The amount of money that is budgeted for a project in a prior year but is not spent or encumbered and needs to be appropriated again in the current year in order to continue the program originally intended.
Payments of amounts remitted on behalf of another party, department or fund. They are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed (see Interfund Transactions).
An account used to set aside a portion of the fund balance as legally segregated for a specific use.
A special order of the City Council which requires less legal formality than an ordinance in terms of public notice and the number of public readings prior to approval. A resolution has lower legal standing than an ordinance. The adopted City budget is approved by resolution and requires a majority vote of the Council members present at budget adoption time. During the fiscal year other budget modifications made by the City Council require a majority plus one vote.
Requests for additional resources previously classified as enhancements are now categorized as Return on Investments. Requests will only be considered when the investment increases revenue, decreases operating expenses, or creates operating efficiency.
Sources of income used to finance City governmental services.
Attachment 2 94
Council Special Meeting, 6/29/2022, Item No. 7., Item Page 108, Packet Page 306 Salaries and Wages
Self Insurance
Service Benchmark
Special Revenue Funds
Supplies and Expenses
Taxes
Tourism Improvement District
Transient Occupancy Tax (TOT)
Trust and Agency Funds
Vehicle License Fee
A budget category which generally accounts for full-time, part-time, and temporary employees’ salaries, overtime costs and fringe benefits for a particular division or program.
A term often used to describe the retention by an entity of a risk of loss arising out of the ownership of property or the activity of the agency.
A short list of indicators (outputs, outcomes, trends over time) for the departmental or interdepartmental efforts important to Council and the community to communicate the City’s strategic and day-to-day work.
Revenues that can be spent only for specific purposes stipulated by the Constitution, external resource providers, or through enabling legislation
A budget category which accounts for all non-personnel expenses. Examples include office supplies, utility costs, legal advertising, equipment maintenance, small tool purchases, building/structure maintenance and contractual services.
Compulsory charges levied by a governmental unit for the purpose of financing services performed for the common benefit. This term does not include charges for services rendered only to those paying such charges, for example refuse collection.
An assessment established by the Monterey County Tourism Improvement District (MCTID) in 2007, used to administer marketing programs to promote the County of Monterey as a tourism destination and to fund projects, programs, and activities that benefit lodging businesses within the district. The assessment levied on lodging businesses within the city of Monterey is $2.00 per occupied room night for full service facilities and $1.00 per occupied night for limited service. The City is entitled to retain one percent (1%) of the assessments collected to defer the administrative costs incurred. All of the assessments imposed are reviewed annually by City Council as the lead agency for the entire county, based on the annual reports prepared by the Monterey County Convention and Visitors Bureau.
A tax on hotel/motel stays thirty days or less. The rate in the City of Monterey is currently 10%.
Types of fiduciary funds which account for assets held by the City in a trustee capacity. The budget does not appropriate fiduciary funds.
Vehicle License Fee (VLF) is an annual fee on the ownership of a registered vehicle in California. It has been assessed on all privately owned registered vehicles in California in place of taxing vehicles as personal property since 1935. The VLF is paid to the Department of Motor Vehicles (DMV) at the time of annual vehicle registration. A portion of VLF had traditionally been apportioned to cities on a per capita basis. However, effective July 1, 2011, virtually all VLF revenues previously apportioned to cities were shifted to fund law enforcement grants as a part of efforts to solve the State’s chronic budget problems.
Attachment 2 95
Council Special Meeting, 6/29/2022, Item No. 7., Item Page 109, Packet Page 307 monterey.org
Attachment 2 96
Council Special Meeting, 6/29/2022, Item No. 7., Item Page 110, Packet Page 308 Council
Agenda Report
№10/13
FROM: Hans Uslar, City Manager
By: Nat Rojanasathira, Assistant City Manager
Rafaela King, Finance Director
Clementine Bonner Klein, City Clerk
SUBJECT: Calling a General Municipal Election for November 8, 2022 and Proposing a General Business License Tax on Commercial Cannabis Activity (Exempt from CEQA pursuant to Pub. Resources Code 21065, CEQA Guidelines 15378(b)(4), 15061(b)(3) and Pub. Resources Code 21080, subd. (b)(8); CEQA Guidelines 15273(a)(4).)
RECOMMENDATION:
That the City Council adopt a resolution calling the City’s general municipal election for November 8, 2022, proposing a general business license tax on commercial cannabis activity, and authorizing the City Manager to execute an agreement with Monterey County to administer the election.
VALUE DRIVER:
This recommendation is consistent with the value driver to “foster a local government that is transparent and collaborative; and solicits, welcomes and appreciates input from all.” This recommendation is also consistent with the value driver of “fiscal stewardship” to serve as stewards of the City’s financial resources through sound economic vitality efforts, streamlining operations, reasonable revenue enhancements, visionary long-term planning, fiscal transparency, and community partnerships.
POLICY IMPLICATIONS:
This recommendation is consistent with the City of Monterey Charter requirements for general municipal elections.
FISCAL IMPLICATIONS:
Pursuant to Elections Code section 10002, the City will reimburse the Monterey County Elections Department in full for its proportionate share of election services performed. The cost is estimated to be $163,490 based on the number of registered voters in the City. This cost has been included in the FY 2022/23 proposed budget.
With regard to the proposed business license tax for commercial cannabis activity, the estimated revenue according to HdL is $604,000 to $1.3 million based on three storefront dispensaries and one cannabis testing laboratory.
Date: 6/29/2022
Item No.: 8.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 1, Packet Page 309 ENVIRONMENTAL DETERMINATION:
The City of Monterey determined that calling for the election is not a project as defined by the California Environmental Quality Act (CEQA) (CCR, Title 14, Chapter 3 (CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent projects resulting from this action will be assessed for CEQA applicability.
The City of Monterey determined that the proposed commercial cannabis business license tax is exempt from CEQA because it can be seen with certainty that there is no possibility that its enactment would have a significant effect on the environment (Pub. Resources Code 21065, CEQA Guidelines 15378(b)(4), 15061(b)(3) and because the Ordinance involves the approval of government revenues to fund existing services (Pub. Resources Code 21080, subd. (b)(8); CEQA Guidelines 15273(a)(4). It does not make any commercial activity lawful nor commit the City to fund any particular activity.
ALTERNATIVES CONSIDERED:
Elections:
No alternatives are considered. Elections Code section 10402.5 requires any municipal election held on a statewide election date to be consolidated with the statewide election. City of Monterey Charter section 2.3 and California Elections Code section 1000(e) both call for elections to be held on the first Tuesday after the first Monday in November this year; therefore, the November 8, 2022 general municipal election must be consolidated .
Cannabis Tax Ballot Measure: Council could consider to include cultivation in the tax ballot measure.
DISCUSSION:
Calling the Election
Pursuant to Section 2.3 of the City Charter, November 8, 2022 is the next general municipal election date for the election of the Mayor and two Councilmembers. For the first time, Monterey’s voters will elect district-based Councilmembers for Districts 1 and 2 pursuant to a district based elections system set forth in City Code section 2-2.00 et seq. The districting process took place between September 2021 and February 15, 2022.
Any proposed measure for the ballot must be placed on the ballot by Council resolution and submitted to the Monterey County Board of Supervisors by August 12, 2022. The last regular Council meeting prior to that deadline is August 2, 2022.
Consolidating the City’s general municipal election with the statewide general election on the same date, as required by State law, means that the Monterey County Elections Department will Council Special Meeting, 6/29/2022, Item No. 8., Item Page 2, Packet Page 310 conduct all printing and mailing of sample ballots, computer tabulation, hiring and management of precinct workers, and canvassing of results. Other requirements will be performed by the City Clerk as the City’s elections official, such as the publication of required notices, and administration of all City filings, including candidates’ nomination papers and optional statements of qualification, and FPPC conflict of interest and financial reporting.
Cannabis Tax Ballot Measure
Cannabis businesses, other than one cannabis testing laboratory, are currently prohibited in the City.
The City Council began its discussion of authorizing cannabis businesses during a Study Session held on September 30, 2020. Thereafter, The Roadmap for Cannabis, which was reviewed by the City Council on December 1, 2020, provided general direction on how to solicit public feedback, engage in policy development, and move forward with the potential implementation of commercial cannabis policy in the City, including a revenue strategy. This agenda item addresses the revenue strategy. Additional next steps include:
1. Preparation of Specific Plan and zoning amendments and associated environmental review documents;
2. Approval of planning/zoning changes by the Planning Commission and City Council;
3. Issuance of Request for Proposal for the City’s three cannabis retail dispensaries (if approved);
4. Review of Proposals and selection of candidate businesses;
5. Cannabis business obtain use permits (if required by planning amendments);
6. Businesses open.
Proposition 64 added a state excise tax of 15% on the privilege of purchasing cannabis at a retail store (Rev. & Taxation Code section 34011(a).) Proposition 64 did not affect the City’s authority to impose taxes on cannabis except for cannabis cultivated for personal use is exempt; medical cannabis is exempt from state and local sales tax, but not state or local excise taxes.
The City’s sales tax cannot differ from Bradley-Burns Uniform Sales and Use tax in either what is taxed or the rate of tax. Accordingly, local taxes on cannabis commerce are typically business license taxes, but often calculated as a percentage of retail sales and reflected on retail receipts, so they are commonly perceived as sales taxes when, technically, they are not.
The City Council directed staff on December 21, 2021 to bring forward for its consideration a ballot measure to ask the voters to implement a local cannabis excise tax.
If voters approve the proposed measure, cannabis retail businesses would pay an initial tax of 4%, cannabis testing lab businesses would pay 1%, and all other cannabis businesses would pay 6%. The measure would allow the City Council to increase the tax to up to 8% for cannabis retail businesses, 2% for testing laboratories, and 8% for all other businesses. In addition to these tax rates, the measure also allows higher taxes on cannabis-infused beverages containing natural or artificial sweeteners and on high potency products (those with more than 17% THC) to discourage products with public health risks.
The proposed rates are mostly aligned with other cannabis retail tax rates in the region which range from 4.5% in unincorporated Monterey County to 6% in Santa Cruz County. Some cities, Council Special Meeting, 6/29/2022, Item No. 8., Item Page 3, Packet Page 311 such as Seaside, have voter-approved ordinances authorizing a cannabis retail tax of up to 10%, with a lower rate adopted by City ordinance.
Conclusion:
It is recommended to adopt the resolution calling for, and requesting consolidation of, the election and placing a cannabis business tax on the November 8, 2022 ballot. (Attachment 1.) A Statement of Election Facts, which will be submitted to Monterey County Elections following the Council’s calling the election, is included as Attachment 2.
Attachments: 1. Resolution
2. Statement of Election Facts
Writings distributed for discussion or consideration on this matter within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, will be made available at the following link:
https://monterey.org/Submitted-Comments
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 4, Packet Page 312 1 RESOLUTION NO. ____
A RESOLUTION OF THE MONTEREY CITY COUNCIL CALLING A GENERAL MUNICIPAL ELECTION FOR NOVEMBER 8, 2022 AND PROPOSING A GENERAL
BUSINESS LICENSE TAX ON COMMERCIAL CANNABIS ACTIVITY
WHEREAS, the City of Monterey imposes license taxes upon businesses in the city; WHEREAS, these business license taxes are imposed to raise revenue and not for regulation;
WHEREAS, the ordinance attached hereto as Exhibit “A” and incorporated herein by reference would impose a business license tax on persons engaged in commercial cannabis activity in the City;
WHEREAS, pursuant to Section 2.6 of Article 2 of the City Charter and Section 9222 of the California Elections Code, the City Council may submit the Ordinance directly to the voters; WHEREAS, pursuant to Section 2.3 of Article 2 of the City Charter, the City Council adopted this resolution at a properly noticed meeting on June 21, 2022 to call a general municipal election for November 8, 2022, at which voters will consider adopting the Ordinance to impose a general tax on commercial cannabis activity in the city as well as other offices and questions that may properly come before voters;
WHEREAS, the City of Monterey determined that calling the election is not a project as defined by the California Environmental Quality Act (CEQA) (CCR, Title 14, Chapter 3 (CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project.
Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent projects resulting from this action will be assessed for CEQA applicability; and WHEREAS, the City of Monterey determined that the proposed commercial cannabis business license tax is exempt from CEQA because it can be seen with certainty that there is no possibility that its enactment would have a significant effect on the environment (Pub.
Resources Code 21065, CEQA Guidelines 15378(b)(4), 15061(b)(3) and because the Ordinance involves the approval of government revenues to fund existing services (Pub.
Resources Code 21080, subd. (b)(8); CEQA Guidelines 15273(a)(4). It does not make any commercial activity lawful nor commit the City to fund any particular activity.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Monterey that:
1. The above recitals are true and correct and are hereby incorporated and adopted as findings of the City Council as if fully set forth herein.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 5, Packet Page 313 2 2. The City Council hereby calls a general municipal election on November 8, 2022 and submits the attached Ordinance to the qualified voters of the city to impose a general tax on commercial cannabis activity in the City.
3. The type, rate, and method of collection of the tax are set forth in the Ordinance, the full text of which shall be printed and made available to voters pursuant to Sections 9119 and 9223 of the California Elections Code.
4. The ballot label for the proposed Measure shall be submitted for a “Yes” or “No” vote as follows:
Measure ____.
YES
Cannabis Business License Tax. Shall the measure to
impose an annual cannabis (marijuana) business license
tax of 4% of gross receipts from retail businesses, 1% of gross receipts from testing laboratories, and 6% of gross receipts from other cannabis businesses, with an additional tax on highly potent products, generating about $604,000 to $1.3 million a year, with all funds staying local and subject to audit, and effective until repealed by voters, be adopted?
NO
5. The City Council requests that the Board of Supervisors of Monterey County (the “County”) consolidate the Election with the statewide general election to be held on that date.
6. The City Clerk is authorized and directed to file a certified copy of this Resolution with the Board of Supervisors and Chief Election Official of the County.
7. The City Attorney is authorized and directed to prepare an impartial analysis of the measure as required by section 9280 of the California Elections Code.
8. The Mayor is authorized to select two members of the City Council to prepare a written argument, not to exceed 300 words, in favor of the Measure on behalf of the City Council, as specified in section 9282 of the California Elections Code. If an argument is filed against the Measure, the Mayor is also authorized to select two members of the City Council to prepare a written rebuttal.
9. Arguments against the Measure may not exceed 300 words and must be submitted to the City’s elections official in compliance with 9282 and 9283 of the California Elections Code by the deadline the Elections Official establishes as authorized by law.
10. Rebuttal arguments are hereby authorized and may not exceed 250 words and must be submitted to the city’s elections official as specified in section 9285 of the California Elections Code. This paragraph 10 applies only to the November 8, 2022 general municipal election and shall have no effect thereafter.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 6, Packet Page 314 3 11. Pursuant to Charter section 2.3, the following elective offices shall be submitted to qualified voters of the city at the General Municipal Election to be held on Tuesday, November 8, 2022:
a. One (1) Mayor for a two (2) year term, representing the City of Monterey at large; b. One (1) Council Member for a four (4) year term, representing District 1; and c. One (1) Council Member for a four (4) year term, representing District 2.
12. Notice of the Election is hereby given and the City Clerk shall give such further notice of the Election as required by law.
13. The City acknowledges that the consolidated election will be held and conducted in the manner prescribed by Elections Code section 10418.
14. The City Clerk is authorized and directed to take all other steps necessary to conduct the election.
15. The City Manager is authorized and directed to appropriate the funds necessary to fund the Election and to execute an agreement with Monterey County to conduct the election.
The City Council of Monterey duly adopted this Resolution at a meeting held on June 21, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
_________________________________ ________________
Clyde Roberson, City Mayor Date
ATTEST:
__________________________________ ________________
Clementine Bonner Klein, City Clerk Date
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 7, Packet Page 315 4 ORDINANCE NO. ____
AN ORDINANCE OF THE PEOPLE OF THE CITY OF MONTEREY
ADOPTING ARTICLE 6 OF CHAPTER 19 OF THE MONTEREY CITY
CODE IMPOSING A CANNABIS BUSINESS LICENSE TAX
Be it ordained by the People the City of Monterey as follows:
SECTION 1. CODE AMENDMENT. Article 6 of Chapter 19 of the Monterey City Code is hereby adopted to read as follows:
CANNABIS BUSINESS LICENSE TAX
19-121 - Title.
This article shall be referenced as the “City of Monterey Cannabis Business License Tax.” 19-122 - Purpose.
This ordinance is adopted to achieve the following purposes, among others, and shall be interpreted to accomplish them:
A. To impose an excise tax on the privilege of transporting, dispensing, manufacturing, producing, processing, preparing, storing, testing, providing, donating, selling, or distributing cannabis or cannabis products by commercial cannabis businesses in the City, pursuant to the state Medicinal and Adult Use Cannabis Regulation and Safety Act, California Business and Professions Code section 26000, Proposition 64, approved by the voters in November 2016 and as amended to date (“MAUCRSA”), which legalized and regulates adult use of cannabis in California, and other applicable law as it now exists or may hereafter be adopted; B. To impose a general tax that generates revenues which may be used for any lawful purpose of the city in the discretion of the City Council;
C. To specify the type of tax and rate of tax to be levied and the method of its collection; and D. To comply with all requirements for imposition of a general tax.
This article is enacted solely to raise revenue, not for regulation. It shall apply to all persons engaged in cannabis business in the city. The tax imposed by this article is a general tax under articles XIII A and XIII C of the California Constitution.
Exhibit A
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 8, Packet Page 316 5 19-123 - Definitions.
For the purposes of this article, the following words shall have the meanings ascribed to them by this section unless the context makes apparent another meaning was intended.
A. “Cannabis” or “marijuana” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, or any other strain or varietal of the genus Cannabis that may exist or hereafter be discovered or developed that has psychoactive or medicinal properties, whether growing or not, including the seeds of such plants. “Cannabis” also means cannabis as defined by Business and Professions Code section 26001, subdivision (f), the Health and Safety Code section 11018, and by other state law.
B. “Cannabis accessory” is any device intended to aid in the use of cannabis or cannabis products which does not itself consist in all or part of cannabis or cannabis products and includes, without limitation, “cannabis accessories” as defined in Health and Safety Code section 11018.2 and by other state law.
C. “Cannabis business” means the activity of any natural or legal person, business, or collective in the City relating to cannabis, including but not limited to transportation, distribution, manufacture, compounding, conversion, processing, preparation, testing, storage, packaging, delivery and sales (including both wholesale and retail sales) of cannabis, cannabis products, or cannabis accessories, whether or not carried on for gain or profit, whether for medical or adult use, and whether or not such business is licensed by the State. A cannabis business does not include any business the only relationship of which to cannabis or cannabis products is the production or sale of cannabis accessories. A cannabis business does not include commercial cannabis cultivation.
D. “Cannabis product” means any product containing cannabis or its derivatives, including, but not limited to, flowers, buds, oils, tinctures, concentrates, extractions, edibles, and products described in Section 11018.1 of the Health and Safety Code.
E. “Collector” means the City Manager or their designee charged to administer this article.
F. “Commercial cannabis cultivation” means cultivation conducted by, for, or as part of a cannabis business. Commercial cannabis cultivation does not include personal medical cannabis cultivation, or cultivation for personal adult use as authorized by the MAUCRSA, including Health & Safety Code section 11362.1 et seq., for which the cultivator receives no compensation whatsoever.
G. “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
H. “Delivery” means the transfer for any form of compensation of cannabis or cannabis products to a customer or caregiver at a location that is not a dispensary.
I. “Dispensary” means a fixed place at which cannabis, cannabis products, or accessories for the use of cannabis or cannabis products are offered, either individually or in any combination, for retail sale, including, without limitation, a dispensary that engages in delivery.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 9, Packet Page 317 6 J. “Distributor’’ means a person engaged in procuring cannabis and/or cannabis products for sale to a dispensary, to a business engaged in delivery, or at another point of retail sale. “Distribution” means engaging in that conduct and a “distribution facility” is any real estate, whether or not improved, used in such conduct.
K. “Gross receipts,” except as otherwise specifically provided in this code or by regulation authorized by this code, has the meaning stated in Section 19-1 of this code.
L. “High potency” cannabis or cannabis product means cannabis flower containing more than 17% tetrahydrocannabinol (THC), or a cannabis product containing more than 50% THC, excluding edibles containing 10 mg or less of THC per dose.
M. “Manufacturer” means a person who engages in the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or by means of chemical synthesis, or by a combination of extraction and chemical synthesis.
N. “Sweetened cannabis beverage” is a liquid cannabis product containing natural or artificial sweeteners sold in units intended for consumption exceeding one fluid ounce. 19-124 - Cannabis business tax.
A. Beginning January 1, 2023, a cannabis business tax is imposed upon each person who is engaged in business as a cannabis business.
B. The initial rate of the cannabis business tax shall be as follows:
1. For every person who operates a testing laboratory: one percent (1%) of gross receipts.
2. For every person who operates a dispensary or delivery business: four percent (4%) of gross receipts.
3. For every person who engages in a cannabis manufacturing, processing, distribution, or any other cannabis business not described in subdivisions (B) (1) or (2) above: two percent (2%) of gross receipts.
C. The City Council may, by resolution or ordinance, adjust the rate of the cannabis business tax up to the following maxima:
1. For every person who engages in the operation of a testing laboratory, the maximum tax rate shall not exceed two percent (2%) of gross receipts.
2. For every person who engages in the retail sales of cannabis as a dispensary or delivery business, the maximum tax rate shall not exceed eight percent (8%) of gross receipts.
3. For every person who engages in a cannabis manufacturing, processing, distribution, or any other type of cannabis business not described in Section (C) (1) or (2), the maximum tax rate shall not exceed six percent (6%) of gross receipts.
D. In addition, there is hereby imposed on every cannabis business in the City:
1. An additional tax of up to one percent (1%) of the gross receipts from high potency cannabis and each high potency cannabis product cultivated, manufactured, or sold by a taxpayer, multiplied by the percent of tetrahydrocannabinol (THC) content of the product above 17% for cannabis flower and 50% for cannabis products; and,
2. An additional tax of 20% of gross receipts from sweetened cannabis beverages.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 10, Packet Page 318 7 E. The City Council may, by resolution, in its discretion, implement a tax rate lower than the maximum rates established in subsections (B) through (D) of this section for all persons engaged in cannabis business, or establish differing tax rates for different categories of cannabis business.
The City Council may, by resolution, also decrease or increase such tax rates provided that the tax rate is not above the maximum tax rates established in subsections (B) through (D) of this section.
19-125 - Registration of cannabis business.
A. Each person engaging in a cannabis business, whether an existing, newly established or acquired business, shall register with the City Manager’s office by the later of:
1. 30 days after commencing operation, or
2. January 1, 2023,
and shall annually renew such registration on or before the anniversary of the initial registration for that business.
B. Registrants shall furnish to the City Manager a statement sworn under penalty of perjury, upon a form provided by the City Manager, setting forth:
1. Every name under which the business engages in commercial cannabis activity in the city;
2. The names and addresses of every person who is an owner, principal, or manager of the business;
3. The nature or kind of all business activity to be conducted;
4. The place or places, whether or not in the city, where such business is to be conducted; and
5. Any further information which the City Manager may require to administer this article.
C. Registrants shall pay an annual registration fee in an amount established from time to time by resolution of the city council to recover the city’s costs to implement the registration requirement of this section, and the other provisions of this article other than the duty to pay tax when due. As a regulatory fee, such fee shall be limited to the city’s reasonable costs for those activities. The City Manager may provide by a regulation adopted pursuant to section 19-132 of this article for waivers of the annual registration fee for one or more years for any class of cannabis businesses if such a waiver will facilitate elimination of the illegal market in cannabis in the City or to facilitate participation in the cannabis market by low-income persons. 19-126 - Payment obligations.
All persons subject to a tax under this article shall pay that tax regardless of any rebate, exemption, incentive, or other reduction elsewhere in this code, except as required by state or federal law. Failure to pay such a tax shall be subject to penalties, fines, and interest charges established under this article and the City may use any or all other code enforcement remedies Council Special Meeting, 6/29/2022, Item No. 8., Item Page 11, Packet Page 319 8 available at law or in equity to enforce this article. No provision of this code shall be interpreted to reduce a tax rate established under this article or otherwise reduce the taxes paid hereunder unless the provision specifically expresses that reduction. 19-127 - Tax payment does not authorize activity.
The payment of a tax imposed under this article shall not be construed to authorize the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this article authorizes or implies the lawfulness of any activity connected with the distribution or possession of cannabis unless otherwise authorized and allowed in strict and full conformance with this code. Nothing in this article shall be applied or construed as authorizing the sale of cannabis.
19-128 - Cannabis business license tax is not a sales tax.
The tax imposed by this article is an excise tax upon the privilege of doing business within the city. It is not a sales or use tax. Nevertheless, at the option of a commercial cannabis business, the tax may be separately identified on invoices, receipts, and other evidences of transactions. 19-129 - Returns and remittances.
The tax imposed by this article shall be due and payable as follows:
A. Each person owing tax under this article shall provide a tax return to the City Manager on or before the last business day of each month stating the tax owed for the preceding month and the basis of its calculation. The taxpayer shall remit the tax owed to the City Manager when the return is due.
B. The City Manager may establish a form for tax returns submitted under this article and, if so, use of that form shall be mandatory.
C. Tax returns and payments for all outstanding taxes, fees, penalties, and interest owed the city are immediately due upon cessation of business for any reason.
D. Whenever a payment, statement, report, request, or other communication is received by the City Manager after the time prescribed by this section for its receipt, but is in an envelope postmarked by that time, the City Manager shall regard such payment, statement, report, request, or other communication as timely. If the due date falls on a day when city offices are not open for business, the due date shall be the last business day before that due date.
E. Unless otherwise specifically provided by this article, the taxes imposed by this article shall be delinquent if not paid by the due date specified in subsection (A) of this section.
F. The City Manager need not send a delinquency or other notice or bill to any person subject to a tax or fee imposed by this article and failure to send such notice or bill shall not affect the validity of any tax, fee, interest, or penalty due under this article.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 12, Packet Page 320 9 19-130 - Audits.
The City Manager shall arrange for an annual independent audit of the receipts and expenditures of the taxes imposed by this article. The City Manager shall share that audit report with the city council and make it available for public inspection. 19-131 - Refunds.
A. No refund shall be made of any tax collected pursuant to this article, except as provided in this section.
B. No refund of any tax collected pursuant to this article shall be made because of the discontinuation, dissolution, or other termination of a cannabis business.
C. Any person entitled to a refund of sums paid under this article may elect to have such refund applied as a credit against future obligations under this article.
D. Whenever any tax, fee, penalty, or interest under this article has been overpaid, paid more than once, or has been erroneously or illegally collected or received by the city, such amount shall be refunded to the person who paid the tax upon a written claim for refund filed with the City Manager within one year of payment of the sum to be refunded.
E. The City Manager may examine and audit all the books and business records of the claimant to determine eligibility to the claimed refund. No claim for refund shall be allowed if the claimant refuses to allow such examination of the claimant’s books and business records.
F. A sum erroneously paid under this article due to an error of the city shall be refunded to the claimant in full upon a timely claim. If an error is attributable to the claimant, the city may retain an amount established by resolution of the city council to recover the city’s cost to process the claim and refund the balance.
19-132 - Tax administration.
A. It shall be the duty of the City Manager to collect the taxes, penalties, fees, and perform the duties required by this article.
B. The City Manager may from time to time promulgate such administrative rules and procedures consistent with the purpose, intent, and terms of this article as they deem necessary to implement or clarify it or to aid in its enforcement. The City Manager shall give notice of those regulations as required for ordinances of the city council and such regulations shall take effect upon such notice unless otherwise provided by a particular regulation.
C. The City Manager may take such administrative actions as needed to administer this article, including but not limited to:
1. Provide information to any taxpayer about this article;
2. Receive and record all revenues remitted to the city under this article;
3. Maintain records of taxpayer reports and taxes collected under this article; Council Special Meeting, 6/29/2022, Item No. 8., Item Page 13, Packet Page 321 10 4. Assess penalties, fines, and interest charges to taxpayers under this article;
5. Determine amounts owed and enforce collection under this article; and
6. Take such other reasonable steps as he or she deems appropriate to enforce this article.
D. The City Council may establish penalties, fines and interest charges related to this article by ordinance or resolution.
19-133 - Appeals.
Any person aggrieved by any decision of the city under this article may appeal to the City Council pursuant to the procedures described in Article 27 of Chapter 38 of this code. The City Council may appoint a hearing officer to hear an appeal and, as the Council may direct, either recommend a decision for the City Council’s review or make a final decision for the city. Any such decision on appeal by the City Council or a hearing officer shall be subject to judicial review pursuant to Section 1094.5 of the California Code of Civil Procedure. 19-134 - Consistency with business license tax.
The City Council intends this article to be enforced consistently with the balance of Chapter 19 of this code and any rule or regulation promulgated under that chapter except as provided to the contrary in this article or a regulation adopted pursuant to this article. 19-135 - Constitutionality and legality.
A. This article is intended to be applied consistently with the United States and California Constitutions, state law, and the city charter. Its tax shall not be applied to cause an undue burden upon interstate commerce, a violation of the equal protection and due process clauses of the Constitutions of the United States or the State of California, to constitute a special tax, or to violate any other applicable law.
B. Under California Constitution, article XIII B, the appropriation limit for the city is hereby increased to the maximum extent over the maximum period of time allowed under law by the amount of the revenues generated by the tax.
SECTION 2. AMENDMENT. To the extent allowed under Article XIII C of the California Constitution, the City Council may amend this Ordinance without a vote of the People, except that voter approval shall be required for any amendment that would increase, within the meaning of Government Code section 53750, subdivision (h), the tax rate beyond the maximum rates this Ordinance authorizes.
SECTION 3. This Ordinance is exempt from the California Environmental Quality Act (CEQA), Public Resources Code Section 21000 et seq., because it can be seen with certainty that there is no possibility that its enactment would have a significant effect on the environment (Pub. Resources Code 21065, CEQA Guidelines 15378(b)(4), 15061(b)(3) and because the Ordinance involves the approval of government revenues to fund existing services (Pub.
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 14, Packet Page 322 11 Resources Code 21080, subd. (b)(8); CEQA Guidelines 15273(a)(4). It does not make any commercial activity lawful nor commit the City to fund any particular activity.
SECTION 4. SEVERABILITY. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is held to be invalid or unconstitutional by the final decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Monterey declare that they would have adopted this Ordinance, and each section, subsection, sentence, clause, phrase, or portion of it, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions might be declared invalid or unconstitutional.
SECTION 5. EFFECTIVE DATE. Under Elections Code sections 9217 and 9122 this ordinance shall take effect 10 days after the City Council certifies its approval by a majority vote (50% + 1) of the electorate voting at the November 8, 2022 general municipal election.
SECTION 6. CERTIFICATION. Upon approval by the voters, the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause it to be published according to law.
It is hereby certified that this Ordinance was duly adopted by the voters at the November 8, 2022 Election and took effect 10 days following adoption of a resolution declaring the results of the election at a regular meeting of the City Council held on [date] by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
________________________________ ________________
Clementine Bonner Klein, City Clerk Date
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 15, Packet Page 323 City of Monterey
City Clerk
[email protected]
Clementine Bonner Klein
580 Pacific St., Rm. 6 Monterey, CA 93940 831-646-3935
www.monterey.org
Clementine Bonner Klein, City Clerk
Linda Tulett, Admin. Asst.
Roberson, Clyde At Large Elected 2022 2 yrs. n/a
Monterey, CA 93940
Smith, Ed Elected 2022 4 yrs. n/a
Monterey, CA 93940
Williamson, Tyller Elected 2022 4 yrs. n/a
Monterey, CA 93940
Albert, Dan At Large** Elected 2024 4 yrs. n/a
Monterey, CA 93940
Haffa, Alan At Large** Elected 2024 4 yrs. n/a
Monterey, CA 93940
**
***
***
** City's first district-based election will be Nov. 8, 2022 (for Districts 1 & 2). City of Monterey Ord. No. 3646 C.S. *** City of Monterey Resolution No. 20-093 C.S.
n/a
At Large
(Resides Dist. 1)**
At Large
(Resides Dist. 2)**
ATTACHMENT 2
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 16, Packet Page 324 ATTACHMENT 2
Council Special Meeting, 6/29/2022, Item No. 8., Item Page 17, Packet Page 325