HB 2722
Initials VP/DD Page 1 House Engrossed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
House: WM DP 5-4-0-0
HB 2722: public resources; expenditures; prohibition
Sponsor: Representative Carter N, LD 15
House Engrossed
Overview
The Taxpayer Protection Act creates an new article in statute limiting public entity
expenditures for use towards a public purpose and outlines judicial procedures to challenge
expenditures, loans or uses of public resources.
History
Title 1, chapter 5, article 1 currently outlines the eligibility requirements, documentation,
applicable violations and definitions regarding federal, state and local public benefits (A.R.S.
§ § 1-501, 1-502, 1-503, 1-504).
The Arizona constitution states that the state, counties, cities, towns, municipalities and
subdivisions of the state cannot give or loan credit or make donations or grants to individuals,
associations and corporations (Ariz. Const. art 9 § 7). This is referred to as the gift clause.
The Wistuber Court defined the appropriate test for avoiding a constitutional violation: the
private entity must use public property or funds for a public purpose, and there must be
consideration that is not so inequitable and unreasonable that the government’s donation or
grant of property amounts to an abuse of discretion (141 Ariz. At 349).
Provisions
1. Changes the heading of title 1, chapter 5 from Public Programs to Public Resources. (Sec.
1)
2. Defines consideration, control, public entity, public purpose and public resources. (Sec. 2)
3. Specifies that irrigation, power, electrical, agricultural improvement, drainage and flood
control districts and tax levying districts are not included under the definition of public
entity. (Sec. 2)
4. Prescribes that a public entity may not spend, loan or allow the use of public resources or
the entity's taxing power to aid any individual, association, corporation or other private
party unless it is done for a public purpose, is supported by consideration and the public
entity has control over the expenditure, loan or use of public resources. (Sec. 2)
5. Allows the Attorney General or a taxpayer of Arizona to file an action in the court of
General Jurisdiction challenging expenditures, loans or use of public resources. (Sec. 2)
6. Prescribes that a plaintiff will be found successful if the court finds a preponderance of
evidence that:
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2722
Initials VP/DD Page 2 House Engrossed
a) the challenged expenditure, loan or use of public resources isn't used to advance a
public purpose;
b) the challenged expenditure, loan or use of public resources isn't supported by
consideration; or
c) the public entity could not properly maintain control over the expenditure, loan or use
of public resources. (Sec. 2)
7. Entitles this act as the Taxpayer Protection Act. (Sec. 3)