The Arizona Revised Statutes have been updated to include the revised sections from the 55th Legislature, 2nd Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 56th Legislature, 1st Regular Session, which convenes in January 2023.
This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
28-7678. Board funding obligations
A. The board may deliver nonnegotiable board funding obligations as follows:
1. In fiscal year 2003-2004, a board funding obligation that is in a principal amount that is not more than two hundred million dollars and that matures no later than four calendar years after the delivery of the obligation.
2. In any fiscal year from fiscal years 2005-2006 through 2019-2020, board funding obligations that are in a principal amount that is not more than two hundred million dollars in any fiscal year and that matures no later than four calendar years after the delivery of the obligation.
B. The board shall sell the board funding obligations prescribed in subsection A of this section to the state treasurer. The board shall repay board funding obligations at the board’s earliest convenience. The total principal amount of board funding obligations at any one time shall not be more than two hundred million dollars. The board may reissue to the state treasurer any called board funding obligations on the same terms as the obligations that were called and in a principal amount that does not exceed the principal amount called.
C. In consultation with the state treasurer, the board shall authorize each board funding obligation by a resolution. The authorizing resolution shall provide the following:
1. The rate or rates of interest.
2. The date or dates of maturity.
3. The terms of redemption.
4. The form and manner of execution of the funding obligation.
5. Any terms necessary to secure credit enhancement or other sources of payment or security.
6. Any other item the board determines is necessary.
D. As provided in the authorizing resolutions of the board, the principal of and interest on the board funding obligations shall be paid from one or more loan repayment agreements that are funded with the proceeds of the obligations and that are pledged to the repayment of the obligations. The pledged loan repayment agreements shall be held in one or more separate subaccounts in the fund that are established and pledged by the authorizing resolution for the payment of the board funding obligation under the terms of the authorizing resolution. As long as the board funding obligations are outstanding, the board shall segregate the loan payments under the loan repayment agreements and shall deposit all of those monies in the appropriate separate subaccount of the fund designated as the subaccount from which the obligations are to be paid. However, with respect to the obligations deposited into the state highway fund pursuant to subsection G of this section, the obligations shall be repaid by the board, no later than the final maturity of the obligations, from the state highway fund and not from loan repayment agreements and may be secured by a pledge granted pursuant to subsection E, paragraph 2 of this section.
E. To secure the board funding obligations, the board by the authorizing resolution may:
1. Provide that principal of and interest on the obligations may be secured by a pledge of and first lien or other specified lien on all or part of the monies held in the specified subaccounts of the fund pledged to the obligations.
2. Provide that, if the department fails to make loan repayments when due under any pledged loan repayment agreement of the department, the principal of obligations secured by the pledged loan repayment agreement may be paid from and secured by a pledge of and lien on all or any part of the monies paid into the state highway fund from the sources specifically collected as prescribed under article IX, section 14, Constitution of Arizona, and the monies distributed pursuant to section 28-5808, if the lien is subordinated and subject to the prior lien on those monies securing all bonds issued by the board pursuant to article 1 of this chapter.
3. Provide that all or a portion of the interest on the obligations may be paid from and secured by a pledge of any available monies in the fund. These pledged monies shall be deposited in the subaccount that secures the obligations.
4. Provide that all or a portion of the interest on the obligations may be paid from available monies in the state highway fund that are deposited, as provided in the authorizing resolution, in the subaccount that secures the obligations.
5. Do any other matters of like or different character that in any way may affect the security and protection of the obligations.
F. The monies pledged under this section to the board funding obligations and received by the state treasurer or department to be deposited in the pledged subaccount are immediately subject to the lien of the pledge without any future physical delivery or further act. A lien of any pledge is valid and binding against all parties having claims of any kind in tort, contract or otherwise against the board or the department irrespective of whether the parties have notice of the lien. When placed in the board’s records, the resolution by which this pledge is created is notice to all concerned of the creation of the pledge.
G. Board funding obligations shall be sold at private sale to the state treasurer at a price and on terms provided by the board in its authorizing resolution in accordance with subsection E of this section. Up to sixty million dollars of the proceeds from the sale of obligations shall be deposited into the state highway fund and up to one hundred forty million dollars of proceeds shall be deposited in a separate subaccount in the highway expansion and extension loan program fund and may be spent for financial assistance to the department for eligible projects and related costs under this article and to pay interest on board funding obligations.
H. On request of the board, the attorney general shall take whatever actions are necessary to enforce loan repayment agreements that are pledged by the board to board funding obligations.
I. Board funding obligations:
1. Are special obligations of the board.
2. Are not obligations that are general, special or otherwise of this state.
3. Are not a legal debt of this state.
4. Are payable and enforceable only from the monies and separate subaccounts pledged and assigned in the authorizing resolutions of the board.
J. Any member of the board or a person executing a board funding obligation is not personally liable for the payment of the obligation.
K. If the state treasurer calls the investment in the board funding obligations as provided in section 35-313, subsection D:
1. The board shall repay the principal amount of the obligations called by the state treasurer from the sources of the monies specified in the resolution of the board that authorized the obligations.
2. The board may reissue to the state treasurer any called board funding obligations on the same terms as the obligations that were called and in a principal amount that does not exceed the principal amount called.