Bill Text: AZ SB1426 | 2016 | Fifty-second Legislature 2nd Regular | Introduced
Bill Title: Commerce authority; sunset continuation; reforms
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-02-02 - Referred to Senate CWD Committee [SB1426 Detail]
Download: Arizona-2016-SB1426-Introduced.html
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REFERENCE TITLE: commerce authority; sunset continuation; reforms |
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State of Arizona Senate Fifty-second Legislature Second Regular Session 2016
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SB 1426 |
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Introduced by Senator Farnsworth D
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AN ACT
Amending sections 5-572, 41-1502, 41-1503 and 41-1504, Arizona Revised Statutes; amending title 41, chapter 10, article 1, Arizona Revised Statutes, by adding section 41-1504.01; amending section 41‑1506, arizona revised statutes; repealing title 41, chapter 10, article 5, Arizona Revised Statutes; amending section 41-2706, Arizona Revised Statutes; repealing section 41-3016.29, Arizona Revised Statutes; amending title 41, chapter 27, article 2, Arizona Revised Statutes, by adding section 41‑3018.01; amending sections 43-409, 44-1843, 44-1861, 44-1892, 44-3324 and 44‑3325, Arizona Revised Statutes; relating to the Arizona Commerce Authority.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-572, Arizona Revised Statutes, is amended to read:
5-572. Use of monies in state lottery fund; report
A. If there are any bonds or bond related obligations payable from the state lottery revenue bond debt service fund, the state lottery revenue bond debt service fund shall be secured by a first lien on the monies in the state lottery fund after the payment of operating costs of the lottery, as prescribed in section 5‑555, subsection A, paragraph 1, until the state lottery bond debt service fund contains sufficient monies to meet all the requirements for the current period as required by the bond documents. Debt service for revenue bonds issued pursuant to this chapter shall be paid first from monies that would have otherwise been deposited pursuant to this section in the state general fund. After the requirements for the current period have been satisfied as required by the bond documents, the monies in the state lottery fund shall be expended for the expenses of the commission incurred in carrying out its powers and duties and in the operation of the lottery.
B. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsection A of this section, ten million dollars shall be deposited in the Arizona game and fish commission heritage fund established by section 17‑297.
C. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A and B of this section, five million dollars shall be allocated to the department of child safety for the healthy families program established by section 8‑481, four million dollars shall be allocated to the Arizona board of regents for the Arizona area health education system established by section 15‑1643, three million dollars shall be allocated to the department of health services to fund the teenage pregnancy prevention programs established in Laws 1995, chapter 190, sections 2 and 3, two million dollars shall be allocated to the department of health services for the health start program established by section 36‑697, two million dollars shall be deposited in the disease control research fund established by section 36‑274 and one million dollars shall be allocated to the department of health services for the federal women, infants and children food program. The allocations in this subsection shall be adjusted annually according to changes in the GDP price deflator as defined in section 41‑563 and the allocations are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. If there are not sufficient monies available pursuant to this subsection, the allocation of monies for each program shall be reduced on a pro rata basis.
D. If the state lottery director determines that monies available to the state general fund may not equal eighty‑four million one hundred fifty thousand dollars in a fiscal year, the director shall not authorize deposits to the Arizona game and fish commission heritage fund pursuant to subsection B of this section until the deposits to the state general fund equal eighty‑four million one hundred fifty thousand dollars in a fiscal year.
E. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through D of this section, one million dollars or the remaining balance in the fund, whichever is less, is appropriated to the department of economic security for grants to nonprofit organizations, including faith based organizations, for homeless emergency and transitional shelters and related support services. The department of economic security shall submit a report on the amounts, recipients, purposes and results of each grant to the governor, the speaker of the house of representatives and the president of the senate on or before December 31 of each year for the prior fiscal year and shall provide a copy of this report to the secretary of state.
F. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through E of this section, and after a total of at least ninety‑nine million six hundred forty thousand dollars has been deposited in the state general fund, three million five hundred thousand dollars shall be deposited in the Arizona competes fund established by section 41‑1545.01. the balance in the state lottery fund remaining after deposits into the Arizona competes fund shall be deposited in the university capital improvement lease‑to-own and bond fund established by section 15‑1682.03, up to a maximum of eighty percent of the total annual payments of lease-to-own and bond agreements entered into by the Arizona board of regents.
G. All monies remaining in the state lottery fund after the appropriations and deposits authorized in this section shall be deposited in the state general fund.
H. Except for monies expended for debt service of revenue bonds as provided in subsection A of this section, monies expended under subsection A of this section are subject to legislative appropriation.
I. The commission shall transfer monies prescribed in this section on a quarterly basis.
Sec. 2. Section 41-1502, Arizona Revised Statutes, is amended to read:
41-1502. Arizona commerce authority; board of directors; conduct of office; audit
A. The Arizona commerce authority is established. The mission of the authority is to provide private sector leadership in growing and diversifying the economy of this state, creating high quality employment in this state through expansion, attraction and retention of businesses and marketing this state for the purpose of expansion, attraction and retention of businesses.
B. The authority shall be governed by a board of directors consisting of:
1. The governor, who serves as chairperson.
2. The chief executive officer.
3. Seventeen private sector business leaders who are chief executive officers of private, for-profit enterprises. None of these members may be an elected official of any government entity. These members must be appointed from geographically diverse areas of this state and not all from the same county. These members shall serve staggered three-year terms of office beginning and ending on the third Monday in January. These members shall be appointed as follows:
(a) Nine members who are appointed by the governor.
(b) Four members who are appointed by the president of the senate.
(c) Four members who are appointed by the speaker of the house of representatives.
4. The following as ex officio members without the power to vote:
(a) The president of the senate.
(b) The speaker of the house of representatives.
(c) The president of the Arizona board of regents.
(d) The president of each state university under the jurisdiction of the Arizona board of regents.
(e) One president of a community college who is appointed by a statewide organization of community college presidents.
(f) The chairperson of the governor's council on small business, or its successor.
(g) The chairperson of the governor's council on workforce policy, if established by executive order pursuant to section 41‑1542.
(h) One member of the rural business development advisory council established by section 41‑1505 who is appointed by the governor.
(i) The president of a statewide organization of incorporated cities and towns who is appointed by the governor.
(j) The president of a statewide organization of county boards of supervisors who is appointed by the governor.
C. The following shall serve as technical advisors to the board to enhance collaboration among state agencies to meet infrastructure needs and facilitate growth opportunities throughout this state:
1. The director of environmental quality.
2. The state land commissioner.
3. The director of the department of revenue.
4. The director of the office of tourism.
5. The director of the department of transportation.
6. The director of water resources.
7. The director of the department of financial institutions.
8. The director of the Arizona-Mexico commission in the governor's office.
D. The governor shall appoint a cochairperson of the board of directors from among the voting members. The board may establish an executive committee consisting of the chairperson, the cochairperson, the chief executive officer, and additional voting members of the board elected by the board. The chairperson may appoint subcommittees as necessary.
E. The board may request assistance from representatives of other state agencies to maximize economic development opportunities by leveraging their access to strategic assets and planning processes.
F. Board members serve without compensation but are eligible for reimbursement of expenses pursuant to section 41‑1504, subsection E, paragraph 1.
G. A majority of the voting members, which must include the chairperson and the chief executive officer, constitute a quorum for the purpose of an official meeting for conducting business. An affirmative vote of a majority of the members present at an official meeting is sufficient for any action to be taken.
H. The board of directors shall keep and maintain a complete and accurate record of all of its proceedings. Public access to the board's records is subject to section 41‑1504, subsection L.
I. The board of directors, executive committee, subcommittees and advisory councils are subject to title 38, chapter 3, article 3.1, relating to public meetings, except as follows:
1. In addition to section 38‑431.03, the board of directors, executive committee and subcommittees may meet in executive session for discussion about potential business development opportunities and strategies, which, if made public, could potentially harm the applicant's, the potential applicant's or this state's competitive position.
2. Social and travel events related to the expansion, attraction and retention of businesses are not public meetings if no legal action involving a final vote or decision is taken.
3. Activities and events held in public for the purpose of announcing the expansion, attraction and retention of projects are not public meetings.
J. The board of directors and the officers and employees of the authority are subject to title 38, chapter 3, article 8, relating to conflicts of interest.
K. The board of directors shall adopt written policies, procedures and guidelines for standards of conduct, including a gift policy, for members of the board and for officers and employees of the authority.
L. The board of directors shall adopt written policies, procedures and guidelines regarding compensation of all officers and employees of the authority. On or before May 31 of each year, the board shall review the compensation and benefit package of each officer and employee for the following fiscal year. The compensation and benefits for each officer and employee must be approved by two-thirds of the members of the board.
L. M. The authority shall operate on the state fiscal year. The board of directors shall cause an annual audit to be conducted on or before October 31 of each of the authority's public funds established by this chapter by an independent certified public accountant. The board shall immediately file a certified copy of the audit with the auditor general. The auditor general may make such further audits and examinations as necessary and may take appropriate action relating to the audit or examination pursuant to chapter 7, article 10.1 of this title. If the auditor general takes no further action within thirty days after the audit is filed, the audit is considered to be sufficient.
M. N. All state agencies shall cooperate with the authority and make available data pertaining to the functions of the authority as requested by the authority.
Sec. 3. Section 41-1503, Arizona Revised Statutes, is amended to read:
41-1503. Chief executive officer
A. The board of directors shall employ a chief executive officer and prescribe the terms and conditions of the chief executive officer's employment. The chief executive officer serves at the pleasure of the board under the terms of a performance based contract. The board shall prescribe the compensation and benefits of the chief executive officer as provided by section 41-1502, subsection L.
B. The chief executive officer is responsible for managing, administering and supervising the activities of the authority.
C. The chief executive officer shall negotiate, make, execute, acknowledge and perform contracts and other agreements in the interest of the authority or to carry out or accomplish the purposes of this chapter.
Sec. 4. Section 41-1504, Arizona Revised Statutes, is amended to read:
41-1504. Powers and duties; e-verify requirement
A. The board of directors, on behalf of the authority, may:
1. Adopt and use a corporate seal.
2. Sue and be sued.
3. Enter into contracts as necessary to carry out the purposes and requirements of this chapter, including intergovernmental agreements pursuant to title 11, chapter 7, article 3 and interagency service agreements as provided by section 35‑148.
4. Lease real property and improvements to real property for the purposes of the authority. Leases by the authority are exempt from chapter 4, article 7 of this title, relating to management of state properties.
5. Employ or retain legal counsel and other consultants as necessary to carry out the purposes of the authority.
6. Develop and use written policies, procedures and guidelines for the terms and conditions of employing officers and employees of the authority and may include background checks of appropriate personnel.
B. The board of directors, on behalf of the authority, shall:
1. Develop comprehensive long-range strategic economic plans for this state and submit the plans to the governor.
2. Annually update a strategic economic plan for submission to the governor.
3. Accept gifts, grants and loans and enter into contracts and other transactions with any federal or state agency, municipality, private organization or other source.
C. The authority shall:
1. Assess and collect fees for processing applications and administering incentives. The board shall adopt the manner of computing the amount of each fee to be assessed. Within thirty days after proposing fees for adoption, the chief executive officer shall submit a schedule of the fees for review by the joint legislative budget committee. It is the intent of the legislature that a fee shall not exceed one per cent percent of the amount of the incentive.
2. Determine and collect registry fees for the administration of the allocation of federal tax exempt industrial development bonds and student loan bonds authorized by the authority. Such monies collected by the authority shall be deposited, pursuant to sections 35‑146 and 35‑147, in an authority bond fund. Monies in the fund shall be used, subject to annual appropriation by the legislature, by the authority to administer the allocations provided in this paragraph and are exempt from the provisions of section 35‑190 relating to the lapsing of appropriations.
3. Determine and collect security deposits for the allocation, for the extension of allocations and for the difference between allocations and principal amounts of federal tax exempt industrial development bonds and student loan bonds authorized by the authority. Security deposits forfeited to the authority shall be deposited in the state general fund.
4. At the direction of the board, establish and supervise the operations of full-time or part-time offices in other states and foreign countries for the purpose of expanding direct investment and export trade opportunities for businesses and industries in this state if, based on objective research, the authority determines that the effort would be beneficial to the economy of this state.
5. Establish a program by which entrepreneurs become aware of permits, licenses or other authorizations needed to establish, expand or operate in this state.
6. Be the state registration agency for apprenticeship functions prescribed by the federal government.
D. The authority, through the chief executive officer, may:
1. Contract and incur obligations reasonably necessary or desirable within the general scope of the authority's activities and operations to enable the authority to adequately perform its duties.
2. Use monies, facilities or services to provide matching contributions under federal or other programs that further the objectives and programs of the authority.
3. Accept gifts, grants, matching monies or direct payments from public or private agencies or private persons and enterprises for the conduct of programs that are consistent with the general purposes and objectives of this chapter.
4. Assess business fees for promotional services provided to businesses that export products and services from this state. The fees shall not exceed the actual costs of the services provided.
5. Establish and maintain one or more accounts in banks or other depositories, for public or private monies of the authority, from which operational activities, including payroll, vendor and grant payments, may be conducted. Individual funds that are established by law under the jurisdiction of the authority may be maintained in separate accounts in banks or other depositories, but shall not be commingled with any other monies or funds of the authority.
E. The chief executive officer shall:
1. Hire employees and prescribe the terms and conditions of their employment as necessary to carry out the purposes of the authority. The board of directors shall prescribe the compensation and benefits of the officers and employees of the authority as provided by section 41-1502, subsection L. The board of directors shall adopt written policies, procedures and guidelines, similar to those adopted by the department of administration, regarding officer and employee compensation, observed holidays, leave and reimbursement of travel expenses and health and accident insurance. The officers and employees of the authority are exempt from any laws regulating state employment, including:
(a) Chapter 4, articles 5 and 6 of this title, relating to state service.
(b) Title 38, chapter 4, article 1 and chapter 5, article 2, relating to state personnel compensation, leave and retirement.
(c) Title 38, chapter 4, article 2, relating to reimbursement of state employee expenses.
(d) Title 38, chapter 4, article 4, relating to health and accident insurance.
2. On a quarterly basis, provide public record data in a manner prescribed by the department of administration related to the authority's revenues and expenditures for inclusion in the comprehensive database of receipts and expenditures of state monies pursuant to section 41‑725.
F. In addition to any other requirement, in order to qualify for any grant, loan, reimbursement, tax incentive or other economic development incentive pursuant to this chapter, an applicant that is an employer must register with and participate in the e-verify program in compliance with section 23‑214. The authority shall require verification of compliance with this subsection as part of any application process.
G. Notwithstanding any other law, the authority is subject to chapter 3.1, article 1 of this title, relating to risk management.
H. The authority is exempt from chapter 32, articles 1 and 2 of this title, relating to statewide information technology. The authority shall adopt policies, procedures and guidelines regarding information technology.
I. The authority is exempt from state general accounting and finance practices and rules adopted pursuant to chapter 4, article 3 of this title, but the board shall adopt written accounting practices, systems and procedures for the economic and efficient operation of the authority.
J. The authority is exempt from section 41‑712, relating to the installation and maintenance of telecommunications telecommunication systems.
K. The authority may lease or purchase motor vehicles for use by employees to conduct business activities. The authority is exempt from section 41‑803, relating to the state motor vehicle fleet, and title 38, chapter 3, article 10, relating to vehicle usage and markings.
L. Any tangible or intangible record submitted to or compiled by the board or the authority in connection with its work, including the award of monies, is subject to title 39, chapter 1, unless an applicant shows, or the board or authority determines, that specific information meets either of the following:
1. If made public, the information would divulge the applicant's or potential applicant's trade secrets, as defined in section 44‑401.
2. If made public, the information could potentially harm the applicant's, the potential applicant's or this state's competitive position relating to potential business development opportunities and strategies.
M. The authority is exempt from chapter 25, article 1 of this title, relating to government competition with private enterprise.
Sec. 5. Title 41, chapter 10, article 1, Arizona Revised Statutes, is amended by adding section 41-1504.01, to read:
41-1504.01. Regulatory ombudsman
A. The office of regulatory ombudsman is established in the Arizona commerce authority. The board of directors shall employ the ombudsman and prescribe the terms and conditions of the ombudsman's employment. The ombudsman serves at the pleasure of the board under the terms of a performance‑based contract. The board may provide for assistant ombudsmen and administrative staff as necessary to handle the workload of the office.
B. The ombudsman shall:
1. provide information regarding licenses, permits, identifications, registrations, fees, taxes and other governmental requirements that may affect the start‑up of new businesses in this state.
2. Assist new and existing businesses in this state that encounter regulatory issues from state and local governmental requirements.
C. At the request of a business owner, the ombudsman shall intervene on behalf of and advocate for the business owner and hear, investigate, evaluate and attempt to resolve regulatory or procedural complaints by agreement, mediation or conciliation.
D. The ombudsman may not provide legal advice but may provide information about rules, regulations, policies and procedures at administrative and appellate levels of government.
e. the ombudsman shall:
1. Adopt rules, procedures and policies:
(a) For receiving and processing requests and complaints.
(b) To ensure that confidential information is not disclosed.
(c) For notifying regulatory agencies of an intention to investigate or intervene, unless notice would unduly hinder or impair a successful investigation.
2. Follow, and semiannually provide an online report of, regulatory actions completed and in process. The report shall include an analysis of cases determined meritorious or dismissed, systemic issues considered and proposed and completed resolutions.
3. Host public seminars and other forums, without charge, for discussion and guidance in starting and conducting business.
4. Survey small employers and identify chronic regulatory challenges and barriers that impede attainment of efficient and successful enterprise.
5. Based on data from cases and surveys, advocate for pro-business policies, rules, regulations, ordinances and procedures at state and local levels of government.
Sec. 6. Section 41-1506, Arizona Revised Statutes, is amended to read:
41-1506. Arizona commerce authority fund
A. The Arizona commerce authority fund is established consisting of withholding tax revenues allocated to the fund from the job creation withholdings clearing account pursuant to section 43‑409, subsection B, paragraph 1. Monies credited to the fund may be deposited in the state treasury or in a bank or other depository approved by the board of directors pursuant to section 41‑1504, subsection D, paragraph 5.
B. The chief executive officer shall administer the fund. On notice from the chief executive officer, the state treasurer shall invest and divest any monies in the fund deposited in the state treasury as provided by section 35‑313, and monies earned from investment shall be credited to the fund. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.
C. The chief executive officer shall use the monies in the fund exclusively for the purposes of this chapter without further legislative authorization.
Sec. 7. Repeal
Title 41, chapter 10, article 5, Arizona Revised Statutes, is repealed.
Sec. 8. Section 41-2706, Arizona Revised Statutes, is amended to read:
41-2706. Applicability of chapter
A. This chapter applies to the solicitation of grants initiated after August 6, 1999.
B. This chapter does not apply to:
1. Any grant program that was exempt from chapter 23, article 3 of this title and for which administrative rules establishing grant solicitation procedures were adopted pursuant to chapter 6 of this title before August 6, 1999.
2. The Arizona board of regents and schools, colleges, institutions and universities under its control if the Arizona board of regents adopts rules or policies governing the award of grants that encourage as much competition as practicable.
3. Grants made by the cotton research and protection council for research programs related to cotton production or protection.
4. Grants made by the Arizona iceberg lettuce research council for research programs under section 3‑526.02, subsection C, paragraph 3 or 5.
5. Grants made by the Arizona citrus research council for research programs under section 3‑468.02, subsection C, paragraph 3 or 5.
6. Grants made by the Arizona grain research and promotion council for research projects and programs under section 3‑584, subsection C, paragraph 5.
7. Grants made under section 3‑268, subsection C.
8. Grants made by the Arizona commerce authority from the Arizona competes fund pursuant to chapter 10, article 5 of this title. With respect to other grants, the authority shall adopt policies, procedures and practices, in consultation with the department of administration, that are similar to and based on the policies and procedures prescribed by this chapter for the purpose of increased public confidence, fair and equitable treatment of all persons engaged in the process and fostering broad competition while accomplishing flexibility to achieve the authority's statutory requirements. The authority shall make its policies, procedures and practices available to the public.
9. 8. Grants of less than five thousand dollars from the veterans' donations fund if the department of veterans' services adopts rules or policies governing these grants that encourage as much competition as practicable.
C. The Arizona commerce authority, in consultation with the department of administration, shall adopt policies, procedures and practices for making grants that are similar to and based on the policies and procedures prescribed by this chapter for the purpose of increased public confidence, fair and equitable treatment of all persons engaged in the process and fostering broad competition while accomplishing flexibility to achieve the authority's statutory requirements. The authority shall make its policies, procedures and practices available to the public.
Sec. 9. Repeal
Section 41-3016.29, Arizona Revised Statutes, is repealed.
Sec. 10. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3018.01, to read:
41-3018.01. Arizona commerce authority; termination July 1, 2018
A. The Arizona commerce authority terminates on July 1, 2018.
B. Title 41, chapter 10 is repealed on January 1, 2019.
Sec. 11. Section 43-409, Arizona Revised Statutes, is amended to read:
43-409. Job creation withholdings clearing account
A. The job creation withholdings clearing account is established consisting of the sum of twenty-six ten million five hundred thousand dollars of withholding tax revenues in fiscal year 2015‑2016 and twenty‑one million five hundred thousand dollars for each fiscal year after 2015‑2016.
B. On the twentieth day of each month the state treasurer shall credit the following amounts from the clearing account:
1. to the Arizona commerce authority fund established by section 41‑1506, one-twelfth of the annual sum of ten million dollars in each fiscal year.
2. To the Arizona competes fund established by section 41‑1545.01, one‑twelfth of the annual sum of sixteen million five hundred thousand dollars in fiscal year 2015‑2016 and eleven million five hundred thousand dollars for each fiscal year after 2015‑2016.
Sec. 12. Section 44-1843, Arizona Revised Statutes, is amended to read:
44-1843. Exempt securities; filing
A. Sections 44‑1841 and 44‑1842, section 44‑1843.02, subsections B and C and sections 44‑3321 and 44‑3325 do not apply to any of the following classes of securities:
1. Securities issued or guaranteed by the United States, by any state, territory or insular possession of the United States, by any political subdivision of such state, territory or insular possession, by the District of Columbia or by any agency or instrumentality of one or more of any of the foregoing. This exemption shall not apply to securities regulated pursuant to section 44‑1843.01.
2. Securities issued by a national bank, a bank or a credit or loan association organized pursuant to an act of Congress and supervised by the United States or an agency of the United States, or issued by a state bank or savings institution the business of which is supervised and regulated by an agency of this state or of the United States.
3. Securities issued by a savings and loan association subject to supervision by an agency of this state.
4. Insurance or endowment policies, variable contracts, annuity contracts or optional annuity contracts issued by a person subject to the supervision of and licensed by the insurance commissioner, the bank commissioner or any agency of the United States, any state or the District of Columbia performing like functions.
5. Securities issued or guaranteed either as to principal, interest or dividend by a railroad or public utility if the issuance of its securities is regulated by an agency of the United States, a state, territory or insular possession of the United States, an agency of the District of Columbia or an agency of the Dominion of Canada or any province of the Dominion of Canada, and also equipment trust certificates in respect to equipment conditionally sold or leased to a railroad or public utility, if other securities issued by such railroad or public utility would be exempt under this paragraph.
6. Securities issued by a person that is organized and operated exclusively for religious, educational, benevolent, fraternal, charitable or reformatory purposes and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person, private stockholder or individual and securities issued by or any interest or participation in any pooled income fund, collective trust fund, collective investment fund or similar fund that is excluded from the definition of an investment company under section 3(c)(10)(B) of the investment company act of 1940. The exemption prescribed in this paragraph does not apply to any of the following, unless excluded from the definition of an investment company under section 3(c)(10)(B) of the investment company act of 1940:
(a) Securities made liens upon on revenue producing property subject to taxation.
(b) Securities issued by a nonprofit organization that is engaged in, intends to engage in, controls, finances or lends funds or property to other entities engaged in the construction, operation, maintenance or management of a hospital, sanitarium, rest home, clinic, medical hotel, mortuary, cemetery, mausoleum or other similar facilities.
(c) Interest bearing or noninterest bearing debt securities except for first mortgage bonds issued by individual churches and affiliated religious schools in an aggregate outstanding amount not to exceed twenty‑five million dollars by any one single issuer provided that no commission or remuneration of any kind, other than transfer agent's fees, is paid, directly or indirectly, to any person other than a registered dealer or registered salesman in connection with the offer for sale or sale of such bonds.
(d) Securities whose terms include significant features that are common to debt securities and that the commission finds are the functional equivalent of debt securities.
7. Securities listed or approved for listing upon on the issuance thereof upon on the New York stock exchange, the American stock exchange, the midwest stock exchange or any other national securities exchange that is registered under the securities exchange act of 1934 and that is designated by the commission as provided in this paragraph, and securities designated or approved for designation on notice of issuance on the national market system of a national securities association registered under the securities exchange act of 1934, and all securities senior or equal in rank to any securities so listed or approved for listing, designated or approved for designation or represented by subscription rights or warrants that have been so listed, designated or approved and any warrant or right to purchase or subscribe to any of the foregoing. In addition to the securities exchanges prescribed in this paragraph, the commission may by order designate any registered national securities exchange if it finds that it would be in the public interest for securities listed on the exchange to be exempt. The commission may at any time by order withdraw a designation of an exchange or association made under this paragraph.
8. Commercial paper that arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, that evidences an obligation to pay cash within nine months of the date of issuance or sale, exclusive of days of grace, or any renewal of such paper that is likewise limited, or any guarantee of such paper or of any such renewal.
9. Securities issued or guaranteed by any foreign government with which the United States is at the time of the sale maintaining diplomatic relations, or securities issued or guaranteed by a political subdivision of such foreign government having the power of taxation, if none of the securities of the foreign government or political subdivision are in default either as to principal or interest, and which securities when offered for sale in this state are acknowledged as valid obligations by the foreign government or political subdivision and registered under the securities act of 1933.
10. Notes or bonds secured by a mortgage or deed of trust on real estate or chattels, or a contract or agreement for the sale of real estate or chattels, if the entire mortgage, contract or agreement together with all notes or bonds secured thereby is sold or offered for sale as a unit, except for real property investment contracts.
11. Mortgage related securities, as defined in section 3(a)(41) of the securities exchange act of 1934.
B. Issuers of securities that are exempt under subsection A, paragraphs 6, 7 and 9 of this section, within thirty days after the first sale of the securities in this state, shall pay to the commission a fee of two hundred dollars for each offering, and the commission shall deposit the fees in the Arizona competes fund established by section 41‑1545.01.
C. B. Any securities that are offered and sold pursuant to section 4(5) of the securities act of 1933 or that are mortgage related securities as the term is defined in section 3(a)(41) of the securities exchange act of 1934 are not preempted by federal law. These instruments, commonly referred to as private mortgage backed securities, may be exempt from the registration requirements of this chapter if the transaction or the securities are otherwise exempt under this chapter. This subsection specifically overrides the preemption of state law contained in section 106(c) of the secondary mortgage market enhancement act of 1984 (P.L. 98‑440).
D. Noncompliance with the requirements in subsection B of this section to pay fees shall not result in the loss of the exemption allowed by this section.
Sec. 13. Section 44-1861, Arizona Revised Statutes, is amended to read:
44-1861. Fees; deposit; abandonment
A. By the affirmative vote of at least four commissioners, the commission may establish by rule an annual fee for the registration of a dealer or a salesman. The fee shall be remitted on or before the last working day of December, and the commission shall deposit the fee, pursuant to sections 35‑146 and 35‑147, in the securities regulatory and enforcement fund established by section 44‑2039.
B. The registration fee for any dealer who deals exclusively in securities of which the dealer is the issuer is one hundred dollars.
C. For registration of securities by description, there shall be paid to the commission a nonrefundable registration fee of one-tenth of one per cent percent of the aggregate offering price of the securities that are to be sold in this state, but in no event shall the registration fee be less than two hundred dollars nor more than two thousand dollars. The amount by which a registration fee exceeds one thousand five hundred dollars shall be allocated to the Arizona competes fund established by section 41‑1545.01.
D. By the affirmative vote of at least four commissioners, the commission may establish by rule a transfer fee for a salesman transferring the salesman's registration from one registered dealer to another registered dealer. The commission shall deposit the fee, pursuant to sections 35‑146 and 35‑147, in the securities regulatory and enforcement fund established by section 44‑2039.
E. The initial filing of a form required for safe harbor exemptions provided for in the securities act of 1933 (15 United States Code section 77(a) et seq.) pursuant to the rules of the commission shall be accompanied by a filing fee of two hundred fifty dollars, of which fifty dollars shall be allocated to the Arizona competes fund established by section 41-1545.01. The final filing of the form, if separate from the initial filing, shall be accompanied by a filing fee of one hundred dollars that is allocated to the Arizona competes fund established by section 41-1545.01.
F. For a name change of securities registered by qualification or description, a filing fee of one hundred dollars is payable to the commission.
G. For filing a notice required by the commission by rule pursuant to section 44‑1845, a filing fee of one hundred dollars is payable to the commission.
H. For filing a petition pursuant to section 44‑1846, a filing fee of two hundred fifty dollars is payable to the commission.
I. Except as provided in subsections A, C, D, E and P of this section, and section 44‑1843 and section 44‑1892, paragraph 3, all fees collected under this chapter shall be deposited in the state general fund.
J. An issuer who sells securities in this state in excess of the aggregate amount of securities registered in this state, while the registration is still effective, may apply to register the excess securities by paying three times the difference between the initial registration fee paid and the registration fee required under subsection C of this section or section 44‑1892, paragraph 3. Registration of the excess securities, if granted, is effective retroactively to the date of the existing registration.
K. An application for registration of securities or registration of a dealer or salesman or an incomplete notice filing is deemed abandoned if both:
1. The application or notice filing has been on file with the commission for at least six months or the applicant or notice filer has failed to respond to a request for information for at least two months after the date of the request.
2. The applicant or notice filer has failed to respond to the commission's notice of warning of abandonment within sixty calendar days after the date of the warning.
L. The commission shall retain fees collected in connection with abandoned applications or notice filings for deposit in the state general fund.
M. The nonrefundable filing fee for a request for a no‑action letter from the securities division is two hundred dollars.
N. The nonrefundable filing fee for an application for registration pursuant to section 44‑1902 is two hundred fifty dollars.
O. The fee for submitting fingerprint cards to the department of public safety is the fee required by that department.
P. Any securities exchange established in this state shall pay to the commission on or before March 15 of each calendar year an exchange registration fee in an amount equal to two‑tenths of one cent for each share, bond or option or any other single unit of a security that is exchanged during each preceding calendar year. The commission shall deposit the fee, pursuant to sections 35‑146 and 35‑147, in the securities regulatory and enforcement fund established by section 44‑2039 for the purpose of regulating the securities exchange. The commission, by rule, may exempt any sale of securities or any class of sales of securities from the fee imposed by this subsection if it finds that an exemption is consistent with the public interest and the equal regulation of the market and brokers and dealers.
Sec. 14. Section 44-1892, Arizona Revised Statutes, is amended to read:
44-1892. Documents required for application for registration by qualification; fee
Application for registration of securities by qualification shall be made by the issuer of the securities by filing with the commission the following documents:
1. An application for registration of securities by qualification as provided by section 44‑1893.
2. A prospectus as provided by section 44‑1894, except as provided in section 44‑1901.
3. A nonrefundable registration fee of one-tenth of one per cent percent of the aggregate offering price of securities to be sold in this state, but the registration fee shall not be less than two hundred nor more than two thousand dollars. The amount by which a registration fee exceeds one thousand five hundred dollars shall be allocated to the Arizona competes fund established by section 41‑1545.01.
4. A consent to service of process as provided by section 44‑1862, if the issuer is not domiciled in this state and is not an entity organized under the laws of this state.
Sec. 15. Section 44-3324, Arizona Revised Statutes, is amended to read:
44-3324. Notice filing fees
A. When filing its initial notice filing, an open-end company shall pay a nonrefundable notice filing fee for sales to be made during the initial notice period. The open‑end company may elect to pay either a minimum fee of two hundred dollars or a maximum fee of three thousand five hundred dollars. If paying the maximum fee, an open-end company is not required to file a sales report at the expiration of the notice period.
B. An open‑end company that renews its notice filing in accordance with section 44‑3322, subsection B shall pay both of the following nonrefundable notice filing fees no later than the expiration of the current notice period:
1. For sales to be made during the current fiscal year, the open-end company may elect to pay either a minimum fee of two hundred dollars or a maximum fee of three thousand five hundred dollars. If paying the maximum fee, an open‑end company is not required to file a sales report at the time of its next renewal notice filing.
2. A fee for sales that occurred during the prior fiscal year, as those sales are reported pursuant to section 44‑3323, subsection C. The fee is equal to one‑tenth of one per cent percent of the aggregate dollar amount of securities actually sold in this state during the prior fiscal year minus two hundred dollars, but in no event more than three thousand three hundred dollars. If the maximum fee was previously paid for the prior fiscal year, the open‑end company is not required to pay any additional fees under this paragraph.
C. An open-end company that does not renew its notice filing in accordance with section 44‑3322, subsection B and that did not previously pay the maximum fee for the notice period shall pay a nonrefundable notice filing fee no later than two months after the expiration of its current notice period for sales that occurred during the prior fiscal year and during the two month period from the end of the prior fiscal year to the expiration of the notice period, as those sales are reported pursuant to section 44‑3323, subsection D. The fee is equal to one-tenth of one per cent percent of the aggregate dollar amount of securities actually sold in this state during the prior fiscal year and during the two month period from the end of the prior fiscal year to the expiration of the notice period minus two hundred dollars, but in no event more than three thousand three hundred dollars. If the maximum fee was previously paid for the prior fiscal year, the open‑end company is not required to pay any additional fees under this subsection.
D. When filing its initial notice filing, a unit investment trust shall pay a nonrefundable notice filing fee for sales to be made during the initial notice period. The unit investment trust may elect to pay either a minimum fee of two hundred dollars or a maximum fee of three thousand five hundred dollars. If paying the maximum fee, the unit investment trust is not required to file a sales report at the end of the expiration of the notice period.
E. A unit investment trust that elects to renew its notice filing in accordance with section 44‑3322, subsection C shall pay both of the following nonrefundable notice filing fees:
1. For sales to be made during the renewal notice period, a unit investment trust may elect to pay either a minimum fee of two hundred dollars or a maximum fee of three thousand five hundred dollars. The fee shall be paid no later than the expiration date of the current notice period. If paying the maximum fee, a unit investment trust is not required to file a sales report within two months after the expiration of the renewal notice period.
2. A fee for sales that occurred during the expiring notice period, as those sales are reported pursuant to section 44‑3323, subsection E. The fee shall be equal to one‑tenth of one per cent percent of the aggregate dollar amount of securities actually sold in this state by the unit investment trust during the prior notice period minus two hundred dollars, but in no event more than three thousand three hundred dollars. The fee shall be paid no later than two months after the expiration date of the prior notice period. If the maximum fee was previously paid for the expiring notice period, the unit investment trust is not required to pay any additional fees under this paragraph.
F. A unit investment trust that does not renew its notice filing in accordance with section 44‑3322, subsection C and that did not previously pay the maximum fee for the notice period shall pay, within two months after the expiration of the notice period, a nonrefundable notice filing fee for sales that occurred during the prior notice period as such sales are reported pursuant to section 44‑3323, subsection F. The fee is equal to one-tenth of one per cent percent of the aggregate dollar amount of securities actually sold in this state by the unit investment trust during the prior notice period minus two hundred dollars, but in no event more than three thousand three hundred dollars. If the maximum fee was previously paid for the expiring notice period, the unit investment trust is not required to pay any additional fees under this subsection.
G. An issuer that fails to timely file any sales report required by section 44‑3323 shall pay a late filing fee in the amount of two hundred dollars. An issuer that fails to timely pay any notice filing fees required pursuant to this section shall pay the required notice filing fee together with a late payment fee equal to one-half of the amount of the required notice filing fee.
H. The fees collected pursuant to this section shall be deposited as follows:
1. Eighty per cent eighty‑five percent in the securities regulatory and enforcement fund established by section 44‑2039.
2. Ten per cent in the Arizona competes fund established by section 41‑1545.01.
3. 2. Ten per cent fifteen percent in the investment management regulatory and enforcement fund established by section 44‑3298.
Sec. 16. Section 44-3325, Arizona Revised Statutes, is amended to read:
44-3325. Notice filings by closed‑end companies
A. Securities that are issued by a closed‑end company may be offered for sale and sold in this state if the commission receives all of the following from the closed‑end company:
1. The documents that are filed with the SEC and that are required by the commission.
2. A consent to service of process.
3. A notice filing fee calculated pursuant to this section.
B. A notice filing is effective and renewable on the filing date with the commission or the effective date with the SEC, whichever occurs last, and the notice filing is effective for one year from that date.
C. A closed‑end company shall include with the company's notice filing a notice filing fee of one-tenth of one per cent percent of the aggregate offering price of securities sold in this state, but the fee shall not be less than two hundred dollars and not more than two thousand dollars. The amount by which a notice filing fee exceeds one thousand five hundred dollars shall be allocated to the Arizona competes fund established by section 41-1545.01.
D. A closed-end company shall file a report of all sales of securities to persons in this state during the period of the notice filing. The closed‑end company shall file the report with the commission within sixty days after the termination date of the offering within this state or the expiration date of the notice filing, whichever occurs first. A closed‑end company that fails to timely file a report of sales shall pay a late filing fee of two hundred dollars.
Sec. 17. Purpose
Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona commerce authority to facilitate the beneficial economic growth and development of this state and to promote prosperity through the development and protection of the legitimate interests of Arizona business, industry and commerce within and outside this state.
Sec. 18. Retroactivity
Sections 9 and 10 of this act are effective retroactively to July 1, 2016.
