The Farley Report from Phoenix #199: 2-11-14

Howdy, Friends O'Farley… 

The action is swirling at all levels in the Legislature now that all bills have been dropped -- 525 in the Senate and 758 in the House. Committees are bursting at the seams with long agendas, and we are starting to plow through votes on the floor. Closed-door small group meetings are being held among Republicans about the budget, and hope is in the air for an early end to session sometime in April. On Monday, in Senate Government and Environment Committee, we heard 16 bills for more than four hours, including a couple of doozies I'll talk about later. 

But first, here's your Farley Pledge Break:

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It's that time again! If you'd like me to continue serving you in the Senate, I need to get re-elected. In order to get re-elected, I need three things from you tonight: Signatures, funding, and volunteers.

1) Signatures: If you live in District 9, and you like the representation I have been providing you, you can now sign my nominating petition online by clicking on this link. It's really easy and will take no more than 30 seconds of your time, so please click and sign today, and urge your friends to do the same. It costs you nothing! Thank you!  

Please sign my nominating petition here.

2) Funding: I need to raise money to get the word out to voters on why I should be re-elected. The more you can give now, the less I will have to bother you later!

My opponents (whoever they may be) may get more deep pockets in their corner (given the new maximum contribution of $4,000 per person!), but I feel confident I can match them stride for stride with your passion for good governance on my side. Please help me out in any way you can, starting today. Thank you!

You can securely give $20, $200, or even $500 online right now.

3) Walking: If you would like to have a pleasant walk in the District 9 sunshine, gathering nominating signatures for me and other Democratic candidates, super-volunteer Rod McLeod will be hosting a walk at his house in Casas Adobes, 6634 N Los Arboles Circle, on Saturday, February 22, at 9am. Join me as we kick off the voter-contact portion of this campaign with enthusiasm -- The general election is only nine months away! If you can come, please reply to this email to let me know. 

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On to the news:

--> Two Farley bills headed to Senate floor: My bill SB1032 to force all future specialty license plates to have a standardized design so that they are easily recognizable to law enforcement and witnesses to crimes as Arizona plates, and my bill to reduce sales tax reporting requirements and increase cash flow to small retail businesses at no cost to the state SB1134 (which passed Finance Committee unanimously last Wednesday) passed out of Rules Committee yesterday and both Republican and Senate caucuses today, and may be voted on the floor as soon as Thursday.

--> Legal Tender Bill is Back: One of those 16 bills on the G&E committee agenda yesterday was a rerun from last year that had been vetoed by Governor Brewer for its deleterious effects on our economy and tax collection regime -- Chester Crandell's (R-Heber) SB1096 which seeks to allow Arizonans to pay for anything with hunks of gold and silver, and pay taxes with smaller hunks of gold and silver, all because there is a group of folks out there who believe the international monetary system in on the verge of collapse, so we need to privatize our means of commercial exchange. 

Our guest star at the hearing was a gentleman named Larry Hilton, who presented himself as the brains behind the legal tender bill that passed in Utah in 2011. He happens to own a business that  collects paychecks and life savings from people which is then converted to gold that is stored privately by his company, and his customers use an app to draw on the amount that has been deposited in his private storeroom when they want to buy something. 

Mr Hilton admitted that there would need to be a massive increase in the size and scope of government to regulate this new monetary system, from inspectors on site at every store to assure that the gold and silver collected was pure (instead of lead bars with gold paint), people to figure out what the value of gold was at any given time, regulators to make sure these private depositories were not committing fraud (another of the boosters of the Utah law is currently under SEC indictment), and weights & measures auditors to inspect little scales at every cash register in every business. 

Mr Hilton could not explain what happens if a business collects sales taxes in gold, and the price of gold increases 15% between the time of collection and the time the business submits the tax to the Department of Revenue -- do they pay 15% more? He did admit that if the price of gold declines by 9% in one day (as it did on April 20, 2013) those people depositing their life savings in his depository would lose that money with no recourse. 

The nightmarish repercussions of such a bill, which stand to bury our monetary system in a mire of competing regulations, wildly fluctuating values, and massive lines at the grocery store, led to a veto last year here. This year I hope Governor Brewer does the same. I pointed out the absurdity of the concept last year by offering a Swiftian amendment on the Senate floor to add Arizona's Five C's to the list of legal tender -- copper, cotton, cattle, citrus, and climate.  You can view the video of the ensuing debate here.

The bill passed committee 4-2. I sure wish we could spend more time figuring out how to create more jobs, improve our schools, and fund our transportation system instead of being distracted by sideshows that pander to apocalyptic thinkers and those that would take advantage of them. 

--> Energy Efficiency Under Threat: Chester Crandell has another bill heard yesterday in that same meeting -- SB1227. It would forbid any city or county from enacting any energy efficiency codes, and was pushed by the Central Arizona Homebuilders Association as a way for shaving $3000 to $5000 from the sales price of a new home. Under my questioning, their lobbyist Spencer Kamps admitted that over the course of a 30-year mortgage, the small savings up front would be swamped by the massive additional utility costs that pile up each year. Folks who may be enticed by a slightly lower sales price may not take into account the ongoing utility costs of an energy-wasting home and potentially end up in serious financial trouble. 

In addition, energy efficiency creates many local jobs and is one of the most cost-effective ways we can reduce the need for the construction of new power plants and the ensuing pollution and global warming effects, especially from coal-fired facilities. Those new plants also cost a lot of money, and that's why the state's major utilities signed in against the bill alongside the Sierra Club. 1227 limped out of the committee on a 3-2 vote, and I have high hopes we can stop its progress this year. 

--> Mortgage Lending Fairness Bill progress: Speaking of putting homes within reach, my SB1273 qualified mortgage standards bill establishes Arizona-only mortgage underwriting guidelines in order to reclaim the ability of self-employed people, small business owners, and middle class families to buy or refinance a home, to protect our real estate and mortgage industry, and to challenge the big-bank-backed federal Dodd-Frank act. I obtained signatures of many of the most conservative members of the Legislature as co-sponsors. 

Today in a stakeholder meeting with representatives of some of the state's banking, mortgage, and real estate industries, we discovered a wrench in the works -- the Feds in Dodd-Frank have enabled borrowers to sue in federal court if lenders do not follow the new federal guidelines at the strictest level. 

This means that common-sense lending guidelines are dead for now -- lenders are afraid to offer credit even to people with very high credit ratings and long histories of making mortgage payments on time if they can't prove sufficient income on their tax forms. These tax forms are designed to prove the opposite -- less income reduces tax liability, so the income on a Schedule C is a worst-case scenario. Consequently, self-employed people with 800 credit ratings can no longer get loans, even for half of the monthly payment they have made for twenty years. If we try to fix it on a state level, the lenders fear they will be sued in federal court. 

Already, we are seeing less activity in the real estate sector in Arizona, lower home values, and more people unable to get out from under their high-interest loans. I am hearing from constituents that they are not able to even downsize to a less expensive home. Something must be done to avoid the threat to our economy and our ability to afford a home, but the consensus was that the alternative underwriting standards in my bill, which aimed at giving lenders more flexibility to lend to low-risk customers, would have paradoxically tightened credit further. 

So our conclusion was that the only course of action is to change our direction to a Senate Concurrent Memorial (SCM) from the current bill form. In that way we will state the problem and solution clearly, and urge Congress and the President to act accordingly to restore health to our lending system and fair mortgages to Arizonans who deserve those loans. I am now seeking a vehicle SCM to strike my new language in order to move this action forward. Fortunately, on this bill, some powerful conservative Republicans and I see eye to eye, so I believe I will be successful.

--> Comment on I-11 corridor project: While this won't be coming through the legislature for some time, the Arizona Department of Transportation is conducting a joint study with Nevada on the proposed I-11 transportation corridor, which is centered around a new interstate highway link between Phoenix and Las Vegas, also includes a passenger rail component in the median, and  extends through Tucson to Nogales. 

If you are so inclined, there is now an opportunity to add your opinions to the study. I have commented that passenger and freight rail options from Nogales to Vegas need to be included to make this truly responsive to 21st-century needs. I also advocate that the southern portion connecting Casa Grande and Nogales should not be a wholly new corridor to the west of I-10, requiring all new infrastructure, and directing business away from the City of Tucson while endangering Saguaro Park West and Avra Valley water resources. A preferable option would be to improve the existing I-10 / I-19 corridor and dual-sign it as I-11. The voices saying that would require double-decking are wrong -- the existing right of way could be expanded to 12 lanes in the existing profile, if money was made available. At the Prince Road interchange during recent construction, six lanes were routed comfortably under half of the new overpass. 

You can add your comments to the study at this link: www.i11study.com

Thanks for your continuing faith in me as your Senator. 

Steve

Steve Farley

Senator, District 9, Tucson

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