Arizona First Procurement Act
ONE PAGE SUMMARY
ARIZONA FIRST PROCUREMENT ACT
What is it?
A proposed Arizona law that gives state and local governments clear rules for buying goods and services. It prefers Arizona businesses, rewards employers who pay good wages and provide health benefits, and empowers counties to solve problems when the private market fails.
Core Provisions
Preference for Arizona Businesses
State and local contracts shall give preference to businesses that are headquartered in Arizona, pay Arizona taxes, and employ Arizona residents.
Explicit Wage and Health Benefit Preference
Contractors who voluntarily pay wages at least double the Arizona minimum wage receive a 10 point scoring advantage. Contractors who also provide employer-paid health insurance or a health savings account contribution of at least $3,000 per full time employee per year receive an additional 5 points (15 points total).
County Empowerment
When the private market fails to provide critical goods or services in a county, that county may create local solutions including publicly chartered cooperatives or nonprofit enterprises.
No Mandate, Only Incentive
Nothing in this act requires any contractor to pay any particular wage. Contractors may choose to pay lower wages and forego the preference points. This act creates voluntary incentives only.
Verification and Enforcement
Awarding agencies may request verification of wage and benefit certifications. False certification results in disqualification from state contracting for three years and repayment of contract amounts.
Relationship to Existing Law
This act does not conflict with A.R.S. section 34-321 because it mandates nothing. It offers preference points as an evaluation criterion, not a condition of bidding.
Bottom Line
This act keeps Arizona tax dollars in Arizona, rewards employers who pay good wages and health benefits, and gives counties tools to solve local market failures. It is voluntary, verifiable, and fair.
Read the full bill below.
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FULL BILL TEXT
ARIZONA FIRST PROCUREMENT ACT
AN ACT AMENDING TITLE 41, CHAPTER 23, ARIZONA REVISED STATUTES, BY ADDING A NEW ARTICLE TO BE KNOWN AS ARTICLE 7, THE ARIZONA FIRST PROCUREMENT ACT
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ARIZONA
SECTION 1. SHORT TITLE
This act shall be known and may be cited as the Arizona First Procurement Act.
SECTION 2. FINDINGS AND DECLARATIONS
The Legislature finds and declares:
1. Arizona tax dollars should support Arizona businesses and Arizona workers whenever possible.
2. State and local procurement represents hundreds of millions of dollars in annual spending.
3. Too much of that spending goes to out-of-state corporations that have no long term commitment to Arizona communities.
4. Rewarding employers who pay higher wages and provide health benefits strengthens the Arizona economy and reduces reliance on public assistance programs.
5. In some rural counties, the private market fails to provide essential goods or services, leaving communities with no options.
6. Counties should have the tools to create local solutions when the market fails them.
7. Nothing in this act shall be construed as requiring any contractor to pay any particular wage. The preferences created herein are voluntary incentives.
SECTION 3. DEFINITIONS
In this act:
1. Arizona business means a business that is headquartered in Arizona, holds a valid Arizona transaction privilege tax license, and has employed at least five full time employees in Arizona for the preceding twelve months.
2. Qualified living wage employer means a business that certifies to the awarding agency that all employees working on the contract will be paid wages at least double the Arizona minimum wage in effect at the time of the bid.
3. Qualified health benefit employer means a qualified living wage employer that also certifies it will provide employer-paid health insurance or a health savings account contribution of at least $3,000 per full time employee per year for all employees working on the contract.
4. Preference points means additional score points added to a bidder's evaluation total before final award determination.
5. Awarding agency means any state agency, board, commission, department, or political subdivision of Arizona, including counties, cities, towns, school districts, and special districts, that enters into contracts for goods or services.
SECTION 4. PREFERENCE FOR ARIZONA BUSINESSES
A. For any state or local contract with an estimated value of $50,000 or more, the awarding agency shall give a preference to Arizona businesses.
B. The preference shall be applied as five additional points added to the bidder's total score before final award determination.
C. A bidder that is not an Arizona business shall receive zero preference points under this section.
SECTION 5. EXPLICIT WAGE AND HEALTH BENEFIT PREFERENCE
A. For any state or local contract with an estimated value of $100,000 or more, the awarding agency shall apply the following preference points:
1. Base preference for Arizona businesses under Section 4: 5 points.
2. Additional preference for a qualified living wage employer: 10 points.
3. Additional preference for a qualified health benefit employer: 5 points.
B. The total maximum preference points available under this act are 20 points.
C. A bidder that is not a qualified living wage employer may still receive the base preference of 5 points if it is an Arizona business, but shall receive no wage or health preference points.
D. A bidder that is not an Arizona business but qualifies as a qualified living wage employer or qualified health benefit employer shall receive only the wage and health preference points under subsection A, paragraphs 2 and 3, and not the base preference under Section 4.
E. Preference points shall be added to the bidder's total score before final award determination. A bidder that is not the lowest price may still be awarded the contract if its total score including preference points exceeds the lowest bidder's score by at least 5 points.
SECTION 6. VERIFICATION AND ENFORCEMENT
A. The awarding agency may request verification of wage and benefit certifications at any time before or during the contract term.
B. Verification may include payroll records, health insurance enrollment documentation, or other reasonable evidence.
C. Any bidder that falsely certifies wage or benefit status shall be:
1. Disqualified from bidding on any state or local contract for a period of three years from the date of determination.
2. Required to repay any contract amounts received under the false certification.
3. Subject to civil penalties of up to $10,000 per false certification.
D. The Attorney General may bring an action to enforce this section.
SECTION 7. NO MANDATE; VOLUNTARY INCENTIVE ONLY
A. Nothing in this act shall be construed as requiring any contractor to pay any particular wage or provide any particular benefit.
B. Contractors may choose to pay lower wages or provide fewer benefits and forego the preference points created in this act.
C. No contract shall be awarded or denied solely on the basis of wage or benefit levels. Preference points are one factor among multiple evaluation criteria.
SECTION 8. RELATIONSHIP TO EXISTING LAW
A. This act shall be construed consistently with A.R.S. section 34-321. Nothing in this act requires a prevailing wage, a project labor agreement, or a neutrality agreement as a condition of bidding on or performing a public works contract.
B. The preference points created in this act are evaluation criteria, not conditions of bidding. They do not violate A.R.S. section 34-321 or any other provision of Arizona law.
SECTION 9. COUNTY EMPOWERMENT
A. When the private market fails to provide critical goods or services in a county, the board of supervisors of that county may by resolution declare a market failure.
B. Market failure includes but is not limited to:
1. No qualified bidder for a needed good or service after two successive procurement cycles.
2. Only one qualified bidder that charges prices substantially above regional averages.
3. Withdrawal of private providers from the county resulting in no available source.
C. Upon declaration of market failure, the county may create local solutions including but not limited to:
1. Publicly chartered cooperatives.
2. Nonprofit enterprises.
3. Intergovernmental agreements with neighboring counties.
4. Direct county provision of the good or service.
D. Any local solution created under this section shall sunset after ten years unless renewed by the board of supervisors.
SECTION 10. SEVERABILITY
If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act that can be given effect without the invalid provision or application. To this end, the provisions of this act are severable.
SECTION 11. EFFECTIVE DATE
This act shall become effective ninety days after the signature of the Governor or upon the expiration of the period for gubernatorial action as provided by law.
