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TC Ord. No. 2010-10 Amending Chapter 3.12 of the Avon Muni CodeTOWN OF AVON, COLORADO ORDINANCE 10 -10 SERIES OF 2010 AN ORDINANCE AMENDING CHAPTER 3.12 OF THE AVON MUNICIPAL CODE WHEREAS, the Town of Avon ( "Town ") is a home rule authority municipal corporation and body politic organized under the laws of the State of Colorado and possessing the maximum powers, authority and privileges to which it is entitled under Colorado law; and WHEREAS, the Town imposes a transfer tax on certain transfers of real property in the Town of Avon; and WHEREAS, the Town desires to amend the exemption concerning transfers to and from business entities for no consideration to reflect business organization practices and desires to amend the requirements and procedures for processing of applications for exemptions; and WHEREAS, it is the Town Council's opinion that the health, safety and welfare of the citizens of the Town of Avon would be enhanced and promoted by the adoption of this ordinance through the orderly and efficient administration of real property transfer tax collections and processing of applications for exemption thereto; WHEREAS, approval of this Ordinance on first reading is intended only to confirm that the Town Council desires to comply with the requirements of the Avon Home Rule Charter by setting a public hearing in order to provide the public an opportunity to present testimony and evidence regarding the application and that approval of this Ordinance on first reading does not constitute a representation that the Town Council, or any member of the Town Council, supports, approves, rejects, or denies this ordinance; NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, the following: Section 1. Recitals Incorporated. The above and foregoing recitals are incorporated herein by reference and adopted as findings and determinations of the Town Council. Section 2. Amendments to Chapter 3.12. Chapter 3.12 of the Avon Municipal Code is amended as follows: A. Section 3.12.060(5) is repealed in its entirety and reenacted to read as follows: "(5) Transfers made pursuant to capital investment, reorganization, merger, consolidation, liquidation, dissolution or termination of corporations, partnerships, limited liability companies, trusts, or other business entities recognized in Colorado for no consideration other than acquisition or cancellation or surrender of stock or percentage ownership interest in such business entity, to the extent that the relative ownership interest of such persons in the real property Ord 2010 -10 RETT Application Page 1 of 5 V2 6 -16 -10 or in the percentage ownership of the business entity are the same after the transfer as immediately before the transfer and there is no monetary consideration for that portion of the transfer;" B. Section 3.12.070 is repealed in its entirety and reenacted to read as follows: "3.12.070 Application for exemption — Appeal. (a) Application Required. No transfer of real property shall be exempt from the imposition of the real estate transfer tax imposed in Section 3.12.030 unless a complete application for exemptions is filed with the Town and such application is approved by the Town. An application may be filed prior to a transfer of real property or within seventy -five (75) days after the transfer of real property. No application for Exemption from Real Property Transfer Tax shall be received and no such application shall be approved if submitted to the Town more than seventy - five (75) after the date of transfer. (b) Form of Application. The form of Application for Exemption from Real Property Transfer Tax, the form for an appeal, and any other forms related to this Chapter shall be determined by the Town Manager. The form of Application shall require the applicant to provide all information necessary to determine if such application complies with the definition and intent of the exemptions set forth in Section 3.12.060 above. (c) Application Review. The Town Manager, or designee, shall review applications for Exemption from Real Property Transfer Tax within thirty (30) days of receipt of a complete application. The failure of the Town Manager, or designee, to review an application for Exemption from Real Property Transfer Tax within thirty (30) days shall not be deemed to constitute an approval of an application for Exemption from Real Property Transfer Tax; however, the applicant may elect to appeal the application directly to the Town Council according to the procedures set forth in sub - section (d) below. If the Town Manager, or designee, determines that the application does not include adequate information to determine whether the application complies with an exemption stated in Section 3.12.060 of the Avon Municipal Code, the Town shall send a communication to the applicant stating that the application shall be denied unless the applicant provides additional information, shall state the required information and shall provide a maximum of thirty (30) days for the applicant to provide additional information. The Town Manager, or designee, shall review additional information which is timely submitted within thirty (30) days of receipt. The Town Manager, or designee, shall approve, partially approve, or deny the application in writing based upon compliance with the exemptions, or the intent of the exemptions, set forth in Section 3.12.060. Inadequate or inaccurate information which does not demonstrate compliance with the exemptions set forth in Section 3.12.060 shall be grounds for denial of an application. Ord 2010 -10 RETT Application Page 2 of 5 V2 6 -16 -10 (d) Appeal to Council. Any person whose application for Exemption from Real Property Transfer Tax is not acted upon with the timeframe set forth in sub- paragraph (c) above or whose application is denied or partially approved may appeal such decision to the Town Council in accordance with the procedures and requirements of this Section 3.12.070. The applicant shall file a written appeal in writing with the Town Clerk within thirty (30) days after the date of transmittal of the decision of the Town Manager, or designee, to deny such application. The failure to file a written appeal within thirty (30) days after the date of transmittal of the decision to deny the application shall bar any further consideration of the application, shall bar any appeal to the Town Council, and shall bar any judicial review by a Colorado court. The written appeal shall state the reasons for the appeal. An appeal which is filed timely shall be considered and acted upon by the Town Council within forty -five (45) days after the date of receipt. The Town shall provide at least three (3) days prior notice to the applicant stating the date, time and location where the Town Council will consider the appeal. The decision of the Town Council shall be in writing. The Town Council shall determine whether to approve, partially approve, or deny the application based on upon compliance with the exemptions, or the intent of the exemptions, set forth in Section 3.12.060. Inadequate or inaccurate information which does not demonstrate compliance with the exemptions set forth in Section 3.12.060 shall be grounds for denial of an application. The failure by the Town Council to hear and decide an appeal within forty -five (45) days after the receipt of the appeal shall result in the approval of the application. (e) False or Inaccurate Information. Any approval of an application for Exemption from Real Property Transfer Tax which is based upon false or inaccurate information provided by the applicant shall be void ab initio and such transfer shall be subject to all real property transfer tax imposed along with penalties and interest calculated from the date of such transfer. (f) Duration of Approval. An approval for Exemption from Real Property Transfer Tax which is granted prior to a transfer shall be valid for seventy -five (75) days and shall then expire if the transfer has not occurred. (f) Fees. The Town Council may adopt a resolution setting fees for the processing and reviewing of applications and appeals as is determined reasonably necessary to recover the costs incurred by the Town." Section 3. Codification Amendments. The codifier of the Town's Municipal Code, Colorado Code Publishing, is hereby authorized to make such numerical and formatting changes as may be necessary to incorporate the provisions of this Ordinance within the Avon Municipal Code. The Town Clerk is authorized to correct, or approve the correction by the codifier, of any typographical error in the enacted regulations, provided that such correction shall not substantively change any provision of the regulations adopted in this Ordinance. Such corrections may include spelling, reference, citation, enumeration, and grammatical errors. Ord 2010 -10 RETT Application Page 3 of 5 V2 6 -16 -10 Section 4. Severability. If any provision of this Ordinance, or the application of such provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. The Town Council hereby declares that it would have passed this Ordinance and each provision thereof, even though any one of the provisions might be declared unconstitutional or invalid. As used in this Section, the term "provision" means and includes any part, division, subdivision, section, subsection, sentence, clause or phrase; the term "application" means and includes an application of an ordinance or any part thereof, whether considered or construed alone or together with another ordinance or ordinances, or part thereof, of the Town. Section 5. Effective Date. This Ordinance shall take effect seven days after public notice following final passage in accordance with Section 6.4 of the Avon Home Rule Charter. Section 6. Safety Clause. The Town Council hereby finds, determines and declares that this Ordinance is promulgated under the general police power of the Town of Avon, that it is promulgated for the health, safety and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The Town Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. Section 7. No Existing Violation Affected. Nothing in this Ordinance shall be construed to release, extinguish, alter, modify, or change in whole or in part any penalty, liability or right or affect any audit, suit, or proceeding pending in any court, or any rights acquired, or liability incurred, or any cause or causes of action acquired or existing which may have been incurred or obtained under any ordinance or provision hereby repealed or amended by this Ordinance. Any such ordinance or provision thereof so amended, repealed, or superseded by this Ordinance shall be treated and held as remaining in force for the purpose of sustaining any and all proper actions, suits, proceedings and prosecutions, for the enforcement of such penalty, liability, or right, and for the purpose of sustaining any judgment, decree or order which can or may be rendered, entered, or made in such actions, suits or proceedings, or prosecutions imposing, inflicting, or declaring such penalty or liability or enforcing such right, and shall be treated and held as remaining in force for the purpose of sustaining any and all proceedings, actions, hearings, and appeals pending before any court or administrative tribunal. Section 8. Publication by Posting. The Town Clerk is ordered to publish this Ordinance by posting notice of adoption of this Ordinance on final reading by title in at least three public places within the Town and posting at the office of the Town Clerk, which notice shall contain a statement that a copy of the ordinance in full is available for public inspection in the office of the Town Clerk during normal business hours. [signature page follows] Ord 2010 -10 RETT Application Page 4 of 5 V2 6 -16 -10 INTRODUCED, APPROVED, PASSED ON FIRST READING, ORDERED POSTED AND REFERRED TO PUBLIC HEARING and setting such public hearing for June 22, 2010 at the Council Chambers of the Avon Municipal Building, located at One Lake Street, Avon, Colorado, on June 8, NOFA�O� ;SEAT,: Published by posting IN—dg Clerk at least seven days pric � 0 �. Ronald C. Wolfe, Mayor iublic places in Town and posting at the office of the Town action by the Town Council. ATTEST: APP VED AS TO J' Mc, L, Patty c nny, Clerk Eric Heil, own Attorney INTR CED, FINALLY APPROVED, AND PASSED ON SECOND READING, AND ORDERED PUBLISHED BY POSTING on June 22, 2010. N OF,q�,O • �' Ronald C. Wolfe, Mayor Publis d bpt}a �y office o th$ Town Clerk: eOiORADO .wtlt c' L Clerk Ord 2010 -10 RETT Application Page 5 of 5 V2 6 -16 -10 in at least three public places in Town and posting by title at the .f HEIL LAW &c PLANNING, LLC • MEMORANDUM TO: Honorable Mayor Wolfe and Town Council members CC: Larry Brooks, Town Manager FROM: Eric Heil, Town Attorney DATE: June 16, 2010 SUBJECT: Ordinance No. 10 -10 Amending Chapter 3.12 Summary: Ordinance No. 10 -10 amends Chapter 3.12 Real Property Transfer Tax. The two amendments include (1) updating the exemption for transfers to, from and between business entities where no consideration is provided, and (2) revising Section 3.12.070 regarding applications and appeals. Revisions were made to the ordinance presented on first reading as moved and directed by Town Council. The attached ordinance is a legal black -line which identifies the changes approved by Town Council on first reading. 3.12.060(5): The revisions to Section 3.12.060(5) expand this definition to include transfers from a business entity to an individual where no change in the proportion of • ownership occurs (i.e. 100% owner of property to 100% owner of entity which owns property). The Town has received numerous applications which include transfers to and from partnerships and limited liability companies that are related to estate planning and federal income tax planning but where no consideration is provided. The definition is also revised to acknowledge limited liability companies. • 3.12.070: The revisions to Section 3.12.070 address the procedures and review criteria for processing applications for Exemption from Real Property Transfer Taax. The revisions are significant such that a red -line strike -out is not practical. Substantive revisions are highlighted as follows: • 3.12.070(a) An application must be submitted and approved for all transfers which claim exemption. An absolute deadline to file an application is established as 75 days after the transfer. • 3.12.070(b) The Town Manager may determine the form of the application (there is no need to include a draft of the form of application in the municipal code). • 3.12.070(c) Town Manager has 30 days to review an application rather than the current 10 days. Failure to review no longer results in an automatic approval; however, failure to review will enable the applicant to appeal directly to the Town Council. Heil Law & Planning, PLC Eric Heil, Esq., A.I.C.P. 1499 Blake Street, Unit 1 -G Tel: 303.975.6120 Denver, CO 80202 eheil @ovon.org Town Council RE: Ord 10 -10 June 16, 2010 Page 2 of 2 ON I • • 3.12.070(d) The timeframe for Town Council to act upon an appeal is revised to simply state that the Council shall act on an appeal within 45 days of receipt by the Town. • 3.12.070(e) False /inaccurate information voids an approval of an application. • 3.12.070(f) Duration of Approval is specified to address approvals which granted prior to a transfer. • 3.12.070(g) The ability to adopt fees for the processing of applications has been added. Based upon our experience with review of RETT exemption applications, a fee in the range of $75 -$125 would be appropriate to cover the Town's cost to process these applications. Legal Issues: The amendments proposed in Ordinance No. 10 -10 do not present any "tax policy changes" which would require voter authorization under TABOR. Requested Town Council Action: Approval of first reading of Ordinance No. 10 -10. Thanks, Eric • • I/ • TOWN OF AVON, COLORADO ORDINANCE 10 -10 SERIES OF 2010 AN ORDINANCE CHAPTER 3.12 OF THE AVON MUNICIPAL CODE WHEREAS, the Town of Avon ( "Town ") is a home rule authority municipal corporation and body politic organized under the laws of the State of Colorado and possessing the maximum powers, authority and privileges to which it is entitled under Colorado law; and WHEREAS, the Town imposes a transfer tax on certain transfers of real property in the Town of Avon; and WHEREAS, the Town desires to amend the exemption concerning transfers to and from business entities for no consideration to reflect business organization practices and desires to amend the requirements and procedures for processing of applications for exemptions; and WHEREAS, it is the Town Council's opinion that the health, safety and welfare of the citizens of the Town of Avon would be enhanced and promoted by the adoption of this ordinance through the orderly and efficient administration of real property transfer tax collections and processing of applications for exemption thereto; WHEREAS, approval of this Ordinance on first reading is intended only to confirm that the • Town Council desires to comply with the requirements of the Avon Home Rule Charter by setting a public hearing in order to provide the public an opportunity to present testimony and evidence regarding the application and that approval of this Ordinance on first reading does not constitute a representation that the Town Council, or any member of the Town Council, supports, approves, rejects, or denies this ordinance; NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO, the following: Section 1. Recitals Incorporated. The above and foregoing recitals are incorporated herein by reference and adopted as findings and determinations of the Town Council. Section 2. Amendments to Chapter 3.12. Chapter 3.12 of the Avon Municipal Code is amended as follows: A. Section 3.12.060(5) is repealed in its entirety and reenacted to read as follows: "(5) Transfers made pursuant to capital investment, reorganization, merger, consolidation, liquidation, dissolution or termination of corporations, partnerships, limited liability companies, trusts, or other business entities recognized in Colorado for no consideration other than acquisition or cancellation or surrender of stock or percentage ownership interest in such business entity, into the extent that the relative ownership interest of such persons in the real property • Ord 2010 -10 RETT Application Page 1 of 5 - 4V2 6- 316 -10 or in the percentage ownership of the business entity are the same after the • transfer as immediately before the transfer and there is no monetary consideration; —" for that portion of the transfer;'' B. Section 3.12.070 is repealed in its entirety and reenacted to read as follows: "3.12.070 Application for exemption — Appeal. (a) Application Required. No transfer of real property shall be exempt from the imposition of the real estate transfer tax imposed in Section 3.12.030 unless a complete application for exemptions is filed with the Town and such application is approved by the Town. An application may be filed prior to a transfer of real property or within seventy -five (75) days after the transfer of real property. No application for Exemption from Real Property Transfer Tax shall be received and no such application shall be approved if submitted to the Town more than seventy - five (75) after the date of transfer. (b) Form of Application. The form of Application for Exemption from Real Property Transfer Tax, the form for an appeal, and any other forms related to this Chapter shall be determined by the Town Manager. The form of Application shall require the applicant to provide all information necessary to determine if such application complies with the definition and intent of the exemptions set forth in Section 3.12.060 above. (c) Application Review. The Town Manager, or designee, shall review • applications for Exemption from Real Property Transfer Tax within thirty (30) days of receipt of a complete application. The failure of the Town Manager, or designee, to review an application for Exemption from Real Property Transfer Tax within thirty (30) days shall not be deemed to constitute an approval of an application for Exemption from Real Property Transfer Tax; however, the ��plicant may elect to appeal the application directly to the Town Council according to the procedures set forth in sub - section (d) below. If the Town Manager, or designee, determines that the application does not include adequate information to determine whether the application complies with an exemption stated in Section 3.12.060 of the Avon Municipal Code, the Town shall send a communication to the applicant stating that the application ean neither- approved shall be denied unless the applicant provides additional information apA; shall state the required information neeessafy to eamplete fevie and shall provide a maximum of thirty (30) days for the appl-i ^"t'^^ 0aee t" °applicant to provide additional information is reeei e *'' °. The Town Manager, or designee, shall review the supplemei4ed applie additional information which is timely submitted within thirty (30) days of receipt. The Town Manager, or designee, shall approve, partially approve, or deny the application in writing based upon compliance with the exemptions, or the intent of the exemptions, set forth in Section 3.12.060. Inadequate or inaccurate information which does not • Ord 2010 -10 RETT Application Page 2 of 5 -N4V2 6- 316 -10 I/ • demonstrate compliance with the exemptions set forth in Section 3.12.060 shall be grounds for denial of an application. (d) Appeal to Council. Any person whose application for Exemption from Real Property Transfer Tax is not acted upon with the timeframe set forth in sub- paragraph (c) above or whose application is denied or partially approved may appeal such decision to the Town Council in accordance with the procedures and requirements of this Section 3.12.070. The applicant shall file a written appeal in writing with the Town Clerk within thirty (30) days after the date of transmittal of the decision of the Town Manager, or designee, to deny such application. The failure to file a written appeal within thirty (30) days after the date of transmittal of the decision to deny the application shall bar any further consideration of the application, shall bar any appeal to the Town Council, and shall bar any judicial review by a Colorado court. The written appeal shall state the reasons for the appeal. An appeal which is filed timely shall be considered and acted upon by the Town Council within forty -five (45) days after the date of receipt. The Town shall provide at least three (3) days prior notice to the applicant stating the date, time and location where the Town Council will consider the appeal. The decision of the Town Council shall be in writing. The Town Council shall determine whether to approve, partially approve, or deny the application based on upon compliance with the exemptions, or the intent of the exemptions, set forth in Section 3.12.060. Inadequate or inaccurate information which does not demonstrate compliance with the exemptions set forth in Section 3.12.060 shall be grounds for denial of an • application. The failure by the Town Council to hear and decide an appeal within forty -five (45) days after the receipt of the appeal shall result in the approval of the application. (e) False or Inaccurate Information. Any approval of an application for Exemption from Real Property Transfer Tax which is based upon false or inaccurate information provided by the applicant shall be void ab initio and such transfer shall be subject to all real property transfer tax imposed along with penalties and interest calculated from the date of such transfer. (f) Duration of Approval. An approval for Exemption from Real Property Transfer Tax which is granted prior to a transfer shall be valid for seventy -five (75) days and shall then expire if the transfer has not occurred. (f) Fees. The Town Council may adopt a resolution setting fees for the processing and reviewing of applications and appeals as is determined reasonably necessary to recover the costs incurred by the Town." Section 3. Codification Amendments. The codifier of the Town's Municipal Code, Colorado Code Publishing, is hereby authorized to make such numerical and formatting changes as may be necessary to incorporate the provisions of this Ordinance within the Avon Municipal Code. The Town Clerk is authorized to correct, or approve the correction by the codifier, of any • typographical error in the enacted regulations, provided that such correction shall not Ord 2010 -10 RETT Application Page 3 of 5 a4v2 6- 316 -10 substantively change any provision of the regulations adopted in this Ordinance. Such • corrections may include spelling, reference, citation, enumeration, and grammatical errors. Section 4. Severability. If any provision of this Ordinance, or the application of such provision to any person or circumstance, is for any reason held to be invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are declared to be severable. The Town Council hereby declares that it would have passed this Ordinance and each provision thereof, even though any one of the provisions might be declared unconstitutional or invalid. As used in this Section, the term "provision" means and includes any part, division, subdivision, section, subsection, sentence, clause or phrase; the term "application" means and includes an application of an ordinance or any part thereof, whether considered or construed alone or together with another ordinance or ordinances, or part thereof, of the Town. Section 5. Effective Date. This Ordinance shall take effect seven days after public notice following final passage in accordance with Section 6.4 of the Avon Home Rule Charter. Section 6. Safety Clause. The Town Council hereby finds, determines and declares that this Ordinance is promulgated under the general police power of the Town of Avon, that it is promulgated for the health, safety and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The Town Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. Section 7. No Existin Violation Affected. Nothing in this Ordinance shall be construed to • g g release, extinguish, alter, modify, or change in whole or in part any penalty, liability or right or affect any audit, suit, or proceeding pending in any court, or any rights acquired, or liability incurred, or any cause or causes of action acquired or existing which may have been incurred or obtained under any ordinance or provision hereby repealed or amended by this Ordinance. Any such ordinance or provision thereof so amended, repealed, or superseded by this Ordinance shall be treated and held as remaining in force for the purpose of sustaining any and all proper actions, suits, proceedings and prosecutions, for the enforcement of such penalty, liability, or right, and for the purpose of sustaining any judgment, decree or order which can or may be rendered, entered, or made in such actions, suits or proceedings, or prosecutions imposing, inflicting, or declaring such penalty or liability or enforcing such right, and shall be treated and held as remaining in force for the purpose of sustaining any and all proceedings, actions, hearings, and appeals pending before any court or administrative tribunal. Section 8. Publication by Posting. The Town Clerk is ordered to publish this Ordinance by posting notice of adoption of this Ordinance on final reading by title in at least three public places within the Town and posting at the office of the Town Clerk, which notice shall contain a statement that a copy of the ordinance in full is available for public inspection in the office of the Town Clerk during normal business hours. [signature page follows] Ord 2010 -10 RETT Application Page 4 of 5 -N4V2 6- 316 -10 • • INTRODUCED, APPROVED, PASSED ON FIRST READING, ORDERED POSTED AND REFERRED TO PUBLIC HEARING and setting such public hearing for June 22, 2010 at the Council Chambers of the Avon Municipal Building, located at One Lake Street, Avon, Colorado, on June 8, 2010. Ronald C. Wolfe, Mayor Published by posting in at least three public places in Town and posting at the office of the Town Clerk at least seven days prior to final action by the Town Council. ATTEST: Patty McKenny, Town Clerk Eric Heil, Town Attorney INTRODUCED, FINALLY APPROVED, AND PASSED ON SECOND READING, AND ORDERED PUBLISHED BY POSTING on June 8, 2010. • Ronald C. Wolfe, Mayor • Published by posting by title in at least three public places in Town and posting by title at the office of the Town Clerk. ATTEST: Patty McKenny, Town Clerk Ord 2010 -10 RETT Application Page 5 of 5 V4V2 6- 316 -10