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The 2013 Hammer Awards

It’s the most wonderful time of the year; time to hand out some virtual hardware to the winners of the 4th annual Hammer Awards, Arizona Chamber of Commerce and Industry President and CEO Glenn Hamer’s look back at the wild and the wacky of the year in politics and anything else that’s on his mind.

State Leader of the Year: Gov. Jan Brewer

This one was a runaway. Not even close. The governor at the outset of the 2013 legislative session took on a set of issues that would make most elected officials wilt: Medicaid restoration and sales tax reform. She spearheaded highly effective campaigns on both issues, stood strong against a motivated opposition, and won the day in each case. Her accomplishments as governor are too numerous to mention, but she outdid herself this year, adding to her profoundly positive record for the state’s business environment for which the state will reap rewards for years to come. She’s building a legacy that will be tough to match.

National Politician of the Year: New Jersey Gov. Chris Christie

Are you a Republican interested in running for statewide or national office? Take a lesson from two-time Hammer Award winner Gov. Chris Christie. The governor worked hard in his first term to burnish his image as pragmatic problem solver, and it paid off in 2013 when he won re-election in a route. Buoyed by a bevy of must-see YouTube videos, Gov. Christie made deep inroads into segments of the electorate that have been leaving the GOP in droves. I have no idea whether a Christie presidential campaign in 2016 will be a winning one, but his opponents underestimate him at their own peril.

Legislators of the Year: Reps. Debbie Lesko and Heather Carter

Some legislators get drafted into a fight, others volunteer. Rep. Debbie Lesko and Rep. Heather Carter volunteered to champion the year’s most contentious policy issues, and for that they each win a Hammer.

Rep. Lesko expertly navigated the thorny issues surrounding the reform of the state’s byzantine sales tax system in the face of an opposition that was perfectly willing to run out the clock on the legislative session and stick with the status quo. Rep. Lesko teamed with the governor’s tax guru, Michael Hunter, and refused to the let the session end without real reform.

Courage is an overused term in politics, but Rep. Carter has it in spades, as demonstrated by standing shoulder to shoulder with Gov. Brewer in her campaign to restore the Proposition 204 AHCCCS population. Rep. Carter didn’t waiver and remained committed in her belief that backing the governor’s plan was the right move. She was right on the policy, and I’m confident she’ll be proven right on the politics.

Rising Star of the Year: Adam Deguire

Rep. Matt Salmon’s Chief of Staff Adam Deguire has quietly become a mover and shaker in western politics. The Brophy grad has hit his stride as Rep. Salmon’s top aide after guiding Salmon’s return to Congress in the 2012 elections. Adam has done stints at the Republican National Committee as a field rep, was a senior level campaign and transition team aide to New Mexico Gov. Susana Martinez in her 2010 run, and led the Hawaii GOP as its executive director. I always think it’s risky for a Hill office staff not to have ties back to the home state. Having Adam lead the staff and earn the frequent flyer miles between Phoenix and D.C. is a great move by Rep. Salmon, who will be well served by Adam’s commitment and loyalty.

Fighting the Good Fight: Sens. John McCain and Jeff Flake

I’m in the camp that firmly believes that we’re going to see a true immigration reform package land on the president’s desk in 2014. (For those keeping score, I was also confident that we were going to get a deal in 2013, but who knew that a government shutdown and an amateur hour website were going to crowd out every other issue.) But as we sit here on the cusp of a transformative shot of adrenaline for the American economy, let’s give a Hammer where a Hammer is due. We would not have gotten this far were it not for Sen. John McCain and Sen. Jeff Flake. Arizona is incredibly fortunate to have these men representing us in the world’s greatest deliberative body.

The Great Communicator: Matt Benson

Gov. Brewer has an outstanding team, including a few members who have won Hammers over the years. This year the governor’s former press secretary, Matt Benson, takes the honors for his outstanding work as the 9th Floor’s flack.

Issues like Medicaid restoration and TPT reform were incredibly complicated and they required their own public relations campaigns, but Matt communicated the governor’s positions on these and a host of other issues and acted as a liaison between the governor and her supporters, all while making it look easy. I should also note that there is no such thing as a day off for a gubernatorial press secretary, and Matt deserves a shout out for taking incoming fire from the fourth estate while he and his wife are still navigating the toddler years. Matt’s new firm, Veridus, is lucky to have this Hammer winner on board.

I Miss You, Man Award: David Cavazos

Phoenix is the best run big city in America. That’s in large part due to the dynamic Mayor Greg Stanton and a city council of professionals. But Phoenix this year bade farewell to its terrific city manager, David Cavazos. David was able to move effectively between different political factions in order to do what was right for the city. Having led efforts that ranged from attracting new investment to downtown Phoenix to spearheading trade missions to Mexico, he leaves big shoes to fill here. I don’t envy the search committee on this one.

A testament to David and Phoenix’s work is the appointment of Ed Zuercher as acting city manager. David left a great team behind as evidenced by Ed, a consummate professional, stepping into the top job.

An Apple a Day Award: Sandra Watson

I continue to be impressed by Arizona Commerce Authority CEO Sandra Watson’s talents. She’s taken the economic development toolbox assembled by the governor and Legislature and built something significant here. Constructing the deal that brought Apple to Mesa was a master stroke.

I can tell you from having traveled to Taiwan with the governor right after the deal was announced that bringing one of the most recognized brands to Arizona was a worldwide story. I did not expect dozens of Taiwanese reporters and businesspeople to pepper our delegation with questions about what makes Arizona so attractive to high-tech manufacturers. Sandra’s work is rippling around the glove, and for that she deserves a Hammer.

The Youngest Elder Statesman Award: Jaime Molera

The business community in 2013 rallied around Gov. Brewer’s health care restoration plan, but the campaign didn’t start to gel until Jaime Molera took on the role of a sort of campaign chairman. Jaime had the credibility and talent to bring together a host of lobbyists from across the health care and business community and assemble a dynamite team of political operatives to get the deal done. I hesitate to call a young man like Jaime an elder statesman, but the results leave little doubt that he was the right man for the job. Arizona owes a debt of gratitude to Jaime for stepping into the breach.

I would be remiss if I did not also acknowledge the work of Anne DeGraw, Jaime’s colleague at the firm of Molera-Alvarez, and Brittney Kauffman at the Arizona Chamber, both of whom ran the statewide campaign’s day-to-day affairs. Though he didn’t need it, they made Jaime look good.

The Mariano Rivera Best Closer Award: Jim Norton

On the last night of a legislative session, you can practically hear “Enter Sandman” echoing throughout the Capitol. This is the time that Chamber lobbyist and R&R Partners big shot Jim Norton shines.  When it comes to closing a deal, he’s the Mariano Rivera of lobbyists. He’s the best in the business, and I am incredibly fortunate not only to have him as the Chamber’s advocate at the Capitol, but to call him a friend.

He’s also a pretty good dancer. Give the man a Hammer.

The Legislative Branch Foreign Service Award: Speaker Andy Tobin and
his Mexico City trade delegation

Arizona in very recent history has had its share of missteps when it comes to our relationship with Mexico, which is why Arizona House Speaker Andy Tobin and the seven legislators who traveled to Mexico City with him this year all deserve Hammers for hitting the reset button south of the border.

The speaker was joined by Rep. Tom Forese, Rep. Catherine Miranda, Rep. T.J. Shope, Rep. Karen Fann, Rep. Juan Carlos Escamilla and Rep. Lydia Hernandez. The bipartisan delegation was received warmly by everyone we met from Mexico’s executive and legislative branches, with everyone appreciating the genuine effort made by the bipartisan Arizona delegation to make clear that we view the Arizona-Mexico relationship as a special one characterized by friendship and trust.

Also deserving recognition are Phoenix Mayor Greg Stanton and Tucson Mayor Jonathan Rothschild, who led their own delegation to Mexico City this year. Both the mayors’ and the speaker’s trips drove home the potential benefits that could be gained by putting down deeper roots and elevating our presence in Mexico’s political and financial capital.

The Next Great Buddy Cop Tandem: Luis Gonzalez and me

I had the pleasure earlier this year of traveling to Guadalajara, Mexico with a delegation led by Mayor Stanton. As a big baseball fan, I was thrilled when I found out Luis Gonzalez was joining our group as a representative of the Diamondbacks.

By the time trip was over, I had been able to give Luis my keen insights on the improper use of closers, the proper execution of a suicide squeeze play, hidden ball tricks and when to pitch out against left-handed batters. I got the feeling there was some real chemistry there, the kind that a Hollywood screenwriter might want to tap into for the next buddy cop hit. I sense box office gold.

Most Versatile Player Award: Steve Macias

One of the reasons I love my job is because I get to work with an absolutely first class board of directors. The boards of the Chamber and the Arizona Manufacturers Council are comprised of some of the most outstanding leaders in their industries across the state.

One of these leaders is Steve Macias, the chairman of the AMC. Steve is the consummate champion for manufacturing in Arizona. As the president of Pivot Manufacturing, Steve knows the shop floor firsthand, which makes him such an effective advocate for this critical sector of Arizona’s economy.

Steve does it all for the Chamber. In addition to chairing the AMC, he’s always willing to serve as a master of ceremonies or moderator, and he’s an outstanding writer, providing insight through his occasional Made in Arizona columns. And the guy’s got a biting wit. He deserves a Hammer.

The Milton Friedman Rock Star of the Year Award: Bono

U2 frontman Bono has long been a champion of foreign and charitable aid to Africa as a means to alleviate poverty across the continent.  But in a speech at Georgetown this year, he said, “Aid is just a stopgap. Commerce [and] entrepreneurial capitalism take more people out of poverty than aid. We need Africa to become an economic powerhouse.”

Bono, your Chamber membership form and PAC solicitation are in the mail along with your Hammer.

Book of the Year: Immigration Wars: Forging an American Solution
 
Former Fla. Gov. Jeb Bush and Goldwater Institute legal beagle Clint Bolick win the Hammer for their book Immigration Wars.

The book is an excellent piece of work, full of real, actionable solutions on the immigration front that could find themselves into the House’s immigration package.

Citizen Advocates of the Year: Linda Stanfield and Craig Barrett

One of them owns a plumbing franchise; the other is the former CEO of one of the world’s most respected tech companies. But both of them win a Hammer for stepping into the arena of public advocacy.

Linda Stanfield runs Benjamin Franklin Plumbing in Arizona. She was the public face for TPT reform this year, testifying in committee hearings, appearing in campaign videos and standing alongside the governor at press conferences and, deservedly, at bill signing ceremonies. We need more Linda the Plumbers shaping policy in Arizona.

Craig Barrett heads Gov. Brewer’s Arizona Ready Education Council. He’s also the former CEO of Intel. If he wanted to, he could spend his days on a beach sipping mai tais, but instead he’s devoting his energy to ensuring that Arizona has an absolutely world-class education system, with high standards and expectations, accountable principals and teachers, engaged parents and students ready to learn.

Supreme Court Decision of the Year: Campaign contribution limits (award accepted by Rep. J.D. Mesnard)

Since it might seem unseemly to bestow state Supreme Court justices with the acclaim and notoriety that comes with a highly valued Hammer award, I’ll recognize state Rep. J.D. Mesnard, the architect of legislation that ushered in the modern era of political free speech in Arizona in a law recently upheld by the state’s highest court.

Also deserving recognition are attorney Mike Liburdi, who successfully argued in favor of the new contribution limits and Andy Gordon who, on behalf of the business community, filed an amicus brief that argued for the removal of aggregate limits on a candidate’s ability to accept PAC donations. Hammers all around!

Chairman of the Board: Rep. Tom Forese

Who needs a Hammer when you’ve got a gavel? Give Rep. Tom Forese a Hammer Award for expertly using his position as state House Commerce Committee chairman to hold informational hearings on topics that matter for Arizona’s economy. I was able to participate in his hearing on the state’s aerospace industry and the mining industry this year, and both were filled with outstanding content. There are true industry leaders in Arizona, and Rep. Forese deserves kudos for urging them share their knowledge with lawmakers.

From all of us at the Arizona Chamber, we wish you all the best this holiday season and in 2014.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

online sales tax issue

Legislative Session Improves Business Landscape in Arizona

The Arizona Small Business Association (ASBA), the largest trade association in Arizona representing over 11,000 member businesses in all 15 counties, tracked 65 bills during Arizona’s 51st Legislature (Jan. 14 – June 13, 2013), eight of which were Priority Bills. ASBA has announced all eight Priority Bills passed.

“We have a strong sense of responsibility to our members and Arizona’s business community,” states Jerry Bustamante, ASBA sr. vice president of public policy. “We understand that our actions influence how our elected officials vote and that our members hold us to a high standard.”

To advocate for businesses throughout Arizona, ASBA focused on five legislative priorities: 1) Taxation, 2) Regulation, 3) Economic Development, 4) Health Care and 5) Education.

“Bills signed into law such as HB 2147 and 2324 are excellent examples of a good public policy that, collectively, make Arizona more business-friendly and provide relief to existing businesses,” says Rick Murray, CEO of ASBA. “HB 2111, commonly known as TPT, on the other hand, is a single bill that will make a dramatic contribution that will completely change the landscape in which businesses operate. TPT will provide a much needed overhaul to an overly burdensome tax system.”

Bustamante adds, “ASBA is proud to have been part of, and have taken a leadership role in, the coalition of business groups that fought to reform TPT and bring much-needed relief to Arizona.”

The following were ASBA’s 2013 Priority Bills:

HB 2111: Transaction Privilege Tax Change (TPT)

  • Sponsor: Rep. Debbie Lesko, LD 21
  • Summary: This is the Transaction Privilege Tax (TPT) simplification bill that intends to significantly reform how sales taxes are collected in Arizona. The intent of the bill is to provide Arizona businesses with, and return Arizona to, a single organization that manages all tax and audit activities. The Arizona Department of Revenue would be charged with creating an online portal to provide a single location to get a TPT permit, file TPT returns and make TPT payments for all jurisdictions in the state.
  • Result: After much debate and compromise, HB 2111 passed out of the House with a 58-1 vote, passed out of the Senate with a 29-0 vote on the legislature’s final day and will soon arrive on Governor Brewer’s desk to be signed into law.

HB 2147: Unemployment Benefits; Proof; Eligibility

  • Sponsor: Rep. Warren Petersen, LD 12
  • Summary: This bill is the latest effort to reform how unemployment benefits are delivered in Arizona and attempts to level the playing field where businesses have been at a disadvantage. This bill provides much-needed relief to Arizona businesses by shifting the burden of proof on an applicant who resigned their employment but claims they were fired. Unemployment insurance applicants, rather than the employer, will have to demonstrate that they involuntarily left employment.
  • Result: HB 2147 passed out of the House with a 34-24 vote, passed out of the Senate with a 17-12 vote and was signed into law by the Governor.

HB 2324: TPT Exemption; Leases; Affiliated Companies

(Municipal Tax Code; Leases)

  • Sponsor: Rep. Eddie Farnsworth, LD 12
  • Summary: This bill exempts commercial leases from TPT tax when the owner of the business and the building being leased is one in the same. Municipalities and special taxing districts are prohibited from levying a transaction privilege or use tax on gross income derived from leasing real property between affiliated companies, businesses or persons, or by a reciprocal insurer. Cities that do collect such taxes may continue to require payment until October of 2013.
  • Result: HB 2324 passed out of the House with a 58-0 vote, passed out of the Senate with a 29-0 vote and was signed into law by the Governor.

HB 2336: Taxation; Retail Classification; Cash Equivalents

  • Sponsor: Rep. Tom Forese, LD 17
  • Summary: This bill exempts a number of items referred to as “cash equivalents” purchased in advanced in a dollar value denomination from retail TPT tax. These cash equivalents are gift cards, vouchers, money orders and traveler’s checks. No TPT is paid to buy a gift card, but TPT is paid when a gift card is used to purchase goods.
  • Result: HB 2336 passed out of the House with a 59-0 vote, passed out of the Senate with a 29-0 vote on the legislature’s final day and will soon arrive on Governor Brewer’s desk to be signed into law.

HB 2599: Procurement Code; Amendments

  • Sponsor: Rep. Justin Pierce, LD 25
  • Summary: This bill amends Arizona’s procurement code to more closely scrutinize state employees involved in purchasing decisions who move back and forth between government and private sector jobs. The bill also makes technical changes in how the state selects the winner of an RFP, and its overall intent is for government to operate more like the private sector.
  • Result: HB 2599 passed out of the House with a 59-0 vote, passed out of the Senate with a 24-0 vote and was signed into law by the Governor.

SB 1168: Internal Revenue Code Conformity

  • Sponsor: Steve Yarbrough, LD 17
  • Summary: This bill makes changes to Arizona’s income tax laws to ensure that they conform to the federal IRS code in effect as of January 1, 2013.
  • Result: SB 1168 passed out of the Senate with a 28-0 vote, passed out of the House with a 58-0 vote and was signed into law by the Governor.

SB 1169: Prop 117, Conformity

  • Sponsor: Steve Yarbrough, LD 17
  • Summary: This bill makes various changes to the Arizona revised statutes in order to conform to Proposition 117 (property tax assessed valuation; limitation), which was passed by Arizona voters during the 2012 general election. Proposition 117 had nothing to do with the tax rate, but caps at five percent the maximum increase in property value that taxable real property can grow in a certain year.
  • Result: SB 1169 passed out of the Senate with a 28-0 vote, passed out of the House with a 58-0 vote and was signed into law by the Governor.

SB 1233: Limited Liability Companies; Ownership Interests

  • Sponsor: Senator Adam Driggs, LD 28
  • Summary: We refer to this bill as the estate planning bill. This bill amends the Limited Liability Company Act by adding a new provision that governs members as it relates to forms of ownership. An interest in a limited liability company (LLC) may be held by two or more people as joint tenants with right of survivorship, or by a married couple as community property with right of survivorship, except as prohibited or restricted in an operating agreement.
  • Result: SB 1233 passed out of the Senate with a 28-0 vote, passed out of the House with a 56-0 vote and was signed into law by the Governor.

ASBA develops its policy positions and statements through its Public Policy Committee, which is comprised of ASBA members providing volunteer leadership and key ASBA staff. Under the direction of ASBA’s Board of Directors, the Public Policy Committee is charged with conducting research, surveying the membership, developing ASBA legislative priorities tracking bills and taking action to influence the passage or defeat of bills. Learn more about ASBA and its role in public policy, visit www.asba.com or call 602-306-4000 or 520.327.0222.

sales.tax

Arizona lawmakers adopt sales tax overhaul

The Arizona Legislature adopted a major overhaul of the state’s complicated sales tax collection system in the final hours of the session Thursday night after a deal with cities and towns removed a major roadblock.

Municipalities led by the League of Arizona Cities and Towns were able to hold off the overhaul after raising concerns they would lose revenue. Gov. Jan Brewer made the overhaul a priority of the legislative session and made major compromises before the final deal was struck Thursday.

The Senate passed House Bill 2111 unanimously and the House passed it with just one opposing vote.

The overhaul would not impact what ordinary consumers pay at store checkouts. Instead, it will make it easier for businesses that pay a so-called Transaction Privilege Tax. The deal leaves in place a tax on new construction that funds many city projects but eliminates it for companies that do home and other repairs.

Municipalities could still lose revenue, but the compromise gives them better ways to track revenue and clarifies how audits are done, said the sponsor, Rep. Debbie Lesko, R-Peoria. The deal that was finally cut Thursday happened after months of impasse.

“The League came to the table and gave us some reasonable language about what they wanted,” Lesko said.

The deal came together as the Legislature pushed out a budget and Brewer’s Medicaid expansion plan and made a rush to finish work and adjourn Thursday night.

The overhaul targets the state’s complex system where businesses are taxed on their revenues, at different rates by different entities, including the cities, counties and the state. The tax on contractors and other business transactions known as the TPT, and the state alone is estimated to collect $3.8 billion of the state’s total revenue of $8.6 billion this budget year. Businesses also were subject to multiple audits and had to file returns in every city, county and town where they operated.

That system will be eliminated, with the state overseeing all those functions.

Flag USA and New Mexico

Kavanagh returns as House Appropriations chair

Fountain Hills Republican John Kavanagh will return as chairman of the state House Appropriations Committee when Arizona lawmakers report in January for their 2013 regular session.

Kavanagh’s return as Appropriations chairman is among 18 committee chairmanships announced Thursday by Speaker Andy Tobin in a post-election reorganization.

Other returning House chairmen include Bob Robson for the Rules Committee, Doris Goodale and Eddie Farnsworth for Judiciary.

Newly appointed chairmen include Debbie Lesko for the tax-writing House Ways and Means Committee and Justin Olson for a new Federalism and Fiscal Responsibility Committee.

Lesko is currently House majority whip.

In all, the House will have 18 committees, all led by majority Republicans.