HB 2679
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ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
House: DP NREW 7-2-1-0
HB 2679: power; public utilities; UCC; securities
Sponsor: Representative Griffin, LD 19
Caucus & COW
Overview
Permits public power entities, public service corporations and member owned cooperative
corporations to initiate in securitization transactions.
History
A public power entity means any municipal corporation, city, town or other political
subdivision that is organized under state law, that generates, transmits, distributes or
otherwise provides electricity and that is not a public service corporation (A.R.S. § 30-801).
The Corporation Commission (Commission) is permitted to supervise and regulate every
public service corporation in the state and do all things necessary and convenient in the
exercise of that power and jurisdiction (A.R.S. § 40-202).
Provisions
Public Power Entities
1. Permits a public power entity to initiate a securitization transaction and outlines
required actions when initiating the adoption of a financing resolution. (Sec. 1)
2. Outlines the requirements of the securitization proposal. (Sec. 1)
3. Lists required actions to be taken by a public power entity during a public comment period
and meeting. (Sec. 1)
4. Permits the adoption of a financing resolution that approves initiation of the transaction
under the requirement that the governing board finds that certain conditions are met.
(Sec. 1)
5. Outlines requirements for a rehearing and lists actions to obtain a rehearing with the
public power utility's governing board. (Sec. 1)
Public Service Corporations
6. Permits a public service corporation, member-owned cooperative corporation and two or
more member owned cooperatives corporations to request from the Commission the
permission to initiate a securitization transaction. (Sec. 2)
7. Outlines the requirements for the application. (Sec. 2)
8. Requires the Commission to approve the financing order if certain conditions are met.
(Sec. 2)
9. Prescribes the authority and jurisdiction with the Commission for the actions related to
securitization transactions. (Sec. 2)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note
HB 2679
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10. Outlines requirements for and actions relating to obtaining a rehearing with the
Commission. (Sec. 2)
Language that Applies to Both
Public Service Corporations and Public Power Entities
11. Defines pertinent terms. (Sec. 1 and 2)
12. Contains a statement of public policy. (Sec. 1 and 2)
13. Designates the governing mechanisms for security interests in transition property. (Sec.
1 and 2)
14. Provides authority of a qualified special purpose entity to issue transition bonds and
differentiates what are obligated and nonobligated actions. (Sec. 1 and 2)
15. Outlines transition property characteristics and operations. (Sec. 1 and 2)
16. Designates true-up mechanism actions and civil actions regarding financing payments.
(Sec. 1 and 2)
17. Permits public power entities and public service corporations to utilize their resources
and duties to perform the duties of a servicer under a transition billing services tariff and
outlines payment collecting actions. (Sec. 1 and 2)
18. Prohibits the transition property, the true-up mechanism and the financing charges from
being subject to reduction, impairment, rescission, irrevocability and other actions or
designations. (Sec. 1 and 2)
19. Prohibits financial charges from being subject to:
a) a franchise fee that is imposed by a municipality, county or other local government
unit as a result of a franchise agreement of lawful ordinance; or
b) taxes that are applicable to services provided by or rates of a public power entity. (Sec.
1 and 2)
20. Prohibits transition bonds from being deemed public debt and details related prohibitions
and actions. (Sec. 1 and 2)
21. Directs that transition bonds are legal investments for:
a) all governmental units;
b) permanent funds of this state;
c) finance authorities;
d) financial institutions;
e) insurance companies;
f) fiduciaries; and
g) other persons requiring statutory authority regarding legal investments. (Sec. 1 and
2)
22. Prescribes obligations of financing resolutions for successors to a public power entity.
(Sec. 1 and 2)
23. Outlines procedures in the case of conflict between other law regarding security interest
in transition property, invalidation, replacement or repeal of the chapter. (Sec. 1 and 2)
24. Makes technical changes. (Sec 1, 2 and 3)
HB 2679
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Uniform Commercial Code (UCC)
25. Exempts a security interest from a public power entity, public service corporation,
member-owned cooperative corporation or two or more member owned cooperatives
corporations from the scope of the UCC. (Sec. 3)