SB 1390
Initials PAB Page 1 Transmitted
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: NREW DPA 6-1-0-0 | 3
rd
Read 16-13-1-0
House: NREW DPA 7-3-0-0 | 3
rd
Read 48-10-1-0-1
Final Pass: 23-5-2-0-0
SB 1390: water infrastructure finance authority; amendments
Sponsor: Senator Kerr, LD 25
Transmitted to the Governor
Overview
An emergency measure revising several provisions of the Water Infrastructure Finance Authority's
statutes that were enacted last year as part of Laws 2022, Chapter 366.
History
The Water Infrastructure Finance Authority (WIFA) provides financial assistance for water
infrastructure to political subdivisions, tribal communities, and other eligible entities through
several funds it administers. When it was created, WIFA oversaw the Clean Water Revolving
Fund, the Drinking Water Revolving Fund and the Hardship Grant Fund (Laws 1998, Chapter 72).
In 2007, the Legislature created the Water Supply Development Revolving Fund, which provided
loans and grants for planning and designing water supply development projects, within WIFA
(Laws 2007, Chapter 226). WIFA's Board was initially responsible for all decisions related to
financial and technical assistance from these funds.
Oversight of WIFA and the funds it administers has shifted from when this agency was first
established. WIFA was initially created as a separate state agency with its own governing board.
However, a 2016 law placed this agency under the Arizona Finance Authority within the newly
formed Office of Economic Opportunity. The Arizona Finance Authority Board served as the
governing body for WIFA with additional input on applications for fund monies provided by the
WIFA Advisory Board (Laws 2016, Chapter 372). In 2022, the Legislature overhauled WIFA's
statutes and restored it to a standalone agency. WIFA is now overseen by its own governing
board (Board) consisting of 9 voting members and 9 advisory members, which is responsible for
hiring a director who in turn hires all necessary staff. As part of this overhaul, the Legislature
created two new funds within WIFA (the Long-Term Water Augmentation Fund and Water
Conservation Grant Fund) and committees to review and make recommendations to WIFA Board
on applications for financial assistance. For example, the Federal Water Programs Committee
reviews applications for financial assistance from the Clean Water Revolving Fund, Safe Drinking
Water Revolving Fund and Hardship Grant Fund. This legislative overhaul also altered the criteria
for which entities are eligible for financial assistance from each of WIFA's funds. Additionally, the
Arizona Department of Water Resources (ADWR) was directed to conduct water supply and
demand assessments of groundwater basins to assist WIFA in determining which projects will be
funded from the Long-Term Water Augmentation Fund (Laws 2022, Chapter 366).
Provisions
Arizona Department of Water Resources (Sec. 1)
1. Clarifies that the ADWR Director will annually prepare and issue a water supply and demand
assessment for at least 6 of the 51 (instead of 46) groundwater basins in Arizona starting by
December 1, 2023. SB 1390
Initials PAB Page 2 Transmitted
2. Instructs the ADWR Director to ensure that this supply and demand assessment is completed
for all initial active management areas at least once every five years.
Water Infrastructure Finance Authority (Sec. 2)
3. States that WIFA is not a public service corporation subject to regulation by the Arizona
Corporation Commission.
4. Authorizes the WIFA Board to prescribe the terms and conditions for employing the director
and staff as necessary.
5. Directs the WIFA Board to adopt written policies, procedures and guidelines similar to those
adopted by the Arizona Department of Administration on officer and employee compensation,
observed holidays and leave and travel expense reimbursement.
6. Allows WIFA officers and employees to participate in the Arizona State Retirement System.
7. Authorizes the WIFA Board to allow WIFA officers and employees to participate in the state
employee health, disability and accident insurance programs.
8. Exempts WIFA officers and employees from any laws regulating state employment, including
the State Personnel System, provisions involving covered service for state employees and
being subject to the State Personnel Board.
Water Infrastructure Finance Authority Board
9. Clarifies that an affirmative vote of at least six of nine voting WIFA Board members is required
only to approve funding or other financial assistance from the Water Conservation Grant Fund,
the Water Supply Development Revolving Fund or the Long-Term Water Augmentation Fund.
(Sec. 3)
10. States that a person is ineligible for appointment to the WIFA Board if that person's relative
(instead of spouse) meets any of the following criteria:
a) Is employed by or participates in the management of a business entity or other
organization that receives WIFA monies;
b) Owns, controls or has more than 10% interest in a business entity or other organization
that receives WIFA monies;
c) Uses or receives a substantial amount of tangible goods, services or monies from WIFA;
or
d) Has a personal financial interest in an award or expenditure, except that a personal
financial interest does not include if the relative is a member of a class of people and it
reasonably appears that a majority of that class's total membership will be affected by that
action. (Sec. 3)
11. Clarifies that the initial terms of:
a) Four (instead of three) WIFA Board members from a county with 400,000 or more people
end on January 31, 2026; and
b) Four (instead of three) WIFA Board members from a county with less than 400,000 people
end on January 31, 2028. (Sec. 9)
Federal Water Programs Committee (Sec. 4)
12. Clarifies that one member of the Federal Water Programs Committee must be a member who
represents a domestic water improvement district or sanitary district in a county with 500,000
or more people.
Water Supply Development Revolving Fund (Sec. 5)
13. Specifies that an eligible entity for financial assistance from the Water Supply Development
Revolving Fund must either operate or be located outside the boundaries of an initial active SB 1390
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management area in which part of the Central Arizona Project aqueduct is located (instead of
being outside of Maricopa, Pima or Pinal Counties).
Long-Term Water Augmentation Fund
14. Clarifies that when a city or town defaults on payments required as part of a loan from the
Long-Term Water Augmentation Fund, the State Treasurer will withhold Shared State
Revenues in the amount specified in WIFA's certificate of default and deposit those monies in
the Long-Term Water Augmentation Fund. (Sec. 6)
15. States, for long-term water augmentation bonds issued by the WIFA Board, that a pledge of
pledged revenues pursuant to a public-private partnership agreement is valid and binding at
the time it is made. (Sec. 7)
Water Conservation Grant Fund (Sec. 8)
16. Replaces, for the purpose of qualifying for grants from the Water Conservation Grant Fund, a
public entity organized under state law, a voter-approved charter or state initiative with an
eligible entity as defined under the Long-Term Water Augmentation Fund's statutes.
17. Allows a nongovernment organization that focuses on water conservation or environmental
protection to apply for grants from the Water Conservation Grant fund if it partners with an
eligible entity as defined under the Long-Term Water Augmentation Fund's statutes.
Miscellaneous
18. Contains an emergency clause. (Sec. 10)
19. Makes technical and conforming changes. (Sec. 1-3 and 8-9)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☒ Emergency (40 votes) ☐ Fiscal Note