Provided by Capitol Consulting, LLC
This past week, over a thousand bills were introduced, of those, several would directly impact the Funeral Industry, including:
HB 2181 (death certificates; funeral establishments; timeline): Sponsored by Representative Julie Willoughby, this bill would extend the deadline for death certificates from 7 days to 21 days.
HB 2184 (fetal death; funeral homes): Sponsored by Representative Julie Willoughby, this bill would expand fetal death certificate registration to allow submissions at or before 20 weeks of gestation at the mother’s request. This bill also requires a physician who is performing a pregnancy termination service to inform the patient beforehand of the option to have remains transported to a funeral home.
The 57th Second Regular Legislative Session reconvened on Monday, January 12, 2026. Democratic Governor Katie Hobbs kicked off the session with her State of the State Address, outlining her priorities for the year ahead and previewing her Executive Budget.
Governor Hobbs focused on addressing affordability, security, and long-term stability. She called on lawmakers to pass her limited adoption of the federal tax cuts that President Trump enacted in H.R.1, that she refers to as the Middle Class Tax Cuts Package. The package adopts most of H.R.1’s individual income tax cuts, but not the new deductions for corporations. It also provides multiple avenues of tax relief for the middle class, including increasing the standard deduction, exempting overtime pay, exempting tips from taxation, and providing targeted relief for seniors.
In her address, the Governor also announced multiple new initiatives such as the Arizona Capacity and Efficiency Initiative, aimed to streamline government efficiency and save up to $100M over three years. She introduced a new Colorado River Protection Fund, funding it with $30M to strengthen Arizona’s water security and economic growth capacity, and the Governor also stated her plans to eliminate the Data Center Tax Exemption, ending a $38M corporate tax subsidy.
She announced the Housing Acceleration Fund, with an initial $2.5M in funding to leverage public–private dollars to build more affordable housing faster. She also announced the Arizona Affordability Fund, funded with an initial $20M, and with plans for long-term funding through a $3.50 additional nightly fee on vacation rentals. The fund is aimed at helping families pay utility bills, assist with home weatherization costs, and other additional housing costs.
Tax Conformity
The first big showdown of the year at the Capitol is over enacting President Donald Trump’s tax cuts in H.R.1. The issue is over which of the federal tax cuts Arizona should adopt, and how much money it can afford to give back to its citizens amid already strained finances. Lawmakers are currently weighing two competing approaches: a Republican-backed proposal that largely mirrors the federal tax cuts, and the alternative plan from the Governor, the Middle Class Tax Cuts Package, that excludes some of the most significant corporate tax provisions. The Republican plan that was fast-tracked through both chambers this week and sent to the Governor Thursday afternoon, and vetoed in the early afternoon on Friday, would reduce state revenues by roughly $190 million more in the current fiscal year than the Governor’s proposal, costing Arizonans roughly $1.1 billion over the next three years. The Governor stated in a press release “Their proposal gives hundreds of millions of dollars in tax breaks to special interests, removes a tax cut for working seniors, and adds even more handouts to those who are already rich. If Republicans want to give a billion dollar tax break for the wealthy, they must show the people of Arizona how they will pay for it without slashing the vital services our constituents rely on. We need tax cuts for middle class families now.”
Overall, the first week of the 2026 legislative session has set the stage for the budget and policy debates ahead, with a slew of 1,137 bills and 75 memorial resolutions introduced so far and the first major deadline for House members to drop their bills ahead of their 7-bill limit past us, the next major deadline for Senate members to have their bills introduced is Monday, February 2, 2026. We will continue to track developments and provide updates as legislation begins to move and priorities take clearer shape.
Initial key budget highlights include:
- Education & Affordability
- Imposes a $250,000 income cap on Empowerment Scholarship Accounts (ESAs) and eliminates carryforward balances that currently allow unused funds to roll over year to year.
- Provides a 6.9 percent distribution to public schools from the State Land Trust through an extension of Proposition 123. The budget also continues the nearly $300 million backfill approved in last year’s budget in the absence of a renewed Prop. 123 agreement.
- Housing & Health
- $12.0 million to mitigate impacts on health outcomes.
- $2.5 million allocated to the Housing Acceleration Fund.
- Workforce & Education Access
- $6.0 million general fund (one-time) to assist community college students in obtaining credentials and certifications.
- $2.0 million general fund (one-time) to expand access to free online courses for adults seeking to earn a high school diploma.
- Extreme Heat & Community Investments
- $10.0 million general fund (one-time) for continued investments to mitigate the effects of extreme heat on vulnerable Arizonans.
- $2.0 million general fund (one-time) deposit into the Arts Trust.
- Division of Developmental Disabilities (DDD)
- $293.3 million general fund ongoing.
- $5.5 million general fund one-time.
- $657.8 million in federal funding.
- Water Policy
- $30.0 million general fund (one-time) to the Colorado River Protection Fund to safeguard Arizona water users.
- Anticipated permanent funding through water usage fees assessed on data centers
By the Numbers:
Days of Session: 5
Bills Introduced: 1212
Bills Passed: 1
Bills Vetoed: 1
Key Dates:
Opening Day: January 12th, 2026
Senate Bill Introduction Deadline: February 2nd, 2026
House Bill Introduction Deadline: February 9th, 2026
Crossover week: February 16th to February 20th
Final week of committees: March 23rd to March 27th
100th day of session: April 21st, 2026
Budget Deadline (constitutionally required): July 1st, 2026
Looking Ahead:
The legislature will not be meeting on Monday, January 19, in observance of Martin Luther King Jr. Day, but will reconvene Tuesday the 20th for another packed week. We expect additional legislation to continue to be introduced as the Senate approaches its bill drop deadline of Monday, February 2.
You can track the status of these bills on your live interactive tracking link found here –Skywolf AI– this link will automatically update as the bills move through the process. As always please do not hesitate to let me know if you would like to make any additions or removals from your bill tracking list.