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1994-49 Agreement with FLOC to Collect Occupational License Taxes from Insurances Operating in the CityRESOLUTION NO. 94 - 49 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF PARKLAND, FLORIDA AUTHORIZING THE CITY OFFICIALS TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF PARKLAND AND THE FLORIDA LEAGUE OF CITIES, INC. TO COLLECT OCCUPATIONAL LICENSE TAXES FROM INSURANCE COMPANIES TRANSACTING BUSINESS IN THE CITY. WHEREAS, the City Commission of the City of Parkland, Florida finds and determines that it is in the best interest of the citizens to execute an Agreement between the City of Parkland and the Florida League of Cities, Inc. to collect occupational license taxes from insurance companies transacting business in the City as described in the Agreement attached hereto and made a part hereof; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF PARKLAND, FLORIDA, that: Section 1. The appropriate City Officials are hereby authorized to execute an Agreement between the City of Parkland, Florida and the Florida League of Cities, Inc. Section 2. That this Resolution shall be in full force and effect immediately upon its passage and adoption. PASSED AND ADOPTED THIS 24 DAY OF AUGUST 1994. (24.4..A; SUSAN ARMSTRONG, C.M.C., CITY CLERK SAL PAGLIARA, YOR AGREEMENT STATE OF FLORIDA COUNTY OF BROWARD THIS AGREEMENT, made and entered into the oN laiday of A.D. /99( , between the FLORIDA LEAGUE OF CITIES, INC., a corpon not for profit of the State of FIorida, with its principal office in the City of Tallahassee, Florida, hereinafter called the "League," and CITY OF PARKLAND, FLORIDA , a municipal corporation of the State of Florida, hereinafter called the "City;" WITNESSETH: That for the consideration hereinafter set forth, the League and City agree that: 1. The League will make the necessary investigations and collect unpaid, escaped and delinquent privilege or occupational license taxes from corporations, firms or associations transacting any insurance business in the City. 2. The City shall not incur any expense or liability in connection with such investigation and collection except as hereinafter set forth. 3. The League, at its expense, will write all necessary letters and assume all other expenses incurred in the collection of said license taxes. 4. Only such corporations, firms or associations obligated to pay such license taxes under State Law or under any City Ordinance of the City shall be approached or investigated. 5. The League shall retain 50% of the amount collected for effecting the collection of such delinquent and escaped privilege, or license, taxes and the balance of 50% of the gross amount recovered shall be forwarded to the City periodically by statements to said City. The League shall receive no commission or compensation for amounts collected in subsequent years on voluntary payments or payments received from billings by the City from companies from which the League has effected collection under this Agreement. 6. During the term of this Agreement the City shall notify the League of any payments or compromise settlements received by the City, of such escaped and delinquent license taxes due from insurance corporations, firms or associations. If any license taxes collected under this Agreement are paid directly to the City, the City shall remit to the League the commis- sion due it under this Agreement, or if sums due are forwarded to the League in the name of the City, the League shall deduct its commission and remit to the City the sums due it under this Agreement. 7. This Agreement shall remain in full force and effect until terminated by either party upon giving at least ninety (90) days notice in writing to the other party, and all collections re- ceived during said ninety (90) day period shall be disbursed in accordance with the above provisions of this Agreement. IN WITNESS WHEREOF, the parties have hereunto caused their names to be signed and their seals to be affixed, this the day and year first above written. ATTEST: City Clerk FLORIDA LEAGUE OF CITIES, INC., a cor- poration not for profit of the State of Florida CITY OF PARKLAND, FLORIDA A Mun'ciaal Cor oration of the State of Florida BY RTCITY MANAGER Florida League of Cities, Inc. 201 West Park Avenue Post Office Box 1757 Tallahassee, FL 32302-1757 Telephone (404) 255-0424 FAX (404) 843-3216 April 20, 1994 Susan Armstrong, CMC, City Clerk City of Parkland 6500 Parkside Dr. Parkland, FL 33067 Re: Delinquent License Collections from Insurance Companies Dear Ms. Armstrong: Raymond C. Sittig Executive Director I appreciate your speaking with me when I stopped by your office on April 14 to discuss the Florida League of Cities' program assisting municipalities for the collection of past -due occupational license taxes from insurance companies. As we discussed, Florida cities may collect occupational license taxes from insurance companies transacting business in the city. Florida municipalities are authorized by Section 205.042, Fla. Stat., to levy by appropriate resolution or ordinance an occupational license tax. Businesses, including insurance companies, that are physically located in the city are obligated to pay the tax under the provisions of Section 205.042, subsections 1 and 2. Insurance companies doing business within the municipal limits, regardless of whether or not offices are maintained in the city, are obligated -to- a At un er Section 205:04/77RIEFUEEM 3. Subsection 3 permits the collection of an occupational license tax from "[a]ny person who does not qualify under the provisions of Subsection (1) or Subsection (2) [i.e., who does not have a business location in the city] and who transacts any business or engages in any occupation or profession in interstate commerce, if such license tax is not prohibited by Section 8 of Article I of the United States Constitution (the Commerce Clause]." This provision, therefore, clearly requires insurance companies to pay the tax, whether or not they are physically located in the city, since such taxation of insurance companies is not in any way prohibited by the Commerce Clause due to the passage of the McCarran-Ferguson Act by United States Congress, and under subsequent decisions of the United States Supreme Court. The League's program has been in effect for many years, and we believe that it has been beneficial, productive, and it has recovered sizable amounts of lost revenue for our cities. Enclosed are copies of excerpts from the Florida League of Cities' Datagrams of June 1992 and 1993 which list funds paid to a number of the participating cities. Since we aggressively seek collections for any given city every other year, typically we will have a year of substantial collections followed by a year of residual collections, which is seen in the different amounts disbursed. April 20, 1994 page 2 Our work and research will be done without any expense to your city. Our consultants will periodically contact you or any designated person to secure a list of the insurance companies which have paid the license tax to your city in accordance with your ordinance. We will then proceed to research computerized data and other records and information we have compiled to discover companies which have operated in your city but have failed to pay the proper licenses for past years. This will permit the recovery of lost revenue and place the companies on your records for future collections. After the necessary research, the companies which appear to be delinquent in license payments to your city are contacted by the League, requesting payment of the license or information to substantiate that the licenses are not due. Annually, a statement is sent to your city showing the names of companies from which collections have been made, together with remittance for the amount due you. These companies can then be placed on your records for future collections which, of course, the League will not participate in unless after future investigations one or any of the companies are again found delinquent and licenses are collected as a result of our investigations and contact. We have found in the past that new companies are being qualified in the State every year and are doing business in the cities without paying the necessary license. In most cases this is due to the fact they have not checked with the city and are not aware of the ordinance requirements. This, of course, is no excuse for non-payment. We are enclosing two copies of the agreement between the city and the League for this work which we believe is self-explanatory. As you will note., it provides that the city will incur no expense or obligation unless revenue is recovered. Of the delinquent and escaped licenses collected, the League under the agreement will retain 50%. This is to pay the firm investigating and conducting the research necessary, and defray other expenses. Also, a portion of this percentage goes to the League to support our programs. The city receives 50% of the delinquent licenses collected plus future collections made by the city from these companies. We feel the recovery of the delinquent and escaped licenses, which revenue has already been lost to the city, is important and the collection of the licenses in the future is of great value. If you would like for the League to conduct this work, on behalf of your city, please have the enclosed agreements executed and returned to our office. We will have them executed on the part of the League and return one copy to you for your file. Also, I understand that you will furnish our office a copy of your license ordinance. I will review it and suggest any changes which may be appropriate for the collection of the tax from insurance companies. April 20, 1994 page 3 We hope that we will be able to conduct this work for your city, as we believe it will be a productive endeavor. We look forward to being of service to you. R. Peter Catlin III RPC/bt Enclosures