Assigned to COMPS & GOV FOR
COMMITTEE
Assigned to COMPS & GOV FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
home-based businesses; local regulation
Purpose
Restricts city, town or county regulations on no-impact home-based businesses.
Background
A home-based business is any business for the limited manufacture, provision or sale of goods or services that is owned and operated by the owner or tenant of the residential property. Current law prohibits a county ordinance that restricts a home-based business from: 1) making certain residential property improvements; 2) displaying a temporary commercial sign up to 24 by 24 inches; 3) offering any goods for sale; 4) generating limited traffic, parking or delivery activity; 5) hosting more than one client at a time; or 6) employing residents, family members and two other individuals (A.R.S. § 11-820). All 15 counties have enacted operating requirements for home‑based businesses, including parking, traffic and employment zoning ordinances.
Current law allows municipalities to enact ordinances that regulate the use of land or structures to conserve public health and safety including special zoning districts, building-use restrictions, parking and loading restrictions, and signage regulations (A.R.S. § 9-462.01).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Local Governments
1. Designates, as a no-impact home-based business, a business that is invisible from the street and only:
a) employs residents of the primary dwelling or immediate family members of the owner;
b) employs no more than three individuals that reside outside of the primary dwelling;
c) sells only lawful goods and services; and
d) operates inside the residential dwelling.
2. Prohibits a city, town or county from permitting, licensing or otherwise prohibiting operation of a no-impact home-based business.
3. Prohibits a city, town or county from requiring a home-based business owner to rezone the property, obtain any business licenses or install fire sprinklers in a single-family dwelling.
Cities and Towns
4. Establishes the use of a residential dwelling for a home-based business as a permitted use, superseded only by deed restrictions on land use, including residential use restrictions, and documents applicable to common interest ownership communities.
5. Prohibits a no-impact home-based business from generating any on-street parking.
6. Permits a city or town to establish tailored regulations on no-impact home‑based businesses to:
a) protect public health and safety;
b) ensure that business activity is compatible with, and secondary to, residential property use; and
c) limit specified activity, including selling drugs that are illegal under state or federal law, selling liquor, operating a structured living home, pornography, obscenity, nude or topless dancing or other adult-oriented activities.
Counties
7. Establishes the use of a residential dwelling for a home-based business as a use permitted by right, superseded only by deed restrictions on land use, including residential use restrictions and documents applicable to common interest ownership communities.
8. Allows a no-impact home-based business to generate parking activity that does not cause congestion, make residential property improvements and display a temporary commercial sign up to 24 by 24 inches.
9. Permits a county to establish narrowly-tailored regulations, supported by clear evidence, on no-impact home‑based businesses to:
a) protect public health and safety;
b) ensure that business activity is compatible with, and secondary to, residential property use; and
c) limit specified activity, including selling drugs that are illegal under state or federal law, selling liquor, operating a structured living home, pornography, obscenity, nude or topless dancing or other adult-oriented activities.
Miscellaneous
10. Maintains privileges or rights of vacation rentals and short-term rentals.
11. Defines goods as any merchandise, equipment, products, supplies or materials.
12. Defines home-based business as any business for the manufacture, provision, or sale of goods or services that is owned and operated by the owner or tenant of the residential dwelling
13. Defines immediate family member as a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild or stepsibling related by blood or adoption.
14. Repeals the definition of license.
15. Makes technical and conforming changes.
16. Becomes effective on the general effective date.
House Action
COM 1/30/18 DPA 6-3-0-0
3rd Read 2/22/18 36-20-4
Prepared by Senate Research
March 8, 2018
GH/JP/lb