Issue 13 - April 4, 2014

Legislative Overview

The fiscal year 2014-15 (FY 15) budget continues to dominate the landscape at the Capitol as the Executive and Legislative branches grapple to cobble a budget capable of obtaining the necessary support to get across the finish line. The Senate took up the House's modified budget at the beginning of the week, passing it out on April 1 largely along party lines, but not without modifications. A comparison of the House and Senate budgets can be found here.

Later that day, the House refused the changes made in the Senate and sent the budget to Conference Committee for further changes. On Thursday, the House appointed three conferees to a Free Conference Committee, but the Senate has yet to follow suit. Both chambers stand adjourned until Monday. Budget negotiations are likely to continue, but it is unclear what the outcome will be and how close the Legislature is to adjourning for the year.

Utility Tax Exemptions

This week, SB 1413 (taxes; manufacturers' electricity sales; exemption) passed out of the House Committee of the Whole (COW). Sponsored by Senator Steve Yarbrough (R-Chandler), SB 1413 exempts electricity used in manufacturing and smelting operations from state transaction privilege taxes (TPT) and stipulates that if a city or town wishes to provide a similar exemption it must be provided to all manufacturers and must have the same definitions as the state. The League is neutral on the bill, which was amended in COW with a substitute floor amendment to make technical changes and to include natural gas in the TPT exemption. The bill now awaits Third Read in the House.

Special Taxing Districts

On Thursday, SB 1415 (municipal elections; majority vote calculation) was scheduled to be considered by the House Committee of the Whole. The bill became the subject of a strike-everything amendment that will severely limit the utility of Community Facilities Districts (CFD) in Arizona by placing new and arbitrary bond limits on special taxing districts. The League opposes the striker because it will harm Arizona's ability to move beyond the economic downturn. The bill was ultimately retained on the calendar.

The original bill, sponsored by Senator Steve Yarbrough (R-Chandler) reformulates the majority vote threshold needed for determining whether a municipal candidate wins an election outright during the primary or must proceed to a general election. Without this change, taxpayers will have to fund a runoff election that otherwise may not be necessary. Although the bill and the striker did not move this week, both issues are important enough for cities and towns to keep a close eye on. The League continues to explore alternate paths to see the election vote calculation changes enacted into law.

Other Bills of Note

(All bills being actively monitored by the League can be found here.)

Bill Number - Short Title - Subject(s)
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