Week #7 (Crossover week): 55th Legislature, 1st Session
House Appropriations -- Charles Lucking
Feb 22, 2021: House Appropriations Committee #1
HB 2005 - Amendment places prohibitions on digital distribution platforms - Regina Cobb’s bill. She seems super-nervous while presenting the bill.
- Coalition for app fairness in favor: representing developers - says amendment provides payment choices for consumers and incentivizes businesses to come to AZ.
- ACT -trade organization employing 100k Arizonans. Opposed - benefits big platforms. This restricts access to global market, and de-streamlines function, and destroys consumer trust.
- Apple chief compliance officer - 83% of AZ developers pay NO fees, and almost all that do pay only 15%. Prior to the App Store development, developers paid 70%. App Store has caused an explosion in innovation
- VP Gen Counsel of NevChoice etc. ALEC opposes this legislation.
- Coalition of App Fairness (in favor) - it protects developers and is constitutional
- A developer - 30% Apple tax is exorbitant and is not universally applied and they get to choose who pays and who doesn’t, and they change the rules all the time.
- Discussion and votes:
Friese: What options are available now to make transactions and still avoid the platform fees? A: for in-app purchases there is no option for how you pay for it, it has to be through app store. You could go to Spotify or other website and sign up directly, but part of the terms that Apple implements, there can be no direction to another website for purchase.
Cobb: If I need a refund how do I get it? A: Relationship with apple or google. Developer cannot refund because all payment info goes to apple/google. Can’t give teachers discounts either. You CAN get a refund, you just can’t get the refund using the in-app purchase system. Apple CCO says a very small percentage of purchases actually go through app store.
Aaron: Does Apple have the total dollar amount they have received from commissions over the past year? Doesn’t have the info. Vast majority of transactions take place outside the app. Developer guy says 77% of his customers buy through the app.
There isn’t parity in payment - huge tangible goods companies pay $99 per year, but digital pays 30% or if under 1million downloads, 15% of revenue? But 83% of digital sales on app store pay no fee.
Cobb: Bill says transparency - let consumer know and let consumer choose a different platform.
Plenty of constitutional questions.
Chavez - many concerns regarding the legislature meddling with private entities/we’ll be seeing a void in security and an unstable market - NAY
Fernandez - sensitive to developers - I like having a single central place where my information is and I think this is a question for all sixty members and stakeholders rather than this committee. NAY
Hoffman: Congress is ineffective and completely tied up and twisted in knots and state legislatures have a roll in protecting our citizens: YES (no mask)
Nguyen: I’m always concerned with the free market and competition: YES
Osborne: There are businesses that feel they are dealing with an unfair business environment - that’s a free market, and business people can change the world and that’s frustrating - I’d like to thank Google and Apple - the world is at our fingertips because of what they do for us, I truly appreciate the creativity, but sometimes it’s difficult for smaller voices to be heard in such a large universe - I don’t like strikers, or the fact that this didn’t get its normal legislative review - I will be an Aye here - YES
Schweibert: Also want to thank apple and google for the innovation they have offered, but ultimately it appears to me not to be a David and Goliath battle but rather between tech giants, and I feel contrary to other representatives this belongs at national level, these are outsized players and we need a decision at the federal level rather than a state - NO
Udall: Background is in computer science, I see this as an issue between private companies and I see it as reasonable for a company that develops something like this to charge a fee for something that only exists on this (iPhone) - when we talk about security, we’re not just talking about the payment but also the security on the device itself - it’s reasonable to charge a higher fee for something that only exists because of the platform - NO
Kavanaugh: No - needs more study/work
Cobb: congress can’t do anything and they’ve kicked it to the states, so it’s our position to take this on. A judge? Wait for the lawsuit in CA? Shouldn’t apply to AZ. Parity in insurance in health? I used this as an argument - there IS parity here. 60 members involved? That’s what this is! YES
Pass: 7 ayes 6 nays
HB2167 - establishes office of criminal justice ombudsman, and correctional oversight committee, and $1.5m annually. We’ve never had an oversight committee in the past. - this is for all state facilities including contracted. Good gov’t bill for oversight, compares very favorably budget-wise with other states.
Why does it only go through ’26 but program sunsets in ’31. Want to make sure we use correct data. We will only know what we can fix later. Maybe there should either be funding until ’31 or pilot until ’26.
Kavanaugh - tremendous amount of overreach on this bill - this bill includes advocacy. (he’s allowed to comment on bill, but others aren’t)
Friese: We need citizen oversight, not internal oversight, this is a human rights issue. Human rights issue in AZ, many things have gone astray in corrections and this would have helped us to address these issues - will bring corrections into a better place. Yes
Nguyen: Emotionally I’m always 100% attached to victims and not criminals, NO
Cobb: Advocacy and infrastructure needs to come out, guardrails on complaints need to be done, and looking at independent person (private industry?!) - YES, but I will be a no on the floor if these aren’t taken care of.
PASS: 10 ayes 3 nays
HB 2169 - $3m to office of tourism to promote dude ranches - reduces $3m to 900k. AZ Dude Ranch Association - dude ranch industry is suffering - there are 80 in AZ, and we rank just beneath NY. ROI on a modest investment will be $25m to $30m in rural communities.
Nutt: ditto Lieberman Yes
Pass: 8 ayes 5 nays
HB 2179 allows base cost per square foot amended, and oversight
Udall sponsors - $ when new schools don’t have enough $ to build a school - if they need more than calculate sf, JccR could raise amount, on a case by case basis
Hoffman: too broad - Nay
Kavanaugh - nay
Cobb - yes but needs a lot of work
Pass: 9 ayes 3 nays
HB2489 $24m in ’22 to housing trust fund - reduces appropriation to $5m
Pass: 12 ayes 1 nay
HB 2498: Strike anything under Lieberman - grants for clean energy $5m in ’22 and exempted from lapsing.
Pass: 7 ayes 6 nays
HB 2754: Memo of understanding between a school and School Resource Officer (cop), training courses, $173k and $260k in ’22. This trains SRO officers to adapt to school and be a resource to campuses
Pass 12 ayes 1 present
Feb. 22, 2021: House Appropriations (SPECIAL) Committee #2
HB 2001 - credit for donation of site: tax credit for school dist or charter for school site bringing tax credit forward for school districts, used for encouraging donations of land for schools, this would encourage donations of money for construction costs of schools. CHARTER SCHOOL CAN SELL PROPERTY! There is a lien on tax credit. Charter schools may use $ for ANYTHING, public schools must use $ for capital improvements. This was a tax credit that expired in 2019.
Pass: 10 ayes 2 nays 1 present
HB 2099: Changes study committee on missing and murdered indigenous women to “people”- appropriates $40k from AG’s office. Passes unanimously
HB2282: Lieberman bill: establish small bus grant fund for covid-19 pandemic from commerce auth for $5 for counties less than 900k people, also appropriates 20m in ’22, and renames the small business relief fund. Rewards capped at 5k and application dates of dec. 21, clarifies who is and isn’t eligible. Passes unanimously
HB2037 Kavanugh bill: special session to call state of emergency for pandemic emergencies - prohibits municipalities from declaring state of emergencies if state legislates state of emergencies. Only applies to pandemics. Legislature can vote remotely. Lower threshold from 2/3 to 50% to vote selves back in. 14 days after governor declares emergency, the legislature immediately comes back in. 60% vote if governor challenges. Provisions have to be approved by voters.
Hoffman: Yes (NY/Cuomo!)
Lieberman: one person responsible for decisions - something needs to alter state of emergency but this isn’t it: no
Pass: 8 ayes 5 nays