Assigned to APPROP FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR H.B. 2325
Arizona blockchain budget initiative; appropriation
Purpose
Establishes the Arizona Blockchain Budget Initiative Pilot Program (Pilot Program) within
the Arizona Department of Administration (ADOA) to assess the feasibility and cost-effectiveness
of using a blockchain platform to record and publish budget data from selected agencies.
Appropriates $1,000,000 from the state General Fund (state GF) in FY 2026 to ADOA for the Pilot
Program.
Background
Blockchain technology is a distributed ledger technology that uses a distributed,
decentralized, shared and replicated ledger. The data on the ledger is protected with cryptography,
is immutable and auditable and provides an uncensored truth. Blockchain technology may be: 1)
public or private; 2) permissioned or permissionless; or 3) driven by tokenized crypto economics
or token less (A.R.S. § 44-7061).
ADOA is currently responsible for maintaining a publicly searchable, comprehensive
database of receipts and expenditures of state monies, as well as making changes or improvements
in state accounting practices, systems and procedures. ADOA is tasked with assisting other
departments, agencies and institutions of the state, local and federal governments in furtherance of
the departments purposes, objectives and programs (A.R.S §§ 41-703; 41-722; and 41-725).
H.B. 2325 appropriates $1,000,000 from the state GF in FY 2026 to ADOA.
Provisions
1. Establishes the Pilot Program within ADOA to assess the feasibility and cost-effectiveness of
using a blockchain platform to record and publish the budget data of selected agencies in the
state.
2. Requires ADOA to select up to three agencies to participate in the Pilot Program, when
determining which agencies to select, ADOA must consider:
a) the agency's overall budget size and complexity;
b) the agencies technical readiness and willingness to collaborate with ADOA; and
c) the public interest in the agency's expenditure.
3. Requires ADOA to procure a blockchain platform that is capable of securely publishing budget
allocations and expenditures that must:
a) allow real time or near real time publication and verification of data;
b) protect confidential information and comply with all applicable state and federal
confidentiality and privacy laws; and FACT SHEET
H.B. 2325
Page 2
c) except for classified data under federal or state law, be accessible to the public.
4. Requires ADOA to ensure that each agency that participates in the Pilot Program records the
following information on the blockchain platform:
a) the budget appropriations enacted into law for each fiscal year;
b) actual expenditures, including vendor payments and operational costs, that do not violate
state and federal confidentiality requirements; and
c) the frequency for updating budget data, which must occur at least monthly.
5. Requires ADOA to issue guidelines and provide training to participating agencies on data
security, privacy compliance and proper methods for recording and verifying data on the block
chain platform.
6. Requires ADOA to use the monies appropriated to develop or procure technology, conduct
staff training and implement any necessary infrastructure.
7. Allows ADOA to pursue federal grants or public-private partnerships to support the Pilot
Program if those funding sources comply with applicable state law.
8. Requires ADOA, by January 1, 2027, to submit a preliminary report regarding the Pilot
Program to the Governor, the President of Senate, the Speaker of the House of Representatives
and provide a copy to the Secretary of State, that includes:
a) a description of the Pilot Program's implementation status including any technical
challenges encountered;
b) the estimated costs, expenditures to date and any adjustments needed; and
c) any preliminary findings regarding the effectiveness of blockchain technology for budget
transparency.
9. Requires ADOA, by January 1, 2029, to submit a final report regarding the Pilot Program to
the Governor, the President of the Senate, the Speaker of the House of Representatives and
provide a copy to the Secretary of State, that includes:
a) an evaluation of the Pilot Program's effectiveness in increasing transparency and public
access to budget data;
b) a cost benefit analysis comparing the blockchain platform to existing financial reporting
methods; and
c) recommendations on whether to expand, modify or discontinue the use of blockchain
technology for other agencies in the state.
10. Requires ADOA and each participating agency to ensure that personal identifying information
and any legally protected information is redacted or otherwise excluded from the publicly
accessible blockchain platform.
11. Terminates the Pilot Program on January 1, 2030.
12. Appropriates $1,000,000 from the state GF in FY 2026 to ADOA for the Pilot Program.
13. Exempts the appropriation from lapsing.
14. Becomes effective on the general effective date. FACT SHEET
H.B. 2325
Page 3
House Action
APPROP 2/24/25 DPA/SE 11-3-3-1
3
rd
Read 3/5/25 34-24-2
Prepared by Senate Research
March 14, 2025
LMM/JP/ci