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ARIZONA HOUSE OF REPRESENTATIVESFifty-fifth Legislature First Regular Session |
House: NREW DPA 6-4-0-0 |
HB 2737: corporation commission actions; investigation
Sponsor: Representative Parker, LD 16
Caucus & COW
Overview
Directs the Attorney General to investigate the Arizona Corporation Commission (ACC) at the request of lawmakers for certain agency actions and requires 10% of the commission's operating budget to be withheld if the Arizona Supreme Court determines this agency has exceeded its statutory authority or is not executing or enforcing statute.
History
Arizona Corporation Commission
The ACC is established in the Constitution of Arizona to regulate public service corporations, which includes non-municipal corporations that furnish gas, oil or electricity for light, fuel or power (Constitution of Arizona, Article 15, § 2). Specifically, the ACC has the full power to prescribe rules, regulations and orders that govern a public service corporation's rates, charges and classifications, which is collectively referred to as its "ratemaking authority." Additionally, the ACC can prescribe the forms of contracts and systems of accounts these corporations employ and can make and enforce reasonable rules, regulations and orders for the convenience, comfort, safety and preservation of health of the corporation's employees and patrons (Constitution of Arizona, Article 15, § 3).
This authority, along with other powers granted to the ACC in the Constitution of Arizona and Arizona Revised Statutes, manifest in its three administrative divisions:
1) The Corporations Division provides public access to corporate annual reports, articles of incorporation and corporate status change document;
2) The Securities Division regulates securities dealers and investment advisers; and
3) The Utilities Division monitors approximately 500 public service corporations operating in Arizona and establishes public utility rates.
For FY 2021, the ACC had an operating budget of approximately $27.8 million (Laws 2020, Chapter 58, § 19).
Attorney General
The Attorney General is an elected constitutional officer (Constitution of Arizona, Article 5, § 1). Among his many roles, this official provides legal counsel to state agencies, enforces various laws and investigates and prosecutes criminal cases (A.R.S. § 41-192 et seq.).
Provisions
1. Directs the Attorney General to investigate at the request of one or more lawmakers:
a) Any decision, order or rule adopted or amended by the ACC that the lawmaker alleges is beyond that agency’s authority; and
b) Whether the ACC is not executing or enforcing a statute. (Sec. 1)
2. Instructs the Attorney General to:
a) make a written report of this investigations’ findings and conclusions within 30 days of receiving the request; and
b) provide a copy of this report to the Governor, Senate President, Speaker of the House, the lawmakers who made the original request and the Secretary of State. (Sec. 1)
3. Requires the Attorney General to:
a) Provide notice to the ACC if he determines that this agency either lacks the authority to adopt or amend the decision, order or rule under investigation or is not executing or enforcing the statute that is the subject of the investigation;
b) File a special action in the Arizona Supreme Court if the ACC does not resolve the violation within 30 days;
c) File a special action in the Arizona Supreme Court if he determines that the ACC may have the authority to adopt or amend the decision, order or rule under investigation or may be executing or enforcing the statute that is the subject of the investigation; and
d) Take no further action if he determines that the ACC has the authority to adopt the decision, order or rule under investigation or is executing or enforcing the statute that is subject of the investigation. (Sec. 1)
4. Mandates that the Arizona Supreme Court prioritize the Attorney General’s special action over all other cases. (Sec. 1)
5. Requires the Arizona Department of Administration’s General Accounting Office to withhold 10% of the ACC’s operating lump sum budget for the current fiscal year equally over the next four quarterly budget allocations if the Arizona Supreme Court determines that the ACC lacks the authority to adopt the decision, order or rule or is not executing or enforcing the statute. (Sec. 1)
6. Clarifies that this law does not apply to any order or decision setting rates for public service corporations. (Sec. 1)
Amendments
Committee on Natural Resources, Energy & Water
1. Removes language allowing lawmakers to request the Attorney General investigate whether the ACC is not executing or enforcing statute.
2. Allows lawmakers to request that the Attorney General investigate any decision, order or rule adopted or amended by the ACC that violates state law, except for state laws enacted before the 2021 legislative session.
3. Specifies that lawmakers must submit an allegation that the ACC has exceeded its constitutional authority or violated state law within 60 days after that agency's decision, order or rule is adopted or amended.
4. Authorizes the Attorney General to consider, when determining whether to file a special action with the Arizona Supreme Court, whether the ACC has begun resolving the alleged violation in good faith by publishing a timeline for completion.
5. Clarifies that the Attorney General's special action before the Arizona Supreme Court will take priority (and not precedence over all other cases).
6. Directs the Arizona Department of Administration's General Accounting Office to withhold 10% of the ACC's operating budget (in quarterly budget allocations) if the Arizona Supreme Court determines that the ACC is violating state law.
7. Mandates that the General Accounting Office continue withholding 10% of the ACC's operating budget until the violation, as determined by the Arizona Supreme Court, has been resolved.
8. Instructs the Attorney General to continue monitoring the ACC's response until the agency has resolved its action, at which point the Attorney General must notify the Governor, Speaker of the House, Senate President and lawmakers who made the original request.
9. Authorizes the ACC to request its own determination on whether its proposed decision, order or rule violates state law or the Constitution of Arizona from the Attorney General.
10. Stipulates that if the ACC requests and obtains this determination, it will be exempt from the bill's provisions related to withholding 10% of its operating budget.
11. Requires the Attorney General's determination to the ACC to be available to the public.
12. Makes conforming changes.
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HB 2737
Initials PAB Page 0 Caucus & COW
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