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HB4044 - 572R - H Ver
House Engrossed
public safety parity
fund
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 4044
AN
ACT
Amending section 35-144, Arizona
Revised Statutes; amending title 41, chapter 11, article 1, Arizona Revised
Statutes, by adding section 41-1610.02; amending section 41-1720,
Arizona Revised Statutes; relating to the department of public safety.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 35-144, Arizona Revised
Statutes, is amended to read:
START_STATUTE
35-144.
Budget stabilization fund; definitions
A. The budget stabilization fund is established
consisting of monies transferred from the state general fund pursuant to
subsection B of this section. The state treasurer shall administer
the budget stabilization fund
,
and
invest and divest monies in the budget stabilization fund as provided by
sections 35-313 and 35-314.02, and
deposit, pursuant
to sections 35-146 and 35-147,
monies earned from investment
shall be credited to the budget stabilization fund
in the public safety parity fund established by section 41-1610.02
, except that the first $10,000,000 generated annually shall remain in
the budget STABILIZATION fund
.� Except as provided by this section:
1. Monies in the budget stabilization fund are
exempt from the provisions of section 35-190 relating to the reversion of
monies to the state general fund.
2. The monies in the fund are separate monies to be
used only for the purposes of the fund.
3. An amount sufficient to pay claims certified by
the state forester pursuant to section 37-1305, subsection E, paragraph 4
is continuously appropriated from the fund to the state treasurer for payment
of the certified claims. Not more than $20,000,000 in unreimbursed
claims may be outstanding from the fund at any time from the monies
appropriated pursuant to this paragraph.
B. In a calendar year in which the annual growth
rate exceeds the trend growth rate, the excess growth when multiplied by total
general fund revenue of the fiscal year ending in the calendar year determines
the amount to be appropriated by the legislature to the budget stabilization
fund in the fiscal year in which the calendar year ends.
C. In a calendar year in which the annual growth
rate is both less than two percent and less than the trend growth rate, the
difference between the annual growth rate and the trend growth rate when
multiplied by the total general fund revenue of the fiscal year ending in the
calendar year determines the amount to be transferred by the legislature from
the budget stabilization fund to the state general fund at the end of the
fiscal year in which the calendar year ends. The transfer calculated
pursuant to this subsection shall not exceed the available balance in the
budget stabilization fund, nor shall the legislature transfer an amount that
exceeds the amount sufficient to balance the state general fund budget.
D. The legislature shall pass a bill that contains
the emergency clause if the legislature either:
1. Reduces the amount for appropriation to the
budget stabilization fund under subsection B of this section.
2. Increases the amount for transfer to the state
general fund under subsection C of this section.
E. The annual budget recommendations of the governor
and the joint legislative budget committee shall include estimates of
appropriations or transfers required under subsection B or C of this section.
F. A final determination of the amount to be
appropriated to or transferred from the budget stabilization fund shall be made
using personal income and price deflator estimates as reported in the second
calendar quarter for the preceding calendar year. The economic estimates
commission shall determine the annual growth rate, the trend growth rate and
the required appropriation to or transfer from the budget stabilization fund at
its first meeting following the second calendar quarter report of the United States
department of commerce, but not later than June 1. The commission
shall certify and report its findings to the governor, the state treasurer, the
president of the senate, the speaker of the house of representatives and the
joint legislative budget committee.
G. The appropriation calculated pursuant to
subsection B of this section may be included in the general appropriations bill
for that fiscal year. Any additional appropriation calculated
pursuant to subsection F of this section shall be made by a separate act.
H. At the end of a fiscal year, the budget
stabilization fund balance shall not exceed ten percent of state general fund
revenue for the fiscal year. Any surplus monies above ten percent
shall be transferred by the state treasurer to the state general fund.
I. The state treasurer may temporarily divest monies
in the budget stabilization fund to avoid a negative cash balance in operating
monies. The amount divested shall not exceed the amount required to
meet immediate cash needs. The state treasurer may divest monies in
the budget stabilization fund only when the state general fund has a negative
cash balance.
J. For the purposes of this section:
1. "Adjusted personal income" means
personal income minus transfer payments, as reported by the United States
department of commerce, bureau of economic analysis, or its successor agency.
2. "Annual growth rate" means the
percentage change in real adjusted personal income in the calendar year ending
during a fiscal year as compared to real adjusted personal income for the
preceding calendar year. The annual growth rate shall be rounded to
the nearest one-hundredth of one percent.
3. "GDP price deflator" means the gross
domestic product price deflator reported by the United States department of
commerce, bureau of economic analysis, or its successor agency.
4. "Personal income" means the total
personal income of all persons in this state reported by the United States
department of commerce, bureau of economic analysis, or its successor agency.
5. "Real adjusted personal income" means
an amount that is determined by dividing adjusted personal income by the GDP
price deflator and multiplying the result by one hundred.
6. "Transfer payments" means that portion
of personal income that represents a government expenditure for which no
service is rendered or product is delivered, as determined by the United States
department of commerce, bureau of economic analysis, or its successor agency.
7. "Trend growth rate" means the average
annual growth rate for the most recent seven calendar years, rounded to the
nearest one-hundredth of one percent.
END_STATUTE
Sec. 2. Title 41, chapter 11, article 1,
Arizona Revised Statutes, is amended by adding section 41-1610.02, to read:
START_STATUTE
41-1610.02.
Public safety parity fund
A.
The public
safety parity fund is established to
provide retention pay and benefits for employees from the department
of public safety
and the state department of
corrections
.� The fund consists of monies earned from
investment from the budget stabilization fund established by section 35-144.�
The state department of corrections shall administer the fund.� Monies in the
fund are subject to legislative appropriation.
B. Beginning June 30, 2027 and Each
fiscal year thereafter, the state department of corrections shall deposit,
pursuant to sections 35-146 and 35-147, forty percent of the monies
deposited in the public safety parity fund established by this section in the
parity compensation fund established by section 41-1720.
C. In determining the amount of the
expenditures from the fund, the state department of corrections shall annually
establish and consider benchmarks based on the average total compensation for
each comparable corrections personnel rank of the two largest county jails in
this state and the two largest private prisons in this state.
D. The state department of corrections shall distribute the
Monies in the fund on july 1 and december 31 each year. The state department of
corrections may provide a retention bonus to department employees of not more
than three percent from fund monies.
END_STATUTE
Sec. 3. Section 41-1720, Arizona Revised
Statutes, is amended to read:
START_STATUTE
41-1720.
Parity compensation fund
A. The parity compensation fund is established
consisting of monies deposited pursuant to
section
sections
28-5808
and 41-1610.02
and monies appropriated by the legislature. The department shall
administer the fund and, considering state revenues and state employee pay
adjustments
,
. The department
shall
spend monies from the fund
to provide retention pay and benefits
for employees from the department and
for salaries and benefits for law
enforcement personnel that the department determines will enhance the ability
of the department to successfully recruit and retain qualified law enforcement
personnel. In determining the amount of the expenditures from the fund, the
department shall annually establish and consider benchmarks based on the
average total compensation for each comparable law enforcement personnel rank
of the department's three largest county or municipal peer law enforcement
agencies in this state. For the purposes of this subsection,
"total compensation" includes base salary, educational incentive pay,
physical performance pay, longevity pay and retirement contributions made by an
employer on behalf of an employee.
B. On notice from the department, the state
treasurer shall invest and divest monies in the fund as provided by section 35-313,
and monies earned from investment shall be credited to the fund.
C. Fund monies:
1. Do not revert to the state general fund.
2. Are exempt from the provisions of section 35-190
relating to lapsing of appropriations.
3. Are subject to legislative appropriation.
D. The department may provide a retention
bonus to department employees of not more than three percent from monies
deposited in the fund pursuant to section 41-1610.02.
END_STATUTE