HomeMy WebLinkAboutOrdinance #3729 ORDINANCE NO. 3 7 2 9
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING ORDINANCE NOS. 3653 AND 3663 BY DELETING THE
ADMINISTRATIVE APPEAL PROCEDURE, AND PERMITTING TAXPAYERS
TO DIRECTLY APPEAL TO SUPERIOR COURT ANY DENIAL OF
PROPERTY TAX REFUND CLAIMS FILED IN CONNECTION WITH THE
CASE ENTITLED HOWARD JAR VIS TAXPAYERS ASSOCIATION V. CITY OF
HUNTINGTON BEACH, ORANGE COUNTY SUPERIOR COURT CASE NO. 818780
WHEREAS, since at least 1966, the Huntington Beach City Charter has authorized, and
the City Council has levied a separate property tax to pay for City employee retirement benefits
(the "Retirement Tax"); and
WHEREAS, Proposition 13 was adopted in 1978, limiting property taxes to 1% of full
cash value, but also authorizing taxes exceeding the limit to repay"any indebtedness approved
by the voters prior to July 1, 1978." In the case entitled Carman v. Alvord(1982)31 Cal.3d 318,
the California Supreme Court interpreted"indebtedness"under Proposition 13 to permit the City
and other similar situated cities to continue to levy a Retirement Tax above the 1% limit; and
WHEREAS, prior to 1981,the Retirement Tax rate fluctuated from year to year. Since
Fiscal Year 1980-1981 through Fiscal Year 2000-2001, City levied the Retirement Tax on all
taxable property within Huntington Beach of at the rate of.0493%; and
WHEREAS, from Fiscal Year 1997-1998 through 2000-2001, the City used a portion of
the Retirement Tax to pay for retirement obligations the City agreed to provide after 1978; and
WHEREAS, in Howard Jarvis Taxpayers Association v. County of Orange and Real Party
in Interest, City of Huntington Beach (Orange County Superior Court Case No. 8187 80, Court
of Appeal, Fourth District, Case No. G029292), the Court determined that under Proposition 13,
the City was only permitted the Retirement Tax to pay for retirement benefits the City agreed to
provide before July 1, 1978; and
WHEREAS,pursuant to Revenue and Taxation Code Section 5097(a)(2), the statute of
limitations to file all claims for tax refunds is four years after the tax was paid. Consequently,
for Retirement Taxes paid for tax year 1997-98,the four years expired in April 2002, and for a
Retirement Taxes paid for tax year 2000-01,the four years expired in April 2005; and
WHEREAS, City adopted Ordinance No. 3653 on May 3, 2004, establishing procedures
to refund the invalid portion of the Retirement Tax to those taxpayers (or their guardians,
executors or administrators)who file valid claims. The City Council later amended Ordinance
No. 3653 pursuant to Ordinance No. 3663; and
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WHEREAS, pursuant to Ordinance No. 3653,the City extended the limitation period to
January 4, 2004, or four years after the tax was paid, which ever is later. This extended the
limitation period until almost five months after the Court of Appeals determined the legality of
the Retirement Tax; and
WHEREAS, Ordinance No. 3653 directed the City Administrator, or his/her designee,to
approve all"valid" claims. A valid claim is one that was: (1)verified by the person who paid the
tax, his or her guardian, executor, or administrator, and (2)filed within four years after making
of the payment of the Retirement Tax, provided that no claim for a refund filed on or before
January 4, 2004, shall be treated as untimely; and
WHEREAS, Ordinance No. 3653 created an administrative appeal process to review
claims the City Administrator denied; and
WHEREAS, between March 4, 2005 and April 17, 2005, a hearing officer acted upon 20
appeals and the City was able to settle an additional 17 appeals; and
WHEREAS,the City still receives occasional refund claims, but it is now
administratively more efficient to allow the claimant to proceed directly to court without an
intermediate administrative appeal.
NOW, THEREFORE,the City Council of the City of Huntington Beach does hereby
amend Ordinance No. 3653, as amended by Ordinance No. 3663, in its entirety to read as
follows:
SECTION 1. The City Administrator is directed to approve all valid claims for refund of
the Retirement Tax between 1997-1998 to the present, provided that no refund shall be paid
unless the taxpayer or his or her guardian, conservator, executor or administrator has submitted a
written claim, under penalty of perjury, to the City within four years of the overpayment or
erroneous or illegal collection of said tax, except as provided for at Section 3.
SECTION 2. The City Treasurer shall pay all Retirement Tax claims approved by City.
A payment of a Retirement Tax claim by City will constitute payment in full on such claim.
SECTION 3. Pursuant to Section 5097 of the Revenue& Taxation Code, the City
Administrator shall approve claims for a refund of Retirement Tax if the claim was: (1)verified
by the person who paid the tax, his or her guardian, executor,or administrator, and(2)filed
within four years after making of the payment of the Retirement Tax, provided that no claim for
a refund filed on or before January 4, 2004, shall be treated as untimely. Otherwise, the City
Administrator shall deny the claim and provide written notice to the claimant of the denial and
the time and manner by which the claimant may appeal.
SECTION 4. The City Administrator shall request a claimant to submit a corrected
claim if he determines their claim form is incomplete or additional information is necessary to
verify the claim. The corrected claim/additional information must be mailed and postmarked to
the City, or otherwise delivered to the City within 35 days after the request was dated. If a
corrected claim is not received by the 35th day, it shall be deemed denied.
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Ord. #3729
SECTION 5. Refunds shall be paid according to the amount of Retirement Tax paid.
The percentage of the Tax to be refunded is:
FY % of tax collected that is to be refunded
1997-98 31.8%
1998-99 41.9%
1999-00 84.5%
2000-01 100%
SECTION 6. Interest shall be paid on Retirement Tax refunds, pursuant to California
Revenue & Taxation Code Section 5151, which specifies that interest is due if at least ten dollars
($10) or more of interest is due. Simple interest shall be paid on all refunds from April 2, 2001,
or the date the Retirement Tax was paid,whichever is later,through 30 days prior to issuance of
the refund checks. The interest rate shall be 3.86% for the one year from April 2001 through
March 2002, and 3%per year thereafter. For purposes of determining if at least $10 in interest is
due, the interest shall be accumulated for all tax years that a single claimant seeks a refund for a
single parcel.
SECTION 7. All refunds shall be reduced by the claimant's proportionate share of the
$250,000 paid in attorneys fees.
SECTION 8. If the claimant was late paying the Retirement Tax for the year claimed,
the proportionate share of any interest or penalties paid to the County associated with the
Retirement Tax overpaid shall be refunded.
SECTION 9.
(a) Any person aggrieved by any decision of the City Administrator shall be required
to comply with the appeals procedure of this section. Compliance with this section shall be a
prerequisite to a suit thereon. [See Revenue & Taxation Code § 5141.1 Nothing herein shall
permit the filing of a claim or action on behalf of a class or group of taxpayers.
(b) If any person is aggrieved by any decision of the City Administrator,he or she
may appeal by filing a notice of appeal with the City Clerk within fourteen(14) days of the date
of the decision.
(c) The matter shall be set for hearing no more than ninety(90) days from the receipt
of the appeal. The appellant shall be served with notice of the time and place of the hearing, as
well as any relevant materials, at least thirty (30) calendar days prior to the hearing. The hearing
may be continued from time to time upon mutual consent. At the time of the hearing,the
claimant,the City Administrator, and any other interested person may present such relevant
evidence as he or she may have relating to the determination from which the appeal is taken.
(d) Based upon the submission of such evidence and the review of the City's files,the
Hearing Officer shall issue a written notice and order upholding, modifying or reversing the
determination from which the appeal is taken. The notice shall be given within fourteen(14)
days after the conclusion of the hearing and shall state the reasons for the decision. The notice
shall specify that the decision is final and that any suit for judicial review pursuant to Revenue&
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Ord. #3729
Taxation Code § 5141 shall be filed within six months from the date of the decision. If the
Hearing Officer fails or refuses to act on a refund claim within the fourteen (14) day period,the
claim shall be deemed to have been rejected on the fourteenth(14th) day.
(e) All notices under this section may be sent by certified mail,return receipt
requested.
(f) The City Administrator, in consultation with the City Attorney, shall appoint the
Hearing Officer.
SECTION 10. Notwithstanding Section 9, no administrative appeal shall be available to
any person whose claim was denied after December 1,2005, or whose appeal was pending as of
December 1, 2005. Instead, any such person shall be given notice when their appeal is denied
that they may bring an action in the Orange County Superior Court to recover the Retirement
Tax,pursuant to Revenue and Taxation Code Section 5140, and that any such action must be
commenced within six (6)months after the City has denied the claim pursuant to Revenue and
Taxation Code Section 5140.
SECTION 11. The City Administrator, in consultation with the City Attorney, may
adopt regulations to implement this Ordinance. The City Administrator may designate in writing
any other person to perform the functions delegated to the City Administrator pursuant to this
Ordinance.
SECTION 12. This Ordinance supercedes Resolution No. 2001-19, Ordinance No.
3653, and Ordinance No. 3663.
SECTION 13. This Ordinance shall become effective 30 days after its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 21 st day of February , 2006.
Mayor
A PROVED AS TO FORM:
City Clerk City Attorney 01
INITIATED AND APPROVED:
r' C' y Administrator
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Ord. No. 3729
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of Huntington
Beach is seven;that the foregoing ordinance was read to said City Council at a regular
meeting thereof held on the 6th day of February,2006, and was again read to said City
Council at a re ular meeting thereof held on the 21st day of February,2006, and was
passed and adopted by the affirmative vote of at least a majority of all the members of
said City Council.
AYES: Bohr, Green, Coerper, Sullivan, Hardy, Hansen, Cook
NOES: None
ABSENT: None
ABSTAIN: None
I,Joan L.Flynn,CITY CLERK of the City of Huntington
Beach and ex-officio Clerk of the City Council,do hereby
certify that a synopsis of this ordinance has been
published in the Huntington Beach Fountain Valley
Independent on March 2,2006.
In accordance with the City Charter of said City
Joan L. Flynn, Cily Clerk CJU Clerk and ex-officio 6ferk
Deputy city clerk of the City Council of the City
of Huntington Beach, California