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HomeMy WebLinkAboutResolution No. 16-7653-Calling for Holding of Election for Measure Levy a Transaction and Use Tax Measurei i' i i i •i �i i' WHEREAS, City of Downey City Charter Section 1302 provides that all municipal elections shall be governed by state law except as otherwise provided in the City Charter or ordinance enacted by the City Council and not inconsistent with the City Charter; and WHEREAS, California Revenue and Taxation Code Section 7285.9 authorizes the City of Downey (the "City ") to levy a one -half of one percent transactions and use tax by ordinance following approval by two - thirds of the City Council and a majority vote of the qualified electors of the City voting in an election on the issue; and WHEREAS, the transactions and use tax is a general tax with all revenues deposited in the general fund for general governmental purposes and spent to preserve and protect the public health, safety, and welfare; and WHEREAS, the ordinance creates an independent Citizens' Oversight Committee to review on at least a quarterly basis the City's expenditure of revenues generated by the transactions and use tax, if approved by the voters, review annual audit reports related to the tax; make written reports to the City Council summarizing the committee's findings and including appropriate recommendations; and the ordinance shall expire twenty (20) years from the operative date of the ordinance (the "Measure "); and WHEREAS, the transactions and use tax would be levied in addition to the current sales tax and would be collected at the same time and in the same manner as the existing sales tax; and WHEREAS, the levying of the transactions and use tax of one -half of one percent would not cause the overall transactions and use tax in the City to exceed two percent in accordance with California Revenue and Taxation Code section 7251.1; and WHEREAS, California Constitution Article Xlll C, Section 2(b), requires that any general tax imposed, extended, or increased by the City Council be submitted to the electorate and approved by a majority vote before becoming effective; and WHEREAS, California Government Code Section 53724 requires this Resolution be adopted by a two - thirds vote of the City Council and consolidated with a statewide primary election, a statewide general election or a regularly scheduled local election; and WHEREAS, California Elections Code section 9222 authorizes the City Council to submit to the voters a proposition for the enactment of any ordinance at an election held not less than 88 days after the date of the order of election. *-101 A I IN Eel • NOW, THEREFORE; • OF OF DOWNEY DOES RESOLVE HEREBY • • 1 SECTION • BE VOTED ON ELECTION a. Ballot Language. That the City Council, pursuant to its right and authority, does order submitted to the voters at the General Municipal Election the following question: TRANSACTIONS AND USE TAX. To maintain and improve city services including city -run police and fire YES departments, paramedic /9 -1 -1 emergency response, anti- gang /drug /crime programs, school safety, after - school and seniors programs; ensure fire engines and emergency vehicles have updated equipment; and repair streets /potholes; shall the ordinance to increase the sales tax by one -half of one percent, providing NO $9,000,000 annually, to expire after 20 years, requiring audits, public disclosure of funds, and all funds only for Downey be adopted? The measure shall be designated on the ballot by a letter, as provided in California Elections Code Section 13116. b. Proposed Ordinance. The full text of the ordinance authorizing the transactions and use tax to be approved by the voters, entitled the "The City of Downey Transactions and Use Tax Ordinance," is attached as Exhibit "A" to this Resolution. The full text of the ordinance shall be printed in the Voter Information Pamphlet. C. Form of the Measure. The exact form of the measure is as specified in Section 1(a) of this Resolution., d. Passage of the Measure. The transactions and use tax is a general tax requiring the approval of a majority of the votes cast by qualified electors of the City voting in the election on the issue. e. Publication of Measure. The City Clerk is hereby directed to cause notice of the measure to be published in accordance with California Elections Code Section 12111 in the form attached as Exhibit "A" to this Resolution. f. Letter Designation. This measure shall be designated by letter by the Los Angeles County Registrar Recorder and /or the City Clerk as may be required. RESOLUTION NO. 16 -7653 PAGE 3 The City Clerk is authorized and directed to perform all acts necessary or required by law to implement this Resolution and related to the election. a. That the ballots to be used at the election shall be inform and content as required by law. b. That the City Clerk is authorized, instructed and directed to coordinate with the County of Los Angeles Registrar- Recorder /County Clerk to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. C. 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 Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. d. That `inall particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections. e. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form, and manner as required by law. The City Council authorizes the City Clerk to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill. • w The adoption of this Resolution is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq. ( "CEQA ") and 14 Cal. Code Reg. §§ 15000 et seq. ( "CEQA Guidelines "). The calling and noticing of a General Municipal Election for the submission of a ballot measure to voters is not a project within the meaning of CEQA Guidelines Section 15378. The transactions and use tax submitted to the voters is a general tax that can be used for any governmental purpose; it is not a commitment to any particular action or actions. As such, under CEQA Guidelines Section 15378(b)(4), the tax is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If any section, subsection, sentence, clause, phrase or portion of this Resolution or its application to any person or circumstance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution or its application to other persons and circumstances. The City Council of the City of Downey hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, PAGE 4 phrases, or portions be declared invalid or unconstitutional and, to that end, the provisions hereof are hereby declared to be severable. • is This Resolution shall take effect immediately upon its adoption. The City Clerk shall certify to the passage and adoption of this Resolution. I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a regular meeting held on the 28th day of June, 2016 by the following vote, to wit: RESOLUTION i ., PAGE 5 AN ORDINANCE OF OF DOWNEY TRANSACTIONS ENACTING A i USE TAX TO BE ADMINISTERED BY THE STATE BOARD OF EQUALIZATION, UPON ADOPTION BY THE VOTERS The People of the City of Downey do hereby ordain as follows: § ection 1. Chapter 1 E is hereby added to Article VI of the Downey Municipal Code with the following provisions: "Section 6199.60. Title. This chapter shall be known as the City of Downey Transactions and Use Tax Ordinance. The City of Downey will hereinafter be called City. This chapter shall be applicable in the incorporated territory of the City. Section 6199.61. Definitions. The following words and phrases shall be defined as set forth in this chapter, except that any term or phrase not defined in this shall have the same meaning as that term or phrase is defined in the California Revenue and Taxation Code, Division 2, Parts 1.6 and _1.7: A. "City" means the City of Downey. B. "Operative Date means the first day of the first calendar quarter commencing more than 110 days after the adoption of this chapter by vote of the electorate on November 8, 2016. C. "Chapter" means Chapter 1 E of Article VI of the Downey Municipal Code. D. "State" means the State of California. Section 6199.62. Purpose. This chapter is adopted to achieve the following, among other purposes, and it shall be interpreted liberally in order to accomplish all of its lawful purposes: A. To impose a retail transactions and use tax to be applied throughout the entire territory of the City to the fullest extent permitted by law and 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 Ordinance if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State -Board of Equalization in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax chapter that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division -2_of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes and, at the same time, minimize the burden of rec'brd keeping upon persons subject to taxation under the provisions of this chapter. E. To provide transactions and use tax revenue to the City to be used for general purposes. Section 6199.63. Contract with the State. Prior to the Operative Date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this chapter; provided, that if the City shall not have contracted with the State Board of Equalization prior to the Operative Date, it shall nevertheless so contract and in such a case the Operative Date shall be the first day of the first calendar quarter following the execution of such a contract. Section 6199.64. Transactions Tax Rate. For the privilege of selling tangible personal property of retail, -a general transactions -tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0.5% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail within the territory of the City on and after the Operative Date of this chapter. Section 6199.65. Place of Sale. For the purposes of this chapter, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out -of -state destination or to a common carrier for delivery to an out -of -state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the State sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. Section 6199.66. Use Tax Rate. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the Operative Date of this chapter for storage, use or other consumption in the territory of the City at the rate of 0.5 % of the sales price of the property. The sales price shall include delivery charges when such charges are subject to State sales or use tax regardless of the place to which delivery is made. Section 6199.67. Adoption of Provisions of State Law._ Except as otherwise provided in this chapter, and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted, incorporated, and made a part of this chapter as though fully set forth herein. Section 6199.68. Limitations on Adoption of State Law and Collection of Use Taxes. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Coder A. Wherever the State is named or referred to as the taxing agency, the name of the City shall be substituted. However, this substitution shall not be made when: 0 The word "State" is used as a part of the title of the State Controller, State Treasurer, Victim Compensation and Government Claims Board, State Board of Equalization, State Treasury, or the Constitution of the State of California; 2. The result of the substitution would require action to be taken by or against the City or any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this chapter. 3. In those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: a. Provide an exemption from the tax in this chapter with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from the tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code; or b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the State under the same provision of thatcode. 4. In sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. B. The word "City shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in section 6203 and in the definition of that phrase in section 6203. Section 6199.69. 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 transactors permit shall not be required by this chapter. A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State or by any city, city and county, or county pursuant to the Bradley- Burns Uniform Local Sales= and Use Tax Law or the amount of any state - administered transactions or use tax. B. There are exempted from the computation of the amount of transactions tax the gross receipts from: 1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government 0 2. Sales of property to be used outside the City, which is shipped to -a point outside the City pursuant to the contract of sale by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied: a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with - Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5- (commencing with Section 9840) of the Vehicle Code by registration to an out -of -City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and b. With respect to commercial vehicles, by registration to a place of business out -of -City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. 3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the Operative Date of this chapter. 4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the Operative Date of this chapter. 5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. C. There are exempted from the use tax imposed by this chapter, the storage, use or other consumption in this City of tangible personal property: 1. The gross receipts from the sale of which have been subject to a transactions tax under any state- administered transactions and use tax ordinance; 2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California; 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the Operative Date of this chapter; 4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the Operative Date of this chapter. 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 6. Except as provided in subparagraph (7), a' retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. 7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. D. Any person subject to use tax under this chapter may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for, a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Section 6199.71. Amendments. All amendments subsequent to the Effective Date of this chapter to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become adopted and part of this chapter; provided, however, that no such amendment shall operate so as to affect the rate of tax imposed by this chapter. The City Councilor the City's voters may amend this chapter to comply with applicable law or as may be otherwise necessary to further the chapter's stated purposes. However, as required by Article, Xlll C of the California Constitution, no amendment to this chapter may increase the rates of the taxes authorized by this chapter unless such amendment is submitted to and approved by the voters. Section 6199.72._ Prohibition on Enjoining Collection. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this chapter, or Part 1.6 of Division 2 of the 5 Revenue and Taxation Code, of any tax or any amount of tax required to be collected under this chapter. Section 6199.73. Severability. If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the remainder of the chapter or the application of such provision to other persons or circumstances shall not be affected thereby. Section 6199.74. Effective Date. This chapter relates to the levying and collecting of City transactions and use taxes and shall take effect immediately. However, no tax imposed by this chapter shall be effective unless that tax has been approved by the voters of the City as required by section 2(b) of Article XIII C of the California Constitution and applicable law. Section 6199.75. Precedence over Other Provisions in the Municipal Code. Any provision of the Downey Municipal Code or appendices thereto inconsistent with the provisions of this chapter, to the extent of such inconsistency and no further, is hereby repealed or modified to the extent necessary to effect the provisions of this chapter. Section 6199.76. Independent Citizen Oversight. A five - member Independent Citizens' Advisory Committee will be created by the City Council and shall meet at least quarterly to review the expenditure of revenues generated by the tax imposed by this chapter and to make recommendations to the City Council regarding those expenditures. The Independent Citizens' Advisory Committee shall meet publicly on at least a quarterly basis to review all revenues and expenditures of the transactions and use tax imposed by this chapter, review annual audit reports related to the tax, and make at least one written annual report to the City Council at a public meeting summarizing the Independent Citizens' Advisory Committee's findings and including any - -- - appropriate recommendations. The minutes of the meetings of Independent Citizens' Advisory Committee shall be provided to the City Council and placed on the next available regular City Council meeting agenda for informational purposes. Section 6199.77. Audit and Review. The proceeds of the tax imposed by this chapter, as well as the expenditure thereof, shall be audited annually by an independent accounting firm. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City's website. Section 6199.78. Sunset of Tax. The taxes imposed by this chapter shall remain effective until the soonest to occur of (i) the voters repeal this Ordinance; or (ii) twenty (20) years from the date the taxes imposed by this chapter are first collected. The taxes imposed by this chapter may be renewed prior to the sunset period by a majority of the electors voting in an election." Section 2. Execution. The Mayor shall sign and the City Clerk "shall attest to the passage of this Ordinance upon certification by the City Council of the results of the election approving this Ordinance. PASSED AND ADOPTED by the City Council of the City of Downey, on by the following vote:; 6 AYES: NOES; ABSENT: Attest: Adria M. Jimenez, MMC, City Clerk Alex Saab, Mayor I hereby certify that this Ordinance was APPROVED by voters of the City of Downey, State of California, at a general election held on November 8,_2016 and by the City Council of the City of Downey at a regular meeting of the Council held on November_, 2016. Attest: Adria M. Jimenez, MMC, City Clerk a Alex Saab, Mayor