Ord 2002 - Amending Article III, Chapter 25 of the Town Code Explicitly Establish a Public Trust on Transient Occupancy Taxes Collected By Hotel and Motel OperatorsORDINANCE 2002
ORDINANCE OF THE TOWN OF LOS GATOS
AMENDING ARTICLE III, CHAPTER 25 OF THE TOWN CODE TO EXPLICITLY
ESTABLISH A PUBLIC TRUST ON TRANSIENT OCCUPANCY TAXES COLLECTED
BY HOTEL AND MOTEL OPERATORS
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS
FOLLOWS:
SECTION I
Current Federal Bankruptcy law is unclear on when an ordinance establishes that a public
trust is established over monies collected by a hotel or motel operator as transient occupancy taxes.
This means that an operator may convert those tax monies to personal use and a Bankruptcy trustee
can recover a subsequent repayment to the Town if made within designated periods before the filing
r
of a bankruptcy petition. The Council - asserts - that the existing ordinance and State law establishes
that transient occupancy taxes collected by a hotel or motel operator are public monies and not
property of the operator. This ordinance is intended to make that ordinance more explicit with
regard to the ownership of the monies.
SECTION II
Section 25.30.060(a) is amended to read as follows:
Sec. 25.30.060. Collection of Tax
(a) Actions to collect. Any tax required to be paid by any transient under the provisions of
this article shall be deemed to be a debt owed by the transient to the Town. The amount of the tax
collected by the operator shall be held to be a special fund in trust for the Town of Los Gatos and
shall be deemed to be public monies upon collection. Upon proper notice, the Town may require
the person collecting the tax to deposit such amount in a separate account in a federally or state
chartered bank located in California and keep the amount of such taxes in that account until payment
over to the Town; however, whether the collected taxes are placed in a separate account or not shall
have no effect on the trust obligation of the person collecting the tax to hold and remit the taxes to
the Town. Any person owing money to the Town under the provisions of this article shall be liable
to an action brought in the name of the Town for the recovery of such amount.
=0K63 e 1811
This ordinance was introduced at a regular meeting of the Town Council of the Town of Los
Gatos on August 7, 1995 and adopted by the following vote as an ordinance of the Town of Los
Gatos at a regular meeting of the Town Council of the Town of Los Gatos on September 5, 1995.
This ordinance takes effect immediately pursuant to Government Code § 36937(d) as it relates to
taxes for the usual and customary expenses of the Town.
COUNCIL MEMBERS:
AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Linda Lubeck,
Mayor Patrick O'Laughlin
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED: k4 N1
MAYOR OF THE TOWN F LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
NASHARMOCCUPTAKORD