ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

First Regular Session

Senate: COM DP 4-2-1-0 | 3rd Read 16-13-1-0


SB 1162: home-based businesses; restrictions; prohibition

Sponsor: Senator Kaiser, LD 2

Committee on Regulatory Affairs

Overview

Establishes that a home-based business must be allowed as a use by right, if the business does not supersede any existing restrictions. Authorizes a municipality or county to establish reasonable regulations on home-based businesses.

History

A municipality or county may not restrict or regulate a license holding owner of a home-based business from: 1) making residential property improvements to add doors, shelving or display racks for use by the business; 2) displaying a temporary commercial sign during business hours; 3) selling or offering for sale any goods; 4) generating traffic, parking or delivery activity that does not cause parking congestion or a substantial increase in traffic in the residential area; or 5) having more than one client on the property at once. Furthermore, a home-based business may employ residents of the primary dwelling and immediate family members, as well as 1-2 employees who are not residents or immediate family members.

Currently, the owner of a home-based business must hold a valid license, as defined in statute. Additionally, a home-based business means 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.

Finally, statute authorizes a county to impose reasonable operating requirements on a home-based business or a residential property used by a home-based business (A.R.S. § 11-820).

Provisions

1.   ☐ Prop 105 (45 votes)	     ☐ Prop 108 (40 votes)      ☐ Emergency (40 votes)	☐ Fiscal NoteStates that a home-based business is allowed as a use by right if it does not supersede any deed restrictions, covenants or land use agreement, master deed or other document that applies to a common interest ownership community. (Sec. 1, 2)

2.   Restricts a municipality or county from prohibiting a no-impact home-based business or requiring a person to obtain a permit, license or prior municipal approval to operate. (Sec. 1, 2)

3.   Permits a municipality or county to establish reasonable regulations on a home-based business within the confines of:

a)   protecting the public health and safety, including the current regulations pertaining to fire and building codes, health, sanitation, transportation or traffic control, solid or hazardous waste, pollution and noise control;

b)   limiting or prohibiting the use for purposes of maintaining a structured sober living home, selling illegal drugs or liquor, pornography, obscenity, nude or topless dancing or other adult oriented businesses; and

c)   ensuring the business activity is compatible with the residential property use, secondary to its use as a residential dwelling and that it complies with state and federal laws, as well as applicable taxes. (Sec. 1, 2)

4.   Prohibits a municipality or county, as a condition for a person to operate a home-based business, to do any of the following:

a)   apply to rezone the property for commercial use;

b)   obtain a home-based or other business license; or

c)   install fire sprinklers in a residential dwelling with one or two dwelling units. (Sec. 1, 2)

5.   Stipulates that whether a city or county regulation complies with the statutory provisions is a judicial question and the regulatory entity must establish by clear and convincing evidence that the provision complies with state law. (Sec. 1, 2)

6.   Removes the requirement for a home-based business to obtain a license. (Sec. 2)

7.   Revises the county restrictions and regulations for home-based businesses. (Sec. 2)

8.   Defines goods, home-based business, immediate family member and no-impact home-based business. (Sec. 1, 2) 

9.   Makes a conforming change. (Sec. 2)

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13.                    SB 1162

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