REFERENCE TITLE: joint powers exercise; separate entities
State of Arizona Senate
Fiftieth Legislature
First Regular Session 2011
SB 1497
Introduced by
Senator Allen: Representative Crandell
_______________________________________________________________________________________
AN ACT
AMENDING SECTION 11952.02, ARIZONA REVISED STATUTES; RELATING TO JOINT EXERCISE
OF POWERS.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 11-952.02, Arizona Revised Statutes, is amended to read:
11-952.02. Separate legal entities; joint exercise of powers
A. If public agencies identified in subsection B of this section form a separate legal entity pursuant to
section 11-952, the entity has the common powers specified in the agreement ESTABLISHING THE
ENTITY and may exercise them in a manner or according to the method provided in the agreement.
Notwithstanding title 38, an officer or elected member of the governing body of a party to the agreement may
also act in the capacity of a member of the governing body of the separate legal entity. In its own name and
subject to the provisions of the agreement, the separate legal entity, subject to existing applicable law, may:
1. Make and enter into contracts, including contracts, leases or other transactions with one or more
of the parties to the agreement forming the separate legal entity.
REFERENCE TITLE: joint powers exercise; separate entities
State of Arizona
Senate
Fiftieth Legislature
First Regular Session
2011
SB 1497
Introduced by
Senator Allen: Representative Crandell
2. Employ agents and employees.
3. Acquire, hold or dispose of property.
4. Acquire, construct, manage, maintain and operate buildings, works, infrastructure and
improvements.
5. Incur debts, liabilities and obligations.
6. Sue and be sued.
7. EXERCISE THE GOVERNMENTAL AND PROPRIETARY POWERS OF THE
CONTRACTING PARTIES SPECIFIED IN THE AGREEMENT.
B. IN ITS OWN NAME AND SUBJECT TO THE PROVISIONS OF THE AGREEMENT, THE
SEPARATE LEGAL ENTITY, SUBJECT TO EXISTING APPLICABLE LAW, HAS THE RIGHTS AND
IMMUNITIES OF THE PARTIES THAT ARE GRANTED BY THE CONSTITUTION OF ARIZONA AND
STATUTES OF THIS STATE, INCLUDING IMMUNITY OF THE ENTITY’S PROPERTY FROM
TAXATION.
B. C. Cities, towns, counties, THE ARIZONA BOARD OF REGENTS and special taxing districts
established pursuant to title 48, chapters 11, 12, 17, 18, 19 and 22 may form a separate legal entity pursuant
to section 11952, for the purposes of this subsection. The intergovernmental agreement must state the intent
to form a separate legal entity pursuant to this subsection. The governing body of a separate legal entity
formed pursuant to this subsection shall be composed of officials elected to one or more MEMBERS of the
governing bodies of the political subdivisions PUBLIC AGENCIES that are parties to the agreement, or their
designees. A separate legal entity identified pursuant to this subsection:
1. Is a political subdivision of this state. having:
(a) The governmental and proprietary powers that are common to the contracting parties specified
in the agreement, including, if applicable, the power to make voluntary contributions in lieu of taxes and
those powers provided for in section 11-952 and this section.
(b) The rights and immunities of the parties that are granted by the constitution and statutes of this
state, including immunity of its property from taxation.
2. May separately contract for an undertaking with any two or more of the parties or other public
agencies or other entities. Limitations on the exercise of common powers shall be applicable only to the
parties to the agreement participating in the undertaking.
3. In addition to other powers provided for in the agreement and whether or not one or more parties
to the agreement do not have bonding authority for the undertaking, by a vote of its governing body, may
issue revenue bonds, or incur obligations payable from the entity’s revenues, to pay the costs and expenses of
acquiring or constructing any structures, facilities or equipment necessary to effectuate the purposes of the
agreement subject to the following conditions and requirements:
(a) The revenue bonds are payable solely from the revenues of the undertaking for which they were
issued and are not payable from any revenues, taxes or assessments paid to, or to be levied or collected by, the
entity or the political subdivisions PUBLIC AGENCIES that are parties to the agreement that forms the
entity.
(b) The bonds and the income on the bonds are at all times free from taxation by this state or any
political subdivision of this state.
(c) The entity may pledge to the payment of its bonds all revenues it has or will receive from the sales
of goods or services of the undertaking. Any pledge made to secure the bonds is valid and binding from the
time the pledge is made. The monies pledged and received by the entity to be placed in the fund established
for the purpose of securing and paying the bonds are immediately subject to the lien on or the pledge of the
monies without any future physical delivery, ANY recording of any instrument or any further act. Any lien or
pledge is valid and binding against all parties who have claims of any kind in tort, contract or otherwise
against the entity or the political subdivisions PUBLIC AGENCIES that formed the entity regardless of
whether the claimants have notice of the pledge. The official resolution or trust indenture or any instrument
by which the pledge is created when placed in the entity’s official records is notice to all concerned of the
creation of the pledge, and those documents need not be recorded in any other place to perfect the pledge.
(d) Subject to any registration requirements, bonds issued by the entity under this paragraph are
fully negotiable within the meaning and for all purposes of the uniform commercial code regardless of
whether the bonds actually constitute negotiable instruments under the uniform commercial code.
(e) The bonds do not constitute an indebtedness of the entity, the political subdivisions PUBLIC
AGENCIES that formed the entity or this state within the meaning of any statutory or constitutional
limitation on indebtedness.
(f) The bonds may be sold at public or private sale at, above or below par as determined by the
governing body of the entity.
(g) The treasurer of any political subdivision PUBLIC AGENCY forming the entity may act as the
entity’s fiscal agent or the entity may appoint any commercial bank doing business in this state to hold,
deposit and invest the entity’s monies according to any resolution or other document authorizing the issuance
of the bonds.
(h) Title 35, chapter 3, articles 5 and 7 apply to bonds issued pursuant to this paragraph.
(i) Bonds issued pursuant to this paragraph shall be issued only after consultation with the state
certification board established by section 48101.
4. May engage in electric generation and transmission activities but may not engage in electric
distribution activities.
5. Shall not be deemed a public power entity pursuant to title 30 by virtue of any undertaking or
other contract.
C. D. For the purposes of subsection B C of this section, “undertaking”:
1. Means one or more of the following:
(a) Purchasing, constructing, leasing or acquiring any real or personal property, works or facilities
that the political subdivisions PUBLIC AGENCIES that formed the entity are authorized by law to purchase,
construct, lease or otherwise acquire.
(b) Improving, reconstructing, extending or adding to any real or personal property, works or
facilities owned or operated by the entity.
(c) Any program of development involving real or personal property, works or facilities that the
entity is authorized by law to purchase, construct, lease or otherwise acquire or the improvement,
reconstruction, extension or addition to the program.
(d) Providing utility services, purchasing, constructing, leasing or acquiring, or the extension or
addition of, works or facilities designed to serve areas or territories already being served by any of the parties
to the agreement.
2. Does not include the acquisition by eminent domain of existing works or facilities of a political
subdivision or public service corporation.
D. E. An entity formed pursuant to this section is subject to:
1. Title 40, chapter 2, article 6.2.
2. Title 48, chapter 1, article 8 with regard to any property owned by the entity.
F. THE REAL PROPERTY OF A SEPARATE LEGAL ENTITY FORMED PURSUANT TO THIS
SECTION IS NOT SUBJECT TO THE ZONING RESTRICTIONS OF ANY OF THE PUBLIC AGENCIES
FORMING THE ENTITY IF THE ENTITY’S GOVERNING BOARD APPROVES A MASTER PLAN FOR
THE REAL PROPERTY.
