Report from the Capitol: 23 February 2018

It was a very busy week, with many House bills passing through the process and going over to the Senate for hearings and approval. A summary of the activity and what it means is below.

HB-2203, a bill to empower the State Forester to care for our watersheds as well as our forests may seem like an expansion of authority, but it is not. It is a more accurate description of what the State Forester is already doing. This is a move to prevent the potential of catastrophic wildfires, like those we have seen in California that has wiped out entire communities. The bill has passed out of the House and will be going to the Senate.

The best part of this legislation is the private secret stands ready to help the state, and there is virtually no cost to the taxpayers. This structure offers a pathway for private contractors to clean up our forests and wild-lands, protect sensitive habitats for game and endangered species and improve the watershed all at the same time, while sequestering carbon -woody products- in the form of everything from mulch to oriented strand board (OSB), an in demand building product.

For over two years I have ben trying to find a way to get our veterans hyperbolic oxygen treatment for their traumatic brain injuries, when the VA is slow to respond or totally unresponsive. HB-2513 is a bill that creates a philanthropic mechanism to help pay for such care. It creates an HBOT for TBA fund with $25,000 taxpayer funds to seed the fund, then in 4 years, the fund, once self-sufficient will return the $25,000 back to the general fund. This represents a major step forward for the Arizona focus on caring for our injuries combat veterans. This bill is now on the Money Bill list and will go to House Appropriations.

HB-2469, would have required individuals lobbying Arizona government agencies, elected officials and universities on behalf of foreign governments to register with the Arizona Secretary of State. For some reason, the bill was held in the Rules Committee. The language in the bill is crafted to align with language from Federal statues.

Many of us have heard about the so-called Russia collusion narrative. Well, some of it is true, but not the stories that the New York Times is telling. Secretary of the US Treasury, Mr. Mnuchin, has been asked by Congress to investigate foreign governments and their influxnce on America by using finances as a weapon. Arizona has the exact same exposure, but has no requirement for individuals acting as agents for foreign governments to register. Consequently, we have no idea if a person advocating for some bill or some action is working for China, Russia or Iran.

HB-2456, the move to extend the Rio Nuevo TIF for 10-years passed the House of Representatives by a vote of 36 ayes to 17 nays, with 5 members absent and not voting. The vote was bi-partisan and came with some strings. This move is intended to give the Rio Nuevo Board, which works for the State of Arizona not the City of Tucson, time to occlude negotiations on pending transactions, provide tenants time to buy the places they are building as their business home and to distribute the assets of the sales as well as the land that does not sell.

As parcels are sold they will be sold at appraised value, and the business owner will have the first right of refusal. Proceeds from the sale will go to pay down unfunded pension obligations that the State of Arizona taxpayers will eventually be forced to pay through new tax dollars.

If business buyers can’t come up with the private capital financing to purchase Rio Nuevo properties, then they will be sold to any other buyer for appraised value. Finally, when properties do not sell, they will escheat to the Arizona State Land Trust. Proceeds from these sales and/or continued operations will go to K-12 education funding. As an example, Rio Nuevo generates about $800,000 per month today. Once the remaining debt load from City of Tucson mismanagement is paid off, the amount will go to Arizona’s General Fund.

HB-2210, the request for Arizona Attorney General Mark Brnovich to review Arizona’s potential standing as a co-plaintiff was stopped shot in the House, but will likely come up in the Senate in the coming weeks. All the bill does is have the AG review the Utah legal analysis to see if it is in proper form and winnable in court.

For too long our taxpayers have been tapped for more and more revenue. At the same time we need to pay our teachers, police officers and firefighters more than we do today. e can’t do that because we have been shortchanged by the Federal government on payment in lieu of taxes, also known as PILT. Those of us who have studied how PILT works, we refer to it as Pennies in lieu of Trillions. To get an idea of what is at stake, the article below explains a lot. For an update on the Utah case and what it means to Arizona, read on…

Utah Legislature Urges Full Compensation on Rural $ for Federal Lands

SALT LAKE CITY — Utah may have received $38.4 million in the last year from the federal government to make up for lands inside its borders that don’t generate property tax revenue, but lawmakers overwhelmingly believe it’s chump change compared with what they deserve.

To that end, both the House and Senate in the Utah Legislature on Thursday unanimously signed off on a resolution and a subsequent bill that directs a more thorough accounting of the lost dollars.

The program is Payment in Lieu of Taxes, established in 1976 by the federal government to compensate states with large swaths of federally held land that is unable to generate property tax revenue. Those would be lands such as national parks, acreage managed by the Bureau of Land Management and the Forest Service.

Although the program since 1977 has distributed $6.7 billion to mostly Western states to compensate them for lost revenue that could be directed to schools, roads and emergency services like police and fire, payments over the years have declined, remained stagnant or increased very little.

This coming year’s proposed budget for the U.S. Department of the Interior calls for a 15 percent reduction in those payments, and in 2014, the disbursements were not approved until midway through the year.

It’s an issue of equal justice for both sides of Utah’s political aisle on Capitol Hill. “We need a fair deal,” said House Minority Leader Brian King, D-Salt Lake City. HCR19, sponsored by Rep. Ken Ivory, R-West Jordan, calls on the U.S. president, Congress and the Utah delegation to ensure timely and full payments to rural counties to make up for that loss of revenue, even noting that instead of Payment in Lieu of Taxes, it has recently equated to “Pennies in Lieu of Taxes.”

“We teach our children a promise is a promise,” Ivory said, but noted that promise has not been fulfilled.

He also emphasized that the resolution is a public lands measure that draws on bipartisan support among lawmakers, with Sen. Jim Dabakis, D-Salt Lake City, carrying the resolution in the Senate. It passed 73-0 in the House and 23-0 in the Senate.

Ivory’s HB357also received unanimous support on the House floor, passing 70-0 and receiving a 23-0 vote in the Senate. It calls on the state’s Commission on Federalism to evaluate the impacts of federal payments in lieu of taxes to the state, with a hearing that draws on those impacts from shortfalls that affect schools, cities and other entities.

Those promised revenues that have dwindled and fallen short are having serious impacts throughout Utah, lawmakers agreed.

“We are in a red-headed stepchild situation,” said Rep. Mike Noel, R-Kanab. “We really don’t get the benefit of property taxes in this state.”

Around the West, political leaders have chafed at the continuing shortfalls.

In 2017, the Western Governors Association passed a resolution on the issue, urging the federal government to deliver fair compensation because of the critical nature the funds provide for basic local government services that could otherwise be derived from property tax revenue.

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