Sunset Review of the Arizona Commerce Authority

Report November 2017

SENATE MEMBERS

Senator Steve Smith, Co-Chair

Senator David Farnsworth

Senator Robert Meza

Senator Catherine Miranda

Senator Warren Peterson

HOUSE MEMBERS

Representative Jeff Weninger, Co-Chair

Representative Cesar Chavez

Representative Todd Clodfelter

Representative Diego Espinoza

Representative Jill Norgaard

TABLE OF CONTENTS

I. Report

A. Background

B. Committee of Reference Sunset Review Procedures

C. Committee Recommendations

II. Appendix

A. Arizona Commerce Authority’s Response to the Sunset Factors

B. Arizona Commerce Authority's PowerPoint Presentation

C. Meeting Notice

D. Minutes of the Committee of Reference Meeting

Background

Pursuant to A.R.S. § 41-2953, the Joint Legislative Audit Committee assigned the sunset

review of the Arizona Commerce Authority (ACA) to the Senate Commerce and Public Safety

and the House of Representatives Commerce Committee of Reference (COR).

Laws 2011, 2nd Special Session, Chapter 1, created the ACA and outlined its duties and

responsibilities, replacing the former Arizona Department of Commerce. The Board of Directors'

public-private partnership consists of the Governor, who serves as chairman, and includes the

CEO and 17 private sector members appointed by the Governor (9), President of the Senate (4)

and Speaker of the House of Representatives (4). There are also 12 ex officio, non-voting

members and 8 agency directors/commissioners serving as advisory members. The ACA's

mission is to grow and strengthen Arizona’s economy and facilitate the creation of quality jobs

for its citizens by supporting and attracting businesses in targeted, high-value base sectors

throughout the State.

Laws 2016, Chapter 114, continued the ACA for two years until July 1, 2018 and

implemented the recommendations of the Office of the Auditor General resulting from the

Performance Audit and Sunset Review process. The ACA annually reports the progress toward

its goals for job creation and capital investment and implemented written policies and procedures

to document decisions.

According to the ACA's FY 2016 Annual Report, there are 17,629 projected new jobs.

During the last four years, the ACA supported the projected creation of 67,659 new jobs, and

company relocation and expansion projects delivered $7 billion in capital investment

commitments. The ACA developed relationships with key markets in Mexico through more than

12 trade missions, with a special focus on the Arizona-Sonora Region. Further, the ACA entered

into a one-of-a-kind partnership with Sonora, Mexico to leverage shared economic strengths and

promote the benefits of doing business in the Arizona-Sonora Region. A.R.S. § 43-409 provides

$10,000,000 to the ACA Fund and $11,500,000 to the Arizona Competes Fund (ACF) from the

State General Fund for FY 2017. The allocation to the ACA Fund remains unchanged from prior

years. The ACF allocation is down from $16,500,000 in FY 2016 and $21,500,000 in FY 2015.

In addition, A.R.S. § 5-572(F) provides $3,500,000 funding for the ACF from the Arizona

Lottery.

Committee of Reference Sunset Review Procedures

The COR held one public meeting on Tuesday, November 14, 2017, to review and

consider the Arizona Commerce Authority's responses to the sunset factors (See Appendix A) and

to receive public testimony (See Appendix C). Testimony was received from Sandra Watson

President & CEO of the Arizona Commerce Authority, Glenn Hamer President & Chief

Executive Officer of the Arizona Chamber of Commerce, and Steven Zylstra President & Chief

Executive Officer of the Arizona Technology Council.

A video recording of the committee can found at:

http://azleg.granicus.com/MediaPlayer.php?clip_id=19949

Committee Recommendations

The Committee of Reference recommended that the Legislature:

1. Continue the ACA for eight years.

2. Codify in statute that one FTE is dedicated to Rural Economic Development and one FTE is

reserved as an ombudsman dedicated to small Business Growth, support and regulation.

September 1, 2017 Representative Jeff Weninger State Representative Legislative District 17 Chair, House Commerce Committee of Reference RE: Arizona Commerce Authority Sunset Review Dear Representative Weninger: Thank you for our correspondence dated June 5, 2017 regarding the sunset review process prescribed in Title 41, Chapter 27, Arizona Revised Statutes. Attached hereto please find the response of the Arizona Commerce Authority to the Sunset Factors set forth in A.R.S. § 41-2954(D) and the prescribed Agency Factors set forth in A.R.S. § 41-2954(F). It is our pleasure to work with the members of the Senate Commerce and Public Safety Committee and the House of Representatives Commerce Committee (collectively, the “Committee of Reference”) in this process. We are eager to discuss the successes of the ACA with the honorable members of the Committee of Reference, to answer any questions or points of clarification they may have, and to provide any further information that may be needed. Please do not hesitate to contact me at (602) 845-1252 or ACA Associate Counsel, Mike Kellis at (602) 845-1263 with any further need for information. Sincerely,

Sandra Watson President & CEO Arizona Commerce Authority cc: Senator Steve Smith, Chair, Senate Commerce & Public Safety Committee of Reference Diana Clay, House of Representatives Commerce Analyst Grant Hanna, Senate Commerce & Public Safety Analyst

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ARIZONA COMMERCE AUTHORITY Agency Response

Committee of Reference composed of Senate Commerce and Public Safety Committee and the House of Representatives Commerce Committee

1. The objective and purpose in establishing the agency and the extent to which the

objective and purpose are met by private enterprises in other states. The ACA is not aware of any State that pursues economic development on a statewide basis as a purely private enterprise, nor is the ACA aware of any State that has attempted to do so. The overarching objective and purpose of the Arizona Commerce Authority (the “ACA”) is “to provide private sector leadership in growing and diversifying the economy of this State, creating high quality employment in this State through expansion, attraction and retention of businesses and marketing this State for the purpose of expansion, attraction and retention of businesses.” See A.R.S. § 41-1502(A). We believe the ACA to be unique nationally in that it is the only economic development organization that brings together all three branches of State government, private sector leadership, and academia. The ACA is unique within the State of Arizona in that it is the only economic development organization with a statewide focus. As further described herein, the ACA provides services to small, mid-sized and businesses located in both rural and urban communities. Numerous other States pursue statewide economic development through a public-private approach that is similar to Arizona’s, including (but not limited to) Florida, Indiana, Kansas, Michigan, Rhode Island, Virginia, and Wyoming. This approach is effective in ensuring wise stewardship of taxpayer funds and constructive interaction with State and local decision makers. 2. The extent to which the agency has met its statutory objective and purpose and the

efficiency with which it has operated.

The ACA operates under the guidance of a legislatively established public-private Board of Directors, which includes the Governor, the ACA CEO, 17 private-sector CEOs, the President of the Senate, the Speaker of the House of Representatives, the State university Presidents and other public officials. See A.R.S. §41-1502(B). The approach fulfills the statutory mandate that the ACA “provide private sector leadership” (see A.R.S. § 41-1502(A)) by placing CEOs in close interaction with other stakeholders in the State with a common purpose. For example, the CEOs on the ACA Board drive insights into jobs, wages, and capital investment; the elected officials on the ACA Board provide guidance regarding fiscal policy, economic incentives, and infrastructure priorities; the educational leaders on the ACA Board contribute to the creation of a skilled and available workforce as a vital input to business growth; and municipal and other local leaders provide perspective and insight regarding the needs of the communities where businesses are located and taxpayers live and work. Joining efforts in this way most effectively supports the ACA’s mission to

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grow Arizona’s economy through the creation of high-quality jobs for its citizens. The efficiency of this organizational design is evident in the recently published results of the ACA’s latest five-year plan. As required in A.R.S. § 41-1502(A), over the last five years, the ACA has enhanced employment in this State by assisting companies in the creation of 87,132 projected new jobs. These are high quality jobs, as evidenced by their average annual wage of $52,577 – which is over 150 percent of the State’s 2011 median annual wage of $34,110. Additionally, over the last five years, ACA clients have committed to make an aggregate capital investment in the State of $9.5 billion. This incredible investment demonstrates that businesses the ACA has worked with have dedicated their financial resources to establishing a lasting presence in the State. While these numbers indicate the ACA’s private and public-sector leadership in growing the economy of the State, the ACA has also been successful in diversifying the economy of the State, pursuant to the statutory mandate set forth above. Historically, the State has realized economic vitality concentrated in the real estate, construction and retail sectors. The ACA has and will continue to significantly diversify this focus by targeting the following high-value industries:

1. Aerospace & Defense 2. Bioscience & Healthcare 3. Business & Financial Services (including data centers) 4. Film & Digital Media 5. Manufacturing 6. Technology & Innovation

The ACA is a critical element in the State’s proactive strategy to counter the impacts of future economic downturns. The industries targeted by the ACA create high wage jobs, contribute to over 60 percent of the State’s employment and generate over 50 percent of the Gross State Product. The established presence of multiple high-value industries in Arizona creates an increasingly robust State economy and lessens risks associated with economic cycles. In the short time since its inception, the ACA has achieved unprecedented results by:

1. Actively seeking out and establishing direct relationships with business leaders and decision makers at small, mid-size and large companies throughout Arizona communities to better understand their needs and help them expand their businesses; and,

2. Working directly with companies located outside of Arizona seeking new locations for their business interests, and private contractors commonly referred to as “site selectors” retained by those companies, to successfully attract new companies of all sizes to the diverse communities throughout our State; and,

3. Providing available urban and rural locations, access to resources, financial programs, and assistance in reducing burdensome regulation on businesses of all sizes located throughout Arizona to retain their businesses in the State.

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Additionally, the ACA has met its statutory objective in A.R.S. § 41-1502(A) to “market this State for the purpose of expansion, attraction and retention of businesses.” On behalf of Governor Ducey, the ACA led a rebranding, advertising, and messaging initiative for the State. Arizona’s excellent reputation as an ideal location for business has contributed to the placement of the State in leading positions in numerous nationwide rankings for business attractiveness, entrepreneurial activity, infrastructure availability, regulatory friendliness, and educational attainment. 3. The extent to which the Agency serves the entire State rather than specific interests.

In addition to the ACA’s centrally-located headquarters in Phoenix, the ACA maintains full-time staff and an office in Tucson. The full spectrum of service offerings of the ACA is diverse – each program implements appropriate plans designed to allow small and rural businesses and their respective communities to flourish. For example, the ACA’s Rural Business Development Advisory Council, whose membership is set forth in A.R.S. § 41-1505(B) and includes the ACA CEO (or designee) as well as an array of rural stakeholders from across the State, engages in topics of importance to Arizona’s rural communities. The ACA also provides leadership on the Water Infrastructure Finance Advisory Board, and the Commission on Indian Affairs. As the statewide economic development organization whose interest and focus is the entire State, the ACA partners with local and regional economic development organizations. Examples of valued partners the ACA actively interfaces with include, but are not limited to: all Arizona cities and counties, local chambers of commerce, the Greater Yuma Economic Development Corporation, the Arizona Chamber of Commerce and Industry, the Greater Phoenix Economic Council, Sun Corridor Inc., the Economic Collaborative of Northern Arizona, the Arizona Technology Council, the AZ Bio Association, the Arizona Science Foundation, the Central Arizona Association of Governments, the Maricopa Association of Governments, the Northern Arizona Council of Governments and the Pima Association of Governments, public and private universities, community colleges, regional airport authorities, and local film commissions. Finally, the diversity of the ACA’s commitment to various interests across the State is illustrated by its board membership. The ACA Board includes exceptional individuals such as the Governor, representing the executive branch of the State, as well as the President of the Senate and Speaker of the House of Representatives, representing the legislative branch. Each of these individuals also appoints CEOs of businesses located in Arizona. In addition, the President of the Arizona Board of Regents, and the Presidents of each State university under the jurisdiction of the Arizona Board of Regents, all represent Arizona’s excellent university system. The educational system of Arizona is further represented on the ACA Board by a President of a community college, who is appointed by a statewide organization of community college presidents. The rural community

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specifically is represented by a member of the Rural Business Development Advisory Board. Finally, the Presidents of statewide organizations of County Boards of Supervisors and incorporated cities and towns are each represented on the ACA Board. 4. The extent to which rules adopted by the agency are consistent with the legislative

mandate.

Consistent with Governor Ducey’s “Regulation Rollback” initiative, the ACA maintains a conservative approach to rulemaking. While promulgating rules as set forth in A.R.S. §§ 41-1005(A)(27), the ACA attends to market needs by clarifying and providing consistent approaches to its programs and policies. The ACA actively monitors new legislation to analyze and seek input regarding any impact on the ACA and its rules, and engages with members of its Board and other stakeholders to communicate and shape effective policy and legislation. 5. The extent to which the agency has encouraged input from the public before adopting its

rules and the extent to which it has informed the public as to its actions and their expected impact on the public.

The ACA has an established policy that sets forth the process by which the public will have an opportunity to comment on ACA rules, administrative policies, procedures, and guidelines (see A.R.S. §41-1005(27)). Pursuant to the policy, the ACA publishes draft rules for public comment for at least 30 days prior to adoption. In all cases, public notice is provided on the ACA’s website. The ACA provides further notice to specific stakeholders who have expressed an interest in a particular program or initiative. In cases where significant public interest exists regarding a proposed rule change, the 30-day posting period might be extended, and the ACA’s rules allow for a public hearing. The ACA is proactive in engaging specific stakeholders in advance of publishing rules to ensure that stakeholders have opportunities to review and comment on the draft form of the rules. The ACA also regularly issues press releases informing the public of actions and developments, and maintains a strong relationship with state and local media outlets. In addition, the ACA issues a monthly general email newsletter to a subscriber database of over 30,000 contacts, and a weekly innovation-focused email newsletter to a subscriber database of over 7,000 contacts. These efforts help to keep the public informed about initiatives and developments that impact the State, as well as celebrating the State’s success stories.

6. The extent to which the agency has been able to investigate and resolve complaints

that are within its jurisdiction.

The ACA is a customer-centric, professional services organization – fulfilling its mission for the benefit of all Arizonans. The ACA works proactively and collaboratively with individuals and

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businesses, referred to as “clients,” to fully understand their needs. Through a consultative approach, the ACA works side by side with clients, which mitigates issues before they become complaints. In the event of a rare complaint, the ACA swiftly works toward a mutually beneficial resolution that typically does not involve official actions from an outside entity or State government. 7. The extent to which the Attorney General or any other applicable agency of State

government has the authority to prosecute actions under the enabling legislation.

In the event of fraud or malfeasance, the Attorney General’s office would be the prosecuting authority. 8. The extent to which the agency has addressed deficiencies in its enabling statutes

that prevent it from fulfilling its statutory mandate.

The ACA is aware of no such deficiencies. Typically, any legislation proposed or supported by the ACA would relate to the improvement or extension of existing statutory programs. 9. The extent to which changes are necessary in the laws of the agency to adequately

comply with the factors listed in the sunset law. The ACA is aware of no such necessary changes.

10. The extent to which the termination of the agency, board, or commission would

significantly affect the public health, safety, or welfare.

The termination of the ACA would be detrimental to Arizona’s economy and damage the State’s relationship with the business community. The ACA was created in the shadow of the Great Recession to increase the general welfare of the State. At the time of the ACA’s formation, Arizona was one of the hardest hit economies in the nation. Housing prices were down, unemployment dramatically increased, and the State was suffering from significant budget shortfalls. At that time, the Governor and the Legislature worked impressively together to create the ACA as a public-private organization with significant input and representation from the State’s most respected and effective business and community leaders. Their vision was to create an engaged, streamlined and effective statewide economic development organization with a mission of growing the State’s economy through the creation of high-quality jobs by expanding, attracting and retaining businesses. This vision was guided

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by the fact that the overall health, safety, and welfare of the State is supported by its economic strength. These leaders recognized that a strong, diverse State economy would not only mean that the fiscal health of the State would improve, but individuals and families would benefit from the creation of higher paying jobs and the multiplier effect of a diversified economy would help Arizona fare better during future economic downturns. A statewide organization is key for such advances. Regional or local organizations are important components of the State’s economic development infrastructure, but, by design, they compete among themselves on behalf of the municipalities or special interests they represent. The ACA acts as a central, neutral authority and speaks cohesively regarding the value proposition offered by the State of Arizona. Businesses seeking insight into the opportunities available in Arizona hear a clear message regarding the strengths of Arizona as a whole, highlighting localized information and access to local and regional partners throughout the State. The ACA levels the playing field for rural communities across the State, providing a variety of options for businesses who can benefit from Arizona’s many attractive opportunities. Frequently, the strengths of the State’s rural areas are offered as a solution for businesses considering a presence in the State. The ACA educates the clients on these communities and the resources that align with the clients’ business goals. With a dedicated, cohesive, proactive and efficient statewide economic development organization, Arizona aggressively markets its opportunities to businesses seeking a presence in an environment ideal for growth and prosperity. The ACA makes Arizona the logical choice.

11. The extent to which the level of regulation exercised by the agency compares to other

states and is appropriate and whether less or more stringent levels of regulation would be appropriate.

As reflected in the recent report number 15-112 completed by the Office of Auditor General, this factor does not apply because the ACA is not a regulatory agency. 12. The extent to which the agency has used private contractors in the performance of its

duties as compared to other states and how more effective use of private contractors could be accomplished.

The ACA enlists the services of private contractors in a number of capacities. The ACA values the practicality and professionalism available through the use of private contractors. Because private contractors can be used when needed, and because their use can be reduced or eliminated when they are not needed, the ACA finds particular value in relying on private contractors for marketing initiatives, messaging related to public relations and media

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announcements, lead generation services, and other services. In each of these cases, the ACA is able to retain top talent with specific expertise for a particularly limited scope of engagement without adding permanent employment positions. In all cases, the ACA is cognizant of cost and maintains compliance with the ACA’s procurement policy, which requires competitive bid processes for large expenses. The ACA continually monitors and evaluates its private contractors to ensure appropriate levels and scopes of service are reflected in engagement agreements. Expenses must be preapproved by the ACA and when services are not needed, the ACA is diligent in ensuring taxpayer funds are preserved.

13. The extent to which the agency, board, or commission potentially creates unexpected

negative consequences that might require additional review by the Committee of Reference, including increasing the price of goods, affecting the availability of services, limiting the abilities of individuals and businesses to operate efficiently, and increasing the cost of government.

The ACA is aware of no such unintended consequences.

AGENCY FACTORS

1. Identify the problem or needs that the agency is intended to address.

The ACA is a critical component in the State’s proactive strategy to counter the impacts of future economic downturns. The economy will naturally ebb and flow as the political, cultural, environmental and other market pressures react to changing circumstances. However, with a robust and diversified economy, the fluctuations are minimized and impact on Arizona residents is reduced. The ACA’s ongoing work to develop key industries supports this economic diversification, and also supports Arizona’s global competitiveness as a premier location for businesses. The ACA was created by visionary elected officials and leaders of private enterprise, and given the mission of growing and diversifying Arizona’s economy – pursuant to its statutory mandate – by working to create high quality jobs for Arizona residents through attraction, expansion and retention of businesses of all sizes. As a public-private enterprise, the ACA works closely with the Governor’s office, our statewide partners, and business and government leaders both in the State and around the world to achieve this mission. Serving as the leading organization for economic development on behalf of the State, the ACA engages with its own resident businesses of all sizes in both rural and urban areas, as well as businesses located outside the State and the Nation, to actively promote Arizona’s unique value proposition and highlight advantages the State offers to businesses. The ACA identifies resources

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and capabilities throughout the State that are valuable and difficult to emulate in other states, emphasizes strengths and minimizes any perceived weaknesses in the State’s operating environment. As a result, Arizona is widely recognized as one of the most favorable locations in the world for corporate growth and success. With the ACA, the State of Arizona can be confident in a bright economic future. 2. State, to the extent practicable, in quantitative and qualitative terms, the objectives of

the agency and its anticipated accomplishments. The objectives of the ACA are set forth in A.R.S. § 41-1502(A), and include the requirement “to provide private sector leadership in growing and diversifying the economy of this State, creating high quality employment in this State through expansion, attraction and retention of businesses and marketing this State for the purpose of expansion, attraction and retention of businesses.” In doing so, we have focused and will continue to focus on job creation, wage growth, and capital investment in all areas of the State. As a quantitative illustration of our accomplishments, the ACA has far exceeded the goals of its first Five-Year Business Plan. At its inception, the ACA was aware of the need to quickly achieve meaningful economic outcomes for the State, and sought to assist businesses with the creation of 75,000 new jobs in a five-year period with $6 billion in capital investment. Through dedicated and targeted efforts, the ACA was able to strongly exceed these goals. Over the past five years 564 ACA clients committed to creating 87,132 projected new jobs with an average salary of $52,577 and $9.5 billion in projected capital investment. Of these totals, commitments of more than 5,500 projected new jobs and $1.7 billion in capital investment were from ACA’s clients in rural Arizona. Over that same time period, Arizona’s unemployment rate declined over 38 percent from 8.3 percent to 5.1 percent. In addition, industries targeted by the ACA – such as advanced business services and technology and innovation – added businesses and jobs in Arizona more rapidly than in other areas across the Nation. A recent independent analysis completed by the third-party economic consulting firm Elliot D. Pollack & Co. concluded that the economic impact of the ACA’s performance over the past five years consists of more than 200,000 direct, indirect and induced jobs, more than $118 billion in total economic output, and tax revenues of more than $3 billion. These results contribute significantly to Arizona being placed at or near the top of a broad range of national industry rankings – recognized as truly best-in-class. Qualitatively, the ACA has worked with the Governor, the State legislature, its Board of Directors

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and other statewide leaders to continually improve the competitiveness of the State for business attraction, expansion and retention. This work includes support for tax and legislative changes to create a more favorable business climate along with reduction of unnecessary regulations. The ACA has played a leading role in the development and growth of the State’s entrepreneurial ecosystem. The ACA also continues to play a critical role in infrastructure developments that enhance economic opportunities, including efforts in the Arizona-Mexico border region. The ACA, through the leadership of Governor Ducey and the Arizona-Mexico Commission, has also developed strong relationships throughout Mexico, particularly with the State of Sonora, that are recognized as national models for cross-border collaboration.

3. Identify any other agencies having similar, conflicting or duplicative objectives, and an

explanation of the manner in which the agency avoids duplication or conflict with other such agencies.

The ACA is unaware of any other agencies with similar, conflicting or duplicative objectives. 4. Assess the consequences of eliminating the agency or of consolidating it with another

agency. The ACA is uniquely situated to advance a statewide vision that supports economic development opportunities for communities throughout the State. Beyond this strategic role, the ACA serves as a central point of contact for businesses and site selectors evaluating location opportunities in the State. Providing a central point of contact for these clients is a critical component of the business attraction and expansion process. The need to work directly with a myriad of organizations within the State adds a level of complexity for the clients, which could lead to them eliminating Arizona from serious consideration. The elimination of the ACA would send a strong signal that Arizona is a difficult place in which to establish and operate a business, and create a negative perception of Arizona generally within the business community. Regional and local organizations are key players and participants in the development of the State’s vast economy, bringing key insights and knowledge regarding local or regional capabilities, resources and needs. However, the local nature of such organizations means that they necessarily compete among themselves on behalf of the municipalities or special interests they represent. The ACA acts as a central, neutral authority and speaks with a unified voice regarding the value proposition offered by Arizona as a State. Without this unified voice, businesses seeking insight regarding the opportunities available in Arizona would hear only about local opportunities from local organizations, as no single statewide organization would exist to clarify the strengths of Arizona as a whole. This unified voice offered by the ACA is especially important to rural regions in the State, located outside the two large urban areas. The ACA is able to present options throughout the entire State to site selectors and private businesses looking to locate or expand in Arizona.

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With a dedicated, cohesive, proactive and efficient statewide economic development organization, Arizona listens and responds to needs, often resolving issues before they arise to make it as easy as possible for businesses of all sizes to locate in the State and create high quality employment opportunities for Arizona residents.

Over the past five years, the ACA has been an essential element in diversifying Arizona’s economy by targeting high-value industries. Working with corporate clients, the ACA, along with our local and regional partners, facilitated the creation of 87,123 projected high-quality jobs. These projected jobs have contributed to a reduction in Arizona’s unemployment rate by over 38 percent. Without the ACA’s statewide economic development vision and expertise, there would not have been – and in the future, would not be – a comprehensive approach and statewide vision capable of facilitating these positive results for all Arizona residents.

NOVEMBER 14, 2017

COMMITTEE OF REFERENCEARIZONA COMMERCE AUTHORITY

Sandra Watson, President & CEO

ACA HISTORY

Formed in 2011 –

HB 2001

Department of Commerce

Evolution

Five-year business plan & goals

adopted in 2012

AUDITS & IMPLEMENTATION

Sunset Audit – September 2015 – 18 findings

Improve Reporting | Formalize Grant Process | Procedural

6 month & 18 month follow-up

15 – Implemented

1 – Partially Implemented

1 – In Process

1 – No Longer Necessary (Per Statute)

Improved Reporting: Projected & Actual

ARIZONA MANAGEMENT SYSTEM

CORE

BELIEFS

MISSION

MEASURES

LEAD

MEASURES

STATE

KEY

FUNCTIONS

KEY GOALS

AGENCY

KEY

FUNCTIONS

10.7.16

1. Planning and reviewing performance

2. Improving processes

3. Attracting, developing, and retaining talent

4. Delivering world-class procurement

5. Driving innovative IT solutions

6. Optimizing physical assets

7. Managing risk

8. Balancing the budget

1. Setting economic policy

2. Making it easier to do business and embracing

“start-up state” positioning

3. Developing, retaining, and attracting skilled

workers

4. Expanding, retaining, and attracting businesses

5. Raising Arizona’s positive profile nationally and

internationally

6. Maintain and expand Arizona’s critical public

assets and infrastructure

1. Setting safety policy

2. Enforcing laws

3. Deterring criminal activity

4. Protecting children and families

5. Providing law enforcement and fire services

6. Managing Corrections

7. Mitigating risk through prevention and

education

8. Promoting safe workplaces

9. Coordinating emergency readiness

10. Ensuring safe travel

1. Setting and implementing successful best

practices in educational policy that foster critical

thinking, communication and collaboration

2. Creating Arizona standards, assessments, and

accountability systems that are meaningful

3. Recruiting and retaining quality educational

professionals

4. Closing the achievement gap for low-income

and minority students

5. Providing access and choice to high-quality

early learning opportunity

6. Promoting rigorous pathways to postsecondary

education based on each student’s interests

7. Strengthening the alignment of education

outcomes to workforce needs

1. Setting health and natural resource policy

2. Promoting active and healthy people

3. Conserving resources for multiple benefits

4. Ensuring healthy food supply and drinking water

5. Protecting air quality

6. Ensuring appropriate access to healthcare

services

7. Ensuring healthy homes and workplaces

8. Preserve water supply for future use

EDUCATION OUTCOMES

a. Preschool Enrollment

b. 3rd Grade Reading

c. 8th Grade Math

d. High School Completion

e. College-Going

f. Youth Enrolled in School or Working

g. Postsecondary Attainment

IMPROVING GOVERNMENT OUTCOMES

a. Tax Reduction

b. Government Savings

c. Credit Rating

d. Transparency

e. State Debt

PUBLIC SAFETY OUTCOMES

a. Juveniles rehabilitated

b. Violent crime

c. Property crime

d. Border strike force seizures

e. Children in out-of-home care

f. Injured workers

g. Traffic fatalities

h. Natural disaster & wildland fire response

i. Acres burned in unwanted wildland fires

j. Recidivism

a. Air Quality Index

b. Lake Mead level

c. Drinking water quality

d. Park & outdoor recreation

e. Mental health

f. Smoking

g. Opioid deaths

h. Teen pregnancy

i. Infant mortality

j. Healthy weight

HEALTH OUTCOMESECONOMIC OUTCOMES

a. Median household income

b. Total personal income

c. Foreign trade

d. Economic diversity

e. Job growth

f. Unemployment

g. Total spending by overnight visitors

h. Tax climate

i. Economic freedom

a. New company formations

b. Housing costs

c. New construction permits

d. Overnight visitors

e. Skilled worker apprenticeships

f. Labor force participation

g. Public infrastructure investment

h. Private sector capital investment

i. Tort liability

j. Foreign direct investment

21st Century

EducationStrong, Innovative

Economy

Healthy People,

Places & ResourcesSafe

Communities

Efficient &

Accountable

Government

ARIZONA MANAGEMENT SYSTEMOPPORTUNITY FOR ALL

Governor Doug Ducey

SHARED

VISION

MISSIONWe will serve, protect, promote and defend the State of Arizona and its citizens in their pursuit of

a better life.

Ensuring

World Class Education

Driving

Economic Opportunity

Championing the Health of People

and Resources

Protecting

Life and PropertyAccelerating

Agency Performance

a. Nursing visits for perinatal high risk

b. Teens in pregnancy prevention program

c. Physicians using prescription drug monitoring

database

d. Small drinking water system compliance

e. Colorado River water conserved

f. Underserved food areas

g. Delivery of mental health services

h. Hunt/Fish license sales

a. Uniform crime report data

b. Sexual assault evidence collected/kits

c. Removal rate of children from unsafe homes

d. Children leaving foster care to a permanent

home

e. Workplace safety

f. Emergency response plans

g. Wildfire plans

h. Former inmate community supervision

program completion

i. Fire risk to people and places

j. Traffic stops

k. DUI arrests

l. Child seats installed/inspected

a. Student attendance rates

b. Increasing the number of A & B schools

c. Improvement of C, D and F schools

d. Higher-quality school leadership

e. Teacher retention

f. Teacher pay

g. Students enrolled in college & career

preparedness programs

h. Postsecondary degrees, certifications &

credentials for low-income students

i. Education investment

a. State employees

b. Regrettable attrition

c. IT Performance

d. Administrative rules eliminated

e. Cost savings

f. Arizona Management System adoption

g. Transactions online

h. Speed of service

i. Taxpayer satisfaction

GOAL COUNCIL CHAIR Dawn Wallace, Senior Advisor, Education Sandra Watson, Director, Commerce Authority Dr. Cara Christ, Director, Health Services Gilbert Orrantia, Director, Homeland Security Craig Brown, Director, Administration

Government at the Speed of Business: DECIDE FASTER / RESPOND FASTER / RESOLVE FASTER / MORE SERVICES ONLINE / TAX DOLLARS SAVED

IDENTIFY PROBLEMS

IMPROVE

PROCESS

ES

MEASURE

RESULTS

UNDERSTA

ND

CUSTOMER

NEEDS

Do More GoodMy responsibility is

to…

CORE VALUES

• Do the Right Thing

• Commit to Excellence

• Care About One Another

LEADERSHIP

True Leaders Change Things to

Make them Better

FOUNDATIONS

ACA: FIRST FIVE YEARS

SMALL BUSINESS & INNOVATION

BUSINESS DEVELOPMENT:

143,463Checklist Inquiries

450+ Companies

30 Communities

$75MExports

60Companies

18Graduates

13Months (Avg.)

311Client Engagements

47ExporTech Graduates

63Vendor Partners

REVAZVENTURE READYSMALL BUSINESS AZSTEP

*5 year numbers

1,159 Companies

64AIC Awardees

1,916 Applications

$155MCapital Raised

403 Jobs Created

$127M Revenue Generated

BUSINESS DEVELOPMENT:

ARIZONA INNOVATION CHALLENGE

*5 year numbers

RURAL DEVELOPMENT

RURAL DEVELOPMENT: DEDICATED ENGAGEMENT

TRADITIONAL OUTREACH

Since FY12 the ACA has served clients and stakeholders in over 50 rural Arizona communities

across all 15 counties.

RURAL BUSINESS DEVELOPMENT ADVISORY COUNCIL

Brings together representatives from each county, tribal entity and statewide organizations to advise the board of directors on matters involving rural

Arizona.

GRANT OPPORTUNITIES

Economic Strength Grant

Rural Economic Development Grant

CERTIFIED SITES

Rates development-ready sites in rural communities.

FORESTRY INITIATIVE

OBJECTIVEWORK WITH LOCAL, STATE & FEDERAL STAKEHOLDERS TO DEVELOP NEW FOREST

MANAGEMENT STRATEGIES THAT WILL IMPROVE FOREST HEALTH AND REESTABLISH THE ARIZONA FOREST INDUSTRY

PROJECT OPPORTUNITY500+ DIRECT & INDIRECT FORESTRY JOBS

$300M+ IN CAPITAL INVESTMENTSPARTNERS

ACA: NEXT FIVE-YEAR PLAN

PEOPLE. PLACE. POLICY.

PEOPLE

• Highly skilled workforce

• 36.8 average age

• World-class educational

institutions

PLACE

• Superior geographic

location

• Lack of natural disasters

• Unmatched quality of life

POLICY

• Competitive tax structure

• Affordable operating costs

• Lean regulatory

environment

FY 2018 MARKETING & COMMUNICATIONS PLAN

RESEARCH EFFORT [FY 2016]

36 One-On-One

Interviews

11Focus Groups

5,000Survey Responses

500,000Survey Invitations

UNIFIED STATE IDENTITY

COMPETITOR ADVERTISING

http://www.azcommerce.com/

PIPELINE UPDATES

THANK YOU

REFERENCES

ACA ANNUAL REPORTS + SUMMARY INFOGRAPHICS

www.azcommerce.com/about-us/annual-reports

ACA BUSINESS PLAN

www.azcommerce.com/about-us/business-plan

Page 1 of 1

Interim agendas can be obtained via the Internet at http://www.azleg.gov /Interim-Committees

ARIZONA STATE LEGISLATURE

INTERIM MEETING NOTICE

OPEN TO THE PUBLIC SENATE COMMERCE AND PUBLIC SAFETY AND HOUSE COMMERCE COMMITTEE OF

REFERENCE FOR THE SUNSET REVIEW OF THE: ARIZONA STATE BOXING AND MARTIAL ARTS COMMISSION AND

ARIZONA COMMERCE AUTHORITY Date: Tuesday, November 14, 2017 Time: 09:00 A.M. Place: HHR 1

AGENDA 1. Call to Order 2. Roll Call 3. Sunset Review of the Arizona State Boxing and Mixed Martial Arts Commission

• Presentation by the Arizona State Boxing and Mixed Martial Arts Commission

- Daniel Bergin, Director of the Arizona Department of Gaming

• Public Testimony

• Discussion and Recommendations by the Committee of Reference

4. Sunset Review of the Arizona Commerce Authority

• Presentation by the Arizona Commerce Authority - Sandra Watson, President

of the Arizona Commerce Authority

• Public Testimony

• Discussion and Recommendations by the Committee of Reference

5. Adjourn Members: Senator Steve Smith, Co-Chair Representative Jeff Weninger, Co-Chair Senator David C. Farnsworth Representative César Chávez Senator Robert Meza Representative Todd A. Clodfelter Senator Catherine Miranda Representative Diego Espinoza Senator Warren Petersen Representative Jill Norgaard

11/9/17 jy

People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or assistance with physical accessibility. If you require accommodations, please contact the Chief Clerk's Office at (602) 926-3032 or through Arizona Relay Service 7-1-1.

Senate Commerce and Public Safety and House Commerce

Committee of Reference November 14, 2017

Page 1

ARIZONA STATE LEGISLATURE

SENATE COMMERCE AND PUBLIC SAFETY AND HOUSE COMMERCE COMMITTEE OF REFERENCE FOR THE SUNSET REVIEW OF THE:

ARIZONA STATE BOXING AND MARTIAL ARTS COMMISSION AND ARIZONA COMMERCE AUTHORITY

Minutes of the Meeting

November 14, 2017 9:00 a.m., House Hearing Room 1

Members Present: Senator David C. Farnsworth Representative Jeff Weninger, Co-Chair Senator Robert Meza Representative César Chávez Senator Catherine Miranda Representative Todd A. Clodfelter Senator Warren Petersen Representative Diego Espinoza

Members Excused: Senator Steve Smith, Co-Chair Representative Jill Norgaard

Staff: Grant Hanna, Senate Research Staff Katy Proctor, House Research Staff

Co-Chairman Weninger called the meeting to order at 9:08 a.m. and attendance was noted. SUNSET REVIEW OF THE ARIZONA STATE BOXING AND MIXED MARTIAL ARTS COMMISSION Presentation by the Arizona State Boxing and Mixed Martial Arts Commission Dan Bergin, Director, Arizona Department of Gaming, distributed and explained a handout entitled “Arizona Boxing & Mixed Martial Arts Commission” (Attachment A) and “FY 2017 Boxing / MMA Cash Flow” (Attachment B). Mr. Bergin further explained the efforts to streamline both physical and financial protections. Aiden Fleming, Arizona Department of Gaming, answered questions posed by the Committee and expressed his strong support for the continuation of the Arizona State Boxing and Mixed Martial Arts Commission. Public Testimony Representative Weninger asked the audience for public testimony, however, no one came forward. The Committee shared their comments for the topic mentioned above.

Senate Commerce and Public Safety and House Commerce

Committee of Reference November 14, 2017

Page 2

Recommendation by the Committee of Reference Representative Weninger requested a motion on the continuation of the Arizona State Boxing and Mixed Martial Arts Commission.

Representative Clodfelter moved that the Commerce Committee of Reference recommend the Arizona State Boxing and Mixed Martial Arts Commission be continued for eight-years. The motion CARRIED by voice vote.

SUNSET REVIEW OF THE ARIZONA COMMERCE AUTHORITY Presentation by the Arizona Commerce Authority Sandra Watson, President & CEO, Arizona Commerce Authority, distributed and explained a PowerPoint presentation entitled “Arizona Commerce Authority” (Attachment C) and answered questions posed by the Committee. Discussion and Recommendation by the Committee of Reference

Senator Miranda moved the motion to an eight-year continuation. The motion was seconded by Senator Meza.

Senator Petersen moved a substitute motion that the Committee would continue on with the hearing and testimony. The substitute motion was seconded by Senator Farnsworth.

Representative Weninger made comments.

The motion CARRIED by voice vote.

Ms. Watson answered additional questions posed by the Committee. The Committee shared their concerns and comments for the topic mentioned above. Public Testimony Glenn Hamer, President & Chief Executive Officer, Arizona Chamber of Commerce, testified in support and made comments on the importance of reauthorizing the Arizona Commerce for Authority for eight years. Steven Zylstra, President & Chief Executive Officer, Arizona Technology Council, testified in support of the reauthorization for the Arizona Commerce Authority. Discussion and Recommendation by the Committee of Reference – (continued) The Committee provided comments.

Senate Commerce and Public Safety and House Commerce

Committee of Reference November 14, 2017

Page 3

Representative Espinoza moved the motion for eight-years. The motion was seconded by Senator Miranda. Senator Petersen moved a substitute motion that the Commerce Committee of Reference recommend the Arizona Commerce Authority be continued for eight- years. Additionally, codify in statute one FTE dedicated to Rural Economic Development and one FTE dedicated to Small Business Growth, Support as Regulatory and Ombudsman and advocate for work with city, county and state agencies. Increase reporting requirements to address Rural economic development capital gains and successes, including site visits and small business capital gains and successes, including site visits. The substitute motion was seconded by Representative Clodfelter.

Representative Weninger made further comments.

Senator Petersen requested a roll call vote. The motion CARRIED with a roll call vote of 6-2-2 (Attachment 1).

Senators Farnsworth and Petersen explained their votes. Attached are the forms noting the individuals who submitted a Speaker slip on the agenda items (Attachment D). There being no further business, the meeting was adjourned at 10:45 a.m. Respectfully submitted, Imee L. Andrew Committee Secretary (Audio recordings and attachments are on file in the Secretary of the Senate’s Office/Resource Center, Room 115. Audio archives are available at http://www.azleg.gov)