Initiative Measure to Be Submitted Directly to the Voters

The City Attorney has prepared the following title and summary of the chief purpose and points of the proposed initiative measure:

CHANGING THE METHOD FOR CALCULATING THE CITY BUSINESS LICENSE FEE TO BE PAID BY MANUFACTURING BUSINESSES;DEFINING WHAT CONSTITUTES “MANUFACTURING” FOR THE PURPOSE OF CALCULATING THE BUSINESS LICENSE FEE; WAIVER OF BUSINESS LICENSE FEE FOR ANY NEW BUSINESS FOR A PERIOD OF UP TO 18 MONTHS; ORDINANCE.

The City of Richmond currently requires all businesses in the City to obtain a business license and pay an annual business license fee, which generates general revenue for the City. The amount of the license fee for most businesses is based on the type of business it conducts, and the number of persons employed by the business. Currently, businesses engaged in manufacturing pay annual license fee equal to $234.10, plus $46.80 per employee for the first 25 employees, plus $40.10 per employee in excess of 25 employees. Under current law, the City Tax Collector is authorized to adopt a regulation providing that a business license may be withheld or revoked when the underlying business activity violates City, state or federal law.

The proposed measure is an ordinance that would change the method for determining the amount of license fee to be paid by businesses engaged in manufacturing. Under this proposed measure, a manufacturer would be required to pay the City the higher of (1) the business fee calculated under the current formula for manufacturing business set forth above, or (2) a business fee equal to one four of one percent (0.25%) of the value of the materials actually used in the manufacturing process during the immediately preceding calendar year.

This proposed measure adds a definition of the term “manufacturing.” The term is defined to mean changing the form, composition or quality of character of some existing material, by procedures commonly regarded as manufacturing, compounding, processing, or assembling, into a material with a different form or use. The proposed measure specifies that manufacturing includes any process of refining or processing hydrocarbons, petroleum or crude oil to produce products for use as fuels, lubricants, solvents, plastics or other products.

The proposed ordinance would waive the business license fee for a new businesses for a period of up to 18 months.

The proposed ordinance would require an Audit Committee appointed by the City Council to annually review the collection of business license fees and issue a report to the City Council concerning the amount collected during the fiscal year and its impact on the City’s ability to provided needed services, facilities and community improvements.

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