HB2468 - 502R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, Arizona Revised Statutes, is amended by adding chapter 51, to read:

CHAPTER 51

LIMITATIONS ON ENTRY REGULATIONS AND PUBLIC SERVICE RESTRICTIONS

ARTICLE 1. IN GENERAL

START_STATUTE41-5101. Definitions

In this chapter, unless the context otherwise requires:

1. "Agency" includes this state, all units of state government and all units of government and shall not exclude any entity that is established under the constitution or laws of this state or established by any entity that was itself established under the constitution or laws of this state.

2. "Entry regulation" includes any law, ordinance, regulation, rule, policy, fee, condition, test, permit, administrative practice or other provision relating to a market or the opportunity to engage in any occupation or profession.

3. "Public service restriction" includes any law, ordinance, regulation, rule, policy, fee, condition, test, permit, administrative practice or other provision the effect of which is to exclude or limit the use of private firms from providing public services under the supervision of agencies with or without the support of public subsidy or user fees.

4. "Subsidy" includes taxes, grants, user fees or any other monies received by or on behalf of an agency.

5. "Welfare" means protection of members of the public against fraud or harm. Welfare does not mean the protection of existing businesses or agencies, whether publicly or privately owned, against competition. END_STATUTE

START_STATUTE41-5102. Limitation on entry regulations

An agency shall limit and draft all entry regulations with respect to businesses and professions to those demonstrably necessary to fulfill legitimate public health, safety or welfare objectives. END_STATUTE

START_STATUTE41-5103. Limitation on public service restrictions

An agency shall limit and draft all public service restrictions to those demonstrably necessary to fulfill legitimate public health, safety or welfare objectives. END_STATUTE

START_STATUTE41-5104. Elimination of entry regulations; report

A. Within one year after the effective date of this chapter, every agency shall conduct a comprehensive review of all entry regulations within their jurisdiction. For each entry regulation an agency shall articulate:

1. With specificity the public health, safety or welfare objective served by the regulation.

2. The reason the regulation is necessary to serve the specified objective.

B. To the extent the agency finds a regulation does not meet the standard prescribed in subsection A of this section, the agency shall:

1. Repeal the entry regulation or modify the entry regulation to conform to the standard prescribed in subsection A of this section.

2. Recommend to the legislature actions necessary to repeal or modify the entry regulation to conform to the standard of subsection A of this section if repeal or modification of the entry regulation is not within the agency's authority.

C. Within fifteen months after the effective date of this chapter, each agency shall report to the legislature on all actions taken to conform to this section. END_STATUTE

START_STATUTE41-5105. Elimination of public service restrictions; report

A. Within one year after the effective date of this chapter, every agency shall establish, and within eighteen months following the effective date of this chapter implement, a routine private participation process with respect to the public services under the agency's jurisdiction. The process shall require that an agency:

1. Allow a private company to perform public services that can be produced without a subsidy. An agency may establish reasonable requirements with respect to notice of entry and exit.

2. Allow a private company to periodically and fairly compete for contracts to perform public services that cannot be produced without a subsidy.

3. Not preclude a private company from commercially producing any service under the jurisdiction of the agency that is not included in paragraph 1 or 2 of this subsection.

B. The competitive process required by subsection A, paragraph 2 of this section shall be designed to allow the maximum extent of participation by private firms of all sizes and shall:

1. Rely on multiple contracts wherever feasible.

2. Not include any provisions or arrangements that have the effect of limiting competition or precluding participation, except as necessary to achieve the standard prescribed in section 41‑5103.

C. Every agency may establish reasonable standards of customer service with respect to public services under subsection A, paragraphs 1 and 2 of this section.

D. Every agency shall recommend to the legislature actions necessary to repeal or modify any public service restriction to conform to the standard prescribed in section 41‑5103 if repeal or modification of the public service restriction is not within the agency's authority.

E. Within fifteen months after the effective date of this chapter, each agency shall report to the legislature on all actions taken to conform to this section. END_STATUTE

START_STATUTE41-5106. Administrative proceedings

A. Any person may petition an agency to repeal or modify an entry regulation into a business or profession within the agency's jurisdiction.

B. Within ninety days after a petition is filed pursuant to subsection A of this section, the agency shall either repeal the entry regulation, modify the regulation to achieve the standard prescribed in section 41‑5102 or state the basis on which it concludes the regulation conforms with the standard prescribed in section 41‑5102.

C. Any person may petition an agency to repeal or modify a public service restriction within the agency's jurisdiction.

D. Within ninety days after a petition is filed pursuant to subsection C of this section, the agency shall either establish, and within nine months implement, the requirements of section 41‑5102 or state the basis on which the agency concludes the public service restriction conforms to the standard prescribed in section 41‑5103. END_STATUTE

START_STATUTE41-5107. Prohibition of restrictive provisions

A. Notwithstanding any other of law, an agency shall not award or extend any franchise that has the effect of conflicting with section 41‑5102 or 41‑5103.

B. Notwithstanding any other law, an agency shall not execute or extend any contract provision, including any labor contract provision, that has the effect of conflicting with section 41‑5102 or 41‑5103.

C. This section does not require the cancellation of any contract in effect as of January 1 of the year of the effective date of this chapter if the contract expires no later than twenty‑four months after the effective date of this chapter. END_STATUTE

START_STATUTE41-5108. Enforcement

A. After ninety days following a petition filed pursuant to section 41‑5106 that has not been favorably acted on by the agency, the person filing a petition challenging an entry regulation or public service restriction may file an action in the superior court.

B. With respect to the challenge of an entry regulation, the plaintiff prevails if the court finds by a preponderance of evidence that the challenged entry regulation on its face or in its effect burdens the creation of a business, the entry of a business into a particular market or the entry into a profession or occupation and either:

1. The challenged entry regulation is not demonstrably necessary and drafted to fulfill legitimate public health, safety or welfare objectives.

2. Where the challenged entry regulation is necessary to the legitimate public health, safety or welfare objectives, the objectives can be effectively served by regulations less burdensome to economic opportunity.

C. With respect to the challenge of a public service restriction, the plaintiff prevails if the court finds by a preponderance of the evidence that on its face or in its effect the public service restriction limits participation by private companies in the provision of public services or other services under the jurisdiction of the agency and either:

1. The challenged public service restriction is not demonstrably necessary and drafted to fulfill legitimate public health, safety or welfare objectives.

2. Where the challenged public service restriction is necessary to fulfill legitimate public health, safety or welfare objectives, the objectives can be effectively served by restrictions that allow greater private participation.

D. On a finding for the plaintiff, the court shall enjoin further enforcement of the challenged entry regulation or public service restriction. The court shall award reasonable attorney fees and costs to the plaintiff. END_STATUTE