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2013 Legislative Review

First Regular Session of the 51st Arizona Legislature

 

 

Dear Members:

 

Government relations advocacy is the cornerstone of the Arizona Bankers Association. For over 100 years, the Association has worked hard to pass legislation that would benefit the industry and to defeat legislation that would be detrimental our interests. Part of what makes this work so rewarding is that our successes redound to the general business community and the broader economy.

 

This year we were again faced with an onslaught of legislation that would have made banking in Arizona more expensive and difficult. Some of the more alarming proposals would have permitted tax lien lending from out-of-state entities, extended deficiency protection to short sales, and created new taxing districts for solar equipment installations that would have displaced bank lien positions.

 

We were also able to get legislation passed that will create a pooled collateral program for municipal deposits and permit the use of the Federal Home Loan Bank Letter of Credit as an acceptable form of collateral. Our effort to get Dodd-Frank-mandated derivatives legislation and a UCC Article IX modification on secured transactions passed died due to political infighting unrelated to the merits of the bills.  They will be among the AzBA’s first orders of business in the coming legislative session which begins in January.

 

What follows is a summary of the substantive bills the AzBA tracked along with a brief description of each. The summaries are divided into key bills, enacted legislation, and un- enacted legislation. Please keep in mind that these are bill summaries designed to alert you to significant provisions and are not comprehensive recitations of each bill. Additionally, nothing in this report should be viewed as a legal opinion. If you have legal questions on any bill you should contact your bank’s legal counsel. Unless otherwise specified the general effective date for all bills is September 13, 2013.

 

I am pleased to present this legislative review to you as I believe it represents the best of what the AzBA has to offer – exceptional government relations advocacy that protects your bottom line and the vitality of our industry. I would like to extend a special thank you to the members of our Government Relations Committee. They devote significant time to serve the industry in this very import endeavor. Without their help and commitment none of this would be possible.

 

Thank you for your continued support and please contact me with any questions.

 

 

 

Sincerely,

Paul Hickman

President & CEO

 

TABLE OF CONTENTS

 

SESSION IN REVIEW                                                                         

 

 

KEY LEGISLATION                                                                              

 

 

Priority Legislation

 

Appraisal

 

Human Resources

 

Mortgages, Mortgage Brokers, Foreclosures & Appraisals

 

Privacy

 

Taxation

 

Trusts and Estates

 

ENACTED BILLS                                                                               

 

 

Bonding

 

Bankruptcy

 

Credit Cards

 

Elder Financial Abuse

 

Human Resources

 

Insurance

 

Lending

 

Taxation

 

Trusts and Estates

 

Uniform Commercial Code

 

Miscellaneous

 

UNENACTED BILLS                                                                     

 

ENACTED BILL SUMMARIES                                                  

 

 

 

FIRST REGULAR SESSION

 

H2033 (Chapter 50): FORECLOSURES; DEEDS OF TRUST; AFFIDAVITS H2071 (Chapter 11): ADE; OPERATIONS

H2111 (Chapter 255): TRANSACTION PRIVILEGE TAX CHANGES H2143 (Chapter 87): JOINT TENANCY SEVERANCE

H2154 (Chapter 118): SUPPLEMENTAL APPROP; MORTGAGE SETTLEMENT MONIES H2180 (Chapter 206): VEHICLE LIENS; CERTIFICATES OF TITLE

H2205 (Chapter 207): TANF; ELECTRONIC BENEFIT TRANSFER PROHIBITIONS H2209 (Chapter 130): INDUSTRIAL DEVELOPMENT AUTHORITIES

H2231 (Chapter 133): EXONERATION; APPEARANCE BONDS H2260 (Chapter 136): CERTIFIED PUBLIC ACCOUNTANTS

H2277 (Chapter 121): UNIFORM COMMERCIAL CODE; FUNDS TRANSFERS H2281 (Chapter 224): FORECLOSURE; TENANT NOTIFICATION

H2308 (Chapter 26): PROBATE; OMNIBUS

H2310 (Chapter 140): COURTS; EVALUATION; MENTAL HEALTH; REPORT H2312 (Chapter 95): SOLICITATION; TEXT MESSAGE; PROHIBITION H2324 (Chapter 27): TPT EXEMPTION; LEASES; AFFILIATED COMPANIES H2325 (Chapter 123): PERSONAL PROPERTY EXEMPTIONS

H2336 (Chapter 233): TAXATION; RETAIL CLASSIFICATION; CASH EQUIVALENTS H2344 (Chapter 9): PROPERTY TAX PENALTY WAIVER

H2458 (Chapter 175): EMPOWERMENT SCHOLARSHIP ACCOUNTS; FRAUD PREVENTION H2489 (Chapter 228): BONDS; FINANCING; STUDENT LOANS

H2551 (Chapter 231): OFF-HIGHWAY VEHICLES; FEDERAL AGENCIES H2619 (Chapter 157): PUBLIC DEPOSITS; POOLED COLLATERAL

S1047 (Chapter 30): MORTGAGE INSURANCE; REPEAL COVERAGE LIMITATION S1075 (Chapter 76): VEHICLE IMPOUNDMENT; IMMOBILIZATION

S1094 (Chapter 77): NOTARIES PUBLIC; IMPERSONATION; VIOLATION S1175 (Chapter 67): VULNERABLE ADULT; DUTY

S1232 (Chapter 112): TRUSTS AND ESTATES

S1233 (Chapter 198): LIMITED LIABILITY COMPANIES; OWNERSHIP INTERESTS S1237 (Chapter 36): GUARDIANSHIPS; CONSERVATORSHIPS; TRANSFER

S1311 (Chapter 48): PUBLIC MONIES; INVESTMENT

S1314 (Chapter 79): CIVIL JUDGMENTS; STATE; RENEWAL S1316 (Chapter 184): STATE BOARD OF APPRAISAL

S1341 (Chapter 185): VULNERABLE ADULTS; FINANCIAL EXPLOITATION

S1363 (Chapter 250): EMPOWERMENT SCHOLARSHIP ACCTS; EXPANSION; FUNDING

S1449 (Chapter 252): SCHOOLS; GRADUATION; PERSONAL FINANCE; ENTREPRENEURSHIP

 

 

UNENACTED BILL SUMMARIES                                                                                 

FIRST REGULAR SESSION

 

 

H2027: HOME INSPECTORS

H2159: GOVERNMENT PROCUREMENT; AMERICAN PRODUCTS H2162: VULNERABLE ADULT; ABUSE; DAMAGES

H2166: LIMITED LIABILITY COMPANIES; SERIES

H2193: FORECLOSED PROPERTIES; HOAS; MAINTENANCE H2206: ADVANCE FEE LOAN BROKERS

H2207: COLLECTION AGENCIES; LICENSE RENEWAL

H2208: LOAN ORIGINATOR EXAMINATION COMMITTEE; REPEAL H2210: BANK LOANS; CALCULATIONS

H2211: LOAN ORIGINATORS

H2264: TAX INCENTIVES; MANUFACTURERS; SELF EMPLOYMENT H2302: WORKERS’ COMPENSATION PREMIUMS; PAYMENT

H2315: LOCAL GOVERNMENTS; REGULATION; REQUIREMENTS H2320: RULES; STATUTORY REVIEW; STATE AGENCIES

H2321: REGULATION; CRITERIA; REAUTHORIZATION

H2359: STUDENT PROTECTION; CREDIT CARD SOLICITATION H2362: AFFORDABLE HOUSING PROJECTS; TAX ASSESSMENT H2365: MICROENTERPRISE DEVELOPMENT PROGRAM

H2387: RECOVERY OF ATTORNEY FEES

H2428: INVESTMENT ADVISORS; REPRESENTATIVES; REPORTING REQUIREMENTS H2454: INTERNET PROVIDERS; PERSONAL INFO

H2469: PERSONAL INFORMATION; ENCRYPTED DATA H2479: PERSONAL PROPERTY DEPRECIATION

H2483: PUBLIC NOTICES; PUBLISHING; PUBLIC MEDIUM H2487: HOUSING DEV AREA; DECLARATION; REPEAL

H2491: SECURITIES ENFORCEMENT; UCC; SECURED TRANSACTIONS H2512: TRUSTS; BENEFICIARY SUITS AGAINST SETTLOR

H2519: ASSIGNMENT OF TAX LIEN

H2538: VEHICLE TITLE LOANS; VEHICLE SALES

H2541: STATE CONTRACTS; PREFERENCE; AZ BUSINESSES H2559: PROPERTY; RECEIPT; NOTIFICATION

H2584: RENEWABLE ENERGY AND CONSERVATION DISTRICTS H2603: PROCUREMENT; AZ BIDDER; PREFERENCE

H2612: AUTO TITLE LOANS; MILITARY MEMBERS H2614: COLLECTION AGENCIES

H2622: REAL ESTATE DEPARTMENT; CIVIL PENALTIES H2624: FORECLOSURE MEDIATION PROGRAM

H2634: RESIDENTIAL FORECLOSURE PREVENTION ASSISTANCE H2642: CALL CENTER RELOCATION; NOTICE; PENALTY

H2661: UNIFORM TRANSFERS TO MINORS; AGE

HCR2004: TAXES; FEES; PURPOSE; TRANSFER; PROHIBITION HCR2006: PROPERTY VALUATION FREEZE; DISABLED PERSON HCR2011: PERSONAL PROPERTY TAX EXEMPTION AMOUNT HCR2018: CITIZENS UNITED DECISION; REPEAL

S1012: RESIDENTIAL MORTGAGES; MORTGAGE BROKER DUTIES

 

S1039: UNIFORM COMMERCIAL CODE; SECURED TRANSACTIONS S1041: CIVIL UNIONS

S1052: SPECIAL DETAINER ACTIONS; SUMMONS; TIME S1055: PROCESS SERVERS; PRIVILEGES

S1056: PROCESS SERVERS; PUBLIC RECORDS; CONFIDENTIALITY S1101: PROCUREMENT CODE; FRAUD; ATTORNEY GENERAL S1141: TRUST PROPERTY; SHORT SALE

S1162: SALES TAX; REDUCED REPORTING REQUIREMENTS S1163: EMPLOYMENT DISCRIMINATION; PROHIBITION

S1166: IDENTIFYING INFORMATION; FORMER PUBLIC OFFICIALS S1171: ASRS; SPOUSAL CONSENT

S1176: COLLEGE SAVINGS PLANS; SUBTRACTION INCREASE S1185: CAMPAIGN CONTRIBUTIONS; BUNDLING; LOBBYISTS

S1195: INDEPENDENT EXPENDITURES; VIOLATIONS; CRIMINAL ENFORCEMENT S1200: FINANCIAL ABUSE OF ELDERS; REPORTS

S1211: PROPERTY TAX DELINQUENCY; INTEREST RATE S1214: COUNTY TREASURER’S MANAGEMENT FUND S1230: UCC; SECURED TRANSACTIONS; FILINGS

S1331: APPROPRIATIONS; SCHOOL SAFETY

S1349: PAYCHECK DEDUCTIONS; EMPLOYEE AUTHORIZATION S1394: EMPLOYEE CREDIT HISTORY CHECK; LIMITATIONS S1395: INSURANCE; CREDIT SCORING

S1400: FORECLOSURE MEDIATION PROGRAM S1401: FORECLOSURES; RIGHT TO RENT

S1404: LICENSING ELIGIBILITY; AUTHORIZED PRESENCE S1404: LICENSING ELIGIBILITY; AUTHORIZED PRESENCE S1411: SOCIAL MEDIA PASSWORDS; PROHIBITION

S1412: DELINQUENT DEBT; AGENCIES; ATTORNEY GENERAL S1428: REAL ESTATE; FINGERPRINT CLEARANCE CARDS S1439: LEGAL TENDER

 

 

SESSION IN REVIEW                                                                                                       

 

51st Arizona Legislature, 1st Regular Session

 

The 2013 Legislative Session will go down in history as one of the longest and most politically contentious in recent memory. The First Regular Session of the 51st Legislature ended on June 14, 2013. This year witnessed a contentious debate between Governor Jan Brewer and the Republican led Legislature over Governor Brewer’s Medicaid expansion plan. After a series of cantankerous discussions with legislative leadership, the nearly six month debate was abruptly halted when the Governor called for a Special Session to address the issue. The measure passed the Legislature with support from the Democratic Caucus and a minority of Republican legislators. This has resulted in a fragmented Republican caucus in the House and Senate. It remains to be seen how this rift will affect future legislative sessions.

 

Arizona’s budget maintained many of the spending cuts seen in previous years, but did include increases in spending for education and child protective services (CPS).  The increases were a top priority for Governor Brewer and were made possible by increased revenues, despite the expiration of the one cent temporary sales tax on May 31st, making this the second of three successfully achieved priorities by the Governor. Again, the budget was opposed by many in the Republican Caucus, but was passed successfully by supportive Republicans in the House and Senate joining with the Democratic Caucus.

 

The third, and final, priority of Governor Brewer was Transaction Privilege (Sales) Tax reform. An agreement on simplifying the collection process came early, but opposition to proposed reforms on the prime contracting tax (a tax imposed on the products and services used in commercial and residential construction) was intense. The disagreement centered on the assertion by cities and towns that they would lose tax revenue if the tax was repealed and replaced with a point of sale tax model on building products. In the end, agreement was reached and the legislation passed with bipartisan support.

 

This session strained the relationship between the Governor’s office and the Republican Majority Legislature.  Rumors were rife that the President of the Senate and Speaker of the House would be removed from leadership by the unlikely alliance of Republicans and Democrats, but no mutiny ever occurred. With initial tempers running high, the brief passage of time since the conclusion of session may have already started the healing process for the Governor and Republican Legislature.

 

 

KEY LEGISLATION                                                                                                         

 

 

PRIORITY LEGISLATION

 

The Arizona Bankers Association identified a number of pieces of priority legislation  this session and partnered with other organizations in advancing several of these bills. The Association was successful in achieving proactive legislation relating to pooled collateral and the use of Federal Home Loan bank letters of credit, however priority legislation relating to Dodd- Frank conformity for derivatives and adoption of the Uniform Commercial Code provisions relating to secured transactions were victims of political infighting and the abrupt adjournment of the legislative session.

 

H2619 (Chapter 157)  PUBLIC DEPOSITS; POOLED COLLATERAL

The issue of pooled collateral has been an ongoing discussion at the Association for the last several years and has benefited from a great deal of member input and outreach with representatives of the Arizona Treasurer’s office, cities, towns, and counties. The work of the Association’s members was critical in identifying key concepts for the implementation of a pooled collateral system, but there was great deal of work needed to turn it into a piece of legislation. Early on, it appeared as if the issue of pooled collateral would need to wait another year, but ultimately the Association was able to get a bill prepared and introduced. Having laid the groundwork with the stakeholders, the legislative consideration of the bill was relatively uneventful. The exception came when the City of Phoenix voiced opposition late in the session. The resolution of their opposition was to allow the City of Phoenix to opt-out from participating. It is our hope that the City of Phoenix will come around to realize the benefits of a pooled collateral system. The other key provision of the bill was to allow the use of Federal Home Loan bank letters of credit as collateral for public deposits.

 

Summary: House Bill 2619 establishes the Statewide Collateral Pool Administrator in the office of the State Treasurer to prescribe and enforce policies fixing the terms and conditions under which uninsured public deposits must be secured by collateral. The Administrator must have the necessary policies and procedures in place to implement this legislation by July 1, 2014. Uninsured public deposits required to be secured by collateral must be deposited in an eligible depository, except that on written notice to the Administrator, a city governed by a charter that has a population of more than 1 million (City of Phoenix) is exempt. An eligible depository is prohibited from accepting any public deposit without the required collateral being deposited with a qualified escrow agent or the Administrator. Required collateral must be 102 percent of public deposits less any applicable deposit insurance, and must be valued at current market value. Establishes procedures for payment of losses and civil penalties for noncompliance. The Administrator is required to annually assess a fee on every eligible depository. The list of acceptable collateral that an eligible depository of uninsured public monies is required to deliver is expanded to include letters of credit issued by a federal home loan bank that have been delivered to the Administrator and meet other specified requirements. Expands accepted collateral delivered by an eligible depository to include letters of credit issued by a federal home loan bank.

 

ARS Titles Affected: 35

First sponsor:

Rep. Brophy McGee

Signed by Governor, Effective on General Effective Date

 

H2210 BANK LOANS; CALCULATIONS

The Dodd-Frank Act requires federally chartered banks to disclose swaps and derivatives in their loan loss calculations. The Act also requires states to pass similar legislation in order for their state chartered banks to also utilize swaps and derivatives as risk management tools. Arizona’s law, therefore, needs to be amended to meet this requirement. Although currently utilized by a small number of Arizona banks, derivatives are an important option that should be permitted for use by state-chartered banks. Unfortunately, this bill was labeled as an agency bill and held up with other bills put forth by a multitude of state agencies. As the session came to an abrupt adjournment, the numerous agency bills were not advanced and therefore failed to pass. We will pursue this legislation again in 2014.

 

Summary: For the purpose of statutory limits on the amount a bank may lend to a single borrower, the calculation of the total amount of all loans to a person must include any credit exposure arising from a “derivative transaction” (defined), repurchase agreement, reverse repurchase agreement, securities lending transaction or securities borrowing transaction between the bank and the person.

ARS Titles Affected: 6

First sponsor: Rep. Brophy McGee

 

S1039  UNIFORM COMMERCIAL CODE; SECURED TRANSACTIONS

The Association partnered with the Secretary of State’s office and representatives of the Arizona Uniform State Laws Commission to advance this piece of the Uniform Commercial Code. The bill was sponsored by Senator Michele Reagan who had previously served as the Chairman of both the House and Senate Commerce committees. She appeared to be the ideal sponsor considering her knowledge of UCC issues and her experience as a legislator. Unfortunately, Senator Reagan found herself in a very public disagreement with her district seatmate Representative Michelle Ugenti. The animosity between the two stemmed from a heated election in 2012. The unfortunate result of this feud was that SB1039 was halted in the House and was never allowed to advance. The Association will pursue this legislation again in 2014.

 

Summary: Numerous changes to statutes governing secured transactions, including modifying definitions, establishing various rules governing collateral, and allowing a person to file an information statement with respect to a wrongfully filed record. Becomes effective on September 1, 2013, and applies to a transaction or lien within the scope of the chapter even if the transaction or lien was entered into or created prior to that date. Does not affect an action, case or proceeding commenced prior to September 1, 2013. Specifies other details for transition. Also updates the uniform commercial code financing statements that a filing office cannot refuse to accept if they are in the specified form and format.

ARS Titles Affected: 47

First sponsor: Sen. Reagan

Others: Rep. Alston, Rep. Brophy McGee, Rep. Fann, Rep. Forese, Sen. McComish, Sen. Melvin, Sen. Meza

 

 

 

APPRAISAL

 

S1316 (Chapter 184) STATE BOARD OF APPRAISAL

The operation of and relationships with Appraisal Management Companies by many of the Association’s members keeps appraisal issues front and center. This year’s legislation did not garner any opposition.

 

Summary: Various changes relating to the State Board of Appraisal, including establishing regulations and registration requirements for registered trainee appraisers and supervisory appraisers, allowing the Board to determine examination fees and application fees for registered trainee appraisers by rule, allowing the Board to accept credit or debit card payments and impose a convenience fee, allowing the Board to accept and spend federal monies and grants or contributions from any public or private source to assist in their duties, and prohibiting a license or certificate revoked due to disciplinary action from being reinstated unless the applicant completes specified requirements. Statute governing   appraiser reciprocity is repealed and replaced. Appropriates $42,880 from the Board of Appraisal Fund in FY2013-14 to the Board for one full-time employee to implement the regulation of registered trainee appraisers and supervisory  appraisers.

ARS Titles Affected: 32

First sponsor: Sen. Yarbrough

 

HUMAN RESOURCES

 

H2147 (Chapter 17)    UNEMPLOYMENT BENEFITS; PROOF; ELIGIBILITY

House Bill 2147 is a dramatic shift in the unemployment insurance policies in Arizona. Historically, the burden of proof fell on the employer to disprove a valid claim for unemployment insurance. The business community has grown increasingly concerned about this policy as significant amounts of unemployment benefits have been paid to employees that have resigned or abandoned their employment.

 

Summary: The Department of Economic Security must require an individual filing a claim for unemployment benefits to provide documentation or information sufficient for the Dept. to determine his/her eligibility for benefits. The Dept. is authorized to find a claim from an individual who has the ability to produce documents or information and fails to do so invalid until the documents or information are produced. Employers are required to provide relevant documentation to the Dept. upon request to allow the Dept. to determine an individual’s eligibility for unemployment benefits. If an employer provides documentation that an individual voluntarily resigned or abandoned employment, the burden of providing documentation to determine the individual’s eligibility for benefits shifts to the individual. A person who receives unemployment benefits to which the person is not entitled by reason of fraud is not eligible to receive any benefits until the overpayment and all penalties and interest have been recovered or satisfied in compliance with a civil judgment.

ARS Titles Affected: 23

First sponsor: Rep. Petersen

Signed by Governor, Effective on General Effective Date

 

MORTGAGES, MORTGAGE BROKERS, FORECLOSURES & APPRAISALS

 

H2033 (Chapter 50)    FORECLOSURES; DEEDS OF TRUST; AFFIDAVITS

As introduced, HB 2033 raised some concerns as its stated purpose was to address activity by which “banks were driving down foreclosure sale prices” and therefore negatively impacting home values. A constituent alleged that the proceeds from private mortgage insurance were  being used to offset the auction prices on foreclosed homes and therefore artificially reducing the market value of the home – and adjacent homes. This allegation was obviously not true and would not be in the best interests of the banks. The bill was significantly amended into a form that no longer raised concerns from the banking industry.

 

Summary: If a beneficiary of a foreclosed deed of trust receives payment based on private mortgage insurance that is in addition to the proceeds of the sale, the beneficiary is required to submit to the county recorder a declaration of additional funds received containing specified information. The declaration must be submitted within four months after the date of the trustee’s sale. Within seven business days after receipt of payment by the trustee, the trustee is required to execute and submit the trustee’s deed to the county recorder for recording and to provide an unrecorded copy to the purchaser upon request. On completion of the sale and conveyance of the trustee’s deed to the purchaser, the trustee is required to notify the beneficiary of the beneficiary’s obligations.

ARS Titles Affected:11 33

First sponsor: Rep. Ugenti

Signed by Governor, Effective on General Effective Date

 

H2281 (Chapter 224)  FORECLOSURE; TENANT NOTIFICATION

In prior years a version of this bill would have placed new requirements on financial institutions and trustees to notify tenants in the event of a foreclosure. The Association opposed that legislation for several reasons including our inability to know whether the property was being utilized as a rental property. Fortunately, this year’s bill was introduced with the notification responsibility placed appropriately on the property owner. As signed, this bill states that if a property owner receives a notice of trustee’s sale or other notice of foreclosure on the property after a tenant has entered into a rental agreement, the owner is required to provide the tenant with a written notice containing specified information within five business days after receipt of the notice of trustee’s sale. This requirement applies only to the first notice of trustee’s sale or the first notice of foreclosure received by the owner after the tenant has entered into the rental agreement.

 

Summary: If a property owner receives a notice of trustee’s sale or other notice of foreclosure on the property after a tenant has entered into a rental agreement, the owner is required to provide the tenant with a written notice containing specified information within five business days after receipt of the notice of trustee’s sale. This requirement applies only to the first notice of trustee’s sale or the first notice of foreclosure received by the owner after the tenant has entered into the rental agreement.

ARS Titles Affected:33

First sponsor: Rep. Smith

Others: Rep. Shope, Rep. Stevens

Signed by Governor, Effective on General Effective Date

 

H2519 ASSIGNMENT OF TAX LIEN

Arizona has in place a very orderly and well-understood system of tax lien sales; it has been in place for decades and has served Arizona well. HB2519 was opposed by the Arizona Bankers Association based on the experiences of banks in Texas with a tax lien transfer system. Although proponents suggest that their product helps homeowners at risk of foreclosure, the experience in Texas has revealed that it speeds up the tax lien foreclosure process and often results in banks holding a loan on the property being pressured to pay off the tax lien in order to protect their interest in the property. The Association was successful in defeating this legislation, but expects that the proponents will have legislation introduced again in 2014.

 

Summary: The county treasurer is required to assign a tax lien against real property to a third party if he/she receives a written authorization from the property owner to assign the lien to the third party and payment in the amount of the taxes, interest and penalties due on the property. The property owner and the third party are permitted to enter into an agreement for payment of all amounts secured by the lien. The assignment and payment agreement must be filed with the county recorder and are prima facie evidence of the valid assignment of the lien. If the property owner defaults on the payment agreement, the assignee of the tax lien may foreclose.

ARS Titles Affected: 42

First sponsor: Rep. Olson

 

H2584 RENEWABLE ENERGY AND CONSERVATION DISTRICTS

The Association has successfully opposed versions of this legislation in each of the last three legislative sessions. The opposition has been based on the fact that the special taxing districts envisioned by this legislation will be offering loans for renewable energy and conservation devices and will receive a superior lien status over a mortgage or deed of trust, which is a dramatic policy change. Furthermore, federal regulators have cautioned against making loans on properties that have a “tax loan” such as is envisioned by this legislation.

 

Summary: Adds a new article to Title 48 (Special Taxing Districts) regulating the establishment of renewable energy and conservation improvement districts. Municipal governing bodies may form a district after a public hearing, as a special purpose district and a tax levying public improvement district. Districts are authorized to levy and collect assessments against real property in the district with voluntary written consent of the property owner.

ARS Titles Affected: 48

First sponsor: Rep. Sherwood

 

PRIVACY

 

H2469 PERSONAL INFORMATION; ENCRYPTED DATA

As introduced, HB2469 would have required that an entity that held personal information would be required to use military encryption standards. The entirety of the business community raised concerns about the bill and it was amended to pertain to only state agencies.

 

Summary: Any state agency that owns or licenses computerized data that includes personal information of an Arizona resident must encrypt the data in accordance with statewide information technology policies and standards if the data is stored in a database. If the data is not stored in a database, best practices should be implemented to protect the data. Does not apply   to

 

a legacy database system that was implemented on or before January 1, 2000. Conditionally enacted on the Department of Administration receiving an appropriation for the implementation of the encryption requirements. Conditionally repealed one year after the effective date of the federal Personal Data Privacy and Security Act.

ARS Titles Affected: 36 44

First sponsor: Rep. Thorpe

 

TAXATION

 

H2111 (Chapter 255)  TRANSACTION PRIVILEGE TAX CHANGES

Governor Brewer made the simplification of Arizona’s sales tax (the transaction privilege tax) a cornerstone of her legislative priorities this year. Brewer convened a task force of diverse interests, including Lynne Herndon of BBVA Compass, to identify legislative changes to “alleviate taxpayer frustration, improve compliance, and avoid redundancies.” Opposition from cities to changes in the prime contracting tax prolonged the debate on the measure, but an agreement was finally reached and the bill was passed.

 

Numerous changes related to transaction privilege taxes (TPT) and affiliated excise taxes. The Department of Revenue is required to provide a coordinated electronic method of collecting state and municipal TPT and affiliated excise taxes. The Department is required, rather than permitted, to collect and administer TPT and use taxes imposed by municipalities and to enter into intergovernmental agreements with municipalities to provide a uniform method of  administration, collection, audit and licensing of TPT and affiliated excise taxes. The contract or agreement must include criteria for the denial of a request from a municipality for an audit of a taxpayer that is engaged in business in more than one municipality. The Department and municipalities that levy TPT and affiliated excise taxes are required, rather than permitted, to enter into agreements to provide for unified or coordinated licensing, collection and auditing programs for such taxes. Required provisions for the intergovernmental agreements are  specified, including that all audits must be conducted in accordance with standard audit procedures defined by the Department, and that all audits must include all taxing jurisdictions regardless of which jurisdiction conducts the audit, with some exceptions. Municipalities are no longer prohibited from employing auditors on a contingent fee basis. For the period beginning January 1, 2015 through December 31, 2015, municipalities are authorized to enter into an agreement with the Department whereby the Department furnishes personnel to perform audit services and the municipality pays the Department an agreed upon amount. By January 1, 2015, the online portal for the administration and collection of TPT and affiliated excise taxes must be modified so that a taxpayer who is required to pay any TPT and affiliated excise taxes to the state or a county or municipality may report and pay the required tax through the online portal. The portal must be administered by the Department, and the costs of the portal must be paid by the municipalities that did not have an intergovernmental contract or agreement in effect as of January 1, 2013 with the Department to provide for unified or coordinated licensing, collection and auditing programs. The expanded portal is required to include a single point for licensing  and filing a single return for TPT for all taxing jurisdictions, consolidate data and capture data with sufficient specificity to meet the needs of all taxing jurisdictions, and allow for  identification of the correct taxing jurisdictions and tax rates based on where the transaction is sourced. Taxpayers can no longer be charged a fee to use the portal. Taxpayers that do not report and pay the required tax to a municipality through the portal    are required to file and pay the tax

 

to the Department, if the Department has developed the tools necessary to capture data with sufficient specificity to meet the needs of all taxing jurisdictions. Confidential information relating to any tax collected by the Department on behalf of any jurisdiction may be disclosed to any county or municipal tax official if the information relates to a taxpayer who is or may be taxable by the county or municipality or who may be subject to audit by the Dept. Requirements for the sourcing of transactions are established. Retail sales of tangible personal property must be sourced to the seller’s business location if the seller receives the order at a business location in Arizona, or to the purchaser’s location in Arizona if the seller receives the order at a business location outside of Arizona. For the purposes of municipal excise taxes, the jurisdiction with the right to tax a sale of tangible personal property is the municipality where the order is received (defined), or where the stock is located from which the property is taken, or where the transfer of title or possession of the property occurred. The gross receipts from leasing or renting tangible personal property must be sourced to the lessor’s business location in Arizona or to the lessee’s address if the lessor does not have a business location in Arizona. The list of exemptions from  the retail TPT classification is modified to remove sales of property, other than motor vehicles,  to nonresidents for use outside the state if the vendor ships or delivers the property out of the state, and sales of property that is shipped or delivered directly to a destination outside the U.S. for use in a foreign country. The deductions for TPT and affiliated excise taxes do not include machinery and equipment or tangible personal property used by a contractor in the performance of a contract. The list of deductions from gross income derived from the business of prime contracting for the purpose of computing the TPT base and the list of income exempt from municipal TPT are expanded to include gross income derived from a contract with the owner of real property for the maintenance, repair or replacement of existing property if the contract does not include “modification” (defined) activities. The Department is required to prescribe a form for a certificate to be used by a contractor that is not subject to the prime contracting classification when purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure or improvement. The contractor must obtain a new certificate for each project and must meet specified conditions to qualify for the certificate. The owner builder sales transaction privilege tax classification is eliminated. The maximum rate for a county’s transportation excise tax on jet fuel is changed to 10 percent of the rate levied by the state, instead of .305 cents per gallon of jet fuel sold. The Joint Legislative Budget Committee is required to prepare a report of the revenue impact analysis resulting from this legislation by September 30, 2016, and to provide copies of the report to the Governor and the Legislature. The analysis must include an estimated impact on revenues for the state and the counties and municipalities.

ARS Titles Affected: 41 42 43

First sponsor: Rep. Lesko

Signed by Governor, Effective January 1, 2015

 

TRUSTS AND ESTATES

 

The Bankers Association closely monitored the following bills, HB2308 and SB1232, related to probate, trusts, and estates. These bills were follow-up legislation to more substantive legislation that was passed in 2012.

 

H2308 (Chapter 26)    PROBATE; OMNIBUS

The court is authorized to require arbitration of disputes during all phases of a probate proceeding, instead of only after the initial appointment of a fiduciary. The court is authorized to require a person seeking guardianship or conservatorship to furnish fingerprints for and pay the cost of a criminal background investigation. Some exceptions. The list of authorized exchanges  of criminal justice information between the central state repository and the superior court is expanded to include providing criminal record information for the purpose of evaluating guardians or conservators. The annual report that a guardian or conservator is required to submit to the court must be submitted according to rules adopted by the Supreme Court, instead of on the anniversary date of qualification as guardian or conservator.

ARS Titles Affected: 14

First sponsor: Rep. Farnsworth

Signed by Governor, Effective on General Effective Date

 

S1232 (Chapter 112)  TRUSTS AND ESTATES

Various changes relating to trusts and estates. Except in the case of a special needs trust, a settlor who is a trustee of a trust that confers on the trustee power to make discretionary distributions to a beneficiary may exercise the power only in accordance with a standard relating to the beneficiary’s health, education, support or maintenance as defined in federal law. The list of property exempt from execution, attachment or sale on any process issued from a court is expanded to include an interest in a 529 college savings plan, either as the owner or beneficiary, except for money contributed within two years before a debtor files for bankruptcy. For nonjudicial settlement agreements, the court may either approve or decline to approve the agreement, but is prohibited from disapproving or denying the effectiveness of the agreement, unless the interested person asks the court to rule without regard to this provision.

ARS Titles Affected: 14 33

First sponsor: Sen. Driggs

Signed by Governor, Effective on General Effective Date

 

Enacted Bill Summaries

 

BONDING

 

H2209 (Chapter 130)  INDUSTRIAL DEVELOPMENT AUTHORITIES

Corporations approved by a the governing body of a municipality or county having a population of more than seven percent, decreased from nine percent, of the total state population (currently Maricopa County, Pima County, Phoenix and Tucson) are exempt from the prohibition on corporations issuing bonds for certain types of housing projects without project approval from  the Department of Housing.

ARS Titles Affected: 35

First sponsor: Rep. Brophy McGee

Signed by Governor, Effective on General Effective Date

 

H2489 (Chapter 228)  BONDS; FINANCING; STUDENT LOANS

A corporation is authorized to issue bonds in order to finance student loans made in a student loan program and to issue refunding bonds to refund bonds previously issued. A corporation is granted a list of powers to act in furtherance of a student loan program. All industrial development authorities are authorized to exercise powers and issue revenue bonds to finance student loans so that the state’s student loan program is available for eligible students at “qualified educational institutions” (defined).

ARS Titles Affected: 35

First sponsor: Rep. Dial

Others: Rep. Boyer, Rep. Carter, Rep. Forese, Rep. Lovas, Sen. Meza, Sen. Yee

Signed by Governor, Effective on General Effective Date

 

BANKRUPTCY

 

H2325 (Chapter 123)  PERSONAL PROPERTY EXEMPTIONS

Increases the maximum value of certain personal property that is exempt from debt collection, including various personal items and money in a single checking account. Any household furniture, goods and appliances with an aggregate market value of up to $6,000, instead of only furniture specifically listed with an aggregate value of up to $4,000, is exempt from debt collection. In order to be exempt, household items may be used by a dependent of the debtor instead of only the debtor. The list of items used in a commercial activity or business that are exempt from debt collection is expanded to include client or customer information and marketing tools such as websites, domain names and other intangible work products. The maximum amount of commercial property exempt from debt collection is increased to $5,000, from $2,500.

ARS Titles Affected: 33

First sponsor: Rep. Farnsworth

Signed by Governor, Effective on General Effective Date

 

CREDIT CARDS

 

H2071 (Chapter 11)    ADE; OPERATIONS

The Department of Education is authorized to impose a per transaction convenience fee for teacher certification or examination fees collected by credit or debit card or other electronic payment.

ARS Titles Affected: 15

First sponsor: Rep. Coleman

Others: Rep. Borrelli, Rep. Mesnard, Rep. Mitchell

Signed by Governor, Effective on General Effective Date

 

H2205 (Chapter 207)  TANF; ELECTRONIC BENEFIT TRANSFER PROHIBITIONS

It is unlawful for a liquor store, commercial horse racing or dog racing licensee, or “adult oriented entertainment establishment” (defined) to operate on the licensed or permitted premises an automatic teller machine (ATM) or a point-of-sale terminal that accepts Temporary  Assistance for Needy Families (TANF) electronic benefit transfer (EBT) cards or processes EBT card transactions. Violations are subject to licensing action. These licensees are required to disable the ability of ATM and point-of-sale terminals on the premises to accept or process an EBT transaction by February 1, 2014. A head of household who receives TANF cash assistance is prohibited from conducting an EBT transaction at a liquor store, commercial horse or dog racing facility, gaming establishment or facility, or adult oriented entertainment establishment. Municipalities that license or regulate adult oriented entertainment establishments are required to ensure that those establishments in the municipality’s jurisdiction disable the ability of ATM and point-of-sale terminals on the premises to accept or process EBT transactions, and must enforce the continued prohibition on the use of EBT cards at those establishments.

ARS Titles Affected: 46

First sponsor: Rep. Brophy McGee

Signed by Governor, Effective on General Effective Date

 

H2231 (Chapter 133) STATE FEES; PAYMENT; ALTERNATIVE METHODS

A surety is required to be relieved from liability on the appearance bond on which the defendant is released if the surety surrenders the defendant to the county sheriff on or before the day and time the defendant must appear in court, the defendant is in the county sheriff’s custody on or before the day and time the defendant must appear in court and the surety provides an affidavit  of surrender of the appearance bond to the sheriff, or the defendant is released or transferred to the custody of another government agency and the surety establishes that the surety did not know of the release or transfer and the defendant’s failure to appear was a direct result of the release or transfer. If a surety is relieved of liability due to a release or transfer, the surety is required to return the premium and all collateral to the guarantors of the bond.

ARS Titles Affected: 13

First sponsor: Rep. Stevens

Others: Rep. Smith, Rep. Thorpe

Signed by Governor, Effective on General Effective Date

 

ELDER FINANCIAL ABUSE

 

S1175 (Chapter 67)    VULNERABLE ADULT; DUTY

A civil action brought by a person in a position of trust and confidence against a vulnerable adult regarding a governing instrument established by the vulnerable adult is presumed not to be “for the benefit of the vulnerable adult” (defined) unless it is shown otherwise by clear and convincing evidence. Modifies the definitions of “governing instrument” and “position of trust and confidence.” Applies to any governing instrument of a vulnerable adult regardless of  whether it was executed before the effective date of this legislation.

ARS Titles Affected: 46

First sponsor: Sen. Yarbrough

Signed by Governor, Effective on General Effective Date

 

S1341 (Chapter 185)  VULNERABLE ADULTS; FINANCIAL EXPLOITATION

Transfers of assets to obtain or maintain eligibility for AHCCCS, supplemental security income, Medicare or veteran’s administration programs and that are between a vulnerable adult and their spouse, disabled child or a trust for the spouse or disabled child are not considered financial exploitation. A legislative intent section states that this act is intended to clarify existing law.

ARS Titles Affected: 46

First sponsor: Sen. Driggs

Others: Sen. Biggs, Rep. Brophy McGee, Rep. Forese, Rep. Goodale, Sen. Griffin, Sen. McComish, Rep. Olson, Sen. Tovar, Sen. Worsley

Signed by Governor, Effective on General Effective Date

 

HUMAN RESOURCES

 

H2173 (Chapter 204)  UNEMPLOYMENT INSURANCE; OMNIBUS

Various changes relating to unemployment insurance. The Department of Economic Security is authorized to issue unemployment insurance (UI) tax anticipation notes during FY2013-14 in an amount not to exceed the lesser of $200 million or the amount sufficient to repay the outstanding balance borrowed from the federal government to pay UI benefits, provide for payment of UI benefits during FY2013-14 until UI tax receipts are sufficient, and pay note related expenses.  The Director of the Department is required to prescribe the form of the notes, interest rates and denominations of the notes, dates of maturity within 12 months, and the terms of redemption of the notes. Notes may be sold at public or private sale. The Department is required to establish a Note Debt Service Fund to be used to pay amounts payable on notes and note related expenses, and monies in the Fund may be invested and reinvested in any investments authorized for public investments. To secure the principal and interest on notes, the Department is authorized to perform various actions, including segregating the Fund into one or more accounts, establishing priorities among noteholders, prescribing the procedure by which the terms of a contract with noteholders may be amended or abrogated, and taking any other action that may affect the security and protection of the notes or interest on the notes. Notes and income from notes are at all times free from taxation in Arizona. Also establishes the Unemployment Special Assessment Proceeds Fund to pay interest charges incurred on a loan to pay UI benefits and then to retire the loan principal. Any monies remaining in the Unemployment Special Assessment Fund established in 2011 are transferred to the Unemployment Special Assessment Proceeds Fund.  The authorization for the notes and related regulations self-repeal January 1, 2016. The Industrial

 

Commission is prohibited from relieving an employer’s account of charges related to an erroneous UI benefit payment if the payment was made because the employer failed to timely or adequately respond to a request for information relating to a claim for unemployment compensation and the employer has established a pattern of failing to timely or adequately respond to requests. If a person received UI benefits to which he/she is not entitled by reason of fraud committed by the person, the Department is required to assess a penalty on the person equal to 15 percent of the amount of the erroneous payment. For UI taxes, a domestic or foreign limited liability company shall be taxed as if it is either a partnership or a corporation or is disregarded as an entity as determined pursuant to the Internal Revenue Code. The requirements for a shared work unemployment compensation plan to be approved by the Department are expanded to include a certification from the employer that health and retirement benefits under a defined benefit plan will continue to be provided to an employee participating in the shared work plan under the same terms and conditions as though the work week had not been reduced, an estimate of the number of layoffs that would have occurred without an approved plan, and a description of the employer’s plan for notifying an employee whose work week is to be reduced. Individuals participating in a shared work plan are permitted to participate in Department- approved training to enhance job skills. Emergency clause.

ARS Titles Affected: 23 29

First sponsor: Rep. Fann

Signed by Governor, Effective date of June 19th 2013

 

INSURANCE

 

H2358 (Chapter 160) INSURANCE; LICENSEES; CONTINUING EDUCATION REQUIREMENTS

Modifies continuing education requirements for insurance licensees. Beginning January 1, 2014, the number of credit hours required to renew a resident license is increased to 48, from 40, and the hours must include at least 6 credit hours of ethics training. Continuing education requirements apply to nonresident licensees whose home states do not have continuing education requirements. Continuing education requirements do not apply to licensees who have been “continually licensed” (defined) in Arizona since January 1, 1995 and who meet other specified requirements.

ARS Titles Affected: 20

First sponsor: Rep. Livingston

Others: Rep. Allen, Rep. Barton, Rep. Fann, Rep. Gray, Rep. Lovas, Rep. Miranda, Rep. Pratt, Rep. Shope, Rep. Thorpe, Rep. Townsend

Signed by Governor, Effective on General Effective Date

 

S1148 (Chapter 34)    WORKERS’ COMP; RECIPROCITY

A worker from another state and that worker’s employer in that other state are exempt from workers’ compensation regulations while that worker is temporarily in Arizona if the employer has workers’ compensation insurance coverage in another state that covers the employee and other specified conditions are met. If a worker has a claim under the workers’ compensation law of another state or nation for the same injury or occupational disease as a claim filed in Arizona, the amount of compensation paid under the other law is credited against the compensation due under Arizona law. Claims made after the effective date of this legislation are subject to these provisions regardless of the date of injury.

 

ARS Titles Affected: 23

First sponsor: Sen. McComish

Others: Rep. Forese, Rep. Livingston, Rep. Lovas, Sen. Melvin, Sen. Reagan, Rep. Robson, Sen. Worsley

Signed by Governor, Effective on General Effective Date

 

LENDING

 

H2180 (Chapter 206)  VEHICLE LIENS; CERTIFICATES OF TITLE

If vehicle liens, encumbrances or title retention documents are delivered to a registering officer  or authorized third party provider within 30 calendar days, instead of 30 business days, after the date of execution, the constructive notice dates from the time of execution. The time stamp on vehicle liens, encumbrances or title retention documents administered by the registering officer  or authorized third party provider, electronically or otherwise, is conclusive as to the time and date of delivery of the documents.

ARS Titles Affected: 28

First sponsor: Rep. Fann

Signed by Governor, Effective on General Effective Date

 

S1047 (Chapter 30)    MORTGAGE INSURANCE; REPEAL COVERAGE LIMITATION

Repeals the requirement for mortgage guaranty insurance companies to limit the coverage net of reinsurance to a maximum of 25 percent of the entire indebtedness to the insured.

ARS Titles Affected: 20 First sponsor: Sen. Reagan Others: Sen. McComish

Signed by Governor, Effective on General Effective Date

 

TAXATION

 

H2324 (Chapter 27)    TPT        EXEMPTION;       LEASES;      AFFILIATED      COMPANIES (MUNICIPAL TAX CODE; LEASES)

The commercial lease classification for transaction privilege tax does not include leasing real property between “affiliated companies, businesses or persons,” defined as the lessor owning at least 80 percent interest in the lessee, the lessee owning at least 80 percent interest in the lessor, or an affiliated entity or unrelated person owning at least 80 percent interest in both, or leasing real property by a “reciprocal insurer” (defined elsewhere in statute). 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.

ARS Titles Affected: 42

First sponsor: Rep. Farnsworth

Signed by Governor, Effective on General Effective Date

 

H2336 (Chapter 233)  TAXATION; RETAIL CLASSIFICATION; CASH EQUIVALENTS

The list of items exempt from retail transaction privilege taxes is expanded to include the sale of “cash equivalents,” defined as items or intangibles through which a value denominated in money is purchased in advance, including gift cards, vouchers, traveler’s checks, and money orders or

 

other instruments. The gross proceeds of sales or gross income derived from the redemption of any cash equivalent as a means of payment for taxable goods or services is subject to transaction privilege tax. Session law declares the intent of the Legislature to clarify and reaffirm an existing exemption from TPT for cash equivalents. Retroactive to tax period beginning January 1, 1999. Any claim for a refund of TPT based on the retroactive application must be submitted to the Department of Revenue by December 31, 2013. The aggregate amount of refunds cannot  exceed

$10,000, including interest. ARS Titles Affected: 42

First sponsor: Rep. Forese

Signed by Governor, Effective on General Effective Date

 

H2344 (Chapter 9)      PROPERTY TAX PENALTY WAIVER

A county treasurer, in consultation with the board of supervisors, is authorized to waive a penalty required for failure to respond to a request for information about classification of residential property for good cause. Retroactive to July 1, 2012. Self-repeals July 1, 2014…

ARS Titles Affected: 41

First sponsor: Rep. Lesko

Signed by Governor, Effective on General Effective Date

 

TRUSTS AND ESTATES

 

H2143 (Chapter 87)    JOINT TENANCY SEVERANCE

In the case of real property owned as joint tenants with right of survivorship, the right of survivorship is extinguished in cases of divorce or annulment or on recording with the county recorder an affidavit executed by any joint tenant under oath that states the intent to terminate the survivorship right, a description of the instrument by which the right of survivorship was created, and the legal description of the affected property. For a deceased joint tenant, the termination by death of that tenant’s joint tenancy with right of survivorship may be evidenced by a surviving joint tenant recording an affidavit reciting the name, date of death and cause of death of the deceased tenant, a description of the instrument by which the right of survivorship was created, the legal description of the affected property, and an attached death certificate.

ARS Titles Affected: 33

First sponsor: Rep. Brophy McGee

Signed by Governor, Effective on General Effective Date

 

S1237 (Chapter 36)    GUARDIANSHIPS; CONSERVATORSHIPS; TRANSFER

Modifies the requirements for Arizona courts to order the transfer of guardianship or conservatorship to another state.

ARS Titles Affected: 14

First sponsor: Sen. Driggs

Signed by Governor, Effective on General Effective Date

 

UNIFORM COMMERCIAL CODE

 

H2277 (Chapter 121)  UNIFORM COMMERCIAL CODE; FUNDS TRANSFERS

The uniform commercial code applies to a funds transfer that is a remittance transfer as defined in federal law, unless the remittance transfer is an electronic fund transfer.

ARS Titles Affected: 47

First sponsor: Rep. Forese

Signed by Governor, Effective on General Effective Date

 

MISCELLANEOUS

 

H2154 (Chapter 118) SUPPLEMENTAL APPROP; MORTGAGE SETTLEMENT MONIES (CONDOS; PLANNED COMMUNITIES; ADMIN HEARINGS)

In addition to any other monies appropriated to the Department of Law in FY2012-13 and excluding the $50 million to be deposited in the general fund as part of the FY2012-13 budget, the remainder of the funds received from the consent judgments in the National Mortgage Settlement is appropriated to the Department in FY2012-13 for distribution according to applicable court orders.

ARS Titles Affected: 41

First sponsor: Rep. Kavanagh

Signed by Governor, Effective on General Effective Date

 

H2260 (Chapter 136)  CERTIFIED PUBLIC ACCOUNTANTS

Numerous changes related to the regulation of certified public accountants (CPAs). An  individual must be lawfully present in the U.S. to qualify for certification as a CPA. Other requirements for CPA certification are modified, including requirements for applicants with a certificate or license to practice as a CPA in another jurisdiction. The rulemaking authority of the Board of Accountancy is expanded to include any rules to administer statute, instead of only examination requirements. The Board is authorized to contract with a public or private entity to administer the CPA certification examination. The Board is authorized to establish and collect various registration and application fees. Establishes regulations for inactive, canceled and expired status CPA certificates and the reinstatement of these certificates. Requires the Board to suspend a certificate for failure to timely register and failure to show proof of compliance with continuing professional education requirements. Establishes qualifications for issuance of a new CPA certificate to a person whose certificate has been revoked, and allows a person to apply for  a new certificate five years after the effective date of the revocation. Repeals statutes governing reciprocity and substantial equivalency. Modifies definitions. Session law states that a CPA certificate that was suspended for nonregistration before July 21, 1997 and that remains suspended on the effective date of this legislation is expired, and a firm registration to practice public accounting that was suspended for nonregistration before September 26, 2008 and that remains suspended on the effective date of this legislation is expired.

ARS Titles Affected: 32

First sponsor: Rep. Forese

Others: Rep. Boyer, Rep. Campbell, Rep. Carter, Rep. Dial, Rep. Fann, Sen. Gallardo, Rep. Gray, Rep. Kavanagh, Sen. McComish, Sen. Meza, Sen. Reagan, Rep. Tobin

Signed by Governor, Effective on General Effective Date

 

H2310 (Chapter 140) COURTS;       EVALUATION;       MENTAL        HEALTH;       REPORT (ESCHEATED PROPERTY; PROCEEDS; CLAIM)

The Administrative Office of the Courts (AOC) is required to evaluate the mental health courts currently operating in Arizona and to develop standards for the design, training in, and procedures to establish and implement efficient, effective and accountable mental health courts. The AOC is required to report its findings and recommendations to the Governor and the Legislature by December 31, 2014. The AOC is authorized to contract with or employ consultants and specialists to conduct the evaluation and develop the standards. Conditionally enacted on the AOC receiving an appropriation for implementation of the evaluation.

ARS Titles Affected: 12

First sponsor: Rep. Farnsworth

Signed by Governor, Effective on General Effective Date

H2312 (Chapter 95)    SOLICITATION; TEXT MESSAGE; PROHIBITION

It is a class 2 misdemeanor to use an automated system to send a text message for the purpose of soliciting persons to purchase goods or services. This prohibition and the prohibition on the use of an automated system to dial telephone numbers and play a recorded message do not apply if the recorded message or text message is received with prior express invitation or permission by the recipient, or by a recipient who has an existing business relationship with the sender.

ARS Titles Affected: 13

First sponsor: Rep. Farnsworth

Signed by Governor, Effective on General Effective Date

 

H2458 (Chapter 175) EMPOWERMENT SCHOLARSHIP ACCOUNTS; FRAUD PREVENTION

The Department of Education is required, instead of permitted, to conduct or contract  for random, quarterly and annual audits of empowerment scholarship accounts (ESA). Authorization for the Department to remove a parent or qualified student from eligibility for an ESA is limited to when the parent or student fails to comply with the terms of the contract or applicable laws or rules, and when the parent or student knowingly misuses funds or knowingly fails to comply  with the terms of the contract with intent to defraud. The Department is required to notify the parent or student in writing that the ESA account has been suspended and allow the person 10 days, not including weekends, to respond and take corrective action before the removal is final. The Department is authorized to adopt policies for conducting or contracting for examinations of the use of ESA account monies; conducting or contracting for random, quarterly and annual reviews of accounts; and the establishment of online and telephone anonymous fraud reporting services. ESA monies may be contributed to a Coverdell Education Savings Account, instead of  a 529 Plan, and Account monies used for elementary or secondary education expenses must be for expenses otherwise allowed for ESA monies.

ARS Titles Affected: 15

First sponsor: Rep. Boyer

Others: Rep. Allen, Rep. Mesnard, Rep. Olson, Rep. Robson, Rep. Townsend, Sen. Yarbrough

Signed by Governor, Effective on General Effective Date

 

S1075 (Chapter 76)     VEHICLE IMPOUNDMENT; IMMOBILIZATION (TECH CORRECTION; FOREIGN PERSONAL REP)

For the purpose of determining who an immobilizing or impounding agency must release a vehicle to prior to the end of the 30 day period and who must be provided with an opportunity for an immobilization or post storage hearing, a person identified on the Department of Transportation’s record as having an interest in the vehicle must be on record as having that interest “immediately before” the immobilization or impoundment. Also, storage charges are set at $15 per day, instead of up to $15, and administrative charges are set at $150, instead of up to

$150.

ARS Titles Affected: 28

First sponsor: Sen. Shooter

Signed by Governor, Effective on General Effective Date

 

S1094 (Chapter 77)    NOTARIES PUBLIC; IMPERSONATION; VIOLATION

A person who knowingly impersonates a notary public is guilty of impersonating a public servant, a class 1 (highest) misdemeanor. The criminal classification for a vendor who provides an official notary seal to a person without a photocopy of the person’s notarial commission is increased to a class 6 (lowest) felony, from a class 3 (mid-level) misdemeanor.

ARS Titles Affected: 41

First sponsor: Sen. Reagan

Signed by Governor, Effective on General Effective Date

 

S1162  SALES TAX; REDUCED REPORTING REQUIREMENTS

Taxpayers with annual transaction privilege tax liability between $2,000 and $8,000 are required to pay TPT on a quarterly basis (instead of a monthly basis), and taxpayers with annual TPT liability of less than $2,000 are required to pay on an annual basis. (Formerly, taxpayers with less than $500 annual TPT liability were permitted to pay annually, and taxpayers with between $500 and $1,250 annual TPT liability were permitted to pay quarterly).

ARS Titles Affected: 42

First sponsor: Sen. Farley

Others: Sen. Barto, Rep. Boyer, Sen. Crandall, Sen. Driggs, Rep. Forese, Rep. Gray, Rep. Kavanagh, Sen. Melvin, Rep. Orr, Rep. J. Pierce, Sen. Reagan, Sen. Shooter, Sen. Yarbrough

 

S1171  ASRS; SPOUSAL CONSENT

The requirement for a member of the Arizona State Retirement System to name and maintain the member’s current spouse as a beneficiary does not apply if doing so violates another law, an existing contract or a court order. Retroactive to July 1, 2013.

ARS Titles Affected: 38

First sponsor: Sen. Yarbrough Others: Sen. Worsley

 

S1233 (Chapter 198)  LIMITED LIABILITY COMPANIES; OWNERSHIP INTERESTS

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. All co-owners of an interest in an LLC held as joint tenants or as community property must own an equal   undivided

 

interest in the interest, and have only the rights of an assignee with respect to the interest. After the death of a co-owner of the interest, the surviving co-owner succeeds to the ownership with the rights of an assignee unless and until the surviving co-owner is admitted as a member. Specifies circumstances under which the right of survivorship is extinguished.

ARS Titles Affected: 29

First sponsor: Sen. Driggs

Signed by Governor, Effective on General Effective Date

 

S1311 (Chapter 48)    PUBLIC MONIES; INVESTMENT

The list of items that the State Treasurer may invest trust and treasury monies in is expanded to include institutional common trust funds whose underlying investments are invested in securities allowed by state law. For the purpose of statute allowing the State Treasurer to invest monies in equity securities and regulating those investments, equity securities do not include exchange traded products whose underlying investments are fixed income securities that are allowed by state law.

ARS Titles Affected: 35

First sponsor: Sen. Yarbrough Others: Sen. Worsley

Signed by Governor, Effective on General Effective Date

 

S1314 (Chapter 79)    CIVIL JUDGMENTS; STATE; RENEWAL

Civil judgments obtained by the state are added to the list of items excluded from  statute allowing a party in whose favor a judgment is given to have a writ of execution or other process issued for its enforcement.

ARS Titles Affected: 12

First sponsor: Sen. Yarbrough

Signed by Governor, Effective on General Effective Date

 

S1363 (Chapter 250)  EMPOWERMENT SCHOLARSHIP ACCTS; EXPANSION; FUNDING

For the purpose of empowerment scholarship accounts, the definition of “qualified student” is expanded to include students who are otherwise qualified but have not previously attended a governmental primary or secondary school and who are currently eligible to enroll in a kindergarten program. The amount transferred to an empowerment scholarship account is increased to 90 percent of the sum of the base support level and additional assistance if that student were attending a charter school. During 2014 through 2019, the number of new empowerment scholarship accounts approved by the Department of Education each year cannot exceed 0.5 percent of the total number of students enrolled in school districts and charter schools in Arizona during the previous school year. This limitation self-repeals January 1, 2020. AS

ARS Titles Affected: 15 First sponsor: Sen. Murphy

Others: Rep. Allen, Sen. Barto, Rep. Barton, Sen. Biggs, Rep. Boyer, Rep. Brophy McGee, Sen. Burges, Rep. Carter, Sen. Crandell, Rep. Fann, Rep. Gray, Rep. Kavanagh, Rep. Kwasman, Rep. Lesko, Sen. Melvin, Rep. Mesnard, Rep. Montenegro, Rep. J. Pierce, Rep. Seel, Sen.

Shooter, Rep. Smith, Rep. Stevens, Rep. Thorpe, Sen. Ward, Sen. Yarbrough, Sen. Yee

Signed by Governor, Effective on General Effective Date

 

S1449 (Chapter 252)  SCHOOLS;           GRADUATION;           PERSONAL           FINANCE; ENTREPRENEURSHIP

The list of academic areas which the State Board of Education is required to prescribe competency requirements for students to graduate from high school is expanded to include personal finance. Does not allow the Board to establish a required separate personal finance course for the purpose of high school graduation. School boards or charter schools are permitted to prescribe a separate personal finance course for high school graduation or to incorporate personal finance instruction into an existing course, that is in addition to or higher than the course of study and competency requirements prescribed by the Board.

ARS Titles Affected: 15 First sponsor: Sen. Yee

Signed by Governor, Effective on General Effective Date

 

Unenacted Bill Summaries

 

H2027 HOME INSPECTORS

Any financial assurance mechanism with a value of at least $25,000 approved by the Board of Technical Registration is removed from the list of financial assurances, one of which a home inspector is required to file within 60 days after certification. Home inspectors must file the financial assurance prior to performing any home inspection for compensation.

ARS Titles Affected: 32

First sponsor: Rep. Seel

 

H2159 GOVERNMENT PROCUREMENT; AMERICAN PRODUCTS

In the procurement of goods or services, state agencies, counties and municipalities are required to purchase items manufactured or derived from the United States. Some exceptions.

ARS Titles Affected: 41

First sponsor: Rep. Campbell

Others: Rep. Cardenas, Rep. Dalessandro, Rep. Gabaldon, Rep. Gallego, Rep. Larkin, Rep. McCune-Davis, Rep. Meyer, Rep. Quezada, Rep. Wheeler

 

H2162 VULNERABLE ADULT; ABUSE; DAMAGES

The maximum amount of additional damages the court may award in a civil action brought by or on behalf of a vulnerable adult is increased to three times the amount of actual damages, from two times.

ARS Titles Affected: 46

First sponsor: Rep. Campbell

Others: Rep. Cardenas, Rep. McCune-Davis, Rep. Wheeler

 

H2166 LIMITED LIABILITY COMPANIES; SERIES

The articles of organization or operating agreement of a limited liability company may create one or more “series of members” (defined). A series may have different voting rights, separate powers or duties, and a separate business purpose or investment objective. The debts and expenses of one series are enforceable against the assets of that series only and not against the assets of the LLC if specified conditions are met, and the debts and expenses of the LLC generally are not enforceable against the assets of the series.

ARS Titles Affected: 29

First sponsor: Rep. Dial

Others: Rep. Forese, Sen. McComish, Rep. Robson

 

H2193 FORECLOSED PROPERTIES; HOAS; MAINTENANCE

Homeowners’ associations are allowed to remove trash or repair hazardous structures on foreclosed properties. The association is allowed to place a lien on the property for the costs, and the property owner is liable.

ARS Titles Affected: 33

First sponsor: Rep. Miranda

Others: Rep. Cardenas, Rep. Contreras, Rep. Dalessandro, Rep. Escamilla, Rep. Gabaldon, Rep. Gonzales, Rep. Hernandez, Rep. Mendez, Rep. Otondo, Rep. Steele

 

H2206 ADVANCE FEE LOAN BROKERS

Registered advance fee loan brokers are required to apply for renewal as prescribed by the Superintendent of Financial Institutions no later than June 30 of each year. If the renewal application is not received by June 30, the broker must pay an amount per day to be determined by rule and the broker’s registration is suspended. The registration of a broker that has not filed a renewal application and paid the fee by July 31 expires.

ARS Titles Affected: 6

First sponsor: Rep. Brophy McGee

 

H2207 COLLECTION AGENCIES; LICENSE RENEWAL

Collection agency licenses that are not renewed by January 1 are suspended. A licensee may renew a suspended license before January 31 by submitting the application and fees and any late fees that may be determined by the Superintendent of Financial Institutions by rule. Licenses not renewed by January 31 expire.

ARS Titles Affected: 32

First sponsor: Rep. Brophy McGee

 

H2208 LOAN ORIGINATOR EXAMINATION COMMITTEE; REPEAL

The Loan Originator Examination Committee is repealed. ARS Titles Affected: 6

First sponsor: Rep. Brophy McGee

 

H2211 LOAN ORIGINATORS

The requirements for a loan originator’s license are modified to require 20 hours of continuing education during the preceding three years instead of two years, and to require the applicant to retake the loan originator’s examination only if the person failed to maintain a valid license for a period of five years or longer.

ARS Titles Affected: 6

First sponsor: Rep. Brophy McGee

 

H2264 TAX INCENTIVES; MANUFACTURERS; SELF EMPLOYMENT (TECH CORRECTION; MOBILE HOME PARKS)

Beginning July 1, 2014 through June 30, 2019, an “export oriented manufacturer” (defined) may be certified by the Arizona Commerce Authority to have personal property and improvements newly constructed or that undergo a major renovation between January 1, 2014 through June 30, 2019 qualify for classification as class 6 property. The business must be a manufacturing operation, corporate or regional headquarters, administrative office or research and development operation of the manufacturer, must invest specified amounts and create a minimum number of “qualified employment positions” (defined), and must pay at least 51 percent of new employees at least a specified wage depending on the county. To be annually recertified, a business must continue to meet all eligibility requirements and must annually report specified information to  the Authority. To receive classification as class 6 property, by December 10 of each year the certified business must submit specified information to the county assessor. The Authority and the Department of Revenue are required to report information on certified businesses and the fiscal impact of property tax incentives to the Governor and the Legislature by September 30 of each  year.  Additionally,  the  list  of  subtractions  from  Arizona  gross  income  for  income tax

 

purposes is expanded to include the following percentage of compensation and net income from self-employment, up to $113,700: 0.5 percent for tax year 2013, 1 percent for tax year 2014, 1.5 percent for tax year 2015, and 2 percent beginning tax year 2016.

ARS Titles Affected: 41 42

First sponsor: Rep. Forese

 

H2302 WORKERS’ COMPENSATION PREMIUMS; PAYMENT

An employer may choose to pay workers’ compensation insurance premiums on a semiannual, quarterly or monthly basis if the insurer makes the payment plan available. Any “deposit premium” (defined) required by a workers’ compensation insurer is payable at the inception of the policy term, and cannot be less than the minimum premium stated in the policy.

ARS Titles Affected: 20

First sponsor: Rep. Fann

 

H2315 LOCAL GOVERNMENTS; REGULATION; REQUIREMENTS

Municipalities and counties are prohibited from regulating an occupation or profession without specific legislative authorization. The municipality or county must conduct a study that results in specified findings, including that the regulation is a true public necessity. The study must be reviewed by the Auditor General. The municipality or county must report on intended  regulations to the Joint Legislative Audit Committee, and JLAC must assign the report to the appropriate legislative committee of reference to consider legislation authorizing the  municipality or county to regulate the specific occupation or profession.

ARS Titles Affected: 9 11

First sponsor: Rep. Farnsworth

 

H2320 RULES; STATUTORY REVIEW; STATE AGENCIES

At least once every five years, each state agency is required to review all of its rules and  statutory authority that regulates any occupation, professions, activity, use of property, or condition and determine whether any of the rules or statutes are obsolete, counterproductive or redundant. Criteria that must be used in the determination is specified. Each agency must report its findings to the Governor and the Legislature.

ARS Titles Affected: 41

First sponsor: Rep. Farnsworth

 

H2321 REGULATION; CRITERIA; REAUTHORIZATION

Any new regulatory requirement established by the Legislature is required to include in its enabling legislation a specific expiration date that is not more than five years after the effective date. Municipalities, counties and state agencies may regulate an occupation, profession, use of property or condition only under specified conditions, including that the primary purpose or predominant effect of the regulation will not restrain competent adults and that the targeted activity or condition is an actual threat to public health, safety or general welfare that  is verifiable and substantial.

ARS Titles Affected: 9 41

First sponsor: Rep. Farnsworth

 

H2359 STUDENT PROTECTION; CREDIT CARD SOLICITATION

State universities and community colleges are prohibited from allowing credit card marketers to offer gifts or other promotional incentives to persons on campus in order to solicit those persons to apply for a credit card or other consumer credit. Does not apply to solicitation by a bank or credit union located on campus if the solicitation is made at the offices of the bank or credit union.

ARS Titles Affected: 15

First sponsor: Rep. Mendez

Others: Rep. Alston, Rep. Gallego, Rep. Gonzales, Rep. McCune-Davis

 

H2362 AFFORDABLE HOUSING PROJECTS; TAX ASSESSMENT

A parcel of “affordable housing” (defined) property must be valued not at market value but at a value that reflects legal restrictions on its use, transferability and below-market sales price and limited profit margin under the applicable municipal affordable housing program. The Department of Revenue is required to prescribe uniform rules, procedures and formulas for determining and fixing valuation for affordable housing.

ARS Titles Affected: 42

First sponsor: Rep. Mendez

Others: Rep. Alston, Rep. Gallego

 

H2365 MICROENTERPRISE DEVELOPMENT PROGRAM

Establishes a microenterprise development program in the Department of Financial Institutions  to provide organizational support to a “statewide microenterprise association” (defined) and contract with the association to deliver services and distribute grants. The program terminates July 1, 2023.

ARS Titles Affected: 6

First sponsor: Rep. Mendez

Others: Rep. Alston, Rep. Gallego, Rep. Gonzales, Rep. McCune-Davis

 

H2387 RECOVERY OF ATTORNEY FEES

3In a contested action arising out of a contract, if a written settlement offer is rejected and the verdict plus reasonable attorney fees incurred up to the date of the offer is equal to or more favorable to the offeror offer made in writing, the offeror is deemed to be the successful party  and the court may award reasonable attorney fees. Formerly, the attorney fees incurred up to the date of the offer were not included in the determination.

ARS Titles Affected: 12

First sponsor: Rep. J. Pierce

 

H2428 INVESTMENT ADVISORS; REPRESENTATIVES; REPORTING REQUIREMENTS

Licensed investment advisers are no longer required to file with the Corporation Commission an audited balance sheet when the adviser has custody of client monies or securities in excess of

$500 for each client. Emergency clause. ARS Titles Affected: 44

First sponsor: Rep. Brophy McGee

 

H2454 INTERNET PROVIDERS; PERSONAL INFO

Adds a new article to chapter 44 (Trade and Commerce) prohibiting internet service providers from knowingly disclosing a consumer’s personally identifiable information, except in specified circumstances. Internet service providers are required to take reasonable steps to maintain the security and privacy of a consumer’s personally identifiable information. A consumer who prevails or substantially prevails in an action to enforce these regulations is entitled to the greater of $500 or actual damages.

ARS Titles Affected: 44

First sponsor: Rep. Mach

Others: Rep. Borrelli, Rep. Cardenas, Rep. Carter, Rep. Orr, Rep. Otondo, Rep. Quezada

 

H2479 PERSONAL PROPERTY DEPRECIATION

Beginning with tax year 2014, depreciation of taxable personal property prescribed by the Department of Revenue must be based on the personal property having a three-year useful life.

ARS Titles Affected: 42

First sponsor: Rep. Orr

Others: Rep. Borrelli, Rep. Gray, Rep. Kwasman, Rep. Olson, Rep. Shope

 

H2483 PUBLIC NOTICES; PUBLISHING; PUBLIC MEDIUM

For the purpose of public records and notices, the term “newspaper” is replaced with “public medium” (the definition is identical). When public notice is required for any meetings or actions of various state and local government entities and agencies, or for various regulated actions of private entities, the notice is no longer required to be published in a newspaper meeting specified requirements such as daily or weekly publishing or publishing in a certain jurisdiction,  but instead must be published on a public medium.

ARS Titles

Affected: 3 4 5 6 9 10 11 12 13 14 15 16 17 20 23 26 27 28 29 31 32 33 34 35 36 37 39 40 41 42

44 45 47 48 49

First sponsor: Rep. Stevens

 

H2487 HOUSING DEV AREA; DECLARATION; REPEAL

Municipal governing bodies are no longer required to adopt a resolution finding that a shortage of housing exists in a certain area, declaring that area to be a housing development area, and declaring that assisting in the development of housing in that area is in the interests of public health, safety and welfare before the municipality may exercise statutory powers for housing development areas.

ARS Titles Affected: 9

First sponsor: Rep. Coleman

Others: Rep. Borrelli, Rep. Mitchell, Rep. Petersen, Rep. Shope, Rep. Townsend

 

H2491 SECURITIES ENFORCEMENT; UCC; SECURED TRANSACTIONS (ACC; SECURITIES ENFORCEMENT; SPOUSAL JOINDER)

The Corporation Commission is prohibited from joining any individual who is divorced from the defendant at the time a securities fraud action is filed. If a joinder is inapplicable because the defendant and the defendant’s spouse are divorced, the Commission is authorized to apply to the Maricopa County Superior Court or any federal court for an order restoring to any person in interest that former spouse’s portion of any monies or property that may have been acquired or transferred by the defendant in violation of securities regulations. Such an order must be supported by clear and convincing evidence. Makes numerous changes to statutes governing secured transactions, including modifying definitions, establishing various rules governing collateral, and allowing a person to file an information statement with respect to a wrongfully filed record. Makes this legislation effective on September 1, 2013, and applies it to a transaction or lien within the scope of the chapter even if the transaction or lien was entered into or created prior to that date. Does not affect an action, case or proceeding commenced prior to September 1, 2013. Specifies other details for transition. Updates the uniform commercial code financing statements that a filing office cannot refuse to accept if they are in the specified form and format. ARS Titles Affected: 44

First sponsor: Rep. Farnsworth Others: Sen. Biggs, Rep. Petersen

 

H2512 TRUSTS; BENEFICIARY SUITS AGAINST SETTLOR

A beneficiary is prohibited from claiming damages from a gift of property that is made through a “governing instrument” (defined) by a grantor who is a member of the beneficiary’s family. Property obtained in this manner is presumed to be a gift, and this presumption may be rebutted by clear and convincing evidence. A beneficiary’s claim arising from such an instrument is limited to the value of property the beneficiary contributed to the instrument. Unless it is found by clear and convincing evidence to be contrary to the grantor’s intent, a beneficiary in violation of these regulations is deemed to have predeceased the grantor for the purposes of all governing instruments between them, and is required to pay all damages caused by the civil action. Applies to a civil action brought against the grantor’s trustee or agent acting in good faith to carry out the grantor’s instructions. Applies to any governing instrument regardless of whether it was executed before or after the effective date of this legislation. AS VETOED BY GOVERNOR. Her veto message stated that much of the bill’s language is overly broad and harshly punitive, which will have unintended consequences. She encourages the sponsor to work with stakeholders to craft legislation that is more narrowly tailored to the purported problem.

ARS Titles Affected: 14

First sponsor: Rep. Allen

 

H2538 VEHICLE TITLE LOANS; VEHICLE SALES

A person is prohibited from selling a motor vehicle that is the subject of a secondary motor vehicle transaction unless the person has clear title to the motor vehicle.

ARS Titles Affected: 44

First sponsor: Rep. McCune-Davis

 

H2541 STATE CONTRACTS; PREFERENCE; AZ BUSINESSES

The Department of Administration is required to adopt rules to grant preference to businesses headquartered in this state in awarding procurement contracts for materials, services or construction.

ARS Titles Affected: 41

First sponsor: Rep. Saldate

Others: Rep. Cardenas, Rep. Contreras, Rep. Dalessandro, Rep. Escamilla, Rep. Gabaldon, Rep. Gallego, Rep. Gonzales, Rep. Hernandez, Rep. Mach, Rep. McCune-Davis, Rep. Miranda, Rep. Peshlakai, Rep. Quezada, Rep. Steele, Rep. Wheeler

 

H2559 PROPERTY; RECEIPT; NOTIFICATION

If a public agency takes any property from a person, the agency is required to provide the person with a detailed receipt for the property, which must contain a notice on how to retrieve the property from the agency.

ARS Titles Affected: 12

First sponsor: Rep. Dial

Others: Rep. Carter, Sen. McComish, Rep. Robson

 

H2603 PROCUREMENT; AZ BIDDER; PREFERENCE

For procurement contracts awarded by competitive sealed bid, Arizona bidders must be given preference over nonresident bidders if there are two or more low, responsive offers from responsible bidders that are identical in price.

ARS Titles Affected: 41

First sponsor: Rep. Campbell

Others: Rep. Cardenas, Rep. Dalessandro, Rep. Gabaldon, Rep. Gallego, Rep. Larkin, Rep. McCune-Davis, Rep. Meyer, Rep. Quezada, Rep. Sherwood, Rep. Wheeler

 

H2612 AUTO TITLE LOANS; MILITARY MEMBERS

For secondary motor vehicle finance transactions with an active duty member of the  U.S. military or their dependent, a seller is prohibited from imposing an annual percentage rate of interest greater than 36 percent. For secondary motor vehicle finance transactions, a violation of the federal John Warner National Defense Authorization Act for FY2007 or any regulation adopted under that Act is a violation of state regulations relating to auto title loans.

ARS Titles Affected: 44

First sponsor: Rep. McCune-Davis

Others: Rep. Alston, Rep. Borrelli, Rep. Cardenas, Rep. Gallego, Rep. Larkin, Rep. Mach, Rep. Orr, Rep. Peshlakai, Rep. Stevens

 

H2614 COLLECTION AGENCIES

The list of unlawful acts for a person conducting a collection agency in Arizona is expanded to include bringing suit or initiating arbitration proceedings against the debtor or otherwise attempting to collect a debt if the person knows that the applicable statute of limitations has expired, the debt has been discharged in bankruptcy, the debt has been paid or otherwise settled or the debt is otherwise illegal under federal or state laws. A violation of specified sections of the Service members Civil Relief Act of 1940 (dealing with protection against default judgments, stay  of  execution  of  judgments  and  garnishments  and  maximum  rates  of  interest  on  debts

 

incurred before military service) is an unlawful act under state law. Violations are subject to enforcement by the Attorney General.

ARS Titles Affected: 32

First sponsor: Rep. McCune-Davis Others: Rep. Alston, Rep. Mach

 

H2622 REAL ESTATE DEPARTMENT; CIVIL PENALTIES

If the Real Estate Commissioner issues a cease and desist order against a person in violation of real estate regulations, the Commissioner is authorized to order the person to pay a civil penalty of $1,000 for a first violation and up to $2,000 for a subsequent violation.

ARS Titles Affected: 32

First sponsor: Rep. Hernandez

Others: Rep. Alston, Rep. Cardenas, Rep. Contreras, Rep. Escamilla, Rep. Gabaldon, Rep. Mendez, Rep. Miranda, Rep. Saldate

 

H2624 FORECLOSURE MEDIATION PROGRAM

A mandatory foreclosure mediation program is established in the Administrative Office of the Courts to address all issues of foreclosure, including modification and restructuring of the debt. For owner-occupied residences, no trust property may be sold until the mediation process has been satisfactorily completed.

ARS Titles Affected: 33

First sponsor: Rep. Hernandez

Others: Rep. Alston, Rep. Cardenas, Rep. Contreras, Rep. Dalessandro, Rep. Escamilla, Rep. Gabaldon, Rep. Larkin, Rep. McCune-Davis, Rep. Mendez, Rep. Miranda, Rep. Otondo, Sen. Pancrazi, Rep. Saldate, Rep. Sherwood, Sen. Tovar, Rep. Wheeler

 

H2634 RESIDENTIAL FORECLOSURE PREVENTION ASSISTANCE

A mandatory foreclosure prevention program is established, including required notice of loan modification programs. For a first lien against owner-occupied residences, no trust property may be sold before compliance with the program.

ARS Titles Affected: 33

First sponsor: Rep. McCune-Davis Others: Rep. Alston

 

H2642 CALL CENTER RELOCATION; NOTICE; PENALTY

Employers intending to relocate a call center from Arizona to a foreign country are required to notify the Department of Economic Security at least 120 days before the relocation. Violations are subject to a civil penalty of up to $10,000 for each day. The Department is required to compile a semiannual list of all employers that relocate a call center to a foreign country. These employers are not eligible for direct or indirect state grants or state guaranteed loans for five years, with some exceptions.

ARS Titles Affected: 44

First sponsor: Rep. Larkin

Others: Rep. Alston, Rep. Campbell, Rep. Contreras, Rep. Gallego, Rep. Hernandez, Rep. McCune-Davis, Rep. Miranda, Rep. Saldate, Rep. Thorpe, Rep. Wheeler

 

H2661 UNIFORM TRANSFERS TO MINORS; AGE

For the purpose of the uniform transfers to minors act, “adult” is defined as a person who is at least 18 years of age, decreased from 21 years of age, and “minor” is a person who is under 18 years of age.

ARS Titles Affected: 14

First sponsor:

Rep. Sherwood

Others: Rep. Mendez, Rep. Miranda, Rep. Petersen, Rep. Quezada, Rep. Thorpe

 

HCR2004        TAXES; FEES; PURPOSE; TRANSFER; PROHIBITION

The 2014 general election ballot is to carry the question of whether to amend the state Constitution to prohibit any taxes or fees collected by a “state regulatory entity” (defined) from being spent or appropriated for any purpose other than the purpose for which the fee is collected. No more than 10 percent of monies collected by a state regulatory entity may be transferred annually to the general fund.

ARS Titles Affected: 98

First sponsor: Rep. Montenegro

 

HCR2006        PROPERTY VALUATION FREEZE; DISABLED PERSON

The 2014 general election ballot is to carry the question of whether to amend the state Constitution to allow totally and permanently disabled residents to apply to the county assessor for a property valuation protection option on the person’s primary residence. If the assessor approves the option, the value of the residence remains fixed at the valuation in effect during the year of the application for as long as the owner remains eligible.

ARS Titles Affected: 98 First sponsor:

Rep. Campbell

Others: Rep. Cardenas, Rep. Wheeler

 

HCR2011        PERSONAL PROPERTY TAX EXEMPTION AMOUNT

The 2014 general election ballot is to carry the question of whether to amend the state Constitution to increase the amount of personal property exempt from personal property tax beginning in tax year 2015. For personal property initially acquired during or after tax year 2015, the Legislature is permitted to exempt an amount equal to the annual earnings 50 workers in the state according to a designated national measure of earnings per employee adjusted annually. Language permitting the Legislature to exempt $50,000 (plus inflation) from business personal property tax applies to the personal property of a taxpayer that is initially acquired before tax year 2015.

ARS Titles Affected: 98

First sponsor: Rep. Kwasman Others: Rep. Lesko

 

HCR2018        CITIZENS UNITED DECISION; REPEAL

The Legislature supports the inclusion on the November 2014 ballot of a proposal that would allow Arizona’s citizens to instruct their congressional representatives to propose an amendment to the U.S. Constitution that would repeal the U.S. Supreme Court decision in Citizens United v. Federal Election Commission.

ARS Titles Affected: 99

 

First sponsor: Rep. McCune-Davis

Others: Rep. Alston, Rep. Campbell, Rep. Cardenas, Rep. Contreras, Rep. Dalessandro, Rep. Escamilla, Rep. Gabaldon, Rep. Hernandez, Rep. Larkin, Rep. Mendez, Rep. Otondo, Rep. Peshlakai, Rep. Quezada, Rep. Saldate, Rep. Wheeler

 

S1012  RESIDENTIAL MORTGAGES; MORTGAGE BROKER DUTIES

Prescribes prohibited acts for mortgage brokers, including making a residential mortgage loan without verifying the borrower’s reasonable ability to pay or with the intent that the loan will not be repaid, engaging in “churning” (defined), and influencing an appraiser.

ARS Titles Affected: 6

First sponsor: Sen. Ableser

 

S1041  CIVIL UNIONS

Authorizes two adults who are not related by blood and are competent to enter into a contract to enter into a civil union by submitting a notarized and signed affidavit to the clerk of the superior court with specified information and paying a filing fee. Each party to a civil union is considered to be related by law and has the same responsibilities and benefits relating to the other party as each party to a marriage. The term “spouse” in state statute and rule applies to parties to a civil union. Does not require any religious organization to participate in formalizing a civil union.

ARS Titles Affected: 12

First sponsor: Sen. Ableser

 

S1052  SPECIAL DETAINER ACTIONS; SUMMONS; TIME

The summons to a special detainer action for noncompliance with a rental agreement by a tenant must be posted on the entrance to the tenant’s residence within one “court day” of issuance of the summons, instead of one day. The trial date and return date must be set no later than the third “court day” following the filing of the complaint, instead of the third day.

ARS Titles Affected: 33

First sponsor: Sen. Murphy

 

S1055  PROCESS SERVERS; PRIVILEGES

While serving process, a certified process server is authorized and privileged to enter and remain lawfully on real property or unannounced in a planned community or condo association that is guarded or gated.

ARS Titles Affected: 11

First sponsor: Sen. Murphy Others: Sen. Pancrazi

 

S1056  PROCESS SERVERS; PUBLIC RECORDS; CONFIDENTIALITY

The lists of persons that various public agencies may send a required notice of the expiration of restrictions or protections on specified public records is expanded to include certified process servers.

ARS Titles Affected: 11 16 28

First sponsor: Sen. Murphy Others: Sen. Pancrazi

 

S1101  PROCUREMENT CODE; FRAUD; ATTORNEY GENERAL

If the Attorney General has reasonable cause to believe that a person has information or a document or object relevant to an investigation for procurement code violations, the Attorney General is authorized to serve on the person a written demand to appear and be examined under oath, to answer written questions under oath and to produce the document or object for inspection. If the person fails to comply with the demand, the Attorney General may file an action in superior court for an order to enforce the demand. If the person fails to comply with the court order, the court may adjudge the person in contempt of court, grant injunctive relief, or grant other relief it deems proper.

ARS Titles Affected: 41

First sponsor: Sen. Yee

 

S1141 TRUST PROPERTY; SHORT SALE (TECH CORRECTION; NOTARIES PUBLIC; CONDUCT)

Minor change in Title 41 (State Government) related to prohibited conduct of notaries public. Apparent striker bus.

ARS Titles Affected: 41

First sponsor: Sen. Griffin

 

S1163  EMPLOYMENT DISCRIMINATION; PROHIBITION

The list of attributes for which a person cannot be discriminated against in employment practices is expanded to include gender, gender identity or expression or sexual orientation. A religious institution is allowed to take certain actions on the basis of gender, gender identity or expression or sexual orientation if the employee’s position is directly related to the religious functions of the organization.

ARS Titles Affected: 41

First sponsor: Sen. Gallardo

Others: Sen. Hobbs, Sen. Jackson, Jr., Sen. Lopez, Rep. Quezada

 

S1166  IDENTIFYING INFORMATION; FORMER PUBLIC OFFICIALS

“Former public officials” (defined) are added to the list of persons who may file an affidavit to request county officers and the Department of Transportation prohibit access to that person’s residential address and telephone number contained in certain public records, and who must be notified of the expiration of restrictions on related public records.

ARS Titles Affected: 11 16 39

First sponsor: Sen. Lopez

Others: Sen. Bradley, Sen. Cajero Bedford, Sen. Driggs, Sen. Gallardo, Sen. Hobbs, Sen. Jackson, Jr., Sen. Landrum Taylor, Sen. McComish, Sen. Meza, Sen. Pancrazi, Sen. S. Pierce, Sen. Reagan, Sen. Shooter, Sen. Tovar, Sen. Ward, Sen. Yee

 

S1176  COLLEGE SAVINGS PLANS; SUBTRACTION INCREASE

For the purpose of computing Arizona gross income for income taxes, the maximum amount that can be subtracted for contributions to college savings plans is increased to $2,000 for a single individual or $4,000 for a married couple filing jointly, from $750 for a single individual or

$1,500 for a married couple filing jointly. ARS Titles Affected: 43

First sponsor: Sen. Yarbrough

 

S1185  CAMPAIGN CONTRIBUTIONS; BUNDLING; LOBBYISTS

Registered lobbyists are prohibited from making or promising to make campaign contributions to or soliciting or promising to solicit campaign contributions for members of the Legislature or the Governor at any time, instead of only during the regular legislative session. Lobbyists are prohibited from holding, receiving, collecting or soliciting more than two otherwise lawful campaign contributions for the same candidate for public office.

ARS Titles Affected: 41

First sponsor: Sen. Gallardo

 

S1195  INDEPENDENT EXPENDITURES; VIOLATIONS; CRIMINAL ENFORCEMENT

A person who knowingly makes a purported independent expenditure of $25,000 or more and a person who knowingly receives the in-kind contribution of a purported independent expenditure of $25,000 or more that does not meet the definition of independent expenditure are guilty of a class 5 (second lowest) felony.

ARS Titles Affected: 16

First sponsor: Sen. Gallardo Others: Rep. Quezada

 

S1200  FINANCIAL ABUSE OF ELDERS; REPORTS

A financial institution is required to report to the office of the Attorney General suspected financial abuse that targets or is committed against an elder if an officer or employee of a financial institution has a good faith suspicion that financial abuse has occurred. A  person making a report that believes, in good faith, that the action is warranted is immune from civil or criminal liability.

ARS Titles Affected: 6

First sponsor: Sen. Farley

Others: Sen. Hobbs, Rep. Orr, Sen. Tovar

 

S1211  PROPERTY TAX DELINQUENCY; INTEREST RATE

Property taxes bear interest from the time of delinquency at the rate of 10 percent per year simple, decreased from 16 percent.

ARS Titles Affected: 42

First sponsor: Sen. Burges

Others: Sen. Crandell, Sen. Gallardo, Sen. Melvin

 

S1214  COUNTY TREASURER’S MANAGEMENT FUND

The county treasurer of each county with a population of more than 2 million (Maricopa County) is authorized to deduct a monthly management fee from the earnings on monies maintained by the treasurer for agency pool participants, to be deposited in a county treasurer’s management fund and used as appropriated by the board of supervisors for office personnel and operating expenses.

ARS Titles Affected: 11 35

First sponsor: Sen. Burges

Others: Sen. Crandell, Sen. Murphy

 

S1394  EMPLOYEE CREDIT HISTORY CHECK; LIMITATIONS

Employers are prohibited from failing or refusing to hire, discharging or otherwise  discriminating against an individual with respect to compensation or terms of employment because of the individual’s credit report or credit history, and from inquiring about an applicant’s or employee’s credit report or credit history. Some exceptions. An employer in violation is liable to the injured individual for actual damages suffered and reasonable attorney fees.

ARS Titles Affected: 23

First sponsor: Sen. McGuire

Others: Sen. Bradley, Sen. Farley, Sen. Landrum Taylor, Sen. Tovar

 

S1395  INSURANCE; CREDIT SCORING

Insurers are prohibited from using credit ratings, reports, scoring or information to underwrite, classify or rate insurance policies. Insurers are prohibited from cancelling, renewing or refusing to issue an insurance policy based on credit ratings, reports, scoring or information.

ARS Titles Affected: 20

First sponsor: Sen. McGuire

Others: Sen. Bradley, Sen. Farley, Sen. Jackson, Jr., Sen. Landrum Taylor, Sen. Lopez, Sen. Tovar

 

S1400  FORECLOSURE MEDIATION PROGRAM

A mandatory foreclosure mediation program is established in the Administrative Office of the Courts to address all issues of foreclosure, including modification and restructuring of the debt. For owner-occupied residences, no trust property may be sold until the mediation process has been satisfactorily completed.

ARS Titles Affected: 33

First sponsor: Sen. Tovar

 

S1401  FORECLOSURES; RIGHT TO RENT

A borrower who is in default on a mortgage has the right to continue to occupy the property as a renter if the borrower notifies the lender of intent to rent, makes timely monthly rental payments in an amount determined by the justice of the peace court (using a licensed residential real estate appraiser), and continues to use the property as the borrower’s primary residence. A lender cannot foreclose on a property for at least one year after the borrower notifies the lender of intent to occupy the property as a renter and meets other specified requirements.

ARS Titles Affected: 33

First sponsor: Sen. Tovar

 

 

S1404  LICENSING ELIGIBILITY; AUTHORIZED PRESENCE

For the purpose of the prohibition on a state agency or political subdivision issuing a license to an individual without documentation of citizenship or lawful presence in the U.S., “license” does not include a volunteer food handler card. A person is prohibited from using a volunteer food handler card for purposes of employment.

ARS Titles Affected: 41

First sponsor: Sen. Hobbs

 

S1411  SOCIAL MEDIA PASSWORDS; PROHIBITION

Employers are prohibited from requesting or requiring that an employee or applicant disclose  any user name, password or other means of accessing a personal account or service through an electronic communications device. Employers are prohibited from discharging or disciplining an employee, and from failing or refusing to hire an applicant for refusal to disclose this information. Does not prevent an employer from investigating certain violations, prescribing workplace policies governing the use of the employer’s electronic equipment or monitoring the use of the employer’s electronic equipment and electronic mail.

ARS Titles Affected: 23

First sponsor: Sen. Murphy

Others: Rep. Carter, Sen. Driggs, Sen. Shooter