HomeMy WebLinkAboutNS-2972 - Amending and Adding Certain Sections to Articles XIII, XII, and VII of Chapter 21 of Santa Ana Municipal Code Pertaining to Ownership Transfers, ...LS 9.3.19
ORDINANCE NO. NS-2972
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AMENDING AND ADDING CERTAIN
SECTIONS TO ARTICLES XIII, XII, AND VII OF CHAPTER
21 OF THE SANTA ANA MUNICIPAL CODE PERTAINING
TO OWNERSHIP TRANSFERS, CLOSE OUT AUDIT
PROCEDURES (SECTIONS 21-131.1 AND 21-141);
VERTICAL INTEGRATION (SECTIONS 21-131.2 AND 21-
142); REDUCTION IN THE GROSS RECEIPTS TAX RATE
FOR CANNABIS TESTING FACILITIES, DEDUCTIBILITY
OF INTERPARTY SALES AND TRANSFERS OF GOODS,
CLARIFICATION OF SQUARE FOOTAGE TAX
MEASUREMENT REQUIREMENTS (SECTION 21-133);
AND REDUCTION OF SECURITY DEPOSIT AMOUNTS
AND ESTABLISHMENT OF RELATED PROCEDURAL
REQUIREMENTS (SECTIONS 21-80, 21-80.1, 21-86 AND
21-136)
THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana's Medical
Marijuana Regulatory Program ordinance ("Measure BB") which was codified
in Chapters 18 and 21 of the Santa Ana Municipal Code. Such regulations
govern medicinal marijuana and the retail sale thereof.
B. In 2015, the Governor signed into law Senate Bill 643, Assembly Bill 266, and
Assembly Bill 243, collectively referred to as the Medical Marijuana Regulation
and Safety Act further amended in 2016 as the Medical Cannabis Regulation
and Safety Act which established regulations and a state licensing system for
medical cannabis cultivation, manufacturing, delivery, and dispensing.
C. In November 2016, the voters of the State of California approved Proposition
64, the California Marijuana Legalization Initiative, also known as the Adult Use
of Marijuana Act.
D. In 2017, the Governor signed into law Senate Bill 94 also known as Medicinal
and Adult -Use Cannabis Regulation and Safety Act.
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E. On November 9, 2017, the City Council created Chapter 40 of the Santa Ana
Municipal Code, allowing adult -use commercial cannabis retail businesses in
the city, and amended certain sections of Chapters 18 and 21 of the Santa Ana
Municipal Code to ensure consistency with State law and Chapter 40.
F. Since November 2014, the City of Santa Ana has permitted the retail sale of
cannabis for medicinal purposes and since January 2018 for adult -use
purposes. On March 20, 2018, the City Council adopted Ordinance NS-2941
and NS-2942, allowing and regulating commercial cannabis testing
laboratories.
G. On April 17, 2018, the City Council adopted Ordinance NS-2944 allowing and
regulating commercial cannabis cultivation, distribution, and manufacturing
activities.
H. On November 6, 2018, the voters of the City of Santa Ana approved Measure
Y (Ordinance NS-2962), establishing a tax on commercial cannabis business
activities except medicinal cannabis retail sales, which continue to be subject
to taxes under Measure BB.
I. The State of California continues to update its regulations on commercial
cannabis business licensing, resulting in the need for local jurisdictions to
update and amend local commercial cannabis ordinances from time to time.
J. The City Council of the City of Santa Ana intends that nothing in this Article
shall be deemed to conflict with federal law as contained in the Controlled
Substances Act, nor to otherwise permit any activity that is prohibited under
that Act or other applicable law.
K. The City of Santa Ana has a compelling interest in ensuring that cannabis is
not cultivated, manufactured or distributed in an illicit manner, in protecting the
public health, safety and welfare of its residents and businesses, in preserving
the peace and quiet of the neighborhoods in which these uses may operate,
and in providing access of cannabis to residents.
L. The City Council held a duly noticed public hearing on August 20, 2019 in
connection with consideration and adoption of this ordinance.
Section 2. This ordinance is adopted pursuant to the authority granted by the
California Constitution and State law, including but not limited to: Article IX, Section 7 of
the California Constitution, the Compassionate Use Act of 1996 (California Health and
Safety Code Section 11362.5), the Medical Marijuana Program (California Health and
Safety Code Section 11362.7 et seq.), the Medical Marijuana Regulation and Safety Act
(AB 266, AB 243, and SB 643), the Adult Use of Marijuana Act (Proposition 64), and the
Medical and Adult Use Cannabis Regulation and Safety Act (SB 94).
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Section 3. Pursuant to the California Environmental Quality Act ("CEQA") and
the State CEQA Guidelines, the adoption of this ordinance is exempt from CEQA review
pursuant to California Code of Regulations section 15061(b)(3), which is applicable if it
can be seen with certainty that there is no possibility that the project may have a
significant effect on the environment. As a result, a Notice of Exemption will be filed
upon the adoption of this ordinance.
Section 4. All provisions of the Santa Ana Municipal Code which are repeated
herein are repeated solely in order to comply with the provisions of Section 418 of the
City Charter. Any such restatement of existing provisions of the Code is not intended,
nor shall it be interpreted, as constituting a new action or decision of the City Council,
but rather such provisions are repeated for tracking purposes only in conformance with
the Charter.
Section 5. Section 21-131.1, Article XI I of Chapter 21 of the Santa Ana Municipal
Code is hereby added to read in full as follows:
Sec. 21-131.1. Sale, assignment, transfer, or termination of business; marijuana
collective/cooperative (medicinal cannabis retail business) owner/operator's duty
to notify; remitting and reporting requirements; closeout audit; successor's duty
to notify; successor's and transferor's joint and several liability; certificate of
nonliability.
(a) Owner/Operator's duty to notify.
Termination of business. A medicinal marijuana collective/cooperative
owner/operator (also referred to herein as medicinal cannabis retail business)
who is terminating their business shall notify the collector in writing of such
termination at least ninety (90) days in advance of the date of termination of
business. If the decision to terminate business is made within less than a ninety
(90) day period prior to the date of termination, the owner/operator shall then
immediately notify the collector of said decision and the date of termination of
business.
ii. Sale, assignment, or transfer of business. A medicinal cannabis retail business
owner/operator who is selling, assigning, or otherwise transferring their
business (hereinafter collectively referred to as transferor) shall notify the
collector in writing of such sale, assignment, or transfer at least ninety (90) days
in advance of the date of the sale, assignment, or transfer and shall notify the
collector in writing of the name and address of the purchaser, assignee,
transferee, or other successor in interest (hereinafter collectively referred to as
successor) unless the decision to sell, assign, or otherwise transfer their
business was made within less than a ninety (90) day period prior to the sale,
assignment, or transfer, in which case the transferor shall then immediately
notify the successor of the successor's responsibility for unpaid business
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license taxes, including penalties, interest, charges, fees, or costs (hereinafter
collectively referred to as business license tax liabilities) for the period prior to
the sale, assignment, or transfer as set forth in subsections (d) and (e) below,
and shall further certify in writing to the collector that the successor was notified
of the requirements of this Article regarding their responsibility for unpaid
business license tax liabilities.
(b) Remitting and reporting requirements. Each medicinal cannabis retail business
owner/operator upon the sale, assignment, or other transfer, or termination of
business for any reason shall, on or before the last day of the month following the
sale, assignment, transfer, or termination of business, file a final return to the
collector on City approved forms, of the total gross receipts received, adjustments
to gross receipts, the amount of business license tax collected for the reporting
period, remittances made, if any, and the balance of the business license tax due, if
any, shall be remitted to the collector.
(c) Closeout audit. After filing the final return and remitting the balance due, the
medicinal cannabis retail business owner/operator shall make its records of account
available for a closeout audit by the collector, his or her revenue officers, or duly
authorized employees or agents of the City. The decision to perform a closeout audit
shall be made solely at the discretion of the collector. If, upon closeout audit, or by
means of other information available to them, the collector determines that the
owner/operator selling, assigning, or otherwise transferring, or terminating their
business is found to have satisfied all business license tax liabilities, the collector
shall issue to such business owner/operator a certificate of nonliability.
If, upon closeout audit, or by means of other information available to them, the
collector determines that the owner/operator selling, assigning, or otherwise
transferring, or terminating their business is deficient in either their return or
remittance, or both, the collector shall immediately notify such owner/operator of the
amount of the net deficiency, plus applicable penalties, interest, charges, fees, or
costs. Upon such owner's/operator's remittance of all business license tax liabilities
owing, the collector shall issue a certificate of nonliability.
(d) Successor's duty to notify. If a medicinal cannabis retail business owner/operator
decides to sell, assign, or otherwise transfer their business, their successor shall
notify the collector of the date of the sale, assignment, or other transfer at least ninety
(90) days before the date of the sale, assignment, or transfer. It shall be the duty of
the successor to obtain written verification from the collector's office that the
transferor does not have or is not liable for any outstanding business license taxes
liabilities. After the successor seeks written verification from the collector's office, if
the collector notifies the successor that the transferor has or is liable for any
outstanding amount of business license tax liabilities, the successor shall withhold
an amount equal to such outstanding business license tax liabilities until the
transferor produces a certificate of nonliability stating the nonliability of the transferor
for payment of business license tax liabilities. If the transferor does not present a
certificate of nonliability within ninety (90) days after such sale, assignment, or other
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transfer, the successor shall deposit the withheld amount with the collector pending
settlement of the account of the transferor.
If the decision to sell, assign, or otherwise transfer was made within less than a
ninety (90) day period prior to the date of the sale, assignment, or other transfer, the
successor shall notify the collector of the sale, assignment, or transfer immediately
and shall withhold an amount equal to the sum of the transferor's last three (3)
months' of reported and remitted business license taxes until the transferor produces
a certificate of nonliability stating the nonliability of the transferor for payment of
business license tax liabilities. If the transferor does not present a certificate of
nonliability within ninety (90) days after such sale, assignment, or other transfer, the
successor shall deposit the withheld amount with the collector pending settlement of
the account of the transferor.
(e) Joint and several liability. If the successor fails to withhold the applicable amount
required under subsection (d) they shall become jointly and severally liable along
with the transferor for the payment of the full amount of the transferor's business
license tax liabilities and shall likewise become jointly and severally liable along with
the transferor for future penalties and/or interest charges as may be applicable as
set forth in sections 21-83, 21-84, and 21-85 until all business license tax liabilities
are satisfied.
(f) Certificate of nonliability. Upon application of a medicinal cannabis retail business
operator/owner who is terminating their business, or a transferor, or a successor, for
a certificate of nonliability, the collector, after conducting an audit therefore, as he or
she may deem necessary, shall issue the certificate if the owner's/operator's,
transferor's, or successor's business license tax liabilities have been satisfied. If any
business license tax liabilities remain outstanding, or if additional business license
tax liabilities have accrued subsequent to the date of application, the collector shall
give notice to the operator/owner, transferor, or successor of the applicable amount
which must be fully paid as a condition of issuing their respective certificate of
nonliability. Where a transferor's business license tax liabilities have been partially
or wholly paid by their successor to the collector pursuant to subsection (e) or
partially or wholly satisfied by their successor's action of withholding and depositing
amounts with the collector pursuant to subsection (d), no certificate of nonliability
shall be issued to the transferor without the prior written consent of their successor.
Section 6. Section 21-131.2 of Article XII of Chapter 21 of the Santa Ana
Municipal Code is hereby added to read in full as follows:
Sec. 21-131.2 Vertical and horizontal integration of marijuana
collective/cooperative licensees (medicinal cannabis retail businesses) —Defined.
The terms vertical integration and horizontal integration as used in this Article shall have
the following meanings: Vertical integration shall refer to cannabis businesses operating
at different points in the same supply chain from cultivation to retail sales, as long as they
share at least 80% underlying common ownership, regardless of form of business
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structure, and are engaged in interparty sales and/or transfers of goods. Horizontal
integration shall refer to cannabis businesses operating at the same point in the same
supply chain, as long as they share at least 80% underlying common ownership,
regardless of form of business structure, and are engaged in interparty sales and/or
transfers of goods. For purposes of this Article the term 'cannabis businesses" shall
include marijuana collectives/cooperatives as defined in section 18-611 and commercial
cannabis businesses as defined in section 40-2, but shall not include commercial
cannabis businesses engaged in testing facilities or testing laboratory businesses.
Section 7. Section 21-133 of Article XIII of Chapter 21 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 21-133. Commercial cannabis businesses —Annual business license tax
assessment.
Every person engaged in a 'commercial cannabis business" or `commercial
cannabis activity" shall pay an annual business license tax as outlined below. This Article
shall not apply, except with respect to medical marijuana cooperatives/collectives (also
referred to as medicinal cannabis retail businesses which are vertically and/or horizontally
integrated with commercial cannabis businesses, to medical marijuana
cooperatives/collectives which are governed by Article XI of this Chapter, or to personal
cultivation as defined in section 18-611(n) of this Code.
(a) For each branch establishment or separate property location of a commercial
cannabis business transacted and carried on in the city, and for each separate type
of commercial cannabis business conducted at the same location, the higher of the
two (2) following tax rates shall be due to the City for each monthly reporting period:
(1) Up to ten percent (10%) of each dollar of gross receipts received or
generated for each monthly reporting period.
(2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one -
twelfth (1/12th) of the annual tax rate amount.
(b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this
Chapter.
(c) Notwithstanding the tax rates imposed herein under subsection (a), the City Council
may, in its discretion, at any time by resolution, implement any lower tax rate it
deems appropriate, and may by resolution increase such tax rate from time to time,
not to exceed the maximum rates established by subsection (a).
(d) As of the operative date of this Article, the business license gross receipts tax rates
and square footage tax rates application to specific commercial cannabis business
activities shall be established as follows:
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Commercial Cannabis Business
Gross Receipts
Gross Square
Activity
Tax Rate
Footage Tax Rate
Adult -use Cannabis Retail
8%
$ 25.00
Business (including Delivery)
Cultivation
6%
$ 10.00
Distribution
6%
$ 4.00
Manufacturing
6%
$ 10.00
Testing Facility or Testing
Laboratory (effective December
5%
$ 1.50
21, 2018 through June 30, 2019)
Testing Facility or Testing
Laboratory (effective beginning
1 %
$ 1.50
July 1, 2019)
Commercial cannabis businesses not having a fixed place of business within the city
but conducting regular, non -incidental commercial cannabis business activities
within the city shall be subject to the gross receipts tax rate(s) as set out in the table
above based on the category/categories of commercial cannabis activity conducted.
However, such out-of-town commercial cannabis businesses shall not be subject to
any gross square footage tax rate(s).
(e) As part of the annual gross receipts/square footage tax(es) imposed by this Article,
each commercial cannabis business located within the city shall pay a minimum
basic rate of two thousand dollars ($2,000.00) annually for each branch
establishment or separate property location of the commercial cannabis business
transacted and carried on in the city, and for each separate type of commercial
cannabis business conducted at the same location. Commercial cannabis
businesses having no fixed place of business within the city shall be exempted from
this requirement.
(f) In the event the City should in the future permit additional categories of commercial
cannabis business activity, as may from time to time be licensed by the State of
California, such categories of commercial cannabis activates shall be subject to the
same maximum tax rates as imposed herein. The City may by ordinance of the City
Council initially set the required gross receipts/gross square footage tax rates based
on category of cannabis business activity at lesser rates as may be deemed
appropriate by the City Council.
(g) For purposes of this Article, a commercial cannabis business is not considered to
be a business or person having a "specified exemption" or "specified exclusion" from
business license taxation as set forth in sections 21-48 and 21-49 of this Chapter.
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(h) For purposes of this Article any person claiming an exemption from the gross
receipts tax rate component of the combined gross receipts/square footage tax
imposed under this Article on the basis of a claim of being a qualified "nonprofit
organization" shall have the burden of substantiating their claim to the same extent
and in the same manner as a marijuana collective/cooperative in accordance with
section 21-127(a)(6) of this Chapter.
(i) Cannabis businesses shall not pass the taxes imposed by this Article through to an
adult -use cannabis retail business customer or commercial cannabis business
customer in any fashion except as part of the basic product sales and/or service
price.
(j) Definitions. For purposes of this Article, the following terms have the following
meanings:
(1) "Adult -Use cannabis retail business" as defined in section 40-2(4) of this
Code.
(2) "Commercial Cannabis Activity" as defined in section 40-2(9) of this Code.
(3) "Commercial cannabis business" as defined in section 40-2(10) of this
Code excluding medical marijuana collectives/cooperatives also referred
to as medicinal cannabis retail sales.
(4) "Cultivation" as defined in section 40-2(11) of this Code.
(5) "Delivery" as defined in section 40-2(13) of this Code.
(6) "Distribution" as defined in section 40-2(16) of this Code.
(7) "Gross receipts" — section 21-3 of this Chapter notwithstanding, "gross
receipts" for the purposes of this Article shall mean:
(A) Transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatsoever, of tangible
personal property for a consideration including any monetary
consideration for cannabis, including, but not limited to, membership
dues, reimbursements provided by members, regardless of form, or
the total amount of cash or in -kind contributions, including all
operating costs related to the growth, cultivation, manufacturing,
distribution, testing, or provision of cannabis or any transaction
related thereto.
(B) Anything else of value obtained by an a cannabis business;
(C) The total amount of the sale price of all sales and services;
(D) The total amount charged or received for the performance of any act,
service or employment of whatever nature it may be, whether or not
such service, act or employment is done as a part of or in connection
with the sale of goods, wares, or merchandise (whether at wholesale
Ordinance No. NS-2972
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or retail), for which a charge is made or credit allowed, including all
refunds, cash credits and properties of any amount or nature;
(E) Any amount for which credit is allowed by the seller to the purchaser
without any deduction therefrom, on account of the cost of the
property sold, the cost of materials used, the labor or service cost,
interest paid or payable, losses, or any other expense whatsoever;
provided that cash discounts allowed or payment on sales shall not
be included;
(F) The amount of any federal manufacturer's or importer's excise tax
included in the price of property sold, even though the manufacturer
or importer is also the retailer thereof;
(G) The amount of any California state cannabis excise tax or state
cannabis cultivation tax included in the price of the product;
(H) "Gross receipts" shall not include the following:
i. The amount of any federal tax imposed on or with respect to retail
or wholesale sales or the sale of services whether imposed upon
the cannabis business or the consumer whenever the amount of
federal tax is authorized by law to be stated and passed through
to customers as a separate charge.
ii. Any California state, county, or city sales or use tax, including any
add -on, district, or transaction and use tax, required by law to be
included in or added to the purchase price and collected from the
consumer or purchaser, or such part of the sales price of any
property previously sold and returned by the purchaser to the
seller which is refunded by the seller by way of cash or credit
allowances given or taken as part payment on any property so
accepted for resale; or
iii. The amount of the sale price of business personal property (all
property owned or leased by a cannabis business operator used
in the operation cannabis business activities, including but not
limited to: furniture, fixtures, and business equipment); real
property, including land, buildings and other improvements.
iv. The amount of equity contributions, investments, and/or loan
proceeds to cannabis business' operation, and/or proceeds from
the sale or transfer of cannabis business' retail or commercial
cannabis business.
v. The amount of interparty sales and/or transfers of goods within a
single vertically and/or horizontally integrated cannabis business,
where the sales or transfers goods are between two or more
commercial cannabis business licensees (excluding testing
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facilities or testing laboratories), or one or more said commercial
cannabis business licensee(s) and one or more medicinal
cannabis retail business licensee(s), as set forth in accordance
with section 21-131.2 and/or section 21-142.
(1) "Gross receipts" shall be calculated without any deduction on
account of any of the following:
i. The cost of tangible or intangible property sold or bartered;
ii. The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense;
iii. The cost of transportation of cannabis, or other property or
product;
iv. The amount of any federal or state income orfranchise taxes; and
v. Any other business costs or expenses, unless otherwise
specifically exempted.
(8) "Gross Square foot' or "gross square footage" for the purposes of this
Article shall mean:
(A) In the case of commercial cannabis businesses licensed by the state
to engage in an adult -use cannabis retail business, the gross number
of square feet comprising the adult -use cannabis retail property
location as confirmed by the corresponding "approved building set'
or "approved certificate of occupancy' on file with the City of Santa
Ana Planning and Building Agency, whichever is the greater of any
square footage indicated, whether such adult -use cannabis retail
business is part of an on -site vertically or horizontally integrated
cannabis business or not.
(B) In the case of commercial cannabis businesses licensed by the state
to engage in cultivation, the aggregate number of square feet
comprising all areas of the premises under 'canopy", whether such
sum is greater or lesser than the gross square footage as stated in
the "approved building set' or "approved certificate of occupancy',
and whether such commercial cannabis cultivation business is part
of an on -site vertically integrated cannabis business or not.
"Canopy" shall mean the designated area(s) of a premise that will
contain mature plants at any point in time. Canopy shall be calculated
in square feet and measured using clearly identifiable boundaries of
all area(s) that will contain mature plants at any point in time,
including all of the space(s) within the boundaries. Canopy may be
noncontiguous, but each unique area included in the total canopy
calculation shall be separated by an identifiable boundary which
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includes interior walls, shelves, greenhouse walls, hoop house walls,
garden benches, hedgerows, fencing, garden beds, or garden plots;
and if mature plants are being cultivated using a shelving system, the
surface area of each level shall be included in the total canopy
calculation.
Canopy shall be subject to independent measurement and
calculation by duly authorized employees or agents of the City at the
time of application for a Santa Ana Business License and annually
thereafter at the time of the renewal of such license, or more often
as may be deemed necessary in the discretion of the collector.
Whenever an independent canopy measurement and calculation is
required under the terms of this Article or whenever the collector in
his or her discretion determines that the independent measurement
and calculation of a licensee's canopy is desirable to effectuate the
proper assessment or collection of the business license taxes
required to be paid under the terms of this Chapter, or for any other
purposes related to the express aims of this Article then a canopy
measurement shall be performed and a corresponding service fee
shall be applicable in the amount as specified by resolution of the
City Council.
(C) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and that are not vertically
or horizontally integrated with another cannabis business occupying
the same premises, the gross number of square feet as confirmed
by the corresponding "approved building set" or "approved certificate
of occupancy" on file with the City of Santa Ana Planning and
Building Agency, whichever is the greater of any square footage
indicated.
(D) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and occupying the same
premises with another cannabis business with which they are
vertically or horizontally integrated, the gross number of square feet
allocated by the commercial cannabis business owner/operator
respectively for either distribution use or for manufacturing use,
whether the combined sum of all vertically or horizontally integrated
uses is less than, equal to, or greater than the gross square footage
as stated in the "approved building set" or "approved certificate of
occupancy".
The number of square feet allocated ("Allocated Square Footage")
shall be subject to independent measurement and calculation by duly
authorized employees or agents of the City at the time of application
for a Santa Ana Business License and annually thereafter at the time
of the renewal of such license, or more often as may be deemed
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necessary in the discretion of the collector. Whenever an
independent allocated square footage measurement and calculation
is required under the terms of this Article or whenever the collector
in his or her discretion determines that the independent
measurement and calculation of a licensee's allocated square
footage is desirable to effectuate the proper assessment or collection
of the business license taxes required to be paid under the terms of
this Chapter, or for any other purposes related to the express aims
of this Article then an Allocated Square Footage measurement shall
be performed and a corresponding service fee shall be applicable in
the amount as specified by resolution of the City Council.
(E) In the case of commercial cannabis businesses licensed by the state
to engage in testing facilities or testing laboratory businesses, the
gross number of square feet comprising such commercial cannabis
business' property location as confirmed by the corresponding
"approved building set" or "approved certificate of occupancy" on file
with the City of Santa Ana Planning and Building Agency, whichever
is the greater.
(9) "Manufacturing" as defined in section 40-2(22) of this Code.
(10) "Retail businesses" as defined in section 40-2(40) of this Code
(11) "Testing Facility" or "Testing Laboratory" as defined in section 40-2(44) of
this Code.
(12) "Wholesale" as defined in section 40-(46) of this Code.
(k) Modification, repeal or amendment. The City Council may repeal the ordinance
codified in this Article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The City Council
may likewise by ordinance adopt and add additional provisions to any other Article
of this Chapter and relate them to this Article, or amend any existing provisions of
any Article of this Chapter as they may already relate to this Article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the City Council repeals said ordinance or any provision of
this Article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein. '
(1) Administration —Rules, regulations and guidelines. In order to aid in the city's
collection of taxes due under this Article and to ensure that all commercial cannabis
businesses are taxed consistently to the best of the city's ability, the collector, with
the concurrence of the city attorney, may promulgate rules, regulations, and
guidelines, to implement and administer this Article including, but not limited to rules,
regulations, and guidelines harmonizing other provisions of this Chapter with the
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provisions of this Article in any manner not inconsistent with the intent of this Article
and which does not result in an increase in the tax or taxes imposed herein. The
collector may also, with the concurrence of the city attorney, interpret or clarify the
methodology of the tax, or any definition applicable to the tax, so long as such
interpretation or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this Article.
(m) Occasional transactions —Exemptions.
(1) The provisions of this Article shall not apply to persons having no fixed
place of business within the city who come into the city for the purpose
of transacting a specific item of commercial cannabis business at the
request of a specific client or customer, incidental to a commercial
cannabis business principally established elsewhere, provided that such
person does not come into the city for the purpose of transacting such
business on more than three (3) days during any calendar year.
(2) For any person not having a fixed place of business within the city who
comes into the city for the purpose of transacting commercial cannabis
business activities, the business license tax(es) payable by such person
may be apportioned by the collector in accordance with this Chapter.
(n) Reporting and remittance.
(1) Beginning as set forth in subsection (r) below, and monthly thereafter,
each commercial cannabis business required to pay a tax or taxes based
on gross receipts under this Article (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts),
shall report to the city any gross receipts received during the preceding
monthly reporting period. In addition, each cannabis business (including
qualified nonprofit organizations) required to pay a tax or taxes based on
square footage shall report to the city the gross square footage of the
cannabis business' property location. Every cannabis business shall then
compute the business license taxes at both the gross receipts rate and
the gross square footage rate - prorated monthly to one -twelfth (1/12th) of
the annual tax rate amount - and shall then remit to the city the amount of
the higher of the two tax calculations due and owing during said period in
accordance with section 21-133, subsection (d). In the case of a qualified
nonprofit organization only the gross square footage computation shall be
made and the amount of such calculation shall represent the amount due
and owing during said period. All reporting and remitting made shall be
done in accordance with instructions from the collector and shall be made
using forms provided or approved by the collector.
(2) For purposes of this section, month shall mean calendar month and shall
include any fraction of a month. Taxes shall begin to accrue on the date
that a person or entity first receives a business license or other city permit
Ordinance No. NS-2972
Page 13 of 25
to operate as a commercial cannabis business or upon the operative date
of this Article should a person or entity already possess a commercial
cannabis business license or other city permit to operate as a commercial
cannabis business.
(3) The payment of the two thousand dollars ($2,000.00) minimum basic rate
gross receipts tax required annually for each separate branch location or
separate property location of the business in accordance with this section,
shall be made annually prior to the beginning of the fiscal year beginning
April first of the current year and expiring on the 31 st day of March of the
following year. In the case of a new commercial cannabis business the
minimum basic rate gross receipts tax shall be paid in advance prior to
any new business activity being undertaken. Every new licensee shall pay
in advance an amount equal to one -quarter ('/4) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter
remaining during the period for which the new license is issued.
(o) Delinquent date —Penalty. Any individual or entity who fails to pay the taxes required
by this Article when due shall be subject to penalties and interest as set forth in
accordance with this Chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this Article and failure
to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this Article.
(p) Business license tax certificate —Required. There are imposed upon all persons
engaged in transacting and carrying on any commercial cannabis business activity
in the city taxes in the amounts prescribed in this Article. It shall be unlawful for any
person, either for him or herself or for any other person, to commence, transact or
carry on any business in the city without first having procured a business license
from the city under this Chapter and having paid the taxes set forth in this Article,
and without complying with any and all applicable provisions contained in this
Chapter. The carrying on of any commercial cannabis business activity without
complying with all the provisions of this Article shall constitute a separate violation
of this Chapter for each and every day that such commercial cannabis activity is so
carried on.
(q) Classification of business license assessment type —Term and renewal. The
business license issued to commercial cannabis businesses shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) of this Chapter and shall be subject to renewal in accordance
with sections 21-72(c), 21-73(c), and 21-77.
(r) Operative date. Upon the approval by the majority of the voters of the city at the
November 6, 2018 general election, the taxes imposed by this Article shall become
operative and shall be applied by the collector upon all commercial cannabis
businesses.
Ordinance No. NS-2972
Page 14 of 25
(s) Operative date of decreased gross receipts tax rate. The gross receipts tax set
initially at a rate of five (5%) percent for testing facilities or testing laboratories
pursuant to subsection (d) above shall be decreased to a rate of one -percent (1 %)
by resolution of the City Council [Santa Ana City Council Resolution No, 2019-xx] as
hereinabove provided for in accordance with subsection (c), which reduced rate,
under the terms of said City Council resolution, shall become retroactively effective
July 1, 2019.
Section 8. Section 21-136 of Article XIII of Chapter 21 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 21-136. Security for collection of commercial cannabis business' business
license tax; requirement; extension of time; application; failure to post or restore —
effect; jeopardy determination; refund or release; deposit adjustment —effect.
(a) Requirement for Security Deposit. To ensure compliance with business license tax
payment requirements established pursuant to this Article, the collector shall
require, beginning on the operative date of this Article, that each commercial
cannabis business owner/operator, including but not limited to each purchaser,
assignee, transferee, or other successor in interest (hereinafter collectively referred
to as successor) of a commercial cannabis business subject to the business
licensing requirements of this Article, deposit one hundred and twenty (120) days
following the last day of the month in which business was first commenced such
security (per individual business license) in a form acceptable to the collector in an
amount not larger than the commercial cannabis business owner's/operator's
estimated average monthly business license tax liability as determined by the
collector or the sum of ten thousand dollars ($10,000.00), whichever is least.
Provided, however, in the event that two or more commercial cannabis business
licensees sharing at least 80% underlying common ownership, regardless of form
of business structure, are engaged in an integrated cannabis business (whether
vertically or horizontally integrated) as defined in section 21-142, then a single
consolidated deposit shall be made equal to the deposit amount owing for the
integrated commercial cannabis activity having the highest individual business
license tax liability. Each new city commercial cannabis business licensee shall
upon obtaining their City business license(s) deposit a similar security as
applicable per business license within thirty (30) days after commencing business.
(b) Extension of Time. If, upon request and in the judgment of the collector, a
determination of any commercial cannabis business' estimated average monthly tax
liability for purposes of setting the amount of their required security deposit requires
an extension of time beyond one hundred and twenty (120) days following the last
day of the month in which business was first commenced, then the collector may
issue a written notification to such commercial cannabis business granting such
extension.
Ordinance No. NS-2972
Page 15 of 25
(c) Application of Security Deposit. To recover past -due business license taxes,
including penalties, interest, charges, fees, or costs (hereinafter collectively referred
to as business license tax liabilities) remittable by the depositor, the collector may
apply the security deposited with the collector. At least fifteen (15) days prior to the
application of a security deposit, the collector shall serve upon the depositing
commercial cannabis business owner/operator notice of intent to apply the security
deposit. Service of notice may be made by placing the notice in the United States
mail, postage prepaid, addressed to the depositing commercial cannabis business
owner/operator at their place of business or other mailing address of record. Any
portion of the security remaining after satisfaction of outstanding business license
tax liabilities and any expenses related to third -party administrative charges or fees
relating to the liquidation and application of non -cash deposits may be retained by
the collector for security or in the case of a closeout audit may be paid over by the
collector to the depositing owner/operator. Except in the case of a closeout audit
pursuant to section 21-141, in the event the collector applies the security deposit, or
any portion of said deposit, as an offset against remittable business license tax
liabilities and any expenses related to third -party administrative charges or fees
relating to the liquidation and application of non -cash deposits, the commercial
cannabis business owner/operator shall be required within thirty (30) days of the
collector's written demand therefor, to re -deposit the full amount of the required
security. In such event the amount of the required security shall be adjusted by the
collector based on the average of the commercial cannabis business' actual monthly
gross receipts tax returns and/or remittances as measured over the last three (3)
valid monthly returns and/or remittances received by the collector or the sum of ten
thousand dollars ($10,000), whichever is least, less any amount remaining on
deposit with the collector. Service of demand shall be in the same manner as stated
hereinabove for service of notice.
(d) Failure to Post or Restore Security Deposit —effect. Failure by a commercial
cannabis business licensee to initially post or restore a security deposit when
required by the collector pursuant to this section shall be cause for suspension
and/or revocation of such commercial cannabis business' existing Santa Ana
Business License as set out in section 21-86 of this Chapter. Similarly, in the case
of a vertically and/or horizontally integrated cannabis business, the business
license(s) of the integrated commercial cannabis business(es) shall be likewise
subject to suspension and/or revocation.
(e) Jeopardy Determination. If the collector believes that the collection of any business
license tax imposed by this Article will be jeopardized, in whole or in part, by delay
in the commercial cannabis business owner's/operator's timely remittance of the
business license tax, the collector shall serve notice upon the person determined to
be liable therefor of their determination of jeopardy and of the business license tax
required to be paid to the City, and demand immediate payment thereof, together
with any interest and penalty determined to be due. The collector may consider all
facts and circumstances relevant to determining whether the collection of any
Ordinance No. NS-2972
Page 16 of 25
business license tax will be jeopardized by delay, including but not limited to
indications that the person liable for the business license tax intends to take or is
taking action to discontinue business activities in the City, dissipate or otherwise
remove assets from the City, or sell, exchange, transfer, assign, or otherwise
dispose of such person's business, personal or business income, or business
property. The collector also may consider whether the person liable for the business
license tax is or has been uncooperative or unresponsive in connection with any
investigation, examination, audit, deficiency determination, assessment, or
collection action or procedure undertaken by the collector. A jeopardy determination
of business license tax, penalty, or interest, is immediately due and payable upon
the service of the notice of jeopardy determination on the person determined to be
liable therefor. Service of notice of a jeopardy determination shall be made by: (1)
sending the notice initially by electronic mail to the depositing commercial cannabis
business owner's/operator's electronic mail address of record as set out in the
depositing commercial cannabis business owner's/operator's application for
business license or most recent business license renewal affidavit or business
license amendment statement; (2) placing the notice for delivery with an express
carrier for next business day delivery, all delivery and tracking charges prepaid,
addressed to the depositing commercial cannabis business owner/operator at their
place of business; and/or (3) conspicuously posting said notice upon the premises
of the commercial cannabis business. Service of notice of a jeopardy determination
shall be deemed completed upon tracking confirmation of the delivery of said notice
to the commercial cannabis business owner's/operator's place of business or on the
date of the actual posting of said notice on the premises of the depositing
commercial cannabis business owner/operator. Upon the business day next
following the completion of service of notice of a jeopardy determination upon a
depositing commercial cannabis business, the collector in his or her discretion may
proceed with the application of the security deposit upon actual or estimated
business license taxes due, including penalties, interest, charges, or service fees.
(f) Refund or release of security deposit. In the case of the sale, assignment, or other
transfer or termination of business by the depositor pursuant to section 21-141, the
collector shall refund or release the security deposit amount required pursuant to
this section, or in the event of prior application of the security deposit pursuant to
subsection (c), any unapplied amount of such security deposit, upon depositor's
presentation to the collector of a certificate of nonliability stating the nonliability of
the depositor for payment of business license taxes as hereunder provided in section
21-141(f).
(g) Deposit adjustment —effect. In the case of a determination by the collector that the
amount of a previously posted commercial cannabis business owner's/operator's
security deposit exceeds the requirements of this section, then the collector shall
adjust the amount of the required security deposit. If the prior security deposit was
posted on a cash basis, then the collector shall refund the excess amount. If the
prior security deposit was posted on a non -cash basis, then an adjusted cash basis
Ordinance No. NS-2972
Page 17 of 25
security deposit or adjusted non -cash basis security deposit in a form acceptable to
the collector may be posted in exchange for the release of the prior security deposit.
Section 9. Section 21-141 of Article Xlil of Chapter 21 of the Santa Ana
Municipal Code is hereby added to read as follows:
Sec. 21-141. Sale, assignment, transfer, or termination of business commercial
cannabis business owner's/operator's duty to notify; remitting and reporting
requirements, closeout audit; successor's duty to notify; successor's and
transferor's joint and several liability; certificate of nonliability.
(a) Owner/Operator's duty to notify.
Termination of business. A commercial cannabis business owner/operator
who is terminating their business shall notify the collector in writing of such
termination at least ninety (90) days in advance of the date of termination of
business. If the decision to terminate business is made within less than a ninety
(90) day period prior to the date of termination, the owner/operator shall then
immediately notify the collector of said decision and the date of termination of
business.
Sale, assignment, or transfer of business. A commercial cannabis business
owner/operator who is selling, assigning, or otherwise transferring their
business (hereinafter collectively referred to as transferor) shall notify the
collector in writing of such sale, assignment, or transfer at least ninety (90) days
in advance of the date of the sale, assignment, or transfer and shall notify the
collector in writing of the name and address of the purchaser, assignee,
transferee, or other successor in interest (hereinafter collectively referred to as
successor) unless the decision to sell, assign, or otherwise transfer their
business was made within less than a ninety (90) day period prior to the sale,
assignment, or transfer, in which case the transferor shall then immediately
notify the successor of the successor's responsibility for unpaid business
license taxes, including penalties, interest, charges, fees, or costs (hereinafter
collectively referred to as business license tax liabilities) for the period prior to
the sale, assignment, or transfer as set forth in subsections (d) and (e) below,
and shall further certify in writing to the collector that the successor was notified
of the requirements of this Article regarding their responsibility for unpaid
business license tax liabilities.
(b) Remitting and reporting requirements. Each commercial cannabis business
owner/operator upon the sale, assignment, or other transfer, or termination of
business for any reason shall, on or before the last day of the month following the
sale, assignment, transfer, or termination of business, file a final return to the
collector on City approved forms, of the total gross receipts received, adjustments
to gross receipts, the amount of business license tax collected for the reporting
period, remittances made, if any, and the balance of the business license tax due, if
any, shall be remitted to the collector.
Ordinance No. NS-2972
Page 18 of 25
(c) Closeout audit. After filing the final return and remitting the balance due, the
commercial cannabis business owner/operator shall make its records of account
available for a closeout audit by the collector, his or her revenue officers, or duly
authorized employees or agents of the City. The decision to perform a closeout audit
shall be made solely at the discretion of the collector. If, upon closeout audit, or by
means of other information available to them, the collector determines that the
owner/operator selling, assigning, or otherwise transferring, or terminating their
business is found to have satisfied all business license tax liabilities, the collector
shall issue to such business owner/operator a certificate of nonliability.
If, upon closeout audit, or by means of other information available to them, the
collector determines that the owner/operator selling, assigning, or otherwise
transferring, or terminating their business is deficient in either their return or
remittance, or both, the collector shall immediately notify such owner/operator of the
amount of the net deficiency, plus applicable penalties, interest, charges, fees, or
costs. Upon such owner/operator's remittance of all business license tax liabilities
owing, the collector shall issue a certificate of nonliability.
(d) Successor's duty to notify. If a commercial cannabis business owner/operator
decides to sell, assign, or otherwise transfer their business, their successor shall
notifythe collector of the date of the sale, assignment, or other transfer at least ninety
(90) days before the date of the sale, assignment, or transfer. It shall be the duty of
the successor to obtain written verification from the collector's office that the
transferor does not have or is not liable for any outstanding business license taxes
liabilities. After the successor seeks written verification from the collector's office, if
the collector notifies the successor that the transferor has or is liable for any
outstanding amount of business license tax liabilities, the successor shall withhold
an amount equal to such outstanding business license tax liabilities until the
transferor produces a certificate of nonliability stating the nonliability of the transferor
for payment of business license tax liabilities. If the transferor does not present a
certificate of nonliability within ninety (90) days after such sale, assignment, or other
transfer, the successor shall deposit the withheld amount with the collector pending
settlement of the account of the transferor.
If the decision to sell, assign, or otherwise transfer was made within less than a
ninety (90) day period prior to the date of the sale, assignment, or other transfer, the
successor shall notify the collector of the sale, assignment, or transfer immediately
and shall withhold an amount equal to the sum of the transferor's last three (3)
months' of reported and remitted business license taxes until the transferor produces
a certificate of nonliability stating the nonliability of the transferor for payment of
business license tax liabilities. If the transferor does not present a certificate of
nonliability within ninety (90) days after such sale, assignment or other transfer, the
successor shall deposit the withheld amount with the collector pending settlement of
the account of the transferor.
(e) Joint and several liability. If the successor fails to withhold the applicable amount
required under subsection (d) they shall become jointly and severally liable along
Ordinance No. NS-2972
Page 19 of 25
with the transferor for the payment of the full amount of the transferor's business
license tax liabilities and shall likewise become jointly and severally liable along with
the transferor for future penalties and/or interest charges as may be applicable as
set forth in sections 21-83, 21-84, and 21-85 until all business license tax liabilities
are satisfied.
(f) Certificate of nonliability. Upon application of a commercial cannabis business
owner/operator who is terminating their business, or a transferor, or a successor, for
a certificate of nonliability, the collector, after conducting an audit therefore, as he or
she may deem necessary, shall issue the certificate of nonliability if the
owner/operator's, transferor's, or successor's business license tax liabilities have
been satisfied. If any business license tax liabilities remain outstanding, or if
additional business license tax liabilities have accrued subsequent to the date of
application, the collector shall give notice to the operator/owner, transferor, or
successor of the applicable amount which must be fully paid as a condition of issuing
their respective certificate of nonliability. Where a transferor's business license tax
liabilities have been partially or wholly paid by their successor to the collector
pursuant to subsection (e) or partially or wholly satisfied by their successor's action
of withholding and depositing amounts with the collector pursuant to subsection (d),
no certificate of nonliability shall be issued to the transferor without the prior written
consent of their successor.
Section 10. Section 21-142 of Article XIII of Chapter 21 of the Santa Ana
Municipal Code, is hereby added to read as follows:
Sec. 21-142. Vertical and horizontal integration of commercial cannabis business
licensees —Defined.
The terms vertical integration and horizontal integration as used in this Article shall have
the following meanings: Vertical integration shall refer to cannabis businesses operating
at different points in the same supply chain from cultivation to retail sales, as long as they
share at least 80% underlying common ownership, regardless of form of business
structure, and are engaged in interparty sales and/or transfers of goods. Horizontal
integration shall refer to cannabis businesses operating at the same point in the same
supply chain, as long as they share at least 80% underlying common ownership,
regardless of form of business structure, and are engaged in interparty sales and/or
transfers of goods. For purposes of this Article the term "cannabis businesses" shall
include medicinal marijuana collectives/cooperatives as defined in section 18-611 and
commercial cannabis businesses as defined in section 40-2, but shall not include
commercial cannabis businesses engaged in testing facilities or testing laboratory
businesses.
Section 11. Section 21-80 of Article VII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Sec. 21-80. - Same —Not conclusive; audit of books.
Ordinance No. NS-2972
Page 20 of 25
No statement shall be conclusive as to the matters set forth therein, nor shall the filing of
the same preclude the city from collecting by appropriate action such sum as is actually
due and payable hereunder. Such statement and each of the several items therein
contained shall be subject to audit and verification by the collector, his or her revenue
officers, or duly authorized employees or agents of the City, who are hereby authorized
to examine, audit, and inspect such books and records of any licensee or applicant for
license, as may be necessary in theirjudgment to verify or ascertain the amount of license
fee due.
All persons subject to the provisions of this Chapter shall keep complete and detailed
records of business transactions, including, but not limited to the following: rent collected,
daily_sales, sales taxes collected and paid to the state, any and all city, state and federal
taxes collected and remitted from cannabis sales, point of sales (POS) system detailed
daily sales data base and summary monthly sales reports, receipts, purchases, and other
expenditures, detailed general ledger, income statements, cash flow statements, balance
sheets, sales journals, cash disbursement journals and ledgers including payroll journals,
third -party staffing agency statements, lease agreements, and other reports regarding the
number and types of persons employed and/or otherwise engaged in the business, and
shall retain all such records for examination by the collector, his or her revenue officers,
or duly authorized employees or agents of the City. Such records shall be maintained for
the period of the current calendar year, and for a prior period of at least three (3) complete
calendar years or from the commencement of business within the city, whichever period
is least. In the event such records of any business are not maintained within the city and
are not reasonably made available for examination within the city, then such business
shall be responsible for the actual travel and lodging cost in connection with the
performance of said examination.
No person required to keep records under this section shall refuse to allow the collector,
his or her revenue officers, or duly authorized employees or agents of the City to examine
said records at reasonable times and places. Any person who willfully refuses to allow
said examination on demand and at a reasonable time and place as herein provided shall
be deemed guilty of a misdemeanor. In addition, such willful refusal shall be cause for
suspension and/or revocation of such business' existing Santa Ana Business License as
set out in section 21-86 of this Chapter.
Section 12. Section 21-80.1 of Article VII of Chapter 21 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 21-80.1. Same —Audit deficiency; application of penalty and interest;
voluntary compliance effect; —Abatement of penalty and interest application;
Exception for business license taxes assessed on a monthly basis; audit service
fees.
Ordinance No. NS-2972
Page 21 of 25
In the event that the collector or his or her designated agents, whether through an
audit or otherwise, determine that any person has misstated their gross receipts
amount, square footage amount, or other criteria upon which their• current or prior years'
business license tax has been calculated resulting in an underpayment of the tax
amount owed, the collector shall separately calculate the deficiency for each distinct
license period affected and issue a statement of tax deficiency and add delinquency
penalties as applicable to the amount of the tax deficiency in accordance with Section
21-25, subsection (a) and Section 21-83, subsection (a), together with interest as
provided under Sections 21-84 and 21-85, as applicable, until such time as the tax
deficiency together with the accrued penalties and interest, are satisfied.
In the case of business license taxes which are assessed and payable on a monthly
basis, an identical procedure shall be applied by the collector. Provided, however, that
the provisions of Section 21-25 shall not apply.
Except business license taxes which are assessed and payable on a monthly basis,
where any person voluntarily reports a tax deficiency on business license taxes which
are assessed and payable on an annual basis such person's penalty and interest
assessment on said deficiency shall be abated until the combined amount of tax, penalty
and interest due is equalized to an amount equivalent to the amount of current and prior
years' taxes owing as computed or determined based upon the business license tax
rates and charges in effect for the most current tax year. In computing the abatement of
accrued penalties and interest to arrive at a combined amount of tax, penalty and
interest equivalent to the amount of the current or prior years' taxes owing as computed
or determined based upon the business license tax rates in effect for the most current
tax year the collector in his or her discretion may retain a sufficient amount of accrued
penalty alone, or a sufficient amount of accrued interest alone, or any sufficient
combination of accrued penalty amount and accrued interest amount necessary.
Whenever the result of any audit performed pursuant to this Chapter, excluding audits
performed in connection with any medicinal cannabis business or commercial cannabis
business, determines that any licensee has, exclusive of penalties and interest,
underpaid the amount of their business license tax by five (5) per cent or more of the
total amount due, but not less than two hundred fifty dollars ($250.00), then an audit
service fee in an amount as specified by resolution of the City Council shall be applied.
In the case of audits performed pursuant to this Chapter in connection with any
medicinal cannabis business or commercial cannabis business that has, exclusive of
penalties and interest, underpaid the amount of their business license tax by five (5) per
cent or more of the total amount due, but not less than five thousand dollars ($5,000.00),
then such cannabis business shall be responsible for the City's actual cost of performing
said audit.
Section 13. Section 21-86 of Article VII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Ordinance No. NS-2972
Page 22 of 25
Sec. 21-86. - Same —Suspension and revocation of business license.
The collector shall suspend and/or revoke any business license issued or granted
pursuant to this Chapter only upon those grounds set forth in Sections 21-45, 21-50, 21-
55, 21-58, 21-59, 21-60, 21-80, 21-136 or upon conditions set forth in any written
agreement executed pursuant to Section 21-83.
Provided further, that unless revocation is made upon conditions set forth in a
written agreement executed pursuant to Section 21-83 or upon licensee's failure to
comply with the requirements of Section 21-136, no licensee's business license shall be
suspended and/or revoked for failure to pay any annual business license tax as set forth
in this Chapter, or any monthly business license tax as set forth in Article XII or Article
XIII of this Chapter, or any other amount due pursuant to this Chapter until the penalties
accruing for such failure to pay, exclusive of interest, have attained the maximum
applicable amount permissible under the terms of this Chapter. Whereupon, the collector
shall give a notice of suspension, which notice shall specify the grounds for suspension,
and which notice shall be given by personal service or by depositing it in the United States
post office in the city, postage prepaid, addressed to the licensee at the address listed on
the application of the licensee where he or she consented to receive mail concerning his
or her license, to obtain a license or to pay any license tax due or the address listed on
the most recent business license renewal affidavit or business license amendment
statement; and/or conspicuously posting said notice upon the premises of the business.
Service of notice shall be deemed completed upon the date of personal service of said
notice, or the date of mailing of said notice, or the date of actual posting of said notice on
the premises of the licensee whichever occurs first.
In the event said licensee fails, within a period of thirty (30) days' notice, to pay the
business license tax due or any other amount due pursuant to this Chapter, or to request
a hearing the procedure for which shall be as provided in Section 21-41, then and in that
event the collector shall give a notice of revocation. The licensee shall be given at least
ten (10) days' notice, which notice shall specify the grounds for revocation, and which
notice shall be given pursuant to the hereinabove set forth procedure for giving notice.
In the event said licensee fails within the allotted ten (10) day period to request a
hearing to show cause why his or her business license should not be revoked, then and
in that event the collector shall revoke said person's license and give notice thereof to
said person pursuant to the hereinabove set forth procedure for giving notice.
In the event said licensee fails to file within ten (10) days thereafter, an appeal
pursuant to Chapter 3 of this Code, then the collector's action in revoking said person's
business license shall be conclusive as to all matters involved, and the transacting and
carrying on by any person of any business pursuant to said license shall thereafter be
deemed a misdemeanor.
Ordinance No. NS-2972
Page 23 of 25
Section 14. Severability. If any section, subsection, sentence, clause, phrase or
portion of this ordinance is for any reason held to be invalid or unconstitutional by the
decision of any court of competent jurisdiction, such decision shall not affect the validity
of the remaining portions of this ordinance. The City Council of the City of Santa Ana
hereby declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 15. Effective Date. This Ordinance shall be effective thirty days after its
adoption by the City Council of the City of Santa Ana.
ADOPTED this 3rd day of September, 2019.
WW-
Wel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By.
Lisa Storck
Assistant City Attorney
AYES: Councilmembers Iglus, P,uh6o, Penaloza, Sarmiento Solorio,
Villegas (45) 4
=glesios
NOES: Councilmembers -done (0) /
Ptil i do
ABSTAIN: Councilmembers -Ql W) /
NOT PRESENT: Councilmembers None (0)
'Ward 4 Representative Vacant
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C-Ay councO meet n 9 .
Ordinance No. NS-2972
Page 24 of 25
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify that the attached
Ordinance No. NS-2972 to be the original ordinance adopted by the City Council of the
City of Santa Ana on September 3, 2019, and that said ordinance was published in
accordance with the Charter of the City of Santa Ana.
Date: l - 10� - '90 l C1
4�� A
Daisy Gomez 0
Clerk of the Council
City of Santa Ana
Ordinance No. NS-2972
Page 25 of 25