AZ HB2697

Adds Chapter 1.1 to Title 35 of Arizona Revised Statutes governing appropriation of federal and state monies.

Defines "noncustodial federal monies" as federal funds that are block grants, general revenue sharing, or provide the state broad spending authority, excluding funds for universities, the Department of Emergency and Military Affairs, and school districts.

Requires all noncustodial federal monies received by budget units to be accounted for in separate accounts or funds and maintained by the Department of Administration.

Establishes that the legislature retains primary authority to appropriate all state and noncustodial federal monies, and may make lump sum appropriations for unanticipated federal funds with joint legislative budget committee review.

Provides that if federal monies received are less than appropriated, the appropriation is reduced proportionally; if more is received than appropriated, excess federal monies are credited to the appropriate budget unit account.