Arizona Open Hand Act

Mar 24

Arizona Open Hand Act – Plain Language Summary

What This Bill Does

The Arizona Open Hand Act makes sure that elected officials and appointed regulators are honest, transparent, and accountable to the people they serve.

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Three Main Parts

1. No Secret Deals – Full Disclosure

Officials must tell the public what they own and when they buy or sell:

- Every year, officials must publicly report all investments they own – including stocks, real estate, and other assets worth over $5,000. This includes what their spouse, children, and family businesses own.

- Within 7 days of buying or selling an investment worth over $1,000, officials must report it publicly.

- If an official sponsors a bill, they must disclose any investments they bought in the previous 6 months that would be affected by that bill.

Officials cannot trade investments while a bill they are working on is pending, and they must wait 7 days after a vote to trade.

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2. No Revolving Door – Preventing Pay-to-Play

Former officials cannot cash in on their government service:

- For 5 years after leaving office, a former official cannot take a job with a company they personally regulated or voted on – unless the job matches their real qualifications and pays a normal salary.

- This also applies to their spouse – no hiring the spouse as a workaround.

- For 2 years, former officials cannot lobby or informally influence their old colleagues on behalf of a company.

If a company hires a former official, it cannot give campaign contributions to that official for one year.

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3. No Secret Meetings – Lobbying Transparency

Every meeting between an official and a business interest is logged:

- Officials must record who they met with, who the person represented, what was discussed, and what actions were requested or promised.

- Logs are submitted quarterly to an Arizona university, which makes them searchable online for the public.

- A state university runs the database at no cost to taxpayers.

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Who Is Covered

- State legislators

- Governor, Attorney General, Treasurer, Superintendent, Mine Inspector, Corporation Commissioners

- Appointed regulators (utility commissioners, banking regulators, etc.)

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Enforcement

Violation: Penalty

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Failure to disclose a trade or asset: Up to $5,000 civil fine

Trading during a pending bill or within 7 days of a vote: Up to $5,000 civil fine

Taking a prohibited job after leaving office: Up to $10,000 fine; forfeit compensation; potential felony for willful corrupt intent

Failure to log a lobbying meeting: Up to $500 fine (with a 30-day fix-it period for honest mistakes)

Complaints can be filed with the Arizona Independent Redistricting Commission, which refers them for investigation – ensuring politics does not interfere with enforcement.

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What This Bill Does NOT Do

- Does not prevent officials from owning a home or buying a second home in Maricopa County

- Does not force officials to sell real estate or investments

- Does not prevent officials from returning to their prior career after leaving office

- Does not prevent citizens from contacting their elected officials

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AN ACT

AMENDING TITLE 38, CHAPTER 4, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 38-731; AMENDING TITLE 41, CHAPTER 7, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTIONS 41-1233.02, 41-1233.03, 41-1233.04, 41-1233.05, AND 41-1233.06; RELATING TO CONFLICT OF INTEREST.

Title: Arizona Open Hand Act

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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ARIZONA:

Section 1. Findings and declarations

The Legislature finds and declares:

1. The public trust requires that state elected officials and appointed regulators exercise their duties without actual or apparent conflicts of interest arising from personal financial transactions.

2. The ability of public officials to trade securities, real property, commodities, or other assets based on non-public information obtained through their official duties undermines public confidence in the integrity of government.

3. Limited restrictions on trading and asset transfers during the pendency of legislation or rulemaking in which an official participates, combined with reasonable cooling-off periods after such actions, balance the legitimate interests of public officials in managing their personal finances with the public's interest in ethical government.

4. The Arizona State Retirement System provides a professionally managed, diversified, and prudent investment vehicle that allows public servants to save for retirement while avoiding conflicts of interest inherent in individual asset ownership.

5. The public has a compelling interest in preventing former public officials from exploiting their prior positions for personal gain by accepting employment or compensation that is unrelated to their qualifications and that provides compensation substantially exceeding market rates.

6. Maintaining public records of communications between public officials and private interests serves the public interest in transparency and accountability.

7. Independent review of ethics complaints strengthens public confidence in enforcement and ensures that investigations are free from political influence.

8. The Arizona Supreme Court's decision in Fann v. Kemp, 253 Ariz. 490 (2022), establishes that legislative privilege protects communications that are an integral part of the deliberative and communicative processes relating to proposed legislation. This act respects that privilege by limiting disclosure requirements to metadata and by providing explicit exceptions for privileged communications.

9. The public has a legitimate interest in knowing whether a legislator who sponsors or cosponsors a bill has recently acquired assets in companies, real property, or other investments that would be affected by that bill. Disclosure of such acquisitions promotes transparency and allows the public to assess potential conflicts of interest.

10. Annual disclosure of assets by public officials, including assets of spouses, dependent children, and controlled organizations, allows the public to identify potential conflicts and hold officials accountable.

11. Compensation exceeding one hundred fifty percent of the prevailing wage for comparable positions is presumptively indicative of delayed compensation for prior official acts, as it cannot be explained by market forces alone.

12. The ten percent ownership threshold for controlled organizations is a reasonable standard for identifying entities over which an official exercises meaningful control, consistent with similar standards in other ethics and disclosure laws.

13. Primary residences and secondary residences used for official business do not present the same conflict-of-interest risks as investment properties. Officials must be able to buy, sell, and refinance their homes without restriction. Accordingly, this act exempts such properties from transaction restrictions while still requiring full disclosure, balancing transparency with the practical needs of public officials.

Sec. 2. Title 38, Chapter 4, Article 1, Arizona Revised Statutes, is amended by adding section 38-731, to read:

38-731. Asset transaction restrictions; disclosure requirements; state elected officials; appointed regulators; penalties

A. In this section, unless the context otherwise requires:

1. "Appointed regulator" means any individual appointed to serve on a board, commission, or agency of this state who exercises regulatory authority over business entities, including any member of the corporation commission, the Arizona utility regulatory commission, the banking department, the department of insurance and financial institutions, and any other state board or commission with licensing, permitting, or rate-setting authority over private concerns. Appointed regulator does not include individuals serving in purely advisory capacities without final decision-making authority.

2. "Asset" means any real property, security, commodity, futures contract, option, derivative instrument, digital asset, cryptocurrency, or other investment vehicle having monetary value, including any interest in a publicly traded concern, privately traded concern, real estate investment trust, limited partnership, or other business entity.

3. "Commodity" has the same meaning prescribed in section 47-9102.

4. "Controlled organization" means any corporation, partnership, limited liability company, trust, or other business entity in which a covered individual, the covered individual's spouse, or the covered individual's dependent child, individually or collectively, holds a direct or indirect equity interest of ten percent or more or possesses voting control of ten percent or more of the outstanding voting securities or interests.

5. "Covered individual" means a state elected official or appointed regulator.

6. "Dependent child" means any child of a covered individual who is under eighteen years of age or who is a student under twenty-three years of age and for whom the covered individual provides more than fifty percent of financial support.

7. "Pending matter" means:

(a) Any bill, resolution, or other legislative measure that has been introduced in the legislature and has not yet been finally acted upon by the legislature.

(b) Any proposed rule, regulation, or rate determination that has been formally noticed for public comment and has not yet been finally adopted or rejected by the agency.

8. "Publicly traded concern" means any business entity whose securities are traded on a national securities exchange or through an over-the-counter market.

9. "Real property" means land and any improvements thereon, including any interest in a residential, commercial, agricultural, or undeveloped property.

10. "Security" has the same meaning prescribed in section 44-1801.

11. "State elected official" means any individual holding elective office in the executive or legislative branch of this state, including members of the legislature, the governor, the secretary of state, the attorney general, the state treasurer, the superintendent of public instruction, the state mine inspector, and members of the corporation commission.

12. "Transaction" means any purchase, sale, exchange, transfer, acquisition, or disposition of an asset, including:

(a) Trading of securities or commodities.

(b) Purchase or sale of real property.

(c) Acquisition or disposition of any other asset having a value of five thousand dollars or more in any single transaction or series of related transactions.

B. Prohibition on transactions during pendency of matters.

1. A covered individual shall not engage in any transaction involving an asset if:

(a) A pending matter that would affect the value of that asset is before the legislature or agency on which the covered individual serves; and

(b) The covered individual personally participates in or has knowledge of the pending matter.

2. A covered individual shall not cause or permit any controlled organization to engage in any transaction involving an asset if:

(a) A pending matter that would affect the value of that asset is before the legislature or agency on which the covered individual serves; and

(b) The covered individual personally participates in or has knowledge of the pending matter.

3. The prohibition prescribed in this subsection applies during the period beginning on the date the pending matter is introduced or formally noticed and ending on the date the pending matter is finally acted upon by the legislature or agency.

C. Cooling-off period after official actions.

1. A covered individual shall not engage in any transaction involving an asset if:

(a) The covered individual voted on, proposed, or otherwise personally participated in a final action of the legislature or agency that affects the value of that asset; and

(b) The transaction occurs within seven calendar days after the date of that final action.

2. A covered individual shall not cause or permit any controlled organization to engage in any transaction involving an asset if:

(a) The covered individual voted on, proposed, or otherwise personally participated in a final action of the legislature or agency that affects the value of that asset; and

(b) The transaction occurs within seven calendar days after the date of that final action.

3. For purposes of this subsection, "final action" includes:

(a) The passage or defeat of legislation by the legislature or the signing or veto of legislation by the governor.

(b) The adoption or rejection of a proposed rule, regulation, or rate determination by an agency.

D. Exceptions. The prohibitions prescribed in subsections B and C of this section do not apply to:

1. Interests held through the Arizona State Retirement System, including any defined contribution plan, defined benefit plan, or other investment account administered by the Arizona State Retirement System.

2. Interests held in a diversified mutual fund, exchange-traded fund, or similar investment vehicle that is publicly available and in which the covered individual does not exercise control over the specific assets held by the fund.

3. Transactions that occur pursuant to a binding, pre-existing contract, including an automatic dividend reinvestment plan or a pre-approved trading plan established before the covered individual had knowledge of the pending matter or final action.

4. Transactions involving real property that constitutes the covered individual's primary residence, provided that:

(a) The property is actually used as a primary residence by the covered individual, the covered individual's spouse, or the covered individual's dependent child for a substantial portion of the year;

(b) The covered individual does not claim any depreciation, expense deduction, or other tax benefit associated with the property that is not available for a primary residence;

(d) The property is not held for rental or commercial use.

5. Transactions involving real property that constitutes the covered individual's secondary residence located in Maricopa county for the purpose of conducting official business, provided that:

(a) The property is actually used as a secondary residence by the covered individual, the covered individual's spouse, or the covered individual's dependent child for a substantial portion of the year;

(b) The covered individual does not claim any depreciation, expense deduction, or other tax benefit associated with the property that is not available for a primary residence;

(d) The property is not held for rental or commercial use.

6. Transactions by the spouse or dependent child of a covered individual if the spouse or dependent child did not have access to non-public information from the covered individual.

7. Transactions by a controlled organization if:

(a) The covered individual, the covered individual's spouse, and the covered individual's dependent child, collectively, did not direct, approve, or have knowledge of the transaction; and

(b) The transaction was conducted by an independent manager who had no communication with the covered individual regarding the transaction.

8. Transactions involving real property with a fair market value of less than five thousand dollars, provided that the transaction is not part of a series of related transactions that cumulatively exceed five thousand dollars.

E. Transaction disclosure requirement.

1. A covered individual shall file with the secretary of state a disclosure statement for:

(a) Any transaction subject to this section engaged in by the covered individual.

(b) Any transaction subject to this section engaged in by the spouse or dependent child of the covered individual.

2. The disclosure statement shall be filed within seven calendar days after the transaction occurs and shall include:

(a) The date of the transaction.

(b) A description of the asset involved, including:

(i) For securities or commodities: the name of the security or commodity.

(ii) For real property: the location and type of property.

(iii) For other assets: a general description sufficient to identify the asset.

(d) The dollar amount of the transaction, reported in the following ranges:

(i) $1,000 to $15,000.

(ii) $15,001 to $50,000.

(iii) $50,001 to $100,000.

(iv) $100,001 to $250,000.

(v) $250,001 or more.

(e) The identity of the person or entity who engaged in the transaction (the covered individual, spouse, dependent child, or controlled organization).

3. The secretary of state shall make all disclosure statements filed under this subsection available to the public on the secretary of state's website in a searchable format within seven calendar days after receipt.

4. A covered individual who has no transactions to disclose during a calendar year shall file a statement to that effect on or before January 31 of the following year.

F. Annual disclosure of assets.

1. On assuming office or appointment, and annually thereafter on or before April 15, each covered individual shall file with the secretary of state a sworn statement disclosing:

(a) All assets in which the covered individual, the covered individual's spouse, or the covered individual's dependent child holds a direct or indirect interest, including:

(i) Securities and commodities.

(ii) Real property.

(iii) Other assets having a value of five thousand dollars or more.

(b) All assets held by any controlled organization.

(i) A description sufficient to identify the asset.

(ii) The dollar amount of the asset, reported in the following ranges:

(A) $1,000 to $15,000.

(B) $15,001 to $50,000.

(D) $100,001 to $250,000.

(E) $250,001 or more.

(iii) The identity of the person or entity who holds the asset (the covered individual, spouse, dependent child, or controlled organization).

2. The sworn statement required under this subsection is a public record open to inspection under title 39, chapter 1.

3. A covered individual who has no assets to disclose shall file a statement to that effect.

G. Real property transactions not otherwise restricted. Nothing in this section prohibits a covered individual from holding, acquiring, transferring, selling, leasing, or managing real property located within or outside this state, subject to the disclosure requirements and time-out periods prescribed in this section. A covered individual may retain, acquire, or dispose of real property in the same manner as any other citizen, subject to existing conflict-of-interest laws and the restrictions of this section.

H. Enforcement.

1. A person who knowingly violates subsection B, C, E, or F of this section is subject to:

(a) A civil penalty of not more than five thousand dollars for each violation, to be recovered in an action brought by the attorney general.

(b) Any other remedy available under law.

2. The attorney general may investigate suspected violations of this section and may issue subpoenas, examine witnesses, and compel the production of documents in connection with any investigation.

I. The attorney general shall adopt rules to implement this section within one hundred eighty days after the effective date of this section, including rules defining the procedures for filing disclosure statements, the method for determining dollar amount ranges, the criteria for determining when a person has access to non-public information for purposes of subsection D, paragraph 6 of this section, and the valuation methods for assets for purposes of annual disclosure.

Sec. 3. Title 41, Chapter 7, Article 1, Arizona Revised Statutes, is amended by adding section 41-1233.02, to read:

41-1233.02. Sponsorship asset acquisition disclosure; state elected officials

A. In this section, unless the context otherwise requires:

1. "Affected by the bill" means that the bill, if enacted, would have a direct and substantial economic impact on the asset, including through:

(a) Changes to tax rates or tax treatment.

(b) New or modified regulatory requirements.

(d) Licensing, permitting, or rate determinations.

(e) Zoning or land use changes.

(f) Any other provision that materially alters the legal or economic environment in which the asset is held or operated.

2. "Asset" has the same meaning prescribed in section 38-731.

3. "Asset acquisition" means the purchase, acquisition, or receipt of any asset, including through purchase, exchange, gift, inheritance, or any other means, for consideration of one thousand dollars or more in any single transaction or series of related transactions, or for assets acquired without monetary consideration, with a fair market value of one thousand dollars or more.

4. "Controlled organization" has the same meaning prescribed in section 38-731.

5. "Dependent child" has the same meaning prescribed in section 38-731.

6. "Real property" has the same meaning prescribed in section 38-731.

7. "Security" has the same meaning prescribed in section 38-731.

8. "State elected official" has the same meaning prescribed in section 38-731.

B. Disclosure required.

1. Any state elected official who sponsors or cosponsors a bill shall file with the secretary of state a disclosure statement at the time the bill is introduced or at the time the official's name is added as a sponsor or cosponsor.

2. The disclosure statement shall identify:

(a) Any asset acquisition made by the official, the official's spouse, the official's dependent child, or any controlled organization within the six months immediately preceding the date of sponsorship or cosponsorship, where the asset acquired would be affected by the bill.

(b) The date of each such asset acquisition.

(i) For securities: the name of the security.

(ii) For real property: the location and type of property.

(iii) For other assets: a general description sufficient to identify the asset.

(d) The dollar amount of the asset acquisition, reported in the following ranges:

(i) $1,000 to $15,000.

(ii) $15,001 to $50,000.

(iii) $50,001 to $100,000.

(iv) $100,001 to $250,000.

(v) $250,001 or more.

(e) The identity of the person or entity who made the acquisition (the official, spouse, dependent child, or controlled organization).

3. If the official has no asset acquisitions to disclose under this subsection, the disclosure statement shall so state.

C. Public availability.

1. The secretary of state shall make all disclosure statements filed under this section available to the public on the secretary of state's website in a searchable format within seven calendar days after receipt.

2. Each disclosure statement shall be associated with the bill to which it relates and shall remain publicly available for not less than ten years.

D. Relationship to other disclosure requirements. Disclosure under this section does not relieve any official of any other disclosure requirement under this title or any other law.

E. Enforcement.

1. A person who knowingly fails to file a disclosure statement required by this section is subject to:

(a) A civil penalty of not more than five thousand dollars for each violation, to be recovered in an action brought by the attorney general.

(b) Any other remedy available under law.

2. The attorney general may investigate suspected violations of this section and may issue subpoenas, examine witnesses, and compel the production of documents in connection with any investigation.

Sec. 4. Title 41, Chapter 7, Article 1, Arizona Revised Statutes, is amended by adding section 41-1233.03, to read:

41-1233.03. Post-employment restriction; employment with certain for-profit concerns; campaign contribution restriction; criminal penalties

A. In this section, unless the context otherwise requires:

1. "Appointed regulator" has the same meaning prescribed in section 38-731.

2. "Compensation" means any payment, benefit, or thing of value provided in exchange for services, including salary, wages, bonuses, commissions, consulting fees, speaking fees, honoraria, stock options, restricted stock units, equity grants, retirement contributions, health insurance, and any other form of remuneration, whether paid directly or indirectly through any intermediary.

3. "Constructive employment" means any arrangement by which a former official, or the spouse or dependent child of a former official, receives compensation in exchange for services or as a result of the former official's prior position, including serving as an independent contractor, consultant, advisor, board member, or officer.

4. "Controlled organization" has the same meaning prescribed in section 38-731.

5. "Dependent child" has the same meaning prescribed in section 38-731.

6. "For-profit concern" means any corporation, partnership, limited liability company, sole proprietorship, or other business entity organized for the purpose of generating profit, but does not include any nonprofit organization exempt from taxation under section 501(c) of the Internal Revenue Code.

7. "Matter" means any specific contract, sale, purchase, service, decision, legislative proposal, bill, rulemaking proceeding, permit, license, rate determination, zoning decision, land use decision, or other official action before a public agency.

8. "Prevailing wage" means the average wage paid to persons in the same or substantially similar occupation in the same geographic locality, as determined by the Arizona Department of Administration or, if unavailable, by the Arizona Office of Economic Opportunity using the most recent available data from the Bureau of Labor Statistics or equivalent sources.

9. "Pre-existing line of work" means the principal occupation or profession in which a person was engaged for compensation for at least two years immediately preceding the person's first assumption of office as a state elected official or appointed regulator, as demonstrated by:

(a) Financial disclosure statements filed under section 38-444 or its predecessor statutes;

(b) Tax returns;

(d) Other verifiable documentation.

10. "Qualified position" means a position of employment for which the former official possesses the education, experience, and expertise that would reasonably qualify the former official for such position based on the former official's documented qualifications, education, and work history prior to assuming office.

11. "State elected official" has the same meaning prescribed in section 38-731.

B. Prohibition on certain post-employment positions. A person who has served as a state elected official or appointed regulator shall not, for a period of five years after the date the person ceases to hold such office or position:

1. Accept employment, constructive employment, or compensation with any for-profit concern if:

(a) The for-profit concern was a party to any matter germane to the official's office during the official's term of office;

(b) The official, during the official's term of office, personally participated in or made a decision regarding that matter; and

(i) The position is not a qualified position based on the former official's education, experience, and expertise as demonstrated by the former official's documented qualifications prior to assuming office; or

(ii) The total compensation offered for the position exceeds one hundred fifty percent (150%) of the prevailing wage for comparable positions in the same field and geographic locality; or

2. Knowingly assist a for-profit concern in employing, engaging, or providing compensation to the spouse or dependent child of the former official in violation of subsection C of this section; or

3. Serve as an officer, director, or manager of any controlled organization that:

(a) Was a party to any matter germane to the official's office during the official's term of office; and

(b) The official, during the official's term of office, personally participated in or made a decision regarding that matter.

C. Prohibition on employment of spouse or dependent.

1. A for-profit concern described in subsection B, paragraph 1 of this section shall not, for a period of five years after the date a person ceases to hold office as a state elected official or appointed regulator, employ or enter into any contract for services with the spouse or dependent child of the former official if:

(a) The former official personally participated in or made a decision regarding a matter involving the for-profit concern during the former official's term of office; and

(b) The spouse or dependent child did not hold substantially similar employment with the for-profit concern for at least two years immediately preceding the former official's first assumption of office.

2. This subsection does not apply if the spouse or dependent child possessed, at least two years before the former official first assumed office, documented education, training, or experience in the field for which the spouse or dependent child is employed that would independently qualify the spouse or dependent child for the position.

D. Exception for pre-existing line of work. The prohibition prescribed in subsection B of this section does not apply to a former state elected official or appointed regulator if:

1. The former official demonstrates that the employment is in the former official's pre-existing line of work, as defined in subsection A, paragraph 9 of this section; and

2. The former official files with the attorney general, before accepting such employment, a sworn statement:

(a) Identifying the pre-existing line of work and providing documentation establishing such line of work;

(b) Identifying the for-profit concern and the position to be held;

(c) Certifying that the position is in the same line of work and that the compensation does not exceed one hundred fifty percent (150%) of the prevailing wage for comparable positions; and

3. The attorney general does not, within sixty days after the filing of the sworn statement, issue a determination that the employment does not qualify for the exception.

E. Other exceptions. The prohibition prescribed in subsection B of this section does not apply to:

1. A former official who is employed by the former official's own business entity, provided that the entity was established and operating prior to the official's term of office and the official does not represent any third party.

2. A former official who provides expert testimony or information when called by a legislative committee or public agency, provided that the official receives no compensation beyond reasonable expenses.

3. A former official who communicates with a public agency solely for the purpose of complying with a legal obligation, including tax compliance, regulatory reporting, or responding to an investigation.

F. Advisory opinions.

1. A state elected official or appointed regulator may request a binding advisory opinion from the attorney general regarding whether a proposed employment, constructive employment, or compensation arrangement would violate this section.

2. The attorney general shall issue a written advisory opinion within sixty days after receiving a complete request.

3. An advisory opinion issued under this subsection is binding on the attorney general and any other state agency with respect to the specific arrangement described, unless the requester omitted or misrepresented material facts.

4. A former official who acts in reasonable reliance on an advisory opinion issued under this subsection is immune from any civil penalty or other enforcement action under this section with respect to the arrangement described in the opinion.

G. Informal advocacy restriction.

1. For a period of two years after ceasing to hold office as a state elected official or appointed regulator, a former official shall not knowingly communicate with any current state elected official, appointed regulator, or employee of the agency on which the former official served for the purpose of influencing any matter of office, if:

(a) The communication is made on behalf of any for-profit concern;

(b) The former official receives compensation, directly or indirectly, for the communication; and

2. This subsection does not apply to:

(a) Communications that are part of a public proceeding;

(b) Communications made by the former official on the former official's own behalf; or

H. Campaign contribution restriction.

1. A for-profit concern that employs or provides compensation to a former state elected official or appointed regulator within one year after the official ceases to hold office, where the employment or compensation is not prohibited under this section, shall not make any campaign contribution to the former official personally or to any political committee established for the benefit of the former official for a period of one year after the commencement of such employment or compensation arrangement.

2. This subsection applies to campaign contributions made by:

(a) The for-profit concern itself;

(b) Any officer of the for-profit concern; and

3. This subsection does not apply to contributions made by individuals in their personal capacity that are not reimbursed or directed by the for-profit concern.

4. A person who knowingly violates this subsection is subject to:

(a) A civil penalty of not more than five thousand dollars for each contribution made in violation of this subsection, to be recovered in an action brought by the attorney general;

(b) Forfeiture of any contribution made in violation of this subsection; and

I. Certification and determination process.

1. A former state elected official or appointed regulator who seeks to accept employment subject to the exception in subsection D of this section shall file a sworn statement with the attorney general at least ninety days before the proposed commencement of employment.

2. The attorney general shall review the sworn statement and may request additional documentation. The attorney general shall issue a written determination within sixty days after receiving a complete filing.

3. If the attorney general determines that the employment qualifies for the exception, the former official may accept the employment. If the attorney general determines that the employment does not qualify, the former official may appeal the determination to the superior court in Maricopa county within thirty days.

4. A former official who accepts employment without obtaining a favorable determination from the attorney general does so at the risk of violating this section.

J. Enforcement.

1. Civil penalties. A person who knowingly violates subsection B, C, or G of this section is subject to:

(a) A civil penalty of not more than ten thousand dollars for each violation, to be recovered in an action brought by the attorney general.

(b) Forfeiture of any compensation received in connection with the violation.

2. Criminal penalties.

(a) A person who willfully violates subsection B, C, or G of this section is guilty of a class 6 felony. The court shall order, in addition to any other sentence imposed, that the person forfeit any compensation received in connection with the violation.

(b) A person who willfully violates subsection B, C, or G of this section with the intent to influence or be rewarded for any official action is guilty of a class 5 felony. The court shall order, in addition to any other sentence imposed, that the person forfeit any compensation received in connection with the violation and pay restitution to the state in the amount of any economic benefit received as a result of the violation.

3. Independent ethics commission referral.

(a) Any person may file a complaint alleging a violation of this section with the Arizona independent redistricting commission, which shall serve as the receiving body for ethics complaints until such time as the legislature establishes a separate independent ethics commission.

(b) The commission shall review complaints and, upon a finding of probable cause, refer the matter to the attorney general for investigation and enforcement.

(c) If the attorney general declines to pursue an enforcement action within ninety days after receiving a referral under this subsection, the commission may request that the attorney general provide a written explanation. The commission may also refer the matter to the county attorney of the county in which the alleged violation occurred.

4. The attorney general may investigate suspected violations of this section and may issue subpoenas, examine witnesses, and compel the production of documents in connection with any investigation.

5. The supreme court may adopt rules establishing procedures for the commission's review of ethics complaints under this section.

K. The attorney general shall adopt rules to implement this section within one hundred eighty days after the effective date of this section, including rules defining the scope of "qualified position," the method for determining prevailing wage, and the documentation required to establish pre-existing line of work.

Sec. 5. Title 41, Chapter 7, Article 1, Arizona Revised Statutes, is amended by adding section 41-1233.04, to read:

41-1233.04. Lobbying and meeting log; state elected officials; appointed regulators; university administration

A. In this section, unless the context otherwise requires:

1. "Appointed regulator" has the same meaning prescribed in section 38-731.

2. "Designated university" means a public university in this state that has a school or department of political science, public policy, or public administration and that enters into an agreement with the secretary of state and the attorney general to administer the logs required under this section.

3. "For-profit concern" has the same meaning prescribed in section 41-1233.03.

4. "Lobbying communication" means any direct communication, whether in person, by telephone, by electronic means, or in writing, between a state elected official or appointed regulator and any person acting on behalf of a for-profit concern, where the communication concerns a matter of office pending or reasonably anticipated to come before the official or the agency on which the official serves.

5. "Matter of office" has the same meaning prescribed in section 41-1233.03.

6. "State elected official" has the same meaning prescribed in section 38-731.

B. Log requirement.

1. Each state elected official and appointed regulator shall maintain a log of all lobbying communications that occur during the official's term of office.

2. The log shall be maintained in a standardized format prescribed by the secretary of state in consultation with the designated university. At a minimum, the log shall include for each communication:

Field Description

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Date and time The date and approximate time of the communication

Contact person(s) The name(s) of the individual(s) with whom the official communicated

Speaking on behalf of The for-profit concern(s) on whose behalf the individual communicated

Subject(s) of conversation A brief description of the subject matter discussed, not exceeding one sentence

Action(s) requested by petitioner Any specific action the person requested the official to take or refrain from taking

Action(s) promised by petitioner Any specific action the person offered or promised to take in connection with the communication

Action(s) requested by official Any specific action the official requested the person to take or refrain from taking

Action(s) promised by official Any specific action the official offered or promised to take in connection with the communication

Notes Any additional information the official deems relevant, not to exceed 100 words

3. The log shall be completed within seven calendar days after each lobbying communication.

C. Exceptions. The logging requirement prescribed in subsection B of this section does not apply to:

1. Communications that are part of a public proceeding, including legislative committee hearings, public agency meetings, or any proceeding required to be open to the public under title 38, chapter 3, article 3.1.

2. Communications between a state elected official and another state elected official or between an appointed regulator and another appointed regulator concerning a matter of office.

3. Communications that are part of a legislative caucus, conference committee, or other proceeding exempt from open meeting law under A.R.S. § 38-431.08.

4. Communications between an official and a constituent who is not acting on behalf of a for-profit concern, unless the communication otherwise meets the definition of lobbying communication.

5. Communications protected by the attorney-client privilege or any other privilege recognized under Arizona law, including the legislative privilege recognized in Fann v. Kemp, 253 Ariz. 490 (2022).

6. Communications that are purely political in nature, including campaign-related communications, news releases, and speeches made outside the official's capacity as a public officer.

D. University administration.

1. The secretary of state, in consultation with the attorney general, shall enter into an agreement with a designated university to administer the logs required under this section as an academic research project within the university's school or department of political science, public policy, or public administration.

2. The designated university shall:

(a) Maintain a publicly accessible, searchable online database of all logs submitted under this section.

(b) Provide training and technical assistance to state elected officials and appointed regulators regarding compliance with this section.

(c) Conduct academic research using the logs, including analysis of lobbying patterns, conflicts of interest, and the effectiveness of transparency measures.

(d) Publish an annual report summarizing the research findings and making recommendations for improvements to the transparency and ethics framework.

3. The designated university may accept grants, donations, and other funding from public and private sources to support the administration of this section, provided that such funding is disclosed on the university's website.

4. The designated university shall not charge any fee to the state, to any state elected official, or to any appointed regulator for the administration of this section.

E. Submission of logs.

1. Each state elected official and appointed regulator shall submit a copy of the log to the designated university on a quarterly basis, no later than the last day of January, April, July, and October of each year, covering the preceding calendar quarter.

2. The designated university shall make all logs submitted under this section available to the public on the university's website in a searchable format within fourteen days after receipt.

3. Logs submitted under this section are public records, except that any portion of a log that would disclose information protected by legislative privilege under the Arizona Constitution and Arizona Supreme Court precedent shall be redacted before public posting.

F. Retention. Each state elected official and appointed regulator shall retain all logs required under this section for a period of not less than five years from the date the log was created, or for the duration of the official's term of office, whichever is longer.

G. Enforcement.

1. A person who knowingly violates this section is subject to:

(a) A civil penalty of not more than five hundred dollars for each violation, to be recovered in an action brought by the attorney general.

(b) Any other remedy available under law.

2. Good faith defense. It is an affirmative defense to any penalty under this section that the official or regulator:

(a) Acted in good faith and made reasonable efforts to comply with this section; and

(b) Corrected any noncompliance within thirty days after receiving notice from the designated university or the attorney general.

3. Pattern and practice violations. If the attorney general determines that a state elected official or appointed regulator has engaged in a pattern or practice of knowingly failing to maintain or submit logs as required by this section, the attorney general may:

(a) Petition the superior court for an order compelling compliance;

(b) Seek a civil penalty of not more than ten thousand dollars for the pattern or practice, in addition to any penalties for individual violations; and

(c) Refer the matter to the independent ethics commission described in section 41-1233.03 for consideration of forfeiture of office.

4. The attorney general may investigate suspected violations of this section and may issue subpoenas, examine witnesses, and compel the production of documents in connection with any investigation.

H. The secretary of state and the attorney general shall adopt rules to implement this section within one hundred eighty days after the effective date of this section, including rules defining the standardized log format, the procedures for quarterly submission, and the criteria for designating a university to administer the logs.

Sec. 6. Title 41, Chapter 7, Article 1, Arizona Revised Statutes, is amended by adding section 41-1233.05, to read:

41-1233.05. 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, and to this end the provisions of this act are severable.

Sec. 7. Title 41, Chapter 7, Article 1, Arizona Revised Statutes, is amended by adding section 41-1233.06, to read:

41-1233.06. Effective date; phased implementation

A. This act is effective on January 1, 2027.

B. Sections 38-731, 41-1233.02, 41-1233.03, 41-1233.04, and 41-1233.05 apply to any person who takes office as a state elected official or appointed regulator on or after January 1, 2027.

C. Beginning January 1, 2029, this act also applies to any person who takes office as a state elected official or appointed regulator on or after January 1, 2029, including persons who previously held office and are elected or appointed to a new term.

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fred slawson

Arizona Open Hand Act

Arizona Tech Sovereignty Act