HB2369 - 531R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Repeal

Title 3, chapter 18, Arizona Revised Statutes, is repealed.

Sec. 2. Section 5-382, Arizona Revised Statutes, is amended to read:

START_STATUTE5-382. State lake improvement fund; administration; report

A. A The state lake improvement fund is established. Monies deposited in the fund shall be used only as provided in this section.

B. All monies in the state lake improvement fund are appropriated to the Arizona state parks board director solely for the purposes provided in this section. Interest earned on monies in the fund shall be credited to the fund. Monies in the state lake improvement fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

C. The Arizona state parks board director shall administer the monies in the fund as follows:

1. To fund staff support to plan and administer the state lake improvement fund in conjunction with other administrative tasks and recreation plans of the board director.

2. To fund projects on waters where gasoline powered boats are permitted and shall be limited to the following:

(a) Public launching ramps.

(b) Public piers, marinas or marina stadia.

(d) Public picnic tables and facilities.

(e) Public parking areas.

(f) Lake construction or improvement.

(g) Marking buoys and other safety facilities.

(h) Watercraft.

(i) Public campgrounds.

(j) Acquisition of real and personal property through purchase, lease, agreement or otherwise for the purpose of providing access to waters where boating is permitted.

(k) Design and engineering projects.

D. Projects involving expenditure of monies from such fund may be accomplished by the Arizona state parks board director, by the Arizona game and fish commission, by the board of supervisors of any county or by the governing body of a city or town, provided such projects do not interfere with any vested water rights, or the operation or maintenance of water projects, including domestic, municipal, irrigation district, drainage district, flood control district or reclamation projects. The Arizona outdoor recreation coordinating commission, established by section 41‑511.25, shall examine applications for eligible projects, determine the amount of funding, if any, for each project and submit a list of projects, subject to prior review by the joint committee on capital review, to the Arizona state parks board director for allocation from the fund. The board director shall annually report to the legislature the expenditures made for such projects in conjunction with the report required by section 41‑511.12 41‑5611.

E. State lake improvement funds may be used on projects where matching funds are made available. END_STATUTE

Sec. 3. Section 17-301, Arizona Revised Statutes, is amended to read:

START_STATUTE17-301. Times when wildlife may be taken; exceptions; methods of taking

A. A person may take wildlife, except aquatic wildlife, only during daylight hours unless otherwise prescribed by the commission. A person shall not take any species of wildlife by the aid or with the use of a jacklight, other artificial light, or illegal device, except as provided by the commission.

B. A person shall not take wildlife, except aquatic wildlife, or discharge a firearm or shoot any other device from a motor vehicle, including an automobile, aircraft, train or powerboat, or from a sailboat, a boat under sail, or a floating object towed by powerboat or sailboat except as expressly permitted by the commission. No A person may not knowingly discharge any firearm or shoot any other device upon on, from, across or into a road or railway.

C. Fish may be taken only by angling unless otherwise provided by the commission. The line shall be constantly attended. In every case the hook, fly or lure shall be used in such manner that the fish voluntarily take or attempt to take it in their mouths.

D. It shall be unlawful to take wildlife with any leghold trap, with any instant kill body gripping design trap, or by a poison or a snare on any public land, including state owned or state leased land, and lands administered by the United States forest service, the federal bureau of land management, the national park service, the United States department of defense, the Arizona state parks board director and any county or municipality. This subsection shall not prohibit:

1. The use of the devices prescribed in this subsection by federal, state, county, city, or other local departments of health which that have jurisdiction in the geographic area of such use, for the purpose of protection from or surveillance for threats to human health or safety.

2. The taking of wildlife with firearms, with fishing equipment, with archery equipment, or with other implements in hand as may be defined or regulated by the Arizona game and fish commission, including but not limited to the taking of wildlife pursuant to a hunting or fishing license issued by the Arizona game and fish department.

3. The use of snares, traps not designed to kill, or nets to take wildlife for scientific research projects, for sport falconry, or for relocation of the wildlife as may be defined or regulated by the Arizona game and fish commission or the government of the United States, or both.

4. The use of poisons or nets by the Arizona game and fish department to take or manage aquatic wildlife as determined and regulated by the Arizona game and fish commission.

5. The use of traps for rodent control or poisons for rodent control for the purpose of controlling wild and domestic rodents as otherwise allowed by the laws of the state of Arizona, excluding any fur‑bearing animals as defined in section 17‑101. END_STATUTE

Sec. 4. Section 28-304, Arizona Revised Statutes, is amended to read:

START_STATUTE28-304. Powers and duties of the board; transportation facilities

A. The board shall:

1. Develop and adopt a statewide transportation policy statement. The policy statement shall be adopted as described in section 28‑306.

2. Adopt a long‑range statewide transportation plan. The plan shall be adopted as described in section 28‑307.

3. Adopt uniform transportation planning practices and performance based planning processes for use by the department. The practices and processes shall be developed as described in sections 28‑502 and 28‑503.

4. Adopt transportation system performance measures and factors and data collection standards to be used by the department. The performance measures, factors and standards shall be developed as described in sections 28‑504 and 28‑505.

B. With respect to highways, the board shall:

1. Establish a complete system of state highway routes.

2. Determine which state highway routes or portions of the routes are accepted into the state highway system and which state highway routes to improve.

3. Establish, open, relocate or alter a portion of a state route or state highway.

4. Vacate or abandon a portion of a state route or state highway as prescribed in section 28‑7209.

5. Sell board funding obligations to the state treasurer as provided in section 28‑7678.

C. The board shall:

1. Establish policies to guide the development or modification of the five year transportation facilities construction program that are consistent with the principles of performance based planning developed pursuant to article 7 of this chapter. The percentage of department discretionary monies allocated to the region in the regional transportation plan approved pursuant to chapter 17, article 1 of this title shall not increase or decrease unless the board, in cooperation with the regional planning agency, agrees to change the percentage of the discretionary monies.

2. Award all construction contracts for transportation facilities.

3. Monitor the status of these construction projects.

~~D. Consistent with the board's responsibilities, the board shall:~~

~~1. Consider the citizens transportation oversight committee's recommendations on the five year construction program for the regional transportation plan pursuant to chapter 17 of this title.~~

2. Respond to any complaint and approve, disapprove or modify recommendations regarding a complaint forwarded to it by the citizens transportation oversight committee within ninety days after the citizens transportation oversight committee forwards a complaint to the board.

E. d. The board shall determine priority program planning with respect to transportation facilities using the performance based methods developed pursuant to article 7 of this chapter.

F. e. With respect to transportation facilities other than highways, the board shall establish, open, relocate, alter, vacate or abandon all or portions of the facilities.

G. f. With respect to aeronautics, the board shall perform the functions prescribed in chapter 25 of this title.

H. g. The board shall not spend any monies, adopt any rules or implement any policies or programs to convert signs to the metric system or to require the use of the metric system with respect to designing or preparing plans, specifications, estimates or other documents for any highway project before the conversion or use is required by federal law, except that the board may:

1. Spend monies and require the use of the metric system with respect to designing or preparing plans, specifications, estimates or other documents for a highway project that is awarded before October 1, 1997 and that is exclusively metric from its inception.

2. Prepare for conversion to and use of the metric system not more than six months before the conversion or use is required by federal law. END_STATUTE

Sec. 5. Section 28-1176, Arizona Revised Statutes, is amended to read:

START_STATUTE28-1176. Off‑highway vehicle recreation fund; annual reports; definition

A. An off‑highway vehicle recreation fund is established. The fund consists of:

1. Monies appropriated by the legislature.

2. Monies deposited pursuant to sections 28-1177 and 28‑5927.

3. Federal grants and private gifts.

B. Monies in the off‑highway vehicle recreation fund are appropriated to the Arizona state parks board director solely for the purposes provided in this article. Interest earned on monies in the fund shall be credited to the fund. Monies in the off‑highway vehicle recreation fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

C. The Arizona game and fish department shall spend thirty-five per cent percent of the monies in the off‑highway vehicle recreation fund for informational and educational programs related to safety, the environment and responsible use with respect to off‑highway vehicle recreation and law enforcement activities relating to this article and for off‑highway vehicle law enforcement pursuant to title 17, chapter 4, article 3, including seven full-time employees to enforce this article and title 17, chapter 4, article 3.

D. The state land department shall spend five per cent percent of the monies in the off-highway vehicle recreational fund to allow occupants of off‑highway vehicles with user indicia to cross state trust land on existing roads, trails and designated routes. The state land department shall use these monies for costs associated with off-highway vehicle use of lands within its jurisdiction, to mitigate damage to the land, for necessary environmental, historical and cultural clearance or compliance activities and to fund enforcement of off‑highway vehicle laws.

E. The Arizona state parks board director shall spend sixty per cent percent of the monies in the off‑highway vehicle recreation fund for the following purposes:

1. No more than twelve per cent percent to fund staff support to plan and administer the off‑highway vehicle recreation fund.

2. To establish an off-highway vehicle program based on the priorities established in the off‑highway vehicle recreational plan.

3. To designate, construct, maintain, renovate, repair or connect off‑highway vehicle routes and trails and to designate, manage and acquire land for access roads, off‑highway vehicle recreation facilities and off‑highway vehicle use areas. After expenditures pursuant to paragraph 1 of this subsection, the Arizona state parks board director shall not spend more than thirty-five per cent percent of the remaining monies received pursuant to this subsection for construction of new off-highway vehicle trails.

4. For enforcement of off‑highway vehicle laws.

5. For off-highway vehicle related informational and environmental education programs, information, signage, maps and responsible use programs.

6. For the mitigation of damages to land, revegetation and the prevention and restoration of damages to natural and cultural resources, including the closure of existing access roads, off-highway vehicle use areas and off-highway vehicle routes and trails.

7. For necessary environmental, historical and cultural clearance or compliance activities.

F. The allocation of the monies in subsection E, paragraphs 3 through 7 of this section and the percentages allocated to each of the purposes prescribed in subsection E, paragraphs 3 through 7 of this section shall be based on an off‑highway vehicle recreational plan.

G. Monies in the off-highway vehicle recreation fund shall not be used to construct new off-highway vehicle trails or routes on environmentally or culturally sensitive land unless the appropriate land management agency determines that certain new trail construction would benefit or protect cultural or sensitive sites. For the purposes of this subsection, "environmentally or culturally sensitive land" means areas of lands that are either:

1. Administratively or legislatively designated by the federal government as any of the following:

(a) A national monument.

(b) An area of critical environmental concern.

(d) An inventoried roadless area.

2. Determined by the applicable land management agency to contain significant natural or cultural resources or values.

H. The Arizona state parks board director shall examine applications for eligible projects and determine the amount of funding, if any, for each project. In determining the amount of monies for eligible projects, the Arizona state parks board director shall give preference to applications for projects with mitigation efforts and for projects that encompass a large number of purposes described in subsection E, paragraphs 3 through 7 of this section.

I. Beginning September 1, 2011, and on or before September 1 of each subsequent year, each agency that receives monies from the off‑highway vehicle recreation fund shall submit an off‑highway vehicle report to the president of the senate, the speaker of the house of representatives, the chairperson of the senate natural resources and rural affairs committee, or its successor committee, and the chairperson of the house of representatives natural resources and public safety committee, or its successor committee. The report shall be made available to the public. The report shall include information on all of the following if applicable:

1. The amount of monies spent or encumbered in the fund during the preceding fiscal year for the purposes of off-highway vehicle law enforcement activities.

2. The amount of monies spent from the off-highway vehicle recreation fund during the preceding fiscal year for employee services.

3. The number of full-time employees employed in the preceding fiscal year in connection with off-highway vehicle law enforcement activities.

4. The amount of monies spent from the off-highway vehicle recreation fund during the preceding fiscal year for information and education.

5. The number and specific location of verbal warnings, written warnings and citations given or issued during the preceding fiscal year.

6. A specific and detailed accounting for all monies spent in accordance with this section for construction of new off-highway vehicle trails, mitigation of damages to lands, revegetation, the prevention and restoration of damages to natural and cultural resources, signage, maps and necessary environmental, historical and cultural clearance or compliance activities.

J. For the purposes of this section, "off-highway vehicle recreational plan" means a plan that is maintained by the Arizona state parks board director pursuant to section 41‑511.04 41‑5603. END_STATUTE

Sec. 6. Section 28-1177, Arizona Revised Statutes, is amended to read:

START_STATUTE28-1177. Off-highway vehicle user fee; indicia; registration; state trust land recreational permit; exception

A. A person shall not operate an all-terrain vehicle or an off‑highway vehicle in this state without an off-highway vehicle user indicia issued by the department if the all-terrain vehicle or off-highway vehicle meets both of the following criteria:

1. Is designed by the manufacturer primarily for travel over unimproved terrain.

2. Has an unladen weight of eighteen hundred pounds or less.

B. A person shall apply to the department of transportation for the off-highway vehicle user indicia by submitting an application prescribed by the department of transportation and a user fee for the indicia in an amount to be determined by the director of the department of transportation in cooperation with the director of the Arizona game and fish department and the Arizona state parks board director. The user indicia is valid for one year from the date of issuance and may be renewed. The department shall prescribe by rule the design and placement of the indicia.

C. When a person pays for an off-highway vehicle user indicia pursuant to this section, the person may request a motor vehicle registration if the vehicle meets all equipment requirements to be operated on a highway pursuant to article 16 of this chapter. If a person submits a signed affidavit to the department affirming that the vehicle meets all of the equipment requirements for highway use and that the vehicle will be operated primarily off of highways, the department shall register the vehicle for highway use and the vehicle owner is not required to pay the registration fee prescribed in section 28‑2003. This subsection does not apply to vehicles that as produced by the manufacturer meet the equipment requirements to be operated on a highway pursuant to article 16 of this chapter.

D. The director shall deposit, pursuant to sections 35‑146 and 35‑147, seventy per cent percent of the user fees collected pursuant to this section in the off-highway vehicle recreation fund established by section 28-1176 and thirty per cent percent of the user fees collected pursuant to this section in the Arizona highway user revenue fund.

E. An occupant of an off-highway vehicle with a user indicia issued pursuant to this section who crosses state trust lands must comply with all of the rules and requirements under a state trust land recreational permit. All occupants of an off-highway vehicle with a user indicia shall obtain a state trust land recreational permit from the state land department for all other authorized recreational activities on state trust land.

F. This section does not apply to off-highway vehicles, all‑terrain vehicles or off-road recreational motor vehicles that are used off‑highway exclusively for agricultural, ranching, construction, mining or building trade purposes. END_STATUTE

Sec. 7. Section 28-2512, Arizona Revised Statutes, is amended to read:

START_STATUTE28-2512. All-terrain motor vehicles; off-highway vehicles; off‑road recreational motor vehicles; license plates

A. Every owner of an all-terrain vehicle, off-highway vehicle as defined in section 28‑1171 or off-road recreational motor vehicle shall apply to the department for a license plate.

B. The department shall furnish to an owner of an all‑terrain vehicle, off‑highway vehicle as defined in section 28‑1171 or off‑road recreational motor vehicle one license plate for each vehicle.

C. The fee for a plate issued pursuant to this section is eight dollars.

D. The license plate assigned to a motor vehicle pursuant to this section shall be:

1. Attached to the rear of the vehicle.

2. Securely fastened to the vehicle in a clearly visible position.

E. An owner of an off‑highway vehicle as defined in section 28‑1171 participating in an off‑highway vehicle special event as defined in section 28‑1171 is exempt from the requirements of this section.

F. On or before July 1, 2009, the director shall establish procedures to systematically replace license plates issued for all‑terrain vehicles, off‑highway vehicles and off-road recreational motor vehicles before January 1, 2009 with the license plate prescribed in this section.

G. In consultation with the Arizona game and fish department and the Arizona state parks board director, the director of the department of transportation shall design the license plate prescribed by this section. END_STATUTE

Sec. 8. Section 28-6308, Arizona Revised Statutes, is amended to read:

START_STATUTE28-6308. Regional planning agency transportation policy committee; regional transportation plan; plan review process; committee termination

A. The regional planning agency in the county shall establish a transportation policy committee consisting of twenty‑three members as follows:

1. Seventeen members of the regional planning agency, including ~~the chairperson of the citizens transportation oversight committee,~~ one member of the state transportation board who represents the county, one member of the county board of supervisors and one member representing Indian communities in the county.

2. Six members who represent regionwide business interests, one of whom must represent transit interests, one of whom must represent freight interests and one of whom must represent construction interests. The president of the senate and the speaker of the house of representatives shall each appoint three members to the committee pursuant to this paragraph. Members who are appointed pursuant to this paragraph serve six‑year terms. The chairman of the regional planning agency may submit names to the president of the senate and the speaker of the house of representatives for consideration for appointment to the transportation policy committee.

B. Through the regional planning agency, the transportation policy committee shall:

1. By a majority vote of the members, recommend approval of a twenty year comprehensive, performance based, multimodal and coordinated regional transportation plan in the county, including transportation corridors by priority and a schedule indicating the dates that construction will commence for projects contained in the plan.

2. Develop the plan in cooperation with the regional public transportation authority in the county and the department of transportation and in consultation with the county board of supervisors, Indian communities and cities and towns in the county.

3. Submit the plan for review by the regional public transportation authority in the county, the state board of transportation, the county board of supervisors, Indian communities and cities and towns in the county at the alternatives stage of the plan and the final draft stage of the plan. After reviewing the plan, the regional public transportation authority in the county, the county board of supervisors and the state board of transportation, by majority vote of the members of each entity within thirty days after receiving the plan, shall submit a written recommendation to the transportation policy committee that the plan be approved, modified or disapproved. Within thirty days after receiving the plan, Indian communities and cities and towns in the county may submit a written recommendation to the transportation policy committee that the plan be approved, modified or disapproved.

4. Consider plan modifications proposed by any of the entities as prescribed in paragraph 3 of this subsection.

5. By majority vote, approve, disapprove or further modify each proposed plan modification.

6. Provide a written response to the regional public transportation authority, the state board of transportation, the county board of supervisors and the entity that submitted the proposed modification within thirty days after the vote on the proposed modification explaining the affirmation, rejection or further modification of each proposed modification.

7. Recommend the plan to the regional planning agency for approval for an air quality conformity analysis.

C. The regional transportation plan:

1. Shall include the following transportation mode classifications with a revenue allocation to each classification consistent with section 42‑6105, subsection D:

(a) Freeways and other routes in the state highway system.

(b) Major arterial streets and intersection improvements.

2. Shall provide a suggested construction schedule for the transportation projects contained in the plan.

3. May be annually updated to introduce new controlled access highways, related grade separations and transportation projects or to modify the existing plan.

4. Shall be developed to meet federal air quality requirements established for the region in which it is located.

D. Transportation excise tax revenues that are distributed pursuant to section 42‑6105, subsection D shall not be redistributed or used for other transportation modes. Except as provided by section 28‑6353, subsections D, E and F, transportation excise tax revenues that are dedicated in the plan to a specific project or transportation system may only be redistributed to or otherwise used for another project within the same transportation mode if approved by a majority vote of the transportation policy committee.

E. The committee established pursuant to this section ends on July 1, 2024 pursuant to section 41‑3103. END_STATUTE

Sec. 9. Section 28-6313, Arizona Revised Statutes, is amended to read:

START_STATUTE28-6313. Performance audits of proposed transportation projects and systems

A. Beginning in 2010 and every fifth year thereafter, the auditor general shall contract with a nationally recognized independent auditor with expertise in evaluating multimodal transportation systems and in regional transportation planning to conduct a performance audit, as defined in section 41‑1278, of the regional transportation plan and projects scheduled for funding during the next five years.

B. With respect to light rail systems, the audit shall consider the criteria used by the federal transit administration pursuant to 49 United States Code section 5309(e)(1)(B) and the interrelationship among the criteria to provide federal funding for light rail systems. For light rail systems, the audit shall also consider:

1. Service levels.

2. Capital costs.

3. Operation and maintenance costs.

4. Transit ridership.

5. Farebox revenues.

C. The audit shall:

1. Examine the regional transportation plan and projects scheduled for funding within each transportation mode based on the performance factors established in section 28‑505, subsection A, in the context of the transportation system.

2. Review past expenditures of the regional transportation plan and examine the performance of the system in relieving congestion and improving mobility.

3. Make recommendations regarding whether further implementation of a project or transportation system is warranted, warranted with modifications or not warranted.

D. The auditor general or the auditors contracted to conduct the audit shall periodically update the transportation policy committee regarding the progress of the audit.

E. Within forty‑five days after the release of the audit, the regional public transportation authority, ~~the citizens transportation oversight committee,~~ the state transportation board and the county board of supervisors, by a majority vote of each entity, shall submit written recommendations to the transportation policy committee that the findings are agreed to or disagreed with and the recommendations should be implemented, be implemented with modification or not be implemented.

F. Within forty‑five days after the audit's release, the regional planning agency shall hold a public hearing on the audit findings and recommendations.

G. The auditor general shall distribute copies of the audit to:

1. The regional planning agency.

2. The transportation policy committee.

~~3. The citizens transportation oversight committee.~~

4. 3. The regional public transportation authority in the county.

5. 4. The county board of supervisors.

6. 5. The state transportation board.

7. 6. The governor, secretary of state, president of the senate and speaker of the house of representatives.

8. 7. The Arizona state library, archives and public records.

9. 8. Any other person who requests a copy pursuant to title 39, chapter 1, article 2.

H. The state transportation board, regional planning agency, regional public transportation authority and county board of supervisors shall cooperate with and submit to the auditor general and the auditors contracted to conduct the audit information necessary to conduct the audits under this section.

I. The cost incurred by the auditor general in contracting with independent auditors for conducting performance audits under subsection A of this section shall be paid from revenues of the county transportation excise tax under section 42‑6105. When due, the payments have priority over any other distribution authorized by section 42‑6105. The auditor general shall deposit the payments in the audit services revolving fund established by section 41‑1279.06. END_STATUTE

Sec. 10. Section 28-6353, Arizona Revised Statutes, is amended to read:

START_STATUTE28-6353. Regional transportation plan and project enhancements and changes

A. The regional planning agency in the county shall approve any change in the regional transportation plan and the projects funded in the regional transportation plan that affect the planning agency's transportation improvement program, including project priorities.

B. Requests for changes to transportation projects funded in the regional transportation plan that would materially increase costs shall be submitted to the regional planning agency for approval and submitted by the regional planning agency to the board for approval.

C. If a local authority requests an enhancement to a transportation project funded pursuant to the regional transportation plan, the local authority shall pay all costs associated with the enhancement.

D. The process prescribed in subsection E of this section is required if:

1. An audit finding pursuant to section 28‑6313 recommends that a project or system in the regional transportation plan is not warranted or requires a modification that is a major amendment as defined in section 28‑6301.

2. The transportation policy committee recommends to the regional planning agency a modification of the regional transportation plan that is a major amendment as defined in section 28‑6301.

E. A major amendment requires the following:

1. Consideration by the transportation policy committee of alternatives in the same modal category that will relieve congestion and improve mobility in the same general corridor addressed by the originally planned project or system.

2. If a reasonable option is identified as an alternative for the originally planned project or system, the transportation policy committee shall submit the proposed amendment for review by the regional public transportation authority in the county, the state board of transportation, the county board of supervisors, Indian communities, and cities and towns in the county ~~and the citizens transportation oversight committee~~. After reviewing the proposed amendment, the board of directors of the regional public transportation authority, the state board of transportation and the county board of supervisors, by a majority vote of the members of each board within thirty days after receiving the proposed amendment, shall submit a written recommendation to the transportation policy committee that the proposed amendment be approved, modified or disapproved. Within thirty days after receiving the amendment, ~~the citizens transportation oversight committee and~~ the Indian communities, and cities and towns may also submit written recommendations to the transportation policy committee that the proposed amendment be approved, modified or disapproved.

3. If no reasonable option for an alternative to the originally planned project or system is identified, the transportation policy committee shall submit an amendment to delete the original project for review by the regional public transportation authority, the state board of transportation, the county board of supervisors, Indian communities, and cities and towns in the county ~~and the citizens transportation oversight committee~~. After reviewing the proposed amendment the board of directors of the regional public transportation authority, the state board of transportation and the county board of supervisors, by a majority vote of the members of each board within thirty days after receiving the proposed amendment, shall submit a written recommendation to the transportation policy committee that the proposed amendment be approved, modified or disapproved. Within thirty days after receiving the proposed amendment, ~~the citizens transportation oversight committee and~~ Indian communities, and cities and towns in the county may also submit written recommendations to the transportation policy committee that the proposed amendment be approved, modified or disapproved.

4. The transportation policy committee must consider any written recommendations submitted by any of the reviewing entities as prescribed by paragraph 2 or 3 of this subsection.

5. The transportation policy committee shall recommend approval, disapproval or modification of the proposed amendment to the regional planning agency for consideration.

F. The affirmative vote of seventeen members of the transportation policy committee is required to approve and proceed with either of the following:

1. Recommendation of a major amendment to the regional planning agency that fails to receive approval of either the regional public transportation authority in the county, the state board of transportation or the county board of supervisors as prescribed in this section.

2. A transportation project or system that is found to be unwarranted by an audit as prescribed in this section. END_STATUTE

Sec. 11. Repeal

Sections 28-6356, 28-6357 and 28-6358, Arizona Revised Statutes, are repealed.

Sec. 12. Section 37-281.03, Arizona Revised Statutes, is amended to read:

START_STATUTE37-281.03. Leasing land along Colorado river from United States; subleasing requirements; limitations

A. The state land department may lease from the United States or its authorized agencies, for park, recreational and wildlife purposes, lands under the jurisdiction of the bureau of reclamation, which that are located along the Colorado river embracing the area from Davis dam to the international line, for such terms and under such conditions as the United States or its agencies may provide.

B. The state land department may sublease lands leased to the department, as provided in subsection A of this section, for park, recreational and wildlife purposes to the Arizona state parks board director, the game and fish commission or to any political subdivision of the this state.

C. The provisions of section 41‑511.05 41‑5604, paragraph 3, restricting the creation of a state park or monument or additions thereto to one hundred sixty acres, shall not apply to any land leased or acquired from the state land department for park and recreational purposes which that are under the jurisdiction of the bureau of reclamation on lands located along the Colorado river embracing the area from Davis dam to the international line.

D. The provisions of Sections 37‑281 and 37‑281.02 shall do not apply to sublease of lands leased to the state under the provisions of subsection A of this section.

E. The Arizona state parks board director, the game and fish commission or a political subdivision of the this state which that leases land from the state land department as provided by this section may sublease such lands according to the terms of the lease executed between the state land department and the Arizona state parks board director, the game and fish commission or the political subdivision of the this state. END_STATUTE

Sec. 13. Section 37-312, Arizona Revised Statutes, is amended to read:

START_STATUTE37-312. Nominating and classifying trust land as suitable for conservation purposes

A. On the commissioner's initiative, on petition as provided by subsection C of this section or as provided by section 37‑332, the commissioner may nominate certain trust lands as being under consideration for classification as trust lands suitable for conservation purposes. The commissioner shall not nominate trust lands as being under consideration for classification as trust lands suitable for conservation purposes unless the trust lands are eligible for classification under this section and are located within:

1. One mile of the corporate boundaries of an incorporated city or town having a population of less than ten thousand persons according to the most recent United States decennial census.

2. Three miles of the corporate boundaries of an incorporated city or town having a population of ten thousand persons or more according to the most recent United States decennial census.

3. Ten miles of the boundaries that are established in paragraph 1 or 2 of this subsection and that are located within counties with a population greater than five hundred thousand persons according to the most recent United States decennial census and are adjacent to lands that are eligible for conservation and share with them a specific physical characteristic such as a reach of a river, a mountain slope or an archaeological feature.

B. In addition to the lands identified in subsection A, paragraphs 1 through 3 of this section, the following lands may be nominated for reclassification by the commissioner:

1. Those lands within the Tortolita mountain park in Pinal county located within T10S, R12E and T10S, R13E.

2. Those lands in the vicinity of the Superstition mountains in Pinal county located within T1N, R9E; T1N, R10E; T1S, R9E; and T1S, R10E.

3. Those lands in the vicinity of the San Tan mountains in Pinal county located within T3S, R7E, section 10, the northwest quarter of the southeast quarter and the south half of the southeast quarter; section 15, the north half and southeast quarter.

4. The following lands located in Coconino county:

(a) T19N, R5E, section 3.

(b) T19N, R6E, sections 5 and 6.

(d) T20N, R6E, sections 4, 5, 6, 8, 10, 14, 17, 18, 20, 22, 26, 28, 30, 32 and 34.

(e) T21N, R6E, sections 21, 22, 28, 31, 32 and 33.

C. The commissioner shall receive a petition to nominate trust lands as being under consideration for classification as trust lands suitable for conservation purposes from:

1. A state agency that leases the land or intends to lease or purchase the land.

2. The board of supervisors of the county in which the land is located.

3. The governing body of a city or town if the land is located within:

(a) The corporate boundaries of the city or town.

(b) One mile outside the corporate boundaries and the city or town has a population of less than ten thousand persons.

4. Ten or more private individuals who:

(a) Reside in the county in which the land is located.

(b) Have the financial capability to lease or purchase the land.

5. A nonprofit corporation or trust, the purpose or powers of which include conservation of natural, scenic, open space or other conservation values.

6. The current lessee of the land.

7. A business or corporation that is legally empowered to own or manage real property in this state and that intends to lease or purchase the land.

D. A petitioner who requests the commissioner to reclassify the land pursuant to this article solely or partially on grounds that the land contains cultural resources worthy of conservation shall provide, on the commissioner's request, a report on the results of a cultural resources survey of the petitioned land for the commissioner's consideration before determining if the reclassification is in the best interest of the trust.

E. Unless the commissioner nominates the trust lands under section 37‑332, a petitioner shall post a bond or other security sufficient to cover the costs of the planning, notice, advertisement and public hearing as required by this article and as determined by the commissioner. The bond or security is forfeit to this state if the commissioner reclassifies the land pursuant to this article.

F. The commissioner shall not nominate or classify trust land as suitable for conservation purposes if a development plan was approved for the land pursuant to article 5.1 of this chapter before July 26, 1996. The commissioner may nominate and classify trust land as suitable for conservation purposes in an area within a development plan approved after July 26, 1996 if appropriate conservation purposes are incorporated within the development plan prepared for the commissioner's approval. In nominating and classifying trust land as suitable for conservation purposes under this subsection, the commissioner shall follow the procedures for requesting local government zoning pursuant to section 37‑334, subsection E.

G. Unless the commissioner nominates the trust lands under section 37‑332, after nominating the trust lands under subsection A or B of this section, the commissioner shall:

1. Mail notice of intent to classify the lands as trust lands suitable for conservation purposes to the beneficiary or beneficiaries for whom the lands are held in trust, existing lessees, local planning authorities, the appropriate regional planning authorities and owners of private land that consists of forty or more acres and that is located within three hundred feet of the trust land. The notice shall include the date, time and place of the public hearing to be held pursuant to subsection H of this section and a request for written comments on the proposed classification within thirty days after the date of notice.

2. Within thirty days after giving the notice under paragraph 1 of this subsection:

(a) Publish the notice stating a date, time and place of a public hearing for six publications in a newspaper of general circulation in the county in which the designated lands are located.

(b) Mail the notice to any person who has requested notice of any classification under this article.

(c) Mail the notice to the Arizona game and fish department, the Arizona department of agriculture, the Arizona state parks board director, the Arizona department of transportation and any other affected state agency.

H. Within sixty days after the last date of publication of notice under subsection G of this section, the commissioner or the commissioner's designee shall conduct a public hearing in a location in this state as close as conveniently possible to the trust land to receive and record oral and written testimony concerning the proposed classification.

I. In determining whether reclassification is in the best interest of the trust, the commissioner shall:

1. Consult with the governing body of each city or town in which the land proposed for reclassification is located or to which the land is contiguous, the county board of supervisors of each county in which the land is located if the land is not located within the boundaries of a city or town and the local planning and zoning authorities, including the affected regional planning authorities.

2. Consider recommendations of the conservation advisory committee.

3. 2. Consider all evidence and testimony that are submitted at the hearing that was held pursuant to:

(a) Subsection H of this section if the commissioner nominated the trust lands under this section.

(b) Section 37‑332, subsections B, C and D if the commissioner nominated the trust lands under section 32‑332.

4. 3. Consider the physical and economic impacts that the reclassification would have on other lands owned or controlled by the current lessee and the physical and economic impacts on the local community.

5. 4. Consider the existence of any holding lease on the lands.

6. 5. Consider the existence of any planning permit issued by the commissioner for the lands pursuant to article 5.1 of this chapter.

7. 6. Consider the amount of progress on any development plans being completed for the lands pursuant to article 5.1 of this chapter.

8. 7. Evaluate the mineral potential of the land.

J. The commissioner shall determine whether the reclassification is in the best interest of the trust and, in making the determination, shall state in writing the reasons why the classification is or is not in the best interests of the trust.

K. If the commissioner reclassifies the trust land as suitable for conservation purposes, the commissioner shall adopt a plan to allow existing and conservation uses to be coordinated in a manner that will protect both existing uses and conservation and open space values. If the reclassified trust land is unleased or the petitioner is the lessee pursuant to subsection C, paragraph 6 of this section, the commissioner may require a plan from the petitioners describing how the property is to be managed. In adopting the plan, the commissioner shall consult with:

1. The conservation advisory committee.

2. 1. The governing body of the city or town if the land is located in a city or town.

3. 2. The county board of supervisors if the land is not located in a city or town.

4. 3. Existing lessees of the trust land, local and regional planning authorities and owners of private land who provided written comments pursuant to subsection G, paragraph 1 of this section.

5. 4. Any other person or entity that the commissioner considers to be necessary.

L. The classification of state land as suitable for conservation does not affect the designation or use of adjacent federal, state or private land.

M. A person who is adversely affected by the commissioner's decision to reclassify land as suitable for conservation purposes may appeal the decision to the board of appeals pursuant to section 37‑215.

N. On classifying trust lands suitable for conservation purposes, existing leases shall not be canceled or modified as a result of any actions taken pursuant to this article, and renewals of existing leases shall be pursuant to section 37‑291. END_STATUTE

Sec. 14. Repeal

Section 37-316, Arizona Revised Statutes, is repealed.

Sec. 15. Section 37-904, Arizona Revised Statutes, is amended to read:

START_STATUTE37-904. Public lands board of review; members; powers and duties; staff and officers; service of process

A. There is established a The public lands board of review is established consisting of the following members:

1. The state land commissioner.

2. The director of environmental quality.

3. The state geologist.

4. The director of the Arizona state parks board.

5. The director of the department of transportation.

6. The deputy state forester.

7. The director of water resources.

8. The director of the Arizona game and fish department.

9. As provided in subsection F of this section, the chairman of the board of supervisors of a county in which public lands are located.

10. One county supervisor, appointed by the governor to serve at the pleasure of the governor.

B. The board shall elect one of its members to serve as chairman. The chairman shall call meetings of the board and prescribe the time and place of each meeting.

C. Members of the board are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2.

D. The board:

1. Shall review and approve or disapprove all rules and regulations proposed by the commissioner under this chapter.

2. May review any decision of the commissioner relating to public lands under this chapter and affirm, modify or reverse the decision.

E. The state land department shall provide the administrative staff and offices needed by the board, and the state land commissioner shall be deemed the clerk of the board upon on which notices of appeal and other process shall be served.

F. The chairman of the county board of supervisors of a county in which public lands are located and which are the subject of the board action shall serve as a member of the board for the purposes of the action. END_STATUTE

Sec. 16. Section 37-1123, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1123. Receiving and compiling evidence and records

A. The commission shall receive, review and consider all relevant historical and other evidence presented to the commission by the state land department and by other persons regarding the navigability or nonnavigability of watercourses in this state as of February 14, 1912, together with associated public trust values, except for evidence with respect to the Colorado river, and, after public hearings conducted pursuant to section 37‑1126:

1. Based only on evidence of navigability or nonnavigability, determine which watercourses were not navigable as of February 14, 1912.

2. Based only on evidence of navigability or nonnavigability, determine which watercourses were navigable as of February 14, 1912.

3. In a separate, subsequent proceeding pursuant to section 37‑1128, subsection B, consider evidence of public trust values and then identify and make a public report of any public trust values that are now associated with the navigable watercourses.

B. Before receiving, reviewing or considering any evidence pursuant to subsection A of this section for a particular watercourse, the commission shall publish notice once each week for three consecutive weeks in a newspaper of general circulation in each county in which the watercourse is located. The notice shall include:

1. A statement of the intent to receive, review and consider evidence.

2. An address to which interested parties may submit evidence for the commission's review.

3. A date by which evidence must be submitted.

4. A general description of the procedures the commission will use to review the evidence.

C. Private citizens, clubs, organizations, corporations, partnerships, unincorporated associations, municipal corporations and public entities may present evidence to the commission at a hearing according to commission rules. The submission of evidence by any party pursuant to the commission's notice under subsection B of this section does not preclude that party from submitting additional evidence at any hearing before the commission.

D. The state land department shall consult and coordinate its efforts to gather evidence of navigability and public trust values with the department of water resources, the game and fish department, the Arizona state parks board director and other interested persons and public and private entities. The commission shall consider the information that those persons and entities have compiled regarding the navigability of watercourses.

E. After public notice, the commission shall set priorities for investigating and conduct hearings on the navigability of the watercourses in this state. In setting the priorities, the commission shall consider:

1. The number and value of parcels of real property that are affected by a state claim of sovereign ownership to the bed of the watercourse.

2. The degree of hardship to private parties and political subdivisions due to title uncertainties relating to the bed of the watercourse.

3. The significance of the public trust values associated with the watercourse and the degree to which those values are threatened.

4. The potential viability of this state's sovereign claims to the watercourse, giving higher priority consideration to more viable claims.

F. A person who is aggrieved by the undetermined navigability status of a watercourse may petition the commission to modify the priority set under subsection E of this section and grant expedited consideration for a particular watercourse. The commission shall grant the petition if justified by the factors listed in subsection E of this section.

G. No judicial action seeking a determination of navigability of a watercourse, to establish or obtain ownership of land within the bed and banks of a watercourse or to determine any public trust values associated with a watercourse may be commenced, continued or completed unless the commission has made a final determination with respect to the watercourse pursuant to section 37‑1128. This subsection does not preclude the department from seeking a temporary restraining order or injunctive relief at any time to prevent loss or damage to public trust resources.

H. Notwithstanding subsection G of this section, any condemnation action by this state or a political subdivision of this state may proceed to trial and conclusion, including the payment of compensation, regardless of the potential claim of title by this state based on the navigability of the watercourse. In any action commenced or continued pursuant to this subsection, the court shall not consider or decide the navigability of the watercourse. Any judgment in any action commenced or continued pursuant to this subsection shall be subject to a potential claim of title by this state based on the navigability of the watercourse. END_STATUTE

Sec. 17. Section 37-1156, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1156. Riparian trust fund; acquisition and management of riparian lands

A. The riparian trust fund is established consisting of monies received from the sale or use of sovereign streambed lands and resources under this chapter, damages collected from the United States pursuant to section 37‑1131 and any other appropriations, gifts, grants or donations designated by the donor for that purpose. The state shall maintain the fund separate and apart from all other funds. On notice from the commissioner the state treasurer shall invest and divest monies in the riparian trust fund as provided by section 35‑313, and monies earned from investment shall be credited to the riparian trust fund.

B. The state land commissioner shall use the income, other proceeds and not more than seventy‑five per cent percent of any added principal of the fund in a fiscal year pursuant to this section:

1. To acquire, from willing sellers, land or interests in land located in riparian areas in this state for public purposes consistent with conservation of wildlife and recreation.

2. For such other expenditures as promote the purposes of the public trust.

C. The state land commissioner shall consult with and receive advice from the Arizona state parks board director and the Arizona game and fish department regarding the acquisition and management of land and interests in land under this section. END_STATUTE

Sec. 18. Section 37-1302, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1302. Powers and duties of state forester; rules; legislative presentation; acceptance of federal law

A. The state forester is designated as the agent of the state of Arizona and shall administer this chapter. The state forester shall:

1. Exercise and perform all powers and duties vested in or imposed on the Arizona department of forestry and fire management.

2. Adopt rules necessary to discharge the powers and duties of the Arizona department of forestry and fire management, including rules that create efficiencies, protect the public health and safety and prescribe budgetary obligations.

3. Subject to title 41, chapter 4, article 4, employ, determine the terms and conditions of employment of and prescribe the duties and powers of administrative, professional, technical, secretarial, clerical and other persons as may be necessary in the performance of the Arizona department of forestry and fire management's duties. The compensation of department employees shall be as determined pursuant to section 38‑611.

4. Contract for the services of outside advisors, consultants and aides as may be reasonably necessary.

5. Perform all management and administrative functions assigned or delegated to this state by the United States relating to forestry and financial assistance and grants relating to forestry.

6. Identify sources of information relating to forest management, including wildfire suppression and recovery and administrative and judicial appeals and litigation with respect to timber sales and forest thinning projects in this state, and develop procedures for compiling and transferring that information to the state forester.

7. Take necessary action to maximize state fire assistance grants, including establishing timelines for using grant monies and reallocating lapsed grant monies to other projects.

8. Conduct education and outreach in forest communities by explaining the wildfire threat to private property caused by lack of timber harvesting and thinning.

9. Monitor forestry projects and wildfire activities.

10. Assist in the development of the forestry products industry in this state.

11. Intervene on behalf of this state and its citizens in administrative and judicial appeals and litigation that challenge governmental efforts supported by the state forester if the state forester determines that intervention is in the best interests of this state.

12. Annually develop and implement a comprehensive plan for the deployment of state, county, municipal, fire district, volunteer fire association and private fire service provider contract resources to wildfire suppression activities. The wildfire deployment plan shall take into account anticipated fire conditions and fire severity and may include prepositioning resources as necessary. The state forester shall consult with federal land management firefighting agencies, state and county emergency agencies, municipal fire departments, fire districts, statewide fire district and statewide fire chiefs associations, volunteer fire departments and private fire contractors in the development of a comprehensive wildfire deployment plan, the implementation of standards for training and certification for all classes of wildland fire personnel and the implementation of standards for wildland fire apparatus and equipment that are deployed under cooperative agreements with the state forester.

13. Provide necessary oversight to ensure standardized training and certification for all classifications of wildfire firefighters to be deployed, through cooperator agreement with the state forester, to any federal or state wildfire incident.

14. Develop recommendations for minimum standards for safeguarding life and property from wildland fires and fire hazards, preventing wildland fires and alleviating fire hazards.

15. Develop recommendations for minimum standards for the storage, sale, distribution and use of dangerous chemicals, combustibles, flammable liquids, explosives and radioactive materials in wildland-urban interface areas.

16. Consult with the department of public safety, the department of emergency and military affairs and local governments regarding the establishment of fire evacuation routes and community alert systems.

17. Make recommendations for minimum standards for the creation of defensible spaces in and around wildland-urban interface areas as authorized by existing county and municipal laws and ordinances.

B. During the first regular session of each legislature, the state forester shall present information to the legislative committees with jurisdiction over forestry issues. The state forester shall collaborate with, and invite the participation of, relevant state, federal and local governmental officers and agencies. A written report is not required, but the presentation shall include information concerning:

1. Forestry management, including the current conditions of the forests in this state on federal, state and private property as affected by federal, state and local public policies, climatic conditions, wildfire hazards, pest infestations, overgrowth and overgrowth control policies and methods and the effects of current federal policy on forest management and impacts on forest land management.

2. The wildland‑urban interface, including the effects of county and municipal zoning policies and wildfire hazards on public and private property.

3. Wildfire emergency management and all hazard response issues, including:

(a) Intergovernmental and interagency primacy, cooperation, coordination, roles and training of federal, state and local forestry, firefighting and law enforcement agencies.

(b) Channels and methods of communicating emergency information to the public.

(d) The level of federal, state and local emergency funding.

C. The state forester may:

1. Furnish technical advice to the people of this state on forestry and land management matters.

2. Do all other acts necessary to take advantage of and carry out the provisions of the act of Congress described in subsection D of this section.

D. This state accepts the provisions of the cooperative forestry assistance act of 1978 (P.L. 95‑313; 92 Stat. 365; 16 United States Code chapter 41) providing for federal forestry assistance programs to states. END_STATUTE

Sec. 19. Section 38-842, Arizona Revised Statutes, is amended to read:

START_STATUTE38-842. Definitions

In this article, unless the context otherwise requires:

1. "Accidental disability" means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's job classification and that was incurred in the performance of the employee's duty.

2. "Accumulated contributions" means, for each member, the sum of the amount of the member's aggregate contributions made to the fund and the amount, if any, attributable to the employee's contributions before the member's effective date under another public retirement system, other than the federal social security act, and transferred to the fund minus the benefits paid to or on behalf of the member.

3. "Actuarial equivalent" means equality in present value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest assumptions adopted by the board.

4. "Alternate payee" means the spouse or former spouse of a participant as designated in a domestic relations order.

5. "Alternate payee's portion" means benefits that are payable to an alternate payee pursuant to a plan approved domestic relations order.

6. "Annuitant" means a person who is receiving a benefit pursuant to section 38‑846.01.

7. "Average monthly benefit compensation" means the result obtained by dividing the total compensation paid to an employee during a considered period by the number of months, including fractional months, in which such compensation was received. For an employee who becomes a member of the system:

(a) Before January 1, 2012, the considered period shall be the three consecutive years within the last twenty completed years of credited service that yield the highest average.

(b) On or after January 1, 2012 and before July 1, 2017, the considered period is the five consecutive years within the last twenty completed years of credited service that yield the highest average. In the computation under this paragraph, a period of nonpaid or partially paid industrial leave shall be considered based on the compensation the employee would have received in the employee's job classification if the employee was not on industrial leave.

(c) On or after July 1, 2017, the considered period is the five consecutive years within the last fifteen completed years of credited service that yield the highest average. In the computation under this paragraph, a period of nonpaid or partially paid industrial leave shall be considered based on the compensation the employee would have received in the employee's job classification if the employee was not on industrial leave.

8. "Board" means the board of trustees of the system, who are the persons appointed to invest and operate the fund.

9. "Catastrophic disability" means a physical and not a psychological condition that the local board determines prevents the employee from totally and permanently engaging in any gainful employment and that results from a physical injury incurred in the performance of the employee's duty.

10. "Certified peace officer" means a peace officer certified by the Arizona peace officer standards and training board.

11. "Claimant" means any member or beneficiary who files an application for benefits pursuant to this article.

12. "Compensation" means, for the purpose of computing retirement benefits, base salary, overtime pay, shift differential pay, military differential wage pay, compensatory time used by an employee in lieu of overtime not otherwise paid by an employer and holiday pay paid to an employee by the employer for the employee's performance of services in an eligible group on a regular monthly, semimonthly or biweekly payroll basis and longevity pay paid to an employee at least every six months for which contributions are made to the system pursuant to section 38‑843, subsection D. Compensation does not include, for the purpose of computing retirement benefits, payment for unused sick leave, payment in lieu of vacation, payment for unused compensatory time or payment for any fringe benefits. In addition, compensation does not include, for the purpose of computing retirement benefits, payments made directly or indirectly by the employer to the employee for work performed for a third party on a contracted basis or any other type of agreement under which the third party pays or reimburses the employer for the work performed by the employee for that third party, except for third party contracts between public agencies for law enforcement, criminal, traffic and crime suppression activities training or fire, wildfire, emergency medical or emergency management activities or where the employer supervises the employee's performance of law enforcement, criminal, traffic and crime suppression activities training or fire, wildfire, emergency medical or emergency management activities. For the purposes of this paragraph, "base salary" means the amount of compensation each employee is regularly paid for personal services rendered to an employer before the addition of any extra monies, including overtime pay, shift differential pay, holiday pay, longevity pay, fringe benefit pay and similar extra payments.

13. "Credited service" means the member's total period of service before the member's effective date of participation, plus those compensated periods of the member's service thereafter for which the member made contributions to the fund.

14. "Cure period" means the ninety-day period in which a participant or alternate payee may submit an amended domestic relations order and request a determination, calculated from the time the system issues a determination finding that a previously submitted domestic relations order did not qualify as a plan approved domestic relations order.

15. "Depository" means a bank in which all monies of the system are deposited and held and from which all expenditures for benefits, expenses and investments are disbursed.

16. "Determination" means a written document that indicates to a participant and alternate payee whether a domestic relations order qualifies as a plan approved domestic relations order.

17. "Determination period" means the ninety-day period in which the system must review a domestic relations order that is submitted by a participant or alternate payee to determine whether the domestic relations order qualifies as a plan approved domestic relations order, calculated from the time the system mails a notice of receipt to the participant and alternate payee.

18. "Direct rollover" means a payment by the system to an eligible retirement plan that is specified by the distributee.

19. "Distributee" means a member, a member's surviving spouse or a member's spouse or former spouse who is the alternate payee under a plan approved domestic relations order.

20. "Domestic relations order" means an order of a court of this state that is made pursuant to the domestic relations laws of this state and that creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive a portion of the benefits payable to a participant.

21. "Effective date of participation" means July 1, 1968, except with respect to employers and their covered employees whose contributions to the fund commence thereafter, the effective date of their participation in the system is as specified in the applicable joinder agreement.

22. "Effective date of vesting" means the date a member's rights to benefits vest pursuant to section 38‑844.01.

23. "Eligible child" means an unmarried child of a deceased member or retired member who meets one of the following qualifications:

(a) Is under eighteen years of age.

(b) Is at least eighteen years of age and under twenty‑three years of age only during any period that the child is a full‑time student.

(c) Is under a disability that began before the child attained twenty‑three years of age and remains a dependent of the surviving spouse or guardian.

24. "Eligible groups" means only the following who are regularly assigned to hazardous duty:

(a) Municipal police officers who are certified peace officers.

(b) Municipal firefighters.

(c) Paid full‑time firefighters employed directly by a fire district organized pursuant to section 48‑803 or 48‑804 or a joint powers authority pursuant to section 48‑805.01 with three or more full‑time firefighters, but not including firefighters employed by a fire district pursuant to a contract with a corporation.

(d) State highway patrol officers who are certified peace officers.

(e) State firefighters.

(f) County sheriffs and deputies who are certified peace officers.

(g) Game and fish wardens who are certified peace officers.

(h) Police officers who are certified peace officers and firefighters of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424. A police officer shall be designated pursuant to section 28‑8426 to aid and supplement state and local law enforcement agencies and a firefighter's sole duty shall be to perform firefighting services, including services required by federal regulations.

(i) Police officers who are certified peace officers and who are appointed by the Arizona board of regents.

(j) Police officers who are certified peace officers and who are appointed by a community college district governing board.

(k) State attorney general investigators who are certified peace officers.

(l) County attorney investigators who are certified peace officers.

(m) Police officers who are certified peace officers and who are employed by an Indian reservation police agency.

(n) Firefighters who are employed by an Indian reservation firefighting agency.

(o) Department of liquor licenses and control investigators who are certified peace officers.

(p) Arizona department of agriculture officers who are certified peace officers.

(q) Arizona state parks board rangers and managers who are certified peace officers.

(r) County park rangers who are certified peace officers.

25. "Eligible retirement plan" means any of the following that accepts a distributee's eligible rollover distribution:

(a) An individual retirement account described in section 408(a) of the internal revenue code.

(b) An individual retirement annuity described in section 408(b) of the internal revenue code.

(d) A qualified trust described in section 401(a) of the internal revenue code.

(e) An annuity contract described in section 403(b) of the internal revenue code.

(f) An eligible deferred compensation plan described in section 457(b) of the internal revenue code that is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into the eligible deferred compensation plan from this plan.

26. "Eligible rollover distribution" means a payment to a distributee, but does not include any of the following:

(a) Any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the member or the joint lives or joint life expectancies of the member and the member's beneficiary or for a specified period of ten years or more.

(b) Any distribution to the extent the distribution is required under section 401(a)(9) of the internal revenue code.

(d) Any distribution made to satisfy the requirements of section 415 of the internal revenue code.

(e) Hardship distributions.

(f) Similar items designated by the commissioner of the United States internal revenue service in revenue rulings, notices and other guidance published in the internal revenue bulletin.

27. "Employee" means any person who is employed by a participating employer and who is a member of an eligible group but does not include any persons compensated on a contractual or fee basis. If an eligible group requires certified peace officer status or firefighter certification and at the option of the local board, employee may include a person who is training to become a certified peace officer or firefighter.

28. "Employers" means:

(a) Cities contributing to the fire fighters' relief and pension fund as provided in sections 9‑951 through 9‑971 or statutes amended thereby and antecedent thereto, as of June 30, 1968 on behalf of their full‑time paid firefighters.

(b) Cities contributing under the state police pension laws as provided in sections 9‑911 through 9‑934 or statutes amended thereby and antecedent thereto, as of June 30, 1968 on behalf of their municipal policemen.

(d) The state, or any political subdivision of this state, including towns, cities, fire districts, joint powers authorities, counties and nonprofit corporations operating public airports pursuant to sections 28‑8423 and 28‑8424, that has elected to participate in the system on behalf of an eligible group of public safety personnel pursuant to a joinder agreement entered into after July 1, 1968.

(e) Indian tribes that have elected to participate in the system on behalf of an eligible group of public safety personnel pursuant to a joinder agreement entered into after July 1, 1968.

29. "Fund" means the public safety personnel retirement fund, which is the fund established to receive and invest contributions accumulated under the system and from which benefits are paid.

30. "Local board" means the retirement board of the employer, who are the persons appointed to administer the system as it applies to their members in the system.

31. "Member":

(a) Means any full-time employee who meets all of the following qualifications:

(i) Who is either a paid municipal police officer, a paid firefighter, a law enforcement officer who is employed by this state including the director thereof, a state firefighter who is primarily assigned to firefighting duties, a firefighter or police officer of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424, all ranks designated by the Arizona law enforcement merit system council, a state attorney general investigator who is a certified peace officer, a county attorney investigator who is a certified peace officer, a department of liquor licenses and control investigator who is a certified peace officer, an Arizona department of agriculture officer who is a certified peace officer, an Arizona state parks board ranger or manager who is a certified peace officer, a county park ranger who is a certified peace officer, a person who is a certified peace officer and who is employed by an Indian reservation police agency, a firefighter who is employed by an Indian reservation firefighting agency or an employee included in a group designated as eligible employees under a joinder agreement entered into by their employer after July 1, 1968 and who is or was regularly assigned to hazardous duty or, beginning retroactively to January 1, 2009, who is a police chief or a fire chief.

(ii) Who, on or after the employee's effective date of participation, is receiving compensation for personal services rendered to an employer or would be receiving compensation except for an authorized leave of absence.

(iii) Whose customary employment is at least forty hours per week or, for those employees who customarily work fluctuating workweeks, whose customary employment averages at least forty hours per week.

(iv) Who is engaged to work for more than six months in a calendar year.

(v) Who, if economic conditions exist, is required to take furlough days or reduce the hours of the employee's normal workweek below forty hours but not less than thirty hours per pay cycle, and maintain the employee's active member status within the system as long as the hour change does not extend beyond twelve consecutive months.

(vi) Who has not attained age sixty‑five before the employee's effective date of participation or who was over age sixty‑five with twenty‑five years or more of service prior to the employee's effective date of participation.

(b) Does not include an employee who is hired on or after July 1, 2017, who makes the irrevocable election to participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter and who was not an active, an inactive or a retired member of the system or a member of the system with a disability on June 30, 2017.

32. "Normal retirement date" means:

(a) For an employee who becomes a member of the system before January 1, 2012, the first day of the calendar month immediately following the employee's completion of twenty years of service or the employee's sixty‑second birthday and the employee's completion of fifteen years of service.

(b) For an employee who becomes a member of the system on or after January 1, 2012 and before July 1, 2017, the first day of the calendar month immediately following the employee's completion of twenty‑five years of service if the employee is at least fifty‑two and one‑half years of age.

(c) For an employee who becomes a member of the system on or after July 1, 2017, the first day of the calendar month immediately following the employee's completion of fifteen years of credited service if the employee is at least fifty‑five years of age.

33. "Notice of receipt" means a written document that is issued by the system to a participant and alternate payee and that states that the system has received a domestic relations order and a request for a determination that the domestic relations order is a plan approved domestic relations order.

34. "Ordinary disability" means a physical condition that the local board determines will prevent an employee totally and permanently from performing a reasonable range of duties within the employee's department or a mental condition that the local board determines will prevent an employee totally and permanently from engaging in any substantial gainful activity.

35. "Participant" means a member who is subject to a domestic relations order.

36. "Participant's portion" means benefits that are payable to a participant pursuant to a plan approved domestic relations order.

37. "Pension" means a series of monthly amounts that are payable to a person who is entitled to receive benefits under the plan but does not include an annuity that is payable pursuant to section 38‑846.01.

38. "Personal representative" means the personal representative of a deceased alternate payee.

39. "Physician" means a physician who is licensed pursuant to title 32, chapter 13 or 17.

40. "Plan approved domestic relations order" means a domestic relations order that the system approves as meeting all the requirements for a plan approved domestic relations order as otherwise prescribed in this article.

41. "Plan year" or "fiscal year" means the period beginning on July 1 of any year and ending on June 30 of the next succeeding year.

42. "Regularly assigned to hazardous duty" means regularly assigned to duties of the type normally expected of municipal police officers, municipal or state firefighters, eligible fire district firefighters, state highway patrol officers, county sheriffs and deputies, fish and game wardens, firefighters and police officers of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424, police officers who are appointed by the Arizona board of regents or a community college district governing board, state attorney general investigators who are certified peace officers, county attorney investigators who are certified peace officers, department of liquor licenses and control investigators who are certified peace officers, Arizona department of agriculture officers who are certified peace officers, Arizona state parks board rangers and managers who are certified peace officers, county park rangers who are certified peace officers, police officers who are certified peace officers and who are employed by an Indian reservation police agency or firefighters who are employed by an Indian reservation firefighting agency. Those individuals who are assigned solely to support duties such as secretaries, stenographers, clerical personnel, clerks, cooks, maintenance personnel, mechanics and dispatchers are not assigned to hazardous duty regardless of their position classification title. Since the normal duties of those jobs described in this paragraph are constantly changing, questions as to whether a person is or was previously regularly assigned to hazardous duty shall be resolved by the local board on a case‑by‑case basis. Resolutions by local boards are subject to rehearing and appeal.

43. "Retirement" or "retired" means termination of employment after a member has fulfilled all requirements for a pension, for an employee who becomes a member of the system on or after January 1, 2012 and before July 1, 2017, attains the age and service requirements for a normal retirement date or for an employee who becomes a member of the system on or after July 1, 2017 attains the age and credited service requirements for a normal retirement date. Retirement shall be considered as commencing on the first day of the month immediately following a member's last day of employment or authorized leave of absence, if later.

44. "Segregated funds" means the amount of benefits that would currently be payable to an alternate payee pursuant to a domestic relations order under review by the system, or a domestic relations order submitted to the system that failed to qualify as a plan approved domestic relations order, if the domestic relations order were determined to be a plan approved domestic relations order.

45. "Service" means the last period of continuous employment of an employee by the employers before the employee's retirement, except that if such period includes employment during which the employee would not have qualified as a member had the system then been effective, such as employment as a volunteer firefighter, then only twenty‑five percent of such noncovered employment shall be considered as service. Any absence that is authorized by an employer shall not be considered as interrupting continuity of employment if the employee returns within the period of authorized absence. Transfers between employers also shall not be considered as interrupting continuity of employment. Any period during which a member is receiving sick leave payments or a temporary disability pension shall be considered as service. Notwithstanding any other provision of this paragraph, any period during which a person was employed as a full‑time paid firefighter for a corporation that contracted with an employer to provide firefighting services on behalf of the employer shall be considered as service if the employer has elected at its option to treat part or all of the period the firefighter worked for the company as service in its applicable joinder agreement. Any reference in this system to the number of years of service of an employee shall be deemed to include fractional portions of a year.

46. "State" means the state of Arizona, including any department, office, board, commission, agency or other instrumentality of the state.

47. "System" means the public safety personnel retirement system established by this article.

48. "Temporary disability" means a physical or mental condition that the local board finds totally and temporarily prevents an employee from performing a reasonable range of duties within the employee's department and that was incurred in the performance of the employee's duty. END_STATUTE

Sec. 20. Section 38-847, Arizona Revised Statutes, is amended to read:

START_STATUTE38-847. Local boards

A. The administration of the system and responsibility for making the provisions of the system effective for each employer are vested in a local board. The department of public safety, the Arizona game and fish department, the department of emergency and military affairs, the university of Arizona, Arizona state university, northern Arizona university, each county sheriff's office, each county attorney's office, each county parks department, each municipal fire department, each eligible fire district, each community college district, each municipal police department, the department of law, the department of liquor licenses and control, the Arizona department of agriculture, the Arizona state parks board director, each Indian reservation police agency and each Indian reservation firefighting agency shall have a local board. A nonprofit corporation operating pursuant to sections 28‑8423 and 28‑8424 shall have one local board for all of its members. Each local board shall be constituted as follows:

1. For political subdivisions or Indian tribes, the mayor or chief elected official or a designee of the mayor or chief elected official approved by the respective governing body as chairman, two members elected by secret ballot by members employed by the appropriate employer and two citizens, one of whom shall be the head of the merit system, or the head's designee from among the other members of the merit system, if it exists for the group of members, appointed by the mayor or chief elected official and with the approval of the governing body of the city or the governing body of the employer. The appointed two citizens shall serve on both local boards in a city or Indian tribes where both fire and police department employees are members.

2. For state agencies and nonprofit corporations operating pursuant to sections 28‑8423 and 28‑8424, two members elected by secret ballot by the members employed by the appropriate employer and three citizens appointed by the governor. Each state agency local board shall elect a chairman.

3. For fire districts, the chairperson of the fire district governing board or the chairperson's designee, two members elected by secret ballot by members employed by the fire district and two citizens appointed by the chairperson of the fire district governing board, one of whom is a resident of the fire district and one of whom has experience in personnel administration but who is not required to be a resident of the fire district.

4. For joint powers authorities organized pursuant to section 48‑805.01, the joint powers authority board chairman or a designee approved by the governing body, two members elected by secret ballot by members employed by the joint powers authority and two citizens, one of whom is a resident of one of the partner entities and one of whom has experience in personnel administration but who is not required to be a resident of a partner entity.

B. On the taking effect of this system for an employer, the appointments and elections of local board members shall take place with one elective and appointive local board member serving a term ending two years after the effective date of participation for the employer and other local board members serving a term ending four years after the effective date. Thereafter, every second year, and as a vacancy occurs, an office shall be filled for a term of four years in the same manner as previously provided.

C. Each local board shall be fully constituted pursuant to subsection A of this section within sixty days after the employer's effective date of participation in the system. If the deadline is not met, on the written request of any member who is covered by the local board or the employer to the board of trustees, the board of trustees may appoint all vacancies of the local board pursuant to subsection A of this section and designate whether each appointive position is for a two year or four year term. If the board of trustees cannot find individuals to serve on the local board who meet the requirements of subsection A of this section, the board of trustees may appoint individuals to serve as interim local board members until qualified individuals are appointed or elected. Each local board shall meet at least twice a year. Each member of a local board, within ten days after the member's appointment or election, shall take an oath of office that, so far as it devolves on the member, the member shall diligently and honestly administer the affairs of the local board and that the member shall not knowingly violate or willingly permit to be violated any of the provisions of law applicable to the system.

D. Except as limited by subsection E of this section, a local board shall have such powers as may be necessary to discharge the following duties:

1. To decide all questions of eligibility for membership, service credits and benefits and determine the amount, manner and time of payment of any benefits under the system.

2. To prescribe procedures to be followed by claimants in filing applications for benefits.

3. To make a determination as to the right of any claimant to a benefit and to afford any claimant or the board of trustees, or both, a right to a rehearing on the original determination. Except as otherwise required by law, unless all parties involved in a matter presented to the local board for determination otherwise agree, the local board shall commence a hearing on the matter within ninety days after the date the matter is presented to the local board for determination. If a local board fails to commence a hearing as provided in this paragraph, on a matter presented to the local board for determination, the relief demanded by the party petitioning the local board is deemed granted and approved by the local board. The granting and approval of this relief is considered final and binding unless a timely request for rehearing or appeal is made as provided in this article, unless the board of trustees determines that granting the relief requested would violate the internal revenue code or threaten to impair the system's status as a qualified plan under the internal revenue code. If the board of trustees determines that granting the requested relief would violate the internal revenue code or threaten to impair the system's status as a qualified plan, the board of trustees may refuse to grant the relief by issuing a written determination to the local board and the party petitioning the local board for relief. The decision by the board of trustees is subject to judicial review pursuant to title 12, chapter 7, article 6.

4. To request and receive from the employers and from members such information as is necessary for the proper administration of the system and action on claims for eligibility for membership and benefits, and to forward such information to the board of trustees.

5. To distribute, in such manner as the local board determines to be appropriate, information explaining the system received from the board of trustees.

6. To furnish the employer, the board of trustees and the legislature, on request, with such annual reports with respect to the administration of the system as are reasonable and appropriate.

7. To receive and review the actuarial valuation of the system for its group of members.

8. To receive and review reports of the financial condition and of the receipts and disbursements of the fund from the board of trustees.

9. To appoint medical boards as provided in section 38‑859.

10. To sue and be sued to effectuate the duties and responsibilities set forth in this article.

E. A local board shall have no power to add to, subtract from, modify or waive any of the terms of the system, change or add to any benefits provided by the system or waive or fail to apply any requirement of eligibility for membership or benefits under the system. Notwithstanding any limitations periods imposed in this article, including subsection D, paragraph 3 and subsections G and H of this section, if the board of trustees determines a local board decision violates the internal revenue code or threatens to impair the system's status as a qualified plan under the internal revenue code, the local board's decision is not final and binding and the board of trustees may refrain from implementing or complying with the local board decision.

F. A local board, from time to time, shall establish and adopt such rules as it deems necessary or desirable for its administration. All rules and decisions of a local board shall be uniformly and consistently applied to all members in similar circumstances. If a claim or dispute is presented to a local board for determination but the local board has not yet adopted uniform rules of procedure for adjudication of the claim or dispute, the local board shall adopt and use the model uniform rules of local board procedure that are issued by the board of trustees' fiduciary counsel to adjudicate the claim or dispute.

G. Except as otherwise provided in this article, any action by a majority vote of the members of a local board that is not inconsistent with the provisions of the system and the internal revenue code shall be final, conclusive and binding on all persons affected by it unless a timely application for a rehearing or appeal is filed as provided in this article. No later than twenty days after taking action, the local board shall submit to the board of trustees the minutes from the local board meeting that include the name of the member affected by its decision, a description of the action taken and an explanation of the reasons and all documents submitted to the local board for the action taken, including the reports of a medical board. The board of trustees may not implement and comply with any local board action that does not comply with the internal revenue code or that threatens to jeopardize the system's status as a qualified plan under the internal revenue code.

H. A claimant or the board of trustees may apply for a rehearing before the local board within the time periods prescribed in this subsection, except that if a decision of a local board violates the internal revenue code or threatens to jeopardize the system's status as a qualified plan under the internal revenue code, no limitation period for the board of trustees to seek a rehearing of a local board decision applies. An application for a rehearing shall be filed in writing with a member of the local board or its secretary within sixty days after:

1. The applicant‑claimant receives notification of the local board's original action by certified mail, by attending the meeting at which the action is taken or by receiving benefits from the system pursuant to the local board's original action, whichever occurs first.

2. The applicant-board of trustees receives notification of the local board's original action as prescribed by subsection G of this section by certified mail.

I. A hearing before a local board on a matter remanded from the superior court is not subject to a rehearing before the local board.

J. Decisions of local boards are subject to judicial review pursuant to title 12, chapter 7, article 6.

K. When making a ruling, determination or calculation, the local board shall be entitled to rely on information furnished by the employer, a medical board, the board of trustees, independent legal counsel or the actuary for the system.

L. Each member of a local board is entitled to one vote. A majority is necessary for a decision by the members of a local board at any meeting of the local board.

M. The local board shall adopt such bylaws as it deems desirable. The local board shall elect a secretary who may, but need not, be a member of the local board. The secretary of the local board shall keep a record and prepare minutes of all meetings in compliance with chapter 3, article 3.1 of this title and forward the minutes and all necessary communications to the board of trustees as prescribed by subsection G of this section.

N. The fees of the medical board and of the local board's independent legal counsel and all other expenses of the local board necessary for the administration of the system shall be paid by the employer and not the board of trustees or system at such rates and in such amounts as the local board shall approve. Legal counsel that is employed by the local board is independent of the employer and any employee organization or member and owes its duty of loyalty only to the local board in connection with its representation of the local board.

O. The local board shall issue directions to the board of trustees concerning all benefits that are to be paid from the employer's account pursuant to the provisions of the fund. The local board shall keep on file, in such manner as it may deem convenient or proper, all reports from the board of trustees and the actuary.

P. The local board and the individual members of the local board shall be indemnified from the assets of the employer for any judgment against the local board or its members, including attorney fees and costs, arising from any act, or failure to act, made in good faith pursuant to the provisions of the system, including expenses reasonably incurred in the defense of any claim relating to the act or failure to act. END_STATUTE

Sec. 21. Section 38-848, Arizona Revised Statutes, is amended to read:

START_STATUTE38-848. Board of trustees; powers and duties; independent trust fund; administrator; agents and employees; advisory committee

A. Beginning January 1, 2017, the board of trustees shall consist of nine members and shall have the rights, powers and duties that are set forth in this section. The term of office of members shall be five years to expire on the third Monday in January of the appropriate year. The board shall select a chairperson from among its members each calendar year. Members are eligible to receive compensation in an amount of fifty dollars a day, but not to exceed one thousand dollars in any one fiscal year, and are eligible for reimbursement of expenses pursuant to chapter 4, article 2 of this title. Beginning January 1, 2017, the board consists of the following members appointed as follows:

1. Two members representing law enforcement, one of whom is appointed by the president of the senate and one of whom is appointed by the governor. A statewide association representing law enforcement in this state shall forward nominations to the appointing elected officials, providing at least three nominees for each position. At least one of the members appointed under this paragraph shall be an elected local board member.

2. Two members representing firefighters, one of whom is appointed by the speaker of the house of representatives and one of whom is appointed by the governor. A statewide association representing firefighters in this state shall forward nominations to the appointing elected officials, providing at least three nominees for each position. At least one of the members appointed under this paragraph shall be an elected local board member.

3. Three members representing cities and towns in this state, one of whom is appointed by the president of the senate, one of whom is appointed by the speaker of the house of representatives and one of whom is appointed by the governor. An association representing cities and towns in this state shall forward nominations to the appointing elected officials, providing at least three nominees for each position. These nominees shall represent taxpayers or employers and may not be members of the system.

4. One member who represents counties in this state and who is appointed by the governor. An association representing county supervisors in this state shall forward nominations to the governor, providing at least three nominees for the position. These nominees shall represent taxpayers or employers and may not be members of the system.

5. One member who is appointed by the governor from a list of three nominees forwarded by the board. The board shall select the nominees to forward to the governor from a list of at least five nominees received from the advisory committee.

B. each appointment made pursuant to subsection A of this section shall be chosen from the list of nominees provided to the appointing elected official. A board member may be reappointed. Notwithstanding section 38‑295, a board member may be removed from office only for cause by the appointing power or because the board member has vacated the member's seat on the board. A board member who is removed for cause shall be provided written notice and an opportunity for a response. The appointing power may remove a board member based on written findings that specify the reason for removal. Any vacancy that occurs other than by expiration of a term shall be filled for the balance of the term. All vacancies shall be filled in the same manner as the initial appointment. A board member vacates the office if the member either:

1. Is absent without excuse from three consecutive regular meetings of the board.

2. Resigns, dies or becomes unable to perform board member duties.

C. The members of the board who are appointed pursuant to subsection A of this section and who are not members of the system shall be independent, qualified professionals who are responsible for the performance of fiduciary duties and other responsibilities required to preserve and protect the fund and shall have at least ten years' substantial experience as any one or a combination of the following:

1. A portfolio manager acting in a fiduciary capacity.

2. A securities analyst.

3. A senior executive or principal of a trust institution, investment organization or endowment fund acting either in a management or an investment‑related capacity.

4. A chartered financial analyst in good standing as determined by the chartered financial analyst institute.

5. A current or former professor or instructor at the college or university level in the field of economics, finance, actuarial science, accounting or pension‑related subjects.

6. An economist.

7. Any other senior executive engaged in the field of public or private finances or with experience with public pension systems.

8. A senior executive in insurance, banking, underwriting, auditing, human resources or risk management.

D. All monies in the fund shall be deposited and held in a public safety personnel retirement system depository. Monies in the fund shall be disbursed from the depository separate and apart from all monies or funds of this state and the agencies, instrumentalities and subdivisions of this state, except that the board may commingle the assets of the fund and the assets of all other plans entrusted to its management in one or more group trusts, subject to the crediting of receipts and earnings and charging of payments to the appropriate employer, system or plan. The monies shall be secured by the depository in which they are deposited and held to the same extent and in the same manner as required by the general depository law of this state. For purposes of making the decision to invest in securities owned by the fund or any plan or trust administered by the board, the fund and assets of the plans and the plans' trusts are subject to the sole management of the board for the purpose of this article except that, on the board's election to invest in a particular security or make a particular investment, the assets comprising the security or investment may be chosen and managed by third parties approved by the board. The board may invest in portfolios of securities chosen and managed by a third party. The board's decision to invest in securities such as mutual funds, commingled investment funds, exchange traded funds, private equity or venture capital limited partnerships, real estate limited partnerships or limited liability companies and real estate investment trusts whose assets are chosen and managed by third parties does not constitute an improper delegation of the board's investment authority.

E. All contributions under this system and other retirement plans that the board administers shall be forwarded to the board and shall be held, invested and reinvested by the board as provided in this article. All property and monies of the fund and other retirement plans that the board administers, including income from investments and from all other sources, shall be retained for the exclusive benefit of members, as provided in the system and other retirement plans that the board administers, and shall be used to pay benefits to members or their beneficiaries or to pay expenses of operation and administration of the system and fund and other retirement plans that the board administers.

F. The board shall have the full power in its sole discretion to invest and reinvest, alter and change the monies accumulated under the system and other retirement plans and trusts that the board administers as provided in this article. In addition to its power to make investments managed by others, the board may delegate the authority the board deems necessary and prudent to investment management pursuant to section 38‑848.03, as well as to the administrator, employed by the board pursuant to subsection M, paragraph 6 of this section, and any assistant administrators to invest the monies of the system and other retirement plans and trusts that the board administers if the administrator, investment management and any assistant administrators follow the investment policies that are adopted by the board. The board may commingle securities and monies of the fund, the elected officials' retirement plan, the corrections officer retirement plan and other plans or monies entrusted to its care, subject to the crediting of receipts and earnings and charging of payments to the account of the appropriate employer, system or plan. In making every investment, the board shall exercise the judgment and care under the circumstances then prevailing that persons of ordinary prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income from their funds as well as the probable safety of their capital, provided:

1. That not more than eighty percent of the combined assets of the system or other plans that the board manages shall be invested at any given time in corporate stocks, based on cost value of such stocks irrespective of capital appreciation.

2. That no not more than five percent of the combined assets of the system or other plans that the board manages shall be invested in corporate stock issued by any one corporation, other than corporate stock issued by corporations chartered by the United States government or corporate stock issued by a bank or insurance company.

3. That not more than five percent of the voting stock of any one corporation shall be owned by the system and other plans that the board administers, except that this limitation does not apply to membership interests in limited liability companies.

4. That corporate stocks and exchange traded funds eligible for direct purchase shall be restricted to stocks and exchange traded funds that, except for bank stocks, insurance stocks, stocks acquired for coinvestment in connection with the system's or the plans' or trusts' commingled investments and interests in limited liability companies and mutual funds, are either:

(a) Listed or approved on issuance for listing on an exchange registered under the securities exchange act of 1934, as amended (15 United States Code sections 78a through 78pp).

(b) Designated or approved on notice of issuance for designation on the national market system of a national securities association registered under the securities exchange act of 1934, as amended (15 United States Code sections 78a through 78pp).

(c) Listed or approved on issuance for listing on an exchange registered under the laws of this state or any other state.

(d) Listed or approved on issuance for listing on an exchange of a foreign country with which the United States is maintaining diplomatic relations at the time of purchase, except that no not more than twenty percent of the combined assets of the system and other plans that the board manages shall be invested in foreign securities, based on the cost value of the stocks irrespective of capital appreciation.

(e) An exchange traded fund that is recommended by the chief investment officer of the system, that is registered under the investment company act of 1940 (15 United States Code sections 80a-1 through 80a‑64) and that is both traded on a public exchange and based on a publicly recognized index.

G. Notwithstanding any other law, the board shall not be required to invest in any type of investment that is dictated or required by any entity of the federal government and that is intended to fund economic development projects, public works or social programs, but may consider such economically targeted investments pursuant to its fiduciary responsibility. The board, on behalf of the system and all other plans or trusts the board administers, may invest in, lend monies to or guarantee the repayment of monies by a limited liability company, limited partnership, joint venture, partnership, limited liability partnership or trust in which the system and plans or trusts have a financial interest, whether the entity is closely held or publicly traded and that, in turn, may be engaged in any lawful activity, including venture capital, private equity, the ownership, development, management, improvement or operation of real property and any improvements or businesses on real property or the lending of monies.

H. Conference call meetings of the board that are held for investment purposes only are not subject to chapter 3, article 3.1 of this title, except that the board shall maintain minutes of these conference call meetings and make them available for public inspection within twenty‑four hours after the meeting. The board shall review the minutes of each conference call meeting and shall ratify all legal actions taken during each conference call meeting at the next scheduled meeting of the board.

I. The board shall not be held liable for the exercise of more than ordinary care and prudence in the selection of investments and performance of its duties under the system and shall not be limited to so‑called "legal investments for trustees", but all monies of the system and other plans that the board administers shall be invested subject to all of the conditions, limitations and restrictions imposed by law.

J. Except as provided in subsection F of this section, the board may:

1. Invest and reinvest the principal and income of all assets that the board manages without distinction between principal and income.

2. Sell, exchange, convey, transfer or otherwise dispose of any investments made on behalf of the system or other plans the board administers in the name of the system or plans by private contract or at public auction.

3. Also:

(a) Vote on any stocks, bonds or other securities.

(b) Give general or special proxies or powers of attorney with or without power of substitution.

(c) Exercise any conversion privileges, subscription rights or other options and make any payments incidental to the exercise of the conversion privileges, subscription rights or other options.

(d) Consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities, delegate discretionary powers and pay any assessments or charges in connection therewith.

(e) Generally exercise any of the powers of an owner with respect to stocks, bonds, securities or other investments held in or owned by the system or other plans whose assets the board administers.

4. Make, execute, acknowledge and deliver any other instruments that may be necessary or appropriate to carry out the powers granted in this section.

5. Register any investment held by the system or other plans whose assets the board administers in the name of the system or plan or in the name of a nominee or trust.

6. At the expense of the system or other plans that the board administers, enter into an agreement with any bank or banks for the safekeeping and handling of securities and other investments coming into the possession of the board. The agreement shall be entered into under terms and conditions that secure the proper safeguarding, inventory, withdrawal and handling of the securities and other investments. No access to and no deposit or withdrawal of the securities from any place of deposit selected by the board shall be permitted or made except as the terms of the agreement may provide.

7. Appear before local boards and the courts of this state and political subdivisions of this state through counsel or appointed representative to protect the fund or the assets of other plans that the board administers. The board is not responsible for the actions or omissions of the local boards under this system but may seek a review or rehearing of actions or omissions of local boards. The board does not have a duty to review actions of the local boards but may do so in its discretion in order to protect the fund. No limitations period precludes the board or administrator from contesting, or requires the board or administrator to implement or comply with, a local board decision that violates the internal revenue code or that threatens to impair the tax qualified status of the system or any plan administered by the board or administrator.

8. Empower the fund administrator to take actions on behalf of the board that are necessary for the protection and administration of the fund or the assets of other plans that the board administers pursuant to the guidelines of the board.

9. Do all acts, whether or not expressly authorized, that may be deemed necessary or proper for the protection of the investments held in the fund or owned by other plans or trusts that the board administers.

10. Settle threatened or actual litigation against any system or plan that the board administers.

K. Investment expenses and operation and administrative expenses of the board shall be accounted for separately and allocated against investment income.

L. The board, as soon as possible within a period of six months following the close of any fiscal year, shall transmit to the governor and the legislature a comprehensive annual financial report on the operation of the system and other plans that the board administers containing, among other things:

1. A balance sheet.

2. A statement of income and expenditures for the year.

3. A report on an actuarial valuation of its assets and liabilities.

4. A list of investments owned.

5. The total rate of return, yield on cost, and percent of cost to market value of the fund and the assets of other plans that the board administers.

6. Any other statistical and financial data that may be necessary for the proper understanding of the financial condition of the system and other plans that the board administers and the results of their operations. A synopsis of the annual report shall be published for the information of members of the system, the elected officials' retirement plan or the corrections officer retirement plan.

7. An analysis of the long‑term level percent of employer contributions and compensation structure and whether the funding methodology is sufficient to pay one hundred percent of the unfunded accrued liability under the elected officials' retirement plan.

8. An estimate of the aggregate employer contribution rate for the public safety personnel retirement system for the next ten fiscal years and an estimate of the aggregate employer contribution rate for the corrections officer retirement plan for the next ten fiscal years.

9. An estimate of the employer contribution rates for the next ten fiscal years for each of the following employers within the public safety personnel retirement system:

(a) Department of liquor licenses and control.

(b) Department of public safety.

(d) University of Arizona.

(e) Arizona state university.

(f) Arizona game and fish department.

(g) Department of law.

(h) Department of emergency and military affairs.

(i) Arizona state parks board director.

10. An estimate of the employer contribution rates for the next ten fiscal years for each of the following employers within the corrections officer retirement plan:

(a) State department of corrections.

(b) Department of public safety.

(d) Department of juvenile corrections.

11. An estimate of the aggregate fees paid for private equity investments, including management fees and performance fees.

M. The board shall:

1. Maintain the accounts of the system and other plans that the board administers and issue statements to each employer annually and to each member who may request it.

2. Report the results of the actuarial valuations to the local boards and employers.

3. Contract on a fee basis with an independent investment counsel to advise the board in the investment management of the fund and assets of other plans that the board administers and with an independent auditing firm to audit the board's accounting.

4. Permit the auditor general to make an annual audit and transmit the results to the governor and the legislature.

5. Contract on a fee basis with an actuary who shall make actuarial valuations of the system and other plans that the board administers, be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of the system, the elected officials' retirement plan, the corrections officer retirement plan and the public safety cancer insurance policy program and perform other duties required in connection therewith. The actuary must be a member of a nationally recognized association or society of actuaries.

6. Employ, as administrator, a person, state department or other body to serve at the pleasure of the board.

7. Establish procedures and guidelines for contracts with actuaries, auditors, investment counsel and legal counsel and for safeguarding of securities.

N. The administrator, under the direction of the board, shall:

1. Administer this article.

2. Be responsible for the recruitment, hiring and day‑to‑day management of employees.

3. Invest the monies of the system and other plans that the board administers as the board deems necessary and prudent as provided in subsections F and J of this section and subject to the investment policies and fund objectives adopted by the board.

4. Establish and maintain an adequate system of accounts and records for the system and other plans that the board administers, which shall be integrated with the accounts, records and procedures of the employers so that the system and other plans that the board administers operates most effectively and at minimum expense and that duplication of records and accounts is avoided.

5. In accordance with the board's governance policy and procedures and the budget adopted by the board, hire such employees and services the administrator deems necessary and prescribe their duties, including the hiring of one or more assistant administrators to manage the system's operations, investments and legal affairs.

6. Be responsible for income, the collection of the income and the accuracy of all expenditures.

7. Recommend to the board annual contracts for the system's actuary, auditor, investment counsel, legal counsel and safeguarding of securities.

8. Perform additional duties and powers prescribed by the board and delegated to the administrator.

O. The system is an independent trust fund and the board is not subject to title 41, chapter 6. Contracts for goods and services approved by the board are not subject to title 41, chapter 23. As an independent trust fund whose assets are separate and apart from all other monies funds of this state, the system and the board are not subject to the restrictions prescribed in section 35‑154 or article IX, sections 5 and 8, Constitution of Arizona. Loans, guarantees, investment management agreements and investment contracts that are entered into by the board are contracts memorializing obligations or interests in securities that the board has concluded, after thorough due diligence, do not involve investments in Sudan or Iran or otherwise provide support to terrorists or in any way facilitate illegal immigration into the United States. These contracts do not involve the procurement, supply or provision of goods, equipment, labor, materials or services that would require the warranties required by section 41‑4401.

P. The board, the administrator, the assistant administrators and all persons employed by them are subject to title 41, chapter 4, article 4. The administrator, assistant administrators and other employees of the board are entitled to receive compensation pursuant to section 38‑611.

Q. In consultation with the director of the department of administration, the board may enter into employment agreements and establish the terms of those agreements with persons holding any of the following system positions:

1. Administrator.

2. Deputy or assistant administrator.

3. Chief investment officer.

4. Deputy chief investment officer.

5. Fiduciary or investment counsel.

R. The attorney general or an attorney approved by the attorney general and paid by the fund shall be the attorney for the board and shall represent the board in any legal proceeding or forum that the board deems appropriate. The board, administrator, assistant administrators and employees of the board are not personally liable for any acts done in their official capacity in good faith reliance on the written opinions of the board's attorney.

S. At least once in each five‑year period after the effective date, the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the system and other plans that the board administers and shall make a special valuation of the assets and liabilities of the monies of the system and plans. Taking into account the results of the investigation and special valuation, the board shall adopt for the system and other plans that the board administers those mortality, service and other tables deemed necessary.

T. On the basis of the tables the board adopts, the actuary shall make a valuation of the assets and liabilities of the funds of the system and other plans that the board administers not less frequently than every year. By November 1 of each year the board shall provide a preliminary report and by December 15 of each year provide a final report to the governor, the speaker of the house of representatives and the president of the senate on the contribution rate for the ensuing fiscal year.

U. Neither the board nor any member or employee of the board shall directly or indirectly, for himself or as an agent, in any manner use the monies or deposits of the fund except to make current and necessary payments, nor shall the board or any member or employee become an endorser or surety or in any manner an obligor for monies loaned by or borrowed from the fund or the assets of any other plans that the board administers.

V. Financial or commercial information that is provided to the board, employees of the board and attorneys of the board in connection with investments in which the board has invested or investments the board has considered for investment is confidential, proprietary and not a public record if the information is information that would customarily not be released to the public by the person or entity from whom the information was obtained.

W. A person who is a dealer as defined in section 44‑1801 and who is involved in securities or investments related to the board's investments is not eligible to serve on the board.

X. Beginning January 1, 2017, the public safety personnel retirement system advisory committee is established and shall serve as a liaison between the board and the members and employers of the system. The committee shall be appointed by the chairperson of the board from names submitted to the chairperson by associations representing law enforcement, firefighters, state government, counties, cities and towns and tribal governments. The committee shall select a chairperson from among its members each calendar year. The committee shall consist of the following ten members:

1. A member who is a law enforcement officer.

2. A member who is a firefighter.

3. A member of the elected officials' retirement plan.

4. A member of the corrections officer retirement plan.

5. A retiree from the public safety personnel retirement system.

6. A representative from a city or town in this state.

7. A representative from a county in this state.

8. A representative from a fire district in this state.

9. A representative from a state employer.

10. A representative from a tribal government located in this state. END_STATUTE

Sec. 22. Section 39-125, Arizona Revised Statutes, is amended to read:

START_STATUTE39-125. Information relating to location of archaeological discoveries and places or objects included or eligible for inclusion on the Arizona register of historic places; confidentiality

Nothing in this chapter requires the disclosure of public records or other matters in the office of any officer that relate to the location of archaeological discoveries as described in section 41‑841 or 41‑844 or places or objects that are included on or may qualify for inclusion on the Arizona register of historic places as described in section 41‑511.04 41‑5603, subsection A, paragraph 9. An officer may decline to release this information if the officer determines that the release of the information creates a reasonable risk of vandalism, theft or other damage to the archaeological discoveries or the places or objects that are included on or may qualify for inclusion on the register. In making a decision to disclose public records pursuant to this section, an officer may consult with the director of the Arizona state museum or the state historic preservation officer.END_STATUTE

Sec. 23. Repeal

Section 41-151.02, Arizona Revised Statutes, is repealed.

Sec. 24. Section 41-151.20, Arizona Revised Statutes, is amended to read:

START_STATUTE41-151.20. Historical advisory commission; membership; terms; expenses; duties; historic sites review committee

A. A The historical advisory commission is established consisting of members appointed by the director for staggered terms of three years ending on July 1. The commission membership of not less than ten nor more than twenty‑five members shall consist of experts in the disciplines of history, arts and culture, architecture and archaeology, professional librarians and archivists or persons otherwise associated with the interpretation, research, writing, preservation or teaching of this state's heritage, including the Indian nations' history and heritage, and the director of the Arizona historical society, the director of the state museum, the director of the Arizona state parks board, the director of the office of tourism or the director's designee, the superintendent of public instruction or the superintendent's designee and the state historic preservation officer.

B. Members shall serve without compensation but those employed by the state shall be reimbursed for travel and subsistence by the department or agency they represent and those who are not employed by the state are eligible for reimbursement of expenses by the commission pursuant to title 38, chapter 4, article 2.

C. The commission shall:

1. Advise the legislature and state agencies on matters relating to this state's history and historic preservation.

2. Recommend measures to the legislature and state agencies to coordinate or improve the effectiveness of activities of state agencies and agencies of the political subdivisions of this state and other persons relating to the interpretation, research, writing and teaching of this state's history, heritage and historic preservation, including the Indian nations' history, heritage and preservation.

3. Advise the legislature and state agencies on the dissemination of information pertaining to activities relating to historic preservation as provided in paragraph 2 of this subsection.

4. Encourage, in cooperation with appropriate public and private agencies, the Indian nations and other persons, training and education in the field of the interpretation, research, writing and teaching of this state's history, heritage and historic preservation.

5. Assist in the establishment of the Arizona register of heritage agriculture as provided in section 3‑162.

6. Submit annually on September 30 a report of the commission's activities to the director for inclusion in the annual report of the state library.

D. A historic sites review committee consisting of nine members is established to serve as a standing committee of the historical advisory commission. The state historic preservation officer shall appoint committee members for staggered terms of three years ending on July 1. The state historic preservation officer may appoint persons other than commission members to serve on the committee and shall appoint at least five persons who are professionals qualified in the disciplines of history, prehistoric and historic archaeology, architectural history or architecture. The committee shall select annually at the first meeting a chairman who is a commission member. The chairman shall report on committee activities at commission meetings. The committee shall assist in the duties prescribed in this section and by federal law, review nominations to the national and state historic registers, provide general advice and guidance to the state historic preservation officer and perform other duties as are necessary. On or before September 1 of each year, the state historic preservation officer shall submit a report of the committee's activities to the governor, the president of the senate, the speaker of the house of representatives and the director, including information prescribed in sections 41‑862 and 41‑881, and provide a copy of this report to the secretary of state. END_STATUTE

Sec. 25. Heading repeal

The article heading of title 41, chapter 3, article 1.1, Arizona Revised Statutes, is repealed.

Sec. 26. Repeal

Sections 41-511, 41-511.01 and 41‑511.14, Arizona Revised Statutes, are repealed.

Sec. 27. Transfer and renumber

Title 41, chapter 3, article 1.1, Arizona Revised Statutes, is transferred and renumbered for placement in title 41, chapter 55, article 1, Arizona Revised Statutes, as added by this act. The following sections are transferred and renumbered for placement in title 41, chapter 55, article 1:

Former Sections New Sections

41‑511.02............................... 41‑5601

41‑511.03............................... 41‑5602

41‑511.04............................... 41‑5603

41‑511.05............................... 41‑5604

41‑511.06............................... 41‑5605

41‑511.07............................... 41‑5606

41‑511.08............................... 41‑5607

41‑511.09............................... 41‑5608

41‑511.10............................... 41‑5609

41‑511.11............................... 41‑5610

41‑511.12............................... 41‑5611

41‑511.13............................... 41‑5612

41‑511.15............................... 41‑5613

41‑511.16............................... 41‑5614

41‑511.17............................... 41‑5615

41‑511.18............................... 41‑5616

41‑511.19............................... 41‑5617

41‑511.20............................... 41‑5618

41‑511.21............................... 41‑5619

41‑511.22............................... 41‑5620

41‑511.23............................... 41‑5621

Sec. 28. Section 41-511.25, Arizona Revised Statutes, is amended to read:

START_STATUTE41-511.25. Arizona outdoor recreation coordinating commission; members; powers and duties

A. The Arizona outdoor recreation coordinating commission is established. The commission shall be composed of seven members consisting of the director of the Arizona game and fish department, the director of the Arizona state parks board and five members appointed by the governor. The ex officio members may not serve as officers of the commission. Of the members appointed by the governor three shall be professional full‑time parks and recreation department directors of a county, city, or town and no two shall reside in the same county. Two members appointed by the governor shall be from the general public and each shall have broad experience in outdoor recreation. Of the five appointed members, no more than two shall reside in the same county. Each appointed member shall be appointed for a term of three years. Appointed members shall be reimbursed for expenses incurred while attending meetings called by the commission as prescribed by section 38‑624.

B. The commission shall:

1. Review statewide outdoor recreation and lake improvement plans and provide comments to the Arizona state parks board director.

2. Review budget proposals for the use of land and water conservation fund surcharges and the state lake improvement fund for planning and administration and provide recommendations to the Arizona state parks board director.

3. Establish criteria and policies for the equitable distribution of funding, review applications for eligible projects and determine the amount of funding, if any, for each project to be funded from the land and water conservation fund, the state lake improvement fund and the off‑highway vehicle recreation fund. END_STATUTE

Sec. 29. Section 41-512, Arizona Revised Statutes, is amended to read:

START_STATUTE41-512. Definitions

In this article, unless the context otherwise requires:

1. "Director" means the director of the department of transportation.

2. "Historic road" means a highway, street, road or route that is of historical or cultural importance in the settlement and development of Arizona and is established or designated as a historic road by the transportation board.

3. "Historical society" means the Arizona historical society.

5. 4. "Parkway" means an area along either or both sides of a highway, street, road or route acquired in fee or by easement by the governmental body having jurisdiction over the highway, street, road or route for the protection of geographic, natural flora or scenic values, and established or designated as a parkway by the transportation board.

6. 5. "Scenic road" means a highway, street, road or route through a scenic area that is established or designated as a scenic road by the transportation board.

4. 6. "State parks board" means the Arizona state parks board.

7. "Transportation board" means the transportation board of the department of transportation. END_STATUTE

Sec. 30. Section 41-514, Arizona Revised Statutes, is amended to read:

START_STATUTE41-514. Administration; advisory committee; composition; duties; designation of parkways and historic and scenic roads

A. There is established an The advisory committee to the director is established consisting of eleven members. The directors of the state parks board, the department of transportation, the office of tourism and the historical society shall each appoint to the advisory committee one employee from their respective agencies who serves at the pleasure of the appointing authority. The tourism advisory council shall appoint one of its members to the advisory committee who shall serve at the pleasure of the council. The governor shall appoint, for a term of three years to begin and end on June 30 or until the successor is appointed and qualified, the remaining six members from the public, with no not more than two public members from any one county. The governor may appoint a public member to an additional term.

B. The advisory committee shall:

1. Review requests to establish or designate a highway or area as a parkway or historic or scenic road.

2. Prepare recommendations to the transportation board as to those highways or areas appropriate for establishment or designation as parkways or historic or scenic roads.

3. Review established or designated parkways or historic or scenic roads and recommend to the transportation board their continuation or deletion as parkways or historic or scenic roads.

C. Any agency, group or individual may submit requests for consideration by the advisory committee for the establishment or designation of a highway or area as a parkway or historic or scenic road.

D. Upon On recommendation from the advisory committee, the transportation board may designate or establish a parkway or historic or scenic road or delete a previous designation or establishment.

E. If the parkway or historic or scenic road to be established or designated is not a state highway or route, the establishment or designation is not effective unless the board or body exercising jurisdiction over such road agrees to such establishment or designation.

F. Access roads intersecting parkways shall be spaced no closer than one mile apart, except where a county, state or federal highway or city street intersects the parkway. No public agency may approve a subdivision bordering a parkway unless either:

1. The subdivision plat provides internal access to the one mile access roads across the parkway and would accommodate access to such access roads from unsubdivided adjoining lands.

2. The subdivision plat provides access to the general systems of public roads and streets by some means other than through or across the property devoted to parkway purposes.

G. Access roads across parkways which that are legally established shall not be closed unless the owner of the land serviced by such access road has agreed to such closure. END_STATUTE

Sec. 31. Section 41-519, Arizona Revised Statutes, is amended to read:

START_STATUTE41-519. Yarnell Hill memorial

A. The Arizona state parks board director shall establish the Yarnell Hill memorial state park subject to the following conditions:

1. The Yarnell Hill memorial site board recommends that the Arizona state parks board director purchase the land for the memorial site.

2. The Arizona state parks board director purchases the Yarnell Hill memorial site pursuant to title 37, chapter 2, article 3.

3. The Yarnell Hill memorial site board approves the design and construction of the memorial.

4. The Yarnell Hill memorial site board secures the necessary permission for individuals to visit the memorial.

B. The Arizona state parks board director may enter into an intergovernmental agreement pursuant to title 11, chapter 7, article 3 with the county in which the park is located for the maintenance and preservation of the Yarnell Hill memorial and access road. END_STATUTE

Sec. 32. Section 41-519.02, Arizona Revised Statutes, is amended to read:

START_STATUTE41-519.02. Yarnell Hill memorial fund; exemption

A. The Yarnell Hill memorial fund is established consisting of legislative appropriations and donations to the fund. The Yarnell Hill memorial site board shall administer the fund. On notice from the Yarnell Hill memorial site board, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund. The monies in the fund are exempt from section 35‑190 relating to lapsing of appropriations. The monies in the fund and any additional donations to the fund must be used for:

1. Purchasing land for the Yarnell Hill memorial.

2. Purchasing, designing and constructing the Yarnell Hill memorial.

3. Maintaining and preserving the Yarnell Hill memorial and access road.

4. Reimbursement of the Yarnell Hill memorial site board members' travel expenses.

B. Beginning on January 1, 2017, the Arizona state parks board director shall administer the fund. END_STATUTE

Sec. 33. Section 41-881, Arizona Revised Statutes, is amended to read:

START_STATUTE41-881. Historic property rehabilitation program; administration; purposes; special projects; state contribution; standards; protective covenant; report

A. A The state historic property rehabilitation program is established to be administered by the Arizona state parks board director through the state historic preservation officer. All decisions relating to the program by the state historic preservation officer are subject to approval by the Arizona state parks board director. The state historic preservation officer may provide for the staff necessary for the operation of the program.

B. Monies from appropriations may be allocated by the state historic preservation officer for special project priorities established annually by the state historic preservation officer.

C. Monies from appropriations for historic property rehabilitation shall be used for the purpose of providing state monies up to an amount equal to the amount of cash, materials and labor from any other source for the rehabilitation of buildings, structures, archaeological sites and objects all or part of which are publicly owned or owned by a nonprofit entity and which are listed in the Arizona or national register of historic places including a property listed individually or as a contributing property within a historic district.

D. The state historic preservation officer shall establish guidelines for application and selection of rehabilitation project sponsors. The state historic preservation officer shall establish annually the amount of cash, materials and labor committed by the sponsor for determination of the amount of the state grant. The rehabilitation work shall meet the United States secretary of the interior's standards for rehabilitating historic properties or other appropriate rehabilitation or archaeological standards as determined by the historical advisory commission. The project sponsor shall sign and record a protective covenant on the property in accordance with terms and for a period of time based on the amount of the state grant as determined by the state historic preservation officer.

E. The state historic preservation officer shall include the activities of the historic property rehabilitation grants program in the report to the governor and legislature required in section 41‑151.20.END_STATUTE

Sec. 34. Section 41-1005, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1005. Exemptions

A. This chapter does not apply to any:

1. Rule that relates to the use of public works, including streets and highways, under the jurisdiction of an agency if the effect of the order is indicated to the public by means of signs or signals.

2. Order or rule of the Arizona game and fish commission that does the following:

(a) Opens, closes or alters seasons or establishes bag or possession limits for wildlife.

(b) Establishes a fee pursuant to section 5‑321, 5‑322 or 5‑327.

3. Rule relating to section 28‑641 or to any rule regulating motor vehicle operation that relates to speed, parking, standing, stopping or passing enacted pursuant to title 28, chapter 3.

4. Rule concerning only the internal management of an agency that does not directly and substantially affect the procedural or substantive rights or duties of any segment of the public.

5. Rule that only establishes specific prices to be charged for particular goods or services sold by an agency.

6. Rule concerning only the physical servicing, maintenance or care of agency owned or operated facilities or property.

7. Rule or substantive policy statement concerning inmates or committed youths of a correctional or detention facility in secure custody or patients admitted to a hospital, if made by the state department of corrections, the department of juvenile corrections, the board of executive clemency or the department of health services or a facility or hospital under the jurisdiction of the state department of corrections, the department of juvenile corrections or the department of health services.

8. Form whose contents or substantive requirements are prescribed by rule or statute, and instructions for the execution or use of the form.

9. Capped fee‑for‑service schedule adopted by the Arizona health care cost containment system administration pursuant to title 36, chapter 29.

10. Fees prescribed by section 6‑125.

11. Order of the director of water resources adopting or modifying a management plan pursuant to title 45, chapter 2, article 9.

12. Fees established under section 3‑1086.

13. Fees established under sections 41‑4010 and 41‑4042.

14. Rule or other matter relating to agency contracts.

15. Fees established under section 32‑2067 or 32‑2132.

16. Rules made pursuant to section 5‑111, subsection A.

17. Rules made by the Arizona state parks board director concerning the operation of the Tonto natural bridge state park, the facilities located in the Tonto natural bridge state park and the entrance fees to the Tonto natural bridge state park.

18. Fees or charges established under section 41‑511.05 41‑5604.

19. Emergency medical services protocols except as provided in section 36‑2205, subsection B.

20. Fee schedules established pursuant to section 36‑3409.

21. Procedures of the state transportation board as prescribed in section 28‑7048.

22. Rules made by the state department of corrections.

23. Fees prescribed pursuant to section 32‑1527.

24. Rules made by the department of economic security pursuant to section 46‑805.

25. Schedule of fees prescribed by section 23‑908.

26. Procedure that is established pursuant to title 23, chapter 6, article 6.

27. Rules, administrative policies, procedures and guidelines adopted for any purpose by the Arizona commerce authority pursuant to chapter 10 of this title if the authority provides, as appropriate under the circumstances, for notice of an opportunity for comment on the proposed rules, administrative policies, procedures and guidelines.

28. Rules made by a marketing commission or marketing committee pursuant to section 3‑414.

29. Administration of public assistance program monies authorized for liabilities that are incurred for disasters declared pursuant to sections 26‑303 and 35‑192.

30. User charges, tolls, fares, rents, advertising and sponsorship charges, services charges or similar charges established pursuant to section 28‑7705.

31. Administration and implementation of the hospital assessment pursuant to section 36-2901.08, except that the Arizona health care cost containment system administration must provide notice and an opportunity for public comment at least thirty days before establishing or implementing the administration of the assessment.

32. Rules made by the Arizona department of agriculture to adopt and implement the provisions of the federal milk ordinance as prescribed by section 3‑605.

B. Notwithstanding subsection A, paragraph 21 of this section, at such time as the federal highway administration authorizes the privatization of rest areas, the state transportation board shall make rules governing the lease or license by the department of transportation to a private entity for the purposes of privatization of a rest area.

C. Coincident with the making of a final rule pursuant to an exemption from the applicability of this chapter under this section, another statute or session law, the agency shall file a copy of the rule with the secretary of state for publication pursuant to section 41‑1012 and provide a copy to the council.

D. Unless otherwise required by law, articles 2, 3, 4 and 5 of this chapter do not apply to the Arizona board of regents and the institutions under its jurisdiction, except that the Arizona board of regents shall make policies or rules for the board and the institutions under its jurisdiction that provide, as appropriate under the circumstances, for notice of and opportunity for comment on the policies or rules proposed.

E. Unless otherwise required by law, articles 2, 3, 4 and 5 of this chapter do not apply to the Arizona state schools for the deaf and the blind, except that the board of directors of all the state schools for the deaf and the blind shall adopt policies for the board and the schools under its jurisdiction that provide, as appropriate under the circumstances, for notice of and opportunity for comment on the policies proposed for adoption.

F. Unless otherwise required by law, articles 2, 3, 4 and 5 of this chapter do not apply to the state board of education, except that the state board of education shall adopt policies or rules for the board and the institutions under its jurisdiction that provide, as appropriate under the circumstances, for notice of and opportunity for comment on the policies or rules proposed for adoption. In order to implement or change any rule, the state board of education shall provide at least two opportunities for public comment. END_STATUTE

Sec. 35. Section 41-1279.03, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1279.03. Powers and duties

A. The auditor general shall:

1. Prepare an audit plan for approval by the committee and report to the committee the results of each audit and investigation and other reviews conducted by the auditor general.

2. Conduct or cause to be conducted at least biennial financial and compliance audits of financial transactions and accounts kept by or for all state agencies subject to the single audit act of 1984 (P.L. 98‑502). The audits shall be conducted in accordance with generally accepted governmental auditing standards and accordingly shall include tests of the accounting records and other auditing procedures as may be considered necessary in the circumstances. The audits shall include the issuance of suitable reports as required by the single audit act of 1984 (P.L. 98‑502) so the legislature, federal government and others will be informed as to the adequacy of financial statements of the state in compliance with generally accepted governmental accounting principles and to determine whether the state has complied with laws and regulations that may have a material effect on the financial statements and on major federal assistance programs.

3. Perform procedural reviews for all state agencies at times determined by the auditor general. These reviews may include evaluation of administrative and accounting internal controls and reports on these reviews.

4. Perform special research requests, special audits and related assignments as designated by the committee and conduct performance audits, special audits, special research requests and investigations of any state agency, whether created by the constitution or otherwise, as may be requested by the committee.

5. Annually on or before the fourth Monday of December, prepare a written report to the governor and to the committee that contains a summary of activities for the previous fiscal year.

6. In the tenth year and in each fifth year thereafter in which a transportation excise tax is in effect in a county as provided in section 42‑6106 or 42‑6107, conduct a performance audit that:

(a) Reviews past expenditures and future planned expenditures of the transportation excise revenues and determines the impact of the expenditures in solving transportation problems within the county and, for a transportation excise tax in effect in a county as provided in section 42‑6107, determines whether the expenditures of the transportation excise revenues comply with section 28‑6392, subsection B.

(b) Reviews projects completed to date and projects to be completed during the remaining years in which a transportation excise tax is in effect. Within six months after each review period the auditor general shall present a report to the speaker of the house of representatives and the president of the senate detailing findings and making recommendations. If the parameters of the performance audit are set by the citizens transportation oversight committee, the auditor general shall also present the report to the citizens transportation oversight committee.

(c) Reviews, determines, reports and makes recommendations to the speaker of the house of representatives and the president of the senate whether the distribution of highway user revenues complies with title 28, chapter 18, article 2. If the parameters of the performance audit are set by the citizens transportation oversight committee, the auditor general shall also present the report to the citizens transportation oversight committee.

7. If requested by the committee, conduct performance audits of counties and incorporated cities and towns receiving highway user revenue fund monies pursuant to title 28, chapter 18, article 2 to determine if the monies are being spent as provided in section 28‑6533, subsection B.

8. Perform special audits designated pursuant to law if the auditor general determines that there are adequate monies appropriated for the auditor general to complete the audit. If the auditor general determines the appropriated monies are inadequate, the auditor general shall notify the committee.

9. Beginning on July 1, 2001, Establish a school‑wide audit team in the office of the auditor general to conduct performance audits and monitor school districts to determine the percentage of every dollar spent in the classroom by a school district. The performance audits shall determine whether school districts that receive monies from the Arizona structured English immersion fund established by section 15‑756.04 and the statewide compensatory instruction fund established by section 15‑756.11 are in compliance with title 15, chapter 7, article 3.1. The auditor general shall determine, through random selection, the school districts to be audited each year, subject to review by the joint legislative audit committee. A school district that is subject to an audit pursuant to this paragraph shall notify the auditor general in writing as to whether the school district agrees or disagrees with the findings and recommendations of the audit and whether the school district will implement the findings and recommendations, implement modifications to the findings and recommendations or refuse to implement the findings and recommendations. The school district shall submit to the auditor general a written status report on the implementation of the audit findings and recommendations every six months for two years after an audit conducted pursuant to this paragraph. The auditor general shall review the school district's progress toward implementing the findings and recommendations of the audit every six months after receipt of the district's status report for two years. The auditor general may review a school district's progress beyond this two‑year period for recommendations that have not yet been implemented by the school district. The auditor general shall provide a status report of these reviews to the joint legislative audit committee. The school district shall participate in any hearing scheduled during this review period by the joint legislative audit committee or by any other legislative committee designated by the joint legislative audit committee.

10. Annually review per diem compensation and reimbursement of expenses for employees of the state and members of a state board, commission, council or advisory committee by judgmentally selecting samples and evaluating the propriety of per diem compensation and expense reimbursements.

B. The auditor general may:

1. Subject to approval by the committee, adopt rules necessary to administer the duties of the office.

2. Hire consultants to conduct the studies required by subsection A, paragraphs 6 and 7 of this section.

C. If approved by the committee the auditor general may charge a reasonable fee for the cost of performing audits or providing accounting services for auditing federal funds, special audits or special services requested by political subdivisions of the state. Monies collected pursuant to this subsection shall be deposited in the audit services revolving fund.

D. The department of transportation, the board of supervisors of a county that has approved a county transportation excise tax as provided in section 42‑6106 or 42‑6107 and the governing bodies of counties, cities and towns receiving highway user revenue fund monies shall cooperate with and provide necessary information to the auditor general or the auditor general's consultant.

E. The department of transportation shall reimburse the auditor general as follows, and the auditor general shall deposit the reimbursed monies in the audit services revolving fund:

1. For the cost of conducting the studies or hiring a consultant to conduct the studies required by subsection A, paragraph 6, subdivisions (a) and (b) of this section, from monies collected pursuant to a county transportation excise tax levied pursuant to section 42‑6106 or 42‑6107.

2. For the cost of conducting the studies or hiring a consultant pursuant to subsection A, paragraph 6, subdivision (c) and paragraph 7 of this section, from the Arizona highway user revenue fund. END_STATUTE

Sec. 36. Repeal

Section 41-2501, Arizona Revised Statutes, as amended by Laws 2016, chapter 341, section 4, is repealed.

Sec. 37. Section 41-2501, Arizona Revised Statutes, as amended by Laws 2016, chapter 214, section 2 and chapter 312, section 7, is amended to read:

START_STATUTE41-2501. Applicability

A. This chapter applies only to procurements initiated after January 1, 1985 unless the parties agree to its application to procurements initiated before that date.

B. This chapter applies to every expenditure of public monies, including federal assistance monies except as otherwise specified in section 41‑2637, by this state, acting through a state governmental unit as defined in this chapter, under any contract, except that this chapter does not apply to either grants as defined in this chapter, or contracts between this state and its political subdivisions or other governments, except as provided in chapter 24 of this title and in article 10 of this chapter. This chapter also applies to the disposal of state materials. This chapter and rules adopted under this chapter do not prevent any state governmental unit or political subdivision from complying with the terms of any grant, gift, bequest or cooperative agreement.

C. All political subdivisions and other local public agencies of this state may adopt all or any part of this chapter and the rules adopted pursuant to this chapter.

D. Notwithstanding any other law, sections 41‑2517 and 41‑2546 apply to any agency as defined in section 41‑1001, including the office of the governor.

E. The Arizona board of regents and the legislative and judicial branches of state government are not subject to this chapter except as prescribed in subsection F of this section.

F. The Arizona board of regents and the judicial branch shall adopt rules prescribing procurement policies and procedures for themselves and institutions under their jurisdiction. The rules must be substantially equivalent to the policies and procedures prescribed in this chapter.

G. The Arizona state lottery commission is exempt from this chapter for procurement relating to the design and operation of the lottery or purchase of lottery equipment, tickets and related materials. The executive director of the Arizona state lottery commission shall adopt rules substantially equivalent to the policies and procedures in this chapter for procurement relating to the design and operation of the lottery or purchase of lottery equipment, tickets or related materials. All other procurement shall be as prescribed by this chapter.

H. The Arizona health care cost containment system administration is exempt from this chapter for provider contracts pursuant to section 36‑2904, subsection A and contracts for goods and services, including program contractor contracts pursuant to title 36, chapter 29, articles 2 and 3 and contracts with regional behavioral health authorities pursuant to title 36, chapter 34. All other procurement, including contracts for the statewide administrator of the program pursuant to section 36‑2903, subsection B, shall be as prescribed by this chapter.

I. Arizona industries for the blind is exempt from this chapter for purchases of finished goods from members of national industries for the blind and for purchases of raw materials for use in the manufacture of products for sale pursuant to section 41‑1972. All other procurement shall be as prescribed by this chapter.

J. I. Arizona correctional industries is exempt from this chapter for purchases of raw materials, components and supplies that are used in the manufacture or production of goods or services for sale entered into pursuant to section 41‑1622. All other procurement shall be as prescribed by this chapter.

K. J. The state transportation board and the director of the department of transportation are exempt from this chapter other than section 41‑2586 for the procurement of construction or reconstruction, including engineering services, of transportation facilities or highway facilities and any other services that are directly related to land titles, appraisals, real property acquisition, relocation, property management or building facility design and construction for highway development and that are required pursuant to title 28, chapter 20.

L. K. The Arizona highways magazine is exempt from this chapter for contracts for the production, promotion, distribution and sale of the magazine and related products and for contracts for sole source creative works entered into pursuant to section 28‑7314, subsection A, paragraph 5. All other procurement shall be as prescribed by this chapter.

M. L. The secretary of state is exempt from this chapter for contracts entered into pursuant to section 41‑1012 to publish and sell the administrative code. All other procurement shall be as prescribed by this chapter.

N. M. This chapter is not applicable to contracts for professional witnesses if the purpose of such contracts is to provide for professional services or testimony relating to an existing or probable judicial proceeding in which this state is or may become a party or to contract for special investigative services for law enforcement purposes.

O. N. The head of any state governmental unit, in relation to any contract exempted by this section from this chapter, has the same authority to adopt rules, procedures or policies as is delegated to the director pursuant to this chapter.

P. O. Agreements negotiated by legal counsel representing this state in settlement of litigation or threatened litigation are exempt from this chapter.

Q. P. This chapter is not applicable to contracts entered into by the department of economic security:

1. With a provider licensed or certified by an agency of this state to provide child day care services.

2. With area agencies on aging created pursuant to the older Americans act of 1965 (P.L. 89‑73; 79 Stat. 218; 42 United States Code sections 3001 through 3058ff).

3. For services pursuant to title 36, chapter 29, article 2.

4. With an eligible entity as defined by Public Law 105‑285, section 673(1)(A)(i), as amended, for designated community services block grant program monies and any other monies given to the eligible entity that accomplishes the purpose of Public Law 105‑285, section 672.

R. Q. The Arizona health care cost containment system may not require that persons with whom it contracts follow this chapter for the purposes of subcontracts entered into for the provision of the following:

1. Mental health services pursuant to section 36‑189, subsection B.

2. Services for the seriously mentally ill pursuant to title 36, chapter 5, article 10.

3. Drug and alcohol services pursuant to section 36‑141.

S. R. The department of health services may not require that persons with whom it contracts follow this chapter for the purpose of subcontracts entered into for the provision of domestic violence services pursuant to title 36, chapter 30, article 1.

T. S. The department of health services is exempt from this chapter for contracts for services of physicians at the Arizona state hospital.

U. T. Contracts for goods and services approved by the board of trustees of the public safety personnel retirement system are exempt from this chapter.

V. U. The Arizona department of agriculture is exempt from this chapter with respect to contracts for private labor and equipment to effect cotton or cotton stubble plow‑up pursuant to rules adopted under title 3, chapter 2, article 1.

W. V. The Arizona state parks board director is exempt from this chapter for purchases of guest supplies and items for resale such as food, linens, gift items, sundries, furniture, china, glassware and utensils for the facilities located in the Tonto natural bridge state park.

X. W. The Arizona state parks board director is exempt from this chapter for the purchase, production, promotion, distribution and sale of publications, souvenirs and sundry items obtained and produced for resale.

Y. X. The Arizona state schools for the deaf and the blind are exempt from this chapter for the purchase of textbooks and when purchasing products through a cooperative that is organized and operates in accordance with state law if such products are not available on a statewide contract and are related to the operation of the schools or are products for which special discounts are offered for educational institutions.

Z. Y. Expenditures of monies in the morale, welfare and recreational fund established by section 26‑153 are exempt from this chapter.

AA. Z. Notwithstanding section 41‑2534, the director of the state department of corrections may contract with local medical providers in counties with a population of less than four hundred thousand persons for the following purposes:

1. To acquire hospital and professional medical services for inmates who are incarcerated in state department of corrections facilities that are located in those counties.

2. To ensure the availability of emergency medical services to inmates in all counties by contracting with the closest medical facility that offers emergency treatment and stabilization.

BB. AA. The department of environmental quality is exempt from this chapter for contracting for procurements relating to the water quality assurance revolving fund program established pursuant to title 49, chapter 2, article 5. The department shall engage in a source selection process that is similar to the procedures prescribed by this chapter. The department may contract for remedial actions with a single selection process. The exclusive remedy for disputes or claims relating to contracting pursuant to this subsection is as prescribed by article 9 of this chapter and the rules adopted pursuant to that article. All other procurement by the department shall be as prescribed by this chapter.

CC. BB. The motor vehicle division of the department of transportation is exempt from this chapter for third‑party authorizations pursuant to title 28, chapter 13, only if all of the following conditions exist:

1. The division does not pay any public monies to an authorized third party.

2. Exclusivity is not granted to an authorized third party.

3. The director has complied with the requirements prescribed in title 28, chapter 13 in selecting an authorized third party.

DD. CC. This section does not exempt third‑party authorizations pursuant to title 28, chapter 13 from any other applicable law.

EE. DD. The state forester is exempt from this chapter for purchases and contracts relating to wildland fire suppression and pre‑positioning equipment resources and for other activities related to combating wildland fires and other unplanned risk activities, including fire, flood, earthquake, wind and hazardous material responses. All other procurement by the state forester shall be as prescribed by this chapter.

FF. EE. The cotton research and protection council is exempt from this chapter for procurements.

GG. Expenditures of monies in the Arizona agricultural protection fund established by section 3‑3304 are exempt from this chapter.

HH. FF. The Arizona commerce authority is exempt from this chapter, except article 10 for the purpose of cooperative purchases. The authority shall adopt policies, procedures and practices, in consultation with the department of administration, that are similar to and based on the policies and procedures prescribed by this chapter for the purpose of increased public confidence, fair and equitable treatment of all persons engaged in the process and fostering broad competition while accomplishing flexibility to achieve the authority's statutory requirements. The authority shall make its policies, procedures and practices available to the public. The authority may exempt specific expenditures from the policies, procedures and practices.

II. GG. The Arizona exposition and state fair board is exempt from this chapter for contracts for professional entertainment.

JJ. HH. This chapter does not apply to the purchase of water, gas or electric utilities.

KK. II. This chapter does not apply to professional certifications, professional memberships and conference registrations.

LL. JJ. The department of gaming is exempt from this chapter for problem gambling treatment services contracts with licensed behavioral health professionals.

MM. KK. This chapter does not apply to contracts for credit reporting services.

NN. LL. This chapter does not apply to contracts entered into by the department of child safety:

1. With a provider of family foster care pursuant to section 8‑503.

2. With an eligible entity as defined by Public Law 105‑285, section 673(1)(A)(i), as amended, for designated community services block grant program monies and any other monies given to the eligible entity that accomplishes the purpose of Public Law 105‑285, section 672.

OO. MM. This chapter does not apply to contracts entered into by the department of economic security with a financial institution to serve as a program manager and depository under section 46‑903. END_STATUTE

Sec. 38. Repeal

Sections 41-3022.18 and 41‑3023.06, Arizona Revised Statutes, are repealed.

Sec. 39. Title 41, Arizona Revised Statutes, is amended by adding chapter 55, to read:

CHAPTER 55

STATE PARKS

ARTICLE 1. GENERAL PROVISIONS

Sec. 40. Section 41‑5601, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5601. State parks director; qualifications; state historic preservation officer

A. The governor shall appoint a full‑time state parks director pursuant to section 38‑211 who shall:

~~1. Not be a member of the Arizona state parks board.~~

2. 1. Serve at the pleasure of the governor.

3. 2. Be qualified by successful experience in administration in business or in government.

4. 3. Have a knowledge of or training in the multiple use of lands and the conservation of natural resources.

B. The governor shall designate a full‑time employee ~~of the board~~ with professional competence and expertise in the field of historic preservation as the "state historic preservation officer" to administer the state historic preservation program. END_STATUTE

Sec. 41. Section 41‑5602, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5602. Purposes; objectives

The purposes and objectives of the ~~board shall be~~ state parks director are to select, acquire, preserve, establish and maintain areas of natural features, scenic beauty, historical and scientific interest, and zoos and botanical gardens, for the education, pleasure, recreation, and health of the people, and for such other purposes as may be prescribed by law. END_STATUTE

Sec. 42. Section 41-5603, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5603. Duties; director; partnership fund; state historic preservation officer; definition

A. The board director shall:

1. Select areas of scenic beauty, natural features and historical properties now owned by the state, except properties in the care and custody of other agencies by virtue of agreement with the state or as established by law, for management, operation and further development as state parks and historical monuments.

2. Manage, develop and operate state parks, monuments or trails established or acquired pursuant to law, or previously granted to the state for park or recreation purposes, except those falling under the jurisdiction of other state agencies as established by law.

3. Investigate lands owned by the state to determine in cooperation with the agency that manages the land which tracts should be set aside and dedicated for use as state parks, monuments or trails.

4. Investigate federally owned lands to determine their desirability for use as state parks, monuments or trails and negotiate with the federal agency having jurisdiction over such lands for the transfer of title to the Arizona state parks board this state.

5. Investigate privately owned lands to determine their desirability as state parks, monuments or trails and negotiate with private owners for the transfer of title to the Arizona state parks board this state.

6. Enter into agreements with the United States, other states or local governmental units, private societies or persons for the development and protection of state parks, monuments and trails.

7. Plan, coordinate and administer a state historic preservation program, including the program established pursuant to the national historic preservation act of 1966, as amended.

8. Advise, assist and cooperate with federal and state agencies, political subdivisions of this state and other persons in identifying and preserving properties of historic or prehistoric significance.

9. Keep and administer an Arizona register of historic places composed of districts, sites, buildings, structures and objects significant in this state's history, architecture, archaeology, engineering and culture that meet criteria that the board director establishes or that are listed on the national register of historic places. Entry on the register requires nomination by the state historic preservation officer and owner notification in accordance with rules that the board director adopts.

10. Accept, on behalf of the state historic preservation officer, applications for classification as historic property received from the county assessor.

11. Adopt rules with regard to classification of historic property including:

(a) Minimum maintenance standards for the property.

(b) Requirements for documentation.

12. Monitor the performance of state agencies in the management of historic properties as provided in chapter 4.2 of this title.

13. Advise the governor on historic preservation matters.

14. Plan and administer a statewide parks and recreation program, including the programs established pursuant to the land and water conservation fund act of 1965 (P.L. 88‑578; 78 Stat. 897).

15. Prepare, maintain and update a comprehensive plan for the development of the outdoor recreation resources of this state.

16. Initiate and carry out studies to determine the recreational needs of this state and the counties, cities and towns.

17. Coordinate recreational plans and developments of federal, state, county, city, town and private agencies.

18. Receive applications for projects to be funded through the land and water conservation fund and the state lake improvement fund on behalf of the Arizona outdoor recreation coordinating commission.

19. Provide staff support to the Arizona outdoor recreation coordinating commission.

20. Maintain a statewide off‑highway vehicle recreational plan. The plan shall be updated at least once every five years and shall be used by all participating agencies to guide distribution and expenditure of monies under section 28‑1176. The plan shall be open to public input and shall include the priority recommendations for allocating available monies in the off‑highway vehicle recreation fund established by section 28‑1176.

21. Collaborate with the state forester in presentations to legislative committees on issues associated with forest management and wildfire prevention and suppression as provided by section 37‑1302, subsection B.

B. Notwithstanding section 41‑511.21 41‑5619, the board director may annually collect and expend monies to plan and administer the land and water conservation fund program, in conjunction with other administrative tasks and recreation plans, as a surcharge to subgrantees in a proportionate amount, not to exceed ten percent, of the cost of each project. The surcharge monies shall be set aside to fund staff support for the land and water conservation fund program.

C. A partnership fund is established consisting of monies received pursuant to subsection B of this section, monies received from intergovernmental agreements pursuant to title 11, chapter 7, article 3 and monies received pursuant to section 35‑148. The board director shall administer the fund monies as a continuing appropriation for the purposes provided in these sections.

D. The state historic preservation officer shall:

1. In cooperation with federal and state agencies, political subdivisions of this state and other persons, direct and conduct a comprehensive statewide survey of historic properties and historic private burial sites and historic private cemeteries and maintain inventories of historic properties and historic private burial sites and historic private cemeteries.

2. Identify and nominate eligible properties to the national register of historic places and the Arizona register of historic places and otherwise administer applications for listing historic properties on the national and state registers.

3. Administer grants‑in‑aid for historic preservation projects within this state.

4. Advise, assist and monitor, as appropriate, federal and state agencies and political subdivisions of this state in carrying out their historic preservation responsibilities and cooperate with federal and state agencies, political subdivisions of this state and other persons to ensure that historic properties and historic private burial sites and historic private cemeteries are taken into consideration at all levels of planning and development.

5. Develop and make available information concerning professional methods and techniques for the preservation of historic properties and historic private burial sites and historic private cemeteries.

6. Make recommendations on the certification, classification and eligibility of historic properties and historic private burial sites and historic private cemeteries for property tax and investment tax incentives.

E. The state historic preservation officer may:

1. Collect and receive information for historic private burial sites and historic private cemeteries from public and private sources and maintain a record of the existence and location of such burial sites and cemeteries located on private or public lands in this state.

2. Assist and advise the owners of the properties on which the historic private burial sites and historic private cemeteries are located regarding the availability of tax exemptions applicable for such property.

3. Make the records available to assist in locating the families of persons buried in the historic private burial sites and historic private cemeteries.

F. For the purposes of this section, "historic private burial sites and historic private cemeteries" means places where burials or interments of human remains first occurred more than fifty years ago, that are not available for burials or interments by the public and that are not regulated under title 32, chapter 20, article 6. END_STATUTE

Sec. 43. Section 41-5604, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5604. Powers; compensation

The board may director, subject to legislative budgetary control within the limitations of this article, may:

1. Subject to chapter 4, article 4 and, as applicable, article 5 of this title, employ, determine conditions of employment and specify the duties of such administrative, secretarial and clerical workers and technical employees such as naturalists, archaeologists, landscape architects, rangers, park supervisors, caretakers, guides, skilled tradesmen, laborers, historians and engineers, and contract to have the services of such advisors or consultants as are reasonably necessary or desirable to enable it the director to perform adequately ~~its~~ the director's duties. The compensation of the director and of all workers and employees shall be as determined pursuant to section 38‑611.

2. Make such contracts, leases and agreements and incur such obligations as are reasonably necessary or desirable within the general scope of ~~its~~ the director's activities and operations to enable it the director to perform adequately ~~its~~ the director's duties.

3. Acquire through purchase, lease, agreement, donation, grant, bequest or otherwise real and personal property and acquire real property through eminent domain for state park or monument purposes. No property may be acquired in the manner provided in this paragraph which that will require an expenditure in excess of funds budgeted or received for such purposes. No state park or monument, or additions to a state park or monument, shall be created containing in excess of one hundred sixty acres of land unless created by an act of the legislature. This acreage limitation shall not apply in the case of lands given or donated for state park or monument purposes nor to state owned lands that are selected by the ~~board~~ director and that are not subject to outstanding leases, permits or other rights for the use of the lands including preferential rights to renew such leases and permits.

4. Sell, lease, exchange or otherwise dispose of real and personal property. Any disposition of real property shall be submitted for approval of the joint committee on capital review. The disposition of office equipment, furnishings, vehicles and other materials is subject to chapter 23, article 8 of this title. The disposition of artifacts and other property of scientific, archaeological, historical or sociological interest is exempt from chapter 23, article 8 of this title, but the ~~board~~ director shall consult with the Arizona historical society in disposing of property of historical interest.

5. Construct at state parks and monuments necessary sanitary and other facilities including picnic tables, fireplaces, campsites, service buildings and maintenance shops, and contract with private persons for the construction and operation of cabins, hotels and restaurants, and like establishments.

6. Erect suitable signs and markers at parks and monuments and write, prepare and publish written material describing the historical significance of monuments and other places of historical or other significance.

7. Solicit and work in cooperation with the department of transportation and the highway departments of various counties and the United States federal highway administration for necessary roads and trails within the state parks and monuments and access roads to state parks and monuments. For the purposes of this paragraph, the ~~board~~ director may designate roads, spurs and other traffic related appurtenances within state park boundaries as public highways. Designation of roads, spurs or other traffic related traffic‑related appurtenances as public highways shall not prohibit the ~~board~~ director from closing such public highways when the park is closed, charging for admission to the park to persons using the public highway within the park or otherwise managing such public highways in the same manner as other lands within the park.

8. Levy and collect reasonable fees or other charges for the use of such privileges and conveniences as may be provided under the jurisdiction of the ~~board~~ director. The ~~board~~ director may enter into agreements for the purpose of accepting payment for fees or other charges imposed pursuant to this article by alternative payment methods, including credit cards, charge cards, debit cards and electronic funds transfers. The collecting officer shall deduct any fee charged or withheld by a company providing the alternative payment method under an agreement with the ~~board~~ director before the revenues are transferred to the ~~board~~ director.

9. Make reasonable rules for the protection of, and maintain and keep the peace in, state parks and monuments. Such rules adopted by the ~~parks board~~ director are subject to review and approval by the legislature. After a ~~board~~ director's rule has been finally adopted pursuant to chapter 6 of this title, the ~~board~~ director shall immediately forward a certified copy of the rule to the legislature. The legislature may review and, by concurrent resolution, approve, disapprove or modify such rule. However, such rule shall be given full force and effect pending legislative review. If no concurrent resolution is passed by the legislature with respect to the rule within one year following receipt of a certified copy of the rule, the rule shall be deemed to have been approved by the legislature. If the legislature disapproves a rule or a section of a rule, the ~~board~~ director shall immediately discontinue the use of any procedure, action or proceeding authorized or required by the rule or section of the rule. If the legislature modifies a rule or section of a rule, the ~~board~~ director shall immediately suspend the use of any procedure, action or proceeding authorized or required by the rule or section of the rule until the modified rule has been adopted in accordance with chapter 6 of this title, after which all proceedings pursuant to the rule shall be conducted in accordance with the modified version of the rule.

10. Furnish advisory services to city and county park or recreation boards and organizations.

11. Delegate to ~~the director,~~ the deputy director ~~or the director's designee~~ any of ~~its~~ the director's powers and duties, whether ministerial or discretionary, which are prescribed by law, except that the ~~board~~ director may not delegate ~~its~~ the director's power or duty to make rules.

12. Reimburse ~~board~~ volunteers for travel and lodging expenses and per diem subsistence allowances incurred while on public business for the ~~board~~ parks. Reimbursement amounts shall not exceed those allowed under title 38, chapter 4, article 2.

13. In consultation with the conservation acquisition board, develop a grant program and adopt guidelines for allocating and obligating monies in the land conservation fund pursuant to section ~~41‑511.23~~ 41‑5621. The guidelines shall include consideration of both qualification issues relating to applicants for grants and issues relating to the proposed use of the grant money in a manner consistent with existing municipal, county and regional land use plans. END_STATUTE

Sec. 44. Section 41-5605, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5605. Eminent domain

A. In acquiring property by eminent domain, no water, watering facilities or water right of any person shall be taken separate and apart from the land served by such water, watering facilities or water rights, without fair and adequate compensation to be awarded for such land and water, watering facilities or water rights.

B. In seeking to establish a state park or monument on state or federally owned land, the ~~board~~ director shall not request the termination or cancellation of any valid lease, permit, government land entry, mining claim, privilege or other right unless fair and adequate compensation is awarded to the holder of such lease, permit, privilege or other right. If the amount of the compensation cannot be determined by agreement, the ~~board~~ director may proceed to cause such lease, permit, privilege, government land entry, mining claim or right to be terminated or cancelled if such can be lawfully done by the state or federal agency having jurisdiction thereof, or the ~~board~~ director may proceed to acquire the same by eminent domain. In any event the holder of such lease, permit, privilege, government land entry, mining claim or right shall receive fair and adequate compensation for the cost of and damage to his property interest or loss of his lease, privilege, government land entry, mining claim or permit. In determining the amount of such compensation, consideration shall be given to any preferential rights of renewal and other preferential rights of the owner or holder thereof, the damage to the remaining land, damage by access roads, and damage to the rights and operation which that such owner may have and all other relevant factors. END_STATUTE

Sec. 45. Section 41-5606, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5606. Parks and monuments on state lands

The ~~board~~ director may take over state lands and improvements thereon pursuant to ~~article 9, chapter 2,~~ title 37, chapter 2, article 9, except that the application to and approval by the governor shall not be required if the legislature has created the park or monument, and in determining the amount of compensation to be received by a lessee or permittee all of the elements of damage set forth in ~~subsection B of~~ section ~~41‑511.06~~ 41‑5605, subsection B shall be considered. END_STATUTE

Sec. 46. Section 41-5607, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5607. Judicial review

Except as provided in section 41‑1092.08, subsection H, an appeal from a final decision of the ~~board or from a final decision of the~~ director ~~made pursuant to the powers and duties delegated to the director by the board~~ may be taken pursuant to title 12, chapter 7, article 6. END_STATUTE

Sec. 47. Section 41-5608, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5608. Park ranger law enforcement officers; training

The ~~board~~ director may appoint one or more of ~~its officers or~~ the director's employees as a park ranger law enforcement officer. Any person so appointed shall have the minimum qualifications established for peace officers and police officers pursuant to section 41‑1822. When so appointed, the ~~officer or~~ employee shall have the authority and power of a peace officer with the primary duties of enforcement of this article and enforcement of rules adopted pursuant to this article for the protection of the parks and monuments against damage and for the preservation of peace in the parks and monuments.END_STATUTE

Sec. 48. Section 41-5609, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5609. Rejection of gifts

The ~~board~~ director may reject any donation, bequest, or gift or property deemed by it the director to be unsuitable as a state park or monument. END_STATUTE

Sec. 49. Section 41-5610, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5610. Disposition of gifts; state parks donations fund

Monies from unconditional gifts, donations, bequests and endowments, which that are not specifically designated to the state parks revenue fund, shall be deposited, pursuant to sections 35‑146 and 35‑147, by the ~~board~~ director in a fund to be known as the state parks donations fund, for use by the ~~board~~ director in accomplishing ~~its~~ the director's objectives and duties. All expenditures from the state parks donations fund shall be made ~~upon~~ on claims duly itemized, verified and approved by the ~~Arizona state parks board~~ director.END_STATUTE

Sec. 50. Section 41-5611, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5611. Annual report

Not later than December 31 each year the ~~board~~ director shall deliver to the governor, the director of the department of administration and the legislature an annual report of the finances, goals and accomplishments of the ~~board~~ director during the preceding fiscal year. END_STATUTE

Sec. 51. Section 41-5612, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5612. Violations; classification

A. Any person who knowingly damages, defaces or destroys any public park or monument property ~~which~~ that is within ~~the~~ this state or any political subdivision thereof is guilty of a class 2 misdemeanor.

B. It is unlawful for a person to violate any provision of this article or rule or regulation prescribed under ~~the provisions of~~ this article.

C. Unless a different or other penalty or punishment is specifically prescribed, the person who violates any provisions of this article or who violates or fails to comply with a lawful order, rule or regulation of the ~~Arizona state parks board~~ director is guilty of a class 2 misdemeanor.

D. A park ranger law enforcement officer may ~~utilize~~ use the procedure prescribed by section 13‑3903 for violations of this article or any order, rule or regulation adopted pursuant to this article. END_STATUTE

Sec. 52. Section 41-5613, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5613. Arizona trail; fund; definition

A. The Arizona trail is designated as a state scenic trail to memorialize former United States congressman Bob Stump for his significant contributions to the trails and people of this state.

B. The ~~Arizona state parks board~~ director shall:

1. Participate in planning, establishing, developing, maintaining and preserving the trail.

2. Provide information to any person involved in planning, establishing, developing or maintaining the trail regarding the design, corridors, signs, interpretive markers highlighting special areas and historic uses and any other aspect of the trail to promote uniformity of development, maintenance and preservation.

3. Encourage counties, cities and towns to adapt their general and comprehensive plans to preserve the trail right-of-way and to acquire property or legal interests in property to ensure the trail's continued existence in a permanent location.

4. In cooperation with federal and state land management agencies, prepare a trail management plan and a plan for interpretive markers for the trail.

5. Coordinate the ~~board's~~ director's trail plan with federal, state and local activities and land uses that may affect the trail and with private nonprofit support organizations to assist in planning, developing, promoting and preserving the trail.

6. Accept gifts and grants of private and public monies for the purposes of this section. Monies received pursuant to this paragraph shall be deposited in the Arizona trail fund.

C. The trail shall be planned and designed for all nonmotorized recreational uses, including hiking, biking, horseback and pack stock use, cross country skiing, snowshoeing and camping.

D. An agency of this state or of a county, city or town may not refuse to permit construction of the trail on property or rights-of-way owned or managed by the agency if the trail does not conflict with existing or proposed uses of the property. Each such agency shall:

1. Support the construction of the trail in the agency's long‑term plans for its property.

2. Support the designation of the trail as a part of the national trail system.

3. Accommodate facilities for the safe trail crossing of highway rights‑of‑way.

4. Not infringe on existing land uses, such as cattle grazing or mineral development, that are near to or adjoin the trail. This paragraph does not authorize any person using public lands under a permit or lease to interfere with the use, maintenance or operation of the Arizona trail.

E. The Arizona trail fund is established consisting of legislative appropriations and donations to the fund. The ~~Arizona state parks board~~ director shall administer the fund. The monies in the fund are continuously appropriated for the sole purpose of maintaining and preserving the Arizona trail.

F. For the purposes of this section, "Arizona trail" means a state scenic trail that extends approximately eight hundred miles between the southern border and the northern border of this state. END_STATUTE

Sec. 53. Section 41-5614, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5614. Rock climbing state park; fees, gifts and donations; disposition

A. The ~~Arizona state parks board~~ director shall establish a rock climbing state park subject to all of the following conditions:

1. The conveyance of approximately two thousand acres of bureau of land management land by the United States secretary of the interior, pursuant to the recreational and public purposes act (43 United States Code sections 869 through 869-4), to ~~the Arizona state parks board~~ this state. The land is located in Gila county and is generally described as: the south 1/2 of section 4, township 4 south, range 15 east; southeast 1/4 of section 5, township 4 south, range 15 east; all of section 8, township 4 south, range 15 east, except north 1/2, of the southwest 1/4 and southeast 1/4, southeast 1/4; north 1/2, and the north 1/2 of the southwest 1/4 of section 9, township 4 south, range 15 east; north 1/2 section 16, township 4 south, range 15 east, except southeast 1/4 of the northeast 1/4; the north 1/2 of section 17, township 4 south, range 15 east.

2. The conveyance or lease of three parcels of state trust land totaling approximately one hundred sixty acres to ~~the Arizona state parks board~~ this state. The trust lands are located in Gila county and are generally described as: the southeast 1/4 of the southeast 1/4 of section 8, township 4 south, range 15 east; south 1/2 of the southeast 1/4, section 9, township 4 south, range 15 east; southeast 1/4 of the northeast 1/4, section 16, township 4 south, range 15 east.

3. The establishment of a park access road as specified by the United States Congress and a public access easement on the access road being transferred to ~~the Arizona state parks board~~ this state.

B. Notwithstanding the provisions of section ~~41‑511.05~~ 41‑5604, paragraph 3, additions to the rock climbing state park, up to five hundred acres, shall not require additional legislative authorization.

C. The ~~Arizona state parks board~~ director shall use ~~its~~ the director's best efforts to prevent trespass onto private lands adjacent to the boundaries of the rock climbing state park and shall provide access to the owners of any private lands within the exterior boundary of the state park.

D. The ~~Arizona state parks board~~ director may charge user fees and concession fees and collect monies from other revenue generating activities. The ~~state parks board~~ director shall deposit, pursuant to sections 35‑146 and 35‑147, all monies collected in the state parks revenue fund established by section ~~41‑511.21~~ 41‑5619.

E. The ~~Arizona state parks board~~ director may accept gifts and donations toward the acquisition, management and operations of the rock climbing state park. The ~~Arizona state parks board~~ director shall deposit, pursuant to sections 35‑146 and 35‑147, any gifts or donations collected in the state parks donations fund established by section ~~41‑511.11~~ 41‑5610 and account for these monies separately.

F. The ~~Arizona state parks board~~ director shall ensure public access to the rock climbing state park.

G. Nothing in the establishment of the rock climbing state park shall be construed to impose any new or additional management requirements, restrictions or regulations under the laws of this state on the permitting, management of or the conduct of activities on any lands outside the state park, or to impose restrictions on these activities in addition to those applicable to the same land within and outside the state park, before its designation as a state park.

H. Mining and mining related activities carried out by users of lands outside the rock climbing state park do not create a cause of action for any injuries sustained by a person within the boundaries of the state park. END_STATUTE

Sec. 54. Section 41-5615, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5615. Sustainable state parks and roads fund

The sustainable state parks and roads fund is established consisting of monies received pursuant to section 43‑622. The ~~Arizona state parks board~~ director shall administer the fund. Monies in the fund are continuously appropriated. The ~~Arizona state parks board~~ director shall use the monies in the fund to operate, maintain and make capital improvements to buildings, roads, parking lots, highway entrances and any related structure used to operate state parks. END_STATUTE

Sec. 55. Section 41-5616, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5616. Spur Cross Ranch state park

A. The ~~Arizona state parks board~~ director shall establish Spur Cross Ranch state park subject to the following conditions:

1. A purchase and sale agreement shall be executed between ~~the Arizona state parks board~~ this state and at least one owner of Spur Cross Ranch as described in subsection D of this section. The purchase and sale agreement shall be for property that is suitable for a state park consistent with the mission of the ~~Arizona state parks board~~ director. The purchase and sale agreement shall be based on an appraisal made by an appraiser who is certified by a nationally recognized appraisal organization. The purchase and sale agreement shall be for a price no greater than the appraised value, but can and may be for a price less than the appraised value.

2. An intergovernmental agreement shall be executed between ~~the Arizona state parks board~~ this state and a county with a population of more than one million two hundred thousand persons ~~according to the most recent United States decennial census~~. That county shall provide half of the purchase price of the portion of Spur Cross Ranch as determined in the purchase and sale agreement between ~~the Arizona state parks board~~ this state and at least one owner of Spur Cross Ranch.

3. An intergovernmental agreement shall be executed between ~~the~~ ~~Arizona state parks board~~ this state and a county with a population of more than one million two hundred thousand persons ~~according to the most recent United States decennial census~~ or with cities or towns or with both and that specifies the obligations of the parties to manage and operate Spur Cross Ranch state park.

B. If funding is provided for the acquisition of Spur Cross Ranch other than from sources administered by an agency of this state or a county with a population of more than one million two hundred thousand persons ~~according to the most recent United States decennial census~~, the obligation of this state and that county is reduced proportionately by the amount of other funding sources. The use of federal monies for any portion of the costs of acquisition of the Spur Cross Ranch shall not affect this state's jurisdiction over the acquisition, operation or maintenance of the Spur Cross Ranch as a state park.

C. The ~~Arizona state parks board~~ director may accept gifts and donations toward the acquisition, management and operation of Spur Cross Ranch state park. Any gifts and donations collected shall be deposited in the state parks donations fund established by section ~~41‑511.11~~ 41‑5610 and accounted for separately. The ~~Arizona state parks board~~ director shall ensure public access to the Spur Cross Ranch state park.

D. Spur Cross Ranch state park consists of all or part of the following described property:

1. Lots 3, 4, 5 and 6; the south half of the northwest quarter; the northwest quarter of the southwest quarter; and the southeast quarter of the northeast quarter, all lying in and being a part of section 4, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

2. All of section 5, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona; except the southeast quarter of the southeast quarter of section 5.

3. All of section 6, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

4. The southwest quarter of the southwest quarter of section 4, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

5. The southeast quarter of the southeast quarter of section 5, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

6. The northeast quarter of the northeast quarter of section 8, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

7. The northwest quarter of the northwest quarter of section 9, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

8. Lots 1 and 2; and the southwest quarter of the northeast quarter, all lying in and being a part of section 4, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

9. The north half of the north half of section 7, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

10. The south half of the southeast quarter of section 7, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

11. The south half of the northeast quarter of section 8, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona.

12. The Catherine lode mining claim, designated by the surveyor general as survey number 4096 embracing a portion of section 4, township 6 north, range 4 east of the Gila and salt river base and meridian, Maricopa county, Arizona, in the cave creek mining district, as conveyed and more particularly described in patent recorded in book 248 of deeds, page 400.

13. The Columbian lode mining claim, designated by the surveyor general as survey number 2685, embracing a portion of the unsurveyed domain in the cave creek mining district, as conveyed and more particularly described in patent recorded in book 99 of deeds, page 10.

14. The Mashackety lode mining claim, designated by the surveyor general as survey number 2685, embracing a portion of the unsurveyed domain in the Cave Creek mining district, as conveyed and more particularly described in patent recorded in book 99 of deeds, page 10.

15. The Mashackety number 1 lode mining claim, designated by the surveyor general as survey number 2685, embracing a portion of the unsurveyed domain in the Cave Creek mining district, as conveyed and more particularly described in patent recorded in book 99 of deeds, page 10. END_STATUTE

Sec. 56. Section 41-5617, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5617. Catalina state park

A. There is established The Catalina state park which is established and may consist of all or a part of the following described property:

Sections 13, 24, 25, north one‑half of Section 35, Section 36, all in Township 10 South, Range 14 East, of the Gila and Salt River Base and Meridian, Pinal County, Arizona, Section 1, south one‑half of Section 2 East of Lago Del Oro Parkway, South one‑half of Section 11, west one‑half of Section 12, Section 14, all of Section 20 lying east of Highway 89, south one‑half of Section 21, south one‑half and the northeast one‑fourth of Section 22, Section 23, Section 26, Section 27, Section 28, all of Section 29 lying east of Highway 89, all of Section 32 lying east of Highway 89, Section 33, Section 34, all in Township 11 South, Range 14 East, of the Gila and Salt River Base and Meridian, Pima County, Arizona, Section 3, Section 4, all of Section 5 lying east of Highway 89, all of Section 7 lying east of Highway 89, all of Section 8 lying east of Highway 89, Section 18, all in Township 12 South, Range 14 East, of the Gila and Salt River Base and Meridian, Pima County, Arizona.

B. ~~The Arizona state parks board or its successor~~ This state may lease or purchase from anyone any of the lands described in subsection A of this section for Catalina state park purposes, subject to the availability of funds monies appropriated for such purposes by the legislature.

C. Notwithstanding the provisions of title 37, chapter 2, article 14, relating to the exchange of public lands, the state land commissioner may obtain any of the land described in subsection A of this section by trade of state land of equal value within Pima or Pinal county. END_STATUTE

Sec. 57. Section 41-5618, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5618. Authorized emergency use of water from Lake Patagonia by city of Nogales

A. Notwithstanding any provision of law to the contrary, whenever an emergency exists, as determined by the mayor of the city of Nogales, Arizona, and concurred in by the director of water resources, that there is not sufficient water for use by ~~such~~ the city and that there is no other water available from any other practical source, ~~then~~ the ~~state parks board shall~~ director, ~~upon~~ on request by ~~such~~ the mayor, shall authorize ~~such~~ the city to remove from Lake Patagonia such amount of water as needed to supply the city with sufficient water. The city of Nogales shall provide the means for transferring such water.

B. The director of water resources shall assess a fee to the city of Nogales for the use of such water based ~~upon~~ on the value of the water. Such fee shall be paid by the city to the state parks ~~board~~ Lake Patagonia account. END_STATUTE

Sec. 58. Section 41-5619, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5619. State parks revenue fund; purpose; exemption

A. The state parks revenue fund is established consisting of:

1. Monies received from the sale of park posters, park postcards, books, souvenirs and sundry items pursuant to section ~~41‑511.05~~ 41‑5604, paragraph 4.

2. Monies appropriated by the legislature for the purpose of enhancing state parks.

3. Unconditional gifts and donations specifically designated to the revenue fund, except for unconditional gifts, donations, bequests and endowments deposited in the state parks donations fund pursuant to section ~~41‑511.11~~ 41‑5610.

4. All monies derived from state park user fees, concession fees and other revenue generating activities.

5. Surcharges on park reservations.

6. Sale of park assets.

B. The monies in the fund are subject to legislative appropriation:

1. For the operation and maintenance of the state park system.

2. For use by the ~~board~~ director to acquire and develop real property and improvements as state parks consistent with the purposes and objectives prescribed in section ~~41‑511.03~~ 41‑5602, subject to review by the joint committee on capital review.

C. Monies in the fund shall not be appropriated in a manner that is inconsistent with restrictions in the lease or deed to the property.

D. The ~~board~~ director may collect monies as a surcharge on park reservations and shall determine the surcharge rate as provided in section ~~41‑511.05~~ 41‑5604, paragraph 8 after considering the costs to plan and administer the reservation system.

E. On notice from the ~~board~~ director, the state treasurer shall invest and divest the monies in the state parks revenue fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund.

F. Monies in the state parks revenue fund are exempt from section 35‑190, relating to lapsing of appropriations. The purposes for which monies were expended during the preceding fiscal year shall be delineated in the agency's annual report pursuant to section ~~41‑511.12~~ 41‑5611. END_STATUTE

Sec. 59. Section 41-5620, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5620. Trail systems plan; deposit of monies; definition

A. The ~~board~~ director shall prepare a trail systems plan that:

1. Identifies on a statewide basis the general location and extent of significant trail routes, areas and complementary facilities.

2. Assesses the physical condition of the systems.

3. Assesses usage of trails.

4. Describes specific policies, standards and criteria to be followed in adopting, developing, operating and maintaining trails in the systems.

5. Recommends to federal, state, regional, local and tribal agencies and to the private sector actions ~~which~~ that will enhance the trail systems.

B. The plan shall be revised at least once every five years.

C. Monies from gifts, grants and other donations received by the ~~board~~ director for the trail systems plan shall be deposited in a separate account of the state parks donations fund established by section ~~41‑511.11~~ 41‑5610 and may be allocated by the ~~board~~ director for special trail project priorities established annually by the ~~board~~ director.

D. Monies deposited in the state parks donations fund account shall be used for providing state monies up to an amount equal to the amount of cash, materials and labor from any other source for the planning, acquisition, maintenance or operation of the trails and for administrative expenses of not more than twenty ~~per cent~~ percent of total account monies.

E. For purposes of this section, "trail systems" means coordinated systems of trails in this state.END_STATUTE

Sec. 60. Section 41-5621, Arizona Revised Statutes, as transferred and renumbered, is amended to read:

START_STATUTE41-5621. Conservation acquisition board; land conservation fund; conservation donation and public conservation accounts; livestock and crop conservation fund

A. The conservation acquisition board is established, as an advisory body to the ~~Arizona state parks board~~ director, consisting of the following members who are appointed by the governor, at least one of whom shall be experienced in soliciting money from private sources:

1. One state land lessee.

2. One member who is qualified by experience in managing large holdings of private land for income production or conservation purposes.

3. One member of the state bar of Arizona who is experienced in the practice of private real estate law.

4. One real estate appraiser who is licensed or certified under title 32, chapter 36.

5. One member who is qualified by experience in marketing real estate.

6. One representative of a conservation organization.

7. One representative of a state public educational institution.

B. The governor shall designate a presiding member of the board. The term of office is five years except that initial members shall assign themselves by lot to terms of one, two, three, two members for four and two members for five years in office.

C. The conservation acquisition board shall:

1. Solicit donations to the conservation donation account.

2. Consult with entities such as private land trusts, state land lessees, the state land department, the Arizona state parks ~~board~~ director and others to identify conservation areas that are reclassified pursuant to section 37‑312 and that are suitable for funding.

3. Recommend to the ~~Arizona state parks board~~ director appropriate grants from the land conservation fund.

D. The land conservation fund is established consisting of the following accounts:

1. The conservation donation account consisting of monies received as donations. Donations to the account are subject to any lawful conditions the donor may prescribe, including any conditions on the use of the money or reversion to the donor. Monies in the account are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

2. The public conservation account consisting of monies appropriated to the account from the state general fund and monies from any other designated source. In fiscal years 2000‑2001 through 2010‑2011, the sum of twenty million dollars is appropriated each fiscal year from the state general fund to the public conservation account in the land conservation fund for the purposes of this section. Monies in the account are appropriated for the purposes of this section, and the ~~Arizona state parks board~~ director may spend monies in the account without further legislative authorization. Each expenditure of monies from the public conservation account for purposes listed under subsection G, paragraph 2 of this section shall be matched by an equal expenditure of monies from the conservation donation account or from other private or governmental sources.

E. If the legislature fails to appropriate monies to the public conservation account in a fiscal year, and if there are no other monies in the public conservation account, the ~~Arizona state parks board~~ director may either grant nothing from the fund in that year or, on recommendation by the conservation acquisition board, may grant available monies in the conservation donation account for purposes authorized in subsection G of this section.

F. The monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

G. Monies in the public conservation account, with matching monies from the conservation donation account, are appropriated as follows:

1. A total of two million dollars each fiscal year to the livestock and crop conservation fund. The fund is established for the purposes of this paragraph. Monies in the fund are continuously appropriated to the Arizona department of agriculture for the exclusive purpose of granting monies to individual landowners and grazing and agricultural lessees of state or federal land who contract with the Arizona department of agriculture to implement conservation based management alternatives using livestock or crop production practices, or reduce livestock or crop production, to provide wildlife habitat or other public benefits that preserve open space and for administrative expenses as provided by this paragraph. The department shall administer the fund. On notice from the director of the department, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. For the purposes of granting monies from the fund pursuant to this paragraph, the department:

(a) Shall develop guidelines and criteria for implementation of this program that shall include requiring as part of the application a letter describing the intended use for the grant money.

(b) Shall give priority to lessees of state or federal land who reduce livestock production to provide public benefits such as wildlife species conservation or wildlife habitat.

(c) Shall not grant more than fifty ~~per cent~~ percent of the monies in the fund with respect to land in one county in any fiscal year.

(d) Is exempt from chapter 6 of this title with respect to adopting rules, except that the department shall provide for public notice and sixty days for public comment on the annual grant guidelines and criteria, including public hearings.

(e) Shall award all grants pursuant to chapter 24, article 1 of this title.

(f) Shall require each grantee to submit to the department, within twelve months after receiving the grant, a written report detailing how grant monies were used to achieve the project described in the letter submitted as part of the application. If the project is longer than one year, a written report shall be submitted to the department on an annual basis until the project is complete.

(g) May use not more than ten ~~per cent~~ percent of the monies appropriated to the fund in any fiscal year for the purposes of administering the program.

(h) Shall prepare a report of the disposition of monies appropriated to the fund each fiscal year and provide a copy of the report to the governor, to the ~~Arizona state parks board~~ director and to any person who requests a copy.

2. The remainder of the monies to the ~~Arizona state parks board~~ director for the exclusive purpose of granting monies to the state or any of its political subdivisions, or to a nonprofit organization that is exempt from federal income taxation under section 501(c) of the internal revenue code and that has the purpose of preserving open space, for the following purposes only:

(a) To purchase or lease state trust lands that are classified as suitable for conservation purposes pursuant to title 37, chapter 2, article 4.2. A grant of money under this subdivision to a nonprofit organization is conditioned on the organization providing reasonable public access to any land that is wholly or partly purchased with that money. The organization shall agree with the ~~Arizona state parks board~~ director that it will impose a restrictive covenant, running with the title to the land, granting such access and providing for reversion to this state of any interest in the property acquired with money granted under this subdivision on the failure to comply with the terms of the covenant. The ~~Arizona state parks board~~ director and the state land commissioner have standing to either enforce the covenant or recover the amount of the grant from the current owner, with interest from the date the grant was awarded to the nonprofit organization.

(b) To purchase the development rights of state trust lands throughout this state under the following conditions:

(i) The development rights shall be sold at public auction as provided in section 37‑258.01.

(ii) The lessee of the state trust land at the time the development rights are purchased shall be notified of the purchase in writing.

(iii) The purchase of the development rights shall not result in cancellation or modification of the current lease.

(iv) The purchase of the development rights shall not affect the existing lessee's current economic use of the land and rights pursuant to title 37, chapter 2, article 4.2.

(v) As a condition of the sale of the development rights, the purchaser shall agree in perpetuity not to exercise the development rights and that the land shall remain as open space.

(vi) The state trust land shall retain any other rights and attributes as prescribed by law at the time of the purchase.

H. For the purposes of subsection G, paragraph 2 of this section:

1. The ~~Arizona state parks board~~ director shall not grant more than fifty ~~per cent~~ percent of the monies with respect to land in one county in any fiscal year.

2. A grant of money is valid for eighteen months and may be extended one time for twelve additional months if a required public auction has not been held.

3. The ~~Arizona state parks board~~ director may adopt rules to establish qualifications of nonprofit organizations for purposes of applying for and receiving money granted.

4. The owner of property that is wholly or partly acquired with money granted shall not restrict or unreasonably limit access to private lands. Any sale of land with money granted shall include a condition requiring that permanent access to private lands be allowed.

I. The ~~Arizona state parks board~~ director shall administer the land conservation fund. On notice from the ~~board~~ director, the state treasurer shall invest and divest monies in either account in the fund as provided by section 35‑313, and monies earned from investments shall be credited to a separate administration account to pay the ~~board's~~ director's expenses of administering the land conservation and acquisition program under subsection G, paragraph 2 of this section, which shall not exceed five ~~per cent~~ percent of the amount deposited in the public conservation account in any fiscal year or five hundred thousand dollars, whichever is less. Investment earnings in excess of five hundred thousand dollars are appropriated to the ~~Arizona state parks board~~ director for the purpose of operating state parks.

J. Members of the conservation acquisition board may be reimbursed for travel and lodging expenses and per diem subsistence allowances incurred while on public business for the board. Reimbursement amounts shall not exceed those allowed under title 38, chapter 4, article 2. END_STATUTE

Sec. 61. Section 42-11110, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11110. Exemption for cemeteries

A. Cemeteries as defined in section 32-2101 that are set apart and used to inter deceased human beings and historic private burial sites and historic private cemeteries as defined in section 41-511.04 41‑5603 are exempt from taxation.

B. The owner of a cemetery, historic private burial site or historic private cemetery shall initially establish qualification for exemption under this section by filing an affidavit with the county assessor under section 42‑11152. Thereafter, the owner is not required to file an affidavit under section 42‑11152 unless:

1. Any part of the property is no longer, or will not be, used as a cemetery or has been rezoned, and the assessor shall sever that part of the property from the exempt parcel.

2. Any interest in the title to any part of the property is conveyed to a new owner. END_STATUTE

Sec. 62. Section 42-12101, Arizona Revised Statutes, is amended to read:

START_STATUTE42-12101. Definitions

In this article, unless the context otherwise requires:

1. "Commercial historic property" means real property that:

(a) Meets the criteria for classification as class one, paragraph 12 pursuant to section 42‑12001 or class four pursuant to section 42‑12004, subsection A, paragraphs 2 through 9.

(b) Is listed in the national register of historic places established and maintained under the national historic preservation act (P.L. 89-665; 80 Stat. 915; 16 United States Code section 470 et seq.), as amended.

2. "Noncommercial historic property" means real property:

(a) That is listed in the national register of historic places established and maintained under the national historic preservation act (P.L. 89-665; 80 Stat. 915; 16 United States Code section 470 et seq.), as amended.

(b) That meets the minimum standards of maintenance established by rule by the Arizona state parks board director.

Sec. 63. Section 42-12105, Arizona Revised Statutes, is amended to read:

START_STATUTE42-12105. Disqualification

A. Property shall remain classified and assessed as noncommercial historic property until it becomes disqualified through either:

1. Notice by the taxpayer to the assessor to remove the assessment as noncommercial historic property.

2. Sale or transfer to an ownership that makes it exempt from property taxation.

3. Notification by the state historic preservation officer to the assessor that the property no longer qualifies as noncommercial historic property.

B. Property shall remain classified and assessed as commercial historic property until it becomes disqualified through either:

1. Notice by the taxpayer to the assessor to remove the assessment as commercial historic property.

2. Sale or transfer to an ownership that makes it exempt from property taxation.

3. Notification by the state historic preservation officer to the assessor that the property no longer qualifies as commercial historic property.

4. The failure to maintain the property in a manner consistent with the minimum standards of maintenance established by rule by the Arizona state parks board director.END_STATUTE

Sec. 64. Section 43-622, Arizona Revised Statutes, is amended to read:

START_STATUTE43-622. Contribution to sustainable state parks and roads fund

A. The department shall provide a space on the individual income tax return form in which a taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the sustainable state parks and roads fund established by section 41‑511.17 41‑5615.

B. After subtracting any setoff for debts pursuant to section 42‑1122, the department shall subtract the designated amount from the refund due the taxpayer and transfer it to the Arizona state parks board director for deposit in the sustainable state parks and roads fund.

C. The taxpayer may also donate any amount to the sustainable state parks and roads fund, in lieu of or in addition to the designated portion of the tax refund, by an appropriate indication on the return and by including that amount with the return. END_STATUTE

Sec. 65. Section 45-469, Arizona Revised Statutes, is amended to read:

START_STATUTE45-469. Right to retire irrigation grandfathered right for non‑irrigation use; development plan approval; amendment of plan; approval of plan prior to retirement; amount withdrawn; service area determined; restoration of retired irrigation grandfathered right

A. Except as provided in section 45‑480, subsection F and subsection P of this section, except as provided in subsection I of this section, a person who owns land which that is legally entitled to be irrigated with groundwater pursuant to an irrigation grandfathered right and which that is located within an active management area and outside of the exterior boundaries of the service area of a city, town or private water company has the right to retire such land from irrigation in anticipation of a future non‑irrigation use and shall not forfeit or abandon the right to withdraw from or receive for such land the amount of groundwater calculated pursuant to subsection F of this section for a non‑irrigation use if all of the following apply:

1. The land is held in the same ownership.

2. A development plan for the proposed non‑irrigation use exists and is approved by the director within a reasonable time before or after the land is retired.

3. Either one of the following applies:

(a) The land has never been designated by the director as protected farmland pursuant to section 45‑483, subsection A.

(b) The director designated the land as protected farmland pursuant to section 45‑483, subsection A, the director subsequently revoked the designation pursuant to section 45‑483, subsection C, paragraph 1 and the director determined at the time the designation was revoked that the agricultural or conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

B. Except as provided in subsection P of this section, the director shall approve the development plan required by subsection A of this section if it appears that the land:

1. Has been or will be retired for the bona fide purpose of conserving or using water for a non‑irrigation use which that would otherwise continue to be used for irrigation of such land.

2. Has not been sold or taken out of production primarily because it would have been uneconomical to continue to withdraw water for irrigation.

C. The director shall not investigate the legality, other than pursuant to this chapter, feasibility or other factors involved in the proposed development plan and shall not disapprove a development plan on such grounds.

D. A development plan may be amended and the director shall approve amendments if the criteria of this section are met.

E. A person proposing to retire irrigated land which that is located inside or outside of an active management area may apply to the director for approval of a proposed development plan prior to the retirement of such land.

F. The amount of groundwater which that may be withdrawn or received annually per acre pursuant to this section is the lesser of:

1. The current maximum amount of groundwater which that may be used pursuant to the irrigation grandfathered right for the acre at the time it is retired, as calculated pursuant to section 45‑465, subsection B.

2. Three acre‑feet multiplied by the water duty acres in the farm in which the acre to which the right is appurtenant is located divided by the number of irrigation acres in the farm.

G. The right to withdraw or receive groundwater pursuant to this section is a non‑irrigation grandfathered right associated with retired irrigated land, or a type 1 non‑irrigation grandfathered right as described in section 45‑463.

H. Whether the land to which an irrigation grandfathered right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company shall be determined as of the date the development plan is filed with the director.

I. A city or town in an initial active management area that holds a certificate of irrigation grandfathered right for acres of land that were acquired before January 1, 1989 in another initial active management area, and a groundwater replenishment district established under title 48, chapter 27 that purchases any of that land from the city or town, has the right, subject to subsections J, K, L and M of this section, to retire the land in anticipation of a future non‑irrigation use and withdraw from any location on the land groundwater for non‑irrigation use on the land or for transportation to another initial active management area for the purpose of demonstrating and providing an assured water supply if all of the following apply:

1. Before January 1, 1989, the city or town filed with the director a development plan pursuant to this section for all or a portion of the land.

2. Any withdrawals pursuant to this subsection from a new well, as defined in section 45‑591, will comply with the rules adopted pursuant to section 45‑598, subsection A to prevent unreasonably increasing damage to surrounding land or other water users from the concentration of wells.

3. Any withdrawals for transportation to another initial active management area for the purpose of demonstrating and providing an assured water supply are made from a depth to one thousand two hundred feet at the site or sites of the withdrawals, except that the wells may be drilled to any depth.

J. The amount of groundwater that may be withdrawn and used annually pursuant to subsection I of this section shall be determined pursuant to subsection F of this section. The maximum amount of such groundwater that may be included by the director in determining whether to designate or redesignate the city or town as having an assured water supply pursuant to section 45‑576 equals one hundred times the total amount that may be withdrawn annually from the land.

K. A city or town that is eligible for a type 1 non‑irrigation grandfathered right under subsection I of this section may:

1. Before retiring the land under subsection I of this section, substitute for the acres of land described in subsection I of this section the same number of acres owned by the city or town to which irrigation grandfathered rights are appurtenant and located in the same subbasin as the acres described in subsection I of this section.

2. At any time, elect to convert a type 1 non‑irrigation grandfathered right appurtenant to land in the same subbasin and acquired by the city or town before January 1, 1989 under subsection A of this section to a type 1 non‑irrigation grandfathered right under subsection I of this section.

L. In determining whether to designate or redesignate the city or town as having an assured water supply pursuant to section 45‑576, based in whole or in part on groundwater transported from the active management area under subsection I of this section, the director shall include the amount of groundwater that may be included under subsection J of this section and can be withdrawn from a depth to one thousand two hundred feet at the site or sites of the proposed withdrawals at a rate that, when added to the existing rate of withdrawals in the area, is not expected to cause the groundwater table at the site or sites of the proposed withdrawals to decline more than an average of ten feet per year during the one hundred year evaluation period.

M. In any designation or redesignation of an assured water supply pursuant to section 45‑576, the projected use of the groundwater that is demonstrated to be available for assured water supply purposes under subsection L of this section is deemed to be consistent with achieving the management goal for the active management area. In any such designation or redesignation, the director shall determine whether the projected use is consistent with the management plan for the active management area by determining whether the projected use is consistent with the management plan of the active management area in which the city or town to be designated or redesignated is located.

N. Subsections A, B and H of this section do not apply to type 1 non‑irrigation grandfathered rights acquired under subsection I of this section.

O. The director may restore retired irrigation grandfathered rights to land that was retired from irrigation under this section according to the following conditions and procedures:

1. Title to the retired land has reverted involuntarily, or voluntarily in lieu of foreclosure or forfeiture, from the person who retired it from irrigation, or a successor in title, to a previous owner.

2. The current owner of the retired land must apply to the director in writing stating:

(a) The history of the original retirement from irrigation under this section.

(b) The circumstances regarding the reversion of title to the current owner.

3. The director shall enter the application in the registry under section 45‑479 and review the application. An administrative hearing shall be held in the active management area in which the use is located on whether to restore the irrigation grandfathered rights to the land.

4. The director must find that restoring the irrigation grandfathered rights:

(a) Will not adversely impact the management of the active management area.

(b) Is necessary to prevent unreasonable hardship to the current owner of the retired land.

5. If the director decides to restore the retired irrigation grandfathered rights to the land:

(a) The retired irrigation land regains its original irrigation grandfathered rights, with the debits and credits in its flexibility account at the time of retirement.

(b) The type 1 non‑irrigation grandfathered right under this section is terminated.

P. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45‑576.02, subsection A, paragraph 1, the director shall withhold approval of a development plan that is submitted under this section by a person who seeks to obtain a non‑irrigation grandfathered right associated with retired irrigated land located in the district unless at the time the plan is submitted:

1. The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45‑576.03, subsection E, and the designation has not expired.

2. The master replenishment account, as established in section 45‑858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45‑576.01, subsection A, paragraph 3.

Q. Section 45‑114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. END_STATUTE

Sec. 66. Section 45-472, Arizona Revised Statutes, is amended to read:

START_STATUTE45-472. Conveyance of irrigation grandfathered right; within service area; outside service area; change to non‑irrigation grandfathered right; forfeiture of right to convey to non‑irrigation use; definition

A. The owner of an irrigation grandfathered right may convey the right only with the land to which the right is appurtenant.

B. If the land to which an irrigation grandfathered right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company:

1. The irrigation grandfathered right may be conveyed only for an irrigation use, except for expanded animal industry use or as provided in paragraphs 2 and 3 of this subsection. If an irrigation grandfathered right is conveyed for an irrigation or expanded animal industry use, the full amount of the right is conveyed. The amount of groundwater conveyed pursuant to the right:

(a) For an irrigation use may be withdrawn from the land to which the right is appurtenant or any other land and may be used only on the land to which the right is appurtenant or on contiguous irrigation acres under common ownership within the service area of the city, town or private water company subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. For purposes of this subdivision, irrigation acres which that are separated by a road, highway, easement or right‑of‑way from the land to which the irrigation grandfathered right is appurtenant are deemed to be contiguous.

(b) For an expanded animal industry use may be withdrawn by the new owner of the right only from the land to which the right is appurtenant and used on that land or on any other land, subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. If the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right. If any portion of the amount of groundwater conveyed is withdrawn by the new owner and used on other land, no additional groundwater may be withdrawn for use on the land to which the right is appurtenant.

2. The irrigation grandfathered right may be conveyed to an industry engaged in the generation of electrical energy for the purpose of electrical energy generation, except that, if the facility for the generation of electrical energy is not subject to title 40, chapter 2, article 6.2, the conveyance is subject to the approval of:

(a) The appropriate city or town, if the irrigation grandfathered right to be conveyed is appurtenant to land within the exterior boundaries of the service area of a city or town.

(b) The director, if the irrigation grandfathered right to be conveyed is appurtenant to land within the corporate limits of a city or town and within the exterior boundaries of the service area of a private water company.

3. If an irrigation grandfathered right is conveyed for a non‑irrigation use pursuant to paragraph 2 of this subsection, the amount of the right that is conveyed is the lesser of:

(a) The current maximum amount of groundwater which that may be used pursuant to the right, as calculated pursuant to section 45‑465, subsection B.

(b) Three acre‑feet per year multiplied by the number of water duty acres in the farm in which the acre to which the right is appurtenant is located divided by the number of irrigation acres in the farm.

4. The new owner of an irrigation grandfathered right conveyed pursuant to paragraph 2 of this subsection may withdraw the amount of groundwater conveyed pursuant to that right, as determined in paragraph 3 of this subsection, only from the land to which the right is appurtenant and use the groundwater on that land, but may not use the groundwater on other land, except that, if the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right for use on the land to which the right is appurtenant.

5. All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

C. If the land to which an irrigation grandfathered right is appurtenant is included within the exterior boundaries of the service area of a city, town or private water company subsequent to the date of the designation of an active management area, the owner of the right may, with the approval of the director and consistent with the provisions of this chapter, convey the grandfathered right for a non‑irrigation use, other than an expanded animal industry use, on the land to which the right is appurtenant, upon a showing that adequate water service is unavailable at rates comparable to rates charged similar classes of water users within such service area. The amount of the right conveyed is determined pursuant to subsection B, paragraph 3 of this section. All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

D. If the land to which an irrigation grandfathered right is appurtenant is outside of the exterior boundaries of the service area of a city, town or private water company:

1. The irrigation grandfathered right may be conveyed for an irrigation use or a non‑irrigation use. If an irrigation grandfathered right is conveyed for an irrigation or an expanded animal industry use, the full amount of the right is conveyed. If an irrigation grandfathered right is conveyed for a non‑irrigation use, other than an expanded animal industry use, the amount of the right that is conveyed is the lesser of:

(a) The current maximum amount of groundwater which that may be used pursuant to the right as calculated pursuant to section 45‑465, subsection B.

(b) Three acre‑feet per year multiplied by the number of water duty acres in the farm in which the acre to which the right is appurtenant is located and divided by the number of irrigation acres in the farm.

2. The amount of groundwater conveyed pursuant to the right for a non‑irrigation use, as determined in paragraph 1 of this subsection, may be withdrawn by the new owner of the right only from the land to which the right is appurtenant and used on that land or on any other land, subject to section 45‑473.01 and to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater, except that, if the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right. If any portion of the amount of groundwater conveyed is withdrawn by the new owner and used on other land, no additional groundwater may be withdrawn for use on the land to which the right is appurtenant, except that, if the new owner is an industry, it may withdraw a portion of the amount of groundwater conveyed for use on other land and withdraw the remainder of the amount of groundwater conveyed for municipal and industrial use on the land to which the right is appurtenant for purposes directly related to the industry's industrial operation.

3. The amount of groundwater conveyed pursuant to the right for an irrigation use, as determined in paragraph 1 of this subsection, may be withdrawn from the land to which the right is appurtenant or from any other land and may be used only on the land to which the right is appurtenant or on contiguous irrigation acres under common ownership, subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. For purposes of this paragraph, irrigation acres that are separated by a road, highway, easement or right‑of‑way from the land to which the irrigation grandfathered right is appurtenant are deemed to be contiguous.

4. All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

E. If an irrigation grandfathered right is conveyed for a non‑irrigation use, the new owner's right to withdraw or receive groundwater is a non‑irrigation grandfathered right associated with retired irrigated land, or a type 1 non‑irrigation grandfathered right. All subsequent conveyances of that right are governed by section 45‑473.

F. The amount of a type 1 non‑irrigation grandfathered right shall be determined at the time it is established and shall remain fixed at that amount.

G. An irrigation grandfathered right may not be conveyed for a non‑irrigation use if one of the following applies:

1. The irrigation grandfathered right has not been retired in anticipation of a future non‑irrigation use and has not been exercised for five consecutive years.

2. The land to which the irrigation grandfathered right is appurtenant was previously designated by the director as protected farmland pursuant to section 45‑483, subsection A. This paragraph shall not apply to land that was designated by the director as protected farmland if the director revoked the designation pursuant to section 45‑483, subsection C, paragraph 1 and the director determined at that time that the agricultural or conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

H. A person who owns a type 1 non‑irrigation grandfathered right under this section shall not withdraw or use groundwater pursuant to the portion of the type 1 non‑irrigation grandfathered right that is appurtenant to land which that the owner may irrigate with effluent pursuant to section 45‑452, subsection J.

I. For the purposes of this section, "land to which the right is appurtenant" means the acre or group of contiguous acres conveyed with an irrigation grandfathered right. END_STATUTE

Sec. 67. Section 45-483, Arizona Revised Statutes, is amended to read:

START_STATUTE45-483. Designation of protected farmland; notice; revocation of designation; irrigation water duty; assured water supply credit for extinguishment of irrigation grandfathered right prohibited

A. A person who owns land within an active management area that is legally entitled to be irrigated with groundwater pursuant to an irrigation grandfathered right may apply to the director for designation of the land as protected farmland. On receipt of an application, the director shall grant the application and designate the land identified in the application as protected farmland if the director determines that the land is subject to an agricultural easement established pursuant to title 3, chapter 18, article 1, or a conservation easement that prohibits the development of the land for nonagricultural uses pursuant to the federal farmland protection program established by Public Law 104‑127; (110 Stat. 888).

B. A person who owns land that has been designated by the director as protected farmland pursuant to subsection A of this section shall notify the director in writing if the agricultural or conservation easement in the land terminates. The notice shall be given within thirty days after the termination of the easement and shall specify the reason for the termination.

C. After the director designates land as protected farmland pursuant to subsection A of this section, the director shall revoke the designation if either of the following apply applies:

1. The agricultural or conservation easement in the land has terminated. If the director revokes a designation of protected farmland under this paragraph, the director shall determine at that time whether the agricultural or conservation easement terminated because a partial or full condemnation of the land made farming impracticable. The director shall give written notice of the revocation and of the director's determination of whether the easement terminated because a partial or full condemnation of the land made farming impracticable to the owner at the owner's last address on file with the department.

2. The owner of the land has requested the director to revoke the designation and the agricultural or conservation easement in the land has not terminated.

D. Notwithstanding any other law, if the director designates land as protected farmland pursuant to subsection A of this section, the irrigation water duty for the land shall be the irrigation water duty in effect for the land under the applicable management plan when the application for designation was filed, including any subsequent adjustments to that water duty as a result of an application for administrative review filed with the director pursuant to section 45‑575, subsection A. If the director revokes the designation of protected farmland pursuant to subsection C of this section, the irrigation water duty for the land shall be the irrigation water duty established for the land in the applicable management plan pursuant to section 45‑566, 45‑567 or 45‑568.

E. Notwithstanding any other law or rule, the director shall not establish or grant an assured water supply credit for the extinguishment of an irrigation grandfathered right under the rules adopted by the director pursuant to section 45‑576, subsection H if the land to which the irrigation grandfathered right is appurtenant was previously designated by the director as protected farmland pursuant to subsection A of this section. This subsection shall not apply to land that was designated by the director as protected farmland if the director revoked the designation pursuant to subsection C, paragraph 1 of this section and the director determined at that time that the agricultural or conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

F. Section 45‑114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. END_STATUTE

Sec. 68. Section 45-618, Arizona Revised Statutes, is amended to read:

START_STATUTE45-618. Arizona water quality fund

A. An Arizona water quality fund is established for agency participation in activities related to title 49, chapter 2, article 5 and coordination of data bases necessary for those activities. The director shall administer the fund.

B. The Arizona water quality fund ~~consist~~ consists of monies from legislative appropriations, grants, contributions and transfers from other public agencies.

C. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313 and monies earned from investment shall be credited to the fund.

D. Monies in the fund are exempt from lapsing under section 35-190.

E. Before December 31 of each year, the director shall submit to the speaker of the house of representatives, and the president of the senate ~~and the advisory board established by section 49-289.04~~ a written report describing the activities of the department for the preceding fiscal year relating to expenditures from the fund. The report shall include an accounting for expenditures from the fund and how the monies were used to perform duties in cooperation with the department of environmental quality pursuant to title 49, chapter 2, article 5. The report shall address the department of water ~~resources~~ resources' sharing and management of data with the department of environmental quality, well inspection activities conducted pursuant to this fund, measures to remediate wells pursuant to section 45‑605, duties performed pursuant to agreements with the department of environmental quality and the status of other departmental participation in water quality assurance revolving fund activities. END_STATUTE

Sec. 69. Section 49-202.01, Arizona Revised Statutes, is amended to read:

START_STATUTE49-202.01. Surface water quality general grazing permit; best management practices for grazing activities; definition

A. As part of the duties established pursuant to section 49‑203, subsection A, paragraph 3, the director shall implement a surface water quality general grazing permit consisting of voluntary best management practices for grazing activities. The implementation shall begin within one hundred eighty days after rule adoption by the agricultural best management practices advisory committee established pursuant to section 49‑248.

B. The terms and conditions of the surface water quality general grazing permit shall be voluntary best management practices which that have been determined by the committee to be the most practical and effective means of reducing or preventing the nonpoint source discharge of pollutants into navigable waters by grazing activities.

C. In adopting voluntary grazing best management practices, the committee shall consider:

1. The availability and effectiveness of alternative technologies.

2. The economic and social impacts of alternative technologies on grazing and associated industries.

3. The institutional considerations of alternative technologies.

4. The potential nature and severity of discharges from grazing activities and their effect on navigable waters.

D. For the purposes of this section, "grazing activities" means the feeding of all classes of domestic ruminant and nonruminant animals upon on grasses, forbs and shrubs in Arizona watersheds. END_STATUTE

Sec. 70. Section 49-247, Arizona Revised Statutes, is amended to read:

START_STATUTE49-247. Agricultural general permits; best management practices for regulated agricultural activities

A. The director shall adopt by rule, pursuant to the requirements of this section, agricultural general permits consisting of best management practices for regulated agricultural activities. Agricultural general permits are not subject to section 49‑245 or 49‑246. Except as provided in subsection G of this section, a person is not required to obtain an individual permit for a regulated agricultural activity.

B. The terms and conditions of agricultural general permits adopted pursuant to this section shall be agricultural best management practices which have been determined by the director to be the most practical and effective means of reducing or preventing the discharge of pollutants by regulated agricultural activities. Agricultural best management practices may vary within the state, according to regional and hydrogeologic conditions. The director may waive the use of best management practices in a designated region if the director determines that existing regulated agricultural activities will not cause or contribute to a violation of the adopted water quality standards.

C. The director shall adopt, by rule, agricultural best management practices, and in doing so shall consider any recommendation of the agricultural best management practices advisory committee established under section 49‑248.

D. In adopting agricultural best management practices, the director shall consider:

1. The availability, the effectiveness and the economic and institutional considerations of alternative technologies.

2. The potential nature and severity of discharges from regulated agricultural activities and their effect on public health and the environment.

E. In adopting best management practices for regulated agricultural activities, the director shall require the application of all economically feasible best management practices which have been determined by the director to be the most practical and effective means of reducing or preventing the discharge of pollutants by regulated agricultural activities but shall not require application of more stringent practices if such a requirement would result in cessation of the regulated activity.

F. Compliance with best management practices adopted pursuant to this section constitutes compliance with this article.

G. If the director, after providing a person with notice and an opportunity for a hearing, determines that the person has violated the applicable best management practices, the director may revoke the agricultural general permit for that person and require that the person obtain a permit pursuant to section 49‑241.

H. The director may periodically reexamine, evaluate and propose any modification to or waiver of agricultural best management practices necessary to meet the requirements of this article after considering any recommendation submitted by the advisory committee established under section 49‑248. END_STATUTE

Sec. 71. Repeal

Section 49-248, Arizona Revised Statutes, is repealed.

Sec. 72. Section 49-281, Arizona Revised Statutes, is amended to read:

START_STATUTE49-281. Definitions

In this article, unless the context otherwise requires:

1. "Applicant" means any individual, employee, officer, managing body, trust, firm, joint stock company, consortium, public or private corporation, including a government corporation, partnership or association, this state, a political subdivision of this state, or a commission of the United States government or a federal facility, an interstate body or any other entity that applies for a settlement under either section 49‑292.01 or 49‑292.02.

2. "Community" means the broad spectrum of persons determined by the director to be within an existing or proposed site placed on the registry pursuant to section 49‑287.01.

3. "Community involvement area" means the geographical area that is within a site placed on the registry pursuant to section 49‑287.01 and additional geographic areas as found appropriate in the director's discretion.

4. "Dispose" means the deposit, injection, dumping, spilling, leaking or placing of any pollutant into or on any land or water so that the pollutant or any constituent of the pollutant may enter the environment or be discharged into any waters, including aquifers.

5. "Eligible party" means a person who enters into a written agreement with the director to implement and complete a remedial investigation and feasibility study with respect to a site or portion of a site that was on the annual priority list on May 1, 1997 or any other person who incurs costs for a remedial action that is in substantial compliance with section 49‑282.06 as determined by the director.

6. "Facility" means any land, building, installation, structure, equipment, device, conveyance, area, source, activity or practice.

7. "Fund" means the water quality assurance revolving fund established by section 49‑282.

8. "Hazardous substance" has the same meaning prescribed in section 49‑201 but does not include petroleum as defined in section 49‑1001, except to the extent that a constituent of petroleum is subject to the provisions of section 49‑283.02.

9. "Nonrecoverable costs" means any costs incurred by the director after June 30, 1997:

(a) That consist of salaries and benefits paid to state employees, including direct and indirect costs, except as specifically provided in section 49‑282.05, section 49‑285, subsection B, section 49‑285.01, section 49‑287.01, section 49‑287.06, subsection H and section 49‑287.07 and for epidemiological studies conducted by the department of health services.

(b) For activities conducted pursuant to section 49‑287.02.

(d) For well inspections, but not other remedial actions, to determine whether vertical cross-contamination is resulting from a well pursuant to section 45-605 or 49‑282.04.

~~(e) For the advisory board established by section 49‑289.04.~~

~~(f)~~ (e) For ~~rule making~~ rulemaking.

10. "Orphan shares" means the shares of the cost of a remedial action that are allocated to an identified person who is determined to be a responsible party and that are not paid or otherwise satisfied by that responsible party due to any of the following:

(a) The party cannot be located or no longer exists.

(b) The party has entered into a qualified business settlement pursuant to this article.

(c) The party has entered into a settlement pursuant to this article for an amount that is less than its allocated share.

(d) The director has determined that the share allocated to the party is uncollectible.

11. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment but excludes:

(a) Any release ~~which~~ that results in exposure to persons solely within a workplace, with respect to a claim ~~which~~ that such persons may assert against the employer of such persons.

(b) Emissions from the engine exhaust of any motor vehicle, rolling stock, aircraft, vessel or pipeline pumping station engine.

(c) Release of source, by-product or special nuclear material, as those terms are defined in section 30-651, resulting from the operation of a production or utilization facility as defined in the atomic energy act of 1954 (68 Stat. 919; 42 United States Code sections 2011 through 2297), which is subject to the regulatory authority of the United States nuclear regulatory commission as specified in that act, and the agreement, dated March 30, 1967, entered into between the governor of this state and the United States atomic energy commission pursuant to section 30-656 and section 274 of the atomic energy act of 1954, as amended.

(d) The normal application of fertilizer.

12. "Remedial actions" means those actions that are reasonable, necessary, cost-effective and technically feasible in the event of the release or threat of release of hazardous substances into the environment, such actions as may be necessary to investigate, monitor, assess and evaluate such release or threat of release, actions of remediation, removal or disposal of hazardous substances or taking such other actions as may be necessary to prevent, minimize or mitigate damage to the public health or welfare or to the environment ~~which~~ that may otherwise result from a release or threat of release of a hazardous substance. Remedial actions include the use of biostimulation with indigenous microbes and bioaugmentation using microbes that are nonpathogenic, that are nonopportunistic and that are naturally occurring. Remedial actions may include community information and participation costs and providing an alternative drinking water supply.

13. "Remedy" means a remedial action selected in a record of decision issued pursuant to section 49‑287.04.

14. "Site" means the geographical areal extent of contamination.

15. "Vertical cross-contamination" means the vertical migration of released hazardous substances in groundwater through a well from an aquifer or aquifer layer to another aquifer or aquifer layer.END_STATUTE

Sec. 73. Section 49-282, Arizona Revised Statutes, is amended to read:

START_STATUTE49-282. Water quality assurance revolving fund

A. A water quality assurance revolving fund is established to be administered by the director. The fund consists of monies from the following sources:

1. Monies appropriated by the legislature.

2. Fertilizer license fees allocated under section 3‑272, subsection B, paragraph 2.

3. Pesticide registration fees allocated under section 3‑351, subsection D, paragraph 2.

4. The tax on water use pursuant to section 42‑5302.

5. Water quality assurance fees collected under section 45‑616.

6. Industrial discharge registration fees collected under section 49‑209.

7. Manifest resubmittal fees collected under section 49‑922.01.

8. Hazardous waste facility registration fees collected under section 49‑929.

9. Hazardous waste resource recovery facility registration fees collected under section 49‑930.

10. Monies recovered from responsible parties as remedial action costs.

11. Monies received as costs for a review of remedial actions at the request of a person other than the state.

12. Monies received from the collection of corporate income taxes under title 43, chapter 11, article 2 as prescribed by subsection B of this section.

13. Prospective purchaser agreement fees collected under section 49‑285.01.

B. The water quality assurance revolving fund shall be assured of an annual funding amount of eighteen million dollars. ~~Beginning July 1, 1999, as soon as practicable~~ At the beginning of each fiscal year, the state treasurer shall transfer the sum of fifteen million dollars to the water quality assurance revolving fund from the corporate income tax as collected pursuant to title 43, chapter 11, article 2. As custodian of the fund, the director shall certify to the governor, the state treasurer, the president of the senate and the speaker of the house of representatives at the end of that fiscal year the amount of monies deposited in the water quality assurance revolving fund pursuant to subsection A, paragraphs 1 through 9 of this section. At the end of the fiscal year the state treasurer shall adjust the fifteen million dollar transfer of corporate income tax so that, when combined with monies deposited in the fund during that fiscal year pursuant to subsection A, paragraphs 1 through 9 of this section, the fund receives eighteen million dollars each fiscal year. This adjustment shall occur as part of the year‑end book closing process for that fiscal year. If sufficient monies from the corporate income tax are not available to make any necessary upward adjustments as part of the year‑end book closing, the state treasurer shall transfer the monies necessary to achieve the eighteen million dollar funding level from the transaction privilege and severance tax clearing account pursuant to section 42‑5029, subsection D, paragraph 4, to the water quality assurance revolving fund. Any transfers prescribed by this subsection shall not be deducted from the net proceeds distributed pursuant to section 43‑206.

C. At the beginning of each fiscal year, the director of environmental quality shall contract with the department of water resources for the transfer of up to eight hundred thousand dollars from the water quality assurance revolving fund to the Arizona water quality fund established by section 45‑618 for support services for the water quality assurance revolving fund program. The support services provided for the water quality assurance revolving fund program shall be determined by the director of water resources in consultation with the director of environmental quality.

D. Monies in the fund are exempt from lapsing under section 35‑190. Interest earned on monies in the fund shall be credited to the fund.

E. Monies from the water quality assurance revolving fund shall be used for the following purposes:

1. To provide state matching monies or to meet such other obligations as are prescribed by section 104 of CERCLA.

2. For all reasonable and necessary costs to implement this article, including:

(a) Taking remedial actions.

(b) Conducting investigations of an area to determine if a release or a threatened release of a hazardous substance exists.

(d) Identifying and investigating potentially responsible parties and allocating liability among the responsible parties.

(e) Funding orphan shares.

(f) Participating in the allocation process, administrative appeals and court actions.

(g) Funding the community advisory boards and other community involvement activities ~~and the water quality assurance revolving fund advisory board~~.

(h) Remediating pollutants if necessary to remediate a hazardous substance.

3. For the reasonable and necessary costs of monitoring, assessing, identifying, locating and evaluating the degradation, destruction, loss of or threat to the waters of the state resulting from a release of a hazardous substance to the environment.

4. For the reasonable and necessary costs of administering the fund.

5. For the reasonable and necessary costs of administering the industrial discharge registration program under section 49‑209.

6. For the costs of the water quality monitoring program described in section 49‑225.

7. For compliance monitoring, investigation and enforcement activities pertaining to generating, transporting, treating, storing and disposing of hazardous waste. The amount to be used pursuant to chapter 5 of this title is limited to the amount received in the prior fiscal year from the hazardous waste facility registration fee.

8. For emergency response use as prescribed in section 49‑282.02.

9. For all reasonable and necessary costs of the preparation and execution of prospective purchaser agreements.

10. For all reasonable and necessary costs of the voluntary remediation program.

11. To reimburse a political subdivision of this state for its reasonable, necessary and cost‑effective remedial action costs incurred in response to a release or threat of a release of a hazardous substance or pollutants that presents an immediate and substantial endangerment to the public health or the environment. The political subdivision is not eligible for reimbursement until it has taken all reasonable efforts to obtain reimbursement from the responsible party and the federal government. No more than two hundred fifty thousand dollars may be spent from the fund for this purpose in any fiscal year.

12. For all reasonable and necessary costs incurred by the department pursuant to section 49‑282.04 and the department of water resources pursuant to section 45‑605 for well inspections, remedial actions and review and approval of well construction necessary to prevent vertical cross‑contamination. The director of environmental quality and the director of water resources shall enter into an agreement for the transfer of these costs.

13. For actions that are taken pursuant to section 49‑282.03 before the selection of a remedy.

14. For the reasonable and necessary costs of the conveyance, use or discharge of water remediated as part of a remedy under this article.

15. For the reasonable and necessary costs incurred by the department of health services at the request of the director of environmental quality to assess and evaluate the effect of a release or threatened release of hazardous substances to the public health or welfare and the environment. The director of environmental quality and the director of the department of health services shall enter into an agreement for the transfer of these costs. The assessment and evaluation by the department of health services may include:

(a) Performing health effect studies and risk assessments.

(b) Evaluating and calculating cleanup standards.

16. For the reasonable and necessary costs incurred by the department of law to provide legal services at the request of the director of environmental quality.

17. For the reasonable and necessary costs of contracting for the goods and services to enable the director to implement this article.

18. For remediation demonstration projects that use bioremediation or other alternative technologies. The department may not use more than five hundred thousand dollars in a fiscal year pursuant to this paragraph.

F. Any political subdivision of this state ~~which~~ that uses, used or may use waters of the state for drinking water purposes or any state agency, regardless of whether the political subdivision or state agency is a responsible party, may apply to the director for monies from the fund to be used for remedial action. An application to the fund for remedial action costs shall not be treated as an admission that a political subdivision or an agency of the state is a responsible party, but a political subdivision or a state agency that is a responsible party is liable for remedial action costs in the same manner, including reimbursement of the fund, as any other responsible party. The political subdivision shall commit a local matching amount at least equal to the amount sought from the fund.

G. The director of environmental quality shall prepare and submit a budget for the water quality assurance revolving fund program and the director of water resources shall prepare and submit a budget for the Arizona water quality fund with the departments' budgets that are required pursuant to section 35‑111. The committees on appropriations of the house of representatives and the senate shall review the water quality assurance revolving fund budget and the Arizona water quality fund budget to ensure that the departments' expenditures are made in accordance with the legislature's intent and that the departments are making adequate progress toward accomplishing that intent. END_STATUTE

Sec. 74. Repeal

Sections 49-289.04 and 49-289.05, Arizona Revised Statutes, are repealed.