Budget woes to close ACC's Tucson office

With funds drying up, the Arizona Corporation Commission voted Monday to shutter the Tucson office of its incorporating division until lawmakers fix the problem.

Kris Mayes, who chairs the panel, said the three Republicans agreed that was the best alternative to a bad situation. She said the staffers from that office, along with others in the Phoenix office, will instead be working on regulation and rate-hike requests by Arizona utilities.

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And all staffers in the incorporating division will have to take off one day without pay every two weeks.

Monday’s move will do more than make life less convenient for southern Arizona residents who want to take their papers to incorporate new firms directly into the office, whether to cut a few days off the turnaround time or just to ask some questions.

Mayes said the entire process of getting incorporated — legally necessary to do business in this state — will start to slow down everywhere.

Right now, she said, it takes about 29 days to process the paperwork. Mayes said that, with fewer staffers, that figure will stretch to 42 days in November and 55 the month after that.

And if lawmakers don’t fix the problem by then, Mayes said the time to get incorporated could reach 264 days by June.

Even an “expedited” processing, which costs extra, will no longer take just five days. Mayes said that will slow up to a turnaround of more than a month by June.

The problem isn’t that the money isn’t coming in. The commission is collecting about $233,000 each month in fees from companies seeking incorporation.

State lawmakers, in a budget-balancing maneuver, stopped giving the agency funds from the treasury and instead told it to simply use the dollars coming in.

But that language was in the same bill as other things Gov. Jan Brewer did not like, including permanent repeal of the statewide property tax. So when she vetoed the bill, the authority of the commission to spend the cash it has evaporated.

And, so far, legislative leaders have shown little interest in returning for a special session just to fix that problem and similar ones at other state agencies.

Mayes said her agency does have some extra money in a separate division that deals with utilities. So, rather than lay off the staffers from the incorporating division, they will be reassigned.

She said her agency is legally precluded from using the money it has in the utilities division to keep the incorporating division running.

One advantage of that action, she said, is it will enable the utilities division to catch up on some work. But Mayes said it also means the staffers will be available once the Legislature makes the necessary fixes to the law.

But Mayes said that, if lawmakers don’t act soon, commissioners will have to decide whether to take more serious actions — including possibly litigation.

Mayes, who is an attorney, noted that the Arizona Corporation Commission exists as part of the state constitution. And, generally speaking, courts have said one branch of government cannot abolish or cripple other branches by denying them necessary funding.

“We’ve definitely looked at the case law on this issue,” Mayes said.

“For now, we don’t believe it’s constructive to file a lawsuit or go down that road,” she continued. “But, at some point, the commission has a constitutional duty and the Legislature and the governor have a responsibility to fund our divisions.”

The two Democrats on the commission voted to shift incorporating division personnel but keep the Tucson office open by shifting some rent costs to the agency’s division that regulates the sale of securities.