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HB4030 - 572R - H Ver
House Engrossed
rates; fees; taxes;
increase; moratorium
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 4030
AN
ACT
amending title 9, chapter 4, article 8,
arizona revised statutes, by adding section 9-500.54; repealing section 9-500.54,
Arizona Revised Statutes; amending title 11, chapter 2, article 4, arizona
revised statutes, by adding section 11-269.31; repealing section 11-269.31,
Arizona Revised Statutes; relating to municipal and county fees.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 9, chapter 4, article 8,
Arizona Revised Statutes, is amended by adding section 9-500.54, to read:
START_STATUTE
9-500.54.
Municipal fees; taxes; utility rates; increase; moratorium;
applicability; enforcement; definitions
A. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a municipality may not adopt, impose or collect any of the following:
1. A fee that is in an amount greater
than the amount that is authorized in the fee schedule that has been adopted by
the municipality as part of the municipality's 2025-2026 fiscal year
budget, including any fee schedule that is adopted by an ordinance or
resolution or that is incorporated by reference.
2. Any transaction privilege tax or
surcharge increase beyond the rate that is in effect on June 3o, 2026.
3. A rate that is imposed for utility
service provided by the municipality and that is greater than the utility rate
that is authorized as part of the municipality's 2025-2026 fiscal year
budget or utility rate schedule
, except that a
municipality that has not raised utility rates by a cumulative amount of twelve
percent or more in the preceding four fiscal years may increase utility rates
by an amount that is not more than the rate of inflation as determined by the
consumer price index as published by the United states department of labor,
bureau of labor statistics.
B. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a municipality may not adopt or impose a new tax classification or
expand the tax base to additional taxpayers.
C. If a municipality has not adopted
a consolidated or comprehensive fee, tax or utility rate schedule as part of
the municipality's 2025-2026 fiscal year budget, the applicable fee, tax
or utility rate, for the purposes of the fee, tax or utility rate limits
prescribed in subsection A of this section, shall be the highest fee, tax or
utility rate that is imposed by the municipality at any time during the 2025-2026
fiscal year.
D. A municipality may not circumvent
this section by doing any of the following:
1. Renaming, reclassifying or
restructuring a fee, tax or utility rate.
2. Altering methodologies,
assumptions, service areas, customer classes or cost-allocation
practices.
3. Imposing a new charge that is
substantially similar in effect to an increase in a fee, tax or utility rate
that is prohibited by this section.
4. Adopting or amending a fee, tax or
utility rate schedule during the 2025-2026 fiscal year for the primary
purpose of avoiding the application of this section.
E. This section applies to all
municipal fees, taxes and utility rates, regardless of the name or title, that
are imposed as a condition of any of the following:
1. Conducting a taxable transaction.
2. Receiving a governmental service.
3. Obtaining a permit, license,
approval or inspection.
4. Connecting to or receiving
municipally provided utility service.
5. Development, construction,
occupancy, operation or change in use.
F. This section does not apply to
any of the following:
1. an increase in a municipal tax if all of the
following apply:
(
a
) The tax
increase is approved by the qualified electors of the municipality.
(
b
) At least
sixty percent of the votes cast at the election are cast in favor of the
measure.
(
c
) The
election is held on a consolidated election date in an even-numbered year
pursuant to section 16-204.
2. Ad valorem taxes or special
assessments levied to pay the principal of and the interest and redemption
charges on bonded indebtedness or other lawful long-term obligations
issued or incurred for a specific purpose.
3. Ad valorem taxes or assessments
levied by or for property improvement assessment districts, improvement
districts and other special purpose districts other than a municipality or
community college district.
4. The initial adoption of a
municipality's tax, fee or utility rate structure if the municipality was
incorporated within the two calendar years before the effective date of this
section. This section applies to the municipality described in this paragraph
after the municipality initially adopts the tax, fee or utility rate STRUCTURE.
G. This section does not prohibit any
of the following:
1. The expiration, reduction or
elimination of a fee, tax or utility rate.
2. The collection of a fee, tax or
utility rate that is at or below the amount that is authorized pursuant to
subsections A and C of this section.
3. An increase in total revenue that
results solely from an increase in service demand, usage or growth in the tax
base.
4. the adoption, imposition or
collection of a new or increased rate or fee pursuant to section 9-463.05
or 9-511.01 to fund the acquisition and delivery of new or additional water
resources, including the cost of any previously incurred or future debt service
obligations, needed storage, treatment or delivery infrastructure and operating
and maintenance costs.
H. A fee, tax or utility rate
adopted, imposed or collected that is in violation of this section is void. �A
municipality that adopts, imposes or collects a fee, tax or utility rate that
is in violation of this section is subject to enforcement pursuant to section
41-194.01.
I. A taxpayer, resident, business or
property owner that is aggrieved by a violation of this section may bring an
action for declaratory or injunctive relief in a court of competent
jurisdiction. The court may award reasonable attorney fees and costs to a prevailing
plaintiff.
J. For the purposes of this section:
1. "Fee" means any charge
imposed by a municipality that is not a tax or utility rate, regardless of the
name or title.
2. "Utility service":
(
a
) Means
municipally provided utility services.
(
b
) Includes
water, wastewater, stormwater, solid waste, electric, gas or similar services.
END_STATUTE
Sec. 2.
Delayed repeal
Section 9-500.54, Arizona
Revised Statutes, as added by this act, is repealed from and after June 30,
2030.
Sec. 3. Title
11, chapter 2, article 4, Arizona Revised Statutes, is amended by adding
section 11-269.31, to read:
START_STATUTE
11-269.31.
County fees; taxes; utility rates; increase; moratorium;
applicability; enforcement; definitions
A. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a county may not adopt, impose or collect any of the following:
1. A fee that is in an amount greater
than the amount that is authorized in the fee schedule that has been adopted by
the county as part of the county's 2025-2026 fiscal year budget,
including any fee schedule that is adopted by an ordinance or resolution or
that is incorporated by reference.
2. Any transaction privilege tax or
surcharge increase beyond the rate that is in effect on June 3o, 2026.
3. A rate that is imposed for utility
service provided by the county and that is greater than the utility rate that
is authorized as part of the county's 2025-2026 fiscal year budget or
utility rate schedule.
B. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a county may not adopt or impose a new tax classification or expand
the tax base to additional taxpayers.
C. If a county has not adopted a
consolidated or comprehensive fee, tax or utility rate schedule as part of the
county's 2025-2026 fiscal year budget, the applicable fee, tax or utility
rate, for the purposes of the fee, tax or utility rate limits prescribed in
subsection A of this section, shall be the highest fee, tax or utility rate
that is imposed by the county at any time during the 2025-2026 fiscal
year.
D. A county may not circumvent this
section by doing any of the following:
1. Renaming, reclassifying or
restructuring a fee, tax or utility rate.
2. Altering methodologies,
assumptions, service areas, customer classes or cost-allocation
practices.
3. Imposing a new charge that is
substantially similar in effect to an increase in a fee, tax or utility rate
that is prohibited by this section.
4. Adopting or amending a fee, tax or
utility rate schedule during the 2025-2026 fiscal year for the primary
purpose of avoiding the application of this section.
E. This section applies to all county
fees, taxes and utility rates, regardless of the name or title, that are
imposed as a condition of any of the following:
1. Conducting a taxable transaction.
2. Receiving a governmental service.
3. Obtaining a permit, license,
approval or inspection.
4. Connecting to or receiving county-provided
utility service.
5. Development, construction,
occupancy, operation or change in use.
F. This section does not apply to
any of the following:
1. an increase in a county tax if all
of the following apply:
(
a
) The tax
increase is approved by the qualified electors of the county.
(
b
) At least
sixty percent of the votes cast at the election are cast in favor of the
measure.
(
c
) The
election is held on a consolidated election date in an even-numbered year
pursuant to section 16-204.
2. Ad valorem taxes or special
assessments levied to pay the principal of and the interest and redemption
charges on bonded indebtedness or other lawful long-term obligations
issued or incurred for a specific purpose.
3. Ad valorem taxes or assessments
levied by or for property improvement assessment districts, improvement
districts and other special purpose districts other than a county or community
college district.
4. Ad valorem taxes levied by a
county for support of a school district.
G. This section does not prohibit any
of the following:
1. The expiration, reduction or
elimination of a fee, tax or utility rate.
2. The collection of a fee, tax or
utility rate that is at or below the amount that is authorized pursuant to
subsections A and C of this section.
3. An increase in total revenue that
results solely from an increase in service demand, usage or growth in the tax
base.
H. A fee, tax or utility rate
adopted, imposed or collected that is in violation of this section is void. A
county that adopts, imposes or collects a fee, tax or utility rate that is in
violation of this section is subject to enforcement pursuant to section 41-194.01.
I. A taxpayer, resident business or
property owner that is aggrieved by a violation of this section may bring an
action for declaratory or injunctive relief in a court of competent
jurisdiction. �The court may award reasonable attorney fees and costs to a
prevailing plaintiff.
J. For the purposes of this section:
1. "Fee" means any charge
imposed by a county that is not a tax or utility rate, regardless of the name
or title.
2. "Utility service":
(
a
) Means
county-provided utility services.
(
b
) Includes
water, wastewater, stormwater, solid waste, electric, gas or similar services.
END_STATUTE
Sec. 4.
Delayed repeal
Section 11-269.31, Arizona
Revised Statutes, as added by this act, is repealed from and after June 30,
2030.
Sec. 5.
Severability
If a provision of this act or its
application to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of the act that can be given effect
without the invalid provision or application, and to this end the provisions of
this act are severable.
Sec. 6.
Legislative findings and
intent
A. The
legislature finds that:
1. Arizona residents and
businesses continue to experience elevated inflation and rising costs,
including housing, utilities, construction, labor and essential services,
placing increased pressure on household budgets and economic activity.
2. Local government taxes,
fees and utility rates materially affect affordability, business formation,
housing development and the overall cost of living throughout this state.
3. Municipalities and
counties regularly adopt annual budgets, tax rates and fee and utility rate
schedules, which reflect policy judgments about reasonable and necessary
charges for services at a given point in time.
4. Advancements in
technology, including artificial intelligence and automation, present
unprecedented opportunities for local governments to streamline operations,
improve service delivery, increase productivity, and reduce the need for ongoing
growth in full-time staffing levels.
5. This state has
recognized the importance of operational efficiency, including through
executive initiatives such as the Arizona capacity and efficiency initiative,
which emphasizes identifying efficiencies, modernizing operations and improving
government performance, recognizing potentially hundreds of millions of dollars
in cost savings that should be passed on to taxpayers.
6. Temporary restraint on
local fee, tax and utility rate increases encourages local governments to
prioritize efficiency, innovation and responsible fiscal management, while
preserving the ability to meet service demands through improved processes and
increased service volume.
7. Local governments retain
discretion to manage expenditures, staffing, service levels and capital
planning within existing fee, tax and utility rate structures during the
moratorium period.
B. It is the intent of the
legislature to:
1. Provide temporary relief
to residents and businesses by stabilizing locally imposed fees, taxes and
utility rates during a period of elevated inflation and economic uncertainty.
2. Encourage local
governments to pursue efficiencies and modernization before increasing costs
borne by residents and businesses.
3. Preserve predictability
and transparency in local government fee, tax and rate structures by anchoring
charges to duly adopted budgets and schedules.
4. Respect constitutional
limitations, existing contractual obligations and voter-approved authorities,
while promoting affordability and economic stability statewide.