SB1152 - 532R - Senate Fact Sheet

ARIZONA STATE SENATE

Fifty-Third Legislature, Second Regular Session

AMENDED

FACT SHEET FOR S.B. 1152

education; appropriation; noncustodial federal monies

Purpose

Requires ADE to submit a yearly report to the Joint Legislative Budget Committee (JLBC) detailing the receipt and spending of custodial and noncustodial federal monies.

Background

Generally, there are two categories of federal monies that come to the state: custodial and non-custodial. Custodial monies are considered “pass-through” monies because they do not provide the state any discretion for disbursement. Examples of custodial monies are university research grants, Social Security payments and Medicare benefits. Noncustodial monies are block grants and general revenue-sharing monies designated by the federal government that allow the state discretion in the development, implementation or operation of a program or service.

In 2013, the National Conference of State Legislatures released data on how state legislatures control federal funds.

Thirty-four state legislatures have statutory processes for approving federal funds. Four state legislatures have statutory processes for approving some types of federal funds. Eleven states do not have a strict process for the approval of federal funds. Finally, five states, including Arizona, have no statutory process for approving federal funds. Legislatures in Colorado, New Mexico, and Arizona only have authority to appropriate federal grants if there are state matches. For those states, if there are non state matches, then the executive has appropriation authority.

Although the Legislature has no statutory authority to appropriate federal funds, the General Appropriation Act of 2017 gives the Legislature expenditure authority over certain federal funds. This expenditure authority allows the Legislature to place a cap on federal funds given to an agency or department. Funds subject to expenditure authority include certain federal grants and federal funds dedicated to the Department of Economic Security (DES), Arizona Health Care Cost Containment System (AHCCCS), Department of Administration (ADOA), and Department of Child Safety (DCS) (Laws 2017, Chapter 305).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Defines monies as "noncustodial federal monies" if they meet one of the following criteria:

a) are federal block grants;

b) are federally designated general revenue sharing monies;

c) provide the state the ability to decide how monies for a program or service are spent; and

d) are required by federal or state spending requirements to fund a program where at least one percent of the appropriation must come from the state.

2. Requires ADE to submit a report to the Joint Legislative Budget Committee on or before December 1 of each year detailing all received noncustodial and custodial federal monies and how those monies were allocated.

3. Becomes effective on the general effective date.

Amendments Adopted by House

1. Removes provisions related to the Legislature's ability to appropriate noncustodial federal monies to ADE.

2. Requires ADE to submit a report to the Joint Legislative Budget Committee on or before December 1 of each year detailing all noncustodial and custodial federal monies and how those monies were allocated.

3. Removes delayed effective date.