SB1740 - 571R - Senate Fact Sheet

ARIZONA STATE SENATE

Fifty-Seventh Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1740

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. Allows 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. 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.

3. 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.

4. Requires the ASLD, by February 1, 2026, to provide a report to the Legislature that includes the total number of applications that are currently pending at the ASLD in the following phases:

a) the administrative completeness review phase of the overall application processing timeline, including the average number of days the applications have been pending in the administrative completeness review phase; and

b) the substantive review phase of the overall application processing timeline, including the average number of days the applications have been pending in the substantive review phase.

Arizona Department of Environmental Quality (ADEQ)

5. 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.

6. 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.

7. Suspends the statutorily prescribed $18,000,000 transfer from the state General Fund (state GF) to the Water Quality Assurance Revolving Fund for FY 2026.

Arizona State Forester

8. Requires the Arizona State Forester to deposit fees collected for the review and approval of wildfire mitigation plans in the Cooperative Forestry Fund.

Agriculture and Innovation Fund Pilot Program (Pilot Program)

9. Establishes the Pilot Program to provide grants and collect data for water-focused innovation in agriculture.

10. Requires the Arizona Department of Agriculture (AZDA) to administer the Pilot Program.

11. Establishes the Agriculture and Water Innovation Fund consisting of legislative appropriations, grants from federal agencies and monies appropriated by any other lawful source.

12. Stipulates that monies in the Agriculture and Water Innovation Fund are continuously appropriated and exempt from lapsing.

13. Requires the AZDA to administer the Agriculture and Water Innovation Fund and not use more that 10 percent of the monies in the fund annually for the costs of administering the fund and the Pilot Program.

14. Allows the AZDA to grant monies from the Agriculture and Water Innovation Fund to qualified applicants to acquire or contract for implementing innovative technology that improves water use efficiency by improving soil health.

15. Requires the AZDA, as a condition of the grant, to require the qualified applicant to:

a) certify the installation of the new innovative technology; and

b) report on the individual fields that receive the benefit of the grant monies to demonstrate increased water use efficiency on the affected fields.

19. Requires the AZDA, by December 31 of each year, to submit a written report to the President of the Senate and the Speaker of the House of Representatives describing the activities of the AZDA for the preceding fiscal year related to the Agriculture and Water Innovation Fund and provide a copy of the report to the Secretary of State.

20. Repeals the Pilot Program and the Agriculture and Water Innovation Fund on January 1, 2029.

Colorado River Litigation Fund

21. Establishes the Colorado River Litigation Fund consisting of legislative appropriations.

22. Requires the Arizona Department of Water Resources (ADWR) to administer the Colorado River Litigation Fund.

23. Stipulates that monies in the Colorado River Litigation Fund are continuously appropriated and are exempt from lapsing.

24. Requires ADWR to use monies in the Colorado River Litigation Fund solely to initiate, defend or participate in litigation 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.

25. Prohibits monies in the Colorado River Litigation Fund from being used by ADWR for the purpose of initiating litigation against any entity that holds an entitlement to Arizona's apportionment of Colorado River water.

26. Requires the State Treasurer, on notice from the Director of ADWR, to invest and divest monies in the Colorado River Litigation Fund.

27. Requires outlined monies earned from investment to be credited to the Colorado River Litigation Fund.

Fire Incident Management

(Retroactive to June 30, 2025)

28. Establishes the Fire Incident Management Grant Program (Grant Program).

29. Requires ADOA to administer the Grant Program.

30. Requires ADOA to award grants from monies previously appropriated to ADOA and monies appropriated to ADOA in FY 2026.

31. Caps, beginning July 1, 2025, the amount of appropriated monies that ADOA may use to administer the Grant Program, including conducting audits of grant recipients, at $250,000.

32. Requires the remaining monies to be used to provide grants to municipal fire departments and fire districts for hardware and software that:

a) enables the statewide deployment of a secure incident management platform to fire and law enforcement agencies;

b) provides a standardized incident command and management platform based on federal emergency management agency standards that enable diverse incident management and supports entities to work together; and

c) provides a collaboration and communications solution.

33. Requires the incident command and management platform to ensure the following:

a) a clearly defined chain of command;

b) the use of common terminology;

c) the safety of first responders and others;

d) the achievement of response objectives; and

e) the efficient use of resources.

34. Requires the collaboration and communications solution to:

a) identify the location, status and assignment of assigned resources;

b) allow status updates, tracking and management of an incident;

c) allow secure messaging and file sharing to all users involved in an incident;

d) allow the sharing of collaborative maps, building floor plans and images between public safety agencies;

e) allow collaboration and information sharing between disparate agencies during a mass casualty incident;

f) define a federal emergency management agency or national incident management systems based organizational structure for the management of incidents;

g) provide the ability to print standard integrated computer solutions forms for tracking and cost reimbursement;

h) provide enhanced telemetry-based firefighter safety monitoring;

i) work in areas without internet access in a disconnected mode;

j) provide a seamless and connected platform for notification, response and rostering;

k) provide cross platform functionality; and

l) provide a smartphone-based application for notification, accountability and situational awareness.

35. Allows each municipal fire department or fire district in Arizona to submit a grant request to ADOA for the costs of the secure incident management software system that meets all of the outlined criteria.

36. Requires ADOA to award grants on a first-come, first-served basis.

37. Requires grants that are awarded to fully fund the costs of the secure incident management system for each municipal fire department or fire district for three years.

38. Requires grants that are awarded to contain a requirement that:

a) any portion of a grant award that is not fully encumbered by a municipal fire department or fire district within one year after the award is made must be returned to ADOA and may be used by ADOA to award additional grants; and

b) any municipal fire department or fire district that is awarded a grant must sign a contract with a state vendor within one year after receiving the award.

39. Requires the grant award to be returned to ADOA if a grant recipient fails to sign a contract within one year after the award is made.

40. Allows a municipal fire department or fire district that fails to sign a contract within one year after the award is made to reapply for a new grant.

41. Allows ADOA to review proposed contracts between grant recipients and state vendors and perform audits to ensure that grant monies are used in accordance with the prescribed requirements relating to the Grant Program.

42. Requires ADOA, by December 31, 2025, to submit a report on the Grant Program to the President of the Senate, the Speaker of the House Representatives and the Governor and provide a copy to the Secretary of State.

43. Requires the report to include the name of each applicant that applied for a grant, the name of each entity that was awarded a grant and the amount awarded to each entity.

44. Extends the delayed repeal date of the Fire Incident Management Fund (FIMF) from July 1, 2025, to July 1, 2027.

Grant Program Awards Encumbrance

45. Requires any portion of a grant award made with monies previously appropriated for fire incident management grants that are not fully encumbered by a municipal fire department or fire district within 12 months after the initial award of the grant to be returned to ADOA.

46. Allows ADOA to use the outlined returned grant money to award additional grants for the Grant Program.

Game and Fish Publications Revolving Fund

47. 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.

48. 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

49. 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

50. 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

51. 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 AWDR’s FY 2026 administrative costs.

Hazard Mitigation Revolving Fund

52. Repeals the delayed repeal date of the Hazard Mitigation Revolving Fund.

53. Requires, rather than allows, monies in the Hazard Mitigation Revolving Fund to be used in accordance with guidelines established pursuant to the Safeguarding Tomorrow Through Ongoing Risk Mitigation Act.

54. Removes the requirement that monies in the Hazard Mitigation Revolving Fund must be used in FYs 2024, 2025, 2026, 2027 and 2028.

Miscellaneous

55. Defines area A.

56. Defines innovative technology as products or services that improve water use efficiency by improving soil health in agriculture without requiring nonnative soil amendments or improvements to irrigation infrastructure.

57. Defines qualified applicant as either:

a) an agricultural landowner, beneficial owner of trust land or lessee of agricultural land that has actively farmed the land or committed the land to intentional water conservation in three of the five calendar years immediately preceding the date of the application; or

b) an irrigation district that applies for the benefit of members of the irrigation district.

58. Makes technical and conforming changes.

59. Becomes effective on the general effective date, with a retroactive provision as noted.

Amendments Adopted by Committee of the Whole

1. Establishes the Pilot Program to provide grants and collect data for water-focused innovation in agriculture.

2. Requires the AZDA to administer the Pilot Program.

3. Establishes the Agriculture and Water Innovation Fund consisting of legislative appropriations, grants from federal agencies and monies appropriated by any other lawful source.

4. Stipulates that monies in the Agriculture and Water Innovation Fund are continuously appropriated and exempt from lapsing.

5. Requires the AZDA to administer the Agriculture and Water Innovation Fund and not use more that 10 percent of the monies in the fund annually for the costs of administering the fund and the Pilot Program.

6. Allows the AZDA to grant monies from the Agriculture and Water Innovation Fund to qualified applicants to acquire or contract for implementing innovative technology that improves water use efficiency by improving soil health.

7. Requires the AZDA, as a condition of the grant, to require the qualified applicant to:

a) certify the installation of the new innovative technology; and

b) report on the individual fields that receive the benefit of the grant monies to demonstrate increased water use efficiency on the affected fields.

8. Outlines reporting requirements for the AZDA.

9. Repeals the Pilot Program and the Agriculture and Water Innovation Fund on January 1, 2029.

10. Allows, rather than requires, the Commissioner of the ASLD (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.

11. Removes the stipulation that, 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, the application is approved.

12. Requires the ASLD, by February 1, 2026, to provide a report to the Legislature that includes the total number of applications that are currently pending at the ASLD in the following phases:

b) the substantive review phase of the overall application processing timeline, including the average number of days the applications have been pending in the substantive review phase.

13. Requires monies in the Colorado River Litigation Fund to be used by the ADWR for the sole purpose of initiating, defending or participating in litigation against any entity, rather than 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 outlined acts, decrees, compacts or federal laws.

14. Prohibits monies in the Colorado River Litigation Fund from being used by ADWR for the purpose of initiating litigation against any entity that holds an entitlement to Arizona's apportionment of Colorado River water.

15. Requires, rather than allows, monies in the Hazard Mitigation Revolving Fund to be used in accordance with guidelines established pursuant to the Safeguarding Tomorrow Through Ongoing Risk Mitigation Act.

16. Removes the requirement that monies in the Hazard Mitigation Revolving Fund be used in FYs 2024, 2025, 2026, 2027 and 2028.

17. Removes the authorization for the Director of the AZDA, with the assistance of the AZDA Advisory Council, to continue to increase or decrease the existing agricultural fees from FYs 2024 and 2025 in FY 2026 for services provided in FY 2026.

18. Removes the declaration of the Legislature's intent that, for FY 2026, any additional revenue generated by the outlined agricultural fees does not exceed $218,000 to the state GF, $113,000 to the Pesticide Trust Fund and $26,000 to the Dangerous Plants, Pests and Diseases Trust Fund.

19. Removes the exemption for the AZDA from statutorily prescribed rulemaking requirements related to administrative procedure.

20. Restores the prescribed prohibition on the Arizona Department of Administration (ADOA) from spending more than $200,000, rather than $450,000, of the monies appropriated to the FIMF to administer the FIMF.

21. Removes the requirement that ADOA distribute monies from the FIMF to provide grants to municipal fire departments and fire districts for a laptop computer or tablet to use the prescribed software in an operational environment.

22. Restores the prescribed requirement that ADOA distribute monies from the FIMF to provide grants to municipal fire departments and fire districts for hardware to use the prescribed software in an operational environment.

23. Removes the requirement that, 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, revert to the FIMF.

24. Removes the requirement that 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 revert to the FIMF after July 1, 2025.

25. Removes the requirement that ADOA randomly audit grant monies awarded from the FIMF to ensure that those awarded monies are spent on allowable expenses.

26. Removes the requirement for 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 and revert those monies to the FIMF.

27. Removes the authorization for a municipal fire department or fire district whose grant monies reverted to the FIMF to reapply for a grant.

28. Removes the authorization for 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.

29. Defines innovative technology.

30. Defines qualified applicant.

31. Makes conforming changes.

Amendments Adopted by the House of Representatives

1. Establishes the Grant Program.

2. Requires ADOA to administer the Grant Program.

3. Requires ADOA to award grants from monies previously appropriated to ADOA and monies appropriated to ADOA in FY 2026.

4. Caps, beginning July 1, 2025, the amount of appropriated monies that ADOA may use to administer the Grant Program, including conducting audits of grant recipients, at $250,000.

5. Requires the remaining monies to be used to provide grants to municipal fire departments and fire districts for hardware and software that: