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Law Enforcement GF $2,708,500 Records Management Law Enforcement OF $500,000 Records Management Fire Incident GF $2,291,600 Management Grants Erroneous Convictions GF Deposit $3,000,000 Fund State Personnel IT System Software OF Onetime $1,911,800 Transition IT System OF New state personnel IT system, $1,802,600 ongoing costs Annual Financial OF $574,000 Report/Single Audit IT Oversight OF Add 1 FTE $103,500 Business One-Stop OF Ongoing support $2,114,300 Law Enforcement OF Records management system, $500,000 Records Management real-time data sharing 2. Requires ADOA to submit a report to the Joint Legislative Budget Committee (JLBC) and Governor's Office of Strategic Planning and Budgeting (OSPB) by March 31, 2026 regarding the amount that the Maricopa County Special Health Care District has agreed to send to ADOA for deposit into the state GF in FY 2026, including the reason for any change in amount from the prior FY. 3. Requires the ADOA General Accounting Office to account for the second $37,500,000 semiannual payment due on June 30, 2025, from the Maricopa County Special Health Care District to ADOA in the state GF for FY 2025 in the annual financial report. 4. Exempts the $3,000,000 FY 2026 appropriation for tribal health care investment from lapsing. 5. Exempts the $1,000,000 appropriated to ADOA for Navajo Nation electrical connections in FY 2025 from lapsing until June 30, 2026. 6. Appropriates $7,150,650 from the state GF in FY 2026 to ADOA for equal distribution to counties with a population of fewer than 900,000 persons according to the 2020 U.S. Decennial Census (2020 Census) to maintain essential county services. 7. Appropriates $500,000 from the state GF in FY 2026 to ADOA for distribution to Graham County to maintain essential county services. Initials JB Page 2 SB 1735 Signed by the Governor 8. Appropriates $3,000,000 from the state GF in FY 2026 to ADOA for equal distribution to counties with a population of fewer than 300,000 persons according to the 2020 Census in order to supplement the cost of the Elected Officials' Retirement Plan (EORP). 9. Prohibits the counties from using the distributed FY 2026 $3,000,000 appropriation for anything other than employer contributions to EORP . 10. Directs ADOA to distribute the amount appropriated for Fire Incident Management System Grants in FY 2026 as follows: a) $239,400 to Sun City Fire District; b) $333,200 to Queen Creek Fire Department; c) $1,402,900 to Mesa Fire Department; and d) $316,100 to Tempe Fire Department. 11. Distributes monies from the Law Enforcement Records Management System line item to local police departments for a records management system real-time data sharing program. 12. Specifies that the $3,000,000 deposit to the Erroneous Convictions Fund reverts to the state GF if a bill auth01·izing compensation for individuals erroneously convicted of crimes does not become law in the 57th Legislature , 1st Regular Session . ADOA - School Facilities Division (SFD) (Sec. 8) Building Renewal GF Onetime $183,300,000 Grant Funding New School GF $( 375, 700) Construction Projects Building renewal GF Administrative costs $750,000 Offset GF Offset FY 2026 New Construction ($10,000,000) with Existing SFD Fund Balance 13. Exempts the $750,000 FY 2026 appropriation for building renewal grants administration from lapsing. 14. Allows the SFD to use the unencumbered balance of $18,117,400 in the New School Facilities Fund for facilities and land costs for school districts that received final approval by December 15, 2024. 15. Declares that the legislature intends that the appropriation to SFD in FY 2027 for new school facilities may include up to $10,000,000 for end of useful life projects that receive approval from SFD by December 15, 2025. Arizona Department of Agriculture (AZDA) (Sec. 10) State Veterinarian's GF Office Livestock Inspectors GF Initials JB 2FTEs 2FTEs Page 3 $400,000 $400,000 SB 1735 Signed by the Governor Meat/Poultry GF 1 FTE $200,000 Inspection Supervisor Food Safety Scientist GF 1 FTE $127,000 Agriculture and Water GF Deposit, Onetime $2,000,000 Innovation Fund 16. Allows the AZDA to use up to $250,000 from the Commercial Feed Trust Fund in FY 2026 for expenses related to the avian influenza outbreak Arizona Healthcare Cost Containment System (AHCCCS) (Sec. 11) Formula Adjustments GF May Capitation Rate $41,800,000 Caseload Adjustments GF $(68,300,000) Enhanced Federal Medical Assistance GF $(6,000,000) Percentage (FMAP) Savings Traditional Healing GF $100,000 Services Prescription Drug GF Ongoing shift $(150,000,000) Rebate Fund (PDRF) Eligibility Income Verification Income Verification GF Data Charge, Backfill Loss of $2,220,000 Federal Funding Graduate Medical GF Onetime, non-lapsing $4,000,000 Education Speech Therapy & Cochlear Implant GF $274,200 Coverage Legal Costs OF Contracted onetime legal costs $1,375,000 for sober living homes Secure Behavioral Health Residential OF $5,000,000 Facilities 17. Exempts the $4,000,000 appropriat10n from the state GF and the $7,507,400 appropriation from expenditure authority for graduate medical education from lapsing. 18. Allows $100,000 from the Prescription Drug Rebate to be used for administrative costs of granting one-year extensions for all managed care organizations with existing AHCCCS complete care contracts and regional behavioral health agreements. Initials JB Page 4 SB 1735 Signed by the Governor