HomeMy WebLinkAbout2018-049 - Submission to the Qualified Voters November 6,2018RESOLUTION NO. 2018-049
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR A GENERAL MUNICIPAL
ELECTION ON NOVEMBER 6, 2018 AND THE PLACEMENT
ON THE BALLOT OF A MEASURE FOR THE NOVEMBER
6, 2018 GENERAL MUNICIPAL ELECTION FOR THE
SUBMISSION TO THE QUALIFIED VOTERS OF A
PROPOSED ORDINANCE REGARDING A COMMERCIAL
CANNABIS BUSINESS LICENSE TAX AND REQUESTING
THAT THE ORANGE COUNTY BOARD OF SUPERVISORS
CONSOLIDATE THE CITY'S GENERAL MUNICIPAL
ELECTION WITH THE STATEWIDE GENERAL ELECTION
TO TAKE PLACE ON NOVEMBER 6, 2018; AND
PROVIDING FOR THE FILING OF ARGUMENT AND
REBUTTAL STATEMENTS
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. A general municipal election of the City of Santa Ana will be held on November
6, 2018, for the purposes of electing the Mayor and Councilmembers from Wards
2, 4, and 6.
B. There will be a statewide general election held on November 6, 2018.
C. It is desirable that the general municipal election of the City of Santa Ana on
November 6, 2018 be consolidated with the statewide general election to be held
on the same date and; that within the City of Santa Ana, the precincts, polling
places and charter amendment be the same, and that the Board of Supervisors of
the County of Orange canvass the returns of both elections, in all respects as if
there were only one election.
D. The Clerk of Council is authorized, instructed, and directed to give further notice
of the election, in time, form and manner as required by law.
Section 2. The California Elections Code directs the City Council approve the form
of the ballot question to be submitted to the voters and the City of Santa Ana desires, on
its own motion, to submit to the voters a question of whether the City should place on the
ballot a measure for a proposed Ordinance regarding a commercial cannabis business
license tax, to be submitted to the voters at the General Election to be held on Tuesday,
November 6, 2018.
Resolution 2018-049
Page 1 of 16
Section 3. The ballot question for the proposed Ordinance shall be as follows, with
identification as determined in accordance with the California Elections Code:
MEASURE #
Yes
Shall Chapter 21 of the Santa Ana Municipal Code be amended to
enact both a gross square footage tax of between 25 cents to $35.00
and a gross receipts tax rate up to 10% for cultivating,
manufacturing, distributing, selling or testing cannabis and related
products to raise between $8 to $12 million to fund public safety, No
parks, youth and senior services, among other general City
services?
Section 4. Should said measure be approved by the requisite vote, the Ordinance
adding Article XIII to Chapter 21 attached hereto as Exhibit A and incorporated by this
reference shall be enacted.
Section 5. That the text of the Ordinance to be submitted to the voters is attached
to this Resolution as Exhibit A and incorporated herein by this reference ("Ordinance").
Section 6. That pursuant to Elections Code Section 9280, the City Council hereby
directs the City Clerk to transmit a copy of the Ordinance to the City Attorney to prepare
an impartial analysis of the Ordinance which shall not exceed 500 words in length.
Section 7. That pursuant to Elections Code Section 9282, the City Council may file
a written argument in favor of the Ordinance in accordance with Article 4, Chapter 3,
Division 9 of the Elections Code and may change the argument as allowed by law.
Section 8. That pursuant to Elections Code Section 9287, if more than one
argument for or more than one argument against the Ordinance is submitted to the City
Clerk within the time prescribed by law, he or she shall select one of the arguments in
favor and one of the arguments against the Ordinance for printing and distribution to the
voters, giving preference in such selection in the following order:
The City Council, or a member or members of the City Council authorized by
the City Council
2. Bona fide associations of citizens.
3. Individual voters who are eligible to vote on the Ordinance.
Section 9. That pursuant to Elections Code Sections 9220 and 9285, when the City
Clerk has selected the arguments for and against the Ordinance which will be printed and
distributed to the voters, the City Clerk shall send copies of the argument in favor of the
Resolution 2018-049
Page 2 of 16
Ordinance to the author or authors of the argument against, and copies of the argument
against the Ordinance to the author or authors of the argument in favor. The author or
authors may submit a rebuttal argument to the direct argument not exceeding 250 words.
Rebuttal arguments shall be printed in the same manner as the direct arguments and
shall immediately follow the direct argument which it seeks to rebut. All previous
resolutions providing for the filing of rebuttal arguments for City measures are repealed,
and this Section shall only apply to the election on the Ordinance to be held on November
6, 2018.
Section 10. In accordance with Section 10002 of the Elections Code, the Board of
Supervisors Orange County is hereby requested to consent to the Registrar of Voters
rendering election services to the City as may be requested by the City Clerk of said City,
the County of Orange to be reimbursed in full for such services as are performed. The
Board of Supervisors of Orange County is also requested to consent and agree to the
consolidation of the General Election with any other election occurring on November 6,
2018, and the City hereby consents to any such consolidation.
Section 11. The election services which the City requests of the Registrar of
Voters, or such other official as may be appropriate to perform, and which such officer is
hereby authorized and directed to perform if the said Board of Supervisors consents,
include: the preparation, printing and mailing of sample ballots and polling place cards,
the establishment or appointment of precincts, polling places, and election officers,
opening and closing of polling places, and making such publications as are required by
law in connection therewith; the furnishing of ballots, voting booths and other necessary
supplies or materials for polling places, the canvassing of the returns of the election and
the furnishing of the results of such canvassing to the City Clerk, and the performance of
such other election services as may be requested by said City Clerk.
Section 12. That the polls for the election shall be open at seven o'clock a.m. of
the day of the election and shall remain open continuously from that time until eight o'clock
p.m. of the same day when the polls shall be closed, pursuant to California Elections
Code Section 10242 and Section 14212, except as provided in California Elections Code
Section 14401 or any other provision of law.
Section 13. All persons qualified to vote at municipal elections in the City on the
day of the election herein provided for shall be qualified to vote on the Ordinance hereby
submitted at the General Municipal Election.
Section 14. In all particulars not recited in this Resolution, the election shall be held
and conducted as provided by law for holding general municipal elections in the City.
Section 15. Notice of the time and place of holding the General Municipal Election
is given and the City Clerk is authorized, instructed and directed to give further or
additional notice of the election, in the time, form and manner as required by law.
Section 16. The City Clerk shall receive the canvass as it pertains to the General
Municipal Election, and shall certify the results to this City Council, as required by law.
Resolution 2018-049
Page 3 of 16
Section 17. If any section, subsection, sentence, clause, phrase or provision of this
Resolution or the application thereof to any person or circumstances is held invalid or
unconstitutional by any court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity of any other provision or applications, and
to this end the provisions of this Resolution are declared to be severable. The City Council
hereby declares that it would have passed this Resolution and each section, subsection,
sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases or provisions thereof be declared
invalid or unconstitutional.
Section 18. Pursuant to California Elections Code section 9295, this Resolution
and the attached Ordinance will be available for public examination for no fewer than ten
(10) calendar days prior to being submitted for printing in the sample ballot. The
examination period will end on the day that is seventy-five (75) days prior to the date set
for the election.
Section 19. This Resolution shall take effect immediately upon its adoption by a
majority of the City Council.
Section 20. The City Clerk of the City of Santa Ana is hereby directed to certify to
the passage and adoption of this Resolution and to file a certified copy of this Resolution
with the Board of Supervisors of Orange County and the Registrar of Voters of Orange
County at least eighty-eight (88) days before the date of the election.
ADOPTED this 3rd day of July, 2018.
Ftd
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By: �apq�2 / 6 I� C� SIX La
Laura A. Rossini
Senior Assistant City Attorney
Resolution 2018-049
Page 4 of 16
AYES: Councilmembers Benavides, Solorio, Tinaiero, Villegas (4)
NOES: Councilmembers None (0)
ABSTAIN: Councilmembers Pulido, Sarmiento (2)
NOT PRESENT: Councilmembers Martinez (1)
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2018-049 to be the original resolution adopted by the City Council of the
City of Santa Ana on July 3, 2018.
Date: T.?l
Maria D. Huizar
Clerk of the Council
City of Santa Ana
Resolution 2018-049
Page 5 of 16
Exhibit A
CITY OF SANTA ANA PROPOSED ORDINANCE NO. NS-_
AN ORDINANCE OF THE CITY OF SANTA ANA CITY
COUNCIL ADDING ARTICLE XIII TO CHAPTER 21 OF THE
CITY OF SANTA ANA MUNICIPAL CODE RELATED TO A
COMMERCIAL CANNABIS BUSINESS LICENSE TAX
IMPOSED FOR GENERAL MUNICIPAL PURPOSES,
SUBJECT TO THE APPROVAL OF A MAJORITY OF THE
VOTERS VOTING AT THE GENERAL MUNICIPAL
ELECTION HELD ON NOVEMBER 6, 2018
WHEREAS, in November 2016, the California Marijuana Legalization Initiative,
also known as the Adult Use of Marijuana Act (AUMA or Proposition 64) was approved
by the voters of the State of California. The AUMA legalized recreational marijuana.
WHEREAS, in 2017, the Governor signed into law Senate Bill 94 also known as
Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA) establishing
state regulations and licensing for retail sales, manufacturing, distribution, delivery and
testing of adult -use (also called recreational) marijuana.
WHEREAS, on November 9, 2017, the City Council created Chapter 40 of the
Santa Ana Municipal Code, allowing adult -use commercial cannabis retail businesses in
the city, and amended certain sections of Chapters 18 and 21 of the Santa Ana
Municipal Code to ensure consistency with State law and Chapter 40. Since 2014, the
City has allowed medicinal marijuana collectives/cooperatives to operate within the City
pursuant to regulations set forth in Chapter 18 and Chapter 21 of the Santa Ana
Municipal Code.
WHEREAS, on March 20, 2018, the City Council adopted Ordinance NS -2941
and NS -2942, allowing and regulating commercial cannabis testing laboratories.
WHEREAS, on May 1, 2018, the City Council adopted Ordinance NS -2944
allowing and regulating commercial cannabis manufacturing, distribution, and
cultivation.
WHEREAS, a general business license tax based on the gross receipts derived
from commercial cannabis businesses and gross square footage would generate
essential funds for protecting vital City services and facilities and place such businesses
on more equal footing with existing City businesses, including medical marijuana
businesses which already pay a business license tax; and
WHEREAS, the City Council is authorized to impose general and special taxes in
order to fund municipal services and facilities, subject to requisite voter approval as set
forth in Government Code section 53720.
NOW, THEREFORE, the City of Santa Ana City Council does hereby ordain as
follows:
SECTION 1. Recitals. The above recitals are hereby found to be true and
accurate and are incorporated into this Ordinance by this reference.
SECTION 2. Amendment. Article XIII is hereby added to Chapter 21 of the City
of Santa Ana Municipal Code to read in full as set forth in Exhibit A-1, attached hereto
and incorporated by reference.
SECTION 3. Voter Approval. Article XIII as added to Chapter 21 of the Santa
Ana Municipal Code by this proposed Ordinance shall impose a general tax as defined
Resolution 2018-049
Page 6 of 16
by Government Code section 53723, and therefore must be approved by a majority of
voters voting in an election on the tax. Approval of this Ordinance is therefore subject to
and conditioned upon the approval by the voters of the imposition of the general tax
imposed by this Ordinance. If a majority of the voters voting in the election do not vote
in favor of the imposition of the tax, this ordinance shall not take effect.
SECTION 4. Severability. If any provision of this Ordinance or the application
thereof to any person or circumstances is held invalid, such invalidity shall not affect
other provisions of applications of the Ordinance that can be given effect without the
invalid provision or application, and to this end the provisions of this Ordinance are
severable. This City Council hereby declares that it would have adopted this Ordinance
irrespective of the invalidity of any particular portion thereof and intends that the invalid
portions should be severed and the balance of the Ordinance be enforced.
SECTION 5. Effective Date. After its adoption by the voters, this Ordinance
shall be in full force and effect ten (10) days after the vote is declared by the legislative
body, pursuant to the provisions of Elections Code sections 9217 and 15400 and as
provided by law.
PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana
this 6th day of November, 2018.
Miguel A. Pulido
Mayor
ATTEST:
Maria D. Huizar
Clerk of Council
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
Resolution 2018-049
Page 7 of 16
EXHIBIT A-1
ARTICLE XIII. COMMERCIAL CANNABIS BUSINESSES
Sec. 21-132. Purpose.
This article is required for the purpose of fixing the rate of taxation for commercial
cannabis businesses including delivery, distribution, manufacturing, cultivation, testing
and retail sales of cannabis and related products. This article does not apply to medical
marijuana collectives/cooperatives (also referred to as medicinal cannabis retail
businesses) which are subject to a business license tax under article XII of this chapter.
The taxes required to be paid under this article are declared to be required pursuant to
the taxing power of the City of Santa Ana solely for the purpose of obtaining revenue and
are not regulatory permit fees.
Sec. 21-133. Commercial cannabis businesses—Annual business license tax
assessment.
Every person engaged in a "commercial cannabis business" or "commercial
cannabis activity" shall pay an annual business license tax as outlined below. This article
shall not apply to medical marijuana cooperatives/collectives also referred to as medicinal
cannabis retail businesses which are governed by article XII of this chapter or to personal
cultivation as defined in section 18-611(n) of this code.
(a) For each branch establishment or separate property location of a commercial
cannabis business transacted and carried on in the city, and for each separate type
of commercial cannabis business conducted at the same location, the higher of the
two (2) following tax rates shall be due to the city for each monthly reporting period:
(1) Up to ten percent (10%) of each dollar of gross receipts received or
generated for each monthly reporting period.
(2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one -
twelfth (1/12th) of the annual tax rate amount.
(b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this
chapter.
(c) Notwithstanding the tax rates imposed herein under subsection (a), the city council
may, in its discretion, at any time by resolution implement any lower tax rate it deems
appropriate, and may by resolution increase such tax rate from time to time, not to
exceed the maximum rates established by subsection (a).
(d) As of the operative date of this article, the business license gross receipts tax rates
and square footage tax rates application to specific commercial cannabis business
activities shall be established as follows:
Commercial Cannabis Business
Gross Receipts
Gross Square
Activity
Tax Rate
Footage Tax Rate
Resolution 2018-049
Page 8 of 16
Adult -use Cannabis Retail
8%
$ 25.00
Business (including Delivery)
Cultivation
6%
$ 10.00
Distribution
6%
$ 4.00
Manufacturing
6%
$ 10.00
Testing Facility or Testing
5%
$ 1.50
Laboratory
Commercial cannabis businesses not having a fixed place of business within the city
but conducting regular, non -incidental commercial cannabis business activities
within the city shall be subject to the gross receipts tax rate(s) as set out in the table
above based on the category/categories of commercial cannabis activity conducted.
However, such out-of-town commercial cannabis businesses shall not be subject to
any gross square footage tax rate(s).
(e) As part of the annual gross receipts/square footage tax(es) imposed by this article,
each commercial cannabis business located within the city shall pay a minimum
basic rate of two thousand dollars ($2,000.00) annually for each branch
establishment or separate property location of the commercial cannabis business
transacted and carried on in the city, and for each separate type of commercial
cannabis business conducted at the same location. Commercial cannabis
businesses having no fixed place of business within the city shall be exempted from
this requirement.
(f) In the event the city should in the future permit additional categories of commercial
cannabis business activity, as may from time to time be licensed by the State of
California, such categories of commercial cannabis activates shall be subject to the
same maximum tax rates as imposed herein. The city may by ordinance of the city
council initially set the required gross receipts/gross square footage tax rates based
on category of cannabis business activity at lesser rates as may be deemed
appropriate by the city council.
(g) For purposes of this article, a commercial cannabis business is not considered to be
a business or person having a "specified exemption" or "specified exclusion" from
business license taxation as set forth in sections 21-48 and 21-49 of this chapter.
(h) For purposes of this article any person claiming an exemption from the gross
receipts tax rate component of the combined gross receipts/square footage tax
imposed under this article on the basis of a claim of being a qualified "nonprofit
organization" shall have the burden of substantiating their claim to the same extent
and in the same manner as a marijuana collective/cooperative in accordance with
section 21-127(a)(6) of this chapter. -
Resolution 2018-049
Page 9 of 16
(i) Cannabis businesses shall not pass the taxes imposed by this article through to an
adult -use cannabis retail business customer or commercial cannabis business
customer in any fashion except as part of the basic product sales and/or service
price.
(j) Definitions. For purposes of this article, the following terms have the following
meanings:
(1) "Adult -Use cannabis retail business" as defined in section 40-2(4) of this
code.
(2) "Commercial Cannabis Activity' as defined in section 40-2(9) of this code.
(3) "Commercial cannabis business" as defined in section 40-2(10) of this
code excluding medical marijuana collectives/cooperatives also referred
to as medicinal cannabis retail sales.
(4) "Cultivation" as defined in section 40-2(11) of this code.
(5) "Delivery" as defined in section 40-2(13) of this code.
(6) "Distribution" as defined in section 40-2(16) of this code.
(7) "Gross receipts" — section 21-3 of this chapter notwithstanding, "gross
receipts" for the purposes of this article shall mean:
(A) Transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatsoever, of tangible
personal property for a consideration including any monetary
consideration for cannabis, including, but not limited to, membership
dues, reimbursements provided by members, regardless of form, or
the total amount of cash or in-kind contributions, including all
operating costsrelated to the growth, cultivation, manufacturing,
distribution, testing, or provision of cannabis or any transaction
related thereto.
(B) Anything else of value obtained by an a cannabis business;
(C) The total amount of the sale price of all sales and services;
(D) The total amount charged or received for the performance of any act,
service or employment of whatever nature it may be, whether or not
such service, act or employment is done as a part of or in connection
with the sale of goods, wares, or merchandise (whether at wholesale
or retail), for which a charge is made or credit allowed, including all
refunds, cash credits and properties of any amount or nature;
(E) Any amount for which credit is allowed by the seller to the purchaser
without any deduction therefrom, on account of the cost of the
property sold, the cost of materials used, the labor or service cost,
interest paid or payable, losses, or any other expense whatsoever;
provided that cash discounts allowed or payment on sales shall not
be included;
(F) The amount of any federal manufacturer's or importer's excise tax
included in the price of property sold, even trough the manufacturer
Resolution 2018-049
Page 10 of 16
or importer is also the retailer thereof and whether or not the amount
of such tax is stated as a separate charge.
(G) The amount of any California state cannabis excise tax or state
cannabis cultivation tax regardless of whether or not the amount of
such excise tax or cultivation tax is included in the price of the
product or stated to customers as a separate charge,
(H) "Gross receipts" shall not include the following:
i. The amount of any federal tax imposed on or with respect to retail
or wholesale sales or the sale of services whether imposed upon
the cannabis business or the consumer whenever the amount of
federal tax is authorized by law to be stated and passed through
to customers as a separate charge.
ii. Any California state, county, or city sales or use tax, including any
add-on, district, or transaction and use tax, required by law to be
included in or added to the purchase price and collected from the
consumer or purchaser, or such part of the sales price of any
property previously sold and returned by the purchaser to the
seller which is refunded by the seller by way of cash or credit
allowances given or taken as part payment on any property so
accepted for resale; or
iii. The amount of the sale price of business personal property (all
property owned or leased by a cannabis business operator used
in the operation cannabis business activities, including but not
limited to: furniture, fixtures, and business equipment); real
property, including land, buildings and other improvements.
iv. The amount of equity contributions, investments, and/or loan
proceeds to cannabis business' operation, and/or proceeds from
the sale or transfer of cannabis business' retail or commercial
cannabis business.
(1) "Gross receipts" shall be calculated without any deduction on
account of any of the following:
i. The cost of tangible or intangible property sold or bartered;
ii. The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense;
iii. The cost of transportation of cannabis, or other property or
product;
iv. The amount of any federal or state income or franchise taxes; and
v. Any other business costs or expenses, unless otherwise
specifically exempted.
(8) "Manufacturing" as defined in section 40-2(22) of this code.
Resolution 2018-049
Page 11 of 16
(9) "Retail businesses" as defined in section 40-2(40) of this code.
(10) "Gross Square foot" or "gross square footage" for the purposes of this
article shall mean;
(A) The gross number of square feet comprising a commercial cannabis
business' property location (as confirmed by the corresponding
,.approved building set" or "approved certificate of occupancy" on file
with the City of Santa Ana Planning and Building Agency) whichever
is the greater of any square footage indicated.
(B) In the case of commercial cannabis businesses licensed by the state
to engage in cultivation "gross square foot" or "gross square footage"
shall mean the aggregate sum of the number of square feet
comprising all areas of the premises under "canopy", whether such
sum is greater or lesser than the gross square footage as stated in
the "approved building set" or "approved certificate of occupancy".
"Canopy," shall mean the designated area(s) of a premise that will
contain mature plants at any point in time. Canopy shall be calculated
in square feet and measured using clearly identifiable boundaries of
all area(s) that will contain mature plants at any point in time,
including all of the space(s) within the boundaries. Canopy may be
noncontiguous, but each unique area included in the total canopy
calculation shall be separated by an identifiable boundary which
includes interior walls, shelves, greenhouse walls, hoop house walls,
garden benches, hedgerows, fencing, garden beds, or garden plots;
and if mature plants are being cultivated using a shelving system, the
surface area of each level shall be included in the total canopy
calculation.
(11) "Testing Facility" or "Testing Laboratory" as defined in section 40-2(44) of
this code.
(12) "Wholesale" as defined in section 40-(46) of this code.
(k) Modification, repeal or amendment. The city council may repeal the ordinance
codified in this article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The city council
may likewise by ordinance adopt and add additional provisions to any other article
of this chapter and relate them to this article, or amend any existing provisions of
any article of this chapter as they may already relate to this article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the city council repeals said ordinance or any provision of
this article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein.
(1) Administration—Rules, regulations and guidelines. In order to aid in the city's
collection of taxes due under this article and to ensure that all commercial cannabis
businesses are taxed consistently to the best of the city's ability, the collector, with
the concurrence of the city attorney, may promulgate rules, regulations, and
guidelines, to implement and administer this article including, but not limited to rules,
Resolution 2018-049
Page 12 of 16
regulations, and guidelines harmonizing other provisions of this chapter with the
provisions of this article in any manner not inconsistent with the intent of this article
and which does not result in an increase in the tax or taxes imposed herein. The
collector may also, with the concurrence of the city attorney, interpret or clarify the
methodology of the tax, or any definition applicable to the tax, so long as such
interpretation or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this article.
(m) Occasional transactions—Exemptions.
(1) The provisions of this article shall not apply to persons having no fixed
place of business within the city who come into the city for the purpose
of transacting a specific item of commercial cannabis business at the
request of a specific client or customer, incidental to a commercial
cannabis business principally established elsewhere, provided that such
person does not come into the city for the purpose of transacting such
business on more than three (3) days during any calendar year.
(2) For any person not having a fixed place of business within the city who
comes into the city for the purpose of transacting commercial cannabis
business activities, the business license tax(es) payable by such person
may be apportioned by the collector in accordance with this chapter.
(n) Reporting and remittance.
1. Beginning as set forth in subsection (q) below, and monthly thereafter,
each commercial cannabis business required to pay a tax or taxes based
on gross receipts under this article (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts),
shall report to the city any gross receipts received during the preceding
monthly reporting period. In addition, each cannabis business (including
qualified nonprofit organizations) required to pay a tax or taxes based on
square footage shall report to the city the gross square footage of the
cannabis business' property location. Every cannabis business shall then
compute the business license taxes at both the gross receipts rate and
the gross square footage rate - prorated monthly to one -twelfth (1/12th) of
the annual tax rate amount - and shall then remit to the city the amount of
the higher of the two tax calculations due and owing during said period in
accordance with section 21-133, subsection (d). In the case of a qualified
nonprofit organization only the gross square footage computation shall be
made and the amount of such calculation shall represent the amount due
and owing during said period. All reporting and remitting made shall be
done in accordance with instructions from the collector and shall be made
using forms provided or approved by the collector.
2. For purposes of this section, month shall mean calendar month and shall
include any fraction of a month. Taxes shall begin to accrue on the date
that a person or entity first receives a business license or other city permit
to operate as a commercial cannabis business or upon the operative date
Resolution 2018-049
Page 13 of 16
of this article should a person or entity already possess a commercial
cannabis business license or other city permit to operate as a commercial
cannabis business.
3. The payment of the two thousand dollars ($2,000.00) minimum basic rate
gross receipts tax required annually for each separate branch location or
separate property location of the business in accordance with this section,
shall be made annually prior to the beginning of the fiscal year beginning
April first of the current year and expiring on the 31st day of March of the
following year. In the case of a new commercial cannabis business the
minimum basic rate gross receipts tax shall be paid in advance prior to
any new business activity being undertaken. Every new licensee shall pay
in advance an amount equal to one-quarter ('/) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter
remaining during the period for which the new license is issued.
(o) Delinquentdate—Penalty. Any individual or entity who fails to pay the taxes required
by this article when due shall be subject to penalties and interest as set forth in
accordance with this chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this article and failure
to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this article.
(p) Business license tax certificate—Required. There are imposed upon all persons
engaged in transacting and carrying on any commercial cannabis business activity
in the city taxes in the amounts prescribed in this article. It shall be unlawful for any
person, either for him or herself or for any other person, to commence, transact or
carry on any business in the city without first having procured a business license
from the city under this chapter and having paid the taxes set forth in this article, and
without complying with any and all applicable provisions contained in this chapter.
The carrying on of any commercial cannabis business activity without complying with
all the provisions of this article shall constitute a separate violation of this chapter for
each and every day that such commercial cannabis activity is so carried on.
(q) Classification of business license assessment type—Term and renewal. The
business license issued to commercial cannabis businesses shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) of this chapter and shall be subject to renewal in accordance
with sections 21-72(c), 21-73(c), and 21-77.
(r) Operative date. Upon the approval by the majority of the voters of the city at the
November 6, 2018 general election, the taxes imposed by this article shall become
operative and shall be applied by the collector upon all commercial cannabis
businesses.
Sec. 21-134. Payment of tax does not authorize unlawful business.
(a) The payment of a business tax required by this article, and its acceptance by the
city, shall not entitle any person to carry on any commercial cannabis business
unless the person has complied with all of the requirements of this code and all other
applicable laws, nor to carry on any commercial cannabis business in any building
Resolution 2018-049
Page 14 of 16
or on any premises in the event that such building or premises are situated in a zone
or locality in which the conduct of such commercial cannabis business is in violation
of any law.
(b) No tax paid under the provisions of this article shall be construed as authorizing the
conduct or continuance of any illegal or unlawful business, or any legal business in
an illegal manner, or any business in violation of any ordinance of the city, state or
federal law.
Sec. 21-135. Single property location; multiple state licenses; separate city business
licenses.
Sections 21-7, 21-8, and 21-9 of this chapter notwithstanding, separate city business
licenses, issuable to commercial cannabis businesses pursuant to this article, shall be
required for each separate type of commercial cannabis business activity transacted and
carried on at a single city property location for which a commercial cannabis business
may seek licensure by the state, or forwhich a state license has been approved or issued.
Sec. 21-136. Security for collection of commercial cannabis business' business license
tax.
To ensure compliance with business license tax payment requirements established
pursuant to this article, the collector shall require, beginning on the operative date of this
article, that each commercial cannabis business owner (including but not limited to each
transferee, assignee, or purchaser of a commercial cannabis business subject to the
business licensing requirements of this article) deposit within thirty (30) days such security
(per individual business license) in a form acceptable to the collector in an amount not
larger than the cannabis business owner's estimated average monthly tax liability as
determined by the collector or the sum of ten thousand dollars ($10,000.00), whichever
is the greater. Each new city commercial cannabis business licensee shall upon obtaining
their city business license(s) deposit a similar security per business license within thirty
(30) days after commencing business.
Sec. 21-137. Effect of state and federal reference/authorization.
Unless specifically provided otherwise, any reference to a state or federal statute
in this article or chapter (whether by direct citation or by definitional reference to another
chapter of this code) shall mean such statute as it may be amended from time to time,
provided that such reference to a statute herein shall not include any subsequent
amendment thereto, or to any subsequent change of interpretation thereto by a state or
federal agency or court of law with the duty to interpret such law, to the extent that such
amendment or change of interpretation would require voter approval under California law,
or to the extent that such change would result in a tax decrease. Only to the extent voter
approval would otherwise be required or a tax decrease would result, the prior version of
the statute (or interpretation) shall remain applicable; for any application or situation that
would not require voter approval or result in a decrease of a tax, provisions of the
Resolution 2018-049
Page 15 of 16
amended statute (or new interpretation) shall be applicable to the maximum possible
extent.
To the extent that the city's authorization to collect or impose any tax imposed
under this article is expanded or limited as a result of changes in state or federal law, no
amendment or modification of this article shall be required to conform the tax to those
changes, and the tax shall be imposed and collected to the full extent of the authorization
up to the full amount of the tax imposed under this article.
Sec. 21-138. Violation deemed misdemeanor—Penalty.
Any person violating any of the provisions of this article or any regulation or rule
passed in accordance herewith, shall be deemed guilty of a misdemeanor, and upon
conviction thereof shall be punishable by the maximum penalties provided for in California
Penal Code Section 19. The penalties under this section are in addition to any other
penalties available pursuant to this code.
Sec. 21-139. Transferability of commercial cannabis business license.
Section 21-67 of this chapter notwithstanding, business licenses issued to
commercial cannabis businesses pursuant to this article shall be transferable or
assignable upon presentation of a valid regulatory safety permit issued in the name of the
transferee or assignee.
Sec. 21-140. Severability.
Should any provision of this article, or its application to any person or
circumstance, be determined by a court of competent jurisdiction to be unlawful,
unenforceable or otherwise void, that determination shall have no effect on any other
provision of this article or chapter or the application of this article or chapter to any other
person or circumstance and, to that end, the provisions hereof are severable.
Resolution 2018-049
Page 16 of 16