SB1089 - 531R

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

Section 1. Section 5-554, Arizona Revised Statutes, is amended to read:

START_STATUTE5-554. Commission; director; powers and duties; definitions

A. The commission shall meet with the director not less than once each quarter to make recommendations and set policy, receive reports from the director and transact other business properly brought before the commission.

B. The commission shall oversee a state lottery to produce the maximum amount of net revenue consonant with the dignity of the state. To achieve these ends, the commission shall authorize the director to adopt rules in accordance with title 41, chapter 6. Rules adopted by the director may include provisions relating to the following:

1. Subject to the approval of the commission, the types of lottery games and the types of game play‑styles to be conducted.

2. The method of selecting the winning tickets or shares for noncomputerized online games, except that no method may be used that, in whole or in part, depends on the results of a dog race, a horse race or any sporting event.

3. The manner of payment of prizes to the holders of winning tickets or shares, including providing for payment by the purchase of annuities in the case of prizes payable in installments, except that the commission staff shall examine claims and may not pay any prize based on altered, stolen or counterfeit tickets or based on any tickets that fail to meet established validation requirements, including rules stated on the ticket or in the published game rules, and confidential validation tests applied consistently by the commission staff. No particular prize in a lottery game may be paid more than once, and in the event of a binding determination that more than one person is entitled to a particular prize, the sole remedy of the claimants is the award to each of them of an equal portion of the single prize.

4. The method to be used in selling tickets or shares, except that no elected official's name may be printed on such tickets or shares. The overall estimated odds of winning some prize or some cash prize, as appropriate, in a given game shall be printed on each ticket or share.

5. The licensing of agents to sell tickets or shares, except that a person who is under eighteen years of age shall not be licensed as an agent.

6. The manner and amount of compensation to be paid licensed sales agents necessary to provide for the adequate availability of tickets or shares to prospective buyers and for the convenience of the public, including provision for variable compensation based on sales volume.

7. Matters necessary or desirable for the efficient and economical operation and administration of the lottery and for the convenience of the purchasers of tickets or shares and the holders of winning tickets or shares.

C. The commission shall authorize the director to issue orders and shall approve orders issued by the director for the necessary operation of the lottery. Orders issued under this subsection may include provisions relating to the following:

1. The prices of tickets or shares in lottery games.

2. The themes, game play‑styles, and names of lottery games and definitions of symbols and other characters used in lottery games, except that each ticket or share in a lottery game shall bear a unique distinguishable serial number.

3. The sale of tickets or shares at a discount for promotional purposes.

4. The prize structure of lottery games, including the number and size of prizes available. Available prizes may include free tickets in lottery games and merchandise prizes.

5. The frequency of drawings, if any, or other selections of winning tickets or shares, except that:

(a) All drawings shall be open to the public.

(b) The actual selection of winning tickets or shares may not be performed by an employee or member of the commission.

6. Requirements for eligibility for participation in grand drawings or other runoff drawings, including requirements for the submission of evidence of eligibility within a shorter period than that provided for claims by section 5‑568.

7. Incentive and bonus programs designed to increase sales of lottery tickets or shares and to produce the maximum amount of net revenue for this state.

8. The method used for the validation of a ticket, which may be by physical or electronic presentation of a ticket.

D. Notwithstanding title 41, chapter 6 and subsection B of this section, the director, subject to the approval of the commission, may establish a policy, procedure or practice that relates to an existing online game or a new online game that is the same type and has the same type of game play‑style as an online game currently being conducted by the lottery or may modify an existing rule for an existing online game or a new online game that is the same type and has the same type of game play‑style as an online game currently being conducted by the lottery, including establishing or modifying the matrix for an online game by giving notice of the establishment or modification at least thirty days before the effective date of the establishment or modification.

E. The commission shall maintain and make the following information available for public inspection at its offices during regular business hours:

1. A detailed listing of the estimated number of prizes of each particular denomination expected to be awarded in any instant game currently on sale.

2. After the end of the claim period prescribed by section 5‑568, a listing of the total number of tickets or shares sold and the number of prizes of each particular denomination awarded in each lottery game.

3. Definitions of all play symbols and other characters used in each lottery game and instructions on how to play and how to win each lottery game.

F. Any information that is maintained by the commission and that would assist a person in locating or identifying a winning ticket or share or that would otherwise compromise the integrity of any lottery game is deemed confidential and is not subject to public inspection.

G. The commission, in addition to other games authorized by this article, may establish multistate lottery games to be conducted concurrently with other lottery games authorized under subsection B of this section. The monies for prizes, for operating expenses and for payment to the local transportation assistance fund established by section 28‑8101 and the state general fund shall be accounted for separately as nearly as practicable in the lottery commission's general accounting system. The monies shall be derived from the revenues of multistate lottery games.

H. The commission, in addition to other games authorized by this article, shall establish special instant ticket games with play areas protected by paper tabs designated for use by charitable organizations. The monies for prizes and for operating expenses shall be accounted for separately as nearly as practicable in the lottery commission's general accounting system. Monies saved from the revenues of the special games, by reason of operating efficiencies, shall become other revenue of the lottery commission and revert to the state general fund, except that the commission shall transfer the proceeds from any games that are sold from a vending machine in an age-restricted area to the state treasurer for deposit in the following amounts:

1. Nine hundred thousand dollars each fiscal year in the internet crimes against children enforcement fund established by section 41‑199.

2. One hundred thousand dollars each fiscal year in the victims' rights enforcement fund established by section 41‑1727.

3. Any monies in excess of the amounts listed in paragraphs 1 and 2 of this subsection, in the state lottery fund established by section 5‑571.

I. The commission or director shall not establish or operate any online or electronic keno game or any game played on the internet.

J. The commission or director shall not establish or operate any lottery game or any type of game play‑style, either individually or in combination, that uses gaming devices or video lottery terminals as those terms are used in section 5‑601.02, including monitor games that produce or display outcomes or results more than once per hour.

K. The director shall print, in a prominent location on each lottery ticket or share, a statement that help is available if a person has a problem with gambling and a toll-free telephone number where problem gambling assistance is available. The director shall require all licensed agents to post a sign with the statement that help is available if a person has a problem with gambling and the toll-free telephone number at the point of sale as prescribed and supplied by the director. The requirements of this subsection apply to tickets and shares printed after July 18, 2000.

L. For the purposes of this section:

1. "Charitable organization" means any nonprofit organization, including not more than one auxiliary of that organization, that has operated for charitable purposes in this state for at least two years before submitting a license application under this article.

2. "Game play‑style" means the process or procedure that a player must follow to determine if a lottery ticket or share is a winning ticket or share.

3. "Matrix" means the odds of winning a prize and the prize payout amounts in a given game. END_STATUTE

Sec. 2. Section 5-572, Arizona Revised Statutes, is amended to read:

START_STATUTE5-572. Use of monies in state lottery fund; report

A. If there are any bonds or bond related obligations payable from the state lottery revenue bond debt service fund, the state lottery revenue bond debt service fund shall be secured by a first lien on the monies in the state lottery fund after the payment of operating costs of the lottery, as prescribed in section 5‑555, subsection A, paragraph 1, until the state lottery bond debt service fund contains sufficient monies to meet all the requirements for the current period as required by the bond documents. Debt service for revenue bonds issued pursuant to this chapter shall be paid first from monies that would have otherwise been deposited pursuant to this section in the state general fund. After the requirements for the current period have been satisfied as required by the bond documents, the monies in the state lottery fund shall be expended for the expenses of the commission incurred in carrying out its powers and duties and in the operation of the lottery.

B. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsection A of this section, ten million dollars shall be deposited in the Arizona game and fish commission heritage fund established by section 17‑297.

C. Except as provided in subsection G of this section, state lottery fund monies shall be used to reimburse the state general fund for payment of eighteen million dollars to the local transportation assistance fund established by section 28‑8101 each fiscal year. Eighteen million dollars shall be transferred from the state general fund to the local transportation assistance fund established by section 28-8101 at the beginning of each fiscal year.

D. Of the monies remaining in the state lottery fund after the appropriations authorized in subsections A, B and C of this section, up to a maximum of twenty-three million dollars each fiscal year shall be deposited in the state general fund to be used to offset reimbursements to the local transportation assistance fund established by section 28‑8101 and up to a maximum of seven million six hundred fifty thousand dollars each fiscal year shall be deposited in the state general fund to be used to offset reimbursements to the county assistance fund established by section 41‑175. Monies distributed pursuant to this subsection shall be in addition to monies distributed pursuant to subsection C of this section. Monies equivalent to the amount of state lottery fund monies specified pursuant to this subsection shall be transferred from the state general fund to the local transportation assistance fund established by section 28-8101 and the county assistance fund established by section 41‑175 at the beginning of each fiscal year.

E. Notwithstanding subsection D of this section, if the director determines at the beginning of any fiscal year that monies available in the state general fund to be used to offset reimbursements to cities, towns and counties under this section might not equal thirty million six hundred fifty thousand dollars, the director may not authorize deposits to the state general fund to be used to offset reimbursements to the county assistance fund established by section 41-175 until the deposits to the state general fund to be used to offset reimbursements to the local transportation assistance fund established by section 28-8101 equal twenty-three million dollars. Monies equivalent to the amount of state lottery fund monies specified pursuant to this subsection shall be transferred from the state general fund to the other fund or funds specified in this subsection at the beginning of each fiscal year.

C. F. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A, and B, C, D and E of this section, and appropriations and deposits authorized by this section to the state general fund to be used to offset reimbursements to the local transportation assistance fund established by section 28-8101, ten million dollars shall be deposited in the Arizona state parks board heritage fund established by section 41‑502, five million dollars shall be allocated to the department of child safety for the healthy families program established by section 8‑481, four million dollars shall be allocated to the Arizona board of regents for the Arizona area health education system established by section 15‑1643, three million dollars shall be allocated to the department of health services to fund the teenage pregnancy prevention programs established in Laws 1995, chapter 190, sections 2 and 3, two million dollars shall be allocated to the department of health services for the health start program established by section 36‑697, two million dollars shall be deposited in the disease control research fund established by section 36‑274 and one million dollars shall be allocated to the department of health services for the federal women, infants and children food program. The allocations in this subsection shall be adjusted annually according to changes in the GDP price deflator as defined in section 41‑563 and the allocations are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. If there are not sufficient monies available pursuant to this subsection, the allocation of monies for each program shall be reduced on a pro rata basis.

D. G. Notwithstanding subsection C of this section, if the state lottery director determines that monies available to the state general fund may might not equal eighty‑four million one hundred fifty thousand thirty‑one million dollars in a fiscal year, the director shall not authorize deposits to the Arizona game and fish commission heritage state GENERAL fund to be used to offset reimbursements to the local transportation assistance fund pursuant to subsection B of this section established by section 28-8101 until the deposits to the state general fund equal eighty‑four million one hundred fifty thousand thirty‑one million dollars in a fiscal year. Monies equivalent to the amount of state lottery fund monies specified pursuant to this subsection shall be transferred from the state general fund to the other fund or funds specified in this subsection at the beginning of each fiscal year.

E. H. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through D G of this section, one million dollars or the remaining balance in the fund, whichever is less, is appropriated to the department of economic security for grants to nonprofit organizations, including faith based organizations, for homeless emergency and transitional shelters and related support services. The department of economic security shall submit a report on the amounts, recipients, purposes and results of each grant to the governor, the speaker of the house of representatives and the president of the senate on or before December 31 of each year for the prior fiscal year and shall provide a copy of this report to the secretary of state.

F. I. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through E H of this section, and after a total of at least ninety‑nine million six hundred forty thousand forty‑six million four hundred ninety thousand dollars has been deposited in the state general fund, three million five hundred thousand dollars shall be deposited in the Arizona competes fund established by section 41‑1545.01. The balance in the state lottery fund remaining after deposits into the Arizona competes fund established by section 41-1545.01 shall be deposited in the university capital improvement lease‑to-own and bond fund established by section 15‑1682.03, up to a maximum of eighty percent of the total annual payments of lease-to-own and bond agreements entered into by the Arizona board of regents.

G. J. All monies remaining in the state lottery fund after the appropriations and deposits authorized in this section shall be deposited in the state general fund.

H. K. Except for monies expended for debt service of revenue bonds as provided in subsection A of this section, monies expended under subsection A of this section are subject to legislative appropriation.

I. L. The commission shall transfer monies prescribed in this section on a quarterly basis. END_STATUTE

Sec. 3. Section 9-626, Arizona Revised Statutes, is amended to read:

START_STATUTE9-626. Construction progress reports; auditor general performance measures

A. The eligible city shall report progress on the development of any eligible project to the joint committee on capital review twice annually during construction of the eligible project.

B. Within five years after the filing of the certificate of completion of construction of an eligible project pursuant to section 9‑622, and after consultation with the eligible city, the auditor general shall conduct or contract for an economic and fiscal impact analysis of the eligible project in its fifth year of operation following the filing of the certificate of completion of construction. At a minimum, the analysis shall:

1. Estimate the effects of direct, indirect and induced economic activity in this state associated with:

(a) Regional and national conventions and trade shows held at the site of the eligible project, the total amount of state general fund revenues derived from that economic activity and the estimated average annual attendance at those events assuming:

(i) The eligible project had not been completed.

(ii) The eligible project has been completed.

(b) The construction of the eligible project and the total amount of state general fund revenues derived from the construction activity.

2. Compute the total cumulative amount of distributions pursuant to section 9‑602 for the first through fifth years following the filing of the certificate of completion of construction for the eligible project pursuant to section 9‑622 and from the first through each subsequent fifth year.

3. Compute the net cumulative distributions for the eligible project by subtracting the amount determined pursuant to paragraph 1, subdivision (b) of this subsection from either the amounts determined pursuant to paragraph 2 of this subsection or, if applicable, the amount of state monies paid under a lease purchase agreement pursuant to section 41‑791.04.

4. Based on the analysis conducted pursuant to this subsection, estimate the minimum required attendance at the eligible project for the fifth year following the filing of the certificate of completion of construction of an eligible project pursuant to section 9‑622 and each year thereafter. The estimates shall be computed as follows:

(a) Divide the total state general fund revenues estimated pursuant to paragraph 1, subdivision (a), item (ii) of this subsection by the attendance estimated pursuant to paragraph 1, subdivision (a), item (ii) of this subsection.

(b) Divide the net cumulative distribution amounts for the fifth year following the filing of the certificate of completion of construction of an eligible project pursuant to section 9‑622 and each year thereafter computed pursuant to paragraph 3 of this subsection by the quotient computed pursuant to subdivision (a) of this paragraph.

(c) Add the average annual attendance estimated pursuant to paragraph 1, subdivision (a), item (i) of this subsection to each of the quotients determined pursuant to subdivision (b) of this paragraph. The resulting sums are the minimum required attendance amounts for each year.

C. Beginning in the fifth calendar year following the filing of the certificate of completion of construction of an eligible project pursuant to section 9‑622 and each year thereafter, the auditor general shall:

1. Estimate the average annual attendance at regional and national conventions and trade shows held at the site of the eligible project using any appropriate method to estimate the attendance. The eligible city shall cooperate with and assist the auditor general in developing the estimates.

2. Compute the ratio of the cumulative sum of the estimated attendance amounts developed pursuant to paragraph 1 of this subsection for all years through the current year to the cumulative sum of the minimum required attendance amounts for those years computed pursuant to subsection B, paragraph 4, subdivision (c) of this section.

3. Notify the president of the senate, the speaker of the house of representatives and the governor of:

(a) The minimum required attendance amounts for those years computed pursuant to subsection B, paragraph 4, subdivision (c) of this section.

(b) The attendance estimate developed pursuant to paragraph 1 of this subsection.

D. Except as provided in paragraph 4 of this subsection, if the ratio computed pursuant to subsection C, paragraph 2 of this section is less than one:

1. The auditor general shall compute the difference between the estimated state general fund revenues and the net cumulative distributions by multiplying the net cumulative distributions computed pursuant to subsection B, paragraph 3 of this section by the difference between the ratio computed pursuant to subsection C, paragraph 2 of this section and one.

2. The auditor general shall notify the state treasurer of:

(a) The ratio computed pursuant to subsection C, paragraph 2 of this section.

(b) The difference computed pursuant to paragraph 1 of this subsection.

3. At the time of the next regularly scheduled distribution, the state treasurer shall withhold from the amount that would otherwise be distributed to the eligible city from the local transportation assistance fund established by section 28-8101 pursuant to section 42‑5029 28‑8102 an amount equal to the amount stated in the notice received pursuant to paragraph 2 of this subsection. If the amount available for distribution is less than the amount to be withheld, the state treasurer shall continue withholding from subsequent distributions until the full amount stated in the notice has been withheld.

4. The eligible city may request and the auditor general shall conduct or contract for a complete economic and fiscal impact analysis of the eligible project. If an analysis is requested:

(a) The auditor general shall not notify the state treasurer pursuant to paragraph 2 of this subsection, and the state treasurer shall not withhold pursuant to paragraph 3 of this subsection, pending completion of the analysis.

(b) The analysis shall be similar to the analysis described in subsection B of this section, except that the analysis shall examine the operations of the eligible project in the year for which the ratio is less than one.

(c) The analysis, at a minimum, shall estimate the total cumulative incremental revenues to the state general fund resulting from the completion of the eligible project including the revenues resulting from the construction activity associated with the completion of the eligible project.

(d) And the analysis demonstrates that the total cumulative incremental revenues to the state general fund exceed the total cumulative amount of distributions pursuant to section 9‑602 as computed in subsection B, paragraph 3 of this section, the auditor general shall not notify the state treasurer pursuant to paragraph 2 of this subsection and the state treasurer shall not withhold pursuant to paragraph 3 of this subsection.

(e) And the analysis demonstrates that the total cumulative incremental revenues to the state general fund are less than the total cumulative amount of distributions pursuant to section 9‑602 as computed in subsection B, paragraph 3 of this section:

(i) The auditor general shall subtract the amount of the total cumulative incremental revenues to the state general fund from the amount of the total cumulative distributions.

(ii) The auditor general shall notify the state treasurer of the difference computed pursuant to item (i) of this subdivision.

(iii) At the time of the next regularly scheduled distribution, the state treasurer shall withhold from the amount that would otherwise be distributed to the eligible city pursuant to section 42‑5029 an amount equal to the amount stated in the notice received pursuant to item (ii) of this subdivision. If the amount available for distribution is less than the amount to be withheld, the state treasurer shall continue withholding from subsequent distributions until the full amount stated in the notice has been withheld.

E. The eligible city shall reimburse the auditor general for any costs incurred in complying with the requirements of this section. END_STATUTE

Sec. 4. Section 15-1682.03, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1682.03. University capital improvement lease-to-own and bond fund; lease-to-own and bond capital improvement agreements

A. The university capital improvement lease-to-own and bond fund is established consisting of the monies provided by the Arizona board of regents pursuant to this section, monies deposited pursuant to section 5‑572 and monies appropriated by the legislature. The board shall administer the fund. On notice from the 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. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

B. Through revenues of the state university system, the board shall annually provide monies to the fund of at least twenty per cent percent of the aggregate annual payments of lease-to-own and bond agreements entered into by the board pursuant to this section.

C. The board shall distribute monies in the fund to make payments pursuant to lease-to-own and bond agreements entered into by the board pursuant to this section. The board may enter into lease-to-own and bond agreements for the purposes of building renewal projects and new facilities. New lease-to-own and bond agreements entered into pursuant to this section shall not exceed one hundred sixty‑seven million six hundred seventy‑one thousand two hundred dollars in fiscal year 2008‑2009 and four hundred million dollars in fiscal year 2009‑2010. The board may enter into lease‑to‑own and bond transactions up to a maximum of eight hundred million dollars.

D. Notwithstanding section 5‑572, subsection G I, the amount of state lottery revenues distributed to the university capital improvement lease‑to‑own and bond fund in fiscal year 2009‑2010 and fiscal year 2010‑2011 shall not exceed an amount sufficient for up to eighty per cent percent of the annual payments of the first one hundred sixty-seven million six hundred seventy-one thousand two hundred dollars of new lease‑to-own and bond agreements entered into pursuant to this section. The full amount of state lottery revenues distributed to the university capital improvement lease‑to‑own and bond fund pursuant to section 5‑572, subsection G I shall be made available to the board for the remaining new lease-to-own and bond agreements up to eight hundred million dollars beginning in fiscal year 2011‑2012.

E. In entering into lease-to-own and bond agreements pursuant to this section, the board shall not obligate this state to provide any additional monies from the state lottery fund above the amounts authorized in this section and section 5‑572, subsection G I. In entering into lease-to-own and bond agreements pursuant to this section, the board shall not obligate any state general fund monies. END_STATUTE

Sec. 5. Section 28-6543, Arizona Revised Statutes, is amended to read:

START_STATUTE28-6543. Local revenues; requirements

A. Each fiscal year a county with a population of more than four hundred thousand persons or an incorporated city or town with a population of more than thirty thousand persons that is located in such a that county shall:

1. Budget and spend local revenues as defined in article IX, section 20, Constitution of Arizona, for street and highway purposes in an amount at least equal to the average amount of local revenues budgeted and spent for these purposes in any four of the five fiscal years during the period beginning with fiscal year 1981‑1982 and ending with fiscal year 1985‑1986.

2. Through its chief financial officer, certify in writing to the department whether or not the county, city or town has complied with the requirements of paragraph 1 of this subsection.

3. File the certification on or before December 31 after the completion of each June 30 of the following fiscal year.

B. Failure to certify as required by subsection A, paragraph 2 of this section is a failure to comply with subsection A, paragraph 1 of this section.

C. In determining the amount of local revenues budgeted and spent for street and highway purposes during a fiscal year pursuant to subsection A of this section, a county or incorporated city or town shall not consider any of the following:

1. Monies distributed from the Arizona highway user revenue fund.

2. Monies distributed from the local transportation assistance fund established by section 28‑8101.

2. 3. Monies spent by the county or incorporated city or town for street and highway purposes directly needed by an emergency declared by the governor. END_STATUTE

Sec. 6. Title 28, chapter 24, Arizona Revised Statutes, is amended by adding article 1, to read:

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE28-8101. Local transportation assistance fund

A. The local transportation assistance fund is established consisting of:

1. Monies transferred from the state general fund pursuant to section 5‑572.

2. Monies appropriated pursuant to subsection B of this section.

3. Interest earned on local transportation assistance fund monies as provided in subsection C of this section.

B. The legislature shall appropriate an amount that is necessary to provide that the total monies available in the local transportation assistance fund for each fiscal year equal twenty million five hundred thousand dollars.

C. The state treasurer shall invest and divest monies in the local transportation assistance fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

D. A maximum amount of twenty-three million dollars may be deposited in the local transportation assistance fund each fiscal year from the state general fund as provided in section 5-572, subsection D.

E. A maximum amount of eighteen million dollars may be deposited in the local transportation assistance fund each fiscal year from the state general fund as provided in section 5-572, subsection C. END_STATUTE

START_STATUTE28-8102. General lottery monies; fund distribution; definitions

A. The state treasurer shall pay incorporated cities and towns from the available monies in the local transportation assistance fund established by section 28-8101 pursuant to section 5-572, subsection D. Each city or town shall receive ten thousand dollars or an amount that is equal to the proportion that the population of each city or town bears to the total population of all cities and towns in this state, whichever is greater.

B. The state treasurer shall pay cities and towns as provided in subsection A of this section a maximum amount of twenty-three million dollars in any one fiscal year from the local transportation assistance fund established by section 28-8101.

C. A city or town with a population of three hundred thousand persons or less shall use the monies received under subsection A of this section for transportation purposes except as provided in section 28-8104 and may use the monies for public transportation operating and related capital purposes. A city or town with a population of more than three hundred thousand persons shall use the monies received under subsection A of this section for public transportation operating and related capital purposes except as provided in section 28-8104.

D. For the purposes of this section:

1. "Population" means the population of a city, town or county as defined in section 41-563.

2. "Public transportation" means local transportation of passengers by means of a public conveyance. END_STATUTE

START_STATUTE28-8103. Special lottery monies; fund distribution; notice; proposals; annual financial report; compliance report; definitions

A. Pursuant to section 5-572, subsection C, monies in the local transportation assistance fund established by section 28-8101 shall be available for distribution by the state treasurer to the following in the proportion that the population of each bears to the total population of this state:

1. In each county with a population of one million two hundred thousand or more persons, to the public transportation fund established by section 48-5103.

2. In each county with a population of five hundred thousand or more persons but less than one million two hundred thousand persons, to the metropolitan planning organization in the county.

3. In each county with a population of less than five hundred thousand persons, to cities and towns located in the county and to the county board of supervisors. The distribution to the county board of supervisors shall be based on the unincorporated population of the county.

B. The state treasurer may not distribute more than eighteen million dollars in any one fiscal year as provided in this section. Monies distributed pursuant to this section are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

C. The state treasurer shall distribute monies to the public transportation fund established by section 48-5103 or a metropolitan planning organization pursuant to subsection A, paragraphs 1 and 2 of this section when a regional public transportation authority or metropolitan planning organization certifies that its local monies have been spent or are in the process of being spent. The monies distributed pursuant to subsection A, paragraphs 1 and 2 of this section shall be further distributed as matching grants to cities and towns located in the county in the proportion that the population of each city or town bears to the total population in that county and to the county board of supervisors in the proportion that the unincorporated population of the county bears to the total population in that county. The monies distributed pursuant to subsection A, paragraph 3 of this section shall be distributed as matching grants to cities, towns and county boards of supervisors.

D. Monies distributed pursuant to subsection C of this section shall be distributed only to cities, towns and counties that satisfy the following matching requirements:

1. For a county with a population of five hundred thousand or more persons, a match that is at least equal to the amount of grant monies requested by the county.

2. For a county with a population of less than five hundred thousand persons, a match that is at least equal to one-fourth of the amount of grant monies requested by the county.

3. For a city or town with a population of fifty thousand or more persons, a match that is at least equal to the amount of grant monies requested by the city or town.

4. For a city or town with a population of less than fifty thousand persons, a match that is at least equal to one-fourth of the amount of the grant monies requested by the city or town.

E. A regional public transportation authority, a metropolitan planning organization and the department shall notify cities, towns and county boards of supervisors within their jurisdictions of the maximum amount of matching grant monies available to them each year pursuant to this section. Each year cities, towns and counties may submit proposals to a regional public transportation authority, a metropolitan planning organization or the department requesting some or all of the matching grant monies available to them in that year. For distributions pursuant to subsection A, paragraph 1 or 2 of this section, each proposal shall certify that the city, town or county will invest local monies in an amount that is at least equal to the amount prescribed in subsection D of this section and shall detail a plan for spending all matching grant and local monies, and if a city, town or county complies with this section, the regional public transportation authority or metropolitan planning organization shall distribute matching grant monies to the city, town or county. For distributions pursuant to subsection A, paragraph 3 of this section, each proposal shall certify that the city, town or county will invest local monies in an amount that is at least equal to the amount prescribed in subsection D of this section and shall detail a plan for spending all matching grant and local monies.

F. Except as provided in subsection G of this section, monies distributed pursuant to this section shall be used only for public transit purposes, including operating and capital purposes, that are determined by the distributing agency to conform with the long-range transportation plan or regional transportation plan.

G. A city, town or county may use monies it receives pursuant to this section for other transportation purposes if it receives less than two thousand five hundred dollars pursuant to this section in a calendar year.

H. On or before June 30 of the following fiscal year, a regional public transportation authority or metropolitan planning organization that receives monies pursuant to this section shall submit an annual report to the director that contains the following information that is attested to by an independent certified public accountant:

1. A schedule of beginning and ending fund balances.

2. All monies received pursuant to this section and the specific purposes for which they are spent, including whether they are spent for operating or capital purposes.

3. All local matching expenditures made pursuant to this section.

I. On or before January 1 of each year, the director shall submit a report on compliance with the reporting requirements prescribed in this section to the governor, the president of the senate, the speaker of the house of representatives and the joint legislative budget committee. The director's report shall include:

1. A determination of whether each regional public transportation authority and metropolitan planning organization has complied with the reporting requirements prescribed in this section.

2. A summary of the monies allocated to each regional public transportation authority and metropolitan planning organization pursuant to this section in the preceding fiscal year.

3. A summary of local monies spent on public transit pursuant to this section.

J. The director shall notify by certified mail each regional public transportation authority and metropolitan planning organization that is not in compliance with the reporting requirements prescribed in this section of its noncompliance. A regional public transportation authority or metropolitan planning organization that receives this notice shall comply with the reporting requirements prescribed in this section within thirty days after receipt of the notice. If a regional public transportation authority or metropolitan planning organization fails to comply with the reporting requirements prescribed in this section within thirty days after receipt of the notice, it is not eligible to receive any monies pursuant to this section in the next fiscal year.

K. A metropolitan planning organization, city, town or county may enter into an intergovernmental agreement with a federally recognized Indian tribe to provide financial assistance pursuant to this section for maintaining or operating an existing public transit service provided by the Indian tribe.

L. For the purposes of this section:

1. "Local monies" means:

(a) Revenue that is generated by a city, town or county from nonfederal sources and that was first appropriated by the city, town or county for public transit activities in or after fiscal year 1993-1994.

(b) Donations that are received by a city, town or county from nongovernmental sources and that are in the form of monies or in-kind contributions.

2. "Population" means the population of a city, town or county as defined in section 41-563.

3. "Public transit" means local, regional or intercity transportation of passengers by means of a public conveyance, including para-transit and local transportation of passengers by a carpool vehicle. For the purposes of this paragraph, "carpool vehicle" means any motor vehicle when operated by a car pool operator as defined in section 28‑4032. END_STATUTE

START_STATUTE28-8104. Alternative uses; local transportation assistance fund

By resolution, a city or town may authorize the use of up to ten percent of local transportation assistance fund monies received pursuant to section 28-8102 in any one fiscal year for cultural, educational, historical, recreational or scientific facilities or programs or for nonresidential outpatient programs or services for persons with a developmental disability as defined in section 36-551 who have never resided within a facility identified in or established pursuant to section 36-558 if the monies are matched equally by nonpublic monies that are received by the city or town and that are spent for the same purposes, except in a fiscal year when the total amount distributed from the local transportation assistance fund is less than twenty-three million dollars. END_STATUTE

Sec. 7. Section 36-108.01, Arizona Revised Statutes, as amended by Laws 2016, chapter 122, section 1, is amended to read:

START_STATUTE36-108.01. Department of health services funds; purposes; annual report

A. The interagency service agreement for behavioral health services fund is established consisting of state and federal monies received by the department to provide behavioral health services, except for monies for non‑title XIX behavioral health services. The department shall administer the fund. The department may use monies in the fund only to pay for title XIX behavioral health service claims for services provided on or before June 30, 2016. Monies in the fund are continuously appropriated.

B. The health services lottery monies fund is established consisting of monies transferred pursuant to section 5‑572, subsection C F for teenage pregnancy prevention programs established by Laws 1995, chapter 190, sections 2 and 3, the health start program established by section 36‑697 and the federal women, infants and children food program. The department shall administer the fund. Monies in the fund are continuously appropriated.

C. The intergovernmental agreements/interagency services agreements fund is established consisting of all monies received by the department through intergovernmental agreements, interagency services agreements and transfers between the department and other state and local entities. The department shall administer the fund. Monies in the fund are continuously appropriated.

D. Beginning November 1, 2015, the department shall report annually to the joint legislative budget committee on the revenues, expenditures and ending balances from the previous, current and subsequent fiscal years of the funds established in this section. END_STATUTE

Sec. 8. Section 36-108.01, Arizona Revised Statutes, as amended by Laws 2016, chapter 122, section 2, is amended to read:

START_STATUTE36-108.01. Department of health services funds; purposes; annual report

A. The health services lottery monies fund is established consisting of monies transferred pursuant to section 5‑572, subsection C F for teenage pregnancy prevention programs established by Laws 1995, chapter 190, sections 2 and 3, the health start program established by section 36‑697 and the federal women, infants and children food program. The department shall administer the fund. Monies in the fund are continuously appropriated.

B. The intergovernmental agreements/interagency services agreements fund is established consisting of all monies received by the department through intergovernmental agreements, interagency services agreements and transfers between the department and other state and local entities. The department shall administer the fund. Monies in the fund are continuously appropriated.

C. The department shall report annually to the joint legislative budget committee on the revenues, expenditures and ending balances from the previous, current and subsequent fiscal years of the funds established in this section. END_STATUTE

Sec. 9. Section 36-274, Arizona Revised Statutes, is amended to read:

START_STATUTE36-274. Disease control research fund; lapsing; investment

A. The disease control research fund is established consisting of monies received from the state lottery fund pursuant to section 5‑572, subsection D F, monies appropriated by the legislature and any gifts, contributions or other monies received by the department from any source to carry out the purposes of this article, except monies from the health research fund established by section 36‑275. The department shall administer the disease control research fund.

B. The department may expend monies in the disease control research fund for projects or services pursuant to section 36‑273 and for expenses incurred by the department in carrying out the purposes of this article, including filing applications and maintaining patents.

C. As a condition of each contract for cancer research projects or services, the department shall require that the recipient shall not use fund monies for any purpose, including any administrative or building purposes, other than the specific cancer research grant project contract.

D. Monies in the disease control research fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

E. On notice from the department, the state treasurer shall invest and divest monies in the disease control research fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund. END_STATUTE

Sec. 10. Title 41, chapter 1, article 4, Arizona Revised Statutes, is amended by adding section 41-175, to read:

START_STATUTE41-175. County assistance fund

A. The county assistance fund is established. The fund shall consist of monies transferred from the state general fund pursuant to section 5-572 and shall be administered by the state treasurer.

B. Each month in which monies are deposited in the fund, the state treasurer shall distribute those monies to the counties in this state. The total amount distributed to counties from the fund may not exceed seven million six hundred fifty thousand dollars in any fiscal year. Monies in the fund shall be distributed as follows:

1. Ninety-three and forty-seven one-hundredths percent of the monies shall be distributed equally among counties with a population of five hundred thousand or fewer persons.

2. Six and fifty-three one-hundredths percent of the monies shall be distributed equally among counties with a population of more than five hundred thousand persons. END_STATUTE

Sec. 11. Section 41-194.01, Arizona Revised Statutes, is amended to read:

START_STATUTE41-194.01. Violations of state law by counties, cities and towns; attorney general investigation; report; withholding of state shared revenues

A. At the request of one or more members of the legislature, the attorney general shall investigate any ordinance, regulation, order or other official action adopted or taken by the governing body of a county, city or town that the member alleges violates state law or the Constitution of Arizona.

B. The attorney general shall make a written report of findings and conclusions as a result of the investigation within thirty days after receipt of the request and shall provide a copy of the report to the governor, the president of the senate, the speaker of the house of representatives, the member or members of the legislature making the original request and the secretary of state. If the attorney general concludes that the ordinance, regulation, order or other action under investigation:

1. Violates any provision of state law or the Constitution of Arizona, the attorney general shall provide notice to the county, city or town, by certified mail, of the violation and shall indicate that the county, city or town has thirty days to resolve the violation. If the attorney general determines that the county, city or town has failed to resolve the violation within thirty days, the attorney general shall:

(a) Notify the state treasurer who shall withhold and redistribute state shared monies from the county, city or town as provided by section 42‑5029, subsection L K and from the city or town as provided by section 43‑206, subsection F.

(b) Continue to monitor the response of the governing body, and when the offending ordinance, regulation, order or action is repealed or the violation is otherwise resolved, the attorney general shall notify:

(i) The governor, the president of the senate, the speaker of the house of representatives and the member or members of the legislature making the original request that the violation has been resolved.

(ii) The state treasurer to restore the distribution of state shared revenues to the county, city or town.

2. May violate a provision of state law or the Constitution of Arizona, the attorney general shall file a special action in the supreme court to resolve the issue, and the supreme court shall give the action precedence over all other cases. The court shall require the county, city or town to post a bond equal to the amount of state shared revenue paid to the county, city or town pursuant to section sections 42‑5029 and 43‑206 in the preceding six months.

3. Does not violate any provision of state law or the Constitution of Arizona, the attorney general shall take no further action pursuant to this section. END_STATUTE

Sec. 12. Title 41, chapter 3, Arizona Revised Statutes, is amended by adding article 1, to read:

ARTICLE 1. ARIZONA STATE PARKS BOARD HERITAGE FUND

START_STATUTE41-501. Definitions

In this article, unless the context otherwise requires:

1. "Environmental education" means educational processes, programs and activities that are specifically designed to enhance student acquisition of knowledge of scientific and economic principles, concepts and facts as they relate to environmental topics and issues and that are taught in an unbiased, fair and balanced manner.

2. "Historic preservation" means archaeological or historic properties that are listed on or eligible for listing on the Arizona register of historic places and that require funding for easements, stabilization, rehabilitation, education and preservation program development, reconstruction, restoration, interpretive development, acquisition and maintenance.

3. "Natural areas" means parcels of land or water that contain examples of unique natural terrestrial or aquatic ecosystems, rare species of plants and animals or unusual or outstanding geologic or hydrologic features.

4. "Trails" means those trails that are for nonmotorized use and that are nominated for inclusion in the state trails system, including urban, cross-state, recreation, interpretive or historic trails. END_STATUTE

START_STATUTE41-502. Arizona state parks board heritage fund

A. The Arizona state parks board heritage fund is established consisting of monies deposited from the state lottery fund pursuant to section 5‑572 and interest earned on those monies.

B. The fund shall be administered by the Arizona state parks board. Monies in the fund are not subject to legislative appropriation. Expenditures from the fund are not subject to additional approval notwithstanding section 41‑511.05 or 41‑511.11 or any other law to the contrary. Monies received pursuant to section 5‑572 shall be deposited directly with the Arizona state parks board heritage fund. On notice from the Arizona state parks 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.

C. The Arizona state parks board may not use its power of eminent domain under section 41‑511.06 to acquire property to be paid for with monies from the Arizona state parks board heritage fund.

D. All monies in the Arizona state parks board heritage fund shall be spent by the Arizona state parks board only for the purposes and in the percentages set forth in this article. Monies in the fund may not revert to the state general fund and are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. END_STATUTE

START_STATUTE41-503. Expenditures from fund; purpose and amounts; report

A. Monies received pursuant to section 5‑572 by the Arizona state parks board heritage fund established by section 41-502 shall be spent as follows:

1. Five percent on local, regional and state trails.

2. Thirty-five percent on local, regional or state parks, for outdoor recreation and open space.

3. Seventeen percent on the acquisition of natural areas.

4. Four percent on the maintenance, operation and management of natural areas administered by the Arizona state parks board.

5. Seventeen percent on local, regional and state historic preservation projects. Monies provided under this paragraph shall be administered by the Arizona state parks board through the state historic preservation officer.

6. Seventeen percent on state park acquisition or development.

7. Five percent on environmental education.

B. Expenditures of Arizona state parks board heritage fund monies allocated pursuant to subsection a, paragraphs 1 and 2 of this section are subject to the review of the Arizona outdoor recreation coordinating commission pursuant to section 41-511.25. Arizona state parks board heritage fund monies allocated pursuant to subsection A, paragraphs 1 and 2 of this section shall be available as matching funds.

C. An entity receiving monies under subsection A, paragraphs 1 and 2 of this section may not receive more than twenty percent of the monies available in any fiscal year.

D. All monies earned as interest on monies received pursuant to section 5‑572 shall be spent only in the percentages and for the purposes described in subsections A, B and C of this section or for the costs of administering the Arizona state parks board heritage fund established by section 41-502 in amounts as determined by the Arizona state parks board.

E. On or before June 30 of the following fiscal year the Arizona state parks board shall submit its annual report to the president of the senate, the speaker of the house of representatives and the chairpersons of the senate natural resources committee and the house of representatives energy, environment and natural resources committee, or their successor committees. The annual report shall include information on the following:

1. The amount of monies spent or encumbered in the fund during the preceding fiscal year and a summary of the projects, activities and expenditures relating to:

(a) Local, regional and state trails.

(b) Local, regional or state parks for outdoor recreation and open space.

(d) Local, regional and state historic preservation projects.

(e) State park acquisition and development.

(f) Environmental education.

2. The number and location of parcels of property acquired during the preceding fiscal year.

3. For personal and real properties acquired with fund monies during the preceding fiscal year, the amount of property tax revenue paid to each taxing jurisdiction during the last full tax year before acquisition.

4. The amount of money spent from the fund during the preceding fiscal year for employee personal services.

5. The number of full-time employees employed in the preceding fiscal year in connection with property acquisition, including survey, appraisal and other related activities. END_STATUTE

START_STATUTE41-504. Performance audit

The auditor general shall conduct a performance audit, as defined in section 41‑1278, of the programs and expenditures pursuant to this article of the Arizona state parks board heritage fund established by section 41‑502 at the same time any agency performance audit of the Arizona state parks board is conducted. The auditor general shall submit copies of the performance audit to the president of the senate, the speaker of the house of representatives and the chairpersons of the senate natural resources committee and the house of representatives energy, environment and natural resources committee, or their successor committees. END_STATUTE

Sec. 13. Section 42-5029, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5029. Remission and distribution of monies; withholding; definition

A. The department shall deposit, pursuant to sections 35‑146 and 35‑147, all revenues collected under this article and articles 4, 5 and 8 of this chapter pursuant to section 42‑1116, separately accounting for:

1. Payments of estimated tax under section 42‑5014, subsection D.

2. Revenues collected pursuant to section 42‑5070.

3. Revenues collected under this article and article 5 of this chapter from and after June 30, 2000 from sources located on Indian reservations in this state.

4. Revenues collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D.

B. The department shall credit payments of estimated tax to an estimated tax clearing account and each month shall transfer all monies in the estimated tax clearing account to a fund designated as the transaction privilege and severance tax clearing account. The department shall credit all other payments to the transaction privilege and severance tax clearing account, separately accounting for the monies designated as distribution base under sections 42‑5010, 42‑5164, 42‑5205 and 42‑5353. Each month the department shall report to the state treasurer the amount of monies collected pursuant to this article and articles 4, 5 and 8 of this chapter.

C. On notification by the department, the state treasurer shall distribute the monies deposited in the transaction privilege and severance tax clearing account in the manner prescribed by this section and by sections 42‑5164, 42‑5205 and 42‑5353, after deducting warrants drawn against the account pursuant to sections 42‑1118 and 42‑1254.

D. Of the monies designated as distribution base, and subject to the requirements of section 42‑5041, the department shall:

1. Pay twenty‑five percent to the various incorporated municipalities in this state in proportion to their population to be used by the municipalities for any municipal purpose.

2. Pay 38.08 percent to the counties in this state by averaging the following proportions:

(a) The proportion that the population of each county bears to the total state population.

(b) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 throughout the state for the calendar month.

3. Pay an additional 2.43 percent to the counties in this state as follows:

(a) Average the following proportions:

(i) The proportion that the assessed valuation used to determine secondary property taxes of each county, after deducting that part of the assessed valuation that is exempt from taxation at the beginning of the month for which the amount is to be paid, bears to the total assessed valuations used to determine secondary property taxes of all the counties after deducting that portion of the assessed valuations that is exempt from taxation at the beginning of the month for which the amount is to be paid. Property of a city or town that is not within or contiguous to the municipal corporate boundaries and from which water is or may be withdrawn or diverted and transported for use on other property is considered to be taxable property in the county for purposes of determining assessed valuation in the county under this item.

(ii) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 throughout the state for the calendar month.

(b) If the proportion computed under subdivision (a) of this paragraph for any county is greater than the proportion computed under paragraph 2 of this subsection, the department shall compute the difference between the amount distributed to that county under paragraph 2 of this subsection and the amount that would have been distributed under paragraph 2 of this subsection using the proportion computed under subdivision (a) of this paragraph and shall pay that difference to the county from the amount available for distribution under this paragraph. Any monies remaining after all payments under this subdivision shall be distributed among the counties according to the proportions computed under paragraph 2 of this subsection.

4. After any distributions required by sections 42‑5030, 42‑5030.01, 42‑5031, 42‑5032, 42‑5032.01 and 42‑5032.02, and after making any transfer to the water quality assurance revolving fund as required by section 49‑282, subsection B, credit the remainder of the monies designated as distribution base to the state general fund. From this amount the legislature shall annually appropriate to:

(a) The department of revenue sufficient monies to administer and enforce this article and articles 5 and 8 of this chapter.

(b) The department of economic security monies to be used for the purposes stated in title 46, chapter 1.

(c) The firearms safety and ranges fund established by section 17‑273, fifty thousand dollars derived from the taxes collected from the retail classification pursuant to section 42‑5061 for the current fiscal year.

E. If approved by the qualified electors voting at a statewide general election, all monies collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D shall be distributed each fiscal year pursuant to this subsection. The monies distributed pursuant to this subsection are in addition to any other appropriation, transfer or other allocation of public or private monies from any other source and shall not supplant, replace or cause a reduction in other school district, charter school, university or community college funding sources. The monies shall be distributed as follows:

1. If there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 7, each month one‑twelfth of the amount that is necessary to pay the fiscal year's debt service on outstanding state school improvement revenue bonds for the current fiscal year shall be transferred each month to the school improvement revenue bond debt service fund established by section 15‑2084. The total amount of bonds for which these monies may be allocated for the payment of debt service shall not exceed a principal amount of eight hundred million dollars exclusive of refunding bonds and other refinancing obligations.

2. After any transfer of monies pursuant to paragraph 1 of this subsection, twelve per cent of the remaining monies collected during the preceding month shall be transferred to the technology and research initiative fund established by section 15‑1648 to be distributed among the universities for the purpose of investment in technology and research‑based initiatives.

3. After the transfer of monies pursuant to paragraph 1 of this subsection, three per cent of the remaining monies collected during the preceding month shall be transferred to the workforce development account established in each community college district pursuant to section 15‑1472 for the purpose of investment in workforce development programs.

4. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the amount a community college that is owned, operated or chartered by a qualifying Indian tribe on its own Indian reservation would receive pursuant to section 15‑1472, subsection D, paragraph 2 if it were a community college district shall be distributed each month to the treasurer or other designated depository of a qualifying Indian tribe. Monies distributed pursuant to this paragraph are for the exclusive purpose of providing support to one or more community colleges owned, operated or chartered by a qualifying Indian tribe and shall be used in a manner consistent with section 15‑1472, subsection B. For the purposes of this paragraph, "qualifying Indian tribe" has the same meaning as defined in section 42‑5031.01, subsection D.

5. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the following amounts shall be transferred each month to the department of education for the increased cost of basic state aid under section 15‑971 due to added school days and associated teacher salary increases enacted in 2000:

(a) In fiscal year 2001‑2002, $15,305,900.

(b) In fiscal year 2002‑2003, $31,530,100.

(d) In fiscal year 2004‑2005, $66,957,200.

(e) In fiscal year 2005‑2006 and each fiscal year thereafter, $86,280,500.

6. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, seven million eight hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the department of education to be used for school safety as provided in section 15‑154 and two hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments to the department of education to be used for the character education matching grant program as provided in section 15‑154.01.

7. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, no more than seven million dollars may be appropriated by the legislature each fiscal year to the department of education to be used for accountability purposes as described in section 15‑241 and title 15, chapter 9, article 8.

8. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one million five hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the failing schools tutoring fund established by section 15‑241.

9. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, twenty‑five million dollars shall be transferred each fiscal year to the state general fund to reimburse the general fund for the cost of the income tax credit allowed by section 43‑1072.01.

10. After the payment of monies pursuant to paragraphs 1 through 9 of this subsection, the remaining monies collected during the preceding month shall be transferred to the classroom site fund established by section 15‑977. The monies shall be allocated as follows in the manner prescribed by section 15‑977:

(a) Forty per cent shall be allocated for teacher compensation based on performance.

(b) Twenty per cent shall be allocated for increases in teacher base compensation and employee related expenses.

F. The department shall credit the remainder of the monies in the transaction privilege and severance tax clearing account to the state general fund, subject to any distribution required by section 42‑5030.01.

G. Notwithstanding subsection D of this section, if a court of competent jurisdiction finally determines that tax monies distributed under this section were illegally collected under this article or articles 5 and 8 of this chapter and orders the monies to be refunded to the taxpayer, the department shall compute the amount of such monies that was distributed to each city, town and county under this section. Each city's, town's and county's proportionate share of the costs shall be based on the amount of the original tax payment each municipality and county received. Each month the state treasurer shall reduce the amount otherwise distributable to the city, town and county under this section by one thirty‑sixth of the total amount to be recovered from the city, town or county until the total amount has been recovered, but the monthly reduction for any city, town or county shall not exceed ten per cent of the full monthly distribution to that entity. The reduction shall begin for the first calendar month after the final disposition of the case and shall continue until the total amount, including interest and costs, has been recovered.

H. On receiving a certificate of default from the greater Arizona development authority pursuant to section 41‑2257 or 41‑2258 and to the extent not otherwise expressly prohibited by law, the state treasurer shall withhold from the next succeeding distribution of monies pursuant to this section due to the defaulting political subdivision the amount specified in the certificate of default and immediately deposit the amount withheld in the greater Arizona development authority revolving fund. The state treasurer shall continue to withhold and deposit the monies until the greater Arizona development authority certifies to the state treasurer that the default has been cured. In no event may the state treasurer withhold any amount that the defaulting political subdivision certifies to the state treasurer and the authority as being necessary to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued before the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to this section.

I. Except as provided by sections 42‑5033 and 42‑5033.01, the population of a county, city or town as determined by the most recent United States decennial census plus any revisions to the decennial census certified by the United States bureau of the census shall be used as the basis for apportioning monies pursuant to subsection D of this section.

J. Except as otherwise provided by this subsection, on notice from the department of revenue pursuant to section 42‑6010, subsection B, the state treasurer shall withhold from the distribution of monies pursuant to this section to the affected city or town the amount of the penalty for business location municipal tax incentives provided by the city or town to a business entity that locates a retail business facility in the city or town. The state treasurer shall continue to withhold monies pursuant to this subsection until the entire amount of the penalty has been withheld. The state treasurer shall credit any monies withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section. The state treasurer shall not withhold any amount that the city or town certifies to the department of revenue and the state treasurer as being necessary to make any required deposits or payments for debt service on bonds or other long‑term obligations of the city or town that were issued or incurred before the location incentives provided by the city or town.

K. On notice from the auditor general pursuant to section 9‑626, subsection D, the state treasurer shall withhold from the distribution of monies pursuant to this section to the affected city the amount computed pursuant to section 9‑626, subsection D. The state treasurer shall continue to withhold monies pursuant to this subsection until the entire amount specified in the notice has been withheld. The state treasurer shall credit any monies withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section.

L. K. Except as otherwise provided by this subsection, on notice from the attorney general pursuant to section 41‑194.01, subsection B, paragraph 1 that an ordinance, regulation, order or other official action adopted or taken by the governing body of a county, city or town violates state law or the Constitution of Arizona, the state treasurer shall withhold the distribution of monies pursuant to this section to the affected county, city or town and shall continue to withhold monies pursuant to this subsection until the attorney general certifies to the state treasurer that the violation has been resolved. The state treasurer shall redistribute the monies withheld pursuant to this subsection among all other counties, cities and towns in proportion to their population as provided by subsection D of this section. The state treasurer shall not withhold any amount that the county, city or town certifies to the attorney general and the state treasurer as being necessary to make any required deposits or payments for debt service on bonds or other long‑term obligations of the county, city or town that were issued or incurred before committing the violation.

M. L. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 and that is a political subdivision of this state and, unless otherwise specified, includes a community college tuition financing district established pursuant to section 15‑1409. END_STATUTE

Sec. 14. Section 48-5103, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5103. Public transportation fund

A. A public transportation fund is established for the authority. The fund consists of:

1. Monies appropriated by each municipality that is a member of the authority or the county, if it elected to enter into the authority. Each member municipality and member county shall appropriate monies to the public transportation fund in an amount determined by the board.

2. Monies appropriated by a county that has not elected to enter into the authority in an amount determined by the county board of supervisors.

3. Transportation excise tax revenues that are allocated to the fund pursuant to section 42‑6105. The board shall separately account for monies from transportation excise tax revenues allocated pursuant to section 42‑6105, subsection D, paragraph 3 for:

(a) A light rail public transit system.

(b) Capital costs for other public transportation.

4. Monies distributed under title 28, chapter 17, article 1.

5. Grants, gifts or donations from public or private sources.

6. Monies granted by the federal government or appropriated by the legislature.

7. Fares or other revenues collected in operating a public transportation system.

8. Local transportation assistance fund monies that are distributed to each member under section 28‑8102 and as provided in section 48‑5104.

9. Local transportation assistance fund monies that are distributed to a member pursuant to section 28‑8102 and that must be used for public transportation.

10. Local transportation assistance fund monies that are distributed pursuant to section 28‑8103, subsection A, paragraph 1.

B. On behalf of the authority, the fiscal agent shall administer monies paid into the public transportation fund. Monies in the fund may be spent pursuant to or to implement the public transportation element of the regional transportation plan developed and approved by the regional planning agency, including reimbursement for utility relocation costs as prescribed in section 48‑5107, adopted pursuant to section 48‑5121 and for projects identified in the regional transportation plan adopted by the regional planning agency pursuant to section 28‑6308.

C. Monies in the fund shall not be spent to promote or advocate a position, alternative or outcome of an election, to influence public opinion or to pay or contract for consultants or advisors to influence public opinion with respect to an election regarding taxes or other sources of revenue for the fund or regarding the regional transportation plan. END_STATUTE

Sec. 15. Section 48-5104, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5104. Municipality and county participation; withdrawal

A. A municipality located in a county eligible to establish an authority may elect to enter into the authority by adopting an ordinance declaring its participation. If an ordinance is adopted, the municipality shall annually apply for monies from the local transportation assistance fund established by section 28-8101 as provided in:

1. Section 28‑8102 and shall use a portion of those local transportation assistance fund monies for public transportation each fiscal year.

2. Section 28‑8103 and shall use those local transportation assistance fund monies as provided in section 28‑8103.

B. If a municipality with a population of less than sixty thousand persons is unable to use three-fourths of its local transportation assistance fund monies provided pursuant to section 28‑8102 for public transportation each fiscal year, it shall appropriate any remaining amount of the three‑fourths of its local transportation assistance fund monies to the public transportation fund as provided in section 48‑5103. If a municipality with a population of sixty thousand persons or more is unable to use one‑third of its local transportation assistance fund monies provided pursuant to section 28‑8102 for public transportation each fiscal year, it shall appropriate any remaining amount of the one-third of its local transportation assistance fund monies to the public transportation fund established by section 48‑5103.

B. C. The county may elect to enter into the authority by adopting a resolution declaring its participation. The county shall represent persons residing in the unincorporated areas of the county.

C. D. A member municipality or member county may withdraw from the authority at the end of a fiscal year by adopting an ordinance or resolution not later than ninety days before the end of the fiscal year that states its intention to withdraw. The withdrawal from the authority shall not result in the cancellation of a contractual agreement entered into between the withdrawing member and the authority. END_STATUTE

Sec. 16. Section 48-5314, Arizona Revised Statutes, is amended to read:

START_STATUTE48-5314. Election on regional transportation plan and excise tax

A. The board shall:

1. Adopt a twenty‑year comprehensive multimodal regional transportation plan consistent with the requirements of this article, including transportation corridors by priority and a schedule indicating the dates that construction will begin for projects contained in the plan.

2. Request by resolution certified to the county board of supervisors that the issue of levying a transportation excise tax pursuant to section 42‑6106 be submitted to the qualified electors at a countywide special election or placed on the ballot at a countywide general election. Within six months after receiving a certified copy of the resolution, the county board of supervisors shall either call a special election or place the issue on the ballot of a general election, subject to the requirements of this section.

B. The election ballot shall include a description of each transportation element of the regional transportation plan including a separate percentage share and dollar share of the transportation excise tax revenues allocated to each element.

C. In addition to any other requirements prescribed by law, the county board of supervisors shall prepare and print a publicity pamphlet concerning the ballot question and mail one copy of the pamphlet to each household containing a registered voter in the county. The mailings may be made over a period of days but shall be mailed for delivery before the earliest date registered voters may receive early ballots for the election. The publicity pamphlet shall contain:

1. The date of the election.

2. The individual household's polling place and the time the polls will be open.

3. A summary of the principal provisions of the issue presented to the voters, including the rate of the transportation excise tax, the number of years the tax will be in effect and the projected annual and cumulative amount of revenues to be raised.

4. A statement describing the purposes for which the transportation excise tax monies may be spent as provided by law, including:

(a) A summary of the regional transportation plan adopted pursuant to section 48‑5309 and subsection A of this section, including a description of each transportation element of the regional transportation plan.

(b) A map of proposed routes and transportation corridors of all major transportation projects and public transportation systems.

(c) The percentage share and dollar amount of transportation excise tax revenues, together with other identified revenues, dedicated for each transportation element, transportation project and public transportation system, and conditions and limitations on the use of the money.

5. The form of the ballot.

6. Any arguments for or against the ballot measure. Affirmative arguments, arranged in the order in which the elections director received them, shall be placed before the negative arguments, also arranged in the order in which they were received.

D. Not later than ninety days before the date of the election, a person may file with the county elections director an argument, not more than three hundred words in length, advocating or opposing the ballot measure, subject to the following requirements:

1. The person who files the argument shall also pay to the elections director a publication fee prescribed by the board of supervisors. Payment of the fee required by this paragraph, or reimbursement of the payor, constitutes sponsorship of the argument.

2. If the argument is sponsored by one or more individuals, the argument shall be signed by each sponsoring individual.

3. If the argument is sponsored by one or more organizations, the argument shall be signed by two executive officers of each organization.

4. If the argument is sponsored by one or more political committees, the argument shall be signed by each committee's chairperson or treasurer.

5. The names of persons who have signed arguments and the names of sponsoring organizations shall appear with the argument in the pamphlet. The person or persons signing the argument shall also give their residence or post office address and a telephone number, which shall not appear in the pamphlet.

E. In addition to any other ballot requirements prescribed by law, the elections director shall cause the following to be printed on the official ballot:

1. The designation of the measure as follows: "Relating to county transportation excise (sales) taxes".

2. Instructions directing the voter to the full text of the official and descriptive titles containing the summary as printed in the sample ballot and posted in the polling place. The ballot may include the summary of the regional transportation plan.

3. The questions submitted to the voters as follows:

I. Do you approve the regional transportation plan for ________________ county? YES ________ NO _________

(A "YES" vote indicates your approval of the proposed regional transportation plan as developed by the regional transportation authority and described in the election materials.)

(A "NO" vote indicates your disapproval of the proposed regional transportation plan.)

II. Do you favor the levy of a transaction privilege (sales) tax for regional transportation purposes in ____________ county? YES __________ NO __________

(A "YES" vote has the effect of imposing a transaction privilege (sales) tax in __________ county for ________ years to provide funding for the transportation projects contained in the regional transportation plan.)

(A "NO" vote has the effect of rejecting the transaction privilege (sales) tax for transportation purposes in __________ county.)

F. For ballot question II to be approved and implemented, both the proposed regional transportation plan and the proposed transaction privilege tax must be approved by a majority of the qualified electors voting on the measure. If ballot question I fails to be approved by a majority of the qualified electors voting on the measure, both measures fail. If ballot question I is approved by a majority of the qualified electors voting on the measure and ballot question II fails to be approved by a majority of the qualified electors voting on the measure, the proposed regional transportation plan is approved without the proposed transaction privilege tax. Not later than five years after voter approval of the regional transportation plan, the board may submit to the voters a subsequent transaction privilege tax measure to fund the previously approved regional transportation plan, and if approved by a majority of the qualified electors voting on the measure, both the approved regional transportation plan and the approved transaction privilege tax may be implemented.

G. Except as otherwise provided by this section, the election under this section shall be conducted as nearly as practicable in the manner prescribed for general elections in title 16.

H. The county election officer shall account for costs specifically incurred with respect to the ballot issue under this section. Regardless of the outcome of the election, and notwithstanding any other law, the state treasurer shall pay the costs listed in this subsection that are specifically incurred with respect to the ballot issue. Payment shall be made under this section from the cities' and towns' share of local transportation assistance fund monies distributed under section 28‑8102 to the cities and towns within the county, and from the county's share of the county assistance fund monies distributed under section 41‑175. If the transportation excise tax is approved, the regional transportation authority shall reimburse the local transportation assistance fund established by section 28-8101 and the county assistance fund established by section 41-175 from the first received transportation excise tax revenues. The following costs incurred by the county elections officer are authorized for payment pursuant to this subsection:

1. Costs of mailing, publishing, posting and printing ballots, publicity pamphlets, notices, election materials and other matters concerning the election.

2. Legal and other consulting fees and costs relating to the election.

3. Telecommunications costs.

4. Compensation of the election board, county election officers and employees and other labor costs incurred to administer, hold, canvass and announce the results of the election.

5. Any other costs attributable to the election.

I. Notwithstanding section 42‑6106, subsection E, if a regional transportation authority transaction privilege tax is approved at an election held as prescribed by this section, the levy and collection of the tax shall begin on April 1 immediately following approval of the tax and may be in effect for a period of not more than twenty years. END_STATUTE

Sec. 17. Effective date

Section 36‑108.01, Arizona Revised Statutes, as amended by Laws 2016, chapter 122, section 2, and this act, is effective from and after August 31, 2020.