Bisbee's ban on plastic and carryout bag violates state law, according to Arizona Attorney General Mark Brnovich.
According to Brnovich, municipalities can't regulate businesses' sale or use of disposable carryout bags.
"My job as Attorney General is to enforce state law," Brnovich said in a statement. "Regardless of policy arguments for why the bag ban exists, the City of Bisbee does not have the authority to ignore state law and reach its policy goal by illegally imposing regulatory mandates on private citizens and businesses."
Bisbee is clashing with the state's 2016 passage of HB2131, which forbids the restrictions on bags.
Bisbee's law requires businesses to charges at least 5 cents per recycled paper bag and bans businesses from providing plastic bags. Violations are punishable by a $500 fine.
State Senator Warren Petersen asked Brnovich to investigate Bisbee's law.
Bisbee has 30 days to resolve the violation or face the loss of state shared money.
To see Brnovich's full report, click here.