2026-2027; revenue.

HB4151 - 572R - H Ver

House Engrossed

2026-2027; revenue.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 4151

AN
ACT

amending section
42-5041, Arizona Revised Statutes; relating to taxation
.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section
1. Section 42-5041, Arizona Revised Statutes, is amended to read:

START_STATUTE
42-5041.

Assessment of fees; integrated tax system modernization project;
fund

A. From and after June 30, 2022 through June 30,
2028

2029
, the department shall assess and
collect fees from counties, cities, towns, councils of governments and regional
transportation authorities as determined by the director and as provided by
this section to implement an integrated tax system modernization project at the
department.

B. From and after June 30, 2022 through June 30,
2028

2029
, a fee is assessed to each
county, city and town that receives state shared revenues pursuant to section
42-5029 or 43-206, to each council of governments that receives
revenues pursuant to
section

sections
42-6105

and 42-6105.01
and to each regional transportation
authority located in a county with a population of more than eight hundred
thousand persons that receives revenues pursuant to section 42-6106.

C. The department shall assess the fees under
subsection

subsections
A and B of this
section not later than October 31 each year, and the fees are payable
immediately on assessment. If a county, city, town, council of
governments or regional transportation authority fails to pay the fees in full
on or before December 31, the department shall notify the state treasurer who
shall withhold the delinquent amount from the distribution of monies to the
affected county, city or town pursuant to sections 42-5029 and 43-206,
from the distribution of monies to the affected council of governments pursuant
to
section

sections
42-6105
and 42-6105.01
and from the distribution of monies to the
affected regional transportation authority pursuant to section 42-6106,
and who shall continue to withhold monies until the entire amount of the
assessment has been satisfied.

D. Counties, cities and towns may meet their cost
sharing obligation from any source of county, city or town revenue designated
by the appropriate county, city or town. The county sources may
include monies of any countywide special taxing jurisdiction in which the board
of supervisors serves as the board of directors.

E. From and after June 30, 2022 through June 30,
2028

2029
, pursuant to section 42-5029.02,
the department shall transfer an amount from monies collected pursuant to
section 42-5010.01 and section 42-5155, subsection E as determined
by the director to implement the integrated tax system modernization project at
the department.� The amount transferred pursuant to this subsection shall be
the actual reasonable costs incurred by the department for integrated tax
system modernization upgrades related to the taxes authorized and levied
pursuant to section 42-5010.01 and section 42-5155, subsection E.

F. From and after June 30, 2022 through June 30,
2028

2029
, pursuant to section 36-2856,
subsection B, paragraph 2, the state treasurer shall transfer an amount from
monies collected pursuant to section 42-5452 as determined by the
director to implement the integrated tax system modernization project at the
department.� The amount transferred pursuant to this subsection shall be the
actual reasonable costs incurred by the department for integrated tax system
modernization upgrades related to the tax authorized and levied by section 42-5452.

G. All monies paid to the department or withheld by
the state treasurer for the fees assessed pursuant to subsection B of this
section or transferred pursuant to subsections E and F of this section shall be
credited to the department of revenue integrated tax system project fund
established by subsection H of this section.

H. The department of revenue integrated tax system
project fund is established consisting of monies deposited
in
or
transferred to the fund pursuant to this section.� The director shall
administer the fund.� Monies in the fund are subject to legislative
appropriation.� The director shall use monies in the fund solely for the
administrative, development and other operating costs incurred in implementing
the integrated tax system modernization project at the department.
END_STATUTE

Sec. 2.
Legislative intent

The legislature intends:

1. That in fiscal year
2026-2027 the fee prescribed in section 42-5041, subsection B,
Arizona Revised Statutes, as amended by this act, be assessed and collected
pursuant to the following guidelines:

(
a
) The
total amount of fees for all counties, cities, towns, councils of governments
and regional transportation authorities may not exceed $6,286,300 in fiscal
year 2026-2027.

(
b
) The
share of fees assessed to all counties pursuant to subdivision (
a
) of this� paragraph shall be in proportion to the aggregate
amount of monies distributed to counties for the fiscal year two years
preceding the current fiscal year pursuant to sections 42-5029, 42-6103,
42-6107, 42-6108, 42-6108.01, 42-6109, 42-6109.01,
42-6110, 42-6111 and 42-6112, Arizona Revised Statutes, as a
percentage of aggregate distributions to all counties, cities, towns, councils
of governments and regional transportation authorities located in a county with
a population of more than eight hundred thousand persons for the fiscal year
two years preceding the current fiscal year pursuant to sections 42-5029,
42-6001, 42-6103, 42-6105, 42-6105.01, 42-6106,
42-6107, 42-6108, 42-6108.01, 42-6109, 42-6109.01,
42-6110, 42-6111, 42-6112 and 43-206, Arizona Revised
Statutes.

(
c
) The
share of fees assessed to all cities and towns pursuant to subdivision (
a
) of this paragraph shall be in proportion to the aggregate
amount of monies distributed to cities and towns for the fiscal year two years
preceding the current fiscal year pursuant to sections 42-5029, 42-6001
and 43-206, Arizona Revised Statutes, as a percentage of aggregate
distributions to all counties, cities, towns, councils of governments and
regional transportation authorities located in a county with a population of more
than eight hundred thousand persons for the fiscal year two years preceding the
current fiscal year pursuant to sections 42-5029, 42-6001, 42-6103,
42-6105, 42-6105.01, 42-6106, 42-6107, 42-6108,
42-6108.01, 42-6109, 42-6109.01, 42-6110, 42-6111,
42-6112 and 43-206, Arizona Revised Statutes.

(
d
) The
share of fees assessed to all councils of governments pursuant to subdivision (
a
) of this paragraph shall be in proportion to the aggregate
amount of monies distributed to all councils of governments for the fiscal year
two years preceding the current fiscal year pursuant to section 42-6105,
Arizona Revised Statutes, as a percentage of aggregate distributions to all
counties, cities, towns, councils of governments and regional transportation
authorities located in a county with a population of more than eight hundred
thousand persons for the fiscal year two years preceding the current fiscal
year pursuant to sections 42-5029, 42-6001, 42-6103, 42-6105,
42-6105.01, 42-6106, 42-6107, 42-6108, 42-6108.01,
42-6109, 42-6109.01, 42-6110, 42-6111, 42-6112
and 43-206, Arizona Revised Statutes.

(
e
) The
share of fees assessed to all regional transportation authorities located in a
county with a population of more than eight hundred thousand persons pursuant
to subdivision (
a
) of this paragraph shall be
in proportion to the aggregate amount of monies distributed to all regional
transportation authorities located in a county with a population of more than
eight hundred thousand persons for the fiscal year two years preceding the
current fiscal year pursuant to section 42-6106, Arizona Revised Statutes,
as a percentage of aggregate distributions to all counties, cities, towns,
councils of governments and regional transportation authorities located in a
county with a population of more than eight hundred thousand persons for the
fiscal year two years preceding the current fiscal year pursuant to sections 42-5029,
42-6001, 42-6103, 42-6105, 42-6105.01, 42-6106,
42-6107, 42-6108, 42-6108.01, 42-6109, 42-6109.01,
42-6110, 42-6111, 42-6112 and 43-206, Arizona Revised
Statutes.

(
f
) Except
as provided by sections 42-5033 and 42-5033.01, Arizona Revised
Statutes, the population of a county as determined by the most recent United
States decennial census plus any revision to the decennial census certified by
the United States census bureau shall be used as the basis for apportioning
monies pursuant to subdivision (
b
) of this
paragraph.

(
g
) Except
as provided by sections 42-5033 and 42-5033.01, Arizona Revised
Statutes, the population of a city or town as determined by the most recent
United States decennial census plus any revision to the decennial census
certified by the United States census bureau shall be used as the basis for
apportioning monies pursuant to subdivision (
c
)
of this paragraph.

2. That in fiscal year 2026-2027
the transfer prescribed in section 42-5041, subsection E, Arizona Revised
Statutes, as amended by this act, not exceed $762,300.

3. That in fiscal year
2026-2027 the transfer prescribed in section 42-5041, subsection F,
Arizona Revised Statutes, as amended by this act, not exceed $169,800.

4. That in fiscal year
2026-2027, the aggregate amount of monies distributed pursuant to
sections 42-6105 and 42-6105.01, Arizona Revised Statutes, is the
aggregate amount of monies distributed during fiscal years 2024-2025 and
2025-2026 pursuant to section 42-6105, Arizona Revised Statutes, and the
aggregate amount of monies distributed during fiscal year 2025-2026
pursuant to section 42-6105.01, Arizona Revised Statutes.

5. That in fiscal year
2027-2028, the aggregate amount of monies distributed pursuant to
sections 42-6105 and 42-6105.01, Arizona Revised Statutes, is the
aggregate amount of monies distributed during fiscal year 2025-2026
pursuant to section 42-6105, Arizona Revised Statutes, and the aggregate
amount of monies distributed during fiscal years 2025-2026 and 2026-2027
pursuant to section 42-6105.01, Arizona Revised Statutes.