Arizona House of Representatives Committee on Commerce — Report of Regular Meeting, March 12, 2024 (Fifty-sixth Legislature, Second Regular Session)

Summary

The report of a regular meeting of the Arizona House of Representatives Committee on Commerce, Fifty-sixth Legislature, Second Regular Session, held Tuesday, March 12, 2024, with Representative Wilmeth as Chairman and Representative Carbone as Vice-Chairman. The minutes record a presentation from Code.Org on the state of computer science and committee action on SB1034 (do pass amended), and on SB1070, SB1218, SB1432 and SB1366 (do pass). Attachments include the meeting agenda, a Request to Speak report listing public positions and comments on the bills, including SB1366 on a blockchain regulatory sandbox, and a committee attendance record. The document closes with a bill summary for SB 1432, which cites the statutes as the Uniform Unlawful Restrictions in Land Records Act, and the roll call vote on a do-pass motion for SB 1432.

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 COMMERCE

Report of Regular Meeting
Tuesday, March 12, 2024
House Hearing Room 3 -- 2:00 P.M. OR UPON RECESS OR ADJOURNMENT OF FLOOR

Convened 3:07 A.M.
Recessed
Reconyened
Adjourned 3:59 A.M.

Members Present

Representative Aguilar
Representative Austin
Representative Carter
Representative Gress
Representative Heap
Representative Hendrix
Representative Lucking
Representative Ortiz
Representative Carbone, Vice-Chairman
Representative Wilmeth, Chairman

Agenda
Original Agenda — Attachment 1

Request to Speak
Report — Attachment 2
Committee Attendance
Report — Attachment 3

Presentations

Name Organization

Hannah Weissman Code.Org
Committee Action

Bill Action

SB1034 DPA

SB1070 DP

SB1i218 DP

SB1432 DP

SB1366 DP

MINUTES RECEIVED
CHIEF CLERK'S OFFICE
Members Absent

Attachments (Handouts)
4

Vote Attachments

9-0-0-1 5, 6,7

9-0-0-1 8,9

9-0-0-1 10, 11
10-0-0-0 = 12, 13
6-4-0-0 14, 15

ALLL Huphow

Susan Mighes, Committee Sefretary
March 13, 2024

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

COMMITTEE ON COMMERCE
March 12, 2024
ARIZONA HOUSE OF REPRESENTATIVES é rey WAY EW EL; 3 O 7p

Fifty-sixth Legislature - Second Regular Session

REGULAR MEETING AGENDA . °
AD TOURNED £ 35%
COMMITTEE ON COMMERCE

DATE Tuesday, March 12, 2024 ROOM HHR3 TIME 2:00 P.M. or upon recess or
adjournment of Floor

Members of the public may access a livestream of the meeting here:
https://www.azleg.gov/videoplayer/?clientID=6361162879&eventID=202403 1038

Members:
Representative Aguilar Representative Heap Representative Ortiz
Representative Austin Representative Hendrix Representative Carbone, Vice-Chairman
Representative Carter Representative Lucking Representative Wilmeth, Chairman

Representative Gress

e¢ Presentation:
o The State of Computer Science - Hanna Weissman, code.org

Bills Short Title Strike Everything Title

revenue department; technical correction(now:

} **SB1034
i ) P A money transmission; notice)

0 (Shope)

wOJe &

2 *SBI070 D p virtual credit cards; payment method
(Shope)

9: 0:0: |

3 **SB1218 D D exclusive agreements; residential property sales
tt (Kavanagh)

9.0'0+/
regulatory sandbox; blockchain

5 *SB1366 b
DP (Bolick: Fernandez, Wilmeth)

6. rm Ou QCOM held 0-0-0-0-0, RULES

Y SB1432 D p unlawful restrictive covenants; uniform act..
—————_ (Mesnard: Epstein)
lo:0 10:00OM, RULES

* On previous agenda
* If first read and assigned

ORDER OF BILLS TO BE SET BY THE CHAIRMAN

VC
03/06/2024
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 1 of 1

Attachment |

Information Registered on the Request to Speak System

House Commerce (3/12/2024)

$B1034, revenue department: technical correction (NOW: money
transmission; notice)

Support:
Ryan O'Daniel, MATCH GROUP

Oppose:

Bonnie Oakes, representing self

$B1070, virtual credit cards; payment method

Support:

Jenni Harris, representing self

All Comments:
Jenni Harris, Self: This bill facilitates additional payment options.

SB1218, exclusive agreements: residential property sales

$B1366, regulatory sandbox; blockchain
Support:

Allen Skillicorn - Personal Position , representing self

Oppose:

Sandy Bahr, Sierra Club - Grand Canyon Chapter; Dave Long, representing self; Steve Ramos, representing self;
Denise Link, PhD, WHNP, representing self; Steven Linder, representing self; judith Robbins, representing self;
Peggie Jo Vincent, representing self; marilyn duerbeck, 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, representing self; Cynthia Couture, representing self; Carol Maas, representing self; Sherrilynn
James, representing self; Karen Cusano, representing self; Donita Ramos, representing self; Catherine Sigmon,
representing self; Kathryn Kaczmarek, representing self; Katherine Doman Sheydayi, representing self; Elizabeth
Schauer, representing self; Charlie Silver, 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; Robin LaVoie, representing self; Julie Golding, representing self; Christine

Attachment ae
Keitges, representing self; Beverlee Loat, representing self; Lawrence Peters, representing self; Linda Edwards,
representing self; Kathy Fraser, representing self; Angela J. Miller, representing self; Janet Senf, representing seif;
Kathy Pyner, 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; Michael Pyska, representing self; Vivian
Harte, representing self; Norman Fuchs, representing self; Steve Gorman-Hackstadt, representing self; Dorothy
Reed-inman, representing self; Rebecca Haynes, representing self; Mary Nelson, representing self; Caroline
Anderson, representing self; John Neville, representing self; Saher Afzal, representing self; Gary Rulapaugh,
representing self; Kathryn Anderson, 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; Alice Patricia Price, 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; Loretta O'Connor,
representing self; Marie Williams, representing self; Cynthia Wagner, representing self; Nadine Smith, representing
self; Nancy Hancock, representing self; Kathleen Schanus-Gohl, representing self; Claire Bickel, representing self;
Carol Waymire, representing self; Nelson Morgan, representing self; Robert Larson, representing self; Shelley
Stephenson, representing self; Joseph Alexander, representing self; J Nicholas Prestera, representing self; Gary
Townsend, representing self; Jill Anderson, representing self; Shirley Isaacson, representing self; Karolyn Switzer,
representing self; Margaret Tinsley, representing self; Jan Perozeni Corbus, representing self; Jacqueline deSa,
representing self; William Bowlus-Root, representing self; Rebel Rice, representing self; Lisa Koenig, representing
self; Kathleen Woessner, representing self; Nancee K Wood, representing self; Nancy Atherton, representing self;
Eric Kadel, representing self; Jeanne Hardie, representing self; Libby Stortz, representing self; Lisa Maczura,
representing self; Kathleen Sauer, representing self; Connie Cockrell, representing self; Sharon Arnst, representing
self; Claudia Miller, representing self; Pamela Chittenden, representing self; Katharine Donahue, representing self;
Joseph 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; Denise Hudson, representing self; Kathleen Butler, representing self; STACEY NORDWALL,
representing self; marcia stewart, representing self; Lori Taniguchi, representing self; Beth Ballmann, representing
self; Rivko Knox, representing self; Pat Jayson, representing self; Frederick James, representing self; Patricia
Brunner, representing self; Elissa Karn, representing self; RITA DEPUYDT, representing self; Barbara Rodman,
representing self; Rebecca Shook, representing self; Christopher Cerrato, representing self; Alison Danis,
representing self; Valarie Bryant, representing self; Nadya Laliberte, representing self; Kathryn Dorn, representing
self; Michael Levine, representing self; John Stolte, representing self; Katherine Hilton, representing self; Srinivas
Manne, representing self

All Comments:

Judith Robbins, Self: No to block-chain access to AZ's financial systems. This is a proven deregulated playground for
financial entities ripe w/open access to malfeasances, which would ultimately threaten AZ financial institutions &
individual's money. Vote NO; Beatriz Urrea, Self: This bill would give even more power to the super rich.; Alisa
McMahon, Self: Special interest legislation that would be contrary to the public interest.; Michael Fiflis, Self: This
bill is special interest legislation, lowering the regulation of blockchain technology, including licensure, for no
reason.; Kathryn Kaczmarek, Self: Is the cryptocurrency industry promoting this bill? How much money has
exchanged hands between the industry and this sponsor? How does this bill help or aid the average citizen in AZ?
Not needed.; Barbara Oliver, Self: This bill is for the mega-rich, and besides that, cryptocurrency is a scam];
Lawrence Peters, Self: Blockchain software is publicly available & not fully secured. Bad actors might exploit
software flaw before it is noticed & fixed. in 2017, hackers found coding flaw in Ethereum’s blockchain platform,
using it to siphon away millions of dollars; Linda Edwards, Self: Too volatile and dangerous.; Penny Boone, Self: NO.
This would essentially deregulate a volatile playground for the mega-rich. And most cryptocurrency is a scam.;
Rebecca Haynes, Self: This would essentially deregulate a volatile playground for the mega-rich. Another disaster
in the making.; John Neville, Self: No benefit to Arizona - pretty likely a corrupt bill.; William Yohey, Self: Ok Bolick -
who do you want to help bring this insane bill to help out "get rich scheme" of this violative cyto currency
schemes.; Jennifer Dawson, Self: Read "Traders in the Dark". Deregulating crypto makes it a dangerous playground
for the mega-rich. Remember the crash of FTX??; Sandra Rizzo, Self: We should not be deregulating this area. {t
involves money, livelihoods, and enormous risk, and should stay regulated.; Patricia Edelen, Self: This bill would
open up Pandora's Box for abuse by the rich and removes regulatory measures to prevent financial abuse.; Cynthia
Wagner, Self: This would essentially deregulate a volatile playground for the mega-rich; Nelson Morgan, Self:
Blockchain is a particular technology that potentially has other uses besides crypto, although that absurd
application has been the main one. It seems odd to single out this particular very technical approach (which
doesn't permit editing of entries); Gary Townsend, Self: This would essentially deregulate a volatile playground for
the mega-rich.; Karolyn Switzer, Self: We don't need to be deregulating such a volatile set of products. The fact
that they're typically used by the rich makes me suspicious that somebody wants to do something currently illegal;
Margaret Tinsley, Self: This is not an area in which Arizona wants to be the test dummy. Please vote no.; Rebel
Rice, Self: Blockchain does not belong in a state goverment "anything". It is the basis for cryptocurrency and NFTs
and other highly volatile instruments.; Nancy Atherton, Self: Another example of Republicans desire to make the
rich richer while NEVER offering anything that might help the working poor and the housing crisis.; Lisa Maczura,
Self: Nope. Tired of helping billionaires get richer.; Connie Cockrell, Self: This would essentially dereguiate a
volatile playground for the mega-rich.; Katharine Donahue, Self: Don't fiddle with what you don't understand.;
Joseph Bihms LD29, Self: Oppose. The bill risks financial instability by deregulating crypto within Arizona's sandbox,
favoring wealthy investors over consumer protection.; Marcia Tingley, Self: Essentially deregulates a volatile
playground for very rich. Cryptocurrency is highly speculative and environmentally destructive.; Lois Hansen, Self:
this would essentially deregulate a volatile financial playground for the mega-rich; marcia stewart, Self: Financial
specialists say too risky for shared retirement programs. Practice in your own accounts.; Rivko Knox, Self: Please
focus on issues that affect most of us vs. a teeny number of ultra wealthy. Dangerous as it deregulates new
financial products without any safeguards.; Michael Levine, Self: Bill offers limited access to Arizona's market to
test innovative financial products or services or other innovations without obtaining a license or other
authorization. This would essentially deregulate a volatile playground for the mega-rich.

$B1432, unlawful restrictive covenants; uniform act.

Support:

Dianne Post, AZ NATIONAL ORGANIZATION FOR WOMEN (NOW), Self, STATE CONFERENCE NAACP; Beverly
Janowitz-Price, representing self; Kenneth Bierman, representing self; Becky Sayler, representing self; Sharon Lee,
representing self; Martha O'Connor, representing self; jeff green, representing self; Jodi Liggett, NATIONAL
COUNCIL OF JEWISH WOMEN ARIZONA; Sheila Green, representing self; Rivko Knox, representing self; Barbara
McGill, representing self
Neutral:
Dennis J Legere, ARIZONA HOMEOWNERS COALITION

All Comments:

Dianne Post, AZ NATIONAL ORGANIZATION FOR WOMEN (NOW), Self, STATE CONFERENCE NAACP: We have a
comprehensive stakeholder group that has worked for months to get a bill we can all approve. We ask you to do
the same.,; Jodi Liggett, NATIONAL COUNCIL OF JEWISH WOMEN ARIZONA: NCJW wholeheartedly supports this
effort to remove discriminatory covenants, while keeping the historical record intact.; Rivko Knox, Self: It's about
time!!! | also support the idea of ensuring that the historical record remains so we can track prior 'wrongs' & their
longer term negative consequences!!; Dennis J Legere, ARIZONA HOMEOWNERS COALITION: All my initial concerns
have been addressed by the Senate engrossed version.
ARIZONA STATE LEGISLATURE

Fifty-sixth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON COMMERCE
CHAIRMAN: Justin Wilmeth VICE-CHAIRMAN: _ Michael Carbone
DATE 03/12/24 124 124 124 124
CONVENED Bioqpm m m m m
RECESSED
RECONVENED
ADJOURNED B'S WH
MEMBERS .
Aguilar v4
Austin v
Carter v
Gress vA
Heap v
Hendrix vA
Lucking Va
Ortiz 4
Carbone, Vice-Chairman v
Wilmeth, Chairman ~

V Present --- Absent exc Excused

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ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

Second Regular Session
Senate: FICO DPA/SE 7-0-0-0 | 374 Read 26-0-4-0

SB 1084: money transmission; notice
Sponsor: Senator Shope, LD 16
Committee on Commerce

Overview
Directs money transmitters to display specified fraud warnings to consumers.

History
The Department of Insurance and Financial Institutions (DIF I) regulates money transmitter

services. Individuals who engage in the business of money transmission or advertise, solicit
or hold itself out as providing money transmission must obtain a money transmitter license

(A.R.S. § 6-1207).

Money transmission means any of the following: 1) selling or issuing payment instruments
to a person located in this state; 2) selling or issuing stored value to a person located in this
state; and 3) receiving money for transmission from a person located in this state. Money
transmission does not include providing solely online telecommunications services or
network access (A.R.S. § 6-1201).

Provisions
1. Instructs a person that is in the business of money transmission to display consumer
fraud warnings that includes specified information as outlined. (Sec. 1)

2. Requires, prior to the transmission of monies, the consumer fraud warnings to be:
a) communicated directly to the consumer in person;
b) displayed prominently in the place of business; or
c) through electronic transmission. (Sec. 1)

3. Requires the written warnings to be in a type that contrasts with the background against
which the written warning appears. (Sec. 1)

4. Specifies the fraud warning requirements do not apply to an electronic funds transfer:
a) where the monies are not transferred directly to another person and are not available
for immediate use; or
b) that is made with a gift certificate. (ec. 1)

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

SB 1034
Initials PB Page 1 Commerce

Attachment_S_
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Ld

Fifty-sixth Legislature Commerce
Second Regular Session S.B. 1034

PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO S.B. 1034

(Reference to Senate engrossed bill)

Page 1, line 7, strike “PERSON" insert "LICENSEE"; strike "IS" insert "ENGAGES";

after “TRANSMISSION” insert "ON BEHALF OF CONSUMERS FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES"

Line 8, strike “CLEARLY AND PROMINENTLY DISPLAY" insert "PROVIDE"; after
"WARNINGS" insert "IN ACCORDANCE WITH SUBSECTION B OF THIS SECTION"

Line 18, strike "PERSON" insert "LICENSEE"; strike "COMMUNICATE" insert
"PROVIDE"

Line 21, after the comma insert "IN A DOCUMENT OR OTHER MATERIALS PROVIDED"

Line 22, strike "PLACE OF BUSINESS" insert "LOCATION IN WHICH THE LICENSEE OR
AN AUTHORIZED DELEGATE OF THE LICENSEE ENGAGES IN RECEIVING MONEY FOR
TRANSMISSION"

12 Amend title to conform

JUSTIN WILMETH

1034WILMETH. docx
03/11/2024

08:23 AM

: PB/1s

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

ROLL CALL VOTE

COMMITTEE ON Commerce

BILL NO.

SB 1034

DATE March 12, 2024 MOTION: ) PA
PASS AYE NAY PRESENT | ABSENT
Aguilar VA
Austin va
Carter gf
Gress J
Heap V
Hendrix VA
Lucking /
Ortiz /
Carbone, Vice-Chairman vA
Wilmeth, Chairman y
71° | oa |

duno Hien

~Yf—

JUSTIN WILMETH, Chairman
M EL CARBONE, Vice-Chairman

COMMITTEE SECRETE

ATTACHMENT. / y

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
Senate: FICO DPA 6-1-0-0 {| 3"¢ Read 27-0-3-0

SB 1070: virtual credit cards; payment method
Sponsor: Senator Shope, LD 16
Committee on Commerce

Overview
Mandates health insurers to accept tangible checks as payment and includes a stipulation
relating to opting out of a payment method.

History
Pursuant to A.R.S. § 20-241, any contract between a health insurer and a health care provider

that is issued, amended or renewed beginning January 1, 2020, to provide services to
enrollees cannot restrict the acceptable method of payments to only credit cards. If the health
insurer changes the payment method to using electronic funds transfers, the insurer must:
1) notify the provider of any associated fees; 2) advise the provider of the available payment
methods and how to select an alternative payment method; and 3) remit or associate with
each payment the explanation of benefits.

Provisions
1. Requires health insurers to accept tangible checks as a form of acceptable payment. (Sec.
1)

2. Stipulates a health care provider's decision to opt out of a method of payment remains in
effect until the provider opts back into the prior method of payment or a new contract is
executed, (Sec. 1)

3. Makes technical changes. (Sec. 1)

O Prop 105 (45 votes) 4 Prop 108 (40 votes) [© Emergency (40 votes) O Fiscal Note

SB 1076
Initials PB Page 1 Commerce

Attachment 4

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

ROLL CALL VOTE

COMMITTEE ON

Commerce

BILL NO.

DATE March 12, 2024

SB 1070

MOTION: .DP

PASS

NAY PRESENT

ABSENT

Aguilar

Austin

Carter

Gress

Heap

Hendrix

Lucking

Ortiz

Carbone, Vice-Chairman

Wilmeth, Chairman

Ko] | QS|S |S NINN 2

APPROVED:

JUS ILMETH, Chairman
MIC CARBONE, Vice-Chairman

7

ATTACHMENT.

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: FICO DPA 7-0-0-0 | 3" Read 21-6-3-0

SB 1218: exclusive agreements; residential property sales
Sponsor: Senator Kavanagh, LD 3
Committee on Commerce

Overview
Outlines unlawful practices for an exclusive property engagement agreement (Agreement).

History
The Arizona Department of Real Estate (ADRE) regulates the real estate industry and real

estate professionals. Individuals who engage in real estate transactions including selling,
purchasing, listing or offering to list real estate, businesses or business opportunities must
be licensed as a real estate broker (A.R.S. §§ 82-2101, 32-2122).

Provisions

1.

Delineates unlawful practices for an exclusive property engagement agreement which is a
contract or agreement that provides an exclusive right to a person to list or sell residential
real estate. (Sec. 1)

2. Stipulates an Agreement is void if the listing services do not begin within one year after

the execution of the Agreement by the parties. (Sec. 1)

8. Prohibits a court from:

a) enforcing an Agreement made or recorded in violation of Agreement provisions; and

b) imposing a constructive trust in the residential real estate that is the subject of the
agreement or on the disposition proceeds of a related residential real estate
transaction. (Sec. 1)

4, Requires any consideration that was paid to a homeowner relating to a contract or

agreement that violates Agreement provisions to be forfeited. (Sec. 1)

5. Deems a contract or agreement made or recorded in violation of Agreement provisions as

void and unenforceable. (Sec. 1)

6. Deems a contract or agreement that violates Agreement provisions and is recorded before

the effective date of certain enforcement provisions as void. (Sec. 1)

7. Instructs ADRE to:

a) execute and record in each county recorder's office a document that disclaims the
validity and enforceability of any contract or agreement or any related liens or
assignments that violate Agreement provisions; and

b) display such document on the department's website. (Sec. 1)

8. Specifies an act or practice in violation of Agreement provisions is:
a) an unlawful practice in accordance with consumer fraud statutes; and
(1 Prop 105 (45 votes) {1 Prop 108 (40 votes) ( Emergency (40 votes) O Fiscal Note
SB 1218
Initials PB Page 1 Commerce

Attachment_ 1
b) subject to enforcement through private action and by the Attorney General. (Sec. 1)

9. Subjects a person who violates Agreement provisions to liability and penalties in
accordance with statute relating to recording false documents. (Sec. 1)

10. Specifies that the prescribed remedies are not the exclusive remedies for a violation. (Sec.
1)

11. Defines residential real estate. (Sec. 1)
12. Contains legislative findings. (Sec. 2)

13. Contains a severability clause. (Sec. 3)

SB 1218
Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILLNO. $B 1218

DATE March 12, 2024 MOTION: | ) P

PASS AYE NAY PRESENT | ABSENT
Aguilar v4
Austin of
Carter J
Gress VY
Heap a
Hendrix if
Lucking V
Ortiz Vv,
Carbone, Vice-Chairman v4
Wilmeth, Chairman VA
i O O |
D At Ltn I shox J
APPROVED; 4 COMMITTEE SECRETARY

JUSTIN WILMETH, Chairman

MI EL CARBONE, Vice-Chairman

ATTACHMENT. Lf
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
Senate: FICO DP 5-1-1-0 | 3! Read 16-10-4-0

SB 1366: regulatory sandbox; blockchain
Sponsor: Senator Bolick, LD 2
Committee on Commerce

Overview
Modifies the definition of innovation relating to the Regulatory Sandbox Program (Program).

History
The Attorney General (AG) administers and oversees the Program, which enables persons to

obtain limited access to Arizona's market to test innovative financial products or services or
other innovations without obtaining a license or other authorization. An innovation is the
use or incorporation of new or emerging technology or the reimagination of uses for existing
technology to address a problem, provide a benefit or otherwise offer a product, service,
business model or delivery mechanism that is not known by the AG to have a comparable
widespread offering in Arizona (A.R.S. §§ 41-5601 and 41-5602).

An applicant for the Program must demonstrate to the AG adequate understanding of the
innovation and a sufficient plan to test, monitor and assess the innovation while ensuring
consumers are protected from a test's failure. Upon application approval, an applicant is
deemed a Program participant and given 24 months to test the innovation. The participant
must retain records, documents and data produced in the ordinary course of business, If an
innovation fails before the end of the testing period, the participant must notify the AG and
report on actions taken to ensure consumers have not been harmed because of the
innovation's failure. Before the 24-month testing period ends, the participant must notify the
AG that the participant will exit the Program and cease offering any innovative products or
services within 60 days after the 24-month testing period ends or seek an extension in order
to pursue a license or other authorization required by law (A.R.S. §§ 41-5603; 41-5605; 41-
5607 and 41-5609).

Blockchain technology is a type of distributed ledger technology that uses a distributed,
decentralized, shared and replicated ledger, which may be public or private, permissioned or
permissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger
is protected with cryptography, is immutable and auditable and provides an uncensored truth

(A.R.S. § 44-7061).

Provisions

1. Modifies the definition of innovation as the use or incorporation of a new or existing idea
or a new or emerging technology or a new use of existing technology, including blockchain
technology, to address a problem, provide a benefit or offer a product, production method
or service. (Sec 1)

2. Defines blockchain technology. (Sec 1)
8. Makes technical changes. (Sec 1)

OD Prop 105 (45 votes) O Prop 108 (40 votes) [ Emergency (40 votes) OU Fiscal Note

SB 1366
Initials Page 1 Commerce

Attachment{ A—
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILLNO. SB 1366

DATE March 12, 2024 motion: .OP

PASS AYE NAY PRESENT | ABSENT

Aguilar

VN

Austin

Carter

Gress

Heap

| |

Hendrix

Lucking w4
Ortiz Vv

Carbone, Vice-Chairman

Wilmeth, Chairman

oy 4

+f O ©

APPROVEO: 7 / /POMMITTEE SECRETARY
YZ a
Ys Ps

STIN WILMETH, Chairman
HAEL CARBONE, Vice-Chairman

ATTACHMENT. I, 3
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
Senate: FICO DPA 6-0-1-0 | 3t4 Read 27-0-3-0

SB 1432: unlawful restrictive covenants; uniform act..
Sponsor: Senator Mesnard, LD 13
Committee on Commerce

Overview
Establishes the Uniform Unlawful Restrictions in Land Records Act which provides
requirements for removing an unlawful restriction from property or a governing instrument.

History
The Uniform Law Commission (ULC) approved a uniform state law to allow a property owner

whose deed contains an unlawful and unenforceable restriction to record an amendment to
the land records that effectively removes the restriction. An unlawful and unenforceable
restriction is a restriction inserted into a deed that was intended to prevent the affected
property from being sold to or occupied by persons covered by that restriction. Throughout
the first half of the 20th century, owners and developers of real property commonly inserted
restrictive covenants into deeds and declarations (ULC).

A homeowner association's (HOA) declaration may be amended by the HOA, if any, or, if
there is no HOA or board, the owners of the property subject to the declaration, by an
affirmative vote or written consent of the number of owners or eligible voters specified in the
declaration. An amendment to a declaration may apply to fewer than all of the lots or less
than all of the property bound by the declaration and an amendment is deemed to conform
to the general design and plan of the community, if outlined conditions are met. Within 30
days after adopting an amendment, the amendment must be recorded, Regardless of any
declaration provision that provides for periodic renewal of the declaration, an amendment to
the declaration is effective immediately on recordation of the instrument in the county in
which the property is located (A.R.S. § 33-1817).

A condominium association's (COA) declaration may be amended only by a vote of the unit
owners to which at least 67% of the votes in the COA are allocated, or any larger majority
the declaration specifies. The declaration may specify a smaller percentage only if all of the
units are restricted exclusively to nonresidential use. Within 30 days after the adoption of
any amendment, the amendment must be recorded. An amendment to the declaration must
be recorded in each county in which any portion of the condominium is located and is effective
only on recordation (A.R.S. § 33-1227).

Provisions
1. Allows a real property owner, whose property is subject to an unlawful restriction, to
submit to the county recorder an amendment to remove the unlawful restriction. (Sec. 1)

2. Limits the applicability of the amendment to remove the unlawful restriction to only the
owner's property. (Sec. 1)

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

SB 1432
Initials PB Page 1 Commerce

Attachment | 4
10.

11.

12.

13.
14,
15.

16.

17.

18.
19.

Allows the governing body of an association, including the board of directors of a
condominium or a planned community, to amend the association's governing instrument
to remove an unlawful restriction without a vote of the association's membership. (Sec. 1)

Permits an association's member to request in a record that sufficiently identifies an
unlawful restriction in the governing instrument that the governing body exercise its
authority to amend the instrument to remove an unlawful restriction. (Sec. 1)

Requires the governing body, within 90 days after receiving the request, to determine
whether the governing instrument includes the unlawful restriction. (Sec. 1)

Stipulates the governing body must amend the governing instrument to remove the
unlawful restriction within 90 days after determining the inclusion of the unlawful
restriction. (Sec. 1)

Asserts the governing body may execute an amendment to remove an unlawful
restriction, and the amendment's effectiveness, regardless of any governing instrument
provision or other law. (Sec. 1)

Provides requirements for an amendment to remove an unlawful restriction, including
identifying only the document containing the unlawful restriction. (Sec. 1)

Requires the amendment to:

a) include a conspicuous statement as outlined;

b) be executed and acknowledged in the manner required for recordation of a document
in the land records; and

c) be recorded in the land records of each county in which the document containing the
unlawful restriction is recorded. (Sec. 1)

Specifies the amendment does not affect the validity or enforceability of any restriction
that is not an unlawful restriction. (Sec. 1)

Asserts the amendment or a future conveyance of the affected real property is not a
republication of a restriction that otherwise would expire by passage of time under any
other law. (Sec. 1)

Prescribes an optional form that may be submitted by a property owner to the county
recorder to remove an unlawful restriction. (Sec. 1)

Prescribes responsibilities for a county recorder in recording an amendment. (Sec. 1)
Exempts a recorder and the county from liability for recording an amendment. (Sec. 1)

Instructs a court, in applying and construing the unlawful restriction statutes, to consider
the promotion of uniformity of the law among jurisdictions that enact it. (Sec. 1)

Asserts the unlawful restriction statutes modify, limit or supersede the Electronic
Signatures in Global and National Commerce Act, but does not modify, limit or supersede
federal law relating to consumer disclosures or authorize electronic delivery of specified
federal notices. (Sec. 1)

Cites the statutes governing unlawful restrictions, as established by this Act, as the
Uniform Unlawful Restrictions in Land Records Act. (Sec. 1)

Defines pertinent terms. (Sec. 1)

Contains a severability clause. (Sec. 2)

SB 14382

Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILL NO. SB 1432

DATE March 12, 2024 moTION: DP

PASS AYE NAY PRESENT | ABSENT

Aguilar

Austin

Carter

Gress

Heap

Hendrix

Lucking

Ortiz

Carbone, Vice-Chairman

Wilmeth, Chairman

—|NINISISI SIS NIN ICI

oe)

© O O

Ayr Hwohou

APPROVED: ; COMMITTEE SECRETARY

JUSTIN WILMETH, Chairman
ICHAEL CARBONE, Vice-Chairman

ATTACHMENT. _&

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