ARIZONA HOUSE OF REPRESENTATIVES
Forty-ninth Legislature – First Regular Session
Minutes of Meeting
House Hearing Room 5 -- 9:00 a.m.
Chairman Reagan called the meeting to order at 9:08 a.m. and attendance was noted by the secretary.
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Ms. Cajero Bedford |
Mr. Konopnicki |
Mr. Hendrix, Vice-Chairman |
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Mr. Campbell CH |
Mr. Meza |
Ms. Reagan, Chairman |
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Mr. Crandall |
Mr. Pratt |
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None |
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HB2047 – DPA S/E (7-0-0-1) |
HB2308 – DP (7-0-0-1) |
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HB2080 – DPA S/E (6-2-0-0) |
HB2468 - HELD |
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HB2087 – DPA S/E (7-1-0-0) |
HB2545 – DPA S/E (5-0-0-3) |
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HB2198 – DPA (6-2-0-0) |
HB2547 - HELD |
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HB2247 – DP (6-0-0-2) |
HB2595 – DP (4-2-0-2) |
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HB2302 – DPA S/E (6-0-0-2) |
HB2611 – DP (4-2-0-2) |
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HB2304 – DPA S/E (6-1-0-1) |
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CONSIDERATION OF BILLS
HB2308 - residential contractors' recovery fund – DO PASS
Vice-Chairman Hendrix moved that HB2308 do pass.
Daniel Plumhoff, House Assistant Research Analyst, explained that HB2308 allows the Registrar of Contractors to allocate fourteen percent of prior fiscal year revenues deposited into the Residential Contractor’s Recovery Fund for operational and administrative purposes (Attachment 1).
Vice-Chairman Hendrix, Sponsor, explained what this bill will change in the funding process of the Recovery Fund.
Tyler Palmer, Legislative Liaison, Registrar of Contractors, testified as neutral on HB2308, stating that there is 50 percent less money than last year, but contractors are continuing to pay into the fund with no benefits.
Mr. Crandall inquired about a control to terminate this process when revenues return to normal. Mr. Palmer replied that this does tie the operation to the fund and if revenue goes up that would mean more construction which could mean a greater need for the fund dollars.
Vice-Chairman Hendrix added that he believes that fourteen percent should still be a valid number in the future.
Scot Mussi, Home Builders Association of Central Arizona, stated his neutrality on this legislation, adding that he has concerns about the administrative costs (which have doubled) getting out of sync with the fund activity; he added that this leads to concerns about solvency.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2308 but did not speak:
Farrell Quinlan, Arizona Landscape Contractors Association
David Jones, President/CEO, Arizona Contractors Association
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2308 but did not speak:
Courtney Gilstrap Levinus, Arizona Multihousing Association
Bryan Ginter, representing self
Question was called on the motion that HB2308 do pass. The motion carried by a roll call vote of 7-0-0-1 (Attachment 2).
HB2047 - workers' compensation; technical correction – DO PASS AMENDED S/E
S/E: housing finance authority; interim finance
Vice-Chairman Hendrix moved that HB2047 do pass.
Vice-Chairman Hendrix moved that the Reagan six-page strike-everything amendment dated 2/26/09 (Attachment 3) be adopted.
Diana O’Dell, House Research Analyst, explained that the strike-everything amendment to HB2047 permits the Arizona Housing Finance Authority to offer interim financing for purchasers of manufactured homes or single family residences (Attachment 4).
Scot Butler, Attorney, Arizona Housing Association, stated his support for the strike-everything amendment which will provide interim financing by specialty lenders.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2047 but did not speak:
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2047 but did not speak:
Kristina Fretwell, Legislative Liaison, Arizona Housing Finance Authority
Question was called on the motion that the Reagan six-page strike-everything amendment dated 2/26/09 (Attachment 3) be adopted. The motion carried.
Vice-Chairman Hendrix moved that HB2047 as amended do pass. The motion carried by a roll call vote of 7-0-0-1 (Attachment 5).
HB2080 - contractors; payment – DO PASS AMENDED S/E
S/E: same subject
Vice-Chairman Hendrix moved that HB2080 do pass.
Vice-Chairman Hendrix moved that the Hendrix seventeen-page strike-everything amendment dated 3/2/09 (Attachment 6) be adopted.
Diana O’Dell, House Research Analyst, explained that the strike-everything amendment to HB2080 establishes requirements for payment of work done by contractors as well as stipulations regarding withholding payment (Attachment 7).
Chairman Reagan asked Vice-Chairman Hendrix to explain the amendment, and she reminded Members that testimony was heard previously on this bill.
Vice-Chairman Hendrix explained that his strike-everything amendment resolves the Stonecreek lawsuit problem which was discussed previously, and he stated that both bonding and retention provide duplicate security for completion of a job. He pondered if the ten percent retention collected from the contractors is too high. He discussed final completion and when retention should be paid. He added that, after much work with stakeholders, he is satisfied that this amendment is the best solution in a process where owners have control and do not want to give it up.
Representative David Shapira, District 17, stated his support for the legislation, adding that it appears to be a very fair resolution which will also be stimulative in that it will help small subcontractors by leveling the playing field for them and for big owners and for contractors.
Jason Bagley, Government Affairs Manager, Intel Corporation, stated his opposition to the legislation, identifying two areas of concern. The first is the needed technical correction to the Stonecreek fix and the second is the proposed changes that dramatically alter how project owners approach and manage construction projects and their associated risk. He stated that Intel believes that these two issues are distinct and should be addressed separately. In response to a statement from Mr. Crandall, Mr. Bagley stated that Intel has a huge investment in Arizona but cannot abide the constraints posed by this legislation.
Yvonne Hunter, Pinnacle West Capital Corp/APS/SunCor, explained her opposition to this legislation’s strike-everything amendment which blends two remedies, bond and retention. She added that this bill is anti-competitive and will increase costs, which will then be passed on to the consumer.
Spencer Kamps, Deputy Director, Home Builders Association of Central Arizona, explained that he is against the legislation because it will impact operations too much, specifically when a subcontractor can invoice and when a subcontractor will receive payment. He stated that this legislation says that a general contractor must pay the subcontractors whether or not he or she has been paid by the owner. Mr. Kamps listed the remedies that subcontractors can employ, including liens, litigation, and complaints to the Registrar of Contractors.
Mr. Hendrix asked if Mr. Kamps was stating that the subcontractor should bear the burden of an unpaid invoice, rather than the general contractor who hired him or her. Mr. Kamps replied that there is no right answer to that question.
Mr. Crandall inquired what verbiage is the most objectionable. Mr. Kamps replied that it is the phrase “substantial completion”, which may be too early in the process. Discussion ensued on the Prompt Pay Act.
Mr. Hendrix asked if Mr. Kamps’ group will be greatly affected by this legislation. Mr. Kamps stated that the retention portion of the bill would affect his association.
Richard Usher, Principal, American Subcontractors Association, testified in support of the legislation, explaining that it will provide economic stimulus because it deals with the timing issues of payment and cash flow. He stated that the general contractor has the responsibility of managing the project and being responsible for the correction of any defective work.
Barry Aarons, Construction Trades Coalition, stated his support for the legislation, adding that it is a work in process (Attachments 8, 9, and 10). He said that three things are needed:
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2080 but did not speak:
Kevin B. DeMenna, Arizona State Contractors Coalition
Edward Avila, Jade Concrete
David Eberhart, American Council of Engineering Companies
Debra Margraf, Executive Director, Arizona Chapter National Electrical
Contractors
Sharon Shively, Attorney, Arizona State Contractors Coalition
Timothy Avila, Jade Concrete
Anthony Avila, Jade Concrete
Keith Neveu, representing self
Howard Schapira, Action Scaffolding
Mark Giebelhaus, Marlin Mechanical Corporation
Bryan Ginter, representing self
Carol Floco, ASA
Susan Kregar, Arizona Concrete Contractors Association
Patrick Neilio, Lehigh Southwest Cement Co.
Marty Wakefield, Leading Edge Concrete
Jerry Esh, representing self
John Yoder, STAR Roofing
Stephanie Davis, DJM Construction
Ryan Anderson, Arizona State Contractors Coalition
Matthew Medina, manager/owner, representing self
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2080 but did not speak:
Jay Kaprosy, Senior Government Relations Advisor, Arizona
Bankers Association
Stan Barnes, Southern Arizona Home Builders Association
Larry Lucero, Manager Governmental affairs, Tucson Electric Power Company
Chris Herstam, Abengoa Solar
Courtney Gilstrap Levinus, self
Stuart Goodman, Lobbyist, Catholic Healthcare West
Tanya Wheeless, Arizona Bankers Association
Stephanie Prybyl, International Council of Shopping Centers
Marcus Osborn, Arizona Manufacturers' Council
Michael Preston Green, Attorney, The Boeing Company
Victor Daniels, Government Affairs, Qwest
Penny Allee Taylor, Specialist/Government Affairs, Southwest Gas
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2080 but did not speak:
David Jones, President/CEO, Arizona Contractors Association
David Martin, Lobbyist, Associated General Contractors
Question was called on the motion that the Hendrix seventeen-page strike-everything amendment dated 3/2/09 (Attachment 6) be adopted. The motion carried.
Vice-Chairman Hendrix moved that HB2080 as amended do pass. The motion carried by a roll call vote of 6-2-0-0 (Attachment 11).
HB2087 - professional employer organizations; agreements – DO PASS AMENDED S/E
Vice-Chairman Hendrix moved that HB2087 do pass.
Vice-Chairman Hendrix moved that the Reagan seven-page strike-everything amendment dated 3/2/09 (Attachment 12) be adopted.
Brooke Olguin, Assistant Research Analyst, explained that the strike-everything amendment to HB2087 requires a professional employer agreement to specify whether the workers’ compensation policy is an individual or master policy (Attachment 13).
Scot Butler, Attorney, Industrial Commission of Arizona, stated his opposition to this legislation for the reasons that master policies do not work in Arizona and this bill is a significant change from the original professional employer organizations (PEO) agreements. He added that this will result in dissimilar employers under one insurance policy, with employers joining and leaving the PEO. He added that this will affect how Arizona tracks the employees.
Mr. Crandall asked why the master policies work in other states but not here. Mr. Butler explained that every state has unique workers’ compensation systems, and Arizona has the special fund system which must be able to track individual employee data by employer. Mr. Crandall stressed that more modern methods and systems must be used than the current 1970 system.
Mike Gardner, Employers Resource, stated his support for the bill, explaining that master policies allow the free market to work and will encourage safety on the work site. He added that the legislation provides for the need to know when employers move in and out of the PEO and for work experience records on employees to follow the PEO around.
Jamie Volkens, Advanced Risk Solutions, spoke in support of the legislation, explaining the underwriting of workers’ compensation claims. She provided data from other states, thirty-three of which are master policy states.
Lanny Hair, Independent Insurance Agents & Brokers of Arizona, stated that he is neutral on the legislation. He stated that his organization’s original concern was because PEOs used to wipe clean an employee’s work history, but that PEOs of today are much more professional. He stressed that legislation, however, must be for the lowest common denominator.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2087 but did not speak:
George Gersema, Employers Resource
Robert Morley, Vensure
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2087 but did not speak:
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up in neutral on HB2087 but did not speak:
James Stabler, State Compensation Fund of Arizona (SCF Arizona)
Question was called on the motion that the Reagan seven-page strike-everything amendment dated 3/2/09 (Attachment 12) be adopted. The motion carried.
Vice-Chairman Hendrix moved that HB2087 as amended do pass. The motion carried by a roll call vote of 7-1-0-0 (Attachment 14).
HB2198 - settlement of claims; workers' compensation – DO PASS AMENDED
Vice-Chairman Hendrix moved that HB2198 do pass.
Azra Hafizovic, House Majority Intern, explained that HB2198 adds Arizona Revised Statute § 23-941.01 pertaining to the settlement of claims (Attachment 15).
Vice-Chairman Hendrix moved that the Hendrix two-page amendment dated 3/2/09 (Attachment 16) be adopted.
Ms. Hafizovic explained that the amendment further specifies claim settlement terms and mandates the involvement of an attorney.
Representative Nancy McLain, Sponsor, explained that the purpose of the bill is to ensure that, in the case of a full and final settlement, claims may not be reopened. Arizona is one of the few states that currently allows reopening of claims.
Chairman Reagan added that this is not intended to create a cottage industry for attorneys.
Mike Colletto, Executive Director, Professional Fire Fighters of Arizona, testified in opposition to HB2198, relating his personal experience and the importance of being able to reopen a claim if unknown injuries surface later. He objected to this liability being put on the injured individual.
James Stabler, Counsel for State Compensation Fund of Arizona (SCF Arizona), stated his support for HB2198 and reminded the Members that claim settlement is a voluntary issue and that no one will be forced to settle a claim. He added that there are safeguards that will protect the injured worker.
Scott Butler, City of Mesa, stated his opposition to the legislation stating that it affects the statutory right to reopen a closed claim for previously undiscovered injuries.
Mr. Campbell inquired about the problem that is being fixed by this bill. Mr. Butler addressed his question.
Levi Bolton, Phoenix Law Enforcement Association, testified in opposition to HB2198, stating that police officers do not like this bill because injuries happen in their profession and hidden injuries are a frequent occurrence.
Vice-Chairman Hendrix assumed the Chair.
Question was called on the motion that the Hendrix two-page amendment dated 3/2/09 (Attachment 16) be adopted. The motion carried.
Mr. Konopnicki moved that HB2198 as amended do pass.
Chairman Reagan resumed the Chair.
Question was called on the motion that HB2198 as amended do pass. The motion carried by a roll call vote of 6-2-0-0 (Attachment 17).
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2198 but did not speak:
Allison Bell, Arizona Chamber of Commerce & Industry
Sonya Pastor, Salt River Project
Catherine Mayorga, Public Affairs, Tempe Chamber of Commerce
Don Hughes, Property and Casualty Insurance Association of America
Eric Emmert, East Valley Chambers of Commerce Alliance
Michelle Bolton, National Federation of Independent Business
Paul Parisi, Tucson Metropolitan Chamber of Commerce
Farrell Quinlan, West Valley Chambers of Commerce Alliance
Nicole Gonzalez, Manager, Public Affairs, Greater Phoenix Chamber of Commerce
Wendy Briggs, Lobbyist, American Insurance Association
Michael Preston Green, Attorney, The Boeing Company
Penny Allee Taylor, Specialist/Government Affairs, Southwest Gas
Marcus Osborn, Manager of Government and Public Affairs, Arizona Manufacturers'
Council
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2198 but did not speak:
Darryl Engle, Attorney, representing self
Scot Butler, Attorney, Industrial Commission of Arizona
Debra Runbeck, representing self
Bryan Ginter, representing self
Janice Goldstein, Arizona Trial Lawyers Association
James Mann, Arizona Fraternal Order of Police Pension and Benefits
Kelsey Lundy, Arizona Police Association
Tommy Valenzuela, President, Laborers Local 777
HB2247 - home sales; water supply disclosure – DO PASS
Vice-Chairman Hendrix moved that HB2247 do pass.
Becky Rubenstrunk, House Majority Intern, explained that HB2247 requires the disclosure of water supply status by a subdivider outside of an active management area and requires a statement of the water supply status to be recorded with the county recorder (Attachment 18).
Representative Ed Ableser, District 17, Sponsor, explained that this is proposed legislation from last year which is intended to ensure adequate water supply for future homebuyers after the development and the first-time sale of a home.
Tom Farley, Arizona Association of Realtors, stated his support for HB2247 and described the water supply situation in a subdivision in rural Arizona; he added that decades-old records are often lost to time.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2247 but did not speak:
Bryan Ginter, representing self
Sandy Bahr, Conservation Director, Sierra Club - Grand Canyon Chapter
Diane Brown, Executive Director, Arizona PIRG (Public Interest Research Group)
Tiffany Sprague, representing self
Question was called on the motion that HB2247 do pass. The motion carried by a roll call vote of 6-0-0-2 (Attachment 19).
HB2302 - liquor licenses; distance restriction; waiver – DO PASS AMENDED S/E
S/E: same subject
Vice-Chairman Hendrix moved that HB2302 do pass.
Vice-Chairman Hendrix moved that the Reagan four-page strike-everything amendment dated 3/2/09 (Attachment 20) be adopted.
Diana O’Dell, House Research Analyst, explained that the strike-everything amendment to HB2302 authorizes a city or town to file a waiver with the Arizona Department of Liquor Licenses and Control to permit businesses that hold a valid bar or beer and wine bar license within a central business district to locate within 100 feet of a school, church, or school playground (Attachment 21).
Vice-Chairman Hendrix moved that the Reagan four-page strike-everything amendment dated 3/2/09 (Attachment 20) be amended as follows:
Page 2, Line 15, strike “DEPARTMENT”, insert “DIRECTOR”
The motion carried.
Chairman Reagan described the background on this bill.
Vice-Chairman Hendrix moved that the Reagan four-page strike-everything amendment dated 3/2/09 (Attachment 20) as amended be adopted. The motion carried.
Vice-Chairman Hendrix moved that HB2302 as amended do pass. The motion carried by a roll call vote of 6-0-0-2 (Attachment 22).
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2302 but did not speak:
Steve Duffy, Arizona Licensed Beverage Association
Don Isaacson, Arizona Licensed Beverage Association
Scott Butler, City of Mesa
Bryan Ginter, representing self
Sherry Gillespie, Government Relations Manager, Arizona Restaurant Association
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2302 but did not speak:
Deborah Sheasby, Legal Counsel, Center for Arizona Policy
Pearlette Ramos, Arizona Department of Liquor Licenses and Control
HB2304 - technical correction; nonprofit corporations – DO PASS AMENDED S/E
S/E: unclaimed property; gift card
Vice-Chairman Hendrix moved that HB2304 do pass.
Vice-Chairman Hendrix moved that the Reagan six-page strike-everything amendment dated 2/27/09 (Attachment 23) be adopted.
Chris Stapley, House Majority Intern, explained that the strike-everything amendment to HB2304 outlines the allocation of abandoned retail gift card monies after a certain amount of time (Attachment 24).
Chairman Reagan, Sponsor, explained that this bill is intended to reward companies in Arizona by resolving unclaimed property, most of which does not get returned to the issuer. Arizona currently exempts gift cards from unclaimed property. In response to Members’ questions, she described a hypothetical situation wherein an Arizona-based company or franchise sells a gift card to someone in North Carolina who then uses part of the value of the gift card in New York. Any balance left on that gift card after a specified time must be handled by state laws regarding escheat (laws which ensure that property is not left in limbo); these laws have many triggers to determine what state gets that unused money and when.
Chairman Reagan stated that this is a very complicated legal area and she is attempting to get unused gift card monies to return to Arizona, where the franchise is located. Discussion ensued regarding abandoned property and dormant property.
Wendy Briggs, American Express Company, stated her opposition to HB2304, which does not distinguish between a “retail gift card” and a “multiuser card”. She explained that 86 percent of retail gift cards are completely depleted in six months and that most cards have no expiration date. Discussion ensued about how much of the unused and unclaimed value would be returned to the retailer and how much to the state.
Mr. Crandall asked if card expiration dates are covered by statute. Ms. Briggs replied that it is a contract issue between the purchaser and the retailer issuing the card. She added that abandonment and escheatment are one and the same; abandonment is traditionally five years from date of issue of a gift card, but this legislation states that escheatment occurs three years after the expiration or abandonment date.
Michelle Ahlmer, Executive Director, Arizona Retailers Association, testified in opposition to HB2304, describing a situation where the state could not identify a cardholder because the issuer would not know to whom the card was given. She added that retailers typically put money received from card purchases into an escrow account, but do have to pay income taxes on it. Discussion ensued about the details to be worked out on this legislation.
Question was called on the motion that the Reagan six-page strike-everything amendment dated 2/27/09 (Attachment 23) be adopted. The motion carried.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2304 but did not speak:
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2304 but did not speak:
Sherry Gillespie, Government Relations Manager, Arizona Restaurant Association
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2304 but did not speak:
Sean Laux, Legislative Liaison, Department of Revenue
Vice-Chairman Hendrix moved that HB2304 as amended do pass. The motion carried by a roll call vote of 6-1-0-1 (Attachment 25).
HB2468 - contracts; construction; architect-engineer; proportional liability. - HELD
Chairman Reagan announced that HB2468 would be held.
HB2545 - foreclosures; terms; notice. – DO PASS AMENDED S/E
S/E: same subject
Vice-Chairman Hendrix moved that HB2545 do pass.
Vice-Chairman Hendrix moved that the Meza seven-page strike-everything amendment dated 3/2/09 (Attachment 26) be adopted.
Maureen Howell, House Majority Intern, explained that the strike-everything amendment to HB2545 modifies foreclosure statutes regarding single family residences and requires the trustee to mail a copy of the notice of sale of a single family residence to the property address and allows a tenant upon receiving a notice of foreclosure to direct the landlord to apply prepaid rent and security to the tenant’s rental obligation. It also stipulates that a landlord of a residential property subject to foreclosure must give at least 30 days’ notice to vacate the property (Attachment 27).
Barbara McGuire, District 23, Sponsor, explained the impact of foreclosure on tenants in rental property when the tenants are served with an eviction notice giving only three to five days’ warning. She expressed concern about multi-family dwellings and the effect of this legislation on that type of property.
Chairman Reagan added that these tenants are being evicted through no fault of their own, that it is the owners who are in default.
Courtney Gilstrap Levinus, Arizona Multihousing Association, appeared as neutral on this legislation, explaining that her concern is when multi-family properties are in receivership the owners/lessors want their tenants to stay in residence through that process; they do not want to precipitate a mass exodus when notification required by HB2545 is sent out.
Ms. Levinus also wanted to clarify that the security deposit is applied to the rent obligation, but is not one month’s rent; typically the deposit is not enough to cover one month’s rent.
Tom Farley, Arizona Association of Realtors, stated his support for the bill, but has some concern that the landlords, who now do not give their tenants notice, are the ones required by HB2545 to notify their tenants. He commented that the trustee also is required to give notice.
Mr. Pratt asked if this bill addresses commercial properties. Mr. Farley replied that this legislation is focused on residential, single-family properties.
Lori Lustig, Arizona Tenants Advocates, appeared in support of the legislation because currently tenants may be given only overnight or just a few days to vacate the premises. She added that the intent is to have no impact on multi-family dwellings.
Wendy Briggs, Arizona Bankers Association, testified as neutral on HB2545, stating that she has some concerns, including the trustee and landlord duplicative notification requirement. She stated that she feels that only the landlords should be assigned that requirement as they are making money by renting the property, and the bank/trustee may not even know that the property is rented. She also stated a concern related to the provision regarding contacting Superior Court.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2545 but did not speak:
Shirley Gunther, Government Relations Officer, City of Avondale
Arthur Chapa, Legislative Counsel, Pima County Board of Supervisors
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2545 but did not speak:
Tanya Wheeless, Arizona Bankers Association
Question was called on the motion that the Meza seven-page strike-everything amendment dated 3/2/09 (Attachment 26) be adopted. The motion carried.
Vice-Chairman Hendrix moved that HB2545 as amended do pass. The motion carried by a roll call vote of 5-0-0-3 (Attachment 28).
HB2547 - housing trust fund; donations - HELD
Chairman Reagan announced that HB2547 would be held.
HB2595 - civil actions; false claims actions – DO PASS
Vice-Chairman Hendrix moved that HB2595 do pass.
Brooke Olguin, Assistant Research Analyst, explained that HB2595 creates the False Claims Act and directs the Attorney General to investigate all false claims involving state funds (Attachment 29).
Representative Daniel Patterson, Sponsor, explained that this is a public information bill which will have no cost to the state and encourages fiscal conservatism (Attachment 30). He added that many states already have legislation such as this.
David Haron, representing self, testified in support of HB2595 and gave a brief history of the Federal False Claims Act that was enacted during President Reagan’s administration. He added that it will recover a great deal of money for the taxpayers by weeding out fraud in public contracts and Medicaid.
Allison Bell, Arizona Chamber of Commerce & Industry, stated that she certainly does not endorse fraud but that the Chamber does stand in opposition to HB2595 because the Federal laws seem to be working and there is no need for a copycat law in Arizona. She also spoke to the retroactivity portion of the legislation which she defined as problematic.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2595 but did not speak:
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2595 but did not speak:
Joseph Abate, Martinez & Curtis
Spencer Kamps, Home Builders Association of Central Arizona
Marcus Osborn, Arizona Manufacturers Council
Matt Johnson, Takeda Pharmaceuticals
Victor Daniels, Qwest
David Landrith, Arizona Medical Association
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2595 but did not speak:
Seth Apfel, Volunteer, representing self
Question was called on the motion that HB2595 do pass. The motion carried by a roll call vote of 4-2-0-2 (Attachment 31).
HB2611 - motion picture tax incentives – DO PASS
Vice-Chairman Hendrix moved that HB2611 do pass.
Brooke Olguin, Assistant Research Analyst, explained that HB2611 transfers responsibility of the Motion Picture Production Tax Incentive Program from the Department of Commerce to the newly-established Arizona Film Office Advisory Council (Attachment 32).
Mr. Crandall asked if there were financing numbers on the current credit-to-date. Ms. Olguin referred to the 2007 Annual Report issued in early February by the Department of Commerce listing the operating capital as $40 million.
Mike Williams, DDB Ventures, testified in support of HB2611, stating that DDB Ventures is trying to correct the tax credit system so that Arizona can get film business which now goes to other states. As an example, Mr. Williams described New Mexico, which has motion picture tax credits wherein for every $1.00 the state puts in, it receives $1.50 back.
Mr. Williams explained that the legislation provides for a tax credit that extends until 2025 in order to build a film studio here in Arizona, which should be a premium location for filming.
Lisa Danka, Arizona Department of Commerce, appeared as neutral on HB2611 and answered Mr. Crandall’s question about financing numbers, tax credit, and transferability. She explained that applicants that were approved in calendar year 2007 had a cap of $40 million and $517,000 that applicants relinquished. The average pre-approval amount was $862,000 per production, and the program allowed use tax exemptions as well as tax credits. She also quantified the economic and fiscal impact.
Vice-Chairman Hendrix announced the names of those who signed up in support of HB2611 but did not speak:
Bradley Yonover, representing self
Bryan Ginter, representing self
Vice-Chairman Hendrix announced the names of those who signed up in opposition to HB2611 but did not speak:
Cathi Herrod, President, Center for Arizona Policy
Vice-Chairman Hendrix announced the names of those who signed up as neutral on HB2611 but did not speak:
Wendy Briggs, Entertainment Software Association
Kerri Morey, Department of Commerce
Question was called on the motion that HB2611 do pass. The motion carried by a roll call vote of 4-2-0-2 (Attachment 33).
Without objection, the meeting adjourned at 12:57 p.m.
__________________________________________
Jane Dooley, Committee Secretary
March 16, 2009
(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)
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COMMITTEE ON COMMERCE
2
March 4, 2009
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