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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: APPROP DP 9-1-0-0 | 3rd Read: 17-13-0-0House: Rules DP/C&P 8-0-0-0 | 3rd Read: 40-16-4-0Final Read: 21-8-1-0 | Chapter: 235 |
SB1737: capital outlay; 2025-2026; appropriations
Sponsor: Senator Kavanagh (with permission of committee on Rules), LD 3
Signed by the Governor
Overview
Makes capital appropriations and reductions to state agencies in FY 2026.
History
The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general appropriations. Article IV, Section 20, Part 2, Constitution of Arizona, requires the General Appropriations Act (feed bill) to contain only appropriations for the different state departments, state institutions, public schools and interest on public debt. Statutory changes necessary to reconcile the appropriations made in the feed bill and other changes are drafted into separate budget bills. These bills are prepared according to subject area.
Provisions
Highway Construction Appropriation Reduction and Removals (Sec. 1, 2, 5)
1. Reduces the FY 2023 appropriation from the GF to the Arizona Department of Transportation (ADOT), from $18,981,000 to $16,481,000, for the rehabilitation pavement along United States Route 191 between Armory Road and East Safford.
2. Removes the $1,529,800 appropriation from the GF in FY 2024 to ADOT, to distribute to the town of Payson for roundabout construction and improvements at the intersection of Longhorn Road and McLane Road.
3. Deletes the $9,240,000 appropriation from the GF in FY 2028 to ADOT to distribute to Pinal County for the engineering and design of the West Pinal Parkway East-West Corridor.
Riggs Road Overpass (Sec. 3)
4. Appropriates $41,400,000 from the GF in FY 2026 to ADOT for right-of-way acquisition, utility relocation, natural resource recovery and construction of an overpass at Riggs Road and State Route 347.
I-10 Widening (Sec. 4)
5. Appropriates $27,000,000 from the GF in FY 2026 to ADOT to design and construct additional vehicle lanes on Interstate 10 between State Route 85 and Citrus Road.
6. Decreases the appropriation, from $78,000,000 to $76,000,000, from the GF in FY 2028 to ADOT to design and construct additional vehicle lanes on Interstate 10 between State Route 85 and Citrus Road.
Arizona State Parks Appropriation Reductions (Sec. 6)
7. Reduces the following amounts appropriated from the State Parks Revenue Fund in FY 2023 to the Arizona State Parks Board (ASPB):
a) $210,000 for the Dead Horse Ranch State Park amphitheater;
b) $2,000,000 for Southern construction services relocation;
c) $1,339,000 for statewide water conservation – FY 2023;
d) $4,100,000 for statewide campground improvements;
e) $2,233,333 for statewide sunshade structures;
f) $1,339,000 for statewide water conservation – FY 2025;
g) $5,945,000 for Yuma territorial prison renovation;
h) $4,000,000 for Red Rock renovation;
i) $1,500,000 for San Rafael renovation; and
j) $535,600 for smartphone application.
8. Stipulates that the reductions revert to the State Parks Revenue Fund.
Building Renewal (Sec. 7)
9. Appropriates the following amounts to the specified agencies in FY 2026 for the maintenance and repair of state buildings:
Arizona Department of Administration (ADOA)
a) $1,600,000 from the GF;
b) $16,800,000 from the Capital Outlay Stabilization Fund (COSF);
c) $3,120,500 from the Legislative, Executive and Judicial Public Buildings Land Fund;
d) $393,000 from the Telecommunication Fund for the Deaf;
i. mandates that the appropriation from the Telecommunication Fund for the Deaf must be used solely for the building renewal at the Arizona State Schools for the Deaf and the Blind;
ii. requires ADOA to allocate these monies to state agencies for necessary building renewal;
iii. reduces the appropriation from COSF to the amount available in that fund if the monies in COSF are insufficient to fund the full appropriation; and
iv. allows the monies to be used for retrofitting facilities for space consolidation;
Arizona Department of Corrections (DOC)
e) $5,864,300 from the DOC Building Renewal Fund;
i. restricts DOC from spending these monies on personal services or overhead expenses related to managing the funded projects;
Arizona Game and Fish Department (AZGF)
f) $1,815,700 from the Game and Fish Fund;
Arizona State Lottery Commission (ASLC)
g) $218,200 from the State Lottery Fund;
ADOT
h) $22,990,400 from the State Highway Fund (SHF); and
i) $394,900 from the State Aviation Fund (SAF).
Individual Capital Projects (Sec. 8)
10. Appropriates the following amounts to be used by each agency or board for the individual capital projects in FY 2026:
DOC
a) $8,500,000 from the GF to replace fire, life alarm and suppression system at the Yuma State Prison;
Arizona Exposition and State Fair Board
b) $3,815,100 from the Arizona Exposition and State Fair Fund for capital improvements;
AZGF
c) $850,000 from the Capital Improvement Fund and $11,550,000 from the Game and Fish Fund:
i. $150,000 for dam maintenance;
ii. $400,000 for hatchery maintenance;
iii. $300,000 for property maintenance;
iv. $6,850,000 for dam repairs at Black Canyon Lake and Fool Hollow Lake; and
v. $4,700,000 for hatchery repairs;
Arizona Department of Health Services (ADHS)
d) $938,000 from the Arizona State Hospital Land Fund:
i. $160,000 for state hospital isolation valve installation;
ii. $695,000 for state hospital anti-ligature renovations; and
iii. $83,000 for state hospital perimeter detection system replacement;
Arizona Department of Juvenile Corrections
e) $1,361,900 from the Criminal Justice Enhancement Fund and $118,700 from the Department of Juvenile Corrections Local Cost Sharing Fund:
i. $536,600 for fire line booster pumps replacement;
ii. $303,000 for school door and lock replacements at Adobe Mountain school; and
iii. $641,000 for school kitchen air unit replacements at Abode Mountain school.
ASPB
f) $3,633,300 from the State Parks Revenue Fund for capital improvements;
g) $500,000 from the GF for the Verde River State Park construction.
Arizona Pioneers' Home
h) $1,985,400 from the Miners' Hospital for Miners with Disabilities Land Fund:
i. $470,400 for capital improvements; and
ii. $1,515,000 for facility window and door replacements;
Arizona Department of Public Safety (DPS)
i) $13,227,100 from the GF:
i. $2,000,000 for replacing office buildings in Payson and Sanders; and
ii. $11,227,100 for upgrading the electrical system at DPS headquarters in Phoenix;
ADOT
j) $13,812,000 from the SHF and $850,300 from the SAF:
i. $6,951,000 for improvements to vehicle repair shop in Avondale;
ii. $6,861,000 for constructing new maintenance offices in Little Antelope and Gray Mountain; and
iii. $850,300 for renovating the Grand Canyon airport terminal, which would revert to the SAF on June 30, 2026, if ADOT does not receive a federal aviation administration grant for the project;
Arizona Department of Veterans' Services (ADVS)
k) $2,400,000 from the GF to replace HVAC at the Tucson veterans' home, which would revert to the GF on June 30, 2026, if ADVS is not awarded a federal grant for the project;
i. allows ADVS to apply for federal grant monies for the HVAC replacement project prior to review by the Joint Committee on Capital Review (JCCR).
ADOT Statewide Highway Construction (Sec. 9, 11)
11. Appropriates the following amounts from the GF in FY 2026 to ADOT for specified highway projects:
a) $10,839,000 to improve the intersection on State Route 347 at Casa Blanca Road and Cement Plant Access Road;
b) $1,500,000 to design to widen lanes along State Route 347 between Interstate 10 and the city of Maricopa;
c) $2,129,800 to design an additional right-hand turn lane on northbound State Route 87 and State Route 260 near Payson;
d) $1,900,000 to distribute to the city of Flagstaff to design and construct a traffic light signal at the intersection of Woody Mountain Road and US Route 66;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Flagstaff to design and construct a traffic light signal at the intersection of Woody Mountain Road and US Route 66;
ii. states that the appropriation must be distributed to the city of Flagstaff by November 1, 2025, if the city agrees to the intergovernmental agreement;
e) $1,400,000 to construct safety improvements along State Route 70 from mile post 255 to mile post 301 near San Carlos Apache Reservation;
f) $50,000 to restripe lanes along the interchange ramp from eastbound State Route 24 to State Route 202;
g) $1,500,000 to distribute to the city of Bullhead City for Hancock Road improvements;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Bullhead City for Hancock Road improvements;
ii. states that the appropriation must be distributed to the city of Bullhead City by November 1, 2025, if the city agrees to the intergovernmental agreement;
h) $1,000,000 to distribute to Mohave County for Mountain View Road improvements;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to Mohave County for Mountain View Road improvements;
ii. states that the appropriation must be distributed to Mohave County by November 1, 2025, if the city agrees to the intergovernmental agreement;
i) $3,500,000 to distribute to the Prescott regional airport for infrastructure supporting firefighting aircraft;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the Prescott regional airport for infrastructure supporting firefighting aircraft;
ii. states that the appropriation must be distributed to the Prescott regional airport by November 1, 2025, if the airport agrees to the intergovernmental agreement;
j) $500,000 to distribute to the Prescott regional airport or maintenance and operations;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the Prescott regional airport for infrastructure supporting maintenance and operations;
ii. states that the appropriation must be distributed to the Prescott regional airport by November 1, 2025, if the airport agrees to the intergovernmental agreement;
k) $1,300,000 to distribute to Yuma County for bridge replacement project on Somerton Avenue between West County 10th Street and West County 11th Street;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to Yuma County for the project;
ii. states that the appropriation must be distributed to Yuma County by November 1, 2025, if the county agrees to the intergovernmental agreement;
l) $1,500,000 to install traffic control systems along State Route 389 near Colorado City;
m) $1,500,000 to distribute to the city of Kingman for Eastern Street infrastructure improvements;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Kingman for the improvements project;
ii. states that the appropriation must be distributed to the city of Kingman by November 1, 2025, if the city agrees to the intergovernmental agreement;
n) $1,500,000 to distribute to the city of Nogales for improvements to Frank Reed Road;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Nogales for the improvements;
ii. states that the appropriation must be distributed to the city of Nogales by November 1, 2025, if the city agrees to the intergovernmental agreement;
o) $2,900,000 to distribute to the city of Nogales for improvements to Industrial Park Road;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Nogales for the improvements;
ii. states that the appropriation must be distributed to the city of Nogales by November 1, 2025, if the city agrees to the intergovernmental agreement;
p) $1,800,000 to distribute to the city of Nogales for improvements to La Quinta Road;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Nogales for the improvements;
ii. states that the appropriation must be distributed to the city of Nogales by November 1, 2025, if the city agrees to the intergovernmental agreement;
q) $1,000,000 to distribute to the city of Cottonwood for Main Street preservation and sidewalk improvements;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Cottonwood for the preservation and improvements;
ii. states that the appropriation must be distributed to the city of Cottonwood by November 1, 2025, if the city agrees to the intergovernmental agreement;
r) $6,000,000 to distribute to the city of Show Low for the Woolford Road extension project;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Show Low for the project;
ii. states that the appropriation must be distributed to the city of Show Low by November 1, 2025, if the city agrees to the intergovernmental agreement;
s) $3,000,000 to distribute to the city of Glendale for the 75th Avenue reconstruction project;
i. requires ADOT to submit an intergovernmental agreement, by September 15, 2025, to the city of Glendale for the project;
ii. states that the appropriation must be distributed to the city of Glendale by November 1, 2025, if the city agrees to the intergovernmental agreement;
t) $3,500,000 to design traffic interchange and connecting arterial roadways at State Route 303 and 155th Avenue:
i. states that the legislature intends that a local government or council of government entity contribute $900,000 in matching monies to the project;
ii. restricts ADOT from expending any monies appropriated to the project until ADOT can confirm the matching commitment to the project; and
u) $850,000 to design the repaving of Olga Frontage Road between mile post 366 and mile post 379.
12. Appropriates $458,770,000 from the SHF in FY 2026 to plan and construct state highways, including national system of interstate highways within this state, the state primary or secondary system, the county primary or secondary system and urban rural routes, to acquire rights-of-way and to provide for the cost of contracted field administration and field engineering on construction projects and debt service payments on bonds issued for highway construction.
13. Specifies that any balances and collections in the SHF that exceed the specific amounts appropriated in the General Appropriations Act and in the Capital Outlay Act for FY 2026 are appropriated to ADOT for the purposes of statewide highway construction.
14. Directs ADOT, by November 1, 2025, to report to the directors of the Joint Legislative Budget Committee (JLBC) and the Governor' Office of Strategic Planning and Budgeting on its actual prior year, estimated current year and upcoming budget year highway construction expenses from all fund sources, as prescribed.
15. Requires ADOT, by November 1, 2025, to report as outlined capital outlay information for FYs 2025, 2026 and 2027, to the JLBC directors and the Governor's Office of Strategic Planning and Budgeting.
16. Tasks ADOT with reporting, by November 1, 2025, ADOT's estimated outstanding debt principal balance at the end of FY 2027 and the estimated debt service payment amount for each FYs 2027, 2028, 2029 and 2030, to the JLBC directors and the Governor's Office of Strategic Planning and Budgeting, as prescribed.
17. Exempts the $458,770,000 appropriation from being subjected to a JCCR review.
ADOT Airport Planning and Development (Sec. 12)
18. Appropriates $44,340,700 from the SAF in FY 2026 to ADOT to plan, construct, develop and improve state, county, city or town airports as determined by the State Transportation Board.
19. Stipulates that any balances and collections in the SAF that exceed the specific amounts appropriated in the General Appropriations Act and the Capital Outlay Act for FY 2026 are appropriated to ADOT in FY 2026 for the purposes of airport planning and development.
20. Requires ADOT, by December 31, 2025, to report to JLBC staff on the status of all aviation grant awards and distributions, delineating projects by individual airport and fiscal year, including any future year commitments.
21. Exempts the $44,340,700 appropriation from being subjected to a JCCR review.
JCCR Project Reviews (Sec. 13)
22. Designates the following projects as having been favorably reviewed by JCCR:
a) $1,200,000 for the following Arizona Exposition and State Fair Board capital projects:
i. replacing asphalt in the Arizona Veterans Memorial Coliseum's north parking lot;
ii. replacing the Arizona Veterans Memorial Coliseum's sundeck walking surface;
b) $2,458,000 for the following AZGF capital projects:
i. replacing the sewer system at the Ben Avery shooting facility;
ii. constructing new bison-proof fencing in the House Rock Wildlife area near the north rim of the Grand Canyon in Coconino County;
iii. constructing a well to irrigate fields that grow feed for wildlife at Quigley-Achee Wildlife area near Roll in Yuma County;
iv. replacing water heaters with tankless systems at Horseshoe Ranch;
v. upgrading the electrical circuits at the Horseshoe Ranch; and
c) $1,409,700 to ADOT for a transfer from two projects, $500,000 from an interchange design at the State Route 303 and Interstate 17 project and $909,700 from construction of a screen wall along the Loop 101 near 16th Street project, to fund a project shortfall for construction of a roundabout at the intersection of State Route 69 and State Route 169 in Prescott Valley.
Miscellaneous
23. Allows the town of Patagonia, in addition to the use prescribed in Laws 2023 as amended by Laws 2024, to use monies distributed to the town by ADOT to reconstruct McKeown Avenue between Third Avenue West and State Route 82. (Sec. 10)
24. Exempts from lapsing, until June 30, 2027, the $1,800,000 appropriation to ADOT by Laws 2021 in FY 2022 to replace vehicle fueling facilities in Flagstaff, Holbrook and Kingman. (Sec. 14)
25. Permits ADOA to spend up to 5% of the amounts appropriated to ADOA in the Capital Outlay Act for FY 2026, excluding amounts to be distributed to nonstate agencies, for expenditures for project management of building renewal and capital projects. All other monies appropriated to ADOA in the Capital Outlay Act for FY 2026 may not be spent for personal services or employee-related expenditures or for maintenance contracts on building components and equipment without JCCR review. (Sec. 15)
26. Restricts the monies appropriated in the Capital Outlay Act for FY 2026 from being spent for personal services or employee-related expenditures of state employees, excluding any services provided as part of the inmate construction program for correctional facilities. (Sec. 15)
27. Makes conforming changes. (Sec. 2, 3)
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SB 1737
Initials LM Page 0 Signed by the Governor
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