HB 2704 — tax; distribution; county stadium district

2704 (g) Job printing classification.

(h) Prime contracting classification.

(i) Amusement classification.

(j) Restaurant classification.

(k) Personal property rental classification.

(l) Retail classification and amounts equal to retail transaction privilege tax due pursuant to section 42-5008.01.

2.

Five and one-half percent of the tax base as computed for the business of every person engaging or continuing in this state in:

(a) The transient lodging classification described in section 42-5070.

(b) The online lodging marketplace classification described in section 42-5076 who has entered into an agreement with the department to register for, or has otherwise obtained from the department, a license to collect tax pursuant to section 42-5005, subsection L.

3.

Three and one-eighth percent of the tax base as computed for the business of every person engaging or continuing in this state in the mining classification described in section 42-5072.

4.

Zero percent of the tax base as computed for the business of every person engaging or continuing in this state in the commercial lease classification described in section 42-5069.

B.

Except as provided by subsection SUBSECTIONS J AND K of this section, twenty percent of the tax revenues collected at the rate prescribed by subsection A, paragraph 1 of this section from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (a) through (h) of this section is designated as distribution base for THE purposes of section 42-5029.

C.

EXCEPT AS PROVIDED BY SUBSECTION K OF THIS SECTION, forty percent of the tax revenues collected at the rate prescribed by subsection A, paragraph 1 of this section from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (i) through (l) of this section is designated as distribution base for THE purposes of section 42-5029.

D.

Thirty-two percent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 3 of this section is designated as distribution base for THE purposes of section 42-5029.

E.

Fifty-three and one-third percent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 4 of this section is designated as distribution base for THE purposes of section 42-5029.

F.

Fifty percent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 2 of this section is designated as distribution base for THE purposes of section 42-5029.

- 12 - H.B.

2704 G.

In addition to the rates prescribed by subsection A of this section, if approved by the qualified electors voting at a statewide general election, an additional rate increment is imposed and shall be collected through June 30, 2021.

The taxpayer shall pay taxes pursuant to this subsection at the same time and in the same manner as under subsection A of this section.

The department shall separately account for the revenues collected with respect to the rates imposed pursuant to this subsection and the state treasurer shall distribute all of those revenues in the manner prescribed by section 42-5029, subsection E.

The rates imposed pursuant to this subsection shall not be considered local revenues for purposes of article IX, section 21, Constitution of Arizona.

The additional tax rate increment is levied at the rate of six-tenths of one per cent of the tax base of every person engaging or continuing in this state in a business classification listed in subsection A, paragraph 1 of this section.

H.

Any increase in the rate of tax that is imposed by this chapter and that is enacted by the legislature or by a vote of the people does not apply with respect to contracts entered into by prime contractors or pursuant to written bids made by prime contractors on or before the effective date of the legislation or the date of the election enacting the increase.

To qualify for the exemption under this subsection, the prime contractor must maintain sufficient documentation, in a manner and form prescribed by the department, to verify the date of the contract or written bid.

I.

For taxpayers THAT ARE taxable under this chapter other than prime contractors taxable pursuant to section 42-5075:

1.

Any increase in the rate of tax that is levied by this article or article 2 of this chapter enacted by the legislature or by a vote of the people does not apply for a period of one hundred twenty days from AFTER the date of the tax rate increase to the gross proceeds of sales or gross income from the business of the taxpayer with respect to written contracts entered into before the effective date of the tax rate increase unless the taxpayer has entered into a contract that contains a provision that entitles the taxpayer to recover from the purchaser the amount of the additional tax levied.

2.

The provisions of this subsection apply without regard to the accounting method used by the taxpayer to report the taxes imposed under article 2 of this chapter.

3.

The provisions of this subsection shall not be considered in determining the rate of tax imposed under chapter 6, article 3 of this title.

J.

Zero percent of the tax revenues that are collected at the rate prescribed by subsection A, paragraph 1 of this section from persons on account of engaging in business under the business classification listed in subsection A, paragraph 1, subdivision (h) of this section, and that - 13 - H.B.

2704 are subject to any distribution required by section 42-5032.02, is designated as distribution base for the purposes of section 42-5029 until the total amount subject to distribution pursuant to section 42-5032.02 has reached the maximum amount prescribed by section 42-5032.02, subsection C.

Thereafter, twenty percent of the remaining tax revenues is designated as distribution base for the purposes of section 42-5029 as provided by subsection B of this section.

K.

SUBJECT TO SECTION 48-4238, BEGINNING ON THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION THROUGH DECEMBER 31, 2055, ZERO PERCENT OF THE TAX REVENUES THAT ARE COLLECTED AT THE RATE PRESCRIBED BY SUBSECTION A, PARAGRAPH 1 OF THIS SECTION FROM PERSONS ENGAGING IN BUSINESS UNDER THE BUSINESS CLASSIFICATIONS LISTED IN SUBSECTION A, PARAGRAPH 1, SUBDIVISIONS (h), (i), (j) AND (l) OF THIS SECTION AND THAT ARE SUBJECT TO TRANSMITTAL REQUIRED BY SECTION 42-5032.03 IS DESIGNATED AS DISTRIBUTION BASE FOR THE PURPOSES OF SECTION 42-5029.

BEGINNING JANUARY 1, 2056, TWENTY PERCENT OF THE REMAINING TAX REVENUES COLLECTED AT THE RATE PRESCRIBED BY SUBSECTION A, PARAGRAPH 1 OF THIS SECTION FROM PERSONS ENGAGING IN BUSINESS UNDER THE BUSINESS CLASSIFICATION LISTED IN SUBSECTION A, PARAGRAPH 1, SUBDIVISION (h) OF THIS SECTION IS DESIGNATED AS DISTRIBUTION BASE FOR THE PURPOSES OF SECTION 42-5029 AS PROVIDED BY SUBSECTION B OF THIS SECTION AND FORTY PERCENT OF THE REMAINING TAX REVENUES COLLECTED AT THE RATE PRESCRIBED BY SUBSECTION A, PARAGRAPH 1 OF THIS SECTION FROM PERSONS ENGAGING IN BUSINESS UNDER THE BUSINESS CLASSIFICATIONS LISTED IN SUBSECTION A, PARAGRAPH 1, SUBDIVISIONS (i), (j) AND (l) OF THIS SECTION IS DESIGNATED AS DISTRIBUTION BASE FOR THE PURPOSES OF SECTION 42-5029 AS PROVIDED BY SUBSECTION C OF THIS SECTION.

Sec.

6.

-6. 11 - H.B.

2704 6.

B.- 14 - H.B.

2704 B.

(i) The proportion that the assessed valuation used to determine secondary property taxes of each county, after deducting that part of the assessed valuation that is exempt from taxation at the beginning of the month for which the amount is to be paid, bears to the total assessed valuations used to determine secondary property taxes of all the counties after deducting that portion of the assessed valuations that is exempt from taxation at the beginning of the month for which the amount is to be -paid. 12 - H.B.

2704Property paid.of a city or town that is not within or contiguous to the municipal corporate boundaries and from which water is or may be withdrawn - 15 - H.B.

Property2704 of a city or town that is not within or contiguous to the municipal corporate boundaries and from which water is or may be withdrawn or diverted and transported for use on other property is considered to be taxable property in the county for purposes of determining assessed valuation in the county under this item.

-1. 13 - H.B.

2704If 1.there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 7, each month one-twelfth of the amount that is necessary to pay the fiscal year's debt service on - 16 - H.B.

If2704 there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 7, each month one-twelfth of the amount that is necessary to pay the fiscal year's debt service on outstanding state school improvement revenue bonds for the current fiscal year shall be transferred each month to the school improvement revenue bond debt service fund established by section 15-2084.

-6. 14 - H.B.

2704After 6.transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, seven million eight hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the department of education to be used for school safety as provided in - 17 - H.B.

After2704 transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, seven million eight hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the department of education to be used for school safety as provided in section 15-154 and two hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments to the department of education to be used for the character education matching grant program as provided in section 15-154.01.

Each month the state treasurer shall reduce the amount otherwise distributable to the city, town and county under this section by -1/36 15of -the H.B.total amount to be recovered from the city, town or county until the total amount has been recovered, but the monthly reduction for any city, town or county shall not exceed ten percent of the full monthly distribution to that entity.

2704The 1/36 of the total amount to be recovered from the city, town or county until the total amount has been recovered, but the monthly reduction for any city, town or county shall notbegin exceedfor ten percent of the fullfirst monthly- distribution18 to- thatH.B. entity.

The2704 reduction shall begin for the first calendar month after the final disposition of the case and shall continue until the total amount, including interest and costs, has been recovered.

-K. 16 - H.B.

2704 K.

The state treasurer shall- credit19 any- moniesH.B. withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section.

2704 shall credit any monies withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section.

6.7.

Distribution of revenuerevenues for county stadium districtdistrict; A.

BEGINNINGdefinitions THEA. FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION AND EACH MONTH THEREAFTER THROUGH THE MONTH OF THE NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE STATE TREASURER SHALL TRANSMIT, FROM THE AMOUNT DESIGNATED AS DISTRIBUTION BASE PURSUANT TO SECTION 42-5029, SUBSECTION D, THE AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

-SUBJECT 17TO -SECTION H.B.48-4238, BEGINNING THE FIRST MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION AND EACH MONTH THEREAFTER THROUGH MARCH 31, 2056, THE STATE TREASURER, ON INSTRUCTION FROM THE DEPARTMENT, SHALL TRANSMIT THE AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

2704 B.

THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION IS THE TOTAL AMOUNT OF STATE TRANSACTION PRIVILEGE TAX REVENUES RECEIVED FOR TAXABLE PERIODS BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION THROUGH DECEMBER 31, 2055 FROM PERSONS CONDUCTING BUSINESS UNDER THE RETAIL, AMUSEMENT, RESTAURANT AND PRIME CONTRACTING CLASSIFICATIONS AT, OR WITH RESPECT TO EVENTS HELD AT, A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION- THAT20 OCCUPIES- THEH.B. FACILITY OR ADJACENT BUILDING.

2704 ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

C.

FOR THE PURPOSES OF THIS SECTION, "ADJACENT BUILDING" AND "MAJOR LEAGUE BASEBALL FACILITY" HAVE THE SAME MEANINGS PRESCRIBED IN SECTION 48-4201.

7.8.

Delayed repeal Section 42-5032.03, Arizona Revised Statutes, as added by this act, is repealed from and after March 31, 2056.

Sec.

9.

- 1821 - H.B.

The sale of cash equivalents and the sale of precious metal bullion and monetized bullion to the ultimate consumer, but the sale of coins or other forms of money for manufacture into jewelry or works of art is subject to the tax and the gross proceeds of sales or gross income derived from the redemption of any cash equivalent by the holder as a - 1922 - H.B.

- 2023 - H.B.

- 2124 - H.B.

- 2225 - H.B.

- 2326 - H.B.

- 2427 - H.B.

-54. 25 - H.B.

2704Sales 54.of motor vehicle fuel and use fuel to a qualified business under section 41-1516 for off-road use in harvesting, processing - 28 - H.B.

Sales2704 of motor vehicle fuel and use fuel to a qualified business under section 41-1516 for off-road use in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41-1516.

-B. 26 - H.B.

2704In B.addition to the deductions from the tax base prescribed by subsection A of this section, the gross proceeds of sales or gross income - 29 - H.B.

In2704 addition to the deductions from the tax base prescribed by subsection A of this section, the gross proceeds of sales or gross income derived from sales of the following categories of tangible personal property shall be deducted from the tax base:

Neat animals, horses, asses, sheep, ratites, swine or goats used or to be used as breeding or production stock, including sales of -breedings 27or -ownership H.B.shares in such animals used for breeding or production.

2704- breedings30 or- ownershipH.B. shares in such animals used for breeding or production.

2704 7.

- 2831 - H.B.

Research and development do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in the definition of - 2932 - H.B.

- 3033 - H.B.

Computer data center equipment sold to the owner, operator or qualified colocation tenant of a computer data center that is certified by the Arizona commerce authority under section 41-1519 or an authorized agent of the owner, operator or qualified colocation tenant during the - 3134 - H.B.

If a person is engaged in the business of selling tangible personal property at both wholesale and retail, the tax under this section applies only to the gross proceeds of the sales made other than at - 3235 - H.B.

Sales of overhead materials or other tangible personal property to a manufacturer, modifier, assembler or repairer if the gross proceeds of sales or gross income derived from the property by the manufacturer, - 3336 - H.B.

- 3437 - H.B.

FOR THE PURPOSES OF SECTION 42-5032.03,42-5032.03 AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTIONAMENDMENT THROUGHTO THETHIS MONTHSECTION OFAND THEEACH NOTICEMONTH PROVIDEDTHEREAFTER PURSUANTTHROUGH TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED UNDER THE RETAIL CLASSIFICATION FROM BUSINESSESEACH BUSINESS SELLING TANGIBLE PERSONAL PROPERTY AT RETAIL ON THE PREMISES OF A MAJOR LEAGUE - 3538 - H.B.

2704 BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

FOR THE PURPOSES OF THIS SUBSECTION, "ADJACENT BUILDING" AND "MAJOR LEAGUE BASEBALL FACILITY" HAVE THE SAME MEANINGS PRESCRIBED IN SECTION 48-4201.

2.- 39 - H.B.

2704 2.

-3. 36 - H.B.

2704 3.

8.10.

2.- 40 - H.B.

2704 2.

-3. 37 - H.B.

2704 3.

(a)- No41 part- ofH.B. the organization's net earnings inures to the benefit of any private shareholder or individual.

-2704 38(a) -No H.B.part of the organization's net earnings inures to the benefit of any private shareholder or individual.

2704 (b) The primary purpose of the organization is to provide for the acquisition, construction, management, maintenance or care of organization property.

The gross proceeds of sales or gross income derived from membership fees, including initiation fees, that provide for the right to use a transient lodging recreational establishment, including golf courses and tennis and other racquet courts at that establishment, for participatory purposes for twenty-eight days or more, except that this paragraph does not include additional fees, other than initiation fees, that are charged by a transient lodging recreational establishment for purposes other than memberships and that provide for the right to use a - 3942 - H.B.

2704 that are charged by a transient lodging recreational establishment for purposes other than memberships and that provide for the right to use a transient lodging recreational establishment or any portion of the establishment for participatory purposes for twenty-eight days or more.

"Health or fitness establishment" means a facility whose primary purpose is to provide facilities, equipment, instruction or education to promote the health and fitness of its members and at least eighty percent of the monthly gross revenue of the facility is received through accounts of memberships and accompanied guest use fees that provide for the right to use the facility, or any portion of the facility, under the terms of - 4043 - H.B.

2704 of memberships and accompanied guest use fees that provide for the right to use the facility, or any portion of the facility, under the terms of the membership agreement for participatory purposes for twenty-eight days or more.

Events that are held in a multipurpose facility that is owned or operated by the tourism and sports authority pursuant to title 5, chapter 8, including intercollegiate football contests that are operated by a nonprofit- organization44 that- isH.B. exempt from taxation under section 501(c)(3) of the internal revenue code.

-2704 41nonprofit -organization H.B.that is exempt from taxation under section 501(c)(3) of the internal revenue code.

2704 2.

FOR THE PURPOSES OF SECTION 42-5032.03,42-5032.03 AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTIONAMENDMENT THROUGHTO THETHIS MONTHSECTION OFAND THEEACH NOTICEMONTH PROVIDEDTHEREAFTER PURSUANTTHROUGH TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED UNDER THE AMUSEMENT CLASSIFICATION FROM THE SALES OF ADMISSIONS TO A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITYMAJOR ORLEAGUE ADJACENTBASEBALL BUILDING.FACILITY.

FOR THE PURPOSES OF THIS SUBSECTION, "MAJOR LEAGUE BASEBALL FACILITY" HAS THE SAME MEANING PRESCRIBED IN SECTION 48-4201.

9.11.

This paragraph does not apply to an organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the - 4245 - H.B.

2704 organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from taxation under section 42-5073.

C.- 46 - H.B.

2704 C.

For the purposes of this -subsection, 43"commercial -airline" H.B.means a person holding a federal certificate of public convenience and necessity or foreign air carrier permit for air transportation to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

2704 subsection, "commercial airline" means a person holding a federal certificate of public convenience and necessity or foreign air carrier permit for air transportation to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

FOR THE PURPOSES OF SECTION 42-5032.03,42-5032.03 AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTIONAMENDMENT THROUGHTO THETHIS MONTHSECTION OFAND THEEACH NOTICEMONTH PROVIDEDTHEREAFTER PURSUANTTHROUGH TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED UNDER THE RESTAURANT CLASSIFICATION FROM BUSINESSES OPERATING RESTAURANTS, DINING ROOMS, LUNCHROOMS, LUNCH STANDS, SODA FOUNTAINS, CATERING SERVICES OR SIMILAR ESTABLISHMENTS ON THE PREMISES OF A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

FOR THE PURPOSES OF THIS SUBSECTION, "ADJACENT BUILDING" AND "MAJOR LEAGUE BASEBALL FACILITY" HAVE THE SAME MEANINGS PRESCRIBED IN SECTION 48-4201.

10.12.

Sales for resale to another manufactured building dealer are not subject- to47 tax.- H.B.

2704 subject to tax.

The tax base for the prime contracting classification is sixty-five percent of the gross proceeds of sales or gross income derived -from 44the -business. H.B.

2704 from the business.

The gross proceeds of sales or gross income from a contract to provide for one or more of the following actions, or a contract for site preparation, constructing, furnishing or installing machinery, equipment or other tangible personal property, including structures necessary to protect exempt incorporated materials or installed machinery or equipment, and- tangible48 personal- propertyH.B. incorporated into the project, to perform one or more of the following actions in response to a release or suspected release of a hazardous substance, pollutant or contaminant from a facility to the environment, unless the release was authorized by a permit issued by a governmental authority:

2704 and tangible personal property incorporated into the project, to perform one or more of the following actions in response to a release or suspected release of a hazardous substance, pollutant or contaminant from a facility to the environment, unless the release was authorized by a permit issued by a governmental authority:

-(b) 45Excavation, -removal H.B.and transportation of contaminated soil and its treatment or disposal.

2704 (b) Excavation, removal and transportation of contaminated soil and its treatment or disposal.

(b) The deduction provided in this paragraph does not include gross proceeds of sales or gross income from the portion of any contracting activity- that49 consists- ofH.B. the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property that is either deducted from the tax base of the retail classification under section 42-5061, subsection B or exempt from use tax under section 42-5159, subsection B.

-2704 46activity -that H.B.consists of the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property that is either deducted from the tax base of the retail classification under section 42-5061, subsection B or exempt from use tax under section 42-5159, subsection B.

2704 (c) The deduction provided in this paragraph shall be determined without regard to the size or useful life of the machinery, equipment or other tangible personal property.

11.- 50 - H.B.

2704 11.

For taxable periods beginning from and after June 30, 2001, the gross proceeds of sales or gross income derived from a contract entered into for the construction of a residential apartment housing facility that -qualifies 47for -a H.B.federal housing subsidy for low-income persons over sixty-two years of age and that is owned by a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code.

2704 qualifies for a federal housing subsidy for low-income persons over sixty-two years of age and that is owned by a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code.

19.- 51 - H.B.

2704 19.

(b) The attributable amount is equal to the total amount of development fees paid by the prime contractor or subcontractor, and the -total 48development -fees H.B.credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development.

2704 total development fees credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development.

For the purposes of this paragraph,- "containment52 structure"- meansH.B. a structure that prevents, monitors, controls or reduces noxious or harmful discharge into the environment.

2704 paragraph, "containment structure" means a structure that prevents, monitors, controls or reduces noxious or harmful discharge into the environment.

-(a) 49Marking -the H.B.invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the base.

2704 (a) Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the base.

D.- 53 - H.B.

2704 D.

-E. 50 - H.B.

2704 E.

FOR THE PURPOSES OF SECTION 42-5032.02,42-5032.03 AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTIONAMENDMENT THROUGHTO THETHIS MONTHSECTION OFAND THEEACH NOTICEMONTH PROVIDEDTHEREAFTER PURSUANTTHROUGH TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES REPORTED AND COLLECTED UNDER THE PRIME CONTRACTING CLASSIFICATION FROM ANY PRIME- CONTRACTOR54 ENGAGED- INH.B. THE CONSTRUCTION OF ANY BUILDINGS AND ASSOCIATED IMPROVEMENTS THAT ARE FOR THE BENEFIT OF A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITY OR ADJACENT BUILDING.

-2704 51PRIME -CONTRACTOR H.B.ENGAGED IN THE CONSTRUCTION OF ANY BUILDINGS AND ASSOCIATED IMPROVEMENTS THAT ARE FOR THE BENEFIT OF A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

2704FOR I.THE PURPOSES OF THIS SUBSECTION, "ADJACENT BUILDING" AND "MAJOR LEAGUE BASEBALL FACILITY" HAVE THE SAME MEANINGS PRESCRIBED IN SECTION 48-4201.

I.

2.- 55 - H.B.

2704 2.

The gross proceeds of sales or gross income attributable to a written contract for design phase services or professional services, -executed 52before -modification H.B.begins and with terms, conditions and pricing of all of these services separately stated in the contract from those for construction phase services, is not subject to tax under this section, regardless of whether the services are provided sequential to or concurrent with prime contracting activities that are subject to tax under this section.

2704 executed before modification begins and with terms, conditions and pricing of all of these services separately stated in the contract from those for construction phase services, is not subject to tax under this section, regardless of whether the services are provided sequential to or concurrent with prime contracting activities that are subject to tax under this section.

For the purposes of this subdivision, "change directive" means a written order directing a change in modification- work56 before- agreementH.B. on an adjustment of the guaranteed maximum price or contract time.

2704 modification work before agreement on an adjustment of the guaranteed maximum price or contract time.

-(g) 53Preparation -of H.B.status reports after modification work has begun detailing the progress of work performed, including preparation of any of the following:

2704 (g) Preparation of status reports after modification work has begun detailing the progress of work performed, including preparation of any of the following:

(e)- Preparing57 preliminary- estimatesH.B. of costs of modification work before completion of the final design of the project, including an estimate or schedule of values for any of the following:

2704 (e) Preparing preliminary estimates of costs of modification work before completion of the final design of the project, including an estimate or schedule of values for any of the following:

-(iii) 54The -cost H.B.of any equipment of the owner of the real property to be assigned by the owner to the prime contractor.

2704 (iii) The cost of any equipment of the owner of the real property to be assigned by the owner to the prime contractor.

1.- 58 - H.B.

2704 1.

If a change order does not directly relate to the scope of work of the original contract, the change order shall be treated as a new contract, with the tax treatment of any subsequent change order -to 55follow -the H.B.tax treatment of the contract to which the scope of work of the subsequent change order directly relates.

2704 to follow the tax treatment of the contract to which the scope of work of the subsequent change order directly relates.

If any part of the contract for sale of the property specifies amounts to be paid to the original owner for the modifications to be made in the period subsequent to the transfer of title, the amounts are included in the original owner's gross proceeds of sale or gross income under- this59 section.- H.B.

2704 under this section.

-3. 56 - H.B.

2704 3.

(e)- A60 change- orderH.B. that directly relates to the scope of work of the original contract shall be treated as part of the original contract, and the contract amount shall include any amount attributable to a change order that directly relates to the scope of work of the original contract.

2704 (e) A change order that directly relates to the scope of work of the original contract shall be treated as part of the original contract, and the contract amount shall include any amount attributable to a change order that directly relates to the scope of work of the original contract.

"Contractor" is synonymous with the term "builder" and means any person or organization that undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does personally or by or through others, modify any building, highway, -road, 57railroad, -excavation, H.B.manufactured building or other structure, project, development or improvement, or to do any part of such a project, including the erection of scaffolding or other structure or works in connection with such a project, and includes subcontractors and specialty contractors.

2704 road, railroad, excavation, manufactured building or other structure, project, development or improvement, or to do any part of such a project, including the erection of scaffolding or other structure or works in connection with such a project, and includes subcontractors and specialty contractors.

For the purposes of subsection O P of this section, a person who is hired by a general contractor that is hired by- an61 owner,- orH.B. a subcontractor of a general contractor that is hired by an owner, is considered to be hired by the owner.

2704 by an owner, or a subcontractor of a general contractor that is hired by an owner, is considered to be hired by the owner.

Except as provided in subsections E and Q R of this section, a person who owns real property, who engages one or more contractors to -modify 58that -real H.B.property and who does not itself modify that real property is not a prime contractor within the meaning of this paragraph regardless of the existence of a contract for sale or the subsequent sale of that real property.

2704 modify that real property and who does not itself modify that real property is not a prime contractor within the meaning of this paragraph regardless of the existence of a contract for sale or the subsequent sale of that real property.

11.13.

4.- 62 - H.B.

2704 4.

-6. 59 - H.B.

2704 6.

10.- 63 - H.B.

2704 10.

-(a) 60Printed -or H.B.photographic materials, beginning August 7, 1985.

2704 (a) Printed or photographic materials, beginning August 7, 1985.

(ii)- Incorporated64 or- fabricatedH.B. by the person into any project described in section 42-5075, subsection O P.

2704 (ii) Incorporated or fabricated by the person into any project described in section 42-5075, subsection O P.

-(i) 61A -nonprofit H.B.charitable organization that has qualified under section 501(c)(3) of the internal revenue code if the property is purchased from the parent or an affiliate organization that is located outside this state.

2704 (i) A nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code if the property is purchased from the parent or an affiliate organization that is located outside this state.

15.- 65 - H.B.

2704 15.

This subdivision does not apply to an organization that is owned, managed or controlled, in whole or in part, by -a 62major -league H.B.baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from transaction privilege tax under section 42-5073.

2704 a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from transaction privilege tax under section 42-5073.

Items purchased with United States department of agriculture coupons issued under the supplemental nutrition assistance program pursuant- to66 the- foodH.B. and nutrition act of 2008 (P.L.

2704 pursuant to the food and nutrition act of 2008 (P.L.

-25. 63 - H.B.

2704 25.

33.- 67 - H.B.

2704 33.

-35. 64 - H.B.

2704 35.

(a) "Overhead materials" means tangible personal property, the gross proceeds of sales or gross income derived from which would otherwise be included in the retail classification, that is used or consumed in performing a contract, the cost of which is charged to an overhead expense account and allocated to various contracts based on generally accepted accounting- principles68 and- consistentH.B. with government contract accounting standards.

(b)2704 "Subcontract"accounting meansprinciples an agreement between a contractor and anyconsistent personwith who is not an employee of the contractor for furnishing of supplies or services that, in whole or in part, are necessary to perform one or more government contracts,contract oraccounting understandards. which any portion of the contractor's obligation under one or more government contracts is performed, undertaken or assumed, and that includes provisions causing title to overhead - 65 - H.B.

2704(b) "Subcontract" means an agreement between a contractor and any person who is not an employee of the contractor for furnishing of supplies or services that, in whole or in part, are necessary to perform one or more government contracts, or under which any portion of the contractor's obligation under one or more government contracts is performed, undertaken or assumed, and that includes provisions causing title to overhead materials or other tangible personal property used in performing the subcontract to pass to the government or that includes provisions incorporating such title passing clauses in a government contract into the subcontract.

(b)- Converting69 natural- gasH.B. into liquefied natural gas, and used or consumed for the sole purpose of fueling compressor equipment used in the conversion process.

2704 (b) Converting natural gas into liquefied natural gas, and used or consumed for the sole purpose of fueling compressor equipment used in the conversion process.

-48. 66 - H.B.

2704 48.

54.- 70 - H.B.

2704 54.

-55. 67 - H.B.

2704 55.

(b)- "Monetized71 bullion"- meansH.B. coins and other forms of money that are manufactured from gold, silver or other metals and that have been or are used as a medium of exchange in this or another state, the United States or a foreign nation.

2704 (b) "Monetized bullion" means coins and other forms of money that are manufactured from gold, silver or other metals and that have been or are used as a medium of exchange in this or another state, the United States or a foreign nation.

-1. 68 - H.B.

2704 1.

(c)- "Machinery72 and- equipmentH.B. used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released.

2704 (c) "Machinery and equipment used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released.

Pipes or valves four inches in diameter or larger used to transport oil, natural gas, artificial gas, water or coal slurry, -including 69compressor -units, H.B.regulators, machinery and equipment, fittings, seals and any other part that is used in operating the pipes or valves.

2704 including compressor units, regulators, machinery and equipment, fittings, seals and any other part that is used in operating the pipes or valves.

(c)- Persons73 who- areH.B. not residents of this state and who will not use such property in this state other than in removing such property from this state.

2704 (c) Persons who are not residents of this state and who will not use such property in this state other than in removing such property from this state.

-10. 70 - H.B.

2704 10.

For the purposes of this paragraph, "research and development" means basic and applied research in the sciences and engineering, and designing, developing or testing prototypes, processes or new products, including research- and74 development- ofH.B. computer software that is embedded in or an integral part of the prototype or new product or that is required for machinery or equipment otherwise exempt under this section to function effectively.

2704 research and development of computer software that is embedded in or an integral part of the prototype or new product or that is required for machinery or equipment otherwise exempt under this section to function effectively.

-16. 71 - H.B.

2704 16.

(b)- Does75 not- includeH.B. the building or other permanent, nonremovable component of the building that houses the clean room environment.

2704 (b) Does not include the building or other permanent, nonremovable component of the building that houses the clean room environment.

Machinery or equipment, including related structural components and containment structures, that is employed in connection with manufacturing, processing, fabricating, job printing, refining, mining, -natural 72gas -pipelines, H.B.metallurgical operations, telecommunications, producing or transmitting electricity or research and development and that is used directly to meet or exceed rules or regulations adopted by the federal energy regulatory commission, the United States environmental protection agency, the United States nuclear regulatory commission, the Arizona department of environmental quality or a political subdivision of this state to prevent, monitor, control or reduce land, water or air pollution.

2704 natural gas pipelines, metallurgical operations, telecommunications, producing or transmitting electricity or research and development and that is used directly to meet or exceed rules or regulations adopted by the federal energy regulatory commission, the United States environmental protection agency, the United States nuclear regulatory commission, the Arizona department of environmental quality or a political subdivision of this state to prevent, monitor, control or reduce land, water or air pollution.

To qualify for this- exemption,76 the- qualifiedH.B. business must obtain and present its certification from the Arizona commerce authority at the time of purchase.

2704 this exemption, the qualified business must obtain and present its certification from the Arizona commerce authority at the time of purchase.

-24. 73 - H.B.

2704 24.

2.- 77 - H.B.

2704 2.

-F. 74 - H.B.

2704 F.

(i) A business that manufactures or smelts tangible products in this state, of which at least fifty-one percent of the manufactured or smelted- products78 will- beH.B. exported out of state for incorporation into another product or sold out of state for a final sale.

2704 smelted products will be exported out of state for incorporation into another product or sold out of state for a final sale.

-(iv) 75A -business H.B.that employs at least fifty-one percent of its workforce in this state in manufacturing or smelting and business activities directly related to manufacturing or smelting.

2704 (iv) A business that employs at least fifty-one percent of its workforce in this state in manufacturing or smelting and business activities directly related to manufacturing or smelting.

Sec.- 79 - H.B.

12.2704 Sec.

14.

Distribution of revenuerevenues for county stadium district from citycities orand town;towns;

noticenotice; A.

BEGINNINGlimit; THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION AND EACH MONTH THEREAFTER THROUGH THE MONTH OF THE NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, A CITY OR TOWN SHALL TRANSMIT THE AMOUNT DETERMINED - 76 - H.B.

2704definitions UNDERA. SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

THESUBJECT DEPARTMENTTO SHALLSECTION NOTIFY48-4238 THEAND CITYSUBSECTION ORD TOWN OF THIS SECTION, BEGINNING THE AMOUNTFIRST DETERMINEDMONTH PURSUANTFOLLOWING TOTHE SUBSECTIONEFFECTIVE BDATE OF THIS SECTION AND EACH MONTH,MONTH ANDTHEREAFTER THETHROUGH MARCH 31, 2056, EACH CITY ORAND TOWN SHALL TRANSMIT THE MONIESAMOUNT WITHINDETERMINED THIRTYUNDER DAYSSUBSECTION B OF RECEIVINGTHIS SECTION TO THE NOTICE.COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

THE DEPARTMENT SHALL NOTIFY THE CITY OR TOWN OF THE AMOUNT DETERMINED PURSUANT TO SUBSECTION B OF THIS SECTION EACH MONTH, AND THE CITY OR TOWN SHALL TRANSMIT THE MONIES WITHIN THIRTY DAYS AFTER RECEIVING THE NOTICE.

THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION IS THE AMOUNT DETERMINED BY THE DEPARTMENT TO BE THE FIRST TWO PERCENT OF THE RATE OF TRANSACTION PRIVILEGE, SALES, USE, FRANCHISE OR OTHER SIMILAR TAX OR FEES COLLECTED ON BEHALF OF THE CITY OR TOWN FOR TAXABLE PERIODS BEGINNING ON THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION THROUGH DECEMBER 31, 2055 FROM PERSONS ENGAGED IN THE FOLLOWING BUSINESS ACTIVITIES AT, OR WITH RESPECT TO EVENTS HELD AT, A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING:

FOR THE PURPOSES OF THIS SECTION,SECTION AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION THROUGHAND THEEACH MONTH OFTHEREAFTER THETHROUGH NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED FROM THEEACH BUSINESSESBUSINESS PRESCRIBED IN SUBSECTION B OF THIS SECTION ON THE PREMISES OF A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY- STADIUM80 DISTRICT- PURSUANTH.B. TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITY OR ADJACENT BUILDING.

2704 COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

D.

THE TOTAL AMOUNT TRANSMITTED UNDER THIS SECTION MAY NOT EXCEED $3,500,000 EACH YEAR AS INCREASED PURSUANT TO SUBSECTION E OF THIS SECTION.

IF THE LIMIT PRESCRIBED BY THIS SUBSECTION IS MET, THE CITY OR TOWN SHALL STOP TRANSMITTING MONIES PURSUANT TO THIS SECTION UNTIL THE FOLLOWING YEAR.

E.

BEGINNING FROM AND AFTER DECEMBER 31, 2026 THROUGH DECEMBER 31, 2055, EACH CITY OR TOWN SHALL ANNUALLY INCREASE THE LIMIT PRESCRIBED BY SUBSECTION D OF THIS SECTION BY THREE PERCENT.

F.

FOR THE PURPOSES OF THIS SECTION, "ADJACENT BUILDING" AND "MAJOR LEAGUE BASEBALL FACILITY" HAVE THE SAME MEANINGS PRESCRIBED IN SECTION 48-4201.

13.15.

Delayed repeal Section 42-6018, Arizona Revised Statutes, as added by this act, is repealed from and after DecemberMarch 31, 2055.

-Sec. 77 - H.B.

270416. Sec.

14.

Distribution of revenuerevenues for county stadium district from county transportation excise taxestax; A.

BEGINNINGdefinitions THEA. FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION AND EACH MONTH THEREAFTER THROUGH THE MONTH OF THE NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, A COUNTY SHALL TRANSMIT FROM THE AMOUNT COLLECTED PURSUANT TO THIS ARTICLE THE AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION AND EACH MONTH THEREAFTER THROUGH MARCH 31, 2056, THE STATE TREASURER, ON INSTRUCTION FROM THE DEPARTMENT, SHALL TRANSMIT FROM THE AMOUNT COLLECTED PURSUANT TO THIS ARTICLE THE AMOUNT DETERMINED UNDER SUBSECTION B OF THIS SECTION TO THE COUNTY STADIUM DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 26 FOR DEPOSIT IN THE COUNTY STADIUM DISTRICT FUND ESTABLISHED PURSUANT TO SECTION 48-4231.

THE AMOUNT TO BE TRANSMITTED UNDER SUBSECTION A OF THIS SECTION IS THE TOTAL AMOUNT OF COUNTY EXCISE TAXES COLLECTED PURSUANT TO SECTIONSECTIONS 42-6105 AND 42-6105.01 ON BEHALF OF THE COUNTY FOR TAXABLE PERIODS BEGINNING ON THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION THROUGH DECEMBER 31, 2055 FROM PERSONS ENGAGED IN THE FOLLOWING BUSINESS ACTIVITIES AT, OR WITH RESPECT TO EVENTS HELD AT, A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING:

OPERATING OR CONDUCTING THEATERS, MOVIES, OPERAS, SHOWS OF ANY TYPE OR NATURE, EXHIBITIONS, CONCERTS, CARNIVALS, CIRCUSES, AMUSEMENT PARKS, MENAGERIES, FAIRS, RACES, CONTESTS, GAMES, BILLIARD OR POOL PARLORS, BOWLING ALLEYS, PUBLIC DANCES, DANCE HALLS, BOXING AND WRESTLING MATCHES,- SKATING81 RINKS,- TENNISH.B. COURTS, VIDEO GAMES, PINBALL MACHINES OR SPORTS EVENTS OR ANY OTHER BUSINESS CHARGING ADMISSION OR USER FEES FOR EXHIBITION, AMUSEMENT OR ENTERTAINMENT.

2704 MATCHES, SKATING RINKS, TENNIS COURTS, VIDEO GAMES, PINBALL MACHINES OR SPORTS EVENTS OR ANY OTHER BUSINESS CHARGING ADMISSION OR USER FEES FOR EXHIBITION, AMUSEMENT OR ENTERTAINMENT.

FOR THE PURPOSES OF THIS SECTION,SECTION AND SUBJECT TO SECTION 48-4238, BEGINNING THE FIRST DAY OF THE MONTH FOLLOWING THE EFFECTIVE DATE OF THIS SECTION THROUGHAND THEEACH MONTH OFTHEREAFTER THETHROUGH NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2055, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR REVENUES COLLECTED PURSUANT TO SECTIONSECTIONS 42-6105 AND 42-6105.01 FROM THEEACH BUSINESSESBUSINESS PRESCRIBED IN SUBSECTION B OF THIS SECTION ON THE PREMISES OF A MAJOR LEAGUE BASEBALL FACILITY OR AN ADJACENT BUILDING THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY OR ADJACENT BUILDING.

- 78 - H.B.

2704 Sec.

15.

Delayed repeal Section 42-6113, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2055.

Sec.

16.

Section 43-206, Arizona Revised Statutes, is amended to read:

43-206.

Urban revenue sharing fund;

allocation;

distribution;

withholding A.

The urban revenue sharing fund is established.

Through fiscal year 2022-2023, the fund consists of an amount equal to fifteen percent of the net proceeds of the state income taxes for the fiscal year two years preceding the current fiscal year.

Beginning in fiscal year 2023-2024, the fund consists of an amount equal to eighteen percent of the net proceeds of the state income taxes for the fiscal year two years preceding the current fiscal year.

The fund shall be distributed to incorporated cities and towns as provided in this section, except that a city or town shall receive at least an amount equal to what a city or town with a population of fifteen hundred or more persons would receive.

The transfer of net proceeds prescribed by section 49-282, subsection B does not affect the calculation of net proceeds prescribed by this subsection.

B.

Each city or town shall share in the urban revenue sharing fund in the proportion that the population of each bears to the population of all.

Except as provided by sections 42-5033 and 42-5033.01, the population of a city or town as determined by the most recent United States decennial census plus any revisions to the decennial census certified by the United States CENSUS bureau of the census shall be used as the basis for apportioning monies pursuant to this subsection.

C.

The treasurer, on instruction from the department, shall transmit, not later than the tenth day of each month, to each city or town an amount equal to one-twelfth of that city's or town's total entitlement for the current fiscal year from the urban revenue sharing fund as determined by the department.

AFOR newlyTHE incorporatedPURPOSES cityOF orTHIS townSECTION, shall"ADJACENT shareBUILDING" inAND the"MAJOR urbanLEAGUE revenueBASEBALL sharingFACILITY" fundHAVE beginningTHE theSAME firstMEANINGS monthPRESCRIBED ofIN theSECTION first48-4201. full fiscal year following incorporation.

E.

On receipt of a certificate of default from the greater Arizona development authority pursuant to section 41-2257 or 41-2258, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold from the next succeeding distribution of monies pursuant to this section due to the city or town the amount specified in the certificate of default and immediately deposit the amount withheld in the greater Arizona development authority revolving fund.

The state treasurer shall continue to withhold and deposit the monies until the authority certifies to the state treasurer that the default has been cured.

The state treasurer may not withhold any amount that is necessary, as certified by the defaulting political subdivision to the state treasurer and the authority, to make - 79 - H.B.

2704 any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued before the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to this section.

F.

Except as otherwise provided by this subsection, on notice from the attorney general pursuant to section 41-194.01, subsection B, paragraph 1 that an ordinance, regulation, order or other official action adopted or taken by the governing body of a city or town violates state law or the Constitution of Arizona, the state treasurer shall withhold the distribution of monies pursuant to this section to the affected city or town and shall continue to withhold monies pursuant to this subsection until the attorney general certifies to the state treasurer that the violation has been resolved.

The state treasurer shall redistribute the monies withheld pursuant to this subsection among all other cities and towns in proportion to their population as provided by subsection B of this section.

The state treasurer shall not withhold any amount that the city or town certifies to the attorney general and the state treasurer as being necessary to make any required deposits or payments for debt service on bonds or other long-term obligations of the city or town that were issued or incurred before committing the violation.

G.

THE AMOUNT REPORTED TO THE DEPARTMENT PURSUANT TO SECTION 43-209, SUBSECTION D FOR A TAXABLE YEAR SHALL BE INCLUDED WHEN DETERMINING THE NET PROCEEDS OF THE STATE INCOME TAXES FOR THE FISCAL YEAR FOR THE PURPOSES OF THE DISTRIBUTION REQUIRED BY SUBSECTION A OF THIS SECTION.

Delayed repeal Section 42-6113, Arizona Revised Statutes, as added by this act, is repealed from and after March 31, 2055.

Sec.

18.

On or before December 31 of each year each professional football franchise organization that is domiciled in this state AND EACH PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION thatTHAT isCOMPENSATES domiciledINDIVIDUALS inFOR thisSERVICES stateRENDERED AT A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND THAT IS OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITY shall provide to the department the federal taxpayer identification number, assigned pursuant to section 6109 of the internal revenue code, for each resident and nonresident employee of the organization who rendered services in this state for the organization during the calendar year.

Unless due to reasonable- cause82 and- notH.B. due to wilful neglect, a professional football franchise organization OR PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION that fails to provide taxpayer identification numbers pursuant to this subsection shall pay a civil penalty of five dollars $5 for each such number.

-2704 80reasonable -cause H.B.and not due to wilful neglect, a professional football franchise organization OR PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION that fails to provide taxpayer identification numbers pursuant to this subsection shall pay a civil penalty of five dollars $5 for each such number.

2704 C.

FOR THE PURPOSES OF SECTION 42-1116, SUBSECTION D,D AND SUBJECT TO SECTION 48-4238, ON OR BEFORE MARCH 31 OF EACH YEAR THROUGH THE DATE OF THE NOTICE PROVIDED PURSUANT TO SECTION 48-4238 OR DECEMBER 31, 2056, WHICHEVER IS LATER, THE DEPARTMENT SHALL SEPARATELY ACCOUNT FOR AND REPORT TO THE STATE TREASURER AS A SINGLE AGGREGATE AMOUNT THE TOTAL NET REVENUES COLLECTED DURING THE PRECEDING CALENDAR YEAR FROM THE IMPOSITION OF TAX UNDER THIS TITLE ON THE INCOME FROM ALL SOURCES OF:

RESIDENT AND NONRESIDENT EMPLOYEES WHO ARE MEMBERS OF ANY PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT IS DOMICILED IN THIS STATE.

3.

RESIDENT AND NONRESIDENT EMPLOYEES WHO ARE MEMBERS OF ANY PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT IS DOMICILED OUTSIDE OF THIS STATE FOR SERVICES RENDERED IN THIS STATE AT A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY A COUNTY STADIUM DISTRICT PURSUANT TO TITLE 48, CHAPTER 26 AND THAT IS OPERATED BY THE COUNTY STADIUM DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITY.

"PROFESSIONAL"MEMBER BASEBALLOF FRANCHISEANY ORGANIZATION" MEANS AN ORGANIZATION THAT HAS THE RIGHT TO FIELD A TEAM FOR PARTICIPATION IN PROFESSIONAL BASEBALL CONTESTSFRANCHISE SCHEDULEDORGANIZATION": BY A NATIONWIDE LEAGUE DURING A REGULAR SEASON HELD IN THE MONTHS OF MARCH THROUGH OCTOBER EACH YEAR AND THAT IS DOMICILED IN THIS STATE ON OR BEFORE THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION.

2.(a) MEANS AN EMPLOYEE WHO IS AN ACTIVE PLAYER, A PLAYER ON THE DISABLED LIST AND ANY OTHER PERSON REQUIRED TO TRAVEL AND WHO TRAVELS WITH AND PERFORMS SERVICES FOR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION ON A REGULAR BASIS.

(b) INCLUDES COACHES, MANAGERS, TRAINERS AND BROADCASTERS.

- 83 - H.B.

2704 2.

"PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION" MEANS AN ORGANIZATION THAT HAS THE RIGHT TO FIELD A TEAM FOR PARTICIPATION IN PROFESSIONAL BASEBALL CONTESTS SCHEDULED BY A NATIONWIDE LEAGUE DURING A REGULAR SEASON HELD IN THE MONTHS OF MARCH THROUGH OCTOBER EACH YEAR.

3.

18.19.

Section 48-4201, Arizona Revised Statutes, is amended to read:

48-4201.

Definitions In this chapter, unless the context otherwise requires:

1.

"ADJACENT BUILDING":

(a) MEANS A BUILDING THAT IS BOTH:

(i) OWNED BY A DISTRICT ESTABLISHED PURSUANT TO THIS CHAPTER ON OR BEFORE THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION AND OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE BUILDING.

(ii) ADJACENT TO A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY A DISTRICT PURSUANT TO THIS CHAPTER AND OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE FACILITY.

(b) INCLUDES A BUILDING THAT IS CONSTRUCTED AFTER THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION IF THE BUILDING IS BOTH:

(i) ADJACENT TO THE MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY A DISTRICT ESTABLISHED PURSUANT TO THIS CHAPTER AND OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY.

(ii) OWNED BY A DISTRICT ESTABLISHED PURSUANT TO THIS CHAPTER AND OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT WILL OCCUPY THE BUILDING FOR THE PURPOSES OF SELLING MERCHANDISE.

1.

2.

"Board" means the board of directors of any district established under section 48-4202, subsection A, B or C.

2.

3.

"Bond" means any obligation authorized and issued pursuant to this chapter, including bonds, lease-purchase and installment purchase agreements, certificates of participation in a lease-purchase or installment purchase agreement and obligations that are authorized and issued to refund or refinance obligations that are authorized and issued pursuant to this chapter.

3.

4.

"District" means any county stadium district established pursuant to section 48-4202, subsection A, B or C.

5.

"MAJOR LEAGUE BASEBALL FACILITY" MEANS A MULTIPURPOSE FACILITY OR STADIUM THAT IS USED FOR THE PURPOSES OF MAJOR LEAGUE BASEBALL OPERATIONS OR ACTIVITIES.

- 84 - H.B.

2704 4.

6.

"Multipurpose facility" means any facility or facilities that include:

(a) A primary component that is located in the district on the multipurpose facility site and on lands that are adjacent to each other or separated by public rights-of-way, that the district owns or leases and that is used to accommodate sporting, entertainment, cultural, civic, meeting, trade show or convention events or activities, fire, police or other public safety facilities and tourism offices.

The primary component may not include any structure or part of a structure that is used or designed for use as a county, city or town hall, as meeting space for the county, city or town governing body or for general municipal administrative office space other than for the administration, maintenance and operation of the multipurpose facility.

(b) Secondary components that are located in the district and that the board determines are necessary or beneficial to the primary component, limited to on-site infrastructure, artistic components, parking garages and lots, and public parks and plazas.

In addition, secondary components may include related commercial facilities that are located within the multipurpose facility site.

5.

7.

"Multipurpose facility site" means the geographic area within the district which is depicted in the publicity pamphlet for an election held pursuant to section 48-4237.

6.

8.

"Municipality" means a city or town that is incorporated or chartered under the constitution and laws of this state.

7.

9.

"Stadium" means a sports facility or facilities located in the district and designed to accommodate, but not be limited to, major league baseball events or intercollegiate athletic events.

Sec.

20.

Section 48-4202, Arizona Revised Statutes, is amended to read:

48-4202.

Formation of district;

termination A.

The board of supervisors of each county having a population of more than one million five hundred thousand persons or any county in which a major league baseball organization has established or seeks to establish a spring training operation may organize a countywide district to include both the incorporated and unincorporated areas of the county, if the board determines that the public convenience, necessity or welfare will be promoted by establishing the district.

B.

Two or more municipalities in the same county may organize a district for multipurpose facilities if the governing bodies of the municipalities determine that the public convenience, necessity or welfare will be promoted by establishing the district.

The district shall be composed of the areas within the corporate boundaries of the municipalities.

After formation, the boundaries of the district shall not be altered.

A district may be established under this subsection in the same county in which a district is established under subsection A of this - 85 - H.B.

2704 section.

A district formed pursuant to this subsection shall be deemed a county stadium district for the purposes of this chapter.

Notwithstanding any other law, a district may not be organized under this subsection from and after October 31, 1999, except that a district may be organized under this subsection after October 31, 1999 if before that date the governing body of two or more of the municipalities identified the location of a multipurpose facility site and has voted with the purpose of forming a district for multipurpose facilities under this subsection.

C.

The board of supervisors of any county in which a state supported university is established may organize a single university athletic facilities district if the board determines that the public convenience, necessity or welfare will be promoted by establishing the district.

The district shall include only the area in the county within the contiguous exterior boundaries of real property owned by the Arizona board of regents and shall exclude any such real property subject to an existing ground lease or subject to an existing agreement granting a third party the right or option to a ground lease.

After formation, the boundaries of the district shall be altered only as the Arizona board of regents acquires and disposes of real property.

A district may be established under this subsection in the same county in which a district is established under subsection A of this section.

A district formed pursuant to this subsection is deemed a county stadium district for the purposes of this chapter.

D.

The county board of supervisors shall be the board of directors of a countywide district established under subsection A of this section IN A COUNTY WITH A POPULATION OF LESS THAN ONE MILLION FIVE HUNDRED THOUSAND PERSONS.

E.

THE BOARD OF DIRECTORS OF A DISTRICT ESTABLISHED UNDER SUBSECTION A OF THIS SECTION IN A COUNTY WITH A POPULATION OF ONE MILLION FIVE HUNDRED THOUSAND PERSONS OR MORE SHALL CONSIST OF THE FOLLOWING PERSONS:

1.

TWO MEMBERS WHO ARE APPOINTED BY THE MAYOR OF THE MUNICIPALITY IN WHICH A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY THE DISTRICT AND THAT IS OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY IS LOCATED.

2.

ONE MEMBER WHO IS APPOINTED BY THE CHAIRPERSON OF THE BOARD OF SUPERVISORS OF THE COUNTY IN WHICH A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY THE DISTRICT AND THAT IS OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY IS LOCATED.

3.

ONE EX OFFICIO MEMBER WITHOUT THE POWER TO VOTE WHO REPRESENTS THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED AND THAT IS OPERATED BY THE - 86 - H.B.

2704 DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY AND WHO IS APPOINTED BY THE GOVERNOR.

4.

FOUR MEMBERS WHO ARE RESIDENTS OF THE COUNTY IN WHICH A MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY THE DISTRICT AND THAT IS OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY IS LOCATED AND WHO HAVE EXPERIENCE IN CONSTRUCTION, REDEVELOPMENT, ARCHITECTURE, ECONOMIC DEVELOPMENT OR COMMERCIAL OR PUBLIC FINANCE, TWO OF WHOM ARE APPOINTED BY THE GOVERNOR, ONE OF WHOM IS APPOINTED BY THE PRESIDENT OF THE SENATE AND ONE OF WHOM IS APPOINTED BY THE MINORITY LEADER OF THE SENATE.

5.

TWO MEMBERS WHO OWN BUSINESSES LOCATED WITHIN THREE MILES OF THE MAJOR LEAGUE BASEBALL FACILITY THAT IS OWNED BY THE DISTRICT AND THAT IS OPERATED BY THE DISTRICT OR THE PROFESSIONAL BASEBALL FRANCHISE ORGANIZATION THAT OCCUPIES THE MAJOR LEAGUE BASEBALL FACILITY, ONE OF WHOM IS APPOINTED BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND ONE OF WHOM IS APPOINTED BY THE MINORITY LEADER OF THE HOUSE OF REPRESENTATIVES.

F.

INITIAL MEMBERS OF THE BOARD APPOINTED PURSUANT TO SUBSECTION E OF THIS SECTION SHALL BE APPOINTED BEFORE JANUARY 1, 2026.

INITIAL MEMBERS SHALL ASSIGN THEMSELVES TO STAGGERED TERMS OF TWO, THREE AND FOUR YEARS AT THE FIRST MEETING OF THE BOARD, WITH THREE INITIAL MEMBERS SERVING INITIAL TERMS OF TWO YEARS, THREE INITIAL MEMBERS SERVING INITIAL TERMS OF THREE YEARS AND FOUR INITIAL MEMBERS SERVING INITIAL TERMS OF FOUR YEARS.

ALL SUBSEQUENT MEMBERS SERVE FOUR-YEAR TERMS.

A MEMBER MAY BE REAPPOINTED FOR ONE SUBSEQUENT FULL TERM.

ALL VACANCIES SHALL BE FILLED WITHIN THIRTY DAYS AFTER THE VACANCY OCCURS AND IN THE SAME MANNER AS THE INITIAL APPOINTMENT.

THE CHAIRPERSON OF THE BOARD SHALL NOTIFY THE GOVERNOR, THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OF THE INITIAL TERMS.

G.

The board of directors of a district established under subsection B of this section shall consist of persons who are residents of the county in which the district is located, at least four of whom must reside in the municipality in which the district is located and who are appointed as follows:

1.

Five members who are appointed by the governor, each of whom must have experience in commercial real estate, construction, redevelopment, real estate law, architecture, economic development or commercial or public finance.

The governor may receive nominations for appointment from any interested organization or person.

Members appointed by the governor serve at the pleasure of the governor.

2.

Two members who are appointed by the president of the senate.

The members appointed by the president serve at the pleasure of the president.

- 87 - H.B.

2704 3.

Two members who are appointed by the speaker of the house of representatives.

The members appointed by the speaker serve at the pleasure of the speaker.

F.

H.

The board of directors of a district established under subsection C of this section shall be established pursuant to an intergovernmental agreement between the county and the Arizona board of regents.

G.

I.

The directors of any district are not eligible for compensation for their services but are eligible for reimbursement for their necessary expenses in attending to and traveling on district business.

H.

J.

The board of supervisors may pay the necessary costs incurred in connection with establishing a countywide district from any county monies available for that purpose.

The municipalities may pay their proportionate share of the necessary costs incurred in establishing a district formed by two or more municipalities under subsection B of this section from any monies available for that purpose.

The Arizona board of regents may pay the necessary costs incurred in connection with establishing a district under subsection C of this section from any monies available for that purpose.

I.

K.