Bill Text: AZ SB1738 | 2024 | Fifty-sixth Legislature 2nd Regular | Engrossed
Bill Title: Commerce; 2024-2025.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-06-15 - Senate additional Committee of the Whole action: Do Pass Amended [SB1738 Detail]
Download: Arizona-2024-SB1738-Engrossed.html
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Senate Engrossed
commerce; 2024-2025. |
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State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024
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SENATE BILL 1738 |
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An Act
amending sections 6-135 and 20-466, Arizona Revised Statutes; amending title 20, chapter 2, article 6, Arizona Revised Statutes, by adding section 20-466.05; repealing Laws 2023, chapter 136, section 2; amending Laws 2023, chapter 136, section 4; relating to commerce.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 6-135, Arizona Revised Statutes, is amended to read:
6-135. Department revolving fund; use of fund
A. There is established a The department revolving fund is established to be administered by the deputy director under the conditions and for the purposes provided by this section. Monies in the fund are exempt from the provisions of section 35-190, relating to lapsing of appropriations.
B. Any investigative costs, attorney fees or civil penalties recovered for the state by the attorney general or the deputy director as a result of actions brought pursuant to this title, whether by final judgment, settlement or otherwise, shall be deposited in the department revolving fund. If the unencumbered portion of the fund exceeds $200,000 $700,000 at the end of the fiscal year, all unencumbered monies in excess of $200,000 $700,000 shall be deposited in the department receivership revolving fund, pursuant to section 6-135.01.
C. The monies in the fund shall be used by the deputy director and the attorney general for investigative proceedings or for purposes of instituting and prosecuting civil actions pursuant to this title.
D. On or before the fifteenth day of February, May, August and November of each year, the deputy director shall file with the governor, with copies to the director of the department of administration, the president of the senate and the speaker of the house of representatives, a full and complete account of the receipts and disbursements from the fund in the previous calendar quarter.
Sec. 2. Section 20-466, Arizona Revised Statutes, is amended to read:
20-466. Fraud unit; investigators; peace officer status; powers; information sharing; assessment
A. The fraud unit is
established in the department of insurance and financial institutions. The
director of the department of insurance and financial institutions shall
appoint an individual to operate the fraud unit in conjunction with operating
the automobile theft authority established by section 41-3451.
B. The fraud unit shall work in conjunction with the department of public safety.
C. The director may investigate any act or practice of fraud prohibited by section 20-466.01 and any other act or practice of fraud against an insurer or entity licensed under this title. The director shall administer the fraud unit.
D. The director may employ investigators for the fraud unit. A fraud unit investigator has and shall exercise the law enforcement powers of a peace officer of this state but only while acting in the course and scope of employment for the department of insurance and financial institutions. The director shall adopt guidelines for the conduct of investigations that are substantially similar to the investigative policy and procedural guidelines of the department of public safety for peace officers. Fraud unit investigators shall not preempt the authority and jurisdiction of other law enforcement agencies of this state or its political subdivisions. Fraud unit investigators:
1. Shall have at least the qualifications prescribed by the Arizona peace officer standards and training board pursuant to section 41-1822.
2. Are not eligible to participate in the public safety personnel retirement system established by title 38, chapter 5, article 4 due solely to employment as fraud unit investigators.
E. The director may request the submission of papers, documents, reports or other evidence relating to an investigation under this section. The director may issue subpoenas and take other actions pursuant to section 20-160. The materials are privileged and confidential until the director completes the investigation. Any documents, materials or other information that is provided to the director pursuant to this section is not subject to discovery or subpoena until opened for public inspection by the director or, after notice and a hearing, a court determines that the director would not be unduly burdened by compliance with the subpoena. The director shall keep the identity of an informant confidential, including any information that might identify the informant, unless the request for information is made by a law enforcement agency, the attorney general or a county attorney for purposes of a criminal investigation or prosecution. The director may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties.
F. If the documents, materials or other information the director seeks to obtain by request is located outside this state, the person requested to provide the documents, materials or other information shall arrange for the fraud unit or a representative, including an official of the state in which the documents, materials or other information is located, to examine the documents, materials or other information where it is located. The director may respond to similar requests from other states.
G. An insurer that believes a fraudulent claim has been or is being made shall send to the director, on a form prescribed by the director, information relative to the claim including the identity of parties claiming loss or damage as a result of an accident and any other information the fraud unit may require. The director shall review the report and determine if further investigation is necessary. If the director determines that further investigation is necessary, the director may conduct an independent investigation to determine if fraud, deceit or intentional misrepresentation in the submission of the claim exists. If the director is satisfied that fraud, deceit or intentional misrepresentation of any kind has been committed in the submission of a claim, the director may report the violations of the law to the reporting insurer, to the appropriate licensing agency as defined in section 20-466.04 and to the appropriate county attorney or the attorney general for prosecution.
H. The director may:
1. Share nonpublic documents, materials or other information with other state, federal and international regulatory agencies, with the national association of insurance commissioners and its affiliates and subsidiaries and with state, federal and international law enforcement authorities if the recipient agrees and warrants that it has the authority to maintain the confidentiality and privileged status of the documents, materials or other information.
2. Receive documents, materials and other information from the national association of insurance commissioners and its affiliates and subsidiaries and from regulatory and law enforcement officials of other jurisdictions and shall maintain as confidential or privileged any document, material or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information.
3. Enter into agreements that govern the sharing and use of documents, materials and other information and that are consistent with this section.
I. A disclosure to or by the director pursuant to this section or as a result of sharing information pursuant to subsection H of this section is not a waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information disclosed or shared.
J. The director shall annually assess each insurer as defined in section 20-441, subsection B authorized to transact business in this state up to $1,050 for the administration and operation of the fraud unit and the prosecution of fraud pursuant to this section. Monies collected shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund for appropriation to the fraud unit. All monies appropriated to the department for the fraud unit shall be included as a separate line item in the general appropriations act. The department shall use all appropriated monies exclusively to operate the fraud unit in the fraud unit assessment fund established by section 20-466.05.
K. A person, or an officer, employee or agent of the person acting within the scope of employment or agency of that officer, employee or agent, who in good faith files a report or provides other information to the fraud unit pursuant to this section is not subject to civil or criminal liability for reporting that information to the fraud unit.
Sec. 3. Title 20, chapter 2, article 6, Arizona Revised Statutes, is amended by adding section 20-466.05, to read:
20-466.05. Fraud unit assessment fund
The fraud unit assessment fund is established consisting of monies deposited pursuant to section 20-466, subsection J. Monies in the fund are continuously appropriated. The department shall administer the fund for administering and operating the fraud unit established by section 20-466.
Sec. 4. Repeal
Laws 2023, chapter 136, section 2 is repealed.
Sec. 5. Laws 2023, chapter 136, section 4 is amended to read:
Sec. 4. Microbusiness loan program; fund; eligible entities; report; delayed repeal; transfer of monies; definitions
A. The microbusiness loan fund is established consisting of legislative appropriations. The office of economic opportunity shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations. In fiscal year 2023-2024, The office of economic opportunity shall use the monies in the fund for the microbusiness loan program.
B. The office of economic opportunity shall establish the microbusiness loan program to provide funding to eligible entities that provide loans to microbusinesses in this state.
C. The office of economic opportunity shall publicly list and solicit program applications for the participation and funding of eligible entities.
D. In fiscal year 2023-2024 To receive funding from the program, an eligible entity must satisfy the following criteria:
1. Have expertise in microbusiness loan applications and evaluating microbusiness creditworthiness.
2. Establish an administrative system to monitor the microbusiness loans provided pursuant to this section.
3. Evaluate whether a proposed microbusiness loan will generate economic development and jobs within this state.
4. Refer all microbusiness loan recipients to a local organization or nonprofit organization that provides professional financial education.
E. A microbusiness loan provided by an eligible entity pursuant to this section may be used for the following:
1. Operation of the microbusiness, including creation and retention of jobs.
2. Working capital.
3. Acquisition or improvement of real property.
4. Acquisition of machinery and equipment.
5. Refinancing of debt obligations.
F. The office of economic opportunity shall market and advertise the program to microbusinesses that are unable to access traditional funding sources and offer information on other similar programs. The office of economic opportunity may use up to one percent of the monies deposited in the fund for the purposes of this subsection.
G. For each loan disbursed by an eligible entity using monies from the program, the following requirements apply:
1. The principal amount of an individual loan may not exceed $50,000.
2. Program monies may not be used for more than twenty-five percent of the principal amount of the loan, but the office of economic opportunity may set a higher cap by rule.
3. Any principal and interest amounts repaid on program monies shall be used only for additional microbusiness loans pursuant to this section.
H. An eligible entity that participates in the program shall certify with the office of economic opportunity that a loan to a microbusiness complies with this section.
I. An eligible entity that participates in the program may charge application, commitment and loan guarantee fees as established by the eligible entity's management. Fees charged by eligible entities pursuant to this subsection may not exceed the following:
1. $500 for loans with a principal amount less than $25,000.
2. Two percent of the total loan principal for loans with a principal amount of $25,000 or more.
J. On or before February 1, 2024, the office of economic opportunity shall submit a report on the number of microfinance lenders in this state, the availability of microbusiness credit in this state and any recommendations for increasing the availability of credit to microbusinesses in this state to the governor, the president of the senate, the speaker of the house of representatives, the joint legislative budget committee and the governor's office of strategic planning and budgeting and shall provide a copy of the report to the secretary of state.
K. On or before July 31, 2024, the office of economic opportunity shall submit a report to the governor, the president of the senate, the speaker of the house of representatives and the joint legislative budget committee and provide a copy of the report to the secretary of state that contains all of the following:
1. A list of the eligible entities that have received funding from the program.
2. The number of microbusiness loans made by each eligible entity using monies from the program and the type of business each loan recipient operates.
3. The average principal amount of microbusiness loans made by each eligible entity using monies from the program.
4. The county and zip code of each eligible entity.
5. The county and zip code of the recipients of each loan made to an eligible entity with monies from the program.
6. The current outstanding principal of microbusiness loans made by eligible entities using program monies.
7. The total amount of loan losses for microbusiness loans made by eligible entities using program monies.
8. The total amount of principal repaid to eligible entities for microbusiness loans made pursuant to this section.
9. The total amount of interest earned and fees charged by eligible entities for microbusiness loans made pursuant to this section.
L. The office of economic opportunity may not allocate more than $2,000,000 of the monies deposited into the fund to an eligible entity. The office of economic opportunity shall allocate program funds so that there is a participating eligible entity from at least two different counties.
M. from and after June 30, 2025, This section is repealed, and All unexpended and unencumbered monies in the microbusiness loan fund established by this section are transferred to the state general fund.
M. N. For the purposes of this section:
1. "Community development financial institution" means an entity that is currently certified pursuant to 12 Code of Federal Regulations section 1805.201.
2. "Eligible entity" means a community development financial institution or a nonprofit lender in this state with at least two years of lending experience.
3. "Microbusiness" means a business that is located in this state, that is independently owned and operated and that employs five or fewer people.
Sec. 6. Effective date
A. Section 20-466, Arizona Revised Statutes, as amended by this act, is effective from and after June 30, 2025.
B. Section 20-466.05, Arizona Revised Statutes, as added by this act, is effective from and after June 30, 2025.
