SB 1162
Initials DC Page 1 House Engrossed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: COM DP 4-2-1-0 | 3rd Read 16-13-1-0
House: RA DP 5-2-0-0 | 3
rd
Read 31-27-2-0
SB 1162: home-based businesses; restrictions; prohibition
Sponsor: Senator Kaiser, LD 2
House Engrossed
Overview
Establishes that a home-based business must be allowed as a use by right, if the business does
not supersede any existing restrictions. Authorizes a municipality or county to establish
reasonable regulations on home-based businesses.
History
A municipality or county may not restrict or regulate a license holding owner of a home-based
business from: 1) making residential property improvements to add doors, shelving or display
racks for use by the business; 2) displaying a temporary commercial sign during business hours;
3) selling or offering for sale any goods; 4) generating traffic, parking or delivery activity that does
not cause parking congestion or a substantial increase in traffic in the residential area; or 5) having
more than one client on the property at once. Furthermore, a home-based business may employ
residents of the primary dwelling and immediate family members, as well as 1-2 employees who
are not residents or immediate family members.
Currently, the owner of a home-based business must hold a valid license, as defined in statute.
Additionally, a home-based business means any business for the limited manufacture, provision
or sale of goods or services that is owned and operated by the owner or tenant of the residential
property.
Finally, statute authorizes a county to impose reasonable operating requirements on a home-
based business or a residential property used by a home-based business (A.R.S. § 11-820).
Provisions
1. States that a home-based business is allowed as a use by right if it does not supersede any
deed restrictions, covenants or land use agreement, master deed or other document that
applies to a common interest ownership community. (Sec. 1, 2)
2. Restricts a municipality or county from prohibiting a no-impact home-based business or
requiring a person to obtain a permit, license or prior municipal approval to operate. (Sec. 1,
2)
3. Permits a municipality or county to establish reasonable regulations on a home-based
business within the confines of:
a) protecting the public health and safety, including the current regulations pertaining to fire
and building codes, health, sanitation, transportation or traffic control, solid or hazardous
waste, pollution and noise control;
b) limiting or prohibiting the use for purposes of maintaining a structured sober living home,
selling illegal drugs or liquor, pornography, obscenity, nude or topless dancing or other
adult oriented businesses; and
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1162
Initials DC Page 2 House Engrossed
c) ensuring the business activity is compatible with the residential property use, secondary
to its use as a residential dwelling and that it complies with state and federal laws, as well
as applicable taxes. (Sec. 1, 2)
4. Prohibits a municipality or county, as a condition for a person to operate a home-based
business, to do any of the following:
a) apply to rezone the property for commercial use;
b) obtain a home-based or other business license; or
c) install fire sprinklers in a residential dwelling with one or two dwelling units. (Sec. 1, 2)
5. Stipulates that whether a city or county regulation complies with the statutory provisions is a
judicial question and the regulatory entity must establish by clear and convincing evidence
that the provision complies with state law. (Sec. 1, 2)
6. Removes the requirement for a home-based business to obtain a license. (Sec. 2)
7. Revises the county restrictions and regulations for home-based businesses. (Sec. 2)
8. Defines goods, home-based business, immediate family member and no-impact home-based
business. (Sec. 1, 2)
9. Makes a conforming change. (Sec. 2)