resolution 81926 supplemental report

8/12/2019 Resolution 81926 Supplemental Report

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O N E F R A N K O G A W A P L A Z A 6 T H F L O O R O A K L A N D , C A L I F O R N I A 9 4 6 1 2Office of the City Att orne y (510) 238-3 601John Russo FA X: (510) 238-65 00City Attorney Apri l 21,2009 TD D: (510) 839-6451

Honorable City CouncilCity HallOakland, CaliforniaRe: Item 19

A RESOLUTION SUBMITTING TO THE VOTERS AT THE NEXT SPECIALELECTION, NOT LESS THAN 88 DAYS AND NOT MORE THAN 150 DAYSF R OM P AS SAGE OF T HI S R E S OL UT I ON A P R OP O S E D OR DI NANC EAMEND ING THE REAL PRO PERTY TRA NSFER TAX, CHA PTER 4 .20 OFT HE OAKL AND M UNI C I P AL C ODE , T O C L AR I F Y AP P L I C AT I ON O F T HET AX T O T R ANS F E R S OF R E AL E S T AT E R E S UL T I NG F R OM C HANGE S I NT HE OW NE R S HI P AND C ONT R OL OF C OR P OR AT I ONS AND OT HE RL E GAL E NT I T I E S W I T HOUT I NC R E AS I NG T HE T AX R AT E ; T O R E M OVET HE C UR R E NT R E QUI R E M E N T OF C ONF O R M I T Y T O S T AT E W I DER UL E S ; T O ADD A DE F I NI T I ON OF P E R S O N T O T HE T AX;R E QUE S T I NG T HE S E R VI C E S OF T HE R E GI S T R AR OF VOT E R S ; ANDDIRECTING THE CITY CLERK TO TAKE ANY AND ALL ACTIONSNECESSARY UNDER LAW TO PREPARE FOR AND CONDUCT THES P E C I AL E L E C T I ON.

Dear President De La Fuente and Members of the City Council:. This attached correction to the proposed City Council resolution submitting an ordinance amending thereal property transfer tax to the voters is presented by the City Attorney pursuant to the authority providedunder the Sunshine Ordinance section 2.20.080(G), which provides an exception that allows the CityAttorney to conform d ocum ents as to form and legality. In addition, the changes are offered pursuant tothe authority provided under the Sunshine Ordinance sections 2.20.080(B)(3) and (4), to supplementagenda related materials with information not know at the time agenda-related materials were filed andcorrect errors in agenda related materials.

Very truly yours,John A. RussoCity Attorney

By: / ^ t l t ^ u ^Kathleen Salem-BoydDeputy City A ttorney


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REVISED

INTRODUCED BY COUNCILMEMBER

2 9 A P R I U P MOA K LA ND C I TY COUNCI LRES OLU TION NO. C.M.S.

A RESOLUTION SUBMJTTING TO THE VOTERS AT THE NEXT SPECIALELECTION, NOT LESS THAN 88 DAYS AND NOT MORE THAN 150 DAYSFROM PASSAGE OF THIS RESOLUTION A PROPOSED ORDINANCEAMENDING THE REAL PROPERTY TRANSFER TAX, CHAPTER 4.20 OF THEOAKLAND MUNICIPAL CODE, TO CLARIFY APPLICATION OF THE TAX TOTRANSFERS OF REAL ESTATE RESULTING FROM CHANGES IN THEOWNERSHIP AND CONTROL OF CORPORATIONS AND OTHER LEGALENTITIES WITHOUT INCREASING THE TAX RATE; TO REMOVE THECURRENT REQUIREMENT OF CONFORMITY TO STATEWIDE RULES; TOADD A DEFINITION OF PE RS ON TO THE TAX ; REQUESTING THESERVICES OF THE REGISTRAR OF VOTERS; AND DIRECTING THE CITYCLERK TO TAKE ANY AND ALL ACTIONS NECESSARY UNDER LAW TOPREPARE FOR AND CONDUCT THE SPECIAL ELECTION.

W HE RE AS , pursua nt to Chapter 4 .20 o f the Oakland Mu nic ipa l Cod e, the C ity ofOakland imposes a real property t ransfer tax on t ransfers of real property located inOak land ; andW HE RE AS , the Counci l determines that a l though not express ly s ta ted in the languageof the ordinance, i t was the intent of the Counci l to impose the tax on al l t ransfers of realproper ty un less express ly excep ted f rom taxat ion; andWHEREAS, t ransfers of real property occurr ing as a resul t of changes in the ownershipof corporat ions, and other legal ent i t ies, through mergers, consol idat ions, andacquis i tions escap e taxat ion, whi le Oakland ho meow ners a nd smal l bus inesses pay thereal estate t ransfer tax; andWHEREAS, the Counci l determines that i t is in the best interest of the Ci ty of Oaklandto submit an amended real property transfer tax to the voters that wi l l clari fy the intent ofthe ordin anc e to fa ir ly and eq ual ly tax al l t ransfers of real property, including t ransfers ofreal property that resul t f rom changes in ownership and control of corporat ions andother legal ent i t ies; andW HE RE AS , the Coun ci l determines that s ta tewide ru les somet imes conf li c t w i thOakland's interests as an independent charter c i ty and that current requi rement ofconformi ty wi th statewide rules should be removed ; and

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W HE RE AS , accordingly, without increasing the tax rate, the City Council of the C ity ofOakland desires to am end C hapter 4.20, sections 4.20.020 and 4.20.030 of theOakland Municipal; andWHEREAS, all revenues received from the tax will be deposited in the general fund ofthe C ity to be expended for general fund pu rposes; now, therefore, be itRESOLVED: That the City Council of the City of Oakland does hereby request that theBoard of Supervisors of Alameda County order the Special Municipal election consistentwith the provisions of state law; and be itFURTHER RESOLVED: That the City Council of the City of Oakland does herebysubmit to the voters at the special election not more than 88 days and not more than150 days from the date of passage of this resolution the text of the proposed ordinance,which shall be as follows:AN ORDINANCE AMENDING THE REAL PROPERTY TRANSFER TAX, CHAPTER4.20 OF THE OAK LAND MUNICIPAL CODE , TO CLARIFY APPLICATION OF THETAX TRANSFERS OF REAL ESTATE RESULTING FROM CHANGES OWNERSHIPAND CONTROL OF CORPORATIONS AND OTHER LEGAL ENTITIES.Be it ordained by the People of the City of Oakland:

Se ctio n 1 . The Municipal Code is hereby amended to add, delete, or modifysections as set forth below {section numbers and titles are indicated in bold type;additions are indicated by underscoring and deletions are indicated by strike-throughtype; portions of the regulations not cited or not shown in underscoring or strike-throughtype are not changed).Se ctio n 2. Cod e Am en dm en t. Section 4.20.020 of the Oakland MunicipalCode is hereby amended to read as follows:4.20.020 Imposition of tax.There is imposed a tax on all transfers by deeds, instruments, writings, or anyother docum ent, or changes in control and ownership of legal entities, by whichany lands, tenements or other interests in real property located in the city, are oris granted, assigne d, transferred, or otherwise conveyed to or invested in atransferee, or transferees thereof, which shall be levied at the rate of one andone-half (1.50) percent of the value of consideration.Such tax shall bo administorod to the statewide rulos governing the documentarytransfer tax as stated in California Rovonuo and Taxation Codo Sections 11911through 11930, as codified on tho dato of passage of the ordinance codifiod inthis section, including the oxom ptions from tax that are itemized thoro in, oxcoptwhere the exemptions appearing w ithin this ChapterA.20, provide groatorprotection to tho taxpayer.

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Se ction 3. Cod e Am en dm en t. Section 4.20.030 of the Oakland MunicipalCode is hereby amended to read as follows:4.20.030 Defini t ions.As used in this chapter:Changes in control and ownersh ip of legal entities means any direct or indirectacguisition or transfer of ownership interest or control in a legal entity thatconstitutes a change in ownership or transfer of the real property of the entityunder California R evenue and Taxation Code section 64, as such statute readsand is interpreted by the Ca lifornia Board of E gualization on Ju ne 3. 2009.Person and persons mean any natural person, receiver, adm inistrator,executor, as signee, trustee in bankruptcy, trust, estate,firm, co-partnership, iointventure, c lub, company, ioint stock com pany, business trust, limited liabilitycomp any, municipal corpora tion, political subdivision of the state of California,

domes tic or foreign corpora tion, association, syndicate, society, or any group ofindividuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, orotherwise, and the United States or any instrumentality thereof, and any naturalperson,who as an individual or with a sp ouse, owns fifty-one 51%) percent ormore of the capital stock of a corporation obligated to file a declaration and paytax pursuant to this chapter; and in addition, is a person with the power to controlthe fiscal decision-making process by which the corporation allocates funds tocreditors in preference to its tax obligations under the provisions of this chapter.A person as defined herein, who is also an officer or director of a corporationobligated to file declarations and pay tax pursuant to this chapter, shall bepresumed to be a person with the power to control the fiscal d ecision-makingprocess. Wh enever the term person is used in any clause prescribing andimposing a penalty, the term as applied to association shall m ean the owners orpart owners thereof, and as applied to c orporation, the officers thereof.Real property and realty mean real property as defined by and under the lawsof the state of California.Value of consideration means the total consideration, valued in money of theUnited States, paid or delivered, or contracted to be paid or delivered in return forthe transfer of real property, including the amount of any indebtedness existingimmediately prior to the transfer which is secured by a lien,deed of trust or otherencumbrance on the property conveyed and which continues to be secured by

such lien,deed of trust or encumbrances after such transfer, and also includingthe amount of any indebtedness which is secured by a lien,deed of trustorencum brance given or placed upon the property in connection with the transfer tosecure the paym ent of the purchase price or any part thereof which rem ainsunpaid at the time of transfer.Value of the consideration also includes the amount of any special ass essmentlevied or imposed upon the property by a public body, district or agency, wheresuch special assessm ent is a lien or encumbrance on the property and the5 49 14 2v 5 - 3 -


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purchaser or transferee agrees to pay such special assessm ent or takes theproperty subject to the lien of such special assessment. The value of any lien orencum brance of a type other than those which are hereinabove specificallyincluded,existing immediately prior to the transfer and remaining after suchtransfer, shall not be included in determining the value of the consideration. If thevalue of the cons ideration canno t be definitely determ ined, or is left open to befixed by future contingencies, value of the consideration shall be deemed tomean the fair market value of the property at the time of transfer, after deductingthe am ount of any lien or encum brance, if any, of a type which would beexcluded in determining the value of the consideration pursuant to the aboveprovisions of this section.Unless a transfe r is a gift , i.e., free and clear of liens or encumbrances, it ispresumed that the value of consideration of a given property being transferred isthe fair market value of that property, unless circumstances supporting adeparture therefrom can be furnished to the sole satisfaction of the Director or hisor her designee{s).Se cti on 4 . Se ve ra bility . Should any provision of this Ordinance, or itsapplication to any person or circumstance, be determined by a court of comp etentjurisdiction to be unlaw ful, unenforceable or otherwise void, that determination shallhave no effect on any other provision of this Ordinance or the application of thisOrdinance to any other person or circumstance and, to that end, the provisions hereofare severable.Se ctio n 5. M ajority A pp ro va l; Effective Date. This Ordinance shall beeffective only if approved by a majority of the voters voting thereon and shall go intoeffect ten (10) days after the vote is declared by the City Council.Se ctio n 6. C ou nc il Am en dm en ts. The City Council of the City of Oakland ishereby authorized to amend Sections 4.20.020 and 4.20.030of the O akland M unicipalCode as adopted by this Ordinance in any manner that does not increase the rate of thereal estate transfer tax, othen/vise constitute a tax increase for which voter approval isrequired by Article XIII C of the California Constitution or entirely dispense with therequirement for independent audits stated in Section 4.28.190.

FUR THER RE SO LVE D: That the City Council of the City of Oakland does hereby findand de termine that pursuant to Article XtllC , section 2(b) of the C alifornia Constitutionthe C ity C ouncil of the C ity of O akland has adopted a resolution declaring the existenceof a fiscal emergency in the City of Oakland that necessitates asking the voters toapprove the amendm ent to the real estate transfer tax tax before the next regularelection of the Oakland C ity C ouncil; and be itFURTHER RESOLVED: That in accordance with the Elections Code and Chapter 3 ofthe O akland Municipal Code, the C ity Clerk shall fix and determine a date forsubmission of arguments for or against said proposed ordinance, and said date shall beposted in the Office of the City Clerk; and be it

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FURTH ER RE SO LVE D: That in accordance with the Elections Code and Chapter 3 ofthe Oakland Municipal Code, the City Clerk shall provide for notice and publication as tosaid proposed ordinance in the manner provided for by law; and be itFURT HER RE SO LVE D: That the City Council does hereby request that the Registrarof Voters of the County of Alameda perform necessary services in connection with saidelection.FUR THER RE SO LV ED : That the City Clerk is hereby directed to obtain printing,supplies and services as required.FURTH ER RE SO LVE D: That the City Clerk is hereby authorized to provide such otherservices and supplies in connection with said election as may be required by theStatutes of the State of California and the Charter of the City of Oakland.FURTH ER RE SO LVE D: That the City Clerk and City Adm inistrator are herebyauthorized and directed to take any and all actions necessary under law to prepare forand conduct the special election and appropriate all monies necessary for the CityAdministrator and City Clerk to prepare and conduct the special election, consistent withlaw.

IN COUNCIL, OAKLAND, CALIFORNIA, , 2009PASSED BY THE FOLLOWING VOTE:AYES- BROOKS, PRESIDENT BRUNNER, KAPLAN, KERNIGHAN, NADEL, QUAN,

REID,ANOD E LA FUENTENOES-ABSENT-ABSTENTION

Attest: LaTonda SimmonsCity Clerk and Clerk of theCouncil of the City ofOakland,California

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resolution 81926 supplemental report

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