AZ HB2584

Repeals Arizona Revised Statutes section 41-194.01, which authorized the state attorney general to withhold revenue sharing distributions to counties, cities, or towns found to violate state law or the Arizona Constitution.

Removes the withholding mechanism from section 42-5029 (transaction privilege and severance tax distributions) that allowed the state treasurer to withhold distributions to noncompliant local governments until violations were resolved.

Removes the withholding mechanism from section 43-206 (urban revenue sharing fund distributions) that allowed the state treasurer to withhold distributions to noncompliant cities and towns until violations were resolved.

Eliminates the requirement that withheld revenues be redistributed among other compliant counties, cities, and towns proportional to their population.

Ends the state's ability to enforce state law compliance by local governments through revenue distribution withholding, while preserving withholding authority for bond debt service obligations and development authority defaults.