Assigned to RAGE                                                                                                                            AS VETOED

ARIZONA STATE SENATE

Fifty-Seventh Legislature, First Regular Session

VETOED

FACT SHEET FOR S.B. 1087

residential contractor assessments; recovery fund

Purpose

Reduces the maximum assessment paid by a residential contractor every two years and prescribes adjustments to the assessment amount based on the total balance of the Residential Contractors' Recovery Fund (Fund) at the end of a fiscal year.

Background

The Fund is administered by the Registrar of Contractors (ROC) for the benefit of eligible, damaged homeowners to recover losses or restore property if harmed by a licensed residential contractor that fails to properly construct or improve a residential structure. The maximum individual award from the Fund is $30,000. Each residential contractor pays a biennial license fee and a separate biennial assessment of up to $600. By administrative rule, the ROC sets the biennial assessment at $370 for initial licensure and $270 for license renewal. The biennial assessment is deposited in the Fund (A.R.S. §§ 32-1126; 32-1132; and 32-1132.01; A.A.C. R4-9-130).

The Joint Legislative Budget Committee Baseline estimates a FY 2025 year-end balance of $25,740,300 for the Fund (JLBC Baseline).

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

Provisions

1. Reduces the biennial assessment from a maximum of $600 to an amount of $370 for initial licensure and an amount of $270 for license renewal.

2. Requires the ROC, if the Fund balance exceeds $15,000,000 at the end of a fiscal year, to reduce the biennial assessments by 50 percent only until the Fund balance is less than $10,000,000 at the end of a subsequent fiscal year.

3.  Makes technical and conforming changes.

4. Becomes effective on the general effective date.

Governor's Veto Message

           The Governor indicates in her veto message that S.B. 1087 harms Arizona's ability to assist homeowners who have been harmed or defrauded by contractors and states that the better approach for homeowners is to increase the limit on claims.

Senate Action House Action

RAGE             1/29/25      DP       4-3-0                   COM               3/25/25      DP              5-3-0-2

3^rd Read          2/24/25                  16-14-0               3^rd Read          4/15/25                          32-20-8

Vetoed by the Governor 4/18/25

Prepared by Senate Research

April 24, 2025

JT/JRM/ci