Plans for Public Policy

As state lawmakers look ahead to the convening of the 53rd Arizona Legislature, so is the Arizona Technology Council.

Headed by the collective efforts of members of its Public Policy Committee, the Council has prepared its 2016 Public Policy Guide to assist elected officials and other stakeholders at all levels of government — federal as well as state — and business as they craft legislation and policies that affect residents and the Arizona economy.

The Council continuously monitors federal, state and local legislation and policies that impact the sustainability and growth of Arizona’s technology industry. To create the guide, the Committee prepared 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 science- and technology-related job retention and creation, and
• Attract and train the talent required to compete in a global innovation economy.

The results offer a roadmap that lawmakers can follow to achieve successes that can be felt far beyond the technology community. Specifically for the Legislature, the guide cites these areas as priorities:

Recapitalization of the Angel Investment Tax Credit Program –
Re-fund 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 and the program has depleted the initial $20 million authorized when the program was created.

Implement the Dodd-Frank small fund exemption – Update Arizona’s investment adviser registration statutes to allow the private fund exemption. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law and substantially changed federal financial services and securities laws, including the regulation of investment advisers. The previous exemption for investment advisers with fewer than 15 clients and who did not hold themselves out to the public as investment advisers was eliminated. It was replaced with a “reporting adviser” exemption for advisers who either solely advise venture capital funds or advise “qualifying private funds” with less than $150 million in assets. Most states were able to update the exemptions for adviser registration by rule or order. However, Arizona’s registration exemptions are in statute and will need to be updated through legislation to remove the disincentive to this type of investment in this state.

Appropriately fund the state’s education system at all levels, including pre-kindergarten, K-12 and postsecondary – Short-term reforms should include funding K-12 education according to the Proposition 301 formula as well as alternative ideas to restore K-12, CTE, university and community college funding. Long-term efforts require comprehensive funding reform to modernize and promote a 21^st-century delivery model of education that focuses on performance and accountability.

Create and fund a job training program – Advocate for the Legislature to reinstate a funding structure to the Job Training fund administered by the Arizona Commerce Authority to help attract and grow businesses in Arizona. In the 2015 legislative session, the Job Training tax was repealed from the fiscal 2017 budget, a year earlier than it was scheduled to sunset. This tax provided funds to attract new businesses, and support small and rural Arizona companies by offering reimbursable grant money for job training to new and existing employees.

In addition to these priorities, there are other results that the Council believes should be targeted by the Legislature when its members come together in January:

Aerospace, aviation & defense – State leaders and members of the Legislature must continue to develop strategies that will maintain, strengthen and grow the aerospace, defense, aviation and unmanned systems industrial base that will provide Arizona a competitive edge as a top state supporting U.S. national security objectives.

Biosciences – Advocate collaboratively with Arizona stakeholders to support the discovery, development, commercialization, delivery and availability of bioscience innovations. In addition, the Council advocates at the state and federal level for a competitive regulatory and tax environment.

Cybersecurity – There is no question that we are in a cyberwar being waged globally but primarily in the private sector. As a result, American businesses find themselves at the forefront of the battle. Improving cybersecurity is now critical for businesses of all sizes and types.

Energy – To attract investment capital as well as retain and grow its technology business sector, Arizona needs predictable and investable energy markets. Additionally, the state needs a secure and adequate water  supply.

State budget – Of particular importance is a state budget and process that is strategic and reliable. It should provide for the core needs of the state and reflect opportunities to leverage technology for greater efficiency and effectiveness of state government. For example, legislators should focus on building an Arizona that requires a high-quality education system to develop and maintain the workforce needed to attract and retain high-wage jobs.

On the national level, the Council is involved with many federal policy issues that impact member companies. Through its partnership with the Technology Councils of North America (TECNA) and CompTIA, it is regularly interacting with the congressional delegation on a number of critical issues.

Likely one of the most important topics is trade. The U.S. technology industry needs 21^st-century free trade agreements to ensure the movement of data across borders, which is vital to moving internal communications, R&D data, human resources information and processing payments. Additionally, agreements must address intellectual property and trade secrets protections, and the elimination of tariffs for technology goods.

For additional details about the Council’s position on these and other issues, see the Guide at www.aztechcouncil.org.