With little fanfare and barely any notice outside of political and economic development circles, a new mechanism for financing public infrastructure development went into effect this month.
Gov. Katie Hobbs signed House Bill 2999 into law in June, establishing a framework for the State Affordability Infrastructure District system. According to a summary from the law firm Taft, “The legislation establishes a new mechanism through which developers, homebuilders, and other project sponsors may finance public infrastructure using tax-exempt bonds and other district financing tools.”
Large scale developments and master plans could see expanded access to infrastructure capital under SAID funding. General obligation, special assessment and revenue bonds will be secured by property obligations within the district to give more funding options for public improvements that do not create new obligations for taxpayers or municipal general funds, according to the summary.
As the state’s population has swelled, developers have been challenged by the existing structure, which requires dealing with the upfront costs of public infrastructure systems. Infrastructure often had to be funded before development could begin, and inconsistent local level administration of the existing Community Facilities District option placed Arizona at a disadvantage compared to other growth states.
This hindrance was considered a factor in Arizona’s eroding affordability, which went from one of the nation’s most affordable states a decade ago to 45th in affordability in a 2025 study.
Taft reported, “Under H.B. 2999, landowners within a master-planned development can form a SAID by petition to the Arizona Finance Authority. Once formed, the district is a political subdivision of the State of Arizona with the authority to issue general obligation bonds, special assessment bonds, and revenue bonds — all secured by property-based obligations borne solely by the land within the district, not by existing Arizona taxpayers.”
The bond proceeds can then be used immediately to fund roads, amenities and utilities, rather than relying on a reimbursement process.
The SAID structure is expected to provide uniformity and consistency, with certification overseen by the Arizona Finance Authority using objective criteria, rather than local government considerations. Landowners will elect SAIDs’ board members based on owned acreage, and municipal development fees will be paid up-front using bond revenues.
Taft said, “The practical implications of the SAID framework for Arizona’s development community are significant. Developers and homebuilders who have struggled to finance infrastructure for large master-planned communities now have access to long-duration, tax-exempt debt that can provide hundreds of millions of dollars in up-front infrastructure capital at costs far below conventional construction lending. Projects that were previously economically marginal – or that required outsized developer equity contributions – become feasible.”
In the Valley Partnership newsletter emailed Sept. 16, President and CEO Clark Princell wrote, “Valley Partnership believes that SAIDs are an important statewide infrastructure tool that our development community will utilize to accelerate Arizona’s economic development across every sector throughout the state.”
Acceptance of applications for SAIDs went into effect Sept. 14.