Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 3-1003, Arizona Revised Statutes, is amended to read:
3-1003. Arizona exposition and state fair board; powers and duties; compensation of employees
A. The Arizona exposition and state fair board shall:
1. Have exclusive custody and direction of all state fair property, construct and maintain necessary improvements in connection therewith, and assist in raising funds therefor.
2. Direct and conduct state fairs, exhibits, contests and entertainments for the purposes of promoting and advancing the pursuits and interests of the several counties and of the state, and of producing sufficient revenue to defray the expenses incurred by the board in conducting such events.
3. Charge entrance fees and gate money, and temporarily lease stalls, stands, booths and sites for the purpose of defraying the expenses incurred.
4. Give prizes or premiums for exhibits and contests which are presented or sponsored by the board in connection with the annual state fair.
5. Subject to title 41, chapter 4, article 4, employ an executive director, coliseum manager and comptroller. Each contract of employment, if any, shall stipulate that the board at its option may terminate such employment by giving such employee ninety days' notice.
6. Delegate to the executive director any of the administrative functions, powers or duties that the board believes the executive director can competently, efficiently and properly perform.
7. When necessary in connection with business of the board, appoint fair or ground marshals with the authority of peace officers.
8. Have the power to promote, co‑promote or lease the state fairgrounds for such events, exhibitions, entertainments or other purposes it deems proper.
9. Have power to accept donations of money or other property from any source, and expend them in accordance with directions of the donor. Monies received pursuant to this paragraph shall not be placed in the general fund.
10. Adopt rules necessary to carry out the provisions of this chapter.
11. Prohibit the issuance of a free pass, ticket or box to any person for any activity at the Arizona coliseum and exposition center, except that this paragraph shall not apply to the state fair and any lessees of the Arizona coliseum and exposition center.
B. The board may exempt from subsection A, paragraphs 2 and 3 such educational, agricultural and mineral exhibits as in its opinion are in the best interest of the state and not contrary to any outstanding obligations the board might have incurred.
C. Compensation of all employees shall be as determined pursuant to section 38‑611.
Sec. 2. Section 4-111, Arizona Revised Statutes, is amended to read:
4-111. State liquor board; department of liquor licenses and control; members; director; appointment and removal
A. The department of liquor licenses and control is established consisting of the state liquor board and the office of director of the department.
B. From and after January 31, 2003, the board consists of seven members to be appointed by the governor pursuant to section 38‑211. Five of the members of the board shall not be financially interested directly or indirectly in business licensed to deal with spirituous liquors. Two members shall currently be engaged in business in the spirituous liquor industry or have been engaged in the past in business in the spirituous liquor industry, at least one of whom shall currently be a retail licensee or employee of a retail licensee. One member shall be a member of a neighborhood association recognized by a county, city or town. The term of members is three years. Members' terms expire on the third Monday in January of the appropriate year. The governor may remove any member of the board for cause. No member may represent a licensee before the board or the department for a period of one year after the conclusion of the member's service on the board.
C. The board shall annually elect from its membership a chairman and vice‑chairman. A majority of the board constitutes a quorum, and a concurrence of a majority of a quorum is sufficient for taking any action. If there are unfilled positions on the board, a majority of those persons appointed and serving on the board constitutes a quorum.
D. The chairman may designate panels of not less than three members. A panel may take any action that the board is authorized to take pursuant to this title. Such action includes the ability to hold hearings and hear appeals of administrative disciplinary proceedings of licenses issued pursuant to this chapter. A panel shall not, however, adopt rules as provided in section 4‑112, subsection A, paragraph 2. The chairman may from time to time add additional members or remove members from a panel. A majority of a panel may upon the concurrence of a majority of the members of the panel take final action on hearings and appeals of administrative disciplinary proceedings concerning licenses issued pursuant to this chapter.
E. Members of the board are entitled to receive compensation at the rate of fifty dollars per day while engaged in the business of the board.
F. A person shall not be appointed to serve on the board unless the person has been a resident of this state for not less than five years before the person's appointment. No more than four members may be of the same political party. Persons eligible for appointment shall have a continuous recorded registration pursuant to title 16, chapter 1 with the same political party or as an independent for at least two years immediately preceding appointment. No more than two members may be appointed from the same county.
G. The governor shall appoint the director, pursuant to section 38‑211, who shall be a qualified elector of the state and experienced in administrative matters and enforcement procedures. The director shall serve at the pleasure of the governor concurrently with the governor but may be removed by the governor for any of the following causes:
1. Fraud in securing appointment.
2. Incompetency.
3. Inefficiency.
4. Inexcusable neglect of duty.
5. Insubordination.
6. Dishonesty.
7. Drunkenness on duty.
8. Addiction to the use of narcotics or habit forming drugs.
9. Inexcusable absence without leave.
10. Final conviction of a felony or a misdemeanor involving moral turpitude.
11. Discourteous treatment of the public.
12. Improper political activity.
13. Wilful disobedience.
14. Misuse of state property.
H. The director is entitled to receive a salary as determined pursuant to section 38‑611.
Sec. 3. Section 5-101.01, Arizona Revised Statutes, is amended to read:
5-101.01. Arizona department of racing; director; qualifications; term; deputy director; conflict of interest
A. There is established an Arizona department of racing.
B. The governor shall appoint a director of the department pursuant to section 38‑211 and in accordance with subsection C of this section. The director serves at the pleasure of the governor for a term of five years. To be eligible for appointment as director, a person must have a minimum of five years of experience in business and administration and shall not have a financial interest in a racetrack or in the racing industry in this state during the term of his appointment. The governor may appoint an acting director if there is a vacancy in the office.
C. Within sixty days after a vacancy occurs in the position of director, the commission shall forward a list of three candidates for appointment as director to the governor. The governor may request one additional list to be submitted by the commission. If the governor does not appoint the director within thirty days following receipt of the list submitted by the commission, the commission shall select a director for the department. If the commission fails to submit the lists requested by the governor, the governor may appoint any qualified person to the position of director.
C. D. The commission may establish the position of deputy director of the department.
D. E. The positions of director and deputy director, if applicable, are exempt from title 41, chapter 4, articles 5 and 6. Persons holding the positions of director and deputy director, if applicable, are eligible to receive compensation pursuant to section 38‑611.
E. F. The provisions of title 38, chapter 3, article 8, relating to conflict of interest, apply to the director and all other employees of the department.
F. G. Neither the director, any employee of the department nor any member of the immediate family of the director or other employee of the department may:
1. Have any pecuniary interest in a racetrack in this state or in any kennel, stable, compound or farm licensed under this chapter.
2. Wager money at a racetrack enclosure or additional wagering facility in this state or wager money on the results of any race held at a racetrack enclosure in this state.
3. Hold more than a five per cent interest in any entity doing business with a racetrack in this state.
4. Have any interest, whether direct or indirect, in a license issued pursuant to this chapter or in a licensee, facility or entity that is involved in any way with pari‑mutuel wagering. For the purposes of this paragraph, "interest" includes employment.
G. H. Failure to comply with subsection F G of this section is grounds for dismissal.
H. I. For the purposes of subsection F G of this section, "immediate family" means a spouse or children who regularly reside in the household of the director or other employee of the department.
Sec. 4. Section 5-112, Arizona Revised Statutes, is amended to read:
5-112. Wagering legalized; simulcasting of races; unauthorized wagering prohibited; classification; report
A. Except as provided in
subsection L of this section, section 5‑101.01, subsection F G
and title 13, chapter 33, any person within the enclosure of a
racing meeting held pursuant to this article may wager on the results of a race
held at the meeting or televised to the racetrack enclosure by simulcasting
pursuant to this section by contributing money to a pari‑mutuel pool
operated by the permittee as provided by this article.
B. The department, upon request by a permittee, may grant permission for electronically televised simulcasts of horse, harness or dog races to be received by the permittee. In counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted, provided that the simulcast may only be received during, immediately before or immediately after a minimum of nine posted races for that racing day. In counties having a population of five hundred thousand persons or more but less than one million five hundred thousand persons according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted provided that the simulcast may only be received during, immediately before or immediately after a minimum of four posted races for that racing day. In all other counties, the simulcasts shall be received at a racetrack enclosure at which authorized racing has been conducted whether or not posted races have been offered for the day the simulcast is received. The simulcasts shall be limited to horse, harness or dog races. The simulcasts shall be limited to the same type of racing as authorized in the permit for live racing conducted by the permittee. The department, upon request by a permittee, may grant permission for the permittee to transmit the live race from the racetrack enclosure where a horse, harness or dog racing meeting is being conducted to a facility or facilities in another state. All simulcasts of horse or harness races shall comply with the interstate horseracing act of 1978 (P.L. 95‑515; 92 Stat. 1811; 15 United States Code chapter 57). All forms of pari‑mutuel wagering shall be allowed on horse, harness or dog races televised by simulcasting. All monies wagered by patrons on these horse, harness or dog races shall be computed in the amount of money wagered each racing day for purposes of section 5‑111.
C. Notwithstanding subsection B of this section, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure and at any additional wagering facility used by a permittee for handling wagering as provided in section 5‑111, subsection A during a permittee's racing meeting as approved by the commission, whether or not posted races have been conducted on the day the simulcast is received, if:
1. For horse and harness racing, the permittee's racing permit requires the permittee to conduct a minimum of nine posted races on an average of five racing days each week at the permittee's racetrack enclosure during the period beginning on October 1 and ending on the first full week in May.
2. For dog racing, the permittee is required to conduct a minimum of twelve posted races on each of five days each week for fifty weeks during a calendar year at the permittee's racetrack enclosure.
D. Notwithstanding subsection B of this section, in counties having a population of five hundred thousand persons or more but less than one million five hundred thousand persons according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure and at any additional wagering facility used by a permittee for handling wagering as provided in section 5‑111, subsection A during a permittee's racing meeting as approved by the commission, whether or not posted races have been conducted on the day the simulcast is received, subject to the following conditions:
1. For horse and harness racing, the permittee may conduct wagering on dark day simulcasts for twenty days, provided the permittee conducts a minimum of seven posted races on each of the racing days mandated in the permittee's commercial racing permit. In order to conduct wagering on dark day simulcasts for more than twenty days, the permittee is required to conduct a minimum of seven posted races on one hundred forty racing days at the permittee's racetrack enclosure.
2. For dog racing, the permittee is required to conduct a minimum of nine posted races on each of one hundred days during a calendar year at the permittee's racetrack enclosure, unless a lesser number is otherwise agreed to by written contract entered into by February 1 of each year by a permittee and a majority of licensed persons then participating in a greyhound racing meeting as greyhound racing kennel owners.
E. In an emergency and upon a showing of good cause by a permittee, the commission may grant an exception to the minimum racing day requirements of subsections C and D of this section.
F. The minimum racing day requirements of subsections C and D of this section shall be computed by adding all racing days, including any county fair racing days operated in accordance with section 5‑110, subsection F, allotted to the permittee's racetrack enclosure in one or more racing permits and all racing days allotted to the permittee's racetrack enclosure pursuant to section 5‑110, subsection H.
G. Notwithstanding subsection B of this section and subject to subsections C and D of this section, during the period of the permit for horse racing, wagering on dark day simulcasts of horse races at a permittee's additional wagering facilities shall only be allowed for a maximum number of days equal to the number of days of live horse racing scheduled to be conducted at that permittee's racetrack enclosure during the permittee's racing meeting. During the period of a permit for dog racing, wagering on dark day simulcasts of dog races at a permittee's additional wagering facilities shall only be allowed for a maximum number of days equal to the number of days of live dog racing scheduled to be conducted at that permittee's racetrack enclosure during the permittee's racing meeting, unless the permittee has offered live dog racing in a county that is subject to subsection D of this section for eight of the last ten preceding calendar years. The number of days allowed for dark day simulcasting under this subsection shall be computed by adding all racing days, including any county fair racing days operated in accordance with section 5‑110, subsection F, allotted to the permittee's racetrack enclosure in one or more racing permits and all racing days allocated to the permittee's racetrack enclosure pursuant to section 5‑110, subsection H.
H. Simulcast signals or teletracking of simulcast signals does not prohibit live racing or teletracking of that live racing in any county at any time.
I. Except as provided in subsection L of this section, section 5‑101.01, subsection F G and title 13, chapter 33, any person within a racetrack enclosure or an additional facility authorized for wagering pursuant to section 5‑111, subsection A may wager on the results of a race televised to the facility pursuant to section 5‑111, subsection A by contributing to a pari‑mutuel pool operated as provided by this article.
J. Notwithstanding subsection B of this section, the department, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census and on request by a permittee for one day each year, may grant permission for simulcasts to be received without compliance with the minimum of nine posted races requirement.
K. Except as provided in this article and in title 13, chapter 33, all forms of wagering or betting on the results of a race, including but not limited to buying, selling, cashing, exchanging or acquiring a financial interest in pari‑mutuel tickets, except by operation of law, whether the race is conducted in this state or elsewhere, are illegal.
L. A permittee shall not knowingly permit a person who is under twenty‑one years of age to be a patron of the pari‑mutuel system of wagering.
M. Except as provided in title 13, chapter 33, any person who violates this article with respect to any wagering or betting, whether the race is conducted in or outside this state, is guilty of a class 6 felony.
N. Simulcasting may only be authorized for the same type of racing authorized by a permittee's live racing permit.
O. Any person other than a permittee under this article who accepts a wager or who bets on the results of a race, whether the race is conducted in or outside this state, including buying, selling, cashing, exchanging or acquiring a financial interest in a pari-mutuel ticket from a person in this state outside of a racing enclosure or an additional wagering facility that is approved by the commission and that is located in this state is guilty of a class 6 felony.
P. Pursuant to section 13-108, a pari-mutuel wager or a bet placed or made by a person in this state is deemed for all purposes to occur in this state.
Q. The department and the attorney general shall enforce subsections O and P of this section and shall submit an annual report that summarizes these enforcement activities to the governor, the speaker of the house of representatives and the president of the senate. The department and the attorney general shall provide a copy of this report to the secretary of state.
Sec. 5. Section 6-111, Arizona Revised Statutes, is amended to read:
6-111. Superintendent; appointment; qualifications; salary
A. The chief officer of the department shall be the superintendent who shall be appointed by the governor pursuant to section 38‑211.
B. The superintendent serves at the pleasure of the governor in office on the effective date of this amendment to this section shall hold office until the expiration of his term. The term of office of the superintendent shall be four years and shall expire on the third Monday in January of the appropriate year. The superintendent may be removed by the governor for cause.
C. Any person appointed as superintendent shall have had, within fifteen years preceding his first appointment, at least five years active experience in the financial institution business as an executive officer or shall have served a like period of time in a financial institution examining or supervisory capacity for this state or for any other state or for an agency or instrumentality of the United States.
D. The salary of the superintendent shall be determined pursuant to section 38‑611.
Sec. 6. Section 15-543, Arizona Revised Statutes, is amended to read:
15-543. Appeal from decision of board
A. The decision of the governing board is final unless the certificated teacher files, within thirty days after the date of the decision, an appeal with the superior court in the county within which he was employed.
B. The decision of the governing board may be reviewed by the court in the same manner as the decision made in accordance with section 41‑783 41‑785. The proceeding shall be set for hearing at the earliest possible date and shall take precedence over all other cases, except older matters of the same character and matters to which special precedence is otherwise given by law.
Sec. 7. Title 15, chapter 11, article 2, Arizona Revised Statutes, is amended by adding section 15-1331, to read:
15-1331. Equity study for school personnel
A. The department of administration shall:
1. In consultation with the department of education and the board of directors, conduct salary equity studies for teachers, credentialed specialists and other personnel unique to the school. For teachers, compensation for extracurricular activities shall be included. The department of administration shall conduct a full study once every five years by analyzing salary structures for similar personnel in school districts in this state providing significant programs for sensory impaired children. The average salary increase awarded to similar positions in three school districts included in the full study and selected by the department of administration and department of education in consultation with the board shall be reported for consideration by the joint legislative budget committee.
2. Conduct reclassification studies for all other personnel with follow‑up studies as necessary.
B. The board shall use the results of the department of administration's studies in determining salaries pursuant to section 15‑1329 and in making its budget request. The joint legislative budget committee may consider the results of the studies in making its recommendations for funding of existing personnel services.
Sec. 8. Section 15-1626, Arizona Revised Statutes, is amended to read:
15-1626. General administrative powers and duties of board
A. The board shall:
1. Have and exercise the powers necessary for the effective governance and administration of the institutions under its control. To that end, the board may adopt, and authorize each university to adopt, such regulations, policies, rules or measures as are deemed necessary and may delegate in writing to its committees, to its university presidents, or their designees, or to other entities under its control, any part of its authority for the administration and governance of such institutions, including those powers enumerated in section 15‑1625, subsection B, paragraphs 2 and 4, paragraphs 3, 4, 8, 9, 11 and 12 of this subsection and subsection B of this section. Any delegation of authority may be rescinded by the board at any time in whole or in part.
2. Appoint and employ and determine the compensation of presidents with such power and authority and for such purposes in connection with the operation of the institutions as the board deems necessary.
3. Appoint and employ and determine the compensation of vice‑presidents, deans, professors, instructors, lecturers, fellows and such other officers and employees with such power and authority and for such purposes in connection with the operation of the institutions as the board deems necessary, or delegate its authority pursuant to paragraph 1 of this subsection.
4. Remove any officer or employee when the interests of education in this state so require in accordance with its personnel rules and policies.
5. Fix tuitions and fees to be charged and differentiate the tuitions and fees between institutions and between residents, nonresidents, undergraduate students, graduate students, students from foreign countries and students who have earned credit hours in excess of the credit hour threshold. For the purposes of this paragraph, the undergraduate credit hour threshold is one hundred forty‑five hours for students who attend a university under the jurisdiction of the board. The undergraduate credit hour threshold shall be based on the actual full‑time equivalent student enrollment counted on the forty‑fifth day of every fall and spring semester, divided by two, and any budget adjustment based on student enrollment shall occur in the fiscal year following the actual full-time equivalent student enrollment count. The undergraduate credit hour threshold shall not apply to degree programs that require credit hours above the credit hour threshold, credits earned in the pursuit of up to two baccalaureate degrees, credits earned in the pursuit of up to two state regulated licensures or certificates, credits earned in the pursuit of teaching certification, credits transferred from a private institution of higher education, credits transferred from an institution of higher education in another state, credits earned at another institution of higher education but that are not accepted as transfer credits at the university where the student is currently enrolled and credits earned by students who enroll at a university under the jurisdiction of the board more than twenty-four months after the end of that student's previous enrollment at a public institution of higher education in this state. On or before October 15 of each year, the board shall report to the joint legislative budget committee the number of students who were enrolled at universities under the jurisdiction of the board during the previous fiscal year who met or exceeded the undergraduate credit hour threshold prescribed in this paragraph. The amount of tuition, registration fees and other revenues included in the operating budget for the university adopted by the board as prescribed in paragraph 13 of this subsection shall be deposited, pursuant to sections 35‑146 and 35‑147. All other tuition and fee revenue shall be retained by each university for expenditure as approved by the board, except that the universities shall not use any tuition or fee revenue to fund or support an alumni association.
6. Except as provided in subsection I of this section, adopt rules to govern its tuition and fee setting process that provide for the following:
(a) At least one public hearing at each university as an opportunity for students and members of the public to comment on any proposed increase in tuition or fees.
(b) Publication of the notice of public hearing at least ten days prior to the hearing in a newspaper of general circulation in Maricopa county, Coconino county and Pima county. The notice shall include the date, time and location of the public hearing.
(c) Public disclosure by each university of any proposed increases in tuition or fees at least ten days prior to the public hearing.
(d) Final board action on changes in tuition or fees shall be taken by roll call vote.
The procedural requirements of subdivisions (a), (b), (c) and (d) of this paragraph apply only to those changes in tuition or fees that require board approval.
7. Pursuant to section 35‑115, submit a budget request for each institution under its jurisdiction that includes the estimated tuition and fee revenue available to support the programs of the institution as described in the budget request. The estimated available tuition and fee revenue shall be based on the tuition and registration fee rates in effect at the time the budget request is submitted with adjustments for projected changes in enrollment as provided by the board.
8. Establish curriculums and designate courses at the several institutions that in its judgment will best serve the interests of this state.
9. Award such degrees and diplomas on the completion of such courses and curriculum requirements as it deems appropriate.
10. Prescribe qualifications for admission of all students to the universities. The board shall establish policies for guaranteed admission that assure fair and equitable access to students in this state from public, private and charter schools and homeschools. For the purpose of determining the qualifications of honorably discharged veterans, veterans are those persons who served in the armed forces for a minimum of two years and who were previously enrolled at a university or community college in this state. No prior failing grades received by the veteran at the university or community college in this state may be considered.
11. Adopt any energy conservation standards promulgated by the department of administration for the construction of new buildings.
12. Employ for such time and purposes as the board requires attorneys whose compensation shall be fixed and paid by the board. Litigation to which the board is a party and for which self‑insurance is not provided may be compromised or settled at the direction of the board.
13. Adopt annually an operating budget for each university equal to the sum of appropriated general fund monies and the amount of tuition, registration fees and other revenues approved by the board and allocated to each university operating budget.
14. In consultation with the state board of education and other education groups, develop and implement a program to award honors endorsements to be affixed to the high school diplomas of qualifying high school pupils and to be included in the transcripts of pupils who are awarded endorsements. The board shall develop application procedures and testing criteria and adopt testing instruments and procedures to administer the program. In order to receive an honors endorsement, a pupil must demonstrate an extraordinary level of knowledge, skill and competency as measured by the testing instruments adopted by the board in mathematics, English, science and social studies. Additional subjects may be added at the determination of the board. The program is voluntary for pupils.
15. Require the publisher of each literary and nonliterary textbook used in the universities of this state to furnish computer software in a standardized format when software becomes available for nonliterary textbooks to the Arizona board of regents from which braille versions of the textbooks may be produced.
16. Require universities that provide a degree in education to require courses that are necessary to obtain a provisional structured English immersion endorsement as prescribed by the state board of education.
17. Acquire United States flags for each classroom that are manufactured in the United States and that are at least two feet by three feet and hardware to appropriately display the United States flags, acquire a legible copy of the Constitution of the United States and the Bill of Rights, display the flags in each classroom in accordance with title 4 of the United States Code and display a legible copy of the Constitution of the United States and the Bill of Rights adjacent to the flag.
18. To facilitate the transfer of military personnel and their dependents to and from the public schools of this state, pursue, in cooperation with the state board of education, reciprocity agreements with other states concerning the transfer credits for military personnel and their dependents. A reciprocity agreement entered into pursuant to this paragraph shall:
(a) Address procedures for each of the following:
(i) The transfer of student records.
(ii) Awarding credit for completed course work.
(iii) Permitting a student to satisfy the graduation requirements prescribed in section 15‑701.01 through the successful performance on comparable exit-level assessment instruments administered in another state.
(b) Include appropriate criteria developed by the state board of education and the Arizona board of regents.
19. Require a university to publicly post notices of all of its employment openings, including the title and description, instructions for applying and relevant contact information.
20. In consultation with the community college districts in this state, develop and implement common equivalencies for specific levels of achievement on advanced placement examinations and international baccalaureate examinations in order to award commensurate postsecondary academic credits at community colleges and public universities in this state.
21. On or before August 1 of each year, report to the joint legislative budget committee the graduation rate by university campus during the previous fiscal year. The board shall also report the retention rate by university campus and by class, as determined by date of entry during the previous fiscal year.
B. The board shall adopt personnel policies for all employees of the board and the universities rules. All nonacademic employees of the universities are subject to these rules except for university presidents, university vice‑presidents, university deans, legal counsel and administrative officers. The personnel rules shall be similar to the personnel rules under section 41‑783. The rules shall include provisions for listing available positions with the department of economic security, competitive employment processes for applicants, probationary status for new nonacademic employees, nonprobationary status on successful completion of probation and due process protections of nonprobationary employees after discharge. The board shall provide notice of proposed rule adoption and an opportunity for public comment on all personnel rules proposed for adoption.
C. In conjunction with the auditor general, the board shall develop a uniform accounting and reporting system, which shall be reviewed by the joint legislative budget committee before final adoption by the board. The board shall require each university to comply with the uniform accounting and reporting system.
D. The board may employ legal assistance in procuring loans for the institutions from the United States government. Fees or compensation paid for such legal assistance shall not be a claim on the general fund of this state but shall be paid from funds of the institutions.
E. The board shall approve or disapprove any contract or agreement entered into by the university of Arizona hospital with the Arizona health facilities authority.
F. The board may adopt policies that authorize the institutions under its jurisdiction to enter into employment contracts with nontenured employees for periods of more than one year but not more than five years. The policies shall prescribe limitations on the authority of the institutions to enter into employment contracts for periods of more than one year but not more than five years, including the requirement that the board approve the contracts.
G. The board may adopt a plan or plans for employee benefits that allow for participation in a cafeteria plan that meets the requirements of the United States internal revenue code of 1986.
H. The board may establish a program for the exchange of students between the universities under the jurisdiction of the board and colleges and universities located in the state of Sonora, Mexico. Notwithstanding subsection A, paragraph 5 of this section, the program may provide for in‑state tuition at the universities under the jurisdiction of the board for fifty Sonoran students in exchange for similar tuition provisions for up to fifty Arizona students enrolled or seeking enrollment in Sonoran colleges or universities. The board may direct the universities to work in conjunction with the Arizona‑Mexico commission to coordinate recruitment and admissions activities.
I. Subsection A, paragraph 6, subdivisions (a), (b), (c) and (d) of this section do not apply to fee increases that are set by individual universities and that do not require approval by the Arizona board of regents before the fee increase becomes effective.
J. On or before July 1, 2012, the Arizona board of regents, in collaboration with the universities under its jurisdiction, shall adopt a performance funding model. The performance funding model shall use performance metrics that include the increase in degrees awarded, the increase in completed student credit hours and the increase in externally generated research and public service funding. The funding formula may give added weight to degrees related to science, technology, engineering and mathematics and other high-value degrees that are in short supply or that are essential to this state's long-term economic development strategy.
K. The Arizona board of regents shall use the performance funding model adopted pursuant to subsection J of this section in developing and submitting budget requests for the universities under its jurisdiction.
Sec. 9. Section 17-211, Arizona Revised Statutes, is amended to read:
17-211. Director; selection; removal; powers and duties
A. The commission shall appoint a director of the Arizona game and fish department, who shall be the chief administrative officer of the game and fish department. The director shall receive compensation as determined pursuant to section 38‑611. The director shall be selected on the basis of administrative ability and general knowledge of wildlife management. The director shall act as secretary to the commission, and shall serve at the pleasure of the commission for a term of five years, but may be removed by the commission, after public hearing, for inefficiency, neglect of duty or misconduct in office. If the director is removed, the commission shall make, in its minutes, a complete statement of the proceedings and all charges made against the director, and its' findings. The director shall not hold any other office, and shall devote the entire time to the duties of office.
B. The commission shall prepare an examination for the post of director to comply with the requirements of this title. The examination shall be conducted at the offices of the commission at the capital to establish an active list of eligible applicants. The director shall be selected from those scoring satisfactory grades and having other qualities deemed advisable by the commission. The commission may call for additional examinations from time to time for selection of a new list of eligible applicants to fill a vacancy.
C. Subject to title 41, chapter 4, article 4, the director may appoint employees necessary to carry out the purposes of this title, when funds for the payment of their salaries are appropriated. Department employees shall be located in different sections of the state where their services are most needed. All appointments must be made in accordance with procedures and qualifications established by the commission. Compensation for persons appointed shall be as determined pursuant to section 38‑611. The director may dismiss an employee for inefficiency, neglect of duty or misconduct. The employee shall be entitled to an appeal before the commission after filing a written request for a hearing within thirty days after the discharge. The director shall file in the department office a complete statement of charges made against the employee and the findings after the written request is received. If the employee fails to file the request within the thirty‑day period, the right of appeal is waived and the action of the director shall be final.
D. The director shall:
1. Have general supervision and control of all activities, functions and employees of the department.
2. Enforce all provisions of this title, including all commission rules.
3. Collaborate with the state forester in presentations to legislative committees on issues associated with forest management and wildfire prevention and suppression as provided by section 37‑622, subsection B.
E. Game rangers and wildlife managers may, in addition to other duties:
1. Execute all warrants issued for a violation of this title.
2. Execute subpoenas issued in any matter arising under this title.
3. Search without warrant any aircraft, boat, vehicle, box, game bag or other package where there is sufficient cause to believe that wildlife or parts of wildlife are possessed in violation of law.
4. Inspect all wildlife taken or transported and seize all wildlife taken or possessed in violation of law, or showing evidence of illegal taking.
5. Seize as evidence devices used illegally in taking wildlife and hold them subject to the provisions of section 17‑240.
6. Generally exercise the powers of peace officers with primary duties the enforcement of this title.
7. Seize devices that cannot be lawfully used for the taking of wildlife and are being so used and hold and dispose of them pursuant to section 17‑240.
Sec. 10. Section 17-231, Arizona Revised Statutes, is amended to read:
17-231. General powers and duties of the commission
A. The commission shall:
1. Adopt rules and establish services it deems necessary to carry out the provisions and purposes of this title.
2. Establish broad policies and long‑range programs for the management, preservation and harvest of wildlife.
3. Establish hunting,
trapping and fishing rules and prescribe the manner and methods that may be
used in taking wildlife, but the commission shall not limit or restrict the
magazine capacity of any authorized firearm.
4. Be responsible for the enforcement of laws for the protection of wildlife.
5. Prescribe grades, qualifications and salary schedules for department employees.
5. 6. Provide for the assembling and distribution of information to the public relating to wildlife and activities of the department.
6. 7. Prescribe rules for the expenditure, by or under the control of the director, of all funds arising from appropriation, licenses, gifts or other sources.
7. 8. Exercise such powers and duties necessary to carry out fully the provisions of this title and in general exercise powers and duties that relate to adopting and carrying out policies of the department and control of its financial affairs.
8. 9. Prescribe procedures for use of department personnel, facilities, equipment, supplies and other resources in assisting search or rescue operations on request of the director of the division of emergency management.
9. 10. Cooperate with the Arizona‑Mexico commission in the governor's office and with researchers at universities in this state to collect data and conduct projects in the United States and Mexico on issues that are within the scope of the department's duties and that relate to quality of life, trade and economic development in this state in a manner that will help the Arizona‑Mexico commission to assess and enhance the economic competitiveness of this state and of the Arizona‑Mexico region.
B. The commission may:
1. Conduct investigations, inquiries or hearings in the performance of its powers and duties.
2. Establish game management units or refuges for the preservation and management of wildlife.
3. Construct and operate game farms, fish hatcheries, fishing lakes or other facilities for or relating to the preservation or propagation of wildlife.
4. Expend funds to provide training in the safe handling and use of firearms and safe hunting practices.
5. Remove or permit to be removed from public or private waters fish which hinder or prevent propagation of game or food fish and dispose of such fish in such manner as it may designate.
6. Purchase, sell or barter wildlife for the purpose of stocking public or private lands and waters and take at any time in any manner wildlife for research, propagation and restocking purposes or for use at a game farm or fish hatchery and declare wildlife salable when in the public interest or the interest of conservation.
7. Enter into agreements with the federal government, with other states or political subdivisions of the state and with private organizations for the construction and operation of facilities and for management studies, measures or procedures for or relating to the preservation and propagation of wildlife and expend funds for carrying out such agreements.
8. Prescribe rules for the sale, trade, importation, exportation or possession of wildlife.
9. Expend monies for the purpose of producing publications relating to wildlife and activities of the department for sale to the public and establish the price to be paid for annual subscriptions and single copies of such publications. All monies received from the sale of such publications shall be deposited in the game and fish publications revolving fund.
10. Contract with any person
or entity to design and produce artwork on terms that, in the commission's
judgment, will produce an original and valuable work of art relating to
wildlife or wildlife habitat.
11. Sell or distribute the artwork authorized under paragraph 10 of this subsection on such terms and for such price as it deems acceptable.
12. Consider the adverse and beneficial short‑term and long‑term economic impacts on resource dependent communities, small businesses and the state of Arizona, of policies and programs for the management, preservation and harvest of wildlife by holding a public hearing to receive and consider written comments and public testimony from interested persons.
13. Adopt rules relating to range operations at public shooting ranges operated by and under the jurisdiction of the commission, including the hours of operation, the fees for the use of the range, the regulation of groups and events, the operation of related range facilities, the type of firearms and ammunition that may be used at the range, the safe handling of firearms at the range, the required safety equipment for a person using the range, the sale of firearms, ammunition and shooting supplies at the range, and the authority of range officers to enforce these rules, to remove violators from the premises and to refuse entry for repeat violations.
14. Solicit and accept grants, gifts or donations of money or other property from any source, which may be used for any purpose consistent with this title.
C. The commission shall confer and coordinate with the director of water resources with respect to the commission's activities, plans and negotiations relating to water development and use, restoration projects under the restoration acts pursuant to chapter 4, article 1 of this title, where water development and use are involved, the abatement of pollution injurious to wildlife and in the formulation of fish and wildlife aspects of the director of water resources' plans to develop and utilize water resources of the state and shall have jurisdiction over fish and wildlife resources and fish and wildlife activities of projects constructed for the state under or pursuant to the jurisdiction of the director of water resources.
D. The commission may enter into one or more agreements with a multi‑county water conservation district and other parties for participation in the lower Colorado river multispecies conservation program under section 48‑3713.03, including the collection and payment of any monies authorized by law for the purposes of the lower Colorado river multispecies conservation program.
Sec. 11. Section 20-141, Arizona Revised Statutes, is amended to read:
20-141. Director of insurance; appointment; qualifications; compensation
A. There shall be a director of insurance who shall be appointed by the governor pursuant to section 38‑211.
B. The term of the director shall serve at the pleasure of the governor be six years and shall expire on the third Monday in January of the appropriate year, but the director may be removed by the governor for cause.
C. The director shall be a person well versed in insurance matters who has been a resident of the state for at least three years prior to appointment.
D. The director shall receive compensation as determined pursuant to section 38‑611.
Sec. 12. Section 23-108, Arizona Revised Statutes, is amended to read:
23-108. Director; employees; compensation and expenses
A. The commission shall employ a director who is subject to confirmation by the senate. Subject to title 41, chapter 4, article 4, the director may employ such personnel as deemed necessary by the provisions of chapters 1, 2 and 6 and article 2 of chapter 3 of this title.
B. The compensation of the director shall be as determined pursuant to section 38‑611. The director shall have such administrative ability, education and training as the commission determines. The director shall serve at the pleasure of the governor. The director may be removed by the commission for cause.
C. The compensation of the director and commission employees and payment of subsistence and travel expenses allowed by law shall be paid from the administrative fund.
Sec. 13. Section 23-108.02, Arizona Revised Statutes, is amended to read:
23-108.02. Administrative law judges
A. The commission shall appoint administrative law judges of the commission who shall be members of the Arizona state bar and who are subject to the state personnel board.
B. The annual compensation of the chief administrative law judge and of the administrative law judges shall be as determined pursuant to section 38‑611.
Sec. 14. Section 23-391, Arizona Revised Statutes, is amended to read:
23-391. Overtime pay; work week
A. Subject to availability of appropriated funds, an employee of this state or any political subdivision serving in a position determined by the law enforcement merit system council, the director of the department of administration, the Arizona board of regents, the board of directors for the Arizona state schools for the deaf and the blind or the governing body of a political subdivision, in the discretion of the board or body, to be eligible for overtime compensation who is required to work in excess of the person's normal work week shall be compensated for the excess time at the following rates:
1. One and one‑half times the regular rate at which the person is employed or one and one‑half hours of compensatory time off for each hour worked if overtime compensation is mandated by federal law.
2. If federal law does not mandate overtime compensation, the person shall receive the regular rate of pay or compensatory leave on an hour for hour basis at the discretion of the board or governing body.
B. Notwithstanding subsection A of this section, the state or a political subdivision may provide, by action of the law enforcement merit system council, the Arizona board of regents, the board of directors for the Arizona state schools for the deaf and the blind or the director of the department of administration in the case of the state or of the governing body of the political subdivision, for a work week of forty hours in less than five days for certain classes of employees employed by the state or the political subdivision.
C. For state agencies of the state personnel system, unless otherwise provided by law, the state work week is the period of seven consecutive days starting Saturday at 12:00 a.m. and ending Friday at 11:59 p.m. Notwithstanding any other law, the director of the department of administration may authorize a workday, for the method and purpose of recording time entries to be included in a workweek and a pay period for employees of this state who are in the correctional officer class series of the state department of corrections who are regularly scheduled to work a shift that spans two calendar days, defined as the day a majority of the hours are regularly scheduled to be worked. If the regularly scheduled hours are equally split between two calendar days, the workday is defined as the day the shift ends. Scheduled shift start and end times shall not be adjusted to avoid the payment of overtime.
Sec. 15. Section 23-406, Arizona Revised Statutes, is amended to read:
23-406. Division of occupational safety and health; director; appointment; qualifications; compensation
A. There shall be a division of occupational safety and health within the industrial commission.
B. The director of the division of occupational safety and health shall be the administrative head of the division under the control of the commission. The director shall be appointed by the commission and shall serve at the pleasure of the commission be subject to the rules of the personnel board pursuant to title 41, chapter 4, article 4.
C. The director shall be:
1. A person who has been employed in the safety or health profession a minimum of ten years in the aggregate and is currently engaged in the broad practice of safety or health or one of its relevant specialties or holds a degree from an accredited college or university appropriate to the field of safety and health and has a minimum of five years' experience in the broad practice of safety or one of its relevant specialties, and has been registered or licensed by a state agency as a professional appropriate to his field of safety and health or has been certified as competent within the broad practice of safety or health or one of its relevant specialties by an organization recognized as qualified by the American society of safety engineers or American industrial hygiene association.
2. Competent to deal with the planning, design and needs of business operations as the use of such operations relates to the safe, convenient and economic performance of their business functions, with not less than three years' experience in an administrative capacity in the field of occupational safety and health.
D. The salary of the director shall be determined pursuant to section 38‑611.
Sec. 16. Section 23-1501, Arizona Revised Statutes, is amended to read:
23-1501. Severability of employment relationships; protection from retaliatory discharges; exclusivity of statutory remedies in employment
A. The public policy of this state is that:
1. The employment relationship is contractual in nature.
2. The employment relationship is severable at the pleasure of either the employee or the employer unless both the employee and the employer have signed a written contract to the contrary setting forth that the employment relationship shall remain in effect for a specified duration of time or otherwise expressly restricting the right of either party to terminate the employment relationship. Both the employee and the employer must sign this written contract, or this written contract must be set forth in the employment handbook or manual or any similar document distributed to the employee, if that document expresses the intent that it is a contract of employment, or this written contract must be set forth in a writing signed by the party to be charged. Partial performance of employment shall not be deemed sufficient to eliminate the requirements set forth in this paragraph. Nothing in this paragraph shall be construed to affect the rights of public employees under the Constitution of Arizona and state and local laws of this state or the rights of employees and employers as defined by a collective bargaining agreement.
3. An employee has a claim against an employer for termination of employment only if one or more of the following circumstances have occurred:
(a) The employer has terminated the employment relationship of an employee in breach of an employment contract, as set forth in paragraph 2 of this subsection, in which case the remedies for the breach are limited to the remedies for a breach of contract.
(b) The employer has terminated the employment relationship of an employee in violation of a statute of this state. If the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy set forth in or arising out of the statute, including the following:
(i) The civil rights act prescribed in title 41, chapter 9.
(ii) The occupational safety and health act prescribed in chapter 2, article 10 of this title.
(iii) The statutes governing the hours of employment prescribed in chapter 2 of this title.
(iv) The agricultural employment relations act prescribed in chapter 8, article 5 of this title.
(v) The statutes governing disclosure of information by public employees prescribed in title 38, chapter 3, article 9.
All definitions and restrictions contained in the statute also apply to any civil action based on a violation of the public policy arising out of the statute. If the statute does not provide a remedy to an employee for the violation of the statute, the employee shall have the right to bring a tort claim for wrongful termination in violation of the public policy set forth in the statute.
(c) The employer has terminated the employment relationship of an employee in retaliation for any of the following:
(i) The refusal by the employee to commit an act or omission that would violate the Constitution of Arizona or the statutes of this state.
(ii) The disclosure by the employee in a reasonable manner that the employee has information or a reasonable belief that the employer, or an employee of the employer, has violated, is violating or will violate the Constitution of Arizona or the statutes of this state to either the employer or a representative of the employer who the employee reasonably believes is in a managerial or supervisory position and has the authority to investigate the information provided by the employee and to take action to prevent further violations of the Constitution of Arizona or statutes of this state or an employee of a public body or political subdivision of this state or any agency of a public body or political subdivision.
(iii) The exercise of rights under the workers' compensation statutes prescribed in chapter 6 of this title.
(iv) Service on a jury as protected by section 21‑236.
(v) The exercise of voting rights as protected by section 16‑1012.
(vi) The exercise of free choice with respect to nonmembership in a labor organization as protected by section 23‑1302.
(vii) Service in the national guard or armed forces as protected by sections 26‑167 and 26‑168.
(viii) The exercise of the right to be free from the extortion of fees or gratuities as a condition of employment as protected by section 23‑202.
(ix) The exercise of the right to be free from coercion to purchase goods or supplies from any particular person as a condition of employment as protected by section 23‑203.
(x) The exercise of a victim's right to leave work as provided in sections 8‑420 and 13‑4439.
B. If the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy prescribed in or arising out of the statute.
(d) In the case of a public employee, if the employee has a right to continued employment under the United States Constitution, The Arizona Constitution, Arizona Revised Statutes, any applicable regulation, policy, practice or contract of the state, any subdivision of the state or other public entity or any ordinance of any political subdivision of this state.
Sec. 17. Section 26-101, Arizona Revised Statutes, is amended to read:
26-101. Department of emergency and military affairs; organization; adjutant general; qualifications
A. The department of emergency and military affairs is established consisting of a division of emergency management and other divisions or offices as determined by the adjutant general pursuant to section 26‑102, subsection C, paragraph 8.
B. The department shall consist of the adjutant general and such other officers, warrant officers, enlisted personnel and employees as deemed necessary.
C. The department shall be administered and controlled by the governor as commander‑in‑chief. The adjutant general shall be the director of the department.
D. The adjutant general shall be appointed by the governor pursuant to section 38‑211 and shall serve at the pleasure of the governor for a term of office of five years or to the age provided by federal law relating to state adjutants general, whichever occurs first. The person appointed shall be a citizen of the United States and a resident of the state of Arizona. At the time of the appointment, the person appointed shall have qualifications required by the United States department of defense for the adjutant general and shall attain federal recognition in a grade not less than brigadier general not later than one year after the appointment. The adjutant general shall have served not less than five years in the national guard of Arizona in the last ten years. Failure to meet these qualifications, failure or to retain federal recognition or attainment of the age provided by federal law relating to state adjutants general shall terminate the appointment.
E. The adjutant general shall receive compensation as determined pursuant to section 38‑611, and shall devote full time to the office.
F. At the time of appointment, the adjutant general shall receive the state rank of major general and, at that time, shall become the ranking officer in the department of emergency and military affairs.
Sec. 18. Section 31-401, Arizona Revised Statutes, is amended to read:
31-401. Board of executive clemency; qualifications; appointment; officers; quorum; meeting
A. The board of executive clemency is established consisting of five members who are appointed by the governor pursuant to this subsection and section 38‑211. The governor shall appoint a selection committee consisting of the director of the department of public safety, the director of the state department of corrections and three other persons who shall submit a list of three qualified candidates to the governor for each vacancy on the board. The governor shall fill the vacancy by appointing a member to the board of executive clemency from the list.
B. The members of the board shall serve on a full‑time basis and the compensation of members shall be as determined pursuant to section 38‑611. Each member shall be appointed on the basis of broad professional or educational qualifications and experience and shall have demonstrated an interest in the state's correctional program. No more than two members from the same professional discipline shall be members of the board at the same time.
C. Each member appointed to the board shall complete a four week course relating to the duties and activities of the board. The course shall be designed and administered by the chairman of the board and shall be conducted by the office of the board of executive clemency and the office of the attorney general. The course shall include training in all statutes that pertain to the board and participation in a decision making workshop.
D. Members shall be appointed for a term of five years to expire on the third Monday in January of the appropriate year.
E. A member of the board may be removed by the governor for cause.
F. The governor shall select a member of the board as chairman. The chairman shall select other officers as are advisable. The term of the chairman is two years, except that the chairman may be removed as chairman at the pleasure of the governor. If a board member's term expires while the member is serving as chairman, the chair shall be deemed vacant and a new chairman shall be selected.
G. The board may adopt rules, not inconsistent with law, as it deems proper for the conduct of its business. The board may from time to time amend or change the rules and publish and distribute the rules as provided by the administrative procedures act.
H. The board shall meet at least once a month at the state prison and at other times or places as the board deems necessary.
I. The presence of three members of the board constitutes a quorum, except that the chairman may designate that the presence of two members of the board constitutes a quorum.
J. If two members of the board constitute a quorum pursuant to subsection I of this section and the two members do not concur on the action under consideration, the chairman of the board, if the chairman is not one of the members who constituted the quorum and after reviewing the information considered by the two members, shall cast the deciding vote. If the chairman of the board is one of the two members constituting a quorum at a hearing under subsection I of this section, and there is not concurrence on the action under consideration, the action fails.
K. The board shall employ an executive director whose compensation shall be determined pursuant to section 38‑611. The chairman of the board may act as the executive director.
Sec. 19. Section 32-1103, Arizona Revised Statutes, is amended to read:
32-1103. Registrar of contractors; salary
The governor shall appoint a registrar of contractors pursuant to section 38‑211 for a term coterminous with that of the governor or until the registrar's successor is appointed and qualifies. The registrar shall serve at the pleasure of the governor. The registrar is vested with all functions and duties relating to administration of this chapter. The registrar shall receive compensation as determined pursuant to section 38‑611.
Sec. 20. Section 32-1509, Arizona Revised Statutes, is amended to read:
32-1509. Executive director; compensation; duties
A. Subject to title 41, chapter 4, article 4, the board shall appoint an executive director who serves at the pleasure of the board. The executive director shall not be a board member and shall not have any financial interests in the practice of naturopathic medicine or the training of naturopathic physicians. The board may authorize the executive director to represent the board and to vote on behalf of the board at meetings of national organizations of which the board is a dues paying member.
B. The executive director and other board staff are eligible to receive compensation as determined pursuant to section 38‑611.
C. The executive director or that person's designee shall:
1. Subject to title 41, chapter 4, article 4 and, as applicable, articles 5 and 6, employ, evaluate, dismiss, discipline and direct professional, clerical, technical, investigative and administrative personnel necessary to carry on the work of the board.
2. Set compensation for board employees within the range determined under section 38‑611.
2. 3. As directed by the board, prepare and submit recommendations to the board for amendments to this chapter for consideration by the legislature.
3. 4. Subject to title 41, chapter 4, article 4, employ medical consultants and agents necessary to conduct investigations, gather information and perform those duties the executive director determines are necessary and appropriate to enforce this chapter.
4. 5. Issue licenses and certificates pursuant to section 32‑1526 to applicants who meet the requirements of this chapter.
5. 6. Maintain a record of board actions and proceedings, including the issuance, denial, renewal, suspension or revocation of licenses and certificates.
6. 7. Manage the board's offices.
7. 8. Prepare minutes, records, reports, registries, directories, books and newsletters and record all board transactions and orders.
8. 9. Collect all monies due and payable to the board.
9. 10. Pay all bills for authorized expenditures of the board and its staff.
10. 11. Prepare an annual budget.
11. 12. Submit a copy of the budget each year to the governor, the speaker of the house of representatives and the president of the senate.
12. 13. Initiate an investigation if evidence appears to demonstrate that a person licensed or certified by the board may be engaged in unprofessional conduct or may be medically incompetent or mentally or physically unable to safely practice medicine.
13. 14. Issue subpoenas if necessary to compel the attendance and testimony of witnesses and the production of books, records, documents and other evidence.
14. 15. Sign and execute and provide assistance to the attorney general in preparing disciplinary orders, rehabilitative orders and notices of hearings as directed by the board.
15. 16. Enter into contracts for goods and services pursuant to title 41, chapter 23 that are necessary to carry out board policies and directives.
16. 17. Execute board directives.
17. 18. Represent the board with the federal government, other states or jurisdictions of the United States, this state, political subdivisions of this state, the news media and the public.
18. 19. Maintain a roster of all persons who are licensed or certified under this chapter that indicates:
(a) The person's name.
(b) The person's current address of record.
(c) The date of issuance and the number of the person's license or certificate.
(d) The status of the person's license or certificate.
19. 20. Maintain an accurate account of all receipts, expenditures and refunds granted pursuant to this chapter.
20. 21. Conduct periodic inspection of the dispensing practices and the prescribing practices of doctors of naturopathic medicine and report dispensing and prescribing restrictions imposed by the board against doctors of naturopathic medicine to other state and federal regulatory agencies.
21. 22. Affix the seal of the board to necessary documents. The imprint of the seal with the signature of the executive director is evidence of official board action.
22. 23. On behalf of the board, enter into stipulated agreements with persons who are under the jurisdiction of the board for the treatment, rehabilitation and monitoring of chemical substance abuse or misuse.
23. 24. Review all complaints filed pursuant to section 32‑1551. If delegated by the board, the executive director may dismiss complaints.
24. 25. If delegated by the board, refer cases directly to a formal interview or a formal hearing.
25. 26. If delegated by the board, enter into a consent agreement if there is evidence of danger to the public health and safety.
26. 27. If delegated by the board, grant uncontested requests for retired status or cancellation of a license.
27. 28. Perform all other duties required by the board.
D. Medical consultants and agents appointed pursuant to subsection C, paragraph 3 4 of this section are eligible to receive compensation determined by the executive director of not more than two hundred dollars for each day of service.
E. A person who is aggrieved by an action taken by the executive director may request a board review of that action by filing with the board a written request within thirty days after that person has been notified of the action. Notification shall be by personal delivery or certified mail to the person's last known address on file with the board. The board shall review the decision at its next regularly scheduled meeting and either approve, modify or reject the executive director's action.
Sec. 21. Section 32-3504, Arizona Revised Statutes, is amended to read:
32-3504. Powers and duties; inspection of records; personnel examinations; immunity
A. The board shall:
1. Enforce and administer the provisions of this chapter.
2. Adopt rules necessary to administer this chapter.
3. Examine applicants for licensure pursuant to this chapter at times and places it designates.
4. Investigate each applicant for licensure, before a license is issued, in order to determine if the applicant is qualified pursuant to this chapter.
5. Keep a record of all its acts and proceedings pursuant to this chapter, including the issuance, refusal, renewal, suspension or revocation of licenses.
6. Beginning on January 1, 1999, require each applicant for initial licensure to submit a full set of fingerprints to the board for a state and federal criminal history records check pursuant to section 41‑1750 and Public Law 92‑544.
7. Maintain a register which contains the name, the last known place of residence and the date and number of the license of all persons licensed pursuant to this chapter.
8. Compile, once every two years, a list of licensed respiratory care practitioners who are authorized to practice in this state.
9. Establish minimum annual continuing education requirements for persons licensed under this chapter.
B. The board, in approving training programs for respiratory therapists and training programs for respiratory therapy technicians shall consider the requirements and standards set by the American medical association's committee on allied health education and accreditation in collaboration with the joint review committee for respiratory therapy education. The board may recognize examinations administered by a national board for respiratory care approved by the board.
C. The board may employ an executive director and other temporary and permanent personnel it deems necessary. The executive officer and other personnel are eligible to receive compensation pursuant to section 38‑611.
C. D. The board may conduct examinations under a uniform examination system and may make arrangements with the national board of respiratory care or other organizations regarding examination materials it determines necessary and desirable.
D. E. The board and its members, personnel and board examiners are personally immune from suit with respect to all acts done and actions taken in good faith and in furtherance of the purposes of this chapter.
Sec. 22. Section 35-196.01, Arizona Revised Statutes, is amended to read:
35-196.01. Expenditure of state monies for certain purposes
A. Subject to the approval of the director of the department of administration, A budget unit may shall not spend any appropriated monies for either of the following unless monies are appropriated for the specific purpose:
1. Transportation or other travel expenses necessary for bringing any person into this state who is not a resident of this state for an interview for prospective employment.
2. Transportation or moving expenses for any person newly employed or retained.
B. A budget unit may spend monies to reimburse current employees for reasonable relocation expenses related to management initiated geographical reassignments of more than fifty miles from an employee's current work site pursuant to rules adopted by the director of the department of administration.
C. On or before September 1 of each year, a budget unit shall report to the governor's office of strategic planning and budgeting and the joint legislative budget committee regarding any monies spent for the prior fiscal year for the purposes prescribed in this section.
Sec. 23. Section 36-102, Arizona Revised Statutes, is amended to read:
36-102. Department of health services; director; appointment; search committee; compensation
A. There is established a department of health services.
B. The direction, operation and control of the department are the responsibility of the director.
C. The director shall be appointed by the governor from a list of names submitted by the search committee pursuant to section 38‑211 and shall serve at the pleasure of the governor. The director shall be a person who has:
1. Administrative experience in the private sector, with progressively increasing responsibilities.
2. An educational background that prepares the director for the administrative responsibilities assigned to the position.
3. Health related experience which insures familiarity with the peculiarities of health problems.
D. Qualifications of candidates for the position of director shall be reviewed by a search committee of seven persons selected by the governor. The names of all those candidates determined by the committee to be qualified for the position shall be submitted to the governor for the governor's consideration. The governor may request additional names from the committee if the governor deems necessary. For each subsequent vacancy in the position of director, a new committee shall be appointed by the governor as provided in this section.
D. E. Compensation for the director shall be established pursuant to section 38‑611.
Sec. 24. Section 36-450.02, Arizona Revised Statutes, is amended to read:
36-450.02. Nonretaliatory policy
A. Each health care institution licensed pursuant to this chapter shall adopt a policy that prohibits retaliatory action against a health professional who in good faith:
1. Makes a report to the health care institution pursuant to the requirements of section 36‑450.01.
2. Having provided the health care institution a reasonable opportunity to address the report, provides information to a private health care accreditation organization or governmental entity concerning the activity, policy or practice that was the subject of the report.
B. This section does not prohibit a health care institution licensed pursuant to this chapter from taking action against a health professional for a purpose not related to a report filed pursuant to section 36‑450.01.
C. Except as provided in section 23‑1501, subsection A, paragraph 3, subdivisions (a), and (c) and (d), this section shall only be enforced through the provisions of this chapter.
D. There shall be a rebuttable presumption that any termination or other adverse action that occurs more than one hundred eighty days after the date of a report made pursuant to either subsection A, paragraph 1 or 2 of this section is not a retaliatory action.
Sec. 25. Section 38-448, Arizona Revised Statutes, is amended to read:
38-448. State employees; access to internet pornography prohibited; cause for dismissal; definitions
A. Except to the extent required in conjunction with a bona fide, agency approved research project or other agency approved undertaking, an employee of an agency shall not knowingly use agency owned or agency leased computer equipment to access, download, print or store any information infrastructure files or services that depict nudity, sexual activity, sexual excitement or ultimate sexual acts as defined in section 13‑3501. Agency heads shall give, in writing, any agency approvals. Agency approvals are available for public inspection pursuant to section 39‑121.
B. An employee who violates this section may be subject to performs an act that is cause for discipline or dismissal of the employee and for an employee in state service is considered misuse or unauthorized use of state property pursuant to section 41‑773.
C. All agencies shall immediately furnish their current employees with copies of this section. All agencies shall furnish all new employees with copies of this section at the time of authorizing an employee to use an agency computer.
D. For the purposes of this section:
1. "Agency" means:
(a) All offices, agencies, departments, boards, councils or commissions of this state.
(b) All state universities.
(c) All community college districts.
(d) All legislative agencies.
(e) All departments or agencies of the state supreme court or the court of appeals.
2. "Information infrastructure" means telecommunications, cable and computer networks and includes the internet, the world wide web, usenet, bulletin board systems, on‑line systems and telephone networks.
Sec. 26. Section 38-532, Arizona Revised Statutes, is amended to read:
38-532. Prohibited personnel practice; violation; reinstatement; exceptions; civil penalty
A. It is a prohibited personnel practice for an employee who has control over personnel actions to take reprisal against an employee for a disclosure of information of a matter of public concern by the employee to a public body that the employee reasonably believes evidences:
1. A violation of any law.
2. Mismanagement, a gross waste of monies or an abuse of authority.
B. The disclosure by an employee to a public body alleging a violation of law, mismanagement, gross waste of monies or abuse of authority shall be in writing and shall contain the following information:
1. The date of the disclosure.
2. The name of the employee making the disclosure.
3. The nature of the alleged violation of law, mismanagement, gross waste of monies or abuse of authority.
4. If possible, the date or range of dates on which the alleged violation of law, mismanagement, gross waste of monies or abuse of authority occurred.
C. An employee who knowingly commits a prohibited personnel practice shall be ordered by the state personnel board, a community college district governing board, a school district governing board, a city or town personnel board or any other appropriate independent personnel board established or authorized pursuant to section 38‑534 to pay a civil penalty of up to five thousand dollars to the state general fund, a county general fund, a community college district unrestricted general fund, a school district maintenance and operation fund or a city or town general fund, whichever is appropriate. The employee who committed the prohibited personnel practice, not the governmental entity, shall pay the civil penalty. On a finding that an employee committed a prohibited personnel practice, the employer shall take appropriate disciplinary action including dismissal, except that on a finding that an employee committed a prohibited personnel practice against an employee who disclosed information that the employee reasonably believed evidenced a violation of any law, the employee who knowingly committed the prohibited personnel practice is subject to a civil penalty of up to ten thousand dollars, the employer shall dismiss the employee and the employee is barred from any future employment by the government entity.
D. An employee or former employee against whom a prohibited personnel practice is committed may recover attorney fees, costs, back pay, general and special damages and full reinstatement for any reprisal resulting from the prohibited personnel practice as determined by the court.
E. An employee does not commit a prohibited personnel practice if he takes reprisal against an employee if that employee discloses information in a manner prohibited by law or the materials or information are prescribed as confidential by law.
F. This section may not be used as a defense in a disciplinary action where the employee is being disciplined for cause pursuant to section 41‑773, except in a hearing on a complaint brought pursuant to this section by an employee or former employee who believes he has been the subject of a prohibited personnel practice as prescribed in this section as the result of a disclosure of information.
G. On request or at any time an employee alleges reprisal, an employer shall provide an employee who is subject to disciplinary or corrective action, suspension, demotion or dismissal with a copy of this section.
H. If an employee or former employee believes that a personnel action taken against him is the result of his disclosure of information under this section, he may make a complaint to an appropriate independent personnel board, if one is established or authorized pursuant to section 38‑534, or to a community college district governing board, school district governing board or city or town council. If an independent personnel board has not been established or authorized, or if a school district governing board, a community college district governing board or a city or town council does not hear and decide personnel matters brought pursuant to this section, the employee or former employee may make a complaint to the state personnel board. A complaint made pursuant to this subsection shall be made within ten days of the effective date of the action taken against him. The state personnel board, a school district governing board, a community college district governing board, a city or town council or any other appropriate independent personnel board shall, pursuant to the rules governing appeals under section 41‑783 41‑785, make a determination concerning:
1. The validity of the complaint.
2. Whether a prohibited personnel practice was committed against the employee or former employee as a result of disclosure of information by the employee or former employee.
I. If the state personnel board, a community college district governing board, a school district governing board, a city or town council or any other appropriate independent personnel board established or authorized pursuant to section 38‑534 determines that a prohibited personnel practice was committed as a result of disclosure of information by the employee or former employee, it shall rescind the personnel action and order that all lost pay and benefits be returned to the employee or former employee. The employee, former employee, employee alleged to have committed a prohibited personnel practice pursuant to subsection A of this section or employer may appeal the decision of the state personnel board, a community college district governing board, a school district governing board, a city or town council or any other appropriate independent personnel board established or authorized pursuant to section 38‑534 to the superior court as provided in title 12, chapter 7, article 6.
J. For purposes of a hearing by the state personnel board, a school district governing board, a community college district governing board, a city or town council or any other appropriate independent personnel board conducted under this section, the employee, former employee, employee alleged to have committed the prohibited personnel practice pursuant to subsection A of this section and employer may be represented by counsel. In addition, representation by counsel in such hearings shall meet any other requirements stipulated by the state personnel board, a school district governing board, a community college district governing board, a city or town council or any other appropriate independent personnel board or as required by law.
K. An employee or former employee may also seek injunctive relief as is otherwise available in civil actions. A court may award reasonable attorney fees to an employee or former employee who prevails in an action pursuant to this section, but the award of attorney fees shall not exceed ten thousand dollars.
L. This section shall not be construed to limit or extend the civil or criminal liability of an employee or former employee for any disclosure of information or to limit an employee's right to a separate pretermination hearing with the employee's employer, as provided by law.
M. An employee who knowingly makes a false accusation that a public officer or employee who has control over personnel actions has engaged in a violation of any law, mismanagement, a gross waste of monies or an abuse of authority is personally subject to a civil penalty of up to twenty‑five thousand dollars and dismissal from employment by the employer.
Sec. 27. Section 38-610.01, Arizona Revised Statutes, is amended to read:
38-610.01. Leave of absence and compensation for officers and employees during active military service
A. If the president of the United States or the governor of this state declares that a state of emergency exists, an officer or employee of this state who is ordered to active military service of the United States or this state as a member of the national guard, air national guard, army reserve, naval reserve, marine corps reserve, air force reserve or coast guard reserve and whose state employment is subject to title 41, chapter 4, article 4 or who is exempt pursuant to section 41‑742 41‑771, subsection D A, paragraph 1, 2, 3, 4, or 5, 7, 8, 9, 10, 11, 12 or 13 or subsection B, paragraph 1, 2, 3, 4, 5, 7 or 8 is eligible for an additional leave of absence until released from active duty by competent authority. During the additional leave of absence, the officer or employee shall continue to receive the officer's or employee's salary or compensation, less the amount of all pay and allowances for military activities while on active duty.
B. An officer or employee who receives salary or compensation pursuant to subsection A of this section is not entitled to accrue annual leave or sick leave during the period of active duty. Before qualifying for the compensation pursuant to subsection A of this section, the officer or employee must exhaust all military leave balances by the time of activation or at any time during the active duty period.
C. An officer or employee may receive compensation pursuant to subsection A of this section for the continuous duration of the officer's or employee's order.
D. Within sixty days after an officer or employee who receives pay differential pursuant to this section completes the period of active duty, the officer or employee shall provide proof that the officer or employee rendered honorable service while on active duty during any period for which the officer or employee received the pay differential pursuant to this section. The state may seek recovery of the pay differential from any person who fails to provide proof of honorable service.
E. The director of the department of administration shall establish procedures to be used by an eligible officer or employee to receive compensation pursuant to subsection A of this section.
Sec. 28. Section 38-610.02, Arizona Revised Statutes, is amended to read:
38-610.02. Leave of absence and compensation for national disaster medical system employment
A. An officer or employee of this state who is called into employment to the national disaster medical system under the United States department of health and human services and whose state employment is subject to title 41, chapter 4, article 4 or who is exempt pursuant to section 41‑742 41‑771, subsection D A, paragraph 1, 2, 3, 4, or 5, 7, 8, 9, 10, 11, 12 or 13 or subsection B, paragraph 1, 2, 3, 4, 5, 7 or 8 is eligible for an additional leave of absence until released from active duty by competent authority. During the additional leave of absence, the officer or employee shall continue to receive the officer's or employee's salary or compensation, less the amount of all pay and allowances for activities while on active duty with the national disaster medical system.
B. An officer or employee who receives salary or compensation pursuant to subsection A of this section is not entitled to accrue annual leave or sick leave during the period of active duty.
C. An officer or employee may receive compensation pursuant to subsection A of this section for the continuous duration of the officer's or employee's order.
D. Within sixty days after an officer or employee who receives pay differential pursuant to this section completes the period of active duty, the officer or employee shall provide proof that the officer or employee rendered honorable service while on active duty during any period for which the officer or employee received the pay differential pursuant to this section. This state may seek recovery of the pay differential from any person who fails to provide proof of honorable service.
E. The rights and duties of an officer or employee who is subject to this section is subject to the uniformed services employment and reemployment rights act (38 United States Code chapter 43).
F. The director of the department of administration shall establish procedures to be used by an eligible officer or employee to receive compensation pursuant to subsection A of this section.
Sec. 29. Section 38-611.01, Arizona Revised Statutes, is amended to read:
38-611.01. Arizona state retirement system; incentive compensation plan; special market adjustments
The Arizona state retirement system established by chapter 5, article 2 of this title:
1. May administer an incentive compensation plan for investment related personnel established in consultation with the director of the department of administration. The Arizona state retirement system shall file a copy of any incentive compensation plan for investment related personnel with the governor, the president of the senate, the speaker of the house of representatives, the office of strategic planning and budgeting, the joint legislative budget committee and the department of administration within ten business days of its adoption or readoption.
2. Except for the incentive compensation plan for investment related personnel, shall not establish any other compensation plans without the approval of the director of the department of administration.
3. May request that the director of the department of administration establish a special pay plan market adjustments system for the Arizona state retirement system director, deputy director, chief investment officer, investment related personnel and fiduciary or investment counsel. The director of the department of administration, pursuant to section 41‑742, subsection C, paragraph 4 41‑744, shall establish the special pay plan market adjustments system after considering the recommendations of the Arizona state retirement system board and using relevant market data. The director of the department of administration may adopt other special pay plans market adjustments systems determined necessary for certain classes or groups of Arizona state retirement system employees, taking into consideration such factors as occupational patterns, economic conditions and pay ranges common to government, business and industry, and shall work with the Arizona state retirement system in establishing the plans.
Sec. 30. Section 38-611.02, Arizona Revised Statutes, is amended to read:
38-611.02. Public safety personnel retirement system; special market adjustments
The board of trustees of the public safety personnel retirement system established by chapter 5, article 4 of this title:
1. May administer an incentive compensation plan for investment related personnel established in consultation with the director of the department of administration. The public safety personnel retirement system shall file a copy of any incentive compensation plan for investment related personnel with the governor, the president of the senate, the speaker of the house of representatives, the office of strategic planning and budgeting, the joint legislative budget committee and the department of administration within ten business days of its adoption or readoption.
2. Except for the incentive compensation plan for investment related personnel, shall not establish any other compensation plans without the approval of the director of the department of administration.
3. May request that the director of the department of administration establish a special pay plan market adjustments system for the public safety personnel retirement system administrator, deputy or assistant administrator, chief investment officer, investment related personnel and fiduciary or investment counsel. The director of the department of administration, pursuant to section 41‑742, subsection C, paragraph 4 41‑744, shall establish the special pay plan market adjustments system after considering the recommendations of the public safety personnel retirement system board of trustees, including consideration of the salary ranges recommended by an independent compensation consultant and using relevant market data. The director of the department of administration may adopt other special pay plans market adjustments systems determined necessary for certain classes or groups of public safety personnel retirement system employees, taking into consideration such factors as occupational patterns, economic conditions and pay ranges common to government, business and industry, and shall work with the public safety personnel retirement system in establishing the plans.
Sec. 31. Section 38-715, Arizona Revised Statutes, is amended to read:
38-715. Director; powers and duties
A. The board shall appoint a
director. The term of the director
shall serve at the pleasure of the board
is one year and expires on June 30. On
expiration of a director's term, the board may reappoint the director for
another term. The board may remove the director at any time for cause.
B. The director shall appoint a deputy director and assistant directors with the approval of the board.
C. The director, under the supervision of the board, shall:
1. Administer this article.
2. Be responsible for the recruitment, hiring and day‑to‑day management of employees.
2. Hire employees and services the director deems necessary and prescribe their duties.
3. Prescribe procedures to be followed by members and their beneficiaries in filing applications for benefits.
4. Prescribe procedures to be followed by employers for remitting data and monies to ASRS and for receiving data and monies from ASRS.
5. Be responsible for:
(a) Income and the collection of income and the accuracy of all expenditures.
(b) Maintaining books and maintaining and processing records of ASRS.
(c) Providing continuing education programs for the board to keep the board members informed of current issues and information needed to carry out their duties.
6. Perform additional powers and duties as may be prescribed by the board and delegated to the director.
D. The director, under the supervision and approval of the board, may:
1. Delegate duties and responsibilities to such state departments as the director deems feasible and desirable to administer this article.
2. Appoint a custodian for the safekeeping of all investments owned by ASRS and register stocks, bonds and other investments in the name of a nominee.
3. Establish one or more reserve holding accounts, into which the board shall close periodically the account balances of inactive accounts. If any person files a claim and furnishes proof of ownership of any amounts in any inactive account the claim shall be paid from the reserve holding account on the same basis as if no action had been taken under this paragraph. Interest and supplemental credits shall be allocated to each reserve holding account on June 30 of each year, as determined by the board. For the purposes of this paragraph, "inactive account" means an account to which contributions have not been paid for six months or more.
4. Make retirement under this article effective retroactively to on or after the day following the date employment is terminated if the member was unable to apply before the retroactive effective date through no fault of the member.
E. The director, under supervision of the governing committee for tax deferred annuity and deferred compensation plans, may hire and supervise employees and obtain services the director deems necessary to administer article 5 of this chapter. The tax deferred annuity and deferred compensation programs established pursuant to article 5 of this chapter shall bear the costs for these employees and services.
F. The director and all persons employed by the director are subject to section 38‑611 and title 41, chapter 4, article 4.
G. In consultation with the director of the department of administration, the board may enter into employment agreements and establish the terms of those agreements with persons holding any of the following asrs positions:
1. Director.
2. Deputy director.
3. Chief investment officer.
4. Fiduciary or investment counsel.
Sec. 32. Section 38-848, Arizona Revised Statutes, is amended to read:
38-848. Board of trustees; powers and duties; independent trust fund; administrator; agents and employees
A. The board of trustees shall consist of seven members and shall have the rights, powers and duties that are set forth in this section. The term of office of members shall be five years to expire on the third Monday in January of the appropriate year. Members are eligible to receive compensation in an amount of fifty dollars a day, but not to exceed one thousand dollars in any one fiscal year, and are eligible for reimbursement of expenses pursuant to chapter 4, article 2 of this title. The board consists of the following members appointed by the governor pursuant to section 38‑211:
1. Two elected members from a local board to represent the employees.
2. One member to represent this state as an employer of public safety personnel. This member shall have the qualifications prescribed in subsection T R of this section.
3. One member to represent the cities as employers of public safety personnel.
4. An elected county or state official or a judge of the superior court, court of appeals or supreme court.
5. Two public members. These members shall have the qualifications prescribed in subsection T R of this section.
B. All monies in the fund shall be deposited and held in a public safety personnel retirement system depository. Monies in the fund shall be disbursed from the depository separate and apart from all monies or funds of this state and the agencies, instrumentalities and subdivisions of this state, except that the board may commingle the assets of the fund and the assets of all other plans entrusted to its management in one or more group trusts, subject to the crediting of receipts and earnings and charging of payments to the appropriate employer, system or plan. The monies shall be secured by the depository in which they are deposited and held to the same extent and in the same manner as required by the general depository law of this state. For purposes of making the decision to invest in securities owned by the fund or any plan administered by the board, the fund and assets of the plans are subject to the sole management of the board for the purpose of this article except that, on the board's election to invest in a particular security or make a particular investment, the assets comprising the security or investment may be chosen and managed by third parties approved by the board. The board may invest in portfolios of securities chosen and managed by a third party. The board's decision to invest in securities such as mutual funds, commingled investment funds, exchange traded funds, private equity or venture capital limited partnerships, real estate limited partnerships or limited liability companies and real estate investment trusts whose assets are chosen and managed by third parties does not constitute an improper delegation of the board's investment authority.
C. All contributions under this system and other retirement plans that the board administers shall be forwarded to the board and shall be held, invested and reinvested by the board as provided in this article. All property and monies of the fund and other retirement plans that the board administers, including income from investments and from all other sources, shall be retained for the exclusive benefit of members, as provided in the system and other retirement plans that the board administers, and shall be used to pay benefits to members or their beneficiaries or to pay expenses of operation and administration of the system and fund and other retirement plans that the board administers.
D. The board shall have the full power in its sole discretion to invest and reinvest, alter and change the monies accumulated under the system and other retirement plans that the board administers as provided in this article. In addition to its power to make investments managed by others, the board may delegate the authority the board deems necessary and prudent to investment management pursuant to section 38‑848.03, as well as to the administrator, employed by the board pursuant to subsection K, paragraph 6 of this section, and any assistant administrators to invest the monies of the system and other retirement plans that the board administers if the administrator, investment management and any assistant administrators follow the investment policies that are adopted by the board. The board may commingle securities and monies of the fund, the elected officials' retirement plan, the corrections officer retirement plan and other plans or monies entrusted to its care, subject to the crediting of receipts and earnings and charging of payments to the account of the appropriate employer, system or plan. In making every investment, the board shall exercise the judgment and care under the circumstances then prevailing that persons of ordinary prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income from their funds as well as the probable safety of their capital, provided:
1. That not more than eighty per cent of the combined assets of the system or other plans that the board manages shall be invested at any given time in corporate stocks, based on cost value of such stocks irrespective of capital appreciation.
2. That no more than five per cent of the combined assets of the system or other plans that the board manages shall be invested in corporate stock issued by any one corporation, other than corporate stock issued by corporations chartered by the United States government or corporate stock issued by a bank or insurance company.
3. That not more than five per cent of the voting stock of any one corporation shall be owned by the system and other plans that the board administers, except that this limitation does not apply to membership interests in limited liability companies.
4. That corporate stocks and exchange traded funds eligible for purchase shall be restricted to stocks and exchange traded funds that, except for bank stocks, insurance stocks and membership interests in limited liability companies, are either:
(a) Listed or approved on issuance for listing on an exchange registered under the securities exchange act of 1934, as amended (15 United States Code sections 78a through 78ll).
(b) Designated or approved on notice of issuance for designation on the national market system of a national securities association registered under the securities exchange act of 1934, as amended (15 United States Code sections 78a through 78ll).
(c) Listed or approved on issuance for listing on an exchange registered under the laws of this state or any other state.
(d) Listed or approved on issuance for listing on an exchange of a foreign country with which the United States is maintaining diplomatic relations at the time of purchase, except that no more than twenty per cent of the combined assets of the system and other plans that the board manages shall be invested in foreign securities, based on the cost value of the stocks irrespective of capital appreciation.
(e) An exchange traded fund that is recommended by the chief investment officer of the system, that is registered under the investment company act of 1940 (15 United States Code sections 80a-1 through 80a-64) and that is both traded on a public exchange and based on a publicly recognized index.
E. Notwithstanding any other law, the board shall not be required to invest in any type of investment that is dictated or required by any entity of the federal government and that is intended to fund economic development projects, public works or social programs, but may consider such economically targeted investments pursuant to its fiduciary responsibility. The board, on behalf of the system and all other plans or trusts the board administers, may invest in, lend monies to or guarantee the repayment of monies by a limited liability company, limited partnership, joint venture, partnership, limited liability partnership or trust in which the system and plans or trusts have a financial interest, whether the entity is closely held or publicly traded and that, in turn, may be engaged in any lawful activity, including venture capital, private equity, the ownership, development, management, improvement or operation of real property and any improvements or businesses on real property or the lending of monies.
F. Conference call meetings of the board that are held for investment purposes only are not subject to chapter 3, article 3.1 of this title, except that the board shall maintain minutes of these conference call meetings and make them available for public inspection within twenty‑four hours after the meeting. The board shall review the minutes of each conference call meeting and shall ratify all legal actions taken during each conference call meeting at the next scheduled meeting of the board.
G. The board shall not be held liable for the exercise of more than ordinary care and prudence in the selection of investments and performance of its duties under the system and shall not be limited to so‑called "legal investments for trustees", but all monies of the system and other plans that the board administers shall be invested subject to all of the conditions, limitations and restrictions imposed by law.
H. Except as provided in subsection D of this section, the board may:
1. Invest and reinvest the principal and income of all assets that the board manages without distinction between principal and income.
2. Sell, exchange, convey, transfer or otherwise dispose of any investments made on behalf of the system or other plans the board administers in the name of the system or plans by private contract or at public auction.
3. Also:
(a) Vote on any stocks, bonds or other securities.
(b) Give general or special proxies or powers of attorney with or without power of substitution.
(c) Exercise any conversion privileges, subscription rights or other options and make any payments incidental to the exercise of the conversion privileges, subscription rights or other options.
(d) Consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities, delegate discretionary powers and pay any assessments or charges in connection therewith.
(e) Generally exercise any of the powers of an owner with respect to stocks, bonds, securities or other investments held in or owned by the system or other plans whose assets the board administers.
4. Make, execute, acknowledge and deliver any other instruments that may be necessary or appropriate to carry out the powers granted in this section.
5. Register any investment held by the system or other plans whose assets the board administers in the name of the system or plan or in the name of a nominee or trust.
6. At the expense of the system or other plans that the board administers, enter into an agreement with any bank or banks for the safekeeping and handling of securities and other investments coming into the possession of the board. The agreement shall be entered into under terms and conditions that secure the proper safeguarding, inventory, withdrawal and handling of the securities and other investments. No access to and no deposit or withdrawal of the securities from any place of deposit selected by the board shall be permitted or made except as the terms of the agreement may provide.
7. Appear before local boards and the courts of this state and political subdivisions of this state through counsel or appointed representative to protect the fund or the assets of other plans that the board administers. The board is not responsible for the actions or omissions of the local boards under this system but may seek review or rehearing of actions or omissions of local boards. The board does not have a duty to review actions of the local boards but may do so in its discretion in order to protect the fund. No limitations period precludes the board or administrator from contesting, or requires the board or administrator to implement or comply with, a local board decision that violates the internal revenue code or that threatens to impair the tax qualified status of the system or any plan administered by the board or administrator.
8. Empower the fund administrator to take actions on behalf of the board that are necessary for the protection and administration of the fund or the assets of other plans that the board administers pursuant to the guidelines of the board.
9. Do all acts, whether or not expressly authorized, that may be deemed necessary or proper for the protection of the investments held in the fund or owned by other plans or trusts that the board administers.
10. Settle threatened or actual litigation against any system or plan that the board administers.
I. Investment expenses and operation and administrative expenses of the board shall be accounted for separately and allocated against investment income.
J. The board, as soon as possible within a period of six months following the close of any fiscal year, shall transmit to the governor and the legislature a comprehensive annual financial report on the operation of the system and other plans that the board administers containing, among other things:
1. A balance sheet.
2. A statement of income and expenditures for the year.
3. A report on an actuarial valuation of its assets and liabilities.
4. A list of investments owned.
5. The total rate of return, yield on cost, and per cent of cost to market value of the fund and the assets of other plans that the board administers.
6. Any other statistical and financial data that may be necessary for the proper understanding of the financial condition of the system and other plans that the board administers and the results of their operations. A synopsis of the annual report shall be published for the information of members of the system, the elected officials' retirement plan or the corrections officer retirement plan.
K. The board shall:
1. Maintain the accounts of the system and other plans that the board administers and issue statements to each employer annually and to each member who may request it.
2. Report the results of the actuarial valuations to the local boards and employers.
3. Contract on a fee basis with an independent investment counsel to advise the board in the investment management of the fund and assets of other plans that the board administers and with an independent auditing firm to audit the board's accounting.
4. Permit the auditor general to make an annual audit and the results shall be transmitted to the governor and the legislature.
5. Contract on a fee basis with an actuary who shall make actuarial valuations of the system and other plans that the board administers, be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of the system, the elected officials' retirement plan, the corrections officer retirement plan and the fire fighter and peace officer cancer insurance policy program and perform other duties required in connection therewith. The actuary must be a member of a nationally recognized association or society of actuaries.
6. Employ, as administrator, a person, state department or other body to serve at the pleasure of the board.
7. Establish procedures and guidelines for contracts with actuaries, auditors, investment counsel and legal counsel and for safeguarding of securities.
L. The administrator, under the direction of the board, shall:
1. Administer this article.
2. Be responsible for the recruitment, hiring and day‑to‑day management of employees.
3. 2. Invest the funds of the system and other plans that the board administers as the board deems necessary and prudent as provided in subsections D and H of this section and subject to the investment policies and fund objectives adopted by the board.
4. 3. Establish and maintain an adequate system of accounts and records for the system and other plans that the board administers, which shall be integrated with the accounts, records and procedures of the employers so that the system and other plans that the board administers operates most effectively and at minimum expense and that duplication of records and accounts is avoided.
5. 4. In accordance with the board's governance policy and procedures and the budget adopted by the board, hire such employees and services the administrator deems necessary and prescribe their duties, including the hiring of one or more assistant administrators to manage the system's operations, investments and legal affairs.
6. 5. Be responsible for income, the collection of the income and the accuracy of all expenditures.
7. 6. Recommend to the board annual contracts for the system's actuary, auditor, investment counsel, legal counsel and safeguarding of securities.
8. 7. Perform additional duties and powers prescribed by the board and delegated to the administrator.
M. The system is an independent trust fund and the board, is not subject to title 41, chapter 6 the administrator, the assistant administrators and all persons employed by them are not under the jurisdiction of the department of administration or any other agency, department or instrumentality of this state or subject to section 38‑611 or title 41, chapter 4 or 6. The salaries of the administrator, assistant administrators and other employees of the board are the sole determination of the board. Contracts for goods and services approved by the board are not subject to title 41, chapter 23. As an independent trust fund whose assets are separate and apart from all other funds of this state, the system and the board are not subject to the restrictions prescribed in section 35‑154 or article IX, sections 5 and 8, Constitution of Arizona. Loans, guarantees, investment management agreements and investment contracts that are entered into by the board are contracts memorializing obligations or interests in securities that the board has concluded, after thorough due diligence, do not involve investments in Sudan or Iran or otherwise provide support to terrorists or in any way facilitate illegal immigration into the United States. These contracts do not involve the procurement, supply or provision of goods, equipment, labor, materials or services that would require the certifications or warranties required by sections 35‑391.06, 35‑393.06 and 41‑4401.
N. The board, the administrator, the assistant administrators and all persons employed by them are subject to title 41, chapter 4, article 4. The administrator, assistant administrators and other employees of the board are entitled to receive compensation pursuant to section 38‑611.
O. In consultation with the director of the department of administration, the board may enter into employment agreements and establish the terms of those agreements with persons holding any of the following system positions:
1. Administrator.
2. Deputy or assistant administrator.
3. Chief investment officer.
4. Deputy chief investment officer.
5. Fiduciary or investment counsel.
P. N. The attorney general or an attorney approved by the attorney general and paid by the fund shall be the attorney for the board and shall represent the board in any legal proceeding or forum that the board deems appropriate. The board, administrator, assistant administrators and employees of the board are not personally liable for any acts done in their official capacity in good faith reliance on the written opinions of the board's attorney.
Q. O. At least once in each five‑year period after the effective date, the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the system and other plans that the board administers and shall make a special valuation of the assets and liabilities of the monies of the system and plans. Taking into account the results of the investigation and special valuation, the board shall adopt for the system and other plans that the board administers those mortality, service and other tables deemed necessary.
R. P. On the basis of the tables the board adopts, the actuary shall make a valuation of the assets and liabilities of the funds of the system and other plans that the board administers not less frequently than every year. By November 1 of each year the board shall provide a preliminary report and by December 15 of each year provide a final report to the governor, the speaker of the house of representatives and the president of the senate on the contribution rate for the ensuing fiscal year.
S. Q. Neither the board nor any member or employee of the board shall directly or indirectly, for himself or as an agent, in any manner use the monies or deposits of the fund except to make current and necessary payments, nor shall the board or any member or employee become an endorser or surety or in any manner an obligor for monies loaned by or borrowed from the fund or the assets of any other plans that the board administers.
T. R. The members of the board who are appointed pursuant to subsection A, paragraphs 2 and 5 of this section shall have at least ten years' substantial experience as any one or a combination of the following:
1. A portfolio manager acting in a fiduciary capacity.
2. A securities analyst.
3. An employee or principal of a trust institution, investment organization or endowment fund acting either in a management or an investment related capacity.
4. A chartered financial analyst in good standing as determined by the association for investment management and research.
5. A professor at the university level teaching economics or investment related subjects.
6. An economist.
7. Any other professional engaged in the field of public or private finances.
U. S. Financial or commercial information that is provided to the board, employees of the board and attorneys of the board in connection with investments in which the board has invested or investments the board has considered for investment is confidential, proprietary and not a public record if the information is information that would customarily not be released to the public by the person or entity from whom the information was obtained.
Sec. 33. Section 40-108, Arizona Revised Statutes, is amended to read:
40-108. Compensation of appointees and employees
A. The compensation of corporation commission appointees and employees except as provided in section 40‑408 shall be determined pursuant to section 38‑611 and shall be paid from the state general fund and the appropriation made to the commission in the general appropriations act.
B. Notwithstanding subsection A of this section, if the commission is unable to employ utilities division professional staff under section 38‑611, the commission may request an exemption from section 38‑611 from the joint legislative budget committee for each such employee. Employee compensation of the utilities division and a part of the administration, hearing and legal divisions shall be determined pursuant to section 38‑611 and is payable from the utility regulation revolving fund established pursuant to section 40‑408.
Sec. 34. Section 41-511.02, Arizona Revised Statutes, is amended to read:
41-511.02. Director; qualifications; state historic preservation officer
A. The governor board shall appoint employ a full‑time director pursuant to section 38‑211 who shall:
1. Not be a member of the Arizona state parks board.
2. Serve at the pleasure of the governor board.
3. Be qualified by successful experience in administration in business or in government.
4. Have a knowledge of or training in the multiple use of lands and the conservation of natural resources.
B. The governor shall designate a full‑time employee of the board with professional competence and expertise in the field of historic preservation as the "state historic preservation officer" to administer the state historic preservation program. END_STATUTE
Sec. 35. Section 41-701, Arizona Revised Statutes, is amended to read:
41-701. Department of administration; director; appointment; committee
A. A department of administration is established.
B. The direction, operation and control of the department is the responsibility of the director.
C. The director shall be appointed by the governor, from a list of qualified candidates submitted by the committee as provided in subsection D of this section, with the advice and consent of the senate and shall serve at the pleasure of the governor.
D. The department's human resources division shall assist the governor in preparing a job description for the position of director and recruiting candidates for the position. The qualifications of the candidates shall be reviewed by a committee of seven persons selected by the governor. The names of all those candidates determined by the committee to be qualified for the position shall be submitted to the governor for the governor's consideration. The governor may request additional names from the committee if the governor deems necessary. For each subsequent vacancy in the position of director, a new committee shall be appointed by the governor.
Sec. 36. Repeal
Title 41, chapter 4, articles 4 and 5, Arizona Revised Statutes, are repealed.
Sec. 37. Title 41, chapter 4, Arizona Revised Statutes, is amended by adding new articles 4 and 5, to read:
ARTICLE 4. STATE PERSONNEL SYSTEM
41-741. Definitions
In this article and articles 5 and 6, unless the context otherwise requires:
1. "Employee" means a person holding a position in state service.
2. "State service" means all offices and positions of employment in state government except offices and positions exempted by this article.
41-742. Powers and duties of the director
A. The director is responsible for direction and control of personnel administration.
B. The director shall:
1. Appoint employees necessary to perform the duties prescribed by this article.
2. Have authority for developing and administering a program of personnel administration for the state service in conformance with the personnel rules.
3. Have authority to establish such offices as may be necessary to maintain an effective and economical program of personnel administration.
4. Have the power to deputize employees in various state agencies where certain of the functions of personnel administration can be performed by such deputies.
5. Make an annual report and recommendation to the legislature and the joint legislative budget committee as provided in section 41‑743.
6. Adopt rules relating to personnel and personnel administration.
7. Subject to legislative appropriation, have the authority to contract for the services of consultants necessary to perform the annual salary plan and salary plan adjustment recommendations.
8. Establish a mandatory program of annual personnel management training for all state employees with supervisory or managerial responsibility that is appropriate to the nature and scope of the employees' supervisorial responsibilities. The director may waive the annual mandatory training on a case by case basis. The training shall include at least the following subjects:
(a) Basic employee supervisory or managerial skills.
(b) Establishing employee objectives and performance measures.
(c) Measuring employee performance and the use of performance evaluation methods.
(d) Employee discipline training and discipline procedures.
(e) Other subjects as determined by the director.
41-743. Annual report and recommendations
A. The director shall prepare a report on state personnel and the operation of the state personnel system.
1. Information concerning all state employees, including employees of all executive, legislative and judicial branch agencies. All agencies shall provide any information requested by the director to prepare the annual report.
2. Information concerning the number of employees affected by and reasons for turnover within state service.
3. Information concerning the compensation during the preceding year and the coming year of state employees and the compensation of other public employees and private employees.
4. An advisory recommendation on the salary plan and adjustments to the plan for employees in state service. In establishing the salary plan the director shall consider the relative levels of duties and responsibilities of the various classes of positions, rates paid for comparable positions elsewhere and other relevant factors.
5. An advisory recommendation for all positions that have been exempted from covered service pursuant to section 41‑771. Salary recommendations shall not be required for elected officials. The director shall make advisory salary recommendations for specific positions in the governor's office, the legislature and the courts if requested by the respective administrative heads of these units of state government.
6. The overtime pay requirements of all state agencies except those agencies excluded by section 41‑771.
7. Other information as determined by the director.
C. The annual report and recommendations shall be presented to the governor and the legislature on or before September 1 of each year.
D. Notwithstanding section 41‑771, the Arizona board of regents, the department of public safety, the judicial department and the Arizona state schools for the deaf and the blind shall prepare and submit an annual report on their personnel as prescribed in this section. The report shall include:
1. Information concerning the number of employees affected by and reasons for turnover of their employees.
2. Information concerning the compensation during the preceding year and the coming year of their employees and the compensation of other public employees and private employees.
3. An advisory recommendation on the salary plan and adjustments for their employees. In establishing the salary plan, they shall consider the relative levels of duties and responsibilities of the various classes of positions, rates paid for comparable positions elsewhere and other relevant factors.
4. Their overtime pay requirements.
41-744. Special market adjustments; committee
A. The director shall establish a system of special market adjustments to modify salaries of state employees within certain identified job classifications.
B. The system shall provide for salary adjustments, subject to legislative appropriation, for state positions and for positions in job classifications that, in the opinion of the director, are critical to the orderly conduct of the agencies in which the positions are located and that meet specific comparative criteria. These criteria include whether the positions are experiencing substantially above average turnover or have salaries that are substantially below comparable positions outside state service.
C. The director shall establish procedures to determine the job classifications eligible for special market adjustments. The procedures shall include:
1. The systematic identification of job classifications based on specific comparative criteria including turnover and salary information.
2. The consideration of job classifications identified by agency directors.
3. In cases in which significant increases are recommended, recommended increases may be scheduled over two or more years. If multiple year increases are recommended, the cost of funding the proposed adjustments in each year shall be included.
D. A special market adjustment committee is established consisting of the following members:
1. The director of the governor's office of strategic planning and budgeting or the director's designee.
2. The administrative director of the courts or the administrative director's designee.
3. Two members who have at least ten years of experience in human resources administration and who are appointed by the director of the department of administration. One of these members shall be employed in the private sector.
4. One member who is a member of an employee organization that has at least one thousand members and who is appointed by the director of the department of administration.
5. Two members who are state agency directors, deputy directors or assistant directors and who are appointed by the director of the department of administration.
E. Members of the special market adjustment committee who are appointed by the director of the department of administration shall not serve more than two consecutive three year terms. The department shall provide staff for the special market adjustment committee.
F. The special market adjustment committee may assist the director in determining recommendations for the cost of funding the proposed adjustments.
41-745. Reduction in force procedures
A. The director shall establish reduction in force procedures to be used by all state agencies if reductions are required by reason of lack of monies or work, abolition of a position, a material change in duties or organization or the introduction of other cost reduction initiatives and for reemployment of employees separated by reduction in force.
B. The procedures shall give substantially equal consideration in both reduction in force and reemployment to the person's performance record and seniority in service. Consideration of the person's performance is limited to performance, as measured by up to the three most recent performance evaluations conducted using a performance measurement system approved by the director, during a period of not more than the two years immediately preceding the reduction in force. Consideration of the person's seniority is limited to tenure in the current job class series as defined in the personnel rules during the five years immediately preceding the reduction in force.
C. The procedures shall provide for a reduction in force to be limited to a single agency or organizational unit of an agency or agency operations within a geographic area.
D. The procedures shall provide for an expedited review of any determinations made during a reduction in force.
E. The procedures shall provide that if, by legislative action or otherwise, part or all of the functions of one department or agency are transferred to another department or agency, the affected employees shall be accepted as transfers by the receiving department or agency at the same pay grade unless the receiving department or agency has no need for the particular position or positions. If this is true the rules concerning reduction in force apply, and the employees shall not be transferred to the receiving department or agency with the transfer of the function and these employees have reduction in force rights in the department or agency from which the function has been abolished or transferred.
41-746. Required reduction in hours
An agency director may require agency covered employees to work reduced hours in order to comply with any reduction in appropriations. The director of the department of administration shall prescribe procedures to implement these reductions.
41-747. Contribution of pro rata share for personnel division fund
A. State service agencies within the covered service shall contribute a pro rata share of the overall cost of personnel administration services provided by the department. The pro rata share shall be payable by payroll fund source and the resultant amount shall be deposited, pursuant to sections 35‑146 and 35‑147, in a personnel division fund for appropriation by the legislature for the personnel board and the personnel division of the department. The pro rata share shall be 1.10 per cent of the total payroll of the agency. Of the 1.10 per cent pro rata share, 0.03 per cent of total payroll shall be deposited in a separate subaccount of the personnel division fund for use by the personnel board and shall be subject to legislative appropriation. Total payroll shall include all fund sources, including the state general fund, federal monies, special revenue funds, intergovernmental revenue monies, trust funds and other payroll fund sources.
B. A claim for the pro rata share percentage payment shall be submitted according to the fund source, with the accompanying payroll to the department for deposit in the personnel division fund.
C. Notwithstanding section 35‑190, only monies in excess of five hundred thousand dollars revert to the state general fund at the end of each fiscal year. The state comptroller shall pay any monies determined to be owed to the federal government from the personnel division fund before calculating the reversion.
41-748. Agreements for services and facilities
The department of administration may enter into agreements with any municipality or other political subdivision or any agency thereof to furnish personnel administration services and facilities of the department. Unless funds have been appropriated by the legislature for such purpose, any such agreement shall provide for reimbursement to the state of the actual cost of the services and facilities furnished, as determined by the department.
41-749. Coordination with department of economic security
The department of administration and the department of economic security may develop a comprehensive agreement whereby the personnel and facilities of the department of economic security are used to assist the department in the performance of its personnel administration duties, if the agreement will:
1. Result in more economical performance of the duties of the department.
2. Provide for reimbursement to the department of economic security wherever federal regulations so require.
41-750. Refusal of examination or certification
The director may refuse to examine or, after examination, may refuse to certify as an eligible or may withdraw from certification anyone who:
1. Has practiced any deception or fraud in his application, in his examination or in securing his eligibility.
2. Has failed to reply within a reasonable time to communications concerning his availability for employment.
3. Is found to be unsuited or not qualified for employment.
4. Lacks any of the requirements established by the director for the examination or position for which he applies.
5. Is physically or mentally so disabled as to be rendered unfit to perform the duties of the position to which he seeks appointment.
41-751. Causes for dismissal or discipline
A. Each of the following constitutes cause for discipline or dismissal of an employee in the state service:
1. Fraud in securing appointment.
8. Addiction to the use of narcotics or habit-forming drugs.
10. Final conviction of a felony or a misdemeanor involving moral turpitude.
11. Discourteous treatment of the public.
12. Improper political activity.
14. Misuse or unauthorized use of state property.
B. In addition to the causes prescribed by the terms of subsection A of this section, the director may establish such other causes deemed necessary.
C. The director shall prescribe definitions for each of the causes for dismissal or discipline prescribed or established under this section that shall be used by all employees and the personnel board in evaluating dismissals and disciplinary actions.
ARTICLE 5. PERSONNEL ADMINISTRATION
41-771. Exemptions
A. This article and article 6 of this chapter do not apply to:
2. State officers and members of boards and commissions who are appointed by the legislature or the governor, the employees of the governor's office, the employees of the Arizona legislative council and the employees of the supreme court and the court of appeals.
3. State officers and employees who are appointed or employed by the legislature or either house of the legislature.
4. The curator, curatorial aides and tour guides and any other person who is employed to work in the state capitol museum.
5. Officers or employees of state universities and personnel of the Arizona state schools for the deaf and the blind.
6. Patients or inmates who are employed in state institutions.
7. Officers and enlisted personnel of the national guard of Arizona.
8. The single administrative or executive director and one deputy director of each state department or agency.
9. Not more than two assistants who serve in the office of an elected state officer, if that elected state officer is the sole elected head of the department.
10. One administrative assistant who serves a board or commission elected to head a state agency, department or division, and one assistant for each elected member of such a board or commission.
11. Persons who report directly to the governor.
12. Employees of the department of emergency and military affairs who occupy Arizona national guard positions identified as mobilization assets.
13. Except as otherwise required by federal law and except for certified peace officers as defined in section 38‑842, correctional officers and juvenile correctional officers, state officers and employees who are appointed or employed after December 31, 2006 and who are at a pay grade of twenty-four or above.
14. Any other position exempted by law.
B. Except for section 41‑772, subsections D, E and F, this article and article 6 of this chapter do not apply to those positions determined by the director to meet any of the following criteria:
1. Top level positions in a department or agency that determine and publicly advocate substantive program policy. This includes those persons who are engaged in the direction of line operations if they report directly to the director or deputy director of the agency and in large multiprogram agencies those persons who report directly to the head of a primary component of the department or agency.
2. Those persons who are required to maintain a direct confidential working relationship with an exempt official.
3. Persons who provide legal counsel.
4. Positions that are part time.
5. Positions that are temporary and that are established for the purpose of conducting a special project, study or investigation.
6. Positions that are essentially for rehabilitation purposes.
7. Positions that are determined by the director to be directly or indirectly engaged in establishing policy or enforcement standards.
8. Directors of all institutions that maintain supervision or care on a twenty-four hour per day basis other than halfway houses or group homes.
41-772. Prohibitions; violation; classification; civil penalty; protection of civil or political liberties
A. An employee shall not:
1. Use any political endorsement in connection with any appointment to a position in the state service.
2. Use or promise to use any official authority or influence for the purpose of influencing the vote or political action of any person or for any consideration.
B. An employee or member of the personnel board shall not be a member of any national, state or local committee of a political party, an officer or chairman of a committee of a partisan political club, or a candidate for nomination or election to any paid public office, shall not hold any paid, elective public office or shall not take any part in the management or affairs of any political party or in the management of any partisan or nonpartisan campaign or recall effort, except that any employee may:
2. Attend meetings for the purpose of becoming informed concerning the candidates for public office and the political issues.
3. Cast his vote and sign nomination or recall petitions.
4. Make contributions to candidates, political parties or campaign committees contributing to candidates or advocating the election or defeat of candidates.
5. Circulate candidate nomination petitions or recall petitions.
6. Engage in activities to advocate the election or defeat of any candidate.
7. Solicit or encourage contributions to be made directly to candidates or campaign committees contributing to candidates or advocating the election or defeat of candidates.
C. Except for expressing his opinion or pursuant to section 16‑402, an employee shall not engage in any activity permitted by this section while on duty, while in uniform or at public expense.
D. A person shall not solicit any employee or a member of the personnel board to engage or not engage in activities permitted by this section with the direct or indirect use of any threat, intimidation or coercion including threats of discrimination, reprisal, force or any other adverse consequence including the loss of any benefit, reward, promotion, advancement or compensation.
E. A person shall not subject any employee or a member of the personnel board engaging in activity permitted by this section to any direct or indirect discrimination, reprisal, force, coercion or intimidation or any other adverse consequence including the loss of any benefit, reward, promotion, advancement or compensation.
F. A person shall not subject any employee or member of the personnel board who chooses not to engage in any activity permitted by this section to any direct or indirect discrimination, reprisal, force, coercion or intimidation or any other adverse consequence including the loss of any benefit, reward, promotion, advancement or compensation.
G. This section does not apply to school board elections or community college district governing board elections, and an employee may serve as a member of the governing board of a common or high school district or as a member of a community college district governing board.
H. An employee who violates any of the provisions of this section shall be subject to suspension of not less than thirty days or dismissal.
1. Subsection D, E or F of this section is guilty of a class 6 felony.
2. Any other provision of this section is guilty of a class 1 misdemeanor.
J. In addition to any other penalty, any person soliciting or encouraging a contribution in a manner prohibited by this section is subject to a civil penalty of up to three times the amount of the contribution solicited or encouraged plus costs, expenses and reasonable attorney fees.
K. This section shall not be construed as denying any employee or board member his civil or political liberties as guaranteed by the United States and Arizona Constitutions.
L. It is the public policy of this state, reflected in this section, that government programs be administered in an unbiased manner and without favoritism for or against any political party or group or any member in order to promote public confidence in government, governmental integrity and the efficient delivery of governmental services and to ensure that all employees are free from any express or implied requirement or any political or other pressure of any kind to engage or not engage in any activity permitted by this section. Toward this end, any person or entity charged with the interpretation of this section shall take into account the policy of this section and shall construe any of its provisions accordingly.
41-773. Unlawful acts; violation; classification
A. No person may make any false statement, certificate, mark, rating or report with regard to any test, certification or appointment made under any provision of this chapter or in any manner commit any fraud preventing the impartial execution of this chapter and the rules.
B. No person may, directly or indirectly, give, render, pay, offer, solicit or accept any money, service or other valuable consideration for or on account of any appointment, proposed appointment, promotion or proposed promotion to, or any advantage in, a position in the state service.
C. No employee of the department, examiner or other person shall obstruct any person in his right to examination, eligibility, certification or appointment under this chapter, or furnish to any person any special or secret information for the purpose of affecting the rights or prospects of any person with respect to employment in the state service.
D. No elected or appointed official may with corrupt intent use his political influence or position to cause the firing, promotion or demotion of any public employee or the hiring of or failure to hire any applicant for public employment.
E. An elected or appointed official who knowingly and with corrupt intent violates subsection D of this section is guilty of a class 2 misdemeanor.
F. A contact by an elected or appointed official with a public agency regarding the qualifications of an applicant shall not be construed as illegally using political influence or position.
41-774. Certification by division
A salary shall not be paid to any employee in the state service unless the director or the director's designee has certified that the employment is in accordance with this article.
41-775. Violation; classification
A. Except as provided in section 41‑772, any person who knowingly commits any act that is unlawful under this article or who violates any provision of this article is guilty of a class 2 misdemeanor unless another classification is specifically prescribed in this article.
B. Any person who is convicted of a class 2 misdemeanor under this article shall be ineligible for appointment to or employment in a position in the state service for a period of five years and, if the person is an employee of the state at the time of conviction, is subject to suspension for not less than ninety days or dismissal.
41-776. State employees; mentoring
A. The director shall provide in the personnel rules a procedure that allows state employees to voluntarily engage in activities that support mentoring, education and youth development of school age youths in this state.
1. Encourage state employees to volunteer as mentors to school age youths at public schools, private schools or home schools or through faith‑based organizations.
(a) Up to one hour of flex time per week, not to exceed five hours per calendar month.
(b) Provisions that the flex time must be made up within the same work week that it is taken and that flex time is unpaid, cannot be accrued and does not count toward overtime hours.
Sec. 38. Section 41-781, Arizona Revised Statutes, is amended to read:
41-781. State personnel board; members; appointment; term; meetings; compensation
A. The state personnel board consists of five members appointed by the governor pursuant to section 38‑211. No more than three members shall belong to the same political party. Persons eligible for appointment shall have had a continuous recorded registration pursuant to title 16, chapter 1 with either the same political party or as an independent for at least two years immediately preceding appointment. Of the members appointed one shall be a person who for more than five years has managed a component or unit of government or industry with more than twenty employees, one shall be a professional personnel administrator, one a state employee, one a person active in business management and one a member of the public. Members may be removed by the governor for cause. The chairperson of the state personnel board shall serve as an ex officio member of the law enforcement merit system council established by section 41‑1830.11 without voting privileges.
B. The term of office for each member is three years, each term to expire three years from the date of appointment. On the expiration of the term of a member a successor shall be appointed for a full term of three years.
C. The state personnel board may hold regular monthly meetings and, in addition, may hold special meetings the board deems necessary. A chairperson and vice chairperson shall be elected by the members at the first meeting of each year and the chairperson shall not serve successive terms as chairperson. Meetings of the state personnel board shall be open to the public, and executive sessions may be held as provided by law.
D. Any one of the following constitutes the resignation of a board member and authorizes the governor to appoint a new member to fill the unexpired term so vacated:
1. Becoming a candidate for any elective public office.
2. Accepting any appointive office or employment in the state personnel system, except the state employee who is designated to serve on the board.
E. Members of the state personnel board, except the person designated as the state employee, are eligible to receive compensation of one hundred dollars for each meeting attended, prorated for partial days for each meeting attended as determined pursuant to section 38‑611 for each day actually spent for meetings of the state personnel board. The member of the state personnel board designated as the state employee shall be paid the state employee's regular compensation for meetings of the board.
Sec. 39. Section 41-782, Arizona Revised Statutes, is amended to read:
41-782. Powers and duties of the state personnel board
A. Except as provided by section 41‑1830.16, The state personnel board shall hear and review appeals as provided in this article relating to dismissal of a covered employee from covered state service, suspension for more than eighty forty working hours or involuntary demotion resulting from disciplinary action as defined in the personnel rules for an employee in covered service.
B. The state personnel board shall hear and review complaints as provided in title 38, chapter 3, article 9, relating to any personnel action taken against an employee or former employee of this state, except an employee or former employee of a state university or the board of regents, which the employee or former employee believes was taken in reprisal for the employee's or former employee's disclosure of information to a public body. The state personnel board shall recommend the dismissal of a supervisor or other responsible person, other than an elected official, who it determines committed a prohibited personnel practice.
C. The state personnel board may adopt rules it deems necessary for the administration of hearings and the review of appeals and complaints as prescribed in this section.
D. The state personnel board shall only exercise authority that is specifically granted to the board pursuant to this article.
Sec. 40. Renumber
Section 41‑783, Arizona Revised Statutes, is renumbered as section 41‑785.
Sec. 41. Title 41, chapter 4, article 6, Arizona Revised Statutes, is amended by adding a new section 41-783, to read:
41-783. Personnel rules
The personnel rules shall provide for:
1. A position classification plan for all positions in the state service.
2. Competitive examinations to test the relative qualifications of applicants for positions in state service. All competitive examinations shall be given statewide. For the purposes of this paragraph, "statewide" means that a competitive examination shall be given in an office of the department of economic security in each city or town of the state in which the office is located, unless the director designates another location within such city or town.
3. Evaluation of performance of employees for the purpose of improving staff effectiveness.
4. Promotions or transfers between classes that give appropriate consideration to the applicant's qualifications, record of performance and conduct.
5. Establishment of eligibility lists for appointment and promotion. The names of successful candidates shall be placed on the lists in the order of their relative excellence in their respective examinations.
6. Rejection of candidates for appointment or promotion who fail to fulfill reasonable requirements.
7. Delivery of a list of qualified applicants to any state agency requiring it. The state agency may select and hire an employee from this list.
8. A minimum period of original probationary service following initial appointment. During a period of original probationary service, the probationary employee shall perform the actual duties of the position and may be discharged without cause. A period of promotional probation service shall be established by the director.
9. A reasonable period of provisional employment without competitive examination if there is no eligibility list available for the position.
10. Emergency appointments for not more than thirty days with or without examination as provided by the rules.
11. Temporary appointments to positions that occur, terminate and recur periodically regardless of the duration of the position.
12. Transfer from a position in one department to a similar position in another department involving similar qualifications, duties, responsibilities and salary ranges.
13. Reinstatement to an eligibility list of previous employees who have resigned in good standing or who were separated from their positions without fault on their part.
14. Reduction in force by reason of lack of funds or work, abolition of a position or material change in duties or organization, and for reemployment of employees separated by reduction in force as provided in section 41‑745.
15. The circumstances under which an employee may be suspended without pay.
16. Establishment of a plan for resolving employee grievances and complaints and in cases of alleged discrimination for referral to the appropriate agency if an employee is not otherwise satisfied with the final grievance resolution.
17. Attendance, including hours of employment, annual leave, sick leave and special leaves of absence, with or without pay or with reduced pay. Rules on hours of employment shall provide for the implementation of flexible hours of employment as an option for employees if the director of an employing agency decides, in the director's discretion, that existing services can be maintained. The rules shall provide:
(a) For the transfer of accumulated annual leave from one employee to another employee in the same agency and for transfer of accumulated annual leave from one employee to another employee in another agency if the employees are members of the same family. Such transfers may occur if the employee to whom the leave is transferred has a seriously incapacitating and extended illness or injury or a seriously incapacitating and extended disability that is caused by pregnancy or childbirth or a member of the employee's immediate family has a seriously incapacitating and extended illness or injury or a seriously incapacitating and extended disability that is caused by pregnancy or childbirth and the employee has exhausted all available leave balances. Transferred annual leave shall be increased or reduced proportionally by the difference in the salaries of the employees as determined by department rule. For the purposes of this subdivision, "family" means spouse, natural child, adopted child, foster child, stepchild, natural parent, stepparent, adoptive parent, grandparent, grandchild, brother, sister, sister-in-law, brother-in-law, son-in-law, daughter-in-law, mother-in-law, father-in-law, aunt, uncle, nephew or niece.
(b) That an employee who receives transferred annual leave as provided in subdivision (a) of this paragraph is limited to using six consecutive months of transferred leave per occurrence unless the employee has applied for long-term disability insurance as provided by rule.
(c) That if a permanent status employee is unable to work due to a non‑job related, seriously incapacitating and extended illness or injury, as certified by a physician of the employee subject to confirmation by a physician chosen by the agency, and the employee has exhausted all leave balances and any leave transferred pursuant to subdivision (a) of this paragraph, the employee shall be placed on leave without pay status for up to one hundred eighty days or until able to return to work, whichever is sooner.
18. Development of policies and procedures for the employment of qualified disabled job applicants.
19. Establishment of a clerical pool in any locality where the demand for temporary clerical help warrants.
20. Leaves of absence to allow employees in state service to accept appointment to nonelective positions in state employment that are exempt from the terms of this article and article 5 of this chapter.
21. The adoption of special rules applicable solely to special classes of employees whose duties, as determined by the director, justify the adoption of rules applicable only to a specific class of employees.
22. The establishment of standards of ethical conduct for employees.
23. Reasonable public notice to be given of the examinations for a position and the examination dates.
24. Authorization to publish and make available to all employees a handbook outlining pertinent rules.
25. A determination as to which positions in state employment shall qualify the employee to receive overtime pay. In making this determination the director shall consider all employees who are covered under the fair labor standards act of 1938 (52 Stat. 1060; 29 United States Code sections 201 through 219), as amended and interpreted, and shall exclude all employees who meet exemption requirements as defined in that act, as amended and interpreted. No overtime or compensatory time may be granted to the following positions and persons:
(b) All positions that are appointed pursuant to section 38‑211.
(c) All professional positions as defined by the director.
(d) Persons whose primary duty is to manage the state agency or state agency subdivisions and:
(i) Who use discretionary powers.
(ii) Who direct the work of at least two other employees.
(iii) Who have the authority to hire and fire.
26. Compensatory time off for employees, except those employees in positions prescribed in paragraph 25 of this section.
27. Approving overtime pay for positions eligible for compensatory time off pursuant to paragraph 26 of this section because their primary duty is management when either of the following criteria is met:
(a) The practice is determined by the director to be a prevailing condition in the Arizona labor market and when pay differentials between subordinates and supervisors are reduced by overtime pay received by the nonexempt subordinates to the extent that it is no longer an incentive to remain in the supervisory position.
(b) When temporary emergency conditions arise that make it more practical to pay overtime than to grant compensatory leave.
28. Establishment of a plan for the impartial review of complaints.
Sec. 42. Title 41, chapter 4, article 6, Arizona Revised Statutes, is amended by adding section 41‑784, to read:
41-784. Nonconformity with federal regulations granting federal funds
Any provision of this article or article 5 of this chapter that conflicts or is inconsistent with federal rules, regulations or standards governing the grant of federal funds to any agency or department of the state is not applicable to such agency or department. The director is authorized to vary the terms of the personnel rules as applicable to such agencies and departments to comply with the conditions for federal grants.
Sec. 43. Section 41-785, Arizona Revised Statutes, as renumbered by this act, is amended to read:
41-785. Appeals to the state personnel board; notice of charges; hearings
A. Except as provided by section 41‑1830.16, a covered Any employee who has completed the covered employee's original probationary period of service as provided by the personnel rules may appeal to the state personnel board the covered employee's seeking relief from dismissal from covered state service, suspension for more than eighty forty working hours or involuntary demotion resulting from disciplinary action. The appeal shall be filed not later than ten working days after the effective date of such action. The covered employee shall be furnished with specified charges in writing when the action is taken. Such appeal shall be in writing and must state specific facts relating directly to the charges on which the appeal is based and shall be heard by the state personnel board within thirty days after its receipt. The state personnel board shall provide the employing agency with a copy of the appeal not less than twenty days in advance of the hearing.
B. Hearings on such appeals shall be open to the public, except in cases where the covered employee requests a confidential hearing, and shall be informal with technical rules of evidence not applying to the proceedings except the rule of privilege recognized by law. Both the covered employee and the employing agency shall be notified of any hearing or meeting date not less than twenty days in advance of the hearing or not less than ten days in advance of a meeting and may select representatives of their choosing, present and cross‑examine witnesses and give evidence before the state personnel board. The state personnel board may appoint a hearing officer to conduct the hearing and take evidence on behalf of the board and exercise the rights prescribed by section 12‑2212. The state personnel board shall prepare an official record of the hearing, including all testimony recorded manually or by mechanical device, and exhibits. Either party may request that the record be transcribed. If a party requests that the record be transcribed, an entity, other than the state personnel board, selected by the requesting party shall transcribe the record at the cost of the requesting party. If the disciplinary hearing would involve evidence the state is prevented by law from disclosing, then a confidential hearing upon the state's request shall be granted.
C. The state personnel board:
1. Shall determine whether the state agency has proven by a preponderance of the evidence the material facts on which the discipline was based. On such a finding, the board shall affirm the decision of the state agency head, unless the disciplinary decision was arbitrary and capricious.
2. May recommend modification of a disciplinary action if the agency has not proven by a preponderance of the evidence the material facts on which the discipline was based or if a disciplinary decision is found to be arbitrary and capricious.
3. Shall reverse the decision of the state agency head if the board finds that cause did not exist for any discipline to be imposed and, in the case of dismissal or demotion, return the covered employee to the same position the employee held before the dismissal or demotion with or without back pay.
D. On a finding that the agency has not proven by a preponderance of the evidence the material facts on which the discipline was based, the board shall identify the material facts that the board found were not supported by a preponderance of the evidence and may recommend a proposed disciplinary action in light of the facts proven. On a finding that the disciplinary decision was arbitrary and capricious, the board shall include the board's reasons for the board's finding and may recommend a proposed disciplinary action in light of the facts proven.
C. The state personnel board may reverse an agency's action on appeal only if the board finds the action to be arbitrary, capricious or otherwise contrary to law.
D. The state personnel board may modify the disciplinary penalty chosen by an agency only if the board finds the penalty to be disproportionate to the proven offense in light of mitigating circumstances or made for reasons that are arbitrary, capricious or otherwise contrary to law.
E. Within forty‑five days after the conclusion of the hearing, the state personnel board shall enter its decision or recommendation and shall at the same time send a copy of the decision or recommendation by certified mail to the employing agency and to the covered employee at the employee's address as given at the hearing or to a representative designated by the covered employee to receive a copy of the decision or recommendation. The agency director or the director's designee shall accept, modify or reverse the board's decision or accept, modify or reject the board's recommendation within fourteen days of receipt of the findings or recommendation from the state personnel board. The decision of the agency director or director's designee is final and binding. The agency director shall send a copy of the agency's final determination to the covered employee pursuant to this section.
F. Any party may appeal the decision of the state personnel board or the final decision of the agency pursuant to title 12, chapter 7, article 6 to the superior court in the covered employee's county of residence on one or more of the following grounds that the order was:
1. Founded on or contained error of law that shall specifically include error of construction or application of any pertinent rules.
2. Unsupported by any evidence as disclosed by the entire record.
3. Materially affected by unlawful procedure.
4. Based on a violation of any constitutional provision.
5. Arbitrary or capricious.
G. An appeal shall be available to the court of appeals from the order of the superior court pursuant to title 12, chapter 7, article 6 as in other civil cases.
H. A covered An employee may represent himself or designate a representative, not necessarily an attorney, before any board hearing or any quasi-judicial hearing held pursuant to this section providing that no fee may be charged for any services rendered in connection with such hearing by any such designated representative who is not an attorney admitted to practice.
Sec. 44. Section 41-903, Arizona Revised Statutes, is amended to read:
41-903. Officers and employees; employment
Subject to chapter 4, article 4 of this title, the chief executive officer of each institution under the control of the governor shall appoint assistants, clerks, guards and employees required to operate the institution, the number to be determined by the governor, except as otherwise provided by law. The chief executive officer of the institution may discharge an employee for cause. An officer or employee may be removed by the governor for misconduct, incompetency or neglect of duty.
Sec. 45. Section 41-1711, Arizona Revised Statutes, is amended to read:
41-1711. Department of public safety; purpose; location; qualifications of director; responsibilities
A. There shall be a department of public safety which is responsible for creating and coordinating services for use by local law enforcement agencies in protecting the public safety. The principal office and headquarters of the department shall be in Phoenix.
B. The department shall formulate plans with a view to establishing modern services for prevention of crime, apprehension of violators, training of law enforcement personnel, and the promotion of public safety. The department shall in no way preempt the authority and jurisdiction of established agencies of political subdivisions of the state.
C. The director shall be selected on the basis of training and experience with a minimum of five years' experience in the administration of law enforcement.
D. The director shall be appointed by the governor pursuant to section 38‑211 to serve concurrently with the appointing governor for a term of five years and shall be subject to removal for cause, including but not limited to malfeasance, misfeasance and nonfeasance in office. The term shall expire on the third Monday in January of the appropriate year. The director shall receive annual compensation as determined pursuant to section 38‑611.
E. The director shall be directly responsible to the governor for the conduct and the administration of the department. If the director is unable to act, the deputy director shall direct the activities of the department during the period in which the director is unable to act. If the director and deputy director are unable to act, the governor shall direct the activities of the department during the period in which the director and deputy director are unable to act.
F. The director shall prescribe procedures for use of department personnel, facilities, equipment, supplies and other resources in assisting search or rescue operations.
G. The director shall be responsible for the establishment, operation and maintenance of the statewide emergency medical services communication system prescribed by section 41‑1835.
H. The director may purchase, lease, equip, staff and operate air ambulances, including ambulance helicopters, pursuant to section 41‑1834.
I. To limit the expenditures of monies derived from the state highway fund established pursuant to article IX, section 14, Constitution of Arizona, to traffic safety and traffic law enforcement purposes, the department of public safety shall:
1. Maintain a strict account of all costs incurred by each function of the department. Such costs shall be determined and allocated between traffic safety or traffic law enforcement functions and all other departmental functions and shall include such costs as wages or salaries, materials or supplies and equipment or facility use.
2. Immediately following the determination of all such costs certify to the office of strategic planning and budgeting the full amount of all such costs relating to the various functions within the department.
J. The office of strategic planning and budgeting shall annually submit a separate report to the legislature compiled from the department's functional costs certification indicating the complete breakdown between those costs which are related to traffic safety or traffic law enforcement functions and the various other functions within the department. The director of the department of administration shall include within the director's annual report to the legislature a recommendation for a separate appropriation to reimburse the state highway fund from the state general fund for any expenditures from the state highway fund during the prior fiscal year in excess of the total of all costs related to traffic safety or traffic law enforcement functions of the department.
K. The director shall establish a special hazardous materials emergency response organizational unit within the department to function as the initial response element of the hazardous materials emergency management program pursuant to section 26‑305.02.
L. The department is designated as this state's recipient of federal victims of crime act grants.
Sec. 46. Section 41-1830.11, Arizona Revised Statutes, is amended to read:
41-1830.11. Law enforcement merit system council; composition
A. The governor shall appoint a law enforcement merit system council pursuant to section 38‑211. The council consists of five three persons chosen on the basis of experience in and sympathy with merit principles of public employment. No more than three members shall belong to the same political party. Persons eligible for appointment shall have had a continuous recorded registration pursuant to title 16, chapter 1 with either the same political party or as an independent for at least two years immediately preceding appointment. Members appointed shall be persons who are committed to enforcing this article in an honest, independent and impartial fashion and to seeking to uphold public confidence in the integrity of public safety peace officers. The members of the council shall not have held elective public office within one year before appointment and shall not hold any other political office while serving on the council.
B. The governor shall fill a vacancy on the same basis as the original appointment.
C. Members of the council are eligible to receive compensation for their services in the amount of one hundred dollars for each meeting attended, prorated for partial days for each meeting attended but are eligible to receive reimbursement of expenses pursuant to title 38, chapter 4, article 2.
D. A member serves for a term of three six years. The governor may remove a member only for cause.
E. The chairman of the council serves as an ex officio member of the state personnel board without voting privileges.
Sec. 47. Section 41-1830.12, Arizona Revised Statutes, is amended to read:
41-1830.12. Law enforcement merit system council; duties; authority; rules; business manager; definition
A. The law enforcement merit system council shall:
1. Select a chairman and vice‑chairman.
2. Hold meetings that are necessary to perform its duties on the call of the chairman.
3. Adopt rules pursuant to recognized merit principles of public employment it deems necessary for establishing the following for department of public safety and Arizona peace officer standards and training board personnel:
(a) A classification and compensation plan for all covered positions and for establishing standards and qualifications for all classified positions from a list of necessary employees that is prepared by the director of the employing agency.
(b) A plan for fair and impartial selection, appointment, probation, promotion, retention and separation or removal from service by resignation, retirement, reduction in force or dismissal of all classified employees.
(c) A performance appraisal system for evaluating the work performance of employees of the agencies.
(d) Procedures for the conduct of hearings of employee grievances that are brought before the council relating to classification, compensation and the employee appraisal system.
(e) Procedures for the conduct of hearings on appeals from an order of the director of the employing agency in connection with suspension, demotion, reduction in pay, loss of accrued leave time or dismissal of a classified employee.
(f) For hours of employment, annual and sick leave and special leaves of absence, with or without pay or with reduced pay.
4. Pursuant to recognized merit principles, hear and review appeals from any order of the director of the employing agency in connection with suspension, demotion, reduction in pay, loss of accrued leave time or dismissal of a classified employee. The council's determination is subject to review by the director and final, except on appeal as provided in section 41‑1830.13.
B. The council may meet with the state personnel board to discuss matters of mutual concern.
C. The rules under subsection A, paragraph 3, subdivision (f) of this section shall provide for the transfer of accumulated annual leave from one employee to another employee in the same agency and for the transfer of accumulated annual leave from one employee to another employee of another agency, department, board or commission if the employees are members of the same family. The transfers may occur if the employee to whom the leave is transferred has a seriously incapacitating and extended illness or injury or a member of the employee's immediate family has a seriously incapacitating and extended illness or injury and the employee has exhausted all available leave balances. Transferred annual leave shall be increased or reduced proportionally by the difference in the salaries of the employees as determined by council rule. For the purposes of this subsection, "family" means spouse, natural child, adopted child, foster child, stepchild, natural parent, stepparent, adoptive parent, grandparent, grandchild, brother, sister, sister‑in‑law, brother‑in‑law, son‑in‑law, daughter‑in‑law, mother‑in‑law or father‑in‑law.
D. In hearing and reviewing an appeal from any order of the director of the employing agency, the council:
1. Shall determine whether the employing agency has proven by a preponderance of the evidence the material facts on which the discipline was based. On such a finding, the council shall affirm the decision of the director of the employing agency, unless the disciplinary decision was arbitrary and capricious.
2. May recommend modification of a disciplinary action if the director of the employing agency has not proven by a preponderance of the evidence the material facts on which the discipline was based or if a disciplinary decision is found to be arbitrary and capricious.
3. Shall reverse the decision of the director of the employing agency if the council finds that cause did not exist for any discipline to be imposed and, in the case of dismissal or demotion, return the employee to the same position the employee held before the dismissal or demotion with or without back pay.
E. On a finding that the director of the employing agency has not proven by a preponderance of the evidence the material facts on which the discipline was based, the council shall identify the material facts that the council found were not supported by a preponderance of the evidence and may recommend a proposed disciplinary action in light of the facts proven. On a finding that the disciplinary decision was arbitrary and capricious, the council shall include the council's reasons for the council's finding and may recommend a proposed disciplinary action in light of the facts proven.
F. Within forty‑five days after the conclusion of the hearing, the council shall enter its decision or recommendation and at the same time shall send a copy of the decision or recommendation by certified mail to the employing agency and to the employee at the employee's address as given at the hearing or to a representative designated by the employee to receive a copy of the decision or recommendation.
G. D. The council shall select and the director of the department of public safety shall appoint a business manager who is a certified peace officer and an employee of the department of public safety but who is not a member of the council. The business manager shall perform and discharge all of the powers and duties that are vested in the council, except that adoption of rules, creation and adjustment of classifications and grades, compensation and hearing appeals for dismissal, demotion, reduction in pay, suspensions or other punitive action remain the duty of the council. Any power or duty that the council may lawfully delegate to the business manager is conclusively presumed to have been delegated to the business manager unless it is shown that the council by an affirmative vote recorded in its minutes has specifically reserved the power or duty to itself. At the request of the council, the business manager may make inquiries regarding or investigate infractions of council rules within the department of public safety. The business manager shall report the result of the inquiry or investigation to the council for appropriate action. The business manager may delegate the business manager's powers and duties to the business manager's subordinates unless by council rule or express provision of law the business manager is specifically required to act personally.
H. E. For the purposes of this section and section 41‑1830.13, "director of the employing agency" means the director of the department of public safety with respect to employees of the department and the executive director of the Arizona peace officer standards and training board with respect to employees of the board.
Sec. 48. Section 41-1830.13, Arizona Revised Statutes, is amended to read:
41-1830.13. Appeal; reinstatement
A. Within fourteen days of receipt of the finding or recommendation by the council pursuant to section 41‑1830.12, the director of the employing agency shall accept, modify or reverse the council's decision or accept, modify or reject the council's recommendation. The director shall accept the council's recommendation unless the recommendation is arbitrary or without reasonable justification. If the director does not accept the council's recommendation, the director shall state the reason or reasons for rejecting the recommendation. The decision of the director of the employing agency is final and binding. The director of the employing agency shall send a copy of the agency's final determination to the employee pursuant to section 41‑1830.12.
B. A. Except as provided in section 41‑1092.08, subsection H, a classified employee who is suspended, is demoted, has pay reduced, loses accrued leave time or is dismissed pursuant to this article, after a fair hearing and review before the law enforcement merit system council and review confirmation of the suspension, demotion, reduction in pay, loss of accrued leave time or dismissal by the director of the employing agency department of public safety, may appeal the final determination of the council and the final determination of the director of the employing agency pursuant to title 12, chapter 7, article 6. on one or more of the following grounds that the order was:
1. Founded on or contained error of law that shall specifically include error of construction or application of any pertinent rules.
2. Unsupported by any evidence as disclosed by the entire record.
3. Materially affected by unlawful procedure.
4. Based on a violation of any constitutional provision.
5. Arbitrary or capricious.
C. B. In addition to the trial court's powers as prescribed in section 12‑911, if the court overrules the determination of the council or the director of the employing agency, the employee shall be reinstated in the employee's position and the employee shall receive full compensation for any salary withheld pending the determination by the council, the director of the employing agency and court.
Sec. 49. Title 41, chapter 12, article 10, Arizona Revised Statutes, is amended by adding section 41-1830.14, to read:
41-1830.14. Status of persons employed before merit system institution
All employees of the department on November 22, 1948 shall continue in their respective positions without examination, until removed from the positions under the provisions of the merit system established pursuant to this article.
Sec. 50. Section 41-1830.15, Arizona Revised Statutes, is amended to read:
41-1830.15. Causes for dismissal or discipline; definitions
A. The director of the department of public safety may dismiss or discipline any classified employee based on any of the following causes:
1. Fraud or misrepresentation in securing employment.
2. Incompetency.
3. Inefficiency.
4. Inexcusable neglect of duty or unauthorized absence.
5. Insubordination.
6. Dishonesty.
7. Physical or mental disability subject to the provisions of the Americans with disabilities act of 1990 (42 United States Code sections 12101 through 12213).
8. Unauthorized drinking on duty or drunkenness on duty.
9. Being impaired by alcohol or drugs, as provided in title 13, chapter 34, while on duty.
10. Commission of any crime classified as a felony.
11. Discourteous treatment of the public or other employees.
12. Commission of any crime involving moral turpitude.
13. Improper political activity as proscribed in section 41‑752 41‑772.
14. Misuse or unauthorized use of state property.
15. Addiction to the illegal use of a narcotic or dangerous drug.
16. Any other failure of good behavior or acts either during or outside of duty hours that are incompatible with or inimical to the interest of the department of public safety.
B. For the purposes of this section:
1. "Incompetency" means the lack of ability or judgment, legal qualifications or fitness to discharge required duties.
2. "Inefficiency" means the failure to produce as required for reasons other than incompetency.
Sec. 51. Repeal
Section 41-1830.16, Arizona Revised Statutes, is repealed.
Sec. 52. Section 41-1952, Arizona Revised Statutes, is amended to read:
41-1952. Department of economic security; director; appointment; selection committee; compensation
A. A department of economic security is established.
B. The direction, operation and control of the department are the responsibility of the director.
C. The director shall be appointed by the governor pursuant to section 38‑211 with the advice and consent of the senate and shall serve at the pleasure of the governor.
D. The department of administration shall assist the governor in preparing a job description for the position of director and recruiting candidates for the position. The qualifications of the candidates shall be reviewed by a committee of seven persons selected by the governor. The names of all those candidates determined by the committee to be qualified for the position shall be submitted to the governor for the governor's consideration. The governor may request additional names from the committee if the governor deems necessary. For each subsequent vacancy in the position of director, a new committee shall be appointed by the governor.
D. E. Compensation for the director shall be established pursuant to section 38‑611.
Sec. 53. Section 41-2061, Arizona Revised Statutes, is amended to read:
41-2061. Administration of chapter; director; appointment; compensation; search committee; advisory committee
A. The director shall administer the provisions of this chapter.
B. The director shall be appointed by the governor pursuant to section 38‑211 from the names submitted by the search committee under subsection C of this section and is eligible to receive compensation pursuant to section 38‑611.
C. A search committee is established for the purpose of soliciting and screening applicants and submitting up to three names to the governor for the position of director of the department when a vacancy in the office of director exists. The governor may reject the names submitted by the search committee and direct the search committee to submit additional names for consideration. The committee shall consist of nine members appointed by the governor from the following groups:
1. One member representing retail trade.
2. One member representing wholesale trade.
3. One member representing the liquid petroleum industry.
4. One member representing agriculture.
5. One member representing the weight and measure manufacturing industry.
6. Four members representing consumers.
D. The names for director shall be chosen based on practical experience, training and knowledge in weights and measures practices, procedures, laws and administrative functions. Members of the search committee shall select a chairman from the membership, and members of the search committee are not eligible to receive compensation or reimbursement of expenses.
C. E. The director may appoint an advisory committee consisting of five members to review, advise and make recommendations to the director in the administration of the provisions of this chapter and regarding proposed rules provided for in this chapter.
Sec. 54. Section 41-2831, Arizona Revised Statutes, is amended to read:
41-2831. State educational system for committed youth; report
A. The director shall establish a state educational system for committed youth for the common and high school education of committed youth.
B. The director shall identify three persons who are qualified to serve as superintendent of the state educational system for committed youth. The director and the superintendent of public instruction shall agree on one of the three persons whom the director shall employ as superintendent to manage the educational system. The superintendent of the educational system shall employ teachers and other personnel as needed in accordance with chapter 4, article 4 of this title, subject to the approval of the director. All persons who are employed to work in the educational system including the superintendent shall hold the appropriate certificate prescribed by the state board of education in section 15‑203, subsection A, paragraph 14.
C. The director shall cause to be implemented the course of study for youth who are enrolled in the state educational system for committed youth.
D. The director shall consider the inclusion of factors related to a pupil's academic progress and standards of behavior as part of the length of stay guidelines adopted as prescribed in section 41‑2816.
E. The state educational system for committed youth shall provide appropriate education to all committed youth as required by state and federal law. If not otherwise required by law, the educational system shall provide an appropriate education to all committed youth who have not received a high school diploma or a high school certificate of equivalency.
F. On entrance of a youth to the state educational system for committed youth, the educational system shall administer a basic skills examination to the youth to determine the educational needs of the youth. A similar examination shall be administered on the youth's exit from the educational system to assess the youth's progress while enrolled in the educational system.
G. The department is entitled to receive equalization assistance for the costs of the state educational system for committed youth as provided in title 15, chapter 11.1.
H. The superintendent shall:
1. Keep records and provide information as the department of education requires to determine the appropriate amount of equalization assistance.
2. Prepare an annual financial report containing information similar to that provided by school districts in the report prescribed in section 15‑904 in a format prescribed by the department of administration in consultation with the auditor general and submit the report to the governor, the speaker of the house of representatives, the president of the senate and the department of education by November 1. When submitting the report to the speaker and president, the superintendent shall send a copy of the report to the chairmen of the house and senate education committees and shall send a notice to all other legislators that the report is available on request.
3. Establish a system for communicating with each youth's school district of residence in order to facilitate the transfer of records, the determination of the most appropriate educational program and the transfer of educational credit.
I. The department of administration shall develop and maintain a special pay plan for teachers and other professional educational personnel within the state educational system for committed youth. The pay plan shall attempt to keep salaries at a comparable level to that of public school district personnel. Recommendations for this pay plan shall be included within the department of administration's annual recommendation to the legislature pursuant to section 41‑743.
J. Notwithstanding any law to the contrary, the director shall designate an educational program for youth on conditional liberty and, if it is in the best interests of the youth and the community, may assign a youth to a specific public or private educational program.
Sec. 55. Section 41-3505, Arizona Revised Statutes, is amended to read:
41-3505. Information technology fund
A. The information technology fund is established for use by the department and the committee. Monies in the fund are subject to legislative appropriation.
B. State agencies subject to section 41‑750 41‑747, all budget units and the legislative and judicial branches of state government shall contribute a pro rata share of the overall cost of information technology services provided by the department or committee. The pro rata share is payable by payroll fund source, and the resultant amount shall be deposited in the information technology fund. For all budget units and the legislative and judicial branches of state government, the pro rata share shall be .20 per cent of the total payroll. Total payroll includes all fund sources including the state general fund, federal monies, special revenue funds, intergovernmental revenue monies, trust funds and other payroll fund sources.
C. A claim for the pro rata share percentage payment shall be submitted according to the fund source, with the accompanying payroll, to the department of administration for deposit in the information technology fund.
D. Notwithstanding section 35‑190, monies in the information technology fund do not revert to the state general fund at the end of each fiscal year.
Sec. 56. Section 41-3952, Arizona Revised Statutes, is amended to read:
41-3952. Arizona department of housing; director
A. The Arizona department of housing is established.
B. The governor shall appoint the director pursuant to section 38‑211. The term of the director serves at the pleasure of the governor is five years and expires on the third Monday in January of the appropriate year, except that the governor may remove the director for cause. On expiration of the director's term, the governor may reappoint the director for another term.
C. The director shall administer the department.
D. The director and such other employees as the director determines are entitled to receive compensation as determined under section 38‑611.
E. Subject to chapter 4, article 4 of this title, the director shall appoint a deputy director and, subject to legislative appropriation, may appoint assistant directors as the director deems appropriate.
F. Subject to chapter 4, article 4 of this title, the director shall employ, determine the conditions of employment and specify the duties of administrative, secretarial and clerical employees the director deems necessary.
G. The director may organize the department into divisions the director deems appropriate.
Sec. 57. Section 42-1002, Arizona Revised Statutes, is amended to read:
42-1002. Department of revenue; director; appointments; search committee; compensation
A. There is established a department of revenue.
B. The direction, operation and control of the department are the responsibility of the director.
C. The director shall be appointed by the governor from a list of names submitted by the search committee pursuant to section 38‑211 and shall serve at the pleasure of the governor.
D. The department of administration shall assist the governor in preparing a job description for the position of director and recruiting candidates for the position. The qualifications of the candidates shall be reviewed by a committee of five persons selected by the governor. The names of all those candidates determined by the committee to be qualified for the position shall be submitted to the governor for the governor's consideration. The governor may request additional names from the committee if the governor deems necessary. For each subsequent vacancy in the position of director, a new committee shall be appointed by the governor pursuant to this section.
D. E. Compensation for the director and the personnel required by the department shall be established pursuant to section 38‑611 and title 41, chapter 4, article 4.
Sec. 58. Terms of law enforcement merit system council members
A. Notwithstanding section 41-1830.11, Arizona Revised Statutes, as amended by this act, members of the law enforcement merit system council who are serving on the effective date of this act may continue to serve the remainder of their terms.
B. On the expiration of the term in January, 2014 of two members of the law enforcement merit system council, the governor shall appoint one member pursuant to section 38-211, Arizona Revised Statutes, for a term beginning January 17, 2014 and ending January 20, 2020.
C. On the expiration of the term in January, 2015 of two members of the law enforcement merit system council, the governor shall appoint one member pursuant to section 38-211, Arizona Revised Statutes, for a term beginning January 19, 2015 and ending January 18, 2021. Thereafter, the governor shall appoint one member pursuant to section 38-211, Arizona Revised Statutes, for a term beginning on the third Monday of January of the year of the expiration of the term and ending on the third Monday of January six years later.
Sec. 59. Retention payments; appropriation; fiscal year 2013‑2014
A. From and after September 28, 2013, the sums of $________ from the state general fund and $_________ from other appropriated funds are appropriated in fiscal year 2013-2014 to state agency units for personal services and employee-related expenditures related to the one‑time critical retention payments authorized in subsection B of this section. The joint legislative budget committee staff shall determine and the department of administration shall allocate to each agency or department an amount available for the payments. The joint legislative budget committee staff shall also determine and the department of administration shall allocate adjustments, as necessary, in expenditure authority to allow implementation of the payments.
B. Subject to available monies, the director of each state agency unit shall award a one‑time critical retention payment to an employee who is not uncovered as of September 29, 2013. The payment shall be equal to five per cent of the employee's annual salary level, prorated for the remainder of the fiscal year. The amount shall be distributed evenly throughout each remaining pay period in fiscal year 2013–2014.
C. On or before October 15, 2013, the department of administration shall report to the joint legislative budget committee, for each budget unit, the following information:
1. The number of employees awarded a retention payment by fund source.
2. The total amount of retention payments awarded by fund source.
D. Any monies appropriated to state agency units pursuant to this section that are not awarded as retention payments shall revert to the fund of origin at the close of fiscal year 2013‑2014.