Pub. 3 2013 Issue 3

21 SUMMER 2013 Under the Copper Dome BY JAY KAPROSY , VERIDUS A FTER 151 DAYS OF DELIBERATIONS THE ARIZONA LEGISLATURE CAME TO A MERCIFUL, ALBEIT VERY CONTENTIOUS, END. THIS WAS A very successful legislative session for the banking industry as we succeeded in passing several key pieces of legislation and ensuring that no harm was done. The Big Picture This legislative session was dominated by the debate over the Governor’s proposal to expand the state’s Medicaid program to cover people making up to 138% of the federal poverty level. Under the Affordable Care Act, the federal government will cover 100% of the expansion through 2016 and 90% thereafter. This amounts to approxi- mately $1.2 billion per year from the feds for the first three years and a substantial annual payment after that. While the Governor opposed Obama-care, she supports its Medic- aid expansion component and crafted a bill that would allow the state to terminate the expanded coverage if the federal government later backs out of its commitment. The major- ity of the Republican caucus in the legislature has opposed the expansion on ideological grounds stemming from their fundamental opposition to Obama-care. In April the Governor made it clear that she would not be signing any more bills into law until she had a Medicaid expansion bill and the state’s budget – of which Medicaid ex- pansion is an integral part. She also strongly suggested that the legislature send her a sales tax reform bill that a gubernatorial task force has been working on since last summer. It is not unique for tensions to exist between the governor and the legislature, but it is more common when they are of different political parties. For example, Democratic Governor Janet Napolitano had sev- eral knock-down-drag-outs with the Republican-controlled legislature dur- ing her tenure. These types of fights are less prevalent when the governor and the legislature are of the same party – as is currently the case, which made the Medicaid dispute particu- larly bitter. The AzBA Agenda The Arizona Bankers Associa- tion tracked about 125 pieces of state legislation this session – most of which would have been problematic for our industry at some level. A good example is a bill that would have per- mitted business associations to pay off tax liens at the behest of a debtor and then stand in the shoes of the former municipal tax lien holder. It would have given the new tax lien holder/ lender super priority lien position – in front of the bank. It also would have allowed the new tax lien lender to be- gin foreclosure immediately upon the debtor going into arrears to the new lender. The bill died in committee, but we expect it to be back next year. Another bill would have extended deficiency protection to short sales on residential real estate. This would have significantly diminished the “No man’s life, liberty, or property are safe while the legislature is in session.” —Mark Twain It is our hope that the poli Ɵ cal bi Ʃ erness of this session can be put aside and all sides will emerge from this year’s experience having learned some important lessons about governing. Q Under the Copper Dome | continued on page 22