Senate Bill 1262 government lending programs; auditor general
For Committee
Assigned to FIN
Purpose
Effective July 1, 2023, requires the Office of the Auditor General (OAG) to report on state lending
programs and credit support programs and requires the Governor and Legislature to include
outlined information from the OAG's report in their budget proposals.
Background
The Governor must submit to the Legislature a budget within five days of the start of the regular
legislative session. The executive budget must contain a complete plan of proposed expenditures
for budget units and estimates of all available monies and revenues with an explanation of the basis
of the estimates and recommendations for proposed legislation that the Governor deems necessary
to provide revenues to meet the proposed expenditures (A.R.S. ยง 35-111).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires, by June 30, the OAG to issue an annual report on state lending programs and credit
support programs, specified by program, that includes:
a) a single list of all state lending and credit support programs and a citation for each
program's authority to operate;
b) the total amount of all state lending programs and the total amount of debt supported by all
credit support programs; and c) reasonable estimates of the projected defaults of the state lending and credit support
programs using private-sector accounting standards for credit losses.
2. Requires the Governor and Legislature to include the following information based on the
OAG's most recent estimates in their budget proposals:
a) changes in returns or projected defaults of state lending and credit support programs in the
previous fiscal year, including new expenses or revenues;
b) changes in expenses or revenues of state lending and credit support programs in the
previous fiscal year, which must be included as expenses or revenues to calculate a
balanced budget; and
c) projected expenses from defaults of any new state lending or credit support programs using
private-sector accounting standards to calculate a balanced budget.
3. Defines credit support program as any state program that guarantees or provides credit
enhancements, such as state support for interest or principal payments, to the debt of private
parties or political subdivisions, under which the state would be required to provide monies if
the borrower failed to pay.
4. Defines state lending program as any state program that offers monies to private parties or
political subdivisions that comes with the expectation of repayment.
5. Designates this legislation as the Government Lending Transparency Act.
6. Becomes effective on July 1, 2023.
MG/KJA