ARIZONA STATE AGENCY FEE COMMISSION
2011 Report
December 29, 2011
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Contents
State Agency Fee Commission Creation and Purpose ..................................................................................2
Agencies to be Reviewed.............................................................................................................................2
Agencies Recommended for Review in 2012 ...............................................................................................3
Appendix I. Membership..............................................................................................................................4
Appendix II. Statute Creating the Commission .............................................................................................5
Appendix III. Commission Approved Bylaws.................................................................................................7
Appendix IV. December 8th, 2011 Commission Meeting Minutes..............................................................10
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State Agency Fee Commission Creation and Purpose
The downturn in the economy and the subsequent loss of state revenues shifted revenue structures in
several agencies from General Fund reliance to fee for service. This shift drove both the creation of new
fees and a review and increase of existing fees. Increasing the use of fees highlighted the State’s lack of
a formal process or entity to ensure that fees were appropriately set and used. Laws 2011, Chapter 333
fills that gap by establishing the State Agency Fee Commission (Commission), charged with reviewing all
state agencies and creating an annual report that analyzes agencies’ fee structures and rates.
The Commission is made up of six Governor Appointees, six legislators (three from each chamber), and
the Director of the Governor’s Office of Strategic Planning and Budgeting. Per statute, the Commission
shall review agencies not exempted in the bylaws over the next five years and create a fee review
process.
The Commission met on December 8th, 2011 to discuss the Commission’s purpose, adopt bylaws, and
determine which agencies would be reviewed in 2012.
Agencies to be Reviewed
The bylaws adopted by the Commission specifically exempt 90‐10 agencies, the Supreme Court and
Court of Appeals, and any agency whose Executive is an elected official. Given these exemptions, the
Commission will need to review the following agencies at least once over the next five years:
Administration Indian Affairs
Administrative Hearings Industrial Commission
Agriculture Insurance
Arizona Criminal Justice Commission Judiciary
Arizona Health Care Cost Containment System Juvenile Corrections
Arizona State Retirement System Land
Arizona State University‐Polytechnic Law Enforcement Merit System
Arizona State University‐Tempe Liquor
Arizona State University‐West Lottery
Automobile Theft Medical Student Loans
Capital Post‐Conviction Mines & Mineral Resources
Charter Schools Navigable Streams
Clean Elections Northern Arizona University
Commerce Authority Parents Commission
Commission on the Arts Parks
Community Colleges Personnel Board
Constables Pest Management
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Corrections Pioneers' Home
Deaf and Hard of Hearing Postsecondary Education
Deaf and the Blind Power Authority
Early Childhood Prescott Historical
Economic Security Private Postsecondary
Emergency & Military Affairs Public Safety
Environmental Quality Public Safety Personnel Retirement System
Equalization Racing
Executive Clemency Radiation Regulatory
Exposition and State Fair Real Estate
Financial Institutions Regents
Fingerprinting Registrar of Contractors
Fire, Building & Life Safety Residential Utility
Forestry Revenue
Game & Fish School Facilities Board
Gaming Tax Appeals
Geological Survey Tourism
Health Services Transportation
Highway Safety University of Arizona‐Health Sciences
Historical Society University of Arizona‐Main
Homeland Security Veterans' Services
Housing Water Resources
Independent Redistricting Weights and Measures
Agencies Recommended for Review in 2012
At the December 8th, 2011 meeting, the Commission decided that the agencies to be reviewed in 2012
would be Environmental Quality, Financial Institutions, Land, and Weights and Measures.
In addition to analyzing these agencies’ fee structures, the Commission will define what should be
considered a “fee” while establishing a process in which the remaining agencies will be reviewed. During
the December 8th, 2011 Commission meeting, the Commission decided that the agencies should be
reviewed as a whole, instead of looking at specific fees within each agency.
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Appendix I. Membership
As of December 29, 2011
Chair
Representative Amanda Reeve
Vice Chair
Richard Bark
Director of the Office of Strategic Planning and Budgeting
John Arnold
Governor Appointed Members
Basillio Aja
Sandra Fabritz-Whitney
John Halikowski
Spencer Kamp
Legislative Members
Senator Frank Antenori
Representative Katie Hobbs
Senator Jack Jackson
Senator Lori Klein
Representative Terri Proud
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Appendix II. Statute Creating the Commission
41-1008.01: State agency fee commission; membership; duties; report
(Rpld. 10/1/16)
A. THE STATE AGENCY FEE COMMISSION IS ESTABLISHED CONSISTING OF THE FOLLOWING MEMBERS:
1. SIX MEMBERS WHO ARE APPOINTED BY THE GOVERNOR, FOUR WHO ARE PRIVATE SECTOR
PROFESSIONALS FROM DIVERSE SECTORS WHO REPRESENT ENTITIES THAT ARE LICENSED OR
PERMITTED BY THE STATE AND TWO WHO ARE STATE AGENCY EXECUTIVES.
2. THREE MEMBERS OF THE SENATE WHO ARE APPOINTED BY THE PRESIDENT OF THE SENATE,
NOT MORE THAN TWO OF WHOM ARE MEMBERS OF THE SAME POLITICAL PARTY.
3. THREE MEMBERS OF THE HOUSE OF REPRESENTATIVES WHO ARE APPOINTED BY THE
SPEAKER OF THE HOUSE OF REPRESENTATIVES, NOT MORE THAN TWO OF WHOM ARE
MEMBERS OF THE SAME POLITICAL PARTY.
4. THE DIRECTOR OF THE GOVERNOR'S OFFICE OF STRATEGIC PLANNING AND BUDGETING.
B. THE GOVERNOR SHALL APPOINT ONE MEMBER OF THE COMMISSION AS CHAIRPERSON OF THE
COMMISSION. COMMISSION MEMBERS SERVE AT THE PLEASURE OF THAT PERSON'S APPOINTING
OFFICER AND ARE NOT ELIGIBLE TO RECEIVE COMPENSATION OR REIMBURSEMENT OF EXPENSES.
C. THE COMMISSION SHALL:
1. REVIEW ALL STATE AGENCIES, EXCEPT THOSE EXEMPTED IN THE COMMISSION BYLAWS, AT
LEAST ONCE IN EACH FIVE‐YEAR PERIOD, BEGINNING OCTOBER 1, 2011 OR WHENEVER THE
COMMISSION DEEMS NECESSARY.
2. ESTABLISH A FEE REVIEW PROCESS OF STATE AGENCIES.
3. ISSUE AN ANNUAL, COMPREHENSIVE REPORT THAT INCLUDES ALL OF THE FOLLOWING:
a) AN ANALYSIS OF THE FEES ASSESSED BY EACH OF THE REVIEWED AGENCIES. THE
ANALYSIS SHALL INCLUDE A COMPARISON OF THIS STATE'S AGENCIES WITH OTHER,
SIMILAR AGENCIES IN OTHER SOUTHWESTERN STATES AS WELL AS A COMPARISON
WITH NATIONWIDE TRENDS.
(b) AN ANALYSIS OF THE METHODS USED BY AGENCIES TO SET FEES.
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(c) AN ANALYSIS OF THE EFFECTS THAT FEES CURRENTLY HAVE ON REGULATED
INDUSTRIES, BUSINESSES OR CONSUMER GROUPS FOR EACH AGENCY.
(d) AN ANALYSIS OF THE LONG‐TERM SUSTAINABILITY OF THE REGULATED PROGRAM
BASED ON ALL FUND SOURCES.
(e) A LIST OF AGENCIES TO BE REVIEWED IN THE FOLLOWING YEAR.
(f) AN ANALYSIS OF THE EFFECTS RECENT BUDGET REDUCTIONS AND FUND TRANSFERS
HAVE HAD ON AGENCIES.
D. AT ITS FIRST MEETING, THE COMMISSION SHALL ADOPT BYLAWS TO GOVERN ISSUES RELATED TO
THE CONDUCT OF THE COMMISSION BUSINESS AND POTENTIAL CONFLICTS OF INTEREST.
E. AGENCIES SELECTED FOR REVIEW BY THE COMMISSION SHALL COOPERATE WITH THE COMMISSION
AND SHALL PROVIDE INFORMATION AS REQUESTED BY THE COMMISSION.
F. THE COMMISSION MAY USE THE SERVICES OF THE STAFF OF THE GOVERNOR'S OFFICE OF STRATEGIC
PLANNING AND BUDGETING AS REQUIRED.
G. ON OR BEFORE DECEMBER 31, 2011, THE COMMISSION SHALL SUBMIT ITS FIRST ANNUAL REPORT
TO THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF
REPRESENTATIVES. THE COMMISSION SHALL PROVIDE A COPY OF THE REPORT TO THE SECRETARY OF
STATE.
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Appendix III. Commission Approved Bylaws
PREAMBLE
The Arizona State Fee Commission (“Commission”) was established to review the suitability of
administrative charges and fees assessed by state agencies and submit an annual report to the Governor
and the Legislature (Laws 2011, Ch. 333 (H.B. 2314), codified at Arizona Revised Statutes § 41‐1008.01).
The Commission shall conduct meetings in order to analyze state agency fees and issue an annual
comprehensive report regarding the Commission’s analysis.
ARTICLE I ‐ FUNCTIONS
Pursuant to A.R.S. § 41‐1008.01, the functions of the Commission are as follows:
Section A. Review all state agencies, except those exempted in the Commission bylaws, at least once in
each five‐year period, beginning October 1, 2011 or whenever the Commission deems necessary.
Section B. Establish a fee review process of state agencies.
Section C. Submit an annual report to the Governor and Legislature on the Commission’s analysis and
findings by December 31 of each year.
ARTICLE II ‐ MEMBERSHIP
The Commission shall consist of six gubernatorial appointees, six legislative appointees, and the Director
of the Office of Strategic Planning and Budgeting. Gubernatorial appointees shall include two state
agency executives and four private sector professionals from diverse sectors whose companies are
licensed or permitted by the State of Arizona. Legislative appointees shall include three members of the
House of Representatives and three members of the Senate, with no more than two members from the
same party from each legislative chamber.
ARTICLE III – ADMINISTRATION
Section A. Election of Officers ‐ The Commission’s Officers shall consist of a Chair and a Vice‐Chair. Prior
to the first meeting of the Commission and at such other times as there may be a vacancy in either
office, the Governor shall appoint a Chair who shall preside at meetings and a Vice‐Chair who shall
preside in the Chair’s absence.
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Section B. Term of Office ‐ Each member of the Commission shall serve at the pleasure of his or her
appointing officer.
Section C. Removal of Officers –In addition to each member of the Commission serving at the pleasure
of his or her appointing officer, by unanimous vote, the Commission may expel one of its members. The
appointing officer then must make the affirmative action to re‐appoint the person or select a new
person.
Section D. Duties of Various Officers
1. Duties of the Chair ‐ The Chair shall, if present, preside at all meetings of the Commission,
shall prepare an agenda, provide overall direction on activities of the Commission and exercise
and perform such other powers and duties as may from time to time be assigned by the
Commission or provided herein.
2. Duties of the Vice‐Chair ‐ The Vice‐Chair shall perform the duties of the Chair in his or her
absence and when so acting, shall have all the powers of and be subject to all restrictions upon
the Chair.
ARTICLE IV ‐ MEETINGS
Section A. Agenda ‐ Matters to be placed on the agenda for any regular meeting may be submitted to
the Chair and copies of the agenda shall be delivered to each member twenty‐four hours prior to the
meeting date.
Section B. Quorum –A majority of the total membership of the Commission must be present to achieve
quorum.
Section C. Open Meeting Law ‐‐ All meetings of the Commission shall be called, noticed, and conducted
in the manner prescribed by Arizona’s Open Meeting Law.
Section D. Motions ‐‐ Any member may make and second motions.
Section E. Actions of the Board ‐‐ All actions of the Commission shall pass by no less than a majority of
the quorum.
ARTICLE V – CONFLICTS OF INTEREST
Section A. In General – A Commission member must disclose to the Commission if he or she is an
employee of either a state agency that collects fees or an organization that pays fees to a state agency.
Section B. State Agency Executives – A state agency executive who is a Commission member whose
agency is reviewed and whose fees are analyzed by the Commission shall not participate in any
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Commission analysis of the fees of the state agency, in the preparation of the Commission’s annual
report specifically pertaining to that executive’s agency, or vote on any Commission action related to the
agency. The state agency executive may participate as a witness or presenter to the Commission.
ARTICLE VI – EXEMPTION OF AGENCIES FOR CONSIDERATION
Section A. In General – The following agencies are not subject to review by this Commission:
1. State agencies whose executive is an elected official;
2. The Arizona Supreme Court;
3. The Arizona Court of Appeals;
4. Professional and occupational regulatory agencies governed by a board that retain ninety
percent (90%) of the fees collected annually in separate agency fund accounts and deposit ten
percent (10%) of the fees collected into the state General Fund.
ARTICLE VII ‐ AMENDMENTS
Amendments to these Bylaws may be proposed by any member of the Commission. The amendment
shall be submitted to the Commission at a meeting at least thirty (30) days prior to the meeting at which
the amendment is voted upon. A vote of two‐thirds (2/3) of the total membership of the Commission is
required to adopt an amendment.
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Appendix IV. December 8th, 2011 Commission Meeting Minutes
Meeting Minutes
Chair Representative Amanda Reeve called the meeting to order at 3:42 pm and
attendance was noted.
Members Present:
Basillio Aja
John Arnold
Richard Bark, Vice Chair
Sandra Fabritz-Whitney
John Halikowski
Rep. Katie Hobbs
Spencer Kamp
Sen. Lori Klein
Rep. Amanda Reeve, Chair
Rep. Terri Proud
Members Absent:
Sen. Frank Antenori
Sen. Jack Jackson
Staff Present:
Leah Koestner, OSPB Budget Analyst
1. Welcome & Introductions
Members of the Commission introduced themselves by stating their names and
professional titles.
2. Review Commission Objectives.
John Arnold, OSPB Director briefly reviewed the statute that created the Commission,
A.R.S. § 41-1008.01. Mr. Arnold also discussed how the downturn in the economy has
created a shift in several agencies from being General Fund supported to being fee
supported.
Representative Amanda Reeve, Chair of the Commission added her intentions when
she ran H.B. 2314 in the 2011 Regular Session, including transparency.
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Richard Bark, Vice Chair spoke about how the Commission should look at agencies as
a whole, and not just specific fees.
3. Review and Action – Commission Bylaws
Representative Reeve, Chair, read the draft bylaws and asked for comments from the
Commission.
There was discussion around the Conflict of Interest portion and whether or not it allows
agency directors on the Commission to participate in the review of their agency.
The Commission also discussed the exemption of the 90-10 agencies. It was noted that
the statute does not prevent 90-10s from being reviewed, and if the Commission would
like to review a 90-10 agency, they could always amend the bylaws to make that
possible.
Richard Bark moved that the bylaws be adopted.
John Halikowski seconded the motion.
The motion carried by a unanimous voice vote.
4. Selection of Agencies for Review in 2012
Spencer Kamps asked about the process for reviewing the agencies not exempted in
the bylaws. Mr. Kamps also suggested that the process of developing fees, including
the GRRC process should be reviewed.
John Halikowski mentioned that there are several statutory ways to create fees, and
different agencies have different statutory abilities to create fees.
Representative Reeve suggested that the Commission will look at agencies individually,
and look at each agency as a whole.
Sandra Fabritz-Whitney discussed the difference between reviewing authority to collect
fees and the amount and use of fees.
Richard Bark, per the adopted bylaws, disclosed that the company he works for pays
fees. Mr. Bark then talked about the four suggested agencies for review: the
Department of Environmental Quality, the Department of Financial Institutions, the Land
Department, and the Department of Weights and Measures
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Mr. Bark moved that the Commission review the Department of Environmental Quality,
the Department of Financial Institutions, the Land Department, and the Department of
Weights and Measures in the following year’s report.
Basilio Aja seconded the motion.
The motion carried by a unanimous voice vote.
5. Call to the Public
No public comments.
6. Adjourn
The Committee adjourned at 4:20 pm.
