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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: APPROP DP 9-7-2-0 |
HB 2554: biennial budget
Sponsor: Representative Chaplik, LD 3
Caucus & COW
Overview
Implements a biennial state budget process.
History
The Arizona Legislature adopts an annual budget for each fiscal year that contains general appropriations. Article IV, Section 20, Part 2 of the Constitution of Arizona requires the General Appropriations Act (feed bill) contain only appropriations for the different state departments, state institutions, public schools and interest on public debt.
Before September 1 of every year, each budget unit is required to submit a budget request, including estimates of the financial requirements and receipts, as well as an operating plan, to the Governor (A.R.S. § 35-113; 35-122). The Governor's Office of Strategic Planning and Budgeting must report on the use of federal monies by state agencies (A.R.S. § 41-723).
Before October 15 of every year, the Arizona Department of Administration (ADOA), Arizona Board of Regents (ABOR) and Arizona Department of Transportation (ADOT) must each submit a capital improvement plan to the Governor (A.R.S. § 41-793).
Not later than five days after the start of the legislative session, the Governor must annually submit to the Legislature a budget proposal containing a complete expenditure plan and estimate of revenues sufficient to meet proposed expenditures (A.R.S. § 35-111; 35-118).
From the time of transmission of the Executive budget report to the Legislature's passage of the General Appropriations Act, the Director of OSPB, in person or by an assistant, must be available to the Legislature to explain any recommendation. (A.R.S. § 35-119).
Laws 1993, Chapter 252 introduced bifurcated budgeting, implementing an annual budgeting process for large agencies deemed major budget units and biennial budgeting for smaller agencies. Laws 1997, Chapter 210 converted all agencies to a biennial budget process, beginning in FY 2000. Laws 2002, Chapter 210 returned the state to a bifurcated budget system, beginning in FY 2004. Though in practice, the state had long since abandoned the bifurcated system set in place in FY 2004, in favor of annual budgeting, the bifurcated system was not officially repealed from statute until passage of Laws 2018, Chapter 279.
Provisions
1. Requires the Governor, within five days after the start of the first regular session of the Legislature, to submit a budget plan for the next two ensuing fiscal years. (Sec. 1, 6)
2. Requires the budget plan delineate each fiscal year separately. (Sec. 1, 7)
3. Directs each budget unit, including the Judiciary, ABOR and ADOT to submit a budget request to the Governor before September 1 of each even-numbered year. (Sec. 2, 5).
4. Requires the Governor have in continuous process of preparation and revision a tentative budget report for the next two ensuing fiscal years. (Sec. 3)
5. Requires the Governor's Office of Strategic Planning and Budgeting (OSPB), by February 15 of each odd-numbered year, in consultation with the Joint Legislative Budget Committee (JLBC), to report an estimate of the appropriations limit, as imposed by Article IX, Section 17 of the Constitution of Arizona, for the preceding fiscal year, the current fiscal year, and the next two ensuing fiscal years. (Sec. 3)
6. Requires each budget unit update the unit's five-year strategic plan once every two years and requires the strategic plan be posted on the agency's official internet website and submitted to OSPB and JLBC on or before January 1 of each odd-numbered year. (Sec. 8)
7. Requires that once every two years, each budget unit shall, by September 1 of each even-numbered year, submit an operating plan, including a mission statement, a description of strategic issues, performance measures and budgetary data for the prior, current and two ensuing fiscal years. (Sec. 8)
8. Requires that the employer contributions for the Arizona State Retirement System (ASRS) be determined on a biennial basis. (Sec. 9)
9. Directs ASRS, by December 1 of each even-numbered year, to provide to the Governor, Speaker of the House of Representatives and President of the Senate the contribution rate for the ensuing two fiscal years. (Sec. 9)
10. Directs OSPB, by September 1 of each even-numbered year, to report to JLBC findings and recommendations regarding the use of federal monies by any state agency that receives federal monies, anticipates receipt of federal monies or administers a program operated by federal monies. (Sec. 10)
11. Directs the Director of the ADOA, on each odd-numbered year, to make a recommendation for the allocation of a varying sum to the Capital Outlay Stabilization Fund. (Sec. 11)
12. Requires the Director of ADOA, by September 1 of each even-numbered year, to report to JLBC and OSPB on the cost of charging rental rates to state agencies with retired leases or lease purchases for the next two ensuing fiscal years. (Sec. 11)
13. Requires ADOA, ABOR and ADOT, subject to approval from the Joint Committee on Capital Review, to designate an agency responsible for computing building renewal needs for each building system in for each two ensuing fiscal years. (Sec. 12)
14. Requires the agency responsible for each building system to submit a capital improvement plan to the Governor not later than October 15 of each even-numbered year. (Sec. 12)
15. Requires the Director of the JLBC, by February 15 of each even-numbered year, in consultation with OSPB, to report an estimate of the appropriations limit, as imposed by Article IX, Section 17 of the Constitution of Arizona, for the preceding two fiscal years, the current fiscal year and for the ensuing fiscal year. (Sec. 13)
16. Requires the Director of the JLBC, by December 1 of each even-numbered year, report to the JLBC a listing of statutorily deleted and newly created funds that changed appropriated status from the prior two fiscal years. (Sec. 13)
17. Requires the Director of the JLBC, by January 31 of each odd-numbered year, to report to the JLBC the expenditures for each retirement system for the preceding two fiscal years. (Sec. 13)
18. Contains a retroactivity clause of August 31, 2026. (Sec. 14)
19. Makes technical and conforming changes.
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Initials DS HB 2554
2/5/2026 Page 0 Caucus & COW
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