Legal Corner: Emerging Issues Facing Local Governments

Christina Estes-Werther, League General Counsel

What do Arizona's Reed v. Town of Gilbert sign ordinance case, Uber and AirBNB, and police body cameras have in common? These were just a few of the topics addressed at the International Municipal Lawyers Association (IMLA) Annual Conference last month.

The IMLA was established in 1935 and provides continuing legal education (CLE) courses for local government attorneys across the United States and Canada in addition to other services. The IMLA seminars assist practicing attorneys with obtaining their required CLE credits along with providing the latest information and analysis on pivotal court cases.

This article addresses several of the topics presented at the annual conference that are of interest to Arizona since they are developing issues that impact local governments.

Reed v. Town of Gilbert, 135 S.Ct. 2218 (2015) - Content-Based Sign Codes Unconstitutional

This case arose from a church's challenge to the Gilbert sign ordinance and resulted in a U.S. Supreme Court decision holding that Gilbert's sign code was unconstitutional because the town used the content of the sign to determine the type of permit to issue. For more information about the case, the Legal Corner in August provided a longer summary.

In the wake of the U.S. Supreme Court decision, municipalities across the country have been reviewing their sign codes. The IMLA annual conference focused on reviewing the details of the case and helping attorneys determine the full implications of the decision on First Amendment speech issues. While the Gilbert case focused on a local temporary sign ordinance, appellate courts across the country have returned non-sign ordinance cases to lower courts for review based on the high court's decision in Reed.

For example, a City of Springfield panhandling ordinance in the Seventh Circuit Court of Appeals was found to be content-based and therefore unconstitutional while the City of Worcester's panhandling case is currently under review in the First Circuit. Other cases pending review involve voters posting photographs of their completed ballot, restrictions on robocalls, and day labor regulation. Additionally, circuit courts are divided on how to apply Reed to on-premise and off-premise signs.

The Reed case was a relatively simple set of facts but the Court's decision has led to a complex analysis and some uncertainty about its application to other First Amendment speech unrelated to sign regulation. As the cases are heard and decided, a clearer picture will develop of the legal landscape of sign regulation in addition to speech of any type. The League will provide resources and updates on this pivotal case and its implications.

The Sharing Economy

The IMLA annual conference discussed the increased use of individuals sharing resources on a temporary basis with a business facilitating the "sharing" for a fee. An example of a sharing service is ride-sharing that allows an individual seeking transportation to connect through a web application with another individual willing to provide the transportation in their personal vehicles. As these services have become more widely-used, some cities across the country have enacted ordinances to address permitting, ADA compliance, and vehicle inspections.

In Arizona this past legislative session, House Bill 2135 (Laws 2015, Ch. 235) established state-wide regulations for transportation network companies such as taxis, limousines and any vehicle providing passenger services for a fare such as ride-sharing. The legislation defines a "transportation network company" as an entity permitted by the Department of Transportation to operate in Arizona that uses a digital network or software application to connect passengers to their transportation services. Additionally, the legislation prohibits cities and towns from regulation except for public bodies that operate a public airport.

Another sharing model known as short-term rentals is also on the rise. There are different types of short-term rentals such as an owner-occupied home that rents rooms in the home to other types of rentals by owners who may not live on the property and either rent individual rooms or an entire home for a limited time. These spaces are listed through an online marketplace by companies such as AirBNB and HomeAway, which serves as the point of service for listing and booking of accommodations for a fee.

The use of a residence as a vacation rental raises unique issues. Cities around the country are facing concerns from residents about the loss of residential character, safety concerns when houses are converted to hold multiple occupants beyond the allowable number, and the difficulties of enforcing regulations when temporary occupants fail to observe parking, noise, and trash regulations. Another concern voiced at the IMLA conference by some municipalities is the loss of revenue by homeowners that do not live on the property operating their home as a business but failing to pay the appropriate tax. In Arizona, short-term vacation rentals are subject to tax under both the "hotel" and the "transient lodging" (bed tax) classifications. See Model City Tax Code Sections 100, 444 and 447.

Cities and towns across the county grappling with this new model have raised additional concerns about the safety of occupants in the rental dwellings and a lack of affordable housing in certain areas since homes that would have been previously placed on the market are being used as vacation rentals. Austin, Portland (Oregon), San Francisco and Chicago have enacted ordinances on some of these issues and may provide a model for other cities and towns as home sharing increases in Arizona.

Police Body Cameras

Earlier this year, the Legal Corner discussed the recent developments relating to police body cameras. The legislative study committee chaired by Senator John Kavanagh (R-Fountain Hills) and Representative Sonny Borrelli (R-Lake Havasu City) began holding its meetings in September to investigate the challenges of this new technology and recommend policies and laws on the use of the body cameras and recordings. A legislative report will be issued by December 31, 2015 that compiles the information presented at these committees along with a recommendation regarding the use of police body cameras.

Additionally, the Arizona State Library, Archives and Public Records ("State Library") formed a work group in February 2015 consisting of law enforcement officers, attorneys, state, city and county staff, and risk management personnel. The workgroup has reviewed and assisted in the development of a draft retention record series that encompasses body cameras. The final report is expected to be compiled by the end of the year and the retention record series will proceed through the State Library's formal review process.

The League will provide an update on these reports from the State Library and the Legislature when they are available. For more information about the legislative study committee, visit:


The IMLA Conference provided an opportunity to receive updates on the latest legal topics and learn from the experiences of municipalities throughout the county about issues facing local governments. This article only addressed a few of the seminars to provide an overview of the emerging issues relevant to Arizona that may be subject to future legislative action at the state or city level. For more information about IMLA or the recent conference seminars, visit their website.

League of Arizona Cities and Towns
1820 W. Washington St.
Phoenix, AZ  85007
Phone: 602-258-5786
Fax: 602-253-3874

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