Legislative Overview

Starting last Friday night and going into the early morning of Saturday, the Legislature passed the budget package essentially along party lines. You can find more information on the budgetary impacts to cities and towns below.

Today is the 61st day of session, and to date there have been 19 bills signed, as Governor Ducey officially signed the budget package on March 12th.

Budget

Following an all-night session on Friday, the FY 15-16 Budget bills passed out of the legislature on Saturday morning and the bill package was transmitted to Governor Ducey on Monday and signed on Thursday.

As in the original Governor's budget, cities and towns are being assessed to fund partial operations of the Department of Revenue, now for a total of $20.8 million. Although the current language does not reflect it, we have been told that they want to split that figure as evenly as possible between cities and counties, at roughly $10.7 and $10.1 million respectively. Also in the bill is an assessment on non-program cities for DOR tax system changes, at the rate of $0.76 per population in the 2010 census.

Over the last few weeks, as directed by the Executive Committee, we have been working with staff in the Governor's Office on an MOU that itemizes a fee-for-service arrangement with measureable performance standards from DOR for our payments. Although that specific language did not appear in the budget bill, we understand that we still have the support of the Governor's office for this plan. We are hopeful that when we meet with DOR to work out how these payments will actually occur we will have an opportunity to explore objective performance measures within an MOU between the local governments and the Department.

Attorney Fees

HB 2131 tax adjudications; attorney fees, sponsored by Rep. Darin Mitchell (R-Litchfield Park) was held in Senate Finance, but will be heard next week. This bill removes all of the caps on attorney fees that can be awarded to a successful taxpayer in tax cases, made such an award mandatory unless the taxpayer acted in specific ways to delay the process, and included contingency fees as an element of attorney fees that could be awarded. The League participated in a stakeholder meeting on Wednesday to discuss an amendment that will be drafted for Senate Finance next Wednesday. It is our understanding that the amendment will remove both the mandatory and contingency fee elements, and extend the current $30,000 per court level cap to $75,000 per level, including administrative hearings, indexed to the local CPI. With those changes, the League's position on this bill will be changed from Opposed to Neutral when the bill is heard.

Waste Collection and Processing

Three bills that affect municipal waste processes passed this week - SB 1079, SB 1187 and SB 1342. Each one was sponsored by Sen. Gail Griffin (R-Hereford).

SB 1079, solid waste collection; multifamily housing changes multi-family housing from residential to commercial for the purposes of waste collection. The League has been opposed to this measure since its introduction as it is concerned that service delivery will be diminished. The bill passed the House Energy, Environment and Natural Resources Committee on Monday by a vote of 7-2 and now goes to the Rules Committee.

SB 1187 services outside municipal boundaries; requirements passed the House Government and Higher Education Committee on Thursday by a vote of 8-1. This bill seeks to place standards of operation on municipal recycling, processing and landfill services that would mirror private sector standards. Stakeholders agreed prior to the hearing to meet and discuss concerns and try to reach some livable agreement. That commitment was reflected in testimony. For some cities the issue of violation of intergovernmental agreements is the main concern and for others it is the smaller, non-commercial customer usage and regulating that it of primary focus. The stakeholders will concentrate primarily on these two issues. The bill now goes to the Rules Committee.

SB 1342, responsibility of payment; utility services, also passed the House Government and Higher Education Committee on Thursday, by a vote of 7-0. The measure states that for residential property of four or fewer units, a garbage collection service provider, private water company or sewer corporation is prohibited from requiring payment of garbage collection service rates and charges by anyone other than the person who the provider or company contracted with to provide the service, who physically resides or resided at the property, and who receives or received the service. The same conditions apply to a municipality's ability to require payment of unpaid utility user fees. However recent focus on the bill has come from Section One, which addresses the clean-up of property by municipalities and liens. Just prior to the committee the sponsor, proponents, a few cities and the League met to discuss possible amendments to address the cities' concerns, and the sponsor agreed to do so. The bill now goes to the Rules Committee.

Pawnbrokers, Gold, and Fees

On Monday, the House passed HB 2480 municipalities; pawnbrokers; gold; prohibited fees by a vote of 31-28. Sponsored by Rep. Warren Petersen (R-Gilbert), the bill prohibits municipalities from imposing a fee, tax, or assessment on a pawnbroker or person in the business of buying gold in connection with any reportable transaction. The League opposes the bill as it threatens successful policing tools that help locate and return stolen goods to owners. Pawnbroker and gold dealer transaction fees are directly tied to programs that fund police detectives and computer systems that solve crimes and help pawnbrokers comply with state law. The bill now moves to the Senate Government Committee.

Municipal Elections

On Thursday, the Senate Judiciary Committee passed a strike-everything amendment to HB 2214, by a vote of 7-0. The strike-everything amendment mirrors the original HB 2543 and establishes a formula for determining the majority of votes cast in municipal elections for the office of mayor or city council. If more candidates receive a majority of votes than there are seats to be filled for that office, the candidates who receive the highest number of votes shall be declared elected to that office. If no candidates or not enough candidates receive the majority of votes cast, the number of candidates who advance to the general or runoff election must be equal to twice the number of seats to be filled. The League supports the amendment, as it is a League Resolution that will save taxpayer dollars by eliminating unnecessary elections. We are grateful to Representative Michelle Ugenti (R-Scottsdale) for sponsoring the original bill (HB 2543) in the House and to Representative Warren Petersen (R-Gilbert) for championing the issue after it was bogged down by procedural hurdles. It now moves to the Rules Committee.

Legislative Bill Monitoring

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

SB 1079: solid waste collection; multifamily housing
SB 1291: firearms; state preemption; penalties
HB 2570: municipalities; vegetation requirements; prohibition
HB 2320: firearms; permit holders; public places
SB 1133: TPT; municipalities; customer refund claims
HB 2324: intergovernmental agreements; public agency indemnification
HB 2447: (now) real property managers; consolidated returns
HB 2480: municipalities; pawnbrokers; gold; prohibited fees
HB 2563: health facilities; substance abuse recovery

Legislative Bulletin is published by the League of Arizona Cities and Towns.
Forward your comments or suggestions to league@azleague.org.