HomeMy WebLinkAboutAgenda Report - July 5, 2006 L-01AGENDA ITEM L-01
CITY OF LWI
COUNCIL COMMUNICATION
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AGENDA TITLE: Ordinance No. 1780 Entitled, "An Ordinance of the City Council of the City of Lodi
Imposing a Transactions and Use Tax to be Administered by the State Board of
Equalization and Adding Chapter 3.09 to the Lodi Municipal Code"
MEETING DATE: July 5, 2006
PREPARED BY: City Cleric
RECOMMENDED ACTION: Motion waiving reading in full and (following reading by title)
adopting the attached Ordinance No. 1780.
BACKGROUND INFORMATION: Ordinance No. 1780 entitled, "An Ordinance of the City Council of
the City of Lodi Imposing a Transactions and Use Tax to be
Administered by the State Board of Equalization and Adding
Chapter 3.09 to the Lodi Municipal Code" was introduced at the
regular City Council meeting of June 21, 2006.
ADOPTION: With the exception of urgency ordinances, no ordinance may be passed within five days of
its introduction. Two readings are therefore required — one to introduce and a second to adopt the
ordinance. Ordinances may only be passed at a regular meeting or at an adjourned regular meeting;
except for urgency ordinances, ordinances may not be passed at a special meeting. Id. All ordinances
must be read in full either at the time of introduction or at the time of passage, unless a regular motion
waiving further reading is adopted by a majority of all council persons present. Cal. Gov't Code § 36934.
Ordinances take effect 30 days after their final passage. Cal. Gov't Code § 36937.
This ordinance has been approved as to form by the City Attorney.
FISCAL PACT:
FUNDING AVAILABLE:
JMP
Attachment
None.
Mone required.
nifer M. Yerrin
Interim City Clerk
APPROVED:
lr ing, City Manager
oouncWcounoomlOrdinancel .doc
ORDINANCE NO. 1780
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI
IMPOSING A TRANSACTIONS AND USE TAX TO BE ADMINISTERED
BY THE STATE BOARD OF EQUALIZATION AND ADDING CHAPTER
3.09 TO THE LODI MUNICIPAL CODE
THE PEOPLE OF THE CITY OF LODI DO ORDAIN AS FOLLOWS:
SECTION 1. The Lodi Municipal Code is hereby amended by the addition of Chapter
3.09, which shall read as follows:
3.09.010 Title and Effect
This chapter shall be known as the City of Lodi Transactions and Use Tax Ordinance.
This chapter shall be applicable in the incorporated territory of the City of Lodi ("CRY").
This chapter shall corMplement, and not replace or supersede, the City's existing sales
and use tax, as such taut is described in Chapter 3.08 of the Municipal Code.
3.09.020 Operative Date
As used in Chapter 3.09, "Operative Date" means the first day of the first calwWar
quarter commencing more than 110 days after the adoption of this chapter. if this
chapter is approved by the voters at the November 7, 2006, election, the operative date
shall be April 1, 2007.
3.09.030 Purpose
This chapter is adopted to achieve the following, among other purposes, and the City
Council 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 7285.91 of Part 1.7 of Division 2, which authorizes
the City to adopt this tax chapter, which shall be operative if two-thirds 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 relail transactions and Use tax chapter 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 chapter that imposes a tax and
provides a measure therefor that can be administered and collected by the State
Board of Equalization 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 State Board of Equalization in
administering and collecting the California State Sales and Use Taxes.
D. To adopt a retail transactions and use tax chapter that can be administered in a
manner that will be, to the greatest degree possible, consistent with the
provisions of Pmt 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 chapter.
3.09.040 Expendhure Plan
A. The Expenditure Plan is designed to ensure that the City accomplishes the
specific projects listed below with the revenue generated from the transactions
and use tax. The revenue from the transactions and use tax shall be expended
on these specific projects in the following order of priority:
1. Placing paramedics on fire engines in the City (up to $700,000 per year
for six years);
2. Design and construction of Fire Station #5, which shall be located in the
southeast portion of the City (up to $2,000,000);
3. Construction of the Lodi Aquatics Center (up to $9,000,000);
4. Design and construction of a replacement for l=ire Station #2, which shall
be located in the eastern portion of the City (up to $2,000,000);
5. Construction of a downtown indoor sports center (up to $9,000,000); and
6. Maintenance and operation of the facilities above (up to $1,500,000).
B. Once the City has collected revenue from this transactions and use tax in the
amount of $700,000, it shall hire an appropriate number of paramedics and begin
providing paramedic services on fire engines in the City within twelve months.
Thereafter, subject to its ongoing duty to expend $700,000 per year to fund
paramedics pursuant to this Expenditure Plan, once the City collects the amount
listed for each subsequent project it shall begin design or construction of the
designated facilIities within six months.
C. The City Council shalt appoint an advisory committee to ensure that the revenue
from the transactions and use tax is spent in accordance with the actual terms
and overall intent of this chapter. The committee shall consist of five individuals
and shall, at all times, include one member of Lodi Professional Firefighters Local
1225, one member of the Lodi City Swim Club, one member of the Lodi Sports
Foundation, one member of the City Council, and one person selected at large
by the City Council in its discretion. Each member of the advisory committee
shall serve for a term of two years, which term may be renewed by the City
Council. In the event of a vacancy on the committee, the City Council shall
appoint an appropriate replacement member.
D. If the City Council and the advisory committee both determine that the maximum
dollar amount to be spent on one or more of these projects is insufficient to
achieve the goals of this chapter, the City Council may increase the maximum
dollar amount for such project(s), provided that it first holds a noticed public
hearing and makes specific findings that the increased expenditures for one or
more projects is necessary to complete such project(s) in an effective manner
and to fulfill the intent of this chapter.
E. If the City Council and the advisory committee both determine that the order of
priority for these projects should be changed, the City Council may change the
order of priority, provided that it first holds a noticed public hearing and races
specific findings that the change in the order of priority is in the best interests of
the City and its residents.
F. Once revenue In the amounts listed above has been spent on the services and
facHitieS included in each of these projects, any remaining revenue raised
through this transactions and use tax shall be spent to help maintain such
services and facilities.
3.09.050 Contract with State
Prior to the Operative Date, the City shall contract with the State Board of Equalization to
perform all functions incident to the administration and operation of this transactions and
use tax chapter; provided that, if the City shall not have contracted with the State Board
of Equalization 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.
3.09.060 Transactions Tax Rate
For the privilege of seNing tangible personal property at retail, a tax is hereby imposed
upon all retailers in the incorporated territory of the City at the rate of .25% (one quarter
of one percent) 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 chapter.
3.09.070 Place of Sale
For the purposes of this chapter, 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 State Board of Equalization.
3.09.080 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 chapter for storage, use, or other consumption in said territory at the rate of .25%
(one quarter of one percent) 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.
3.09.090 Adoption of Provisions of State Law
Except as otherwise provided in this chapter 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 chapter as though fully set
forth herein.
3.09.100 Limitations on Adoption of State Law and Collection of Use Taxes
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 thfs 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 Board of Control, State Board of Equalization, 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 State Board of Equalization, in performing the functions
incident to the administration or operation of this Chapter.
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.
3.09.110 Permit not Required
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and
Taxation Code, an addlitional transactor's permit shall not be required by this chapter.
3.09.120 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 fmxn:
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 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 chapter.
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 chapter.
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 chapter, the storage, use,
or other consumption in this City of tangible personal property:
I . The gross receipts from the sale of which have been subject to a
transactions tax under any state -administered transactions and use tax
ordinanoe.
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
chapter.
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 chapter.
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 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 chapter 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.
3.09.130 Amendments
All amendments subsequent to the effective date of this chapter 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 chapter, provided however, that no such
amendment shall operate so as to affect the rate of tax imposed by this chapter. Except
as provided above and in Section 3.40.140, this chapter may be amended only by the
voters pursuant to the provisions of Elections Code section 9217 and as provided by
law.
3.09.140 Termination of Tax
The transactions and use tax imposed by this Chapter shall terminate ten years from the
Operative Date.
3.09.150 Enjoining Collection Forbidden
No injunction or writ of mandate or other legal or equitable process shall issue in any
sut, 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 chapter, 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_
SECTION 2. SeverabWty. If any provision of this chapter or the application thereof to
any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of the chapter which can be given effect without the invalid
provision or application, and to this end the provisions of this chapter are severable.
SECTION 3. Effective Date. This chapter is related to the levying and collecting of the
City transactions and use tax and shall take effect immediately (see Section 1, 3.09.020,
"Operative Date").
SECTION 4. No Mandatory Duty of Care. This ordinance is not intended to and shall
not be construed or given effect in a manner which imposes upon the City, or any officer
or employee thereof, a mandatory duty of care towards persons or property within the
City or outside of the City so as to provide a basis of civil liability for damages, except as
otherwise imposed by law.
SECTION 5. All ordinances and parts of ordinances in conflict herewith are repealed
insofar as such conflict may exist.
SECTION 6. This ordinance shall be published one time in the "Lodi News Sentinel," a
daily newspaper of general circulation printed and published in the City of Lodi, and shall
be in force and take effect immediately after its passage and approval (see Section 1,
3.09.020, "Operative Date").
Attest:
-
JOANIFERN4. PERRIN
I nteri rn- City Clerk
Approved this 5t' day of July, 2006.
�7
HITCFTCOCK
State of California
County of San Joaquin, ss.
I, Jennifer M. Perrin, Interim City Clerk of the City of Lodi, do hereby certify that
Ordinance No. 1780 was introduced at a regular meeting of the City Council of the City
of Lodi held June 21, 2006, and was thereafter passed, adopted, and ordered to print at
a regular meeting of said Council held July 5, 2006, by the following vote:
AYES: COUNCIL MEMBERS - Beckman, Hansen, Johnson, Mounce
and Mayor Hitchcock
NOES: COUNCIL MEMBERS - None
ABSENT: COUNCIL MEMBERS - None
ABSTAIN: COUNCIL MEMBERS - None
I further certify that Orcinance No. 1780 was approved and signed by the Mayor of the
date of its passage and the same has been published pursuant to law.
4NIIAIFIEkM�IPERRI`N"-��
Interim Cit+, Clerk
Approved as to Form:
- D. -S HEN SCHWABAUER
City Attorney
CITY COUNCIL CITY OF L O D I
SUSAN HITCHCOCK, 90�t-
Mayor
MayorBOBJOHNSON, 'y Pro Tempore
JOHN BECKMAN
LARRY D, HANSEN
s 6 i moOWo
JOANNE MOUNCE
CITY HALL, 221 WEST PINE STREET / P.O. BOX 3006
LODI, CALIFORNIA 95241-1 91 0
(209) 333-6702 / FAX (209) 333-6807 / www.lodi.gov
July 18, 2006
State Board of Equalization
Local Revenue Allocation Section
P.Q. Box 942879
Sacramento, CA 94279-0027
BLAIR KING,
City Manager
JENNIFER M..PERRIN,
Interim City Clerk
D. STEPHEN SCHWABAUER,
City Attorney
RE: City of Lodi Ordinance Imposing a Transactions and Use Tax to Be
Administered 1py the State Board of Equalization and Adding Chapter
3.09 to the Lodi Municipal Code
Enclosed please find a certified copy of Ordinance No. 1 780 imposing a
transactions and use tax to be administered by the State Board of Equalization
and adding Chapter 3.09 to the Lodi Municipal Code, which was adopted by the
Lodi City Council at its meeting of July 5, 2006.
Should you have any questions, please do not hesitate to contact my office.
Sincerely,
nifer . Perrin
I terim City Clerk
JMP
Enclosure
lrlcdiva/initiativc/lStateBOE.doc