Assigned to JUD & GOV AS
PASSED BY HOUSE
Assigned to JUD & GOV AS
PASSED BY HOUSE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
public monies; recovery; illegal payments
Purpose
Expands the parties that the Attorney General (AG) may bring an action against to recover illegal payments of public money.
Background
Statute permits the AG to bring an action in the name of the state to enjoin the illegal payment of public monies, or if the monies have been paid, to recover such monies plus twenty percent with interest and costs to be paid to the credit of the fund from which the payment was made. Public monies include all monies coming into the lawful possession, custody or control of state agencies, boards, commissions or departments. It also includes monies coming into the lawful possession, custody or control of a state officer, employee or agent in his or her official capacity, irrespective of the source from which, or the manner in which, the monies are received (A.R.S. § 35-212).
Statute classifies the receipt, safekeeping, transfer or disbursement of public money under certain conditions as a class 4 felony (A.R.S. § 35-301). A class 4 felony is punishable by a presumptive prison sentence of 2.5 years (A.R.S. § 13-701).
Current law states that when a county Board of Supervisors (BOS) illegally orders money paid from the county treasury, the BOS and the party in whose favor the order is made are jointly and severally liable for the money with interest at the legal rate, and twenty percent additional on the principal amount (A.R.S. § 11-641).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Permits the AG to bring an action to recover illegally paid public monies against:
a) any person who received the illegal payment;
b) the public body, officer or supervisor of the person who ordered or caused the payment to be made in an official capacity; and
c) the public official, employee or agent who ordered or caused an illegal payment without authorization of law.
2. Specifies that an action may be brought to recover illegally paid public monies from a political subdivision that did not originate or were not received from the state and such funds are returned to that political subdivision.
3. States that a public official, employee or agent of the state, a political subdivision of the state or a budget unit who is charged with illegal payment of public monies may be held personally liable, unless the official, employee or agent makes a dispersal pursuant to a warrant or claim and did not know or should not have known that it would result in an illegal payment.
4. Expands the definition of public monies to include all monies coming into the lawful possession, custody or control of a tax-supported political subdivision or an officer, employee or agent of a tax-supported political subdivision in an official capacity.
5. States that an action to recover illegally paid public monies may only be brought by the AG, or by a taxpayer if requested in writing and other conditions are met.
6. Permits the court to award costs and attorney fees to the prevailing party, instead of requiring the court to award costs and attorney fees to the prevailing taxpayer, in an action brought by the taxpayer.
7. Requires an action by the AG to be brought within five years after the date an illegal payment was ordered.
8. States that a county or school district officer, employee or agent who illegally orders or causes any public monies to be paid, and any party in whose favor the payment is made are jointly and severally liable for the monies with interest at the legal rate, and twenty percent additional on the principal amount.
9. Holds harmless a county or school district officer, employee or agent who is responsible for disbursing public monies pursuant to a warrant or claim that does not originate from the officer, employee or agent if the officer, employee or agent did not know or should not have known that it would result in an illegal payment.
10. Makes a BOS liable for any unlawful payment of public monies instead of only those paid from the county treasury.
11. Permits, instead of requires, a county attorney to bring an action against a BOS to enjoin payment of or recover monies.
12. Permits a county attorney to bring an action against a county or school district officer, employee or agent to enjoin payment of or recover monies.
13. Stipulates that an action to recover illegally paid public monies is subject to requirements for actions against public entities or employees.
14. Makes technical and conforming changes.
15. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Holds harmless parties that did not know or should not have known that an action would result in an illegal payment.
Amendments Adopted by the House of Representatives
1. Specifies the timeframe during which the AG can bring an action.
2. Subjects actions to recover illegally paid public monies to requirements for actions against public entities or employees.
3. Modifies requirements for the awarding of attorney fees.
Senate Action House Action
GOV 2/7/18 DPA 7-0-0 GOV 3/15/18 DPA 7-0-0-1
JUD 1/18/18 DP 6-1-0 3rd Read 4/9/18 55-1-4
3rd Read 2/21/18 30-0-0
Prepared by Senate Research
April 10, 2018
JA/VR/lat