What Does the Legislature Do for Business?

by RaeAnne Marsh

As the 51st Legislature convenes its 2013 Legislative Session this month, we look back at a few of the hundreds of bills introduced and considered by the 50th Legislature during its 2011 and 2012 legislative sessions.

Jobs and Business Creation

H.B. 2272  Clinical Trial, Public Information Requests
This bill expands the exemptions from public records laws of information or intellectual property developed as part of a university-related research, recognizing that universities often enter into public-private partnerships designed to produce new products.
Passed and signed into law.

H.B. 2680  Procurement; Arizona Bidder; Preference
This bill provides that, for procurement contracts awarded by competitive sealed bid, Arizona bidders must be given preference over nonresident bidders in the case of competing offers that are identical in price.
This bill did not pass. One issue with it is how to define exactly the requirements to be an “Arizona” bidder. 

S.B. 1442  Prime Contracting; Manufacturing Facilities; Infrastructure
This bill allows state funds to be given to a local municipality to pay up to 80 percent of public infrastructure to support large-scale manufacturing projects, part of the funds to come from the share of sales tax allocated for cities and towns.
Passed and signed into law.



H.B. 2500  Poorly Performing Schools; Intervention Strategy
This bill requires schools to implement a science, technology, engineering and mathematics (STEM) intervention strategy if they are below average or failing.
Passed and signed into law.

H.B. 2697  Teachers; Certification; Subject Knowledge
This bill exempts secondary education certificate applicants from the subject knowledge portion of the proficiency examination if the State Board of Education determines that the applicant has work experience in science, technology, engineering and mathematics (the focus of the Governor’s Statewide STEM Action Network) field and can demonstrate adequate knowledge through a post-secondary education degree or equivalent.
Passed and signed into law.


Business Taxes

H.B. 2123  Transaction Privilege Tax Reform Committee
This bill establishes a 13-member committee to study, make recommendations and propose legislation to revise Arizona’s tax code to broaden the TPT tax base to reflect an economy now dominated by services rather than by agriculture and manufacturing. The committee was required to submit a report to the governor and the legislature by October 31, 2012.
Passed and signed into law.

H.B. 2466  Payment; Local Sales Tax
This bill directs the Department of Revenue to establish an online portal for the payment of municipal transaction privilege tax and excise tax.
Passed and signed into law.

H.B. 2705  Small Business Employment; Tax Rate
This bill provides that owners of small businesses located in Arizona before July 2017 would be eligible for income tax rate reductions for net increases in specified “qualified employment positions.”
This bill did not pass. Issues with it include how to define exactly the requirements to be a “small business” and what are “qualified employment positions.” 

H.B. 2815  Employment; Incentives; Regulatory Tax Credit
This bill provides several changes tax statutes in the areas of capital gains (phasing in a reduction of 25 percent by 2015), depreciation, net operating loss (extending period from 5 years to 20 years), exempt personal property (increasing from $68,000 to $125,000) and tax credits for new employment, renewable energy and qualified facilities (expanding the credits or removing the cap). It also establishes an employer-funded job training program study committee.
Passed and signed into law.

S.B. 1046  Corporate Tax Allocation; Sales Factor
This bill allows a multistate service provider to elect to apportion service revenues to the destination of a customer, phasing in tax year 2014 to tax year 2016.
Passed and signed into law.


Licensing Processes

H.B. 2744  Regulatory Rules; Amendments
This bill modifies the statutes governing regulatory rule making, specifically eliminating the summary rule process and creating an expedited rule-making process for rules that do not increase the cost of regulatory compliance or reduce the procedural rights of regular persons and further complies with statutory criteria.
Passed and signed into law.


Other Bills that Affect Business Operation

H.B. 2150  Unemployment Insurance; Independent Contractor; Appeals
This bill gives employers more tools and extends the deadline for them to protest the awarding of unemployment benefits to an employee they have discharged.
Passed and signed into law.

H.B. 2199  Environmental Audit Privilege
This bill establishes a privilege for environmental audits that are conducted by a regulated organization or its independent contractor for the purpose of voluntarily determining compliance with environmental laws.
Passed and signed into law.

H.B. 2503  Exemptions from Punitive Damages
This bill exempts a manufacturer from liability for punitive damages (the manufacturer may still be liable for compensatory damages) if the manufacturer follows federal, state or agency-issued product standards. Such measures are already in effect in other states.
Passed and signed into law.

H.B. 2544  Recovery of Attorney Fees
This bill eliminates the requirement that a court award reasonable attorney fees in a contested action in cases where clear and convincing evidence is presented that the claim or defense constitutes harassment, is groundless and is not made in good faith.
Passed and signed into law.

Sources: Records of the 50th Legislature, on the Arizona State Legislature website, azleg.gov; Arizona Chamber of Commerce and Industry; and Arizona Small Business Association 

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