Arizona HB 2946: city election; transaction privilege tax

Bill Text

Chapter 0121 - 572R - S Ver of HB2946 

 Senate Engrossed 
 House Bill

 municipalities; 
 counties; development fees

 State of Arizona

 House of Representatives

 Fifty-seventh Legislature

 Second Regular Session

 2026

 CHAPTER 121

 HOUSE BILL 2946

AN 
ACT

amending sections 9-463.05, 9-499.15 
and 9-511.01, arizona revised statutes; relating to development fees.

(TEXT OF BILL BEGINS ON NEXT PAG

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 9-463.05, Arizona Revised 
Statutes, is amended to read:

START_STATUTE9-463.05. Development fees; imposition by cities and towns; infrastructure improvements 
plan; annual report; advisory committee; limitation on actions; definitions

A. A municipality may assess development fees to 
offset costs to the municipality associated with providing necessary public 
services to a development, including the costs of infrastructure, improvements, 
real property, engineering and architectural services, financing and 
professional services required for the preparation or revision of a development 
fee pursuant to this section, including the relevant portion of the 
infrastructure improvements plan. 

B. Development fees assessed by a municipality under 
this section are subject to the following requirements:

1. Development fees shall result in a beneficial use 
to the development.

2. The municipality shall calculate the development 
fee based on the infrastructure improvements plan adopted pursuant to this 
section.

3. The development fee shall not exceed a 
proportionate share of the cost of necessary public services, based on service 
units, needed to provide necessary public services to the development.

4. Costs for necessary public services made 
necessary by new development shall be based on the same level of service 
provided to existing development in the service area.

5. Development fees may not be used for any of the 
following:

(a) Construction, acquisition or expansion of public 
facilities or assets other than necessary public services or facility 
expansions identified in the infrastructure improvements plan.

(b) Repair, operation or maintenance of existing or 
new necessary public services or facility expansions.

(c) Upgrading, updating, expanding, correcting or 
replacing existing necessary public services to serve existing development in 
order to meet stricter safety, efficiency, environmental or regulatory 
standards.

(d) Upgrading, updating, expanding, correcting or 
replacing existing necessary public services to provide a higher level of 
service to existing development.

(e) Administrative, maintenance or operating costs 
of the municipality.

6. Any development for which a development fee has 
been paid is entitled to the use and benefit of the services for which the fee 
was imposed and is entitled to receive immediate service from any existing 
facility with available capacity to serve the new service units if the 
available capacity has not been reserved or pledged in connection with the 
construction or financing of the facility.

7. Development fees may be collected if any of the 
following occurs:

(a) The collection is made to pay for a necessary 
public service or facility expansion that is identified in the infrastructure 
improvements plan and the municipality plans to complete construction and to 
have the service available within the time period established in the 
infrastructure improvement improvements plan, 
but in no event longer than the time period provided in subsection H I, paragraph 3 of this section.

(b) The municipality reserves in the infrastructure 
improvements plan adopted pursuant to this section or otherwise agrees to 
reserve capacity to serve future development.

(c) The municipality requires or agrees to allow the 
owner of a development to construct or finance the necessary public service or 
facility expansion and any of the following apply applies:

(i) The costs incurred or money advanced are 
credited against or reimbursed from the development fees otherwise due from a 
development.

(ii) The municipality reimburses the owner for those 
costs from the development fees paid from all developments that will use those 
necessary public services or facility expansions.

(iii) For those costs incurred the municipality 
allows the owner to assign the credits or reimbursement rights from the 
development fees otherwise due from a development to other developments for the 
same category of necessary public services in the same service area. 

8. Projected interest charges and other finance 
costs may be included in determining the amount of development fees only if the 
monies are used for the payment of principal and interest on the portion of the 
bonds, notes or other obligations issued to finance construction of necessary 
public services or facility expansions identified in the infrastructure 
improvements plan.

9. Monies received from development fees assessed 
pursuant t