EPA Administrator Lee Zeldin visited Arizona Tuesday to announce proposed approval of Maricopa County Rule 204, an emissions-reduction program intended to help businesses invest and expand while improving air quality.

The announcement followed a roundtable with business leaders and elected officials. Rule 204 would allow qualifying voluntary emissions reductions from nonroad engines and equipment to generate credits that new or expanding major facilities could use to satisfy federal Clean Air Act offset requirements.

Speaking at the announcement, Zeldin praised the county and business community for finding practical ways to support growth while working toward compliance with federal ozone standards.

“They aren’t increasing emissions and they aren’t breaking federal requirements,” he said. “They are finding new innovative ways to work within their circumstances.”

The Arizona ˿����Ƶ of Commerce & Industry welcomed the proposal as an important step toward addressing a longstanding shortage of emissions credits that can constrain economic development.

“This is an important win for cleaner air, economic growth and the kind of practical problem-solving Arizona does best,” ˿����Ƶ President and CEO Danny Seiden said.

Rule 204 would create a financial incentive for owners of equipment such as construction machinery and railroad locomotives to upgrade to cleaner technology. Qualifying reductions could then generate credits for facilities seeking to build or expand.

“For more than a decade, Arizona’s business community has worked to expand the tools available to reduce emissions while giving companies a workable path to invest, expand and create jobs,” Seiden said. “Rule 204 does exactly that: when businesses voluntarily replace older equipment with cleaner technology and achieve real, measurable emissions reductions, those reductions can help make continued economic growth possible.”

Parts of Maricopa County are designated as being in moderate nonattainment of federal ozone standards. Major facilities seeking to build or expand in the affected area must obtain permits and offset increases in emissions.

Under the proposed program, equipment owners that permanently reduce nitrogen oxide or volatile organic compound emissions could trade qualifying reductions as credits to those facilities. EPA said the approach could support industries including high-tech manufacturing and power generation, and that it does not expect the rule to increase emissions in the area.

Maricopa County Board of Supervisors Chair Kate Brophy McGee greeted the announcement with enthusiasm.

“I have been in public service for over 25 years and my dream has come true,” she said, drawing laughter from the audience.

Brophy McGee praised regulators for listening and using incentives, saying Rule 204 could help preserve the county’s quality of life while supporting its economic expansion.

“This plan demonstrates how a healthy environment and growing economy can work together,” she said. “By incentivizing rather than punishing job creators, implementing Maricopa County’s Rule 204 will improve the quality of the air we breathe while enabling key industries to continue investing in our community.”

Supervisor Thomas Galvin called the announcement “a victory for our environment, the economy, and common-sense regulation reform.”

Arizona Commerce Authority President and CEO Sandra Watson said the proposal would strengthen Arizona’s competitiveness and support responsible growth. She credited Gov. Katie Hobbs, Maricopa County and other partners, and recognized Seiden and the ˿����Ƶ for their leadership in advancing the measure.

Seiden also thanked county officials, the governor and federal and state lawmakers from both parties for helping bring the proposal to this point.

“Protecting air quality and maintaining a strong economy do not have to be competing goals, and once again Arizona is showing the rest of the country how smart policy can advance both,” he said.

EPA’s announcement represents proposed approval. The agency said it will hold a 30-day public comment period before taking final action.

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A federal appeals court has left in place a ruling allowing the land exchange tied to the Resolution Copper project to move forward, rejecting a request to reconsider the case. 

The Sept. 29 decision means the Ninth Circuit will not rehear the case after a three-judge panel earlier this year declined to block the exchange. 

The case is part of the long-running legal fight over the proposed Resolution Copper mine in eastern Arizona. 

The project would develop one of the largest untapped copper deposits in the country. the mine could eventually supply up to 25% of U.S. copper demand and support about 3,700 direct and indirect jobs at full production. The company estimates the project could generate up to $61 billion in economic value for Arizona over its operating life.  

Resolution Copper has been in development for more than two decades, with the project moving through federal environmental review, permitting and litigation over the land exchange. The proposed underground mine near Superior is a joint venture between Rio Tinto and BHP. 

Congress authorized the land exchange needed for the project, which involves federal land in the Tonto National Forest. Opponents have challenged the exchange on environmental and religious-freedom grounds, including concerns over Oak Flat, a site sacred to the Western Apache. 

After a three-judge panel declined to block the exchange, opponents asked the Ninth Circuit to reconsider the case. The request failed to win enough support from the court’s active judges. 

Several judges disagreed with that decision. In dissents accompanying the order, they argued that the court should reconsider how federal religious-freedom law applies to the land exchange and its effects on religious practices at Oak Flat.  

Supporters of the project, meanwhile, have argued that its lengthy review and litigation history underscores the need for legal certainty and a clear path forward. 

The Arizona ˿����Ƶ of Commerce & Industry participated in the underlying appeal as an amicus curiae, or friend of the court. 

“This is a significant decision for Resolution Copper and for the broader principle that major projects cannot remain tied up in litigation indefinitely,” said Mike Bailey, general counsel for the Arizona ˿����Ƶ of Commerce & Industry. “This project has been through years of federal review, permitting and court challenges. The Ninth Circuit has now declined another request to revisit the case, and that kind of legal certainty matters when companies are making multibillion-dollar investment decisions that support thousands of jobs and strengthen domestic supply chains.” 

The Sept. 29 order does not necessarily end the litigation, but it closes the door on rehearing the case before the Ninth Circuit. The earlier ruling allowing the land exchange to proceed remains in effect.  

Photo courtesy of Resolution Copper.

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The Arizona Court of Appeals, Division Two has upheld the rejection of two referendum petitions challenging zoning approvals for a proposed Marana data center project, ruling that the petitions failed to meet Arizona’s strict legal requirements for referenda. 

affirms an earlier Pima County Superior Court ruling and leaves the Marana Town Council’s January zoning approvals in place. 

The dispute centered on referendum petitions that were circulated with incomplete copies of the zoning ordinances. 

Arizona law requires referendum petitions challenging zoning decisions to include the full and correct text of the ordinance, along with a legal description of the affected property. Courts have long required strict compliance and construction with those requirements.  

In this case, although still publicly available, the Marana town clerk initially provided referendum organizers with copies of the ordinances that were missing required exhibits containing additional legal descriptions of the properties. Those versions were then used to collect signatures. The town later corrected the omission, but the clerk ultimately rejected the petitions because the documents circulated to voters were incomplete.  

Referendum supporters argued that they had relied on the official documents provided by the town. The Court of Appeals acknowledged the town’s mistake but reiterated that under Arizona law, responsibility for complying with referendum requirements ultimately rests with the proponents circulating the petitions. 

“Regardless of whose mistake leads to a lack of strict compliance with the referendum petition statutes, a referendum petition may not move forward if its proponent fails to strictly comply with the statutory and constitutional provisions,” the court wrote. 

The court also found that the missing exhibits were expressly part of the ordinances themselves and included information about the property rights affected by the zoning changes, including water rights.  

The Arizona ˿����Ƶ of Commerce & Industry participated in the case as an amicus curiae, or friend of the court.  

“This is an important decision for the consistent application of Arizona’s referendum laws,” said Vanessa Pomeroy, chief counsel of the Arizona ˿����Ƶ Legal Center. “The court made clear that strict compliance means strict compliance for referendum petition proponents. Clear, predictable statutory and constitutional requirements are important for voters, communities and businesses alike.” 

The court separately addressed an attempt by the referendum committee to withdraw the petitions after they had been filed. It held that the power to withdraw a petition signature belongs to the individual voter who signed it, not to the committee that collected the signatures.  

For developers and local governments, the ruling adds clarity around the referendum process at a point when land-use challenges can create uncertainty for major development and investment decisions. 

The three-judge panel unanimously affirmed the Superior Court’s judgment in favor of the Town of Marana.  

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A group of bills introduced during Arizona’s 2026 legislative session could have imposed more than $31 billion in new annual costs on the state’s economy if enacted, according to a new analysis from Common Sense Institute Arizona and the Arizona ˿����Ƶ Foundation. 

The annual identified 119 bills involving taxes, labor policy, energy and environmental regulations and other requirements affecting businesses. Researchers were able to quantify the potential costs of 88 of those measures, estimating a combined impact of at least $31.5 billion annually. 

If the bills had taken effect together, the report estimates Arizona could have lost 424,400 jobs, seen per-capita income fall by as much as $4,100 annually and experienced a $48 billion reduction in state gross domestic product. 

None of the 119 bills included in the report became law. 

“Arizona’s economic success is not an accident. It reflects years of policy choices that have kept taxes competitive, preserved a flexible labor environment, cut red tape, and given businesses the confidence to invest and hire here,” Arizona ˿����Ƶ of Commerce & Industry President and CEO Danny Seiden said. “We’re fortunate none of these bills became law. If they had, Arizona’s competitive advantages could have been dramatically undermined. Arizona’s competitive position is strong, but we can’t take it for granted.” 

Among the measures analyzed was an effort to repeal Arizona’s right-to-work protections, which CSI identified as the single proposal with the largest estimated economic impact. The report projected repeal could cost the state between 30,000 and 40,000 jobs and reduce annual economic growth by 21%. 

The analysis also identified nearly $3.8 billion in potential new taxes, including proposals for an additional 3.5% tax on personal income above $250,000 and an 8% tax on income above $1 million. Other measures would have changed corporate tax policy or imposed new payroll taxes on employers. 

Labor-related proposals accounted for more than $17.5 billion in estimated costs. Those bills included mandatory paid-leave programs, changes to scheduling and overtime requirements, minimum wage increases, and additional workplace mandates. 

Another 20 bills related to energy and environmental policy carried an estimated $7.1 billion in costs. Among them were proposals requiring electric utilities to generate at least half of their electricity from renewable sources and imposing new renewable energy and battery storage requirements on data centers. 

Legal and administrative proposals accounted for another estimated $3.3 billion. The measures included rent-control policies, requirements that retailers accept cash, restrictions on pharmacy benefit managers, and other business regulations. 

Katie Ratlief, executive director of CSI Arizona, said the report is intended to examine the cumulative effect of policy decisions rather than any one proposal in isolation. 

“No single policy determines the entire direction of an economy, but policy choices compound over time,” Ratlief said. “That’s exactly why we do this analysis every year. A tax here, a new mandate there, another regulatory requirement somewhere else may not seem significant on its own. But put them all together, and the economic picture can change dramatically.” 

The report also compares Arizona’s recent economic performance with Colorado, pointing to differences in the policy approaches taken by the two states. 

According to the analysis, Arizona’s inflation-adjusted GDP has grown 20% faster than Colorado’s since 2016, reversing the relationship seen during the previous decade. Arizona’s net interstate migration since 2020 is also up 18.5% compared with its average during the 2010s, while Colorado’s has declined by more than 90%. 

CSI estimates Arizona would have about 154,405 fewer workers and $26.4 billion less in real GDP today if the state had followed Colorado’s economic growth trajectory since 2019. 

The report says Colorado has enacted at least 50 measures in recent years that CSI considers detrimental to economic growth, while legislation appearing on Arizona’s annual “Job Killers” lists has not been enacted. 

Arizona ˿����Ƶ Executive Vice President Courtney Coolidge said maintaining the state’s competitiveness will remain important as policymakers address issues including affordability, workforce, energy and water. 

“Arizona’s competitive advantage is something we have built over decades, but it is not permanent,” Coolidge said. “As lawmakers tackle real challenges around affordability, workforce, energy and water, the answer cannot be to make it more expensive to hire people, build projects and grow businesses. We need to solve problems without sacrificing the policies that have made Arizona one of the best states in the country to invest and create jobs.” 

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The Arizona ˿����Ƶ of Commerce & Industry has joined a coalition asking the U.S. Supreme Court to review a federal air-quality rule that business groups say could make it more difficult to permit new manufacturing, energy and infrastructure projects. 

The petition, filed Friday, challenges a 2024 Environmental Protection Agency (“EPA”) National Ambient Air Quality Standard (“NAAQS”) revision that tightened the national standard for fine particulate matter, commonly known as PM2.5. The revision lowered the annual standard from 12 micrograms per cubic meter to 9, a 25% reduction.    

PM2.5 refers to microscopic particles in the air that are small enough to be inhaled deep into the lungs. Under the Clean Air Act, communities that do not meet federal air-quality standards can face additional regulatory requirements, while businesses seeking to build or expand major facilities can face more stringent permitting requirements. 

For businesses, the practical effect is in permitting. The new standard can tighten pre-construction permitting even in areas that met the previous standard, requiring companies to demonstrate that a new or expanded facility will not push air pollution above the federal limit. In areas deemed out of compliance, or “nonattainment,” new projects can face even stricter emissions requirements. 

“Arizona can protect clean air and continue to grow, but we have to be realistic about what these rules mean on the ground,” Arizona ˿����Ƶ President and CEO Danny Seiden said. “When a federal standard makes it harder to permit a new manufacturing plant, energy project or piece of critical infrastructure, that has consequences for investment, jobs and our ability to compete. Businesses need tough rules to also be clear, lawful and workable.” 

The case centers on the process EPA used to adopt the stricter standard. 

The Clean Air Act directs EPA to conduct a “thorough review” of national ambient air-quality standards every five years. The business coalition argues that when the Biden administration’s EPA revised the NAAQS outside that normal cycle, EPA did not complete the same comprehensive scientific review required for a regular five-year revision. The petition says it was the first time EPA had revised a national air-quality standard without completing such a review. In doing so, the EPA also failed to consider the costs of undertaking a discretionary off-cycle review.  

“The issue here is whether EPA can make a major change to an air-quality standard without going through the full review Congress required,” said Vanessa Pomeroy, deputy general counsel and chief counsel of the Arizona ˿����Ƶ Legal Center. “Our position is that it can’t. When a rule can affect permitting, investment and major projects across the country, the process matters.” 

The case has taken an unusual turn since the rule was adopted. 

After initially defending the 2024 rule, the current EPA reversed its position and asked the U.S. Court of Appeals for the D.C. Circuit to vacate the rule, agreeing that the prior administration had not followed the required process and had failed to properly consider costs associated with initiating an off-cycle review. The D.C. Circuit rejected both the business groups’ challenge and EPA’s request and left the rule in place in June. 

The Arizona ˿����Ƶ, U.S. ˿����Ƶ of Commerce, National Association of Manufacturers and other industry groups are now asking the Supreme Court to review that decision. Arizona legislative leaders are also among the petitioners. 

The permitting challenge is compounded by the fact that much of the particulate matter in the air comes from sources businesses cannot directly control. More than 84% comes from non-point sources such as wildfires, construction and road dust, while industrial sources and power plants account for about 16%. 

For Arizona, the case could help determine how easily federal air-quality standards can be tightened outside the normal review cycle and what that means for permitting, investment and major projects. 

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The Arizona Supreme Court has declined to review a legal challenge involving a planned hotel development in Marana, leaving in place an appellate ruling that the project’s development agreement is not subject to referendum.

The Arizona ˿����Ƶ of Commerce & Industry participated through the Arizona ˿����Ƶ Legal Center, filing an amicus curiae brief urging the Supreme Court to let the lower court ruling stand.

“This is a significant result for Marana and for communities across Arizona that rely on a predictable development process,” said Vanessa Pomeroy, chief counsel of the Arizona ˿����Ƶ Legal Center. “The courts have now consistently recognized that the referendum power cannot be used to reopen every administrative action taken to implement a land-use plan that has already been publicly considered and adopted. Businesses need to know that when they follow the rules and a project receives the required approvals, those decisions will carry some measure of finality.”

The case began after Marana rejected referendum petitions challenging a development agreement for a planned hotel project. A Pima County Superior Court judge sided with the town, and the Arizona Court of Appeals later upheld that ruling, finding the agreement carried out an existing development plan and was therefore not subject to referendum.

The agreement covers approximately 19 acres of town-owned property near Marana Main Street and Civic Center Drive and is tied to the Rancho Marana West Town Center Specific Plan, adopted in 2008. The plan calls for a mixed-use town center that could include commercial, retail, office, entertainment, residential and hospitality uses.

Arizonans for Responsible Development sought to place the Town Council’s approval of the agreement before voters. Marana declined to process the petitions, arguing that the resolution implemented an existing development plan rather than creating new policy.

That distinction is central under Arizona law. Legislative actions can generally be challenged through referendum, while administrative actions ordinarily cannot.

In its June ruling, the Court of Appeals said the development agreement “furthers an already-declared policy” and concluded that the resolution was “not legislative but administrative and is therefore not referable.”

The court also rejected the challengers’ broader argument that all municipal development agreements are automatically subject to referendum, finding that state law does not eliminate the traditional distinction between legislative and administrative actions.

Pomeroy said the outcome matters beyond the Marana project because businesses, developers and local governments rely on clear rules and dependable timelines when making investment decisions.

“The referendum is an important constitutional safeguard, but it’s not a tool for creating perpetual uncertainty around approved development,” Pomeroy said. “There has to be a clear line between creating new policy and implementing policy that has already been adopted. That distinction matters for communities, employers and developers trying to move projects forward.”

The Supreme Court’s decision leaves the appellate ruling intact, ending the challengers’ effort to place the development agreement before voters.

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Arizona small businesses struggling with rising health insurance costs will soon have more coverage options after Gov. Katie Hobbs signed HB 2693, legislation spearheaded by the Arizona ˿����Ƶ of Commerce & Industry that expands access to multiple employer welfare arrangements, or MEWAs.

Nationally, the pressure is especially acute for the smallest employers. A 2024 JPMorganChase Institute analysis found that health insurance premiums consumed a larger share of compensation costs for lower-revenue businesses, with firms under $600,000 in annual revenue seeing a median health insurance payroll burden of nearly 12%, compared with 7% for firms above $2.4 million.

Sponsored by Rep. David Livingston (R-Peoria), the legislation allows small employers to join qualifying organizations, like the Arizona ˿����Ƶ, that can negotiate health benefits on behalf of a broader pool of participants. For Arizona’s smaller employers, the MEWA model offers a framework to build greater purchasing power in a market that often gives larger businesses more leverage.

“This bill is about giving small businesses more choices,” Rep. Livingston said. “When employers can come together through an association, they have a better opportunity to access coverage the way larger employers do, with more people in the risk pool and more leverage to manage costs.”

The law also expands eligibility to include sole proprietors, working owners, and employers with as few as two eligible employees. When coverage is available, eligible employers may be able to seek plans through a qualifying statewide chamber of commerce or a statewide business league.

Arizona is not starting from scratch. Similar MEWA models are already in use in other states, including Missouri, where the Missouri ˿����Ƶ Federation’s ˿����Ƶ Benefit Plan has used a MEWA structure since 2017 to help small employers join a larger self-funded pool. The Missouri ˿����Ƶ says the plan has grown to nearly 4,000 covered groups and more than 45,000 covered individuals.

As HB 2693 moves into implementation, Missouri’s experience provides Arizona policymakers and business leaders with a useful point of reference for how a similar model can expand coverage options for small employers.

“HB 2693 allows for greater flexibility, expanded choice, improved stability, and lower costs,” said Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry. “For small businesses working to attract and retain talent, those benefits can make a meaningful difference for employers and employees across Arizona.”

Thanks to this legislation, the ˿����Ƶ is launching a MEWA program that will help Arizona’s small businesses, the backbone of our economy, have access to more affordable and flexible health coverage.

As that program takes shape, the Arizona ˿����Ƶ of Commerce & Industry has created an HB 2693 website where employers can learn more about MEWA and add their support for expanding health coverage options for Arizona small businesses.

For small employers facing rising benefit costs, HB 2693 creates a new option for more stable, affordable coverage, helping businesses better support employees and compete for talent.

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The Arizona Court of Appeals Division Two has upheld a lower court ruling in favor of the Town of Marana in a referendum dispute tied to a planned hotel development.

In a memorandum decision filed June 23, the Court of Appeals affirmed the Pima County Superior Court’s ruling denying requests from Arizonans for Responsible Development to force Marana to process referendum petitions challenging a town development agreement.

The case centered on a Marana resolution approving a development agreement for approximately 19 acres of town-owned property near Marana Main Street and Civic Center Drive. The agreement is tied to the Rancho Marana West Town Center Specific Plan, which was adopted in 2008 and contemplated a mixed-use town center with commercial, retail, office, institutional, entertainment and residential uses.

Arizonans for Responsible Development submitted referendum petitions seeking to refer the resolution to voters. Marana rejected the petitions, arguing the resolution implemented previously adopted policy and was administrative rather than legislative. Under Arizona law, legislative acts may be subject to referendum, while administrative acts generally are not.

The superior court sided with Marana earlier this year, finding the resolution was administrative and not subject to referendum. The Court of Appeals agreed.

The Arizona ˿����Ƶ of Commerce & Industry participated in the case as amicus curiae through the Arizona ˿����Ƶ Legal Center.

“This decision is an important affirmation of the principle that referendum powers cannot be used to relitigate every administrative step needed to carry out an already-approved development plan,” said Mike Bailey, general counsel and director of legal reform programs for the Arizona ˿����Ƶ. “Arizona’s referendum process is an important constitutional right, but there has to be a clear line between creating new policy and implementing policy that has already gone through the public process. That distinction matters for communities, employers and developers who need certainty to move projects forward.”

In its decision, the Court of Appeals said the Marana resolution did not create new policy. Rather, the court found that the development agreement implemented the requirements of the Rancho Marana West Town Center Specific Plan Amendment, which had already been adopted by a 2008 ordinance.

The court wrote that the development agreement “furthers an already-declared policy” and later concluded the resolution was “not legislative but administrative and is therefore not referable.”

The court also rejected the challengers’ broader statutory argument that all development agreements are automatically subject to referendum under Arizona law. The court said Arizona statute does not expand the traditional limits on local referendum power and noted that if the Legislature intended to make all development agreements subject to referendum, “it could have said so clearly.”

Bailey said the ruling is especially important as Arizona communities work to advance projects that support housing, hospitality, commercial development and job creation.

“Economic development depends on a process that is transparent, predictable and fair,” Bailey said. “When a community has already adopted a plan, and a later action simply carries out that plan, businesses should not face endless uncertainty over whether that implementation step can be delayed or derailed. This ruling helps reinforce that common-sense boundary.”

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The Arizona Legislature wrapped up its 2026 session after 153 days, leaving the state’s business community with a mix of accomplishments to celebrate and concerns about Arizona’s long-term competitiveness.

Business leaders pointed to several significant victories, including expanded health coverage options for small employers, additional infrastructure funding to support economic development projects, preservation of key economic development tools, and a bipartisan budget that avoided broad-based tax increases. At the same time, they expressed concern about reductions to public university funding, the repeal of a longstanding job-creation incentive, and policy changes affecting future data center investment.

“Like most sessions in divided government, this legislative session delivered a mixed bag of results for job creators,” said Courtney Coolidge, executive vice president of the Arizona ˿����Ƶ of Commerce & Industry. “The good news is that Arizona continues to demonstrate a commitment to economic growth, competitive tax policy, and job creation. The challenge moving forward is ensuring we don’t undermine the very advantages that have made Arizona one of the most attractive places in the country to invest and grow.”

Among the business community’s top priorities this year was legislation aimed at helping small employers provide affordable health coverage to workers.

HB 2693, sponsored by Rep. David Livingston and signed into law by Gov. Katie Hobbs, creates a pathway for small businesses to join together through a statewide business organization to purchase health coverage. Supporters say the measure will allow smaller employers to increase purchasing power, reduce costs, and provide more stable benefit options.

“Small businesses often face the greatest challenges when it comes to offering competitive health benefits,” Coolidge said. “This legislation creates a voluntary, market-based option that gives employers more flexibility and employees more choices.”

Another significant victory came through the state budget, which included additional funding capacity for Arizona’s Public Infrastructure Program, a tool frequently used to support large-scale economic development projects.

The program helps communities finance roads, water systems, and other infrastructure needed to accommodate major investments. It has been utilized in projects involving companies such as TSMC, Intel, Amkor, and LG Energy Solution Arizona.

“Arizona’s economic success depends on our ability to compete for transformational projects,” Arizona Manufacturers Council Executive Director Grace Appelbe said. “Those investments don’t happen without infrastructure, and communities need tools that allow them to prepare for growth.”

The ˿����Ƶ also praised lawmakers for largely preserving the Arizona Competes Fund, one of the state’s primary economic development incentives. Early budget discussions included proposals to sweep money from the fund to help address budget shortfalls, but the final agreement maintained most of the program.

In addition, the budget included full conformity with recent federal tax changes, avoided broad-based business tax increases, and provided funding to support Arizona’s ongoing Colorado River negotiations.

Still, business leaders say several decisions made during the session could create challenges in the years ahead.

One of the biggest concerns was the repeal of the Quality Jobs Tax Credit, a program designed to encourage companies to create high-wage jobs and make major capital investments in Arizona.

The ˿����Ƶ also expressed concern over a three-year pause on issuing new sales tax exemption certificates for future data center projects. While existing projects will continue under current agreements, supporters of the incentive argue that uncertainty surrounding future projects could make Arizona less competitive in attracting additional investment.

“The state’s economic momentum didn’t happen by accident,” Coolidge said. “For years, Arizona has built a reputation for consistency and predictability. We don’t want to send a message to investors that they can’t plan for the long-term.”

Higher education funding remains another area of concern for the business community.

Arizona employers have increasingly emphasized the importance of workforce development as the state’s economy continues to expand. Business advocates warned that cuts to public universities could affect the talent pipeline needed to support growth in industries ranging from advanced manufacturing and semiconductors to healthcare and technology.

“Workforce remains one of the defining economic issues facing Arizona,” Coolidge said. “If we want to continue attracting investment and creating opportunity, we have to continue investing in the talent that makes those opportunities possible.”

Attention will now shift from the Legislature to voters, who will weigh in on several measures referred to the ballot by lawmakers, as well as potential citizen initiatives that are still gathering signatures.

For Arizona employers, the end of the legislative session marks the beginning of another important phase in shaping the state’s economic future.

“Arizona remains in a strong position,” Coolidge said. “In the months ahead, we’ll encourage voters to elect leaders who will continue making the decisions necessary to stay ahead of states that are competing for the same jobs, investments, and talent.”

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A Maricopa County Superior Court judge has upheld the constitutionality of an Arizona law designed to help mid-sized cities attract large international headquarters projects, delivering a win for state business groups and economic development advocates.

Senate Bill 1543 was passed in 2025 amid debate surrounding Axon Enterprise’s proposed headquarters expansion in Scottsdale, which included plans for housing, hotels, restaurants, and other commercial development surrounding the company’s corporate campus.

Supporters argued the measure would help Arizona compete for major corporate and international headquarters investments by giving qualifying cities additional flexibility for large mixed-use campus developments. Critics, meanwhile, argued the bill amounted to unconstitutional “special legislation” tailored specifically for Axon’s project.

A lawsuit was brought by Scottsdale-based TAAAZE, a political action committee that argued the law improperly carved out special treatment for certain developments and effectively bypassed local referendum efforts.

In a ruling issued late last week, Judge Michael Herrod rejected those claims, finding that the measure serves a broader statewide economic development purpose by helping attract major international headquarters investments to Arizona.

“The statewide problem addressed by A.R.S. § 9-461.19 is attracting international headquarters,” the ruling states. “The legislature has made a determination that to address this problem, cities of middle-sized populations are likely candidates to attract such headquarters.” 

The court further concluded that because the statute could apply to other qualifying cities and projects in the future, it is not a special law.

The Arizona ˿����Ƶ of Commerce & Industry, which filed an amicus brief in the case, said the decision reinforces the state’s ability to compete for major employers and long-term investment.

“This ruling is about much more than a single project,” said Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry. “Arizona’s economic growth depends on our ability to compete for major employers, attract high-wage jobs, and create an environment where companies can invest with confidence. The court recognized that the Legislature has the authority to pursue policies that support statewide economic development and long-term competitiveness.”

Mike Bailey, the ˿����Ƶ’s general counsel and director of legal reform programs, said the ruling should result in additional clarity around the Legislature’s role in zoning and economic development policy.

“The court affirmed an important legal principle here: zoning authority ultimately flows from the state, and the Legislature has broad discretion to address matters of statewide concern,” Bailey said. “The decision also reinforces that laws aimed at encouraging economic development are not unconstitutional simply because they may initially apply to a limited number of jurisdictions or projects.”

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