HomeMy WebLinkAbout2019-068 - Reducing the Commercial Cannabis Gross Receipts TaxLS 9.03.19
RESOLUTION NO. 2019-068
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA REDUCING THE COMMERCIAL CANNABIS
GROSS RECEIPTS TAX FOR TESTING LABORATORIES
FROM FIVE (5%) PERCENT TO ONE (1 %) PERCENT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. In November2016, the California Marijuana Legalization Initiative, also known as
the Adult Use of Marijuana Act (AUMA or Proposition 64) was approved by the
voters of the State of California. The AUMA legalized recreational marijuana.
B. In 2017, the Governor signed into law Senate Bill 94 also known as Medicinal
and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA) establishing
state regulations and licensing for retail sales, manufacturing, distribution,
delivery and testing of adult -use (also called recreational) marijuana.
C. On November 9, 2017, the City Council created Chapter 40 of the Santa Ana
Municipal Code, allowing adult -use commercial cannabis retail businesses in
the city, and amended certain sections of Chapters 18 and 21 of the Santa Ana
Municipal Code to ensure consistency with State law and Chapter 40. Since
2014, the City has allowed medicinal marijuana collectives/cooperatives to
operate within the City pursuant to regulations set forth in Chapter 18 and
Chapter 21 of the Santa Ana Municipal Code.
D. On March 20, 2018, the City Council adopted Ordinance NS-2941 and NS-
2942, allowing and regulating commercial cannabis testing laboratories.
E. A general business license tax based on the gross receipts derived from
commercial cannabis businesses and gross square footage would generate
essential funds for protecting vital City services and facilities and place such
businesses on more equal footing with existing City businesses, including
medical marijuana businesses which already pay a business license tax.
F. The City Council is authorized to impose general and special taxes in order to
fund municipal services and facilities, subject to requisite voter approval as set
forth in Government Code section 53720.
G. The voters of the City of Santa Ana approved Measure Y (Ordinance NS-2962)
on November 6, 2018, for the purpose of fixing the rate of taxation for
Resolution No. 2019-068
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commercial cannabis businesses including delivery, distribution,
manufacturing, cultivation, testing and retail sales of cannabis and related
products. The taxes required to be paid under this article are declared to be
required pursuant to the taxing power of the City of Santa Ana solely for the
purpose of obtaining revenue and are not regulatory permit fees.
H. The City of Santa Ana desires to remain at the forefront of commercial cannabis
by allowing and regulating commercial cannabis business activities, routinely
updating and amending its ordinances, and establishing commercial cannabis
gross receipts tax rates that are competitive and provide for the needs of the
Santa Ana community.
The City of Santa Ana has a compelling interest in ensuring that cannabis is
not sold in an illicit manner, in protecting the public health, safety and welfare
of its residents and businesses, in preserving the peace and quiet of the
neighborhoods in which these businesses may operate, and in providing
access to safe and tested cannabis to residents. To ensure safe and tested
cannabis, the City desires to see the establishment and successful operation
of testing facilities and testing laboratories in the City.
J. Section 21-133 (d) of Article XI11 of Chapter 21 of the Santa Ana Municipal Code
establishes the initial commercial cannabis testing facility of testing laboratory
gross receipts tax rate at five (5%) percent.
K. Section 21-133 (c) of Article XI11 of Chapter 21 of the Santa Ana Municipal Code
allows the City Council by resolution to implement any lower tax rate it deems
appropriate.
Section 2. The City Council hereby establishes the commercial cannabis testing
facility/testing laboratory gross receipts tax rate at one (1 %) percent, lowering it from five
(5%) percent. The reduced one (1%) percent gross receipts tax rate shall be deemed
effective July 1, 2019.
ADOPTED this 20th day of August, 2019.
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
Lisa Storck
Assistant City Attorney
Resolution No. 2019-068
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AYES: Councilmembers Penaloza, Sarmiento, Solorio, Villegas (4)
NOES: Councilmembers Iglesias (1)
ABSTAIN: Councilmembers Pulido(1)
NOT PRESENT: Councilmembers None (0)
`Ward 4 Representative Vacant.
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Daisy Gomez, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2019-068 to be the original Resolution adopted by the City Council of the
City of Santa Ana on August 20, 2019
Date: - z9' x1cl
Daisy Gomez
Clerk of the C uncil
City of Santa Ana
Resolution No. 2019-068
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