SB 1245 — military justice; technical correction

SB1245 - 542R - S-AppropriationsS -Ver Strike  Everything-Proposed    Fifty-fourthSenate Legislature                                          Engrossed Appropriations        State of Arizona Senate Fifty-fourth Legislature Second Regular Session                                                 Session S.B.      SENATE BILL 1245       AN ACT   amending sections 41‑1512, 41‑1520, 43‑1083.03, 43‑1164.04, 43‑1164.05 and 43‑1168, Arizona Revised Statutes;

 amending PROPOSEDlaws SENATE2016, AMENDMENTSchapter TO372, S.B.section 68;

1245relating (Reference to printedtax bill)credits.     Strike everything after the enacting clause and insert:

"Section 1.  Section  41-1512,  Arizona(TEXT RevisedOF Statutes,BILL isBEGINS amendedON toNEXT read:PAGE)   Be it enacted by the Legislature of the State of Arizona:

Section 1.  Section 41-1512, Arizona Revised Statutes, is amended to read:

H.  The authority shall establish a process for qualifying and preapproving applicants for the income tax credits.  The authority shall not preapprove applicants as qualifying for credits under this section for any taxable year beginning from and after December 31, 2022 2028. 2030.  Preapproval is based on:

I.  Within thirty days after receiving a complete and correct application, the authority shall review the application to determine whether the applicant satisfies all of the criteria prescribed by this section and either preapprove the project as qualifying for the purposes of an income tax credit or provide reasons for its denial.  Thedenial.  The authority shall send copies of each preapproval to the department of revenue.

O.  Before an applicant applies for postapproval under subsection P of this section, the applicant must enter into a written managed review agreement with the chief executive officer of the authority that establishes the requirements of a managed review to be conducted under this subsection at the applicant's expense.  Theexpense.  The managed review must be conducted by a certified public accountant who is selected by the applicant, who is licensed in this state or who has a limited reciprocity privilege pursuant to section 32‑725 and who is approved by the chief executive officer.  The certified public accountant and the firm the certified public accountant is affiliated with shall not regularly perform services for the applicant or its affiliates.  The managed review shall include an analysis of the applicant's invoices, checks, accounting records and other documents and information to verify its base investment and other requirements prescribed by section 43‑1083.03 or 43‑1164.04 to confirm the amount of credit.  The certified public accountant shall furnish written findings of the managed review to the chief executive officer.  The chief executive officer shall review the findings and may examine records and perform other reviews that the chief executive officer considers necessary to verify that the managed review substantially conforms to the terms of the managed review agreement.  The chief executive officer shall accept or reject the findings of the managed review.  If the chief executive officer rejects all or part of the managed review, the chief executive officer shall provide written reasons for the rejection.

1.  Keep annual records of the information provided on applications for qualified facilities.  Thesefacilities.  These records shall reflect a percentage comparison of the annual amount of monies credited to qualified facilities to the estimated amount of monies spent in this state in the form of qualifying investments.

3.  Not later than April 30 following each calendar year, prepare and publish a report summarizing the information collected pursuant to this subsection.  The authority shall make copies of the annual report available to the public on request.

9.  "Qualifying investment" means investment in land, buildings, machinery, equipment and fixtures for expansion of an existing qualified facility or establishment of a new qualified facility in this state after June 30, 2012 for a facility completed in a taxable year beginning from and after December 31, 2012.  If the qualified facility is a build‑to‑suit facility leased to the taxpayer, qualifying investment includes the costs prescribed in this paragraph that are spent by the third‑party developer with respect to the qualified facility.  Qualifyingfacility.  Qualifying investment does not include relocating an existing qualified facility in this state to another location in this state without additional capital investment of at least two hundred fifty thousand dollars $250,000.

C.  Within sixty days after receiving a complete and correct application, the authority shall review the application and either issue a written certification that the international operations center qualifies for the utility relief or provide written reasons for its denial.  Adenial.  A failure to approve or deny the application within sixty days after the date of submittal constitutes certification of the international operations center, and the authority shall issue written certification to the owner or operator within fourteen days.  Thedays.  The authority shall send a copy of the certification to the department of revenue.

START_STATUTE43-1083.03.  Credit for qualified facilities A.  For taxable years beginning from and after December 31, 2012 through December 31, 2022 2028,2030, a credit is allowed against the taxes imposed by this title for qualifying investment and employment in expanding or locating a qualified facility in this state.  To qualify for the credit, after June 30, 2012 the taxpayer must invest in a new qualified facility or expand an existing qualified facility in this state and produce new full‑time employment positions where the job duties are performed at associated with the location of the qualifying investment.  The taxpayer must meet the employee compensation and employee health benefit requirements prescribed by section 41‑1512.

(b)  The taxpayer may claim all five annual installments of a credit that was preapproved before January 1, 2023 2029 by the Arizona commerce authority notwithstanding any intervening repeal or other termination of the credit.

D.  To be counted for the purposes of the credit, an employee must have been employed at with job duties associated with the qualified facility for at least ninety days during the taxable year in a permanent full-time employment position of at least one thousand seven hundred fifty hours per year.  An employee who is hired during the last ninety days of the taxable year shall be considered a new employee during the next taxable year.  To be counted for the purposes of the credit during the first taxable year of employment, the employee must not have been previously employed by the taxpayer within twelve months before the current date of hire.  Thehire.  The terms of employment must comply in all cases with the requirements of section 41‑1512 and be certified by the Arizona commerce authority.

START_STATUTE43-1164.04.  Credit for qualified facilities A.  For taxable years beginning from and after December 31, 2012 through December 31, 2022 2028,2030, a credit is allowed against the taxes imposed by this title for qualifying investment and employment in expanding or locating a qualified facility in this state.  To qualify for the credit, after June 30, 2012 the taxpayer must invest in a new qualified facility or expand an existing qualified facility in this state and produce new full‑time employment positions where the job duties are performed at associated with the location of the qualifying investment.  The taxpayer must meet the employee compensation and employee health benefit requirements prescribed by section 41‑1512.

(b)  The taxpayer may claim all five annual installments of a credit that was preapproved before January 1, 2023 2029 by the Arizona commerce authority notwithstanding any intervening repeal or other termination of the credit.

1.  The taxpayer invests at least $100,000,000 in one or more new renewable energy facilities in this state that produce energy for self‑consumption using renewable energy resources.  The minimum investment must be completed within a three-year period beginning on the date the initial application is received or by December 31, 2018 2028,2030, whichever is earlier.

C.  Subject to subsection F of this section, the credit authorized by this section is $5,000,000 per year for five years for each renewable energy facility.  The maximum credit allowed per taxpayer per year is $5,000,000.  The taxpayer, including all affiliates of the taxpayer, may not cumulate tax credits under this section over different taxable years exceeding, in the aggregate, $25,000,000.  The initial credit for each facility is claimed in the year that the facility becomes operational.  A credit, other than carryovers allowed under subsection M of this section, may not be claimed for any taxable year beginning after December 31, 20252025.  2035.An international operations center that is initially certified pursuant to section 41-1520, subsection C after December 31, 2018 may not claim the tax credit authorized by this section.

F.  The department shall review each application under subsection E of this section and preapprove the taxpayer for a specified amount of credit that is authorized.  Credits are allowed under this section on a first‑come, first‑served basis.  The department may not authorize tax credits under this section that exceed in the aggregate a total of $10,000,000 for any calendar year.  Theyear. portion of each year's limit that is reserved for each taxpayer must be based on the year that each credit is expected to be claimed using the dates provided in subsection E, paragraph 3 of this section.  If the year a facility is completed is different from the estimated completion date provided in subsection E, paragraph 3 of this section, the taxpayer must amend the application with the new dates.  If an application is received that, if authorized, would require the department to exceed the $10,000,000 limit, the department shall grant the applicant only the remaining credit amount that would not exceed the $10,000,000 limit.  After the department authorizes $10,000,000 in tax credits, the department shall deny any subsequent applications that are received for that calendar year.  The department may not authorize any additional tax credits that exceed the $10,000,000 limit even if the amounts that have been certified to any taxpayer are not claimed or a taxpayer otherwise fails to meet the requirements to claim the additional credit.

The portion of each year's limit that is reserved for each taxpayer must be based on the year that each credit is expected to be claimed using the dates provided in subsection E, paragraph 3 of this section.  If the year a facility is completed is different from the estimated completion date provided in subsection E, paragraph 3 of this section, the taxpayer must amend the application with the new dates.  If an application is received that, if authorized, would require the department to exceed the $10,000,000 limit, the department shall grant the applicant only the remaining credit amount that would not exceed the $10,000,000 limit.  After the department authorizes $10,000,000 in tax credits, the department shall deny any subsequent applications that are received for that calendar year.  The department may not authorize any additional tax credits that exceed the $10,000,000 limit even if the amounts that have been certified to any taxpayer are not claimed or a taxpayer otherwise fails to meet the requirements to claim the additional credit.

I.  The taxpayer must submit a request for final certification to the department within thirty days after each of the renewable energy facilities for which an authorization was given under subsection F of this section becomes operational.  Within thirty days after receiving a completed request under this subsection, the department shall review the request and either issue a final certification of the credit to the taxpayer or issue a denial of the credit if it is determined that the requirements of this section have not been met.  Everymet.  Every final certification issued under this subsection must include a facility code issued by the department that is unique to each facility.  To show that the facility has been certified, the taxpayer shall include with the tax return the facility code for each facility for which a credit is claimed.  If the taxpayer is the owner or operator of an international operations center, the taxpayer must submit the request for final certification for each of the renewable energy facilities for which capital investment will be claimed towards the required investment threshold and must submit additional evidence to the department within sixty days after the end of the fifth year of operation of each facility that the requirements of subsection B, paragraph 2 of this section have been met.

J.  If the taxpayer fails to make the required investment in renewable energy facilities within the time period required by subsection B, paragraph 1 of this section or if the certification of an international operations center has been revoked under section 41‑1520 due to a failure to make a $1,250,000,000 investment in the center within ten years after certification or if the taxpayer fails to receive final certification of the credit under subsection I of this section, the taxpayer is not eligible and must cease claiming any further credits under this section and shall reimburse the amount of all credits previously received under this section.  The reimbursement must be made on the taxpayer's income tax return for the taxable year in which it is first known that the required investment would not be made within the required time or the taxable year in which the certification was revoked.  The department may give special consideration or allow a temporary exemption from reimbursement if there is extraordinary hardship due to factors beyond the taxpayer's control.  Ifcontrol.  If the reimbursement is due to revocation of the certification of an international operations center due to a failure to invest $1,250,000,000 in the center within ten years after certification, the credits shall be reimbursed in inverse proportion to the total capital investment made in the international operations center divided by $1,250,000,000.  The department may require reimbursement before the tenth anniversary of certification of an international operations center if the facility has been closed or relocated or the taxpayer has otherwise demonstrated that the $1,250,000,000 investment will not be timely made.

(i)  For taxable years beginning before December 31, 2021 2028,2030, the credit is equal to twenty‑four percent of that amount.

(ii)  For taxable years beginning from and after December 31, 2021 2028,2021 2030, the credit is equal to twenty percent of that amount.

(i)  For taxable years beginning before December 31, 2021 2028,2030, the credit is equal to six hundred thousand dollars $600,000 plus fifteen percent of any amount exceeding two million five hundred thousand dollars $2,500,000.

(ii)  For taxable years beginning from and after December 31, 2021 2028,2030, the credit is equal to five hundred thousand dollars $500,000 plus eleven percent of any amount exceeding two million five hundred thousand dollars $2,500,000.

(d)  For taxable years beginning from and after December 31, 2011, an additional credit amount is allowed if the taxpayer made basic research payments during the taxable year to a university under the jurisdiction of the Arizona board of regents.  The additional credit amount is equal to ten percent of the excess, if any, of the basic research payments over the qualified organization base period amount for the taxable year.  The department shall not allow credit amounts under this subdivision and section 43‑1074.01, subsection A, paragraph 1, subdivision (c) that exceed, in the aggregate, a combined total of ten million dollars $10,000,000 in any calendar year.  Subject to that limit, on application by the taxpayer, the department shall certify credit amounts under this subdivision and section 43‑1074.01, subsection A, paragraph 1, subdivision (c) based on priority placement established by the date that the taxpayer filed the application.  For taxable years beginning from and after December 31, 2014, any basic research payments used to determine the additional credit under this subdivision must first receive certification from the Arizona commerce authority pursuant to section 41‑1507.01.  The additional credit amount under this subdivision shall not exceed the amount allowed based on actual basic research payments or the department's certification, whichever is less.  If an application, if certified in full, would exceed the ten million dollar $10,000,000 limit, the department shall certify only an amount within that limit.  After the limit is attained, the department shall deny any subsequent applications regardless of whether other certified amounts are not actually claimed as a credit or other taxpayers fail to qualify to actually claim certified amounts.  Notwithstandingamounts.  Notwithstanding subsections B and D of this section, any amount of the additional credit under this subdivision that exceeds the taxes otherwise due under this title is not refundable, but may be carried forward to the next five consecutive taxable years.  Foryears.  For the purposes of this subdivision, "basic research payments" and "qualified organization base period amount" have the same meanings prescribed by section 41(e) of the internal revenue code.

B.  Except as provided by subsection D of this section, if the allowable credit under this section exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the credit claimed for taxable years beginning before January 1, 2022 not used to offset taxes may be carried forward to the next fifteen consecutive taxable years, And the amount of the credit claimed for taxable years beginning from and after December 31, 2021 not used to offset taxes may be carried forward to the next ten consecutive taxable years.  The amount of credit carryforward from taxable years beginning from and after December 31, 2000 through December 31, 2002 that may be used under this subsection in any taxable year may not exceed the taxpayer's tax liability under this title or five hundred thousand dollars $500,000, whichever is less, minus the credit under this section for the current taxable year's qualified research expenses.  The amount of credit carryforward from taxable years beginning from and after December 31, 2002 that may be used under this subsection in any taxable year may not exceed the taxpayer's tax liability under this title minus the credit under this section for the current taxable year's qualified research expenses.  A taxpayer that carries forward any amount of credit under this subsection may not thereafter claim a refund of any amount of the credit under subsection D of this section.

C.  If a taxpayer has qualified research expenses that are carried forward from taxable years beginning before January 1, 2001, the amount of the expenses carried forward shall be converted to a credit carryforward by multiplying the amount of the qualified expenses carried forward by twenty percent.  A credit carryforward determined under this subsection from taxable years beginning before January 1, may be carried forward to not more than fifteen years from the year in which the expenses were incurred.  Theincurred.  A credit carryforward determined under this subsection from taxable years beginning from and after December 31, 2021 may be carried forward to not more than ten years from the year in which the expenses were incurred.  The amount of credit carryforward from taxable years beginning before January 1, 2001 that may be used under this subsection in any taxable year may not exceed the taxpayer's tax liability under this title or five hundred thousand dollars $500,000, whichever is less, minus the credit under this section for the current taxable year's qualified research expenses.  The total amount of credit carryforward from taxable years beginning before January 1, 2003 that may be used in any taxable year under subsection B and this subsection may not exceed the taxpayer's tax liability under this title or five hundred thousand dollars $500,000, whichever is less, minus the credit under this section for the current taxable year's qualified research expenses.

Sec. 68.  Delayed repeal Sections 41-1512, 43-1083.03 and 43-1164.04, Arizona Revised Statutes, as amended by this act, are repealed from and after December 31, 2023 2029."2031. Amend title to conform     SINE KERR   1245KERR 02/20/2020 1:30 PM C:

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