Assigned to GOV & APPROP FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR H.B. 2268
fire districts; homeowner's policies; DIFI
(NOW: wildfire prevention authority; fund)
Purpose
Establishes the Wildfire Prevention Authority (Authority) to identify and make grants to
cities, towns, counties, fire districts and nongovernmental organizations that are located in areas
of Arizona identified as being at a greater fire risk, impacted by elevated wildfire risks or
experiencing insurance policy nonrenewals or premium increases due to wildfire risk. Establishes
the Authority Fund (Fund), consisting of $20,000,000 per year from premium tax from fire insurers
and any private and public monies received by the Authority, to pay the administrative expenses
of the Authority and to make grant awards for the prescribed purposes.
Background
The Arizona Department of Forestry and Fire Management (DFFM) was created to provide
for land management and the prevention and suppression of wildland fires on state land and on
private property located outside of cities and towns. The State Forester administers DFFM and is
responsible for the direction, operation and control of DFFM (A.R.S. § 37-1301).
DFFM administers various grant programs to support projects at the state, region and local
levels, including: 1) the Rural Fire Capacity Grant Program to provide financial assistance to train,
organize and equip fire departments in rural areas and rural communities to prevent and suppress
fires; and 2) fuel mitigation grants to fund mitigation treatment for hazardous forest fuels and
protect communities at risk of wildfire. Priority is given to projects that focus on areas of highest
risk, maximum impact and greatest level of cooperation (DFFM). Laws 2021, First Special
Session, Chapter 1 appropriated $75,000,000 from the state General Fund (state GF) in FY 2021
to DFFM for wildfire emergency response.
Insurance premium taxes apply to premiums paid for insurance covering liabilities that
exist in Arizona. The tax is levied on the net premium income, which is the total amount received
from premiums after deducting cancellations, returned premiums, policy dividends, refund
reductions, savings coupons and similar amounts paid or credited to Arizona policyholders and
not reapplied as premiums for new, additional or extended insurance. 85 percent of the fire
insurance premium tax is transferred to municipalities and fire districts which procure the services
of private fire companies, and to cities and towns which have a fire department or organized fire
district. The allocated funds are used to assist in funding pension plans for fire fighting personnel.
The remaining 15 percent of the fire insurance premium tax is transferred to the state GF. In 2024,
the Department of Insurance and Financial Institutions (DIFI) collected $904,228,585 from all
insurance premium taxes. Of that total, $820,435,089 were deposited into the state GF (A.R.S.
§§ 9-551; 9-552; and 20-224; JLBC Tax Handbook). FACT SHEET
H.B. 2268
Page 2
H.B. 2268 allocates $20,000,000 per year from the premium tax from fire insurers to the
Fund, if the allocation decreases the amount of insurance premium tax deposited in the state GF,
there may be a fiscal impact to the state GF.
Provisions
Authority
1. Establishes the Authority within DFFM to:
a) review fire risk data and tools to identify the areas in Arizona that are at the greatest risk
of damage to or loss of real and personal property from wildfires;
b) prioritize funding to counties, cities, towns and fire districts that have adopted building or
land use codes that are reasonably demonstrated to reduce the risk of damage to or loss of
real and personal property from wildfires;
c) review publicly available insurance data to identify areas of Arizona that may be
experiencing high levels of insurance policy nonrenewals or premium increases due to
enhanced wildfire risk or damage to or loss of real and personal property from wildfires;
d) to the extent that the Authority has available funding, make grants to cities, towns, counties,
fire districts and nongovernmental organizations that are located in the areas of Arizona
identified as being at a greater fire risk by the Authority or that are impacted by elevated
wildfire risks.
2. Allows the Authority to:
a) develop and implement a plan of operation;
b) develop and implement a financial plan;
c) solicit and accept gifts, grants and donations.
3. Requires the Authority to consist of:
a) three members who are appointed by the Governor and who are employed by an insurance
company that writes homeowner's or commercial property insurance policies, with at least
one member who sells homeowner's or commercial insurance policies in wildland urban
interface areas;
b) the Director of DIFI or the Director of DIFI's designee;
c) the Director of DFFM or the Director of DFFM's designee;
d) one member who is appointed by the Governor and who represents a county that has a
population of 200,000 or more persons and that experiences high fire risks;
e) one member who is appointed by the Governor and who represents a county that has a
population of fewer than 200,000 persons and that experiences high wildfire risks;
f) one member who is appointed by the Governor and who represents a city or town that has
a population of 50,000 or more persons and that experiences high wildfire risks;
g) one member who is appointed by the Governor and who represents a city or town that has
a population of fewer than 50,000 persons and that experiences high wildfire risk;
h) one fire chief who is appointed by the Governor and who represents a fire district that
primarily serves residents of a county that has a population of 200,000 persons or more and
that experiences high wildfire risks;
i) one fire chief who is appointed by the Governor and who represents a fire district that
primarily serves residents of a county that has a population of fewer than 200,000 persons
and that experiences high wildfire risks; and
j) two members of the general public who are appointed by the Governor. FACT SHEET
H.B. 2268
Page 3
4. Requires the members of the Authority to serve staggered three-year terms beginning and
ending on the third Monday in January.
5. Requires members of the Authority, at the first meeting each year, to elect a chairperson from
among the members.
6. Requires the Authority to meet at the call of the Chairperson or on request of seven members
of the Authority.
7. Specifies that grants made by the Authority are to:
a) assist with vegetation management and community hardening projects, including
retrofitting existing structures;
b) aid in the removal of brush and other fire fuel for property owners who are unable to create
defensible spaces, including low-income and elderly residents;
c) help modify infrastructure to improve the response capacity of a city, town, county or fire
district to respond to wildfires, including to help decrease wildfire risk and improve the
availability of property insurance to residents of the city, town, county or fire district;
d) provide technical assistance to develop ordinances and local policies to improve wildfire
resilience; and
e) provide technical assistance to residents of a city, town, county or fire district to renovate
or improve property to become more fire resilient.
8. Defines defensible spaces as the area surrounding a building or structure that has been cleared
of combustible materials to slow the spread of fire.
Fund
9. Establishes the Fund, to be administered by the Authority, consisting of $20,000,000 per year
from premium tax from fire insurers and any private and public monies received by the
Authority.
10. Requires, beginning in FY 2025 and each fiscal year thereafter, an insurer's annual report on
direct premium income to separately specify the $20,000,000 of insurance premium tax
distributed to the Fund.
11. Specifies that monies in the Fund are subject to legislative appropriation and exempt from
lapsing.
12. Requires monies in the Fund to be used only to pay the administrative expenses of the
Authority and to make grant awards for the prescribed purposes.
13. Requires the State Treasurer, on notice from the Authority, to invest and divest monies in the
Fund and monies earned.
14. Requires monies earned from the investment of monies in the Fund to be credited to the Fund.
15. Requires all monies appropriated to DFFM for the Authority to be used by DFFM exclusively
for the operation of the Authority. FACT SHEET
H.B. 2268
Page 4
16. Requires monies appropriated from the Fund that are included in the general appropriations
act to be included within separate line items for the Authority operating lump sum
appropriation and any local grants.
17. Allows the Authority to accept nonmonetary contributions, including the services of
individuals, office and secretarial assistance, mailings, printing, office equipment, facilities
and supplies that are necessary to carry out the Authority's functions.
18. Requires monies from the Fund to be used to supplement, rather than supplant, other monies
that are available for wildfire prevention and mitigation.
19. Requires the Authority to have the Fund audited by a certified public accountant every two
years.
20. Requires the Authority to file a certified copy of the audit with the Auditor General (OAG)
within five days after completion of the audit.
21. Allows the OAG to make further audits and examinations as the OAG deems necessary and
take appropriate action relating to the audit.
22. Makes technical and conforming changes.
23. Becomes effective on the general effective date.
House Action
LARA 2/11/25 W/D
APPROP 2/24/25 DPA/SE 16-2-0-0
3
rd
Read 3/4/25 46-12-0
Prepared by Senate Research
March 28, 2025
LMM/SDR/ci