ASBA's 2012 Legislative Summary
Wednesday, May 30, 2012
(Click here to download pdf version)
Arizona Small Business Association (ASBA) has evolved and grown in size
to become the largest trade association in Arizona representing 11,000+
member businesses. These member businesses employ over half a million
people and are located across Arizona in all 15 counties and 30
Legislative Districts. Impressive growth in recent years was the result
of ASBA’s proactive efforts to adapt to the changing economic climate
and understanding the needs of Arizona small businesses. One the biggest
needs identified was stronger representation and increased advocacy for
small businesses at the state level to make Arizona a more business
friendly state. ASBA strongly believes that what is good for Arizona
small businesses is good for Arizona. We
have all heard the clichés, "There is power in numbers” and "With
strength comes responsibility.” ASBA has a responsibility to its members
to protect their ability to start and run a profitable small business.
Because of our size, we also have the clout to shape public policy in
Arizona for the betterment of business and are committed to doing so.
ASBA represents small businesses across every industry cluster,
geographic area and political spectrum for the benefit of all Arizonans.
A stronger Arizona economy will lead to more jobs, wealth creation and
improved quality of life for citizens. Local governments and the state
of Arizona will benefit from increased tax revenues created from
economic development efforts that fund education, roads and other
infrastructure projects that we all benefit from.
a comprehensive study of Arizona small businesses identifying their
biggest stress points, the following five areas became the focus of
ASBA’s 2012 Legislative Priorities:
- Economic Development
- Health Care
has a Public Policy committee of dedicated volunteer members and staff
that are charged with conducting research, surveying the membership,
developing its legislative priorities, tracking bills and taking action
to influence the passage or defeat of bills. The Public Policy Committee
conducts its research and does its due diligence when the Legislature
is out of session and also uses this time to meet one-on-one with
Legislators. This allows ASBA the opportunity to develop a rapport with
Legislators and educate them on who ASBA is, who it represents and the
priorities that it will advocate for in the upcoming legislative
the Legislature is in session, the Public Policy Committee is focused
on evaluating bills that are introduced and determines the potential
impact it has on Arizona small businesses. Bills that are directly
related to ASBA’s legislative priorities, and are found to widely impact
and touch businesses throughout the state, are then selected to be
tracked. In addition to full-time staff that works on public policy,
ASBA maintains a contracted Lobbyist who can be found each day at the
Legislature engaging elected officials and working with other Lobbyists
on bills on which we have a common interest.
the 2012 Legislative Session, ASBA evaluated each bill that was
introduced into the Legislature. There were a total of 78 bills that
ASBA identified and tracked the progress of throughout the session: 59
from the House and 19 from the Senate. Of those 78 bills tracked, 13
became priority bills. Priority bills are identified as the most
critical to advancing ASBA’s legislative agenda or viewed as the biggest
threats. These are the bills ASBA is willing to champion and expend the
necessary resources and political capital to defeat or sign into law.
Arizona’s Legislative Process
lawmaking process in Arizona is similar to that of the U.S. Congress
and most other states which involves four major stages: introduction,
committee action, floor action and enrollment.
bill can be introduced by a Legislator or a group of Legislators after
being written in proper form as determined by the Legislative Council.
The bill is assigned a number and referred to the appropriate standing
committees by the Speaker of the House for its First Read. Committees
then consider the bill and may hold public hearings, receive expert
testimony and statements from citizens and groups such as ASBA. The
Committee on Rules determines if the bill is constitutional and in
proper form. Committees can pass, amend or hold a bill. If passed by all
committees the bill was referred to, the Committee of the Whole (COW)
acting as one committee can debate, amend, hold or pass a bill. The
Third Reading is held when Roll Call is taken and every member of the
House that is present must vote. If passed by the House, the bill then
moves on to the Senate.
in the Senate a bill goes through a similar process as it did in the
House. The Senate can pass the bill in identical form or amend it by
adding or deleting content. If passed by the Senate in identical form,
the bill is sent to the Governor. An amended bill by the Senate is sent
back to the House for those amendments to be considered. If the House
accepts the Senate amendments, the bill is then sent by the House to the
Governor. If the House rejects the amendments from the Senate, the bill
can be sent to a Conference Committee where both houses have
representation and can adopt a compromise. If a compromise is reached on
a bill, a report is sent back to each House for adoption and Final
Passage. The bill is then sent to the Governor.
Governor can sign a bill into law or veto it. If no action is taken by
the Governor after five days (or ten days after the Legislature
adjourns), the bill becomes law. The Legislature can override the
Governor’s veto with a two-thirds vote after a bill is returned by the
Governor stating his/her reasons for the veto.
2012 Top Priority BillsHB 2123: Transaction Privilege Tax Reform Committee
Sponsor: Rep. Steve Court, LD 18
a 13-member Committee to study, make recommendations and propose
legislation to revise Arizona’s tax code to reflect a 21st century
economy. Our economy used to be focused on agriculture and
manufacturing; today services are the dominant economic engine. This
committee is responsible for making proposals to reflect the evolving
economy. The Committee must submit a report to the Governor and the
Legislature by October 31, 2012.
Result: HB 2123 passed out of the House with a 58-0 vote and the Senate with a 28-0 vote and was signed into Law by the Governor. HB 2150: Unemployment Insurance; Independent Contractors; Appeals
Sponsor: Rep. Tom Forese, LD 21
Summary: Gives employers more tools and somewhat more time to protest the awarding of unemployment benefits to a discharged employee.
Result: HB 2150 passed out of the House with a 40-20 vote and Senate with a 20-9 vote and was signed into Law by the Governor.
HB 2272: Public Records Exemptions, Research Data
Sponsor: Rep. Vic Williams, LD 26
The exemption from public records laws for certain state university
records is expanded to include information or intellectual property that
is developed by persons employed by a university, independent
contractors working with a university or third parties that are
collaborating with a university. This change reflects the fact that a
great deal of work done in university facilities is pursuant to
public-private partnerships designed to produce new products.
Result: HB 22732 passed out of the House with a 59-0 vote and Senate with a 28-0 vote and was signed into Law by the Governor.
HB 2503: Exemption from Punitive Damages
Sponsor: Rep. Kimberly Yee, LD 10
Manufacture's and sellers of products that cause personal injuries can
be assessed punitive damages if the product causing the injury complied
with a comprehensive government standard. The simplest examples are
drugs; if the FDA says a pill is safe for a particular condition. The
pill is manufactured in accordance with FDA rules and is prescribed for
that condition. No punitive damages can be awarded if the pill
subsequently causes injury. Such a measure will improve Arizona’s
ability to further compete with other states that have already enacted
similar public policy that shields manufacture's from punitive damage
claims. Injured persons may receive compensatory damages for their
injuries. Compensatory damages are actual costs.
Result: HB 2503 passed out of the House with a 54-0 Vote and Senate with a 19-10 vote and was signed into Law by the Governor.
HB 2466: Local Sales Tax; Payments; DOR
Sponsor: Rep. Rick Gray, LD 9
This bill directs the A rizona Department of Revenue to create an
online system to receive Transaction Privilege Tax (TPT) Payments. The
online portal will include payment capabilities to the state, as well as
all Arizona cities and towns. Taxpayers may be charged a fee to use the
online portal. The system must be fully operational by January 1, 2015.
Result: HB 2466 passed out of the House with a 60-0 vote and Senate with a 26-0 vote and was signed into Law by the Governor.
HB 2680: Procurement; AZ Bidder; Preference
Sponsor: Rep. Chad Campbell, LD 14
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.
bill made little progress in the Legislature. There are issues about
defining exactly what are the requirements to be an "Arizona” bidder.
The Legislature is also studying how often RFPs result in identical
price bids. Overall, there is concern that this bill is a good idea that
is challenging to implement.
HB 2705: Small Business Employment; Tax Rate
Sponsor: Rep. Chad Campbell, LD 14
Owners of small businesses located in Arizona before July 2017 are
eligible for income tax rate reductions for net increases in "qualified
employment positions" (defined). To qualify, the owner must report and
certify specified information to the Department of Revenue and the AZ
Commerce Authority. Beginning in tax year 2013, reduced income tax rates
for qualifying small businesses are specified, based on the number of
This bill made little progress in the Legislature. There are issues
about defining exactly what are the requirements to be a "small
business” and what is an appropriate "qualified employment position.”
Again, there is concern that this bill is a good idea that is
challenging to implement.
HB 2815: Employment; Incentives; Regulatory Tax Credit
Sponsor: Rep. J.D. Mesnard, LD 21
In tax years 2012 through 2019, the bill establishes income tax credits
for expanding or locating new jobs in an Arizona facility on or after
July 1, 2012. As with most tax bills, there is a very complicated
formula for qualifying for these tax breaks. Also, the expiration date
for renewable energy tax credits is extended five years, to through tax
year 2019. Additionally, the list of amounts subtracted from Arizona
gross income for individual and corporate income tax purposes is
expanded to include net long-term capital gain included in federal
adjusted gross income for the taxable year that is derived from an
investment in a capital asset acquired after December 31, 2011, at a
rate of 10 percent of net capital gain in tax year 2013, 20 percent of
net capital gain in tax year 2014, and 25 percent in tax year 2015 and
after. And, the bill increases the exemption amount for the business
personal property tax. Corporations may carryover net operating losses
arising in tax years beginning with 2012 for 20 years, increased from 5
HB 2815 passed out of the House after one amendment with a 39-16 vote
and Senate after six amendments with a 19-9 vote; the House concurred in
Senate amendments and passed on the Final Reading with a 36-16 vote and
it was signed into Law by the Governor.
SB 1345: Health Insurance; Exemption
Sponsor: Sen. Al Melvin, LD 26
For the purpose of health insurance regulations, contracts entered into
by an employer or group with health care professionals or medical
facilities to provide pricing for health care services are not insurance
unless the employer or group guarantees payment or directly pays a
portion of the costs.
bill, along with many other health-related bills, was held pending the
outcome of the U.S. Supreme Court’s review of "Obamacare". Once the
scope and limits of the vast changes in healthcare law are clear, we can
expect many bills in the Arizona legislature to address various pieces
SCR 1012: Personal Property Tax Exemption Amount
Sponsor: Sen. Andy Biggs, LD 22
2012 general election ballot is to carry the question of whether to
amend the state Constitution to provide a different method to calculate
how much personal property is exempt from personal property tax
beginning in tax year 2013. 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 2013. For personal property initially acquired
during or after tax year 2013, 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
Result: SCR 1012 passed out of the Senate with a 30-0 vote and the House with a 51-0 vote and was sent to the Secretary of State for placement on the 2012 General Election ballot.