AZ SB1112

Establishes a new chapter in Arizona law (35-251 through 35-253) to govern the appropriation and use of noncustodial federal monies by state agencies and budget units.

Defines "noncustodial federal monies" as federal block grants, general revenue sharing funds, or grants that give the state broad spending authority, while excluding funds for universities, the Department of Emergency and Military Affairs, and direct awards to school districts or community colleges.

Requires budget units receiving noncustodial federal monies to maintain separate accounts or funds and grants the Legislature authority to appropriate these funds, with the receiving budget unit authorized to spend unapproved funds in compliance with federal and state law.

Allows the Legislature to make lump sum appropriations for unanticipated noncustodial federal monies when not in session, requiring budget units to submit proposed expenditures to the Joint Legislative Budget Committee for review before spending.

Specifies that if federal monies received are less than appropriated, the appropriation and funded activities shall be reduced proportionately; if more is received, excess funds are credited to the appropriate budget unit account while total appropriation remains as designated by the Legislature.