Arizona Revised Statutes Title 48. Special Taxing Districts § 48-2091.03. Security for and payment of bonds; special fund

A. Refunding bonds shall be secured by and are payable from the special assessments levied to pay the bonds being refunded. On the issuance of refunding bonds, the board of directors shall cause the remaining unpaid installments of the special assessments to be recalculated and modified so that the amounts to be collected equal the amounts necessary to repay the refunding bonds.

B.Section 48-2062 does not apply to the recalculation and modification of the assessments authorized by this subsection. All other provisions of article 2 of this chapter  1 regarding the collection, payment and enforcement of the assessments of the bonds being refunded and the validity and priority of the lien of the assessments for the bonds being refunded continue in force and effect. Except as provided by this article, the assessments survive the payment or defeasance of the bonds being refunded and remain in force and effect, securing the refunding bonds until they are paid in full. The special assessments are the same first liens on the property that was assessed for the bonds being refunded, subject only to the lien for general property taxes and prior special assessments. The full faith and diligence of the district are irrevocably pledged for the assessment or reassessment, collection and payment of the special assessments.

C. Refunding bonds are payable only from a special fund to be established and collected from the special assessments. The fund is set apart solely to pay the principal of and interest on refunding bonds and for no other purpose. All monies collected from the special assessment shall be deposited in the special fund.