HomeMy WebLinkAboutItem 6 - Second Reading of Ordinance No. 1674 (2020 Series) - Amending Chapter 3.04 (Transient Occupancy Tax)
Department Name: Finance
Cost Center: 2003
For Agenda of: February 4, 2020
Placement: Consent
Estimated Time: N/A
FROM: Brigitte Elke, Finance Director
Prepared By: Natalie Harnett, Interim Principal Budget Analyst
SUBJECT: SECOND READING OF ORDINANCE NO. 1674 (2020 SERIES) AMENDING
DESIGNATED PORTIONS OF THE CITY OF SAN LUIS OBISPO
MUNICIPAL CODE SECTION 3.04.020, SECTION 3.04.080, SECTION
3.04.090, SECTION 3.04.100 AND SECTION 3.04.130 OF MUNICIPAL CODE
CHAPTER 3.04 – TRANSIENT OCCUPANCY TAX.
RECOMMENDATION
Adopt Ordinance No. 1674 (2020 Series) (Attachment A) amending Municipal Code Title 3.04
Transient Occupancy Tax (TOT) to revise action to collect applicable tax assessments and to
clarify the process to appeal.
DISCUSSION
On January 14, 2020, the City Council voted 5:0 to introduce Ordinance No. 1674 (2020 Series)
amending sections 3.04.020, 3.04.080, 3.04.090, 3.04.100, 3.04.130 of City of San Luis Obispo’s
(City) Municipal Code. The amendments were introduced due to significant changes in the
lodging industry since the adoption of Chapter 3.04 in 1955. The amendments introduce the use
of property liens to collect unpaid Transient Occupancy Tax (TOT) and clarify the appeal
process for TOT assessments. Ordinance No. 1674 is now ready for adoption. The code revisions
will become effective 30 days after the final adoption of the ordinance. The City Council agenda
report from January 14, 2020, is included as Attachment B.
Policy Context
The ordinance to establish Municipal Code Section 3.04 was implemented in 1955. The tax was
assessed at 10% of the room rent and is applicable for all stays under 30 days. Chapter 3.04 of
the City’s Municipal Code is the governing document for TOT.
Public Engagement
Consistent with the City’s Municipal Code, a legal ad was published in the New Times 10 days
prior to the City Council meeting. The item was brought forth as a public hearing item on
January 14, 2020. The changes were also presented to the City’s Tourism Business Improvement
District Board and thate board supported of the changes to the TOT chapter as recommended.
Public comment can be provided to the City Council through written correspondence prior to the
meeting and through public testimony at the meeting.
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CONCURRENCE
The Finance Department communicates directly with Code Enforcement to identify
noncompliance operators and customers with delinquent taxes. The Finance Department,
Community Development Department, and the City Attorney’s office have been working closely
to accomplish a process to enforce delinquent TOT assessments and payments.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: N/A Budget Year: 2019-20
Funding Identified: N/A
Fiscal Analysis:
Funding Sources Current FY Cost
Annualized
On-going Cost
Total Project
Cost
General Fund
State
Federal
Fees
Other:
Total
The changes to the code have no fiscal impact. However, there are approximately 64 homestays
operating in the City that remain unpermitted and have yet to remit TOT that is assessed at
$400,000.
ALTERNATIVES
1. Do not adopt and implement the recommended Code revisions. This is not recommended
because it will limit the City’s ability to collect TOT assessments effectively.
2. Direct staff to make modifications to Ordinance 1674 (2020 Series).
Attachments:
a - Ordinance No. 1674 (2020 Series)
b - Staff Report from January 14, 2020 Council Meeting
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ORDINANCE NO. _____ (2020 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING SECTIONS 3.04.020, SECTION
3.04.080, SECTION 3.04.090, SECTION 3.04.100 AND SECTION 3.04.130
OF MUNICIPAL CODE TITLE 3.04 – TRANSIENT OCCUPANCY TAX
WHEREAS, the City of San Luis Obispo adopted its transient occupancy tax in 1955; and
WHEREAS, since then the lodging industry has changed significantly through the
availability of homestay rentals; and
WHEREAS, the City’s ordinance governing the lodging tax requires amendment to
address some of the unique circumstances surrounding homestays; and
WHEREAS, the City of San Luis Obispo amends designated portions of its Municipal
Code Title 3.04 – Transient Occupancy Tax.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Recitals. The above recitals are true and correct and are incorporated herein
as the findings of the Council by this reference.
SECTION 2. Section 3.04.020 of the San Luis Obispo Municipal Code, entitled
Definitions, is hereby amended to read as follows:
3.04.020 Definitions
Except where the context otherwise requires, the definitions given in this section govern
the construction of this chapter:
A. “Effective Date of Tax Administrator’s Decision” The date specified in the tax
administrator’s decision as the effective date. Generally, the effective date will be the
date the tax administrator’s decision is issued.
B. “Hotel” means any structure, or any portion of any structure, which is occupied or
intended or designed for occupancy by transients for dwelling, lodging or sleeping
purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel,
bachelor hotel, lodging house, rooming house, apartment house, a homestay,
dormitory, public or private club, mobile home or house trailer at a fixed locat ion, or
other similar structure or portion thereof.
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C. “Occupancy” means the use or possession, or the right to the use or possession of any
room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping
purposes.
D. “Operator” means the person who is proprietor of the hotel, whether in the capacity of
owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity.
Where the operator performs his or her functions through a managing agent of any type
or character other than an employee, the managing agent shall also be deemed an
operator for the purposes of this chapter and shall have the same duties and liabilities
as his or her principal. Compliance with the provisions of this chapter by either the
principal or the managing agent shall, however, be considered to be compliance by
both.
E. “Person” means any individual, firm, partnership, joint venture, association, social
club, fraternal organization, joint stock company, corporation, estate, trust, business
trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.
F. “Rent” means the consideration charged, whether or not received, for the occupancy of
a space in a hotel valued in money, whether to be received in money, goods, labor or
otherwise, including all receipts, cash, credits and property and services of any kind or
nature, without any deduction therefrom whatsoever.
G. “Tax administrator” means the city tax collector or city finance director, or his or her
designee, for the City of San Luis Obispo.
H. “Transient” means any person who exercises occupancy or is entitled to occupancy by
reason of concession, permit, right of access, license or other agreement for a period of
thirty consecutive calendar days or less, counting portions of calendar days as full days.
Any such person so occupying space in a hotel shall be deemed to be a transient until
the period of thirty days has expired unless there is an agreement in writing between
the operator and the occupant providing for a longer period of occupancy. In
determining whether a person is a transient, uninterrupted periods of time extending
both prior and subsequent to the effective date of this chapter may be considered. (Prior
code § 2551)
SECTION 3. Section 3.04.080 of the San Luis Obispo Municipal Code, entitled
Delinquencies and penalties, is hereby amended to read as follows:
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3.04.080 Delinquencies and penalties
A. Delinquency. Any operator who fails to remit any tax imposed by this chapter within
the time required shall pay a penalty the amount of which will be set by the tax
administrator or by resolution of the city council.
SECTION 4. Section 3.04.090 of the San Luis Obispo Municipal Code, entitled Failure
to collect and report tax—Determination of tax by tax administrator, is hereby amended to read as
follows:
3.04.090 Failure to collect and report tax – Determination of tax by tax administrator
If any operator fails or refuses to collect the tax and to make, within the time provided in
this chapter, any report and remittance of the tax or any portion thereof required by this chapter,
the tax administrator shall proceed in such manner as he or she may deem best to obtain facts and
information on which to base his or her estimate of the tax due. As soon as the tax administrator
shall procure such facts and information as he or she is able to obtain upon which to base the
assessment of any tax imposed by this chapter and payable by any operator who has failed or
refused to collect the same and to make such report and remittance, he or she shall proceed to
determine and assess against such operator the tax, interest and penalties provided for by this
chapter. In case such determination is made, the tax administrator shall give a notice of the amount
so assessed by serving it personally or by certified U.S. mail, postage prepaid, addressed to the
operator so assessed at his or her last known place of address. Such operator may within ten days
after the serving or mailing of such notice make application in writing to the tax administrator for
a hearing on the amount assessed. The operator’s application for a hearing must be delivered to
the City of San Luis Obispo’s Finance Department or postmarked within ten days after the serving
or mailing of such notice. If application by the operator for a hearing is not made within the time
prescribed, the tax, interest and penalties, if any, determined by the tax administrator shall become
final and conclusive and immediately due and payable. If such application is made, the tax
administrator shall give not less than five days’ written notice in the manner prescribed herein to
the operator to show cause at a time and place fixed in the notice why the amount specified therein
should not be fixed for such tax, interest and penalties. At such hearing, the operator may appear
and offer evidence why such specified tax, interest and penalties should not be so fixed. After such
hearing the tax administrator shall determine the proper tax to be remitted and shall thereafter give
written notice to the person in the manner prescribed herein of such determination and the amount
of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen
days unless an appeal is taken as provided in Section 3.04.100. (Prior code § 2558)
SECTION 5. Section 3.04.100 of the San Luis Obispo Municipal Code, entitled Appeal,
is hereby amended to read as follows:
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3.04.100 Appeal
1. Appeal. Any operator aggrieved by any decision of the tax administrator with respect
to the amount of such tax, interest and penalties, if any, may appeal. To appeal the tax
administrator’s determination, the appellant shall comply with the appeals process as
set forth in Chapter 1.20. to the council by filing a notice of appeal with the city clerk
within fifteen days of the serving or mailing of the determination of tax due. The
council shall fix a time and place for hearing such appeal, and the city clerk shall give
notice in writing to such operator at his or her last known place of address.
2. Contents of Appeal. The written appeal shall state the following information:
a. A caption setting forth the names, addresses, phone numbers and other contact
information of the appellant(s) and the operator, if the appellant and operator are
not the same, participating in the appeal.
b. A brief statement setting forth the interest of the appellant(s), either as the recipient
of the notice of tax administrator’s determination, or the legal interest of the
appellant(s) in the hotel or property that is the subject of the notice of tax
administrator’s determination.
c. A brief statement describing:
i. The specific notice of tax administrator’s determination being appealed, by the
day of the notice of tax administrator’s determination, address of the hotel or
property; and
ii. Whether all or only specified tax, interest, penalties are being appealed; and
iii. Why the tax administrator’s determination should be revoked, modified or
otherwise set aside.
d. A statement that all of the matters alleged in the appeal are true, followed by the
signature(s) of each appellant(s), and one official mailing address for the
appellant(s) to receive further notices from City relating to the appeal.
3. Hearing Procedures for Appeal.
a. Records for Appeal. The tax administrator, or his or her designee, shall ensure that
the tax administrator’s determination and any supporting documentation are
delivered to the applicable city clerk in sufficient time prior to the appeal hearing.
b. Failure to Appear. The failure of the appellant(s) to appear at the hearing, unless
the hearing was continued per subsection g of this section, or unless the appellant(s)
has submitted written evidence per subsection f of this section, shall constitute an
abandonment of the appeal.
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4. Findings of the Council. The findings of the council shall by final and conclusive and
shall be served upon the appellant in the manner prescribed in Section 3.04.090 for
service of notice of hearing. Any amount found to be due shall be immediately due
and payable upon the service of notice.
SECTION 6. Section 3.04.130 of the San Luis Obispo Municipal Code, entitled Actions
to Collect, is hereby amended to read as follows:
3.04.130 Actions to Collect
1. Actions. Any tax required to be paid by any transient under the provisions of this
chapter shall be deemed a debt owed by the transient to the city. Any such tax collected
by an operator which has not been paid to the city shall be deemed a debt owed by the
operator to the city. Any person owing money to the city under the provisions of this
chapter shall be liable to an action brought in the name of the city for the recovery of
such amount. (Prior code § 2562).
2. Liens. To recover any delinquent tax as a lien on real property, the following conditions
must be met:
a. The tax administrator must submit to and receive approval from the city council for
a resolution certifying the amounts of the liens sought to be collected from the
operator; and
b. The total amount of the delinquent tax against the operator must be delinquent for
sixty days or more.
3. Lien Collections. The tax administrator is authorized to take any steps necessary to
enforce collection of the lien, including but not limited to request the county recorder
to record a notice of any lien certified by resolution of the city council.
4. Notice of Lien Collection Procedures. All notice of the amount so assessed by the tax
administrator or city council shall contain a notice that unpaid taxes, interest and
penalties are subject to the lien collection procedures of this chapter. In addition, the
tax administrator shall by first class mail send notice to each operator and property
owner at least ten days before the city council considers the resolution to certify the
amounts of the liens and special assessments stating the date, time, and location of the
meeting. The lien shall be imposed on the date the tax administrator’s determination or
city council’s decision is issued to the responsible person and shall become effective
upon the recording of a notice of lien by the county recorder.
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5. Contesting Certification of a Lien. A person may contest the amount or the validity of
any lien for unpaid taxes, interest and penalties at the public hearing when the city
council considers the resolution to certify the liens. Such contests shall be limited to
the issue of the amount or validity of the lien and may not consider whether the
delinquency occurred. Pursuit of such a contest by a person is necessary to exhaust the
administrative remedies concerning a legal challenge to the validity of any such lien.
SECTION 7. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this ordinance, or any other provisions of the City’s rules and regulations.
It is the City’s express intent that each remaining portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
SECTION 8. Environmental Review. The proposed ordinance amendment is exempt
from environmental review requirements of the California Environmental Quality Act (CEQA)
because the adoption of this Ordinance is not a project as defined in CEQA Guidelines Section
15378 because it can be seen with certainty that it will not result in either a direct physical change
in the environment or a reasonably foreseeable indirect physical change in the environment..
SECTION 9. Ordinance Number 1234 (1993 Series) is hereby amended and superseded
to the extent inconsistent herewith.
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SECTION 10. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
New Times, a newspaper published and circulated in this City. This ordinance shall go into effect
at the expiration of thirty (30) days after its final passage.
INTRODUCED on the 14th day of January 2020, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ________ 2020, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ________ day of ______________________________, 2020.
______________________________
Teresa Purrington
City Clerk
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Department Name: Finance
Cost Center: 2003
For Agenda of: January 14, 2020
Placement: Public Hearing
Estimated Time: 30 Minutes
FROM: Brigitte Elke, Finance Director
Prepared By: Natalie Harnett, Interim Budget Analyst
SUBJECT: INTRODUCE AN ORDINANCE AMENDING DESIGNATED PORTIONS OF
THE CITY OF SAN LUIS OBISPO MUNICIPAL CODE SECTION 3.04.020,
SECTION 3.04.080, SECTION 3.04.090, SECTION 3.04.100 AND SECTION
3.04.130 OF MUNICIPAL CODE CHAPTER 3.04 – TRANSIENT
OCCUPANCY TAX.
RECOMMENDATION
Introduce an ordinance amending Municipal Code Chapter 3.04 Transient Occupancy Tax (TOT)
to revise action to collect applicable tax assessments and to clarify the process to appeal.
DISCUSSION
Background
Over the past years, the lodging industry has changed dramatically with homestays entering the
market and changing the landscape of short-term rentals and the applicable tax due to the City. A
fair number of these rentals are booked through third-party services and are in compliance with
the City’s tax law.
The City utilizes a third-party compliance company, Host Compliance, that estimates at least 64
homestays currently operating in the City without the required permits and have not been
remitting TOT. Host Compliance estimates that over $441,862 in TOT debt are owed to the City
considering back-taxes due since the homestays began renting.
In June 2018, the City and Airbnb (the largest third-party homestay online portal) reached an
agreement that provides that Airbnb will automatically collect the 10% TOT, 1% Tourism
Marketing District assessment and the 2% Business Improvement District assessment. These
required taxes and assessments will be automatically added to the amounts collected from renters
when a reservation is made on Airbnb for a stay in the City. However, Airbnb remits the TOT as
a “total amount” and does not disclose specific lodging or property information about what
properties it is collected from. The lack of information on specific properties makes it difficult to
ascertain which specific properties are remitting TOT and which are not.
The City therefore served its first batch of Violation Notice letters to homestay operators in June
2018. The enforcement letters were sent in batches because many operators contact the City after
receiving the correspondence, requesting clarification and additional information. This approach
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allows for better management of the triggered workload. To date, the City has sent 66 letters.
The total TOT revenue for back-taxes owed generated from these enforcements is approximately
$75,507. Though there has been some compliance, staff recommends the City consider stronger
actions to collect from those operators who do not respond to permitting and tax collection
efforts and thus ensure compliance with adopted city policies and that there is a fair playing field
so to speak relative to brick and mortar lodging opportunities.
Actions to Collect
As a charter city, the City has the plenary power to legislate on matters of municipal affairs.
This power includes the ability to impose, administer and collect taxes. Further, Government
Code section 43000 and 43001 provide that a city may make an ordinance allowing for the
assessment, levy and collection of city taxes. Therefore, staff is recommending that, if the
amount of tax due is not paid, the tax administrator may submit a request to the City Council to
approve a resolution certifying the amounts of any liens being sought against an operator. After
receiving the requisite City Council approval, the tax administrator may take the necessary steps
to enforce the lien, which includes but is not limited to, requesting the O ffice of the San Luis
Obispo County Recorder to record a Notice of Lien. This process coincides and mirrors the
adopted current policy and practice by which the City collects unpaid fines and other debts
related to code enforcement, fire safety, and solid waste violations.
Appeal
The ordinance currently allows customers to appeal to the Council by filing a notice of appeal
with the City Clerk’s office within fifteen days of the Tax Administrator’s decision. Clarification
on the contents to appeal and the hearing procedures were added as ordinance revisions. Given
the importance of the tax and its revenue stream to the City’s General Fund, staff does not
recommend changing this practice. As it is also a matter of creating fair competition amongst the
lodging industry by enforcing the same dues on all short-term rental operators, an appeal before
Council will allow the public to better understand the City’s efforts that are affecting
neighborhoods. If Council would like to place appeals in before the City’s administrative body,
staff can return with any recommended actions and changes to city practices and policies.
Policy Context
The ordinance to collect TOT was implemented in 1955. The tax was assessed at 10% of room
rent and is applicable for all stays under 30 days. Chapter 3.04 of the City’s Municipal Code is
the governing document for TOT.
Public Engagement
Consistent with the City’s Municipal code, a legal ad was published in the New Times 10 days
prior to the Council meeting. Public comment on the item can be provided to the City Council
through written correspondence prior to the meeting and through public testimony at the
meeting.
Tourism Business Improvement District Board (TBID)
The City’s advisory body for tourism is staffed by members of the local lodging industry. The
enforcement of TOT from homestays has been a frequent topic as places equality amongst all
lodging establishments. The proposed changes were presented to the TBID board on November
13, 2019 and the board is in support of the changes to the TOT chapter as recommended.
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CONCURRENCE
The Finance Department communicates directly with Code Enforcement to identify non-
compliant operators and customers with delinquent taxes. The Finance Department, Community
Development Department, and the City Attorney’s office have been working closely to
accomplish a process to enforce homestay compliance.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2019-20
Funding Identified: Yes
Fiscal Analysis:
Funding Sources Current FY Cost
Annualized
On-going Cost
Total Project
Cost
General Fund $16,333
State
Federal
Fees
Other:
Total $16,333
The City has a current contract with the company assisting with the enforcement of homestay
operators. The contractual amount is $16,333 and has been budgeted for in 2019-20 in the
Community Development operating budget.
The proposed revisions are anticipated to have a positive fiscal impact because they sh ould
clarify and streamline the collection process and result in increased revenue from collection of
operators who have not remitted TOT thus far. It will also help enforce homestay compliance
with the City’s permitting requirement.
However, there is a cost associated with the cases heard by the City Council which would be
absorbed by current appropriated budget. The City intends to work with operators and rectify
appeals at the Tax Administrator level before they proceed to Council. If undue burden is p ut on
the City Council from TOT appeals, further changes to the ordinance will be made to change the
appeal process. Because homestay enforcement is such a new process for the City, staff believes
it would be most effective to leave the appeals process as currently written until it can gauge the
response from operators.
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ALTERNATIVES
1. Do not adopt and implement the recommended Code revisions. This is not recommended
because it will limit finance tax collection effectiveness.
2. Provide changes to the proposed ordinance and introduce the ordinance for a first reading.
Attachments:
a - Revised TOT Ordinance
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ORDINANCE NO. _____ (2020 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING SECTIONS 3.04.020, SECTION
3.04.080, SECTION 3.04.090, SECTION 3.04.100 AND SECTION 3.04.130
OF MUNICIPAL CODE TITLE 3.04 – TRANSIENT OCCUPANCY TAX
WHEREAS, the City of San Luis Obispo adopted its transient occupancy tax in 1955; and
WHEREAS, since then the lodging industry has changed significantly through the
availability of homestay rentals; and
WHEREAS, the City’s ordinance governing the lodging tax requires amendment to
address some of the unique circumstances surrounding homestays; and
WHEREAS, the City of San Luis Obispo amends designated portions of its Municipal
Code Title 3.04 – Transient Occupancy Tax.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Recitals. The above recitals are true and correct and are incorporated herein
as the findings of the Council by this reference.
SECTION 2. Section 3.04.020 of the San Luis Obispo Municipal Code, entitled
Definitions, is hereby amended to read as follows:
3.04.020 Definitions
Except where the context otherwise requires, the definitions given in this section govern
the construction of this chapter:
A. “Effective Date of Tax Administrator’s Decision” The date specified in the tax
administrator’s decision as the effective date. Generally, the effective date will be the date the tax
administrator’s decision is issued.
B. “Hotel” means any structure, or any portion of any structure, which is occupied or
intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and
includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging ouse,
rooming house, apartment house, a homestay, dormitory, public or private club, mobile home or
house trailer at a fixed location, or other similar structure or portion thereof.
C. “Occupancy” means the use or possession, or the right to the use or possession of any
room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping purposes.
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D. “Operator” means the person who is proprietor of the hotel, whether in the capacity of
owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the
operator performs his or her functions through a managing agent of any type or character other
than an employee, the managing agent shall also be deemed an operator for the purposes of this
chapter and shall have the same duties and liabilities as his or her principal. Compliance with the
provisions of this chapter by either the principal or the managing agent shall, however, be
considered to be compliance by both.
E. “Person” means any individual, firm, partnership, joint venture, association, social club,
fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver,
trustee, syndicate, or any other group or combination acting as a unit.
F. “Rent” means the consideration charged, whether or not received, for the occupancy of
a space in a hotel valued in money, whether to be received in money, goods, labor or otherwise,
including all receipts, cash, credits and property and services of any kind or nature, without any
deduction therefrom whatsoever.
G. “Tax administrator” means the city tax collector or city finance director, or his or her
designee, for the City of San Luis Obispo.
H. “Transient” means any person who exercises occupancy or is entitled to occupancy by
reason of concession, permit, right of access, license or other agreement for a period of thirty
consecutive calendar days or less, counting portions of calendar days as full days. Any such person
so occupying space in a hotel shall be deemed to be a transient until the period of thirty days has
expired unless there is an agreement in writing between the operator and the occupant providing
for a longer period of occupancy. In determining whether a person is a transient, uninterrupted
periods of time extending both prior and subsequent to the effective date of this chapter may be
considered. (Prior code § 2551)
SECTION 3. Section 3.04.080 of the San Luis Obispo Municipal Code, entitled
Delinquencies and penalties, is hereby amended to read as follows:
3.04.080 Delinquencies and penalties
A. Delinquency. Any operator who fails to remit any tax imposed by this chapter within
the time required shall pay a penalty the amount of which will be set by the tax administrator or
by resolution of the city council.
SECTION 4. Section 3.04.090 of the San Luis Obispo Municipal Code, entitled Failure
to collect and report tax—Determination of tax by tax administrator, is hereby amended to read as
follows:
3.04.090 Failure to collect and report tax—Determination of tax by tax administrator
If any operator fails or refuses to collect the tax and to make, within the time provided in
this chapter, any report and remittance of the tax or any portion thereof required by this chapter,
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the tax administrator shall proceed in such manner as he or she may deem best to obtain facts and
information on which to base his or her estimate of the tax due. As soon as the tax administrator
shall procure such facts and information as he or she is able to obtain upon which to base the
assessment of any tax imposed by this chapter and payable by any operator who has failed or
refused to collect the same and to make such report and remittance, he or she shall proceed to
determine and assess against such operator the tax, interest and penalties provided for by this
chapter. In case such determination is made, the tax administrator shall give a notice of the amount
so assessed by serving it personally or by certified U.S. mail, postage prepaid, addressed to the
operator so assessed at his or her last known place of address. Such operator may within ten days
after the serving or mailing of such notice make application in writing to the tax administrator for
a hearing on the amount assessed. The operator’s application for a hearing must be delivered to
the City of San Luis Obispo’s Finance Department or postmarked within ten days after the serving
or mailing of such notice. If application by the operator for a hearing is not made within the time
prescribed, the tax, interest and penalties, if any, determined by the tax administrator shall become
final and conclusive and immediately due and payable. If such application is made, the tax
administrator shall give not less than five days’ written notice in the manner prescribed herein to
the operator to show cause at a time and place fixed in the notice why the amount specified therein
should not be fixed for such tax, interest and penalties. At such hearing, the operator may appear
and offer evidence why such specified tax, interest and penalties should not be so fixed. After such
hearing the tax administrator shall determine the proper tax to be remitted and shall thereafter give
written notice to the person in the manner prescribed herein of such determination and the amount
of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen
days unless an appeal is taken as provided in Section 3.04.100. (Prior code § 2558)
SECTION 5. Section 3.04.100 of the San Luis Obispo Municipal Code, entitled Appeal,
is hereby amended to read as follows:
3.04.100 Appeal
1. Appeal. Any operator aggrieved by any decision of the tax administrator with
respect to the amount of such tax, interest and penalties, if any, may appeal. To appeal the tax
administrator’s determination, the appellant shall comply with the appeals process as set forth in
Chapter 1.20. to the council by filing a notice of appeal with the city clerk within fifteen days of
the serving or mailing of the determination of tax due. The council shall fix a time and place for
hearing such appeal, and the city clerk shall give notice in writing to such operator at his or her
last known place of address.
2. Contents of Appeal. The written appeal shall state the following information:
a. A caption setting forth the names, addresses, phone numbers and other contact
information of the appellant(s) and the operator, if the appellant and operator are not the same,
participating in the appeal.
b. A brief statement setting forth the interest of the appellant(s), either as the recipient
of the notice of tax administrator’s determination, or the legal interest of the appellant(s) in the
hotel or property that is the subject of the notice of tax administrator’s determination.
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c. A brief statement describing:
i. The specific notice of tax administrator’s determination being appealed, by the
day of the notice of tax administrator’s determination, address of the hotel or
property; and
ii. Whether all or only specified tax, interest, penalties are being appealed; and
iii. Why the tax administrator’s determination should be revoked, modified or
otherwise set aside.
d. A statement that all of the matters alleged in the appeal are true, followed by the
signature(s) of each appellant(s), and one official mailing address for the appellant(s) to receive
further notices from City relating to the appeal.
3. Hearing Procedures for Appeal.
a. Records for Appeal. The tax administrator, or his or her designee, shall ensure that
the tax administrator’s determination and any supporting documentation are delivered to the
applicable city clerk in sufficient time prior to the appeal hearing.
b. Failure to Appear. The failure of the appellant(s) to appear at the hearing, unless
the hearing was continued per subsection g of this section, or unless the appellant(s) has submitted
written evidence per subsection f of this section, shall constitute an abandonment of the appeal.
4. Findings of the Council. The findings of the council shall by final and conclusive and
shall be served upon the appellant in the manner prescribed in Section 3.04.090 for service of
notice of hearing. Any amount found to be due shall be immediately due and payable upon the
service of notice.
SECTION 6. Section 3.04.130 of the San Luis Obispo Municipal Code, entitled Actions
to Collect, is hereby amended to read as follows:
3.04.130 Actions to Collect
1. Actions. Any tax required to be paid by any transient under the provisions of this
chapter shall be deemed a debt owed by the transient to the city. Any such tax collected by an
operator which has not been paid to the city shall be deemed a debt owed by the operato r to the
city. Any person owing money to the city under the provisions of this chapter shall be liable to an
action brought in the name of the city for the recovery of such amount. (Prior code § 2562)
2. Liens. To recover any delinquent tax as a lien on real property, the following conditions
must be met:
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a. The tax administrator must submit to and receive approval from the city council for
a resolution certifying the amounts of the liens sought to be collected from the operator; and
b. The total amount of the delinquent tax against the operator must be delinquent for
sixty days or more.
3. Lien Collections. The tax administrator is authorized to take any steps necessary to
enforce collection of the lien, including but not limited to request the county recorder to record a
notice of any lien certified by resolution of the city council.
4. Notice of Lien Collection Procedures. All notice of the amount so assessed by the tax
administrator or city council shall contain a notice that unpaid taxes, interest and penalties are
subject to the lien collection procedures of this chapter. In addition, the tax administrator shall by
first class mail send notice to each operator and property owner at least ten days before the city
council considers the resolution to certify the amounts of the liens and special assessments stating
the date, time, and location of the meeting. The lien shall be imposed on the date the tax
administrator’s determination or city council’s decision is issued to the responsible person and
shall become effective upon the recording of a notice of lien by the county recorder.
5. Contesting Certification of a Lien. A person may contest the amount or the validity of
any lien for unpaid taxes, interest and penalties at the public hearing when the city council
considers the resolution to certify the liens. Such contests shall be limited to the issue of the amount
or validity of the lien and may not consider whether the delinquency occurred. Pursuit of such a
contest by a person is necessary to exhaust the administrative remedies concerning a legal
challenge to the validity of any such lien.
SECTION 7. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this ordinance, or any other provisions of the City’s rules and regulations.
It is the City’s express intent that each remaining portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
SECTION 8. Environmental Review. The proposed ordinance amendment is exempt
from environmental review requirements of the California Environmental Quality Act (CEQA)
because the adoption of this Ordinance is not a project as defined in CEQA Guidelines Section
15378 because it can be seen with certainty that it will not result in either a direct physical change
in the environment or a reasonably foreseeable indirect physical change in the environment..
SECTION 9. Ordinance Number 1234 (1993 Series) is hereby amended and superseded
to the extent inconsistent herewith.
SECTION 10. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
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New Times, a newspaper published and circulated in this City. This ordinance shall go into effect
at the expiration of thirty (30) days after its final passage.
INTRODUCED on the ____ day of ____, 2020, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2020, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, 2020.
______________________________
Teresa Purrington
City Clerk
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