wildfire prevention authority; fund

HB2292 - 572R - I Ver

REFERENCE TITLE:
wildfire prevention authority; fund

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2292

Introduced by

Representative
Blackman

AN
ACT

amending sections 20-224, 20-224.02,
20-225 and 20-227, Arizona Revised Statutes; amending title 37, chapter 9,
article 1, arizona revised statutes, by adding section 37-1312; relating to the
department of forestry and fire management.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 20-224, Arizona Revised
Statutes, is amended to read:

START_STATUTE
20-224.
Premium tax; reports

A. On or before March 1 of each year, each
authorized domestic insurer, each other insurer and each formerly authorized
insurer referred to in section 20-206, subsection B shall file with the
director a report in a form prescribed by the director showing total direct
premium income including policy membership and other fees and all other
considerations for insurance from all classes of business whether designated as
a premium or otherwise received by it during the preceding calendar year on
account of policies and contracts covering property, subjects or risks located,
resident or to be performed in this state, after deducting from such total
direct premium income applicable cancellations, returned premiums, the amount
of reduction in or refund of premiums allowed to industrial life policyholders
for payment of premiums direct to an office of the insurer and all policy
dividends, refunds, savings coupons and other similar returns paid or credited
to policyholders within this state and not reapplied as premiums for new,
additional or extended insurance.
No

A
deduction shall
not
be made of the cash
surrender values of policies or contracts.� Considerations received on annuity
contracts, as well as the unabsorbed portion of any premium deposit, shall not
be included in total direct premium income, and neither shall be subject to
tax. The report shall separately indicate the total direct fire
insurance premium income received from property located in the incorporated
cities and towns certified by the office of the state fire marshal pursuant to
section 9-951, subsection B, as procuring the services of a private fire
company.

B. Coincident with the filing of the tax report,
each insurer shall pay to the director for deposit, pursuant to sections 35-146
and 35-147, a tax on such net premiums at the following rates:

1. For fire insurance:

(a) On property located in a city or town certified
by the office of the state fire marshal pursuant to section 9-951,
subsection B, as procuring the services of a private fire company, .66 percent.

(b) On all other property, 2.2 percent.

2. For disability insurance, 2.0 percent.

3. For health care service plans, the rates
prescribed under sections 20-837, 20-1010 and 20-1060.

4. For other insurance:

(a) For premiums received in calendar year 2016,
1.95 percent.

(b) For premiums received in calendar year 2017,
1.90 percent.

(c) For premiums received in calendar year 2018,
1.85 percent.

(d) For premiums received in calendar year 2019,
1.80 percent.

(e) For premiums received in calendar year 2020,
1.75 percent.

(f) For premiums received in calendar year 2021 and
for each subsequent calendar year, 1.70 percent.

C. Any payments of tax pursuant to subsection
F

G
of this section shall be
deducted from the tax payable pursuant to subsection B of this
section. Each insurer shall reflect the cost savings attributable to
the lower tax in fire insurance premiums charged on property located in an
incorporated city or town certified by the office of the state fire marshal
pursuant to section 9-951, subsection B, as procuring the services of a
private fire company.�
No

An
insurer

shall be

is not
liable to the state
or to any other person
, or shall be

and is
not
subject to regulatory action
,
relating to
the calculation or submittal of fire insurance premium taxes based in good
faith on the office of the state fire marshal's certification.

D. Eighty-five percent of the tax paid under
this section by an insurer on account of premiums received for fire insurance
shall be separately specified in the report and shall be apportioned in the
manner provided by sections 9-951, 9-952 and 9-972, except
that all of the tax so allocated to a fund of a municipality or fire district
that has no volunteer firefighters or pension obligations to volunteer
firefighters shall be appropriated to the account of the municipality or fire
district in the public safety personnel retirement system and all of the tax so
allocated to a fund of a municipality or fire district that has both full-time
paid firefighters and volunteer firefighters or pension obligations to full-time
paid firefighters or volunteer firefighters shall be appropriated to the
account of the municipality or fire district in the public safety personnel
retirement system where it shall be reallocated by actuarial procedures
proportionately to the municipality or fire district for the account of the full-time
paid firefighters and to the municipality or fire district for the account of
the volunteer firefighters. A municipality or fire district shall
provide to the public safety personnel retirement system all information that
the system deems necessary to perform the reallocation prescribed by this
section.� A full accounting of the reallocation shall be forwarded to the
municipality or fire district and its local boards.

E. Beginning in fiscal year 2026-2027
and Each fiscal year thereafter, $20,000,000 of the total tax paid under this
section by insurers on account of premiums received shall be distributed to the
wildfire prevention authority fund established by section 37-1312.

E.

F.
This
section does not apply to title insurance. Title insurers shall be taxed as
provided in section 20-1566.

F.

G.
Any
insurer that paid or is required to pay a tax of $50,000 or more on net
premiums received during the preceding calendar year, pursuant to subsection B
of this section and sections 20-224.01, 20-837, 20-1010, 20-1060
and 20-1097.07, shall file on or before the fifteenth day of each month
from March through August a report for that month, on a form prescribed by the
director, accompanied by a payment in an amount equal to fifteen percent of the
amount paid or required to be paid during the preceding calendar year pursuant
to subsection B of this section and sections 20-224.01, 20-837, 20-1010,
20-1060 and 20-1097.07.� The payments are due and payable on or
before the fifteenth day of each month and shall be made to the director for
deposit, pursuant to sections 35-146 and 35-147.

G.

H.
Except
for the tax paid on fire insurance premiums pursuant to subsections B and D of
this section, an insurer may claim a premium tax credit if the insurer
qualifies for a credit pursuant to section 20-224.03, 20-224.04, 20-224.06
or 20-224.07.

H.

I.
On
receipt of a properly documented claim, a refund shall be provided to an
insurer from available
funds

monies

for the excess amount of any fire insurance premium improperly paid by the
insurer. The insurer shall reflect the refund in the fire insurance
premiums charged on the property that was charged the excessive amount.

I.

j.
On
or before September 30 of each year, the director of the department of
insurance and financial institutions shall report to the directors of the joint
legislative budget committee and the governor's office of strategic planning
and budgeting on the amount of insurance premium tax credits established by
sections 20-224.03, 20-224.04, 20-224.05, 20-224.06 and
20-224.07 that were used during the previous fiscal year.

J.

K.
For
the purposes of:

1. Subsection B of this section, fire insurance is
one hundred percent of fire lines, forty percent of commercial multiple peril
nonliability lines, thirty-five percent of homeowners' multiple peril
lines, twenty-five percent of farm owners' multiple peril lines and
twenty percent of allied lines.

2. Section 20-416, fire insurance is eighty-five
percent of fire and allied lines.

K.

L.

From and after December 31, 2017,
The director may require that
reports and payments under this section be submitted electronically.� If the
director requires electronic submission, the director shall include on the
department's official website a list of one or more acceptable third-party
services through which an insurer must submit reports and payments.
END_STATUTE

Sec. 2. Section 20-224.02, Arizona Revised
Statutes, is amended to read:

START_STATUTE
20-224.02.

Credit for overpayment of tax

If an overpayment of the taxes imposed by sections 20-224,
20-224.01, 20-837, 20-1010, 20-1060 and 20-1097.07
results from payments made pursuant to the method prescribed in section 20-224,
subsection
F

G
, the director shall within three months after the due date
refund the overpayment without interest.
END_STATUTE

Sec. 3. Section 20-225, Arizona Revised
Statutes, is amended to read:

START_STATUTE
20-225.

Failure to pay tax; penalty; exception

A. Any insurer failing to pay the tax prescribed by
sections 20-224, 20-224.01, 20-837, 20-1010, 20-1060
and 20-1097.07 is subject to a civil penalty not to exceed the greater of

twenty-five dollars

$25
or
five percent of the amount due plus interest at the rate of one percent per
month from the date the tax was due.

B. The director may refuse to renew the certificate
of authority of any insurer failing to pay the tax on or before the date it is
due. The director shall revoke the certificate of authority of any insurer
failing to pay the tax for more than thirty days after it was due.

C. If the director requires the tax to be paid
electronically through a designated third-party service pursuant to
section 20-224, subsection
K

L
, no penalty accrues with
respect to any payment of tax or interest that is late due to delays caused by
the third-party service.
END_STATUTE

Sec. 4. Section 20-227, Arizona Revised
Statutes, is amended to read:

START_STATUTE
20-227.

Disposition of tax proceeds

The purpose of the taxes provided by this title is to assist in
defraying the cost of state government and to lessen the tax burden
upon

on
tangible property. All
taxes collected under this title shall be deposited, pursuant to sections 35-146
and 35-147, in the state general fund and shall be used, together with
the revenue from other sources, to pay appropriations for the maintenance of
state government, except as provided in
subsection C of

section 20-224
,

(firemen's relief and
pension fund)

subsections D
and E
and
in
section 20-224.01
(highway
patrol account of the public safety personnel retirement system)
and
other applicable statutes.
END_STATUTE

Sec. 5. Title 37, chapter 9, article 1, Arizona
Revised Statutes, is amended by adding section 37-1312, to read:

START_STATUTE
37-1312.

Wildfire prevention authority; membership; terms; powers and
duties; fund; audit

A. The wildfire prevention authority
is established in the arizona department of
forestry and
fire management consisting of the following members:

1. Three members who are
appointed by the governor and who are employed by an insurance
company that
writes homeowners or commercial
property insurance policies, at least one of whom sells homeowners or
commercial insurance policies in
wildland urban interface
areas.

2. The director of the department of
insurance and financial institutions or the director's designee.

3. The director of the Arizona
department of forestry and fire management or the director's designee.

4. One member
who
is appointed by the governor and who represents a county
that
has a population of two hundred thousand persons or more and that experiences
high wildfire
risks.

5. One member who is appointed by the
governor and who represents a county that has a population of less than two
hundred thousand persons and that experiences high wildfire risks.

6. One member who is appointed by the
governor and who represents a city or town that has a population of fifty
thousand persons or more and that experiences high wildfire risks.

7. One member who is appointed by the
governor and who represents a city or town that has a population of less than
fifty thousand persons and that experiences high wildfire risks.

8. 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 two hundred thousand persons or more and
that experiences high wildfire risks.

9. 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 less than two hundred thousand persons and
that experiences high wildfire risks.

10. Two members of the general public
who are appointed by the governor.

B. Members shall serve staggered
three-year terms beginning and ending on the third Monday in January. At the
first meeting each year, the members shall select a chairperson from among the
members.� The authority shall meet at the call of the chairperson or on request
of
seven members of the authority.

C. The authority may:

1. Develop and implement a plan of
operation.

2. Develop and implement a financial
plan.

3. Solicit and accept gifts, grants
and donations.

D. The authority shall:

1. Review fire risk data and tools to
identify
the areas in this state that are at the greatest
risk of damage to or loss of real and personal property from wildfires.

2. 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.

3. Review publicly available
insurance data to identify
areas of this state 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.

4. 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 this state identified pursuant to paragraph 1 or 3 of this subsection
or that are impacted by elevated
wildfire risks for the
following purposes:

(
a
) To assist
with
vegetation management and community hardening
projects, including retrofitting existing structures.

(
b
) To 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.�
For the purposes of
this subdivision, "defensible spaces" means the area surrounding a
building or structure that has been cleared of combustible materials to slow
the spread of fire.

(
c
) To help
modify the infrastructure to improve the response capacity of the
city, town, county or fire district to respond to wildfires, including
to help decrease wildfire risks and improve
The
availability of property insurance to residents of the city, town, county or
fire district.

(
d
) To provide
technical assistance to develop ordinances and local policies to improve
wildfire resilience.

(
e
) To provide
technical assistance to
residents of a city, town, county
or fire district to renovate or improve their property
to
become more fire resistant.

E. The wildfire prevention authority
fund is established consisting of $20,000,000 per year from premium tax from
insurers collected pursuant to section 20-224
,
subsection E and any private and public monies received by the
authority. The authority shall administer the fund.� Monies in the
fund shall be used only to pay the administrative expenses of the authority
and

to make grant
awards to carry out the purposes of this section.� Monies in the fund are
subject to legislative appropriation and are exempt from the provisions of
section 35-190 relating to lapsing of appropriations.� On notice from the
authority, the state treasurer shall invest and divest monies in the fund as
provided by section 35-313, and monies earned from the investment shall
be credited to the fund.� All monies appropriated to the arizona department of
forestry and fire management for the wildfire prevention authority shall be
used by the department exclusively for the operation of the wildfire prevention
authority.� Monies appropriated from the fund that are included in the general
appropriations act shall be included within the following separate line items:

1. The wildfire prevention authority
operating lump sum appropriation.

2. Any local grants.

F. The authority may accept
nonmonetary contributions, including the services of individuals, office and
administrative assistance, mailings, printing, office equipment, facilities and
supplies that are necessary to carry out the authority's functions.

G. Monies from the wildfire
prevention authority fund shall be used to supplement, not supplant, other
monies that are available for wildfire prevention and mitigation.

H. The wildfire prevention authority
shall cause an audit to be made of the wildfire prevention authority fund.� The
audit shall be conducted by a certified public accountant every two years.� The
authority shall file a certified copy of the audit with the auditor general
within five days after completion of the audit.� The auditor general may make
further audits and examinations as the auditor general deems necessary and may
take appropriate action relating to the audit pursuant to title 41, chapter 7,
article 10.1.
END_STATUTE