Category Archives: Arizona

CA Allows Driverless Cars

This week the California Department of Motor Vehicles approved new rules that would allow self-driving cars to hit the road without a human behind the wheel at all.

These regulations, which take effect on April 2, 2018, will pave the way for companies like Waymo, Uber, GM, and others to continue autonomous vehicle testing on the roads of the Golden State and likely will lead to the technology becoming mainstream.

In 2014, California was the first state to have rules for testing autonomous vehicles on public streets. But many felt that those regulations were too restrictive and unable to adapt to a technology that is rapidly maturing. As a result, testing programs have flourished in other states, like Arizona.

“This is a major step forward for autonomous technology in California,” DMV Director Jean Shiomoto said. Safety is our top concern and we are ready to begin working with manufacturers that are prepared to test fully driverless vehicles in California.”

Among other requirements imposed as part of the permitting process, companies must show that there is a link for remote control, allowing the car to be operated from afar.

Autonomous vehicle makers must also provide a “law enforcement action plan” that includes instructions as to how to contact the remote human operator and how to disengage the AV mode, among other requirements. The rules do not say what type of data law enforcement will be able to access from AVs. Consumer Watchdog, a group that has routinely opposed AV technology, slammed the new rules this week. “A remote test operator will be allowed to monitor and attempt to control the robot car from afar,” said John M. Simpson, the group’s privacy project director. “It will be just like playing a video game, except lives will be at stake.”


New Laws in Arizona 2018

The start of 2018 means new laws taking effect in Arizona.

Employees are happy about an increase in the minimum wage, but some business owners are worried about now having to pay their workers $10.50 an hour. “It costs me approximately four thousand dollars a month employing twelve to fifteen people, that’s a big hit for a small business owner to take,” said Frank Silverman of Midtown Tavern.

After being signed into law by President Donald Trump a new tax law is set to take effect. The law doubles the standard deduction, doubles the child tax credit, and gets rid of the nearly $4,000 personal exemption. However, none of these will have an impact on your next tax return. None of the new tax laws affect the 2017 taxes.

Looking ahead, there’s a new proposal emerging for the 2018 ballot allowing the recreational use of marijuana. The initiative, sponsored by a medical marijuana dispensary, would expand the list of conditions for which a doctor could recommend a patient be allowed to use the drug. It also would make it easier and cheaper for patients to get marijuana, including allowing a large percentage of them to grow their own plants as long as they have the correct marijuana insurance.

Proponents, the operators of the Independent Wellness Center, a medical marijuana dispensary in Apache Junction, need 150,642 valid signatures on petitions by July 5, 2018, to put the measure.

Paid Sick Leave Is Now The Law In AZ

Arizona’s new law mandating paid sick leave starts July 1. Businesses and non-profit groups could face penalties for failing to keep records, post notices and could incur damages for failing to provide paid sick time. Employers who retaliate against workers exercising their rights could face fines of at least $150 per day.

The law mandating as many as 40 hours of paid sick leave, which was approved by voters in November of 2016 that also raised the state’s minimum wage, applies to almost all businesses and non-profits with at least one Arizona employee including entities not headquartered in the state.  The only exceptions are those employed by Arizona’s state or federal government and sole proprietors. So, whether full-time or part-time, temporary or seasonal, all will receive paid sick time. They will be able to use this benefit for a variety of reasons.

The minimum requirements are 24 hours of paid sick time off annually for businesses with 14 or fewer workers, or 40 hours off for entities with 15 or more people. Employees are entitled to receive paid sick-time off; independent contractors are not. The general rule is that if you issue a W-2 to a worker, that person is an employee entitled to the benefit.

The law allows paid leave for various reasons besides sickness or injury such as domestic violence, sexual abuse, stalking or the closing of a child’s school owing to a public health emergency.  Additionally, reasons include taking time off to meet with an attorney, arranging shelter services or securing safe housing, as well as issues on behalf of family members. The definition of family members is quite broad including siblings, grandparents, in-laws and others. Significantly, an employer can request proof or documentation only after a worker has been absent for three days in a row. And, when proof is required, it can come in a variety of  forms such as a doctor’s note, a police report, a letter from an attorney or simply a worker’s own statement that he or she needed time off. Employers generally will be required to grant the time off. Penalties and damages await companies that ignore the new law. 


Arizona v Theranos

Arizona Attorney General Mark Brnovich is seeking bids to retain outside legal expert to pursue a consumer-fraud lawsuit against troubled blood-testing company Theranos.

Brnovich’s office is seeking “legal action against Theranos” and its closely related subsidiaries for violations of the Arizona Consumer Fraud Act, according to a request for proposals posted this month on the state procurement website.

Theranos came to Arizona in 2013 when it rolled out its unproven technology at Walgreens stores across metro Phoenix. The Silicon Valley start-up opened 40 Theranos Wellness Centers at Walgreens locations across metro Phoenix, operated a laboratory at Arizona State University office complex in Scottsdale, and successfully lobbied for a bill that allowed consumers to order any test without a doctor’s orders.

Then, media reports and government regulators raised questions about the company’s testing procedures. Federal regulators moved to revoke the company’s laboratory certificate after finding multiple deficiencies at its California lab and moved to bar founder Elizabeth Holmes from the lab business.

Later, Theranos announced it would shut down its Scottsdale lab and its stand-alone retail locations. Walgreens had earlier shut down its Theranos locations.  Theranos, a privately-held company, was once valued at $9 billion based on investor hopes that the company’s proprietary finger-prick technology would revolutionize the lab-testing business.

The bid listed on Arizona’s procurement website states that Arizona will pursue litigation “for violations of the Arizona Consumer Fraud Act arising out of Theranos Inc.’s long-running scheme of deceptive acts and misrepresentations related to Arizona consumers.”


Supreme Court Curbs Abortion Restrictions

In light of the recent U.S. Supreme Court ruling in the case of Whole Woman’s Health v. Hellerstedt, a handful of states will face challenges from Planned Parenthood questioning the validity of restrictions these states have placed on  health clinics that offer abortions.

The ruling found that two types of abortion clinic restrictions in Texas—a law requiring abortion providers to have local hospital admitting privileges and a rule requiring clinics to meet the strict infrastructure standards of outpatient surgery centers—were unconstitutional because they caused an undue burden on abortion access.

Planned Parenthood has announced it is planning to seek repeals of restrictions in seven other states: Missouri, Virginia, Florida, Arizona, Michigan, Pennsylvania, and Tennessee.  It will also seek repeal of abortion restrictions in Texas that go beyond those struck down by the Supreme Court.

Arizona has a law requiring abortion providers to have local hospital admitting privileges.  Missouri and Tennessee each have both of the Texas-style restrictions on the books: an admitting-privileges law and facility infrastructure requirements. In Missouri, the admitting-privileges law led to the closure of an abortion clinic in Columbia, leaving the state with just one clinic. In Tennessee, both laws are being challenged in the courts.   


How To Change an Irrevocable Trust – Decanting

Just like you decant a fine wine from a wine bottle into a new one, you can decant the assets of a not-so-fine irrevocable trust into a new trust. A revocable trust is, by definition, subject to revocation or amendment, so no need there. Decanting means changing, updating and modernizing an irrevocable trust.

The trust agreement itself may allow this, but in Arizona, the law addressing decanting is found at Arizona Revised Statutes 14-10819, “Trustee’s special power to appoint to other trust.” Essentially, it states that unless the terms of the instrument expressly provide otherwise, a trustee who has the discretion to make distributions for the benefit of a beneficiary of the trust may exercise — without prior court approval — that discretion by appointing the estate trust in favor of a trustee of another trust if the exercise of this discretion:

  1. Does not reduce any fixed nondiscretionary income payment to a beneficiary.
  2. Does not alter any nondiscretionary annuity or unitrust payment to a beneficiary.
  3. Is in favor of the beneficiaries of the trust.
  4. Results in any standard applicable for distributions from the trust being the same or more restrictive standard applicable for distributions from the recipient trust when the trustee exercising the power is a possible beneficiary under the standard.
  5. Does not adversely affect the tax treatment of the trust, the trustee, the settlor (the original trustmaker) or the beneficiaries.

Typical reasons to decant include correcting ambiguities or drafting errors, changing the trust’s situs to a more favorable place, splitting up or combining trusts to achieve administrative cost savings, or broadening a trustee’s powers under the new trust. This would include the power to distribute income and principal to beneficiaries resulting in certain tax savings. A trust can also be decanted from a settlor trust to a non-settlor trust or vice versa, reversing the responsibility of who pays income taxes.

Tax News for 2016

Estate or Inheritance Taxes

For 2016, the estate and gift tax exemption is $5.45 million per individual.  What does this mean?  Each person must have an estate in excess of almost five and a half million dollars before any federal tax kicks in.  That means an individual can leave $5.45 million to heirs and pay no federal estate or gift tax.  A married couple will be able to shield $10.9 million from federal estate and gift taxes. Good news!  Our state of Arizona has no estate tax whatsoever.

Gift Taxes

What about gift giving?  Well, for 2016 the annual gift exclusion remains  $14,000.  Again, this is the federal government — Arizona does not have a gift tax at all.  The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead.

What can be excluded from gifts?

The general rule is that any gift is a taxable gift.  However, there are many exceptions to this rule.  The following are not taxable gifts:

•Gifts that are not more than the annual exclusion for the calendar year.

•Tuition or medical expenses you pay for someone (the educational and medical exclusions).

•Gifts to your spouse.

•Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.


Fox News v. Children of Suspect

The question presented in the case of Angela Rodriguez v. Fox News Network was whether the First Amendment protects a broadcaster that aired a high-speed police chase of a carjacking suspect, which ended abruptly in the suicide of the suspect, from a claim for intentional infliction of emotional distress brought by the children of the suspect. In this case, decided on August 4, 2015 in the Arizona Court of Appeals, Division 1, an armed carjacking suspect led police on a high-speed chase that ended abruptly when he got out of the vehicle, put a handgun to his head and shot himself.

After Fox News Networks broadcast the chase and the suicide live, the two teenage sons of the suspect learned their father had killed himself when they saw a clip of the broadcast on the Internet a few hours later. Their mother sued Fox on their behalf, alleging negligent and intentional infliction of emotional distress. The superior court granted Fox’s motion to dismiss the case. Because the First Amendment bars the tort claims, the Arizona Court of Appeals affirmed.  So the winner is Fox News Network.  They can broadcast this kind of video without fear that immediate family members watching will be able to successfully bring a claim for infliction of emotional distress.


Arizona Revenge Porn Law Unconstitutional

U.S. District Judge Susan R. Bolton ordered Arizona state prosecutors last week to stop enforcing Arizona’s so-called “revenge porn” law. Her decree came as she approved the settlement in the case of Antigone Books v. Brnovich which challenged the law as unconstitutional.

The revenge porn law, called the “Unlawful Distribution of Images” statute, was signed by former Governor Jan Brewer last year and made it a felony “to intentionally disclose, display, distribute, publish, advertise or offer a photograph, videotape, film or digital recording of another person in a state of nudity or engaged in specific sexual activities if the person knows or should have known that the depicted person has not consented to the disclosure.”

Those who sponsored it were trying to prevent nonconsensual pornography—particularly nude images posted on the internet by an angry ex-lover, commonly called “revenge porn.” On websites like this type of content can be found but there is also plenty of legal consensual adult content on here and its important to differentiate. But a group of Arizona booksellers, publishing companies, newspapers, librarians, and photographers sued the state arguing that the language was “an unconstitutionally overbroad and viewpoint-based restriction on protected speech.”

Arizona’s revenge porn law would make it a felony to publish certain educational materials about breastfeeding, or newsworthy photographs like those taken at the Abu Ghraib prison. It “could have led to the conviction of someone posting a nude photo with no intent to harm the person depicted,” notes the ACLU, which served as co-counsel for the plaintiffs.

“More than half of the states have passed some form of revenge porn law, and certainly not all of them are unconstitutional” Lee Rowland, senior staff attorney for the ACLU, told the New Times magazine of Phoenix, Arizona. “But because they tend to regulate free speech, we at the ACLU look at them closely.” The law may be revised and resubmitted by its sponsors. It won’t be illegal though to upload homemade porn movies as long as all who participate give consent, you can see adult movies like these on websites like