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HomeMy WebLinkAbout2019-003 - Authorizing the City Manager to Execute AgreementsRESOLUTION NO. 2019-003 A RESOLUTION OF THE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA 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 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The City Council of the City of Santa Ana conclusively finds, determines and declares as follows: WHEREAS, on December 11, 2018 the City Council approved Ordinance No. NS -2952 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 both agreements. NOW, THEREFORE, it is hereby ORDERED, RESOLVED and DETERMINED, as follows: Section 2. The "Preparatory Agreement' attached hereto as Exhibit A and the "Administrative Agreement" attached hereto as Exhibit B are both hereby approved and the City Council hereby authorizes the City Manager, or his designee to execute each agreement. Section 3. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. Resolution No. 2019-003 Page 1 of 11 ADOPTED this 15th day of January, 2019. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Lisa E. Storck Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: Iglesias Penaloza, Pulido, Solorio, Villegas (5) None (0) None (0) NOT PRESENT: Councilmembers: Reyna, Sarmiento (2) CERTIFICATION OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2019-003 to be the original resolution adopted by the City Council of the City of Santa Ana on January 15, 2019. Date: Resolution No. 2019-003 Page 2 of 11 D. Huizar/'MS—ria Clerk of the Council City of Santa Ana AGREEMENT FOR PREPARATIONTO ADMINISTER AND OPERATE CITY'S' RANSAIC' ONS AND USE TAX C JUNNANCE In order to prepare to administer,- transactions and use tax ordinance adopted in accordance with the provision of Part l,6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Santa Ana, hereinafter called 0%! and the CALIFORNIA DEPAWIMENT OF TAX AND PEE ADMINISTRATION, hereinafter called itepartment, do agree as follows: 1. The Department agrees to easter Into work to prepare to administer and operate a transactions and use tax in conformity with mart 1.6 of Envision 2 of the Revenue and. Taxation Cotte which has been approved by a majority of the electors of the City arid, whose Ordinance has been adopted by the City, 2, City agrees to pay to the Department at the times and in Elie amounts hereinafter specified all of the Departments costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs or developing procedures, programming for data processing, developing and adopthig appropriate regulations, designing and printing forms, developing instructions for tits Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to admitiister a transactions and use tax ordinance. These costs shalt include both direct and indirect costs as specified in Section 11256 of the Government Cock 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 he presented in summary forma. Detailed records of preparatory costs will he 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 DirectoEss decision shall be fatal. 5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable lime 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 mouth when the billing is received. 6. The amount to be paid by City far the Department's preparatory costs shall not exceed one hundred seventy -live thousand dollars ($175,000) (Rovenne and Taxation Code Section 7272.) Exhibit A Resolution No. 2019-003 Page 3 of 11 7, Communications and notices may be seat by first class united. States mail. Communications and notices to be sent to the Department shall be addressed to: California Department of Tax and Fee Administration P.O. Box 942679 MIC: 27 Sacramento, California 94279.0027 Attention: Supervisor Local Revenue Branch Communications and notices to be sent to City shall be addressed to: `i'rearstary & Customer Senfices Manager City of Santa Ana M-15 P.O, Bax 1964 Santa Arra, CA 92702.1964 6. The date of this agreernent is €ire date on which it is approved by the Department of Ocneral 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 Inas received all payments due from City under the terms of this agreement. C°frY Or SANTA ANA CALWORNIA STATE DEPARTMENT OF TAX AND FEE ADMIMI STRA`rIONZ U1 (Signature) haul Gocsetrz E (Typed Name) fait" Marr arc _ . r (Title) Resolution No. 2019-003 Page 4 of 11 El Administrator AGREEMENT FOR STATE ADMINISTRATION OF CITY TRANSACTIONS AND USE TAXES The City Council of the City of Santa Ana has adapted, and the voters of the City of Santa Ana. (hereafter caned "City' or "District") have 1appro%,W by the required majority vote, the City of Santa )J Ana Transactions and Use Tax Ordinance (hereafter called `"Ordinance"), a copy of which is attachc(' hereto, To carry out the provisions of fart 1.6 of Division 2 of the Revenue and Taxation Code acid the Ordinance, the Califoraia State Department. of Tax and Pec AdMiatistration, (heaoinafter called the "Departinent") and the City dna agree as follows: ARTICLE I 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 meaty the transactions and use taxes, penalties, and interest imposed under an ordinance specifically authorized by Revenue and Taxation code Section 7270, and in compliance with part 1.6, Division 2 of the Revenue and Taxation Code. 1 "City Ordinance" shell me= the City's Transactions anis Use Tax Ordinance referred to above and attached hereto, Ordinance No, NS -2952, as amended from time to time, or as deemed to be amended from tune to throe pursuant to Revenate and Taxation. Code Section 726.21. r. -01-1 OF CITY TSS A. Administration. The Department and City agree that the Department shall perform exchisively all functions Incident to the administration and operation of the City Ordinance. Exhibit B Resolution No. 2019-003 Page 5 of 11 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 Pert 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance, City ag=rees 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 Agmemew, and transmitting to City the amount to which City is entitled. C. Transmittal of Money. L For the period during which the tax is in effect, and except as othcarwise 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 a flon that% 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 lass than once in each calondar quarter, 1. Transmittals may be made by trail 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, i), lutes. The Department shall prescribe and adapt 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 thcrcundex. D. Preference. Unless the payor instructs otherwise, and except as other%+,�ise 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, taut 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. Resolution No. 2019-003 Page 6 of 11 V. Security. The Department agrees that any security which it hereafter requires to be fi rnished 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 gf City for district taxes owing to it as its interest appearsi The Department shall not be required to change the terms of any security now hold by it, and City shall not participate in any security now held by the Department. f G. Records of the Department. Wiser requested by resolution of the legislative body of the City under section 7056 of the Revenue and. Taxation Code, the Department agrees to permit authori=d personnel of tine City to exanmhic the records of the Department, including the name., address, and account number of Cecil seller holding, a seller's permit with a registered business location in the City, pertaining to the aseertainment of transactions and use taxes collected for tite City. fnlbranation obtained by the City from examiriadon 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 awes that the Department shall not be required to give effect to all aausexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes, earlier thaws the first day of the calendar quarter which commences not less than two months after notice to the Department, The notice shell 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 .arca annexed and two neaps of the City showing the area annexed and the location address of tite property nearest to the extended City boundary on each side of every street or road crossing the boundary. ARTICLE III ALLOCATION OF TAX A. Altocation. In the administration of the Depaartmcnt's contracts with all districts brat impose transactions and use taxes imposed under ordinances, which comply with fart L6 of Division 2 of the Revenue and Taxation Code. 1, Any payment not identified as being in payment of liability awing to a designated district or districts may be apportioned among, tiara districts as their interest appear„ or, in the discretion. Resolution No. 2019-003 Page 7 of 11 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 mme ratio as the taxlaayces solf-declared district tars for the period for which the determination, billing, rofund or credit applies.. B. Vehicles, Vessels, and Aircraft, For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, tate address of the registered owner appearing on the application for registration or on the certificate of ownershilr may be used by the Department in determining the place sof use. COMPENSATION The City aglreos to pity 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 [he Department for the City.. ARTICU V MISCELLANEOUS PROVISIONS A. Communications. Communications and notices may be sent by first class United States mail to the addrews listed below, or to such other' addresses as the parties may from Time to time designate, A notification is complete when deposited fat the serail. Resolution No. 2019-003 Page 8 of 11 Communications and notices to be seat to the Department shaall be addressed to. California State Dep arttnent of Tax and re Administration P,Ci. Box 942579 Sacramento, California 94279-0027 Attention, Administrator Local Revenue Branch Communications and notices to be sent to the City shall be addressed to: Treasury & Customer' Services Manager City of Santa Ana M-15 P.O, Box 1964 Santa Ana, CA 92702-1964 Unless otherwise directed, transmittals of Payment of District transactions and use taxes ,will he sera to the address above.. B. Term. `rile date of this Agreement is than. date on which it is approved: by the Department of General Services, The Agreement shall take affect on Aprsl2, _,011, Th-Agzeeenent shall continue until I ecennber 31 -next following the expiration date'or the City Ordinance, and shall thereafter be renewed automatically from year to year until the Departm nt completes all work necessary to the administration of the City On inancc and has received and disbursed all payments due under that Ordinance, C. Notice of Repeal of Ordinance. City shall Sive the Department written notice of the repeal of the City Ordinance not less than 1111 days prior to the operative date of the repeal. Resolution No. 2019-003 Page 9 of 11 ARTICLE V1 ADMINISTRATION Or TAXES IF THE ORDINANCE IS CHALLC?NGED AS BEING INVALID A. Impoundment of funds, 1. When a legal action is bcgutn challenging the validity of the imposition of the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitte=d to it under Article 11, C., until a court of competent jurisdiction renders a final and turn -appealable judgrnmt that the tax is valid. 2. If the tact is determined to be unconstitutional or othemise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated haterest, within ten days of the judgment of the trial court in the litigation awarding costs and fees becoming final and non -appealable. R. Costs of administration. Should n final judgment be entered in any court of the State of California, holding that Cityrs Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the tcruas of this Agreement, [tie parties mutually agree that: I. 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 cast of admitistcring the City Ordinance in the amounts set forth in Article IV of flits 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 the rebates tar refunds, its costs of actually making these refunds, designing and printing forms, and Resolution No. 2019-003 Page 10 of 11 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 casts shall include Departmout's direct and indirect costs as specified by Section 11256 of the Government Code. S, 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 oasts may be presented in stimmury form. Detailed records will be retained for audit and verification by City, 6. Any dispute as to the amount of casts incurred by Department in refunding trees 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 billets by Delratrttnent on or before the 25th day of the second month following the month in wlrieh 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 account of such costs on or before the Inst day of the succeeding month acid 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 S A TA ANA (Signature) Raul trodeniz II (Typed Nance) City; Man or (Tifle) CALIFORNIA STATE DEPARTMENT OF TAX ANIS FEE ADMINISTRATION M Administrator Resolution No. 2019-003 Page 11 of 11