|2012 Legislative Summary|
2012 Legislative Summary
The 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.
After 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:
ASBA 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 session.
Once 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.
During 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
The 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
Summary: Establishes 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 2272: Public Records Exemptions, Research Data
Sponsor: Rep. Vic Williams, LD 26
Summary: 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
Summary: 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
Summary: 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
Summary: 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.
Result: This 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
Summary: 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 new employees.
Result: 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
Summary: 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 years.
Result: 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
Summary: 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.
Result: This 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 and parts.
SCR 1012: Personal Property Tax Exemption Amount
Sponsor: Sen. Andy Biggs, LD 22
Summary: The 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 annually.
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.
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