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Regular-Community Services # 47.
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| Board of Supervisors |
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| Subject |
| Receive updates on the draft Cannabis Land Use Ordinance and Program Environmental Impact Report, cannabis tax receipts and the Cannabis Tax Oversight Committee, and the proposed Early Implementation Development Agreement projects. (No general fund impact) (Echiburu/Strachan) |
| Recommended Action |
| Receive updates on the draft Cannabis Land Use Ordinance and Program Environmental Impact Report, cannabis tax receipts and the Cannabis Tax Oversight Committee, and the proposed Early Implementation Development Agreement projects. |
| Strategic Plan Goal(s) |
Operational Excellence
Safe Communities
Sustainable Environment |
| Reason for Recommended Action/Background |
Status of Cannabis Integrated Program Approach
On January 9, 2018, the Board approved a three-pronged strategy for the County’s cannabis program, consisting of the development of a Cannabis Land Use Ordinance, the June 2018 tax measure, and Early Implementation Development Agreements. Although complementary and part of an integrated program approach, each strategy operates on its own timeline. A schedule of upcoming activities is provided below, followed by a discussion of each program component.
- Development of the draft Cannabis Land Use Ordinance (CLUO): The draft Program Environmental Impact Report (PEIR) and proposed revised draft CLUO are anticipated to be released in September; public outreach meetings will occur after release of draft PEIR in September/October. Additional schedule information for the CLUO and PEIR is provided below.
- Cannabis Tax and Citizen’s Oversight Committee: The first meeting of the Citizen’s Oversight Committee was held on June 13, 2019; The expenditure plan for tax revenues will be provided to the Board in September 2019.
- Early Implementation Development Agreements applications: eight Early Implementation Development Agreement applications and one nursery/processing facility pilot project application were received. For those continuing through the CEQA process, the schedule is dependent on when the applicant begins the CEQA process and the type of CEQA compliance document required. The timeframe could range from approximately October 2019 – April 2020.
Cannabis Land Use Ordinance and Program Environmental Impact Report
The PEIR for the CLUO is currently being prepared. The document will evaluate five project alternatives in an equal level of detail, with the alternatives consisting of different license types, different numbers of licenses, and different buffer distances. This will provide the Board with flexibility in determining the size and scope of the cannabis land use permit program.
Once certified, the PEIR can be relied upon to streamline the environmental review for individual cannabis use permit applications pursuant to Sections 15168 and 15183 of the California Environmental Quality Act (CEQA) Guidelines.
It is anticipated that the draft PEIR will be issued in September. In addition, as a result of the public outreach efforts on the draft CLUO and preparation of the PEIR, staff-proposed modifications to the draft CLUO have been identified. These modifications clarify certain provisions of the draft ordinance, in response to comments that have been received from public and industry reviewers. The proposed revised draft CLUO will also be issued in September, concurrently with the PEIR.
The revised estimated schedule for the activities associated with the PEIR and draft CLUO is as follows:
| Estimated Date |
Activity |
| September |
Release Draft PEIR and proposed revised Draft CLUO |
| September/October |
60-day review period for Draft PEIR and Draft CLUO |
| September/October |
Hold outreach meetings throughout County |
| October |
Planning Commission – Present overview of Draft PEIR/CLUO |
| Late October/Early November |
PEIR Comment period closes |
| January/February |
Planning Commission – Two hearings on Final PEIR/CLUO; Commission makes recommendation to Board of Supervisors
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| February/March |
Board of Supervisors – Meetings/hearings on Final PEIR/CLUO; Board makes final decision
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Cannabis Tax and Citizen’s Oversight Committee
Cannabis Tax
The cannabis business tax went into effect on July 1, 2018. The tax is based on the gross receipts and is currently set at 4% for cultivation and 5% for other cannabis businesses. As of the today, approximately $494,000 in tax receipts have been collected for the first three quarters of fiscal year 2018-19.
To increase tax collection revenues, DFS is sending delinquency notices to licensed cultivators who are delinquent in filing tax returns to notify them of the cannabis tax payment requirements and the penalties accruing on unpaid amounts. These are be mailed out each quarter in which tax returns are not filed by licensed businesses. Prior to this, a total of four education sessions have occurred during the 2018-19 fiscal year with two shortly after the Tax measure was adopted and two more recently on an overview of the tax requirements in March/April, 2019.
In addition, tax collection staff are working with the Cannabis Task Force to compare track and trace data with tax payment information submitted by cultivators to determine if there are unpaid amounts and if self-reporting is accurate. When discrepancies are found, the Tax Collector will mail tax assessments to under-reporting businesses. DFS staff are continuing to be engaged in the California Cannabis Authority (CCA) to support it being operational in Yolo County which will provide additional data to ensure that all tax amounts from businesses are being collected.
Citizen’s Oversight Committee
On July 24, 2018, the Board approved a resolution establishing a Cannabis Business Tax Citizen’s Oversight Committee to act in an advisory role to the Board of Supervisors in reviewing the annual revenue and expenditure of revenues from the cannabis tax, including an annual expenditure plan, and reviewing an annual accounting of the previous year’s expenditures. On January 15, 2019, the Board adopted the Cannabis Business Tax Citizen’s Oversight Committee Code of Ethics and Values. The Board also adopted the final framework for developing an expenditure plan for cannabis tax revenues.
The Committee consists of seven members. Five members of the committee, one appointed per Board member, have been ratified by the Board. The two additional committee members will be nominated by the initial five Committee members and appointed by the Board. The first meeting of the Committee was held on June 13, 2019. The Committee nominated Reagan Overholt and Linda Deos as the two Committee nominated members; both of whom will be brought to the Board for ratification on June 25, 2019. Staff is in the process of drafting the cannabis tax expenditure plan, which will be brought to the Committee for review and feedback in August, so the Board can take final action to appropriate cannabis tax revenue during the September budget hearing for spending in fiscal year 2019-2020.
Early Implementation Development Agreements
Eight Early Implementation Development Agreement applications (including two who also submitted nursery/processing facility pilot project applications) and one nursery/processing facility pilot project application were received. At this time, the status of the applications is as follows:
- Three applicants have formally requested to have their projects placed on hold
- Two applicants are determining whether to move forward with their proposed projects
- Four projects are in the CEQA process
For those applicants in the CEQA process, the schedule is dependent on when the applicant began the CEQA process and the type of CEQA compliance document required to be prepared. The timeframe could range from approximately October 2019 – April 2020. |
| Collaborations (including Board advisory groups and external partner agencies) |
| County Administrator's Office, County Counsel's Office, Department of Financial Services, Department of Community Services, Cannabis Task Force |
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