HB 2946: municipalities; counties; development fees - Arizona

Senate Engrossed Version (04/14/2026) → Chaptered Version · 4 edits

MODERATE

This bill updates the definitions of 'development' and modifies the notice requirements for utility rate increases. It clarifies that 'development' includes the subdivision of land and various structural changes that increase service units. Additionally, it mandates that municipalities must post detailed financial reports and cash flow projections on their websites at least 30 days before holding public hearings on water or wastewater rate hikes.

Scope change

The bill applies to all municipalities in Arizona regarding development fee assessments and utility rate increases.

DEFINITION

Refined the definition of 'development' to explicitly include the subdivision of land and structural alterations that increase service units.

REQUIREMENT

Updated the process for utility rate increases to require that financial reports and cash flow projections be posted on a municipality's website at least 30 days before a public hearing.

Removed the specific requirement that notices for utility rate increases must be distributed through social media accounts.

TECHNICAL

Added official chaptering metadata, including the Governor's approval date and Secretary of State filing date.

Introduced Version → House Engrossed Version (03/11/2026) · 6 edits · Apr 14, 2026

MODERATE

The bill was amended to add a new section requiring municipalities to notify businesses before imposing new taxes or fees, while simultaneously removing the requirement for counties to submit annual reports on development fees. Additionally, several technical corrections were made to section numbers, dates, and definitions regarding facility expansions and accessory dwelling units.

Scope change

The bill's scope was expanded to include a new notification requirement for municipal taxes and fees, while the reporting obligations for counties were removed.

REQUIREMENT

Added a new Section 2 requiring municipalities to provide written notice and supporting data to businesses at least 60 days before levying or increasing any new taxes or fees.

Removed the requirement for counties to submit annual reports accounting for the collection and use of development fees.

TIMELINE

Corrected a future date from 'August 1, 2014' to 'December 31, 2026' regarding when growth-related water and wastewater fees must be adopted.

DEFINITION

Clarified the definition of 'facility expansion' to exclude repairs, maintenance, or modernization intended to better serve existing development.

Updated the definition of 'accessory dwelling unit' to clarify that fees for water and wastewater are only assessed if the addition requires a larger utility meter.

TECHNICAL

Corrected various section number references (e.g., changing references to 9-511.01 to 9-499.15) and fixed typos in the text.

House Engrossed Version (03/11/2026) → Senate Engrossed Version (04/14/2026) · 4 edits · Apr 14, 2026

MODERATE

The bill was renumbered from the House to the Senate version, indicating it has passed the House and is now being considered by the Senate. The most significant substantive change involves the fees charged for Accessory Dwelling Units (ADUs), which were expanded to cover all ADUs rather than just detached ones, and the cap on fees for these units was increased from 20% to 25% of the standard single-family home fee. Additionally, the Senate version clarifies that municipalities can continue to charge fees based on dwelling size or bedroom count only if they adopted those specific fee structures before the amendment took effect.

Scope change

The scope of development fees for Accessory Dwelling Units was expanded to include all ADUs (both attached and detached), whereas the previous version only applied to detached units.

ELIGIBILITY

Expanded the ability to assess development fees to include attached Accessory Dwelling Units, not just detached ones.

Added a grandfather clause allowing municipalities to continue charging fees based on dwelling size or bedroom count if those fees were adopted before the amendment's effective date.

FISCAL

Increased the maximum allowable development fee for Accessory Dwelling Units from 20% to 25% of the fee applicable to a single-family home.

TECHNICAL

Changed the document header from 'House Engrossed' to 'Senate Engrossed' and updated the bill version identifier from H Ver to S Ver.

municipalities; counties; development fees

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