HB2275 - 562R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 9, chapter 4, article 8, Arizona Revised Statutes, is amended by adding section 9-500.50, to read:

START_STATUTE9-500.50. Settlement agreements; report; approval; declaration of statewide concern; definitions

A. At least ninety days before entering into a settlement agreement that would cost a city or town $500,000 or more to implement, the city or town shall submit a settlement agreement report to the president of the senate, the speaker of the house of representatives and the attorney general describing the proposed terms of the settlement agreement.

B. If a proposed settlement agreement would cost a city or town $1,000,000 or more to implement, the city or town shall submit the proposed settlement agreement to the governor for approval before the settlement agreement is considered legally binding. If the proposed settlement agreement is approved by the governor, the city or town shall submit the settlement agreement to the joint legislative audit committee, which shall review the approved settlement agreement and may recommend that the city or town do either of the following:

1. Finalize the settlement agreement.

2. Amend the settlement agreement. If the settlement agreement is amended, the city or town shall resubmit the settlement agreement to the governor for approval.

C. If a city or town does not submit or resubmit a proposed settlement agreement to the governor for final approval pursuant to subsection b of this section and the proposed settlement agreement is finalized, the settlement agreement is not legally binding.

D. On initiation of any settlement agreement negotiations by a city or town pursuant to subsection b of this section, the city or town shall notify the general counsel of the senate and the house of representatives that negotiations have commenced and update each general counsel of any developments in the negotiation process. The general counsels of the senate and the house of representatives may attend any settlement agreement negotiation meetings.

E. Due to the impact on public finances, including state finances, legally binding contracts entered into by a city or town are a matter of statewide concern.

F. For the purposes of this section:

1. "settlement agreement":

(a) Means a consent decree, an agreement or any other legally binding document or representation that resolves a threatened or pending lawsuit between this state or a political subdivision of this state and another party by requiring this state or a political subdivision of this state to take legally binding action.

(b) Does not include any of the following:

(i) Agreements made under title 28 to resolve construction contract disputes.

(ii) The settlement of disputes arising from audits, defaults or breaches of permits, contracts of sale, easements or leases by the state land department.

(iii) Agreements made by the department of administration to resolve construction contract claims made against this state by contractors or subcontractors.

2. "Settlement agreement report" means a report that contains all of the following:

(a) a copy of the settlement agreement, unless the agreement is not allowed to be disclosed due to a court order or other legal requirement.

(b) The total amount of the settlement and the source of the monies the city or town intends to use for the payment of the settlement.

(d) The recipient of the payment.

(e) A summary of the circumstances related to the settlement. END_STATUTE

Sec. 2. Title 11, chapter 2, article 4, Arizona Revised Statutes, is amended by adding section 11-269.29, to read:

START_STATUTE11-269.29. Settlement agreements; report; approval; declaration of statewide concern; definitions

A. At least ninety days before entering into a settlement agreement that would cost a county $500,000 or more to implement, the county shall submit a settlement agreement report to the president of the senate, the speaker of the house of representatives and the attorney general describing the proposed terms of the settlement agreement.

B. If a proposed settlement agreement would cost a county $1,000,000 or more to implement, the county shall submit the proposed settlement agreement to the governor for approval before the settlement agreement is considered legally binding. If the proposed settlement agreement is approved by the governor, the county shall submit the settlement agreement to the joint legislative audit committee, which shall review the approved settlement agreement and may recommend that the county do either of the following:

1. Finalize the settlement agreement.

2. Amend the settlement agreement. If the settlement agreement is amended, the county shall resubmit the settlement agreement to the governor for approval.

C. If a county does not submit or resubmit a proposed settlement agreement to the governor for final approval pursuant to subsection b of this section and the proposed settlement agreement is finalized, the settlement agreement is not legally binding.

D. On initiation of any settlement agreement negotiations by a county pursuant to subsection b of this section, the county shall notify the general counsel of the senate and the house of representatives that negotiations have commenced and update each general counsel of any developments in the negotiation process. The general counsels of the senate and the house of representatives may attend any settlement agreement negotiation meetings.

E. Due to the impact on public finances, including state finances, legally binding contracts entered into by a county are a matter of statewide concern.

F. For the purposes of this section:

1. "settlement agreement":

(b) Does not include any of the following:

(i) Agreements made under title 28 to resolve construction contract disputes.

(ii) The settlement of disputes arising from audits, defaults or breaches of permits, contracts of sale, easements or leases by the state land department.

(iii) Agreements made by the department of administration to resolve construction contract claims made against this state by contractors or subcontractors.

2. "settlement agreement report" means a report that contains all of the following:

(a) A copy of the settlement agreement, unless the agreement is not allowed to be disclosed due to a court order or other legal requirement.

(b) The total amount of the settlement and the source of the monies the county intends to use for the payment of the settlement.

(d) The recipient of the payment.

(e) A summary of the circumstances related to the settlement. END_STATUTE

Sec. 3. Section 41-192, Arizona Revised Statutes, is amended to read:

START_STATUTE41-192. Powers and duties of attorney general; restrictions on state agencies as to legal counsel; exceptions; compromise and settlement monies; definitions

A. The attorney general shall have charge of and direct the department of law and shall serve as chief legal officer of the state. The attorney general shall:

1. Be the legal advisor of the departments of this state and render such legal services as the departments require.

2. Establish administrative and operational policies and procedures within his the attorney general's department.

3. Approve long-range plans for developing departmental programs therein, and coordinate the legal services required by other departments of this state or other state agencies.

4. Represent school districts and governing boards of school districts in any lawsuit involving a conflict of interest with other county offices.

5. Represent political subdivisions, school districts and municipalities in suits to enforce state or federal statutes pertaining to antitrust, restraint of trade or price-fixing activities or conspiracies, if the attorney general notifies in writing the political subdivisions, school districts and municipalities of the attorney general's intention to bring any such action on their behalf. At any time within thirty days after the notification, a political subdivision, school district or municipality, by formal resolution of its governing body, may withdraw the authority of the attorney general to bring the intended action on its behalf.

6. In any action brought by the attorney general pursuant to state or federal statutes pertaining to antitrust, restraint of trade, or price-fixing activities or conspiracies for the recovery of damages by this state or any of its political subdivisions, school districts or municipalities, in addition to the attorney general's other powers and authority, the attorney general on behalf of this state may enter into contracts relating to the investigation and prosecution of such action with any other party plaintiff who has brought a similar action for the recovery of damages and with whom the attorney general finds it advantageous to act jointly or to share common expenses or to cooperate in any manner relative to such action. In any such action, notwithstanding any other laws to the contrary, the attorney general may undertake, among other things, to render legal services as special counsel or to obtain the legal services of special counsel from any department or agency of the United States, of this state or any other state or any department or agency thereof or any county, city, public corporation or public district in this state or in any other state that has brought or intends to bring a similar action for the recovery of damages or its duly authorized legal representatives in such action.

7. Organize the civil rights division within the department of law and administer such division pursuant to the powers and duties provided in chapter 9 of this title.

8. Compile, publish and distribute to all state agencies, departments, boards, commissions and councils, and to other persons and government entities on request, at least every ten years, the Arizona agency handbook that sets forth and explains the major state laws that govern state agencies, including information on the laws relating to bribery, conflicts of interest, contracting with the government, disclosure of public information, discrimination, nepotism, financial disclosure, gifts and extra compensation, incompatible employment, political activity by employees, public access and misuse of public resources for personal gain. A supplement to the handbook reflecting revisions to the information contained in the handbook shall be compiled and distributed by the attorney general as deemed necessary.

B. Except as otherwise provided by law, the attorney general may:

1. Organize the department into such bureaus, subdivisions or units as he the attorney general deems most efficient and economical, and consolidate or abolish them.

2. Adopt rules for the orderly conduct of the business of the department.

3. Subject to chapter 4, article 4 of this title, employ and assign assistant attorneys general and other employees necessary to perform the functions of the department.

4. Compromise or settle any action or claim by or against this state or any department, board or agency of this state. If the compromise or settlement involves a particular department, board or agency of this state, the compromise or settlement shall be first approved by the department, board or agency. If no department or agency is named or otherwise materially involved, the approval of the governor shall be first obtained. At least ninety days before entering into a settlement agreement, the attorney general shall submit a settlement agreement report to the president of the senate and the speaker of the house of representatives describing the proposed terms of the settlement agreement.

5. Charge reasonable fees for distributing official publications, including attorney general legal opinions and the Arizona agency handbook. The fees received shall be transmitted to the state treasurer for deposit in the state general fund.

C. The powers and duties of a bureau, subdivision or unit shall be limited to those assigned by law to the department.

D. Notwithstanding any law to the contrary, except as provided in subsections E and F of this section, no state agency other than the attorney general shall employ legal counsel or make an expenditure or incur an indebtedness for legal services, but the following are exempt from this section:

1. The director of water resources.

2. The residential utility consumer office.

3. The industrial commission of Arizona.

4. The Arizona board of regents.

5. The auditor general.

6. The corporation commissioners and the corporation commission other than the securities division.

7. The office of the governor.

8. The constitutional defense council.

9. The office of the state treasurer.

10. The Arizona commerce authority.

11. The water infrastructure finance authority of Arizona.

E. If the attorney general determines that he the attorney general is disqualified from providing judicial or quasi-judicial legal representation or legal services on behalf of any state agency in relation to any matter, the attorney general shall give written notification to the state agency affected. If the agency has received written notification from the attorney general that the attorney general is disqualified from providing judicial or quasi-judicial legal representation or legal services in relation to any particular matter, the state agency is authorized to make expenditures and incur indebtedness to employ attorneys to provide the representation or services.

F. If the attorney general and the director of the department of agriculture cannot agree on the final disposition of a pesticide complaint under section 3-368, if the attorney general and the director determine that a conflict of interest exists as to any matter or if the attorney general and the director determine that the attorney general does not have the expertise or attorneys available to handle a matter, the director is authorized to make expenditures and incur indebtedness to employ attorneys to provide representation or services to the department with regard to that matter.

G. Any department or agency of this state authorized by law to maintain a legal division or incur expenses for legal services from funds derived from sources other than the general revenue of the state, or from any special or trust fund, shall pay from such source of revenue or special or trust fund into the general fund of the state, to the extent such funds are available and on a reimbursable basis for warrants drawn, the amount actually expended by the department of law within legislative appropriations for such legal division or legal services.

H. Appropriations made pursuant to subsection G of this section shall not be subject to lapsing provisions otherwise provided by law. Services for departments or agencies to which this subsection and subsection F of this section are applicable shall be performed by special or regular assistants to the attorney general.

I. Notwithstanding section 35-148, monies received by the attorney general from charges to state agencies and political subdivisions for legal services relating to interagency service agreements shall be deposited, pursuant to sections 35-146 and 35-147, in an attorney general agency services fund. Monies in the fund are subject to legislative appropriation and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

J. Unless otherwise provided by law, monies received for and belonging to the state and resulting from compromises and settlements entered into pursuant to subsection B of this section, excluding restitution and reimbursement to state agencies for costs or attorney fees, shall be deposited into the state treasury and credited to the state general fund pursuant to section 35-142. Monies received for and belonging to the state and resulting from a compromise or settlement are not considered custodial, private or quasi-private monies unless specifically provided by law. On or before January 15, April 15, July 15 and October 15, the attorney general shall file with the governor, with copies to the director of the department of administration, the president of the senate, the speaker of the house of representatives, the secretary of state and the staff director of the joint legislative budget committee, a full and complete account of the deposits into the state treasury made pursuant to this subsection in the previous calendar quarter. For the purposes of this subsection, "restitution" means monies intended to compensate a specific, identifiable person, including this state, for economic loss.

K. For the purposes of this section:

1. "Settlement agreement":

(b) Does not include any of the following:

(i) Agreements made under title 28 to resolve construction contract disputes.

(ii) The settlement of disputes arising from audits, defaults or breaches of permits, contracts of sale, easements or leases by the state land department.

(iii) Agreements made by the department of administration to resolve construction contract claims made against this state by contractors or subcontractors.

2. "Settlement agreement report" means a report that contains a copy of the settlement agreement, unless the agreement is not allowed to be disclosed due to a court order or other legal requirement, and that does all of the following:

(a) States the total amount of the settlement.

(b) States the payer of the settlement.

(d) Summarizes the circumstances related to the settlement. END_STATUTE