Assigned to COM & APPROP AS PASSED BY COW
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
AMENDED
FACT SHEET FOR H.B. 2809
public infrastructure improvements; reimbursement
Purpose
Increases, from $100,000,000 to $200,000,000, the aggregate cap on the amount of state
prime contracting transaction privilege tax (TPT) revenues that must be paid to cities, towns and
counties for public infrastructure improvements for the benefit of a manufacturing facility.
Background
TPT is imposed on the gross receipts of taxable businesses, with the exception of prime
contractors. The tax base for the prime contracting classification is 65 percent of the gross proceeds
of sales or gross income derived from the business and certain amounts must be deducted before
computing the tax base. The TPT rate for prime contracting is 5.6 percent of the tax base (A.R.S.
§§ 42-5010; 42-5010.01; and 42-5075).
From October 1, 2013, through September 30, 2033, the State Treasurer must pay a city,
town or county the total amount of state prime contracting TPT revenues derived from contracts
to construct buildings and associated improvements for the benefit of a manufacturing facility for
the purpose of funding up to 80 percent of the cost of the public infrastructure improvements. The
aggregate amount of state prime contracting TPT revenues paid to all cities, towns and counties
for public infrastructure improvements may not exceed $100,000,000. In order for a city, town or
county to qualify for state prime contracting TPT revenue distributions, the manufacturing facility
must agree to make a capital investment of at least: 1) $500,000,000 in a county with a population
of more than 800,000 persons; or 2) $50,000,000 in a county with a population fewer than 800,000
persons (A.R.S. § 42-5032.02).
If increasing the aggregate cap on the amount of state prime contracting TPT revenues that
must be paid to cities, towns and counties results in the payment of state prime contracting TPT
revenues to cities, towns and counties in an amount that would otherwise exceed $100,000,000
and be directed to the state General Fund, there may be a fiscal impact to the state General Fund.
Provisions
1. Increases, from $100,000,000 to $200,000,000, the aggregate cap on the amount of state prime
contracting TPT revenues that must be paid to cities, towns and counties for public
infrastructure improvements for the benefit of a manufacturing facility.
2. Makes technical changes.
3. Becomes effective on the general effective date. FACT SHEET – Amended
H.B. 2809
Page 2
Amendments Adopted by Committee of the Whole
• Increases, from $100,000,000 to $200,000,000, rather than eliminates, the aggregate cap on
the amount of state prime contracting transaction privilege tax revenues that must be paid to
cities, towns and counties for public infrastructure improvements for the benefit of a
manufacturing facility.
House Action Senate Action
COM 2/14/23 DP 10-0-0-0 COM 3/22/23 DP 7-0-0
3
rd
Read 3/7/23 60-0-0 APPROP 3/28/23 DP 9-0-1
Prepared by Senate Research
June 12, 2023
JT/FB/sr