November 5, 2024 - Measure M

IMPARTIAL ANALYSIS BY CITY ATTORNEY OF MEASURE M

CITY OF NOVATO

MEASURE M
2024 NOVATO TRANSACTIONS AND USE TAX ORDINANCE

Measure M would adopt a general transactions and use tax in the City of Novato at the rate of 0.75% of the sales price for purchases subject to the tax. This is 3/4 of one cent for every dollar spent. This kind of tax is often called a “sales” tax. It would only apply to purchases subject to sales taxes. For example, purchases of prescription drugs, services like medical and dental, and most food would not be taxed.

The money from this tax would go into the City’s general fund and could be used for any lawful general governmental use such as fixing potholes/streets, maintaining 9-1-1 emergency response, crime/gang prevention, attracting/retaining small businesses, maintaining parks/recreation facilities, enhancing wildfire prevention, and repairing aging storm drains.

All revenues raised by Measure M will belong to the City of Novato and will stay local.

Measure M was placed on the ballot by the Novato City Council. It would require an annual independent audit of City receipts from the tax and how they are spent each year. The City Council would discuss the results of the audit during an open meeting and post the audit report on the City’s website. Measure M would also require oversight by a Citizens’ Oversight Committee, which will make recommendations to the City Council regarding those expenditures. Minutes of the Citizens’ Oversight Committee meetings would be placed on the next available regular meeting agenda of the City Council for public inspection and discussion.

A “yes” vote approves and adopts the tax.

A “no” vote rejects the tax.

A simple majority of votes (50% plus 1) will pass or defeat the measure.

s/GARY B. BELL
Novato City Attorney

ARGUMENT IN FAVOR OF MEASURE M

Vote Yes on M for a SAFER and STRONGER Novato.

Novato is at a crossroads: Either we fix our longstanding budget deficit or we make deep cuts to essential city services that keep us safe and protect our quality of life.

Novato maintains over 300 miles of streets, 696 acres of parks, and other infrastructure. Without Measure M, Novato will not be able to fix potholes, keep public areas safe and clean, maintain safe neighborhoods, and maintain rapid 9-1-1 emergency response times at current levels.

Voting Yes on M provides locally controlled funding for local needs. This funding cannot be taken by the State.

Even with Measure M, Novato’s sales tax rate will be the same or less than neighboring communities like San Rafael and Petaluma. Essential purchases like groceries and prescription medicine are exempt. Sales tax is paid by anyone shopping in Novato, not just residents.

Voting Yes on M will:

• Fix potholes and maintain city streets
• Maintain 9-1-1 emergency response and public safety services
• Attract and retain small businesses
• Repair, maintain and improve parks, facilities, and recreation programs
• Reduce the risk of wildfires

Measure M requires strict fiscal accountability and local control:

• By law, every penny stays in Novato and cannot be taken by the State, the County, or other agencies
• Funding will be monitored by an independent oversight committee, which will provide annual reports to the community ensuring funds are spent properly and transparently

Novato is a special place. Let’s keep it that way.

Please join a unanimous City Council, police officers, local business owners, seniors, parents, and other community leaders in voting Yes on M to preserve essential services and our quality of life.

NOVATO CITY COUNCIL
Mark J. Milberg, Mayor

ERIC LUCAN
Marin County Supervisor

NOVATO CHAMBER
Seth Shorett, Board President

DENISE ATHAS
Former Mayor & Local Business Owner

ASHLEY SCHNEIDER
Police Officer & Novato Resident

REBUTTAL TO ARGUMENT IN FAVOR OF MEASURE M

Novato resorts to scare tactics for your vote, threatening public safety cuts and argues its funds are spent with oversight. But the 2023 Marin Grand Jury discovered “there have been lapses in Novato’s financial management to the detriment of Novato and its residents”. For example, Council overrode a unanimous recommendation of the oversight committee not to loan millions to third parties, including a 30-year loan at 2.5%.

Novato provided over $8 million to third parties, like the failed Novato Theater.

This tax increase, projected to bring in $10.3 million in 2025 (over double its deficit) goes to the General Fund which can be used for ANYTHING. Where do YOU think the extra will go?

Incredibly, annual audits have not been timely completed since 2017, costing millions in lost federal grants.

For decades, Novato failed to sell/lease unused properties worth millions.

Novato misinforms you about Novato receiving the lowest percentage of property tax dollars in Marin by failing to explain Novato isn’t responsible for fire or library services like other communities. Accounting for these services makes Novato’s tax share among the highest in the County!

Novato has sufficient funds to operate above current levels through June 2027, allowing voters time to approve a sales tax increase with an end date, like San Rafael and Mill Valley, ensuring accountability with the ultimate guardrail, a sunset clause.

Vote No on M. Require Novato to show fiscal responsibility in expenditures and include what good government demands in taxes, a sunset clause.

PATRICIA RAVITZ
Concerned Citizen

KEVIN CLEEK
Former Novato Planning Commissioner

JULIA LAVARONI
Founder, No Novato Tax Citizen Watchdog Group

GEORGE COHEN
Real Estate Developer

RICK FRAITES
Retired

ARGUMENT AGAINST MEASURE M

Don’t give a blank check with no ending date to a government that doesn’t manage its finances responsibly.

Since 2017, Novato has not gotten timely, independent audits (at one point being three years behind) so Novato missed possibly millions in federal grants. It couldn’t keep track of its own properties and other properties it used, and had to buy one it thought it owned for $5.8 million on an emergency basis when the owner decided to sell.

Novato squandered millions of precious taxpayer funds on a theater, a third, unneeded SMART station, and a 2.5% thirty-year loan.

Novato is a financial mess. A 2023 Marin Civil Grand Jury found Novato’s actions “to the detriment of Novato and its residents”. To recoup those squandered millions, Novato now proposes a regressive sales tax, asking approval of the maximum allowable. Forever.

This ¾% sales tax increase will provide $10.3 million in 2025 (growing over time), even though its budget deficit is $4 million. The money is “for general government use,” which could include better roads and more policing. But the additional revenue MIGHT easily go again to salaries and pensions for additional highly-paid administrators, extravagant consultant fees, wasteful grants and/or more low interest rate third-party loans.

Novato’s proposed forever tax evades the accountability provided by having to get voter approval to renew an expiring tax. Novato refused to include a sunset, whereas San Rafael did so in 2020 and Mill Valley this year.

Novato’s claim that voters can readily repeal the tax is misleading: the cost and effort involved present a near-insurmountable hurdle.

Already struggling with surging sewer, water, gas/electric and insurance bills, taxpayers face a tsunami of additional tax measures in 2024, 2026 and beyond. We should choose wisely when approving more.

Hold Novato accountable. Demand a reasonable alternative. Vote no on this huge perpetual tax increase.

COALITION OF SENSIBLE TAXPAYERS
Mimi Willard, President

BERNARD MEYERS
Former Mayor & Councilmember

DAVID H. GABRIEL
Former Chair, Novato Planning Commission

MICHAEL R. ARNOLD
PhD Economist

TRACEY MONET RUIZ
MBA, Strategic Leadership

REBUTTAL TO ARGUMENT AGAINST MEASURE M

Novato has important decisions to make. If we want to maintain our quality of life, action is needed now.

What kind of city do we want Novato to be? One with good roads, safe and clean parks, rapid 9-1-1 emergency response, and safe neighborhoods? Or one with more potholes, blight, slow emergency response, and more crime? These are not temporary needs, temporary solutions are no longer feasible. Voting Yes on M maintains the essential services that protect our safety and quality of life.

Where do we want our tax dollars to go? Keep them in Novato to address local needs or go elsewhere? Right now, most of the property tax and sales tax we pay doesn’t stay in the city, but 100% of Measure M funding stays in Novato for local needs and can’t be taken away.

Has Novato already made tough decisions? Over 30 staff positions have been eliminated. Investments in our roads and our parks have been drastically reduced. Without Measure M, further cuts will be made that directly impact essential services.

Is Measure M excessive? Novato’s sales tax rate will be the same or less than neighboring communities.

Does Measure M include adequate fiscal controls? By law, Measure M requires an independent oversight committee, annual audits and public spending disclosure.

Arguing about the past isn’t productive. Measure M keeps Novato moving forward. Let’s do this.

Join Novato’s trusted leaders and vote Yes on M to maintain essential services, protect our safety and quality of life.

TIM O’CONNOR
Mayor Pro Tem, City of Novato

DERRICK YOUNG
Police Sergeant, Novato Resident

NANCY KAWATA
Novato Resident

CHERYL PADDACK
Novato Resident

CRISTINA MACKENZIE

FULL TEXT OF MEASURE M

RESOLUTION NO. 2024-071

A RESOLUTION OF THE CITY OF NOVATO PLACING A MEASURE REGARDING A TRANSACTIONS AND USE TAX ON THE BALLOT FOR THE GENERAL MUNICIPAL ELECTION CALLED FOR NOVEMBER 5, 2024

WHEREAS, on July 23, 2024, the Novato City Council adopted a resolution calling for a General Municipal Election to be held on the same day and consolidated with all other applicable elections to be held on November 5, 2024. It is desirable that the election called by this Resolution be consolidated with the City’s General Municipal Election and that, within the City, the precincts, polling places, and election officers of the two elections be the same, and that the Elections Department of the County of Marin canvass the returns of the election and that the election be held in all respects as if there were only one election; and

WHEREAS, the City Council desires to submit a proposal to the voters in the election to impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2; and

WHEREAS, the Novato City Council is authorized by California Elections Code Section 9222 to place the measure before the voters; and

WHEREAS, the measure to be submitted to the voters, if approved by a majority (50% + 1) thereof, would impose a retail transactions and use tax at the rate of 0.75%, proceeds of which may be used for general revenue purposes, and establish an Citizens’ Oversight Committee to review and make recommendations regarding the expenditure of tax proceeds; and

WHEREAS, the proposed ordinance imposing this transactions and use tax is attached hereto as Exhibit A (the “Ordinance”) and is incorporated by this reference; and

WHEREAS, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; and

WHEREAS, Elections Code Section 9282 sets forth the procedures for arguments in favor of or in opposition to any City measure; and

WHEREAS, Elections Code Section 9285 sets forth the procedures for rebuttal arguments; and

WHEREAS, the Election is a regularly scheduled statewide election in which all of the City’s electors are entitled to vote, and in which members of the City Council are up for election or reelection. (Cal. Const., Art. XIII C, § 2, subd. (b); Gov. Code, § 53724, subd. (c).); and

WHEREAS, if the voters approve the Ordinance, the City Council intends to review and analyze the transactions and use (sales) tax proposed by this Resolution ten (10) years after the operative date thereof and every five (5) years thereafter, to consider its continued need.

NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, THE CITY COUNCIL OF THE CITY OF NOVATO DOES HEREBY RESOLVE:

SECTION 1.

The foregoing recitals are true and correct and are hereby adopted by the City Council.

SECTION 2.

Pursuant to California Constitution Article XIII C, Section 2; Government Code Section 53724; and Elections Code Section 9222, the City Council of the City of Novato hereby calls an election at which it shall submit the Ordinance to the qualified voters of the City, as authorized by Revenue and Taxation Code Section 7285.9. This measure shall be designated by letter by the Marin County Elections Department. Pursuant to Election Code Section 10400 et seq, the election for this measure shall be consolidated with the established election to be held on November 5, 2024.

SECTION 2.

The City Council hereby submits the Ordinance to the voters at the Election, and it orders the following question to appear on the ballot for the Election:

Shall the measure continuing locally controlled funding, that the State cannot take away, and maintaining City of Novato’s services, such as: fixing potholes/ streets; maintaining 9-1-1 emergency response, crime/ gang prevention; attracting/ retaining small businesses; maintaining parks/ recreation facilities; enhancing wildfire prevention; and repair aging storm drains; by establishing a 3/4c sales tax in the City of Novato, until ended by voters, for general government use, providing an additional $10,300,000 annually, with citizens’ oversight, independent annual audits be adopted?

YES                             NO

This question requires the approval of a majority of qualified electors casting votes.

SECTION 3.

The City Council hereby approves the Ordinance, the form thereof, and its submission to the voters of the City at the November 5, 2024 election, as required by Revenue and Taxation Code Section 7285.9. The Board of Supervisors of the County of Marin is requested to order the County Clerk to set forth in the voter information portion of all sample ballots to be mailed to the qualified electors of the City the full text of the Ordinance and to mail with the sample ballots to the electors printed copies of the full text of the Ordinance, together with the primary arguments and rebuttal arguments (if any) for and against the measure, and to provide absent voters ballots for the election for use by qualified electors of the City who are entitled thereto in the manner provided by law. The Ordinance specifies that the rate of the transactions tax shall be increased by three quarters of one percent (0.75%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City; it specifies that the rate of the use tax shall be increased by three quarters of one percent (0.75%) of the sales price of tangible personal property stored, used, or otherwise consumed in the City, and that the tax shall remain in effect until repealed by the voters in the future. The State Board of Equalization shall collect the tax from retailers subject to the tax and remit the funds to the City.

SECTION 4.

The City Clerk is authorized, instructed and directed to work with the County Elections Department as needed in order to properly and lawfully conduct the election. Clerk is further directed to file a certified copy of this Resolution with the Marin County Board of Supervisors and with the Elections Department of the County of Marin no later than 88 days before the election. The ballots to be used in the election shall be in form and content as required by law. The County Elections Department is authorized to canvass the returns of the general municipal election and certify the results to the City Council. Thereafter, in accordance with the time prescribed by the Elections Code, the City Council shall declare and cause to be entered in its minutes a statement of the results of the election. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 5.

The Board of Supervisors of the County of Marin is requested to instruct the County Elections Department to provide such services as may be necessary for the holding of the consolidated election. The election shall be held in all respects as if there were only one election. The City of Novato recognizes that the County will incur additional costs because of this consolidation and agrees to reimburse the County for those costs. The City Manager is hereby authorized and directed to expend the necessary funds to pay for the City’s cost of placing the measure on the election ballot and to execute any necessary agreements with Marin County for the election.

SECTION 6.

In accordance with Section 12111 of the Elections Code, the City Clerk is hereby authorized and directed to cause notice of the measure to be published in accordance with State law. The City Clerk may request that the County of Marin Elections Department prepare and publish the required notice.

SECTION 7.

The polls for the election shall be open at 7:00 a.m. on the day of the election and shall remain open continuously from that time until 8:00 p.m. that same day, when the polls shall be closed, except as provided by Section 14401 of the California Elections Code. The notice of the time and place of holding the election is hereby given, and the City Clerk is authorized to give further notice of the election, as required by law.

1. The last day for submission of primary arguments for or against the measure shall be by 5:00 p.m. on August 19, 2024.
2. The last day for submission of rebuttal arguments for or against the measure shall be by 5:00 p.m. on August 26, 2024.
3. Primary arguments shall not exceed three hundred (300) words and shall be signed by not more than five persons.
4. Rebuttal arguments shall not exceed two hundred fifty (250) words and shall be signed by not more than five persons; those persons may be different persons than the persons who signed the primary arguments. This authorization for rebuttal arguments applies only to the next ensuing municipal election and lapses when this election’s results are certified. (Elec. Code, § 9285, subd. (b).)
5. Pursuant to subdivision (b) of Elections Code Section 9282, the Mayor and Mayor Pro Tem are hereby authorized to prepare a written argument and rebuttal in favor of the proposed ordinance on behalf of the City Council. At the Mayor and Mayor Pro Tem’s discretion, the argument may also be signed by bona fide associations or by individual voters who are eligible to vote.
6. Pursuant to California Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a certified copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the measure, not to exceed five hundred (500) words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit the impartial analysis to the Elections Department as required by law by August 19, 2024.
7. Pursuant to California Elections Code Section 9285, when the City Clerk has selected the arguments for and against the measure, which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the measure to the authors of the argument against, and copies of the argument against to the authors of the argument in favor. Rebuttal arguments shall be printed in the same manner as the primary arguments. Each rebuttal argument shall immediately follow the primary argument which it seeks to rebut.

SECTION 8.

The City Clerk is directed to file certified copies of this Resolution with the Board of Supervisors and the County Clerk of the County of Marin, together with the attached ballot measure.

SECTION 9.

The jurisdictional boundaries of the City of Novato have not changed since the last general municipal election.

SECTION 10.

The adoption of this Resolution is exempt from the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq. and California Code of Regulations, title 14, section 15000 et seq. (CEQA Guidelines). The calling of a municipal election is not a project within the meaning of CEQA Guidelines section 15378. Further, the general tax proposed by this Resolution does not “involve any commitment to any specific project which may result in a potentially significant physical impact on the environment,” and adopting it is therefore not a project under CEQA Guidelines section 15378(b)(4).

SECTION 11.

This Resolution shall take effect immediately upon its adoption.

SECTION 12.

The City Clerk shall certify the passage and adoption of this Resolution as required by law.

I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the City Council of the City of Novato, Marin County, California, at a meeting thereof, held on the 23rd day of July, 2024, by the following vote, to wit:

AYES: Councilmembers Eklund, Farac, Wernick, O’Connor, Milberg
NOES: Councilmember:
ABSTAIN: Councilmember:
ABSENT: Councilmember:

s/LAURA MCDOWALL
City Clerk of the City of Novato

Approved as to form:

s/GARY B. BELL
City Attorney of the City of Novato

ORDINANCE NO. 1717

AN ORDINANCE OF THE CITY OF NOVATO IMPOSING A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION AND ADDING SECTION 16-7 TO THE NOVATO MUNICIPAL CODE
THE PEOPLE OF THE CITY OF NOVATO DO ORDAIN AS FOLLOWS:

Section 1. Adoption of Code:

“Section 16-7 Transactions and Use Tax” is hereby adopted to read as follows:

Section 16-7.1. TITLE. This ordinance shall be known as the 2024 Novato Transactions and Use Tax Ordinance. The City of Novato hereinafter shall be called “City.” This ordinance shall be applicable in the incorporated territory of the City.

Section 16-7.2. OPERATIVE DATE. “Operative Date” means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance.

Section 16-7.3. PURPOSE. This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:

1. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
2. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.
3. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefor that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
4. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.

Section 16-7.4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.

Section 16-7.5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0.75% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

Section 16-7.6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.

Section 16-7.7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 0.75% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

Section 16-7.8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

Section 16-7.9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

1. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
   1. The word “State” is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California;
   2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this ordinance.
   3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
      1. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
      2. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.
   4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
2. The word “City” shall be substituted for the word “State” in the phrase “retailer engaged in business in this State” in Section 6203 and in the definition of that phrase in Section 6203.
   1. “A retailer engaged in business in the District” shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.

Section 16-7.10. PERMIT NOT REQUIRED. If a seller’s permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor’s permit shall not be required by this ordinance.

Section 16-7.11. EXEMPTIONS AND EXCLUSIONS.

1. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
2. There are exempted from the computation of the amount of transactions tax the gross receipts from:
   1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
   2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
      1. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and
      2. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
   3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
   4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.
   5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
3. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:
   1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.
   2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.
   3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
   4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.
   5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
   6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.
   7. “A retailer engaged in business in the City” shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.
4. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

Section 16-7.12. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.

Section 16-7.13. TERM. The tax imposed by this ordinance shall be effective until repealed by voters.

Section 16-7.14. CITIZENS’ OVERSIGHT. A five-member Citizens’ Oversight Committee will be created and shall meet annually to review the expenditure of revenues generated by the tax increase imposed under this ordinance and to make recommendations to the City Council regarding those expenditures. The minutes of the meetings of the Citizens’ Oversight Committee shall be provided to the City Council and placed on the next available regular City Council meeting agenda for informational purposes.

Section 16-7.15. AUDIT AND REVIEW. The proceeds of the tax imposed by this Ordinance, as well as the expenditure thereof, shall be audited annually by an independent accounting firm. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City’s website.

Section 16-7.16. ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

Section 2. SEVERABILITY.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 3. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA).

Pursuant to CEQA Guidelines Section 15378(b)(4), adoption of this ordinance as a government funding mechanism is not a project subject to the requirements of CEQA. Prior to commencement of any project that may result from the expenditure of revenues from this tax increase, any necessary environmental review required by CEQA shall be completed.

Section 4. EFFECTIVE DATE.

Pursuant to California Elections Code Section 9222, this ordinance shall take effect only if approved by a majority of the eligible voters of the City of Novato voting at a General Municipal Election to be held on November 5, 2024. It shall be deemed adopted when the City Council has certified the results of that election by resolution and shall take effect ten (10) days thereafter.

Section 5. CERTIFICATION.

The Mayor and City Clerk are hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 5, 2024, by signing where indicated below.

The foregoing ordinance was PASSED, APPROVED AND ADOPTED by the People of the City of Novato voting on November 5, 2024, which vote was certified by the City Council on this ___ day ___ of ___, 2024.

Mark Milberg, Mayor

Attest:

(Signature)

City Clerk