HB 2804 Arizona House · 57th Legislature - Second Regular Session

rural affordable housing; tax credits

Arizona's HB 2804 creates a new tax credit to support rural affordable housing development. It allows taxpayers (primarily developers or investors in qualifying projects) to claim a credit against their state insurance premium tax for projects in counties with under 800,000 residents that also qualify for federal low-income housing tax credits. The credit amount matches the state's allocation for each project, capped at $2 million annually through 2036, and requires an eligibility statement from the Arizona Department of Housing. Taxpayers can offset the credit against premium tax liability, carry forward unused portions for up to five years, and the program includes annual reporting requirements for the department.

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2026

Committee Review

Feb 2026

House Passage

Feb 2026

Senate Passage

Governor

Introduced Jan 22, 2026 Last action Jun 12, 2026

Maddy AI version diff · 1 comparison

What changed between versions

Introduced Version → House Engrossed Version (02/23/2026) · 7 edits · Feb 23, 2026

MODERATE

The bill was reformatted from a standard introduction to a final House version, adding a new purpose clause and retroactivity provision while retaining the core tax credit structure. The substantive policy changes include establishing a $2 million annual funding cap for rural housing projects, setting a start date of June 30, 2027 for project eligibility, and creating new administrative requirements for public hearings and annual impact reports.

Scope change

The bill's scope was expanded to explicitly include income tax credits alongside premium tax credits, and it now applies retroactively to taxable years beginning after December 31, 2026.

PURPOSE

Added a specific purpose clause stating the bill aims to support new affordable housing construction in rural areas.

TIMELINE

Added a retroactivity provision allowing the tax credits to be claimed for taxable years beginning after December 31, 2026.

ELIGIBILITY

Clarified that projects must be located in counties with populations under 800,000 and must be placed in service after June 30, 2027.

FISCAL

Established a $2,000,000 annual allocation limit for the tax credits, with unused funds rolling over to the next year.

REQUIREMENT

Mandated that the Department of Housing hold public hearings by July 30 each year to solicit comments on credit allocations.

ENFORCEMENT

Required the Department of Housing to submit an annual report by December 31 analyzing the economic impact and number of affordable housing units created.

DEFINITION

Formally defined 'qualified project' as a low-income building meeting federal Internal Revenue Code standards.

Floor votes · House Feb 23, 2026

How they voted

35–22

Passed · 3 other

Total votes 60

Feb 23, 2026

D Democratic27

25 Yea 2

92% Yea

R Republican33

10 Yea 22 Nay 1

66% Nay

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Feb 23, 2026

Lower · Passed

PASSED

lower

Feb 11, 2026

Lower · Passed

lower

Feb 5, 2026

Lower · Passed

lower

1 primary · 0 co-sponsors