Issue 7 - February 27, 2015 PRINT VERSION

Legislative Overview

Today marks the 47th day of session. Five bills have been signed, including SB 1446, TPT reform; contractors (see story below). There was an intense amount of floor activity as both chambers are transferring bills to the opposite side. Committee activity was mild, but will pick up in the next few weeks as they near the committee hearing deadline of March 20th.

Residential Rental

HB 2254, municipal tax exemption; residential lease, was scheduled for Committee of the Whole Wednesday afternoon. The bill was retained on the calendar and did not move forward when it became clear that the measure does not have enough support, in any form, to pass the House of Representatives. If allowed to go into law, this bill would erase nearly $90 million from city and town budgets when fully implemented. Thank you for registering your opposition with your legislative delegation.

Body Cameras

SB 1300, law enforcement officers; body cameras passed both of its committees and is moving forward to the Rules Committee. The measure, sponsored by Sen. John Kavanagh (R-Fountain Hills) sets forth various procedures for the use of such cameras and the storage and viewing of the footage. The League was neutral on the bill, but did express the concern that there is more work to be done and that local law enforcement needs to be involved in the further development of such procedures. Sen. Kavanagh has stated that he will continue to work with the interested parties to find the best practices possible.

Neutrality Agreement

On Thursday, the House Government and Higher Education Committee passed SB 1090 neutrality agreement; apprenticeship agreement; prohibition, by a vote of 6-3. Sponsored by Sen. Kavanagh (R-Fountain Hills), the bill prohibits neutrality agreements and apprenticeship program participation from being required in public works contracts. The League opposed the bill as it preempts local decision making. The bill now moves to the Rules Committee.

Fire Access Roads

On Thursday, SB 1335 fire access roads; limitation; enforcement was substituted for HB 2005 in the House and, subsequently passed the House 34-25-1. The bill now proceeds to the Governor's office. Current law prohibits municipalities from requiring fire sprinklers in single family residential homes and prohibits them from using fire access roads as a way to directly or indirectly require fire sprinklers. Sponsored by Sen. Farnsworth (R-Mesa), the bill expressly states that violating this statute can be enforced by private civil action. It also specifies that statutory requirements supersede and preempt any regulation adopted by a local government regarding an approved fire apparatus access road, fire apparatus access road extension, approved route or route extension. The League opposes this bill and will ask Governor Ducey to veto it as it lowers the threshold at which applicants can sue thus increasing the probability of frivolous lawsuits and increasing liability to cities, towns, fire districts, and the State for ignoring accepted national fire standards.

TPT Reform

On Tuesday Governor Ducey signed SB 1446: TPT reform; contractors, sponsored by Senator Debbie Lesko (R-Peoria). This bill included an emergency clause so it is effective immediately, with a retroactive date of January 1, 2015. Based on this signing date, the bill's "hold harmless" clause covers any bid, contract or commitment that is dated on or before April 30, 2015. Similarly, contractors that choose to cancel their license on or before April 30, 2015 can take advantage of the temporary Use Tax exclusion on the first $10,000 worth of inventory, and may choose one of the three stated methods for dealing with their existing tax-free inventory that exceeds $10,000 in value. SB 1446 clarifies the definitions of the terms "replacement" and "alteration"; provides bright-line tests for both residential and non-residential alteration projects to determine when they are subject to tax on materials as opposed to being considered prime contracting; and, clarifies which contractors should keep their TPT license going forward. The bill allows licensed contractors who are doing alteration projects to continue buying all materials without tax, provided they pay retail TPT on the materials to the jurisdiction where the project is being done. The League appreciates the support of the Governor and the leadership of Senator Lesko (SB 1446) and Representative Karen Fann, sponsor of the identical House bill (HB 2590), on this important issue.

More TPT

A strike-everything amendment to HB 2447: (now) real property managers; consolidated returns, sponsored by Representative Justin Olson (R-Mesa), unanimously passed House Appropriations on Wednesday, 14-0. The striker creates A.R.S. Section 42-6009, which requires cities and towns that impose a tax on real property rental to allow a Property Manager to electronically file a single tax return that includes detailed information about all of their clients and their underlying separate property locations. Given the coming administration by DOR due to TPT Simplification, the bill effectively requires DOR to make the necessary changes to their system to add this capability. The League is pleased to be working with the sponsor and industry representatives on an amendment that will clarify the objectives and terms to ensure that the bill accomplishes its intended goals.

Business Licenses

SB 1368: municipalities; additional business licenses; prohibition sponsored by Senator Gail Griffin (R-Benson), passed Third Read in the Senate on Thursday. This bill adds A.R.S. Section 9-491.01, which prohibits a city or town from requiring a business license for a real estate agent that holds a valid business license in another city or town where their business office is located. Based on the testimony, it is our understanding that some municipalities have been requiring Realtors to get a local business license in order to show properties in their city or town. This bill preempts that practice and limits the authority to require a business license for a licensed real estate professional to only the city or town where their office is located.

Legislative Bill Monitoring

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

SB 1090: neutrality agreement; apprenticeship agreement; prohibition
SB 1169: fire code requirements; fire watch
SB 1300: law enforcement officers; body cameras
SB 1335: fire access roads; limitation; enforcement
SB 1368: municipalities; additional business licenses; prohibition
SB 1446: TPT reform; contractors
HB 2129: municipal tax code commission; continuation
HB 2142: water infrastructure finance authority; prepayment
HB 2410: municipalities; traffic citation quota; prohibition
HB 2447: (now) real property managers; consolidated returns
Legislative Bulletin is published by the League of Arizona Cities and Towns.
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Issue 7 - February 27, 2015
Issue 7 - February 27, 2015
Issue 7 - February 27, 2015
Issue 7 - February 27, 2015
Issue 7 - February 27, 2015
Issue 7 - February 27, 2015