In this work session with the City Council, staff will provide a brief overview of SB1598 - the Regulatory Bill of Rights - that was approved by the Arizona Legislature in the 2011 legislative session. A description of how the Bill will be implemented will be provided with specific reference to permits and approval processes administered within the Community Development Division.

SB1598 was introduced to the Arizona legislature by the Arizona sand and gravel industry who were displeased with what it felt were unreasonable enforcement and permitting delays and irregularities on the part of a Valley city. The Bill's intent is to ensure fair and open regulation by all Arizona municipalities (i.e. cities and counties). The Bill essentially includes two principal parts, one that establishes standards and rules for inspections with an effective date of June 30, 2012, and the second being the Regulatory Bill of Rights which establishes rules for licensing time frames and compliance with an effective date of December 31, 2012. Also included in the bill is a requirement specific to a municipal General Plan (Regional Plan) regarding the need to map aggregates within a city or county.

A detailed overview of SB1598 is provided in the attachment, "Overview of SB1598 - Regulatory Bill of Rights", and only a brief summary of key provisions is reproduced in this report. The overview includes the following information: 

• The advantages/benefits of SB1598
• The requirements for licensing time frames - administrative and substantive review
• License application process
• Directory of documents
• Complaints and clarification of interpretations
• Exemptions
• Implementation ideas and notes
• Summary of implications of SB1598.

As noted in the attached summary, some aspects of SB1598 are sensible and will ensure fair and open regulation by Arizona cities and counties. For example, within the inspections portion of the bill, rules are established to ensure that a person is entitled to receive information and notice regarding inspections, and that all inspectors must have proper photo identification. Within the Regulatory Bill of Rights portion of the bill, there are also common sense provisions, including requirements that:

• Municipalities must only base an approval decision (a license and licensing - see the definition below) on an established rule, ordinance, or code.
• Municipalities must avoid duplication of codes that do not enhance regulatory clarity, and shall avoid dual permitting as much as possible.
• Licenses may be approved or denied within a predetermined period of time.
• A person is entitled to written notice of denial of a license application including a reference to the applicable code section on which the denial is based.
• A person is entitled to receive information on the license application process when making an application.
• A directory of all municipal codes must be provided on the municipal website, and all municipal codes must be available for inspection.

Note that for the purposes of the bill, a "license" is defined very broadly, and it includes "the whole or part of any municipal permit, certificate, approval, registration, charter, or similar form of permission required by law."

The attachment clearly describes the bill's requirements for all municipalities to establish licensing time frames, including an "Administrative Review" time frame in which an application for a license (i.e. a permit or approval) must be reviewed for completeness, and a "Substantive Review" time frame in which the license must be reviewed for compliance with applicable codes. Both of these time frames, which together are the "Overall" time frame must be provided to an applicant and adhered to by the municipality.

As explained in the attachment, all City Divisions that are responsible for the approval of a license are required to comply with the requirements of SB1598. This includes, for example, Business Licenses issued by the Tax and Licensing Section, Special Event Permits issued by the Recreation Section, and the many permits and approvals granted within the Community Development Division, including Sign Permits, Temporary Use Permits, Site Plan Review Approvals, Right-of-Way Permits, etc.

To assist the City Council understanding of how SB1598 would apply to a typical review process, attached is a diagram that illustrates the existing and proposed review process for a major project for which impact analyses are required through the IDS (Inter Divisional Staff) review process. This would apply, for example, to the review of a new Walmart or large big-box store, or a large apartment complex. These are typically reviewed in about seven weeks (i.e. 35 working days), but depending on the calendar and the number of days in a month, these can be slightly shorter or slightly longer, 33 or 37 days respectively. The illustrations represent typical worst case scenarios. A brief explanation of these illustrations is provided below.

1. At the top of the first page is a simple illustration under the heading "Typical Overall Process - Major Project w/ Impact Analyses (IDS 7-Week Review)" that shows the steps required in the review of a major project from the optional pre-application meeting, through concept review, site plan review, and finally review and approval of grading and building permits so that construction can commence. Note that SB1598 does not apply to the pre-application and concept review stages of a project review because no approvals are granted in these meetings.
2. Under the heading "Pre-Entitlement Site Plan Review - Major Project with Impact Analysis" is an illustration showing the existing review time frame before the requirements of SB1598 are implemented for a major project based on the approximately seven week (35 day) time frame for staff review and approval.
3. Option 1 shows the implications of implementing SB1598's requirements for Administrative Review and Substantive Review if existing staff through IDS are used to complete these reviews. Assuming only one set of corrections (as required by the bill), the overall review time frame is significantly longer than the existing IDS process for a project of this scale. However, if an applicant heeds all of staff comments provided in the concept plan review stage, and there are no major issues with the site plan review submittal, then it is conceivable that the project could be approved (perhaps with conditions) in a shorter time frame that is equivalent to the existing IDS review time frame without the need for a second submittal step.
4. Option 2 on the next page expands this concept further (i.e. assumes the applicant heeds staff's comments provided at concept review), and is based on the assumption that there would be one staff person dedicated to administrative completeness review for all licenses reviewed and approved within CD. As a result, the overall time frame for a major project could be reduced even further.
5. Finally, a separate Typical Overall Process for a Zone Change Request (i.e. a Zoning Map amendment) for a major project is illustrated showing how the Concept Plan/Zone Change Review and public hearings portions of the overall time frame are excepted from the requirements of SB1598.

Over the past few months staff has worked closely with planners from other Arizona cities to understand the implications of SB1598, to determine how best to implement the bill, and to understand the possible impacts to customer service that could result from the bill's implementation. There is general consensus that the intent of the legislation is sound and will ensure fairness, openness, and transparency. However, there is also universal concern that implementing the bill as it is written will have unavoidable negative impacts, and that unfortunately, it does include provisions that are contrary to the current culture of supporting and encouraging development by the Community Development Division and other City Divisions. Some examples of perceived negative impacts include:

• Removes the ability to be flexible and accommodate special needs
• Reduces the quality of customer service due to increased submittal and tracking complexity
• Complicates the process with more stringent bureaucracy.

However, as stated previously the bill is intended to ensure fair and open regulation by Arizona municipalities, and thus some possible positive impacts include:

• Improved project tracking, especially with the pending implementation of the Innoprise Permit Tracking software
• Clarity of project requirements
• Efficient use of staff time
• Improved communication
• Greater value placed on customer's rights
• Required updates to the City’s, and possibly Division’s, web pages. 

Conclusion:
This new law will require all City departments to review its procedures related to how permits, licenses, and other approvals are processed, reviewed, and approved or denied. The procedures need to include clear direction regarding what must be submitted to obtain an approval, how long the review process will take, and an applicant’s rights to appeal any unfavorable decision. The new law also imposes new restrictions on how inspections are conducted and exposes the City to the filing of special proceedings in court which can include the award of damages and court costs for improper processing or decisions.
 
The Central Arizona Home Builders Association (CAHBA) will most likely be proposing amendments to SB1598 in the upcoming legislative session. This may be through a stand alone bill, or with the amendments attached to another bill. It is staff's understanding that they support the intent of the bill, but that it has reached too far, and they are most likely to be requesting “amendments to remove its application from the entitlement process” [Jackson Moll, Municipal Liaison, CAHBA]