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HB 4166

state budget implementation; 2026-2027

57th Legislature - Second Regular Session Introduced by Michael Carbone and 4 co-sponsors

HB 4166 centralizes IT governance under ADOA, mandating statewide standards, project oversight, and data governance to improve efficiency and accountability across state agencies.

Signed by Governor
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Bill Summary · HB 4166

Overview

HB 4166, introduced in the Arizona House of Representatives (57th Legislature, 2nd Regular Session, 2026) by Rep. Livingston and co-sponsored by Carbone, Carter N, Montenegro, Willoughby, among others, relates to implementing budgetary revisions for the FY 2027 state budget. The bill amends statute governing the Arizona Department of Administration’s (ADOA) role in information technology (IT) management, data governance, and interagency IT arrangements. It also includes session-law provisions regarding unrestricted federal monies, the Budget Stabilization Fund, and related fiscal controls for fiscal years 2026-2027 and 2027-2028.

Purpose and intent

  • To strengthen statewide IT governance and data management across state budget units.
  • To empower ADOA to set standards, oversee IT planning, and coordinate IT projects with increased oversight, reporting, and potential outsourcing arrangements.
  • To direct certain unrestricted federal funds to the General Fund to support essential government services.
  • To modify rules surrounding the Budget Stabilization Fund (BSF), limiting mandatory appropriations/transfers and expanding its use in the near term.

Key provisions and changes

  1. IT governance and standards (Sec. 1)

    • ADOA must develop, implement, and maintain a coordinated statewide IT plan.
    • Requires adoption of statewide IT standards, including possibly mandating technologies and data-sharing practices to improve IT administration efficiency.
    • ADOA to act as statewide IT resources coordinator and to develop a statewide disaster recovery plan, risk mitigation strategies, and a prioritized list of approved IT projects.
    • Creation of a detailed inventory of state IT assets (owned, leased, or used).
    • Budget units must submit IT plans (quality assurance and disaster recovery) by May 15 annually; judiciary and legislative branches submit for information purposes by September 1.
    • IT project review thresholds: projects costing between $25,000 and $1,000,000 are approved or conditionally approved by ADOA; projects over $1,000,000 are evaluated with recommendations to the Information Technology Authorization Committee; projects over $5,000,000 require independent third-party review, with quarterly progress reports to the IT Authorization Committee and the Joint Legislative Budget Committee.
    • Projects shall not be artificially split to avoid review.
    • A statewide data strategic plan to improve data sharing/governance.
    • Budget units must include life-cycle analyses and demonstrate IT planning expertise (staff or contracted).

  2. Project monitoring and governance (Sec. 1)

    • ADOA will monitor major/critical IT projects and require expenditure/activity reporting.
    • Provisions to temporarily suspend IT spending if a project risks failure or noncompliance.
    • ADOA to provide IT consulting services as needed and keep confidential information confidential.
    • ADOA can delegate IT authority to budget units and enter interagency/intergovernmental IT service agreements, with reimbursement provisions if no specific appropriation exists.

  3. Access and accountability (Sec. 1)

    • ADOA, through its director or staff, may examine books and records of budget units and require information as needed.
    • Violations related to confidential information are criminalized as a Class 5 felony.

  4. Unrestricted federal monies; essential services; retroactivity (Sec. 2)

    • Any unrestricted federal monies received from July 1, 2026, to June 30, 2027, must be deposited into the state General Fund.
    • Such monies are to be used to pay for essential government services.
    • Retroactive to June 30, 2026.

  5. Budget Stabilization Fund exceptions (Sec. 3)

    • For FY 2026-2027 and 2027-2028, the Legislature is not required to appropriate or transfer monies to/from the BSF.
    • For FY 2026-2027, the BSF is not limited to 10% of general fund revenue, and the State Treasurer may not transfer any BSF surplus to the General Fund.

Who is affected

  • Arizona Department of Administration (ADOA): given broader authority to set IT standards, coordinate IT services, and oversee IT planning and project management across state budget units.
  • Budget units (state agencies and their IT projects): required to align with statewide IT standards, submit IT plans, undergo project reviews, and possibly enter cost-recoverable interagency IT agreements.
  • Judicial and legislative branches: required to submit IT plans for information purposes.
  • State data governance and security entities: involved via the statewide data strategic plan and the Arizona Department of Homeland Security (in IT project review and security coordination).
  • State finances: unrestricted federal funds may be redirected to the General Fund to support essential services; BSF-related provisions alter timing and limits on appropriations/transfers.

Procedural and timeline notes

  • IT plans are due annually: May 15 for most budget units; September 1 for the judicial and legislative departments (for information purposes).
  • IT project review framework uses tiered thresholds:
    • $25,000 to $1,000,000: department approval or conditional approval.
    • Over $1,000,000: evaluated with recommendations to IT Authorization Committee.
    • Over $5,000,000: independent third-party review required with quarterly reporting deadlines (within 30 days after each calendar quarter’s end).
  • Retroactive effective date for Sec. 2 is July 1, 2026 (with reporting and implementation through 2027-2028).
  • BSF provisions temporarily loosen restrictions through FY 2027-28 (not required to appropriate/transfer funds, and 2026-27 BSF not limited to 10% of GF).

Summary

HB 4166 seeks to modernize and centralize IT governance and data management across Arizona state government, elevating ADOA’s role in standards, project oversight, and interagency coordination. It introduces a structured, tiered review process for IT projects, mandates lifecycle planning, and enhances data governance, with robust reporting and security considerations. The bill also redirects certain unrestricted federal funds to the General Fund for essential services (with retroactive effect) and temporarily relaxes BSF constraints, altering long-standing earmarking requirements for the near term.

Compiled from official sources — confirm details with the bill’s official record.

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