AMENDED

ARIZONA STATE SENATE

RESEARCH STAFF

GRANT HANNA

LEGISLATIVE RESEARCH ANALYST

COMMERCE & PUBLIC SAFETY COMMITTEE

Telephone: (602) 926 -3171

TO:                  MEMBERS OF THE SENATE

DATE:            March 21, 2018

SUBJECT:      Strike everything amendment to H.B. 2532, relating to occupational regulation; municipalities; counties; hearing

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Purpose

Requires a local government to hold a public hearing to demonstrate necessity before adopting an occupational fee or licensing requirement on any occupation, trade or profession.

Background

A municipality may not base a licensing decision on a requirement or condition that is not specifically authorized by statute, rule, ordinance or code. A general grant of authority does not constitute a basis for imposing a licensing requirement (A.R.S. § 9-832). Unless authorized by federal, state or local law, a city or town may not take any action that materially increases the regulatory burdens on a business unless there is a threat to the health, safety and welfare of the public that has not been addressed by legislation or industry regulation within the proposed, regulated field (A.R.S. § 9-841). Municipalities are also required to avoid duplication of other laws that do not enhance regulatory clarity (A.R.S. § 9-834).

State boards and commissions are statutorily established to license and regulate various professions and occupations. A board or commission may not base a licensing decision in whole or in part on a requirement or condition that is not specifically authorized by statute or rule (A.R.S. § 41-1030). Unless covered by an explicit exemption, a rule related to occupational licensing requires approval by the Governor's Regulatory Review Council (GRRC). GRRC may not approve a rule unless the probable benefits of the rule outweigh the probable costs. The board or commission must demonstrate that it has selected the alternative that imposes the least burden and costs necessary to achieve the underlying regulatory objective (A.R.S. § 41-1052).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Requires a city, town or county (local government) to demonstrate that a new occupational fee or licensing requirement, before implementation, is necessary to protect the health, safety or welfare of the public.

2. Requires a local government to hold a public hearing, with notice, before adopting an occupational fee or licensing requirement on any occupation, trade or profession.

3. Sunsets existing occupational fees and licensing requirements three years from the general effective date, unless the local government holds a public hearing at least three months before requirement expiration to demonstrate necessity.

4. Sunsets all occupational fees and licensing requirements five years after adoption, unless the local government holds a public hearing.

5. Requires a local government that adopts an occupational fee or licensing requirement to establish administrative rules and procedures for application and enforcement.

6. Allows a local government to:

a) assign or delegate administrative powers and duties to any agency, as necessary;

b) create administrative agencies;

c) provide supporting officials; and

d) provide funds for the compensation of supporting officers, employees and agencies.

7. Assigns the burden of demonstrating necessity to the local government.

8. Allows a local government to impose an occupational fee or licensing requirement on a structured sober living home, an adult service provider or a person seeking employment in an adult oriented business.

9. Defines licensing requirement as a:

a) rule, regulation, practice or policy that allows an individual to use an occupational title or work in a lawful occupation, trade or profession; or

b) a regulatory requirement that prevents an individual from using an occupational title.

10. Exempts business licenses, facility licenses, building permits, zoning regulations and land use regulations from the definition of licensing requirement.

11. Defines occupational fee as a fee or tax imposed on an individual to use an occupational title or work in a lawful occupation, trade or profession.

12. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Extends sunset timeframes from three years to five years.

2. Removes private action permissibility.

3. Removes state licensing preemption.

4. Modifies the definition of licensing requirement.

Senate Action

COMPS           3/19/18            DPA/SE          6-1-1