| ITEM #: 3. DATE: 05/13/2024 AI #:2036 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | BUSINESS REGISTRATION PERMIT CODE AMENDMENT |
| STAFF PRESENTER(S): | Roric Massey, City Attorney |
Summary
Staff will present information and receive Council direction on the proposed amendment to Article 8-7 of Goodyear City Code which will replace the city’s current business registration permit with a business license requirement for certain businesses. The amendment provides for enforcement and penalties for non-compliance as well as exemptions to obtaining a business license. (Roric Massey, City Attorney)
FISCAL IMPACT
There is no direct budget impact associated with the approval of this text amendment. The current fee for a business registration permit will remain the same for the business license.
BACKGROUND AND PREVIOUS ACTIONS
Currently, the City of Goodyear requires every person conducting business within the city to register the business and obtain a business registration permit, which provides the city with a catalog of each business. The proposed amendment to Article 8-7 shall require any person engaged in certain business within the city to first obtain a business license by submitting an application to the city and paying a fee, the business license fee shall remain the same as the current registration permit fee. Every person that has been issued a valid business registration permit by the city shall be allowed to continue to operate as if they have been issued a business license until such business registration permit expires on December 31, 2024. The business must then submit an application to the city to renew any business registration permit as a business license. After being issued a business license under the amended Article 8-7, the business must display their license at a fixed location within the city at all times or to carry their license with them if there is no fixed location. The amendment to Article 8-7 allows a business license to be suspended or revoked for City Code violations and the business must cease all operations once the license is suspended or revoked. The city may impose fines for non-compliance under the amendment to Article 8-7 and every person that violates a provision may be pursued civilly or criminally.
The proposed amendment to Article 8-7 was taken to Council on April 29, 2024, however, the amendment was tabled in order to address Council’s concerns related to the licensing of home-based businesses and casual business activity, as well as Council’s concerns related to the penalties included within the proposed amendment to Article 8-7.
Staff made additional revisions to proposed Ordinance No. 2024-1608 to address Council’s concerns by clarifying definitions and providing additional exemptions to the business license requirements. The additional proposed amendments to Article 8-7 are as follows:
1. Further define and clarify Casual Sale and Activity as those sales which are infrequent, singular and private in nature or a sales event of an isolated nature, such as a garage sale, and the sales event is 2-days or less in length and the total gross revenue of such person from all sales events conducted is less than $5,000 per calendar year;
2. Add additional persons and types of activities that are exempt from obtaining a business license within section 8-7-5 including:
4. Clarify that after being cited for the first offense, subsequent penalties for operating without a license are not less than $1,000 and not more than $2,500.
The proposed amendment to Article 8-7 was taken to Council on April 29, 2024, however, the amendment was tabled in order to address Council’s concerns related to the licensing of home-based businesses and casual business activity, as well as Council’s concerns related to the penalties included within the proposed amendment to Article 8-7.
Staff made additional revisions to proposed Ordinance No. 2024-1608 to address Council’s concerns by clarifying definitions and providing additional exemptions to the business license requirements. The additional proposed amendments to Article 8-7 are as follows:
1. Further define and clarify Casual Sale and Activity as those sales which are infrequent, singular and private in nature or a sales event of an isolated nature, such as a garage sale, and the sales event is 2-days or less in length and the total gross revenue of such person from all sales events conducted is less than $5,000 per calendar year;
2. Add additional persons and types of activities that are exempt from obtaining a business license within section 8-7-5 including:
o Those engaged in a casual activity or sale;
o Home Occupations, as defined by the amended Article 8-7, that do not receive customers at any time;
o school aged children engaged in a school sponsored fundraiser;
o nonprofit entities that do not operate a residential care or treatment facility that is required to be licensed by the State of Arizona;
o independent contractors that only offer products for sale, such as beauty and kitchen utensils, on behalf of a parent organization;
o persons in residential districts engaged in tutoring or providing educational lessons;
3. Clarify that the City may provide a person operating a business without a license a warning and 30 days to correct the violation and;o Home Occupations, as defined by the amended Article 8-7, that do not receive customers at any time;
o school aged children engaged in a school sponsored fundraiser;
o nonprofit entities that do not operate a residential care or treatment facility that is required to be licensed by the State of Arizona;
o independent contractors that only offer products for sale, such as beauty and kitchen utensils, on behalf of a parent organization;
o persons in residential districts engaged in tutoring or providing educational lessons;
4. Clarify that after being cited for the first offense, subsequent penalties for operating without a license are not less than $1,000 and not more than $2,500.
STAFF ANALYSIS
Current city code requires a person to obtain a business registration permit rather than a business license. The proposed amendment to Article 8-7 requires anyone operating a business within city limits to obtain the city’s permission to conduct business by receiving a business license but contains specific exemptions for certain activities. A business license requirement is necessary in order to allow the city to impose penalties for unlawful operation of a business and impose fines for non-compliance. Staff seeks council direction on the limits for licensing requirements and direction on the amendment of Article 8-7 of Goodyear City Code.