HB2467 - Data centers; incentives repeal; requirements

REFERENCE TITLE: data centers; incentives repeal; requirements State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HB 2467 Introduced by Representatives Sandoval: Abeytia, Aguilar, Austin, Contreras P, Crews, Garcia, Liguori, Márquez, Mathis, Peshlakai, Simacek, Stahl Hamilton, Tsosie, Villegas; Senators Alston, Epstein, Kuby, Ortiz, Sundareshan AN ACT Repealing section 41-1519, Arizona Revised Statutes; amending sections 42-2003 and 42-5061, Arizona Revised Statutes; amending section 42-5159, Arizona Revised Statutes, as amended by Laws 2025, chapter 135, section 2 and chapter 247, section 2; repealing section 42-5159, Arizona Revised Statutes, as amended by laws 2025, chapter 251, section 13; amending section 42-6004, Arizona Revised Statutes; amending title 44, chapter 11, Arizona Revised Statutes, by adding article 26; relating to computer data centers. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Repeal Section 41-1519, Arizona Revised Statutes, is repealed. Sec. 2. Section 42-2003, Arizona Revised Statutes, is amended to read: START_STATUTE 42-2003. Authorized disclosure of confidential information A. Confidential information relating to: 1. A taxpayer may be disclosed to the taxpayer, its successor in interest or a designee of the taxpayer who is authorized in writing by the taxpayer. A principal corporate officer of a parent corporation may execute a written authorization for a controlled subsidiary. If a taxpayer elects to file an Arizona small business income tax return under section 43-302, a written authorization by the taxpayer to allow the department to disclose personal income tax information to a designee includes the corresponding Arizona small business income tax return. 2. A corporate taxpayer may be disclosed to any principal officer, any person designated by a principal officer or any person designated in a resolution by the corporate board of directors or other similar governing body. If a corporate officer signs a statement under penalty of perjury representing that the officer is a principal officer, the department may rely on the statement until the statement is shown to be false. For the purposes of this paragraph, "principal officer" includes a chief executive officer, president, secretary, treasurer, vice president of tax, chief financial officer, chief operating officer or chief tax officer or any other corporate officer who has the authority to bind the taxpayer on matters related to state taxes. 3. A partnership may be disclosed to any partner of the partnership. This exception does not include disclosure of confidential information of a particular partner unless otherwise authorized. 4. A limited liability company may be disclosed to any member of the company or, if the company is manager-managed, to any manager. 5. An estate may be disclosed to the personal representative of the estate and to any heir, next of kin or beneficiary under the will of the decedent if the department finds that the heir, next of kin or beneficiary has a material interest that will be affected by the confidential information. 6. A trust may be disclosed to the trustee or trustees, jointly or separately, and to the grantor or any beneficiary of the trust if the department finds that the grantor or beneficiary has a material interest that will be affected by the confidential information. 7. A government entity may be disclosed to the head of the entity or a member of the governing board of the entity, or any employee of the entity who has been delegated the authorization in writing by the head of the entity or the governing board of the entity. 8. Any taxpayer may be disclosed if the taxpayer has waived any rights to confidentiality either in writing or on the record in any administrative or judicial proceeding. 9. The name and taxpayer identification numbers of persons issued direct payment permits may be publicly disclosed. 10. Any taxpayer may be disclosed during a meeting or telephone call if the taxpayer is present during the meeting or telephone call and authorizes the disclosure of confidential information. B. Confidential information may be disclosed to: 1. Any employee of the department whose official duties involve tax administration. 2. The office of the attorney general solely for its use in preparation for, or in an investigation that may result in, any proceeding involving tax administration before the department or any other agency or board of this state, or before any grand jury or any state or federal court. 3. The department of liquor licenses and control for its use in determining whether a spirituous liquor licensee has paid all transaction privilege taxes and affiliated excise taxes incurred as a result of the sale of spirituous liquor, as defined in section 4-101, at the licensed establishment and imposed on the licensed establishments by this state and its political subdivisions. 4. Other state tax officials whose official duties require the disclosure for proper tax administration purposes if the information is sought in connection with an investigation or any other proceeding conducted by the official. Any disclosure is limited to information of a taxpayer who is being investigated or who is a party to a proceeding conducted by the official. 5. The following agencies, officials and organizations, if they grant substantially similar privileges to the department for the type of information being sought, pursuant to statute and a written agreement between the department and the foreign country, agency, state, Indian tribe or organization: (a) The United States internal revenue service, alcohol and tobacco tax and trade bureau of the United States treasury, United States bureau of alcohol, tobacco, firearms and explosives of the United States department of justice, United States drug enforcement agency and federal bureau of investigation. (b) A state tax official of another state. (c) An organization of states, federation of tax administrators or multistate tax commission that operates an information exchange for tax administration purposes. (d) An agency, official or organization of a foreign country with responsibilities that are comparable to those listed in subdivision (a), (b) or (c) of this paragraph. (e) An agency, official or organization of an Indian tribal government with responsibilities comparable to the responsibilities of the agencies, officials or organizations identified in subdivision (a), (b) or (c) of this paragraph. 6. The auditor general, in connection with any audit of the department subject to the restrictions in section 42-2002, subsection D. 7. Any person to the extent necessary for effective tax administration in connection with: (a) The processing, storage, transmission, destruction and reproduction of the information. (b) The programming, maintenance, repair, testing and procurement of equipment for purposes of tax administration. (c) The collection of the taxpayer's civil liability. 8. The office of administrative hearings relating to taxes administered by the department pursuant to section 42-1101, but the department shall not disclose any confidential information without the taxpayer's written consent: (a) Regarding income tax or withholding tax. (b) On any tax issue relating to information associated with the reporting of income tax or withholding tax. 9. The United States treasury inspector general for tax administration for the purpose of reporting a violation of internal revenue code section 7213A (26 United States Code section 7213A), unauthorized inspection of returns or return information. 10. The financial management service of the United States treasury department for use in the treasury offset program. 11. The United States treasury department or its authorized agent for use in the state income tax levy program and in the electronic federal tax payment system. 12. The Arizona commerce authority for its use in: (a) Qualifying renewable energy operations for the tax incentives under section 42-12006. (b) Qualifying businesses with a qualified facility for income tax credits under sections 43-1083.03 and 43-1164.04. (c) Fulfilling its annual reporting responsibility pursuant to section 41-1512, subsections U and V and section 41-1517, subsection L. (d) Certifying computer data centers for tax relief under section 41-1519. (e) ( d ) Certifying applicants for the tax credit for motion picture production costs under sections 43-1082 and 43-1165. 13. A prosecutor for purposes of section 32-1164, subsection C. 14. The office of the state fire marshal for use in determining compliance with and enforcing title 37, chapter 9, article 5. 15. The department of transportation for its use in administering taxes, surcharges and penalties prescribed by title 28. 16. The Arizona health care cost containment system administration for its use in administering nursing facility provider assessments. 17. The department of administration risk management division and the office of the attorney general if the information relates to a claim against this state pursuant to section 12-821.01 involving the department of revenue. 18. Another state agency if the taxpayer authorizes the disclosure of confidential information in writing, including an authorization that is part of an application form or other document submitted to the agency. 19. The department of economic security for its use in determining whether an employer has paid all amounts due under the unemployment insurance program pursuant to title 23, chapter 4. 20. The department of health services for its use in determining the following: (a) Whether a medical marijuana dispensary is in compliance with the tax requirements of chapter 5 of this title for the purposes of section 36-2806, subsection A. (b) Whether a marijuana establishment, marijuana testing facility or dual licensee licensed under title 36, chapter 28.2 is in compliance with the tax obligations under this title or title 43. 21. The Arizona department of agriculture for the purpose of ascertaining compliance with the licensing provisions in title 3. 22. The office of economic opportunity for the purpose of performing the duties and obligations to or on behalf of this state prescribed by title 41, chapter 53. C. Confidential information may be disclosed in any state or federal judicial or administrative proceeding pertaining to tax administration pursuant to the following conditions: 1. One or more of the following circumstances must apply: (a) The taxpayer is a party to the proceeding. (b) The proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of the taxpayer's civil liability, with respect to any tax imposed under this title or title 43. (c) The treatment of an item reflected on the taxpayer's return is directly related to the resolution of an issue in the proceeding. (d) Return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer and directly affects the resolution of an issue in the proceeding. 2. Confidential information may not be disclosed under this subsection if the disclosure is prohibited by section 42-2002, subsection C or D. D. Identity information may be disclosed for purposes of notifying persons entitled to tax refunds if the department is unable to locate the persons after reasonable effort. E. The department, on the request of any person, shall provide the names and addresses of bingo licensees as defined in section 5-401, verify whether or not a person has a privilege license and number, a tobacco product distributor's license and number or a withholding license and number or disclose the information to be posted on the department's website or otherwise publicly accessible pursuant to section 42-1124, subsection F and section 42-3401. F. A department employee, in connection with the official duties relating to any audit, collection activity or civil or criminal investigation, may disclose return information to the extent that disclosure is necessary to obtain information that is not otherwise reasonably available. These official duties include the correct determination of and liability for tax, the amount to be collected or the enforcement of other state tax revenue laws. G. Confidential information relating to transaction privilege tax, use tax, severance tax, jet fuel excise and use tax and any other tax collected by the department on behalf of any jurisdiction may be disclosed to any county, city or town tax official if the information relates to a taxpayer who is or may be taxable by a county, city or town or who may be subject to audit by the department pursuant to section 42-6002. Any taxpayer information that is released by the department to the county, city or town: 1. May be used only for internal purposes, including audits and communication with taxpayers for the purposes of the notice required by section 9-499.15, subsection C. If there is a legitimate business need relating to enforcing laws, regulations and ordinances pursuant to section 9-500.39 or 11-269.17, a county, city or town tax official may redisclose transaction privilege tax information relating to a vacation rental or short-term rental property owner or online lodging operator from the new license report and license update report, subject to the following: (a) The information redisclosed is limited to the following: (i) The transaction privilege tax license number. (ii) The type of organization or ownership of the business. (iii) The legal business name and doing business as name, if different from the legal name. (iv) The business mailing address, tax record physical location address, telephone number, email address and fax number. (v) The date the business started in this state, the business description and the North American industry classification system code. (vi) The name, address and telephone number for each owner, partner, corporate officer, member, managing member or official of the employing unit. (b) Redisclosure is limited to nonelected officials in other units within the county, city or town. The information may not be redisclosed to an elected official or the elected official's staff. (c) All redisclosures of confidential information made pursuant to this paragraph are subject to paragraph 2 of this subsection. 2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The county, city or town shall agree in writing with the department that any release of confidential information that violates the confidentiality standards adopted by the department will result in the immediate suspension of any rights of the county, city or town to receive taxpayer information under this subsection. H. The department may disclose st [Text truncated for display. 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