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City of Desert Hot Springs
AGENDA
SPECIAL MEETING OF THE CITY COUNCIL
Thursday, December 26, 2024
9:00 AM
Council Chambers/City Hall
11-999 Palm Drive
Desert Hot Springs, California, 92240
NOTICE IS HEREBY GIVEN, as provided by Government Code Section 54956, that Mayor Matas has called a special meeting of the Desert Hot Springs City Council for the purpose stated below:
Page
CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
PUBLIC COMMENTS
At Special Meetings, public comments are considered under the agenda item.
PLEASE STATE YOUR NAME AND CITY OF RESIDENCE FOR THE
RECORD.
All comments are to be directed to the City Council and shall be devoid of any personal attacks. Members of the public are expected to maintain a professional, courteous decorum during public comments.
ADMINISTRATIVE CALENDAR:
1. New Transactions and Use Tax Agreement with the California Department of Tax and Fee Administration
Geoffrey Buchheim, Administrative Services Director
Recommendation:
1) Approve a resolution authorizing the City Manager to execute a preparatory and administration agreement for the new transaction and use (sales) tax;
2) Approve a resolution authorizing examination of sales or transactions and use tax records; and
3) Amend Ordinance 806 Imposing a Transaction and Use (Sales) Tax.
Staff Report - SR-24-264 - Pdf
3 - 24
ADJOURN
Americans with Disabilities Act
In an effort to comply with the requirements of Title 2 of the Americans with Disabilities Act of 1990, the City of Desert Hot Springs requires that any person in need of any type of special equipment, assistance, or accommodation(s) in order to communicate at a City public meeting, must inform the City Clerk a minimum of 72 hours prior to the scheduled meeting to enable the City to make reasonable arrangements.
SR-24-264
City of Desert Hot Springs
City Council
AGENDA ITEM REPORT
To: City Council
Date: December 26, 2024
Department: Administrative Services
Prepared by: Geoffrey Buchheim, Administrative Services Director Subject: New Transactions and Use Tax Agreement with the California Department of Tax and Fee Administration
RECOMMENDATION:
1) Approve a resolution authorizing the City Manager to execute a preparatory and administration agreement for the new transaction and use (sales) tax;
2) Approve a resolution authorizing examination of sales or transactions and use tax records; and 3) Amend Ordinance 806 Imposing a Transaction and Use (Sales) Tax.
BACKGROUND:
THIS ITEM IS STATE PROCEDURAL ONLY. COUNCIL AND VOTERS HAVE ALREADY
APPROVED
On November 5, 2024, the residents of Desert Hot Springs approved a 1% local transactions and use (sales) tax. As this is a new district tax, the City needs to enter into a new tax agreement with the California Department of Tax and Fee Administration (CDTFA). The CDTFA needs all completed documentation in order to levy the new local transactions and use tax. In order for the tax to start April 1, 2024, the CDTFA needs the following documents by December 27, 2024:
Certified copy of the Resolution to Execute Agreements Preparatory Agreement
Administration Agreement
Resolution for Examination of Confidential Records
Certified copy of the Transactions and Use Tax Ordinance Certification of Final Election Results
If the documents are not received by December 27, 2025, the new tax would not be able to start until July 1, 2025.
DISCUSSION:
The Preparatory Agreement allows for the CDTFA to set up the new tax and notify the tax payers (retailers) and other interested parties within the taxing district. The CDTFA charges the taxing agency a one-time implementation fee. The fee is dependent on staff costs, operating costs, printing, Item Number: 1.
SR-24-264
postage, and other items. While the Preparatory Agreement states a not to exceed amount of $175,000, that is the maximum amount allowed by law. The actual amount is based on the size of the taxing district. The preparatory costs in the last five years have been as low as $3,900 for the City of Angel Camp and as high as $18,500 for the City of Sacramento.
There is an Administration Agreement that allows for the CDTFA to administer and collect the new tax for agencies. An Administrative Cost fee is charged for this service and is based on the tax rate. For a 1% tax rate, the administrative fee would be 0.39% of revenue collected. The City’s new tax is expected to generate an additional $2.4 million in revenue for the City (based on past tax collections).
The annual administrative fee would estimated to be $9,360. The fee is collected quarterly and deducted from the amount of sales tax paid out to the City.
The Resolution for Examination of Confidential Records allows for the City to access the confidential sales tax records. This information is useful to the City for budget planning, economic development, transportation planning, and for other programs. The resolution will also allow for the City’s consultant, HdL Companies to access the confidential information and provide analysis and forecasting information to the City.
Previously, the Board of Equalization administered and collected taxes for the State. Starting January 1, 2018 by the Taxpayer Transparency and Fairness Act of 2017, the California Department of Tax and Fee Administration was created. The new department was created to administer and collect the State’s taxes. Ordinance 806 needs to be changed to remove the Board of Equalization and add the California Department of Tax and Fee Administration in its place.
FISCAL IMPACT:
The new tax is estimated to generate an additional $2.4 million annual revenue for the City. If it is implemented by April 1, 2024, it would provide an estimated $525,000 in additional revenue for FY2024-2025.
OPTIONAL:
Not approve the agreements, however that is NOT advised.
ATTACHMENTS:
1) Preparatory Agreement
2) Resolution For Examination of Confidential Records
3) Resolution to Execute Agreements
4) Administration Agreement
5) Ordinance Amending Ch. 3.18 (Urgency)
Item Number: 1.
(Rev. 07/24) 1
AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE
CITY'S TRANSACTIONS AND USE TAX ORDINANCE
In order to prepare to administer a transactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Desert Hot Springs, hereinafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department, do agree as follows:
1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax in conformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City.
2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance.
These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code.
3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for audit and verification by the City.
4. Any dispute as to the amount of preparatory costs incurred by the Department shall be referred to the State Director of Finance for resolution, and the Director's decision shall be final.
5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance.
City shall pay to the Department the amount of such costs on or before the last day of the next succeeding month following the month when the billing is received.
Item Number: 1.
(Rev. 07/24) 2
6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272.)
7. Communications and notices may be sent by first class United States mail or through email at [email protected]. If and when communications and notices may include confidential information, communications and notices must be sent through encrypted email at [email protected] or by mail. Communications and notices to be sent to the Department shall be addressed to:
California Department of Tax and Fee Administration
P.O. Box 942879 MIC: 27
Sacramento, California 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to City shall be addressed to:
City of Desert Hot Springs
Frank Luckino, City Manager
11999 Palm Drive
Desert Hot Springs, CA 92240
8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement.
CITY OF DESERT HOT SPRINGS CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION
By By
(Signature) Administrator
Frank Luckino Local Revenue Branch
(Typed Name) Date: _______________________________
City Manager
(Title)
Date: ____12/26/2024__________________
Item Number: 1.
RESOLUTION NO. 2024-_____
A Resolution of the City Council of the City of Desert Hot Springs Authorizing Examination of Sales or Transactions and Use Tax Records WHEREAS, pursuant to Ordinance Number 806, the City of Desert Hot Springs (City) entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes; and WHEREAS, pursuant to Ordinance Number 806, Revenue and Taxation Code section 7270, the City entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of transactions and use taxes; and WHEREAS, the City Council of the City of Desert Hot Springs deems it desirable and necessary for authorized officers, employees and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected by the Department for the City pursuant to that contract; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DESERT HOT SPRINGS HEREBY RESOLVES AS FOLLOWS:
Section 1. That the City Manager, Deputy City Manager, Administrative Services Director, & Finance Manager, or other officer or employee of the City designated in writing by the City Manager or Administrative Services Director to the California Department of Tax and Fee Administration is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department.
Section 2.
The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to that contract, and for purposes related to the following governmental functions of the City:
(a) Budget Planning
(b) Community Development
(c) Transportation Planning
(d) Economic Development
Item Number: 1.
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
Section 3. That HdL Companies is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the HdL Companies:
a) has an existing contract with the City to examine those sales or transactions and use tax records; b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to the contract between the City and the Department and for those purposes relating to the governmental functions of the City listed in section 2 of this resolution.
Section 4. That this resolution supercedes all prior resolutions of the City Council of the City of Desert Hot Springs adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056.
Introduced, approved and adopted this 26th day of December 2024.
ATTEST: (s) ___________________________
Jerryl Soriano, City Clerk
APPROVED: (s) ___________________________
Scott Matas, Mayor
APPROVED AS TO FORM: (s) ___________________________
Tuan-Anh Vu City Attorney
I, Jerryl Soriano, City Clerk of the City of Desert Hot Springs, California, DO HEREBY CERTIFY that the foregoing resolution was duly introduced, approved and adopted by the City Council of the City of Desert Hot Springs, at a special meeting of said Council held on the 26th day of December, 2024, by the following roll call vote:
Ayes: (Names of Councilmembers)
Noes: (Names of Councilmembers)
Item Number: 1.
Absent: (Names of Councilmembers)
(s) _______________________________
City Clerk
Item Number: 1.
RESOLUTION NO. 2024-___
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF DESERT HOT SPRINGS
AUTHORIZING THE CITY MANAGER TO EXECUTE
AGREEMENTS WITH THE CALIFORNIA DEPARTMENT OF TAX AND FEE
ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX.
WHEREAS, on December 12, 2024, the City Council approved Ordinance No. 806 amending the City Municipal Code and providing for a local transactions and use tax; and WHEREAS, the California Department of Tax and Fee Administration (Department) administers and collects the transactions and use taxes for all applicable jurisdictions within the state; and WHEREAS, the Department will be responsible to administer and collect the transactions and use tax for the City; and
WHEREAS, the Department requires that the City enter into a “Preparatory Agreement” and an “Administration Agreement” prior to implementation of said taxes, and Whereas, the Department requires that the City Council authorize the agreements; NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Desert Hot Springs that the “Preparatory Agreement” attached as Exhibit A and the “Administrative Agreement” attached as Exhibit B are hereby approved and the City Manager is hereby authorized to execute each agreement.
Item Number: 1.
6/7/2018
2 The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Desert Hot Springs held on December 26,2024, by the following vote, to wit:
AYES:
NOES:
ABSENT:
DATED: December 26, 2024
ATTEST: (s)
Jerryl Soriano, City Clerk
APPROVED: (s)
Scott Matas, Mayor
APPROVED AS TO FORM: (s) __________
Tuan-Anh Vu, City Attorney
Item Number: 1.
AGREEMENT FOR STATE ADMINISTRATION
OF CITY TRANSACTIONS AND USE TAXES
The City Council of the City of Desert Hot Spring has adopted, and the voters of the City of Desert Hot Springs (hereafter called “City” or “District”) have approved by the required majority vote, the City of Desert Hot Springs Transactions and Use Tax Ordinance (hereafter called “Ordinance”), a copy of which is attached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the “Department”) and the City do agree as follows:
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in the Agreement, they shall be interpreted to mean the following:
1. "District taxes" shall mean the transactions and use taxes, penalties, and interest imposed under an ordinance specifically authorized by Revenue and Taxation code Section 7251, and in compliance with Part 1.6, Division 2 of the Revenue and Taxation Code.
2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto, Ordinance No. 806, as amended from time to time, or as deemed to be amended from time to time pursuant to Revenue and Taxation Code Section 7262.2.
ARTICLE II
ADMINISTRATION AND COLLECTION
OF CITY TAXES
A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance.
Item Number: 1.
(Rev. 7/24) 2
B. Other Applicable Laws. City agrees that all provisions of law applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent with Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawn from that Fund for any authorized purpose, including making refunds, compensating and reimbursing the Department pursuant to Article IV of this Agreement, and transmitting to City the amount to which City is entitled.
C. Transmittal of money.
1. For the period during which the tax is in effect, and except as otherwise provided herein, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City periodically as promptly as feasible, but not less often than twice in each calendar quarter.
2. For periods subsequent to the expiration date of the tax whether by City’s self-imposed limits or by final judgment of any court of the State of California holding that City’s ordinance is invalid or void, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter.
3. Transmittals may be made by mail or electronic funds transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts withheld pursuant to Article IV of this Agreement.
D. Rules. The Department shall prescribe and adopt such rules and regulations as in its judgment are necessary or desirable for the administration and operation of the City Ordinance and the distribution of the district taxes collected thereunder.
E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement, the Department shall give no preference in applying money received for state sales and use taxes, state-administered local sales and use taxes, and district transactions and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the claims of the State, cities, counties, cities and counties, redevelopment agencies, other districts, and City as their interests appear.
Item Number: 1.
(Rev. 7/24) 3
F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also will be available for the payment of the claims of City for district taxes owing to it as its interest appears.
The Department shall not be required to change the terms of any security now held by it, and City shall not participate in any security now held by the Department.
G. Records of the Department.
When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized personnel of the City to examine the records of the Department, including the name, address, and account number of each seller holding a seller’s permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement.
H. Annexation. City agrees that the Department shall not be required to give effect to an annexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes, earlier than the first day of the calendar quarter which commences not less than two months after notice to the Department. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not coterminous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary.
ARTICLE III
ALLOCATION OF TAX
A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code:
1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion Item Number: 1.
(Rev. 7/24) 4
of the Department, to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers.
2. All district taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayer's self-declared district taxes for the period for which the determination, billing, refund or credit applies.
B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Department in determining the place of use.
ARTICLE IV
COMPENSATION
The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City.
ARTICLE V
MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first class United States mail to the addresses listed below, or to such other addresses as the parties may from time to time designate or through email at [email protected]. If and when communications and notices may include confidential information, communications and notices must be sent through encrypted email at [email protected] or by mail.
Item Number: 1.
(Rev. 7/24) 5
Communications and notices to be sent to the Department shall be addressed to:
California State Department of Tax and Fee Administration P.O. Box 942879
Sacramento, California 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to the City shall be addressed to:
City of Desert Hot Springs
Frank Luckino, City Manager
11999 Palm Drive
Desert Hot Springs, CA 92240
Unless otherwise directed, transmittals of payment of District transactions and use taxes will be sent to the address above.
B. Term. The date of this Agreement is the date on which it is approved by the Department of General Services. The Agreement shall take effect on 1/1/2025. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance.
C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal.
Item Number: 1.
(Rev. 7/24) 6
ARTICLE VI
ADMINISTRATION OF TAXES IF THE
ORDINANCE IS CHALLENGED AS BEING INVALID
A. Impoundment of funds.
1. When a legal action is begun challenging the validity of the imposition of the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitted to it under Article II. C., until a court of competent jurisdiction renders a final and non-appealable judgment that the tax is valid.
2. If the tax is determined to be unconstitutional or otherwise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees becoming final and non-appealable.
B. Costs of administration. Should a final judgment be entered in any court of the State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the terms of this Agreement, the parties mutually agree that:
1. Department may retain all payments made by City to Department to prepare to administer the City Ordinance.
2. City will pay to Department and allow Department to retain Department's cost of administering the City Ordinance in the amounts set forth in Article IV of this Agreement.
3. City will pay to Department or to the State of California the amount of any taxes plus interest and penalties, if any, that Department or the State of California may be required to rebate or refund to taxpayers.
4. City will pay to Department its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedures for processing Item Number: 1.
(Rev. 7/24) 7
the rebates or refunds, its costs of actually making these refunds, designing and printing forms, and developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code.
5. Costs may be accounted for in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summary form. Detailed records will be retained for audit and verification by City.
6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final.
7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes, interest, and penalties refunded or paid to taxpayers, together with Department costs incurred in making those refunds.
CITY OF DESERT HOT SPRING CALIFORNIA STATE DEPARTMENT OF
TAX AND FEE ADMINISTRATION
By By
(Signature) Administrator
Local Revenue Branch
Frank Luckino
(Typed Name) Date: _______________________________
City Manager
(Title)
12/26/2024
(Date)
Item Number: 1.
ORDINANCE NO. ___
AN URGENCY ORDINANCE OF THE CITY OF DESERT HOT
SPRINGS,
CALIFORNIA AMENDING MULTIPLE SECTIONS OF CHAPTER 3.18
OF THE DESERT HOT SPRINGS MUNICIPAL CODE
WHEREAS, the City of Desert Hot Springs (“City”) is a charter city organized pursuant to Article XI of the California Constitution; and WHEREAS, on November 5, 2024, the voters of the City approved Measure P, a ballot measure to impose a 1% (one percent) transactions and use (sales) tax; and WHEREAS, Measure P is now codified as Chapter 3.18 of the Desert Hot Springs Municipal Code (“DHSMC”); and
WHEREAS, the City Council finds that Chapter 3.18 requires certain amendments for administrative purposes and to facilitate coordination with State agencies, including the California Department of Tax and Fee Administration, in order to implement Measure P; and
WHEREAS, the City Council finds that the amendments contained within this Ordinance do not affect or otherwise raise the amount of the duly approved transactions and use tax described in Chapter 3.18 of the DHSMC; and WHEREAS, the tax authorized by Measure P will be collected in the City’s general fund, which supports the City’s programs, services, and projects; and WHEREAS, the City Council finds that sufficient general funds are required to preserve the public peace and health and safety of the City including, but not limited to, rapid police response times, improving public spaces, upgrading roads and bridges, and maintaining 911 emergency response times; and
WHEREAS, the City Council finds that any delay in implementing Chapter 3.18 will jeopardize public health and safety due to the risk of insufficient general funds caused by ongoing expenses to maintain the public health and safety; and WHEREAS, State agencies, including the California Department of Tax and Fee Administration, require this Ordinance to take effect immediately in order to begin the timely collection of the tax described in Chapter 3.18 of the DHSMC; and WHEREAS, the City Council finds that this Ordinance should be adopted on an urgency basis pursuant to the authority in Government Code section 36937(b) which provides that an ordinance passed by the City Council takes effect "immediately" if it is Item Number: 1.
passed by a four-fifths vote of the City Council "for the immediate preservation of the public peace, health or safety" and contains "a declaration of facts constituting the urgency."; and
WHEREAS, California Government Code Section 36937 additionally allows ordinances relating to taxes to take effect immediately; and WHEREAS, the City Council finds that the tax authorized in Chapter 3.18 of the DHSMC is a general tax that will be used for ongoing expenses related to the public health and safety and other City functions; and
WHEREAS, the City Council finds that the tax authorized in Chapter 3.18 of the DHSMC concerns current and usual expenses as contemplated by California Government Code Section 36937; and
WHEREAS, the City Council finds that amending Chapter 3.18 of the DHSMC is in the best interest of the public health, safety and welfare of the residents of the City.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Desert Hot Springs as follows:
Section 1. RECITALS
That the foregoing recitals are true and correct and are herein adopted by this reference.
Section 2. AMENDMENT OF MULTIPLE SECTIONS OF CHAPTER
3.18 OF TITLE 3 OF THE DESERT HOT SPRINGS
MUNICIPAL CODE
Sections 3.18.030, 3.18.040, 3.18.060, and 3.18.090 of Chapter 3.18 of the Desert Hot Springs Municipal Code are hereby amended to read as follows:
3.18.030. Purpose
This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
(a) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which 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.
Item Number: 1.
(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 therefore that can be administered and collected by the State Board of Equalization 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 State Board of Equalization Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
(d) To adopt a retail transactions and use tax ordinance 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 record keeping upon persons subject to taxation under the provisions of this ordinance. (e) To provide transactions and use tax revenue to the City to be used to fund general government fund purposes.
3.18.040 Contract with State.
Prior to the operative date, the City shall contract with the State Board of Equalization Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions, sales and use tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization 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 contract.
3.18.060 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 or her 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 Department of Tax and Fee Administration.
Item Number: 1.
3.18.090 Limitation on Adoption of State Law
In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted. The substitution, however, shall not be made when:
1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization Department of Tax and Fee Administration, State Treasury, or the Constitution of the State of California.
2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the State Board of Equalization Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Chapter.
3. In those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
(a). Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code; or (b). Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the State under the said provision of that Code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
B. The word "City" shall be substituted for the word “State” in the phrase “retailer engaged in business in this State” in Section 6203 and in the definition of that phrase in Section 6203.
Section 3. SEVERABILITY
If any provision, section, paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, Item Number: 1.
paragraphs, sentences or words of this ordinance as hereby adopted shall remain in full force and effect.
Section 4. REPEAL OF CONFLICTING PROVISIONS
That all the provisions of the Municipal Code as heretofore adopted by the City of Desert Hot Springs that are in conflict with the provisions of this ordinance are hereby repealed.
Section 5. EFFECTIVE DATE
That this ordinance is an urgency ordinance for the immediate preservation of the public health and safety and to facilitate the collection of taxes for usual and current expenses and it shall be passed and become effective immediately upon its introduction pursuant to California Government Code Section 36937.
Section 6. CERTIFICATION
That the City Clerk shall certify to the passage of this ordinance and shall cause the same to be published according to law.
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Item Number: 1.
PASSED AND ADOPTED by the City Council of the City of Desert Hot Springs at a regular meeting held on the ___ day of ______, 2024 by the following vote:
Ayes:
Noes:
Abstain:
Absent:
ATTEST:
____________________________________
Jerryl Soriano, City Clerk
APPROVED AS TO FORM:
____________________________________
Tuan-Anh Vu, City Attorney
_______________________________
Scott Matas, Mayor
Item Number: 1.