HomeMy WebLinkAbout55C - RESO SALES TAX MEASUREREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 17, 2018
TITLE:
DIRECT STAFF TO PLACE A PROPOSED
BALLOT MEASURE FOR A SALES AND USE
TAX MEASURE FOR GENERAL MUNICIPAL
SERVICES AT THE NOVEMBER 6, 2018
GENERAL MUNICIPAL ELECTION; APPROVE
RESOLUTIONS CALLING AND
CONSOLIDATING THE ELECTION; AND
AUTHORIZE COUNCILMEMBERS TO FILE
ARGUMENT; DIRECT CITY ATTORNEY TO
FILE IMPARTIAL ANALYSIS; AND OTHER
RELATED ACTIONS
(STRATEGIC PLAN NO. 5, 1)
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1b' Reading
❑ Ordinance on 2"d Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Options for Consideration for the Santa Ana Neighborhood Safety and Essential City Services
Protection Measure. Staff recommends the City Council approve options 1a and 2 through 6.
a. Modify position taken at the July 3, 2018, City Council meeting to place a 1.5% rather
than a 1.0% add on sales and use tax measure to be referred to as the Santa Ana
Neighborhood Safety and Essential City Services Protection Measure, on the November
6, 2018 General Municipal Election ballot, and decide whether the 1.5% add on sales and
use tax should be imposed through 2030 and reduced to 1.0% in 2031.
OR
b. Ratify the position taken at the July 3, 2018, City Council meeting to place a 1.0% add on
sales and use tax measure, referred to as the Santa Ana Neighborhood Safety and
Essential City Services Protection Measure, on the November 6, 2018 General Municipal
Election ballot.
2. Adopt Resolution of the City Council of the City of Santa Ana calling for 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 General Sales Tax Measure and
Providing for the Filing of Argument and Rebuttal Statements.
Request that the Board of Supervisors of Orange County Consolidate the City's General
Municipal Election with the Statewide GenprWcion.
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 2
4. Authorize the filing of Arguments and Rebuttals
a. Designate up to five (5) Councilmembers to author an Argument and Rebuttal statement.
b. Deadline to file Arguments will beset for July 31, 2018 at 5 p.m.
5. Direct the City Attorney to prepare Impartial Analysis.
6. Direct Clerk of the Council to publish legal notices as required by law.
DISCUSSION
At the July 3, 2018, City Council meeting, the Mayor and Council discussed the sales tax measure
staff report (55C). The City Council, by a vote of 4-1-1 (Solorio dissented, Benavides abstained and
Martinez absent) supported Recommended Action 1c, which is the option to have the voters of
Santa Ana consider a 1% add on sales and use tax. During the discussion, the City Council
expressed consideration and further discussion on recommended items 1a and 1b at the July 17,
2018 City Council meeting. Recommended item 1a is the 1.5% add on sales and use tax and
recommended item 1b is the 1.5% add on sales and use tax with a sunset on the 0.5% portion of
the tax through 2030, thus reducing 1.0% in 2031.
Additionally, City Council requested that staff provide options for a Shop Local program. Staff will be
presenting options for a Shop Local program for Council consideration at the August 21, 2018 City
Council meeting.
Background
At the February 5, 2018, Special City Council Meeting, Staff identified a structural deficit in the City's
proposed 2018-19 General Fund budget and five-year forecast. The City's financial forecast has
identified a budget deficit moving into the foreseeable future. This is a result of expenditures
outpacing revenue growth. To address these deficits, Staff identified a plan that includes
expenditure reductions, transformational program delivery changes and potential revenue
enhancements in order to continue to provide programs and services to the community. Given this
precarious financial position, and the cuts that were made in staffing following the Great Recession,
any changes would almost certainly require significant level of service reductions and or
eliminations. This represents a less than desired outcome. In the City's ongoing effort to evaluate
costs and revenue, the following actions have taken place:
• Contracted out the City's fire department
• Contracted out maintenance functions where feasible
• Modernized the Utility User Tax
• Evaluated and adjusted the City's miscellaneous fee schedule
• Reduced all non-essential personnel
• Invested in technology enhancements to reduce ongoing costs
55C-2
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 3
On March 20, 2018, the Mayor and City Council authorized staff to enter into agreements to
evaluate revenue generating opportunities to meet the City's needs in addressing the projected
deficit for the current fiscal year and for future fiscal years. As such, the City entered into a
consulting agreement with MuniServices on May 1, 2018, to evaluate two revenue measures: 1)
sales and use tax and 2) adult -use and commercial cannabis tax. The scope of work also included
strategy consulting services from GrassrootsLabs and polling services from FM3. Consideration of
the adult -use and commercial cannabis tax is provided as a separate ballot measure and directly
tied to the ordinances approved by the City Council in November 2017 and early 2018.
At the June 19, 2018 Council Meeting, the City Council voted to direct the City Manager and Staff to
prepare add on sales tax options, the required resolutions, documents and guidelines necessary to
proceed with a ballot measure. At that meeting, the City Council requested that staff brief members
of the City Council to provide information on different sales tax increments, sunset alternatives,
other revenue options, methods to ensure fiscal transparency, economic development opportunities,
and information on how new revenue would be allocated to programs and services for the
community.
Staff met with members of the City Council to provide additional information on the proposed
Neighborhood Safety and Essential City Services Protection Measure. This included information
regarding the need for additional new on-going revenues, projected revenues based on a variety of
add on sales and use tax increments, community needs and priorities, and the results of the poll
conducted by. FM3. The briefings provided an opportunity to present Staffs recommendation for the
Santa Ana Neighborhood Safety and Essential City Services Protection Measure to be placed on
the November 2018 ballot, which would generate the requisite funds to maintain and enhance
programs and services to the community.
What is Sales and Use Tax?
Sales tax is imposed on retail transactions for tangible personal property. The Use tax is imposed
on consumers of tangible personal property that is used, consumed, or stored. Sales tax is not
applicable to several general categories including:
1) Necessities of life (food products, unless heated, health related, housing),
2) General public benefit (alternate energy, museums, public art exhibits),
3) Industry benefit (transportation related such as motor vehicle fuel, entertainment industry);
4) Exclusions by definition (admission charges, sales price/gross receipts); and
5) Other exemptions, exclusions or credits (full list of exemptions is available at
hftps://www.cdtfa.ca.gov/formspubs/pub6l.pd .
A general-purpose tax measure requires approval from the majority of the voters (50% plus 1) to
implement such a tax. The sales and use tax is a common method used by various cities to
generate additional revenue for city programs and services.
55C-3
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 4
Orange County Cities with an Add On Sales and Use Tax
In 2016, voters in five other Orange County cities approved or reaffirmed six add on sales and use
tax measures. The following cities currently have an add on sales and use tax in Orange County:
City
Increment
Sales=&&Use'
Tax-Rdte
_-
Fountain Valley
1.0%
8.75%
Westminster
1.0%
8.75%
Stanton
1.0%
8.75%
La Palma
1.0%
8.75%
La Habra
0.5%
8.25%
Additionally, there are several other cities in Orange County that are currently evaluating sales and
use tax ballot measures for this upcoming November 2018 election cycle.
Consumer Response to Add On Sales and Use Tax
Consumers spending patterns are generally not impacted by local sales tax rates. Staff conducted a
survey of the Orange County cities that have a local add on sales and use tax and validated that
passage of add on sales tax measures has not led to a decline in sales tax revenue. Additionally,
when the tax revenue addresses city needs such as homelessness, public safety, quality of life and
infrastructure, consumers do not compare -shop for sales tax rates.
If the Santa Ana Neighborhood Safety and Essential City Services Protection Measure is approved,
staff anticipates launching an enhanced Shop Local campaign with an emphasis on the benefits of
local purchases on the economy and the services consumers will receive as a result of keeping their
spending within the City of Santa Ana.
Revenue Estimates
The City Council, at the June 19, 2018, Council meeting, requested estimates on the anticipated
revenue that may be generated at various add on sales and use tax increments. The chart below
outlines general estimates, which represent a full year of revenue, for consideration:
Increment
Annual Est.—",
1 %
cent
$60 million
1
cent
$40 million
%
cent
$30 million
'/2
cent
$20 million
55C-4
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 5
State law establishes regulations on add on sales and use tax measures and the increments that
are allowed to be considered, in this case, the City Council may consider a ballot measure in
increments of one quarter cent. The maximum sales tax rate allowed is 10.25% in the state.
Staff recommends a penny and a half add on sales and use tax measure which provides the
greatest opportunity to address community needs while addressing the City's long-term financial
stability. The proposed measure, if approved, would be a full percent below the ceiling established
by the State. Based on the majority approval of the add on sales and use tax measure by the Santa
Ana voters in November of 2018, it is anticipated that the additional new revenue would commence
in the spring of 2019.
Programs and Services the New Revenue will Fund
If the Santa Ana Neighborhood Safety and Essential City Services Protection Measure is approved
by the voters, new revenues generated will go to providing public safety, addressing homelessness,
providing deferred maintenance at parks and other City facilities, equipment replacement, capital
improvements, youth programming, library services, code enforcement and general municipal
services.
Additionally, the new add on sales tax revenue will support city needs and priorities as identified in
the May 1, 2018, City Council Meeting 2018-19 Trial Budget Presentation. This included funding for
the Quality of Life Team (QOLT) to address homelessness, leveraging economic development,
advancing police officer recruitments, furthering Enterprise Fund compliance, addressing service
delivery challenges, and augmenting investments in technology to streamline local government.
Transparency and Accountability
There are additional considerations that the Mayor and City Council may add to the ballot measure
to enhance transparency and accountability. These include annual independent audits, an oversight
review committee, an online open checkbook, mid -year fiscal review, and delineating and tracking
the new add on sales tax revenue and corresponding allocation to be evaluated as part of the
annual budget.
Annual independent audits are currently performed in accordance with the Governmental Account
Standards Board guidelines and are available on the City's website for the public's review. If a
requirement for an independent audit is added to the ballot measure, a separate audit would be
performed specific to the add on sales tax to ensure that new revenues are properly collected and
that expenditures are reviewed and consistent with governmental accounting practices.
An oversight review committee typically reviews on an annual basis the revenue receipts and
expenditures of local add on sales tax, status and performance of the programs and services that
are funded from the proceeds of the new revenues, and prepare reports for City Council
consideration.
55C-5
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 6
The City has had an open checkbook on its' City website since 2015. This provides a mechanism
for any interested party to review the City's expenditures at any time through a convenient online
system at no cost. As an enhancement, staff could place a specific portion of the open checkbook
system to be made available for the new sales tax revenue and expenditures.
Staff is recommending that the above referenced transparency and accountability elements be
included for consideration by the voters. It is the goal of the City to promote transparency and
accountability in all efforts and will continue to enact best practices to ensure fiscal stability moving
forward.
Sunset Options
A sunset clause is a provision that can be added to a ballot measure to end the effect of a tax.
Typically, sunset options are exercised in cases where the revenue is utilized to help address
temporary or term specific needs, or finance capital investments. When revenue from a ballot
measure, such as the initiative being proposed, funds operating costs, a sunset provision can have
unintended consequences. This is most evident when providing enhanced services that must later
be eliminated or drastically cut.
However, often times sunset clauses can help increase public support for a tax by limiting the
duration of the proposed increase. In Orange County, three cities have a sunset clause in their add
on sales tax. The cities of Fountain Valley and La Habra both have a 20 -year sunset, while the city
of Westminster has a 5 year sunset. Staff is recommending an option with a provision to sunset
0.5% from the 1.5% proposed increase after about eleven years, for the City Council's
consideration.
Staff anticipates that the new revenue will be utilized to meet current and future public safety needs,
addressing homelessness, youth programing, infrastructure needs, such as improving parks,
streets, and sidewalks along with other essential city services.
Other Revenue Considerations and Mitigating Development Costs
In addition to the revenue measure, the City is looking for opportunities to spur economic growth
and enhance its future revenue base. The City's Economic Development Division is focusing on an
array of initiatives that promote investment opportunities, business retention and attraction, revenue
generating projects, and workforce services. This includes developing a community branding
strategy, scheduled to be completed by the end of summer 2018 that promotes and markets Santa
Ana as an ideal place to do business, live and play. The Economic Development Divisions' efforts of
business attraction and retention are designed to ensure that new and existing businesses continue
to thrive in Santa Ana. With the adoption of the City ordinance to allow new cannabis related
businesses, Staff has identified several industrial buildings for inquiring cannabis companies looking
to grow their footprint. Support for these new cannabis related businesses will help increase
revenues related to the Cannabis industry for the City.
55C-6
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 7
In order to provide the City with additional Economic Development options, Staff is in the process of
finalizing a property disposition policy that will allow the sale of City owned property for revenue
enhancement opportunities from the proceeds of the sale, development, and community benefits.
In an effort to demonstrate the positive impacts of new development, the Planning & Building
Agency has begun including a section titled Economic Development Benefits on the Planning
Commission staff reports. The objective is to identify the economic benefits for each new proposed
development. The economic benefits of each development project will vary depending on the type
of use, but generally the reports will capture estimates of: new jobs, projected sales tax revenue,
and the increases in property evaluations, infrastructure impacts, and core service impacts. This is
an evolving process and other information may be collected for informational analysis and to
contribute towards the formation of future public policy.
The Public Works Agency is the lead department on a study that is currently underway to evaluate
the City's Development Impact Fees (DIF). The primary objective of a DIF program is to ensure that
new development pays the capital costs associated with growth. Currently, there are DIFs to
mitigate general impacts to infrastructure such as parks, library, transportation, sewer, and storm
drainage systems..
Other 2018 Initiatives and Impacts to Santa Ana Rate Pavers
In addition to the proposed ballot measure, there are other City of Santa Ana related initiatives on
the November 6, 2018 ballot. This includes potential ballot measures for charter modernization,
conversion to district elections, and an adult use & commercial cannabis tax. The Santa Ana
Unified School District is also considering a school bond measure in November 2018.
Additionally, there are other potential considerations such as the Poseidon Desalination Plant that
would impact water rates locally, possible gas tax repeal on the November 2018 ballot, potential
rate increases for utility service, and the reduction of local sanitation rates.
Staff Recommendation
Staff recommends that the City Council provide direction to staff and adopt the resolutions
necessary to place the Santa Ana Neighborhood Safety and Essential City Services Protection
Measure before the voters of Santa Ana. By placing the measure on the ballot the City Council is
not endorsing or taking a position, but rather asking the voters of Santa Ana to lend their voice to
the future of the City and the type of service levels they would like to receive moving forward.
If adopted, the City would have an add on sales and use tax of one and half percent, of which 100%
of the revenue generated would remain locally for Santa Ana to provide programs and services for
the community. In order to provide for transparency and accountability to the Santa Ana community,
staff is recommending that the ballot measure include annual independent audits, an oversight
review committee, an online open checkbook, and to include revenues into the annual budget.
55C-7
Proposed Add on Sales and Use Tax Measure for Municipal Services for Public
Consideration on the November 2018 Ballot
July 17, 2018
Page 8
If approved by the voters, the City would be in a position to continue to provide much needed
programs and services and look to enhance the quality of life and wellbeing of the current and future
community of Santa Ana.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #5 Community Health, Livability,
Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement
initiative to expand access to information and create opportunities for stakeholders to play an active
role in discussing public policy and setting priorities).
FISCAL IMPACT
The County Registrar of Voters office has estimated that the additional cost of adding a ballot
measure to the City's consolidated general municipal election would be approximately $16,500.
Funds for these administrative costs are available in the Clerk of the Council, Contractual Services
account no. 01107031 62300, FY 2018-2019.
APPROVED AS TO FUNDS AND ACCOUNTS:
\Qi�cnya�rvo .� u i o..
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
Exhibits: 1. Resolution of the City Council for the City of Santa Ana Calling for 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 General Sales
Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (I%
percent)
2. Resolution of the City Council for the City of Santa Ana Calling for 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 General Sales
Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (1.5%
until 2030 and then reduced to 1.0%)
3. Resolution of the City Council for the City of Santa Ana Calling for 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 General Sales
Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (1.5%)
55C-8
RESOLUTION NO. 2018 -XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR 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 GENERAL SALES TAX
MEASURE; AND PROVIDING FOR THE FILING OF
ARGUMENT AND REBUTTAL STATEMENTS
WHEREAS, pursuant to California Elections Code section 9222, the City Council
has authority to place measures on the ballot to be considered at a General Municipal
Election; and
WHEREAS, pursuant to the law of the State of California, the City Council has
called and ordered to be held in the City of Santa Ana, California, on Tuesday, November
6, 2018, a General Municipal Election; and
WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of
Santa Ana ("City'), subject to approval by a majority vote of the qualified voters of the City
voting in an election on the issue, to levy a transactions and use tax pursuant to the
Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general
purposes and projects; and
WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by
Proposition 218 effective November, 1996, requires that the measure proposing a
general tax be submitted to the voters at an election consolidated with a regularly
scheduled general election for members of the governing body of the local government;
and
WHEREAS, pursuant to California Constitution Article XIII C, section 2 and
Elections Code section 10201, the City has determined to submit a proposition to enact
an ordinance establishing a transactions and use tax to the voters at the City's next
regular election;
NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve
as follows:
Section 1. The City Council hereby finds and determines that the foregoing recitals
are true and correct and are hereby incorporated by reference.
Section 2. Under the provisions of the California Elections Code, the following
proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters
at the General Municipal Election to be held on November 6, 2018:
Exhibit 1
55C-9
Yes
To maintain effective 9-1-1 emergency response services by
retaining firefighters, police officers, and paramedics; addressing
homelessness/housing concerns and services; fixing
potholes/streets; maintaining parks, after school programs, senior
services, graffiti removal and unrestricted general revenue purposes; No
shall the measure be adopted approving an ordinance establishing a
one (1.0%) percent sale tax providing approximately $40 million
dollars annually until ended by voters, requiring annual audits,
citizens oversight, all funds only for Santa Ana?
Section 3. Should said measure be approved by the requisite vote, the ordinance
attached hereto as Exhibit A and incorporated by this reference shall be enacted,
Section 4. 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 5. 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 6. 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 7. 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:
1. 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.
55C-10
Section 8. 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
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 9. 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 10. 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 11. 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 12. 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 13, 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.
55C-11
Section 14. 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 15. 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.
Section 16. 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 17. 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 18. This Resolution shall take effect immediately upon its adoption by a
majority of the City Council.
Section 19, 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.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa
Ana, California, at its regular meeting held on the _ day of July, 2018, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
55C-12
ATTEST:
Maria D. Huizar
City Clerk
APPROVED AS TO FORM:
p�Grue7GL � . �14�'Yt,vu,
Sonia R. Carvalho
City Attorney
55C-13
EXHIBIT A
ORDINANCE N0, NS
AN ORDINANCE OF THE CITY OF SANTA ANA ADDING ARTICLE
VII TO CHAPTER 35 OF THE SANTA ANA MUNICIPAL CODE
RELATED TO A TRANSACTIONS AND USE TAX TO BE
ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION
The City Council of the City of Santa Ana does ordain as follows:
Section 1. Authority. The City Council and the Voters of the City of Santa Ana enact this
Ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the
California Constitution and Section 7285.9 of the California Revenue and Taxation Code.
Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana
Municipal Code to read as follows:
ARTICLE VII.- TRANSACTIONS AND USE TAX
Sec. 35-200. - Short title.
This chapter shall be known as the "Transactions and Use Tax" and shall
be applicable in the incorporated territory of the City of Santa Ana ("city").
Sec. 35-201. - Definitions.
For the purpose of this article the following words terms shall have
the meaning given in this section:
"In the city" means and includes all territory within the city limits.
"Operative Date" means the first day of the first calendar quarter
commencing more than 110 days afterthe later of the adoption of this article
and the approval by the voters of the city of a measure approving the
imposition of an increased transactions and use tax; provided that, if the city
shall not have entered into a contract with the California Department of Tax
and Fee Administration as required by section 35-203. prior to such date,
the operative date shall be the first day of the first calendar quarter following
the execution of such a contract.
Sec. 35-202 - Purpose.
This article of the Santa Ana Municipal Code has been adopted for
the following purposes, and directs that the provisions hereof be interpreted
in order to accomplish those purposes:
55C-14
(1) 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. This article 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.
(2) To adopt a retail transactions and use tax 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.
(3) To adopt a retail transactions and use tax 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 California
Department of Tax and Fee Administration in administering and collecting
the California State Sales and Use Taxes.
(4) To adopt a retail transactions and use tax that can be
administered in a manner that will, to the greatest degree possible, be
consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue
and Taxation Code, and thereby minimize the cost of collecting city
transactions and use taxes, and at the same time minimize the burden of
record keeping upon persons subject to taxation under the provisions
thereof.
Sec. 35-203. - 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
incidental to the administration and operation of this transactions and use
tax ordinance. If the city has not 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. The city council may make any technical amendments to this
article required by the California Department of Tax and Fee Administration,
except for any changes affecting the tax rate, tax methodology, or its
manner of collection.
Sec. 35-204. - Imposition of transactions and use 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
55C-15
at the rate of one percent (1.0%) of any gross receipts of the retailer from
the sale of all tangible personal property sold at retail in the city on and after
the operative date of this chapter.
Sec. 35-205. - Place of sale.
For the purposes of this article, 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.
Sec. 35-206. - Imposition of use tax — 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 or after the operative date of this chapter, at the rate of one
percent (1.0%) of the sales price of the property subject to the tax. 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.
Sec. 35-207. - Adoption of provisions of state law— Generally.
Except as otherwise provided in the article 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 § 6001)
of Division 2 of the Revenue and Taxation Code are hereby adopted and
made a part of this article as though fully set forth herein.
Sec. 35-208. -Adoption of provisions of state law— Limitations; Limitations
on collection of use taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and
Taxation Code:
(1) 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:
(A) 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;
55C-16
(B) 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 article.
(C) 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:
(i) 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;
(ii) 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.
(D) In Sections 6701, 6702 (except in the last sentence
thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation
Code.
(2) 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.
Sec. 35-209 - 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 article.
Sec. 35-210. - Exemptions and exclusions.
(1) Measure of Tax. There shall be excluded from the measure
of the transactions and 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 -Bums Uniform Local Sales and Use Tax Law or the
amount of any state -administered transactions or use tax.
(2) Transactions Tax Exemptions. There are exempted from the
computation of the amount of transactions tax the gross receipts from:
55C-17
(A) 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.
(B) 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:
(i) 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
(ii) 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.
(C) 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.
(D) A lease of tangible personal propertywhich 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.
For the purposes of subsections (2)(C) and (2)(D) 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.
(3) Use Tax Exemptions. There are exempted from the use tax
imposed by this article, the storage, use or other consumption in this city of
tangible personal property:
55C-18
(A) The gross receipts from the sale of which have been
subject to a transactions tax under any state -administered transactions and
use tax ordinance.
(B) 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.
(C) If the purchaser is obligated to purchase the property
for a fixed price pursuant to a contract entered into prior to the operative
date.
(D) 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.
For the purposes of subsections (3)(C) and (3)(D) 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.
(4) Exemption from Collection of Use Tax. Except as provided in
subsection (5), 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.
(5) Retailer Not Exempt from Collection of Use Tax. "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
55C-19
use tax from any purchaser who registers or licenses the vehicle, vessel, or
aircraft at an address in the city.
(6) Credit Against Use Tax for Transactions Tax Paid Elsewhere.
Any person subject to use tax under this article 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.
Sec. 35-211. - Adoption of amendments to state law.
All amendments subsequent to the effective date of this article 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 article, provided however, that no such amendment
shall operate so as to affect the rate of tax imposed by this article.
Sec. 35-212.- Enjoining collection prohibited.
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 hereunder, or Parts 1.6 of Division 2 of the Revenue and
Taxation Code, of any tax or any amount of tax required to be collected.
Sec. 35-213. — Termination.
The authority set forth in this article to impose a retail transactions
and use tax shall continue until such authority is terminated by the voters of
the City in the manner provided by law.
Sec. 35-214. - Oversight committee.
The City Council shall, by resolution establish as citizen oversight
committee to act in an advisory role to the City Council in reviewing the annual
revenue and expenditures of funds from the tax authorized by this article. The
resolution shall establish the committee members' terms, qualifications and duties,
and the committee's scope of authority.
Sec. 35-215. - Annual Audit.
An annual audit of the revenue generated by the sales and use tax and the
expenditures made will be conducted by an independent certified public
accountant.
55C-20
Sec. 35-216. - Annual Expenditures Disclosure.
The City of Santa Ana will publically disclose on an annual basis a list of
expenditures made with sales and use tax monies for the preceding fiscal year.
SECTION 2. Effective Date. Pursuant to the California Constitution Article
XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters
voting in the election on Measure " " vote in favor of the adoption of such measure,
this ordinance shall be deemed valid and binding and shall be considered adopted upon
the date that the vote Is declared by the City Council, and shall go into effect ten (10) days
after that date.
SECTION 3. Severability. If any section, sentence, clause or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of a court
of competent jurisdiction, such decision shall not affect the validity of the remaining
provisions of this Ordinance. The People of the City of Santa Ana hereby declare that
they 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 4. Certification/Summary. Following the City Clerk's certification that the
citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance
and the City Clerk shall cause the same to be entered In the book or original ordinance
of said City; and shall cause the same, or a summary thereof, to be published as required
by law.
PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6t'
day of November, 2018.
ATTEST:
City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
Mayor
55C-21
55C-22
RESOLUTION NO. 2018 -XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR 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 GENERAL SALES TAX
MEASURE AND PROVIDING FOR THE FILING OF
ARGUMENT AND REBUTTAL STATEMENTS
WHEREAS, pursuant to California Elections Code section 9222, the City Council
has authority to place measures on the ballot to be considered at a General Municipal
Election; and
WHEREAS, pursuant to the law of the State of California, the City Council has
called and ordered to be held in the City of Santa Ana, California, on Tuesday, November
6, 2018, a General Municipal Election; and
WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of
Santa Ana ("City"), subject to approval by a majority vote of the qualified voters of the City
voting in an election on the issue, to levy a transactions and use tax pursuant to the
Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general
purposes and projects; and
WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by
Proposition 218 effective November, 1996, requires that the measure proposing a
general tax be submitted to the voters at an election consolidated with a regularly
scheduled general election for members of the governing body of the local government;
and
WHEREAS, pursuant to California Constitution Article XIII C, section 2 and
Elections Code section 10201, the City has determined to submit a proposition to enact
an ordinance establishing a transactions and use tax to the voters at the City's next
regular election;
NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve
as follows:
Section 1. The City Council hereby finds and determines that the foregoing recitals
are true and correct and are hereby incorporated by reference.
Section 2. Under the provisions of the California Elections Code, the following
proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters
at the General Municipal Election to be held on November 6, 2018:
Exhibit 2
55C-23
Yes
To maintain effective 9-1-1 response; retaining firefighters and police
officers; addressing homelessness; fixing streets; maintaining parks,
youth and senior services, and unrestricted general revenue
purposes; shall the sales tax be increased one and one half (1.5%)
percent until 2030 providing approximately $60 million dollars No
annually, then reduced in 2031 to one (1 %) percent providing
approximately $40 million dollars annually, until ended by voters,
requiring annual audits, citizens oversight and for Santa Ana use
only?
Section 3. Should said measure be approved by the requisite vote, the ordinance
attached hereto as Exhibit A and incorporated by this reference shall be enacted.
Section 4. 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 5. 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 6. 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 7. 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:
1. 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.
55C-24
Section 8. 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
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 9. 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 10, 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 11. 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 12. 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 13. 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.
55C-25
Section 14. 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 15. 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.
Section 16. 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 17. 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 18. This Resolution shall take effect immediately upon its adoption by a
majority of the City Council.
Section 19. 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.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa
Ana, California, at its regular meeting held on the _ day of July, 2018, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
55C-26
ATTEST:
Maria D. Huizar
City Clerk
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
55C-27
EXHIBIT A
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF SANTA ANA ADDING ARTICLE
VII TO CHAPTER 35 OF THE SANTA ANA MUNICIPAL CODE
RELATED TO A TRANSACTIONS AND USE TAX TO BE
ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION
The City Council of the City of Santa Ana does ordain as follows:
Section 1, Authority, The City Council and the Voters of the City of Santa Ana enact this
ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the
California Constitution and Section 7285.9 of the California Revenue and Taxation Code.
Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana
Municipal Code to read as follows:
CHAPTER 35- TAXATION
ARTICLE VII. - TRANSACTIONS AND USE TAX.
Sec. 35-200. - Short title.
This article shall be known as the "Transactions and Use Tax' and shall be
applicable in the incorporated territory of the City of Santa Ana ("city").
Sec. 35-201. - Definitions.
For the purpose of this article the following words terms shall have
the meaning given in this section:
"In the city" means and includes all territory within the city limits.
"Operative Date" means the first day of the first calendar quarter
commencing more than 110 days after the later of the adoption of this
chapter and the approval by the voters of the city of a measure approving
the imposition of an increased transactions and use tax; provided that, if the
city shall not have entered Into a contract with the California Department of
Tax and Fee Administration as required by section 35-203. prior to such
date, the operative date shall be the first day of the first calendar quarter
following the execution of such a contract.
Sec. 35-202. - Purpose.
This article of the Santa Ana Municipal Code has been adopted for
the following purposes, and directs that the provisions hereof be interpreted
55C-28
in order to accomplish those purposes:
(1) 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. This article 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.
(2) To adopt a retail transactions and use tax 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.
(3) To adopt a retail transactions and use tax that imposes a tax
and provides a measure therefor 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.
(4) To adopt a retail transactions and use tax that can be
administered in a manner that will, to the greatest degree possible, be
consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue
and Taxation Code, and thereby minimize- the cost of collecting city
transactions and use taxes, and at the same time minimize the burden of
record keeping upon persons subject to taxation under the provisions
thereof.
Sec. 35-203. - 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
incidental to the administration and operation of this transactions and use
tax ordinance. If the city has not 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. The city council may make any technical amendments to this
chapter required by the California Department of Tax and Fee
Administration, except for any changes affecting the tax rate, tax
methodology, or its manner of collection.
55C-29
Sec. 35-204. - Imposition of transactions and use 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 one and one half percent (1.5%) of any gross receipts of the
retailer from the sale of all tangible personal property sold at retail in the city
on and after the operative date of this article until December 31, 2030 and
then at the rate of one percent (1 %) until ended by the voters.
Sec. 35-205. - Place of sale.
For the purposes of this article, 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.
Sec. 35-206.: Imposition of use tax — 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 or after the operative date of this article, at the rate of one and
one-half of one percent (1.5%) of the sales price of the property subject to
the tax until December 31, 2030 and then at the rate of one percent (1 %) of
the sales price of the property subject to the tax. 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.
Sec. 35-207. - Adoption of provisions of state law — Generally.
Except as otherwise provided in the article 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 § 6001)
of Division 2 of the Revenue and Taxation Code are hereby adopted and
made a part of this article as though fully set forth herein.
Sec. 35-208. - Adoption of provisions of state law — Limitations; Limitations
on collection of use taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and
Taxation Code:
55C-30
(1) 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;
(A) 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;
(B) 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 article.
(C) 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:
(i) 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;
(ii) 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.
(D) In Sections 6701, 6702 (except in the last sentence
thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation
Code.
(2) 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.
Sec. 35-209. - 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 article.
Sec. 35-210. - Exemptions and exclusions.
(1) Measure of Tax. There shall be excluded from the measure
of the transactions and use tax the amount of any sales tax or use tax
55C-31
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.
(2) Transactions Tax Exemptions. There are exempted from the
computation of the amount of transactions tax the gross receipts from:
(A) 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.
(B) 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:
(i) 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
(ii) 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.
(C) 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.
(D) 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.
For the purposes of subsections (2)(C) and (2)(D) 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
55C-32
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.
(3) Use Tax Exemptions. There are exempted from the use tax
imposed by this chapter, the storage, use or other consumption in this city
of tangible personal property:
(A) The gross receipts from the sale of which have been
subject to a transactions tax under any state -administered transactions and
use tax ordinance.
(B) 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 6366.9 of the Revenue and Taxation Code
of the State of California.
(C) If the purchaser is obligated to purchase the property
for a fixed price pursuant to a contract entered into prior to the operative
date.
(D) 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.
For the purposes of subsections (3)(C) and (3)(D) 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.
(4) Exemption from Collection of Use Tax. Except as provided in
subsection (5), 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.
55C-33
(5) Retailer Not Exempt from Collection of Use Tax. "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.
(6) Credit Against Use Tax for Transactions Tax Paid Elsewhere.
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.
Sec. 35-211. - Adoption of amendments to state law.
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 article, provided however, that no such
amendment shall operate so as to affect the rate of tax imposed by this
article.
Sec. 35-212. - Enjoining collection prohibited.
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 hereunder, or Parts 1.6 of Division 2 of the Revenue and
Taxation Code, of any tax or any amount of tax required to be collected.
Sec. 35-213. —Termination.
The authority set forth in this Article VIl to Impose a retail transactions
and use tax shall continue until such authority is terminated by the voters of
the City in the manner provided by law.
Sec. 35-214. - Oversight committee.
The City Council shall, by resolution establish as citizen oversight
committee to act in an advisory role to the City Council in reviewing the annual
revenue and expenditures of funds from the tax authorized by this article. The
55C-34
resolution shall establish the committee members' terms, qualifications and duties,
and the committee's scope of authority.
Sec. 35-215. - Annual Audit.
An annual audit of the revenue generated by the sales and use tax and the
expenditures made will be conducted by an independent certified public
accountant.
Sec. 35-216. - Annual Expenditures Disclosure.
The City of Santa Ana will publically disclose on an annual basis a list of
expenditures made with sales and use tax monies for the preceding fiscal year.
Sec. 35-217. — Sunset Provision.
On December 31, 2030, the rate of one and one half percent (1.5%) will be
reduced to one percent (1 %) until ended by the voters.
SECTION 2. Effective Date. Pursuant to the California Constitution Article
XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters
voting in the election on Measure " " vote in favor of the adoption of such measure,
this ordinance shall be deemed valid and binding and shall be considered adopted upon
the date that the vote is declared by the City Council, and shall go into effect ten (10) days
after that date.
SECTION 3. Severability. If any section, sentence, clause or phrase of this
.ordinance is for any reason held to be invalid or unconstitutional by a decision of a court
of competent jurisdiction, such decision shall not affect the validity of the remaining
provisions of this Ordinance. The People of the City of Santa Ana hereby declare that
they 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 4. Certification/Summary. Following the City Clerk's certification that the
citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance
and the City Clerk shall cause the same to be entered in the book or original ordinance
of said City; and shall cause the same, or a summary thereof, to be published as required
by law.
PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6th
day of November, 2018.
Mayor
55C-35
ATTEST:
Maria D. Huizar
City Clerk
APPROVED AS TO FORM:
W .4.
Sonia R. Carvalho
City Attorney
55C-36
RESOLUTION NO. 2018 -XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR 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 GENERAL SALES TAX
MEASURE AND PROVIDING FOR THE FILING OF
ARGUMENT AND REBUTTAL STATEMENTS
WHEREAS, pursuant to California Elections Code section 9222, the City Council
has authority to place measures on the ballot to be considered at a General Municipal
Election; and
WHEREAS, pursuant to the law of the State of California, the City Council has
called and ordered to be held in the City of Santa Ana, California, on Tuesday, November
6, 2018, a General Municipal Election; and
WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of
Santa Ana ("City''), subject to approval by a majority vote of the qualified voters of the City
voting in an election on the issue, to levy a transactions and use tax pursuant to the
Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general
purposes and projects; and
WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by
Proposition 218 effective November, 1996, requires that the measure proposing a
general tax be submitted to the voters at an election consolidated with a regularly
scheduled general election for members of the governing body of the local government;
and
WHEREAS, pursuant to California Constitution Article XIII C, section 2 and
Elections Code section 10201, the City has determined to submit a proposition to enact
an ordinance establishing a transactions and use tax to the voters at the City's next
regular election;
NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve
as follows:
Section 1. The City Council hereby finds and determines that the foregoing recitals
are true and correct and are hereby incorporated by reference.
Section 2. Under the provisions of the California Elections Code, the following
proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters
at the General Municipal Election to be held on November 6, 2018:
Exhibit 3
55C-37
Yes
To maintain effective 9-1-1 emergency response services by
retaining firefighters, police officers, and paramedics; addressing
homelessness/housing concerns and services; fixing
potholes/streets; maintaining parks, after school programs, senior
services, graffiti removal and unrestricted general revenue purposes; No
shall the measure be adopted approving an ordinance establishing a
one and one half (1.5%) percent sales tax providing approximately
$60 million dollars annually until ended by the voters, requiring
annual audits, citizen oversight, all funds only for Santa Ana?
Section 3. Should said measure be approved by the requisite vote, the ordinance
attached hereto as Exhibit A and incorporated by this reference shall be enacted.
Section 4. 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 5. 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 6. 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 7. 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:
1. 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.
55C-38
Section 8, 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
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 9. 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 10. 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 11. 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 12. 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 13. 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.
55C-39
Section 14. 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 15. 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.
Section 16. 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 17. 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 18. This Resolution shall take effect immediately upon its adoption by a
majority of the City Council.
Section 19, 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.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa
Ana, California, at its regular meeting held on the _ day of July, 2018, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
55C-40
ATTEST:
Maria D. Huizar
City Clerk
APPROVED AS TO FORM:
'TaW10, A. R
Sonia R. Carvalho
City Attomey
55C-41
EXHIBIT A
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF SANTA ANA ADDING
ARTICLE VII TO CHAPTER 35 OF THE SANTA ANA
MUNICIPAL CODE RELATED TO A TRANSACTIONS AND
USE TAX TO BE ADMINISTERED BY THE CALIFORNIA
DEPARTMENT OF TAX AND FEE ADMINISTRATION
The City Council of the City of Santa Ana does ordain as follows:
Section 1. Authority. The City Council and the Voters of the City of Santa Ana enact this
Ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the
California Constitution and Section 7285.9 of the California Revenue and Taxation Code.
Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana
Municipal Code to read as follows:
ARTICLE VII.- TRANSACTIONS AND USE TAX
Sec. 35-200. - Short title.
This article shall be known as the "Transactions and Use Tax" and shall be
applicable in the incorporated territory of the City of Santa Ana ('city").
Sec. 35-201. - Definitions.
For the purpose of this article the following words terms shall have
the meaning given in this section:
"In the city" means and includes all territory within the city limits.
"Operative Date" means the first day of the first calendar quarter
commencing more than 110 days after the later of the adoption of this
chapter and the approval by the voters of the city of a measure approving
the imposition of an increased transactions and use tax; provided that, if the
city shall not have entered into a contract with the California Department of
Tax and Fee Administration as required by section 35-203, prior to such
date, the operative date shall be the first day of the first calendar quarter
following the execution of such a contract.
Sec. 35-202 - Purpose.
This article of the Santa Ana Municipal Code has been adopted for
the following purposes, and directs that the provisions hereof be interpreted
in order to accomplish those purposes:
55C-42
(1) 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. This article 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.
(2) To adopt a retail transactions and use tax 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.
(3) To adopt a retail transactions and use tax that imposes a tax
and provides a measure therefor 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.
(4) To adopt a retail transactions and use tax that can be
administered in a manner that will, to the greatest degree possible, be
consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue
and Taxation Code, and thereby minimize the cost of collecting city
transactions and use taxes, and at the same time minimize the burden of
record keeping upon persons subject to taxation under the provisions
thereof.
Sec. 35-203. - 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
incidental to the administration and operation of this transactions and use
tax ordinance. If the city has not 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. The city council may make any technical amendments to this
article required by the California Department of Tax and Fee Administration,
except for any changes affecting the tax rate, tax methodology, or its
manner of collection.
Sec. 35-204. - Imposition of transactions and use 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
55C-43
at the rate of one and a half percent (1.5%) of any gross receipts of the
retailer from the sale of all tangible personal property sold at retail in the city
on and after the operative date of this chapter.
Sec. 35-205. - Place of sale.
For the purposes of this article, 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.
Sec. 35-206. - Imposition of use tax — 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 or after the operative date of this article, at the rate of one and a
half percent (1.5%) of the sales price of the property subject to the tax. 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.
Sec. 35-207. - Adoption of provisions of state law — Generally.
Except as otherwise provided in the article 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 § 6001)
of Division 2 of the Revenue and Taxation Code are hereby adopted and
made a part of this article as though fully set forth herein.
Sec. 35-208. - Adoption of provisions of state law — Limitations; Limitations
on collection of use taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and
Taxation Code:
(1) 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:
(A) 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;
55C-44
(A) 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;
(B) 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 article.
(C) 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;
(i) 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;
(ii) 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.
(D) In Sections 6701, 6702 (except in the last. sentence
thereof), 6711,-6715, 6737, 6797 or 6828 of the Revenue and Taxation
Code.
(2) 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.
Sec. 35-209 - 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 article.
Sec. 35-210. - Exemptions and exclusions.
(1) Measure of Tax. There shall be excluded from the measure
of the transactions and 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.
55C-45
(2) Transactions Tax Exemptions. There are exempted from the
computation of the amount of transactions tax the gross receipts from:
(A) 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.
(B) 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:
(i) 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
(ii) 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.
(C) 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.
(D) 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.
For the purposes of subsections (2)(C) and (2)(D) 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.
55C-46
(3) Use Tax Exemptions. There are exempted from the use tax
imposed by this article, the storage, use or other consumption in this city of
tangible personal property:
(A) The gross receipts from the sale of which have been
subject to a transactions tax under any state -administered transactions and
use tax ordinance.
(B) 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.
(C) If the purchaser is obligated to purchase the property
for a fixed price pursuant to a contract entered into prior to the operative
date.
(D) 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.
For the purposes of subsections (3)(C) and (3)(D) 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.
(4) Exemption from Collection of Use Tax. Except as provided in
subsection (5), 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.
(5) Retailer Not Exempt from Collection of Use Tax. "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
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(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.
(6) Credit Against Use Tax for Transactions Tax Paid Elsewhere.
Any person subject to use tax under this article 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.
Sec. 35-211. - Adoption of amendments to state law.
All amendments subsequent to the effective date of this article 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 article, provided however, that no such amendment
shall operate so as to affect the rate of tax imposed by this article.
Sec. 35-212.- Enjoining collection prohibited.
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 hereunder, or Parts 1.6 of Division 2 of the Revenue and
Taxation Code, of any tax or any amount of tax required to be collected.
Sec. 35-213. — Termination.
The authority set forth in this article to impose a retail transactions
and use tax shall continue until such authority is terminated by the voters of
the City in the manner provided by law.
Sec. 35-214. - Oversight committee.
The City Council shall, by resolution establish as citizen oversight
committee to act in an advisory role to the City Council in reviewing the annual
revenue and expenditures of funds from the tax authorized by this article. The
resolution shall establish the committee members' terms, qualifications and duties,
and the committee's scope of authority.
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Sec. 35-215. - Annual Audit.
An annual audit of the revenue generated by the sales and use tax and the
expenditures made will be conducted by an independent certified public
accountant.
Sec. 35-216. - Annual Expenditures Disclosure.
The City of Santa Ana will publically disclose on an annual basis a list of
expenditures made with sales and use tax monies for the preceding fiscal year.
SECTION 2. Effective Date, Pursuant to the California Constitution Article
XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters
voting in the election on Measure " " vote in favor of the adoption of such measure,
this ordinance shall be deemed valid and binding and shall be considered adopted upon
the date that the vote is declared by the City Council, and shall go Into effect ten (10) days
after that date.
SECTION 3. Severability. If any section, sentence, clause or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of a court
of competent jurisdiction, such decision shall not affect the validity of the remaining
provisions of this Ordinance. The People of the City of Santa Ana hereby declare that
they 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 4. Certification/Summary. Following the City, Clerk's certification that the
citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance
and the City Clerk shall cause the same to be entered in the book or original ordinance
of said City; and shall cause the same, or a summary thereof, to be published as required
by law.
PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6t'
day of November, 2018.
ATTEST:
Maria D. Huizar
City Clerk
Mayor
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APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
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