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INSURANCE NOT REQUIRED <br />WORK &JAy pROCEED <br />^A-rr CLERK OF COUNCIL <br />O caA(I money JJ <br />SALES TAX SHARING AGREEMENT <br />A-2020-045 <br />This SALES TAX SHARING AGREEMENT ("Agreement") is made and entered into as <br />of April 1. 2020, by and between the CITY OF SANTA ANA, a charter city and municipal <br />corporation organized and existing under the Constitution and laws of the State of California <br />("City"), and TACenergy, a division of the Truman Arnold Companies, a Texas corporation <br />w ("TAC"). <br />0 <br />RECITALS <br />0 <br />A. On August 5, 2013, the City approved the execution of a sales tax sharing <br />agreement with IPC (USA), Inc. ("IPC"), an independent wholesale distributor of gasoline, diesel, <br />jet fuel, and other refined petroleum products throughout the United States. The agreement <br />provided for a fifty percent (50%) sharing of local sales tax generation, increasing to seventy <br />percent (70%) when more than $1.4 million of sales tax is generated in a single year. The term of <br />this agreement was to expire in January 2028. <br />B. On November 1, 2019, IPC was acquired by TAC, one of the largest national <br />wholesale fuel suppliers in the county (such TAC activities in California are hereinafter referred <br />to as the "Petroleum Business"), with annual sales exceeding 2.7 billion gallons and more than $5 <br />billion in revenue. <br />C. Since the acquisition, TAC has been evaluating all of its newly acquired assets and <br />have made the determination that they would like to remain in the City due to its local employment <br />base and centralized proximity to an airport and major freeways. <br />D. In consideration for TAC's performance under this Agreement, City has agreed to <br />pay to TAC certain payments, measured by a portion of the Sales Tax generated by the conduct of <br />TAC's "Required Operations" in the City, provided that TAC causes Required Operations to be <br />conducted in the City during the term of this Agreement and complies with the other terms and <br />conditions set forth in this Agreement, as more particularly set forth herein. City and TAC have <br />agreed that the amount to be paid by City to TAC hereunder is a fair exchange for the consideration <br />to be furnished by TAC to City. <br />D. By its approval of this Agreement, the City Council of City has found and <br />determined that it is of benefit to the City and its residents for the Required Operations to be <br />conducted within the City, and that the imposition of certain terms and conditions relating to such <br />uses and the City's payment of the City Consideration described herein constitute valid public <br />purposes under the City's Charter and Article XVI, section 6 of the California Constitution as <br />necessary for the economic enhancement of the City and to contribute to the City's general fund <br />that supports services for the health, safety and welfare of the residents of the City. The City <br />Council has further found and determined that TAC's conduct of its "Required Operations" as <br />contemplated in this Agreement will assist in the generation of additional sales and use tax <br />revenues to City as well as assist in the creation and maintenance of additional jobs and economic <br />opportunities for the residents of the City. <br />1 <br />