Assigned to GOV & APPROP AS PASSED BY COMMITTEE ARIZONA STATE SENATE Fifty-Seventh Legislature, First Regular Session AMENDED 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 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. ยง 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. There is no anticipated fiscal impact to the state General Fund associated with this legislation. 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; FACT SHEET โ Amended H.B. 2268 Page 2 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. 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; FACT SHEET โ Amended H.B. 2268 Page 3 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 private and public monies received by the Authority. 10. Specifies that monies in the Fund are subject to legislative appropriation and exempt from lapsing. 11. 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. 12. Requires the State Treasurer, on notice from the Authority, to invest and divest monies in the Fund and monies earned. 13. Requires monies earned from the investment of monies in the Fund to be credited to the Fund. 14. Requires all monies appropriated to DFFM for the Authority to be used by DFFM exclusively for the operation of the Authority. 15. 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. 16. 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. 17. Requires monies from the Fund to be used to supplement, rather than supplant, other monies that are available for wildfire prevention and mitigation. 18. Requires the Authority to have the Fund audited by a certified public accountant every two years. 19. Requires the Authority to file a certified copy of the audit with the Auditor General (OAG) within five days after completion of the audit. FACT SHEET โ Amended H.B. 2268 Page 4 20. Allows the OAG to make further audits and examinations as the OAG deems necessary and take appropriate action relating to the audit. 21. Becomes effective on the general effective date. Amendments Adopted by Committee 1. Removes the $20,000,000 annual contribution to the Fund from the premium tax from fire insurers. 2. Makes conforming changes. House Action Senate Action LARA 2/11/25 W/D APPROP 4/1/25 DPA 10-0-0 APPROP 2/24/25 DPA/SE 16-2-0-0 3 rd Read 3/4/25 46-12-0 Prepared by Senate Research April 2, 2025 LMM/SDR/ci