Overview
HB 4156 is a capital outlay and appropriations bill for the 2026-2027 and related prior/future fiscal years in Arizona. The measure consolidates and updates capital outlay allocations for state agencies, departments, and state institutions, specifies project reviews and reporting requirements, and makes a number of targeted changes to existing capital programs (notably for the Department of Transportation, Department of Administration, and several other agencies). It also creates and adjusts funding for major maintenance, building renewal, and specific project scopes (e.g., Riggs Road overpass with SR 347, airport planning, veterans’ facilities, parks, and water-related infrastructure).
Main purpose and intent
- Authorize and structure capital outlay appropriations for 2026-2027 (with related amendments and supplemental appropriations across multiple years).
- Provide explicit project lists and funding for highway, building renewal, state park improvements, correctional facilities, veterans’ services, aviation, and other capital needs.
- Establish reporting obligations to JLBC (Joint Legislative Budget Committee) and, in several cases, exempt certain appropriations from JCCR (Joint Committee on Capital Review) review.
- Align funding with anticipated matching contributions from local governments or other sources and specify conditions for intergovernmental agreements and private/public contributions where relevant.
- Maintain or adjust project timelines, including extensions or lapsing rules, contingent on grants or federal funding where applicable.
Key provisions and changes
Section 11 (Major Maintenance and Building Renewal; Sec. 11):
- Allocates 2026-2027 capital renewal funding to multiple agencies (ADOA, DOC, AZGFD, State Parks Board, Pioneer’ Home, DPS, Transportation, etc.).
- Specifies fund sources (GF, COSF, state park funds, etc.) and allows retrofitting for space consolidation.
- DOC: restricts use to capital renewal; limits use for new facilities tied to Jensen v. Thornell litigation.
ADOT, other agencies: various renewal and facility improvement projects, including labs, fueling facilities, HVAC, and planning/design activities.
Section 12 (Individual Capital Projects; Sec. 12):
- Detailed list of FY 2027 projects for various agencies (AZ Exposition and State Fair Board; AZGFD; AZ State Parks Board; AZ Pioneer’s Home; ADOT). Examples include dam and hatchery maintenance/repairs, Kingsman lab, fuel facility replacements, Verde River park development, and multiple highway-related improvements and intergovernmental agreements.
- Emphasizes that many projects rely on multiple fund sources (SHF, SAF, COSF, general fund, etc.).
- Includes reporting requirements to JLBC staff on project status and costs.
Section 13 (Statewide Highway Construction; Sec. 13):
- Appropriates $432,663,000 from the State Highway Fund (SHF) for statewide highway construction and related activities.
- Requires ADOT to report capital outlay information by November 1, 2026, including debt and project status.
- Exempts this appropriation from JCCR review.
Section 14 (Airport Planning and Development; Sec. 14):
- Allocates $29,048,900 from the State Aviation Fund for airport planning and development in FY 2027.
- Mandates future reporting to JLBC and OSBB and exempts this appropriation from JCCR review.
Section 15-18 (Appropriation Reductions/Transfers and Related Adjustments):
- Aligns and reduces prior appropriations to ADOT (and related SHF-to-GF transfers) for specific projects (e.g., U.S. Route 89, Route 69/95, Route 186, Route 191).
- Specifies transfers between funds (SHF to GF) to support general state maintenance and operations, and clarifies reversion rules tied to federal grants or project status.
Section 19-20 (Miscellaneous Provisions and Use of Appropriations):
- Extends and clarifies reversion dates for certain ADOT projects (e.g., Grand Canyon Airport terminal renovation) contingent on FAA grants.
- Extends reversion for ADVS HVAC replacement if federal grant is not awarded.
- Allows ADOA to spend up to 5% of capital appropriations for project management; restricts other monies to prevent personal services or non-review expenditures without JCCR.
Sections 9-10 (Long-range capital planning and reporting):
- Provides future-year (FY 2025-2028) capital project planning and reporting requirements, including debt and capital outlay information, and set-asides for particular projects.
Who and what would be affected
- State agencies and boards receiving capital outlay appropriations:
- Department of Administration (building renewal projects)
- Department of Corrections (facility renewal; limitations on staff/overhead)
- Arizona Game and Fish Department (dam/hatchery/maintenance)
- Arizona State Parks Board (capital improvements; Verde River park development)
- Arizona Pioneer’s Home (improvements and cemetery-related projects)
- Department of Public Safety (facility renovations)
- Department of Transportation (extensive highway, interchange, and overpass projects; vehicle facilities; airport-related planning and development)
- Arizona Exposition and State Fair Board
- Other smaller line items for various counties, cities, and special districts through statewide allocations or intergovernmental agreements
- Local governments and intergovernmental entities (cities, towns, counties) receive allocations or design projects to be implemented via intergovernmental agreements, with matching funds requirements where specified.
- The project review process is affected, with some appropriations exempt from JCCR review and others subject to quarterly reporting requirements.
Procedural and timeline aspects
- Exemptions: Several highway and airport-related appropriations are exempt from JCCR review.
- Reporting: Regular quarterly reporting to JLBC staff on project status and costs; annual or periodic reporting on long-range highway costs and capital outlay projections.
- Transfers: The bill contemplates fund balance transfers between SHF and GF to support agency operations, with explicit conditions and timelines (e.g., transfers occurring July 1, 2026–June 30, 2027).
- Lapsing and reversions: Several sections include extended or conditional lapse/reversion rules tied to grant receipts (e.g., FAA grants for Grand Canyon Airport terminal, federal grant eligibility for Tucson veterans’ home HVAC replacement).
- Supplemental appropriations: The bill authorizes supplemental appropriations for fiscal years 2023-2024 and 2023-2024, plus ongoing allocations for 2025-2027 and 2026-2027, with detailed line-item amounts.
- Capital outlay management: ADOA is given limited flexibility (up to 5% for project management) with a broad prohibition on personal services and non-review expenditures for other money.
Bottom line
HB 4156 is a comprehensive capital outlay package that:
- Allocates substantial funding to road/highway projects, airport planning, building renewal, and state park/corrections projects.
- Sets up project-specific funding streams, intergovernmental processes, reporting duties, and review exemptions.
- Enables extended planning and long-range capital oversight through 2026-2028, with built-in adjustments tied to grant funding and private/matching contributions.
- Aims to support infrastructure improvements across transportation, public safety, parks, veterans’ services, and state facilities, while managing funding sources and oversight.
