6�owN 0 MEETING DATE: 12/17//12
ITEM NO: /
cos G os COUNCIL AGENDA REPORT
DATE: December 12, 2012
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: SENATE BILL 1186 STATE MANDATED $1.00 SURCHARGE ON
BUSINESS LICENSES
RECOMMENDATION:
Approve $1.00 increase on Business Licenses per State Mandate.
PURPOSE:
The purpose of this memorandum is to provide information regarding the implementation of a
new State law mandate for a business license surcharge imposed by the State of California,
effective January 1, 2013.
BACKGROUND:
On September 19, 2012, Governor Brown signed Senate Bill (SB) 1186 which imposes a $1.00
state fee on any applicant for a local business license /permit or renewal. The fee is required to
be collected by cities, effective January 1, 2013 and expires on December 31, 2018. As a
component of this Bill, the state sought to bolster the Certified Access Specialist Program
(GASP) administered by the State Architect and local governments.
DISCUSSION:
To provide funding for the GASP, SB 1186 imposes an additional state mandated fee of $1.00 on
"any applicant for a local business license or equivalent instrument or permit, or renewal
thereof." All businesses are subject to this fee including: rental properties, out -of -town
businesses, home - base - businesses, contractors, exempt businesses, and non - profits. SB 1186
divides this money between the State Architect and the Town, at specified percentages, 30% is
PREPARED BY: Step
Director of Fi ance
Reviewed by:Assistant Town Manager Town Attorney - '
_,0fFinance
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: SENATE BILL 1186 $1.00 SURCHARGE ON BUSINESS LICENSES
December 12, 2012
transmitted to the State and 70% is retained by the Town and is restricted for use in its CASP
program and for associated administrative costs.
The bill also requires local entities to transmit to local businesses information regarding
compliance with and legal obligations under federal and state disability laws. The Town will
include this information with its business license renewals, applications and similar instruments.
CONCLUSION:
In order to comply with the legal mandates of SB 1186 the Town of Los Gatos will charge an
additional $1.00 fee on business license renewals, new business applications, and similar
licensing and certification instruments for the 2013 calendar year, and for an additional four
years after that.
ENVIRONMENTAL ASSESSMENT:
This budget report is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The impact of said fee will likely result in a minimal dollar value to the Town, anticipated to be
less than $5,000. The Town's 70% portion of this will be retained and a certified program will
be managed under the Community Development Division. Budget adjustments that may result
from collection of this additional fee will be presented in the mid -year budget report.