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Senate defeats public notices legislation, at least for now

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Newspapers appear to be safe from losing a source of their revenues, at least for the time being.

On a 13-16 margin the state Senate on Monday defeated legislation which would have eliminated the requirement for new businesses in the state’s two largest counties to publish their articles of incorporation and other legal notices in newspapers.

Proponents could try to resurrect HB2447 later in the session. The measure had previously been approved by the House on a 33-26 vote.

Monday’s vote is a victory for the Arizona Newspapers Association, which had lobbied heavily to kill the measure even though it likely affects just a handful of its members.

But there clearly was a fear that if publication requirements for corporations are killed this year in Maricopa and Pima counties, the next step would be to extend that to the other 13 counties. It also raised the specter that once the Legislature kills publication requirements for businesses it is only a small leap to eliminate the mandate for publication of legal notices for cities, counties, school districts and other government agencies.

The measure crafted by House Majority Leader Steve Montenegro, R-Litchfield Park, would have required the Arizona Corporation Commission to set up a special web site where new businesses would post their articles of incorporation. Those documents would remain available there in searchable form for 90 days.

After that, the records would go into an already existing online database.

Monday’s vote came despite exhortations of Senate President Andy Biggs, R-Gilbert, for lawmakers to scrap what he sees as an outdated requirement.

“It is a coercive mandated subsidy from one private citizen to another entity to keep them in business,” he said. And Biggs dismissed claims that publication requirements keep people informed.

“We live in a digital world,” he said. “Contrary to what you may hear, more people have access to the Internet than subscribe to all the newspapers combined in the state.”

But Sen. Barbara McGuire, D-Kearny, said far fewer people in rural areas of the state have access to the Internet than those in urban areas.

Sen. Steve Yarbrough, R-Chandler, said newspaper publication is not about public notice.

Yarbrough, an attorney, said when he was helping companies incorporate in Maricopa County he would publish their legal notices in the Gila Bend newspaper.

“Why in the world were we doing that?” he asked rhetorically.

“Because it was the cheapest place to do that,” Yarbrough continued. “And you really cared not one iota about whether people actually were seeing the information on the formation of a new business.”

And Sen. John Kavanagh, R-Fountain Hills, called the existing law “an absurd abuse whereby we force businesses at their startup phase to basically buy a product which really makes no sense.”

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