50th Arizona Legislature earns ‘most pro-small business’ tag

Farrell Quinlan

Arizona’s 2012 legislative session picked up where the 2011 session left off — aspiring to be the most pro-small business Legislature in Arizona’s history.

The 2012 session’s accomplishments ended up being so consistently good, significant in scope and even embarrassing in their abundance that Arizona’s small-business owners will have to guard against expecting future legislatures to over-perform like the 50th Arizona Legislature has.

Hyperbole? Perhaps, but don’t be surprised if in the not-so-distant future we look back at the last two regular sessions as a Golden Age for free-market reform in Arizona.

The below list outlines the top 10 small business legislative victories of 2012 — ranked in reverse order for fun. It does a pretty good job of supporting my effusive praise and detailing the National Federation of Independent Business (NFIB) small business legislative agenda.

10 — SB1441: Residential Construction Fall Protection Regulation, sponsored by Sen. Andy Biggs, restores to Arizona’s control the regulation of fall protection at residential construction sites — standards that have proven to be very successful in promoting the safety of our construction workers while avoiding arbitrary and costly regulation.

9 — SB1193: Small Business Impact Data for Proposed Rules, sponsored by Sen. Gail Griffin, expands numerous regulatory rights involving appeals and licensing applications and requires that government agencies use empirical, replicable and testable data when preparing their economic, small business and consumer impact statements for proposed rules and regulations.

8 — SB1410: Trespasser Responsibility Act, sponsored by Sen. Ron Gould, solves a potential problem created by the recently published “Restatement of the Law Third, Torts: Liability for Physical and Emotional Harm” that establishes the legal predicate for expanding property owners’ exposure to liability when a trespasser is injured on their property. This NFIB-drafted legislation blocks the ability of activist judges to wreak havoc upon small-business owners by imposing this flawed legal reasoning.

7 — HB2519: Unemployment Insurance Omnibus, sponsored by Rep. Karen Fann, makes a series of reforms tightening up Arizona’s unemployment insurance system, including stronger work search requirements to maintain benefits and clarifies that a worker is considered to have refused an offer of suitable work if an offer is withdrawn after they either refuse to take a drug test or test positive for drugs.

6 — HB2571: State Personnel Reform, sponsored by Rep. Justin Olson, consolidates multiple state government personnel systems and transitions the state to a largely at-will workforce among other modernizing reforms. Once fully implemented, 80 percent of the state’s workforce will be at-will employees like their counterparts in the private sector.

5 — HB2368: Workers’ Compensation Omnibus, sponsored by Rep. Karen Fann, makes many necessary reforms, including a more stable indexing formula for benefits and greater subrogation rights. But the most important provision regards the use of evidence-based medicine in workers’ compensation claims that will result in better quality care for injured workers and less time off work.

4 — HB2466: Local Sales Tax Portal, sponsored by Rep. Rick Gray, offers small businesses a one-stop web portal to remit transaction privilege (sales) tax receipts to state and multiple local municipalities. Scheduled to be in place before 2015, this easy-to-use web portal will streamline the byzantine process of remitting sales tax receipts separately to multiple jurisdictions and will lower the cost of compliance for businesses collecting the sales tax.

3 — HB2150: Unemployment Insurance Appeals Reform, sponsored by Rep. Tom Forese, provides clarity to and fair treatment for employees and employers in Department of Economic Security (DES) unemployment compensation proceedings. The NFIB-written law clarifies the difference between an employee and an independent contractor; requires DES to state the statutory justification for its decisions; and most importantly, replaces the clearly unreasonable 15-day appeal deadlines to challenge various DES decisions with 30- or 60-day deadlines.

2 — HB2815: Tax Reform, sponsored by Rep. J.D. Mesnard, builds on last year’s competitiveness package with an 85 percent boost in the personal property tax exemption for equipment and machinery; extends the net operating loss carry forward for corporations to 20 years from five years; phases in a 25 percent reduction in the income tax on long term capital gains on assets purchased after 2012; and reworks the thresholds and eligibility criteria for receiving a new jobs tax credit.

1 — SCR 1012: Small Business Job Creation Act (Proposition 116), sponsored by Sen. Andy Biggs, refers to the November ballot a pro-growth adjustment to the constitutional exemption for new equipment and machinery investments — the crucial component of a job-producing recovery. Written and championed by NFIB, passage of Proposition 116 will unleash more than 60,000 small-business job creators by effectively removing them from the personal property tax rolls. Proposition 116 enjoyed unanimous, bipartisan support from lawmakers and is structured to protect K-12 school budgets and avoids placing additional stress on homeowners.

— Farrell Quinlan is state director for the National Federation of Independent Business.