HB 2120
Initials NM Page 1 House Engrossed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
House: MAPS DP 8-7-0-0
HB 2120: law enforcement; defunding; prohibition
Sponsor: Representative Marshall, LD 7
House Engrossed
Overview
Mandates that a city or town (municipality) must not reduce the annual operating budget
(budget) of a law enforcement agency below the previous year's budget.
History
The Urban Revenue Sharing (URS) program provides that a percentage of state individual
and corporate income tax revenues are to be shared with municipalities in Arizona. The
amount currently distributed to municipalities is 15% of net income tax collections from the
fiscal year two years prior to the current fiscal year. URS monies are distributed to
municipalities based on population (A.R.S. § 43-206; JLBC FY 2024 Baseline, GF Revenue;
DOR Tax Handbook, Individual Income Tax).
Revenues collected through state transaction privilege tax (TPT), often called "sales tax", are
also shared with Arizona’s counties and municipalities through a complex system of formulas
established in statute. The Department of Revenue transmits all TPT revenues to the State
Treasurer, a portion of which are designated for distribution to counties, municipalities, and
other purposes. After the required distributions, remaining monies are credited to the state
General Fund (A.R.S. § 42-5029; DOR Tax Handbook, TPT).
Provisions
1. Prohibits a municipality from reducing the budget of a law enforcement agency below the
previous year's budget. (Sec. 1)
2. Provides that a municipality that reduces its law enforcement agency's budget will not
have its state shared monies withheld if:
a) The municipality does not have sufficient monies;
b) The budgets of all other departments and agencies are reduced by an equal or greater
amount as the reduction in the law enforcement agency's budget;
c) The municipality has not experienced population growth; or
d) The municipality increased the law enforcement agency's budget in the previous year
for a onetime capital expense. (Sec. 1)
3. Requires a municipality that reduces its law enforcement agency's budget to reduce all
other department and agency budgets by at least 50% or the same amount. (Sec. 1)
4. Prohibits law enforcement agencies from having their budgets reduced first. (Sec. 1)
5. Requires a municipality that reduces a law enforcement agency's budget to notify the
State Treasurer. (Sec. 1)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2120
Initials NM Page 2 House Engrossed
6. Requires the State Treasurer to withhold URS and state-shared TPT monies, from a
municipality that reduces a law enforcement agency's budget, in an amount equal to the
budget reduction. (Sec. 1, 2, 3, 4)
7. Specifies that the State Treasurer is to continue withholding state shared monies until
the municipality restores the law enforcement agency's budget. (Sec. 1, 2, 3, 4)
8. Stipulates that the State Treasurer is not to withhold any amount of state shared monies
which a municipality certifies as being necessary to make required payments for debt
service on bonds or other long-term obligations issued or incurred before the reduction in
the law enforcement agency's budget. (Sec. 2, 3, 4)
9. Contains a delayed effective date of January 1, 2025. (Sec. 5)
10. Defines law enforcement agency. (Sec. 1, 2, 3, 4)
11. Makes technical and conforming changes. (Sec. 2, 3)