Assigned to APPROP AS VETOED
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
VETOED
FACT SHEET FOR S.B. 1525/H.B. 2572
capital outlay; appropriations; 2023-2024.
Purpose
Makes statutory and session law changes relating to capital outlay necessary to implement
the FY 2024 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general
appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is
often necessary to make statutory and session law changes to effectuate the budget. Thus, separate
bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because
BRBs contain substantive law changes, the Arizona Constitution provides that they become
effective on the general effective date, unless an emergency clause is enacted.
S.B. 1525 contains the budget reconciliation provisions for changes relating to capital
outlay.
Provisions
Building Renewal
1. Appropriates the following amounts in FY 2024 to the following agencies from the specified
funds for major maintenance and repair activities for state buildings:
Agency Fund Amount
Arizona Department of
Administration (ADOA)
Capital Outlay Stabilization
Fund (COSF)
$16,000,000
Arizona Department of
Corrections (ADC)
Department of Corrections
Building Renewal Fund
$5,864,300
Arizona Game and Fish
Department (AZGFD)
Game and Fish Fund $1,776,400
Arizona State Lottery
Commission
State Lottery Fund $214,200
Arizona Department of
Transportation (ADOT)
State Highway Fund (SHF) $18,139,400
State Aviation Fund $441,900 FACT SHEET – Vetoed
S.B. 1525/H.B. 2572
Page 2
2. Requires ADOA to allocate monies from the capital outlay appropriation to state agencies for
necessary building renewal.
3. Reduces the ADOA appropriation for building renewal by the difference between the amount
appropriated and the balance in the COSF, if monies in the COSF are insufficient to fund the
appropriation.
4. Prohibits ADC from spending any monies from the capital outlay appropriation on personal
services or overhead expenses related to managing projects funded by the appropriation.
Individual Capital Projects
5. Appropriates $31,422,000 from the state General Fund (state GF) in FY 2024 to ADC to
replace evaporative cooling statewide with HVAC.
ADOT Statewide Highway Construction
6. Appropriates $444,243,000 from the SHF in FY 2024 to ADOT to:
a) plan and construct state highways;
b) acquire rights-of-way; and
c) provide for the cost of contracted field administration and engineering on construction
projects and debt service payments on bonds issued for highway construction.
7. Appropriates balances and collections in the SHF that exceed the amount appropriated by the
General Appropriations Act and the Capital Outlay Budget Reconciliation Act to ADOT for
authorized purpose.
8. Requires ADOT, by November 1, 2023, to report to the Directors of JLBC and OSPB on:
a) ADOT's actual prior year, estimated current year and upcoming budget year highway
construction expenses from all fund sources;
b) capital outlay information for FYs 2023, 2024 and 2025; and
c) ADOT's outstanding debt principal balance at the end of FY 2025 and the estimated debt
service payment amounts for FYs 2025, 2026, 2027 and 2028.
9. Requires ADOT's highway construction expenses report to:
a) include appropriated monies, federal monies, local agency monies, state highway monies,
bond proceeds and regional area road monies; and
b) be in the same format as the prior year unless the Directors of JLBC and OSPB have
approved modifications.
10. Requires ADOT's reported capital outlay information to be in the same format as tables two,
three and six of the FY 2023 Appropriations Report.
11. Requires ADOT's estimated outstanding debt principal balance and estimated debt service
payments report to include SHF statewide construction bonds, Arizona Highway User Revenue
Fund bonds, Maricopa Association of Governments and Pima Association of Governments
controlled access bonds, Maricopa Regional Area Road Fund bonds and grant anticipation
notes. FACT SHEET – Vetoed
S.B. 1525/H.B. 2572
Page 3
12. Directs ADOT's estimated outstanding debt principal balance and estimated debt services
payment report to be comparable to the information in the FY 2023 Appropriations Report.
13. Exempts the $444,243,000 appropriation in FY 2023 to ADOT from the SHF for statewide
highway construction from:
a) review by the Joint Committee on Capital Review (JCCR); and
b) lapsing until the purpose for which the appropriation was made has been accomplished or
abandoned or the appropriation stands unexpended or unencumbered for a full fiscal year.
ADOT Airport Planning and Development
14. Appropriates $35,000,000 from the State Aviation Fund in FY 2024 to ADOT to plan,
construct, develop and improve state, county, city or town airports as determined by the State
Transportation Board.
15. Appropriates any balances and collections in the State Aviation Fund that exceed the amount
appropriated by the General Appropriations Act and the Capital Outlay Budget Reconciliation
Act to ADOT for authorized purposes.
16. Requires ADOT, by December 31, 2023, to report to JLBC on the status of all aviation grant
awards and distributions and requires the report to delineate projects by individual airport and
fiscal year, including any future year commitments.
17. Exempts the $35,000,000 appropriation from the State Aviation Fund in FY 2024 to ADOT
for airport planning and development from:
a) JCCR review; and
b) lapsing until the purpose for which the appropriation was made has been accomplished or
abandoned or the appropriation stands unexpended or unencumbered for a full fiscal year.
Miscellaneous
18. Allows ADOA to spend up to five percent of all capital outlay appropriations to ADOA
designated to state agencies on project management expenditures for project management of
building renewal and capital projects.
19. Prohibits ADOA from spending any other capital outlay appropriations on personal services
or employee-related expenditures or for maintenance contracts on building components and
equipment without review by the JCCR.
20. Prohibits ADOA from spending any other capital outlay appropriations on personal services
or employee-related expenditures of state employees, except for services provided as part of
the Inmate Construction Program for correctional facilities.
21. Becomes effective on the general effective date.
FACT SHEET – Vetoed
S.B. 1525/H.B. 2572
Page 4
Governor's Veto Message
The Governor indicates in her veto message that S.B. 1525, and the FY 2024 state budget
as a whole, does not address her priorities to work together on a budget that addresses the state's
housing crisis, lowers costs, prepares the workforce and invests in public education.
Senate Action House Action
APPROP 1/31/23 DP 6-4-0 APPROP 2/1/23 DP 9-6-0-0
3
rd
Read 2/1/23 16-14-0 3
rd
Read 2/13/23 31-27-2
(S.B. 1525 was substituted for H.B. 2572 on
3
rd
Read)
Vetoed by the Governor 2/16/23
Prepared by Senate Research
February 17, 2023
LMM/GHR/sr