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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
general appropriations; budget reconciliation; 2020-2021.
Purpose
Makes statutory and session law changes relating to general appropriations necessary to implement the FY 2021 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.
The JLBC Baseline includes an estimated of spending necessary to meet requirements of statutory formulas and other obligations (FY 2021 JLBC Baseline).
S.B. 1692 contains the budget reconciliation provisions for changes relating to general appropriations.
Provisions
FY 2021 Ongoing Fund and Major Footnote Changes
Arizona Health Care Cost Containment System (AHCCCS)
1. Modifies footnote relating to graduate medical education programs by allowing AHCCCS to use the funds to cover direct and indirect costs of participating hospitals.
2. Outlines requirements for prioritization for the graduate medical education programs.
Department of Child Safety (DCS)
3. Exempts monies for litigation expenses from lapsing until July 1, 2022.
Department of Economic Security (DES)
Ongoing General Fund (GF) and Other Fund (OF) Changes
|
Summary of Changes |
Source |
Comments |
FY 2021 Changes |
|
Child Care 3-5 Star Rate Increases |
OF |
|
1,500,000 |
|
Increase Child Care Caseload by 3,000 |
OF |
|
20,798,400 |
Arizona Department of Education (ADE)
Ongoing General Fund (GF) and Other Fund (OF) Changes
|
Summary of Changes |
Source |
Comments |
FY 2021 Changes |
|
Formula |
GF |
|
(6,600,000) |
Department of Health Services (DHS)
4. Requires DHS to submit a report to the Joint Legislative Budget Committee (JLBC), by May 31, 2021, on the progress of implementing recommendations from the Auditor General relating to the investigation of long-term care facility complaints and self-reports.
5. Requires the DHS report to include:
a) information on staffing levels at long-term facilities since the audit;
b) summary of DHS's time frame on the implementation of the recommendations;
c) updates on DHS's policies and procedures; and
d) an assessment of DHS's performance in investigating long-term facility complaints and self reports.
Department of Insurance and Financial Institutions (DIFI)
6. Requires DIFI to assess and set fees at a level to ensure that the monies deposited into the state GF will equal or exceed DIFI's expenditure from the state GF.
Department of Public Safety (DPS)
7. Exempts the appropriations for peace officer training equipment made in FY 2020 from lapsing until July 1, 2021, and reverts any unused monies to the funds the monies were appropriated from.
Arizona Department of Revenue (ADOR)
8. Requires ADOR, by March 31, 2021, to submit a report to JLBC on the progress of the implementation of the Auditor General's recommendations relating to transaction privilege tax (TPT) administration and enforcement.
9. Requires ADOR report assess the:
a) effectiveness of ADOR's efforts to reduce the risk of misreporting and underreporting TPT through information technology controls;
b) data analysis; and
c) progressing identifying and fixing errors in ADOR's tax system TPT licensing information.
Secretary of State (SOS)
10. Exempts the FY 2019 other Help America Vote Act Projects appropriation from lapsing until July 1, 2022, and reverts any unused monies to the fund from which the monies were appropriated.
FY 2020 Supplemental Appropriations and Adjustments
General Fund (GF) and Other Fund (OF)
|
Agency |
Fund |
Amount |
|
ADOA Federal Government Disallowed Costs Risk Management Revolving Fund |
OF |
3,933,100 |
|
Arizona Health Care Cost Containment System (AHCCCS) |
GF |
45,978,600 |
|
AHCCCS tobacco tax and health care fund |
OF |
5,109,200 |
|
AHCCCS expenditure authority |
OF |
468,181,900 |
Arizona Department of Education (ADE)
11. Allows the Superintendent of Public Instruction to transfer monies from the state GF appropriation for basic state aid to the results-based funding program for FY 2020 without JLBC review.
12. Specifies
any amount that exceeds the amount needed to address a funding shortfall for
results-based funding program for FY 2020 reverts to the state GF on June 30,
2020.
State Land Department
13. Appropriates $481,100 from the state GF in FY 2020 to the State Land Department for a CAP user fee rate adjustment.
School Facilities Board (SFB)
14. Appropriates $28,000,000 from the state GF in FY 2020 to SFB for building renewal grants.
Secretary of State (SOS)
15. Appropriates $2,616,900 from the state GF in FY 2020 to the SOS to reimburse expenses incurred by counties to administer the 2020 Presidential Preference Election (PPE).
16. Requires the SOS to reimburse counties based on the number of active registered voters in each county on January 2, 2020, as follows:
a) more than 500,000 persons, $1.74 per voter or the actual cost, whichever is less;
b) between 200,000 to 500,000 persons, $1.60 per voter or the actual cost, whichever is less;
c) between 100,000 to 200,000 persons, $1.90 per voter or the actual cost, whichever is less;
d) between 50,000 to 100,000 persons, $2.00 per voter or the actual cost, whichever is less;
e) between 12,000 to 50,000 persons, $2.10 per voter or the actual cost, whichever is less; and
f) less than 12,000 persons, $2.40 per voter or the actual cost, whichever is less.
17. Requires each county to submit its certified claims to the SOS by May 18, 2020.
18. Requires the SOS, by December 31, 2020, to submit a report to JLBC and the Governor's Office of Strategic Planning and Budgeting on the reimbursements made to counties.
19. Specifies the monies appropriated and reimbursement rates made do not set a precedent for future processes to select party nominees for presidential election.
20. Exempts all FY 2020 appropriations for the PPE from lapsing until December 31, 2020.
21. Appropriates $6,690,300 from the Election Systems Improvement Fund in FY 2020 to the SOS, for allocation as follows:
a) $5,352,200 to be distributed to counties for election systems improvements, with each county receiving an initial $50,000 and the remainder of monies distributed based on population; and
b) $1,338,100 to be used by the SOS for election systems improvements.
22. Requires the SOS, before spending the monies, to submit an expenditure plan to JLBC.
23. Exempts the appropriation for election system improvements from lapsing until June 30, 2022.
Additional FY 2021 Appropriations and Adjustments
Arizona Department of Administration (ADOA)
24. Appropriates $7,150,650 from the state GF in FY 2021 to ADOA for distribution to counties for maintenance of essential county services.
25. Requires ADOA to allocate the monies equally among all counties with a population of less than 900,000 persons (Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Mohave, Navajo, Pinal, Santa Cruz, Yavapai and Yuma Counties).
26. Appropriates $500,000 from the state GF in FY 2021 to ADOA for distribution to a county with a population between 30,000 and 40,000 persons for maintenance of essential county services.
27. Appropriates $3,000,000 from the state GF in FY 2021 to ADOA for distribution to counties for supplement that cost of the Elected Official's Retirement Plan (EORP) and amortize unfunded accrued liability.
28. Requires ADOA to allocate the monies equally among all the counties with a population of less than 300,000 persons.
29. Requires monies to be used only for required employer contributions to EORP.
Automation Projects Fund (APF)
30. Appropriates the following amount in FY 2021 from the APF to ADOA for the following automation and information technology (IT) projects:
|
Project |
Subaccount |
Amount |
|
Children's Information Library and Data Source System (DCS) |
|
4,992,800 |
31. Requires ADOA to submit a quarterly report, that includes the projects expenditures, deliverables, timeline for completion and current status, to JLBC on implementing projects approved by the Information Technology Authorization Committee.
32. Exempts FY 2021 appropriations from the APF from lapsing until June 30, 2022.
33. Specifies that transfers into the APF are not appropriations out of the APF and only direct appropriations out of the APF are appropriations.
Department of Economic Security (DES)
34. Allows, beginning April 1, 2021, DES to use up to $25,000,000 from the Budget Stabilization Fund (BSF) for providing funding for reimbursement grants.
35. Requires DES to notify the directors of JLBC and OSPB before using the monies from the BSF.
36. Requires the BSF be fully reimbursed by September 1, 2021, as part of the closing process for FY 2021.
37. Prohibits the appropriation from being used for additional programmatic expenditures.
Debt Service Payments
38. Appropriates $53,701,800 from the state GF in FY 2021 to ADOA for the debt service payments on the sale and lease-back of state buildings authorized by Laws 2009, Third Special Session, Chapter 6.
39. Allocates $23,997,900 of state GF revenue in FY 2021 to the Arizona Convention Center Development Fund.
40. Specifies that the Rio Nuevo Multipurpose Facility District is estimated to receive $16,000,000 from a portion of state TPT revenues in FY 2021 and specifies that the actual amount of distribution will be made as outlined in statute.
Fund Transfers
41. Transfers by June 30, 2021 $16,700,000 from the Prescription Drug Rebate Fund to the state GF for the purposes of providing adequate support and maintenance for state agencies.
42. Transfers $15,492,300 from the Arizona Highway Patrol Fund in FY 2021 to the State Highway Fund.
43. Transfers a total of $23,343,200 from the State Highway Fund to the state GF and allows deposits to be made in even monthly installments.
Payment Deferrals
44. Continues to defer $930,727,700 in Basic State Aid (BSA) and additional state aid (ASA) payments to ADE in FY 2021 to until between June 30, 2021 and July 12, 2021, excluding charter schools and school districts with a student count of less than 600 pupils from the deferral.
45. Requires ADE to disburse the FY 2022 appropriation of $930,727,700 to the counties for the school districts between July 1, 2021, and July 12, 2021, in amounts equal to the reductions in the apportionment of BSA and ASA.
46. Mandates that school districts include in the revenue estimates that they use for computing their FY 2021 tax rates the deferred monies that they will receive.
Statewide Operating Adjustments
General Fund (GF) and Other Fund (OF)
|
Area of Adjustment |
GF |
OF |
Total |
|
Employer Health Insurance Contribution Reduction |
(10,492,900) |
(9,764,300) |
(20,257,200) |
|
Employer Health Insurance Contribution Rate Increase |
22,000,000 |
21,500,000 |
43,500,000 |
|
Agency Retirement |
16,908,600 |
3,000,000 |
19,908,000 |
|
Non-university State Employee 27th Pay Period Adjustments |
43,078,600 |
31,536,600 |
74,615,200 |
47. Provides statewide adjustment procedures and instructions.
48. Outlines the FY 2021 individual agency charges totaling $1,798,500 for general agency counsel provided by the Attorney General.
FY 2022 Appropriations
49. Appropriates $11,730,900 from the state GF in FY 2022 for a onetime deposit in the New School Facilities Fund. Requires SFB to use the monies only for facilities that received final approval from SFB before December 15, 2019.
50. Appropriates the following amounts to the public or state universities for personal services and employee-related expenditures due to the 27th pay period in FY 2022:
General Fund (GF) and Other Fund (OF)
|
University |
GF |
OF |
Total |
|
Arizona State University |
9,115,000 |
19,271,400 |
28,386,400 |
|
Northern Arizona University |
2,939,500 |
4,858,600 |
7,798,100 |
|
University of Arizona main campus |
5,540,800 |
10,942,300 |
16,483,100 |
|
University of Arizona health science center |
2,456,800 |
1,815,000 |
4,271,800 |
51. States it is the Legislature's intent that monies appropriated to the universities for the 27th pay period provide funding based on the overall allocation of state GF and appropriated tuition monies for each public or state university.
Miscellaneous
52. Contains a legislative intent that all departments, agencies and budget units receiving appropriations are to continue to report actual, estimated and requested expenditures in a specified format.
53. Contains other reporting requirements.
54. Contains definitions sections.
Prepared by Senate Research
March 18, 2020
LMM/kja