ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

Senate: APPROP DP 8-2-0-0 | 3rd Read 17-13-0-0

House: RULES DP/C&P 8-0-0-0

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

SB 1738: 2025-2026; commerce

Sponsor: Senator Kavanagh (with permission of committee on Rules), LD 3

House Engrossed

Overview

Contains provisions relating to commerce needed to implement the FY 2026 budget.

History

The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general appropriations. Article IV, Section 20, Part 2 of the 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 prepared according to subject area.

Provisions

1.   Extends, as session law, the Microbusiness Loan Fund and Program, retroactive to June 30, 2025, until June 30, 2027. (Sec. 2, 3)

2.   Repeals the Microbusiness Loan Fund and Program on July 1, 2027, and transfers all unexpended and unencumbered monies in the Microbusiness Loan Fund to the state General Fund. (Sec. 2)

3.   Extends the Office of Economic Opportunity's reporting requirements regarding the Microbusiness Loan Program by two years. (Sec. 2)

4.   Establishes the Office of Defense Innovation (Office) within the Arizona Commerce Authority. (Sec. 1)

5.   Outlines permissible acts of the Office, including:

a)   act as a liaison between Arizona, the U.S. Department of Defense and national security organizations, including federal and state agencies and law enforcement and industries that support the purposes of defense innovation in Arizona;

b)   identify and pursue, as appropriate, opportunities to increase the amount of federal funding to foster the development of products, services and technologies that support the U.S. Department of Defense in Arizona;

c) develop and implement a reoccurring strategic plan to enhance Arizona's competitiveness in defense-related industries;

d)   identify and support emerging technology, including commercialization support services to accelerate technology development; and

e)   collaborate to enhance workforce development that prepares innovators and intrapreneurs to support industries of the future. (Sec. 1)

6.   Requires the Office, by December 31, 2026, and each year thereafter, to submit a report regarding its activities and recommendations to the Governor and the Legislature. (Sec. 1)

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10.                    SB 1738

11.  Initials PB           Page 0 House Engrossed

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