SB1663 - 542R

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

Section 1. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3027.05, to read:

START_STATUTE41-3027.05. State permitting council; termination July 1, 2027

A. The state permitting council terminates on July 1, 2027.

B. Title 41, chapter 16 and this section are repealed on January 1, 2028. END_STATUTE

Sec. 2. Title 41, Arizona Revised Statutes, is amended by adding chapter 16, to read:

CHAPTER 16

STATE PERMITTING COUNCIL

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE41-2101. Definitions

In this chapter, unless the context otherwise requires:

1. "Agency" has the same meaning prescribed in section 41‑1001.

2. "Authorization" means a license, permit, approval, finding, determination or other administrative decision that is issued by this state, a county or municipal agency or a metropolitan planning organization that is required or authorized under state law to site, construct, reconstruct or commence operations of a covered project that is administered by an agency.

3. "Cooperating state agency" means an agency that has either of the following:

(a) Jurisdiction under state law.

(b) Special expertise in environmental review and permitting as determined by the council.

4. "Council" means the state permitting council.

5. "Covered project" means an activity in this state that requires authorization, a land use permit or an environmental review by an agency, that involves infrastructure construction for renewable or conventional energy production, electricity transmission, mining, land revitalization, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines or manufacturing or any other sector as determined by a majority vote of the council and that is any of the following:

(a) Subject to applicable state environmental laws, permitting regulations and other relevant government authorizations.

(b) Likely to require a total investment of more than $______.

(c) Subject to applicable state environmental laws, the size and complexity of which, in the opinion of the council, make the covered project likely to benefit from enhanced oversight and coordination.

6. "Environmental review" means agency procedures and processes for applying a categorical exclusion or for preparing an environmental assessment, environmental impact statement or other document.

7. "Permitting dashboard" means an online tool for agencies, project developers and interested members of the public to track the agency's environmental review and authorization processes for covered projects. END_STATUTE

START_STATUTE41-2102. State permitting council; agency chief environmental review and permitting officer

A. The state permitting council is established.

B. Each head of the following agencies shall appoint an agency employee to serve on the council:

1. _________.

2. _________.

3. _________.

4. _________.

5. _________.

c. Appointed council members must have the authority to enter into binding decisions on behalf of the agency for which they are employed. By majority vote, the council may appoint additional members to the council.

D. The governor or the governor's designee shall appoint a full‑time executive director to the council who shall serve as chairperson of the council.

E. The agency heads of the agencies listed in subsection B of this section shall designate one or more agency employees of the agency in which the agency head serves to serve as an agency chief environmental review and permitting officer. In carrying out the duties of this chapter, the agency chief environmental review and permitting officer shall report directly to the council member who is Appointed from the agency for which the agency chief environmental review and permitting officer is employed. END_STATUTE

START_STATUTE41-2103. Executive director; covered project categories; performance schedules

A. The executive director, in consultation with the council, shall:

1. Not later than one hundred eighty days after the effective date of this section, establish an inventory of covered projects that are awaiting an environmental review or authorization from an agency.

2. Categorize the covered projects in the inventory as appropriate, based on the sector that the covered project affects and the project type.

3. For each category, identify the types of environmental reviews and authorizations that are commonly involved.

4. Add covered projects to the inventory after receiving notice from the council.

5. Designate a facilitating state agency for each category of covered projects prescribed in paragraph 2 of this subsection.

6. Publish a list of designated facilitating state agencies for each category of covered projects in the inventory on the permitting dashboard in an easily accessible format.

B. Not later than one year after the effective date of this section, the executive director, in consultation with the council, shall develop recommended performance schedules, including intermediate and final completion dates, for environmental reviews and authorizations that are most commonly required for each category of covered projects prescribed in subsection A, paragraph 2 of this section.

C. The performance schedules developed pursuant to subsection B of this section must reflect the use of the most efficient applicable processes, including aligning state and federal environmental reviews of the covered projects and reducing permitting and covered project delivery times. The final completion dates in any performance schedule for the completion of an environmental review or authorization may not exceed the average time to complete an environmental review or authorization for a covered project within that category. The executive director, in consultation with the council, shall calculate the average completion time based on data from the preceding two calendar years, and the average completion time shall begin on the date on which the Executive Director makes a specific entry for the covered project on the permitting Dashboard pursuant to section 41‑2107, subsection A and end on the date of the issuance of a record of decision or other final agency action on the environmental review or authorization.

D. Each performance schedule must specify that any decision by an agency on an environmental review or authorization must be issued not later than one hundred eighty days after the date on which all information needed to complete the environmental review or authorization, including any hearing that an agency holds on the matter, is in the possession of the agency.

E. Not later than two years after the date on which the performance schedules are established under this section, and at least once every two years thereafter, the executive director, in consultation with the council, shall review and revise the performance schedules.

F. The executive director, in consultation with the council, may recommend to the governor, as appropriate, that guidance be issued as necessary for agencies to carry out responsibilities under this chapter and to effectuate the adoption by agencies of the best practices and recommendations of the Council as prescribed in section 41‑2104. END_STATUTE

START_STATUTE41-2104. Council best practices

A. The council shall make recommendations to the executive director with respect to the designations under section 41‑2103, subsection A, paragraph 5 and the performance schedules under section 41‑2103, subsection B and may update these recommendations as needed.

B. Not later than one year after the effective date of this section, and at least annually thereafter, the council may issue recommendations on the best practices for all of the following:

1. Enhancing early stakeholder engagement, including fully considering and, as appropriate, incorporating recommendations provided in public comments on any proposed covered project.

2. Ensuring timely decisions regarding environmental reviews and authorizations, including through the development of performance metrics.

3. Improving coordination between state and nonstate governmental entities, including through the development of common data standards and terminology across agencies.

4. Increasing transparency.

5. Reducing information collection requirements and other administrative burdens on agencies, covered project sponsors and other interested parties.

6. Developing and making available to applicants appropriate geographic information systems and other tools.

7. Creating and distributing training materials that are useful to state, tribal and local permitting officials.

8. Addressing other aspects of infrastructure permitting, as determined by the council.

C. The council shall meet at least annually with groups or individuals representing tribal and local governments that are engaged in the infrastructure permitting process. END_STATUTE

START_STATUTE41-2105. Agency chief environmental review and permitting officer

An agency chief environmental review and permitting officer shall:

1. Advise the respective agency council member on matters related to environmental reviews and authorizations.

2. Provide technical support, when requested to facilitate efficient and timely processes for environmental reviews and authorizations for covered projects under the jurisdictional responsibility of the agency, including supporting timely identification and resolution of potential disputes within the agency or between the agency and other agencies.

3. Analyze agency environmental review and authorization processes, policies and authorities and make recommendations to the respective agency council member for ways to standardize, simplify and improve the efficiency of the processes, policies and authorities, including by implementing guidance issued under section 41‑2103, subsection F and other best practices and using information technology and geographic information system tools within the agency and across agencies to the extent consistent with state and federal law.

4. Review and develop training programs for agency staff that support and conduct environmental reviews or authorizations. END_STATUTE

START_STATUTE41-2106. Covered projects; notice; participating and cooperating state agencies designation; lead state agency designation

A. A project sponsor of a covered project shall submit to the executive director and the facilitating state agency notice of the initiation of a proposed project. If at the time notice is submitted the Executive Director has not designated a facilitating state agency under section 41‑2103, subsection A, paragraph 5 for the categories of covered projects noticed, the agency that receives the notice shall be designated as the facilitating state agency. Each notice shall include all of the following:

1. A statement of the purposes and objectives of the proposed project.

2. A concise description, including the general location of the proposed project and a summary of geospatial information, if available, that illustrates the covered project area and the locations, if any, of environmental, cultural and historic resources.

3. A statement regarding the technical and financial ability of the project sponsor to construct the proposed project.

4. A statement of any state financing, environmental reviews and authorizations that are anticipated to be required to complete the proposed project.

5. An assessment that the proposed project meets the definition of a covered project under this chapter and a statement of reasons supporting the assessment.

B. Not later than forty‑five days after the date on which the executive director must make a specific entry for the covered project on the permitting dashboard under section 41‑2107, the facilitating state agency or lead state agency, as applicable, shall do both of the following:

1. Identify all state and nonstate agencies and governmental entities that are likely to have financing, environmental review or authorization responsibilities or other responsibilities with respect to the proposed project.

2. Invite all state and, as applicable, federal agencies to become a participating state agency or a cooperating state agency, as appropriate, in the environmental review and authorization management process. On request and a showing of changed circumstances, the Executive Director may designate an agency that has opted out to be a participating state agency or cooperating state agency, as appropriate.

C. An agency that is invited to become a participating state agency under subsection B of this section shall be designated as a participating state agency or cooperating state agency for a covered project, unless the agency informs the facilitating state agency or lead state agency, as applicable, in writing before the deadline under subsection B of this section that the agency has no jurisdiction or authority with respect to the proposed project or does not intend to exercise authority related to or submit comments on the proposed project. The designation made under this subsection does not give the participating state agency authority or jurisdiction over the covered project or expand any jurisdiction or authority a cooperating state agency may have over the proposed project.

D. On establishment of the lead state agency, the lead state agency shall assume the responsibilities of the facilitating state agency under this section. If the lead state agency assumes the responsibilities of the facilitating state agency, the facilitating state agency may be designated as a cooperative state agency or a participating state agency. On the request of a participating state agency or project sponsor, the executive director may designate a different agency as the facilitating state agency or lead state agency, as applicable, for a covered project, if the facilitating state agency or lead state agency or the executive director receives new information regarding the scope or nature of a covered project that indicates that the project should be placed in a different category pursuant to section 41‑2103. The governor or governor's designee shall resolve any dispute over designation of a facilitating state agency or lead state agency for a particular covered project. END_STATUTE

START_STATUTE41-2107. Permitting dashboard; permitting timetable; dispute resolution

A. The executive director shall maintain an online database to be known as the permitting dashboard to track the status of environmental reviews and authorizations for a covered project in the inventory described in section 41‑2103. The permitting dashboard shall include a specific and searchable entry for each covered project. Not later than fourteen days after the date on which the executive director adds a covered project to the inventory under section 41‑2103, the executive director shall create a specific entry on the permitting dashboard for the covered project. Not later than fourteen days after the date on which the executive director receives a notice under section 41‑2106, subsection A, the executive director shall create a specific entry on the permitting dashboard for the covered project, unless the executive director, facilitating state agency or lead state agency, as applicable, determines that the project is not a covered project. If the facilitating state agency or lead state agency, as applicable, determines that the project is not a covered project, the project sponsor may submit a further explanation as to why the project is a covered project not later than fourteen days after the date of the determination under this subsection. Not later than fourteen days after receiving the explanation, the executive director shall make a final and conclusive determination as to whether the project is a covered project and, if the executive director determines that the project is a covered project, create a specific entry on the permitting dashboard for the covered project.

B. For each covered project that is added to the permitting dashboard under subsection A of this section, the facilitating state agency or lead state agency, as applicable, and each cooperating state agency and participating state agency shall post to the permitting dashboard a hyperlink that directs a user to a website that contains, to the extent consistent with applicable law, all of the following:

1. The notification submitted under subsection A of this section.

2. The application and supporting documents, if applicable, that have been submitted by a project sponsor for any required environmental review or authorization or a notice explaining how the public may obtain access to such documents if the documents are not available on the website.

3. A description of any agency action taken or decision made that materially affects the status of a covered project.

4. Any significant document that supports the action or decision described in paragraph 3 of this subsection.

5. A description of the status of any litigation to which the agency is a party that is directly related to the covered project, including, if practicable, any judicial document made available on an electronic docket that is maintained by a state or local court.

6. Any document described in this subsection that is not available by hyperlink on another website.

C. The information described in subsection B of this section must be posted to the website and made available by hyperlink on the permitting dashboard not later than five business days after the date on which the agency receives the information.

D. The executive director shall publish to the permitting Dashboard all of the following:

1. The permitting timetable established under subsection A or E of section.

2. The status of the compliance of each agency with the permitting timetable.

3. Any modifications of the permitting timetable.

4. An explanation of each modification described in subsection H of this section.

5. Any memorandum of understanding established under subsection F of this section.

E. Not later than sixty days after the date on which the executive director must make a specific entry for the covered project on the permitting Dashboard under subsection A of this section, the facilitating state agency or lead state agency, as applicable, in consultation with each coordinating state agency and participating state agency, shall establish a concise plan for coordinating public and agency participation in, and completion of, any required state environmental review and authorization for the covered project. The Coordinated Project Plan shall include the following information and be updated by the facilitating state agency or lead state agency, as applicable, at least once per quarter:

1. A list of and roles and responsibilities for all entities with environmental review or authorization responsibility for the covered project.

2. A permitting timetable that sets forth a comprehensive schedule of dates by which all environmental reviews and authorizations, and to the maximum extent practicable, state permits, reviews and approvals must be made.

3. A discussion of potential avoidance, minimization and mitigation strategies, if required by applicable law and known.

4. Plans and a schedule for public and tribal outreach and coordination, to the extent required by applicable law.

F. The coordinated project plan may be incorporated into a memorandum of understanding. As part of the coordination project plan, the facilitating state agency or lead state agency, as applicable, in consultation with each cooperating state agency and participating state agency, the project sponsor and any local government in which the covered project is located, with the concurrence of each cooperating state agency, shall establish a permitting timetable that includes intermediate and final completion dates for action by each participating state agency on any state environmental review or authorization required for the project. In establishing the permitting timetable, the facilitating state agency or lead state agency shall follow the performance schedules established pursuant to section 41‑2103, but may vary the timetable based on relevant factors, including:

1. The size and complexity of the covered project.

2. The resources available to each participating state agency.

3. The regional or state economic significance of the project.

4. The sensitivity of the natural or historic resources that may be affected by the project.

5. The financing plan for the project.

6. The extent to which similar projects in geographic proximity to the project were recently subject to environmental review or similar procedures under state law.

G. The executive director, in consultation with the appropriate agency chief environmental review and permitting officer and the project sponsor, as necessary, shall mediate any disputes regarding the permitting timetable. If a dispute remains unresolved thirty days after the date on which the dispute was submitted to the executive director, the governor or governor's designee shall facilitate a resolution of the dispute and direct the agencies that are party to the dispute to resolve the dispute by the end of the sixty‑day period beginning on the date of submission of the dispute to the executive director. Any action taken by the governor or governor's designee in the resolution of a dispute is final and conclusive and not subject to judicial review.

H. The facilitating state agency or lead state agency, as applicable, may modify a permitting timetable only if all of the following conditions are met:

1. The facilitating state agency or lead state agency, as applicable, and the affected cooperating state agencies, after consultation with the participating state agencies and the project sponsor, agree to a different completion date.

2. The facilitating state agency or lead state agency, as applicable, or the affected cooperating state agency provides a written justification for the modification.

3. In the case of a modification that would necessitate an extension of a final completion date under a permitting timetable established under subsection A or E of this section to a date more than thirty days after the final completion date originally established under subsection A or E of this section, the facilitating state agency or lead state agency submits a request to modify the permitting timetable to the executive director, who shall consult with the project sponsor and make a determination on the record, based on consideration of the relevant factors described under subsection F of this section, whether to grant the facilitating state agency or lead state agency, as applicable, authority to make such modification.

I. A completion date in the permitting timetable may not be modified within thirty days of the completion date.

J. Except as provided in subsection K of this section, the total length of all modifications to a permitting timetable that are authorized or made under this section, other than for reasons outside the control of state, local or tribal governments, may not extend the permitting timetable for a period of time greater than half of the amount of time from the establishment of the permitting timetable under subsection A of this section to the last final completion date originally established under subsection A of this section.

K. The governor or governor's designee, after consultation with the project sponsor, may allow the Executive Director to authorize additional extensions of a permitting timetable beyond the limit prescribed by subsection J of this section. In such a case, the governor or governor's designee shall transmit, not later than five days after making a determination to allow an authorization of extension under this subsection, a report to the legislature explaining why the modification is required. The report shall explain to the legislature with specificity why the original permitting timetable and the modifications authorized by the executive director failed to be adequate. The lead state agency or facilitating state agency, as applicable, shall transmit to the legislature, the governor or governor's designee and the executive director a supplemental report on progress toward the final completion date each year thereafter, until the permit review is completed or the project sponsor withdraws its notice or application or other request to which this section applies.

L. Each agency shall conform to the completion dates set forth in the permitting timetable established under subsection a of this section or with any completion date modified under subsection J of this section. If an agency fails to conform with a completion date for agency action on a covered project or is at significant risk of failing to conform with such a completion date, the agency shall do all of the following:

1. Promptly submit to the executive director for publication on the permitting dashboard an explanation of the specific reasons for failing or significantly risking failing to conform to the completion date and a proposal for an alternative completion date.

2. In consultation with the facilitating state agency or lead state agency, as applicable, establish an alternative completion date.

3. Each month thereafter until the agency has taken final action on the delayed authorization or review, submit to the executive director for posting on the permitting dashboard a status report describing any agency activity related to the project.

M. If the facilitating state agency or lead state agency, as applicable, has a reasonable basis to doubt the continuing technical or financial ability of the project sponsor to construct the covered project, the facilitating state agency or lead state agency may request that the project sponsor provide an updated statement regarding the ability of the project sponsor to complete the covered project. If the project sponsor fails to respond to a request within thirty days after receiving the request, the lead state agency or facilitating state agency, as applicable, shall notify the executive director, who shall publish an appropriate notice on the permitting dashboard. On publication of a notice, the completion dates in the permitting timetable shall be tolled and the agencies shall be relieved of the obligation to comply with subsection L of this section until such time as the project sponsor submits to the facilitating state agency or lead state agency, as applicable, an updated statement regarding the technical and financial ability of the project sponsor to construct the covered project.

N. Each agency shall conform to the completion dates set forth in the permitting timetable established under subsection A of this section, or with any completion date modified under subsection J of this section. If an agency fails to conform with a completion date for agency action on a covered project or is at significant risk of failing to conform with such a completion date, the agency shall do all of the following:

2. In consultation with the facilitating state agency or lead state agency, as applicable, establish an alternative completion date.

START_STATUTE41-2108. State, local and tribal government coordination

A. To the maximum extent practicable under applicable law, the facilitating state agency or lead state agency, as applicable, shall coordinate the state environmental review and authorization processes under this section with any local or tribal agency responsible for conducting any separate review or authorization of the covered project to ensure timely and efficient completion of environmental reviews and authorizations.

B. Any coordination plan between the facilitating state agency or lead state agency, as applicable, and any local or tribal agency, to the maximum extent practicable, shall be included in a memorandum of understanding. The facilitating state agency or lead state agency, as applicable, shall submit to the executive director each memorandum of understanding.

C. The facilitating state agency or lead state agency, as applicable, shall provide an expeditious process for project sponsors to confer with each cooperating state agency and participating state agency involved and, not later than sixty days after the date on which the project sponsor submits a request, to have each agency provide to the project sponsor information concerning all of the following:

1. the availability of information and tools, including preapplication toolkits, to facilitate early planning efforts.

2. Key issues of concern to each agency and to the public.

3. Issues that must be addressed before an environmental review or authorization can be completed.

D. A lead state agency may designate a participating state agency as a cooperating state agency. The designation may not affect any designation under section 41‑2106, subsection C. Any agency that is not designated as a participating state agency under section 41‑2106, subsection C may not be designated as a cooperating state agency.

E. On request of the executive director, the governor or governor's designee shall use best efforts to provide information for inclusion on the permitting dashboard on projects that are likely to require a total investment of more than $200,000,000 and an environmental impact statement under applicable state environmental laws. Inclusion on the permitting dashboard of information regarding such other projects may not subject those covered projects to any requirements of this chapter.

F. To integrate environmental reviews and authorizations, each agency, to the maximum extent practicable, shall:

1. carry out the obligations of the agency with respect to a covered project under any other applicable law concurrently and, in conjunction with, other environmental reviews and authorizations being conducted by other cooperating state agencies or participating state agencies, including environmental reviews and authorizations that are required under applicable state environmental laws, unless the agency determines that doing so would impair the ability of the agency to carry out the statutory obligations of the agency.

2. formulate and implement administrative, policy and procedural mechanisms to enable the agency to ensure completion of the environmental review process in a timely, coordinated and environmentally responsible manner.

G. A lead state agency shall issue a record of decision or finding of no significant impact, as appropriate, based on the document adopted under subsection A of this section and any supplemental report prepared pursuant to section 41‑2107, subsection K. END_STATUTE

START_STATUTE41-2109. Annual report

A. Not later than January 1, 2021 and each year thereafter for ten years, the executive director shall submit to the legislature a report detailing the progress accomplished under this chapter during the previous fiscal year. The report shall assess the performance of each participating state agency and lead state agency based on the best practices described in section 41‑2104, including all of the follow:

1. Agency progress in making improvements consistent with those best practices.

2. agency compliance with the performance schedules established under section 41‑2103.

B. Each councilmember, with input from the respective agency chief environmental review and permitting officer, shall have the opportunity to include comments concerning the performance of the agency in the report.

C. On or before January 1, 2024, the State Comptroller shall submit to the legislature a report that describes all of the following:

1. agency progress in making improvements consistent with the best practices issued under section 41‑2104.

2. agency compliance with the performance schedules established under section 41‑2103. END_STATUTE

START_STATUTE41-2110. Fee structure; rules; state environmental review and permitting improvement fund

A. The agency heads listed in section 41‑2102, with the guidance of the governor or governor's designee and in consultation with the executive director, after public notice and opportunity for comment, may establish a fee structure for project proponents to reimburse this state for reasonable costs incurred in conducting environmental reviews and authorizations for covered projects.

B. The fee structure established pursuant to subsection A of this section shall:

1. Be developed in consultation with affected project proponents, industries and other stakeholders.

2. Exclude parties for which the fee would impose an undue financial burden or is otherwise determined to be inappropriate.

C. The state environmental review and permitting improvement fund is established consisting of fees collected pursuant to the fee schedule established pursuant to this section. The executive director shall administer the fund. Monies in the fund are continuously appropriated and may be used solely for the purposes of administering, implementing and enforcing this chapter, including the expenses of the council.

D. The executive director, with the approval of the governor or governor's designee, may transfer monies from the fund to other agencies to facilitate timely and efficient environmental reviews and authorizations for proposed covered projects.

E. The regulations adopted pursuant to subsection A of this section must ensure that the use of monies will not impact impartial decision‑making with respect to environmental reviews or authorizations, either substantively or procedurally.

F. The agency heads listed in section 41‑2102 may transfer monies that are appropriated to their respective agencies or to local or tribal governments and that are not otherwise obligated to other affected agencies for the purpose of implementing this chapter. END_STATUTE

Sec. 3. Purpose

Pursuant to section 41‑2955, subsection E, Arizona Revised Statutes, the legislature establishes the state permitting council to streamline the permitting process for specified projects.

Sec. 4. Requirements for enactment; two-thirds vote

Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.