Ariz. Admin. Code § 15-4-202
A. "Extracted for commercial purposes" means extraction on a commercial scale at an operating production rate, with a significant amount of the mineral becoming subject to the Arizona severance tax on a continuing basis. Public announcements shall be considered an indication of producing status. Extraction of mineral for assay, research or development purposes does not constitute extraction for commercial purposes.
B. "Mine" means a producing mine, nonproducing mine or mine unit and includes all taxable properties located within the state and operated in conjunction with or formerly used in a mine, including but not limited to, the following:
1. All facilities and equipment situated within the state used in, or formerly used in mine operations, including mine plants, mills, concentrators, smelters, refineries, chemical plants, electro-winning plants, and all related facilities which directly or indirectly contribute or contributed to the production of the mine revenues. Manufacturing facilities, such as a rod plant, incorporated railroads, utilities and custom facilities shall not be included in the mine. Custom smelters are those which are not operated as an integral part of the mine facilities and/or located at the mine site.
2. Land which is being used or formerly used for production. The outer boundary shall be 1 claim beyond the producing claims, or, in the case of a fee interest, 1500 feet beyond the boundary of the fee parcel. The mine unit includes land on which the items described in subsection (B)(2) are situated, all ore reserves, ultimate pit or subsidence limits, all waste storage, leach and tailing dump sites, water facilities used for production, rights-of-way used for mine-operated unincorporated railway lines, conveyor lines, water and utility lines. Land shall include patented and unpatented mining claims, fee simple interests, severed mineral rights, leased land and surface rights used in the mine operations.
3. Health care facilities situated in proximity to the mine which are operated primarily for the benefit of the employees.
C. "Ore" means mineralized rock, which can be mined, processed, and made to yield saleable metal or other mineral products at a profit.
D. "Ore reserves" means that estimate of ore which is in existence and can reasonably be estimated to be capable of extraction, processing and sale at a profit.
E. "Reproduction cost" means the cost of construction of an exact duplicate at current prices using the same materials, construction standards, design, layout and quality of workmanship.
F. "Depreciation" means the loss of value from any source and includes:
1. Physical deterioration which is normally caused by wear and tear.
2. Functional obsolescence which is the decrease in the capacity or efficiency to perform the function for which it was intended in terms of current standards.
3. Economic obsolescence which comes from factors outside the property itself.
G. "Capital expenditures" for the purpose of the income approach shall be classified as follows:
1. Original capital investment, such as original land acquisition, exploration, development including pre-mine stripping and initial plant construction.
2. Expansion capital, such as plant construction and additional equipment that results in increased plant capacity or increased production of the mine unit as a whole; expansion capital does not include equipment or construction necessary to maintain production levels.
3. Replacement capital, such as necessary replacements of plant, equipment, or construction required to maintain production levels.
4. Mandated expenditures, such as environmental or safety facilities and equipment.
H. "Temporary shutdown" means a shutdown on a continued maintenance basis with the intention to restart when conditions improve. The mine will be valued on the basis of the residual cost approach.
I. "Permanent shutdown" means a shutdown due to complete depletion of the orebody or the lack of commercial value of the orebody. The mine shall be considered a nonproducing mine and valued on the basis of salvage.
J. "Liquid supplies" means supply inventory items which are readily marketable, such as tools, fuels, cable, pipe, electric motors, lumbers and the like.
K. "Salvage value" means the sum of the salvage value for plant and equipment, construction-in-progress and supplies. Salvage value shall include a value for land.
L. "Residual value" means the sum of the residual value for plant and equipment, ore reserve, supplies and construction-in- progress. The residual value shall include a value for land. The residual value for plant and equipment is determined by applying the Department's residual factors contained in the Department's percent good factor table.
M. "Prolonged shutdown" means reduction in production to 20 percent or less of the recent historic production for more than 6 months.
Ariz. Admin. Code § R15-4-202