2014

End of Session Report

ARIZONA PEST PROFESSIONALS ORGANIZATION

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P a g e | 2 EXECUTIVE SUMMARY

Dear AZPPO Members:

Sine Die! On April 24, 2014, the 51st Legislature adjourned sine die at 1:46 AM after 101 days in session. By rule a session can last 100 days with provisions in place for extending it. As you recall, those provisions were put to the test last year with the uncomfortably long 151-day session.

The 51st Legislature, 2nd Regular Session officially commenced January 13, 2014. A total of 1,205 bills were introduced by the legislature and of those, 276 have been signed by Governor Janice K. Brewer.

The session began as usual with the governor announcing policy priorities for the year during the State of the State address. The governor’s priorities were perhaps met with a little more attentiveness from the legislature after a rocky end to the 2013 session. As you may recall part of the Governor’s ambitious 2013 agenda meant crossing political boundaries at the expense of the most conservative within the state’s GOP.

In 2013, the governor muscled her way to pass the Medicaid expansion. After weeks of stalled budget negotiations, the Governor called a Special Legislative Session in an effort to bypass House and Senate leadership and call Medicaid to question. The move sparked rumors of a legislative coup and drove a wedge straight through the Republican caucus, dividing the moderate and conservative members.

During her final State of the State address in January, Governor Brewer focused on two priorities including a complete overhaul of the state’s defunct child protective services and a proposal to create new incentives for manufactures to set up shop in Arizona.

In December Governor Brewer formed the Child Advocate Response Examination Team or ‘CARE Team’ to provide oversight for the investigation of the 6,554 uninvestigated child abuse cases and to examine the Arizona Child Protective Services (CPS) system to identify areas of concern. Following their recommendation, Governor Brewer, through an Executive Order, abolished CPS, removed it from the Department of Economic Security and replaced it with a stand-alone Cabinet-level agency that reports directly to her. In order to make the new agency permanent, the governor also requested that the legislature pass necessary statutory changes.

Those changes were not passed and the legislature only funded $59 million of the $80 million that Governor Brewer requested for the agency. However the legislature did include language in the budget package that essentially committed to revisiting the issue, most likely in a Special Legislative Session once the CARE Team releases its next set of recommendations sometime in May.

As far as her other policy priority that issue was met with a little less resistance. The Governor signed SB1413, a bill that eliminates sales tax on electricity purchased by manufacturers and smelting facilities. Though Governor Brewer insists the incentive is pivotal in attracting new manufacturers and retaining those already operating in Arizona, it is estimated that the incentive will cost the state around $17 million.

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This year AZPPO chose to take more of a defensive posture as compared to last year’s legislative agenda. As you recall, AZPPO was the impetus in passing SB1290, the bill that provided for the permanent transfer of

Prepared by: Capitol Consulting, LLC | 818 N. 1st Street | Phoenix, AZ 85004 | www.azcapitolconsulting.com

P a g e | 3 administrative authority from the Office of Pest Management to the Arizona Department of Agriculture and made various changes to the pest management statutes. Since the statutory overhaul, the Department of Agriculture has been in the process of a rules update in order to implement the new law.

It’s typical after such a comprehensive statutory change that clean-up legislation is needed in order to clarify or make technical changes. We will have a better sense of those potential changes (if at all needed) once the rules are implemented.

Two bills were introduced this year that would have had a direct impact on AZPPO members. HB2596 introduced by Representative Michelle Ugenti (R-Scottsdale), would have allowed a homeowner to choose to have the business licensee or certified applicator complete a termite action report form. Representative Ugenti indicated that the bill was the result of her home being treated for termites and subsequently appearing in the on-line report. Rep. Ugenti believed that the online reporting impacts home values and is not necessary for anyone who is not in the process of selling their home. The bill was ultimately amended via a “strike-everything amendment,” thus eliminating the proposal, in the House Government Committee.

HB2437 (public committees; repeal; sunset) was signed by the governor on April 24, and will take effect on July 24, 2014. The bill repeals inactive statutory committees and provides sunset dates for active committees. Prior to the start of Session, legislative staff compiled a list of statutory committees that were inactive either because the committee fulfilled its statutory duty, the committee had membership vacancies or the committee had redundant duties. Initially the bill included the repeal of the Pest Management Advisory Board; however, we successfully amended the bill in the Senate Government and Environment Committee to preserve the Board.

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Included in this report are legislative proposals that AZPPO monitored and engaged-in over the course of the Session and subsequent actions. Please do not hesitate to contact me with any questions you may have on this year’s session or any of the AZPPO’s government affairs programs.

Very truly yours,

Courtney LeVinus President Capitol Consulting, LLC

Prepared by: Capitol Consulting, LLC | 818 N. 1st Street | Phoenix, AZ 85004 | www.azcapitolconsulting.com

P a g e | 4 CONTENTS

EXECUTIVE SUMMARY ...... 2 CONTENTS ...... 4 LEGISLATIVE ...... 5

ST ND 51 LEGISLATURE, 2 REGULAR SESSION ...... 5

Leadership ...... 5

Senate Members ...... 6

House of Representatives Members ...... 6

Statistics ...... 8

Session Highlights ...... 9

FY2015 STATE BUDGET ...... 9

CHAPTERED LEGISLATION ...... 10

HB2389: Transaction privilege tax changes ...... 10

HB2437: Public committees; repeal; sunset ...... 11

SB1108: Department of agriculture; fees ...... 12

SB1160: Registrar of contractors; discipline grounds ...... 12

FAILED LEGISLATION ...... 13

HB2596: Office of pest management; reports ...... 13

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P a g e | 5 LEGISLATIVE

51ST LEGISLATURE, 2ND REGULAR SESSION

LEADERSHIP

EXECUTIVE Janice K. Brewer

SENATE

PRESIDENT Senator Andy Biggs (R-Gilbert)

MAJORITY LEADER Senator John McComish (R-Phoenix)

MAJORITY WHIP Senator (R-Phoenix)

PRESIDENT PRO TEMPORE Senator (R-Hereford)

MINORITY LEADER Senator (D-Tolleson)

MINORITY WHIP Senator Steve Gallardo (D-Phoenix)

ASSISTANT MINORITY LEADER Senator (D-Yuma)

HOUSE OF REPRESENTATIVES

SPEAKER OF THE HOUSE Representative Andrew Tobin (R-Paulden)

MAJORITY LEADER: Representative (R-Sierra Vista)

MAJORITY WHIP Representative Rick Gray (R-Sun City)

SPEAKER PRO TEMPORE Representative Javon “J.D.” Mesnard (R-Chandler)

MINORITY LEADER Representative Chad Campbell (D-Phoenix)

MINORITY WHIP Representative Eric Meyer (D-Phoenix)

ASSISTANT MINORITY LEADER Representative (D-Tucson)

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SENATE MEMBERS

REPUBLICANS DEMOCRATS

Senator, District, Residence, Occupation Senator, District, Residence, Occupation , 1, Prescott, Rancher , 2, Sahuarita, Retired teacher, CPA Kelli Ward, 5, Lake Havasu City , Physician , 3, Tucson, Senator Chester Crandell, 6, Heber, Rancher Lynne Pancrazi, 4, Yuma, Teacher Al Melvin, 11, Tucson, Consultant Carlyle Begay, 7, Ganado Andy Biggs, 12, Gilbert, Attorney Barbara McGuire, 8, Kearny, School board member , 13, Yuma, Developer Steve Farley, 9, Tucson, Small business owner Gail Griffin, 14, Hereford, Real Estate Broker David Bradley, 10, Tucson, Health Care Administrator , 15, Phoenix, Homemaker Anna Tovar, 19, Tolleson, Teacher David Farnsworth, 16, Mesa, , 24, Phoenix, Social Worker Steve Yarbrough, 17, Chandler, Attorney , 26, Tempe, Mental health family counselor John McComish, 18, Ahwatukee, Senator Leah Landrum Taylor, 27, Phoenix, Business owner , 20, Phoenix, Small business owner Steve Gallardo, 29, Phoenix, Political consultant Rick Murphy, 21, Glendale, Realtor , 30, Phoenix, Business Development , 22, Sun City West, Retired Michele Reagan, 23, Scottsdale, Small business owner Bob Worsley, 25, Mesa, Small business owner Adam Driggs, 28, Phoenix, Attorney

HOUSE OF REPRESENTATIVES MEMBERS

REPUBLICANS DEMOCRATS

Representative, District, Residence, Occupation Representative, District, Residence, Occupation , 1, Prescott, Small business owner , 2, Tucson, CEO, Frontier Consulting , 1, Paulden, Insurance , 2, Sahuarita, Representative , 5, Lake Havasu City, Marine (ret.) , 3, Tucson, Program Director Doris Goodale, 5, Kingman, Small business owner Macario Saldate IV, 3, Tucson, Professor , 6, Payson, Retired Juan Carlos Escamilla, 4, San Luis, Marketing , 6, Flagstaff, Construction , 4, Yuma, Realtor , 8, Casa Grande, Small business owner , 7, St. Michaels, Attorney T.J. Shope, 8, Coolidge, Shope's IGA Supermarket , 7, Cameron, Nonprofit Ethan Orr, 9, Tucson, Executive Director , 9, Tucson, Licensed Counselor

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Adam Kwasman, 11, Oro Valley, Financial Consultant , 10, Tucson, CEO, CM Concordia Steve Smith, 11, Maricopa, Talent Agency Director Bruce Wheeler, 10, Tucson, Energy Management , 12, Gilbert, Executive Director Mark A. Cardenas, 19, Phoenix, Accountant , 12, Gilbert, Real Estate Lupe Chavira Contreras, 19, Cashion, Law , 13, Litchfield Park, Business owner , 24, Phoenix, Teacher Steve Montenegro, 13, Avondale, Representative Chad Campbell, 24, Phoenix, Consultant David M. Gowan Sr., 14, Sierra Vista, Representative , 26, Tempe, Community Voice Mail David W. Stevens, 14, Sierra Vista, Information Tech , 26, Tempe, Animal Trainer John Allen, 15, Scottsdale, Self-employed Catherine H. Miranda, 27, Phoenix, School board , 15, Cave Creek, Professor Norma A. Muñoz, 27, Phoenix, School board member Doug Coleman, 16, Apache Junction, Educator Eric Meyer, 28, Paradise Valley, Physician , 16, Mesa, Doula coordinator Lydia Hernández, 29, Phoenix, School board member , 17, Gilbert, Director Martín J. Quezada, 29, Phoenix, Attorney Javan "J.D." Mesnard, 17, Chandler, Professor , 30, Glendale, Pharmacy Tech , 18, Chandler, Executive VP Debbie McCune Davis, 30, Phoenix, Program Director Bob Robson, 18, Chandler, Insurance , 20, Phoenix, Professor , 20, Phoenix, Small business owner Rick Gray, 21, Sun City, Small business owner , 21, Peoria, Representative David Livingston, 22, Peoria, Financial Advisor , 22, Peoria, Hotel Consultant John Kavanagh, 23, Fountain Hills, Retired Michelle Ugenti, 23, Scottsdale, Realtor , 25, Mesa, Tax analyst Justin Pierce, 25, Mesa, Attorney Kate Brophy McGee, 28, Phoenix, Representative

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STATISTICS

NUMBER OF REPUBLICAN SENATE MEMBERS: 17

NUMBER OF DEMOCRATIC SENATE MEMBERS: 13

NUMBER OF REPUBLICAN HOUSE MEMBERS: 36

NUMBER OF DEMOCRATIC HOUSE MEMBERS: 24

FIRST REGULAR SESSION START DATE: January 13, 2014

FIRST REGULAR SESSION SINE DIE (END): April 24, 2014, 1:46 AM

LENGTH OF REGULAR SESSION: 101 days

BILLS INTRODUCED: 1,205

BILLS PASSED BY THE LEGISLATURE: 303 (25% of the total introduced)

BILLS SIGNED BY THE GOVERNOR: 276 (91% of the total passed by the Legislature)

BILLS VETOED BY THE GOVERNOR: 24 (8% of the total passed)

RESOLUTIONS INTRODUCED: 113

RESOLUTIONS PASSED: 34 (30% of the total introduced)

GENERAL EFFECTIVE DATE: July 24, 2014 (unless enacted with emergency clause or alternative date)

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SESSION HIGHLIGHTS

 Defeated HB2596 that would have allowed homeowners to choose whether or not a licensee or certified applicator completes a termite action report form.  Amended HB2437 to remove the provision to repeal the Pest Management Advisory Board.

FY2015 STATE BUDGET

Governor Jan Brewer signed the $9.23 billion FY2015 State Budget in April, signaling a spending increase from the $8.8 billion FY2014 budget.

The legislature did not include the entire appropriation that Governor Brewer had requested for child welfare, but they did include budget language that essentially committed the legislature (via a Special Session) to revisit more funding once the child safety reform working group completes its process. The process is expected to wrap-up in May.

In order to preserve the those necessary resources, Governor Brewer exercised her line-item veto power cutting approximately $4.7 million for law enforcement in Colorado City, certain teacher training, public technical high schools, a northern Arizona airstrip and funding for the state’s ombudsman. The ombudsman is an independent arm of the legislature that investigates allegations involving state agencies. Governor Brewer did suggest that the ombudsman could be revisited during the special session.

Initially the budget negotiations hit a roadblock with the House and Senate at odds over appropriations for several departments including the child protective services, university and district charter school funding. The two chambers reached a budget compromise after forming a conference committee consisting of members of both parties and both chambers. The deal essentially split the $35 - $54 million spending difference between the House and Senate proposals. Democrats opposed the compromise after seeking additional spending for FY2015.

FY2015 BUDGET EXPENDITURES

Expenditures FY2015 Budget Change from FY2014

 Department of Administration $32,469,600 $20,775,300  ADOA Automation Projects Fund $35,500,000 $17,100,000  AHCCCS $1,274,393,500 $(60,539,900)  Attorney General $23,464,600 $1,000,000  Commerce Authority $31,800,000 $300,000  Community Colleges $71,979,300 $2,470,600  Department of Corrections $996,912,200 $25,168,300  County Funding $7,650,500 $500,000  Department of Economic Security $791,646,600 $101,533,700  Department of Education $3,799,388,100 $178,556,900  Department of Environmental Quality $7,000,000 $7,000,000  Department of Health Services $613,163,100 $62,516,700  Judiciary $110,377,000 $536,000

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 Department of Juvenile Corrections $43,822,700 $43,822,700  State Land Department $12,515,700 $170,300  Department of Public Safety $89,321,400 $37,760,600  Public Safety Personnel Retirement System $5,000,000 $5,000,000  Department of Revenue $48,125,300 $1,100,000  School Facilities Board $189,357,800 $(3,823,600)  Office of Tourism $9,102,600 $2,000,000  Universities $766,669,000 $31,151,700  Department of Water Resources $13,326,400 $1,000,000  All Other Budgets $169,271,100 $11,106,600  Civic Center Payment $20,449,000 $20,449,000  Asset Sale/Lease-Back Debt Service $84,123,700 $3,900  Lease-Purchase/Rent $(192,500) $(192,500)  Retirement Adjustment $409,100 $409,100 **Source: Joint Legislative Budget Committee.

CHAPTERED LEGISLATION

HB2389: TRANSACTION PRIVILEGE TAX CHANGES

SPONSOR(S): Rep. Debbie Lesko (R-Peoria)

AZPPO POSITION: Support

SUMMARY: Makes changes to statutes governing transaction privilege tax (TPT) in order to implement recent TPT legislation.

Licensing

 Amends provisions so that the state administers all TPT licensing processes: o requires a person engaging or continuing in business to annually apply for a license; o stipulates a license is valid for only the calendar year in which it is issued; o requires licenses to be renewed January 1.  Maintains the current $12 TPT licensing fee and stipulates that there is no fee for license renewal.  Sets the municipal TPT licensing fee at up to $50 and renewal fee at up to $50.  Imposes a penalty of up to $25 for failure to timely renew a municipal TPT license.  Provides that a taxpayer who operates in multiple locations or under multiple names must obtain a TPT and municipal TPT license for each location.  Provides that a taxpayer who operates in multiple locations or under multiple names and files a consolidated tax return is required to pay only one municipal TPT renewal fee for each jurisdiction.  Provides that a taxpayer who operates in multiple locations or under multiple names and does not file a consolidated tax return is required to pay a license renewal fee for each location in each jurisdiction.

Contracting

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 Revises language pertaining to TPT exemption certificates required for certain contractors.  Changes the contractor exemption provision from a deduction to an exemption.

Administration

 Allows DOR to accept credit cards for all payments, not just tax payments.  Repeals A.R.S. § 42-6009, the municipal TPT refund statute, and provides procedures to address refund requests related to returns filed prior to January 1, 2015.  Allows for e-signatures on all returns, statements, and other filed tax documents regardless of whether the document complies with current electronic and digital signature statutory requirements.  Requires a taxpayer who operates in multiple locations or under multiple names to e-file tax returns.  Provides that hearings under the Model City Tax Code for non-program cities relating to liabilities established before January 1, 2015 must be heard by the municipal hearing office.  Requires DOR, as of October 1, 2014, to mail a single notice to each license holder that includes all license renewals for TPT and municipal TPT.

HB2437: PUBLIC COMMITTEES; REPEAL; SUNSET

SPONSOR(S): Rep. David Gowan (R-Sierra Vista)

AZPPO POSITION: Neutral

SUMMARY: Repeals inactive statutory committees, provides sunset dates for active committees and makes various changes to active statutory committees.

Statutory Committees; Repeal

 Repeals the following statutory committees: o State Commission on Civic Education and Civic Engagement o State Agency Fee Commission o Joint Legislative Oversight Committee on Residual Contamination of Drug Properties o Community Notifications Guidelines Committee o Probate Advisory Panel o Task Force for Retraining Disabled Military Veterans o Child Support Committee o Domestic Relations Committee o Joint Legislative Committee on Adoption Promotion o Performance Based Incentives Oversight Committee o Joint Legislative Committee on Transportation between Sonora, Mexico and Arizona o Joint Legislative Committee on Federal Mandates o Arizona Aerospace and Defense Commission o Commission on Privatization, Efficiency and Competition o Joint Legislative Committee on K-12 School District Receivership o Arizona Housing Commission

Statutory Committees; Sunset Dates

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 Provides sunset dates for the following statutory committees: o Data Governance Commission: July 1, 2020 o State Emergency Council: July 1, 2021 o School Bus Advisory Council: July 1, 2024 o Regional Planning Agency Transportation Policy Committee: July 1, 2024 o Multistate Highway Transportation Agreement Cooperating Committee: July 1, 2019 o Debt Oversight Commission: July 1, 2026 o Joint Committee on Capital Review: July 1, 2026 o Joint Legislative Audit Committee: July 1, 2018 o Legislative Government Mall Commission: July 1, 2025 o Rural Business Development Advisory Council: July 1, 2021 o Arizona Peace Officers Memorial Board: July 1, 2019 o Senior Advisory Committee: July 1, 2019 o Joint Legislative Income Tax Credit Review Committee: July 1, 2022 o Oversight Council on Driving or Operating under the Influence Abatement: July 1, 2024. o Arizona’s participation in the Education Commission of the States: July 1, 2020. o Compliance Advisory Panel: July 1, 2017 o Tobacco Revenue Use Spending and Tracking Commission: July 1, 2021 o Joint Border Security Advisory Committee: July 1, 2020

NOTES: The bill initially included the repeal of the Pest Management Advisory Board. However we successfully amended the bill in the Senate Committee of the Whole to remove this provision and thus preserving the Board.

SB1108: DEPARTMENT OF AGRICULTURE; FEES

SPONSOR(S): Sen. Don Shooter (R-Yuma)

AZPPO POSITION: No position

SUMMARY: States that notwithstanding any other law, the Director of the Arizona Department of Agriculture (AZDA), with the assistance of AZDA Advisory Council, may increase or decrease the pesticide registration fee established in statute until June 30, 2016. Requires any additional revenue generated by increasing the fee to be deposited in the Pesticide Trust Fund. Specifies that the fee may not be reduced below $100. Exempts AZDA from rulemaking requirements for the purpose of increasing or decreasing fees pursuant to this Act until July 1, 2016.

SB1160: REGISTRAR OF CONTRACTORS; DISCIPLINE GROUNDS

SPONSOR(S): Sen. Gail Griffin (R-Hereford), Sen. David Farnsworth (R-Mesa)

AZPPO POSITION: No position

SUMMARY: Requires the Registrar to temporarily suspend or permanently revoke a license upon notice by the Department of Revenue that a licensee’s tax related debt has become final and that person neglects to pay or refuses to pay the tax debt.

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FAILED LEGISLATION

HB2596: OFFICE OF PEST MANAGEMENT; REPORTS

SPONSOR(S): Rep. Michelle Ugenti (R-Scottsdale)

AZPPO POSITION: Oppose

SUMMARY: Allows a person who requests pretreatment, new-construction treatment, final grade treatment, initial corrective treatment or a wood-destroying insect inspection report to request the business licensee or certified applicator to complete a termite action report form.

NOTES: Representative Ugenti indicated that the bill was the result of her home being treated for termites and subsequently appearing in the on-line report. Rep. Ugenti believes that the online reporting impacts home values and is not necessary for anyone who is not in the process of selling their home. The bill was ultimately amended via a strike-everything amendment in the House Government Committee.

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