HomeMy WebLinkAbout08905ORDINANCE NO. 8905
AN ORDINANCE SUBMITTING TO THE ELIGIBLE ELECTORS
OF THE CITY OF PUEBLO, COLORADO AT THE GENERAL
MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2015,
A BALLOT QUESTION TO INCREASE TAXES BY IMPOSING AN
EXCISE TAX OF 8.0 % WHEN UNPROCESSED RETAIL
MARIJUANA IS FIRST SOLD OR TRANSFERRED BY A RETAIL
MARIJUANA CULTIVATION FACILITY AND THE ADOPTION OF
ORDINANCE NO. 8903 TO IMPLEMENT THE NEW TAX
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The question of adopting Ordinance No. 8903 and thereby imposing a retail marijuana
excise tax shall be submitted to a vote of the eligible electors of the City at the City's municipal
general election to be held on November 3, 2015. The ballot question (submission clause and
title) therefore shall be as follows:
Question No. 2B (Excise Tax on Marijuana Cultivators)
SHALL THE CITY OF PUEBLO'S TAXES BE INCREASED BY $850,000
ANNUALLY (FIRST FULL FISCAL YEAR INCREASE) BEGINNING JANUARY 1,
2016 AND BY WHATEVER AMOUNTS ARE RAISED ANNUALLY
THEREAFTER, THROUGH THE ADOPTION OF ORDINANCE NO. 8903
IMPOSING AN EXCISE TAX OF 8.0 % WHEN UNPROCESSED RETAIL
MARIJUANA IS FIRST SOLD OR TRANSFERRED BY A RETAIL MARIJUANA
CULTIVATION FACILITY WITH THE RATE OF THE TAX BEING ALLOWED TO
BE DECREASED OR INCREASED WITHOUT FURTHER VOTER APPROVAL
SO LONG AS THE RATE OF THE TAX DOES NOT EXCEED 15.0 % AND
SHALL ALL REVENUES DERIVED FROM SUCH TAX BE COLLECTED,
RETAINED AND SPENT, NOTWITHSTANDING ANY LIMITATIONS PROVIDED
BY LAW, AS A VOTER APPROVED REVENUE CHANGE AND AN EXCEPTION
TO THE LIMITS WHICH WOULD OTHERWISE APPLY PURSUANT TO
ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY
OTHER LAW AND ALLOWING SUCH REVENUE TO BE EXPENDED AS THE
CITY COUNCIL SHALL DETERMINE?
YES _____
NO _____
The text of Ordinance No. 8903 is as follows:
BE IT ORDAINED BY THE PEOPLE OF THE CITY OF PUEBLO, that (brackets indicate
matter being deleted; underscoring indicates new matter being added):
SECTION 1.
Title XIV of the Pueblo Municipal Code, as amended, is amended by the addition of a
new Chapter 12 thereto, to read as follows:
CHAPTER 12
Retail Marijuana Taxes
Sec. 14-12-1. Definitions.
The following definitions shall apply to the words and phrases used in this
Chapter:
(1) means the amount determined by the
Average market rate
State of Colorado pursuant to C.R.S. 39-28.8-101(1), or such alternate
amount as may be determined by the Director of Finance as the average
price of unprocessed retail marijuana that is sold or transferred from a
retail marijuana cultivation facility to a retail marijuana products
manufacturer or retail marijuana store.
(2) shall mean a natural person, partnership, sole-
Person
proprietorship, association, corporation, limited liability company, estate,
receiver, trustee, assignee, lessee or any individual acting in a
representative capacity or any other combination of individuals by
whatever name known.
(3) means all or parts of the plant of the genus
Retail marijuana
cannabis whether growing or not, the seeds thereof, the resin extracted
from any part of the plant and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or its resin,
including marijuana concentrate. “Retail marijuana” does not include
industrial hemp, nor does it include fiber produced from the stalks, oil,
cake made from the seeds of the plant, sterilized seed of the plant that is
incapable of germination, or the weight of any other ingredient combined
with marijuana to prepare topical or oral administrations, food, drink, or
other product.
(4) has the same meaning as
Retail marijuana cultivation facility
defined in Section 12-43.4-103 (16), C.R.S.
(5) means the excise tax imposed by this
Retail marijuana tax
Chapter.
(6) means any exchange or barter, in any manner or by any
Sale
means whatsoever, for consideration.
(7) means to grant, convey, hand over, assign, sell,
Transfer
exchange, or barter, in any manner or by any means, with or without
consideration, any Retail Marijuana or Retail Marijuana Product from one
licensee to another or to a consumer. A Transfer includes the movement of
Retail Marijuana or Retail Marijuana Product from one licensed premises to
another, even if both premises are contiguous, and even if both premises
are owned by a single entity or individual or group of individuals and also
includes a virtual transfer that is reflected on the Marijuana Inventory
Tracking Solution (“MITS”) system, even if no physical movement of the
Retail Marijuana occurs.
Sec. 14-12-2. Imposition and Rate of Tax; taxes collected held in trust.
(a) Excise Tax. In addition to any other tax imposed by law including
the sales and use tax levied in Chapter 4 of this Title, there is levied and shall be
paid and collected an excise tax of 8.0 percent or such other rate as may be
established pursuant to Section 14-12-8 of this Chapter on the average market rate
of unprocessed retail marijuana that is first sold or transferred from a retail
marijuana cultivation facility located within the City. The excise tax shall be levied
and owed irrespective of where delivery takes place.
(b) Each retail marijuana cultivation facility shall collect, remit and pay
the excise tax on the first sale or transfer of unprocessed retail marijuana. All
sums of money paid by a person as the additional excise tax on unprocessed
retail marijuana imposed by this Chapter are public monies that are the property
of the City. The retail marijuana cultivation facility shall hold such monies in trust
for the sole use and benefit of the City until paying them to the Finance Director.
Sec. 14-12-3. Books and records to be preserved.
(a) Every retail marijuana cultivation facility shall keep at each licensed
place of business complete and accurate electronic records for that place of
business, including itemized invoices of all retail marijuana grown, held, shipped,
or otherwise transported or sold to retail marijuana product manufacturing
facilities, retail marijuana stores, or other retail marijuana cultivation facilities.
(b) The records required by subsection (a) of this section shall include
the names and addresses of retail marijuana product manufacturing facilities,
retail marijuana stores, or other retail marijuana cultivation facilities to which
unprocessed retail marijuana is sold or transferred, the inventory of all
unprocessed retail marijuana on hand, and other pertinent papers and documents
relating to the sale or transfer of unprocessed retail marijuana.
(c) A retail marijuana cultivation facility shall keep itemized invoices of
all unprocessed marijuana transferred to retail marijuana stores owned or
controlled by the owners of the retail marijuana cultivation facility.
Sec. 14-12-4. Returns and remittance of tax—bond required.
(a) Every retail marijuana cultivation facility shall file a return with the
Director of Finance each month. The return, which shall be upon forms prescribed
and furnished by the Director of Finance, shall contain, among other things, the
total amount of unprocessed retail marijuana sold or transferred during the
preceding month and the tax due thereon.
(b) Every retail marijuana cultivation facility shall file a return with the
Director of Finance by the twentieth day of the month following the month
reported and with the report shall remit the amount of tax due.
(c) A retail marijuana cultivation facility shall file with the Director of
Finance evidence of a surety bond issued by a company authorized to do
business in this state for the benefit of the City in an amount equal to two months
of the facility's anticipated liability for the tax imposed pursuant to this Chapter.
The amount of the facility's anticipated tax liability shall be determined solely in
the discretion of the retail marijuana cultivation facility. The Director of Finance
may require a facility to file or a facility may choose to file a replacement surety
bond if the amount of the facility's actual tax liability changes after the facility has
filed a bond with the Director of Finance pursuant to this subsection (c).
Sec. 14-12-5. Administration and enforcement.
The tax imposed pursuant to this Chapter shall be administered and
enforced in accordance with the provisions of Chapter 2 of this Title which
provisions are made applicable to this Chapter, including, without limitation, any
interest and penalty for failure to make any return or to collect or pay any tax;
except that, in the event of a conflict between the provisions of this Chapter and
the provisions of Chapter 2 of this Title, the provisions of this Chapter shall
control, including without limitation, those provisions of Chapter 2 providing for
exemption from sales and use tax which are inapplicable to this Chapter. The
burden of proving that any transaction is not subject to the taxes imposed by this
Chapter shall be upon the person upon whom the duty to collect the tax is
imposed.
Sec. 14-12-.6 Rules and regulations.
The Director of Finance is hereby authorized to adopt rules and regulations
not inconsistent with the provisions of this Chapter, regarding the payment,
collection and remittance of retail marijuana excise taxes. A copy of all such rules
and regulations shall be available for public inspection in the office of the Director
of Finance. Failure or refusal to comply with any such rules or regulations shall
constitute a violation of this Chapter.
Sec. 14-12-7. Criminal penalties for violation.
(a) It is unlawful and a municipal offense for any retail marijuana
cultivation facility to sell or transfer retail marijuana without a license as required
by law.
(b) It is unlawful and a municipal offense for any person to fail or refuse
to make any return provided to be made in this Chapter, to make any false or
fraudulent return or any false statement in any return, to fail or refuse to make
payment to the Director of Finance of any taxes collected or due the City, or in any
manner to evade the collection and payment of the tax of any part thereof
imposed by this Chapter.
(c) It is unlawful and a municipal offense for any person or purchaser to
fail or refuse to pay such tax or evade the payment thereof, or to aid or abet
another in any attempt to evade the payment of the tax imposed by this Chapter.
(d) It is unlawful and a municipal offense for any person to violate any
provision of this Chapter.
(e) Any person who violates any provision of this Chapter shall, upon
conviction, be punished by a fine not exceeding One Thousand Dollars ($1,000) or
imprisonment not exceeding one (1) year, or by both such fine and imprisonment,
in addition to any civil remedies or penalties which may otherwise be applicable.
Sec. 14-12-8. Maximum rate for retail marijuana excise tax.
The maximum retail marijuana excise tax rate that may be imposed
pursuant to this Chapter is fifteen (15) percent. At any time on or after January 1,
2016, the City may, by Ordinance:
(a) Establish another retail marijuana excise tax rate to be
imposed pursuant to this Chapter that is equal to or less than the maximum
fifteen (15) percent tax rate provided in this Chapter; or
(b) After establishing a retail marijuana excise tax rate that is
lower than fifteen (15) percent, increase the tax rate to be imposed
pursuant to this Section; except that, in no event shall the City increase the
retail marijuana excise tax rate above fifteen (15) percent.
SECTION 2.
This Ordinance shall become effective upon the majority vote in favor thereof by the
registered electors of the City voting thereon at the Municipal General Election to be held
Tuesday, November 3, 2015. The tax levies of this Chapter shall take effect beginning January
1, 2016.
SECTION 3.
The officers and staff of the City are authorized and directed to take all action necessary,
appropriate or required to effectuate the provisions of this Ordinance.
SECTION 4.
Notwithstanding any limitations on revenue, spending, or appropriations contained in
Section 20 of Article X of the Colorado Constitution or any other provision of law, any revenues
generated by the retail marijuana excise taxes imposed pursuant to this Chapter, may be
collected, retained and spent as a voter-approved revenue change and shall not require further
voter approval to modify the tax rates as provided in this Chapter or to collect, retain and spend
any revenue derived from the modified tax rates.
SECTION 5.
If any section, subsection, paragraph, clause or other provision of this Ordinance is for
any reason invalid or unenforceable, the invalidity or unenforceability of such section,
subsection, paragraph or clause or other provision shall not affect any of the remaining
provisions of this Chapter.
SECTION 6.
In addition to the authority provided in Section 1 of this Ordinance to establish a different
retail marijuana excise tax rate, the City Council, notwithstanding Sec. 18-5 of the City Charter,
is hereby empowered to amend by ordinance any other portion of Chapter 12 of Title XIV herein
adopted in order to make uniform with the laws of the State of Colorado or in order to amend or
enact additional provisions relative to the payment, collection or enforcement of the excise tax
imposed by this Ordinance.
INTRODUCED: July 27, 2015
BY: Robert Schilling
PASSED AND APPROVED: August 10, 2015
City Clerk’s Office Item # R-4
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: July 27, 2015
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: AN ORDINANCE SUBMITTING TO THE ELIGIBLE ELECTORS OF THE CITY
OF PUEBLO, COLORADO AT THE GENERAL MUNICIPAL ELECTION TO BE
HELD ON NOVEMBER 3, 2015, A BALLOT QUESTION TO INCREASE TAXES
BY IMPOSING AN EXCISE TAX OF 8.0 % WHEN UNPROCESSED RETAIL
MARIJUANA IS FIRST SOLD OR TRANSFERRED BY A RETAIL MARIJUANA
CULTIVATION FACILITY AND THE ADOPTION OF ORDINANCE NO. 8903
TO IMPLEMENT THE NEW TAX
SUMMARY:
Attached is a proposed Ordinance referring the retail marijuana tax ballot question to the voters
of the City of Pueblo at the November 3, 2015 municipal general election.
PREVIOUS COUNCIL ACTION:
On June 14, 2010, City Council referred a ballot measure to the electorate concerning a 4.3%
sales tax on medical marijuana and medical marijuana products. Pueblo voters approved said
tax on November 2, 2010.
On July 28, 2014, City Council referred a ballot measure to the electorate concerning an 8.0 %
excise tax and 4.3% sales tax on retail marijuana and retail marijuana products. Pueblo voters
voted against said taxes on November 4, 2014.
BACKGROUND
The Pueblo Municipal Code has been amended to permit the establishment and operation of
Retail Marijuana Cultivation Facilities within the City. Due to the anticipated increased demands
upon municipal services associated with marijuana cultivation facilities, it has been proposed for
Council’s consideration of a new excise tax of 8.0 % when unprocessed marijuana is first sold or
transferred by a marijuana cultivation facility.
Due to the requirements of the Taxpayers Bill of Rights ("TABOR"), Article X, §20 of the
Colorado Constitution, any new tax must be approved by the voters. This measure would refer
the marijuana excise tax question to the voters and, if approved, would also "De-Bruce" the
revenue derived from the marijuana excise tax (i.e., exempt it from the revenue growth and
spending limitations of TABOR).
FINANCIAL IMPLICATIONS:
The amount of tax revenue that the measure will generate is subject to speculation; however,
for the purpose of ballot submission under TABOR, it has been assumed that the new excise
tax in the first year will not exceed $850,000.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Members of the public are the primary stakeholders affected by the proposed Ordinance. The
issue of allowing Retail Marijuana Cultivation Facilities to operate in the City has been
discussed at numerous public Council meetings and work sessions during the past year.
ALTERNATIVES:
If the Ordinance is not approved, Retail Marijuana cultivators will pay no taxes to the City.
RECOMMENDATION:
This Ordinance must be adopted in order to refer the ballot measure to the voters.
Attachments:
Proposed Ordinance