Legislative Update-June 2026

The second session of the 57th Arizona legislature has officially adjourned sine die on Saturday, June 13, 2026 at 4:45 am.

Arizona Farm Bureau has actively tracked over two hundred bills with impacts to agriculture, and while they all did not make it across the finish line there are significant highlights that made it to the Governor's desk and have been adorned with her signature.

Bills Signed Into Law

On June 22nd Governor Hobbs signed the following measures:

• SB1198-beef council; veterinary board; continuation

  • This allows for the continuation of both the Arizona Beef Council and the Arizona Veterinary Medical Examining Board

• SB1335-groundwater savings credits; irrigation

  • This measure is a cumulation of collaborative efforts with multiple organizations involved in Ag-to-Urban efforts. MCFB provided stakeholder input for these additions to the program and we are happy to share that applicants may now irrigate for up to two years after application, allowing the land to continue agriculture production until development actually occurs.

• SB1336-state land department; continuation; oversight

  • The State Land Department will now see continuation through July 1, 2030. Additionally this created the State Land Oversight Board  to provide review and oversight of the department's rules, policies, and procedural efficiencies for applicants and lessees.

• HB2104-agricultural property; classification; inspection

  • A measure tracked thoroughly by the AZFB Government Relations team, this ensures that if a property owner wins an appeal on agricultural classification the Assessor's office may not take action to reclassify that property for three years.

• HB2105-agricultural property; inspections; notice

  • Notifying the property owner or possessor of an on-site inspection is now required. They must also provide a copy of the final inspection report as well.

Bills Vetoed

Additionally on April 13th, 2026 the following provisions were vetoed by Governor Hobbs:

• HB2026-assured water supply; commingling

• HB2031-grandfathered right; Willcox AMA; extension

• HB2055-brackish groundwater recovery program

• HB2102-domestic water improvement districts; hauling

• HB2103-water improvements program; water hauling

• HB2261-property tax; agricultural real property

• HB2787-federal nullification; Mexican wolf; reintroduction

A Budget Balanced

$18.3 billion dollars later the budget is balanced and signed.

This reflects a 3.1 percent increase over the previous year which equates to roughly $540 million. The hot topic showcased in this year's budget package is the tax relief portion which reflects the Federal tax code pieces reflected in H.R. 1 (the One Big Beautiful Bill Act). This makes Arizona the first state to adopt the measures that Arizonans will see to the tune of $1.4 billion in tax relief.

An additional element to note is the three year moratorium on new sales tax exemptions for data centers.

While a relief to have a final approved budget package, there are several impacts of agriculture to keep in mind.

• Funding eliminated for the University of Arizona Cooperative Extension's Natural Resource Users Law and Policy Center (NRULPC)

• Arizona Department of Agriculture's General Fund appropriation decreased from $16.2 million to $15.9 million

• Arizona Department of Agriculture's Other Fund decreased from $4.0 million to $2.5 million; this decrease includes the discontinuation of a $2 million one-time deposit to the Water and Innovation Fund

• Arizona Department of Agriculture Pest Management Fund appropriation for $500,000 of licensing IT system maintenance

Additionally the Department is now authorized to utilize funds currently designated for avian influenza for New World Screwworm. They may also use up to $250,000 from the Commercial Feed Trust Fund for New World Screwworm response.

Several other provisions also carry impacts to our agriculture and rural communities. The Veterinary Loan Assistance Program saw it's maximum award increase from $100,000 to $200,000. In a time when rural communities are hunting for veterinary support efforts to encourage veterinarians to settle in Arizona are welcomed.

The Department of Transportation's livestock control line was broadened to cover wildlife crossings to the tune of $700,000. On taxes, alignment with H.R. 1 allows for 100 percent first-year expensing on qualified production property, which the law clarifies applies to agricultural production for the 2025 tax year. For growers in Pinal County, the budget extends both the moratorium on groundwater withdrawal fees for water-banking purposes and the $2.50-per-acre-foot fee cap which funds groundwater and irrigation efficiency projects in the Pinal Active Management Area through December 31, 2030.

Several agriculture-related items were not carried forward, among them a one-time $2.0 million deposit for the University of Arizona's On-Farm Irrigation program, $1.35 million for the University's Yuma Center for Excellence for Desert Agriculture, and $250,000 for the Game and Fish Department's Livestock Loss Board, which handles wolf depredation claims.

While this pithy summary of all that occurred during the second session of the fifty seventh legislature may seem concise, the work behind these details by legislators, staff, and our organizations is vast. Thank you to all who dedicated their time and efforts this session.