individual savings plan program; appropriation

HB4126 - 572R - I Ver

REFERENCE TITLE:
individual savings plan program; appropriation

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 4126

Introduced by

Representatives
Austin: Abeytia, Aguilar, Cavero, Crews, Garcia, Gutierrez, Hernandez C,
Liguori, Rivero, Sandoval, Stahl Hamilton, Villegas, Volk;� Senator Miranda

AN
ACT

amending title 38, Arizona Revised
Statutes, by adding chapter 9; appropriating monies; relating to retirement.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Title 38, Arizona Revised Statutes,
is amended by adding chapter 9, to read:

CHAPTER 9

ARIZONA RETIREMENT SAVINGS BOARD

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE
38-1201.

Definitions

In this chapter, unless the context otherwise
requires:

1. "Board" means the
Arizona retirement savings board.

2. "Covered Employee":

(
a
) Means an
individual who is employed by a covered employer, who has wages or other
compensation that is allocable to this State and who is at least eighteen years
of age.

(
b
) does not include:

(
i
) Any
employee who is covered under the Railway Labor Act (44 Stat. 577; 45 United
States code section 151).

(
ii
) Any
employee on whose behalf an employer makes contributions to a Taft-Hartley
multiemployer pension trust fund.

(
iii
) Any
individual who is an employee of the federal government, this state or any
other state, any county or municipal corporation or any of this state's, any
other state's or the federal government's units or instrumentalities.

3. "Covered employer":

(
a
) Means a
person or entity that is engaged in a business, industry, profession, trade or
other enterprise in this state, whether for profit or not for profit.

(
b
) Does not
include:

(
i
) the federal
government, this state, any county, any municipal corporation or any of this
state's units or instrumentalities.

(
ii
) An
employer that maintains a specified tax-favored retirement plan for its
employees or has done so effective in form and operation at any time within the
current or two preceding calendar years.

(
iii
) For the
portion of the calendar year in which the employer adopts a tax-favored
retirement plan, an employer that does not maintain a specified tax-favored
retirement plan for a portion of a calendar year ending on or after the
effective date of this section and adopts a tax-favored retirement plan
effective for the remainder of that calendar year.

4. "ERISA" means the
employee retirement income security act of 1974.

5. "Fund" means the Arizona
retirement savings program fund established by section 38-1211.

6. "IRA" means a
traditional or roth individual retirement account or individual retirement
annuity under 26 United States Code section 408(
a
), 408(
b
) or 408A.

7. "Participant" means an
individual who is contributing to an IRA under the program or has an IRA
account balance under the program.

8. "payroll deduction IRA"
means an arrangement by which an employer allows employees to contribute to an
IRA by means of payroll deduction.

9. "Program" means the
Arizona retirement savings program established by this article.

10. "Retirement system"
means the ARizona state retirement system established in chapter 5, article 2
of this title.

11. "Roth IRA" means a roth
individual retirement account or individual retirement annuity under 26 United
States code section 408A.

12. "Specified tax-favored
retirement plan" means a retirement plan that is tax-qualified under
or is described in and satisfies the requirements of 26 United States Code
section 401(
a
), 401(
k
), 403(
a
), 403(
b
), 408(
k
), 408(
p
) or 457(
b
) without regard to whether it
constitutes an employee benefit plan under ERISA.

13. "Traditional IRA" means
a traditional individual retirement account or traditional individual
retirement annuity under 26 United States code section 408(
a
) or 408(
b
).

14. "Wages" means any
compensation within the meaning of 26 United States code section 219(
f
)(
1
) that is received by an employee from an
employer during a calendar year.
END_STATUTE

START_STATUTE
38-1202.

Board; members; appointment; terms; reimbursement

A. The ARizona retirement savings
board is established to develop and maintain the Arizona retirement savings
program for individuals who are employed or self-employed for wages or other
compensation in this state.� The board consists of the state treasurer or the
state treasurer's designee and eight members appointed by the governor who have
experience with retirement plans, financial security or employee and employer
issues.

B. The term of office of each member
of the board appointed by the governor is four years. A member is
eligible for reappointment. If there is a vacancy for any reason for
a member appointed by the governor, the governor shall make a member
appointment that is immediately effective for the remainder of the unexpired
term.� The members of the board shall elect one of its members annually to
serve as chairperson.

C. A majority of the voting members
of the board constitutes a quorum for the transaction of business.

D. Appointed members of the board are
not eligible for compensation but are eligible to receive reimbursement of
expenses pursuant to chapter 4, article 2 of this title.

E. Except as otherwise provided, the
state treasurer's office shall provide support staff to the board.� The board
shall reimburse the state treasurer's office for the full cost of any staff
time provided to the board.

F. The first meeting of the board
shall be not later than May 1, 2027.
END_STATUTE

START_STATUTE
38-1203.

Duties of the board; requirement of the program

The board shall:

1. Conduct market, legal and
feasibility analyses if the board considers them advisable.

2. Adopt rules the board considers
necessary or advisable for the implementation and general administration and
operation of the program as provided in section 38-1204, consistent with the
internal revenue code and regulations under the internal revenue code,
including to ensure that the program satisfies all criteria for favorable
federal tax treatment and complies, to the extent necessary, with any other
applicable federal or state law.

3. Use private sector partnerships to
contract with a program administrator to administer the program and manage the
investments under the supervision and guidance of the board in accordance with
this chapter.

4. Cause funds to be held and
invested and reinvested under the program.

5. Develop and implement an
investment policy that defines the program's investment objectives consistent
with the objectives of the program and that provides for policies and
procedures consistent with those investment objectives. The board
shall strive to select and offer investment options available to participants
and other program features that are intended to achieve maximum possible income
replacement balanced with an appropriate level of risk in an IRA-based
environment consistent with the investment objectives under the
policy. The investment options may encompass a range of risk and
return opportunities and allow for a rate of return commensurate with an
appropriate level of risk in view of the investment objectives under the
policy. The menu of investment options must be determined by
considering the nature and objectives of the program, the desirability based on
behavioral research findings of limiting investment options under the program
to a reasonable number and the extensive investment options available to
participants in the event that they roll over funds in an IRA established under
the program to an IRA outside the program. In accordance with
paragraphs 11 and 15 of this section, the board, in carrying out its
responsibilities and exercising its powers under this chapter, shall employ or
retain appropriate entities or personnel to assist or advise the board and to
whom to delegate the carrying out of such responsibilities and exercise of such
powers.

6. Arrange for collective, common and
pooled investment of assets of the program and fund, including investments in
conjunction with other funds with which these assets are allowed to be
collectively invested, with a view to saving costs through efficiencies and
economies of scale.

7. Cause the program, the fund and
the arrangements and accounts established under the program to be designed,
established and operated consistent with all of the following:

(
a
) In
accordance with best practices for retirement savings accounts.

(
b
) To
encourage participation and saving and to make it simple, easy and convenient
for participants to contribute and manage their savings.

(
c
) To promote
sound investment practices and appropriate investment menus and default
investments.

(
d
) To maximize
simplicity and ease of administration for covered employers.

(
e
) To minimize
costs, including by collective investment and economies of scale.

(
f
) To promote
portability of benefits.

(
g
) To avoid
preemption of the program by federal law.

8. Educate participants and potential
participants on the benefits of planning and saving for retirement, help them
decide the level of participation and saving strategies that may be appropriate
for them and help them develop greater financial capability and financial
literacy, including through partnerships with organizations based in this state
specializing in financial literacy education.

9. In accordance with rules adopted
by the board, determine the eligibility of an employer, employee or other
individual to participate in the program, including conditions under which an
employer that terminates the offering of a specified tax-favored retirement
plan can become a covered employer eligible to participate in the program.

10. Arrange for and facilitate
compliance by the program or arrangements established under the program with
all requirements applicable to the program under the internal revenue code,
including requirements for favorable tax treatment of the IRAs, and any other
applicable federal or state law or accounting requirements, including using its
best efforts to implement procedures minimizing the risk that covered employees
will exceed the limits on tax-favored IRA contributions that they are eligible
to make and otherwise providing or arranging for assistance to covered
employers and covered employees in complying with applicable law and tax-related
requirements in a cost effective manner. The board may establish any processes
it reasonably considers to be necessary or advisable to verify whether an
employer is a covered employer, including reference to online data and possible
use of questions in employer state tax filings, consistent with the objective
of avoiding to the fullest extent practicable any need to require employers
that are not covered employers to register with the program or take other
action to demonstrate that they maintain specified tax-favored retirement plans
or are exempt for other reasons from being treated as covered employers.

11. Employ or otherwise retain a
program administrator, an executive director, staff, a trustee, a record
keeper, investment managers, investment advisors, other administrative,
professional and expert advisors and service providers, none of whom may be
members of the board and all of whom serve at the pleasure of the board, and
the board shall determine their duties and compensation. The board
may authorize the executive director employed by the board to enter into
contracts, as described in paragraph 15 of this section, on behalf of the board
or conduct any business necessary for the efficient operation of the board.

12. Discharge its duties and ensure
that the members of the board discharge their duties with respect to the
program solely in the interest of the participants as follows:

(
a
) For the
exclusive purpose of providing benefits to participants and defraying
reasonable expenses of administering the program.

(
b
) With the
care, skill, prudence and diligence under the circumstances then prevailing
that persons of prudence, discretion and intelligence, acting in a like
capacity and familiar with those matters, would use in the conduct of an
enterprise of a like character and with like aims.

13. Make provision for costs and
expenses incurred to initiate, implement, maintain, manage and administer the
program and its investments to be paid or defrayed from investment returns or
assets of the program or from the charging and collection of other fees,
charges or funds, whether account-based, asset-based, per capita or
otherwise, by or for the program or pursuant to arrangements established under
the program to the extent allowed under federal and state law.

14. Accept any grants, gifts,
legislative appropriation, loans and other funds from this state, any unit of
federal, state or local government or any other person, firm or entity to
defray the costs of administering and operating the program in accordance with
the requirements of this chapter.

15. Make and enter into contracts,
agreements or arrangements for and collaborate and cooperate with and retain,
employ and contract with or for any of the following to the extent the board
considers necessary or advisable for the effective and efficient design,
implementation and administration of the program consistent with the purposes
set forth in this chapter and to maximize outreach to covered employers and
covered employees:

(
a
) Services of
private and public financial institutions, depositories, consultants,
actuaries, counsel, auditors, investment advisors, investment administrators,
investment management firms, other investment firms, third-party
administrators, other professionals and service providers, the retirement
system, the state treasurer's office, other state treasurers and other state
public retirement systems.

(
b
) Research,
technical, financial, administrative and other services.

(
c
) Services of
other state agencies and instrumentalities, including those with
responsibilities for tax collection, budget, finance, labor and employment
regulation, consumer protection, business regulation and liaison, benefits and
public assistance, to assist the board in the exercise of its powers and
duties, and all such agencies and instrumentalities shall provide such
assistance at the board's request.

(
d
) Services to
develop and implement outreach efforts to gain input and disseminate
information regarding the program and retirement saving in general, including
providing timely information to covered employers regarding the program and how
it applies to them, with special emphasis on their ability at any time to
sponsor a specified tax-favored retirement plan that would exempt them from any
responsibilities under the program.

16. Ensure that all contributions to
an IRA under the program are used only to pay benefits to participants under
the program, pay the cost of administering the program or make investments for
the benefit of the program and that no assets of the program or fund are
transferred to the state general fund or to any other fund of this state or are
otherwise encumbered or used for any other purpose.

17. Consider whether procedures
should be adopted to allow employers that are not covered employers because
they are exempt from covered employer status to voluntarily participate in the
program by automatically enrolling their employees, considering, among other
factors, the potential legal consequences and the degree of employer demand to
participate or facilitate participation by employees.

18. Evaluate the need for, and
procure if and as considered necessary, insurance against any loss in
connection with the property, assets or activities of the program, including,
if and as considered necessary, pooled private insurance.

19. Indemnify, including procurement
of insurance if and as needed for this purpose, each member of the board from
personal loss or liability resulting from a member's action or inaction as a
member of the board.

20. Collaborate with, and evaluate
the role of, financial advisors or other financial professionals, including in
assisting and providing guidance for covered employees.

21. Along with its members, the
program administrator and other staff of the board, comply with any applicable
state ethics and gift laws, procurement codes and restrictions and restrictions
on honoraria and may not do any of the following:

(
a
) Directly or
indirectly have any interest in the making of any investment under the program
or in gains or profits accruing from any such investment.

(
b
) Borrow any
program-related funds or deposits, or use any such funds or deposits in any
manner, for the benefit of the board or any member or as an agent or partner of
others.

(
c
) Become an
endorser, surety or obligor on investments made under the program.

22. Carry out its powers and duties
under the program pursuant to this chapter and exercise any other powers as are
appropriate for the effectuation of the purposes, objectives and provisions of
this chapter pertaining to the program.
END_STATUTE

START_STATUTE
38-1204.

Required elements of the program; implementation

A. Consistent with the implementation
dates in subsection B of this section, the program shall:

1. Allow an eligible individual in
this State to choose whether to contribute to an IRA under the program,
including allowing a covered employee in this state the choice to contribute to
an IRA under the program through a payroll deduction IRA arrangement.

2. Notwithstanding any provision of
state law related to payroll deduction, require each covered employer to offer
its covered employees the choice whether to contribute to a payroll deduction
IRA by automatically enrolling them in the payroll deduction IRA with the
opportunity to opt out. A covered employee who is not a participant
because that employee has opted out will be automatically reenrolled with the
opportunity to opt out again at regular or ad hoc intervals determined by the
board in its discretion, but not more frequently than annually.

3. Provide that the IRA to which
contributions are made is a Roth IRA, except that the board has the authority
at any time, in its discretion, to add an option for all participants to
affirmatively elect to contribute to a traditional IRA as an alternative to the
Roth IRA.

4. Provide that, unless otherwise
specified by the covered employee, a covered employee must automatically
initially contribute five percent of the covered employee's salary or wages to
the program and may elect to opt out of the program at any time or contribute
at any higher or lower rate, expressed as a percentage of salary or wages or,
if the board in its discretion allows, expressed as a flat dollar amount,
subject in all cases to the IRA contribution and income eligibility limits
applicable under the internal revenue code at no additional
charge. The board is authorized to change, from time to time, the
five percent automatic initial default contribution rate for all covered
employees in its discretion.

5. Provide on a uniform basis, if and
when the board so determines in its discretion, for an annual increase of each
participant's contribution rate, by not more than one percent of salary or
wages per year up to a maximum of eight percent. Any such increases
must apply to participants, as determined by the board in its discretion,
either by default or only if initiated by affirmative participant election and
are in either case subject to the IRA contribution and income eligibility
limits applicable under the internal revenue code.

6. Provide for direct deposit of
contributions into investments under the program, including a default
investment such as a series of target date funds and a limited number of
investment alternatives, including a principal preservation option determined
by the board. In addition, the board may provide that each
participant's initial contributions, up to a specified dollar amount or for a
specified period of time, are required to be invested in a principal
preservation investment or, in the board's discretion, must be defaulted into
such an investment unless the participant affirmatively opts for a different
investment for those contributions. The board shall determine how
often participants will have the opportunity to change their selections of
investments for future contributions or existing balances or both.

7. Provide that employer
contributions by a covered employer are not required or allowed.

8. Be professionally managed.

9. When possible and practicable, use
existing employer and public infrastructure to facilitate contributions, record
keeping and outreach and use pooled or collective investment arrangements for
amounts contributed to the program.

10. Require the maintenance of
separate records and accounting for each account under the program and allow
for participants to maintain their accounts regardless of place of employment
and to roll over funds into other IRAs or other retirement accounts.

11. Provide for reports on the status
of each participant's account to be provided to each participant at least
annually and make best efforts to provide each participant frequent or
continual online access to information on the status of that participant's
account.

12. Provide that each participant
owns the contributions to and earnings on amounts contributed to the
participant's account under the program and that this state and covered
employers have no proprietary interest in those contributions or earnings.

13. Be designed and implemented in a
manner consistent with federal law to the extent that it applies and is
consistent with the program not being preempted by and the payroll deduction
IRAs and covered employers not being subject to ERISA.

14. Promote expanded retirement
saving by encouraging employers in this state that would otherwise be covered
employers to instead adopt a specified tax-favored retirement plan.

15. Make provision for participation
in the program by individuals who are not employees, such as self-employed
individuals and independent contractors, as provided in rules adopted pursuant
to section 38-1207.

16. Seek to keep fees, costs and
expenses of the program as low as practicable, except that any administrative
fee imposed on a covered employee for participating in the program should be
similar to established programs in other states. The fee may be an
asset-based or investment return fee, flat fee or hybrid of the permissible fee
structures identified in this paragraph.

17. Adopt rules and establish
procedures governing the distribution of monies from the program, including
such distributions as may be allowed or required by the program and any
applicable provisions of tax laws, with the objectives of maximizing financial
security in retirement, helping to protect spousal rights and assisting
participants with the challenges of decumulation of savings. The
board has the authority to provide for one or more reasonably priced
distribution options to provide a source of regular retirement income,
including income for life or for the participant's life expectancy or for joint
lives and life expectancies, as applicable.

18. Adopt rules and establish
procedures promoting portability of benefits, including the ability to make
tax-free rollovers or transfers from IRAs under the program to other IRAs or to
tax-qualified plans that accept such rollovers or transfers.

19. Establish penalties in accordance
with section 38-1205 for a covered employer that fails without reasonable cause
to enroll a covered employee in the program as required or that fails to
transmit a payroll deduction IRA contribution to the program as required.

20. In accordance with section
38-1203, paragraph 3, use private sector entities to administer the program and
invest the contributions to the program under the supervision and guidance of
the board.

21. Allow the board to provide for
the establishment, maintenance, administration, operation and implementation of
the program to be carried out jointly with, or in partnership, collaboration,
coordination or alliance with one or more other states, the federal government
or any federal, state or local agencies or instrumentalities.

B. The board shall implement the
program as follows:

1. Beginning April 1, 2028, the board
shall require a covered employer with twenty-five or more covered
employees to offer the program to its covered employees.

2. Beginning October 1, 2028, the
board shall require a covered employer with fifteen to twenty-four
covered employees to offer the program to its covered employees.

3. Beginning April 1, 2029, the board
shall require a covered employer with one to fourteen covered employees to
offer the program to its covered employees.

C. Notwithstanding subsection B of
this section, a covered employer may voluntarily offer the program to its
covered employees on or after April 1, 2028.

END_STATUTE

START_STATUTE
38-1205.

Penalties

A. If
a covered employer fails to enroll a covered employee without reasonable cause,
the covered employer is subject to a penalty for each covered employee for each
calendar year or portion of a calendar year during which the covered employee
was not enrolled in the program or had not opted out of participating in the
program and, for each calendar year beginning after the date on which a penalty
has been assessed with respect to a covered employee, is subject to a penalty
for any portion of that calendar year during which the covered employee
continues to be unenrolled without opting out of participating in the
program. The amount of any penalty imposed on a covered employer for
the failure to enroll a covered employee without reasonable cause is determined
as follows:

1. Before April 1, 2029, the maximum
penalty per covered employee is $10.

2. Beginning April 1, 2029 to March
31, 2030, the maximum penalty per covered employee is $20.

3. Beginning April 1, 2030 to
September 30, 2031, the maximum penalty per covered employee is $50.

4. On or after October 1, 2031, the
maximum penalty per covered employee is $100.

B. A penalty may not be imposed on a
covered employer for any failure to enroll a covered employee for which it is
established that the covered employer did not know that the failure existed and
exercised reasonable diligence to meet the requirements of this chapter.

C. A penalty may not be imposed on a
covered employer for any failure to enroll a covered employee if the covered
employer exercised reasonable diligence to meet the requirements of this
chapter and the covered employer complies with those requirements with respect
to each covered employee by the end of the ninety-day period beginning on
the first date the covered employer knew, or exercising reasonable diligence
would have known, that the failure existed.

D. In the case of a failure that is
due to reasonable cause and not to wilful neglect, all or part of the penalty
may be waived to the extent that the payment of the penalty would be excessive
or otherwise inequitable relative to the failure involved.

E. If a covered employer fails to
remit a payroll deduction contribution to the program on the earliest date the
amount withheld from the covered employee's compensation can reasonably be
segregated from the covered employer's assets, but not later than the fifteenth
day of the month following the month in which the covered employee's
contribution amounts are withheld from the covered employee's paycheck, the
failure to remit the contribution on a timely basis is subject to the same
penalties that apply to employer misappropriation of employee wage withholdings
and to the penalties specified in subsection A of this section.

F. The attorney general shall
represent the board in enforcement and collection of penalties.
END_STATUTE

START_STATUTE
38-1206.

Rules

The board shall adopt rules to do all of the
following:

1. Establish the processes for
enrollment and contributions to an IRA under the program, notwithstanding any
provision of state law related to payroll deductions to the contrary, including
withholding by covered employers of employee payroll deduction contributions
from wages and remittance for deposit to an IRA, automatic enrollment in a
payroll deduction IRA and opt-outs by covered employees, voluntary
contributions by others, including self-employed individuals and independent
contractors, through payroll deduction or otherwise, the making of default
contributions using default investments and participant selection of
alternative contribution rates or amounts and alternative investments from
among the options offered under the program.

2. Establish the processes for
withdrawals, rollovers and direct transfers from an IRA under the program in
the interest of facilitating portability of benefits.

3. Establish processes for phasing in
enrollment of eligible individuals, including phasing in enrollment of covered
employees by size or type of covered employer in the provisions of this
chapter.

4. Establish requirements for the
determination of whether a part-time, seasonal or temporary employee is a
covered employee eligible to participate in the program.

5. Establish a process for a
participant to make nonpayroll contributions to accounts under the program.

6. Establish a process for an
employer to be determined to be exempt from the program because the employer
sponsors a specified tax-favored retirement plan.

7. Conduct outreach to individuals,
employers, other stakeholders and the public regarding the program, including
specifying the contents, frequency, timing and means of required disclosures
from the program to covered employees, participants, other individuals eligible
to participate in the program, covered employers and other interested
parties. These disclosures must include the following:

(
a
) The
benefits and risks associated with tax-favored retirement savings under the
program.

(
b
) The
potential advantages and disadvantages associated with contributing to a Roth
IRA and, if applicable, a traditional IRA under the program.

(
c
) The
eligibility rules for a Roth IRA and, if applicable, a traditional IRA.

(
d
) That the
individual and not the employer, this State, the board, any board member or
other state official or the program is solely responsible for determining
whether, and, if so, how much, the individual is eligible to contribute on a
tax-favored basis to an IRA.

(
e
) The penalty
for excess contributions to an IRA and the method of correcting excess
contributions.

(
f
) Instructions
for enrolling, opting out of participation, making contributions and making
withdrawals, including the possibility of contributing to an IRA, whether
offered under the program or not, by means other than automatic enrollment in a
payroll deduction IRA.

(
g
) Instructions
for opting out of each of the Roth IRA, the default contribution rate and the
default investment if the covered employee prefers a traditional IRA, including
the possibility of contributing to a traditional IRA, if offered as an option
under the program, a higher or lower contribution rate or different investment
alternatives.

(
h
) The
potential availability of a saver's tax credit, including the eligibility
conditions for the credit and instructions on how to claim the credit.

(
i
) That
employees seeking tax, investment or other financial advice should contact
appropriate professional advisors and that covered employers are not in a
position to provide such advice and are not liable for decisions individuals
make in relation to the program.

(
j
) That the
payroll deduction IRA is not intended to be an employer-sponsored retirement
plan and that the program is not an employer-sponsored retirement plan.

(
k
) The
potential implications of account balances under the program for the
application of asset limits under certain public assistance programs.

(
l
) That the
participant is solely responsible for investment performance, including market
gains and losses, and that IRAs and rates of return are not guaranteed by any
employer, this State, the board, any board member or state official or the program.

(
m
) Additional
information about retirement and saving and other information designed to
promote financial literacy and capability, which may take the form of links to,
or explanations of how to obtain, such information.

(
n
) How to
obtain additional information about the program.
END_STATUTE

START_STATUTE
38-1207.

Employer protection from liability

A. A covered employer or other
employer is not liable for or does not bear responsibility for:

1. An employee's decision whether to
participate in the program or a participant's specific elections under the
program.

2. A participant's or the board's
investment decisions.

3. The administration, investment,
investment returns or investment performance of the program, including any
interest rate or other rate of return on any contribution or account balance if
the employer does not play a role.

4. The program design or the benefits
paid to participants.

5. An individual's awareness of or
compliance with the conditions and other provisions of the tax laws that
determine which individuals are eligible to make tax-favored contributions to
IRAs, in what amount and in what time frame and manner.

6. Any loss, failure to realize any
gain or any other adverse consequences, including any adverse tax consequences
or loss of favorable tax treatment, public assistance or other benefits
incurred by any person who participates in the program.

B. A covered employer or other
employer is not, and is not considered to be, a fiduciary in relation to the
program or fund or any other arrangement under the program.

END_STATUTE

START_STATUTE
38-1208.

Protection from liability

A. This state, the board, each member
of the board or other state official, other state boards, commissions or
agencies or any member, officer or employee thereof and the program:

1. Have no responsibility for
individuals to comply with the conditions and other provisions of the internal
revenue code that determine which individuals are eligible to make tax-favored
contributions to IRAs, in what amount and in what time frame and manner.

2. Have no duty, responsibility or
liability to any party for the payment of any benefits under the program,
regardless of whether sufficient monies are available under the program to pay
those benefits.

3. Do not and may not guarantee any
interest rate or other rate of return on or investment performance of any
contribution or account balance.

4. Are not and may not be liable or
responsible for any loss, deficiency, failure to realize any gain or any other
adverse consequences, including any adverse tax consequences or loss of
favorable tax treatment, public assistance or other benefits, incurred by any
person as a result of participating in the program.

B. The debts, contracts and
obligations of the program or the board are not the debts, contracts and
obligations of this state, and neither the faith and credit nor the taxing
power of this state is pledged directly or indirectly to the payment of the
debts, contracts and obligations of the program or the board.

END_STATUTE

START_STATUTE
38-1209.

Confidentiality

Individual account information relating to
accounts under the program and relating to individual participants, including
names, addresses, telephone numbers, email addresses, personal identification
information, investments, contributions and earnings, is confidential and must
be maintained as confidential:

1. Except to the extent necessary to
administer the program in a manner consistent with this chapter, the tax laws
of this state and the internal revenue code.

2. Unless the individual who provides
the information or who is the subject of the information expressly agrees in
writing to the information disclosure.

END_STATUTE

START_STATUTE
38-1210.

Intergovernmental agreement and memorandum of understanding

The board may enter into an intergovernmental
agreement or memorandum of understanding with this state and any agency of this
state to receive outreach, technical assistance, enforcement and compliance
services, collection or dissemination of information pertinent to the Program,
subject to the obligations of confidentiality as may be agreed or required by
law, or other services or assistance. This state and any agencies of
this state that enter into an agreement or memorandum of understanding shall
collaborate to provide the outreach, assistance, information and compliance or
other services or assistance to the board.� The memorandum of understanding may
cover the sharing of costs incurred in gathering and disseminating information
and the reimbursement of costs for any enforcement activities or assistance.
END_STATUTE

START_STATUTE
38-1211.

Arizona retirement savings program fund

A. The Arizona retirement savings
program fund is established consisting of legislative appropriations and gifts,
grants and donations.� the board shall administer the fund.� Monies in the fund
are continuously appropriated and are exempt from the provisions of section
35-190 relating to lapsing of appropriations.

B. The board may use the monies in
the fund only to pay the administrative costs and expenses of the program and
the administrative costs and expenses the board incurs in the performance of
its duties under this chapter.
END_STATUTE

START_STATUTE
38-1212.

Audit; report

A. The board shall cause an accurate
account of all of the program's, fund's and board's activities, operations,
receipts and expenditures to be maintained on a calendar year
basis. A full audit of the books and accounts of the board
pertaining to those activities, operations, receipts and expenditures must be
conducted by a certified public accountant, including direct and indirect costs
attributable to the use of outside consultants, independent contractors and any
other persons who are not state employees for the administration of the
program. For the purposes of the audit, the auditors must have
access to the properties and records of the program and board and may prescribe
methods of accounting and the rendering of periodic reports in relation to
projects undertaken by the program.

B. Beginning February 1, 2029 and
annually thereafter, the board shall submit to the governor, the state
treasurer, the president of the senate and the speaker of the house of
representatives an audited financial report, prepared in accordance with
generally accepted accounting principles, detailing the activities, operations,
receipts and expenditures of the program and board during the preceding
calendar year. The report must include the number of participants, the
investment options and their rates of return and other information regarding
the program and must also include projected activities of the program for the
current calendar year.� A copy of the report shall be submitted to the
secretary of state.
END_STATUTE

Sec. 2.
Appropriation; Arizona retirement savings
board; Arizona retirement savings program; exemption

A. The sum of $1,600,000 is
appropriated from the state general fund in fiscal year 2026-2027 to the
Arizona retirement savings board for the purposes of title 38, chapter 9,
Arizona Revised Statutes, as added by this act.

B. The appropriation made
in subsection A of this section is exempt from the provisions of section
35-190, Arizona Revised Statutes, relating to lapsing of appropriations.