When seeking a permit or license from a county, city or flood control district, one of the most commonly asked questions is – how long will it take for the application to be processed? Until now, we could only respond with an educated guess based on past history and the nature of the project. But with the passage of Senate Bill 1598[i] (“SB 1598”), all cities, counties, and county flood control districts (collectively, “municipalities”) must by December 31, 2012 establish a time frame to either grant or deny a license or permit application.
These new time frames are intended to create a faster and more predictable permitting process in Arizona. From a project planning standpoint, it is important that businesses understand how municipalities are implementing the requirement to adopt licensing time frames because municipalities have taken a variety of approaches. Some municipalities have adopted time frames but at the same time allow (or even encourage) applicants the ability to opt out. Other municipalities have established just one time frame for virtually all permit applications.
Although the mandatory time frames under SB 1598 were intended to create certainty and hopefully shorten the permitting process, it is not yet clear how they will function in practice, particularly given that municipalities appear to be adopting vastly different approaches.
On July 20, 2011, SB 1598 (A.R.S. §§ 9-831 et. seq, 11-1601 et. seq, and 48-3641 et. seq) went into effect in Arizona; the bill regulates multiple aspects of how municipalities process permit applications. For example, SB 1598 prohibits municipalities from basing “a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule, ordinance or code.”[ii] The terms “licenses” and “licensing decisions” are broadly defined to include “any municipal permit, certificate, approval, registration, charter or similar form of permission required by law.”[iii]
SB 1598 also regulates how municipalities must process applications for a license, requires municipalities to establish a process for applicants to make complaints or seek clarification about the application of a statute, ordinance, or code affecting a licensing decision, and regulates the conduct of municipal inspections.
2. Licensing Time Frames Provisions of SB 1598
One of SB 1598’s most significant provisions requires municipalities to establish licensing time frames for existing programs by December 31, 2012. Under this provision municipalities must adopt time frames to approve or deny any permit required by ordinance or code.[iv]
The time frames that municipalities must adopt have two components. First, municipalities must establish a time frame to determine whether an application is “administratively complete” (i.e., the application contains all necessary information). If the application is not complete, municipalities must give notice within the prescribed time, and specifically identify any deficiencies. If the municipality does not request additional information within the proscribed time, the application will be deemed “administratively complete.” Second, after the application is deemed “administratively complete,” a separate time frame must be adopted for substantive review of the application and the decision to grant or deny the application. During this substantive review phase, municipalities may make one request for additional information, unless the applicant agrees that additional requests can be made. The administrative and substantive review time frames, taken together, comprise the overall time frame to grant or deny the permit application. The review time frame periods are suspended when an applicant responds to a municipalities’ request for information.
The substantive and overall time frames may be extended by mutual agreement, but only by 25%. If a municipality fails to approve or deny an application within the established time, the municipality must refund all fees charged and continue processing the application.
3. Examples of Licensing Time Frames
Not every municipality has adopted licensing time frames as of the date of this alert. Among those that have adopted time frames, a variety of different approaches are evident. Three examples are discussed below.
(a) Maricopa County recently adopted an ordinance intended to satisfy SB 1598.[v] The ordinance contains a table with 127 different types of permitting decisions, setting forth time frames for everything from bingo licenses to fireworks permits. Most building permits have a 60 working day administrative review period, and a 120 working day substantive review period, for a 180 day overall review period. Permits involving the planning department generally contain a longer review period; for instance a development plan review has a 90 working day administrative review period and a 180 working day substantive review period, for an overall 270 day review period. Maricopa County also created a special provision for “projects with special circumstances.” If mutually agreed, applicants may opt out of the otherwise applicable administrative and substantive review periods, and agree upon new time frames.
(b) The City of Tucson has adopted a potentially controversial approach in response to SB 1598. Tucson maintains that after the submittal of an application, “[d]evelopment changes proposed by the applicant do not appear to be allowed,” apart from the one permissible request for additional information prior to the application being deemed “administratively complete.”[vi] Therefore, under the City of Tucson’s position, any amendment or supplement to an existing application by the applicant essentially constitutes a new application, which restarts the licensing time frames clock and requires additional permitting fees. It appears the City of Tucson is attempting to encourage applicants to voluntary opt-out of SB 1598’s licensing time frame requirements and instead opt for the “Flexible Application Process,” which it maintains offers applicants “multiple opportunities to alter or amend their application and to confer with City staff for advice.” Under the “Flexible Application Process,” it is unclear whether there are any restrictions on the number of requests for information. It is also unclear whether this approach is consistent with the statute, which does not explicitly authorize such an opt-out.
(c) The Maricopa County Flood Control District adopted relatively straightforward time frames. It created sixteen categories of permit applications, and all but two categories have a 30 working day administrative review period, and a 60 working day substantive review period, for a 90 day overall review period.[vii]
SB 1598’s requirement that all municipalities establish time frames is intended to create certainty for businesses and individuals seeking a license or permit. But for at least the interim period, there are many questions. If other municipalities agree with the approach taken by the City of Tucson that permit applications processed under SB 1598 may not be amended or supplemented without constituting new applications, this would significantly reduce the intended benefits of SB 1598.
Before applying for any permit, an applicant should understand what time frames a municipality has adopted and how the municipality interprets the time frames. Unless applicants understand these issues, the new licensing time frame requirements may cause confusion, at least until both applicants and municipalities gain greater experience in their implementation.