HCR 2052

House Engrossed
rates; fees; taxes;
  increases; moratorium
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE CONCURRENT RESOLUTION 2052
A
CONCURRENT RESOLUTION
enacting and ordering the submission to
the people of a measure relating to municipal and county fees.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it resolved by the House of Representatives of the State Of
Arizona, the Senate concurring:
1. Under the power of the referendum, as vested in
the Legislature, the following measure, relating to municipal and county fees,
is enacted to become valid as a law if approved by the voters and on
proclamation of the Governor:
AN ACT
amending title 9,
chapter 4, article 8, arizona revised statutes, by adding section 9-500.54;
REPEALING SECTION 9-500.54, aRIZONA rEVISED sTATUTES; amending title 11,
chapter 2, article 4, arizona revised statutes, by adding section 11-269.31;
REPEALING SECTION 11-269.31, aRIZONA rEVISED sTATUTES; relating to
municipal and county fees.
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 9, chapter 4, article 8,
Arizona Revised Statutes, is amended by adding section 9-500.54, to read:
START_STATUTE9-500.54. Municipal fees; taxes; utility rates; increase; moratorium;
applicability; enforcement; definitions
A. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a municipality may not adopt, impose or collect any of the following:
1. A fee that is in an amount
greater than the amount that is authorized in the fee schedule that has been
adopted by the municipality as part of the municipality's 2025-2026
fiscal year budget, including any fee schedule that is adopted by an ordinance
or resolution or that is incorporated by reference.
2. Any transaction privilege tax or
surcharge increase beyond the rate that is in effect on June 3o, 2026.
3. A rate that is imposed for
utility service provided by the municipality and that is greater than the
utility rate that is authorized as part of the municipality's 2025-2026
fiscal year budget or utility rate schedule, except that
a municipality that has not raised utility rates by a cumulative amount of
twelve percent or more in the preceding four fiscal years may increase utility
rates by an amount that is not more than the rate of inflation as determined by
the consumer price index as published by the United states department of labor,
bureau of labor statistics.
B. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a municipality may not adopt or impose a new tax classification or
expand the tax base to additional taxpayers.
C. If a municipality has not
adopted a consolidated or comprehensive fee, tax or utility rate schedule as
part of the municipality's 2025-2026 fiscal year budget, the applicable
fee, tax or utility rate, for the purposes of the fee, tax or utility rate
limits prescribed in subsection A of this section, shall be the highest fee,
tax or utility rate that is imposed by the municipality at any time during the
2025-2026 fiscal year.
D. A municipality may not
circumvent this section by doing any of the following:
1. Renaming, reclassifying or
restructuring a fee, tax or utility rate.
2. Altering methodologies,
assumptions, service areas, customer classes or cost-allocation
practices.
3. Imposing a new charge that is
substantially similar in effect to an increase in a fee, tax or utility rate
that is prohibited by this section.
4. Adopting or amending a fee, tax
or utility rate schedule during the 2025-2026 fiscal year for the primary
purpose of avoiding the application of this section.
E. This section applies to all
municipal fees, taxes and utility rates, regardless of the name or title, that
are imposed as a condition of any of the following:
1. Conducting a taxable
transaction.
2. Receiving a governmental
service.
3. Obtaining a permit, license,
approval or inspection.
4. Connecting to or receiving
municipally provided utility service.
5. Development, construction,
occupancy, operation or change in use.
F. This section does not apply to any of the following:
1. an increase in a municipal tax
if all of the following apply:
(a) The tax
increase is approved by the qualified electors of the municipality.
(b) At least
sixty percent of the votes cast at the election are cast in favor of the
measure.
(c) The
election is held on a consolidated election date in an even-numbered year
pursuant to section 16-204.
2. Ad valorem taxes or special
assessments levied to pay the principal of and the interest and redemption
charges on bonded indebtedness or other lawful long-term obligations
issued or incurred for a specific purpose.
3. Ad valorem taxes or assessments
levied by or for property improvement assessment districts, improvement
districts and other special purpose districts other than a municipality or
community college district.
4. The initial adoption of a
municipality's tax, fee or utility rate structure if the municipality was
incorporated within the two calendar years before the effective date of this
section. This section applies to the municipality described in this paragraph
after the municipality initially adopts the tax, fee or utility rate STRUCTURE.
G. This section does not prohibit
any of the following:
1. The expiration, reduction or
elimination of a fee, tax or utility rate.
2. The collection of a fee, tax or
utility rate that is at or below the amount that is authorized pursuant to
subsections A and C of this section.
3. An increase in total revenue
that results solely from an increase in service demand, usage or growth in the
tax base.
4. the adoption, imposition or
collection of a new or increased rate or fee pursuant to section 9-463.05
or 9-511.01 to fund the acquisition and delivery of new or additional water
resources, including the cost of any previously incurred or future debt service
obligations, needed storage, treatment or delivery infrastructure and operating
and maintenance costs.
H. A fee, tax or utility rate
adopted, imposed or collected that is in violation of this section is void. A
municipality that adopts, imposes or collects a fee, tax or utility rate that
is in violation of this section is subject to enforcement pursuant to section
41-194.01.
I. A taxpayer, resident, business
or property owner that is aggrieved by a violation of this section may bring an
action for declaratory or injunctive relief in a court of competent
jurisdiction. The court may award reasonable attorney fees and costs to a
prevailing plaintiff.
J. For the purposes of this
section:
1. "Fee" means any charge
imposed by a municipality that is not a tax or utility rate, regardless of the
name or title.
2. "Utility service":
(a) Means
municipally provided utility services.
(b) Includes
water, wastewater, stormwater, solid waste, electric, gas or similar services.
END_STATUTE
Sec. 2. Delayed repeal
Section
9-500.54, Arizona Revised Statutes, as added by this act, is repealed
from and after June 30, 2030.
Sec. 3. Title 11, chapter 2, article 4,
Arizona Revised Statutes, is amended by adding section 11-269.31, to read:
START_STATUTE11-269.31. County fees; taxes; utility rates; increase; moratorium; applicability;
enforcement; definitions
A. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a county may not adopt, impose or collect any of the following:
1. A fee that is in an amount
greater than the amount that is authorized in the fee schedule that has been
adopted by the county as part of the county's 2025-2026 fiscal year
budget, including any fee schedule that is adopted by an ordinance or
resolution or that is incorporated by reference.
2. Any transaction privilege tax or
surcharge increase beyond the rate that is in effect on June 3o, 2026.
3. A rate that is imposed for
utility service provided by the county and that is greater than the utility
rate that is authorized as part of the county's 2025-2026 fiscal year
budget or utility rate schedule.
B. Notwithstanding any other law,
ordinance, charter provision or resolution, beginning July 1, 2026 through June
30, 2030, a county may not adopt or impose a new tax classification or expand
the tax base to additional taxpayers.
C. If a county has not adopted a
consolidated or comprehensive fee, tax or utility rate schedule as part of the
county's 2025-2026 fiscal year budget, the applicable fee, tax or utility
rate, for the purposes of the fee, tax or utility rate limits prescribed in
subsection A of this section, shall be the highest fee, tax or utility rate
that is imposed by the county at any time during the 2025-2026 fiscal
year.
D. A county may not circumvent this
section by doing any of the following:
1. Renaming, reclassifying or
restructuring a fee, tax or utility rate.
2. Altering methodologies,
assumptions, service areas, customer classes or cost-allocation
practices.
3. Imposing a new charge that is
substantially similar in effect to an increase in a fee, tax or utility rate
that is prohibited by this section.
4. Adopting or amending a fee, tax
or utility rate schedule during the 2025-2026 fiscal year for the primary
purpose of avoiding the application of this section.
E. This section applies to all
county fees, taxes and utility rates, regardless of the name or title, that are
imposed as a condition of any of the following:
1. Conducting a taxable
transaction.
2. Receiving a governmental
service.
3. Obtaining a permit, license,
approval or inspection.
4. Connecting to or receiving
county-provided utility service.
5. Development, construction,
occupancy, operation or change in use.
F. This section does not apply to any of the following:
1. An increase in a county tax if
all of the following apply:
(a) The tax
increase is approved by the qualified electors of the county.
(b) At least
sixty percent of the votes cast at the election are cast in favor of the
measure.
(c) The
election is held on a consolidated election date in an even-numbered year
pursuant to section 16-204.
2. Ad valorem taxes or special
assessments levied to pay the principal of and the interest and redemption
charges on bonded indebtedness or other lawful long-term obligations
issued or incurred for a specific purpose.
3. Ad valorem taxes or assessments
levied by or for property improvement assessment districts, improvement
districts and other special purpose districts other than a county or community
college district.
4. Ad valorem taxes levied by a
county for support of a school district.
G. This section does not prohibit
any of the following:
1. The expiration, reduction or
elimination of a fee, tax or utility rate.
2. The collection of a fee, tax or
utility rate that is at or below the amount that is authorized pursuant to
subsections A and C of this section.
3. An increase in total revenue
that results solely from an increase in service demand, usage or growth in the
tax base.
H. A fee, tax or utility rate
adopted, imposed or collected that is in violation of this section is void. A
county that adopts, imposes or collects a fee, tax or utility rate that is in
violation of this section is subject to enforcement pursuant to section 41-194.01.
I. A taxpayer, resident business or
property owner who is aggrieved by a violation of this section may bring an
action for declaratory or injunctive relief in a court of competent
jurisdiction. The court may award reasonable attorney fees and costs
to a prevailing plaintiff.
J. For the purposes of this
section:
1. "Fee" means any charge
imposed by a county that is not a tax or utility rate, regardless of the name
or title.
2. "Utility service":
(a) Means
county-provided utility services.
(b) Includes
water, wastewater, stormwater, solid waste, electric, gas or similar services. END_STATUTE
Sec. 4. Delayed repeal
Section 11-269.31, Arizona
Revised Statutes, as added by this act, is repealed from and after June 30,
2030.
Sec. 5. Severability
If a provision of this act or its
application to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of the act that can be given effect
without the invalid provision or application, and to this end the provisions of
this act are severable.
Sec. 6. Legislative
findings and intent
A. The legislature finds
that:
1. Arizona residents and
businesses continue to experience elevated inflation and rising costs,
including housing, utilities, construction, labor and essential services,
placing increased pressure on household budgets and economic activity.
2. Local government
taxes, fees and utility rates materially affect affordability, business
formation, housing development and the overall cost of living throughout this
state.
3. Municipalities and
counties regularly adopt annual budgets, tax rates and fee and utility rate
schedules, which reflect policy judgments about reasonable and necessary
charges for services at a given point in time.
4. Advancements in
technology, including artificial intelligence and automation, present
unprecedented opportunities for local governments to streamline operations,
improve service delivery, increase productivity, and reduce the need for ongoing
growth in full-time staffing levels.
5. This state has
recognized the importance of operational efficiency, including through
executive initiatives such as the Arizona capacity and efficiency initiative,
which emphasizes identifying efficiencies, modernizing operations and improving
government performance, recognizing potentially hundreds of millions of dollars
in cost savings that should be passed on to taxpayers.
6. Temporary restraint on
local fee, tax and utility rate increases encourages local governments to
prioritize efficiency, innovation and responsible fiscal management, while
preserving the ability to meet service demands through improved processes and
increased service volume.
7. Local governments
retain discretion to manage expenditures, staffing, service levels and capital
planning within existing fee, tax and utility rate structures during the
moratorium period.
B. It is the intent of
the legislature to:
1. Provide temporary
relief to residents and businesses by stabilizing locally imposed fees, taxes
and utility rates during a period of elevated inflation and economic
uncertainty.
2. Encourage local
governments to pursue efficiencies and modernization before increasing costs
borne by residents and businesses.
3. Preserve
predictability and transparency in local government fee, tax and rate
structures by anchoring charges to duly adopted budgets and schedules.
4. Respect constitutional
limitations, existing contractual obligations and voter-approved authorities,
while promoting affordability and economic stability statewide.
Sec. 7. Short title
This act may be cited as the
"Local Cost-of-Living Protection Act".
2. The Secretary of State
shall submit this proposition to the voters at the next general election as
provided by article IV, part 1, section 1, Constitution of Arizona.