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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
VETOED
FACT SHEET FOR H.B. 4144/S.B. 1837
2026-2027; environment.
Purpose
Makes session law changes relating to the environment necessary to implement the FY 2027 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. 4144 contains the budget reconciliation provisions for changes relating to the environment.
Provisions
1. Continues to authorize the Arizona Department of Environmental Quality (ADEQ) to use up to $6,531,000 from the Underground Storage Tank Revolving Fund in FY 2027 for the administrative costs of ADEQ and for remediating sewage discharge issues in Naco, Arizona and other border areas of Arizona.
2. 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 2027 in addition to the statutorily prescribed purposes of the Arizona Water Banking Fund.
3. Continues to authorize the Arizona Water Protection Fund Commission to grant to the Arizona Department of Water Resources (ADWR) up to $336,000 of the unobligated balance in the Arizona Water Protection Fund in FY 2027 to pay for ADWR's FY 2027 administrative costs.
4. Continues to require the Director of ADEQ, in FY 2027, to maintain fees for tests conducted in Area A at the Area A emission fee level as of June 30, 2025.
5. Prohibits the statutorily prescribed appropriation from the state General Fund to the Water Quality Assurance Revolving Fund for FY 2027 from exceeding $15,000,000.
6. Makes conforming changes.
7. Becomes effective on the general effective date.
Governor's Veto Message
The Governor indicates in her veto message that H.B. 4144, and this version of the FY 2027 state budget as a whole, would cause Arizona to default on its debt obligations, endanger vulnerable children, cut public safety funding and provide tax breaks for billionaires, data centers and special interests. The Governor outlines her specific concerns, including cuts to funding for specified agencies and programs, and invites the Legislature to return to the negotiating table.
House Action Senate Action
APPROP 4/28/26 DP 11-7-0-0 ATT 4/28/26 DP 6-4-0
3rd Read 4/29/26 33-20-7 3rd Read 5/4/26 16-12-2
(H.B. 4144 was substituted for S.B. 1837 on 3rd Read)
Vetoed by the Governor 5/5/26
Prepared by Senate Research
May 7, 2026
SB/hk