ARIZONA HOUSE OF REPRESENTATIVES Fifty-sixth Legislature First Regular Session
	Senate: NREW DP 7-0-0-0 | 3^rd Read 25-4-1-0

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SB1391: department of environmental quality; counsel

S/E: allocation; water quality fee fund

Sponsor: Senator Kerr, LD 25

Committee on Natural Resources, Energy & Water

Summary of the Strike-Everything Amendment to SB 1391

Overview

Allocates $9,060,000 from the State Lottery Fund to the Water Quality Fee Fund after appropriations and deposits have been made for the State Lottery Fund's bond obligations, the Arizona State Lottery Commission's expenses and the Arizona Game and Fish Heritage Fund.

History

Water Quality Fee Fund

The Water Quality Fee Fund is administered by the Arizona Department of Environmental Quality (ADEQ) and finances water quality control programs in the state. In particular, Laws 2022, Chapter 204 recently expanded the programs that are financed by this fund to include all major water quality regulatory programs except for the Water Quality Assurance Revolving Fund Program and the Brownfields Cleanup Revolving Loan Program. The fund consists of legislative appropriations and fees collected from various ADEQ programs and permits (A.R.S. § 49-210).

The Water Quality Fee Fund has recently received appropriations from other funds. In FY 2023, it was appropriated $1.5 million from the Recycling Fund. In the same year, the Legislature made a one-time appropriation of $6.4 million from the state General Fund to the Water Quality Fee Fund (Laws 2022, Chapter 313). Additionally, Laws 2022, Chapter 204 authorized ADEQ to increase existing fees for several water quality programs.

State Lottery Fund Distributions

The State Lottery Fund consists of all revenues received from the sale of lottery tickets or shares, including any fees charged, revenues from games and all other monies credited or transferred from any other fund, except for monies apportioned to pay prizes (A.R.S. § 5-571). Fund monies are distributed in tiers. Certain distributions have a higher priority than others and some distributions are subject to certain conditions. Fund monies are distributed as follows:

1) Payable bonds or bond related obligations from the State Lottery Fund and the Arizona State Lottery Commission's expenses;

2) $10,000,000 to the Arizona Game and Fish Commission Heritage Fund provided at least $84,150,000 is available for deposit into the state General Fund;

3) Allocations ranging from $1,000,000 to $5,000,000 to several health and welfare-related entities and programs, which are adjusted for inflation and may be reduced on a pro-rata basis if insufficient funds are available;

4) $1,000,000 to the Department of Economic Security for distribution to nonprofit organizations for the homeless;

5) $99,640,000 to the state General Fund;

6) $3,500,000 to the Arizona Competes Fund; and

7) Remaining balance to the University Capital Improvement Lease-to-Own and Bond Fund to cover up to 80% of the total annual payments of lease-to-own and bond agreements entered into by the Arizona Board of Regents.

The remaining total balance is deposited into the state General Fund (A.R.S. § 5-572).

Provisions

1. Annually allocates $9,060,000 from the State Lottery Fund to the Water Quality Fee Fund after appropriations and deposits related to the State Lottery Fund's bond obligations, State Lottery Commissions operational expenses and the Arizona Game and Fish Heritage Fund have been made. (Sec. 1)

2. Authorizes the Water Quality Fee Fund receive monies deposited from the State Lottery Fund. (Sec. 2)

3. Contains an emergency clause. (Sec. 3)

4. Makes technical corrections. (Sec. 1)

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8.                   SB 1391

9. Initials PAB/AH     Page 0 Natural Resources, Energy & Water

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