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HB2858 - 572R - I Ver
REFERENCE TITLE:
state contracting; businesses
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2858
Introduced by
Representative
Blackman
AN
ACT
Amending title 41, chapter 23, article 1,
Arizona Revised Statutes, by adding section 41-2505; relating to procurement.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 41, chapter 23, article 1,
Arizona Revised Statutes, is amended by adding section 41-2505, to read:
START_STATUTE
41-2505.
Contracts; in-state; purchasing agency; definitions
A. NOTWITHSTANDING any other law, For
contracts issued pursuant to section 41-2533, an Arizona bidder shall be given
a one percent increase over an out-of-state bidder if there are two or more low
responsible and responsive bids from qualified bidders that are identical in
all material respects, including price, quality, delivery terms, warranties,
past performance and compliance with specifications.
B. A purchasing agency shall add a
percentage increase to the bid of an out-of-state bidder equal to the
percentage, if any, of the preference given to the bidder in the state in which
the bidder resides. On or before january 1 of each year, the department shall
publish a list of states that give preference to in-state bidders with the
percentage increase applied in each state. A purchasing agency may rely on the
names of states and percentages published in determining the lowest responsible
bidder without incurring any liability to any bidder.
C. The percentage increase authorized
by this section applies solely for purposes of bid evaluation and does not
require the award of a purchase order to any bidder.
D. The percentage increase authorized
by this section may not be applied if it would result in a higher actual price
when determining the true value paid by this state for a contract.
E. This section does not apply to
purchase orders issued by a purchasing agency that, in the aggregate, exceed
$1,500,000 in a fiscal year.
F. For the purposes of this section:
1. "arizona bidder" means a
bidder who meets all of the following:
(
a
) Is
authorized to transact business in this state.
(
b
) Has paid
all assessed taxes in this state.
(
c
) Maintains
its headquarters in this state for at least twelve consecutive months before
submitting a bid.� The requirement of this subdivision does not apply if the
bidder employs five hundred or more full-time residents of this state who are
provided health care benefits through the employer.
2. "headquarters" means a
principal central administrative office where primary headquarters-related
functions and services are performed, including financial, personnel,
administrative, legal, planning and similar business functions.
3. "purchase order" means a
written or electronic authorization issued by a purchasing agency to a vendor
that obligates state monies for acquiring goods or services, whether issued
under a statewide, agency, or cooperative contract or as a stand-alone
procurement.
END_STATUTE
Sec. 2.
Legislative findings
The
legislature finds:
1. Arizona small and
locally based businesses are a foundational component of this state's economy,
employing a substantial portion of Arizona's private sector workforce and
contributing to job creation and long-term economic stability in this state.
2. In Arizona, small
businesses account for approximately ninety-nine percent of all
businesses in this state and employ approximately one million one hundred
thousand Arizonans, representing about forty-two percent of the state's
workforce.
3. These businesses
contribute substantially to job creation, especially in rural Arizona, with
small enterprises generating tens of thousands of new jobs and serving as a
critical engine of employment growth, innovation and economic resilience.
4. The economic impact of
Arizona-based small businesses extends beyond employment, supporting state and
local tax revenues, consumer spending and community stability throughout this
state.
5. Ensuring that state
procurement dollars circulate within Arizona's economy enhances long-term
economic stability and opportunity for Arizona business owners and workers
statewide.
6. Ensuring meaningful
participation by Arizona-based businesses in state procurement strengthens the
state's supplier base, enhances accountability and supports employers that pay
state and local taxes and that employ Arizona residents.
7. This state has a
legitimate interest in encouraging qualified Arizona businesses to compete for
state procurement opportunities, without restricting competition or excluding
qualified bidders from other jurisdictions.
8. Reciprocal preference
provisions are designed to neutralize interstate procurement advantages,
preventing Arizona taxpayers from being disadvantaged by procurement
preferences adopted in other states while maintaining an open and competitive
bidding process consistent with the United State Constitution's commerce clause
and Arizona Constitution.
9. These findings and
policies are consistent with the state's authority to structure procurement in
a manner that protects taxpayers, promotes fiscal responsibility and ensures
equitable treatment of in-state businesses, while respecting constitutional
limits and the principles of interstate commerce.