41-2258. Greater Arizona development authority bonds

A. The authority, through the board, may issue negotiable bonds in a principal amount that in its opinion is necessary to provide sufficient monies for assistance under this article, to refund bonds, when the authority deems it expedient to do so, maintaining sufficient reserves in the fund to secure the bonds, to pay the necessary costs of issuing, selling and redeeming the bonds and to pay other expenditures of the authority incidental to and necessary and convenient to carry out the purposes of this article.

B. The board shall authorize the bonds by resolution. The resolution shall prescribe:

1. The rate or rates of interest and the denominations of the bonds.

2. The date or dates of the bonds and maturity.

3. The coupon or registered form of the bonds.

4. The manner of executing the bonds.

5. The medium and place of payment.

6. The terms of redemption.

C. The bonds shall be sold at public or private sale at the price and on the terms determined by the board. All proceeds from the issuance of bonds, except any amounts used to pay costs associated with the issuance and sale of the bonds, shall be deposited in the fund or a separately held account as specified in the resolution.

D. To secure any bonds authorized by this section the board by resolution may:

1. Provide that bonds issued under this section may be secured by a lien on all or part of the monies paid into the appropriate account or subaccount of the fund.

2. Pledge or assign to or in trust to be held by the state treasurer or a trustee appointed by the authority for the benefit of the holder or holders of the bonds any part of the appropriate account or subaccount of the fund monies as is necessary to pay the principal and interest of the bonds as they come due.

3. Set aside, regulate and dispose of reserves and sinking funds.

4. Provide that sufficient amounts of the proceeds from the sale of the bonds may be used to fully or partly fund any reserves or sinking funds set up by the bond resolution.

5. Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent to and the manner in which consent may be given.

6. Provide for payment from the proceeds of the sale of the bonds of all legal and financial expenses incurred by the board in issuing, selling, delivering and paying the bonds.

7. Provide terms necessary to secure credit enhancement or other sources of payment or security.

8. Provide any other terms and conditions that in any way may affect the security and protection of the bonds.

E. Any pledge of revenues by a political subdivision, a special district, an Indian tribe or the authority made under this article is valid and binding from the time when the pledge is made. The monies pledged and received by the state treasurer to be placed in the fund or in any account or subaccount in the fund are immediately subject to the lien of the pledge without any future physical delivery or further act, and any lien of any pledge is valid or binding against all parties having claims of any kind in tort, contract or otherwise against the board regardless of whether the parties have notice of the lien. The official resolution or trust indenture or any instrument by which this pledge is created, when placed in the board's records, is notice to all concerned of the creation of the pledge, and those instruments need not be recorded in any other place.

F. A member of the board or any person executing the bonds is not personally liable for the payment of the bonds. The bonds are valid and binding obligations notwithstanding that before the delivery of the bonds any of the persons whose signatures appear on the bonds cease to be members of the board. From and after the sale and delivery of the bonds, they are incontestable by the board.

G. The board, out of any available monies, may purchase bonds, which may then be canceled, at a price not exceeding either of the following:

1. If the bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date.

2. If the bonds are not then redeemable, the redemption price applicable on the first date after purchase on which the bonds become subject to redemption plus accrued interest to that date.

H. The bonds issued under this section, their transfer and the income they produce are exempt from taxation by this state or by any political subdivision of this state.

I. If a political subdivision fails to make a payment due to the authority under its loan repayment agreement or bonds, the authority shall certify to the state treasurer and notify the governing body of the defaulting political subdivision that the political subdivision has failed to make the payment and direct withholding pursuant to subsection J of this section. The authority may determine the form of the certificate of default, except that the certificate must specify the amount of money required to satisfy the unpaid payment obligation of the political subdivision.

J. On receipt of a certificate of default from the authority, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold an amount from the defaulting political subdivision's next distribution of monies pursuant to section 42-5029 and an amount from a defaulting city's or town's next distribution of monies pursuant to section 43-206 necessary to meet the certified amount of the deficiency. The state treasurer shall immediately deposit in the fund the amount withheld. The state treasurer shall continue to withhold distributions pursuant to sections 42-5029 and 43-206 and deposit them into the fund until the authority certifies to the state treasurer that the default has been cured.

K. Notwithstanding subsection J of this section, the state treasurer shall not withhold from the distribution of monies under section 42-5029 any amount, as certified by the defaulting political subdivision to the state treasurer and the authority, that is necessary to make any required deposits then due for payment of principal and interest on bonds of the political subdivision that have been secured by a pledge of the distribution.