 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
ENACTED
FACT SHEET FOR H.B. 4165/S.B. 1858
revenue; 2026-2027
Purpose
Makes statutory and session law changes relating to revenue 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. 4165 contains the budget reconciliation provisions for changes relating to revenue.
Provisions
1. Extends, from June 30, 2028, to June 30, 2030, the requirement:
a) for the Arizona Department of Revenue (ADOR) to assess and collect fees from specified entities to implement the ADOR Integrated Tax System Modernization Project (Tax Modernization Project);
b) for ADOR to transfer monies from the 0.6 percent additional education transaction privilege tax (TPT) to implement the Tax Modernization Project; and
c) for the State Treasurer to transfer monies from marijuana excise tax revenues to implement the Tax Modernization Project.
2. Extends the ADOR Tax System Modernization Project Advisory Committee for two years, until December 31, 2031.
3. Declares the Legislature's intent that the total amount of fees that ADOR must assess on the following entities in FY 2027 to implement the Tax Modernization Project may not exceed $1,273,800 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.
4. Includes the Maricopa County one-half cent transportation excise tax in the assessment of fees for the Tax System Modernization Project.
5. Declares the Legislature's intent that a county's, city's or town's population in the most recent census must be used as the basis for apportioning the assessment.
6. Declares the Legislature's intent that the amount of the 0.6 percent additional education TPT revenues transferred for the Tax Modernization Project not exceed $154,500 in FY 2027.
7. Declares the Legislature's intent that the amount of marijuana excise tax revenues transferred for the Tax Modernization Project not exceed $34,400 in FY 2027.
8. Becomes effective on the general effective date.
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. 4165 was substituted for S.B. 1858 on 3rd
Read)
Signed by Governor 6/13/26
Chapter 137
Prepared by Senate Research
June 23, 2026
MG/ci