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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
local government; 2025-2026
Purpose
Makes statutory and session law changes relating to local government 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.
H.B. 2957 contains the budget reconciliation provisions for changes relating to local government.
Provisions
1. Allows a county board of supervisors (county BOS) to establish, maintain and operate facilities that provide veterans' services.
2. Requires the Auditor General (OAG) to perform procedural reviews of county treasurer offices, which may include:
a) evaluating compliance with the uniform system of accounting for county treasurers prescribed by the OAG; and
b) administrative and accounting internal controls.
3. Requires the OAG to provide written results of the procedural review, including any recommendations to the county treasurer, the county BOS and Joint Legislative Audit Committee (JLAC).
4. Requires a county treasurer's office that is subject to a review to notify the OAG in writing:
a) whether the county treasurer's office agrees or disagrees with the findings of the review; and
b) whether the county treasurer's office will implement the recommendations, implement modifications to the recommendations or refuse to implement the recommendations.
5. Requires the county treasurer, at the OAG's request, to submit a written status report on correcting the deficiencies and implementing the recommendations of the procedural review within a one-year period after receiving the results of the procedural review.
6. Requires the OAG to follow up and review the county treasurer's progress toward correcting the deficiencies and implementing the recommendations of the procedural review and provide a status report to the county BOS and JLAC during the one-year period.
7. Allows the OAG to review a county treasurer's progress after the one-year period if there are deficiencies or recommendations that the county treasurer has not corrected or implemented.
8. Requires the county treasurer to participate in any hearing scheduled during this review period by JLAC or by any other legislative committee designated by JLAC.
9. Continues to allow a county with a population of fewer than 250,000 persons to meet any fiscal obligation for FY 2026 from any source of county revenue designated by the county, including monies of any county special taxing jurisdiction where the county BOS serves as the board of directors.
10. Continues to cap, at $1,250,000, the amount of money a county may use for purposes outside the county's revenue source.
11. Continues to require a county with a population of fewer than 250,000 persons, by October 1, 2025, to report to the Director of the Joint Legislative Budget Committee:
a) whether the county used a revenue source for purposes other than the revenue source's intended purposes to meet a county fiscal obligation; and
b) the specific source and amount of revenues that the county intends to use in FY 2026.
12. Becomes effective on the general effective date.
House Action
APPROP 6/12/25 DP 11-7-0-0
3rd Read 6/13/25 31-0-29
Prepared by Senate Research
June 25, 2025
AN/SDR/slp