HomeMy WebLinkAboutRES 22-7331 (CANNABIS TAX-CALLING ELECTION)CITY OF HERMOSA BEACH
RESOLUTION NO. 22-7331
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING FOR THE PLACEMENT OF A MEASURE
ON THE BALLOT FOR THE NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF AN ORDINANCE ADDING CHAPTER 3.48 TO TITLE 3 (REVENUE AND FINANCE) OF THE HERMOSA BEACH MUNICIPAL CODE, ESTABLISHING A LOCAL BUSINESS TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF HERMOSA BEACH AND REQUESTING THE BOARD OF SUPERVISORS RENDER THE ELECTION CONSOLIDATION SERVICES
ADOPTED IN RESOLUTION NO. 22-7317 FOR THIS MEASURE WHEREAS, pursuant to California Government Code sections 37100.5 and
37101, the City of Hermosa Beach has the authority to establish a local business
tax upon cannabis businesses that engage in business in the City; and
WHEREAS, pursuant to Section 9222 of the California Elections Code, the City Council has authority to place propositions on the ballot to be considered at
a Municipal Election; and
WHEREAS, the City Council desires to submit to the voters an ordinance
establishing both (i) a maximum 10% local general tax on the gross receipts
received by any cannabis business through its operations and/or manufacturing;
and (ii) a maximum $20.00 per square foot local general tax on the space utilized
at such a business for cannabis cultivation; and
WHEREAS, the proposed cannabis business tax is a general tax the proceeds
of which would be deposited into the City's general fund and which would pay
for important City services such as law enforcement, street operations and
maintenance, library services, parks and recreation services and 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, the next regularly scheduled general election at which City
Council members are to be elected is November 8, 2022; and
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WHEREAS, pursuant to Government Code section 53724 (“Proposition 62”),
a two-thirds (2/3) vote of all members of the City Council is required to place the
Measure on the November 8, 2022 ballot; and
WHEREAS, the specific terms relating to the cannabis business tax are
provided for in the ordinance to be considered by the qualified voters, attached
hereto as Exhibit "B" (the "Ordinance" or "Measure") and by this reference made
an operative part hereof, and in accordance with all applicable laws.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. Incorporation of Recitals. The foregoing recitals are true and
correct and are hereby incorporated and made an operative part of this
Resolution. SECTION 2. Submission of Ballot Measure. The City Council, pursuant to its
right and authority as contained in California Propositions 62 and 218 and
Elections Code section 9222, by a two-thirds vote of all members, hereby orders
the Ordinance attached hereto as Exhibit "A" to be submitted to the qualified
voters of the City at the General Municipal Election to be held on Tuesday, November 8, 2022. The proposed Ordinance shall be in the form attached hereto
as Exhibit "B" to this Resolution and is incorporated by this reference as if fully set
forth herein.
SECTION 3. Ballot Measure. The City Council, pursuant to its right and
authority, does hereby order that the Measure shall be presented and printed
upon the ballot submitted to the qualified voters in the manner and form set forth
in this Section 3. On the ballot to be submitted to the qualified voters at the
Regular Municipal Election to be held on Tuesday, November 8, 2022, in addition
to any other matters required by law, there shall be printed substantially the
following:
Shall an ordinance be adopted enacting a local Yes business tax on cannabis/hemp businesses up to $20.00
per square foot for cultivation and up to 10% of gross
receipts for all other cannabis/hemp businesses,
estimated to generate $700,000 - $1,500,000 annually
(assuming two retail stores operating and taxed at No
maximum rate), until ended by voters, for general
governmental use, subject to independent audits, to be
effective only if cannabis business operations are
allowed in the City?
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SECTION 4. Conduct of Election. The City Clerk is authorized, instructed, and
directed to procure and furnish any and all official ballots, printed matter and all
supplies, equipment and paraphernalia that may be necessary in order to
properly and lawfully conduct the election. In all particulars not recited in this
Resolution, the election shall be held and conducted as provided by law for
holding municipal elections.
SECTION 5. Notice of the Election. Notice of the election is hereby 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.
SECTION 6. Placement on the Ballot. The full text of the Measure shall not be
printed in the Sample Ballot Booklet, and a statement shall be printed on the
ballot pursuant to Section 9223 of the Elections Code advising voters that they
may obtain a copy of this Ordinance/Measure at no cost, upon request made to
the City Clerk.
SECTION 7. Consolidation with Los Angeles County. The City of Hermosa
Beach respectfully requests that the election consolidation services, outlined in
Resolution No. 22-7317, attached hereto as “Exhibit A,” include this measure.
SECTION 8. Filing with County. The City Clerk shall, not later than the 88th
day prior to the General Municipal Election to be held on Tuesday, November 8,
2022, file with the Los Angeles Registrar-Recorder/County Clerk a certified copy
of this Resolution and enter it into the book of original resolutions, including the
Ordinance/Measure attached hereto as Exhibit "B.”
SECTION 9. Public Examination. Pursuant to California Elections Code
section 9295, this Measure will be available for public examination for no fewer
than ten (10) calendar days prior to being submitted for printing in the voter
information guide. The Clerk shall post notice in the Clerk's office of the specific
dates that the examination period will run.
SECTION 10. 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 11. Severability. 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
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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 12. Effective Date of Resolution. This Resolution shall take effect
immediately upon its adoption.
SECTION 13. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED AND ADOPTED by the City Council of the City of
Hermosa Beach, California, at a regular meeting held on this 26th day of July,
2022.
Michael Detoy PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA
ATTEST: APPROVED AS TO FORM:
Myra Maravilla Michael Jenkins
City Clerk City Attorney
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Exhibit “A”
Resolution No. 7317 - Requesting Consolidation Services From
Los Angeles County
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CITY OF HERMOSA BEACH RESOLUTION 22-7317
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,
CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY
OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION
TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL
ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;
TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS
ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL
ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY
CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE
CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID
GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS
CODE SECTION 10403
WHEREAS, a General Municipal Election has been called by the City of
Hermosa Beach to be held in the City of Hermosa Beach on November 8, 2022;
and,
WHEREAS, a Statewide General Election to be held in the County of Los
Angeles has been or will be called to be held on November 8, 2022; and,
WHEREAS, it is desired, pursuant to the authority found in California
Elections Code section 10403, to consolidate said General Municipal Election
with said Statewide General Election to be held in the County of Los Angeles;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Hermosa Beach as follows:
SECTION 1: The Board of Supervisors of the County of Los Angeles is hereby
respectfully requested to order the consolidation of said General Municipal
Election to be held on November 8, 2022, with the Statewide General Election to
be held in the County of Los Angeles on November 8, 2022.
SECTION 2: The Board of Supervisors of the County of Los Angeles is hereby
further respectfully requested to place upon the same ballot as that provided
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for said Statewide General Election to be held in the County of Los Angeles on
November 8, 2022, the names of the candidates for the offices of
Councilmember, Full Term
Councilmember, Full Term
Councilmember, Full Term
to be submitted to the electors of the City of Hermosa Beach at said
General Municipal Election.
SECTION 3: The City of Hermosa Beach acknowledges that the
consolidated election will be held and conducted in the manner prescribed in
Section 10418 of the California Elections Code.
SECTION 4: The Registrar-Recorder/County Clerk of the County of Los
Angele acknowledges that an estimate was given to the City of Hermosa Beach
on the costs of the consolidated election. Should the costs exceed twenty
percent of the estimation, the Registrar-Recorder/County Clerk of the County of
Los Angele will notify the City of Hermosa Beach in writing.
SECTION 5: The Board of Supervisors of the County of Los Angeles is hereby
authorized and respectfully requested to canvass the returns of said General
Municipal Election.
SECTION 6: The Board of Supervisors of the County of Los Angeles is hereby
authorized and respectfully requested to authorize and permit the Registrar-
Recorder/County Clerk of the County of Los Angeles to:
a) Print and supply ballots for said City of Hermosa Beach General
Municipal Election;
b) Mail the City’s sample ballots and candidate statements of
qualifications to the electors of the City of Hermosa Beach as part of the same
material that will be mailed to the voters of the Statewide General Election to be
held in the County of Los Angeles;
c) Perform such other services as may be required for the consolidation
and conduct of said City of Hermosa Beach General Municipal Election with said
Statewide General Election to be held in the County of Los Angeles.
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SECTION 7: The vote centers for the election shall be open as required
during the identified voting period pursuant to California Elections Code sections
4007 and 14401.
SECTION 8: The City shall reimburse the County of Los Angeles in full for the
services performed on behalf of the City upon the presentation of a bill by the
County.
SECTION 9: The City Clerk is hereby directed to deliver a certified copy of
this resolution to the Board of Supervisors of the County of Los Angeles and to
transmit an electronic copy to the Board of Supervisors and the Registrar-
Recorder/County Clerk of the County of Los Angeles.
PASSED, APPROVED and ADOPTED this 14th day of June 2022.
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA
ATTEST: APPROVED AS TO FORM:
Myra Maravilla Michael Jenkins
City Clerk City Attorney
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State of California ) County of Los Angeles ) ss
City of Hermosa Beach )
June 16, 2022
Certification of Council Action
RESOLUTION NO. 22-7317
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,
CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY
OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION
TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL
ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;
TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS
ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL
ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY
CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE
CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID
GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS
CODE SECTION 10403
I, Myra Maravilla, City Clerk of the City of Hermosa Beach do hereby certify that
the above and foregoing Resolution 22-7317 was duly approved and adopted
by the City Council of said City at its regular meeting thereof held on the
14th day of June, 2022 and passed by the following vote:
AYES: MAYOR DETOY, MAYOR PRO TEMPORE JACKSON, COUNCILMEMBERS
ARMATO, CAMPBELL, MASSEY
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
Myra Maravilla
City Clerk
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EXHIBIT "B"
Chapter 3.48 Cannabis Business Tax Ordinance
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CITY OF HERMOSA BEACH
ORDINANCE NO. 22-
AN ORDINANCE OF THE PEOPLE OF THE CITY OF HERMOSA BEACH, CALIFORNIA, ADDING CHAPTER 3.48 (CANNABIS BUSINESS TAX) TO
TITLE 3 (REVENUE AND FINANCE) OF THE HERMOSA BEACH MUNICIPAL CODE ESTABLISHING A TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF HERMOSA BEACH
NOW THEREFORE, THE PEOPLE OF THE CITY OF HERMOSA BEACH DO ORDAIN AS FOLLOWS:
SECTION 1. Subject to the approval of a majority of the voters of the City of
Hermosa Beach at the Regular Municipal Election so designated by the City
Council in a separate resolution placing the proposal on the ballot for such
election, Chapter 3.48 (Cannabis Business Tax) is hereby added to Title 3
(Revenue and Finance) of the Hermosa Beach Municipal Code to read as follows:
"Chapter 3.48 CANNABIS BUSINESS TAX
3.48.010 Title.
3.48.020 Authority and purpose.
3.48.030 Intent.
3.48.040 Definitions.
3.48.050 Tax imposed.
3.48.060 Registration, reporting, and remittance of tax.
3.48.070 Payments and communications — timely remittance.
3.48.080 Payment — when taxes deemed delinquent.
3.48.090 Notice not required by City.
3.48.100 Penalties and interest. 3.48.110 Refunds and credits.
3.48.120 Refunds and procedures.
3.48.130 Personal cultivation not taxed.
3.48.140 Administration of the tax. 3.48.150 Appeal procedure.
3.48.160 Enforcement — action to collect.
3.48.170 Apportionment.
3.48.180 Constitutionality and legality.
3.48.190 Audit and examination of premises and records.
3.48.200 Other licenses, permits, taxes or charges.
3.48.210 Payment of tax does not authorize unlawful business.
3.48.220 Deficiency determinations. 3.48.230 Failure to report — nonpayment, fraud.
3.48.240 Tax assessment — notice requirements.
3.48.250 Tax assessment — hearing, application, and determination.
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3.48.260 Conviction for violation — taxes not waived.
3.48.270 Violation deemed misdemeanor.
3.48.280 Severability.
3.48.290 Remedies cumulative.
3.48.300 Amendment or repeal.
3.48.010 Title.
This ordinance shall be known as the Cannabis Business Tax Ordinance.
3.48.020 Authority and Purpose.
The purpose of this Ordinance is to adopt a tax, for revenue purposes,
pursuant to Sections 37101 and 37100.5 of the California Government Code, upon
cannabis businesses that engage in business in the City. The Cannabis Business
Tax is levied based upon business gross receipts except for commercial cannabis
or industrial hemp cultivation which shall be taxed on square footage. It is not a
sales and use tax, a tax upon income, or a tax upon real property. The Cannabis
Business Tax is a general tax enacted solely for unrestricted general governmental
purposes of the City and not for specific purposes. All of the proceeds from the
tax imposed by this chapter shall be placed in the City's general fund and be
available for any lawful municipal purpose. The tax established under this Chapter
shall not be separately identified or otherwise specifically assessed or charged to
any customer or client of a cannabis business.
3.48.030 Intent.
The intent of this Ordinance is to levy a tax on all cannabis or industrial
hemp businesses that operate in the City, regardless of whether such business
would have been legal at the time this chapter was adopted. Nothing in this
chapter shall be interpreted to authorize or permit any business activity that
would not otherwise be legal or permissible under laws applicable to the activity
at the time the activity is undertaken. 3.48.040 Definitions.
The following words and phrases shall have the meanings set forth below
when used in this chapter:
A. "Business" shall include all activities engaged in or caused to be
engaged in within the City, including any commercial or industrial enterprise,
trade, profession, occupation, vocation, calling, or livelihood, whether or not
carried on for gain or profit, but shall not include the services rendered by an
employee to his or her employer.
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year.
B. "Calendar year" means January 1 through December 31, of the same
C. "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" shall not include "industrial hemp,"
unless otherwise specified.
D. "Cannabis product" means raw cannabis that has undergone a
process whereby the raw agricultural product has been transformed into a
concentrate, an edible product, or a topical product. "Cannabis product" also
means cannabis products as defined by Section 11018.1 of the California Health
and Safety Code and is not limited to medicinal cannabis products.
E. "Canopy" means all areas occupied by any portion of a cannabis or
industrial hemp plant whether contiguous or noncontiguous on any one site.
When plants occupy multiple horizontal planes (as when plants are placed on
shelving above other plants) each plane shall be counted as a separate canopy
area.
F. "Cannabis business" means any business involving cannabis or
industrial hemp, including but not limited to cultivating, transporting, distributing,
manufacturing, compounding, converting, processing, preparing, storing,
packaging, delivering, testing, dispensing, retailing and wholesaling of cannabis,
cannabis products, industrial hemp, industrial hemp products or of ancillary
products and accessories, whether or not carried on for gain or profit.
G. "Cannabis business tax" or "business tax," means the tax due pursuant
to this chapter for engaging in a cannabis business in the City.
H. "Commercial cannabis cultivation" means cultivation of cannabis or
industrial hemp undertaken in the course of conducting a cannabis business.
I. "Commercial cannabis permit" means a permit issued by the City to
a person to authorize that person to operate or engage in a cannabis business
within the City.
J. "Cultivation" means any activity involving the planting, growing,
harvesting, drying, curing, grading, or trimming of cannabis or industrial hemp and
includes, but is not limited to, the operation of a nursery.
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K. "Employee" means each and every person engaged in the
operation or conduct of any business, whether as owner, member of the owner's
family, partner, associate, agent, manager or solicitor, and each and every other
person employed or working in such business for a wage, salary, commission,
barter or any other form of compensation.
L. "Engaged in a cannabis business" means the commencing,
conducting, operating, managing or carrying on of a cannabis business, whether
done as owner, or by means of an officer, agent, manager, employee, or
otherwise, whether operating from a fixed location in the City or coming into the
City from an outside location to engage in such activities. A person shall be
deemed engaged in business within the City if:
1. Such person or person's employee maintains a fixed place of
business within the City for the benefit or partial benefit of such person;
2. Such person or person's employee owns or leases real property
within the City for business purposes;
3. Such person or person's employee regularly maintains a stock
of tangible personal property in the City for sale in the ordinary course of
business;
4. Such person or person's employee regularly conducts
solicitation of business within the City; or
5. Such person or person's employee performs work or renders
services in the City.
The foregoing specified activities shall not be a limitation on the meaning
of "engaged in business."
M. "Evidence of doing business" means evidence such as, without
limitation, use of signs, circulars, cards or any other advertising media, including
the use of internet or telephone solicitation, or representation to a government
agency or to the public that such person is engaged in a cannabis business in the City.
N. "Gross Receipts," except as otherwise specifically provided, means,
whether designated a sales price, royalty, rent, slotting fee, commission, dividend,
or other designation, the total amount (including all receipts, cash, credits,
services and property of any kind or nature) received or payable for sales of
goods, wares or merchandise, or for the performance of any act or service of any
nature for which a charge is made or credit allowed (whether such service, act
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or employment is done as part of or in connection with the sale of goods, wares,
merchandise or not), without any deduction therefrom on account of the cost of
the property sold, the cost of materials used, labor or service costs, interest paid
or payable, losses or any other expense whatsoever. However, the following shall
be excluded from Gross Receipts:
1. Cash discounts where allowed and taken on sales;
2. Any tax required by law to be included in or added to the
purchase price and collected from the consumer or purchaser;
3. Such part of the sale 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;
4. Receipts derived from the occasional sale of used, obsolete
or surplus trade fixtures, machinery or other equipment used by the
taxpayer in the regular course of the taxpayer's business;
5. Cash value of sales, trades or transactions between
departments or units of the same business located in the City of Hermosa
Beach or if authorized by the Tax Administrator in writing in accordance
with section 3.48.140(B);
6. Whenever there are included within the gross receipts
amounts which reflect sales for which credit is extended and such amount
proved uncollectible in a subsequent year, those amounts may be
excluded from the gross receipts in the period they prove to be
uncollectible; provided, however, if the whole or portion of such amounts
excluded as uncollectible are subsequently collected they shall be
included in the amount of gross receipts for the period when they are
recovered;
7. Receipts of refundable deposits, except that such deposits
when forfeited and taken into income of the business shall not be excluded;
8. Amounts collected for others where the business is acting as
an agent or trustee and to the extent that such amounts are paid to those
for whom collected. These agents or trustees must provide the Tax
Administrator with the names and the addresses of the others and the
amounts paid to them. This exclusion shall not apply to any fees,
percentages, or other payments retained by the agent or trustees;
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9. Retail sales of t-shirts, sweaters, hats, stickers, key chains, bags,
books, posters, rolling papers, cannabis accessories such as pipes, pipe
screens, vape pen batteries (without cannabis or industrial hemp) or other
personal tangible property which the Tax Administrator has excluded in
writing by issuing an administrative ruling per Section 3.48.140 shall not be
subject to the cannabis business tax under this chapter. However, any
business activities not subject to this chapter as a result of an administrative
ruling shall be subject to the appropriate business tax provisions of Title 3 or
any other Title or Chapter of this code as determined by the Tax
Administrator.
O. "Industrial hemp" means a crop that is limited to types of the plant
Cannabis sativa L. having no more than three-tenths of 1 percent
tetrahydrocannabinol (THC) contained in the dried flowering tops, whether
growing or not; the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation
of the plant, its seeds or resin produced therefrom.
P. "Industrial hemp products" "Industrial hemp products" means any raw
hemp that has undergone a process whereby the raw agricultural product has
been transformed into a concentrate, an edible product, or a topical product.
"Hemp product" also means hemp products as defined by Section 11018.5 of the
California Health and Safety Code.
Q. "Nursery" means a facility or part of a facility that is used only for
producing clones, immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of cannabis or industrial
hemp industrial hemp.
R. "Person" means an 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, whether
organized as a nonprofit or for-profit entity, and includes the plural as well as the
singular number.
S. "Processing" means a cultivation site that conducts only trimming,
drying, curing, grading, packaging, or labeling of cannabis, industrial hemp and
non-manufactured cannabis products.
T. “Retail Sale,” "Sale," "Sell" and "to sell" means and includes any retail
sale, exchange, or barter. It shall also mean any transaction whereby, for any
consideration, title to cannabis, cannabis products, industrial hemp and/or
industrial hemp products are transferred from one person to another and includes
the delivery of cannabis, cannabis products, industrial hemp and/or industrial
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hemp products pursuant to an order placed for the purchase of the same, but
does not include the return of cannabis, cannabis products, industrial hemp
and/or industrial hemp products to the licensee from whom the cannabis,
cannabis product, industrial hemp and/or industrial hemp product was
purchased.
U. "State" means the State of California.
V. "State license," "license," or "registration" means a state license issued
pursuant to California Business & Professions Code Section 26050, and all other
applicable state laws, required for operating a cannabis business.
W. "Tax Administrator" means the Director of Finance of the City of
Hermosa Beach or his or her designee.
X. "Testing Laboratory" means a cannabis business that (i) offers or
performs tests of cannabis, cannabis products, industrial hemp and/or industrial
hemp products (ii) offers no service other than such tests, (iii) sells no products,
excepting only testing supplies and materials, (iv) is accredited by an
accrediting body that is independent from all other persons involved in the
cannabis industry in the state and (v) is registered with the Bureau of Cannabis
Control or other state agency.
3.48.050 Tax Imposed.
A. Beginning January 1, 2023, there is imposed upon each person who
is engaged in business as a cannabis business a cannabis business tax. Such tax
is payable regardless of whether the business has been issued a business license
or commercial cannabis permit to operate lawfully in the City or is operating
unlawfully. The City's acceptance of a cannabis business tax payment from a
cannabis business operating illegally shall not constitute the City's approval or
consent to such illegal operations.
B. The maximum rate of the cannabis business tax shall be calculated
as follows:
1. For every person engaged in commercial cannabis cultivation,
including cultivation of industrial hemp, in the City, the maximum rate shall
be Twenty dollars ($20.00) per square foot of canopy space used for
cultivation or nursery.
a. On January 1, 2024 and on each January 1 thereafter,
the maximum tax rate specified above shall increase by the
percentage increase in the Consumer Price Index ("CPI") for all urban
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consumers in the Los Angeles-Long Beach-Anaheim area as
published by the United States Government Bureau of Labor Statistics
or three percent (3%) whichever is greater.
2. For every person engaged in the operation of a testing
laboratory, retail sales, distribution, manufacturing and/or processing for
cannabis, cannabis products, industrial hemp and/or industrial hemp
products, or any other type of cannabis business not described in this section 3.48.050 said person shall be subject to the maximum tax rate not
to exceed ten percent (10%) of gross receipts generated by that
cannabis business activity.
C. Persons subject to the cannabis business tax shall register with the City
and pay the registration fee pursuant to Section 3.48.060. They shall also be
required to obtain a business license pursuant to Title 5 of this code; provided,
however, that cannabis business activities subject to the cannabis business tax
shall be excluded from determining the amount of any business license tax
payable under Title 5.
D. The rates set forth above may be adjusted by the City Council from
time to time as more particularly described in Section 3.48.300, by ordinance or
resolution, subject to the maximum rates set forth in subparagraph (B) above.
3.48.060 Registration, reporting and remittance of tax.
A. Registration of Cannabis Business. All cannabis businesses shall be
required to annually register as follows:
1. All persons engaging in business as a cannabis business,
whether an existing, newly established or acquired business shall register with
the Tax Administrator upon receipt of any other required entitlements from
the City and prior to commencing operation and shall annually renew such
registration on or prior to the annual anniversary of the registration each year
thereafter. In registering, such persons shall furnish to the Tax Administrator a
sworn statement, upon a form provided by the Tax Administrator, setting forth
the following information:
a. The name of the business;
b. The names and addresses of each owner;
c. The exact nature or kind of business;
d. The place where such business is to be carried on; and
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e. Any additional information which the Tax Administrator
may require.
B. An annual registration fee in an amount determined by resolution
of the City Council shall be presented with the sworn statement submitted under
this section. This fee shall not be considered a tax and shall be in such amount
as to only recover the City’s actual cost of processing registration and
enforcement.
C. The cannabis business tax imposed by this chapter shall be paid, in
arrears, on a monthly basis. Each person owing a cannabis business tax each
calendar month shall, no later than the fifteenth day following the close of the
calendar month, file with the Tax Administrator a statement ("tax statement") of
the tax owed for that calendar month and the basis for calculating that tax. The
Tax Administrator may require that the tax statement be submitted on a form
prescribed by the Tax Administrator. The tax for each calendar month shall be
due and payable on that same date that the tax statement for the calendar
month is due.
D. Upon cessation of a cannabis business, tax statements and
payments shall be immediately due for all calendar months up to the calendar
month during which cessation occurred.
E. The Tax Administrator may, at his or her discretion, establish
alternative reporting and payment periods for any taxpayer as the Tax
Administrator deems necessary to ensure effective collection of the cannabis
business tax. The Tax Administrator may also require that a deposit, to be applied
against the taxes for a calendar month, be made by a taxpayer at the beginning
of that calendar month. In no event shall the deposit required by the Tax
Administrator exceed the tax amount he or she projects will be owed by the
taxpayer for the calendar month. The Tax Administrator may require that a
taxpayer make payments via a cashier's check, money order, wire transfer, or
similar instrument.
3.48.070 Payments and communications - timely remittance.
Whenever any payment, statement, report, request or other
communication is due, it must be received by the Tax Administrator or
postmarked on or before the final due date. If the due date would fall on a
Friday, Saturday, Sunday, or a holiday observed by the City, the due date shall
be the next regular business day on which the City is open to the public.
3.48.080 Payment - when taxes deemed delinquent.
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Unless otherwise specifically provided under other provisions of this
chapter, the taxes required to be paid pursuant to this chapter shall be deemed
delinquent if not received by the Tax Administrator on or before the due date as
specified in Sections 3.48.060 and 3.48.070.
3.48.090 Notice not required by the City.
The City may as a courtesy send a tax notice to the cannabis business
which owes the City a cannabis business tax. However, 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. Failure to send such notice or bill shall not affect
the validity of any tax or penalty due under the provisions of this chapter.
3.48.100 Penalties and interest.
A. Any person who fails or refuses to pay any cannabis business tax
required to be paid pursuant to this chapter on or before the due date shall pay
penalties and interest as follows:
1. A penalty equal to ten percent (10%) of the amount of the tax,
in addition to the amount of the tax, plus interest on the unpaid tax
calculated from the due date of the tax at the rate of one percent (1.0%)
per month.
2. If the tax remains unpaid for a period exceeding one calendar
month beyond the due date, an additional penalty equal to twenty-five
percent (25%) of the amount of the tax, plus interest at the rate of one
percent (1.0%) per month on the unpaid tax and on the unpaid penalties
3. Interest shall be applied at the rate of one percent (1.0%) per
month on the first day of the month for the full month and will continue to
accrue monthly on the tax and penalty until the balance is paid in full.
B. Whenever a check or electronic payment is submitted in payment of
a cannabis business tax and the payment is subsequently returned unpaid by the
bank for any reason, the taxpayer will be liable for the tax amount due plus any
fees, penalties and interest as provided for in this chapter, and any other amount
allowed under state law.
3.48.110 Refunds and credits.
A. No refund shall be made of any tax collected pursuant to this
chapter, except as provided in Section 3.48.120.
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B. No refund of any tax collected pursuant to this chapter shall be
made because of the discontinuation, dissolution, or other termination of a
business.
3.48.120 Refunds and procedures.
A. Whenever the amount of any cannabis business tax, penalty or
interest has been overpaid, paid more than once, or has been erroneously
collected or received by the City under this chapter, it may be refunded to the
claimant who paid the tax provided that a written claim for refund is filed with
the Tax Administrator within one (1) year of the date the tax was originally due or
paid, whichever came first.
B. The Tax Administrator, his or her designee or any other City officer
charged with the administration of this chapter shall have the right to examine
and audit all 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.
C. In the event that the cannabis business tax was erroneously paid in
an amount in excess of the tax due, and the error is attributable to the City, the
City shall refund the amount of tax erroneously paid; provided that (i) a claim for
refund has been timely filed with the Tax Administrator; and (ii) the refund cannot
exceed, under any circumstance, the amount of tax overpaid during the twelve
months preceding the last month for which the claim states the tax was overpaid.
3.48.130 Personal Cultivation Not Taxed.
The provisions of this chapter shall not apply to personal cannabis
cultivation or personal use of cannabis, to the extent those activities are
authorized in the "Medicinal and Adult Use Cannabis Regulation and Safety Act,"
as may be amended. This chapter shall not apply to personal use of cannabis
that is specifically exempted from state licensing requirements, that meets the
definition of personal use or equivalent terminology under state law, and provided that the individual receives no compensation whatsoever related to
that personal cultivation or use.
3.48.140 Administration of the tax.
A. It shall be the duty of the Tax Administrator to collect the taxes,
penalties, fees, and perform the duties required by this chapter.
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B. For purposes of administration and enforcement of this chapter
generally, the Tax Administrator may from time to time promulgate such
administrative interpretations, rules, and procedures consistent with the purpose,
intent, and express terms of this chapter as he or she deems necessary to
implement or clarify such provisions or aid in enforcement.
C. The Tax Administrator may take such administrative actions as
needed to administer the cannabis business tax, including but not limited to:
1. Provide to all cannabis business taxpayers forms for the
reporting of the tax;
2. Provide information to any taxpayer concerning the provisions
of this chapter;
3. Receive and record all taxes remitted to the City as provided in
this chapter;
4. Maintain records of taxpayer reports and taxes collected
pursuant to this chapter;
5. Assess penalties and interest to taxpayers pursuant to this
chapter;
6. Determine amounts owed under and enforce collection
pursuant to this chapter.
3.48.150 Appeal procedure.
Any taxpayer aggrieved by any decision of the Tax Administrator with
respect to the amount of tax, interest, penalties and fees, if any, due under this
chapter may appeal to the City Manager by filing a notice of appeal with the
City Clerk within thirty (30) calendar days of the serving or mailing of the Tax
Administrator's determination of the amount due. The City Clerk, or his or her
designee, shall fix a time and place for hearing such appeal, and the City Clerk,
or his or her designee, shall give notice in writing to such operator at the last known place of address. The finding of the City Manager shall be final and
conclusive and shall be served upon the appellant in the manner prescribed by
this section 3.48.150 for service of notice of hearing. Any amount found to be due
shall be immediately due and payable upon the service of the notice.
3.48.160 Enforcement - action to collect.
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Any taxes, penalties and/or fees required to be paid under the provisions
of this chapter shall be deemed a debt owed to the City. Any person owing
money to the City under the provisions of this chapter shall be liable in an action
brought in the name of the City for the recovery of such debt. The provisions of
this section shall not be deemed a limitation upon the right of the City to bring any
other action including criminal, civil and equitable actions, based upon the failure
to pay the tax, penalties and/or fees imposed by this chapter or the failure to
comply with any of the provisions of this chapter.
3.48.170 Apportionment.
If a business subject to the tax is operating both within and outside the
City, it is the intent of the City to apply the cannabis business tax so that the
measure of the tax fairly reflects the proportion of the taxed activity actually
carried on in the City. To the extent federal or state law requires that any tax due
from any taxpayer be apportioned, the taxpayer may indicate said
apportionment on his or her tax return. The Tax Administrator may promulgate
administrative procedures for apportionment as he or she finds useful or
necessary.
3.48.180 Constitutionality and legality.
This tax is intended to be applied in a manner consistent with the United
States and California Constitutions and state law. None of the tax provided for by
this chapter shall be applied in a manner that causes an undue burden upon
interstate commerce, a violation of the equal protection or due process clauses
of the Constitutions of the United States or the State of California or a violation of
any other provision of the California Constitution or state law. If a person believes
that the tax, as applied to him or her, is impermissible under applicable law, he or
she may request that the Tax Administrator release him or her from the obligation
to pay the impermissible portion of the tax.
3.48.190 Audit and examination of premises and records.
A. For the purpose of ascertaining the amount of cannabis business tax
owed or verifying any representations made by any taxpayer to the City in
support of his or her tax calculation, the Tax Administrator shall have the power to
inspect any location where commercial cannabis cultivation occurs and to audit
and examine all books and records (including, but not limited to bookkeeping
records, state and federal income tax returns, and other records relating to the
gross receipts of the business) of persons engaged in cannabis businesses. In
conducting such investigation, the Tax Administrator shall have the power to
inspect any equipment, such as computers or point of sale machines, that may contain such records.
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B. It shall be the duty of every person liable for the collection and
payment to the City of any tax imposed by this chapter to keep and preserve,
for a period of at least three (3) years, all records as may be necessary to
determine the amount of such tax as he or she may have been liable for the
collection of and payment to the City, which records the Tax Administrator or
his/her designee shall have the right to inspect at all reasonable times.
3.48.200 Other licenses, permits, taxes, fees or charges.
A. Nothing contained in this chapter shall be deemed to repeal,
amend, be in lieu of, replace or in any way affect any requirements for any
commercial cannabis permit or City license required by, under or by virtue of any
provision of any other Title or Chapter of this code or any other ordinance or
resolution of the City, nor be deemed to repeal, amend, be in lieu of, replace or
in any way affect any tax, fee or other charge imposed, assessed or required
under any other Title or Chapter of this code or any other ordinance or resolution
of the City. Any references made or contained in any other Title or Chapter of
this code to any licenses, license taxes, fees, or charges, or to any schedule of
license fees, shall be deemed to refer to the licenses, license taxes, fees or
charges, or schedule of license fees, provided for in other Titles or Chapters of this
code.
B. The Tax Administrator may revoke or refuse to renew the license
required by Section 5.04.020 of this code for any business that is delinquent in the
payment of any tax due pursuant to this section or that fails to make a deposit
required by the Tax Administrator pursuant to Section 3.48.060. A commercial
cannabis permit issued under the Hermosa Beach Municipal Code may be
revoked, suspended or not renewed in the event that the business holding that
permit has failed to (i) make a deposit required by the Tax Administrator pursuant
to Section 3.48.060(E) or (ii) timely pay all taxes, interest and penalties owed by
that business under this chapter.
3.48.210 Payment of tax does not authorize unlawful business.
A. The payment of a cannabis business tax required by this chapter,
and its acceptance by the City, shall not entitle any person to carry on any cannabis business unless the person has complied with all of the requirements of
this code and all other applicable state laws.
B. No tax paid under the provisions of this chapter shall be construed
as authorizing the conduct or continuance of any illegal or unlawful business, or
any business in violation of any local or state law.
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3.48.220 Deficiency determinations.
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, he or she 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 within three (3) years of the date the tax was
originally due and payable. One or more deficiency determinations of the
amount of tax due for a period or periods may be made. When a person ceases
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 cannabis 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, a notice shall be given to the person concerned in the
same manner as notices of assessment are given under Section 3.48.240.
3.48.230 Failure to report—nonpayment, fraud.
A. 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 at any time:
1. If the person has not filed a complete statement required
under the provisions of this chapter;
2. If the person has not paid the 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 furnished to the Tax Administrator
adequate substantiation of the information contained in a statement
already filed, or paid any additional amount of tax due under the
provisions of this chapter; or
4. If the Tax Administrator determines that the nonpayment of
any cannabis business 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 payable under this
chapter and any other penalties allowed by law.
B. 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
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knowledge concerning the business and activities of the person assessed, to be
due under each applicable provision 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.
3.48.240 Tax assessment - notice requirements.
The notice of assessment shall be served upon the person either by personal
delivery, by overnight delivery by a nationally-recognized courier service, 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 business 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, should the person have no
address registered with the Tax Administrator for such purpose, then to such
person's last known address. For the purpose of Section 3.48.240, a service by
overnight delivery shall be deemed to have occurred one (1) calendar day
following deposit with a courier and service by mail shall be deemed to have
occurred three (3) days following deposit in the United States mail.
3.48.250 Tax assessment - hearing, application and determination.
Within thirty (30) calendar days after the date of service of the notice of
assessment 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 assessed by the Tax Administrator shall
become final and conclusive. Within thirty (30) calendar days of the receipt of
any such application for hearing, the Tax Administrator shall cause the matter to
be set for hearing before him or her no later than thirty (30) calendar days after
the receipt of the application, unless a later date is agreed to by the Tax
Administrator and the person requesting the hearing. Notice of such hearing shall
be given by the Tax Administrator to the person requesting such hearing not later
than five (5) calendar days prior to such hearing. 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. After such
hearing the Tax Administrator shall determine and reassess (if necessary) the
proper tax to be charged and shall give written notice to the person in the
manner prescribed in Section 3.48.240 for giving notice of assessment.
3.48.260 Conviction for violation - taxes not waived.
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
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criminal prosecution for any violation of the provisions of this chapter or of any
state law requiring the payment of all taxes.
3.48.270 Violation deemed misdemeanor.
Any person violating any of the provisions of this chapter shall be guilty of
a misdemeanor.
3.48.280 Severability.
If any provision of this chapter, or its application to any person or
circumstance, is determined by a court of competent jurisdiction to be unlawful,
unenforceable or otherwise void, that determination shall have no effect on any
other provision of this chapter or the application of this chapter to any other
person or circumstance and, to that end, the provisions hereof are severable.
3.48.290 Remedies cumulative.
All remedies and penalties prescribed by this chapter or which are
available under any other provision of this code and any other provision of law
or equity are cumulative. The use of one or more remedies by the City shall not
bar the use of any other remedy for the purpose of enforcing the provisions of
this chapter.
3.48.300 Amendment or modification.
Except as set forth in this section 3.48.300, this chapter, or any section of
this chapter, may be amended, modified or temporarily suspended, but not
repealed by the City Council without a vote of the people. However, as required
by Article XIIIC of the California Constitution, voter approval is required for any
amendment that would expand, extend, or increase the rate or methodology of
any tax levied pursuant to this chapter. The people of the City of Hermosa Beach
affirm that the following actions shall not constitute an increase of the rate or
methodology of a tax:
A. The restoration or adjustment of the rate of the tax to a rate that is no higher than that allowed by this chapter, in those circumstances where,
among others, the City Council has previously acted to reduce the rate of the
tax or is incrementally implementing an increase authorized by this chapter;
B. An action that interprets or clarifies (i) the methodology of applying
or calculating the tax or (ii) any definition applicable to the tax, so long as the
interpretation or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the provisions of this chapter; or
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C. The collection of the tax imposed by this chapter even if the City
had, for some period of time, suspended or failed to collect the tax.”
SECTION 2. Pursuant to Article XIIIB of the California Constitution, the
appropriation limit for the City of Hermosa Beach 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 Ordinance.
SECTION 3. If any portion of this Ordinance is declared invalid by a court of
law or other legal body with applicable authority, the invalidity shall not affect or
prohibit the force and effect of any other provision or application of the
Ordinance that is not deemed invalid. The voters of the City hereby declare that
they would have circulated for qualification and/or voted for the adoption of this
Ordinance, and each portion thereof, regardless of the fact that any portion of
the initiative may be subsequently deemed invalid.
SECTION 4. Pursuant to California Constitution Article XIIIC §(2)(b) and
California Elections Code §9217, this Ordinance shall take effect only if approved
by a majority of the eligible voters of the City of Hermosa Beach voting at the
Regular Municipal Election to be held on November 8, 2022, and shall take effect
ten (10) days after the City Council has certified the results of the Regular
Municipal Election by resolution.
SECTION 5. The Mayor is hereby authorized to attest to the adoption of this
Ordinance by the People voting thereon on November 8, 2022, by signing where
indicated below.
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I hereby certify that the foregoing Ordinance was PASSED, APPROVED AND ADOPTED by the people of the City of Hermosa Beach on the 8th day of
November 2022.
CITY OF HERMOSA BEACH
MICHAEL DETOY, MAYOR
ATTEST:
MYRA MARAVILLA CITY CLERK
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State of California ) County of Los Angeles ) ss
City of Hermosa Beach ) July 26, 2022
Certification of Council Action RESOLUTION NO. 22-7331
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, CALLING FOR THE PLACEMENT OF A MEASURE ON THE BALLOT FOR THE NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION FOR THE
SUBMISSION TO THE QUALIFIED VOTERS OF AN ORDINANCE ADDING CHAPTER 3.48 TO TITLE 3 (REVENUE AND FINANCE) OF THE HERMOSA BEACH MUNICIPAL CODE, ESTABLISHING A LOCAL BUSINESS TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF HERMOSA BEACH AND REQUESTING THE BOARD OF SUPERVISORS RENDER THE ELECTION CONSOLIDATION SERVICES ADOPTED IN RESOLUTION NO. 22-7317 FOR THIS MEASURE
I, Myra Maravilla, City Clerk of the City of Hermosa Beach do hereby certify that
the above and foregoing Resolution 22-7331 was duly approved and adopted
by the City Council of said City at its regular meeting thereof held on the
26th day of July, 2022 and passed by the following vote:
AYES: MAYOR PRO TEMPORE JACKSON, COUNCILMEMBERS ARMATO,
CAMPBELL, MASSEY
NOES: MAYOR DETOY
ABSTAIN: NONE
ABSENT: NONE
________________________________
Myra Maravilla City Clerk
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