Desert Hot Springs Municipal Code Ch. 3.38 Lost Cultivation Crop Waiver

The definitions contained in Chapters 5.50 and 17.180 of this Code shall apply, except as otherwise stated in this chapter.

(Ord. 800, 4/16/2024)

The City, in its sole discretion, may grant a lost cultivation crop tax waiver to a cannabis cultivation facility that has lost its cannabis crops if the City determines that all of the following eligibility requirements have been met:

A. The cannabis cultivation facility entity has not been granted a lost cultivation crop tax waiver in the prior 12 months.

B. The cannabis cultivation facility is in good standing with the City, with no active Code compliance matters or tax delinquencies.

C. The cannabis cultivation facility has not intentionally caused or significantly contributed to the cause of the failed crop.

D. The failed crop is not the result of a natural disaster or an Act of God.

E. Preventative measures were not readily and reasonably knowable to the cannabis cultivation facility prior to the events leading to the failed crop.

(Ord. 800, 4/16/2024)

A lost cultivation crop tax waiver application shall be rejected if the cannabis cultivation facility fails to meet all of the eligibility requirements.

(Ord. 800, 4/16/2024)

A cannabis cultivation facility desiring or proposing to apply for a lost cultivation tax waiver shall file with the City Manager or designee a written application as so required by the provisions of this chapter. Each such application shall contain clearly and truthfully, under oath or affirmation, set forth and show, in addition to such other information as the City Manager shall require, the following information:

A. The date of the application.

B. The true name of the applicant, and any other names by which the applicant has been known. In the event the applicant is not the legal owner of the entity that holds the regulatory permit, the application must be accompanied with a notarized acknowledgement from the legal owner.

C. The name and address of the cannabis cultivation facility, and evidence that the cannabis facility is duly organized under the applicable laws of the State of California.

D. Authorization for the City Manager or designee to seek verification of the information contained within the application.

E. A statement in writing by the applicant that it certifies under penalty of perjury that all the information contained in the application is true and correct.

F. A statement in writing providing details of the contributing factors that led to the failed crop.

G. Proof of destruction of crop by any of the following:

1. Metrc reporting.

2. Bill of lading.

3. Video of destruction.

H. A mitigation plan that addresses the measures you will put in place to avoid failed crops in the future.

I. If the application is incomplete, the applicant shall have an opportunity to cure the incompleteness within 30 days' written notice by the City Manager or designee. Failure to complete the application within 30 days of written notice shall result in the denial of the application.

J. Any such additional information as deemed necessary by the City Manager or designee to administer this chapter.

(Ord. 800, 4/16/2024)

If an eligible cannabis cultivation facility's lost cultivation crop tax waiver application is approved pursuant to this chapter, the City Manager or designee shall have the sole discretion to determine the amount of the tax waiver pursuant to this chapter and within budgetary limitations, but no greater than $75,000. The City Manager or designee shall make a determination based on the provisions of this chapter, any rules and regulations adopted pursuant to this chapter, and the factual information submitted by the parties or otherwise readily available and shall serve his or her written determination by first-class mail, postage prepaid, to the cannabis cultivation facility operator to the entity's business address and to the property owner's address as shown on the last equalized assessment roll.

A. Waiver Benefit Amount Determining Factors. The City will grant waiver benefits in an amount up to $75,000 based on the following factors:

1. The total calculation of cultivation square footage of the lost cultivation crop.

a. This calculation will be based on the proof of destruction provided by the applicant.

2. The total cultivation tax liability for of cultivation square footage of the lost cultivation crop.

(Ord. 800, 4/16/2024)

The City Manager or designee shall deny a lost cultivation crop waiver upon making any of the findings.

A. The cannabis facility is not eligible under this chapter.

B. The applicant or owner(s) made one or more oral or written misrepresentations or omissions.

C. The cannabis facility does not possess an active license State license with the Department of Cannabis Control.

D. The cannabis facility does not possess an active regulatory permit.

E. The cannabis facility or property owner has an active Code compliance matter.

F. The cannabis facility is delinquent in cultivation tax for periods prior to the lost cultivation crop.

G. Any violation of this Municipal Code.

H. Any other condition specified by law.

I. If the City Manager or designee denies an application, a written notice specifying the reasons for denial shall be issued to the applicant. The City Manager or designee's decision shall be final unless the applicant appeals pursuant to Section 3.38.050 within 14 calendar days of the date of service of the City Manager's or designee's decision.

(Ord. 800, 4/16/2024)

A. Within 14 calendar days after the date of a decision of the City Manager or designee to deny an application, an aggrieved applicant may appeal such action to a hearing officer by filing a written appeal with the City Clerk setting forth the reasons why the decision was not proper.

B. The City Manager or designee shall select the hearing officer. Hearing officers shall be impartial third parties and shall not have any pecuniary interest in the proceeding over which he or she is presiding, nor any pecuniary interest in the outcome thereof.

C. As soon as practicable but allowing sufficient time for providing notice of the hearing, the hearing officer shall fix a date, time and place for the hearing of the appeal and shall instruct the citing officer of the same. The City shall prepare and serve a notice of hearing, which shall be in substantially the same form as follows:

You are hereby notified that a hearing will be held before the Administrative Hearing Officer at _____ on the _____ day of _____, _____ at the hour of _____ concerning your appeal filed pursuant to Section 3.38.050 of the Desert Hot Springs Municipal Code. You may be present at the hearing. You may be, but need not be, represented by an attorney. You may present any relevant evidence at the hearing and you will be given a full opportunity to cross-examine all witnesses testifying against you.

D. The City shall cause a copy of the notice of hearing to be provided to each appellant either by causing a copy of the notice to be delivered to each appellant personally or by causing a copy of the notice to be delivered by certified mail, postage prepaid, return receipt requested, and addressed to each appellant at the address shown on the appeal.

E. At the hearing, the hearing officer shall hear any evidence offered either in support of, or against, appellant's claim, provided such evidence is relevant to the issues of the hearing. The hearing officer has the authority to determine the relevance of any evidence to the hearing and shall not be limited by the technical rules of evidence. The hearing officer also has the authority to exclude unduly repetitious and cumulative evidence, regardless of its relevancy.

F. Each party appearing at the hearing shall have the following rights:

1. To call and examine witnesses;

2. To introduce documentary and physical evidence;

3. To cross-examine opposing witnesses;

4. To impeach any witness regardless of which party first called the witness to testify;

5. To rebut evidence; and

6. To be represented by anyone who is lawfully permitted to do so.

G. The hearing officer shall issue a written decision within 30 days following the conclusion of the hearing. The hearing officer shall cause a copy of the decision and compliance order to be served to each appellant either by causing a copy of the decision to be delivered to each appellant personally or by causing a copy to be delivered by first class mail, postage prepaid, and addressed to each appellant at the address shown on the appeal. The decision of the hearing officer shall be final.

H. Any appeal of the hearing officer's decision shall be conducted pursuant to the California Code of Civil Procedure.

(Ord. 800, 4/16/2024)