ASBA's 2013 Legislative Summary
Monday, June 24, 2013
Posted by: Jerry Bustamante
Click here to download a printable copy.
The Voice and Choice of Arizona Small Businesses
Arizona small businesses continue to lead the charge in our state’s economic recovery, while creating much needed jobs and investing in our communities. The entrepreneurial spirit is alive and unyielding in Arizona, and it thrives across our state where it manifests itself in every business sector. Arizona small businesses continue to fight for survival by producing and better serving their customers, while taking care of their employees and being good corporate stewards of their local community. The Arizona Small Business Association (ASBA) applauds the courage of our Arizona entrepreneurs and small business owners. ASBA exists to serve them and is pleased to play a supporting role in their success.
ASBA has evolved and grown in size to become the largest trade association in Arizona representing 11,000+ member businesses. Our member businesses employ over half a million people, are located across Arizona in all 15 counties and all 30 legislative districts, and represent every industry cluster and political affiliation. ASBA continues to increase its role and influence at the Arizona Legislature by advocating for Arizona’s small business community. As an independent, non-partisan business organization that supports free enterprise and entrepreneurship by advocating for sound public policy, ASBA has become the Voice and Choice of Arizona Small Businesses.
Clarity and a strong sense of purpose
Like any other business, ASBA must be resourceful and never lose its perspective, as it cannot be everything to everyone. Having clarity and a strong sense of purpose allows us to focus our efforts and maximize our resources to achieve the highest results possible in our public policy endeavors. ASBA focuses its public policy efforts primarily at the state level, but also gets involved on some federal issues that directly impact small business, such as Internet taxation. Comprehensive studies, member surveys and constant feedback from members allows us to remain focused on the greatest opportunities to improve our business climate and to understand the biggest stress points from which Arizona small businesses need relief. These stress points and opportunities are what our public policy efforts are focused on, which are:
- Economic Development
- Health Care
2013 Legislative Summary
With the sound of the gavel, Arizona’s 51st Legislature – 1st Regular Session began on January 14, 2013 with opening day ceremonies, protestors outside the Capitol and Governor Brewer delivering her State of the State speech to members of the legislature. The stage was set for this year’s legislative session when Governor Brewer announced her plans for Arizona to participate in the expansion of Medicaid, making her the third Republican Governor to agree to one of the key components of the Affordable Care Act, and that quickly became the divisive issue of the year. With its fair share of political maneuvering and leadership’s eroding control in each chamber, the legislature spent 151 days in session, passed 282 bills out of 1,158 posted, passed an $8.8b fiscal budget that includes Medicaid expansion and sine die (adjourned the assembly) on June 13, 2013. Despite an eventful session that delivered its share of drama and unproductive stretches of inactivity, there are a number of important policy issues that ASBA and its members can claim victory over. ASBA tracked 65 bills during the session, 8 of which were Priority Bills. The following were ASBA’s 2013 Priority Bills:
HB 2111: Transaction Privilege Tax Change
Sponsor: Rep. Debbie Lesko, LD 21
Summary: This is the Transaction Privilege Tax (TPT) simplification bill that intends to significantly reform how sales taxes are collected in Arizona. The intent of the bill is to provide Arizona businesses with, and return Arizona to, a single organization that manages all tax and audit activities. The Arizona Department of Revenue would be charged with creating an online portal to provide a single location to get a TPT permit, file TPT returns and make TPT payments for all jurisdictions in the state.
Result: After much debate and compromise, HB 2111 passed out of the House with a 58-1 vote, passed out of the Senate with at 29-0 vote on the legislature’s final day and was signed into law by the Governor.
HB 2147: Unemployment Benefits; Proof; Eligibility
Sponsor: Rep. Warren Petersen, LD 12
Summary: This bill is the latest effort to reform how unemployment benefits are delivered in Arizona and attempts to level the playing field where businesses have been at a disadvantage. This bill provides much needed relief to Arizona businesses by shifting the burden of proof on an applicant who resigned their employment but claims they were fired. Unemployment insurance applicants, rather than the employer, will have to demonstrate that they involuntarily left employment.
Result: HB 2147 passed out of the House with a 34-24 vote, passed out of the Senate with a 17-12 vote and was signed into law by the Governor.
HB 2324: TPT Exemption; Leases; Affiliated Companies
(Municipal Tax Code; Leases)
Sponsor: Rep. Eddie Farnsworth, LD 12
Summary: This bill exempts commercial leases from TPT tax when the owner of the business and the building being leased is one in the same. 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. Cities that do collect such taxes may continue to require payment until October of 2013.
Result: HB 2324 passed out of the House with a 58-0 vote, passed out of the Senate with a 29-0 vote and was signed into law by the Governor.
HB 2336: Taxation; Retail Classification; Cash Equivalents
Sponsor: Rep. Tom Forese, LD 17
Summary: This bill exempts a number of items referred to as "cash equivalents” purchased in advanced in a dollar value denomination from retail TPT tax. These cash equivalents are gift cards, vouchers, money orders and traveler’s checks. No TPT is paid to buy a gift card, but TPT is paid when a gift card is used to purchase goods.
Result: HB 2336 passed out of the House with a 59-0 vote, passed out of the Senate with a 29-0 vote and was signed into law by the Governor.
HB 2599: Procurement Code; Amendments
Sponsor: Rep. Justin Pierce, LD 25
Summary: This bill amends Arizona’s procurement code to more closely scrutinize state employees involved in purchasing decisions who move back and forth between government and private sector jobs. The bill also makes technical changes in how the state selects the winner of an RFP, and its overall intent is for government to operate more like the private sector.
Result: HB 2599 passed out of the House with a 59-0 vote, passed out of the Senate with a 24-0 vote and was signed into law by the Governor.
SB 1168: Internal Revenue Code Conformity
Sponsor: Steve Yarbrough, LD 17
Summary: This bill makes changes to Arizona’s income tax laws to ensure that they conform to the federal IRS code in effect as of January 1, 2013.
Result: SB 1168 passed out of the Senate with a 28-0 vote, passed out of the House with a 58-0 vote and was signed into law by the Governor.
SB 1169: Prop 117, Conformity
Sponsor: Steve Yarbrough, LD 17
Summary: This bill makes various changes to the Arizona revised statutes in order to conform to Proposition 117 (property tax assessed valuation; limitation) which was passed by Arizona voters during the 2012 general election. Proposition 117 had nothing to do with the tax rate but caps at 5% the maximum increase in property value that taxable real property can grow in a certain year.
Result: SB 1169 passed out of the Senate with a 28-0 vote, passed out of the House with a 58-0 vote and was signed into law by the Governor.
SB 1233: Limited Liability Companies; Ownership Interests
Sponsor: Senator Adam Driggs, LD 28
Summary: We refer to this bill as the estate planning bill. This bill amends the Limited Liability Company Act by adding a new provision that governs members as it relates to forms of ownership. 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.
Result: SB 1233 passed out of the Senate with a 28-0 vote, passed out of the House with a 56-0 vote and was signed into law by the Governor.
Bills signed into law such as HB 2147 and 2324 are excellent examples of good public policy that make Arizona more business friendly and provide relief to existing businesses. More often than not, the passages of such bills fly under the radar and receive little media attention but collectively contribute to improving Arizona’s business climate. Then there are bills such as HB 2111 that make a significant contribution that completely changes the landscape in which businesses operate. HB 2111 will provide a much needed overhaul to an over burdensome tax system, will create a better economic development climate and will benefit Arizona’s businesses for decades to come. ASBA is proud to have been part of, and have taken a leadership role in, the coalition of business groups that fought to reform TPT and bring much needed relief to Arizona businesses.