41-1514.02. Environmental technology assistance; definitions

A. On July 1, 2011, the Arizona commerce authority succeeds to the remaining functions and responsibilities formerly performed by the department of commerce under this section.  Any reference to department in this section is considered to refer to the Arizona commerce authority.

B. The department of commerce shall establish and conduct an environmental technology assistance program to promote business and economic development by recruiting and expanding companies that manufacture, produce or process solar and other renewable energy products or products from recycled materials under the conditions prescribed by this section. The department shall:

1. Assist qualified environmental technology manufacturers, producers or processors in locating or expanding facilities in this state.

2. Encourage the use of environmental technology products.

3. Encourage the development of an environmental technology industry in this state.

C. Until June 30, 1996, the department of commerce shall identify and certify to the department of revenue the names and relevant information relating to the facilities of qualified environmental technology manufacturers, producers and processors for purposes of available tax incentives. The department of commerce may revoke the certification for failure to qualify and comply with the terms and conditions prescribed by this section and shall immediately notify the department of revenue of a revocation. The department of revenue may also revoke the certification if it obtains information indicating a failure to qualify and comply. If the department of revenue proposes to revoke the certification of an environmental technology manufacturer, producer or processor, it shall afford that person the rights of appeal as provided in title 42, chapter 1, article 6. The department of commerce shall not certify any new qualified environmental technology manufacturers, producers or processors for the purposes of this section after June 30, 1996. To obtain and maintain certification, an environmental technology manufacturer, producer or processor must:

1. Apply to the department of commerce.

2. Submit and retain copies of all required information including information relating to the actual or projected number of employees at qualified environmental technology facilities in this state and the actual or projected annual capital investment in those facilities.

3. Allow such inspections and audits as are necessary to verify the accuracy of the submitted information.

4. On initial application, submit to the department of commerce the information required by section 49-109, subsection B in the manner prescribed in section 49-109, subsection C or the information required by section 49-109, subsection G, as applicable. The department of commerce shall consider the information submitted pursuant to this paragraph in its determination of certification and may deny certification if after consultation with the department of environmental quality serious, substantial and continuing violations of federal or state environmental laws are found.

D. Within sixty days after receipt of a complete application and all information required, as prescribed by the department of commerce, the department of commerce shall grant or deny certification and give written notice by certified mail to the applicant. The applicant is certified as a qualified environmental technology manufacturer, producer or processor on the date the notice of certification is delivered to the applicant.

E. To qualify for assistance under this section, an environmental technology manufacturer, producer or processor must meet the following requirements:

1. A manufacturer, producer or processor that is certified not later than July 1, 1995 by the department of commerce pursuant to this section, shall not import hazardous waste, as defined in section 49-921 as of July 1, 1993, or special waste, as defined in section 49-851 as of July 1, 1993, into this state from another state or country. Any other manufacturer, producer or processor that is certified by the department of commerce pursuant to this section, after July 1, 1995, shall not as of the date of certification import hazardous waste, as defined in section 49-921, and as interpreted by federal and state regulations or special waste, as defined in section 49-851, into this state from another state or country. This paragraph does not apply to any environmental technology manufacturer, producer or processor, or facilities and their subsequent expansions and replacements that, as of July 1, 1993, hold a storage or treatment facility permit issued by the department of environmental quality pursuant to 40 Code of Federal Regulations section 270.10 or has obtained plan approval from the department of environmental quality pursuant to section 49-762, that specifically authorizes the acceptance of special waste, for an existing or proposed recycling operation, or import hazardous or special wastes for recycling purposes.

2. The manufacturer, producer or processor shall locate or make an additional capital investment in a facility in this state that:

(a) Is either owned by a qualified environmental technology manufacturer, producer or processor, or leased by a qualified environmental technology manufacturer, producer or processor for a term of five or more years.

(b) Is used predominantly to do any of the following:

(i) Sort, store, prepare, convert, fabricate, manufacture or otherwise process finished products consisting of at least ninety percent recycled materials.

(ii) Prepare, fabricate, manufacture or otherwise process finished products that are powered exclusively with solar or other specific renewable energy.

(iii) Prepare, fabricate, manufacture or otherwise process raw material or intermediate product exclusively through a hydrometallurgical process where at least eighty-five percent of the process solution used to produce the finished product is recycled on site for additional production.

(iv) Fabricate or manufacture finished paper products that consist of at least eighty percent recycled material.

(v) Process biomass into forestry industry products.

(c) Costs, or is expected to cost, an aggregate of at least $20,000,000 of new capital investment in this state within five years after construction begins or commencement of installation of improvements.

F. Certification and qualification by an environmental technology manufacturer, producer or processor for purposes of this section does not constitute compliance with any provision of title 49 or any rule, order, procedure, permit or other regulatory measure required pursuant to title 49. An environmental technology manufacturer, producer or processor shall comply with all applicable environmental requirements of the department of environmental quality separately and independently from qualifying for assistance under this section. For purposes of complying with title 49, all definitions in that title and those adopted in rules pursuant to that title shall be applicable.

G. To qualify for tax incentives the taxpayer shall:

1. Agree with the department of commerce in writing to furnish information relating to the amount of tax benefits the taxpayer receives each year. If the taxpayer fails to provide the required information, the department of commerce shall immediately revoke the taxpayer's qualification and notify the department of revenue.

2. Enter into a memorandum of understanding with this state through the department of commerce containing employment goals. Each year the taxpayer shall report in writing to the department of commerce its performance in achieving the goals. The memorandum shall contain provisions that allow:

(a) The department of commerce to stop, readjust or recapture all or part of the tax incentives provided to the taxpayer on noncompliance with the terms of the memorandum.

(b) The department of commerce to notify the department of revenue of the conditions of noncompliance.

(c) The department of revenue to require the taxpayer to file appropriate amended tax returns reflecting the recapture of the tax incentives.

H. A manufacturer, producer or processor who is certified by the department of commerce to qualify for assistance under this section shall not have the certification revoked and shall not be disqualified because of the adoption after certification of a rule or a federal regulation relating to the requirements under subsection E of this section.

I. Retroactive to July 1, 1996, the certification of a qualified environmental technology manufacturer, producer or processor may be assigned or transferred to one or more successor taxpayers, manufacturers, producers or processors that have acquired and continue to operate a facility that was used to meet the qualifications prescribed in subsection E of this section and that continues to be used predominantly for the purposes prescribed in subsection E, paragraph 2, subdivision (b) of this section.

J. For purposes of this section:

1. "Environmental technology" means solar and other renewable energy products or recycled materials.

2. "Facility" includes a single facility, a combination of facilities, land, improvements, building improvements, real and personal property used for environmental protection facilities as defined in section 42-14154, property used to generate on-site power or energy and machinery and equipment.

3. "Finished paper product" means a paper item or commodity or one of its components, including newsprint, paper napkins, paper towels, corrugated paper and related cellulosic products, that contains not more than ten percent noncellulosic material such as laminates, binders or saturants, that has economic value to a consumer or purchaser and that is ready to be used with or without further altering its form.

4. "Finished product" means a marketable product or component of a product that has economic value to a consumer or purchaser and that is ready to be used with or without further altering its form.

5. "Hydrometallurgical processing" includes facilities used exclusively for solvent extraction electrowinning, hydrometallurgical recovery, precipitation and refining, but does not include smelters, open pit and underground mines, and concentrator processes.

6. "Machinery and equipment" means machinery and equipment that are directly or indirectly used to do any of the following:

(a) Sort, store, prepare, convert, fabricate, manufacture or otherwise process finished products consisting of at least ninety percent recycled materials, including all machinery and equipment designed and used for environmental protection on site as well as all machinery and equipment used to generate power or energy for use on site.

(b) Prepare, fabricate, manufacture or otherwise process finished products that are powered exclusively with solar or other specific renewable energy.

(c) Prepare, fabricate, manufacture or otherwise process raw material or intermediate product exclusively through a hydrometallurgical process where at least eighty-five percent of the process solution used to produce the finished product is recycled on site for additional production.

(d) Fabricate or manufacture finished paper products that consist of at least eighty percent recycled materials, including all machinery and equipment that is designed and used for environmental protection on site and machinery and equipment that is used to generate power or energy for use on site.

7. "Process solution" means solution that is required throughout the hydrometallurgical process and from which the finished product is extracted.

8. "Qualified environmental technology manufacturer, producer or processor" or "qualified environmental technology facility" means an entity that for purposes of titles 42 and 43 meets the qualifications prescribed in subsection E of this section and is certified by the department of commerce pursuant to subsection C of this section.

9. "Recycled materials" means materials that have been separated, recovered or diverted from the solid waste stream and processed and returned to the economic stream in the form of raw materials or finished products. Recycled materials include work in process by the environmental technology manufacturing, producing or processing company that is composed of at least ninety percent recycled materials and that will be further processed into a finished product.

10. "Renewable energy" means energy that is supplied from sources that are continually replenished from the sun, the earth or the waste stream, including hydroelectric, solar-thermal, photovoltaic, biomass, wind and geothermal processes.

11. "Solid waste" means any garbage, trash, rubbish, refuse, sludge from a waste treatment plant, water supply treatment plant or pollution control facility and other discarded material, including solid, liquid, semisolid or contained gaseous material resulting from industrial, agricultural, silvicultural and commercial operations and from community activities, but not including domestic sewage or hazardous waste unless such waste is received by an environmental technology manufacturer, producer or processor that holds a storage facility permit issued by the department of environmental quality pursuant to 40 Code of Federal Regulations section 270.10 as of July 1, 1993.