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AFCCA Updates
We are still in the early weeks of session, with potentially hundreds of more bill introductions anticipated before the final bill introduction deadlines begin in early February. We are actively monitoring all new developments at the legislature to ensure that you have timely information and updates. Next week brings another full slate of bill activity and committee hearings, we will continue to keep you updated as your tracked bills continue to move through the legislative process!
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.
Arizona Legislative Session Weekly Report – Week Two
The second week of the 2026 legislative session started with a Joint Appropriation committee meeting where the Director of the Governor’s Office of Strategic Planning and Budgeting presented the Executive Budget and fielded questions from the committee members. The hearing set the tone for the weeks ahead, as lawmakers begin weighing competing fiscal priorities amid a challenging budget environment.
Given the volume of legislation moving through the Capitol and the complexity of the budget process, this report includes both an overview of the Governor’s FY 2027 Executive Budget and a brief overview of how a bill becomes law in Arizona and where key decision points can determine whether legislation advances, or stalls, during the session.=
Navigating the Legislative Session: From Bill to Law
The Arizona legislative process is a marathon beginning on the second Monday in January every year. Legislative members typically start working on and introducing their legislative priorities well before the legislature officially convenes, and once the session is officially gaveled in, a series of quick deadlines starts. If you fail to meet these deadlines, your bill is effectively dead.
Once a bill is formally introduced, its first hurdle is its committee’s assignment. Committees, such as Commerce, Health and Human Services, and Education, act as the primary gatekeepers of the session. The committee chair holds the power to determine which bills are heard and which bills are not, and the wrong committee assignment can stall or even end a bill’s progress altogether. The committee stage is also important for public testimony; this is one of the few stages in the process where the public can directly engage with committee members and speak on a bill. Bills can be assigned to one or multiple committees, and every bill with a fiscal appropriation goes through the appropriations committee. Once all public testimony is finished, members of the committee vote “aye” or “nay” on the bill. After a bill has passed out of committee, it is then assigned to rules and caucus, where the Legislative Rules Attorney determines if the bill is constitutional and in proper form, and then where each respective caucus initially discusses the bill. Once a bill survives this, it is eligible for consideration on the floor of its chamber, where it is debated and voted on by the full body.
On the floor, the bill must first move through the Committee of the Whole (COW). Here, bills can be discussed and amended before being put to a vote by the full chamber. Constitutionally in Arizona, bills must be read three times before they can be voted on. The first read is the committee assignment, the second read is procedural, and the third read is the full chamber vote. If a bill is successfully voted out of a chamber by a simple majority, it moves over to the opposite chamber where the process begins all over again. If a bill is amended while in the opposite chamber, it is then sent back to its chamber of origin for a final read/ vote. After this, the bill is then sent up to the Governor for a signature or a veto.
During the Legislative Session the Governor has 5 days to sign or veto a bill once it reaches their desk, and 10 days once the legislature has adjourned sine die. With only the second week of session just wrapping up, there is still significant activity ahead, with many additional bills yet to be introduced.
Overview: Governor Katie Hobbs’ FY 2027 Executive Budget
Governor Hobbs’ FY 2027 Executive Budget is built around a cautious economic outlook, growing federal uncertainty, and a focus on affordability, public safety, and long-term fiscal sustainability. The proposal reflects a bifurcated economy, with strong headline growth driven by AI investment and asset appreciation, but beneath the surface, ongoing pressure on working families from inflation, housing costs, and labor market softness. The Governor’s budget proposal additionally prioritizes targeted investments while pursuing operational efficiencies to stabilize the state’s finances.
The budget assumes continued revenue growth but with tightening structural balances over the next several fiscal years. Major priorities include:
- $1.2B to fully fund caseload and formula-driven obligations.
- $499.3M to address critical operating needs across state agencies.
- $126.8M in strategic investments to improve affordability and protect quality of life for Arizonans.
A significant driver of the budget is the response to federal policy changes in response to H.R.1, which are expected to disrupt Medicaid, SNAP, emergency management, air quality, and other programs. The Governor budget proposes substantial one-time General Fund investments to backfill federal reductions, fund new staffing and technology requirements, and mitigate negative impacts of H.R.1 on healthcare, food security, and local governments.
The Governor’s budget proposal also assumes Arizona will receive $759.7 million in federal reimbursement for prior state investments in border enforcement, and it includes additional funding for the Border Coordination Office. However, the federal government has not yet established a timeline for when, or if, these border security reimbursements will be dispersed.
Proposition 123 Renewal:
The Governor’s FY 2027 Executive Budget assumes renewal of Proposition 123, restoring the enhanced 4.4% distribution from the State Land Trust above the 2.5% constitutional baseline for K–12 education. The budget reflects a $271.3 million base level increase driven by the Prop. 123 renewal, supporting basic state aid and classroom funding statewide. In addition, the budget includes $36.8 million to cover School Facilities Division building renewal bond debt service ($1.5B over the propositions lifetime), directly linking the continuation of Proposition 123 to the state’s ability to meet school facilities and capital obligations. Baseline funding allocations also include $117.5 million to the Classroom Site Fund and $72.3 million to Basic State Aid, underscoring the role of Prop. 123 in stabilizing both classroom and facilities funding.
Other highlights of the executive budget include:
- $2.5M ARPA one-time in FY26 and $2.5M General Fund one-time in FY27 for the Housing Acceleration Fund to leverage public-private partnerships and provide financing for more housing units
- Arizona Affordability Fund – leveraging a 3.50 per night fee for vacation rentals (estimated $28.0M in annual revenues), $15M Utility Assistance, $3M Weatherization, and the remainder to the Housing Trust Fund
- $44.8 million for the Child Care Assistance Program.
- $20.7 million to replace lost federal funds for services to victims and survivors of crime.
- $24.4 million to continue a 4% stipend for correctional and youth correctional officers.
- $10.5 million for probation officer salaries.
- $118.3 million in one-time funds for new employees to help the state comply with court-ordered prison health care and resources for efforts to stop the sale of fentanyl.
- $10 million investment in the Cyber Readiness Program that enhances state, local, and tribal protection of critical infrastructure.
- $156.0M to expand the number of communities with access to solar.
- $5.1M for body cameras in Arizona State correctional facilities.
- $10.7 million in support for young adults who are transitioning out of foster care programs and plans to use.
- $4.1 million in federal funding to increase foster care rates.
- $2 million deposit in the Arts Trust Fund
- $1 million for the State Parks Heritage Fund
- $30 million for the state’s legal fight to protect its share of diminishing Colorado River water.
By the Numbers:
Days of Session: 12
Bills Introduced: 1325
Bills Passed: 1
Bills Vetoed: 1
Key Dates:
Opening Day: January 12
Senate Bill Introduction Deadline: February 2
House Bill Introduction Deadline: February 9
Crossover week: February 23 to February 27
Final week of committees: March 23 to March 27
100th day of session: April 21
Budget Deadline (constitutionally required): July 1