The URL can be used to link to this page

Home My WebLink About02E-City Administrator CITY OF SAN BERN(1'DINO - REQUEST ~ COUNCIL ACTION From: Peggy Ducey Subject: Ordinance of the City of San Bernardino amending Chapter 3.48 of the SB Municipal Code relating to the real property transfer tax. De~: Administration Date: June 12, 1991 Synopsis of Previous Council action: NONE Recommended motion: That further reading of the ordinance be waived and ordinance laid over for final adoption. ure Peggy Ducey Phone: 5122 Contact person: Supporting data attached: Staff Report Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.1 (Acct. DescriPtion) Finance: Council Notes: 75-0262 Agenda Item No. :;6, CITY OF SAN BERtOlDI NO - REQUEST OR COUNCIL ACTION STAFF REPORT section 11.901 of the California Revenue Code allows counties to impose a tax of 0.11% or $1.10 per thousand dollars on the sale of real property. The tax code provides that cities may receive half of the tax, .055% on transactions within the City, as long as it does not pass its own transfer fee. It is proposed that the city of San Bernardino forego its half of the County tax and pass its own transfer fee. The fee is proposed at .22%. By imposing a Documentary Transfer Fee, San Bernardino would lose approximately $250,000 in revenue from the County but will gain almost $1 million (gross) based on the new city fee rate. Accounting for administrative charges, lagged collections and the lost County revenue, San Bernardino expects to net $678,000 for FY 1991-92 (see attached chart). There are a few problems with this fee. First, by passing its own transfer fee, San Bernardino will lose revenue from the County property transfer tax. For the city of San Bernardino, 1989-90 revenues were $272,874. However, if a large enough local fee is passed, the loss can be offset. Another problem is this tax is highly volatile, since the revenue is based upon real estate sales. As you can see from Chart A on the attached page, real estate sales dipped sharply this year, and the trend is not expected to change much in the next year. Consequently, actual revenues may fall short of budget projections. Also, there may be some legal questions as to whether a city can actually charge the fee. There is a State statute that specifically prohibits cities from passing a Documentary Transfer Fee. However, the City of Los Angeles has passed a similar tax, and has taken the position that as a charter city, the state cannot regulate the taxing power of the city. 75-0264 o ~ ;g .co. 0 g 0 0 gJ 0 ~ m ,.. I"- 2 Q ;g ~ I'll il :llO ~ iJI :a:i iJI I'l'I ~ ~ a ~ g: ~ -.j il :llO ~ ril :a:i ril I'l'I re'> ~ ~ ~ 0 '" ZG>co ZG>CO CD~- CDaO _0(0 -cn<c ~ :Illlll\) :Il"'- ~ JJ I ~ :D I :II' CD CD CD CD ~ ::J < iit ::J<iit l:CD.co. l: CD .co. CD ::J .co. CD::JW :tI It fi CD .l:U1 CD . g -:.... '" 0 w UI '" gJ ~ c., 0 0 ~ 0 0 ~ I"- m ~ a g: ~ iit iit '0 I\) I\) $ .co. w '" co -:.... i:n :0 '" 0 ~ '" 0 .... ~ ~ ~ ~~ ~~ ~ -.j'" WUl ",-.j "'''' ~ "':... co~ '" UI wo ~ -.jl\) wo ~ . .... )0 CD :0 l: .... Q (") .. - iil ~ => lii :::;- ~ (') g => ~ ~ iii (") ~ ~ a. " .... 0 0 ii' g. ~ o' PI III ~ => a. ~ III ~ :a:i s. is' CD !" o ~ )0 :0 .... QI ;g ~ (") i;! ~ ~ ~ :t fii (I) ~ i 2 ~ ~ <I) ~ ;g g gJ ~ il :llO ~ ~ :a:i iJI I'l'I co co '" '" - 0 co '" - - - - co co co '" I\) - 0 co ~ ;g 0 i!:O )(!n ~~ ~il :t:110 ~ ~ ~~ I\) I\) iJI .co. w -.j UI '" co I\) w :a:i '" '" '" UI 0 0 -.j co 0 0 .co. I\) 0 i! I"- ~1:1 :t~ 521:1 ~ ~ gJ .co. .co. Q.... .co. w co '" ...."< '" UI '" -- "<fJ) -.j '" - 0 :llO 0 w w -.j I"- UI '" .co. 1-0> m .co. w UI w 0 0 0 0 0 0 0 0 ~ :to> :0 .... :to o i! I"- :0 ~ I"- m i! ~ ~ I"- m ~ :t se Q .... "< 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 o o 1 ORDINANCE NO. 2 AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING CHAPTER 3.48 OF THE SAN BERNARDINO MUNICIPAL CODE RELATING TO THE REAL 3 PROPERTY TRANSFER TAX. 4 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS: 5 6 SECTION 1. Section 3.48.010 of the San Bernardino Municipal Code is hereby amended to read as follows: 7 8 9 "The ordinance codified in this chapter shall be known as the real property transfer tax ordinance of the City. It is adopted pursuant to the authority contained in Part 6.7 (commencing with Section 11901) of Division 2 of the Revenue and Taxation Code of the State. It is also enacted under the authority of Sections 1, 40(e), 40(z), and 41 of the Charter of the City of San Bernardino and other authority held as a Charter City." SECTION 2. Section 3.48.020 of the San Bernardino Municipal Code is hereby amended to read as follows: "There is imposed on each deed, instrument or writing by which any lands, tenements, or other realty sold within the City shall be granted, assigned, transferred or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrances remaining thereon at the time of sale) exceeds one hundred dollars, a tax at the rate of $1.10 for each five hundred dollars or fractional part thereof." III DAB/ses/RealProp.ord June 5, 1991 1 1 o o SECTION 3. Section 3.48.100 of the San Bernardino 2 Municipal Code is hereby amended to read as follows: 10 11 12 3 4 5 6 7 8 9 "The County Recorder shall administer this chapter in conformity with the provisions of Part 6.7 of Division 2 of the Revenue and Taxation Code and the provisions of any county ordinance adopted pursuant thereto. The Mayor of the City of San Bernardino is authorized to negotiate and enter into a contract with the County of San Bernardino or one of its officials for the administration of this chapter and payment to the County for its costs of administration." SECTION 4. Section 3.48.120 is hereby added to the San 13 Bernardino Municipal Code to read as follows: 14 "If the County of San Bernardino does not collect the tax 15 due under this chapter, then the City Clerk shall have the 16 power and duty to enforce all of the provisions of this 17 chapter. In such case the City Tax is due prior to 18 recordation with the County of San Bernardino of any 19 written instrument subject to the Tax." 20 III 21 III 22 III 23 III 24 III 25 III 26 III 27 III 28 III DAB/ses/RealProp.ord June 5, 1991 2 . o o 1 AN ORDINANCE.. . RELATING TO THE REAL PROPERTY TRANSFER TAX. 2 3 I HEREBY CERTIFY that the foregoing ordinance was duly 4 adopted by the Mayor and Common Council of the City of San 5 Bernardino at a meeting thereof, held on the 6 day of , 1991, by the following vote, to wit: 7 Council Members: AYES NAYS ABSTAIN 8 ESTRADA 9 REILLY 10 HERNANDEZ 11 MAUDSLEY 12 MINOR 13 POPE-LUDLAM 14 MILLER 15 16 City Clerk 17 18 19 The foregoing ordinance is hereby approved this day , 1991. of 20 W. R. Holcomb, Mayor City of San Bernardino 21 Approved as to form 22 and legal content: 23 JAMES F. PENMAN, City Attorney 24 25 By: 26 27 28 DAB/seS/Rea1Prop.ord June 5, 1991 3