Arizona House of Representatives Committee on Regulatory Affairs — Report of Regular Meeting, March 13, 2024 (Fifty-sixth Legislature, Second Regular Session)

Summary

The report of the regular meeting of the Arizona House of Representatives Committee on Regulatory Affairs, Fifty-sixth Legislature, Second Regular Session, held Wednesday, March 13, 2024, with Representative Hendrix as chairman and Representative McGarr as vice-chairman. The minutes record committee action on Senate bills including SB1153, SB1021 and SB1291, most of them reported do pass, with SB1234 given do pass amended and SB1634 held. The attachments include the meeting agenda and the Request to Speak report listing public positions on bills such as SB1021 on scope of practice and SB1153 on regulatory costs and legislative ratification of rules. The document closes with a bill analysis of SB 1634 on appeals of board decisions and its roll call vote sheet.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ON REGULATORY AFFAIRS

Report of Regular Meeting
Wednesday, March 13, 2024
House Hearing Room 5 -- 2:00 P.M.

Convened 2:28 P.M.
Recessed
Reconvened
Adjourned 3:41 P.M.

Members Present

Representative Crews

Representative Hernandez
Representative Liguori

Representative Payne

Representative Pefia

Representative McGarr, Vice-Chairman
Representative Hendrix, Chairman

Agenda
Original Agenda — Attachment |

Request to Speak
Report — Attachment 2

Committee Attendance
Report — Attachment 3

Committee Action
Bill Action
SB1153. DP
SCR1012 DP
SB1021 DP
SBII71 DP
SB1165 DP
SB1234 DPA
SB1i20 DP
SB1291 DP
SB1i343 DP

SB1634 HELD

Members Absent

Julie yberg, Cor
March 14, 2024

MINUTES RECEIVED
CHIEF CLERK’S OFFICE

24/24

Vote Attachments
4-3-0-0 4,5
4-3-0-0 6,7
5-2-0-0 8,9

7-0-0-0 10, 11
6-0-0-1 12, 13
5-1-0-{ 14, 15, 16
4-2-0-1 17, 18
4-2-0-1 19, 20
4-2-0-] 21, 22
23, 24

ittee Secretary

(Original attachments on file in the Office of the Chief Clerk; video archives available at http:/Avww.azleg.gov)

COMMITTEE ON REGULATORY AFFAIRS
March 13, 2024
REVISED #2- 3/12/24

REVISED #2- 3/12/24

REVISED #2- 3/12/24

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature - Second Regular Session

Mseutned. 34 ym

REGULAR MEETING AGENDA

COMMITTEE ON REGULATORY AFFAIRS

DATE Wednesday, March 13, 2024 ROOM HHRS5

Members of the public may access a livestream of the meeting here:

TIME 2:00 P.M.

https://Awww.azleg.gov/videoplayer/?clientID=636 1 162879&eventID=202403 1029

Members:
Representative Crews Representative Payne
Representative Hernandez A Representative Pefia
Representative Liguori

Representative McGarr, Vice-Chairman
Representative Hendrix, Chairman

Bills Short Title
J SB1021 D ? scope of practice; process; repeal
(Shope: Burch, Hernandez A, et al)
4, 2 RA, RULES
Oo é, .
7 SB1120 consumer fraud; unlawful practices(now:
Wz occupational regulations; complaints)

(Wadsack)

Mel: BL 2» RULES
} SB1153 regulatory costs; rulemaking; legislative
yy) ratification

(Kern: Hoffman, Rogers, et al)

LE-O RA, RULES
: - pharmacy-benefits:-coverage)
RA;APPROP-RULES

pharmacy audit; procedures; prohibition

Lf (Shamp: Burch, Gowan)
VA oe / RA, RULES

57 SBI165

Page 1 of 2

Strike Everything Title

pharmacy-benefits—coverage-exentptionsiews

Attachment |
Bills Short Title Strike Everything Title

Lf SB1i171 real estate department; licensing; administration
(Shope)
. RA, RULES
7: 2-0-2
ob SB1234 pharmacy board; virtual manufacturers

(Shamp: Carroll, Gowan)

Sf ogs—/, RA» RULES

2 §B129] residential contractor assessments; recovery fund
a oe >
DP (Hoffman)

LX, 2 2 JRA RULES
/ SB1343 agency review; rules; automatic expiration
LP | (Petersen: Shamp, Bliss, et al)

V9 pe) & RULES

SB1634 nonhealth regulatory boards; challenges;
Hel. prohibition
(Hoffman)
RA, RULES

rulemaking; legislative ratification; regulatory
DE costs
(Kern: Hoffman, Rogers, et al)
£2-0-0. RA, RULES

5 SCRIO12
2 CR101

* If first read and assigned

ORDER OF BILLS TO BE SET BY THE CHAIRMAN

RA
03/0S#2024

93/06/2024
03/12/2024

People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or
assistance with physical accessibility. If you require accommodations, please contact the Chief Clerk's Office at
(602) 926-3032 or through Arizona Relay Service 7-1-1.

Page 2 of 2
Information Registered on the Request to Speak System

House Regulatory Affairs (3/13/2024)

$B1021, scope of practice; process; repeal

Testified in support:
Jessie Armendt, ARIZONA DENTAL HYGIENISTS' ASSOCIATION, AZ ASSN OF NURSE ANESTHETISTS

Testified as opposed:
Jeremy Browning, AZ OSTEOPATHIC MEDICAL ASSN

Support:

Amanda Hagerman, representing self; Jenna Bentley, BARRY GOLDWATER INSTITUTE FOR PUBLIC POLICY
RESEARCH; j Leslie, representing self; Stephen Shadegg, Americans For Prosperity Arizona; Don Isaacson, Arizona
Optometric Association; Dianne McCallister, AZ PHARMACY ASSOCIATION; Michelle AhImer, ARIZONA RETAILERS
ASSOCIATION; Marie isaacson, AZ OPTOMETRIC ASSN

Neutral:
Gail Bird, representing self; Barbara McGill, representing self

Oppose:

Amanda Sheinson, AZ MEDICAL ASSN; Janna Day, ARIZONA SOCIETY OF ANESTHESIOLOGISTS; Eve Shapiro,
representing self; Jennifer Hartmark-Hill, representing self; Gary Figge MD, representing self; Mitchell Giangobbe
MD, representing self; Brian Schneider MD, representing self; Cheryl O'Malley, MD, representing self; Charles Otto
MD, representing self; Libby McDannell, representing self; Eric Ossowski MD, representing self; Jasleen Chhatwal
MD, representing self; Teri Harnisch, representing self; Ronald Fischler, representing self; Luay Shayya, MD,
representing self; William Pekarske, representing self; Susan Pekarske, representing self; Jenni Harris, representing
self; Kristie Nonyelu, representing self; Nicole Bratsch, representing self; Matthew Chaung, representing self;
Robert Tayler Bockstruck, MD, representing self; Sarah Lee-Davisson, representing self

All Comments:

Amanda Hagerman, Self: On behalf of the Goldwater Institute; Jennifer Hartmark-Hill, Self: The practice of
healthcare is tremendously complex, and increasingly so. Requests for changes in scope of practice deserve time
and focused consideration before the launch of the full session. Please vote "No" on repealing this process.; Gary
Figge MD, Self: Expanding scope of practice needs to be through education, NOT legislation to protect the delivery
of healthcare to all Arizonans and this is a CRITICAL step in protecting the publicl; Jasleen Chhatwal MD, Self: The
current Sunrise process has been working well to protect Arizonans against poorly vetted scope of practice
changes that have the potential to endanger their health and well-being. A repeal of this process is unnecessary
and risky.; Jenni Harris, Seif: The Sunrise Review Process is in place in order to provide adequate time for informed
analysis of requests for increased scope of practice. This protects Arizona citizens and Is necessary. It cannot be
repealed.; Matthew Chaung, Self: This important statute protects patients by ensuring there is a critical pause to
consider the impacts of a scope expansion and the effects on patients. Please keep the Sunrise Review Process in
place.

Attachment 4
$B1120, consumer fraud: unlawful practices (NOW: occupational
requlations: complaints)

Oppose:

Nicole Fordey, representing self

All Comments:
Nicole Fordey, Self: need to be able to investigate complaints and discipline as necessary; unclear what qualifies as
"substantial nexus"

$B1153, requlatory costs; rulemaking; legislative ratification

Testified in support:
David Morris, AMERICANS FOR PROSPERITY AZ; Scott Centorino, representing self

Support:

Stephen Shadegg, Americans For Prosperity Arizona; Allen Skillicorn - Personal Position , representing self

Neutral:
Sebastian Aleman, representing self

Oppose:

Sandy Bahr, Sierra Club - Grand Canyon Chapter; Dave Long, representing self; Steve Ramos, representing self;
Denise Link, PhD, WHNP, representing self; Janet Larkin, representing self; Steven Linder, representing seif; Peggie
Jo Vincent, representing self; marilyn duerbeck, representing self; Maria Salvucci, representing self; Kevin Brown,
representing self; Jeanne Casteen, representing self; Kenneth Bierman, representing self; Beatriz Urrea,
representing self; Alisa McMahon, representing self; Michael Fiflis, representing self; Wes Oswald, representing
self; Christina Mollica, representing self; Dianne Post, Self, STATE CONFERENCE NAACP; Cynthia Couture,
representing self; Carol Maas, representing self; Sherrilynn James, representing self; Karen Cusano, representing
self; Donita Ramos, representing self; Helen Kim, representing self; Kathryn Kaczmarek, representing self;
Katherine Doman Sheydayi, representing self; Elizabeth Schauer, representing self; Barbara Oliver, representing
self; Barbara Hutchinson, representing self; Christine Whitley, representing self; Susan Morris, representing self;
Brent Gibbs, representing self; Alexei Sheydayl, representing self; Julie Golding, representing self; Christine Keitges,
representing self; Beverlee Loat, representing self; Lawrence Peters, representing self; Linda Edwards, representing
self; Kathy Fraser, representing self; Janet Senf, representing self; Jocelyn Dustan, representing self; Marilyn Coyle,
representing self; Penny Boone, representing self; Ralph Meredith, representing self; Gayle Meredith, representing
self; Diane Lings, representing self; GARY LEW OLIVER, representing self; Valerie Policastro Edie, representing self;
Margaret Adams , representing self; Mariette Francis, representing self; Jim Moran, representing self; Liana Moran,
representing self; Martha O'Connor, representing self; Kathleen Dubbs, representing self; CAROL R BLACKMAN,
representing self; Mary-Jeanne Fincher, representing self; Gail Prestera, representing self; Roxanna Kearns,
representing self; Stephen Coyle, representing self; Jo Ann Caruthers, representing self; William Levie, representing
self; Michael Pyska, representing self; Vivian Harte, representing self; Norman Fuchs, representing self; Steve
Gorman-Hackstadt, representing self; Dorothy Reed-Inman, representing self; Jason Backman, representing self;
Rebecca Haynes, representing self; Mary Nelson, representing self; Caroline Anderson, representing self; Crystal
Bazarnic, representing self; Gary Rulapaugh, representing self; Charlotte Lis, representing self; leadawn anderton,
representing self; William Yohey, representing self; Margaret Bruns, representing self; Robert Fisher, representing
self; Barbara Larson, representing self; Jennifer Dawson, representing self; Sandra Rizzo, representing self; Patricia
Edelen, representing self; Linda Block, representing self; Diane Klock, representing self; Lynn DeMuth, representing
self; Diane McQueen, representing self; Theresa Paszkiewicz, representing self; ALICE BUCK, representing self;
Marie Williams, representing self; Susan Nee, representing seif; Cynthia Wagner, representing self; Nadine Smith,
representing self; Nancy Hancock, representing self; Kathleen Schanus-Gohl, representing self; Claire Bickel,
representing self; Nelson Morgan, representing self; Robert Larson, representing self; Linda Paul, representing self;
Lisa Koenig, representing self; Kathleen Woessner, representing self; Nancee K Wood, representing self; Eric Kadel,
representing self; Jeanne Hardie, representing self; William Bowlus-Root, representing self; Libby Stortz,
representing self; Joseph Alexander, representing self; Nicole Fordey, representing self; Lisa Maczura, representing
self; Connie Cockrell, representing self; Sharon Arnst, representing self; Claudia Miller, representing self; Terri
Farneti, representing self; Pamela Chittenden, representing self; Katharine Donahue, representing self; Shelley
Stephenson, representing self; Sarah Bihms LD29, representing self; Julian Donahue, representing self; Jerrold
Borchardt, representing self; Marcia Tingley, representing self; Carol Campbell, representing self; Evan Deaubl,
representing self; Lois Hansen, representing self; Karolyn Switzer, representing self; Kathleen Butler, representing
self; STACEY NORDWALL, representing self; Margaret Tinsley, representing self; Beth Balimann, representing self;
Shirley Isaacson, representing self; Rivko Knox, representing self; Pat Jayson, representing self; Frederick James,
representing self; Patricia Brunner, representing self; Sheryl Douglas, representing self; Elissa Karn, representing
self; RITA DEPUYDT, representing self; Barbara Rodman, representing self; Jill Anderson, representing self;
Christopher Cerrato, representing self; Alison Danis, representing self; Valarie Bryant, representing self; Rebecca
Shook, representing self; Rebel Rice, representing self; Denise Hudson, representing self; Nadya Laliberte,
representing self; Salie Travis, representing self; Michael Levine, representing self; Kathleen Sauer, representing
self; J Nicholas Prestera, representing self; Jan Perozeni Corbus, representing self; Srinivas Manne, representing
self; Chris Allen, representing self; marcia stewart, representing self; Gary Townsend, representing self; Margaret
Cordovano, representing self; Kathryn Dorn, representing self; Katherine Hilton, representing self

All Comments:

Allen Skiflicorn - Personal Position , Self: The legislature is accountable to the voters, unelected bureaucrats are
not.; Beatriz Urrea, Self: This makes no sense at all!; Alisa McMahon, Self: Perhaps the legislature could work on
something within its domain instead of inserting itself into the executive branch's business. We have three
branches of government for a reason.; Michael Fiflis, Self: This bill would unreasonably tie the hands of agencies to
regulate and should be rejected.; Helen Kim, Self: I'd like an idea of how many rules the change may impact, and
am disappointed those sponsoring the bill did not provide an estimate; knowing how many rules may be impacted
is important in determining if requiring legislative ratification is feasible.; Kathryn Kaczmarek, Self: Over reach here
on the part of the Legislature.; Christine Whitley, Self: in committee, the sponsor could not answer how many rules
this would impact but said "it shouldn't matter." Wow! | want everything to matter to lawmakers. This bill is
irresponsible, especially if the sponsor is uninformed.; Lawrence Peters, Self: Hampers governor & AG in regulating
unaccountable, wasteful spending such as the ESA voucher program where some use it like piggybanks for
spending having nothing to do with a child’s education costs. Sponsor should answer how many rules this impacts;
Penny Boone, Self: NO. This is a MAGA manipulatory bill. NO; Rebecca Haynes, Self: This shortsighted measure
would kneecap officials’ ability to regulate unaccountable, wasteful spending. A prime example is Arizona's
universal ESA voucher program; parents are complaining about the payment processor, and a new vendor could
cost mor; Jennifer Dawson, Self: would kneecap Hobbs and Mayes’ ability to regulate unaccountable, wasteful
spending. VETOED last year.; Sandra Rizzo, Self: Harms our Governor and Attorney General from handling wasteful
spending. Do not support.; Patricia Edelen, Self: This shortsighted measure would remove the ability of the state
government from regulating wasteful spending.; Cynthia Wagner, Self: Vetoed last year. Still bad.; Nelson Morgan,
Self: While some burdensome regulations might be worthy of moderation, setting an arbitrary dollar threshold is
likely to have many deleterious and (possibly) unintended consequences.; Lisa Maczura, Seif: What are they afraid
that regulators are going to see? Suspicious.; Connie Cockrell, Self: This shortsighted measure would kneecap the
states’ ability to regulate unaccountable, wasteful spending. A prime example is Arizona's universal ESA voucher
program.; Pamela Chittenden, Self: Would restrict efforts for accountability; Katharine Donahue, Self: Just no.
Unworkable.; Sarah Bihms LD29, Self: Oppose. Limiting Arizona agencies' regulatory powers will cripple the
government's ability to implement necessary spending controls.; Lois Hansen, Self: this shortsighted measure
would kneecap the ability to regulate unaccountable, wasteful spending; Karolyn Switzer, Self: This sounds like a
bill just rife with potential unintended consequences. Our state agencies need a certain amount of autonomy
since they're the ones who know what works best for their mandates.; Margaret Tinsley, Self: This is a ridiculous
idea that will either double the workload of the legislature or ensure that nothing ever happens. Vote no.; Rivko
Knox, Self: AZ already has a rule making process for public agencies that allows for public comment. This bill
proposes an unworkable process that will hamstring governmental actions.; Rebel Rice, Self: Stop unneeded
regulation, particularly when no one knows how many agencies this may affect.; Michael Levine, Self: This
shortsighted measure would keep government ability to regulate unaccountable, wasteful spending,; Margaret
Cordovano, Self: This change would make it more difficult for agencies to do their work. The agencies' members
have more expertise in their area than the legislators. Their judgment in enacting rules to implement laws should
be respected.; Kathryn Dorn, Self: This is not how to fix our stat'es budget problems. You know what *would*
help? GETTING RID OF THE ESA VOUCHER PROGRAM. Sebastian Aleman, Self: Legistative Liaison for OEO,
deferring to Gina Flores Public Affairs Director for OEO, Thank you.

$B1165, pharmacy audit: procedures: prohibition

Testified in support:
Dianne McCallister, ARIZONA PHARMACY BUSINESS COUNCIL, AZ PHARMACY ASSOCIATION

Support:
Mark Boesen, representing self; Michelle Ahimer, ARIZONA RETAILERS ASSOCIATION

Neutral:
Kelsey Lundy, Pharmaceutical Care Management Association (PCMA}

$B1171, real estate department: licensing: administration

Testified in support:
Marlee McCormick, AZ DEPT OF REAL ESTATE

$B1234, pharmacy board: virtual manufacturers

Testified in support:
Dianne McCallister, STRYKER SUSTAINABILITY SOLUTIONS
Support:
Mark Boesen, STRYKER SUSTAINABILITY SOLUTIONS

S$B1291, residential contractor assessments: recovery fund

Testified as neutral:
Tom Cole, AZ REGISTRAR OF CONTRACTORS

Neutral:
Araceli Lopez, AZ REGISTRAR OF CONTRACTORS

All Comments:
Tom Cole, AZ REGISTRAR OF CONTRACTORS: Neutral with concerns. CEO of the Registrar of Contractors; Araceli
Lopez, AZ REGISTRAR OF CONTRACTORS: Neutral with concerns

$B1343, agency review; rules: automatic expiration

Testified in support:
Jonathan Wolfson, representing self

Testified as neutral:
Marlee McCormick, AZ DEPT OF REAL ESTATE

Oppose:

Nicole Fordey, representing self

All Comments:
Jonathan Wolfson, Self: On behalf of Cicero Action

$B1634, nonhealth requlatory boards; challenges; prohibition

SCR1012, rulemaking: legislative ratification: requlatory costs

Support:

Scott Centorino, representing self; Stephen Shadegg, Americans For Prosperity Arizona; Allen Skillicorn - Personal
Position , representing self; Lynn Ludwig, representing self; Teri Grunewald, representing self; James L Simpson,
representing self; Mary Evelyn Simpson, representing self; deana corsa, representing self

Oppose:

Sandy Bahr, Sierra Club - Grand Canyon Chapter; Dave Long, representing self; Steve Ramos, representing self;
Mary Pradelt, representing self; Denise Link, PhD, WHNP, representing self; Janet Larkin, representing self; Steven
Linder, representing self; Peggie Jo Vincent, representing self; marilyn duerbeck, representing self; Maria Salvucci,
representing self; Beverly Janowitz-Price, representing self; Jeanne Casteen, representing self; Kenneth Bierman,
representing self; Beatriz Urrea, representing self; Alisa McMahon, representing self; Michael Fiflis, representing
self; Wes Oswald, representing self; Christina Mollica, representing self; Dianne Post, representing self; Cynthia
Couture, representing self; Carol Maas, representing self; Sherrilynn James, representing self; Donita Ramos,
representing self; Helen Kim, representing self; Kathryn Kaczmarek, representing self; Katherine Doman Sheydayi,
representing self; Elizabeth Schauer, representing self; Barbara Oliver, representing self; Barbara Hutchinson,
representing self; Christine Whitley, representing self; Becky Sayler, representing self; Susan Morris, representing
self; Brent Gibbs, representing self; Alexei Sheydayl, representing self; Julie Golding, representing self; Christine
Keitges, representing self; Beverlee Loat, representing self; Lawrence Peters, representing self; Linda Edwards,
representing self; Kathy Fraser, representing self; Janet Senf, representing self; Kathy Pyner, representing self;
Jocelyn Dustan, representing self; Marilyn Coyle, representing self; Penny Boone, representing self; Ralph Meredith,
representing self; Gayle Meredith, representing self; Anne Leota Hart, representing self; Diane Lings, representing
self; GARY LEW OLIVER, representing self; Valerie Policastro Edie, representing self; Margaret Adams,
representing self; Mariette Francis, representing self; Jim Moran, representing self; Liana Moran, representing self;
Martha O'Connor, representing self; Kathleen Dubbs, representing self; CAROL R BLACKMAN, representing self;
Mary-Jeanne Fincher, representing self; Gail Prestera, representing self; Roxanna Kearns, representing self;
Stephen Coyle, representing self; Jo Ann Caruthers, representing self; Michael Pyska, representing self; Vivian
Harte, representing self; Norman Fuchs, representing self; Steve Gorman-Hackstadt, representing self; Dorothy
Reed-Inman, representing self; Jason Backman, representing self; Rebecca Haynes, representing self; Mary Nelson,
representing self; Caroline Anderson, representing self; Crystal Bazarnic, representing self; Gary Rulapaugh,
representing self; Kathryn Anderson, representing self; Gail Bird, representing self; Charlotte Lis, representing self;
leadawn anderton, representing self; William Yohey, representing self; Margaret Bruns, representing self; Robert
Fisher, representing self; Barbara Larson, representing self; Jennifer Dawson, representing self; Sandra Rizzo,
representing self; Patricia Edelen, representing self; Linda Block, representing self; Diane Klock, representing self;
Lynn DeMuth, representing self; Diane McQueen, representing self; Theresa Paszkiewicz, representing self; ALICE
BUCK, representing self; Pat Jayson, representing self; Robert Larson, representing self; Linda Paul, representing
self; Lisa Koenig, representing self; Nancee K Wood, representing self; Kathleen Woessner, representing self;
Jeanne Hardie, representing self; Claire Bickel, representing self; Jacqueline deSa, representing self; William
Bowlus-Root, representing self; Nelson Morgan, representing self; Eric Kadel, representing self; Libby Stortz,
representing self; Joseph Alexander, representing self; Nicole Fordey, representing self; Sharon Arnst, representing
seif; Lisa Maczura, representing self; Nancy Hancock, representing self; Pamela Chittenden, representing self;
Shelley Stephenson, representing self; Sarah Bihms LD29, representing self; Julian Donahue, representing self;
JOHN FIENE, representing self; Jerrold Borchardt, representing self; Marcia Tingley, representing self; Carol
Campbell, representing self; Evan Deaubl, representing self; Lois Hansen, representing self; Cynthia Wagner,
representing self; Karolyn Switzer, representing self; Kathteen Butler, representing self; Margaret Tinsley,
representing self; Lori Taniguchi, representing self; Beth Ballmann, representing self; Rivko Knox, representing self;
Frederick James, representing self; Patricia Brunner, representing self; Elissa Karn, representing self; Marte
Williams, representing self; Kathleen Schanus-Gohl, representing self; Jill Anderson, representing self; Barbara
Rodman, representing self; Christopher Cerrato, representing self; Alison Danis, representing self; Valarie Bryant,
representing self; Nadya Laliberte, representing self; Denise Hudson, representing self; Michael Levine,
representing self; Kathleen Sauer, representing self; RITA DEPUYDT, representing self; J Nicholas Prestera,
representing self; Jan Perozeni Corbus, representing self; Srinivas Manne, representing self; Rebel Rice,
representing self; Chris Allen, representing self; marcia stewart, representing self; Margaret Cordovano,
representing self; Kathryn Dorn, representing self
All Comments:

Mary Evelyn Simpson, Self: YavGOP PC Gives the legislature some oversight and input into state agency rule
making..; Beatriz Urrea, Self: This makes no sense at all!; Alisa McMahon, Self: Referring this to the ballot is a waste
of taxpayer dollars.; Michael Fiflis, Self: This bill would unreasonably tie the hands of agencies to regulate and
should be rejected.; Helen Kim, Self: I'd like to know how many rules the change may impact, and am disappointed
the bill does not provide an estimate, as knowing how many bills may be impacted is important to know in
determining how feasible requiring legislative ratification would be.; Barbara Oliver, Self: This bill costs too much];
Lawrence Peters, Self: Hampers agencies in regulating unaccountable, wasteful spending such as the ESA voucher
program where some use it like piggybanks for spending having nothing to do with a child’s education costs.
Sponsor should answer how many rules this impacts; Kathy Pyner, Self: Do not clutter the ballot when you can win
your way,; Penny Boone, Self: NO. Az agencies need their funding. MAGA needs to stop trying to manipulate
them.; Mary-Jeanne Fincher, Self: The extraordinarily high number of ballot referrals being pushed this year could
create chaos in the Nov election. Stop!; Jason Backman, Self: This law creates more work for an already
overburdened legislature, and it will have negative unintended consequences.; Rebecca Haynes, Self: This
shortsighted measure would kneecap official's ability to regulate unaccountable, wasteful spending, a prime
example of which is the universal ESA voucher program.; Jennifer Dawson, Self: shortsighted measure would
kneecap Hobbs and Mayes’ ability to regulate unaccountable, wasteful spending. Like $B1153. Similar bill VETOED
last year.; Patricia Edelen, Self: This measure would kneecap state government's ability to regulate unaccountable,
wasteful spending.; Nelson Morgan, Self: The arbitrary monetary threshold would have unintended consequences.
If there is an inappropriate regulation it should be handled individually.; Lisa Maczura, Self: Mind your own
beeswax as my relatives used to say. Overreach.; Sarah Bihms LD29, Self: "SCR1012: Oppose SCR1012 for creating
an unnecessary bureaucratic hurdle that could impede beneficial regulatory progress in Arizona.; JOHN FIENE, Self:
The agencies have the expertise to craft their own rules. The Legislature does not exude much intelligence that |
can trust.; Lois Hansen, Self: this shortsighted measure would kneecap the ability to regulate unaccountable,
wasteful spending; Karolyn Switzer, Self: This sounds like a bill just rife with potential unintended consequences.
Our state agencies need a certain amount of autonomy since they're the ones whe know what works best for their
mandates.; Margaret Tinsley, Self: This seems very unrealistic and unnecessary. Please vote no.; Rivko Knox, Self:
Stop cluttering up the ballot!! Also, please stop micromanaging government agencies!! Our complex society can
not function if the Leg has to ratify ail regulations, which already require a public comment period.; Michael Levine,
Self: Please stop cluttering up my ballot.; Rebel Rice, Self: No need to send to voters. You have been elected to
approve state and agency funding. Perhaps it is time to be working on that important obligation.; Margaret
Cordovano, Self: This change would make it more difficult for agencies to do their work. The agencies’ members
have more expertise in their area than the legislators. Their judgment in enacting rules to implement laws should
be respected.
ARIZONA STATE LEGISLATURE
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON REGULATORY AFFAIRS
CHAIRMAN: Laurin Hendrix VICE-CHAIRMAN: —_ Cory McGarr
DATE 03/13/24 124 124 124 124
CONVENED 2.2g7P™ m m m m
RECESSED
RECONVENED
ADJOURNED 3: 4/ pm
MEMBERS
Crews i
Hernandez A Va
Liguori VA
Payne Va
Pefia i~
McGarr, Vice-Chairman va
Hendrix, Chairman i

v Present --- Absent exc Excused

Attachment _~7
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
Senate: GOV DP 5-2-1-0 | 3rd Read 16-10-4-0

SB 1153: regulatory costs; rulemaking; legislative ratification
Sponsor: Senator Kern, LD 27
Committee on Regulatory Affairs

Overview
Prescribes the requirements for specified proposed rules to be ratified by the Legislature

before enactment.

History
The mission of OKO is to expand economic opportunities for people in Arizona by leading the

analysis and evaluation of Arizona's population and economy and investing in communities
to power the state's economic growth (QEQ).

Statute designates AROC to oversee the adoption of rules by state agencies. The 11-member
committee includes: 1) five members of the House of Representatives appointed by the
Speaker; 2) five members of the Senate appointed by the President; 3) the Governor or
designee. Legislative Council serves as the staff for AROC (A.R.S.§ 41-1046),

Statute prohibits state agencies from conducting rulemaking without prior written approval

of the Governor. State agencies may not adopt any new rule that would increase existing

regulatory burdens on the free exercise of property rights or the freedom to engage in lawful

business or occupation unless: 1) the rule reduces regulatory restraints or burdens; or 2) is

necessary to implement statutes or is required by a final court order or decision (A.R.S. § 41-

1088 et al.).

Provisions

1. Directs an agency to submit a proposed rule to OKO for review if the rule is estimated to
increase state regulatory costs by more than $100,000 within 5 years after
implementation. (Sec. 1)

2. Stipulates that if the OHO confirms the estimated regulatory costs will increase by more

than $500,000 within 5 years after the proposed rule's implementation, then the rule may
not become effective until the Legislature ratifies the proposed rule. (Sec. 1)

3. Instructs OKO to submit the proposed rule to AROC no later than 30 days before the next
regular legislative session. (Sec. 1)

4. Requires AROC to submit the proposed rule to the Legislature when practicable. (Sec. 1)

5. Authorizes any legislator to sponsor legislation to ratify the proposed rule, which is
exempt from the statute relating to the time and manner of rulemaking. (Sec. 1)

6. Prohibits an agency from filing a final rule with the Secretary of State before obtaining
legislative approval through legislation ratifying the proposed rule. (Sec. 1)

OO Prop 105 (45 votes) 0 Prop 108 (40 votes) 0 Emergency (40 votes) O Fiscal Note

SB 1153
Initials DC/SJ Page 1 Regulatory Affairs

Attachment Y
7. Requires an agency to publish a notice of termination in the register and terminate the
proposed rulemaking if the Legislature does not enact legislation to ratify the proposed
rule during the current legislative session.

8. Allows a person who is regulated by an agency proposing a rule or a legislator to request
OEO to review the rule.

9. Excludes emergency rulemaking from the legislative ratification requirements. (Sec. 1)

10. States that, beginning on the general effective date, a rule is void and unenforceable
unless the rule is ratified as prescribed. (Sec. 1)

11. Excludes the Arizona Corporation Commission from the requirements of legislative
ratification of proposed rules. (Sec. 1)

SB 1153
Initials DC/SJ Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Regulatory Affairs BILLNO. $B 1153

DATE March 13, 2024 MOTION: WA,

PASS AYE NAY PRESENT | ABSENT

Crews

i~
Hernandez A va
wv

Liguori

Payne

Pefia

McGarr, Vice-Chairman

Hendrix, Chairman

SAAR AN

2 2 <<

APPROVED: y Alpe SECRETARY

AM RHENDRIXChairman
CORY M@GARR, Vice-Chairman

ATTACHMENT. 2
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: GOV DP 5-2-1-0 | 3% Read 16-13-1-0

SCR1012: rulemaking; legislative ratification; regulatory costs
Sponsor: Senator Kern, LD 27
Committee on Regulatory Affairs

Overview
Submits a proposition regarding legislative ratification of proposed rules to the voters.

History
The mission of the Office of Economic Opportunity (OEO) is to expand economic opportunities

for people in Arizona by leading the analysis and evaluation of Arizona's population and
economy and investing in communities to power the state's economic growth (OEQ).

The Administrative Rules Oversight Committee (AROC) has authority to review any
proposed or final rule for conformity with statute and legislative intent. AROC additionally
receives complaints concerning statutes, rules, agency practices and substantive policy
statements that are alleged to be duplicative or onerous and may hold hearings regarding
the allegations (A.R.S. §§ 41-1047, 41-1048).

Provisions
1. Directs an agency to submit a proposed rule to OKO for review if the rule is estimated to
increase state regulatory costs by more than $100,000 within five years after

implementation.

2. Specifies that when OEO confirms a proposed rule is estimated to increase state
regulatory costs by more than $500,000 within five years after the rule's implementation,
the rule becomes effective only when the Legislature ratifies the proposed rule.

3. Instructs OEO to submit the proposed rule to AROC no later than 30 days before the next
regular legislative session.

4. Stipulates that AROC must submit the proposed rule to the Legislature as soon as
practicable.

5. Authorizes any member of the Legislature to introduce legislation to ratify the proposed
rule and exempts the proposed rule from statute relating to the time and manner of
rulemaking.

6. Prohibits an agency from filing a final rule with the Secretary of State before obtaining
legislative approval through legislation ratifying the proposed rule.

7. Requires an agency to publish a notice of termination in the register and terminate the
proposed rulemaking if the Legislature does not enact legislation to ratify the proposed
rule during the current legislative session.

C1 Prop 105 (45 votes) C1 Prop 108 (40 votes) OO Emergency (40 votes) [) Fiscal Note

SCR 1012
Initials SJ/RP Page 1 Regulatory Affairs

Attachment Ce.
8. Allows a person who is regulated by an agency proposing a rule or a legislator to request
OKO to review the rule.

9. Exempts emergency rules adopted pursuant to statute from the legislative ratification
requirements on rulemaking.

10. States that, beginning on the general effective date, a rule is void and unenforceable
unless the rule is ratified as prescribed.

11. Excludes the Arizona Corporation Commission from the requirements of legislative
ratification of proposed rules.

12. Directs the Secretary of State to submit this proposition to the voters at the next general
election.

0 Prop 106 (45 votes) C] Prop 108 (40 votes) 0 Emergency (40 votes) UO Fiscal Note

SCR 1012
Initials SJ/RP Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Regulatory Affairs BILLNO. SCR 1012
DATE March 13, 2024 MOTION: Wa
PASS AYE NAY PRESENT | ABSENT
Crews WA
Hernandez A i
Liguori —
Payne
Pena

McGarr, Vice-Chairman

Hendrix, Chairman

APPROVED:

KEL I

_7 LAURIN PENDRIX,-Ghairman
RY MCGARR, Vice-Chairman

SS AAAI

7 LP K?

y, COMMIT SECRETARY

ATTACHMENT. /

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: HHS DPA 5-1-1-0 | 38rd Read 24-4-2-0

SB 1021: scope of practice; process; repeal
Sponsor: Senator Shope, LD 16
Committee on Regulatory Affairs

Overview
Removes the requirement that health professional groups proposing to increase the scope of
practice of a state-regulated health profession must complete a statutory sunrise review.

History
Currently, statute provides that a health profession must be regulated by this state only if:

1) there is credible evidence that the unregulated practice of that health profession can
clearly harm or endanger the public health, safety or welfare and the potential for
harm is easily recognizable and not remote or dependent on tenuous argument;

2) the public needs and can reasonably be expected to benefit from an assurance of initial
and continuing professional ability; and

3) the public cannot be effectively protected by other means in a more cost-effective
manner (A.R.S. § 32-3103).

A health professional group may file a sunrise application if they would like to be regulated
or expand their current scope of practice. Specifically, a health professional group proposing
to expand their scope of practice must submit the application that addresses the statutorily
prescribed factors and submit it to the President of the Senate and Speaker of the House of
Representatives by November 1 before the start of the legislative session.

The President of the Senate and Speaker of the House of Representatives may assign the
application to the Senate Health and Human Services Committee and the House of
Representatives Health & Human Services Committee or their respective successor
committees to review the report. The legislative committees may hold informational hearings
on the application and take public comments before the legislative session convenes but must
not vote on whether to accept or reject the application.

The health professional group may also request an informational hearing and introduce
legislation in the legislative session regardless of if an informational hearing is conducted or
if any comments were received during the informational hearing. The lack of a hearing must
not be considered as either support or rejection of the health professional group's proposed
legislation. Sunrise applications that are submitted are not required to be resubmitted for
five years, unless there is a material change in the increased scope of practice (A.R.S. §§ 32-
3104, 32-3105 and 82-3106).

Provisions
1. Repeals the requirement that health professional groups seeking to increase the scope of
practice for a state-regulated health profession must complete a statutory sunrise review.

(Sec. 3, 4)

SB 1021
Initials AG/KT Page i Regulatory Affairs

Attachment J
2. Outlines criteria that the Legislature must consider for proposed legislation to increase
the scope of practice of a health professional group:

a) whether current education and training, preparedness or available continuing
education and training for the health professional group adequately prepares
members of the profession for the proposed increased scope;

b) whether increasing the scope of practice will improve patient access to safe and
affordable care;

c) whether increasing the scope of practice will advance health, safety or welfare; and

d) whether increasing the scope of practice will create a substantial regulatory burden
for the state, including the administrative and financial capacity of the regulatory
entity that regulates the health professional group. (Sec. 4)

3. Instructs a health professional group seeking an increase in the scope of practice, within
10 days of introduction of proposed legislation or an amendment for expansion, to provide
written notification to the health profession's regulatory entity. (Sec. 4)

4. Deems it is the Legislature's intent to preserve the health and safety of Arizonans and
ensure that Arizonans only receive health care services from qualified providers. (Sec. 6)

5. Declares that the Legislature reserves the right to reinstate the sunrise review process
at any time if its elimination demonstrably lessens the quality of health care in Arizona.

(Sec. 6)
6. Defines increase the scope of practice. (Sec. 4)
Modifies the term health professional group. (Sec. 1)

Makes technical and conforming changes. (Sec. 1-4)

QO Prop 105 (45 votes) D Prop 108 (40 votes) © Emergency (40 votes) [] Fiscal Note

SB 1021
Initials AG/KT Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON

Regulatory Affairs

BILL NO. SB 1021

DATE

March 13, 2024

motion: {7

PASS

AYE

NAY PRESENT | ABSENT

Crews

Hernandez A

\

Liguori

Payne

Pefia

McGarr, Vice-Chairman

Hendrix, Chairman

APPROVED:

MDa LIK
RISHAENDRIX, Chairman
CORY MCGARR, Vice-Chairman

RANK

ok

oO CO

i

Va
COMMITTER SECRETARY

ATTACHMENT G
ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

Second Regular Session
Senate: FICO DPA 6-0-1-0 | 3' Read DPA 26-0-4-0

SB 1171: real estate department; licensing; administration
Sponsor: Senator Shope, LD 16
Committee on Regulatory Affairs

Overview
Amends statute pertaining to the Arizona Department of Real Estate (ADRE).

History
The ADRE was established in 1921 to protect public interest through the licensure and

regulation of the real estate profession in Arizona. The Department:
1) issues licenses;
2) provides oversight for real estate brokers and salespersons, real estate schools,
residential developments, timeshares, cemeteries, and membership campgrounds;
3) is responsible for investigations, enforcement, and compliance; and
4) provides a venue for homeowners and homeowners associations to resolve disputes
(Laws 1921, Chapter 160, A.R.S. § 32-2102).

The ADRE is directed by the Real Estate Commissioner (Commissioner), who is appointed
by and serves at the pleasure of the Governor. The responsibilities of the Commissioner
include the following:

1) administering the department;

2) preparing and distributing educational materials for licensees and the public;

3) managing a real estate education revolving fund; and

4) adopting rules for chapter compliance (A.B.S. § 32-2107).

The Real Estate Advisory Board (Board) provides recommendations to the Commissioner and
is also required to provide an annual evaluation to the Governor describing the performance
of the Commission and the ADRE. The Board consists of 10 members, appointed by the

Governor to six-year terms (A.R.S. § 32-2104).

Provisions

Commissioner
1. Clarifies that the Commissioner cannot act as a broker, salesperson or agent of any real
estate or brokerage firm. (Sec. 3)

2. Removes the requirement that the Commissioner must issue a new license upon an
employing broker's notice of a change of business location or statutory agent. (Sec. 10)

3. States that if a licensee applies to change the license status to active, the Commissioner
may require the licensee to complete continuing education credit hours before activating

the license. (Sec. 12)

4, Requires the Commissioner to have an applicant whose license has been inactive for more
than 15 years successfully pass a state-specific examination before activating the license.

(Sec. 12)

SB 1171
Initials IG Page 1 Regulatory Affairs

Attachment _/O
10.

11.

12.

13,

14.

15.

ADRE
Allows ADRE to suspend a license if the licensee's fingerprint clearance card is suspended
and either:
a) the Commissioner denies the application on the basis that the licensee was convicted
of the alleged crime causing the suspension; or
b) the licensee fails to submit sufficient evidence to prove the individual applied for a
good cause exception within five business days after being notified by ADRE. (Sec. 4)

Removes the requirement for ADRE to contact the Arizona Military Airspace Working
Group to request contact information and instead directs ADRE to post the information
on their website. (Sec. 5)

Instructs the ADRE to send a notice to a licensee with an inactive license one year before
the license becomes inactive for more than 15 years. (Sec. 12)

Board

Modifies the membership of the Board to include the following:

a) one member who has been engaged in a commercial real estate brokerage for the five
years immediately preceding the appointment;

b) one member who has been engaged in timeshare, campground or cemetery sales for
the five years immediately preceding the appointment;

c) one member who has been primarily engaged in subdividing real property for the five
years immediately preceding the appointment; and

ad) one member who has been an active school administrator or approved instructor for
the five years immediately preceding the appointment. (Sec. 2)

Specifies all persons serving as members of the Board may continue to serve until the
expiration of their term, (Sec. 24)

Broker Responsibilities
Prohibits an entity from:
a) assuming representation for new clients while a new license is pending or until a new
designated broker is added to the entity's license; and
b) having a person named as the designated broker on the license if the person is or was
named as a designated broker on any other license in this state or another state and
if any of the specified circumstances apply. (Sec. 8)

Authorizes a nonresident broker to use online recordkeeping if the data is backed up and
the nonresident broker provides the online recordkeeping provider's contact information
to the ADRE. (Sec. 9)

Requires an employing broker to have and maintain a definite place of business or an
active and valid statutory agent on file with the Corporation Commission. (Sec. 10)

Stipulates that the employing broker must notify the ADRE of the definite place of
business or the valid statutory agent. (Sec. 10)

Adds that if a broker engages in property management activities, the broker must
complete a broker management clinic that is designed to teach proficiency in property
management, (Sec. 15)

Modifies requirements pertaining to a broker's completion of a monthly reconciliation
between the trust fund account bank statements, client ledgers and trust fund account
ledgers. (Sec. 16)

SB 1171

Initials IG Page 2 Regulatory Affairs
16. States that a variation in account balances caused by specified acts or omissions is a
violation of statute. (Sec. 16)

17, Requires all property management accounts to be designated as trust accounts on the
broker's records, (Sec. 20)

18. Removes the requirement that a property management account must include descriptive
wording in the trust account title. (Sec. 20)

Application and Licensing Requirements
19. Strikes the requirement for a broker or salesperson's license application to include
information pertaining to the applicant's employment history. (Sec. 6)

20. Removes the requirement for a licensee to have available for use, a copy of the real estate
laws and rules, (Sec. 6)

21. Specifies that the examination administered for a real estate broker's license must be
proctored. (Sec. 7)

22. Makes modifications to the state-specific examination requirements for a broker license
applicant or salesperson license applicant who does not reside in Arizona. (Sec. 9)

23. Specifies that a licensee with an inactive license is not required to complete continuing
education credit hours during the period that the license is inactive. (Sec. 12)

Miscellaneous
24. Defines pertinent terms. (Sec. 1, 4)

25. Makes technical changes. (Sec. 1-18, 21-23)
26. Makes conforming changes. (Sec. 1, 2, 6, 8, 16, 19)

27, Replaces the term online course with distance learning course. (Sec. 7, 13, 14)

0 Prop 105 (45 votes) €] Prop 108 (40 votes) Cl Emergency (40 votes) UO Fiscal Note

SB 1171
Initials 1G Page 3 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Regulatory Affairs BILLNO. — SBit?71

DATE March 13, 2024 MOTION: Wa

PASS AYE NAY PRESENT |; ABSENT
Crews ~*~
Hernandez A Wal
Liguori 7
Payne 7
Pefia iY
McGarr, Vice-Chairman i
Hendrix, Chairman 4
7 2 Za ee,
APPROVED:  <fKbtelocs

7 ZRORIHENDRIX, Chairman
CORY MCGARR, Vice-Chairman

ATTACHMENT__/ [
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: FICO DPA 5-0-2-0 | 3% Read DPA 27-0-3-0

SB 1165: pharmacy audit; procedures; prohibition
Sponsor: Senator Shamp, LD 29
Committee on Regulatory Affairs

Overview

Outlines specified provisions that an auditing entity must comply with when conducting a
wholesale invoice audit. Prohibits an auditing entity from retroactively reducing the amount
of a claim payment unless specified criteria apply.

History
Statute outlines the procedures for in-person and desktop audits performed by an auditing

entity working on behalf of an insurer or Pharmacy Benefits Manager (PBM) for the purposes
of auditing drug claims adjudicated by pharmacies. The auditing entity must deliver a
preliminary audit report to the pharmacy within 60 days after the conclusion of the audit. A
pharmacy is allowed at least 30 days after receipt of the preliminary audit to provide
documentation to address any discrepancy found in the audit. Unless otherwise required by
state or federal law, audit information may not be shared with any entity other than the
insurer on whose behalf the audit was conducted (A.R.S. § 20-3822, 20-3323),

The Department of Insurance and Financial Institutions (DIFD regulates and monitors
insurance companies and professionals operating in Arizona to protect the public and help
ensure that these entities follow Arizona and federal laws (Ariz. Const. § 15-5). Beginning
January 1, 2025, PBMs must apply and pay a fee to DIFI for a valid certificate of authority
to operate as a PBM who performs services for a health plan subject to state jurisdiction
(A.R.S. § 20-3333). A PBM is a person, business or entity that manages the prescription drug
coverage provided by a contracted insurer or other third-party payor. Responsibilities include
the processing and payment of claims for prescription drugs, the performance of drug
utilization review, the processing of drug prior authorization requests, the adjudication of
appeals related to prescription drug coverage, contracting with network pharmacies and
controlling the cost of covered prescription drugs (A.R.S. § 20-3321).

Provisions
1, Prohibits an auditing entity from conducting an audit on the pharmacy claims of another
auditing entity when conducting a wholesale invoice audit. (Sec. 1)

2. Instructs an auditing entity to comply with the following provisions when conducting a
wholesale invoice audit:

a) reverse a finding of discrepancy if the pharmacist or pharmacy dispensed the correct
quantity of a drug according to the prescription and either of the specified
circumstances apply;

b) accept any of the specified documentation as a presumption of validity to support the
pharmacy's claim related to the purchase of a dispensed drug; and

O Prop 105 (45 votes) 0 Prop 108 (40 votes) 0 Emergency (40 votes) [] Fiscal Note

SB 1165
Initials IG Page 1 Regulatory Affairs

Attachment he
c) provide any supporting documentation that the pharmacy supplier provided to the
auditing entity no later than 10 business days after receiving the pharmacy’s request.
(Sec. 1)

3. States that an auditing entity cannot, directly or indirectly, retroactively reduce the
amount of a claim payment to a pharmacist or a pharmacy after adjudication of the claim
for a prescription drug unless any of the specified circumstances apply. (Sec. 1)

4. Clarifies that an auditing entity, insurer or PBM is not prohibited from increasing the
amount of a claim payment after adjudication of the claim. (Sec. 1)

5. Makes technical changes. (Sec. 1)

SB 1165
InitialsIG Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON

Regulatory Affairs BILLNO. $B 1165

MOTION: Wf

DATE March 13, 2024
PASS AYE NAY PRESENT | ABSENT

Crews VA
Hernandez A ) Y
Liguori “
Payne ~~
Pefa Va
McGarr, Vice-Chairman ~
Hendrix, Chairman /

le 2 O /

APPROVED:

OF AAURIVAIENDRIX, Chairman
CORY MCGARR, Vice-Chairman

, _
Z COMMITAEE SECRETARY

ATTACHMENT.

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: HHS DP 7-0-0-0 | 3rd Read 25-2-3-0

SB 1234: pharmacy board; virtual manufacturers
Sponsor: Senator Shamp, LD 29
Committee on Regulatory Affairs

Overview

Prescribes requirements for virtual manufacturers to comply with Current Good
Manufacturing Practice (CGMP) regulations and includes applicable requirements for when
a contracted manufacturer is in another country,

History
The United States Food and Drug Administration monitors drug manufacturers for

compliance with its Current Good Manufacturing Practice (CGMP) regulations to ensure the
quality of drug products. CGMP regulations consist of minimum requirements for the
methods, facilities and controls for the manufacturing, processing and packaging of drug
products, For a new and generic drug to enter the market, the FDA must determine whether
the manufacturer complies with CGMP regulations (CGMB).

Virtual manufacturers are required to ensure that the facility is inspected when an initial or
renewal application for determining the contracted manufacturer's CGMP compliance if the
manufacturer is in another country. Virtual manufacturer includes own-label distributors
that contract with a manufacturer to produce a drug or device and with another entity to
package and label the drug or device, which then is sold under the name of the distributor or
another name (A.A.C. R4-23-110)

The State Board of Pharmacy (Board) regulates the practice of pharmacy to protect the health
safety and welfare of Arizona citizens. The Board is authorized to issue specified permits in
the field of pharmacy which include: 1) a pharmacy permit; 2) a drug manufacturer's permit;
8) a drug packager or drug prepackager permit; and 4) a durable medical equipment or
compressed medical gas distributor or supplier permit. The Board is tasked with prescribing
and furnishing the requirements for a pharmacy permit application. Statute outlines the
grounds for the denial or revocation of a pharmacy permit by the Board (A.R.S. §§ 32-1929,

32-1930).

Provisions
1. Defines virtual manufacturer as an entity that:
a) contracts for the manufacture of a device including private label distributors;
b) owns either the FDA new drug application or abbreviated drug application number
for a drug or the unique FDA device identification number for a prescription device;
c) does not physically manufacture the drug or device; and
d) contracts with an FDA registered manufacturer for the physical manufacture of.the
drug or device. (Sec. 1)

1 Prop 105 (45 votes) C] Prop 108 (40 votes) [Emergency (40 votes) C1 Fiscal Note

SB 1234
Initials DC/RP Page 1 - Regulatory Affairs

Attachment /7
2. Requires a virtual manufacturer located in Arizona or any other jurisdiction, that is
responsible for the shipment of prescription drugs or devices into Arizona, to make
professionally reasonable efforts to ensure that FDA registered manufacturing entity
complies with applicable CGMP regulations. (Sec. 2)

3. Directs virtual manufacturers of prescription drugs to contract with a permitted drug
manufacturer in Arizona unless the contracted manufacturer is located in another
country. (Sec. 2)

4, Makes conforming changes. (Sec. 1)

SB 1234
Initials DC/RP Page 2 Regulatory Affairs
| am offering a VERBAL amendment to SB 1234 as follows:
“Page 13, Line 36, after “state” strike remainder of line; insert a period

Strike line 37

Amend title to conform”

Attachment _.S—
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Regulatory Affairs BILL NO. SB 1234

DATE March 13, 2024 MOTION: UY Y
PASS AYE NAY PRESENT | ABSENT

Crews ~~

Hernandez A iv

Liguori “

Payne ~~

Pefia Va

McGarr, Vice-Chairman i”

Hendrix, Chairman VA

a / O f

APPROVED: COMMITTEE SECRETARY

Z e HENDRIX Chairman
CORY MCGARR, Vice-Chairman

ATTACHMENT___/ A
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: GOV DPA/SE 4-2-2-0 | 3rd Read 16-12-2-0

SB 1120: consumer fraud; iawfal practices

NOW: occupational regulations; complaints
Sponsor: Senator Wadsack, LD 17
Committee on Regulatory Affairs

Overview

Permits an agency or occupational association with disciplinary authority over its members
to investigate a complaint or take enforcement action only if the complainant has a
substantial nexus to the person who is the subject of the complaint.

History
Statute limits occupational regulations to those necessary to fulfill a public health, safety or

welfare concern. If an individual is harmed by an occupational regulation, the person may
petition the agency to repeal or modify the regulation. Within 90 days after the petition filing,
the agency must: 1) repeal or modify the regulation; 2) suggest legislative action to bring the
regulation into compliance with current law; or 3) state the basis for why the regulation
complies with statute (A.R.S. §§ 41-1093.01, 41-1093.02).

Further, current law permits an individual to file an action in a court of general jurisdiction
to challenge an occupational regulation and the court must find by a preponderance of the
evidence that the challenged occupational regulation "burdens the entry into or participation
in an occupation, trade or profession and that this state has fatled to prove by a preponderance
of the evidence that the challenged occupational regulation is demonstrated to be necessary to
specifically fulfill a public health, safety or welfare concern." Statute directs the court to
enjoin further enforcement of the occupational regulation and award the plaintiff with

reasonable attorney's fees and costs. (A.R.S. § 41-1093.03).

Black's Law Dictionary defines nexus as a point of casual intersection, link, relation or
connection.

Provisions

1. States that regardless of any other law, an agency or occupational association with
disciplinary authority over its members may only investigate a complaint and take
disciplinary or enforcement action if the complainant has a substantial nexus with the
individual who is the subject of the complaint. (Sec. 1, 2)

QO) Prop 105 (45 votes) OX Prop 108 (40 votes) O Emergency (40 votes) O Fiscal Note

SB 1120
Initials Page 1 Regulatory Affairs

Attachment /7
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Regulatory Affairs BILL NO. SB 1120
DATE March 13, 2024 MOTION: DF
PASS AYE NAY PRESENT | ABSENT
Crews ~~
Hernandez A Vad
Liguori \7
Payne VA
Pefia VA
McGarr, Vice-Chairman Va
Hendrix, Chairman VY
GY | & ce] /
4

APPROVED: y, COMMITFFE SECRETARY

LAURIN-HENDRIX, Chairman
COR MCGERR Vice-Chairman

ATTACHMENT. /
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
Senate: FICO DP 4-2-1 | 3rd Read 16-9-5-0

SB 1291: residential contractor assessments; recovery fund
Sponsor: Senator Hoffman, LD 15
Committee on Regulatory Affairs

Overview

Lowers the maximum amount that the Registrar of Contractors (ROC) can charge for an
initial or renewal biennial assessment by 50% when the amount in the Residential
Contractors' Recovery Fund (Recovery Fund) exceeds $15,000,000.

History
The ROC licenses and regulates residential and commercial contractors, investigates

complaints against contractors, is authorized to suspend or revoke licenses, conduct hearings,
issue citations and assess civil penalties. The ROC is permitted to charge application and
license fees for the issuance and renewal of specified biennial contracting licenses. Statute
requires an applicant for an initial or renewal contractor license to pay an assessment that
cannot exceed $600 (Title 832, Chapter 10, A.R.S.).

The Recovery Fund is administered by the ROC for the benefit of claimants damaged by an
act, representation, transaction or conduct of a licensed registered contractor that is in
violation of statutory rules or regulations relating to contractors. The following claimants are
eligible for awards from the Recovery Fund for damages to a residential real property
damaged by the failure of a residential contractor to adequately build or improve a residential
structure or appurtenance: 1) individuals that own and occupy or intend to occupy the
residential real property; 2) a limited liability company that owns the residential real
property and the property is occupied by one of the company's members; 3) a revocable living
trust that owns the residential real property and whose trustors occupy or intend to occupy
the property; 4) a planned community or condominium owners' association; and 5) a lessee
that occupies or intends to occupy the residential real property and contracts directly with a
residential contractor or indirectly with a subcontractor of the residential contractor. An
award from the recovery fund cannot exceed the actual damages suffered by the claimant.
The maximum amount an individual claimant can be awarded from the Recovery Fund is
$30,000 (A.R.S. §§ 32-1182, 32-1132.01).

Provisions
1. Changes the current $600 biennial assessment amount that is paid into the Recovery
Fund for residential contracting as follows:

a) an assessment of $370 for an initial license; and

b) an assessment of $270 for a license renewal. (Sec. 1)

™ Prop 105 (45 votes) DO Prop 108 (40 votes) © Emergency (40 votes) O Fiscal Note

SB 1291
Initials DC/RP Page 1 Regulatory Affairs

Attachment 19
2. States that if the Recovery Fund exceeds $15,000,000 at the end of the fiscal year (FY),
then the assessments reduce by 50% until the total in a subsequent FY is less than
$10,000,000 at which time the 100% assessment is reinstated. (Sec. 1)

3. Makes technical and conforming changes. (Sec. 1)

SB 1291
Initials DC/RP Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Regulatory Affairs BILLNO. $B 1291
DATE March 13, 2024 MOTION: iY
PASS AYE NAY PRESENT | ABSENT
Crews “a
Hernandez A \~
Liguori i
Payne ~
Pefia Ae
McGarr, Vice-Chairman ~~
Hendrix, Chairman V4
Y eZ ? /

APPROVED: COMMIT,

SECRETARY

,

Yip EP ZOD
A ZEKE ENDRIX, Chairman
CORY SHE NDE Vice-Chairman

ATTACHMENT c< O __

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: GOV DPA 5-2-1-0 [| 3 Read 16-12-2-0

SB 1343: agency review; rules; automatic expiration
Sponsor: Senator Petersen, LD 14
Committee on Regulatory Affairs

Overview
Outlines requirements relating to agency review of rules.

History
Under the Administrative Procedures Act (APA), the established Governor's Regulatory

Review Council (GRRC) retains the authority to approve or disapprove any agency's proposed
rule, the preamble to the rule and the economic, small business and consumer impact
statement for the rule (A.R.S. § 41-1052).

The APA is a group of statutes that governs how state agencies do rule making. Statute
defines Rule as an agency's assertion that implements, interprets and prescribes policy and
its procedures, excluding non-delegation agreements (Title 41, Chapter 6, A.R.S.).

Current law states that if an agency fails to submit a report, file an extension before the due
date of the report or files an extension and does not submit its report within the extension
period, the rule scheduled for review will expire and directs GRRC to:
1) cause a notice to be published in the next register that states that the rule has expired
and is no longer enforceable;
2) notify the Secretary of State that the rule has expired and needs to be removed from

the code; and
3) notify the agency the rule has expired and is no longer enforceable (A.R.S. § 41-1056).

Provisions

1. Prescribes that any analysis performed as part of a review of an agency rule that
examines the economic impact, compliance, implementation or other costs of the rule, to
the greatest extent possible must use actual impacts and costs from the past five years
the rule has been in effect, as the basis for any calculation rather than only using
estimated impacts and costs. (Sec. 3)

2. Stipulates that any rule regarding occupational licenses adopted by an agency must
automatically expire at the conclusion of the five-year review, unless the agency performs

a review pursuant to statute and does the following:

a) readopts the code chapter;

b) publishes an evaluation of the burdens on similar occupational licenses in all states
that border Arizona and justifies any instance where Arizona imposes a greater
burden on a licensee than any neighboring states; and

c) publishes a report available on the agency's website that includes analyses and

responses to public comments. (Sec. 3)

SB 1343
Initials DC/Sd ; Page 1 Regulatory Affairs

Attachment 08! /
3. Exempts rules that are required to comply with federal law or receive federal monies from
automatic expiration. (Sec. 3)

4, Applies current statue relating to the expiration of a rule to an occupational licensing
agency that has not timely adopted its rules. (Sec. 3)

or

Makes technical and conforming changes. (Sec. 1-3)

1] Prop 105 (45 votes) C1 Prop 108 (40 votes) [1 Emergency (40 votes) ( Fiscal Note

SB 1343
Initials DC/SJ Page 2 Regulatory Affairs
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Regulatory Affairs BILL NO. SB 1343
DATE March 13, 2024 MOTION: {72
PASS AYE NAY PRESENT | ABSENT
Crews “a
Hernandez A val
Liguori ~~
Payne ~
Pefia Va
McGarr, Vice-Chairman WA
Hendrix, Chairman i
4 ot oO /
7

APPROVED:

Oy 7 LE. _
a mn ante Chairman

CORY MCGARR, Vice-Chairman

SECRETARY

ATTACHMENT. ot-02 .

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: GOV DPA 4-3-1-0 | 3" Read DPA 16-13-1-0

SB 1634: nonhealth regulatory boards; challenges; prohibition
Sponsor: Senator Hoffman, LD 15
Committee on Regulatory Affairs

Overview
Amends statute pertaining to final administrative decisions to include a Nonhealth

Profession Regulatory Board (Board).

History
Statute requires an agency to serve notice of an appealable agency action or contested case,

A party may obtain a hearing on an appealable agency action or contested case by filing a
notice of appeal or request for a hearing with the agency within 30 days after receiving the
notice. The agency must notify the Office of Administrative Hearings (Office) of the appeal or
request for a hearing and the Office then schedules a hearing (A.R.S. § 41-1092.03).

The process for judicial review of an agency action allows the court to affirm, reverse, modify
or vacate the agency action after reviewing the administrative record and evidence presented
at the hearing. The court must affirm the agency action unless it is found that the agency's
action is contrary to law, not supported by substantial evidence, arbitrary or an abuse of
discretion. In a proceeding brought by or against the regulated party, the court shall decide
the following, without deference to any previous determination that may have been made by
the agency:

1) all questions of law, including the interpretation of a constitutional or statutory

provision or a rule adopted by an agency; and
2) all questions of fact (A.R.S. § 12-910).

Costs may be awarded to the appellee agency if a judgment adverse to the appellant is
rendered. Such costs may be awarded in an amount deemed reasonable by the superior court,
based on the expense the appellee agency has incurred in preparing the record of the
proceedings before judicial review. The final judgment of the superior court entered in an
action to review a decision of an administrative agency may be appealed to the Arizona
Supreme Court (A.R.S. § 12-912, 12-913).

Provisions
1. Specifies that the Board's decision is the final administrative decision unless the

regulated person accepts the ALJ's decision instead. (Sec. 1)

2. Prohibits the Board from appealing the final administrative decision to the superior court.
(Sec. 1)

3. Instructs Legislative Council to prepare conforming legislation for the next legislative
session. (Sec 2)

{ Prop 105 (45 votes) [2 Prop 108 (40 votes) Emergency (40 votes) O Fiscal Note

SB 1634
Initials IG Page | Regulatory Affairs

Attachment old
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Regulatory Affairs BILLNO, SB 1634

DATE March 13, 2024 MOTION: YafA—

PASS AYE NAY PRESENT | ABSENT

Crews

Hernandez A

Liguori

Payne

Pena

McGarr, Vice-Chairman

Hendrix, Chairman

, fn Jf

APPROVED: COMMIT, SECRETARY

CORY MCGARR, Vice-Chairman

ATTACHMENT os gy

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