2015 Public Policy Guide

As the nation prepares to vote for new lawmakers at the state and federal levels, the Arizona Technology Council and its Public Policy Committee already have prepared a slate of public policy positions intended to make Arizona the best place for technology firms to do business.

The 2015 Public Policy Guide offers key ideas, goals and legislative initiatives that:

• Improve the business climate for technology-based businesses,
• Provide sources of capital that encourage entrepreneurship,
• Create an environment that supports technology-related job retention and creation, and
• Trains and attract the required talent to compete in a global innovation economy.

“The guide serves as an instrument to convey our positions on the issues at the heart of creating the type of technology community that will best serve our members and constituents,” says Zylstra. “Our collective voice has the ability to change the hearts and minds of all levels of decision makers who are shaping the economic future of our state.”

The following are highlights from the public policy agenda intended for the Arizona Legislature. For more details as well as information on congressional initiatives, a complete guide is available at www.aztechcouncil.org/advocacy/publicpolicyguide.

Legislative Priorities – 2015

• Expansion of the refundable research and development tax credit – Continue and expand the refundable research and development (R&D) tax credit as a further inducement to Arizona companies raising early-stage capital. The underlying R&D tax credit is a keystone to Arizona’s economic future through the continued growth of high-paying, knowledge-economy jobs. At its current cap of $5 million per year, the existing credit has been an unqualified success. Technology companies with operations in Arizona that have used the credit have reinvested the funds through additional R&D and hiring talent in Arizona. Therefore, it is vital that the cap on the credit be expanded to $10 million in 2016 and $15 million in 2017.
• Recapitalization of the Angel Investment Tax Credit program – Refund the program at the level of $20 million for the life of the program. In the 2014 legislative session, the Legislature extended the sunset date of the highly successful Angel Investment Tax Credit from 2016 to 2021. Though the bill extended the life of the program, there were no additional funds allocated to the program.
• Restoration of K-12 education funding – Invest in our education system and support fully funding inflation in the baseline to uphold the voters’ will in the 2000 initiative. The Council continues to focus on building an Arizona that can develop and maintain the work force needed to attract and retain high-wage jobs.

Other Areas

Aerospace, Aviation & Defense

• Defense spending – Ensure Arizona not only continues to be in the top four or five states for aerospace and defense but also moves up in the rankings.
• Protection of Arizona’s military bases – Shield Arizona’s military bases from development encroachment.
• Unmanned aerial systems – Seek ways to cultivate strong ties and additional projects with Nevada, one of the six states in the nation selected as test sites for unmanned aerial systems, by leveraging existing assets statewide.

Capital Formation

• Early-stage venture capital – Due to Arizona’s immediate budget issues, seek to establish a structure for an Early-Stage Technology Venture Fund in 2015 so it can be funded in the future legislative sessions to a level of $50 million over three years.

Cybersecurity

• Awareness – Make it a priority to educate businesses on the risks posed by unfriendly countries and malicious individuals, and best practices in discerning and blocking attacks.
• Regulatory – Promote responsible regulation that centers on reasonable and consistent requirements regarding privacy notices and breach responses.

Economic Development

• Arizona Commerce Authority state promotional effort – Advocate to public policy decision makers for Arizona Commerce Authority’s continuation at an appropriate level of funding with assurance that it remains as the platform for the state’s economic development efforts.
• Local efforts – Ensure we foster local economic development by supporting local entrepreneurs who engage with the global economy through broadband and the Internet to deliver goods and services around the world.

Education

• Creation of new work-like and competency-based work experience models to support economic development – Create new models for internships and career exploration — with a no-cost-to-student funding mechanism — to facilitate the development of skills and competencies necessary to support priority economic development in current and emerging sectors.
• Dramatic improvement of STEM education – Support efforts to dramatically improve science, technology, engineering and math education.
• E-learning – Leverage technology and infrastructure to ensure the availability of high-quality instruction, including a focus on e-learning.
• Implementation of Arizona’s College and Career Ready Standards with appropriate resources, training and assessment – Recognize Standards are rigorous, providing new standards to better prepare students for work and postsecondary education.

Energy

• Diversification of energy supply, utilization – Improve diversification of the state’s energy mix by including solar and other renewable energy resources. This policy would help hedge against short supplies or rising prices in any one type of generation.
• Electric transmission – Develop and standardize transmission processes to provide Arizona with better access to new energy markets and more efficient use of the existing transmission system..
• Regional focus on energy planning – An increased focus on a regional approach could drive an increase in renewable energy generation without requiring modification of Arizona’s renewable energy standard.

Taxation

• Capital gains – Increase the current capital gain deduction from 25 percent to 57 percent to help reduce the advantage enjoyed by other states with tax systems that more closely align with the federal government.
• Continued improvement of business property tax competitiveness – Pursue the eventual equalization of business and residential property taxes. As recently as 2005, Arizona businesses faced property tax assessment rates 2½ times those of residents.
• Data centers – Protect Arizona’s tax advantages in the exemptions given to promote the retention and expansion of enterprise and co-location data centers, and continue to promote all levels of data center activity, including the migration of technology centers to Arizona.

Transportation/Digital Infrastructure

• Increased broadband availability, affordability and use – Remove or reduce barriers that generate unnecessary costs or delays and otherwise inhibit expansion of privately funded, high-speed digital infrastructure that meets the needs of all Arizonans.
• Interstate 11 – Create a multimodal corridor between Phoenix and Las Vegas, wherein roadways are paired with rail, telecommunications and energy rights-of-way and facilities. Further, extend Interstate 11 south of Phoenix, enhancing commercial opportunities by linking trade between Mexico and the Intermountain West.

Workplace & Workforce

• Alignment of education with employer needs – Facilitate connections between technology employers in Arizona and educators and trainers at all levels.
• Promotion of ways that companies can actively participate in bridging the talent gap – Encourage companies to actively engage with the educators and workforce development organizations at all levels to help set the curriculum content as well as work experience and apprenticeship standards that support certification and credentials.
• Workforce development – Unite programs and agencies to deal with the skilled workforce shortages affecting many industry sectors, including energy, information technology, bioscience, health sciences, and mid-skill and advanced manufacturing.