SB1162 - 561R

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

Section 1. Title 9, chapter 4, article 6.1, Arizona Revised Statutes, is amended by adding section 9-462.10, to read:

START_STATUTE9-462.10. Restriction on regulation; home-based businesses; no-impact home-based businesses; exceptions; definitions

A. A home-based business shall be allowed as a use by right if the home-based business does not supersede any deed restriction, covenant or agreement restricting the use of land, a master deed or any other document applicable to a common interest ownership community.

B. A municipality may not prohibit a no-impact home-based business or require a person to apply for, register or obtain a permit, license, variance or other type of prior municipal approval to operate a no-impact home-based business.

C. A municipality may establish reasonable regulations on a home-based business if the regulations are narrowly tailored for the following purposes:

1. Protecting the public health and safety, including existing municipal regulations related to fire and building codes, health, sanitation, transportation or traffic control and solid or hazardous waste, pollution and noise control.

2. Limiting or prohibiting the use of a home-based business for the purposes of maintaining a structured sober living home, selling illegal drugs or liquor, pornography, obscenity, nude or topless dancing or other adult-oriented businesses.

3. Ensuring that the business activity is:

(a) Compatible with residential use of the property and the surrounding residential area.

(b) Secondary to the use of the property as a residential dwelling.

D. A municipality may not require a person as a condition of operating a home-based business to:

1. Apply for rezoning of the property for commercial use.

2. Obtain a home-based business license or other general business license.

3. Install or equip fire sprinklers in a single-family detached residential dwelling or any residential dwelling with not more than two dwelling units.

E. A question about whether an adopted municipal regulation complies with this section shall be a judicial question, and the municipality that enacted the regulation shall establish by clear and convincing evidence that the regulation complies with this section.

F. For the purposes of this section:

1. "Goods" means any merchandise, equipment, products, supplies or materials.

2. "Home-based business" means 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 property.

3. "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild or stepsibling of the homeowner or tenant, whether related by adoption or blood.

4. "No-impact home-based business" means:

(a) Business activities that are limited to the sale of lawful goods or services.

(b) A business that employs only the following:

(i) Residents of the primary dwelling.

(ii) Immediate family members of residents of the primary dwelling.

(iii) Not more than three individuals who are not residents of the primary dwelling.

(i) Do not generate on-street parking or a substantial increase in traffic in the residential area.

(ii) Occur inside the residential dwelling.

(iii) Are not visible from the street.

(iv) Do not violate any regulation established pursuant to subsection C of this section. END_STATUTE

Sec. 2. Section 11-820, Arizona Revised Statutes, is amended to read:

START_STATUTE11-820. Restriction on regulation; home-based businesses; no-impact home-based businesses; exceptions; definitions

A. Any ordinance authorized by this chapter shall not restrict or otherwise regulate the owner of a home-based business that holds a valid license from:

1. Making residential property improvements to add doors, shelving or display racks for use by the home-based business.

2. Displaying a temporary commercial sign on the residential property during business hours, if the sign is not more than twenty-four inches by twenty-four inches.

3. Selling or offering for sale any goods.

4. Generating traffic, parking or delivery activity that does not cause on-street parking congestion or a substantial increase in traffic through the residential area.

5. Having more than one client on the property at one time.

6. Employing any of the following:

(a) Residents of the primary dwelling.

(b) Immediate family members.

B. This section does not preclude a county from imposing reasonable operating requirements on a home-based business or a residential property used by a home-based business.

B. A county may not prohibit a no-impact home-based business or require a person to apply for, register or obtain a permit, license, variance or other type of prior county approval to operate a no-impact home-based business.

C. A county may establish reasonable regulations on a home-based business if the regulations are narrowly tailored for the following purposes:

1. Protecting the public health and safety, including existing county regulations related to fire and building codes, health, sanitation, transportation or traffic control and solid or hazardous waste, pollution and noise control.

3. Ensuring that the business activity is:

(a) Compatible with residential use of the property and the surrounding residential area.

(b) Secondary to the use of the property as a residential dwelling.

D. A county may not require a person as a condition of operating a home-based business to:

1. Apply for rezoning of the property for commercial use.

2. Obtain a home-based business license or other general business license.

3. Install or equip fire sprinklers in a single-family detached residential dwelling or any residential dwelling with not more than two dwelling units.

E. A question about whether an adopted county regulation complies with this section shall be a judicial question and the county that enacted the regulation shall establish by clear and convincing evidence that the regulation complies with this section.

C. f. For the purposes of this section:

1. "Goods" means any merchandise, equipment, products, supplies or materials.

2. "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.

3. "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild or stepsibling, whether related by adoption or blood.

4. "License" means any permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency, department, board or commission of this state or of any political subdivision of this state for the purpose of operating a business in this state or to an individual who provides a service to any person and the license is required to perform that service.

4. "No-impact home-based business" means:

(a) Business activities that are limited to the sale of lawful goods or services.

(b) A business that employs only the following:

(i) Residents of the primary dwelling.

(ii) Immediate family members of residents of the primary dwelling.

(iii) Not more than three individuals who are not residents of the primary dwelling.

(i) Do not generate on-street parking or a substantial increase in traffic in the residential area.

(ii) Occur inside the residential dwelling.

(iii) Are not visible from the street.

(iv) Do not violate any regulation established pursuant to subsection C of this section. END_STATUTE