The Arizona Revised Statutes have been updated to include the revised sections from the 57th Legislature, 1st Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 57th Legislature, 2nd Regular Session, which convenes in January 2026.
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.
30-1001. Definitions
In this chapter, unless the context otherwise requires:
1. "Ancillary agreement" means any of the following:
(a) A bond.
(b) An insurance policy.
(c) A letter of credit.
(d) A reserve account.
(e) An interest rate lock or swap arrangement.
(f) A hedging arrangement.
(g) A liquidity or credit support arrangement.
(h) Any other similar agreement, instrument or arrangement that is entered into in connection with the issuance of transition bonds and that is designed to promote the credit quality and marketability of the transition bonds or to reduce or mitigate the risk of an increase in any financing cost.
2. "Customer" means a person or entity within this state to whom one of the following applies:
(a) Regardless of the identity of the person's or entity's electric generation supplier and without regard to whether the person or entity also receives service from other electric service providers, the person or entity receives retail electric utility service, whether directly or indirectly, whether bundled or unbundled and whether supply or delivery, or both, from any of the following:
(i) A public power entity.
(ii) A successor to a public power entity.
(iii) Any other person or entity, public service corporation, cooperative or municipal entity that assumes the responsibility to provide electric utility service in a public power entity's service territory as the service territory exists on the date the governing body of a public power entity adopts a financing resolution.
(b) Regardless of the identity of the person's or entity's electric generation supplier and without regard to whether the person or entity also receives service from other electric service providers, the person or entity maintains an interconnection with the electric distribution facilities of a public power entity that allows that person or entity to receive retail electric utility service, whether bundled or unbundled and whether supply or delivery, or both, from any of the following:
(i) A public power entity.
(ii) A successor to a public power entity.
(iii) Any other person or entity, public service corporation, cooperative or municipal entity that assumes the responsibility to provide electric utility service in a public power entity's service territory as the service territory exists on the date the governing body of a public power entity adopts a financing resolution.
(c) Without regard to whether the person or entity also receives service from other electric service providers, the person or entity is a cooperative that provides retail electric service to members and that receives electricity, whether at retail or a wholesale price, from a public power entity that provides wholesale electric supply and transmission services.
3. "Financing charges" mean nonbypassable charges that are paid or payable by all customers to a qualified special purpose entity to recover ongoing financing costs in accordance with this chapter. Financing charges can be adjusted from time to time in accordance with the true-up mechanism.
4. "Financing cost":
(a) Means all costs that are incurred by a qualified special purpose entity to issue, rate, market, place, authorize, support, repay, refinance, service, administer or refund transition bonds, whether incurred at, before or after the transition bonds are issued or before or after the maturity date of the transition bonds.
(b) Includes any of the following:
(i) The principal and interest and any acquisition, defeasance, redemption or other premiums that are payable on transition bonds.
(ii) The costs, fees and expenses related to issuing, rating, marketing, placing, authorizing, supporting, repaying, refinancing, servicing, administering or refunding transition bonds, including any costs that are incurred for implementing the true-up mechanism.
(iii) The costs, fees and expenses of trustees or similar fiduciaries, attorneys, accountants, servicers, rating agencies, depository and other agents or other professionals.
(iv) The costs, fees and expenses that are associated with hiring expert consultants that are necessary to aid the governing body in reviewing and approving of a securitization proposal in accordance with this chapter.
(v) The costs that are incurred under an ancillary agreement and any amount that is required to refund or replenish a reserve account or other account established under an ancillary agreement or other document relating to transition bonds.
(vi) The costs of forming, operating, administering and dissolving a qualified special purpose entity.
(vii) The costs, fees and expenses that are incurred to obtain any consent, release, waiver or approval from any holder of an existing obligation of a public power entity that is necessary to permit the issuance of transition bonds or the retirement, abandonment or reduction in the undepreciated book value of a transition asset in connection with a transaction under this chapter.
(viii) The costs that are incurred to protect the status of transition property, the right to impose and collect financing charges or the right to receive financing revenues, including costs related to any judicial or other proceedings that are necessary to protect the transition property or collect financing revenues.
(ix) Federal, state and other taxes that are imposed on the public power entity or the qualified special purpose entity with respect to the financing charges or financing revenues without duplication and any other fees, charges or assessments that are imposed on transition bonds.
5. "Financing party" means a holder of transition bonds and any trustee, collateral agent or other person acting for the benefit of the holder.
6. "Financing resolution" means a resolution that is described in section 30-1003 and that is adopted by the governing body of a public power entity that authorizes a securitization transaction.
7. "Financing revenues" means any money and other property received or to be received, directly or indirectly, in payment of or on account of financing charges, including all of the proceeds of the investment thereof.
8. "Nonbypassable" means that the payment of the financing charges may not be avoided and shall be paid by a customer if, at the time invoices or bills are rendered, transition bonds are outstanding or the financing costs have not been recovered in full. Financing charges shall be paid regardless of whether:
(a) The customer is liable to a public power entity for any charges for electric service.
(b) The system assets serving the customer continue to be owned by the applicable public power entity.
9. "Ongoing financing costs":
(a) Means all financing costs, including the principal and interest that are payable on the transition bonds.
(b) Does not include up-front financing costs that are paid by the qualified special purpose entity directly or indirectly from the proceeds of the issuance of transition bonds.
10. "Public power entity" means any municipal corporation or political subdivision that owns and operates facilities for the generation, transmission or distribution of electric energy for sale to retail customers in this state.
11. "Qualified special purpose entity":
(a) Means a legal entity that is established by and wholly owned, directly or indirectly, by a public power entity in which an interest in transition property is created pursuant to this chapter and which issues transition bonds that are secured by transition property.
(b) Includes any successor to or an assignee, other than as security, of the legal entity.
12. "Securitization proposal" means a report that is prepared by the public power entity pursuant to section 30-1003.
13. "Servicer":
(a) Means a person or entity that is authorized and required by a contract, tariff or otherwise to do all of the following:
(i) Calculate, bill or collect financing charges on behalf of a qualified special purpose entity.
(ii) Prepare periodic reports on the billing of financing charges and the collection of financing revenues.
(iii) Render other services related to financing charges and the transition property, including administering the true-up mechanism.
(b) Includes:
(i) A public power entity.
(ii) A public service corporation or a cooperative.
(iii) A third-party servicer that collects financing charges under a transition billing services tariff.
14. "Significant event recovery costs" means costs, fees and expenses that are significant, as determined by the governing body, that are incurred or to be incurred through the date of adoption of a financing resolution and that are associated with or that arise from incidents of severe or extreme weather, natural disasters, civil disturbance, wildfire, criminal acts or acts of war or terrorism that result in any of the public power entity's assets, facilities or infrastructure that are in operation providing service for customers becoming destroyed, damaged or otherwise rendered inoperable, in whole or in part.
15. "Third-party servicer" means a person, other than a public power entity, that is engaged to act as a servicer for transition bonds in the event a public power entity is unable to act as a servicer.
16. "Transition asset" means any electric power generation, transmission or distribution facility, including other property or equipment used in connection with such generation, transmission or distribution of the public power entity that is identified in a securitization proposal and financing resolution, and that either:
(a) Has been retired and no longer provides service, in whole or in part.
(b) As of the date of the financing resolution, is planned to be retired, sold, disposed of, abandoned or otherwise removed from service by the public power entity, in whole or in part, within ten years after the date of the financing resolution.
(c) Has otherwise been destroyed, damaged or rendered inoperable, in whole or in part, by forces or action outside of the public power entity's reasonable control.
17. "Transition asset retirement costs":
(a) Means the total or any portion of any undepreciated value or unrecovered balance of any transition asset that will be permanently reduced when transition bonds are issued and a public power entity receives the transfer of funds pursuant to section 30-1005, subsection A.
(b) Includes any costs, fees and expenses that are incurred to retire, abandon or reduce the undepreciated book value of the transition asset in connection with a transaction that includes the decommission, remediation or restoration costs associated with the transition asset.
18. "Transition benefit test" means the assessment described in section 30-1003, subsection E, paragraph 2.
19. "Transition billing services tariff":
(a) Means a tariff, rate or order of a public power entity that authorizes the public power entity or other person to act as a servicer.
(b) Does not specify or alter the amount of any financing charges nor grant the servicer any right, title or interest in financing revenues.
20. "Transition bonds" means bonds, notes or other evidences of indebtedness that are issued by a qualified special purpose entity and that are described in a securitization proposal and financing resolution, the proceeds of which are used, directly or indirectly, to recover, finance, refinance or refund transition costs and up-front financing costs, and that are directly or indirectly payable from, or secured by, transition property, financing charges or financing revenues.
21. "Transition costs" includes any of the following:
(a) Transition asset retirement costs.
(b) Significant event recovery costs.
22. "Transition property":
(a) Means the property rights and property interests of a qualified special purpose entity, any holders of transition bonds when issued or any transferee or assignee thereof that are created or recognized as a result of a transaction authorized by this chapter.
(b) Includes any of the following:
(i) All rights and interests of a qualified special purpose entity under a financing resolution.
(ii) The right to impose, charge, collect and receive financing charges, including the right to calculate, impose, charge, collect and receive financing charges authorized under the financing resolution and to obtain periodic adjustments to the financing charges pursuant to the true-up mechanism.
(iii) All right and title to, and all interest in, financing revenues, regardless of whether the revenues are billed, received, collected or maintained separately from or commingled with other revenues or monies of any type and regardless of whether such revenues are billed or collected by a servicer.
(iv) All reserves that are established in connection with the transition bonds or the transition property.
(v) All rights of a qualified special purpose entity under any ancillary agreement.
(c) Does not include an asset of a public power entity.
23. "True-up mechanism" means a formula that is described in a securitization proposal and established before or concurrent with the issuance of transition bonds and that adjusts financing charges over time to correct for any overcollection or undercollection of financing revenues so that both a qualified special purpose entity timely and completely recovers not more than all ongoing financing costs and any impacts to the public power entity's customers from any overcollection are addressed in a timely and complete manner.
24. "Unit financing charge" means the share or portion of the financing charges that are imposed on, paid by and collected from a particular customer or from every customer in a particular group of customers.
25. "Up-front financing costs":
(a) Means those financing costs that are paid, directly or indirectly from the proceeds of transition bonds, by the qualified special purpose entity.
(b) Includes all or a portion of the costs of developing a securitization proposal and designing, marketing, obtaining ratings for and issuing transition bonds.