THE ARIZONA RESILIENT INFRASTRUCTURE & CAPITAL COOPERATIVE FRAMEWORK ACT
One-Page Summary
What It Is: A state-chartered, member-owned public benefit cooperative network that builds permanent common wealth for Arizonans—without expanding government or requiring ongoing taxpayer support.
---
The Core Problem It Solves
1.2 million Arizona workers lack retirement plans. Private markets fail to provide affordable housing, water, energy, and healthcare. Unpaid caregiving and volunteer work has no economic value.
ARICC solves these problems by creating the Arizona Secure Retirement & Stewardship Plan (ASRSP), a voluntary portable retirement account for every worker; building worker-owned cooperatives that deliver essential services on a sliding scale; and creating "Civic Bounties"—payments into retirement accounts for caregiving and community service.
---
How It Works: Dual Capital Tracks
Track 1: State Seed Capital ($5 Million)
The State appropriates $5 million into a Performance Trust Fund. No money is released until independent verifiers confirm specific milestones are met. Every dollar yields a verifiable public asset, satisfying Arizona's Gift Clause.
Track 2: Government Contract Revenue (Primary Capital Source)
ARICC joins the State Purchasing Cooperative and bids on government contracts prioritized by Maslow Phasing—water, housing, energy, healthcare, and food first. Contract revenue funds operations, capitalizes financial cooperatives, and reinvests in Phase 1 projects.
Then it becomes self-perpetuating. Member contributions, bond proceeds, strategic asset reserves, contract revenue, and reinvestment mandates mean no further state money is needed.
---
Centralized Allocation: The Critical Needs Index
All member investments are pooled at the Stewardship Council level. No member may direct their investment to a specific Subchapter, county, municipality, or neighborhood. The Council allocates all capital according to the Critical Needs Index, which prioritizes highest-need communities first. This ensures that Tier 1 counties receive Phase 1 and Phase 2 funding before wealthier Subchapters can accumulate capital.
---
The Asset: ARICC Economic Shares
All ARICC investment vehicles, bounties, and cooperative reinvestment mechanisms acquire ARICC Economic Shares. These shares represent equity in the Strategic Vital Goods Reserve (water rights, energy generation, housing stock, food reserves, medicine, computing capacity) and ARICC's equity interest in all Partner Cooperatives.
Only human beings may own shares. Membership is limited to Arizona residents and member-owners of Partner Cooperatives. Shares may only be transferred to ARICC cooperatives or to qualified members. Ownership remains local. Wealth stays in Arizona.
Worker-owners of Partner Cooperatives receive Economic Shares as part of the reinvestment dividend paid back to ARICC after the cooperative repays its initial capitalization and pays workers a comfortable living wage.
---
The Pathways to Acquire Economic Shares
Arizona Deferred Cooperative Investment Account (ADCIA): Members contribute cash to acquire Economic Shares. State tax subtraction up to $50,000 for a single individual or $100,000 for a married couple filing jointly. Earnings grow tax-deferred. Withdrawals subject to 30 to 60 days' notice. No early withdrawal penalty.
Arizona Secure Retirement & Stewardship Plan (ASRSP): Auto-enrolled retirement accounts for workers. Contributions acquire Economic Shares.
Civic Bounties: Members earn Economic Shares for verified volunteer work, community service, and civic participation. No cash outlay required.
Domestic Stabilization Bounty: Caregivers earn recurring Economic Share deposits for unpaid household management and dependent care labor.
Worker Reinvestment Dividend: Worker-owners receive Economic Shares as profit beyond payroll, not as cash extraction but as equity in the broader cooperative economy.
---
Arizona Resilience Bonds (For Institutional Reserves)
For institutional investors, including the International Cooperative Alliance and its member federations, ARICC issues Arizona Resilience Bonds. These bonds offer fixed returns of 3 to 5 percent over 10-year or longer terms, are backed by project-specific revenue streams, and are suitable for reserve accounting. Institutions hold bonds; human beings hold shares.
---
Run Protection for ADCIA
Withdrawals from ADCIA require 30 to 60 days' notice. During emergencies, the Stewardship Council may suspend withdrawals, impose gates, or distribute in-kind assets such as grain, water, or medicine to prevent fire sales and protect all members.
---
The Economic Logic
ARICC cooperatives invest in high-demand, high-volume necessities. Demand is inelastic. Revenue is predictable.
Sliding-scale pricing ensures the poorest residents pay the lowest prices. Wealthier residents and institutions pay higher prices but still below corporate retail rates. This prevents scalping and flipping.
Worker-owners earn a comfortable living wage. Profit beyond payroll flows back to ARICC as Economic Shares distributed to the workers. The people who build and operate the cooperative economy own its upside.
The SVGR may acquire strategic assets—production facilities, distribution networks, warehouses—when doing so would stabilize markets, prevent monopoly, or protect the cooperative network from predatory pricing.
No mandate to undercut corporate wholesale rates. ARICC prices at cost plus reasonable reinvestment capital. If corporations price-dump, the SVGR waits and acquires their distressed assets.
---
Who Governs It?
A 21-member Arizona Stewardship Council with personal fiduciary duties and personal liability for breach. Members elect their representatives. Charter locks prevent conversion to for-profit status and protect democratic governance.
---
The 20-Year Vision
Phase 1 (Foundational Necessities: water, housing, energy, healthcare, food) completes in all counties by Year 3.
Phase 2 (Community Infrastructure: broadband, computing, transit, international logistics) completes by Year 6.
Phase 3 (Higher-Order: advanced manufacturing, cultural amenities, global exports) completes by Year 9.
By Year 20: working poor poverty below 0.1%. Disabled poverty below 0.5%. Middle class median income $135,000. Arizona supplies 40% of the nation's generic drugs. ARICC Economic Shares are held by hundreds of thousands of Arizonans. Ownership remains local. Wealth stays in Arizona. No community is left behind.
---
Bottom Line
A $5 million seed investment. A constitutionally sound performance trust fund. Government contract revenue as the primary capital source. A self-funding, member-owned cooperative network that builds permanent common wealth without expanding government or requiring ongoing taxpayer support.
The ADCIA tax subtraction is written directly into the bill. Opponents cannot kill it separately. The state funding is conditioned on it taking effect.
---
ARIZONA RESILIENT INFRASTRUCTURE & CAPITAL COOPERATIVE FRAMEWORK ACT
AN ACT
ESTABLISHING THE ARIZONA RESILIENT INFRASTRUCTURE & CAPITAL COOPERATIVE (ARICC); PROVIDING FOR A PERFORMANCE-BASED TRUST FUND FOR STATE CAPITALIZATION; ESTABLISHING SUBCHAPTERS; PROVIDING GOVERNANCE STRUCTURES; PROVIDING FOR COOPERATIVE DEVELOPMENT; AMENDING TITLE 43, ARIZONA REVISED STATUTES, TO AUTHORIZE A STATE TAX SUBTRACTION FOR CONTRIBUTIONS TO THE ARIZONA DEFERRED COOPERATIVE INVESTMENT ACCOUNT (ADCIA); MAKING APPROPRIATIONS; AND PROVIDING FOR CONDITIONAL EFFECTIVE DATES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ARIZONA:
---
SECTION 1. TITLE
This Act shall be known as the "Arizona Resilient Infrastructure & Capital Cooperative Framework Act."
---
SECTION 2. LEGISLATIVE FINDINGS AND DECLARATIONS (PREAMBLE)
The Legislature of the State of Arizona hereby finds and declares:
1. That Arizona faces systemic challenges in providing universal access to essential goods and services, particularly in rural, low-income, and underserved communities where traditional markets consistently fail.
2. That approximately 1.2 million Arizona private-sector workers lack access to employer-sponsored retirement plans, creating both a retirement security crisis and a barrier to building in-state capital.
3. That the State possesses a practical necessity to create innovative mechanisms that convert perpetual public liabilities into productive, citizen-owned assets.
4. That existing Arizona businesses represent invaluable reservoirs of expertise, employment, and community trust that should be preserved during economic transitions.
5. That the principles of democratic ownership and subsidiarity offer effective paths to building lasting community wealth while respecting local control.
6. That building economic resilience requires securing basic necessities before pursuing higher-order investments, following a phased progression based on objective community metrics.
7. That organized labor unions hold essential expertise in workforce representation, sector-specific knowledge, and democratic governance, making them natural partners in building a resilient economy through cooperative ownership.
8. That resilience requires weaving Arizona's vital existing institutions, including public pension systems, universities, tribal nations, utilities, healthcare providers, and community organizations, into a coherent ecosystem, with each contributing their unique strengths toward common prosperity.
9. That the Arizona Legislature is a constitutionally limited citizen legislature, deliberately designed with constrained capacity to prevent the concentration of governmental power and to preserve democratic accountability through elected representation.
10. That this constitutional design, while essential to liberty, creates practical challenges in addressing complex, capital-intensive, long-term public needs such as water infrastructure, affordable housing, rural broadband, and healthcare access.
11. That the appropriate response to these capacity constraints is not to expand government through additional agencies, staff, and regulations, but to empower private, member-owned, democratically governed institutions that can receive public guidance, accept public capital, and execute public priorities without expanding the public payroll or the administrative state.
12. That ARICC and its Subchapters are such private institutions, created by the State, capitalized by the State, guided by elected officials, but governed by their member-owners and operated as private enterprises for public benefit.
13. That this structure enhances, rather than diminishes, the authority of Arizona's elected governing bodies by providing them with capable, accountable, and efficient partners in the private sector.
14. That nothing in this Act delegates legislative power, authorizes the exercise of police power, or creates any governmental entity. ARICC and its Subchapters are private cooperatives, fully subject to all applicable laws, and possess no authority to tax, regulate, or govern.
15. That the most powerful accountability mechanism in American law is not the ballot box but the fiduciary duty owed by directors to the corporations they serve and the members who own them.
16. That directors of ARICC and all Subchapters shall owe personal, legally enforceable fiduciary duties of care, loyalty, and obedience to their cooperatives and members.
17. That breach of these duties subjects directors to personal liability for damages, disgorgement of profits, removal for cause, and such other remedies as are available at law or in equity.
18. That this personal, financial accountability exceeds the accountability of any government official, who enjoys sovereign immunity and whose errors are paid by taxpayers, not personal assets.
19. That ARICC and its Subchapters therefore represent not a reduction in accountability, but an enhancement of accountability, vesting control in member-owners and enforcing performance through personal financial responsibility.
20. That this structure of private governance, democratic control, member ownership, and fiduciary duty creates permanent, self-sustaining, self-correcting institutions that serve public purposes without expanding public bureaucracy or exposing taxpayers to liability for official misconduct.
21. That the State's initial capitalization of ARICC is intended to serve as working capital, not ongoing subsidy. The performance trust fund structure, combined with member capital pathways, bond issuance authority, strategic asset reserves, and reinvestment requirements, is designed to create a self-perpetuating, closed-loop financial ecosystem that requires no further state appropriations after the initial seed capital is deployed.
22. That to encourage private investment in ARICC and its Subchapters, a state tax subtraction for contributions to the Arizona Deferred Cooperative Investment Account (ADCIA) is necessary and appropriate, modeled on the existing subtraction for contributions to 529 college savings plans.
23. Therefore, it is in the public interest to establish a private, member-owned, democratically governed foundational cooperative that shall create subchapters in every county, municipality, ward, district, precinct, and historically redlined neighborhood, building permanent common wealth for all Arizona residents through a parallel cooperative infrastructure, governed by its members, capitalized by the State and local governments, guided by elected officials, and answerable through fiduciary duty to the people who own it.
---
ARTICLE 1: ESTABLISHMENT AND DEFINITIONS
Section 1.1. Short Title
This Act shall be known as the "Arizona Resilient Infrastructure & Capital Cooperative Framework Act."
Section 1.2. Core Definitions
In this Act:
1. "ARICC" means the Arizona Resilient Infrastructure & Capital Cooperative established by this Act.
2. "Foundational Cooperative" means ARICC in its role as the parent cooperative that establishes, charters, capitalizes, and supports County Subchapters.
3. "County Subchapter" means a private, member-owned public benefit cooperative established by ARICC in each of Arizona's fifteen counties.
4. "Municipal Subchapter" means a private, member-owned public benefit cooperative established by a County Subchapter in each incorporated municipality within that county.
5. "Neighborhood Subchapter" means a private, member-owned public benefit cooperative established by a Municipal Subchapter to serve distinct geographic communities within the municipality, including but not limited to wards, districts, precincts, census tract clusters, and Historically Redlined or Disinvested Areas.
6. "Unincorporated Area Subchapter" means a private, member-owned public benefit cooperative established by a County Subchapter to serve residents of unincorporated county territory.
7. "Tribal Subchapter" means a private, member-owned public benefit cooperative established by ARICC in consultation with federally recognized tribal nations.
8. "Spinoff Cooperative" means a Partner Cooperative formed through the conversion of a government program, service, or enterprise.
9. "Partner Cooperative" means any enterprise that completes conversion or formation with ARICC or Subchapter assistance and in which ARICC or a Subchapter may hold a non-controlling stewardship interest, including Spinoff Cooperatives.
10. "Local Stewardship Fund" means the capital pool maintained by each County, Municipal, Neighborhood, Unincorporated Area, and Tribal Subchapter for community investment.
11. "Critical Needs Index" means the objective scoring system developed by ARICC to prioritize deployment based on verifiable community needs.
12. "Foundational Necessities" means goods and services with price inelastic demand that are essential for basic human dignity and community functioning, including but not limited to housing, water, food, energy, healthcare, safety, digital infrastructure, and transportation.
13. "Maslow Phasing" means the community development progression framework requiring basic needs be met before higher-order investments.
14. "Arizona Resilience Bonds" means fixed-income instruments issued to institutional investors.
15. "Sovereign Purpose Fund" means a legally segregated capital pool for projects directly addressing constitutional or statutory duties of the State or any represented elected body, and for Civic Bounties.
16. "Subchapter Bounty Fund" means a legally segregated account within a Subchapter, capitalized from member investments, retained earnings, donations, or other non-Sovereign sources, used exclusively for Member-Governed Civic Bounties.
17. "Labor Integration Pathway" means a formal process by which a recognized labor organization may partner with, form, govern, or convert to a Partner Cooperative while preserving collective bargaining and extending benefits to represented workers.
18. "Institutional Integration" means the formal process by which Arizona's public, private, and civic institutions align their resources, governance, or operations with the Partner Cooperative ecosystem.
19. "Anchor Institution" means a large, place-based organization such as a university, hospital, utility, or government agency that can strategically leverage its procurement, employment, land, and investment to support community wealth building.
20. "County Equity Reserve" means a capital pool within each County Subchapter designated for cross-community redistribution to under-resourced Municipal Subchapters and the Unincorporated Area Subchapter.
21. "Community Investment Board" means the resident-governed body exercising authority over Neighborhood Subchapter investments.
22. "Historically Redlined or Disinvested Area" means any census tract documented in: (a) 1930s HOLC redlining maps (any grade below "A" or "B"); (b) historical banking discrimination records; (c) Superfund or brownfield designations; (d) prior urban renewal or highway construction displacement sites; or (e) current federally designated Qualified Opportunity Zones.
23. "Member" means any Arizona resident who has established an account with ARICC or any Subchapter.
24. "Represented Elected Body" means any county board of supervisors, city or town council, tribal council, school district governing board, community college district governing board, special district board, or other local governmental entity whose members are elected by popular vote.
25. "Corresponding Subchapter" means: (a) for a county board of supervisors, the County Subchapter; (b) for a city or town council, the Municipal Subchapter; (c) for a tribal council, the Tribal Subchapter; (d) for a school district, community college district, or special district, the County Subchapter or Municipal Subchapter within whose jurisdiction the district is located, as determined by the Arizona Stewardship Council; (e) for any other represented elected body, the Subchapter designated by the Arizona Stewardship Council.
26. "Civic Bounty" means a payment deposited directly into the retirement or investment account of an ARICC or Subchapter member upon verification that the member has performed a designated activity that advances a public purpose or community benefit.
27. "Sovereign Fund Civic Bounty" means a Civic Bounty funded by Sovereign Purpose Fund capital, subject to the direction of a Represented Elected Body.
28. "Member-Governed Civic Bounty" means a Civic Bounty funded by a Subchapter Bounty Fund, subject to the direction of a Subchapter board or Community Investment Board.
29. "Designated Activity" means any behavior, action, or outcome that is lawfully performed, advances a public purpose or community benefit, is objectively verifiable, and is designated in advance by a Sovereign Purpose Fund participant or Subchapter board.
30. "Qualifying Verifier" means a local government, qualified 501(c)(3) nonprofit organization, Partner Cooperative, or other entity designated by a Sovereign Purpose Fund participant to verify performance of Designated Activities for Sovereign Fund Civic Bounties.
31. "Peer Verifier" means a Partner Cooperative, trained member, Community Investment Board member, or other person or entity certified by a Subchapter board to verify performance of Designated Activities for Member-Governed Civic Bounties.
32. "Community Stewardship Cycle" means the positive feedback loop whereby members access sliding scale services, perform unpaid community volunteer labor, receive Civic Bounty payments, build retirement wealth, and sustain ongoing civic participation.
33. "Caregiver" means a resident who performs substantial unpaid household management and dependent care labor and is designated by an Employed Resident Worker.
34. "Employed Resident Worker" means a resident who is engaged in substantial paid employment, is an ARICC or Subchapter member, and designates a Caregiver.
35. "Dependent Household Member" means any person residing in the household who is under eighteen and not emancipated, is incapable of self-care due to disability or chronic illness, is age sixty-five or older and requires assistance, or is otherwise dependent on the Caregiver for basic needs.
36. "Domestic Stabilization Bounty" means a recurring Civic Bounty payment deposited into the account of an eligible Caregiver in recognition of unpaid household management and dependent care labor.
37. "Government Program Democratization" means the conversion of a government-operated or government-contracted program, service, or enterprise to a member-owned, democratically governed Partner Cooperative.
38. "Legislated Purpose" means the statutory or regulatory mission, objectives, and service obligations of the government program being converted, which shall be preserved in the Spinoff Cooperative's charter through charter lock provisions.
39. "Incumbent Workers" means employees of the government agency or its contractors who are primarily engaged in the operation of the program being converted.
40. "Incumbent Contractor" means a private for-profit or nonprofit entity currently holding a contract to operate or provide services for the program being converted.
41. "Fair Market Valuation" means the independently determined value of the program's tangible and intangible assets, customer relationships, and going-concern value, conducted by a qualified third-party appraiser.
42. "Competitive Challenge Right" means the right of an incumbent contractor or other qualified entity to demonstrate that it can meet or exceed the performance, cost, and social benefit standards of a proposed Spinoff Cooperative.
43. "Arizona Deferred Cooperative Investment Account (ADCIA)" means a state-chartered custodial account established by the Stewardship Council under Section 2.17 that allows Arizona residents to invest in Subchapters and Partner Cooperatives with state tax benefits.
44. "Take-Home Pay (THP)" means a member's gross income from all sources, minus all federal and state income taxes paid or withheld, minus all contributions to an ADCIA or other member capital accounts.
---
ARTICLE 2: CAPITALIZATION
Section 2.1. Creation of ARICC
ARICC is established as a state-chartered, member-owned public benefit cooperative with perpetual succession, authorized to serve as a Pooled Plan Provider under the federal SECURE Act. ARICC is not an instrumentality of any county, municipality, or other local government. ARICC is a private cooperative governed by its members and the Arizona Stewardship Council.
Section 2.2. State Capitalization — Performance Trust Fund
A. Establishment of the ARICC Strategic Investment Trust Fund. There is established in the State Treasury the ARICC Strategic Investment Trust Fund. The fund is a dedicated, non-lapsing trust fund. Monies in the fund are continuously appropriated to the Arizona Stewardship Council for the purposes set forth in this section.
B. Initial Appropriation. The sum of $5,000,000 is appropriated from the state General Fund to the ARICC Strategic Investment Trust Fund. The Stewardship Council is authorized to seek and accept additional funds from federal grants, philanthropic foundations, private investment, and any other lawful source to supplement this appropriation. The Council shall prioritize earned revenue through government contracts under Section 2.20 as the primary long-term capital source.
C. Trust Purpose and Fiduciary Duty. The Arizona Stewardship Council, as trustee of the fund, holds the monies in trust for the exclusive purpose of capitalizing ARICC through performance-based disbursements. The Council owes a fiduciary duty to the State of Arizona and to the future members of ARICC to ensure that trust monies are disbursed only upon the achievement of verifiable, pre-defined milestones that provide direct, bargained-for consideration to the State and the people of Arizona.
D. Disbursement — The Performance-Based Milestone Model.
1. Milestone Contract. The Arizona Stewardship Council shall enter into a performance-based contract with ARICC. The contract shall define a series of specific, objective, and verifiable milestones.
2. Milestone 1: Establishment and Seating of the Arizona Stewardship Council.
a. Definition. The Arizona Stewardship Council, as described in Article 3 of this Act, has been fully constituted, with all members appointed or elected, sworn, and seated; initial bylaws and governance procedures have been adopted; and the Council is legally empowered to act.
b. Verification. The State Treasurer shall retain a qualified, independent third-party verifier, who shall have no financial interest in ARICC or any Subchapter, to certify in writing whether Milestone 1 has been fully and satisfactorily completed.
c. Disbursement. Upon receipt of the independent verifier's certification, the State Treasurer shall disburse from the ARICC Strategic Investment Trust Fund to the Stewardship Council an amount sufficient to reimburse documented formation costs and to fund initial operating expenses for a period not to exceed six months.
3. Milestone 2: Adoption of the Critical Needs Index.
a. Definition. The Arizona Stewardship Council has developed, adopted, and published the Critical Needs Index as required by Section 5.2 of this Act, using publicly available data and a transparent weighting methodology, with a public comment period of no fewer than thirty days.
b. Disbursement. Upon certification, the State Treasurer shall disburse an amount to fund continued Council operations and staffing, engage technical consultants necessary to establish the first County Subchapters, and begin development of outreach and enrollment infrastructure for the Arizona Secure Retirement and Stewardship Plan (ASRSP).
4. Milestone 3: Establishment of Initial County Subchapters.
a. Definition. The Arizona Stewardship Council has established, in accordance with Article 4 and the Critical Needs Index, the first three County Subchapters in the highest-need jurisdictions, each with adopted bylaws, a Local Stewardship Fund, and a County Equity Reserve.
b. Disbursement. Upon certification, the State Treasurer shall disburse an amount for initial capitalization of the established County Subchapters, continued Council operations, and technical assistance.
5. Milestone 4: Launch of the Arizona Secure Retirement and Stewardship Plan (ASRSP).
a. Definition. The ASRSP is operational, with the capacity to accept member enrollments and contributions; a fee structure has been adopted; service agreements with financial institutions are in place; and Civic Bounty payment infrastructure is functional.
b. Disbursement. Upon certification, the State Treasurer shall disburse an amount for ASRSP operations, outreach and enrollment, and initial Strategic Vital Goods Reserve investments.
6. Milestone 5: First Investment Deployment to Subchapters for Foundational Necessities Projects.
a. Definition. The Arizona Stewardship Council, in coordination with the established County Subchapters, has deployed capital from the ARICC Strategic Investment Trust Fund or from government contract revenue under Section 2.20 to Municipal, Neighborhood, Unincorporated Area, and Tribal Subchapters for specific, verifiable Foundational Necessities projects. Each project shall have a performance-based contract and charter lock provisions.
b. Verification. The independent third-party verifier shall certify in writing whether Milestone 5 has been fully and satisfactorily completed. Verification shall include confirmation that capital was deployed only to highest-need jurisdictions, review of project contracts, and assessment of the public dashboard.
c. Disbursement. Upon certification, the State Treasurer shall disburse an amount determined by the Council and approved by the verifier as reasonable and necessary to fund further capital deployment, Subchapter expansion, technical assistance, and a reserve for contingent obligations not to exceed ten percent of the disbursement.
E. Gift Clause Compliance — Direct Consideration for Public Funds. The Legislature finds and declares that the performance trust fund structure established in this section provides the direct, bargained-for consideration required by Article IX, Section 7 of the Arizona Constitution. No public money is appropriated or disbursed as a gift, grant, or donation. Each disbursement is tied to the completion of a specific, verifiable milestone that provides direct, measurable value to the State.
F. Recapture and Enforcement Provisions.
1. If the Arizona Stewardship Council determines that any milestone payment was made based on materially false or inaccurate certification, or if a Subchapter or Partner Cooperative fails to complete a project or deliver a service for which a milestone payment was made, the Council shall: (a) suspend further disbursements to the affected Subchapter or Partner Cooperative; (b) demand repayment of the disbursement, plus interest at the rate established for state trust fund loans, within thirty days; and (c) if repayment is not made, refer the matter to the Arizona Attorney General for collection.
2. If any trust fund monies are used for purposes other than those certified in the milestone verification, the Stewardship Council shall: (a) immediately suspend further disbursements to the responsible Subchapter or Partner Cooperative; (b) demand immediate repayment of the misused funds, plus interest and penalties; and (c) refer the matter to the Arizona Attorney General for investigation and prosecution of any applicable criminal violations.
3. The Stewardship Council shall conduct, or cause to be conducted, annual audits of all Subchapters and Partner Cooperatives receiving trust fund monies. The Arizona Auditor General may, at the request of the Stewardship Council or the Legislature, conduct additional audits. All audits shall be published on a public dashboard.
4. All Stewardship Council members, and all Subchapter directors and officers with authority over trust fund monies, shall be covered by a fiduciary bond in an amount determined by the Stewardship Council, but not less than: (a) $1,000,000 for Stewardship Council members; and (b) $500,000 for Subchapter directors and officers.
5. The Arizona Attorney General may bring a civil action in superior court against any Stewardship Council member, Subchapter director or officer, or Partner Cooperative manager who knowingly or recklessly makes a false certification, diverts trust fund monies to unauthorized purposes, breaches fiduciary duties, or otherwise violates any provision of this Act with respect to the handling of trust fund monies. Relief may include disgorgement, restitution, civil penalties of up to three times the amount of misused funds, removal from office, and equitable relief.
6. Any member of ARICC or any Arizona resident taxpayer shall have standing to bring an action in superior court to enforce the provisions of this section. The court may award reasonable attorneys' fees and costs to a prevailing plaintiff.
7. No contract, charter provision, or agreement shall waive, limit, or otherwise immunize any Stewardship Council member, Subchapter director or officer, or Partner Cooperative manager from the liability and enforcement provisions of this section.
8. The Stewardship Council may, at its discretion, file a lien against any real or personal property acquired or improved with trust fund monies to secure the State's right to recapture funds in the event of misuse, non-performance, or unauthorized transfer.
G. Contingent Capitalization Condition. The appropriation in subsection B of this section shall not be released until the tax subtraction authorized in Section 2.17(B) has taken effect and is operative under Arizona law. The Arizona Stewardship Council shall certify to the State Treasurer when this condition has been satisfied. The Council may begin operations under Section 2.20 (Government Contract Revenue Track) prior to the release of this appropriation, using contract revenue as initial working capital. If such certification has not occurred by December 31, 2027, the appropriation shall revert to the state General Fund.
H. Five-Year Sunset and Performance Review. The authority to disburse funds from the ARICC Strategic Investment Trust Fund shall sunset five years from the effective date of this Act. Any unexpended balance remaining in the trust fund on that date shall revert to the state General Fund, unless reauthorized by the Legislature following a comprehensive report from the Council demonstrating measurable success in fulfilling the public purpose mandate of this Act.
Section 2.3. Member Capital Pathways
A. Arizona Secure Retirement and Stewardship Plan (ASRSP): voluntary retirement accounts available to all Arizona workers, with automatic enrollment and opt-out provisions.
B. Subchapter Member Investments: members may make additional investments in their County, Municipal, Neighborhood, Unincorporated Area, or Tribal Subchapters.
C. IRA and Qualified Plan Rollovers: the ASRSP shall accept direct rollovers from IRAs, 401(k)s, 403(b)s, 457 plans, and other eligible retirement accounts as permitted by federal law.
D. Employer Adoption Pathways: employers may offer ASRSP as a supplemental plan, primary plan, or conversion option, subject to employee protections including independent fiduciary review, affirmative employee consent, equal or better fee structures, and reporting to the Arizona Attorney General.
E. Layered Contribution Hierarchy: the Stewardship Council may establish a layered contribution system to maximize state tax benefits and pricing subsidies for members, including but not limited to contributions to the Arizona Deferred Cooperative Investment Account (ADCIA) under Section 2.17, contributions to ASRSP, direct Subchapter investments, and Civic Bounty deposits.
Section 2.4. Arizona Resilience Bonds
A. ARICC may issue "Arizona Resilience Bonds" to qualified institutional investors with these mandatory terms: (1) term: ten-year minimum, amortizing structure; (2) returns: fixed rate, three to five percent based on project risk tier; (3) minimum: $1,000,000 per investor; (4) no voting rights: pure financial instrument, no governance rights; (5) no equity conversion: no path to ownership or control.
B. Bond proceeds must be deployed exclusively to Foundational Necessities projects.
C. Bonds must be project-specific with bankruptcy-remote structures.
Section 2.5. Performance Contracting
ARICC may enter Master Services Agreements with state agencies and receive a percentage of independently verified state cost savings achieved through its investments. Such payments shall fund operational costs and member benefit programs.
Section 2.6. Sovereign Fund Access for Represented Elected Bodies
A. Any represented elected body may enter a Sovereign Purpose Fund participation agreement with its corresponding Subchapter, appropriating funds to purchase Series S Preferred Shares or make capital contributions. Such agreements constitute adequate consideration under the Gift Clause.
B. Minimum Terms. (1) Funds shall be held in a legally segregated account; (2) one hundred percent must be deployed to projects addressing the elected body's constitutional or statutory duties or to Civic Bounties; (3) investments must demonstrably reduce documented, recurring public liabilities or achieve measurable public benefits; (4) the elected body retains advisory rights over deployment decisions; (5) the Subchapter shall provide quarterly reports.
C. Prohibited Terms. No agreement may confer voting rights or governance control, permit commingling of funds, or authorize investments prohibited by this Act.
D. Tribal Nations. Federally recognized tribal nations may enter such agreements with Tribal Subchapters. Such agreements shall honor tribal laws, ordinances, and resolutions. Nothing in this Act abrogates tribal sovereignty.
E. Reporting. Each Subchapter shall maintain a public registry of all Sovereign Purpose Fund participation agreements.
Section 2.7. Civic Bounties
A. Any Sovereign Purpose Fund participant may, by public resolution or ordinance, establish Civic Bounty programs offering payments to member accounts for verified performance of designated activities that advance public purposes.
B. Verification and Payment. Upon verification by a Qualifying Verifier, the corresponding Subchapter shall deposit the bounty amount directly into the member's account. Payments are fully vested, owned immediately by the member, and not subject to forfeiture except for fraud.
C. Permissible Categories. Without limiting participant discretion, Civic Bounties may be offered for activities including environmental stewardship, public health, housing and neighborhood stability, workforce development, civic participation, water and energy conservation, food security, digital inclusion, unpaid community volunteer labor, and domestic stabilization (caregiving).
D. Gift Clause Compliance. Civic Bounty payments constitute adequate consideration because the member performs a verified activity that advances a public purpose, the public receives measurable benefit, and payment is proportional to value performed.
E. Prohibited Uses. No Civic Bounty may be offered for any activity already required by law and subject to criminal penalty, any activity that violates law or constitutional rights, voting, campaign activity, or any activity creating impermissible entanglement between government and religion.
Section 2.8. Community Stewardship Cycle
A. The Legislature finds that unpaid community volunteer labor is economically inaccessible to many Arizonans, resulting in civic participation stratified by wealth. The Community Stewardship Cycle, consisting of accessing sliding scale services, performing volunteer labor, receiving Civic Bounties, building retirement wealth, and sustaining ongoing civic participation, creates a permanent, self-sustaining, intergenerational pipeline of community leaders.
B. Authorization. Sovereign Purpose Fund participants and Subchapter boards are expressly authorized to designate categories of Unpaid Community Volunteer Labor as Civic Bounty-eligible activities, including but not limited to neighborhood and community governance, mutual aid, emergency services, youth and education, culture and arts, environmental stewardship, faith-based service, senior and disability services, and veterans and military family support.
C. Youth Community Steward Programs. Subchapters are encouraged to establish Youth Community Steward programs offering age-appropriate Civic Bounty opportunities for minors, with deposits held in custodial accounts until age of majority.
Section 2.9. Domestic Stabilization Bounty
A. The Legislature finds that unpaid care work is economically invisible, carries no Social Security credit, and creates lifelong economic penalties for caregivers, disproportionately women. The Domestic Stabilization Bounty recognizes this labor as economically valuable and capitalizes it into permanent retirement wealth.
B. Definitions. As provided in Section 1.2.
C. Authorization. Any Sovereign Purpose Fund participant or Subchapter board may establish Domestic Stabilization Bounty programs.
D. Verification. Domestic Stabilization Bounties shall be verified by joint, sworn attestation of the Employed Resident Worker and Caregiver. The attestation constitutes prima facie evidence of eligibility. Material misrepresentation constitutes fraud and shall result in forfeiture, recoupment, and referral for criminal prosecution.
Section 2.10. Member-Governed Civic Bounties
The Legislature finds that Sovereign Purpose Fund Civic Bounties represent representative democracy's allocation of civic bounty capital, while Member-Governed Civic Bounties, funded by Subchapter Bounty Funds and governed by Subchapter boards and Community Investment Boards, enable direct democracy's allocation based on community-identified needs and values. Every Subchapter is authorized to establish Member-Governed Civic Bounty programs, funded exclusively from member investments, retained earnings, donations, grants, or other non-Sovereign sources. Such programs are not subject to Sovereign Purpose Fund participation agreement requirements and may use Peer Verifiers for verification.
Section 2.11. Strategic Vital Goods Reserve
A. The Legislature finds that cyclical recessions, inflationary episodes, supply chain disruptions, and currency depreciation disproportionately harm low-income and working-class households. A strategic reserve of vital goods, owned collectively by ARICC members through their Subchapters and Partner Cooperatives, preserves member wealth during inflationary periods, stabilizes supply during disruptions, provides recession-proof returns, attracts institutional investment, democratizes access to real assets, and strengthens community resilience.
B. Authorization. ARICC and each Subchapter are authorized to establish and manage Strategic Vital Goods Reserves, capitalized from Sovereign Purpose Fund allocations, Arizona Resilience Bond proceeds, member investments designated for SVGR participation, retained earnings, donations, and grants.
C. Permissible Asset Classes. Without limiting fiduciary discretion, permissible SVGR asset classes include agricultural land and water rights; commodity reserves (grains, legumes, dried goods, shelf-stable products); energy generation and storage assets; housing stock held by community land trusts and housing cooperatives; strategic materials essential to water, energy, and digital infrastructure; and productive infrastructure including food processing, cold storage, and water treatment facilities.
D. Community Resilience Buffer. Each Subchapter maintaining an SVGR is encouraged to establish a Community Resilience Buffer comprising liquid or near-liquid assets held for stabilizing local prices, mitigating shortages, and meeting emergency needs during disruptions.
Section 2.12. Advance Capital Participation
The Legislature finds that a deliberate prioritization framework places rural, high-need counties first. However, wealthier jurisdictions have expressed interest in accelerating their participation through early investment. Any Tier 3 Jurisdiction or other represented elected body awaiting Subchapter establishment is authorized to purchase Arizona Resilience Bonds, purchase SVGR Participating Shares, enter participation agreements with existing Subchapters (contributing Sovereign Purpose Fund capital to projects in those Subchapters' jurisdictions), prefund member accounts on behalf of their residents, or provide grants or donations to Subchapter Bounty Funds, Community Stewardship programs, or Youth Community Steward programs. No Host Subchapter shall be required to accept Advance Capital Participation. Acceptance is voluntary. Host Subchapters retain full governance authority.
Section 2.13. Retirement Plan Conversion Facilitation Program
A. The Legislature finds that approximately 1.6 million Arizona workers have access to employer-sponsored retirement plans, yet many such plans impose excessive fees, limited investment options, and outdated plan designs. The ASRSP offers institutional-class investment fees, unique asset classes (SVGR), transparent pricing, best-practice plan design, portability, community ownership, and Civic Bounty integration.
B. Authorization. (1) Any employer offering a qualified retirement plan may elect to terminate such plan and offer ASRSP as the primary retirement benefit. Such conversion is voluntary. (2) Any employer may offer ASRSP as a supplemental retirement savings vehicle. (3) ARICC may offer Conversion Incentive Grants to Converting Employers to offset reasonable costs of plan termination, fiduciary review, and employee education. (4) ARICC may offer Rollover Matching Contributions to Converting Employees who roll over IRA, 401(k), or other qualified retirement account balances to ASRSP.
C. Employee Protections. (1) No conversion shall result in a reduction of any employee's vested accrued benefit. (2) Employees shall have the right to opt out of automatic rollover to ASRSP and instead roll over to an IRA of their choice or leave their balance in the existing plan (if permitted). (3) All transferred assets shall receive equal or better fee structures and investment options in ASRSP.
Section 2.14. Fee Structure — Fiduciary Determination
The Arizona Stewardship Council and ASRSP fiduciaries shall determine the ASRSP fee structure in the exercise of their fiduciary duties, with the goal of minimizing member fees to the maximum extent consistent with long-term sustainability, reserve adequacy, investment in growth and innovation, availability of alternative revenue sources, and the overarching fiduciary mandate of Section 2.15. The Council shall establish and may revise the ASRSP fee schedule, conduct public hearings prior to any material fee change, and document fee decisions in writing.
Section 2.15. Fiduciary Mandate — Universal Participation with Sustainable Revenue
A. The Legislature finds that no statute can anticipate every future circumstance, market condition, or technological innovation that may affect the ASRSP's ability to achieve its core mission. ARICC's leadership are fiduciaries, owing duties of care, loyalty, and obedience to the cooperative and its members, including the affirmative obligation to maximize member welfare, minimize costs, expand participation to all eligible Arizonans, ensure sustainability across economic cycles, and innovate continuously in service of the mission.
B. Therefore, the Legislature declares that the ARICC Stewardship Council and ASRSP fiduciaries shall be governed by a single, overriding mandate: "Universalize participation in ASRSP for any Arizona worker who desires retirement security, while maintaining sufficient revenue for ARICC to perform its core mission, achieved in the most practicable and sustainable span of time consistent with fiduciary duties to members."
C. Fiduciary Override. The Council may, by majority vote and documented written findings, modify, suspend, or supersede any provision of Sections 2.2 through 2.14 if the Council determines that such action better serves the mandate. Override decisions shall include the specific provision modified, the alternative approach, the factual basis, expected impacts, and opportunity for member and public comment.
D. Limitations on Override. No override shall impair vested rights of members, violate applicable law, exceed the Council's authority, discriminate against any protected class, or convert ARICC to for-profit status. Any override that would materially increase member fees or reduce member benefits shall require a super-majority vote of at least fourteen of twenty-one Council members, a public hearing with at least thirty days' notice, and a written economic impact analysis.
E. Enforceability. The fiduciary mandate is enforceable. Members have standing to challenge ARICC fiduciaries in superior court for failure to pursue universal participation without reasonable justification, imposition of excessive or unreasonable fees, failure to consider alternative approaches, or arbitrary or capricious override decisions. The Arizona Attorney General may investigate and bring enforcement actions for breach of fiduciary duty, violation of this Act, misuse of member funds, or self-dealing.
F. Reporting. The Council shall annually publish a Universal Participation and Sustainable Revenue Report addressing progress toward universal participation, progress toward sustainable revenue, fiduciary override actions, and member wealth impact.
Section 2.16. Fiduciary Duties of the Stewardship Council as Trustee of the Performance Trust Fund
A. Trust Relationship. The Arizona Stewardship Council is designated as the trustee of the ARICC Strategic Investment Trust Fund established in Section 2.2. The Council holds the monies in the fund in trust for the benefit of the State of Arizona and the people of Arizona. The Council's duties as trustee are in addition to its fiduciary duties to ARICC and its members.
B. Duty of Loyalty. The Council shall administer the trust fund solely in the interest of the beneficiaries. The Council shall avoid self-dealing, conflicts of interest, and transactions that benefit Council members personally. No Council member may participate in any decision regarding a disbursement from the trust fund in which the member has a direct or indirect financial interest.
C. Duty of Prudence. The Council shall act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
D. Duty to Monitor and Enforce. The Council shall monitor the performance of ARICC and all Subchapters receiving trust fund monies to ensure that milestones are achieved. The Council shall take appropriate enforcement action, including but not limited to demanding repayment or suspending further disbursements, if a milestone is not achieved or if trust fund monies are used for purposes other than those certified.
E. Personal Liability for Breach. Any member of the Stewardship Council who knowingly participates in a breach of fiduciary duty under this section shall be personally liable to the State and to ARICC for any resulting losses, damages, or unjust enrichment.
F. Reporting. The Council shall include in its Annual Mandate Report a comprehensive accounting of the trust fund, including all monies received and disbursed, the status of each milestone, the independent verifier's certifications, any enforcement actions taken, and an assessment of whether the trust fund structure is achieving its public purpose.
G. No Sovereign Immunity. The Stewardship Council, in its capacity as trustee of the ARICC Strategic Investment Trust Fund, waives sovereign immunity for the limited purpose of actions to enforce the fiduciary duties set forth in this section. This waiver applies only to claims alleging breach of fiduciary duty arising from the administration of the trust fund.
Section 2.17. Arizona Deferred Cooperative Investment Account (ADCIA) — State Tax Deferral Authorization
A. Authorization. The Arizona Stewardship Council is authorized to establish and administer the Arizona Deferred Cooperative Investment Account (ADCIA) as a member capital pathway under Section 2.3. The Council shall have full authority to determine by rule the terms, conditions, features, and operational details of the ADCIA, including but not limited to contribution methods, investment options, distribution procedures, fees, and portability provisions, subject only to the fiduciary mandate of Section 2.15 and the charter locks of Section 3.2.
B. Direct Amendment of A.R.S. Section 43-1022. Title 43, Arizona Revised Statutes, is amended as follows:
1. A.R.S. Section 43-1022 is amended by adding a new paragraph to read:
"(XX) Contributions to an Arizona Deferred Cooperative Investment Account (ADCIA) established under the Arizona Resilient Infrastructure and Capital Cooperative (ARICC) Act, up to $50,000 for a single individual or head of household and $100,000 for a married couple filing a joint return, as adjusted annually for inflation by the Arizona Department of Revenue using the Consumer Price Index for All Urban Consumers (CPI-U), rounded to the nearest $500."
C. State Tax Deferral. For Arizona income tax purposes, in addition to the subtraction authorized in subsection B:
1. Deferral of earnings. Earnings on amounts held in an ADCIA are not included in Arizona gross income until distributed.
2. Inclusion of distributions. Any amount distributed from an ADCIA is included in Arizona gross income in the taxable year of distribution.
3. No early withdrawal penalty. No addition to tax or penalty under Arizona law applies to any distribution from an ADCIA, regardless of the account holder's age or the reason for distribution.
D. Permissible Investments and Allocation. ADCIA funds shall be invested only in Subchapter member shares, Partner Cooperative debt or equity instruments, Strategic Vital Goods Reserve (SVGR) Participating Shares, Arizona Resilience Bonds, or such other investments as the Stewardship Council determines by rule consistent with its fiduciary duties. All ADCIA funds shall be pooled and allocated by the Stewardship Council according to the Critical Needs Index established in Section 5.2. No member may direct ADCIA contributions to a specific Subchapter, county, municipality, or neighborhood.
E. Integration with Pricing. The Stewardship Council may, in the exercise of its fiduciary duties, adopt a pricing system for cooperative goods and services that takes into account a member's contributions to an ADCIA or other member capital accounts.
F. Effective Date of Tax Provisions. The amendments made by this section apply to taxable years beginning from and after December 31, 2026.
Section 2.18. Concurrent Development of Foundational Institutions
A. Legislative Finding. The Legislature finds that financial services and insurance cooperatives are not merely ancillary to the development of Foundational Necessities (water, housing, energy, healthcare, food security) but are essential prerequisites that determine the speed, scale, and sustainability of all Phase 1 projects. Delaying the formation of these institutions until after Phase 1 completion artificially constrains capital availability, increases costs through commercial insurance markets, and unnecessarily prolongs the timeline for delivering essential services to Arizonans in highest-need communities.
B. Concurrent Development Authorized. Notwithstanding any provision of this Act that might be interpreted to prioritize the deployment of physical infrastructure over the formation of financial or administrative institutions, the Arizona Stewardship Council is expressly authorized to develop, charter, and operationalize the following foundational institutions concurrently with, and without waiting for the completion of, any Phase 1 Foundational Necessities project:
1. Financial Services Cooperatives (Credit Unions). The Council may charter one or more state-chartered credit unions under Title 6, Arizona Revised Statutes, to provide: (a) low-interest loans to members for housing, water systems, energy installations, healthcare expenses, and food cooperative startups; (b) operating capital for Partner Cooperatives engaged in Phase 1 projects; (c) construction financing for all infrastructure authorized by this Act; (d) member savings accounts, checking accounts, and other standard credit union services; and (e) such other financial services as the Council determines will accelerate Phase 1 completion.
2. Captive Insurance Cooperatives. The Council may charter one or more captive insurance companies under Title 20, Arizona Revised Statutes, to provide: (a) property and casualty insurance for all Phase 1 cooperative assets; (b) workers' compensation insurance for cooperative employees; (c) liability insurance for cooperative directors, officers, and members; (d) health insurance plans for cooperative members, offered on a non-profit, at-cost basis; (e) reinsurance arrangements to stabilize premium costs; and (f) such other insurance products as the Council determines will accelerate Phase 1 completion.
3. Arizona Secure Retirement and Stewardship Plan (ASRSP). The Council shall launch the ASRSP as provided in Section 2.2(D)(5) concurrently with Phase 1 development, without waiting for any milestone other than the seating of the Stewardship Council itself.
4. Arizona Deferred Cooperative Investment Account (ADCIA). The Council shall make the ADCIA available to members concurrently with Phase 1 development, without waiting for any milestone other than the seating of the Stewardship Council itself.
5. Strategic Vital Goods Reserve (SVGR). The Council may establish and capitalize the SVGR concurrently with Phase 1 development, prioritizing reserves of water, energy, food, and medicine that directly support Foundational Necessities.
6. International Cooperative Logistics Authority. The Council may establish international cooperative partnerships and supply chains concurrently with Phase 1 development, including but not limited to pharmaceutical importation, medical equipment procurement, and grain reserves.
C. Acceleration as a Fiduciary Duty. The Stewardship Council shall treat the acceleration of Phase 1 completion as an affirmative fiduciary duty under Section 2.15. To that end, the Council shall: (1) prioritize the formation of financial and insurance cooperatives in the first twelve months following the effective date of this Act; (2) use the lending capacity of financial cooperatives to fund Phase 1 projects directly, rather than waiting for state appropriations or federal grants; (3) use the risk-bearing capacity of captive insurers to lower the cost of insurance for all Phase 1 projects, thereby freeing capital for additional development; (4) report annually to the Legislature on the acceleration achieved through concurrent development, including the reduction in time to Phase 1 completion for each county, the amount of capital deployed through financial cooperatives, the premium savings achieved through captive insurance, and recommendations for further acceleration.
D. No Delay of Physical Infrastructure. Nothing in this section shall be construed to delay or subordinate the development of physical Phase 1 infrastructure (water, housing, energy, healthcare, food security). The Council shall pursue concurrent development such that financial and insurance cooperatives, ASRSP, ADCIA, and other foundational institutions are operational at the same time as physical infrastructure projects break ground, not before them or after them.
E. Use of Performance Trust Fund for Foundational Institutions. The Council may use monies from the ARICC Strategic Investment Trust Fund (Section 2.2) for the reasonable costs of chartering, capitalizing, and operating the foundational institutions authorized in this section, including: (1) minimum capital requirements for credit unions and captive insurers; (2) legal, actuarial, and consulting fees for formation; (3) technology and systems for member enrollment; (4) staff salaries for initial operations; and (5) such other expenses as the Council determines are necessary to accelerate Phase 1 completion.
F. Relationship to Maslow Phasing. This section does not alter the Maslow Phasing requirements of Section 5.3. Physical infrastructure for Phase 2 (Community Infrastructure) and Phase 3 (Higher-Order Investments) remains prohibited until Phase 1 is substantially complete in the relevant jurisdiction. However, the foundational institutions authorized in this section—including financial services, insurance, ASRSP, ADCIA, international logistics, and the SVGR—may be developed concurrently with Phase 1 because they directly support and accelerate the delivery of Foundational Necessities.
Section 2.19. Cooperative Most Favored Trading Partner Authority
A. Authorization. Pursuant to A.R.S. Section 10-2081, the Stewardship Council is authorized to enter into preferential trading agreements with foreign cooperative federations and individual cooperatives that are members in good standing of the International Cooperative Alliance (ICA).
B. Most Favored Cooperative Status. The Council may designate specific foreign cooperatives or cooperative federations as "Most Favored Trading Partners," granting them: (1) preferential pricing for goods and services purchased by Arizona cooperatives; (2) priority access to Arizona's Strategic Vital Goods Reserve (SVGR); (3) technology transfer and shared intellectual property arrangements; (4) joint infrastructure development (rail, port, desalination, broadband); (5) reciprocal market access for Arizona cooperative exports.
C. Reciprocity Requirement. No foreign cooperative shall receive Most Favored Cooperative status unless it grants Arizona cooperatives substantially equivalent access to its own domestic markets, supply chains, and technology.
D. Antitrust Exemption. All conduct undertaken pursuant to this section is exempt from Title 44, Chapter 10, Article 1 (Arizona's antitrust statutes) as provided in A.R.S. Section 10-2081, as well as from any federal antitrust challenge under the Parker v. Brown state action doctrine.
E. Reporting. The Council shall annually report to the Legislature on all Most Favored Cooperative agreements, including the volume of trade, cost savings to Arizona members, and technology transfers received.
Section 2.20. Government Contract Revenue Track
A. Authorization. Pursuant to A.R.S. Section 41-2632 (Cooperative Purchasing), the Stewardship Council is authorized to enter into cooperative purchasing agreements with the State of Arizona, its political subdivisions, and any other public procurement unit to bid on, win, and perform government contracts for materials, services, professional services, construction, and construction services.
B. Maslow-Prioritized Contract Engagement. The Stewardship Council shall maintain a registry of available government contracts and shall prioritize engagement according to the Maslow Phasing framework established in Section 5.3:
1. Phase 1 (Foundational Necessities). Contracts for water infrastructure, housing construction and rehabilitation, energy efficiency and renewable energy, healthcare services, and food distribution shall receive highest priority.
2. Phase 2 (Community Infrastructure). Contracts for broadband deployment, transit systems, and computing services may be pursued after Phase 1 contracts are substantially secured.
3. Phase 3 (Higher-Order). Contracts for advanced manufacturing, cultural facilities, and economic development may be pursued after Phase 1 and Phase 2 contracts are substantially secured.
C. Special Purpose Cooperatives for Contract Performance. The Stewardship Council may charter Special Purpose Cooperatives under Section 2.3 to perform specific government contracts. The Council shall determine by rule the governance, revenue allocation, member benefits, and reporting requirements for such cooperatives, subject only to the fiduciary mandate of Section 2.15 and the charter locks of Section 3.2.
D. Revenue Allocation. The Stewardship Council shall establish by rule the allocation of revenue from government contracts, including but not limited to worker compensation, cooperative operations, reinvestment in Phase 1 projects, member dividends, and contributions to the Strategic Vital Goods Reserve. The Council shall prioritize the long-term sustainability of the cooperative network and the acceleration of Phase 1 completion.
E. Relationship to Critical Needs Index Subchapter Funding. This section establishes a parallel capital generation track to the Critical Needs Index Subchapter funding under Section 2.2. The two tracks operate simultaneously, with the Council authorized to determine the appropriate balance between them consistent with its fiduciary duties.
F. Reporting. The Council shall annually report to the Legislature on:
1. Total value of government contracts secured;
2. Allocation of contract revenue by category;
3. Maslow Phase distribution of contracts performed;
4. Geographic distribution of contract performance (by county and Critical Needs Index tier);
5. Number of workers employed through Special Purpose Cooperatives;
6. Total capital generated for Phase 1 projects.
G. Rulemaking Authority. The Council may adopt rules pursuant to A.R.S. Title 41, Chapter 6 to implement this section, including rules governing contract prioritization, Special Purpose Cooperative formation, revenue allocation, and member participation.
### Section 2.21. ARICC Economic Shares
A. Authorization. The Stewardship Council is authorized to issue ARICC Economic Shares representing equity in the Strategic Vital Goods Reserve and other cooperative assets. Shares shall be denominated in units of cooperative equity, not in United States dollars.
B. Human Ownership Only. Only human beings may own ARICC Economic Shares. No corporation, partnership, trust, or other legal entity may own shares. Corporate investors may purchase Arizona Resilience Bonds (Section 2.4) but may not hold equity.
C. Share Value. One Economic Share shall represent one unit of equity in ARICC's consolidated asset base, including water rights, energy generation, housing stock, food reserves, medical stockpiles, computing capacity, and transportation infrastructure. The Stewardship Council shall publish a quarterly share valuation based on the fair market value of SVGR assets divided by total shares outstanding.
D. Medium of Exchange. Economic Shares may be used as a medium of exchange among ARICC Partner Cooperatives, Subchapters, and members for any lawful purpose, including payment for goods, services, and labor. Shares are not legal tender but are accepted as payment within the ARICC cooperative network.
E. Securities Law Exemption. Economic Shares shall be issued pursuant to the exemption from Title 44, Chapter 12 provided in A.R.S. Section 10-2025.
F. Dividends. Holders of Economic Shares shall receive dividends from the net earnings of ARICC cooperatives, distributed proportionally to share holdings.
G. Non-Convertibility. No cooperative or member shall have the right to convert Economic Shares into United States dollars at a guaranteed rate. Conversion, if any, shall occur at fair market value determined by the Stewardship Council.
Section 2.22. ADCIA Withdrawal Protections
A. Notice Period for Withdrawals. Pursuant to A.R.S. Sections 6-524 and 6-554, the Stewardship Council shall establish a withdrawal notice period for ADCIA accounts of not less than 30 days and not more than 60 days, as determined by the Council and disclosed to members at account opening. During this notice period:
1. The member's request is irrevocable.
2. The ADCIA shall value the withdrawal at the net asset value on the withdrawal date, not the notice date.
3. The member continues to accrue earnings during the notice period.
B. Liquidity Tiers. The Stewardship Council shall structure ADCIA accounts in liquidity tiers determined by the Council, which may include a liquid tier for emergency access, a working tier for routine withdrawals, and a long-term tier for investment. Members may designate what percentage of their ADCIA balance goes into each tier, with longer-term tiers receiving enhanced tax benefits and dividends as determined by the Council.
C. Emergency Withdrawal Suspension. The Stewardship Council may, by majority vote, suspend withdrawals from ADCIA for a period not to exceed 90 days if the Council determines that:
1. Extraordinary market conditions threaten the value of ADCIA assets;
2. A run on withdrawals would force fire-sale liquidations;
3. Such suspension is necessary to protect the remaining members;
4. The Council has a good-faith plan to resume withdrawals in an orderly manner.
During any suspension, the Council shall provide weekly updates to members.
D. Redemption Gates. The Council may impose redemption gates limiting the percentage of ADCIA assets that can be withdrawn in any rolling period as determined by the Council. If withdrawals exceed the gate, remaining withdrawal requests are queued and processed in the order received.
E. In-Kind Redemption. In times of market stress, the Council may satisfy withdrawal requests by distributing in-kind assets (pro-rata shares of Strategic Vital Goods Reserve assets) rather than cash. Members receiving in-kind distributions may hold the assets or sell them on cooperative exchanges established by the Council.
F. Redemption Fee. The Council may impose a redemption fee on withdrawals made during declared emergency periods, with the fee deposited into the Strategic Vital Goods Reserve to stabilize remaining assets.
G. Mandatory Disclosure. All members shall receive, at account opening and annually thereafter, a clear disclosure approved by the Council stating the notice periods, liquidity tiers, suspension authority, gate provisions, in-kind redemption options, and fee structures applicable to ADCIA accounts.
H. Relationship to SVGR. The Strategic Vital Goods Reserve shall maintain a liquidity buffer in an amount determined by the Council, in cash or cash equivalents, to meet normal withdrawal requests without liquidating long-term cooperative assets.
I. Rulemaking Authority. The Council may adopt rules pursuant to A.R.S. Title 41, Chapter 6 to implement this section, including rules governing notice periods, liquidity tiers, suspension procedures, redemption gates, in-kind redemptions, fees, and disclosure requirements.
---
ARTICLE 3: GOVERNANCE STRUCTURE
Section 3.1. Arizona Stewardship Council
A 21-member Council shall govern ARICC with staggered four-year terms:
1. Five Participant Stewards elected by ASRSP participants.
2. Three State Stewards appointed by the Governor (advisory only on Sovereign Fund matters).
3. Three Regional Stewards elected by County Subchapter boards.
4. Two Worker Stewards elected by employees of Partner Cooperatives.
5. Two Community Stewards appointed by recognized community organizations.
6. Six Specialized Stewards with expertise in water, housing, energy, healthcare, finance, and democratic governance.
Section 3.2. Charter Lock and Fiduciary Duty Provisions
A. Charter Locks. ARICC's founding charter and bylaws shall include provisions that:
1. Cannot be amended to: (a) eliminate democratic member governance; (b) remove the public benefit mandate; (c) convert to a for-profit corporation; or (d) abandon the Maslow Phasing framework.
2. May be amended only by: (a) supermajority vote of at least sixty-seven percent of the Arizona Stewardship Council; and (b) affirmative referendum of at least sixty percent of participating members voting.
B. Fiduciary Duty Enforcements. ARICC directors and officers owe fiduciary duties to the cooperative and its members to preserve and protect the charter provisions enumerated in subsection A. Breach of these duties shall subject directors and officers to personal liability for damages, removal for cause, and such other remedies as are available at law or in equity. Members have standing to enforce these duties through derivative actions in superior court.
C. Legislative Intent. Nothing in this section limits the power of the Legislature to amend or repeal this Act. This section establishes governance requirements for ARICC as a state-chartered public benefit cooperative and imposes fiduciary duties on its directors and officers consistent with Arizona cooperative corporation law.
Section 3.3. Subchapter Governance
County Subchapters shall be governed by boards elected by county residents who are members. Municipal, Neighborhood, Unincorporated Area, and Tribal Subchapters shall have governance structures determined by their respective County Subchapters or ARICC, consistent with democratic member control.
---
ARTICLE 4: SUBCHAPTER ESTABLISHMENT
Section 4.1. County Subchapters
ARICC shall establish a County Subchapter in each of Arizona's fifteen counties. County Subchapters shall be private, member-owned public benefit cooperatives chartered under Title 10, Arizona Revised Statutes, and shall serve as the primary vehicle for cooperative development at the county level.
Section 4.2. Municipal Subchapters
Each County Subchapter shall establish Municipal Subchapters in each incorporated municipality within that county, to the extent feasible and based on demonstrated member interest and community need as reflected in the Critical Needs Index.
Section 4.3. Neighborhood Subchapters
Each Municipal Subchapter may establish Neighborhood Subchapters to serve distinct geographic communities within the municipality, including but not limited to wards, districts, precincts, census tract clusters, and Historically Redlined or Disinvested Areas. Neighborhood Subchapters shall be governed by Community Investment Boards composed of residents of the neighborhood.
Section 4.4. Unincorporated Area Subchapters
Each County Subchapter shall establish Unincorporated Area Subchapters to serve residents of unincorporated county territory, prioritizing areas with the highest Critical Needs Index scores.
Section 4.5. Tribal Subchapters
ARICC shall, in consultation with federally recognized tribal nations, establish Tribal Subchapters to serve tribal members. Tribal Subchapters shall be governed in a manner consistent with tribal sovereignty and applicable tribal law.
Section 4.6. Prioritization Framework
Establishment of Subchapters shall follow a phased prioritization based on the Critical Needs Index:
1. Tier 1 (Highest Need): Counties, municipalities, and neighborhoods with Critical Needs Index scores in the highest quartile shall be established first.
2. Tier 2 (Moderate Need): Jurisdictions with scores in the second quartile shall be established in the second phase.
3. Tier 3 (Lower Need): Jurisdictions with scores in the lower half may establish Subchapters at their own expense or through Advance Capital Participation under Section 2.12.
Section 4.7. Subchapter Capitalization
Each Subchapter shall maintain a Local Stewardship Fund for community investment. County Subchapters shall also maintain a County Equity Reserve designated for cross-community redistribution to under-resourced Municipal Subchapters and the Unincorporated Area Subchapter.
---
ARTICLE 5: CRITICAL NEEDS INDEX AND MASLOW PHASING
Section 5.1. Purpose
The Critical Needs Index and Maslow Phasing framework shall guide the prioritization of capital deployment to ensure that foundational necessities are addressed before higher-order investments.
Section 5.2. Critical Needs Index
The Arizona Stewardship Council shall develop, adopt, and publish a Critical Needs Index that:
1. Uses publicly available data and a transparent weighting methodology.
2. Provides objective deficit scores for all Arizona counties, municipalities, census tracts, and unincorporated areas across the following domains: housing, water, energy, healthcare, food security, digital infrastructure, and transportation.
3. Is updated annually and subject to public comment.
Section 5.3. Maslow Phasing
Capital shall be deployed according to the following phased progression:
1. Phase 1 (Foundational Necessities). Investments in housing, water, energy, healthcare, and food security shall receive priority over all other investments.
2. Phase 2 (Community Infrastructure). Investments in digital infrastructure, transportation, and other community systems may proceed once foundational necessities are adequately addressed.
3. Phase 3 (Higher-Order Investments). Investments in economic development, cultural amenities, and other higher-order projects may proceed only after Phases 1 and 2 are substantially complete in the relevant jurisdiction.
Section 5.4. Critical Needs Index Allocation
The Stewardship Council shall allocate capital from the ARICC Strategic Investment Trust Fund, ADCIA pooled contributions, and government contract revenue according to the Critical Needs Index. Jurisdictions with higher deficit scores shall receive priority for Phase 1 and Phase 2 investments before jurisdictions with lower deficit scores.
Section 5.5. Annual Review
The Stewardship Council shall conduct an annual review of the Critical Needs Index and Maslow Phasing implementation, including:
1. Updated deficit scores for all jurisdictions;
2. Progress toward Phase 1 completion in each county;
3. Adjustments to allocation formulas based on changed circumstances;
4. Public comment and appeals from affected communities.
Section 5.6. Appeals
Any represented elected body or group of members may appeal the Stewardship Council's application of the Critical Needs Index or Maslow Phasing to their jurisdiction. The Council shall establish a transparent appeals process with written determinations and opportunities for reconsideration.
Section 5.7. Emergency Adjustments
During a declared emergency (including natural disaster, public health crisis, or economic collapse), the Stewardship Council may temporarily adjust the Critical Needs Index or Maslow Phasing priorities to address immediate threats to life, health, or safety. Any emergency adjustment shall be reviewed within 90 days.
Section 5.8. Public Dashboard
The Stewardship Council shall maintain a public, online dashboard showing:
1. Current Critical Needs Index scores for all jurisdictions;
2. Phase completion status by county and Subchapter;
3. Capital allocations and project status;
4. Appeals and resolutions;
5. Annual progress reports.
Section 5.9. Sliding-Scale Pricing, Market Stabilization, and Cooperative Development Authority
A. Sliding-Scale Rationing Authority. The Stewardship Council and any Partner Cooperative or Subchapter offering sliding-scale pricing may establish reasonable quantity limits, verification requirements, and rationing mechanisms for goods or services sold at discounted rates to prevent arbitrage, straw purchases, and resale for profit. Such mechanisms may include differentiation between personal-use quantities and institutional or commercial quantities.
B. Institutional Pricing. Sales to institutions and for commercial or bulk purposes shall not be eligible for sliding-scale pricing. The Stewardship Council shall set institutional rates at levels sufficient to cover costs, pay workers a comfortable living wage, and generate reinvestment capital. The Council is not required to match or undercut corporate wholesale rates.
C. SVGR Market Stabilization Authority. The Strategic Vital Goods Reserve (SVGR) may acquire strategic assets, including production facilities, distribution networks, warehouses, and other infrastructure for Foundational Necessities, when doing so would stabilize markets, prevent monopoly, ensure continuity of supply, or protect the cooperative network from predatory pricing.
D. Cooperative Development Pathway. The Stewardship Council shall maintain a clear, accessible pathway for individuals and groups to form ARICC-aligned cooperatives. This pathway shall include training, funding assistance, technical support, and a plain-language guide explaining the benefits of cooperative status, the steps to formation, and the prohibition on arbitrage. The Council shall make this information available to any Arizona resident who requests it.
E. Prohibition on Arbitrage. No member or purchaser may acquire goods or services at sliding-scale rates for resale, transfer, or arbitrage to a non-member or entity not entitled to such rates. Violations shall be subject to enforcement by the cooperative, including treble damages, membership revocation, and forfeiture of Economic Shares.
F. Rulemaking Authority. The Stewardship Council may adopt rules to implement this section. The Council shall exercise its authority consistent with the fiduciary mandate of Section 2.15, and shall favor flexibility, adaptability, and member welfare over prescriptive bureaucracy.
Section 5.10. No Limitation on Fiduciary Mandate
Nothing in this Article shall limit the Stewardship Council's authority under Section 2.15 to modify, suspend, or supersede any provision of this Article if the Council determines that such action better serves the mandate to universalize participation, maximize member welfare, and ensure sustainability. Any such override shall comply with the requirements of Section 2.15(C) through (E).
---
ARTICLE 6: PARTNER COOPERATIVES AND SPINOFFS
Section 6.1. Partner Cooperatives
ARICC and Subchapters may form, assist in the formation of, or convert existing enterprises to Partner Cooperatives. Partner Cooperatives shall be member-owned, democratically governed, and operate for the benefit of their members and the community.
Section 6.2. Spinoff Cooperatives
ARICC and Subchapters may facilitate the conversion of government programs, services, or enterprises to Spinoff Cooperatives through Government Program Democratization. Spinoff Cooperatives shall preserve the Legislated Purpose of the converted program through charter lock provisions.
Section 6.3. Labor Integration Pathway
A recognized labor organization may partner with, form, govern, or convert to a Partner Cooperative through the Labor Integration Pathway, which shall preserve collective bargaining rights and extend benefits to represented workers.
Section 6.4. Institutional Integration
ARICC shall develop protocols for Institutional Integration, enabling Arizona's public, private, and civic institutions to align their resources, governance, or operations with the Partner Cooperative ecosystem. Anchor Institutions are encouraged to leverage their procurement, employment, land, and investment to support community wealth building through Partner Cooperatives.
Section 6.5. Competitive Challenge Right
Before a Spinoff Cooperative may be established to replace an incumbent contractor, the incumbent contractor or other qualified entity shall have the right to demonstrate that it can meet or exceed the performance, cost, and social benefit standards of the proposed Spinoff Cooperative. The Competitive Challenge Right shall be exercised through a public proceeding conducted by the relevant Subchapter.
Section 6.6. Charter Locks for Partner Cooperatives
All Partner Cooperatives formed with ARICC or Subchapter assistance shall include in their charters provisions that cannot be amended to: (1) eliminate democratic member governance; (2) convert to for-profit status; (3) transfer assets out of cooperative ownership without fair market value compensation; or (4) abandon the public benefit mission.
---
ARTICLE 7: SEVERABILITY AND EFFECTIVE DATES
Section 7.1. Severability
If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
Section 7.2. Effective Dates
A. Sections 1, 2 (other than Section 2.2(G)), 3, 4, 5, 6, and 7 shall take effect on the general effective date of this Act.
B. Section 2.2(G) (Contingent Capitalization Condition) shall take effect immediately.
C. Section 2.17(B) (Amendment of A.R.S. Section 43-1022) shall take effect as provided in Section 2.17(F) and applies to taxable years beginning from and after December 31, 2026.
D. Section 2.2(B) (Appropriation) and the release of funds under Section 2.2 shall take effect only upon the certification by the Arizona Stewardship Council under Section 2.2(G) that the tax subtraction authorized in Section 2.17(B) is operative. If such certification has not occurred by December 31, 2027, the appropriation shall revert to the state General Fund.
