ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

Senate: FIN DPA 8-0-2-0 | 3rd Read 30-0-0-0

House: WM DP 10-0-0-0

SB 1139: tax credits; performance measures; reporting

Sponsor:  Senator Mesnard, LD 17

Caucus & Cow

Overview

Establishes performance measures and reporting requirements for the qualified facilities income tax credit and the agricultural water conservation system income tax credit.

History

The ACA is required to publish an annual report related to investments in qualified facilities summarizing: 1) information provided on applications for qualified facilities that reflect a percentage comparison of the annual amount of monies credited to qualified facilities to the estimated amount of monies spent in the form of qualifying investments; and 2) annual data on growth of qualified facilities and related employment and wages.

Additionally, statute provides that the ACA must publish in its annual report: 1) the name of each business and the amount of income tax credits preapproved for each qualifying investment; and 2) the amount of income tax credits postapproved with respect to each qualifying investment (A.R.S. § 41-1512).

An individual income tax credit is allowed for expenses incurred from purchasing and installing an agricultural water conservation system. The amount of the credit is equal to 75% of the qualifying expenses. In order to qualify for the credit, the agricultural water conservation system must be designed to conserve water that is used by the taxpayer to: 1) produce crops, fruits or other agricultural products; 2) raise, harvest or grow trees; or 3) sustain livestock (A.R.S. § 43-1084).

Provisions

ACA Annual Report

1.    ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRequires the ACA to publish in its annual report the amount of income tax credits postapproved with respect to each qualifying investment, including:

a)    The aggregate number of full-time employees (FTEs) hired by all qualified facilities in the preceding calendar year, including the number of FTEs that were Arizona residents on the date of hire; and

b)    The aggregate capital expenditures invested by all qualified facilities in Arizona as result of the qualified facilities corporate and individual income tax credit. (Sec. 1)

2.    Instructs the ACA to transmit copies of the annual report to the Joint Legislative Budget Committee (JLBC). (Sec. 1)

Agricultural Water Conservation System Tax Credit

3.    Requires each tax credit claimant to annually report, by May 15, to DOR the reduction in water usage as a result of installing the agricultural water conservation system. (Sec. 2)

4.    Directs DOR to annually report, by June 15, to JLBC the water usage reduction as a result of installing the agricultural water conservation systems, as reported by all claimants. (Sec. 2)

5.    Requires, beginning June 15, 2021, DOR to biannually report to JLBC the number of states where taxpayers receive an income tax credit that is comparable to the agricultural water conservation system tax credit. (Sec. 2)

Miscellaneous

6.    Contains a delayed effective date of January 1, 2021. (Sec. 3)

7.    Makes technical changes. (Sec. 1, 2)

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11.                    SB 1139

12.  Initials VP/EB        Page 0 Caucus & COW

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