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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
VETOED
revenue; 2025-2026
Purpose
Makes statutory and session law changes relating to revenue 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. 2959 contains the budget reconciliation provisions for changes relating to revenue.
Provisions
1. Includes the Maricopa County one-half cent transportation excise tax in the assessment of fees for the Arizona Department of Revenue (ADOR) Integrated Tax System Modernization Project.
2. Declares the Legislature's intent that the total amount of fees that ADOR must assess on the following entities in FY 2026 to implement the ADOR Integrated Tax System Modernization Project may not exceed $6,558,800 and must be assessed in proportion to the aggregate amount of tax revenues distributed for the fiscal year two years preceding the current fiscal year:
a) counties, cities and towns that receive state shared revenues;
b) the Maricopa County council of governments; and
c) Maricopa County and Pima County regional transportation authorities.
3. Declares the Legislature's intent that a county's, city's or town's population in the most recent census be used as the basis for apportioning the assessment.
4. Declares the Legislature's intent that the amount of the 0.6 percent additional education transaction privilege tax revenues transferred for the ADOR Integrated Tax System Modernization Project not exceed $795,300 in FY 2026.
5. Declares the Legislature's intent that the amount of marijuana excise tax revenues transferred for the ADOR Integrated Tax System Modernization Project not exceed $177,200 in FY 2026.
6. Makes technical and conforming changes.
7. Becomes effective on the general effective date.
The Governor indicates in her veto message that H.B. 2959, and this version of the FY 2026 budget as a whole, does not provide adequate funding for health care coverage and K-12 education and inadequately addresses priorities such as childcare affordability, veteran homelessness and public safety. The Governor encourages working in a productive fashion to deliver a bipartisan solution for Arizonans.
House Action Senate Action
APPROP 6/12/25 DP 11-7-0-0 3rd Read 6/25/25 16-11-3
3rd Read 6/13/25 31-0-29
Vetoed by the Governor on 6/25/25
Prepared by Senate Research
June 27, 2025
MG/ci