Loading...
HomeMy WebLinkAbout090418 EDC packetMembers; Councilmember Cousens Councilmember Guti6rrez Councilmember White 1. Minute Approval iili� mum Second Floor Conference Room Yakima City Hall Staff: Others: Ana Cortez -Steiner, Assistant City Manager John Carney, Information Systems Manager Scott Schafer, Public Works Director Joan Davenport, Community Development Director L9=0 1W a. Review draft minutes from July 5, 2018 meeting b. Review draft notes from the July 26, 2018 meeting (no quorul 2. Discussions a. Main street business development b. Downtown Central Plaza c. Committee member reports i. Ellensburg Economic Development Conference d. Partner reports — Jonathan Smith, Choose Yakima Valley e. Staff reports i. Proposed change to the business license ordinance per State statutes 3. Future agenda items WVL0WMWiXWjqX;fM9X" Yakima City Hall Thursday, July 26, 2018 Committee Members: Staff: Community members: Council Member White Assistant City Manager Ana Cortez -Steiner John Cooper Information Systems Manager John Carney Jonathan Smith Associate Planner Eric Crowell Luz Gutierrez Planning Manager Joseph Calhoun Kaitlin Bain Chief Engineer Brett Sheffield Andrew Holt Economic Dev. Manager Sean Hawkins Joe Mann Records Administrator Jodi Stephens es only- Quorum Council Member White called the meeting to order at 137 p.m. Absent: Council Members Cousens and Dulce Gutierrez 1. Reviewed the draft minutes from July 5, 2018 meeting: There was no quorum at the meeting to approve the minutes. 2. Discussions: a. Strategic Plan Update Calhoun presented''a PowerPoint presentation emphasizing the Economic Development Element is one of the primary elements of the Comprehensive Plan and is mandated by the Growth Management Act (GA). The plan guides physical development through 2040 and was adopted by Council on June 6, 2017. Crowell reviewed the conditions and trends of the demographics, challenges amV opportunities, and goals and policies of the plan. Further discussion took place about options to attract businesses to Yakima and White asked about a Public Authority District. Hawkins explained the Public Authority District is a tool used to support economic development, enhance Yakinna'sconnpetitk/eness and iscreated b«Council. |t does not have taxing authority and is similar to a Port District. Calhoun briefed White on the free pre -application review process that connects the applicants with various City departments and what permits they will need moving forward. b. Conduit and fiber assets i. Carney reported onthe findings from his research conducted on Anaoortes. Anacortesisrunning conduit sleeves inside ofexisting vacated pipes, which cost about $5O ,--�andtheyarethesizeofSe|ah. They are using the conduit to bridge - 'communications between government buildings. Carney reported City staff are currently conducting an inventory of the City's underground conduit and working with GIS to create a mapping application to show a visual inventory of the conduit and targeting 2019 to show the Committee the results. The City currently utilizes fiber optics here at the City of Yakima to join our government buildings. Carney also indicated the best part of this process is IT and Public Works are working more closely together on projects and are moving toward a dig once approach. _ Creative District update , White did ,not discuss this item. d. Sidewalk and crosswalk pain—White did not discuss this item, i, Policy ii. Costs iii. Recommendation e. Discussion on vacant building '. Calhoun indicated the City ofYakima doesn't track this information; - however, there - isalink accessing Yakima County information via the City's website. White would like to know what the City of Spokane has done with vacant ANorth First Street Corridor PowerPoint presentation was added 10the agenda, which Sheffield presented, This project will begin in spring of 2019. 0 Phase 1 is from 'N' Street to SR12 • Phase 2 is from '|' Street to 'N' Street The North First Street Ad Hoc Committee was created and met several times in 2011. The City received S|EOPlanning Grant of$25,OOO,and onOctober l8, 2DI1the Council accepted the North First Street Corridor Revitalization Project P|annin8Grantfina|neportandbrnchure.The Yakima Bikes and Walk group were aproponent mfadding the sidewalks inthe plan. After discussion, Cortez confirmed with White he would like to see changes to sidewalks, landscaping, and the middle ofthe road. 3. Future CED agenda items ' • White would like "other business" as a standing item on this agenda • Pavement coating • Discussion on vacant buildings • Would like North First Street as a standing item until we decide otherwise White brought upthe incorrect cost quoted atthe last Council meeting and his concern if several Council members want to attend the Economic Development Conference in Ellensburg. Cortez indicated the deadline is July 31, 2018 and she is not aware of any other requests to attend. White made a request tocattend. 4. Audience participation Luz Gutierrez would like to know if any of the money for the North First Street project can be used anywhere else in the City. She also thanked Community and Economic Development Manager Sean Hawkins for all his hard work, his work with LCDR, and having such a great interest in economic development in our area. ' - - Community member and business owner Joe Mann spoke highly of the YakBack feature onour website and thanked the staff who responded yoquickly and professionally toa report of a pothole. Mr.Mann also suggested when selling property orland toconsider the long-term interest to the City, and not only accept the highest bidder. Adjourned at 2:40 . The next meeting is scheduled for August 23, 2018 at 1:30 p.m. in the Second Floor Conference Room. Jason White, Chair F101 1,161 i I I ^ committee"t- City Hall 111MVINUE Members: Staff: Others: Councilmember White Ana Cortez, Assistant City Manager Maria Rodriguez Councilmember Cousens Scott Schafer, Public Works Director Jonathan Smith Councilmember Guti6rrez John Carney, Information Systems Manager Luz Guti6rrez Brett Sheffield, Chief Engineer Tom Sellsted, Senior Analyst Cally Price, Assistant to the City Manager Executive Minutes White called the meeting to order. 1. Review draft minutes from May 24, 2018 meeting: The May 24, 2018 meeting minutes were reviewed. Guti6rrez motioned to accept the minutes as presented and Cousens seconded the motion. The minutes were approved unanimously. 2. Discussions: a. Strategic Plan Update Cortez reviewed the strategic plan with the Committee members. Committee members agreed that changing the format, to be consistent with Partnership, would be appropriate. Committee members will meet and discuss strategic priorities and report back at the next meeting. b. Conduit and fiber assets White reported that at the AWC conference there was a session on fiber and he suggested that staff follow up with Port Angeles and Anacortes to see how they implemented fiber using existing water pipes. c. Creative District designation update White reported that he is interested in spearheading this project and asked that staff add this discussion to a future Council agenda. White distributed a copy of a "Green Way" project for Yakima. Staff will see if there are any codes regulating or prohibiting painting on the street and what the paint would cost. Guti6rrez suggested that if this moves forward, that the project be started on North Ilst Street as part of the TBD project. Committee members would like to see a timeline how this could be accomplished. d. Economic Development Council conference Cousens shared information she received about an Economic Development Conference being held in Ellensburg and she would like at least one committee member to attend. This item will be brought up at a future Council meeting for discussion. e. 1 st Street Development Brett Sheffield spoke about the North Ilst project, specifically, funding, schedule and phases. Phase 1 (N. Street to SR 12) will begin in the spring and is funded. Phases 2 and 3 could begin in 2020. Guti6rrez would like to see jaywalking addressed in the plans for N. 1 st Street. Since some items still need to be addressed, Guti6rrez suggested that a Council study session be scheduled. Committee members will bring this up at a future Council meeting. Presentation should include budget, vision, and traffic model (similar to what was produced for the mill site). Guti6rrez would like to see the structure/framework of what the next 18 months would look like and be able to monitor progress/benchmarks. 3. Future agenda items Strategic Plan update Conduit and fiber assets Creative District update Sidewalk and crosswalk paint Discussion on vacant buildings 4. Other business Cousens distributed information on how to fill downtown gaps she received at the AWC Conference. Committee members would like to have a list of vacant buildings in downtown Yakima and along North Ilst Street. 5. Audience Participation Luz Guti6rrez inquired about the status of the Economic Development Plan that was created a few years ago. Jon Smith reported that CERB recently announced they will offer funding to assist rural counties and cities with broadband provided it ties to job creation. The next meeting is scheduled for July 26 at 1:30 in the 2nd Floor Conference Room, Jason White, Chair TO: Members of the Economic Development Committee Chairman Jason White Councilwoman Holly Cousens Councilwoman Dulce Gutierrez FROM* Sara Watkins, Senior Assistant City Attorney Glenn Denman, Supervising Code Inspector DATE:: August 27, 2018 SUBJ; Proposed Amendments to YMC 5.52 Members of the Economic Development Committee: The Washington State Legislature passed a statute that requires cities to amend their business license code section effective before January 1, 2019, in two ways. Staff is bringing you the options, as well as staff's recommendation with regards to the proposed language. This memorandum outlines the options (where there are options) and the reasoning behind choosing that option. Staff held a meeting with legal, the supervising code inspector, and members of staff who deal with business licensing within the City prior to making this recommendation. 1. Required Change 1: The definition of "engaging in business." The statute, RCW 35.90.080(2)(a) states: A city that imposes a general business license requirement must adopt the mandatory provisions of the model ordinance by January 1, 2019. The following provisions are mandatory: A definition of "engaging in business within the city" for purposes of delineating the circumstances under which a general business license is required. The model ordinance language was created by a development committee, working through the Association of Washington Cities, as specifically required by the statute. RCW 35.90.080(1)(a). The statute also required that before the model ordinance was finalized that there be "substantial input from business stakeholders and other members of the public." The full model ordinance, for which City staff is not seeking adopting in full, can be found online. State statute only mandates that two provisions be adopted by all cities which conduct business licensing. The first provision mandated to be adopted is the definition of "engaging in business." The AWC model definition is proposed to be adopted as required by the statute. Please see the redlined version of Yakima Municipal Code 5.52.010. As you can see, the definition is much more specific and provides examples of businesses that must be licensed, as well as some exemptions that must be taken into account. Please note that there is no recommendation from staff to eliminate the City's additional exemptions from licensing found in YMC 5.52.050. Staff recommends sending this mandated definition change to the full City Council for review. 2. Required Change #2: Minimum threshold for license fees RCW 35.90.080(2)(b) & (3) requires that all cities that impose business license requirements also adopt: A uniform minimum licensing threshold under which a person would be relieved of the requirement to obtain a city's general business license. A city retains the authority to create a higher threshold for the requirement to obtain a general business license but must not deviate lower than the level required by the model ordinance. A city may require a person that is under the uniform minimum licensing threshold as provided ... to obtain a city registration with no fee due to the city. AWC provided two threshold options, of which cities are required to adopt one— with the acknowledgement that the City could change the minimum threshold amount to make it higher. The two options are as follows: a. Option 1: Threshold exemption To the extent set forth in this section, the following persons and businesses shall be exempt from the registration, license and/or license fee requirements as outlined in this chapter: (1) Any person or business whose annual value of products, gross proceeds of sales, or gross income of the business in the city is equal to or less than $2,000 (or higher threshold as determined by city) and who does not maintain a place of business within the city shall be exempt from the general business license requirements in this chapter. The exemption does not apply to regulatory license requirements or activities that require a specialized permit. NA b. Option 2: Threshold with Fee -free License/Registration-only For purposes of the license by this chapter, any person or business whose annual value of products, gross proceeds of sales, or gross income of the business in the city is equal to or less than $2,000 (or higher threshold as determined by city) and who does not maintain a place of business within the city, shall submit a business license registration to the Director or designee. The threshold does not apply to regulatory license requirements or activities that require a specialized permit. City staff is recommending that the City use option 2, extend it to all businesses (not limit it to out of town businesses) and increase the minimum threshold to $7,000. a. Why staff recommends using option 2 Option 2 is recommended, which requires all businesses to register with the City, and exempts some businesses from paying the license fee. This option is the preferred option because by issuing a business license to every business there is a record with the City of where businesses are located, the types of businesses being opened, and other data and information about businesses in Yakima. This is also consistent with the City's current practice to require businesses which are exempt to register, but not pay the business license fee. Further, by issuing a license, if a business were to violate any ordinance provisions, the license could be suspended or revoked. If the City provided for the exemption without requiring a cost-free license, it creates a situation where it is hard for the City to know where businesses are locating, ensure zoning regulations are followed, or hold businesses accountable for violations of code provisions. b. Why staff recommends extending the definition to include in - City sole proprietorships, not just out-of-town businesses Although the mandatory language is for businesses that do not maintain a place of business within the city limits, staff recommends that the definition be extended to both in -city sole proprietors and out-of-town businesses for consistency. Currently in -City sole proprietorships are exempt from licensing if they work less than 600 hours that year. To keep exemptions consistent, staff felt that the sole proprietorship exemption should also be based on gross sales or product, not on hours worked per year. c. Why staff recommends increasing the minimum threshold to $7,000. Staff thought that an exemption with a minimum threshold would not be consistent with current exemptions, and was so low that it would not exempt very many businesses. Currently, one of the City's exemptions is for sole proprietors who have no employees and operate less than 600 hours. YMC 5.52.050(1). Staff took that concept—that persons operating a business for less than 600 hours a year are exempt from business license fees, and calculated the amount that these businesses would receive if they were paid minimum wage for 600 hours. That amount equaled a little less than $7,000. As such, staff thought that rounding up, and exempting sole proprietorship businesses from paying for a business license if their gross income is less than $7000 was similar to the City's current provision. To create consistency, clarity and transparency, City staff recommends eliminating the exemption based on hours worked for sole proprietorships, and enacting the exemption based on gross sales or products across the board to both in -city sole proprietorships and out-of-town businesses. The $7,000 amount is more easily verified if there is a complaint, and it provides a clear delineation that can be tracked and estimated at the time of licensing by business owners. Staff believed it was a clearer standard to explain and a clearer standard to understand. Further, the minimum threshold in a dollar amount is mandated for out-of-town businesses, so it would be inconsistent to have a dollar amount threshold for out-of-town businesses, and a maximum hours worked for an in -city sole proprietor business. As such, staff recommends extending the mandated process of using gross sales to the in -city sole proprietorships as well. 3. Deadline The state -mandated changes must be enacted and be in force before January 1, 2019. If the changes are not adopted by the City by that time, then the City cannot enforce its business licensing ordinances. As such, staff is bringing this to you early to ensure that all of your questions are answered and this matter can be in front of the full Council for a decision in advance of the deadline. 4. Future business license changes To provide more context for this change, staff wants to provide some information about future business license changes within the City. The state, pursuant to RCW 19.02, is requiring all jurisdictions that have business license regulations that require license fees to ultimately utilize the state Business Licensing System (BLS) by 2022. This will provide easy access to business owners to go online and apply for both their state and local business licenses at the same time. Business owners (except for those requiring City -required regulatory licenses such as, for example, Mobile Food Vendors or Peddlers) will be able to obtain all the necessary licenses online without having to come to City Hall, and can make payment directly online. This should streamline the majority of business licenses in the City for business owners. 11 City staff will need to amend the City's business license ordinance more than the mandated changes that are required right now. Staff will be working on these amendments to move towards using the state system during 2019, and the expected first year that businesses could use this streamlined system will be 2020. We look forward to coming back to this committee to discuss those changes in 2019. 5. Enclosures With this memo are the following documents. a. Redlined version of 5.52.020 which changes the definition of "engaging in business" as mandated by state law. b. Redlined version of 5.52.040 which adds a section that specifies the minimum threshold for out -of -city businesses as mandated by state law (staff's recommendation to choose Option 2. c. Redlined version of 5.52.050 which removes the exemption based on hours worked and changing it to an exemption based on minimum monetary thresholds for consistency with YMC 5.52.040. d. AWC short sheet "Final city business license model threshold." In construing the provisions of this chapter, save when otherwise declared or clearly apparent from the context, the following definitions shall be applied: (a) "Year' means calendar year. ¢V "Person" means any individual, firm, copartnership, company, corporation, association, receiver, assignee, trustee in bankruptcy, trust, estate, joint venture, club, joint-stock company, business trust, society, or any group ofindividuals acting aeaunit, (c) "Business" includes all activities, occupations, trades, pursuits or professions located and/or engaged in within the cjt�i Qf Yakima with the ob'ect ofgain benefit or advantave to the taxlkayer or to another erson or class, directly or indirectly. Each business location shall be deemed a separate business, (d) "Engaging in business" MggCmeans commencing, conducting, or continuing in any business, iii! olicitin�, Sales,. �i a&sem Lep Lr r ov pdsn, ab ant n rr cts nrwi @tea rgal car � n t 9g_ r naI ar�r.. d Araetudtra� �rra�r�rat wr+ark �iad..�r� e���ts'�@�'r�ractp v3 r car ai sEstartc tar efrytc , mcludj . uai`st ccantr alrsactaagt MW tLons' + arr�ra@ rt dm filar srvac s rrra r rrY aryrt td t r@@1i_LgjgLbLe pgMortg ar f@ C d Rhe t(srr w car its behlt,_ Iiinrg crnstrg"m vgdaae rrt Llg q� c a _cgn$taaarjtr�agf rQ tart ft Ctl r p—W ria _ qty. —Lmtai d in pe tr art r spurrkvara Praticlatse Ilr tatkdr 3raadl:ar reem: viii Ccllectinq current tar delinent agcourtts; gr e# vated rnaterghi.... .m�,�.._,m�t..rsudpdtt,4�5?srn[�r�trsranrt.tst��ra��.rurc� �rcr�?trar�a��t�r�cl.,raar:tlm�r�a=fix, 6tra a rater sta r r rarteaft I sir r .ea a , fni rl m8 t,d a e arc&adt ur +per .. r W_§ s e_r : cw r s ar�vact rstl r�t�tr�t�ds iatdttd 3tt th�ara„�@I��srr� fat rrF ns�.�s r �E rri rte, ktLqrqeys.pkLctiqmsikg ursrr rs8l o? on A r, ..r t ,asrarugl jathtgt It@a rs ,@aq-%Cq 11 rµEa 4s aasd.rat a spray atr��h@pt�sF 3;��6,ts�cS��@�tsBEc�.p$,�� php�,p?��_�rtyrtt �d?+t�re �t3�rst t��r.r�e4�r"@rva������arttat�r�?; �d �r� r �s�hr��.u��t�raraarda? @dt: lr elfin vti 0 casts rs,rte„p t rataa6 tr trsrngr en awwhen Lira s 3e5 rat rd rat�rt�rl �t trite rrw�fi!�.<, mn o'si Ty r ss tatmrracrr�it l rsra r oa*enR Jago–ontleri@; clirad Qm—byre-kerb �r cattatacaauusSt�ratrp.taf �rat�ctarlC?.ta>aa€@r.cas�rt.palu*@geysers: „� xrvttratrasr a'rsa �r,�sc#�trt errcrt8erwrses�sslanals�rafvar��.tatcarrrrtatrt,.p3�dra�s,: t s t�a- t t ktoa er taaan ut bead r dip rr� Id Eq rtl o rLe �,�-t�& ser r�arrtt�ss tat vv@a�� �f� er�� tt3kvpr�+ pt a�t� ��r�� a@t,pts€rr, xtns aa_vkt t�rart*..tntci„mtspd tasgd pr nlarrrt ngd bttrt�� ear (� �f �r�rsrara mar uds rrrtratt�Y.r»���rtt r�n�g�ttia�.c�ta�c��ri�t�n �ca����p�t°+� t7�,��!ic�� ta:+��kt�t tart pan telae aensorsTs #t�€aPF 1[ stsailrtia4w istarta the tEy�t iter h f [v waft r� D -OA Mgand obtain a dnasrraesstscamse, _r(j!.Oaeti, w ith Arm ie .tat a rtd seuwtr�s ascAnsta (ILRw n avddh t earn a rst r r tt. fry rur. r. ttp 9ft., t M ??r i? PrfOM mr0g00t9 t rPrA r_ ps�sdrrOrrti 9- t[nit ttent9rnct raa tdn` luta aCrr ra�tra .. red i apmignm4ie9 grafcpra. srr other meefincis whetein the Oetson does not or�svu e tradntrno irr+ eonno kon r uth t stanac �e er4 add t . he iec p r r can c s. t? ? 1 hrs a vp t�u�_���� Ctp_� tapk�;rr� �r ode rd_raf (r ter � a IW -aL O RO raggiarro-i aid�ush rna �2rfr tit �raflsrat�taml4rss..asettmrratrtaj.: on —ANI. }wt a brra a ra. 1 G r v a w 6 r priyAk —qcL4aLpmL,r � r ti g rgm - -s p— ds �_rrt tie applicable. Lvi Cand,ucting..adv r4 ssn 4hrcau ,h the;mmai vii Soliciting sales by hone from a locations outside the Ci a l c�drar n€ aat .” to i r js� � �ael€en fa4at1 otrtsrt7�: She E rn�r9v �tIv�ran co�a� sr��ti�+�t�.i'; b . nro� rte i ataar r�°a€' fs rnrnQt M% rerl o_re isRear fa d o6tann a i€sss cs €me nse,ravr�tad tP 4 Rt_ r s:Rrr ntC AW t_taa? r s, ar trv_atIs in �C _� M u€fMsr eutaedta pQt tnp9tai ra nispc t�an,&f atps.Raate9d t€�t tdln r d�s�sdn�s n��siud� aa�€rv_iCyafi3dn�rt� Lr� �4�ta€felt®rn�na trstartatrsss�of a .ty�snf,..�tn� jtcds�+.v4rw,�rm �Afe Iry and the constItutnons of the United States and the Stale, of Washin torn. Nems is resu- tcs continue ter, ton:.._as... the lax a or raftfriosa a n n u hrr in aI rn rEarrn ocsnkdct ear �t�nt{tr„rat (e) "Employee" means any person employed at any business location within the city and/or any person (f) "Taxpayer" includes any person who engages in business or who is required to have a business license hereunder, or who is liable for any license fee or tax hereunder, or who performs any act, for which a license fee or tax is imposed by this chapter, (Ord, 2837 § 1, 1985: Ord. B-2014 § 2, 1947) 5.52.040 Business located outside citv. alIbLreshold exec n� fiq[j _ �itoth�eDirect� �tesi nee. The threshold does�no a i o re alto lidense ruiremnts or dctivitids that re airs AP994!40-permit. LZLAs to businesses located outside the city of Yakima and furnishing or performing services within the city that meet the reAirementsof sectionabove, the license fee or tax herein shall be measured by the number of employees of such business who perform any part of their duties within the city. (Ord. B-2014 § 4, 1957). 5.52.050 In addition tq the exeqjpt�g������he provisions oJthis chapter shall not apply to: (a) Any person in respect to engaging in any of the following enumerated business activities: franchised electric power, telephone, gas and passenger transportation companies; (b) Fraternal benefit societies as defined by Section 48.36.010 of the Revised Code of Washington; fraternal mutual property insurers as defined by Section 48.36.410 of the Revised Code of Washington; and nonprofit corporations organized under or existing by virtue of Chapter 24.03 of the Revised Code of Washington if such nonprofit corporations provide in their bylaws for the assessment of each member of a fixed sum to be held by the corporation to be paid as death benefits on the death of a member for the purpose of assisting widows, orphans orother persons dependent onedeceased member; (c) Any religious society, assndeUonorcorporaUon.throu0hUheoperadonofonyhoapdaiclinin.remortor other institution devoted exclusively to the care or healing of human beings; provided, that no exemption is granted where the income therefrom inures to the benefit of any physician, surgeon, stockholder or individual by virtue of ownership or control of such hospital, clinic, resort or other institution; (d) Auctioneers licensed under Chapter 514; (e) licensed under Chapter 5.02; UD Any instrumentality of the United States, state of Washington, or political subdivision thereof; (g) Any farmer, gardener, or other person who sells, delivers or peddles any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats, or any farm product or edibles raised, caught, produced or manufactured by such person within the state ofWashington; (h) Any person, who is the holder of a valid permit under Section 8.52.070 of the city of Yakima Municipal Code, engaged in the business of curb number painting and who devotes no more than six hundred hours per year bosaid business; (0 Newsboys engaged in the sale or delivery of newspapers and magazines or periodicals to the reading I �egs ifig whose mmam city business license m,ko=e. threshold Contact: Victoria Lincoln, Andrew Pd1e|Keu.Sheila Gall Business license and city B&O tax simplification In the 2017 session, EHB 2005 (RCW 35-90) passed requiring three actions bvcities with business licenses and local B&C]taxes. The law: 1. Requires cities with business licenses tm establish awmrhQnouptocreate a model business license with elicensing threshold by July 2U18for adoption bvall business license cities byJanuary 1.2O19; 2. Requires all cities with business license 10 administer their business license through the state's Business Licensing System (BL8)bv 2Q22orF||eLoog|by2O2O;and 3. Establishes otask force onlocal Bfk(]tax service apportionment under RCVV85.1O2.13U to report tmthe Legislature byOctober 2D10. Cities were required 0o develop amodel ordinance for business licensing bvJuly 1.2O18.The ordinance includes amandatory definition oY "engaging inbusiness" and aminimum threshold (or.occasional sale) exemption toestablish when out-of-1ownortransient businesses are required to belicensed. All business license cities must adopt it bythe end Cf the year ). What is in the model? The model threshold has two pieces: a model thre Id and a definition of "engaging in business." 1. The model business license threshold language would: w Apply minimum threshold of $2,000 per year inthe city for businesses that donot have alocation iOthe city; w Require elicense for businesses with a location in the city without regard tmthe threshold; • /\||ow cities the option to require registration with no fee for businesses under the threshold; and * Only apply togeneral business licenses, not regulatory licenses orlocal taxes. 2. The definition of"engaging iDbusiness" includes examples ofwhat constitutes business activities in cities that would subject business tolicense requirements, aawell as those activities that would not. The model language |a adapted from the definition that the 45cities with local B&C)taxes have already adopted for the definition of "engaging in busiOese" in the B8Otax model ordinance. What are the deadlines for all cities with business licenses to adopt the model? Cities with a business license must adopt the model bvJanuary 1,2O19.However, cities that currently partner with the state's Business Licensing Sen/ice (BL8) for business licensing administration have o deadline of October 17. 2018. because they must provide BLS 75-deynotice ofany changes tntheir business licenses (including this mandatory change). Where can I learn more about implementing the threshold? AWC is hosting a webinar to tell you everything you need to know to comply with the mandatory model threshold. Pre are to streamline vour business license August 8 at 10 am I Webinar AWC also held a presentation on this topic at its Annual Conference in June and will present at the WFOA Annual Conference on September 19 and EWFOA on October 12. What happens if we don't enact the threshold by the deadline? RCW 35.90.090 provides that a city cannot enforce its business license after January 1, 2019, until it has adopted the mandatory threshold. RCW 35.90.090: "A city that has not complied with the requirements of this section by January 1, 2019, may not enforce its general business licensing requirements on any person until the date that the mandatory provisions of the model ordinance take effect within the city." What if my city wants a higher threshold? Cities can choose to enact a higher threshold. The $2,000 threshold level per city per year for out -of - city businesses is the minimum level that every city must enact. How was the business license threshold developed? Section 8 of EHB 2005 required cities to work through the Association of Washington Cities (AWC) to develop a model business license threshold by July 1, 2018 with a focus on determining a threshold for when a license should be required for out -of -city businesses. The bill also required input from the business community. AWC convened a task force of city business license officials to begin drafting a model license threshold in August 2017. The group met monthly in person or via conference call to research city business license systems and existing options for establishing a model threshold and to review feedback on the proposed model from cities and the business community. AWC sent a survey to cities last fall on preferences for approaching the model threshold and sent a draft for review to cities in March 2018. In April -June 2018, AWC sent drafts of the model to the business community for comment, and the task force met in person with business community representatives. In response to business community concerns about the level of the threshold, the committee proposed doubling its initial proposed level to $2,000 per year in the city for businesses without a location in the city. The committee agreed to review the threshold level in four years when the model B&O tax model ordinance will also be due for review and more information on impacts of the license threshold is known. In late June, the committee finalized the model language. Business license model threshold implementation timeline July 2017 — EHB 2005 takes effect August 2017 — First meeting of city workgroup July 1, 2018 — Deadline for city work group to develop model ordinance with minimum threshold to get a license August 8, 2018 — AWC webinar on implementing model threshold October 17, 2018 — Deadline for current BLS partner cities to adopt model minimum threshold and notify DOR of changes to business license for threshold adoption (Cities on BLS plan but not yet onboarded would have later deadline of January 1, 2019) January 1, 2019 — Deadline for all other cities to adopt model minimum threshold How many cities does this impact? More than 230 cities issue local business licenses. Where can I find more information on the Business Licensing Service or FIIeLocal? Business licensing service: cit artnci dor.wa. ov FileLocal: filelocai.ord What about the provision of EHB 2005 and the scope of work for the B&O service apportionment task force? The two -factor formula for B&O tax service apportionment was required by RCW 35.102.130, effective in 2008. The two factors, payroll and service income, have complicated multi -part tests to determine how much of business service revenues should be apportioned to a city. EHB 2005 created a seven -member task force to make recommendations to simplify two -factor service apportionment by October 2018 with the following members: • One Department of Revenue, non-voting chair • Three cities with local B&O taxes • Three business representatives The task force has been meeting monthly since August 2017, and the deadline by which it must submit a report to the Legislature is October 31, 2018. The city representatives are: •, Chris Bothwell, Lake Forest Park Joseph Cunha, Seattle • Danielle Larson, Tacoma How did this legislation come about? During the 2016 legislative session, lawmakers passed HB 2958, establishing a task force to evaluate options to continue local business tax and licensing simplification. On December 30, 2016, the task force released its final report on local tax and licensing simplification with four main recommendations. The task force did not recommend that all cities with a business license be required to participate in the state's Business Licensing Service, nor did it recommend any centralized collection of city B&O tax at the state level. However, some of the items recommended represented a significant compromise on the part of cities. Where can I find more information on the 2016 task force? The report included four recommendations related to licensing, establishing a business license threshold, recommending a task force on service income apportionment, and providing for data sharing between DOR and FileLocal. Read the full report.