Assigned to ED                                                                                                                       FOR COMMITTEE

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

FACT SHEET FOR H.B. 2123

TPT; distribution; community college districts..

Purpose

            Changes the base of monies, collected from the 0.6 percent transaction privilege tax (TPT) and use tax, used to calculate the distribution to the Workforce Development Account developed by each community college district (WDAs).

Background

            Voters approved Proposition 301 in November 2000, to establish a 0.6 percent TPT and use tax. The State Treasurer distributes the collected monies to seven designated beneficiaries monthly, beginning with a debt service payment to the School Improvement Revenue Bond Debt Service Fund. After the debt service payment, the State Treasurer must distribute 12 percent of the remaining monies to the Technology and Research Initiative Fund (TRIF), and 3 percent of the remaining monies to the WDAs. Monies remaining after the three initial distributions are distributed to the other funds and entities as prescribed by statute. The 0.6 percent TPT and use tax created by Proposition 301 expires on June 30, 2021 (A.R.S. § 42-5029).

Laws 2018, Chapter 74 establishes a 0.6 percent TPT and use tax beginning July 1, 2021, and ending June 30, 2041. Statute requires the State Treasurer to distribute the collected monies to six designated beneficiaries, beginning with $64.1 million paid in monthly installments to the Classroom Site Fund (CSF). The State Treasurer will distribute 12 percent of the monies remaining after the monthly installment for the CSF to TRIF. After the payments to the CSF and TRIF, the State Treasurer will distribute 3 percent of the remaining monies to the WDAs. Remaining monies are distributed to the other funds and entities as prescribed by statute (A.R.S. § 42‑5029.02).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Requires the State Treasurer to distribute to the WDAs 3 percent of the monies collected from the 0.6 percent TPT and use tax beginning July 1, 2021, remaining after the monthly distribution to the CSF, rather than after the distributions to both the CSF and TRIF.

2. Becomes effective on the general effective date.

House Action

ED                   1/28/19      DP     13-0-0-0

3^rd Read          3/4/19                   57-0-3

Prepared by Senate Research

March 8, 2019

JO/LB/gs