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Council approves IGA with Arizona Department of Revenue to pursue Title 42 reimbursements for Amcor infrastructure
Summary
Peoria approved an intergovernmental agreement with the Arizona Department of Revenue to enable state reimbursement of construction transaction privilege (sales) taxes generated by Amcor’s project under A.R.S. Title 42 provisions; staff emphasized a $200 million statewide cap and a developer backstop in the Amcor development agreement.
The City Council on Nov. 4 approved an intergovernmental agreement (IGA) with the Arizona Department of Revenue to participate in a Title 42 reimbursement program tied to Amcor’s planned manufacturing facility in the Peoria Innovation Corps.
Deputy City Manager Mike Faust and other staff said the statute (Title 42, A.R.S. §42‑5032.02 as described during the presentation) allows jurisdictions to dedicate local construction transaction privilege (sales) tax receipts generated by a qualifying manufacturing project to finance public infrastructure that benefits the facility. The program requires the city to dedicate 100% of its local construction sales tax generated from the construction activity and to have a written agreement describing the projects and funding sources; the state then facilitates reimbursements.
Staff said Amcor’s project qualifies as a large project (presenters cited initial company commitments well over the $500 million construction threshold required in Metro Phoenix areas) and that ADOR would calculate and distribute reimbursements subject to a statewide cap that the presenters identified as $200 million. Faust emphasized the city’s development agreement with Amcor includes a financial "true‑up": 12 months after occupancy the city will certify local tax receipts and state reimbursements and Amcor is contractually obligated to pay any remaining infrastructure delta (the staff cited a $31.3 million infrastructure obligation in the development agreement) so the city is backstopped against a shortfall.
Faust told the council that ADOR has already executed its copy of the IGA template and staff recommended council adopt the resolution approving the agreement; council voted 7‑0 to approve the resolution.
City staff characterized the arrangement as a way to recover state reimbursements that reduce the city's net obligation for infrastructure tied to Amcor while preserving a contractual backstop to protect the city and its finances.
