HomeMy WebLinkAboutOrdinance 1022,.__
CITY OF LARKSPUR
ORDINANCE No. 1022/17
AN ORDINANCE OF THE CITY OF LARKSPUR
AMENDING AND RESTATING CHAPTER 3.24 OF THE LARKSPUR
MUNICIPAL CODE, SUPERSEDING SIMILAR CHANGES
MADE BY ORDINANCE NO. 1019/17, ANDIMPOSING A LOCAL
TRANSACTIONS AND USE (SALES) TAX TO BE ADMINISTERED BY THE
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
WHEREAS, many of Larkspur's neighborhood streets and roads are
deteriorating and riddled with cracks; and
WHEREAS, the City seeks to address aging road conditions for the safety
of motorists, buses, cyclists, police and fire safety vehicles and the best
approach to doing so is to accelerate road repairs so all City roads can be
repaved within 5 years; and
WHEREAS, doing so will not only maintain safety, but prevent further
deterioration, and lower future maintenance costs as delaying maintenance and
repairs to Larkspur's streets and roads only increases costs in the long-run by as
much as 40 times higher; and
WHEREAS, funding is also needed to continue to clear hazardous and
flammable brush, prevent fires and improve emergency vehicle access, improve
drainage in low-lying areas, and retrofit buildings, storm drains and other
infrastructure so Larkspur is prepared for natural disasters such as fires, floods
and earthquakes; and
WHEREAS, local, voter-approved funding by Larkspur residents has been
critical in preventing our roads from falling into further disrepair-maintaining this
funding is essential to keeping our roads safe; and
WHEREAS, 90% of existing local, voter-approved funding was spent on
road repair and none was spent on salaries or pensions; and
WHEREAS, with recent political changes, the City of Larkspur cannot
count on federal or state governments to provide funding as they've done in the
past--only by maintaining control locally can the City ensure road repairs, police
protection, fire services, storm drain repairs, and other essential city services are
adequately preserved; and
WHEREAS, previous voter-approved local funding will expire and needs
to be renewed; and
WHEREAS, at its June 7, 2017 meeting, the City Council adopted a
budget for Fiscal Year 2017-18 that recognizes the need for additional revenue to
continue to address aging road conditions, clear hazardous and flammable
brush, prevent fires and improve emergency vehicle access, improve drainage in
low-lying areas, and retrofit buildings, storm drains and other infrastructure, and
fund general municipal services; and
WHEREAS, to obtain the revenue necessary for those projects and
services and to maintain general municipal services, the City Council has
concluded that it should call an election to ask the voters of the City to continue
its local transactions and use tax ("sales tax") at the three-quarter cent rate; and
WHEREAS, the tax to be submitted to the voters, if approved, would be
imposed on the sale of tangible personal property and the storage, use, or other
consumption of such property; the tax rate would be three-quarters of a cent for
each dollar (0.75%) of the sales price of the property; the tax revenue would be
1
L
collected by the State Board of Equalization and remitted to the City; and the tax
shall be approved if the measure receives at least a simple majority vote of
affirmative votes; and
WHEREAS, at the November 2013 election, the voters of the City of
Larkspur approved Measure C, a local, half-cent transactions and use tax, to be
in effect for five years and sunset in 2018. Measure C was codified as Chapter
3 .24 of the Larkspur Municipal Code. On July 26, 2017, the Larkspur City Council
adopted Ordinance No. 1019/17, which amended the Municipal Code to extend
the Measure C tax at the three-quarter cent rate, subject to voter approval. The
City Council subsequently determined that additional changes to Chapter 3.24
should be made. This ordinance amends and restates Chapter 3.24, as amended
by Ordinance 1019/17. The changes made by this ordinance will only go into
effect if the related measure on the November 7, 2017 ballot (Measure B) is
approved by a simple majority of Larkspur voters who vote on the measure.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LARKSPUR DOES
HEREBY ORDAIN AS FOLLOWS:
Section 1. Recitals . The above Recitals are true and correct and are
incorporated herein by reference.
Section 2. Amendment of Larkspur Municipal Code Chapter 3 .24 . Chapter
3.24 of the Larkspur Municipal Code is hereby amended and
restated to read as follows:
3.24.010 Title .
This ordinance shall be known as the Larkspur Transactions and Use Tax
Ordinance. The City of Larkspur hereinafter shall be called "City." This
Ordinance shall be applicable in the incorporated territory of the City.
3.24.020. Operative Date .
"Operative Date" means the first day of the first calendar quarter
commencing more than 110 days after the adoption of this Ordinance, the
date of such adoption being as set forth below.
3.24.030 Purpose .
This Ordinance is adopted to achieve the following, among other
purposes, and directs that the provisions hereof be interpreted in order to
accomplish those purposes:
A. To impose a retail transactions and use tax in accordance with the
provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the
Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2
which authorizes the City to adopt this tax ordinance which shall be operative
if a majority of the electors voting on the measure vote to approve the
imposition of the tax at an election called for that purpose.
B. To adopt a retail transactions and use tax ordinance that incorporates
provisions identical to those of the Sales and Use Tax Law of the State of
California insofar as those provisions are not inconsistent with the
requirements and limitations contained in Part 1.6 of Division 2 of the
Revenue and Taxation Code.
C. To adopt a retail transactions and use tax ordinance that imposes a tax
and provides a measure therefore that can be administered and collected by
the California Department of Tax and Fee Administration in a manner that
adapts itself as fully as practicable to, and requires the least possible
deviation from, the existing statutory and administrative procedures followed
by the California Department of Tax and Fee Administration in administering
and collecting the California State Sales and Use Taxes.
2
D . To adopt a retail transactions and use tax ordinance that can be
administered in a manner that will be, to the greatest degree possible,
consistent with the provisions of Part 1.6 of Division 2 of the Revenue and
Taxation Code, minimize the cost of collecting the transactions and use taxes,
and at the same time, minimize the burden of record keeping upon persons
subject to taxation under the provisions of this ordinance
3.24 .040 Contract with State ..
Prior to the operative date, the City shall contract with the California
Department of Tax and Fee Administration to perform all functions incident to
the administration and operation of this transactions and use tax ordinance;
provided, that if the City shall not have contracted with the California
Department of Tax and Fee Administration prior to the operative date, it shall
nevertheless so contract and in such a case the operative date shall be the
first day of the first calendar quarter following the execution of such a
contract.
3.24.050 Transactions Tax Rate .
For the privilege of selling tangible personal property at retail, a tax is
hereby imposed upon all retailers in the incorporated territory of the City at
the rate of 0.75% of the gross receipts of any retailer from the sale of all
tangible personal property sold at retail in said territory on and after the
operative date of this ordinance.
3.24.060 Place of Sale .
For the purposes of this ordinance, all retail sales are consummated at the
place of business of the retailer unless the tangible personal property sold is
delivered by the retailer or his agent to an out-of-state destination or to a
common carrier for delivery to an out-of-state destination . The gross receipts
from such sales shall include delivery charges, when such charges are
subject to the state sales and use tax, regardless of the place to which
delivery is made. In the event a retailer has no permanent place of business
in the State or has more than one place of business, the place or places at
which the retail sales are consummated shall be determined under rules and
regulations to be prescribed and adopted by the California Department of Tax
and Fee Administration.
3.24.070 Use Tax Rate .
An excise tax is hereby imposed on the storage, use or other consumption
in the City of tangible personal property purchased from any retailer on and
after the operative date of this ordinance for storage, use or other
consumption in said territory at the rate of 0. 75% of the sales price of the
property. The sales price shall include delivery charges when such charges
are subject to state sales or use tax regardless of the place to which delivery
is made.
3.24 .080 Adoption of Provisions of State Law .
Except as otherwise provided in this ordinance and except insofar as they
are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue
and Taxation Code, all of the provisions of Part 1 (commencing with Section
6001) of Division 2 of the Revenue and Taxation Code are hereby adopted
and made a part of this ordinance as though fully set forth herein.
3.24.090 . Limitations on Adoption of State Law and Collection of Use
Taxes.
3
In adopting the provisions of Part 1 of Division 2 of the Revenue and
Taxation Code:
A. Wherever the State of California is named or referred to as the taxing
agency, the name of this City shall be substituted therefor. However, the
substitution shall not be made when:
1. The word "State" is used as a part of the title of the State Controller,
State Treasurer, State Treasury, or the Constitution of the State of
California;
2 . The result of that substitution would require action to be taken by or
against this City or any agency, officer, or employee thereof rather than
by or against the California Department of Tax and Fee Administration,
in performing the functions incident to the administration or operation
of this Ordinance.
3. In those sections, including, but not necessarily limited to sections
referring to the exterior boundaries of the State of California, where the
result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales,
storage, use or other consumption of tangible personal property
which would not otherwise be exempt from this tax while such
sales, storage, use or other consumption remain subject to tax by
the State under the provisions of Part 1 of Division 2 of the
Revenue and Taxation Code, or;
b. Impose this tax with respect to certain sales, storage, use or other
consumption of tangible personal property which would not be
subject to tax by the state under the said provision of that code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711,
6715, 6737, 6797 or 6828 of the Revenue and Taxation Code .
B . The word "City" shall be substituted for the word "State" in the phrase
"retailer engaged in business in this State" in Section 6203 and in the
definition of that phrase in Section 6203.
3.24.100 Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the
Revenue and Taxation Code, an additional transactor's permit shall not be
required by this Ordinance.
3.24.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and
the use tax the amount of any sales tax or use tax imposed by the State of
California or by any city, city and county, or county pursuant to the Bradley-
Burns Uniform Local Sales and Use Tax Law or the amount of any state-
administered transactions or use tax.
B. There are exempted from the computation of the amount of
transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum
products, to operators of aircraft to be used or consumed principally
outside the county in which the sale is made and directly and
exclusively in the use of such aircraft as common carriers of persons or
property under the authority of the laws of this State, the United States,
or any foreign government.
2 . Sales of property to be used outside the City which is shipped to a
point outside the City, pursuant to the contract of sale, by delivery to
such point by the retailer or his agent, or by delivery by the retailer to a
carrier for shipment to a consignee at such point. For the purposes of
this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to
registration pursuant to Chapter 1 (commencing with Section 4000)
of Division 3 of the Vehicle Code, aircraft licensed in compliance
with Section 21411 of the Public Utilities Code, and undocumented
vessels registered under Division 3.5 (commencing with Section
4
9840) of the Vehicle Code by registration to an out-of-City address
and by a declaration under penalty of perjury, signed by the buyer,
stating that such address is, in fact, his or her principal place of
residence; and
b. With respect to commercial vehicles, by registration to a place of
business out-of-City and declaration under penalty of perjury,
signed by the buyer, that the vehicle will be operated from that
address.
3 . The sale of tangible personal property if the seller is obligated to
furnish the property for a fixed price pursuant to a contract entered into
prior to the operative date of this Ordinance .
4. A lease of tangible personal property which is a continuing sale of such
property, for any period of time for which the lessor is obligated to
lease the property for an amount fixed by the lease prior to the
operative date of this ordinance.
5 . For the purposes of subparagraphs (3) and (4) of this section, the sale
or lease of tangible personal property shall be deemed not to be
obligated pursuant to a contract or lease for any period of time for
which any party to the contract or lease has the unconditional right to
terminate the contract or lease upon notice , whether or not such right
is exercised.
C . There are exempted from the use tax imposed by this ordinance, the
storage, use or other consumption in this City of tangible personal property :
1. The gross receipts from the sale of which have been subject to a
transactions tax under any state-administered transactions and use tax
ordinance.
2. Other than fuel or petroleum products purchased by operators of
aircraft and used or consumed by such operators directly and
exclusively in the use of such aircraft as common carriers of persons or
property for hire or compensation under a certificate of public
convenience and necessity issued pursuant to the laws of this State,
the United States, or any foreign government. This exemption is in
addition to the exemptions provided in Sections 6366 and 6366.1 of
the Revenue and Taxation Code of the State of California.
3. If the purchaser is obligated to purchase the property for a fixed price
pursuant to a contract entered into prior to the operative date of this
ordinance.
4. If the possession of, or the exercise of any right or power over, the
tangible personal property arises under a lease which is a continuing
purchase of such property for any period of time for which the lessee is
obligated to lease the property for an amount fixed by a lease prior to
the operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, storage,
use, or other consumption, or possession of, or exercise of any right or
power over, tangible personal property shall be deemed not to be
obligated pursuant to a contract or lease for any period of time for
which any party to the contract or lease has the unconditional right to
terminate the contract or lease upon notice, whether or not such right
is exercised.
6. Except as provided in subparagraph (7), a retailer engaged in business
in the City shall not be required to collect use tax from the purchaser of
tangible personal property, unless the retailer ships or delivers the
property into the City or participates within the City in making the sale
of the property, including, but not limited to, soliciting or receiving the
order, either directly or indirectly, at a place of business of the retailer
in the City or through any representative, agent, canvasser, solicitor,
subsidiary, or person in the City under the authority of the retailer.
7. "A retailer engaged in business in the City" shall also include any
retailer of any of the following: vehicles subject to registration pursuant
to Chapter 1 (commencing with Section 4000) of Division 3 of the
Vehicle Code, aircraft licensed in compliance with Section 21411 of the
Public Utilities Code, or undocumented vessels registered under
5
L
~
Division 3.5 (commencing with Section 9840) of the Vehicle Code.
That retailer shall be required to collect use tax from any purchaser
who registers or licenses the vehicle, vessel, or aircraft at an address
in the City.
D. Any person subject to use tax under this Ordinance may credit against
that tax any transactions tax or reimbursement for transactions tax paid to a
district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of
Division 2 of the Revenue and Taxation Code with respect to the sale to the
person of the property the storage, use or other consumption of which is
subject to the use tax.
3.24.120 Amendments .
All amendments subsequent to the effective date of this Ordinance to Part
1 of Division 2 of the Revenue and Taxation Code relating to sales and use
taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2
of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part
1.7 of Division 2 of the Revenue and Taxation Code, shall automatically
become a part of this Ordinance, provided however, that no such amendment
shall operate so as to affect the rate of tax imposed by this Ordinance .
3.24.130 Enjoining Collection Forbidden.
No injunction or writ of mandate or other legal or equitable process shall
issue in any suit, action or proceeding in any court against the State or the
City, or against any officer of the State or the City, to prevent or enjoin the
collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and
Taxation Code, of any tax or any amount of tax required to be collected.
3.24.140. Annual Audit; Citizens' Oversight
A. By no later than December 31 of each year after the operative date,
the City's independent auditors shall complete a report reviewing the
collection, management and expenditure of revenue from the tax authorized
by this Chapter. The auditors' report shall be a public document.
B. There shall be a committee consisting of no fewer than five members
of the public to review and report on the receipt of revenue and expenditure of
funds from the tax authorized by this Chapter. The committee members shall
be either Larkspur residents or representatives of Larkspur businesses. The
auditors' annual report required by subsection A shall be provided to the
committee . By March 31 of each year, the committee shall review the
auditors' report, evaluate the projects and services provided with revenue
from the tax, and make recommendations to the City Council regarding
priorities for expenditures of revenue from the tax authorized by this Chapter
for the following budget year. The City Council shall consider the committee's
recommendations as part of its budget deliberations.
C . The City Council shall by resolution establish the composition of the
committee required by subsection B, setting the terms of office of the
committee members , and defining the scope of the committee's
responsibilities, which at a minimum shall include reviewing the annual
auditor's report and making recommendations to the City Council for use of
revenue from the tax authorized by this Chapter. The City Council shall
maintain a quorum of appointed committee members while the tax approved
by this Chapter is in effect. Appointment of committee members and filling
vacancies shall be governed by the resolution establishing the composition
and rules of operation of the committee .
D. In the event that the City Council authorizes the incurrence of debt to
accelerate infrastructure projects, the committee shall additionally review the
expenditure of funds for consistency with the purposes of the debt and make
recommendations regarding the use thereof. The auditor shall include
expenditure of proceeds of the debt in its annual report.
6
E. The oversight committee is hereby authorized as part of an annual
report to recommend that the City Council submit a measure to Larkspur
voters to confirm whether to continue the tax.
3.24.150 Use of Tax Proceeds
All proceeds of the tax levied and imposed under this Chapter shall be
paid into the General Fund for use by the City of Larkspur for general
municipal services. The C ity Council is authorized to incur indebtedness in
the form of bonds, notes, contractual obligations or other evidences of
indebtedness authorized by law to finance or refinance the costs of capital
projects, including but not limited to street and storm dra i n repair and
improvement, and to pay any and all costs of issuing or incurring such
indebtedness, to fund reserve funds, capitalized interest, costs of credit
enhancement, costs of interest rate hedging arrangements or any other
financing costs associated with such indebtedness. Such indebtedness shall
be solely payable from , and may be secured by a pledge and lien on , the
proceeds of the tax levied and imposed hereunder. The annual indebtedness,
including principal and interest, shall not exceed the estimated annual
proceeds of the tax authorized by this Chapter.
Section 3. Compliance with the California Environmental Quality Act. The
approval of this Ordinance is exempt from the California
Environmental Quality Act (Public Resources Code §§ 21000 et
seq ., "CEQA," and 14 Cal. Code Reg. §§ 15000 et seq ., "CEQA
Guidelines"). The transactions and use tax imposed by the adoption
of this Ordinance is general tax that can be used for any legitimate
governmental purpose; it is not a commitment to any particular
action . As such , under CEQA Guidelines section 15378(b)(4), the
tax is not a project within the meaning of CEQA because it creates
a government funding mechanism that does not involve any
commitment to any specific project that may result in a potentially
significant physical impact on the environment. If revenue from the
tax were used for a purpose that would have either such effect, the
city would undertake the required CEQA review for that particular
project. Therefore, pursuant to CEQA Guidelines section 15060
CEQA analysis is not required.
Section 4. Severab ility . If any provision of this Ordinance or the application
thereof to any person or circumstance is held invalid, the remainder
of the Ordinance and the application of such provision to other
persons or circumstances shall not be affected thereby.
Section 5. Effective Date , Relationship t o Ordinance No . 1019/17 and
Publication. This Ordinance relates to the levying and collecting of
the City transactions and use taxes and shall take effect
immediately. If Measure B on the November 7 , 2017 ballot passes ,
this ordinance shall supersede Ordinance No . 1019/17 and Chapter
3 .24 of the Municipal Code shall be amended by this ordinance .
Notwithstanding the foregoing, Chapter 3.24 of the Municipal Code
shall not be amended until the operative date .
*******
IT IS HEREBY CERTIFIED that the foregoing ordinance was duly introduced at a
regular meeting of the Larkspur City Council held on October 18, 2017 and
thereafter passed and adopted by the Larkspur City Council, subject to voter
approval, on November 1, 2017 by the following vote, to wit:
AYES :
NOES :
couNc1LMEMBER: tbu,~,llmer, N\om·son, lU(l4, rna .~br Ha.rofF-
couNc1LMEMBER:
7
ABSENT: COUNCILMEMBER:
ABSTAIN: COUNCILMEMBER
~& '0
ATTEST:
"--Cl
2873491.1
'--
8