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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
ENACTED
FACT SHEET FOR h.b. 2857/S.B. 1724
state budget implementation; 2022-2023
Purpose
Makes statutory and session law changes relating to budget implementation necessary to implement the FY 2023 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.
H.B. 2857 contains the budget reconciliation provisions for changes relating to budget implementation.
Provisions
1. Requires the Arizona Department of Administration (ADOA) to obtain insurance against loss, to the extent necessary and in the best interest of the state, on actual or suspected data breaches, security system breaches or security incidents for select agencies, boards and commissions.
2. Requires ADOA to provide for state self-insurance for losses arising out of actual or suspected data breaches, security system breaches or security incidents if state self-insurance is determined to be necessary or desirable and in the best interests of Arizona.
3. Allows the Director of ADOA to impose a deductible on state agencies, boards and commissions for each loss that arises out of an actual or suspected data breach, security system breach or security incident.
4. Establishes the Cyber Risk Insurance Fund in ADOA for the purchase of insurance, risk management services, payment of self-insured losses and necessary administrative costs.
5. Adds the replenishment of the Cyber Risk Insurance Fund to the list of actuarial needs used as a basis for ADOA's annual budget request presented to the Legislature.
6. Requires interest on any judgement against Arizona paid for out of the Cyber Risk Insurance Fund to:
a) accrue at the average yield offered by U.S. Treasury bills during the course of appeal; and
b) be paid in accordance with statutory requirements.
7.
Specifies that requirements related to interest on judgements paid from
the Risk Management Revolving Fund or Cyber Risk Insurance Fund apply
regardless of whether the funds are
self-insured or funded by excess insurance.
8. Subjects all monies deposited in the Cyber Risk Insurance Fund to annual legislative appropriation to ADOA.
9. Establishes the Major Events Fund consisting of monies appropriated by the Legislature and private donations and directs the Arizona Commerce Authority (ACA) to administer the Fund.
10. Specifies that monies in the Major Events Fund are continuously appropriated and exempt from lapsing.
11. Allows monies in the Major Events Fund to be used:
a) to support the planning and operation of the competitive bid process for major events in coordination with the Arizona Office of Tourism, destination marketing organizations and local organizing committees;
b) to negotiate and make grants to local organizing committees or equivalent organizations for the operating costs of major events; and
c) for other economic development activities associated with major event operations.
12. Prohibits Major Events Fund monies from being used to supplant routine operating expenses of any political subdivision.
13. Caps the grant for any event at 25 percent of the operating expenditures required under the event support contract between the host organization and the local organizing committee or equivalent organization.
14. Requires the ACA, before awarding a grant from the Major Events Fund to local organizing committees or equivalent organizations for the operating costs of major events, to prepare a written statement signed by the chief executive officer that:
a) assesses the direct economic impact of the grant; and
b) contains a finding that the award of the grant is in the best interest of the state.
15. Requires the ACA to submit a Major Events Fund semi-annual report to the Joint Legislative Budget Committee and the Governor's Office of Strategic Planning and Budgeting by July 15 and December 15 that includes the amount of actual expenditures by purpose and an expenditure plan for all remaining monies by purpose.
16. Suspends the Budget Stabilization Fund cap of 10 percent of state General Fund (state GF) revenue for FY 2023 and prohibits the State Treasurer from transferring any surplus monies from the Budget Stabilization Fund to the state GF.
17. Repeals the requirement that the Legislative Council fund the expenses of the Ombudsman-Citizens Aide from monies appropriated to Legislative Council as a line-item in the general appropriations act.
18. Continues to require, retroactive to July 1, 2022, any unrestricted federal monies received by Arizona in FY 2023 to be deposited into the state GF and used to pay essential governmental services.
19. Asserts that the Legislature is not required to appropriate monies to or transfer monies from the Budget Stabilization Fund in FY 2023, FY 2024 and FY 2025.
20. Defines breach, security system breach and security incident.
21. Makes technical and conforming changes.
22. Becomes effective on the general effective date, with retroactive provisions as noted.
House Action Senate Action
APPROP 6/21/22 DP 8-4-0-1 APPROP 6/22/22 DP 5-3-2
3rd Read 6/23/22 48-11-1 3rd Read 6/23/22 20-8-2 (H.B.2857 was substituted for S.B. 1724 on 3rd Read)
Signed by the Governor on 6/28/22
Chapter 308
Prepared by Senate Research
July 5, 2022
MH/slp