Assigned to FIN                                                                                                            AS PASSED BY HOUSE

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1159

fire districts; financial reports; alternatives

Purpose

            Requires fire districts that are likely to experience adverse impacts to ongoing operations or liquidity to study merger, consolidation or joint operating alternatives. Prohibits the use of certain titles in the name, title or designation of state or local agencies, business entities or nonprofit organizations.

Background

            A fire district is required to produce financial reports each month and annual cash flow projection reports each fiscal year, to be updated monthly with the actual revenues and expenditures from the preceding month. A fire district board (board) must review the reports every month, although fire districts with a three-member board may review them every two months. If a report indicates an adverse impact on the ongoing operations or liquidity of the fire district, then the chairperson of the board must report the fire district to the county treasurer and the county Board of Supervisors within 10 days after the discovery (A.R.S. § 48-807). This reporting requirement can be triggered if the fire district is likely to incur debt or liabilities greater than taxes levied and monies actually available, or if the aggregate amount of warrants, substitute checks or electronic funds transfers drawn to operate the fire district exceeds 90 percent of the taxes levied by the county (A.R.S. § 48-805.02).

            Current statute allows cities, towns, counties and fire districts to form a separate legal entity for the purposes of jointly exercising powers held in common by the contracting parties. These common powers may include fire protection, the preservation of life, providing emergency medical services and carrying out other powers and duties, including providing ambulance transportation services. Any separate legal entity formed must include a fire district (A.R.S.
§ 48-805.01).

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

Provisions

1. Requires a fire district that is reported as likely to experience adverse impacts to ongoing operations or liquidity to complete a study of merger, consolidation or joint operating alternatives (study) within 60 days after submittal of the report.

2. Requires the fire district to hold a special public meeting to present the findings of the study.

3. Requires the chairperson of the board to submit the findings of the study to the county treasurer and county Board of Supervisors within five days of the special public meeting.

4. Allows a separate legal authority formed by cities, towns, counties and fire districts for the purposes of jointly exercising powers held in common by the contracting parties to use the title:

a) fire authority;

b) fire and medical authority;

c) fire and emergency medical services authority;

d) fire and ambulance authority; or

e) ambulance authority.

5. Prohibits the use of these titles in the name, title or designation of other state or local agencies, business entities or nonprofit organizations.

6. Requires a board that participates in an agreement to form a separate legal entity and is experiencing adverse financial impacts to produce monthly financial reports.

7. Makes technical and conforming changes.

8. Becomes effective on the general effective date.

Amendments Adopted by the House of Representatives

1. Allows a separate legal authority formed by cities, towns, counties and fire districts for the purposes of jointly exercising powers held in common by the contracting parties to use the title:

a) fire authority;

b) fire and medical authority;

c) fire and emergency medical services authority;

d) fire and ambulance authority; or

e) ambulance authority.

2. Prohibits the use of these titles in the name, title or designation of other state or local agencies, business entities or nonprofit organizations.

3. Requires a board that participates in an agreement to form a separate legal entity and is experiencing adverse financial impacts to produce monthly financial reports.

Senate Action House Action

FIN                 2/6/19        DP        9-0-1                 GOV               3/21/19      DPA     8-0-0-3

3^rd Read          2/14/19                    29-0-1               3^rd Read          4/11/19                    59-1-0

Prepared by Senate Research

April 12, 2019

CS/LC/kja