ARIZONA HOUSE OF REPRESENTATIVES

SB 1387: S/E local regulations; home-based businesses
PRIME SPONSOR: Senator Griffin, LD 14 BILL STATUS: Appropriations                 LARA: W/D 0-0-0-0

Abstract

Related to local restrictions on home businesses.

Provisions

Municipalities & Counties – Home Businesses

1. Declares the right to use a Residence for a home-based business, except when there are land use restrictions or limitations due to an HOA master deed, bylaws or other documents. (Sec. 1, 2)

2. Stipulates that a municipality or county cannot restrict Business operations or require any license, permit, registration, variance or prior approval to function, except as noted.  (Sec. 1, 2)

3. Details qualifying requirements for a Business as follows:

a. Employees are residents or immediate family members of the owner; no more than three employees are not residents.

b. All sale of goods and services are lawfully conducted inside the Residence; involve no clients or may have more than one client on the premises at a time; require no on-street parking or increase in traffic (current law for counties); activities are not visible from the street and do not violate municipal or county regulations.  (Sec. 1, 2)

4. Authorizes a municipality or county to enact reasonable regulations on a home-based business only as follows: 

a. To protect the public health and safety as outlined.

b. To ensure compatibility with residential use of the property, secondary to use as a Residence. 

c. To limit use for the following purposes:  sale of liquor or illegal drugs; operation of a structured sober living home; pornography; obscenity; nude or topless dancing; other adult-oriented business. (Sec. 1, 2)

5. Prohibits a municipality or county to require a person, as a condition to operate a Business, to do any of the following: 

a. Rezone the property for commercial use.

b. Obtain a Business license or any other license.

c. Install or equip any Residence having two units or fewer with fire sprinklers in violation of current law.  (Sec. 1, 2)

6. Declares the provisions do not diminish the statutory rights of a vacation or short-term rental.       (Sec. 1, 2)

Miscellaneous – Municipalities

7. States that whether a municipal regulation complies with this act is a judicial question requiring the municipality to establish that the regulation is compliant.  (Sec. 1)

8. Prescribes defined terms for municipalities: goods; home-based business; immediate family member.  (Sec. 1)

Miscellaneous – Counties

9. States that whether a county regulation complies with this act is a judicial question requiring the county to establish by clear and convincing evidence that the regulation is compliant.  (Sec. 2)

10. Revises the county definition of home-based business and deletes the definition and references to a license.  (Sec. 2)

11. Strikes the requirement to obtain a county home-based business license.  (Sec. 2)

Current Law

A county ordinance may not restrict a licensed home-based business from the following:

a) Installing fixtures.

b) Displaying a 24-inch by 24-inch temporary sign during business hours.

c) Offering or selling goods.

d) Traffic generated by the home-based business, if the traffic remains reasonable and does not obstruct access.

e) Having more than one customer on the property at one time.

f) Employing a resident of the home, an immediate family member, or one or two individuals from outside of the home.

Statute permits a county to impose reasonable operating requirements on a home-based business (A.R.S. § 11-820).  

A municipality or county cannot adopt a code or ordinance that prohibits a person from choosing to install fire sprinklers or not, excluding codes adopted before December 31, 2009.  Further, the municipality or county board of supervisors cannot impose any related fine or penalty and must include the above information on any fire sprinkler permit application.  Statute is specific to single family homes and residential buildings with two or fewer units.  (A.R.S. § 9-807 and A.R.S.  § 11-861)

Additional Information

Laws 2017, Chapter 228 added county ordinance exemptions for licensed home-based business regarding traffic generated by the home-based business, having more than one customer on the property at one time and employing a resident of the home, an immediate family member, or one or two individuals from outside of the home.

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Fifty-third Legislature                  SB 1387

Second Regular Session                               Version 2: Appropriations

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