ARIZONA STATE SENATE
Phoenix, Arizona
commerce and
economic development commission
Purpose
Makes changes to the statutes relating to the Commerce and Economic Development Commission (CEDC) with respect to membership and training as well as project requirements for CEDC assistance. Repeals the statutes relating to the CEDC’s advancement of capital markets in this state.
Background
The CEDC was established in 1989 as the state’s economic policy and planning board. Currently, the CEDC consists of five members with at least four members constituting a quorum needed to conduct business. Members are required to have training and experience in finance, international trade, business management, environment, economics or programs designed to encourage the location, expansion and retention of businesses within the state. H.B. 2274 makes a number of modifications to the CEDC, including increasing the total membership to eight, with five members constituting a quorum and replacing the requirement that a member have training or experience in programs that encourage business location, retention and expansion with training or experience in economic development.
The CEDC manages a revolving loan fund to stimulate development projects in areas such as Arizona’s workforce, community projects and the diversification of Arizona’s economy. According to the Department of Commerce (DOC), the fund will have a FY 2001-2002 balance of approximately $1,400,000 (based on projected lottery revenues). Current statute directs the CEDC to transfer $500,000 every January 2nd to the securities regulatory and enforcement fund in part for the management and regulation of a securities exchange (A.R.S. 44-2054). H.B. 2274 repeals the CEDC’s authority to create and manage a securities exchange and revises the method by which monies are transferred from the revolving fund to the securities regulatory and enforcement fund.
There is no anticipated fiscal impact to the state general fund associated with this measure.
Provisions
1. Eliminates the CEDC’s authority to administer the small business enterprise and research programs and to provide financial assistance relating to the programs.
2. Requires a CEDC member to have training and experience in economic development rather than training and experience in programs designed to encourage the location, expansion and retention of businesses in this state.
3. Expands, from five to eight, the CEDC membership and increases, from four to five, the number of members needed to achieve a quorum. Becomes effective January 1, 2003.
4. Clarifies that the CEDC’s provision of financial assistance to businesses locating or expanding within the state can occur either directly or indirectly.
5. Clarifies that the CEDC is required to establish business incentives and assistance for use by state agencies for the retention, expansion or location of businesses in the state where the combined assistance provided by this state is more than $1 million.
6. Differentiates the requirements for projects focused on business location or expansion and projects focused on business retention.
7. Allows the CEDC the option of reviewing credibly prepared cost benefit analyses before providing assistance. (Current law requires the CEDC to conduct the analyses.)
8. Clarifies that the CEDC may waive criteria for assistance that are not met by a business or project if the state assistance is in excess of $1 million.
9. Stipulates that performance standards for businesses or projects receiving assistance must be met within the first five years after assistance is received rather than the first five years after a business facility is occupied.
10. Clarifies that monies disbursed from the CEDC fund for assistance are either directly or indirectly awarded to small businesses or projects located in rural or economically disadvantaged areas of this state.
11. Removes the CEDC’s ability to make loans to private entities for establishing a securities exchange or funding an operating deficit.
12. Removes the exemption for monies transferred to the securities regulatory and enforcement fund from the CEDC’s ability for use in providing financial assistance.
13. Repeals the statutes relating to the CEDC’s advancement of capital markets in this state.
14. Requires the first $500,000 deposited in the CEDC fund each fiscal year from notice filing fees paid by open-end companies to be transferred to the securities regulatory and enforcement fund.
15. Makes technical and conforming changes.
16. Provides for a general effective date, unless otherwise noted.
CED 3/25/02 DPA 9-0-0-1
3rd Read 4/08/02 46-0-14-0
Prepared by Senate Staff
April 15, 2002