Arizona House of Representatives Committee on Commerce — Report of Regular Meeting, February 4, 2025 (Fifty-seventh Legislature, First Regular Session)
Summary
This is the report of the regular meeting of the Arizona House of Representatives Committee on Commerce, Fifty-seventh Legislature, First Regular Session, on Tuesday, February 4, 2025. It says the meeting convened at 2:02 P.M. and adjourned at 6:26 P.M. It names Representative Weninger as Chairman and Representative Way as Vice-Chairman. The committee action table lists HB2322 with DPA 10-0-0-0, HB2704 with DPA 8-1-1-0 and HB2450 with DP 6-3-1-0, followed by agenda, roll call vote and bill attachments including HB 2345.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Arizona House of Representatives Committee on Commerce — Report of Regular Meeting, February 4, 2025 (Fifty-seventh Legislature, First Regular Session).”
Original at www.azleg.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/committee-5f349db4c0a09b4d/
, SHA-256 010585c3ffd87cea9c5ae388ab92717cb5830c7dcc75b2f3f6a1609081ba9128.Full text
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
COMMITTEE ON COMMERCE
Report of Regular Meeting
Tuesday, February 4, 2025
House Hearing Room 5 -- 2:00 P.M. OR UPON RECESS OR ADJOURNMENT OF FLOOR
Convened 2:02 P.M.
Adjourned 6:26 P.M. MINUTES RECEIVED
Members Present Members Absent CHIEF CLERK'S OFFICE
Representative Aguilar y / 6/ a 5
Representative Blackman
Representative Cavero
Representative Connolly
Representative Diaz
Representative Hendrix
Representative Villegas
Representative Wilmeth
Representative Way, Vice-Chairman
Representative Weninger, Chairman
Agenda
Original Agenda — Attachment |
Request to Speak
Report — Attachment 2
Committee Attendance
Report — Attachment 3
Committee Action
Bill Action Vote Attachments
HB2322 DPA 10-0-0-0 4,5,6
HB2704 DPA 8-1-1-0 7,8,9
HB2659 DP 10-0-0-0 10,11
HB2047 DP 10-0-0-0 12,13
HB2048 DP 10-0-0-0 14,15
HB2450 DP 6-3-1-0 16,17
HB2629 DP 7-3-0-0 18,19
HB2381 DPA 10-0-0-0 = 20,21,22
HB2068 DP 7-2-1-0 23,24
HB2175 DPA 10-0-0-0 = 25,26,27
HB2110 DPA 10-0-0-0 = 28,29,30
HB2624 DP 10-0-0-0 31,32
HB2370 DP 8-2-0-0 33,34
HB2345 DP 10-0-0-0 35,36
Bike Adour.
Abby Selveg, | CommitteeSecretary
February 5, 2025
(Original attachments on file in the Office of the Chief Clerk; video archives available at http:/Avww.azleg.gov)
COMMITTEE ON COMMERCE
February 4, 2025
Canny’ 2i0Zz peo
Pdica: 6:26 pm
REVISED - 2/03/25 REVISED - 2/03/25 REVISED - 2/03/25
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
REGULAR MEETING AGENDA
COMMITTEE ON COMMERCE
DATE Tuesday, February 4, 2025 ROOM HHR5 TIME 2:00 P.M. or upon recess or
adjournment of Floor
Members of the public may access a livestream of the meeting here:
https://www.azleg.gov/videoplayer/?clientID=636 | 162879& eventID=202502 1007
Members:
Representative Aguilar Representative Diaz Representative Wilmeth
Representative Blackman Representative Hendrix Representative Way, Vice-Chairman
Representative Cavero Representative Villegas Representative Weninger, Chairman
Representative Connolly
Bills Short Title Strike Everything Title
HB2047 judicial appraisal; costs; attorney fees
DF (Kolodin)
COM, RULES
HB2048 sales of securities; definition
DP (Kolodin)
Jo-0-0-0 COM: RULES
HB2068 landlord tenant; assistance animals
_DbP_ (Kupper)
1-2- [- 0 COM, RULES
HB2110 development; adaptive reuse; rezoning; prohibition
(Biasiucci)
COM, RULES
l0-0-0-O
claims; prior authorization; conduct
HB2175 p ;
DPA (Willoughby)
COM, RULES
regulation
COM,RULES
Page 4 of 2 ATTACHMENT |
Bills Short Title Strike Everything Title
HB2322
condominiums; commercial structures; residential
Dd Pp A structures
(Weninger)
10-0°2- com, RULES
HB2345 loan agreements; escrow
_BP (Hendrix)
COM, RULES
10-0-0-O
HB2370 entrance fee; refunds; time frame
DP _ (Gress)
8-2-0 -0. OM: RULES
HB2381 D Pp wage claims; employment practices
(Hernandez A: Garcia, Hernandez C, et al)
COM, RULES
lo-0-0-0
*HB2450 unemployment insurance; benefit amounts
(Carbone: Willoughby, Wilmeth, et al)
£-3-1-0 COM, RULES
HB2624 timeshare salespersons; licensure
_DP (Weninger)
COM, RULES
lo-0-0-0
merchant; fees; calculation; transactions; penalty
HB2629
DP (Weninger)
12 6-0 COM, RULES
HB2659 transfer to minors; age increase
_DP (Carter N)
COM, RULES
|0-0-0 =O
HB2704 D p p tax; distribution; county stadium district
(Weninger: Carbone, Carter N, et al)
COM, RULES
$-1-1-0
* On previous agenda
ORDER OF BILLS TO BE SET BY THE CHAIRMAN
VC
04292025
02/03/2025
People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or
assistance with physical accessibility. If you require accommodations, please contact the Chief Clerk's Office at
(602) 926-3032 or through Arizona Relay Service 7-1-1.
Page 2 of 2
Information Registered on the Request to Speak System
House Commerce (2/4/2025)
HB2047, judicial appraisal; costs: attorney fees
HB2048, sales of securities; definition
Oppose:
Rachel Walden, representing self
HB2068, landlord tenant; assistance animals
Testified in support:
Mark Zinman, representing self; Lisa Rosenfeld, representing self
Testified as opposed:
Drew Schaffer, WM E MORRIS INSTITUTE FOR JUSTICE
Support:
Susan Brenton, AZ Association Of RV Parks & Campgrounds, MANUFACTURED HOUSING COMMUNITIES OF AZ INC;
Courtney Gilstrap LeVinus, Arizona Multihousing Association
Oppose:
April Reed, Ability360; Cheyenne Walsh, ARIZONA PARTNERSHIP FOR PEOPLE AND PETS (APPP)
HB2110, development; adaptive reuse; rezoning; prohibition
Testified in support:
Courtney Gilstrap LeVinus, Arizona Multihousing Association
Testified as neutral:
Nick Ponder, City Of Phoenix, LEAGUE OF ARIZONA CITIES & TOWNS
Support:
Mike Huckins, GREATER PHOENIX CHAMBER OF COMMERCE; Mary Evelyn Simpson, representing self; Peter
Asencio, representing self; Wendy Radimer, representing self; Paul Johnson, representing self; Clark Princell,
VALLEY PARTNERSHIP
Oppose:
Dale Wiebusch, "SCOTTSDALE, CITY OF"
ATTACHMENT 2
All Comments:
Mary Evelyn Simpson, Self: YavGOOP pC Support. We have a serious housing shortage. Thhis is awise and
commons sense way to reuse the growing unutilized commercial spaces.; Peter Asencio, Self: | am a PC Captain, AZ
State Committeeman. Here in ARIZONA we have a cost prohibitive housing shortage, We need to make use of
empty buildings and make them live able for our hard working low income people.; Wendy Radimer, Self: | Support
this bill. Wendy Radimer Yavapai County PC; Paul Johnson, Self: | fully support this bill. Arnold Paul Johnson,
Precinct Committeeman, Yavapai County
HB2175, claims; prior authorization; conduct
Testified in support:
Christina Corieri, AZ MEDICAL ASSN
Testified as opposed:
Chad Heinrich, Arizonans For Affordable Health Coverage
Support:
Jessica Rainbow, AMERICAN COLLEGE OF OBSTETRICIANS & GYNECOLOGISTS, ARIZONA ALLIANCE FOR
COMMUNITY HEALTH CENTERS; John Thomas, AZ CHAPTER AMERICAN COLLEGE EMERGENCY PHYSICIANS
(AZACEP); Kathyrn Busby, Arizona Nurses Association; Laura Dearing, The Arizona Academy Of Family Physicians;
Fred Olsen, representing self; William Brian Powley, DDS, representing self; Eve Shapiro, representing self; Daniel
Klemmedson, MD, DDS, representing self; Pete Mellas, representing self; Terrence Yu, representing self; Emily
Rice, MGA Home Health Care; Mary Evelyn Simpson, representing self; Peter Asencio, representing self; Mike
Gardner, COMMUNITY HEALTH SYSTEMS; Brittney Kaufmann, HEALTH SYSTEM ALLIANCE OF ARIZONA; Douglas
Lowden, NORTHERN ARIZONA HEALTHCARE; deana corsa, representing self; Michelle Coldwell, Arizona Council Of
Human Service Providers; Anthony Caputo, representing self; Wendy Radimer, representing self; Paul Johnson,
representing self; Regina Cobb, representing self; Damien Johnson, AZ HOSPITAL & HEALTHCARE ASSN; Brett
Galley, ENVISION HEALTHCARE; Dianne McCallister, AZ PHARMACY ASSOCIATION; Gregory Edmonds, representing
self; Amanda Sheinson, AZ MEDICAL ASSN; Sarah Lee-Davisson, representing self; Dr. Corinna Saldanha,
representing self
Oppose:
Chuck Bassett, Blue Cross Blue Shield Of AZ; Mike Huckins, GREATER PHOENIX CHAMBER OF COMMERCE; Kelsey
Lundy, Pharmaceutical Care Management Association (PCMA)
All Comments:
Mary Evelyn Simpson, Self: YavGOP PC. Suppport. Healthcare providers must have a human review claiams or
prior authorization befire denying. Bans use of Al to categorically deny claims beyond the ones that are specifically
"not covered" services; Peter Asencio, Self: | am a PC Captain, AZ State Committeeman. | would like to know the
reasons for my denial of insurence claims from my health care provider.; deana corsa, Self: PC Prescott; Anthony
Caputo, Self: It is important for healthcare providers to be more accountable when processing claims. Utilizing a
healthcare professional to individually review submitted claims is appropriate and fair.; Wendy Radimer, Self: |
Support this bill. Wendy Radimer Yavapai County PC; Paul Johnson, Self: | fully support this bill. Arnold Paul
Johnson, Precinct Committeeman, Yavapai County; Regina Cobb, Self: Az Dental Associaton; Sarah Lee-Davisson,
Self: this is a great bill, helping patients and doctors make sure that someone has reviewed the case before
denying the prior authorization; Dr. Corinna Saldanha, Self: Al has some role in healthcare but it should NEVER be
the final decision maker when it comes to patient's health; Chuck Bassett, Blue Cross Blue Shield Of AZ: We oppose
HB 2175 and the amendment today, but remain committed to working on the bill. We need to tread carefully so as
not to stifle appropriate uses of technology that can increase efficiency in the healthcare system; Mike Huckins,
GREATER PHOENIX CHAMBER OF COMMERCE: Respectfully opposed at this time.
HB2322, condominiums; commercial structures; residential
structures
Testified in support:
Dennis J Legere, ARIZONA HOMEOWNERS COALITION; Jake Hinman, BROTHER'S TAILORS
Support:
Paige Livingston, representing self
Neutral:
Jason Barraza, Associate Director, ARIZONA ASSOCIATION OF COMMUNITY MANAGERS (AACM); Jeff Sandquist,
ARIZONA ASSOCIATION OF COMMUNITY MANAGERS (AACM)
All Comments:
Dennis J Legere, ARIZONA HOMEOWNERS COALITION: We support this bill but a change is required to protect the
misapplication of this bill by association attorneys. Structures must be stated in the plural to ensure that common
expenses of any residential structure applies to all residential structur; Jeff Sandquist, ARIZONA ASSOCIATION OF
COMMUNITY MANAGERS (AACM): With the amendment
HB2345, loan agreements; escrow
HB2370, entrance fee; refunds; time frame
Testified as opposed:
Don Isaacson, LEADINGAGE ARIZONA
Support:
Brendon Blake, AARP
Oppose:
Marie Isaacson, ARIZONA LEADINGAGE
All Comments:
Brendon Blake, AARP: This bill is supported by AARP's consumer protection goals as stated in our policy book.
HB2381, wage claims; employment practices
Support:
Mary Pradelt, representing self; Craig McDermott, representing self; Dianne Post, AZ NATIONAL ORGANIZATION
FOR WOMEN (NOW), Self; Daniella Smith, Arizona Coalition For Working Families; Sharon Lee, representing self;
Bobbie Howard, representing self; Martha O'Connor, representing self; Kathleen Dubbs, representing self; Nancy
Lecrone Nonini, representing self; Beth Ballmann, representing self; Philip Carman, representing self
Neutral:
L Carpenter, INDUSTRIAL COMMISSION OF AZ
Oppose:
Eve Shapiro, representing self
All Comments:
Beth Ballmann, Self: Benefits workers.; Philip Carman, Self: This will greatly benefit low-wage earners making wage
claims.
HB2450, unemployment insurance; benefit amounts
Testified in support:
Brian Sikma, representing self
Testified as opposed:
Deborah Howard, representing self; Julie Coburn, representing self; Nicholas Mink, representing self; Brenda
Munoz Furnish, William £. Morris Institute For Justice
Neutral:
Melanie Richards, AZ DEPT OF ECONOMIC SECURITY
Oppose:
Blake Lister, Opportunity Arizona; Craig McDermott, representing self; Daniella Smith, Arizona Coalition For
Working Families; Maggie Huntington, representing self; Geraldine Miranda, THE ARIZONA CENTER FOR
ECONOMIC PROGRESS; Delphina Thomas, representing self; Victor Peterson, representing self
All Comments:
Nicholas Mink, Self: Apologies if | cannot be here as | was getting off of work but this is a blatant attempt to steal
money from everyday Arizonans to finance the Arizona GOP's terrible economic and social policies such as the ESA
voucher program. Vote no on this theft
HB2624, timeshare salespersons; licensure
Testified in support:
Don Isaacson, AMERICAN RESORT DEVELOPMENT ASSOCIAITON; James Knupp, AZ DEPT OF REAL ESTATE
Support:
Marie Isaacson, AMERICAN RESORT DEVELOPMENT ASSN
HB2629, merchant: fees; calculation; transactions; penalty
Testified in support:
Chad Heinrich, NATIONAL FEDERATION OF INDEPENDENT BUSINESS; Dan Bogert, AZ RESTAURANT ASSOCIATION;
Josh Ruggiero, representing self; John Drechny, representing self; Tad Peelen, representing self
Testified as opposed:
Wendy Briggs, AMERICAN EXPRESS COMPANY, Arizona Bankers Association; Steven Rauschenberger, representing
self; Karen Roch, representing self; Troy Stang, representing self
Support:
Trish Hart, Arizona Food Marketing Alliance; Reuben Minkus, representing self; Dave Karsten, representing self;
Julie Buchkowski, representing self; Kayla Gatti, representing self; Josh Kinsey, representing self; Shawn Frate,
representing self; Lenora Bateman, representing self; Michelle Ahlmer, ARIZONA RETAILERS ASSOCIATION;
Amanda Gray, Arizona Petroleum Marketers Association; Mike Williams, AZ PETROLEUM MARKETERS ASSN
Oppose:
Paul Hickman, representing self; Susie Stevens, Gowest Credit Union Association ; Jaime Molera, JEMORGAN
CHASE HOLDINGS LLC; John MacDonald, American Airlines; Jeremy Gerlach, AMERICAN EXPRESS COMPANY; Kerry
L. Hayden, UNITED SERVICES AUTOMOBILE ASSN (USAA); Jose Torres, TECHNOLOGY NETWORK AKA TECHNET,
Brooke Parent, Gowest Credit Union Association ; Joe Adamack, representing self
All Comments:
John Drechny, Self: | do want to speak in Committee today
HB2659, transfer to minors; age increase
Oppose:
Barbara Meaney, Electronic Payments Coalition
HB2704, tax; distribution; county stadium district
Testified in support:
Amilyn Pierce, AZ DIAMONDBACKS; Courtney Coolidge, AZ CHAMBER OF COMMERCE, Luis Gonzalez, representing
self; Theodore Myers, representing self; Mike Huckins, GREATER PHOENIX CHAMBER OF COMMERCE, Kim Sabow,
ARIZONA LODGING AND TOURISM ASSOCIATION
Testified as neutral:
AZ Building Trades Council And UA Local 469 Plumbers and Pipefitters, representing self
Testified as opposed:
Kevin McCarthy, ARIZONA TAX RESEARCH ASSOCIATION (ATRA); Joseph Palomino, THE ARIZONA CENTER FOR
ECONOMIC PROGRESS; Margaret Shultz, representing self; Zach Schira, MARICOPA COUNTY
Support:
Jason Barraza, Associate Director, Arizona Diamondbacks; James Hamilton, PHOENIX RACEWAY; Paul Senseman,
Arizona Complete Health; John MacDonald, VISIT PHOENIX; Steve Barclay, BEER & WINE DISTRIBUTORS OF
ARIZONA; Jeremy Gerlach, UNITED DAIRYMEN OF ARIZONA; Shaun Rieve, Arizona Diamondbacks, Self; Josh Stine,
representing self; Adam Goodman, representing self; Edie Lefevre, FOUNDATION FOR BLIND CHILDREN; Ryan
Sullivan, Arizona Diamondbacks; Patrick McDaniel, PHOENIX COMMUNITY ALLIANCE; Clark Princell, VALLEY
PARTNERSHIP; Jason Bell, representing self; Tom Doescher , representing self
Oppose:
Stephen Flaaen, representing self; Tom Dorn, City Of Phoenix; Tom Savage, LEAGUE OF ARIZONA CITIES & TOWNS;
Buffalo Rick Galeener, representing self
All Comments:
Courtney Coolidge, AZ CHAMBER OF COMMERCE: Support; Paul Senseman, Arizona Complete Health: On behalf of
Arizona Tourism and Lodging Association, as well Arizona Complete Health.; Jeremy Gerlach, UNITED DAIRYMEN
OF ARIZONA: .; Shaun Rieve, Arizona Diamondbacks, Self: On Behalf of the Arizona Diamondbacks; Josh Stine, Self:
Boys & Girls Clubs of the Valley; Ryan Sullivan, Arizona Diamondbacks: on behalf of the Arizona Diamondbacks;
Patrick McDaniel, PHOENIX COMMUNITY ALLIANCE: Phoenix Community Alliance supports HB2704. It is vital that
all involved stakeholders come together for collaborative conversations as this legislation advances.; Stephen
Flaaen, Self: The funds used as a result of this bill can be spent in many better areas than on Chase Field. As a
Diamondbacks fan, | would rather pay a higher ticket price to cover stadium maintenance and upgrades than have
tax funds diverted.; Margaret Shultz, Self: | would like to speak at the committee meeting.; Zach Schira, MARICOPA
COUNTY: Maricopa County opposes inclusion of voter approved excise taxes. If removed, resolves concerns.;
Buffalo Rick Galeener, Self: Bad idea! !!!!; AZ Building Trades Council And UA Local 469 Plumbers and Pipefitters,
Self: Public funding should also support the public. PLA for the safety of workers.
HOUSE OF REPRESENTATIVES
Please PRINT Clearly
Committee on ( Ty YOWNepeceg Bill Number {4 Fa) 223? O
Date al —~Y — 25 - . \ sh support ' C1 Oppose QO Neutral
Name R oye Need to Speak? ‘ives ONo
Representing _— Are you a registered lobbyist? VIO
Complete Address Neu ; Caale U/ Dustts ale A ae
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B-mail Address \paebarabYayloR 2:7 _ Phone Number | UGD~(36-04// 0
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Comments:
***ETVE-MINUTE SPEAKING LIMIT***
HOUSE OF REPRESENTATIVES
Please PRINT Clearly
Committeeon “2 Mmnwy C¢ BilNumber 23 / .
Date 02/94/ 2 5 Support Oppose O Neutral
Name CE2SaAV Cara } Need to Speak? KiYes No
Representing WW STCY fates VA doroAre you a registered lobbyist? _Y
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Complete Address
Phone Number ¢o2 746 7UGe
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E-mail Address
Comments:
***FIVE-MINUTE SPEAKING LIMIT#*#
HOUSE OF REPRESENTATIVES
Please PRINT Clearly
Committee on Comer Commerce Bil Number t+ S23 & \
Date OD) 6 a | ys a [1Oppose O Neutral
Name Need to Speak? Faxes O No
Representing LA i Ske YM aks ( ZG pol P Ke you a registered lobbyist? “
Complete Address A 28AVG) bG/ 2cthooecr Ol ce pe
E-mail Address Cesoy C )e Cbdeo wor oP hone Number 692 746 Tre
Comments:
**=FIVE-MINUTE SPEAKING LIMIT#*#*
ARIZONA STATE LEGISLATURE
Fifty-seventh Legislature - First Regular Session
COMMITTEE ATTENDANCE RECORD
COMMITTEE ON COMMERCE
CHAIRMAN: Jeff Weninger VICE-CHAIRMAN: _ Michael Way
DATE 01/14/25 1/23/25 2/4 125 125 125
CONVENED 2707P™|2705PM| Zog pm m m
RECESSED
RECONVENED
ADIEMSNED S:lOpm| 410 pm| 0:26pm
/
MEMBERS
Aguilar ff A if
Blackman ye V~ ral
Cavero gf ot a
Connolly ye a ye
Diaz oe ~ PA
Hendrix i | of |
Villegas we oe a”
Wilmeth we | af |
Way, Vice-Chairman we of” A
Weninger, Chairman vA a ~~
¥ Present --- Absent exc Excused
ATTACHMENT 3
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
HB 2322: condominiums; commercial structures; residential structures
Sponsor: Representative Weninger, LD 13
Committee on Commerce
Overview
Provides requirements for the allocation of common expenses for condominiums that include
commercial structures that are separate from residential structures.
History
A condominium association imposes an assessment on each unit owner to defray the cost of
common expenses. Common expenses are expenditures made by or financial liabilities of the
association. Generally, common expenses include costs for maintaining, repairing and
replacing the common elements of the community. Statute dictates that any common expense
associated with the maintenance, repair or replacement of a limited common element to be
equally assess against the units to which the limited common element is assigned and a
common expense benefitting fewer than all of the units to be assessed exclusively against the
units benefitted (Title 33, Chapter 9, A.R.S.)
Provisions
1. Stipulates, for condominiums that include a commercial structure that is separate from
a residential structure, all the following apply:
a) any common expense or portion of a common expense that exclusively benefits the
commercial structure must be assessed exclusively against the units in the
commercial structure;
b) any common expense or portion of a common expense that exclusively benefits the
residential structure must be assessed exclusively against the units in the residential
structure;
c) any common expense or portion of a common expense that exclusively benefits both
the commercial and the residential structures must be assessed in proportion to the
structures benefitted on a pro rata basis.
d) In any dispute over the allocation of a common expense or portion of a common
expense, the association bears the burden of proving that it is in compliance with
allocation requirements of assessing common expenses. (Sec. 1)
2. Defines pertinent terms. (Sec. 1)
Makes technical changes. (Sec. 1)
4, Applies the allocation of common expense assessment requirements to condominiums
existing after the effective date. (Sec. 2)
DC Prop 105 (45 votes) C Prop 108 (40 votes) © Emergency (40 votes) O Fiscal Note
HB 2322
Initials PB Page 1 Commerce
ATTACHMENT 4
Fifty-seventh Legislature Commerce
First Regular Session H.B. 2322
PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2322
(Reference to printed bill)
Amendment instruction key:
[GREEN UNDERLINING IN BRACKETS] indicates text added to statute or
previously enacted session law.
[Green underlining in brackets] indicates text added to new session law
or text restoring existing law.
LGREEN-STFREKEOUT-HH-BRACKETFS] indicates new text removed from statute
or previously enacted session law.
(Green—str7keout—irbrackets] indicates text removed from existing statute,
previously enacted session law or new session law.
<<Green carets>> indicate a section added to the bill.
<<Green—strtkeout—itr-carets>> indicates a section removed from the bill.
The bill as proposed to be amended is reprinted as follows:
Section 1. Section 33-1255, Arizona Revised Statutes, is amended to
read:
33-1255. Assessments for common expenses; commercial
structures; applicability; definitions
A. Until the association makes a common expense assessment, the
declarant shall pay all common expenses. After any assessment has been
made by the association, assessments shall be made at least annually,
9 based on a budget adopted at least annually by the association.
10 B. Except for assessments under subsections C, D, E, amt F AND H of
11 this section, all common expenses shall be assessed against all the units
12 in accordance with the allocations set forth in the declaration pursuant
13 to section 33-1217, subsection A. Any past due common expense assessment
14 or installment bears interest at the rate established by the board subject
15 to the condominium documents.
ON anf wn re
16 C. Unless otherwise provided for in the declaration, all of the
17 following apply:
18 1. Any common expense associated with the maintenance, repair or
19 replacement of a limited common element shall be equally assessed against
20 the units to which the limited common element is assigned.
21 2. Any common expense or portion of a common expense benefitting
22 fewer than all of the units shall be assessed exclusively against the
23 units benefitted.
24 D. Assessments to pay a judgment against the association may be
25 made only against the units in the condominium at the time the judgment
26 was entered, in proportion to their common expense liabilities.
ATTACHMENT 5
House Amendments to H.B. 2322
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E. If any common expense is caused by the misconduct of any unit
owner, the association may assess that expense exclusively against that
unit.
F. If the declaration so provides, the common expense assessment
for any unit on which construction has not been substantially completed
may be an amount which THAT is tnot—tess—ttan AT LEAST twenty-five per—cent
PERCENT of the common expense assessment for units wich THAT have been
substantially completed. However, this reduced common expense assessment
shall not be permitted> ALLOWED unless the declarant is obligated under
the declaration to pay to the association any deficiency in monies due to
the declarant having paid a reduced common assessment and necessary for
the association to be able to timely pay all common expenses.
G. If common expense liabilities are reallocated, common expense
assessments and any installment on the assessments not yet due shall be
recalculated in accordance with the reallocated common- expense
liabilities.
H. NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS, IF A
CONDOMINIUM INCLUDES [A] [ONE OR MORE] COMMERCIAL [STRUCTURE] [STRUCTURES]
THAT [4S] [ARE] SEPARATE FROM [A] [ONE OR MORE] RESIDENTIAL [SFRUETURE]
[STRUCTURES], ALL OF THE FOLLOWING APPLY:
1. ANY COMMON EXPENSE OR PORTION OF A COMMON EXPENSE’ THAT
EXCLUSIVELY BENEFITS THE COMMERCIAL [SFRUEFURE] [STRUCTURES] SHALL BE
ASSESSED EXCLUSIVELY AGAINST THE UNITS IN THE COMMERCIAL [SFRUETURE]
[STRUCTURES], WHETHER ASSESSED IN A GENERAL ASSESSMENT OR SPECIAL
ASSESSMENT OR OTHERWISE.
2. ANY COMMON EXPENSE OR PORTION OF A _ COMMON EXPENSE THAT
EXCLUSIVELY BENEFITS THE RESIDENTIAL [STRUCTURE] [STRUCTURES] SHALL BE
ASSESSED EXCLUSIVELY AGAINST THE UNITS IN THE RESIDENTIAL [STRUETHRE]
[STRUCTURES], WHETHER ASSESSED IN A GENERAL ASSESSMENT OR SPECIAL
ASSESSMENT OR OTHERWISE.
3. ANY COMMON EXPENSE OR PORTION OF A COMMON EXPENSE THAT BENEFITS
BOTH THE COMMERCIAL [SFRUETURE] [STRUCTURES] AND THE RESIDENTIAL
[SFRUECFORE] [STRUCTURES] SHALL BE ASSESSED IN PROPORTION TO THE [CATEGORY
OF THE] STRUCTURES BENEFITTED, WHETHER ASSESSED IN A GENERAL ASSESSMENT OR
SPECIAL ASSESSMENT OR OTHERWISE. THE PROPORTIONAL SHARE OF THE COMMON
EXPENSES THAT BENEFIT THE COMMERCIAL [SFRUEFURE] [STRUCTURES] SHALL
THEREAFTER BE ASSESSED AGAINST THE UNITS IN THE COMMERCIAL [SFRUECTURE]
[STRUCTURES] ON A PRO RATA BASIS, AND THE PROPORTIONAL SHARE OF THE COMMON
EXPENSES THAT BENEFIT THE RESIDENTIAL [SFRUEFURE] [STRUCTURES] SHALL
THEREAFTER BE ASSESSED AGAINST THE UNITS IN THE RESIDENTIAL [STRUETFERE]
[STRUCTURES] ON A PRO RATA BASIS.
4. IN ANY DISPUTE OVER THE ALLOCATION OF A COMMON EXPENSE OR
PORTION OF A COMMON EXPENSE, THE ASSOCIATION [BEARS—FHE-BURBEN-6F-PROVEING
BY ELEAR ANB EON NETG EV BENE ETAT HAS AEE BEA FEB FE € BON EXPENSE
OR—-PORTFTEON OFA COMMON EXP ENS EF EPA EE PA —- FES—-SECTTON] = [SHALL
MAKE AVAILABLE AS PRESCRIBED BY SECTION 33-1258 ALL RECORDS RELATING TO
THE ASSOCIATION'S ALLOCATION OF A COMMON EXPENSE OR PORTION OF A COMMON
House Amendments to H.B. 2322
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EXPENSE. THE ASSOCIATION MAY NOT WITHHOLD A RECORD BASED ON THE PENDENCY
OF LITIGATION RELATING TO THE ALLOCATION OF A COMMON EXPENSE OR PORTION OF
A COMMON EXPENSE IF THE RECORD WOULD OTHERWISE BE AVAILABLE TO A UNIT
OWNER UNDER SECTION 33-1258].
H> I. This section does not apply to timeshare plans-' or
associations that are subject to chapter 20 of this title.
J. FOR PURPOSES OF THIS SECTION:
1. "COMMERCIAL STRUCTURE" MEANS A STRUCTURE IN WHICH A MAJORITY OF
THE UNITS ARE DESIGNATED FOR COMMERCIAL OR WORK PURPOSES AND IS SEPARATE
FROM A RESIDENTIAL STRUCTURE IF NO RESIDENTIAL UNITS ARE LOCATED ON TOP OF
OR BELOW THE COMMERCIAL STRUCTURE.
2. "COMMON EXPENSES" HAS THE SAME MEANING PRESCRIBED IN SECTION
33-1202.
3. “RESIDENTIAL STRUCTURE" MEANS A STRUCTURE IN WHICH A MAJORITY OF
THE UNITS ARE DESIGNATED FOR RESIDENTIAL PURPOSES.
Sec. 2. Applicability
Section 33-1255, Arizona Revised Statutes, as amended by this act,
applies to any condominium existing on or after the effective date of this
act.
Enroll and engross to conform
Amend title to conform
JEFF WENINGER
2322WENINGER. docx
02/03/2025
12:52 PM
C: MR
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. HB 2322
DATE February 04, 2025 MOTION: i yf A
PASS AYE NAY PRESENT | ABSENT
Aguilar
Blackman
Cavero
Connolly -
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
KAKAKAAARA (A
Weninger, Chairman
SN
oO |0O S}
—
APPROVED: some SEQRETARY
‘JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT. i
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
re
HB 2704: tax; distribution; county stadium district
Sponsor: Representative Weninger, LD 138
Committee on Commerce
Overview
Creates a funding mechanism for reconstructing,
improving the Major League Baseball facility owned an
District.
equipping, repairing, maintaining or
d operated by the County Stadium
History
The Maricopa County Stadium District was formed in accordance with A.R.S. § 48-4202(A)
through action of the Maricopa County Board of Supervisors in September 1991. The Stadium
District owns Chase Field, home of the Arizona Diamondbacks.
Provisions
1. Requires, beg
taxes collected from professional baseball athletes to the C
deposit into the County Stadium District Fund. (Sec. 2)
2. Requires the State Treasurer, beginning October 1, 2025, to transfer the applicable
transaction privilege tax (TPT) revenues to the County Stadium District for deposit into
the County Stadium District Fund. (Sec. 6)
3. States the applicable TPT revenues will be derived from persons conducting business
under the retail, amusement, restaurant and prime contracting classifications at, or with
respect to events at the Major League Baseball facility that is owned or operated by the
County Stadium District. (Sec. 6)
4, Requires, beginning October 1, 2025, Arizona Department of Revenue (DOR) to
separately account for revenues collected under the retail classification from businesses
selling tangible personal property on the premises of a Major League Baseball facility
that is owned or operated by the County Stadium District. (Sec. 7)
5. Requires, beginning October 1, 2025, DOR to separately account for revenues collected
under the amusement classification from the sales of admissions to a Major League
Baseball facility that is owned or operated by the County Stadium District. (Sec. 8)
6. Requires, beginning October 1, 2025, DOR to separately account for revenues collected
under the restaurant classification from businesses operating restaurants, dining rooms,
lunchrooms, lunch stands, soda fountains, catering services or similar establishments on
the premises of a Major League Baseball facility that is owned or operated by the County
Stadium District. (Sec. 9)
inning July 1, 2026, the State Treasurer to transfer the applicable income
ounty Stadium District for
DO Prop 105 (45 votes) O Prop 108 (40 votes) O Emergency (40 votes) CO Fiscal Note
HB 2704
Commerce
Initials VP Page 1
ATTACHMENT ‘J
10.
At.
12.
13.
14.
15.
16.
17.
18.
19.
Initials VP Page 2
Requires, beginning October 1, 2025, DOR to separately account for revenues collected
e contracting classification from any prime contractor engaged in the
ments that are for the benefit of a
d by the County Stadium District.
under the prim
construction of any buildings and associated improve
Major League Baseball facility that is owned or operate
(Sec. 10)
Requires, beginning October 1, 2
similar taxes and fees to the County Stadium District for deposit into th
District Fund. (Sec. 12)
States the applicable city or town TPT or similar taxes and fees will be derived from
persons selling tangible personal property at retail, operating as an amusement or similar
specified activities, operating as a restaurant or similar specified establishment and
prime contracting at, or with respect to events at the Major League Baseball facility that
is owned or operated by the County Stadium District. (Sec. 12)
Requires, beginning January 1, 2026, DOR to separately account for these city or town
collected revenues. (Sec. 12)
October 1, 2025, a county to transmit the applicable county excise
he County Stadium
025, a city or town to transmit the applicable TPT or
e County Stadium
Requires, beginning
taxes collected to the County Stadium District for deposit into t
District Fund. (Sec. 13)
States the applicable county excise taxes collected will be derived from persons selling
tangible personal property at retail, operating as an amusement or similar specified
activities, operating as a restaurant or similar specified establishment and prime
contracting at, or with respect to events at the Major League Baseball facility that is
owned or operated by the County Stadium District. (Sec. 18)
Requires, beginning January 1, 2026, DOR to separately account for these county excise
tax revenues. (Sec. 13)
Includes the income tax amount reported to DOR by a professional baseball franchise
organization when determining net proceeds of the state income taxes for the year. (Sec.
14)
Requires a professional baseball franchise organization that is domiciled in AZ to provide
DOR the federal taxpayer identification number for each resident and nonresident
employee of the organization who provided services in this state for the organization. (Sec.
15)
Requires DOR, on or before March 31 of each year, to separately account for and report
to the State Treasurer as an aggregate amount the total net income tax revenues collected
on all income from an AZ professional baseball franchise organization and its resident
and nonresident employees domiciled in AZ during the preceding year. (Sec. 15)
Defines professional baseball franchise organization. (Sec. 15)
Requires that the applicable state TPT, city, town and county excise taxes, and income
taxes transmitted to the county stadium district fund be used only for reconstructing,
equipping, repairing, maintaining or improving the Major League Baseball facility owned
and operated by the County Stadium District. (Sec. 16)
Contains technical and conforming changes.
HB 2704
Commerce
Fifty-seventh Legislature Commerce
First Regular Session H.B. 2704
PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2704
(Reference to printed bill)
Amendment instruction key:
(GREEN UNDERLINING IN BRACKETS] indicates text added to statute or
previously enacted session law.
[Green underlining in brackets] indicates text added to new session law
or text restoring existing law.
[GREEN-STREKEOUTF-FI- BRACKETS] indicates new text removed from statute
or previously enacted session law.
[Green—strikevut—nr-brackets] indicates text removed from existing statute,
previously enacted session law or new session law.
<<Green carets>> indicate a section added to the bill.
<<Green—strtkeoutnhr-carets>> indicates a section removed from the bill.
The bill as proposed to be amended is reprinted as follows:
Section 1. Section 28-2154.01, Arizona Revised Statutes, is amended
to read:
28-2154.01. Special ninety day nonresident registration
permits; procedures
A. A dealer or an authorized third party that issues a special
ninety day nonresident registration permit pursuant to section 28-2154
shall send an electronic record of the permit to the department through an
authorized third party or through the department's authorized third-party
electronic service provider.
B. The department, an authorized third party or a dealer shall not:
1. Issue, assign or deliver a special ninety day nonresident
registration permit to any person unless the person does all of the
following:
(a) Obtains the special ninety day nonresident registration permit
pursuant to section 28-2154.
(b) Completes an affidavit in a form prescribed by the director
pursuant to section 28-2154 or completes a form prescribed by section
42-5009, subsection H.
(c) Presents to the department, authorized third party or motor
vehicle dealer a current valid driver license issued by another state
indicating an address outside of this state.
(d) Provides any other information reasonably and _ uniformly
required by the department of transportation pursuant to section 28-2154
or the department of revenue pursuant to section 42-5009, subsection H.
2. Issue and affix, as prescribed in subsection C of this section,
a special ninety day nonresident registration permit unless the permit is
recorded in the electronic records of the department.
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C. A person who issues a_ special ninety day nonresident
registration permit shall affix or insert, clearly and indelibly, on the
face of each permit the dates of issuance and expiration and the make and
vehicle identification number of the vehicle. The special ninety day
nonresident registration permit shall not bear the name or address of the
person who purchased the vehicle in a position that is legible from
outside of the vehicle.
D. A dealer or authorized third party who issues a special ninety
day nonresident registration permit shall maintain a record, in a form
prescribed by the director, of all special ninety day nonresident
registration permits issued by the dealer or authorized third party and a
record of other information pertaining to the issuance of special ninety
day nonresident registration permits that the department of transportation
or the department of revenue requires.
E. The dealer or authorized third party shall keep each record for
at least three years after the date of entry of the record.
F. A dealer or authorized third party shall allow the director of
the department of transportation or the director of the department of
revenue full and free access to the records during regular business hours.
G. The electronic record is written notice of the removal of the
vehicle from this state for use in the purchaser's state of residence and
relieves the dealer or authorized third party of liability in accordance
with the requirements of section 42-5009.
H. If a purchaser registers the vehicle in this state within three
hundred sixty-five days after the issuance of the special ninety day
nonresident registration permit, the purchaser is liable in an amount
equal to any tax, penalty and interest that the motor vehicle dealer or
authorized third party would have been required to pay under title 42,
chapter 5 and under articles IV and VI of the model city tax code as
defined in section 42-6051. At the time of issuing the special ninety day
nonresident registration permit, a motor vehicle dealer or authorized
third party shall inform the purchaser in writing of the purchaser's
liability described in this section. Subsequent registration or use of
the vehicle in this state does not create a cause of action against a
dealer or authorized third party that complies with section 28-2154,
subsection A, this section and section 42-5009, subsection H.
I. The department of transportation and the department of revenue
shall jointly develop and prescribe forms for the motor vehicle dealer,
the authorized third party and the purchaser to complete for the proper
administration and enforcement of this section.
J. Compliance with this section and section 28-2154 allows delivery
of the vehicle to a nonresident purchaser in this state and retains the
applicable deductions pursuant to section 42-5061, subsection A, paragraph
28 and subsection t \V.
Sec. 2. Section 42-1116, Arizona Revised Statutes, is amended to
read:
42-1116. Disposition of tax revenues
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A. The department of revenue shall promptly deposit, pursuant to
sections 35-146 and 35-147, all monies it collects from the _ taxes
administered pursuant to this article except the telecommunication
services excise tax, separately accounting for each type of tax and each
tax classification within each type of tax. At the same time the
department of revenue shall also furnish copies of the transmittal
schedules to the director of the department of administration.
B. Except as provided by stbsecttom SUBSECTIONS C AND D of this
section, the department shall deposit all monies and remittances received
under this section to the credit of the following specific funds and
accounts:
1. Amounts sufficient to meet the requirements for tax refunds to
the tax refund account established by section 42-1117.
2. Amounts sufficient to meet the requirements of urban revenue
sharing to the urban revenue sharing fund established by section 43-206.
3. Amounts collected pursuant to chapter 5, articles 1 and 5 of
this title to the transaction privilege and severance tax clearing account
established by section 42-5029.
4. Amounts sufficient to meet the requirements of section 42-3104
to the corrections fund.
5. Amounts sufficient to meet the requirements of section 49-282,
subsection B relating to the water quality assurance revolving fund.
6. All remaining monies to the state general fund.
C. From the monies and remittances received under this section,
each month beginning July 2001 the state treasurer shall transmit to the
tourism and sports authority, established by title 5, chapter 8, for
deposit in its facility revenue clearing account established by section
5-834 one-twelfth of the amount reported by the department pursuant to
section 43-209.
D. FROM THE MONIES AND REMITTANCES RECEIVED UNDER THIS SECTION,
EACH YEAR BEGINNING JULY 1, 2026, THE STATE TREASURER SHALL TRANSMIT TO
THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26
FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO
SECTION 48-4231 THE AMOUNT REPORTED BY THE DEPARTMENT PURSUANT TO SECTION
43-209, SUBSECTION D FOR THE PRIOR TAXABLE YEAR.
Sec. 3. Section 42-5008.01, Arizona Revised Statutes, is amended to
read:
42-5008.01. Liability for amounts equal to retail transaction
privilege tax due
A. A person that is either a prime contractor subject to tax under
section 42-5075 or a subcontractor working under the control of such a
prime contractor, that purchases tangible personal property, the purchase
price of which was excluded from the tax base under the retail
classification under section 42-5061, subsection A, paragraph 27 or was
excluded from the use tax under section 42-5159, subsection A, paragraph
13, subdivision (g) at the time of purchase, and that incorporates or
fabricates the tangible personal property into a project described in
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section 42-5075, subsection 6 P is liable for an amount equal to any tax
that a seller would have been required to pay under section 42-5061 and
this article as follows:
1. The amount of liability shall be calculated and reported based
on the location of the project and the taxes imposed under this chapter
and chapter 6 of this title.
2. All deductions, exemptions and exclusions for the cost of
tangible personal property provided in section 42-5075 apply to the
tangible personal property incorporated or fabricated into the project.
3. This subsection does not apply to tangible personal property
that is incorporated or fabricated into any project under a contract that
would otherwise be excluded from the tax base under section 42-5075,
without regard to section 42-5075, subsection @& P.
4. The amount of liability shall be reported within the reporting
period that includes the month in which the person incorporates or
fabricates the tangible personal property into the project.
5. The person is not liable for the amount if the contractor who
hired the person executes and provides to the person a certificate stating
that the contractor providing the certificate is liable for any amount due
under this subsection. The department shall prescribe the form of the
certificate. If the person has reason to believe that the information
contained on the certificate is erroneous or incomplete, the department
may disregard the certificate. The contractor providing the certificate
is liable for the amount that otherwise would be due from the person under
this subsection.
B. A person that purchased tangible personal property, the purchase
price of which was excluded from the tax base under section 42-5061,
subsection A, paragraph 27 or was excluded from the use tax under section
42-5159, subsection A, paragraph 13, subdivision (g) at the time of
purchase, that subsequently cancels its transaction privilege tax license
and that uses, consumes, sells or discards the tangible personal property
is liable for an amount of tax determined under this subsection. For the
purposes of this subsection:
1. If the tangible personal property is incorporated or fabricated
into a project described in section 42-5075, subsection @ P, or otherwise
used or consumed by the person, the amount of liability shall be
calculated and reported based on the person's purchase price of the
tangible personal property, the location of the project, use or
consumption and the taxes imposed under this chapter and chapter 6 of this
title.
2. If the tangible personal property is sold in a manner that is
not subject to tax under this chapter or is discarded, the amount shall be
calculated and reported based on the payment received by the person, the
location of the person's principal place of business in this state and the
taxes imposed under this chapter and chapter 6 of this title.
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3. The person is not liable under this subsection for any amount if
the person discards the tangible personal property and does not receive
payment of any kind.
4. The amount of liability shall be reported on or before the
business day preceding the last business day of the month following the
month in which the person uses the tangible personal property in a manner
described in paragraph 1 or 2 of this subsection. No amount is due under
this subsection at any time that the person stores the tangible personal
property without using it in a manner described in paragraph 1 or 2 of
this subsection.
5. All deductions, exemptions and exclusions for the cost of
tangible personal property provided in section 42-5075 apply to the
tangible personal property incorporated or fabricated into a _ project
described in section 42-5075, subsection @ P.
6. This subsection does not apply to tangible personal property
that is incorporated or fabricated into any project under a contract that
would otherwise be excluded from the tax base under section 42-5075,
without regard to section 42-5075, subsection @- P.
7. The person is not liable for the amount if the contractor who
hired the person executes and provides to the person a certificate stating
that the contractor providing the certificate is liable for any amount due
under this subsection for tangible personal property incorporated or
fabricated into a project described in section 42-5075, subsection @- P.
The department shall prescribe the form of the certificate. If the person
has reason to believe that the information contained on the certificate is
erroneous or incomplete, the department may disregard the certificate.
The contractor providing the certificate is liable for the amount that
otherwise would be due from the person under this subsection.
C. A person that fails to report or pay any amount due under
subsection A or B of this section is liable for interest in a manner
consistent with section 42-1123 and penalties in a manner consistent with
section 42-1125.
D. If a person has paid an amount described in this section on
tangible personal property that the person reasonably believed to be
described IN section 42-5075, subsection 6 P and a final determination is
made that section 42-5075, subsection @ P does not apply, the person is
entitled to an offset for the amount paid under this section against the
amount of tax liability assessed under this chapter and chapter 6 of this
title.
Sec. 4. Section 42-5009, Arizona Revised Statutes, is amended to
read:
42-5009. Certificates establishing deductions; liability for
making false certificate; tax exclusion;
definitions
A. A person who conducts any business classified under article 2 of
this chapter may establish entitlement to the allowable deductions from
the tax base of that business by both:
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1. Marking the invoice for the transaction to indicate that the
gross proceeds of sales or gross income derived from the transaction was
deducted from the tax base.
2. Obtaining a certificate executed by the purchaser indicating the
name and address of the purchaser, the precise nature of the business of
the purchaser, the purpose for which the purchase was made, the necessary
facts to establish the appropriate deduction and the tax license number of
the purchaser to the extent the deduction depends on the purchaser
conducting business classified under article 2 of this chapter and a
certification that the person executing the certificate is authorized to
do so on behalf of the purchaser. The certificate may be disregarded if
the seller has reason to believe that the information contained in the
certificate is not accurate or complete.
B. A person who does not comply with subsection A of this section
may establish entitlement to the deduction by presenting facts necessary
to support the entitlement, but the burden of proof is on that person.
C. The department may prescribe a form for the certificate
described in subsection A of this section. Under such rules as it may
prescribe, the department may also describe transactions with respect to
which a person is not entitled to rely solely on the information contained
in the certificate provided for in subsection A of this section but must
instead obtain such additional information as required by the rules in
order to be entitled to the deduction.
D. If a seller is entitled to a deduction by complying with
subsection A of this section, the department may require the purchaser
that caused the execution of the certificate to establish the accuracy and
completeness of the information required to be contained in the
certificate that would entitle the seller to the deduction. If the
purchaser cannot establish the accuracy and completeness of the
information, the purchaser is liable in an amount equal to any tax,
penalty and interest that the seller would have been required to pay under
this article if the seller had not complied with subsection A of this
section. Payment of the amount under this’ subsection exempts’ the
purchaser from liability for any tax imposed under article 4 of this
chapter. The amount shall be treated as tax revenues collected from the
seller in order to designate the distribution base for purposes of section
42-5029.
E. If a seller is entitled to a deduction by complying with
subsection B of this section, the department may require the purchaser to
establish the accuracy and completeness of the information provided to the
seller that entitled the seller to the deduction. If the purchaser cannot
establish the accuracy and completeness of the information, the purchaser
is liable in an amount equal to any tax, penalty and interest that the
seller would have been required to pay under this article if the seller
had not complied with subsection B of this section. Payment of the amount
under this subsection exempts the purchaser from liability for any tax
imposed under article 4 of this chapter. The amount shall be treated as
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tax revenues collected from the seller in order to designate the
distribution base for purposes of section 42-5029.
F. The department may prescribe a form for a certificate used to
establish entitlement to the deductions described in section 42-5061,
subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3.
Under rules the department may prescribe, the department may also require
additional information for the seller to be entitled to the deduction. If
a seller is entitled to the deductions described in section 42-5061,
subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3,
the department may require the purchaser who executed the certificate to
establish the accuracy and completeness of the information contained in
the certificate that would entitle the seller to the deduction. If the
purchaser cannot establish the accuracy and completeness of the
information, the purchaser is liable in an amount equal to any tax,
penalty and interest that the seller would have been required to pay under
this article. Payment of the amount under this subsection exempts the
purchaser from liability for any tax imposed under article 4 of this
chapter. The amount shall be treated as tax revenues collected from the
seller in order to designate the distribution base for purposes of section
42-5029.
G. If a seller claims a deduction under’ section 42-5061,
subsection A, paragraph 25 and establishes entitlement to the deduction
with an exemption letter that the purchaser received from the department
and the exemption letter was based on a contingent event, the department
may require the purchaser that received the exemption letter to establish
the satisfaction of the contingent event within a reasonable time. If the
purchaser cannot establish the satisfaction of the event, the purchaser is
liable in an amount equal to any tax, penalty and interest that the seller
would have been required to pay under this article if the seller had not
been furnished the exemption letter. Payment of the amount under this
subsection exempts the purchaser from liability for any tax imposed under
article 4 of this chapter. The amount shall be treated as tax revenues
collected from the seller in order to designate the distribution base for
purposes of section 42-5029. For the purposes of this subsection,
"reasonable time" means a time limitation that the department determines
and that does not exceed the time limitations pursuant to section 42-1104.
H. The department shall prescribe forms for certificates used to
establish the satisfaction of the criteria necessary to qualify the sale
of a motor vehicle for the deductions described in section 42-5061,
subsection A, paragraph 14, paragraph 28 and paragraph 44 = and
subsection t- V. Except as provided in subsection J of this section, to
establish entitlement to these deductions, a motor vehicle dealer shall
retain:
1. A valid certificate as prescribed by this subsection completed
by the purchaser and obtained before the issuance of the nonresident
registration permit authorized by section 28-2154.
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2. For the purposes of the deductions provided by section 42-5061,
subsection A, paragraph 14, subdivision (b) and _ section 42-5061,
subsection t- V, a copy of the nonresident registration permit authorized
by section 28-2154.
3. A legible copy of a current valid driver license issued to the
purchaser by another state or foreign country that indicates an address
outside of this state. For the sale of a motor vehicle to a nonresident
entity, the entity's representative must have a current valid driver
license issued by the same jurisdiction as that in which the entity is
located.
4. For the purposes of the deduction provided by section 42-5061,
subsection A, paragraph 14, subdivision (a), a certificate documenting the
delivery of the motor vehicle to an out-of-state location.
I. Notwithstanding subsection A, paragraph 2 of this section, if a
motor vehicle dealer has established entitlement to a deduction by
complying with subsection H of this section, the department may require
the purchaser who executed the certificate to establish the accuracy and
completeness of the information contained in the certificate that entitled
the motor vehicle dealer to the deduction. If the purchaser cannot
establish the accuracy and completeness of the information, the purchaser
is liable in an amount equal to any tax, penalty and interest that the
motor vehicle dealer would have been required to pay under this article
and under articles IV and V of the model city tax code as defined in
section 42-6051. Payment of the amount under this subsection exempts the
purchaser from liability for any tax imposed under article 4 of this
chapter and any tax imposed under article VI of the model city tax code as
defined in section 42-6051. The amount shall be treated as tax revenues
collected from the motor vehicle dealer in order to designate the
distribution base for purposes of section 42-5029.
J. To establish entitlement to the deduction described in section
42-5061, subsection A, paragraph 44, a public consignment auction dealer
as defined in section 28-4301 shall retain a copy of the certificate
prescribed by subsection H of this section for its records.
K. Notwithstanding any other law, compliance with subsection H of
this section by a motor vehicle dealer entitles the motor vehicle dealer
to the exemption provided in section 42-6004, subsection A, paragraph 4.
L. The department shall prescribe a form for a certificate to be
used by a person that is not subject to tax under section 42-5075 when the
person is engaged by a contractor that is subject to tax under section
42-5075 for a project that is taxable under section 42-5075. The
certificate permits the person purchasing tangible personal property to be
incorporated or fabricated by the person into any real property,
structure, project, development or improvement to provide documentation to
a retailer that the sale of tangible personal property qualifies for the
deduction under’ section 42-5061, subsection A, paragraph 27,
subdivision (b). A prime contractor shall obtain the certificate from the
department and shall provide a copy to any such person working on the
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project. The prime contractor shall obtain a new certificate for each
project to which this subsection applies. For the purposes of this
subsection, the following apply:
1. The person that is not subject to tax under section 42-5075 may
use the certificate issued pursuant to this subsection only with respect
to tangible personal property that will be incorporated into a project for
which the gross receipts are subject to tax under section 42-5075.
2. The department shall issue the certificate to the prime
contractor on receiving sufficient documentation to establish that the
prime contractor meets the requirements of this subsection.
3. If any person uses the certificate provided under this
subsection to purchase tangible personal property to be used in a project
that is not subject to tax under section 42-5075, the person is liable in
an amount equal to any tax, penalty and interest that the seller would
have been required to pay under this article if the seller had not
complied with subsection A of this section. Payment of the amount under
this section exempts the person from liability for any tax imposed under
article 4 of this chapter. The amount shall be sourced under section
42-5040, subsection A, paragraph 2.
M. Notwithstanding any other law, compliance with subsection L of
this section by a person that is not subject to tax under section 42-5075
entitles the person to the exemption allowed by’ section 465,
subsection (k) of the model city tax code when purchasing tangible
personal property to be incorporated or fabricated by the person into any
real property, structure, project, development or improvement.
N. The requirements of subsections A and B of this section do not
apply to owners, proprietors or tenants of agricultural lands or farms who
sell livestock or poultry feed that is grown or raised on their lands to
any of the following:
1. Persons who feed their own livestock or poultry.
2. Persons who are engaged in the business of producing livestock
or poultry commercially.
3. Persons who are engaged in the business of feeding livestock or
poultry commercially or who board livestock noncommercially.
0. A vendor who has reason to believe that a certificate prescribed
by this section is not accurate or complete will not be relieved of the
burden of proving entitlement to the exemption. A vendor that accepts a
certificate in good faith will be relieved of the burden of proof and the
purchaser may be required to establish the accuracy of the claimed
exemption. If the purchaser cannot’ establish the accuracy and
completeness of the information provided in the certificate, the purchaser
is liable for an amount equal to the transaction privilege tax, penalty
and interest that the vendor would have been required to pay if the vendor
had not accepted the certificate.
P. Notwithstanding any other law, an online lodging operator, as
defined in section 42-5076, shall be entitled to an exclusion from any
applicable taxes for any online lodging transaction, as defined in section
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42-5076, facilitated by an online lodging marketplace, as defined in
section 42-5076, for which the online lodging operator has obtained from
the online lodging marketplace written notice that the online lodging
marketplace is registered with the department to collect applicable taxes
for all online lodging transactions facilitated by the online lodging
marketplace, and transaction history documenting tax collected by the
online lodging marketplace, pursuant to section 42-5005, subsection L.
Q. The department shall prescribe the form of a certificate to be
used by a person purchasing an aircraft to document eligibility for a
deduction pursuant to section 42-5061, subsection 8B, paragraph 8,
subdivision (a), item (v) or an exemption pursuant to section 42-5159,
subsection B, paragraph 8, subdivision (a), item (v), relating to
aircraft. The person must provide this certificate and documentation
confirming that the operational control of the aircraft has_ been
transferred or will be transferred immediately after the purchase to one
or more persons described in section 42-5061, subsection B, paragraph 8,
subdivision (a), item (i), (ii), (iii) or (iv) or section 42-5159,
subsection B, paragraph 8, subdivision (a), item (i), (ii), (iii) or (iv).
Operational control of the aircraft must be transferred for at least fifty
percent of the aircraft's flight hours. If such operational control is
not transferred for at least fifty percent of the aircraft's flight hours
during the recapture period, the owner of the aircraft is liable for an
amount equal to any tax that the seller or purchaser would have been
required to pay under this chapter at the time of the sale, plus penalty
and interest. The recapture period begins on the date that operational
control of the aircraft is first transferred and ends on the later of the
date the aircraft is fully depreciated for federal income tax purposes or
five years after operational control was first transferred. For the
purposes of this subsection, operational control of the aircraft must be
within the meaning of federal aviation administration operations
specification A008, or its successor, except that:
1. If it is determined that operational control has _ been
transferred for less than fifty percent but more than forty percent of the
aircraft's flight hours, the owner of the aircraft is liable for an amount
equal to any tax that the seller or purchaser would have been required to
pay under this chapter at the time of the sale, plus interest.
2. If the aircraft is sold during the recapture period, the seller
is not liable for the amount determined pursuant to this subsection unless
the operational control of the aircraft had not been transferred for at
least fifty percent of the aircraft's flight hours at the time of the
sale.
R. Notwithstanding any other law, a shared vehicle owner is
entitled to an exclusion from any applicable taxes for a shared vehicle
transaction that is facilitated by a peer-to-peer car sharing program and
for which the peer-to-peer car sharing program has collected and remitted
applicable taxes.
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S. A qualifying community health center, qualifying health care
organization or qualifying hospital or any other entity that is recognized
as nonprofit under section 501(c) of the United States internal revenue
code and that is required to obtain an exemption letter from the
department shall:
1. Apply to the department for the exemption letter and fully
answer any eligibility questions required by the department for the
purposes of the exemption letter. If the department approves’ the
exemption letter application, the exemption letter is valid until the
entity is no longer qualified for the exemption letter.
2. Notify the department in writing if the entity no longer
qualifies for the exemption letter. Regardless of whether the entity
notifies the department as required by this paragraph, if the entity no
longer qualifies for the exemption letter, the entity is liable in an
amount equal to any tax, penalty and interest that the seller would have
been required to pay under this article if the seller had not been
furnished the exemption letter. Payment of the amount under this
paragraph exempts the entity from liability for any tax imposed under
article 4 of this chapter. The amount shall be treated as tax revenues
collected from the seller in order to designate the distribution base for
the purposes of section 42-5029.
T. For the purposes of this section, "peer-to-peer car sharing
program", "shared vehicle owner" and "shared vehicle transaction" have the
same meanings prescribed in section 28-9601.
Sec. 5. Section 42-5029, Arizona Revised Statutes, is amended to
read:
42-5029. Remission and distribution of monies; withholding;
definition
A. The department shall deposit, pursuant to sections 35-146 and
35-147, all revenues collected under this article and articles 4, 5 and 8
of this chapter pursuant to section 42-1116, separately accounting for:
1. Payments of estimated tax under section 42-5014, subsection D.
2. Revenues collected pursuant to section 42-5070.
3. Revenues collected under this article and article 5 of this
chapter from and after June 30, 2000 from sources located on Indian
reservations in this state.
4. Revenues collected pursuant to section 42-5010, subsection G and
section 42-5155, subsection D.
5. Revenues collected pursuant to section 42-5010.01 and section
42-5155, subsection E.
6. Revenues collected pursuant to section 42-5061 from a remote
seller.
B. The department shall credit payments of estimated tax to an
estimated tax clearing account and each month shall transfer all monies in
the estimated tax clearing account to a fund designated as the transaction
privilege and severance tax clearing account. The department shall credit
all other payments to the transaction privilege and severance tax clearing
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account, separately accounting for the monies designated as distribution
base under’ sections 42-5010, 42-5164 and 42-5205. Each month the
department shall report to the state treasurer the amount of monies
collected pursuant to this article and articles 4, 5 and 8 of this
chapter.
C. On notification by the department, the state treasurer shall
distribute the monies deposited in the transaction privilege and severance
tax clearing account in the manner prescribed by this section and by
sections 42-5164 and 42-5205, after deducting warrants drawn against the
account pursuant to sections 42-1118 and 42-1254.
D. Of the monies designated as distribution base, the department
shall:
1. Pay twenty-five percent to the various incorporated
municipalities in this state in proportion to their population to be used
by the municipalities for any municipal purpose, except a municipality
shall use monies paid from revenues separately accounted for pursuant to
subsection A, paragraph 6 of this section and paid pursuant to this
paragraph for public safety before any other municipal purpose.
2. Pay 38.08 percent to the counties in this state by averaging the
following proportions:
(a) The proportion that the population of each county bears to the
total state population.
(b) The proportion that the distribution base monies collected
during the calendar month in each county under this article, section
42-5164, subsection B and section 42-5205, subsection B bear to the total
distribution base monies collected under this article, section 42-5164,
subsection B and section 42-5205, subsection B throughout the state for
the calendar month.
3. Pay an additional 2.43 percent to the counties in this state as
follows:
(a) Average the following proportions:
(i) The proportion that the assessed valuation used to determine
secondary property taxes of each county, after deducting that part of the
assessed valuation that is exempt from taxation at the beginning of the
month for which the amount is to be paid, bears to the total assessed
valuations used to determine secondary property taxes of all the counties
after deducting that portion of the assessed valuations that is exempt
from taxation at the beginning of the month for which the amount is to be
paid. Property of a city or town that is not within or contiguous to the
municipal corporate boundaries and from which water is or may be withdrawn
or diverted and transported for use on other property is considered to be
taxable property in the county for purposes of determining assessed
valuation in the county under this item.
(ii) The proportion that the distribution base monies collected
during the calendar month in each county under this article, section
42-5164, subsection B and section 42-5205, subsection B bear to the total
distribution base monies collected under this article, section 42-5164,
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subsection B and section 42-5205, subsection B throughout this state for
the calendar month.
(b) If the proportion computed under subdivision (a) of this
paragraph for any county is greater than the proportion computed under
paragraph 2 of this subsection, the department shall compute’ the
difference between the amount distributed to that county under paragraph 2
of this subsection and the amount that would have been distributed under
paragraph 2 of this subsection using the proportion computed under
subdivision (a) of this paragraph and shall pay that difference to the
county from the amount available for distribution under this paragraph.
Any monies remaining after all payments under this subdivision shall be
distributed among the counties according to the proportions computed under
paragraph 2 of this subsection.
4. After any distributions required by sections 42-5030,
42-5030.01, 42-5031, 42-5032, 42-5032.01, amd 42-5032.02 AND 42-5032.03
and after making any transfer to the water quality assurance revolving
fund as required by section 49-282, subsection B, credit the remainder of
the monies designated as distribution base to the state’ general
fund. From this amount the legislature shall annually appropriate to:
(a) The department of revenue, sufficient monies to administer and
enforce this article and articles 5 and 8 of this chapter.
(b) The department of economic security, monies to be used for the
purposes stated in title 46, chapter 1.
(c) The firearms safety and ranges fund established by section
17-273, $50,000 derived from the taxes collected from the _ retail
classification pursuant to section 42-5061 for the current fiscal year.
E. If approved by the qualified electors voting at a statewide
general election, all monies collected pursuant to section 42-5010,
subsection G and section 42-5155, subsection D shall be distributed each
fiscal year pursuant to this subsection. The monies distributed pursuant
to this subsection are in addition to any other appropriation, transfer or
other allocation of public or private monies from any other source and
shall not supplant, replace or cause a reduction in other school district,
charter school, university or community college funding sources. The
monies shall be distributed as follows:
1. If there are outstanding state school facilities revenue bonds
pursuant to title 15, chapter 16, article 7, each month one-twelfth of the
amount that is necessary to pay the fiscal year's debt service on
outstanding state school improvement revenue bonds for the current fiscal
year shall be transferred each month to the school improvement revenue
bond debt service fund established by section 15-2084. The total amount
of bonds for which these monies may be allocated for the payment of debt
service shall not exceed a principal amount of eight hundred million
dollars exclusive of refunding bonds and other refinancing obligations.
2. After any transfer of monies pursuant to paragraph 1 of this
subsection, twelve per cent of the remaining monies collected during the
preceding month shall be transferred to the technology and _ research
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initiative fund established by section 15-1648 to be distributed among the
universities for the purpose of investment in technology’ and
research-based initiatives.
3. After the transfer of monies pursuant to paragraph 1 of this
subsection, three per cent of the remaining monies collected during the
preceding month shall be transferred to the workforce development account
established in each community college district pursuant to section 15-1472
for the purpose of investment in workforce development programs.
4, After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, one-twelfth of the amount a community college that is
owned, operated or chartered by a qualifying Indian tribe on its own
Indian reservation would receive pursuant to section 15-1472, subsection
D, paragraph 2 if it were a community college district shall be
distributed each month to the treasurer or other designated depository of
a qualifying Indian tribe. Monies distributed pursuant to this paragraph
are for the exclusive purpose of providing support to one or more
community colleges owned, operated or chartered by a qualifying Indian
tribe and shall be used in a manner consistent with section 15-1472,
subsection B. For the purposes of this paragraph, "qualifying Indian
tribe" has the same meaning as defined in_ section 42-5031.01,
subsection D.
5. After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, one-twelfth of the following amounts shall be transferred
each month to the department of education for the increased cost of basic
state aid under section 15-971 due to added school days and associated
teacher salary increases enacted in 2000:
(a) In fiscal year 2001-2002, $15,305,900.
(b) In fiscal year 2002-2003, $31,530,100.
(c) In fiscal year 2003-2004, $48,727,700.
(d) In fiscal year 2004-2005, $66,957,200.
(e) In fiscal year 2005-2006 and each fiscal year thereafter,
$86,280,500.
6. After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, seven million eight hundred thousand dollars’ is
appropriated each fiscal year, to be paid in monthly installments, to the
department of education to be used for school safety as provided in
section 15-154 and two hundred thousand dollars is appropriated each
fiscal year, to be paid in monthly installments to the department of
education to be used for the character education matching grant program as
provided in section 15-154.01.
7. After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, no more than seven million dollars may be appropriated by
the legislature each fiscal year to the department of education to be used
for accountability purposes as described in section 15-241 and title 15,
chapter 9, article 8.
8. After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, one million five hundred thousand dollars is appropriated
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each fiscal year, to be paid in monthly installments, to the failing
schools tutoring fund established by section 15-241.
9. After transferring monies pursuant to paragraphs 1, 2 and 3 of
this subsection, twenty-five million dollars shall be transferred each
fiscal year to the state general fund to reimburse the general fund for
the cost of the income tax credit allowed by section 43-1072.01.
10. After the payment of monies pursuant to paragraphs 1 through 9
of this subsection, the remaining monies collected during the preceding
month shall be transferred to the classroom site fund established by
section 15-977. The monies shall be allocated as follows in the manner
prescribed by section 15-977:
(a) Forty per cent shall be allocated for teacher compensation
based on performance.
(b) Twenty per cent shall be allocated for increases in teacher
base compensation and employee related expenses.
(c) Forty per cent shall be allocated for maintenance and operation
purposes.
F. The department shall credit the remainder of the monies in the
transaction privilege and severance tax clearing account to the state
general fund, subject to any distribution required by section 42-5030.01.
G. Notwithstanding subsection D of this section, if a court of
competent jurisdiction finally determines that tax monies distributed
under this section were illegally collected under this article or articles
5 and 8 of this chapter and orders the monies to be refunded to the
taxpayer, the department shall compute the amount of such monies that was
distributed to each city, town and county under this section. Each
city's, town's and county's proportionate share of the costs shall be
based on the amount of the original tax payment each municipality and
county received. Each month the state treasurer shall reduce the amount
otherwise distributable to the city, town and county under this section by
1/36 of the total amount to be recovered from the city, town or county
until the total amount has been recovered, but the monthly reduction for
any city, town or county shall not exceed ten percent of the full monthly
distribution to that entity. The reduction shall begin for the first
calendar month after the final disposition of the case and shall continue
until the total amount, including interest and costs, has been recovered.
H. On receiving a certificate of default from the greater Arizona
development authority pursuant to section 41-2257 or 41-2258 and to the
extent not otherwise expressly prohibited by law, the state treasurer
shall withhold from the next succeeding distribution of monies pursuant to
this section due to the defaulting political subdivision the amount
specified in the certificate of default and immediately deposit the amount
withheld in the greater Arizona development authority revolving fund. The
state treasurer shall continue to withhold and deposit the monies until
the greater Arizona development authority certifies to the state treasurer
that the default has been cured. In no event may the state treasurer
withhold any amount that the defaulting political subdivision certifies to
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the state treasurer and the authority as being necessary to make any
required deposits then due for the payment of principal and interest on
bonds of the political subdivision that were issued before the date of the
loan repayment agreement or bonds and that have been secured by a pledge
of distributions made pursuant to this section.
I. Except as provided by sections 42-5033 and 42-5033.01, the
population of a county, city or town as determined by the most recent
United States decennial census plus any revisions to the decennial census
certified by the United States bureau of the census shall be used as the
basis for apportioning monies pursuant to subsection D of this section.
J. Except as otherwise provided by this subsection, on notice from
the department of revenue pursuant to section 42-6010, subsection B, the
state treasurer shall withhold from the distribution of monies pursuant to
this section to the affected city or town the amount of the penalty for
business location municipal tax incentives provided by the city or town to
a business entity that locates a retail business facility in the city or
town. The state treasurer shall continue to withhold monies pursuant to
this subsection until the entire amount of the penalty has been withheld.
The state treasurer shall credit any monies withheld pursuant to this
subsection to the state general fund as provided by subsection D,
paragraph 4 of this section. The state treasurer shall not withhold any
amount that the city or town certifies to the department of revenue and
the state treasurer as being necessary to make any required deposits or
payments for debt service on bonds or other long-term obligations of the
city or town that were issued or incurred before the location incentives
provided by the city or town.
K. On notice from the auditor general pursuant to section 9-626,
subsection D, the state treasurer shall withhold from the distribution of
monies pursuant to this section to the affected city the amount computed
pursuant to section 9-626, subsection D. The state treasurer’ shall
continue to withhold monies pursuant to this subsection until the entire
amount specified in the notice has been withheld. The state treasurer
shall credit any monies withheld pursuant to this subsection to the state
general fund as provided by subsection D, paragraph 4 of this section.
L. Except as otherwise provided by this subsection, on notice from
the attorney general pursuant to section 41-194.01, subsection B,
paragraph 1 that an ordinance, regulation, order or other official action
adopted or taken by the governing body of a county, city or town violates
state law or the Constitution of Arizona, the state treasurer shall
withhold the distribution of monies pursuant to this section to the
affected county, city or town and shall continue to withhold monies
pursuant to this subsection until the attorney general certifies to the
state treasurer that the violation has been resolved. The state treasurer
shall redistribute the monies withheld pursuant to this subsection among
all other counties, cities and towns in proportion to their population as
provided by subsection D of this section. The state treasurer shall not
withhold any amount that the county, city or town certifies to the
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attorney general and the state treasurer as being necessary to make any
required deposits or payments for debt service on bonds or other long-term
obligations of the county, city or town that were issued or incurred
before committing the violation.
M. For the purposes of this section, “community college district”
means a community college district that is established pursuant to
sections 15-1402 and 15-1403 and that is a political subdivision of this
state and, unless otherwise specified, includes a community college
tuition financing district established pursuant to section 15-1409.
Sec. 6. Title 42, chapter 5, article 1, Arizona Revised Statutes,
is amended by adding section 42-5032.03, to read:
42-5032.03. Distribution of revenue for county stadium
district
A. BEGINNING OCTOBER 1, 2025 AND EACH MONTH THEREAFTER, THE STATE
TREASURER SHALL TRANSMIT, FROM THE AMOUNT DESIGNATED AS DISTRIBUTION BASE
PURSUANT TO SECTION 42-5029, SUBSECTION D, THE AMOUNT DETERMINED UNDER
SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED
PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM
DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.
B. THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION
IS THE TOTAL AMOUNT OF STATE TRANSACTION PRIVILEGE TAX REVENUES RECEIVED
FROM PERSONS CONDUCTING BUSINESS UNDER THE RETAIL, AMUSEMENT, RESTAURANT
AND PRIME CONTRACTING CLASSIFICATIONS AT, OR WITH RESPECT TO EVENTS HELD
AT, A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED AND OPERATED BY A
COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26.
Sec. 7. Section 42-5061, Arizona Revised Statutes, is amended to
read:
42-5061. Retail classification; definitions
A. The retail classification is comprised of the business of
selling tangible personal property at retail. The tax base for the retail
classification is the gross proceeds of sales or gross income derived from
the business. The tax imposed on the retail classification does not apply
to the gross proceeds of sales or gross income from:
1. Professional or personal service occupations or businesses that
involve sales or transfers of tangible personal property only as
inconsequential elements.
2. Services rendered in addition to selling tangible personal
property at retail.
3. Sales of warranty or service contracts. The storage, use or
consumption of tangible personal property provided under the conditions of
such contracts is subject to tax under section 42-5156.
4. Sales of tangible personal property by any nonprofit
organization organized and operated exclusively for charitable purposes
and recognized by the United States internal revenue service under section
501(c)(3) of the internal revenue code.
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5. Sales to persons engaged in business classified under’ the
restaurant classification of articles used by human beings for food, drink
or condiment, whether simple, mixed or compounded.
6. Business activity that is properly included in any other
business classification that is taxable under this article.
7. The sale of stocks and bonds.
8. Drugs and medical oxygen, including delivery hose, mask or tent,
regulator and tank, if prescribed by a member of the medical, dental or
veterinarian profession who is licensed by law to administer such
substances.
9. Prosthetic appliances as defined in section 23-501 and as
prescribed or recommended by a_ health professional who is’ licensed
pursuant to title 32, chapter 7, 8, 11, 13, 14, 15, 16, 17 or 29.
10. Insulin, insulin syringes and glucose test strips.
11. Prescription eyeglasses or contact lenses.
12. Hearing aids as defined in section 36-1901.
13. Durable medical equipment that has a centers for medicare and
medicaid services common procedure code, is designated reimbursable by
medicare, is prescribed by a person who is licensed under title 32,
chapter 7, 8, 13, 14, 15, 17 or 29, can withstand repeated use, is
primarily and customarily used to serve a medical purpose, is generally
not useful to a person in the absence of illness or injury and is
appropriate for use in the home.
14. Sales of motor vehicles to nonresidents of this state for use
outside this state if either of the following applies:
(a) The motor vehicle dealer ships or delivers the motor vehicle to
a destination out of this state.
(b) The vehicle, trailer or semitrailer has a gross vehicle weight
rating of more than ten thousand pounds, is used or maintained to
transport property in the furtherance of interstate commerce and otherwise
meets the definition of commercial motor vehicle as defined in section
28-5201.
15. Food, as provided in and subject to the conditions of article 3
of this chapter and sections 42-5074 and 42-6017.
16. Items purchased with United States department of agriculture
coupons issued under the supplemental nutrition assistance program
pursuant to the food and nutrition act of 2008 (P.L. 88-525; 78 Stat. 703;
7 United States Code sections 2011 through 2036b) by the United States
department of agriculture food and nutrition service or food instruments
issued under section 17 of the child nutrition act (P.L. 95-627;
92 Stat. 3603; P.L. 99-661, section 4302; P.L. 111-296; 42 United States
Code section 1786).
17. Textbooks by any bookstore that are required by any state
university or community college.
18. Food and drink to a person that is engaged in a business that
is classified under the restaurant classification and that provides such
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food and drink without monetary charge to its employees for their own
consumption on the premises during the employees' hours of employment.
19. Articles of food, drink or condiment and accessory tangible
personal property to a school district or charter school if such articles
and accessory tangible personal property are to be prepared and served to
persons for consumption on the premises of a public school within the
district or on the premises of the charter school during school hours.
20. Lottery tickets or shares pursuant to title 5, chapter 5.1,
article l.
21. The sale of cash equivalents and the sale of precious metal
bullion and monetized bullion to the ultimate consumer, but the sale of
coins or other forms of money for manufacture into jewelry or works of art
is subject to the tax and the gross proceeds of sales or gross income
derived from the redemption of any cash equivalent by the holder as a
means of payment for goods or services that are taxable under this article
is subject to the tax. For the purposes of this paragraph:
(a) "Cash equivalents" means items or intangibles, whether or not
negotiable, that are sold to one or more persons, through which a value
denominated in money is purchased in advance and may be redeemed in full
or in part for tangible personal property, intangibles or services. Cash
equivalents include gift cards, stored value cards, gift certificates,
vouchers, traveler's checks, money orders or other instruments, orders or
electronic mechanisms, such as an electronic code, personal identification
number or digital payment mechanism, or any other prepaid intangible right
to acquire tangible personal property, intangibles or services in the
future, whether from the seller of the cash equivalent or from another
person. Cash equivalents do not include either of the following:
(i) Items or intangibles that are sold to one or more persons,
through which a value is not denominated in money.
(ii) Prepaid calling cards or prepaid authorization numbers for
telecommunications services made taxable by subsection P of this section.
(b) "Monetized bullion" means coins and other forms of money that
are manufactured from gold, silver or other metals and that have been or
are used as a medium of exchange in this or another state, the United
States or a foreign nation.
(c) “Precious metal bullion” means precious metal, including gold,
silver, platinum, rhodium and palladium, that has been smelted or refined
so that its value depends on its contents and not on its form.
22. Motor vehicle fuel and use fuel that are subject to a tax
imposed under title 28, chapter 16, article 1, sales of use fuel to a
holder of a valid single trip use fuel tax permit issued under section
28-5739, sales of aviation fuel that are subject to the tax imposed under
section 28-8344 and sales of jet fuel that are subject to the tax imposed
under article 8 of this chapter.
23. Tangible personal property sold to a person engaged in the
business of leasing or renting such property under the personal property
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rental classification if such property is to be leased or rented by such
person.
24. Tangible personal property sold in interstate or foreign
commerce if prohibited from being so taxed by the constitution of the
United States or the constitution of this state.
25. Tangible personal property sold to:
(a) A qualifying hospital as defined in section 42-5001.
(b) A qualifying health care organization as defined in section
42-5001 if the tangible personal property is used by the organization
solely to provide health and medical related educational and charitable
services.
(c) A qualifying health care organization as defined in section
42-5001 if the organization is dedicated to providing educational,
therapeutic, rehabilitative and family medical education training for
blind and visually impaired children and children with multiple
disabilities from the time of birth to age twenty-one.
(d) A qualifying community health center as defined in section
42-5001.
(e) A nonprofit charitable organization that has qualified under
section 501(c)(3) of the internal revenue code and that regularly serves
meals to the needy and indigent on a continuing basis at no cost.
(f) For taxable periods beginning from and after June 30, 2001, a
nonprofit charitable organization that has qualified under’ section
501(c)(3) of the internal revenue code and that provides residential
apartment housing for low-income persons over sixty-two years of age in a
facility that qualifies for a federal housing subsidy, if the tangible
personal property is used by the organization solely to _ provide
residential apartment housing for low-income persons over sixty-two years
of age in a facility that qualifies for a federal housing subsidy.
(g) A qualifying health sciences educational institution as defined
in section 42-5001.
(h) Any person representing or working on behalf of another person
described in subdivisions (a) through (g) of this paragraph if the
tangible personal property is incorporated or fabricated into a project
described in section 42-5075, subsection 6 P.
26. Magazines or other periodicals or other publications by this
state to encourage tourist travel.
27. Tangible personal property sold to:
(a) A person that is subject to tax under this article by reason of
being engaged in business classified under section 42-5075 or to a
subcontractor working under the control of a person engaged in business
classified under section 42-5075, if the property so sold is any of the
following:
(i) Incorporated or fabricated by the person into any real
property, structure, project, development or improvement as part of the
business.
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(ii) Incorporated or fabricated by the person into any project
described in section 42-5075, subsection @- P.
(iii) Used in environmental response or remediation activities
under section 42-5075, subsection B, paragraph 6.
(b) A person that is not subject to tax under section 42-5075 and
that has been provided a copy of a certificate under section 42-5009,
subsection L, if the property so sold is incorporated or fabricated by the
person into the real property, structure, project, development or
improvement described in the certificate.
28. The sale of a motor vehicle to a nonresident of this state if
the purchaser's state of residence does not allow a corresponding use tax
exemption to the tax imposed by article 1 of this chapter and if the
nonresident has secured a special ninety day nonresident registration
permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01.
29. Tangible personal property purchased in this state by a
nonprofit charitable organization that has qualified under’ section
501(c)(3) of the United States internal revenue code and that engages in
and uses such property exclusively in programs for persons with mental or
physical disabilities if the programs are exclusively for training, job
placement, rehabilitation or testing.
30. Sales of tangible personal property by a nonprofit organization
that is exempt from taxation under section 501(c)(3), 501(c)(4) or
501(c)(6) of the internal revenue code if the organization is associated
with a major league baseball team or a national touring professional
golfing association and no part of the organization's net earnings inures
to the benefit of any private shareholder or individual. This paragraph
does not apply to an organization that is owned, managed or controlled, in
whole or in part, by a major league baseball team, or its owners,
officers, employees or agents, or by a major league baseball association
or professional golfing association, or its owners, officers, employees or
agents, unless the organization conducted or operated exhibition events in
this state before January 1, 2018 that were exempt from taxation under
section 42-5073.
31. Sales of commodities, as defined by title 7 United States Code
section 2, that are consigned for resale in a warehouse in this state in
or from which the commodity is deliverable on a contract for future
delivery subject to the rules of a commodity market regulated by the
United States commodity futures trading commission.
32. Sales of tangible personal property by a nonprofit organization
that is exempt from taxation under’ section 501(c)(3), 501(c)(4),
501(c)(6), 501(c)(7) or 501(c)(8) of the internal revenue code if the
organization sponsors or operates a rodeo featuring primarily farm and
ranch animals and no part of the organization's net earnings inures to the
benefit of any private shareholder or individual.
33. Sales of propagative materials to persons who use those items
to commercially produce agricultural, horticultural, viticultural or
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floricultural crops in this state. For the purposes of this paragraph,
“propagative materials":
(a) Includes seeds, seedlings, roots, bulbs, liners, transplants,
cuttings, soil and plant additives, agricultural minerals, auxiliary soil
and plant substances, micronutrients, fertilizers, insecticides,
herbicides, fungicides, soil fumigants, desiccants, rodenticides,
adjuvants, plant nutrients and plant growth regulators.
(b) Except for use in commercially producing industrial hemp as
defined in section 3-311, does not include any propagative materials used
in producing any part, including seeds, of any plant of the genus
cannabis.
34. Machinery, equipment, technology or related supplies that are
only useful to assist a person with a physical disability as defined in
section 46-191 or a person who has a developmental disability as defined
in section 36-551 or has a head injury as defined in section 41-3201 to be
more independent and functional.
35. Sales of natural gas or liquefied petroleum gas used to propel
a motor vehicle.
36. Paper machine clothing, such as forming fabrics and dryer
felts, sold to a paper manufacturer and directly used or consumed in paper
manufacturing.
37. Coal, petroleum, coke, natural gas, virgin fuel oil and
electricity sold to a qualified environmental technology manufacturer,
producer or processor as defined in section 41-1514.02 and directly used
or consumed in generating or providing on-site power or energy solely for
environmental technology manufacturing, producing or_ processing or
environmental protection. This paragraph applies for twenty full
consecutive calendar or fiscal years from the date the first paper
manufacturing machine is placed in service. In the case of an
environmental technology manufacturer, producer or processor that does not
manufacture paper, the time period begins with the date the first
manufacturing, processing or production equipment is placed in service.
38. Sales of liquid, solid or gaseous chemicals used in
manufacturing, processing, fabricating, mining, refining, metallurgical
operations, research and development and, beginning on January 1, 1999,
printing, if using or consuming the chemicals, alone or as part of an
integrated system of chemicals, involves direct contact with the materials
from which the product is produced for the purpose of causing or allowing
a chemical or physical change to occur in the materials as part of the
production process. This paragraph does not include chemicals that are
used or consumed in_ activities such as_ packaging, storage or
transportation but does not affect any deduction for such chemicals that
is otherwise provided by this section. For the purposes of this
paragraph, "printing" means a commercial printing operation and includes
job printing, engraving, embossing, copying and bookbinding.
39. Through December 31, 1994, personal’ property liquidation
transactions, conducted by a personal property liquidator. From and after
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December 31, 1994, personal property liquidation transactions shall be
taxable under this section provided that nothing in this subsection shall
be construed to authorize the taxation of casual activities or
transactions under this chapter. For the purposes of this paragraph:
(a) “Personal property liquidation transaction" means a sale of
personal property made by a personal property liquidator acting solely on
behalf of the owner of the personal property sold at the dwelling of the
owner or on the death of any owner, on behalf of the surviving spouse, if
any, any devisee or heir or the personal representative of the estate of
the deceased, if one has been appointed.
(b) "Personal property liquidator" means a person who is retained
to conduct a sale in a personal property liquidation transaction.
40. Sales of food, drink and condiment for consumption within the
premises of any prison, jail or other institution under the jurisdiction
of the state department of corrections, the department of public safety,
the department of juvenile corrections or a county sheriff.
41. A motor vehicle and any repair and replacement parts and
tangible personal property becoming a part of such motor vehicle sold to a
motor carrier that is subject to a fee prescribed in title 28, chapter 16,
article 4 and that is engaged in the business of leasing or renting such
property.
42. Sales of:
(a) Livestock and poultry to persons engaging in the businesses of
farming, ranching or producing livestock or poultry.
(b) Livestock and poultry feed, salts, vitamins and other additives
for livestock or poultry consumption that are sold to persons for use or
consumption by their own livestock or poultry, for use or consumption in
the businesses of farming, ranching and producing or feeding livestock,
poultry, or livestock or poultry products or for use or consumption in
noncommercial boarding of livestock. For the purposes of this paragraph,
"poultry" includes ratites.
43. Sales of implants used as growth promotants and injectable
medicines, not already exempt under paragraph 8 of this subsection, for
livestock or poultry owned by or in possession of persons that are engaged
in producing livestock, poultry, or livestock or poultry products or that
are engaged in feeding livestock or poultry commercially. For the
purposes of this paragraph, "poultry" includes ratites.
44. Sales of motor vehicles at auction to nonresidents of this
state for use outside this state if the vehicles are shipped or delivered
out of this state, regardless of where title to the motor vehicles passes
or its free on board point.
45. Tangible personal property sold to a person engaged in business
and subject to tax under the transient lodging classification if the
tangible personal property is a personal hygiene item or articles used by
human beings for food, drink or condiment, except alcoholic beverages,
that are furnished without additional charge to and intended to be
consumed by the transient during the transient's occupancy.
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46. Sales of alternative fuel, as defined in section 1-215, to a
used oil fuel burner who has received a permit to burn used 071 or used
oil fuel under section 49-426 or 49-480.
47. Sales of materials that are purchased by or for publicly funded
libraries, including school district libraries, charter school libraries,
community college libraries, state university libraries or federal, state,
county or municipal libraries, for use by the public as follows:
(a) Printed or photographic materials, beginning August 7, 1985.
(b) Electronic or digital media materials, beginning July 17, 1994.
48. Tangible personal property sold to a commercial airline and
consisting of food, beverages and condiments and accessories used for
serving the food and beverages, if those items are to be provided without
additional charge to passengers for consumption in flight. For the
purposes of this paragraph, "commercial airline" means a person holding a
federal certificate of public convenience and necessity or foreign air
carrier permit for air transportation to transport persons, property or
United States mail in intrastate, interstate or foreign commerce.
49. Sales of alternative fuel vehicles if the vehicle was
manufactured as a diesel fuel vehicle and converted to operate on
alternative fuel and equipment that is installed in a conventional diesel
fuel motor vehicle to convert the vehicle to operate on an alternative
fuel, as defined in section 1-215.
50. Sales of any spirituous, vinous or malt liquor by a person that
is licensed in this state as a wholesaler by the department of liquor
licenses and control pursuant to title 4, chapter 2, article 1.
51. Sales of tangible personal property to be incorporated or
installed as part of environmental response or remediation activities
under section 42-5075, subsection B, paragraph 6.
52. Sales of tangible personal property by a nonprofit organization
that is exempt from taxation under section 501(c)(6) of the internal
revenue code if the organization produces, organizes or promotes cultural
or civic related festivals or events and no part of the organization's net
earnings inures to the benefit of any private shareholder or individual.
53. Application services that are designed to assess or test
student learning or to promote curriculum design or enhancement purchased
by or for any school district, charter school, community college or state
university. For the purposes of this paragraph:
(a) “Application services" means software applications provided
remotely using hypertext transfer protocol or another network protocol.
(b) "Curriculum design or enhancement" means planning, implementing
or reporting on courses of study, lessons, assignments or other learning
activities.
54. Sales of motor vehicle fuel and use fuel to a qualified
business under section 41-1516 for off-road use in harvesting, processing
or transporting qualifying forest products removed from qualifying
projects as defined in section 41-1516.
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55. Sales of repair parts installed in equipment used directly by a
qualified business under section 41-1516 in harvesting, processing or
transporting qualifying forest products removed from qualifying projects
as defined in section 41-1516.
56. Sales or other transfers of renewable energy credits or any
other unit created to track energy derived from renewable’ energy
resources. For the purposes of this paragraph, "renewable energy credit"
means a unit created administratively by the corporation commission or
governing body of a public power utility to track kilowatt hours of
electricity derived from a renewable energy resource or the kilowatt hour
equivalent of conventional energy resources displaced by distributed
renewable energy resources.
57. Orthodontic devices dispensed by a dental professional who is
licensed under title 32, chapter 11 to a patient as part of the practice
of dentistry.
58. Sales of tangible personal property incorporated or fabricated
into a project described in section 42-5075, subsection @- P, that is
located within the exterior boundaries of an Indian reservation for which
the owner, as defined in section 42-5075, of the project is an Indian
tribe or an affiliated Indian. For the purposes of this paragraph:
(a) “Affiliated Indian" means an individual Native American Indian
who is duly registered on the tribal rolls of the Indian tribe for whose
benefit the Indian reservation was established.
(b) "Indian reservation" means all lands that are within the limits
of areas set aside by the United States for the exclusive use and
occupancy of an-Indian tribe by treaty, law or executive order and that
are recognized as Indian reservations by the United States department of
the interior.
(c) “Indian tribe" means any organized nation, tribe, band or
community that is recognized as an Indian tribe by the United States
department of the interior and includes any entity formed under the laws
of the Indian tribe.
59. Sales of works of fine art, as defined in section 44-1771, at
an art auction or gallery in this state to nonresidents of this state for
use outside this state if the vendor ships or delivers the work of fine
art to a destination outside this state.
60. Sales of tangible personal property by a marketplace seller
that are facilitated by a marketplace facilitator in which the marketplace
facilitator has remitted or will remit the applicable tax to _ the
department pursuant to section 42-5014.
B. In addition to the deductions from the tax base prescribed by
subsection A of this section, the gross proceeds of sales or gross income
derived from sales of the following categories of tangible personal
property shall be deducted from the tax base:
1. Machinery, or equipment, used directly in _ manufacturing,
processing, fabricating, job printing, refining or metallurgical
operations. The terms “manufacturing", "processing", "fabricating", "job
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printing", "refining" and "metallurgical" as used in this paragraph refer
to and include those operations commonly understood within their ordinary
meaning. "Metallurgical operations" includes leaching, milling,
precipitating, smelting and refining.
2. Mining machinery, or equipment, used directly in the process of
extracting ores or minerals from the earth for commercial purposes,
including equipment required to prepare the materials for extraction and
handling, loading or transporting such extracted material to the surface.
"Mining" includes underground, surface and open pit operations for
extracting ores and minerals.
3. Tangible personal property sold to persons engaged in business
classified under the telecommunications classification, including a person
representing or working on behalf of such a person in a manner described
in section 42-5075, subsection @ P, and consisting of central office
switching equipment, switchboards, private branch exchange equipment,
microwave radio equipment and carrier equipment including optical fiber,
coaxial cable and other transmission media that are components of carrier
systems.
4. Machinery, equipment or transmission lines used directly in
producing or transmitting’ electrical power, but not including
distribution. Transformers and control equipment used at transmission
substation sites constitute equipment used in producing or transmitting
electrical power.
5. Machinery and equipment used directly for energy storage for
later electrical use. For the purposes of this paragraph:
(a) “Electric utility scale" means a person that is engaged in a
business activity described in section 42-5063, subsection A or _ such
person's equipment or wholesale electricity suppliers.
(b) “Energy storage" means commercially available technology for
electric utility scale that is capable of absorbing energy, storing energy
for a period of time and thereafter dispatching the energy and that uses
mechanical, chemical or thermal processes to store energy.
(c) “Machinery and equipment used directly" means all machinery and
equipment that are used for electric energy storage from the point of
receipt of such energy in order to facilitate storage of the electric
energy to the point where the electric energy is released.
6. Neat animals, horses, asses, sheep, ratites, swine or goats used
or to be used as breeding or production stock, including sales of
breedings or ownership shares in such animals used for breeding or
production.
7. Pipes or valves four inches in diameter or larger used to
transport oil, natural gas, artificial gas, water or coal slurry,
including compressor units, regulators, machinery and equipment, fittings,
seals and any other part that is used in operating the pipes or valves.
8. Aircraft, navigational and communication instruments and other
accessories and related equipment sold to:
(a) A person:
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(i) Holding, or exempted by federal law from obtaining, a federal
certificate of public convenience and necessity for use as, in conjunction
with or becoming part of an aircraft to be used to transport persons for
hire in intrastate, interstate or foreign commerce.
(ii) That is certificated or licensed under federal aviation
administration regulations (14 Code of Federal Regulations part 121 or
135) as a scheduled or unscheduled carrier of persons for hire for use as
or in conjunction with or becoming part of an aircraft to be used to
transport persons for hire in intrastate, interstate or foreign commerce.
(iii) Holding a foreign air carrier permit for air transportation
for use as or in conjunction with or becoming a part of aircraft to be
used to transport persons, property or United States mail in intrastate,
interstate or foreign commerce.
(iv) Operating an aircraft to transport persons in any manner for
compensation or hire, or for use in a fractional ownership program that
meets the requirements of federal aviation administration regulations
(14 Code of Federal Regulations part 91, subpart K), including as an air
carrier, a foreign air carrier or a commercial operator or under a
restricted category, within the meaning of 14 Code of Federal Regulations,
regardless of whether the operation or aircraft is regulated or certified
under part 91, 119, 121, 133, 135, 136 or 137, or another part of 14 Code
of Federal Regulations.
(v) That will lease or otherwise transfer operational control,
within the meaning of federal aviation administration operations
specification A008, or its successor, of the aircraft, instruments or
accessories to one or more persons described in item (i), (ii), (iii) or
(iv) of this subdivision, subject to section 42-5009, subsection Q.
(b) Any foreign government.
(c) Persons who are not residents of this state and who will not
use such property in this state other than in removing such property from
this state. This subdivision also applies to corporations that are not
incorporated in this state, regardless of maintaining a place of business
in this state, if the principal corporate office is located outside this
state and the property will not be used in this state other than in
removing the property from this state.
9. Machinery, tools, equipment and related supplies used or
consumed directly in repairing, remodeling or maintaining aircraft,
aircraft engines or aircraft component parts by or on behalf of a
certificated or licensed carrier of persons or property.
10. Railroad rolling stock, rails, ties and signal control
equipment used directly to transport persons or property.
11. Machinery or equipment used directly to drill for oil or gas or
used directly in the process of extracting oil or gas from the earth for
commercial purposes.
12. Buses or other urban mass transit vehicles that are used
directly to transport persons or property for hire or pursuant to a
governmentally adopted and controlled urban mass transportation program
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and that are sold to bus companies holding a federal certificate of
convenience and necessity or operated by any city, town or other
governmental entity or by any person contracting with such governmental
entity as part of a governmentally adopted and controlled program to
provide urban mass transportation.
13. Groundwater measuring devices required under section 45-604.
14. Machinery and equipment consisting of agricultural aircraft,
tractors, off-highway vehicles, tractor-drawn implements, self-powered
implements, machinery and equipment necessary for extracting milk, and
machinery and equipment necessary for cooling milk and livestock, and drip
irrigation lines not already exempt under paragraph 7 of this subsection
and that are used for commercial production of agricultural,
horticultural, viticultural and floricultural crops and products in this
state. For the purposes of this paragraph:
(a) “Off-highway vehicles" means off-highway vehicles as defined in
section 28-1171 that are modified at the time of sale to function as a
tractor or to tow tractor-drawn implements and that are not equipped with
a modified exhaust system to increase horsepower or speed or an engine
that is more than one thousand cubic centimeters or that have a maximum
speed of fifty miles per hour or less.
(b) "Self-powered implements" includes machinery and equipment that
are electric-powered.
15. Machinery or equipment used in research and development. For
the purposes of this paragraph, “research and development" means basic and
applied research in the sciences and engineering, and designing,
developing or testing prototypes, processes or new products, including
research and development of computer software that is embedded in or an
integral part of the prototype or new product or that is required for
machinery or equipment otherwise exempt under this section to function
effectively. Research and development do not include manufacturing
quality control, routine consumer product testing, market research, sales
promotion, sales service, research in social sciences or psychology,
computer software research that is not included in the definition of
research and development, or other’ nontechnological activities or
technical services.
16. Tangible personal property that is used by either of the
following to receive, store, convert, produce, generate, decode, encode,
control or transmit telecommunications information:
(a) Any direct broadcast satellite television or data transmission
service that operates pursuant to 47 Code of Federal Regulations part 25.
(b) Any satellite television or data transmission facility, if both
of the following conditions are met:
(i) Over two-thirds of the transmissions, measured in megabytes,
transmitted by the facility during the test period were transmitted to or
on behalf of one or more direct broadcast satellite television or data
transmission services that operate pursuant to 47 Code of Federal
Regulations part 25.
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(ii) Over two-thirds of the transmissions, measured in megabytes,
transmitted by or on behalf of those direct broadcast television or data
transmission services during the test period were transmitted by the
facility to or on behalf of those services. For the purposes of
subdivision (b) of this paragraph, "test period" means the three hundred
sixty-five day period beginning on the later of the date on which the
tangible personal property is purchased or the date on which the direct
broadcast satellite television or data transmission. service’ first
transmits information to its customers.
17. Clean rooms that are used for manufacturing, processing,
fabrication or research and development, as defined in paragraph 15 of
this subsection, of semiconductor products. For the purposes of this
paragraph, “clean room" means all property that comprises or creates an
environment where humidity, temperature, particulate matter and
contamination are precisely controlled within specified parameters,
without regard to whether the property is actually contained within that
environment or whether any of the property is affixed to or incorporated
into real property. Clean room:
(a) Includes the integrated systems, fixtures, piping, movable
partitions, lighting and all property that is necessary or adapted to
reduce contamination or to control airflow, temperature, humidity,
chemical purity or other environmental conditions or manufacturing
tolerances, as well as the production machinery and equipment operating in
conjunction with the clean room environment.
(b) Does not include the building or other permanent, nonremovable
component of the building that houses the clean room environment.
18. Machinery and equipment used directly in feeding poultry,
environmentally controlling housing for poultry, moving eggs within a
production and packaging facility or sorting or cooling eggs. This
exemption does not apply to vehicles used for transporting eggs.
19. Machinery or equipment, including related structural components
and containment structures, that is employed in_ connection’ with
manufacturing, processing, fabricating, job printing, refining, mining,
natural gas pipelines, metallurgical operations, telecommunications,
producing or transmitting electricity or research and development and that
is used directly to meet or exceed rules or regulations adopted by the
federal energy regulatory commission, the United States environmental
protection agency, the United States nuclear regulatory commission, the
Arizona department of environmental quality or a political subdivision of
this state to prevent, monitor, control or reduce land, water or air
pollution. For the purposes of this paragraph, “containment structure”
means a structure that prevents, monitors, controls or reduces noxious or
harmful discharge into the environment.
20. Machinery and equipment that are sold to a person engaged in
commercially producing livestock, livestock products or agricultural,
horticultural, viticultural or floricultural crops or products in this
state, including a person representing or working on behalf of such a
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person in a manner described in section 42-5075, subsection 6 P, if the
machinery and equipment are used directly and primarily to prevent,
monitor, control or reduce air, water or land pollution.
21. Machinery or equipment that enables a television station to
originate and broadcast or to receive and broadcast digital television
signals and that was purchased to facilitate compliance with the
telecommunications act of 1996 (P.L. 104-104; 110 Stat. 56; 47 United
States Code section 336) and the federal communications commission order
issued April 21, 1997 (47 Code of Federal Regulations part 73). This
paragraph does not exempt any of the following:
(a) Repair or replacement parts purchased for the machinery or
equipment described in this paragraph.
(b) Machinery or equipment purchased to replace machinery or
equipment for which an exemption was previously claimed and taken under
this paragraph.
(c) Any machinery or equipment purchased after the television
station has ceased analog broadcasting, or purchased after November 1,
2009, whichever occurs first.
22. Qualifying equipment that is purchased from and after June 30,
2004 through December 31, 2026 by a qualified business under section
41-1516 for harvesting or processing qualifying forest products removed
from qualifying projects as defined in section 41-1516. To qualify for
this deduction, the qualified business at the time of purchase must
present its certification approved by the department.
23. Computer data center equipment sold to the owner, operator or
qualified colocation tenant of a computer data center that is certified by
the Arizona commerce authority under section 41-1519 or an authorized
agent of the owner, operator or qualified colocation tenant during the
qualification period for use in the qualified computer data center. For
the purposes of this paragraph, "computer data center", “computer data
center equipment", "qualification period" and "qualified colocation
tenant" have the same meanings prescribed in section 41-1519.
C. The deductions provided by subsection B of this section do not
include sales of:
1. Expendable materials. For the purposes of this paragraph,
expendable materials do not include any of the categories of tangible
personal property specified in subsection B of this section regardless of
the cost or useful life of that property.
2. Janitorial equipment and hand tools.
3. Office equipment, furniture and supplies.
4. Tangible personal property used in selling or distributing
activities, other than the telecommunications transmissions described in
subsection B, paragraph 16 of this section.
5. Motor vehicles required to be licensed by this state, except
buses or other urban mass transit vehicles specifically exempted pursuant
to subsection B, paragraph 12 of this section, without regard to the use
of such motor vehicles.
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6. Shops, buildings, docks, depots and all other materials of
whatever kind or character not specifically included as exempt.
7. Motors and pumps used in drip irrigation systems.
8. Machinery and equipment or other tangible personal property used
by a contractor in performing a contract.
D. In addition to the deductions from the tax base prescribed by
subsection A of this section, there shall be deducted from the tax base
the gross proceeds of sales or gross income derived from sales of
machinery, equipment, materials and other tangible personal property used
directly and predominantly to construct a qualified environmental
technology manufacturing, producing or processing facility as described in
section 41-1514.02. This subsection applies for ten full consecutive
calendar or fiscal years after the start of initial construction.
E. In computing the tax base, gross proceeds of sales or gross
income from retail sales of heavy trucks and trailers does not include any
amount attributable to federal excise taxes imposed by 26 United States
Code section 4051.
F. If a person is engaged in an occupation or business to which
subsection A of this section applies, the person's books shall be kept so
as to show separately the gross proceeds of sales of tangible personal
property and the gross income from sales of services, and if not so kept
the tax shall be imposed on the total of the person's gross proceeds of
sales of tangible personal property and gross income from services.
G. If a person is engaged in the business of selling tangible
personal property at both wholesale and retail, the tax under this section
applies only to the gross proceeds of the sales made other than at
wholesale if the person's books are kept so as to show separately the
gross proceeds of sales of each class, and if the books are not so kept,
the tax under this section applies to the gross proceeds of every sale so
made.
H. A person who engages in manufacturing, baling, crating, boxing,
barreling, canning, bottling, sacking, preserving, processing or otherwise
preparing for sale or commercial use any livestock, agricultural or
horticultural product or any other product, article, substance or
commodity and who sells the product of such business at retail in this
state is deemed, as to such sales, to be engaged in business classified
under the retail classification. This subsection does not apply to:
1. Agricultural producers who are owners, proprietors or tenants of
agricultural lands, orchards, farms or gardens where agricultural products
are grown, raised or prepared for market and who are marketing their own
agricultural products.
2. Businesses classified under the:
(a) Transporting classification.
(b) Utilities classification.
(c) Telecommunications classification.
(d) Pipeline classification.
(e) Private car line classification.
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(f) Publication classification.
(g) Job printing classification.
(h) Prime contracting classification.
(i) Restaurant classification.
I. The gross proceeds of sales or gross income derived from the
following shall be deducted from the tax base for the- retail
classification:
1. Sales made directly to the United States government or its
departments or agencies by a manufacturer, modifier, assembler’ or
repairer.
2. Sales made directly to a manufacturer, modifier, assembler or
repairer if such sales are of any ingredient or component part of products
sold directly to the United States government or its departments or
agencies by the manufacturer, modifier, assembler or repairer.
3. Overhead materials or other tangible personal property that is
used in performing a contract between the United States government and a
manufacturer, modifier, assembler or repairer, including property used in
performing a subcontract with a government contractor who is a
manufacturer, modifier, assembler or repairer, to which title passes to
the government under the terms of the contract or subcontract.
4. Sales of overhead materials or other tangible personal property
to a manufacturer, modifier, assembler or repairer if the gross proceeds
of sales or gross income derived from the property by the manufacturer,
modifier, assembler or repairer will be exempt under paragraph 3 of this
subsection.
J. There shall be deducted from the tax base fifty percent of the
gross proceeds or gross income from any sale of tangible personal property
made directly to the United States government or its departments or
agencies that is not deducted under subsection I of this section.
K. The department shall require every person claiming a deduction
provided by subsection I or J of this section to file on forms prescribed
by the department at such times as the department directs a _ sworn
statement disclosing the name of the purchaser and the exact amount of
sales on which the exclusion or deduction is claimed.
L. In computing the tax base, gross proceeds of sales or gross
income does not include:
1. A manufacturer's cash rebate on the sales price of a motor
vehicle if the buyer assigns the buyer's right in the rebate to the
retailer.
2. The waste tire disposal fee imposed pursuant to section 44-1302.
M. There shall be deducted from the tax base the amount received
from sales of solar energy devices. The retailer shall register with the
department as a solar energy retailer. By registering, the retailer
acknowledges that it will make its books and records relating to sales of
solar energy devices available to the department for examination.
N. In computing the tax base in the case of the sale or transfer of
wireless telecommunications equipment as an inducement to a customer to
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enter into or continue a contract for telecommunications services that are
taxable under section 42-5064, gross proceeds of sales or gross income
does not include any sales commissions or other compensation received by
the retailer as a result of the customer entering into or continuing a
contract for the telecommunications services.
QO. For the purposes of this section, a sale of wireless
telecommunications equipment to a person who holds the equipment for sale
or transfer to a customer as an inducement to enter into or continue a
contract for telecommunications services that are taxable under section
42-5064 is considered to be a sale for resale in the regular course of
business.
P. Retail sales of prepaid calling cards or prepaid authorization
numbers for telecommunications services, including sales of
reauthorization of a prepaid card or authorization number, are subject to
tax under this section.
Q. For the purposes of this section, the diversion of gas from a
pipeline by a person engaged in the business of:
1. Operating a natural or artificial gas pipeline, for the sole
purpose of fueling compressor equipment to pressurize the pipeline, is not
a sale of the gas to the operator of the pipeline.
2. Converting natural gas into liquefied natural gas, for the sole
purpose of fueling compressor equipment used in the conversion process, is
not a sale of gas to the operator of the compressor equipment.
R. For the purposes of this section, the transfer of title or
possession of coal from an owner or operator of a power plant to a person
in the business of refining coal is not a sale of coal if both of the
following apply:
1. The transfer of title or possession of the coal is for the
purpose of refining the coal.
2. The title or possession of the coal is transferred back to the
owner or operator of the power plant after completion of the coal refining
process. For the purposes of this paragraph, “coal refining process"
means the application of a coal additive system that aids in the reduction
of power plant emissions during the combustion of coal and the treatment
of flue gas.
S. If a seller is entitled to a deduction pursuant to subsection B,
paragraph 16, subdivision (b) of this section, the department may require
the purchaser to establish that the requirements of subsection B,
paragraph 16, subdivision (b) of this section have been satisfied. If the
purchaser cannot establish that the requirements of subsection B,
paragraph 16, subdivision (b) of this section have been satisfied, the
purchaser is liable in an amount equal to any tax, penalty and interest
that the seller would have been required to pay under article 1 of this
chapter if the seller had not made a deduction pursuant to subsection B,
paragraph 16, subdivision (b) of this section. Payment of the amount
under this subsection exempts the purchaser from liability for any tax
imposed under article 4 of this chapter and related to the tangible
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personal property purchased. The amount shall be treated as transaction
privilege tax to the purchaser and as tax revenues collected from the
seller to designate the distribution base pursuant to section 42-5029.
T. For the purposes of section 42-5032.01, the department shall
separately account for revenues collected under the retail classification
from businesses selling tangible personal property at retail:
1. On the premises of a multipurpose facility that is owned, leased
or operated by the tourism and sports authority pursuant to title 5,
chapter 8.
2. At professional football contests that are held in a stadium
located on the campus of an institution under the jurisdiction of the
Arizona board of regents.
U. FOR THE PURPOSES OF SECTION 42-5032.03, FROM AND AFTER
SEPTEMBER 30, 2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES
COLLECTED UNDER THE RETAIL CLASSIFICATION FROM BUSINESSES SELLING TANGIBLE
PERSONAL PROPERTY AT RETAIL ON THE PREMISES OF A MAJOR LEAGUE BASEBALL
FACILITY OWNED OR OPERATED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE
48, CHAPTER 26.
t+; V. In computing the tax base for the sale of a motor vehicle to
a nonresident of this state, if the purchaser's state of residence allows
a corresponding use tax exemption to the tax imposed by article 1 of this
chapter and the rate of the tax in the purchaser's state of residence is
lower than the rate prescribed in article 1 of this chapter or if the
purchaser's state of residence does not impose an excise tax, and the
nonresident has secured a special ninety day nonresident registration
permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01,
there shall be deducted from the tax base a portion of the gross proceeds
or gross income from the sale so that the amount of transaction privilege
tax that is paid in this state is equal to the excise tax that is imposed
by the purchaser's state of residence on the nonexempt sale or use of the
motor vehicle.
¥> W. For the purposes of this section:
1. “Agricultural aircraft" means an aircraft that is built for
agricultural use for the aerial application of pesticides or fertilizer or
for aerial seeding.
2. “Aircraft" includes:
(a) An airplane flight simulator that is approved by the federal
aviation administration for use as a phase II or higher flight simulator
under appendix H, 14 Code of Federal Regulations part 121.
(b) Tangible personal property that is permanently affixed or
attached as a component part of an aircraft that is owned or operated by a
certificated or licensed carrier of persons or property.
3. “Other accessories and related equipment" includes aircraft
accessories and equipment such as ground service equipment that physically
contact aircraft at some point during the overall carrier operation.
4. "Selling at retail" means a sale for any purpose other than for
resale in the regular course of business in the form of tangible personal
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property, but transfer of possession, lease and rental as used in the
definition of sale mean only such transactions as are found on
investigation to be in lieu of sales as defined without the words lease or
rental.
tts X. For the purposes of subsection I of this section:
1. "Assembler" means a person who unites or combines products,
wares or articles of manufacture so as to produce a change in form or
substance without changing or altering the component parts.
2. "Manufacturer" means a person who is principally engaged in
fabricating, producing or manufacturing products, wares or articles for
use from raw or prepared materials, imparting to those materials new
forms, qualities, properties and combinations.
3. “Modifier" means a person who reworks, changes or adds _ to
products, wares or articles of manufacture.
4. “Overhead materials" means tangible personal property, the gross
proceeds of sales or gross income derived from that would otherwise be
included in the retail classification, and that are used or consumed in
performing a contract, the cost of which is charged to an overhead expense
account and allocated to various contracts based on generally accepted
accounting principles and consistent with government contract accounting
standards.
5. “Repairer" means a person who restores or renews products, wares
or articles of manufacture.
6. "Subcontract" means an agreement between a contractor and any
person who is not an employee of the contractor for furnishing supplies or
services that, in whole or in part, are necessary to perform one or more
government contracts, or under which any portion of the contractor's
obligation under one or more government contracts is performed, undertaken
or assumed and that includes provisions causing title to overhead
materials or other tangible personal property used in performing the
subcontract to pass to the government or that includes’ provisions
incorporating such title passing clauses in a government contract into the
subcontract.
Sec. 8. Section 42-5073, Arizona Revised Statutes, is amended to
read:
42-5073. Amusement classification
A. The amusement classification is comprised of the business of
operating or conducting theaters, movies, operas, shows of any type or
nature, exhibitions, concerts, carnivals, circuses, amusement parks,
menageries, fairs, races, contests, games, billiard or pool parlors,
bowling alleys, public dances, dance halls, boxing and wrestling matches,
skating rinks, tennis courts, except as provided in subsection B of this
section, video games, pinball machines or sports events or any other
business charging admission or user fees for exhibition, amusement or
entertainment, including the operation or sponsorship of events by a
tourism and sports authority under title 5, chapter 8. For the purposes
of this section, admission or user fees include, but are not limited to,
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any revenues derived from any form of contractual agreement for rights to
or use of premium or special seating facilities or arrangements. The
amusement classification does not include:
1. Activities or projects of bona fide religious or educational
institutions.
2. Private or group instructional activities. For the purposes of
this paragraph, “private or group instructional activities" includes, but
is not limited to, performing arts, martial arts, gymnastics and aerobic
instruction.
3. The operation or sponsorship of events by the Arizona exposition
and state fair board or county fair commissions.
4. A musical, dramatic or dance group or a botanical garden, museum
or zoo that is qualified as a nonprofit charitable organization under
section 501(c)(3) of the United States internal revenue code if no part of
its net income inures to the benefit of any private shareholder or
individual.
5. Exhibition events in this state sponsored, conducted or operated
by a nonprofit organization that is exempt from taxation under section
501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the
organization is associated with major league baseball teams or a national
touring professional golfing association and no part of the organization's
net earnings inures to the benefit of any private shareholder or
individual. This paragraph does not apply to an organization that is
owned, managed or controlled, in whole or in part, by a major league
baseball team, or its owners, officers, employees or agents, or by a major
league baseball association or professional golfing association, or its
owners, officers, employees or agents, unless the organization conducted
or operated exhibition events in this state before January 1, 2018 that
were exempt from taxation under this section.
6. Operating or sponsoring rodeos that feature primarily farm and
ranch animals in this state and that are sponsored, conducted or operated
by a nonprofit organization that is exempt from taxation under section
501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the internal
revenue code if no part of the organization's net earnings inures to the
benefit of any private shareholder or individual.
7. Sales of admissions to intercollegiate football contests if the
contests are both:
(a) Operated by a nonprofit organization that is exempt from
taxation under section 501(c)(3) of the internal revenue code and no part
of the organization's net earnings inures to the benefit of any private
shareholder or individual.
(b) Not held in a multipurpose facility that is owned or operated
by the tourism and sports authority pursuant to title 5, chapter 8.
8. Activities and events of, or fees and assessments received by, a
homeowners organization from persons who are members of the organization
or accompanied guests of members. For the purposes of this paragraph,
"homeowners organization" means a mandatory membership organization
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comprised of owners of residential property within a specified residential
real estate subdivision development or similar area and established to own
property for the benefit of its members where both of the following apply:
(a) No part of the organization's net earnings inures to the
benefit of any private shareholder or individual.
(b) The primary purpose of the organization is to provide for the
acquisition, construction, management, maintenance or care of organization
property.
9. Activities and events of, or fees received by, a _ nonprofit
organization that is exempt from taxation under section 501(c)(6) of the
internal revenue code if the organization produces, organizes or promotes
cultural or civic related festivals or events and no part of the
organization's net earnings inures to the benefit of any private
shareholder or individual.
10. Arranging an amusement activity as a service to a _ person's
customers if that person is not otherwise engaged in the business of
operating or conducting an amusement personally or through others. This
exception does not apply to businesses that operate or conduct amusements
pursuant to customer orders and send the billings and receive the payments
associated with that activity, including when the amusement is performed
by third-party independent contractors. For the purposes of this
paragraph, "“arranging" includes billing for or collecting amusement
charges from a person's customers on behalf of the persons providing the
amusement.
B. The tax base for the amusement classification is the gross
proceeds of sales or gross income derived from the business, except that
the following shall be deducted from the tax base:
1. The gross proceeds of sales or gross income derived from
memberships, including initiation fees, that provide for the right to use
a health or fitness establishment or a private recreational establishment,
or any portion of an establishment, including tennis and other racquet
courts at that establishment, for participatory purposes for twenty-eight
days or more and fees charged for use of the health or fitness
establishment or private recreational establishment by bona_ fide
accompanied guests of members, except that this paragraph does not include
additional fees, other than initiation fees, charged by a health or
fitness establishment or a private recreational establishment for purposes
other than memberships that provide for the right to use a health or
fitness establishment or private recreational establishment, or any
portion of an establishment, for participatory purposes for twenty-eight
days or more and accompanied guest use fees.
2. Amounts that are exempt under section 5-111, subsection G.
3. The gross proceeds of sales or gross income derived from
membership fees, including initiation fees, that provide for the right to
use a transient lodging recreational establishment, including golf courses
and tennis and other’ racquet courts at that establishment, for
participatory purposes for twenty-eight days or more, except that this
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paragraph does not include additional fees, other than initiation fees,
that are charged by a transient lodging recreational establishment for
purposes other than memberships and that provide for the right to use a
transient lodging recreational establishment or any portion of the
establishment for participatory purposes for twenty-eight days or more.
4. The gross proceeds of sales or gross income derived from sales
to persons engaged in the business of transient lodging classified under
section 42-5070, if all of the following apply:
(a) The persons who are engaged in the transient lodging business
sell the amusement to another person for consideration.
(b) The consideration received by the transient lodging business is
equal to or greater than the amount to be deducted under this subsection.
(c) The transient lodging business has provided an exemption
certificate to the person engaging in business under this section.
5. The gross proceeds of sales or gross income derived from:
(a) Business activity that is properly included in any other
business classification under this article and that is taxable to the
person engaged in that classification, but the gross proceeds of sales or
gross income to be deducted shall not exceed the consideration paid to the
person conducting the activity.
(b) Business activity that is arranged by the person who is subject
to tax under this section and that is not taxable to the person conducting
the activity due to an exclusion, exemption or deduction under this
section or section 42-5062, but the gross proceeds of sales or gross
income to be deducted shall not exceed the consideration paid to the
person conducting the activity.
(c) Business activity that is arranged by a person who is subject
to tax under this section and that is taxable to another person under this
section who conducts the activity, but the gross proceeds of sales or
gross income to be deducted shall not exceed the consideration paid to the
person conducting the activity.
6. The gross proceeds of sales or gross income derived from entry
fees paid by participants for events that either:
(a) Until March 1, 2017, consist of a run, walk, swim or bicycle
ride or a similar event, or any combination of these events.
(b) Are operated or conducted by nonprofit organizations that are
exempt from taxation under section 501(c)(3) of the internal revenue code
and of which no part of the organization's net earnings inures to the
benefit of any private shareholder or individual, if the event consists of
a run, walk, swim or bicycle ride or a similar event, or any combination
of these events.
C. For the purposes of subsection B of this section:
1. “Health or fitness establishment" means a facility whose primary
purpose is to provide facilities, equipment, instruction or education to
promote the health and fitness of its members and at least eighty percent
of the monthly gross revenue of the facility is received through accounts
of memberships and accompanied guest use fees that provide for the right
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to use the facility, or any portion of the facility, under the terms of
the membership agreement for participatory purposes for twenty-eight days
or more.
2. "Private recreational establishment" means a facility whose
primary purpose is to provide recreational facilities, such as tennis,
golf and swimming, for its members and where at least eighty percent of
the monthly gross revenue of the facility is received through accounts of
memberships and accompanied guest use fees that provide for the right to
use the facility, or any portion of the facility, for participatory
purposes for twenty-eight days or more.
3. “Transient lodging recreational establishment" means a facility
whose primary purpose is to provide facilities for transient lodging, that
is subject to taxation under this chapter and that also provides
recreational facilities, such as tennis, golf and swimming, for members
for a period of twenty-eight days or more.
D. Until December 31, 1988, the revenues from hayrides and other
animal-drawn amusement rides, from horseback riding and riding instruction
and from recreational tours using motor vehicles designed to operate on
and off public highways are exempt from the tax imposed by this section.
Beginning January 1, 1989, the gross proceeds or gross income from
hayrides and other animal-drawn amusement rides, from horseback riding and
from recreational tours using motor vehicles designed to operate on and
off public highways are subject to taxation under this section. Tax
liabilities, penalties and interest paid for taxable periods before
January 1, 1989 shall not be refunded unless the taxpayer requesting the
refund provides proof satisfactory to the department that the taxes will
be returned to the customer.
E. If a person is engaged in the business of offering both
exhibition, amusement or entertainment and private or group instructional
activities, the person's books shall be kept to show separately the gross
income from exhibition, amusement or entertainment and the gross income
from instructional activities. If the books do not provide this separate
accounting, the tax is imposed on the person's total gross income from the
business.
F. The department shall separately account for revenues collected
under the amusement classification for the purposes of section 42-5029,
subsection D, paragraph 4, subdivision (b).
G. For the purposes of section 42-5032.01, the department shall
separately account for revenues collected under the amusement
classification from sales of admissions to:
1. Events that are held in a multipurpose facility that is owned or
operated by the tourism and sports authority pursuant to title 5, chapter
8, including intercollegiate football contests that are operated by a
nonprofit organization that is exempt from taxation under’ section
501(c)(3) of the internal revenue code.
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2. Professional football contests that are held in a_ stadium
located on the campus of an institution under the jurisdiction of the
Arizona board of regents.
H. FOR THE PURPOSES OF SECTION 42-5032.03, FROM AND AFTER
SEPTEMBER 30, 2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES
COLLECTED UNDER THE AMUSEMENT CLASSIFICATION FROM THE SALES OF ADMISSIONS
TO A MAJOR LEAGUE BASEBALL FACILITY OWNED OR OPERATED BY A COUNTY STADIUM
DISTRICT PURSUANT TO TITLE 48, CHAPTER 26.
Sec. 9. Section 42-5074, Arizona Revised Statutes, is amended to
read:
42-5074. Restaurant classification
A. The restaurant classification is comprised of the business of
operating restaurants, dining cars, dining rooms, lunchrooms, mobile food
units, lunch stands, soda fountains, catering services or. similar
establishments where articles of food or drink are sold for consumption on
or off the premises.
B. The tax base for the restaurant classification is the gross
proceeds of sales or gross income derived from the business. The gross
proceeds of sales or gross income derived from the following shall be
deducted from the tax base:
1. Sales to a person engaged in business classified under the
restaurant classification if the items sold are to be resold in the
regular course of the business.
2. Sales by a congressionally chartered veterans organization of
food or drink prepared for consumption on the premises leased, owned or
maintained by the organization.
3. Sales by churches, fraternal benefit societies and _ other
nonprofit organizations, as these organizations are defined in the federal
internal revenue code (26 United States Code section 501), that do not
regularly engage or continue in the restaurant business for the purpose of
fund-raising.
4. Sales by a nonprofit organization that is exempt from taxation
under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue
code if the organization is associated with a major league baseball team
or a national touring professional golfing association and no part of the
organization's net earnings inures to the benefit of any private
shareholder or individual. This paragraph does not apply to an
organization that is owned, managed or controlled, in whole or in part, by
a major league baseball team, or its owners, officers, employees or
agents, or by a major league baseball association or professional golfing
association, or its owners, officers, employees or agents, unless the
organization conducted or operated exhibition events in this state before
January 1, 2018 that were exempt from taxation under section 42-5073.
5. Sales at a rodeo featuring primarily farm and ranch animals in
this state by a nonprofit organization that is exempt from taxation under
section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the
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internal revenue code if no part of the organization's net earnings inures
to the benefit of any private shareholder or individual.
6. Sales by any nonprofit organization organized and operated
exclusively for charitable purposes and recognized by the United States
internal revenue service under section 501(c)(3) of the internal revenue
code.
7. Sales to qualifying hospitals as defined in section 42-5001.
8. Sales to a qualifying health care organization as defined in
section 42-5001 if the tangible personal property is used by _ the
organization solely to provide health and medical related educational and
charitable services.
9. Sales of food, drink and condiment for consumption within the
premises of any prison, jail or other institution under the jurisdiction
of the state department of corrections, the department of public safety,
the department of juvenile corrections or a county sheriff.
10. Sales of articles of prepared or unprepared food, drink or
condiment and accessory tangible personal property to a school district or
charter school if the articles and accessory tangible personal property
are served to persons for consumption on the premises of a public school
in the school district or charter school during school hours.
11. Prepared food, drink or condiment donated by a restaurant to a
nonprofit charitable organization that has qualified under’ section
501(c)(3) of the internal revenue code and that regularly serves meals to
the needy and indigent on a continuing basis at no cost.
12. Sales of articles of food and drink at low or reduced prices to
eligible elderly or homeless persons or persons with a disability by a
restaurant that contracts with the department of economic security and
that is approved by the food and nutrition services of the United States
department of agriculture pursuant to the supplemental nutrition
assistance program established by the food and nutrition act of 2008
(P.L. 110-246; 122 Stat. 1651; 7 United States Code sections 2011 through
2036a), if the purchases of the articles of food and drink are made with
the benefits issued pursuant to the supplemental nutrition assistance
program.
C. The tax imposed on the restaurant classification pursuant to
this section does not apply to the gross proceeds of sales or gross income
from tangible personal property sold to a commercial airline consisting of
food, beverages and condiments and accessories used for serving the food
and beverages, if those items are to be provided without additional charge
to passengers for consumption in flight. For the purposes of this
subsection, “commercial airline" means a person holding a_ federal
certificate of public convenience and necessity or foreign air carrier
permit for air transportation to transport persons, property or United
States mail in intrastate, interstate or foreign commerce.
D. The department shall separately account for revenues collected
under the restaurant classification for the purposes of section 42-5029,
subsection D, paragraph 4, subdivision (b).
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E. For the purposes of section 42-5032.01, the department shall
separately account for revenues collected under’ the restaurant
classification from businesses operating restaurants, dining rooms,
lunchrooms, lunch stands, soda fountains, catering services or similar
establishments:
1. On the premises of a multipurpose facility that is owned or
operated by the tourism and sports authority pursuant to title 5, chapter
8 for consumption on or off the premises.
2. At professional football contests that are held in a stadium
located on the campus of an institution under the jurisdiction of the
Arizona board of regents.
F. FOR THE PURPOSES OF SECTION 42-5032.03, FROM AND AFTER
SEPTEMBER 30, 2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES
COLLECTED UNDER THE RESTAURANT CLASSIFICATION FROM BUSINESSES OPERATING
RESTAURANTS, DINING ROOMS, LUNCHROOMS, LUNCH STANDS, SODA FOUNTAINS,
CATERING SERVICES OR SIMILAR ESTABLISHMENTS ON THE PREMISES OF A MAJOR
LEAGUE BASEBALL FACILITY OWNED OR OPERATED BY A COUNTY STADIUM DISTRICT
PURSUANT TO TITLE 48, CHAPTER 26.
Sec. 10. Section 42-5075, Arizona Revised Statutes, is amended to
read:
42-5075. Prime contracting classification; exemptions;
definitions
A. The prime contracting classification is comprised of the
business of prime contracting and the business of manufactured building
dealer. Sales for resale to another manufactured building dealer are not
subject to tax. Sales for resale do not include sales to a lessor of
manufactured buildings. The sale of a used manufactured building is not
taxable under this chapter. The prime contracting classification does not
include any work or operation performed by a person that is not required
to be licensed by the registrar of contractors pursuant to. section
32-1121,
B. The tax base for the prime contracting classification is
sixty-five percent of the gross proceeds of sales or gross income derived
from the business. The following amounts shall be deducted from the gross
proceeds of sales or gross income before computing the tax base:
1. The sales price of land, which shall not exceed the fair market
value.
2. Sales and installation of groundwater measuring devices required
under section 45-604 and groundwater monitoring wells required by law,
including monitoring wells installed for acquiring information for a
permit required by law.
3. The sales price of furniture, furnishings, fixtures, appliances
and attachments that are not incorporated as component parts of or
attached to a manufactured building or the setup site. The sale of such
items may be subject to the taxes imposed by article 1 of this chapter
separately and distinctly from the sale of the manufactured building.
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4. The gross proceeds of sales or gross income received from a
contract entered into for the modification of any building, highway, road,
railroad, excavation, manufactured building or other structure, project,
development or improvement located in a military reuse zone for providing
aviation or aerospace services or for a manufacturer, assembler or
fabricator of aviation or aerospace products within an active military
reuse zone after the zone is initially established or renewed under
section 42-1301. To be eligible to qualify for this deduction, before
beginning work under the contract, the prime contractor must have applied
for a letter of qualification from the department of revenue.
5. The gross proceeds of sales or gross income derived from a
contract to construct a qualified environmental technology manufacturing,
producing or processing facility, as described in section 41-1514.02, and
from subsequent construction and installation contracts that begin within
ten years after the start of initial construction. To qualify for this
deduction, before beginning work under the contract, the prime contractor
must obtain a letter of qualification from the department of revenue. This
paragraph shall apply for ten full consecutive calendar or fiscal years
after the start of initial construction.
6. The gross proceeds of sales or gross income from a contract to
provide for one or more of the following actions, or a contract for site
preparation, constructing, furnishing or installing machinery, equipment
or other tangible personal property, including structures necessary to
protect exempt incorporated materials or installed machinery or equipment,
and tangible personal property incorporated into the project, to perform
one or more of the following actions in response to a release or suspected
release of a hazardous substance, pollutant or contaminant from a facility
to the environment, unless the release was authorized by a permit issued
by a governmental authority:
(a) Actions to monitor, assess and evaluate such a release or a
suspected release.
(b) Excavation, removal and transportation of contaminated soil and
its treatment or disposal.
(c) Treatment of contaminated soil by vapor extraction, chemical or
physical stabilization, soil washing or biological treatment to reduce the
concentration, toxicity or mobility of a contaminant.
(d) Pumping and treatment or in situ treatment of contaminated
groundwater or surface water to reduce the concentration or toxicity of a
contaminant.
(e) The installation of structures, such as cutoff walls or caps,
to contain contaminants present in groundwater or soil and prevent them
from reaching a location where they could threaten human health or welfare
or the environment.
This paragraph does not include asbestos removal or the construction or
use of ancillary structures such as maintenance sheds, offices or storage
facilities for unattached equipment, pollution control equipment,
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facilities or other control items required or to be used by a person to
prevent or control contamination before it reaches the environment.
7. The gross proceeds of sales or gross income that is derived from
a contract for the installation, assembly, repair or maintenance of
machinery, equipment or other tangible personal property that is either
deducted from the tax base of the retail classification under section
42-5061, subsection B or that is exempt from use tax under section
42-5159, subsection B and that has independent functional utility,
pursuant to the following provisions:
(a) The deduction provided in this paragraph includes the gross
proceeds of sales or gross income derived from all of the following:
(i) Any activity performed on machinery, equipment or other
tangible personal property with independent functional utility.
(ii) Any activity performed on any tangible personal property
relating to machinery, equipment or other tangible personal property with
independent functional utility in furtherance of any of the purposes
provided for under subdivision (d) of this paragraph.
(iii) Any activity that is related to the activities described in
items (i) and (ii) of this subdivision, including inspecting the
installation of or testing the machinery, equipment or other tangible
personal property.
(b) The deduction provided in this paragraph does not include gross
proceeds of sales or gross income from the portion of any contracting
activity that consists of the development of, or modification to, real
property in order to facilitate the installation, assembly, repair,
maintenance or removal of machinery, equipment or other tangible personal
property that is either deducted from the tax base of the retail
classification under section 42-5061, subsection B or exempt from use tax
under section 42-5159, subsection B.
(c) The deduction provided in this paragraph shall be determined
without regard to the size or useful life of the machinery, equipment or
other tangible personal property.
(d) For the purposes of this paragraph, “independent functional
utility" means that the machinery, equipment or other tangible personal
property can independently perform its function without attachment to real
property, other than attachment for any of the following purposes:
(i) Assembling the machinery, equipment or other tangible personal
property.
(ii) Connecting items of machinery, equipment or other tangible
personal property to each other.
(iii) Connecting the machinery, equipment or other’ tangible
personal property, whether as an individual item or as a system of items,
to water, power, gas, communication or other services.
(iv) Stabilizing or protecting the machinery, equipment or other
tangible personal property during operation by bolting, burying or
performing other similar nonpermanent connections to either real property
or real property improvements.
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8. The gross proceeds of sales or gross income attributable to the
purchase of machinery, equipment or other tangible personal property that
is exempt from or deductible from transaction privilege and use tax under:
(a) Section 42-5061, subsection A, paragraph 25, 29 or 58.
(b) Section 42-5061, subsection B.
(c) Section 42-5159, subsection A, paragraph 13, subdivision (a),
(b), (c), (d), (e), (fF), (3), (kK), (m) or (n) or paragraph 55.
(d) Section 42-5159, subsection B.
9. The gross proceeds of sales or gross income received from a
contract for the construction of an environmentally controlled facility
for the raising of poultry for the production of eggs and the sorting,
cooling and packaging of eggs.
10. The gross proceeds of sales or gross income that is derived
from a contract entered into with a person who is engaged in the
commercial production of livestock, livestock products or agricultural,
horticultural, viticultural or floricultural crops or products in this
state for the modification of any building, highway, road, excavation,
manufactured building or other’ structure, project, development’ or
improvement used directly and primarily to prevent, monitor, control or
reduce air, water or land pollution.
11. The gross proceeds of sales or gross income that is derived
from the installation, assembly, repair or maintenance of clean rooms that
are deducted from the tax base of the retail classification pursuant to
section 42-5061, subsection B, paragraph 17.
12. For taxable periods beginning from and after June 30, 2001, the
gross proceeds of sales or gross income derived from a contract entered
into for the construction of a residential apartment housing facility that
qualifies for a federal housing subsidy for low-income persons over
sixty-two years of age and that is owned by a nonprofit charitable
organization that has qualified under section 501(c)(3) of the internal
revenue code.
13. For taxable periods beginning from and after December 31, 1996
and ending before January 1, 2017, the gross proceeds of sales or gross
income derived from a contract to provide and install a solar energy
device. The contractor shall register with the department as a solar
energy contractor. By registering, the contractor acknowledges that it
will make its books and records relating to sales of solar energy devices
available to the department for examination.
14. The gross proceeds of sales or gross income derived from a
contract entered into for the construction of a launch site, as defined in
14 Code of Federal Regulations section 401.5.
15. The gross proceeds of sales or gross income derived from a
contract entered into for the construction of a domestic violence shelter
that is owned and operated by a nonprofit charitable organization that has
qualified under section 501(c)(3) of the internal revenue code.
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16. The gross proceeds of sales or gross income derived from
contracts to perform postconstruction treatment of real property for
termite and general pest control, including wood-destroying organisms.
17. The gross proceeds of sales or gross income received from
contracts entered into before July 1, 2006 for constructing a_ state
university research infrastructure project if the project has _ been
reviewed by the joint committee on capital review before the university
enters into the construction contract for the project. For the purposes
of this paragraph, "research infrastructure" has the same meaning
prescribed in section 15-1670.
18. The gross proceeds of sales or gross income received from a
contract for the construction of any building, or other’ structure,
project, development or improvement owned by a qualified business under
section 41-1516 for harvesting or processing qualifying forest products
removed from qualifying projects as defined in section 41-1516 if actual
construction begins before January 1, 2024. To qualify for this
deduction, the prime contractor must obtain a letter of qualification from
the Arizona commerce authority before beginning work under the contract.
19. Any amount of the gross proceeds of sales or gross income
attributable to development fees that are incurred in relation to a
contract for construction, development or improvement of real property and
that are paid by a prime contractor or subcontractor. For the purposes of
this paragraph:
(a) The attributable amount shall not exceed the value of the
development fees actually imposed.
(b) The attributable amount is equal to the total amount of
development fees paid by the prime contractor or subcontractor, and the
total development fees credited in exchange for the construction of,
contribution to or dedication of real property for providing public
infrastructure, public safety or other public services necessary to the
development. The real property must be the subject of the development
fees.
(c) “Development fees" means fees imposed to offset capital costs
of providing public infrastructure, public safety or other public services
to a development and authorized pursuant to section 9-463.05, section
11-1102 or title 48 regardless of the jurisdiction to which the fees are
paid.
20. The gross proceeds of sales or gross income derived from a
contract entered into for the construction of a mixed waste processing
facility that is located on a municipal solid waste landfill and that is
constructed for the purpose of recycling solid waste or_ producing
renewable energy from landfill waste. For the purposes of this paragraph:
(a) "Mixed waste processing facility" means a solid waste facility
that is owned, operated or used for the treatment, processing or disposal
of solid waste, recyclable solid waste, very small quantity generator
waste or household hazardous waste. For the purposes of this subdivision,
“very small quantity generator waste", "household hazardous waste" and
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"solid waste facility" have the same meanings prescribed in section
49-701, except that solid waste facility does include a site that stores,
treats or processes paper, glass, wood, cardboard, household textiles,
scrap metal, plastic, vegetative waste, aluminum, steel or _ other
recyclable material.
(b) “Municipal solid waste landfill" has the same meaning
prescribed in section 49-701.
(c) "Recycling" means collecting, separating, cleansing, treating
and reconstituting recyclable solid waste that would otherwise become
solid waste, but does not include incineration or other similar processes.
(d) "Renewable energy" means usable energy, including electricity,
fuels, gas and heat, produced through the conversion of energy provided by
sunlight, water, wind, geothermal, heat, biomass, biogas, landfill gas or
another nonfossil renewable resource.
21. The gross proceeds of sales or gross income derived from a
contract to install containment structures. For the purposes of this
paragraph, "containment structure" means a structure that prevents,
monitors, controls or reduces noxious or harmful discharge into the
environment.
C. Entitlement to the deduction pursuant to subsection B, paragraph
7 of this section is subject to the following provisions:
1. A prime contractor may establish entitlement to the deduction by
both:
(a) Marking the invoice for the transaction to indicate that the
gross proceeds of sales or gross income derived from the transaction was
deducted from the base.
(b) Obtaining a certificate executed by the purchaser indicating
the name and address of the purchaser, the precise nature of the business
of the purchaser, the purpose for which the purchase was made, the
necessary facts to establish the deductibility of the property under
section 42-5061, subsection B, and a certification that the person
executing the certificate is authorized to do so on behalf of the
purchaser. The certificate may be disregarded if the prime contractor has
reason to believe that the information contained in the certificate is not
accurate or complete.
2. A person who does not comply with paragraph 1 of this subsection
may establish entitlement to the deduction by presenting facts necessary
to support the entitlement, but the burden of proof is on that person.
3. The department may prescribe a form for the certificate
described in paragraph 1, subdivision (b) of this subsection. The
department may also adopt rules that describe the transactions with
respect to which a person is not entitled to rely solely on _ the
information contained in the certificate provided in paragraph 1,
subdivision (b) of this subsection but must instead obtain such additional
information as required in order to be entitled to the deduction.
4. If a prime contractor is entitled to a deduction by complying
with paragraph 1 of this subsection, the department may require the
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purchaser who caused the execution of the certificate to establish the
accuracy and completeness of the information required to be contained in
the certificate that would entitle the prime contractor to the deduction.
If the purchaser cannot establish the accuracy and completeness of the
information, the purchaser is liable in an amount equal to any tax,
penalty and interest that the prime contractor would have been required to
pay under article 1 of this chapter if the prime contractor had not
complied with paragraph 1 of this subsection. Payment of the amount under
this paragraph exempts the purchaser from liability for any tax imposed
under article 4 of this chapter. The amount shall be treated as a
transaction privilege tax to the purchaser and as tax revenues collected
from the prime contractor in order to designate the distribution base for
purposes of section 42-5029.
D. Subcontractors or others who perform modification activities are
not subject to tax if they can demonstrate that the job was within the
control of a prime contractor or contractors or a dealership. of
manufactured buildings and that the prime contractor or dealership is
liable for the tax on the gross income, gross proceeds of sales or gross
receipts attributable to the job and from which the subcontractors or
others were paid.
E. Amounts received by a contractor for a project are excluded from
the contractor's gross proceeds of sales or gross income derived from the
business if the person who hired the contractor executes and provides a
certificate to the contractor stating that the person providing the
certificate is a prime contractor and is liable for the tax under article
1 of this chapter. The department shall prescribe the form of the
certificate. If the contractor has reason to believe that the information
contained on the certificate is erroneous or incomplete, the department
may disregard the certificate. If the person who provides the certificate
is not liable for the tax as a prime contractor, that person is
nevertheless deemed to be the prime contractor in lieu of the contractor
and is subject to the tax under this section on the gross receipts or
gross proceeds received by the contractor.
F. Every person engaging or continuing in this state in the
business of prime contracting or dealership of manufactured buildings
shall present to the purchaser of such prime contracting or manufactured
building a written receipt of the gross income or gross proceeds of sales
from such activity and shall separately state the taxes to be paid
pursuant to this section.
G. For the purposes of section 42-5032.01, the department shal]
separately account for revenues collected under the prime contracting
classification from any prime contractor engaged in the preparation or
construction of a multipurpose facility, and related infrastructure, that
is owned, operated or leased by the tourism and sports authority pursuant
to title 5, chapter 8.
H. For the purposes of section 42-5032.02, from and after
September 30, 2013, the department shall separately account for revenues
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reported and collected under the prime contracting classification from any
prime contractor engaged in the construction of any buildings and
associated improvements that are for the benefit of a manufacturing
facility. For the purposes of this subsection, "associated improvements”
and "manufacturing facility" have the same meanings prescribed in section
42-5032.02.
I. FOR THE PURPOSES OF SECTION 42-5032.02, FROM AND AFTER
SEPTEMBER 30, 2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES
REPORTED AND COLLECTED UNDER THE PRIME CONTRACTING CLASSIFICATION FROM ANY
PRIME CONTRACTOR ENGAGED IN THE CONSTRUCTION OF ANY BUILDINGS AND
ASSOCIATED IMPROVEMENTS THAT ARE FOR THE BENEFIT OF A MAJOR’ LEAGUE
BASEBALL FACILITY OWNED AND OPERATED BY A COUNTY STADIUM DISTRICT PURSUANT
TO TITLE 48, CHAPTER 26.
t- J. The gross proceeds of sales or gross income derived from a
contract for lawn maintenance services is not subject to tax under this
section if the contract does not include landscaping activities. Lawn
maintenance service is a service pursuant to section 42-5061, subsection
A, paragraph 1, and includes lawn mowing and edging, weeding, repairing
sprinkler heads or drip irrigation heads, seasonal replacement of flowers,
refreshing gravel, lawn dethatching, seeding winter lawns, leaf and debris
collection and removal, tree or shrub pruning or clipping, garden and
gravel raking and applying pesticides, as defined in section 3-361, and
fertilizer materials, as defined in section 3-262.
d> K. Except as provided in subsection ®- P of this section, the
gross proceeds of sales or gross income derived from landscaping
activities is subject to tax under this section. Landscaping includes
installing lawns, grading or leveling ground, installing gravel or
boulders, planting trees and other plants, felling trees, removing or
mulching tree stumps, removing other imbedded plants, building irrigation
berms, installing railroad ties and installing underground sprinkler or
watering systems.
> L. The portion of gross proceeds of sales or gross income
attributable to the actual direct costs of providing architectural or
engineering services that are incorporated in a contract is not subject to
tax under this section. For the purposes of this subsection, "direct
costs" means the portion of the actual costs that are directly expended in
providing architectural or engineering services.
t> M. Operating a landfill or a solid waste disposal facility is
not subject to taxation under this section, including filling, compacting
and creating vehicle access to and from cell sites within the landfill.
Constructing roads to a landfill or solid waste disposal facility and
constructing cells within a landfill or solid waste disposal facility may
be deemed prime contracting under this section.
> N. The following apply in determining the taxable situs of
sales of manufactured buildings:
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1. For sales in this state where the manufactured building dealer
contracts to deliver the building to a setup site or to perform the setup
in this state, the taxable situs is the setup site.
2. For sales in this state where the manufactured building dealer
does not contract to deliver the building to a setup site or does not
perform the setup, the taxable situs is the location of the dealership
where the building is delivered to the buyer.
3. For sales in this state where the manufactured building dealer
contracts to deliver the building to a setup site that is outside this
state, the situs is outside this state and the transaction is excluded
from tax.
tit 0. The gross proceeds of sales or gross income attributable to
a written contract for design phase services or professional services,
executed before modification begins and with terms, conditions and pricing
of all of these services separately stated in the contract from those for
construction phase services, is not subject to tax under this section,
regardless of whether the services are provided sequential to or
concurrent with prime contracting activities that are subject to tax under
this section. This subsection does not include the gross proceeds of
sales or gross income attributable to construction phase services. For
the purposes of this subsection:
1. "Construction phase services" means services for the execution
and completion of any modification, including the following:
(a) Administration or supervision of any modification performed on
the project, including team management and coordination, scheduling, cost
controls, submittal process management, field management, safety program,
close-out process and warranty period services.
(b) Administration or supervision of any modification performed
pursuant to a punch list. For the purposes of this subdivision, “punch
list" means minor items of modification work performed after substantial
completion and before final completion of the project.
(c) Administration or supervision of any modification performed
pursuant to change orders. For the purposes of this subdivision, "change
order" means a written instrument issued after execution of a contract for
modification work, providing for all of the following:
(i) The scope of a change in the modification work, contract for
modification work or other contract documents.
(ii) The amount of an adjustment, if any, to the guaranteed maximum
price as set in the contract for modification work. For the purposes of
this item, "guaranteed maximum price" means the amount guaranteed to be
the maximum amount due to a prime contractor for the performance of all
modification work for the project.
(iii) The extent of an adjustment, if any, to the contract time of
performance set forth in the contract.
(d) Administration or supervision of any modification performed
pursuant to change directives. For the purposes of this subdivision,
"change directive" means a written order directing a change in
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modification work before agreement on an adjustment of the guaranteed
maximum price or contract time.
(e) Inspection to determine the dates of substantial completion or
final completion.
(f) Preparation of any manuals, warranties, as-built drawings,
spares or other items the prime contractor must furnish pursuant to the
contract for modification work. For the purposes of this subdivision,
“as-built drawing" means a drawing that indicates field changes made to
adapt to field conditions, field changes resulting from change orders or
buried and concealed installation of piping, conduit and utility services.
(g) Preparation of status reports after modification work has begun
detailing the progress of work performed, including preparation of any of
the following:
(i) Master schedule updates.
(ii) Modification work cash flow projection updates.
(iii) Site reports made on a periodic basis.
(iv) Identification of discrepancies, conflicts or ambiguities in
modification work documents that require resolution.
(v) Identification of any health and safety issues that have arisen
in connection with the modification work.
(h) Preparation of daily logs of modification work, including
documentation of personnel, weather conditions and on-site occurrences.
(i) Preparation of any submittals or shop drawings used by the
prime contractor to illustrate details of the modification work performed.
(j) Administration or supervision of any other activities for which
a prime contractor receives a certificate for payment or certificate for
final payment based on the progress of modification work performed on the
project.
2. "Design phase services" means services for developing and
completing a design for a project that are not construction phase
services, including the following:
(a) Evaluating surveys, reports, test results or any other
information on-site conditions for the project, including physical
characteristics, legal limitations and utility locations for the site.
(b) Evaluating any criteria or programming objectives for the
project to ascertain requirements for the project, such as_ physical
requirements affecting cost or projected utilization of the project.
(c) Preparing drawings and specifications for architectural program
documents, schematic design documents, design development documents,
modification work documents or documents that identify the scope of or
materials for the project.
(d) Preparing an initial schedule for the project, excluding the
preparation of updates to the master schedule after modification work has
begun.
(e) Preparing preliminary estimates of costs of modification work
before completion of the final design of the project, including an
estimate or schedule of values for any of the following:
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(i) Labor, materials, machinery and equipment, tools, water, heat,
utilities, transportation and other facilities and services used in the
execution and completion of modification work, regardless of whether they
are temporary or permanent or whether they are incorporated in the
modifications.
(ii) The cost of labor and materials to be furnished by the owner
of the real property.
(iii) The cost of any equipment of the owner of the real property
to be assigned by the owner to the prime contractor.
(iv) The cost of any labor for installation of equipment separately
provided by the owner of the real property that has been designed,
specified, selected or specifically provided for in any design document
for the project.
(v) <Any fee paid by the owner of the real property to the prime
contractor pursuant to the contract for modification work.
(vi) Any bond and insurance premiums.
(vii) Any applicable taxes.
(viii) Any contingency fees for the prime contractor that may be
used before final completion of the project.
(f) Reviewing and evaluating cost estimates and project documents
to prepare recommendations on site use, site improvements, selection of
materials, building systems and equipment, modification feasibility,
availability of materials and labor, local modification activity as
related to schedules and time requirements for modification work.
(g) Preparing the plan and_- procedures’ for selection’ of
subcontractors, including any prequalification of subcontractor
candidates.
3. "Professional services" means architect services, engineer
services, geologist services, land surveying services or_ landscape
architect services that are within the scope of those services as provided
in title 32, chapter 1 and for which gross proceeds of sales or gross
income has not otherwise been deducted under subsection *- L of this
section.
6> P. The gross proceeds of sales or gross income derived from a
contract with the owner of real property or improvements to real property
for the maintenance, repair, replacement or alteration of existing
property is not subject to tax under this section if the contract does not
include modification activities, except as specified in this subsection.
The gross proceeds of sales or gross income derived from a de minimis
amount of modification activity does not subject the contract or any part
of the contract to tax under this section. For the purposes of this
subsection:
1. Tangible personal property that is incorporated or fabricated
into a project described in this subsection may be subject to the amount
prescribed in section 42-5008.01.
2. Each contract is independent of any other contract, except that
any change order that directly relates to the scope of work of the
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original contract shall be treated the same as the original contract under
this chapter, regardless of the amount of modification activities included
in the change order. If a change order does not directly relate to the
scope of work of the original contract, the change order shall be treated
as a new contract, with the tax treatment of any subsequent change order
to follow the tax treatment of the contract to which the scope of work of
the subsequent change order directly relates.
Py Q. Notwithstanding subsection ®- P of this section, a contract
that primarily involves surface or subsurface improvements to land and
that is subject to title 28, chapter 19, 20 or 22 or title 34, chapter 2
or 6 is taxable under this section, even if the contract also includes
vertical improvements. Agencies that are subject to procurement processes
under those provisions shall include in the request for proposals a notice
to bidders when those projects are subject to this. section. This
subsection does not apply to contracts with:
1. Community facilities districts, fire districts, county
television improvement districts, community park maintenance districts,
cotton pest control districts, hospital districts, pest abatement
districts, health service districts, agricultural improvement districts,
county free library districts, county jail districts, county stadium
districts, special health care districts, public. health services
districts, theme park districts or revitalization districts.
2. Any special taxing district not specified in paragraph 1 of this
subsection if the district does not substantially engage in the
modification, maintenance, repair, replacement or alteration of surface or
subsurface improvements to land.
@> R. Notwithstanding subsection f&- S, paragraph 10 of this
section, a person owning real property who enters into a contract for sale
of the real property, who is responsible to the new owner of the property
for modifications made to the property in the period subsequent to the
transfer of title and who receives a consideration for the modifications
is considered a prime contractor solely for purposes of taxing the gross
proceeds of sale or gross income received for the modifications made
subsequent to the transfer of title. The original owner's gross proceeds
of sale or gross income received for the modifications shall be determined
according to the following methodology:
1. If any part of the contract for sale of the property specifies
amounts to be paid to the original owner for the modifications to be made
in the period subsequent to the transfer of title, the amounts are
included in the original owner's gross proceeds of sale or gross income
under this section. Proceeds from the sale of the property that are
received after transfer of title and that are unrelated to the
modifications made subsequent to the transfer of title are not considered
gross proceeds of sale or gross income from the modifications.
2. If the original owner enters into an agreement separate from the
contract for sale of the real property providing for amounts to be paid to
the original owner for the modifications to be made in the _ period
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subsequent to the transfer of title to the property, the amounts are
included in the original owner's gross proceeds of sale or gross income
received for the modifications made subsequent to the transfer of title.
3. If the original owner is responsible to the new owner for
modifications made to the property in the period subsequent to the
transfer of title and derives any gross proceeds of sale or gross income
from the project subsequent to the transfer of title other than a delayed
disbursement from escrow unrelated to the modifications, it is presumed
that the amounts are received for the modifications made subsequent to the
transfer of title unless the contrary is established by the owner through
its books, records and papers kept in the regular course of business.
4. The tax base of the original owner is computed in the same
manner as a prime contractor under this section.
Ry S. For the purposes of this section:
1. "Alteration" means an activity or action that causes a direct
physical change to existing property. For the purposes of this paragraph:
(a) For existing property that is properly classified as class two
property under section 42-12002, paragraph 1, subdivision (c) or paragraph
2, subdivision (c) and that is used for residential purposes, class three
property under section 42-12003 or class four property under section
42-12004, this paragraph does not apply if the contract amount is more
than twenty-five percent of the most recent full cash value established
under chapter 13, article 2 of this title as of the date of any bid for
the work or the date of the contract, whichever value is higher.
(b) For all existing property other than existing property
described in subdivision (a) of this paragraph, this paragraph does not
apply if the contract amount is more than $750,000.
(c) Project elements may not be artificially separated from a
contract to cause a project to qualify as an alteration. The department
has the burden of proof that project elements have been artificially
separated from a contract.
(d) If a project for which the owner and the person performing the
work reasonably believed, at the inception of the contract, would be
treated as an alteration under this paragraph and, on completion of the
project, the project exceeded the applicable threshold described in either
subdivision (a) or (b) of this paragraph by not more than twenty-five
percent of the applicable threshold for any reason, the work performed
under the contract qualifies as an alteration.
(e) A change order that directly relates to the scope of work of
the original contract shall be treated as part of the original contract,
and the contract amount shall include any amount attributable to a change
order that directly relates to the scope of work of the original contract.
(f) Alteration does not include maintenance, repair or replacement.
2. "Contracting" means engaging in business as a contractor.
3. "Contractor" is synonymous with the term “builder" and means any
person or organization that undertakes to or offers to undertake to, or
purports to have the capacity to undertake to, or submits a bid to, or
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does personally or by or through others, modify any building, highway,
road, railroad, excavation, manufactured building or other’ structure,
project, development or improvement, or to do any part of such a project,
including the erection of scaffolding or other structure or works in
connection with such a project, and includes subcontractors and specialty
contractors. For all purposes of taxation or deduction, this definition
shall govern without regard to whether or not such a contractor is acting
in fulfillment of a contract.
4. “Manufactured building" means a manufactured home, mobile home
or factory-built building, as defined in section 41-4001.
5. "Manufactured building dealer" means a dealer who either:
(a) Is licensed pursuant to title 41, chapter 37, article 4 and who
sells manufactured buildings to the final consumer.
(b) Supervises, performs or coordinates the excavation = and
completion of site improvements or the setup of a manufactured building,
including the contracting, if any, with any subcontractor or specialty
contractor for the completion of the contract.
6. "Modification" means construction, grading and leveling ground,
wreckage or demolition. Modification does not include:
(a) Any project described in subsection ® P of this section.
(b) Any wreckage or demolition of existing property, or any other
activity that is a necessary component of a project described in
subsection 6 P of this section.
(c) Any mobilization or demobilization related to a _= project
described in subsection 6 P of this section, such as the erection or
removal of temporary facilities to be used by those persons working on the
project.
7. "Modify" means to make a modification or cause a modification to
be made.
8. "Owner" means the person that holds title to the real property
or improvements to real property that is the subject of the work, as well
as an agent of the title holder and any person with the authority to
perform or authorize work on the real property or improvements, including
a tenant and a property manager. For the purposes of subsection 6 P of
this section, a person who is hired by a general contractor that is hired
by an owner, or a subcontractor of a general contractor that is hired by
an owner, is considered to be hired by the owner.
9. “Prime contracting" means engaging in business as a_prime
contractor.
10. "Prime contractor" means a contractor who supervises, performs
or coordinates the modification of any building, highway, road, railroad,
excavation, manufactured building or other structure, project, development
or improvement, including the contracting, if any, with any subcontractors
or specialty contractors and who is responsible for the completion of the
contract. Except as provided in subsections E and @ R of this section, a
person who owns real property, who engages one or more contractors to
modify that real property and who does not itself modify that real
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property is not a prime contractor within the meaning of this paragraph
regardless of the existence of a contract for sale or the subsequent sale
of that real property.
11. "Replacement" means the removal from service of one component
or system of existing property or tangible personal property installed in
existing property, including machinery or equipment, and the installation
of a new component or system or new tangible personal property, including
machinery or equipment, that provides the same, a similar or an upgraded
design or functionality, regardless of the contract amount and regardless
of whether the existing component or system or existing tangible personal
property is physically removed from the existing property.
12. "Sale of a used manufactured building" does not include a lease
of a used manufactured building.
Sec. 11. Section 42-5159, Arizona Revised Statutes, is amended to
read:
42-5159. Exemptions
A. The tax levied by this article does not apply to the storage,
use or consumption in this state of the following described tangible
personal property:
1. Tangible personal property, sold in this state, the gross
receipts from the sale of which are included in the measure of the tax
imposed by articles 1 and 2 of this chapter.
2. Tangible personal property, the sale or use of which has already
been subjected to an excise tax at a rate equal to or exceeding the tax
imposed by this article under the laws of another state of the United
States. If the excise tax imposed by the other state is at a rate less
than the tax imposed by this article, the tax imposed by this article is
reduced by the amount of the tax already imposed by the other state.
3. Tangible personal property, the storage, use or consumption of
which the constitution or laws of the United States prohibit this state
from taxing or to the extent that the rate or imposition of tax is
unconstitutional under the laws of the United States.
4. Tangible personal property that directly enters into and becomes
an ingredient or component part of any manufactured, fabricated or
processed article, substance or commodity for sale in the regular course
of business.
5. Motor vehicle fuel and use fuel, the sales, distribution or use
of which in this state is subject to the tax imposed under title 28,
chapter 16, article 1, use fuel that is sold to or used by a person
holding a valid single trip use fuel tax permit issued under
section 28-5739, aviation fuel, the sales, distribution or use of which in
this state is subject to the tax imposed under section 28-8344, and jet
fuel, the sales, distribution or use of which in this state is subject to
the tax imposed under article 8 of this chapter.
6. Tangible personal property brought into this state by an
individual who was a nonresident at the time the property was purchased
for storage, use or consumption by the individual if the first actual use
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or consumption of the property was outside this state, unless the property
is used in conducting a business in this state.
7. Purchases of implants used as growth promotants and injectable
medicines, not already exempt under paragraph 16 of this subsection, for
livestock and poultry owned by, or in possession of, persons who are
engaged in producing livestock, poultry, or livestock or poultry products,
or who are engaged in feeding livestock or poultry commercially. For the
purposes of this paragraph, "poultry" includes ratites.
8. Purchases of:
(a) Livestock and poultry to persons engaging in the businesses of
farming, ranching or producing livestock or poultry.
(b) Livestock and poultry feed, salts, vitamins and other additives
sold to persons for use or consumption in the businesses of farming,
ranching and producing or feeding livestock or poultry or for use or
consumption in noncommercial boarding of livestock. For the purposes of
this paragraph, "poultry" includes ratites.
9. Propagative materials for use in commercially producing
agricultural, horticultural, viticultural or floricultural crops in this
state. For the purposes of this paragraph, "propagative materials":
(a) Includes seeds, seedlings, roots, bulbs, liners, transplants,
cuttings, soil and plant additives, agricultural minerals, auxiliary soil
and plant — substances, micronutrients, fertilizers, insecticides,
herbicides, fungicides, soil fumigants, desiccants, rodenticides,
adjuvants, plant nutrients and plant growth regulators.
(b) Except for use in commercially producing industrial hemp as
defined in section 3-311, does not include any propagative materials used
in producing any part, including seeds, of any plant of the genus
cannabis.
10. Tangible personal property not exceeding $200 in any one month
purchased by an individual at retail outside the continental limits of the
United States for the individual's own personal use and enjoyment.
11. Advertising supplements that are intended for sale with
newspapers published in this state and that have already been subjected to
an excise tax under the laws of another state in the United States that
equals or exceeds the tax imposed by this article.
12. Materials that are purchased by or for. publicly funded
libraries, including school district libraries, charter school libraries,
community college libraries, state university libraries or federal, state,
county or municipal libraries, for use by the public as follows:
(a) Printed or photographic materials, beginning August 7, 1985.
(b) Electronic or digital media materials, beginning July 17, 1994.
13. Tangible personal property purchased by:
(a) A hospital organized and operated exclusively for charitable
purposes, no part of the net earnings of which inures to the benefit of
any private shareholder or individual.
(b) A hospital operated by this state or a political subdivision of
this state.
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(c) A licensed nursing care institution or a licensed residential
care institution or a residential care facility operated in conjunction
with a licensed nursing care institution or a licensed kidney dialysis
center, which provides medical services, nursing services or _ health
related services and is not used or held for profit.
(d) A qualifying health care organization, as defined in section
42-5001, if the tangible personal property is used by the organization
solely to provide health and medical related educational and charitable
services.
(e) A qualifying health care organization as defined in section
42-5001 if the organization is dedicated to providing educational,
therapeutic, rehabilitative and family medical education training for
blind and visually impaired children and children with’ multiple
disabilities from the time of birth to age twenty-one.
(f) A nonprofit charitable organization that has qualified under
section 501(c)(3) of the United States internal revenue code and that
engages in and uses such property exclusively in programs for persons with
mental or physical disabilities if the programs are exclusively for
training, job placement, rehabilitation or testing.
(g) A person that is subject to tax under this chapter by reason of
being engaged in business classified under’ section 42-5075, or a
subcontractor working under the control of a person that is engaged in
business classified under section 42-5075, if the tangible’ personal
property is any of the following:
(i) Incorporated or fabricated by the person into a_ structure,
project, development or improvement in fulfillment of a contract.
(ii) Incorporated or fabricated by the person into any project
described in section 42-5075, subsection 6- P.
(iii) Used in environmental response or remediation activities
under section 42-5075, subsection B, paragraph 6.
(h) A person that is not subject to tax under section 42-5075 and
that has been provided a copy of a certificate described in section
42-5009, subsection L, if the property purchased is incorporated or
fabricated by the person into the real property, structure, project,
development or improvement described in the certificate.
(i) A nonprofit charitable organization that has qualified under
section 501(c)(3) of the internal revenue code if the property is
purchased from the parent or an affiliate organization that is located
outside this state.
(j) A qualifying community health center as defined in section
42-5001.
(k) A nonprofit charitable organization that has qualified under
section 501(c)(3) of the internal revenue code and that regularly serves
meals to the needy and indigent on a continuing basis at no cost.
(1) A person engaged in business under the transient lodging
classification if the property is a personal hygiene item or articles used
by human beings for food, drink or condiment, except alcoholic beverages,
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which are furnished without additional charge to and intended to be
consumed by the transient during the transient's occupancy.
(m) For taxable periods beginning from and after June 30, 2001, a
nonprofit charitable organization that has qualified under’ section
501(c)(3) of the internal revenue code and that provides residential
apartment housing for low-income persons over sixty-two years of age in a
facility that qualifies for a federal housing subsidy, if the tangible
personal property is used by the organization solely to_ provide
residential apartment housing for low-income persons over sixty-two years
of age in a facility that qualifies for a federal housing subsidy.
(n) A qualifying health sciences educational institution as defined
in section 42-5001.
(o) A person representing or working on behalf of any person
described in subdivision (a), (b), (c), (d), (e), (f), (i), (Jj), (k), (m)
or (n) of this paragraph, if the tangible’ personal property is
incorporated or fabricated into a project described in section 42-5075,
subsection 6 P.
14. Commodities, as defined by title 7 United States Code
section 2, that are consigned for resale in a warehouse in this state in
or from which the commodity is deliverable on a contract for future
delivery subject to the rules of a commodity market regulated by the
United States commodity futures trading commission.
15. Tangible personal property sold by:
(a) Any nonprofit organization organized and operated exclusively
for charitable purposes and recognized by the United States internal
revenue service under section 501(c)(3) of the internal revenue code.
(b) A nonprofit organization that is exempt from taxation under
section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if
the organization is associated with a major league baseball team or a
national touring professional golfing association and no part of the
organization's net earnings inures to the benefit of any private
shareholder or individual. This subdivision does not apply to an
organization that is owned, managed or controlled, in whole or in part, by
a major league baseball team, or its owners, officers, employees or
agents, or by a major league baseball association or professional golfing
association, or its owners, officers, employees or agents, unless the
organization conducted or operated exhibition events in this state before
January 1, 2018 that were exempt from transaction privilege tax under
section 42-5073.
(c) A nonprofit organization that is exempt from taxation under
section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the
internal revenue code if the organization sponsors or operates a rodeo
featuring primarily farm and ranch animals and no part of the
organization's net earnings inures to the benefit of any private
shareholder or individual.
16. Drugs and medical oxygen, including delivery hose, mask or
tent, regulator and tank, if prescribed by a member of the medical, dental
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or veterinarian profession who is licensed by law to administer such
substances.
17. Prosthetic appliances, as defined in section 23-501, prescribed
or recommended by a person who is licensed, registered or otherwise
professionally credentialed as a_ physician, dentist, podiatrist,
chiropractor, naturopath, homeopath, nurse or optometrist.
18. Prescription eyeglasses and contact lenses.
19. Insulin, insulin syringes and glucose test strips.
20. Hearing aids as defined in section 36-1901.
21. Durable medical equipment that has a centers for medicare and
medicaid services common procedure code, is designated reimbursable by
medicare, is prescribed by a person who is licensed under title 32,
chapter 7, 13, 17 or 29, can withstand repeated use, is primarily and
customarily used to serve a medical purpose, is generally not useful to a
person in the absence of illness or injury and is appropriate for use in
the home.
22. Food, as provided in and subject to the conditions of article 3
of this chapter and sections 42-5074 and 42-6017.
23. Items purchased with United States department of agriculture
coupons issued under the supplemental nutrition assistance program
pursuant to the food and nutrition act of 2008 (P.L. 88-525; 78 Stat. 703;
7 United States Code sections 2011 through 2036b) by the United States
department of agriculture food and nutrition service or food instruments
issued under section 17 of the child nutrition act (P.L. 95-627; 92 Stat.
3603; P.L. 99-661, section 4302; P.L. 111-296; 42 United States Code
section 1786).
24. Food and drink provided without monetary charge by a taxpayer
that is subject to section 42-5074 to its employees for their own
consumption on the premises during the employees’ hours of employment.
25. Tangible personal property that is used or consumed in a
business subject to section 42-5074 for human food, drink or condiment,
whether simple, mixed or compounded.
26. Food, drink or condiment and accessory tangible personal
property that are acquired for use by or provided to a school district or
charter school if they are to be either served or prepared and served to
persons for consumption on the premises of a public school in the school
district or on the premises of the charter school during school hours.
27. Lottery tickets or shares purchased pursuant to title 5,
chapter 5.1, article 1.
28. Textbooks, sold by a bookstore, that are required by any state
university or community college.
29. Magazines, other periodicals or other publications produced by
this state to encourage tourist travel.
30. Paper machine clothing, such as forming fabrics and dryer
felts, purchased by a paper manufacturer and directly used or consumed in
paper manufacturing.
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31. Coal, petroleum, coke, natural gas, virgin fuel oil and
electricity purchased by a qualified environmental technology
manufacturer, producer or processor as defined in section 41-1514.02 and
directly used or consumed in generating or providing on-site power or
energy solely for environmental technology manufacturing, producing or
processing or environmental protection. This paragraph applies for twenty
full consecutive calendar or fiscal years from the date the first paper
manufacturing machine is placed in service. In the case of an
environmental technology manufacturer, producer or processor that does not
manufacture paper, the time period begins with the date the first
manufacturing, processing or production equipment is placed in service.
32. Motor vehicles that are removed from inventory by a motor
vehicle dealer as defined in section 28-4301 and that are provided to:
(a) Charitable or educational institutions that are exempt from
taxation under section 501(c)(3) of the internal revenue code.
(b) Public educational institutions.
(c) State universities or affiliated organizations of a_ state
university if no part of the organization's net earnings inures to the
benefit of any private shareholder or individual.
33. Natural gas or liquefied petroleum gas used to propel a motor
vehicle.
34. Machinery, equipment, technology or related supplies that are
only useful to assist a person with a physical disability as defined in
section 46-191 or a person who has a developmental disability as defined
in section 36-551 or has a head injury as defined in section 41-3201 to be
more independent and functional.
35. Liquid, solid or gaseous chemicals used in manufacturing,
processing, fabricating, mining, refining, metallurgical operations,
research and development and, beginning on January 1, 1999, printing, if
using or consuming the chemicals, alone or as part of an integrated system
of chemicals, involves direct contact with the materials from which the
product is produced for the purpose of causing or allowing a chemical or
physical change to occur in the materials as part of the production
process. This paragraph does not include chemicals that are used or
consumed in activities such as packaging, storage or transportation but
does not affect any exemption for such chemicals that is otherwise
provided by this section. For the purposes of this paragraph, "printing"
means a commercial printing operation and includes job printing,
engraving, embossing, copying and bookbinding.
36. Food, drink and condiment purchased for consumption within the
premises of any prison, jail or other institution under the jurisdiction
of the state department of corrections, the department of public safety,
the department of juvenile corrections or a county sheriff.
37. A motor vehicle and any repair and replacement parts and
tangible personal property becoming a part of such motor vehicle sold to a
motor carrier that is subject to a fee prescribed in title 28, chapter 16,
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article 4 and that is engaged in the business of leasing or renting such a
property.
38. Tangible personal property that is or directly enters into and
becomes an ingredient or component part of cards used as prescription plan
identification cards.
39. Overhead materials or other tangible personal property that is
used in performing a contract between the United States government and a
manufacturer, modifier, assembler or repairer, including property used in
performing a subcontract with a government contractor who is a
manufacturer, modifier, assembler or repairer, to which title passes to
the government under the terms of the contract or subcontract. For the
purposes of this paragraph:
(a) “Overhead materials" means tangible personal property, the
gross proceeds of sales or gross income derived from which would otherwise
be included in the retail classification, that is used or consumed in
performing a contract, the cost of which is charged to an overhead expense
account and allocated to various contracts based on generally accepted
accounting principles and consistent with government contract accounting
standards.
(b) "Subcontract" means an agreement between a contractor and any
person who is not an employee of the contractor for furnishing of supplies
or services that, in whole or in part, are necessary to perform one or
more government contracts, or under which any portion of the contractor's
obligation under one or more government contracts is performed, undertaken
or assumed, and that includes provisions causing title to overhead
materials or other tangible personal property used in performing the
subcontract to pass to the government or that includes provisions
incorporating such title passing clauses in a government contract into the
subcontract.
40. Through December 31, 1994, tangible personal property sold
pursuant to a personal property liquidation transaction, as defined in
section 42-5061. From and after December 31, 1994, tangible personal
property sold pursuant to a personal property liquidation transaction, as
defined in section 42-5061, if the gross proceeds of the sales were
included in the measure of the tax imposed by article 1 of this chapter or
if the personal property liquidation was a casual activity or transaction.
41. Wireless telecommunications equipment that is held for sale or
transfer to a customer as an inducement to enter into or continue a
contract for telecommunications services that are taxable under section
42-5064.
42. Alternative fuel, as defined in section 1-215, purchased by a
used oil fuel burner who has received a permit to burn used oil or used
oil fuel under section 49-426 or 49-480.
43. Tangible personal property purchased by a commercial airline
and consisting of food, beverages and condiments and accessories used for
serving the food and beverages, if those items are to be provided without
additional charge to passengers for consumption in flight. For the
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purposes of this paragraph, "commercial airline" means a person holding a
federal certificate of public convenience and necessity or foreign air
carrier permit for air transportation to transport persons, property or
United States mail in intrastate, interstate or foreign commerce.
44. Alternative fuel vehicles if the vehicle was manufactured as a
diesel fuel vehicle and converted to operate on alternative fuel and
equipment that is installed in a conventional diesel fuel motor vehicle to
convert the vehicle to operate on an alternative fuel, as defined in
section 1-215.
45. Gas diverted from a pipeline, by a person engaged in the
business of:
(a) Operating a natural or artificial gas pipeline, and used or
consumed for the sole purpose of fueling compressor equipment that
pressurizes the pipeline.
(b) Converting natural gas into liquefied natural gas, and used or
consumed for the sole purpose of fueling compressor equipment used in the
conversion process.
46. Tangible personal property that is excluded, exempt’ or
deductible from transaction privilege tax pursuant to section 42-5063.
47. Tangible personal property purchased to be incorporated or
installed as part of environmental response or remediation activities
under section 42-5075, subsection B, paragraph 6.
48. Tangible personal property sold by a nonprofit organization
that is exempt from taxation under section 501(c)(6) of the internal
revenue code if the organization produces, organizes or promotes cultural
or civic related festivals or events and no part of the organization's net
earnings inures to the benefit of any private shareholder or individual.
49. Prepared food, drink or condiment donated by a restaurant as
classified in section 42-5074, subsection A to a nonprofit charitable
organization that has qualified under section 501(c)(3) of the internal
revenue code and that regularly serves meals to the needy and indigent on
a continuing basis at no cost.
50. Application services that are designed to assess or test
student learning or to promote curriculum design or enhancement purchased
by or for any school district, charter school, community college or state
university. For the purposes of this paragraph:
(a) "Application services" means software applications provided
remotely using hypertext transfer protocol or another network protocol.
(b) "Curriculum design or enhancement" means planning, implementing
or reporting on courses of study, lessons, assignments or other learning
activities.
51. Motor vehicle fuel and use fuel to a qualified business under
section 41-1516 for off-road use in harvesting, processing or transporting
qualifying forest products removed from qualifying projects as defined in
section 41-1516.
52. Repair parts installed in equipment used directly by a
qualified business under section 41-1516 in harvesting, processing or
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transporting qualifying forest products removed from qualifying projects
as defined in section 41-1516.
53. Renewable energy credits or any other unit created to track
energy derived from renewable energy resources. For the purposes of this
paragraph, "renewable energy credit" means a unit created administratively
by the corporation commission or governing body of a public power entity
to track kilowatt hours of electricity derived from a renewable energy
resource or the kilowatt hour equivalent of conventional energy resources
displaced by distributed renewable energy resources.
54. Coal acquired from an owner or operator of a power plant by a
person that is responsible for refining coal if both of the following
apply:
(a) The transfer of title or possession of the coal is for the
purpose of refining the coal.
(b) The title or possession of the coal is transferred back to the
owner or operator of the power plant after completion of the coal refining
process. For the purposes of this subdivision, "coal refining process"
means the application of a coal additive system that aids the reduction of
power plant emissions during the combustion of coal and the treatment of
flue gas.
55. Tangible personal property incorporated or fabricated into a
project described in section 42-5075, subsection @- P that is located
within the exterior boundaries of an Indian reservation for which the
owner, as defined in section 42-5075, of the project is an Indian tribe or
an affiliated Indian. For the purposes of this paragraph:
(a) “Affiliated Indian" means an individual Native American Indian
who is duly registered on the tribal rolls of the Indian tribe for whose
benefit the Indian reservation was established.
(b) “Indian reservation" means all lands that are within the limits
of areas set aside by the United States for the exclusive use and
occupancy of an Indian tribe by treaty, law or executive order and that
are recognized as Indian reservations by the United States department of
the interior.
(c) “Indian tribe" means any organized nation, tribe, band or
community that is recognized as an Indian tribe by the United States
department of the interior and includes any entity formed under the laws
of the Indian tribe.
56. Cash equivalents, precious metal bullion and monetized bullion
purchased by the ultimate consumer, but coins or other forms of money for
manufacture into jewelry or works of art are subject to tax, and tangible
personal property that is purchased through the redemption of any cash
equivalent by the holder as a means of payment for goods that are subject
to tax under this article is subject to tax. For the purposes of this
paragraph:
(a) “Cash equivalents" means items, whether or not negotiable, that
are sold to one or more persons, through which a value denominated in
money is purchased in advance and that may be redeemed in full or in part
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for tangible personal property, intangibles or services. Cash equivalents
include gift cards, stored value cards, gift certificates, vouchers,
traveler's checks, money orders or other tangible instruments or orders.
Cash equivalents do not include either of the following:
(i) Items that are sold to one or more persons and through which a
value is not denominated in money.
(ii) Prepaid calling cards for telecommunications services.
(b) "“Monetized bullion" means coins and other forms of money that
are manufactured from gold, silver or other metals and that have been or
are used as a medium of exchange in this or another state, the United
States or a foreign nation.
(c) "Precious metal bullion" means precious metal, including gold,
silver, platinum, rhodium and palladium, that has been smelted or refined
so that its value depends on its contents and not on its form.
B. In addition to the exemptions allowed by subsection A of this
section, the following categories of tangible personal property are also
exempt:
1. Machinery, or equipment, used directly in manufacturing,
processing, fabricating, job printing, refining or metallurgical
operations. The terms "manufacturing", "processing", "fabricating", "job
printing", "refining" and "metallurgical" as used in this paragraph refer
to and include those operations commonly understood within their ordinary
meaning. "Metallurgical operations" includes leaching, milling,
precipitating, smelting and refining.
2. Machinery, or equipment, used directly in the process of
extracting ores or minerals from the earth for commercial purposes,
including equipment required to prepare the materials for extraction and
handling, loading or transporting such extracted material to the surface.
"Mining" includes underground, surface and open pit operations for
extracting ores and minerals.
3. Tangible personal property sold to persons engaged in business
classified under the telecommunications classification under’ section
42-5064, including a person representing or working on behalf of such a
person in a manner described in section 42-5075, subsection @- P, and
consisting of central office switching equipment, switchboards, private
branch exchange equipment, microwave radio equipment and carrier equipment
including optical fiber, coaxial cable and other transmission media that
are components of carrier systems.
4. Machinery, equipment or transmission lines used directly in
producing or transmitting electrical power, but not including
distribution. Transformers and control equipment used at transmission
substation sites constitute equipment used in producing or transmitting
electrical power.
5. Machinery and equipment used directly for energy storage for
later electrical use. For the purposes of this paragraph:
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(a) "Electric utility scale" means a person that is engaged in a
business activity described in section 42-5063, subsection A or _ such
person's equipment or wholesale electricity suppliers.
(b) "Energy storage" means commercially available technology for
electric utility scale that is capable of absorbing energy, storing energy
for a period of time and thereafter dispatching the energy and that uses
mechanical, chemical or thermal processes to store energy.
(c) “Machinery and equipment used directly" means all machinery and
equipment that are used for electric energy storage from the point of
receipt of such energy in order to facilitate storage of the electric
energy to the point where the electric energy is released.
6. Neat animals, horses, asses, sheep, ratites, swine or goats used
or to be used as breeding or production stock, including sales of
breedings or ownership shares in such animals used for breeding or
production.
7. Pipes or valves four inches in diameter or larger used to
transport oil, natural gas, artificial gas, water or coal. slurry,
including compressor units, regulators, machinery and equipment, fittings,
seals and any other part that is used in operating the pipes or valves.
8. Aircraft, navigational and communication instruments and other
accessories and related equipment sold to:
(a) A person:
(i) Holding, or exempted by federal law from obtaining, a federal
certificate of public convenience and necessity for use as, in conjunction
with or becoming part of an aircraft to be used to transport persons for
hire in intrastate, interstate or foreign commerce.
(ii) That is certificated or licensed under’ federal aviation
administration regulations (14 Code of Federal Regulations part 121 or
135) as a scheduled or unscheduled carrier of persons for hire for use as
or in conjunction with or becoming part of an aircraft to be used to
transport persons for hire in intrastate, interstate or foreign commerce.
(iii) Holding a foreign air carrier permit for air transportation
for use as or in conjunction with or becoming a part of aircraft to be
used to transport persons, property or United States mail in intrastate,
interstate or foreign commerce.
(iv) Operating an aircraft to transport persons in any manner for
compensation or hire, or for use in a fractional ownership program that
meets the requirements of federal aviation administration regulations (14
Code of Federal Regulations part 91, subpart K), including as an air
carrier, a foreign air carrier or a commercial operator or under a
restricted category, within the meaning of 14 Code of Federal Regulations,
regardless of whether the operation or aircraft is regulated or certified
under part 91, 119, 121, 133, 135, 136 or 137, or another part of 14 Code
of Federal Regulations.
(v) That will lease or otherwise transfer operational control,
within the meaning of federal aviation administration operations
specification A008, or its successor, of the aircraft, instruments or
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accessories to one or more persons described in item (i), (ii), (iii) or
(iv) of this subdivision, subject to section 42-5009, subsection Q.
(b) Any foreign government.
(c) Persons who are not residents of this state and who will not
use such property in this state other than in removing such property from
this state. This subdivision also applies to corporations that are not
incorporated in this state, regardless of maintaining a place of business
in this state, if the principal corporate office is located outside this
state and the property will not be used in this state other than in
removing the property from this state.
9. Machinery, tools, equipment and related supplies used or
consumed directly in repairing, remodeling or maintaining aircraft,
aircraft engines or aircraft component parts by or on behalf of a
certificated or licensed carrier of persons or property.
10. Rolling stock, rails, ties and signal control equipment used
directly to transport persons or property.
11. Machinery or equipment used directly to drill for oil or gas or
used directly in the process of extracting oil or gas from the earth for
commercial purposes.
12. Buses or other urban mass transit vehicles that are used
directly to transport persons or property for hire or pursuant to a
governmentally adopted and controlled urban mass transportation program
and that are sold to bus companies holding a federal certificate of
convenience and necessity or operated by any city, town or other
governmental entity or by any person contracting with such governmental
entity as part of a governmentally adopted and controlled program to
provide urban mass transportation.
13. Groundwater measuring devices required under section 45-604.
14, Machinery and equipment consisting of agricultural aircraft,
tractors, off-highway vehicles, tractor-drawn implements, self-powered
implements, machinery and equipment necessary for extracting milk, and
machinery and equipment necessary for cooling milk and livestock, and drip
irrigation lines not already exempt under paragraph 7 of this subsection
and that are used for commercially producing agricultural, horticultural,
viticultural and floricultural crops and products in this state. For the
purposes of this paragraph:
(a) "Off-highway vehicles" means off-highway vehicles as defined in
section 28-1171 that are modified at the time of sale to function as a
tractor or to tow tractor-drawn implements and that are not equipped with
a modified exhaust system to increase horsepower or speed or an engine
that is more than one thousand cubic centimeters or that have a maximum
speed of fifty miles per hour or less.
(b) "“Self-powered implements" includes machinery and equipment that
are electric-powered.
15. Machinery or equipment used in research and development. For
the purposes of this paragraph, “research and development" means basic and
applied research in the sciences and engineering, and designing,
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developing or testing prototypes, processes or new products, including
research and development of computer software that is embedded in or an
integral part of the prototype or new product or that is required for
machinery or equipment otherwise exempt under this section to function
effectively. Research and development do not’ include manufacturing
quality control, routine consumer product testing, market research, sales
promotion, sales service, research in social sciences or psychology,
computer software research that is not included in the definition of
research and development, or other’ nontechnological activities or
technical services.
16. Tangible personal property that is used by either of the
following to receive, store, convert, produce, generate, decode, encode,
control or transmit telecommunications information:
(a) Any direct broadcast satellite television or data transmission
service that operates pursuant to 47 Code of Federal Regulations part 25.
(b) Any satellite television or data transmission facility, if both
of the following conditions are met:
(i) Over two-thirds of the transmissions, measured in megabytes,
transmitted by the facility during the test period were transmitted to or
on behalf of one or more direct broadcast satellite television or data
transmission services that operate pursuant to 47 Code of Federal
Regulations part 25.
(ii) Over two-thirds of the transmissions, measured in megabytes,
transmitted by or on behalf of those direct broadcast television or data
transmission services during the test period were transmitted by the
facility to or on behalf of those services.
For the purposes of subdivision (b) of this paragraph, “test period" means
the three hundred sixty-five day period beginning on the later of the date
on which the tangible personal property is purchased or the date on which
the direct broadcast satellite television or data transmission service
first transmits information to its customers.
17. Clean rooms that are used for manufacturing, processing,
fabrication or research and development, as defined in paragraph 15 of
this subsection, of semiconductor products. For the purposes of this
paragraph, “clean room" means all property that comprises or creates an
environment where humidity, temperature, particulate matter and
contamination are precisely controlled within specified parameters,
without regard to whether the property is actually contained within that
environment or whether any of the property is affixed to or incorporated
into real property. Clean room:
(a) Includes the integrated systems, fixtures, piping, movable
partitions, lighting and all property that is necessary or adapted to
reduce contamination or to control airflow, temperature, humidity,
chemical purity or other environmental conditions or manufacturing
tolerances, as well as the production machinery and equipment operating in
conjunction with the clean room environment.
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(b) Does not include the building or other permanent, nonremovable
component of the building that houses the clean room environment.
18. Machinery and equipment that are used directly in feeding
poultry, environmentally controlling housing for poultry, moving eggs
within a production and packaging facility or sorting or cooling eggs.
This exemption does not apply to vehicles used for transporting eggs.
19. Machinery or equipment, including related structural components
and containment structures, that is employed in connection’ with
manufacturing, processing, fabricating, job printing, refining, mining,
natural gas pipelines, metallurgical operations, telecommunications,
producing or transmitting electricity or research and development and that
is used directly to meet or exceed rules or regulations adopted by the
federal energy regulatory commission, the United States environmental
protection agency, the United States nuclear regulatory commission, the
Arizona department of environmental quality or a political subdivision of
this state to prevent, monitor, control or reduce land, water or air
pollution. For the purposes of this paragraph, "containment structure"
means a structure that prevents, monitors, controls or reduces noxious or
harmful discharge into the environment.
20. Machinery and equipment that are used in commercially producing
livestock, livestock products or agricultural, horticultural, viticultural
or floricultural crops or products in this state, including production by
a person representing or working on behalf of such a person in a manner
described in section 42-5075, subsection @ P, if the machinery and
equipment are used directly and primarily to prevent, monitor, control or
reduce air, water or land pollution.
21. Machinery or equipment that enables a television station to
originate and broadcast or to receive and broadcast digital television
signals and that was purchased to facilitate compliance with the
telecommunications act of 1996 (P.L. 104-104; 110 Stat. 56; 47 United
States Code section 336) and the federal communications commission order
issued April 21, 1997 (47 Code of Federal Regulations part 73). This
paragraph does not exempt any of the following:
(a) Repair or replacement parts purchased for the machinery or
equipment described in this paragraph.
(b) Machinery or equipment purchased to replace machinery or
equipment for which an exemption was previously claimed and taken under
this paragraph.
(c) Any machinery or equipment purchased after the television
station has ceased analog broadcasting, or purchased after November 1,
2009, whichever occurs first.
22. Qualifying equipment that is purchased from and after June 30,
2004 through December 31, 2026 by a qualified business under section
41-1516 for harvesting or processing qualifying forest products removed
from qualifying projects as defined in section 41-1516. To qualify for
this exemption, the qualified business must obtain and present its
certification from the Arizona commerce authority at the time of purchase.
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23. Machinery, equipment, materials and other tangible personal
property used directly and predominantly to construct a qualified
environmental technology manufacturing, producing or processing facility
as described in section 41-1514.02. This paragraph applies for ten full
consecutive calendar or fiscal years after the start of initial
construction.
24. Computer data center equipment sold to the owner, operator or
qualified colocation tenant of a computer data center that is certified by
the Arizona commerce authority under section 41-1519 or an authorized
agent of the owner, operator or qualified colocation tenant during the
qualification period for use in the qualified computer data center. For
the purposes of this paragraph, “computer data center", “computer data
center equipment", “qualification period" and "qualified colocation
tenant" have the same meanings prescribed in section 41-1519.
C. The exemptions provided by subsection B of this section do not
include:
1. Expendable materials. For the purposes of this paragraph,
expendable materials do not include any of the categories of tangible
personal property specified in subsection B of this section regardless of
the cost or useful life of that property.
2. Janitorial equipment and hand tools.
3. Office equipment, furniture and supplies.
4. Tangible personal property used in selling or distributing
activities, other than the telecommunications transmissions described in
subsection B, paragraph 16 of this section.
5. Motor vehicles required to be licensed by this state, except
buses or other urban mass transit vehicles specifically exempted pursuant
to subsection B, paragraph 12 of this section, without regard to the use
of such motor vehicles.
6. Shops, buildings, docks, depots and all other materials of
whatever kind or character not specifically included as exempt.
7. Motors and pumps used in drip irrigation systems.
8. Machinery and equipment or tangible personal property used by a
contractor in performing a contract.
D. The following shall be deducted in computing the purchase price
of electricity by a retail electric customer from a utility business:
1. Revenues received from sales of ancillary services, electric
distribution services, electric generation services, electric transmission
services and other services related to providing electricity to a retail
electric customer who is located outside this state for use outside this
state if the electricity is delivered to a point of sale outside this
state.
2. Revenues received from providing electricity, including
ancillary services, electric distribution services, electric generation
services, electric transmission services and other services related to
providing electricity with respect to which the transaction privilege tax
imposed under section 42-5063 has been paid.
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E. The tax levied by this article does not apply to the purchase of
solar energy devices from a retailer that is registered with the
department as a solar energy retailer or a solar energy contractor.
F. The following shall be deducted in computing the purchase price
of electricity by a retail electric customer from a utility business:
1. Fees charged by a municipally owned utility to persons
constructing residential, commercial or industrial developments’ or
connecting residential, commercial or industrial developments to a
municipal utility system or systems if the fees are segregated and used
only for capital expansion, system enlargement or debt service of the
utility system or systems.
2. Reimbursement or contribution compensation to any person or
persons owning a utility system for property and equipment installed to
provide utility access to, on or across the land of an actual utility
consumer if the property and equipment become the property of the utility.
This deduction shall not exceed the value of such property and equipment.
G. The tax levied by this article does not apply to the purchase
price of electricity, natural gas or liquefied petroleum gas by:
1. A qualified manufacturing or smelting business. A utility that
claims this deduction shall report each month, on a form prescribed by the
department, the name and address of each qualified manufacturing or
smelting business for which this deduction is taken. This paragraph
applies to gas transportation services. For the purposes of this
paragraph:
(a) "Gas transportation services" means the services of
transporting natural gas to a natural gas customer or to a natural gas
distribution facility if the natural gas was purchased from a supplier
other than the utility.
(b) "Manufacturing" means the performance as a business of an
integrated series of operations that places tangible personal property in
a form, composition or character different from that in which it was
acquired and transforms it into a different product with a distinctive
name, character or use. Manufacturing does not include job printing,
publishing, packaging, mining, generating electricity or operating a
restaurant.
(c) “Qualified manufacturing or smelting business" means one of the
following:
(i) A business that manufactures or smelts tangible products in
this state, of which at least fifty-one percent of the manufactured or
smelted products will be exported out of state for incorporation into
another product or sold out of state for a final sale.
(ii) A business that derives at least fifty-one percent of its
gross income from the sale of manufactured or smelted products
manufactured or smelted by the business.
(iii) A business that uses at least fifty-one percent of its square
footage in this state for manufacturing or smelting and _ business
activities directly related to manufacturing or smelting.
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(iv) A business that employs at least fifty-one percent of its
workforce in this state in manufacturing or smelting and _ business
activities directly related to manufacturing or smelting.
(v) A business that uses at least fifty-one percent of the value of
its capitalized assets in this state, as reflected on the business's books
and records, for manufacturing or smelting and business activities
directly related to manufacturing or smelting.
(d) "Smelting" means to melt or fuse a metalliferous mineral, often
with an accompanying chemical change, usually to separate the metal.
2. A business that operates an international operations center in
this state and that is certified by the Arizona commerce authority
pursuant to section 41-1520.
H. A city or town may exempt proceeds from sales of paintings,
sculptures or similar works of fine art if such works of fine art are sold
by the original artist. For the purposes of this subsection, fine art
does not include an art creation such as jewelry, macrame, glasswork,
pottery, woodwork, metalwork, furniture or clothing if the art creation
has a dual purpose, both aesthetic and utilitarian, whether sold by the
artist or by another person.
I. For the purposes of subsection B of this section:
1. “Agricultural aircraft" means an aircraft that is built for
agricultural use for the aerial application of pesticides or fertilizer or
for aerial seeding.
2. "Aircraft" includes:
(a) An airplane flight simulator that is approved by the federal
aviation administration for use as a phase II or higher flight simulator
under appendix H, 14 Code of Federal Regulations part 121.
(b) Tangible personal property that is permanently affixed or
attached as a component part of an aircraft that is owned or operated by a
certificated or licensed carrier of persons or property.
3. "Other accessories and related equipment” includes aircraft
accessories and equipment such as ground service equipment that physically
contact aircraft at some point during the overall carrier operation.
J. For the purposes of subsection D of this section, "ancillary
services", "electric distribution service", "electric generation service",
“electric transmission service" and "other services" have the same
meanings prescribed in section 42-5063.
Sec. 12. Title 42, chapter 6, article 1, Arizona Revised Statutes,
is amended by adding section 42-6018, to read:
42-6018. Distribution of revenue for county stadium district
from city or town excise taxes
A. BEGINNING OCTOBER 1, 2025 AND EACH MONTH THEREAFTER, A CITY OR
TOWN SHALL TRANSMIT FROM THE AMOUNT COLLECTED PURSUANT TO THIS ARTICLE THE
AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM
DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE
COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.
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B. THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION
IS THE TOTAL AMOUNT OF TRANSACTION PRIVILEGE, SALES, USE, FRANCHISE OR
OTHER SIMILAR TAX OR FEES COLLECTED ON BEHALF OF THE CITY OR TOWN FROM
PERSONS ENGAGED IN THE FOLLOWING BUSINESS ACTIVITIES AT, OR WITH RESPECT
TO EVENTS HELD AT, A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED AND
OPERATED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26:
1. SELLING TANGIBLE PERSONAL PROPERTY AT RETAIL.
2. OPERATING OR CONDUCTING THEATERS, MOVIES, OPERAS, SHOWS OF ANY
TYPE OR NATURE, EXHIBITIONS, CONCERTS, CARNIVALS, CIRCUSES, AMUSEMENT
PARKS, MENAGERIES, FAIRS, RACES, CONTESTS, GAMES, BILLIARD OR POOL
PARLORS, BOWLING ALLEYS, PUBLIC DANCES, DANCE HALLS, BOXING AND WRESTLING
MATCHES, SKATING RINKS, TENNIS COURTS, VIDEO GAMES, PINBALL MACHINES OR
SPORTS EVENTS OR ANY OTHER BUSINESS CHARGING ADMISSION OR USER FEES FOR
EXHIBITION, AMUSEMENT OR ENTERTAINMENT.
3. OPERATING A RESTAURANT, DINING CAR, DINING ROOM, LUNCHROOM,
MOBILE FOOD UNIT, LUNCH STAND, SODA FOUNTAIN, CATERING SERVICE OR SIMILAR
ESTABLISHMENT WHERE ARTICLES OF FOOD OR DRINK ARE SOLD FOR CONSUMPTION ON
OR OFF THE PREMISES.
4. PRIME CONTRACTING.
C. FOR THE PURPOSES OF THIS SECTION, FROM AND AFTER DECEMBER 30,
2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED FROM
THE BUSINESSES PRESCRIBED IN SUBSECTION B OF THIS SECTION ON THE PREMISES
OF A MAJOR LEAGUE BASEBALL FACILITY OWNED OR OPERATED BY A COUNTY STADIUM
DISTRICT PURSUANT TO TITLE 48, CHAPTER 26.
Sec. 13. Title 42, chapter 6, article 3, Arizona Revised Statutes,
is amended by adding section 42-6113, to read:
42-6113. Distribution of revenue for county stadium district
from county excise taxes
A. BEGINNING OCTOBER 1, 2025 AND EACH MONTH THEREAFTER, A COUNTY
SHALL TRANSMIT FROM THE AMOUNT COLLECTED PURSUANT TO THIS ARTICLE THE
AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM
DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE
COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.
B. THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION
IS THE TOTAL AMOUNT OF COUNTY EXCISE TAXES COLLECTED ON BEHALF OF THE
COUNTY FROM PERSONS ENGAGED IN THE FOLLOWING BUSINESS ACTIVITIES AT, OR
WITH RESPECT TO EVENTS HELD AT, A MAJOR LEAGUE BASEBALL FACILITY THAT IS
OWNED AND OPERATED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48,
CHAPTER 26:
1. SELLING TANGIBLE PERSONAL PROPERTY AT RETAIL.
2. OPERATING OR CONDUCTING THEATERS, MOVIES, OPERAS, SHOWS OF ANY
TYPE OR NATURE, EXHIBITIONS, CONCERTS, CARNIVALS, CIRCUSES, AMUSEMENT
PARKS, MENAGERIES, FAIRS, RACES, CONTESTS, GAMES, BILLIARD OR POOL
PARLORS, BOWLING ALLEYS, PUBLIC DANCES, DANCE HALLS, BOXING AND WRESTLING
MATCHES, SKATING RINKS, TENNIS COURTS, VIDEO GAMES, PINBALL MACHINES OR
SPORTS EVENTS OR ANY OTHER BUSINESS CHARGING ADMISSION OR USER FEES FOR
EXHIBITION, AMUSEMENT OR ENTERTAINMENT.
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3. OPERATING A RESTAURANT, DINING CAR, DINING ROOM, LUNCHROOM,
MOBILE FOOD UNIT, LUNCH STAND, SODA FOUNTAIN, CATERING SERVICE OR SIMILAR
ESTABLISHMENT WHERE ARTICLES OF FOOD OR DRINK ARE SOLD FOR CONSUMPTION ON
OR OFF THE PREMISES.
4. PRIME CONTRACTING.
C. FOR THE PURPOSES OF THIS SECTION, FROM AND AFTER DECEMBER 30,
2025, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED
PURSUANT TO SECTIONS 42-6105.01 AND 42-6109.01 FROM THE BUSINESSES
PRESCRIBED IN SUBSECTION B OF THIS SECTION ON THE PREMISES OF A MAJOR
LEAGUE BASEBALL FACILITY OWNED OR OPERATED BY A COUNTY STADIUM DISTRICT
PURSUANT TO TITLE 48, CHAPTER 26.
Sec. 14. Section 43-206, Arizona Revised Statutes, is amended to
read:
43-206. Urban revenue sharing fund; allocation; distribution;
withholding
A. The urban revenue sharing fund is established. Through fiscal
year 2022-2023, the fund consists of an amount equal to fifteen percent of
the net proceeds of the state income taxes for the fiscal year two years
preceding the current fiscal year. Beginning in fiscal year 2023-2024,
the fund consists of an amount equal to eighteen percent of the net
proceeds of the state income taxes for the fiscal year two years preceding
the current fiscal year. The fund shall be distributed to incorporated
cities and towns as provided in this section, except that a city or town
shall receive at least an amount equal to what a city or town with a
population of fifteen hundred or more persons would receive. The transfer
of net proceeds prescribed by section 49-282, subsection B does not affect
the calculation of net proceeds prescribed by this subsection.
B. Each city or town shall share in the urban revenue sharing fund
in the proportion that the population of each bears to the population of
all. Except as provided by sections 42-5033 and 42-5033.01, the
population of a city or town as determined by the most recent United
States decennial census plus any revisions to the decennial census
certified by the United States CENSUS bureau of—the-cemsus shall be used
as the basis for apportioning monies pursuant to this subsection.
C. The treasurer, on instruction from the department, shall
transmit, not later than the tenth day of each month, to each city or town
an amount equal to one-twelfth of that city's or town's total entitlement
for the current fiscal year from the urban revenue sharing fund as
determined by the department.
D. A newly incorporated city or town shall share in the urban
revenue sharing fund beginning the first month of the first full fiscal
year following incorporation.
E. On receipt of a certificate of default from the greater Arizona
development authority pursuant to section 41-2257 or 41-2258, the state
treasurer, to the extent not otherwise expressly prohibited by law, shall
withhold from the next succeeding distribution of monies pursuant to this
section due to the city or town the amount specified in the certificate of
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default and immediately deposit the amount withheld in the greater Arizona
development authority revolving fund. The state treasurer shall continue
to withhold and deposit the monies until the authority certifies to the
state treasurer that the default has been cured. The state treasurer may
not withhold any amount that is necessary, as certified by the defaulting
political subdivision to the state treasurer and the authority, to make
any required deposits then due for the payment of principal and interest
on bonds of the political subdivision that were issued before the date of
the loan repayment agreement or bonds and that have been secured by a
pledge of distributions made pursuant to this section.
F. Except as otherwise provided by this subsection, on notice from
the attorney general pursuant to section 41-194.01, subsection B,
paragraph 1 that an ordinance, regulation, order or other official action
adopted or taken by the governing body of a city or town violates state
law or the Constitution of Arizona, the state treasurer shall withhold the
distribution of monies pursuant to this section to the affected city or
town and shall continue to withhold monies pursuant to this subsection
until the attorney general certifies to the state treasurer that the
violation has been resolved. The state treasurer shall redistribute the
monies withheld pursuant to this subsection among all other cities and
towns in proportion to their population as provided by subsection B of
this section. The state treasurer shall not withhold any amount that the
city or town certifies to the attorney general and the state treasurer as
being necessary to make any required deposits or payments for debt service
on bonds or other long-term obligations of the city or town that were
issued or incurred before committing the violation.
G. THE AMOUNT REPORTED TO THE DEPARTMENT PURSUANT TO SECTION
43-209, SUBSECTION D FOR A TAXABLE YEAR SHALL BE INCLUDED WHEN DETERMINING
THE NET PROCEEDS OF THE STATE INCOME TAXES FOR THE FISCAL YEAR FOR THE
PURPOSES OF THE DISTRIBUTION REQUIRED BY SUBSECTION A OF THIS SECTION.
Sec. 15. Section 43-209, Arizona Revised Statutes, is amended to
read:
43-209. Collection of tax on income of professional athletes
earned in this state; separate accounting for tax
revenue from professional football and _ baseball;
definitions
A. The department shall adopt and enforce rules for the collection
of tax under this title on the income earned for services rendered in this
state by professional athletes and employees of professional’ sport
franchise organizations.
B. On or before December 31 of each year each professional football
franchise organization AND PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION
that is domiciled in this state shall provide to the department the
federal taxpayer identification number, assigned pursuant to section 6109
of the internal revenue code, for each resident and nonresident employee
of the organization who rendered services in this state for the
organization during the calendar year. Unless due to reasonable cause and
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not due to wilful neglect, a professional football franchise organization
OR PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION that fails to provide
taxpayer identification numbers pursuant to this subsection shall pay a
civil penalty of five-cdottars $5 for each such number.
C. For purposes of section 42-1116, subsection C, on or before
March 31 of each year, the department shall separately account for and
report to the state treasurer as a single aggregate amount the total net
revenues collected during the preceding calendar year from the imposition
of tax under this title on the income from all sources of:
1. Any professional football franchise organization that is
domiciled in this state.
2. Resident and nonresident employees of any professional footbal
franchise organization that is domiciled in this state. For reporting
purposes under this subsection, the department shall include all income
reported on joint returns, regardless of the spouse to whom it is
attributable, and the income of an employee's spouse that is reported on a
separate return.
D. FOR THE PURPOSES OF SECTION 42-1116, SUBSECTION D, ON OR BEFORE
MARCH 31 OF EACH YEAR, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR AND
REPORT TO THE STATE TREASURER AS A SINGLE AGGREGATE AMOUNT THE TOTAL NET
REVENUES COLLECTED DURING THE PRECEDING CALENDAR YEAR FROM THE IMPOSITION
OF TAX UNDER THIS TITLE ON THE INCOME FROM ALL SOURCES OF:
1. ANY PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT IS
DOMICILED IN THIS STATE.
2. RESIDENT AND NONRESIDENT EMPLOYEES OF ANY PROFESSIONAL BASEBALL
FRANCHISE ORGANIZATION THAT IS DOMICILED IN THIS STATE. FOR REPORTING
PURPOSES UNDER THIS SUBSECTION, THE DEPARTMENT SHALL INCLUDE ALL INCOME
REPORTED ON JOINT RETURNS, REGARDLESS OF THE SPOUSE TO WHOM IT IS
ATTRIBUTABLE, AND THE INCOME OF AN EMPLOYEE'S SPOUSE THAT IS REPORTED ON A
SEPARATE RETURN.
B- E. For THE purposes of this section: 7—
1. “PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION" MEANS’ AN
ORGANIZATION THAT HAS THE RIGHT TO FIELD A TEAM FOR PARTICIPATION IN
PROFESSIONAL BASEBALL CONTESTS SCHEDULED BY A NATIONWIDE LEAGUE DURING A
REGULAR SEASON HELD IN THE MONTHS OF MARCH THROUGH OCTOBER EACH YEAR.
2. “Professional football franchise organization" means~ an
organization that has the right to field a team for participation in
professional football contests scheduled by a nationwide league during a
regular season held in the months of September through December each year.
<<Sec. 16. Section 48-4203, Arizona Revised Statutes, is amended to
read:
48-4203. Powers and duties of board of directors; report;
conflict of interest
A. The board of directors, on behalf of the district, may:
1. Adopt and use a corporate seal.
2. Sue and be sued.
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3. Enter into contracts, including intergovernmental agreements
under title 11, chapter 7, article 3, as necessary to carry out the
purposes and requirements of this chapter. The district may contract with
a county sports authority established under title 11, chapter 5 to carry
out any power of the district.
4. Adopt administrative rules as necessary to administer and
operate the district and any property under its jurisdiction.
5. Adopt rules that allow weighted voting by board members and
establish conditions for terminating the district.
6. Employ an executive director and administrative and clerical
employees, or contract for other management personnel, and prescribe the
terms and conditions of their employment as necessary to carry out the
purposes of the district.
7. Acquire by any lawful means and operate, maintain, encumber and
dispose of real and personal property and interests in property. A
district established under section 48-4202, subsection A may acquire real
property by eminent domain. A district established under section 48-4202,
subsection B shall not acquire real property by eminent domain. A
district established under section 48-4202, subsection C shall not acquire
or own real property or interests in real property.
8. Administer trusts declared or established for the district,
receive and hold in trust or otherwise property located in or out of this
state and, if not otherwise provided, dispose of the property for the
benefit of the district.
9. Retain legal counsel and other consultants as necessary to carry
out the purposes of the district.
B. The board of directors, on behalf of a district established
pursuant to section 48-4202, subsection B, may:
1. Use revenues paid to the district pursuant to section 42-5031
and other revenues the district may receive from other sources, for the
purposes set forth in section 48-4204, subsection B.
2. Enter into agreements with developers, contractors, tenants and
other users of all or part of a multipurpose facility as determined
appropriate.
3. Pledge all or part of the revenues described in section 42-5031,
subsection B to secure the district's bonds or other financial obligations
issued or incurred under this chapter for the construction of all or part
of a multipurpose facility.
C. The board of directors of a district established pursuant to
section 48-4202, subsection B shall provide public outreach and education
on the purpose and activities of the district, including:
1. Presentations to the governing bodies of the municipalities in
the county in which the district is located.
2. Presentations to community, civic and business organizations.
3. Printed or electronic materials that support the purposes of
this subsection.
D. The board of directors shall:
-]7-
House Amendments to H.B. 2704
OANA NH WMH FP
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FPWONMFPOWOON DANA WNHRFOWOONDOTBRWNHHKFOW ANON BRWNMHH Ow
1. Appoint from among its members a_ [ctrerirmmarr][CHAIRPERSON], a
secretary and such other officers as may be necessary to conduct its
business. The board of directors may appoint the chief financial officer
of the county as the district treasurer of a _ countywide district
established under section 48-4202, subsection A. If the board does not
appoint the chief financial officer, the county treasurer is designated ex
officio as the treasurer. The board of directors of a district that is
established pursuant to section 48-4202, subsection B shall designate a
member of the board with financial management or accounting experience or
a person with whom the board has contracted for financial management as
treasurer of the district. The county treasurer is designated ex officio
as the treasurer of a district that is established pursuant to section
48-4202, subsection C.
2. Keep and maintain a complete and accurate record of all its
proceedings. All proceedings and records of the board shall be open to
the public as required by title 38, chapter 3, article 3.1 and title 39,
chapter 1.
3. Provide for the use, maintenance and operation of the properties
and interests controlled by the district.
E. The board of directors of a district that is established
pursuant to section 48-4202, subsection B shall:
1. Determine by agreement the distribution of revenues’ from
operating and using the multipurpose facilities among the municipalities
and any participating Indian tribe or community.
2. Report to the legislature by October 1 of each year regarding
the activities, operations, revenues and expenditures of the district for
the immediately preceding fiscal year. The board shall submit the annual
report to the president of the senate and the speaker of the house of
representatives and provide a copy of the report to the secretary of
state. At the discretion of the chairpersons of the senate finance
committee and the house of representatives ways and means committee, or
their successor committees, the committees may hold separate or joint
hearings to consider the annual report prepared by the district.
3. Present to the joint legislative committee on capital review
each project for the construction or reconstruction of any facility,
structure, infrastructure or other improvement to real property of any
kind in an amount exceeding [ftve-hundredthousandtottars] [$500,000].
[F. ON OR BEFORE NOVEMBER 1 OF EACH YEAR, THE BOARD OF DIRECTORS OF
A_ DISTRICT THAT IS ESTABLISHED PURSUANT TO SECTION 48-4202, SUBSECTION A
SHALL REPORT TO THE JOINT LEGISLATIVE BUDGET COMMITTEE AND THE GOVERNOR'S
OFFICE OF STRATEGIC PLANNING AND BUDGETING REGARDING ALL NEW MAINTENANCE
AND OPERATIONS PROJECTS THAT COST MORE THAN $1,000,000 THAT ARE PAID FOR
BY THE DISTRICT FROM MONIES TRANSMITTED PURSUANT TO SECTION 42-1116,
SUBSECTION D AND SECTIONS 42-5032.03, 42-6018 AND 42-6113.]
-78-
House Amendments to H.B. 2704
OmnmNAOOLPWN FE
[f-] ([G.] The directors, officers and employees of the district are
subject to title 38, chapter 3, article 8 relating to conflicts of
interest.
[G+] [H.] This state and political subdivisions of this state other
than the district are not liable for any financial or other obligations of
the district and the financial or other obligations do not constitute a
debt or liability of this state or any political subdivision of this
state, other than the district. >>
Sec. 17. Section 48-4231, Arizona Revised Statutes, is amended to
read:
48-4231. County stadium district fund
A. The district treasurer shall maintain a county stadium district
fund consisting of all monies received by the district, including:
1. Payments received from leasing, subleasing or renting property
owned, leased or controlled by the district.
2. Revenues received by the district from admissions’ and
concessions and other proceeds from events held at a stadium owned or
leased by the district.
3. Monies received from issuing and selling bonds under article 3
of this chapter.
4. MONIES TRANSMITTED PURSUANT TO SECTION 42-1116, SUBSECTION D AND
SECTIONS 42-5032.03, 42-6018 AND 42-6113.
4> 5. Interest and other income received from investing monies in
the fund.
5> 6. Gifts, grants and donations received for that purpose from
any public or private source.
B. EXCEPT AS PROVIDED IN SUBSECTION E OF THIS SECTION, monies in
the fund may be used for any lawful purpose of the district.
C. The district treasurer may invest any unexpended monies in the
fund as provided in title 35, chapter 2. Notwithstanding section 35-323,
the district treasurer may invest and reinvest monies in the fund, other
than operating fund monies, in eligible investments with a maturity of
greater than five years. Interest and other income from investments shall
be credited to the fund. The district treasurer shall invest the monies
so as to mature at the times when the fund assets will be required for the
purposes of this article. If the liquid assets in the fund become
insufficient to meet the district's obligations, the board of directors
shall direct the district treasurer to liquidate sufficient securities to
meet all of the current obligations and immediately notify the auditor
general of the insufficiency, and the auditor general shall investigate
and audit the circumstances surrounding the depletion of the fund and
report the auditor general's findings to the board.
-79-
House Amendments to H.B. 2704
OnNanfwWNM FE
D. Except as provided by section 48-4231.01, the board of directors
shall cause an annual audit to be conducted of the fund by an independent
certified public accountant within one hundred twenty days after the end
of the fiscal year. The board shall immediately file a certified copy of
the audit with the auditor general. The auditor general may make such
further audits and examinations as the auditor general deems necessary,
but if the auditor general takes no official action within thirty days
after the audit is filed, the audit is deemed sufficient. The board of
directors shall pay all fees and costs of the certified public accountant
and auditor general under this subsection from the fund.
—. MONIES TRANSMITTED PURSUANT TO SECTION 42-1116, SUBSECTION D AND
SECTIONS 42-5032.03, 42-6018 AND 42-6113 SHALL BE USED FOR RECONSTRUCTING,
EQUIPPING, REPAIRING, MAINTAINING OR IMPROVING THE MAJOR LEAGUE BASEBALL
FACILITY OWNED AND OPERATED BY THE DISTRICT. [ANY INDIVIDUAL, INCLUDING
AN EMPLOYEE OF THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION, IS
SUBJECT TO TITLE 38, CHAPTER 3, ARTICLE 8 RELATING TO CONFLICTS OF
INTEREST FOR THE PURPOSES OF SPENDING THE MONIES TRANSMITTED PURSUANT TO
SECTION 42-1116, SUBSECTION D AND SECTIONS 42-5032.03, 42-6018 AND
42-6113.]
<<Sec. 18. Title 48, chapter 26, article 2, Arizona Revised
Statutes, is amended by adding section 48-4238, to read:
48-4238. Notice: penalty; transaction privilege tax return
[IF THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES
THE MAJOR LEAGUE BASEBALL FACILITY OWNED AND OPERATED BY THE DISTRICT
LEAVES THIS STATE, THE DISTRICT TREASURER SHALL:
1. NOTIFY THE STATE TREASURER AND THE DEPARTMENT OF REVENUE THAT
THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR
LEAGUE BASEBALL FACILITY OWNED AND OPERATED BY THE DISTRICT LEFT THIS
STATE. ON RECEIVING THE NOTICE:
(a) THE STATE TREASURER MAY NOT CONTINUE TO TRANSMIT MONIES
PURSUANT TO SECTION 42-1116, SUBSECTION D AND SECTIONS 42-5032.03, 42-6018
AND 42-6133.
(b) THE STATE TREASURER SHALL ASSESS A PENALTY AGAINST THE
PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION AND DEPOSIT, PURSUANT TO
SECTIONS 35-146 AND 35-147, IN THE STATE GENERAL FUND THE PENALTY IN THE
FOLLOWING AMOUNTS:
Ci) $10,000,000 IF THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION
LEAVES THIS STATE ON OR BEFORE OCTOBER 1, 2035.
Cii)__$5,000,000 IF THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION
LEAVES THIS STATE ON OR BEFORE OCTOBER 1, 2045.
Ciii)__ $1,000,000 IF THE PROFESSTONAL BASEBALL FRANCHISE
ORGANIZATION LEAVES THIS STATE ON OR BEFORE OCTOBER 1, 2050.
(c) THE DEPARTMENT OF REVENUE MAY STOP SEPARATELY ACCOUNTING FOR
THE REVENUES THAT WERE SUBJECT TO TRANSMISSION.
-80-
House Amendments to H.B. 2/704
2. RETURN ANY REMAINING MONIES TRANSMITTED PURSUANT TO SECTION
42-1116, SUBSECTION D AND SECTIONS 42-5032.03, 42-6018 AND 42-6113 THAT
ARE _UNEXPENDED AND UNENCUMBERED TO THE TAXING JURISDICTION FROM WHICH THE
MONIES WERE GENERATED. }
FwNnMre
on
Enroll and engross to conform
6 Amend title to conform
JEFF WENINGER
2704WENINGER2.0.docx
02/03/2025
2:59 PM
C2 ‘ED
-81-
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON
Commerce
BILL NO.
DATE February 04, 2025
HB 2704
motion: _ DPA:
PASS
A
NAY
PRESENT
ABSENT
Aguilar
VA
Blackman
Cavero
YE
Ps
vO
Connolly
Sf
Diaz
a
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
APPROVED:
Aa
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
AINAK
O
bs
COMMITTEE SECRETARY
=
ATTACHMENT.
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
a
HB 2659: transfer to minors; age increase
Sponsor: Representative Carter N, LD 15
Committee on Commerce
Overview
Increases the minor's age required for the transference of certain custodial property.
History
The Uniform Transfers to Minors Act (UTMA) allows donors to transfer property, like money
or securities, to a custodian to manage for the benefit of a minor until they reach the legal
age without the need to set up a formal trust or have a conservator established through a
formal judicial conservatorship process.
Currently, under the provisions of the UTMA act, a minor may receive property at different
ages. For property given to the minor through a gift, the exercise of the power of appointment,
a last will and testament or a revocable trust, the minor must be 21 years of age to receive
the property. For property given to a minor through a transfer to a separate fiduciary or
property that is held by an individual who owes a liquidated debt to a minor may be
transferred by the custodian to the minor at 18 years of age (Title 41, Chapter 7, A.R.S.).
Provisions
1. Requires a minor be 25 years of age, rather than 21, to receive property given to the minor
through a gift, the exercise of power of appointment, a last will and testament or a
revocable trust. (Sec. 1)
0 Prop 105 (45 votes) O Prop 108 (40 votes) O Emergency (40 votes) UO Fiscal Note
HB 2659
Initials PB Page 1 Commerce
ATTACHMENT 10
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
COMMITTEE ON
ROLL CALL VOTE
Commerce
BILLNO. __HB2659_
DATE February 04, 2025
MOTION: I ) P
PASS
AYE
NAY
PRESENT | ABSENT
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
KR AKARARKK AK
APPROVED:
WiMinn~
“JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
&
O Oo
Cc
ITTEE SE TARY
ATTACHMENT_} J
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
SET
HB 2047: judicial appraisal; costs; attorney fees
Sponsor: Representative Kolodin, LD 3
Committee on Commerce
Overview
Designates the applicable court costs that are assessed against a corporation in an appraisal
proceeding.
History
A dissenter is a shareholder of a domestic corporation who is entitled to dissent from and
obtain payment of the fair value of the shareholder's shares in the event of certain corporate
actions such as a merger, acquisition or sale.
A shareholder who wishes to assert dissenters' rights must deliver to the corporation written
notice of the shareholder's intent to demand payment for the shareholder's shares if the
proposed action is effectuated and must not vote the shares in favor of the corporation's
proposed action. When a shareholder sends a dissenters' notice, they must demand payment,
certify whether the shareholder acquired beneficial ownership of the shares before the date
required to be set forth in the dissenters' notice and deposit the shareholder's certificates. A
dissenter may notify the corporation in writing of the dissenter's own estimate of the fair
value of the dissenter's shares and amount of interest due and either demand payment of the
dissenter's estimate or reject the corporation's offer and demand payment of the fair value of
the dissenter's shares and interest due.
If a demand for payment remains unsettled, the corporation must commence a proceeding
within 60 days after receiving the payment demand and petition the court to determine the
fair value of the shares and accrued interest. If the corporation does not commence the
proceeding within the 60-day period, it must pay each dissenter whose demand remains
unsettled the amount demanded.
The court, then, in an appraisal proceeding determines all costs of the proceeding. The court
must assess the court costs and attorney fees and expenses against the corporation and, to
an extent, the dissenters (Title 10, Chapter 13, A.R.S.).
Provisions
1. Specifies, in an appraisal proceeding, the court costs and the attorney fees and expenses
that are assessed against the corporation apply to the corporation, the surviving
corporation or a resulting corporation from a sale, merger or acquisition. (Sec. 1)
0 Prop 105 (45 votes) C1 Prop 108 (40 votes) © Emergency (40 votes) JO Fiscal Note
HB 2047
Initials PB Page 1 Commerce
ATTACHMENT |
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILLNO. __ HB 2047
DATE February 04, 2025 MOTION: } yP
PASS AYE NAY PRESENT | ABSENT
Aguilar Ye
Blackman WA
Cavero if
Connolly Y
Diaz 7
Hendrix Y
Villegas \/
Wilmeth Vv
Way, Vice-Chairman wv
Weninger, Chairman J
lo CO a) ©
Duley
APPROVED: ee SEGRETARY
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT__/<3
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
HB 2048: sales of securities; definition
Sponsor: Representative Kolodin, LD 3
Committee on Commerce
Overview
Modifies the definition of offer to sell or offer for sale in the context of the sale of securities.
History
The Arizona Corporation Commission (ACC) regulates securities in Arizona through the
he registration of dealers who sell,
registration of securities being offered or sold and t
purchase or offer to sell or buy securities in Arizona. The sale of a federal covered security
that complies with ACC filing requirements is exempt from the requirement to register
securities. Statute also outlines exemptions to dealer registration and ACC filing
requirements (Title 44, Chapter 12, A.R.S.).
A security, in general, is any tradeable interest or instrument such as a note, stock, treasury
stock, bond, commodity investment contract, commodity option, debenture or evidence of
indebtedness. A security must be registered with the ACC, unless it is a covered federal
security, and may only be sold by a dealer or salesmen who is registered with the ACC before
an offer to sell a security may be made (A.R.S. §§ 44-1814, 44-1842).
Statute defines offer to sell as an attempt or offer to dispose of, or solicitation of an order or
offer to buy, a security or interest in a security for value or any sale or offer for sale of a
warrant or right to subscribe to another security of the same issuer or of another issuer. Any
sale or offer for sale of a security that gives the holder thereof a present or future right or
privilege to convert such security into another security of the same issuer or of another issuer
shall be deemed an offer to sell the security to be acquired pursuant to such right or privilege,
but the existence thereof shall not be construed as affecting the registration or exemption
under this chapter of the security to which it attaches (A.R.S. § 44-180 }:
Provisions
1. Includes, to the definition of offer to sell or offer for sale, an offer, including an offer to sell
or offer for sale, occurs only where acceptance of the offer and payment of consideration
would complete the sale. (Sec. 1)
O Prop 105 (45 votes) CO Prop 108 (40 votes) 0 Emergency (40 votes) CO Fiscal Note
HB 2048
Initials PB Page 1 Commerce
ATTACHMENT | 4
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. HB 2048
DATE February 04, 2025 MOTION: Df
PASS AYE NAY PRESENT | ABSENT
Aguilar uf
Blackman il
Cavero ~
Connolly Ya
Diaz sah
Hendrix ol
Villegas , yf
Wilmeth il
Way, Vice-Chairman 7 4
Weninger, Chairman wA
fo | oO Po) O
APPROVED: soni aT SECRET. ARY
\eIMN nr
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT. LO
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
oO ___
HB 2450: unemployment insurance; benefit amounts
Sponsor: Representative Carbone, LD 25
Committee on Commerce
Overview
Changes the duration of unemployment insurance (UI) benefits for which an individual may
receive during a benefit year.
History
The Department of Economic Security administers the UI Benefit Program which provides
unemployment benefits to individuals who are unemployed through no fault of their own.
Individuals awarded unemployment insurance benefits are entitled to receive a weekly
benefit in an amount equal to 4% of the total wages for insured work paid in the highest
quarter of their base period. The base period is the first four of the last five completed
calendar quarters immediately preceding the first day of their benefit year. The weekly
benefit amount is statutorily capped at $320 (A.R.S. § 23-779).
The duration of benefits is based on the unemployment rate in the prior calendar quarter,
which is the average of the seasonally adjusted unemployment rates for the three months of
the most recently published calendar year quarter as published by the Office of Economic
Opportunity. If the prior calendar quarter unemployment rate is less than 5% the duration
of benefits is 24 weeks. If the prior calendar quarter unemployment rate is 5% or more the
duration of benefits is 26 weeks (A.R.S. § 23-780).
According to the Office of Economic Opportunity, Arizona's unemployment rate (November
2024 — seasonally adjusted) is 3.7%.
Provisions
1. Modifies the duration schedule for which an eligible individual receives UI benefits based
on incremental changes in the unemployment rate (UR) in the prior calendar quarter:
a) 12 weeks, if the UR is 5% or less;
b) 14 weeks, if the UR is more than 5% but not more than 5.5%;
c) 16 weeks, if the UR is more than 5.5% but not more than 6%;
d) 18 weeks, if the UR is more than 6% but not more than 6.5%;
e) 20 weeks, if the UR is more than 6.5% but not more than 7%;
f) 22 weeks, if the UR is more than 7% but not more than 7.5%;
g) 24 weeks, if the UR is more than 7.5% but not more than 8%;
h) 26 weeks, if the UR is more than 8%. (Sec 1)
0 Prop 105 (45 votes) C1 Prop 108 (40 votes) 0 Emergency (40 votes) UO Fiscal Note
HB 2450
Commerce
ATTACHMENT |
Initials Page 1
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
COMMITTEE ON
Commerce
ROLL CALL VOTE
BILL NO.
DATE February 04, 2025
__ HB 2450_
MOTION: dD
PASS
AYE
NAY
PRESENT
ABSENT
Aguilar
Blackman
VA
Cavero
val
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
APPROVED:
FE WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
PD NAN ANA
2
O
COMMITTEE SECRETARY
ATTACHMENT
i
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
HB 2629: merchant; fees; calculation; transactions; penalty
Sponsor: Representative Weninger, LD 13
Committee on Commerce
Overview
Provides prohibitions relating to interchange fees.
History
Federal law requires the amount of any interchange transaction fee that an issuer may
receive or charge with respect to an electronic debit transaction to be reasonable and
proportional to the cost incurred by the issuer with respect to the electronic debit transaction.
Each interchange transaction fee received or charged by the issuer cannot be greater than
the sum of 21 cents and 5 basis points multiplied by the value of the transaction.
An interchange transaction fee is any fee established, charged or received by a payment card
network and paid by a merchant or an acquirer for the purpose of compensating an issuer for
its involvement in an electronic debit transaction.
Provisions
1. Prevents certain entities from receiving or charging an interchange fee on the tax amount
of an electronic payment transaction provided the merchant informs the acquirer bank of
the tax amount as part of the authorization for the electronic payment transaction. (Sec.
1)
2. Requires a merchant to transmit the tax to avoid being charged an interchange fee. (Sec.
1)
3. Instructs a merchant who has not transmitted the tax to submit tax documentation for
the electronic payment transaction to the acquirer bank within 180 days after the
transaction. (Sec. 1)
4, Requires the acquirer bank to credit the amount of the interchange fee to the merchant
within 30 days after the submission of the tax documentation. (Sec. 1)
5. Specifies a payment card network is not liable for the accuracy of any tax data reported
by a merchant. (Sec. 1)
6. Prohibits certain entities from manipulating the calculation or increasing the rate or
amount of fees charged to a credit card or debit card transaction that are not attributable
to the taxes or other fees charged to the retailer to impose an interchange fee. (Sec. 1)
7. Subjects entities that violate interchange fee provisions to a $1,000 civil penalty for each
transaction and to refund the interchange fee. (Sec. 1)
8. Defines pertinent terms. (Sec. 1)
D0 Prop 105 (45 votes) C Prop 108 (40 votes) 0 Emergency (40 votes) O Fiscal Note
HB 2629
Initials PB Page 1 Commerce
ATTACHMENT /%
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
COMMITTEE ON
ROLL CALL VOTE
Commerce
BILL NO.
DATE
February 04, 2025
HB 2629
MOTION: [ ) p
PASS
AYE
NAY
PRESENT
ABSENT
Aguilar
Me
Blackman
Cavero
Connolly
Diaz
Hendrix
wg
7
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
~ “JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
SINKAWY) NA A
3
O
O
:
Dadvwy
COMMITTEE SEPRETARY
14
ATTACHMENT.
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
—
HB 2381: wage claims; employment practices
Sponsor: Representative Hernandez A, LD 20
Committee on Commerce
Overview
Increases th
of Arizona (ICA).
History
Title 23, Chapter 2, A.R.S., governs employment practices and working conditions, including
requirements for payment of wages, minimum wages and employee benefits. Arizona
employers must pay all wages due to employees on each of the regular paydays. Each
employer must designate two or more days in each month, not more than sixteen days apart,
as fixed paydays for payment of wages to their employees (A.R.S. § 23-351).
If an employer fails to pay the wages due to the employee, the employee may recover in a civil
int that is treble the amount of the unpaid wages.
action against an employer an amov
written claim with the ICA for unpaid wages against
Alternatively, an employee may file a
an employer if the amount of such wages does not exceed $5,000 and if such claim is filed
within one year of the accrual of such claim. The ICA, on behalf of an employee, may obtain
judgment and execution, garnishment, attachment or other available remedies for collection
of unpaid wages established by the department's final determination. (A.R.S. §§ 23-355, 23-
356).
Provisions
1. Increases the threshold of unpaid wages for which an employee may file a claim with the
IGA for such wages from $5,000 to $15,000. (Sec. 1)
e monetary cap for filing an unpaid wage claim with the Industrial Commission
0 Prop 105 (45 votes) O Prop 108 (40 votes) O Emergency (40 votes) UO Fiscal Note
HB 2381
Initials Page 1 Commerce
ATTACHMENT 2.0
Fifty-seventh Legislature Commerce
First Regular Session H.B. 2381
PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2381
(Reference to printed bill)
Amendment instruction key:
[GREEN UNDERLINING IN BRACKETS] indicates text added to statute or
previously enacted session law.
[Green underlini in_brackets] indicates text added to new session law
or text restoring existing law.
[GREEN-STREKECUT-FI-BRACKEFS] indicates new text removed from statute
or previously enacted session law.
[@reen-strikevut—itrtrackets] indicates text removed from existing statute,
previously enacted session law or new session law.
<<Green carets>> indicate a section added to the bill.
<<@reen—strtkevut—incarets>> indicates a section removed from the bill.
The bill as proposed to be amended is reprinted as follows:
Section 1. Section 23-356, Arizona Revised Statutes, is amended to
read:
23-356. Wage claims
A. Instead of proceeding under section 23-355, an employee may file
a written claim with the department for unpaid wages against an employer
if the amount of such wages does not exceed five—thorsamd—tottars
[4+57000] [$12.000] and if such claim is filed within one year of the
9 accrual of such claim.
10 B. The department may, on behalf of an employee, or the employee
11 may obtain judgment and execution, garnishment, attachment or other
12 available remedies for collection of unpaid wages established by final
13 determination by the department.
14 C. The department may receive payment on wage claims on behalf of
15 employees. The department may deposit, pursuant to sections 35-146 and
16 35-147, monies it receives as payment on wage claims in a special state
17 fund for disbursement to wage claimants on proper authorization by the
18 department.
OnN anf WM FE
19 Enroll and engross to conform
20 Amend title to conform
JEFF WENINGER
2381 WENINGER. docx
01/29/2025
10:28 AM
H: PB/1s
ATTACHMENT 2 }:
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. __HB 2381
DATE February 04, 2025 MOTION: D [- h
NAY PRESENT | ABSENT
>
x
m
PASS
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
~ NANINAKAR ASN
O O O
—
APPROVED: COMMITTEE SECREAARY
Afb Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT.
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
Ln
HB 2068: landlord tenant; assistance animals
Sponsor: Representative Kupper, LD 25
Committee on Commerce
Overview
dation relating to an assistance
Provides for allowing a tenant to request for an accommo
animal.
History
to make reasonable accommodations to
The Fair Housing Act makes it unlawful to refuse
rules, policies, practices, or services when such accommodations may be necessary to afford
persons with disabilities an equal opportunity to use and enjoy a dwelling and public and
common use areas. A reasonable accommodation is a change, exception, or adjustment to a
rule, policy, practice, or service that may be necessary for a person with disabilities to have
an equal opportunity to use and enjoy a dwelling.
Any person or entity that operates a public place is prohibited from discriminating against
individuals with disabilities who use service animals if the work or tasks performed by the
service animal are directly related to the individual's disability. A service animal is any dog
or miniature horse that is individually trained or in training to do work or perform tasks for
the benefit of an individual with a disability, including a physical, sensory, psychiatric,
intellectual or other mental disability. Service animal does not include other species of
animals, whether wild or domestic or trained or untrained (A.R.S. 11-1024).
The Arizona Attorney General (AG) provides civil rights guidance relating to service, support
and assistance animals. The AG defines support animal as an animal, trained or untrained,
that does work, performs tasks, provides assistance, and/or provides therapeutic emotional
support for individuals with disabilities. Support animals can be any other animals
commonly kept in households. The AG considers assistance animals as both service animals
and support animals as the term only applies in housing.
Provisions
1. Allows a landlord, if a tenant requests an accommodation for an assistance animal, to:
a) acquire reliable documentation of the disability and the disability-related need for an
assistance animal, only if the disability and related need is unknown or unapparent;
b) request that the person submit certain information on a standardized form;
c) require prescribed documentation for each additional assistance animal; and
d) deny or rescind an accommodation to the assistance animal for specified reasons. (Sec.
1)
0 Prop 105 (45 votes) 0 Prop 108 (40 votes) 0 Emergency (40 votes) O Fiscal Note
HB 2068
Commerce
ATTACHMENT 2.3
Initials PB Page 1
2. Requires a person requesting an accommodation to submit reliable documentation
establishing that the person has a disability requiring the use of an assistance animal as
a reasonable accommodation. (Sec. 1)
3. Specifies the reliable documentation to be in writing and describe the disability-related
need for the assistance animal. (Sec. 1)
4, Exempts a landlord from liability of injuries caused by an assistance animal that is
allowed as a reasonable accommodation on or within the landlord's property. (Sec. 1)
5. Defines assistance animal, disability and reasonable accommodation. (Sec. 1)
HB 2068
Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
Commerce BILL NO. HB 2068
February 04, 2025 MOTION: D FE
PASS NAY PRESENT | ABSENT
Aguilar Fl
Blackman
ox
COMMITTEE ON
DATE
>
x
m
Cavero
Connolly
Diaz
Hendrix
VA
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
AAT ARAL
2. | O
APPROVED: aT SEGRETARY
VMN Aa
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT. Z fT
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
_ _s____
HB 2175: claims; prior authorization; conduct
Sponsor: Representative Willoughby, LD 13
Committee on Commerce
Overview
Requires a health care provider to review each claim for health care services before denial or
prior authorization.
History
A health care services plan or its utilization review agent may impose a prior authorization
requirement for health care services provided to an enrollee. A prior authorization
requirement is a practice implemented by a health care services plan or its utilization review
agent in which coverage of a health care service is dependent on an enrollee or a provider
obtaining approval from the health care services plan before the service is performed,
received or prescribed, as applicable. If the prior authorization request is denied, the health
care services plan or its utilization review agent shall state the specific reason for the denial.
On a denial of a prior authorization request, the enrollee and the provider may exercise the
review and appeal rights granted under the health care appeals process (A.R.S. §§ 20-3402,
20-3404).
A member who receives an adverse determination may pursue the applicable review process
as prescribed in statute. A health care insurer must provide at least the following levels of
review: 1) an expedited medical review and expedited appeal; 2) an initial appeal; and 3) an
external independent review (A.R.S. § 20-2533).
Provisions
1. Requires a health care provider to individually review each claim for health care services
before a health care insurer denies a claim or a prior authorization unless:
a) the denial is due to a lack of administrative completeness;
b) the member enrollment status is excluded from coverage under the plan; or
c) adetermination is made that a service or provider type is categorically excluded from
coverage under the plan. (Sec. 1)
2. Prohibits the use of artificial intelligence to deny a claim or prior authorization. (Sec. 1)
3. Classifies the denial of a claim or a prior authorization without an individual review of
the claim as an act of unprofessional conduct. (Sec. 1)
4, Outlines the health care professionals that are defined as a health care provider. (Sec. 1)
O Prop 105 (45 votes) CO Prop 108 (40 votes) O Emergency (40 votes) O Fiscal Note
HB 2175
Commerce
ATTACHMENT 25
Initials PB Page 1
Fifty-seventh Legislature Commerce
First Regular Session H.B. 2175
PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2175
(Reference to printed bill)
Amendment instruction key:
(GREEN UNDERLINING IN BRACKETS] indicates text added to statute or
previously enacted session law.
[Green underlining in brackets] indicates text added to new session law
or text restoring existing law.
[GREEN-STFREKEOUT-FHI-BRACKETS] indicates new text removed from statute
or previously enacted session law.
(Green—str+keout—inrbrackets] indicates text removed from existing statute,
previously enacted session law or new session law.
<<Green carets>> indicate a section added to the bill.
<<@reen—strtkevut—itarets>> indicates a section removed from the bill.
A. [EXCEPRF—FOR—BENTAES—FOREAER BF HBIENTSTRATIVE— COMPLETENESS;
HEMBERENROTMENT—STFATUS— BRA BEFER TENA ON THAT A SER VEEE—OR- PROVIDER
9 FYPE—TS—CATERORECATEY—EXELUBED—FREM—EOVERAGEUNBERTHEPLEAN|] A HEALTH
10 CARE PROVIDER SHALL INDIVIDUALLY REVIEW EACH CLAIM FOR HEALTH CARE
11 SERVICES BEFORE A HEALTH CARE INSURER DENIES A CLAIM OR A_ PRIOR
12 AUTHORIZATION.
13 [B.] ARTIFICIAL INTELLIGENCE MAY NOT BE USED TO DENY A CLAIM OR A
14 PRIOR AUTHORIZATIONCFOR MEDICAL NECESSITY, EXPERIMENTAL STATUS OR ANY
15 OTHER REASON THAT INVOLVES THE USE OF MEDICAL JUDGMENT].
16 [B-] ([C.] A HEALTH CARE PROVIDER THAT DENIES A CLAIM OR A PRIOR
17 AUTHORIZATION WITHOUT AN INDIVIDUAL REVIEW OF THE CLAIM OR PRIOR
18 AUTHORIZATION COMMITS AN ACT OF UNPROFESSIONAL CONDUCT.
19 [€>-] [D.] FOR THE PURPOSES OF THIS SECTION, “HEALTH CARE PROVIDER"
20 MEANS A PERSON WHO IS CERTIFIED OR LICENSED PURSUANT TO TITLE 32, CHAPTER
21 7; $ ii, 13, 4. 15, 15.4, 1%, I. 1, 19, 1, 0, &, BM, 2. B. B.
22 35, 39, 41 OR 42, TITLE 36, CHAPTER 4, ARTICLE 6, TITLE 36, CHAPTER 6,
23 ARTICLE 7 OR TITLE 36, CHAPTER 17.
1 The bill as proposed to be amended is reprinted as follows:
2 Section 1. Title 20, chapter 20, article 1, Arizona Revised
3 Statutes, is amended by adding section 20-3103, to read:
4 20-3103. Denial of claims or prior authorization; health care
5 provider review; unprofessional conduct;
6 definition
7
8
24 Enroll and engross to conform
25 Amend title to conform
JEFF WENINGER
27 SHTLLOUEHBY cocx 2175WENINGER. docx
6473172625 02/03/2025
O572t- Pt 04:26 PM
sak H: PB/1s
ATTACHMENT 2.6
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. HB 2175
DATE February 04, 2025 MOTION: D p A
PASS AYE NAY PRESENT | ABSENT
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
= SKRAKK NAAKK
O O Oo
APPROVED: bh Aad SECRETARY
0) i,
EFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT...
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
EE __
HB 2110: development; adaptive reuse; rezoning; prohibition
Sponsor: Representative Biasiucci, LD 30
Committee on Commerce
Overview
An emergency measure that makes various revisions to statute relating to multifamily
residential development and adaptive reuse.
History
Laws 2024, Chapter 141 established requirements for certain municipalities to establish
ily residential development and adaptive reuse on up
objective standards to allow multifam
to 10% of the total existing commercial, office or mixed use buildings without requiring a
conditional use permit or any other application that would require a public hearing.
The objective standards established by a municipality must require: 1) a municipal site plan
review and approval process requirement; 2) adequate public sewer and water service for the
entire proposed development; 3) compliance with all applicable building and fire codes; 4)
that the existing buildings are economically or functionally obsolete; 5) that the existing
buildings are located on a parcel or parcels that are at least 1 acre in size but not more than
20 acres in size; and 6) a set aside of 10% of the total dwelling units for either moderate-
income housing or low-income housing or any combination of the two for at least 20 years
after the initial occupation of the proposed development.
Provisions
1. Changes the deadline for which a municipality must establish objective standards to
allow for multifamily residential development or adaptive reuse. (Sec. 1)
2. Removes language relating to the percentage cap of buildings within the municipality
that must allow for multifamily residential development or adaptive reuse. (Sec. 1)
3. Deletes language allowing a municipality to modify the percentage of buildings available
for multifamily residential development or adaptive reuse every 10 years. (Sec. 1)
4, Requires a municipality to allow for multifamily residential development or adaptive
reuse of at least 10% of the existing commercial, office or mixed use parcels. (Sec. 1)
5. Allows a municipality, in determining the minimum percentage of eligible parcels, to
analyze the commercial, office and mixed use parcels every 10 years. (Sec. 1)
6. Prohibits a municipality from:
a) designating individual parcels that are eligible for
development or adaptive reuse;
multifamily residential
O Prop 105 (45 votes) O Prop 108 (40 votes) Emergency (40 votes) O Fiscal Note
HB 2110
Initials PB Page 1 Commerce
ATTACHMENT 2%
n multifamily residential develop
b) excluding commercial, office or mixed use parcels fror
of the parcels have already been
or adaptive reuse other than as permitted or if 10%
develop or adapted for reuse; and
mixed use parcels from multifamily residential
c) excluding commercial, office or 1
development or adaptive reuse if the average sound level at the parcel is below 65
decibels. (Sec. 1)
7. Removes the allowable height limitation of 5 stories for a multifamily residential
development. (Sec. 1)
reas of a multifamily
8. Clarifies a municipality may limit the height to 2 stories in the ar
residential development site directly adjacent to and within 70, rather than 100, feet of
single-family residential zones. (Sec. 1)
9, Deletes language relating to a multifamily residential development qualifying as being
within 1 mile of certain buildings. (Sec. 1)
10. Adds that a municipality may allow for greater height in the remainder of the multifamily
resident development site. (Sec. 1)
11. Clarifies the requirements for setbacks and maximum height for adaptive reuse. (Sec. 1)
12. Deletes language relating to easements that are located within setback areas. (Sec. 1)
13. Replaces the term buildings with parcels as appropriate. (Sec. 1)
14. Modifies the definitions for low-income housing, moderate-income housing and
nonconforming. (Sec. 1)
15. Makes technical and clarifying changes. (Sec. 1)
16. Applies the revisions for multifamily residential development and adaptive reuse
retroactively to January 1, 2025. (Sec. 2)
17. Contain an emergency clause. (Sec. 3)
HB 2110
Initials PB Page 2 Commerce
Fifty-seventh Legislature Commerce
First Regular Session H.B. 2110
PROPOSED
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2110
(Reference to printed bill)
Amendment instruction key:
(GREEN UNDERLINING IN BRACKETS] indicates text added to statute or
previously enacted session law.
(Green underlining in brackets] indicates text added to new session law
or text restoring existing law.
[GREEN-STRIKECUT-H-BRACKETS] indicates new text removed from statute
or previously enacted session law.
(@reen—strikeuut—irbrackets] indicates text removed from existing statute,
previously enacted session law or new session law.
<<Green carets>> indicate a section added to the bill.
<<@reen—strikeout—inr-carets>> indicates a section removed from the bill.
The bill as proposed to be amended is reprinted as follows:
Section 1. Section 9-462.10, Arizona Revised Statutes, is amended
to read:
9-462.10. Commercial buildings; multifamily residential
development: adaptive reuse; prohibition on
rezoning or municipal review: objective
standards; applicability; definitions
A. @n-or—before—denuary—t 2025 WITHIN [AHERFY] [SIXTY] DAYS AFTER
9 THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION, the governing body
10 of a municipality with a population of one hundred fifty thousand or more
11 persons shall. establish objective standards to allow’ multifamily
12 residential development or adaptive reuse onm—not—more—tthan—terpercent—ofF
13 the-totet OF existing commercial, office or mixed use buitdirgs PARCELS
14 within the municipality without requiring a conditional use permit, a
15 planned unit development or rezoning application or any other application
16 that would require a public hearing. The governing body of the
17 municipality may—mod+fy—tthe—percentage—of—extsting—commercttat,_voffite—or
18 mixed—ose—bothtitngs—artthin—the-manricipatity—avattabte—for—mnuttttamity
19 resttenttattevetopment—or—adaptive reuse-every_tenyears SHALL:
20 1. ALLOW FOR MULTIFAMILY RESIDENTIAL DEVELOPMENT OR ADAPTIVE REUSE
21 OF AT LEAST TEN PERCENT OF THE EXISTING COMMERCIAL, OFFICE OR MIXED USE
22 PARCELS. FOR THE PURPOSES OF DETERMINING THE MINIMUM PERCENTAGE OF
23 PARCELS ELIGIBLE FOR MULTIFAMILY RESIDENTIAL DEVELOPMENT OR ADAPTIVE
24 REUSE, THE GOVERNING BODY OF THE MUNICIPALITY MAY ANALYZE THE COMMERCIAL,
25 OFFICE AND MIXED USE PARCELS EVERY TEN YEARS.
26 2. NOT DESIGNATE INDIVIDUAL PARCELS THAT ARE ELIGIBLE FOR
27 MULTIFAMILY RESIDENTIAL DEVELOPMENT OR ADAPTIVE REUSE.
OnNanFrwnrre
House Amendments to H.B. 2110
ANA THR WNM FE
3. NOT EXCLUDE COMMERCIAL, OFFICE OR MIXED USE PARCELS FROM
MULTIFAMILY RESIDENTIAL DEVELOPMENT OR ADAPTIVE REUSE OTHER THAN AS
ALLOWED BY SUBSECTIONS B AND G OF THIS SECTION OR IF TEN PERCENT OF THE
PARCELS HAVE ALREADY BEEN DEVELOPED OR ADAPTED FOR REUSE.
4, NOT EXCLUDE COMMERCIAL, OFFICE OR MIXED USE PARCELS FROM
MULTIFAMILY RESIDENTIAL DEVELOPMENT OR ADAPTIVE REUSE IF THE AVERAGE SOUND
LEVEL AT THE PARCEL IS BELOW SIXTY-FIVE DECIBELS.
B. A municipality may designate commercial or employment hubs and
other essential commercial or employment use areas where’ existing
commercial, office, employment or mixed use buttthrgs PARCELS are excluded
from the provisions of this section. The designations made pursuant to
this subsection may not exceed ten percent of the existing commercial,
office, employment or mixed use purtthrgs PARCELS within the municipality.
A municipality may modify the commercial or employment hubs that are
excluded from the provisions of this section once every ten years.
C. For multifamily residential development or adaptive reuse, the
objective standards established by a municipality shall require but—may
Tot-require morettram ONLY the following:
1. A municipal site plan review and approval process requirement,
including site plan review by any utility provider impacted by the
proposed development.
2. Adequate public sewer and water service for the entire proposed
development.
3. Compliance with all applicable building CODES and fire codes.
4. That the existing buildings are economically or functionally
obsolete.
5. That the existing buildings are located on a parcel or parcels
that are at least one acre in size but not more than twenty acres in size.
6. A set-aside of ten percent of the total dwelling units for
either moderate-income housing or low-income housing or any combination of
the two for at least twenty years after the initial occupation of the
proposed development. The developer may set aside more than ten percent
at the developer's sole discretion.
D. The objective standards may not’ contain’ parking’ space
requirements that exceed the parking requirements that apply to
multifamily residential buildings or adaptive reuse buildings under the
existing zoning code unless the proposed multifamily residential
development or adaptive reuse also qualifies as a mixed use development.
E. A municipality may SHALL not withhold a demolition permit if a
multifamily residential development meets the requirements of this
section. For a multifamily residential development, all of the following
apply:
1. The demolition of all or a portion of the existing commercial,
office or mixed use buildings shall be allowed.
2. Setback requirements may not exceed what is required in the
existing zoning code for multifamily residential buildings [, INCLUDING
House Amendments to H.B. 2110
AnNaTNLPWNM FE
MIXED USE BUILDINGS WITH THE MAJORITY OF FLOOR AREA DEDICATED TO
RESIDENTIAL USES].
3. Notwithstanding section 9-462.01, subsection C, the maximum
height and density shall be equal to the highest allowable multifamily
height and density for a multifamily zoning district in the municipality
within one mile of the [butting] [PARCEL] to be redeveloped. If there is
no multifamily zoning district in the municipality within one mile of the
[buthtorg] [PARCEL] to be redeveloped, the maximum height and density
shall be equivalent to the next closest multifamily zoning district [OR A
ZONING DISTRICT THAT ALLOWS RESIDENTIAL DEVELOPMENT, INCLUDING COMMERCIAL
ZONING DISTRICTS THAT ALLOW FOR RESIDENTIAL DEVELOPMENT WHICHEVER HEIGHT
AND DENSITY IS GREATER].
4. The [allowable height may not exceed five stories and a]
municipality may limit the height to two stories in the areas of a
MULTIFAMILY RESIDENTIAL DEVELOPMENT site DIRECTLY ADJACENT TO AND within
[one hundred] [SEVENTY] feet of single-family residential
zones. tattrfamity—restdenttat_cdevetopment—thet—ts—tonstructed—purstart
hot = ; a acd tr} 3 pepo
seat enie + ; Hefamid perth THE
MUNICIPALITY [(tA¥] [SHALL] ALLOW FOR GREATER HEIGHT IN THE REMAINDER OF
THE SITE.
(5. MULTIFAMILY RESIDENTIAL DEVELOPMENT THAT IS CONSTRUCTED PURSUANT
TO THIS SECTION DOES NOT QUALIFY AS BEING WITHIN ONE MILE OF THE PARCEL
BEING REDEVELOPED OR THE NEXT CLOSEST MULTIFAMILY PARCEL. ]
F. A municipality may SHALL not withhold a demolition permit if an
adaptive reuse project meets the requirements of this section. For
adaptive reuse, all of the following apply:
1. The demolition of a portion of the existing commercial, office
or mixed use building or buildings shall be allowed.
2. The setback requirements for the proposed use shall apply. If
the minimum setback requirement that applies to the existing commercial,
office or mixed use building is less than the minimum setback requirement
that applies to the proposec MULTIFAMILY use, the existing SETBACK SHALL
REMAIN AND THE building shall be considered nonconforming for setback
purposes [unless easements, including public utility easements, are
located within setback areas].
3. If the maximum allowable height that applies to the existing
commercial, office or mixed use building exceeds the maximum allowable
height for the proposed use, the existing height may SHALL remain and THE
BUILDING shall be considered nonconforming for height purposes and the
existing building may be expanded to the maximum allowable density for tte
proposet MULTIFAMILY use. Any rooftop appurtenances shall be included
within the height exemption.
G. This section does not apply to any of the following:
1. Land in an area that is designated as a district of historical
significance pursuant to section 9-462.01, subsection A, paragraph 10.
House Amendments to H.B. 2110
OmnNOa TNL WNM FE
FHP KHP HHP WWWWWW WWW WDM DNMDNMDA DY DYN DMD DKF KF FP KP BE RP RP Re
DAP WNMRFODOWOAN ATP WHER TO ANA NAN HPWHEFOWO AMANDA BRWNHERFOW
2. Land in an area that is designated historic by a_ local
government.
3. Land in an area that is designated as historic on the national
register of historic places.
4. Land in the territory in the vicinity of a military airport or
ancillary military facility as defined in section 28-8461.
5. Land in the [territory in the] [HIMEBRATE] vicinity of a federal
aviation administration commercially licensed airport or a_ general
aviation or public airport as defined in section 28-8486.
6. Land in a municipality that is located on tribal land.
H. For the purposes of this section:
1. "Adaptive reuse" means converting an existing building from the
use for which it was constructed to a-rew MULTIFAMILY use by maintaining
some or all of the elements of the building.
2. “Building code" has the same meaning prescribed in section
9-1301.
3. “Economically or functionally obsolete" means the commercial,
office or mixed use butthtimg PARCEL is in a state of disrepair or has AT
LEAST a fifty percent vacancy in the total leasable square footage.
4. "Low-income housing" means housingy—
tay for a person or persons whose household income does not exceed
eighty percent of the area median income.
i3—F recht ; +4 Hirt oft
= f H - ; :, rt haved
by—the—Ar} A; of : t—wtktrstedt—? bed ; ;
onthe -trtted States tepartment—oftoustrg—and—orban tevetopment—
5. "“Moderate-income housing" means housing:—
tay for a person or persons whose household income does not exceed
one hundred twenty percent of the area median income.
thy Fora tet ttre—occupant—_pays trot—tmore than _thirtypercent—ofttre
- : f + = ; - rear
eae aa of ; ae ites ; ;
Hre—trrtted<Stat ; of : ; ; ; "a
6. "Multifamily residential development" means a_ building or
buildings that are designed and used for residential purposes and that
contain more than one apartment or dwelling unit for sale or for rent but
that are not adaptive reuse.
7. “Nonconforming" means structures that have received buttthrg—andc
zomg OCCUPANCY permits under the regulations in place at the time of
construction.
8. "Rooftop appurtenances":
(a) Means rooftop structures that principally house air
conditioning equipment, solar panels, utilities, elevators, other energy
production facilities and other nonhabitable structures.
(b) Includes open space features, swimming pools, space for use by
residents and landscaping.
House Amendments to H.B. 2110
OON OOH WNM FE
11
(c) Does not include enclosed areas, spires, bell towers, domes,
cupolas, pediments, obelisks or monuments.
Sec. 2. Retroactivity
Section 9-462.10, Arizona Revised Statutes, as amended by this act,
applies retroactively to from and after December 31, 2024.
Sec. 3. Emergency
This act is an emergency measure that is necessary to preserve the
public peace, health or safety and is operative immediately as provided by
law.
Enroll and engross to conform
Amend title to conform
JEFF WENINGER
2110WENINGER. docx
02/03/2025
09:17 AM
PB/1s
He
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
COMMITTEE ON
Commerce
ROLL CALL VOTE
BILLNO. __HB2110
DATE February 04, 2025
MOTION: | ) p A
PASS
AYE
NAY
PRESENT | ABSENT
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
APPROVED:
VAC Grrr. —
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
= ANAANAAKK
Oo ©
Cc ITTEE SE TARY
ATTACHMENT <3O
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
a
HB 2624: timeshare salespersons; licensure
Sponsor: Representative Weninger, LD 18
Committee on Commerce
Overview
Establishes requirements and qualifications for a timeshare salesperson license.
History
The Arizona Department of Real Estate (ADRE) protects the public interest through
licensure and regulation of the real estate profession in Arizona. ADRE, under direction of
the Real Estate Commissioner (Commissioner), is responsible for: 1) licensing and regulating
real estate, cemetery and membership camping salespersons and brokers; 2) investigating
complaints from the public and licensees regarding real estate transactions; 8) ensuring
enforcement of real estate statutes and rules; 4) providing proper educational material to
guide and assist the public and licensees; 5) issues public reports for timeshares, subdivisions
and unsubdivided land; and 6) inspects brokers’ records and transactions to ensure
compliance with statutory requirements.
s, offers to sell or attempts to solicit prospective purchasers located in
Any person who sell
share plan with
this state to purchase a timeshare interest or any person who creates a time
an accommodation in this state, whether or not the plan is sold or offered for sale in this
state, must register a notice of intent to sell and application for a public report with ADRE
(A.R.S. § 32-2197.02).
Provisions
1. Allows the Commissioner to adopt rules specifying the requirements of examination
preparation courses for timeshare salesperson license applicants. (Sec. 3)
2. Limits the preparation course and timeshare examination. to specific real estate laws,
regulations and business practices and ethics that are directly related to the sale of
timeshare interests. (Sec. 3)
3. Instructs the Commissioner to ascertain that a timeshare salesperson license applicant
meets outlined qualifications. (Sec. 3)
4, Exempts a timeshare salesperson renewal applicant from submitting to an examination
provided the application is made within 12 months after the license expires and the
license has not been canceled, terminated or suspended. (Sec. B))
5. Allows a real estate broker or salesperson to engage in timeshare sales activities without
being separately licensed. (Sec. 4)
6. Includes timeshare sales to the list of categories in which a real estate licensee may have
only one employing broker. (Sec. 4)
O Prop 105 (45 votes) C1 Prop 108 (40 votes) 0 Emergency (40 votes) CO Fiscal Note
HB 2624
Initials PB Page 1 Commerce
ATTACHMENT 31
7. Clarifies it is unlawful for a person to act as a real estate broker or salesperson, timeshare
salesperson, cemetery broker or salesperson or membership camping broker or
salesperson while the licensee's license is expired. (Sec. 5)
8. Allows the Commissioner to issue a onetime 30-day certificate of convenience to a person
who has applied and qualifies for a timeshare salesperson's license without examination.
(Sec. 6)
9. Instructs an employing timeshare plan developer's designated broker to certify that the
timeshare salesperson applicant will be trained in applicable timeshare and contract laws
before participating in any offer or sale. (Sec. 6)
10. Applies statutory grounds for denial of a license to a timeshare salesperson applicant.
(Sec. 7)
11. Defines timeshare salesperson as a natural person who acts under the supervision of a
licensed real estate broker to sell or exchange timeshare properties on behalf of a
timeshare plan developer or other person. (Sec. 1)
12. Makes conforming changes. (Sec. 2)
13. Contains a legislative intent clause. (Sec. 8)
14. Contains a delayed effective date of July 1, 2026. (Sec. 9)
HB 2624
Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. HB 2624
DATE February 04, 2025 MOTION: D E
E NAY PRESENT | ABSENT
>
x
PASS
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
= ARRAN
) oO e)
—*
prey
APPROVED: COMMITTEE S$
eT Aaa Chairman
MICHAEL WAY, Vice-Chairman
ETARY
ATTACHMENT. 2
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
ee _.____
HB 2370: entrance fee; refunds; time frame
Sponsor: Representative Gress, LD 4
Committee on Commerce
Overview
Provides requirements for assigning a vacated unit a sequential refund number for refunding
entrance fees.
History
A life care contract is a contractual agreement between a provider and a person (contract
holder) to provide for nursing services, medical services or health-related services, in addition
to board and lodging for the person in a facility or services in the person's private residence
with the right to future access to services, board and lodging in a facility, and is conditioned
on the transfer of an entrance fee to the provider for such services. Life care contracts may
only be offered by persons who are issued a permit as a provider by the Department of
Insurance and Financial Institution (DIFI).
As a condition for issuing the permit, DIFI requires the provider to maintain on a current
basis and in escrow an amount equal to the aggregate principal and interest payments due
during the next twelve months on account of any first mortgage or other long-term financing
of the facility. Additionally, the provider must establish an escrow account and place any
entrance fee in escrow prior to occupancy in the facility or providing services. Statute outlines
the conditions for releasing entrance fee monies to the provider.
An entrance fee that is held in escrow may be returned to the person who had made payment
to the provider at any time by the escrow agent on receipt of notice from the provider that
such person is entitled to a refund of the entrance fee. (Title 20, Chapter 8, A.R.S.)
Provisions
1. Requires, within sixty days after a facility receives a resident's notice to vacate, the
facility to assign the vacated unit a sequential refund number among the available units
with refundable entrance fees and provide refunds in order based on the sequential
refund number if:
a) the life care contract provides for a refundable entrance fee;
b) the terms under a life care contract for issuing a sequential refund number are
fulfilled; or
c) the unit is restored pursuant to statute. (Sec. 1)
2. Specifies that the requirement to assign a sequential refund number does not apply to a
life care contract that provides for a two-year waiting period before a facility is required
to provide a refund. (Sec. 1)
3. Allows a facility to restore a unit to its original condition after the unit is vacated. (Sec. 1
CO Emergency (40 votes) UC Fiscal Note
O Prop 105 (45 votes) O Prop 108 (40 votes)
HB 2370
Commerce
ATTACHMENT 33
Initials PB Page 1
4, Allows a facility to impose fees until all personal property is removed after the unit is
vacated. (Sec. 1)
5. Authorizes the facility to remove the resident's personal property on the 21 day
facility receives the notice to vacate. (Sec. 1)
after the
6. Makes technical changes. (Sec. 1)
Contains a delayed effective date of January 1, 2026. (Sec. 2)
HB 2370
Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILLNO. __HB 2370
DATE February 04, 2025 MOTION: D p
PASS AYE NAY PRESENT | ABSENT
Aguilar
Blackman
Cavero
AINWAA
NA
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
AINA AA
=| © O
APPROVED: COMMITTEE SEGRETARY
ieee
JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT. 3 4
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
ee ___
HB 2345: loan agreements; escrow
Sponsor: Representative Hendrix, LD 14
Committee on Commerce
Overview
Specifies escrow monies may only be used to make payments pursuant to the loan agreement
unless outlined exceptions apply.
History
An escrow agent is a person engaged in the business of accepting escrows which is any
transaction in which escrow property is delivered to a person not otherwise having any right
or title in connection with the sale or transfer of real or personal property to be delivered by
that person upon the contingent happening of a specified event or performance (A.R.S. § 6-
801).
An escrow agent is required to deposit and maintain all monies deposited in escrow to be
delivered on the close of the escrow or on any other contingency in a bank and keep all escrow
monies separate from monies belonging to the agent (A.R.S. § 6-834).
Provisions
1. Specifies escrow agents may use monies in an escrow account only to make a onetime
payment or multiple payments according to the loan agreement unless:
a) the loan agreement specifically states that the monies may be used for another
purpose and that purpose is expressly stated in the loan agreement;
b) a deed in lieu of foreclosure agreement specifically states the monies may be used for
another purpose and that purpose is stated in the deed in lieu of foreclosure
agreement;
c) an agreement is entered into by the parties to negotiate a settlement of
that agreement includes a provision for the use of the monies; or
d) an agreement is entered into by the parties that provides for a portion of the escrow
account to be used to bring an account that is in arrears to a current status. (Sec. 1)
the loan and
CO Prop 105 (45 votes) C Prop 108 (40 votes) | Emergency (40 votes) O Fiscal Note
HB 2345
Commerce
ATTACHMENT 39
Initials PB Page 1
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature - First Regular Session
ROLL CALL VOTE
COMMITTEE ON Commerce BILL NO. __HB 2345
DATE February 04, 2025 MOTION: DF
PASS AYE NAY PRESENT | ABSENT
Aguilar
Blackman
Cavero
Connolly
Diaz
Hendrix
Villegas
Wilmeth
Way, Vice-Chairman
Weninger, Chairman
S ANARANAARINAK
O O O
APPROVED: Mla iee SEGRETARY
\ hb er
“JEFF WENINGER, Chairman
MICHAEL WAY, Vice-Chairman
ATTACHMENT 36 __
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