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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
barbering
and cosmetology fund; enforcement(NOW: political subdivision entity; benefits)
As Passed by the Senate, S.B. 1117 clarified the authorized use of monies in the Barbering and Cosmetology Fund's separate account.
The House of Representatives adopted a strike-everything amendment that does the following:
Purpose
Allows a political subdivision entity to procure insurance from any insurer authorized by the Director of the Department of Insurance and Financial Institutions (DIFI) or establish a self-insurance program. Adds a political subdivision entity to the definition of public agency for the purposes of intergovernmental operations.
Background
In addition to authority granted by statute or city charter, any city, town, county, special health care district or other political subdivision that is located in a county with a population greater than 1,000,000 persons and whose governing body is composed of members of a county board of supervisors may procure insurance from any insurer authorized by the Director of DIFI or establish a self-insurance program for the management and administration of a system of insurance and direct payments, including risk management consultation, to provide: 1) health, accident, life or disability benefits for employees and officers of the outlined entity; and 2) payment of any property loss sustained or lawful claim of liability or fortuitous loss made against the outlined entity.
An outlined entity that establishes a self-insurance program must place all funds into a trust fund for the purposes of direct payment of benefits, losses or claims in amounts as determined appropriate by the governing body of the entity, except that any entity must designate a risk management consultant or licensed insurance administrator, and the trust must be administered by at least five joint trustees, as prescribed. An entity that establishes a trust fund may not make any expenditure from the trust fund for any purpose not prescribed. If a trust fund is no longer used by the entity for the outlined purposes, the trust fund reverts to the general fund of the entity during the same fiscal year. The authority granted to an entity for the procurement of insurance or the creation and maintenance of a self-insurance program are exempt from statutes relating to insurance, except that any health, life, accident or disability benefit plan must conform to statutory benefits requirements. An entity may not procure insurance from any insurer not authorized by the Director of DIFI (A.R.S. § 11-981).
For the purposes of intergovernmental operations, a public agency includes: 1) the Federal Government or any federal department or agency; 2) Indian tribes; 3) Arizona or any other state; 4) all departments, agencies, boards and commissions of Arizona or any other state; 5) counties; 6) school districts; 7) fire districts; 8) cities; 9) towns; 10) all municipal corporations; and 11) any other political subdivisions of the state or any other state (A.R.S. § 11-951).
A political
subdivision entity is an entity: 1) that is located in Arizona; 2) that is
created in whole or in part by political subdivisions, including
instrumentalities of political subdivisions;
3) where a majority of the membership of the entity is composed of political
subdivisions; and
4) whose primary purpose is the performance of a government-related service (A.R.S.
§ 38-711).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
2. Adds a political subdivision entity to the definition of public agency for the purposes of intergovernmental operations.
3. Defines political subdivision entity.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date.
Amendments Adopted by the House of Representatives
ˇ Adopted the strike-everything amendment relating to political subdivision entity insurance.
House Action
APPROP 3/31/25 DPA/SE 18-0-0-0
3rd Read 4/30/25 40-10-10
Prepared by Senate Research
April 30, 2025
AN/SDR/slp