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HomeMy WebLinkAbout07/05/2006 Blue Sheet State Legislative Issues Update TOWN COUNCIL MEETING INFORMATION MEETING DATE: TOWN OF MARANA July 5, 2006 AGENDA ITEM: K. 1 TO: MAYOR AND COUNCIL FROM: Michael A. Reuwsaat, Town Manager SUBJECT: State Lee:islative Issues: Update 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 Issue 23. 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/06/27/2006/11 :07 AM IN THIS ISSUE The legislature Adjourns Sine Die ................. 1 Budget Update ............ 1 Small Town Revenue Resolution Included In The Budget ..... 2 league Resolution To Be Placed On The November Ballot .... 2 liquor Bill On Governor's Desk . . . . . . . . . . . 2 Eminent Domain legislation Fails. . . . . . . . . . . . . . . . . . . . . 2 Public Access Ombudsman law Enacted . . . . . . . . . . . . . . . . . . 3 Enterprise Zones Reauthorization Passes The Senate . . . . . . . . . . 3 Photo Enforcement Ban Not Voted ................... 3 League of Arizona ~C..I~ Illes AND lowns Legislative Bul/etin is published by the League of Arizona Cities and Towns. Forward your comments or suggestions to: League of Arizona Cities & Towns 1820 West Wa,hington 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. 23 June 23, 2006 THE LEGISLATURE ADJOURNS SINE DIE Late Wednesday night, the Legislature finished its work and officially adjourned the regular session. As the Governor approved virtually all of the budget provisions, it is highly unlikely that this Legislature will be called back for special session and will not likely reconvene until the next Legislature is sworn in to office in January. Representative Kyrsten Sinema remarked that it felt like she had just been through two sessions and then realized that she had actually been through two as adjournment occurred on the 164th day of session exactly twice the length of the 82-day timeline set at the beginning of session. This regular session was the fifth longest in the State's history. The number count on passed bills is still pending potential vetoes by the Governor who now has ten days from adjournment (excluding Sundays) to act on all bills remaining on her desk. The general effective date for all bills, excepting appropriations, tax and fee bills, and bills with emergency clauses, will be September 20th. BUDGET UPDATE As anticipated, the Governor signed most of the budget provisions, particularly those pertaining to the income and property tax cuts. The budget includes a 10% income tax reduction to be phased in over two years. The reduction in collections is estimated at $155 million to the State the first year and $333 million the next. This would be a permanent rate reduction of 10% to the state tax base which would also permanently reduce urban revenue sharing after the one-year effort to hold us harmless in Fiscal Year 2008-09. The hold harmless effort involves a one-year $717 million appropnatlon in lieu of a percentage based on the projected amount of revenue that we would have received in Fiscal Year 2008-09 had there been no adjustment to the tax base. After this one-year appropriation, urban revenue sharing would revert to 15% of the adjusted state tax base. Initial reports that an additional $30 million would be appropriated did not materialize. Instead, $10.5 million will be added to the Fiscal Year 2008-09 appropriation as compensation for the earlier two-year reduction of urban revenue sharing that occurred when our percentage was reduced to 14.8%. Our opposition to the temporary rather than permanent hold harmless provision and the appropriation rather than percentage adjustment have been conveyed to the Legislature and Governor and we will certainly take action to rectify these provisions next year. However, none of these changes will impact the level of urban revenue sharing that will be distributed to cities and towns the next two years as their impact will start in Fiscal Year 2008-09. Adjustments to property taxes included a resetting of the base year on which property taxes are calculated and collected from Fiscal Year 1979-80 to Fiscal Year 2005-06. This adjustment does affect the next fiscal year starting next week. In other words, for Fiscal Year 2006-07, you are prohibited from having a primary property tax levy greater than your actual Fiscal Year 2005-06 levy plus the value of new construction plus an additional 2%. Reforms also include a requirement that all future bond and special district tax elections occur as part of the November general election and also further clarifies the fiscal information that must be included in publicity pamphlets for those elections. The property tax cuts also i ncl ude a th ree-year suspension of the county education equalization rate which is a portion of county property tax revenues that are dedicated to education. The lost revenue to the State is estimated at $220 million, $251 million and $275 million over the three years. Also, the final provIsions regarding LTAF II, have been changed. Despite indications that a $16 million guarantee would be placed in the budget, no such guarantee was included. L T AF II is authorized to receive its full $18 million which is an increase from the $12 million cap that was set in earlier versions of the budget. However, L T AF II will not start receiving revenue until $37 million is received in lottery Powerball receipts which is higher than the historical $31 million threshold. SMALL TOWN REVEN U E RESOLUTION INCLUDED IN THE BU DGET The budget agreement that was passed by the Legislature and signed by the Governor includes the League resolution that increases the funding floor for Arizona's smallest cities and towns. These six municipalities, all with populations under 3,000, will split an $850,000 appropriation to supplement their state shared revenue by increasing their revenue sharing levels to that which would be received by a city of 3,000 people this next year. This appropriation is only for next year and will have to be renewed in the future to maintain this additional funding to our smallest cities and towns. LEAGUE RESOLUTION TO BE PLACED ON THE NOVEMBER BALLOT The Legislature passed HCR2001 on the last day of session with a Senate vote of 17-12. If approved by the voters in November, this ballot measure will increase the bonding capacity for public safety and transportation projects by placing these categories out of the 6% of assessed valuation debt cap and into the 20% cap. A ballot measure was sought on this issue as the adjustment to the debt restrictions will require amending the Arizona Constitution. * ACTION ALERT * LIQUOR BILL ON THE GOVERNOR'S DESK HB2621 passed both houses this week with votes of 39-18 in the House and 16-12 in the Senate. This bill is now on the Governor's desk awaiting her action. This bill allows restaurants to circumvent current liquor laws and avoid the stricter regulations of a bar license. Establishments that receive one of these new hybrid licenses will be permitted to sell as much as 70% alcohol while maintaining their restaurant status. This permits them to operate within 300 ft. of churches and schools, an area bars are currently restricted from because of the impact that high alcohol sales have on those institutions. The final version was advertised by the proponents as a "pilot project" as the number of waivers that can be granted by the Liquor Department is limited to 15 a year for the next two years. The establishments created in this bill will have negative impacts on public safety, especially in the neighborhoods that surround them. Action Requested: Please contact the Governor and request that she veto this legislation. EMINENT DOMAIN LEGISLATION FAILS On the last day of session, another effort to pass eminent domain and regulatory takings legislation was pushed by Senator Chuck Gray. This time, a special Senate Judiciary Committee hearing was called to amend HCR 2002 with language very similar to other legislation that had been previously defeated. If passed, the provisions of HCR 2002 would have been placed on the November ballot for consideration by voters statewide. The legislation included regulatory takings language that would have enabled a property owner to sue for compensation if they alleged that a land use law, such as a zoning change, lowered the value of their property. The resolution also included drastic provisions regarding the use of eminent domain that would have severely impacted the ability of cities and towns to address slum and blight in their communities. Because of the sections of law that were proposed to be amended, questions regarding impacts to "traditional" condemnation authority such as road and sewer construction were also a concern. After the Judiciary Committee hearing, the resolution passed LEGISLATIVE BULLETIN PAGE 2 June23,2006 the Senate on a 17-12 vote despite the fact that Senators and the public had virtually no time to review this new language. Calmer heads prevailed in the House, which opted not to consider HeR 2002 despite pressure from the resolution supporters. Efforts to block a vote in the House were led by Representatives Jennifer Burns and John Nelson who have played a large role all session long in crafting and pursuing consideration of the compromise reform package that the League and other stakeholders helped develop. Representatives Phil Lopes, Tom Prezelski and Meg Burton Cahill were also instrumental in keeping the minority caucus solidly in opposition to this resolution in the House. Despite over twenty bills being introduced on this issue and at least five that remained technically "alive" up to the last day of session, only one bill passed, HB2675, which was vetoed by the Governor. As a result ofthat veto, no eminent domain legislation was enacted this year. However, the overwhel m i ng majority of legislators want to see reforms and the Governor indicated in her veto message that she wants to see a more reasoned reform bill reach her desk next year. We will continue to pursue the passage of our compromise reform package as an alternative to the radical bills that were considered this session. Also, a ballot initiative with regulatory takings and eminent domain provisions is currently being pursued and efforts by the proponents to secure enough signatures to place the measure on the ballot will definitely pick up now that their efforts to reach the ballot through legislative referral have been unsuccessful. We will keep you informed of any new developments, including updates on the initiative effort, as they occur. PUBLIC ACCESS OMBUDSMAN LAW ENACTED The Governor signed SB 1407, sponsored by Senator Robert Burns, into law this week. This bill expands the charge of the Office of Ombudsman-Citizen Aide. It allows the Office to enter any public agency (which by definition includes cities and towns) to inspect records without notice. In addition, it allows the Office access to ALL agency records with several exceptions. We are concerned that the list of exceptions is likely inadequate but does include documents that are sealed court records, active criminal investigation records, attorney-client records, tax records and health records that are related to a patient's right to privacy. There are many concerns that the League and individual cities have with this legislation. For example, there is no exception in the law for documents that are exempted from public viewing by federal law. Cities and towns could face federal civil penalties for releasing these documents as required by state law. In addition, the Office is able to subpoena documents if the agency does not comply with the request to produce the document within a 'reasonable' period of time as determined by the Ombudsman. This subpoena power is inappropriate. Currently, city officials, primarily the attorneys and clerks, determine if a document is releasable and if redactions are necessary. The requestor currently has recourse through the court system if they disagree with the city's decision. A state agency should not have such access to city and town documents. We will continue to analyze this legislation and pursue a repeal or revisions next session. ENTERPRISE ZONES REAUTHORIZATION PASSES THE SENATE SB1074, a League resolution that reauthorizes the use of enterprise zones for another five years, passed its final Senate consideration on Wednesday with a 19-6 vote and has been sent on to the Governor. An Enterprise Zone designation, which involves areas with high unemployment 'and high poverty rates, enables cities and towns to provide tax incentives to businesses to encourage development and employment opportunities within these areas. PHOTO ENFORCEMENT BAN NOT VOTED SBl146, Senator Thayer Verschoor's bill that banned the use of photo enforcement technology on controlled access highways, was never brought to a vote in the House during the final days of session. This bill was one of 13 this year that attacked the use of photo enforcement. Most of these bills died in committee or were never brought to a vote. The only photo enforcement bill that was passed by the Legislature and was signed by the Governor is HB2174. This bill creates signage regulations for photo enforcement areas. These new requirements apply all photo enforcement areas and serve to warn drivers that the technology is being used. Rep. Bob Robson, the bill's sponsor, worked with the League and several cities to remove the most egregious requirements in the bill. LEGISLATIVE BULLETIN PAGE 3 June23,2006