This year’s Legislative session lasted 122 days and of the 1,079 bills originally posted, 353 were passed. Of the 353 bills passed, 342 were signed into law and 11 were vetoed by Gov. Doug Ducey.
Cheryl Lombard, president and CEO of Valley Partnership, an advocacy group for responsible development, describes the session as good from a business perspective.
She says, “Priorities such as University Bonding, enhanced manufacturing environment with tax credits and Highway User Revenue Fund (HURF) funding were secured.”
Valley Partnership also help lead a consensus on Government Property Lease Excise Tax (GPLET) reforms between the Arizona Tax Research Association (ATRA), cities and the development community, which resulted in the shortening of the time frame for a tax abatement in certain areas. However, with the Goldwater Institute’s lawsuit on GPLET means it’s unclear if work on the slum and blight definition for GPLET will continue over the summer as well as the overall future for the program.
Lombard says, “Valley Partnership will continue its presence at the Arizona Legislature and with key state agencies to advocate for responsible development,” which will likely include more legislation on taxes, how to pay for infrastructure, especially transportation investment, and other legislation to keep growing Arizona’s economy.
Bills signed by the Governor:
HB2088/SB1125 (incorporation; urbanized areas) – Requires a county Board of Supervisors to proceed with the incorporation of an area without an approved resolution from the appropriate municipality if the area proposing incorporation is populated with 15,000 or more persons and has a higher population than the municipality opposing the incorporation. The Governor has signed HB2088.
HB2116 (municipal zoning; rezoning protests) – Requires a three-fourths vote by a governing body of a municipality to approve a municipal zoning change if 20 percent of the owners of the property owners by area and number in the zoning area file a protest against the change.
HB 2213 (GPLET reform; K-12 taxes) – As introduced, HB2213: required the government property lessor, instead of the lessee, to calculate the GPLET for each lessee; required GPLET properties to pay the full tax designated for school districts during the abatement period; limited the definitions of slum and blight; and changed the requirements for grandfathered projects (pre-2010 rates) to have an executed lease by Jan. 1, 2017. However, Rep. Vince Leach held stakeholder meetings and the bill was amended to reflect a compromise. As amended, HB2213 removes any changes to the grandfathered (pre-2010) projects; restores the definitions of slum and blight; limits to eight years the lease period for which the GPLET is fully abated in a central business district, excluding development agreements for leases if a resolution, ordinance, RFP or intent to lease was approved before January 1, 2017; and outlines additional accountability and reporting requirements for the Department of Revenue and government lessors.
SB1480 (revisions; community facilities districts) – Makes various changes to community facilities districts (CFD). SB1480, among other provisions: requires a city or county governing board to hold a public hearing within 60 days of receiving a petition signed by at least 25 percent of the land owners, in order to consider an application for formation of a CFD; stipulates additional requirements for the petition and formation of a CFD; requires the governing body to provide in writing the reasons for not adopting a resolution to form a CFD, and requires the governing board to identify changes needed for the application to be approved; establishes requirements for board composition, including that two members be nominated by the largest landowner in the CFD; subjects the CFD board to conflict of interest guidelines; requires the CFD to make a good faith effort to implement the public infrastructure general plan (included in the petition); establishes guidelines for a governing body to approve a public infrastructure project; and makes additional disclosure and reporting requirements of the CFD.
SJR1003/HJR2002 (lower Colorado basin; forbearance authority) – Allows Arizona to forebear its right to use intentionally created surplus (ICS) water from the Colorado River if: Mexico agrees to reduce its deliveries of Colorado River water in the same years that deliveries to Arizona are reduced due to shortage; and Colorado River entitlement holders are allowed to form partnerships with Mexico to supplement the lower Colorado River mainstream to generate intentionally created surplus. HJR2002 also authorizes the Director of the Arizona Department of Water Resources to enter into specified agreements regarding forbearance of Colorado River waters. The Governor has signed HJR2002.
Bills that failed:
HB2321 (homeowners’ associations; cumulative voting; prohibition) – Prohibits cumulative voting by members when voting for the Board of Directors of a homeowners’ association or unit owners’ association. The Governor vetoed HB2321; in his veto message, the Governor states that it is not the role of the government to regulate the way homeowners’ and unit owners’ associations vote in their board meetings.
SB1371 (political subdivision; ownership of a hotel) – As a strike-everything amendment offered in the House Ways and Means Committee, SB1371 would have prohibited any political subdivision of the state from constructing, developing, or entering into a lease to operate a hotel or motel on property owned by the political subdivision. However, after risen concerns about the amendment, it was ultimately withdrawn.
SB1404 (community facilities districts; amendments) – Modifies the definition of public infrastructure which would severely limit use of CFDs (among other provisions). However, SB1404 was never given a committee hearing.