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<br />REQUEST FOR CITY COUNCIL AGENDA ITEM <br /> <br />Agenda Date Requ,ested June 7, 2006 <br />Requested By: CIty Attorney <br /> <br />Appropriation <br /> <br />Source of Funds: <br /> <br />Department: <br /> <br />City dttQmey'~ Office <br /> <br />Account Number: <br /> <br />Report: <br /> <br />Resolution: <br /> <br />Ordinance: <br /> <br />x <br /> <br />Amount Budgeted: <br /> <br />- .... <br /> <br />Amount Requested: <br /> <br />Exhibits: <br /> <br />Ordinance and E-Mail Memo <br /> <br />Budgeted Item: YES NO <br /> <br />Exhibits: <br /> <br />SUMMARY & RECOMMENDATION <br /> <br />Recently it was brought to the City's attention that the tax imposed on coin-operated machines by City Hall might be <br />in excess of the maximum allowable rate prescribed under State law (Texas Occupations Code - Chapter 2153). <br />Currently the City Code of Ordinances imposes a $25 yearly tax, per machine. <br /> <br />The City Attorney's office handled the matter by 1) reviewing the requirements of the Texas Occupations Code and <br />2) contacting an official with the State Comptroller's Office. <br /> <br />During the course of the review it was confirmed that the City's $25 annual, per machine tax rate is higher than the <br />maximum allowable rate, which under the Occupations Code is required to be no more than Y.t of the rate of the <br />State annual tax of $60. As a result, the maximum rate the City can assess against a coin-operated machine is $15 <br />per year. Furthermore, the City is required to pro rate this amount based on guidelines contained in the Occupations <br />Code, in the case of machines that are first displayed either in the second, third, or fourth quarter of the calendar <br />year. Thus, the allowable City tax rate to be imposed for a machine displayed in the first quarter is $15; for a <br />machine displayed in the second quarter, $11.25; for a machine displayed in the third quarter, $7.50; for a machine <br />displayed in the fourth quarter, $3.75, <br /> <br />The City Attorney notified the City Secretary of the discrepancy after the review, to alert City staff to the proper tax <br />and to cease any collections above the maximum rate. <br /> <br />An amendment to Chapter 10 and Appendix A- Fees of the Code of Ordinances has been prepared for your <br />consideration, which incorporate the necessary changes to bring the City in compliance with State law. Also <br />provided for your review is the written notice sent to the City Secretary. <br /> <br />Action Required bv Council: <br /> <br />Recommendation is to approve the ordinance amending Chapter 10 of the Code of Ordinances and Appendix A- Fees to <br />harmonize City of La Porte coin-operated machine tax rate with requirements of Texas Occupations Code. <br /> <br /> <br />A <br /> <br />& -;)[ ~00 <br /> <br />Date <br />