League Bulletin Issue 5

Town of Fountain Hills — Town Council (2026-03-03)

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Legislative Bulletin: Issue 5 – February 16, 2026
  Legislative Update:  
Welcome to the sixth week of the legislative session. To date, 1,966 bills and an
additional 150 memorials or resolutions have been introduced. This Friday
marks the final day for bills to be heard insubject-matter committees in their
chamber of origin. 
 
Governor Hobbs’ Second Veto on Tax Conformity 
 
Last Thursday, Governor Hobbs vetoed HB 2785: conformity; internal
revenue code; deductions (Olson), the legislature’s second attempt this
session to update Arizona’s tax code to conform with recent federal changes.
The measure passed both chambers on party-line votes and would have aligned
state law with portions of the federal Internal Revenue Code adopted in H.R. 1.
In her veto letter, the Governor again urged lawmakers to instead advance her
“Middle Class Tax Cuts Package,” which mirrors many federal individual tax
changes while excluding certain business deductions. 
 
Republican lawmakers have argued the conformity bill is needed to match
Arizona tax forms already issued by the Department of Revenue and to deliver

broad-based tax relief this filing season. They also contend that failure to
conform could create administrative complications for taxpayers and preparers.
With the second veto, however, negotiations between the Governor’s office and
legislative leadership remain at an impasse over the scope of conformity and its
fiscal impact. Absent a compromise, Arizona may need to revise forms or issue
guidance later in the filing season, potentially affecting early filers depending on
the final outcome.
Colorado River Water Negotiations
Negotiations among the seven Colorado River Basin states have again stalled,
with Arizona and the other Lower Basin states (California and Nevada)
confirming ahead of a February 14th federal deadline that no agreement had
been reached on a long-term plan to manage shortages after current river
operating rules expire at the end of 2026. The states have been working for
more than a year to replace interim drought guidelines adopted in 2007 and
updated in 2019 as drought and over-allocation continue to reduce flows in the
river system that supplies water to roughly 40 million people and supports major
agricultural and municipal economies across the Southwest. 
 
The central dispute remains how to share future reductions. The Lower Basin
has proposed quantified conservation commitments across all seven states to
stabilize reservoir levels at Lake Mead and Lake Powell, while the Upper Basin
states (Colorado, New Mexico, Utah, and Wyoming) argue their water use is
already constrained by hydrology and that downstream states are effectively
requesting water that does not physically exist in dry years. Arizona officials and
Lower Basin partners have responded that additional cuts cannot fall primarily
on the Lower Basin alone and that a basin-wide framework is necessary to
avoid deeper crisis conditions. With consensus elusive, the U.S. Bureau of
Reclamation is expected to advance federal post-2026 operating guidelines later
this year, raising the prospect of imposed allocations or litigation if states cannot
reach a voluntary agreement.  
Upcoming Hearings
HB 2292: wildfire prevention authority; fund (Blackman)
House Committee on Land, Agriculture & Rural Affairs 
 
Establishes the Wildfire Prevention Authority within the Department of Forestry
and Fire Management and sets Authority membership, terms, and powers,
including developing operational and financial plans and awarding grants for
wildfire risk reduction and resilience projects. Creates the Wildfire Prevention
Authority Fund and requires $20 million annually from insurer premium tax
revenues beginning FY2026-27 to be deposited into the Fund, with monies used
for authority operations and grants to local jurisdictions with elevated wildfire
risks. Requires the Authority to prioritize funding for jurisdictions that adopt
building and land use codes reducing wildfire risk. 
 
Position: SUPPORT 
Hearing: February 16, 2026, at 2:00 p.m. in HHR 3

HB 2429: S/E vacation rentals; short-term rentals; occupancy
(Bliss) 
House Committee on Commerce 
 
The strike-everything amendment establishes a statewide maximum occupancy
standard for vacation rentals and short-term rentals of two adults per sleeping
area plus two additional people (excluding minors). Expands municipal and
county licensing authority by allowing denial of a short-term rental license for
unpaid fines or civil penalties, extending from 12 to 24 months the period in
which three verified violations may trigger license suspension, and adding
building code violations that present a serious threat to public health and safety
to the list of single verified violations that may result in suspension.  
 
Position: SUPPORT
Hearing: February 17, 2026, at 2:00 p.m. in HHR 5
SB 1566: malicious delay; enforcement; penalty (Petersen) 
Senate Committee on Government 
 
Prohibits cities, towns, counties, the state, and state agencies from “maliciously”
(defined) delaying responses to license, approval, or permit applications or
similar requests. Authorizes the Attorney General, and county attorneys for
counties, to enforce the prohibition and subjects violators to a civil penalty of
$5,000 per violation.
 
Position: OPPOSED 
Hearing: February 18, 2026, at 7:00 a.m. in SHR 1
 
HB 2080: municipal general plan; adoption (Bliss) 
House Committee on Government 
 
Allows municipalities with populations between 2,500 and 10,000 whose growth
rate did not exceed an average of two percent in the prior decade, and whose
current general plan was previously voter approved, to submit a newly adopted
general plan to voters for ratification. 
 
Position: SUPPORT
Hearing: February 18, 2026, at 8:00 a.m. in HHR 5
HB 2375: housing; zoning; historic neighborhoods (Gress)  
House Committee on Government 
 
Exempts historic neighborhoods from the requirement that municipalities
authorize middle housing development. 
 
Position: SUPPORT
Hearing: February 18, 2026, at 8:00 a.m. in HHR 5
HB 2716: vacant; abandoned property; inspection; maintenance
(Villegas)

House Committee on Government 
 
Authorizes a city or town to adopt and enforce ordinances that require
registration, inspection, and maintenance of residential and commercial
buildings that are vacant or abandoned for more than 150 days. Requires such
ordinances to impose owner obligations related to property security, structural
safety, sanitation, insurance coverage, inspections, and payment of registration
and inspection fees, and authorizes the city or town to use collected fees for
public safety, administration, or repair, closure, or demolition of the property.
Allows a city or town to place liens on real property to collect delinquent fees
and costs and prohibits owners from avoiding compliance by transferring
property to affiliated entities. 
 
Position: SUPPORT
Hearing: February 18, 2026, at 8:00 a.m. in HHR 5
HB 4064: municipal improvement districts; petitions (Bliss) 
House Committee on Government 
 
Requires a governing body, before forming a municipal improvement district, to
receive a petition signed by specified property owners in the proposed
improvement district. Sets petition thresholds at a majority of taxable property
owners and owners of 51 percent or more of assessed valuation for tax-levying
districts, and a majority of real property owners and owners of 51 percent or
more of acreage for other districts, with exclusions for exempt, public, and
rights-of-way property and an exception for community facilities districts issuing
special assessment bonds. Authorizes a municipality, if all nonpublic property
owners in a proposed improvement district sign the required petition and the
governing body approves it, to waive posting, publication, notice, frontage owner
requirements, and protest and objection procedures and to immediately adopt
resolutions to order the improvement. Requires petitions to include a maximum
assessment amount and prohibits assessments from exceeding that amount. 
 
Position: SUPPORT
Hearing: February 18, 2026, at 8:00 a.m. in HHR 5
HB 2290: TPT; sourcing; business location; receipt (Olson) 
House Committee on Ways & Means 
 
Modifies transaction privilege tax sourcing by specifying that a retail sales order
is received only at a seller’s physical business location and that the location of
servers transmitting the order does not determine sourcing. Applies to taxable
periods beginning on or after the first day of the month following the general
effective date.
 
Position: OPPOSED 
Hearing: February 18, 2026, at 10:00 a.m. in HHR 3
SCR 1027: general election day; all offices (Mesnard) 
Senate Committee on Judiciary and Elections

Session Deadlines
Every session has deadlines pertaining to bill submissions and hearings.
These are established by Senate and House rule and are subject to
change. This year’s schedule is as follows: 
 
February 
Friday 2/20: Last day for consideration of bills in chamber of origin 
 
March 
Friday 3/27:  Last day for consideration of bills in opposite chamber 
 
April
Friday 4/17: Last day for consideration of bills in conference committee 
Tuesday 4/21: 100th Day of Session 
 
Legislative Staff
You may contact our legislative division by phone at (602) 258-5786 or by e-
mail using the following information: 
 
Tom Savage, Legislative Director: tsavage@azleague.org  
Marshall Pimentel, Senior Legislative Associate: mpimentel@azleague.org  
Proposes a constitutional amendment to require that general elections for all
city, town, and school district offices, be held on the first Tuesday after the first
Monday in November of even numbered years. If passed by the Legislature, this
legislation will be submitted to the voters at the 2026 general election. 
 
Position: OPPOSED 
Hearing: February 18, 2026, at 1:30 p.m. in SHR 2
HB 2588: municipalities; planned communities; design;
prohibition. (Way)  
House Committee on Rural Economic Development 
 
Prohibits a municipality from requiring the creation of a homeowners’
association, shared amenities, gated access, or other perimeter enclosures as a
condition of a subdivision or development, except as required by federal law.
Prohibits a municipality from adopting or enforcing design, architectural, or
aesthetic requirements for single-family homes or accessory dwelling units,
including requirements related to materials, colors, façades, layouts, garages,
fences, or similar features. Prohibits a municipality from denying or conditioning
a permit based on prohibited design requirements, Preserves the applicability of
building codes, fire codes, public health and safety regulations, minimum
parking requirements, and dark sky ordinances. 
 
Position: OPPOSED 
Hearing: February 19, 2026, at 9:00 a.m. in HHR 4

Megan Didur, Legislative Associate: mdidur@azleague.org 
Nicholas Medel, Legislative Intern: nmedel@azleague.org  
  
League of Arizona Cities and Towns
1820 W Washington Street
Phoenix, AZ 85007
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