Bill Text: AZ SB1850 | 2026 | Fifty-seventh Legislature 2nd Regular | Engrossed
Bill Title: Commerce; 2026-2027.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced) 2026-06-11 - Senate Committee of the Whole action: Do Pass [SB1850 Detail]
Download: Arizona-2026-SB1850-Engrossed.html
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Senate Engrossed
commerce; 2026-2027. |
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State of Arizona Senate Fifty-seventh Legislature Second Regular Session 2026
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SENATE BILL 1850 |
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AN ACT
Amending section 5-572, Arizona Revised Statutes, as amended by laws 2024, CHAPTER 210, section 2; repealing section 5-572, Arizona revised statutes, as amended by laws 2024, chapter 210, section 3; amending sections 20-156, 28-8604, 32-1134, 41-1545.05, 41-1561, 41-2257, 41-2306 and 44-2039, Arizona Revised Statutes; relating to commerce.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-572, Arizona Revised Statutes, as amended by Laws 2024, chapter 210, section 2, is amended to read:
5-572. Use of monies in state lottery fund; report
A. If there are any bonds or bond related obligations payable from the state lottery revenue bond debt service fund, the state lottery revenue bond debt service fund shall be secured by a first lien on the monies in the state lottery fund after the payment of operating costs of the lottery, as prescribed in section 5-555, subsection A, paragraph 1, until the state lottery bond debt service fund contains sufficient monies to meet all the requirements for the current period as required by the bond documents. Debt service for revenue bonds issued pursuant to this chapter shall be paid first from monies that would have otherwise been deposited pursuant to this section in the state general fund. After the requirements for the current period have been satisfied as required by the bond documents, the monies in the state lottery fund shall be expended for the expenses of the commission incurred in carrying out its powers and duties and in the operation of the lottery.
B. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsection A of this section, $10,000,000 shall be deposited in the Arizona game and fish commission heritage fund established by section 17-297.
C. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A and B of this section, $5,000,000 shall be allocated to the department of child safety for the healthy families program established by section 8-481, $4,000,000 shall be allocated to the Arizona board of regents for the Arizona area health education system established by section 15-1643, $3,000,000 shall be allocated to the department of health services to fund the teenage pregnancy prevention programs established in Laws 1995, chapter 190, sections 2 and 3, $2,000,000 shall be allocated to the department of health services for the health start program established by section 36-697, $2,000,000 shall be deposited in the disease control research fund established by section 36-274 and $1,000,000 shall be allocated to the department of health services for the federal women, infants and children food program. The allocations in this subsection shall be adjusted annually according to changes in the GDP price deflator as defined in section 41-563, and the allocations are exempt from the provisions of section 35-190 relating to lapsing of appropriations. If there are not sufficient monies available pursuant to this subsection, the allocation of monies for each program shall be reduced on a pro rata basis.
D. If the state lottery director determines that monies available to the state general fund may not equal $84,150,000 in a fiscal year, the director shall not authorize deposits to the Arizona game and fish commission heritage fund pursuant to subsection B of this section until the deposits to the state general fund equal $84,150,000 in a fiscal year.
E. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through D of this section, $1,000,000 or the remaining balance in the fund, whichever is less, is appropriated to the department of economic security for grants to nonprofit organizations, including faith-based organizations, for homeless emergency and transitional shelters and related support services. The department of economic security shall submit a report on the amounts, recipients, purposes and results of each grant to the governor, the speaker of the house of representatives and the president of the senate on or before December 31 of each year for the prior fiscal year and shall provide a copy of this report to the secretary of state.
F. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through E of this section, and after a total of at least $99,640,000 has been deposited in the state general fund, $1,750,000 shall be deposited in the Arizona competes fund established by section 41-1545.01 through fiscal year 2028-2029 and $3,500,000 thereafter. The balance in the state lottery fund remaining after deposits into the Arizona competes fund shall be deposited in the university capital improvement lease-to-own and bond fund established by section 15-1682.03, up to a maximum of eighty percent of the total annual payments of lease-to-own and bond agreements entered into by the Arizona board of regents.
G. All monies remaining in the state lottery fund after the appropriations and deposits authorized in this section shall be deposited in the state general fund.
H. Except for monies expended for debt service of revenue bonds as provided in subsection A of this section, monies expended under subsection A of this section are subject to legislative appropriation.
I. The commission shall transfer monies prescribed in this section on a quarterly basis.
Sec. 2. Repeal
Section 5-572, Arizona Revised Statutes, as amended by Laws 2024, chapter 210, section 3, is repealed.
Sec. 3. Section 20-156, Arizona Revised Statutes, is amended to read:
20-156. Examination of insurers; financial surveillance fund; definition
A. The director shall examine the affairs, transactions, accounts, records and assets of each authorized insurer as often as the director deems advisable. The director shall so examine each domestic insurer at least once every five years. Examination of an alien insurer shall be limited to its insurance transactions in the United States.� The director may examine the business transactions and affairs of each domestic life and disability reinsurer as defined in section 20-1082, service company as defined in section 20-1095 and mechanical reimbursement reinsurer as defined in section 20-1096.
B. The director shall in like manner examine each insurer applying for an initial certificate of authority to do business in this state.
C. In lieu of making an examination, the director may accept a full report of the last recent examination of a foreign or alien insurer, certified to by the insurance supervisory official of another state, territory, commonwealth or district of the United States.
D. The expenses of the examinations conducted under this section shall be paid by the insurance examiners' revolving fund as provided in section 20-159. Such expenses shall be limited to preexamination selection and preparation costs, examination costs, postexamination costs and other such costs of evaluations of compliance required by law.
E. The financial surveillance fund is established consisting of monies collected pursuant to subsection F of this section.� The fund is a special state fund pursuant to section 35-142, subsection A, paragraph 8.� The department shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations subject to legislative appropriation.
F. The director shall annually assess and collect from each foreign, alien and domestic insurer, other than a domestic life and disability reinsurer as defined in section 20-1082, a service company as defined in section 20-1095, and a mechanical reimbursement reinsurer as defined in section 20-1096, that hold an active certificate of authority an amount within the ranges provided in this subsection and on a uniform percentage basis among all fee categories, to pay the costs of employing financial analysts who shall assist the department in conducting financial surveillance of domestic insurers administering the insurance operational functions of the department. The director shall deposit all collected monies in the financial surveillance fund.� The director shall base the amount of each insurer's assessment on the total admitted assets of the insurer as shown in its annual statement for the calendar year preceding the year in which the assessment is made, according to the following schedule:
����������������������������������� Minimum���������� Maximum
����������� Assessment Amount � Assessment Amount
Insurers with total admitted
assets of greater than
$1,000,000,000���������������������������� $15,000������ $22,500
Insurers with total admitted
assets of at least $200,000,000
but not more than $1,000,000,000���������� $ 5,000������ $ 7,500
Insurers with total admitted
assets of at least $100,000,000
but not more than $199,999,999������������ $ 3,000������ $ 4,500
Insurers with total admitted assets
of at least $50,000,000 but not
more than $99,999,999��������������������� $ 1,500������ $ 2,250
Insurers with total admitted assets
of at least $25,000,000 but not
more than $49,999,999��������������������� $�� 500������ $�� 750
Insurers with total admitted
assets of not more than
$24,999,999������������������������������� $�� 250������ $�� 375
G. For the purposes of this section, "insurer" includes health care services organizations, prepaid dental plan organizations, hospital service corporations, medical service corporations, dental service corporations and hospital, medical, dental and optometric service corporations incorporated in this state.
Sec. 4. Section 28-8604, Arizona Revised Statutes, is amended to read:
28-8604. Advanced air mobility fund
A. The advanced air mobility fund is established. The state treasurer Arizona commerce authority shall administer the fund. Monies in the fund are subject to legislative appropriation and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The state treasurer Arizona commerce authority shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. The fund consists of the following:
1. Monies appropriated by the legislature.
2. Any nonfederal gifts, grants, donations or other monies received by the state treasurer Arizona commerce authority from any public or private source for transportation projects.
B. The monies in the fund shall be used to:
1. Purchase advanced air mobility vehicles that are capable of carrying passengers or cargo for testing and demonstration purposes of the ability to use the advanced air mobility vehicles.
2. Construct vertiports.
C. Before any expenditure is made from the fund, the state treasurer and the department shall submit an expenditure plan for review to the joint committee on capital review.
C. The purpose of the fund is to allow for the office of defense innovation within the arizona commerce authority to enter into a contract with any entity that advances the state's defense, aerospace, dual use technology and national security innovation ecosystem.
Sec. 5. Section 32-1134, Arizona Revised Statutes, is amended to read:
32-1134. Powers and duties of registrar
A. The registrar shall:
1. Establish assessments and maintain the fund balance at a level sufficient to pay operating costs and anticipated claims using the cash basis of accounting.
2. Cause an examination of the fund to be made every three years by an independent certified public accountant.
3. File with the department of insurance and financial institutions an annual statement of the condition of the fund.
4. Employ accountants and attorneys from monies in the fund, but not to exceed $10,000 in any fiscal year, that are necessary for the performance of the duties prescribed in this section.
5. Employ or contract with individuals and procure equipment and operational support, to be paid from or purchased with monies in the fund, but not to exceed in any fiscal year fourteen twenty percent of the total amount deposited in the fund in the prior fiscal year as may be necessary to monitor, process or oppose claims filed by claimants, which may result in collection from the recovery fund.
B. Notwithstanding section 32-1135, the registrar may expend spend interest monies from the fund to increase public awareness of the fund. This expenditure may not exceed $50,000 in any fiscal year.
Sec. 6. Section 41-1545.05, Arizona Revised Statutes, is amended to read:
41-1545.05. Program termination
The program established by this article ends on July 1, 2026 2028.
Sec. 7. Section 41-1561, Arizona Revised Statutes, is amended to read:
41-1561. Office of defense innovation; powers and duties; annual report; definitions
A. The office of defense innovation is established within the authority.
B. The office shall enter into a contract with a qualified public or private entity to advance this state's defense, aerospace, dual use TECHNOLOGY and national security innovation ecosystem.� The office shall engage with and coordinate with private industry, defense contractors, small businesses, institutions of higher education, research institutions, military installations and private stakeholders to implement the duties of the office.
B. C. The office may:
1. Act as a liaison between this state, the United States department of defense and national security organizations, including federal and state agencies and law enforcement and industries that support the purposes prescribed in this subsection section.
2. Identify and pursue, as appropriate, opportunities to increase the amount of federal funding to foster the development of products, services and technologies that support the United States department of defense in this state.
3. Support, enhance or expand any ongoing United States department of defense industry development mission that is directed at this state missions within the state.
4. Support Arizona-based companies that seek federal defense contracts.
5. Advance Advocate to any relevant constituencies for Arizona's economic interests that are related to the United States department of defense's aerospace mission missions and aerospace and defense sectors and industries.
6. Develop and implement a reoccurring strategic plan to enhance Arizona's competitiveness in defense-related and national security industries.
7. Identify and support emerging technology and dual use technology, including commercialization support services to accelerate technology development.
8. Collaborate with the Arizona board of regents and universities and research institutions that seek to increase the amount of defense research and development funding for applied research, and advance prototyping of critical defense-related products and technologies; and support rapid technology transfer and transition capabilities.
9. Collaborate to enhance workforce development that prepares innovators, and intrapreneurs entrepreneurs and workers to support defense and national security industries of the future.
10. Develop, in coordination with public and private partners and consistent with applicable state and federal law, a proving ground in this state for autonomous systems and advanced air mobility to enable testing, validation and commercialization activities.
11. Enter into agreements, including intergovernmental agreements and memoranda of UNDERSTANDING, as necessary to implement this section.
12. Apply for, accept and spend grants, donations, aid or other monies received from the federal government or any agency of the federal government for any advanced air mobility purpose.
13. On behalf of this state or in coordination with any appropriate state agency, apply for and hold federal aviation administration certificates, waivers or authorizations necessary to implement this section.
10. 14. Coordinate with the governor and the legislature on the office's activities, achievements and recommendations.
D. This section does not allow the office to exercise regulatory authority over any public or private entity.
C. E. On or before December 31, 2026 and each year thereafter, the office shall submit a report regarding the office's activities and recommendations to the governor, the president of the senate and the speaker of the house of representatives and shall provide a copy of the report to the secretary of state.
F. On or before september 1, 2029, the office shall submit to the governor, the president of the senate and the speaker of the house of representatives a comprehensive report that includes all of the following:
1. A summary of the office's activities and accomplishments.
2. An assessment of the economic and national security impact of the office.
3. Recommendations regarding the continuation, modification or termination of the office.
G. For the purposes of this section:
1. "Advanced air mobility" has the same meaning prescribed in section 28-8601.
2. "Dual use technology" means technology that has both civilian and defense or national security applications.
3. "Qualified public or private entity" means an entity that demonstrates experience, capacity and credibility in defense and national security innovation and that has the ability to do all of the following:
(a) Support federal defense and national security missions, including engaging with the united states department of defense and related agencies.
(b) Manage complex programs that involve coordination among public and private stakeholders, including industry, academia and government.
(c) Facilitate technology development, testing, validation or transition activities in support of defense or dual use technology applications.
(d) Operate in ENVIRONMENTS that may require specialized compliance, credentialing or security conditions and support defense-related contracting or federal program requirements.
Sec. 8. Section 41-2257, Arizona Revised Statutes, is amended to read:
41-2257. Financial assistance
A. The authority may provide financial assistance to political subdivisions, special districts and Indian tribes in developing, acquiring, constructing, improving, equipping or refinancing infrastructure.� The financial assistance shall include:
1. Loans as provided in this section.
2. Credit enhancements purchased for a political subdivision's, special district's or Indian tribe's bonds or other forms of indebtedness.
B. A loan shall be evidenced by a loan repayment agreement, lease purchase agreement or bonds of a political subdivision, special district or Indian tribe that are delivered to and held by the authority.
C. The authority shall prescribe a principal repayment schedule for each loan made. Loan principal payments may be rescheduled at the discretion of the authority but may not be forgiven.
D. A loan under this section:
1. Shall be repaid not more than thirty years after the date it is incurred.
2. Shall require that interest payments begin not later than the next date that either principal or interest must be paid by the authority to holders of any of the authority's bonds that provided funding for the loan. The authority may provide that loan interest accruing during construction of the borrower's infrastructure project and up to one year after completion of the construction be capitalized in the loan.
3. Shall be repayable in at least annual principal installments and at least semiannual interest installments.
4. Shall be conditioned on the identification of pledged revenues for repaying the loan. If the infrastructure financed by the loan is part of a municipal utility and the city or town pledges revenues of the utility to repay the loan, the loan shall be treated under section 9-530, subsection B as a lawful long-term obligation incurred for a specific capital purpose.
5. To the extent permitted by law, shall be secured by a debt service reserve account that is held in trust and that is in such amount, if any, as determined by the authority.
6. Shall be either:
(a) For a political subdivision, additionally secured by an irrevocable pledge of the shared state revenues due the political subdivision for the life of the loan as provided by a resolution of the board.
(b) For an Indian tribe, conditioned on the establishment of a dedicated revenue source under the control of a tribally chartered corporation or other tribal entity that is subject to suit by the attorney general to enforce the loan contract or be secured by assets that, in the event of default of the loan contract, are subject to execution by the attorney general.
E. The authority shall prescribe the rate or rates of interest on loans made under this section, but the rate or rates shall not exceed the prevailing market rate for similar types of loans. A political subdivision or special district may negotiate the sale of its bonds to or a loan repayment agreement with the authority without complying with any public or accelerated bidding requirements imposed by any other law for the sale of its bonds.
F. The approval of a loan is conditioned on a written commitment by the political subdivision or special district to complete all applicable reviews and approvals and to secure all required permits in a timely manner.
G. The approval of financial assistance to a city or town having a population of more than one hundred fifty thousand persons shall be conditioned on approval of its voters. An election is not required if voter approval has previously been received for substantially the same project.
H. The approval of financial assistance to a county having a population of more than two five hundred thousand persons shall be conditioned on approval of its voters.� An election is not required if voter approval has previously been received for substantially the same project.
I. By resolution of the board, the authority may impose any additional requirements it considers necessary to ensure that the loan principal and interest are timely paid.
J. All monies received from political subdivisions, special districts and Indian tribes as loan repayments, interest and penalties shall be deposited, pursuant to sections 35-146 and 35-147, in the fund.
K. The attorney general may take whatever actions are necessary to enforce the loan contract and achieve repayment of loans provided by the authority pursuant to this article.
L. If a political subdivision fails to make any payment due to the authority under its loan repayment agreement or bonds, the authority shall certify to the state treasurer and notify the governing body of the defaulting political subdivision that the political subdivision has failed to make the required payment and direct a withholding of state shared revenues as provided in subsection M of this section.� The certificate of default shall be in the form determined by the authority, provided the certificate specifies the amount required to satisfy the unpaid payment obligation of the political subdivision.
M. On receipt of a certificate of default from the authority, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold the monies from the next succeeding distribution of monies pursuant to section 42-5029 due to the defaulting political subdivision. In the case of a city or town, the state treasurer shall also withhold from the next succeeding distribution of monies pursuant to section 43-206 due to the defaulting city or town the amount specified in the certificate of default and immediately deposit the amount withheld in the fund.� The state treasurer shall continue to withhold and deposit the monies until the authority certifies to the state treasurer that the default has been cured.� In no event shall the state treasurer withhold any amount that is necessary, as certified by the defaulting political subdivision to the state treasurer and the authority, to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued prior to the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to sections 42-5029 and 43-206.
Sec. 9. Section 41-2306, Arizona Revised Statutes, is amended to read:
41-2306. Tourism fund
A. The tourism fund is established consisting of separate accounts derived from:
1. State general fund monies appropriated to the fund by the legislature.� All monies in this account are continuously appropriated to the office of tourism for the purposes of operations and statewide tourism promotion.
2. Revenues deposited pursuant to section 5-835, subsection B or C.� All monies in this account are continuously appropriated to the office of tourism, which, in consultation with a consortium of destination marketing organizations in the county in which the tourism and sports authority is established, shall be spent to promote tourism within that county.� For fiscal years 2010-2011 and 2011-2012, fifty per cent of the revenues deposited in the tourism fund pursuant to this paragraph may be expended by the office of tourism for operational and administrative purposes.
3. Revenues deposited pursuant to section 42-6108.01. The legislature shall appropriate all monies in this account to the office of tourism, which, in conjunction with the destination marketing organization in the county in which the tax revenues are collected, shall be spent only to promote tourism within that county and shall not be spent for administrative or overhead expenses.
4. Revenues deposited pursuant to section 5-601.02(H)(3)(b)(iv).� The office of tourism shall administer the account.� The account is not subject to appropriation, and expenditures from the fund are not subject to outside approval notwithstanding any statutory provision to the contrary.� Monies received pursuant to section 5-601.02 shall be deposited directly with this account.� On notice from the office of tourism, the state treasurer may invest and divest monies in the account as provided by section 35-313, and monies earned from investment shall be credited to the account.� No monies in the account shall revert to or be deposited in any other fund, including the state general fund. Monies in this account shall supplement, not supplant, current funds in other accounts of the tourism fund.� Monies in this account shall be spent only to promote tourism within the state and shall not be used for administrative or overhead expenses.
5. Monies received in the form of a gift, grant or donation.� The office of tourism may accept and spend monies that are received as gifts, grants or donations.
B. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.
Sec. 10. Section 44-2039, Arizona Revised Statutes, is amended to read:
44-2039. Securities regulatory and enforcement fund; purpose
A. The securities regulatory and enforcement fund is established and shall be administered by the commission under the conditions and for the purposes provided by this section.� Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.
B. Fees collected pursuant to section 44-1861, subsections A, D and P and section 44-3324 shall be deposited, pursuant to sections 35-146 and 35-147, in the securities regulatory and enforcement fund, except as provided in subsection D of this section and except that all other revenues collected in each fiscal year in excess of the amount appropriated from the fund by the legislature shall be deposited in the state general fund.
C. Monies in the fund are subject to legislative appropriation.� The commission shall use the monies in the fund for education and regulatory, investigative and enforcement operations in the securities division, railroad safety and a part of general administrative and hearing expenses of the commission.
D. On February 1 and June 30 of each year, monies deposited in the securities regulatory and enforcement fund pursuant to section 44-3324 are transferred to the state general fund.
Sec. 11. Retroactivity
Section 41-1545.05, Arizona Revised Statutes, as amended by this act, applies retroactively to from and after June 29, 2026.
