 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
ENACTED
FACT SHEET FOR H.B. 4157/S.B. 1850
commerce; 2026-2027
Purpose
Makes statutory and session law changes relating to commerce 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. 4157 contains the budget reconciliation provisions for changes relating to commerce.
Provisions
Arizona Competes Fund
1. Continues, retroactive to July 1, 2026, the Arizona Competes Fund for two years until July 1, 2028.
2. Continues the $1,750,000 annual distribution from the State Lottery Fund to the Arizona Competes Fund through FY 2029, rather than through FY 2027.
3. Restores, beginning July 1, 2029, rather than July 1, 2027, the $3,500,000 annual distribution from the State Lottery Fund to the Arizona Competes Fund.
Financial Surveillance Fund
4. States that monies in the Financial Surveillance Fund are subject to legislative appropriation, rather than continuously appropriated and exempt from lapsing.
5. Requires the Director of the Department of Insurance and Financial Institutions (DIFI) to annually assess and collect from foreign, alien and domestic insurers that hold an active certificate of authority, rather than only domestic insurers, fee amounts within prescribed ranges and on a uniform percentage basis.
6. Specifies that the purpose of the fees collected from insurers and deposited in the Financial Surveillance Fund is for administering the insurance operational functions of DIFI, rather than for employing financial analysts who must assist DIFI in conducting financial surveillance of domestic insurers.
Advanced Air Mobility Fund
7. Requires the Arizona Commerce Authority (ACA), rather than the State Treasurer, to administer the Advanced Air Mobility Fund.
8. Removes the requirement, before there are any expenditures made from the Advanced Air Mobility Fund, for the submission of an expenditure plan for review to the Joint Legislative Committee on Capital Review.
9. States that the purpose of the Advanced Air Mobility Fund is to allow the Office of Defense Innovation (Office) within the ACA to enter into a contract with any entity that advances Arizona's defense, aerospace, dual use technology and national security innovation ecosystem.
Office
10. Requires the Office to enter into a contract with a qualified public or private entity to advance Arizona's defense, aerospace, dual use technology and national security innovation ecosystem.
11. Requires the Office to engage and coordinate with private industry, defense contractors, small businesses, institutions of higher education, research institutions, military instillations and private stakeholders to implement the duties of the Office.
12. Removes the specification that the Office may liaise with law enforcement.
13. Specifies that the Office may support, enhance or expand any ongoing U.S. Department of Defense mission within Arizona, rather than only support any ongoing U.S. Department of Defense industry development mission that is directed to Arizona.
14. Specifies that the Office may advocate to any relevant constituencies for Arizona's economic interests that are related to the U.S. Department of Defense's missions and aerospace and defense industries.
15. Specifies that the Office may develop and implement a reoccurring strategic plan to enhance Arizona's competitiveness in defense-related and national security industries, rather than only defense-related industries.
16. Specifies that the Office may identify and support emerging technology and dual use technology, rather than only emerging technology.
17. Specifies that the Office may collaborate to enhance workforce development that prepares innovators, entrepreneurs and workers to support defense and national security industries, rather than that prepares innovators and intrapreneurs to support industries of the future.
18. Authorizes the Office to:
a) develop, in collaboration with public and private partners and consistent with applicable state and federal law, a proving ground in Arizona for autonomous systems and advance air mobility to enable testing, validation and commercialization of activities;
b) enter into agreements, including intergovernmental agreements and memoranda of understanding, as necessary to implement the duties of the Office;
c) apply for, accept and spend grants, donations, aid or other monies received from the federal government or any agency of the federal government for any advance air mobility purpose; and
d) on behalf of the state or in coordination with any appropriate state agency, apply for and hold Federal Aviation Administration certificates, waivers or authorizations necessary to implement the duties of the Office.
19. Prohibits the Office from exercising regulatory authority over any public or private entity.
20. Requires the Office, by September 1, 2029, to submit a comprehensive report to the Governor, the President of the Senate and the Speaker of the House of Representatives that includes all of the following:
a) a summary of the Office's activities and accomplishments;
b) an assessment of the economic and national security impact of the Office; and
c) recommendations regarding the continuation, modification or termination of the Office.
Residential Contractors' Recovery Fund
21. Increases, from 14 percent to 20 percent, the percentage of the prior fiscal year deposit into the Residential Contractors' Recovery Fund (Recovery Fund) that the Registrar of Contractors may expend for the necessary administrative and operational costs related to processing Recovery Fund claims.
Greater Arizona Development Authority
22. Conditions financial assistance from the Greater Arizona Development Authority to a city or town having a population of more than 150,000 persons, rather than more than 50,000 persons, on voter approval.
23. Conditions financial assistance from the Greater Arizona Development Authority to a county having a population of more than 500,000 persons, rather than more than 200,000 persons, on voter approval.
Tourism Fund
24. Allows the Office of Tourism to accept and spend monies that are received as gifts, grants or donations.
25. Establishes a separate account in the Tourism Fund derived from monies received in the form of a gift, grant or donation.
Securities Regulatory and Enforcement Fund
26. Adds the requirement for the Arizona Corporation Commission to use monies in the Securities Regulatory and Enforcement Fund for railroad safety.
Miscellaneous
27. Defines advance air mobility as an air transportation system that primarily uses an electric aircraft, including eCTOL, eVTOL and powered lift aircraft, to carry passengers or cargo in an urban or a regional area.
28. Defines dual use technology as technology that has both civilian and defense or national security applications.
29. Defines qualified public or private entity as an entity that demonstrates experience, capacity and credibility in defense and national security innovation and that has the ability to do all of the following:
a) support federal defense and national security missions, including engaging with the U.S. Department of Defense and related agencies;
b) manage complex programs that involve coordination among public and private stakeholders, including industry, academia and government;
c) facilitate technology development, testing, validation or transition activities in support of defense or dual use technology applications; and
d) operate in environments that may require specialized compliance, credentialing or security conditions and support defense-related contracting or federal program requirements.
30. Makes technical and conforming changes.
31. Becomes effective on the general effective date, with a retroactive provision as noted.
House Action Senate Action
APPROP 6/10/26 DP 15-1-2-0 ATT 6/10/26 DP 8-2-0
3rd Read 6/11/26 49-8-3 3rd Read 6/11/26 23-5-2
(H.B. 4157 was substituted for S.B. 1850 on 3rd Read)
Signed by the Governor 6/13/26
Chapter 129
Prepared by Senate Research
June 19, 2026
JT/ci