Senate Engrossed department of housing; continuation. State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SENATE BILL 1357 An Act repealing section 41-3025.06, Arizona Revised Statutes; amending title 41, chapter 27, article 2, Arizona Revised Statutes, by adding section 41-3029.15; amending sections 41-3953 and 41-3955, Arizona Revised Statutes; amending title 41, chapter 37, article 2, by adding section 41-3958; relating to the Arizona department of housing. (TEXT OF BILL BEGINS ON NEXT PAGE)
Senate Engrossed department of housing; continuation.
State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025
SENATE BILL 1357
Senate Engrossed
department of housing; continuation.
State of Arizona
Senate
Fifty-seventh Legislature
First Regular Session
2025
SENATE BILL 1357
An Act
repealing section 41-3025.06, Arizona Revised Statutes; amending title 41, chapter 27, article 2, Arizona Revised Statutes, by adding section 41-3029.15; amending sections 41-3953 and 41-3955, Arizona Revised Statutes; amending title 41, chapter 37, article 2, by adding section 41-3958; relating to the Arizona department of housing.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Repeal Section 41-3025.06, Arizona Revised Statutes, is repealed. Sec. 2. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3029.15, to read: START_STATUTE41-3029.15. Arizona department of housing; termination July 1, 2029 A. The ARizona department of housing terminates on July 1, 2029. B. Title 41, chapter 37 and this section are repealed on January 1, 2030. END_STATUTE Sec. 3. Section 41-3953, Arizona Revised Statutes, is amended to read: START_STATUTE41-3953. Department powers and duties; definition A. The department is responsible for establishing policies, procedures and programs that the department is authorized to conduct to address the affordable housing issues confronting this state, including housing issues of low income low-income families, moderate income moderate-income families, housing affordability, special needs populations and decaying housing stock. Among other things, the department shall provide to qualified housing participants and political subdivisions of this state financial, advisory, consultative, planning, training and educational assistance for the development of safe, decent and affordable housing, including housing for low and moderate income households. The department is responsible for maintaining and enforcing standards of quality and safety for manufactured homes, mobile homes and factory-built buildings. B. Under the direction of the director, the department shall: 1. Establish guidelines applicable to the programs and activities of the department for the construction and financing of affordable housing and housing for low and moderate income households in this state. These guidelines shall meet or exceed all applicable state or local building and health and safety code requirements and, if applicable, the national manufactured home construction and safety standards act of 1974 and title VI of the housing and community development act of 1974 (P.L. 93-383 96-399, as amended by P.L. 95-128, 96-153 and 96-339). Guidelines established pursuant to this paragraph do not apply to the department's activities prescribed in section 35-726, subsection E. 2. Accept and allocate any monies as from time to time may be appropriated by the legislature for the purposes set forth in this article. 3. Perform other duties necessary to administer this chapter. 4. Perform the duties prescribed in sections 35-726 and 35-728. 5. Stimulate and encourage all local, state, regional and federal governmental agencies and all private persons and enterprises that have similar and related objectives and purposes, cooperate with the agencies, persons and enterprises and correlate department plans, programs and operations with those of the agencies, persons and enterprises. 6. Conduct research on its own initiative or at the request of the governor, the legislature or state or local agencies pertaining to any department objectives. 7. Provide information and advice on request of any local, state or federal agencies, private persons and business enterprises on matters within the scope of department activities. 8. Consult with and make recommendations to the governor and the legislature on all matters concerning department objectives. 9. Make annual reports to the governor and the legislature on its activities, including the geographic location of its activities, its finances and the scope of its operations. The annual reports submitted pursuant to this paragraph shall also include all of the following outcome-based metrics for department-funded projects and INITIATIVES: (a) The number of affordable housing units developed in this state. (b) any Changes in homelessness rates in this state due to permanent supportive housing initiatives. (c) Any Improvements in housing accessibility for underserved and rural populations in this state. 10. Maintain and enforce standards of quality and safety for manufactured homes, mobile homes and factory-built buildings and enforce rules adopted by the board pursuant to section 41-4010. 11. as a condition of funding for programs that receive grants or other sources of funding from the department, Establish standards concerning the prohibition of the sale, manufacture or possession of dangerous drugs and narcotic drugs as defined in section 13-3401 in facilities or programs funded by the department. The standards established pursuant to this paragraph shall include clear signage on facilities denoting a drug-free zone and an expectation of cooperation with law enforcement regarding any violations pursuant to section 13-3408, subsection A, paragraph 7. A grantee's refusal to comply with these standards disqualifies the grantee from receiving any future funding from the department. C. Under the direction of the director, the department may: 1. Assist in securing construction and mortgage financing from public and private sector sources. 2. Assist mortgage financing programs established by industrial development authorities and political subdivisions of this state. 3. Assist in the acquisition and use of federal housing assistance programs pertinent to enhance the economic feasibility of a proposed residential development. 4. Assist in the compliance of a proposed residential development with applicable federal, state and local codes and ordinances. 5. Prepare and publish planning and development guidelines for the establishment and delivery of housing assistance programs. 6. Contract with a federal agency to carry out financial work on the federal agency's behalf and accept payment for the work. 7. Subcontract for the financial work prescribed in paragraph 6 of this subsection and make payments for that subcontracted work based on the expectation that the federal agency will pay for that work. 8. Accept payment from a federal agency for work prescribed in paragraph 6 of this subsection and deposit those payments in the Arizona department of housing program fund established by section 41-3957. 9. Contract for the services of outside advisers, consultants and aides reasonably necessary or desirable to enable the department to adequately perform its duties. 10. Contract for and incur obligations reasonably necessary or desirable within the general scope of department activities and operations to enable the department to adequately perform its duties. 11. Use any media of communication, publication and exhibition in the dissemination of information, advertising and publicity in any field of its purposes, objectives or duties. 12. Adopt rules deemed necessary or desirable to govern its procedures and business. 13. Contract with other agencies in furtherance of any department program. 14. Use monies, facilities or services to provide contributions under federal or other programs that further the objectives and programs of the department. 15. Accept gifts, grants, matching monies or direct payments from public or private agencies or private persons and enterprises for the conduct of programs that are consistent with the general purposes and objectives of this article and deposit these monies in the Arizona department of housing program fund established by section 41-3957. 16. Establish and collect fees and receive reimbursement of costs in connection with any programs or duties performed by the department and deposit the fees and cost reimbursements in the Arizona department of housing program fund established by section 41-3957. 17. Provide staff support to the board of manufactured housing. D. For the purposes of this section, the department is exempt from chapter 23 of this title. E. The department is the designated state public housing agency as defined in the United States housing act of 1937 (42 United States Code sections 1401 through 1440) for the purpose of accepting federal housing assistance monies and may participate in the housing assistance payments program. Federal monies may be secured for all areas of this state subject only to the limitations prescribed in subsection F of this section. F. For areas of this state where an existing public housing authority has not been established pursuant to section 36-1404, subsection A, the department acting as a public housing agency may undertake all activities under the section 8 tenant-based rental housing assistance payment program, except that the department shall not undertake a section 8 tenant-based rental housing assistance payment program within the boundaries of a city, town or county unless authorized by resolution of the governing body of the city, town or county. If the department accepts monies for a section 8 tenant-based rental housing assistance payment program for areas of this state where an existing public housing authority has been established pursuant to section 36-1404, subsection A, the department shall only accept and secure federal monies to provide housing for the seriously mentally ill or other populations with disabilities. The department may accept and secure federal monies for undertaking all contract administrator activities authorized under a section 8 project-based rental housing assistance payment program in all areas of this state and this participation does not require the authorization of any local governing body. G. The department shall not itself directly own, construct, operate or rehabilitate any housing units, except as may be necessary to protect the department's collateral or security interest arising out of any department programs. H. Notwithstanding any other provision of this section, the department may obligate monies as loans or grants applicable to programs and activities of the department for the purpose of providing housing opportunities for low or moderate income households or for housing affordability or to prevent or combat decaying housing stock. Unless otherwise required by federal or state law, any loan repayments shall be deposited in the Arizona department of housing program fund established by section 41-3957. I. For any construction project financed by the department pursuant to subsection C of this section, except for contract administration activities in connection with the project-based section 8 program, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations. J. The department has the administrative responsibility through its hearing officer function concerning alleged violations of the Arizona mobile home parks residential landlord and tenant act under title 33, chapter 11. K. The Arizona department of housing shall act consistently with the minimum standards of the United States department of housing and urban development so as to be designated the "state inspector" for manufactured homes and related industries. The Arizona department of housing shall implement all existing laws and regulations established by the federal government, its agencies and this state for that purpose. L. For the purposes of this section, "PERMANENT SUPPORTIVE HOUSING" MEANS LONG-TERM HOUSING ASSISTANCE PAIRED WITH SUPPORTIVE SERVICES AIMED AT INDIVIDUALS EXPERIENCING HOMELESSNESS OR individuals WITH SPECIAL NEEDS.END_STATUTE Sec. 4. Section 41-3955, Arizona Revised Statutes, is amended to read: START_STATUTE41-3955. Housing trust fund; purpose; annual report A. The housing trust fund is established, and the director shall administer the fund. The fund consists of monies from unclaimed property deposited in the fund pursuant to section 44-313, monies transferred pursuant to section 35-751 and investment earnings. B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. C. Except as provided in subsection D of this section, fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44-313, subsection A, A portion of fund monies shall be used exclusively for housing in rural areas. D. Fund monies may be spent on constructing or renovating facilities and on housing assistance, including support services, for persons who have been determined to be seriously mentally ill and to be chronically resistant to treatment. fund monies shall be spent in the following order of priority: 1. CONSTRUCTING OR RENOVATING EMERGENCY SHELTER FACILITIES SO THAT THERE IS A SUFFICIENT NUMBER OF BEDS AVAILABLE TO MEET THE NEED FOR EMERGENCY SHELTER. THE NUMBER OF EMERGENCY SHELTER BEDS must EXCEED THE SUM OF THE UNSHELTERED HOMELESS POPULATION AND THE HOMELESS POPULATION IN EMERGENCY SHELTER, AS REFLECTED IN THE LATEST POINT-IN-TIME COUNT, AS WELL AS THE SPECIFIC SHELTER NEEDS OF ALL OF THE FOLLOWING: (a) households with children, including parenting youth who are in emergency shelter or who are unsheltered. (b) unaccompanied youth who are in emergency shelter or who are unsheltered. (c) victims of domestic violence who are in emergency shelter or who are unsheltered. 2. Constructing or renovating transitional housing units so that there is a sufficient number of units available to meet the need for transitional housing, taking into account the population likely to achieve independent, unsubsidized housing if served under the terms of transitional housing for a duration of twenty-four to thirty-six months, as determined by the department. 3. Constructing or renovating other types of shelter or housing as determined by the department to best serve the needs of INDIVIDUALS who have been determined to be seriously mentally ill and chronically resistant to treatment. E. For the purposes of subsection C of this section, in approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low-income families and that provide housing and shelter to families that have children. F. All programs established by the department and funded by the housing trust fund pursuant to this section shall require prior review by the Joint Legislative Budget Committee. F. G. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall also include the number of individuals who benefit from housing assistance pursuant to subsection D of this section. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, not later than September 1 of each year. G. H. Monies in the housing trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. H. I. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund. I. J. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.END_STATUTE Sec. 5. Title 41, chapter 37, article 2, Arizona Revised Statutes, is amended by adding section 41-3958, to read: START_STATUTE41-3958. Comprehensive performance measurement system; tracking system; wire transfer protocols; reporting requirements; definitions A. The department shall: 1. establish and implement a comprehensive performance measurement system within twelve months after the effective date of this section. The comprehensive performance measurement system shall require all of the following: (a) Annual goals with measurable benchmarks for each housing program in this state. (b) Mechanisms for data collection and review to assess the effectiveness of the housing programs administered by the department. (c) Quarterly reporting to the president of the senate and the speaker of the house of REPRESENTATIVES regarding program performance outcomes, suggested improvements for affordable housing, reductions in homelessness and other key metrics. 2. conduct a biennial evaluation of all housing programs in this state to assess program alignment with state housing goals and ensure compliance with all statutory requirements. 3. establish secure wire transfer protocols to mitigate fraud risks, including all of the following: (a) Dual authorization for all wire transfers exceeding $10,000. (b) WORKing WITHIN THE DEPARTMENT'S AUTHORITY TO IMPLEMENT REal-time fraud detection and reporting measures integrated into the financial management system. (c) Mandatory reconciliation and auditing of all wire transfers on a monthly basis. 4. conduct biennial reviews of regulatory fees associated with manufactured housing in this state to ensure alignment with regulatory costs. Any proposed fee changes shall be submitted to the Board of Manufactured Housing established by section 41-4009 for approval and are subject to a thirty-day public comment PERIOD. ALL complaints related to manufactured housing must be resolved within the United states Department of Housing and urban development guidelines pursuant to 24 Code of federal regulations part 3288. 5. establish a tracking system that Monitors complaint resolution timelines. The department shall provide quarterly reports regarding any unresolved complaints to the Board of Manufactured Housing, the president of the senate and the speaker of the house of representatives. 6. require ALL STAFF to COMPLETE A CONFLICT OF INTEREST DISCLOSURE FORM ANNUALLY, REVIEW ALL FORMS TO DETERMINE WHETHER THERE ARE ANY SUBSTANTIAL INTEREST DISCLOSURES AND MAINTAIN A SPECIAL FILE OF ALL SUBSTANTIAL INTEREST DISCLOSURES. B. the department shall report Any instance of fraudulent activity involving state monies to the governor, the Joint Legislative Budget Committee and the Auditor General within ten business days. the department shall initiate Restitution efforts within thirty days after identifying the fraudulent activity. C. For the purposes of this section: 1. "Comprehensive performance measurement system" means A systematic process for tracking, evaluating and reporting on program outcomes, including establishing goals, performance benchmarks and measurable outcomes. 2. "Wire transfer protocols" means Secure processes and standards to prevent unauthorized financial transfers.END_STATUTE Sec. 6. Quarterly reporting; delayed repeal A. The Arizona department of housing shall provide quarterly reports to the president of the senate and the speaker of the house of representatives regarding the use of monies from the housing trust fund pursuant to section 41-3955, Arizona Revised Statutes, as amended by this act, that include all of the following: 1. Details on all financial transactions in the housing trust fund. 2. Detailed information on recipients of monies from the housing trust fund and any projected and realized results and analyses of the performance of the housing trust fund in comparison to the goals of the housing trust fund. B. The Arizona department of housing shall also conduct a review of approved and paid payment requests since July 1, 2021 to identify any improper payments made to grantees and how to recover those monies. The status of the review and recovery activities shall be outlined in the quarterly reports pursuant to subsection A of this section. C. This section is repealed from and after December 31, 2026. Sec. 7. Auditor general; presentation; follow-up The auditor general shall appear before the appropriate committee of reference and the joint legislative audit committee to present the eighteen-month follow-up of the sunset report for the Arizona department of housing. Sec. 8. Purpose Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona department of housing to address the affordable housing issues confronting this state, including housing issues of low and moderate income families, housing affordability, housing for special needs populations and decaying housing stock, to maintain standards of quality and safety for manufactured homes, factory-built buildings, mobile homes and accessory structures and to adjudicate complaints regarding and ensure compliance with the Arizona mobile home parks residential landlord and tenant act. Sec. 9. Retroactivity Sections 1 and 2 of this act apply retroactively to from and after July 1, 2025.
Be it enacted by the Legislature of the State of Arizona:
Section 1. Repeal
Section 41-3025.06, Arizona Revised Statutes, is repealed.
Sec. 2. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3029.15, to read:
START_STATUTE41-3029.15. Arizona department of housing; termination July 1, 2029
A. The ARizona department of housing terminates on July 1, 2029.
B. Title 41, chapter 37 and this section are repealed on January 1, 2030. END_STATUTE
Sec. 3. Section 41-3953, Arizona Revised Statutes, is amended to read:
START_STATUTE41-3953. Department powers and duties; definition
A. The department is responsible for establishing policies, procedures and programs that the department is authorized to conduct to address the affordable housing issues confronting this state, including housing issues of low income low-income families, moderate income moderate-income families, housing affordability, special needs populations and decaying housing stock. Among other things, the department shall provide to qualified housing participants and political subdivisions of this state financial, advisory, consultative, planning, training and educational assistance for the development of safe, decent and affordable housing, including housing for low and moderate income households. The department is responsible for maintaining and enforcing standards of quality and safety for manufactured homes, mobile homes and factory-built buildings.
B. Under the direction of the director, the department shall:
1. Establish guidelines applicable to the programs and activities of the department for the construction and financing of affordable housing and housing for low and moderate income households in this state. These guidelines shall meet or exceed all applicable state or local building and health and safety code requirements and, if applicable, the national manufactured home construction and safety standards act of 1974 and title VI of the housing and community development act of 1974 (P.L. 93-383 96-399, as amended by P.L. 95-128, 96-153 and 96-339). Guidelines established pursuant to this paragraph do not apply to the department's activities prescribed in section 35-726, subsection E.
2. Accept and allocate any monies as from time to time may be appropriated by the legislature for the purposes set forth in this article.
3. Perform other duties necessary to administer this chapter.
4. Perform the duties prescribed in sections 35-726 and 35-728.
5. Stimulate and encourage all local, state, regional and federal governmental agencies and all private persons and enterprises that have similar and related objectives and purposes, cooperate with the agencies, persons and enterprises and correlate department plans, programs and operations with those of the agencies, persons and enterprises.
6. Conduct research on its own initiative or at the request of the governor, the legislature or state or local agencies pertaining to any department objectives.
7. Provide information and advice on request of any local, state or federal agencies, private persons and business enterprises on matters within the scope of department activities.
8. Consult with and make recommendations to the governor and the legislature on all matters concerning department objectives.
9. Make annual reports to the governor and the legislature on its activities, including the geographic location of its activities, its finances and the scope of its operations. The annual reports submitted pursuant to this paragraph shall also include all of the following outcome-based metrics for department-funded projects and INITIATIVES:
(a) The number of affordable housing units developed in this state.
(b) any Changes in homelessness rates in this state due to permanent supportive housing initiatives.
(c) Any Improvements in housing accessibility for underserved and rural populations in this state.
10. Maintain and enforce standards of quality and safety for manufactured homes, mobile homes and factory-built buildings and enforce rules adopted by the board pursuant to section 41-4010.
11. as a condition of funding for programs that receive grants or other sources of funding from the department, Establish standards concerning the prohibition of the sale, manufacture or possession of dangerous drugs and narcotic drugs as defined in section 13-3401 in facilities or programs funded by the department. The standards established pursuant to this paragraph shall include clear signage on facilities denoting a drug-free zone and an expectation of cooperation with law enforcement regarding any violations pursuant to section 13-3408, subsection A, paragraph 7. A grantee's refusal to comply with these standards disqualifies the grantee from receiving any future funding from the department.
C. Under the direction of the director, the department may:
1. Assist in securing construction and mortgage financing from public and private sector sources.
2. Assist mortgage financing programs established by industrial development authorities and political subdivisions of this state.
3. Assist in the acquisition and use of federal housing assistance programs pertinent to enhance the economic feasibility of a proposed residential development.
4. Assist in the compliance of a proposed residential development with applicable federal, state and local codes and ordinances.
5. Prepare and publish planning and development guidelines for the establishment and delivery of housing assistance programs.
6. Contract with a federal agency to carry out financial work on the federal agency's behalf and accept payment for the work.
7. Subcontract for the financial work prescribed in paragraph 6 of this subsection and make payments for that subcontracted work based on the expectation that the federal agency will pay for that work.
8. Accept payment from a federal agency for work prescribed in paragraph 6 of this subsection and deposit those payments in the Arizona department of housing program fund established by section 41-3957.
9. Contract for the services of outside advisers, consultants and aides reasonably necessary or desirable to enable the department to adequately perform its duties.
10. Contract for and incur obligations reasonably necessary or desirable within the general scope of department activities and operations to enable the department to adequately perform its duties.
11. Use any media of communication, publication and exhibition in the dissemination of information, advertising and publicity in any field of its purposes, objectives or duties.
12. Adopt rules deemed necessary or desirable to govern its procedures and business.
13. Contract with other agencies in furtherance of any department program.
14. Use monies, facilities or services to provide contributions under federal or other programs that further the objectives and programs of the department.
15. Accept gifts, grants, matching monies or direct payments from public or private agencies or private persons and enterprises for the conduct of programs that are consistent with the general purposes and objectives of this article and deposit these monies in the Arizona department of housing program fund established by section 41-3957.
16. Establish and collect fees and receive reimbursement of costs in connection with any programs or duties performed by the department and deposit the fees and cost reimbursements in the Arizona department of housing program fund established by section 41-3957.
17. Provide staff support to the board of manufactured housing.
D. For the purposes of this section, the department is exempt from chapter 23 of this title.
E. The department is the designated state public housing agency as defined in the United States housing act of 1937 (42 United States Code sections 1401 through 1440) for the purpose of accepting federal housing assistance monies and may participate in the housing assistance payments program. Federal monies may be secured for all areas of this state subject only to the limitations prescribed in subsection F of this section.
F. For areas of this state where an existing public housing authority has not been established pursuant to section 36-1404, subsection A, the department acting as a public housing agency may undertake all activities under the section 8 tenant-based rental housing assistance payment program, except that the department shall not undertake a section 8 tenant-based rental housing assistance payment program within the boundaries of a city, town or county unless authorized by resolution of the governing body of the city, town or county. If the department accepts monies for a section 8 tenant-based rental housing assistance payment program for areas of this state where an existing public housing authority has been established pursuant to section 36-1404, subsection A, the department shall only accept and secure federal monies to provide housing for the seriously mentally ill or other populations with disabilities. The department may accept and secure federal monies for undertaking all contract administrator activities authorized under a section 8 project-based rental housing assistance payment program in all areas of this state and this participation does not require the authorization of any local governing body.
G. The department shall not itself directly own, construct, operate or rehabilitate any housing units, except as may be necessary to protect the department's collateral or security interest arising out of any department programs.
H. Notwithstanding any other provision of this section, the department may obligate monies as loans or grants applicable to programs and activities of the department for the purpose of providing housing opportunities for low or moderate income households or for housing affordability or to prevent or combat decaying housing stock. Unless otherwise required by federal or state law, any loan repayments shall be deposited in the Arizona department of housing program fund established by section 41-3957.
I. For any construction project financed by the department pursuant to subsection C of this section, except for contract administration activities in connection with the project-based section 8 program, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.
J. The department has the administrative responsibility through its hearing officer function concerning alleged violations of the Arizona mobile home parks residential landlord and tenant act under title 33, chapter 11.
K. The Arizona department of housing shall act consistently with the minimum standards of the United States department of housing and urban development so as to be designated the "state inspector" for manufactured homes and related industries. The Arizona department of housing shall implement all existing laws and regulations established by the federal government, its agencies and this state for that purpose.
L. For the purposes of this section, "PERMANENT SUPPORTIVE HOUSING" MEANS LONG-TERM HOUSING ASSISTANCE PAIRED WITH SUPPORTIVE SERVICES AIMED AT INDIVIDUALS EXPERIENCING HOMELESSNESS OR individuals WITH SPECIAL NEEDS.END_STATUTE
Sec. 4. Section 41-3955, Arizona Revised Statutes, is amended to read:
START_STATUTE41-3955. Housing trust fund; purpose; annual report
A. The housing trust fund is established, and the director shall administer the fund. The fund consists of monies from unclaimed property deposited in the fund pursuant to section 44-313, monies transferred pursuant to section 35-751 and investment earnings.
B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
C. Except as provided in subsection D of this section, fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44-313, subsection A, A portion of fund monies shall be used exclusively for housing in rural areas.
D. Fund monies may be spent on constructing or renovating facilities and on housing assistance, including support services, for persons who have been determined to be seriously mentally ill and to be chronically resistant to treatment. fund monies shall be spent in the following order of priority:
1. CONSTRUCTING OR RENOVATING EMERGENCY SHELTER FACILITIES SO THAT THERE IS A SUFFICIENT NUMBER OF BEDS AVAILABLE TO MEET THE NEED FOR EMERGENCY SHELTER. THE NUMBER OF EMERGENCY SHELTER BEDS must EXCEED THE SUM OF THE UNSHELTERED HOMELESS POPULATION AND THE HOMELESS POPULATION IN EMERGENCY SHELTER, AS REFLECTED IN THE LATEST POINT-IN-TIME COUNT, AS WELL AS THE SPECIFIC SHELTER NEEDS OF ALL OF THE FOLLOWING:
(a) households with children, including parenting youth who are in emergency shelter or who are unsheltered.
(b) unaccompanied youth who are in emergency shelter or who are unsheltered.
(c) victims of domestic violence who are in emergency shelter or who are unsheltered.
2. Constructing or renovating transitional housing units so that there is a sufficient number of units available to meet the need for transitional housing, taking into account the population likely to achieve independent, unsubsidized housing if served under the terms of transitional housing for a duration of twenty-four to thirty-six months, as determined by the department.
3. Constructing or renovating other types of shelter or housing as determined by the department to best serve the needs of INDIVIDUALS who have been determined to be seriously mentally ill and chronically resistant to treatment.
E. For the purposes of subsection C of this section, in approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low-income families and that provide housing and shelter to families that have children.
F. All programs established by the department and funded by the housing trust fund pursuant to this section shall require prior review by the Joint Legislative Budget Committee.
F. G. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall also include the number of individuals who benefit from housing assistance pursuant to subsection D of this section. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, not later than September 1 of each year.
G. H. Monies in the housing trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.
H. I. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund.
I. J. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.END_STATUTE
Sec. 5. Title 41, chapter 37, article 2, Arizona Revised Statutes, is amended by adding section 41-3958, to read:
START_STATUTE41-3958. Comprehensive performance measurement system; tracking system; wire transfer protocols; reporting requirements; definitions
A. The department shall:
1. establish and implement a comprehensive performance measurement system within twelve months after the effective date of this section. The comprehensive performance measurement system shall require all of the following:
(a) Annual goals with measurable benchmarks for each housing program in this state.
(b) Mechanisms for data collection and review to assess the effectiveness of the housing programs administered by the department.
(c) Quarterly reporting to the president of the senate and the speaker of the house of REPRESENTATIVES regarding program performance outcomes, suggested improvements for affordable housing, reductions in homelessness and other key metrics.
2. conduct a biennial evaluation of all housing programs in this state to assess program alignment with state housing goals and ensure compliance with all statutory requirements.
3. establish secure wire transfer protocols to mitigate fraud risks, including all of the following:
(a) Dual authorization for all wire transfers exceeding $10,000.
(b) WORKing WITHIN THE DEPARTMENT'S AUTHORITY TO IMPLEMENT REal-time fraud detection and reporting measures integrated into the financial management system.
(c) Mandatory reconciliation and auditing of all wire transfers on a monthly basis.
4. conduct biennial reviews of regulatory fees associated with manufactured housing in this state to ensure alignment with regulatory costs. Any proposed fee changes shall be submitted to the Board of Manufactured Housing established by section 41-4009 for approval and are subject to a thirty-day public comment PERIOD. ALL complaints related to manufactured housing must be resolved within the United states Department of Housing and urban development guidelines pursuant to 24 Code of federal regulations part 3288.
5. establish a tracking system that Monitors complaint resolution timelines. The department shall provide quarterly reports regarding any unresolved complaints to the Board of Manufactured Housing, the president of the senate and the speaker of the house of representatives.
6. require ALL STAFF to COMPLETE A CONFLICT OF INTEREST DISCLOSURE FORM ANNUALLY, REVIEW ALL FORMS TO DETERMINE WHETHER THERE ARE ANY SUBSTANTIAL INTEREST DISCLOSURES AND MAINTAIN A SPECIAL FILE OF ALL SUBSTANTIAL INTEREST DISCLOSURES.
B. the department shall report Any instance of fraudulent activity involving state monies to the governor, the Joint Legislative Budget Committee and the Auditor General within ten business days. the department shall initiate Restitution efforts within thirty days after identifying the fraudulent activity.
C. For the purposes of this section:
1. "Comprehensive performance measurement system" means A systematic process for tracking, evaluating and reporting on program outcomes, including establishing goals, performance benchmarks and measurable outcomes.
2. "Wire transfer protocols" means Secure processes and standards to prevent unauthorized financial transfers.END_STATUTE
Sec. 6. Quarterly reporting; delayed repeal
A. The Arizona department of housing shall provide quarterly reports to the president of the senate and the speaker of the house of representatives regarding the use of monies from the housing trust fund pursuant to section 41-3955, Arizona Revised Statutes, as amended by this act, that include all of the following:
1. Details on all financial transactions in the housing trust fund.
2. Detailed information on recipients of monies from the housing trust fund and any projected and realized results and analyses of the performance of the housing trust fund in comparison to the goals of the housing trust fund.
B. The Arizona department of housing shall also conduct a review of approved and paid payment requests since July 1, 2021 to identify any improper payments made to grantees and how to recover those monies. The status of the review and recovery activities shall be outlined in the quarterly reports pursuant to subsection A of this section.
C. This section is repealed from and after December 31, 2026.
Sec. 7. Auditor general; presentation; follow-up
The auditor general shall appear before the appropriate committee of reference and the joint legislative audit committee to present the eighteen-month follow-up of the sunset report for the Arizona department of housing.
Sec. 8. Purpose
Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona department of housing to address the affordable housing issues confronting this state, including housing issues of low and moderate income families, housing affordability, housing for special needs populations and decaying housing stock, to maintain standards of quality and safety for manufactured homes, factory-built buildings, mobile homes and accessory structures and to adjudicate complaints regarding and ensure compliance with the Arizona mobile home parks residential landlord and tenant act.
Sec. 9. Retroactivity
Sections 1 and 2 of this act apply retroactively to from and after July 1, 2025.