35-142

35-142. Monies kept in funds separate from
state general fund; receipt and withdrawal

A. All monies received for and belonging to the state shall be deposited in the
state treasury and credited to the state general fund except the following, which shall
be placed and retained in separate funds:

1. The unexpendable principal of monies received from federal land grants shall be
placed in separate funds and the account of each such separate fund shall bear a title
indicating the source and the institution or purpose to which such fund belongs.

2. The interest, rentals and other expendable money received as income from federal
land grants shall be placed in separate accounts, each account bearing a title indicating
the source and the institution or purpose to which the fund belongs. Such expendable
monies shall be expended only as authorized, regulated and controlled by the general
appropriation act or other act of the legislature.

3. All private or quasi-private monies authorized by law to be paid to or held by
the state treasurer shall be placed in separate accounts, each account bearing a title
indicating the source and purpose of such fund.

4. All monies legally pledged to retirement of building indebtedness or bonds
issued by those institutions authorized to incur such indebtedness or to issue such bonds
shall be placed in separate accounts.

5. Monies of a multi-county water conservation district authorized by law to be
paid to or held by the state treasurer shall be placed in separate accounts, each account
bearing a title indicating the source and purpose of such fund.

6. All monies collected by the Arizona game and fish department shall be deposited
in a special fund known as the state game and fish protection fund for the use of the
Arizona game and fish commission in carrying out the provisions of title 17.

7. All federal monies that are received by the department of economic security for
family assistance benefits and medical eligibility as a result of efficiencies developed
by the department of economic security and that would otherwise revert to the state
general fund pursuant to section 35-190 shall be retained for use by the department of
economic security in accordance with the terms and conditions imposed by the federal
funding source in an account or accounts established or authorized by the state
treasurer.

8. Monies designated by law as special state funds shall not be considered a part
of the general fund. Unless otherwise prescribed by law, the state treasurer shall be the
custodian of all such funds.

9. All monies received and any accounts established and maintained by the director
of the Arizona state retirement system or the administrator of the public safety
personnel retirement system, the corrections officer retirement plan and the elected
officials' retirement plan.

B. No money shall be received or held by the state treasurer except as authorized
by law, and in every instance the treasurer shall issue a receipt for money received and
shall record the transaction in the statewide accounting system. No money shall be
withdrawn from the treasury except on the warrant or electronic funds transfer voucher of
the department of administration.

C. All federal monies granted and paid to the state by the federal government shall
be accounted for in the accounts or funds of the state in the necessary detail to meet
federal and state accounting, budgetary and auditing requirements, and all appropriations
for matching such federal monies shall be transferred from the general fund to such
separate funds as needed, except as otherwise required by the federal government.

D. Nothing in this section requires the establishment of separate accounts or funds
for such federal monies unless otherwise required by federal or state law. The department
of administration has the authority to use the most efficient system of accounts and
records, consistent with legal requirements and standard and necessary fiscal safeguards.

E. Nothing in this section precludes the creation by the department of
administration of a clearing account or other acceptable accounting method to effect
prompt payment of claims from an approved budget or appropriation. The department of
administration shall report each account or fund established or cancelled to the
directors of the joint legislative budget committee and the governor's office of
strategic planning and budgeting.

F. Nothing in this section or any other section precludes the use of monies kept in
funds separate from the general fund, the interest from which accrues to the general
fund, for payment of claims against the general fund, provided sufficient monies remain
available for payment of claims against such funds.

G. The department of administration may issue warrants for qualified expenditures
of federal program monies before they are deposited in the state treasury. The receipt of
federal monies shall be timed to coincide, as closely as administratively feasible, with
the redemption of warrants by the state treasurer. The department of administration shall
limit expenditures to the amount that has been made available for the use under the grant
award by the federal government. The state agency initiating the expenditures is
responsible for ensuring that expenditures qualify for coverage under the guidelines of
the federal grant award.

H. The department of administration shall establish the policies and procedures for
all state agencies for drawing federal monies. When the established method results in
federal monies being held by this state, the department of administration may use the
interest earned on the monies to pay the federal government for any related interest
liability. If an interest liability is incurred due to a state agency varying from the
established policies and procedures, the department of administration shall charge the
appropriate agency account or fund. Interest payment charges to agencies shall be
reported by the department of administration to the joint legislative budget committee on
or before March 1. Any federal interest liability owed to this state as a result of the
delayed federal disbursements shall be used to offset this state's interest liability to
the federal government. Any remaining interest earnings shall be deposited in the state
general fund.

I. Any state agency or authorized agent of a state agency may accept credit cards
pursuant to an agreement entered into by the state treasurer pursuant to section 35-315
for the payment of any amount due to that agency or agent or this state.

J. Except for the department of revenue for tax payments, agencies or authorized
agents on behalf of state agencies that accept credit cards shall deduct any applicable
discount fee and processing fee associated with the transaction amount before depositing
the net amount in the appropriate state fund. No other reduction is permitted against the
transaction amount. The net amount deposited in the appropriate state fund shall be
considered as the full deposit required by law of monies received by the agency or the
authorized agent. Payment of any applicable discount fee and processing fee shall be
accounted for in the annual report submitted to the governor's office of strategic
planning and budgeting in accordance with section 41-1273. The transaction amount of any
credit card transaction shall not be reduced by any discount fee or processing fee in an
amount in excess of the merchant card settlement fees reflected in the state banking
contract with the state treasurer's office.

K. Any state agency that contracts with an authorized agent for the electronic
processing of transactions pursuant to title 41, chapter 23 may include a provision in
the contract to allow the authorized agent to impose a convenience fee. If allowed, the
convenience fee shall be charged to the cardholder in addition to the transaction amount,
except for the following:

1. Except as provided in subsection R of this section, any permits, licenses or
other authorizations needed to pursue a trade or occupation in this state.

2. Except as provided in subsection R of this section, any permits, licenses or
other authorizations needed to establish, expand or operate a business in this state.

3. Except as provided in subsection R of this section, any permits, licenses or
other authorizations needed to register a vehicle or license a driver in this state.

L. Each state agency or its authorized agent shall:

1. Deduct the amount of the convenience fee before depositing the transaction
amount or the transaction amount reduced by the discount fee or the processing fee, or
both, into the appropriate state fund.

2. Not deduct any part of the convenience fee from the transaction amount before
depositing the net amount into the appropriate state fund.

3. Deduct the amount of the discount fee or the processing fee, or both, from the
transaction amount before depositing the net amount into the appropriate state fund.

M. The net amount deposited in the appropriate state fund pursuant to subsection K
or L of this section shall be considered as the full deposit of monies that is required
by law and that is received by the agency.

N. Notwithstanding section 35-142.01, convenience fees received by a state agency
or its authorized agent are limited to, and may be used to offset, the costs imposed by
the authorized agent in processing the transactions.

O. When the percentage of electronic transactions first exceeds at least thirty per
cent of a state agency's total transactions, the state agency shall perform a cost
benefit report, including costs of convenience fees, the amount of revenue generated and
any realized cost savings. The state agency shall submit the cost benefit report to the
joint legislative budget committee within six months after reaching the thirty per cent
threshold.

P. State agencies shall report the number of transactions, the number of electronic
transactions, the total dollar amount of transactions processed, the total dollar amount
of any discount fee, the total dollar amount of any processing fee and the total dollar
amount of any convenience fee charged, deducted or paid pursuant to subsections J and K
of this section annually by October 1 to the governor, the government information
technology agency and the joint legislative budget committee.

Q. Nothing in this section or any other provision of law authorizes any state
agency, authorized agent of any state agency or budget unit to establish a bank account
for any government monies. All monies received by or on behalf of this state shall be
deposited with and in the custody of the state treasurer or in an account that is
authorized by the state treasurer pursuant to this section. This subsection does not
apply to monies received and any accounts established and maintained by the director of
the Arizona state retirement system or the administrator of the public safety personnel
retirement system, the corrections officer retirement plan and the elected officials'
retirement plan.

R. If a state agency provides an alternative method of payment, the convenience fee
may be charged to the cardholder in addition to the transaction amount.