If enacted, this bill would amend current statutes by introducing a new article that defines and regulates the appropriation of noncustodial federal monies. Currently, the Legislature does not appropriate federal funds except for specific block grants and limited federal funds managed by the Department of Economic Security. The bill would allow the Legislature to appropriate noncustodial federal monies, which are defined as federal funds that provide the state with discretion in their use, such as block grants and general revenue sharing. It would also establish requirements for budget units receiving these funds, including the need to account for them in separate accounts and to submit proposed expenditures to the Joint Legislative Budget Committee for review.

Additionally, the bill specifies that if the amount of noncustodial federal monies received is less than or greater than the amount appropriated, adjustments must be made accordingly. It also clarifies that certain federal funds, such as those awarded to universities or community colleges, are excluded from this definition. The act would take effect on January 1, 2027, thereby updating the current legal framework governing the handling of federal funds in Arizona.