Assigned to APPROP AS ENACTED
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
ENACTED
AMENDED
FACT SHEET FOR H.B. 2899/S.B. 1737
capital outlay; appropriations; 2024-2025
Purpose
Makes session law changes relating to capital outlay necessary to implement the FY 2025
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.
H.B. 2899/S.B. 1737 contains the budget reconciliation provisions for changes relating to
capital outlay.
Provisions
Building Renewal
1. Appropriates the following amounts in FY 2025 to the following state agencies from the
specified funds for major maintenance and repair activities for state buildings:
Agency Fund Source Amount % of Formula
Arizona Department
of Administration
(ADOA)
Capital Outlay
Stabilization Fund
(COSF)
$19,000,000 100%
Arizona Department
of Corrections,
Rehabilitation and
Reentry (ADCRR)
ADCRR Building
Renewal Fund
$5,864,300 68.53%
Prison Construction
and Operations Fund
$2,692,700 31.47%
Arizona Department
of Transportation
(ADOT)
State Highway Fund
(SHF)
$22,082,800 98.03%
State Aviation Fund $457,300 1.97% FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 2
Agency Fund Source Amount % of Formula
Arizona Game and
Fish Department
(AZGFD)
AZGFD Fund $1,795,000 100%
Arizona State Lottery
Commission
State Lottery Fund $218,200 100%
2. Requires ADOA to allocate appropriated monies to state agencies for necessary building
renewal.
3. Reduces the ADOA appropriation for building renewal by the difference between the
appropriated monies and the balance in the COSF, if monies in the COSF are insufficient to
fund the $19,000,000 appropriation.
4. Allows ADOA to use monies appropriated for building renewal in FY 2025 to retrofit facilities
for space consolidation initiatives.
5. Prohibits ADCRR from spending any of the appropriations for building renewal in FY 2025
on personal services or overhead expenses related to managing projects funded by the
appropriation.
Individual Projects
6. Appropriates the following amounts in FY 2025 to the following state agencies and boards
from the specified funds for individual capital projects:
Agency Purpose Fund Amount
ADOT Additional vehicle
fueling replacement
funding for facilities in
Flagstaff, Needle
Mountain, Kingman,
Tucson, Willcox, Three
Points, Saint David,
Springerville, Holbrook
and Chambers
SHF $9,088,200
Arizona Pioneers’
Home
Capital improvements Miners' Hospital for
Miners with Disabilities
Land Fund
$465,000
Arizona State Parks
Board (ASPB)
Capital improvements State Parks Revenue Fund $3,022,000
7. Requires the ASPB to report to the Joint Committee on Capital Review (JCCR) and the
Governor's Office of Strategic Planning and Budgeting (OSPB) if the ASPB revises the plan
for any project funded by the appropriation because the ASPB receives land and water
conservation grant funding. FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 3
8. Exempts, from lapsing until June 30, 2025, the $1,800,000 appropriation to ADOT in FY 2022
to replace vehicle fueling facilities in Flagstaff, Holbrook and Kingman.
ADOT Airport Planning and Development
9. Appropriates $25,550,000 from the State Aviation Fund in FY 2025 to ADOT to plan,
construct, develop and improve state, county, city or town airports, as determined by the State
Transportation Board.
10. Exempts the $25,550,000 appropriation from JCCR review.
11. Appropriates any balances and collections in the State Aviation Fund that exceed the amount
appropriated by the General Appropriations Act and Capital Outlay Budget Reconciliation Act
to ADOT in FY 2025 for authorized purposes.
12. Requires ADOT, by December 31, 2024, to report to the Joint Legislative Budget Committee
(JLBC) Staff on the status of all aviation grant awards and distributions.
13. Requires the report on aviation grants to delineate projects by individual airport and fiscal year,
including any future year commitments.
ADOT Statewide Highway Construction
14. Appropriates $462,488,000 in FY 2025 from the SHF 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.
15. Includes, as state highways ADOT may use the appropriation for, the national system of
interstate highways within Arizona, the state and county primary or secondary systems and
urban rural routes.
16. Exempts the $462,488,000 appropriation from review by the JCCR.
17. Requires the $87,500,000 appropriation from the state GF in FY 2024 to ADOT to extend State
Route (SR) 24, including a traffic interchange at SR 24 and Ironwood Road, to be distributed
to the Town of Queen Creek by June 30, 2024.
18. Appropriates balances and collections in the SHF that exceed the amount appropriated by the
FY 2025 General Appropriations Act and the Capital Outlay Budget Reconciliation Act to
ADOT for authorized purposes.
19. Requires ADOT, by November 1, 2024, 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 2024, 2025 and 2026; and
c) ADOT's estimated outstanding debt principal balance at the end of FY 2026 and the
estimated debt service payment amounts for FYs 2026 through 2029. FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 4
20. Requires ADOT's highway construction expenses report to:
a) include fund sources from bond proceeds and appropriated, federal, local agency, state
highway 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.
21. Requires ADOT's reported capital outlay information to be in the same format as tables two,
three and six of the FY 2024 Appropriations Report.
22. Requires ADOT's report on estimated outstanding debt principal balance and service payments
to:
a) include grant anticipation notes, Maricopa and Pima Associations of Governments
controlled access bonds and bonds for the Highway User Revenue Fund, Maricopa
Regional Area Road Fund and SHF statewide construction; and
b) be comparable to the information in the FY 2023 Appropriations Report.
ADOT Highway Project Reallocations
23. Reallocates the following amounts in FYs 2021, 2023 and 2024 to ADOT from the specified
funds for highway projects:
Purpose FY Fund Source Amount
Conduct a tier 2 study for the Sonoran
Corridor in Pima County
2023 SHF ($2,436,000)
Construct roundabout at the intersection of SR 69 and
169
2024 SHF $939,100
Design of SR 87 intersection improvements at Arica
and Shedd Road
2024 state GF $315,000
Design work and engineer improvements on SR 85
between mile post 123 and Maricopa Road
2024 SHF $12,600,500
Design work for the interchange at SR 303 and
Interstate 17
2023 SHF ($4,000,000)
Final design plan, right-of-way and easements for an
overpass at Riggs Road and SR 347
2024 SHF $1,500,000
Improve intersection on SR 347 at Casa Blanca Road
and Cement Plant access
2024 state GF $1,901,000
Improve SR 90 near Fort Huachuca 2021 state GF ($2,095,000)
Improve SR 260 within Navajo County 2024 state GF $172,200
Improve SR 83 within Santa Cruz County 2024 SHF $1,00,000
Improve SR 90 from Moson Road to Campus Drive 2023 SHF ($3,300,000)
Improve the interchange at SR 303 and U.S. Route 60 2024 state GF $167,000
Rehabilitate pavement along SR 90 between Campus
Drive and U.S. Border Patrol Station in Huachuca City
2023 SHF ($8,720,000) FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 5
Purpose FY Fund Source Amount
Rehabilitate pavement along U.S. Route 191 between
Armory Road and East Safford
2023 SHF ($7,038,200)
Repave U.S. Route 60 between Morristown and
Wickenburg
2024 SHF $220,900
Repave U.S. Route 60 between Morristown and
Wickenburg
2024 state GF $206,800
Appropriation Reductions and Reappropriations
24. Removes $29,343,200 from the FY 2023 appropriation from SHF to ADOT to rehabilitate
pavement on road projects.
25. Reduces a total of $61,208,000 in appropriations from the state GF in FY 2023 to ADOA as
follows:
a) from $37,594,200 to $24,718,400 for building renewal;
b) from $1,568,000 to $1,499,400 for building demolition; and
c) from $52,274,000 to $4,010,400 for West Adams building renovations.
26. Removes the following amounts from FY 2024 appropriations from state GF to ADOT:
a) $10,00,000 to improve SR 97 near Bagdad; and
b) $41,000,000 for pavement rehabilitation projects.
27. Reduces a total of $27,539,500 in appropriations from the state GF in FY 2024 to ADOA by:
a) reducing the appropriation, from $25,124,700 to $2,585,200, for building renewal; and
b) removing the $5,000,000 appropriation for electric vehicle charging and advance fuel
infrastructure.
28. Reduces the following appropriations from the state GF in FY 2024 to ADCRR:
a) from $33,942,600 to $14,563,500 for building renewal; and
b) from $66,783,600 to $9,800,000 to replace evaporative cooling statewide with HVAC.
29. Appropriates $49,000,000 from the state GF in FY 2028 to ADOT to construct an overpass at
Riggs Road and SR 347 and removes the following appropriations to ADOT for the same
purpose:
a) $25,000,000 from the state GF in FY 2021; and
b) $24,000,000 from the SHF in FY 2023.
30. Declares the Legislature's intent that the overpass at Riggs Road and SR 347 is funded in FY
2028.
31. Removes the following appropriations to ADOT to design and construct additional vehicle
lanes on I-10 between SR 85 and Citrus Road:
a) $52,090,000 from the state GF in FY 2024; and
b) $55,910,000 from the SHF in FY 2023. FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 6
32. Appropriates a total of $108,000,000 from the state GF to ADOT to design and construct
additional vehicle lanes, separated by a lighted median, on I-10 between SR 85 and Citrus
Road as follows:
a) $30,000,000 in FY 2027; and
b) $78,000,000 in FY 2028.
33. Defers, from FY 2024 to FY 2028, appropriating $9,240,000 from the state GF to ADOT to
distribute to Pinal County for the engineering and design of the West Pinal Parkway East-West
Corridor.
34. Removes the $25,000,000 appropriation from the state GF in FY 2022 to the Department of
Veterans' Services (DVS) for a veterans' home facility project.
35. Appropriates the $25,000,000 from the state GF in FY 2028 to the DVS to construct and
establish a veterans' home facility in the northwestern portion of Arizona.
36. Stipulates that the $25,000,000 appropriation is intended to be Arizona's share of costs and is
not subject to expenditure for any purpose unless the DVS has irrevocable commitments from
the U.S. government to fund at least 65 percent of the total costs.
37. Requires DVS to provide the Arizona Veterans' Service Advisory Commission with:
a) the proposed site location in northwestern Arizona, for approval; and
b) a feasibility analysis of suitable sites to consider when approving the site location.
38. Requires DVS, before spending the reappropriated monies, to submit the scope, purpose and
estimated cost of the capital improvement for JCCR review.
39. Exempts the $25,000,000 reappropriation to DVS from lapsing.
40. Reduces, from $87,500,000 to $59,800,000, the FY 2024 appropriation from the state General
Fund to ADOT to distribute to the Town of Queen Creek to extend SR 24, including a traffic
interchange at SR 24 and Ironwood Road.
41. Stipulates that:
a) the FY 2024 appropriation of $59,800,000 to Queen Creek is prioritized for a traffic
interchange at SR 24 and Ironwood Road; and
b) any remaining appropriated monies must be used to extend SR 24.
42. Transfers, by June 30, 2024, a total of $118,300,000 from the SHF to the state GF to provide
adequate support and maintenance for state agencies.
43. Transfers, by June 30, 2024, $38,237,100 from the State Parks Revenue Fund to the state GF
to provide adequate support and maintenance for state agencies.
44. Requires, by September 1, 2024, the ASPB to submit an expenditure report to JCCR that
describes how monies appropriated from the State Parks Revenue Fund by the FY 2023 Capital
Outlay Budget Reconciliation Act will be allocated for the prescribed capital projects after
deducting the $38,237,100. FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 7
45. Requires the Department to only spend monies on capital projects that were favorably reviewed
by the JCCR before the effective date of this Capital Outlay Budget Reconciliation Act.
46. Specifies that the monies transferred from the SHF to the state GF reflect a portion of
transaction privilege tax revenues that were transferred to the SHF by Laws 2022, Chapter 321.
Miscellaneous
47. Deems the following projects as favorably reviewed by JCCR:
a) $214,200 for Arizona State Lottery Commission building renewal projects for structural
repairs of the Commission's facility in Phoenix;
b) $250,000 for the Arizona Pioneers' Home project to improve the cemetery parking lot;
c) $63,000,000 for Arizona State University (ASU) system revenue bond issuances to
implement information technology infrastructure improvements;
d) $22,000,000 for ASU system revenue bond issuances to fund a utility expansion project on
the Tempe campus;
e) $16,375,000 for Yavapai College bond projects to finance the creation of centers for
learning and innovation, capital improvement projects and software system upgrades;
f) $8,704,900 for ADCRR to purchase HVAC units and electrical equipment for installation
at the Eyman Prison Complex; and
g) $2,600,000 for outlined AGFD capital projects to replace, realign and install underground
valves, water pipelines and piping and construct an equipment storage building.
48. Applies the following financing provisions to the favorably reviewed projects for ASU system
revenue bond issuances:
a) the favorable review does not constitute endorsement of state GF appropriations to offset
any revenues that may be required for debt service or any operations and maintenance costs
when the project is complete;
b) ASU must provide the final debt service schedule and interest rate for the projects to the
JCCR as soon as the final debt service schedule and interest rate are available; and
c) by October 15 of each year until completion of the project, ASU must report to JLBC Staff
on the status and expenditures of the projects, including the project expenditures to date,
any changes to the planned construction timeline, the expected completion date and any
change to the scope of the project.
49. Applies the following financing provisions to the favorably reviewed Yavapai College bond
projects:
a) the College must provide the final debt service schedule and interest rate for the projects
to the JCCR as soon as the final debt service schedule and interest rate are available; and
b) by July 31 of each year until completion of the project, the College must report to JLBC
Staff on the status and expenditures of the projects, including the project expenditures to
date, any changes to the planned construction timeline, the expected completion date and
any change to the scope of the project.
50. Allows ADOA to spend up to five percent of all capital outlay appropriations that are
distributed to state agencies by ADOA for expenditures for the project management of building
renewal and capital projects. FACT SHEET – Amended/Enacted
H.B. 2899/S.B. 1737
Page 8
51. Prohibits ADOA from spending any other capital outlay appropriations:
a) on personal services or employee-related expenditures; or
b) for maintenance contracts on building components and equipment without JCCR review.
52. Prohibits all other capital outlay appropriations from being spent for personal services or
employee-related expenditures of state employees, excluding services provided as part of the
Inmate Construction Program for correctional facilities.
53. Makes technical and conforming changes.
54. Becomes effective on signature of the Governor.
Amendments Adopted by Committee of the Whole
1. Removes, from the outlined FY 2025 appropriations for individual projects, $3,771,400 from
the Arizona Exposition and State Fair Fund to the Arizona Exposition and State Fair Board for
capital improvements.
2. Bifurcates the reappropriation of $108,000,000 in FY 2028 to design and construct additional
vehicle lanes on the Interstate 10 between SR 85 and Citrus Road into appropriating:
a) $30,000,000 in FY 2027; and
b) $78,000,000 in FY 2028.
3. Defers, from FY 2024 to FY 2028, appropriating $9,240,000 from the state GF to ADOT to
distribute to Pinal County for the engineering and design of the West Pinal Parkway East-West
Corridor.
4. Replaces, for the FY 2024 appropriation to improve the interchange at SR 202 and U.S. Route
60, a reduction of $500,000 with an increase of $167,000.
5. Reduces, from $87,500,000 to $59,800,000, the FY 2024 appropriation to distribute to the
Town of Queen Creek to extend SR 24, as prescribed.
6. Stipulates that the FY 2024 appropriation of $59,800,000 to Queen Creek is prioritized for the
specified traffic interchange and any remaining monies must be used to extend SR 24.
7. Adds a statement of legislative intent.
8. Makes technical and conforming changes.
House Action Senate Action
APPROP 6/13/24 DP 9-7-1-0 APPROP 6/13/24 DP 6-5-0
3
rd
Read 6/15/24 34-23-3 3
rd
Read 6/15/24 17-12-1
(H.B. 2899 was substituted for S.B. 1737 on 3
rd
Read)
Signed by the Governor 6/18/24
Chapter 211
Prepared by Senate Research
June 25, 2024
KJA/slp/cs