Chapter 4.58

REAL PROPERTY CONVEYANCE TAX

Sections:

• 4.58.010 Chapter title and purpose. 4.58.020 Definitions.

• 4.58.030 Who must pay tax.

• 4.58.040 Exemptions - Security for debt.

• 4.58.045 Exemptions - Court order foreclosure.

• 4.58.050 Exemptions - Instruments in lieu of foreclosure.

• 4.58.055 Exemptions - Loans cosigned by family members.

• 4.58.060 Exemptions - Instrument to United States.

• 4.58.070 Exemptions - Plans of reorganization or adjustment.

• 4.58.080 Exemptions - Securities and Exchange Commission orders.

• 4.58.085 Exemptions - Domestic partners.

• 4.58.090 Exemptions - Partnerships.

• 4.58.095 Exemptions - Decree of dissolution or property settlement.

• 4.58.100 Imposition of tax - Amount.

• 4.58.110 Administration of tax - Director of finance authority -Federal regulations applicable.

• 4.58.120 Due dates, delinquency, penalties and interest.

• 4.58.130 Payment - Declaration and records may be required.

• 4.58.140 Determination of deficiency.

• 4.58.150 Notice of determination - Given when.

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§ 4.58.050

• 4.58.160 Notices - Procedures required.

• 4.58.170 Petition for redetermination - Filing time.

• 4.58.180 Petition for redetermination - Consideration or hearing.

• 4.58.190 Hearing - Increase or decrease of determined amount.

• 4.58.200 Finality of determination.

• 4.58.210 Tax deemed a debt to city.

• 4.58.220 Refunds and procedures.

• 4.58.230 Use of tax revenue - Deposit in special fund.

• 4.58.235 Alternative use of tax revenue - Deposit in the special fund.

• 4.58.238 Alternative use of tax revenues.

• 4.58.240 Collection and administration costs.

• 4.58.250 Tax a lien.

• 4.58.260 Notice of public hearing on lien.

• 4.58.270 Public hearing - Liens.

• 4.58.280 Recording of lien.

• 4.58.290 Collection of delinquent taxes as a special assessment.

• 4.58.300 Report of delinquent taxes.

• 4.58.310 Notice of hearing.

• 4.58.320 Administrative hearing - Special assessment.

• 4.58.330 Public hearing - Special assessment.

• 4.58.340 Collection of assessment.

• 4.58.350 Designated body.

• A. This Chapter 4.58 may be cited as the "San José Real Property Conveyance Tax Ordinance."

• B. The tax imposed under this chapter is solely for the purpose of raising revenue. This chapter is not enacted for regulatory purposes.

• (Prior code § 18000.)

As used in this chapter, the terms "real property" and "realty" mean real property as defined by and under the laws of the state of California. (Prior code § 18003.)

Any persons who make a transfer which is subject to the tax imposed under Section 4.58.100, and any persons to whom such a transfer is made, shall be jointly and severally liable for payment of the tax imposed under said Section 4.58.100. (Prior code § 18002.)

Any tax imposed pursuant to this chapter shall not apply to any transfer made solely to secure a debt; provided, however, that nothing herein contained shall be deemed to exclude the amount of any such indebtedness from being included in the "value of the consideration," pursuant to the second paragraph of Section 4.58.100, in connection with transfers which are not made solely to secure a debt.

(Prior code § 18004.)

Any tax imposed pursuant to this chapter shall not apply with respect to any transfers made pursuant to any order by the court in any note, deed of trust or lien foreclosure proceeding or upon execution of a judgment. (Ord. 21581.)

Any tax imposed pursuant to this chapter shall not apply with respect to any transfer to a beneficiary or mortgage which is taken in lieu of a foreclosure. The term "in lieu of foreclosure" means any transfer made with respect to any deed, instrument, or writing to a beneficiary or mortgagee, which is taken from the mortgagor or trustor to prevent the sale of property given as security for performance of an obligation.

(Prior code § 18005; Ord. 21581.)

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§ 4.58.055

• A. The tax imposed pursuant to this chapter shall not apply to any reconveyance of real property from a family member who obtained a legal interest in the real property solely to satisfy a lender's requirement in qualifying for a loan to purchase or refinance that property; and the property is the principal residence of the transferee.

• B. For purposes of this section, the following terms shall have the following meanings:

  1. The phrase "real property" shall mean that real property used by the grantor or transferor of the real property (i) as the grantor's or transferor's principal residence, and (ii) to secure the loan; and

  2. The phrase "lender's requirement" shall mean a loan condition imposed by a lender that the cosigner on the loan share an equal ownership interest in the real property; and

  3. The term "loan" shall mean a loan of money that is needed by the grantor or transferor of the real property to purchase or refinance that real property; and

  4. The term "family member" shall mean, with respect to any individual, only:

     • a. A lineal ancestor of such individual; or

     • b. The spouse of such individual; or c. A lineal descendant of such individual, of such individual's spouse, or of the parent of such individual; or

     • d. The spouse of any lineal descendant described in subparagraph c.; or

     • e. A legally adopted child of the individual or of any family member described in subparagraphs a., b., c., or d.

  5. The term "principal residence" shall mean a dwelling for which a homeowner's exemption or a disabled veteran's residence exemption has been granted in the name

of the eligible grantor or transferor. "Principal residence" includes only that portion of the land underlying the principal residence that consists of an area of reasonable size that is used as a site for the residence. The term "principal residence" shall also include any such definition as may be provided in California Revenue and Taxation Code Section 63.1(b)(1). (Ord. 24936.)

Any transfer to which the United States or any agency or instrumentality thereof, any state or territory, or political subdivision there of, is a party shall be exempt from any tax imposed pursuant to this chapter when the exempt agency is acquiring title.

(Prior code § 18006.)

• A. Any tax imposed pursuant to this chapter shall not apply to the making, delivering or filing of conveyances to make effective any plan of reorganization or adjustment;

  1. Confirmed under the Federal Bankruptcy Act, as amended;

  2. Approved in an equity receivership proceeding in a court involving a railroad corporation, as defined in Subdivision (m) of Section 205 of Title II of the United States Code, as amended;

  3. Approved in an equity receivership proceeding in a court involving a corporation, as defined in Subdivision (3) of Section 506 of Title II of the United States Code, as amended; or

  4. Whereby a mere change in identity, form or place of organization is effected.

• B. Subdivisions 1 through 4, inclusive, of this section shall only apply if the making, delivery

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or filing of instruments of transfer or conveyances occurs within five years from the date of such confirmation, approval or change. (Prior code § 18007.)

Any tax imposed pursuant to this chapter shall not apply to the making or delivery of conveyances to make effective any order of the Securities and Exchange Commission, as defined in Subdivision (a) of Section 1083 of the Internal Revenue Code of 1954; but only if:

• A. The order of the Securities and Exchange Commission in obedience to which such conveyance is made recites that such conveyance is necessary or appropriate to effectuate the provisions of Section 79k of Title 15 of the United States Code, relating to the Public Utility Holding Company Act of 1935;

• B. Such order specifies the property which is ordered to be conveyed;

• C. Such conveyance is made in obedience to such order.

(Prior code § 18008.)

• A. The tax imposed pursuant to this chapter shall not apply to any transfer of real property between domestic partners during the term of their domestic partnership, if the requirements of Section 4.58.085D. are satisfied.

• B. The tax imposed pursuant to this chapter shall not apply to any transfer of real property between domestic partners for the purposes of effecting a division of assets upon the termination of their domestic partnership, provided that such property was acquired by either or both of the domestic partners prior to the termination of the domestic partnership, if the requirements of Section 4.58.085E. are satisfied.

• C. For purposes of this section, "domestic partners" means two individuals who have a cur-

rent declaration of domestic partnership on file with the California Secretary of State pursuant to the Domestic Partner Registration Act, California Family Code Section 297, et. seq., as may be amended, identifying themselves as each other's domestic partner.

• D. Domestic partners transferring real property to one another during the term of their domestic partnership shall be exempt from paying the tax imposed under this chapter if they provide a certified copy of their declaration of domestic partnership to the county recorder, or other evidence deemed sufficient by the director of finance of the city showing that they have a current declaration of domestic partnership on file with the California Secretary of State, at the time the instrument transferring the real property is recorded.

• E. Domestic partners transferring real property to one another for purposes of effecting a division of assets after the termination of their domestic partnership shall be exempt from paying the tax imposed under this chapter if they provide a certified copy of their notice of termination of domestic partnership filed with the California Secretary of State pursuant to the Domestic Partner Registration Act, California Family Code Section 297 et. seq., as may be amended, to the county recorder, or other evidence deemed sufficient by the director of finance of the city showing that they have a current notice of termination on file with the California Secretary of State, at the time the instrument transferring the real property is recorded.

• (Ord. 26611.)

• A. In the case of any realty held by a partnership, no levy shall be imposed pursuant to this chapter by reason of any transfer of an interest in a partnership or otherwise, if:

  1. Such partnership (or another partnership) is considered a continuing partner-

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ship within the meaning of Section 708 of the Internal Revenue Code of 1954, and

2. Such continuing partnership continues to hold the realty concerned.

• B. If there is a termination of any partnership within the meaning of Section 708 of the Internal Revenue Code of 1954, for purposes of this chapter, such partnership shall be treated as having executed an instrument whereby there was transferred, for fair market value, all realty held by such partnership at the time of such termination.

• C. Not more than one tax shall be imposed pursuant to this chapter by reason of a termination described in subsection B above, and any transfer pursuant thereto, with respect to the realty held by such partnership at the time of such termination.

(Prior code § 18009.)

Any tax imposed pursuant to this chapter shall not apply to any transfer of property from one spouse to the other in accordance with the terms of a decree of dissolution or in fulfillment of a property settlement incident thereto; provided, however, that such property was acquired by the husband and wife, or husband or wife prior to the final decree of dissolution. (Ord. 21581.)

• A. A tax is hereby imposed on each transfer, by deed, instrument or writing, by which any lands, tenements, or other real property sold, located in the city, are or is granted, assigned, transferred or otherwise conveyed to, or vested in, a purchaser or purchasers thereof, or any other person or persons at or by the direction of said purchaser or purchasers, when the value of the consideration exceeds one hundred dollars, said tax to be at the rate of one dollar and

sixty-five cents for each five hundred dollars, or fractional part of five hundred dollars, of the value of the consideration.

• B. As used herein, "value of the consideration" means the total consideration, valued in money of the United States, paid or delivered or contracted to be paid or delivered in return for the transfer of real property, including the amount of any indebtedness, existing immediately prior to the transfer which is secured by a lien, deed of trust or other encumbrance on the property conveyed and which continues to be secured by such lien, deed of trust or encumbrance after said transfer, and also including the amount of any indebtedness which is secured by a lien, deed of trust or encumbrance given or placed upon the property in connection with the transfer to secure the payment of the purchase price or any part thereof which remains unpaid at the time of the transfer. "Value of the consideration" also includes the amount of any special assessment levied or imposed upon the property by a public body, district or agency, where said special assessment is a lien or encumbrance on the property and the purchaser or transferee agrees to pay such special assessment or takes the property subject to the lien of such special assessment. The value of any lien or encumbrance of a type other than those which are hereinabove specifically included, existing immediately prior to the transfer and remaining after said transfer, shall not be included in determining the value of the consideration. If the value of the consideration cannot be definitely determined, or is left open to be fixed by future contingencies, "value of the consideration" shall be deemed to mean the fair market value of the property at the time of transfer after deducting the amount of any lien or encumbrance, if any, of a type which would be excluded in determining the value of the consideration pursuant to above provisions of this section.

• (Prior code § 18001.)

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§ 4.58.130

The director of finance of the city (hereinafter in this chapter referred to as "director") shall collect the tax imposed under this chapter and shall otherwise administer this chapter. He may make such rules and regulations, not inconsistent with the chapter, as he may deem reasonably necessary or desirable to administer this chapter. In the administration of this chapter, the director shall interpret its provisions consistently with those Documentary Stamp Tax Regulations adopted by the Internal Revenue Service of the United States Treasury Department which relate to the Tax on Conveyances and identified as Sections 47.4361-1, 47.4361-2 and 47.4362-1 of Part 47 of Title 26 of the Code of Federal Regulations, as the same existed on November 8, 1967, except that for the purposes of this chapter:

• A. The term "realty," as used in said regulations, shall be deemed to mean "real property" as such term is defined by and under the laws of the state of California;

• B. Those provisions of said regulations providing for deduction of the value of any lien or encumbrance existing before the sale and not removed thereby shall not apply;

• C. Those provisions of said regulations relating to the rate of tax shall not apply;

• D. Those provisions of said regulations which conflict with the provisions of this chapter shall not apply.

• (Prior code § 18010.)

The tax imposed under this chapter is due and payable at the time the deed, instrument or writing effecting a transfer subject to the tax is delivered, and is delinquent if unpaid at the time of recordation thereof. In the event that the tax is not paid prior to becoming delinquent, a delinquency penalty of ten percent of the amount of tax due shall

accrue. In the event a portion of the tax is unpaid prior to becoming delinquent, the penalty shall only accrue as to the portion remaining unpaid. An additional penalty of ten percent shall accrue if the tax remains unpaid on the ninetieth day following the date of the original delinquency. Interest shall accrue at the rate of one half of one percent a month, or fraction thereof, on the amount of tax, exclusive of penalties, from the date the tax becomes delinquent to the date of payment. Interest and penalty accrued shall become part of the tax. (Prior code § 18011.)

The tax imposed by this chapter shall be paid to the director by the persons referred to in Section 4.58.030. The director shall have the authority as part of any rules and regulations promulgated by him as provided for herein to require that the payment shall be accompanied by a declaration of the amount of tax due signed by the person paying the tax or by his agent. The declaration shall include a statement that the value of the consideration on which the tax due was computed includes all indebtedness secured by liens, deeds of trust, or other encumbrances remaining or placed on the property transferred at the time of transfer, and also included all special assessments levied or imposed on the property by a public body, district agency which the purchaser or transferee agrees to pay or which remains a lien on the property at the time of transfer. The declaration shall identify the deed, instrument or writing effecting the transfer for which the tax is being paid. The director may require delivery to him of a copy of such deed, instrument or writing whenever he deems such to be reasonably necessary to adequately identify such writing or to administer the provisions of this chapter. The director may rely on the declaration as to the amount of the tax due provided he has no reason to believe that the full amount of the tax due is not shown on the declaration.

Whenever the director has reason to believe that the full amount of tax due is not shown on the

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declaration or has not been paid, he may, by notice served upon any person liable for the tax, require him to furnish a true copy of his records relevant to the value of the consideration or fair market value of the property transferred. Such notice may be served at any time within three years after recordation of the deed, instrument or writing which transfers such property. (Prior code § 18012; Ord. 21581.)

If on the basis of such information as the director receives pursuant to the last paragraph of Section 4.58.130 and/or on the basis of such other relevant information that comes into his possession, the director determines that the amount of tax due as set forth in the declaration, or as paid, is insufficient, he may recompute the tax due on the basis of such information.

If the declaration required by Section 4.58.130 is not submitted, the director may make an estimate of the value of the consideration for the property conveyed and determine the amount of tax to be paid on the basis of any information in his possession or that may come into his possession.

One or more deficiency determinations may be made of the amount due with respect to any transfer.

(Prior code § 18013; Ord. 21581.)

The director shall give notice to a person liable for payment of the tax imposed under this chapter of his determination made under Section 4.58.140. Such notice shall be given within three years after the recordation of the deed, instrument or writing effecting the transfer on which the tax deficiency determination was made.

(Prior code § 18014.)

Any notice required to be given by the director under this chapter may be served personally or by mail; if by mail, service shall be made by depositing the notice in the United States Mail, in a sealed

envelope with postage paid, addressed to the person on whom it is to be served at his address as it appears in the records of the city or as ascertained by the director. The service is complete at the time of the deposit of the notice in the United States Mail, without extension of time for any reason. (Prior code § 18015.)

Any person against whom a determination is made under this chapter, or any person directly interested may petition for a redetermination within sixty days after service upon the person of notice thereof. If a petition of redetermination is not filed within the sixty-day period, the determination becomes final at the expiration of the period. (Prior code § 18016.)

If a petition for redetermination is filed within the sixty-day period, the director shall reconsider the determination and, if the person has so requested in his petition, shall grant the person an oral hearing, and shall give him ten days' notice of the time and place of hearing. The director may designate one or more deputies for the purpose of conducting hearings and may continue a hearing from time to time as may be necessary. (Prior code § 18017.)

The director may decrease or increase the amount of the determination before it becomes final, but the amount may be increased only if a claim for the increase is asserted by the director at or before the hearing. (Prior code § 18018.)

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§ 4.58.230

The order or decision of the director upon a petition for redetermination becomes final thirty days after service upon the petitioner of notice thereof.

(Prior code § 18019.)

The amount of any tax, penalty, and interest imposed under the provisions of this chapter shall be deemed a debt to the city. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. (Prior code § 18020.)

Whenever the amount of any tax, penalty or interest has been overpaid, paid more than once, or has been erroneously, or illegally collected or received by the city under this chapter, it may be refunded to the person who paid the tax provided that a written claim for refund is filed with the director, and the provisions of Chapter 4.82 are satisfied.

(Prior code § 18021; Ord. 27787.)

• A. All of the taxes collected under this chapter shall, subject to the provisions hereinafter set forth, be expended for the acquisition, construction, reconstruction, replacement, remodeling, modification, alteration, enlargement, renovation, furnishing, and refurnishing of the following improvements, including preventive capital maintenance and energy efficient capital improvements, and subject to the limitation set forth below, for operating maintenance of certain of the following improvements, to wit:

  1. City public library facilities, equipment and materials, including land and interests in land, library buildings, furniture, books, circulating or reference nonbook

library materials, furnishings, equipment, parking areas, streets and sidewalks adjacent to city public library facilities, and other works, properties, structures and facilities necessary or convenient for the public library system of the city. Expenditure may also be made for the leasing or rental of books.

2. City fire protection facilities, including land and interests in land, fire stations, fire engines and trucks, other motorized and nonmotorized firefighting equipment, streets and sidewalks adjacent to the city fire protection facilities, and other works, properties, structures and facilities necessary or convenient for the fire protection of the city.

3. City public park, recreation areas and facilities, equipment and materials, including land and interests in land, swimming pools, courts, children's play areas, turf, sprinkler systems, community center and recreation buildings, streets and sidewalks adjacent to city park, playground and recreation facilities, and equipment for maintenance, security, and recreation purposes at city parks, playgrounds, and recreation facilities and other works, properties, structures and facilities necessary or convenient for public park, playground and recreation purposes. Additionally, for any of the facilities described in this category A.3 constructed or installed within or upon any public school grounds or other public properties where city is given a right to use the same for public playground or recreation purposes. Further, for repayment of expenditures made in fiscal year 1982-1983 only, a reallocation of funds to the city public library facilities program (category A.1, above) from the Council District 2 parks pro gram for the construction of the Santa Teresa branch library; and for repayment in a subse-

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quent year, or years, to the city public works maintenance facilities program (category A.5), of amounts previously loaned to the library facilities program (category A.1) for the construction of the Santa Teresa branch library.

4. City maintenance yards for park, playground and recreation facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city maintenance yards for park, playground and recreation facilities, and other structures or works necessary or convenient for the maintenance of the city's parks, playgrounds, and recreation facilities.

5. City public works maintenance facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city public works maintenance facilities, and other structures and works necessary or convenient for the maintenance of the city's public works, and for fiscal year 1982-1983 only, a loan to the city public library facilities program (category A.1, above) for the construction of the Santa Teresa branch library.

   6. Communication facilities, including land and interests in land, buildings, structures, radio and other equipment, streets and sidewalks adjacent to city communication facilities, and other works, properties, or structures necessary or convenient for the communication facilities of the city and also including a communication services study to determine the future communication facilities needs of the city.

   7. General municipal improvements only as specified in an ordinance or resolution adopted by the city council.

• B. With respect to all taxes collected under this chapter, at least forty-eight percent of the taxes collected in any fiscal year on account of construction in a district (hereinafter referred to as "district of origin"), shall be expended for

the purposes set forth in category A.3, above, situate in the district of origin. In fiscal years 1988-89 and 1989-90 ten percent, and in fiscal years 1990-91 and 1991-92, fifteen percent, of the taxes allocated to each district of origin for expenditure on purposes in category A.3 may be expended in any part of the city based upon need as determined by the council and without regard to district of origin. Such funds may also be expended for reimbursement of city's expenses incurred in assessing the needs of the districts. Additionally, to the extent that taxes collected and to be distributed to each district of origin for each fiscal year exceed the sums set forth in the city's proposed 1988-93 five-year capital improvement plan, as proposed, such excess sums shall also be expended for category A.3 expenditures in any part of the city. Up to and including, but not more than, sixteen percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in category A.3, above, in any part of the city, or at San José Family Camp located in Tuolumne County, California, without regard to district of origin. Up to and including, but not more than, thirty-six percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in categories A.1, A.2, A.4, A.5, A.6, and A.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category A.2 which are situate outside the city except that expenditures for public streets and sidewalks may be made only for public streets and sidewalks situate in the city. Expenditures may also be made for the repayment of expenditure of library program funds made in fiscal year 1982-83 only (category A.1), which were reallocated from the Council District 2 parks program for the construction of the Santa Teresa

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branch library, however, such expenditure shall not he considered as a part of the above thirtysix percent limitation.

Any amounts loaned to the library facilities program (category A.1) by the public works maintenance facilities program (category A.5) shall he repaid by the Council District 2 parks program to the public works maintenance facilities program (category A.5), in such amounts and at such times as the city council shall determine.

Expenditure of amounts repaid on a loan from the public works maintenance facility program (category A.5) for the construction of the Santa Teresa branch library shall not be considered in the calculation of the thirty-six percent expenditure limitation set out above in the fiscal year of such repayment.

As used herein, "district" means a council election district established pursuant to Section 403 of the charter of the City of San José; provided, however, that if the boundaries of said council districts are changed during any fiscal year, those districts in effect at the beginning of that fiscal year shall, for the purposes of administering the provisions of this chapter, be continued to be used for the remainder of that fiscal year.

Not more than ten percent of the taxes authorized to be expended in each category A.1 through A.7, may be expended in each such category for operating maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter which first become operational on or after July 1, 1983, for not more than a period of five years on any specific capital facility within such categories. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant. Capital

facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation building, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational facilities, public works maintenance buildings, communication buildings, parking areas which are a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• C. All taxes collected under this chapter shall be placed in the "construction tax and property conveyance tax fund" established by Section 4.80.300 of the San José Municipal Code and used for the purposes set forth in this section. The director of finance shall establish and keep such accounts as may be necessary to account for said taxes.

• D. The city council in its discretion may transfer part or all of the interest earned on money deposited into the construction tax and property conveyance tax fund into any special fund or into the general fund.

• (Prior code § 18022; Ords. 20494, 20554, 20647, 20766, 20798, 21018, 21070, 21271, 21381, 21382, 22810.)

• A. Notwithstanding Section 4.58.230, commencing July 1, 1990, the city council shall expend monies collected pursuant to this chapter as provided in this section.

• B. All of the taxes collected under this chapter shall, subject to the provisions hereinafter set forth, be expended for the acquisition, construction, reconstruction, replacement, remodeling, modification, alteration, enlargement, renovation, furnishing and refurnishing of the

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following improvements, including preventive capital maintenance and energy efficient capital improvements, and subject to the limitations set forth below, for operating maintenance of certain of the following improvements, to wit:

1. City public library facilities, equipment and materials, including land and interests in land, library buildings, furniture, books, circulating or reference nonbook library materials, furnishings, equipment, parking areas, streets and sidewalks adjacent to city public library facilities, and other works, properties, structures and facilities necessary or convenient for the public library system of the city. Expenditure may also be made for the leasing, renting and processing of books.

2. City fire protection facilities, including land and interests in land, fire stations, fire engines and trucks, other motorized and nonmotorized firefighting equipment, streets and sidewalks adjacent to the city fire protection facilities, and other works, properties, structures and facilities necessary or convenient for the fire protection of the city.

3. City public park, recreation areas and facilities, equipment and materials, including land and interests in land, swimming pools, courts, children's play areas, turf, sprinkler systems, community center and recreation buildings, streets and sidewalks adjacent to city park, playground and recreation facilities, and equipment for maintenance, security and recreation purposes at city parks, playgrounds and recreation facilities and other works, properties, structures and facilities necessary or convenient for public park, playground and recreation purposes, and for any of the facilities described in this category B.3 constructed or installed within or upon any public school grounds or other public proper-

ties where the city is given a right to use the same for public playground or recreation purposes.

4. City maintenance yards for park, playground and recreation facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city maintenance yards for park, playground and recreation facilities, and other structures or works necessary or convenient for the maintenance of city parks, playgrounds and recreation facilities.

5. City public works maintenance facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city public works maintenance facilities, and other structures and works necessary or convenient for the maintenance of the city's public works.

6. Communication facilities, including land and interests in land, buildings, structures, radio and other equipment, streets and sidewalks adjacent to city communication facilities, and other works, properties or structures necessary or convenient for the communication facilities of the city and also including a communication services study to determine the future communication facilities needs of the city.

   7. General municipal improvements only as specified in an ordinance or resolution adopted by the city council.

• C. With respect to all taxes collected under this chapter, at least forty-eight percent of the taxes collected in any fiscal year on account of construction in a district (hereinafter referred to as "district of origin") shall be expended for the purposes set forth in category B.3 above situated in the district of origin. In fiscal years 1990-91 and 1991-92, fifteen percent of the taxes allocated to each district of origin for expenditure on purposes in category B.3 may be expended in any part of the city based upon need as determined by the council and without regard to district of origin. Such funds

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may also be expended for reimbursement of the city's expenses incurred in assessing the needs of the districts. Additionally, to the extent that taxes collected and to be distributed to each district of origin for each fiscal year exceed the sums set forth in the city's proposed 1989-94 five-year capital improvement plan, as proposed, such excess sums shall also be expended for category B.3 expenditures in any part of the city. To the extent that taxes collected and to be distributed to each district of origin for each fiscal year are less than the sums set forth in the city's proposed 1989-94 five-year capital improvement plan or the city's adopted budget for any particular year, such reductions shall be allocated to each district in proportion to each district's share of total tax revenues collected herein. Up to and including, but not more than, sixteen percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in category B.3 above, in any part of the city, or at San José Family Camp located in Tuolumne County, California, without regard to district of origin. Up to and including, but not more than, thirty-six percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in categories B.1, B.2, B.4, B.5, B.6 and B.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category A.2 which are situated outside the city, except that expenditures for public streets and sidewalks may be made only for public streets and sidewalks situated in the city. Any amounts loaned to the library facilities program (category B.1) by the public works maintenance facilities program (category B.5) shall be repaid by the Council District 2 parks program to the public works maintenance facilities program (category B.5), in such amounts and at such times as the city council shall determine.

Not more than ten percent of the taxes autho-

rized to be expended in each category B.1

through B.7 may be expended in each such category for operating maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter, for not more than a period of five years on any specific capital facility within such categories. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant. Capital facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation buildings, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational facilities, public works maintenance buildings, communication buildings, parking areas which are a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• D. With respect to all taxes collected under this chapter, at least sixty-four percent of the taxes collected in any fiscal year shall be expended for the purposes set forth in category B.3 above.

• E. Beginning in fiscal year 1992-93, up to sixtysix percent of the amounts used for the purposes set forth in category B.3 above shall be distributed for district purposes as follows:

  1. Twenty percent of such funds shall be equally allocated to each district to meet special needs.

  2. Eighty percent of such funds will be distributed as determined by the city council taking into consideration the following: undeveloped neighborhood and community serving park acres per population of one thousand; neighborhood and community serving developed park

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§ 4.58.235

• acres per population of one thousand; neighborhood and community serving developed park acres in good condition per population of one thousand; and square feet of neighborhood and community serving center space per population of one thousand.

• F. Beginning in fiscal year 1992-93, up to and including, but not more than, thirty-four percent of the amounts to be used for the purposes set forth in category B.3 above in any fiscal year may be expended in any part of the city for improvements in category B.3 above for natural open space area intended to be left in a natural state, or at San José Family Camp located in Tuolumne County, California, without regard to district of origin.

• G. To the extent that a construction or reconstruction project for the purposes set forth in category B.3 above expends five hundred thousand dollars or more of funds collected under this chapter and allocated for the purposes set forth in category B.3, two percent of such amounts shall be set aside for public art projects.

• H. Not more than thirty-six percent of the taxes collected in any fiscal year may be expended for improvements listed in categories B.1, B.2, B.4, B.5, B.6 and B.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category B.2 which are situated outside the city, except that expenditures for public streets and sidewalks may be made only for public streets and sidewalks situated in the city.

• I. As used herein, "district" means a council election district established pursuant to Section 403 of the Charter of the City of San José; provided, however, that if the boundaries of said council districts are changed during any fiscal year, those districts in effect at the beginning of that fiscal year shall, for the purposes of administering the provisions of this chapter, be continued to be used for the remainder of that fiscal year.

• J. As used herein, "developed park acre" means any degree of improvements made to city land for the purpose of making it accessible and usable by the public for park and recreation purposes. Acreage in this category includes, without limitation, fully developed and minimally developed land.

• K. As used herein, "undeveloped park acre" means parkland not improved for recreation purposes, pursuant to an adopted park master plan or phased development plan, as applicable.

• L. As used herein, "good condition" means, in the opinion of the city manager, park property functional and safe for use by the public, pursuant to an adopted park master plan or phased development plan, and satisfactorily maintainable with a standard level of maintenance.

• M. Beginning July 1, 1992, not more than ten percent of the taxes authorized to be expended in each category B.1 through B.7 may be expended in each such category for operation and maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter and overhead costs; provided, however, that monies collected pursuant to this chapter shall be reduced by ten percent annually beginning July 1, 1992, for operation and maintenance costs of capital facilities and overhead costs until no monies collected herein are used for such purposes.

  1. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant.

  2. Capital facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation buildings, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational fa-

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§ 4.58.270

cilities, public works maintenance buildings, communication buildings, parking areas which are a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• N. All taxes collected under this chapter shall be placed in the "construction tax and property conveyance tax fund" established by Section 4.80.300 of the San José Municipal Code and used for the purposes set forth in this section. The director of finance shall establish and keep such accounts as may be necessary to account for said taxes.

• O. The city council in its discretion may transfer part or all of the interest earned on money deposited into the construction tax and property conveyance tax fund into any special fund or into the general fund.

• (Ord. 23756.)

Notwithstanding the provisions of Sections 4.58.230 and 4.58.235, the use of the tax revenues collected under this chapter shall be governed by Chapter 4.55. (Ord. 27689.)

Anything in Section 4.58.230 to the contrary notwithstanding, the moneys placed in the property conveyance tax fund created under said Section 4.58.230 may be expended for the purpose of paying the costs of collecting the tax imposed under this chapter and of otherwise administering this chapter. Payment of such costs shall be prorated monthly among the various planning areas of origin in accordance with the taxes attributable during the month to the various planning areas of origin. (Prior code § 18024.)

The amount of tax, penalty and interest imposed under the provisions of this chapter is hereby assessed against the property upon the transfer of which the tax is imposed, and if not paid when due, such tax shall constitute an assessment against such property and shall be a lien on the property for the amount thereof, which lien shall continue until the amount thereof including all penalties and interest are paid, or until it is discharged of record. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount.

(Ord. 21581.)

The director of finance shall file with the city manager a written report covering those properties on which the city intends to file and record liens by reason of failure to pay any tax imposed pursuant to this chapter. Said report shall contain names of the transferor and transferee of such property, location of affected property, the amount of the lien opposite each property and other relevant data. Upon the receipt of such report the city manager shall present same to the city council, and the city council shall, by resolution, fix a time and place for a public hearing on such report. Said hearing may be held once a month.

The director of finance shall cause a written notice to be served upon the transferor and transferee of affected property not less than ten days prior to the time fixed for such hearing. Such service shall be by mailing a copy of such written notice to the transferor and/or transferee of property at their address as shown on the last equalized county assessment roll or as known to the director. Service shall be deemed complete at the time of deposit in the United States mail. (Ord. 21581.)

Any transferor and transferee of real property which is subject to a lien pursuant to Sections

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§ 4.58.270

4.58.250 and 4.58.260 may appear before the city council. At such hearing the transferor and transferee of property may appear and offer evidence why the report should not be confirmed and the lien filed and recorded. The city council may make such revisions, corrections or modifications of the report as it may deem just. In the event that the city council is satisfied with the correctness of the report (as submitted or as revised, corrected or modified), it shall be confirmed or rejected by resolution and the lien ordered to be filed and recorded. The decision shall be final and conclusive. (Ord. 21581.)

The lien will be officially recorded in the county recorder's office. The lien may carry such additional administrative charges to defray the city's costs and expense of conducting the proceedings under this chapter. Said administrative charges shall be set forth in the schedule of fees established by resolution of council. The owner of the affected property shall be notified by mail at the address provided for in Section 4.58.260 by the director that the amount of tax, penalty charges, interest charges and administrative charges are due the city and that said lien has been recorded.

(Ord. 21581.)

The director shall initiate proceedings to establish the total sum of unpaid real property conveyance tax, plus penalty charges, plus interest charges, plus administrative charges, plus a county collection charge (hereinafter in this chapter referred to as "delinquent taxes") as a special assessment against the transferred parcels of property situate within the city. (Ord. 21581.)

A report covering delinquent taxes shall be prepaid by the director containing names of transferors and transferees, location of affected prop-

erty and amount of delinquent taxes opposite each property. The director shall fix a time, date and place for an administrative hearing on the report and any protests or objections thereto. The city council shall fix a time and place for a public hearing on said report and any protests or objections thereto.

(Ord. 21581.)

The director shall cause written notice of the special assessment administrative hearing before the director and special assessment public hearing before the city council on the report mentioned in Section 4.58.300 to be mailed to the transferor and/or transferee of the affected real property at the address of the real property as shown on the last equalized assessment roll or as known to the director. Said notice shall state the time, date, and place of each hearing and inform transferor and transferee of their right to appear at each hearing and state his or her objections. The said written notice shall be mailed at least ten days prior to the special assessment administrative hearing which shall be held at least twenty days prior to the public hearing before the city council. Service shall be deemed complete at the time of deposit in the United States mail.

(Ord. 21581.)

At the time fixed for consideration of the said report at the administrative hearing, the director shall hear it with any objections of the transferors and/or transferees liable to be assessed for delinquent taxes. At such hearing the transferor and/or transferee may appear and offer evidence why the said report should not be confirmed. The director may make such revisions, corrections or modifications of the said report as he may deem just, and, in the event he is satisfied with the correctness of the said report (as submitted, or as revised, corrected or modified), the director shall notify each person appearing before him of his decision. (Ord. 21581.)

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The transferor and transferee of any property which is the subject of the said report may appear before the city council, and offer evidence why the said report should not be confirmed.

The city council may make such revisions, corrections or modification of the report as well as the director's decision as it may deem just. In the event that the city council is satisfied with the correctness of the report and the director's decision (as submitted or as revised, corrected or modified), they shall be confirmed or rejected by resolution. The decision of the city council on the report, all protests or objections made thereto and on the director's decision and all appeals therefrom shall be binding, conclusive and final. (Ord. 21581.)

Upon confirmation of the said report by the city council, the delinquent taxes contained therein shall constitute a special assessment against the transferred properties which are contained in the confirmed report. The director of finance shall turn over to the county assessor for inclusion in the next property tax assessment the total amount of delinquent taxes. Thereafter, said assessment shall be collected at the same time, and in the same manner and frequency as ordinary municipal taxes are collected and shall be subject to the same penalties and the same procedure of sales as provided for delinquent ordinary municipal taxes.

The assessments shall be subordinate to all existing special assessment liens previously imposed upon the property and paramount to all other liens except those for state, county, and municipal taxes with which it shall be on parity. The lien shall continue until all delinquent taxes due and payable thereon are paid. All laws applicable to the levy, collection, and enforcement of municipal taxes shall be applicable to said special assessments. (Ord. 21581)

As an alternative to the procedures set forth in Sections 4.58.260 through 4.58.340, the public hear-

ing(s) before the city council and the imposition of a special assessment lien referenced in those sections may be conducted and imposed by a designated body pursuant to Chapter 1.18 of this Code. (Ord. 25264.)