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| Home > Statutes > Usa Arizona |
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USA Statutes : arizona
Title : Cities and Towns
Chapter : PUBLIC UTILITIES
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9-501 Grant of franchise
A. A municipal corporation shall not grant a franchise for a public utility to be
operated by the grantee unless authorized by a majority vote of the qualified voters of
the municipal corporation at a regular election or at a special election duly and
regularly called by the governing body of the municipal corporation for that purpose.
B. A telecommunications corporation may apply for either a license or a franchise
from a municipal corporation under section 9-583, and the municipal corporation shall not
require a franchise for a public utility for its provision of telecommunications services
as defined in section 9-581.
9-502 Petition for franchise; publication;election; term; expenditures
A. A person desiring to obtain a franchise to operate a public utility from a
municipal corporation shall present the franchise desired to the governing body of the
municipal corporation, and it shall be filed among its records.
B. If the governing body deems the granting of the franchise beneficial to the
municipal corporation, it shall pass a resolution, to be spread upon its record, stating
that fact, and shall submit the question to the qualified electors as to whether or not
the franchise shall be granted at the following regular election held in the municipal
corporation or at a special election called for that purpose.
C. The proposed franchise shall be published in full in some newspaper of general
circulation published in the municipal corporation for at least thirty consecutive days
prior to the election.
D. If a majority of the votes cast is in favor of granting the franchise, the
governing body shall grant the franchise only in the form filed and published.
E. A franchise shall not be granted for a longer term than twenty-five years.
F. An election held pursuant to this section shall be held on a date prescribed by
section 16-204.
G. A public utility that spends only its own monies or resources in support of its
proposed franchise from a municipal corporation to operate a public utility is exempt
from the requirements of title 16, chapter 6. 9-505 Definitions
In this article, unless the context otherwise requires:
1. "Area of jurisdiction" means that part of a city or town, or that part of the
unincorporated area of a county, or both when applied to a cable television system within
parts of more than one jurisdiction, for which a license is issued.
2. "Cable television system" means any facility that, in whole or in part, receives
directly, or indirectly over the air, and amplifies or otherwise modifies the signals
transmitting programs broadcast by one or more television or radio stations and
distributes such signals together with such other signals as authorized by the federal
communications commission and the licensing authority, by wire or cable to subscribing
members of the public who pay for such service, but the term shall not include:
(a) Any such facility that serves fewer than fifty subscribers.
(b) Any such facility that serves only the residents of one or more apartment
dwellings under common ownership, and commercial establishments located on the premises
of such apartment dwellings.
3. "Existing cable television systems" means a cable television system in operation
on April 1, 1974, a cable television system under construction on April 1, 1974, or a
cable television system which had received authorization for construction as of April 1,
1974.
4. "Intergovernmental contract" means the joint exercise of powers authorized by
title 11, chapter 7, article 3.
5. "License" means that ordinance or resolution which contains the right, authority
or grant, given by a licensing authority enabling the license holder to construct,
operate and maintain a cable television system.
6. "Licensing authority" means the board of supervisors of a county or the
governing body of an incorporated city or town.
9-506 Authority to issue license
A. For the purpose of authorizing and regulating the construction, operation and
maintenance of cable television systems, the licensing authority of a city or town for an
incorporated area, or the licensing authority of the county for unincorporated areas,
either individually or jointly by intergovernmental contract, may issue a license to any
person to use public streets, roads and alleys, and shall impose conditions, restrictions
and limitations upon the use of such public streets, roads and alleys, and upon the
construction, operation and maintenance of cable television systems.
B. Any such licensing authority may adopt resolutions or ordinances implementing
and controlling the license or joint license. The license issued by a licensing
authority may contain provisions, and may establish a permit fee, not to exceed the
limits established by the federal communications commission.
9-507 Application for license; hearing; terms;conditions
A. Any person desiring to obtain a license to construct, operate and maintain a
cable television system from a licensing authority shall make application to such
licensing authority in the form specified by the licensing authority and shall comply
with requirements specified by the licensing authority.
B. Prior to the issuance of a license, the licensing authority shall provide for
the holding of a public hearing within the proposed service area, following reasonable
notice to the public, at which every applicant and its proposals shall be examined and
the public and all interested parties afforded a reasonable opportunity to be heard.
Reasonable notice to the public shall include causing notice of the time and place of
such hearing to be published in a newspaper of general circulation in the proposed
service area once a week for two consecutive weeks. The first publication shall be not
less than fourteen days before the day of such hearing. If there is no such newspaper in
the proposed service area, then notice shall be posted in a conspicuous place in the city
or town hall, if applicable, or other suitable location determined by the respective
licensing authority for a period of not less than fourteen days before the day of such
hearing.
9-508 License required before construction;provisions existing systems
A. A new cable television system shall not be constructed within any incorporated
city or town or within the unincorporated area of a county without a license therefor
having first been issued pursuant to the provisions of this article. This subsection
shall not apply to extensions of existing cable television systems wholly within the area
of jurisdiction.
B. Existing cable television systems with existing licenses for a fixed term of
years shall be in compliance with this article for the term of such license.
C. All other existing cable television systems with existing licenses not
specifying a fixed term shall have a term expiring April 1, 1989, or upon the termination
of the license by the licensing authority.
D. Nothing in this section shall preclude a licensing authority from amending a
license to bring the license into conformance with the applicable rules and regulations
of the federal communications commission.
E. A licensing authority may terminate a license according to its terms and
conditions if a license holder is in default thereunder.
9-509 Municipal ownership
A city or town shall not acquire an ownership interest in any commercial cable
television system unless the ownership interest is acquired at not less than fair market
value.
9-510 Control of programming
A licensing authority shall not directly or indirectly control the content of any of
the programming on a cable television system except those channels dedicated to
government access.
9-511.01 Water and wastewater business; rates; procedures
A. A municipality engaging in a domestic water or wastewater business shall not
increase any water or wastewater rate or rate component, fee or service charge without
complying with the following:
1. Prepare a written report or supply data supporting the increased rate or rate
component, fee or service charge. A copy of the report shall be made available to the
public by filing a copy in the office of the clerk of the municipality governing board at
least thirty days prior to the public hearing described in paragraph 2 of this
subsection.
2. Adopt a notice of intention by motion at a regular council meeting to increase
water or wastewater rates or rate components, fee or service charge and set a date for a
public hearing on the proposed increase which shall be held not less than thirty days
after adoption of the notice of intention. A copy of the notice of intention showing the
date, time and place of such hearing shall be published one time in a newspaper of
general circulation within the boundaries of the municipality not less than twenty days
prior to the public hearing date.
B. After holding the public hearing, the governing body may adopt, by ordinance or
resolution, the proposed rate or rate component, fee or service charge increase or any
lesser increase.
C. Notwithstanding section 19-142, subsection B, the increased rate or rate
component, fee or service charge shall become effective thirty days after adoption of the
ordinance or resolution.
9-511.02 Utility user fees; lien enforcement; procedures; definition
A. A city or town may file a lien on property for the nonpayment of utility user
fees for services provided to the property if the payment of the fees is delinquent for
more than ninety days.
B. Before filing the lien, the city or town shall provide written notice to the
owner of the property. The notice shall be given at least thirty days before filing the
lien and shall include an opportunity for a hearing with a designated city or town
official. The notice shall be either personally served or mailed to the property owner,
at the last known address by certified mail, or to the address to which the tax bill for
the property was last mailed. If the owner does not reside on the property, the notice
shall be sent to the last known address.
C. The unpaid utility user fees, from the date of recording in the office of the
county recorder in the county in which the property is located, are a lien on the
property until the fees are paid. The lien is subject and inferior to the lien for
general taxes and to all prior recorded mortgages and encumbrances of record. A sale of
the property to satisfy a lien obtained under this section shall be made on judgment of
foreclosure and order of sale. A city or town may bring an action to enforce the lien in
the superior court in the county in which the property is located at any time after the
recording, but failure to enforce the lien by this action does not affect its
validity. The recorded unpaid utility user fees are prima facie evidence of the truth of
all matters recited in the recording and of the regularity of all proceedings before the
recording.
D. Unpaid utility user fees pursuant to this section accrue interest at the rate
prescribed by section 44-1201.
E. A prior assessment of unpaid utility user fees for the purposes provided in this
section does not bar a subsequent assessment for these purposes and any number of liens
on the same lot or tract of land may be enforced in the same action.
F. The provisions of subsection A of this section do not apply to residential
property occupied by a lessee where the lessee is responsible for payment of the utility
user fees. The city or town shall determine the status of leased residential property
prior to filing the lien.
G. For purposes of this section "utility user fees" means fees charged for the
provision of sewer.
9-511.03 Outside waste or garbage collection services; requirements A. If a city or town provides waste or garbage collection services outside of its boundaries, for those services the city or town shall: 1. Keep all records of the services separate from all other city or town municipal records. 2. Make an in-lieu contribution to all state, city, town, county and other taxing districts equal to the taxes that would be required of private garbage collection and disposal companies performing the same service. 3. Pay an in-lieu contribution to the recycling fund established by section 49-837 equal to the federal taxes that would be required of private garbage collection and disposal companies performing the same service. 4. Pay all fees and costs that are applicable to private companies including landfill fees. 5. Ensure that no city or town taxes, fees or revenues are used to subsidize the waste or garbage collection and disposal services outside the city or town. B. This section does not restrict the ability of a city or town to enter into mutual aid or intergovernmental agreements with other cities or towns to respond to requests for emergency assistance. C. This section shall not apply to a city or town if all of the following apply: 1. The city or town provides waste or garbage collection services outside its boundaries in an unincorporated territory that is within three miles of its boundaries and within its municipal planning area as designated in the land use map of the municipality's general plan. 2. The city or town does not provide waste or garbage services in an incorporated area other than its own. 3. The city or town is located in a county with a population exceeding two million persons or the city or town has a population of less than two thousand five hundred persons and allows private enterprise to provide commercial and residential waste or garbage collection services in the city or town. 9-511 Power to engage in business of publicnature; outside water rates; right of eminent domain
A. A municipal corporation may engage in any business or enterprise which may be
engaged in by persons by virtue of a franchise from the municipal corporation, and may
construct, purchase, acquire, own and maintain within or without its corporate limits any
such business or enterprise. A municipal corporation may also purchase, acquire and own
real property for sites and rights-of-way for public utility and public park purposes,
and for the location thereon of waterworks, electric and gas plants, municipal quarantine
stations, garbage reduction plants, electric lines for the transmission of electricity,
pipelines for the transportation of oil, gas, water and sewage, and for plants for the
manufacture of any material for public improvement purposes or public buildings. If a
municipality provides water to another municipality, the rates it charges for the water
to the public in the other municipality shall be one of the following:
1. The same or less than the rates it charges its own residents for water.
2. The same or less than the rates the other municipality charges its residents for
water.
3. If the other municipality does not provide water, the average rates charged for
water to the residents in the other municipality by private water companies.
4. Rates determined by a contract which is approved by both municipalities and in
which such rates are justified by a cost of service study or by any other method agreed
to by both municipalities.
B. Nothing in this section shall affect a surcharge on water provided to another
municipality adopted prior to July 1, 1986 provided that the surcharge did not exceed
thirty per cent of the rates the municipality providing the water charges its own
residents and except that any increase in the percentage of such surcharge proposed after
August 13, 1986 shall be subject to the requirements of this section.
C. The municipality may exercise the right of eminent domain either within or
without its corporate limits for the purposes as stated in subsection A, and may
establish, lay and operate a plant, electric line or pipeline upon any land or
right-of-way taken thereunder, and may manufacture material for public improvement
purposes and barter or exchange it for other material to be used in public improvements
in the municipal corporation, or sell it to other municipal corporations for like
purposes, and for any and all such purposes.
9-512 Issuance of bonds; service rates
A. The municipal corporation, for any and all purposes provided in section 9-511,
may issue and sell bonds bearing interest not to exceed nine per cent per annum.
B. When the enterprise or public improvement has been purchased or constructed by
means derived from the sale of bonds, the municipality shall fix the rates charged for
service to the public as nearly as practicable so as to pay the interest and not less
than three per cent per annum on the principal of the bonds, in excess of the expense of
maintenance and operation.
9-513 Lease of privately owned utility
A. When it is impracticable to issue bonds as provided by section 9-512 for an
improvement or enterprise deemed necessary for the public welfare, the municipal
corporation may lease at a stipulated rental a public improvement or utility. B. The
rental contract shall reserve to the municipal corporation the option to purchase the
improvement or utility in the future.
9-514 Authority to engage in utilitybusiness
A. Before construction, purchase, acquisition or lease by a municipal corporation,
as authorized in sections 9-511, 9-511.01, 9-511.02, 9-512 and 9-513, of any plant or
property or portion of plant or property devoted to the business of or services rendered
by a public utility shall be undertaken, the construction, purchase, acquisition or lease
shall be authorized by the affirmative vote of a majority of the qualified electors who
are taxpayers of the municipal corporation voting at a general or special municipal
election duly called and held for the purpose of voting upon the question.
B. This section does not apply to the construction, purchase, acquisition or lease
of water or sewage system utilities by a city or town incorporated pursuant to section
9-101.02. 9-515 Purchase of existing utility plant andproperty; valuation; appeal
A. When a municipal corporation and the residents thereof are being served under an
existing franchise by a public utility, the municipal corporation, before constructing,
purchasing, acquiring or leasing, in whole or in part, a plant or property engaged in the
business of supplying services rendered by such public utility, shall first purchase and
take over the property and plant of the public utility.
B. The property and plant shall become the property of the municipal corporation
upon payment by the municipal corporation of the fair valuation thereof within eighteen
months after the determination of the valuation in the manner hereinafter provided.
C. The fair valuation of the public utility shall be the equivalent of the
compensation to be paid for the taking of private property for public use as provided by
article 2, chapter 8 of title 12, and the amount shall be determined by one of the
following methods:
1. By agreement between the municipal corporation and the public utility.
2. By arbitrators chosen in a manner agreed upon at the time by the municipal
corporation and the public utility.
3. By a court of competent jurisdiction determining the compensation for the taking
of private property for public use as provided by article 2, chapter 8 of title 12.
D. The municipal corporation and the public utility shall have right of appeal as
provided by article 2, chapter 8 of title 12.
9-516 Declaration of public policy; eminentdomain
A. It is declared as the public policy of the state that when adequate public
utility service under authority of law is being rendered in an area, within or without
the boundaries of a city or town, a competing service and installation shall not be
authorized, instituted, made or carried on by a city or town unless or until that portion
of the plant, system and business of the utility used and useful in rendering such
service in the area in which the city or town seeks to serve, has been acquired.
B. The city or town which seeks to acquire the facilities of a public service
corporation shall have the right to do so under eminent domain. Such action shall be
brought and prosecuted in the same manner as other civil actions.
C. A city or town acquiring the facilities of a public service corporation
rendering utility service without the boundaries of such city or town, or which renders
utility service without its boundaries, shall not discontinue such service, once
established, as long as such city or town owns or controls such utility. A city or town
which renders utility service outside of its boundaries as prescribed by this subsection
shall not be prohibited from selling a part of its utility operation to another utility
which operates under regulations prescribed by law.
D. It is declared the public policy of the state that when a city or town has
purchased the property or plant of a public utility serving in an area within or without
the boundaries of the city or town pursuant to this article, the corporation commission
shall not be authorized or empowered to grant a new certificate of convenience and
necessity or franchise to any person, firm or corporation to provide the same kind of
public utility service within the area or territory previously authorized to said public
utility under its certificate of convenience and necessity or franchise, but if the city
or town refuses to provide utility service to a portion or part of the area or territory
previously authorized to the public utility, the corporation commission may issue a new
certificate of convenience and necessity or franchise to a public utility to provide
utility service in that portion or part of the area or territory.
9-517 Exception to purchase requirement
When a public utility operating under an existing franchise wilfully and
persistently violates any provision of the franchise, the municipal corporation shall
thereby be relieved from purchasing or taking over the property or plant of the public
utility.
9-518 Compensation for taking public utility;procedure for determining
A. Whenever the fair valuation of the plant and property of a public utility has
not for any reason been determined by any other method provided by law, or where no other
method is provided, the city or town may, subject to the provisions of this section, by
the exercise of the right of eminent domain institute an action pursuant to article 2,
chapter 8, of title 12, and the court or jury shall, in the manner hereinafter provided,
ascertain and assess the compensation to be paid for the taking of the plant and property
of the public utility.
B. The court or jury shall ascertain the compensation to be paid for the taking of
the plant and property of the public utility, which shall include the fair and equitable
value of such plant and property, including its value as a going concern, and the actual
and consequential damages, if any, sustained by the public utility by reason of the
severance from the other plant and property of the public utility of the plant and
property to be taken. Compensation and damages shall be fixed as of the date of the
commencement of the trial at which such compensation and damages are finally determined.
C. Any party of the action may appeal to the supreme court in the same manner as is
provided for appeals in other civil actions by filing a notice of appeal with the
superior court within thirty days from the entry of the judgment or order appealed from
and posting a bond for costs. Any such appeal to the supreme court shall be preferred
and shall be heard and determined in preference to other civil matters, except election
actions, habeas corpus, quo warranto, mandamus, injunction and other extraordinary writs
to state officers and inferior courts of which the supreme court has original
jurisdiction.
D. Within six months after the date when the judgment has become final following an
appeal, or within six months after the expiration of the time allowed by this section for
appeal if no appeal is taken, the city or town shall pay into court the amount fixed by
the judgment for the use of the public utility and such other persons as the judgment may
provide. The public utility and such other persons as the judgment may provide who are
entitled to the money paid into court may demand and receive the money at any time after
its deposit upon filing a satisfaction of the judgment or a receipt for the money. If
the city or town fails or refuses to pay the amount of the judgment into court within
such period of six months, the court shall vacate the judgment and enter judgment
dismissing the complaint and taxing costs in favor of the defendants in the action,
including in such event a reasonable allowance for engineering costs and expert witness
fees.
E. Within thirty days after the date when the judgment becomes final following an
appeal, or within thirty days after the expiration of the time allowed for appeal if no
appeal is taken, the public utility shall file with the court a report, verified under
oath, of the amounts actually expended by it for additions, betterments, improvements and
extensions which it has been required to make between the date of the commencement of
trial and the date of such report, together with an estimated forecast of the amounts it
will be required to make for the public convenience and necessity during the ensuing six
months. Thereafter, and until the expiration of the time provided for the payment by the
city or town of the amount of the judgment into court, the public utility shall every
thirty days file with the court a verified supplemental report of the amounts it has
actually expended for such purposes since the date of the initial report. Such reports
may be considered by the court in determining the amount of the deposit to be made or
bond to be posted by the city or town as provided by subsection F, and may be considered
at the trial provided by subsection I but shall not be conclusive of the amount to be
ascertained as the compensation to be paid by the city or town for such additions,
betterments, improvements and extensions.
F. Upon payment of the amount of the judgment into court within the time provided,
the city or town shall make application to the court for an order permitting it to take
possession of, and use and operate the plant and property of the public utility,
including the additions, betterments, improvements and extensions for the public
convenience and necessity which the public utility has been or will be required to make
between the date of the commencement of the trial and the date of taking possession
thereof by the city or town. Upon filing the application a time shall be fixed by the
court for a hearing to determine the probable fair and equitable value of such additions,
betterments, improvements and extensions, and written notice of such hearing shall be
given to the public utility and other defendants, if any, at least ten days prior to the
date fixed, by service of a copy of such notice in such manner as the court directs. On
the day fixed for the hearing, the court shall determine the probable value of the
additions, betterments, improvements and extensions which the public utility has been
required to make since the date of the commencement of the trial, and shall direct that
upon deposit of money, or the posting of a bond with good and sufficient sureties, in the
amount so determined, the city or town shall be let into the possession and full use of
the plant and property of the public utility described in the judgment, together with the
additions, betterments, improvements and extensions made since the date of commencement
of the trial. Upon deposit of the money or the posting of a bond in the required amount,
the city or town may go into the possession and full use of the plant and property of the
public utility, described in the judgment, together with the additions, betterments,
improvements and extensions referred to in the order of the court. No appeal may be
taken from an order of the court determining the amount of the deposit to be made or the
bond to be posted by the city or town.
G. The parties may stipulate as to the amount of the deposit or of the bond in lieu
of the deposit; but such stipulation or evidence of such deposit or of the bond shall not
be introduced in evidence or used to the prejudice of any party to the action.
H. At the hearing to fix the probable value of the additions, betterments,
improvements and extensions, the court shall direct the parties to file such supplemental
pleadings as the court may deem necessary to set forth the claims of the public utility
with respect to such value and the response of the city or town thereto, shall fix the
time within which such pleadings should be filed, and shall set the matter for trial
before the court or a jury for the purpose of ascertaining the compensation to be paid
for the additions, betterments, improvements and extensions required to be made by the
public utility between the date of commencement of the trial and the date the city or
town is let into possession of the public utility's plant and property.
I. The court or jury shall ascertain the compensation to be paid for additions,
betterments, improvements and extensions, which shall be the fair and equitable value
thereof as of the date the city or town took possession of the public utility plant and
property, and the amount so determined shall draw interest at the legal rate from such
date. In fixing such value such additions, betterments, improvements and extensions
shall not be considered or treated as being severed from the plant and property included
in the judgment theretofore entered. Such additions, betterments, improvements or
extensions shall be deemed to have been made for the public convenience and necessity, if
such additions, betterments, improvements or extensions are found by the court to have
been reasonably necessary and prudently made as incidental capital expense in the
ordinary and usual conduct of a public utility business, or if the additions,
betterments, improvements or extensions were ordered to be made by the corporation
commission. Upon such value being determined a supplemental judgment shall be entered
therefor, from which any party to the action may appeal to the supreme court in the same
manner and within the same time as is provided for appeals from the judgment in the
action, except that any asserted grounds for appeal shall be limited to those arising in
the proceeding to fix the compensation to be paid for the betterments, additions,
improvements and extensions.
J. Within ninety days after the date said supplemental judgment has become final
following an appeal, or within ninety days after the expiration of the time allowed for
appeal if no appeal is taken, the city or town shall pay into court all amounts fixed by
the supplemental judgment for the use of the public utility and such other persons as the
supplemental judgment shall provide, less any amount theretofore deposited with the court
if such amount be less than the supplemental judgment. If the city or town shall have
posted a bond, all amounts provided by the supplemental judgment shall be paid into court
and the bond exonerated. The public utility and such other persons as the supplemental
judgment may provide may demand and receive from the money deposited the amount of the
supplemental judgment with interest and costs, if any.
K. If the complaint of the city or town is dismissed as provided by subsection D,
no action in court to acquire or take the same plant and property of the public utility,
or any portion thereof, shall be instituted by the city or town within three years after
such dismissal.
L. All proceedings and trials provided by this section shall be preferred and shall
be heard and determined in preference to other civil matters, except election actions.
M. The provisions of this section for ascertaining and assessing compensation for
the taking of the plant and property of a public utility and the obtaining of possession
and use of such property by a city or town are intended to be remedial.
9-519 Common carriers; duplication of serviceprohibited
When territory within or without the corporate limits of a municipal corporation is
being adequately served by a common carrier of passengers under authority of law, the
municipal corporation shall not engage in business as a common carrier of passengers over
the route or routes or within the territory being served by the common carrier.
9-520 Provision of electric generationservices; competition; definitions
A. A city or town that provides electric distribution service shall not sell
electric generation service outside of its service territory as constituted on January 1,
1998, or as later amended by mutual agreement, unless the city or town has agreed to
allow other electricity suppliers to make sales of electric generation service within its
service territory.
B. Notwithstanding section 9-516, subsection A, a city or town that provides
electric distribution service may sell electric generation service outside of its service
territory if the city or town meets the requirements of subsection A of this section.
C. In this section, unless the context otherwise requires:
1. "Electric distribution service" means the distribution of electricity to retail
customers through the use of electric distribution facilities.
2. "Electric generation service" means the provision of electricity for sale to
retail electric customers but does not include electric distribution or transmission
services.
3. "Electric transmission service" means the transmission of electricity to retail
electric customers or to electric distribution facilities and that is so classified by
the federal energy regulatory commission or, to the extent permitted by law, so
classified by the ARIZONA corporation commission.
4. "Electricity supplier" means a person, whether acting in a principal, agent or
other capacity, who offers to sell electricity to a retail electric customer in this
state.
5. "Service territory" means the geographic area in which a public power entity or
public service corporation owns, operates, controls or maintains electric distribution
facilities and that additional area in which the public power entity or public service
corporation has agreed to extend electric distribution facilities, whether established by
a certificate of convenience and necessity, by official action by a public power entity
or by contract or agreement.
9-521.01 Recreational facilities
A. For the purposes of this article only, the term "utility undertaking", in
addition to the definition prescribed in section 9-521, shall mean recreational
facilities.
B. "Recreational facilities" means swimming pools, parks, playgrounds, municipal
golf courses, and ball parks.
C. Provisions of this section shall apply only to municipalities of seventy-five
thousand or less.
9-521 Definitions
In this article, unless the context otherwise requires:
1. "Bond" means any bond issued pursuant to this article, including any tax secured
bond.
2. "Governing body" means the board, commission or other body having charge of the
financial affairs of a municipality.
3. "Municipality" means any incorporated city or town.
4. "Tax secured bond" means any bond authorized and issued pursuant to both this
article and title 35, chapter 3, article 3.
5. "Utility undertaking" means any one or combination of the following:
(a) Electric light or power, water, storm water, sewer, gas, common carrier of
passengers, garbage, or rubbish plant or system, including but not limited to disposal,
treatment or reduction plants, buildings, incinerators, dams and reservoirs.
(b) Airport buildings or other airport facilities or buildings or structures to
provide off-street parking of motor vehicles, together with all parts thereof and
appurtenances thereto.
9-522 Power to issue bonds
A. In addition to its other powers, a municipality may:
1. Subject to the requirements and restrictions of sections 9-515 through 9-518,
within or without its corporate limits, construct, improve, reconstruct, extend, operate,
maintain and acquire, by gift, purchase or the exercise of the right of eminent domain, a
utility undertaking or part thereof, and acquire in like manner land, rights in land or
water rights in connection therewith.
2. Issue its bonds to finance the cost thereof.
3. Pledge to the punctual payment of the bonds and interest on such bonds an amount
of the revenue of the utility undertaking, including improvements or extensions
thereafter constructed or acquired, sufficient to pay the bonds and interest as they
become due, and create and maintain reasonable reserves therefor. The amount pledged may
consist of all or any part of such revenue.
4. With respect to tax secured bonds, pledge its full faith and credit to the
payment of the bonds and interest on such bonds and if such pledge is made shall provide
for the levy of a tax for the payment of the bonds pursuant to title 35, chapter 3,
article 3.
B. The governing body of the municipality, in determining the cost of the utility
undertaking for which bonds are to be issued, may include all costs and estimated costs
of issuance of the bonds, all engineering, inspection, fiscal and legal expenses allowed
by law and interest which it is estimated will accrue on money borrowed or which will be
borrowed during the construction period and for six months thereafter.
9-523 Bond election
Questions on bond issues under this article shall be submitted to the qualified
electors of the municipality. No bonds shall be issued without the assent of a majority
of the qualified electors voting at an election held for that purpose as provided in this
article.
9-524 Election order and call; publication;posting
A. The governing body shall order and call an election upon the question of the
issuance of bonds. The order and call shall state in substance:
1. The maximum amount of bonds to be issued.
2. The purpose for which the bonds are to be issued.
3. The maximum rate of interest which the bonds are to bear.
4. A brief concise statement, which need not include any detail other than the mere
statement of the fact, showing that the bonds will be payable solely from revenues unless
the bonds are to be tax secured bonds in which case the order and call shall state in
substance that the bonds shall be payable from revenues and shall additionally be payable
from taxes levied upon all taxable property in the municipality.
5. The date on which the election is to be held.
6. The places where votes may be cast.
7. The hours between which polling places will be open.
B. The order and call of election shall be published in full at least once, not
less than fifteen nor more than thirty days prior to the date of the election, in a
newspaper published in the county and of general circulation in the municipality. If
there is no such newspaper, the order and call shall be printed in full and posted in
five conspicuous places in the municipality not less than fifteen nor more than thirty
days prior to the date of the election.
C. If the bonds are to be tax secured bonds the order and call of election shall
state, in addition to the requirements of subsection A, the matters required by title 35,
chapter 3, article 3 and shall be posted and published as required by that article rather
than as provided in subsection B.
9-525 Registration of voters
The governing body may require the registration of all persons desiring to vote at
the election, in which case the election resolution shall state the dates, times and
places when and where such persons may register. Registration shall begin not less than
ten and shall close not less than five days prior to the date of the election.
9-526 Form of ballot
At the election the ballot shall contain the phrases "For the Bonds" and "Against
the Bonds." To the right of and opposite each phrase shall be placed a square
approximately the size of squares placed opposite the names of candidates on
ballots. The voter shall indicate his vote "For the Bonds" or "Against the Bonds" by
inserting the mark "X" in the square opposite such phrase. No other question, word or
figure need be printed on the ballot. The ballot need not be any particular size, nor
need sample ballots be printed, posted or distributed. A number of ballots, exceeding by
not less than ten per cent the number of registered voters whose names appear on the
precinct register of the precinct, town or city for which printed, shall be printed and
furnished each polling place.
9-527 Canvass of votes
A. The governing body shall canvass the returns and declare the result of the
election. If it appears to the governing body that a majority of the qualified electors
voting thereon assent to issuance of the bonds, the governing body shall provide for
their issuance.
B. The determination of the governing body that a majority of the qualified
electors voting thereon have assented to issuance of the bonds shall be conclusive in any
action or proceeding involving the validity of the election or determination or
declaration of the result thereof instituted after the date of delivery of and payment
for the bonds.
9-528 Application of election laws
Except as otherwise provided in this article, the manner of conducting the
registration and election, keeping the poll lists, making the returns, declaring the
results and doing all acts relating to the election shall conform to the procedure
provided by law for the registration and qualification of electors and holding special
elections wherein the question of issuance of bonds of municipal corporations is
submitted to an election.
9-529 Form of bonds; payment and call;interest; sale; bids; interim receipts; rates and procedures;definition
A. Bonds issued under this article shall be fully negotiable within the meaning and
for all purposes of title 47. They may be in one or more series, may bear dates, may be
payable in a medium of payment, at places, may carry registration privileges, shall be
executed in a manner, may contain other terms, covenants and conditions, and be in a form
as the governing body may by resolution prescribe. They shall be payable at one time, or
from time to time, in a manner and in maturities not longer than thirty years from their
date as the governing body may prescribe. Any or all of the bonds may be callable at
times, on terms and in a manner as the governing body by resolution may prescribe.
B. Any or all of the bonds may be sold by calling for bids at public sale or
through an on-line bidding process, or bonds may be sold under an accelerated bidding
process. If sold under an accelerated bidding process, the bonds shall be sold at the
lowest cost the governing body deems then available after having received at least three
pricing quotations from recognized purchasers of bonds of the type being sold, and if
sold at public sale or through an on-line bidding process to the person offering the best
bid.
C. The bonds may be sold below, at or above par. If the bonds are sold below par,
the aggregate amount of discount plus interest to be paid on the bonds must not exceed
the amount of interest that would be payable on the bonds over the maturity schedule
prescribed by the governing body at the maximum rate set out in the resolution calling
the election at which the bonds were voted.
D. If sold at public sale, the governing body shall call for bids by giving notice
of the sale at least once a week for two successive weeks in cities having a population
of fifteen thousand or more persons according to the most recent federal census, and once
a week for four successive weeks in all other cities and towns by publication in a
newspaper of general circulation within the county. The notice shall be in the form the
governing body prescribes. If bonds are sold through an on-line bidding process, bids for
the bonds that are entered into the system may be concealed until a specified time or
disclosed in the on-line bidding process, may be subject to improvement in favor of the
municipality before a specified time and may be for an entire issue of bonds or specified
maturities according to the manner, terms and notice provisions ordered by the governing
body. These bids shall be for the entire bond issue unless the governing body by
resolution allows bidding in parcels for less than the entire issue.
E. Notwithstanding any other provision of this section, bonds may be sold to
natural persons residing in this state by negotiated sale on terms the governing body
deems to be the best then available and may bear interest payable at such times as
determined by the governing body. The bonds may be sold below, at or above par, but if an
issue of bonds is sold below par, the aggregate amount of discount plus interest to be
paid on the bonds must not exceed the amount of interest that would be payable on the
bonds over the maturity schedule prescribed by the governing body at the maximum rate set
out in the resolution calling the election at which the bonds were voted.
F. Pending preparation of the definitive bonds, interim receipts or certificates
may be issued to the purchasers of the bonds in a form and with provisions as the
governing body may determine.
G. Bonds issued by municipalities may bear interest at any rate or rates not in
excess of the maximum rate of interest set forth in the resolution calling the election,
payable at the times determined by the governing body, provided that each bond may be
evidenced by one instrument, or if commercial paper by a succession of instruments each
bearing interest payable only at maturity. Bonds or commercial paper issued under this
article shall be subject to the following:
1. The bonds may bear interest at a fixed, variable or combination rate, none of
which exceeds the maximum rate of interest set forth in the resolution calling the
election.
2. A variable rate shall be based on any objective measure of the current value of
money borrowed such as the announced prime rate of a bank, the rates borne by obligations
of the United States or an index or other formula provided for by the governing
body. The governing body shall employ a recognized agent in municipal bonds to market
and remarket the bonds or commercial paper issued and to establish an interest rate in
accordance with the approved index or formula.
3. The governing body may grant to the owner of any bond a right to tender or may
require the tender of the bond for payment or purchase at one or more times before
maturity and may enter into appropriate agreements with any bank, other financial
institution, insurance company or indemnity company for the purchase of bonds so
tendered. The agreement may provide that while the bonds are held by the bank,
financial institution, insurance company or indemnity company the bonds may bear interest
at a rate higher than when the bonds are held by other owners, but not in excess of the
maximum rate of interest set forth in the resolution calling the election.
4. If bonds are tendered before maturity under an agreement to pay for or purchase
bonds when tendered, the municipality may provide for the purchase and resale of the
bonds pursuant to the tenders without extinguishing the obligation represented by them or
incurring a new obligation on the resale, whether or not the bonds are represented by the
same instruments when purchased as when resold.
5. Compensation for the resale of the bonds shall not be based on or measured by
the difference between the price at which the bonds are purchased and the price at which
they are resold.
6. The governing body may:
(a) Contract with a bank, other financial institution, insurance company or
indemnity company to provide additional security for the bonds in the form of a line of
credit, letter of credit, insurance policy or other security.
(b) Pay the costs of the additional security from amounts provided in the bond
issue or from other available sources and may enter into reimbursement obligations in
connection with the cost of the additional security.
7. Any reimbursement obligation entered into with the bank, financial institution,
insurance company or indemnity company shall not provide for the payment of interest in
excess of the maximum rate of interest set forth in the resolution calling the
election. The reimbursement obligation does not constitute a general obligation of the
municipality and is payable from the same source as the bonds, or from other available
revenues, as determined by the governing body. However, use of other available revenues
does not create an indebtedness under article IX, section 8, Constitution of ARIZONA.
8. Variable rate bonds and commercial paper may be sold at competitive public sale,
through an on-line bidding process or at negotiated sale. A competitive public sale may
be accomplished pursuant to a notice of sale published at the times and in the manner
provided in this section. The notice shall provide terms and conditions as may be
determined by the governing body.
9. If bonds are to be issued in the form of commercial paper, the governing body
shall first establish the schedule for the maturities of the bonds within the maximum
period permitted by the voted proposition. The individual instruments representing the
bonds may mature over shorter periods and may be retired before maturity with proceeds of
subsequent instruments, or with the proceeds of definitive bonds, but they shall be
finally paid according to the schedule of bond maturities or earlier.
10. Bonds issued in the form of commercial paper may be sold through an agent in the
form of instruments which mature at intervals the agent determines to be most
advantageous to the issuer after giving public notice to potential investors as
determined by the governing body.
11. Bonds may be issued as compound interest bonds bearing interest payable only at
maturity but compounded periodically until that date at a fixed rate no higher than the
rate set forth in the resolution calling the election.
H. For purposes of this section, "on-line bidding process" means a procurement
process in which the governing body receives bids electronically over the internet in a
real-time, competitive bidding event.
9-530 Service charges; taxation and budgeting;computation
A. The governing body of the municipality issuing the bonds shall prescribe service
charges, and shall revise them when necessary, so that a utility undertaking for which
the bonds were issued shall always remain self-supporting with revenue sufficient:
1. To pay when due all bonds, interest and continuing fees and expenses on the
bonds or, if applicable, on the reimbursement agreement, for the payment of which the
revenue has been pledged, encumbered or charged.
2. To provide for all expenses of operation, maintenance, expansion and replacement
of facilities.
3. To provide reasonable reserves.
B. Until payment of all bonds on any public utility issued under this article, and
the expiration of the municipal fiscal year in which the bonds are paid in full, no
receipts segregated or collected for the purpose of paying the principal of and interest
and redemption charges on bonds and other lawful long-term obligations issued or incurred
for a specific capital purpose shall be subject to the provisions of title 42, chapter
17.
C. In computing the annual interest requirements of bonds described in section
9-529, subsection G, the governing body shall determine a rate which is not more than the
maximum rate permitted under the terms of their issuance. In making the determination,
the governing body shall set a rate that is not less than one hundred twenty-five per
cent of the rate in effect on the date of determination, or if the bonds are not then
issued, one hundred twenty-five per cent of the initial rate on the bonds, except that if
such determination exceeds the maximum rate permitted under the terms of issuance, the
rate shall be the maximum rate.
9-531 Provisions of resolution for bond issue;covenants
A. A resolution pertaining to issuance of bonds under this article may contain
covenants as to:
1. The purpose to which the proceeds of sale of the bonds may be applied and to the
use and disposition thereof.
2. The use and disposition of the revenue of the utility undertaking for which the
bonds are to be issued.
3. The issuance of other or additional bonds, payable from the revenue of the
utility undertaking.
4. The operation and maintenance of the utility undertaking.
5. The insurance to be carried thereon and the use and disposition of insurance
monies.
6. Books of account and the inspection and audit thereof.
7. The terms and conditions upon which the holders of the bonds, or any proportion
of them or a trustee therefor, shall be entitled to the appointment of a receiver, who
may enter and take possession of the utility undertaking, operate and maintain it,
prescribe charges and collect, receive and apply all revenue thereafter arising therefrom
in the same manner as the municipality itself might do.
B. The provisions of this article and any such resolution shall be deemed a
contract with the holders of the bonds, and the duties of the municipality and its
governing body and officers under this article and such resolution shall be enforceable
by mandamus or other appropriate action in a court of competent jurisdiction.
9-532 Utility receipts and bond proceeds;handling and disposition
A. All proceeds received from sale of the bonds, all fees, rents, tolls or other
charges received by the municipality from a utility undertaking financed by the bonds,
and all monies received from any source in connection therewith shall be paid to the
finance officer of the municipality designated by the governing body thereof for such
purposes. The finance officer shall not commingle any money received under the terms of
this article with any other monies, but the monies received shall be deposited in a
separate bank account in the name of the municipality.
B. The governing body may by resolution provide that all deposits of such proceeds,
fees, rents, tolls or other charges, and the monies received under the terms of this
article shall be secured by obligations of the United States or of this state of a market
value equal at all times to the amount of the deposits provided by this article, and all
banks and trust companies are authorized to give such security for the deposits.
9-533 Validity of bonds
A. Bonds issued under this article and bearing the signatures of officers in office
on the date of the signing thereof shall be valid and binding obligations,
notwithstanding that before the delivery thereof and payment therefor any or all of the
persons whose signatures appear thereon have ceased to be officers of the municipality
issuing the bonds.
B. The validity of the bonds shall not be dependent on or affected by the validity
or regularity of any proceedings relating to the construction, acquisition, improvement,
reconstruction or extension of the utility undertaking financed by the bonds or taken in
connection therewith.
9-534 Certification of bonds by attorneygeneral
A. A municipality may submit to the attorney general bonds to be issued under this
article after all proceedings for their issuance have been taken, and thereupon it shall
be the duty of the attorney general to examine the bonds and pass upon the validity
thereof and the regularity of the proceedings authorizing their issuance.
B. If such proceedings conform to the provisions of this article, and the bonds
when delivered and paid for will constitute binding and legal obligations of the
municipality according to the terms thereof, the attorney general shall certify in
substance upon the back of each bond that it is issued in accordance with the
constitution and laws of this state.
9-535.01 Refunding bonds and revenue-producing undertaking; refunding utility purchase contracts; form; sale and investment of proceeds; limitation on amount issued
A. Bonds may also be issued hereunder for the purpose of refunding any bonds issued
under authority of this article or any bonds issued under the authority of title 35,
chapter 3, article 3 or 4, for the acquisition, construction or improvement of any
utility undertaking. If any city or town has outstanding unpaid balances on contracts
heretofore entered into for the acquisition of water or other utility properties or
facilities and such contracts are payable solely from the revenues thereof or of the
utility undertaking extended or added to with the properties or facilities so acquired,
whether or not title to such properties or facilities shall have vested in such city or
town, all or any part of such unpaid balances may also be refunded hereunder and all such
contracts so refunded are hereby validated and declared to be effective in accordance
with their terms. No election on the issuance of such bonds shall be required, but if
such bonds are combined into a single issue with bonds authorized for nonrefunding
purposes hereunder, the bonds so authorized for nonrefunding purposes shall have been
submitted at an election as otherwise provided in this article.
B. Refunding bonds issued hereunder shall have such details, shall bear such rate
or rates of interest, and shall be otherwise issued, sold and secured as provided by the
governing body of the city or town and as otherwise provided in this article, except that
such changes in the security and revenues pledged to the payment of the obligations so
refunded may be made by the governing body as may be provided by it in the proceedings
authorizing such bonds, but in no event shall such bonds ever become a general obligation
of the municipality issuing such refunding bonds unless such refunding bonds or the bonds
to be refunded are tax secured bonds.
C. Refunding bonds issued hereunder may be exchanged for no less than a like
principal amount of the bonds or unpaid contract obligations to be refunded, may be sold
at a private or public sale or may be exchanged in part and sold in part. However, if
refunding bonds issued hereunder are combined into a single issue with bonds authorized
for nonrefunding purposes, such nonrefunding bonds shall be sold at a public sale in the
manner herein provided for the sale of other revenue bonds. If sold, the net proceeds
may be invested in obligations issued by the United States government, or one of its
agencies, or obligations fully guaranteed by the United States government as to principal
and interest so long as such investments will mature with interest so as to provide funds
to pay when due, or called for redemption, the bonds or unpaid contract obligations to be
refunded together with interest thereon and redemption premiums, if any, and such
proceeds or obligations shall, and other funds legally available to the city or town for
such purposes may be deposited in trust with a banking corporation or association doing
business in ARIZONA which is a member of the federal deposit insurance corporation, or
any successor thereto, to be held for the payment and redemption of bonds or unpaid
contract obligations to be refunded and such deposit and any reinvestment thereof shall
be held in trust by the escrow agent for the payment of bonds or unpaid contract
obligations with interest and redemption premiums, if any, on maturity or upon an
available redemption date or upon an earlier voluntary surrender with the consent of the
issuer. As to obligations so escrowed for the payment of contract balances payable in
amounts or at times not fixed but dependent on earnings of the undertaking, it shall be
sufficient if the obligations so purchased, if liquidated on the market at the par value
thereof, will produce enough to pay such balances as the governing body estimates would
have become payable under the terms of the contracts had such balances not been refunded,
but the escrowed obligations must be not less in principal amount than the principal
amount of the balances so refunded, and if at any time the income from the escrowed
obligations is insufficient to pay all interest when payable on such refunded balances,
such deficiencies shall be made up from the earnings of the undertaking on such priority
basis as would have been applicable to such payment had such balances not been
refunded. The term "net proceeds" as used above shall mean the gross proceeds of the
refunding bonds after the deduction therefrom of all accrued interest and expenses
incurred in connection with the authorization and issuance of the bonds and the refunding
of the outstanding obligations, including all cost and expenses resulting from price
variation to par or otherwise incurred in the purchase of obligations for escrow and in
the distribution of the refunding bonds. The determination of the governing body issuing
refunding bonds that the limitations herein imposed upon the issuance of refunding bonds
have been met shall be conclusive in the absence of fraud or arbitrary and gross abuse of
discretion.
D. Bonds or unpaid contract obligations not maturing or callable for redemption
under their terms may not be refunded hereunder without the consent of the holders unless
the proceedings authorizing the issuance of the refunded bonds provide that they may be
so refunded.
E. With respect to bonds issued to refund tax secured bonds, the provisions of
title 35, chapter 3, article 4 shall govern in the event of any inconsistency between
such article and this section.
9-535 Prior lien of bonds
A. Except as otherwise provided in the resolution authorizing the bonds, all bonds
of the same issue under this article shall have a prior and paramount lien on the revenue
of the utility undertaking for which the bonds have been issued over and ahead of bonds
of an issue payable from that revenue which may be subsequently authorized, and over and
ahead of claims or other obligations of any nature against that revenue subsequently
arising or subsequently incurred.
B. Bonds of the same issue issued under this article shall be equally and ratably
secured, without priority by reason of number, date, sale, execution or delivery, by a
lien on the revenue in accordance with the terms of the resolution authorizing the bonds.
9-536 Payment of bonds
A. No holder of bonds issued under this article shall have the right to compel any
exercise of the taxing power of the municipality to pay the bonds or the interest on such
bonds. Each bond issued under this article shall recite in substance that payment of the
bond and interest on such bond is enforceable exclusively from the revenue pledged to its
payment.
B. Bonds issued under this article shall not be a debt of the municipality, nor
shall payment of such bonds be enforceable out of any funds other than the revenue
pledged to the payment of such bonds.
C. This section shall not apply to tax secured bonds issued pursuant to both this
article and title 35, chapter 3, article 3.
9-537 Supplemental nature of article
In so far as the provisions of this article are inconsistent with any other
provision of law, the provisions hereof shall be controlling. The powers conferred by
this article shall be in addition and supplemental to the powers conferred by any other
law. Except as expressly provided in this article, the utility undertaking may be
constructed, improved, reconstructed, extended and acquired, notwithstanding any other
law providing for the construction, improvement, reconstruction, extension or acquisition
of a like utility undertaking and without regard to the requirements, restrictions or
other provisions contained in any law, including, but not limited to, sections 9-511 to
9-514, inclusive. Bonds may be issued under this article for any utility undertaking,
notwithstanding that any other law may provide for the issuance of bonds for a like
purpose and without regard to the requirements, restrictions or provisions contained in
any other law.
9-538 Validation of prior bonds
Bonds lawfully issued under the provisions of chapter 4, session laws of 1940, first
special session, and chapter 107, session laws of 1941, regular session, are validated
and confirmed.
9-539 General powers of municipality underarticle
There is vested in a municipality by this article full power:
1. To issue revenue bonds for the purpose of paying the cost of the improvement,
reconstruction, extensions and additions to any existing revenue-producing utility of any
kind or class at the time owned and operated by the municipality, however acquired.
2. To pledge to the punctual payment of the revenue bonds and interest thereon the
revenues of such existing revenue-producing utility, after making reasonable allowance
for the cost of maintenance and operation thereof, together with the revenues of such
utility undertaking, improvement, reconstruction, extensions and additions thereto for
which the revenue bonds are to be issued.
3. To provide in the resolution pertaining to the issuance of revenue bonds for the
use and disposition of all revenues pledged therein to the payment of principal and
interest of the bonds, including the revenues of the existing revenue-producing utility
to the fullest extent provided in the resolution and in addition thereto the revenues of
the utility undertaking for which the bonds are to be issued, all on such terms and in
such manner as the governing body of the municipality may provide or has in the
resolution so provided.
9-540 Validation of prior acts and proceedings;criterion for compliance
All acts and proceedings taken prior to March 13, 1947 by a municipality under this
article, or under color of this article, for the authorization, issuance or sale of
revenue bonds for any purpose stated therein, are confirmed, validated and declared
legally effective, including all acts and proceedings of the governing body of such
municipality and of any person, public officer, board or agency done or taken prior to
March 13, 1947 upon the question of the authorization, issuance or sale of such
bonds. All bonds authorized to be issued under this article whenever delivered in
substantially the form contemplated in such authorization, shall be in the form and
manner in which delivered valid, legal and binding obligations of the municipality,
payable in accordance with the resolution pertaining to their issuance and secured by the
revenues therein pledged and allocated to their payment, and by the covenants and
agreements set forth in the resolution authorizing their issuance.
9-551 Definitions
In this article, unless the context otherwise requires:
1. "Industrial gas pipeline" means any pipeline or system of pipelines and all
necessary appurtenances to the pipeline or system used to transport inert, nontoxic,
nonflammable gas for industrial purposes to industrial users who pay for the service but
does not include any pipeline or system of pipelines that transports gas for power, light
or fuel.
2. "Intergovernmental contract" means a joint exercise of powers agreement
authorized by title 11, chapter 7, article 3.
3. "License" means that ordinance or resolution which contains the right, authority
or grant given by a licensing authority enabling the license holder to construct, operate
and maintain an industrial gas pipeline.
4. "Licensing authority" means the board of supervisors of a county or the
governing body of an incorporated city or town.
9-552 Authority to issue license
A. For the purpose of authorizing and regulating the construction, operation and
maintenance of industrial gas pipelines, the licensing authority of a city or town for an
incorporated area, or the licensing authority of a county for an unincorporated area,
either individually or jointly by intergovernmental contract, may issue a license to any
person to use public streets, roads and alleys and shall impose conditions, restrictions
and limitations upon the use of the public streets, roads and alleys and upon the
construction, operation and maintenance of industrial gas pipelines.
B. The licensing authority may adopt resolutions or ordinances implementing and
controlling the license or joint license. The license issued by a licensing authority
may contain provisions and may establish a permit fee.
9-553 Application for license; hearing; terms;conditions
A. Any person desiring to obtain a license to construct, operate and maintain an
industrial gas pipeline from a licensing authority shall apply to the licensing authority
in a form specified by the licensing authority and shall comply with requirements
specified by the licensing authority.
B. Prior to the issuance of a license, the licensing authority shall hold a public
hearing within the city, town or county where application has been made, following
reasonable notice to the public, at which every applicant and its proposals shall be
examined and the public and all interested parties afforded a reasonable opportunity to
be heard. Reasonable notice to the public includes causing notice of the time and place
of the hearing to be published in a newspaper of general circulation in the city, town or
county where application has been made once a week for two consecutive weeks. The first
publication shall not be less than fourteen days before the day of the hearing. If there
is no such newspaper in the city, town or county where application has been made, notice
shall be posted in a conspicuous place in the city or town hall, if applicable, or other
suitable location determined by the respective licensing authority for a period of not
less than fourteen days before the day of the hearing.
9-554 License required beforeconstruction
A. A new industrial gas pipeline shall not be constructed within any incorporated
city or town or within the unincorporated area of a county before a license is issued as
provided in this article.
B. A licensing authority may terminate a license according to its terms and
conditions if a license holder is in default under the license.
9-571 Wastewater treatment and drinking watertreatment facilities and nonpoint source projects; financialassistance loan repayment agreements; definitions
A. Notwithstanding any other law, a city or town may construct, acquire from a
willing seller or improve a wastewater treatment facility, drinking water facility or
nonpoint source project with monies borrowed from or financial assistance including
forgivable principal provided by the water infrastructure finance authority of ARIZONA.
B. To repay financial assistance from the water infrastructure finance authority of
ARIZONA a city or town may enter into a financial assistance loan repayment agreement
with the authority. A financial assistance loan repayment agreement is payable from any
revenues otherwise authorized by law to be used to repay long-term obligations. If
revenue from a property tax assessment is the designated source of repayment under the
agreement, the property tax assessed and levied is a secondary property tax levy for
purposes of article IX, Constitution of ARIZONA.
C. The governing body of a city or town shall submit the question of entering and
performing a financial assistance loan repayment agreement to the qualified electors
voting at a regular or special general election in the city or town. An election is not
required if voter approval has previously been obtained for substantially the same
project with another funding source or if the project is constructed with an improvement
district. If a majority of the qualified electors voting on the question:
1. Approves, the governing body may execute, deliver and perform the financial
assistance loan repayment agreement.
2. Disapproves, the governing body shall not execute a financial assistance loan
repayment agreement.
D. Payments made pursuant to a financial assistance loan repayment agreement are
not subject to section 42-17106.
E. A financial assistance loan repayment agreement entered into pursuant to this
section shall contain the covenants and conditions pertaining to the construction,
acquisition or improvement of a wastewater treatment or drinking water facility or
nonpoint source project and repayment of the loan as the water infrastructure finance
authority of ARIZONA deems proper. Financial assistance loan repayment agreements may
provide for the payment of interest on the unpaid principal balance of such agreement at
the rates established in the agreement. The agreement may also provide for payment of
the city's or town's proportionate share of the expenses of administering the clean water
and drinking water revolving funds established by sections 49-1221 and 49-1241 and may
provide that the city or town pay financing and loan administration fees approved by the
water infrastructure finance authority. These costs may be included in the levy or
assessment amounts pledged to repay the financial assistance. Cities and towns are bound
by and shall fully perform the loan repayment agreements, and the agreements are
incontestable after the loan is funded by the water infrastructure finance authority of
ARIZONA. The city or town shall also agree to pay the authority's costs in issuing bonds
or otherwise borrowing to fund a loan.
F. A financial assistance loan repayment agreement under this section does not
create a debt of the city or town, and the authority shall not require that payment of a
financial assistance loan repayment agreement be made from other than those sources
permitted in subsection B of this section and as prescribed by sections 49-1225 and
49-1245.
G. A city or town may employ attorneys, accountants, financial consultants and such
other experts in their field as deemed necessary to perform services with respect to the
financial assistance loan repayment agreement.
H. This section is supplemental and alternative to any other law under which a city
or town may borrow money or issue bonds. This section shall not be construed as the
exclusive authorization to enter into loan agreements with the authority.
I. A city or town may borrow additional monies or enter into additional financial
assistance loan repayment agreements with the water infrastructure finance authority in
an amount up to the amount approved by the voters pursuant to subsection C of this
section less the amount that the city or town is already obligated to repay to the water
infrastructure finance authority pursuant to a financial assistance loan repayment
agreement.
J. For purposes of this section:
1. "City" includes both cities formed pursuant to this title and charter cities.
2. "Nonpoint source project" has the same meaning prescribed in section 49-1201.
9-581 Definitions
In this article, unless the context otherwise requires:
1. "Commercial mobile radio service" means two-way voice commercial mobile radio
service as defined by the federal communications commission in 47 United States Code
section 157.
2. "Political subdivision" means a city, town or county, or a special district of a
city, town or county.
3. "Public highway" or "highway" means all roads, streets and alleys and all other
dedicated public rights-of-way and public utility easements of this state or a political
subdivision.
4. "Telecommunications" means the transmission, between or among points specified
by the user, of information of the user's choosing, without change in the form or content
of the information as sent and received. The term does not include commercial mobile
radio services, pay phone services, interstate services or cable services.
5. "Telecommunications corporation" means any public service corporation to the
extent that it provides telecommunications services in this state.
6. "Telecommunications services" means the offering of telecommunications for a fee
directly to the public, or to such users as to be effectively available directly to the
public, regardless of the facilities used.
9-582 Taxes and other charges;telecommunications facilities; limitations
A. A political subdivision shall not levy a tax, rent, fee or charge on a
telecommunications corporation, including a telecommunications corporation that provides
interstate services as described in section 9-583, subsection C, for the use of a public
highway to provide telecommunications services, or levy a tax, fee or charge upon the
privilege of engaging in the business of providing telecommunications services within
that political subdivision other than:
1. Any transaction privilege tax authorized by law on the business of providing
telecommunications services, except that this section does not allow the imposition of a
transaction privilege tax on the business of providing interstate telecommunications
services. Any transaction privilege tax authorized by law on the business of providing
commercial mobile radio service shall not exceed the tax rate levied on the business of
providing telecommunications services.
2. A telecommunications application fee for the issuance of a telecommunications
license or franchise if the application fee applies on a competitively neutral and
nondiscriminatory basis to all telecommunications corporations that use the public
highways to provide telecommunications services. A political subdivision may require only
one application fee and one license or franchise for each telecommunications corporation
whether the telecommunications corporation provides local services only or local and
long-distance services, including intrastate or interstate services. An application fee
is not required for a telecommunications corporation described in subsection E of this
section.
3. A telecommunications construction permit fee for the issuance of a construction
permit to place telecommunications facilities in the public highways if the permit fee
applies on a competitively neutral and nondiscriminatory basis to all telecommunications
corporations that place telecommunications facilities in the political subdivision's
public highways to provide telecommunications services. Political subdivisions shall
establish a nonbinding outside arbitration procedure to attempt to resolve disputes over
recovery of reasonable, proportionate and attributable costs of construction permit fees
pursuant to this paragraph and other fees pursuant to this article before the disputes
are submitted to a court for resolution.
4. A fee under section 9-583, subsection C.
B. All application fees, permit fees and charges levied by a political subdivision
on telecommunications corporations pursuant to subsection A, paragraphs 2 and 3 of this
section shall be levied on a competitively neutral and nondiscriminatory basis and
directly related to the costs incurred by the political subdivision in providing services
relating to the granting or administration of applications or permits. These fees and
charges also shall be reasonably related in time to the occurrence of the costs.
C. Notwithstanding subsections A and B of this section, a political subdivision may
require a telecommunications corporation to bear all of the reasonable costs associated
with construction, maintenance and operation of its facilities in the public highway used
to provide telecommunications services, including bearing reasonable costs associated
with damage caused to public highways.
D. Notwithstanding subsections A and B of this section, in a license or franchise,
a political subdivision and a telecommunications corporation may agree to in-kind
payments for use of the public highways different from those specified in subsection A or
B of this section. The license or franchise shall be structured so that the in-kind
payments made for use of the public highways to provide interstate telecommunications
services under the license or franchise are less than or equal to and are offset against
any linear foot charge owed pursuant to section 9-583, subsection C, paragraphs 2 and 3.
The license or franchise shall be structured so that the in-kind payments made under the
license or franchise pursuant to subsection A, paragraph 1 of this section are less than
or equal to and are offset against any transaction privilege license tax on the business
of providing telecommunications services. The valuation of any in-kind benefits shall
be set forth in such agreements. The in-kind facilities that are used to offset any or
all payments in this subsection are limited to the costs of the in-kind facilities and
shall remain in possession and ownership of the political subdivision after the term of
the existing license or franchise expires. In-kind facilities may be offset for either
payments of intrastate transaction privilege taxes or for interstate linear foot charges
but shall not be offset for any combination of intrastate and interstate charges.
However, a political subdivision shall not require a telecommunications corporation to
provide in-kind services, make in-kind payments or pay a fee in addition to the fees
described in subsections A through C of this section as a condition of consent to use a
highway to provide telecommunications services.
E. Notwithstanding subsection D of this section, any telecommunications corporation
that was providing telecommunications service within this state on November 1, 1997
pursuant to a grant made to it or its lawful predecessors prior to the effective date of
the ARIZONA Constitution may continue to provide telecommunications service pursuant
to that state grant until it is lawfully repealed, revoked or amended. Such
telecommunications corporation shall require no additional grant from any political
subdivision to provide telecommunications services.
F. Nothing in this article shall be deemed to affect the terms or conditions of any
franchise, license or permit issued by a political subdivision prior to November 1, 1997,
or to release any party from its obligations thereunder. Those franchises, licenses or
permits shall remain fully enforceable in accordance with their terms. A political
subdivision may lawfully enter into agreements with franchise holders, licensees or
permittees to modify or terminate an existing franchise, license or agreement.
G. A political subdivision may not discriminate against a cable operator in its
provision of telecommunications services if that cable operator complies with
requirements applicable to telecommunications corporations. Nothing in this subsection
limits the authority of any political subdivision to license cable systems and to
establish conditions on those licenses consistent with federal law.
9-583 Issuance of license or franchise; use ofpublic highways; limitations
A. A political subdivision shall not adopt any ordinance that may prohibit or have
the effect of prohibiting the ability of any telecommunications corporation to provide
telecommunications service. Nothing in this section affects the authority of a political
subdivision to manage the public highways within its jurisdiction or to exercise its
police powers.
B. The governing board of a political subdivision may issue to a telecommunications
corporation a license or franchise to use the public highways within the political
subdivision to construct, install, operate and maintain telecommunications
facilities. The political subdivision shall issue licenses or franchises on a
competitively neutral and nondiscriminatory basis to persons subject to this section,
within a reasonable period of time after application. As a condition of issuing a
license or franchise to use the public highways to construct, install, operate and
maintain telecommunications facilities, or a renewal thereof, a political subdivision may
impose reasonable, competitively neutral and nondiscriminatory requirements on applicants
which may include only:
1. Proof that the applicant has received a certificate of convenience and necessity
from the ARIZONA corporation commission.
2. Public highway use requirements.
3. Mapping requirements.
4. Insurance, performance bonds, indemnification or similar requirements.
5. Enforcement and administrative provisions, consistent with this section.
C. A political subdivision may require a telecommunications corporation that will
place underground facilities in the public highways, exclusive of facilities used by the
local network and the portion of the interstate network that carries intrastate calls,
for interstate telecommunications services to pay a fee as provided in this subsection
and, subject to section 9-582, subsection A, paragraph 2, to obtain a license or
franchise under this subsection to use the public highways to construct, install, operate
and maintain facilities for these services. Subsections A, B, D and E of this section
apply except:
1. The requirement provided in subsection B, paragraph 1 of this section does not
apply to a telecommunications corporation that provides solely interstate
telecommunications services within this state.
2. A political subdivision may require a telecommunications corporation operating
under this subsection to pay an annual fee based on the number of linear feet of trench
in the public highways in which the telecommunications corporation has placed facilities
that carry interstate traffic between and among the telecommunications corporation's
interstate points of presence exclusive of facilities used by the local network and the
portion of the interstate network that carries intrastate calls.
3. The rate per linear foot used in paragraph 2 of this subsection shall not exceed
the highest rate per linear foot a political subdivision in this state charged any
licensee or franchisee on or before December 31, 1999. The rate per linear foot shall not
be increased in any calendar year by more than the increase in the average consumer price
index as published by the United States department of labor, bureau of labor statistics.
D. A telecommunications licensee or franchisee may enter into contracts for use of
the licensee's or franchisee's facilities within the public highways to provide
telecommunications services. A political subdivision may require a telecommunications
licensee or franchisee to disclose all persons with whom it contracts to use its
facilities in the public highways within the political subdivision to provide
telecommunications services. A political subdivision may require a person using a
licensee's or franchisee's facilities in the public highways within the political
subdivision to obtain from the political subdivision a telecommunications license or
franchise if the person constructs, installs, operates or maintains telecommunications
facilities within the public highways of the political subdivision.
E. The requirements imposed in a telecommunications license or franchise shall
treat similarly situated telecommunications corporations similarly. The requirements may
be changed over time and applied prospectively. Nothing in this subsection or subsection
B of this section affects section 9-582, subsection D. A political subdivision may
distinguish between a telecommunications corporation described in section 9-582,
subsection E and other telecommunications corporations to a justifiable extent based on
differences in legal rights.
F. Subsections B through E of this section do not apply to a telecommunications
corporation described in section 9-582, subsection E.
G. The requirements of this section apply to applicants for licenses or franchises
filed and acted on after December 1, 1998 or if earlier, the date after August 1, 1998
that a political subdivision adopts an ordinance implementing this article. Licenses or
franchises issued pursuant to this section shall be for a term of five years and shall be
renewed if:
1. The telecommunications corporation satisfies the conditions of the renewal
license or franchise.
2. The renewal applicant has complied with the material terms of its prior license
or franchise and applicable law. However, renewal shall not be denied for failure to
comply with license or franchise terms unless the licensee or franchisee has had written
notice and a reasonable opportunity to cure the defect in past performance. A license or
franchise may be revoked for failure to comply with the material terms of the license or
franchise or applicable law. Revocation may occur only if the telecommunications
corporation is given written notice of the defect in performance and the defect in
performance is not cured within sixty days of the notice, unless the political
subdivision finds that the defect in performance is due to intentional misconduct, is a
violation of criminal law or is part of a pattern of violations if the telecommunications
corporation has already had notice and an opportunity to cure. A political subdivision
shall hold a hearing before revoking or refusing to renew a license or franchise if
requested by the licensee or franchisee.
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