Assigned to JUDE AS PASSED BY COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
FACT SHEET FOR H.B. 2222
settlement agreements; report; approval
Purpose
Requires a city, town or county (local government) to submit a settlement agreement report
to outlined parties for review before entering into the settlement agreement.
Background
The Attorney General (AG) may compromise or settle any action or claim by or against
the State of Arizona or any department, board or agency thereof. If the compromise or settlement
involves a particular department, board or agency of the State of Arizona, then the compromise or
settlement must be first approved by the department, board or agency. If no department or agency
is named or otherwise materially involved, then the Governor's approval must be first obtained.
When monetary claims are made against the state, the Director of the Arizona Department of
Administration (ADOA) has limited authority to approve payments to claimants, provided that
claimants meet statutorily defined timelines and that sufficient monies are available to pay the
approved claims. Claims that are more than one fiscal year old and less than four fiscal years old
must be presented by ADOA to the Legislature to request appropriations sufficient for payment of
the claims (A.R.S. §§ 35-191 and 41-192).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Requires a local government, at least 90 days before entering into a settlement agreement that
is $500,000 or more, to submit the settlement agreement report to the Governor, the President
of the Senate, the Speaker of the House of Representatives and the AG describing the proposed
terms of the settlement agreement.
2. Requires a local government, before entering into a settlement agreement that is $1,000,000 or
more, to submit the proposed settlement agreement to the Joint Legislative Budget Committee
(JLBC) for review.
3. Allows the JLBC to recommend that the local government amend the proposed settlement
agreement.
4. Stipulates that a finalized settlement agreement that is $1,000,000 or more is not legally
binding if it was not submitted to the JLBC for review. FACT SHEET - Amended
H.B. 2222
Page 2
5. States that legally binding contracts entered into by a local government are a matter of
statewide concern due to the impact on public finances, including state finances.
6. Requires the AG, at least 30 days before entering into a settlement agreement, to submit a
settlement agreement report to the President of the Senate and the Speaker of the House of
Representatives describing the proposed terms of the settlement agreement.
7. Defines settlement agreement as a consent decree, an agreement or any other legally binding
document or representation that resolves a threatened or pending lawsuit between a city or
town and another party by requiring a city or town to take legally binding action.
8. Excludes, from the definition of settlement agreement:
a) agreements authorized by statute to resolve construction contract disputes;
b) the settlement of disputes arising from audits, defaults or breaches of permits, contracts of
sale, easements or leases by the Arizona State Land Department;
c) agreements made by ADOA to resolve construction contract claims made against the State
of Arizona by contractor or subcontractors;
d) the settlement of a civil litigation lawsuit involving personal injury claims; and
e) agreements made pursuant to workers' compensation claims.
9. Defines settlement agreement report as a report that contains:
a) a copy of the settlement agreement, unless the agreement is not allowed to be disclosed
due to a court order or other legal requirement;
b) the total amount of the settlement and the source of the monies that it intended for use for
the payment of the settlement;
c) the payer of the settlement;
d) the receipt of the payment; and
e) a summary of the circumstances related to the settlement.
10. Makes technical changes.
11. Becomes effective on the general effective date.
Amendments Adopted by Committee
• Exempts settlement agreements made pursuant to workers' compensation claims from the
requirement that agreements be submitted to the Legislature and JLBC for review.
House Action Senate Action
GOV 2/19/25 DP 4-3-0-0 JUDE 3/19/25 DPA 4-3-0
3
rd
Read 3/4/25 37-21-2
Prepared by Senate Research
March 21, 2025
ZD/ci