Senate Engrossed

 

private activity bonding

 

 

 

 

State of Arizona

Senate

Fifty-sixth Legislature

First Regular Session

2023

 

 

 

SENATE BILL 1718

 

 

 

An Act

 

amending sections 35-902, 35-904, 35-905 and 35-907, Arizona Revised Statutes; relating to private activity bonding.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 


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

Section 1. Section 35-902, Arizona Revised Statutes, is amended to read:

START_STATUTE35-902. Allocation

A. Subject to this chapter, the total amount of the state ceiling is allocated among projects pursuant to this section. The director shall issue confirmations on a first come, first served first-come, first-served basis, subject to SECTION 35-904, subsection a in the event of oversubscription, within any particular category of projects as described in subsection C, D, E or F or G of this section.

B. Thirty Twenty percent of the state ceiling is allocated to projects that are designated at the sole discretion of the director.

C. Thirty-five Thirty percent of the state ceiling is allocated to qualified mortgage revenue bonds and qualified mortgage credit certificate programs, excluding any such bonds and certificate programs for home improvement and rehabilitation.

D. Fifteen Forty percent of the state ceiling is allocated to qualified residential rental projects as described in section 142(d) of the United States internal revenue code of 1986.

E. Five percent of the state ceiling is allocated to qualified student loan projects.

F. E. Five percent of the state ceiling is allocated to manufacturing projects.

G. F. Ten Five percent of the state ceiling is allocated to all qualified student loan projects or other projects financable financeable through issuance of bonds that require an allocation of state ceiling and that are not described and provided for in subsections C, D and E and F of this section. Such projects include, but are not limited to, qualified mortgage revenue bonds and qualified mortgage credit certificate programs for home improvement and rehabilitation.

H. G. A request shall not be filed and a confirmation shall not be issued to a project unless the project is subject to section 146 of the code. No A project is not deemed to have been allocated any portion of the state ceiling unless, in connection with the project, this chapter has been substantially complied with.

I. H. Any request on file with the authority for which a confirmation has not been issued by 5:00 p.m. on March 31, other than a request for an allocation pursuant to subsection B or D of this section, is deemed to have expired at 5:00 p.m. on March 31. All or any part of any confirmation for which bonds have not been issued or for which a qualified mortgage credit certificate program has not been established by 5:00 p.m. on March 31, evidenced by the filing of a certificate of closing with the authority, or for which confirmations have not been extended pursuant to section 35-910, is deemed to have expired.

J. I. At any given time, an issuer, or an issuer together with one or more other issuers, may not file more than one request for each project, except that the authority may satisfy an allocation request from one or more categories of projects as described in subsection B, C, D, E or F or G of this section. This subsection does not prohibit an issuer from refiling a request for a given project if a prior request has expired or filing a request for each separate and distinct project.

K. An issuer may not transfer or assign its rights to an allocation of state ceiling from one project to another project or from itself to another issuer.

J. Beginning from and after the effective date of this amendment to this section until August 31, 2030:

1. From March 31 through August 31 of each year, except for an allocation made pursuant to subsection B of this section, seventy percent of the remaining state ceiling is allocated to projects prescribed in subsections C and D of this section.

2. From March 31 through August 31 of each year, a confirmation may not be allocated to a project prescribed in subsection C of this section in an amount greater than $35,000,000. END_STATUTE

Sec. 2. Section 35-904, Arizona Revised Statutes, is amended to read:

START_STATUTE35-904. Obtaining and issuing confirmations

A. Subject to section 35-905, a confirmation allocating a portion of the state ceiling to a project must be obtained before the sale or issuance of bonds or mortgage credit certificates by the issuer. A confirmation may be obtained by filing with the authority a request and evidence of an inducement resolution or other official action taken by the issuer in connection with the project.  Requests filed by mail are deemed to be filed with the authority at 5:00 p.m. on the business day the request is actually received at the authority, whether by mail or email.  All requests received on the same date and at the same time shall be dated and numbered by lot and confirmations to those requests shall be issued in the order determined by lot.

B. On and after the first business day of each year, a request may be prepared and filed by the issuer or on behalf of the issuer by bond counsel or any other interested person.

C. Except as provided in section 35-902, subsection H, section 35-909 and subsection D of this section, a confirmation issued before 5:00 p.m. on March 31 expires and no an allocation is not deemed to be made unless the applicable bonds have been issued or a qualified mortgage credit certificate program has been established and a certificate of closing has been actually filed and received, not merely postmarked, including by email, with the authority no not later than ninety days after the date of the confirmation or the first business day after the ninetieth day if the ninetieth day is not a business day. The confirmation may be extended as provided in section 35-910 beyond the ninety-day period or 5:00 p.m. on March 31.

D. Notwithstanding subsection C of this section, a confirmation issued for a project to be funded in part with an urban development action grant to be made under section 119 of the housing and community development act of 1974 (P.L. 93-383; 88 Stat. 633) or a housing development grant to be made under section 301 of the housing and urban-renewal urban-rural recovery act of 1983 (P.L. 98-181, title III, section 301, 97 Stat. 1196 and amended October 17, 1984, P.L. 98-479, title III, section 103, 98 Stat. 2223) expires and no an allocation is not  deemed to be made unless the applicable bonds have been issued and a certificate of closing and evidence satisfactory to the director of the commitment to make an urban development action grant or a housing development grant with respect to such project have been actually filed and received, not merely postmarked, including by email, with the authority no not later than 5:00 p.m. on December 26.

E. Subject to this section and section 35-909, the confirmation shall ensure allocation in the manner prescribed by the code for a dollar amount of bonds or a qualified mortgage credit certificate program not in excess of the amount set forth in the confirmation.

F. The director shall decline to issue confirmations at such time as the aggregate amount of bonds or mortgage credit certificates allocated under all confirmations previously issued and not expired, together with the proposed issue of bonds or mortgage credit certificates as to which a request has been received, would, through 5:00 p.m. on March 31, exceed the respective aggregate amount allocated under section 35-902, subsection C, D, E or F or G for such purpose, and from April 1, exceed the aggregate amount of the state ceiling that is not allocated under an unexpired confirmation nor within the discretion of the director pursuant to section 35-902, subsection B. On expiration of a confirmation or release of an allocation by the RELATED issuer, the director shall issue a confirmation to the next numbered request which is equal to or less than the then available portion of the state ceiling or to the next numbered request if the principal amount of such request is reduced to an amount equal to or less than the then available portion of the state ceiling available for such purpose. The director may only issue a single confirmation for each request.

G. A confirmation made pursuant to the director's discretion section 35-902, subsection b may be accompanied by a certificate executed by the director. On request, the director shall execute a certificate stating that the confirmation was not made in consideration of any bribe, gift, gratuity or direct or indirect contribution to any political campaign. The director may require such oaths or affirmations as the director considers to be necessary to verify the accuracy of the certificate.

H. The director shall attempt to issue confirmations within three business days after receipt and shall issue confirmations in the order of receipt of fully and properly completed requests within the limitations of subsection F of this section. The authority shall notify the issuer or and any other contact person listed in the request in writing, by e-mail email or by telephone of the issuance of a confirmation. The authority is not responsible for returning confirmations to the filing party. A confirmation shall be available for pickup at the authority after issuance of the confirmation. END_STATUTE

Sec. 3. Section 35-905, Arizona Revised Statutes, is amended to read:

START_STATUTE35-905. Restrictions on confirmations; definition

A. Before December 17 august 31, a confirmation shall not be allocated to a project in an amount greater than thirty-five million dollars $35,000,000, except that this subsection does not apply to any project that is eligible to receive an allocation pursuant to section 35-902, subsection B, C or D or E. For the purposes of this section, the amount of allocation to a project shall also include any other state ceiling allocation received by any related person to the project.

B. For the purposes of this section, "related person" has the same meaning as provided in section 147(a)(2) of the code, except that all references to fifty percent shall be changed to twenty-five percent. END_STATUTE

Sec. 4. Section 35-907, Arizona Revised Statutes, is amended to read:

START_STATUTE35-907. Allocations after 5:00 p.m. December 16; reallocation of carryforwards; definition

A. Any portions of the state ceiling for which bonds have not been issued by 5:00 p.m. December 16, other than confirmations extended pursuant to section 35-910, shall be pooled and are subject to allocation by the director to projects eligible for a carry-forward carryforward allocation under the code.

B. Obtaining and issuing a confirmation after 5:00 p.m. December 16 shall occur as provided in section 35-904, subject to the following restrictions and changes:

1. before 5:00 p.m. on december 15, a notice of intent shall be filed on or before December 15 with and received by the authority by any issuer, bond counsel or other interested person, with respect to projects for which allocations may be carried forward pursuant to section 146 of the code. Such The notice of intent shall be considered dated and numbered and confirmations shall be issued by the director to the issuers on December 17. Any portions of the state ceiling for which bonds have not been issued or carried forward pursuant to this section or for which a qualified mortgage credit certificate program has not been established by 5:00 p.m. December 26 shall be allocated by the director and confirmations shall be issued provided to such issuers before January 1.  Issuers shall not file elections of carryforward purpose with the federal government under section 146 of the code until an allocation a confirmation has been issued delivered by the authority under this section for the bonds pertaining to a project. The failure to file a notice of intent results in the exclusion of the project from allocations to issuers of any portion of the current calendar year state ceiling.

2. A security deposit equal to one percent of the principal amount stated in the notice of intent shall be received by the authority within five days after notification by the director that the project is eligible for a carry-forward carryforward allocation. No A security deposit is not required if the direct beneficiary of the bonds proceeds is this state or a county, city, town or nonprofit entity, the issuer is a student loan corporation, the project includes urban development action grant or housing development grant financing, is a project described in section 1317(3)(N) of the tax reform act of 1986 or is a qualified mortgage revenue bond project or is a qualified mortgage credit certificate program or the confirmation is issued by the director on or after December 26.  The security deposit is forfeited to the authority if bonds are not issued within three years after the receipt of the deposit.  For bonds that are issued from and after December 31, 2015, any security deposit made in relation to the project for which the bonds are issued shall be refunded if the bonds are issued within three years after the receipt of the deposit that is required under this paragraph, whether or not carry-forward carryforward allocation is used.

C. Notwithstanding subsection B of this section and section 35-904, on written notice to the director, an issuer may reallocate all or a portion of any carryforward allocation within the same carryforward purpose. A reallocation made pursuant to this subsection must be consistent with this section and with applicable federal law. A reallocation made pursuant to this subsection does not increase the aggregate amount of the original carryforward allocation to which the reallocation relates or extend the term of the original carryforward allocation during which the bonds must be issued. reallocation of carryforward allocation by an issuer will not result in a refund of any security deposit previously received by the authority on account of the original carryforward allocation. END_STATUTE