Today marks the 68th day of the First Regular Session of the 51st Legislature. Committees had extensive hearings in an attempt to
complete their labors within the timeframe allotted by rule. Next week, if standard practice continues, only the Appropriations
committees will consider legislation.
Changes to Transaction Privilege Taxes (TPT)
Although discussions on tax simplification continued this week,
HB 2111 (investments; public monies) was heard in the Senate
Finance Committee on Wednesday. The bill was amended with a strike-everything amendment that mirrored the language of
HB 2657 (transaction privilege tax changes). The amendment was
further amended to change the provisions relating to state auditors and prime contracting TPT. The changes contained in the amendment
do not reflect a final compromise or deal on tax simplification. The League continues to be actively engaged in negotiations with the
goal of crafting a viable solution for all parties.
In response to the developments in the Senate, the League has released a comprehensive proposal on tax simplification, intended to
demonstrate the commitment of cities and towns to simplify our tax system, but do so in a manner that is efficient and sound. The
municipal proposal provides a single point of licensing, remittance and auditing through DOR and studies the issue of prime contracting
in order to gather vital information before moving forward with a change in tax policy with uncertain results. The proposal was
revealed at a press conference on Wednesday. The League thanks the mayors who attended and spoke at the event. Details of the proposal
can be found here.
Dedicated Property Tax
On Monday, the House Committee on Ways & Means approved
SB 1470 (dedicated property tax) with a same subject
strike-everything amendment. The strike-everything amendment combines the provisions of SB 1470 and HB 2544. Since one bill prohibits a
certain action (HB 2544) and the other allowed relief to address what would be prohibited (SB 1470), stakeholders agreed that combining
both bills would ensure that implementation procedures could be more fully contemplated. The bill now prohibits municipalities from
assessing a municipal-wide tax or fee against property owners based on the size or value of the property, and allows municipalities that
do not currently impose a property tax to levy property taxes dedicated to the costs of providing police, fire, and emergency medical
services. The League registered neutral on the bill.
HB 2185 (alarm businesses; alarm agents), sponsored by Rep.
Karen Fann (R - Prescott), passed the Senate Commerce, Energy and Military Committee on March 20 by a vote of 5-1. There was initially
going to be an amendment offered which the League and cities opposed; the amendment would have dropped the requirement for fingerprint
background checks for alarm installers. But it was never offered and the bill went through. The stakeholders are to meet and see if
they can come to a compromise on an amendment before the bill goes to the floor.
Energy Efficiency Building Codes
Earlier in the week, the House Committee on Energy, Environment and Natural Resources defeated
SB 1321 (residential energy efficiency; building codes). On
Thursday, the Senate Committee on Government & Environment approved a strike-everything amendment to HB 2404 containing the provisions
of the defeated SB 1321. This bill prohibits political subdivisions from regulating energy consumption and efficiency in homes beyond
what is established by state law. It creates climate zones for each of the counties and specific efficiency rating scores are
established for each of the zones. The League opposed the original bill and the strike-everything amendment.
Revenue Allocation Districts
HB 2456 (revenue allocation districts) saw action in two
committees this week. It passed the Senate Committee on Finance on Wednesday and then passed the Senate Committee on Government &
Environment on Thursday. The bill, sponsored by Representative Phil Lovas (R-Peoria), authorizes communities to finance development for
a specific area according to a citizen approved development plan. Specifically, it allows communities to capture incremental local
property tax revenues and local sales tax revenues to fund development projects within the boundaries of the municipalities in which
they are located. The League has a resolution supporting this issue.
HB 2292 (photo radar citations; service times) was the subject
of a strike everything amendment on March 18 regarding a prohibition on homeowners' associations. The bill was similar to a measure
(SB 1365) that was defeated last week in the House Government
Committee. However, the striker on HB 2292, sponsored by Sen. Rick Murphy (R - Peoria), does allow for some ability of cities and towns
to have planned communities in their boundaries for the purposes of maintaining community property. However, it also states that
municipalities shall create ordinances and procedures for conventional residential subdivisions. HB 2292 passed the Senate Judiciary
Committee by a vote of 5-2, with two not voting. The bill now proceeds to the Rules Committee.
Professional Services Indemnification
SB 1231 (public buildings; construction; indemnity) passed the
House Committee on Government this week. The bill regulates indemnity provisions contained in contracts with project design
professional. The proponents of the bill have been working with a number of public agency stakeholders, including the League, to
address concerns and improve the bill. It now moves on to the House Committee of the Whole.
Other Bills of Note
(All bills being actively monitored by the League can be found here.)
Bill Number - Short Title - Subject(s)
HB 2113: NOW: size; exception; municipal annexation - annexation
HB 2138: municipalities; right-of-way; transfer - annexation
HB 2280: employee benefits; state preemption - regulation
HB 2292: s/e: zoning prohibitions; planned communities - general government
HB 2324: NOW: commercial lease exemption - finance
HB 2533: local governments; public notices; website - general government
HB 2608: EORP; closure; defined contribution - pension
HB 2621: fund; state parks; roads; fee - finance
SB 1403: United Nations Rio declaration; prohibition. - general government
Legislative Bulletin is published by the League of Arizona Cities and Towns.
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