Assigned to JUD                                                                                                                AS PASSED BY COW

 


 

 

 


ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

 

AMENDED

FACT SHEET FOR H.B. 2146

 

contracts; licensure requirements; waiver; applicability

(NOW: contracts; licensure requirements; exemption)

Purpose

            Exempts a person who is a party to a contract between private parties from specified state laws relating to licensure, certification, registration or other authorization to act, if certain conditions are met.

Background

            A non-health profession or occupation must not be regulated except to protect the public interest. A profession or occupation must be regulated by the state only if: 1) an unregulated practice can clearly harm or endanger the public health, safety or welfare; 2) the public benefit of the regulation clearly exceeds the costs imposed on consumers, businesses and individuals; 3) the public needs and can foreseeably benefit from an assurance of initial and continuing professional ability; and 4) private certification or other alternatives cannot effectively protect the public (A.R.S. § 32-4401).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1.      Exempts, for purposes of licensure, certification, registration or other authorization to act, a person from Arizona Revised Statutes that govern:

a)      Banks and Financial Institutions (Title 6), except:

i.        Mortgage Brokers, Mortgage Bankers and Loan Originators (Chapter 9);

ii.      Balloon Payments Prohibited; Applicability; Exemptions (A.R.S. § 6-114);

iii.    Finance Charges (A.R.S. § 6-632);

iv.    Other Allowable Fees; Annual Reporting (A.R.S. § 6-635); and

v.      Term; Payments (A.R.S. § 6-637);

b)      Cities and Towns (Title 9);

c)      Corporations and Associations (Title 10);

d)      Counties (Title 11);

e)      Labor (Title 23);

f)       the following chapters of Professions and Occupations (Title 32);

i.        Collection Agencies (Chapter 9);

ii.      Private Postsecondary Education (Chapter 30); and

iii.    Art Therapists (Chapter 46); and

g)      Trade and Commerce (Title 44), except sales finance companies that are licensed pursuant to Chapter 2.1 and parties subject to telephone solicitation laws.

2.      Conditions the exemption from state law relating to licensure, certification, registration or other authorization to act on all of the following requirements:

a)      the person is a party to a contract between two or more private parties;

b)      the subject of the contract is substantially delivered by electronic means;

c)      the contract specifies the laws from which the person is exempt;

d)      the subject of the contract is lawful;

e)      the exemption does not materially affect a third party;

f)       the exemption does not clearly harm or damage public health or safety; and

g)      the subject of the contract does not exceed $6,000 per transaction between any two parties and $150,000 in total aggregate profit in the previous calendar year for all parties related to the services provided in the contract.

3.      Exempts a person from the offense of failing to procure or exhibit a business license, if the person is otherwise exempt from business license requirements.

4.      Allows a person, when notified by a state agency (agency) that the person is in violation of a state law relating to licensure, certification, registration or other authorization to act, to be able to do one of the following within six months of notification:

a)      to become licensed, certified or registered or receive another authorization to act; or

b)      to amend the contract relating to the applicable law in order for the parties to agree to be exempt from the law.

5.      Allows a person, until July 1 of the following year, if the annual profits related to the services provided in the contract exceed $150,000, to do one of the following before an agency may commence or take disciplinary action against a party to the contract:

a)      amend the contract; or

b)      become licensed, certified or registered or receive another authority to act.

6.      Prohibits an agency from commencing or taking disciplinary action against a party in the:

a)      six-month period in which the party is working to either become licensed, certified or registered or amend the contract to exempt the party from the state law; or

b)      time-period after the party has submitted an application to become licensed, certified or registered and before the agency has approved or denied the application.

7.      Deems a violation of the exemption from licensure requirements statute as an unlawful practice under the Consumer Fraud Act and allows the Attorney General to investigate and take appropriate action as prescribed by statute.

8.      Makes technical and conforming changes.

9.      Becomes effective on the general effective date.

Amendments Adopted by Committee of the Whole

1.      Exempts persons from specified licensure, certification, registration and authorization to act laws, subject to specific conditions, rather than allowing the parties to contract to waive those laws and specifies that the parties must agree to be exempt by contract.

2.      Removes city, town and county laws from being able to be waived by parties.

3.      Decreases, from $250,000 to $150,000, the total aggregate profit threshold that the parties may not exceed for the services provided in the contract in order to be exempt from specified laws.

4.      Specifies that the subject of the contract may not exceed $6,000 per transaction, rather than per year, in order for the parties to be exempt from specified laws.

5.      Exempts a person from the offense of failing to procure or exhibit a business license, if the person is otherwise exempt from business license requirements.

6.      Allows a person, when notified by an agency that the person is in violation of a state law relating to licensure, certification, registration or other authorization to act, to be able to do one of the following within six months of notification:

a)      to become licensed, certified or registered or receive another authorization to act; or

b)      to amend the contract relating to the applicable law in order for the parties to agree to be exempt from the law.

7.      Allows a person, until July 1 of the following year, if the annual profits related to the services provided in the contract exceed $150,000, to do one of the following before an agency may commence or take disciplinary action against a party to the contract:

a)      amend the contract; or

b)      become licensed, certified or registered or receive another authority to act.

8.      Prevents an agency from commencing or taking disciplinary action against a party during specified time periods.

9.      Deems a violation of the exemption from licensure requirements statute as an unlawful practice under the Consumer Fraud Act and allows the Attorney General to investigate and take appropriate action as prescribed by statute.

10.  Makes technical and conforming changes.

House Action                                                           Senate Action

COM               2/12/19      DPA     5-4-0-0              JUD                 3/21/19      DP     4-3-0

RA                  2/18/19      DPA     4-3-0-0

3rd Read          2/26/19                    32-28-0

Prepared by Senate Research

May 24, 2019

JA/RC/kja