Legislative Overview

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.

Alarm Regulations

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.

HOA Prohibition

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.
Forward your comments or suggestions to league@azleague.org.