ARIZONA HOUSE OF REPRESENTATIVES

HB 2653: expenditure limitation; waiver of penalties

PRIME SPONSOR: Representative Cobb (with permission of committee on Rules), LD 5

BILL STATUS: Caucus & COW

Abstract

Relating to La Paz County penalties for excess expenditures.

Provisions

1. Waives the penalties imposed on La Paz County for excess expenditures of local revenues in FY's 2014-18. (Sec. 1)

2. Prohibits La Paz County from seeking an additional Legislative waiver of penalties for excess expenditures for at least five years. (Sec. 1)

3. Requires La Paz County to provide specified Legislative Members with a copy of the following information in each of FY 2019-23:

a. The County expenditure report;

b. The County financial and compliance audit; and

c. The notice of pending financial statement filing that is included in the published County budget for each fiscal year in which the financial statements for the county were not completed and filed pursuant to uniform expenditure reporting system requirements. (Sec. 1)

4. Stipulates that the Senate Finance Committee and House Ways & Means Committee, or their successor committees, must hold a hearing to determine compliance with the requirement that La Paz County furnish specified information, if a hearing is determined necessary by specified Legislative Members. (Sec. 1)

5. Makes the bill retroactively effective to July 1, 2013. (Sec. 2)

Current Law

The EEC is required to annually determine and publish the expenditure limitation for each county, city and town.  The expenditure limit is determined by adjusting the amount of actual payments of local revenues for each political subdivision in FY 1980 (the base limit) to reflect population and cost of living changes.   Political subdivisions are prohibited from authorizing expenditures in excess of the limitation, unless there is a natural or man-made disaster or the excess expenditure is approved by a majority of voters in the district at a special election (Arizona Constitution, Article IX, § 20).  

The OAG oversees the uniform expenditure reporting system for political subdivisions.  Each year, counties are required to include certain information in the system, including expenditure limitation reports and financial statements (A.R.S. § 41-1297.07).  These financial statements are required to be posted in a prominent location on the official county website within seven days of filing.  If the county financial statements are not completed on or before the adoption of the county budget, the BOS must include a form in the budget stating that the financial statement is pending and outlining the reasons for the delay (A.R.S. § 11-661).

If a county exceeds the expenditure limitations without authorization, the OAG must notify the BOS of the county to reduce its allowable levy of primary property taxes by the amount of excess expenditures

Additional Information

The FY 18 county expenditure limits can be found here.

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Fifty-third Legislature                  HB 2653

Second Regular Session                               Version 1: Caucus & COW

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