Assigned to APPROP & FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
FACT SHEET FOR H.B. 2027
appropriation; unfunded liability; CORP
Purpose
An emergency measure that appropriates $428,813,700 from the state General Fund (state
GF) in FY 2023 to the Public Safety Personnel Retirement System (PSPRS) to be deposited in the
Administrative Office of the Courts (AOC) Corrections Officer Retirement Plan (CORP) group
employer account to pay unfunded accrued liability. Establishes a repayment schedule that requires
each county to repay the county's share of the unfunded accrued liability paid by the state.
Background
Established in 1986, CORP provides retirement and disability benefits for correctional
officers and employees as well as county, city or town detention officers, dispatchers, probation
officers and surveillance officers (A.R.S. § 38-881). Probation, surveillance and juvenile detention
officers receive CORP coverage under a joinder agreement entered into by AOC with the PSPRS
Board of Trustees (PSPRS Board) (A.R.S. § 38-902).
Established in 1968, PSPRS provides a uniform, consistent and equitable statewide
retirement program for public safety personnel who are regularly assigned hazardous duties in the
employ of the State of Arizona or a political subdivision. PSPRS functions as either a defined
benefit plan or defined contribution plan (A.R.S. § 38-841).
The Legislature appropriated a total of $555,237,300 from the state GF in FY 2022 to
CORP for deposit in various employer groups to pay unfunded accrued liability (JLBC Baseline).
In FY 2022, CORP's funded status was 80.9 percent. CORP's Comprehensive Annual
Financial Report includes amounts of unfunded actuarial liability for each employer group
account. CORP-AOC's unfunded actuarial liability is $428,813,690 and the account's funded status
is 59 percent (PSPRS).
The Joint Legislative Budget Committee fiscal note estimates that H.B. 2027 would
increase state GF spending by $428,813,700 in FY 2023 and, beginning in FY 2024, the
appropriation will result in total annual state GF savings of $34,302,200 (JLBC fiscal note).
Provisions
1. Appropriates $428,813,700 from the state GF in FY 2023 to PSPRS to be deposited in the
CORP-AOC group employer account to pay the unfunded accrued liability.
2. Requires the PSPRS Board to account for the appropriation:
a) in the FY 2023 actuarial valuation of CORP; and
b) when calculating the employee and employer contribution rates for FY 2024. FACT SHEET
H.B. 2027
Page 2
3. Establishes a repayment schedule, from July 1, 2023, until June 30, 2033, for counties to
annually repay the state for amounts paid in FY 2023 on the counties' behalf to CORP for
unfunded accrued liability as follows:
a) $73,200 from Apache County;
b) $281,400 from Cochise County;
c) $613,900 from Coconino County;
d) $198,000 from Gila County;
e) $35,000 from Graham County;
f) $23,000 from Greenlee County;
g) $40,800 from La Paz County;
h) $17,112,200 from Maricopa County;
i) $403,800 from Mohave County;
j) $181,600 from Navajo County;
k) $2,145,200 from Pima County;
l) $1,077,200 from Pinal County;
m) $102,900 from Santa Cruz County;
n) $1,224,500 from Yavapai County; and
o) $675,400 from Yuma County.
4. Requires the State Treasurer to annually bill each county by January 15 and include in each
billing statement the county's remaining payment schedule.
5. Allows each county to pay more than the amount billed, which will be credited against the last
scheduled remaining payment due for that county.
6. Requires, if a county fails to fully pay the annual repayment amount by March 15, the State
Treasurer to withhold the amount owed from the county's share of state-shared revenues until
the entire amount of the annual repayment has been satisfied.
7. Requires all monies paid to or withheld by the State Treasurer to be deposited in the state GF.
8. Reduces, by a total of $10,114,100, outlined FY 2024 appropriations relating to
judiciary-superior court services by:
a) $3,813,600 from the adult standard probation line item;
b) $2,263,700 from the adult intensive probation line item;
c) $101,400 from the community punishment line item;
d) $83,500 from the interstate compact line item;
e) $137,500 from the drug court line item;
f) $668,000 from the juvenile standard probation line item;
g) $1,136,500 from the juvenile intensive probation line item;
h) $753,300 from the juvenile treatment services line item; and
i) $1,156,600 from the juvenile diversion consequences line item.
9. Repeals the county repayment schedule for CORP unfunded accrued liability on July 1, 2034.
10. Becomes effective on signature of the Governor, if the emergency clause is enacted.
FACT SHEET
H.B. 2027
Page 3
House Action
WM 2/1/23 DP 7-1-2-0
APPROP 2/8/23 DPA 9-3-3-0
3
rd
Read 2/22/23 40-20-0
Prepared by Senate Research
March 3, 2023
LMM/GHR/sr