ARIZONA HOUSE OF REPRESENTATIVES

57th Legislature, 2nd Regular Session

Majority Research Staff

House: ED DP 7-3-2-0

HB 2320: school districts; bonds; financial advisors

Sponsor: Representative Gress, LD 4

Caucus & COW

Overview

Requires a school district governing board (governing board) to hire an independent municipal advisor to assist the school district with a bond election and bond issues.

History

A governing board may, or on petition of 15% of the school district electors must, call an election to decide whether school district bonds should be issued and sold for: 1) purchasing or leasing school lots; 2) building or renovating buildings; 3) supplying buildings with furniture; 4) equipment and technology; 5) improving school grounds; 6) purchasing student transportation vehicles; or 7) liquidating any capital indebtedness already incurred. An election may also be called to change the list of capital projects or the purposes authorized by a previous voter approval to issue bonds (A.R.S. § 15-491).

Federal law requires individuals who provide municipal advisory activities to register as a municipal advisor with the Securities and Exchange Commission (SEC). Federal regulations define a municipal advisor as a person that provides advice to, or on behalf of, a municipal entity or obligated person concerning municipal financial products or the issuance of municipal securities, including advice on the structure, timing and terms (15 U.S.C. § 78o-4) (17 C.F.R. § 240.15Ba1-1)

Provisions

1. Requires a governing board, before calling a bond election, to hire an independent municipal advisor who is registered and in good standing with the SEC to advise and assist the governing board and school district with:

a. the election; and

b. each bond issue authorized by the election, if the election favors issuing the bonds.

2. Instructs each independent municipal advisor to:

a. advise the governing board and school district on all aspects of issuing the bonds to assist the school district in achieving the most effective cost of borrowing, including:

i. determining the repayment structure of the bonds;

ii. obtaining ratings on the bonds, if necessary;

iii. hiring other professionals necessary to sell and issue the bonds; and

iv. assisting in any other bond issuance-related matter;

b. assist the governing board and school district in preparing the informational pamphlet for a bond election; and

c. act in the school district's best interests.

3. Prohibits an independent municipal advisor from:

a. colluding in advising on the selection of other professionals to assist the school district; and

b. purchasing or underwriting any issue of school district bonds, if the person served as the independent municipal advisor for that bond issue.

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f. Initials CH HB 2320

g. 2/4/2026 Page 0 Caucus & COW

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