2026-2027; state budget implementation.

Plain English Breakdown

The official status indicates a gubernatorial veto; whether this bill became law depends on if the legislature successfully overrode that veto, which is not confirmed in the provided text.

HB4140: State Budget Rules for 2026-2027

This bill directs how federal money is used and changes rules for the budget stabilization fund while requiring a report on government savings.

What This Bill Does

• Requires all unrestricted federal monies received between July 1, 2026, and June 30, 2027, to be deposited in the state general fund.
• Directs that these federal monies must be used to pay for essential government services.
• Removes the requirement for lawmakers to move money into or out of the budget stabilization fund for fiscal years 2026-2027 and 2027-2028.
• Allows the budget stabilization fund to hold more than ten percent of state general fund revenue during fiscal year 2026-2027.
• Prohibits moving surplus money from the budget stabilization fund into the state general fund for fiscal year 2026-2027.
• Requires the governor's 2027-2028 budget submission to include a report showing how $100,000,000 in savings will be reached through the government efficiency and reform initiative.

Who It Names or Affects

• The state general fund.
• Essential government services paid for with federal monies.
• The budget stabilization fund managed by the state treasurer.
• State agencies involved in the government efficiency and reform initiative.
• The governor when submitting future budgets to the legislature.

Terms To Know

Unrestricted federal monies

Money sent by the U.S. government that Arizona can use for any purpose unless specified otherwise.

Budget stabilization fund

A savings account used to store extra state money during good years so it is available in hard times.

Essential government services

Basic operations and programs that the state must keep running, such as public safety or education.

Limits and Unknowns

• The governor vetoed this bill on May 5, 2026, so it did not become law unless lawmakers overrode the veto.
• The text does not list which specific programs count as essential government services.

Official Summary Text

HB4140 - 2026-2027; state budget implementation.

Current Bill Text

HB4140 - 572R - H Ver

House Engrossed

2026-2027; state
budget implementation.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 4140

AN
ACT

Appropriating monies; relating to IMPLEMENTATION
of budgetary revisions.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1.
Unrestricted
federal monies; essential government services; retroactivity

A. Any unrestricted federal
monies received by this state beginning July 1, 2026 through June 30, 2027
shall be deposited in the state general fund. The monies shall be
used to pay essential government services.

B. This section applies
retroactively to from and after June 30, 2026.

Sec. 2.
Budget stabilization fund; exceptions

Notwithstanding section 35-144,
Arizona Revised Statutes:

1. For fiscal years 2026-2027
and 2027-2028, the legislature is not required to appropriate monies to
or transfer monies from the budget stabilization fund.

2. For fiscal year 2026-2027,
the budget stabilization fund is not limited to ten percent of the state
general fund revenue for the fiscal year, and the state treasurer may not
transfer any surplus monies from the budget stabilization fund to the state
general fund.

Sec. 3.
Budget
submission; government efficiency and reform initiative; report

In furtherance of section 35-111,
Arizona Revised Statutes, the governor's budget submission to the legislature
for fiscal year 2027-2028 must include a full accounting of the monies
available for expenditure pursuant to any savings realized by the government
efficiency and reform initiative. The governor's budget submission
must include a report that demonstrates how the government efficiency and
reform initiative savings target of $100,000,000 will be accomplished and must
include a comprehensive list of component initiatives, by savings amount, for
each affected agency.