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ARIZONA STATE LEGISLATURE
Forty-eighth Legislature – First Regular Session
JOINT LEGISLATIVE INCOME TAX CREDIT REVIEW COMMITTEE
Minutes of Interim Meeting
House Hearing Room 4 – 10:00 A.M.
Chairman Yarbrough called the meeting to order at 10:05 a.m. and attendance was noted by the secretary.
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Senator Jim Waring, CoChair |
Representative Steven Yarbrough, CoChair |
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Senator Robert Burns |
Representative Jack Brown |
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Senator Ken Cheuvront |
Representative Tom Chabin |
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Senator Ron Gould |
Representative Rick Murphy |
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Senator Jorge Garcia |
Representative Michele Reagan |
Opening Remarks
Chairman Yarbrough announced that the meeting would begin without a quorum.
Presentations by JLBC on income tax credits for the 2007 review schedule
Tim Everill, Joint Legislative Budget Committee (JLBC), explained that the roll of the Income Tax Credit Review Committee is defined by statute and is to perform scheduled reviews of income tax credits. Mr. Everill added that this is the first year to begin again the full cycle of reviews and he distributed documentation to be presented on each tax credit (Attachment 1). Mr. Everill explained that the committee is to determine the original purpose of each tax credit and to decide whether to let it stand, be amended, or be repealed.
ARS 43-1077 and ARS 43-1165 Employment by qualified
defense contractor
ARS 43-1078 and ARS 43-1166 Property taxes paid for qualified defense
contractor
Hans Olofsson, JLBC, explained the defense contractor tax credits (Attachment 1) and stated that only six taxpayers have claimed the credit since 1993.
Senator Cheuvront stated his belief that this is bad public policy designed to help defense contractors after the end of the Cold War which is costing the government a lot of money.
Representative Chabin asked if these are income tax credits, where a taxpayer paid property taxes and then received an income tax credit; Mr. Olofsson said that was correct.
ARS 43-1079 and ARS 43-1167 Employment in military reuse zone
Eric Billings, JLBC, explained the military reuse tax credit (Attachment 1) and stated that only five taxpayers have claimed the credit since 1993. He noted that due to confidentiality concerns some information is not available.
ARS 43-1080 and ARS 43-1169 Construction cost for qualified environmental technology facility
Mr. Oloffson explained the environmental technology facility tax credit (Attachment 1) and stated that seven taxpayers have claimed the credit since 1993.
Senator Gould noted that North Star Steel is not in business anymore.
Public Testimony
There was none.
Recommendations for retaining, amending or repealing the income tax credits
Chairman Yarbrough suggested that no action be taken on the defense contractor credits as they will expire before the next five-year review cycle, and that the same approach is taken for the environmental technology credits, although they could be put back on the review calendar. He also suggested that the military reuse credit could either be put back on the calendar or the committee could require a report to the Department of Commerce.
Representative Brown recommended that the committee should think this through more thoroughly than was done when these credits were first offered. He noted that the committee is deciding based on figures from 2000 and 2001 and is many years behind what is actually going on; he stated that he is in favor of stopping these credits.
Chairman Yarbrough concurred, stating that there are so few taxpayers taking these credits that information cannot be made available for fear of revealing who the taxpayers are. He suggested making no motion and letting the existing credits expire, but putting the military reuse credit back on the schedule for 2012.
Mr. Oloffson commented that the technology credit will not expire and could be transferred; Chairman Yarbrough said that the technology credit should also be put on the schedule for 2012.
Representative Chabin asked if there will be no new taxpayers identified under these credits; Chairman Yarbrough replied that they must have been certified by this point in time, but that the certification cannot be taken away.
Representative Chabin moved that the Joint Legislative Income Tax Credit Review Committee place the military reuse zone tax credit on the schedule for 2012. The motion carried by a voice vote.
Representative Chabin moved that the Joint Legislative Income Tax Credit Review Committee place the environmental technology tax credit on the schedule for 2012. The motion carried by a voice vote.
Without objection, the meeting adjourned at 10:35 a.m.
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Jane Dooley, Committee Secretary
December 11, 2007
(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov/)
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JOINT LEGISLATIVE INCOME TAX CREDIT REVIEW COMMITTEE
December 11, 2007 December 4, 2007
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