ARIZONA STATE SENATE
Forty-seventh Legislature, Second Regular Session
VETOED
FINAL REVISED
FACT SHEET FOR H.B. 2650
appropriation of federal monies
Purpose
Authorizes the Legislature to appropriate noncustodial federal monies.
Background
Current statute (A.R.S. § 35-113.01) states that all state agencies, boards, commissions and departments shall submit copies of all contracts, agreements, applications and requests for federal funds to the Arizona Department of Administration (ADOA). Statute states that requests for federal funds must include the purpose for which the project or program is desired and the source and amount of funds to be provided. Upon receipt of federal funds, ADOA shall be notified by the agency, board, commission or department.
According to a survey done by the National Conference of State Legislatures in 1999, there are 44 state legislatures that can appropriate federal monies or authorize the use of federal monies. Of those, 25 legislatures have interim control over the receipt of unanticipated federal funds.
Generally, there are two categories of federal monies received by the state, custodial and noncustodial. Federal monies that do not provide discretion to the state for disbursement of the monies are considered custodial. Noncustodial monies are block grants and other federal monies that provide the state with discretion regarding the development, implementation or operation of a program or service.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires all noncustodial federal monies to be accounted for separately from other accounts or funds.
2. Grants the Legislature authority to appropriate noncustodial federal monies. If the Legislature does not appropriate, authority reverts to the state agency.
3. Requires the Legislature to specify the purpose for which federal monies are to be used.
4. Allows the Legislature to make a lump sum appropriation for any unanticipated federal monies that may become available while not in session. Requires the Joint Legislative Budget Committee (JLBC) to review in advance the expenditure of monies from the lump sum appropriation.
5. Requires the appropriation to be reduced if the amount of federal monies received is less than the amount appropriated.
6. Requires the appropriation to remain at the designated amount if the amount of federal monies received is more than the amount appropriated. Requires the State Treasurer to credit the excess amount to the appropriate agency account and states that JLBC shall review expenditures of the additional monies.
7. Defines “budget unit” and “noncustodial federal monies.”
8. Becomes effective on the general effective date.
Governor’s Veto Message
In her veto letter for H.B. 2650, the Governor stated that she continues to oppose legislative efforts to appropriate or condition the spending of federal funds. She also states that this legislation would unnecessarily impose a host of bureaucratic reporting requirements and conditions on the receipt and use of federal funds.
House Action Senate Action
APPROP (B) 2/21/06 DP 9-5-0-1 APPROP 4/18/06 DP 6-4-1-0
APPROP (P) 2/22/06 DP 9-3-0 -3 3rd Read 4/24/06 18-12-0
3rd Read 3/13/06 39-21-0
Vetoed by the Governor 4/28/06
Prepared by Senate Research
May 2, 2006
CMH/ES/jas