ENERGY EFFICIENCY":

(a) MEANS A DECREASE IN CONSUMPTION OF ELECTRIC ENERGY, NATURAL GAS OR OTHER ENERGY SOURCE ON A PER UNIT OF PRODUCTION BASIS, WHICH DOES NOT CAUSE A REDUCTION IN THE QUALITY OR LEVEL OF SERVICE PROVIDED TO THE ENERGY CUSTOMER, ACHIEVED THROUGH MEASURES OR PROGRAMS THAT TARGET CONSUMER BEHAVIOR OR that REPLACE OR IMPROVE THE PERFORMANCE OF EQUIPMENT, PROCESSES OR DEVICES.

(b) Includes:

(i) THE REDUCTION IN TRANSMISSION AND DISTRIBUTION LOSSES ASSOCIATED WITH THE DESIGN AND OPERATION OF THE ELECTRICAL SYSTEM.

(ii) A REDUCTION IN VEHICLE FUEL, ENERGY OR ELECTRICITY CONSUMPTION FOR AUTOMOBILES, TRUCKS, BUSES OR OTHER VEHICLES WITHIN ANY AGENCY OR BUSINESS's FLEETS.

6. "WATER EFFICIENCY":

(a) MEANS A DECREASE IN CONSUMPTION OF WATER ON A PER UNIT PRODUCTION BASIS, WHICH DOES NOT CAUSE A REDUCTION IN THE QUALITY Or LEVEL OF SERVICE PROVIDED TO THE WATER CUSTOMER, ACHIEVED THROUGH MEASURES OR PROGRAMS THAT TARGET CONSUMER BEHAVIOR OR that REPLACE OR IMPROVE THE PERFORMANCE OF EQUIPMENT, PROCESSES OR DEVICES.

(b) Includes REDUCTION IN DISTRIBUTION LOSSES ASSOCIATED WITH THE DESIGN AND OPERATION OF THE WATER SYSTEM.

7. "OPERATING AND MAINTENANCE COST SAVINGS” MEANS A DECREASE IN OTHER COSTS ASSOCIATED WITH operating AND MAINTaining BUILDINGS, FACILITIES AND VEHICLE FLEETS, WHICH DOes NOT CAUSE A REDUCTION IN THE QUALITY OF SERVICE WITHIN THOSE BUILDINGS, FACILITIES OR VEHICLE FLEETS.

8. "SAVINGS" MEANS REDUCTIONS IN VEHICLE FUELS, ELECTRICITY CONSUMPTION AND NATURAL GAS CONSUMPTION, AS WELL AS ELECTRICITY PEAK-DEMAND RESPONSE PROGRAMS RESULTING IN REDUCED ELECTRICITY CONSUMPTION OR MEASURABLE EFFICIENCY GAINS FROM THE TRANSITION TO LOWER-EMISSION FUELS, AS DETERMINED BY THE DIRECTOR THROUGH rules PURSUANT TO section 49-1507, subsection I. END_STATUTE

START_STATUTE49-1502. Infrastructure upgrade finance authority; oversight board

A. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY IS ESTABLISHED AS A NONPROFIT ENTITY TO DEVELOP AND COORDINATE PROGRAMS FOR ENERGY END-USERS IN THIS STATE FOR THE PURPOSE OF PROMOTING MORE COST-EFFECTIVE, PRODUCTIVE AND PRUDENT USES OF ENERGY IN THIS STATE.

B. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL DESIGN AND DELIVER COMPREHENSIVE END-USER ENERGY AND WATER EFFICIENCY SAVINGS, including REDUCED OPERATING AND MAINTENANCE COST Savings AND SAVINGS FROM CUSTOMER-SITED RENEWABLE ENERGY SERvices for use by STATE AGENCIES, HOUSEHOLDS AND BUSINESSES. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY may not BE AFFILIATED WITH ANY OF THE STATE'S ELECTRIC, GAS OR WATER UTILITIES, whether PUBLIC OR PRIVATE.

C. THE BUSINESS AND AFFAIRS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL BE MANAGED BY OR UNDER THE DIRECTION OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD. THE BOARD SHALL CONSIST OF thirteen MEMBERS AND SHALL INCLUDE THE DIRECTOR OF THE DEPARTMENT OF ENVIRONMENTAL QUALITY OR THE DIRECTOR'S DESIGNEE. THE BOARD SHALL INCLUDE REPRESENTATION FROM BOTH RURAL AND URBAN AREAS OF THis STATE. SEVEN MEMBERS OF THE BOARD SHALL BE APPOINTED BY AND SERVE AT THE PLEASURE OF THE GOVERNOR, AND SHALL INCLUDE REPRESENTATIVES FROM THE FOLLOWING:

1. THE NONPROFIT ENVIRONMENTAL COMMUNITY.

2. THE NONPROFIT ENERGY COMMUNITY.

3. THE NONPROFIT COMMUNITY SERVICING THE LOW AND MODERATE-INCOME COMMUNITY.

4. THE FINANCING OR ACCOUNTING COMMUNITY.

5. THE BUSINESS COMMUNITY.

6. THE LABOR COMMUNITY.

7. THE EDUCATION COMMUNITY.

D. ONE MEMBER OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD SHALL BE APPOINTED BY AND SERVE AT THE PLEASURE OF THE PRESIDENT OF THE SENATE. ONE MEMBER SHALL BE APPOINTED BY AND SERVE AT THE PLEASURE OF THE SPEAKER OF THE HOUSE OF REPRESENTATIVES. TWO MEMBERS SHALL BE APPOINTED BY AND SERVE AT THE PLEASURE OF THE LEADER OF THE MINORITY PARTY IN EACH CHAMBER OF THE LEGISLATURE. THE BOARD SHALL ELECT BY A MAJORITY vOTE ONE OF ITS MEMBERS TO SERVE AS A CHAIRPERSON. THE DIRECTOR OR THE DIRECTOR'S DESIGNEE SHALL SERVE ON THE BOARD IN AN advisory NONVOTING CAPACITY and is not counted to determine the presence of a quorum. BOARD MEMBERS SHALL SERVE STAGGERED TERMS OF four YEARS. THE GOVERNOR MAY APPOINT MEMBERS FOR TERMS OF FEWER THAN FOUR YEARS TO ENSURE THAT TERMS ARE STAGGERED. BOARD MEMBERS MAY BE REMOVED AT ANY TIME BY THE OFFICIAL WHO APPOINTED THE BOARD MEMBER FOR GROSS INEFFICIENCY, MALFEASANCE, MISFEASANCE OR NONFEASANCE IN OFFICE. AN APPOINTEE MAY BE DEEMED TO HAVE RESIGNED the board member's POSITION IF the member is ABSENT FROM three CONSECUTIVE BOARD MEETINGS WITHOUT GOOD CAUSE.

E. ROUTINE ADMINISTRATION OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL BE MANAGED BY AN EXECUTIVE DIRECTOR SELECTED BY THE BOARD THROUGH AN OPEN AND COMPETITIVE SELECTION PROCESS.

F. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD SHALL BE GOVERNED BY AND SUBJECT TO ALL of this state's PUBLIC RECORDS LAWS.

G. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD SHALL INCLUDE IN ITS BYLAWS A PROVISION PERTAINING TO CONFLICTS OF INTEREST AND BOARD MEMBERS SHALL BE REQUIRED TO SIGN CONFLICT OF INTEREST STATEMENTS.

H. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD MAY, FROM TIME TO TIME, APPOINT ADVISORY COMMITTEES. AN ADVISORY COMMITTEE MAY INCLUDE REPRESENTATIVES OF ORGANIZATIONS that REPRESENT LOW AND MODERATE-INCOME ENERGY CONSUMERS, LOW AND MODERATE-INCOME HOUSING CONSUMERS, CIVIC ORGANIZATIONS, ENVIRONMENTAL ORGANIZATIONS, THE ENERGY INDUSTRY, THE ENERGY EFFICIENCY AND ENERGY CONSERVATION COMMUNITY, THE RENEWABLE ENERGY COMMUNITY, MARKETING AND PUBLIC RELATIONS, SMALL BUSINESS, AGRICULTURE, ACCOUNTING, BUSINESS MANAGEMENT, BANKING, FINANCE, NONPROFIT COMMUNITIES, THE GENERAL PUBLIC AND THE ACADEMIC COMMUNITY. THE BOARD SHALL DECIDE THE NUMBER OF ADVISORY COMMITTEE MEMBERS, INCLUDING whether any of the members will serve in a nonvoting capacity.

I. ADVISORY COMMITTEES MAY PROVIDE ADVICE TO THE BOARD ON ISSUES OF PUBLIC POLICY AND PUBLIC EDUCATION, WHICH MAY ENHANCE THE PERFORMANCE AND QUALITY OF SERVICE OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY. A CANDIDATE FOR AN ADVISORY COMMITTEE SHALL REQUIRE A TWO-THIRDS VOTE OF BOARD MEMBERS IN ORDER TO SERVE. CRITERIA FOR THE ADVISORY COMMITTEE MEMBERS SHALL INCLUDE PROFESSIONAL EXPERIENCE, COMMUNITY SERVICE, REPUTATION, SIGNIFICANCE TO this state And DIVERSIFIED REPRESENTATION OF THis state's communities AND this state's GEOGRAPHICAL areas. NOMINATIONS FOR THE ADVISORY COMMITTEE MAY BE SUBMITTED BY BOARD MEMBERS AND from PUBLIC SOLICITATION.

J. BOARD MEMBERS may not be compensated.

K. A BOARD MEMBER may not RECEIVE FINANCIAL GAIN FROM SERVICE ON THE BOARD. A bOARD MEMBER may NOT BE EMPLOYED BY ANY ORGANIZATION DIRECTLY OR INDIRECTLY AffiliATED WITH THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OR ITS CONTRACTORS FOR A PERIOD OF NOT LESS THAN TWO YEARS AFTER THE END OF THE board member's SERVICE ON THE BOARD.

L. THE BOARD SHALL ADOPT BYLAWS on or before SEPTEMBER 30, 2022, TO GOVERN the board and its proceedings.

M. THE BOARD has THE FOLLOWING RESPONSIBILITIES, AMONG OTHERS AS allowED BY LAW:

1. To rEVIEW AND APPROVE THE CONTRACT TERM AND PERFORMANCE TARGETS RECOMMENDED BY THE EXECUTIVE DIRECTOR.

2. To rEVIEW AND APPROVE ANY PROPOSED MODIFICATIONS TO INFRASTRUCTURE UPGRADE FINANCE AUTHORITY PERFORMANCE TARGETS OR PROGRAM DESIGNS. END_STATUTE

START_STATUTE49-1503. Infrastructure upgrade finance authority executive director; responsibilities

A. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY EXECUTIVE DIRECTOR IS RESPONSIBLE FOR THE DAY-TO-DAY FUNCTIONS AND RESPONSIBILITIES OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY. THE EXECUTIVE DIRECTOR'S CHIEF RESPONSIBILITIES INCLUDE OVERSIGHT OF PROGRAM MANAGEMENT AND SETTING AND ensuring COMPLIANCE WITH APPROPRIATE PERFORMANCE AND BUDGETARY TARGETS.

B. THE EXECUTIVE DIRECTOR SHALL DEVELOP A COMPREHENSIVE Series OF PROGRAM DESIGNS. EACH PROGRAM DESIGN MUST SPECIFY, AT a MINIMUM, PROGRAM GOALS, PERFORMANCE TARGETS, AN ESTIMATED BUDGET, AN IMPLEMENTATION STRATEGY AND AN EVALUATION STRATEGY. THE EXECUTIVE DIRECTOR IS NOT REQUIRED TO DESIGN OR INITIATE ALL PROGRAMS AT ONCE, BUT programs MUST DEMONSTRATE HOW EACH PROGRAM FITS WITHIN THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S OVERALL STRATEGY TO MEET THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S LONG-TERM PERFORMANCE TARGETS.

C. THE EXECUTIVE DIRECTOR has THE FOLLOWING RESPONSIBILITIES THROUGH PROGRAM DESIGNS, requests for proposals AND PROGRAM IMPLEMENTATION:

1. TO BE RESPONSIVE TO CUSTOMERS AND MARKET FORCES IN IMPLEMENTING AND REDESIGNING PROGRAMS.

2. TO DESIGN A PORTFOLIO OF PROGRAMS TO ALLOW ALL ENERGY END-USERS, REGARDLESS OF ELECTRICITY OR GAS RETAIL PROVIDERS, AND REGARDLESS OF MARKET SEGMENT OR END-USE FUEL, TO PARTICIPATE IN INFRASTRUCTURE UPGRADE FINANCE AUTHORITY PROGRAMS.

3. TO PROMOTE PROGRAM INITIATIVES AND MARKET STRATEGIES THAT ADDRESS THE NEEDS OF PERSONS OR BUSINESSES FACING THE MOST SIGNIFICANT BARRIERS TO PARTICIPATION.

4. TO PROMOTE COORDINATED PROGRAM DELIVERY, INCLUDING COORDINATION WITH LOW-INCOME PROGRAMS, OTHER EFFICIENCY PROGRAMS AND UTILITY PROGRAMS.

5. TO COORDINATE WITH RELEVANT REGIONAL AND NATIONAL ENERGY EFFORTS AND MARKETS, INCLUDING MARKETS FOR POLLUTION EMISSIONS OFFSETS AND CREDITS AND RENEWABLE ENERGY CREDITS.

6. TO CONSIDER INNOVATIVE APPROACHES TO DELIVERING SUSTAINABLE ENERGY, WATER AND OTHER SERVICES, INCLUDING STRATEGIES TO ENCOURAGE THIRD-PARTY FINANCING AND LEVERAGED CUSTOMER CONTRIBUTIONS TO THE COST OF PROGRAM MEASURES, CONSISTENT WITH PRINCIPLES OF SOUND PROGRAM DESIGN.

7. TO OFFER ONE-STOP SHOPPING AND BE THE POINT-OF-CONTACT FOR PRUDENT AND COST-EFFECTIVE ENERGY, WATER AND OTHER OPERATING AND MAINTENANCE SERVICES IN THE STATE.

8. TO CREATE A COMPREHENSIVE WEBSITE THAT PROVIDES EASY ACCESS TO INFRASTRUCTURE UPGRADE FINANCE AUTHORITY PROGRAMS ELECTRONICALLY.

9. TO EMPHASIZE LOST OPPORTUNITY MARKETS, WHICH ARE PRUDENT ENERGY, WATER AND OTHER OPERATING MEASURES THAT CAN ONLY BE COST-EFFECTIVELY CAPTURED AT PARTICULAR TIMES, SUCH AS DURING NEW CONSTRUCTION OR EXTENSIVE REMODELING.

10. TO EMPHASIZE MARKET STRATEGIES TO DELIVER SERVICES. END_STATUTE

START_STATUTE49-1504. Administration of contracts; rules; oversight and reporting

A. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL PROPOSE AND ADOPT RULES TO GUIDE THE BIDDING PROCESS AND CRITERIA TO GUIDE BID SELECTION. THE requests for proposals SHALL SPECIFY A REASONABLE CONTRACT TERM.

B. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL DEVELOP A three TO five-YEAR STRATEGIC PLAN WITH INPUT FROM BOARD MEMBERS, STAKEHOLDER GROUPS ACROSS THis STATE AND THE PUBLIC AT LARGE. THE STRATEGIC PLAN SHALL BE MADE AVAILABLE TO THE PUBLIC ON THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S WEBSITE. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S STRATEGIC PLAN SHALL INCLUDE AN EDUCATIONAL COMPONENT FOR THE GENERAL PUBLIC WITH A CONTINUED FOCUS ON RESIDENTIAL ENERGY EFFICIENCY PROJECTS.

C. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL PUBLISH A COMPREHENSIVE ANNUAL REPORT that SHALL BE SUBMITTED TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE of representatives and a copy provided to the secretary of state. THE REPORT SHALL BE MADE AVAILABLE TO THE PUBLIC ON THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S WEBSITE.

D. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL HAVE CERTIFIED FINANCIAL STATEMENTS PREPARED AT THE END OF EACH FISCAL YEAR AND MAKE the statements AVAILABLE TO THE PUBLIC ON THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY'S WEBSITE.END_STATUTE

START_STATUTE49-1505. Funding; bonds; bond anticipation notes

A. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY ISSUE BONDS FOR ANY CORPORATE PURPOSE AND ALL SUCH BONDS, NOTES, BOND ANTICIPATION NOTES OR OTHER OBLIGATIONS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY ISSUED PURSUANT TO THIS SECTION SHALL BE AND ARE HEREBY DECLARED TO BE NEGOTIABLE FOR ALL PURPOSES NOTWITHSTANDING THEIR PAYMENT FROM A LIMITED SOURCE AND WITHOUT REGARD TO ANY OTHER LAWS. IN ANTICIPATION OF THE SALE OF SUCH BONDS, THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY ISSUE NEGOTIABLE BOND ANTICIPATION NOTES AND MAY RENEW negotiable bond anticipation notes FROM TIME TO TIME, BUT THE MAXIMUM MATURITY OF ANY SUCH NOTE, INCLUDING RENEWALS notes, SHALL NOT be more than FIVE YEARS after THE DATE OF ISSUE OF THE ORIGINAL NOTE. SUCH NOTES SHALL BE PAID FROM ANY REVENUES OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY AVAILABLE THEREFOR AND NOT OTHERWISE PLEDGED, OR FROM THE PROCEEDS OF SALE OF THE BONDS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY IN ANTICIPATION OF WHICH THEY WERE ISSUED. THE NOTES SHALL BE ISSUED IN THE SAME MANNER AS THE BONDS. The NOTES AND THE RESOLUTION AUTHORIZING THE notes MAY CONTAIN ANY PROVISIONS, CONDITIONS OR LIMITATIONS that A BOND RESOLUTION OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY CONTAIN.

B. THE BONDS AND NOTES OF EVERY ISSUE SHALL BE PAYABLE SOLELY OUT OF THE REVENUES OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY, SUBJECT ONLY TO ANY AGREEMENTS WITH THE HOLDERS OF PARTICULAR BONDS OR NOTES PLEDGING ANY PARTICULAR REVENUES AND SUBJECT TO ANY AGREEMENTS WITH ANY PARTICIPATING FACILITY. NOTWITHSTANDING THAT BONDS AND NOTES MAY BE PAYABLE FROM A SPECIAL FUND, THEY SHALL BE AND are DEEMED TO BE, FOR ALL PURPOSES, NEGOTIABLE INSTRUMENTS SUBJECT ONLY TO THE PROVISIONS OF THE BONDS AND NOTES FOR REGISTRATION.

C. THE BONDS MAY BE ISSUED AS SERIAL BONDS OR AS TERM BONDS, OR THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY IN ITS DISCRETION MAY ISSUE BONDS OF BOTH TYPES. THE BONDS SHALL BE AUTHORIZED BY RESOLUTION OF THE MEMBERS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD AND SHALL BEAR SUCH DATE OR DATES, MATURE AT SUCH TIME OR TIMES, NOT EXCEEDING fifty YEARS FROM THEIR RESPECTIVE DATES, BEAR INTEREST AT SUCH RATE OR RATES, PAYABLE AT SUCH TIME OR TIMES, BE IN SUCH DENOMINATIONS, BE IN SUCH FORM, EITHER COUPON OR REGISTERED, CARRY SUCH REGISTRATION PRIVILEGES, BE EXECUTED IN SUCH MANNER, BE PAYABLE IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA AT SUCH PLACE OR PLACES AND BE SUBJECT TO SUCH TERMS OF REDEMPTION, AS SUCH RESOLUTION OR RESOLUTIONS MAY PROVIDE. SUCH RESOLUTION OR RESOLUTIONS MAY DELEGATE TO ANY COMBINATION OF THREE OF THE MEMBERS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD THE POWER TO DETERMINE ANY OF THE MATTERS SET FORTH IN SUBSECTION A OF THIS SECTION AND THE POWER TO AWARD THE BONDS TO A PURCHASER OR PURCHASERS AT PUBLIC SALE OR TO NEGOTIATE A SALE TO A PURCHASER OR PURCHASERS. THE BONDS OR NOTES MAY BE SOLD AT PUBLIC OR PRIVATE SALE FOR SUCH PRICE OR PRICES AS THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL DETERMINE. PENDING PREPARATION OF THE DEFINITIVE BONDS, THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY ISSUE INTERIM RECEIPTS OR CERTIFICATES that SHALL BE EXCHANGED FOR SUCH DEFINITIVE BONDS.

D. THE MEMBERS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OVERSIGHT BOARD and ANY PERSON EXECUTING THE BONDS OR NOTES SHALL not BE LIABLE PERSONALLY ON THE BONDS OR NOTES OR BE SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF their ISSUANCE.

E. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY has the authority TO PURCHASE OUT OF ANY FUNDS AVAILABLE THEREFOR ITS BONDS OR NOTES. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY HOLD, PLEDGE, CANCEL OR RESELL SUCH BONDS OR NOTES SUBJECT TO AND IN ACCORDANCE WITH AGREEMENTS WITH BONDHOLDERS OR PARTICIPATING FACILITIES. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY MAY ELECT TO HAVE BONDS ISSUED BY A CONDUIT ISSUER AND BORROW THE PROCEEDS THEREOF.

F. BONDS OR NOTES ISSUED UNDER THIS SECTION SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THis STATE OR OF ANY POLITICAL SUBDIVISIONS of this state OR A PLEDGE OF THE FAITH AND CREDIT OF THis STATE OR OF ANY SUCH POLITICAL SUBDIVISION, BUT SHALL BE PAYABLE SOLELY FROM THE prescribed FUNDS. ALL SUCH BONDS OR NOTES SHALL CONTAIN ON THE FACE A STATEMENT THAT NEITHER this STATE NOR ANY POLITICAL SUBDIVISION of this state neither SHALL BE OBLIGATED TO PAY THE SAME OR THE INTEREST THEREON AND THAT THE FAITH AND CREDIT and THE TAXING POWER OF THis STATE OR OF ANY POLITICAL SUBDIVISION of this state IS not PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON SUCH BONDS or notes. THE ISSUANCE OF BONDS UNDER THIS SECTION SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THis STATE OR ANY POLITICAL SUBDIVISION of this state TO LEVY OR TO PLEDGE ANY FORM OF TAXATION, OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THIS SECTION does not PREVENT THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY FROM PLEDGING ITS FULL FAITH AND CREDIT OR THE FULL FAITH AND CREDIT OF A PARTICIPATING FACILITY TO THE PAYMENT OF BONDS OR ISSUE OF BONDS AUTHORIZED PURSUANT TO THIS SECTION.

G. INTEREST ON BONDS OR NOTES ISSUED UNDER THIS SECTION is EXEMPT FROM INCOME TAXATION BY THIS STATE and ITS SUBDIVISIONS.

H. REVENUE SOURCES CONTRIBUTING TO THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY to pay BOND DEBT MAY INCLUDE FUNDS FROM SHARED SAVINGS AGREEMENTS WITH INFRASTRUCTURE UPGRADE FINANCE AUTHORITY PARTICIPANTS AND PARTIAL PROCEEDS FROM OTHER AGENCIES OR MUNICIPALITIES. TO THE EXTENT THAT ENERGY OR OTHER SAVINGS EXPAND NEW REVENUES BEYOND OTHER LEGAL BUDGET LIMITATIONS, ANY RESULTING SAVINGS MAY BE EXPENDED OR ALLOCATED BEYOND SUCH LIMITATIONS.END_STATUTE

START_STATUTE49-1506. Contracts with state

This STATE OR ANY STATE AGENCY MAY ENTER INTO CONTRACTS WITH THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY OR A QUALIFIED PROVIDER FOR THE PURPOSE OF ACQUIRING, CONSTRUCTING, OPERATING OR PROVIDING A PROJECT, INCLUDING ARRANGEMENTS FOR PAYING THE COSTS OF SUCH PROJECT, WHICH MAY INCLUDE DEBT SERVICE REQUIREMENTS OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY RELATING TO THAT PROJECT. IF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY PROCURES A CONTRACT IN ACCORDANCE WITH THIS ARTICLE, A CONTRACT BETWEEN THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY AND THis STATE OR AN AGENCY THAT PROVIDES THE BENEFIT OF THE CONTRACT TO THis STATE OR AGENCY MAY BE ENTERED INTO BY THis STATE OR AGENCY WITHOUT ADDITIONAL COMPETITIVE PROCUREMENT. An OBLIGATION OF THis STATE OR AN AGENCY UNDER AN INSTALLMENT PAYMENT AGREEMENT, A GUARANTEED ENERGY PERFORMANCE CONTRACT OR ANY OTHER AGREEMENT ENTERED INTO IN CONNECTION WITH A PROJECT UNDER THIS CHAPTER SHALL not CONSTITUTE OR CREATE A DEBT OF THis STATE OR AGENCY. END_STATUTE

START_STATUTE49-1507. Cost-effective energy and water efficiency programs; advisory council; rules; report

A. NOTWITHSTANDING PROGRESS TOWARDS THE ACHIEVEMENT OF THE ENERGY AND WATER SAVINGS TARGETS AS REQUIRED BY ANY FEDERAL, STATE OR LOCAL GOVERNMENT ENTITY, EACH AFFECTED ENERGY PROVIDER SHALL IMPLEMENT ENERGY EFFICIENCY, ENERGY CONSERVATION AND PEAK-DEMAND REDUCTION PROGRAMS THAT ARE COST-EFFECTIVE, RELIABLE AND FEASIBLE AS DETERMINED THROUGH rules adopted PURSUANT TO SUBSECTION I OF THIS SECTION AND DELIVERED IN COLLABORATION WITH THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY AS prescribed IN THIS SECTION.

B. THE DIRECTOR shall establish AN ADVISORY COUNCIL CONSISTING OF thirteen MEMBERS, including TWO REPRESENTATIVES FROM THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY AND ONE REPRESENTATIVE FROM EACH OF THE FOLLOWING SECTORS:

1. AFFECTED ENERGY PROVIDERS.

2. MANUFACTURING.

3. AGRICULTURE.

4. ENVIRONMENTAL.

5. COMMERCIAL.

6. RESIDENTIAL.

7. LOW-INCOME SECTORS.

C. THE ADVISORY COUNCIL SHALL ASSIST AFFECTED ENERGY PROVIDERS IN developing ENERGY EFFICIENCY, PEAK-DEMAND REDUCTION AND EMISSION-REDUCING FUEL-SWITCHING PROGRAMS TO MEET THE REQUIREMENTS OF THIS SECTION AND IN evaluating, measuring AND verifying ENERGY SAVINGS. PROGRAMS SHALL BE DESIGNED TO MAXIMIZE THE COST-SAVINGS BENEFITS FOR RATEPAYERS BY using PRIVATE FINANCING AND OTHER AVAILABLE FUNDS TO THE MAXIMUM EXTENT PRACTICABLE AND CONSISTENT WITH THIS SECTION, AS THE PREFERRED SOURCES OF PROGRAM FINANCING before EXPENDITURES THAT WOULD OTHERWISE BE ELIGIBLE FOR RATE RECOVERY. THE ADVISORY COUNCIL SHALL ALSO RECOMMEND adopting FINANCING MECHANISMS, INCLUDING ON-BILL FINANCING, PROPERTY-ASSESSED CLEAN ENERGY MODELS AND OTHER INNOVATIVE FINANCING TOOLS.

D. THE ADVISORY COUNCIL, IN COLLABORATION AND CONSULTATION WITH THE CORPORATION COMMISSION, shall RECOMMEND possible ENERGY EFFICIENCY AND REDUCTION programs AND EMISSION-REDUCING FUEL-SWITCHING PROGRAM ELEMENTS THAT ARE PRUDENT, COST-EFFECTIVE, RELIABLE AND FEASIBLE, INCLUDING FINANCING MECHANISMS. SUCH PROGRAMS SHALL PRIORITIZE THE USE OF ENERGY AUDITS TO IDENTIFY COMPREHENSIVE ENERGY EFFICIENCY MEASURES THAT MAXIMIZE COST-EFFECTIVE SAVINGS. THE ADVISORY COUNCIL SHALL RECOMMEND THREE-YEAR PROGRAM PORTFOLIOS AND DEFINE ASSOCIATED SAVINGS TARGETS FOR THE CONSIDERATION OF EACH AFFECTED ENERGY PROVIDER.

E. UNLESS OTHERWISE PROVIDED, AFFECTED ENERGY PROVIDERS SHALL PREPARE AND SUBMIT TO THE ADVISORY COUNCIL THREE-YEAR PROGRAM PLANS, SCHEDULES AND BUDGETS DESIGNED TO REFLECT THE RECOMMENDED PROGRAM PORTFOLIOS, INCLUDING THE DEFINED ENERGY SAVINGS TARGETS. ON A three-YEAR CYCLE, THE ADVISORY COUNCIL SHALL REVIEW ENERGY EFFICIENCY, PEAK-DEMAND REDUCTION AND FUEL-SWITCHING PROGRAM PLANS FOR EACH AFFECTED ENERGY PROVIDER AND RECOMMEND plans FOR APPROVAL BY THE APPROPRIATE REGULATORY AUTHORITY, IF IT FINDS the plans TO BE COST-EFFECTIVE THROUGH A NET-COST-BENEFIT ANALYSIS THAT QUANTIFIES EXPECTED COST SAVINGS if CONSIDERED IN THEIR ENTIRETY PURSUANT TO rules prescribed BY SUBSECTION I OF THIS SECTION. These PROGRAMS MUST REDUCE OVERALL UTILITY BILLS.

F. THE AFFECTED ENERGY PROVIDERS AND THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY SHALL COLLABORATE TO PROMOTE AVAILABLE ENERGY AND WATER EFFICIENCY AND PEAK-DEMAND REDUCTION PROGRAMS THROUGH A COMMON MARKETING PLATFORM PROVIDED BY THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY, WHICH SHALL SERVE AS AN EASILY ACCESSIBLE RESOURCE FOR ALL RESIDENTS OF THIS STATE SEEKING TO SAVE MONEY THROUGH ENERGY EFFICIENCY.

G. THIS SECTION does not REDUCE THE AUTHORITY OF THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY. THE INFRASTRUCTURE UPGRADE FINANCE AUTHORITY, AT ITS DISCRETION, MAY PROVIDE PRIVATE FINANCING OR OTHER FINANCIAL RESOURCES TO REDUCE IMPLEMENTATION COSTS OF ENERGY EFFICIENCY PROGRAMS IN COORDINATION WITH THE AFFECTED ENERGY PROVIDERS AND MAY COLLABORATE WITH AFFECTED ENERGY PROVIDERS TO PROVIDE EFFICIENCY PROGRAMS.

H. THE DEPARTMENT SHALL ANNUALLY PUBLISH A REPORT ON STATEWIDE WATER, ELECTRICITY AND NATURAL GAS CONSUMPTION AND ELECTRICITY PEAK ENERGY DEMAND AND MAKE THE REPORT AVAILABLE TO THE GENERAL PUBLIC BY DECEMBER 31 OF EACH YEAR. ALL AFFECTED ENERGY PROVIDERS SHALL PROVIDE ACTUAL AND PROJECTED ELECTRIC AND NATURAL GAS CONSUMPTION AND PEAK USAGE DATA TO THE DEPARTMENT ON AN ANNUAL BASIS AS prescribed in rules adopted PURSUANT TO SUBSECTION I OF THIS SECTION. IN DETERMINING COMPLIANCE WITH THE APPLICABLE ENERGY SAVINGS REQUIREMENTS, THE DIRECTOR SHALL EXCLUDE REPORTED WATER, ELECTRICITY OR NATURAL GAS SAVINGS THAT ARE NOT ADEQUATELY DEMONSTRATED AND DOCUMENTED, as prescribed in rules adopted pursuant to SUBSECTION I OF THIS SECTION.

I. NOT LATER THAN JUNE 30, 2022, THE DIRECTOR, IN COOPERATION WITH AFFECTED ENERGY PROVIDERS, SHALL ADOPT RULES TO ESTABLISH THE REQUIREMENTS OF THIS SUBSECTION, INCLUDING:

1. EVALUATION, MEASUREMENT AND VERIFICATION PROCEDURES AND STANDARDS, INCLUDING IMPACT EVALUATION, ENVIRONMENTAL OUTCOMES, PROCESS EVALUATION, MARKET EFFECTS AND COST-EFFECTIVENESS EVALUATION.

2. REQUIREMENTS UNDER WHICH AFFECTED ENERGY PROVIDERS SHALL DEMONSTRATE, DOCUMENT AND REPORT COMPLIANCE WITH ENERGY SAVINGS TARGETS.

3. PROCEDURES AND STANDARDS FOR DEFINING AND MEASURING ELECTRICITY SAVINGS AND NATURAL GAS SAVINGS THAT CAN BE COUNTED TOWARDS ENERGY SAVINGS TARGETS.

J. RULES ADOPTED PURSUANT TO SUBSECTION I OF THIS SECTION SHALL NOT DIFFER SIGNIFICANTLY AMONG AFFECTED NATURAL GAS DISTRIBUTION COMPANIES OR AMONG AFFECTED ENERGY PROVIDERS. END_STATUTE

Sec. 2. Effective date

Title 49, chapter 11, Arizona Revised Statutes, as added by this act, is effective from and after December 31, 2021.