35-468.01. Bonds secured by water transportation revenues

A. If a majority of the electors of a political subdivision voting at an election held pursuant to either article 3 of this chapter or title 15, chapter 4, article 5 authorizes the issuance of bonds, the political subdivision may issue the bonds so authorized either in the manner provided in this article or the manner prescribed by the article under which the election was authorized.

B. Bonds having an aggregate principal sum that exceeds the political subdivision's debt limit as set forth in article IX, section 8, Constitution of Arizona, may nonetheless be issued pursuant to this section if an amount equal to all principal in excess of the debt limit and all interest on that portion of principal is payable solely from water transportation revenues pledged by the political subdivision to payment of principal and interest on the bonds.

C. On sale of the bonds, a schedule shall be filed with the treasurer of the issuer showing the amounts of principal and interest to be paid at each principal and interest payment date. The schedule shall prorate each payment between the amounts to be paid from taxes and the amounts paid from water transportation revenues. The governing body may use any reasonable method of allocation as long as the total principal amount to be paid from ad valorem taxes computed as of the date of initial issuance of the bonds does not exceed the political subdivision's debt limit.

D. The political subdivision may pledge all or any part of the water transportation revenues it will thereafter receive to the payment of an amount of the debt service on the bonds equal to the principal and interest on the bonds that are not payable from taxes. This pledge constitutes an irrevocable assignment to the officer charged with paying the bonds that is binding on the political subdivision. No notice of the assignment need be filed or recorded and no public notice of any nature is required to make the pledge effective against any person claiming an interest in the water transportation revenues except a holder of the bonds. On receipt of any payment of water transportation revenues, the officer shall cause a sufficient portion of the amount received to be deposited in the redemption fund and interest fund established under section 35-468.03 pertaining to the bonds.

E. No bondholder may claim a preference as to source of payment over any other bondholder of the same series.

F. Neither a bondholder nor a political subdivision has any right or claim to receive payment from a city or town that makes payments relating to remote municipal property under title 9, chapter 4, article 3.