SCF of Arizona Files Suit to Protect Assets

June 24, 2003

State Compensation Fund of Arizona (SCF) recently filed a lawsuit in Maricopa County Superior Court challenging a provision in the state’s 2003 fiscal budget that forces SCF to purchase Arizona government-owned buildings to help balance the state’s budget.

The action has been taken to protect and to defend the assets that are held in trust for employers throughout the state who insure their workers through SCF.

SCF considers having to file the lawsuit very disappointing but believes the requirement in the 2003 state budget (HB 2002), passed during a special session is invalid.

Although the Senate passed HB 2195 unanimously, SCF took the action after the bill was not allowed to go to the floor of the House in the final week of the legislative session. According to SCF, it believed lawmakers would approve HB 2195, which would have provided a clear statement that SCF’s assets are not subject to appropriation.

In exchange for that recognition, SCF would have been willing to voluntarily participate in the purchase of the state assets, if necessary, to ease the state’s budget crisis. This plan had received unanimous acceptance in the Senate, by more than 2/3 of the House and from the governor’s office.

The lawsuit was filed on behalf of SCF of Arizona, the Arizona Farm Bureau, the Greater Phoenix Chamber of Commerce, the Tucson Metropolitan Chamber of Commerce, the National Federation of Independent Business and an individual workers’ compensation claimant.

Defendants named in the lawsuit in their official capacities are: Arizona State Treasurer David Petersen, Director of the Arizona Department of Administration Betsy Bayless; Arizona Attorney General Terry Goddard; and Arizona Governor Janet Napolitano.

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