ARIZONA HOUSE OF REPRESENTATIVES Fifty-seventh Legislature First Regular Session
	House: WM DP 5-4-0-0

---

HB 2722: public resources; expenditures; prohibition

Sponsor: Representative Carter N, LD 15

House Engrossed

Overview

The Taxpayer Protection Act creates an new article in statute limiting public entity expenditures for use towards a public purpose and outlines judicial procedures to challenge expenditures, loans or uses of public resources.

History

Title 1, chapter 5, article 1 currently outlines the eligibility requirements, documentation, applicable violations and definitions regarding federal, state and local public benefits (A.R.S. § § 1-501, 1-502, 1-503, 1-504).

The Arizona constitution states that the state, counties, cities, towns, municipalities and subdivisions of the state cannot give or loan credit or make donations or grants to individuals, associations and corporations (Ariz. Const. art 9 § 7). This is referred to as the gift clause.

The Wistuber Court defined the appropriate test for avoiding a constitutional violation: the private entity must use public property or funds for a public purpose, and there must be consideration that is not so inequitable and unreasonable that the government’s donation or grant of property amounts to an abuse of discretion (141 Ariz. At 349).

Provisions

1. Changes the heading of title 1, chapter 5 from Public Programs to Public Resources. (Sec. 1)

2. Defines consideration, control, public entity, public purpose and public resources. (Sec. 2)

3. Specifies that irrigation, power, electrical, agricultural improvement, drainage and flood control districts and tax levying districts are not included under the definition of public entity. (Sec. 2)

4. Prescribes that a public entity may not spend, loan or allow the use of public resources or the entity's taxing power to aid any individual, association, corporation or other private party unless it is done for a public purpose, is supported by consideration and the public entity has control over the expenditure, loan or use of public resources. (Sec. 2)

5. Allows the Attorney General or a taxpayer of Arizona to file an action in the court of General Jurisdiction challenging expenditures, loans or use of public resources. (Sec. 2)

6. Prescribes that a plaintiff will be found successful if the court finds a preponderance of evidence that:

a) the challenged expenditure, loan or use of public resources isn't used to advance a public purpose;

b) the challenged expenditure, loan or use of public resources isn't supported by consideration; or

c) the public entity could not properly maintain control over the expenditure, loan or use of public resources. (Sec. 2)

7. Entitles this act as the Taxpayer Protection Act. (Sec. 3)

---------- DOCUMENT FOOTER ---------

                        HB 2722

Initials VP/DD          Page 0 House Engrossed

---------- DOCUMENT FOOTER ---------