SB1293 - 492R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-221, Arizona Revised Statutes, is amended to read:

START_STATUTE43-221. Joint legislative income tax credit review committee

A. The joint legislative income tax credit review committee is established consisting of the following members:

1. Five members of the house of representatives ways and means committee appointed by the speaker of the house of representatives. Not more than three appointees shall be of the same political party.

2. Five members of the senate finance committee appointed by the president of the senate. Not more than three appointees shall be of the same political party.

B. The committee shall determine the original purpose of existing tax credits and establish a standard for evaluating and measuring the success or failure of the tax credits. The standard for evaluating tax credits may include:

1. The history, rationale and estimated revenue impact of the credit.

2. Whether the credit has provided a benefit to this state including, for corporate tax credits, measurable economic development, new investments, creation of new jobs or retention of existing jobs in this state.

3. Whether the credit is unnecessarily complex in the application, administration and approval process.

C. The committee shall review the individual and corporate income tax credits pursuant to the schedule prescribed as provided in section 43‑222. The committee shall use the joint legislative budget committee staff and may use the staff of the department of revenue and legislative council for assistance.

D. After completing the review process, the committee shall determine whether the credit should be amended, repealed or retained or allowed to expire as provided by the repeal schedule in section 43-222. If the credit is recommended to be retained or amended, the committee shall recommend that the credit be returned to the income tax credit review schedule prescribed rescheduled for repeal as provided in section 43‑222. The next review year shall be the fifth full calendar year The rescheduled repeal shall be not more than ten years following the date year the credit was reviewed. The committee shall report its findings and recommendations to the president of the senate, the speaker of the house of representatives and the governor by December 15 of the year that the committee reviews the credit. The committee shall provide a copy of the report to the director of the Arizona state library, archives and public records secretary of state. END_STATUTE

Sec. 2. Repeal

Section 43-222, Arizona Revised Statutes, is repealed.

Sec. 3. Title 43, chapter 2, article 2, Arizona Revised Statutes, is amended by adding a new section 43-222, to read:

START_STATUTE43-222. Income tax credit repeal schedule

Income tax credits are repealed according to the following schedule:

1. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2011:

(a) Section 43-1074, Credit for increased employment in enterprise zones.

(b) Section 43-1161, Credit for increased employment in enterprise zones.

(d) Section 43-1083, Credit for solar energy devices.

(e) Section 43-1085, Credit for solar energy devices in commercial and industrial applications.

2. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2012:

(a) Section 43-1164, Credit for solar energy devices in commercial and industrial applications.

(b) Section 43-1183, Credit for contributions to school tuition organizations.

(c) Section 43‑1184, credit for contributions to school tuition organizations for displaced students and students with disabilities.

(d) Section 43-1071, Credit for income taxes paid to other states.

(e) Section 43-1073, Family income tax credit.

3. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2013:

(a) Section 43-1079, Credit for increased employment in military reuse zones.

(b) Section 43-1167, Credit for increased employment in military reuse zones.

(d) Section 43-1169, Credit for construction costs of qualified environmental technology facilities.

4. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2014:

(a) Section 43-1077, Credit for employment by qualified defense contractors.

(b) Section 43-1165, Credit for employment by qualified defense contractors.

(d) Section 43-1166, Credit for property taxes paid by qualified defense contractors.

(e) Section 43-1086, Credit for donations to the military family relief fund.

5. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2015:

(a) Section 43-1089, Credit for contributions to school tuition organizations.

(b) Section 43-1089.01, Credit for fees and contributions made to public schools.

(d) Section 43-1181, Credit for donations of school sites.

6. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2016:

(a) Section 43-1090, Credit for solar hot water heater plumbing stub outs and electric vehicle recharge outlets installed in houses constructed by taxpayers.

(b) Section 43-1176, Credit for solar hot water heater plumbing stub outs and electric vehicle recharge outlets installed in houses constructed by taxpayers.

(d) Section 43-1074.01, Credit for increased research activities.

(e) Section 43-1168, Credit for increased research activities.

7. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2017:

(a) Section 43-1081, Credit for pollution control equipment.

(b) Section 43-1170, Credit for pollution control equipment.

(d) Section 43-1076, Credit for employment by a healthy forest enterprise.

(e) Section 43-1162, Credit for employment by a healthy forest enterprise.

8. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2018:

(a) Section 43-1081.01, Credit for agricultural pollution control equipment.

(b) Section 43-1170.01, Credit for agricultural pollution control equipment.

(d) Section 43-1164.01, Credit for renewable energy industry.

(e) Section 43-1088, Credit for contribution to qualifying charitable organizations.

9. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2019:

(a) Section 43-1084, Credit for agricultural water conservation systems.

(b) Section 43-1075, Credit for motion picture production costs.

(d) Section 43-1075.01, Credit for motion picture infrastructure projects.

(e) Section 43-1163.01, Credit for motion picture infrastructure projects.

10. The following income tax sections are repealed, and the repeal is effective for taxable years beginning, from and after December 31, 2020:

(a) Section 43-1079.01, Credit for employing national guard members.

(b) Section 43-1167.01, Credit for employing national guard members.

(d) Section 43-1175, Credit for employment of TEMPORARY assistance for needy families recipients.

(e) Section 43-1090.01, Credit for water conservation systems.

(f) Section 43-1182, Credit for water conservation system plumbing stub outs installed in houses constructed by taxpayers. END_STATUTE

Sec. 4. Section 43-223, Arizona Revised Statutes, is amended to read:

START_STATUTE43-223. Requirements for new income tax credits established by the legislature

Any new individual or corporate income tax credit that is enacted by the legislature shall include in its enabling legislation:

1. A specific review year for the joint legislative income tax credit review committee to review the credit. The specific review year shall be the fifth full calendar year following the date the credit is enacted.

1. A repeal date as prescribed by section 43-222 that is no later than the tenth taxable year after the credit takes effect. The joint legislative income tax review committee shall review the credit in the calendar year before the regular session of the legislature meeting in the year of repeal.

2. A purpose clause that explains the rationale and objective of the tax credit. END_STATUTE