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INTER OFFICE MEMORANDUM
OFFICE OF THE CITY ATTORNEY
CITY OF SAN BERNARDINO
TO: MAYOR AND COMMON COUNCIL
FROM: John F. Wilson, Senior Assistant City Attorney
DATE: August 16, 2010
RE: California Housing Foundation; Business License Exemption
CC: James Penman, City Attorney
Rachel Clark, City Clerk
Charles McNeely, City Manager
The California Housing Foundation is exempt from the requirement to obtain a business
registration certificate.
On July 19, 2010, the California Housing Foundation came to the attention of the City
Council as the owner of a parcel of land against which a lien was to be placed to secure payment of
delinquent business registration fees per Municipal Code Section 5.04.076. At that time it was
recalled that the Foundation had received Agency assistance to purchase a residence as a home for
developmentally disabled persons. Their name was withdrawn from the list for further evaluation
of their status.
San Bernardino Municipal Code Section 5.04.630 provides in pertinent part that:
The provisions of this Article relating to business registration certificates and fees therefore
shall not apply to any bona fide nonprofit charitable, fraternal or religious corporation...or
organization when the proceeds of the activities covered by the exemption are to be used for
the lawful purposes of the organization; provided, however, that no exemption under this
Article shall be valid unless application therefore has been made in writing to the City Clerk,
and a certificate of exemption issued by the City Clerk,which certificate shall cover a period
of no more than one year....
With the assistance of the EDA, it has been determined that the Foundation is a 501(c)(3)
nonprofit organization. It procures housing for persons requiring living arrangements with a high
level of support. The service in these homes is provided by a second non-profit which pays the
Foundation under a lease. The lease proceeds go to pay down the mortgage on the property,to pay
utilities,and for property maintenance. The available evidence supports the finding that,the money
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collected by the Foundation supports its purpose as a non-profit.
The Foundation had not made application with the City Clerk for an exemptionbased on their
reading of California Health and Safety Code Sections 1566.3(a)and(b). That law essentially states
that residential care facilities of six or less residents (not including staff) shall be treated by local
jurisdictions as a home occupied by a family, and not as a home occupation.
I have been informed that the Foundation has now made application for an exemption.
John F. Wilson
Senior Assistant City Attorney
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