tv Government Access Programming SFGTV August 9, 2018 10:00am-11:01am PDT
>> clerk: item 15, to the voter for an election to be held on november 6, and to amend the business and tax code to propose the gross receipt tax january 1, 2021, on gross receipts from cannibas business activities but exempting the first $500,000 of gross receipt and the retail sales of cannibas. and 16, to have an election to be held on november 6, 2018, and to amend the code to impose an additional growth receipt tax starting january 1, 2021 on gross receipt from cannibas business activities but exempting the first $500 how to of gross receipt and exempting the sales of medicinal cannibas. >> chair cohen: this is the third time that this committee has heard this particular proposal. and i appreciate your willingness to engage on this issue and i think -- and to
think about the policy implications of this legislation. the cannibas industry is a new one in san francisco and we're still finding our footing. there's still a lot of fear and misinformation out there about cannibas and not just across the country but also in this city. we as a board try to educate ourselves about the supply chain and the land-use restrictions and about the workforce of the cannibas industry and about the compassion programs, i think that we need to bring the city along with us, again, as we educate ourselves. and the industry has shown that they are not able to do this alone and they're going to need our assistance. and if you don't mind i would like to briefly go over how we got to this point to where we are today. this tax discussion started in 2016 with the passage of prop 64. and last summer mayor ed lee convened a cannibas tax working group comprised of several members of his staff, including the office of cannibas, and the budget office, and the senior
health advisor, my office, and the office of supervisor jeff sheehy and the office of the controller. we examined the rates and structures of our neighbors, neighboring counties, cities and counties, and we determined a few things. first, that we an adjustable rate are -- that adjust annualae rates are essential to have the data-driven approach given to have a data driven approach, give how little reliable information there is out there at this time. and, second, that a dedicated tax would be premature. given the ambiguity around revenues, around the number of businesses and around prices and around the spending needs of the industry. it's just not enough solid information. we've decided that medicine should not be taxed and that we would go to the extent of our
legal ability to keep medical cannibas taxes at a zero percent level. finally, based on the advice of our city attorney and in keeping with most of other jurisdictions in or around the city, we would move forward with a gross receipts tax. now in may my office presented a group -- my office presented to a group of industry stakeholders with a plan that had a rate adjustable up to 10% starting with retail at 5%. and upstream businesses at 3%. and small business extension. and a super majority required to change the rates. this would go into effect this coming january. the feedback that we received from those meetings was not so much on the actual rates but more on the concern about the black market and the unlicensed
operators. and i want to just underscore that because that is a real concern that this body now as well as future bodies will probably have to still grapple with and we don't have a concise answer again to address the black market and the unlicensed operators. the industry has expressed a desire to want more time and space to settle into and to gain their footing. the less that we introduced in june reflected this request. it delayed the start date to 2020 as opposed to january 2019. and it had a phase-in with a lower rate for the first year. again, a lower rate, a lower tax rate within the first year. this phased in approach would give the industry more time to get into compliance. it would give the city some time to coordinate and implement an enforcement strategy. and after introduction we heard
more from cultivators and manufacturers. cultivators had a unique perspective, they pointed out that they were -- that they are price takers in the market and like most other agricultural products and together with -- together with the manufacturers, most of these small businesses represent a union and represent a p.d.r. labor force. unlike retail these businesses are more likely to move outside of the city and i think that it's a goal of ours to want to keep p.d.r. and union jobs inside san francisco. as such, in committee on july 12th we lowered the introductory rate for all businesses and lowered the tax rate for upstream businesses. and then the next round of
industry feedback is that the industry craved normalcy and they pointed to the tax overhaul which will be conducted in partnership with the san francisco chamber of commerce and this overhaul is doing to take place some time during 2020, and the industry has asked that we not put a tax if place until after that point. last week we amended to delay any tax implementation, tax rate impelection, to after that -- implementation until after that process was completed. i believe that we have been very responsive, we've been open and thoughtful about our approach as we continue to move forward. we have worked with the controller's office to understand the impacts of this on the tax industry and i want to thank again the controller for their thoughtful report, and we have worked with the industry to understand more about the black market, to understand what is necessary to help normalize this industry. and wanted to publicly affirm that we're not going to stop that conversation and we'll continue to move forward. and i want to also indicate that
we're committed to working together on a compassion program and a compassion program, some of you may not be familiar with exactly what that is because it's very much of a colloquial term but it's a program that is set aside within the industry where people understand that not everyone has the resources to pay for cannibas. and so a compassionate program discounts the cost of cannibas for those that are in need of this medicine but do not have the resources to pay market price. and the other portion that we are working -- committed to working together on is the workforce development. supervisor safai had consideration that we continue as we normalize this industry to begin to educate and create programs such as partnering with san francisco city college to educate a workforce that is then going to be poised to jump into the workforce and allow us to
have a meaningful equity program. but we need revenue. bottom line is that we're going to need revenue to do all of this work. so what i am doing is asking the industry to come to the table and to help us to figure this all out. and i want us to be good allies but that doesn't mean no taxes. so, colleagues, this week i have received a counter proposal on rates from the industry. i have sir circulated them and u have them before you and i was uncomfortable to make this decision myself so i'm bringing them to the committee so there's a discussion around what the new proposed rates are. the industry has suggested a new three-year phase-in starting in 2021. and ramping up to 2023. and eventually arriving to 3% for retail and 1.5% for everything outside of retail which is also identified as upstream. as you know our limits to ballot initiatives require a
continuance. and i appreciate the industry engaging on this issue but given the two-month public process that we have been working through i believe that it's a little bit too late. as a reminder these are just interim rates that will appear on the ballot and the board can revise the intro rates down at any time after passage before this goes into effect. i want to make sure that we consider the options. however, if any of my colleagues believe that this is inappropriate to do so, please, let me know. the amendments today would require that we have a special meeting on tuesday morning, july 31st. and with that i open up the discussion to colleagues. supervisor fewer. >> supervisor fewer: yes, so after review of what we have received today and actually i am of the belief that the board has the ability to amend this by ordering it to later on. and that it isn't imperative that we conclude this today.
i ask the city attorney for his professional opinion on that and whether the legislation proposed allows the board to have the ability to actually make these changes later on. >> deputy city attorney john gibner. as i understand the roposa proco lower the rates for retail and non-retail and scale them up over the course of three years. between 2021 and 2023. >> chair cohen: that's correct. >> if this ordinance is not amended and you place it on the ballot and it passes the board of supervisors can legislatively lower the rates by adopting an ordinance in the future without going back to the voters. so effectively you can accomplish what this amendment would do after the measure passes by adopting an ordinance at the board. >> chair cohen: okay, thank you
very much. that's helpful. supervisor stefani, you have any thoughts? no. okay. all right, seeing that there are no thoughts -- >> i would like to say that i also believe that because it's actually more prudent to actually do it after this has gone on the ballot because then the board would have more data to choose from and to review and to actually make a sound judgment on this. and, actually, the legislation allows for that as we heard from our city attorney. >> chair cohen: okay, appreciate that. thank you. so we can go ahead and open up to public comment. i see that we have mr. lazarus here who would like to speak on items 15 and 16? >> i am a licensed cannibas
distributor in san francisco. and i want to make sure that everyone is clear on what the impact would be on a gross receipt tax. as a distributor i have three responsibilities -- transport, test and tax. i pick it up from the grower. the lab tests it to make sure that it's safe for consumption and i deliver it to the retailer and i collect excise and i collect cultivation and i give it to the state. my business operates on low margins. anywhere from 3% to 10%. a 10% tax on gross receipts, if i buy something for $900 and i sell it for $1,000, a gross receipts tax means that i make zero dollars. i have two options -- i can charge more or i can go out of business.
or i can work somewhere else. i'm just part of the value chain. every other business that i sell or buy from has to do the same thing. gross receipts tax is bad tax policy and it's a depression era policy. there are other ways to gain tax revenue. i'm very grateful for my permit and i'm hiring through the s.f. jobs portal. i know that it will be a very impactful business. please reconsider how you tax with gross receipts. >> chair cohen: thank you. colleagues, i want to acknowledge that the distribution is exempt from the tax and that we are not discussing or considering a tax at 10%. >> jim lazarus, san francisco chamber and i appreciate your work on this and certainly supervisor cohen. we urge you to proceed with the amendment, proceed with the
special meeting next tuesday and to put a measure on that will have the support of the industry and the broader business community. we believe that a tax rate that is excessive comparing the legal cannibas industry to the underground illegal industry will do nothing to move forward the type of changes that we want in this industry and to bring being it out of the shadow -- bringing it out of the shadows and taxing it and regulating it and having it available to the public in the following way. following state of california and following other communities' misguided tax policies is not what we should be doing here today. this industry pays taxes today, and the city's gross receipts and payroll taxes apply to this industry today. but the rates that you add to that -- and, remember, these are additive, may hurt the legalization of this industry and i know that is not the intention of the board or the
industry. so the chamber urges you to take seriously that proposal put forward for a further year delay for a phase-in during the start-up years of this infant legal industry. allowing the board in the future -- we don't want to appear to lower them -- hopefully this is successful enough that under your provisions you will be able in the future to raise these taxes on an healthy industry. that's what we ask you to do. there's time to do it and we request that. thank you very much. >> chair cohen: thank you, next speaker. speaker.sfgov, can i have the overhead, please. president cohen and supervisor stefani and supervisor fewer, thank you for hearing my comments. i would like to congratulate jim lazarus and myself for being 3-3 and batting a thousand at the
budget and finance sub-committee. i am pleased to hear that you are considering additional amendments. i worked with the california growers association and the chamber of commerce to create rates that this industry could get behind and support. the rates as proposed when you look at the rest of california are, in fact, reasonable for a cannibas tax. but not reasonable from a tax of any other industry. so the rates that we propose up here on the overhead, have no tax for 2019-2020 and then phase-in for retail and non-retail. i point out that retail will pay double the tax of non-retail in our proposal here. because on retail they have a lot more hurdles than us. so consider the amendments that we've requested, consider the special committee hearing, and thank you to everyone for their very hard work on this very important matter. and if anybody is interested in
learning more about the retailer alliance, alliance our website. >> chair cohen: thank you. next speaker. >> hello, my name is brandon brown, the treasurer of the sfcra, and i appreciate the board allowing us to speak on this issue. i don't want to sound like a broken record but i want to just remind the board that the reason that we tax cigarettes and alcohol and other drugs is because they kill people and cannibas hasn't killed anybody, it's actually curing people. and so i'm not going to say that the tax isn't justified but i would love to know more about why we're getting taxes on top when no other industry has a social equity program. thank you, president cohen, for
kind of spearheading that. and so compassion programs and the other industries have that. we already have pretty high tax, state tax. there's already a gross receipts tax for businesses. and so i think we're really just asking to be treated like every other business in san francisco. i guess that also the main difference between cannibas and other businesses is that we cure people, we cure ptsd, and we cure cancer and we cure child leukemia and other various basic pain allmentpain ailments that e quality of life for a number of our elderly and the military coming back from war with a lot of issues. and pharmaceutical companies as we all know are not a big help in that respect. and so i would like to just bring some of those more emotional facts to the table when we talk about who's going
to really be affected by this. it's going to be the consumer, like the distributor here pointed out, it's raising the price and they'll go out of business. so the cost will be handed off. >> chair cohen: thank you. and also i want to say, mr. brown, medicinal is not going to be taxed and recreational is what is taxed. thank you, next speaker. >> hi, i am jolene enns and i'm here as a worker in the industry. for the last 12 years i have been supplementing my income or completely supporting myself in the cannibas industry as a worker, as a trimmer, just doing labor. and for a long time that was enough. those jobs that you used to pay $25 an hour or the equivalent are now gone. i'm fortunate that i got a job with a small cannibas company in the city. we occupy 4500-square-foot
facility in soma and we have a 25,000-square-foot cultivation facility that had to be moved to oakland because we just couldn't afford to do business in the city here. i'm here today because i am worried about my job and the jobs of others like me that are going to be squeezed with more taxes on our industry. it was pretty clear before the regulations came into effect that when prices were low for wholesale product and rents were high, the only way for producers to make up that difference was to lower the rates that they paid for their workers. so i can toitle totally see that happening in this industry too. there's no margin right now and we're really scrambling to get products on the shelf that are compliant with all of the regulations that are, you know,
still shifting. so i'm here to speak for the workers that are trying to make a living in this new industry. thank you. >> chair cohen: thank you. next speaker. >> good morning, supervisors. my name is dr. chris emerson, the c.e.o. of the manufacturing company here in san francisco. we operate at a severe disadvantage already against the illicit market and so we can have runway and the state will start enforcing that, the high tax rates are destroying the companies that are trying to be compliant within this. so not only 15% excise tax but lease taxes that we have to account for. and so upstream and downstream we have a heavy tax burden. there's also 280-even so as a business in san francisco or federally i pay roughly 30% more for taxes because we're not able to take a lot of writeoffoffs tt other businesses are. and we understand as an industry
that we'll pay higher tax rates but the tax rates proposed at 1.5% with the ability it go up to 7% over time is untenable for companies to really survive or that want to remain in san francisco. and i would like to draw also to your attention supervisor cohen that there's a very significant possibility that the medicinal market in california is going to be gone in a few years. the state of california doesn't want a two-tiered system and most retailers and operators in this space, almost everything is going to quote/unquote, a recreational market. and it's just that there's too many barriers for the medicinal market to actually survive. it's something to keep in mind. so as mr. lazarus suggested we urge you to consider this procedural needs to have one more special session so that amendments we propose could be considered, thank you. >> chair cohen: thank you, next speaker. >> my name is elaine brown and i'm here to really talk about
something else. we have been trying to reach you, supervisor cohen, for some time and i have gotten emails from my office putting me off and saying you're in budget hearings and i'm here with a number of delegations from your district in hunter's point who are suffering from cancer and so forth because of the radiated land. you chose to not only expand the reach in hunter's point shipyard but said this is a dream to come true to build on that and then put the big scanners out there. i'm here to ask you can we meet with you to tell you what we want to talk about since you won't come to hunter's point and talk to the people there, that the people had to come here. i can't believe that you called all those police to come here. i watched you text them, two minutes later they're showing up like we're enemies of the people. you have shown yourself to be an enemy if you don't have a meeting with us and give us a date for a meeting. i would like to introduce you to someone that you know well, danielle carpenter, whose husband lost his life because of that radiated land. that's my time. >> two years ago on march 22n
22nd, you and i spoke and we talked about -- you said that you would reopen the case because another whistleblower had come forth. i have not heard anything and now this is going on. we would like to schedule an appointment with you to sit down and figure out what's going on. plain and simple. >> (indiscernible). >> good morning, my name is william dolan and i'm here to speak on behalf of two applicants right now. i represent and work with two applicants that have applicants in the office of cannibas for retail licenses and i would like to first say that we support the proposal put forward by the san francisco chapter of the california growers association, the san francisco cannibas retailers alliance, to adjust the rate schedule as proposed earlier by the gentleman that put up the schedule on the
screen. and we would also like to speak in support of a cap on the tax at 4% instead of 7%. and specifically i'd like to address the issue of how this is going to impact the equity on businesses and after a two-year extremely challenging process of getting license and trying to open up their doors and dealing with the costs associated with that, securing real estate and renovating the real estate and then opening to a very challenge being competitive environment. so i'd like the board to consider the impacts that this will have on equity owners trying to operate in this small business environment and if there's a potential for an additional grace period that asupplies to equity owned cannibas businesses. something to exceed two to three years. that would make their tax plan kick in around 2023 or 2024. and any type of additional grace period would be greatly be
appreciated and extremely helpful for equity applicants trying to open up a business in san francisco. >> chair cohen: thank you. >> good morning, supervisors, my name is ryan ingo-warren and i work in the cannibas industry and a san francisco native. i thank you for your consideration on this issue and as i came in i heard about possible continuations to continue the amendments and i support that. and i apologize in advance if i repeat myself at all. i want to just offer some context. in october 2016, oregon's issues came in effect and the supply chain backlog was so severe that it brought their cannibas industry to its knees and resulted in temporary layoffs of 70% of their workforce. and it's not that bad here yet, but there are some similarities that are alarming.
and that sort is the broader context of the big part of that problem was poorly written statements that were requiring testing accuracies that the labs themselves were not yet certified to meet. unfortunately, that is identical, that particular factor, is identical to what is happening in california. so given that most of that is beyond your control i hope that you will take action where you're able to by reducing the impact of these new regulations on local san francisco businesses, by mitigating the gross receipts tax. as may have been mentioned earlier the proposed taxes are 5% to 50% higher than those leveled against other businesses and we're just proposing a little consideration there. also we have seen higher taxes force patients and consumers back into the unregulated market which may raise public safety concerns with untested product and reduces your overall tax
revenue. so i close by echoing the recommendations of pie colleagues and i'll leave information for your reference. reducing the cap to 4%. and encouraging the state to lower both the excise and the cultivation tax. and doing something about the unregulated operations. >> chair cohen: thank you. next speaker. yes. next speaker. >> hi. i am a resident of bayviewpoint. and i'm here with... (indiscernible) i really want appreciate if you give us a time to meet with you. i have been at hunter's point for a very long time and i now have a clot in my left atrium and i have had a heart transplant and i'm waiting on a kidney. and i do believe that it all came from living up there for 50
years. that's all i wanted to say, thank you. >> chair cohen: thank you. all right, public comment is closed. thank you. so, coa colleagues, i'd like to table item 15 and approve item 16 and move that with a positive recommendation and send this to committee and cent i send it asa committee report. supervisor stefani? indicated yes for the record. and if you have any clarification on anything let us know so that we can get to the information that you need as well as a timeline and answer whatever questions that may persist about the proposed tax measure. and we will take that without objection. thank you. all right. madam clerk, any other business before us. >> clerk: no other business. >> chair cohen: okay. thank you, we're adjourned.
>> we think over 50 thousand permanent residents in san francisco eligible for citizenship by lack information and resources so really the project is not about citizenship but really academy our immigrant community. >> making sure they're a part of what we do in san francisco the san francisco pathway to citizenship initiative a unique part of just between the city and then our 5 local foundations
and community safe organizations and it really is an effort to get as many of the legal permanent residents in the san francisco since 2013 we started reaching the san francisco bay area residents and 10 thousand people into through 22 working groups and actually completed 5 thousand applications for citizenship our cause the real low income to moderate income resident in san francisco and the bayview sometimes the workshops are said attend by poem if san mateo and from sacking. >> we think over restraining order thousand legal permanent residents in san francisco that are eligible for citizenship but totally lack information and they don't have trained
professionals culturally appropriate with an audience you're working with one time of providing services with pro bono lawyers and trained professionals to find out whether your eligible the first station and go through a purview list of questions to see if they have met the 56 year residents arrangement or they're a u.s. citizenship they once they get through the screening they go to legal communication to see lawyers to check am i eligible to be a citizen we send them to station 3 that's when they sit down with experienced advertising to fill out the 4
hundred naturalization form and then to final review and at the end he helps them with the check out station and send them a packet to fill and wait a month to 6 weeks to be invited in for an oral examine and if they pass two or three a months maximum get sworn in and become a citizen every single working groups we have a learning how to vote i mean there are tons of community resources we go for citizenship prep classes and have agencies it stays on site and this is filing out forms for people that are eligible so not just about your 22 page form but other community services and benefits
there's an economic and safety public benefit if we nationalize all people to be a citizen with the network no objection over $3 million in income for those but more importantly the city saves money $86 million by reducing the benefit costs. >> thank you. >> i've been here a loventh i already feel like an american citizen not felt it motorbike that needs to happen for good. >> one day - i pledge
allegiance to the flag of the united states of america and to the republic for which it stands, for liberty and justice for all. >> you're welcome. >> (singing). >> (clapping.) >> introduce the san francisco field officer director ribbon that will mirror the oath raise your hand and repeat the oath i hereby declare on oath repeating. >> citizens cry when they become citizenship to study this
difficult examine and after two trials they come back i'm an american now we're proud of that purpose of evasion so help me god please help me welcome seven hundred and 50 americans. >> (speaking foreign language.) >> she wants to be part of the country and vote so much puppy. >> you know excited and as i said it is a long process i think that needs to be finally recognized to be integrated that is basically, the type of that i see myself being part of.
>> out of everybody on tv and the news he felt that is necessary to be part of community in that way i can do so many things but my voice wouldn't count as it counts now. >> it's everybody i hoped for a bunch of opportunities demographics and as you can see yourself there's a good life for everyone. >> that's why. >> you have people from all the walks that life and they're standing in water 8 hours to be
we do a lot of the big sexy jobs, the stacked towers, transit center, a lot of the note worthy projects. i'm second generation construction. my dad was in it and for me it just felt right. i was about 16 when i first started drafting home plans for people and working my way through college. in college i became a project engineer on the job, replacing others who were there previously and took over for them. the transit center project is about a million square feet. the entire floor is for commuter buses to come in and drop off, there will be five and a half acre city park accessible to everyone. it has an amputheater and water
marsh that will filter it through to use it for landscaping. bay area council is big here in the area, and they have a gender equity group. i love going to the workshops. it's where i met jessica. >> we hit it off, we were both in the same field and the only two women in the same. >> through that friendship did we discover that our projects are interrelated. >> the projects provide the power from san jose to san francisco and end in the trans bay terminal where amanda was in charge of construction. >> without her project basically i have a fancy bus stop. she has headed up the women's
network and i do, too. we have exchanged a lot of ideas on how to get groups to work together. it's been a good partnership for us. >> women can play leadership role in this field. >> i tell him that the schedule is behind, his work is crappy. he starts dropping f-bombs and i say if you're going to talk to me like that, the meeting is over. so these are the challenges that we face over and over again. the reality, okay, but it is getting better i think. >> it has been great to bond with other women in the field. we lack diversity and so we have to support each other and change the culture a bit so more women see it as a great field that they can succeed in.
>> what drew me in, i could use more of my mind than my body to get the work done. >> it's important for women to network with each other, especially in construction. the percentage of women and men in construction is so different. it's hard to feel a part of something and you feel alone. >> it's fun to play a leadership role in an important project, this is important for the transportation of the entire peninsula. >> to have that person -- of women coming into construction, returning to construction from family leave and creating the network of women that can rely on each other. >> women are the main source of income in your household. show of hands. >> people are very charmed with the idea of the reverse role, that there's a dad at home instead of a mom. you won't have gender equity in the office until it's at home.
>> whatever you do, be the best you can be. don't say i can't do it, you can excel and do whatever you want. just put your mind into it. [ gavel ]. >> supervisor tang: all right. good afternoon, everybody. welcome to our land use committee meeting for monday, july 30, 2018. to my left is supervisor ahsha safai, and our clerk is erica