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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
AMENDED
governor's declaration; fiscal impact analysis
Purpose
Prohibits the State Treasurer, in any year in which the Governor has initially declared a public health emergency, from withholding state shared revenues from a city with a convention center project (eligible city) that failed to meet statutory requirements relating to attendance, funding and revenues for an eligible convention center project (eligible project).
Background
The Arizona Convention Center Development Fund (Fund) was established to encourage eligible cities to develop and expand eligible municipally operated major convention center facilities designed to serve large conventions and trade shows (A.R.S. § 9-601). An eligible project must be approved by the voters of the eligible city, specifically identify municipal sources of dedicated funding for at least 50 percent of the total project cost and have a total project cost of less than $600 million (A.R.S. § 9-605). When construction or expansion of an eligible project is complete, the chief financial officer of the city must certify the completion to the State Treasurer and transmit a copy to the Auditor General (OAG) (A.R.S. § 9-622). The State Treasurer, by August 1 of each year, must distribute Fund monies to each eligible city that has filed a certificate of completion of construction. The amount distributed to an eligible city is computed by dividing the total cost of the eligible project not funded form municipal sources by 300 million and multiplying the quotient by a set amount, which varies depending on the fiscal year in which the money is distributed (A.R.S. § 9-602).
Within five years of the filing of a certificate of completion of construction of an eligible project by an eligible city, the OAG must conduct or contract for an economic and fiscal impact analysis of the eligible project in its fifth year of operation. The analysis must compute the total amount of distributions from the Fund to the eligible city through the first five years after the filing of a certificate of completion of construction and estimate the minimum required attendance at the eligible project for the fifth year of operation and each year thereafter according to a statutory formula. The OAG must estimate the average annual attendance at regional and national conventions and trade shows held at the eligible project and compute the ratio of the estimated average annual attendance to the cumulative sum of the minimum required attendance for those years (attendance ratio). If the computed attendance ratio is less than one, the OAG must compute the difference between the estimated state General Fund (state GF) revenues and the net cumulative distributions and notify the State Treasurer of the attendance ratio and computed funding difference. At the time of the next regularly scheduled distribution, the State Treasurer must withhold the amount of state shared revenues that would otherwise be distributed to the eligible city in an amount equal to the computed funding difference (A.R.S. § 9-626).
If prohibiting the State Treasurer from withholding state shared revenue from any eligible project that failed to meet attendance, funding and revenue requirements in the year a public health emergency is declared results in the difference between the state GF revenues and net cumulative distributions not being withheld, there may be an impact to the state GF.
Provisions
1. Prohibits the State Treasurer, in any year in which the Governor has initially declared a state of war emergency or state of emergency for a public health emergency, from withholding state shared revenues from an eligible city that failed to meet statutory requirements relating to attendance and funding, based on an analysis or estimate conducted by the OAG.
2. Requires the OAG, in conducting a required analysis or estimate of the economic impact of an eligible project in subsequent years following an initial public health emergency declaration, to assume that the:
a) eligible city satisfied minimum attendance requirements in the year of the initial declaration and the year following the declaration; and
b) incremental revenues to the state GF in the year of the declaration and the year following the initial declaration at least equaled distributions by the state from the Fund.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date, retroactive to January 1, 2020.
Amendments Adopted by Committee of the Whole
1. Specifies that the prohibition of withholding state shared revenues from a city with a convention center project applies to the year in which a public health emergency is initially declared.
2. Makes conforming changes.
Senate Action
GOV 2/14/22 DP 5-1-1
Prepared by Senate Research
February 24, 2022
MH/slp