"This grant will serve as a bridge until next year, when hopefully the legislation will pass," Horne said.
Horne contends that marshal's officers are followers of polygamist sect leader Warren Jeffs and put following Jeffs over obeying the law.
Jeffs is serving a prison sentence of life and 20 years in Texas where he was convicted of sexually assaulting two underage sect girls whom he took as plural wives.
Jeff Matura, a lawyer for Colorado City, said town officials dispute Horne's characterizations of marshal's officers but welcome the increased presence by sheriff's deputies.
"The more police force, the safer the community," Matura said. "We don't mind them coming in. We have nothing to hide."
Sheriff Tom Sheahan did not immediately return a call for comment, but he said in a statement included in Horne's announcement that the plan would "provide unbiased law enforcement services that the citizens do not have with the Town Marshal's Office."
Horne's office said the plan will take effect upon approval by the county Board of Supervisors. The board will consider it on July 2, officials said.
Supervisors Chairman Buster Johnson welcomed Horne's plan, which Johnson said would provide "legitimate law enforcement" in Colorado City.
"I truly thank Tom Horne for not giving up on us up here," Johnson said in a statement. "His support for our efforts to supply real justice to the residents of the Colorado City area shows an insight that, apparently, our Legislature didn't have this last session."
During legislative consideration of the bill, Horne said Colorado City officers who are members of the Fundamentalist Church of Jesus Christ of Latter Day Saints flout the law, particularly when sect members commit crimes against non-members, and are simply replaced by other followers of Jeffs if removed individually.
Critics of the bill, including two Mohave County legislators whose districts include Colorado City, said it unfairly targeted the town and that current officers haven't done anything wrong.
Horne was state superintendent of public instruction when Arizona seized control of the Colorado City school district based on findings of financial mismanagement. The district has since emerged from receivership.
The FLDS practices polygamy, a legacy of early Mormon church teachings that held plural marriage brought exaltation in heaven.
However, the mainstream Church of Jesus Christ of Latter-day Saints abandoned the practice in 1890 as a condition of Utah's statehood and excommunicates members who engage in the practice.