Bill Text: AZ HB2672 | 2014 | Fifty-first Legislature 2nd Regular | Introduced
Bill Title: Tax credit; public school projects
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-02-13 - Referred to House WM Committee [HB2672 Detail]
Download: Arizona-2014-HB2672-Introduced.html
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REFERENCE TITLE: tax credit; public school projects |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HB 2672 |
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Introduced by Representative Carter
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AN ACT
amending title 15, chapter 10, Arizona Revised Statutes, by adding article 13; amending title 20, chapter 2, article 1, Arizona Revised Statutes, by adding section 20‑224.08; amending sections 43‑222 and 43‑1021, Arizona Revised Statutes; amending title 43, chapter 10, article 5, Arizona Revised Statutes, by adding section 43‑1077; amending section 43‑1121, Arizona Revised Statutes; amending title 43, chapter 11, article 6, Arizona Revised Statutes, by adding section 43‑1177; providing for the delayed repeal of sections 20-244.08, 43-1077 and 43-1177, Arizona Revised Statutes; relating to tax credits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 15, chapter 10, Arizona Revised Statutes, is amended by adding article 13, to read:
ARTICLE 13. PUBLIC SCHOOL INNOVATION PROJECT PROGRAM
15-1271. Public school innovation project program; selection committee; grants; annual report
A. The public school innovation project program is established for the purpose of funding innovative education projects in public schools.
B. The state board of education shall establish an innovation project selection committee that awards project funding on a competitive grant basis. Grants may be awarded to school districts or charter schools for innovative education projects that have a proven track record of success as prescribed by the innovation project selection committee, as follows:
1. Improving student achievement.
2. Relating technology, instructional delivery and material.
C. The innovation project selection committee, with the approval of the state board of education, shall prescribe the innovation project evaluation criteria, the form of the innovation project application and the application procedures.
D. For each grant awarded by the innovation project selection committee, the selection committee shall provide notice to the state board of education of the recipient of the grant, the amount awarded and any other information requested by the state board of education to enable the board to make payment of the grant to the grantee.
E. Each grantee must submit a report, for five years after receiving a project grant and longer if requested by the state board of education, to the selection committee and the state board of education on its use of the grant monies and project status and results on or before June 30 of each year following receipt of the project grant.
F. The innovation project selection committee consists of seven members who are chosen by the state board of education.
15-1272. Public school innovation project fund; exemption; grants
A. The public school innovation project fund is established consisting of monies received by the state board of education pursuant to sections 20‑224.08, 43‑1077 and 43‑1177. The state board of education shall administer the fund and shall use monies in the fund to provide grants for public school innovation projects selected by the innovation project selection committee.
B. The state board of education may not use more than ten per cent of the monies in the fund for administrative purposes.
C. Notwithstanding any other law, the monies in the fund must be received by the state board of education and be deposited, pursuant to sections 35‑146 and 35‑147, in the public school innovation project fund. On notice from the state board of education, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund. The monies in the fund are exempt from section 35‑190 relating to the lapsing of appropriations.
D. The state board of education shall pay to the grantee a project grant from the fund within thirty days after receiving the notice from the selection committee under section 15‑1271, subsection D.
15-1273. Public school innovation projects; reports
A. The state board of education shall provide the selection committee with a quarterly report of the fund, including the total amount of grant monies awarded and the fund balance.
B. The state board of education shall provide an annual report on or before September 30 to the department of revenue, in a form prescribed by the department, separately compiled and identified for the purposes of sections 20‑224.08, 43‑1077 and 43‑1177, with the following information for the previous fiscal year:
1. The total dollar amount of contributions received.
2. The total number of contributions received.
3. The name of each taxpayer and the amount of the taxpayer's contribution.
4. The total number of grants awarded.
5. The total dollar amount of administrative expenses.
C. The state board of education shall provide an annual report on or before October 31 to the president of the senate and the speaker of the house of representatives that includes all of the information required under subsection B of this section and a description of each project that applied for a grant, the reasons the project was awarded or rejected for a grant and the projects awarded a grant during the previous calendar year. The board must include in its report the project status and the project results for each grantee project for a period of five years after the grant was awarded and every two years thereafter.
15-1274. Program termination
The program established by this article ends on July 1, 2019 pursuant to section 41‑3102.
Sec. 2. Title 20, chapter 2, article 1, Arizona Revised Statutes, is amended by adding section 20-224.08, to read:
20-224.08. Premium tax credit for public school innovation project
A. A credit is allowed against the premium tax liability incurred by an insurer pursuant to section 20‑224, 20‑837, 20‑1010, 20‑1060 or 20‑1097.07 for the amount of voluntary cash contributions made by the insurer during the tax year to the public school innovation project fund established by section 15‑1272.
B. The amount of the credit is the total amount of the insurer's contributions for the tax year under subsection A of this section that is preapproved by the department of revenue pursuant to section 43‑1177, subsection D.
C. If the allowable amount of a credit under this section exceeds the insurer's state premium tax liability, the amount of the claim not used to offset the premium tax liability may be carried forward as a credit against the insurer's subsequent years' premium tax liability for a period not to exceed five taxable years.
D. An insurer that claims a tax credit against state premium tax liability is not required to pay any additional retaliatory tax imposed pursuant to section 20‑230 as a result of claiming that tax credit.
E. The department of insurance, with the cooperation of the department of revenue, shall adopt rules necessary for the administration of this section.
Sec. 3. Section 43-222, Arizona Revised Statutes, is amended to read:
43-222. Income tax credit review schedule
The joint legislative income tax credit review committee shall review the following income tax credits:
1. For years ending in 0 and 5, sections 43‑1079.01, 43‑1087, 43‑1088, 43‑1090.01, 43‑1167.01, 43‑1175 and 43‑1182.
2. For years ending in 1 and 6, sections 43‑1074.02, 43‑1083, 43‑1083.02, 43‑1085.01, 43‑1164.02, 43-1164.03 and 43‑1183.
3. For years ending in 2 and 7, sections 43‑1073, 43‑1079, 43‑1080, 43‑1085, 43‑1086, 43‑1089, 43‑1089.01, 43‑1089.02, 43-1089.03, 43‑1090, 43‑1164, 43‑1167, 43‑1169, 43‑1176 and 43‑1181.
4. For years ending in 3 and 8, sections 43‑1074.01, 43‑1081, 43‑1168, 43‑1170 and 43‑1178.
5. For years ending in 4 and 9, sections 43‑1076, 43‑1076.01, 43‑1077, 43‑1081.01, 43‑1083.01, 43‑1084, 43‑1162, 43‑1162.01, 43‑1164.01, 43‑1170.01, 43‑1177 and 43-1184 and, beginning in 2019, sections 43-1083.03 and 43‑1164.04.
Sec. 4. Section 43-1021, Arizona Revised Statutes, is amended to read:
43-1021. Additions to Arizona gross income
In computing Arizona adjusted gross income, the following amounts shall be added to Arizona gross income:
1. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43‑1333 increases the beneficiary's Arizona gross income.
2. An amount equal to the ordinary income portion of a lump sum distribution that was excluded from federal adjusted gross income pursuant to section 402(d) of the internal revenue code.
3. The amount of interest income received on obligations of any state, territory or possession of the United States, or any political subdivision thereof, located outside the state of Arizona, reduced, for tax years beginning from and after December 31, 1996, by the amount of any interest on indebtedness and other related expenses that were incurred or continued to purchase or carry those obligations and that are not otherwise deducted or subtracted in arriving at Arizona gross income.
4. Annuity income received during the taxable year to the extent that the sum of the proceeds received from such annuity in all taxable years prior to and including the current taxable year exceeds the total consideration and premiums paid by the taxpayer. This paragraph applies only to those annuities with respect to which the first payment was received prior to December 31, 1978.
5. The excess of a partner's share of partnership taxable income required to be included under chapter 14, article 2 of this title over the income required to be reported under section 702(a)(8) of the internal revenue code.
6. The excess of a partner's share of partnership losses determined pursuant to section 702(a)(8) of the internal revenue code over the losses allowable under chapter 14, article 2 of this title.
7. The amount by which the adjusted basis of property described in this paragraph and computed pursuant to the internal revenue code exceeds the adjusted basis of such property computed pursuant to this title and the income tax act of 1954, as amended. This paragraph shall apply to all property that is held for the production of income and that is sold or otherwise disposed of during the taxable year, except depreciable property used in a trade or business.
8. The amount of depreciation or amortization of costs of any capital investment that is deducted pursuant to section 167 or 179 of the internal revenue code by a qualified defense contractor with respect to which an election is made to amortize pursuant to section 43‑1024.
9. The amount of gain from the sale or other disposition of a capital investment that a qualified defense contractor has elected to amortize pursuant to section 43‑1024.
10. Amounts withdrawn from the Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan or a county or city retirement plan by an employee on termination of employment before retirement to the extent they were deducted in arriving at Arizona taxable income in any year.
11. That portion of the net operating loss included in federal adjusted gross income that has already been taken as a net operating loss for Arizona purposes or that is separately taken as a subtraction under the special net operating loss transition rule.
12. Any nonitemized amount deducted pursuant to section 170 of the internal revenue code representing contributions to an educational institution that denies admission, enrollment or board and room accommodations on the basis of race, color or ethnic background except those institutions primarily established for the education of American Indians.
13. Amounts withdrawn from a medical savings account by the individual during the taxable year computed pursuant to section 220(f) of the internal revenue code and not included in federal adjusted gross income.
14. Any amount of agricultural water conservation expenses that were deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1084.
15. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43‑1080 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.
16. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1080 and that is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1080.
17. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under either section 43‑1081 or 43‑1081.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.
18. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1074.02, 43‑1081 or 43‑1081.01 and that is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1074.02, 43‑1081 or 43‑1081.01, as applicable.
19. The deduction referred to in section 1341(a)(4) of the internal revenue code for restoration of a substantial amount held under a claim of right.
20. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 43‑1029, subsection F.
21. Any amount deducted pursuant to section 170 of the internal revenue code representing contributions to a school tuition organization or a public school for which a credit is claimed under section 43‑1077, 43‑1089, 43‑1089.01 or 43‑1089.03.
22. Any amount deducted in computing Arizona gross income as expenses for installing solar stub outs or electric vehicle recharge outlets in this state with respect to which a credit is claimed pursuant to section 43‑1090.
23. Any wage expenses deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1087 and representing net increases in qualified employment positions for employment of temporary assistance for needy families recipients.
24. Any amount deducted for conveying ownership or development rights of property to an agricultural preservation district under section 48‑5702 for which a credit is claimed under section 43‑1081.02.
25. The amount of any depreciation allowance allowed pursuant to section 167(a) of the internal revenue code to the extent not previously added.
26. With respect to property for which an expense deduction was taken pursuant to section 179 of the internal revenue code in a taxable year beginning before January 1, 2013, the amount in excess of twenty‑five thousand dollars.
27. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43‑1090.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.
28. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1090.01 and that is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1090.01.
29. The amount of a nonqualified withdrawal, as defined in section 15‑1871, from a college savings plan established pursuant to section 529 of the internal revenue code that is made to a distributee to the extent the amount is not included in computing federal adjusted gross income, except that the amount added under this paragraph shall not exceed the difference between the amount subtracted under section 43‑1022 in prior taxable years and the amount added under this section in any prior taxable years.
30. The amount of unemployment compensation that is excluded from federal adjusted gross income pursuant to section 85(c) of the internal revenue code as added by section 1007 of the American recovery and reinvestment act of 2009 (P.L. 111-5).
31. The amount of discharge of indebtedness income that is deferred and excluded from the computation of federal adjusted gross income or federal taxable income in the current taxable year pursuant to section 108(i) of the internal revenue code as added by section 1231 of the American recovery and reinvestment act of 2009 (P.L. 111-5).
32. The amount of any previously deferred original issue discount that was deducted in computing federal adjusted gross income or federal taxable income in the current year pursuant to section 108(i) of the internal revenue code as added by section 1231 of the American recovery and reinvestment act of 2009 (P.L. 111-5), to the extent that the amount was previously subtracted from Arizona gross income pursuant to section 43‑1022, paragraph 31.
33. For taxable years beginning from and after December 31, 2011 through December 31, 2014, the amount of any deduction that is claimed in computing federal adjusted gross income for health insurance premiums or contributions to a health savings account for which a credit is claimed under section 43‑1087.01 or 43‑1185.
Sec. 5. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1077, to read:
43-1077. Credit for public school innovation project
A. A credit is allowed against the taxes imposed by this title for the amount of voluntary cash contributions by the taxpayer or on the taxpayer's behalf during the taxable year to the public school innovation project fund established by section 15‑1272. Except as provided by subsection C of this section, the amount of the credit may not exceed:
1. Five hundred dollars in any taxable year for a single individual or a head of household.
2. One thousand dollars in any taxable year for a married couple filing a joint return.
B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one‑half of the tax credit that would have been allowed for a joint return.
C. For each taxable year beginning on or after January 1, the department shall adjust the dollar amounts prescribed by subsection A, paragraphs 1 and 2 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States bureau of labor statistics, except that the dollar amounts may not be revised downward below the amounts allowed in the prior taxable year. The revised dollar amounts shall be raised to the nearest whole dollar.
D. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.
E. The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.
Sec. 6. Section 43-1121, Arizona Revised Statutes, is amended to read:
43-1121. Additions to Arizona gross income; corporations
In computing Arizona taxable income for a corporation, the following amounts shall be added to Arizona gross income:
1. The amounts computed pursuant to section 43‑1021, paragraphs 3 through 9, 12, 25, 26, 31, 32 and 33.
2. The amount of dividend income received from corporations and allowed as a deduction pursuant to sections 243, 244 and 245 of the internal revenue code.
3. Taxes which are based on income paid to states, local governments or foreign governments and which were deducted in computing federal taxable income.
4. Expenses and interest relating to tax‑exempt income on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the tax imposed by this title. Financial institutions, as defined in section 6‑101, shall be governed by section 43‑961, paragraph 2.
5. Commissions, rentals and other amounts paid or accrued to a domestic international sales corporation controlled by the payor corporation if the domestic international sales corporation is not required to report its taxable income to this state because its income is not derived from or attributable to sources within this state. If the domestic international sales corporation is subject to article 4 of this chapter, the department shall prescribe by rule the method of determining the portion of the commissions, rentals and other amounts which are paid or accrued to the controlled domestic international sales corporation and which shall be deducted by the payor. For the purposes of this paragraph, "control" means direct or indirect ownership or control of fifty per cent or more of the voting stock of the domestic international sales corporation by the payor corporation.
6. Federal income tax refunds received during the taxable year to the extent they were deducted in arriving at Arizona taxable income in a previous year.
7. The amount of net operating loss taken pursuant to section 172 of the internal revenue code.
8. The amount of exploration expenses determined pursuant to section 617 of the internal revenue code to the extent that they exceed seventy‑five thousand dollars and to the extent that the election is made to defer those expenses not in excess of seventy‑five thousand dollars.
9. Amortization of costs incurred to install pollution control devices and deducted pursuant to the internal revenue code or the amount of deduction for depreciation taken pursuant to the internal revenue code on pollution control devices for which an election is made pursuant to section 43‑1129.
10. The amount of depreciation or amortization of costs of child care facilities deducted pursuant to section 167 or 188 of the internal revenue code for which an election is made to amortize pursuant to section 43‑1130.
11. Arizona state income tax refunds received, to the extent the amount of the refunds is not already included in Arizona gross income, if a tax benefit was derived by deduction of this amount in a prior year.
12. The loss of an insurance company that is exempt under section 43‑1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43‑947.
13. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43‑1169 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.
14. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43‑1169 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1169.
15. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under either section 43‑1170 or 43‑1170.01 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.
16. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under either section 43‑1170 or 43‑1170.01 and which is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43‑1170 or 43‑1170.01, as applicable.
17. The deduction referred to in section 1341(a)(4) of the internal revenue code for restoration of a substantial amount held under a claim of right.
18. The amount by which a capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds the capital loss carryover allowable pursuant to section 43‑1130.01, subsection F.
19. Any amount deducted in computing Arizona taxable income as expenses for installing solar stub outs or electric vehicle recharge outlets in this state with respect to which a credit is claimed pursuant to section 43‑1176.
20. Any wage expenses deducted pursuant to the internal revenue code for which a credit is claimed under section 43‑1175 and representing net increases in qualified employment positions for employment of temporary assistance for needy families recipients.
21. Any amount of expenses that were deducted pursuant to the internal revenue code and for which a credit is claimed under section 43‑1178.
22. Any amount deducted for conveying ownership or development rights of property to an agricultural preservation district under section 48‑5702 for which a credit is claimed under section 43‑1180.
23. The amount of any deduction that is claimed in computing Arizona gross income and that represents a donation of a school site for which a credit is claimed under section 43‑1181.
24. Any amount deducted in computing Arizona taxable income as expenses for installing water conservation system plumbing stub outs in this state with respect to which a credit is claimed pursuant to section 43‑1182.
25. Any amount deducted pursuant to section 170 of the internal revenue code representing contributions to a school tuition organization or a public school for which a credit is claimed under section 43‑1177, 43‑1183 or 43‑1184.
Sec. 7. Title 43, chapter 11, article 6, Arizona Revised Statutes, is amended by adding section 43-1177, to read:
43-1177. Credit for public school innovation project
A. A credit is allowed against the taxes imposed by this title for the amount of voluntary cash contributions made by the taxpayer during the taxable year to the public school innovation project fund established by section 15‑1272.
B. The amount of the credit is the total amount of the taxpayer's contributions for the taxable year under subsection A of this section and is preapproved by the department of revenue pursuant to subsection d of this section.
C. The department of revenue:
1. May not allow tax credits under this section and section 20‑224.08 that exceed in the aggregate a combined total of five million dollars in any fiscal year.
2. Shall preapprove tax credits under this section and section 20‑224.08 subject to subsection D of this section.
3. Shall allow the tax credits under this section and section 20‑224.08 on a first come, first served basis.
D. For the purposes of subsection C, paragraph 2 of this section, before making a contribution to the public school innovation project fund, the taxpayer under this title or title 20 must notify the state board of education of the total amount of the contribution that the taxpayer intends to make to the fund. Before accepting the contribution, the state board of education shall request preapproval from the department of revenue for the taxpayer's intended contribution amount. The department of revenue shall preapprove or deny the requested amount within twenty days after receiving the request from the state board of education. If the department of revenue preapproves the request, the state board of education shall immediately notify the taxpayer that the requested amount was preapproved by the department of revenue. In order to receive a tax credit under this subsection, the taxpayer shall make the contribution to the public school innovation project fund within twenty days after receiving notice from the state board of education that the requested amount was preapproved. If the state board of education does not receive the preapproved contribution from the taxpayer within the required twenty days, the state board shall immediately notify the department of revenue and the department shall no longer include this preapproved contribution amount when calculating the limit prescribed in subsection C, paragraph 1 of this section.
E. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.
F. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.
G. The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.
h. The department of revenue shall adopt rules necessary for the administration of this section.
Sec. 8. Delayed repeal
Sections 20-224.08, 43-1077 and 43-1177, Arizona Revised Statutes, as added by this act, are repealed from and after June 30, 2019.
Sec. 9. Purpose
Pursuant to section 43-223, Arizona Revised Statutes, the purpose of sections 43-1077 and 43-1177, Arizona Revised Statutes, as added by this act, is to encourage the implementation of innovative education projects in the public schools in this state.
