Weekly Legislative Reports

The Arizona Legislature had a relatively quiet week as budget negotiations continue to ramp up behind the scenes. However, the House Appropriations Committee held its first special meeting to streamline a strike-everything amendment to SB 1752 (conformity; internal revenue code) to conform Arizona’s state tax code with the federal government’s changes as it relates to various federal relief dollars distributed over the past year. The bill passed the full House unanimously on Tuesday and was signed by Governor Ducey that same day.

With the official conclusion of House and Senate Committee hearings last week, the Arizona Legislature spent the bulk of this week continuing to move remaining bills through the legislative process. Additionally, the focus from legislative leadership in both chambers shifted to ramping up budget negotiations and holding “small group” meetings with their members. However, there seems to still be quite a discrepancy in the amount and target of the proposed tax cuts, especially with Arizona’s revenues coming in much higher than anticipated, along with the influx of additional federal relief dollars.

Last Friday was the Arizona Legislature’s deadline for bills to receive committee hearings in the second Chamber in order to remain in viable form to continue forward this legislative session. The one exception is the Appropriations Committees in both bodies who can meet for one additional week, and then once again after budget reconciliation bills have been introduced. Accordingly, House and Senate Appropriations Committees held lengthy hearings this week on over 50 bills and strike-everything amendments on a variety of policy matters that proponents hoped would either allow for a late introduction of an issue or revive issues that had previously failed to move through the process. Floor action in both chambers slowed while the Appropriations Committees held their all day hearings. Action is expected to ramp up again next week as the focus will shift to moving remaining bills across the legislative finish line and more aggressively tackling the budget.

The Arizona Legislature had a packed week filled with several lengthy Committee hearings as it was the final week for bills to be heard by a committee in the opposite chamber (House bills in the Senate, Senate bills in the House). With a few exceptions, a bill must have passed out of its assigned committee at the conclusion of this week in order to meet legislative deadlines and continue through the process in its current form. Next week, only the Appropriations Committees in both bodies will meet for one more week of hearing legislation. Additional Appropriations Committee hearings will again ensue when budget bills are ready to be introduced. At the conclusion of the week, there were over 100 bills in each chamber that successfully passed out of the body of origin, but failed to receive a hearing in the opposite chamber’s Committee and can be considered “dead” for the session. There are another 163 House bills in the Senate and 178 Senate bills in the House that are still “alive” and have already cleared the opposite chamber’s assigned committee(s) and are awaiting the Rules Committee, Caucus, or Floor action.

As this was the second-to-last week for bills to be heard in Committee in the opposite chamber, many bills moved through the legislative process, with a plethora of others awaiting to be heard in the final week of Committee hearings next week. After next week, with a few exceptions, only the Appropriations Committee will meet for one additional week and again when budget reconciliation bills are ready to be introduced. To date, there are still 205 House bills awaiting Committee action in the Senate while there are 164 Senate bills awaiting Committee action in the House. There are another 116 bills in the Senate and 108 bills in the House that have already cleared the opposite chamber’s assigned Committee and are awaiting the Rules Committee, Caucus, or Floor action. Governor Ducey has now signed 70 bills into law while another 73 bills are on his desk awaiting his action.

This marked the second week following “crossover week” in which House bills continue to move through the legislative process in the Senate, and Senate bills continue to make their way through the House. At the conclusion of this week, two full weeks remain for bills to receive hearings in the opposite chamber prior to the legislative deadline (with a few exceptions and assuming no extension is granted by the President or Speaker). Budget negotiations are ramping up with the House and Senate Republicans meeting with the Governor’s Office to iron out the impending budget package. Though fairly aligned in the majority of areas, the amount and where the tax relief will be targeted is the primary area of contention between the respective bodies at the moment. The House is considering the phasing-in of a flat income tax in a larger economic development bill. Another proposal would include changes to property and sales tax figures with the goal of achieving tax reductions that are broad based yet also targeted on economic growth. Though details are still being worked out, the House proposal would be offset by increases elsewhere with an anticipated overall tax cut of more than $1 billion once phased in over the next three to four years. Despite lacking many concrete details, Governor Ducey proposed $600M in tax cuts over three years in his Executive Budget. Similar to the Governor, the Senate tax framework consists of $250 million in one-time tax law changes and $200M in ongoing tax reductions. Once there is an agreement on the tax proposals, the budget should move quickly.