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Home My WebLink About2026 05.18 City Council Work Session Agenda 04 �,?ACHf� City of Apache Junction, Arizona Meeting location: +� City Council Chambers 1U Z at City Hall Agenda 300 E.Superstition Blvd. \gilONr Apache Junction,AZ City Council Work Session 85119 apachejunctionaz.gov Ph:(480)982-8002 Doors are open to the public at least 15 minutes prior to the posted meeting start time. Monday, May 18,2026 7:00 PM City Council Chambers A. CALL TO ORDER B. ROLL CALL C. AGENDA ITEMS 1. 26-217 Presentation and discussion of Resolution No. 26-05, a Federally Patented Easement (FPE) Extinguishment of Roosevelt Street (alignment)from Wickiup Road to Chaparral Road for purpose of future development. Sponsors: Raquel Schatz Attachments: Resolution No.26-05 Council Memo 2026.05.18 Resolution No.26-05 Resolution No.26-05 Presentation 2026.05.18 2. 26-218 Presentation and discussion of Resolution No. 26-10, a Federally Patented Easement (FPE) Extinguishment of Solana Road (alignment) from 14th Avenue to 13th Avenue for purpose of future development. Sponsors: Raquel Schatz Attachments: Resolution No.26-10 Council Memo 2026.05.18 Resolution No.26-10 Resolution No.26-10 Presentation 2026.05.18 3. 26-238 Presentation and discussion on the First Amendment to the Community Maintenance Agreement between the City of Apache Junction, Brookfield ASLD 8500 LLC, and Blossom Rock Community Alliance, Inc. to add additional public park space and streets. Sponsors: Liz Langenbach Attachments: Staff Memo-First Amendment BR Maintenance Agreement 2023 Executed Maintenance Agreement Blossom Rock CommL 2026 First Amendment Blossom Rock Community Alliance Presentation-BR Maintenance Agreement Amendment City of Apache Junction,Arizona Page 1 Printed on 511412026 City Council Work Session Agenda May 18,2026 4. 26-165 Presentation and discussion on livestock feed as part of the Model City Tax Code (MCTC). Attachments: Memo to City Council Livestock Feed Ordinance No. 04 9-1-1987 Minutes Ordinance No. 588 D. ADJOURNMENT Copies of this agenda and additional information on any of the items listed above may be obtained from the City Clerk's office located at 300 E Superstition Blvd,Apache Junction,AZ 85119, Monday through Thursday from 7:00a-6:00p, excluding holidays. The City of Apache Junction invites and welcomes people of all abilities to use our programs, sites and facilities. Specific requests may be made by contacting the Human Resources Office at(480)474-2617 or TDD(480) 983-0095. The Apache Junction City Council may vote to go into Executive Session for legal advice on any item listed on this agenda pursuant to A.R.S. §38-431.03(A)(3);this notice is given pursuant to A.R.S. § 38-431.02 to the members of the City Council and the public. City of Apache Junction,Arizona Page 2 Printed on 511412026 ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No. 1. PizoNr File ID: 26-217 Sponsor: Raquel Schatz Agenda Date: 5/18/2026 Index: In Control: City Council Work Session Presentation and discussion of Resolution No. 26-05, a Federally Patented Easement(FPE) Extinguishment of Roosevelt Street(alignment)from Wickiup Road to Chaparral Road for purpose of future development. City of Apache Junction,Arizona Page 1 Printed on 511412026 Public Works Department f p 1 Home o the Superstition Mountains Date: May 18t", 2026 To: Honorable Mayor and Members of the City Council Through: Bryant Powell, City Manager Michael Loggins, Public Works Director From: Raquel Schatz, Project Engineer Subject: Federal Patented Easements Proposed Resolution No. 26-05 Roosevelt Street Extinguishment BACKGROUND Federally Patented Easements ("FPEs") were created by federal law and inherited by the city from Pinal County upon city formation and subsequent annexations. They are the means whereby properties are accessed by citizens in portions of Apache Junction to mitigate the need of acquisition to serve access to otherwise landlocked parcels. FPEs are typically a total of 66 feet in width with 33 feet on each side of common parcel lines. EXISTING CONDITIONS The Roosevelt Street (alignment) FPE from Wickiup Road to Chaparral Road has never been maintained by the city and is not classified as a local roadway. In addition, the FPE does not provide access to any parcels which would be landlocked in the event of extinguishment. Area transportation would not be adversely affected by an extinguishment. PURPOSE The owner of 238 N. Chaparral Road filed an application for the extinguishment. They are seeking an extinguishment for future developments which they will obtain permits through the city. 575 E. Baseline Avenue, Apache Junction, AZ 85119 • Voice (480) 982-1055 • Fax (480) 982-8005 Public Works Department f p i Home o the Superstition Mountains PROCESS Once the easement has been extinguished, the property owner can obtain permits through the city for future developments once they complete the extinguishment process through each individual utility provider. RECOMMENDATION Staff recommends extinguishment of the Roosevelt Street (alignment). ACTION REQUIRED After tonight's presentation and discussion, this item will be placed on consent agenda scheduled for June 2nd, 2026. 575 E. Baseline Avenue, Apache Junction, AZ 85119 • Voice (480) 982-1055 • Fax (480) 982-8005 RESOLUTION NO. 26-05 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING PORTIONS OF FEDERALLY PATENTED EASEMENTS LOCATED AT ROOSEVELT STREET (ALIGNMENT) FROM WICKIUP ROAD TO CHAPARRAL ROAD, ARE NO LONGER NECESSARY FOR PUBLIC USE AS FEDERALLY PATENTED EASEMENTS AND ARE HEREBY EXTINGUISHED AS PRESENT AND FUTURE PUBLIC RIGHTS-OF-WAY. WHEREAS, upon incorporation, the City of Apache Junction, an Arizona municipal corporation, became the holder of roadway easements, pursuant to the Small Tract Act of 1938 (52 Stat. 609, as amended, 43 U. S .C. 682a-682e) , as more fully described in Exhibit A and depicted in Exhibit B; and WHEREAS, the reason for the FPE extinguishment request is for future development through permits obtained by the city; and WHEREAS, such easements may be extinguished by local municipal government pursuant to A.R. S . §§ 9-500 . 24 and 28-7214; and WHEREAS, under A.R. S . § 9-500 . 24 the city has notified and obtained consent of utility providers; and WHEREAS, on January 28, 2026 the applicant paid the required non-refundable application and filing fee for the extinguishment request pursuant to Apache Junction City Code § 13-2-4 (H) ; and WHEREAS, pursuant to Apache Junction City Code § 13-2-4, the director of public works on February 26, 2026, submitted copies of the application for comment to the development services director, the public safety director, the Superstition Fire and Medical District, as well as all public utility providers; and WHEREAS, the extinguishment request, if approved, would not leave a parcel in separate ownership without access to an established public roadway or easement connecting such lands with another public roadway or easement; and WHEREAS, the city engineer has determined that the easement (s) in question, because of their location, topography, and encroachments therein, have no or de minimis public value. RESOLUTION NO. 26-05 PAGE 1 OF 4 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION ARIZONA, AS FOLLOWS : 1) The mayor and city council of the City of Apache Junction find that the public roadway easements, as described in Exhibit A and depicted in Exhibit B, are classified as local streets on the Street Classification Plan and are no longer necessary for public roadway purposes, have no or de minimis public value, and are hereby extinguished for public roadway purposes . 2) Nothing in this approval extinguishes any utility easement interest of any public utility agency or entity on the subject street right-of-way. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS DAY OF 20 SIGNED AND ATTESTED TO THIS DAY OF 20 WALTER "CHIP" WILSON Mayor ATTEST: EVIE MCKINNEY City Clerk APPROVED AS TO FORM: RICHARD J. STERN City Attorney RESOLUTION NO. 26-05 PAGE 2 OF 4 EXHIBIT A PARCEL 1 (Adjacent to parcel 103-03-053A) The South thirty-three feet (33' ) of the Southwest quarter of the Northeast quarter of the Southeast quarter of the Northwest quarter of Section 22, Township 1 North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona; EXCEPT the West thirty-three feet (33' ) and East thirty-three feet (33' ) THEREOF; AND PARCEL 2 (Adjacent to parcel 103-03-0590) The North thirty-three feet (331 ) of the Northwest quarter of the Southwest quarter of the Southeast quarter of the Northwest quarter of Section 22, Township 1 North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona; EXCEPT the West thirty-three feet (33' ) and East thirty-three feet (33' ) THEREOF; RESOLUTION NO. 26-05 PAGE 3 OF 4 EXHIBIT "B" �CF_NIC _ �IREET I I I I I I I I I I I I I I I I I I I I I I I I I - - r3 0CAC I IS WRFN — STREET i F - - —I I I I � I I IQ I I I ICI I I I 1 053A I 1 — — —I — 1180-245 — _ _ I _ROOSEVELT I Z U 1192-571590 Q 0 0 Iz IQ 01 Q 0 1 1 I� I� �1 I I I I TAMARISK �— STREET- � Q I I �I 0 � I I� > 1 IUI IQI p col I I UI I I I I JUNCTION STREET LEGEND T1N R8E S22 I I 33' — — 66' — T PROPOSED EXTINGUISHMENT I PREVIOUSLY EXTINGUISHED 33 33' DEDICATED RIGHT—OF—WAY (To REMAIN) L ——— ROAD CENTERLINE TYPICAL FPE/ROW DIMENSION - - - - FEDERAL PATENT EASEMENT (UNLESS OTHERWISE NOTED) PROPERTY LINE RESOLUTION NO. 26-05 119-086 PATENT DEED(S) cn PAGE 4 OF 4 z RESOLUTION NO . 26mO5 PUBLIC WORKS DEPARTMENT ROADWAY EASEMENT EXTINGUISHMENT MAY 18, 2026 RESOLUTION 26 - 05 Roadway Basement Extinguishment Roosevelt Street (alignment) from Wi* cki*up Rd to Chaparral Rd BACKGROUND • Created and transfer of land titles from the Federal Government and approved by Congress I*n June 1938. • Federal Patent Basements (FPEs) are 33' i* n width along the boundaries of said land. • The reservation of right-of-way along the boundarie the land ensured that no individual parcel would b and locked or without le gal access to the land. PROCESS • Completed Application: 01/28/26 • Application • Support Petition & Proposition 207 Forms • Non-Refundable $350 Fee • Public Works contacted Emergency respondents an Public Utility I roviders » NO OPPOSITION - Alignment not maintained by City. ES - Easement (outlined in bluepreviouslyreviewed by � both Public Works and Development Services to be extinguished (outlined in red), 26 05 M"-M of re _ � _ � •� '�'- i _ OFF.�. r �1 ' � �JS � •m • • K r• - um. 275 • � 'l1f T, .�' _• 1' a•�• z_ 1( 254 T � ' • � - • ��1 �••,s — I • *. i i� s_ k"-" , 6 q! A - 256 N �, y. -� CHAPARRAL RD,• + • �. ` 256 fib , �, ... ice` �. . I + 208 '77 �. -r n?� • 227 k, ' 238N —•. 4 ' � .-�� oft OTT CHAPA3LAJ RD - — • h • 1 t t • � t t 183N � • � 174 � �.� � �+ 181 Lis _• NICKIUP RD 1030 0590 , ' , • t ,, X y �•�' _ J yJ • I' t , ` ,A� six 40 -,4* Alt am& of • •. _i�' � � � 1 �h rr 1a. • RECOMMENDATION The Public Works Department recommends APPROVAL of Resolution No,, 26-05 Consent Agenda on 06/02/26 QUESTIONS?? ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard = Agenda Item Cover Sheet Apache Junction,AZ _ 85119 Agenda Item No.2. PizoNr File ID: 26-218 Sponsor: Raquel Schatz Agenda Date: 5/18/2026 Index: In Control: City Council Work Session Presentation and discussion of Resolution No. 26-10, a Federally Patented Easement(FPE) Extinguishment of Solana Road (alignment)from 14th Avenue to 13th Avenue for purpose of future development. City of Apache Junction,Arizona Page 1 Printed on 511412026 Public Works Department f p 1 Home o the Superstition Mountains Date: May 18t", 2026 To: Honorable Mayor and Members of the City Council Through: Bryant Powell, City Manager Michael Loggins, Public Works Director From: Raquel Schatz, Project Engineer Subject: Federal Patented Easements Proposed Resolution No. 26-10 Solana Road Extinguishment BACKGROUND Federally Patented Easements ("FPEs") were created by federal law and inherited by the city from Pinal County upon city formation and subsequent annexations. They are the means whereby properties are accessed by citizens in portions of Apache Junction to mitigate the need of acquisition to serve access to otherwise landlocked parcels. FPEs are typically a total of 66 feet in width with 33 feet on each side of common parcel lines. EXISTING CONDITIONS The Solana Road (alignment) FPE from 14t" Avenue to 1311 Avenue has never been maintained by the city and is not classified as a local roadway. In addition, the FPE does not provide access to any parcels which would be landlocked in the event of extinguishment. Area transportation would not be adversely affected by an extinguishment. PURPOSE The owner of 2777 E. 13t" Avenue filed an application for the extinguishment. They are seeking an extinguishment for future developments which they will obtain permits through the city. 575 E. Baseline Avenue, Apache Junction, AZ 85119 • Voice (480) 982-1055 • Fax (480) 982-8005 Public Works Department f p i Home o the Superstition Mountains PROCESS Once the easement has been extinguished, the property owner can obtain permits through the city for future developments once they complete the extinguishment process through each individual utility provider. RECOMMENDATION Staff recommends extinguishment of the Solana Road (alignment). ACTION REQUIRED After tonight's presentation and discussion, this item will be placed on consent agenda scheduled for June 2nd, 2026. 575 E. Baseline Avenue, Apache Junction, AZ 85119 • Voice (480) 982-1055 • Fax (480) 982-8005 RESOLUTION NO. 26-10 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING PORTIONS OF FEDERALLY PATENTED EASEMENTS LOCATED AT SOLANA ROAD (ALIGNMENT) FROM 14TH AVENUE TO 13TH AVENUE, ARE NO LONGER NECESSARY FOR PUBLIC USE AS FEDERALLY PATENTED EASEMENTS AND ARE HEREBY EXTINGUISHED AS PRESENT AND FUTURE PUBLIC RIGHTS-OF-WAY. WHEREAS, upon incorporation, the City of Apache Junction, an Arizona municipal corporation, became the holder of roadway easements, pursuant to the Small Tract Act of 1938 (52 Stat. 609, as amended, 43 U. S .C. 682a-682e) , as more fully described in Exhibit A and depicted in Exhibit B; and WHEREAS, the reason for the FPE extinguishment request is for future development through permits obtained by the city; and WHEREAS, such easements may be extinguished by local municipal government pursuant to A.R. S . §§ 9-500 . 24 and 28-7214; and WHEREAS, under A.R. S . § 9-500 . 24 the city has notified and obtained consent of utility providers; and WHEREAS, on February 19, 2026 the applicant paid the required non-refundable application and filing fee for the extinguishment request pursuant to Apache Junction City Code § 13-2-4 (H) ; and WHEREAS, pursuant to Apache Junction City Code § 13-2-4, the director of public works on March 4, 2026, submitted copies of the application for comment to the development services director, the public safety director, the Superstition Fire and Medical District, as well as all public utility providers; and WHEREAS, the extinguishment request, if approved, would not leave a parcel in separate ownership without access to an established public roadway or easement connecting such lands with another public roadway or easement; and WHEREAS, the city engineer has determined that the easement (s) in question, because of their location, topography, and encroachments therein, have no or de minimis public value. RESOLUTION NO. 26-10 PAGE 1 OF 4 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION ARIZONA, AS FOLLOWS : 1) The mayor and city council of the City of Apache Junction find that the public roadway easements, as described in Exhibit A and depicted in Exhibit B, are classified as local streets on the Street Classification Plan and are no longer necessary for public roadway purposes, have no or de minimis public value, and are hereby extinguished for public roadway purposes . 2) Nothing in this approval extinguishes any utility easement interest of any public utility agency or entity on the subject street right-of-way. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS DAY OF 20 SIGNED AND ATTESTED TO THIS DAY OF 20 WALTER "CHIP" WILSON Mayor ATTEST: EVIE MCKINNEY City Clerk APPROVED AS TO FORM: RICHARD J. STERN City Attorney RESOLUTION NO. 26-10 PAGE 2 OF 4 EXHIBIT A PARCEL 1 (Adjacent to parcel 103-18-047C&D) The East thirty-three feet (33' ) of the Southwest quarter of the Northeast quarter of the Southwest quarter of the Northeast quarter of Section 22, Township 1 North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona; EXCEPT the North thirty-three feet (33' ) and South thirty-three feet (33' ) THEREOF; AND PARCEL 2 (Adjacent to parcel 103-18-048A&B) The West thirty-three feet (331 ) of the Southeast quarter of the Northeast quarter of the Southwest quarter of the Northeast quarter of Section 22, Township 1 North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona; EXCEPT the North thirty-three feet (33' ) and South thirty-three feet (33' ) THEREOF; RESOLUTION NO. 26-10 PAGE 3 OF 4 EXHIBIT "B" AVENUF I I I I I I 0 I I Q 047CE3 048B — — — I0I I U w I UI � 047D 048A 048E 00 14TH AVENUE Q � Q I OI I I I 15TH _ AVENUE _ _ E - r I I I � I I I I - - - - - - - - - - - - - - 16TH AVENUE _6d33' , LEGEND T1N R8E S22 I I - - 66' — ' PROPOSED EXTINGUISHMENT I PREVIOUSLY EXTINGUISHED 33 33' DEDICATED RIGHT—OF—WAY (To REMAIN) L _ _ _ _ ——— ROAD CENTERLINE TYPICAL FPE/ROW DIMENSION - - - - FEDERAL PATENT EASEMENT (UNLESS OTHERWISE NOTED) PROPERTY LINE RESOLUTION NO. 26-10 119-086 PATENT DEED(S) cn PAGE 4 OF 4 z RESOLUTION NO , 26 - 10 PU BLI C WORKS D EPARTIVI EN T ROADWAY EASEM EN T EXTI N GU I SH M EN T MAY 18. 2026 Reso l ut ion 26 - 10 Fbadway Easem en t Ext i n gu i sh m en t Sol an a Fbad (al i gn m en t) f rom 14thAve to 13thAve BACKGROUND • Created and transfer of land titles from the Federal Government and approved by Congress i n .lane 1938. • Federal Patent Easements (FPEs) are 33' i n wi dth along the boundaries of said land. • The reservation of right-of-way along the boundaries of the land ensured that no individual parcel would be land locked or without legal access to the land. PROCESS • Completed Applir,ation : 02/ 19/26 • Application • Support Fbtition & R-oposition 207 Forms • Non-F;bfundable $350 Fee • Public Works contacted Emergency respondents and Public Utility R-ovi dens » NO OPP051TI ON - AI i gn m en t not m ai n tai ned by 0 ty. RES - Easement (outl i ned i n bl ue) previ ously revi eyed by both Public Works and Development Services to be 26 ' exti ngui shed (outl i ned i n red).- 1 ---J fill, 1266 r[ D 1278 Y .'279 i 1262 1256 •_� � Jr - ��•' ti 11353 Aa r�, .r •.,1325 - u t •+ [[11��,, • J arm. tea.., } M \ `•A� I 125 -f2782f/ .`• .M`�• ! 1376 136J T 425 & �•' � T". .may � � � • � ► ►fit RECOM M EN DAT I ON The Publ i c Works Department recommends APPROVAL of Rasol uti on No. 26- 10 Consent Agenda on 06/02126 QU ONS??. ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard � 0 Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No. 3. '+PizoN* File ID: 26-238 Sponsor: Liz Langenbach Agenda Date: 5/18/2026 Index: In Control: City Council Work Session Presentation and discussion on the First Amendment to the Community Maintenance Agreement between the City of Apache Junction, Brookfield ASLD 8500 LLC, and Blossom Rock Community Alliance, Inc. to add additional public park space and streets. City of Apache Junction,Arizona Page 1 Printed on 511412026 City of Apache Junction i V�[ . 300 East Superstition Boulevard •Apache Junction,Arizona 85119 MEMORANDUM TO: Mayor and City Council THROUGH: Bryant Powell, City Manager FROM: Liz Langenbach, Parks & Recreation Director DATE: May 6, 2026 SUBJECT: First Amendment to Blossom Rock Community Maintenance Agreement In 2023, the City entered into an agreement for community maintenance with Brookfield ASLD 8500 LLC (`Brookfield"), and Blossom Rock Community Alliance Inc. ("Community Alliance"), which is the entity created to provide Development-wide private governance. Among other things, the agreement outlines that Brookfield and the Community Alliance will be responsible for installation and maintenance in all of the private spaces; landscaping and sidewalks in Public Utility and Facilities Easements: landscaping in arterial medians, and all public parks or open space conveyed to the City for public use. The City will reimburse the Community Alliance for the maintenance of the public parks. The City will pay for on-going public street roadway maintenance. Since that time, additional phases of Ironwood Linear Park, Ironwood Road, Ray Road, Warner Avenue, Idaho Road, Elliott Road and other minor public roadways have been constructed. This proposed first amendment allows for the addition of these newly constructed items to the 2023 agreement. Staff recommends approval of the First Amendment to the Community Maintenance Agreement with Brookfield and the Community Alliance. Home of the Superstition Mountains COMMUNITY MAINTENANCE AGREEMENT This Community Maintenance Agreement (this "Agreement") is made as of 01- 1-7-2-3 , 2023, among Brookfield ASLD 8500 LLC, a Delaware limited liability company ("Developer"), Blossom Rock Community Alliance, Inc., an Arizona nonprofit corporation (the "Community Alliance"), and the City of Apache Junction, an Arizona municipal corporation ("City") , collectively referred to as the "Parties" or individually as a"Party". RECITALS A. Developer is the developer of the'project located in the City of Apache Junction and commonly known as "Blossom Rock" (the "Development" or "Community'), shown on Exhibit A attached hereto. B. The Development is governed, in part, by the Development Agreement for Superstition Vistas between the City and D.R. Horton, Inc., a Delaware corporation, dated October 28, 2021 and recorded as Fee No. 2021 140530, official records of Pinal County, Arizona(the "DA"). C. The Community Alliance was created pursuant to the Declaration of Covenants, Conditions, Restrictions and Easements for Blossom Rock recorded June 24, 2022 as Fee No. 2022 072799 (the "Community Declaration"), to provide Development-wide private governance. D. Pursuant to Section 4.7.B.2 of the DA, Developer may design and install in public streets within the Development, specialty poles for traffic control and street name signs, specialty street and sidewalk lighting, specialty street signage, and specialty paving materials, all of which are designated in the DA as "Specialty Features and Materials". Some or all of the Specialty Features and Materials will be located in publicly dedicated rights-of-way within or adjacent easement areas. E. Section 4.7.13.2 of the DA requires that, at the Development Unit-Plan stage of the planning process, Developer and the City will enter into one or more maintenance agreements concerning the Specialty Features and Materials. F. Pursuant to Section 4.7.13.2 of the DA, Developer is to install and maintain the landscaping within and adjacent to the road rights-of-way within the Development. G. The Parties desire to set forth their agreement as to their respective rights and obligations regarding, among other things, the installation, maintenance, repair and replacement of the Specialty Features and Materials, Arterial Median Landscaping, the Public Parks, and various other elements within the Community. H. The Parties acknowledge and agree that this Agreement applies to the real property contained within Exhibit B as attached, and to the public right-of-way located within or adjacent to such real property, but that it may be amended or supplemented from time to time to 0 1 incorporate provisions specific to new Development Units or portions of new Development Units. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties agree as follows: 1. Definitions. All capitalized terms used in this Agreement but not defined in the Agreement shall have the meanings given to them in the DA. 2. Specialty Features and Materials. a. Additional Specialty Features and Materials. In addition to the "Specialty Features and Materials" listed in the DA, Developer may design and install in and around public streets within the Development custom street signs and custom pavement. For purposes of this Agreement, the term "S ep cialty Features and Materials" means the foregoing custom street signs and custom pavement, as well as the"Specialty Features and Materials" listed in the DA. b. Design of Specialty Features and Materials. Developer shall be responsible for the design of any and all Specialty Features and Materials, if any are desired by Developer, which design shall be subject to approval by the City Engineer. Any request for approval of any Specialty Features and Materials shall expressly state that approval is requested for Specialty Features and Materials pursuant to this Agreement. Such design, with respect to specialty poles, must accommodate the attachment of City-standard signage, and, with respect to specialty street name signage, must accommodate the attachment to City-standard poles as well as the specialty poles. C. Installation of Specialty Features and Materials. Developer shall install any desired Specialty Features and Materials, in accordance with the construction permits granted by the City. Upon installation, the Specialty Features and Materials shall be deemed owned by the City, subject to acceptance by the City and subject to the terms of this Agreement. d. Inventory of Approved Replacement Parts. The Community Alliance shall maintain an inventory (the "Replacement Inventory") of replacement parts for any and all Specialty Features and Materials in such quantities as the City may, from time to time, reasonably deem appropriate. The Replacement Inventory shall be located within the Development in a location to be determined from time to time by the Community Alliance, provided that the Community Alliance shall give the City reasonable advance notice before any relocation of the Replacement Inventory and provided further that the location of the Replacement Inventory shall be accessible at all times to appropriate City personnel for the purposes described in this Agreement. The Community Alliance shall bear any and all costs and losses incurred due to any failure or refusal of any manufacturer of the Specialty Features and Materials to continue to manufacture or supply such items to the Replacement Inventory. 2 e. Maintenance of Specialty Features and Materials. i. In connection with its review of the design of any Specialty Features and Materials, the City Engineer shall determine in his or her sole discretion whether the City will maintain the Specialty Features and Materials itself or require that the Community Alliance do so. ii. In all cases where the City Engineer determines that Developer shall maintain, repair and replace certain Specialty Features and Materials that will be located within City right-of-way, the City hereby grants to Developer, its successors and assigns, a license to enter upon all applicable dedicated right of way and easement areas to the extent reasonably necessary to effect such maintenance, repair and replacement, subject to the terms of this Agreement, which license shall remain effective until this Agreement is terminated (if ever) in accordance with Section 17 below. Developer shall provide the City with not less than five (5) business days notice of its intended activities before entering upon any dedicated right-of-way in connection with such license, except that, in the case of an emergency presenting a threat to public health or safety (if Developer determines that it should act to address such emergency, which it shall not be obligated to do), Developer shall only be required to give such notice as early as reasonably possible under the circumstances and shall not be required to give such notice before taking action to address such emergency; provided, however, that nothing in this Subsection (e) shall excuse Developer from repairing any damage or correcting any other condition it may cause in taking action to address such emergency. iii. In all cases where Specialty Features and Materials are to be attached to City-standard components, or vice versa (including by way of example only, where a City-standard street sign is to be attached to a non-standard pole), and the City Engineer determines that such Specialty Features and Materials are to be maintained by Developer, the City shall retain all responsibility for all maintenance, repair and replacement of the City-standard component and Developer shall have no responsibility to maintain, repair or replace the City-standard component. Notwithstanding the foregoing, Developer shall have the right to undertake minor maintenance and repair of City-standard component (including without limitation cleaning, painting, or tightening or remounting loose or fallen fixtures, etc.) from time to time without having, or thereby incurring, any obligation to do so. iv. In all cases where the City Engineer determines that the City shall maintain, repair and replace certain Specialty Features and Materials, the Community Alliance shall be required to pay to the City on an annual basis the additional cost, if any, incurred by the City to perform maintenance or repair of the relevant Specialty Features and Materials in the public streets that exceeed the amount the City would have incurred to perform maintenance or repair of standard poles, lighting, signage and paving materials. V. In all cases where the City Engineer determines that the City shall maintain, repair and replace certain Specialty Features and Materials, if Developer gives 3 notice to the City that maintenance, repair or replacement of any Specialty Features and Materials is necessary, the City shall, at a minimum, respond with notice to Developer within ten (10) business days advising whether or when the City intends to undertake such maintenance,repair or replacement. f. Correction of Defects. Notwithstanding that the City has approved of the use of the Specialty Features and Materials on the Property, if it is proven that the design, installation or manufacture of any of the Specialty Features and Materials is defective or causes either or both the Developer or the City potentially to be subject to greater future liability or risk of liability to third parties, then, upon request, Developer and the City shall confer and reach a mutually acceptable means to address the design,'installation or manufacture concern within a reasonably prompt period of time. 3. Arterial Median Landscaping. As used herein, the term "Arterial Median Landscapinjz" means the landscaping within medians located in those portions of Ironwood Drive, Ray Avenue, Idaho Road, and Elliot Road adjacent to the Community, and Blossom Rock Trail and Warner Road through the Community. a. Developer shall design and install the Arterial Median Landscaping, at Developer's expense, subject to ordinary City approval,permitting and acceptance processes and the terms of the DA. Developer and the City acknowledge that Developer intends that the Arterial Median Landscaping will be enhanced in certain respects (which may include, for example, greater size and/or density of plant materials, different plant palettes, and heavier or more frequent watering) as compared to the City-standard landscaping found in other arterial medians. b. Upon completion and acceptance of all or any portion of the Arterial Median Landscaping, the Commnuity Alliance shall thereafter maintain the accepted Arterial Median Landscaping, subject to obtaining from the City an annual right-of-way landscape maintenance permit. 4. Open Space; Public Parks. As used in this Section 4, (i) the term Public Parks" means any and all parks or other open space areas in the Development that are conveyed to the City for public use, and (ii) the term "Public Park Improvements" means any and all improvements located within the Public Parks. The location of the Public Parks within Phase 1 of the Development, as well as private parks in Phase 1, are shown in Exhibit C attached hereto a. The Community Alliance shall be responsible for maintaining all parks and common area open spaces within the Development, including the Public Parks. Except with respect to costs associated with Public Parks, the cost of such maintenance shall be paid by the Community Alliance. With respect to Public Parks, the cost of such maintenance shall paid initially by the Community Alliance, subject to partial reimbursement of such costs by the City, as set forth in Subsection 4(c) below. Developer and the City acknowledge that the Public Park Improvements will be built in phases and that Developer intends that the Park Improvements, in some phases, will include Specialty Features and Materials and otherwise will include 4 landscaping and other improvements that are enhanced in certain respects as compared to the standard improvements found in other City parks. b. As part of the approval process for each phase of the Public Parks, Devloper will provide the City's Parks Department 30%/60%/90% design plans for review and collaborate to determine which improvements in such phase are City-standard and which are Specialty Features and Materials. C. In the case of City-standard improvements within the Public Parks, maintenance shall be conducted in accordance with mutually agreed upon specifications ("Standard Park Maintenance"). In the case of Specialty Features and Materials, as part of the approval process for each phase of the Public Parks, the City's Parks Department and the Community Alliance will collaborate to develop a set of maintenance specifications for Specialty Features and Materials ("Specialty Park Maintenance"). Prior to the development of each phase of the Public Parks, the City, Developer and the Community Alliance shall: (i) prepare an assessment of proposed improvements and designate whether such improvements are deemed to require Specialty Park Maintenance or Standard Park Maintenance; and (ii) shall attach to this Agreement an Addendum approved by the Parties, describing the Specialty Features and Materials located in such phase and indicating resulting responsibilities for maintenance and costs of maintenance. d. The Community Alliance initially shall pay for the cost to maintain the Park Improvements, and, except as set forth in any mutually agreed Addendum to this Agreement, the City shall reimburse the Community Alliance for such costs, up to a maximum reimbursement of$12,485 per acre of public park space per year (adjusted for inflation based on increases in the Consumer Price Index for All Urban Consumers, U.S. City Average, published by the United States Department of Commerce). No later than ninety (90) calendar days after the expiration of each fiscal year during the term of this Agreement, the Community Alliance shall send to the City a statement of the amount payable by the City under this Section 4 for the preceding fiscal year, including a statement of both the costs of Standard Park Maintenance and the costs of Specialty Park Maintenance, accompanied by a reasonably detailing accounting of such costs (collectively, the "Annual Park Cost Report"). In the case of Park Improvements accepted by the City during the preceding fiscal year,the payment by the City for such year shall be prorated based on the date of acceptance. The City may make such payment without prejudice to its rights under this Subsection 4(c). The City shall have sixty (60) calendar days after its receipt of Annual Park Cost Report to notify the Community Alliance of any objections to the Annual Park Cost Report. If the City timely gives notice of such objections within thirty (30) calendar days of the 60th day deadline noted above, and if the Parties do not resolve the matter by negotiation within thirty (30) calendar days after such notice is given, then the matter shall be resolved in accordance with Section 13 below. Until such objections are resolved pursuant to the foregoing process, the City shall make annual payments to the Community Alliance in an amount equal to the prior annual payment. Notwithstanding anything to the contrary in this Section 4, the City shall pay any and all undisputed amounts set forth in the Annual Park Cost Report on a timely basis, and only the disputed amounts shall be subject to the dispute resolution procedures under this Agreement. The Community Alliance agrees to bid all maintenance contracts for the Public Parks in a manner that satisfies appliocable public bidding 5 processes, and in a manner that allocates the costs of maintaining the Public Parks separately from the costs of maintaining other landscaped areas not within the Public Parks. Notwithstanding the above, the City's reimbursement obligation is subject to City Council appropriation of maintenance funds on a fiscal year basis. e. All landscaping within common areas and Public Parks in the Community, and all parkway trees (i.e., trees that are located between streetside curbs parallel sidewalks within a homeowner's front yard) will be irrigated with "non-potable water" through the Community's lake system. f. To the extent that this Section 4 requires Developer or the Community Alliance to enter upon City-owned property to conduct maintenance, the City hereby grants a temporary maintenance license to Developer and the Community Alliance for such purposes. 5. Drainage Crossing_under Public Streets. Developer shall be responsible for keeping drainage pipes and culverts running beneath City right-of-way with the Development free from debris and other materials that impeded the proper flow of stormwater through such pipes and culverts. The City shall provide Developer with any necessary license or easement to enable Developer to enter upon the right-of-way in connection with such maintenance. If Developer's failure to maintain such pipes and culverts results in any damage to other City improvements, Developer also shall repair such other City improvements within thirty (30) calendar days upon notice from City for such repair, provided that if such repair is not capable of being completed within thirty (30) days then Developer shall commence the repair within said thirty (30)period and shall thereafter diligently pursue such repir to completion. 6. Maintenance of Sidewalks and Landscaping within Public Utility and Facilities Easements. The Parties acknowledge that Developer intends to install (or require third party homebuilders to install) sidewalks and landscaping improvements within areas that are subject to public facilities and utilities easements benefitting the City. Maintenance of the landscaping improvements shall be the responsibility of the owner of the underlying real property, at such owner's expense, except to the extent that such maintenance is the responsibility of the Community Alliance or the Residential Association (as defined in Section 30 below) as may be set forth in any document now or hereafter recorded. Maintenance of the sidewalks shall be the responsibility of the Community Alliance. 7. Maintenance of Certain Non-Standard Street Improvements. Developer and the City acknowledge that Developer's design for some streets in the Community will include "hammerheads" and other non-standard configurations that include areas that may not be able to be swept with City street sweeping vehicles. Accordingly, Developer agree that any areas within such non-standard configurations that cannot be swept with City street sweeping vehicles will be swept by Developer on a periodic basis, so as to achieve a degree of cleanliness comparable to the areas that are swept by the City. 8. Maintenance of Private Street Improvements. Developer and the City acknowledge that some streets in the Community will be private. Maintenance of the private 6 streets shall be the responsibility of the Community Alliance at the Community Alliance's expense. 9. Maintenance of City Utility Improvements within Private Streets. Developer and the City acknowledge that some streets in the Community will be private, but may have public water, sewer and storm drain utilities. Maintenance of the City utilities shall be the responsibility of the City at the City's expense. In the event the City removes or damages any private street improvements while performing maintenance on the City utility improvements, the City shall be responsible for repairing and restoring the private street improvements at the City's cost. 10. Maintenance Standards. All maintenance, repair or replacement work required or permitted to be performed by or on behalf of Developer (including by its employees, agents and contractors) will comply with the requirements of applicable City, state and federal standards then in effect for work done in, on or about a public street or a public park (as applicable), including all applicable procedures regarding safety and regarding minimizing any inconvenience to the public. 11. Intentionally Omitted. 12. City Maintenance Authority. a. The City reserves its existing authority to undertake any maintenance, repair or replacement of the Park Improvements and the Specialty Features and Materials, including without limitation any maintenance, repair or replacement that is: (a) required, in the reasonable opinion of the City Manager, or designee,to address an emergency or threat to public safety, in which event no notice or opportunity to cure is required; or (b) otherwise appropriate under applicable City standards, subject to notice and cure as provided in Section 18 below. To the extent that the City does not already have the authority to undertake the foregoing maintenance, repair or replacement of the Park Improvements and the Specialty Features and Materials,Developer here grants such authority to the City. b. If the City determines that Developer has failed to perform maintenance, repair or replacement of any Park Improvements or Specialty Features and Materials that is appropriate under the terms of this Agreement (other than to address an emergency or threat to public safety, in which event no notice or opportunity to cure is required), the City shall give Developer not less than five (5) business days' written notice of such determination and Developer shall have until the end of such five (5) business day period to undertake such maintenance, repair or replacement before the City may exercise the remedies provided in Section 17 below. C. In any case in which the City undertakes any maintenance, repair or replacement of any Specialty Features and Materials, the City shall use replacement parts stockpiled in the Replacement Inventory, except: (i) where the supply of relevant replacement parts in the Replacement Inventory is insufficient, the City may use City-standard replacement parts from the City's own inventory; or (ii) where the City determines that an emergency or 7 threat to public safety dictates that City-standard replacement parts from the City's own inventory be used,the City may do so. If replacement parts from the City's inventory are used in connection with the maintenance, repair or replacement of any Specialty Features and Materials, Developer may later replace such City-standard parts with parts from the Replacement Inventory, and return such City-standard parts to the City's inventory; provided that such City- standard parts shall be returned in substantially the same condition as when such parts were installed by the City, subject to ordinary wear and tear. If Developer or its contractor damages any such City-standard part before returning it to the City, Developer shall be responsible for the cost of repairing such damage or, if necessary, replacing such part. 13. Dispute Resolution. All claims, disputes and other contested matters between the Parties arising out of or relating to this Agreement or the breach thereof, shall be addressed in accordance with Section 6 of the DA. 14. Effectiveness. This Agreement shall be effective immediately upon its execution by the Parties. 15. Term. The rights and obligations set forth in this Agreement shall continue for twenty-five (25) years from the effective date of this Agreement, and shall be automatically renewed for successive renewal terms of fifteen (15) years each, unless, no sooner than one hundred eighty (180) calendar days and no later than sixty (60) calendar days before the end of the initial term or a renewal term (as applicable), either Party gives notice to the other that the rights and obligations set forth under this Agreement shall be terminated at the end of such initial or renewal term. Before the effective date of any such termination, the City shall elect (and give notice to Developer of its election) whether to assume responsibility for all maintenance, repair and replacement of the Specialty Features and Materials, provided that (if the City elects to assume such responsibility)the City's responsibility shall be limited to maintaining and repairing all such Specialty Features and Materials in accordance with prevailing City standards and replacing any or all such Specialty Features and Materials (as and when the City deems appropriate) with City-standard facilities. If the City elects not to assume such responsibility, then Developer shall be responsible for the cost of replacing the Specialty Features and Materials with City-standard facilities. 16. Running of Benefits and Burdens; Assignment. All provisions of this Agreement, including the benefits and burdens, are binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto. Notwithstanding the foregoing, the Parties agree that the ongoing ownership, operation and maintenance obligations of Developer may be assigned only as follows: (a) pursuant to an assignment of some or all of such obligations to the Community Alliance, or one or more other property owners' association(s) established by Developer; (b) pursuant to a partial assignment of obligations pertaining to the Arterial Median Landscaping to a community facilities district established for purposes that include maintenance of public roadways; (c) pursuant to a partial assignment of obligations pertaining to Specialty Features and Materials to a developer of land within the Community or to a property owners' association established by such developer; or (d) as part of a complete assignment, from Developer to a successor master developer, of all unassigned rights and obligations of Developer under this Agreement and under the DA. In all such cases, Developer agrees to provide the City 8 with written notice of any assignment of all or any rights and obligations of Developer within ninety (90) calendar days following such assignment, which shall include the assignee's commitment to pay and perform the applicable obligations of Developer under this Agreement. Upon compliance with the foregoing, including the City's receipt of the above-referenced notice, Developer's liabilities under this Agreement shall terminate as to the obligations assigned. Except as set forth in this Section 16, no Parry may assign any of its rights under this Agreement without the prior written consent of the other Party. By its signature below, the Community Alliance agrees to accept any assignment(s) by Developer of any or all obligations of Developer under this Agreement,pursuant to this Section 16. 17. Default; Dispute Resolution. If any Party fails to perform any of its obligations under this Agreement, any other Party may give the non-performing Party not less than five (5) business days notice of and opportunity to cure the failure. If the non-performing Parry fails to cure the failure within said period of time, the other Party(ies) may require that Developer (and/or the Community Alliance) and the City Manager of the City of Apache Junction, or designee, confer and use their reasonable best efforts to resolve the dispute. If the dispute cannot be resolved to the mutual satisfaction of the Parties, the Parties may seek any remedy, legal or equitable, available pursuant to Section 13 above, the Parties agreeing that specific performance shall be available as a remedy in such event. Notwithstanding the foregoing, however, any action seeking specific performance of a Party's maintenance or repair obligations under this Agreement shall be limited to such remedy and may not also include a prayer for monetary damages. 18. Notices. Except as otherwise required by law, any notice, demand or other communication required or permitted under this Agreement shall be in writing and shall be: (a) sent by United States mail, certified or registered, return receipt requested, postage prepaid; or (b) sent by any nationally recognized express or overnight delivery service (e.g., Federal Express or UPS), with all postage and other delivery charges prepaid. Each Parry shall be entitled to change its address for notices from time to time by delivering to the other Parties notice thereof in the manner provided under this Section 18. All notices shall be sent to each Parry at the address set forth following its name below: To City: City of Apache Junction 300 Superstition Boulevard Apache Junction, Arizona 85119 Attention: City Manager With a copy to: City of Apache Junction 300 Superstition Boulevard Apache Junction, Arizona 85119 Attn: City Attorney 9 To Developer: Brookfield ASLD 8500 LLC c/o Brookfield Arizona Management LLC Attention: Eric J. Tune 14646 Kierland Boulevard Suite 270 Scottsdale, Arizona 85254 With a copy to: Gordon E. Hunt, Esq. Biskind,Hunt& Semro,PLC 8901 E. Pima Center Pkwy. Suite 155 Scottsdale, Arizona 85258 To the Community Alliance: Blossom Rock Community Alliance, Inc. c/o DMB Community Life Inc. 7600 E. Doubletree Ranch Rd. Suite 250 Scottsdale, Arizona 85258 Attn: Chadwick Reed Any notice sent by United States Postal Service certified or registered mail shall be deemed to be effective the earlier of the actual delivery, or three (3) business days after deposit in a post office operated by the United States Postal Service. Any notice sent by a recognized national overnight delivery service shall be deemed effective one (1)business day after deposit with such service. 19. Further Assurances. Each Parry shall execute, acknowledge and deliver to the other such other documents, and shall take such other actions, as the other may reasonably request in order to carry out the intent and purposes of this Agreement. 20. Headings. The headings in this Agreement are for reference only and shall not limit or define the meaning of any provision of this Agreement. 21. Time of Essence. Time is of the essence of this Agreement. The foregoing to the contrary notwithstanding, if this Agreement requires any act to be done or action to be taken on a date that falls on a Saturday, Sunday or legal holiday, such act or action shall be deemed to have been timely done or taken if done or taken on the next succeeding day that is not a Saturday, Sunday or legal holiday. 22. Waiver. The waiver by any Party of any right granted under this Agreement shall not be deemed a waiver of any other right granted hereunder, nor shall the same be deemed to be a waiver of a subsequent right obtained by reason of the continuation of any matter previously waived. 23. Entire Agreement. This Agreement and any attachments represent the entire agreement between the Parties and supersede all prior negotiations, representations or agreements, either express or implied, written or oral; provided that nothing in this Agreement 10 supersedes the DA. It is mutually understood and agreed that no alteration or variation of the terms and conditions of this Agreement shall be valid unless made in writing and signed by the Parties hereto. Written and signed amendments shall automatically become part of the supporting documents, and shall supersede any inconsistent provision therein; provided, however, that any apparent inconsistency shall be resolved, if possible, by construing the provisions as mutually complementary and supplementary. 24. Amendment. This Agreement may not be altered or amended except pursuant to an instrument in writing signed by all of the Parties hereto. 25. Construction. This Agreement is the result of negotiations between the Parties. Accordingly, the terms and provisions of this Agreement shall be construed in accordance with their usual and customary meanings, and the Parties hereby waive the application of any rule or law that otherwise might require the construction of this Agreement against the Parry who (or whose attorney)prepared the executed Agreement. 26. Governing Law and Attorney Fees and Costs. The terms and conditions of this Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona. Any action at law or in equity brought by either Party for the purpose of enforcing a right or rights provided for in this Agreement, shall be tried in a court of competent jurisdiction in Pinal County, State of Arizona. The Parties hereby waive all provisions of law providing for a change of venue in such proceeding to any other county. In the event either Parry shall bring suit to enforce any term of this Agreement or to recover any damages for and on account of the breach of any term or condition in this Agreement, it is mutually agreed that the substantially prevailing Parry in such action shall recover all costs including: all litigation and appeal expenses, collection expenses, reasonable attorney fees, necessary witness fees (inclusive of professional services/meals/lodging/transportation), court costs, and transcript fees. 27. Prohibition to Contract with Developer Who Engages in Boycott of the State of Israel. The Parties acknowledge A.R.S. §§ 35-393 through 35-393.03, as amended, which forbids public entities from contracting with Developers who engage in boycotts of the State of Israel. Should Developer under this Agreement engage in any such boycott against the State of Israel, this Agreement shall be deemed automatically terminated by operation of law. Any such boycott is a material breach of contract. 28. Conflict of Interest Statute. This Agreement is subject to, and may be terminated by City in accordance with,the provisions of A.R.S. § 38-511. 29. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one in the same instrument, which instrument shall be deemed fully executed when one or more counterparts have been executed by each of the Parties. 30. Satisfaction of DA Requirements. This Agreement, together with all Addendums contemplated by this Agreement, shall be deemed to satisfy in full the obligations of the Parties to enter into the maintenance agreements pursuant to Section 4.7.13.2 of the DA (the "DA 11 Maintenance Agreement Obligations"). As and when this Agreement is amended or when supplemented to include provisions specific to new Development Units or portions of new Development Units, the amendment or supplement shall be deemed to satisfy in full the DA Maintenance Agreement Obligations insofar as they apply to the applicable new Development Units or portions of new Development Units. In the event of any conflict between the terms of this Agreement (and/or the terms of any amendment or supplement to this Agreement) and the terms of the DA, the terms of this Agreement (or the amendment or supplement to this Agreement) shall govern. 31. Action by Residential Association. The City agrees that if Blossom Rock Residential Association, Inc., a non-profit corporation (the "Residential Association"), or an owner of private land within the Development (an "Owner") properly pays or performs any obligation of Developer or the Community Alliance under this Agreement, the City will accept such payment: or performance, provided that accepting performance from the Residential Association or an Owner shall not be deemed to waive of any rights against Developer or the Community Alliance for any failure to pay or perform any other obligation under this Agreement. IN WITNESS WHEREOF, the Parties have executed this instrument as of the date first written above. THE CITY OF APACHE JUNCTION, an Arizona municipal corporation By: Vde Name: Title: f��AYn T �Q �lu�,c hen BROOKFIELD ASLD 8500 LLC, a Delaware limited liability By: Brookfield Residential (Arizona)LLC, a Delaware limited liability company, its Manager By: Name: Keq 2r- S Its: o c c_ 'Pr e-S po6,. , By: zi��7 Name: r-g« 3. -ra oe Its: V,a 12 BLOSSOM ROCK COMMUNITY ALLIANCE, INC., an Arizona non- ,ofit corporation By: Name: Its: to%zNsT- 13 STATE OF ARIZONA ) ss. County of�i a.A ) The foregoing instrument was acknowledged before me this 17 day of , 2023, by Ul$er"(_b;P` Wilson , the R4,/(jZ of THE CITY OF APACHE JUNCTION, an Arizona municipal corporation, on behalf of the municipal corporation. OFFICIAL SEAL Jennifer D Pena NOTARY PUBLIC-ARIZONALA �w w Nlaricopa County COMM# 578749 ay Cow.tares.Nov 18,2023 Votary Public My xpires: STATE OF ARIZONA ) ) ss. County of'0\(Ay-;(,�n� ) The foregoing instrument was acknowledged before me this Q,day of_DtCervl e� , 2022, by 9— �D. 711 S the ice 4�r-c' ,� ,-� and Era- "$ . 7krLe 0 the V k o�� .e^,,,fi , of BROOKFIELD ASLD 8500 LLC, a Delaware limited liability, on behalf thereof. NotaVy Public My Commission Expires: U HOLLY A CREA Notary Public.State of Arizona Maricope County Commission#568279 STATE OF ARIZONA ) My Commission Expires Joe August 18, 2023 ss. County of ) The foregoing instrument was acknowledged before me this 'ay-kay oft Irvb{�r, 2022, by Er11'C, _ -TLt� , the ��-rS; -� of BLOSSOM ROCK COMMUNITY ALLIANCE, INC., an Arizona non' -profit corporation, on behalf of the non- profit corporation. NoYary Public My Commission Expires: )�,Vau5�- HOLLY A CREA p Notary Public.State of Arizona t: +; Maricopa County Commission#568279 My Commission Expires 14 t� August 1a. 2023 ATTEST: Jennifer Pena City Clerk APPROVED AS TO FORM: 12•S•22 R. Joel Stern City Attorney 15 EXHIBIT A [see attached, map of Blossom Rock, which is preliminary and conceptual and subject to change] THE CHASSIS PLAN VERSION 2.0 ■ COMMERCIAL O 1/4 MILE.5 MINUTES WALKING DISTANCE �% O• ' NORTH DISTRICT 1/2 MILE.10 MINUTES WALKING DISTANCE O• LINEAR PARK 6 TRAILS VS SPINE ROAD f i J • : .� .off➢POTENTIAL FIRE STATION CENTRAL DISTRICT,.�' - I ' � O•�� ,� "" � FLOODWAY CHANNEL r,.%�;. •O _ } 4-7 NEIGHBORHOOD PARK s w' • '{ "� POTENTIAL SCHOOL -, � j 4z SOUTH DISTRICT DISTRICT PARK • f .,�.a «..,y.a.... S MIXED USE ® �: fl O � • k son Es Brookfield SUPERSTITION VISTAS SWABACK2 Residential `�� °°"° "°""ef EXHIBIT B Properties Included within Community Maintenance Agreement (as of October 31,2022) Final Pµiat' Pena County Reco �daton Number Final Plat for Infrastructure for Superstition Vistas Development 2022-084915 Unit 2—Ray Avenue Phase 1 Final Plat for Infrastructure for Superstition Vistas Development 2022-084916 Units 1 and 2—Ironwood Drive Phases 1 and 2 Final Plat for Infrastructure for Superstition Vistas Development 2022-084917 Unit 2—Blossom Rock Trail Phase 1 Final Plat for Blossom Rock Phase 1 2022-084918 Final Plat for Blossom Rock Phase 2 2022-084919 EXHIBIT C [see attached] PHASE 1 I IJPA �� \ • Y�� \ I i, - ,.•' \ dry , '�v w � � �"� � � l i i .I. - - '_, \'`• �. may, ¢`\ \l \� V 1f \ LEGEND V . PRIVATE ® PUBLIC LF=j-- It- --- MU-1"-500' , ' !! ! 07.1010YE I , a Brookfield BLOSSOM ROCK Residential PHASE 1 &2 PUBLIC/PRIVATE OPEN SPACES `��SWA,-pt-- PHASE 2 �.\ -- r' -- - - - ------------ LEGEND ® PRIVATE PUBLIC f - I 07.192022 Brookfield BLOSSOM ROCK Residential PHASE 1 &2 PUBLIC/PRIVATE OPEN SPACES `��SWAB'PACK- FIRST AMENDMENT TO COMMUNITY MAINTENANCE AGREEMENT THIS FIRST AMENDMENT is made and entered into this day of May 2026, ("the Execution Date") by and between CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation ("City"), BROOKFIELD ASLD 8500 LLC, a Delaware limited liability company ("Developer") and BLOSSOM ROCK COMMUNITY ALLIANCE, INC., an Arizona nonprofit corporation (the "Community Alliance"), all three collectively to be referred to as the "Parties" or individually as a "Party". RECITALS A. The Parties entered into an agreement for community maintenance (the "Agreement") on January 17'h, 2023 B. Since that time, additional phases of Ironwood Road, Ray Road, Warner Avenue, and Elliott Road, Idaho Road, and other minor public roadways have been constructed and the Parties wish to include in the Agreement. C. Because the coverage of the Agreement is being expanded, the Parties desire to modify Exhibits B and C as set forth in this First Amendment. AGREEMENT NOW, THEREFORE, in consideration of mutual promises contained herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties agree to amend the Agreement as follows: Exhibit B. PROPERTIES INCLUDED WITHIN MAINTENANCE AGREEMENT: The newly executed Exhibit B will list all properties included in the Agreement as of June 1, 2026, including the newly constructed phases. Exhibit C. The newly executed Exhibit C will depict a map of all public and private park spaces within the scope of this agreement as of June 1, 2026. Except as expressly amended herein, all other terms and provisions of the Agreement shall remain in full force and effect until the Agreement is terminated. IN WITNESS WHEREOF, the Parties have caused this First Amendment to be signed by their duly authorized representatives as of the day and year first above written. BROOKFIELD ASLD 8500 LLC, a Delaware limited Ila ity By: Name: Its: Awe By: Name:—A-'>eA 'Mc.Dor4AL-Q_ Its: Au-xoanim Ssg;r mo" BLOSSOM ROCK COMMUNITY ALLIANCE, INC., an Arizona non-profit corporation By: Name: _ qU L L1L Ll Its: 4>gk_-�IUCIV7- CITY OF APACHE JUNCTION,ARIZONA, an Arizona municipal corporation By: Name: Walter "Chip"Wilson Its: Mayor ATTEST: Yvette McKinney City Clerk APPROVED AS TO FORM: 54 3-26 R. Joel Stern City Attorney 2 EXHIBIT B Properties Included within Community Maintenance Agreement (as of June 1, 2026) Final Plat Pinal County Recordation Number Final Plat for Infrastructure for Superstition Vistas 2022-084915 Development Unit 2-Ray Avenue Phase 1 Final Plat for Infrastructure for Superstition Vistas 2023-036172 Development Unit 2 - Ray Avenue Phase 2 Final Plat for Infrastructure for Superstition Vistas 2022-084916 Development Units 1 and 2 -- Ironwood Drive Phases 1 and 2 Final Plat for Infrastructure for Superstition Vistas 2023-023735 Development Units 1 and 2-Ironwood Drive Phase 3 Final Plat for Infrastructure for Superstition Vistas 2022-084917 Development Unit 2-Blossom Rock Trail Phase 1 Final Plat for Infrastructure for Superstition Vistas MOD 2025-099075 Development Unit 2-Blossom Rock Trail Phase 2 Final Plat for Blossom Rock Phase 1 2022-084918 Final Plat for Blossom Rock Phase 2 2022-084919 Final Plat for Blossom Rock Phase 3A 2025-099068 Final Plat for Blossom Rock Phase 3B 2025-099071 Final Plat for Blossom Rock Parcel 8 2025-028016 Final Plat for Infrastructure for Superstition Vistas 2024-061056 Development Unit 2-Idaho Rd. Phase 1 Final Plat for Infrastructure for Superstition Vistas MOD 2024-061054 Development Unit 2-Warner Ave. Phase 1 Final Plat for Infrastructure for Superstition Vistas MOD 2024-061058 Development Unit 2-Warner Ave. Phase 5 Final Plat for Infrastructure for Superstition Vistas MOO 2024-060155 Development Unit 2 - Elliot Rd. Phase 1 EXHIBIT C Map of Public/Private Parks and Open Space as of June 1 202E LEGEND - PRIVATE Q PUBLIC ® PUBLIC ACCESS PRIVATE MAINTAINED i i•i o rii 3, •i•! ♦i i• o`T ♦•♦ 1 i••i . m ••!♦•+ i•r i•rii!•1 •••i�••••••�♦• •�•�i! • •�•! ♦ ♦♦ i• ♦ • • • • • •r +y I,*l.0SS0\1 IPublic/PrivatelBlossom Rock �� IZOCK :... Open space Phase 1 �� LEGEND - PRIVATE PUBLIC - ® PUBLIC ACCESS PRIVATE MAINTAINED ®BUILDER LANDSCAPE 1 �rr • phi• ]1• ,•r �I♦ �r♦i i itl�f�f♦ � ♦r+ o a 4r •�. i A /♦tery. ,4 f f• • �i_�J,�is � • . • . . . VAD i31.OtiS()11 Public/Private BIosso I Rock RVi ROCK Open Space I Phase 2 �a�� LEGEND - PRIVATE Q PUBLIC ® PUBEIC ACCESS PRIVATE MAINTAINED © BUILDER LANDSCAPE 1 �•1� O rf•�~f IKI ♦�� ii 1♦� `� 1 I i � 1 J;I.OSSO\I Public/Private Blossom Rock RMROCK .::: ~• Open Space IPhase 3A / 3B LEGEND . PRIVATE ® PUBLIC ACCESS PRIVATE MAINTAINED tj J III!iflu, - 1 U BLOSSOM Public/Private Blossom Rock RMROCK ..... Open Space I P a r c e ! 8 �� . �a �Iz j_ ■ a _ _ _�— i-_ � try-. - �'� , �� .�� - •+aw- _ k�-�..r. �� -!�"�_ ___ _ n' t t r Blossom Rock Liz L Maintenance Agreement Update Agreement Key ... .................. COMMERCIAL takeawa s = NORTH DISTRICT y 1/4 MILE.5 MINUTES WALKING DISTANCE -, • O • 9 O 1/2 MILE.10 MINUTES WALKING DISTANCE O' • LINEAR PARK 5 TRAILS - -----... ------ Community Alliance maintains & _ ----'. '--'.-'--' " '--- pays for private streets sidewalks - - o ' ' N/S SPINE ROAD O parks, and median landscaping, 6 o CENTRAL DISTRICT among other specialty features POTENTIAL FIRE STATION 5 FLOODWAY CHANNEL - J® "' '"' ' ' " � o • Community Alliance maintains - public parks/open space - shares o 0 0 cost with the City NEIGHBORHOOD PARK ■ • City maintains all major and minor - ...... roadways (except private POTENTIAL SCHOOL RF SOUTH DISTRICT roads/driveways) DISTRICT PARK L J MIXED USE •• O • Agreement is amended as new areas are developed and added ■ Y+'r�rti r ........... ... ■ i First Amendment: 1 . Update Exhibit B to list all newly expanded/added parcels 2. Update Exhibit C to depict updated site maps for Phase 1 , Phase 2, Phase 3a/3b, ' and Phase 8 3. All other agreement items and Exhibits remain unchanged Next Steps � M Staff recommends approval of - ••� ---� the First Amendment to the - AW Community Maintenance Agreement - • Based on council discussion , will 21,11 ✓i/�� e ±,► ",t �t� ,ter;; bring back for Consent Agenda I�,,�. ,,� -I ► �, ti .r, ,, at June 2nd Council Meeting � r� " // / �� rl�/'�•/"r err of ak!��'��r0%� y�� l �,�t��Y i�i1 � y�� . "t'rIp►��M1�� /,'y i!r"� �1Y�j�� ' I�� d r ��jq�r'^�"CI �1 7 ! y �/,h✓�n, �Y,#,� '� ,�/,r� ��1YYYTTT y ,� /� � r / 1i f✓ i i rir 11u jdlrh oil ��r/v.9 .pI ' x„y - - ��'�^ .ss�s^�Q�l: ♦ �i ' �� 1.+.M.'u+�-`y�,t�lw,�rq,a '"`� -� Aj , s��►i ,"".` QUESTIONS?* ►P�"E�c�, City of Apache Junction, Arizona 300 E Superstition Boulevard o Agenda Item Cover Sheet Apache Junction,AZ U =i 85119 Agenda Item No.4. �Piz oN* File ID: 26-165 Sponsor: Agenda Date: 5/18/2026 Index: In Control: City Council Work Session Presentation and discussion on livestock feed as part of the Model City Tax Code (MCTC). City of Apache Junction,Arizona Pagel Printed on 511412026 7f City of Apache Junction Home of the Superstition Mountains DATE: MAY 18, 2026 TO: MAYOR AND CITY COUNCIL MEMBERS THROUGH: BRYANT POWELL, CITY MANAGER FROM: ROB WISLER, ASSISTANT CITY MANAGER SUBJECT: LIVESTOCK FEED AS PART OF THE MODEL CITY TAX CODE (MCTC) Purpose Mayor Wilson and Councilman Cross have requested to discuss the transaction privilege tax (TPT, commonly referred to as sales tax) on livestock/poultry feed. The City elected to collect this tax as part of the City's Tax Code in 1979. This item will be on the May 18t" Work Session agenda and, if Council desires to proceed, Staff will schedule the item for Direction to Staff at a future City Council meeting. Background/Discussion Just after the City was established in January 1979, one of the first ordinances, Ord. No. 4, enacted a 1% TPT on every transaction in the City that wasn't pre-empted by State or Federal Law. This included "selling any tangible personal property - personal property which may be seen, weighed, measured, felt, touched, or is in any other manner perceptible to the senses - whatsoever at retail or to the ultimate consumer." Though livestock feed is not directly mentioned, this very broad definition does cover it. No State Law exempted the City from charging it. In 1987, the State adopted the Model City tax Code (MCTC), a standardized TPT system for all Cities and Towns to follow. This system is far more categorical than the original tax code utilized by the City and also creates several local options that cities may elect or elect not to charge. When the City Council adopted the MCTC with Ord. No. 588, the old tax code was applied to the new MCTC model, which included livestock feed. Though there have been changes in the MCTC since, none has impacted livestock feed, which remains in effect today. A business that opened in the 2010s was found to be out of compliance in not paying the TPT on livestock feed; the City addressed the issue, and the business subsequently came into full compliance. In 2016, the State Legislature eliminated the State TPT for livestock and poultry feed. This had no impact on the Citywide TPT. Livestock feed is included in the TPT retail category and there is no way to break apart the category for analysis to understand what the fiscal impact would be to the City if it were to be eliminated. Next Steps If Council wishes to proceed, staff will place the item for Direction to Staff at the June 2nd Council Meeting. Public Input This item will require an ordinance and public hearing before Council action. Attachments Staff have attached to Legistar for reference Ord. No. 4, Ord. No. 588, and minutes of the September 1, 1987 City Council Meeting r ORDINANCE NO. 4 AN ORDINANCE OF THE CITY OF APACHE JUNCTION, ARIZONA IMPOSING AND LEVYING A TRANSACTION PRIVILEGE TAX, AS AUTHORIZED BY THE CONSTITUTION OF THE STATE OF ARIZONA, AR`1'ICLE 9, SECTION 6. 8-5 BUSINESS 8-5-1 Article 8-5 TRANSACTION PRIVILEGE TAX 8-5-1 Definitions 8-5-2 Permit Requirements 8-5-3 Imposition of Tax -- Tax Schedule 8-5-4 Exemptions 8-5-5 Administration and Procedures 8-5-6 Assessment and Appeal 8-5-7 Violations Section 8-5-1 Definitions In this article unless the context requires otherwise. A. "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. This definition shall not be interpreted to include activities listed in paragraphs 2, 3, 4, 5, 8 and 9 of Section 8-5-3 (A) of this article. B. "Auditor" means any citeemployee or agent authorized by the tax collector to audit records of a person subject to the tax specified by this chapter and may include an employee of another city or town. C. "Business" includes all activities or acts, personal or corporate, engaged in and caused to be engaged in with the object of gain., benefit or advantage, either director indirect, but not casual activities or sales. D. "Contracting" means engaging in business as a contractor.. E. "Contractor" means a person who, for either a fixed sum, price, fee, percentage, bonus or other compensation other than actual wages, undertakes to or offers to undertake to, or purports to have capacity to undertake to, or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith. The term "contractor" includes subcontractors, specialty contractors, developers and speculative builders. F. "Engaging", when used with reference to engaging or continuing in business, means the exercise of corporate or franchise powers. 8-5-1 BUSINESS 8-5-1 G. "Gross income" means the gross receipts of a taxpayer derived from trade, business, com-nerce or sales and the value proceeding cr accruing from the sale of tangible personal property or service, or both, and without any deduction on account of losses. H. "Gross proceeds of sales" means the value proceeding or accruing from the sale of tangible personal property without any deduction on account of the cost of property sold, expense of any kind, or losses,. but cash discounts allowed and taken on sales shall not be included as gross income; "gross income" or "gross proceeds of sale" shall not be construed to include goods, wares or merchandise, or value thereof, returned by customers when the sale price is refunded either in cash or by credit, nor the sale of any article accepted as part payment on any new article sold, if and when the full sale price of the new article is included in the "gross income" or "gross proceeds of sales", as the case may be. I. "Gross receipts" means the total amount of sale, lease or rental price, as the case may be, of the retail sales of retailers, including any services that are a part of the sales, valued in ;Honey, whether received in money or otherwise, including all receipts, cash, credits and property of every kind or nature, and any amount for which credit is allowed by the seller to the purchaser, without any deduction therefrom on account of the cost of the property sold, materials used, labor service performed, interest paid, losses or any other expense. The term does not include cash discounts allowed and taken or the sale price of property returned by customers, when the full sale price thereof is refunded either in cash or by credit. J. "Hotel" means any public or private hotel, inn, hostelry, tourist home or house, motel, rooming house, apartment house, trailer or other lodging place within the City of. Apache Junction offering, lodgina; -arherein ,the owner and operator thereof, for compensation, furnishes lodging to any transient, except foster homes, rest homes, sheltered care homes, nursing .homes or hospitals. K. - "Lodging" and "lodging space" means the use or possession, or the right to the use or possession, of any room or apartment in a hotel, or the right to the use or possession of the furnishings or to the services and accommodations accompanying the use and possession of the room, including storage or parking space for the property of a transient. L. "Manufacturer" means a person who is principally engaged in the fabrication, production or manufacture of products, wares or articles for use from raw or prepared materials, imparting to such materials new forms, qualities, properties or combinations. This definition shall not be interpreted to include activities listed in paragraphs 2, 3, 4, 5, 8 and 9 of Section 8-5-3 (A) of this code. 8-5-1 BUSINESS 8-5-1 M. "Modifier" means a person who reworks, changes or adds to products, wares or articles of manufacture. This definition shall not be interpreted to include activities listed in paragraphs 2, 3, 4, 5, 8 and 9 of Section 8-5-3 (A) of this code. N. "Notice" means a written instrument served by the town as follows, with time commencing from date of mailing, serving, filing or recording: 1. By registered or certified mail to the last known address of the person to whom it is required to. be given; or 2. By personal service upon the person or his lawful representative; or 3. By filing or recording with a clerk of the superior court or a county recorder. 0. "Owner-builder" means a person who owns or leases real property within the City acting as a contractor in constructing any improvement upon the real property 'Which real property ,as improved is held by such person for his use or for rental purposes. An owner-builder who sells such real property as improved at any time on or before the expiration of twenty-four months after an occupancy permit for such improvemen't. is issued, or if no permit is issued, within twenty-four months after final inspection of the improvement or when the improvement is completed, whichever is later, shall be treated as a "prime contractor" for purposes of this article. For purposes of this definition, a "sale" of real property as improved includes any form of transaction whether characterized as a lease or otherwise which in substance is a sale and J ncludes. any lease of the improvement for a term of thirty years or more with all options for renewal being included as a part of the term. P. "Permanent resident" means any person who, as of a given date, has occupied lodging space or has paid or become obligated to pay for the right to occupy lodging space, in a particular hotel for the thirty consecutive days next preceding such date, or has signed and performs under a lease. Q. "Person." or "company", herein used interchangeably, means an individual , officer, agent, firm, partnership, joint venture, association, corporation, estate, trust or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intent to give a more limited meaning is clearly intended by the context. R. "Prime contractor" means a contractor which the owner or lessee of the real property being improved treats as being responsible for admin- istration, construction and completion of the improvement. For purposes of this definition, a person who, for either a fixed sum, price, fee, percentage, bonus or other compensation other than actual wages, undertakes to or offers to undertake to, or submits a bid to, or does himself or by or through others, supervises the construction of the improvement, or coordinates the construction of the improvement, or both, is a' prime contractor, unless such supervisor or coordinator demonstrates, to 8-5-1 BUSINESS 8-5-1 the City s satisfaction, that another contractor is, in fact, the prime contractor for the improvement; provided, a person acting on behalf of an owner-builder rendering -consulting services shall -not be regarded as a prime contractor if: 1. Such person does not guarantee a maximum price for the improvement to the owner-builder; 2. Such person does not contract with contractors constructing the improvement; and 3. Such person is not responsible to the owner-builder for the admin- istration, construction and completion of the improvement. S. "Repairer" means a person who restores or renews products, wares or articles of manufacture. This definition shall not be interpreted to include activities listed in paragraphs 2, 3, 4, 5, 8 and 9 of Section 8-5-3 (A) of this article: T. "Retailer" means every person engaged in the business of making sales at retail, and when in the opinion of the tax collector it is necessary for the efficient administration of this article, includes dealers, distributors, supervisors and employers, and salesmen, representatives, peddlers or canvassers as the agents of such 'dealers, distributors, supervisors or employers under whom they operate or from whom they obtain the tangible personal property sold by them, whether in making sales on their own behalf or on the behalf of such dealers, distributors, supervisor or employers. U. "Retail sale" or "sale at retail" means a sale for any purpose other than for resale in the form of tangible personal property but the . expressions of "transfer of' possession", "lease" and "rental" as used in the definition of "sale", mean only such transactions as are found upon investigation to be in .lieu of sales as defined without the words "lease" or "rental". V. "Room rental" means the total charge,' exclusive of all federal, state and municipal taxes, made by any hotel for lodging or lodging space furnished any transient. If the charge made by such hotel to such transient includes any charge for services or accommodations in addition to that of lodging, or the use of lodging space, then such portion of the total charge as represents only room or lodging space rental shall be distinctly set out and billed to such transient by such hotel as a separate item. W. "Sale" means any transfer of title or possession, or both, exchange, barter; lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property, for a consideration or any agreement therefor, and includes, but is not limited to: 1. Any transaction whereby the possession of property is transferred, but the seller retains a security interest for the payment of the purchase price. 4 8-5-1 M)lNtSS b-S-C 2. The fabrication•of tangible personal property for consumers who furnish either directly or indirectly the materials used in the fabrication work, where such fabrication is customarily included in the sale price of similar tangible personal property sold to consumers. 3. The furnishing, preparing or serving for a consideration of any tangible personal property consumed on the premises of the person furnishing, preparing or serving such tangible personal property. X. "Stock" means the goods and wares of a person kept for sale and traffic, and for the, purpose of this article shall include, but not be limited to all tangible personal property specially ordered for any customer, if for any reason such specially ordered property is brought into the City prior to completion of the sale. Y. "Tangible personal property" means personal property which may be seen, weighed, measured, felt, touched or is in any other manner perceptible to the senses. Z. "Tax collector" means the Council of the City of its authorized agent. AA. "Taxpayer" means any person liable for any tax imposed by this article. BB. "Transient" means any person who, for any period of not more than thirty days, either at his own expense or at the expense of another, obtains lodging or the use of any lodging space in any hotel for which lodging or use of- lodging space a charge is made. CC. "Wholesaler" or "jobber" means any person who sells tangible personal property for resale by a licensed retailer and does not sell tangible personal property for consumption by the purchaser. When a person normally selling for resale makes any sale at retail or for consumption by the purchaser, such person is defined as a "retailer" for purposes of this article. Sec. 8-5-2 Permit Requirements A. Every person having a gross proceeds of sales or gross income upon which a privilege tax is imposed by this article desiring to engage in or to continue in business activities within the town shall make application to the tax collector for a transaction privilege permit, accompanied by a fee of two dollars, and no person shall engage in business or continue in business within the town until he shall have such a permit. This fee shall become effective for all new permits at the start of the day on which this article becomes effective. Previously existing privilege licenses shall be considered to be trans- action privilege permits for the purposes of this article. -7-L DUJ111C33 O-J-L B. Application for privilege permits required under this article shall be made upon, forms prescribed by the tax collector. C. It shall be a condition precedent to issuance of a permit that all provisions of this code, ordinances, regulations and requirements affecting the public peace, health and safety be complied with in toto. D. The privilege permit required by Section 8-5-2 (A) shall be good so long as all returns and tax payments are made as required by this article. E. Upon the failure of any person to pay the required tax, penalty and interest within a period of thirty days after it becomes due, the tax collector may give such person notice of intent to cancel the privilege permit. If the person so notified requests a hearing within ten days from notice, he shall be granted a hearing before the tax collector. Upon a finding by the tax collector that tax, penalty and interest is unpaid and has remained unpaid at least thirty days, or if no request for hearing has been received within ten days after notification as herein provided, the privilege permit shall be cancelled and such permit shall not be reissued untiI-all such taxes, penalty and interest due shall have been paid. F. Any person whose privilege permit has been cancelled shall be required to pay a fee of twenty-five dollars for each reissue of a permit and such permit shall not be reissued until all taxes, penalties and interest have been paid. The tax collector may, at his discretion, reissue under the previous permit number or issue a new permit. G. A person engaged in or conducting taxable business in two or more established locations within the City shall be required to obtain a separate permit for each location, except that for the business of leasing or renting the use or occupancy of real property, only one application for such property within the City shall be required; however, the applicant shall be required to list' all such property by street address or other satisfactory identification and shall notify the tax collector within ten days after sale or acquisition of any such real property, clearly identified by location in such instance. H. At the time a taxable business is sold, or when any other ownership. change occurs, a new privilege permit shall be obtained for each permit effective at the time of such change. I. Any person holding a privilege permit shall be required to notify the tax collector of any change in either mailing address or location within fifteen days after such change occurs. A fee of one dollar shall be .required whenever any change in location of a business within the City occurs. J. The permit prescribed in Section 8-5-2 (A) shall be nontransferable and shall be displayed in some conspicuous part of the applicant's place of business. 8-5-3 BUSINESS 8-5-3 Sec. 8-5-3 Imposition of Taz -- Tax Schedule There is hereby levied and shall be collected by the tax collector for the purpose of raising revenue to be used in defraying the necessary expenses of the City, privilege taxes measured by the amounts or volume of business transacted by persons on account of their business activities, and in the amounts to be determined by the application of rates against values, gross proceeds of sales or gross income, as the case may be, in accordance with the following schedule: A. Percentage of tax and business liable to taxation. An amount equal to one percent of the gross proceeds of sale or gross income from the business upon every person engaging in or continuing within the City in the following businesses:. 1. Transporting for hire persons or property by any means of transportation, from a point within the City to another point within the City or from a point within the City to another point within the State of Arizona; provided, that the levy shall not apply to common or contract carriers paying a tax under the provisions of Arizona Revised Statutes Section 40-641 . 2. Mining, quarrying, smelting or producing for sale, profit or commercial use, any oil, natural gas, limestone, sand, gravel, copper, gold, silver or other mineral product, compound or combination of mineral products, or felling, producing or preparing timber or any produce of the forest for sale, profit or commercial use. In computing the tax, the price shall be reduced by the actual freight paid by any person from the place of production to the place of delivery when the .freight is included in the sale prices of the products. 3. Producing and furnishing, or furnishing to consumers, electricity, electric lights, current, power or gas, natural or artificial, and water. 4. Transmitting local or long distance messages or conversations by telephone, or messages by telegraph, from a point within the City to another point within the State of Arizona, including gross income derived from tolls, subscriptions and services on behalf of subscribers, or by publication of a directory of the names of subscribers. 5. Operating a pipe line for transporting oil, or natural or artificial gas, through pipes or conduits from a point within the City to another point in the City or in the state. 6. Operating private railroad car lines, as they are defined in Title 42, Chapter 4, Article 3, Arizona Revised Statutes, from one point within the town to another point in the City or state. 1 8-5-3 BUSINESS 8-5-3 7. Publication of newspapers, magazines or other periodicals and publications, when published within the City, including the gross income derived from advertising, notices and subscriptions sold within the City : Subscriptions sold within the City for newspapers, magazines or other periodicals and publications published without the town shall also be taxable under this section, and advertising sold within the town shall likewise be taxable. 8. Job printing, engraving, embossing and copying, advertising by billboards, direct mail, radio, television or by any means calculated to appeal to prospective purchasers or users. 9. The contracting business or acting as a prime contractor, or both. a. For purposes of this classification, there shall be subtracted from the gross income, gross ;proceeds of sale or gross receipts subject to the privilege tax, a deduction in the amount of thirty-five percent of said gross income, gross proceeds of sale or gross receipts in lieu of any labor, Shop or subcontractor deductions. Subcontractors or others who perform services in respect of the improvement, building, highway, road, railroad, excavation or other structure, project, development or improvement (hereinafter "job") are exempt from the privilege tax. on their gross income, gross proceeds of sale or gross receipts derived from the job if they can demonstrate to the City's satisfaction that the job was within the control of a prime contractor or prime contractors and that such prime contractor paid or should have paid the privilege tax upon the gross income, gross proceeds of sale or gross receipts attributable to the job and from which the subcontractors or others were paid. b. An owner-builder, who is not a prime contractor, shall pay the privilege tax or use tax, as the case may be, upon the sales to him or to his account of all tangible personal property incorporated or fabricated into any structure, project, development or improvement undertaken by him; provided, if the owner-builder is treated as a prime contractor for privilege tax purposes, he shall deduct from the gross income, gross proceeds of sale or gross receipts derived from the sale (as defined under owner- builder) of the real property as improved by him: (1) An amount of thirty-five percent of said gross income, gross proceeds of sale or gross receipts in lieu of any labor, shop or subcontractor deductions; (2) Either a tax credit equal to the amount of privilege or use tax, or the equivalent tax, paid to the City of Apache Junction or another city or town in respect of the tangible personal property incorporated or fabricated into the said structure, .project, development or improvement undertaken by him; and 8-5-3 BUSINESS 8-5-3 (3) A tax credit equal to the amount of privilege taxes paid by the contractor or subcontractors to the City of Apache Junction on the gross income, gross proceeds -of sale or -gross receipts derived by the contractor or subcontractor from the construction of the improvement upon the real property owned or leased by the owner-builder and sold by him. c. Reporting by contractors. Contractors shall report on a progressive billing basis or cash receipts basis, but home builders, .speculative or otherwise, and owner-builders shall report as gross income, gross proceeds of sale or gross receipts the total selling price at the time of closing of escrow or transfer of title.* d. Deductions allowable and pertaining to the gross income, gross proceeds of sale .or gross receipts may not be taken prior to. the time that said proceeds or receipts are reported. 10. Restaurants, dining rooms, lunchrooms, lunch stands, soda fountains, bars, taverns or similar establishments where articles of food or drink are sold, and catering or sale of food and drink from mobile units within the town. Articles of food or drink prepared for service or resale by another person may be deducted, providing that the -person reselling has a valid privilege permit for such purpose. 11. Selling at retail such property used by human beings for food, drink or condiment, whether simple, mixed or compound, where such property is not customarily sold for consumption on .the premises commonly and generally known as the business of selling groceries at retail . The sale to hotels, restaurants, lunchrooms, boarding houses or similar establishments of articles used by human beings for food, drink or condiment, whether simple, mixed or compounded, where such articles are customarily prepared and served to patrons for consumption on the premises; -shall be deemed wholesale sales as to such commodities, providing that the person reselling has a valid privilege permit for such purpose. 12. Selling any tangible personal property whatsoever at retail or • to the ultimate consumer, including but not limited to sale of new and used vehicles of any type, and sales made from mobile units when within the town'. Gross receipts from painting signs on structures within the town or upon vehicles while within the town shall be taxed as retail sales, without deduction. Sales of tangible personal property within the State of Arizona which result from activities of agents or representatives of a person whose principal office within Arizona is within the City of Apache Junction shall be taxable, provided that delivery is made from the City.. 8-5-3 BUSINESS 8-5-3 13. Operating or conducting amusements including but not limited to theaters, movies, operas, exhibitions, concerts, carnivals, circuses, shows of any type or nature, amusement park admissions, amusement rides, menageries, fairs, races, contests, games, golf courses, tennis courts, batting or driving ranges, riding on any animals, juke boxes, pinball machines, billiard and pool parlors, bowling alleys, dance halls, public dances, boxing or wrestling matches, or any other business charging admission fees for exhibition or amusement. Nonprofit -private clubs where basic membership fees cover use of amusement facilities, and amusements conducted by the organizations themselves on an occasional basis to raise funds for projects of bona fide religious organizations, nonprofit educational institutions and nonprofit fraternal or. service clubs are exempt. 14. Leasing or renting for a consideration any tangible personal property; sales of tangible personal property to be so leased or rented shall be deemed to be resale sales. 15. Leasing or renting for a consideration the use or occupancy of real property, including any improvements, rights or interest in such property. B. Basis for taxation under certain conditions. 1. In determining value as applied to sales from one to another person, or other circumstances where the relation between the buyer and seller is such that the gross proceeds from the sale are not indicative of the true value of the subject matter of the sale, the council may prescribe uniform and equitable rules for determining the value upon which the tax herein levied shall be based, corresponding as nearly as possible to the gross proceeds from the sale of similar products of like quality or character of other taxpayers where no common interest exists between the buyer and seller, but otherwise under similar circumstances and. conditions. 2. For the purpose of computing the tax by this article, "conditional or time sales" shall be treated as credit sales and tax shall be based only upon the amounts received under such security agreements, but if the seller transfers his interest in such agreements to a third person, he shall pay an amount based upon the .full sale price of the commodity, unless a record is kept of payments thereafter made on the contract in such. manner that the tax collector may at all times ascertain from the records of the seller the amount paid thereon by the purchaser. . Af at any time the tax collector cannot ascertain the amount paid thereon, the tax shall be computed to include any amounts not shown to be paid by the records ,of the seller to the satisfaction of the tax collector. 3. When any person is engaged in an occupation or business to which Section 8-5-3 is applicable, such person's books shall be kept so as to show separately the gross proceeds of sale of tangible personal property and the gross income from sales of nontaxable service, and if not so kept, the tax shall be based upon the total of such person's gross proceeds of sales of tangible personal property and gross income from service. 8-5-4 BUSINESS 8-5-4 4. When any person is engaged in the business of selling tangible personal property at both wholesale and retail, the retail rate shall be applied only to the gross proceeds of the sales made other than at wholesale when such person's books are kept so as to show separately the gross proceeds of sales of each class, and when such books are not so kept, the retail rate shall be applied to the gross proceeds of every sale so made. 5. For the purpose of Section 8-5-3, the total amount of gross income, gross receipts or gross proceeds of sale shall be deemed to be the amount of the sale, exclusive of the tax imposed by Section 8-5-3, providing the person upon whom the tax is imposed shall establish to the satisfaction of the tax collector that any tax collected from customers has been added to the sale price and not absorbed by him. Sec. 8-5-4 Exemptions The following shall not be subject to taxation under this article: A. Any business, calling, profession or occupation where the general law of the State of Arizona or general law of the United States of America preclude the levying of such a tax. B. Sales in interstate or foreign commerce when prohibited from being so taxed by the Constitution or general laws of the United States or by the Constitution of the State of Arizona. C. Professional services, instruction and other services not connected with the making of retail sales. D. Contracting, retail sales and any other taxable activity for the City of Apache Junction. E. Sales of gasoline upon which a tax has been imposed under the provisions of Title 28, Chapter 9, Article 9, Arizona Revised Statutes. F. Sales of tangible personal property to a person licensed as a contractor under Title 32, Chapter 10, Arizona Revised Statutes, who holds a valid privilege tax permit for engaging in or continuing in the business of contracting when the property so sold is incorporated or fabricated by the contractor into any structure, project, development or improvement in fulfillment of a contract therefor. G. Sales of tangible personal property made directly to the United States Government, its departments or agencies, by the manufacturer, modifier, assembler or repairer. A deduction of fifty percent shall be permitted where such sales are made by persons other than those specified in the previous sentence. 8-5-4 BUSINESS 8-5-4 H. Sales of tangible personal property by persons engaging in or continuing in the business of processing, manufacturing, fabricating, modifying, assembling or repairing, when such sales are made for resale and not at retail and not to an ultimate consumer. This subsection shall not apply to any sales of tangible personal property which are not the same as or similar to tangible personal property sold through distributors, jobbers, wholesalers, retailers or other persons than those substantially and principally engaging or continuing in the actual manufacturing, processing, fabricating, modifying or assembling thereof. I. Sales of tangible personal property to manufacturers, modifiers, or assemblers where such property 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. J. Services provided in connection with retail sales if invoices to the customer, sales tickets, cash register tapes and all other business records show separate charges for such services. This exemption shall apply only where such service is not customarily included in the retail sale itself and where such service is not an essential element in the retail sale itself. No deduction shall be allowed for fabrication labor of retail items sold. K. Sales of tangible personal property in which all of the following occur without the City limits of the City of Apache Junction. 1. The placement of the order. 2. The stock from which delivery was made. 3. The transference of title and possession. For the purposes of this exemption, any person engaging or continuing in the business to which this exemption is applicable shall maintain and keep accounting records or books indicating separately the gross proceeds of sale or gross income of tangible personal property which occur without the town limits, and if not so maintained the tax to be imposed will be upon the total of such person's gross proceeds of sale or gross income. L. The sale of drugs on the prescription of a member of the medical, dental or veterinary profession who is licensed by law to administer such drugs. M. All personal property purchased in this City by any 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, or operated by the state or any political subdivision of this state. 8-5-5 BUSINESS 8-5-5 N. The sale of stock and bonds. 0. Sales of machinery or equipment to be used directly in manufacturing, processing, fabricating, job printing, refining or metallurgical operations, including leaching, milling, precipitating, smelting and refining. P. Sales of machinery or equipment to be used directly in the process of extracting ore or minerals from the earth for commercial purposes, including equipment required to prepare the materials for extraction and for the handling, loading or transportation of such extracted material to the surface. Q. Sales to telephone or telegraph companies of central office switching equipment, switchboards, private branch exchange equipment, microwave radio and carrier equipment and coaxial cable. R. Sales of machinery, equipment or transmission lines to be used directly in the production or transmission of electrical power, but not for such machinery, -equipment or transmission lines that are to be used for distribution and not for transformers and control equipment to be used at transmission substation sites. S. Sales of pipes or valves four inches in diameter or larger to be used for transporting oil , natural gas, artificial gas, water or coal slurry. T.' Sales of aircraft, navigational and communication instruments and other accessories and related equipment to be used in conjunction with or to become part of aircraft to be used in the transportation of persons, property or U.S. Mail in intrastate, interstate or foreign air transportation for hire by airlines holding a federal or state certificate of public convenience and necessity or holding a foreign air carrier permit. U. Sales of railroad rolling stock, rails, ties and signal control equipment to be used directly in the transportation of persons or property in intrastate or interstate transportation for hire. V. Sales of machinery or equipment to be used directly in the drilling for oil or gas or used directly in the process of extracting oil or gas from the earth for commercial purposes. Sec. 8-5-5 Administration and Procedures A. Vested administration and payment of tax. The administration of this article is vested in and exercised by the City of Apache Junction, except as otherwise specifically provided, and all payments shall be madeto the City of Apache Junction. If payment is made in any other form than money which is legal -tender in the State of Arizona and the United States of America, the tax obligation shall not be ended until the check, bank draft or money order has been honored by the person on whom drawn: 8-5-5 BUSINESS 8-5-5 B. Presumption that all gross receipts are taxable. For the purpose of the proper administration of this article and to prevent evasion of the tax hereby imposed, it shall be presumed that all gross receipts are subject to the tax until the contrary is established by the person seeking the exemption from said taxation. C. Burden of proving sale was not at retail. The burden of proving that a sale of tangible personal property was not a sale at retail shall be upon the person who made it, unless such person shall have taken from the purchaser a certificate to the effect that the property was purchased for resale. D. Tax imposed is cumulative and supplemental to others. The tax imposed by this article shall be cumulative and supplemental to all other taxes levied by law. E. Records of taxpayer. It shall be the duty of -every person engaging or continuing in business activities within this town for which a ' privilege tax is imposed by this article to keep and preserve for a minimum of three years, suitable records of the gross income, gross receipts of sales, invoices for goods and merchandise purchased and sold, resale certificates, job labor records and all other such books or accounts as shall be necessary to determine the amount of tax for. which such person is liable under the provisions of this article. Collection of back privilege taxes by the town shall be limited to a period of three years prior to the date when the tax collector began an audit of the taxpayers books, wrote to the person through use of ordinary mail concerning an apparent violation of the article, or took some other recorded action to require a privilege tax permit application or other compliance with the article. All records mentioned in this subdivision above, shall be open for examination at any time by the tax collector. F. Divulging of information forbidden. It is unlawful for any officer, employee or agent of the City of Apache Junction.to make known in any manner whatsoever the business affairs, operations or information obtained by an investigation of records and equipment of any person visited or examined in the discharge of his official duty, or the amount, or source of income, profits, leases, expenditures or any particular thereof-, set forth or disclosed in any return or report, or the amount of tax paid. The council may, by motion, authorize an examination of the reports made pursuant to this article by the United States Director of Internal Revenue or the proper officials of the State of Arizona. Successors, receivers, trustees, executors, administrators and assignees, if directly interested, may be given information as to the items .included in the measure and amounts of any unpaid tax or amounts of tax. required to be collected interest and penalties. Divulging of applicable information to any authorized employee or agent of an incorporated city or town shall be permitted when an employee or agent of another incorporated city or town is authorized by the tax collector to conduct audits for the City.!of Apache Junction. Information supplied on privilege permit applications shall not be considered as confidential. Any officer, employee or agent of the City of Apache Junction shall be authorized to divulge such confidential information as may be necessary upon the order of a court of competent jurisdiction. 8-5-5 BUSINESS 8-5-5 G. Inadequate records. In the event the records of the gross, income, gross receipts or gross proceeds of sales of the business, kept by the taxpayer, are deemed by the tax collector to be unsuitable, or the taxpayer does not keep such other books or records as may be necessary to determine the amount of the tax for which he is liable under the provisions of this article, the tax collector may prescribe the form and manner of keeping such books and records. In the event the taxpayer fails or refuses to follow such prescribed. form, and the tax collector cannot ascertain from the records kept by the taxpayer the gross income, gross receipts or gross proceeds of sale of the business or the amount of the tax for which the taxpayer is liable under the provisions of this article, the tax collector may proceed as though such taxpayer failed or refused to make a return in the manner prescribed by this article. H. When tax payable. Except as otherwise specified in this article, the taxes levied under this article shall be due and payable on or before the fifteenth day of the month next succeeding the period in which the tax accrues and shall be delinquent five days thereafter. The taxpayer shall, on or before the fifteenth day of the stated month, make out a return showing the gross amount, any authorized deductions, taxable amount and amount of the tax due for the preceding month. The taxpayer shall" be required to use the report form authorized by the tax collector, and shall mail or deliver the same, together with remittance for the amount of tax due, payable to the City of Apache Junction to the tax collector or any City employee authorized to receive such payment. The tax return shall be signed by the taxpayer or his authorized agent, and such signature shall be evidence that the person signing the return verifies the accuracy of the information supplied in the return. 1. In any case where the taxpayer has a reported total "taxable amount" of fifteen hundred dollars or less for the previous calendar quarter of the year, the taxpayer may make application to report and pay the tax on a quarterly basis, upon the written approval of the tax collector. Any taxpayer on a quarterly.-reporting basis must report and pay accrued tax due on or before the fifteenth day of the month following the. calendar quarter to be reported. 2. If the taxpayer later reports a total "taxable amount" for any quarter of fifteen hundred dollars or more, he shall report and pay on a monthly basis. I. Cash receipts or accrual basis: The taxpayer may elect to file returns and pay his tax either on a cash receipts or accrual basis, but the taxpayer shall not change from one basis to the other, without the prior written approval of the tax collector. As a condition of granting such approval, the tax collector may require an audit of the taxpayer's records. 8-5-5 BUSINESS 8-5-5 J. Consolidated returns. -Any person engaging in two or more forms of business of .like classification taxable under this article may file a consolidated return covering all business activities of like classi- fication in which he is engaged within the town. i K. Extension of time for making returns. The tax collector may for good cause extend the date for making any return required under the provisions of this article, but the date for filing such return shall not be extended beyond the fifteenth day of the second month next succeeding the regular due date. L. Penalty for delinquency. Any -taxpayer who shall have failed to pay j such tax within five days from the date upon which such payment shall have become due shall be subject to -and shall pay a penalty of ten percent of the amount of such tax, together with interest on such tax at the rate of one-half of one percent per month or fraction thereof until paid. M. Correction of errors. If the taxpayer makes an error or errors in computing the tax assessable against him, the tax collector shall correct such error and notify the taxpayer promptly by ordinary mail that such correction has been made. Any additional tax for which the taxpayer becomes liable shall be payable within ten days after the letter or form showing the correction is mailed to the taxpayer. If the taxpayer makes an error which results in overpayment of tax, the tax collector shall allow credit against tax due on future returns or shall authorize a refund to the taxpayer. N. Duties of person quitting business, his successor or assignee. Any person who sells his business or stock of goods or quits business shall be required to make the return provided for under this article within fifteen days after the date he sold his business or stock of goods or quit business, and his successor in business or assignee shall be required to withhold a sufficient amount of the purchase money to cover the amount of said taxes due and unpaid until such time as the former owner shall produce a receipt from the tax collector showing that the taxes have been paid, or a certificate that no taxes are due. 1. If the, purchaser of a business or stock of goods shall fail to withhold purchase money as above provided and the taxes shall be due and unpaid after the fifteen-day period herein provided, he shall be personally liable for the payment of the taxes accrued and unpaid on account of the operations of the business by the former owner. 2. Transaction privilege tax liability of the purchaser shall be limited to no more than that accrued during a period of one full year prior to the date such business purchase becomes effective. I 8-5-5 BUSINESS 8-5-5 3. It is unlawfu-1 for the purchaser to refuse or fail to pay the back taxes accrued during said period within thirty days after the tax collector mails a letter or other notice by ordinary mail to the purchaser requesting -such payment of back taxes. 0. Tax shall be lien. The tax imposed by this article, if not reported and paid by the due date specified by this article, shall constitute a lien on the property of any person subject to this article. The procedure to perfect such lien shall be as follows: 1. The tax collector shall give written notice to the taxpayer at his last known mailing address by certified or registered mail, or such notice may be sent to the address at which the business is conducted. This written notice shall indicate that the City will file a lien on the subject property unless the taxpayer reports and pays all the tax past due including any penalties and interest due under this article or provides satisfactory evidence to the tax collector that no taxes are due, within a period of thirty days from service or receipt of said written notice. 2. If the taxpayer does not pay taxes due or provide evidence that .no taxes are due within thirty days after service or receipt of said written notice, the tax collector may prepare. in triplicate copies of a "notice and Claim of Lien" and file one copy with the county recorder of the county in which the property is located. The tax collector shall then send by certified or registered mail a copy to the taxpayer at his last known mailing address or at the address at which the business is conducted. The "notice and Claim of Lien" shall contain the following: a. A description of the property sufficient for identification. b. The name of the taxpayer as owner or reputed owner of the property. c. The amount of the delinquent tax, including penalties and interest; or if this amount cannot be determined precisely because suitable records and books were not made available by the, taxpayer, the amount assessed, including penalties and interest, by the tax collector as authorized by this article when such books and records are not available or are unsuitable. From and after the date of its recording in the office of the county recorder, the lien shall attach to the property-until paid. A sale of the property to satisfy the lien shall be made upon judgment of foreclosure and order of sale. The Cityshall have the right to bring an action to enforce the lien in the superior court of the county in which the property is located, at any time after its recording, but failure to enforce the lien by such actions shall not affect its validity. The recorded "Notice and Claim of Lien" shall be prima facie evidence of the truth of all matters recited therein and the regularity of all proceedings prior to the recording therein. 8-5-6 BUSINESS 8-5-6 A prior recording for the purposes provided in this section shall not be a bar to the subsequent recording of a lien for such purposes, and any number of such liens on the same property may be enforced in the same action. P. Tax collector may examine books and papers. The tax collector may examine any books, papers, records or other data bearing upon the correctness of -any return or for the purpose ofmaking a return where none has been made, as required by the provisions of this article. If any person shall fail to appear before the tax collector or to answer any material question or to produce any books, records, papers or other data when requested to do so, such failure or refusal shall be reported to the City attorney,, who shall thereupon institute proceedings in the superior court of the county where such witness resides to obtain compliance. Q. Taxpayer's liability. The liability of the taxpayer for taxes due shall remain the same, whether he collects sufficient added payments from his customers to cover such taxes due. 1. Where the taxpayer fails to show "tax collected", deductible "repair labor" and other deductible "service" on invoices to customers, . sales slips and cash register slips, and on all applicable books and records, he shall be liable for taxation on his full gross receipts without .allowance for such items. 2. The burden of proof for all deductions by any taxpayer shall be on the taxpayer, who must prove to the satisfaction of the tax collector that such deductions shall have been legal and proper under this article. A person taking deductions for "resale" or for "payments to subcontractors" shall not take such deductions unless the persons for whom the deductions are taken have obtained the required privilege tax permits. R. Tax liabilities of partners. . All taxes assessed under the provisions of this article upon the business activities of a partnership shall be a liability and charges against each and all of the individual partners; but when paid by the partnership, such liability against each and all of the individual partners shall cease. Sec. 8-5-6 Assessment and Appeal A. Assessment procedure. If any person who is required to file a return under the provisions of this article fails or refuses to make a return, the tax collector shall proceed, . in such a manner as he may deem best, to obtain facts and information on which to base the assessment of the tax herein prescribed; and to this end the tax collector may make examination of the books, records and papers of any such person; and may take the evidence on oath of any person whom he 'may believe to be in possession of facts or information pertinent to the subject of 8-5-7 BUSINESS . 8-5-7 3. If court action has been taken by the taxpayer under paragraph 2 above, all subsequent payments due shall be paid on or before the due date. However, if each tax form is plainly marked "Paid Under Protest", such subsequent payments shall be treated as part of the original protest until such time as court remedies have been exhausted or the court action withdrawn by the taxpayer. D. Collection of delinquent taxes. 1. If any tax imposed by this article, or any protion thereof, is not paid within thirty days after the same becomes delinquent, the tax collector shall be empowered to commence court action in any appropriate court of competent jurisdiction to collect tax, penalties and interest due, and to utilize any and all appropriate remedies as authorized under the laws of the State of Arizona. Such actions may be commenced whether separate criminal charges have been filed to cover alleged failure to comply with this article. 2. Every tax imposed by this article and all increases, interest and penalties thereon, shall become, from the time the same is due and payable, a personal debt from the person liable to the town and it shall be payable to and recoverable by the tax collector. E. Adoption of administrative procedure. The council is hereby authorized to adopt written administrative regulations to 'implement the enforcement of this article or to further define terms used in the article. Such administrative regulations shall be enforceable as though they were integral portions of the article itself. F. State of Arizona administrative procedures. Except where such regulations would conflict with administrative regulations adopted by the council or with provisions of this article, all regulations on the transaction privilege tax adopted by the State Department of Revenue under the authority of Title 41, Chapter 6, Article 1, Arizona Revised Statutes and amendments thereto, shall be considered as part of this article and enforceable as such. Sec. 8-5-7 Violations A. Advertisement regarding taxes. It is unlawful for any person engaged in any of the businesses classified in Section 8-5-3 to advertise or hold out to the public in any manner, directly or indirectly, that the tax herein imposed is not considered as .an element in the price to the consumer. B. Permit required. It is unlawful for any person engaging in a business subject to the city transaction privilege tax to fail to obtain a permit before beginning or continuing such business. - 8-5-6 BUSINESS 8-5-6 inquiry, which oath the tax collector may administer. If no other information is readily available, the tax collector may make a reasonable judgment on the basis of past reports by the taxpayer or .by any predecessor. When the tax collector has reached a decision as to the assessment, he shall notify the taxpayer in writing of such assessment, which shall become final within thirty days after such notice has been mailed or served, unless the taxpayer shall notify the tax collector in writing of a request for a tax hearing within said thirty days. B. Hearing at taxpayer's request. When a taxpayer requests a hearing as indicated in Section 8-5-6 (A) such hearing shall normally be held in the offices of the City of A ache Junction provided that the tax collector may choose another suitable. room in the same city or by mutual agreement with the taxpayer, he may hold the hearing in such other place as may prove desirable. The hearing shall be conducted by the tax collector, and it shall be closed to all except the tax collector and his authorized representatives and the taxpayer and his authorized representatives, unless the taxpayer agrees in writing to waive restrictions on release of confidential information. The tax collector shall provide the taxpayer with not less than ten days notice of the date, time and place of the hearing. During the hearing the taxpayer or his authorized representative may present any evidence he deems appropriate to the issues or questions under consideration. Within fifteen days after the conclusion of the hearing, the tax collector shall affirm, modify or vacate any decision made with respect to the issues or questions discussed in the course of the hearing. Notice of said decision shall be provided to the taxpayer by the tax collector as provided in this article, and said decision shall be effective in ten days after service of notice. C. Payment under protest. If any person feels aggrieved by a tax assessment or believes that any or all of his activities are not subject to the privilege tax required by this article, he shall pay the amount of such assessment or tax claimed due before the delinquent date and shall at that time give notice in writing to the tax collector that all or part of such payment is made under protest, and shall in the notice give the grounds and reasons for such protest and that a certain part thereof or that the total sum is protested. 1. Within ten days after receipt of such protest, the tax collector shall reply .in writing to the last known mailing address of the taxpayer, stating whether the assessment or tax applied is to be changed as requested, and giving reasons for the decision. 2. If the taxpayer is then dissatisfied, he may take appropriate action in the superior court to recover .payments made under protest. Court action shall be taken within sixty days after the tax collector has mailed his reply as required by paragraph 1, above. Failure to take court action within the required sixty day period shall make the protest null and void. 8-5-1 BUSINESS 8-5-1 C. Tax collection from customers. Any person, who collects added payments from customers stated or indicated to be for the purpose of meeting privilege tax obligations of such person, shall be required to use such money only for such purpose. It is unlawful for any person to fail to pay privilege tax due to the City of Apache Junction within a period of thirty days after the date such tax is due if evidence is provided that such person has at any time collected such added payments from customers. D Failure to make return. It is unlawful for -any person or for any officer or agent of any company or corporation to fail or refuse to make the returns and to pay the tax provided to be paid by the provisions of this article, or to make or permit to be made any false or fraudulent return or false statement in any return required by this article; or for any reason to aid or abet another in any attempt to evade the payment of the tax, or any part thereof, imposed by this article; or for any person`or officer or agent of a company to fail or refuse to permit the examination of any book, paper, account, record or other data by the tax collector as required by this article; or to. violate any of the other provisions of this article. PASSED AND ADOPTED by the Mayor and Common Council of Apache Junction, Arizona this D/�Tday of � 1979. Ylay or ATTEST: City Clerk APPROVED AS TO FORM: ty Attorney CITY COUNCIL REGULAR MEETING SEPTEMBER 1, 1987 The regular meeting of the City Council of the City of Apache Junction, Arizona, was held on September 1, 1987,at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Mayor Hill called the meeting to order at 7:00 p.m. INVOCATION Councilwoman Gardner gave the Invocation. PLEDGE OF ALLEGIANCE Vice Mayor Bakkedahl led the Pledge of Allegiance. ROLL CALL Councilmen Present: Councilman Damiano Councilwoman Perkins Councilwoman Gardner Councilman Bluntschly Vice Mayor Bakkedahl Mayor Hill Councilman Absent: Councilman Burgess (ill ) Staff Present: City Manager Bill R. Da Vee City Clerk Kathleen Connelly Deputy City Clerk Lori Zmayefski City Attorney David Alexander Director of Public Safety Bill McDaniel Associate Planner/Deputy Director Jim Nakagawa Director of Public Works Rich Broman Director of Community Services Jeff Bell Economic Development Specialist John Schoeph Operations Supervisor Doug Dobson Assistant Planner Julie Reid Others Present: Mr. Keith Stacha, 6301 E. Roundup Apache Junction, Arizona REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 1 Ms Janet Sotomayor 945 E. Scenic Apache Junction, Arizona Mr. Jimmy Eidson 944 W. 3rd Avenue Apache Junction, Arizona Mr. Roland Hansen 2920 W. Tepee Apache Junction, Arizona Mr. Hershel Eugene Wilson Ms Margaret Campbell 915 S. Palomino Apache Junction, Arizona Ms Bonnie Robinson 1337 W. Rawhide Apache Junction, Arizona ACCEPTANCE OF CONSENT AGENDA ) ) Councilman Damiano MOVED THAT CONSENT AGENDA ITEM NOS. 1, 2, AND 3, BE ACCEPTED AS FOLLOWS: ACCEPTANCE OF REGULAR MEETING AGENDA ACCEPTANCE OF MINUTES FROM REGULAR MEETING OF JUNE 2, 1987 ACCEPTANCE OF MINUTES FROM REGULAR MEETING OF AUGUST 4, 1987 motion. Councilman Bluntschly seconded the VOTE: Unanimous The motion carried Introduction of Distinguished Visitors and Guests Mayor Hill thanked everyone present for attending the meeting. AWARDS, PRESENTATIONS AND COMMUNICATIONS City Clerk Kathleen Connelly explained that the City has been awarded a Pedestrian Protection Program Award by the Arizona Automobile Association, for two years of not having accidents involving pedestrians. Mayor Hill accepted the Award for the City. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 2 CALL TO THE PUBLIC Mr. Keith Stachar, 6301 E. Roundup, Apache Junction, informed the Council of the County tax situation, and that a State mandate is coming to reassess all industrial property in Pinal County. CITY MANAGER'S REPORT City Manager Bill R. Da Vee informed the Council that the State has made a decision to request a re-evaluation of property sales, and there will be a hearing, if anyone is interested in attending. Mr. Da Vee also reported that City of Mesa officials have assured the City that any of their proposed changes would not affect the construction schedule of the Freeway, and the Director of Arizona Department of Transportation felt that the three changes requested by the City of Mesa would not affect the current design features or construction schedule of the Superstition Freeway, and also stated that outside consultants have been contacted to review the State report, and have indicated that a proposal for Council approval will be prepared evaluating the State's recommendation. Mr. Da Vee also reported that Central Arizona Association of Governments Management Committee will be meeting on Thursday to award merit points for the Community Development Block Grant Program, and the City will be making a presentation at that meeting hoping to be funded for the project submitted, which was for improvements in targeted areas and street and lighting improvements in some neighborhoods. PUBLIC HEARINGS APPLICATION FOR SERIES 12 LIQUOR LICENSE, SUPERSTITION SKIES ) Ms Janet Sotomayor, 945 E. Scenic, Apache Junction, applicant for the Series 12 Liquor License, requested approval of the liquor license. Mayor Hill asked if there was anyone who wished to speak in favor of or in opposition to the application. There being no one wishing to address the Council , Mayor Hill closed the hearing to the public. Councilman Damiano MOVED THAT THE APPLICATION FOR A SERIES 12 LIQUOR LICENSE, SUBMITTED BY MR. ESPIRIDION R. SOTOMAYOR FOR SUPERSTITION SKIES RESTAURANT AND LOUNGE, BE RECOMMENDED FOR APPROVAL TO THE STATE DEPARTMENT OF LIQUOR LICENSES AND CONTROL. Councilwoman Perkins seconded the motion. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 3 VOTE: Unanimous The motion carried. PROPOSED ORDINANCE NO. 557, AMENDMENTS TO ZONING ORDINANCE DEFINING ADULT USES AND REGULATING THE LOCATION OF ADULT USES (Postponed Item) ) ) Associate Planner/Deputy Director Jim Nakagawa explained that this ordinance is a proposed amendment to the Zoning Ordinance which would define "Adult Uses", would establish zoning districts where those uses may be permitted, and previously the City Council adopted Ordinance No. 486, than adopted a moratorium prohibiting the establishment of any "Adult Use", and than repealed Ordinance No. 486. Mr. Nakagawa stated that Ordinance No. 557 was developed as a result of recent U.S. Supreme Court rulings regarding Zoning Ordinances regulating "Adult Uses", which excludes convenience and video stores that offer only offer these products on an incidental basis, identifies the purpose of the Ordinance, and identifies zoning districts where these uses may be permitted. Mayor Hill asked if there was anyone who wished to speak on this item. Mr. Jimmy Eidson, 944 W. 3rd Avenue, Apache Junction, addressed the Council in favor of the Ordinance with the words "substantial and significant" removed. There being no one else wishing to address the Council , Mayor Hill closed the hearing to the public. Councilman Damiano MOVED THAT ORDINANCE NO. 557, BE READ BY TITLE ONLY AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 557, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AMENDING THE APACHE JUNCTION, ARIZONA, ZONING ORDINANCE, BY AMENDING AND ADDING SECTION 5.0101, BY AMENDING AND ADDING TO SECTION 16.0604 (3), BY ADDING SECTION 17.0111, AND BY ADDING SECTION 17.0211; REPEALING ANY CONFLICTING PROVISIONS; AND PROVIDING FOR SEVERABILITY. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 4 Councilman Damiano MOVED THAT ORDINANCE NO. 557, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED WITH THE FOLLOWING AMENDMENTS: THAT THE WORDS "SUBSTANTIAL OR SIGNIFICANT" BE REMOVED FROM SECTION 5.0101, PARAGRAPHS A AND B. Councilwoman Perkins seconded the motion. Councilwoman Gardner asked what the effect would be by removing those two words. City Attorney David Alexander stated that removing those two words, the activities that are regulated could be any establishment that sells almost any type of adult book, with Circle K's, and Osco's, as examples. Mr. Alexander explained that the Ordinance stated that anyone selling those articles have to be 1000 feet away from each other, and any currently existing will not be effected. Vice Mayor Bakkedahl asked if Section 32 has been rezoned. Mr. Nakagawa replied that Section 32 is zoned CR-1 Residential Zone, and the State requires a master plan prior to rezoning this to industrial . Vice Mayor Bakkedahl expressed a concern that most adult book stores, etc.., aren't usually located in an industrial area, and a previous case in Washington argued the availability and accessibility of land, and that as Apache Junction does not have available land for those types of uses. Councilman Bluntschly stated that he could not support any ordinance that says we can have this kind of material in the community, and asked the City Attorney if this is as stringent an ordinance that can be adopted. Mr. Alexander replied that this is as stringent as he would like, in regards to defensibility, and further that Vice Mayor Bakkedahl 's statement is correct in that the attempt to regulate the location of adult uses is difficult if a location does not exist, and should the Council choose to regulate, this is as stringent as it should get. VOTE: In Favor: Councilman Damiano, Mayor Hill Opposed: Councilwoman Gardner, Councilwoman Perkins Councilman Bluntschly, Vice Mayor Bakkedahl REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 5 The motion failed. Councilwoman Gardner suggested postponing this Ordinance for 60 days, until a zoning location can be found. Mayor Hill stated that he wished to adopt an Ordinance and then find an area. Councilwoman Gardner asked how long it would take staff to come up with an area. Mr. Nakagawa replied that there may not be an area other than the south part of Section 32, which has to go through the State requirements for rezoning. i Vice Mayor Bakkedahl expressed the feeling that an Ordinance is necessary eventually, but it is necessary to have an area available first. Councilwoman Gardner stated that if the Ordinance is not acted on, this use is being left wide open. Councilwoman Gardner MOVED THAT ORDINANCE NO. 557, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED. The motion died dued to lack of a second. Councilman Damiano MOVED THAT ORDINANCE NO. 557, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED WITH THE FOLLOWING AMENDMENTS: THE WORDS "SUBSTANTIAL OR SIGNIFICANT" BE REMOVED FROM SECTION 5.0101, PARAGRAPHS A AND B, TO BECOME EFFECTIVE IN 31 DAYS. Councilwoman Gardner seconded the motion. VOTE: In Favor: Councilwoman Gardner, Councilwoman Perkins, Councilman Damiano Mayor Hill Opposed: Councilman Bluntschly, Vice Mayor Bakkedahl The motion carried. PROPOSED ORDINANCE NO. 561, PZ-46-86, AMENDMENTS TO ZONING ORDINANCE - REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 6 CONDITIONAL USE PERMITS ) Mr. Nakagawa explained that this ordinance outlines procedures and requirements for processing conditional use permits, and became necessary when a loophole in the City Zoning Ordinance that did not outline a process whereby conditional use permits may be granted for certain uses, and stated that the Planning and Zoning Commission recommends approval , and staff has a suggestion stipulation. Mayor Hill asked if there was anyone who wished to speak in favor of or in opposition to the ordinance . There being no one wishing to address the Council , Mayor Hill closed the hearing to the public. Councilwoman Gardner MOVED THAT ORDINANCE NO. 561, BE READ BY TITLE ONLY AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 561, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AMENDING THE APACHE JUNCTION, ARIZONA ZONING ORDINANCE, BY AMENDING SECTION 6.0101; REPEALING ANY CONFLICTING PROVISIONS; AND PROVIDING FOR SEVERABILITY. Councilman Damiano MOVED THAT ORDINANCE NO. 561, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED WITH THE FOLLOWING AMENDMENTS: THAT SUBSECTION (3)(1) TO READ "ADEQUACY OF ROADWAYS, OFF-STREET PARKING, PUBLIC FACILITIES AND SERVICES TO ACCOMODATE THE PROPOSED USE AND PROVISIONS FOR UPGRADING ORDINANCE IMPROVEMENTS. Councilwoman Gardner seconded the motion. Vice Mayor Bakkedahl asked if this this procedure is standard with other cities, or do most go directly to the City Council with an appeal . Mr. Nakagawa in some cases the Planning and Zoning Commission makes that decision, with an appeals process to the legislative body. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 7 VOTE: Unanimous The motion carried. PROPOSED ORDINANCE NOS. 583, TRAFFIC CONTROL DEVICES (INSTALLATIONS) PROPOSED ORDINANCE NO. 590, TRAFFIC CONTROL DEVICES (DELETIONS) (With the Emergency Clause) ) ) Director of Public Works Rich Broman explained that these traffic control devices are being installed and deleted, due to new development, flood retarding structures, construction of streets, and abandonments. Mayor Hill asked if there was anyone who wished to speak in favor of or in opposition to the ordinances. There being no one wishing to address the Council , Mayor Hill closed the hearing to the public. Councilwoman Gardner MOVED THAT ORDINANCE NO. 583, BE READ BY TITLE ONLY WITH THE EMERGENCY CLAUSE, AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 583, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, ESTABLISHING LOCATIONS FOR STOP SIGNS THROUGHOUT THE CITY OF APACHE JUNCTION, ARIZONA; REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVERABILITY; PROVIDING FOR PENALTIES; AND DECLARING AN EMERGENCY. Councilwoman Gardner MOVED THAT ORDINANCE NO. 583, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED. Councilman Bluntschly seconded the motion. VOTE: Unanimous The motion carried. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 8 Councilwoman Gardner MOVED THAT ORDINANCE NO. 590, BE READ BY TITLE ONLY WITH THE EMERGENCY CLAUSE, AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 590, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, REPEALING THE DESIGNATION OF CERTAIN LOCATIONS FOR STOP SIGNS THROUGHOUT THE CITY OF APACHE JUNCTION, ARIZONA; REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVERABILITY; PROVIDING FOR PENALTIES; AND DECLARING AN EMERGENCY. Councilman Damiano MOVED THAT ORDINANCE NO. 590, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. PROPOSED RESOLUTION NO. 87-56, DECLARING "THE MODEL CITY TAX CODE OF THE CITY OF APACHE JUNCTION, ARIZONA" AS PUBLIC RECORD; AND PROPOSED ORDINANCE NO. 588, ADOPTING "THE MODEL CITY TAX CODE OF APACHE JUNCTION, ARIZONA, BY REFERENCE (With the Emergency Clause - Readoption of of existing City Tax Code by Model Tax Code ) Mr. Da Vee explained that the "Model Tax Code" Ordinance is a culmination of 24 years of effort by the League of Arizona Cities and Towns, with the purpose to get the communities who are involved with the taxation issue to have ordinances that are similar in verbage and approach, and this code is designed with a variety of options to take with uniformity. Mr. Da Vee stated that legislation was proposed that would have pre-empted local options, and the League of Arizona Cities took this approach to preserve those local options. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 9 City Clerk Kathleen Connelly further explained that this Code does not make any changes in the existing regulations, merely putting them in a different form creating a separate chapter in the Code dealing with City Sales and Transaction Tax regulations, and making the language uniform throughout the cities in Arizona. Mayor Hill asked if there was anyone who wished to speak in favor of or in opposition to the item. There being no one wishing to address the Council , Mayor Hill closed the hearing to the public. Councilman Damiano MOVED THAT RESOLUTION NO. 87-56, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING AS A PUBLIC RECORD THAT CERTAIN DOCUMENT FILED WITH THE CITY CLERK AND ENTITLED "THE CITY TAX CODE OF THE CITY OF APACHE JUNCTION, ARIZONA," AND DECLARING AN EMERGENCY, BE APPROVED AND ADOPTED; AND THAT ORDINANCE NO. 588, BE READ BY TITLE ONLY WITH THE EMERGENCY CLAUSE, AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 588, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING THE "CITY TAX CODE OF THE CITY OF APACHE JUNCTION, ARIZONA" BY REFERENCE AND FIXING THE EFFECTIVE DATE THEREOF; REPEALING ARTICLE 8-3 OF THE APACHE JUNCTION CITY CODE; PRESERVING RIGHTS AND DUTIES THAT HAVE ALREADY MATURED AND PROCEEDINGS THAT HAVE ALREADY BEGUN THEREUNDER; REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVERABILITY, PROVIDING PENALTIES FOR THE VIOLATION THEREOF; AND DECLARING AN EMERGENCY. Councilman Damiano MOVED THAT ORDINANCE NO. 588, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. PROPOSED ORDINANCE NO. 589, PZ-9-87, HANSEN ) REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 10 Assistant Planner Julie Reid briefed the Council on the request for rezoning of a 14 acre parcel from General Rural to Single Family Residence Zone, located at the northwest corner of North Warner Dirve and West Tepee Street, and stated that staff recommends CR-1(MH) for the south portion of the site and CR-1 for the north portion with stipulations, which the applicant has concurred with, and that the Planning and Zoning Commission recommends approval of the rezoning suggested by staff, with stipulations. Mr. Roland Hansen, 2920 W. Tepee, Apache Junction, requested approval of splitting the property. Councilwoman Gardner asked if the applicant understood all of the stipulations. Mr. Hansen replied that he did not really understand, specifically the off-site improvements. Ms Reid further explained the off- site improvements. Vice Mayor Bakkedahl stated that the applicant needs to sign a paper agreeing to go along with any off-site improvements in the future. Ms Reid agreed that this is the procedure at this point, that if a development occurs, development should pay for any improvements necessary, but for single family lots a method has been developed for deferring those until everyone in the neighborhood is ready for that, and at this time it doesn't seem that we have a valid method of deferrment. Vice Mayor Bakkedahl stated that Council should define a policy for that method. Mr. Da Vee stated that basically the policy is that either the improvements be put in at the time of approval, or are deferred, and possibly a better way to deferr would be to define a time in which an improvement district would be formed, or a decision would be made at that point after a review. Vice Mayor Bakkedahl asked the applicant if he would agree to a postponement on the off-site improvements for possibly two years, and reconsider it at that time. Mr. Hansen replied that he is selling the property to his son-in-law, so would like to discuss it with that party first. Councilman Bluntschly suggested postponing this item, as the applicant does not appear to clearly understand the stipulations. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 11 Mr. Hansen asked why this is so difficult, when many properties adjoining were split in the past. Mr. Da Vee answered that the difference is that in the past these were deferred based on agreements of the individual that they would agree not to oppose an improvement district, and as that is under challenge now, we can no longer do that. Mr. Mark Perkins, Sr., addressed the Council, stating that they have already dedicated land to the City and to have to give more is unreasonable, but would be in agreement to having the street paved. Mr. Da Vee explained that this is what the City is asking, if the applicant would be willing to help pay for that as a participant in an improvement district. Councilwoman Gardner suggested postponing this, until the applicant can given a complete understanding of off- site improvements. Mayor Hill requested that the City Manager work with the applicant, so that he understands the entire process. Councilman Damiano MOVED THAT ORDINANCE NO. 589, BE POSTPONED UNTIL SEPTEMBER 15, 1987. Councilman Bluntschly seconded the motion. VOTE: Unanimous The motion carried. Mayor Hill recessed the meeting. Mayor Hill reconvened the meeting 9:02 p.m. PROPOSED ORDINANCE NO. 591, PZ-5-87, WILSON ) ) Ms Reid briefed the Council on the request for rezoning of two combined parcels of 10 acres located at the north side of Southern Avenue between South Cortez Road and South Acacia Road, from CR-4/PD Multiple Family Residence Zone by Planned Development to TH/PD Trailer Homesite by Planned Development, with a General Plan designation of high density residential, and stated that the Planning and Zoning Commission recommends REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 12 denial of the application as a trailer park in that area would hurt adjoining property owners. Mr. Hershel Eugene Wilson, owner of the property in question, outlined the proposed development of a 72 unit mobile home park, and stated that the neighbors are not objecting to the park, after looking at the plans. Mayor Hill asked if anyone wished to speak in favor of or in opposition to the rezoning. Ms Margaret Campbell , 915 S. Palomino, Apache Junction, adjacent property owner, addressed the Council in objection to the application for rezoning. There being no one else wishing to address the Council , Mayor Hill closed the hearing to the public. ! Councilman Damiano MOVED THAT ORDINANCE NO. 591, BE READ BY TITLE ONLY AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilwoman Gardner seconded the motion. Councilman Damiano stated that the area is mostly mobile homes, and a trailer park would be appropriate. Councilman Bluntschly asked the applicant if he would be selling the lots and trailer. Mr. Wilson replied that he would not be selling the lot, just the mobile home, awnings, skirtings, landscaping, as a package. Councilwoman Gardner commented that the General Plan designation is conventional homes, and this is a concern. Councilman Damiano stated that the Mr. Wilson applied for this prior to the General Plan designation. Mr. Wilson stated that he was assured, by staff, that since the application was made prior to the General Plan being installed, the request would fall under the old guidelines. Councilwoman Perkins asked if selling the mobile homes and installing them is permitted? Mayor Hill replied that this is done all the time. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 13 VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 591, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AMENDING THE APACHE JUNCTION, ARIZONA, ZONING ORDINANCE BY AMENDING THE ZONING DISTRICT MAP, CITY OF APACHE JUNCTION, ARIZONA, CHANGING THE ZONING DISTRICT CLASSIFICATION IN REZONING CASE PZ-5-87 FROM CR-4/PD MULTIPE FAMILY RESIDENCE ZONE BY PLANNED DEVELOPMENT TO TH/PD TRAILER HOMESITE BY PLANNED DEVELOPMENT; REPEALING ANY CONFLICTING PROVISIONS; AND PROVIDING FOR SEVERABILITY. Councilman Damiano MOVED THAT ORDINANCE NO. 591, AS READ BY THE CITY CLERK BE APPROVED AND ADOPTED. Councilman Bluntschly seconded the motion. Vice Mayor Bakkedahl reminded the Council that for approval of this case there would have to be a three-quarter vote, due to protests submitted, and as there are only six members of the City Council present, the applicant may wish to postpone this until the next meeting. City Clerk Kathleen Connelly explained that the vote for approval would require three-quarters of those elected, not present, so it would be necessary to have six voting in approval . Councilman Damiano suggested postponing this application, and withdrew the motion. Councilman Damiano MOVED THAT PZ-5-87, ORDINANCE NO. 591, BE POSTPONED UNTIL THE REGULAR CITY COUNCIL MEETING OF SEPTEMBER 15, 1987. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. PROPOSED ORDINANCE NO. 592, PZ-10-87, HARAMBASIC ) Ms Reid explained that this application for rezoning is for a 4.86 acre parcel, located at the northeast corner of North Meridian and West Superstition Boulevard, from General Rural to REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 14 C-3 General Commercial District, and stated that this rezoning does comply with the General Plan, and that the Planning and Zoning Commission does recommend approval with stipulations. Mr. Keith Stachar, 6301 E. Roundup, Apache Junction, representing John and Sylvia Harambasic, stated that the applicant does not have a plan for development at this time, and agrees to submit any plan to the Planning Department and City Council for approval . Mayor Hill asked if there was anyone who wished to speak in favor of or in opposition to the application. There being no one wishing to address the Council , Mayor Hill closed the hearing to the public. Councilwoman Gardner MOVED THAT ORDINANCE NO. 592, BE READ BY TITLE ONLY AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. City Clerk Kathleen Connelly read as follows: ORDINANCE NO. 592, AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AMENDING THE APACHE JUNCTION, ARIZONA, ZONING ORDINANCE BY AMENDING THE ZONING DISTRICT MAP, CITY OF APACHE JUNCTION, ARIZONA, CHANGING THE ZONING DISTRICT CLASSIFICATION IN REZONING CASE PZ-10-87 FROM GR GENERAL RURAL TO C-3 GENERAL COMMERCIAL DISTRICT; REPEALING ANY CONFLICTING PROVISIONS; AND PROVIDING FOR SEVERABILITY. Councilman Damiano MOVED THAT ORDINANCE NO. 592, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED. Councilwoman Perkins seconded the motion. Councilwoman Gardner wished to add a stipulation that a site plan be submitted as part of the approval at the time of development. Mayor Hill explained that the stipulation is in the ordinance. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 15 Councilman Damiano asked for clarification on the parking concern. Mayor Hill clarified the stipulation for parking. Vice Mayor Bakkedahl commented that the City of Mesa has adopted a policy requiring a site plan and elevation submittal for any change of zoning requests, to avoid the typical speculative zoning, and to tie down zoning to a specific use site plan and design. VOTE: Unanimous The motion carried. OLD BUSINESS AUTHORIZATION TO CONTRACT FOR ECONOMIC AND FINANCIAL ANALYSIS OF SEWER SYSTEM ) City Manager Bill R. Da Vee explained that the study called for previously has been revised, to include sewer issues and providing for temporary disposal by running a line to the City of Mesa, and the study submitted has been prepared by Brown and Caldwell Consulting Engineers for Council consideration. Councilman Damiano MOVED THAT THE CONTRACT WITH BROWN AND CALDWELL CONSULTING ENGINEERS FOR A SEWER SYSTEM ECONOMIC AND FINANCIAL ANALYSIS IN THE AMOUNT OF $19,743.00, BE APPROVED. Councilwoman Perkins seconded the motion. VOTE: Unanimous The motion carried. PROPOSED SELECTION OF ALTERNATE DATE FOR PUBLIC FORUM; AND PROPOSED SELECTION OF ALTERNATE DATE FOR WORK SESSION WITH COMMUNITY FOUNDATION AND GERONTOLOGY RESEARCH FOUNDATION ) Ms Bonnie Robinson, 1337 W. Rawhide, Apache Junction, spoke as Acting President of the Gerontology Research Foundation, and read a letter requesting a postponement for the requisition of funds until the President, Dr. Marvin E. Seeman can represent the Foundation, REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 16 and that he will not be able to attend the work session on September loth, and that if the work session cannot be postponed, Attorney John Hay will represent the Foundation at that meeting. City Clerk Kathleen Connelly stated that it is necessary to select dates for the Public Forum and a Work Session with the Community Foundation and Gerontology Research Foundation, and suggested the Public Forum take place in lieu of the regularly scheduled Work Session on October 5th. Councilwoman Gardner MOVED THAT A PUBLIC FORUM BE HELD ON OCTOBER 5, 1987, AT 7:00 P.M., IN THE CHAMBER OF COMMERCE BUILDING; AND THAT A WORK SESSION WITH THE COMMUNITY FOUNDATION AND THE GERONTOLOGY RESEARCH FOUNDATION BE HELD ON SEPTEMBER 10, 1987, AT 7:00 P.M., IN THE CITY COUNCIL CHAMBERS. Councilman Bluntschly seconded the motion. VOTE: Unanimous The motion carried. w NEW BUSINESS i APPOINTMENTS AND RESIGNATION FROM BOARD AND COMMISSION: APPOINTMENT TO THE LIBRARY BOARD APPOINTMENTS TO THE PARKS AND RECREATION COMMISSION RESIGNATION AND APPOINTMENTS TO THE BOARD OF ADJUSTMENTS APPOINTMENTS TO THE PLANNING AND ZONING COMMISSION } Director of Library Pam Loui stated that there is one vacancy on the Library Board, and recommended Mr. James Lovett be appointed. Councilwoman Perkins MOVED THAT JAMES LOVETT BE APPOINTED TO THE LIBRARY BOARD, SAID TERM TO EXPIRE JUNE 30, 1988; AND THAT LOYD LYNCH BE APPOINTED TO THE PARKS AND RECREATION COMMISSION, SAID TERM TO EXPIRE JUNE 30, 1988; REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 17 AND THAT THE RESIGNATION OF SHARYN ALGER FROM THE BOARD OF ADJUSTMENT BE ACCEPTED WITH REGRET; AND THAT LILLIAN CASTRO, AND ELEANOR LYNCH, BE APPOINTED TO THE BOARD ADJUSTMENT, SAID TERMS TO EXPIRE JUNE 1989: AND THAT PAUL CONNOLLY, BOB JORGENSEN, AND H. CLINE VANHOY BE APPOINTED TO THE PLANNING AND ZONING COMMISSION, SAID TERM TO EXPIRE JUNE 30, 1990. Councilwoman Gardner seconded the motion. Councilman Bluntschly stated that he concurred with all of the nominations, except the reappointments to the Planning and Zoning Commission, as there need to be changes. VOTE: In Favor: Councilwoman Gardner, Councilwoman Perkins, Vice Mayor Bakkedahl , Mayor Hill Opposed: Councilman Bluntschly, Councilman Damiano The motion carried. COUNCIL LIAISON APPOINTMENTS ) Mayor Hill MOVED THAT COUNCIL LIAISON APPOINTMENTS BE POSTPONED UNTIL SEPTEMBER 15, 1987. Councilman Damiano seconded the j motion, i VOTE: U^animous f The motion carried. PROPOSED RESOLUTION NO. 87-49, ORDERING AND CALLING A SPECIAL BOND ELECTION FOR GENERAL OBLIGATION AND REVENUE BONDS TO BE HELD IN AND FOR THE CITY OF APACHE JUNCTION, ARIZONA (With Emergency Clause)) ) Mr. Da Vee explained that as the bond attorney is not available to answer questions posed, it is suggested that this be postponed until September 15, 1987. Vice Mayor Bakkedahl MOVED THAT RESOLUTION NO. 87-49, ORDERING AND CLALING A SPECIAL BOND ELECTION FOR GENERAL REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 18 OBLIGATION AND REVENUE BONDS TO BE HELD IN AND FOR THE CITY OF APACHE JUNCTION, ARIZONA, BE POSTPONED TO A MEETING ON OR BEFORE SEPTEMBER 15, 1987. Councilman Bluntschly seconded the motion. VOTE: Unanimous The motion carried. AUTHORIZATION OF EXPENDITURES FOR PARK DEVELOPMENT PROJECTS (City Hall Complex; Prospector Park Phase II) ) Mr. Da Vee recommended that the two consultants that designed the parks be retained to continue the construction inspections, staking, and analysis of bids. Councilwoman Perkins MOVED THAT AUTHORIZATION BE GIVEN TO CONTINUE TO UTILIZE THE PARK CONSULTANTS THROUGHOUT THE CONSTRUCTION OF THE PARK DEVELOPMENT PROJECTS, AND THAT THE EXPENDITURE OF FUNDS BE AUTHORIZED IN THE FOLLOWING AMOUNT: HENRY HAWS & ASSOCIATES NOT TO EXCEED $4,000.00 COE & VAN L00, INC. NOT TO EXCEED $4,913.00 Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. PROPOSED RODEO FACILITY ) Mr. Da Vee explained that this proposed agreement for the responsibilities of the rodeo facility has been reviewed by the Development Coordinating Committee, and Parks and Recreation Commission, and requested authorization to proceed to draft an agreement between the City and the Chamber of Commerce, with the purpose of outlining the scope of the project and who is to do what and within what time frame. Councilwoman Gardner MOVED THAT AUTHORIZATION BE GIVEN THE DIRECTOR OF COMMUNITY SERVICES, THROUGH THE CITY MANAGER, TO DRAFT A FORMAL AGREEMENT FOR RODEO FACILITIES, TO BE PRESENTED TO THE CHAMBER OF COMMERCE BOARD OF DIRECTORS AND CITY COUNCIL FOR FINAL CONSIDERATION. Vice Mayor Bakkedahl seconded the motion. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 19 VOTE: Unanimous The motion carried. COUNCIL CONSIDERATION OF CLAIM AGAINST CITY (JAMES) ) City Attorney David Alexander stated that a claim has been submitted against the City with regard to wrongful issuance of a protective order, and suggested either accepting or denying the claim as there is a 60 day deadline to respond. Vice Mayor Bakkedahl MOVED THAT THE CLAIM AGAINST THE CITY SUBMITTED BY MR. JERRY D. JAMES, BE REJECTED. Councilman Bluntschly seconded the motion. VOTE: In Favor: Councilwoman Perkins, Councilman Bluntschly, Councilwoman Gardner, Vice Mayor Bakkedahl , Mayor Hill Abstained: Councilman Damiano The motion carried. REQUESTS FOR EXTENSION TO CLEAN PROPERTY (CITY CODE, ARTICLE 9-2) ) City Clerk Kathleen Connelly explained that the City has received two requests from individuals wishing additional time to clean their property, both having received previous 30 day extensions. Vice Mayor Bakkedahl MOVED THAT MICHAEL J. NOLAN BE GRANTED AN EXTENSION TO EXPIRE 30 DAYS FROM RECEIPT OF NOTIFICATION; f AND THAT GEORGE A. AND ANNA LAMPANIN BE GRANTED AN EXTENSION TO EXPIRE 30 DAYS FROM RECEIPT OF NOTIFICATION. Councilwoman Gardner seconded the motion. Councilwoman Gardner commented that having visited one of the properties in question, there is not justification for a litter violation. Councilman Damiano stated that in Nolan's case, there is justification for a litter complaint. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 20 VOTE: In Favor: Councilwoman Gardner, Councilman Bluntschly, Councilwoman Perkins, Vice Mayor Bakkedahl, Councilman Damiano Opposed: Mayor Hill The motion carried. REQUEST FOR CITY CONTRIBUTION TO ARIZONA SUPERCONDUCTING SUPERCOLLIDER PROJECT ) ) Mr. Da Vee explained that this is a request from the State to support the effort to get the contract for the Arizona Superconducting Super Collider, which is a $4.4 billion dollar construction project, and would be an economic benefit to the State of Arizona, and that our share if we participate, would be $1,441.00. Mr. Da Vee also stated that many cities have placed the stipulation that should the money not be used, it be returned. Councilwoman Gardner MOVED THAT AUTHORIZATION BE GIVEN TO EXPEND $1,441.00 IN SUPPORT OF THE ARIZONA SUPERCONDUCTING SUPER COLLIDER, WITH THE STIPULATION THAT IF THE MONEY IS NOT COMPLETELY UTILIZED, IT WILL BE RETURNED. Councilman Damiano seconded the motion. VOTE: Unanimous The motion carried. OPPORTUNITY TO ADD A TRANSIT COMPONENT TO THE AUTHORIZED TRANSPORTATION STUDY ) Mr. Da Vee stated that the City has recently learned of the possibility of adding a transit component to the Transportation Study presently authorized through our grant from the Arizona Department of Transportation, which could be gained to develop our program for the elderly, handicapped, and ecnomically disadvantaged, and in order to respond it is necessary to commit a matching share of $2,000. Councilwoman Perkins MOVED THAT AUTHORIZATION BE GIVEN THE CITY MANAGER TO EXPEND $2,000 FROM THE CONTINGENCY FUND FOR THE PURPSOE OF MATCHING A GRANT FROM ARIZONA DEPARTMENT OF TRANSPORTATION, TO ADD A TRANSIT COMPONENT TO THE AUTHORIZED TRANSPORTATION STUDY. i Councilman Damiano seconded the motion. REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 21 VOTE: Unanimous The motion carried. FUTURE BRIDGE CONSTRUCTION ON BASELINE ROAD ) Mr. Da Vee explained that the Arizona Department of Transportation plans to, by dip-section, to go under the Superstition Freeway, but the State has indicated that they will apply the cost of the dip-section to the construction of a bridge. Mr. Da Vee further stated that it would be to the benefit of the City to have ADOT design this as part of the project, and that Pinal County has indicated that they are willing to split the balance of the cost for the bridge. Mr. Da Vee recommended a bridge project, and explained the alternatives in design. Councilman Damiano MOVED THAT AUTHORIZATION BE GIVEN THE DIRECTOR OF PUBLIC WORKS, THROUGH THE CITY MANAGER, TO COORDINATE WITH THE ARIZONA DEPARTMENT OF TRANSPORTATION AND PINAL COUNTY TO DEVELOP AN INTERGOVERNMENTAL AGREEMENT FOR CONSTRUCTION OF TWO-LANE BRIDGE WITH PROVISIONS FOR EXPANSION TO FOUR-LANES IN CONJUNCTION WITH THE CONSTRUCTION OF THE SUPERSTITION FREEWAY AT THE PLANNED DRAINAGE CHANNEL CROSSING ONE-HALF WEST OF TOMAHAWK ROAD ON BASELINE ROAD. Councilman Bluntschly seconded the motion. Mayor Hill stated that in the future four lanes will be necessary, and the City needs to plan for that by constructing a bridge with four at this time, especially as it is cheaper to do that now. Councilman Damiano commented that Pinal County should be contributing more than they are. Mr. Da Vee explained that the basic need is for a two-lane bridge, and if we go for the four-lane, the City will have to assume the cost. Vice Mayor Bakkedahl stated that ADOT should contribute more to the cost as they are creating the situation. Director of Public Works Rich Broman explained that as this is getting off the Freeway, ADOT feels that they cannot fund all of the improvements, such as a bridge. VOTE: Unanimous f REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 22 The motion carried. EXECUTIVE SESSION, WORK SESSION, SEPTEMBER 14, 1987 EXECUTIVE SESSION, WORK SESSION, SEPTEMBER 15, 1987 ) Councilman Damiano MOVED THAT AN EXECUTIVE SESSION BE HELD AT 6:00 P.M. , AND A WORK SESSION AT 7:00 P.M., ON SEPTEMBER 14, 1987, IN THE CITY COUNCIL CHAMBERS; AND THAT AN EXECUTIVE SESSION AND WORK SESSION BE HELD AT 6:00 P.M., ON SEPTEMBER 15, 1987, IN THE CITY COUNCIL CHAMBERS. Councilwoman Gardner seconded the motion. VOTE: Unanimous The motion carried. INFORMATION AND REQUESTS (COUNCIL LIAISON REPORTS) None. REQUESTS OF COUNCIL Vice Mayor Bakkedahl suggested a future meeting with the Apache Villa residents regarding Age Specific Zoning. City Manager Bill R. Da Vee stated that the Apache Villa Board members feel that the earliest they could meet would be in October. Councilman Damiano commented that Mr, and Mrs. George Little were back from vacation and in attendance at this meeting. i ADJOURNMENT ) Councilman Damiano MOVED THAT THE MEETING BE ADJOURNED AT 10:43 P.M. l f v *Consent Agenda Items are as follows: F *1. Acceptance of Regular Meeting Agenda I t REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 23 f *2. Acceptance of Minutes from Regular Meeting of June 2, 1987 *3. Acceptance of Minutes from Regular Meeting of August 4, 1987 ACCEPTED THIS FTH DAY OF nr "BP , 1987, BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS gTH DAY OF nETORFR 1987• /v"GL� NORMAN S. HILL Mayor ATTEST: KATHLEEN CONNELLY City Clerk REGULAR MEETING OF THE CITY COUNCIL SEPTEMBER 1, 1987 PAGE 24 ORDINANCE NO. 588 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING THE "CITY TAX CODE OF THE CITY OF APACHE JUNCTION, ARIZONA- BY REFERENCE AND FIXING THE EFFECTIVE DATE THEREOF; REPEALING ARTICLE 8-3 OF THE APACHE JUNCTION CITY CODE; PRESERVING RIGHTS AND DUTIES THAT HAVE ALREADY MATURED AND PROCEEDINGS THAT HAVE ALREADY BEGUN THEREUNDER; REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVER- ABILITY, PROVIDING PENALTIES FOR THE VIOLATION THEREOF; AND DECLARING AN EMERGENCY. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AS FOLLOWS: SECTION I IN GENERAL That certain document known as "The City Tax Code of the City of Apache Junction, Arizona," three copies of which are on file in the office of the City Clerk of the City of Apache Junction, Arizona, which document was made a public record by Resolution No. 87-46 of the City of Apache Junction, Arizona, is hereby referred to, adopted and made a part hereof as if fully set out in this ordinance, the provisions thereof to become effective on the 1st day of September, 1987. SECTION II REPEAL OF CONFLICTING SECTIONS OF CODE AND PRESERVATION OF RIGHTS, DUTIES AND PROCEEDINGS That Article 8-3 of the Apache Junction City Code and all ordinances and parts of ordinances in conflict with the provisions of this ordinance or any part of the Code adopted herein by reference are hereby repealed, effective as of the 1st day of September, 1987. That the repeal of Article 8-3 of the City Code, effective as of the 1st day of September, 1987, does not affect rights and duties matured or penalties that were incurred, and proceedings that were begun before the effective date of the repeal . SECTION III REPEALING CONFLICTING PROVISIONS All ordinances and parts of ordinances in conflict with the provisions of this ordinance or any part of the Code adopted herein by reference are hereby repealed. SECTION IV PROVIDING FOR SEVERABILITY If any section, subsection, sentence, clause, phrase or portion of this ordinance or any part ofthe code adopted herein by reference is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. ORDINANCE NO. 588 PAGE ONE OF TWO SECTION V PROVIDING PENALTIES FOR THE VIOLATION THEREOF Any person found guilty of violating any provision of this code shall be guilty of a class one misdemeanor. Each day that a violation continues shall be a separate offense. punishable as herein above described. SECTION VI DECLARING AN EMERGENCY WHEREAS, it is necessary for the preservation of the peace, health and safety of the City of Apache Junction, Arizona, an emergency is declared to exist, and this ordinance shall become immediately operative and in force from and after the date of posting hereof. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS 1ST DAY OF SEPTEMBER 1987. SIGNED AND ATTESTED TO THIS 1ST DAY- OF SEPTEMBER, 1987. NORMAN S. HILL Mayor ATTEST: RATHLEEN CONNELLY City Clerk PPROVED AS TO FORM: LEX I . Cit Attorney ORDINANCE NO. 588 PAGE TWO OF TWO Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION 11-116 INDEX ARTICLE I - GENERAL CONDITIONS AND DEFINITIONS I 1 Words of tense, number and gender; code references. 100 General definitions. I Assembler I Broker (Reg. 8A-100.1) I Business I Business day I Casual activity or sale I Combined taxes 2 Communications channel 2 Construction contracting 2 Construction contractor 2 Delivery (of notice) by the Tax-Collector 2 Delivery, installation, or other direct customer services (Reg. 8A-100.2) 2 Engaging 2 Equivalent excise tax 2 Federal government 2 Food 2 Hotel 3 Job printing 3 Lessee 3 Lessor 3 License (for use) 3 Lodging (lodging space) 3 Manufacturer 3 Manufacturing 3 Mining and metallurgical supplies 3 Modifier 4 Nonprofit entity 4 Occupancy (of real property) ,4 Out-of-City sale 4 Out-of-State sale 4 Owner-builder 4 Person 4 Primary health care facility 5 Prosthetic 5 Receipt (of notice) by the taxpayer 5 Rental equipment 5 Rental supply 5 Repairer "5 Resides within the City 6 Restaurant 6 Retail sale (sale at retail) 6 Retailer (Reg. 8A-100.3) Index to Apache Junction Tax Code r I cF PAGES SECTION DESCRIPTION ARTICLE I - GENERAL CONDITIONS AND DEFINITIONS (ctd) 100 (ctd) General definitions (ctd) 6 Sale 6 Speculative builder 6 Supplier 6 Tax Collector 6 Taxpayer 6 Telecommunication service 6 Utility service 110 Definitions: income-producing capital equipment. (Reg. 8A-110.1) 7-8 (a) includes, subject to (d): (1) manufacturing equipment and job-printing equipment (Reg. 8A-110.2) (2) telecommunications equipment {3} electrical generation and transmission (4) pipes 4" I.D. (5) airplanes, etc. (6) railroad rolling stock (7) oil/gas drilling equipment (8) urban mass transit {9} telecommunication equipment "rented" to customers Ic (10) mining and metallurgical equipment (11) (Reserved) 8 (b) ancillary equipment to remove waste products, except (d). 8 (c) repair and replacement parts for (a) or (b). 8 (d) definition does not include: (1) unit cost less than $250 or capitalized (2) janitorial equipment and supplies {3} hand tools (4) office equipment, furniture, supplies (5) sales/distribution (6) research (7) motor'vehicles licensed for road use (8) real property 115 Definitions: computer software; custom computer programming (Reg 8A-115.1) 8 (a) computer software 9 (b) custom computer programming 9 120 (Reserved) 42- Index to Apache Junction Tax Code PAGES SECTION DE5CRIPTION ARTICLE 11 - DETERMINATION OF GROSS INCOME 200 Determination of gross income: in general. 10 (a) Includes: (1) value from sales of property or service (2) total sale or lease price (3) receipts, cash, barter, exchange, reduction of debt, etc. (4) including deposits and deferred payments (Reg. 8A-200.1) 10 (b) Barter, exchange, trade-outs, etc. 10 (c) No deduction for cost, losses, etc. 10 210 Determination of gross income: transactions between affiliated companies or persons. 10 220 Determination of gross income: artificially contrived transactions. 230 Determination of gross income based upon method of reporting. 11 (a) Cash basis 11 (b) Accrual basis 240 Exclusion of cash discounts, returns, refunds, trade-in values, vendor-issued coupons, and rebates from gross income. 11-12 (a) (1) cash discounts (2) returns (3) trade-ins (4) vendor-issued coupons (5) rebates 12 (b) subsequent period reduction may still be excluded if reported as taxable in prior period. 250 Exclusion of combined tax from gross income; itemization; notice; limitations. 12 (a) when tax separately collected/charged (1) remittance of all tax collected/charged (Reg. 8A-250.1). (2) itemization 12 (b) when tax has not been separately charged/collected. 260 Exclusion of motor vehicle fees and taxes from gross income; limitations. 13 (a) registration fees, license fees and taxes. 13 (b) F.E.T. on heavy trucks and trailers. -13- j Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE II - DETERMINATION OF GROSS INCOME (ctd) 270 Exclusion of gross income of persons deemed not engaged in business. 13 (a) Definitions (1) Federally exempt organization (2) Governmental entity (3) Non-licensed business (4) Proprietary club (5) Public educational entity 14 (b) Governmental entities, non-licensed businesses, and public educational entities do not have taxable gross income except "proprietary activities" of municipalities (Reg. 8A-270.1) 14 (c) Federally exempt organizations and proprietary clubs do not have taxable gross income except: (1) proprietary clubs 15% rule on revenue (Reg. 8A-270.2) (2) unrelated business income (3) (Reserved) 14 (d) Sales or leases to (a) taxable unless licensed and paying a tax / on resales/leases income. 14 (e) Franchisees and concessionaires of such do not share their exemption. 14 (f) (Reserved) 15 280 (Reserved) 15 285 (Reserved) 15 290 (Reserved) ARTICLE III - LICENSING AND RECORDKEEPING 300 Licensing requirements. 16 (a) Who must apply (Reg. 8A-300.1) (1) all subject to Privilege Tax (2) (Reserved) (3) Rental occupancy tax 16 (b) Multiple activities at one location 16 (c) Limitation 305 Special licensing requirements. 16 , (a) Partnerships 16 (b) Corporations 16 (c) Multiple locations i 16 (d) (Reserved) -14- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE III - LICENSING AND RECORDKEEPING (ctd) 310 Licensing: duration of license; transferability; display. 17 (a) Valid until surrendered/cancelled/revoked. 17 (b) Non-transferable between owners or locations, and must be publicly displayed at business location. 17 (c) Replacement of license treated as new license for purposes of application and fee. 17 (d) (Reserved) 320 Licensingi cancellation; revocation. 17 (a) Cancellation if inactive. 17 (b) Revoked for failure to comply. 17 (c) Notice and Hearing 17 (d) Reinstatement 18 330 Operating without a license. r 350 Recordkeeping requirements. (Reg. 8A-350.1, Reg. 8A-350.2, Reg. SA-350.3) 18 (a) Must maintain books and records for limitation period and make available to Tax Collector during any business day. 18 (b) Tax Collector can specify books and records kept after audit reveals inadequate recordkeeping. 360 Recordkeeping: claim of exclusion, exemption, deduction, or credit; documentation; liability. (Reg. 8A-360.1, Reg. 8A-360.2) 18 (a) Claim of exemption must be documented. 18 (b) Vendee's claim of exemption shifts tax liability to vendee. 370 Inadequate or unsuitable records. 19 If records inadequate, taxpayer must either: (1) provide other suitable records, or (2) correct/reconstruct records. ARTICLE IV - PRIVILEGE TAXES 400 Imposition of Privilege Taxes; presumption. 20 (a) Taxes imposed: (1) privilege taxes on gross incomes specified below (2) privilege taxes on rental occupancy 20 (b) Taxes imposed by this Chapter in addition to others. 20 (c) Presumption. 20 (d) Limitation of exemptions, deductions, and credits. J 405 Advertising. (Reg. 8A-405.1, Reg. 8A-405.2) 20-21 (a) Measure of tax; rate; definition of "local advertising". 21 (b) (Reserved) -I5- 1 Index to Apache Junction Tax Code a PAGES SECTION DESCRIPTION ARTICLE IV - PRIVILEGE TAXES (ctd) 410 Amusements, exhibitions, and similar activities. 21 (a) Measure of tax; rate. (I) Charges for admission or amusement. (2) health spas, fitness centers and related activities 21 (b) (Reserved) 415 Construction contracting: prime contractors. (Reg. 8A-415.1, Reg. 8A-415.2) 21 (a) Measure of tax; rate. (1) Exclusion of groundwater measuring devices. (2) (Reserved) 21 (b) Deductions. (1) Subcontracting (2) 35% 22 (c) Subcontractors. (1) Working for another contractor. (2) Working for an owner building for sale. 416 Construction contracting: speculative builders. (Reg. 8A-416.1, Reg. 8A=416.2) 22 (a) Measure of tax; rate. (1) sales price at close of escrow (2) improved real property (3) sale 22 (b) Exclusions (1) prior value for reconstruction (2) land not deductible (3) (Reserved) 22 (c) Deductions & credits per Section 8A-418. 417 Construction contracting: owner-builders who are not speculative builders. 23 (a) Measure of tax; rate. (1) payments to subcontractors (2) purchases of building materials 23 (b) Deductions & credits per Section 8A-418. 23 (c) Reporting; statute of limitations. 23 (d) (Reserved) 418 Construction contracting: deductions and tax credits available to speculative builders and owner-builders. 23 (a) 35% deduction / 23 (b) Tax credits (1) City taxes paid on materials purchases (2) City taxes paid on construction contracting (3) Tax credits must relate to income reported. -16- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE IV - PRIVILEGE TAXES (ctd) 24 420 Feed at wholesale (a) Measure of tax; rate. (b) Deductions (1) out-of-City sales (2) out-of-State sales 425 Job printing. (Reg. 8A-425.1) 24 (a) Measure of tax; rate. 24 (b) Deductions (1) job printing for resale (2) out-of-City sales (3) out-of-State sales (4) (Reserved) 24 430 Mining, timbering, and other extraction. (a) Measure of tax; rate. (1) mining and metallurgy, but not sand and gravel (2) timbering (3) oil and gas extraction/refining 24 (b) Tax based on location of activity, not location of sale. 24 (c) If shipped out-of-state unsold, tax based on value at time of shipment. 435 Publishing and periodicals distribution. (Reg. 8A-435.1) 25 (a) Measure of tax; rate. (1) publishing in the City (2) distribution of periodicals not published in the City 25 W Location of publication 25 (c) Subscription income 25 W Circulation - 25 (e) Allocation of taxes between cities and towns. (1) allocation by circulation in taxing municipalities (2) allocation of balance between locations of publication 25 440 Rental occupancy tax 445 Rental, leasing, and licensing for use of real property. (Reg. 8A-445.1, Reg. 8A-445.2, Reg. 8A-445.3) 26 (a) Measure of tax, rate. (1) reimbursements for property tax, repairs, improvements (2) charges for services (3) special case telecommunication services t 26 (b) Exemption for utility reimbursement based upon separate meter 26 (c) Exemption for primary health care facilities income. 26 (d) Exemption for joint pole use charges. 26 (e) (Reserved) -17- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE IV - PRIVILEGE TAXES (ctd) 445 Rental, leasing, and licensing for use of real property. (ctd) 26 (f) (Reserved) 26 (g) (Reserved) 26 (h) (Reserved) 26 G) (Reserved) 26 447 (Reserved) 450 Rental, leasing or licensing for use of tangible personal property. (Reg. 8A-450.1, Reg. 8A-450.2, Reg. 8A-450.3) 26 (a) Measure of tax; rate. 26 (b) Special provisions relating to long-term motor vehicle leases 26 (c) Exemptions (1) rent for re-rent (2) semi-permanently or permanently installed in another taxing city (Reg. 8A-450.4) (3) motion picture films, etc. to amusement, etc. businesses (4) (A) prosthetics (B) income-producing capital equipment (C) mining and metallurgical supplies. (5) to a non-profit primary health care facility (6) delivery, installation, repair, maintenance charges (7) joint pole use charges (8) (Reserved) (9) (Reserved) 455 Restaurants and bars. 27 , (a) Measure of tax; rate. (Reg. 8A-455.1) 27 (b) Delivery, set-up, and clean-up charges of off-premises restaurants 460 Retail sates: measure of tax; burden of proof; exclusions. 28 (a) Measure of tax; rate (Reg, 8A-460.2,'Reg. 8A-460.3, Reg. 8A-460.6) 28 (b) Burden of proof 28 (c) Exclusions (1) stocks, bonds, etc. (2) lottery tickets (3) bullion and monetized bullion (Reg. 8A-460.5) (4) taxable elsewhere in this Chapter (Reg. 8A-460.1) (5) professional services (Reg. 8A-460.4) 28 (d) (Reserved) i 28 (e) Seller's business location takes precedence between cities 28 (f) Tax liability based upon seller's location -IB- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE IV - PRIVILEGE TAXES (ctd) 465 Retail sales: exemptions. 28 (a) sales for resale (Reg. 8A-465.3) 28 (b) out-of-City sales and out-of-State sales 28 (c) delivery, installation, or other direct customer services 28 (d) repair labor (Reg. 8A-465.1) 29 (e) (Reserved) 29 W prosthetics 29 (g) income-producing capital equipment 29 (h) rental equipment and rental supplies 29 (i) mining and metallurgical supplies 29 (j) fuels subject to Arizona fuel use tax 29 W sales to a licensed construction contractor 29 (1) (Reserved) 29 (m) component or ingredient parts sold to job printers, manufacturers, or publishers 29 (n) sales to the Federal government: (1) 100% by assembler, manufacturer, modifier, repairer 'r (2) - 50% otherwise 29 (o) food to restaurants 29 (p) sales to non-profit primary health care facilities 29 (q) (Reserved) 30 (r) (Reserved) (1) (Reserved) (2) (Reserved) (3) (Reserved) (4) (Reserved) 30 (s) groundwater measuring devices 30 (t) (Reserved) 30 '(u) (Reserved) 30 (v) (Reserved) 30 (w) (Reserved) ' -30 W (Reserved) 30 (y) (Reserved) 30 (z) (Reserved) 470 Telecommunication services. (Reg. 8A-470.1) 30 (a) Measure of tax; rate (1) telecommunication services definition (2) gross income definition 31 W Resale telecommunication services 31 (c) Interstate transmissions 31 (d) Tax credit for franchise and license fees paid 31 (e) Cable TV income } -I9- l Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE IV - PRIVILEGE TAXES (ctd) 475 Transporting for hire. (Reg. 8A-475.1) 31 (a) Railroads 31 (b) Pipelines 31 (c) Aircraft (freight only) 31 (d) Motor vehicles, except: (1) income subject to the State Ton-Mile Tax (2) governmentally adopted urban mass transit (3) (Reserved) (4) • (Reserved) 480 Utility services. 31 (a) Measure of tax; rate. (1) services to in-City residents (2) (Reserved) 32 W Sales.of natural gas for generation of electricity deemed retail sales 32 (c) Resale utility services } 32 (d) Tax credit for franchise fees paid ARTICLE V - ADMINISTRATION 500 Administration of this Chapter; rule making. 33 (a) Administration vested in the Tax Collector 33 (b) Tax Collector shall prescribe forms and procedures 33 (c) City Council approves Regulations 510 Divulging of information prohibited; exceptions. 33 (a) Divulging information prohibited except as provided here 33 "(b) City Council authorized examination by another U.S. jurisdiction 33 W Tax Collector can provide information to another Arizona privilege tax administration 33 W Successors, receivers, trustees, etc. 33 (e) City Attorney authorized to collection agencies 33 W Other Arizona City when tax paid to wrong city 34 (g) Others involved in allocation of publishing tax 34 (h) By agreement approved by City Council with another jurisdiction. -I 10- Index to Apache Junction Tax Code 1 PAGES SECTION DESCRIPTION ARTICLE V - ADMINISTRATION (ctd) 520 Reporting and payment of tax. 34 (a) Returns (Reg. SA-520.1) 34 (b) Payment 34 (c) Requirement of security 34 (d) Method of reporting: "cash basis" or "accrual basis" (Reg. $A-520.2) (1) all income to be reported by same method (2) special considerations for construction contractors: (A) prime contractors (B) speculative builders (C) other owner-builders 530 When tax due; when delinquent; verification of return; extensions. 34 (a) Report on same date as state sales tax. 35 (b) (Reserved) 35 (c) (Reserved) 35 (d) (Reserved) 35 (e) Extensions 540 Interest and civil penalties. 35 (a) (Reserved) 35 (b) (Reserved) 35 (c) (Reserved) 35 (d) (Reserved) 35 (e) (Reserved) 35 (f) (Reserved) 545 Deficiencies; when inaccurate return is filed; when no return is filed; estimates. 35 (a) Tax Collector may recompute or estimate (1) (Reserved) (2) (Reserved) 35 (b) Estimates; presumption 550 Limitation periods. 35 (a) Deficiency assessments 36 (b) (Reserved) 36 (c) No limitation if no return filed, fraud, operating without license 36 (d) Special provisions relating to owner-builders i -I11- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION ARTICLE V - ADMINISTRATION (ctd) 555 Tax Collector may examine books and other records; failure to provide records. 36 (a) Tax Collector can examine books and records 36 (b) (Reserved) 36 (c) (Reserved) 36 (d) Tax Collector may use any generally accepted auditing standards or procedures 36 (e) Failure to keep or provide adequate records allows Tax Collector can estimate 36 (f) (Reserved) 560 Erroneous payment of tax; credits and refunds; limitations. 36 (a) Tax Collector may authorize credits and refunds. Credits cancelled within 1 year after issuance 36 (b) (Reserved) 36 (c) (Reserved) 36 (d) (Reserved) 36 (e) (Reserved) 36 (f) Allowance/denial of credit is subject to appeal per Section SA-570. 37 (g) Refunds made from Privilege Tax revenue accounts 565 Payment of tax to the incorrect Arizona city or town. 37 (a) Tax paid to wrong city will be refunded/assessed to correct city for the period 48 months from date of request. Only penalty or interest actually paid to other city relating to tax requested 37 (b) A.R.S. Section 42-1452 will govern. 37 (c) "Other city" means State Department of Revenue if city in State Collection Program. 567 Allocation of tax on retail sales when more than one city or town has nexus. .37 (a) Conditions for allocation -- tax to be shared equally 37 W Mobile equipment 37-38 (c) Shared equally 38 (d) Allocation follows rules of SA-565 -I12- Index to Apache Junction Tax Code i PAGES SECTION DESCRIPTION ARTICLE V - ADMINISTRATION (ctd) 570 Administrative review; petition for hearing or for redetermination; hearing or redetermination; finality of order. 38 (a) Informal conference with auditor prior to assessment 38 W Payment of tax under protest 38 (c) Administrative review (1) filing a petition {2} (Reserved) (3) (Reserved) (4) (Reserved) (5) hearings (6) - (Reserved) (7) (Reserved) 38 (d) (Reserved) 38 (e) (Reserved) 571 Jeopardy assessments. (Reg. 8A-571.1) 38 (a) If jeopardy assessment, Tax Collector will notify taxpayer at time of assessment, and demand immediate payment 38 (b) Taxpayer must file request for administrative review together +r with posting bond or collateral within 10 days 1 38 (c) (Reserved) 38 (d) (Reserved) 38 (e) (Reserved) 575 Judicial review. 39 (a) Taxpayer's appeal 39 (b) (Reserved) 39 (c) (Reserved) 39 (d) (Reserved) 39 (e) No estoppel 39 . (f) Counterclaims 39 577 (Reserved) 580 Criminal penalties 39 (a) It is unlawful to knowingly or willfully: (I) fail/refuse to file a return (2) fail/refuse to pay tax when due (3) make false/fraudulent return (4) make false/fraudulent statement to claim tax exemption (5) fail/refuse to permit lawful examination of books or records (6) fail/refuse to remit taxes collected from customer (7) advertise that tax is not a consideration of price (8) fail/refuse to obtain a Privilege License (9) falsify/forge document to obtain an exemption 39 (b) Such acts constitute a Class One Misdemeanor 40 (c) In addition, knowingly swearing to a false statement subject to laws of perjury -I13- Index to Apache Junction Tax Code •r PAGES SECTION DESCRIPTION ARTICLE V - ADMINISTRATION (ctd) 590 Civil actions. 40 (a) Liens (1) City can file a lien for tax, penalty or interest due (2) Lien recording and filing (3) Filing a lien does not preclude any other collection methods (4) Liens can be released in whole or in part upon payment 40 (b) Actions to recover tax 595 Collection of taxes when there is succession in and/or cessation of business. 40 (a) This is in addition to any other provisions in the City Code 41 (b) Taxes due are lien on property 41 (c) Foreclosure or similar transfer of improved real property 41 (d) Back taxes due are liability of: (1) seller if received Certificate at time of sale (2) buyer otherwise ARTICLE VI - (Reserved) ! 42 600 (Reserved) 42 610 (Reserved) 42 620 (Reserved) 42 630 (Reserved) 42 640 (Reserved) 42 650 (Reserved) 42 660 (Reserved) REGULATIONS R 1 100.1 Brokers. RI-R2 100.2 Delivery, installation, or other direct customer services. R3 100.3 Retailers. R3 110.1 Income-producing capital equipment: in general. R3-R5 110.2 Income-producing capital equipment: manufacturing equipment; job i printing equipment. R5-R8 115.1 Computer hardware, software, and data services. -I14- Index to Apache Junction Tax Code r PAGES SECTION DESCRIPTION REGULATIONS (ctd) R8 120.1 (Reserved) R8 200.1 When refundable deposits are included in gross income. R8 250.1 Excess tax collected. R8 270.1 Proprietary activities of municipalities are not deemed activities of a governmental entity. R9 270.2 Proprietary clubs. R9-R10 300.1 Who must apply for a license. R 10-R 11 350.1 Recordkeeping: income. R11-R12 350.2 Recordkeeping: expenditures. R 12 350.3 Recordkeeping: out-of-City and out-of-State sales. R 12 360.1 Proof of exemption: sale for resale; sale, rental, lease, or license of rental equipment. R13-R14 360.2 Proof of exemption: exemption certificate. R 15 405.1 Local advertising examples. R15 405.2 Advertising activity within the City. R15-R16 415.1 Distinction between the categories of construction contracting. R16-R17 415.2Distinction between construction contracting and certain related activities. R 17-R 18 416.1 Speculative builders: homeowner's bona fide non-business sale of a family residence. R 18-R 19 416.2 Reconstruction contracting. R 19 425.1 Distinction between job printing and certain related activities. R 19 435.1 Distinction between publication of periodicals and certain related activities. R20 445.1 (Reserved) R20 445.2 Rental, leasing, and licensing of real property as lodging: refundable and non-refundable deposits. -I15- Index to Apache Junction Tax Code PAGES SECTION DESCRIPTION REGULATIONS (ctd) R20 445.3 Rental, leasing, and licensing of real property as lodging: room and board; furnished lodging. R20 447.1 (Reserved) R20-R21 450.1 Distinction between rental, leasing, and licensing for use of tangible personal property and certain related activities. R21 450.2 Rental, leasing, and licensing for use of tangible personal property: membership fees; other charges. R21 450.3 Rental, leasing, and licensing for use of equipment with operator. R21-R22 450.4 Rental, leasing, and licensing for use of tangible personal property: semi-permanently or permanently installed tangible personal property. R22 455.1 Gratuities related to restaurant activity. R22-R23 460.1 Distinction between retail sales and certain other transfers of tangible personal property. = R23 460.2 Retail sales: trading stamp company transactions. R24 460.3 Retail sales: membership fees of retailers. R24-R25 460.4 Retail sales: professional services. R25 460.5 Retail sales: monitized bullion; numismatic value of coins. R25 460.6 Retail sales consignment sales. 1126, 465.1 Retail sales: repair services. R26 465.2 (Reserved) R26-R27 465.3 Retail sales: sale of containers, paper products, and labels. R27 465.4 (Reserved) R27 470.1 Telecommunication services. R27 475.1 Distinction between transporting for hire and certain related activities. R28 520.1 (Reserved) R28 520.2 Change of method of reporting. R28 555.1 (Reserved) R28 571.1 Collection of tax in jeopardy. -I16- r CHAPTER SA - PRIVILEGE AND EXCISE TAXES Article I - General Conditions and Definitions Sec. SA-l. Words of tense, number and gender; code references. (a) For the purposes of this Chapter, all words of tense, number, and gender shall comply with A.R.S. Section 1-214 as amended. (b) For the purposes of this Chapter, all code references, unless specified otherwise, shall: (1) refer to this City Code. (2) be deemed to include all amendments to such code references. Sec. SA-100. General definitions. For the purposes of this Chapter, the following definitions apply: "Assembler" means a person who unites or combines products, wares, or articles of manufacture so as to produce a change in form or substance of such items without changing or altering component parts. ",Broker" means any person engaged or continuing in business who acts for another for a consideration in the conduct of a business activity taxable under this Chapter, and who receives for his principal all or part of the gross income from the taxable activity. I "Business" means all activities or acts, personal or corporate, engaged in and caused to be engaged in with the, object of gain, benefit, or advantage, either direct or indirect, but not casual activities or sales. "Business Day" means any day of the week when the Tax Collector's office is open for the public to conduct the Tax Collector's business. "Casual Activity or Sale" means a transaction of an isolated nature made by a person who neither represents himself to be nor is engaged in a business subject to' a tax imposed by this Chapter. However, no sale, rental, license for use, or lease transaction concerning real property nor any activity entered into by a business taxable by this Chapter shall be treated, or be exempt, as casual. This definition shall include sales of used capital assets, provided that the volume and frequency of such sales do not indicate that the seller regularly engages in selling such property. "Combined Taxes" means the sum of all applicable Arizona Transaction Privilege and Use Taxes; all applicable transportation taxes imposed upon gross income by this County as authorized by Chapter 8.3, Title 42, Arizona Revised Statutes; and all applicable taxes imposed by this Chapter. i -1- "Communications Channel" means any line, wire, cable, microwave, radio signal, light beam, telephone, telegraph, or any other electromagnetic means of moving a P message. j "Construction Contracting" refers to the activity of a construction contractor. "Construction Contractor" means a person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish any building, highway, road, railroad, excavation, or other structure, project, development, or improvement to real property, or to do any part thereof. "Construction contractor" includes subcontractors, specialty contractors, prime contractors, and any person receiving consideration for the general supervision and/or coordination of such a construction project. This definition shall govern without regard to whether or not the construction contractor is acting in fulfillment of a contract. "Delivery (of Notice) by the Tax Collector" means "receipt (of notice) by the taxpayer". "Delivery. Installation, or Other Direct Customer Services" means services or labor, excluding repair labor, provided by a taxpayer to or for his customer at the time of transfer of tangible personal property; provided further that the charge for such labor or service is separately billed to the customer and maintained separately in the taxpayer's books and records. "Engaging", when used with reference to engaging or continuing in business, r" includes the exercise of corporate or franchise powers. "Equivalent Excise Tax" means either: F (1) a Privilege or Use Tax levied by another Arizona municipality upon the transaction in question, and paid either to such Arizona municipality directly or to the vendor; or (2) an excise tax levied by a political subdivision of a state other than Arizona upon the transaction in question, and paid either to such jurisdiction directly or to the vendor. "Federal Government" means the United States Government, its departments and* agencies; but not including national banks or federally chartered or insured banks, savings and loan institutions, or credit unions. "Food" means any items intended for human consumption as defined by rules and regulations adopted by the Department of Revenue, State of Arizona, pursuant to A.R.S. Section 42-1387. Under no circumstances shall "food" include alcoholic beverages or tobacco, or food items purchased for use in conversion to any form of alcohol by distillation, fermentation, brewing, or other process. "Hotel" means any public or private hotel, inn, hostelry, tourist home, house, motel, rooming house, apartment house, trailer, or other lodging place within the City offering lodging, wherein the owner thereof, for compensation, furnishes lodging to any transient, except foster homes, rest homes, sheltered care homes, nursing homes, or primary health care facilities. -2- "Job Printing" means the activity of copying or reproducing an article by any r means, process, or method. "Job printing" includes engraving of printing plates, embossing, copying, micrographics, and photo reproduction. "Lessee" includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter. "Lessor" includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter. "Licensing (for Use)" means any agreement between the user ("licensee") and the owner or the owner's agent ("licensor") for the use of the licensor's property whereby the licensor receives consideration, where such agreement does not qualify as a "sale" or "lease" or "rental" agreement. "Lodging (Lodging Space)" means any room or apartment in a hotel or any other provider of rooms, trailer spaces, or other residential dwelling spaces; or the furnishings or services and accommodations accompanying the use and possession of said dwelling space, including storage or parking space for the property of said tenant. "Manufacturer" means a person engaged or continuing in the business of fabricating,producing, or manufacturing products, wares, or articles for use from other forms of tangible personal property, imparting to such new forms, qualities, properties, and combinations. "Manufacturing (1) For the purposes of this Chapter, an activity shall be considered "manufacturing" only if such activity is not defined as something else in this Chapter and if it involves the physical combining (but not merely mixing), separating (but not merely sorting or sifting), or otherwise physically changing of tangible personal property ("raw materials") into another form of tangible personal property available for sale ("finished goods"). (2) The activity of manufacturing shall be deemed to begin when the first act of physically combining (but not merely mixing), separating (but not merely sorting or sifting), or otherwise physically changing tangible personal property ("raw materials") occurs; the activity will be deemed to end when the last act of physically combining, separating, or otherwise physically changing the tangible personal property ends. r "Mining and Metallurgical Supplies" means all tangible personal property acquired by persons engaged in activities defined in subsection SA-430(a)(1) for such use. This definition shall not include: (1) janitorial equipment and supplies. (2) office equipment, office furniture, and office supplies. (3) motor vehicles licensed for use upon the highways of the State. "Modifier" means a person who reworks, changes, or adds to products, wares, or articles of manufacture. -3- "Nonprofit Entity" means any entity organized and operated exclusively for charitable purposes, or operated by the Federal Government, the State, or any political subdivision of the State. "Occupancy (of Real Property)" means any occupancy or use, or any right to occupy or use, real property including any improvements, rights, or interests in such property. "Out-of-City Sale" means the sale of tangible personal property and job printing if all of the following occur: (1) transference of title and possession occur without the City; and (2) the stock from which such personal property was taken was not within the corporate limits of the City; and (3) the order is received at a permanent business location of the seller located outside the City; which location is used for the substantial and regular conduct of such business sales activity. In no event shall the place of business of the buyer be determinative of the situs of the receipt of the order. For the purpose of this definition it does not matter that all other indicia of business occur within the City, including, but not limited to, accounting, invoicing, payments, centralized purchasing, and supply to out-of-City storehouses and out- of-City retail branch outlets from a primary storehouse within the City. "Out-of-State Sale" means the sale of tangible personal property and job printing if all of the following occur: (1) The order is placed from without the State of Arizona; and (2) the order is placed by other than a resident of the State to be determined in a manner similar to "resides within the City"; and (3) the property is delivered to the buyer at a location outside the State; and (4) the property is purchased for use outside the State. "Owner-Builder" means an owner or lessor of real property who, by himself or by or through others, constructs or has constructed or reconstructs or has reconstructed any improvement to real property. "Person" means an individual, firm, partnership, joint venture, association,. corporation, estate, trust, receiver, syndicate, broker, the Federal Government, this State, or any political subdivision or agency of this State. For the purposes of this Chapter, a person shall be considered a distinct and separate person from any general or limited partnership or joint venture or other association with which such person is affiliated. A subsidiary corporation shall be considered a separate person from its parent Corporation for purposes of taxation of transactions with its parent corporation. "Primary Health Care Facility" means any hospital or any licensed nursing care institution or licensed residential care institution, licensed pursuant to Chapter 4, Title 36, Arizona Revised Statutes, or any licensed kidney dialysis center. i -4- "Prosthetic" means any of the following tangible personal property if such items are prescribed or recommended by a licensed podiatrist, chiropractor, dentist, physician or surgeon, naturopath, optometrist, osteopathic physician or surgeon, psychologist, or veterinarian: (1) any man-made device for support or replacement of a part of the body, or to increase acuity of one of the senses. Such items include: prescription eyeglasses; contact lenses; hearing aids; artificial limbs or teeth; neck, back, arm, leg, or similar braces. (2) insulin and insulin syringes, sold with or without a prescription. (3) hospital beds, crutches, wheelchairs, similar home health aids, or corrective shoes. (4) drugs or medicine, including oxygen. (5) equipment used to generate, monitor, or provide health support systems, such as respiratory equipment, oxygen concentrator, dialysis machine. "Receipt (of Notice) by the Taxpayer" means the earlier of actual receipt or the first attempted delivery by certified United States mail to the taxpayer's address of record with the Tax Collector. "Rental Equipment" means tangible personal property sold, rented, leased, or licensed to customers to the extent that the item is actually used by the customer for rental, lease, or license to others; provided that: (1) such rental, lease, or license by the vendee to another is subject to the tax imposed by this Chapter or an equivalent excise tax; and (2) the vendee is regularly engaged in the business of rents g leasing, or licensing such property for a consideration, and is properly licensed therefor; and 1 (3) the item so claimed as "rental equipment" is not used by the person claiming the exemption for any purpose other than rental, lease, or license for compensation, to an extent greater than fifteen percent (15%) of its actual use. "Rental Supply" means an expendable or nonexpendable repair or replacement part sold to become part of "rental equipment", provided that: (1) the documentation relating to each purchased item so claimed specifically itemizes to the vendor the actual item of "rental. equipment" to which the purchased item is intended to be attached as a repair or replacement part; and (2) the vendee is regularly engaged in the business of renting; leasing, or licensing such property for a consideration, and is properly licensed therefor; and (3) the item so claimed as "rental equipment" is not used by the person claiming the exemption for any purpose other than rental, lease, or license for compensation, to an extent greater than fifteen percent (15%) of its actual use. "Repairer" means a person who restores or renews products, wares, or articles of manufacture. "Resides within the City" means in cases other than individuals, whose legal addresses are determinative of residence, the engaging, continuing, or conducting of regular business activity within the City. -5- r "Restaurant" means any business activity where articles of food, drink, or r condiment are customarily prepared or served to patrons for consumption on or off the premises, also including bars, cocktail lounges, the dining rooms of hotels, and all caterers. For the purposes of this Chapter, a "fast food" business, which includes street vendors and mobile vendors selling in public areas or at entertainment or sports or similar events, who prepares or sells food or drink for consumption on or off the premises is considered a "restaurant", and not a "retailer". "Retail Sale (Sale at Retail)" means the sale of tangible personal property, except the sale of tangible person property to a person regularly engaged in the business of selling such property. "Retailer" means any person engaged or continuing in the business of sales of tangible personal property at retail. "Sale" means any transfer of title or possession, or both, exchange, barter, conditional or otherwise, in any manner or by any means whatsoever, including consignment transactions and auctions, of property for a consideration. "Sale" includes any transaction whereby the possession of such property is transferred but the seller retains the title as security for the payment of the price. "Sale" also includes the fabrication of tangible personal property for consumers who, in whole or in part, furnish either directly or indirectly the materials used in such fabrication work. "Speculative Builder" means an owner-builder who sells or contracts to sell improved real property on or before the expiration of twenty-four (24) months after the improvements of the real property sold are substantially complete and the construction or reconstruction has passed final inspection and the permit holder has been issued a Certificate of Occupancy by the City; provided, however, that in cases where no permit for construction or Certificate of Occupancy was issued by the City, "substantially complete" shall mean "ready for immediate occupancy." "Supplier" means any person who rents, leases, licenses, or makes sales of tangible personal property within the City, either directly to the consumer or customer or to wholesalers, jobbers, fabricators, manufacturers, modifiers, assemblers, repairers, or those engaged in the business of providing services which involve the use, sale, rental, lease, or license of tangible personal property. "Tax Collector" means the Revenue Officer/City Clerk or their designee or agent for all purposes under this Chapter. "Taxpayer" means any person liable for any tax under this Chapter. "Telecommunication Service" means any service or activity connected with the transmission or relay of sound, visual image, data, information, images, or material over a communications channel or any combination of communications channels. "Utility Service" means the producing, providing, or furnishing of electricity, electric lights, current, power, gas (natural or artificial), or water to consumers or ratepayers. i i -6- Sec. SA-I 10. Definitions: Income-producing capital equipment (a) The following tangible personal property, other than items excluded in subsection (d) below, shall be deemed "income-producing capital e ut ment" for the purposes of this Chapter: I machinery or equipment which is purchased or leased for use primarily during the activity of manufacturing or job printing. Machinery or equipment having multiple uses shall be included only if such machinery and equipment is not used by the vendee for any purpose other than during the activity of manufacturing or job printing to an extent greater than fifteen percent (15%) of its actual use. (2) central office switching equipment; switchboards; private branch exchange equipment; microwave, radio, and other electromagnetic carrier wave transmission equipment; coaxial cable; when so used by persons engaged in the business of providing telecommunication services. (3) machinery, equipment, or transmission lines used directly in the production or transmission of electrical power, but not including items used for distribution or transformers and -control equipment used at transmission substation sites. For the purposes of this Chapter, all machinery, equipment, or transmission lines rated for power of less than sixty thousand (60,000) volts or actually used for power of less than 60,000 volts shall be considered to be used for distribution. (4) pipes, or valves for such pipes, four inches (4") in interior diameter or larger, used for transporting oil, natural gas, ^" artificial gas, water, or coal slurry. (5) airplanes, navigational and communication instruments, and other accessories and related equipment used by airlines holding a federal or state certificate of public convenience and necessity or foreign air carrier permit for air transportation; provided that such tangible personal property is used in conjunction with ,or become part of aircraft to be used in transportation of persons, property, or U.S. Mail in intrastate, interstate, or foreign air transportation for hire. (6) rolling, stock, rails, ties, or signal control equipment used by railroads directly in the transportation of persons or property in' intrastate or interstate transportation for hire. (7) machinery or equipment used directly by oil or gas drilling or extracting companies in the drilling for or in the process of extracting oil or gas from the earth for commercial purposes. (8) tangible personal property actually and directly used or consumed by the business of operating any bus company or other urban mass transit system, when such system is operated by a governmental entity or by any person contracting with such a governmental entity as part of a governmentally adopted and controlled program to provide urban mass transportation. 1 ) -7- (9) metering, monitoring, receiving, and transmitting equipment acquired by persons engaged in the business of providing utility services or telecommunications services; but only to the extent that such equipment is to be used by the customers of such persons and such persons separately charge or bill their customers for use of such equipment. (10) machinery and equipment used directly in mining and metallurgical activity, as prescribed by Subsection 8A-430(a)(1), by persons engaging or continuing in the business of such activity. 01) (Reserved) (b) The term "income-producing capital equipment" shall further include ancillary machinery and equipment used for the treatment of waste products created by the business activities which are allowed to purchase "income-producing capital equipment" defined in subsection (a) above. (c) The term "income-producing capital equipment" shall further include repair and replacement parts, other than the items in subsection (d) below, where the property is acquired to become an integral part of another item itemized in subsections (a) or (b) above. (d) The tangible personal property defined as income-producing capital equipment in this Section shall not include: (1) expendable items. Any item having a net unit cost to the vendee of less than two hundred fifty dollars ($250.00) shall be deemed "expendable"; unless such item is treated in the vendee's books �r and records as a capital asset and the vendee supplies the vendor L with a certificate of proof of exemption at the time of the �r transaction, as provided by Regulation. (2) janitorial equipment and supplies. (3) hand tools. (4) office equipment, furniture, and supplies. (5) tangible personal property used in selling or distributing activities. (6) tangible personal property used in research. (7) motor vehicles required to be licensed by the State of Arizona,, without regard to the use of such motor vehicles, but not including buses and similar vehicles used to transport passengers as part of an urban mass transportation system described in subsection (a)(8) above. (8) shops, buildings, docks, depots, or other alterations of real property. Sec. SA-1I5. Definitions: computer software; custom computer programming. (a) "Computer Software" means any computer program, part of such a program, or any sequence of instructions for automatic data processing equipment. Computer software which is not "custom computer programming" is deemed to be tangible personal property for the purposes of this Chapter, regardless of the method by which title, possession, or right to use the software is transferred to the user. -8- (b) "Custom Computer Programming" means any computer software which is written or prepared exclusively for a customer and includes those r services represented by separately stated charges for the modification of existing prewritten programs when the modifications are written or prepared exclusively for a customer. (1) The term does not include a prewritten program which is held or existing for general or repeated sale, lease, or license, even if the program was initially developed on a custom basis for in-house, or for a single customer's, use. (2) Modification to an existing prewritten program to meet the customer's needs is custom computer programming only to the extent of the modification, and only to the extent that the actual amount charged for the modification is separately stated on invoices, statements, and other billing documents supplied to the customer. Sec. SA-I20. (Reserved) i _g_ Article H - Determination of Gross Income P Sec. 8A-200. Determination of gross income: in general. (a) Gross income includes: (1) the value proceeding or accruing from the sale of property, the providing of service, or both. (2) the total amount of the sale, lease, license for use, or rental price at the time of such sale, rental, lease, or license. (3) all receipts, cash, credits, barter, exchange, reduction of or forgiveness of indebtedness, and property of every kind or nature derived from a sale, lease, license for use, rental, or other taxable activity. (4) all other receipts whether payment is advanced prior to, contemporaneous with, or deferred in whole or in part subsequent to the activity or transaction. (b) Barter, exchange, trade-outs, or similar transactions are includable in gross income at the fair market value of the service rendered or property transferred, whichever is higher, as they represent consideration given for consideration received. (c) No deduction or exclusion is allowed from gross income on account of the cost of the property sold, the time value of money, expense of any kind or nature, losses, materials used, labor or service performed, interest paid, or credits granted. Sec. 8A-210. Determination of gross income: transactions between affiliated f companies or persons. In transactions between affiliated companies or persons, or in other circumstances where the relationship between the parties is such that the gross income from the transaction is not indicative of the market value of the subject matter of the transaction, the Tax Collector shall determine the "market value" upon which the City Privilege and Use Taxes shall be levied. "Market value" shall correspond as nearly as possible to the gross income from similar transactions of like quality or character by other taxpayers where no common interest exists between the parties, but otherwise under similar circumstances and conditions. Sec. 8A-220. Determination of gross income: artificially contrived transactions. The Tax Collector may examine any transaction, reported or unreported, if, in his opinion, there has been or may be an evasion of the taxes imposed by this Chapter and to estimate the amount subject to tax in cases where such evasion has occurred. The Tax Collector shall disregard any transaction which has been undertaken in an artificial manner in order to evade the taxes imposed by this Chapter. -10- Sec. 8A-230. Determination of gross income based upon method of reporting. The method of reporting chosen by a taxpayer, as provided in Section SA-520, necessitates the following adjustments to gross income for all purposes under this Chapter: (a) Cash basis - When a person elects to report and pay taxes on a cash basis, gross income for the reporting period shall include: (1) the total amounts received on "paid in full" transactions, against which are allowed all applicable deductions and exclusions; and (2) all amounts received on accounts receivable, conditional sales contract, or other similar transactions, against which no deductions and no exclusions from gross income are allowed. (b) Accrual basis - When a person elects to report and pay taxes on an accrual basis, gross income shall include all gross income for the applicable period regardless of whether receipts are for cash, credit, conditional, or partially deferred transactions, and regardless of whether or not any security document or instrument is sold, assigned, or otherwise transferred to another. Persons reporting on the accrual basis may deduct bad debts, provided that: (1) the amount deducted for the bad debt must be deducted from gross income of the month in which the actual charge-off was made, and only to the extent that such amount was actually charged-off, and also only to the extent that such amount is or was included as taxable gross income; and (2) if any amount is subsequently collected on such charged-off account, it shall be included in gross income for the month in } which it was collected, without deduction for expense of collection. Sec. 8A-240. Exclusion of cash discounts, returns, refunds, trade-in values, vendor-issued coupons, and rebates from gross income. (a) The following items are not included in gross income: (1) Cash discounts allowed by the vendor for timely payment, but only discounts allowed against taxable gross income. (2) The value of property returned by customers to the extent of the amount actually refunded either in cash or by credit and the amount refunded was included in taxable gross income. (3) The trade-in allowance for tangible personal property accepted as payment, not to exceed the full sales price for any tangible personal property sold, when the full sales price is included in taxable gross income. (4) When coupons issued by a vendor are later accepted by the vendor as a discount against the transaction, the discount may be excluded from gross income as a cash discount. Amounts credited or refunded by a vendor for redemption of coupons issued by any person other than the vendor may not be excluded from gross income. -I1- (5) Rebates issued by the vendor to a customer as a discount against the transaction may be excluded from gross income as a cash r discount. Rebates issued by a person other than the vendor may not be excluded from gross income, even when the vendee assigns his right to the rebate to the vendor. (b) If the amount specified in subsection (a) above is credited by a vendor subsequent to the reporting period in which the original transaction occurs, such amount may be excluded from the taxable gross income of that subsequent reporting period, but only to the extent that the excludable amount was reported as taxable gross income in that prior reporting period. Sec. 8A-250. Exclusion of combined taxes from gross income; itemization; notice; limitations. (a) When tax is separately charged and/or collected. The total amount of gross income shall be exclusive of combined taxes only when the person upon whom the tax is imposed shall establish to the satisfaction of the Tax Collector that such tax has been added to the total price of the transaction. The taxpayer must provide to his customer and also keep a reliable record of the actual tax charged or collected, shown by cash register tapes, sales tickets, or other accurate record, separating net transaction price and combined tax. If at any time the Tax Collector cannot ascertain from the records kept by the taxpayer the total or amounts billed or collected on account of combined taxes, the claimed taxes collected may not be excluded from gross income, unless such records are completed and/or clarified to the satisfaction of the Tax Collector. (1) Remittance of all tax charged and/or collected. When an added charge is made to cover City (or combined) Privilege and Use Taxes, the person upon whom the tax is imposed shall pay the full amount of the City taxes due, whether collected by him or not, and in the event he collects more than the amount due he shall remit the excess to the Tax Collector. In the event the Tax Collector cannot ascertain from the records kept by the taxpayer the total or amounts of taxes collected by him, and the Tax. Collector is satisfied that the taxpayer has collected taxes in an amount in excess of the-tax assessed under this Chapter, the Tax Collector may determine the amount collected and collect the tax so determined in the manner provided in this Chapter. (2) itemization. A taxpayer, in order to be entitled to exclude from his gross income any amounts paid to him by customers for combined taxes passed on to the customer, must prove that he has provided his customer with a written record of the transaction showing at a minimum the price before the tax, the combined taxes, and the total cost. This shall be addition to the record required to be kept under subsection (a) above. (b) When tax has been neither separately charged nor separately collected. When the person upon whom the tax is imposed shall establish by means of invoices, sales tickets, or other reliable evidence, that no added charge was made to cover combined taxes, the taxpayer may exclude tax collected from such income by dividing such taxable gross income by 1.00 plus a decimal figure representing the effective combined tax rate expressed as a fraction of 1.00. -12- Sec. 8A-260. Exclusion of motor vehicle fees and taxes from gross income; limitations. 1 (a) There shall be excluded from gross income of vendors of motor vehicles those motor vehicle registration fees, license fees and taxes, and lieu taxes imposed pursuant to Title 28, Arizona Revised Statutes in connection with the initial purchase of a motor vehicle, but only to the extent that such taxes or fees or both have been separately itemized and collected from the purchaser of the motor vehicle by the vendor, actually remitted to the proper registering, licensing, and taxing authorities, and the provisions of Article III, regarding recordkeeping, are met. For the purpose of the exclusion provided by this subsection only, the terms vendor and vendee shall also apply to a lessor and lessee respectively, of a motor vehicle if, in addition to all other requirements of this subsection, the lease agreement specifically requires the lessee to pay such fees or taxes, and such amounts are separately itemized in the documentation provided to the lessee. (b) There shall be excluded from gross income of vendors at retail of heavy trucks and trailers, the amount attributable to Federal Excise Taxes imposed by 26 U.S.C. Section 4051, but only to the extent that the provisions of Article III, relating to recordkeeping, have been met. Sec. 8A-270. Exclusion of gross income of persons deemed not engaged in business. (a) For the purposes of this Section, the following definitions shall apply: r (1) "Federally Exempt Organization" means an organization which has received a determination of exemption, or qualifies for such exemption, under 26 U.S.C. Section 501(c) and rules and regulations of the Commissioner of Internal Revenue pertaining to same, but not including a "governmental entity", "non-licensed business", or "public educational entity". (2) "Governmental Entity" means the Federal Government, the State of Arizona, any other state, or any political subdivision, department, or agency of any of the foregoing; provided further that persons contracting with such a governmental entity to operate any part of a governmentally adopted and controlled program to provide urban mass transportation' shall be deemed a governmental entity in all activities such person performs when engaged in said contract. (3) "Non-Licensed Business" means any person conducting any business activity for gain or profit, whether or not actually realized, which person is not required to be licensed for the conduct or transaction of activities subject to the tax imposed under this Chapter. (4) "Proprietary Club" means any club which has qualified or would otherwise qualify as an exempt club under the provisions of 26 U.S.C. Section 501(c)(7), (8), and (9), notwithstanding the fact that some or all of the members may own a proprietary interest in the property and assets of the club. (5) "Public Educational Entity" means any educational entity operated pursuant to any provisions of Title 15, Arizona Revised Statutes. 1 -13- (b) Transactions which, if conducted by any other person, would produce gross income subject to tax under this Chapter shall not be subject to the imposition of such tax if conducted entirely by a public educational entity; governmental entity, except "proprietary activities" of municipalities as provided by Regulation; or non-licensed business. (c) Transactions which, if conducted by any other person, would produce gross income subject to the tax under this Chapter shall not be subject to the imposition of such tax if conducted entirely by a federally exempt organization or proprietary club with the following exceptions: (1) Transactions involving proprietary clubs and organizations exempt under 26 U.S.C. Section 501(c)(7), (8), and (9), where the gross revenue of the activity received from persons other than members and bona fide guests of members is in an amount in excess of fifteen percent (15%) of total gross revenue, as prescribed by Regulation. In the event this fifteen percent (15%) limit is exceeded, the entire gross income of such entity shall be subject to the applicable tax. (2) Gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512, including all statutory definitions and determinations, the rules and regulations of the Commissioner of Internal Revenue, and his administrative interpretations and guidelines. (3) (Reserved). (d) Except as may be provided elsewhere in this Chapter, transactions where customers are exempt organizations, proprietary clubs, public ,�• educational entities, governmental entities, or non-licensed businesses shall be deemed taxable transactions for the purpose, of the imposition - of taxes under this Chapter, notwithstanding that property so acquired may in fact be resold or leased by the acquiring person to others. In the case of sales, rentals, leases, or licenses to proprietary clubs or exempt organizations, the vendor may be relieved from the responsibility for reporting and paying tax on such income only by obtaining from its vendee a verified statement that includes: (1) a statement that when the property so acquired is resold, rented, leased, or licensed, that the otherwise exempt vendee chooses, or is required, to pay City Privilege Tax or an equivalent excise tax- on--its gross income from such transactions and does in fact file returns on same; and (2) the Privilege License number of the otherwise exempt vendee; and (3) such other information as the Tax Collector may require. (e) Franchisees or concessionaires operating businesses for or on behalf of any exempt organization, governmental entity, public educational entity, proprietary club, or non-licensed business shall not be considered to be such an exempt organization, club, entity, or non-licensed business, but shall be deemed to be a taxpayer subject to the provisions of this Chapter, except as provided in the definition of governmental entity, regarding urban mass transit. (f) (Reserved) -14- Sec. 8A-280. (Reserved) i Sec. 8A-285. (Reserved) Sec. 8A-290. (Reserved) 't -15- 'r Article IIQ - Licensing and Recordkeeping s - Sec. SA-300. Licensing requirements. (a) The following persons shall make application to the Tax Collector for a Privilege License, accompanied by a nonrefundable fee of two dollars ($2.00), and no person shall engage or continue in business or engage in such activities until he shall have such a license: (1) every person desiring to engage or continue in business activities within the City upon which a Privilege Tax is imposed by this Chapter. (2) (Reserved) (3) every person required to report and pay a tax upon Rental Occupancy, as imposed by Section 8A-440. (b) A person engaged in more than one activity subject to City Privilege and Use Taxes at any one business location is not required to obtain a separate license for each activity; provided that, at the time such person makes application for a license, he shall list on such application each category of activity in which he is engaged. The licensee shall inform the Tax Collector of any changes in his business activities within thirty (30) days. (c) Limitation. The issuance of a Privilege License by the Tax Collector shalt in no way be construed as permission to operate a business activity in violation of any other law or regulation to which such activity may Ic be subject. Sec. 8A-305. Special licensing requirements. (a) Partnerships. Application for a Privilege License for a partnership engaging or continuing in business in the City shall provide, as a minimum, the names and addresses of all general partners. Licenses issued to persons engaged in business as partners, limited or general, shall be in the name of the partnership. (b) Corporations. Application for a Privilege License for a corporation engaging or continuing in business in the City shall provide, as a minimum, the names and addresses of both the Chief Executive Officer and Chief Financial Officer of the corporation. Licenses issued to persons engaged in business as corporations shall be in the name of the corporation. (c) Multiple Locations. A person engaged in or conducting one or more businesses at two (2) or more locations shall procure a license for each such location. A "location" is a place of a separate business establishment. (d) (Reserved) -16- Sec. 8A-310. Licensing: duration of license; transferability; display. T, (a) Except as provided in Section 8A-320, the Privilege License shall be valid until request for cancellation and/or surrender of the license by the licensee or expiration through cessation by the licensee of the business activity for which it was issued. (b) The Privilege License shall be nontransferable between owners or locations, and shall be on display to the public in the licensee's place of business. (c) Any licensee who permits his license to expire through cancellation as provided in Section SA-320, by his request for cancellation, by surrender of the license, or by the cessation of the business activity for which the license was issued, and who thereafter applies for license, shall be granted a new license as an original applicant and shall pay the current license fee. Any licensee who loses or misplaces his Privilege License which is still in effect shall be charged the current license fee for each reissuance of a license. (d) (Reserved) Sec. 8A-320. Licensing: cancellation; revocation. (a) Cancellation. The Tax Collector shall be authorized to cancel the City Privilege License of any licensee as "inactive" if the taxpayer, required to report monthly to the City, has neither filed any return nor remitted of to the City any taxes imposed by this Chapter for a period of six (6) consecutive months; or, if required to report quarterly, has neither filed any return nor remitted any taxes imposed by this Chapter for two (2) consecutive quarters; or, if required to report annually, has neither filed any return nor remitted any taxes imposed by this Chapter when such annual report and tax are due to be filed with and remitted to the Tax Collector. (b) Revocation. If any licensee fails to pay any tax, interest, penalty, fee, or sum required to be paid to the. City under this Chapter, or if such licensee fails to comply with any other provisions of this Chapter, the Tax Collector shall be authorized to revoke the City Privilege License of said licensee. W !Notice and Hearing. The Tax Collector shall deliver notice to such licensee of cancellation or revocation of the Privilege License. If within twenty (20) days the licensee so notified requests a hearing, he shall be granted a hearing before the Tax Collector. (d) After cancellation or revocation of a taxpayer's license, the taxpayer shall not be relicensed until all reports have been filed; all fees, taxes, interest, and penalties due have been paid; and he is in compliance with the provisions of this Chapter. -17- Sec. 8A-330. Operating without a license. r It shall be unlawful for any person who is required by this Chapter to obtain a Privilege License to engage in or continue in business within the City without a license. The Tax Collector shall assess any delinquencies in tax, interest, and penalties which may apply against such person upon any transactions subject to the taxes imposed by this Chapter. Sec. 8A-350. Recordkeeping requirements. (a) It shall be the duty of every person subject to the tax imposed by this Chapter to keep and preserve suitable records and such other books and accounts as may be necessary to determine the amount of tax for which he is liable under this Chapter. The books and records must contain, at a minimum, such detail and summary information as may be required by Regulation. It shall be the duty of every person to keep and preserve such books and records for a period equal to the applicable limitation period for assessment of tax, and all such books and records shall be open for inspection by the Tax Collector during any business day. (b) The Tax Collector may direct, by letter, a specific taxpayer to keep specific other books, records, and documents. Such letter directive shall apply: (1) only for future reporting periods, and (2) only by express determination of the Tax Collector that such specific recordkeeping is necessary due to the inability of the City to conduct an adequate examination of the past activities of the taxpayer, which inability resulted from inaccurate or inadequate books, records, or documentation maintained by the taxpayer. Sec. 8A-360. Recordkeeping: claim of exclusion, exemption, deduction, or credit; documentation; liability. (a) All deductions, exclusions, exemptions and credits provided in this Chapter are conditional upon adequate proof and documentation of such as may be required under A.R.S. Section 42-1328 or by.this Chapter or, Regulation. (b) Any person who claims and receives an exemption, deduction, exclusion, or credit to which he is not entitled under this Chapter, shall be subject to, liable for, and pay the tax on the transaction as if the vendor subject to the tax had passed the burden of the payment of the tax to the person wrongfully claiming the exemption. A person who wrongfully claimed such exemption shall be treated as if he is delinquent in the payment of the tax and shall be subject to interest and penalties upon such delinquency. However, if the tax is collected from the ,vendor on such transaction it shall not again be collected from the person claiming the exemption, or if collected from the person claiming the exemption it shall not also be collected from the vendor. -18- Sec. 8A-370. Inadequate or unsuitable records. r In the event the records provided by the taxpayer are considered by the Tax Collector to be inadequate or unsuitable to determine the amount of the tax for which such taxpayer is liable under the provisions of this Chapter, it is the responsibility of the taxpayer either: (1) to provide such other records required by this Chapter or Regulation; or (2) to correct or to reconstruct his records, to the satisfaction of the Tax Collector. 1 -19- r Article IV - Privilege Taxes Sec. 8A-400. Imposition of Privilege Taxes; presumption. (a) There are hereby levied and imposed, subject to all other provisions of this Chapter, the following Privilege Taxes for the purpose of raising revenue to be used in defraying the necessary expenses of the City, such taxes to be collected by the Tax Collector: (1) a Privilege Tax upon persons on account of their business activities, to the extent provided elsewhere in this Article, to be measured by the gross income of persons, whether derived from residents of the City or not, or whether derived from within the City or from without. (2) a Privilege Tax upon certain persons for the privilege of occupancy of real property, in accordance with the provisions of Section SA-440. (b) Taxes imposed by this Chapter are in addition to others. Except as specifically designated elsewhere in this Chapter, each of the taxes imposed by this Chapter shall be in addition to all other licenses, fees, and taxes levied by law, including other taxes imposed by this Chapter. (c) Presumption. For the purpose of proper administration of this Chapter and to prevent evasion of the taxes imposed by this Chapter, it shall be presumed that all gross income is subject to the tax until the contrary is established by the taxpayer. (d) Limitation of exemptions, deductions, and credits allowed against the measure of taxes imposed by this Chapter. All exemptions, deductions, and credits set forth in this Chapter shall be limited to the specific activity or transaction described and not extended to include any other activity or transaction subject to the tax. Sec. 8A-405. Advertising. (a) The tax''rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the business of "local advertising" by billboards, direct mail, radio, television, or by any other means. However, commission and fees retained by an advertising agency shall not be includable in gross income from "local advertising". All delivery or disseminating of information directly to the public or any portion thereof for a consideration shall be considered "Local Advertising", except the following: (1) the advertising of a product or service which is sold or provided both within and without the State by more than one "commonly designated business entity" within the State, and in which the advertisement names either no "commonly designated business entity" within the State or more than one "commonly designated business entity". "Commonly Designated Business Entity" means any person selling or providing any product or service to its customers under a common business name or style, even though there may be more than one legal entity conducting business functions using the same or substantially the same business name or style by virtue of a franchise, license, or similar agreement. -20- (2) the advertising of a facility or of a service or activity in which 1 neither the facility nor a business site carrying on such service or activity is Iocated within the State. (3) the advertising of a product which may only be purchased from an out-of-State supplier. (4) political advertising for United States Presidential and Vice Presidential candidates only. (5) advertising by means of product purchase coupons redeemable at any retail establishment carrying such product but not product coupons redeemable only at a single commonly designated business entity. (6) advertising transportation services where a substantial portion of the transportation activity of the business entity advertised involves interstate or foreign carriage. (b) (Reserved) Sec. SA-4I0. Amusements, exhibitions, and similar activities. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the following businesses: (1) operating or conducting theaters, movies, operas, shows of any type or nature, exhibitions, concerts, carnivals, circuses, amusement parks, menageries, fairs, races, contests, games, y0► billiard or pool parlors, bowling alleys, skating rinks, tennis j courts, golf courses, video games, pinball machines, public dances, dancehalls, sports events, jukeboxes, batting and driving ranges, animal rides, or any other business charging admission for exhibition, amusement, entertainment, or instruction. (2) health spas, fitness centers, or other persons who charge for the use of premises for sports, athletic, or other health-related activities, whether on a per-event use, or for long-term usage, such as membership fees. (b) (Reserved) Sec. 8A-415. Construction contracting; prime contractors. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business upon every construction contractor engaging or continuing in the business activity of construction contracting within the City. (1) However, gross income from construction contracting shall not include charges related to groundwater measuring devices required by A.R.S. Section 45-604. (2) (Reserved) (b) Deductions. 1 Gross income derived from acting as a "subcontractor" shall be exempt from the tax imposed by this Section. (2) All construction contracting gross income subject to the tax and not deductible herein shall be allowed a deduction of thirty-five percent (35%). -21- (c) "Subcontractor" means a construction contractor performing work for either: 1 (1) a construction contractor who has provided the subcontractor with a written declaration that he is liable for the tax for the project and has provided the subcontractor both his Arizona Transaction Privilege License number and his City Privilege License number. (2) an owner-builder who has provided the subcontractor with a written declaration that: (A) the owner-builder is improving the property for sale; and (B) the owner-builder is liable for the tax for such construction contracting activity; and (C) the owner-builder has provided the contractor both his Arizona Transaction Privilege License number and his City Privilege License number. Sec. 8A-416. Construction contracting: speculative builders. (a) The tax shall be equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in business as a speculative builder within the City. (1) The gross income of a speculative builder considered taxable shall include the total selling price from the sale of improved real property at the time of closing of escrow or transfer of title. (2) "Im-proved Real Property" means any real property: (A) upon which a structure has been constructed; or (B) where improvements have been made to land containing no structure (such as paving or landscaping); or (C) which has been reconstructed as provided by Regulation; or i + (D) where water, power, and streets have been constructed to the property line. (3) "Sale of Improved Real Property" includes any form of transaction, whether characterized as a lease or otherwise, which in substance is a transfer of title of, or equitable ownership in, improved real property and includes any lease of the property for a term of thirty (30) years or more (with all options for renewal being included as a part of the term). In the case of multiple unit. projects, "sale" refers to the sale of the entire project or to the safe of any individual parcel or unit. (b) Exclusions. l In cases involving reconstruction contracting, the speculative builder may exclude from gross income the prior value allowed for reconstruction contracting in determining his taxable gross income, as provided by Regulation. (2) Neither the cost nor the fair market value of the land which constitutes part of the improved real property sold may be excluded or deducted from gross income subject to the tax imposed by this Section. (3) (Reserved) (c) Tax liability for speculative builders occurs at close of escrow or transfer of title, whichever occurs earlier, and is subject to the provisions of Section 8A-418, relating to deductions and tax credits. -22- Sec. 8A-417. Construction contracting: owner-builders who are not speculative builders. (a) At the expiration of twenty-four (24) months after improvement to the property is substantially complete, the tax liability for an owner-builder who is not a speculative builder shall be at an amount equal to two percent (2%) of: (1) the gross income from the activity of construction contracting upon the real property in question which was realized by those construction contractors to whom the owner-builder provided written declaration that they were not responsible for the taxes as prescribed in Subsection 8A-415(c)(2); and (2) the purchase of tangible personal property for incorporation into any improvement to real property, computed on the sales price. (b) The tax liability of this Section is subject to the provisions of Section 8A-418, relating to deductions and tax credits. (c) The limitation period for the assessment of taxes imposed by this Section is measured based upon when such liability is reportable, that is, in the reporting period that encompasses the twenty-fifth (25th) month after said unit or project was substantially complete. Interest and penalties, as provided in Section 8A-540, will be based on reportable date. (d) (Reserved) Sec. 8A-418. Construction contracting: deductions and tax credits available i to speculative builders and owner-builders. AL The following deductions and tax credits are available to amounts subject to the taxes imposed by Sections 8A-416 and 8A-417: (a) All amounts subject to the tax shall be allowed a deduction in the amount of thirty-five percent (35%). (b) The following tax credits are available to owner-builders and specula- tive builders, not to exceed the tax liability against which such credits apply, provided such credits are documented to the satisfaction of the Tax Collector: (1) A tax credit equal to the amount of City Privilege or Use Tax, or the equivalent excise tax, paid directly to a taxing jurisdiction or as a separately itemized charge paid directly to the vendor in respect of the tangible personal property incorporated into the said structure or improvement to real property undertaken by the speculative builder or owner-builder. (2) A tax credit equal to the amount of Privilege Taxes paid to this City, or charged separately to the customer, by the construction contractor, speculative builder, or owner-builder on the gross income derived by said person from the construction of any improvement to the real property. (3) . No credits provided herein may be claimed until such time that the gross income against which said credits apply is reported. I -23- 1 Sec. 8A-420. Feed at wholesale. (a) The tax rate shall be at an amount equal to two percent (21yo) of the gross income from the business activity upon every person engaging or continuing in the business of the sale of feed, salt, vitamins, and other additives to feed, to persons engaged in the raising or feeding of livestock or poultry purchased or raised for slaughter, with no deduction for the income derived from the "resale" of such feed. (b) The tax imposed by this Section shall not apply to: (1) out-of-City sales. (2) out-of-State sales. Sec. 8A-425. Job printing. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from 'the business activity upon every person engaging or continuing in the business of job printing, which includes engraving of printing plates, embossing, copying, micrographics, and photo reproduction. (b) The tax imposed by this Section shall not apply to: (1) job printing purchased for the purpose of resale by the purchaser in the form supplied by the job printer. (2) out-of-City sales. (3) out-of-State sales. (4) (Reserved) Sec. 8A-430. Mining, timbering, and other extraction. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the following businesses: (1) mining, smelting, or producing for sale, profit, or commercial use any copper, gold, silver, or other mineral product, compound, or combination of mineral products; but not including the extraction, removal, or production of sand, gravel, or rock from the ground for sale, profit, or commercial use. (2) felling, producing, or preparing timber or any product of the forest for sale, profit, or commercial use. (3) extracting, refining, or producing any oil or natural gas for sale, profit, or commercial use. (b) The rate specified in subsection (a) above shall be applied to the value of the entire product mined, smelted, extracted, refined, produced, or prepared for sale, profit, or commercial use, when such activity occurs within the City, regardless of the place of sale of the product or the fact that delivery may be made to a point without the City or without the State. (c) if any person engaging in any business classified in this Section ships or transports products, or any part thereof, out of the State without making sale of such products, or ships his products ouiside of the State in an unfinished condition, the value of the products or articles in the condition or form in which they existed when transported out-of-State and before they enter interstate commerce shall be the basis for assessment of the tax imposed by this Section. -2 4- r Sec. SA-435. Publishing and periodicals distribution. i (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the business activity of. (1) publication of newspapers, magazines, or other periodicals when published within the City, measured by the gross income derived from notices, subscriptions, and local advertising as defined in Section 8A-405. In cases where the location of publication is both within and without this State, gross income subject to the tax shall refer only to gross income derived from residents of this State or generated by permanent business locations within this State. (2) distribution or delivery within the City of newspapers, magazines, or other periodicals not published within the City, measured by the gross income derived from subscriptions. (b) "Location of Publication" is determined by: (1) location of the editorial offices of the publisher, when the physical printing is not performed by the publisher; or (2) location of either the editorial offices or the printing facilities, if the publisher performs his own physical printing. (c) "Subscription income" shall include all circulation revenue of the r„ publisher except amounts retained by or credited to carriers or other vendors as compensation for delivery within the State by such carriers or vendors, and further except sales of published items, directly or through distributors, for the purpose of resale, to retailers subject to the Privilege Tax on such resale. (d) "Circulation," for the purpose of measurement of gross income subject to the tax, shall be considered to occur at the place of delivery of the published items to the subscriber or intended reader irrespective of the location of the physical facilities or personnel of the publisher. However, delivery by the United .States mails shall be considered to have occurred at the location of publication. (e) Allocation of taxes between cities and towns. In cases where publication or distribution 'occurs in more than one city or town, the measurement of gross income subject to tax by the City shall include: (1) that portion of the gross income from publication which reflects the ratio of circulation within this City to circulation in all incorporated cities and towns in this State having substantially similar provisions; plus (2) only when publication occurs within the City, that portion of the remaining gross income from publication which reflects the ratio of circulation within this City to the total circulation of all incorporated cities or towns in this State within which cities the taxpayer maintains a location of publication. f 1 -25- Sec. 8A-440. Rental occupancy. (a) For the purposes of this Section only, the following definitions shall apply: (1) "Landlord" means any lessor of real property under a pre-existing lease. (2) "Pre-existing Lease" means any written lease, license for use, or rental agreement entered into prior to December 1, 1967; except for the following: (A) any bilateral amendment to such written agreement which was entered into subsequent to December 1, 1967, wherein the length of the term or the size of the premises affected is changed or both. (13) any such agreement for lodging or lodging space. (3) "Rent" means all consideration paid by the tenant to his landlord or to another in payment of or diminution of his own or his landlord's obligation in connection with the real property occupied by the tenant, whether or not such occupancy is designated as a rent, lease or license for use of real property. (4) "Tenant" means any lessee of real property under a pre-existing lease. (b) The tax rate shall be at an amount of percent ( %) of the gross rent paid by a tenant, to the extent of his occupancy of real property in this City under a pre-existing lease, upon such tenant, for the privilege of such occupancy, subject to the provisions of this Section, (c) Exclusions. The tax imposed by this Section shalt not apply to: (1) occupancy by a tenant which the Constitution or laws of the United States or of the State of Arizona prohibit the City from taxing. (2) occupancy by a tenant of a landlord which the Constitution or laws of the United States or of the State of Arizona prohibit the City from taxing. (3) occupancy of lodging or lodging space. (4) occupancy of real property under other than a pre-existing lease. (d) Duty of landlords. Every landlord of a tenant subject to the tax: (1) shall collect the tax imposed by this Section from the tenant liable for the tax at the same time as and together with the tenant's periodic or other payment of rent. The tax required to be collected shall constitute a debt owed by the landlord to the City. (2) shall be considered a taxpayer subject to all licensing, recordkeeping, and reporting requirements of this Chapter. (e) Duty of tenants. Every tenant liable for the tax: (1) shall, in any instance in which the tax has not been collected by his landlord, remit such tax to the Tax Collector, and in such case, be subject to all licensing and reporting requirements of this Chapter. (2) shall maintain, and provide upon request, books and records sufficient for the .Tax Collector to determine the tax liability of such tenant. -26- (f) Interest and civil penalties shall be the liability of the landlord collecting and remitting the tax; provided, however, that if the landlord can present clear and convincing evidence that the delinquency was caused by the tenant, then said interest and penalties shall be the liability of the tenant. (g) Extension of rights of appeal to include tenants and landlords. (1) Any landlord or tenant may avail himself of the provisions of Sections 8A-570 through 8A-575, relating to appeals, and, except as modified hereunder, all provisions of said Sections shall apply. (2) For the purposes of preserving appeal rights, an assessment against a landlord may be protested and appealed by any tenant paying or liable to pay the tax for the occupancy included in such assessment. (3) Payment of the tax herein imposed to a landlord by a tenant shall be deemed payment of the tax for the tenant for the purposes of allowing a protest to be initiated under Sections 8A-570 through 8A-575. (4) The filing of a protest petition by a tenant shall not relieve the landlord of his obligation to report and remit the protested tax; or any subsequent periodic payments of tax governed by the initial protest. (h) Refunds. Any refunds of taxes authorized by this Chapter shall be made to the tenant. Any refunds of interest and civil penalties authorized by this Chapter shall be made to the person liable for such, as provided in subsection (f) above. i -27- Sec. 8A-445. Rental, leasing, and licensing for use of real property. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the business of leasing, licensing for use, or renting real property located within the City for a consideration, to the tenant in actual possession, including any improvements, rights, or interest in such property; provided further that: (1) Payments made by the lessee to, or on behalf of, the lessor for property taxes, repairs, or improvements are considered to be part of the taxable gross income. (2) Charges for such items as telecommunications, utilities, pet fees, or maintenance are considered to be part of the taxable gross income. (3) However, if the lessor engages in telecommunication activity, as evidenced by installing individual metering equipment and by billing each tenant based upon actual usage, such activity is taxable under Section SA-470. (b) If individual utility meters have been installed for each tenant and the lessor separately charges each single tenant for the exact billing from the utility company, such charges are exempt. (c) Charges by primary health care facilities to patients of such facilities for use of rooms or other real property during the course of their treatment by such facilities are exempt. (d) Charges for joint pole usage by a person engaged in the business of providing or furnishing utility or telecommunication services to another person engaged in the business of providing or furnishing utility or telecommunication services are exempt from the tax imposed by this Section. (e) (Reserved) (f) (Reserved) (g) (Reserved) (h) (Reserved) (i) (Reserved) Sec. SA-447. (Reserved) Sec. 8A-450. Rental, leasing, and licensing for use of tangible personal property. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or ' continuing in the business of leasing, licensing for use, or renting tangible personal property for a consideration, including that which is semi-permanently or permanently installed within the City as provided by Regulation. -28- T (b) Special provisions relating to long-term motor vehicle leases. A lease transaction involving a motor vehicle for a minimum period of twenty- four (24) months shall be considered to have occurred at the location of the motor vehicle dealership, rather than the location of the place of business of the lessor, even if the lessor's interest in the lease and its proceeds are sold, transferred, or otherwise assigned to a lease financing institution; provided further that the city or town where such motor vehicle dealership is located levies a Privilege Tax or an equivalent excise tax upon the transaction. (c) Gross income derived from the following transactions shall be exempt from Privilege Taxes imposed by this Section: (1) rental, leasing, or licensing for use of tangible personal property to persons engaged or continuing in the business of leasing, licensing for use, or rental of such property. (2) rental, leasing, or licensing for use of tangible personal property that is semi-permanently or permanently installed within another city or town that levies an equivalent excise tax on the transaction. (3) rental, leasing, or licensing for use of film, tape, or slides to a theater or other person taxed under .Section 8A-410, or to a radio station, television station, or subscription television system. (4) rental, leasing, or licensing for use of the following: (A) prosthetics. (B) income-producing capital equipment. (C) mining and metallurgical supplies. (5) rental, leasing, or licensing for use of tangible personal property to any nonprofit primary health care facility, except when the property so rented, leased, or licensed is for use in activities resulting in gross income from unrelated business income as that tern is defined in 26 U.S.C. Section 512. (6) separately billed charges for delivery, installation, repair, and/or maintenance as provided by Regulation. (7) charges for joint pole usage by a person engaged in the business of providing or furnishing utility or telecommunication services to another person engaged .in the business of providing or furnishing utility or telecommunication services. (8) (Reserved) (9) (Reserved) Sec. 8A-455. Restaurants and Bars. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the business of preparing or serving food or beverage in a bar, cocktail lounge, restaurant, or similar establishment where articles of food or drink are prepared or served for consumption on or off the premises, including also the activity of catering. Cover charges and minimum charges must be included in the gross income of this business activity. (b) Caterers and other taxpayers subject to the tax who deliver food and/or serve such food off premises, shall also be allowed to exclude separately charged delivery, set-up, and clean-up charges, provided that the charges are also maintained separately in the books and records. -29- Sec. 8A-460. Retail sales: measure of tax; burden of proof; exclusions. (a) The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business activity upon every person engaging or continuing in the business of selling tangible personal property at retail. (b) The burden of proving that a sale of tangible personal property is not a taxable retail sale shall be upon the person who made the sale. ' (c) Exclusions. For the purposes of this Chapter, sales of tangible personal property shall not include: (1) sales of stocks, bonds, options, or other similar materials. (2) sales of lottery tickets or shares pursuant to Article I, Chapter 5, Title 5, Arizona Revised Statutes. (3) sales of platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by Regulation. (4) gross income derived from the transfer of tangible personal property which is specifically included as the gross income of a business activity upon which another Section of this Article imposes a tax, shall be considered gross income of that business activity, and are not includable as gross income subject to the tax imposed by this Section. (5) sales by professional or personal service occupations where such sales are inconsequential elements of the service provided. (d) (Reserved) (e) Except 'as provided in Section SA-567, when this City and another Arizona city or town with an equivalent excise tax could claim nexus for taxing a retail sale, the city or town where the permanent business location of the seller at which the order was received shall be deemed to have precedence, and for the purposes of this Chapter such city or town has sole and exclusive right to such tax. (f) The appropriate tax liability for any retail sale where the order is received 'at a permanent business location of the seller located in this City or in an Arizona city or town that levies an equivalent excise tax shall be at the tax rate of the city or town of such seller's location. Sec. 8A-465. Retail sales: exemptions. Income derived from the following sources is exempt from the tax imposed by Section 8A-460: (a) ' sales of tangible personal property to a person regularly engaged in the business of selling such property. M out-of-City sales and out-of-State sales. i (c) charges for delivery, installation, or other direct customer services as prescribed by Regulation. (d) charges for repair services as prescribed by Regulation, when separately charged and separately maintained in the books and records of the taxpayer. -30- 1 (e) (Reserved) (f) sales of prosthetics. (g) sales of income-producing capital equipment. (h) sales of rental equipment and rental supplies. M sales of mining and metallurgical supplies. (j) sales of motor vehicle fuel and use fuel which are subject to a tax imposed under the provisions of Aricle I or II, Chapter 9, Title 28, Arizona Revised Statutes; or sales of use fuel to a holder of a valid single trip use fuel tax permit issued under A.R.S. Section 28-1559. W sales of tangible personal property to a construction contractor who holds a valid Privilege Tax License for engaging or continuing in the business of construction contracting where the tangible personal property sold is incorporated into any structure or improvement to real property as part of construction contracting activity. (1) (Reserved) (m) sales of tangible personal property which directly enters into and becomes an ingredient or component part of a product sold in the regular course of the business of job printing, manufacturing, or publication of newspapers, magazines, or other periodicals. Tangible personal property which is consumed or used up in a manufacturing, job printing, publishing, or production process is not an ingredient nor component part of a product. (n) sales made directly to the Federal government to the extent of: (1) one hundred percent (100%) of the gross income derived from retail sales made by a manufacturer, modifier, assembler, or repairer. (2) ' fifty percent (50%) of the gross income derived from retail sales made by any other person. (o) sales to hotels, bars, restaurants, dining cars, lunchrooms, boarding houses, or similar establishments of articles consumed as food, drink, or condiment, whether simple, mixed, or compounded, where such articles are customarily prepared or served to patrons for consumption on or off the premises, where the purchaser is properly licensed and paying a tax under Section 8A-445 or the equivalent excise tax upon such income. (p) sales of tangible personal property to any nonprofit primary health care facility, except when the property sold is for use in activities resulting in gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512. % (q) (Reserved) -31- W (Reserved) (1) (Reserved) (2) (Reserved) (3) (Reserved) (4) (Reserved) (s) sales of groundwater measuring devices required by A.R.S. Section 45-604. (t) (Reserved) (u) (Reserved) (v) (Reserved) (w) (Reserved) W (Reserved) (y) (Reserved) (z) (Reserved) Sec. 8A-470. Telecommunication services. 41'i (a) The tax rate shall be at an amount equal to zero percent (0%) of the gross income from the business activity upon every person engaging or continuing in the business of providing telecommunication services to consumers within this City. (1) Telecommunication services shall include: (A) two-way voice, sound, and/or video communication over a communications channel. (B) one-way voice, sound, and/or video transmission or relay over a communications channel. (C) facsimile transmissions.. (D), providing relay or r-epeater service. (E) providing computer interface services over a communications,channel. (F) time-sharing activities with a computer accomplished through the use of a communications channel. (2) Gross income from the business activity of providing telecommunication services to consumers within this City shall include: (A) all fees for connection to a telecommunication system. (B) toll charges, charges for transmissions, and charges for other telecommunications services; provided that such charges relate to transmissions originating in the City and terminating in this State. (C) fees charged for access to or subscription to or membership in a telecommunication system or network. V charges for monitoring services relating to a security or burglar alarm system located within the City where such system transmits or receives signals or data over a communications channel. -32- (b) Resale telecommunication services. Gross income from sales of telecommunication services to another provider of telecommunication services for the purpose of providing the purchaser's customers with such service shall be exempt from the tax imposed by this Section; provided, however, that such purchaser is properly licensed by the City to engage in such business. (c) Interstate transmissions. Charges by a provider of telecommunication services for transmissions originating in the City and terminating outside the State are exempt from the tax imposed by this Section. (d) Tax credit offset for franchise fees. There shall be allowed as an offset, up to the amount of tax due, any amounts paid to the City for license fees or franchise fees, but such offset shall not be allowed against taxes imposed by any other Section of this Chapter. Such offset shall not be deemed in conflict with or violation of subsection 8A-400(b). (e) However, gross income from the providing of telecommunication services by a cable television system, as such system is defined in A.R.S. Section 9-505, shall be exempt from . the tax imposed by this Section. Sec. 8A-475. Transporting for hire. "~ The tax rate shall be at an amount equal to two percent (2%) of the gross income 1 from the business activity upon every person engaging or continuing in the business of providing the .following forms of transportation for hire from this City to another point within the State: (a) transporting of persons or property by railroad. (b) transporting of oil or natural or artificial gas through pipe or conduit. (c) transporting of property by aircraft. (d) transporting of persons or property by motor vehicle, including towing and the operation of private car lines, as such are defined in Article III, Chapter 4, Title 42, Arizona Revised Statutes; provided, however, that the tax imposed by this subsection shall not apply to: (1) gross income subject to the tax imposed by Article Vt, Chapter 9, Title 28, Arizona Revised Statutes. (2) gross income derived from the operation of a governmentally adopted and controlled program to provide urban mass transportation. (3) (Reserved) (4) (Reserved) Sec. SA-490. Utility services. (a) The tax rate shall be at an amount equal to three percent (3%) of the j gross income from the business activity upon every person engaging or continuing in the business of producing, providing, or furnishing utility services, including electricity, electric lights, current, power, gas (natural or artificial), or water to; (1) consumers or ratepayers who reside within the City. (2) (Reserved) -33- (b) Exclusion of certain sales of natural gas to a public utility. ' Notwithstanding the provisions of subsection a above, the gross income derived from the sale of natural gas to a public utility for the purpose of generation of power to be transferred by the utility to its ratepayers shall be considered a retail sale of tangible personal property subject to Sections 8A-460 and 8A-465, and not considered gross income taxable under this Section. (c) Resale utility services. Sales of utility services to another provider of the same utility services for the purpose of providing such utility services either to another properly licensed utility provider or directly to such purchaser's customers or ratepayers shall be exempt and deductible from the gross income subject to the tax imposed by this Section, provided that the purchaser is properly licensed by all applicable taxing jurisdictions to engage or continue in the business of providing utility services, and further provided that the seller maintains proper documentation, in a manner similar to that for sales for resale, of such transactions. (d) Tax credit offset for franchise fees. There shall be allowed as an offset any franchise fees paid to the City pursuant to the terms of a franchise agreement, when such franchise fees are based on gross income realized from utility services provided to a specified class of customers within the City. However, such offset shall not be allowed against taxes 4e imposed by any other Section of this Chapter. Such offsets shall not be deemed in conflict with or violation of subsection 8A-400(b). I -34- Article V - Administration Sec. SA-500. Administration of this Chapter; rule making. (a) The administration of this Chapter is vested in and exercised by the City of Apache Junction, and except as otherwise provided, and all payments shall be made to the City of Apache Junction. The City may, pursuant to an intergovernmental agreement, contract with the State of Arizona Department of Revenue for the administration of the tax. In such cases, "Tax Collector" shall also mean the Arizona Department of Revenue, when acting as agent in administering this tax. (b) The Tax Collector shall prescribe the forms and procedures necessary for the administration of the taxes imposed by this Chapter. (c) Except where such Regulations would conflict with administrative regulations adopted by the City Council or with provisions of this Chapter, all regulations on the Transaction Privilege Tax adopted by the Arizona Department of Revenue under the authority of A.R.S. Section 42-105 shall be considered Regulations of this Chapter and enforceable as such. Sec. 8A-510. Divulging of information prohibited; exceptions allowing disclosure. 1 (a) Except as specifically provided, it shall be unlawful for any official or employee of the City to make known information obtained pursuant to this Chapter concerning.the business financial affairs or operations of any person. (b) The City Council may authorize an examination of any return or audit of a specific taxpayer made pursuant to this Chapter by authorized agents of the Federal Government, the State of Arizona, or any political subdivisions. (c) The Tax*Collector may provide to an Arizona county, city, or town any information concerning any taxes imposed in this Chapter relative to the taxing ordinances of that county, city, or town. (d) Successors, receivers, trustees, personal representatives, executors, guardians, administrators, and assignees, if directly interested, may be given information by the Tax Collector as to the items included in the measure and amounts of any unpaid tax, interest, and penalties required to be paid. (e) Upon a written direction by the City Attorney or other legal advisor to the City designated by the City Council, officials or employees of the City may divulge the amount and source of income, profits, leases, or expenditures disclosed in any return or report, and the amount of such delinquent and unpaid tax, penalty, or interest, to a private collection agency having a written collection agreement with the City. (f) The Tax Collector may provide information to appropriate representatives of any Arizona city or town to comply with the provisions of A.R.S. Section 42-1452 relating to the assessment and collection of intermunicipal taxes. -35- (g) The Tax Collector may provide information to authorized agents of any i' ? other Arizona governmental agency involving the allocation of taxes imposed by Section 8A-435 upon publishing and distribution of periodicals. (h) The Tax Collector may provide information regarding the enforcement and collection of taxes imposed by this Chapter to any governmental agency with which the City has an agreement. Sec. SA-520. Reporting and payment of tax. (a) The taxpayer shall be required to use the report form authorized by the Tax Collector and shall mail or deliver the same, together with remittance for the amount of tax due, payable to the City of Apache Junction, to the Tax Collector or any City representative or agent authorized to receive such payment. The tax return shall be signed by the taxpayer or his authorized agent, and such signature shall be evidence that the person signing the return verifies the accuracy of the information supplied in the return. (b) Payment. If payment is made in any form other than United States legal tender, the tax obligation shall not be satisfied until the payment has been honored in funds. r (c) Requirement of Security. If a taxpayer has remitted payment in the form of a check or other form of draw upon a bank or third party and such remittance has not been honored in funds, the Tax Collector may demand security for future payments. (d) Method of Reporting. Each taxpayer shall elect to report on either a cash receipts basis or an accrual basis and shall indicate the choice on the Privilege License application. A taxpayer shall not change his reporting method without receiving prior written approval by the Tax Collector. (1) Taxpayers must report all gross income subject to the tax using the, same basis of reporting. (2) Taxes imposed upon construction contracting shall be reported as follows; (A) Construction contractors shall report on either a progressive billing "accrual" basis or cash receipts basis. (B) Speculative builders shall report the gross income derived from sale of improved real property at close of escrow or at transfer of title or possession, whichever occurs earlier. (C) Owner-builders who are not speculative builders shall report taxable amounts as provided in Section 8A-417. Sec. 8A-530. When tax due; when delinquent; verification of return; extensions. (a) Except as otherwise specified in this Section, the taxes levied under this Chapter shall be due, payable, and delinquent on the dates specified for the State Transaction Privilege Taxes in A.R.S. Section 42-1322. The taxpayer shall report on the taxes imposed by this Chapter at such frequency to be identical to the taxpayer's reporting frequency for the reporting of State Transaction Privilege Taxes. -36- (b) (Reserved) (c) (Reserved) (d) (Reserved) (e) The Tax Collector may for good cause extend the date for making any return required under the provisions of this Section. as prescribed by A.R.S. Section 42-1I6. Sec. 8A-540. Interest and civil penalties. Any taxpayer who shall have failed to timely pay any taxes imposed by this Chapter, or file a report for the same in a timely manner, or fail or refuse to allow examination of records by the Tax Collector, shall be subject to any interest or civil penalties on such tax in like manner as such interest and penalties are provided in A.R.S. Sections 42-134 and 42-136 for the State Transaction Privilege Tax. (a) (Reserved) (b) (Reserved) (c) (Reserved) (d) (Reserved) 1 (e) (Reserved) (f) (Reserved) Sec. 8A-545. Deficiencies; when inaccurate return is filed; when no return is filed; estimates. (a) If a taxpayer has failed to file a return or if the Tax Collector is not satisfied with the return or payment of tax required, the Tax Collector may redetermine the tax due, plus penalties and interest, and notify the taxpayer, as provided and prescribed by A.R.S. Sections 42-117 and 42- 118. (1) (Reserved) (2) (Reserved) (b) Estimates by the Tax Collector. Any estimate made by the Tax Collector is to be made on a reasonable basis. The existence of another reasonable basis of estimation does not, in any way, invalidate the Tax Collector's estimate. It is the responsibility of the taxpayer to prove that the Tax Collector's estimate is not reasonable and correct, by providing sufficient documentation of the type and form required by this Chapter or satisfactory to the Tax Collector. Sec. $A-550. Limitation periods. (a) Except as provided elsewhere in this Chapter, deficiency assessments for the taxes imposed by this Chapter must be issued within the limitation periods prescribed in A.R.S. Section 42-113, and must meet the provisions of A.R.S. Section 42-117. -37- (b) (Reserved) (c) In cases of failure to file a return or a false or fraudulent return, the limitation period shall be as prescribed in A.R.S. Section 42-1 18. (d) Special provisions relating to owner-builders. The limitation for an owner-builder subject to the tax as prescribed in Section 8A-417 shall be based upon the date such tax liability is reportable or was reported, as provided in Section 8A-417. Sec. 8A-555. Tax Collector may examine books and other records; failure to provide records. (a) The Tax Collector may require the taxpayer to provide and may examine any books, records, or other documents of any person who, in the opinion of the Tax Collector, might be liable for any tax under this Chapter, for any periods available to him under Section 8A-550. (b) (Reserved) (c) (Reserved) (d) The Tax Collector may use any generally accepted auditing procedures, including sampling techniques, to determine the correct tax liability of any taxpayer. The only responsibility of the Tax Collector is that the $' procedures used are in accordance with generally accepted auditing standards. The taxpayer must prove by clear and convincing evidence that the methods chosen do not .comply with generally accepted auditing standards. (e) The fact that the taxpayer has not maintained or provided such books and records which the Tax Collector considers necessary to determine the tax liability of any person does not preclude the Tax Collector from making any assessment. In such cases, the Tax Collector is authorized to use estimates, projections, or samplings, to determine the correct tax. The provisions of Section 8A-545(b), concerning estimates, shall apply- (f) (Reserved) Sec.,8A-560. Erroneous payment of tax; credits and refunds; limitations. (a) Except as provided in Section 8A-565, the period within which a claim for credit may be filed, or refund allowed or made if no claim is filed, shah be as provided in A.R.S. Sections 42-115 and 42-129. (b) (Reserved) (c) (Reserved) / (d) (Reserved) (e) (Reserved) (f) The denial of a refund by the Tax Collector is subject to the provisions of A.R.S. Section 42-130. -38- (g) Any refund paid under the provisions of this Section shall be paid from 1 the Privilege Tax revenue accounts. Sec. SA-565. Payment of tax to the incorrect Arizona city or town. (a) When it is determined that taxes have been reported and paid to the wrong Arizona city or town, a refund or assessment shall be made to the correct city or town. The refund or assessment period shall be limited to the forty-eight (48) month period prior to the date the City receives or gives written request of the taxes due. The City shall neither pay nor charge any interest or penalty on any overpayment or underpayment except such interest and penalty actually paid by the taxpayer relating to such tax. (b) The limitations and procedures set forth in A.R.S. Section 42-1452 shall apply to all payments under this Section. (c) When reference is made in this Section to an Arizona city or town, and payments made to or requested from such city or town, the provisions shall be applicable to the Arizona Department of Revenue when it is acting for or on behalf of an Arizona city or town. Sec. 8A-567. Allocation of tax on retail sales when more than one Arizona city or town has nexus. (a) In cases of retail sales where the tangible personal property sold was delivered from stock located at a point without the state of Arizona, the tax imposed upon the retail sale in question shall be shared equally between this City and the other city or town involved; provided that the tangible personal property is not "mobile equipment" and either: (I) transfer of title and possession occurred within the City, but the order was received at a permanent business location of the seller located in another Arizona city or town that imposes and equivalent excise tax upon the transaction; or (2) transfer of title and possession occurred in another Arizona city or town that imposes an equivalent excise tax upon the transaction, but the order was received at a permanent business location of the seller located within the City. (b) "Mobile Equipment," for the purposes of subsection (a) above, includes any automobile, bicycle, motorcycle, truck, aircraft, boat, tractor, forklift, or any other equipment that can move under its own power or is designed as a method of transportation. (c) "Shared Equally," for the purposes of subsection (a) above, shall mean: (1 in cases where tax was collected as a separate charge from the customer, that each city or town shall have the right to half of the actual tax collected, even if the rate at which such tax was collected differs from the appropriate tax rate of either city. (2) in cases where the tax was not separately charged to the customer but was reported and paid to one of the cities or towns in question, that each city or town shall have the right to half of the actual tax so paid, even if the rate at which such tax was reported and paid differs from the appropriate tax rate of either city. -39- r 1, (3) in all other cases, each city or town shall have the right to half of the tax liability on such a sale, to be determined by the tax rate of the city or town of the seller's permanent business location. (d) Claim, payment, and collection of taxes allocated between Arizona cities and towns by the provisions of this Section shall be made in the same manner as provided in Section SA-565 relating to tax paid to the incorrect city or town. Sec. SA-570. Administrative review; petition for hearing or for redetermination; hearing or redetermination; finality of order. (a) Closing agreements between the Tax Collector and a taxpayer have no force of law unless made in accordance with the provisions of A.R.S. Section 42-126. (b) Payment of tax under protest. Payment under protest of tax, penalty or interest due or assessed under this Chapter shall be deemed as normal, unprotested payment of such unless the provisions of A.R.S. Section 42-126 have been met. (c) Administrative review. (1) Petitions of appeal shall be made to, and hearings shall be conducted by, the Arizona Department of Revenue, in accordance .with the provisions of A.R.S. Section 42-122, as modified by ,. Section SA-571. (2) (Reserved) (3) (Reserved) (4) (Reserved) (5) Hearings shall be held by the Arizona Department of Revenue in accordance with the provisions of A.R.S. Section 42-122. The Department's decision may be appealed to the State Board of Tax Appeals, in accordance with the provisions of A.R.S. Section 42-124. (6) (Reserved) (7) , (Reserved) (d) (Reserved) (e) (Reserved) Sec. 8A-571. Jeopardy assessments. (a) If the Tax Collector believes that collection of any amounts imposed by this Chapter will be jeopardized by delay, he shall issue notice to the taxpayer in accordance with the provisions of A.R.S. Section 42-120. (b) In cases where such jeopardy notice has been issued, the taxpayer must meet the provisions of A.R.S. Section 42-120, concerning appeals of jeopardy assessments, before any request for administrative review shall be honored. Any bond or collateral that may be required shall meet the provisions of A.R.S. Section 42-112. l (c) (Reserved) (d) (Reserved) (e) (Reserved) -40- Sec. 8A-575. Judicial review. (a) Appeal of a State Board of Tax Appeals decision to the courts is valid only if all the provisions of A.R.S. Section 42-124 are met. (b) (Reserved) (c) (Reserved) (d) (Reserved) (e) The issuance of an adjusted or corrected assessment or notice of refund due to the taxpayer, where made by the Tax Collector pursuant to the decision of the Hearing Officer, shall not be deemed an acquiescence by the City or the Tax Collector in said decision, nor shalt it constitute a bar or estoppel to the institution of an action or counterclaim by the City to recover any amounts claimed to be due to it by virtue of the original assessment. (f) After the initiation of any action in the appropriate court by either party, the opposite party may file such counterclaim as would be allowed pursuant to the Arizona Rules of Civil Procedure. Sec. 8A-577. (Reserved) ,r Sec. 8A-580. Criminal penalties. (a) It is unlawful for any person to knowingly or willfully: (1) fail or refuse to make any return required by this Chapter. (2) fail to remit as and when due the full amount of any tax or additional tax or penalty and interest thereon. (3) make or cause to be made a false or fraudulent return. (4) make or cause to be made a false or fraudulent statement in a return, in written support of a return, or to demonstrate or support entitlement to a deduction, exclusion, or credit or to entitle the person to an allocation or apportionment or receipts subject to tax. (5) fail or refuse to permit any lawful examination of any book, account, record, or other memorandum by the Tax Collector. (6) fail or refuse to remit any tax collected by such person from his customer to the Tax Collector before the delinquency date next following such collection. (7) advertise or hold out to the public in any manner, directly or indirectly, that any tax imposed by this Chapter, as provided in this Chapter, is not considered as an element in the price to the consumer. (8) fail or refuse to obtain a Privilege License or to aid or abet another in any attempt to intentionally refuse to obtain such a license or evade the license fee. (9) reproduce, forge, falsify, fraudulently obtain or secure, or aid or abet another in any attempt to reproduce, forge, falsify, or fraudulently obtain or secure, an exemption from taxes imposed by this Chapter. (b) The violation of any provision of subsection (a) above shall constitute a Class One Misdemeanor. -41- (c) In addition to the foregoing penalties, any person who shall knowingly swear to or verify any false or fraudulent statement, with the intent aforesaid, shall be guilty of the offense of perjury and on conviction thereof shall be punished in the manner provided by law. Sec. SA-590. Civil actions. (a) Liens. (1) Any tax, penalty, or interest imposed under this Chapter which has become final, as provided in this Chapter, shall become a lien when the City perfects a notice and claim of lien setting forth the name of the taxpayer, the amount of the tax, penalty, and interest, the period or periods for which due, the date of accrual thereof and stating that the City claims a lien therefor. (2) The notice of claim of lien shall be signed by the Revenue Officer/City Clerk under his official seal or the official seal of the City, and, with respect to real property, shall be recorded in the office of the County Recorder of any county in which the taxpayer owns real property, and, with respect to personal property shall be filed in the office of the Secretary of State. After the notice and claim of lien is recorded or filed, the taxes, penalties, and interest in the amounts specified therein shall be a lien on all real property of the taxpayer located in such county where recorded, and all tangible personal property of the taxpayer within the State, superior to all other liens and assessments ,r recorded or filed subsequent to the recording or filing of the notice and claim of lien. (3) Every tax imposed by this Chapter, and all increases, interest, and penalties thereon, shall become from the time the same is due and payable a personal debt from the person liable to the City, but shall be payable to and recoverable by the Tax Collector and which may be collected in the manner set forth in subsection (b) below. (4) Any lien perfected pursuant to this Section shall, upon payment of the taxes, penalties, and interest affected thereby, be released by the Tax Collector in the' same manner as 'mortgages and judgments are released: The Tax Collector may, at his sole discretion, release a lien in part, that is, against only specified property, for partial payment of moneys due the City. (b) Actions to recover tax. The Arizona Department of Revenue, or any agent or representative authorized by that Department, may bring action, in the name of the City, to recover taxes as provided in A.R.S. Section 42-125. Sec. 8A-595. Collection of taxes when there is succession in and/or cessation of business. (a) In addition to any remedy provided elsewhere in this City Code that may apply, the Tax Collector may apply the provisions of subsections (b) through (d) below concerning the collection of taxes when there is succession in and/or cessation of business. a: -4 2- t (b) The taxes imposed by this Chapter are a lien on the property of any person subject to this Chapter who sells his business or stock of goods, or quits his business, if the person fails to make a final return and payment of the tax within fifteen (15) days after selling or quitting his business. (c) Any person who purchases, or who acquires by foreclosure, by sale under trust deed or warranty deed in Iieu of foreclosure, or by any other method, improved real property or a portion of improved real property for which the Privilege Tax imposed by this Chapter has not been paid shall be responsible for payment of such tax as a speculative builder or owner builder, as provided in Sections 8A-416 and 8A-417. (d) A person's successors or assignees shall withhold from the purchase money an amount sufficient to cover the taxes required to be paid, and interest or penalties due and payable, until the former owner produces a receipt from the Tax Collector showing that all City tax has been paid or a certificate stating that no amount is due as then shown by the records of the Tax Collector. (1) If a subsequent audit shows a deficiency arising before the sale of the business, the deficiency is an obligation of the seller and does not constitute a liability against a buyer who has received a certificate from the Tax Collector. (2) If the purchaser of a business or stock of goods fails to obtain a certificate as provided by this Section, he is personally liable for !' payment of the amount of taxes required to be paid by the former a owner on account of the business so purchased, with interest and penalties accrued by the former owner or assignees. -4 3- Article VI - (Reserved) Sec. 8A-600. (Reserved) Sec. 8A-610. (Reserved) Sec. 8A-620. (Reserved) Sec. 8A-630. (Reserved) Sec. BA-640. (Reserved) Sec. SA-650. (Reserved) Sec. 8A-660. (Reserved) -44- REGULATIONS - PRIVILEGE AND EXCISE TAXES Reg. SA-100.1. Brokers (a) For the purposes of proper administration of this Chapter and to prevent evasion of taxes imposed, brokers shall be wherever necessary treated as taxpayers for all purposes, and shall file a return and remit the tax imposed on the activity on behalf of the principal. No deduction shall be allowed for any commissions or fees retained by such broker, except as provided in Section 8A-405, relating to advertising commissions. (b) Brokers for vendors. A broker acting for a seller, lessor, or other similar person deriving gross income in a category upon which this Chapter imposes a tax shall be liable for such tax, even if his principal would not be subject to the tax if he conducted such activity in his own behalf, by reason of the activity being deemed a "casual' one. For example: (1) An auctioneer or other sales agent of tangible personal property is subject to the tax imposed upon retail sales, even if such sales would be deemed "casual" if his principal had sold such items himself. (2) A property manager is subject to the tax imposed upon rental, leasing, or licensing of real property, even if such rental, leasing, or licensing would be deemed "casual' if his principal managed such real property himself. (c) Brokers for vendees. A' broker acting solely for a buyer, lessee, tenant, or other similar person who is a party to a transaction which may be subject to the tax, shall be liable for such tax and for filing a return in connection with such tax only to the extent his principal is subject to the tax. (d) The liability of a broker does not relieve the principal of liability except upon presentation to the Tax Collector of proof of payment of the tax, and only to the extent of the correct payment. The broker shall be relieved of the responsibility to file and pay taxes upon the filing and correct payment of such taxes by the principal. Reg. 8A-100.2. Delivery, installation,'or other direct customer services. (a) "Delivery Charges" exist only when the total charges to the ultimate customer or consumer include, as separately charged to the ultimate customer, charges for delivery to the ultimate consumer, whether the place of delivery is within or without the City, and when the taxpayer's books and records show the separate delivery charges. (1) Identification to the customer or consumer that the listed price has "delivery included" or other similar expression is insufficient to show the delivery as a separate charge. Only the separately stated charge for the delivery shall be deemed a "delivery charge". (2) Freight in. Charges for delivery from place of production or the manufacturer to the vendor either directly or through a chain of wholesalers or jobbers or other middlemen are deemed "freight- in" and are not considered delivery. -R1- (b) "Installation", as used in this definition, relates only to tangible r personal property. Installation to real property is deemed construction contracting in this Chapter. Examples of installation relating to - tangible personal property are: installing a radio in an automobile; applying sun screens on the windows of a boat; installing cabinets, carpeting, or "built-in appliances" to a camper or motorized recreational vehicle. (c) Repair of tangible personal property is not included in this definition. See Regulation BA-465.1. (d) "Direct Customer Services" means services other than repair rendered directly to the customer. Services or labor provided by any person prior to the transfer of tangible personal property to the customer or consumer are not included in this definition. In the following examples, the requirements of subsection (e) below are referred to by the words "Identify" or "identification." (1) A retailer sells a customer a $100 "plug-in" appliance, with a $25 delivery and installation charge. If the retailer identifies the $25 delivery and installation charge, it is a charge for direct customer services. (2) A caterer charges his customer $1,000 for the food and drink served, $300 for setup and site cleanup, and $500 for bartender and waiters. If all charges are properly identified, only the $300 for set up and cleanup is a charge for direct customer services, and the $1,500 for food and service is restauranting gross income. (3) Persons engaged in engraving on wood, metal, stone, etc. or persons engaged in retouching photographs or paintings may consider such charges for labor as direct customer services. (4) All charges by- a photographer resulting in the sale of a photograph (sitting charges, developing, making enlargements, retouching, etc.) for services that occur prior to transfer of tangible personal property are not direct customer services. (5) An equipment rental company charging $25 for delivery may consider such delivery charge as a charge for direct customer service only if such charge is properly identified. (6) Even if identified, charges for labor incurred in the production of any manufactured article or of a custom-made article (jewelry, artwork, tailoring, draperies, etc,) are not included in this definition, as such labor occurs prior to the transfer of property. (e) Recordkee in, requirements. (1) �Any person who engages in transactions involving these services must: (A) Separately bill, invoice, or charge the customer for such services in a manner by which the customer or consumer may readily identify the specific dollar amount of the service charge; and (B) Maintain business books and records in a manner in which the separate charge for such services can be clearly identified, to the satisfaction of the Tax Collector. (2) Rendering a statement to a customer for a transaction involving / such services and the transfer of tangible personal property which only indicates the total amount of the charges with words such as "services included" or "charge includes labor and parts" or similar a expression does not satisfy the requirements of this subsection. -R2- Reg. 8A-100.3. Retailers. When in the opinion of the Tax Collector it is necessary for efficient administration of this Chapter, he may regard any salesman, representative, peddler, canvasser, or agent of any dealer, distributor, supervisor, or employer under whom he operates or from whom he obtains tangible personal property for sale, rental, lease, or license as a retailer for the purposes of this Chapter, irrespective of whether he is making sales, rentals, leases, or licenses on his own behalf or on behalf of others. The Tax Collector may also regard such dealer, distributor, supervisor, or employer as a retailer for the purposes of this Chapter. Reg. 8A-110.1. Income-producing capital equipment: in general. (a) The term "income-producing capital equipment" applies only when the purchaser or lessor is directly using, such equipment primarily for the purpose of directly producing income in his normal course of business. For example: (1) Rental of a printing press to a job printer would qualify. Rental of the same equipment to a trade school or an airline company would not qualify. (2) A lease of an electric generator rated at 75KV to an electric utility company or a manufacturer or job printer would qualify. The same lease to a telecommunications company or an irrigation district would not qualify. (b) Note the "two-pronged test" this definition requires: (1) the purchaser or lessor must be engaged in a business that directly uses the item to produce income; and 1 (2) the item is to be directly used in the production of income. Ancillary equipment for backup power, removal of wastes, storage, transport of materials, etc. do not qualify unless the definition allows it for that specific business activity. Reg. 8A-I 10.2. Income-producing capital equipment: manufacturing equipment; job printing equipment. (a) Manufacturing involves the change of tangible personal property into a new form of tangible personal property. This may involve activities often called "processing" or "fabricating", for example: making electronic parts in quantity, refining crude oil, pasteurizing milk, fabricating a mobile home, producing syrup for soft drinks from other ingredients. Therefore, there are four reasons why an activity is not considered manufacturing, as follows, with examples. (1) The activity is specifically defined elsewhere in this Chapter. For example: publishing; construction contracting; baking or cooking food (defined as restaurant activity). (2) The activity does not begin with a physical product ("raw materials"). For example: word processing; electronic data processing; photography; video or sound recording by a recording studio. (3) The activity does not physically change the raw materials into another form of tangible personal property. For example: sorting or "screening" sand, gravel, or rock; picking cotton; stuffing envelopes; chilling (but not freezing) water; cooling or heating air. -R3- (4) The "finished product" is.not tangible personal property available for sale. For example: broadcasting by radio or television waves; cooling or heating air; electronic data processing. (b) Manufacturing is limited to those activities involving the actual changing of tangible personal property into another form, and not to include any other activities of persons involved in the business of manufacturing. Therefore, (1) Items typically called "work in process" are often produced from "raw materials" or other "work in process" and then stockpiled until needed at a later stage in production (or perhaps sold in this form). For the purposes of this Chapter, the activity of manufacturing is deemed to cease when the last act of physically combining, separating, or otherwise changing of this "work in process" ceases, and does not resume until such "work in process" is again used in the production process as "raw material" for such process. (2) "In-line" inspection procedures (between the 5th and bth steps of an assembly process, for example) shall be deemed part of the activity of manufacturing, provided that the material so inspected is not physically removed from the location of the production process (removal to the Quality Assurance labs or the stockroom, for example, would be deemed to be removal from the physical location of the production process). Therefore, activities that occur in the Quality Assurance labs, stockroom, or other such locations are by definition not part of the activity of manufacturing. (3) Packaging shall be deemed part of the manufacturing activity if: (A) the packaging process is an integral part of the production - process, and W the goods so packaged have come directly from the production process (or from an "in-line" inspection as defined above). (4) Only "in-line" materials handling shall be deemed as part of the activity of manufacturing, in a manner similar to "in-line" inspection procedures. Therefore delivery or the moving of materials up to and including delivery to the first stage of the production process (or the first stage of separate phase of production, when in reference to "work in process") is not part of the manufacturing activity. In like manner, delivery to the stockroom, Quality 'Assurance labs, or other such place not deemed part of the production process, and that and all subsequent movement of such materials until they have once again entered the production process, are deemed not to be part of the activity of manufacturing. (c) The activity of job printing shall be determined in a manner similar to that provided above relating to "manufacturing". (d) The following items are specifically not included as machinery .or equipment which is acquired for use primarily during the activity of manufacturing or job printing: (1) equipment used primarily for the storage of materials when not 1 being physically changed (for example, storage vats or bins, holding tanks). (2) materials handling equipment (for example, dollies, fork lifts, hand trucks) not used directly "in-line". -R4- (3) ancillary testing equipment of all kinds (for example, testing equipment in the Quality Assurance area or in the stockroom). (4) ancillary packaging equipment of all kinds (for example, packaging equipment in the stockroom or mailroom). (5) ancillary equipment used for the treatment or removal of waste products of the activity (for example, air-scrubbing equipment, wastewater treatment equipment). (6) any structural changes to real property (for example, plumbing or electrical changes to a structure, loading docks). Reg. 8A-115.1. Computer hardware, software, and data services. (a) Definitions. (1) "Computer Hardware" (also called "computer equipment" or '"peripherals" is the components and accessories which constitute the physical computer assembly, including but not limited to: central processing unit, keyboard, console, monitor, memory unit, disk drive, tape drive or reader, terminal, printer, plotter, modem, document sorter, optical reader and/or digitizer, network. (2) "Computer Software" (also called "computer program") is tangible personal property, and includes: (A) "Operating Program (Software)" (also called "executive program (software)"), which is the programming system or technical language upon which or by means of which the basic operating procedures of the computer are recorded. The operating program serves as an interface with user applied programs and allows the user to access the 1 computer's processing capabilities. (3) "Applied Program (Software)", which is the programming system or technical language (including the tape, disk, cards, or other medium upon which such language or program is recorded) designed either for application in a specialized use, or upon which or by means of which a plan for the solution of a particular problem is based. Typically, applied programs can be transferred from one computer to another via storage media. Examples of applied programs include: payroll processing, general ledger, sales data, spreadsheet, word processing, and data management programs. (3) "Storage Medium" is any hard disk, compact disk, floppy disk, diskette, diskpack, magnetic tape, cards, or other medium used for storage of information in a form readable by a computer, but not including the memory of the computer itself. (4) A "Terminal Arrangement" (also called "'on-line' arrangement") is any agreement allowing access to a remote central processing unit through telecommunications via hardware. (5) A "Computer Services_ Agreement" (also called "data services agreement") is an agreement allowing access to a computer through a third-party operator. (b) For the purposes of this Chapter, transfer of title and possession of the following are deemed sales of tangible personal property and any other transfer of title, possession, or right to use for a consideration of the following is deemed rental, leasing, or licensing of tangible personal property: -R5- (1) Computer hardware or storage media. Rental, leasing, or licensing for use of computer hardware or storage media includes the lessee's use of such hardware or storage media on the lessor's ` premises. (2) Computer software which is not custom computer programming. Such prewritten ("canned") programs may be transferred to a customer in the form of punched cards, magnetic tape, or other storage medium, or by listing the program instructions on coding sheets. Transfer is deemed to have occurred whether title to the storage medium upon which the program is recorded, coded, or punched passes to the customer or the program is recorded, coded, or punched on storage medium furnished by the customer. Gross income from the transfer of such prewritten programs includes: (A) the entire amount charged to the customer for the sale, rental, lease, or license for use of the storage medium or coding sheets on which or into which the prewritten program has been recorded, coded, or punched. ($) the entire amount charged for the temporary transfer or possession of a prewritten program to be directly used or to be recorded, coded, or punched by the customer on the customer's premises. (C) license fees, royalty fees, or program design fees; any fee present or future, whether for a period of minimum use or of use for extended periods, relating to the use of a prewritten program. V the entire amount charged for transfer of a prewritten •r" ("canned") program by remote telecommunications from the i transferor's place of business to or through the customer's ` computer. (E) any charge .for the purchase of a maintenance contract which entitles the customer to receive storage media on which prewritten program improvements or error corrections have been recorded or to receive telephone or on-site consultation services, provided that: W if such maintenance contract is not optional with the customer, then the charges for the maintenance contract, including the consultation services, are deemed gross income from the transfer of the prewritten program. (ii) if such maintenance contract is optional with the customer but the customer does not have the option to purchase the consultation services separately from the storage media containing the improvements or error corrections, then the charges for the maintenance contract, including the consultation services, are deemed gross income from the transfer of the prewritten program. (iii) if such maintenance contract is optional with the customer and the customer may purchase the consultation services separately from the storage media containing the improvements or error corrections, then only the charges for such improvements or error corrections are deemed gross income from the transfer-of a prewritten program and charges for consultation are deemed to be charges for professional services. -R6- (c) Producing the following by means of computer hardware is deemed to be the activity of job printing for the purposes of this Chapter: (1) statistical reports, graphs, diagrams, microfilm, microfiche, i photorecordings, or any other information produced or compiled by a computer; except as provided in subsection (e) below. (2) additional copies of records, reports, manuals, tabulations, etc. "Additional Copies" are any copies in excess to those produced simultaneously with the production of the original and on the same printer, whether such copies are prepared by running the same program, by using multiple printers, by looping the program, by using different programs to produce the same output, or by other means. (d) Charges for the use of communications channel in conjunction with a terminal arrangement or data services agreement are deemed gross income from the activity of providing telecommunication services. (e) The following transactions are deemed direct customer services, provided that charges for such services are separately stated and maintained as provided by Regulation $A-100.2(e): (1) "Custom (Cam up ter) Programming", which is any computer software which is written or prepared for a single customer, including those services represented by separately stated charges for the modification of existing prewritten programs. (A) Customer computer programming is deemed a professional service regardless of the form in which the programming is transferred. (B) Custom programming includes such programming performed in connection with the sale, rental, lease, or license for use of computer hardware, provided that the charges for such are separately stated from the charges for the hardware. (C) Custom computer programming includes a program prepared to the special order of a customer who will use the program to produce copies of the program for sale, rental, lease, or license. The subsequent sale, rental, lease, or license of such a program is deemed the sale, rental, lease, or license of a prewritten program. (2) Training services related to computer hardware or software, provided further that: (A) the provider of such training services is deemed the ultimate consumer of all tangible personal property used in training others or provided to such trainees without separately itemized charge for the materials provided. (B) training deemed a direct customer service does not include: G) training materials, books, manuals, etc. furnished to customers for a charge separate from the charge for training services. (ii) training provided to customers without separate charge as part of the sale, rental, lease, or license of computer hardware or software, or as part of a terminal arrangement or data services agreement. (3) The use of computer time through the use of a terminal arrangement or a data service agreement, but not charges for computer hardware located at the customer's place of business (for example, the terminal, a printer attached to the terminal, a modem used to communicate with the remote central processing unit over a telephone line). -R7- (4) Compiling and producing, as part of a terminal arrangement or computer services agreement, original copies of statistical i reports, graphs, diagrams, microfilm, microfiche, photorecordings, or other information for the same person who supplied the raw data used to create such reports. (f) (Reserved) Reg. SA-120.1. (Reserved) Reg. SA-200.1. When refundable deposits are includable in gross income. Refundable deposits shall be includable as gross income of the taxpayer for the month in which received, and will be allowed as deductible refunds for the month in which actually paid back, unless the taxpayer; (1) maintains all such deposits in a separate investment account which is not subject to use or expenditure by the taxpayer; and (2) pays interest at at least one-half of one percent (1/2%) per month from the date of deposit to the depositor, payable upon refund which shall not be later than thirty (30) days subsequent to the return of the equipment or other end of period of possession involved; and (3) includes forfeited deposits in gross income at time of forfeiture. Reg. 8A-250.1. Excess tax collected. If a taxpayer collects taxes in excess of the combined tax from any customer in !' any transaction, all such excess tax shall be paid to the taxing jurisdictions in proportion to their effective rates. The right of the taxpayer to charge his customer for his own liability for tax does not allow the taxpayer to enrich himself at the cost of his customers. Reg. 8A-270.1. Proprietary activities of municipalities are not considered activities of a governmental entity. The following activities, when performed by a municipality, are considered to be activities of a person engaged in business for the purposes of this Chapter, and not excludable by reason of Section 8A-270: (a) rental, leasing, or licensing for use of real property to other than another department or agency of the municipality. M producing, providing, or furnishing electricity, electric lights, current, power, gas (natural or artificial), or water to consumers or ratepayers. (c) sale of tangible personal property to the public, when similar tangible personal property is available for sale by other persons, as, for example, at police or surplus auctions. -R8- Reg. SA-270.2. Proprietary clubs. (a) Equity requirements. In order to qualify for exclusion under Section BA-270, a proprietary club must actually be owned by the members. For the purposes of qualification, a club will be deemed to be member- owned if at least eighty-five percent (85%) of the equity of the total amount of club-owned property is owned by bona fide individual members whose membership is represented in the form of shares, certificates, bonds, or other indicia of capital interest. A corporation may be considered an individual owner provided that it owns a membership solely for the benefit of one or more of its employees and it is not engaged in any business activity connected with the operation of the club. (b) Gross revenue requirements. In computing gross revenue for the computation of this fifteen percent (I5%) rule of subsection SA- 270(c)(1), (1) the following shall be excluded: (A) membership dues. (B) membership fees which relate to the general admission to the club on a periodic (or perpetual) basis. (C) assessments. (D) special fund raising events, raffles, etc. (E) donations, gifts, or bequests. (F) gate receipts, admissions, and program advertising for not more than one tournament in any calendar year. (2) the following must be included: (A) green fees, court use fees, and similar charges for the actual use of a facility or part thereof. (B) pro shop sales if the shop is owned by the club. (C) golf cart rental if the carts are owned by the club. (D) rentals, percentages, or commissions received for permitting the use of the premises or any portion thereof by a caterer, concessionaire, professional, or any other person for sales, rental, leasing, licensing, catering, food or beverage service,,or instruction. (E) all receipts from food or beverage sales, room use or rental charge, corkage and catering charges, and similar receipts. (F) locker and locker room fees and attendants charges if paid to the club. (G) tournament entry fees other than entry fees for the one annual tournament exempt under subsection (b)(10) above. Reg. SA-300.1. Who must apply for a license. (a) For the purposes of determining whether a license is required under Section BA-300, a person shall be deemed to be "engaged in or continuing in business" within the City, if he meets any of the following conditions: (1) He is engaged in any activity subject to the City°s Privilege Taxes as principal or broker. -R9- 1 (2) He has or maintains within the City directly, or if a corporation by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this City under the authority of such person or if a corporation its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily or whether such person or subsidiary is authorized or licensed to do business in this State or this City. (3) He is soliciting sales, orders, contracts, leases, and other similar forms of business relationships, within the City from customers, consumers, or users located within the City, by means of salesmen, solicitors, agents, representatives, brokers, and other similar agents or by means of catalogs or other advertising, whether such orders are received or accepted within or without this City. (4) (Reserved) (5) He is required to report and pay the tax upon Rental Occupancy imposed by Section SA-440. (b) (Reserved) Reg. SA-350.1. Recordkeeping: income. The minimum records required for persons having gross income subject to, or exempt or excluded from, tax by this Chapter must show: (a) the gross income of the taxpayer attributable to any activity occurring in whole or in part in the City. (b) the gross income taxable under this Chapter, divided into categories as stated in the official City tax return. (c) the gross income subject to Arizona Transaction Privilege Taxes, divided into categories as stated in the official State tax return. (d) the gross income claimed to be exempt, and with respect to each activity or transaction so claimed: (1) if the transaction is claimed to be exempt as a sale for resale or as a sale, rental, lease, or license for use of rental equipment: (A) the City Privilege License number and State Transaction Privilege Tax License number of the customer (or the equivalent city, if applicable, and state tax numbers of the city and state where the customer resides), and (B) the name, business address, and business activity of the customer, and (C) evidence sufficient to persuade a reasonably prudent businessman that the transaction is believed to be in good faith a purchase for resale, or a purchase, rental, lease, or license for use of rental equipment, by the vendee in the ordinary and regular course of his business activity, as provided by Regulation. -R 10- (2) if the transaction is claimed to be exempt for any other reason: (A) the name, business address, and business activity of the customer, and (8) evidence which would establish the applicability of the exemption to a reasonably prudent businessman acting in good faith. Ordinary business documentation which would reasonably indicate the applicability of an exemption shall be sufficient to relieve the person on whom the tax would otherwise be imposed from liability therein, if he acts in good faith as provided by Regulation. (e) with respect to those allowed deductions or exclusions for tax collected or charges for delivery or other direct customer services, where applicable, evidence that the deductible income has been separately stated and shown on the records of the taxpayer and on invoices or receipts provided to the customer. All other deductions, exemptions, and exclusions shall-be separately shown and substantiated. (f) with respect to special classes and activities, such other books, records, and documentation as the Tax Collector, by regulation, shall deem necessary for specific classes of taxpayer by reason of the specialized business activity of any such class. (g) In all cases, the books and records of the taxpayer shall indicate both individual transaction amounts and totals for each reporting period for !" each category of taxable, exempt, and excluded income defined by this } Chapter. Reg. 8A-3S0.2. Recordkeeping: expenditures. The minimum records required for persons having expenditures, costs, purchases and rental or lease or license expenses subject to, or exempt or excluded from, tax by this Chapter are: (a) the total price of all goods acquired for use or storage in the City. (b) the date'of acquisition and the name and business address of the seller or lessor of all goods acquired for use or storage in the City. (c) documentation of taxes, freight, and direct customer service labor separately charged and paid for each purchase, rental, lease, or license. (d) the gross price of each acquisition claimed as exempt from tax, and with respect to each transaction so claimed, sufficient evidence to satisfy the Tax Collector that the exemption claimed is applicable. (e) as applicable to each taxpayer, documentation sufficient to the Tax Collector, so that he may ascertain: (1) all construction expenditures and all Privilege and Use Taxes claimed paid, relating to owner-builders and speculative builders. (2) disbursement of collected gratuities and related payroll information required of restaurants. (3) franchise and license fee payments and computations thereto which relate to: (A) utility service (8) telecommunication service. -RI I- (4) the validity of any claims of proof of exemption, as provided by Regulation. (5) a claimed alternative prior value for reconstruction. (6) (Reserved) (7) (Reserved) (8) payments of tax to the Arizona Department of Transportation and computations therefor, when a motor-vehicle transporter claims such the exemption, (9) payments by tenants subject to the tax upon Rental Occupancy imposed by Section 8A-444. (f) any additional documentation as the Tax Collector, by Regulation, shall deem necessary for any specific class of taxpayer by reason of the specialized business activity of specific exemptions afforded to that class of taxpayer. (g) In all cases, the books and records of the taxpayer shall indicate both individual transaction amounts and totals for each reporting period for each category of taxable, exempt, and excluded expenditures as defined by this Chapter. Reg. 8A-350.3. Recordkeeping: out-of-City and out-of-State sales. (a) Out-of-City Sales. Any person engaging or continuing in a business who claims out-of-City sales shall maintain and keep accounting records or .�" books indicating separately the gross income from the sales of tangible personal property from such out-of-City branches or locations. A (b) Out-of-State sales. Persons engaged in a business claiming out-of-State sales shall maintain accounting records or books indicating for each out-of-State sale the following documentation: (1) documentation of location of the buyer at the time of order placement; and (2) documentation of residency of the buyer, determined in the manner one determines if a person "resides within the City"; and (3) shipping, delivery, or freight documents showing where the buyer took delivery; and (4) documentation of intended location of use or storage of the tangible personal property sold to such buyer. Reg. 8A-360.1. Proof of exemption: sale for resale; sale, rental, lease, or license of rental equipment. A claim of purchase for resale or of purchase, rental, lease, or license for rent, lease, or license is valid only if the evidence is sufficient to persuade a reasonably prudent businessman that the particular item is being acquired for resale or for rental, lease, or license in the ordinary course of business. The fact that the acquiring person possesses a Privilege License number, and makes a verbal claim of "sale for resale or lease" or "lease for re-lease" does not meet this burden and is insufficient to justify an exemption. The "reasonable evidence" must be evidence which exists objectively, and not merely in the mind of the vendor, that the property being acquired is normally sold, rented, leased, or licensed by the acquiring person in the ordinary course of business. Failure to obtain such reasonable evidence at the tirne of the transaction will be a basis for disallowance of any claimed deduction on returns filed for such transactions. -R 12- Reg. 8A-360.2. Proof of exemption: exemption certificate. For the purpose of proof of exemption, in transactions other than those in which the proof is set by standard documentation as detailed in Regulations 8A-350.1 and 8A-360.1, the minimum acceptable proof and documentation for each transaction shall be the completion, at the time of the transaction, in all material respects, of a certificate containing all the information set forth below. For the purpose of validating the vendor's claim of exemption, such certificate is sufficient if executed by any person with apparent authority to act for the customer, and the information provided validates the claim. -R 13- r INVALID UNLESS COMPLETED IN FULL f VENDOR'S NAME Sales Invoice No. Customer's Exemption Claim City of Apache Junction Privilege License (Sales) Tax Customer's Business Name: Customer's Business Address: Specific Business Activity: (e.g., if retailer, lessor, or manufacturer, specify items leased, sold or made, i.e., cars, computers, clothes, etc.) Customer's License Nos. City: State: ITEMS CLAIMED AS EXEMPT FROM TAX : All Items on This Invoice or Purchase Order. or : Only Those Items marked with An "E". REASON FOR CLAIMED EXEMPTION: : The items claimed as exempt are sold, rented, leased, or licensed by the above named customer in the normal course of its business activity. or : The items claimed as exempt are exempt .from the City of Apache Junction Privilege Tax for the following specific reason(s): CUSTOMEPUS CERTIFICATE I certify that the above information is accurate to the best of my information and belief, and that I am authorized by the Customer above to acquire the items claimed as exempt on a tax-free basis on its behalf. I further understand that the making, of a false or fraudulent claim to obtain a tax exemption is a Class One Misdemeanor under City Code Section 8A-580. Name Date Title -R 14- Reg. 8A-405.1. Local advertising examples. r For the purposes of illustration only, and not by way of limitation, the following are provided as examples of local advertising subject to the tax: (1) retail sales and rental establishments doing business within the State when only one commonly designated business entity is identified by name in the advertisement. (2) financial institutions doing business within the State whether part of a national chain or local business only. (3) sales of real estate located within the State. (4) health care facilities located within the State. (5) hotels, motels, and apartments, whether a national chain or local so long as the advertisement identifies any location within the State. (b) brokers doing business within the State whether stockbrokers, real estate brokers, insurance brokers, etc. (7) nonprofit organizations, which even though tax exempt, have an office, whether national, local, or branch, within the State. (8) political activity, except United States Presidential and Vice Presidential candidates. (9) restaurants or food service establishments which have one or more branches, outlets, or franchises within the State even though the local franchisee or licensee may not be responsible for the placement of the advertisement. (10) services provided by individuals or entities within the State such as doctors, lawyers, architects, hairdressers, auto repair shops, counseling services, utilities, contractors, auction houses, etc. (11) coupons redeemable only at a single commonly designated business entity within the State. (12) theater, sports, and other entertainment events held at locations within the State. Reg. 8A-405.2. Advertising activity within the City. A person engaged in advertising activity shall be considered to be doing business entirety within the City if all or a major portion of the dissemination facilities such as broadcasting studios, printing plants, or distribution centers are located within the City limits. Billboard and other outdoor advertising companies shall be considered to be doing business within the City to the extent they have billboards or similar displays within the City. Remote studios patched to an in-City studio and subject to engineering modulation or control at the in-City studio are considered studios doing business in the City. Reg. 8A-415.1. Distinction between the categories of construction contracting. For the purposes of this Chapter, transactions involving improvements to, or sales of, real property are designated into one of the following categories, and these categorizations shall apply, whether or not a person designates himself as a contractor, construction manager, developer, or otherwise: (a) A person performing improvements to real property is one of the following: (1) an "Owner-Builder" when the work is performed by the owner or lessor or lessee-in-possession. An "owner-builder" may also be a "speculative builder". -1115- (2) a "Prime Contractor" when performing work for the owner or _ lessor or lessee-in-possession of the real property, unless that person has provided a written declaration stating that: l } (A) the owner-builder is improving the property for sale; and (B) the owner-builder is liable for the tax for such construction contracting activity; and (C) the owner-builder has provided the contractor both his Arizona Transaction Privilege Tax License number and his City Privilege License number. (3) a "Subcontractor" when performing work for either: (A) a construction contractor who has provided the subcontractor with a written declaration that he is liable for the tax for the project and has provided the subcontractor both his Arizona Transaction Privilege License number and his City Privilege License number. (B) an owner-builder who has provided the subcontractor with a written declaration as provided in subsections (a)(2)(A) through (a)(2)(C) above. (b) An owner or lessor ("owner-builder") of improved real property is one of the following: (1) a "Speculative Builder" if he sells such property within twenty- four (24) months after the improvement is "substantially completed". (2) an 'owner builder who is not a speculative builder" in all other cases. (c) The terms "owner", "lessor", and "lessee-in-possession" shall be deemed to include any authorized agent for such person. Reg. SA-415.2. Distinction between.construction contracting and certain related activities. (a) Certain rentals, leases, and licenses for use in connection with construction contracting. Rental, leasing, or licensing of earthmoving equipment with an operator shall be deemed construction contracting activity. Rental, leasing, or licensing of any other tangible personal property (with or without an operator) or of earthmoving equipment without `an operator shall be deemed rental, leasing, or licensing of tangible personal property.. For example: (1) Rental of a backhoe,'bulldozer, or similar earthmoving equipment with operator is construction contracting. Rental of these items without an operator is rental of tangible personal property. (2) Rental of scaffolding, temporary fences, or barricades is rental of tangible personal property. (3) Rental of pumps or cranes is rental of tangible personal property, whether or not an operator is provided with the equipment rented. (b) Distinction between construction contracting, retail, and certain direct customer service activities. ! When an item is attached or installed on real property, it is ' a construction contrasting activity and any subsequent repair, removal, or replacement of that item is construction contracting. (2) ' Items attached or installed on tangible personal property are retail sales. -R16- (3) Transactions where no tangible personal property is attached or installed are considered direct customer service activities (for example: carpet cleaning, lawn mowing, landscaping maintenance). (4) Demolition, earth moving, and wrecking activities are considered construction contracting. (c) Prefabricated buildings; manufactured housing. I Any prefabricated building or manufactured housing with respect to which an affidavit of affixture has been recorded pursuant to A.R.S. Section 42-641.01 shall be deemed an improvement of real property, and any improvement or alteration of such prefabricated building or manufactured housing shall be deemed construction contracting activity. (2) Any prefabricated building or manufactured housing with respect to which an affidavit of affixture has not been recorded shall be deemed tangible personal property for all purposes of this Chapter. - (3) A I'mobile home" shall qualify for this definition only to the extent that such affidavit of affixture has been recorded at the time of sale. (d) Sale of consumable goods incorporated into or applied to real property is considered a retail sale and not construction contracting. Examples of consumable goods are lubricants, faucet washers, and air conditioning coolant, but not paint. (e) Installation or removal of tangible personal property which has independent functional utility is considered a retail activity. ! "Tangible personal property which has independent functional utility" must be able to substantially perform its function(s) without attachment to real property. "Attachment to real property" must include more than connection to water, power, gas, communication, or other service. (2) Examples of tangible personal property which has independent functional utility include artwork, furnishings, "plug-in" kitchen equipment, or similar items installed by bolts or similar fastenings. (3) Examples of tangible 'personal property which does not have independent functional utility include wall-to-wall carpeting, flooring, wallpaper, kitchen cabinets, or "built-in" dishwashers or ranges. (4) The installation of window coverings (drapes, mini-blinds, etc.) is always a retail activity. Reg. SA--416.1. Speculative builders: homeowner's bona fide non-business sale of a family residence. (a) A sale of real property which has been improved within twenty-four (24) months prior to the sale shall be considered a "homeowner's bona fide non-business sale" and not subject to the tax on speculative builders if: (1) the property was actually used as the principal place of family residence or vacation residence by the immediate family of the seller for the six (6) months next prior to the offer for sale; and -R17- (2) the seller has not sold more than two (2) such residences (or, if the residence is a vacation residence, two (2) such vacation residences) within the thirty-six (36) months immediately prior to ! 1 the offer for sale; and (3) the seller has not licensed, leased, or rented the sold premises for any period within the twenty-four (24) month period prior to the offer for sale. (b) In the event that a homeowner of a family residence contracts with a licensed construction contractor for improvements to a residence, all construction contractors shall be considered prime contractors for the imposition of the tax. Construction contracting on a family residence shall be presumed to be for an owner's bona fide non-business purpose and all construction contractors shall be required to report and pay the tax imposed on all such improvements. (c) Purchases by a homeowner of tangible personal property for inclusion in any construction, alteration, or repair of his residence shall be subject to tax as retail-sales to the ultimate consumer. (d) "Owner" and "Homeowner" as used in this Regulation shall only mean an individual, and no other entity, association, or representative shall qualify; except that an administrator, executor, personal representative, or guardian in guardianship or probate proceedings, for the estate of a deceased or incompetent person or a minor, may claim "homeowner" status for such person if such person would have otherwise qualified with respect to the specific property involved. Reg. 8A-416.2. Reconstruction contracting. (a) "Reconstruction (of Real Property)" shall mean the subdividing of real property and, in addition, all construction contracting activities performed upon said real property; provided, however, that each of the following conditions are met: (1) a structure existed on said real property prior to the reconstruction activity; and (2) the "prior value" of said structure exceeds fifteen percent (15%) of the "prior value" of the integrated property (land, improvements, and structure); and (3) the. total cost of all construction contracting activities performed on said real property in the twenty-four (24) month period prior to the sale of any part,of the real property exceeds fifteen percent (15%) of the "prior value" of the real property; and (4) the structure which existed on the real property prior to the reconstruction activity still exists in some form upon the property, and is included, in whole or in part, in the property sold. (b) Except as provided in subsection (c) below, "prior value" means the value of the total integrated property, with improvements, as existing immediately prior to any reconstruction activity. Such value shall be the full cash value of the property for secondary taxes as determined by the County Assessor, as such statement of value includes both the land and improvements, without any deduction or diminution. The value shall be as set in the year which is immediately preceding the year in which the reconstruction improvements are or could have been included in the County Assessor's valuation. If the County Assessor's valuation is -- contested or appealed, the final determination at either the ` administrative or judicial level shall apply, -R18- (c) "Alternative Prior Value" shall mean that as an alternative to the "prior value" defined above, the taxpayer may use his actual cost of the reconstructed property prior to reconstruction, provided that evidence of such cost is presented to the Tax Collector and is determined by the Tax Collector, in his sole discretion, to be satisfactory. Such evidence shall consist, as a minimum, of proof of the actual, arms-length acquisition price, accompanied by a full appraisal of all property involved which appraisal shall have been performed by a real estate broker or MAI appraiser specifically for the purpose of assisting in the acquisition and further shall have been performed on behalf of the seller or a lending institution which has lent at least sixty-five (65%) percent of the acquisition price. (Only long term lending - not interim or construction financing will be considered.) This alternative value shall be used only if the property was acquired by the reconstruction taxpayer not more than thirty-six (36) months prior to a "sale" as defined below. (d) A "sale" for the purpose of determining "alternative prior value" or "reconstruction" only shall be deemed to have occurred as of the date of the execution of a contract of sale or a deed (joint tenancy or warranty) whichever is earlier, to a purchaser or grantee of any single residential or other occupancy unit. In addition to the foregoing, a lease with option to purchase a single residential unit shall be considered a "sale" at the date of execution of such lease if said option is exercisable by the lessee in not later than nine (9) months. Further in the case of cooperative apartments, the sale date shall be the date of execution of the contract selling (subject or not to encumbrances, liens +r` or security interests) of a share, or a sufficient number of shares which entitle the purchaser to the occupancy of a residential unit. In all cases a person shall include a husband and wife as a community, or any co- occupants of a single unit as joint tenants. Reg. 8A-425.1. Distinction between job printing and certain related activities. (a) Computerized Printing. Computerized versions of all items which would be taxable under Section SA-425 if . performed without computerized assistance are considered taxable under that Section, and therefore, are not exempt services. (b) Book publishing. The printing of books shall be deemed job printing. Sales of books shall be deemed retail sales. W Publication of newspapers, magazines, or other periodicals shall not be considered job printing for the purposes of this Chapter. Reg. 8A-435.1. Distinction between publishing of periodicals and certain related activities. (a) Book publishing shall not be considered publication of newspapers, magazines, or other periodicals for purposes of this Chapter. Sales of books shall be deemed retail sales. The printing of books shall be deemed job printing. (b) Publication of newspapers, magazines, or other periodicals shall not be considered job printing for the purposes of this Chapter. -R 19- Reg. 8A-445.I. (Reserved) Reg. 8A-445.2. Rental, leasing, and-licensing of real property as lodging: - refundable and non-refundable deposits. (a) Nonrefundable deposits for cleaning, keys, pet fees, maintenance, or for any other purpose are deemed gross income upon receipt. (b) "Security deposits" and other refundable deposits are deemed gross income at the tune such deposits become forfeit, provided that they are maintained in the manner required for security deposits by the Arizona Residential Landlord and Tenant Act, Chapter 10, Title 33, Arizona Revised Statutes. Failure to comply with such provisions with regard to refundable deposits makes such deposits gross income at the time of receipt. Reg. 8A-445.3. Rental, leasing, and licensing of real property as lodging: room and board; furnished lodging. (a) Room and board. (1) Rooming houses, lodges, or other establishments providing both lodging and meals, shall maintain a record of the separate charges made for the lodging and the meals.. (2) The charge for lodging shall be subject to the tax imposed by Section 8A-445. The charge for meals is subject to the tax upon restaurants and bars prescribed by Section 8A-455. +r" (b) Furnished lodging. A person who provides lodging with furnishings shall be deemed to be only in the business of rental, leasing, and licensing of lodging, and not in the business of rental, leasing, and licensing of such furnishings as tangible personal property, unless: (1) Any tenant of any lodging space may choose to rent, lease, or license such lodging space either furnished or unfurnished, and (2) The lessor separately charges tenants for lodging and for furnishings; and (3) The lessor separately maintains his gross income from lodging and from furnishings separately in his accounting .books and records. If all of the above conditions are met, such person shall report both sources of income separately to the City. Reg. 8A-447.1. (Reserved) Reg. 8A-450.1. Distinction between rental, leasing, and licensing for use of tangible personal property and certain related activities. (a) Certain rentals, teases, and licenses for use in connection with construction contracting. Rental, leasing, or licensing of earthmoving equipment with an operator shalt be deemed construction contracting activity. Rental, leasing, or licensing of any other tangible personal property (with or without an operator) or of earthmoving equipment without an operator shall be deemed rental, leasing, or licensing of tangible personal property. For example: i (1) Rental of a backhoe, bulldozer, or similar earthmoving equipment with operator is construction contracting. Rental of these items without an operator is rental of tangible personal property. -R20- (2) Rental of scaffolding, temporary fences, or barricades is rental of tangible personal property. (3) Rental of pumps or cranes is rental of tangible personal property, regardless of whether or not an operator is included with the equipment rented. (b) Distinction between equipment rental leasing, or licensing for use and transporting for hire. The hiring of mobile equipment cranes, airplanes, limousines, etc.) is considered rental, leasing, or licensing of tangible personal property whenever the charge is for a fixed sum or hourly rate. By comparison, the activity of a common carrier conveying goods or persons for a fee based upon distance, and not time, shall be considered transporting for hire. Reg. SA-450.2. Rental, leasing, and licensing for use of tangible personal property: membership fees; other charges. (a) Membership, admission, or other fees charged by any rental club or limited access lessor are considered part of taxable gross income. (b) Gross income from rental, teasing, or licensing for use of tangible personal property must include all charges by the lessor to the lessee for repair, maintenance, or other service upon the tangible personal property rented, leased, or licensed. (c) (Reserved) Reg. SA-450.3. Rental, leasing, and licensing for use of equipment with 1 operator. In cases where the tangible personal property is rented, teased, or licensed with an operator provided by the lessor, the charge for the operator shall not be includable in the gross income from the rental, lease, or license of such tangible personal property if the charge for the operator and the charge for the use of the equipment are separately itemized to the Iessee and separately maintained on the books and records of the lessor. Reg. 8A-450.4. Rental, leasing, and licensing for use of tangible personal property: semi-permanently or permanently installed' tangible personal property. (a) The term "semi-permanently or permanently installed" means that the item of tangible personal property has and is expected to have at the time of installation a permanent location at the site installed, as under a long-term lease agreement, except that the person using or applying said property may eventually replace it because it has become worn out or has become obsolete or the person ceases to have the right to possession of said property. (b) An item of tangible personal property-is deemed permanently installed if its installation requires alterations to the premises. (c) Examples of "semi-permanently or permanently installed tangible personal property" include, but are not limited to: computers, ? duplicating machines, furniture not of portable design, major appliances, store fixtures. -1R 21- (d) The term does not include mobile transportation equipment or tangible _ personal property designed for regular use at different locations or customarily used at different locations, as under numerous short-term rental, lease, or license agreements, whether or not such property is in fact so used. (1) For example, use of a mobile crane, trencher, automobile, or other similar equipment shall be considered a rental, lease, or license transaction subject to taxation only by the city or town in which such business office of the lessor is based. (2) Other similar examples include, but are not limited to: camping equipment, contracting equipment, chain saw, forklift, household items, invalid needs, janitorial equipment, reducing equipment, furniture of portable design, trucks or trailers, tools, towbars, sump pumps, arc welders. (e) A rental, lease, or license agreement which specifies that the item in question shall remain, under the terms of the agreement, located within the same city or town for more than one hundred eighty (180) consecutive days shall be sufficient evidence that such rented, leased, or licensed item is "permanently or semi-permanently installed" in said city or town, except when the item is mobile transportation equipment or one of the other types of portable equipment or property described in subsection (d) above. Reg. 8A-455.1. Gratuities related to restaurant activity. Gratuities charged by or collected by persons subject to the tax imposed by Section 8A-455 may be excluded from gross income if: (1) such charge is separately stated upon the bill, invoice, etc. provided the customer, and such amounts are maintained separately in the books and records of the taxpayer; and (2) such gratuities are distributed in total to employees of the taxpayer in addition to customary and regular wages. Reg. 8A-460.1. Distinction between retail sales and certain other transfers of tangible personal property. (a) Charges for transfer of tangible personal property included in the gross income of the business activity of persons engaged in the following business activities shall be deemed only as gross income from such business activity and not sales at retail taxed by Section 8A-460: (1) tangible personal property incorporated into real property as part of reconstruction or construction contracting, per Sections 8A- 415 through 8A-418. (2) Sales of feed at wholesale, per Section 8A-420. (3) job printing, per Section 8A-425. (4) mining, timbering, and other extraction, but not sales of sand, gravel, or rock extracted from the ground, per Section 8A-430. (5) publication of newspapers, magazines, and other periodicals, per Section 8A-435. (6) rental, leasing, and licensing of real or tangible personal property, per Sections 8A-445 or 8A-450. s (7) restaurants and bars, per Section 8A-455. (8) telecommunications services, per Section 8A-470. (9) utility services, per Section 8A-480. -1122- (b) Distinction between construction contracting, retail, and certain direct customer service activities. (1) When an item is attached or installed on real property, it is a construction contracting activity and any subsequent repair, removal, or replacement of that item is construction contracting. (2) Items attached or installed on tangible personal property are retail sales. (3) Transactions where no tangible personal property is attached or installed- are considered direct customer service activities (for example: carpet cleaning, lawn mowing, landscape maintenance). (4) Demolition, earth moving, and wrecking activities are considered construction contracting. (c) The sale of sand, rock, and gravel extracted from the ground shall be deemed a sale of tangible personal property and not mining or metallurgical activity. (d) Sale of consumable goods incorporated into or applied to real property is considered a retail sale and not construction contracting. Examples of consumable goods are lubricants, faucet washers, and air conditioning coolant, but not paint. (e) Installation or removal of tangible personal property which has independent functional utility is considered a retail activity. (1) "Tangible personal property which has independent functional utility" must be able to substantially perform its function(s) without attachment to real property. "Attachment to real property" must include more than connection to water, power, gas, communication, or other service. (2) Examples of tangible personal property which has independent functional utility include artwork, furnishings, "plug-in" kitchen equipment, or similar items installed by bolts or similar fastenings. (3) Examples of tangible personal property which does not have independent functional utility include wall-to-wall carpeting, flooring, wallpaper, kitchen cabinets, or "built-in" dishwashers or ranges.. (4) The installation of window coverings (drapes, mini-blinds, etc.) is always a retail activity. Reg. 8A-460.2. Retail sales: trading stamp company transactions. A trading stamp transaction is defined as follows: the trading stamp company issues stamps to a vendor; the vendor then provides them to its customers; and the customer then exchanges the stamps for merchandise from the trading stamp company. The exchange transaction for the merchandise shall be deemed a retail sale and the trading stamp company a retailer. All taxes imposed by this Chapter applicable to retail transactions are therefore applicable to such exchange transactions. The rate of tax shall be the retail rate based upon the retail dollar value of the redeemed merchandise as expressed in the redemption dollar value per book of stamps or portion thereof. The tax imposition described herein is in lieu of any Privilege or Use Tax upon the business of issuing stamps, redeeming the same, or using or storing property redeemed. -R23- Reg. SA-460.3. Retail sales: membership fees of retailers. Membership, admission, or other fees charged by limited access retailers are �- considered part of taxable gross income of the business activity of selling tangible personal property. Reg. SA-460.4. Retail sales: professional services. (a) "Professional Services" refer to services rendered by such persons as doctors, lawyers, accountants, architects, etc. for their customers or clients where the services meet particular needs of a specific client and only apply in the factual context of the client and the final product has no retail value in itself. For example, opinion letters, workpapers, reports, etc. are not in a form which would be subject to retail sales to customers. However, transfer of items in a form which would be subject to retail sales (e.g., artwork, forms, manuals, etc.) would not be considered professional services. The issue is one of fact which must be resolved in each situation. (b) Creative ("idea") labor and design labor that do not result in tangible personal property that will be or can be sold are deemed professional services and, if charged separately and maintained separately in the taxpayer's books and records, are not includable in gross income. (c) "Professional services" shall be deemed to include those items of tangible personal property which are incidental to the services rendered, provided such tangible personal property is "inconsequential." (1) Incidental transfers of tangible personal property shall be regarded as "inconsequential" if, (AT the purchase price of the tangible personal property to the person rendering the professional services represents less than fifteen percent (15%) of the charge, billing, or statement rendered to the purchaser in connection with the transaction, and (B) the tangible personal property transferred is not itself in a form which is subject to retail sale. (2) In cases where the tangible personal property transferred is deemed inconsequential_, the provider of the tangible personal property so transferred is deemed the ultimate consumer of such tangible personal property, and subject to all applicable taxes imposed by this Chapter upon such transfer. (d) Examples: (1) The transfer of paper embodying the result or work product of the services rendered by an attorney or certified public accountant is regarded as inconsequential to the charges for professional services. (2) An appraisal report issued by an appraiser, reflecting such appraiser's efforts to appraise real estate, is regarded inconsequential. -R24- (3) Use of a hair care product on a client's hair by a barber or beautician in connection with performing professional services is usually inconsequential. On the other hand, if the barber or i beautician supplies the customer with a bottle of the product for the client's use thereafter and without the professional's assistance, the transfer of the bottle of hair care product is deemed not inconsequential. (4) If a mortician properly segregates his professional services from other taxable activities on his bill (invoice, contract), his gross income would include only the income derived from the sale of tangible personal property (casket, cards, flowers, etc.) and rental, leasing, or licensing of real and tangible personal property. His charges for professional services (embalming, cosmetic work, etc.) would not be includable in gross income. Reg. SA-460.5. Retail sales: monetized bullion; numismatic value of coins. (a) "Monetized Bullion" means coins or other forms of money manufactured or minted from precious metals or other metals and issued as legal tender or a medium of exchange by or for any government authorized to do so. (b) Any coin shall be considered to have been transferred or acquired primarily for its "Numismatic value" if the sale or acquisition price: (1) is equal to or greater than twice (2 times) the value of the metallic content of the coin as of the date of transfer or acquisition; and (2) is equal to or greater than twice (2 times) its face value, in the case of a coin which, at the time of transfer or acquisition, was legal tender or a medium of exchange of the government issuing or authorizing its issuance. Reg. 8A-460.6. Retail sales: consignment sales. Sales of merchandise acquired on consignment are taxable as retail sales. In cases where the merchant is acting as an agent on behalf of another dealer, sales of the consigned merchandise are taxable to the principal, provided.the merchant makes full disclosure to customers that he is acting only as an agent for the named principal. However; when the principal'is not deemed to be a dealer, such sales are considered to be those of the merchant and are taxable to him. -R25- Reg. 8A-465.1. Retail sales: repair services. (a) Fair market value of parts and labor charges. The Tax Collector may examine the reporting of a transactions covered by this Section to determine if an "arms-length" price is charged for the parts and materials. The applicable tax may not be avoided by pricing a part, which ordinarily sells to the customer at $10, at $5 and including the difference as "service" or "labor". In the absence of satisfactory evidence supplied by the taxpayer as to industry or business practice, the Tax Collector may use the cost of the part or materials to the taxpayer marked up by a reasonable profit, to estimate the gross income subject to tax. (b) (Reserved) (1) (Reserved) (2) (Reserved) Reg. 8A-465.2. (Reserved) Reg. 8A-465.3. Retail sales: sale of containers, paper products, and labels. (a) The sale of a "primary container" to a retailer or manufacturer is exempt. "Primary Container" means packaging material or a container such as a bottle, can, cup, bag, box, etc., which contains personal property prior to such property's sale and which is necessarily transferred with the tangible personal property it contains at the time of sale. Examples of such exempt primary containers include but are not limited to: (1) packaging materials sold to a manufacturer of video equipment for containment of the product during shipment. (2) cellophane-type wrap sold to a meat department or butcher for containment of the individually wrapped or contained meat. (3) bags used to contain loose fungible goods such as fruits, vegetables, and other products sold in bulk, where such bags or containers are necessary to contain and measure the amount purchased by the customer. (b) Sales of containers other than primary containers as defined above, are not exempt and are thus subject to tax. Examples of such taxable containers include but not limited to: (1) shopping bags sold to grocery stores, department stores, or other retailers. (2) gift wrapping and gift boxes provided to the customer without charge. (3) paper bags and similar containers sold to restaurants for containment of individually wrapped or contained food for consumption off the premises (including food which was originally sold for consumption on the premises but a portion of which is removed thereafter). (c) Where a retailer imposes a charge for gift wrapping and the charge includes the container, paper, and other appropriate materials, the wrapping charge shall be considered a direct customer service and not a sale. Such gif t paper, boxes, tissue paper, ribbons, etc., shall be subject to tax when sold to the retailer. -R26- (d) Restaurants are not retailers, and are taxed under Section 8A-455. Paper (and similar products, such as plastic or styrofoam) cups, lids, plates, bags, napkins, straws, knives, forks, etc., sold to restaurants and others taxable under Section 8A-455 are taxable to the purchaser at the time of purchase as products consumed by the business, (e) Charges for returnable containers, where the charges are imposed on the customer, are subject to tax at the time of the transaction. A credit may be taken for the amount of refund after such refund is made. (f) The sale of labels to a purchaser who affixes them to a primary container is a sale for resale and not taxable. Directional or instructional material included with products sold are considered to be part of the product and a sale for resale. However, the sale of items such as price tags, shipping tags, and advertising matter delivered to the customer in connection with the retail sale is taxable to the retailer as a retail sale to it, and is not exempt as a sale for resale. Reg. SA-465.4. (Reserved) Reg. 8A-470.1. Telecommunication services. (a) Gross income from the business activity of providing telecommunication services to consumers within this City shall not include: (1) charges for installation, maintenance, and repair of telecommunication equipment which are subject to the provisions of Sections 8A-415, SA-416, or 8A-417 (construction contracting); 8A-445 (real property rental); 8A-450 (tangible personal property rental); or 8A-460 (retail sales); depending upon the nature of the work performed. (2) separately billed advertising charges which are subject to the provisions of Section 8A-405 or 8A-435. (b) Mobile equipment. In cases where the customer is being provided telecommunication services to , receiving/transmission equipment designed to be mobile in nature (for example, .mobile telephones, portable"hand-held two-way radios, paging devices, etc.), the provider shall, for the purposes of .the tax imposed by this Section, determine whether such provider's customers are "within this City" as follows: (1) by the billing address of the customer, provided that such address is a permanent residence or business location of the consumer within the State, (2) in all other cases, the business location of the telecommunications provider. Reg. 8A-475.1. Distinction between transporting for hire and certain related activities. The hiring of mobile equipment (cranes, airplanes, limousines, etc.) is deemed rental, leasing, or licensing for use of tangible personal property whenever the charge is for a fixed sum or hourly rate. By comparison, the activity of a common carrier conveying goods or persons for a fee based upon distance, and not time, 1 shall be considered transporting for hire. -R27- Reg. 8A-52Q.1. (Reserved) Reg. 8A-520.2. Change of method of reporting. (a) Any taxpayer electing to change his reporting method shall be permitted to do so only upon filing a written request to the Tax Collector and after receiving written approval of the Tax Collector. The approval shall state the effective date of the change, (b) The Tax Collector may postpone such approval to allow for examination of the records of the taxpayer and may further require that all tax liability be satisfied up to the effective date of the change. (c) Failure of the taxpayer to notify the Tax Collector and await approval before changing the method of reporting will subject the taxpayer to interest and penalties if his original method of reporting would produce higher taxes due the City. When a person makes such change without the consent of the Tax Collector, the Tax Collector may audit his books and records to verify the tax liability as of the date of the change. (d) Any taxpayer who has failed to indicate a choice of reporting method upon the application for a Privilege License shall be deemed to have chosen the accrual method of reporting. Reg. 8A-555.1. (Reserved) Reg. 8A-571.1. Collection of tax in jeopardy. Evidence that collection of tax due is in jeopardy shall include documentation that: (a) the taxpayer is going out of business. (b) the taxpayer has no City Privilege License or has no permanent business location in the State. (c) the taxpayer has failed to timely pay any tax (or penalties and interest thereon) due to the City on three (3) or more occasions within the previous thirty-six (36) calendar months. (d) the taxpayer has remitted payment by check, which has been dishonored. (e) the taxpayer has failed to comply with a formal written request of the Tax Collector made pursuant to Regulation 8A-555.I. -R28- City of Apache Junction, Arizona Meeting location City Council Chambers at City Hail Agenda 300 E Superstition Blvd Apache Junction.AZ City Council Work Session 85119 apacheiunctionaz gov Ph (480)982-8002 Doors are open to the public at least 15 minutes prior to the posted meeting start time. Monday, May 18,2026 7:00 PM City Council Chambers A. CALL TO ORDER B. ROLL CALL C. AGENDA ITEMS 1. 26-217 Presentation and discussion of Resolution No 26-05, a Federally Patented Easement(FPE) Extinguishment of Roosevelt Street (alignment)from Wickiup Road to Chaparral Road for purpose of future development. � �� Sponsors: Raquel Schatz Attachments: Resolution No.2&05 Council Memo 2026 05 18 Resolution No.26-05 Resolution No 26-05 Presentation 2026.05.18 2. 26-218 Presentation and discussion of Resolution No. 26-10, a Federally Patented Easement (FPE) Extinguishment of Solana Road (alignment) from 14th Avenue to 13th Avenue for purpose of future development. x Sponsors: Raquel Schatz Attachments: Resolution No 26-10 Council Memo 2026 05.18 Resolution No.26-10 Resolution No 26-10 Presentation 2026.05 18 3. 26-238 Presentation and discussion on the First Amendment to the Community Maintenance Agreement between the City of Apache C ,f- Junction, Brookfield ASLD 8500 LLC, and Blossom Rock Community Alliance, Inc. to add additional public park space and streets eZ� Sponsors: Liz Langenbach Attachments: Staff Memo--First Amerdment BR Maintenance Agreement 2023 Executed Maintenance Agreement Blossom Rock Commi. 2026 First Amendment Blossom Rock Community Alliance Presentation-BR Maintenance Agreement Amendment City of Apache Junction,Arizona Page 1 Printed on 5/14/2026 City Council Work Session Agenda May 18,2026 4. 26-165 Presentation and discussion on livestock feed as part of the Model City Tax Code (MCTC). �l Attachments: Memo to Dtv Council Livestock Feed \" Ordinance No C4 9 1-1987 Minutes Ordinance No 588 D. ADJOURNMENT Copies of this agenda and additional information on any of the items listed above may be obtained from the City Clerk's office located at 300 E Superstition Blvd,Apache Junction,AZ 85119, Monday through Thursday from 7;00a-6:00p, excluding holidays. The City of Apache Junction invites and welcomes people of all abilities to use our programs,sites and facilities.Specific requests may be made by contacting the Human Resources Office at(480)474-2617 or TDD(480)983-0095, The Apache Junction City Council may vote to go into Executive Session for legal advice on any item listed on this agenda pursuant to A.R.S.§38-431.03(A)(3);this notice is given pursuant to A.R.S. § 38-431.02 to the members of the City Council and the public. City of Apache Junction,Arizona Page 2 Printed on 511412026 CITY OF APACHE JUNCTION f Mayor's Script Work Session Monday, May 18, 2026 A. CALL TO ORDER I would like to call this City of Apache Junction Work Session of May 18, 2026, to order and ask everyone to put their cell phones on silent. B. ROLL CALL Roll Call C. AGENDA ITEMS 1. Presentation and discussion on Resolution No. 26-05. NO MOTION Raquel to report 2. Presentation and discussion on Resolution No. 26-10. NO MOTION Raquel to report 3. Presentation and discussion on the first amendment to the Community Maintenance Agreement. NO MOTION Liz to report 4. Presentation and discussion on livestock feed. NO MOTION D. ADJOURNMENT— I adjourn this meeting. CITY COUNCIL MEETING ROLL CALL Date: M ON I1b Z�Z�cQ Regular eclat xec Work S�'40 :7 Q S: E:-j: S1 W:,: rn CITY COUNCIL: Present Ab/excused Pre P,7 Ab/excused N,eseet Ab/excused MAYOR W I LSO N VICE MAYOR SCHROEDER COUNCILMEMBER CROSS COUNCILMEMBER HECK V COUNCILMEMBER JOHNSON COUNCILMEMBER NESSER COUNCILMEMBER SOLLER TOTAL "L ca� Res Work Additional City Staff: CITY STAFF: Exec City Manager Bryant Powell X "A Assistant City Manager Matt Busby Econ Director Ryan Kaup rax, Mrkt Comm Director Kayla Fulmer Management Analyst Rob Wisler VY — Q City Clerk Evie McKinney Deputy City Clerk Amy Greening -- �LA i CA—�C d City Attorney Joel Stern 0 Public Safety Director Michael Pooley Public Safety Assistant Johnny John 1'YL I U I vari Dev Services Director Rudy Esquivias mf\w Dev Sery Deputy Dir Sidney Urias Jured Building Safety Mgr Adrian Alegria Imp, IT Director Doug Wirthgen 64^4no *io Planner Erica Hernandez �-Afm Planner Nick Leftwich PW/Water Director Mike Loggins 17� Invocation: City Engineer Emile Schmid Pledge: ri�Url PW Project Engineer Raquel Schatz X Municipal Judge Thomas McDermott Finance Director Angelie Hawley Library Director Pam Harrison Park&Rec Director Liz Langenbach y- x HR D,irector Anna McCray Ct S:\-i emplptess& Forms\City Council\Roil Call-City Council-Attendance -WS, ES and Rear Me JD Et,