House Engrossed

2026-2027; state budget implementation.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 4140

AN ACT

Appropriating monies; relating to IMPLEMENTATION of budgetary revisions.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Unrestricted federal monies; essential government services; retroactivity

A. Any unrestricted federal monies received by this state beginning July 1, 2026 through June 30, 2027 shall be deposited in the state general fund. The monies shall be used to pay essential government services.

B. This section applies retroactively to from and after June 30, 2026.

Sec. 2. Budget stabilization fund; exceptions

Notwithstanding section 35-144, Arizona Revised Statutes:

1. For fiscal years 2026-2027 and 2027-2028, the legislature is not required to appropriate monies to or transfer monies from the budget stabilization fund.

2. For fiscal year 2026-2027, the budget stabilization fund is not limited to ten percent of the state general fund revenue for the fiscal year, and the state treasurer may not transfer any surplus monies from the budget stabilization fund to the state general fund.

Sec. 3. Budget submission; government efficiency and reform initiative; report

In furtherance of section 35-111, Arizona Revised Statutes, the governor's budget submission to the legislature for fiscal year 2027-2028 must include a full accounting of the monies available for expenditure pursuant to any savings realized by the government efficiency and reform initiative. The governor's budget submission must include a report that demonstrates how the government efficiency and reform initiative savings target of $100,000,000 will be accomplished and must include a comprehensive list of component initiatives, by savings amount, for each affected agency.