HomeMy WebLinkAboutStaff Report 4.B 8/4/2014DATE:
August 4, 2014
Agenda Item #4.2.
TO: Honorable Mayor and Members of the City Council
FROM: John C. Brown, City Manager
SUBJECT: Adoption of an Ordinance of the City of Petaluma on the Subject of a I%
Transactions and Use Tax Applicable in the City of Petaluma: Ordering the
Submission of the Transactions and Use Tax to the Qualified Electors of the City
at the General Municipal Election to be Held on Tuesday, November 4, 2014;
Approving the Ordinance in Accordance with Revenue and Taxation Code
Section 7285.9; Requesting the Sonoma County Board of Supervisors to
Consolidate Said Election with the November 4, 2014 Statewide General
Election; and Providing for Submission of Ballot Arguments and Rebuttals.
RECOMMENDATION
It is recommended that the City Council adopt the attached Ordinance of the City of Petaluma on
the Subject of a I% Transactions and Use Tax Applicable in the City of Petaluma: Ordering the
Submission of the Transactions and Use Tax to the Qualified Electors of the City at the General
Municipal Election to be Held on Tuesday, November 4, 2014; Approving the Ordinance in
Accordance with Revenue and Taxation Code Section 7285.9; Requesting the Sonoma County
Board of Supervisors to Consolidate Said Election with the November 4, 2014 Statewide General
Election; and Providing for Submission of Ballot Arguments and Rebuttals.
BACKGROUND
At its regular meeting of July 21, 3014, the City Council considered staff recommendations for
type, amount, term, and priorities for placement of a proposed sales tax measure on the
November 2014 ballot. The Council, by a vote of 5-2 introduced the Ordinance for first reading,
for a general tax of one cent, the increase to be permanent. The Council has discussed, as high
priorities for the use of this finding: restoring public safety positions; repairing aging roads and
sidewalks; relocating, modernizing, and expanding fire stations and the police station; replacing
outdated fire engines, ambulances, and police cars; completing flood protection and storm water
projects; and completing the Rainier crosstown connector/interchange.
A,enda Review:
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DISCUSSION
The attached package of legislation is presented to the City Council for second reading and
adoption. As noted in the Backgrowid Section, these materials will enable the City Council to
place before the voters, on November 4, 2014, a general tax measure setting a permanent local
transactions and use tax of one -cent ($.01).
At its July 21, 2014 meeting the Council also discussed selecting three Council members to sign
a ballot argument in favor of the measure, when that document is written. The Council can also
use the opportunity this item provides to agree on those three members. The Argument in Favor
of the Measure is due to the County Registrar of Voters on Monday, August 18, 2014 by 5 PM,
and the August 4, 2014 City Council meeting will be the last regular meeting of the Council prior
to that deadline.
FINANCIAL IMPACT
The cost of placing the recommended measure on the ballot is estimated by the County Clerk to
range from $18,400 top $46,100, depending on voter turn -out on November 4, 2014. Funding for
a tax measure is not yet budgeted for 2014/15; the elections account will need to be augmented
with a transfer from General Fund reserves to support this cost.
ATTACHMENTS:
Ordinance
EFFECTIVE DATE ORDINANCE NO. 2507 N.C.S.
OF ORDINANCE
1 Introduced by Seconded by
3
4
5
6
7
8 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA ON THE SUBJECT
9 OF A 1% TRANSACTIONS AND USE TAX APPLICABLE IN THE CITY OF PETALUMA:
10 ORDERING THE SUBMISSION OF THE TRANSACTIONS AND USE TAX TO THE
11 QUALIFIED ELECTORS OF THE CITY AT THE GENERAL MUNICIPAL ELECTION TO BE
12 HELD ON TUESDAY, NOVEMBER 4,2014; APPROVING THE ORDINANCE IN
13 ACCORDANCE WITH REVENUE AND TAXATION CODE SECTION 7285.9; REQUESTING
14 THE SONOMA COUNTY BOARD OF SUPERVISORS TO CONSOLIDATE SAID ELECTION
15 WITH THE NOVEMBER 4, 2014 STATEWIDE GENERAL ELECTION; AND PROVIDING FOR
16 SUBMISSION OF BALLOT ARGUMENTS AND REBUTTALS
17
18 FINDINGS
19
20 WHEREAS, during the recession beginning in 2007 the City of Petaluma:
21
22 - experienced sales and property tax revenue losses of approximately $9.7
23 million
24 - reduced the City workforce by approximately70 positions (about 20% of the
25 workforce)
26 - reduced General Fund spending from $48.2 million to $32.5 million (about a
27 33% reduction)
28 - lost about $13 million in funding due to elimination of redevelopment
29 agencies; and,
30
31 WHEREAS, the City eliminated the Community Development department, the
32 Animal Services program, and privatized planning, animal care, custodial, and aquatics
33 program services; and,
34
35 WHEREAS, the Petaluma Fire Department currently operates at minimum staffing
36 levels; and,
37
38 WHEREAS, officer staffing in the Petaluma Police Department is at 1995 levels, with
39 15 fewer officers than in 2007; and,
40
41 WHEREAS, Street Crimes, Narcotics and School Resources assignments in the
42 Police Department have been eliminated; and,
43
44 WHEREAS, the cost of providing Police and Fire services in Petaluma currently
45 consumes about 75% of the City's General Fund revenues; and,
Ordinance No. 2507 N.C.S. Page 1
1 WHEREAS, the City has deferred maintenance, repair, and capital costs for
2 facilities, roads, sidewalks, and street lights; and,
3
4 WHEREAS, the City lacks resources to fully fund a storm water facilities/flood
5 protection program; and,
6
7 WHEREAS, Section 7285.9 of the California Revenue and Taxation Code provides
8 that the governing body of any city may levy, increase or extend a transactions and use
9 tax for general purposes at a rate of 0.125 percent or a multiple thereof, if the ordinance
10 proposing that tax is approved by a two-thirds vote of all members of that governing
11 body and the tax is approved by a majority vote of the qualified voters of the city voting
12 in an election on the issue, if adoption of the fax is in the manner prescribed in Section
13 7285.9, and provides that the transactions and use tax shall conform to Part 1.6
14 (commencing with Section 7251) of the California Revenue and Taxation Code; and,
15
16 WHEREAS, California Government Code Section 36934 provides that ordinances
17 shall not be passed within 5 days of their introduction; and,
18
19 WHEREAS, Section 45 of Article VII of the Petaluma City Charter provides that
20 ordinances of the City Council must be advertised once at least two days before
21 adoption in at least one edition of the official newspaper of the city; except that on
22 unanimous vote of the council members present at the meeting when the ordinance is
23 introduced, the advertisement may be done by posting a copy of the original ordinance
24 on the bulletin board at City Hall, and that at the direction of the City Council, a synopsis
25 of the ordinance may be published in lieu of the ordinance in its entirety and the entire
26 text of the ordinance made available to the public through the office of the City Clerk;
27 and,
28
29 WHEREAS, California Government Code Section 36937 provides that ordinances
30 relating to an election or to taxes for the usual and current expenses of a city take effect
31 immediately; and,
32
33 WHEREAS, Section 76A of Title XII of the Petaluma City Charter provides that no
34 ordinance shall become effective until thirty days after the date of its final passage,
35 except for ordinances calling or otherwise relating to an election and ordinances for the
36 immediate preservation of the public peace, health or safety; and,
37
38 WHEREAS, Section 7251.1 of the California Revenue and Taxation Code provides
39 that the combined rate of all transactions and use taxes in any county may not exceed
40 2 percent; and,
41
42 WHEREAS, current sales tax rates in Sonoma County are as follows:
43
44 Cloverdale 8.25%
45 Cotati 9.25%
46 Healdsburg 8.75%
47 Petaluma 8.25%
48 Rohnert Park 8.75%
49 Santa Rosa 8.75%
50 Sebastopol 9.00%
51 Sonoma 8.75%
52 Sonoma County 8.25%
53 Windsor 8.25%; and,
54
Ordinance No. 2507 N.C.S. Page 2
I WHEREAS, in accordance with California Revenue and Taxation Code section
2 7251.1, the Petaluma voters may adopt a local transactions and use tax of up to 1.25% to
3 be applicable in the City; and,
4
5 WHEREAS, imposition of a I% transactions and use tax in Petaluma would
6 generate approximately $10 million annually; and,
7
8 WHEREAS, in accordance with Article 13C, Section 2, subdivision (a) of the
9 California Constitution, any tax imposed for general governmental purposes the
10 proceeds of which are placed in the general fund and available for expenditure for any
11 and all governmental purposes is a general tax, including where such proceeds are
12 monitored and tracked separately from other tax receipts (see, e.g., Weisbiat v. City of
13 San Diego (2009) 176 CA4th 1022); and,
14
15 WHEREAS, Subdivision (b) of Section 2 of Article XIIIC of the California Constitution
16 requires that elections to approve a general tax must be consolidated with a regularly -
17 scheduled general election for members of the governing body of the local
18 government; and,
19
20 WHEREAS, November 4, 2014 is the date of the City's next regular municipal
21 election for members of the City Council; and,
22
23 WHEREAS, Section 4 of Article III of the Petaluma City Charter provides that except
24 as otherwise specified in the charter, all regular and special city elections are to be held
25 in accordance with the California Elections Code, as amended; and,
26
27 WHEREAS, Section 76 of Article XII of the Petaluma City Charter provides that
28 ordinances may be enacted by and for the city pursuant to Division 4 of Chapter 3 of
29 Article 1 of the California Elections Code, as amended; and,
30
31 WHEREAS, Sections 9200 - 9226 of the California Elections Code set forth the
32 procedures and requirements for the submission of measures to the voters and
33 placement of measures on the ballot, Sections 10400 - 10418 of the California Elections
34 Code set forth the procedures and requirements for consolidation of municipal and
35 statewide elections, and Sections 9280 - 9287 of the California Elections Code set forth
36 the procedures and requirements for submission of ballot arguments, rebuttal arguments
37 and preparation of impartial analysis; and,
38
39 WHEREAS, the transactions and use tax measure to be submitted to Petaluma
40 voters pursuant to this ordinance, if approved by a vote of at least 5 City Council
41 Members and by a majority vote of qualified City voters, would impose a 1% tax based
42 on the retail sales price of personal property sales and use; and,
43
44 WHEREAS, this ordinance and the transactions and use tax measure to be
45 submilted to the voters pursuant to this ordinance are not a project subject to the
46 California Environmental Quality Act or its Guidelines in accordance with paragraph (2)
47 of subdivision (c) of Section 15060, and paragraph (4) of subdivision (b) of Section 15378
48 of Title 14 of the California Code of Regulations, because this ordinance and the tax
49 measure to be submitted to the voters pursuant to this ordinance involve the creation of
50 government funding mechanisms and other government fiscal activities that do not
51 involve any commitment to any specific project that may result in a potentially significant
52 physical impact on the environment.
53
Ordinance Ido. 2507 N.C.S. Page 3
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS
FOLLOWS:
The above Findings are true and correct and hereby adopted by the City
Council.
2. Pursuant to the requirements of the City of Petaluma Charter, California
Revenue and Taxation Code Section 7285.9, California Elections Code Section 9222 and
other applicable law, there is called and ordered to be held in the City of Petaluma,
California, on Tuesday, November 4, 2014 an election for the purpose of submitting to the
voters a measure that would impose a 1 % transactions and use tax.
3. The ballot language for the proposed ordinance shall be as follows:
MEASURE
Shall the BETTER ROADS SAFER PETALUMA MEASURE, a general
transactions and use tax of 1 cent, with all proceeds placed in the
Petaluma General Fund for governmental purposes such as street
and sidewalk maintenance and repair, traffic improvements like the YES NO
Rainier Crosstown Connector/Interchange, flood protection, storm
drainage, vehicle replacement, restoring public safety positions,
and public facilities improvements, among others, with local control
of tax proceeds, and independent review and reporting on
expenditures, be adopted?
4. The measure to be approved by the voters pursuant to Section 2 of this
ordinance is as set forth in Exhibit A attached hereto.
5. The City Council hereby approves the ordinance set forth in Exhibit A and
this ordinance ordering submission of the measure to City voters in accordance with
California Revenue and Taxation Code Section 7285.9.
b. (a) An election on the measure set forth in Exhibit A shall be held in
conjunction with the municipal election to be held in the City of Petaluma on Tuesday,
November 4, 2014. In accordance with the Petaluma City Charter and California
Elections Code Section 10403, the City Council requests that the Board of Supervisors of
Sonoma County consolidate the election on the measure with the statewide general
election on the some day and issue instructions to the Sonoma County Election
Department to take any and all steps necessary for the holding of the consolidated
election.
(b) The City Council acknowledges that the consolidated election will
be held and conducted in the manner prescribed in California Elections Code Section
10418.
(c) The election on the measure set forth in Exhibit A shall be held and
conducted, the votes canvassed and the returns made, and the results ascertained and
determined as provided for herein and the California Elections Code.
(d) The election for the measure set forth in Exhibit A shall be held in
Sonoma County in the City of Petaluma on November 4, 2014, as required by law, and
Ordinance No. 2507 N.C.S. Page 4
I the Sonoma County Election Department is authorized to canvas the returns of that
2 election with respect to the votes cast in the City of Petaluma.
3
4 (e) In accordance with and subject to the Petaluma City Charter, at
5 the next regular meeting of the City Council of the City of Petaluma occurring after the
6 returns of the election for the measure set forth in Exhibit A have been canvassed and
7 the certification of the results to the City Council, the City Council shall cause to be
8 entered in its minutes a statement of the results of the election.
9
10 7. (a) In accordance with California Elections Code Sections 9282 and
11 9283, arguments submitted for or against the measure shall not exceed 300 words in
12 length, and shall be printed upon the same sheet of paper and mailed to each voter
13 with the sample ballot for the election and be signed by not more than five persons.
14
15 (b) In accordance with California Elections Code Section 9282, the
16 following headings, as appropriate, shall precede the arguments' wording, but shall not
17 be counted in the 300 word maximum: "Argument In Favor of Measure _" or,
18 "Argument Against Measure " (the blank spaces being filled only with the letter
19 or number, if any, designating the measure).
20
21 (c) In accordance with California Elections Code Section 9283,
22 printed arguments submitted to voters in accordance with Section 9282 of the Elections
23 Code shall be filed with the City Clerk, accompanied by the printed name(s) and
24 signatures) of the outhor(s) submitting it, or if submitted on behalf of an organization, the
25 name of the organization and the printed name and signature of at least of one its
26 principal officers who is the author of the argument. Arguments are due in the office of
27 the City Clerk prior to 5:00 p.m. on Monday, August 18, 2014.
28
29 8. (a) Pursuant to California Elections Code Section 9285, when the City
30 Clerk has selected arguments for and against the measure that will be printed and
31 distributed to the voters, the City Clerk shall send copies of the argument in favor of the
32 measure to the authors of the argument against, and copies of the argument against to
33 the authors of the argument in favor. Rebuttal arguments shall be printed in the same
34 manner as the direct arguments. Each rebuttal argument shall immediately follow the
35 direct argument that it seeks to rebut.
36
37 (b) Rebuttal arguments shall not exceed two hundred fifty words and
38 be signed by not more than five persons The author or a majority of authors of an
39 argument relating to a City measure may prepare and submit a rebuttal argument or
40 may authorize in writing any other person or persons to prepare, submit, or sign the
41 rebuttal argument.
42
43 (c) The last day for submission of rebuttal arguments for or against the
44, measure shall be by 5:00 p.m. on Thursday, August 28, 2014.
45
46 (d) All previous resolutions or ordinances providing for the filing of
47 rebuttal arguments for City of Petaluma measures are repealed. The provisions of this
48 ordinance concerning rebuttal arguments shall only apply to the election to be held on
49 November 4, 2014, and following the conclusion of that election are repealed.
50
51 9. In accordance with California Elections Code Section 9280, the City
52 Attorney is directed to file with the City Clerk by Monday, August 18, 2014, an impartial
53 analysis of the measure, not to exceed five hundred words, showing the effect of the
54 measure.
Ordinance No. 2507 N.C.S. Page 5
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10. The City of Petaluma recognizes that additional costs may be incurred by
the County by reason of the measure and agrees to reimburse the County for such costs.
The City Manager is hereby authorized and directed to appropriate the necessary funds
to pay for the City's cost of placing the measure on the election ballot.
IL . (a) The City Clerk is directed to file a certified copy of this ordinance
with the Board of Supervisors of Sonoma County and the Sonoma County Elections
Department on or before Friday, August 8, 2014. The City Clerk is hereby authorized and
directed to take all steps necessary to place the measure on the ballot and to give legal
notice of the measure attached as Exhibit A to be published once in a newspaper of
general circulation, or any other newspaper designated as the official newspaper of the
City of Petaluma, in accordance with California Elections Code Section 12111 and
California Government Code Section 6061. A copy of the measure shall be made
available to any voter upon request. The City Clerk is authorized and directed to give
further additional notice of the measure in time, form and manner as required by law.
(b) In all particulars not recited in this ordinance, the election shall be
held and conducted as provided by law for holding municipal elections.
INTRODUCED and ordered posted/published this 21st day of July, 2014.
ADOPTED this day of , 2014 by the following vote:
Ayes:
Noes:
Abstain:
Absent:
ATTEST:
Claire Cooper, CMC, City Clerk
David Glass, Mayor
APPROVED AS TO FORM:
Eric W. Donly, City Attorney
Ordinance No. 2507 N.C.S.
Page 6
1 EXHIBIT A
3
4 ORDINANCE NO.
6 AN ORDINANCE OF THE PEOPLE OF THE CITY OF PETALUMA
7 ADDING A NEW CHAPTER 4.18 TO THE PETALUMA MUNICIPAL CODE TO IMPOSE A
8 ONE -CENT TRANSACTIONS AND USE TAX FOR GENERAL PURPOSES TO BE
9 ADMINISTERED BY THE STATE BOARD OF EQUALIZATION
10
11 FINDINGS
12
13 WHEREAS, during the recession beginning in 2007 the City of Petaluma:
14 - experienced sales and property tax revenue losses of approximately $9.7 million
15 - reduced the City workforce by 70 positions (about 20% of the workforce)
16 - reduced General Fund spending from $48.2 million to $32.5 million (about a 33%
17 reduction)
18 - lost about $13 million in funding due to elimination of redevelopment agencies; and,
19
20 WHEREAS, the City eliminated the Community Development department, the Animal
21 Services program, and privatized planning, animal care, custodial, and aquatics program
22 services; and,
23
24 WHEREAS, the Petaluma Fire Department currently operates at minimum staffing levels;
25 and,
26
27 WHEREAS, officer staffing in the Petaluma Police Department is at 1995 levels, with 15
28 fewer officers than in 2007; and,
29
30 WHEREAS, Street Crimes, Narcotics and School Resources assignments in the Police
31 Department have been eliminated; and,
32
33 WHEREAS, the cost of providing police and fire services in Petaluma currently consumes
34 about 75% of the City's General Fund revenues; and,
35
36 WHEREAS, the City has deferred maintenance, repair, and capital costs for facilities,
37 roads, sidewalks, and street lights; and,
38
39 WHEREAS, the City lacks resources to fully fund a stormwater facilities/flood protection
40 program; and,
41
42 WHEREAS, Section 7285.9 of the California Revenue and Taxation Code provides that the
43 governing body of any city may levy, increase or extend a transactions and use tax for general
44 purposes at a rate of 0.125 percent or a multiple thereof, if the ordinance proposing that tax is
45 approved by a two-thirds vote of all members of that governing body and the tax is approved
46 by a majority vote of the qualified voters of the city voting in on election on the issue, if adoption
47 of the tax is in the manner prescribed in Section 7285.9, and provides that the transactions and
48 use tax shall conform to Part 1.6 (commencing with Section 725 1) of the California Revenue and
49 Taxation Code; and,
50
51 WHEREAS, Section 7251.1 of the California Revenue and Taxation Code provides that the
52 combined rate of all transactions and use taxes in any county may not exceed 2 percent; and,
53
Ordinance No. 2507 N.C.S. Page 7
1 WHEREAS, current sales tax rates in Sonoma County are as follows:
3 Cloverdale 8.25%
4 Cotati 9.25%
5 Healdsburg 8.75%
6 Petaluma 8.25%
7 Rohnert Park 8.75%
8 Santa Rosa 8.75%
9 Sebastopol 9.00%
10 Sonoma 8.75%
11 Sonoma County 8.25%
12 Windsor 8.25%; and,
13
14 WHEREAS, in accordance with California Revenue and Taxation Code sections 7251.1
15 and 7285.9, the Petaluma voters may adopt a local transactions and use tax of up to 1/25% to
16 be applicable in the City; and,
17
18 WHEREAS, imposition of a 1 % transactions and use tax in Petaluma would generate
19 approximately $10 million annually; and,
20
21 WHEREAS, in accordance with Article 13C, Section 2, subdivision (a) of the California
22 Constitution, any tax imposed for general governmental purposes the proceeds of which are
23 placed in the general fund and available for expenditure for any and all governmental
24 purposes is a general tax, including where such proceeds are monitored and tracked separately
25 from other tax receipts (see, e.g., Weisblat v. City of San Diego (2009) 176 CA4th 1022); and,
26
27 WHEREAS, Subdivision (b) of Section 2 of Article XIIIC of the California Constitution requires
28 that elections to approve a general tax must be consolidated with a regularly -scheduled
29 general election for members of the governing body of the local government; and,
30
31 WHEREAS, November 4, 2014 is the date of the City's next regular municipal election for
32 members of the City Council; and,
33
34 WHEREAS, Section 4 of Article III of the Petaluma City Charter provides that except as
35 otherwise specified in the charter, all regular and special city elections are to be held in
36 accordance with the California Elections Code, as amended; and,
37
38 WHEREAS, Section 76 of Article Al of the Petaluma City Charter provides that ordinances
39 may be enacted by and for the city pursuant to Division 4 of Chapter 3 of Article 1 of the
40 California Elections Code, as amended.
41
42 NOW, THEREFORE, THE PEOPLE OF THE CITY OF PETALUMA DO ORDAIN AS FOLLOWS:
43
44 Section 1. Chapter 4.18 entitled "Transactions and Use Tax" is hereby added to Title 4 of
45 the Petaluma Municipal Code, to read as follows:
46
47 4.18.010 TITLE. This chapter is entitled "Transactions and Use Tax" and shall be
48 applicable in the incorporated territory of the city.
49
50 4.18.020 OPERATIVE DATE. "Operative Date" means the first day of the first
51 calendar quarter commencing more than 110 days after the adoption of this chapter, the date
52 of such adoption being as set forth below.
53
Ordinance No. 2507 H.C.S. Page 8
1 4.18.030 PURPOSE. This chapter is adopted to achieve the following, among other
2 purposes. The provisions of this chapter shall be interpreted in order to accomplish these
3 purposes:
4 A. To impose a retail transactions and use tax for general purposes in accordance
5 with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the California
6 Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2, which authorizes the
7 city to adopt this chapter, which shall be operative if a majority of the electors voting on the
8 measure vote to approve the imposition of the tax at on election called for that purpose.
9
10 B. To adopt a retail transactions and use tax ordinance that incorporates provisions
11 identical to those of the Sales and Use Tax Law of the State of California insofar as those
12 provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of
13 Division 2 of the California Revenue and Taxation Code.
14
15 C. To adopt a retail transactions and use tax ordinance that imposes a tax and
16 provides a measure therefore that can be administered and collected by the State Board of
17 Equalization in a manner that adapts itself as fully as practicable to, and requires the least
18 possible deviation from, the existing statutory and administrative procedures followed by the
19 State Board of Equalization in administering and collecting California State Sales and Use Taxes.
20
21 D. To adopt a retail transactions and use tax ordinance that can be administered in
22 a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6
23 of Division 2 of the California Revenue and Taxation Code, minimize the cost of collecting the
24 transactions and use taxes, and at the same time, minimize the burden of record keeping upon
25 persons subject to taxation under the provisions of this chapter.
26
27 4.18.040 CONTRACT WITH STATE. Prior to the operative date, the city shall contract
28 with the State Board of Equalization to perform all functions incident to the administration and
29 operation of this chapter; provided, that if the city shall not have contracted with the State
30 Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a
31 case the operative date shall be the first day of the first calendar quarter following the
32 execution of such a contract.
33
34 4.18.050 TRANSACTIONS TAX RATE. For the privilege of selling tangible personal
35 property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the
36 city at the rate of 1.0% of the gross receipts of any retailer from the sale of all tangible personal
37 property sold at retail in said territory on and after the operative date of this chapter.
38
39 4.18.060 PLACE OF SALE. For the purposes of this chapter, all retail sales are
40 consummated at the place of business of the retailer unless the tangible personal property sold
41 is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for
42 delivery to an out-of-state destination. The gross receipts from such sales shall include delivery
43 charges, when such charges are subject to the state sales and use tax, regardless of the place
44 to which delivery is made. In the event a retailer has no permanent place of business in the
45 State or has more than one place of business, the place or places at which the retail sales are
46 consummated shall be determined under rules and regulations to be prescribed and adopted
47 by the State Board of Equalization.
48
49 4.18.070 USE TAX RATE. An excise tax is hereby imposed on the storage, use or
50 other consumption in the city of tangible personal property purchased from any retailer on and
51 after the operative date of this chapter for storage, use or other consumption in said territory at
52 the rate of 1.0% of the sales price of the property. The sales price shall include delivery charges
53 when such charges are subject to state sales or use tax regardless of the place to which delivery
54 is made.
Ordinance Ido. 2507 N.C.S. Page 9
I
2 4.18.080. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in
3 this chapter and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2
4 of the California Revenue and Taxation Code, all of the provisions of Part I (commencing with
5 Section 6001) of Division 2 of the California Revenue and Taxation Code are hereby adopted
6 and made a part of this chapter as though fully set forth herein.
7
8 4.18.090. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES.
9 In adopting the provisions of Part 1 of Division 2 of the California Revenue and Taxation Code:
10
11 A. Wherever the State of California is named or referred to as the taxing agency, the
12 name of the city shall be substituted therefor. However, the substitution shall not be made
13 when:
14
15 1. The word "State" is used as a part of the title of the State Controller, State
16 Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution
17 of the State of California;
18
19 2. The result of that substitution would require action to be taken by or
20 against this city or any agency, officer, or employee thereof rather than by or against the State
21 Board of Equalization, in performing the functions incident to the administration or operation of
22 this chapter.
23
24 3. In those sections, including, but not necessarily limited to, sections referring
25 to the exterior boundaries of the State of California, where the result of the substitution would be
26 to:
27
28 a. Provide an exemption from this tax with respect to certain sales,
29 storage, use or other consumption of tangible personal property which would not otherwise be
30 exempt from this tax while such sales, storage, use or other consumption remain subject to tax
31 by the State under the provisions of Part 1 of Division 2 of the California Revenue and Taxation
32 Code, or;
33
34 b. Impose this tax with respect to certain sales, storage, use or other
35 consumption of tangible personal property which would not be subject to tax by the state under
36 the said provision of that code.
37
38 4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715,
39 6737, 6797 or 6828 of the California Revenue and Taxation Code.
40
41 B. The word "city" shall be substituted for the word "State" in the phrase "retailer
42 engaged in business in this State" in Section 6203 and in the definition of that phrase in Section
43 6203 in the California Revenue and Taxation Code.
44
45 4.18.100 PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer
46 under Section 6067 of the California Revenue and Taxation Code, an additional transactor's
47 permit shall not be required by this chapter.
48
49 4.18.110 EXEMPTIONS AND EXCLUSIONS.
50
51 A. There shall be excluded from the measure of the transactions tax and the use tax
52 the amount of any sales tax or use tax imposed by the Slate of California or by any city, city and
53 county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the
54 amount of any state -administered transactions or use tax.
Ordinance No. 2507 N.C.S. Page 10
1
2 B. There are exempted from the computation of the amount of transactions tax the
3 gross receipts from:
4 1. Sales of tangible personal property, other than fuel or petroleum products,
5 to operators of aircraft to be used or consumed principally outside the county in which the sale
6 is made and directly and exclusively in the use of such aircraft as common carriers of persons or
7 property under the authority of the laws of this State, the United States, or any foreign
8 government.
9
10 2. Sales of property to be used outside the city which is shipped to a point
11 outside the city, pursuant to the contract of sale, by delivery to such point by the retailer or his
12 agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For
13 the purposes of this paragraph, delivery to a point outside the city shall be satisfied:
14
15 a. With respect to vehicles (other than commercial vehicles) subject
16 to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the
17 California Vehicle Code, aircraft licensed in compliance with Section 21411 of the California
18 Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with
19 Section 9840) of the California Vehicle Code, by registration to an out -of -city address and by a
20 declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his
21 or her principal place of residence; and
23 b. With respect to commercial vehicles, by registration to a place of
24 business out -of -city and declaration under penalty of perjury, signed by the buyer, that the
25 vehicle will be operated from that address.
26
27 3. The sale of tangible personal property if the seller is obligated to furnish
28 the property for a fixed price pursuant to a contract entered into prior to the operative date of
29 this chapter.
30
31 4. A lease of tangible personal property which is a continuing sale of such
32 property, for any period of time for which the lessor is obligated to lease the property for an
33 amount fixed by the lease prior to the operative date of this chapter.
34
35 5. For the purposes of subparagraphs (3) and (4) of this section, the sale or
36 lease of tangible personal property shall be deemed not to be obligated pursuant to a contract
37 or lease for any period of time for which any party to the contract or lease has the unconditional
38 right to terminate the contract or lease upon notice, whether or not such right is exercised.
39
40 C. There are exempted from the use tax imposed by this chapter, the storage, use or
41 other consumption in this city of tangible personal property:
42
43 1. The gross receipts from the sale of which have been subject to a
44 transactions tax under any state -administered transactions and use tax ordinance.
45
46 2. Other than fuel or petroleum products purchased by operators of aircraft
47 and used or consumed by such operators directly and exclusively in the use of such aircraft as
48 common carriers of persons or property for hire or compensation under a certificate of public
49 convenience and necessity issued pursuant to the laws of this State, the United States, or any
50 foreign government. This exemption is in addition to the exemptions provided in Sections 6366
51 and 6366.1 of the Revenue and Taxation Code of the State of California.
52
53 3. If the purchaser is obligated to purchase the property for a fixed price
54 pursuant to a contract entered into prior to the operative date of this chapter.
Ordinance Ho. 2507 H.C.S. Page 1 1
1
2 4. If the possession of, or the exercise of any right or power over, the tangible
3 personal property arises under a lease which is a continuing purchase of such property for any
4 period of time for which the lessee is obligated to lease the property for an amount fixed by a
5 lease prior to the operative date of this chapter.
6
7 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use,
8 or other consumption, or possession of, or exercise of any right or power over, tangible personal
9 property shall be deemed not to be obligated pursuant to a contract or lease for any period of
10 time for which any party to the contract or lease has the unconditional right to terminate the
11 contract or lease upon notice, whether or not such right is exercised.
12
13 6. Except as provided in subparagraph (7), a retailer engaged in business in
14 the city shall not be required to collect use tax from the purchaser of tangible personal property,
15 unless the retailer ships or delivers the property into the city or participates within the city in
16 making the sale of the property, including, but not limited to, soliciting or receiving the order,
17 either directly or indirectly, at a place of business of the retailer in the city or through any
18 representative, agent, canvasser, solicitor, subsidiary, or person in the city under the authority of
19 the retailer.
20
21 7. "A retailer engaged in business in the city" shall also include any retailer of
22 any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with
23 Section 4000) of Division 3 of the California Vehicle Code, aircraft licensed in compliance with
24 Section 21411 of the California Public Utilities Code, or undocumented vessels registered under
25 Division 3.5 (commencing with Section 9840) of the California Vehicle Code. That retailer shall
26 be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or
27 aircraft at an address in the city.
28
29 D. Any person subject to use tax under this chapter may credit against that tax any
30 transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable
31 for a transactions tax pursuant to Part 1.6 of Division 2 of the California Revenue and Taxation
32 Code with respect to the sale to the person of the property the storage, use or other
33 consumption of which is subject to the use tax.
34
35 4.18.120 AMENDMENTS. All amendments subsequent to the effective date of this
36 chapter to Part 1 of Division 2 of the California Revenue and Taxation Code relating to sales and
37 use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the California
38 Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the
39 California Revenue and Taxation Code, shall automatically become a part of this chapter,
40 provided however, that no such amendment shall operate so as to affect the rate of tax
41 imposed by this chapter.
42
43 4.18.130 ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or
44 other legal or equitable process shall issue in any suit, action or proceeding in any court against
45 the State or the city, or against any officer of the State or the city, to prevent or enjoin the
46 collection under this chapter, or Part 1.6 of Division 2 of the California Revenue and Taxation
47 Code, of any tax or any amount of fax required to be collected.
48
49 4.18.140 ACCOUNTABILITY MEASURES.
50
51 A. The proceeds of the tax imposed pursuant to this chapter shall be placed in the
52 City's General Fund and available for expenditure for any and all governmental purposes such
53 as street and sidewalk maintenance and repair, traffic improvements like the Rainier Crosstown
54 Connector/Interchange, flood protection, storm drainage, vehicle replacement, restoring public
Ordinance No. 2507 N.C.S. Page 12
I safety positions, and public facilities improvements, among others. Such proceeds and
2 expenditures using such proceeds shall be monitored and tracked separately from other tax
3 receipts deposited in the city's General Fund.
4
5 B. The City Council shall appoint an independent citizen oversight committee of five
6 members to review and report on the use of proceeds of the tax imposed pursuant to this
7 chapter. The committee members shall be city residents who pay the tax imposed pursuant to
8 this chapter and who are not employees or elected officials of the city or members of any other
9 city body. The city will provide administrative support necessary for the oversight committee to
10 carry out its functions.
11
12 C. The City's Finance Director will oversee preparation of a quarterly report for
13 submission to the oversight committee and publication on the City's website on all tax proceeds
14 collected pursuant to this chapter and use of the proceeds. The citizen oversight committee will
15 meet annually to review and comment on the report. The meetings and records of the
16 oversight committee will be open to the public in accordance with Article 1, Section 3,
17 subdivision (b) of the California Constitution, and the requirements of the Ralph M. Brown Act,
18 California Government Code Section 54950 and following, and the California Public Records
19 Act, California Government Code Section 6250 and following, as amended from time to time.
20
21 Section 2. SEVERABILITY. If any provision of this ordinance or the application thereof to any
22 person or circumstance is held invalid, the remainder of the ordinance and the application of
23 such provision to other persons or circumstances shall not be affected thereby.
24
25 Section 3. EFFECTIVE DATE. This ordinance relates to the levying and collecting of City
26 transactions and use taxes and shall take effect upon approval of a majority of the qualified
27 voters of the City subject to California Revenue and Taxation Code Section 7285.9 and other
28 applicable law.
29
30 Section 4. EXPIRATION DATE. The authority to levy the tax imposed by this ordinance shall
31 not expire but remain in full force and effect unless and until this ordinance is suspended,
32 repealed or otherwise amended in accordance with applicable law.
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Ordinance No. 2507 N.C.S. Page 13