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Ordinance Number 1029ORDINANCE NO. 1029 AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, AMENDING VARIOUS SECTIONS OF CHAPTER 1 OF TITLE 3 OF THE SAN JUAN CAPISTRANO MUNICIPAL CODE REGARDING BUSINESS LICENSE REGULATIONS NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 3-1.110, of the San Juan Capistrano Municipal Code is hereby amended to read as follows : "Sec. 3-1.110. Licenses: Nentransferability Transfer. (a) Unless otherwise specifically provided or authorized by the Council herein, the licenses issued pursuant to the provisions of this chapter shall be nontransferable. (b) Before aAY such license-is transferred, the person applying for the transfer shall make an application Any holder of a current valid business license may apply for a license transfer as provided herein Section 3 1.104 of this article. No such license shall be vcHW fef.--any location other than the location set forth in such license without the-vvritten endorsement of the License-Gel~ector thefeGA-:-If a license is transferred as provided in this Section, no additional business license tax shall be due from the license holder/applicant, provided the business's license taxes are current for the year when the transfer occurs. (c) For purposes of this section, a "license transfer" shall mean a (i) change in business name, (ii) change in business ownership, (iii) change of business location, or (iv) any combination thereof. Any other changes in a business including, but not limited to, changes in type, scope or size, shall require an application for a new business license as provided in Section 3-1.104 and payment of any applicable business license taxes. (d) For purposes of this section, a "change of ownership" shall mean an occurrence where 50% or more of the controlling interest in the business is transferred to another person. 0 1029 (e) A license transfer applicant shall file an application with the License Collector, along with an application fee as set by resolution of the City Council. The application fee shall not exceed the City's reasonable costs of processing and reviewing a transfer application. Upon receipt of an application, the License Collector shall verify that the transfer complies with this Municipal Code. In the case of a change of business location, the review shall include an investigation by the Planning Department to verify that the applicant's business at the new location complies with applicable zoning and development codes. (f) The License Collector shall render a written determination within thirty (30) days after receipt of a complete license transfer application. The License Collector shall either approve or deny the transfer. If the License Collector denies an application, he or she shall include the reasons for the denial. The decision of the License Collector shall be final." SECTION 2. Section 3-1.113, of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.113. Exemptions. (a) Exemption from license requirement. The following are not required to obtain a business license: (1) Businesses, trades, callings, professions, exhibitions, or vocations exempt from municipal business licensing requirements by virtue of the Constitution and laws of the State or the United States; (2) Businesses, trades, callings, professions or vocations whose contact with the City is merely incidental to their business. "Incidental contact" includes, but is not limited to: (i) Travelling through the City limits on business without conducting a business transaction within the City; (ii) Delivering packages or goods to an address located within the City where the remainder of the transaction occurred either outside of the City, or by mail, telephone or Internet; 2 01029 (iii) Occasional meetings within the City between a client and a service provider whose office is located outside the City, and where the services are primarily rendered to the client from a location outside the City; ulncidental contact" does not include the following: (iv) Significant advertising or solicitation of business conducted within the City; (v) Significant negotiation and execution of contracts, agreements, invoices, purchase orders and similar documents at a location within the City evidencing the sale of goods or services; (vi) Delivering packages or goods to an address located within the City where other parts of the transaction also occur within the City (e.g.: negotiation of sales price, signing of contract, exchange of goods for money, etc.); (b) -ERumerat-edExemption from payment of tax. Although required to obtain a business license, Nno license tax shall be required for the following: (1) Businesses, trades, callings, professions, exhibitions, or vocations exempt from municipal license taxes by virtue of the Constitution and laws of the State or the United States; (2) Any institution or organization which is conducted, managed, or carried on wholly for charitable purposes and from which profit is not derived, either directly or indirectly, by any individual; provided, however, the applicant shall furnish conclusive proof to the License Collector that such is the case; (3) Any enterprise or entertainment when the receipts derived therefrom are to be appropriated to any church or school or to any religious, benevolent, or charitable purpose within the City; (4) Any person honorably discharged from the armed forces of the United States who peddles, hawks, or vends any goods permitted by law and exempt from license taxes by virtue of the laws of the State and who exhibits his authenticated papers; provided, however, no more than one license shall be issued to such applicant during any one year; 3 0 1029 ~eter,ffiwyer,4entist, oF-etAer professieAa~oo net-Raving a fixed place of business within the City-wfKHs called upoo to come to the-C+ty to render services;. (e5) Any person peddling, exclusively, fruit, vegetables, or other products raised upon his lands; provided, however, such person shall furnish conclusive proof to the License Collector that such products were raised by him on his lands before the issuance of a tax exempt license, and such person shall carry the license with him; and (+6) Any person engaged in citrus growing or other horticultural or agricultural pursuits, including persons engaged exclusively in the business of caring for, spraying, fumigating, fertilizing, or hauling such horticultural or agricultural products or engaged in other gainful occupations serving citrus growers, other horticulturists, and farmers, except packinghouses. (be) Tax exempt licenses. Licenses issued pursuant to the provisions of this section shall be issued in the same form and manner as other licenses but shall bear the words "Tax Exempt License" over the signature of the License Collector. (eel) Regulatory provisions applicable. The provisions of this section shall not exempt any person from complying with the regulatory measures and provisions of this chapter, except the payment of the license taxes required by Article 2 of this chapter. (de) Licenses nontransferable -Transfer. The tax exempt licenses issued pursuant to this section sfl.aU ma,y be nontransferable transferred as provided in Section 3-1.110." SECTION 3. Section 3-1.114, of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.114. Taxes: Payment and Proration. All license taxes shall be due on January 1st of each year, or upon first doing business with the City. Annual renewals shall be due on or before thirty (30) days after the expiration date of the previous year's license. All license taxes shall be paid in lawful money of the United States at the office of the License Collector. The first annual license shall be issued for the unexpired period of such year, except as otherwise specifically provided in this chapter. Except as set forth in Section 3-1.211(c) (taxes for out-of-city businesses), business license taxes shall be prorated as follows: If the first annual 4 0 1029 license is issued between April 1 and June 30, the business license tax due for the first annual license shall be 75% of the amount provided by this Code. If the first annual license is issued between July 1 and September 30, the business license tax due for the first annual license shall be 50% of the amount provided by this Code. If the first annual license is issued between October 1 and December 31, the business license tax due for the first annual license shall be 25% of the amount provided by this Code. There shall be no proration of business license taxes due for annual renewals or of daily business license taxes." SECTION 4. The first paragraph of Section 3-1.202 of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.202. Business and professions. Every person who engages in business~ef--er not at a fixed place of busi-Ress within the City, shall pay a license tax based upon an annual fee or the average number of employees for the preceding calendar year, from January 1st through December 31st, at the following rates and in the following classifications:" SECTION 5. Subsection (f)(1) of Section 3-1.202 of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.202. Business and professions. (f) Suspension, revocation and appeal processes. (1) Suspension and revocation authority. Subsequent to the issuance of any business license under this title, the City shall have the authority to initiate the suspension or revocation of any business license for one or more of the following reasons: (i) The business conducted on the premises is not substantially similar to that for which the business license was approved and issued; (ii) The business does not comply with the specific requirements of this title, or Title 5, Chapter 24, Regulation of Massage Therapy, or Title 9, Chapter 3, Article 1, Establishment of Districts: Official Zoning Map; 5 0 1029 (iii) The business licensee submitted false or misleading statements or has submitted falsified information or certificates as part of the license application; (iv) The business licensee or employee has been convicted of any felony under the laws of the State of California; or has been convicted of any offense of law in another State of the United States which California classifies as a felony; or has pleaded no contest to felony charges in the State of California; or has pleaded no contest to any offense of law in another State of the United States which California classifies as a felony; and/or (v) The business licensee or an employee has been convicted of any crime in violation of California Penal Code Sections 647(a), 647(b), or 647(d), as amended-c; and/or (vi) The business licensee or an employee has been found, by an administrative proceeding or other court proceeding, to be in violation of any ordinance of this City, any condition of approval imposed by the City on the use of the premises where the business is being conducted, or any condition of approval imposed by the City or any other agency on the operation of the business." SECTION 6. Subsection (b) of Section 3-1.203 of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.203. Scope. The license taxes for amusement businesses shall be as follows: (a) For every person carrying on the business of a billiard room or pool hall, Twenty and no/1 OOths ($20.00) Dollars per year for each pool table: (b) For conducting, managing, or carrying on any carnival, festival, fair, show, or other similar exhibitioo special event consisting of five (5) or less concessions/vendors, Twenty-Five and no-1 OOths ($25.00) dollars for each day; and for each concession/vendor in excess of five (5), Five and no/1 OOths ($5.00) Dollars for the first day and two and 50/1 OOths ($2.50) Dollars for each additional day. Special event coordinators employing or contracting with out-of-city concessions/vendors may also apply for an "umbrella" business license to cover their concessions/vendors (in lieu of each concession/vendor securing a separate business license), upon 6 0 1029 application and remittance of the applicable business license tax for their concessions/vendors. (See Section 3-1.213 herein); SECTION 7. Section 3-1.211 of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.211. Taxes-Fair Apportionment for businesses with limited City activity. (a) For purposes of imposing the business license tax, this Chapter shall be construed broadly in favor of the imposition and collection of the tax to the fullest extent permitted by State and Federal law, and as it may change from time to time by judicial interpretation or by statutory enactment. However, the City recognizes that under Constitutional fair tax apportionment principles, out-of-city businesses conducting limited business within the City may only be taxed to a limited extent. To ensure fair collection of the business license tax amongst all classes of businesses, the following rules shall apply: (b) Businesses located within the City and subject to an annual tax shall be liable for the full amount of business license tax otherwise imposed by this Chapter. There shall be a rebuttable presumption that a business with a street address (residential or commercial) located within the City's limits is 11Within the city" for purposes of this Chapter. Post office boxes, drop boxes, and similar means of receiving mail shall not be considered in determining a business's street address. (c) Businesses located outside the City and subject to an annual tax shall be liable for five dollars ($5) in business license tax annually. There shall be a rebuttable presumption that a business with a street address (residential or commercial) located outside the City's limits is 110utside the City" for purposes of this Chapter. Notwithstanding Section 3-1.114, there is no pro-ration of this tax. (d) Businesses subject to a daily tax (whether located within or outside the City) shall be liable for the full amount of business license tax otherwise imposed by this Chapter. There shall be a rebuttable presumption that the full daily tax is due if a licensee conducts a significant amount of business within the City's limits on the day subject to the tax. Out of City businesses conducting limited business within the City may request the liGense collector to pro rate the business tax based 7 0 1029 upon th€He-vel of aGti-vity being conducted in the City-as-evidenced by a_n audited financial statement of gross rec~f)ts. Such statement shall sA-ew---tfle total gross receipts for the previous year as comf)ared to the gross receipts received, or expected to be rec~.ve€1---frem doin§ business in the City for the current year. This proration doe&Rot apply to the p.recessing/renewal fee. The minimum tax awortionment from any proration shall be fi ve dollars ($5.00)." SECTION 8. Section 3-1.212 of Article 2 of Chapter 1 of Title 3 of the San Juan Capistrano Municipal Code is hereby amended to read as follows: "Sec. 3-1.212. Processing/renewal fees. All new businesses shall pay a processing fee in addition to the business tax to cover the administrative costs of processing the application. All businesses renewing their business license shall pay a renewal fee. These fees shall be in an amount as set by resolution of the City Council.7 New busine-sse-~ ge.newals;..--..$4MQ'' SECTION 9. Section 3-1.213 is hereby added to Article 2 of Chapter 1 of Title 3 of the San Juan Capistrano Municipal Code and shall read as follows: "Sec. 3-1.213. "Umbrella" Business License For Out-of-City Concessions at Special Events. (a) The City Council recognizes that special events provide a valued cultural and economic benefit to the community. Oftentimes, special event coordinators will use out-of-city concessions and/or vendors who provide or advertise food, games, entertainment, and other goods and services to guests. While out-of-city concessions/vendors may have limited business contact with the City, that contact is not incidental for purposes of this Chapter. As such, it is fair and appropriate to collect the Five Dollar ($5.00) annual business license tax from each out-of-city concession/vendor as set forth in Section 3- 1.211(c). (b) The City Council further recognizes that requiring out-of- city special event concessions/vendors to each obtain a separate business license is cumbersome and discourages special events within the City. In an effort to streamline the process, the City Council hereby establishes an "umbrella" 8 0 1029 business license for use by out-of-city concessions/vendors at special events. (c) In conjunction with applying for a special activities permit under section 9-3.547, the special event coordinator may file with the License Collector an application for an "umbrella" business license for its out-of-city concessions/vendors, on a form prescribed by the License Collector. The application shall include a list of all concessions/vendors (both located within the City and out-of-city) that will provide or advertise goods or services at the special event, including (i) their principal business addresses, contact phone numbers and e-mail addresses, and (ii) the type and duration of goods/services to be provided or advertised. The License Collector may collect an application fee from the special event coordinator in an amount set by resolution of the City Council to pay for the costs of processing the application. (d) The License Collector shall verify that all concessions/vendors have applicable Board of Equalization resale authorizations and otherwise comply with applicable Codes. The License Collector may deny an "umbrella" license for any out-of-city concession/vendor that cannot meet these standards. (e) Upon remittance of the applicable business license tax for out-of-City concessions/vendors, the License Collector may thereafter issue an "umbrella" business license to the special event coordinator that will serve as a business license for all out- of-city concessions/vendors participating in the special event. The license tax due from each concession/vendor shall be as follows: (1) Out-of-city businesses -first special event in the City for the current year: $5.00 (2) Out-of-city businesses -second and subsequent special event in the City for the current year: None. (Note: annual tax paid for first special event in the year) (3) In-city businesses: None, if taxes are current. (Note: In-city businesses must obtain their own business licenses and pay their own tax per this Chapter). (f) In addition to any tax due directly from the special event coordinator (pursuant to Section 3-1.203(b}}, the special events 9 0 1029 coordinator shall also collect the tax from those out-of-state concessions/vendors from whom a tax is due and remit the full amount to the License Collector as a condition to issuance of an "umbrella" license. (g) Once issued, the special events coordinator may copy an "umbrella" license to distribute to out-of-city concessions/vendors at the special event, each of whom shall display a copy during all operating hours. The 11Umbrella" license shall remain in effect for the legal duration of the special event. Except as specified in this Section, an active "umbrella" license shall function the same as any other business license and be subject to the same terms and conditions set forth in this Chapter." SECTION 10 . Section 3-1 .214 is hereby added to Article 2 of Chapter 1 of Title 3 of the San Juan Capistrano Municipal Code and shall read as follows: 11Sec. 3-1.214. Powers of License Collector-Administrative Regulations. (a) The License Collector shall have the power and duty, and is hereby directed, to enforce each and all of the provisions of this Chapter. (b) The License Collector shall determine the eligibility of any person who asserts a right to exemption or a refund of, the tax imposed by this Chapter. (c) The License Collector may adopt administrative rules and regulations not inconsistent with provisions of this Chapter for the purpose of interpreting, clarifying, carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such administrative rules and regulations shall be on file in the License Collector's office. To the extent that the License Collector determines that the tax imposed under this Chapter shall not be collected in full for any period of time from any particular business, that determination shall be considered an exercise of the License Collector's discretion to settle disputes and shall not constitute a change in taxing methodology for purposes of Government Code Section 53750 or otherwise. The License Collector is not authorized to amend the City's taxing methodology for purposes of Government Code Section 53750, and the city does not waive or abrogate its ability to impose the business license tax in full as a result of promulgating administrative rulings." 10 0 1029 SECTION 11. Effective Date. This Ordinance shall take effect and be in force thirty (30) days after its passage. SECTION 12. City Clerk's Certification . The City Clerk shall certify to the adoption of this Ordinance and cause the same to be posted at the duly designated posting places within the City and published once within fifteen (15) days after passage and adoption as required by law; or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five (5) days prior to the date of adoption of this Ordinance; and, within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of the City Clerk. PASSED, APPROVED AND ADOPTED this 161h day of February 2016. 11 0 1029 STATE OF CALIFORNIA ) COUNTY OF ORANGE )SS CITY OF SAN JUAN CAPISTRANO ) I, MARIA MORRIS, appointed City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 1029 which was regularly introduced and placed upon its first reading at the Regular Meeting of the City Council on the 2"d day of February 2016, and that thereafter, said Ordinance was duly adopted and passed at the Regular Meeting of the City Council on the 16th day of February 2016, by the following vote, to wit: COUNCIL MEMBERS: Allevato, Perry, Reeve, Ferguson and Mayor Patterson OUNCIL MEMBERS: None OUNCIL MEMBERS: None STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF SAN JUAN CAPISTRANO I, MARIA MORRIS, declare as follows: ) ) ss ) AFFIDAVIT OF POSTING That I am the duly appointed and qualified City Clerk of the City of San Juan Capistrano; That in compliance with State laws, Government Code section 36933(1) of the State of California, on the 4th day of February 2016, at least 5 days prior to the adoption of the ordinance, I caused to be posted a certified copy of the proposed ordinance entitled: I This document was posted in the Office of the 1it~ 12 0 1029 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss AFFIDAVIT OF POSTING CITY OF SAN JUAN CAPISTRANO ) I, MARIA MORRIS, declare as follows: That I am the duly appointed and qualified City Clerk of the City of San Juan Capistrano; that in compliance with State laws, Government Code section 36933(1) of the State of California. On the 191h day of February 2016, I caused to be posted a certified copy of Ordinance No. 1029, adopted by the City Council on February 16, 2016, entitled : AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, AMENDING VARIOUS S CTIONS OF CHAPTER 1 OF TITLE 3 OF THE SAN JUAN CAPISTRANO MUNICIPAL D REGARDING BUSINESS LICENSE REGULATIONS 13 0 1029