Assigned to COM & APPROP                                                                                          AS PASSED BY COW

 


 

 

 


ARIZONA STATE SENATE

Fifty-Sixth Legislature, First Regular Session

 

AMENDED

FACT SHEET FOR h.b. 2809

 

public infrastructure improvements; reimbursement

Purpose

Increases, from $100,000,000 to $200,000,000, the aggregate cap on the amount of state prime contracting transaction privilege tax (TPT) revenues that must be paid to cities, towns and counties for public infrastructure improvements for the benefit of a manufacturing facility.

Background

TPT is imposed on the gross receipts of taxable businesses, with the exception of prime contractors. The tax base for the prime contracting classification is 65 percent of the gross proceeds of sales or gross income derived from the business and certain amounts must be deducted before computing the tax base. The TPT rate for prime contracting is 5.6 percent of the tax base (A.R.S. §§ 42-5010; 42-5010.01; and 42-5075).

From October 1, 2013, through September 30, 2033, the State Treasurer must pay a city, town or county the total amount of state prime contracting TPT revenues derived from contracts to construct buildings and associated improvements for the benefit of a manufacturing facility for the purpose of funding up to 80 percent of the cost of the public infrastructure improvements. The aggregate amount of state prime contracting TPT revenues paid to all cities, towns and counties for public infrastructure improvements may not exceed $100,000,000. In order for a city, town or county to qualify for state prime contracting TPT revenue distributions, the manufacturing facility must agree to make a capital investment of at least: 1) $500,000,000 in a county with a population of more than 800,000 persons; or 2) $50,000,000 in a county with a population fewer than 800,000 persons (A.R.S. § 42-5032.02).

If increasing the aggregate cap on the amount of state prime contracting TPT revenues that must be paid to cities, towns and counties results in the payment of state prime contracting TPT revenues to cities, towns and counties in an amount that would otherwise exceed $100,000,000 and be directed to the state General Fund, there may be a fiscal impact to the state General Fund.

Provisions

1.   Increases, from $100,000,000 to $200,000,000, the aggregate cap on the amount of state prime contracting TPT revenues that must be paid to cities, towns and counties for public infrastructure improvements for the benefit of a manufacturing facility.

2.   Makes technical changes.

3.   Becomes effective on the general effective date.

Amendments Adopted by Committee of the Whole

· Increases, from $100,000,000 to $200,000,000, rather than eliminates, the aggregate cap on the amount of state prime contracting transaction privilege tax revenues that must be paid to cities, towns and counties for public infrastructure improvements for the benefit of a manufacturing facility.

House Action                                                           Senate Action

COM               2/14/23      DP    10-0-0-0                COM               3/22/23      DP    7-0-0   

3rd Read           3/7/23                 60-0-0                   APPROP         3/28/23      DP    9-0-1

Prepared by Senate Research

June 12, 2023

JT/FB/sr