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PHOENIX - The state won't immediately implement a budget provision to spend $50 million from Arizona's share of a foreclosure settlement while the provision is being challenged in court.

The provision requires the money be transferred to the state general fund to help balance the budget for the fiscal year that begins July 1.

However, Maricopa County Superior Court Judge Mark Brain scheduled an Aug. 22 hearing for arguments in the case after lawyers for state officials promised that the money won't be transferred before Dec. 31.

The $50 million is part of a $98 million settlement paid to the state by mortgage lenders.

The suit filed by public interest law firms contends the transfer violates terms of the settlement. Other allegations relate to constitutional provisions on legislation and branches of government.

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