Bill Text: AZ HB2841 | 2012 | Fiftieth Legislature 2nd Regular | Introduced


Bill Title: Clean elections; contributions; traditional financing

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2012-03-01 - House majority caucus: Do pass [HB2841 Detail]

Download: Arizona-2012-HB2841-Introduced.html

 

 

 

REFERENCE TITLE: clean elections; contributions; traditional financing

 

 

 

 

State of Arizona

House of Representatives

Fiftieth Legislature

Second Regular Session

2012

 

 

HB 2841

 

Introduced by

Representatives Proud, Gowan: Senators Burges, Reagan

 

 

AN ACT

 

amending sections 16-901, 16-901.01, 16-905, 16-941, 16-945, 16-946, 16-947, 16-949, 16-950, 16-951, 16-952, 16-953, 16-954, 16-956, 16-958, 16-959, 16‑961, 41-2421, 43-323, 43-1071 and 43-1096, Arizona Revised Statutes; relating to campaign contributions and expenses.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



Be it enacted by the Legislature of the State of Arizona:

Section 1.  Section 16-901, Arizona Revised Statutes, is amended to read:

START_STATUTE16-901.  Definitions

In this chapter, unless the context otherwise requires:

1.  "Agent" means, with respect to any person other than a candidate, any person who has oral or written authority, either express or implied, to make or authorize the making of expenditures as defined in this section on behalf of a candidate, any person who has been authorized by the treasurer of a political committee to make or authorize the making of expenditures or a political consultant for a candidate or political committee.

2.  "Candidate" means an individual who receives or gives consent for receipt of a contribution for his nomination for or election to any office in this state other than a federal office.

3.  "Candidate's campaign committee" means a political committee designated and authorized by a candidate.

4.  "Clearly identified candidate" means that the name, a photograph or a drawing of the candidate appears or the identity of the candidate is otherwise apparent by unambiguous reference.

5.  "Contribution" means any gift, subscription, loan, advance or deposit of money or anything of value made for the purpose of influencing an election including supporting or opposing the recall of a public officer or supporting or opposing the circulation of a petition for a ballot measure, question or proposition or the recall of a public officer and:

(a)  Includes all of the following:

(i)  A contribution made to retire campaign debt.

(ii)  Money or the fair market value of anything directly or indirectly given or loaned to an elected official for the purpose of defraying the expense of communications with constituents, regardless of whether the elected official has declared his candidacy.

(iii)  The entire amount paid to a political committee to attend a fund‑raising or other political event and the entire amount paid to a political committee as the purchase price for a fund‑raising meal or item, except that no contribution results if the actual cost of the meal or fund‑raising item, based on the amount charged to the committee by the vendor, constitutes the entire amount paid by the purchaser for the meal or item, the meal or item is for the purchaser's personal use and not for resale and the actual cost is the entire amount paid by the purchaser in connection with the event.  This exception does not apply to auction items.

(iv)  Unless specifically exempted, the provision of goods or services without charge or at a charge that is less than the usual and normal charge for such goods and services.

(b)  Does not include any of the following:

(i)  The value of services provided without compensation by any individual who volunteers on behalf of a candidate, a candidate's campaign committee or any other political committee.

(ii)  Money or the value of anything directly or indirectly provided to defray the expense of an elected official meeting with constituents if the elected official is engaged in the performance of the duties of his office or provided by the state or a political subdivision to an elected official for communication with constituents if the elected official is engaged in the performance of the duties of his office.

(iii)  The use of real or personal property, including a church or community room used on a regular basis by members of a community for noncommercial purposes, that is obtained by an individual in the course of volunteering personal services to any candidate, candidate's committee or political party, and the cost of invitations, food and beverages voluntarily provided by an individual to any candidate, candidate's campaign committee or political party in rendering voluntary personal services on the individual's residential premises or in the church or community room for candidate‑related or political party‑related activities, to the extent that the cumulative value of the invitations, food and beverages provided by the individual on behalf of any single candidate does not exceed one hundred dollars with respect to any single election.

(iv)  Any unreimbursed payment for personal travel expenses made by an individual who on his own behalf volunteers his personal services to a candidate.

(v)  The payment by a political party for party operating expenses, party staff and personnel, party newsletters and reports, voter registration and efforts to increase voter turnout, party organization building and maintenance and printing and postage expenses for slate cards, sample ballots, other written materials that substantially promote three or more nominees of the party for public office and other election activities not related to a specific candidate, except that this item does not apply to costs incurred with respect to a display of the listing of candidates made on telecommunications systems or in newspapers, magazines or similar types of general circulation advertising.

(vi)  Independent expenditures.

(vii)  Monies loaned by a state bank, a federally chartered depository institution or a depository institution the deposits or accounts of which are insured by the federal deposit insurance corporation or the national credit union administration, other than an overdraft made with respect to a checking or savings account, that is made in accordance with applicable law and in the ordinary course of business.  In order for this exemption to apply, this loan shall be deemed a loan by each endorser or guarantor, in that proportion of the unpaid balance that each endorser or guarantor bears to the total number of endorsers or guarantors, the loan shall be made on a basis that assures repayment, evidenced by a written instrument, shall be subject to a due date or amortization schedule and shall bear the usual and customary interest rate of the lending institution.

(viii)  A gift, subscription, loan, advance or deposit of money or anything of value to a national or a state committee of a political party specifically designated to defray any cost for the construction or purchase of an office facility not acquired for the purpose of influencing the election of a candidate in any particular election.

(ix)  Legal or accounting services rendered to or on behalf of a political committee or a candidate, if the only person paying for the services is the regular employer of the individual rendering the services and if the services are solely for the purpose of compliance with this title.

(x)  The payment by a political party of the costs of campaign materials, including pins, bumper stickers, handbills, brochures, posters, party tabloids and yard signs, used by the party in connection with volunteer activities on behalf of any nominee of the party or the payment by a state or local committee of a political party of the costs of voter registration and get‑out‑the‑vote activities conducted by the committee if the payments are not for the costs of campaign materials or activities used in connection with any telecommunication, newspaper, magazine, billboard, direct mail or similar type of general public communication or political advertising.

(xi)  Transfers between political committees to distribute monies raised through a joint fund‑raising effort in the same proportion to each committee's share of the fund‑raising expenses and payments from one political committee to another in reimbursement of a committee's proportionate share of its expenses in connection with a joint fund‑raising effort.

(xii)  An extension of credit for goods and services made in the ordinary course of the creditor's business if the terms are substantially similar to extensions of credit to nonpolitical debtors that are of similar risk and size of obligation and if the creditor makes a commercially reasonable attempt to collect the debt, except that any extension of credit under this item made for the purpose of influencing an election which remains unsatisfied by the candidate after six months, notwithstanding good faith collection efforts by the creditor, shall be deemed receipt of a contribution by the candidate but not a contribution by the creditor.

(xiii)  Interest or dividends earned by a political committee on any bank accounts, deposits or other investments of the political committee.

(xiv)  Five dollars qualifying contributions collected pursuant to section 16-946.

6.  "Earmarked" means a designation, instruction or encumbrance that results in all or any part of a contribution or expenditure being made to, or expended on behalf of, a clearly identified candidate or a candidate's campaign committee.

7.  "Election" means any election for any initiative, referendum or other measure or proposition or a primary, general, recall, special or runoff election for any office in this state other than the office of precinct committeeman and other than a federal office.  For purposes of sections 16‑903 and 16‑905, the general election includes the primary election.

8.  "Expenditures" includes any purchase, payment, distribution, loan, advance, deposit or gift of money or anything of value made by a person for the purpose of influencing an election in this state including supporting or opposing the recall of a public officer or supporting or opposing the circulation of a petition for a ballot measure, question or proposition or the recall of a public officer and a contract, promise or agreement to make an expenditure resulting in an extension of credit and the value of any in‑kind contribution received.  Expenditure does not include any of the following:

(a)  A news story, commentary or editorial distributed through the facilities of any telecommunications system, newspaper, magazine or other periodical publication, unless the facilities are owned or controlled by a political committee, political party or candidate.

(b)  Nonpartisan activity designed to encourage individuals to vote or to register to vote.

(c)  The payment by a political party of the costs of preparation, display, mailing or other distribution incurred by the party with respect to any printed slate card, sample ballot or other printed listing of three or more candidates for any public office for which an election is held, except that this subdivision does not apply to costs incurred by the party with respect to a display of any listing of candidates made on any telecommunications system or in newspapers, magazines or similar types of general public political advertising.

(d)  The payment by a political party of the costs of campaign materials, including pins, bumper stickers, handbills, brochures, posters, party tabloids and yard signs, used by the party in connection with volunteer activities on behalf of any nominee of the party or the payment by a state or local committee of a political party of the costs of voter registration and get‑out‑the‑vote activities conducted by the committee if the payments are not for the costs of campaign materials or activities used in connection with any telecommunications system, newspaper, magazine, billboard, direct mail or similar type of general public communication or political advertising.

(e)  Any deposit or other payment filed with the secretary of state or any other similar officer to pay any portion of the cost of printing an argument in a publicity pamphlet advocating or opposing a ballot measure.

9.  "Exploratory committee" means a political committee that is formed for the purpose of determining whether an individual will become a candidate and that receives contributions or makes expenditures of more than five hundred dollars in connection with that purpose.

10.  "Family contribution" means any contribution that is provided to a candidate's campaign committee by a parent, grandparent, spouse, child or sibling of the candidate or a parent or spouse of any of those persons.

11.  "Filing officer" means the office that is designated by section 16‑916 to conduct the duties prescribed by this chapter.

12.  "Identification" means:

(a)  For an individual, his name and mailing address, his occupation and the name of his employer.

(b)  For any other person, including a political committee, the full name and mailing address of the person.  For a political committee, identification includes the identification number issued on the filing of a statement of organization pursuant to section 16‑902.01.

13.  "Incomplete contribution" means any contribution received by a political committee for which the contributor's mailing address, occupation, employer or identification number has not been obtained and is not in the possession of the political committee.

14.  "Independent expenditure" means an expenditure by a person or political committee, other than a candidate's campaign committee, that expressly advocates the election or defeat of a clearly identified candidate, that is made without cooperation or consultation with any candidate or committee or agent of the candidate and that is not made in concert with or at the request or suggestion of a candidate, or any committee or agent of the candidate.  Independent expenditure includes an expenditure that is subject to the requirements of section 16‑917 which requires a copy of campaign literature or advertisement to be sent to a candidate named or otherwise referred to in the literature or advertisement.  An expenditure is not an independent expenditure if any of the following applies:

(a)  Any officer, member, employee or agent of the political committee making the expenditure is also an officer, member, employee or agent of the committee of the candidate whose election or whose opponent's defeat is being advocated by the expenditure or an agent of the candidate whose election or whose opponent's defeat is being advocated by the expenditure.

(b)  There is any arrangement, coordination or direction with respect to the expenditure between the candidate or the candidate's agent and the person making the expenditure, including any officer, director, employee or agent of that person.

(c)  In the same election the person making the expenditure, including any officer, director, employee or agent of that person, is or has been:

(i)  Authorized to raise or expend monies on behalf of the candidate or the candidate's authorized committees.

(ii)  Receiving any form of compensation or reimbursement from the candidate, the candidate's committees or the candidate's agent.

(d)  The expenditure is based on information about the candidate's plans, projects or needs, or those of his campaign committee, provided to the expending person by the candidate or by the candidate's agents or any officer, member or employee of the candidate's campaign committee with a view toward having the expenditure made.

15.  "In‑kind contribution" means a contribution of goods or services or anything of value and not a monetary contribution.

16.  "Itemized" means that each contribution received or expenditure made is set forth separately.

17.  "Literature or advertisement" means information or materials that are mailed, distributed or placed in some medium of communication for the purpose of influencing the outcome of an election.

18.  "Personal monies" means any of the following:

(a)  Assets to which the candidate has a legal right of access or control at the time he becomes a candidate and with respect to which the candidate has either legal title or an equitable interest.

(b)  Salary and other earned income from bona fide employment of the candidate, dividends and proceeds from the sale of the stocks or investments of the candidate, bequests to the candidate, income to the candidate from trusts established before candidacy, income to the candidate from trusts established by bequest after candidacy of which the candidate is a beneficiary, gifts to the candidate of a personal nature that have been customarily received before the candidacy and proceeds received by the candidate from lotteries and other legal games of chance.

(c)  The proceeds of loans obtained by the candidate that are not contributions and for which the collateral or security is covered by subdivision (a) or (b) of this paragraph.

(d)  Family contributions.

19.  "Political committee" means a candidate or any association or combination of persons that is organized, conducted or combined for the purpose of influencing the result of any election or to determine whether an individual will become a candidate for election in this state or in any county, city, town, district or precinct in this state, that engages in political activity in behalf of or against a candidate for election or retention or in support of or opposition to an initiative, referendum or recall or any other measure or proposition and that applies for a serial number and circulates petitions and, in the case of a candidate for public office except those exempt pursuant to section 16‑903, that receives contributions or makes expenditures in connection therewith, notwithstanding that the association or combination of persons may be part of a larger association, combination of persons or sponsoring organization not primarily organized, conducted or combined for the purpose of influencing the result of any election in this state or in any county, city, town or precinct in this state.  Political committee includes the following types of committees:

(a)  A candidate's campaign committee.

(b)  A separate, segregated fund established by a corporation or labor organization pursuant to section 16‑920, subsection A, paragraph 3.

(c)  A committee acting in support of or opposition to the qualification, passage or defeat of a ballot measure, question or proposition.

(d)  A committee organized to circulate or oppose a recall petition or to influence the result of a recall election.

(e)  A political party.

(f)  A committee organized for the purpose of making independent expenditures.

(g)  A committee organized in support of or opposition to one or more candidates.

(h)  A political organization.

(i)  An exploratory committee.

20.  "Political organization" means an organization that is formally affiliated with and recognized by a political party including a district committee organized pursuant to section 16‑823.

21.  "Political party" means the state committee as prescribed by section 16‑825 or the county committee as prescribed by section 16‑821 of an organization that meets the requirements for recognition as a political party pursuant to section 16‑801 or section 16‑804, subsection A.

22.  "Sponsoring organization" means any organization that establishes, administers or contributes financial support to the administration of, or that has common or overlapping membership or officers with, a political committee other than a candidate's campaign committee.

23.  "Standing political committee" means a political committee that is satisfies all of the following:

(a)  Is active in more than one reporting jurisdiction in this state for more than one year.

(b)  Files a statement of organization as prescribed by section 16‑902.01, subsection E.

(c)  Is any of the following as defined by paragraph 19 of this section:

(i)  A separate, segregated fund.

(ii)  A political party.

(iii)  A committee organized for the purpose of making independent expenditures.

(iv)  A political organization.

24.  "Statewide office" means the office of governor, secretary of state, state treasurer, attorney general, superintendent of public instruction, corporation commissioner or mine inspector.

25.  "Surplus monies" means those monies of a political committee remaining after all of the committee's expenditures have been made and its debts have been extinguished. END_STATUTE

Sec. 2.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-901.01, Arizona Revised Statutes, is amended to read:

START_STATUTE16-901.01.  Limitations on certain unreported expenditures and contributions

A.  For the purposes of this chapter, "expressly advocates" means:

1.  Conveying a communication containing a phrase such as "vote for," "elect," "re‑elect reelect," "support," "endorse," "cast your ballot for," "(name of candidate) in (year)," "(name of candidate) for (office)," "vote against," "defeat," "reject" or a campaign slogan or words that in context can have no reasonable meaning other than to advocate the election or defeat of one or more clearly identified candidates. , or

2.  Making a general public communication, such as in a broadcast medium, newspaper, magazine, billboard or direct mailer referring to one or more clearly identified candidates and targeted to the electorate of that candidate(s)

(A)  that in context can have no reasonable meaning other than to advocate the election or defeat of the candidate(s), as evidenced by factors such as the presentation of the candidate(s) in a favorable or unfavorable light, the targeting, placement or timing of the communication or the inclusion of statements of the candidate(s) or opponents. , or

(B)  In the sixteen‑week period immediately preceding a general election.

B.  A communication within the scope of subsection A, paragraph 2 shall not be considered as one that  "expressly advocates merely because it presents information about the voting record or position on a campaign issue of three or more candidates, so long as it is not made in coordination with a candidate, political party, agent of the candidate or party or a person who is coordinating with a candidate or candidate's agent.END_STATUTE

Sec. 3.  Section 16-905, Arizona Revised Statutes, is amended to read:

START_STATUTE16-905.  Contribution limitations; civil penalty; complaint

A.  For an election other than for a statewide office, a contributor shall not give and an exploratory committee, a candidate or a candidate's campaign committee shall not accept contributions of more than:

1.  For an election for a legislative office, four hundred eighty‑eight one thousand dollars from an individual.

2.  For an election other than for a legislative office, three five hundred ninety dollars from an individual.

3.  For an election for a legislative office, four hundred eighty‑eight one thousand dollars from a single political committee, excluding a political party, not certified under subsection G of this section to make contributions at the higher limits prescribed by paragraph 5 of this subsection and subsection B, paragraph 3 of this section.

4.  For an election other than for a legislative office, three five hundred ninety dollars from a single political committee, excluding a political party, not certified under subsection G of this section to make contributions at the higher limits prescribed by subsection B, paragraph 3 of this section.

5.  For an election other than for a legislative office, two thousand dollars from a single political committee, excluding a political party, certified pursuant to subsection G of this section.

6.  For an election for a legislative office, four thousand dollars from a single political committee, excluding a political party, certified pursuant to subsection G of this section.

B.  For an election for a statewide office, a contributor shall not give and an exploratory committee, a candidate or a candidate's committee shall not accept contributions of more than:

1.  One Two thousand ten dollars from an individual.

2.  One Two thousand ten dollars from a single political committee, excluding a political party, not certified under subsection G of this section to make contributions at the higher limits prescribed by subsection A, paragraph 5 of this section and paragraph 3 of this subsection.

3.  Five Eight thousand ten dollars from a single political committee, excluding political parties, certified pursuant to subsection G of this section.

C.  A candidate shall not accept contributions from all political committees, excluding political parties, combined totaling more than:

1.  For an election for a legislative office, sixteen twenty-five thousand one hundred fifty dollars.

2.  For an office other than a legislative office or a statewide office, ten eleven thousand twenty eighty dollars.

3.  For a statewide office, one hundred fifty thousand one hundred ten dollars.

D.  A nominee of a political party shall not accept contributions from all political parties or political organizations combined totaling more than ten twenty-five thousand twenty dollars for an election for an office other than a statewide office, and one hundred fifty thousand one hundred ten dollars for an election for a statewide office.

E.  An individual shall not may make unlimited contributions totaling more than five thousand six hundred ten dollars in a calendar year to state and local candidates and political committees contributing to state or local candidates.  Contributions to political parties and contributions to independent expenditure committees are exempt from the limitations of this subsection.

F.  A candidate's campaign committee or an individual's exploratory committee shall not make a loan and shall not transfer or contribute money to any other campaign or exploratory committee that is designated pursuant to this chapter or 2 United States Code section 431 except as follows:

1.  An exploratory committee may transfer monies to a subsequent candidate's campaign committee of the individual designating the exploratory committee, subject to the limits of subsection B of this section.

2.  A candidate's campaign committee may transfer or contribute monies to another campaign committee designated by the same candidate as follows:

(a)  Subject to the contribution limits of this section, transfer or contribute monies from one committee to another if both committees have been designated for an election in the same year.

(b)  Without application of the contribution limits of this section, transfer or contribute monies from one committee to another designated for an election in a subsequent year.

G.  Only political committees that received monies from five hundred or more individuals in amounts of ten dollars or more in the one year period immediately before application to the secretary of state for qualification as a political committee pursuant to this section may make contributions to candidates under subsection A, paragraph 5 of this section and subsection B, paragraph 3 of this section.  The secretary of state shall obtain information necessary to make the determination that a committee meets the requirements of this subsection and shall provide written certification of the fact to the committee.  A political committee certification is valid for two years.  A candidate's campaign committee shall not accept a contribution pursuant to this subsection unless it is accompanied by a copy of the certification.  All political committees that do not meet the requirements of this subsection are subject to the individual campaign contribution limits of subsection A, paragraphs 1 and 2 of this section and subsection B, paragraph 1 of this section.

H.  The secretary of state biennially shall adjust to the nearest ten dollars the amounts in subsections A through E of this section by the percentage change in the consumer price index and publish the new amounts for distribution to election officials, candidates and campaign committees.  For the purposes of this subsection, "consumer price index" means the consumer price index for all urban consumers, United States city average, that is published by the United States department of labor, bureau of labor statistics.

I.  The following specific limitations and procedures apply:

1.  The limits of subsections A through E of this section apply to each election for any office or offices which that the candidate seeks.

2.  The limits of subsections A, B and C of this section apply to the total contributions from all separate segregated funds established, as provided in section 16‑920, by a corporation, labor organization, trade association, cooperative or corporation without capital stock.

3.  A contribution by an unemancipated minor child shall be treated as a contribution by the child's custodial parent or parents for determining compliance with subsection A, paragraphs 1 and 2, subsection B, paragraph 1 and subsection E of this section.

4.  A contribution by an individual or a single political committee to two or more candidates in connection with a joint fund‑raising effort shall be divided among the candidates in direct proportion to each candidate campaign committee's share of the expenses for the fund‑raising effort.

5.  A candidate shall sign and file with the candidate's nomination paper a statement that the candidate has read all applicable laws relating to campaign financing and reporting.

6.  An individual or political committee shall not use economic influence to induce members of an organization to make contributions to a candidate, collect contributions from members of an organization for transmittal to a candidate, make payments to candidates for public appearances or services which that are ordinarily uncompensated or use any similar device to circumvent any of the limitations of this section.

J.  A person who violates this section is subject to a civil penalty imposed as prescribed in section 16‑924 of three times the amount of money that has been received, expended or promised in violation of this section or three times the value in money for an equivalent of money or other things of value that have been received, expended or promised in violation of this section.

K.  Any qualified elector may file a sworn complaint with the attorney general or the county attorney of the county in which a violation of this section is believed to have occurred, and the attorney general or the county attorney shall investigate the complaint for possible action.

L.  If the filing officer, attorney general or county attorney fails to institute an action within forty‑five working days after receiving a complaint under subsection K of this section, the individual filing the complaint may bring a civil action in the individual's own name and at the individual's own expense, with the same effect as if brought by the filing officer, attorney general or county attorney.  The individual shall execute a bond payable to the defendant if the individual fails to prosecute the action successfully.  The court shall award to the prevailing party costs and reasonable attorney fees.

M.  If a provision of this section or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the section which that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.

N.  The use of a candidate's personal monies, or the use of personal monies by an individual who designates an exploratory committee, is not subject to the limitations of this section.END_STATUTE

Sec. 4.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-941, Arizona Revised Statutes, is amended to read:

START_STATUTE16-941.  Limits on spending and contributions for political campaigns

A.  Notwithstanding any law to the contrary, a participating candidate:

1.  Shall not accept any contributions, other than a limited number of five‑dollar qualifying contributions as specified in section 16‑946 and early small donor contributions as specified in section 16‑945, except in the emergency situation specified in section 16‑954, subsection D.

2.  Shall not make expenditures of more than a total of five hundred dollars of the candidate's personal monies for a candidate for the legislature or more than one thousand dollars for a candidate for statewide office.

3.  Shall not make expenditures in the primary election period in excess of the adjusted primary election spending limit.

4.  Shall not make expenditures in the general election period in excess of the adjusted general election spending limit.

5.  Shall comply with section 16‑948 regarding campaign accounts and section 16‑953 regarding returning unused monies to the citizens clean elections fund described in this article.

B.  Notwithstanding any law to the contrary, a nonparticipating candidate:

1.  Shall not accept contributions in excess of an amount that is twenty per cent less than the limits specified in section 16‑905, subsections A through E, as adjusted by the secretary of state pursuant to section 16‑905, subsection H.  Any violation of this paragraph shall be subject to the civil penalties and procedures set forth in section 16‑905, subsections J through M and section 16‑924.

2.  Shall comply with section 16‑958 regarding reporting, including filing reports with the secretary of state indicating whenever (a) expenditures other than independent expenditures on behalf of the candidate, from the beginning of the election cycle to any date up to primary election day, exceed seventy per cent of the original primary election spending limit applicable to a participating candidate seeking the same office, or (b) contributions to a candidate, from the beginning of the election cycle to any date during the general election period, less expenditures made from the beginning of the election cycle through primary election day, exceed seventy per cent of the original general election spending limit applicable to a participating candidate seeking the same office.  A nonparticipating candidate is exempt from this paragraph if there is no participating candidate running against that nonparticipating candidate.

C.  Notwithstanding any law to the contrary, a candidate, whether participating or nonparticipating:

1.  If specified in a written agreement signed by the candidate and one or more opposing candidates and filed with the citizens clean elections commission, shall not make any expenditure in the primary or general election period exceeding an agreed‑upon amount lower than spending limits otherwise applicable by statute.

2.  Shall continue to be bound by all other applicable election and campaign finance statutes and rules, with the exception of those provisions in express or clear conflict with this article.

D.  Notwithstanding any law to the contrary, any person who makes independent expenditures related to a particular office cumulatively exceeding five hundred dollars in an election cycle, with the exception of any expenditure listed in section 16‑920 and any independent expenditure by an organization arising from a communication directly to the organization's members, shareholders, employees, affiliated persons and subscribers, shall file reports with the secretary of state in accordance with section 16‑958 so indicating, identifying the office and the candidate or group of candidates whose election or defeat is being advocated and stating whether the person is advocating election or advocating defeat. END_STATUTE

Sec. 5.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-945, Arizona Revised Statutes, is amended to read:

START_STATUTE16-945.  Small donor contributions

A.  A participating candidate may accept early small donor contributions only from individuals and only during the exploratory period and the qualifying period, subject to the following limitations:

1.  Notwithstanding any law to the contrary, no contributor shall give, and no participating candidate shall accept, contributions from a contributor exceeding one hundred dollars during an election cycle.

2.  Notwithstanding any law to the contrary, early contributions to a participating candidate from all sources for an election cycle shall not exceed, for a candidate for governor, forty thousand dollars or, for other candidates, ten percent of the sum of the original primary election spending limit and the original general election spending limit.

3.  2.  Qualifying contributions specified in section 16‑946 shall not be included in determining whether the limits in this subsection have been exceeded.

B.  Early contributions specified in subsection A of this section and the candidate's personal monies specified in section 16‑941, subsection A, paragraph 2 may be spent only during the exploratory period and the qualifying period.  Any early contributions not spent by the end of the qualifying period shall be paid to the fund.

C.  B.  If a participating candidate has a debt from an election campaign in this state during a previous election cycle in which the candidate was not a participating candidate, then, during the exploratory period only, the candidate may accept, in addition to early small donor contributions specified in subsection A of this section, contributions subject to the limitations in section 16‑941, subsection B, paragraph 1, or may exceed the limit on personal monies in section 16‑941, subsection A, paragraph 2, provided that such contributions and monies are used solely to retire such debt.END_STATUTE

Sec. 6.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-946, Arizona Revised Statutes, is amended to read:

START_STATUTE16-946.  Qualifying contributions

A.  During the qualifying period, a participating candidate may collect qualifying contributions, which shall be paid to the fund.

B.  To qualify as a  "qualifying contribution, a contribution must be:

1.  Made by a qualified elector as defined in section 16‑121, who at the time of the contribution is registered in the electoral district of the office the candidate is seeking and who has not given another qualifying contribution to that candidate during that election cycle.

2.  Made by a person who is not given anything of value in exchange for the qualifying contribution.

3.  In the sum of five dollars, exactly.

4.  Received unsolicited during the qualifying period or solicited during the qualifying period by a person who is not employed or retained by the candidate and who is not compensated to collect contributions by the candidate or on behalf of the candidate.

5.  If made by check or money order, made payable to the candidate's campaign committee, or if in cash, deposited in the candidate's campaign committee's account. ; and

6.  Accompanied by a three‑part reporting slip that includes the printed name, registration address and signature of the contributor, the name of the candidate for whom the contribution is made, the date and the printed name and signature of the solicitor.  An electronic signature as defined in section 41-351 is deemed to comply with this paragraph.

C.  A copy of the reporting slip shall be given as a receipt to the contributor, and another copy shall be retained by the candidate's campaign committee.  Delivery of an original reporting slip to the secretary of state shall excuse the candidate from disclosure of these contributions on campaign finance reports filed under article 1 of this chapter.END_STATUTE

Sec. 7.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-947, Arizona Revised Statutes, is amended to read:

START_STATUTE16-947.  Certification as a participating candidate

A.  A candidate who wishes to be certified as a participating candidate shall file, before the end of the qualifying period, file an application with the secretary of state, in a form specified by the citizens clean elections commission.

B.  The application shall identify the candidate, the office that the candidate plans to seek and the candidate's party, if any, and shall contain the candidate's signature, under oath, certifying that:

1.  The candidate has complied with the restrictions of section 16‑941, subsection A during the election cycle to date.

2.  The candidate's campaign committee and exploratory committee have filed all campaign finance reports required under article 1 of this chapter during the election cycle to date and that they are complete and accurate.

3.  The candidate will comply with the requirements of section 16‑941, subsection A during the remainder of the election cycle and, specifically, will not accept private contributions.

C.  The commission shall act on the application within one week. Unless, within that time, the commission denies an application and provides written reasons that all or part of a certification in subsection B of this section is incomplete or untrue, the candidate shall be certified as a participating candidate.  If the commission denies an application for failure to file all complete and accurate campaign finance reports or failure to make the certification in subsection B, paragraph 3 of this section, the candidate may reapply within two weeks of the commission's decision by filing complete and accurate campaign finance reports and another sworn certification.

D.  A candidate shall be denied certification if that candidate was removed from office by the commission or if the candidate is delinquent in payment of a debt to the commission.  If the debt is paid in full or if the candidate is current on a payment agreement with any state agency, the candidate may apply for certification as a participating candidate and is eligible to be certified.END_STATUTE

Sec. 8.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-949, Arizona Revised Statutes, is amended to read:

START_STATUTE16-949.  Caps on spending from citizens clean elections fund

A.  The commission shall not spend, on all costs incurred under this article during a particular calendar year, more than five dollars times the number of Arizona resident personal income tax returns filed during the previous calendar year.  Tax reductions and tax credits awarded to taxpayers pursuant to section 16‑954, subsections A and B shall not be considered costs incurred under this article for purposes of this section.  The commission may exceed this limit during a calendar year, provided that it is offset by an equal reduction of the limit during another calendar year during the same four‑year period beginning January 1 immediately after a gubernatorial election.

B.  The commission may use up to ten percent per cent of the amount specified in subsection A of this section for reasonable and necessary expenses of administration and enforcement, including the activities specified in section 16‑956, subsection A, paragraphs 3 through 7 and subsections B and C.  Any portion of the ten percent per cent not used for this purpose shall remain in the fund.

C.  The commission shall apply ten percent per cent of the amount specified in subsection A of this section for reasonable and necessary expenses associated with voter education, including the activities specified in section 16‑956, subsection A.

D.  The state treasurer shall administer a citizens clean election elections fund from which costs incurred under this article shall be paid.  In each odd-numbered year, the treasurer shall transfer the sum of eight hundred fifty-five thousand dollars for deposit by the secretary of state into and among the officeholder expense accounts of each member of the legislature established pursuant to section 41-133.  The auditor general shall review the monies in, payments into and expenditures from the citizens clean elections fund no less often than every four years. END_STATUTE

Sec. 9.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-950, Arizona Revised Statutes, is amended to read:

START_STATUTE16-950.  Qualification for clean elections funding

A.  A candidate who has made an application for certification may also apply, in accordance with subsection B of this section, to receive funds from the citizens clean elections fund, instead of receiving private contributions.

B.  To receive any clean campaign elections funding, the candidate must present to the secretary of state no later than one week after the end of the qualifying period a list of names of persons who have made qualifying contributions pursuant to section 16‑946 on behalf of the candidate.  The list shall be divided by county.  At the same time, the candidate must tender to the secretary of state the original reporting slips identified in section 16‑946, subsection C for persons on the list and an amount equal to the sum of the qualifying contributions collected.  The secretary of state shall deposit the amount into the fund.

C.  The secretary of state shall select at random a sample of five per cent of the number of non‑duplicative nonduplicative names on the list for a candidate for a statewide office and twenty per cent of the number of nonduplicative names on the list for a candidate for legislative office and shall forward facsimiles of the selected reporting slips to the county recorders for the counties of the addresses specified in the selected slips. Within ten days, the county recorders shall provide a report to the secretary of state identifying as disqualified any slips that are unsigned or undated or that the recorder is unable to verify as matching a person who is registered to vote in the electoral district of the office the candidate is seeking on the date specified on the slip.  The secretary of state shall multiply the number of slips not disqualified by twenty, and if the result is greater than one hundred ten per cent of the quantity required, shall approve the candidate for funds, and if the result is less than one hundred ten per cent of the quantity required, the secretary of state shall forward facsimiles of all of the slips to the county recorders for verification, and the county recorders shall check all slips in accordance with the process above.  A county recorder shall not check slips already verified.  A county recorder shall report verified totals daily to the secretary of state until a determination is made that a sufficient number of verified slips has been submitted.  If a sufficient number of verified slips has been submitted to one or more county recorders, the county recorders may stop the verification process.

D.  To qualify for clean campaign elections funding, a candidate must have been approved as a participating candidate pursuant to section 16‑947 and have obtained the following number of qualifying contributions:

1.  For a candidate for legislature, two hundred.

2.  For candidate for mine inspector, five hundred.

3.  For a candidate for treasurer, superintendent of public instruction or corporation commission, one thousand five hundred.

4.  For a candidate for secretary of state or attorney general, two thousand five hundred.

5.  For a candidate for governor, four thousand.

E.  To qualify for clean campaign elections funding, a candidate must have met the requirements of this section and either be an independent candidate or meet the following standards:

1.  To qualify for funding for a party primary election, a candidate must have properly filed nominating papers and nominating petitions with signatures pursuant to chapter 3, articles 2 and 3 of this title in the primary of a political organization entitled to continued representation on the official ballot in accordance with section 16‑804.

2.  To qualify for clean campaign elections funding for a general election, a candidate must be a party nominee of such a political organization.END_STATUTE

Sec. 10.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-951, Arizona Revised Statutes, is amended to read:

START_STATUTE16-951.  Clean campaign funding

A.  At the beginning of the primary election period, the commission shall pay from the fund to the campaign account of each candidate who qualifies for clean campaign elections funding:

1.  For a candidate who qualifies for clean campaign funding for a party primary election, an amount equal to the original primary election spending limit.

2.  For an independent candidate who qualifies for clean campaign funding, an amount equal to seventy percent of the sum of the original primary election spending limit and the original general election spending limit. ; or

3.  For a qualified participating candidate who is unopposed for an office in that candidate's primary, in the primary of any other party and by any opposing independent candidate, an amount equal to five dollars times the number of qualifying contributions for that candidate certified by the commission.

B.  At any time after the first day of January of an election year, any candidate who has met the requirements of section 16‑950 may sign and cause to be filed a nomination paper in the form specified by section 16‑311, subsection A, with a nominating petition and signatures, instead of filing such papers after the earliest time set for filing specified by that subsection.  Upon such filing and verification of the signatures, the commission shall pay the amount specified in subsection A of this section immediately, rather than waiting for the beginning of the primary election period.

C.  At the beginning of the general election period, the commission shall pay from the fund to the campaign account of each candidate who qualifies for clean campaign elections funding for the general election, except those candidates identified in subsection A, paragraphs paragraph 2 or 3 or subsection D of this section, an amount equal to the original general election spending limit.

D.  At the beginning of the general election period, the commission shall pay from the fund to the campaign account of a qualified participating candidate who has not received funds pursuant to subsection A, paragraph 3 of this section and who is unopposed by any other party nominee or any opposing independent candidate an amount equal to five dollars times the number of qualifying contributions for that candidate certified by the commission.

E.  The special original general election spending limit, for a candidate who has received funds pursuant to subsection A, paragraphs 2 or 3 or subsection D of this section, shall be equal to the amount that the commission is obligated to pay to that candidate.

F.  On applying for clean elections funding pursuant to section 16-950, a participating candidate for the legislature in a one-party-dominant legislative district who is qualified for clean elections funding for the party primary election of the dominant party may choose to reallocate a portion of funds from the general election period to the primary election period.  At the beginning of the primary election period, the commission shall pay from the fund to the campaign account of a participating candidate who makes this choice an extra amount equal to fifty per cent of the original primary election spending limit, and the original primary election spending limit for the candidate who makes this choice shall be increased by the extra amount and the following apply:

1.  For a primary election in which one or more participating candidates have made this choice, funds shall be paid under subsections A and B of this section only to the extent of any excess over the original primary election spending limit as so increased.  If a participating candidate who makes this choice becomes qualified for clean elections funding for the general election, the amount the candidate receives at the beginning of the general election period shall be reduced by the extra amount received at the beginning of the primary election period, and the original general election spending limit for that candidate shall be reduced by the extra amount.

2.  For a general election in which a participating candidate has made this choice, funds shall be paid under subsections A and B of this section only to the extent of any excess over the original general election spending limit, without such reduction, unless the candidate who has made this choice is the only participating candidate in the general election, in which case such funds shall be paid to the extent of excess over the original general election spending limit with such reduction.

3.  For the purpose of this subsection, a one-party-dominant legislative district is a district in which the number of registered voters registered in the party with the highest number of registered voters exceeds the number of registered voters registered to each of the other parties by an amount at least as high as ten per cent of the total number of voters registered in the district.  The status of a district as a one-party-dominant legislative district shall be determined as of the beginning of the qualifying period. END_STATUTE

Sec. 11.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-952, Arizona Revised Statutes, is amended to read:

START_STATUTE16-952.  Small donor supplemental funding of candidates

A.  Whenever during a primary election period a report is filed, or other information comes to the attention of the commission, pursuant to section 16-958, subsection C indicating that a nonparticipating candidate who is not unopposed in that primary who has qualified for funding has made expenditures during the election cycle to date exceeding the original primary election spending limit, including any previous adjustments received small donor contributions pursuant to section 16-945, the commission shall immediately pay from the fund to the campaign account of any that participating candidate three times the amount of contributions reported that have not yet been matched.  in the same party primary as the nonparticipating candidate an amount equal to any excess of the reported amount over the primary election spending limit as previously adjusted, less six per cent for a nonparticipating candidate's fund-raising expenses and less the amount of early contributions raised for that participating candidate for that office as prescribed by section 16‑945.  The primary election spending limit for all such participating candidates shall be adjusted by increasing it by the amount that the commission is obligated to pay to that participating candidate and by any additional permissible contributions received after supplemental fund has reached the maximum permitted for that primary election campaign.

B.  Whenever during a general election period a report has been filed, or other information comes to the attention of the commission, indicating that the amount a nonparticipating participating candidate who is not unopposed has received in contributions during the general election cycle to date less the amount of expenditures the nonparticipating candidate made through the end of the primary election period exceeds the original general election spending limit, including any previous adjustments, the commission shall immediately pay from the fund to the campaign account of any participating that candidate three times the amount of general election contributions that have not yet been matched.  qualified for the ballot and seeking the same office as the nonparticipating candidate an amount equal to any excess of the reported difference over the general election spending limit, as previously adjusted, less six per cent for a nonparticipating candidate's fund-raising expenses.  The general election spending limit for all such participating candidates shall be adjusted by increasing it by the amount that the commission is obligated to pay to that participating candidate and any additional permissible contributions received after supplemental funding has reached the maximum permitted for that general election campaign.

C.  For the purposes of subsections A and B of this section, the following expenditures reported pursuant to this article shall be treated as follows:

1.  Independent expenditures against a participating candidate shall be treated as expenditures of each opposing candidate, for the purpose of subsection A of this section, or contributions to each opposing candidate, for the purpose of subsection B of this section.

2.  Independent expenditures in favor of one or more nonparticipating opponents of a participating candidate shall be treated as expenditures of those nonparticipating candidates, for the purpose of subsection A of this section, or contributions to those nonparticipating candidates, for the purpose of subsection B of this section.

3.  Independent expenditures in favor of a participating candidate shall be treated, for every opposing participating candidate, as though the independent expenditures were an expenditure of a nonparticipating opponent, for the purpose of subsection A of this section, or a contribution to a nonparticipating opponent, for the purpose of subsection B of this section.

4.  Expenditures made during the primary election period by or on behalf of an independent candidate or a nonparticipating candidate who is unopposed in a party primary shall be deducted from the total amount of monies raised for purposes of determining the amount of equalizing funds, up to the amount of primary funds received by the participating candidate.  Equalizing funds pursuant to subsection B of this section shall then be calculated and paid at the start of the general election period.

5.  Expenditures made before the general election period that consist of a contract, promise or agreement to make an expenditure during the general election period resulting in an extension of credit shall be treated as though made during the general election period, and equalizing funds pursuant to subsection B of this section shall be paid at the start of the general election period.

6.  Expenditures for or against a participating candidate promoting or opposing more than one candidate who is not running for the same office shall be allocated by the commission among candidates for different offices based on the relative size or length and relative prominence of the reference to candidates for different offices.

D.  Upon applying for citizen funding pursuant to section 16‑950, a participating candidate for the legislature in a one‑party‑dominant legislative district who is qualified for clean campaign funding for the party primary election of the dominant party may choose to reallocate a portion of funds from the general election period to the primary election period.  At the beginning of the primary election period, the commission shall pay from the fund to the campaign account of a participating candidate who makes this choice an extra amount equal to fifty per cent of the original primary election spending limit, and the original primary election spending limit for the candidate who makes this choice shall be increased by the extra amount.  For a primary election in which one or more participating candidates have made this choice, funds shall be paid under subsections A and B of this section only to the extent of any excess over the original primary election spending limit as so increased.  If a participating candidate who makes this choice becomes qualified for clean campaign funding for the general election, the amount the candidate receives at the beginning of the general election period shall be reduced by the extra amount received at the beginning of the primary election period, and the original general election spending limit for that candidate shall be reduced by the extra amount.  For a general election in which a participating candidate has made this choice, funds shall be paid under subsections A and B of this section only to the extent of any excess over the original general election spending limit, without such reduction, unless the candidate who has made this choice is the only participating candidate in the general election, in which case such funds shall be paid to the extent of excess over the original general election spending limit with such reduction.  For the purpose of this subsection, a one‑party‑dominant legislative district is a district in which the number of registered voters registered in the party with the highest number of registered voters exceeds the number of registered voters registered to each of the other parties by an amount at least as high as ten per cent of the total number of voters registered in the district.  The status of a district as a one‑party‑dominant legislative district shall be determined as of the beginning of the qualifying period.

E.  C.  If an adjusted spending limit reaches three times the original spending limit for a particular election, the commission shall not pay any further amounts from the fund to the campaign account of any participating candidate, and the spending limit shall not be adjusted further but the candidate may continue to solicit and accept small donor contributions pursuant to section 16-945.END_STATUTE

Sec. 12.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-953, Arizona Revised Statutes, is amended to read:

START_STATUTE16-953.  Return of monies to the citizens clean elections fund

A.  At the end of the primary election period, a participating candidate who has received monies pursuant to section 16‑951, subsection A, paragraph 1 shall return to the fund all monies in the candidate's campaign account above an amount sufficient to pay any unpaid bills for expenditures made during the primary election period and for goods or services directed to the primary election.  The candidate may retain any monies that were not subject to small donor supplemental funding pursuant to section 16-952, subsection A, because they were in excess of three times the initial allotment of monies and therefore capped pursuant to section 16-952, subsection C.  Such retained monies shall be reported to the commission within three days of the end of the primary election period.  Retained monies that have been reported to the commission may be spent during the general election period but shall not be supplemented pursuant to section 16-952.

B.  At the end of the general election period, a participating candidate shall return to the fund all monies in the candidate's campaign account above an amount sufficient to pay any unpaid bills for expenditures made before the general election and for goods or services directed to the general election.

C.  A participating candidate shall pay all uncontested and unpaid bills referenced in this section no later than thirty days after the primary or general election.  A participating candidate shall make monthly reports to the commission concerning the status of the dispute over any contested bills. Any monies in a candidate's campaign account after payment of bills shall be returned promptly to the fund.

D.  If a participating candidate is replaced pursuant to section 16‑343, and the replacement candidate files an oath with the secretary of state certifying to section 16‑947, subsection B, paragraph 3, the campaign account of the participating candidate shall be transferred to the replacement candidate and the commission shall certify the replacement candidate as a participating candidate without requiring compliance with section 16‑950 or the remainder of section 16‑947.  If the replacement candidate does not file such an oath, the campaign account shall be liquidated and all remaining monies returned to the fund.

E.  If a participating candidate who has received monies pursuant to section 16‑951, subsection A, paragraph 1 does not qualify for the ballot for the primary election, the participating candidate shall:

1.  Return to the fund all monies in the candidate's campaign account above the amount sufficient to pay any unpaid bills for expenditures made before the date the candidate failed to qualify for the primary ballot.

2.  Return to the commission, within fourteen days, all remaining assets purchased with public funds in that election cycle, including all political signs. The disqualified participating candidate is not required to return political signs purchased in a previous election cycle.

3.  Repay any monies paid to a family member unless the participating candidate demonstrates that the payment made was for goods or services actually provided before disqualification of the candidate and the payment was for fair market value.  For the purposes of this paragraph, "family member" means a parent, grandparent, spouse, child or sibling of the candidate or a parent or spouse of any of those persons. END_STATUTE

Sec. 13.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-954, Arizona Revised Statutes, is amended to read:

START_STATUTE16-954.  Return of excess monies

A.  For tax years beginning on or after January 1, 1998, a taxpayer who files on a state income tax return form may designate a five‑dollar voluntary contribution per taxpayer to the fund by marking an optional check‑off box on the first page of the form.  A taxpayer who checks this box shall receive a five‑dollar reduction in the amount of tax, and five dollars from the amount of taxes paid shall be transferred by the department of revenue to the fund. The department of revenue shall provide check‑off boxes, identified as the clean elections fund tax reduction, on the first page of income tax return forms, for designations pursuant to this subsection.

B.  Any taxpayer may make a voluntary donation to the fund by designating the fund on an income tax return form filed by the individual or business entity or by making a payment directly to the fund.  Any taxpayer making a donation pursuant to this subsection shall receive a dollar‑for‑dollar tax credit not to exceed twenty percent of the tax amount on the return or five hundred dollars per taxpayer, whichever is higher. Donations made pursuant to this section are otherwise not tax deductible and cannot be designated as for the benefit of a particular candidate, political party, or election contest.  The department of revenue shall transfer to the fund all donations made pursuant to this subsection.  The department of revenue shall provide a space, identified as the clean elections fund tax credit, on the first page of income tax return forms, for donations pursuant to this subsection.

C.  A.  Beginning January 1, 1999, an additional surcharge of ten percent per cent shall be imposed on all civil and criminal fines and penalties collected pursuant to section 12‑116.01 and shall be deposited into the fund.

D.  B.  At least once per year, the commission shall project the amount of monies that the fund will collect over the next four years and the time such monies shall become available.  Whenever the commission determines that the fund contains more monies than the commission determines that it requires to meet current debts plus expected expenses, under the assumption that expected expenses will be at the expenditure limit in section 16‑949, subsection A, and taking into account the projections of collections, the commission shall designate such monies as excess monies and so notify the state treasurer, who shall thereupon return the excess monies to the general fund.

E.  C.  At least once per year, the commission shall project the amount of citizen funding for which all candidates will have qualified pursuant to this article for the following calendar year.  By the end of each year, the commission shall announce whether the amount that the commission plans to spend the following year pursuant to section 16‑949, subsection A exceeds the projected amount of citizen funding.  If the commission determines that the fund contains insufficient monies or the spending cap would be exceeded were all candidate's candidates' accounts to be fully funded, then the commission may include in the announcement specifications for decreases in the following parameters, based on the commission's projections of collections and expenses for the fund, made in the following order:

1.  First, The commission may announce a decrease in the matching cap under section 16‑952, subsection C from three times to an amount between three and one times.

2.  Next, The commission may announce that the fund will provide equalization monies under section 16‑952, subsections A and B as a fraction of the amounts there specified.

3.  Finally, The commission may announce that the fund will provide monies under section 16‑951 as a fraction of the amounts there specified.

F.  D.  If the commission cannot provide participating candidates with all monies specified under sections 16‑951 and 16‑952, as decreased by any announcement pursuant to subsection C of this section, then the commission shall allocate any reductions in payments proportionately among candidates entitled to monies and shall declare an emergency.  Upon declaration of an emergency, a participating candidate may accept private contributions to bring the total monies received by the candidate from the fund and from such private contributions up to the adjusted spending limits, as decreased by any announcement made pursuant to subsection C of this section.END_STATUTE

Sec. 14.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-956, Arizona Revised Statutes, is amended to read:

START_STATUTE16-956.  Voter education and enforcement duties

A.  The commission shall:

1.  Develop a procedure for publishing a document or section of a document having a space of predefined size for a message chosen by each candidate.  For the document that is mailed delivered before the primary election, the document shall contain the names of every candidate for every statewide and legislative district office in that primary election without regard to whether the candidate is a participating candidate or a nonparticipating candidate.  For the document that is mailed delivered before the general election, the document shall contain the names of every candidate for every statewide and legislative district office in that general election without regard to whether the candidate is a participating candidate or a nonparticipating candidate.  The commission shall mail deliver one copy of each document to every household that contains a registered voter.  For the document that is mailed delivered before the primary election, the mailing delivery may be made over a period of days but shall be mailed sent in order time to be delivered to households before the earliest date for receipt by registered voters of any requested early ballots for the primary election.  The commission may mail deliver the second document over a period of days but shall mail deliver the second document in order time to be delivered to households before the earliest date for receipt by registered voters of any requested early ballots for the general election.  The primary election and general election documents published by the commission shall comply with all of the following:

(a)  For any candidate who does not submit a message pursuant to this paragraph, the document shall include with the candidate's listing the words "no statement submitted".

(b)  The document shall have printed on its cover the words "citizens clean elections commission voter education guide" and the words "primary election" or "general election" and the applicable year.  The document shall also contain at or near the bottom of the document cover in type that is no larger than one‑half the size of the type used for "citizens clean elections commission voter education guide" the words "paid for by the citizens clean elections fund".

(c)  In order to prevent voter confusion, the document shall be easily distinguishable from the publicity pamphlet that is required to be produced by the secretary of state pursuant to section 19‑123.

2.  Sponsor debates among candidates, in such manner as determined by the commission.  The commission shall require participating candidates to attend and participate in debates and may specify by rule penalties for nonparticipation.  The commission shall invite and permit nonparticipating candidates to participate in debates.

3.  Prescribe forms for reports, statements, notices and other documents required by this article.  The commission shall not require a candidate to use a reporting system other than the reporting system jointly approved by the commission and the office of the secretary of state.

4.  Prepare and publish instructions setting forth methods of bookkeeping and preservation of records to facilitate compliance with this article and explaining the duties of persons and committees under this article.

5.  Produce a yearly report describing the commission's activities and any recommendations for changes of law, administration or funding amounts and accounting for monies in the fund.

6.  Adopt rules to implement the reporting requirements of section 16‑958, subsections D and E.

7.  Enforce this article, ensure that money from the fund is placed in candidate campaign accounts or otherwise spent as specified in this article and not otherwise, monitor reports filed pursuant to this chapter and financial records of candidates as needed to ensure that equalization monies are paid promptly to opposing qualified candidates under section 16‑952 and ensure that money required by this article to be paid to the fund is deposited in the fund.  The commission shall not take action on any external complaint that is filed more than ninety days after the postelection report is filed or ninety days after the completion of the canvass of the election to which the complaint relates, whichever is later.

B.  The commission may subpoena witnesses, compel their attendance and testimony, administer oaths and affirmations, take evidence and require by subpoena the production of any books, papers, records or other items material to the performance of the commission's duties or the exercise of its powers.

C.  The commission may adopt rules to carry out the purposes of this article and to govern procedures of the commission.  Commission rule making is exempt from title 41, chapter 6, article 3.  The commission shall propose and adopt rules in public meetings, with at least sixty days allowed for interested parties to comment after the rules are proposed.  The commission shall also file a notice of exempt rule making and the proposed rule in the format prescribed in section 41‑1022 with the secretary of state's office for publication in the Arizona administrative register.  After consideration of the comments received in the sixty day comment period, the commission may adopt the rule in an open meeting.  Any rules given final approval in an open meeting shall be filed in the format prescribed in section 41‑1022 with the secretary of state's office for publication in the Arizona administrative register.  Any rules adopted by the commission shall only be applied prospectively from the date the rule was adopted.

D.  Beginning January 1, 2010, rules adopted by the commission are not effective until January 1 in the year following the adoption of the rule, except that rules adopted by unanimous vote of the commission may be made immediately effective and enforceable.

E.  If, in the view of the commission, the action of a particular candidate or committee requires immediate change to a commission rule, a unanimous vote of the commission is required.  Any rule change made pursuant to this subsection that is enacted with less than a unanimous vote takes effect for the next election cycle.

F.  Based on the results of the elections in the year 2002 or any quadrennial election thereafter, and within six months after such election, the commission may adopt rules changing the number of qualifying contributions required for any office from those listed in section 16‑950, subsection D, by no more than twenty per cent of the number applicable for the preceding election. END_STATUTE

Sec. 15.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-958, Arizona Revised Statutes, is amended to read:

START_STATUTE16-958.  Manner of filing reports

A.  Any person who has previously reached the dollar amount specified in section 16‑941, subsection D for filing an original report shall file a supplemental report each time previously unreported independent expenditures specified by that subsection exceeds one thousand dollars.  Any person who has previously reached the dollar amounts specified in section 16‑941, subsection B, paragraph 2 for filing an original report shall file a supplemental report to declare that previously unreported expenditures or contributions specified by that paragraph exceed ten per cent of the original primary election spending limit or twenty‑five thousand dollars, whichever is lower, before the general election period, or  ten per cent of the original general election spending limit or twenty‑five thousand dollars, whichever is lower, during the general election period.  Such reports shall be filed at the times specified in subsection B of this section and shall identify the dollar amount being reported, the candidate and the date, and no other detail is required in reports made pursuant to this section.

B.  Any person who must file an original report pursuant to section 16‑941, subsection B, paragraph 2 or subsection D or who must file a supplemental report for previously unreported amounts pursuant to subsection A of this section shall file as follows:

1.  Before the beginning of the primary election period, the person shall file a report on the first of each month, unless the person has not reached the dollar amount for filing an original or supplemental report on that date.

2.  Thereafter, except as stated in paragraph 3 of this subsection, the person shall file a report on any Tuesday by which the person has reached the dollar amount for filing an original or supplemental report.

3.  During the last two weeks before the primary election and the last two weeks before the general election, the person shall file a report within one business day of reaching the dollar amount for filing an original or supplemental report.

C.  A participating candidate may file a notification report to initiate the calculation of supplemental funds pursuant to section 16-952 as follows:

1.  After the beginning of the primary election period, supplemental funds will be issued on Wednesdays for reports filed by the previous Monday, and on Fridays for reports filed by the previous Wednesday.  Notification reports will not be accepted the week of the primary election.

2.  After the beginning of the general election period, supplemental funds will be issued on Wednesdays for reports filed by the previous Monday, and on Fridays for reports filed by the previous Wednesday.  Notification reports will not be accepted the week of the general election.

C.  D.  Any filing under this article on behalf of a candidate may be made by the candidate's campaign committee.  All candidates shall deposit any check received by and intended for the campaign and made payable to the candidate or the candidate's campaign committee, and all cash received by and intended for the campaign, in the candidate's campaign account before the due date of the next report specified in subsection B of this section.  No candidate or person acting on behalf of a candidate shall conspire with a donor to postpone delivery of a donation to the campaign for the purpose of postponing the reporting of the donation in any subsequent report.

D.  E.  The secretary of state shall immediately notify the commission of the filing of each report under this section and deliver a copy of the report to the commission, and the commission shall promptly mail or otherwise deliver a copy of each report filed pursuant to this section to all participating candidates opposing the candidate identified in section 16‑941, subsection B, paragraph 2 or subsection D.

E.  F.  Any report filed pursuant to this section or section 16‑916, subsection A, paragraph 1 or subsection B shall be filed in electronic format.  The secretary of state shall distribute computer software to political committees to accommodate such electronic filing.

F.  G.  During the primary election period and the general election period, all candidates shall make available for public inspection all bank accounts, campaign finance reports and financial records relating to the candidate's campaign, either by immediate disclosure through electronic means or at the candidate's campaign headquarters, in accordance with rules adopted by the commission.END_STATUTE

Sec. 16.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-959, Arizona Revised Statutes, is amended to read:

START_STATUTE16-959.  Inflationary and other adjustments of dollar values

A.  Every two years, the secretary of state shall modify the dollar values specified in the following parts of this article, in the manner specified by section 16‑905, subsection H, to account for inflation: section 16‑941, subsection A, paragraph 2 or subsection D; section 16‑942, subsection B; section 16‑945, subsection A, paragraphs paragraph 1 and 2; section 16‑948, subsection C; section 16‑954, subsection B; section 16‑955, subsection G; and section 16‑961, subsections G and H.  In addition, the secretary of state shall make a similar inflation adjustment by modifying the dollar values in section 16‑949, subsection A and section 16‑954, subsection A to the nearest dollar since the enactment of this article.  In addition, every two years, the secretary of state shall change the dollar values in section 16‑961, subsections G and H in proportion to the change in the number of Arizona resident personal income tax returns filed during the previous calendar year.

B.  Based on the results of the elections in the year 2002 or any quadrennial election thereafter, and within six months after such election, the commission may adopt rules in a public meeting reallocating funds available to all candidates between the primary and general elections by selecting a fraction for primary election spending limits that is between one-third and one-half of the spending limits for the election as a whole. For each office, the primary election spending limit shall be modified to be the sum of the primary and general spending limits times the selected fraction, and the general election spending limit shall be modified to be the same sum times one less the selected fraction. END_STATUTE

Sec. 17.  Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 16-961, Arizona Revised Statutes, is amended to read:

START_STATUTE16-961.  Definitions

A.  The terms "candidate's campaign committee," "contribution," "expenditures," "exploratory committee," "independent expenditure," "personal monies," "political committee" and "statewide office" are defined in section 16‑901.

B.  1.  "Election cycle" means the period between successive general elections for a particular office.

2.  "Exploratory period" means the period beginning on the day after a general election and ending the day before the start of the qualifying period.

3.  "Qualifying period" means the period beginning on the first day of August in a year preceding an election, for an election for a statewide office, or on the first day of January of an election year, for an election for legislator, and ending seventy‑five days before the day of the general election one week before the primary election.

4.  "Primary election period" means the nine‑week period ending on the day of the primary election.

5.  "General election period" means the period beginning on the day after the primary election and ending on the day of the general election.

6.  For any recall election, the qualifying period shall begin when the election is called and last for thirty days, there shall be no primary election period and the general election period shall extend from the day after the end of the qualifying period to the day of the recall election.  For recall elections, any reference to "general election" in this article shall be treated as if referring to the recall election.

C.  1.  "Participating candidate" means a candidate who becomes certified as a participating candidate pursuant to section 16‑947.

2.  "Nonparticipating candidate" means a candidate who does not become certified as a participating candidate pursuant to section 16‑947.

3.  Any limitation of this article that is applicable to a participating candidate or a nonparticipating candidate shall also apply to that candidate's campaign committee or exploratory committee.

D.  "Commission" means the citizens clean elections commission established pursuant to section 16‑955.

E.  "Fund" means the citizens clean elections fund defined by this article.

F.  1.  "Party nominee" means a person who has been nominated by a political party pursuant to section 16‑301 or 16‑343.

2.  "Independent candidate" means a candidate who has properly filed nominating papers and nominating petitions with signatures pursuant to section 16‑341.

3.  "Unopposed" means with reference to an election for:

(a)  A member of the house of representatives, opposed by no more than one other candidate who has qualified for the ballot and who is running in the same district.

(b)  A member of the corporation commission, opposed by a number of candidates who have qualified for the ballot that is fewer than the number of corporation commission seats open at that election and for which the term of office ends on the same date.

(c)  All other offices, opposed by no other candidate who has qualified for the ballot and who is running in that district or running for that same office and term.

G.  "Primary election spending limits" means:

1.  For a candidate for the legislature, twelve thousand nine hundred twenty-one dollars.

2.  For a candidate for mine inspector, forty‑one thousand three hundred forty-nine dollars.

3.  For a candidate for treasurer, superintendent of public instruction or the corporation commission, eighty‑two thousand six hundred eighty dollars.

4.  For a candidate for secretary of state or attorney general, one hundred sixty‑five thousand three hundred seventy-eight dollars.

5.  For a candidate for governor, six hundred thirty‑eight thousand two hundred twenty‑two dollars.

H.  "General election spending limits" means amounts fifty per cent greater than the amounts specified in subsection G of this section.

I.  1.  "Original" spending limit means a limit specified in subsections G and H of this section, as adjusted pursuant to section 16‑959, or a special amount expressly set for a particular candidate by a provision of this title.

2.  "Adjusted" spending limit means an original spending limit as further adjusted to account for reported overages pursuant to section 16‑952.END_STATUTE

Sec. 18.  Section 41-2421, Arizona Revised Statutes, is amended to read:

START_STATUTE41-2421.  Enhanced collections; allocation of monies; criminal justice entities

A.  Notwithstanding any other law and except as provided in subsection J of this section, five per cent of any monies collected by the supreme court and the court of appeals for the payment of filing fees, including clerk fees, diversion fees, fines, penalties, surcharges, sanctions and forfeitures, shall be deposited, pursuant to sections 35‑146 and 35‑147, and allocated pursuant to the formula in subsection B of this section.  This subsection does not apply to monies collected by the courts pursuant to section 16‑954, subsection C, or for child support, restitution or exonerated bonds.

B.  The monies deposited pursuant to subsection A of this section shall be allocated according to the following formula:

1.  21.61 per cent to the state aid to county attorneys fund established by section 11‑539.

2.  20.53 per cent to the state aid to indigent defense fund established by section 11‑588.

3.  57.37 per cent to the state aid to the courts fund established by section 12‑102.02.

4.  0.49 per cent to the department of law for the processing of criminal cases.

C.  Notwithstanding any other law and except as provided in subsection J of this section, five per cent of any monies collected by the superior court, including the clerk of the court and the justice courts in each county for the payment of filing fees, including clerk fees, diversion fees, adult and juvenile probation fees, juvenile monetary assessments, fines, penalties, surcharges, sanctions and forfeitures, shall be transmitted to the county treasurer for allocation pursuant to subsections E, F, G and H of this section.  This subsection does not apply to monies collected by the courts pursuant to section 16‑954, subsection A or for child support, restitution or exonerated bonds.

D.  The supreme court shall adopt guidelines regarding the collection of revenues pursuant to subsections A and C of this section.

E.  The county treasurer shall allocate the monies deposited pursuant to subsection C of this section according to the following formula:

1.  21.61 per cent for the purposes specified in section 11‑539.

2.  20.53 per cent for the purposes specified in section 11‑588.

3.  57.37 per cent to the local courts assistance fund established by section 12‑102.03.

4.  0.49 per cent to the state treasurer for transmittal to the department of law for the processing of criminal cases.

F.  The board of supervisors in each county shall separately account for all monies received pursuant to subsections C and E of this section and expenditures of these monies may be made only after the requirements of subsections G and H of this section have been met.

G.  By December 1 of each year each county board of supervisors shall certify if the total revenues received by the justice courts and the superior court, including the clerk of the superior court, exceed the amount received in fiscal year 1997‑1998.  If the board so certifies, then the board shall distribute the lesser of either:

1.  The total amount deposited pursuant to subsection C of this section.

2.  The amount collected and deposited pursuant to subsection C of this section that exceeds the base year collections of fiscal year 1997‑1998. These monies shall be distributed according to the formula specified in subsection E of this section.  Any monies remaining after this allocation shall be transmitted as otherwise provided by law.

H.  If a county board of supervisors determines that the total revenues transmitted by the superior court, including the clerk of the superior court and the justice courts in the county, do not equal the base year collections transmitted in fiscal year 1997‑1998 the monies specified in subsection C of this section shall be transmitted by the county treasurer as otherwise provided by law.

I.  For the purposes of this section, base year collections shall be those collections specified in subsection C of this section.

J.  Monies collected pursuant to section 12‑116.01, subsection B shall be allocated as follows:

1.  15.44 per cent to the state aid to county attorneys fund established by section 11‑539.

2.  14.66 per cent to the state aid to indigent defense fund established by section 11‑588.

3.  40.97 per cent to the state aid to the courts fund established by section 12‑102.02.

4.  0.35 per cent to the department of law for the processing of criminal cases.

5.  14.29 per cent to the Arizona criminal justice commission for distribution to state, county and municipal law enforcement full service forensic crime laboratories pursuant to rules adopted by the Arizona criminal justice commission.

6.  14.29 per cent to the supreme court for allocation to the municipal courts pursuant to subsection K of this section.

K.  The supreme court shall administer and allocate the monies received pursuant to subsection J, paragraph 6 of this section to the municipal courts based on the total amount of surcharges transmitted pursuant to section 12‑116.01 by that jurisdiction's city treasurer to the state treasurer for the prior fiscal year divided by the total amount of surcharges transmitted to the state treasurer pursuant to section 12‑116.01 by all city treasurers statewide for the prior fiscal year.  The municipal court shall use the monies received to improve, maintain and enhance the ability to collect and manage monies assessed or received by the courts, to improve court automation and to improve case processing or the administration of justice.  The municipal court shall submit a plan to the supreme court and the supreme court shall approve the plan before the municipal court begins to spend these allocated monies. END_STATUTE

Sec. 19.  Section 43-323, Arizona Revised Statutes, is amended to read:

START_STATUTE43-323.  Place and form of filing returns

A.  All returns required by this title shall be in such form as the department may from time to time prescribe and shall be filed with the department.

B.  The department shall prescribe a short form return for individual taxpayers who:

1.  Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43‑1012.

2.  Elect to claim the optional standard deduction pursuant to section 43‑1041.

3.  Elect not to file for credits against income tax liability other than those contained in section 16‑954, subsection B and sections 43‑1072, 43‑1072.01 and 43‑1073.

4.  Are not required to add any income under section 43‑1021 and do not elect any subtractions under section 43‑1022, except for the exemptions allowed under section 43‑1023.

C.  The department may provide a simplified return form for individual taxpayers who:

1.  Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43‑1012.

2.  Are residents for the full taxable year.

3.  File as single individuals or married couples filing joint returns under section 43‑309.

4.  Are not sixty‑five years of age or older or blind at the end of the taxable year.

5.  Claim no exemptions under section 43-1023 for the taxable year.

6.  Elect to claim the optional standard deduction under section 43‑1041.

7.  Are not required to add any income under section 43‑1021 and do not elect to claim any subtractions under section 43‑1022 or file for any credits under chapter 10, article 5 of this title except the credits provided by sections 43‑1072.01 and 43‑1073.

8.  Do not elect to contribute a portion of any tax refund as provided by any provision of chapter 6, article 1 of this title.  Notwithstanding any provision of chapter 6, article 1 of this title, a simplified return form under this subsection shall not include any space for the taxpayer to so contribute a portion of a refund.

D.  The department shall prepare blank forms for the returns and shall distribute them throughout the state and furnish them upon application. Failure to receive or secure the form does not relieve any taxpayer from making any return required. END_STATUTE

Sec. 20.  Section 43-1071, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1071.  Credit for income taxes paid to other states; definitions

A.  Subject to the following conditions, residents shall be allowed a credit against the taxes imposed by this chapter for net income taxes imposed by and paid to another state or country on income taxable under this chapter:

1.  The credit shall be allowed only for taxes paid to the other state or country on income that is derived from sources within that state or country and that is taxable under its laws irrespective of the residence or domicile of the recipient.

2.  The credit shall not be allowed if the other state or country allows residents of this state a credit against the taxes imposed by that state or country for taxes paid or payable under this chapter.

3.  The credit shall not exceed the proportion of the tax payable under this chapter as the income subject to tax in the other state or country and also taxable under this title bears to the taxpayer's entire income on which the tax is imposed by this chapter.

B.  If any taxes paid to another state or country for which a taxpayer has been allowed a credit under this section are at any time credited or refunded to the taxpayer:

1.  The taxpayer shall immediately report that fact to the department.

2.  A tax equal to the credit allowed for the taxes credited or refunded by the other state or country is due and payable from the taxpayer on notice and demand from the department.

3.  Interest shall be added to and collected as a part of the tax at the rate determined pursuant to section 42‑1123 from the date the credit was allowed under this chapter to the date of the notice and demand.

4.  If the tax and interest are not paid within ten days from the date of notice and demand, there shall be collected as a part of the tax interest on the unpaid amount of tax and interest at the rate of twelve per cent a year from the date of the notice and demand until the amount is paid.

C.  The credit against the taxes imposed by this chapter for net income taxes paid to another state or country shall not be allowed to any taxpayer or any class of taxpayers if the allowances of the credit will result in any invalid or illegal discrimination against another taxpayer or another class of taxpayers.

D.  For taxable years beginning on or after January 1, 2002 and subject to the following conditions, a resident of this state, who is also considered to be a resident of another state under the laws of the other state, is allowed a credit against the taxes imposed by this title for net income taxes imposed by and paid to that state on income taxable under this title as follows:

1.  The credit is allowed only if the other state taxes the income to the resident of this state and does not allow the taxpayer a credit against taxes imposed by that state on that income for taxes paid or payable on that income under this title.

2.  The credit is allowed only for the proportion of the taxes paid to the other state as the income taxable under this title and also subject to tax in the other state bears to the entire income on which the taxes paid to the other state are imposed.

3.  The credit may not exceed the proportion of the tax payable under this title as the income taxable under this title and also subject to tax in the other state bears to the entire income taxable under this title.

4.  For the purpose of the credit allowed under this subsection, "income taxable under this title and also subject to tax in the other state" means income that would be sourced to the other state if the other state were imposing its income tax on the taxpayer as if the taxpayer was a nonresident of that other state.

E.  For the purposes of this section, net income taxes imposed by another country include taxes that qualify for a credit under sections 901 and 903 of the internal revenue code and the regulations under those sections.

F.  For the purposes of this section:

1.  "Entire income on which the other state's or country's tax is imposed" means the other state's or country's income computed under the equivalent of section 43-1094 but does not include any exemption allowable under the equivalent of section 43-1023.

2.  "Entire income on which the tax is imposed by this chapter" means Arizona adjusted gross income as defined and computed under section 43-1001 but does not include any exemption allowed under section 43-1023.

3.  "Income subject to tax in the other state or country and also taxable under this title" means the portion of income that is included in entire income on which the tax is imposed under by this chapter that is also included in the entire income on which the other state's or country's tax is imposed.  The taxpayer shall increase or reduce the portion of income that is included in the entire income on which the tax is imposed under by this chapter by any related additions under section 43-1021 and by any related subtractions under section 43-1022.  The taxpayer shall increase or reduce the portion of income that is included in the entire income on which the other state's or country's tax is imposed by any related additions and subtractions under the other state's equivalent of sections 43-1021 and 43-1022, as applicable.

4.  "Tax payable under this chapter" means the income tax imposed by this state on the taxpayer's taxable income as defined under section 43-1001 minus all of the following:

(a)  The reduction amount received under section 16-954, subsection A.

(b)  Any tax credit amount claimed under section 16-954, subsection B.

(c)  any tax credit amount claimed for the taxable year under this article but not including the credit amount allowed under this section. END_STATUTE

Sec. 21.  Section 43-1096, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1096.  Credit for income taxes paid by nonresident; definitions

A.  Subject to the following conditions, nonresidents shall be allowed a credit against taxes imposed by this title for net income taxes imposed by and paid to the state or country of residence on income taxable under this title:

1.  The credit shall be allowed only if the state or country of residence either does not tax income of residents of this state derived from sources within that state or country or allows residents of this state a credit against taxes imposed by that state or country on the income for taxes paid or payable under this title.

2.  The credit shall not be allowed for taxes paid to a state or country which allows its residents a credit against the taxes imposed by that state or country for income taxes paid or payable under this title irrespective of whether its residents are allowed a credit against the taxes imposed by this title for income taxes paid to that state or country.

3.  The credit shall be allowed only for the proportion of the taxes paid to the state or country of residence as the income taxable under this title and also subject to tax in the state or country of residence bears to the entire income on which the taxes paid to the state or country of residence are imposed.

4.  The credit shall not exceed the proportion of the tax payable under this title as the income taxable under this title and also subject to tax in the state or country of residence bears to the entire income taxable under this title.

B.  For the purposes of this section, net income taxes imposed by another country include taxes that qualify for a credit under sections 901 and 903 of the internal revenue code and the regulations under those sections.

C.  For the purposes of this section:

1.  "Entire income on which the taxes paid to the state or country of residence are imposed" means the other state's or country's adjusted gross income computed under the equivalent of section 43-1001, but does not include any exemption allowable under the equivalent of section 43‑1023.

2.  "Entire income taxable under this title" means Arizona adjusted gross income computed under section 43‑1094 but does not include any exemption allowed under section 43‑1023.

3.  "Income taxable under this title and also subject to tax in the state or country of residence" means the portion of income that is included in entire income taxable under this title that is also included in the entire income on which the taxes paid to the state or country of residence are imposed.  The taxpayer shall increase or reduce the portion of income that is included in the entire income taxable under this title by any related additions under section 43-1021 and by any related subtractions under section 43-1022.  The taxpayer shall increase or reduce the portion of income that is included in the entire income on which taxes paid to the state or country of residence are imposed by any related additions and subtractions under the other state's equivalent of sections 43-1021 and 43-1022, as applicable.

4.  "Tax payable under this title" means the income tax imposed by this state on the taxpayer's taxable income computed under section 43‑1095 minus all of the following:

(a)  The reduction amount received under section 16‑954, subsection A.

(b)  Any tax credit amount claimed under section 16‑954, subsection B.

(c)  any tax credit amount claimed for the taxable year under article 5 of this chapter but not including the credit amount allowed under this section. END_STATUTE

Sec. 22.  Requirements for enactment; three-fourths vote

Pursuant to article IV, part 1, section 1, Constitution of Arizona, sections 16-901.01, 16-941, 16-945, 16-946, 16-947, 16-949, 16-950, 16-951, 16-952, 16-953, 16-954, 16-956, 16-958, 16-959 and 16‑961, Arizona Revised Statutes, as amended by this act, are effective only on the affirmative vote of at least three‑fourths of the members of each house of the legislature.

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