SB1161 - 512R

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

Section 1. Title 9, Arizona Revised Statutes, is amended by adding chapter 13, to read:

CHAPTER 13

STREAMLINED LOCAL GOVERNMENT POLICIES

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE9-1401. Findings; purpose; standing

A. The Legislature finds that the taxing, spending, regulatory, eminent domain, planning and zoning authority that is granted to municipalities may encourage the exercise of local governmental power that is threatening to genuine public health, safety and welfare, frustrating to economic development, inimical to fiscal responsibility, as well as overly centralized, bureaucratic, intrusive and politicized. The Legislature further finds that public health, safety, welfare and the principle of local control, are matters of statewide concern and justify giving municipalities, local elected officials and citizens a convenient option of adopting a model of streamlined local governance. Accordingly, the Legislature intends to grant municipalities the legal authority to adopt an integrated set of streamlined local government policies that collectively represent best practices to ensure that local government maximizes economic freedom and fiscal responsibility.

B. In any court challenge to the validity of this act, taxpayers have standing to intervene. END_STATUTE

START_STATUTE9-1402. Definitions

In this chapter, unless the context otherwise requires:

1. "Adopting Municipality" means a municipality that is effectively adopting the streamlined local government policies that are set out in this chapter.

2. "Board" means the managed competition independent review board.

3. "Managed competition" means transparent, open competitive bidding for service contracts by independent contractors and municipal departments.

4. "Streamlined local government policies" means the policies adopted pursuant to this chapter by an adopting municipality. END_STATUTE

START_STATUTE9-1403. Authority to adopt

A. A municipality may adopt the entire set of streamlined local government policies that is established in this chapter through municipal legislation or local initiative. If the municipality is proposing the policies through local initiative, the initiative must state in reasonably intelligible terms that the municipality is "proposing to adopt the streamlined local government policies that are established by title 9, chapter 13, Arizona Revised Statutes".

B. For a charter city, the entire set of streamlined local government policies that is established by this chapter may be adopted through charter amendment as provided by law. The charter amendment must state in reasonably intelligible terms that the municipality is "proposing to adopt the streamlined local government policies that are established by title 9, chapter 13, Arizona Revised Statutes, as a charter amendment".

C. If a municipality adopts the streamlined local government policies that are established by this chapter, the policies are the equivalent of statutory law for the adopting municipality and supersede and control any contrary or inconsistent law, including all contrary or inconsistent state statutes, administrative regulations, intergovernmental agreements, municipal charters, ordinances, resolutions or local rules that have been previously enacted or adopted by this state, any state agency, any political subdivision of this state, the adopting municipality or any special district as defined in section 48-271, subsection B that would otherwise apply to a person, property or business that is located within the jurisdiction of the adopting municipality. The specification of laws that are modified or displaced by this chapter are included only for the purposes of convenience and illustration and are not intended to limit the generality of the streamlined local government policies that are established by this chapter. END_STATUTE

START_STATUTE9-1404. Regulatory policies

A. If a municipality adopts the streamlined local government policies that are established by this chapter, the regulatory policies that are provided in this section are effective within the jurisdiction of the adopting municipality.

B. An adopting municipality may not adopt any regulation that restricts or burdens the free exercise of property rights or the freedom to engage in a lawful business or occupation unless:

1. The regulation is reasonably expected to substantially reduce or eliminate the threat to public health, safety or general welfare it targets.

2. The regulation's benefits are roughly proportional to its short, medium and long term costs.

3. The regulation provides for performance benchmarking.

4. Enforcement of the regulation is capable of performance benchmarking the reduction or elimination of threats to public health, safety or welfare.

C. The adopting municipality may implement only the least restrictive mode of regulation that restricts or burdens the free exercise of property rights or the freedom to engage in a lawful business or occupation. The regulation may:

1. Furnish additional or augmented civil remedies to render previously existing common law or statutory civil actions more effective.

2. Impose clear, objective legal standards and enable the enforcement of violations by injunctive relief only if furnishing more effective civil remedies will not reasonably reduce the threat posed to public health, safety or general welfare.

3. Enable the enforcement of clear, objective legal standards by inspections and enforcement of violations by civil penalty and injunctive relief only if the modes of regulation will not reasonably reduce the threat posed to public health, safety or general welfare.

4. Enable the enforcement of clear, objective legal standards by permitting, licensing or other regulatory preapproval processes only if the modes of regulation will not reasonably reduce the threat posed to public health, safety or general welfare.

5. Enable the enforcement of clear, objective legal standards by criminal sanctions only if the modes of regulation will not reasonably reduce the threat posed to public health, safety or general welfare.

D. At the beginning of each fiscal year, the adopting municipality's chief executive officer shall determine and publish online in a conveniently accessible and searchable, user-friendly public website format processing deadlines for all completed applications requesting regulatory approval of any kind. Deadlines shall be set for the shortest feasible period of time given the nature of the regulatory approval sought and the resources available to the municipality. No deadline may be longer than sixty days. The failure of the municipality to set a deadline as required by this subsection or to approve or deny any application that seeks regulatory approval before the published deadline shall result in the affected application being deemed approved by the municipality as of the date of submission. The municipality may not seek a waiver of any deadline or the automatic approval from any applicant. The municipality may not claim that an application for regulatory approval is incomplete unless the municipality gives notice to the applicant that the application is incomplete no later than the midpoint of the applicable processing period. The denial of any application for regulatory approval of any kind shall be timely furnished to the applicant in writing and include a written disclosure of the disposition of all applications for approval that are submitted to the municipality under the same regulatory provisions within the immediately preceding one hundred eighty days.

E. Beginning on the effective date of the adopted streamlined local government policies, any proposed policy, rule, ordinance or regulation that would restrict or burden the free exercise of property rights or the freedom to engage in a lawful business or occupation may not be considered for enactment or adoption within the jurisdiction of the adopting municipality unless the adopting municipality first holds a public meeting and finds that the proposed regulation is permissible under this chapter. all existing policies, rules, ordinances or regulations that restrict or burden the free exercise of property rights or the freedom to engage in a lawful business or occupation within the jurisdiction of the adopting municipality that have been previously enacted or adopted by the adopting municipality expire and are regarded as repealed either on their specified expiration date or, if none, the latter of five years after the effective date of the adoption of the streamlined local government policies or five years from their effective date, unless extended following a public hearing at which the adopting municipality finds that the regulation is permissible under this chapter.

F. Any individual or business subject to civil or criminal proceedings that arise from a regulation adopted after the effective date of the adopted streamlined local government policies has a complete defense to any enforcement action if the regulation violates this chapter. Any court or adjudicatory body that considers or reviews this defense shall rule on its merits without deference to any legislative, administrative or executive finding that concern the regulation. An individual or business that prevails in advancing this defense is entitled to reimbursement of all incurred legal costs, expenses and attorney fees from the prosecuting agency. END_STATUTE

START_STATUTE9-1405. Property rights policies

If a municipality adopts the streamlined local government policies that are established by this chapter, the following property rights policies are effective within the jurisdiction of the adopting municipality:

1. An adopting municipality shall exercise its zoning and land use regulatory authority, if any, as if all lawful uses of real property that exist at the time of the exercise of authority are vested property interests of the owner of record.

2. An advance waiver of claims and covenant not to sue under section 12-1134, or a similar statute, may not be sought by an adopting municipality from any person as a condition of approving or processing any application for regulatory approval.

3. No advance waiver of claims or covenant not to sue under section 12-1134, or A similar statute, is enforceable by the municipality without proof beyond a reasonable doubt that it was supported by an exchange of valuable consideration that was unrelated to the exercise or forbearance of any regulatory authority.

4. When exercising the power of eminent domain, if any, an adopting municipality shall pay sufficient just compensation to place a person who has a property interest in the condemned property in an equivalent economic position as the person would have been in if the adopting municipality had not exercised the power of eminent domain. As components of just compensation, the municipality shall pay a person who has a property interest in the condemned property:

(a) At least one hundred ten per cent of the property interest's fair market value.

(b) All reasonable relocation expenses that are proximately caused or likely to be incurred because of the municipality's exercise of eminent domain.

(c) All losses in personal or business income that are proximately caused or likely to be incurred because of the municipality's exercise of eminent domain.

(d) All reasonable attorney and expert fees and costs that are incurred by the property interest holder in the course of prelitigation settlement negotiations over the amount of just compensation.

(e) If a condemnation suit is filed and either the suit is involuntarily dismissed, otherwise unlawfully adjudicated or unconstitutionally filed, or the ultimate award of just compensation is twenty per cent more than the municipality's initial offer, all litigation expenses that are incurred by the property interest holder, including reasonable attorney and expert fees and costs. END_STATUTE

START_STATUTE9-1406. Criminal law enforcement policies

A. For each fiscal year beginning after the adoption of the streamlined local government policies, the adopting municipality shall adopt performance benchmarking that targets and measures the desired crime rates, crime clearance rates, public complaint rates and response times both for individual precincts and for the municipality as a whole. The benchmarking performance standards require benchmarked statistics in each precinct and in the municipality as a whole to improve every month. The benchmarking performance standards also require an ultimate statistical fiscal year performance goal to be set for each benchmarked statistic for each precinct and the municipality as a whole based on what the municipal police department determines to be a reasonable state of security.

B. a majority of the municipal legislative body must approve the Fiscal year performance goals. Benchmarked standards, goals and statistics must be published online as soon as practicable in a conveniently accessible and searchable, user-friendly public website format and updated frequently, as well as made immediately available for inspection and copying by the general public.

C. Priority access to overtime benefits, if any, must be given to peace officers who work in precincts where performance standards have been met. Peace officers who receive priority access to overtime shall perform overtime services in precincts where performance standards have not been met.

D. If the municipal police department fails to meet performance standards in the majority of precincts or in the municipality as a whole for two consecutive fiscal years, then the governing body of the municipality may enact an appropriate ordinance that offers tax credits by general law to any person who furnishes qualifying security services in the precincts in which performance standards have not been met in proportion to the public benefit as determined by uniform, objective and quantifiable standards. If the municipal police department fails to meet performance standards in the majority of precincts or in the municipality as a whole for five consecutive fiscal years, then the provision of municipal policing services will become subject to managed competition. END_STATUTE

START_STATUTE9-1407. Fiscal policies

A. If a municipality adopts the streamlined local government policies that are established by this chapter, the fiscal policies that are provided in this section are effective within the jurisdiction of the adopting municipality as soon as practicable, but no later than the second fiscal year after adoption.

B. The adopting municipality shall furnish municipal services, other than core public safety services, through managed competition. Core public safety services that are provided by peace officers and firefighters may be made subject to managed competition if a majority of the elected members of the municipal legislative department approves the services or if the police department meets the requirements in section 9-1406, subsection D.

C. The municipality's chief executive officer shall be solely responsible for administering and monitoring any agreements with contractors. The municipality's chief executive officer shall:

1. Require annual performance audits for contracted services. The cost of the performance audits must be accounted for and considered during the bidding process.

2. Seek an independent audit every five years to evaluate the municipality's experience and performance audits.

D. If a service contract is awarded to an independent contractor through managed competition, impacted municipal employees will not be precluded or hindered from accepting employment with the independent contractor.

E. The municipal legislative department shall adopt ordinances that establish standards and processes to ensure transparent, open competitive bidding for public service contracts and safeguard against corruption and conflicts of interest.

F. The adopting municipality shall establish the managed competition independent review board consisting of the following members:

1. Four members of the public who are appointed by the municipality's chief executive officer, subject to the municipal council's confirmation, and have professional experience in one or more of the following areas:

(a) Finance.

(b) Law.

(d) Business management.

(e) the service areas under consideration by the municipality's chief executive officer.

2. One member of the municipal staff or a staff designee who is appointed by the municipality's chief executive officer and who does not have any personal or financial interests that would create a conflict of interest with the duties of a Board.

3. One member of the municipal legislative department staff or a staff designee who is appointed by the municipality's chief executive officer and who does not have any personal or financial interests that would create a conflict of interest with the duties of a Board.

4. The municipal auditor and comptroller or the auditor and comptroller's designee who is appointed by the municipality's chief executive officer and who does not have any personal or financial interests that would create a conflict of interest with the duties of a Board.

G. Members of the Board are prohibited from entering into a contract or accepting employment from an organization that secures a municipal contract through the managed competition process for the duration of the contract. The term of service for initial members of the Board may not end before the third fiscal year after the municipality adopts the streamlined local government policies. The adopting municipality shall determine the terms thereafter by ordinance.

H. as prescribed by ordinance, the municipality's chief executive officer shall prepare an initial preliminary written statement of work for each municipal service put into managed competition and shall transmit Each statement of work to the board for its consideration and recommendations relative to a request for proposal and contractual standards and contractor qualifications. The Board shall issue its initial recommendations as soon as practicable, but no later than the third fiscal year after it adopts the Streamlined Local Government Policies, and thereafter as determined by ordinance. in determining its recommendations, the Board shall consider the following factors:

1. The type of service that is provided.

2. The abilities of the current and projected competitive market.

3. Potential efficiencies that could be achieved and The capacity of the municipality to deliver essential services in the event of contractor default.

I. In addition to any standards and qualifications that the Board recommends, the municipality's chief executive officer shall require that any independent contractor that provides services to the municipality meet the minimum contract standards that are contained in the solicitation for services or request for proposal. The minimum contract standards shall include the following requirements:

1. the independent contractor shall PROVIDE proof that it maintains an adequate level of liability insurance that is consistent with municipal risk management requirements.

2. the independent contractor shall have appropriate safety policies and procedures in place to protect the public and its employees in providing the service.

3. the independent contractor shall comply with all applicable employment and labor laws.

4. The performance standards and consequences for nonperformance, up to and including termination of the contract, must be made clear.

5. the independent contractor shall DESIGNATE appropriate personnel to monitor contract compliance.

6. the independent contractor's employees shall maintain the same certifications that are required of municipal employees who perform the same service.

7. the independent contractor shall perform background checks on employees who perform a particular service if a background check is required of municipal employees who perform the same service.

8. the same regulations and requirements of service delivery necessary to maintain service quality that apply to a municipal department shall also apply to any independent contractor.

9. the municipality shall unilaterally and immediately terminate the contract if the independent contractor enters into a contract with or employs a member of the Board during the term of the contract with the municipality.

10. the municipality shall unilaterally and immediately terminate the contract if the independent contractor enters into a contract with or employs a former member of the Board during the term of the contract with the municipality, if that former Board member participated in the selection process for that contract.

J. The adopting municipality shall not subsidize private enterprise. For the purposes of this subsection, "subsidy to private enterprise" Means an economic benefit, direct or indirect, that the municipality grants with the primary purpose or substantial effect of encouraging or maintaining particular or specific classes of ventures in which private persons have a substantial financial or ownership interest. The following economic benefits to private enterprise are not considered subsidies:

1. Benefits from the municipality's performance of essential governmental functions, specifically benefits from:

(a) The municipality's provision and maintenance of public infrastructure for general public benefit and for actual public use.

(b) The municipality's performance of functions without which the municipality would cease to exist as a governmental body.

(c) The retention of private enterprise to perform functions without which the municipality would cease to exist as a governmental body after a process of transparent, open competitive bidding.

(d) the procurement of supplies and services from private enterprise for the municipality's ordinary business operations after a process of transparent, open competitive bidding.

2. Benefits from lower taxes and less regulation, specifically benefits from:

(a) the general and uniform relaxation or repeal of regulations.

(b) the general and uniform reduction or repeal of taxes, assessments or fees.

(c) the relaxation or repeal of special regulations, that, if not relaxed or repealed, would otherwise subject specific individuals, entities or classes of individuals or entities to regulatory burdens in excess of those generally and uniformly imposed.

(d) the reduction or repeal of special taxes, assessments or fees, that, if not reduced or repealed, would otherwise subject specific individuals, entities or classes of individuals or entities to taxation, assessments or fees in excess of those generally and uniformly imposed.

K. Notwithstanding any other law, a special taxing district that is established pursuant to title 48 may not be formed within the jurisdiction of the adopting municipality if the adopting municipality has reached its special district taxing cap. For the purposes of this subsection, an adopting municipality has reached its special district taxing cap when the amount of the ad valorem tax limitation for that political subdivision as prescribed in article IX, section 19, Constitution of Arizona, is equal to or less than the sum of the most recent publicly-reported level of ad valorem taxes that is then being levied by the adopting municipality and the most recent publicly-reported aggregate amount of ad valorem taxes that is then being levied by all special taxing districts that are located in any portion of the adopting municipality.

L. Notwithstanding any other statute, a special taxing district that is established pursuant to title 48 may not be formed within the jurisdiction of the adopting municipality if the adopting municipality has reached its special district spending cap. For the purposes of this subsection, an adopting municipality has reached its special district spending cap when the amount of the expenditure limitation for the adopting municipality as prescribed in article IX, section 20, Constitution of arizona, is equal to or less than the sum of the most recent publicly-reported amount of expenditures that is then being made by the adopting municipality and the most recent publicly‑reported aggregate amount of expenditures that is then being made by all special taxing districts that are located in any portion of the adopting municipality. END_STATUTE

Sec. 2. Severability

If a provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.