AZTC CEO Update: 2026 Arizona State Legislative Session Recap

Arizona Technology Council 2026 Legislative Session Recap

The Arizona Legislature adjourned its 2026 session after 152 days marked by lengthy budget negotiations, significant policy debates and another year of divided government. Despite those challenges, the Arizona Technology Council remained an active voice at the Capitol, advocating for policies that strengthen Arizona’s innovation economy, expand our workforce pipeline and support long-term economic competitiveness.

While not every outcome aligned with our priorities, this session produced several meaningful wins for Arizona’s technology community while setting the stage for important discussions that will continue into 2027.

2026 Legislative Session at a Glance

By the Numbers

• 152-day legislative session
• 2,030 bills introduced
• 415 bills sent to the Governor
• 264 bills signed into law
• 151 gubernatorial vetoes
• $18.3 billion FY2027 bipartisan state budget approved

Despite the volume of legislation, only about 20% of bills introduced ultimately reached the Governor’s desk, highlighting just how competitive and consequential the legislative process remains.

Council Wins & Key Outcomes

State Seal of Computer Science Proficiency signed into law

The Council’s top legislative priority became reality with the passage of HB 2764, creating Arizona’s new State Seal of Computer Science Proficiency.

The voluntary diploma seal recognizes high school graduates who demonstrate advanced computer science knowledge while encouraging more schools to offer rigorous computer science pathways. As Arizona continues attracting semiconductor manufacturers, aerospace companies, AI innovators and advanced manufacturers, investing in tomorrow’s technology workforce has never been more important.

This legislation is a meaningful step toward ensuring Arizona students graduate with the skills employers increasingly need—and receive recognition for achieving them.

Economic development tools expanded

Arizona strengthened its ability to compete for major manufacturing and technology investments by increasing the cap on public infrastructure improvements supporting manufacturing projects from $200 million to $350 million over the next three years.

This expanded capacity gives cities and counties additional resources to attract transformational employers while supporting long-term economic growth throughout Arizona.

The budget also incorporated significant federal tax conformity provisions that benefit Arizona businesses, including:

• Restoration of full domestic R&D expensing
• Permanent full expensing for qualifying business property
• Increased small business expensing limits
• Improved business interest deductions
• Permanent Opportunity Zone provisions

Together, these measures help reinforce Arizona’s reputation as a competitive place to invest, innovate and grow.

Protecting Arizona’s Energy Future

Reliable, affordable energy remains fundamental to Arizona’s continued economic growth.

Throughout the session, the Council actively opposed legislation that would have unnecessarily limited renewable energy development or created barriers for future energy infrastructure. Working alongside industry partners, we successfully helped prevent several of these proposals from advancing.

Alongside industry partners, the Council also successfully advocated to preserve Arizona’s renewable energy tax credits after they were initially targeted for repeal during budget negotiations, an important outcome for maintaining a diverse and resilient energy portfolio that supports economic development across the state.

Innovation incentives face new challenges

Not every outcome aligned with the Council’s priorities.

The final budget repealed Arizona’s refundable Research & Development Tax Credit, a program the Council helped establish more than a decade ago that has supported hundreds of early-stage technology companies and entrepreneurs.

While disappointing, we remain committed to working with lawmakers to identify new strategies that encourage research, commercialization and startup growth throughout Arizona.

Data center tax credit placed on pause

Few issues generated more discussion this year than data centers.

The final budget establishes a three-year moratorium on new Computer Data Center Tax Credit certifications beginning July 1, 2026. Existing projects already participating in the program remain unaffected, and the moratorium does not prohibit construction of new data centers in Arizona.

Because data centers are an essential component of Arizona’s growing digital economy, the Council will continue engaging policymakers to ensure Arizona remains competitive for future technology investment while addressing legitimate concerns surrounding infrastructure, water and energy.

Looking Ahead

Although the Legislature has adjourned, many of this year’s biggest issues remain unresolved.

Proposition 123, long-term Colorado River management, education funding, data center policy and several ballot referrals will all continue to shape Arizona’s policy landscape over the coming year. Combined with highly competitive statewide and legislative elections this fall, 2026 promises to be another pivotal year for Arizona’s innovation economy.

The Arizona Technology Council will continue serving as the voice of Arizona’s technology community, working alongside legislators, state leaders and our members to advance policies that foster innovation, strengthen Arizona’s workforce, support entrepreneurs and keep our state at the forefront of technology and economic growth.

Looking Ahead to November

While the legislative session has concluded, our advocacy work is far from over.

This fall, Arizona voters will elect leaders who will shape the policies impacting our state’s innovation economy for years to come. To help members make informed decisions, the Arizona Technology Council has once again published its 2026 Vote TechSmart Guide, identifying legislative candidates who support policies that strengthen Arizona’s technology sector, foster innovation and promote a competitive business climate.

Every two years, members of the Council’s Public Policy Committee devote countless hours to evaluating candidates through questionnaires, voting records and interviews to determine which candidates best align with the Council’s public policy priorities. The result is a trusted, nonpartisan resource that highlights candidates committed to advancing Arizona’s technology economy across each of the state’s 30 legislative districts.

Just as important is the work of the Arizona Technology Council Political Action Committee (PAC). For nearly two decades, the PAC has helped support pro-technology candidates, regardless of political affiliation, who understand the importance of innovation, workforce development and economic growth.

If you value the Council’s advocacy efforts, I encourage you to consider supporting the PAC. Every contribution, whether $25, $50, $100 or more, helps strengthen our collective voice at the Capitol and supports candidates who champion policies that benefit Arizona’s technology community.

Your investment helps us:

• Support candidates who share our technology and innovation priorities.
• Advocate for policies that strengthen Arizona’s economy and business climate.
• Educate voters and policymakers on issues critical to our state’s technology sector.

Together, we can help ensure Arizona remains one of the nation’s premier destinations for technology companies, entrepreneurs and innovators.

To contribute to the Arizona Technology Council PAC, please visit our secure donation page or contact me directly to learn more about how you can get involved.

Advocacy is most effective when it’s backed by engaged members.

Thank you to our Public Policy Committee, Council staff, Public Policy Partners and the many Council members who shared their expertise, met with legislators and helped shape the Council’s advocacy efforts throughout the 2026 legislative session.

Your engagement strengthens Arizona’s technology community and ensures we continue to have a credible, influential voice at the Capitol.

Thank you for your continued partnership and support.