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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
VETOED
FACT SHEET FOR s.b. 1525/H.B. 2572
capital outlay; appropriations; 2023-2024.
Purpose
Makes statutory and session law changes relating to capital outlay necessary to implement the FY 2024 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.
S.B. 1525 contains the budget reconciliation provisions for changes relating to capital outlay.
Provisions
Building Renewal
1. Appropriates the following amounts in FY 2024 to the following agencies from the specified funds for major maintenance and repair activities for state buildings:
|
Agency |
Fund |
Amount |
|
Arizona Department of Administration (ADOA) |
Capital Outlay Stabilization Fund (COSF) |
$16,000,000 |
|
Arizona Department of Corrections (ADC) |
Department of Corrections Building Renewal Fund |
$5,864,300 |
|
Arizona Game and Fish Department (AZGFD) |
Game and Fish Fund |
$1,776,400 |
|
Arizona State Lottery Commission |
State Lottery Fund |
$214,200 |
|
Arizona Department of Transportation (ADOT) |
State Highway Fund (SHF) |
$18,139,400 |
|
State Aviation Fund |
$441,900 |
2. Requires ADOA to allocate monies from the capital outlay appropriation to state agencies for necessary building renewal.
3. Reduces the ADOA appropriation for building renewal by the difference between the amount appropriated and the balance in the COSF, if monies in the COSF are insufficient to fund the appropriation.
4. Prohibits ADC from spending any monies from the capital outlay appropriation on personal services or overhead expenses related to managing projects funded by the appropriation.
Individual Capital Projects
5. Appropriates $31,422,000 from the state General Fund (state GF) in FY 2024 to ADC to replace evaporative cooling statewide with HVAC.
ADOT Statewide Highway Construction
6. Appropriates $444,243,000 from the SHF in FY 2024 to ADOT to:
a) plan and construct state highways;
b) acquire rights-of-way; and
c) provide for the cost of contracted field administration and engineering on construction projects and debt service payments on bonds issued for highway construction.
7. Appropriates balances and collections in the SHF that exceed the amount appropriated by the General Appropriations Act and the Capital Outlay Budget Reconciliation Act to ADOT for authorized purpose.
8. Requires ADOT, by November 1, 2023, to report to the Directors of JLBC and OSPB on:
a) ADOT's actual prior year, estimated current year and upcoming budget year highway construction expenses from all fund sources;
b) capital outlay information for FYs 2023, 2024 and 2025; and
c) ADOT's outstanding debt principal balance at the end of FY 2025 and the estimated debt service payment amounts for FYs 2025, 2026, 2027 and 2028.
9. Requires ADOT's highway construction expenses report to:
a) include appropriated monies, federal monies, local agency monies, state highway monies, bond proceeds and regional area road monies; and
b) be in the same format as the prior year unless the Directors of JLBC and OSPB have approved modifications.
10. Requires ADOT's reported capital outlay information to be in the same format as tables two, three and six of the FY 2023 Appropriations Report.
11. Requires ADOT's estimated outstanding debt principal balance and estimated debt service payments report to include SHF statewide construction bonds, Arizona Highway User Revenue Fund bonds, Maricopa Association of Governments and Pima Association of Governments controlled access bonds, Maricopa Regional Area Road Fund bonds and grant anticipation notes.
12. Directs ADOT's estimated outstanding debt principal balance and estimated debt services payment report to be comparable to the information in the FY 2023 Appropriations Report.
13. Exempts the $444,243,000 appropriation in FY 2023 to ADOT from the SHF for statewide highway construction from:
a) review by the Joint Committee on Capital Review (JCCR); and
b) lapsing until the purpose for which the appropriation was made has been accomplished or abandoned or the appropriation stands unexpended or unencumbered for a full fiscal year.
ADOT Airport Planning and Development
14. Appropriates $35,000,000 from the State Aviation Fund in FY 2024 to ADOT to plan, construct, develop and improve state, county, city or town airports as determined by the State Transportation Board.
15. Appropriates any balances and collections in the State Aviation Fund that exceed the amount appropriated by the General Appropriations Act and the Capital Outlay Budget Reconciliation Act to ADOT for authorized purposes.
16. Requires ADOT, by December 31, 2023, to report to JLBC on the status of all aviation grant awards and distributions and requires the report to delineate projects by individual airport and fiscal year, including any future year commitments.
17. Exempts the $35,000,000 appropriation from the State Aviation Fund in FY 2024 to ADOT for airport planning and development from:
a) JCCR review; and
b) lapsing until the purpose for which the appropriation was made has been accomplished or abandoned or the appropriation stands unexpended or unencumbered for a full fiscal year.
Miscellaneous
18. Allows ADOA to spend up to five percent of all capital outlay appropriations to ADOA designated to state agencies on project management expenditures for project management of building renewal and capital projects.
19. Prohibits ADOA from spending any other capital outlay appropriations on personal services or employee-related expenditures or for maintenance contracts on building components and equipment without review by the JCCR.
20. Prohibits ADOA from spending any other capital outlay appropriations on personal services or employee-related expenditures of state employees, except for services provided as part of the Inmate Construction Program for correctional facilities.
21. Becomes effective on the general effective date.
Governor's Veto Message
The Governor indicates in her veto message that S.B. 1525, and the FY 2024 state budget as a whole, does not address her priorities to work together on a budget that addresses the state's housing crisis, lowers costs, prepares the workforce and invests in public education.
Senate Action House Action
APPROP 1/31/23 DP 6-4-0 APPROP 2/1/23 DP 9-6-0-0
3rd Read 2/1/23 16-14-0 3rd Read 2/13/23 31-27-2
(S.B. 1525 was substituted for H.B. 2572 on 3rd Read)
Vetoed by the Governor 2/16/23
Prepared by Senate Research
February 17, 2023
LMM/GHR/sr