Veridus Advisory: AZ Legislature Adjourns Sine Die

Dear clients,

The Second Regular Session of the 56th Arizona Legislature adjourned sine die at 9:55 p.m. last night. Over the course of the session, 1,660 bills were introduced, 202 were signed into law and 59 were vetoed.

Governor Katie Hobbs now has until June 27th to sign or veto any legislation remaining on her desk or it will automatically become law. Unless a bill has an emergency clause, a delayed effective date or is an appropriation, the general effective date for legislation is September 13, 2024.

Lawmakers Clash Over Abortion: 2024 Edition

The most explosive moments of the session came as lawmakers considered repealing the state’s territorial-era abortion law, which became effective following an Arizona Supreme Court decision. After a couple failed attempts, a few swing-district Republicans joined all of the Democrats in successfully repealing the 1864 regulation. Though the abortion repeal, like most legislation, won’t take effect for about 90 days, enforcement of the 1864 abortion prohibition was stayed by a court and is not in effect. That leaves the state’s existing ban on abortions after 15 weeks of pregnancy as the law of the land.

Going forward, progressives have their eyes on a ballot initiative that would amend the Arizona Constitution to legalize abortion up to the point of fetal viability (22-24 weeks) and beyond, at the recommendation of a healthcare professional. GOP legislators considered but were unable to agree on referral of a competing ballot measure that would have asked voters to stick with the current, 15-week abortion threshold.

The Rent is Too Damn High

With Arizona housing now among the nation’s least affordable, the issue became one of the few that truly crossed party lines. Governor Hobbs signed into law two bills to address the issue. One bill forces cities of at least 75,000 residents to allow the construction of backyard casitas, while the second measure requires that cities amend local zoning to allow construction of townhomes and other multifamily housing options within one mile of their central business district. A common complaint is that overly restrictive municipal zoning has contributed to an Arizona housing shortfall now estimated at 270,000 units.

Governor Hobbs vetoed the more far-reaching “Arizona Starter Home Act,” which was strongly opposed by cities and towns across the state. The measure would have overridden a lot of local development requirements governing housing amenities and design, as well as cleared the way for construction of single-family homes on smaller lots.

In the final hours of the session, legislators advanced an ag-to-urban bill that incentivizes the transition of water-intensive farmland to urban development in certain portions of Maricopa, Pima and Pinal counties. Advocates pitched the legislation as a way to both reduce water consumption and combat the state’s housing shortage.

Behold: The World’s Longest Ballot

Set aside some time to read the General Election ballot. You’re going to need it.

Republicans referred to the ballot a laundry list of proposals, bypassing Governor Hobbs and going straight to voters. Meanwhile, mostly left-leaning citizens groups are utilizing the same tactic to bypass the GOP-led Legislature with measures to legalize abortion, hike the minimum wage (again) and more. Notable legislative ballot referrals include proposals to:

• Eliminate term limits and retention elections for judges. The measure is retroactive. That means, if it passes, a pair of Supreme Court members targeted by progressives - Justices Clint Bolick and Kathryn King - would remain on the court regardless of the outcome of their retention elections this fall.

• Enact a Texas-style immigration law that makes it a state crime to illegally cross the border outside of a port of entry, and authorizes state and local law enforcement to assume border-related enforcement duties. If passed, the measure would only take effect if Texas’ law – currently being challenged – is cleared by the courts.

• Amend minimum wage requirements for restaurant waitstaff. The Arizona Restaurant Association proposal is a hedge against a separate union-led initiative - also potentially headed for the November ballot - that would phase out the restaurant tip credit and, instead, hike the minimum wage for tipped workers to essentially $18/hour.

Bipartisanship Lives!

In the session’s waning hours, legislators reached agreement on a bipartisan budget, which Governor Hobbs is expected to sign. The $16.1 billion spending plan closes an estimated $1.4 billion funding shortfall. The biggest losers: the Water Infrastructure Finance Authority (WIFA), created during the Ducey administration to identify and fund water projects; spending for roads and bridges; and public universities and community colleges. The budget enacts a 3.45% across-the-board cut to most state agencies and departments.

Left mostly intact with the budget deal is the state’s ESA program, which the teachers union and progressives have urged be eliminated or significantly scaled back. It appears Governor Hobbs and Democratic leaders are playing the long game, hoping to first retake the Legislature and then come for the ESA program.

All of which means …

Bipartisanship is Dead!

Control of the Arizona Capitol hangs by a thread. Republicans maintain a 1-seat edge in both chambers, and either could easily flip during a General Election in which all 90 seats are on the ballot. Adding to the volatility, deeply emotional and divisive issues like abortion and immigration will dominate public discourse over the next five months. As they say in hockey, it’s going to get chippy!

As always, it has been our pleasure to report to you the comings-and-goings of the Arizona Capitol. We will continue to keep you informed.

Sincerely,

The Veridus Team