Arizona House Committee on Commerce Special Meeting Minutes and Testimony

Summary

Minutes and attachments from a special meeting of the Arizona House of Representatives Committee on Commerce, Fifty-fourth Legislature, Second Regular Session, held by teleconference on Tuesday, May 19, 2020, with Mr. Weninger as Chairman. The report of the meeting records a do-pass action on each of the Senate bills considered, including SB1133 on public works contracts, SB1195 on liquor delivery and original packaging, SB1335 on tourism marketing authorities, SB1373 on automated prescription-dispensing kiosks and SB1397 on preexisting condition exclusions in insurance. Attachments include the agenda, the Request to Speak report listing supporters and opponents of each bill, the attendance record, a bill summary and roll call vote for SB 1195, and written testimony submitted to the committee. The final attachment is written testimony opposing SB 1397.

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-fourth Legislature - Second Regular Session

COMMITTEE ON COMMERCE

Report of Special Meeting
Tuesday, May 19, 2020

2:00 P.M. OR UPON ADJOURNMENT OF ELECTIONS

Convened 4:05 P.M.
Recessed
Reconyened
Adjourned 5:53 P.M,

Members Present

Mr. Biasiucci

Ms. Butler

Mr. Chavez

Ms. Epstein

Mr. Kern

Mr. Meza

Mr. Roberts

Mr. Grantham, Vice-Chairman
Mr. Weninger, Chairman

Agenda
Original Agenda — Attachment 1

Request to Speak
Report — Attachment 2

Committee Attendance
Report ~ Attachment 3

Committee Action

Bill Action
SB1195_ DP
SB1133 DP
SB1335 DP
SB1373 DP
SB1I5i0 DP
SB1397_ DP

Members Absent

Vote

5-3-1-0
5-2-2-0
7-0-2-0
8-0-1-0
8-0-0-1
7-1-0-1

WA,

MINUTES RECEIVED
CHIEF CLERK'S OFFICE

S-20-20

Attachments

4,5,6

7, 8,9, 10, 11, 12, 13
14, 15, 16, 17, 18
19, 20, 21,

22, 23, 24,

25, 26, 27, 28, 29

Paul Benny, Compaittee Secretary

May 20, 2020

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

COMMITTEE ON COMMERCE
May 19, 2020

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

SPECIAL MEETING AGENDA

COMMITTEE ON COMMERCE

DATE Tuesday, May 19, 2020 ROOM HHR3 (Teleconference) TIME 2:00 P.M. of upon
adjournment of Elections
Members:
Mr. Biasiucci Ms, Epstein Mr. Roberts
Ms. Butler ’ Mr. Kern Mr. Grantham, Vice-Chairman .
Mr. Chavez Mr. Meza Mr. Weninger, Chairman

With permission of the Speaker pursuant to House Rule 9(C)(7)

Bills Short Title Strike Everything Title

*SB1133
( a (Gray: Fann)

S 2-2 COM, RULES

public works; contracts; payment

SB1195 liquor; sales; delivery; original packaging
(Borrelli)
a 6-3-1 COM, RULES

$B1335 tourism marketing authorities

PP (Pace: Bowie)

4-0*2:@ COM, RULES

. automated prescription-dispensing kiosks; permits
Ce | (Pace)

Bo. | - OCOM, RULES

$B1373

*SB1397 ES insurance; preexisting condition exclusions;

prohibition
4-\}-o q (Mesnard: Allen S, Borrelli, et al)
——_———— COM, RULES
'{
Page 1 of 2

Attachment 4

Bills Short Title Strike Everything Title
*SB1S10 public contracts; payment methods

—;—— (Livingston)
.y COM, RULES

Bo --|
On previous agenda

ORDER OF BILLS TO BE SET BY THE CHAIRMAN
In accordance with the Public Health Emergency Declaration issued by Governor Ducey, the Commerce
Committee will be conducted via teleconference software. Members of the public may access a livestream of the

meeting here:

https://azlee.eranicus.com/MediaPlayer.php?publish_id=8

The public is urged to weigh in on legislation using the Request to Speak system
(https://apps.azlee.gov/RequestToSpeak/UpcomingAgendas). Additionally, the public may provide written testimony
through email to pbenny@azleg.gov. The submitted testimony will be entered into the record.

JY
05/18/2020

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 Commerce (5/19/2020)

$B1133, public works: contracts: payment

Support:

Barry Aarons, ASSOCIATED SPECIALTY CONTRACTORS OF ARIZONA; Stuart Goodman, Southern Arizona Water
Users Association; Michael Gardner, AZ BUILDERS‘ ALLIANCE; Angelica Terrazas, ASSOCIATED SPECIALTY
CONTRACTORS OF ARIZONA DBA CONSTRUCTION TRADES COALITION (CTC); Marty Giebelhaus, AZ STATE
CONTRACTORS COALITION (ASCC), MARLIN MECHANICAL CORP, Self

Oppose:

Katy Yanez, NORTHERN ARIZONA UNIVERSITY; Marge Zylla, TEMPE, CITY OF; Pinal County Supervisor Anthony.
Smith, representing self; Graham County Supervisor James Palmer, representing self; Yuma County Supervisor
Russell McCloud, representing self; Navajo County Supervisor Jason Whiting, representing self; Ryan Peters,
CHANDLER, CITY OF; Tom Savage, LEAGUE OF ARIZONA CITIES & TOWNS; Santa Cruz County Supervisor Bruce
Bracker, representing self; Robin Hillyard, County Supervisors Association Of Arizona; Todd Madeksza, COCONINO
COUNTY, FLAGSTAFF, CITY OF; Katie Franquist, UNIVERSITY OF ARIZONA; Yesenia Dhott, PHOENIX, CITY OF; Ryan
Lee, GLENDALE, CITY OF; Rodney Short, YUMA, CITY OF; Kendra Burton, AZ STATE UNIVERSITY

All Comments:

Marty Giebelhaus, AZ STATE CONTRACTORS COALITION {ASCC}, MARLIN MECHANICAL CORP, Self: Adding
represented org; Pinal County Supervisor Anthony Smith, Seif: since the meeting for the amendment never took
place, | hold my position as opposed.; Graham County Supervisor James Palmer, Self: Back in March the counties
agreed to support this measure with an agreed up amendment. Without that amendment that we all agreed on
we find this bill unacceptable and strongly oppose this bill. [t would put scarce public resources at risk.; Yuma
County Supervisor Russell McCloud, Self: In its current form iocal governments are not protected against cost
increases while at the same time our budgets are being hammered, Wait until next session, get the agreed upon
amendment in place, and pass it then. Thank youl; Robin Hillyard, County Supervisors Association Of Arizona:
Moving forward without adopting the already AGREED upon changes will damage our ability to be effective
stewards of public funds.; Kendra Burton, AZ STATE UNIVERSITY: Cities, counties, k12 & universities have long
worked in good faith with proponents of this bill, & the 3/12 posted amendment would have moved us to neutral.
Passage of 1133 without it will undermine our ability be effective stewards of public funds.

$B1195, liquor: sales: delivery; original packaging

Support:
Alan Everett, AZ WINE GROWERS ASSN; Cheyenne Walsh, SHIPT, INC.

Neutral:
Trish Hart, AZ FOOD MARKETING ALLIANCE

Attachment Z

Oppose:
Steve Barclay, BEER & WINE DISTRIBUTORS OF ARIZONA

All Comments:

Cheyenne Walsh, SHIPT, INC.: This bill makes a narrow exception to labeling requirements that still ensures
delivery to adults over the age of 21. | respectfully encourage you to vote YES. Thank you!

$B1373, automated prescription-dispensing kiosks: permits

Support:
Stuart Goodman, MEDAVAIL TECHNOLOGIES, INC

Oppose:
Cathi Herrod, CENTER FOR ARIZONA POLICY; Ron Johnson, AZ CATHOLIC CONFERENCE

All Comments:

Cathi Herrod, CENTER FOR ARIZONA POLICY: Center for Arizona Policy recommends an amendment to clarify that
abortion-related drugs are not available in this manner. With an amendment, we would be neutral on the bill.; Ron
Johnson, AZ CATHOLIC CONFERENCE: Concerned about the possibility of increasing access to abortion related

drugs unless an amendment is offered.

$B1335, tourism marketing authorities

Support:

Barry Aarons, EXPERIENCE SCOTTSDALE, VISIT MESA, VISIT PHOENIX, VISIT TUCSON; Nick Simonetta, CACTUS
LEAGUE BASEBALL ASSN; Jen Marson, AZ ASSOCIATION OF COUNTIES; Jaime Molera, ARIZONA LODGING AND
TOURISM ASSOCIATION; Robert Medier, TUCSON METROPOLITAN CHAMBER OF COMMERCE; Steve Barclay, BEER
& WINE DISTRIBUTORS OF ARIZONA; Angelica Terrazas, EXPERIENCE SCOTTSDALE, VISIT MESA, VISIT PHOENIX,
VISIT TUCSON; Laura Magnus, EXPERIENCE SCOTTSDALE, TUCSON CONVENTION & VISITORS BUREAU, VISIT MESA

All Comments: —

Laura Magnus, EXPERIENCE SCOTTSDALE, TUCSON CONVENTION & VISITORS BUREAU, VISIT MESA: Written
testimony has been emailed and provided for the record.

$B1510, public contracts: payment methods

$B1397, insurance: preexisting condition exclusions: prohibition

Support:

elisa desgroseilliers, representing self; Lynne Breyer, representing self; Attorney General Mark Brnovich,
representing self; Jennifer Wellsman, representing self; Sallie Kladnik, representing self; Joseph Abate, AZ
PSYCHIATRIC SOCIETY; Darrell Boomgaarden, representing self; Walter Steiner, representing self; Charlie Silver,

representing self; Kathy Fraser, representing self; Erin McCamish, representing self; Ruth Porter-Tilman,

representing self

Oppose:

Kimberly Dorris, representing self; Rebecca Smith Gross, representing self; Catherine Sigmon, representing self;
Penni Lawson, representing self; Susan Morris, representing self; Julie Golding, representing self; Christine Keitges,
representing self; Kathy Dixon, representing self; Linda Edwards, representing self; Peggy Klemp, representing self;
Marilyn Coyle, representing self; Laurie Nerat, representing self; Margaret Adams, representing self; Hayley
Stenger, representing self; Stephen Coyle, representing self; Kelli Lang, representing self; Teresa Neiberg,
representing self; Lisa Tesnear, representing self; Linda Petersen-Vargas, representing self; Emily Norton,
representing self; Elise Villescaz, representing self

All Comments:

Kimberly Dorris, Self: My full comments were submitted via email, but this bill provides protections in name only.
Because it fails to address Essential Health Benefits, Cost Sharing, and Annual/Lifetime caps, the bill leaves

. loopholes that insurers will easily exploit.; Catherine Sigmon, Self: It is so important not to weaken the Affordable
Care Act when so many people are in need!; Susan Morris, Self: People need health care! They also need
protection from insurance companies changing prices and benefits. PRESERVE ALL OF THE ASA PROVISIONS!; Kathy
Dixon, Self: It doesn't protect the insured from the insurance company jacking up prices for pre-existing conditions;
Linda Edwards, Self: Weak bill; Margaret Adams , Self: This bill offers no protection for Arizonans against rate
spikes or pre-existing conditions coverage. Strike this bill down.; Elise Villescaz, Self: This bill would undermine our

independent redistricting process.

ARIZONA STATE LEGISLATURE
Fifty-fourth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON COMMERCE
CHAIRMAN: Jeff Weninger VICE-CHAIRMAN: _ Travis W. Grantham
DATE 05/19/20 /20 /20 /20 /20
CONVENED “fs 05pm m m m m
RECESSED
RECONVENED
ADJOURNED 5) 53pm
MEMBERS
Biasiucci \y
Butler \
Chavez V
Epstein V
Kern \V
Meza Vv
Roberts V
Grantham, Vice-Chairman V
Weninger, Chairman ‘Y:
v Present -- Absent exc Excused

Attachment 3

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fourth Legislature
Second Regular Session
Senate: COM 4-3-1-0 | 3 Read 19-11-0-0
(RR ERA a a ED
SB 1195: liquor; sales; delivery; original packaging
Sponsor: Senator Borrelli, LD 5
Committee on Commerce

Overview
Exempts containers of spirituous liquor for delivery from labeling requirements if certain criteria
are met.

History
A retail licensee with off-sale privileges may sell and deliver spirituous liquor off of the licensed

premises to a person in Arizona. The licensee may maintain a delivery service and may contract
with an independent contractor or a common carrier for delivery of spirituous liquor. An employee
of a licensee or other authorized person must verify the age of the person accepting the delivery
through the display of an identification document and receive the person's signature. A licensee
must label containers of spirituous liquor delivered to a person in Arizona with the words, "contains
alcohol, signature of person who is twenty-one years of age or older is required for delivery.” The
licensee is responsible for any violations of the requirements for the sale and delivery of spirituous
liquor (A.R.S. § 4-203).

Provisions
1. Exempts, from the delivered spirituous liquor labeling requirement, containers of spirituous
liquor that are in the manufacturer's original packaging and either:
a) Kept plainly visible during transport and delivery; or
b) The person delivering the order has personally retrieved and bagged or otherwise
packaged the container for delivery and the licensee records the identification information
for each delivery. (Sec. 1)

2, Makes a technical change. (Sec. 1)

{] Prop 105 (45 votes) C1 Prop 108 (40 votes) © Emergency (40 votes) Fiscal Note

SB 1195

initials PRB Page 1
Attachment 4

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

ROLL CALL VOTE

COMMITTEE ON Commerce BILLNO. $B 1195

DATE May 19, 2020 MOTION: | p

PASS AYE NAY PRESENT |} ABSENT

Biasiucci
Butler

Chavez

Epstein
Kern iN
Meza

Roberts

Grantham, Vice-Chairman

Weninger, Chairman

Ti

JEFF WENINGER, Chairman
TRAVIS W. GRANTHAM, Vice-Chairman 5

ATTACHMENT.

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1195

Dear Representative,

On behalf of Shipt, Inc., | encourage your support of SB 1195 on the House floor. SB
1195 creates a narrow exception to current alcohol labeling requirements for home delivery to
create a more efficient delivery process that provides additional safeguards against underage
deliveries. In the age of COVID, grocery delivery is a critical service to Arizona residents,
especially vulnerable populations. This bill makes delivery easier for stores, delivery drivers, and
consumers while still providing safeguards for ensuring delivery to adults over the age of 21 that
are more effective than a paper label. A label on the outside of a grocery bag, a bottle of wine,
ora six-pack of beer has questionable value in terms of preventing delivery to minors. Paper
labels are logistically difficult for a company to provide to an out-of-state workforce, and for
companies to ensure that the labels are being used correctly, which increases the risk of a
violation for an operational technicality that does little to protect public health and safety. SB
1195 is a reasonable accommodation to address this issue while maintaining public safety.

Shipt is a grocery delivery service that operates in over 70 markets across the
country. They pride themselves on being an industry leader in delivery compliance with state
law, particularly in ensuring that deliveries are only made to adults over the age of 21 and toa
safe environment. Delivery drivers are required to comply with all aspects of Arizona law,
including identification requirements for any order that contains alcohol. Current law is
explicitly clear—deliveries can only be made to an adult over the age of 21 who can provide the
approved identification, and Ariz. Admin. Code 19-1-504 requires delivery carriers to collect and
retain, among other things, the “[t]ype of and number on the identification used to verify the
individual's date of birth.” Should delivery drivers fail to comply with these laws, not only can
the driver be personally responsible but the retailer who sold the product can ultimately lose
their liquor license to sell these products in the first place. While at least 34 states allow for
home delivery of alcohol, Arizona is one of only two states (Virginia is the other) to enact a
broad labeling requirement for these deliveries. Arizona law requires a label on ALL containers
of alcohol if it is being delivered.

SB 1195 creates an narrow exemption from this labeling requirement for circumstances
where:
(1) The alcohol is in its original packaging and is unobscured or
(2) the person delivering the order also shopped and packaged that order, and the iD
information is recorded electronically at the time of delivery.

These provisions address concerns raised that a delivery driver may inadvertently
deliver alcohol he or she did not know was in the order, and provide a record for the
Department of Liquor that identification laws were complied with before the delivery was
completed. A responsible retailer or delivery company will ensure far more notice and
compliance checks than labeling alone. In Shipt’s case, the delivery driver has been trained on
compliance with state liquor laws before being eligible to fulfill an order that contains alcohol,
the driver personally shops the order and selects the product from the shelves and makes the

Attachment bo

purchase, and the driver must comply with identification recording requirements per state law
before the transaction can be completed in the Shipt App. Shipt also maintains a command
center in its main headquarters in Birmingham, Alabama where these transactions are
monitored in real time to ensure delivery is made lawfully. We recognize that all companies
may not be this diligent with their deliveries. Nothing in this bill prevents a retailer or delivery
company from continuing to use a label or other method of ensuring a delivery driver knows
there js alcohol in the order and ID requirements are complied with.

Again, the default of the law even after this bill is that a label is required unless an order
meets one of these two exceptions. A retailer could continue to label if it chooses to. This bill
simply eliminates that cumbersome requirement where additional safeguards exist. The retailer
who Sells the alcohol is ultimately responsible if the alcohol is delivered to minors, as is the
person who delivered it. Records are kept so the Department of Liquor could ask any any time
to see the ID information from a particular transaction.

| know that time is limited and meetings are difficult under the circumstances. | would

be happy to meet with you or do a call to discuss any questions or concerns that you may
have. | respectfully encourage your YES vote on $B1195.

Respecifully,

Cheyenne Watoh

Paubtic Patiow Strategy aad Badatiaus

3241 E. Shea Blvd. #245
Phoenix, AZ 85028
(520) 591-9703
www.azpolicylaw.com

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature
Second Regular Session
Senate: GOV DPA 6-1-0-0 | 3% Read 16-13-1-0

SB 1133: public works; contracts; payment
Sponsor: Senator Gray, LD 21
Committee on Commerce

Overview
Prescribes requirements for payment of contractors and subcontractors for changed or additional

work in construction contracts with certain governmental entities.

History
Progress payments may be made to the contractor on the basis of a duly certified and approved

estimate of the work performed. Progress payments must be paid within 14 days after the estimate
of work is certified and approved. The estimate of work is deemed approved and certified 7 days
after the date of submission unless the owner prepares and issues a specified written finding
detailing those items in the estimate that are not approved and certified under the contract. In any
delay of payment to the contractor, interest at the rate of 1% per month may be added on the
unpaid balance (A.R.S. § 41-2577).

Provisions

1. Permits a contractor directed to perform changed or additional work by ADOT or a
governmental entity, pending a final determination of the total amount to be paid, to request
payment for the changed or additional work that the contractor completed during the preceding
calendar month in monthly pay estimates based on the costs incurred by the contractor. (Sec.
3, 4, 5, 7)

2. Allows a subcontractor directed to perform changed or additional work by the contractor,
pending a final determination of the total amount to be paid, to request payment for changed
or additional work that the subcontractor completed during the preceding calendar month in
monthly pay estimates based on the costs incurred by the subcontractor. (Sec. 3, 4, 5, 7)

3. Requires the person designated in the construction contract to certify and approve the monthly

payment estimate to:
a) Make an interim determination for approval for payment of the costs of changed or

additional work; and
b) Certify the amount the person determines to be reasonably justified. (Sec. 3, 4, 5, 7)

4. Allows a party to disagree with the interim determination and assert a claim in accordance
with the terms of the construction contract or the agreement between the contractor and

subcontractor. (Sec. 3, 4, 5, 7)

5. Stipulates in any action or arbitration relating to payment for changed or additional work, the
successful party is awarded reasonable attorney fees and costs. (Sec. 3, 4, 5, 7)

Defines construction contract, contractor, cost, subcontractor and work. (Sec. 3, 4, 5, 7)

. Requires rules adopted by the State Board of Education for procurement of construction
projects for school districts to comply with prompt payment requirements, unless external
funding has not yet been received. (Sec. 2)

SB 1133

Cammarra

Attachment /

Initials PRB Page 1

8. Requires ABOR's adopted procurement policies and procedures to be substantially equivalent

to prompt payment requirements.
a) Excludes the judicial branch from this requirement. (Sec. 6)

9. Makes technical and conforming changes. (Sec. 1, 3, 4, 5, 6, 7)

. SB 1133
Initials PRB Page 2 Commerce

oe Se 4 DB SO Be |! MK

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Fifty-fourth Legislature Commerce
Second Regular Session ; S.B. 1133

PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO S.B. 1133

(Reference to Senate engrossed bili)

Page 10, line 12, after "CONTRACTOR" insert “IN WRITING"

Line 13, after "CONTRACT" insert "AND THE CONTRACTOR SUBMITS TO THE DEPARTMENT
A REASONABLE COST ESTIMATE OF THE CHANGED OR ADDITIONAL WORK WITHIN TWO
BUSINESS DAYS"

Line 25, after "CONTRACTOR" insert "IN WRITING"

Page 15, line 27, after "CONTRACTOR" insert "IN WRITING"

Line 28, after "CONTRACT" insert “AND THE CONTRACTOR SUBMITS TO THE OWNER A
REASONABLE COST ESTIMATE OF THE CHANGED OR ADDITIONAL WORK WITHIN TWO
BUSINESS DAYS"

Line 40, after "CONTRACTOR" insert "IN WRITING"

Page 20, line 29, after "CONTRACTOR" insert "IN WRITING"

Line 30, after "CONTRACT" insert “AND THE CONTRACTOR SUBMITS TO THE OWNER A
REASONABLE COST ESTIMATE OF THE CHANGED OR ADDITIONAL WORK WITHIN TWO
BUSINESS DAYS"

Line 42, after "CONTRACTOR" insert “IN WRITING”

Page 28, line 19, after "CONTRACTOR" insert "IN WRITING"

Line 20, after "CONTRACT" insert “AND THE CONTRACTOR SUBMITS TO THE OWNER A
REASONABLE COST ESTIMATE OF THE ‘CHANGED OR ADDITIONAL WORK WITHIN TWO
BUSINESS DAYS"

Line 32, after "CONTRACTOR" insert "IN WRITING"

Amend title to conform

JEFF WENINGER
LI33WENINGER
03/12/2020
02:17 PM
H: PRB/1s

Adopted

# of Verbals

‘Failed Withdrawn_

Not Offered \ Analysts Initia

Attachment <a

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

ROLL CALL VOTE

COMMITTEE ON Commerce. BILLNO. $B 1133

DATE May 19, 2020 MOTION: DP

PASS AYE NAY PRESENT | ABSENT

Biasiucci V .
Butler N
Chavez \
Epstein \
Kern \ V
Meza VV
Roberts V
Grantham, Vice-Chairman VV
Weninger, Chairman \

5S | 2 | 2 Se)

Lk

APPROVED: COMMITTEE'S ETARY

WW AA

JEFF WENINGER, Chairman
TRAVIS W. GRANTHAM, Vice-Chairman

ATTACHMENT 7

Submitted Testimony
Commerce Committee
May 19, 2020

SB1133

Good Afternoon Mr. Chairman and Members,

Thank you for the opportunity to submit testimony for today’s Commerce Committee
meeting on SB 1133 public works; contracts; payment (Gray). Prior to the suspension of
session, an amendment had been agreed upon and posted for Committee on March 17,
2020. This amendment clarified that all change orders must be in writing and that the
contractor is required to provide an estimate of the cost for review within two business
days. Unfortunately, the committee hearing was canceled, and we have been informed that
the plan is to move the bill forward without the amendment so it does not have to go back
to the Senate for concurrence.

Without the amendment, there is nothing that requires the contractor to provide some sort
of estimate of work within a reasonable time frame, which will push more and more work
into a force account situation, driving up overall project costs. While the final
determination is pending it is critical that the owners receive some sort of estimate of cost
for the changes. Proceeding without an estimate puts the owner in an untenable situation
where they will not have enough information to make an educated decision on the work
necessary to complete the change order, the ability to make adjustments if necessary, or
ability to communicate the potential cost quickly. Moving this bill forward in its current
form puts already limited public resources at risk.

When the proponents moved the bill out of the Senate we were reassured that they would
continue to work with us to come to an agreement. As stewards of public funds our goal
was to find a balance between allowing subcontractors to add work performed on a change
order into the normal project payment schedule without jeopardizing our ability to properly
manage project costs.

We have been working in good faith with the proponents over the last two sessions and the
posted amendment would have brought us to neutral on the bill (2019 - SB 1285). While
we can appreciate the proponents desire to press on, without adopting the already agreed
upon changes due to this new window available to move bills, doing so will damage our
ability to be effective stewards of public funds.

The proponents have recently said there is nothing that says we cannot simply modify our
contracts to require an estimate for change orders. That is true, luckily we were able to get
the bill amended in the Senate to say everything needs to be done in accordance with the
construction contract, but we ONLY have a contract with the contractor NOT the
subcontractors.

Attachment 10

Since owners don’t have a contract with the subcontractor we may be able to get creative
by adding in stipulations that the contractor must follow when entering contracts on the
project with a subcontractor by requiring estimates be provided in a reasonable
timeframe. However, anything can be taken out of a contract with negotiations. Moving
forward without the agreed upon amendment adds additional complexity to an already
complex process and place additional burdens on already limited staff resources, especially
for our rural communities.

Please vote NO on SB 1133 unless the critical protections offered in the agreed upon
amendment is added on to the bill. The amended version strikes the appropriate
balance - it ensures subcontractors are able to recoup their costs quickly on change
orders and provides transparency on the overall cost to the public for those
changes. Unfortunately, without the amendment it will become increasingly difficult for
the owner to make well informed decisions and ultimately drive up the costs of public
projects.

Thank you for your consideration.

Robin Hillyard

Legislative Research Program Manager
County Supervisors Association of Arizona
1905 W. Washington St., Ste. 100
Phoenix, Arizona 85009

602-452-4504 (direct)

480-620-9238 (cell)
RobinH@countysupervisors.org
www.countysupervisors.org

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1133

Dear Representative,

On behalf of the Associated Specialty Contractors made up of trade groups in the life
safety subcontractors’ community we ask that you vote for SB 1133 (public works:
contracts; payment) in the House Commerce Committee on May 19th.

The bill allows a contractor or subcontractor directed to perform changed or additional
work (aka change orders) by the contractor or owner of a public works project, pending a
final determination of the total amount to be paid, to request payment for changed or
additional work that the subcontractor completed during the preceding calendar month in
the regular monthly pay estimates based on the costs incurred by the subcontractor.

it further provides the person designated in the construction contract to certify and
approve the monthly payment estimate to make an interim determination for approval for
payment of the costs of changed or additional work and certify the amount the person
determines to be reasonably justified. It also allows a party to disagree with the
interim determination and assert a claim in accordance with the terms of the
construction contract or the agreement between the contractor and
subcontractor.

In the past the lack of the ability to request payment for change orders has resulted in
some subcontractors not getting paid for those change orders which can be a significant
amount. In a few cases the failure to receive payment has resulted in the subcontractor
filing for bankruptcy or going out of business. This function of prompt pay will protect
the subcontractors from failure of a public works project from properly paying for
work for change orders performed.

As a result of the stakeholder meetings while the bill was being considered in the
Senate proponents agreed to several significant amendments to protect political
subdivisions including cities, counties, schools and universities. Those changes are
reflected in thee Senate Engrossed version.

Following passage in the Senate the public sector stakeholders requested an
additional anendment requiring submission to the contractor or owner of a reasonable
cost estimate of the changed or additional work within two business days. We agreed to
that request and it would have been offered as a Committee or floor amendment in the
House. That is now not possible.

We have committed to Chairman Jeff Weninger and bill sponsor Senator Rick
Gray that we will seek that lanquage in legislation in the next regular session to
add this provision. We will also ask that our constituents administratively apply the
proposed cost estimate provision as a normal course of business.

We remain committed to our public sector stakeholder partners to continue to
modify and improve upon the language in the bill in the future. This process is a
marathon and not a sprint. The passage of this bill is the appropriate
and necessary step to take and we ask you to support and vote for it.

Thanks and best regards,

Barry M. Aarons
The Aarons Company LLC
Cell: 602 315 0155

Attachment Ap

Submitted Testimony
Additional

Commerce Committee
May 19, 2020

SB 1133

Folks,

While the additional amendment that all parties agreed to requiring an estimated cost on any
change order be submitted within two days will not be considered, the opinion of sponsor Senator
Gray and our opinion is that even if the amendment is not included nothing stops political
subdivisions from putting that language in their construction contracts.

Our intention, if the bill is enacted, is to require that of our members and further come back in the
next session with legislation to codify it.

We hope you take that into consideration as the process moves forward.

Regards,

Barry

Barry M. Aarons
The Aarons Company LLC
Cell: 602 315 0155

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1133

Honorable Members of the House Commerce Committee,

On behalf of the American Subcontractors Association of Arizona, Arizonans for Fair
Contracting, and the Arizona State Contractors Coalitions, | am writing to request your
support for SB 1133 (public works; contracts; payment).

SB 1133 will strengthen prompt pay laws by outlining the requirements for payment of
contractors and subcontractors for changed or additional work (i.e. “change orders”) in public
construction contracts with government entities.

While an additional amendment that all parties agreed to requiring an estimated cost on the
change order to be submitted within two days will not be considered, our opinion is that even
if the amendment is not included nothing stops political subdivisions from putting that
language in their construction contracts.

SB 1133 is the successful result of a number of stakeholder discussions and the essential
components to successfully strengthen our prompt pay laws are in place.

Arizona’s subcontractors support SB 1133, and stand ready to make any necessary additional
enhancements to the law in the future.

Please vote YES on SB 1133.

Thank you.

Ryan DeMenna

Ryan@DeMenna.com
602.989.3623 ~ Cell
602.252.5155 - Office
1345 W. Monroe Street
Phoenix, Arizona 85007

DeMenna Public Affairs

www.DeMenna.com

Attachment /2.

Submitted Testimony
Commerce Committee
May 19, 2020

$B1133

Chairman Weninger,

The League of Arizona Cities and Towns respectfully requests a NO vote on SB1133 public works;
contracts; payment. It was brought to our attention that the amendment in your name will not
be offered in committee, which was the product of a stakeholder process with the proponents to
balance the need for subcontractors to have a streamlined process for requesting and receiving
payment on work they completed without putting public monies at risk.

Prior to the suspension of session, the bill was scheduled to be heard in the Commerce Committee
with the amendment and the League was prepared to honor our agreement with the proponents
to be neutral on the bill. The amendment would require that all change orders on public
construction jobs to be in writing — a very important revision that will reduce the likelihood of
costly disputes with contractors and subcontractors and unnecessary delays over contested work
as the expectation of all parties will be in writing. It would also require contractors and
subcontractors to submit within two business days a cost estimate for changed or additional work
so that cities and towns can make the best financial decisions for public construction projects and

use tax dollars efficiently.

While we understand we are in unique circumstances, the situation does not require the bill to
proceed this session in its unamended form. We request the proponents honor the agreement
they made to amend this bill with these important revisions and offer it in a complete package
that can be approved in the next session. This will ensure cities and towns can properly implement
the law without risking taxpayer dollars and avoid costly disputes.

Thank you,

Tom Savage

League of Arizona Cities and Towns
1820 W. Washington Street
Phoenix, Arizona 85007

Office: (602) 258-5786

Cell: (916) 806-0205
tsavage@azleague.org

Attachment /3

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature
Second Regular Session
Senate: FIN 8-0-2-0 | 3 Read 25-4-1-0

SB 1335: tourism marketing authorities
Sponsor: Senator Pace, LD 25
Committee on Commerce

Overview
Allows for the formation of a tourism marketing authority (Authority).

History
The Arizona Office of Tourism (AOT) is responsible for promoting and developing tourism in

Arizona, The AOT is led by a director, appointed by the governor, along with an assistant director
chosen by the director with the governor's approval. The director must have at least five years of
management experience in the tourism and travel industry, understanding of the technical
elements of the tourism industry, and experience in marketing or public relations. The director is
responsible for promoting and developing tourism business, conducting a marketing campaign on
the attractions of the state, and promoting this information through state, national and international
media (A.R.S., Title 41, Chapter 19).

Provisions

Tourism Marketing Authority (Sec. 1)

1. Enabies, by a petition, the governing body of one or more municipalities or one or more
municipalities and a county with a population of less than two million persons to adopt a
resolution forming a tourism marketing authority.

a) Specifies the contents of the petition.

2. Stipulates the governing body of each participating municipality and county by affirmative vote
may approve the formation of the Authority if a petition is signed by the owners of at least 67%
of the transient lodging rooms within the Authority which includes two or more properties with

transient lodging rooms.
3. Prescribes the powers and duties of each governing body of a participating municipality and

county of an Authority which include tevying an assessment of not more than $5 dollars per
room sold per night on the transient lodging rooms in the Authority.

4, Requires the transient lodging room owner to pay the assessment to the Arizona Department
of Revenue (DOR) at the same time as paying the transaction privilege tax.

5. Directs DOR to report the amount of monies collect from the assessment to the State
Treasurer,
6. Requires the State Treasurer to transmit to the participating municipality or county treasurer's

the amount collected from properties within the Authority.
a) Defines the municipal location of a property in the Authority.

7. Directs DOR to separately account for the monies paid and deposit the net revenues collected
into the state General Fund.

L} Prop 105 (45 votes) Oi Prop 108 (40 votes) [1 Emergency (40 votes) 1 Fiscal Note

SB 1335

Attachment 4
10.

11,

12.
13.

14.
15.

16.
17.
18.

Requires the board of an Authority and any participating municipality or county to supply DOR
and the State Treasurer with all requested information necessary relating to the administration

of the assessment.

Requires an Authority be governed by the board of directors of the recognized tourism
promotion agency with at least one member of one or more of the governing bodies
participating in the Authority.

Permits the Authority to:
a) Empioy staff and consultants;
b) Reimburse a municipality or county for staff, services and facilities;

c) Enter into contracts; and
d) Accept Grants.

Prohibits an Authority from financing or facilitating the acquisition, maintenance, construction
or operation of a hotel, motel, resort or other transient lodging or any sports or entertainment
facility.

Requires an Authority and its board of directors to maintain the records of the Authority.

Requires an Authority and its board of directors to keep monies and operations separate from
the tourism promotion agency's other monies and activities.

Directs the board of an Authority to comply with public meetings and public records laws.

Requires the board of an Authority to report to the governing bodies at least annually on
activities and expenditures and the impacts of the expenditures and activities.

Outlines the criteria for terminating an Authority by the owners of the transient lodging rooms.
Terminates an Authority 10 years after formation unless renewed by petition.

Provides criteria for renewing an Authority and modifying its boundaries.
a) Allows for an additional 10-year renewal.

$B 1335

Initials PRB Page 2 Commerce

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

ROLL CALL VOTE
COMMITTEE ON Commerce BILLNO. $B 1335
DATE May 19, 2020 MOTION: D P
PASS AYE NAY PRESENT ABSENT

Biasiucci \

Butler N

Chavez OV

Epstein NW \

Kern Vv V

Meza \ \V

Roberts V \j

Grantham, Vice-Chairman Vy

Weninger, Chairman \y

7;,O 2. OD

JEFF WENINGER, Chairman
TRAVIS W. GRANTHAM, Vice-Chairman

ATl

ORM 3a

Attachment | O

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1335

Dear Representative,

Please support Arizona Senate Bill 1335 (SB1335) which is enabling legislation that would allow
tourism marketing authorities (TMAs) to be created in all municipalities regardless of population
and/or counties with populations of less than two million throughout the state.

The Sedona Chamber of Commerce & Tourism Bureau, representing almost 900 business,
supports this initiative. This would allow Sedona to achieve funding to help achieve a more level
playing field with more than 180 municipalities that are already using TMAs to attract and
manager visitors to their area. In light of the current Covid-19 pandemic, this legislation would
also allow for us to diversify our funding sources. For us, we need these funds to help manage
the more than 3 million visitors who embark on our city each year.

This legislation is also supported by our Sedona Lodging Council, which represents Sedona’s
lodging sector and our nearly 4,000 rooms. This is broad grassroots-supported funding
mechanism would help us augment our existing programs of work and support Sedona’s tourism
industry and the 10,000 jobs that rely on it.

Please consider supporting this Bill.
Thank you!

Jennifer Wesselhoff President/CEO, CDME

Sedona Chamber of Commerce & Tourism Bureau
928.204.1123 (ext. 111)

SedonaChamber.com | VisitSedona.com

Take the Sedona Cares Pledge

Attachment 6

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1335

Good evening members of the House Commerce Committee,

On behaif of Barry M. Aarons, myself and our clients - Visit Tucson, Visit Mesa, Visit
Phoenix and Experience Scottsdale - we ask that you support SB1335: Tourism
Marketing Authorities and that these remarks be entered into the record.

$B1335 has no stakeholder opposition and rather overwhelming support from the
tourism industry, cities, counties, the Greater Phoenix Chamber, the Arizona State
Chamber and many more (see attached endorsement page and one pager), We ask for
you to please VOTE YES ON $B1335!

This legislation would enable the industry, in collaboration with county and municipal
governments, to establish Tourism Marketing Authorities (TMAs). TMAs would
empower the visitor industry to create necessary revenue for tourism marketing and
promotion — and only for marketing and promotion, as capital expenditures are
specifically prohibited in the bill — through a per room, per night assessment on
transient lodging.

Passage of this bill now, however, has become a dire necessity.

COVID-19 has been disproportionately devastating to the tourism and
hospitality/service industry. Hundreds of hotels and attractions have closed. {A link
showing the volume within our industry that cancelled or closed is available HERE.)
Thankfully this list also reflects those that are beginning to reopen. But it will be a slow
process.

As is to be expected with this crisis, our destination marketing organizations’ funding
mechanisms for promotional activities will be woefully lacking over the next six to 12
months. As the state considers various strategies to reinvigorate Arizona’s economy, $B
1335 will be the most significant tool to assist our industry in our recovery.

Here’s how SB 1335 works.

¢ It is enabling legislation that allows for a minimum of 67% of hoteliers (weighted
by room) to petition a municipality county or combination of political subdivisions
to create a Tourism Marketing Authority in a designated geographic area.

¢ The political subdivision(s) would then contract with a recognized 501.C.6
Destination Marketing Organization.

Attachment / /
° Each hotel in the authority would then be authorized a per room per night
assessment of $0 - $5 on rooms sold as clearly defined in the petition and
approved by the political subdivision.

¢ All monies then would be collected in the same manner as their existing bed tax
and remitted back to the local jurisdiction. Those dollars would be passed to the
Tourism Marketing Authority for tourism and marketing promotion.

¢ There is oversight and accountability requirements built into the bill to ensure that
the dollars are properly used to help drive more visitors to the destination.

¢ The TMA can-not be created without an affirmative vote by the political
subdivision(s) that governs the designated geographical boundaries of the
authority.

* The TMA can also be dissolved if 51% of hoteliers (weighted by room) petition the
political subdivision for dissolution.

Currently around the US, there are 14 states and over 180 jurisdictions that have similar
tourism authorities or districts. Those destinations are better prepared to commence
their recovery. We should do what is necessary to allow our tourism industry to be in
the strongest competitive position possible. SB 1335 gives us that tool.

Please vote yes on $B1335!

Laura Magnus

Magnus Public Policy

Owner / Lobbyist

Cell: 602 909 4326

Email: laura@magnuspolicy.com

MAGNUS PUBLEC POLICY

_ MPP.

Arizona Senate Bill 1335—2020 Legislative Session
Tourism Marketing Authorities — Public-Private Partnership

Updated: March 4, 2020

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Arizona Senate Bill 1335—2020 Legislative Session
Tourism Marketing Authorities - Public-Private Partnership

Arizona Senate Bill 1335 (SB1335) is enabling legislation that would allow tourism marketing
authorities (TMAs) to be created in all municipalities regardless of population and/or counties
with populations of less than two million throughout the state, putting Arizona communities
ona more level playing field with more than 180 municipalities that are already using TMAs to
attract visitors, meetings and events.

Through an assessment on sold hotel and resort guest rooms, hoteliers would remit revenue
to the Arizona Department of Revenue {ADOR), which would allocate it to the applicable
municipalities and/or counties. Then, the revenue would be passed through to TMAS.

Destination marketing organizations (DMOs) in jurisdictions with TMAs would use the money
for new sales, marketing and promotional projects that augment their existing programs

of work, Details are spelled out in SB1335, along with fact sheets generated by the Arizona
Lodging & Tourism Association and DMOs throughout Arizona.

Benefits —

More visitors and visitor dollars to ‘ Hoteliers vote on this assessment and have
participating communities. input on how the dollars are invested.
More state, county and municipal tax * Accountability—DMO boards oversee
revenue from visitors. TMAs, DMOs provide performance reports

to participating local/county governments,
More visitor revenue to pay for Arizona TMA funds are segregated from other DMO
education, public safety and health care. revenue to enhance oversight.

More jobs—adding to Arizona’s 192,000 * $B1335 is enabling legislation.

existing travel-related jobs. DMOs have to come together with area
hoteliers and local/county governments

New visitor marketing, sales and through a petition process to proceed.

promotion tailored to the needs of Communities that do not want to create a

participating communities. TMA are not compelled to do so.

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1335

Representatives,

I respectfully urge your support of $B1335. This enabling legislation is one that will allow
the hospitality industry to help itself in the wake of the COVID-19 pandemic and beyond.
This legislation will allow communities to form an authority and augment the course of
tourism and visitation with less reliance on local and state governments. This legislation
allows those communities that wish to create a TMA to develop marketing, sales and
promotion tailored to the needs of the participating community.

Arizona must be able to compete in attracting visitors, meetings and events, with the
more than 180 municipalities that are already using TMAs. Industry experts agree that
communities with TMAs in place will recover from disaster faster than those that don't.

Please support the effort to bring more state, county and municipal tax revenue from
visitors to our state. Please support more jobs for Arizonans. Please support more visitor
revenue to pay for Arizona education, public safety and health care.

Respectfully,
Linda Morgan

linda Morgau
Executive Director

Visit Yuma

180 W. 1st Street, Suite D
Yuma, AZ 85364

928 376-0100 Ext. 11

928 580-4225 cell
VisitYuma.com

Attachment 16

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature
Second Regular Session
Senate: HHS 7-0-1-0 | 3° Read 30-0-0-0

SB 1373: automated prescription-dispensing kiosks; permits
Sponsor: Senator Pace, LD 25
Committee on Commerce

Overview
Establishes requirements for an automated prescription-dispensing kiosk (Kiosk) permit.

History
The Arizona State Board of Pharmacy (Board) regulates the practice of pharmacy and the

distribution, sale and storage of prescription medications, prescriptive devices and
nonprescription medications (A.R.S. § 32-1904).

Subject to approval by the Board, a person who holds a permit to operate a pharmacy, drug
manufacturing facility or wholesaling facility may apply to the Board for a permit to operate an
automated prescription-dispensing kiosk. An automated prescription-dispensing kiosk permit
applies to a single automated prescription-dispensing kiosk; therefore, the person must obtain a
separate permit for each to be operated. Additionally, the person must establish policies and
procedures to ensure appropriate performance and use of the automated prescription-dispensing
kiosk. An automated prescription-dispensing kiosk may not: 1) contain or dispense controlled
substances; or 2) be placed in a gas station or convenience store (A.R.S. §§ 32-1929 and 32-
1930; A.A.C. R4-23-677).

To renew an automated prescription-dispensing kiosk permit, a person must submit a completed
permit renewal application electronically or manually on a form furnished by the Board with a $480
biennial renewal fee (A.A.C. R4-23-205 and R4-23-602).

An automated prescription-dispensing kiosk is a mechanical system that: 1) is operated as an
extension of a pharmacy; 2) maintains all transaction information within the pharmacy operating
system; and 3) is separately permitted from the pharmacy. The automated prescription-
dispensing kiosk performs operations that either: 1) accept a prescription or refill order, store
prepackaged or repackaged medications, label and dispense patient-specific prescriptions and
provide counseling on new or refilled prescriptions; or 2) dispense or deliver a prescription or refill
that has been prepared by or on behalf of the pharmacy that oversees the automated prescription-
dispensing kiosk (A.R.S. § 32-1901).

Provisions

Automated Prescription-Dispensing Kiosk (Sec. 1)
1. Requires a person to apply to the Board for a permit to operate a Kiosk.

2. Specifies the Kiosk be operated as an extension of the pharmacy responsible for operating
the Kiosk.

3. Specifies the pharmacy remains responsible for inventory control and billing for the
medications dispensed from the Kiosk.

tL] Prop 105 (45 votes) 1 Prop 108 (40 votes) 0 Emergency (40 votes) 1 Fiscal Note

SB 1373
Initials PRB Page 1 Commerce

Attachment / 7

Directs a person to apply for a separate permit for each Kiosk.

5. Requires, as part of an initial automated prescription-dispensing kiosk permit application, an

10.

11.

12.

agreement between the applicant and the tenant of the intended location of the kiosk to
demonstrate intent fo place the kiosk at such location.

Specifies the agreement to clearly indicate intent to locate the Kiosk at the designated location
in the application and may be any of the following:

a) A letter of intent;

b) An electronic communication; or

c) A formal letter of agreement;

Requires a label on the container of a prescription filled by a Kiosk to identify the address of
the pharmacy responsible for the Kiosk.

Specifies the location of the Kiosk may be on the label affixed to the prescription container or
in patient materials provided with the dispensed medication.

Requires each container filled by the Kiosk to include a prescription number maintained by
the responsible pharmacy that contains information about the prescription dispensed,
including the location of the Kiosk.

Mandates a Kiosk permittee to comply with all provisions requiring registration of a Kiosk.
Miscellaneous

Specifies a Kiosk that is approved by the Board prior to August 3, 2018 and that is required
to obtain a permit is not required to provide information as required by this Act.

Requires the Board to issue a permit to any Kiosk that was approved prior to August 3, 2018
and that has submitted an application permit.

SB 1373

initiais PRB Page 2 Commerce

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

ROLL CALL VOTE

COMMITTEE ON Commerce BILL NO. SB 1373

DATE May 19, 2020 MOTION: D
PASS AYE NAY PRESENT | ABSENT

Biasiucci .N

Butler N

Chavez \y

Epstein V \

Kern V

Meza V

Roberts J

Grantham, Vice-Chairman LV;

Weninger, Chairman Ni

5 | OS J |®&
li_gh A

APPROVED: COMMITTEE SECRETARY

N\A

2

JEFF WENINGER, Chairman

TRAVIS W. GRANTHAM, Vice-Chairman

ATTACHMENT. 2O

Testimony to the House Committee on Commerce
SB 1373 - automated prescription-dispensing kiosks

Submitted by Stuart Goodman, Goodman Schwartz Public Affairs
on dehaif of MedAvail Technologies

1. The Arizona Legisiature authorized the use of automated prescription-dispensing kiosks in
2018.

2. Automated prescription-dispensing kiosks, which are regulated by the Arizona Board of
Pharmacy, allow consumers to have increased access to filling their prescriptions either in
underserved areas or during times in which the pharmacy is closed.

3. This link provides a brief YouTube video describing the operation of a typical automated
prescription-dispensing kiosk: https://www.youtube.corn/watch?v=ojMqJGyBZic.

4. As with any new regulatory program, there are going to be implementation challenges
associated with the deployment of new technology. Over the last two years, approximately 12
kiosks have been permitted by the Pharmacy Board.

5. The permitting process has matured considerably since it started in 2018. As a result, the
automated prescription-dispensing kiosk industry and the Pharmacy Board have agreed to
various requirements in the permitting process that are in the best interest of the public as well as

the industry operating in Arizona.

6. SB 1373 codifies Pharmacy Board policy, guidance and clarifies other aspects of the
permitting process in order to provide both the regulated community as weil as the Pharmacy
Board with a predictable and reliable path to obtaining and issuing permits. Public safety remains
paramount to ail interests involved in the development of SB 1373.

7. The codification of the permit process is focused on establishing predictability and reliability,
regardless of any staff turnover within the industry or Pharmacy Board. Under the existing
situation, if the director or senior staff were to leave the agency, the industry would be potentially
vulnerable to new and random permit requirements. Likewise, as industry personnel change, the
Pharmacy Board would have potential challenges associated with the loss of institutional
knowledge relating to prior industry commitments.

8. In addition to establishing predictability and reliability in the permitting process of
automated prescription-dispensing kiosks, SB 1373 is well-positioned to contribute to the desired
social distancing strategies associated with the Coronavirus. In fact, South Carolina issued the
attached Emergency Order for automated prescription-dispensing kiosks as part of its response
to the Coronavirus.

9. While it is appreciated and respected that each legislative chamber is unique, SB 1373
did pass out of the Senate with a 30-0 vote.

Thank you, in advance, for your consideration.

GOODMAN * SCHWARTZ

PUBLIC AFFAIRS

Attachment 2

fcr South Carolina
KS uemsne, Department of Labor, Licensing and Regulation

Board of Pharmacy
110 Centerview Drive Henry D. McMaster
Post Office Box 11927 Governor
Columbia, SC 29214-1927
Phone: (803) 896-4700 Emi
mily H. Farr
FAX: (803) 896-4596 Wi Fare

PUBLIC HEALTH STATE OF EMERGENCY ORDER 2020-BOP-PH-05

ORDER PROVIDING TEMPORARY AUTHORIZATION
FOR USE OF AUTOMATED PHARMACY PICKUP KIOSKS

WHEREAS, on March 13, 2020, Governor Henry McMaster issued Executive Order No.
2020-08 declaring a public health emergency due to the evolving nature and scope of the public
health threat or other risks posed by COVID-19 and the actual and anticipated impacts associated
with the same;

WHEREAS, Governor McMaster has issued subsequent Executive Orders in which he has
taken additional action to protect the citizens of South Carolina, including Executive Order No.
2020-10, which “authorize[d] and direct{ed] any agency within the undersigned’s Cabinet or any
other department within the Executive Branch, as defined by section 1-30-10 of the South Carolina
Code of Laws, as amended, through its respective director or secretary, to waive or ‘suspend —
provisions of existing regulations prescribing procedures for conduct of state business if strict
compliance with the provisions thereof would in any way prevent, hinder, or delay necessary
action in coping with the emergency,’ [. . .];”

WHEREAS, the Board of Pharmacy requires permittees seeking to utilize new technology
in the practice of pharmacy to appear before its Practice and Technology Committee to present an
overview of the proposed use of new technology;

WHEREAS, the Practice and Technology Committee has previously heard requests for
permittees to utilize automated pharmacy pickup kiosks and locker systems, such as those
produced by iLocalBox and ScriptCenter;

WHEREAS, the Board, acting upon recommendations of the Practice and Technology
Committee, has authorized the use of such automated pickup kiosks, certain to subject conditions;

WHEREAS, the Board finds that the use of automated pickup kiosks will reduce face-to-
face contact between the members of the public and pharmacy personnel and will aid in social
distancing; and

WHEREAS, the Board concludes that the benefit of additional methods of social

distancing, coupled with reports indicating the devices have been used successfully in previously-

approved pilot projects, outweighs the need for the Practice and Technology Committee to
consider the devices at this time;

NOW, THEREFORE, for the reasons set forth above, effective immediately, the Board
hereby temporarily authorizes its permittees to utilize automated pharmacy pickup kiosks without
first appearing before the Practice and Technology Committce or the Board. This Order shall be
limited to the use of models of automated pharmacy pickup kiosks previously approved by the
Board, such as those produced by iLocalBox and ScriptCenter. Permittees electing to utilize these
pickup kiosks must notify the Board Administrator and comply with all applicable provisions of
the Pharmacy Practice Act and all other applicable laws, including any requirements regarding
controlled substances imposed by the Department of Health and Environmental Control
(“DHEC”). Permittees electing to utilize these pickup kiosks must also document any errors
resulting from the use of the pickup kiosks and shall appear before the Board within six months of
the lifting of the declaration of a public health state of emergency. This Order shall remain in
effect for the duration of the declared public health state of emergency, unless otherwise modified,

amended, or rescinded by subsequent order.

IT IS SO ORDERED.
STATE BOARD OF PHARMACY
Ze MADD
March 23, 2020 Eric J. Strauss, Piiarm.D., R.Ph.

Board Chair

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature
Second Regular Session
Senate: GOV DP 6-0-1-0 | 3 Read 30-0-0-0

SB 1510: public contracts; payment methods
Sponsor: Senator Livingston, LD 22
Committee on Commerce

Overview
Adds an assignment of money market account and demand deposit accounts as a substitute for

the retention of pay estimates.

History
Statute requires a construction contract include a provision that 10% of all estimates be retained

as a guarantee for complete performance. In lieu of the required retention and at the option of
the contractor, the agent must accept as a substitute an assignment of time certificates of deposit,
securities of the U.S., this state, counties, municipalities and school districts, or shares of savings
and loan associations in an amount equal to 10% of all estimates. The contractor is entitled to
receive ail interest or income earned by such security as it accrues. (A.R.S. § 34-211).

Agent is defined as: 1) any county, city or town, or officer, board or commission of any county,
city or town, and irrigation, power, electrical, drainage, flood protection and flood control districts,
tax levying public improvement districts and county or city improvement districts; and 2) Includes
any county board of supervisors and any representative authorized by an agent to act as an agent
for the purpose of authorizing necessary change orders to previously awarded contracts in
accordance with guidelines established by rule of the agent, including the board of supervisors.

Contractor is defined as any person who has a contract with an agent. (A.R.S. § 34-101)

Provisions
1. Includes an assignment of money market account and demand deposit accounts as a

substitute for the required retention of pay estimates of a construction contract. (Sec. 1)

2. Clarifies the agent, in a construction contract, may not accept a money market account or
demand deposit account as a substitute unless the accounts are accompanied by a signed
waiver of the bank of any right or power to setoff against either the agent or the contractor.

(Sec. 1)

3. Requires written authorization of the agent before monies deposited in a money market
account or demand deposit account can be released by the financial institution to the

contactor. (Sec. 1)
4. Makes technical changes. (Sec. 1)

[1 Prop 105 (45 votes) {1 Prop 108 (40 votes) © Emergency (40 votes) (Fiscal Note

SB 1510
Initials PRB Page 1
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fourth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. SB 1510
DATE May 19, 2020 MOTION: / ? f
PASS AYE NAY PRESENT | ABSENT
Biasiucci — \ N\
Butler Ky
Chavez
Epstein a
Kern Ng
Meza N
Roberts ~ \y
Grantham, Vice-Chairman IN
Weninger, Chairman NY

APPROVED:

~ JEFF WENINGER, Chairman
TRAVIS W. GRANTHAM, Vice-Chairman

ATTACHMENT. A?

Submitted Testimony
Commerce Committee
May 19, 2020

SB 1510

Chairman Weninger and members of the House Commerce committee,

On behaif of the Arizona Bankers Association, thank you for hearing SB1510. This is a simple yet
important bill that modernizes and adds flexibility to public construction statutes.

By allowing contractors to utilize money market and demand deposit accounts to satisfy retainage
requirements, SB1510 updates public construction statutes to reflect modern practice and codifies how
many Arizona cities are already conducting business. Using money market and demand deposit accounts
for retainage makes it easier for contractors to access the funds but also makes it easier for contractors
to add funds should the contract size increase. Additionally, as retainage accounts are structured like
any escrow account, funds cannot be withdrawn without permission of the contracting jurisdiction.
$B1510 was amended in the Senate to codify this structure in statute.

As amended, SB1510 is supported by the Arizona Bankers Association, the Arizona Chapter of Associated
General Contractors and the League of Arizona Cities and Towns. We respectfully ask you to vote yes on

$B1510.
Thank you,
Steven M. Killian

Director of Government Relations
Arizona Bankers Association

Attachment 24

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature
Second Regular Session
Senate: FIN DP 9-0-1-0 [ 3 Read 30-0-0-0

SB 1397: insurance; preexisting condition exclusions; prohibition
Sponsor: Senator Mesnard, LD 17
Committee on Commerce

Overview
Conditionally requires health care insurers to provide guaranteed availability of individual health

plan-coverage to eligible individuals.

History
The Patient Protections and Affordable Care Act (PPACA) is intended to expand access to

insurance, increase consumer protections, emphasize prevention and wellness, improve
quality and system performance, expand the health workforce, and curb rising health care
costs (NCSL Summary Brief).

On December 14, 2018, the U.S. District Court for the Northern District of Texas declared the

individual mandate of the ACA unconstitutional and the remaining provisions of the ACA
inseverable from the mandate and thus invalid (Texas v. Azar).

Provisions
; Individual Health Plans (Sec. 1)

4. Requires health care insurers who offer individual health plans fo provide guaranteed
availability of coverage to eligible individuals who enroll in health insurance coverage.

2. Prohibits health care insurers who offer individual health plans from:
a) Declining to offer that coverage to, or deny enrollment of, that individual; and
b) Imposing any preexisting condition exclusions with respect to the issuance, renewal or
scope of benefits.

3. Permits health care insurers to restrict enrollment in individual health plans to open enrollment
and special enrollment periods to the extent the periods are not inconsistent with applicable
federal law.

4. Requires the Director of the Arizona Department of Insurance and Financial Institutions to
adopt rules establishing minimum open enrollment dates and criteria for special enrollment
periods.

5. Exempts grandfathered health plan coverage and limited benefit coverage.

. Defines grandfathered health plan coverage, health care insurer, individual health plan,
preexisting condition exclusion and transitional health plan.

Miscellaneous (Sec. 2)

7. Conditionally enacts this Act based on a court of competent jurisdiction ruling that the PPACA
is unconstitutional and the judgement of that ruling becomes final and definitive by June 30,
2023.

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

SB 1397
Initials PRB Page 4 Cammarca

Attachment 2 5
8.

Instructs the Attorney General, by August 1, 2023 to notify the Director of the Arizona
Legislative Council:

a) Of the date on which the condition was met; or

b) That the condition was not met.

SB 1397

Initials PRB Page 2 Commerce

Fifty-fourth Legislature Commerce
Second Regular Session S.B. 1397

PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO S.B. 1397

(Reference to Senate engrossed bill)

Page 1, between lines 14 and 15, insert:
"3. DISCRIMINATE IN THE SETTING OF PREMIUMS OR RATES BASED ON

PREEXISTING CONDITIONS PURSUANT TO SECTION 20-448, SUBSECTION B."
Line 24, after "2." insert "SHORT-TERM LIMITED DURATION AND”

Amend title to conform

JEFF WENINGER

1397WENINGER
03/13/2020
04:08 PM

C: pp

Attachment 2.6

: Adopted

‘Failed — Wilhar
| Not Offered X_ Analyst
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fourth Legislature - Second Regular Session

ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. SB 1397
DATE May 19, 2020 MOTION: D y
PASS AYE NAY PRESENT | ABSENT
Biasiucci \-
Butler VV
Chavez
Epstein q \
Kern \Y \
Meza V
Roberts Na
Grantham, Vice-Chairman Wy
Weninger, Chairman N\

APPROVED:

JEFF WENINGER, Chairman
TRAVIS W. GRANTHAM, Vice-Chairman

bith ~

COMMITTEE GGERETARY

ATTACHMENT. 47

Public comments by Kimberly Dorris, Scottsdale, AZ
kkdorris@cox.net

House Commerce Committee
Tuesday, May 19%, 3:00 p.m.

Mr. Chairman, Committee Members:

My name is Kimberly Dorris. | am for pre-existing condition protections, but | am against SB
1397, because it offers protections in name only, giving insurance companies unlimited
opportunity to deny coverage when it is most needed. | have an autojmmune condition
called Graves’ disease. Before the Affordable Care Act (or ACA) went into effect, | personally
experienced discrimination from insurers due to my pre-existing condition. I now buy my
insurance on the Arizona individual market with NO subsidy, but I do rely on the ACA’s pre-
existing condition protections.

SB 1397 is not an adequate replacement for the ACA’s robust patient protections,
particularly in the midst of the COVID-19 pandemic.

Although SB 1397 does prohibit insurers from denying a policy outright or imposing pre-
existing condition exclusions, protecting people with pre-existing conditions isn’t like
tapping a button on your phone to activate an electronic security perimeter around your
home. A better analogy would be protecting your home from an imminent flood, which
requires laying down individual sandbags to form a protective barrier. The protective
barrier that is the ACA was constructed using several interdependent policy components. If
you skimp on sandbags while floodwaters are rising, you put your home at risk. If you skimp
on one or more of the ACA’s policy components, you put Arizonans at risk.

SB 1397 fails to lay down a Community Rating sandbag or a Cost Sharing sandbag, which
means Arizonans with pre-existing conditions could be charged stratospheric premiums,
copays, co-insurance, and deductibles.

The bill also fails to address the Essential Health Benefits (EHBs) mandated by the ACA.
That’s ten more missing sandbags, some of which are services frequently used by patients
living with chronic illnesses: lab tests, specialist visits, medications, hospitalization, and
emergency care. There are reports that that COVID-19 survivors are suffering from longer-
term issues such as reduced lung capacity, cardiac complications, and kidney failure. Should
a COVID-19 survivor need care from a pulmonary specialist, a cardiologist, or a nephrologist,
the ACA will protect them - but SB 1397 won’t. And ifa specialist visit or other service is not
covered by your insurer — but you end up needing it - it’s a triple whammy. You'll have to
pay out of pocket, the provider isn’t obligated to honor your insurer’s discount, and the costs
won't go towards your deductible.

Finally, SB 1397 fails to lay down two especially critical sandbags: annual and lifetime caps.
This means that Arizonans who require expensive medications or other treatment could
have their access to care cut off mid-year.

4

Attachment 28

Rising floodwaters will continually test even the most carefully constructed barrier, trickling
in through small gaps and points of weakness. Likewise, insurers will find and exploit
vulnerabilities in health care policy. Even with the ACA’s fairly robust protections, patients
and caregivers are still battling issues like step therapy, surprise billing, non-medical
switching, and retrospective denials.

If the ACA is dismantled, the return of medical underwriting would slam into vulnerable
Arizonans like a powerful storm surge. SB 1397 does say that insurers can’t use the
information obtained during medical underwriting to deny a policy outright or to exclude
coverage for a specific condition. However, without critical policy sandbags like Community
Rating, Cost Sharing, Essential Health Benefits, and bans on Annual/Lifetime caps, SB 1397
will invite a flood of nefarious practices from insurance companies, all designed to deny
coverage to Arizonans just when they need it most.

To wrap up with the flood analogy, employer plans and state plans exist at a higher elevation
than the individual market. The individual market where I buy insurance is the low-lying
ground that would be most devastated if the ACA and its critical protections are dismantled.
So I'll leave each committee member with this question: do you believe that SB 1397's
protections are robust enough that you would commit to giving up your state plan and
joining me on the individual market in 2021? If the answer is “no”, then please go back to the
drawing board with this bill to ensure that your constituents have the same protections that
you do,

Thank you. As | am not able to deliver this testimony in person, I can be reached at
kkdorris@cox.net with any questions.

Submitted Testimony

Commetce Comm}
SB \3907 Committee

May 19, 2020
Dear Commerce Committee:

| am writing to address SB 1397 Pre-existing Conditions bill. The bill is a contingency plan should the
Affordable Care Act (ACA) be declared unconstitutional. It does prohibit insurers from denying a policy
outright or imposing pre-existing condition exclusions. While the bill is well intentioned and a start at
addressing the pre-existing conditions issue, it falls far short of truly protecting Arizonans with pre-existing
conditions. It requires a policy covering pre-existing conditions to exist, but does not put any parameters
in as to the cost to the patient, what benefits it offers, or if there are lifetime/annual caps.

SB 1397 fails to address community rating or cost sharing, which means Arizonans could be charged
‘extremely high premiums, copays, co-insurance, and deductibles. Without parameters as to the cost of
the policy, insurers are able to charge exorbitant amounts, defeating the purpose of protecting Arizonans
with pre-existing conditions and making healthcare affordable. Without addressing the cost, patients will
end up having to go to the hospital for care once the condition becomes acute, costing the taxpayer and
state much more than if the patient could have proactively managed their health through an affordable,
comprehensive heaith care policy.

The bill also fails to address what benefits would be offered through these policies. Patients with chronic
care conditions need access to health services to adequately manage their pre-existing condition, among
other medical care situations that may arise. Some services that are frequently used by patients living
with chronic illnesses: lab tests, specialist visits, medications, hospitalization, and emergency care are
paramount in managing their health to mitigate acute care needs. SB 1397 does not address what
benefits should be offered, allowing the insurers to offer very few benefits, while complying with this bill
that they have offered a policy covering pre-existing conditions. If a specific service is not covered by the
insurer, but it is critical for the patient’s health, the patient will have to pay out of pocket, which defeats the
purpose of having a policy that covers pre-existing conditions.

Finally, SB 1397 fails to address annual and lifetime caps. This means that Arizonans who require
expensive medications or other treatment could have their access to care cut off mid-year. Arizonans with
life-threatening conditions, like my son with hemophilia, require expensive medications that are literally life
changing. It is the difference between living in constant pain, crippled and on disability, to living a
productive, healthy life as a contributing Arizonan who can work, pay taxes and contribute to Arizona’s
future.

While SB 1397 is intended to provide a safety net should the ACA fail, it does not go far enough to ensure
that the over 4.2 million Arizonans living with pre-existing conditions will get the benefits they so
desperately need fo adequately manage their health at an affordable cost. Without those parameters

included, SB 1397 is just a talking point for state officials to say we have something in place to address
pre-existing conditions, when it fails to adequately do so.

Sincerely,

Cindy Komar

Attachment 29

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