commerce authority; board of directors

HB2754 - 572R - H Ver

House Engrossed

commerce authority;
board of directors

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2754

AN
ACT

AMENDING SECTIONs 41-1502, 41-1504, 41-1545.01
and 41-1545.05, ARIZONA REVISED STATUTES; RELATING TO THE ARIZONA
COMMERCE AUTHORITY.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 41-1502, Arizona Revised
Statutes, is amended to read:

START_STATUTE
41-1502.

Arizona commerce authority; board of directors; conduct of
office; audit

A. The Arizona commerce authority is
established. The mission of the authority is to provide private
sector leadership in growing and diversifying the economy of this state,
creating high quality employment in this state through expansion, attraction
and retention of businesses and marketing this state for the purpose of
expansion, attraction and retention of businesses.

B. The authority is governed by a board of directors
consisting of:

1. The governor, who serves as chairperson.

2. The chief executive officer.

3. Seventeen private sector business leaders who are
chief executive officers of private, for-profit
enterprises. None of these members may be an elected official of any
government entity. These members must be appointed from
geographically diverse areas of this state and not all from the same
county. These members shall serve staggered three-year terms
of office beginning and ending on the third Monday in January.� These members
shall be appointed as follows:

(a) Nine members who are appointed by the governor.

(b) Four members who are appointed by the president
of the senate.

(c) Four members who are appointed by the speaker of
the house of representatives.

4. The following as ex officio members without the
power to vote:

(a) The president of the senate.

(b) The speaker of the house of representatives.

(c) The president of the Arizona board of regents.

(
d
) The
chairperson of the senate finance committee, or its successor committee, or the
CHAIRPERSON'S designee.

(
e
)
The chairperson of the House of representatives
international trade committee, or its successor committee, or the chairperson's
DESIGNEE.

(
f
) The ranking
minority party member on the senate finance committee, or its successor
committee, or the ranking member's designee.

(
g
) The ranking
minority party member on the house of representatives international trade
committee, or its successor committee, or the ranking member's designee.

(d)

(
h
)
The president of each state university under the
jurisdiction of the Arizona board of regents.

(e)

(
i
)
One president of a community college who is
appointed by a statewide organization of community college presidents.

(f)

(
j
)
The chairperson of the governor's council on small
business, or its successor.

(g)

(
k
)
The chairperson of the workforce Arizona council
established by executive order pursuant to section 41-5401.

(h)

(
l
)
One member of the rural business development
advisory council established by section 41-1505 who is appointed by the
governor.

(i)

(
m
)
The president of a statewide organization of
incorporated cities and towns who is appointed by the governor.

(j)

(
n
)
The president of a statewide organization of
county boards of supervisors who is appointed by the governor.

C. For members who are appointed by the governor
pursuant to subsection B of this section, before appointment by the governor, a
prospective member of the board of directors shall submit a full set of
fingerprints to the governor for the purpose of obtaining a state and federal
criminal records check pursuant to section 41-1750 and Public Law 92-544. The
department of public safety may exchange this fingerprint data with the federal
bureau of investigation.

D. The following shall serve as technical advisors
to the board to enhance collaboration among state agencies to meet
infrastructure needs and facilitate growth opportunities throughout this state:

1. The director of environmental quality.

2. The state land commissioner.

3. The director of the department of revenue.

4. The director of the office of tourism.

5. The director of the department of transportation.

6. The director of water resources.

7. The director of the department of insurance and
financial institutions.

8. The director of the Arizona-Mexico
commission in the governor's office.

9. The director of the office of economic
opportunity.

10. An attorney who is appointed jointly by the
president of the senate and the speaker of the house of representatives and who
has experience litigating constitutional cases involving article IX, section 7
of the Arizona Constitution.

E. The governor shall appoint a cochairperson of the
board of directors from among the voting members. The board may
establish an executive committee consisting of the chairperson, the
cochairperson, the chief executive officer and additional voting members of the
board elected by the board. The chairperson may appoint
subcommittees as necessary.

F. The board may request assistance from
representatives of other state agencies to maximize economic development
opportunities by leveraging their access to strategic assets and planning
processes.

G. Board members serve without compensation but are
eligible for reimbursement of expenses pursuant to section 41-1504,
subsection E, paragraph 1.

H. A majority of the voting members, which must
include the chairperson and the chief executive officer, constitute a quorum
for the purpose of an official meeting for conducting business. An
affirmative vote of a majority of the members present at an official meeting is
sufficient for any action to be taken.

I. The board shall keep and maintain a complete and
accurate record of all of its proceedings. Public access to the
board's records is subject to section 41-1504, subsection
M. The public portion of board meetings shall be
recorded. These recordings shall be posted on the authority's
website within three business days after the meeting and shall remain on the
website pursuant to section 38-431.01, subsection K.

J. The board
of directors
,
executive committee, subcommittees and advisory councils are subject to title
38, chapter 3, article 3.1, relating to public meetings, except as follows:

1. In addition to section 38-431.03, the
board, executive committee and subcommittees may meet in executive session for
discussion about potential business development opportunities and strategies
that, if made public, could potentially harm the applicant's, the potential
applicant's or this state's competitive position.

2. Social and travel events related to the
expansion, attraction and retention of businesses are not public meetings if no
legal action involving a final vote or decision is taken.

3. Activities and events held in public for the
purpose of announcing the expansion, attraction and retention of projects are
not public meetings.

K. The board and the officers and employees of the
authority are subject to title 38, chapter 3, article 8, relating to conflicts
of interest.

L. The board of directors shall adopt written
policies, procedures and guidelines for standards of conduct, including a gift
policy, for members of the board and for officers and employees of the
authority.

M. The compensation of all officers and employees is
considered a public record pursuant to title 39, chapter 1.

N. The authority shall operate on the state fiscal
year. The board shall cause an annual audit to be conducted on or
before October 31 of each of the authority's public funds established by this
chapter by an independent certified public accountant. The board
shall immediately file a certified copy of the audit with the auditor
general. The auditor general may make such further audits and
examinations as necessary and may take appropriate action relating to the audit
or examination pursuant to chapter 7, article 10.1 of this title. If
the auditor general takes no further action within thirty days after the audit
is filed, the audit is considered to be sufficient.

O. All state agencies shall cooperate with the
authority and make available data pertaining to the functions of the authority
as requested by the authority.

P. The authority may not have more than one hundred
full-time employees, excluding any full-time employees that are
funded with monies other than state monies.
END_STATUTE

Sec. 2. Section 41-1504, Arizona Revised
Statutes, is amended to read:

START_STATUTE
41-1504.

Powers and duties; e-verify requirement

A. The board
of directors
, on
behalf of the authority, may:

1. Adopt and use a corporate seal.

2. Sue and be sued.

3. Enter into contracts as necessary to carry out
the purposes and requirements of this chapter, including intergovernmental
agreements pursuant to title 11, chapter 7, article 3 and interagency service
agreements as provided by section 35-148.

4. Lease real property and improvements to real
property for the purposes of the authority. Leases by the authority
are exempt from chapter 4, article 7 of this title, relating to management
of state properties.

5. Employ or retain legal counsel and other
consultants as necessary to carry out the purposes of the authority.

6. Develop and use written policies, procedures and
guidelines for the terms and conditions of employing officers and employees of
the authority and may include background checks of appropriate personnel.

B. The board
of directors
, on
behalf of the authority, shall:

1. Develop comprehensive long-range strategic
economic plans for this state and submit the plans to the governor.

2. Annually update a strategic economic plan for
submission to the governor.

3. Accept gifts, grants and loans and enter into
contracts and other transactions with any federal or state agency,
municipality, private organization or other source.

C. The authority shall:

1. Assess and collect fees for processing
applications and administering incentives.� The board shall adopt the manner of
computing the amount of each fee to be assessed.� Within thirty days after
proposing fees for adoption, the chief executive officer shall submit a
schedule of the fees for review by the joint legislative budget
committee. It is the intent of the legislature that a fee shall not
exceed one percent of the amount of the incentive.

2. Determine and collect registry fees for the
administration of the allocation of federal tax exempt industrial development
bonds and student loan bonds authorized by the authority. Such
monies collected by the authority shall be deposited, pursuant to sections 35-146
and 35-147, in an application fees fund.� Monies in the fund shall be
used, subject to annual appropriation by the legislature, by the authority to
administer the allocations provided in this paragraph and are exempt from the
provisions of section 35-190 relating to the lapsing of appropriations.

3. Determine and collect security deposits for the
allocation, for the extension of allocations and for the difference between
allocations and principal amounts of federal tax exempt industrial development
bonds and student loan bonds authorized by the authority. Security
deposits forfeited to the authority shall be deposited in the state general
fund.

4.
At the direction of the board

Subject to legislative appropriation for that specific purpose
,
establish and supervise the operations of full-time or part-time
offices in other states and foreign countries for the purpose of expanding
direct investment and export trade opportunities for businesses and industries
in this state if, based on objective research, the authority determines that
the effort would be beneficial to the economy of this state.�
On
or before December 1 of each year, the authority shall submit a report to the
joint legislative budget committee on the activities of each trade office
operated by the authority during the prior FISCAL year.

5. Establish a program by which entrepreneurs become
aware of permits, licenses or other authorizations needed to establish, expand
or operate in this state.

6. Post on its website on an annual basis a report
that contains at least the following information
,

and submit a copy to the governor, the president of the senate and the speaker
of the house of representatives:

(a) The cumulative progress made toward its goals
for direct job creation, capital investment and higher average wages and the
estimated number of indirect jobs and induced jobs created as a result of the
work and the programs of the authority.

(b) To the extent not prohibited by law, information
on each incentive application approved by the authority in the fiscal year,
including the amount of the incentive approved or awarded and the applicant's
activity that is projected or has been achieved, whichever is applicable, to
qualify for the incentive.

(c) Rural economic development outreach and impact
data.

(d) Small business outreach and impact data.

7. Develop and implement written policies and
procedures relating to the administration of grants from the Arizona competes
fund established by section 41-1545.01, including the following elements:

(a) Procedures for documenting grantee selection and
due diligence.

(b) Procedures for verification of information
submitted by grantees.

(c) Procedures for evaluating requests to amend
grant terms and for documenting decisions relating to those requests.

8. Notwithstanding any other law, on request of the
office of economic opportunity, disclose to the office of economic opportunity
applicant information for incentives administered, in whole or in part, by the
authority. Any confidentiality requirements provided by law
applicable to the information disclosed pursuant to this paragraph apply to the
office of economic opportunity.

9. On or before December 31 of each year, compile
the data collected pursuant to subsection F of this section and submit a report
to the governor, the president of the senate, the speaker of the house of
representatives and the secretary of state.

D. The authority, through the chief executive
officer, may:

1. Contract and incur obligations reasonably
necessary or desirable within the general scope of the authority's activities
and operations to enable the authority to adequately perform its duties.

2. Use monies, facilities or services to provide
matching contributions under federal or other programs that further the
objectives and programs of the authority.

3. Accept gifts, grants, matching monies or direct
payments from public or private agencies or private persons and enterprises for
the conduct of programs that are consistent with the general purposes and
objectives of this chapter.

4. Assess business fees for promotional services
provided to businesses that export products and services from this
state. The fees shall not exceed the actual costs of the services
provided.

5. Establish and maintain one or more accounts in
banks or other depositories, for public or private monies of the authority,
from which operational activities, including payroll, vendor and grant
payments, may be conducted. Individual funds that are established by
law under the jurisdiction of the authority may be maintained in separate
accounts in banks or other depositories, but shall not be commingled with any
other monies or funds of the authority.

E. The chief executive officer shall:

1. Hire employees and prescribe the terms and
conditions of their employment as necessary to carry out the purposes of the
authority. The board of directors shall adopt written policies,
procedures and guidelines, similar to those adopted by the department of
administration, regarding officer and employee compensation, observed holidays,
leave and reimbursement of travel expenses and health and accident
insurance. The officers and employees of the authority are exempt from
any laws regulating state employment, including:

(a) Chapter 4, articles 5 and 6 of this title,
relating to state service.

(b) Title 38, chapter 4, article 1 and chapter 5,
article 2, relating to state personnel compensation, leave and retirement.

(c) Title 38, chapter 4, article 2, relating to
reimbursement of state employee expenses.

(d) Title 38, chapter 4, article 4, relating to
health and accident insurance.

2. Maintain three full-time employees to serve as
advocates for small and rural businesses on economic development and regulatory
matters before cities, towns, counties or state agencies. Two of the
full-time employees shall be dedicated to small business growth, support
and regulation, one of whom shall serve as a small business ombudsman.� One of
the full-time employees shall be dedicated to rural economic development.

3. On a quarterly basis, provide public record data
in a manner prescribed by the department of administration related to the
authority's revenues and expenditures for inclusion in the comprehensive
database of receipts and expenditures of state monies pursuant to section 41-725.

F. On or before September 30 of each year, each
city, town and county in this state shall submit to the authority the city's,
town's or county's statistics for the preceding fiscal year that include all of
the following:

1. The average time from the submission of an
initial building permit application to a certificate of occupancy.

2. The average time from the submission of a zoning
application to zoning approval.

3. The average time from the submission of a final
plat to the recordation of the final plat.

4. Any other statistics as determined by the
authority or the municipality time frames advisory committee established by
section 41-1527 relating to municipal and county support for economic
development projects.

G. In addition to any other requirement, in order to
qualify for any grant, loan, reimbursement, tax incentive or other economic
development incentive pursuant to this chapter, an applicant that is an
employer must register with and participate in the e-verify program in
compliance with section 23-214. The authority shall require
verification of compliance with this subsection as part of any application
process.

H. Notwithstanding any other law, the authority is
subject to chapter 3.1, article 1 of this title, relating to risk management.

I. The authority is exempt from title 18, chapter 1,
articles 1 and 2, relating to statewide information technology. The
authority shall adopt policies, procedures and guidelines regarding information
technology.

J. The authority is exempt from state general
accounting and finance practices and rules adopted pursuant to chapter 4,
article 3 of this title, but the board shall adopt written accounting
practices, systems and procedures for the economic and efficient operation of
the authority. The authority shall adopt policies pursuant to this
subsection that prohibit using state monies as defined in section 35-321
to provide business executives lodging, alcoholic beverages, personal
transportation or tickets to entertainment events for the purposes of
attracting businesses to this state.

K. The authority is exempt from section 41-712,
relating to the installation and maintenance of telecommunication systems.

L. The authority may lease or purchase motor
vehicles for use by employees to conduct business activities. The
authority is exempt from section 28-472, relating to the state motor
vehicle fleet, and title 38, chapter 3, article 10, relating to vehicle usage
and markings.

M. Any tangible or intangible record submitted to or
compiled by the board or the authority in connection with its work, including
the award of monies, is subject to title 39, chapter 1, unless an applicant
shows, or the board or authority determines, that specific information meets
either of the following:

1. If made public, the information would divulge the
applicant's or potential applicant's trade secrets, as defined in section 44-401.

2. If made public, the information could potentially
harm the applicant's, the potential applicant's or this state's competitive
position relating to potential business development opportunities and
strategies.

N. The authority is exempt from chapter 25, article
1 of this title, relating to government competition with private enterprise.
END_STATUTE

Sec. 3. Section 41-1545.01, Arizona Revised
Statutes, is amended to read:

START_STATUTE
41-1545.01.

Arizona competes fund

A. The Arizona competes fund is established
consisting of:

1. Withholding tax revenues allocated to the fund
from the job creation withholdings clearing account pursuant to section 43-409,
subsection B, paragraph 2.

2. Any other amounts dedicated to the fund by law.

3. Gifts, grants and other donations received for
that purpose.

4. Any available monies received from the United
States government, including monies from the American recovery and reinvestment
act of 2009 (P.L. 111-5).

B. Monies credited to the fund may be deposited in
the state treasury or in a bank or other depository pursuant to section 41-1504,
subsection D, paragraph 5.

C. The chief executive officer shall administer the
fund.� On notice from the chief executive officer, the state treasurer shall
invest and divest any monies in the fund deposited in the state treasury as
provided by section 35-313, and monies earned from investment shall be
credited to the fund.� Monies in the fund are exempt from the provisions of
section 35-190 relating to lapsing of appropriations.

D.
subject to legislative
appropriation,
the chief executive officer shall use monies in the fund
exclusively for the purposes of this article.
END_STATUTE

Sec. 4. Section 41-1545.05, Arizona Revised
Statutes, is amended to read:

START_STATUTE
41-1545.05.

Program termination

The program established by this article ends on July 1,
2026

2030
.
END_STATUTE

Sec. 5.
Retroactivity

Section 41-1545.05, Arizona Revised
Statutes, as
amended by this act, applies
retroactively to from and after June 30, 2026.