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ArizonaHB 2946Fifty-seventh Legislature - Second Regular SessionHouseWALLET

municipalities; counties; development fees

Sponsored By: Khyl Powell (Republican)

Signed by Governor

cities and towns - title 9counties (s)counties - title 11development feesmunicipalitieswater and wastewater business (s)

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 4 benefits, 0 costs, 1 mixed.

Lower fee caps for backyard homes

Municipalities must limit development fees for accessory dwelling units, often called backyard homes. Water and wastewater fees cannot exceed the added demand the unit creates, whether it shares a meter or has its own. Other public-service fees cannot exceed the lower of 25% of total development fees or the applicable single-family-home share.

Public notice before local charge decisions

Municipalities must post meeting details for proposed new or higher taxes, assessments, or fees at least 15 days before deciding. They must also share notices through social media or other electronic tools they use. Water and wastewater charges instead follow separate utility procedures: a hearing at least 60 days after notice of intent. A supporting report must be filed and posted at least 30 days before that hearing; newspaper notice requires 20 days. Utility rate increases take effect 30 days after adoption.

Construction taxes count toward development costs

Municipalities must count part of certain construction taxes toward public-service costs when calculating development fees. This covers the entire tax-rate portion above the rate charged to most other transaction privilege tax categories, without counting it twice. Municipalities also cannot set different single-family development fees based on home size or bedroom count. They can keep those distinctions in later updates if adopted before this law took effect.

Fee protections for approved building projects

Residential, commercial, industrial, and multifamily projects have protection from new or higher development fees for 24 months after the fee ordinance takes effect. Protection applies when changes to an approved site plan or final subdivision plat do not increase measured service demand. If demand increases, added fees can cover only that increase; renewing or amending the plan does not extend protection. A later fee reduction applies even after final approval. Municipalities must also provide a written statement of the applicable fee schedule on request.

Growth fees govern new utility capacity

Beginning January 1, 2027, municipal water and wastewater providers must use development-fee rules for newly adopted or increased charges funding facilities serving new growth. These rules limit charges to growth’s share of eligible capital costs and require planning and public review. Utility service areas also include territory outside municipal boundaries. Development must receive the services or facility expansions and have a substantial connection to them. The law does not set fee amounts.

Sponsors & Cosponsors

Sponsor

  • Khyl Powell

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 137 • No: 68

House vote • 6/1/2026

Concurrence: Passed

Yes: 0 • No: 0

House vote • 6/1/2026

Final Reading: Passed

Yes: 38 • No: 16

Senate vote • 4/14/2026

Third Reading: Passed

Yes: 27 • No: 0

Senate vote • 3/25/2026

Regulatory Affairs and Government Efficiency: DPA

Yes: 5 • No: 0

House vote • 3/11/2026

Third Reading: Passed

Yes: 31 • No: 21

House vote • 3/3/2026

Third Reading: failed to pass

Yes: 26 • No: 30

House vote • 2/23/2026

Rules: C&P

Yes: 6 • No: 0

House vote • 2/19/2026

Rural Economic Development: DPA

Yes: 4 • No: 1 • Other: 2

Actions Timeline

  1. Signed by Governor

    6/4/2026Governor

  2. Final Reading: Passed

    6/1/2026House

  3. Concurrence: Passed

    6/1/2026House

  4. Third Reading: Passed

    4/14/2026Senate

  5. Committee of the Whole: do pass amended

    4/14/2026Senate

  6. Rules: PFC

    3/30/2026Senate

  7. Regulatory Affairs and Government Efficiency: DPA

    3/25/2026Senate

  8. Senate Second Reading

    3/18/2026Senate

  9. Senate First Reading

    3/17/2026Senate

  10. Third Reading: Passed

    3/11/2026House

  11. Additional Committee of the Whole: do pass amended

    3/10/2026House

  12. Miscellaneous Motion: Passed

    3/10/2026House

  13. Motion to Reconsider Third: Passed

    3/3/2026House

  14. Third Reading: failed to pass

    3/3/2026House

  15. Committee of the Whole: do pass amended

    3/2/2026House

  16. Committee of the Whole: Retained on the Calendar

    2/25/2026House

  17. Rules: C&P

    2/23/2026House

  18. Rural Economic Development: DPA

    2/19/2026House

  19. House Second Reading

    2/3/2026House

  20. House First Reading

    2/2/2026House

Bill Text

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