HB 2202
Initials AF Page 1 Appropriations
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
HB 2202: EORP; appropriations; repayment
Sponsor: Representative Livingston, LD 28
Committee on Appropriations
Overviews
An emergency measure that appropriates $609,054,500 from the Budget Stabilization Fund
in FY 2024 to pay the unfunded accrued liability of the Elected Officials' Retirement Plan
(EORP) and establishes a repayment schedule for local governments.
History
EORP is a defined-benefit pension plan for state, county and municipal elected officials and
judges. Established in 1985 with the merger of separate retirement plans for judges and for
elected officials, EORP was closed to new members on January 1, 2014 (Laws 2013, Ch. 217).
EORP is administered by the Public Safety Personnel Retirement System (PSPRS) Board
(A.R.S. § 38-802). Employer and employee contribution rates are actuarially determined to
meet the normal cost plus an amount needed to amortize the unfunded accrued liability over
a fixed period (A.R.S. § 38-810). EORP is currently 40.7% funded, reflecting the market value
of plan assets compared to the amount of liabilities (JLBC).
Revenues from fees charged by the Supreme Court, Court of Appeals, Superior Court and
Justice of the Peace courts, as well as notary bond fees, are partially distributed to EORP
(A.R.S. §§ 12-119.01; 12-120.31; 12-284.03; 22-281; 41-178). These revenues are used by
EORP first to pay for the qualified governmental excess benefit arrangement (QEBA) and then
to subsidize employer contribution rates.
The QEBA allows EORP to provide full benefits to a retiree whose benefit exceeds federal
Internal Revenue Code limits. Under federal law, the QEBA may not be paid from EORP
assets (A.R.S. § 38-803.01; 26 U.S.C. § 415).
Provisions
Fees and the Qualified Governmental Excess Benefit Arrangem ent
1. Redirects the 26% of Supreme Court and Court of Appeals fees that are designated for
EORP to instead go to the Arizona Department of Administration (ADOA) to:
a) deposit the amount needed by the PSPRS Board for the QEBA to the PSPRS Board or
to employers; and
b) deposit the remaining monies into the state General Fund (GF). (Sec. 1, 2, 10)
2. Replaces existing Superior Court and Justice of the Peace court fee allocations to EORP
with distributions to ADOA for deposit with the PSPRS Board for the QEBA and then for
all remaining monies into the GF. (Sec. 3, 4, 10)
3. Reallocates the 23.79% of notary bond fees from EORP to ADOA to offset the QEBA and,
with any remaining monies, be deposited into the GF. (Sec. 9, 10)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☒ Emergency (40 votes) ☐ Fiscal Note HB 2202
Initials AF Page 2 Appropriations
4. Directs ADOA to coordinate with the PSPRS Board for the compliance of the QEBA with
federal tax law. (Sec. 5)
5. Requires the PSPRS Board to provide ADOA with information to determine the amount
required for the EORP QEBA. (Sec. 5)
Appropriations and Repayment
6. Ends the annual statutory GF appropriation of $5,000,000 to EORP in FY 2024, rather
than FY 2043. (Sec. 6)
7. Establishes a ten-year schedule, from FY 2025 through FY 2034, of required repayment
to the GF for the share of EORP unfunded accrued liability by specified county, city and
town governments. (Sec. 7)
8. Instructs the State Treasurer to annually bill each county, city and town on the
repayment schedule by January 15 and to withhold shared Transaction Privilege Tax
revenues up to the amount billed if a county, city or town does not pay in full by March
15 annually. (Sec. 7)
9. Allows, at the request of a county, city or town, the State Treasurer to establish an
accelerated repayment schedule, which would be exempted from the expenditure
limitation as a contractual long-term obligation. (Sec. 7)
10. Appropriates $609,054,500 from the Budget Stabilization Fund in FY 2024 to EORP to
pay the unfunded accrued liability. (Sec. 11)
11. Directs the PSPRS Board to account for the appropriation in its June 30, 2024 actuarial
valuation of EORP and in setting EORP's FY 2025 contribution rates. (Sec. 11)
12. Makes the following GF reductions to FY 2025 appropriations:
a) ($3,000,000) from the ADOA distribution to counties for EORP contributions;
b) ($9,488,300) from the Judiciary-Superior Court judge's compensation line item;
c) ($3,115,900) from the Judiciary-Court of Appeals;
d) ($52,700) from the Attorney General;
e) ($232,800) from the Corporation Commission;
f) ($49,800) from the Superintendent of Public Instruction;
g) ($55,600) from the Office of the Governor;
h) ($844,600) from the Judiciary-Supreme Court;
i) ($421,700) from the Senate;
j) ($843,400) from the House of Representatives;
k) ($29,300) from the State Mine Inspector;
l) ($41,000) from the Secretary of State; and
m) ($41,000) from the State Treasurer. (Sec. 12)
Miscellaneous
13. Repeals the repayment schedule effective July 1, 2035. (Sec. 8)
14. Contains an emergency clause. (Sec. 13)
15. Makes technical and conforming changes. (Sec. 1-3, 5-7)