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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
2025-2026; environment
Purpose
Makes statutory and session law changes relating to the environment necessary to implement the FY 2026 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.
S.B. 1740 contains the budget reconciliation provisions for changes relating to the environment.
Provisions
Arizona State Land Department (ASLD)
1. Requires the Arizona State Land Commissioner (Commissioner) to contract with a qualified third-party reviewer that is selected by the Commissioner to review any application submitted to the ASLD if the ASLD does not approve, conditionally approve or deny the application within 60 working days after the application is submitted to the ASLD.
2. Deems the application as approved if the ASLD does not approve, conditionally approve or deny the application or refer the application to a qualified third-party reviewer within 60 working days after the application is submitted to the ASLD.
3. Requires a third-party reviewer that reviews an application to:
a) review the application and take all other related actions in accordance with all requirements that are adopted by the ASLD; and
b) notify the ASLD and the applicant of the findings of the review.
4. Allows the ASLD to retain an amount of monies from the Trust Land Management Fund that is sufficient to pay the ASLD's costs for contracting with a qualified third-party reviewer.
Arizona Department of Agriculture (AZDA)
5. Allows the Director of the AZDA, with the assistance of the AZDA Advisory Council, to continue to increase or decrease the existing agricultural fees from FY 2024 and FY 2025 in FY 2026 for services provided in FY 2026.
6. Declares the Legislature's intent for FY 2026 that any additional revenue generated by the outlined agricultural fees does not exceed $218,000 to the state General Fund (state GF), $113,000 to the Pesticide Trust Fund and $26,000 to the Dangerous Plants, Pests and Diseases Trust Fund.
7. Exempts the AZDA from statutorily prescribed rulemaking requirements related to administrative procedure until July 1, 2026, for the purpose of establishing agricultural fees.
Arizona Department of Environmental Quality (ADEQ)
8. Requires the Director of ADEQ, in FY 2026, to maintain fees for vehicle emissions tests conducted in area A at the area A emission fee level as of June 30, 2025.
9. Continues to authorize ADEQ to use up to $6,531,000 from the Underground Storage Tank Revolving Fund in FY 2026 for administrative costs and remediating sewage discharge issues in Naco, Arizona and other border areas of Arizona.
10. Suspends the statutorily prescribed $18,000,000 transfer from the state GF to the Water Quality Assurance Revolving Fund for FY 2026.
Arizona State Forester
11. Requires the Arizona State Forester to deposit fees collected for the review and approval of wildfire mitigation plans in the Cooperative Forestry Fund.
Colorado River Litigation Fund
12. Establishes the Colorado River Litigation Fund consisting of legislative appropriations.
13. Requires the Arizona Department of Water Resources (ADWR) to administer the Colorado River Litigation Fund.
14. Stipulates that monies in the Colorado River Litigation Fund are continuously appropriated and are exempt from lapsing.
15. Requires ADWR to use monies in the Colorado River Litigation Fund solely to initiate, defend or participate in litigation against any other state, any party domiciled in another state or the United States related to Arizona's apportionment of Colorado River water or any other rights of Arizona regarding Colorado River water under the Colorado River Compact of 1922, Boulder Canyon Project Act of 1928, Colorado River Decree of 1964, Colorado River Basin Project Act of 1968 or any other federal law that affects Arizona's apportionment of Colorado River water or the right to divert water controlled by the United States or to exercise Arizona's entitlement to water.
16. Requires the State Treasurer, on notice from the Director of ADWR, to invest and divest monies in the Colorado River Litigation Fund.
17. Requires outlined monies earned from investment to be credited to the Colorado River Litigation Fund.
Fire Incident Management Fund (FIMF)
(Retroactive to June 30, 2025)
18. Prohibits more than $450,000, rather than $200,000, of the monies appropriated to the FIMF from being used by the Arizona Department of Administration (ADOA) to administer the FIMF.
19. Requires ADOA to distribute monies from the FIMF to provide grants to municipal fire departments and fire districts for a laptop computer or tablet, rather than hardware, to use the prescribed software in an operational environment.
20. Reverts, by December 31, 2025, any grant monies awarded to a municipal fire department or fire district that has not signed a contract with an eligible provider by June 30, 2025, to the FIMF.
21. Reverts any prescribed grant monies that are awarded to a municipal fire department or fire district and that are not encumbered through a contract with an eligible provider within one year of the award date to the FIMF after July 1, 2025.
22. Requires ADOA to randomly audit grant monies awarded from the FIMF to ensure that those awarded monies are spent on allowable expenses.
23. Requires ADOA, if ADOA finds that a municipal fire department or fire district spent grant monies on impermissible expenses, to require the offending municipal fire department or fire district to return all unexpended and unencumbered monies.
24. Reverts all outlined returned unexpended and unencumbered FIMF grant monies to the FIMF.
25. Allows a municipal fire department or fire district whose grant monies reverted to the FIMF to reapply for a grant.
26. Allows ADOA to award a grant to an applicant whose award reverted to the FIMF only after ADOA awards grants to all other eligible applying entities.
27. Extends the delayed repeal date of the FIMF from July 1, 2025, to July 1, 2027.
Game and Fish Publications Revolving Fund
28. Reverts monies in the Game and Fish Publications Revolving Fund that at any time are more than $250,000, rather than $80,000, to the Game and Fish Fund.
29. Exempts monies in the Game and Fish Publications Revolving Funds up to an amount of $250,000, rather than $80,000, from lapsing.
Nuclear Emergency Management Fund
30. Amends Laws 2025, Chapter 56 to increase the prescribed appropriations from the Nuclear Emergency Management Fund and the assessments on outlined entities from $2,617,991 to $2,667,991 in FY 2026 and from $2,711,339 to $2,761,339 in FY 2027.
Arizona Water Banking Fund
31. Continues to include legal fees as an authorized use of Arizona Water Banking Fund monies appropriated to the Arizona Navigable Stream Adjudication Commission in FY 2026.
Arizona Water Protection Fund
32. Continues to authorize the Arizona Water Protection Fund Commission to grant up to $336,000 of unobligated monies in the Arizona Water Protection Fund in FY 2026 to ADWR to pay for AWDRs FY 2026 administrative costs.
Hazard Mitigation Revolving Fund
33. Repeals the delayed repeal date of the Hazard Mitigation Revolving Fund.
Miscellaneous
34. Defines area A.
35. Makes technical and conforming changes.
36. Becomes effective on the general effective date, with retroactive provisions as noted.
Prepared by Senate Research
June 16, 2025
SB/ci