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HomeMy WebLinkAbout05/17/2006 Blue Sheet State Legislative Issues TOWN COUNCIL MEETING INFORMATION MEETING DATE: TOWN OF MARANA May 17, 2006 AGENDA ITEM: K. 1 TO: MAYOR AND COUNCIL FROM: Michael A. Reuwsaat, Town Manager SUBJECT: State Let!islative Issues: DiscussionIDirectionl Action regarding all pending bills before the Legislature DISCUSSION This item is scheduled for each regular council Meeting in order to provide an opportunity to discuss any legislative item that might arise during the current session of the State Legislature. Periodically, an oral report may be given to supplement the Legislative Bulletins. ATTACHMENTS Legislative Bulletins, Issues 16 and 17. RECOMMENDATION Upon the request of Council, staff will be pleased to provide recommendations on specific legislative issues. SUGGESTED MOTION Mayor and Council's pleasure. JCB/05/10/2006/5:04 PM IN THIS ISSUE Legislature Considering Shared Revenue Reductions and Property Tax Limits. . . . . . . . . 1 Impace Fees Bill Amended In COW...................1 Liquor Bill Close To Final Consideration In The Senate. . 2 Attachments Proposed Tax Cuts in State Budget State Shared Revenue Distribution Rates To Cities and Towns Have Historically Flucuated with Income Tax Rates Proposed Income Tax Reduction of $200 Million/Year Over 3 Years League of Arizona ~I.~ Cities AND Towns Legis/ative Bal/etin is published by the League of Arizona Cities and Towns. FOIWard your comments or suggestions to: League of Arizona Cities & Towns 1820 West Washington Street Phoenix, Arizona 85007 Phone: 602.258.5786 Fax: 602.253.3874 Email: league@mg.state.az.us Internet: www.azleague.org LEGISLATIVE BULLETIN Issue No. 16 April 28, 2006 * ACTION ALERT * LEGISLATURE CONSIDERING SHARED REVENUE REDUCTIONS AND PROPERTY TAX LIMITATIONS As the Governor and Legislature continue their work towards reaching an agreement on next year's budget, it has become very evident that reductions to shared revenue and limitations on property tax levies are very much under consideration. We have attached several documents to this Bulletin describing the concepts under consideration, a history of urban revenue sharing and a chart with a breakdown of how the proposed reductions would impact each city and town. Action Requested: Please review the attached material and contact your legislators and the Governor to express your opposition to these proposals. Please remind them that urban revenue sharing is a part of the income tax collected by the State but set aside by the voters to fund local municipal services. Also make your state leaders aware of the impact that these reductions would have on your local budgets. * ACTION ALERT * IMPACT FEES BILL AMENDED IN COW The Senate amended HB2381 in the Committee of the Whole on Thursday. The adopted floor amendment makes substantial changes to the bill, including removing most of the construction sales tax language and the language that required credit repayment to a developer if future development uses the infrastructure funded by the original development's impact fees. The bill makes substantial changes to the process that have not had an adequate time to be deliberated and drafted. The concept of the bill was first considered as a strike everything amendment in a House committee more than a month into session, was substantially amended in a Senate committee, and was amended once again on the Senate floor yesterday. Considering the bill involves roughly seven pages of virtually all new statutory language, the lack of time and deliberation involved in drafting such a substantial reform package is highly problematic. Reforms of this magnitude should have been considered and developed prior to the start of session. We are very concerned that the bill will result in unintended consequences that could be detrimental to municipalities and homebuilders alike. We have formally offered to the homebuilders and legislative leadership to work cooperatively over the interim to develop a reform package that would have adequate time to be properly deliberated and developed. We are open to exploring many of the concepts brought forward by the homebuilders such as enhancing the opportunity for the public to participate in the development fee process and further assurances that development fees will be used to provide services for new development. However, we believe thatthe public's best interest, and quite possibly the homebuilders', would be best served by the development of a reform proposal over the summer rather than the passage of HB2381 this session. Action Requested: Please contact your Senators and ask them to oppose HB2381. The bill is ready for a final vote in the Senate as early as Monday afternoon. In the event that the bill passes the Senate, it will likely need to go back to the House for a vote on the Senate amendments which could also occur later next week so please contact your Representatives as well. * ACTION ALERT * LIQUOR BILL CLOSE TO FINAL CONSIDERATION IN THE SENATE HB2740 was scheduled for a Senate floor vote yesterday, with over 90 pages of proposed amendments being offered. The amendment most likely to be added was drafted by Senator Leff and includes: 1. Limit on number of 'waivers' issued to 15 per yearfor the first 3 years. 2. Conditional enactment based on whether the budget provides an appropriation for the Liquor Department to hire two more auditors. 3. Requires the Liquor Department to create a report, with input from cities and neighborhoods, as to the effects of these new provisions. 4. Enhances the ability of neighborhood groups to provide input on the issuance of the waivers. 5. Limits some of the establishments that can be within 300 ft. of a church or school. Concerns we have that are not addressed by the amendment: 1. STILL allows these establishments to operate within 300 ft. of a church or school if they were there first. 2. Allows for a 'hybrid' license to be considered by consent agreement rather than an audit. This means the Director has the discretion to decide if the restaurant 'appears' to meet at least 30% food sales. 3. Reduces the floor space limits to interior space only. 4. If there is a report after two years, the provisions of the bill should automatically be repealed unless the legislature finds, through the report, that this process should continue. 5. Ultimately, it still creates a very cumbersome process. The Senate opted not to consider the bill on the floor yesterday and a meeting with the sponsor and other stakeholders was scheduled. Based on the discussions at the meeting, the key legislators involved with the bill indicated that the basic concepts will not change substantially and that many of our concerns will not be addressed. It was also indicated that if we are not in support, then none of the amendments will be offered and the bill will move forward in its current form without any amendments. Action Requested: Please contact your Senators and ask them to oppose HB2740. BURDEN OF PROOF; EMERGENCY TREATMENT GOES TO GOVERNOR'S DESK FOR SIGNATURE HB2315, Burden of Proof; Emergency Treatment is now on the Governor's desk for signature. This bill contains the language originally sponsored by Senator Carolyn Allen ensuring citizen's continued access to quality emergency care in hospitals. This bill establishes a clear and convincing standard of proof for liability cases falling under carefully defined conditions, which reflect the criteria of the Emergency Medical Treatment and Active Labor Act (EMTALA), a federal mandate upon hospitals. By addressing the issues of clear and convincing burden of proof, we hope to see more physicians willing to take call in the emergency rooms throughout all parts of Arizona providing greater access to emergency care for all Arizonans. The language of this bill supports the League's resolution urging the Legislature to reform health care policy in order to retain and attract physicians so that all Arizonans have access to adequate health care. We urge you to contact the Governor's office with your support of this bill. LEGISLATIVE BULLETIN PAGE 2 April 28, 2006 State Shared Revenue Distribution Rates to Cities and To'\tVns Have Historically Fluctuated With Income Tax Rates "The original ballot initiative required 15.0% of income tax collections to be shared with cities and towns. In order to avoid an unintended windfall when state personal income taxes were increased in the early 1990's to help balance the budget, the URS distribution was lowered from 15.0% to 12.8% in FY 1993. As a result of several state income tax rate cuts, the Legislature agreed to increase the urban revenue share to 13.6%, effective in FY 1997, to offset the loss of revenue associated with state income tax reductions. The distribution percent was increased to 15.0%, starting in FY 1998. " Source: JLBC 2001 Arizona Cities & Towns State Shared Income Tax Distribution from 1987-88 to 2007-08 (in thousands) State Distribution Base to C itiesfT owns State's Distribution % to C itiesfT owns % Change From Prior Year 1987-88 $130,998 15.0% 1988-89 $143,643 9.7% 15.0% 1989-90 $150,905 5.1% 15.0% 1990-91 $166,863 10.6% 15.0% 1991-92 $176,115 5.5% 15.0% 1992-93 $183,790 4.4% 12.8% 1993-94 $185,600 1.0% 12.8% 1994-95 $205,600 10.8% 12.8% 1995-96 $218,600 6.3% 12.8% 1996-97 $257,800 17.9% 13.6% 1997-98 $291,244 13.0% 15.0% 1998-99 $340,311 16.8% 15.0% 1999-00 $377,628 11.0% 15.8% 2000-01 $396,336 5.0% 15.0% 2001-02 $421,367 6.3% 15.0% 2002-03 $429,988 2.0% 14.8% 2003-04 $365,842 -14.9% 14.8% 2004-05 $372,973 1.9% 15.0% 2005-06 $425,395 14.1% 15.0% 2006-07 $551,325 29.6% 15.0% 2007-08 $639,772 16.0% 15.0% As a result of a 1972 general election ballot initiative, incorporated cities and towns have received a share oftotal net income tax collections since FY 1974. In exchange, cities and towns are not allowed to levy income and luxury taxes. While providing cities and towns with an added revenue source, Urban Revenue Sharing (URS) was also designed to simplify tax administration by prohibiting a proliferation of city-specific taxes. PROPOSED INCOME TAX REDUCTION OF $200 MILLlONNEAR OVER 3 YEARS Proposed across-the-board income tax cuts would reduce the operating budgets of every city and town in Arizona. A rate reduction of 5 per cent per year over three years would result in a direct loss of $180 million to city and town general funds -- the very funds that pay for local police, fire and other public safety personnel. This chart shows the budget reductions that would hit city and town services each year of a three-year cut. CITYfTOWN YEAR 2 LOSS YEAR 3 LOSS A*-'::~"~" " ~~dk ~:w~.~al\\'r~~4)l;~ 1,242,985 1~1fJ"1"1 m BULLHEAD CITY 38,210 239,472 478,944 718,415 "B"T' t:r1l1Bll, ',JIJ",~,:}:_;;' :"','~:, :,:"1' 1~11' 'II--,$,',T','" 'I ' 'lfuT1_V;_tIllIlP III" /",3"", I m l! '>>'A . . 'x '-~ -w~ w' ".' ,~,,,,~;m _; ;~~\;;~1m1~ U i ill u<ti-t,; ~~,,~?~.~ %~liillwlllmtWlful_~hh' ~;~lil' ,;;:tij~~ ' ! CAREFREE 3,500 21,935 43,871 65,806 llUlllldlll.''''''; , '! " "J,,"Slr, ,lll"Ill;''''~IIIIIIII'''''il;lill;~.~; " " " ,:,:,lll"'" CAVE CREEK 4,615 28,923 57,847 86,770 _'" ",">' II@J'._~I.r,:,'mi0_lI ,[@ffiS' ,,~-~;B1,if",I:~,l~}j."':.',.'!&_' ",', 'I:~ 2mmmmmdAJ:'A"" ~o/_ ~k\I~, ~<>>:~~ AA;:vii;1B _"" _,,~ ~}l~fu_~ ~,-)y CHINO VALLEY 12,325 77,244 154,488 231,732 "I..t> '&!it?1iI'" "'I' 1iI'" >m'.' ti+">"'I.~,*1lit,.ii,'f!i":"6lI:.-r"t:,tW"'f' ~.,.' .'~~' ::<=',6,~t1o ~~d~ MmJiID .",.\W",;:<" ~s1kfwlli c. ". ' ,~,0'$~; h~ liI<< . .;~k11t ^ CLIFTON * 31 COOLIDGE 8,180 51,266 lIl5illill' > I ;"wL1l:: 1"II~'I"t'1IlU6lI:1ftI"1~lmr;5il'$I,I'I'It'1~'I~'91'~il'1> fl!lHf~ * ! ;.__ ..., l "' ' , ~::;, ,::;, ~~~" ~ , % m~JwIL,,,,_mw,,,,,~-tL,th,,. DEWEY-HUMBOLDT 4,030 25,257 "....,1~;'.. DOUGLAS * ;;;:;; A't.-<,,!,''X ~,~ 50,514 ,~F*I_.J:lJlll#;i" __ ,~y. ~~"~ ,,':l-',' k'1im;,.iY-<.ill:llit""~~",,,,4-' 1 02,532 AA:<.>fif!Tht,>;''itiii' x ' ~11\il~~41 ' ~,,~~&.~ A "'" ~"f::fuid?:::~:4{1<xx"XH;' 17,195 107,765 UllJ[ "HvA,.~ll~_.II"'~\, EAGAR 139,446 209,170 M ,,', J JI#IIIIIIIL'\\\$b,t,*,,1l3.1Rr't'''''''il'F'''''-%''''''''M'1 ,,,'.1"~4( ml~)!itb ;~~WJ:'1f~W:,~(_~."'~ 257,333 386,000 II ~'lT~~JW~~~.~~~'III,~~1_lt_6" i ~~*%,,)),,%~_~lI{~~iN@~ ~ ,@t.:41[t"A'A",~,*~hV, 6,957 13,913 "" IW81f:61mWti+I'fjlj%II'~itt'%m.""" 'BIIIIlIII."''''''' ' ~ttrQifk:WM~; :~'*'~~~ ''- A ,.A ^ .~. ' gj 11,125 69,723 '~:~:I~il'.'III.r~1 ~ ~A:;~,l.~illx A~ ,,:.'\\~'~,'~'''~ x " FLORENCE 20,530 128,667 ~"M' l.f~~III.l~':i'14' . ~~~~12..IL~ '", , , . ~~ '\1Wtti%1:~,JJ$iL~", B FREDONIA * 1,110 !Ell. ~~$~IIII,~',. [1..i.,6,111111 GILBERT 178,000 1,115,571 2,231,143 il"ILW1tt""'1i!lIl~__IW$P"1II._iMil!l'1I!~~."'.IMI'.1t_." ..'" ,',~"" """11"'.' 'I"'i' ;~ !:5t1tMI4111 :~~~'~tt~~J~~~ '~:'~, '~~~_~~" >"~, :~~~2!~~~S:&~:: 7,495 46,973 ,xx'~~l.,_:~;~~,.'.~~,:, .I~~~il~'''.iti.ll~. 91illif w~~~~A~:~li. .~ GUADALUPE 5,425 -'.'1ilj'~1ffit;j%"'II"; ','" 1R!!B_I!%lil.. .."'~11l~~ HOLBROOK * ...1 "~:~~,~,..il },,,' JEROME ELOY 20,870 "~,, M A;f',' {""" GLOBE * , '%\7M:~'-t ':~3;,~~~K;;;" , '3 3,346,714 R 140,919 .''':''Il_~l "@,,,,,,-,. 102,000 lI!l%%,jl""'Wlll--liSY ,~'~%tl~'~~ 93,946 ~x,.xAIIIll.llg 34,000 68,000 A ~. ~I'::~~ ' 5,425 Btt 34,000 68,000 ,~~~,,,,0'kjk.'~.1l1.. , .'ttti+_.,Il,m;,_, 102,000 'Tti KINGMAN 330 .. ,'J".~~}: LITCHFIELD PARK MARANA 26,725 167,492 334,985 .1l1'...~~IJJ!t.lla.~~\._~11Irj~' , MESA 452,355 2,835,024 5,670,048 ~~II~~~i{II.IIII'\".Wt~jp(%ftv~}r ~ ~v:"'-~:i/ W~':=ill "<:~~':~~~~~A~~'X:'''& 'A,'<t'%;>~t~*,~~'WA' NOGALES * 21,830 136,814 j.l.l'tl'~,.,,,,,/ffitY;~lx,,,,",%"YYNfn,.,,,,It n~,~1IIIIIIlll~!fu>"jLS ' 502,477 I I_\,6lI:if."i-,....\~:' '% ~",I!!1">,,,".Il__" 8,505,072 >>""'~&,_;Il'~!tM1..1111 ~" ~1 CITYITOWN PAGE POPULATION 10 YEAR 1 LOSS YEAR 2 LOSS PROPOSED INCOME TAX REDUCTION OF $200 MILLlONIYEAR OVER 3 YEARS PARKER PHOENIX PINETOP-LAKESIDE * PRESCOTT VALLEY YEAR 3 LOSS 1 175,358 99,587 199,173 298,760 "\'~.<,"tr '~;m' . (111 .. . ....~ ,'___~"!:;w~,_"'''",.c,. ,"~J%x;, _____Mo""_A:R.tt _ ____lk";:';oo.:tI<1,""^<, """,,; QUEEN CREEK fiR..'''', ~..I!i\1.~.'.;; ." .." 'H . '.." . "",".'. ill,,,._->-,",,,,__ _W ~ SAHUARIT A ~_..'11 SAN LUIS _11' ....r~.,.:..., SEDONA lilt.' ill' ,'''''''''''' SIERRA VISTA " ~l.;"w'. .a'llT'''.' rn m~",:",:,>%",,,~,,,, _,; :&.~~ SOMERTON 15,890 ';VY;'.. ~\ h...,... .,!IiL 13,990 87,679 ~ _1Il'lr.~:~~~_, 22,930 143,708 Illl..r. . "'''.''~T';:...., 10,935 68,532 ~~.. ..',,'~v<~~.":~,:::~~~I*I-^X ~ ~~ _ _ _ A _ _ -~ ~ _l~~ -%__-:---__~--'-v-" ' ,., ~'j;:mr{,*, If! . ...'.A . Alii" J. 43,690 . ~ - ,K"~~;',:if.~M 287,416 lll'I"'*iWJlt!i'P"""'!lm >, ,Jt~u _i~lt~~,~ '-x 137,065 .. .'l')~\\1",':"::" 1illiI'W.'}W"" _A:&ti~;- _ """M"" ~ ".:,. " ' .,t ~:;;: "',_ <bZ-.#k.-'""k 547,633 263,037 ..'\W",'w"W~".f'."""''''. _"IIII_t~#~~nC~,<,~',:~: _'-;~ 431,124 _. 205,597 'h-.i W:~::^-m' ^ 273,816 SPRINGERVILLE SURPRISE TEMPE TOLLESON _III:, c'" .11%11,", IIllih,t . ,",/.,", ..,,,,JW.\\11R., TUCSON WICKENBURG II WILLIAMS * 6,590 41,301 nIJl....IWr]]. UTi'II.<;;':;~ll,"" 'llr",i'it;::;i';Jl1i~r~.. ~j%,.~,_"Hh~ ',- ;~,i". , , @...J~IL,:,>.$i,^:"~::.:.,:~":,,,,:,.:,,~,~:Wk'''f,,1\_ 1 82,602 m~ 102,658 ~ ;,; o 123,904 1IIltl.+~'Jfil"!!; ___@1h~~Bm~YH\ll~~ WINSLOW * 9,835 . ,'T.. . . m.'1,T.....".......';;.JII......IiJ%1-I..111 h"__"'_,,;,,,~Al~t__-- ~~~~,~~, YUMA 88,775 4,786,785 123,277 184,915 &1~ilflI~,,,.J ," .... " .....j. ~ , ~",,,::ddWM114f , ,~.^ N~#~-~ ~~'-'< ill 1,112,751 1,669,127 $60,000,000 $90,000,000 61,638 ='mETTmTr.UL"llt~ ," 556,376 $30,000,000 Cities and Towns depend on consistent revenue sharing amounts in order to budget for essential services to their citizens. If state income tax reductions are made, cities and towns should not have to suffer the consequences. League of Arizona Cities & Towns April 2006 Proposed Tax Cuts in State Budget As tax reduction proposals are being discussed during the budget process, Arizona cities and towns ask that state tax cut proposals do no harm to local services. Some of the proposals currently under consideration are: Income Tax . An across-the-board 5% reduction to income tax rates over the next three years would result in a loss of $180 million to cities and towns across the state. . The voter-approved initiative creating income tax revenue sharing established the principle that cities and towns should be held harmless against state income tax cuts. This precedent was upheld during past income tax changes (1995-1996, 1999-2000,2002-2004) and needs to be included in any current plan. . Cities and towns, like the state, are working to repair the damage done to their services and programs resulting from severe revenue declines of the past several years. Cities and towns provide the most needed essential public services such as police, fire, water, libraries, parks, garbage pickup, roads and streets, etc. Property Tax . There is a proposed reduction in property tax revenues from a three-year phase- out of the county equalization rate. The permanent reduction in revenue from this item is $210 million over three years. Cities and towns are not opposed to this reduction. . In addition, there is a proposal to change the property tax structure by "resetting" the base year on which property taxes are calculated and collected from 1979-80 to 2006-07. Cities and towns are not entirely opposed to this althoue:h it punishes those communities that have not levied their maximum allowable rates every year. . Another proposal calls for a freeze on 2006-07 and 2007-08 property tax levies, forcing cities and towns to maintain their levies at the 2005-06 levels. Supporters say this freeze will keep local governments from "backfilling" the $210 million reduction that would be come available from the elimination of the county equalization rate. These concerns are unfounded because only 17 of the 47 cities and towns with property taxes currently levy their maximum amount. Even if they all did, which is not likely, the total potential increase would be $17 million statewide, only a fraction of the $210 million reduction from the county equalization rate repeal. While a "freeze" would provide negligible protection against backfilling property taxes, it would result in a sie:nificant revenue loss for individual cities and towns. since they would not be able to include growth and inflation in their levy adjustments. It is also impractical because cities and towns will have set their 2006-07 rates and adopted their budgets in compliance with existing state law before this new law takes effect. Arizona cities and towns ask that they be held harmless on income tax cuts as well as freezes on their property tax levies. IN THIS ISSU E Impace Fees Bill Passes The Senate . . . . . . . . . . . . . . . . . . . 1 Liquor Bill Significantly Amended,lncludingAllowing Guns In Restaraunts ........ 1 State Budget Discussions. . . . . 2 Eminent Domain Reforms. . . . 2 Governor Vetos Healthcare Reform Resolution ......... 2 Governor Signs Blue Stake ... 3 Attachments Impact Fees Fact Sheet Grill Bill Opposition Fact Sheet League of Arizona ~II~ Cities AND Towns Legislative Bulletin is published by the League of Arizona Cities and Towns. FOlWard your comments or suggestions to: League of Arizona Cities & Towns 1820 West Washington Street Phoenix, Arizona 85007 Phone: 602-258-5786 Fax: 602-253-3874 Email: league@mg.state.az.us Internet: www.azleague.org LEG I S LA liVE BU LLEll N Issue No. 17 May 5, 2006 * ACTION ALERT * IMPACT FEES Bill PASSES THE SENATE HB2381, the Central Arizona Homebuilder Association's legislation that makes significant changes to the existing impact fee statutes, barely passed the Senate on Mondaywith a 16-13 vote. While this bill was significantly amended on the floor last week, we have made it very clear to legislators that we still have significant concerns with the bill and have requested its defeat. This legislation is fundamentally flawed as it proposes substantial changes to the impact fee process, yet was drafted exclusively by the homebuilders with no input from cities and towns. Since its introduction, we have had several discussions with the homebuilders and several efforts to reach an agreement on reforms. We have fundamental disagreements on some issues, but even for those that we can agree in principle, there has been inadequate time to fully develop the specific language. Changes of this magnitude need much more time to be carefully crafted. We believe that the current bill has the potential of causing many unintended consequences that could be detrimental to both the public and the homebuilders. We have asked for reform discussions to occur over the summer rather than the passage of HB2381 this session. The bill was caucused in the House this week, where the bill's sponsor, Rep. Paton, indicated that he concurs with the Senate changes. This sets the bill up for a final vote in the House early next week. If it passes, the bill will then move on to the Governor's desk. A League fact sheet is attached to this bulletin with further information on the bill. ACTION REQUESTED: Please contact your Representatives and ask that they oppose HB2381 and support efforts to initiate a reform discussion over the summer. * ACTION ALERT * LIQUOR Bill SIGNIFICANTLY AMENDED, INCLUDING AllOWING GUNS IN RESTAURANTS HB2740 is Rep. Reagan's bill that allows restaurants currently in violation of liquor laws to continue operating with potentially less than 30% food sales. Several amendments were adopted that add 80 pages and several new subjects to the discussion. A Senator Allen floor amendment adds language to the bill regarding DUI laws. These amendments increases penalties for repeat offenders. The League supports any efforts to protect our citizens and improve public safety by reducing the number of drunk drivers. We believe it is disingenuous, however, to make those changes on a bill that also increases alcohol sales, especially in a class of license that is not closely regulated. The Allen floor amendment also makes several changes to the liquor portion of this bill. The bill still creates significant problems for neighborhoods and law enforcement and we continue to remain opposed. Our fact sheet is attached to this Bulletin for your use. The Senator Harper floor amendment adds provisions to this bill to allow patrons to carry guns into the establishment unless the owner posts notice that they are prohibited. This amendment creates significant problems related to public safety, especially since the liquor portion of the bill increases liquor sales within the restaurant license classification. Many establishments with restaurant licenses also operate as bars or nightclubs, which creates an alcohol intense situation where guns in the establishment could create a dangerous situation for anyone involved. This bill now presents even more significant problems to neighborhoods and law enforcement. It is waiting for another vote in the Senate and will likely need another vote in the House in order to pass. This Senate vote could happen as early as Monday. ACTION REQUESTED: Please contact your Senators and request that they oppose HB2740. STATE BUDGET DISCUSSIONS The President of the Senate, Speaker of the House and the Governor have begun meeting almost daily to discuss next year's state budget. With talk of possible property and income tax cuts, the League is actively opposing measures that will have financial impacts to cities. In addition to speaking with individual legislators on how these cuts will impact municipal ability to provide services, we have also been talking to legislative leadership and the Governor directly. We are asking that state tax cut proposals do no harm to local services. League staff and representatives from individual cities met with the Speaker's fiscal policy advisor to discuss our concerns about the budget proposals. In addition, both Senate President Bennett and Governor Napolitano met with a delegation of mayors earlier in the week. Mayors Walkup, Gordon, Scruggs, Hawker and Hallman met with the President while Mayors Walkup, Manross and Lopez- Rogers met with the Governor. The outcome of all of the meetings was relatively positive and state leaders clearly received the message not to harm the ability of cities and towns to provide local services. The League continues to monitor budget negotiations and engage legislators on all of these issues and will keep you posted on new developments. EMINENT DOMAIN REFORMS While the compromise reform package that we have been developing has not received a formal vote, there has been a lot of activity behind the scenes on this issue. The language is being fine tuned while several legislators continue to work on finding a bill that can be amended to include the new provisions. Our compromise creates safeguards for property owners while allowing local governments to maintain their authority to utilize eminent domain for important city responsibilities, such as constructing roads and eliminating blight. It is our hope that our reform proposal will move forward as an alternative to the twenty other eminent domain bills that have been introduced this session. We expect new developments soon and will keep you updated. GOVERNOR VETOES HEAL THCARE REFORM RESOLUTION Despite our requests to support the bill, the Governor vetoed HB2315 this week. This bill required the evidence for malpractice lawsuits against emergency room doctors to be clear and convincing, a tougher standard meant to reduce frivolous lawsuits against doctors. The concept is consistent with our League resolution to enhance the recruitment and retention of medical physicians in Arizona. The higher standard would have likely lowered the costs of malpractice insurance, which has been cited as a major barrier to attracting and keeping doctors in the State. This bill passed both houses of the Legislature, with a 17-11 vote in the Senate and a 37-20 vote in the House. The Governor's veto message outlined two main reasons for her opposition. She questioned the constitutionality of the bill and referred to a task force she has convened on health care reform, which has not yet given her recommendations for reforming healthcare in our state. GOVERNOR SIGNS BLUE STAKE The Governor signed HB2708 late last Friday despite the concerns of cities and towns. This bill limits the ability of municipalities to implement additional safeguards to the blue stake process that were enacted by the Legislature last year. Specifically, the bill preempts the ability of cities and towns to use sewer clean outs as location devices for sewer lines. The Central Arizona Homebuilders Association claimed that a required second clean out was more expensive than other, less reliable, methods of markingthese laterals and that their installation created problems when installing other underground infrastructure. We estimate actual retail costs and labor to be about $150 total for each c1eanout. We believe that this was a small cost to utilize the safest and most reliable method of marking sewer laterals. LEGISLATIVE BULLETIN May 5, 2006 PAGE 2 League of Arizona ~.~ Cities AND Towns 1820 W. Washington Street · Phoenix, AZ 85007 · Phone: (602) 258-5786 . Fax: (602) 253-3874 Email: leaguc@mg.statc.az.us . Wcbsitc: www.azleague.org The league of AZ Cities and Towns OPPOSES HB2740: liQuor; restaurant license for 2rills The League opposes HB2740 due to its impacts on neighborhoods and municipal ability to ensure public safety. This bill contradicts efforts by neighborhoods, cities and the DLLC to eliminate bars operating under the disguise of a restaurant. These 'hybrid' establishments are exempted from maintaining the 40% food sales currently required for restaurant licensees. They may even have less than 30% food sales and be permitted to maintain lower food sales indefinitely by consent agreement. If the Director believes the establishment sells at least than 30% food, this 'waiver' can be granted without an audit to determine the actual food sales percentage. This bill allows patrons to carry guns into these establishments and the bar-like conditions this bill protects. The establishments that qualify for these 'waivers' are already a problem for neighborhoods and law enforcement. Audits are a result of complaints, not random chance. With only 2 auditors monitoring more than 2800 restaurants, only .07% are audited per year. These establishments may operate within 300 ft. of schools and churches. Bars are currently prohibited from this area because of the impact their high alcohol sales have on sensitive institutions. Two additional auditors are not sufficient to enforce this new process. 4 auditors can review 1.7% of all restaurants statewide. Neighborhoods would benefit from any additional enforcement of current liquor laws. However, adding these new loopholes will negate any affects additional enforcement could have on protecting neighborhoods. The reporting requirements are ineffective without a review committee or a sunset. The cap on the number of these licenses is inadequate since it expires after 3 years with no review of the effects an unlimited number of these establishments will have on neighborhoods. The League, along with its member cities and towns, does not want to see good neighborhood restaurants go out of business. The sponsor and other stakeholders refused the amendment language we offered that would allow these establishments a second chance while closing the loopholes that HB2740 currently creates. We are willing to work with the stakeholders over the interim to draft a better solution than HB2740. PLEASE CONSIDER THE IMPACTS THESE ESTABLISHMENTS WILL HAVE ON NEIGHBORHOODS AND PUBLIC SAFETY, AS WELL AS THE ADDITIONAL BURDEN ON LAW ENFORCEMENT. WE ASK THAT YOU OPPOSE HB2740. APACtE JUNCTION . AVONDALE . BENSON . BISBEE . BOCKEYE . BUllHEAD CITY . CAMP VERDE . CAREFREE . CAS-' GRANDE . CAVE CREEK . CHANDLER . CHINO VALlEY . CLARKOALE . CUFTON COlORADO CITY . COOUDGE . COTTONWOOD . DEWEY-HUMBOLDT . DOUGLAS . DUNCAN . EAGAR . EL MIRAGE . ELOY . FlAGSTAFF. FLORENCE . FOUNTAIN HILlS . FREDONIA . GILA BEND . GILBERT GLENDALE. GLOBE .GOODYEAR . GUADALUPE. HAYDEN . HOLBROOK . HUACHOCA CITY. .IEIlOIAE . KEARNY . KINGMAN. lAKE HAVASU CITY . LITCHAELD PARK. MAMIAOTH . MARANA . MARlCCPA . MESA MIAMI . NOGALES . ORO VALlEY . PAGE. PARADISE VALlEY. PARKER. PATAGONIA. PAYSON. PEORIA . PHOENIX . PIMA . PlNETOP-lAKESIDE . PRESCOTT. PRESCOTT VALlEY. OOARTZSlTE . OOEEN CREEK SAFFORD . SAHUARITA . SAN LUIS. SCOTTSDAlE. SEDONA . SHOW LOW . SIERRA VISTA. SNOWFlAKE . SOMERTON . SOUTH TOCSON . SPRINGERVlLlE . ST. JOHNS . SUPERIOR. SURPRISE. TAYLOR. TEMPE THATCHER. TOLLESON . TOMBSTONE. TUCSON . WELlTON . WICKENBlJlG . WILlCOX . WILlIAMS. WINKELMAN. WINSLOW. YOUNGTOWN . YUMA League of Arizona ~.~ Cities AND Towns 1820 W. Washington Street . Phoenix, AZ 85007 . Phone: (602) 258.5786. Fax: (602) 253.3874 Email: league@mg.state.az.us.Website: www.azleague.org HB2381: Development Fees LEAGUE POSITION: The League is opposed to HB2381, municipal planning; fees disclosure because of the new restrictions and mandates that the bill would place on the collection and use of development fees. BACKGROUND: Development fees are assessed on new development under the principle that new growth should pay its own way and not burden existing homeowners. Cities and towns assess and use impact fees as vital growth management tools to pay for new public infrastructure required when new development occurs. ISSUE: HB2381 makes substantial changes to the development fee process which have not had an adequate time to be deliberated and drafted. The concept of the bill was first considered as a strike everything amendment in a House committee more than a month into session, was substantially amended in a Senate committee, and was amended once again on the Senate floor. Considering the bill involves roughly six pages of virtually all new statutory language, the lack of time and deliberation involved in drafting such a substantial reform package is highly problematic. Reforms of this magnitude should have been considered and developed prior to the start of session. Cities and towns are very concerned that the bill will result in unintended consequences that could be detrimental to municipalities and homebuilders alike. In addition, many of the proposed reforms do not provide adequate direction for implementation and need to be more thoroughly developed. The number of major revisions that the bill has undergone in a relatively short time period is indicative of the drafting problems that will likely result in bad public policy if the bill is enacted in its current form. We have formally offered to the homebuilders to work cooperatively over the interim to develop a reform package that will have adequate time for proper deliberation and development. We are open to exploring many of the concepts brought forward by the homebuilders such as enhancing the opportunity for the public to participate in the development fee process and further assurances that development fees will be used to provide services for new development. However, we believe that the public's best interests and quite possibly the homebuilders would be best served by the development of a reform proposal over the summer rather than the passage of HB2381 this session. APACIE JUNCTION . A\/ONDALE . BENSON . BISBEE . BUCKEYE . BULLHEAD CITY . CAMP VERDE . CAREFREE . CASA GRANOE . CAVE CREEK . CHANDLER . CHINO VALLEY . CLARKDALE . CUFTON COlORAOO CITY . COOlIOGE . COTTONWOOO . DEWEY-HUMBOLDT. OOUGlAS . DUNCAN. EAGAR. EL MIRAGE. ELOY . FLAGSTAFF. FLORENCE. FOUNTAIN HILLS. FREOONIA . GILA BEND. GILBERT GLENDALE . GlOBE . GOOOYEAR . GUADALUPE . HAYOEN . HOlBROOK . H1JACHUCA CITY. JEROME . KEARNY . KINGMAN . LAKE HAVAS\) CITY . LITCHAELO PARK . MAMMOTH . MARANA . MARICOPA. MESA MIAMI . NOGALES . ORC VALLEY . PAGE . PARAOtSE VALLEY . PARKER . PATAGONIA . PAYSON . PEORIA . PHOENIX . PIMA . PlNETOP-LAKESIOE . PRESCOTT . PRESCOTT VALLEY . ClUAR1ZSITE . QUEEN CREEK SAFFORO . SAHUARITA . SAN LUIS. SCOTTSOALE . SEOONA . SHOW lOW . SlEAFIA VISTA. SNOWFLAKE . SOMERTON . SOVTH TUCSON . SPRINGERVlLLE . ST. JOHNS . SUPERIOR. SURPRISE. TAYLOR. TEMPE THATCHER. TOLLESON . TOMBSTONE . TUCSON . WELL TON . WlCKENBURG . WILLCOX . WILLIAMS . WINKELMAN . WINSlOW . YOUNGTOWN . YUMA