Issue 17 - May 4, 2012 PRINT VERSION

Legislative overview

The second regular session of Arizona's Centennial Legislature adjourned sine die at 8:25 p.m. on Thursday, May 3, the 114th day of the legislative session. After negotiators reached agreement on an $8.6 billion budget for the coming year, the House and Senate proceeded to pass a series of bills incorporating that agreement on Tuesday, May 1. The fiscal impacts of the budget on cities and towns are highly positive. The League was categorically successful with respect to its two budget priorities for the coming year: 1) elimination of the assessment on municipalities to help fund the Department of Water Resources; and 2) reduction in the amount of Highway User Revenue Funds diverted away from cities and towns. In addition, the budget provides funds that will help local jurisdictions upgrade their aging 9-1-1 emergency response systems. (See stories below.)

Water assessment

As passed by the Legislature, the budget includes the salient provisions of SB 1288 (municipal water fees; repeal; appropriation), which passed the Senate and four legislative committees by unanimous votes. The bill, sponsored by Senator Gail Griffin (R-Hereford), repeals the permanent statutory authority of the Arizona Department of Water Resources to impose an assessment on municipalities to help pay for departmental operations. The measure was co-sponsored by 45 senators and representatives - fully one-half of the Arizona Legislature.

Highway User Revenue Fund

Like last year, the budget shifts $120 million in HURF funds to the Department of Public Safety. The diversion of HURF funds to the Motor Vehicle Department, however, is virtually eliminated. The consequence for cities and towns is a net gain of approximately $26.5 million in HURF funding for the coming fiscal year.

Emergency response

Arizona currently levies a tax of .8 percent on telecommunications services in this state. Monies collected from the tax are deposited in the emergency telecommunications services revolving fund to assist governmental entities with the maintenance, operation and capital costs associated with the 9-1-1 system. In previous years the monies in the fund have been swept for general fund purposes. The FY 13 budget, however, leaves the fund untouched. Consequently, the League estimates that $1.8 million will be available in the coming year to improve Arizona's aging emergency response infrastructure.

Consolidated elections

On Monday, April 30, the House concurred in the Senate amendment to HB 2826 (consolidated election dates; political subdivisions) and approved the bill on final passage by a narrow vote of 32-28. The legislation was immediately transmitted to the governor, who has until May 15 to sign or veto the legislation. If she does neither, then the bill will take effect without her signature.

Business incentives

On Thursday, May 3, during the final hours of the legislative session, the Senate passed SB 1442 (prime contracting; manufacturing facilities; infrastructure) by a vote of 19-9. The House followed by approving the measure on a unanimous vote of 56-0. The bill permits municipalities to recapture state transaction privilege taxes paid by qualified manufacturing facilities for public infrastructure necessary to support those facilities.

Sales tax collection

On Tuesday, May 1, the House passed an amended version of HB 2466 (NOW: payment; local sales tax) by a unanimous vote of 60-0. The bill provides for the creation of an online portal for the direct remittance of taxes by taxpayers in self-collecting cities. The League supports HB 2466 and has worked closely and cooperatively with the bill's sponsor, Rep Rick Gray (R-Sun City West), throughout the legislative session. The bill now heads to the governor's desk for final action.

Alarm system installation

On Monday, April 30, the Senate gave final approval to HB 2748 (NOW: alarm business; alarm agent; certification) by a vote of 27-3. The bill had previously been amended in conference committee to address issues identified by the Department of Public Safety. In its current form, the measure provides for the establishment of a statewide certification requirement for alarm businesses and alarm agents, and it preempts further local regulation of alarm installation. The bill has been transmitted to the governor and is now awaiting her signature or veto.

Traffic control

On Monday, April 30, the Senate passed HB 2557 (NOW: intersection; definition) by a vote of 18-12. The bill redefines the definition of "intersection" in the transportation statutes to make it more difficult to cite drivers for red light violations. The bill, to which the League is opposed, now awaits action by the governor.

Regulatory tax credit

During the past week, HB 2815 (employment; incentives; regulatory tax credit) came out of hibernation and moved through both chambers. The bill, which expands job training programs and reduces taxation of net capital gains, was the subject of five successful amendments in the Senate Committee of the Whole. Of particular note was the Yarbrough #1 floor amendment, which eliminated that section of the bill establishing a regulatory tax credit program. The initiative, to which the League strongly objects, provides for a credit against state taxes for parties who are aggrieved by "excessive regulation." With elimination of the regulatory tax credit, the League is neutral on the bill, which passed both chambers on the evening of May 3 and has been transmitted to the governor.

Homeowners' associations

On Monday, April 30, the House defeated HB 2030 (homeowners' associations; public roadways) by a vote of 16-43. The measure, sponsored by Rep. John Kavanagh (R-Fountain Hills) prohibits homeowners' associations from enforcing parking regulations unless certain conditions are met. The League opposes the measure because of its potential to shift parking enforcement costs onto cities and towns.

United Nations Rio declaration

On Monday, April 30, the House was scheduled to consider SB 1507 (NOW: United Nations Rio declaration; prohibition) on third reading. The purpose of the bill is to prohibit the state and its political subdivisions from adopting or implementing "the creed, doctrine, principles or any tenet" of the 1992 United Nations Rio Declaration on Environment and Development. The bill also specifically identifies a number of organizations with which Arizona political entities are prohibited from affiliating.

Law enforcement

SB 1186 (law enforcement officers; omnibus) passed its third read in the House and its final read in the Senate, both by unanimous votes, on Thursday, May 3. Among other things, the measure, sponsored by Senator Linda Gray (R-Phoenix), severely curtails the ability of law enforcement agencies to require fitness for duty examinations. The League opposes the bill, which has been transmitted to the Office of the Governor for final action.

Spirituous liquors

On Monday, April 30, the Senate passed HB 2606 (NOW: liquor omnibus) on its final read by a vote of 26-4. Among other things, the bill, sponsored by Rep. J.D. Mesnard (R-Chandler), permits the State Liquor Board to consider municipal tax delinquencies in liquor license suspension and revocation proceedings. It further permits a city or town to use the average of the last five years of the Consumer Price Index (CPI) for fee increases (as opposed to just the previous year's CPI). The bill now proceeds to the governor for her signature or veto.

Pension reform

HB 2745 (NOW: PSPRS; employer contributions) was passed unanimously by the Senate on Wednesday, May 2, and by the House on Thursday, May 3. The bill makes a change to the Alternate Contribution Rate (ACR) requirements of the Public Safety Personnel Retirement System (PSPRS). The change would preclude employers from paying the PSPRS ACR on a PSPRS-eligible position if the retired person was hired before the effective date of last year's pension reform bill, SB 1609 (retirement systems; plans; plan design), and the individual is enrolled in another state retirement system. This change will result in cost savings for some of Arizona's small cities and towns.

Legislative Bulletin is published by the League of Arizona Cities and Towns.
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Issue 17 - May 4, 2012
Issue 17 - May 4, 2012
Issue 17 - May 4, 2012
Issue 17 - May 4, 2012
Issue 17 - May 4, 2012
Issue 17 - May 4, 2012