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CC Special Election Results - Measure G____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: 7-16-2018 Disposition: Resolution 14542 & Ordinance 1961 Agenda Item No: 4.c Meeting Date: July 16, 2018 SAN RAFAEL CITY COUNCIL STAFF REPORT Department: City Clerk Prepared by: Lindsay Lara, City Clerk City Manager Approval: ________ TOPICS: CANNABIS INDUSTRY TAX - MEASURE G SUBJECT: 1. RESOLUTION DECLARING CANVASS OF RETURNS AND RESULTS OF CONSOLIDATED SPECIAL MUNICIPAL ELECTION HELD ON JUNE 5, 2018 FOR MEASURE G – CANNABIS INDUSTRY TAX 2. ACCEPT THE CITY CLERK’S DESIGNATION OF THE ORDINANCE AS ORDINANCE 1961 TO BE INSERTED IN THE MUNICIPAL CODE RECOMMENDATION: It is recommended that the City Council adopt the resolution declaring canvass of returns and results of consolidated special municipal election held on June 5, 2018, regarding Ballot Measure G – Cannabis Industry Tax. It is also recommended that the City Council accept the City Clerk’s designation of the Ordinance as Ordinance No. 1961, adding Chapter 3.40 to the San Rafael Municipal Code entitled “Cannabis Industry Tax.” DISCUSSION: On March 5, 2018, the San Rafael City Council adopted a resolution calling a special election to be held on June 5, 2018 for the purpose of submitting to the San Rafael voters an ordinance to impose a business tax on commercial cannabis businesses of up to 8% of gross receipts, with the proceeds to be used for administering the cannabis regulations, to enhance police and fire services and community centers, and for repairing potholes/ maintaining City streets. The Ordinance was contingent on the passing of Measure G, the Commercial Cannabis Business Tax by a two-thirds vote. The voters of the City of San Rafael passed the Cannabis Industry Tax by 83.42%, and as a housekeeping item, staff is recommending the City Council accept the City Clerk’s designation of the ordinance as Ordinance No. 1961 to be inserted into the Municipal Code. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 By its terms, the Ordinance will become effective ten days after the date on which the City Council declares its approval by at least two-thirds of the City’s electors voting at the Special Municipal Election held on Tuesday, June 5, 2018. The City Clerk’s office has assigned Ordinance No. 1961 to this ordinance and it will be incorporated in the next publication of the municipal code. FISCAL IMPACT: This is a housekeeping item as a result of the voters’ approval of measure and t here is no direct fiscal impact with the adoption of this resolution or acceptance of the City Clerk’s designation of the ordinance as Ordinance No. 1961. RECOMMENDED ACTION: Adopt Resolution and accept the City Clerk’s designation of the ordinance as Ordinance 1961 to be inserted in the municipal code. ATTACHMENTS: 1. Resolution with attached Exhibit A 2. Ordinance No. 1961 RESOLUTION NO. 14542 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DECLARING CANVASS OF RETURNS AND RESULTS OF CONSOLIDATED SPECIAL MUNICIPAL ELECTION HELD ON JUNE 5, 2018 REGARDING MEASURE G – CANNABIS INDUSTRY TAX WHEREAS, in pursuance of law and the Charter of the City of San Rafael, there was held in said City on Tuesday, the 5th day of June 2018, a special municipal election (consolidated with the Consolidated Primary Election) for the purpose of submitting to the electors of the City of San Rafael the following measure: MEASURE G CITY OF SAN RAFAEL CANNABIS INDUSTRY TAX “To maintain/enhance City of San Rafael services, with funding that cannot be taken by Sacramento, including: enhancing police and fire services, repairing potholes/maintaining streets, enhancing community centers, and administering a cannabis oversight program; shall the City of San Rafael’s ordinance levying, until repealed, a tax of up to 8% on cannabis (marijuana) businesses’ gross receipts in the city, eventually ramping up to approximately $1,000,000 in new funding annually, requiring independent citizen oversight and financial audits be adopted?” WHEREAS, said Special Municipal Election (consolidated with the Consolidated Primary Election) was held on Tuesday, June 5, 2018 in accordance with law and the votes thereat received and canvassed, and the returns thereof ascertained, determined, and declared in all respects as required by law: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Rafael, as follows: 2 1. That the City Clerk of the City of San Rafael be, and is hereby, instructed to enter this Resolution in the Minutes of the City Council as a statement of the results of said election; 2. That the whole number of votes cast at said election re: Measure G was 15,311 votes; 3. That more than a two-thirds majority of all the votes cast on said Measure G were in favor of said Measure (per Exhibit “A”, attached), and said Measure carried; and 4. That all Vote by Mail ballots have been duly received and canvassed in time, form, and manner as required by law. I, LINDSAY LARA, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City of San Rafael held on Monday, the 16th day of July 2018, by the following vote, to wit: AYES: COUNCILMEMBERS: Bushey, Colin, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Gamblin LINDSAY LARA, City Clerk CERTIFICATE OF CANVASS OF VOTE I, LYNDA ROBERTS, Registrar of Voters, County of Marin, State of California, do hereby certify I canvassed the vote cast at the Statewide Primary Election held on June 5, 2018, and the results of said canvass are detailed in the Official Final Results, and the Statement of Votes, filed and retained with the Marin County Elections Department. Summary reports are provided herewith. IN WITNESS WHEREOF, I have set my hand and affixed my official seal on the 27th day of June, 2018. Marin County Registrar of Voters Date:06/27118 Statewide Direct Primary Election -June 5, 2018 Time: 11 :52:08 Page:lof4 Statement of V otes Cast MEASURE G -City of San Rafael TIJRNOUT Reg. Voters Cards Cast % Turnout Jurisdiction Wide 10901 Polling 1584 277 17.49% VBM 1584 672 42.42'V Total 1584 949 59.91% 10902 Polling 1523 250 16.41% VBM 1523 676 44.39% Total 1523 926 60.80% 10903 Polling 1434 195 13.60% VBM 1434 668 46.58% Total 1434 863 60.18% 10904 Polling 1206 126 10.45% VBM 1206 515 42.70% Total 1206 641 53.15% 10905 Polling 1476 172 11.65% VBM 1476 573 38.82% Total 1476 745 50.47% 10906 Polling 745 68 9.13% VBM 745 245 32.89% Total 745 313 42.01% 10907 Polling 1540 271 17.60% VBM 1540 611 39.68% Total 1540 882 57.27% 10908 Polling 1068 113 10.58% VBM 1068 451 42.23% Total 1068 564 52.81% 10909 Polling 1408 207 14.70% VBM 1408 583 41.41% Total 1408 790 56.11% 10910 Polling 1305 124 9.50% VBM 1305 515 39.46% Total 1305 639 48.97% 10911 Polling 1597 243 15.22% VBM 1597 571 35.75% Total 1597 814 50.97% 10912 Polling 1410 167 11.84% VBM 1410 668 47.38% Total 1410 835 59.22% 10913 Polling 594 66 11.11 % VBM 594 322 54.21% Total 594 388 65.32% 10914 Polling 893 117 13.10% VBM 893 280 31.35% Total 893 397 44.46% 10915 Polling 805 100 12.42% VBM 805 359 44.60% Total 805 459 57.02% Marin County Registrar of Voters Date:06/27/18 Time: 11 :52:08 Statewide Direct Primary Election -June 5, 2018 Page:2of4 Statement of V otes Cast MEASURE G -City of San Rafael TIJRNOUT Reg. Voters Cards Cast % Turnout 10916 Polling 1465 211 14.40% VBM 1465 674 46.01% Total 1465 885 60.41% 10917 Polling 1493 221 14.80% VBM 1493 550 36.84% Total 1493 771 51.64% 10919 Polling 782 95 12.150/. VIIM 782 382 48.850/. lotal 782 477 61.000/. 109,4 Pollmg 777 136 17.500/. VBM 777 347 44.66% Total 777 483 62.16% 10936 Polling 876 135 15.41% VBM 876 425 48.52% Total 876 560 63.93% ~O915 Polling 1565 248 15.850/. VBM 1565 623 39.81% Total 1565 871 55.65% 20916 Polling 1192 129 10.820/. VBM 1192 489 41.02% Total 1192 618 51.85% 20917 Polling 1226 149 12.15% VBM 1226 471 38.42% Total 1226 620 50.57% 40911 Polling 1277 142 11.120/. VBM 1277 512 40.090/. Total 1277 654 51.21% 40946 Polling 730 82 11.23% VBM 730 156 21.37% Total 730 238 32 .60% 61091 Polling 2 0 0 .000/. VBM 2 I 50 .00% Total 2 I 50.000/. Total Polling 29973 4044 13.49% VBM 29973 12339 41.17% Total 29973 16383 54 .66% Marin County Registrar of Voters Date : 06/27 /1 8 T ime :ll :52 :08 Statewide Direct Primary Election -June 5 , 2018 Page :30f4 Statement of V otes Cast MEASURE G -City of San Rafael MEASURE G -City of San Rafael (2/3rd needed) Reg. Voters T imes Counted Total Votes YES NO Jurisdiction Wide 10901 Polling 1584 277 260 225 86 .54 % 35 13.460/. VBM 1584 672 634 548 86.44 % 86 13 .56 0/. Total 1584 949 894 773 86.47 % 121 13.53 0/. 10902 Polling 1523 250 231 193 83.55 % 38 16.45 0/. VBM 1523 676 643 541 84.14 % 102 15.860/. Total 1523 926 874 734 83 .98 % 140 16 .02 0/. 10903 Polling 1434 195 182 155 85 .16% 27 14 .84 0/. VBM 1434 668 625 529 84 .64% 96 15 .36 0/. Total 1434 863 807 684 84.76% 123 15 .24 0/. 10904 Polling 1206 126 114 91 79.82% 23 20 .180/. VBM 1206 515 468 384 82 .05% 84 17 .95 0/. Total 1206 641 582 475 81.62% 107 18.38 0/. 10905 Polling 1476 172 162 130 80.25% 32 19 .75 0/. VBM 1476 573 516 440 85.27% 76 14 .73 0/. Total 1476 745 678 570 84.07% 108 15 .93 0/. 10906 Polling 745 68 64 53 82.81% 11 17.190/. VBM 745 245 234 202 86.32% 32 13.68 0/. Total 745 313 298 255 85.57% 43 14.43 0/. 10907 Polling 1540 271 246 207 84 .15% 39 15 .85 0/. VBM 1540 611 577 478 82 .84% 99 17 .160/. Total 1540 882 823 685 83 .23% 138 16 .770/. 10908 Polling 1068 113 107 81 75 .70% 26 24.30 0/. VBM 1068 451 415 346 83.37% 69 16 .63 0/. Total 1068 564 522 427 81.80% 95 18 .20 0/. 10909 Polling 1408 207 191 159 83.25% 32 16 .75 0/. VBM 1408 583 547 463 84.64% 84 15 .36 0/. Total 1408 790 738 622 84.28% 116 15 .72 0/. 10910 Polling 1305 124 116 94 81.03% 22 18 .97 0/. VBM 1305 515 477 413 86.58% 64 13.42 0/. Total 1305 639 593 507 85 .50% 86 14 .50 0/. 10911 Polling 1597 243 227 176 77.53% 51 22.47 0/. VBM 1597 571 535 422 78.88% 113 21.12 0/. Total 1597 814 762 598 78 .48% 164 21.52 0/. 10912 Polling 1410 167 161 118 73.29% 43 26 .71 0/. VBM 1410 668 632 509 80.54% 123 19.460/. Total 1410 835 793 627 79.07% 166 20 .93 0/. 10913 Polling 594 66 58 51 87.93% 7 12 .070/. VBM 594 322 295 257 87.12% 38 12 .88 0/. Total 594 388 353 308 87.25% 45 12 .75 0/. 10914 Polling 893 117 102 81 79.41% 21 20 .59 0/. VBM 893 280 267 221 82 .77% 46 17 .23 0/. Total 893 397 369 302 81.84% 67 18 .16 0/. 10915 Polling 805 100 95 84 88.42% 11 11.58 0/. VBM 805 359 343 301 87 .76% 42 12 .24 0/. Total 805 459 438 385 87.90% 53 12 .100/. Marin County Registrar of Voters Date:06/27/18 Time: 11 :52:08 Statewide Direct Primary Election -June 5, 2018 Page:4of4 Statement of Votes Cast MEASURE G -City of San Rafael MEASURE G -City of San Rafael (2/3rd needed) Reg. Volers Times Counled Total Voles YES NO 10916 Polling 1465 211 191 157 82.20% 34 17.800/. VBM 1465 674 633 550 86.89% 83 13.110/. Tolal 1465 885 824 707 85.80% 117 14.200/. 10917 Polltng 1493 221 206 167 81.07% 39 18.930/. VIlM 1493 550 512 426 83.20% 86 16.800/. Tolal 1493 771 718 593 82.59% 125 17.410/. 10'129 I'olllllg 782 95 89 71 79.78% 18 20.220/. VIlM 782 382 354 307 86.72% 47 13.280/. lolal 782 477 443 378 85.33% 65 14.670/. 10'1,·1 I'olllllg 777 136 131 91 69.47% 40 30.530/. VIlM 777 347 327 276 84.40% 51 15.600/. lolal 777 483 458 367 80.13% 91 19.870/. 10936 Polllllg 876 135 128 109 85.16% 19 14.840/. VBM 876 425 401 337 84.04% 64 15.960/. Tolal 876 560 529 446 84.31% 83 15 .690/. 20915 Polling 1565 248 237 198 83.54% 39 16.460/. VBM 1565 623 586 491 83.79% 95 16.210/. Tolal 1565 871 823 689 83.72% 134 16.280/. 20916 Polling 1192 129 120 95 79.17% 25 20.83% VBM 1192 489 467 406 86.94% 61 13.06% Total 1192 618 587 501 85.35% 86 14.65% 20917 Polling 1226 149 135 107 79.26% 28 20.74% VBM 1226 471 441 345 78.23% 96 21.770/. Total 1226 620 576 452 78.47% 124 21.530/. 40911 Polling 1277 142 125 108 86.40% 17 13.600/. VBM 1277 512 483 414 85.71% 69 14.290/. Tolal 1277 654 608 522 85.86% 86 14.140/. 40946 Polling 730 82 71 45 63.38% 26 36.62°;' VBM 730 156 149 119 79.87% 30 20.130/. rolal 730 238 220 164 74.55% 56 25.450/. 61091 Polltng 2 0 0 0 -0 VBM 2 1 1 1 100.00% 0 0.000/. Tolal 2 1 1 1 100.00% 0 0.000/. Tolal Pollmg 29973 4044 3749 3046 81.25% 703 18.750/. VBM 29973 12339 11562 9726 84.12% 1836 15.880/. Tolal 29973 16383 15311 12772 83.42% 2539 16.580/. Lynda Roberts REGISTRAR OF VOTERS Melvin Briones ASSISTANT REGISTRAR OF VOTERS PO Box E San Rafael, CA 94913 Marin County Civic Center 3501 Civic Center Drive Suite 121 San Rafael, CA 94903 41 5 473 6456 T 41 5 473 6447 F 415 473 6899 TIY www .marinvotes.org elections@marincounty.org .................................................. .E 1..E..c. II.ON . s. ... .D.E..P. A. RT.M.E. NT. ................................. . Provid ing 0 respon s'v e, ron sporen , ond profess;o nol approach to conduc ting elec io ns June 28, 2018 City of San Rafael PO Box 151560 San Rafael, CA 94915-1560 Enclosed are the: • the Certificate of Canvass of Vote for the June 5, 2018 Statewide Primary Election; • the Polling Place report; • the Statement of Votes; • and the Official Final Results summary report; detailing the results of your ballot Measure G contest. Sincerely, Dan Miller Filing & Candidate Services Encl. ORDINANCE NO. 1961 AN ORDINANCE OF CITY OF SAN RAFAEL ADDING CHAPTER 3.40 TO THE SAN RAFAEL MUNICIPAL CODE ENTITLED “CANNABIS INDUSTRY TAX.” THE PEOPLE OF THE CITY OF SAN RAFAEL DO ORDAIN AS FOLLOWS: DIVISION 1. Chapter 3.40 is hereby added to the San Rafael Municipal Code to read as follows: CHAPTER 3.40 CANNABIS INDUSTRY TAX 3.40.010. Title. This ordinance shall be known as the Cannabis Industry Tax Ordinance. 3.40.020. Special Excise Tax. A special excise tax is imposed by this Chapter for funds to enhance police and fire services; repair potholes and maintain City streets; enhance City community centers; and administer a cannabis business regulation and oversight program. 3.40.030. Purpose. This ordinance is adopted to achieve the following purposes, among others, and shall be interpreted to accomplish those purposes: A. To impose a special business tax on businesses engaged in the cannabis industry operating within the City of San Rafael pursuant to the state Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), specifically California Business and Professions Code section 19320 and the "California Control, Regulate and Tax Adult Use of Marijuana Initiative" approved by the state’s voters on November 8, 2016. B. To specify the type of tax and maximum rate of tax that may be levied and the method of collection; and C. To comply with all requirements to impose a special excise tax, such tax to become operative only if and to the extent implemented by the City Council by resolution and approved by 2/3 voter approval. 3.40.040. Definitions. Terms that are not defined in this Chapter shall have the meanings ascribed to them in Section10.96.040 of the San Rafael Municipal Code. The following words and phrases shall have the meanings set forth below when used in this Chapter unless the context plainly requires otherwise: A. “Licensee" as that term is defined in Section 10.96.040 of the San Rafael City Code. B. “Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, or any other strain or varietal of the genus Cannabis that may exist or hereafter be discovered or developed that has psychoactive or medicinal properties, whether growing or not, including the seeds thereof. “Cannabis” also means marijuana as defined by Section 11018 of the Health and Safety Code as enacted by Chapter 1407 of the Statutes of 1972, and amended by the California Control, Regulate and Tax Adult Use of Marijuana Initiative, and as defined by other applicable state law. C. "Cannabis industry tax” means the tax due pursuant to this Chapter for engaging in commercial cannabis activity in the City. D. "Cannabis product" means any product containing cannabis, including, but not limited to, flowers, buds, oils, tinctures, concentrates, extractions, edibles and those products described in Section 11018.1 of the Health and Safety Code. E. “Commercial Cannabis Activity” as defined by Section 10.96.040 San Rafael Municipal Code. F. “Cannabis Business” means any business activity in the City relating to commercial cannabis activity. G. “City” means the City of San Rafael either the entity or its territorial limits, as the context requires. H. “City Council” or “Council” means the City Council of the City of San Rafael. I. "Collector” means the City’s Finance Director or his or her designee. J. “Delivery” means the commercial transfer of cannabis or cannabis products from a non- storefront dispensary, up to an amount determined by the State Bureau of Cannabis Control to a primary caregiver or qualified patient as defined in Section 11362.7 of the Health and Safety Code , or a testing laboratory. “Delivery” also includes the use by a dispensary of any technology platform owned and controlled by the non-storefront dispensary, or independently licensed under this chapter that enables qualified patients or primary caregivers to arrange for or facilitate the commercial transfer by a licensed dispensary of medical cannabis or medical cannabis products. K. "Distributor'' means a person engaged in procuring cannabis from a cultivator, and/or procuring cannabis products from a manufacturer, for sale to a dispensary. In addition, and without limiting the foregoing, “distributor” includes “distributor” as defined in California Business and Professions Code section 19300.5 and any successor statute, as may be adopted or amended from time to time. "Distribution" means engaging in that conduct and a "distribution facility" is any real estate, whether or not improved, used in such conduct. L. "Employee" means each and every person engaged in the operation or conduct of any cannabis 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 cannabis business for a wage, salary, commission, barter or any other form of compensation. M. "Gross Receipts," means “Gross Receipts” as that term is defined in Section 10.04.010 “definitions” of the San Rafael City Code. N. "Manufacturer" means a person who conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or that packages or repackages cannabis or cannabis products or labels or re-labels its container. In addition, and without limiting the foregoing, “manufacturer” includes “manufacturer” as defined in California Business and Professions Code section 19300.5 and any successor statute, as may be adopted or amended from time to time. O. "Sale" means “Sale” as that term is defined in Section 10.04.010 of the San Rafael Municipal Code. P. "State" means the State of California. 3.40.050. Tax Authorized. A cannabis industry tax is hereby imposed on every person who is engaged in commercial cannabis activity in the City as prescribed herein, from and after the effective date of a City Council resolution implementing the tax. It is unlawful for any person to transact or carry on any cannabis business in the City without paying, in accordance with this Chapter, the cannabis industry tax imposed by this section. A. Tax on Cannabis Manufacturers, Distributors, and Delivery Retailers 1. There is hereby imposed on every licensee engaged in a cannabis business in the City as an infused product manufacturer, distributor, testing laboratory, or non-storefront delivery an annual tax at a rate established by resolution of the City Council which rate shall not exceed eight percent (8%) of annual gross receipts. The tax imposed shall be due and payable in installments as provided in Section 3.40.070 of this Chapter. The tax imposed shall not be implemented unless and until the City Council acts by resolution to do so. B. The City Council may by resolution, in its discretion, implement a tax rate lower than the maximum rate established: 1. For all persons engaged in the commercial cannabis industry differing tax rates can be set for different categories of cannabis business. For example, and without limitation, the City Council may set different rates for businesses serving medical or adult use, or for different types of manufacturers, distributors, testing laboratories or non-store front delivery retailers. The City Council may, by resolution, also decrease or increase any such tax rate from time to time, provided that the tax rate shall not, at any time, exceed the maximum tax rate established. Tax rates shall be set for a minimum of a two (2) year term. 2. Persons subject to the tax imposed shall also register and pay the registration fee described in Section 3.40.060 of this Chapter, but shall be exempt from paying the general business tax required under Section 10.04.105 and 10.04.106 of the San Rafael Municipal Code for any such cannabis business. A business not subject to the cannabis industry tax imposed by this Chapter is subject to the general business tax required under Sections 10.04.105 and 10.04.106 of the San Rafael Municipal Code except as otherwise provided by Chapter 3.40 of this Code or other applicable law. 3. No further voter approval shall be required for the adoption or increase of a tax under the authority granted by Section 3.40.050 of this Chapter, it being the intent of the People of the City of San Rafael to authorize such a tax up to and including the maximum rates set forth above whenever implemented by the City Council hereafter. 3.40.060. Registration of Commercial Cannabis Activity. All licensees shall be required to annually register as follows: A. All persons engaging in a cannabis business shall register with the Collector within thirty (30) days of commencing operation or by July 31, 2018, and shall annually renew such registration by January 1 of each year thereafter. In registering, such persons shall furnish to the Collector a sworn statement, upon a form provided by the Collector, setting forth the following information: • The name of the business • The names and addresses of each owner • The exact nature or kind of business • The place where such business is to be carried on • A valid San Rafael Cannabis Operator License • Estimated Gross Receipts • Any further information which the Collector may require. B. Any financial information required under Subsection A will be used only to calculate and enforce the tax imposed under this Chapter, will be exempt from disclosure under the Public Records Act pursuant to Government Code section 6254(i), and will not be used by the City for criminal enforcement except as provided in Sections 3.40.270 and 3.40.280 of this Chapter. C. An annual registration fee of $250 shall be presented with the sworn statement submitted under this section. This fee shall not be considered a tax and may be adjusted by resolution of the City Council. D. Unless otherwise specifically provided by the Collector in writing, the annual fee under this section shall be due and payable in advance, on the first day of January, and shall be considered delinquent if unpaid after the last day of February. The date on which the fee becomes delinquent may be extended in writing by the Collector, upon good cause shown, to a date not later than March 31st. E. For each cannabis business subject to tax under this Chapter, a separate registration and fee shall be required under this section for each branch or location of the business and for each separate type of cannabis business at each branch or location. F. Upon receipt of the registration and fee required under this Section, the Collector shall issue to the cannabis business a Certificate of Registration. Such Certificate of Registration shall be non-transferrable except as otherwise provided by the Collector in writing. 3.40.070. Reporting and Remittance of Tax. The cannabis industry tax imposed by this Chapter shall be due and payable as follows: A. Each person subject to tax under this chapter shall, on or before the last day of the month following the close of each calendar quarter, prepare and submit a tax return and remit to the Collector the tax due for that quarter. At the time the return is filed, the full amount of the tax due for the prior quarter shall be remitted to the Collector. At any time, a business may apply in writing to the Collector to have these tax returns and payments made less frequently or on a different schedule. Any determination resulting from this application will be at the sole discretion of the Collector and shall be provided in writing. B. All tax returns shall be completed on forms prescribed by the Collector. C. Tax returns and payments for all outstanding taxes owed the City under this Chapter are immediately due and payable to the City of San Rafael upon cessation of business for any reason. 3.40.080. Payments and Communications – Timely Remittance. Whenever any payment, return, report, request or other communication is due under this Chapter, it must be received by the Collector on or before the due date. A postmark will not be accepted as timely remittance. If the due date falls on Saturday, Sunday or a City holiday, the due date shall be the next regular business day on which the City is open to the public. 3.40.090. Payment – When Taxes Deemed Delinquent. 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 City of San Rafael on or before the due date as specified in Section 3.40.070. 3.40.100. Notice Not Required By City. The City of San Rafael is not required to send a delinquency or other notice or bill to any person subject to this Chapter. Failure to send such notice or bill shall not affect the validity of any tax or penalty or interest due under this Chapter. 3.40.110. Delinquent Taxes – Penalties and Interest. Penalties and interest shall be applied according to Section 3.20.080 of the San Rafael Municipal Code. 3.40.120. Waiver of Penalties. The Collector may waive the penalties imposed upon any person if: A. The person provides evidence satisfactory to the Collector that failure to pay timely was due to circumstances beyond the control of the person and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, and the person paid the delinquent cannabis industry tax and accrued interest owed the City before applying to the Collector for a waiver. B. The waiver provisions specified in this subsection shall be granted to a particular cannabis business only once during any twenty-four-month period. 3.40.140. Exemptions from the Tax. A. Nothing in this Chapter shall be deemed or construed to apply to any person transacting and carrying on any business that is exempt from the payment of such taxes as are herein prescribed by virtue of the Constitution or applicable statutes of the United S tates or of the State. B. Any person claiming an exemption pursuant to this Section shall file a sworn statement with the Collector stating the facts upon which exemption is claimed. Unless and until the Collector determines in writing that such person is exempt from tax under this Chapter, such person shall be liable for the payment of the tax imposed by this Chapter. C. This Chapter shall not be deemed or construed to require the payment of any general business tax under Chapter 10.04 of the San Rafael Municipal Code for any commercial cannabis activity that is subject to payment of a cannabis industry tax under this Chapter. 3.40.150. Enforcement. It shall be the duty of the Collector to enforce each and all of the provisions of this Chapter, in accordance with the procedures of Section 10.04.090 of this Code. 3.40.160. Rules and Regulations. The Collector may adopt rules and regulations not inconsistent with the provisions of this Chapter as may be necessary or desirable to aid in the implementation and enforcement of the provisions of this Chapter. A copy of any such rules and regulations shall be available for public inspection in the Collector’s office and on the City’s website. 3.40.170 Apportionment. If a cannabis business subject to cannabis industry tax is operating both within and outside the City, it is the intent of the City to apply the cannabis industry tax so that measure of the tax fairly reflects the proportion of the taxed activity actually carried on in the City. The Collector may adopt administrative procedures for apportionment pursuant to section 3.40.160. 3.40.180. Construction. A. This tax is intended to be applied in a manner consistent with the United States and California Constitutions, state and local 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, state or local law. B. This Chapter shall be construed and implemented consistent with the provisions of Chapter 10.04 of this Code except as this Chapter or other law otherwise requires or the Collector otherwise determines in writing as authorized under this Chapter. 3.40.190. Audit and Examination of Records and Equipment. A. The Collector shall have the power to audit and examine all books and records of any person engaged in cannabis business in the City, including both state and federal income tax returns, California sales tax returns, or other evidence documenting the gross receipts of persons engaged in cannabis business, and, where necessary, all equipment of any person engaged in cannabis business in the City, for the purpose of ascertaining the amount of cannabis industry tax, if any, required to be paid under this Chapter, and for the purpose of verifying any statements or any item thereof when filed by any person pursuant to this Chapter. If such person, after written demand by the Collector, refuses to make available for audit, examination or verification of such books, records or equipment as the Collector requests, the Collector may, after full consideration of all information within his or her knowledge concerning the cannabis business and activities of the person so refusing, make an assessment against the cannabis business of the taxes estimated to be due under this Chapter, following the procedures, rights and obligations set forth in Section 3.20.090 of the San Rafael City Code. 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 from when the tax was due and originally payable, 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 Collector shall have the right to inspect at all reasonable times. 3.40.200. Other Licenses, Permits, Taxes, Fees, or Charges. Except as expressly provided in this Chapter, 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 permit or 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 (except business license tax), fee or other charge imposed, assessed or required by, under or by virtue of 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 permits, licenses, taxes, fees, or charges, or to any schedule of license fees, shall be deemed to refer to the permits, licenses, taxes, fees or charges, or schedule of license fees, provided for in other titles or Chapters of the San Rafael Municipal Code unless otherwise expressly provided. 3.40.210. Payment of Tax Does Not Authorize Unlawful Business. A. The payment of a tax required by this Chapter, and its acceptance by the City, shall not entitle any person to engage in any cannabis business unless the person has complied with all of the requirements of this Code and all other applicable state or local laws. B. No tax paid under this Chapter shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any state or local laws. 3.40.220. Deficiency Determinations. If the Collector is not satisfied that any tax return or other statement filed as required under 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 facts contained in the tax return or statement or 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, or such later date as allowable by law. 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 3.40.250. 3.40.230. Failure to Report – Nonpayment. Under any of the following circumstances and at any time, the Collector 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 a complete return or statement required under this Chapter. 2. If the person has not timely paid any tax, fee, interest and/or penalties due under of this Chapter. 3. If the person has not, after demand by the Collector, filed a corrected return or statement, or furnished to the Collector adequate substantiation of the information contained in a return or statement filed previously. The notice of assessment shall separately set forth the amount of any tax, fee, interest and/or penalties known by the Collector to be due or estimated by the Collector, after consideration of all information within the Collector's knowledge concerning the business and activities of the person assessed, to be due under each applicable section of this Chapter. 3.40.240. Tax Assessment – Notice Requirements. The notice of assessment shall be served upon the person liable for the tax under this Chapter either by personal delivery, 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 Collector for the purpose of receiving notices provided under this Chapter; or, should the person have no address registered with the Collector 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. 3.40.250. Appeal Procedure. Any taxpayer aggrieved by any decision of the Collector with respect to the amount of tax, fee, interest and penalties, if any, due under this Chapter may appeal to the City Manager, or their designee by filing a written appeal with the Clerk of the San Rafael City Council within fifteen (15) calendar days of the mailing of the decision or determination. The Clerk shall schedule the appeal and give fifteen (15) days written notice to the appellant of the time and place of hearing by serving the notice personally or by depositing in the United States Post Office in the City, postage prepaid, addressed as shown on the appeal papers or, if none, such other address as is known to the City or, absent any address, by publication in a newspaper of general circulation in the City. The City Manager, or designee considering the appeal shall have authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this Chapter. 3.40.260. Conviction for Chapter Violation – Taxes not Waived. The conviction and punishment of any person for failure to pay a required tax, fee, penalty and/or interest under this Chapter shall not excuse or exempt such person from any civil action for the amounts due under this Chapter. 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. 3.40.270. Violation Deemed Misdemeanor. Any person who violates any provision of this Chapter or who other than by a sworn statement, knowingly or intentionally misrepresents to any officer or employee of the City any material fact herein required to be provided is guilty of a misdemeanor punishable as provided in section 1.16.060 San Rafael Municipal Code. A person who on a sworn statement states as true a material fact that he or she knows to be false is guilty of perjury. Any violation of this chapter may be enforced either as an infraction, a misdemeanor, by an administrative citation or administrative order pursuant to Chapters 1.44 or 1.46 of this Code, or by any other remedy available to the city under this Code or state law. All such remedies shall be alternative to or in addition to or in conjunction with, and not exclusive of, one another. The election of remedies shall be at the sole discretion of the City. 3.40.280. Actions to Collect. The amount of any tax, fee, penalty and/or interest imposed pursuant to this Chapter shall be deemed a debt owed to the City. An action may be commenced in the name of the City in any court of competent jurisdiction, for the amount of any delinquent tax, fees, penalties and interest thereon, collection costs and reasonable attorney’s fees. 3.40.290. 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. 3.40.300. Remedies Cumulative. All remedies and provisions prescribed under this Chapter shall be cumulative of, and in addition to, all of the obligations, prohibitions, requirements, and remedies contained in other chapters of this code and 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 hereof. 3.40.310. Amendment or Repeal. This Chapter may be repealed or amended by ordinance of the San Rafael City Council without a vote of the People except that, as required by Article XIIIC of the California Constitution, any amendment that increases the maximum rates of tax beyond the levels authorized in Section 3.40.050 above shall not take effect unless approved by a vote of the People. The City Council may, by resolution, implement a tax under this Chapter in any amount or at any rate that does not exceed the maximum rates set forth in Section 3.40.050. DIVISION 2. CEQA. The approval of this Ordinance is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., “CEQA,” and 14 Cal. Code Reg. §§ 15000 et seq., “CEQA Guidelines”). The cannabis industry tax to be submitted to the voters is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular action nor does it authorize any private activity, but merely taxes such activity as otherwise occurs. As such, under CEQA Guidelines section 15378(b)(4), the tax is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax are used for a purpose that would have either such effect, the City will undertake the required CEQA review for that project. Therefore, pursuant to CEQA Guidelines section 15060 CEQA analysis is not required at this time. DIVISION 3. Effective and Operative Dates. This ordinance shall take effect 10 days after the election result is certified as provided by Elections Code but the taxes imposed by this ordinance shall take effect only when and to the extent implemented by resolution of the City Council. DIVISION 4. Certification; Publication. Upon approval by the voters, the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause it to be published, in full or in summary form, according to law. DECLARED APPROVED BY THE CITY COUNCIL ON JULY 16, 2018 __________________ GARY O. PHILLIPS Mayor