ARIZONA STATE SENATE
Phoenix, Arizona
Subject to voter approval at the next general election,
authorizes the Legislature to appropriate noncustodial federal monies, the
purpose of which must be consistent with federal law.
According to the most recent survey (June 1995, updated April 1999) by the National Conference of State Legislatures, 44 state legislatures either appropriate federal monies or authorize the use of federal monies. Thirty of those legislatures appropriate a specific amount for a declared purpose, with some imposing an upper limit on state expenditures of federal monies for a fiscal period. Nine legislatures authorize the state to spend federal monies without declaring a specific purpose or amount. Five legislatures make both specific appropriations and open-ended authorizations.
With the exception of the temporary assistance to needy families block grant and various other federal funds received by the Department of Economic Security, the Arizona Legislature does not appropriate federal monies. Generally, there are two categories of federal monies received by the state. Federal monies that do not provide discretion to the state for disbursement of the monies are considered custodial or “pass through” monies. Examples of custodial federal monies are university research grants and direct federal payments to individuals, such as Social Security and Medicare benefits. Conversely, noncustodial federal 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.
The Joint Legislative Budget Committee (JLBC) has estimated that in FY 2001-2002, the state will receive approximately $2.96 billion in noncustodial federal monies. S.C.R. 1019, if approved by the voters, authorizes the Legislature to appropriate such monies.
There is no anticipated fiscal impact to the state general fund associated with this resolution.
1. Specifies the Legislature retains the authority to appropriate noncustodial federal monies. Requires, if the Legislature does not appropriate these monies for a certain fund, grant program or block, the budget unit that has lawful authority to administer and spend the monies pursuant to federal and state law.
2. Requires the Legislature to specify the purpose for which the federal monies will be used, consistent with federal law.
3. Requires, if the amount of federal monies received is less than the amount appropriated, the appropriation to be reduced by the amount of the reduction and the financed activities to be reduced proportionately.
4. Appropriates unanticipated federal monies that become available for a new program when the Legislature is not in session to the budget unit that has lawful authority to administer the monies. Subjects expenditure of these monies to approval by the JLBC.
5. Requires, if the amount of federal monies received is more than the amount appropriated for an existing program, the appropriation to remain the same as designated by the Legislature. Directs the State Treasurer, if authorized by the Legislature, to credit excess federal monies to the appropriate state agency. Subjects expenditures of these monies to approval by the JLBC.
6. Requires all noncustodial federal monies received by any budget unit to be placed in separate accounts or funds as necessary to meet accounting, budgetary and auditing requirements. Allows the Department of Administration to use the most efficient system of accounts and records, consistent with legal requirements and standards necessary for fiscal safeguards.
7. Prescribes definitions.
8. Makes technical and conforming changes.
9. Requires the Secretary of State to submit this resolution to the voters at the next general election.
Amendments
Adopted by Committee of the Whole
· Modifies the processes for appropriating unanticipated federal monies, establishing a bifurcated system for monies received for new versus existing programs.
Senate Action
APPROP 3/12/02 DP 8-1-3-0
3rd Read 3/25/02 17-12-1-0
Prepared by Senate Staff
March 8, 2002