Ariz. Admin. Code § R18-12-314 - Local Government Bond Rating Test

A. General purpose local government owners and operators or a local government serving as a guarantor that has the legal authority to issue general obligation bonds may satisfy the requirements of R18-12-303 by having a currently outstanding issue or issues of general obligation bonds of $1 million or more, excluding refunded, with a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB. If a local government has multiple outstanding issues, or if a local government's bonds are rated by both Moody's and Standard and Poor's, the lowest rating shall be used to determine eligibility. Bonds that are backed by credit enhancement other than municipal bond insurance may not be considered in determining the amount of applicable bonds outstanding.

B. Local government owners and operators or a local government serving as a guarantor that is not a general purpose local government and does not have the legal authority to issue general obligation bonds may satisfy the requirements of R18-12-303 by having a currently outstanding issue or issues of revenue bonds of $1 million or more, excluding refunded issues and by also having a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB as the lowest rating for any rated revenue bond issued by the local government. If bonds are rated by both Moody's and Standard & Poor's, the lower rating for each bond shall be used to determine eligibility. Bonds that are backed by credit enhancement may not be considered in determining the amount of applicable bonds outstanding.

C. Local government owners and operators, or a guarantor, or both, shall maintain a copy of its bond rating published within the last 12 months by Moody's or Standard & Poor's.

D. To demonstrate that it meets the local government bond rating test, the chief financial officer of a general purpose local government owner or operator, or the guarantor, or both, shall sign a letter worded exactly as provided in 40 CFR 280.104(d), amended as of October 13, 2015, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted.

E. To demonstrate that it meets the local government bond rating test, the chief financial officer of a local government owner and operator, or the guarantor, or both, shall sign a letter worded exactly as provided in 40 CFR 280.104(e), amended as of October 13, 2015, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted.

F. The Director may require reports of financial condition at any time from local government owners and operators, or the local government guarantor, or both. If the Director finds, on the basis of such reports or other information, that the local government owner or operator, or the guarantor, or both, no longer meets the local government bond rating test requirements of this Section, the local government owner or operator shall obtain alternative coverage within 30 days after notification of such a finding.

G. If local government owners and operators using the bond rating test to provide financial assurance finds that it no longer meets the bond rating test requirements, the local government owner or operator shall obtain alternative coverage within 150 days of the change in status.

H. If the local government owner or operator fails to obtain alternate assurance within 150 days of finding that it no longer meets the requirements of the bond rating test or within 30 days of notification by the Director that it no longer meets the requirements of the bond rating test, the owner or operator shall notify the Director of such failure within 10 days.

Notes

Ariz. Admin. Code § R18-12-314

Adopted effective September 21, 1992 (Supp. 92-3). Amended effective July 30, 1996 (Supp. 96-3). Amended by final rulemaking at 25 A.A.R. 3123, effective 10/1/2020.