HomeMy WebLinkAboutCC RES 2018-61RESOLUTION NO. 2018-61
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, CALLING FOR THE
PLACEMENT ON THE BALLOT OF A GENERAL TAX
MEASURE FOR THE NOVEMBER 6, 2018, GENERAL
MUNICIPAL ELECTION FOR THE SUBMISSION TO THE
QUALIFIED VOTERS OF A PROPOSED ORDINANCE
ESTABLISHING A TAX ON CANNABIS BUSINESSES
OPERATING WITHIN THE CITY OF PALM DESERT.
WHEREAS, pursuant to California Elections Code Section 9222, the City Council has
authority to place measures on the ballot to be considered at a Municipal Election; and
WHEREAS, on October 12, 2017 the Palm Desert City Council ("City Council") of
Palm Desert ("City") approved Ordinance 1329 allowing for commercial cannabis related
land -uses including cultivation, manufacturing, and retail sales, including delivery, of
cannabis within the city; and
WHEREAS, the City Council desires to submit to the voters an amendment to the
Palm Desert Municipal Code to establish a general tax on cannabis businesses of up to
$20 per square foot for cultivation; up to 3% of gross receipts for cannabis manufacturing;
and up to 15% of gross receipts for cannabis retailers; and
WHEREAS, the proposed cannabis business tax will be a general tax, the proceeds
of which will be spent for any unrestricted general revenue purposes, which can and may
include police protection, fire and paramedic services, street operations and
maintenance, library services, parks and recreation services, and other general municipal
services to the public; and
WHEREAS, on November 6, 1996, the voters of the State of California approved
Proposition 218 (California Constitution, Article XIIIC), an amendment to the State
Constitution which requires that all general taxes which are imposed, extended or
increased must be submitted to the electorate and approved by a majority vote of the
qualified electors voting in the election; and
WHEREAS, pursuant to Proposition 218 (California Constitution Article XIIIC, §2(b)),
an election for the approval of a new or increased general tax must generally be
consolidated with a regularly scheduled general election for members of the governing
body of the local government; and
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WHEREAS, the City Council desires to submit to the voters at the November 6, 2018
Municipal Election one ballot measure, as follows:
To improve general City services, such as police/emergency
response, parks, youth/senior services, and street repair,
shall the City of Palm Desert enact a general tax on cannabis
businesses of up to $20 per square foot for cultivation; up to
3% of gross receipts for cannabis manufacturing; and up to
15% of gross receipts for cannabis retail sales and delivery;
generating up to $5,430,000 annually for unrestricted general
revenue purposes, until ended by voters?
WHEREAS, on June 14, 2018 at a regular City Council meeting, the City Council
reviewed and adopted the previous version of this Resolution No. 2018-41, and in their
motion asked City staff to finalize the details of said Resolution, and asked City staff to
conduct further outreach regarding the tax rates in the Resolution and accompanying
Ordinance; and
WHEREAS, City staff has made the requested changes to this Resolution No.
2018-61 and the accompanying Ordinance as per City Council's direction; and
WHEREAS, Resolution No.2018-41 is hereby formally rescinded and this new
Resolution No. 2018-61 has been prepared as per the direction made by the City Council
at its June 14, 2018 meeting for the City Council's review at the regular City Council
meeting of July 12, 2018.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. Findings. The City Council finds that all of the forgoing recitals are
true and correct and are hereby incorporated and adopted as findings and determinations
by the City Council as if fully set forth herein.
SECTION 2. Submission of Measure. The City Council of the City, pursuant to
its right and authority as contained in California Proposition 218 and Elections Code
section 9222, by a two-thirds supermajority vote, hereby ORDERS the Ordinance
attached hereto as Exhibit "A" to be submitted to the qualified voters of the City at the
Regular Municipal Election to be held and consolidated with the Statewide General
Election on Tuesday, November 6, 2018. The proposed Ordinance shall be in the form
attached hereto as Exhibit "A" to this Resolution and is incorporated by this reference as
if fully set forth herein.
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SECTION 3. Ballot Measure. The City Council, pursuant to its right and
authority, does hereby ORDER that the ballot measure shall be presented and printed
upon the ballot submitted to the voters in the manner and form set forth in this Section 3.
On the ballot to be submitted to the qualified voters at the City of Palm Desert Regular
Municipal Election to be held on Tuesday, November 6, 2018, in addition to any other
matters required by law, there shall be printed substantially the following:
To improve general City services, such as police/emergency
response, parks, youth/senior services, and street repair, shall Yes
the City of Palm Desert enact a general tax on cannabis
businesses of up to $20 per square foot for cultivation; up to 3%
of gross receipts for cannabis manufacturing; and up to 15% of
gross receipts for cannabis retail sales and delivery; generating
up to $5,430,000 annually for unrestricted general revenue No
purposes, until ended by voters?
SECTION 4. Election Procedures.
A. The City Council consents to the consolidation of the election on this measure
with all other elections being held in the same territory on November 6, 2018,
and to hold and conduct the consolidated election in the manner prescribed in
Election Code Section 10418.
B. The ballots to be used at the election shall be in the form and content as
required by law.
C. In accordance with Section 10002 of the Elections Code, the Board of
Supervisors of Riverside County is hereby requested to consent to having the
Registrar of Voters render such election services to the City of Palm Desert as
may be requested by the City Clerk of said City, the County of Riverside to be
reimbursed in full for such services as are performed.
D. The election services which the City of Palm Desert requests the Registrar of
Voters, or such other official as may be appropriate, to perform and which such
officer is hereby authorized and directed to perform, if said Board of
Supervisors consents, include: the preparation, printing and mailing of sample
ballots and polling place cards; the establishment or appointment of precincts,
polling places, and election officers, and making such publications as are
required by law in connection therewith; the furnishing of ballots, voting booths
and other necessary supplies or materials for polling places; the canvassing of
the returns of the election and the furnishing of the results of such canvassing
to the City Clerk of the City of Palm Desert; and the performance of such other
election services as may be requested by the City Clerk.
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E. The City Clerk is authorized, instructed and directed to procure and furnish any
and all official ballots, notices, printed matter and all supplies, equipment and
paraphernalia that may be necessary in order to properly and lawfully conduct
the election.
F The polls for the election shall be open at seven o'clock a.m. of the day of the
election and shall remain open continuously from that time until eight o'clock
p.m. of the same day when the polls shall be closed, except as provided in
G. Section 14401 of the Elections Code of the State of California.
H. In all particulars not recited in this Resolution, the election shall be held and
conducted as provided by law for holding municipal elections in the City.
Notice of the time and place of holding the election is given and the City Clerk
is authorized, instructed and directed to give further or additional notice of the
election, in time, form, and manner as required by law.
J. All ballots shall be tallied at a central counting place and not at the precincts.
Said central counting place shall be at a County center as designated by the
Registrar of Voters.
K. That the vote requirement for the measure to pass is a majority (50% + 1) of
the votes cast.
L. The Riverside County Registrar of Voters is hereby AUTHORIZED to canvass
the returns of said election.
M. The City Clerk of the City of Palm Desert shall receive the canvass as it pertains
to the election on the measure, and shall certify the results to the City Council,
as required by law.
SECTION 5. Arguments and Impartial Analysis.
A. The City Council authorizes (i) the City Council or any member(s) of the City
Council, (ii) any individual voter eligible to vote on the above measure, (iii) a
bona fide association of such citizens or (iv) any combination of voters and
associations, to file a written argument in favor of or against the City measure,
in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the
State of California and may change the argument until and including August
20, 2018, after which no arguments for or against the measure may be
submitted to the City Clerk. Arguments in favor of or against the measure shall
each not exceed 300 words in length. Each argument shall be filed with the
City Clerk, signed, and include the printed name(s) and signature(s) of the
author(s) submitting it, or if submitted on behalf of an organization, the name
of the organization, and the printed name and signature of at least one of its
principal officers who is the author of the argument.
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B. The City Clerk shall comply with all provisions of law establishing priority of
arguments for printing and distribution to the voters, and shall take all
necessary actions to cause the selected arguments to be printed and
distributed to the voters.
C. Pursuant to Section 9280 of the Elections Code, the City Council DIRECTS the
City Clerk to transmit a copy of the measure to the City Attorney. The City
Attorney shall prepare an impartial analysis of the measure, not to exceed 500
words in length, showing the effect of the measure on the existing law and the
operation of the measure. The City Attorney shall transmit such impartial
analysis to the City Clerk, who shall cause the analysis to be published in the
ballot pamphlet along with the ballot measure as provided by law. The Impartial
Analysis shall be filed by the deadline set for filing of primary arguments as set
forth in subsection (A) above. The impartial analysis shall include a statement
indicating whether the measure was placed on the ballot by a petition signed
by the requisite number of voters of the City Council. In the event the entire
text of the measure is not printed on the ballot, nor in the voter information
portion of the sample ballot, there shall be printed immediately below the
impartial analysis, in no less than 10-font bold type, the following: "The above
statement is an impartial analysis of Ordinance or Measure . If you
desire a copy of the ordinance or measure, please call the election
official's office at (insert phone number) and a copy will be mailed at no
cost to you."
SECTION 6. Rebuttals.
A. That pursuant to Section 9285 of the Elections Code of the State of California,
when the City Clerk has selected the arguments for and against the various
City initiated measures which will be printed and distributed to the voters, the
City Clerk shall send copies of the argument in favor of the measures to the
authors of the argument against, and copies of the argument against to the
authors of the argument in favor. The authors or persons designated by them
may prepare and submit rebuttal arguments not exceeding 250 words. The
rebuttal arguments shall be filed with the City Clerk not later than August 30,
2018. Rebuttal arguments shall be printed in the same manner as the direct
arguments. Each rebuttal argument shall immediately follow the direct
argument which it seeks to rebut.
B. That all previous resolutions providing for the filing of rebuttal arguments for
City measures are repealed.
C. That the provisions herein shall apply only to the election to be held on
November 6, 2018, and shall then be repealed.
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SECTION 7. Placement on the Ballot. The full text of the Ballot Ordinance shall
be printed in the voter pamphlet, and a statement shall be printed in the ballot pursuant
to Section 9223 of the Elections Code advising voters that they may obtain a copy of this
ordinance, the Ballot Ordinance and/or ballot measure, at no cost, upon request made to
the City Clerk.
SECTION 8. Delivery of Resolution to County. The City Clerk shall certify to the
passage and adoption of this Resolution and enter it into the book of original resolutions.
The City Council DIRECTS the City Clerk to deliver copies of this Resolution, including
the Ballot Ordinance attached hereto as Exhibit "A", to the City Clerk of the Board of
Supervisors of Riverside County and to the Registrar of Voters of Riverside County.
SECTION 9. CEQA. The City Council hereby FINDS and DETERMINES that the
ballot measure relates to organizational or administrative activities of governments that
will not result in direct or indirect physical changes in the environment, and therefore is
not a project within the meaning of the California Environmental Quality Act ("CEQA") and
the State CEQA Guidelines, section 15378(b)(5).
SECTION 10. Severabilitv. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of the Resolution which can be given effect without the invalid
provision or application, and to this end the provisions of this Resolution are
severable. The City Council hereby declares that it would have adopted this Resolution
irrespective of the invalidity of any particular portion thereof.
SECTION 11. Effective Date of Resolution. This Resolution shall take effect
immediately upon its adoption.
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RESOLUTION NO. 2018-61
PASSED, APPROVED AND ADOPTED by the City Council of the City of Palm
Desert, California, at a regular meeting held on this 12th day of July, 2018.
CERTIFICATION FOR RESOLUTION NO. 2018-61
I, Rachelle D. Klassen, City Clerk of the City Council of the City of Palm Desert, California,
DO HEREBY CERTIFY that the whole number of the members of the City Council is five
(5); that the above and foregoing Resolution was duly and regularly passed and adopted
at a regular meeting of the City Council of the City of Palm Desert on the 12 th day of July
2018, by the following vote:
AYES: KELLY, NESTANDE, WEBER, and JONATHAN
NOES: NONE
ABSENT: HARNIK
ABSTAIN: NONE
ATTEST:
SABBY J NATIWA.N, MAYOR
APPROVED AS g) FORM:
HELLE D. K V4 SSE ►� CITY C ER '-4RT W. HAR e R A E
CITY OF PALM DESERT, CALIFOR I CITY\ATTORNEY J
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RESOLUTION NO. 2018-61
ATTACHMENT "A"
ORDINANCE NO. 1339
AN ORDINANCE OF THE PEOPLE OF THE CITY OF PALM
DESERT, CALIFORNIA, ADDING CHAPTER 3.50 TO TITLE 3
(REVENUE FINANCE) OF THE PALM DESERT MUNICIPAL
CODE ESTABLISHING A TAX ON CANNABIS BUSINESSES
OPERATING WITHIN THE CITY OF PALM DESERT.
THE PEOPLE OF THE CITY OF PALM DESERT, CALIFORNIA DO HEREBY
ORDAIN AS FOLLOWS:
SECTION 1. Addition to Palm Desert Municipal Code. Chapter 3.50 is
hereby added to Title 3 (Revenue Finance) of the Palm Desert Municipal Code and shall
read as follows:
Chapter 3.50 CANNABIS BUSINESS TAX.
3.50.010 Definitions.
A. "Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis
indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin,
whether crude or purified, extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin.
"Cannabis" also means the separated resin, whether crude or purified, obtained from
cannabis. "Cannabis" does not include the mature stalks of the plant, fiber produced from
the stalks, oil or cake made from the seeds of the plant, any other compound,
manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is
incapable of germination. For the purpose of this division, "cannabis" does not mean
"industrial hemp" as defined by Section 11018.5 of the California Health and Safety Code.
B. "Cannabis business" means any business, organization or facility,
regardless of form, whether operating for profit or not for profit, that cultivates, possesses,
manufactures, distributes, processes, stores, laboratory tests, packages, labels, delivers,
and/or sells cannabis and/or cannabis products. "Cannabis business" does not include
personal medical or adult cannabis cultivation authorized by State law or this Code. A
cannabis business shall not be considered to be a religious, social, or charitable
organization exempt from the payment of business taxes under this Chapter.
C. "Cannabis cultivation" means the seeding, planting, watering, warming,
cooling, growing, harvesting, drying, curing, grading or trimming of cannabis.
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RESOLUTION NO. 2018-61
D. "Cannabis distribution" means an entity engaged in the business of
purchasing cannabis from a cultivator, or cannabis products from a manufacturer, for sale
to a dispensary, excluding delivery as part of a retail sale.
E. "Cannabis manufacturing" means the process of compounding, blending,
extracting, infusing, or otherwise making or preparing a cannabis product.
F. "Cannabis product" means cannabis that has undergone a process
whereby the raw agricultural product has been transformed into a concentrate, an edible
product, or a topical product.
G. "Cannabis retail" means any cannabis business activity involving the retail
sale to customers of cannabis and/or cannabis products, either individually or in any
combination; for any purpose. "Cannabis retail" shall include cannabis delivery to a
customer as part of a retail sale.
H. "City" means the City of Palm Desert.
I. "Engaged in a cannabis business" means the commencing, conducting,
operating, managing or carrying on of a cannabis business and the exercise of corporate,
franchise or other business powers, whether done as owner, or by means of an officer,
agent, manager, employee, or other representative, within the City, whether operating
from a fixed location within the City or coming into the City from an outside location to
engage in cannabis business activities. By way of example, a person shall be deemed
"engaged in cannabis business" within the City if such person or the person's officer,
agent, manager, employee, or other representative acting on behalf of such person:
1. Maintains a fixed place of cannabis business within the City;
2. Owns, leases, or otherwise has the legal right to occupy real property
within the City for cannabis business purposes;
3. Regularly maintains a stock of tangible personal property within the
City in the ordinary course of cannabis business;
4. Performs work or renders cannabis business services to other
cannabis businesses or to retail cannabis customers located within the City.
J. "Gross receipts" means the total amount of monetary consideration actually
received or receivable by a cannabis business for providing, at wholesale or retail,
cannabis and/or cannabis products, for which a charge is made or credit allowed
including, but not limited to: membership dues, the value of monetary and in -kind
contributions, payments, reimbursement of fees or cultivation, processing, distribution,
delivery, retail, storing, exchanging, processing, delivery, making available, or
transmitting of cannabis or cannabis products, any payments made, and anything else of
value obtained by a cannabis business. Included in "gross receipts" shall be all receipts,
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RESOLUTION NO. 2018-61
cash, credits, and property of any kind without deduction of the cost of the property sold,
the cost of the materials used, labor or service costs, interest paid or payable, or losses
or other expenses whatsoever. Gross receipts shall not include the following:
1. Cash discounts where allowed and taken on sales;
2. Sales or other applicable state or local tax required by law to be
added to the purchase price of cannabis or cannabis products and collected from the
purchaser;
3. Such part of the sales price of any property returned by purchasers
to the seller as refunded by the seller by way of cash or credit allowances or return of
refundable deposits previously included in gross receipts; or
4. Whenever there are included within gross receipts amounts which
reflect sales for which credit is extended and such amount proved uncollectable in a
subsequent year, those amounts may be excluded from gross receipts in the year they
prove to be uncollectable, provided, however, if all or any portion of such amounts
excluded as uncollectible are subsequently collected they shall be included in gross
receipts for the period when they are recovered.
K. "Person" means any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or
any other group or combination acting as a unit, and the plural as well as the singular.
L. "Space utilized in connection with the cultivation of cannabis" means any
space or ground, floor, or other surface area (whether horizontal or vertical) that is used
for cannabis germination, seeding, vegetation, pre -flowering, flowering, and harvesting;
including without limitation activities such as growing, planting, lighting, warming, cooling,
aerating, fertilizing, watering, irrigating, topping, pinching, cropping, curing, or drying
cannabis, as well as storing any products, supplies or equipment related to any such
activities, no matter where such storage may take place or such storage space may be
located.
M. "State" means the State of California.
N. "Tax Administrator" means the City's Director of Finance, or designee.
3.50.020 Purpose of Tax.
The purpose of this general tax is to establish a tax on cannabis businesses, the
proceeds of which will be used for any unrestricted general revenue purposes which can
and may include police protection, fire and paramedic services, street operations and
maintenance, library services, parks and recreation services, and other general municipal
services to the public.
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3.50.030 Imposition of Tax.
A. Every person engaged in a cannabis business within the City of Palm
Desert, and regardless of whether such business has a permit pursuant to Chapters
5.101, 25.16, 25.18, 25.34 or any other provision of this Code, shall pay the following
cannabis business tax:
1. Up to a maximum of twenty dollars ($20) per square foot of space utilized
in connection with the cannabis cultivation businesses, subject to adjustment by the City
Council pursuant to Section 3.50.050.
2. Up to a maximum of three (3) cents for each $1.00 of gross receipts, or a
fractional part thereof, for cannabis manufacturing businesses, subject to adjustment by
the City Council pursuant to Section 3.50.050.
3. Up to a maximum of fifteen (15) cents for each $1.00 of gross receipts, or a
fractional part thereof, for cannabis retail businesses, subject to adjustment by the City
Council pursuant to Section 3.50.050.
B. No cannabis business shall be deemed to be exempt from the payment of
the taxes identified above by any other provision of this Code, unless expressly exempted
under this Chapter.
C. In the event that the City allows a cannabis retailer, cultivator, manufacturer,
the business shall pay the cultivation square footage tax, if applicable, in addition, if
applicable, to the highest business tax rate for any class that applies to that cannabis
business, unless the cannabis business identifies to the City, by reasonable and verifiable
standards, the portions of its activities that are tied to cannabis retail and those that are
tied to manufacturing, through the cannabis business' books and records kept in the
regular course of business, and in accordance with generally accepted accounting
principles, and not specifically created and maintained for tax purposes. The cannabis
business has the burden of proving the proper apportionment of taxes under this
subsection (C).
3.50.040 Payment Obligation.
All taxpayers subject to this Chapter must pay the full tax imposed by this Chapter
regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in
this Code, except as required by California or Federal law. Failure to pay the tax shall be
subject to penalties, interest charges, and assessments as the City Council may establish
and the City may use any or all other code enforcement remedies provided in this Code.
No provision in this Code can lower the tax rate set forth in this Chapter or otherwise
reduce the amount of taxes paid hereunder unless the provision specifically states that
the reduction applies.
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3.50.050 City Council Authorization to Adjust Tax Rate and/or Methodology.
The City Council may impose the tax authorized by the Chapter at a lower rate and
may otherwise repeal or amend this Chapter without a vote of the People. However, as
required by California Constitution Article XIIC (Proposition 218), voter approval is
required for any amendment that would increase the maximum rate or methodology of
any tax levied pursuant to this Chapter. The people of the City of Palm Desert affirm that
the following actions shall not constitute an increase of the maximum rate or methodology
of the tax requiring subsequent voter approval:
A. The restoration of the rate of the tax to a rate that is no higher than the
maximum set by this voter -approved Chapter, if the City Council has previously acted to
reduce the rate of the tax;
B. An action that interprets or clarifies the methodology of the tax, or any
definition applicable to the tax, so long as interpretation or clarification (even if contrary
to some prior interpretation or clarification) is not inconsistent with the language of this
Chapter;
C. The establishment of a class of person or service that is exempt or excepted
from the tax or discontinuation of such exemption or exception; and
D. Resuming collection of the tax imposed by this Chapter, even if the City
had, for some period of time, either suspended collection of the tax or otherwise failed to
collect the tax, in whole or in part.
3.50.060 Payment of Tax Does Not Authorize Illegal Activity.
The payment of the tax required pursuant to this Chapter shall not be construed
as authorizing the conduct or continuance of any illegal business or of a legal business in
an illegal manner. Nothing in this Chapter implies or authorizes that any activity connected
with the distribution or possession of cannabis is legal unless otherwise authorized and
allowed in strict and full conformance to the provisions of this Code, including without
limitation the provisions of Chapters 5.101, 25.16, 25.18, 25.34.
3.50.070 Cannabis Cultivation/Manufacturing Tax Is Not a Sales Tax.
The tax provided for under the provisions of this Chapter is not a Sales,
Transactions or Use Tax and shall not be calculated or assessed as such. The tax
established under this Chapter shall not be separately identified or otherwise specifically
assessed or charged to any client of a cannabis business.
3.50.080 Amendments and Administration.
A. This Chapter was submitted to the voters for approval. Any amendment to
this Chapter to increase the tax above the maximum rate expressly provided in Section
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3.50.010 shall not become effective until such amendment is approved by the voters. The
voters expressly authorize the City Council to amend, modify, change, or revise any other
provision of this Chapter as the City Council deems in the best interest of the City, as set
forth in Section 3.50.050.
B. The Tax Administrator or the Tax Administrator's designee may promulgate
rules, regulations and procedures to implement and administer this Chapter to ensure the
efficient and timely collection of the tax imposed by this Chapter, including without
limitation, formulation and implementation of penalties and interest to be assessed for
failure to pay the tax as provided.
C. The Tax Administrator or the Tax Administrator's designee may annually
audit the taxes imposed by this Chapter to verify that tax revenues have been properly
expended in accordance with the law.
D. Pursuant to California Constitution Article XIIIB, the appropriation limit for
the City is increased to the maximum extent over the maximum period of time allowed
under law consistent with the revenues generated by the tax established by this Chapter.
3.50.090 Returns and Remittances.
The tax shall be due and payable as follows:
A. The tax established by this Chapter shall be collected monthly. Each person
owing tax shall prepare and file a tax return to the Tax Administrator setting out the total
amount of tax owed for the preceding calendar month during which the tax was effective.
The return shall be filed not later than the close of business on the day that is thirty (30)
calendar days following the last day of the preceding calendar month. At the time the tax
return is filed, the full amount of the tax owed for the preceding calendar month shall be
remitted to the Tax Administrator. If the due date falls on Friday, Saturday, Sunday, or a
holiday, the due date shall be the next regular business day on which City Hall is open to
the public.
B. All tax returns shall be completed on forms provided by the Director of
Finance.
C. The tax due shall be that amount due and payable from January 1, 2019 or
the first date on which the cannabis business first operated in the City, whichever date
occurred last. Tax returns and payments for all outstanding taxes owed to the City are
immediately due to the Tax Administrator upon cessation of business for any reason.
D. Whenever any payment, statement, report, request, or other
communication received by the Tax Administrator is received after the time prescribed by
this Section for the receipt thereof, but is in an envelope bearing a postmark showing that
it was mailed on or prior to the date prescribed in this Section for the receipt thereof, or
whenever the Tax Administrator is furnished substantial proof that the payment,
statement, report, request, or other communication was in fact deposited in the United
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States mail on or prior to the date prescribed for receipt thereof, the Tax Administrator
may regard such payment, statement, report, request, or other communication as having
been timely received by the close of business. If the due date falls on Friday, Saturday,
Sunday, or a holiday, the due date shall be by the close of the next regular business day
on which City Hall is open to the public.
E. Unless otherwise specifically provided under other provisions of this
Chapter, the taxes required to be paid pursuant to the Chapter shall be deemed
delinquent if not paid on or before the due date specified in Subsection A or D of this
Section.
F. The Tax Administrator is not required to send a delinquency or other notice
or bill to any person subject to the provisions of this Chapter and failure to send such
notice or bill shall not affect the validity of any tax or penalty due under the provisions of
this Chapter.
G. The Tax Administrator may waive the first and second penalties of twenty-
five percent (25%) each imposed upon any person if:
1. The person provides evidence satisfactory to the Tax Administrator that
failure to pay timely was due to circumstances beyond the control of the person and
occurred notwithstanding the exercise of ordinary care and absence of willful neglect, and
the person paid the delinquent tax and accrued interest owed the City prior to applying to
the Tax Administrator for a waiver.
2. The waiver provisions specified in this Subsection shall not apply to interest
accrued on the delinquent tax and a waiver shall be granted only once during any twenty-
four month period.
3.50.100 Failure to Pay Tax.
A. Any person who fails or refuses to pay any tax required to be paid pursuant
to the Chapter on or before the due date shall pay penalties and interest as follows:
1. A penalty equal to twenty-five percent (25%) of the amount of tax in addition
to the amount of the tax, plus interest on the unpaid tax calculated from the due date of
the tax at a rate established by resolution of the City Council; and
2. An additional penalty equal to twenty-five percent (25%) of the amount of
the tax if the tax remains unpaid for a period exceeding thirty calendar (30) days beyond
the due date, plus interest on the unpaid tax and interest on the unpaid penalties
calculated at the rate established by resolution of the City Council.
B. Whenever a check is submitted in payment of a tax and the check is
subsequently returned unpaid by the bank upon which the check is drawn, and the check
is not redeemed prior to the due date, the taxpayer will be liable for the tax amount plus
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any penalties and interest due as provided for in this Section plus any amount allowed
under State law.
C. The tax due shall be that amount due and payable from January 1, 2019 or
the first date on which the cannabis business first operated in the City, whichever date
occurred last, together with applicable penalties and interest calculated in accordance
with Subsection A of this Section.
D. The Tax Administrator may waive the first and second penalties of twenty-
five percent (25%) each imposed upon any person if:
1. The person provides evidence satisfactory to the Tax Administrator that
failure to pay timely was due to circumstances beyond the control of the person and
occurred notwithstanding the exercise of ordinary care and absence of willful neglect, and
the person paid the delinquent tax and accrued interest owed the City prior to applying to
the Tax Administrator for a waiver.
2. The waiver provisions specified in this Subsection shall not apply to interest
accrued on the delinquent tax and a waiver shall be granted only once during any twenty-
four month period.
3.50.110 Refunds.
A. No refund shall be made of any tax collected pursuant to the Chapter,
except as provided in this Section.
B. No refund of any tax collected pursuant to this Chapter shall be made
because of the discontinuation, dissolution, or other termination of a cannabis business.
C. Whenever the amount of any tax, penalty, or interest has been overpaid,
paid more than once, or has been erroneously or illegally collected or received by the City
under this Chapter, such amount may be refunded to the person who paid the tax
provided that a written claim for refund if timely filed with the Tax Administrator, pursuant
to this Code. The period for filing a claim for refund shall be one (1) year from the time
the tax was paid or erroneously or illegally collected; provided however, that in no event
shall the period to file such claim expire prior to the shortest period allowable for filing a
tax refund claim under Government Code Section 911.2. Such a claim must clearly
establish claimant's right to the refund by written records showing entitlement thereto,
and must clearly set forth the facts and legal theories under which the claimant believes
he or she has a right to a refund. Where the amount of any individual refund claim is in
excess of the amount set by ordinance or resolution of the City Council relating to the
settlement of general liability claims against the City by the Tax Administrator, City
Council approval shall be required.
D. The filing of a written claim pursuant to Government Code Section 935 is a
prerequisite to any suit thereon.
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E. The Tax Administrator shall have the right to examine and audit all of the
books and business records of the claimant in order to determine the eligibility of the
claimant to the claimed refund. No claim for refund shall be allowed if the claimant refuses
to allow such examination of claimant's books and business records after request by the
Tax Administrator to do so.
F. Any person entitled to a refund of taxes paid pursuant to this Chapter may
elect in writing to have such refund applied as a credit against a cannabis business's
taxes for the next calendar month.
G. If the Tax Administrator determines that nonpayment of any remittance due
under this chapter is due to fraud, a penalty of one hundred percent (100%) of this amount
of the tax shall be added thereto in addition to the penalties stated in this section.
H. In the event the Tax Administrator or the city has expended funds by the use
of auditor or any other individual necessary in the review and collection for such refund,
all of such costs and expenses of the city shall be deducted from the amount to be
refunded.
I. In the event that the tax was erroneously paid and the error is attributable
to the City, the amount of tax erroneously paid shall be refunded to the claimant. If the
error is attributable to the claimant, the City shall retain the amount set forth in this Chapter
to cover expenses from the amount to be refunded.
J. The Tax Administrator shall initiate a refund of any tax which has been
overpaid or erroneously collected whenever the overpayment or erroneous collection is
uncovered by the City audit of tax revenues.
3.50.120 Enforcement.
A. It shall be the duty of the Tax Administrator to enforce each and all of the
provisions of this Chapter.
B. For purposes of administration and enforcement of this Chapter generally,
the Tax Administrator, with the concurrence of the City Attorney, may from time to time
promulgate administrative rules and regulations.
C. The Tax Administrator shall have the power to audit and examine all books
and records of cannabis businesses as well as persons engaged in the operation of
cannabis businesses, including both state and federal income tax returns, California sales
tax returns, or other evidence documenting the gross receipts of or the transaction prices
charged by a cannabis business or persons engaged in the operation of a cannabis
business, for the purpose of ascertaining the amount of tax, if any, required to be paid by
the provisions of this Chapter, and for the purpose of verifying any statements or any item
thereof when filed by any person pursuant to the provisions of this Chapter. If such
cannabis business or person, after written demand by the Tax Administrator, refuses to
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make available for audit examination or verification such books, records, or equipment as
the Tax Administrator request, the Tax Administrator may, after full consideration of all
information within the Tax Administrator's knowledge concerning the cannabis business
and its business an activities of the person so refusing, make an assessment in the
manner provided in Section 3.50.130.
D. The conviction and punishment of any person for failure to pay the required
tax shall not excuse or exempt such person from any civil action for the tax debt unpaid
at the time of such conviction. No civil action shall prevent a criminal prosecution for any
violation of the provisions of this Chapter or of any State law requiring the payment of all
taxes.
E. Any person violating any of the provisions of this Chapter or any regulation
or rule passed in accordance herewith, or knowingly or intentionally misrepresenting to
any officer or employee of the City any material fact in procuring the certificate or permit
from the as provided for in this Chapter or Chapters 5.101, 25.16, 25.18, 25.34 of this
Code shall be deemed guilty of a misdemeanor.
3.50.130 Debts; Deficiencies; Assessments and Appeals.
A. The amount of any tax, penalties, and interest imposed by the provisions of
this Chapter shall be deemed a debt to the City and any person operating a cannabis
business without having paid any applicable tax, penalties, and interest shall be liable in
an action in the name of the City in any court of competent jurisdiction for the amount of
the tax, and penalties and interest imposed on such cannabis business.
B. If the Tax Administrator is not satisfied that any statement filed as required
under the provisions of this Chapter is correct, or that the amount of tax is correctly
computed, the Tax Administrator may compute and determine the amount to be paid and
make a deficiency determination upon the basis of the facts contained in the statement
or upon the basis of any information in his or her possession or that may come into his or
her possession. One or more deficiency determinations of the amount of tax due for a
period or periods may be made. When a person discontinues engaging in a cannabis
business, a deficiency determination may be made at any time within three (3) years
thereafter as to any liability arising from engaging in such business whether or not a
deficiency determination is issued prior to the date the tax would otherwise be due.
Whenever a deficiency determination is made, notice shall be given to the person
concerned in the same manner as notices of assessment are given under Subsection C,
D, and E of this Section.
C. Under any of the following circumstances, the Tax Administrator may make
and give notice of an assessment of the amount of tax owed by a person under this
Chapter.
1. If the person has not filed any statement or return required under the
provisions of this Chapter;
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2. If the person has not paid any tax due under the provisions of this Chapter;
3. If the person has not, after demand by the Tax Administrator, filed a
corrected statement or return, or furnished to the Tax Administrator adequate
substantiation of the information contained in a statement or return already filed, or paid
any additional amount of tax due under the provisions of this Chapter;
4. If the Tax Administrator determines that the nonpayment of any tax due
under this Chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount
of the tax shall be added thereto in addition to penalties and interest otherwise stated in
this Chapter.
5. The notice of assessment shall separately set forth the amount of any tax
known by the Tax Administrator to be due or estimated by the Tax Administrator, after
consideration of all information within the Tax Administrator's knowledge concerning the
business and activities of the person assessed, to be due under each applicable section
of this Chapter, and shall include the amount of any penalties or interest accrued on each
amount to the date of the notice of assessment.
D. The notice of assessment shall be served upon the person either by
handing it to him or her personally, or by a deposit of the notice in the United States mail,
postage prepaid thereon, addressed to the person at the address of the location of the
cannabis business appearing on the face of the business license issued under Chapter
5.04 of this Code, or to such other address as he or she shall register with the Tax
Administrator for the purpose of receiving notices provided under this Chapter or Chapter
5.04; or, should the person have no business license issued and should the person have
no address registered with the Tax Administrator for such purpose then to such person's
last known address. For the purposes of this section, a service by mail is complete at the
time of deposit in the United States mail.
E. Within ten (10) days after the date of service the person may apply in writing
to the Tax Administrator for a hearing on the assessment. If application for a hearing
before the City is not made within the time herein prescribed, the tax assessment by the
Tax Administrator shall become final and conclusive. Upon receipt of any such
application for hearing, the Tax Administrator shall cause the matter to be set for hearing
before a hearing officer. At such hearing said applicant may appear and offer evidence
why the assessment as made by the Tax Administrator should not be confirmed and fixed
as the tax due. Based upon the submission of such evidence and the review of the City's
files, the hearing officer shall issue a written notice and order upholding, modifying or
reversing the determination from which the appeal is taken. The notice shall be given
within fourteen (14) calendar days after the conclusion of the hearing and shall state the
reasons for the decision. The notice shall specify that the decision is final and that any
petition for judicial review shall be filed within ninety (90) calendar days from the date of
the decision in accordance with Code of Civil Procedure Section 1094.6. If the hearing
officer fails or refuses to act on an appeal within the fourteen (14) calendar day period,
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the appeal shall be deemed to have been denied by the hearing officer on the fifteenth
(15) calendar day.
3.50.140 No Injunction/Writ of Mandate.
No injunction or writ of mandate or other legal or equitable process shall issue in
any suit, action, or proceeding in any court against this City or against any officer of the
City to prevent or enjoin the collection under this Chapter of any tax or any amount of tax
required to be collected and/or remitted.
3.50.150 Future Amendment to Cited Statute.
Unless specifically provided otherwise, any reference to a state or federal statute
in this Chapter shall mean such statute as it may be amended from time to time; provided,
that such reference to a statute herein shall not include any subsequent amendment
thereto, or to any subsequent change of interpretation thereto by a state or federal agency
or court of law, to the extent that such amendment or change of interpretation would
require voter approval under California law, or to the extent that such change would result
in a tax decrease. Only to the extent voter statute (or interpretation) shall remain
applicable. For any application or situation that would not require voter approval or would
not result in a decrease of a tax, provisions of the amended statute (or new interpretation)
shall be applicable to the maximum possible extent. To the extent that the City's
authorization to collect or impose any tax imposed under this Chapter is expanded or
limited as a result of changes in state or federal law, no amendment or modification of
this Chapter shall be required to conform the tax to those changes, and the tax shall be
imposed and collected to the full extent of the authorization up to the full amount of the
tax imposed under this Chapter.
SECTION 2. Effective Date. Pursuant to the California Constitution Article
XIIIC(2)(b) and California Elections Code 9217, if a majority of the qualified voters voting
in the election on Measure " " vote in favor of the adoption of such measure, this
ordinance shall be deemed valid and binding and shall be considered as adopted upon
the date that the vote is declared by the City Council, and shall go into effect ten (10) days
after that date.
SECTION 3. Severabilitv. If any section, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional by a decision of the court
of competent jurisdiction, such decision shall not affect the validity of the remaining
provisions of this ordinance. The People of the City of Palm Desert hereby declare that
they would have adopted this ordinance and each section, sentence, clauses, or phrases
be declared invalid or unconstitutional.
SECTION 4. Certification/Summarv. Following the City Clerk's certification
that the citizens of Palm Desert have approved this Ordinance, the Mayor shall sign this
Ordinance and the City Clerk shall cause the same to be entered in the book or original
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ordinance of said City; and shall cause the same, or a summary thereof, to be published
as required by law.
PASSED, APPROVED, and ADOPTED by the People of the City of Palm Desert,
California this 6th day of November, 2018.
SABBY JONATHAN, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
APPROVED AS TO FORM:
ROBERT W. HARGREAVES, CITY ATTORNEY
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