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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
higher education; 2026-2027.
Purpose
Makes statutory and session law changes relating to higher education 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.
S.B. 1854 contains the budget reconciliation provisions for changes relating to higher education.
Provisions
Arizona Board of Regents Operating Budget Supplementation
1. Specifies that the Arizona Board of Regents (ABOR) may retain monies from the public universities to supplement ABOR's operating budget.
2. Caps the total amount of monies that ABOR may retain from the public universities in any fiscal year at $5,000,000.
Arizona Veterinary Loan Assistance Program
3. Caps the maximum amount of Arizona Veterinary Loan Assistance Fund (Fund) monies that a participating veterinarian may receive at the lessor of:
a) $200,000, rather than $100,000; or
b) an amount that is equal to the veterinarian's outstanding veterinary college educational loan balance.
4. Adds, to the eligibility criteria to participate in the Arizona Veterinary Loan Assistance Program, a requirement for a person to satisfactorily pass the licensing examination administered by the Arizona State Veterinary Medical Examining Board.
5. Requires ABOR to award Fund monies to a veterinarian if ABOR determines that the veterinarian is an eligible applicant based on the eligibility criteria and the veterinarian signs the prescribed work agreement, rather than if ABOR determines that the veterinarian satisfied the terms of the prescribed work agreement at the conclusion of the veterinarian's four-year commitment.
6. Specifies that, after each year that a veterinarian works in Arizona pursuant to the prescribed work agreement, ABOR must distribute to the veterinarian one-fourth of the total amount that ABOR has awarded to the veterinarian.
Miscellaneous
7. Continues, for FY 2027, to allow the required state match to be less than two dollars for each dollar raised by the surcharge on student registration fees pursuant to the Arizona Financial Aid Trust Fund.
8. Specifies that operating state aid for community college districts (CCDs) in FY 2027 is as prescribed in the FY 2027 General Appropriations Act.
9. Specifies that state aid for CCD science, technology, engineering and mathematics and workforce development programs in FY 2027 is as prescribed in the FY 2027 General Appropriations Act.
10. Makes technical changes.
11. Becomes effective on the general effective date.
Prepared by Senate Research
June 8, 2026
MH/ci