House of Representatives

SB 1246

intergovernmental agreements; procedure

Sponsors: Senators Guenther, Brown, Bowers: et al.

DP	Committee on Counties & Municipalities
X	Committee on Public Institutions & Rural Affairs
	Caucus and COW
	As Passed the House

SB 1246 permits contracting parties of an intergovernmental agreement [IGA] to form a separate legal entity to perform services and expands information included in an intergovernmental agreement.

Summary of the proposed strike-everything amendment to SB 1246:

Each year legislation is passed which requires the Economic Estimates Commission [EEC] within the Department of Revenue to adjust the county expenditure limit for disproportionate share state and federal funding. The annual session law requires the EEC to decrease a county’s expenditure base limit by the state and federal disproportionate share payments received in a fiscal year, then recalculate the county’s expenditure limit using the adjusted base limit for that fiscal year. Currently, only Maricopa and Pima counties have an adjustment to their expenditure limitations for disproportionate share payments.

The Arizona Constitution requires the EEC to determine each year the expenditure limit for the following fiscal year for each county, community college district, city, and town [political subdivisions]. The Constitution requires that the limitation be calculated based upon the actual payments of local revenues of FY 1979-1980, referred to as the base limit. Each year, the base limits for local jurisdictions are adjusted for population and inflation to reach the expenditure limit. The inflation index used by the EEC is the Gross Domestic Product [GDP] price deflator index, which is based on FY 1979-1980 as set forth in the Arizona Constitution.

In statute, if a county exceeds its expenditure limitations without authorization, the auditor general requires the board of supervisors to reduce the allowable levy of primary property taxes. If any other political subdivision exceeds its limit without authorization, the state treasurer is required to withhold a portion of the subdivision’s allocations based on a percentage of the excess expenditures. Last year, HB 2563 was passed which suspended the penalty for exceeding the expenditure limitation for one year, provided expenditures did not exceed an alternative limitation. The strike-everything amendment for SB 1246 extends the suspension of the penalty prescribed in statute for two more years and provides an alternative limitation and penalty.

Provisions

Political Subdivision Expenditure Limitation

· States that the Legislature finds the reduction in the current GDP price deflator used to compute the expenditure limits for municipalities, counties and college districts reflects inaccurate limitations for the political subdivisions.

· Allows a political subdivision to exceed its expenditure limitation in FY 2001-2002 and FY 2002-2003 with a penalty of $100 if the political subdivision does not exceed the alternative limitation.

· Establishes an alternative limitation calculation for cities, towns, counties and community college districts.

Disproportionate Share Adjustment Formula

· Makes the transfer of funding for disproportionate share health services extend through FY 2002-2003.

· Requires the EEC to decrease the base limit of each county in which a county receives disproportionate share payments using a prescribed formula.

· Within the prescribed formula, the GDP price deflator is based on the same fiscal year used to calculate expenditure limitations for FY 2001-2002 and 2002-2003, respectively.

· Requires the EEC to adjust the county expenditure limitations for FY 2001-2002 and 2002-2003.

· Provides the calculations for FY 2001-2002 and 2002-2003 use the same prescribed base limit for Maricopa and Pima counties, respectively, for purposes of determining the adjustment.

---------- DOCUMENT FOOTER ---------

45th Legislature

First Regular Session 2 April 2, 2001

---------- DOCUMENT FOOTER ---------