Official Summary Text
SB1840 - 572R - Senate Fact Sheet
Assigned to
ATT������������������������������������������������������������������������������������������������������������������������������ AS
VETOED
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
VETOED
FACT SHEET FOR
H.B.
4147/S.b. 1840
2026-2027;
human services.
Purpose
Makes statutory
and session law changes relating to human services necessary to implement the
FY 2027 state budget.
Background
The Arizona
Constitution prohibits substantive law from being included in the general
appropriations, capital outlay appropriations and supplemental appropriations
bills. However, it is often necessary to make statutory and session law changes
to effectuate the budget. Thus, separate bills called budget reconciliation
bills (BRBs) are introduced to enact these provisions. Because BRBs contain
substantive law changes, the Arizona Constitution provides that they become
effective on the general effective date, unless an emergency clause is enacted.
H.B. 4147 contains
the budget reconciliation provisions for changes relating to human services.
Provisions
Supplemental
Nutrition Assistance Program (SNAP) Payment Error Rate
1.
Requires the Department of Economic Security (DES), by December 30,
2030, to reduce the SNAP payment error rate to no more than three percent.
2.
Requires DES, beginning in FY 2027, to submit a quarterly report to the
Legislature, within 30 days after the end of the quarter, detailing DES's
monthly progress towards reducing the payment error rate, including strategies
used and barriers encountered.
3.
Requires
DES, if it fails to meet the annual interim targets or final target, to:
a)
submit a corrective action plan to the Legislature within 60 days that
includes an analysis of why the targets were not met and timeliness for
correcting the payment error rate;
b)
pay 50 percent of any federal liabilities imposed due to the excess
payment error rate, with the remaining federal liabilities being paid out of
the state General Fund; and
c)
implement
a corrective action plan.
4.
Requires the Auditor General, by November 15, 2027, to complete a
special audit determining what factors contributed to the payment error rate,
including recommendations to reduce the payment error rate.
5.
Specifies that, if DES fails to comply with the Auditor General's
corrective plan, DES administrative funding is reduced by 10 percent until
resolved.
6.
Directs DES to implement the Auditor General's recommendations within 12
months, unless the recommendations are waived by the Joint Legislative Budget
Committee.
7.
Allows the Auditor General to request that DES submit a written status
report regarding implementation of the special audit recommendations.
8.
Allows the Legislature to allocate additional funding for program
improvements if DES corrects the payment error rate ahead of schedule.
9.
Repeals SNAP payment error rate requirements on January 1, 2033.
SNAP Fund
10.
Establishes
the SNAP Fund consisting of monies collected by DES from federal deposits under
SNAP.
11.
Specifies
that monies in the SNAP Fund are continuously appropriated.
12.
Requires
DES to deposit all federal monies received under SNAP, including the federal administrative
share and the federal benefit share, in the SNAP Fund before expenditure.
SNAP
Eligibility and Enrollment
13.
Prohibits
DES from establishing a gross income limit of more than 185 percent of the
federal poverty level for SNAP recipients who are in eligible households that
are categorically eligible for public assistance or general assistance.
14.
Requires DES, when
determining or evaluating SNAP eligibility, to:
a)
enter into a data matching agreement with the Arizona Department of
Revenue (ADOR) to identify households with lottery or gambling winnings of
$3,000 or more; and
b)
treat
the data obtained as verified on receipt, as permissible under federal law.
15.
Requires
DES, to the extent that ADOR data is not verified on receipt, to refer
households with lottery or gambling winnings that are equal to or greater than
the resource limit for elderly or disabled households as defined under federal
law to DES for further investigation.
16.
Requires DES, on at least a
monthly basis, to review information that identifies individuals who have had a
change in circumstances that may affect SNAP eligibility as provided by:
a)
the Department of Health Services (DHS); and
b)
the
Arizona Department of Corrections, Rehabilitation and Reentry.
17.
Requires DES, on at least a
monthly basis, to review DES information that identifies individuals who have
had a change in circumstances that may affect SNAP eligibility, including
potential changes in residency as identified by out-of-state electronic benefit
transfer (EBT) card transactions.
18.
Requires
DES, on at least a quarterly basis, to review DES's information that identifies
individuals who have had a change in circumstances that may affect SNAP
eligibility, including potential changes in residency, unemployment benefits,
employment status or wages.
19.
Requires
DES, on at least a quarterly basis, to review information that is provided by
ADOR and that identifies households that have had a change in circumstances
that may affect SNAP eligibility, including potential changes in income, wages
or residency, as identified by tax records.
20.
Requires DES to post on the
DES website on a quarterly basis the following aggregate amounts obtained from
noncompliance and fraud investigations related to SNAP, excluding confidential
and personally identifiable information:
a)
the number of SNAP cases that were investigated for international
program violations or fraud;
b)
the number of SNAP cases that were referred to the Attorney General's
Office for prosecution;
c)
the amount of improper payments and expenditures;
d)
the amount of monies recovered;
e)
the amount of monies spent for improper payments and ineligible
recipients as a percentage of cases that were investigated and reviewed; and
f)
the
amount of monies spent by the EBT card that occurred outside of Arizona,
categorized by state.
21.
Requires DHS and DES, to
assess a recipient's continued eligibility for SNAP, to review:
a)
earned income information, death registration information, incarceration
records, supplemental security income information, beneficiary records,
earnings information and pension information that is maintained by the U.S.
Social Security Administration;
b)
income and employment information that is maintained in the National
Directory of New Hires database and child support enforcement data that is
maintained by the U.S. Department of Health and Human Services;
c)
payment and earnings information that is maintained by the U.S.
Department of Housing and Urban Development; and
d)
national
fleeing felon information that is maintained by the Federal Bureau of
Investigation.
22.
Requires
DES to review an individual's case if DES receives information that identifies
an individual who is enrolled in SNAP and indicates a change in circumstances
that may affect that individual's SNAP eligibility.
EBT
Transactions
23.
Requires
DES to use the data from an EBT card to identify any individual who has made a
purchase exclusively out-of-state over a 90-day period.
24.
Requires
DES to contact the identified individual within 30 days to determine whether
that individual resides in Arizona.
25.
Requires
DES to terminate assistance, including SNAP benefits, to the individual within
30 days after contact if the individual does not reside in Arizona.
26.
Requires
DES, within 15 days after the individual's assistance has been terminated, to
refer the individual to the U.S. Attorney's Office for the district of Arizona.
Temporary
Assistance for Needy Families (TANF)
27.
Continues to require DES in
FY 2027 to screen and test each adult recipient who:
a)
is eligible for TANF cash benefits; and
b)
DES
has reasonable cause to believe engages in the illegal use of controlled
substances.
28.
Continues
to render any TANF recipient who tests positive for the use of a controlled
substance that was not prescribed for the recipient by a licensed health care
provider as ineligible to receive TANF benefits for a period of one year.
Miscellaneous
29.
Defines
terms.
30.
Becomes
effective on the general effective date.
Governor's Veto Message
The Governor
indicates in her
veto
message
that H.B. 4147, and this version of
the FY 2027 state budget as a whole, would cause Arizona to default on its debt
obligations, endanger vulnerable children, cut public safety funding and
provide tax breaks for billionaires, data centers and special interests. The
Governor outlines her specific concerns, including cuts to funding for
specified agencies and programs, and invites the Legislature to return to the
negotiating table.
House Action
����������������������������������������������������������
Senate
Action
APPROP�������� 4/28/26����� DP������ 11-7-0-0������������ ATT���������������� 4/28/26����� DP��������� 6-4-0
3
rd
Read��������� 4/29/26����������������� 33-20-7�������������� 3
rd
Read��������� 5/4/26���������������������� 16-12-2
(H.B. 4147 was substituted for S.B.
1840 on 3rd Read)
Vetoed by the
Governor 5/5/26
Prepared by Senate Research
May 7, 2026
MM/SDR/hk
Current Bill Text
Read the full stored bill text
SB1840 - 572R - S Ver
Senate Engrossed
2026-2027; human
services
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1840
AN
ACT
Amending title 46, chapter 2, article 2,
Arizona Revised Statutes, by adding sections 46-232, 46-233, 46-234
and 46-235; Repealing section 46-235, Arizona Revised Statutes;
amending section 46-297.01, Arizona Revised Statutes; relating to human
services.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 46, chapter 2, article 2,
Arizona Revised Statutes, is amended by adding sections 46-232, 46-233,
46-234 and 46-235, to read:
START_STATUTE
46-232.
Supplemental nutrition assistance program fund; expenditure
authority
The supplemental nutrition assistance program
fund is established consisting of monies collected by the department of
economic security from federal deposits as authorized by 7 Code of Federal
Regulations parts 271 through 285. The department of economic
security shall administer the fund.� Monies in the fund are continuously
appropriated. The department of economic security shall deposit all
federal monies received under the supplemental nutrition assistance program,
including the federal administrative share and the federal benefit share, in
the fund before expenditure.
END_STATUTE
START_STATUTE
46-233.
Supplemental nutrition assistance program; categorical
eligibility; gross income limit
The department of economic security may not
establish a gross income limit of more than one hundred eighty-five
percent of the federal poverty level for supplemental nutrition assistance
program recipients who are categorically eligible pursuant to 7 Code of Federal
Regulations section 273.2(
j
)(2).
END_STATUTE
START_STATUTE
46-234.
Supplemental nutrition assistance program; eligibility
evaluations; public posting; definitions
A. To determine or evaluate SNAP
eligibility, the department of economic security shall:
1. Enter into a data matching
agreement with the department of
Revenue to identify
households with lottery or gambling winnings of $3,000 or more and, to the
extent permissible under federal law, to treat the data obtained as verified on
receipt. To the extent the data may not be verified on receipt, the
department of economic security shall refer those households with lottery or
gambling winnings that are equal to or greater than the resource limit for
elderly or disabled households as defined in 7 Code of Federal Regulations
section 273.8(
b
) to the department of
economic security for further investigation.
2. On at least a monthly basis,
review information that is provided by the department of health services and
that identifies individuals who have had a change in circumstances that may
affect SNAP eligibility.
3. On at least a quarterly basis,
review
the department'S information that identifies
individuals who have had a change in circumstances that may affect SNAP
eligibility, including a CHANGE in unemployment benefits, employment status or
wages.
4. On
at least a monthly basis, review the
department's information
that identifies individuals who have had a change in circumstances that may
affect SNAP eligibility, including potential changes in residency as identified
by out-of-state electronic benefit transfer card transactions.
5. On at least a monthly basis,
review information that is provided by the state DEPARTMENT of corrections and
that identifies individuals who have had a change in circumstances that may
affect SNAP eligibility.
6. On at least a quarterly basis,
review information that is provided by the department of revenue and that
identifies households that have had a change in circumstances that may affect
SNAP eligibility, including potential changes in income, wages or residency as
identified by tax records.
7. On at least a quarterly basis,
post on the department's public website the following aggregated amounts that
were obtained from noncompliance and fraud investigations related to SNAP,
excluding confidential and personally identifiable information:
(
a
) The number
of SNAP cases that were investigated for intentional program violations or
fraud.
(
b
) The number
of SNAP cases that were referred to the attorney general's office for
prosecution.
(
c
) The amount
of Improper payments and expenditures.
(
d
) The amount
of monies recovered.
(
e
) The amount
of monies spent for improper payments and ineligible RECIPIENTS as a percentage
of cases that were investigated and reviewed.
(
f
) The amount
of monies spent by electronic benefit card transactions that occurred outside
of this state, categorized by state.
B. On at least a monthly basis, the
department of health services and the department of
economic
security shall review the following information from federal sources to assess
a recipient's continued eligibility for SNAP:
1. Earned income information, death
register information, incarceration records, supplemental security income
information, beneficiary records, earnings information and pension information
that is maintained by the United States social security administration.
2. Income and employment information
that is maintained in the national directory of new hires database and child
support enforcement data that is maintained by the united states department of
health and human services.
3. Payment and earnings information
that is maintained by the united states department of housing and urban
development.
4. National
fleeing felon information that is maintained by the United States federal
bureau of investigation.
C. If
the department receives information that identifies an individual who is
enrolled in SNAP and that indicates a change in circumstances that may affect
that individual's SNAP eligibility, the department shall review that
individual's case.
D. For the purposes of this section:
1. "Department" means the
department of economic security.
2. "SNAP" means the
supplemental nutrition assistance program.
END_STATUTE
START_STATUTE
46-235.
Payment error rate; reduction; quarterly reports; requirements;
auditor general
A. On or before December 30, 2030,
the department of economic security shall reduce the supplemental nutrition
assistance program's payment error rate as reported by the United States
department of agriculture to not more than three percent.
B. Beginning in fiscal year
2026-2027 and each fiscal year thereafter, the department shall
submit
a quarterly report to the legislature
within thirty days after the end of the quarter that details the
department's
monthly progress towards reducing the
payment error rate and that includes strategies and barriers that may be
present in reducing the payment error rate.
C. If the department fails to meet
annual interim targets established by rule or the final target as prescribed in
subsection A of this section, the department shall:
1. Submit a corrective action plan to
the legislature within sixty days that includes an analysis of why the targets
were not met and timelines for correcting the payment error rate.
2. Pay fifty percent of any federal
liabilities that may be imposed due to the excess payment error
rates. The remaining federal liabilities shall be paid from the
state general fund.
3. Implement a corrective
plan. If the department fails to comply with the corrective plan,
the department's administrative funding shall be reduced by ten percent until
resolved.
D. On or before
November 15, 2027, The auditor general shall complete a
special audit. the
special audit
shall determine what factors contributed to the payment error rate and shall
include recommendations to reduce the payment error rate. The
department shall implement the recommendations within twelve months after
receiving the recommendations from the auditor general unless the
recommendations are waived by the joint legislative audit committee.�
The auditor general may request that the department submit a written
status report on the department's implementation of the special audit
recommendations.
E. If
the department corrects the payment error rate ahead of schedule, the
legislature may allocate additional funding for program improvements.
END_STATUTE
Sec. 2.
Delayed repeal
Section 46-235, Arizona Revised
Statutes, as added by this act, is repealed from and after December 31, 2032.
Sec. 3. Section 46-297.01, Arizona Revised
Statutes, is amended to read:
START_STATUTE
46-297.01.
Electronic benefit transfer cards; replacements; out-of-state
spending; fraud investigation
A. The
department shall send each recipient who requests two replacement cards within
a twelve-month period a letter informing the recipient that another
request will initiate an investigation by the department to determine whether
there is fraud. If a third-party vendor is administering
replacement cards directly to recipients, the vendor shall notify the
department after a recipient requests a second replacement card in a twelve-month
period and makes any subsequent request thereafter.
B. After
a recipient's request for a third replacement card within any twelve-month
period, and any subsequent request thereafter, the department shall schedule an
interview with the recipient and, if the department has been granted a waiver,
determine whether there is fraud before issuing a new card. The
recipient's request for a fourth replacement card requires the department to
schedule an interview with the recipient to determine whether there is fraud
before issuing a new card.� The department shall request any necessary federal
waivers to comply with this section.
C. If a recipient uses more than ten percent of the
recipient's electronic benefit transfer card balance in a six-month
period on out-of-state purchases, the department shall schedule an
interview with the recipient to determine whether there is fraud.
D. On at least a monthly basis, the
department shall use the data from an electronic benefit transfer card to
identify any individual who has made purchases exclusively out-of-state
over a ninety-day period.� The department shall contact the individual
who is identified within thirty days to determine whether that individual
resides in this state.� If the individual does not reside in this state, the
department shall terminate assistance, including supplemental nutrition
assistance program benefits, to the individual within thirty days after
contacting the individual.� Within fifteen days after the individual's
assistance has been terminated, the department shall refer the individual to
the United States attorney's office for the district
of
arizona.
END_STATUTE
Sec. 4.
Department of economic security; drug testing; TANF cash
benefits recipients
During
fiscal year 2026-2027, the department of economic security shall screen
and test each adult recipient who is otherwise eligible for temporary
assistance for needy families cash benefits and who the department has
reasonable cause to believe engages in the illegal use of controlled
substances. Any recipient who tests positive for the use of a
controlled substance that was not prescribed for the recipient by a licensed
health care provider is ineligible to receive benefits for a period of one
year.