SB 1487 and Related Litigation 2017 ACAA Summer Meeting Presented by: Mike Rankin, Tucson City Attorney Brad Holm, Phoenix City Attorney

Summary of SB 1487 – AG investigation AG to investigate any “ordinance, regulation, order or other official action adopted or taken” by a governing body of a county, city or town” upon request of a legislator that alleges the action violates AZ law or Constitution; AG shall make a report of findings and conclusions within 30 days after legislator request, and provide report to Governor, Senate President, House Speaker, Sec of State, and requesting legislator

SB 1487 – AG’s report AG can make 1 of 3 findings: No violation (no further action required) City/Town/County action does violate AZ law Notice to c/t/c to resolve w/in 30 days If no cure, AG directs Treasurer to withhold and redistribute SSR C/T/C action may violate AZ law: AG shall file special action in AZ Supreme Court Court shall give case precedence over all other cases Court shall require C/T/C to post a bond equal to SSR paid in the prior 6 months

SB 1487 – If AG finds “Does Violate” C/T/C has 30 days to resolve by repeal or otherwise If not resolved, Treasurer withholds SSR: SSR includes Urban Revenue Sharing (income tax), TPT revenues. VLT, HURF (gas tax) not implicated Treasurer is not to withhold amounts that C/T/C “certifies” as being necessary to make any deposits or payments on debt service on bonds or other long-term obligations that were issued or incurred before the violation If later resolved, AG directs Treasurer to “restore” the distribution of SSR

SB 1487 – if AG finds “May Violate” AG “shall file” SA in Supreme Court No requirement that Court take jurisdiction Does require “precedence” over other cases Court “shall require” bond 6 months’ SSR No description of form of bond, how posted, when posted, what happens if C/T/C fails to post, or what happens to bond upon disposition of case by Supremes

SB 1487 – AG investigations to date Legislator requests and AG reports are online AG letter (not investigation) in 8/16 concluding SB 1487 applies to local actions taken prior to the effective date of SB 1487 08/16 – Snowflake investigation 10/16 – Tucson investigation Although only 2 investigations, more threats

SB 1487 – Snowflake Investigation Submitted by Rep. Boyer, but written by law firm (StateCraft) that was involved in the local dispute Local action was council-approved SUP and Facilities Agt for MMJ cultivation facility 5 allegations: OML violation Zoning notice procedures “Contract zoning” Right of referendum Public records access

SB 1487 – Snowflake AG Report AG rejected the 5 asserted violations, b/c they require reviewing factual questions relating to compliance with purely procedural obligations that are not incorporated in an ultimate, substantive action by the town BUT, found the Facilities Agt “may violate” AZ law by including an ad hoc tax or improper exacation. Ultimately, Snowflake amended agreement, dealt with zoning notice issues, and AG took no further action

SB 1487 – Tucson Investigation Request by Rep. Finchem alleging Tucson Code requiring destruction of city-acquired firearms violates state laws that prohibit destruction, require sale to authorized dealers City response: Charter city authority to dispose of property as it sees fit, without interference by Legislature Constitutional authority to engage in business/proprietary acts in same manner as private person SB 1487 is plainly unconstitutional

SB 1487 – AG Report re: Tucson AG declines to address constitutionality of 1487 Finds Tucson Code “may violate” AZ statutes Code conflicts with AZ statutes Disposition of firearms “likely not” a purely local concern Case law re: Charter authority to dispose of property limited to real property City not making a business decision, but a political one But: City might be right about preemption issue, so conclusion is “may violate” state law

SB 1487 – Litigation: AG Special Action After AG report, Tucson chose not to repeal its Code; AG filed Special Action in Supremes In SA, AG switched from “may violate” to “does violate” and asserted: Issue is of statewide concern (right to bear arms; promotes public safety; regulate conduct of police; but dropped issue of city revenues) So, state law preempts Asked for declaratory relief; atty fees; retain jurisdiction to direct Treasurer to withhold SSR. No bond requested

SB 1487 – Litigation: Superior Court Tucson filed action in Superior Court 6 days later: Declaratory, injunctive, and mandamus relief League, Phx, Yuma as interveners On stay while Supremes have the case SB 1487 is unconstitutional Art. 13, Sec. 2; Violates taxpayer rights (due process, equal protection) Separation of Powers Advisory Opinions Delegation of Legislative Appropriation Authority Others

SB 1487 – Supreme Court Extensive Briefing (City, AG, Amici) Briefs, supplemental briefs, letter briefs, responses and replies In directing supplemental briefs, Court asked questions re: Should Court address constitutionality of 1487 first? Jurisdiction Preemption/Home Rule Constitutionality of 41-194.01(A) [AG investigation] and (B)(2) [Special action if “may violate”] Bond requirement Are provisions of SB 1487 severable? Can Court order Treasurer to withhold SSR as a remedy? Oral argument 2/28/17 Heard by expanded Court No decision yet

SB 1487 Litigation – What’s at stake Validity of Tucson firearm ordinance What is the test for Charter authority v. preemption: does Charter only control for a “purely” local issue, or is it a balancing test to see if local or statewide interest is paramount? Validity of SB 1487, and the use of threat of revocation of SSR to compel cities, towns and counties to act a certain way More 1487-like bills on the way

Questions? mike.rankin@tucsonaz.gov brad.holm@phoenix.gov