HomeMy WebLinkAboutResolution No. 12-7348 RESOLUTION NO. 12 -7348
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF THE
CITY OF A CERTAIN MEASURE AMENDING ARTICLE VI, CHAPTER 1 D OF
THE DOWNEY MUNICIPAL CODE, THE UTILITIY USERS' TAX, AT THE
GENERAL MUNCIPAL ELECTION TO BE HELD ON TUESDAY,
NOVEMBER 6, 2012
WHEREAS, a General Municipal Election to be held on Tuesday, November 6, 2012 has
been called by Resolution No. 12 -7334, adopted on June 12, 2012; and
WHEREAS, the General Municipal Election has been consolidated with the Statewide
General Municipal Election by the City Council pursuant to Resolution No. 12 -7335 adopted on
June 12, 2012;
WHEREAS, the City Council also desires to submit to the voters at the General
Municipal Election a measure amending Article VI, Chapter 1D of the Downey Municipal Code,
relating to the City's Utility Users' Tax.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. Pursuant to Section 9222 of the California Elections Code, the City
Council of the City of Downey does order submitted to the voters at the General Municipal
Election on Tuesday, November 6, 2012 the following question:
Shall an ordinance be adopted to reduce the tax on
telecommunication services from 5% to 4.8 %; YES
modernize the ordinance to treat taxpayers equally
regardless of technology used; and to preserve
funding of general City services, such as police, fire
protection, street maintenance; and for parks and NO
recreation, library and senior citizen programs; subject
to an annual independent audit?
SECTION 2. The proposed measure submitted to the voters pursuant to Section 1 is set
forth in Exhibit A, attached hereto.
SECTION 3. That in all particulars not recited in this resolution, the election shall be
held and conducted as provided by law for holding municipal elections.
SECTION 4. That notice of the time and place of holding the election is given and the
City Clerk is authorized, instructed and directed to give further or additional notice of election, in
time, form and manner as required by law.
RESOLUTION NO. 12 -7348
PAGE 2
SECTION 5. That the City Clerk shall certify to the passage and adoption of this
resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED this 10 day of July, 2012.
ROG C. BROSSMER, Mayor
ATTEST:
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ADRIA M. JIMENEZ, CMC
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of
the City of Downey at a regular meeting thereof held on the 10 day of July, 2012, by the
following vote, to wit:
AYES: Council Members: Guerra, Marquez, Vasquez, Gafin, Mayor Brossmer
NOES: Council Members: None
ABSTAIN: Council Members: None
ABSENT: Council Members: None
�; �....� 5Th
,
I
ADRIA M. JIMENE CMC
City Clerk
MEASURE
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DOWNEY, CALIFORNIA AMENDING
ARTICLE VI, CHAPTER 1D OF THE DOWNEY MUNICIPAL CODE WITH
RESPECT TO UTILITY USERS' TAX.
THE PEOPLE OF THE CITY OF DOWNEY, CALIFORNIA DO ORDAIN
AS FOLLOWS:
SECTION 1. Article VI, Chapter 1D of the Downey Municipal Code is hereby
amended, and it shall read as follows:
Chapter 1D
Utility Users' Tax
6180 Short Title
6181 Definitions
6182 Constitutional, Statutory, and Other Exemptions
- - 6183 Telecommunication Users' Tax
6184 Electricity Users' Tax
6185 Gas Users' Tax
6186 Collection of Tax from Service Users Receiving Direct Purchase of Gas or
Electricity
6187 Bundling Taxable Items with Nontaxable Items
6188 Substantial Nexus /Minimum Contacts
6189 Duty to Collect — Procedures
6190 Collection Penalties — Service Suppliers
6191 Actions to Collect
6192 Deficiency Determination and Assessment — Tax Application Errors
6193 Administrative Remedy — Nonpaying Service Users
6194 Additional Powers and Duties of the Tax Administrator
6195 Records
6196 Refunds
6197 Appeals
6198 No Injunction/Writ of Mandate
6199 Notice of Changes to Chapter
6200 Future Amendment to Cited Statute
6201 No Increase in Tax Percentage or Change in Methodology without Voter
Approval
6202 Independent Audit of Tax Collection, Exemption, Remittance, and Expenditure
6203 Remedies Cumulative
6204 Interaction with Prior Tax
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Chapter 1D — UTILITY USERS' TAX
Section 6180. TITLE. This chapter shall be known as the "Utility Users' Tax
Ordinance of the City of Downey."
Section 6181. Definitions
The following words and phrases whenever used in this Chapter 1D, shall be
construed as defined in this Section.
(a) "Ancillary telecommunication services" means services that are
associated with or incidental to the provision, use or enjoyment of telecommunications
services, including but not limited to the following services:
(1) "Conference bridging service" means an ancillary service that
links two (2) or more participants of an audio or video conference call and may include
the provision of a telephone number. Conference bridging service does not include the
telecommunications services used to reach the conference bridge.
(2) "Detailed telecommunications billing service" means an
ancillary service of separately stating information pertaining to individual calls on a
customer's billing statement.
(3) "Directory assistance" means an ancillary service of providing
telephone number information, and /or address information.
(4) "Vertical service" means an ancillary service that is offered in
connection with one or more telecommunications services, which offers advanced calling
features that allow customers to identify callers and to manage multiple calls and call
connections, including conference bridging services.
(5) "Voice mail service" means an ancillary service that enables the
customer to store, send or receive recorded messages. Voice mail service does not
include any vertical services that the customer may be required to have in order to utilize
the voice mail service
(b) "Billing address" shall mean the mailing address of the service user
where the service supplier submits invoices or bills for payment by the customer.
(c) "City" shall mean the City of Downey.
(d) "Gas" shall mean natural or manufactured gas or any alternate
hydrocarbon fuel that may be substituted therefor.
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(e) "Mobile telecommunications service" has the meaning and usage as set
forth in the Mobile Telecommunications Sourcing Act (4 U.S. C. Section 124) and the
regulations thereunder.
(0 "Month" shall mean a calendar month.
(g) "Non- Utility Service Supplier" means:
(1) a service supplier, other than a supplier of electric distribution services
to all or a significant portion of the City, which generates electricity for sale to
others, and shall include but is not limited to any publicly -owned electric utility,
investor -owned utility, cogenerator, distributed generation provider, exempt
wholesale generator (15 U.S. C. Section 79z -5a), municipal utility district, federal
power marketing agency, electric rural cooperative, or other supplier or seller of
electricity;
(2) an electric service provider (ESP), electricity broker, marketer,
aggregator, pool operator, or other electricity supplier other than a supplier of
electric distribution services to all or a significant portion of the City, which sells
or supplies electricity or supplemental services to electricity users within the City;
or
(3) a gas service supplier, aggregator, marketer or broker, other than a
supplier of gas distribution services to all or a significant portion of the City,
which sells or supplies gas or supplemental services to gas users within the City.
(h) "Paging service" means a "telecommunications service" that provides
transmission of coded radio signals for the purpose of activating specific pagers; such
transmissions may include messages and /or sounds.
(i) "Person" shall mean, without limitation, any natural individual, firm,
trust, common law trust, estate, partnership of any kind, association, syndicate, club, joint
stock company, joint venture, limited liability company, corporation (including foreign,
domestic, and non - profit), joint power agency, municipal district or municipal
corporation (other than the City), cooperative, receiver, trustee, guardian, or other
representative appointed by order of any court.
(j) "Place of primary use" means the street address representative of where
the customer's use of the telecommunications service primarily occurs, which must be
the residential street address or the primary business street address of the customer.
(k) "Post -paid telecommunication service" means the telecommunication
service obtained by making a payment on a communication -by- communication basis
either through the use of a credit card or payment mechanism such as a bank card, travel
card, credit card, or debit card, or by charge made to a service number which is not
associated with the origination or termination of the telecommunication service.
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(1) "Prepaid telecommunication service" means the right to access
telecommunication services, which must be paid for in advance and which enables the
origination of communications using an access number or authorization code, whether
manually or electronically dialed, and that is sold in predetermined units or dollars of
which the number declines with use in a known amount.
(m) "Private telecommunication service" means a telecommunication
service that entitles the customer to exclusive or priority use of a communications
channel or group of channels between or among termination points, regardless of the
manner in which such channel or channels are connected, and includes switching
capacity, extension lines, stations, and any other associated services that are provided in
connection with the use of such channel or channels. A communications channel is a
physical or virtual path of communications over which signals are transmitted between or
among customer channel termination points (i. e., the location where the customer either
inputs or receives the communications).
(n) "Service address" means the residential street address or the business
street address of the service user. For a telecommunication service user, "service
address" means either:
(1) The location of the service user's telecommunication equipment
from which the telecommunication originates or terminates, regardless of where the
telecommunication is billed or paid; or, -
(2) If the location in subsection (1) of this definition is unknown (e.g.,
mobile telecommunications service or VoIP service), the service address means the
location of the service user's place of primary use.
(3) For prepaid telecommunication service, "service address" means the
location associated with the service number or, if not known, the point of sale of the
services where the point of sale is within the City.
(o) "Service supplier" shall mean any entity or person, including the City,
that provides, sells, or resells a utility service to a user of such service within the City.
(p) "Service user" shall mean a person required to pay a tax imposed under
the provisions of this Chapter.
(q) "State" shall mean the State of California.
(r) "Streamlined Sales and Use Tax Agreement" means the multi -state
agreement commonly known and referred to as the Streamlined Sales and Use Tax
Agreement, as it is amended from time to time.
(s) "Tax Administrator" shall mean the Finance Director, or his or her
designee.
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(t) "Telecommunications service" means the transmission, conveyance, or
routing of voice, data, audio, video, or any other information or signals to a point, or
between or among points, whatever the technology used. The term "telecommunications
services" includes such transmission, conveyance, or routing in which computer
processing applications are used to act on the form, code or protocol of the content for
purposes of transmission, conveyance or routing without regard to whether such services
are referred to as voice over internet protocol (VoIP) services or are classified by the
Federal Communications Commission as enhanced or value added, and includes video
and /or data services that is functionally integrated with "telecommunication services."
"Telecommunications services" include, but are not limited to the following services,
regardless of the manner or basis on which such services are calculated or billed:
ancillary telecommunication services; intrastate, interstate, and international
telecommunication services; mobile telecommunications service; prepaid
telecommunication service; post -paid telecommunication service; private
telecommunication service; paging service; 800 service (or any other toll -free numbers
designated by the Federal Communications Commission); 900 service (or any other
similar numbers designated by the Federal Communications Commission for services
whereby subscribers who call in to pre- recorded or live service).
(u) "VoIP (Voice Over Internet Protocol)" means the digital process of
making and receiving real -time voice transmissions over any Internet Protocol network.
(v) "800 Service" means a "telecommunications service" that allows a caller
to dial a toll -free number without incurring a charge for the call. The service is typically
marketed under the name "800," "855," "866," "877," and "888" toll -free calling, and
any subsequent numbers designated by the Federal Communications Commission.
(w) "900 Service" means an inbound toll "telecommunications service"
purchased by a subscriber that allows the subscriber's customers to call in to the
subscriber's prerecorded announcement or live service. "900 service" does not include
the charge for: collection services provided by the seller of the "telecommunications
services" to the subscriber, or service or product sold by the subscriber to the subscriber's
customer. The service is typically marketed under the name "900" service, and any
subsequent numbers designated by the Federal Communications Commission.
6182. Constitutional, statutory, and other exemptions.
(a) Nothing in this Chapter shall be construed as imposing a tax upon any person or
service when the imposition of such tax upon such person or service would be in
violation of a Federal or State statute, the Constitution of the United States or the
Constitution of the State.
(b) Any service user that is exempt from the tax imposed by this Chapter pursuant to
- subsection (a) of this Section shall file an application with the Tax Administrator for an
exemption; provided, however, this requirement shall not apply to a service user that is a
State or Federal agency or subdivision with a commonly recognized name for such
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service. Said application shall be made upon a form approved by the Tax Administrator
and shall state those facts, declared under penalty of perjury, which qualify the applicant
for an exemption, and shall include the names of all service suppliers serving that service
user. If deemed exempt by the Tax Administrator, such service user shall give the Tax
Administrator timely written notice of any change in service suppliers so that the Tax
Administrator can properly notify the new service supplier of the service user's tax
exempt status. A service user that fails to comply with this Chapter shall not be entitled to
a refund of a users' tax collected and remitted to the Tax Administrator from such service
user as a result of such noncompliance.
The decision of the Tax Administrator may be appealed pursuant to Section 6197
of this Chapter. Filing an application with the Tax Administrator and appeal to the City
Manager, or designee, pursuant to Section 6197 of this Chapter is a prerequisite to a suit
thereon.
(c) The City Council may, by resolution, establish one or more classes of persons or
one or more classes of utility service otherwise subject to payment of a tax imposed by
this Chapter and provide that such classes of persons or service shall be exempt, in whole
or in part from such tax for a specified period of time.
6183. Telecommunication Users' Tax.
(a) There is hereby imposed a tax upon every person in the City using
telecommunication services. The tax imposed by this Section shall be at the rate of four
and eight- tenths percent (4.8 %) of the charges made for such services and shall be
collected from the service user by the telecommunication services supplier or its billing
agent. There is a rebuttable presumption that telecommunication services, which are
billed to a billing or service address in the City, are used, in whole or in part, within the
City's boundaries, and such services are subject to taxation under this Section. There is
also a rebuttable presumption that prepaid telecommunication services sold within the
city are used, in whole or in part, within the City and are therefore subject to taxation
under this Section. If the billing address of the service user is different from the service
address, the service address of the service user shall be used for purposes of imposing the
tax. As used in this Section, the term "charges" shall include the value of any other
services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the telecommunication services.
(b) "Mobile telecommunications service" shall be sourced in accordance with the
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S. C.
Section 124). The Tax Administrator may issue and disseminate to telecommunication
service suppliers, which are subject to the tax collection requirements of this Chapter,
sourcing rules for the taxation of other telecommunication services, including but not
limited to post -paid telecommunication services, prepaid telecommunication services,
VoIP, and private communication services, provided that such rules are based upon
custom and common practice that further administrative efficiency and minimize multi
jurisdictional taxation (e.g., Streamlined Sales and Use Tax Agreement).
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(c) The Tax Administrator may issue and disseminate to telecommunication service
suppliers, which are subject to the tax collection requirements of this Chapter, an
administrative ruling identifying those telecommunication services, or charges therefore,
that are subject to or not subject to the tax of subsection (a) above.
(d) As used in this Section, the term "telecommunication services" shall include, but
is not limited to, charges for: connection, reconnection, termination, movement, or
change of telecommunication services; late payment fees; detailed billing; central office
and custom calling features (including but not limited to call waiting, call forwarding,
caller identification and three -way calling); voice mail and other messaging services;
directory assistance; access and line charges; universal service charges; regulatory or
administrative fees, charges or surcharges; cost recovery charges or surcharges for
programs imposed by state or federal law; local number portability charges; and text and
instant messaging. "Telecommunication services" shall not include digital downloads that
are not "ancillary telecommunication services," such as music, ringtones, games, and
similar digital products.
(e) To prevent actual multi jurisdictional taxation of telecommunication services
subject to tax under this Section, any service user, upon proof to the Tax Administrator
that the service user has previously paid the same tax in another state or city on such
telecommunication services, shall be allowed a credit against the tax imposed to the
extent of the amount of such tax legally imposed in such other state or city; provided,
however, the amount of credit shall not exceed the tax owed to the City under this
Section.
(g) The tax on telecommunication services imposed by this Section shall be collected
from the service user by the service supplier. The amount of tax collected in one month
shall be remitted to the Tax Administrator, and must be received by the Tax
Administrator on or before the twentieth (20th) day of the following month.
6184. Electricity Users' Tax.
(a) There is hereby imposed a tax upon every person using electricity in the City. The tax
imposed by this Section shall be at the rate of five percent (5 %) of the charges made for
such electricity, and for any supplemental services or other associated activities directly
related to and /or necessary for the provision of electricity to the service user, which are
provided by a service supplier or non - utility service supplier to a service user. The tax
shall be collected from the service user by the service supplier or non - utility service
supplier, or its billing agent.
(b) As used in this Section, the term "charges" shall apply to all services, components and
items that are: i) necessary for or common to the receipt, use or enjoyment of electric
service; or, ii) currently are or historically have been included in a single or bundled rate
for electric service by a local distribution company to a class of retail customers. The
term "charges" shall include, but is not limited to, the following charges:
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(1) energy charges;
(2) distribution or transmission charges;
(3) metering charges;
(4) stand -by, reserves, firming, ramping, voltage support, regulation, emergency,
or other similar charges for supplemental services to self - generation service users;
(5) customer charges, late charges, service establishment or reestablishment
charges, demand charges, fuel or other cost adjustments, power exchange charges,
independent system operator (ISO) charges, stranded investment or competitive
transition charges (CTC), public purpose program charges, nuclear
decommissioning charges, trust transfer amounts (bond financing charges),
franchise fees, franchise surcharges, annual and monthly charges, and other
charges, fees or surcharges which are necessary for or common to the receipt, use
or enjoyment of electric service; and,
(6) charges, fees, or surcharges for electricity services or programs which are
mandated by the California Public Utilities Commission or the Federal Energy
Regulatory Commission, or by any state or federal law, whether or not such
charges, fees, or surcharges appear on a bundled or line item basis on the
customer billing.
(c) As used in this Section, the term "charges" shall include the value of any other
services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the electricity or services related to the provision of such
electricity.
(d) The Tax Administrator, from time to time, may survey the electric service suppliers
to identify the various unbundled billing components of electric retail service that they
commonly provide to residential and commercial /industrial customers in the of the City,
and the charges therefor, including those items that are mandated by state or federal
regulatory agencies as a condition of providing such electric service. The Tax
Administrator, thereafter, may issue and disseminate to such electric service suppliers an
administrative ruling identifying those components and items which are: i) necessary for
or common to the receipt, use or enjoyment of electric service; or, ii) currently are or
historically have been included in a single or bundled rate for electric service by a local
distribution company to a class of retail customers. Charges for such components and
items shall be subject to the tax of subsection (a) above.
(e) As used in this Section, the term "using electricity" shall not include the mere
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale.
(f) The tax on electricity provided by self - production or by a non - utility service supplier
not under the jurisdiction of this Chapter 1D shall be collected and remitted in the manner
set forth in Section 6186 of this Chapter. All other taxes on charges for electricity
imposed by this Section shall be collected from the service user by the electric service
supplier or its billing agent. The amount of tax collected in one (1) month shall be
remitted to the Tax Administrator, and must be received by the Tax Administrator on or
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before the twentieth (20 day of the following month; or, at the option of the person
required to collect and /or remit the tax, such person shall remit an estimated amount of
tax measured by the tax billed in the previous month or upon the payment pattern of the
service user, which must be received by the Tax Administrator on or before the twentieth
(20 day of the following month, provided that such person shall submit an adjusted
payment or request for credit, as appropriate, within sixty (60) days following each
calendar quarter. The credit, if approved by the Tax Administrator, may be applied
against any subsequent remittance that becomes due.
6185. Gas Users' Tax.
(a) There is hereby imposed a tax upon every person using gas in the City, which is
transported and delivered through a pipeline or by mobile transport. The tax imposed by
this Section shall be at the rate of five percent (5 %) of the charges made for such gas,
including all services related to the storage, transportation and delivery of such gas. The
tax shall be collected from the service user by the service supplier or non - utility service
supplier, or its billing agent, and shall apply to all uses of gas, including but not limited
to, heating, electricity generation, and the use of gas as a component of a manufactured
product.
(b) As used in this Section, the term "charges" shall apply to all services, components and
items for gas service that are: i) necessary for or common to the receipt, use or
enjoyment of gas service; or, ii) currently are or historically have been included in a
single or bundled rate for gas service by a local distribution company to a class of retail
customers. The term "charges" shall include, but is not limited to, the following charges:
(1) the commodity charges for purchased gas, or the cost of gas owned by the
service user (including the actual costs attributed to drilling, production, lifting,
storage, gathering, trunkline, pipeline, and other operating costs associated with
the production and delivery of such gas), which is delivered through a gas
pipeline distribution system;
(2) gas transportation charges (including interstate charges to the extent not
included in commodity charges);
(3) storage charges; provided, however, that the service supplier shall not be
required to apply the tax to any charges for gas storage services when the service
supplier cannot, as a practical matter, determine the jurisdiction where such stored
gas is ultimately used; but it shall be the obligation of the service user to self -
collect the amount of tax not applied to any charge for gas storage by the service
supplier and to remit the tax to the appropriate jurisdiction;
(4) capacity or demand charges, late charges, service establishment or
reestablishment charges, transition charges, customer charges, minimum charges,
annual and monthly charges, and any other charges which are necessary for or
common to the receipt, use or enjoyment of gas service; and,
(5) charges, fees, or surcharges for gas services or programs which are mandated
by the California Public Utilities Commission or the Federal Energy Regulatory
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Commission, or by any state or federal law, whether or not such charges, fees, or
surcharges appear on a bundled or line item basis on the customer billing.
(c) As used in this Section, the term "charges" shall include the value of any other
services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the gas or services related to the delivery of such gas.
(d) The Tax Administrator, from time to time, may survey the gas service suppliers to
identify the various unbundled billing components of gas retail service that they
commonly provide to residential and commercial /industrial customers in the City, and the
charges therefor, including those items that are mandated by state or federal regulatory
agencies as a condition of providing such gas service. The Tax Administrator, thereafter,
may issue and disseminate to such gas service suppliers an administrative ruling
identifying those components and items which are: i) necessary for or common to the
receipt, use or enjoyment of gas service; or, ii) currently are or historically have been
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers. Charges for such components and items shall be subject to the
tax of subsection (a) above.
(e) There shall be excluded from the calculation of the tax imposed in this Section,
charges made for gas that is to be resold and delivered through a pipeline distribution
system.
(f) The tax on gas provided by self - production or by a non - utility service supplier not
under the jurisdiction of this Chapter 1D shall be collected and remitted in the manner set
forth in Section 6186. All other taxes on charges for gas imposed by this Section shall be
collected from the service user by the gas service supplier or its billing agent. The
amount of tax collected in one (1) month shall be remitted to the Tax Administrator, and
must be received by the Tax Administrator, on or before the twentieth (20 day of the
following month; or, at the option of the person required to collect and /or remit the tax,
such person shall remit an estimated amount of tax measured by the tax billed in the
previous month or upon the payment pattern of the service user, which must be received
by the Tax Administrator on or before the twentieth (20 day of the following month,
provided that such person shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter. The credit, if
approved by the Tax Administrator, may be applied against any subsequent remittance
that becomes due.
6186. Collection of Tax from Service Users Receiving Direct Purchase of Gas or
Electricity.
(a) Any service user subject to the tax imposed by Section 6184 or by Section 6185 of
this Chapter, which produces gas or electricity for self -use regardless of technology used
to produce such gas or electricity; which receives gas or electricity, including any related
supplemental services, directly from a non - utility service supplier not under the
jurisdiction of this Chapter; or which, for any other reason, is not having the full tax
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collected and remitted by its service supplier, a non - utility service supplier, or its billing
agent on the use of gas or electricity in the City, including any related supplemental
services, shall report said fact to the Tax Administrator and shall remit the tax due
directly to the Tax Administrator within thirty (30) days of such use, based on the charges
for, or value of, such gas or electricity, or supplemental services, as provided in
subsection (b). In lieu of paying said actual tax, the service user may, at its option, remit
to the Tax Administrator within thirty (30) days of such use an estimated amount of tax
measured by the tax billed in the previous month, or upon the payment pattern of similar
customers of the service supplier using similar amounts of gas or electricity, provided
that the service user shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter. The credit, if
approved by the Tax Administrator in writing, may be applied against any subsequent tax
bill that becomes due.
(b) The Tax Administrator may require said service user to identify its non - utility service
supplier, and otherwise provide, subject to audit: invoices; books of account; or other
satisfactory evidence documenting the quantity of gas or electricity used, including any
related supplemental services, and the cost or price thereof. If the service user is unable
to provide such satisfactory evidence, or if the administrative cost of calculating the tax
in the opinion of the Tax Administrator is excessive, the Tax Administrator may
determine the tax by applying the tax rate to the equivalent charges the service user
would have incurred if the gas or electricity used, including any related supplemental
____ services, had been provided by the service supplier that is the primary supplier of gas or
electricity within the City. Rate schedules for this purpose shall be available from the
City.
6187. Bundling Taxable Items.
If any nontaxable charges are combined with and not separately stated from taxable
service charges on the customer bill or invoice of a service supplier, the combined charge
is subject to tax unless the service supplier identifies, by reasonable and verifiable
standards, the portions of the combined charge that are nontaxable and taxable through
the service supplier's books and records kept in the regular course of business, and in
accordance with generally accepted accounting principles, and not created and
maintained for tax purposes. If the service supplier offers a combination of taxable and
non - taxable services, and the charges are separately stated, then for taxation purposes, the
values assigned the taxable and non - taxable services shall be based on its books and
records kept in the regular course of business and in accordance with generally accepted
accounting principles, and not created and maintained for tax purposes. The service
supplier has the burden of proving the proper valuation and apportionment of taxable and
non - taxable charges.
6188. Substantial Nexus/Minimum Contact.
"` For purposes of imposing a tax or establishing a duty to collect and remit a tax under this
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor
of the imposition, collection and /or remittance of the utility users' tax to the fullest extent
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permitted by State and Federal law, and as it may change from time to time by judicial
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interpretation or by statutory enactment. Any telecommunication service (including
VoIP) used by a person with a service address in the City, which service is capable of
terminating a call to another person on the general telephone network, shall be subject to
a rebuttable presumption that "substantial nexus /minimum contacts" exists for purposes
of imposing a tax, or establishing a duty to collect and remit a tax, under this Chapter. A
service supplier shall be deemed to have sufficient activity in the City for tax collection
and remittance purposes if its activities include, but are not limited to, any of the
following: maintains or has within the City, directly or through an agent or subsidiary, a
place of business of any nature; solicits business in the City by employees, independent
contractors, resellers, agents or other representatives; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advertising that is broadcast
or relayed from a transmitter within the City or distributed from a location within the
City; or advertises in newspapers or other periodicals printed and published within the
City or through materials distributed in the City by means other than the United States
mail; or if there are activities performed in the City on behalf of the service supplier that
are significantly associated with the service supplier's ability to establish and maintain a
market in the City for the provision of utility services that are subject to a tax under this
Chapter.
6189. Duty to Collect Procedures.
(a) Collection by Service Suppliers: The duty of service suppliers to collect and
remit the taxes imposed by the provisions of this Chapter shall be performed as follows:
(1) The tax shall be collected by service suppliers insofar as practicable at the
same time as, and along with, the collection of the charges made in accordance with the
regular billing practice of the service supplier. Where the amount paid by a service user
to a service supplier is less than the full amount of the charge and tax which was accrued
for the billing period, a proportionate share of both the charge and the tax shall be
deemed to have been paid. In those cases where a service user has notified the service
supplier of refusal to pay the tax imposed on said charges, Section 6193 shall apply.
(2) The duty of a service supplier to collect the tax from a service user shall
commence with the beginning of the first regular billing period applicable to the service
user where all charges normally included in such regular billing are subject to the
provisions of this Chapter. Where a service user receives more than one billing, one or
more being for different periods than another, the duty to collect shall arise separately for
each billing period.
(b) Filing Return and Payment: Each person required by this Chapter to remit a tax
shall file a return to the Tax Administrator, on forms approved by the Tax Administrator,
on or before the due date. The full amount of the tax collected shall be included with the
return and filed with the Tax Administrator. The Tax Administrator is authorized to ___
require such additional information as he or she deems necessary to determine if the tax
is being levied, collected, and remitted in accordance with this Chapter. Returns are due
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immediately upon cessation of business for any reason. Pursuant to Revenue and Tax
i
Code Section 7284.6, the Tax Administrator, and its agents, shall maintain such filing
returns as confidential information that is exempt from the disclosure provisions of the
Public Records Act.
6190. Collection Penalties - Service Suppliers.
(a) Taxes collected from a service user are delinquent if not received by the Tax
Administrator on or before the due date. Should the due date occur on a weekend or legal
holiday, the return must be received by the Tax Administrator on the first regular
working day following the weekend or legal holiday. A direct deposit, including
electronic fund transfers and other similar methods of electronically exchanging monies
between financial accounts, made by a service supplier in satisfaction of its obligations
under this Chapter shall be considered timely if the transfer is initiated on or before the
due date, and the transfer settles into the City's account on the following business day.
(b) If the person required to collect and /or remit the utility users' tax fails to collect
the tax (by failing to properly assess the tax on one or more services or charges on the
customer's billing) or fails to remit the tax collected on or before the due date, the Tax
Administrator shall attach a penalty for such delinquencies or deficiencies at the rate of
fifteen percent (15%) of the total tax that is delinquent or deficient in the remittance, and
shall pay interest at the rate of seventy -five one - hundredths percent (O.75%) per month,
or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date on
which the remittance first became delinquent, until paid.
(c) The Tax Administrator shall have the power to impose additional penalties upon
persons required to collect and remit taxes pursuant to the provisions of this Chapter for
fraud or gross negligence in reporting or remitting at the rate of fifteen percent (15 %) of
the amount of the tax collected and /or required to be remitted, or as recomputed by the
Tax Administrator.
(d) For collection purposes only, every penalty imposed and such interest that is
accrued under the provisions of this Chapter shall become a part of the tax herein
required to be paid.
(e) Notwithstanding the foregoing, the Tax Administrator may, in his or her
discretion, modify the due dates of this Chapter to be consistent with any uniform
standards or procedures that are mutually agreed upon by other public agencies imposing
a utility users' tax, or otherwise legally established, to create a central payment location
or mechanism.
6191. Actions to Collect.
Any tax required to be paid by a service user under the provisions of this Chapter shall be
deemed a debt owed by the service user to the City. Any such tax collected from a service
user which has not been remitted to the Tax Administrator shall be deemed a debt owed
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to the City by the person required to collect and remit and shall no longer be a debt of the ___,
service user. Any person owing money to the City under the provisions of this Chapter
shall be liable to an action brought in the name of the City for the recovery of such
amount, including penalties and interest as provided for in this Chapter, along with any
collection costs incurred by the City as a result of the person's noncompliance with this
Chapter, including, but not limited to, reasonable attorneys' fees. Any tax required to be
collected by a service supplier or owed by a service user is an unsecured priority excise
tax obligation under 11 U S. CA. Section 507(a)(8)(C). Service suppliers who seek to
collect charges for service in bankruptcy proceedings shall also include in any such claim
the amount of taxes due the City for those services, unless the Tax Administrator
determines that such duty is in conflict with any federal or state law, rule, or regulation or
that such action would be administratively impractical.
6192. Deficiency Determination and Assessment -Tax Application Errors.
(a) The Tax Administrator shall make a deficiency determination if he or she
determines that any person required to pay or collect taxes pursuant to the provisions of
this Chapter has failed to pay, collect, and /or remit the proper amount of tax by
improperly or failing to apply the tax to one or more taxable services or charges. Nothing
herein shall require that the Tax Administrator institute proceedings under this Section
6192 if, in the opinion of the Tax Administrator, the cost of collection or enforcement
likely outweighs the tax benefit.
(b) The Tax Administrator shall mail a notice of such deficiency determination to the
person required to pay or remit the tax, which notice shall refer briefly to the amount of
the taxes owed, plus interest at the rate of seventy -five one - hundredths percent (0.75 %)
per month, or any fraction thereof, on the amount of the tax from the date on which the
tax should have been received by the City. Within fourteen (14) calendar days after the
date of service of such notice, the person may request in writing to the Tax Administrator
for a hearing on the matter.
(c) If the person fails to request a hearing within the prescribed time period, the
amount of the deficiency determination shall become a final assessment, and shall
immediately be due and owing to the City. If the person requests a hearing, the Tax
Administrator shall cause the matter to be set for hearing, which shall be scheduled
within thirty (30) days after receipt of the written request for hearing. Notice of the time
and place of the hearing shall be mailed by the Tax Administrator to such person at least
ten (10) calendar days prior to the hearing, and, if the Tax Administrator desires said
person to produce specific records at such hearing, such notice may designate the records
requested to be produced.
(d) At the time fixed for the hearing, the Tax Administrator shall hear all relevant
testimony and evidence, including that of any other interested parties. At the discretion of
the Tax Administrator, the hearing may be continued from time to time for the purpose of
allowing the presentation of additional evidence. Within a reasonable time following the
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non -
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assessment), thereafter, by confirming, modifying or rejecting the original deficiency
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determination, and shall mail a copy of such final assessment to person owing the tax.
The decision of the Tax Administrator may be appealed pursuant to Section 6197 of this
Chapter. Filing an application with the Tax Administrator and appeal to the City
Manager, or designee, pursuant to Section 6197 of this Chapter is a prerequisite to a suit
thereon.
(e) Payment of the final assessment shall become delinquent if not received by the
Tax Administrator on or before the thirtieth (30th) day following the date of receipt of the
notice of final assessment. The penalty for delinquency shall be fifteen percent (15 %) on
the total amount of the assessment, along with interest at the rate of seventy -five one -
hundredths percent (0.75 %) per month, or any fraction thereof, on the amount of the tax,
exclusive of penalties, from the date of delinquency, until paid. The applicable statute of
limitations regarding a claim by the City seeking payment of a tax assessed under this
Chapter shall commence from the date of delinquency as provided in this subsection (e).
(f) All notices under this Chapter may be sent by regular mail, postage prepaid, and
shall be deemed received on the third calendar day following the date of mailing, as
established by a proof of mailing.
6193. Administrative Remedy- Non - Paying Service Users.
- (a) Whenever the Tax Administrator determines that a service user has deliberately
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whenever the Tax Administrator deems it in the best
interest of the City, he or she may relieve such person of the obligation to collect the
taxes due under this Chapter from certain named service users for specific billing periods.
To the extent the service user has failed to pay the amount of tax owed for a period of
two (2) or more billing periods, the service supplier shall be relieved of the obligation to
collect taxes due. The service supplier shall provide the City with the names and
addresses of such service users and the amounts of taxes owed under the provisions of
this Chapter. Nothing herein shall require that the Tax Administrator institute
proceedings under this Section 6193 if, in the opinion of the Tax Administrator, the cost
of collection or enforcement likely outweighs the tax benefit.
(b) In addition to the tax owed, the service user shall pay a delinquency penalty at the
rate of fifteen percent (15 %) of the total tax that is owed, and shall pay interest at the rate
of seventy -five one - hundredths percent (0.75 %) per month, or any fraction thereof, on the
amount of the tax, exclusive of penalties, from the due date, until paid.
(c) The Tax Administrator shall notify the non - paying service user that the Tax
Administrator has assumed the responsibility to collect the taxes due for the stated
periods and demand payment of such taxes, including penalties and interest. The notice
shall be served on the service user by personal delivery or by deposit of the notice in the
United States mail, postage prepaid, addressed to the service user at the address to which
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billing was made by the person required to collect the tax; or, should the service user
have a change of address, to his or her last known address.
(d) If the service user fails to remit the tax to the Tax Administrator within thirty (30)
days from the date of the service of the notice upon him or her, the Tax Administrator
may impose an additional penalty of fifteen percent (15 %) of the amount of the total tax
that is owed.
6194. Additional Powers and Duties of the Tax Administrator.
(a) The Tax Administrator shall have the power and duty, and is hereby directed, to
enforce each and all of the provisions of this Chapter.
(b) The Tax Administrator may adopt administrative rules and regulations consistent
with provisions of this Chapter for the purpose of interpreting, clarifying, carrying out
and enforcing the payment, collection and remittance of the taxes herein imposed. The
administrative ruling shall not impose a new tax, revise an existing tax methodology as
stated in this Chapter, or increase an existing tax, except as allowed by California
Government Code Section 53750(h)(2). A copy of such administrative rules and
regulations shall be on file in the Tax Administrator's office. To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected in
full for any period of time from any particular service supplier or service user, that
determination shall be considered an exercise of the Tax Administrator's discretion to
settle disputes and shall not constitute a change in taxing methodology for purposes of
Government Code Section 53 750 or otherwise. The Tax Administrator is not authorized
to amend the City's methodology for purposes of Government Code Section 53 750 and
the City does not waive or abrogate its ability to impose the utility users' tax in full as a
result of promulgating administrative rulings or entering into agreements.
(c) Upon a proper showing of good cause, the Tax Administrator may make
administrative agreements, with appropriate conditions, to vary from the strict
requirements of this Chapter and thereby: (1) conform to the billing procedures of a
particular service supplier so long as said agreements result in the collection of the tax in
conformance with the general purpose and scope of this Chapter; or, (2) to'avoid a
hardship where the administrative costs of collection and remittance greatly outweigh the
tax benefit. A copy of each such agreement shall be on file in the Tax Administrator's
office, and are voidable by the Tax Administrator or the City at any time.
(d) The Tax Administrator may conduct an audit, to ensure proper compliance with
the requirements of this Chapter, of any person required to collect and /or remit a tax
pursuant to this Chapter. The Tax Administrator shall notify said person of the initiation
of an audit in writing. In the absence of fraud or other intentional misconduct, the audit
period of review shall not exceed a period of three (3) years next preceding the date of
receipt of the written notice by said person from the Tax Administrator. Upon completion —.
of the audit, the Tax Administrator may make a deficiency determination pursuant to
Section 6192 of this Chapter for all taxes (and applicable penalties and interest) owed and
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not paid, as evidenced by information provided by such person to the Tax Administrator.
If said person is unable or unwilling to provide sufficient records to enable the Tax
Administrator to verify compliance with this Chapter, the Tax Administrator is
authorized to make a reasonable estimate of the deficiency. Said reasonable estimate shall
be entitled to a rebuttable presumption of correctness.
(e) Upon receipt of a written request of a taxpayer, and for good cause, the Tax
Administrator may extend the time for filing any statement required pursuant to this
Chapter for a period of not to exceed forty -five (45) days, provided that the time for filing
the required statement has not already passed when the request is received. No penalty
for delinquent payment shall accrue by reason of such extension. Interest shall accrue
during said extension at the rate of seventy -five one - hundredths percent (0.75 %) per
month, prorated for any portion thereof.
(0 The Tax Administrator shall determine the eligibility of any person who asserts a
right to exemption from, or a refund of, the tax imposed by this Chapter.
(g) Notwithstanding any provision in this Chapter to the contrary, the Tax
Administrator may waive any penalty or interest imposed upon a person required to
collect and /or remit for failure to collect the tax imposed by this Chapter if the non -
collection occurred in good faith. In determining whether the non - collection was in good
faith, the Tax Administrator shall take into consideration the uniqueness of the product or
.—' service, industry practice or other precedence. The Tax Administrator may also
participate with other utility users' tax public agencies in conducting coordinated
compliance reviews with the goal of achieving administrative efficiency and uniform tax
application determinations, where possible. To encourage full disclosure and on -going
cooperation on annual compliance reviews, the Tax Administrator, and its agents, may
enter into agreements with the tax - collecting service providers and grant prospective only
effect on any changes regarding the taxation of services or charges that were previously
deemed by the service provider, in good faith and without gross negligence, to be non-
taxable. In determining whether the non - collection was in good faith and without gross
negligence, the Tax Administrator shall take into consideration the uniqueness of the
product or service, industry practice or other precedence.
6195. Records.
(a) It shall be the duty of every person required to collect and /or remit to the City any
tax imposed by this Chapter to keep and preserve, for a period of at least three (3) years,
all records as may be necessary to determine the amount of such tax as he /she may have
been liable for the collection of and remittance to the Tax Administrator, which records
the Tax Administrator shall have the right to inspect at a reasonable time.
(b) The City may issue an administrative subpoena to compel a person to deliver, to
the Tax Administrator, copies of all records deemed necessary by the Tax Administrator
to establish compliance with this Chapter, including the delivery of records in a common
electronic format on readily available media if such records are kept electronically by the
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person in the usual and ordinary course of business. As an alternative to delivering the
subpoenaed records to the Tax Administrator on or before the due date provided in the
administrative subpoena, such person may provide access to such records outside the City
on or before the due date, provided that such person shall reimburse the City for all
reasonable travel expenses incurred by the City to inspect those records, including travel,
lodging, meals, and other similar expenses, but excluding the normal salary or hourly
wages of those persons designated by the City to conduct the inspection.
(c) The Tax Administrator is authorized to execute a non - disclosure agreement
approved by the City Attorney to protect the confidentiality of customer information
pursuant to California Revenue and Tax Code Sections 7284.6 and 7284.7.
(d) If a service supplier uses a billing agent or billing aggregator to bill, collect,
and /or remit the tax, the service supplier shall: 1) provide to the Tax Administrator the
name, address and telephone number of each billing agent and billing aggregator
currently authorized by the service supplier to bill, collect, and /or remit the tax to the
City; and, 2) upon request of the Tax Administrator, deliver, or effect the delivery of, any
information or records in the possession of such billing agent or billing aggregator that, in
the opinion of the Tax Administrator, is necessary to verify the proper application,
calculation, collection and /or remittance of such tax to the City.
(e) If any person subject to record - keeping under this Chapter unreasonably denies
the Tax Administrator access to such records, or fails to produce the information
requested in an administrative subpoena within the time specified, then the Tax
Administrator may impose a penalty of Five Hundred Dollars ($500.00) on such person
for each day following: 1) the initial date that the person refuses to provide such access;
or, 2) the due date for production of records as set forth in the administrative subpoena.
This penalty shall be in addition to any other penalty imposed under this Chapter.
6196. Refunds
Whenever the amount of any tax has been overpaid or paid more than once or has been
erroneously or illegally collected or received by the Tax Administrator under this Chapter
from a person or service supplier, it may be refunded as provided in this Section as
follows:
(a) Written Claim for Refund: The Tax Administrator may refund any tax that has
been overpaid or paid more than once or has been erroneously or illegally collected or
received by the Tax Administrator under this Chapter from a person or service supplier,
provided that no refund shall be paid under the provisions of this Section unless the
claimant or his or her guardian, conservator, executor, or administrator has submitted a
written claim to the Tax Administrator within one year of the overpayment or erroneous
or illegal collection of said tax. Such claim must clearly establish claimant's right to the
refund by written records showing entitlement thereto. Nothing herein shall permit the
filing of a claim on behalf of a class or group of taxpayers unless each member of the
class has submitted a written claim under penalty of perjury as provided by this Section.
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(b) Compliance with Claims Act: The filing of a written claim pursuant to
Government Code Section 935 is a prerequisite to any suit thereon. Any action brought
against the City pursuant to this Chapter shall be subject to the provisions of Government
Code Sections 945.6 and 946. The Tax Administrator shall act upon the refund claim
within the time period set forth in Government Code Section 912.4. If the Tax
Administrator fails or refuses to act on a refund claim within the time prescribed by
Government Section 912.4, the claim shall be deemed to have been rejected by the Tax
Administrator on the last day of the period within which the Tax Administrator was
required to act upon the claim as provided in Government Code Section 912.4. The Tax
Administrator shall give notice of the action in a form which substantially complies with
that set forth in Government Code Section 913.
(c) Refunds to Service Suppliers: Notwithstanding the notice provisions of
subsection (a) of this Section, the Tax Administrator may, at his or her discretion, give
written permission to a service supplier, who has collected and remitted any amount of
tax in excess of the amount of tax imposed by this Chapter, to claim credit for such
overpayment against the amount of tax which is due the City upon a subsequent monthly
return(s) to the Tax Administrator, provided that, prior to taking such credit by the
service supplier: 1) such credit is claimed in a return dated no later than one year from the
date of overpayment or erroneous collection of said tax; 2) the Tax Administrator is
satisfied that the underlying basis and amount of such credit has been reasonably
established; and, 3) in the case of an overpayment by a service user to the service supplier
that has been remitted to the City, the Tax Administrator has received proof, to his or her
satisfaction, that the overpayment has been refunded by the service supplier to the service
user in an amount equal to the requested credit.
6197. Appeals.
(a) The provisions of this Section apply to any decision (other than a decision relating
to a refund pursuant to Section 6196 of this Chapter), deficiency determination,
assessment, or administrative ruling of the Tax Administrator. Any person aggrieved by
any decision (other than a decision relating to a refund pursuant to Section 6196 of this
Chapter), deficiency determination, assessment, or administrative ruling of the Tax
Administrator, shall be required to comply with the appeals procedure of this Section.
Compliance with this Section shall be a prerequisite to a suit thereon. [See Government
Code Section 935(b)]. Nothing herein shall permit the filing of a claim or action on
behalf of a class or group of taxpayers.
(b) If any person is aggrieved by any decision (other than a decision relating to a
refund pursuant to Section 6196 of this Chapter), deficiency determination, assessment,
or administrative ruling of the Tax Administrator; he or she may appeal to the City
Manager, or designee, by filing a notice of appeal with the City Clerk within fourteen
(14) days of the date of the decision, deficiency determination, assessment, or
administrative ruling of the Tax Administrator which aggrieved the service user or
service supplier.
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(c) The matter shall be scheduled for hearing before an independent hearing officer
selected by the City Manager, or designee, no more than thirty (30) days from the receipt
of the appeal. The appellant shall be served with notice of the time and place of the
hearing, as well as any relevant materials, at least five (5) calendar days prior to the
hearing. The hearing may be continued from time to time upon mutual consent. At the
time of the hearing, the appealing party, the Tax Administrator, and any other interested
person may present such relevant evidence as he or she may have relating to the
determination from which the appeal is taken.
(d) Based upon the submission of such evidence and the review of the City's files, the
hearing officer shall issue a written notice and order upholding, modifying or reversing
the determination from which the appeal is taken. The notice shall be given within
fourteen (14) days after the conclusion of the hearing and shall state the reasons for the
decision. The notice shall specify that the decision is final and that any petition for
judicial review shall be filed within ninety (90) days from the date of the decision in
accordance with Code of Civil Procedure Section 1094.6.
(e) All notices under this Section may be sent by regular mail, postage prepaid, and
shall be deemed received on the third calendar day following the date of mailing, as
established by a proof of mailing.
6198. No Injunction/Writ of Mandate.
i
No injunction or writ of mandate or other legal or equitable process shall issue in any
suit, action, or proceeding in any court against this City or against any officer of the City
to prevent or enjoin the collection under this Chapter of any tax or any amount of tax
required to be collected and /or remitted.
6199. Notice of Changes to Ordinance.
If a tax under this Chapter is added repealed, increased, reduced, or the tax base is
changed, the Tax Administrator shall follow the notice requirements of California Public
Utilities Code Section 799.
6200. Effect of State and Federal Reference /Authorization.
Unless specifically provided otherwise, any reference to a State or Federal statute in this
Chapter shall mean such statute as it may be amended from time to time, provided that
such reference to a statute herein shall not include any subsequent amendment thereto, or
to any subsequent change of interpretation thereto by a State or Federal agency or court
of law with the duty to interpret such law, to the extent that such amendment or change of
interpretation would require voter approval under California law, or to the extent that
such change would result in a tax decrease (as a result of excluding all or a part of a
utility service, or charge therefor, from taxation). Only to the extent voter approval would ,___.
otherwise be required or a tax decrease would result, the prior version of the statute (or
interpretation) shall remain applicable; for any application or situation that would not
20
require voter approval or result in a decrease of a tax, provisions of the amended statute
(or new interpretation) shall be applicable to the maximum possible extent.
To the extent that the City's authorization to collect or impose any tax imposed under this
Chapter is expanded or limited as a result of changes in State or Federal law, no
amendment or modification of this Chapter shall be required to conform the tax to those
changes, and the tax shall be imposed and collected to the full extent of the authorization
up to the full amount of the tax imposed under this Chapter.
6201. No Increase in Tax Percentage or Change in Methodology Without Voter
Approval; Amendment or Repeal.
This Article VI, Chapter 1D of the Downey Municipal Code may be repealed or amended
by the City Council without a vote of the People. However, as required by Chapter XIIIC
of the California Constitution, voter approval is required for any amendment provision
that would increase the rate of any tax levied pursuant to this Ordinance. The People of
the City of Downey affirm that the following actions shall not constitute an increase of
the rate of a tax:
(1) The restoration of the rate of the tax to a rate that is no higher than that set by this
Ordinance, if the City Council has acted to reduce the rate of the tax;
(2) An action that interprets or clarifies the methodology of the tax, or any definition
applicable to the tax, so long as such interpretation or clarification (even if contrary to
some prior interpretation or clarification) is not inconsistent with the language of this
Ordinance;
(3) The establishment a class of persons that is exempt or excepted from the tax or the
discontinuation of any such exemption or exception (other than the discontinuation of an
exemption or exception specifically set forth in this Ordinance); and
(4) The collection of the tax imposed by this ordinance, even if the City had, for some
period of time, failed to collect the tax.
6202. Independent Audit of Tax Collection, Exemption, Remittance, and
Expenditure.
The City shall annually verify that the taxes owed under this Chapter have been properly
applied, exempted, collected, and remitted in accordance with this Chapter, and properly
expended according to applicable municipal law. The annual verification shall be
performed by a qualified independent third party and the review shall employ reasonable,
cost - effective steps to assure compliance, including the use of sampling audits. The
verification shall not be required of tax remitters where the cost of the verification may
exceed the tax revenues to be reviewed.
6203. Remedies Cumulative.
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All remedies and penalties prescribed by this Chapter or which are available under any
other provision of law or equity, including but not limited to the California False Claims
Act (Government Code Section 12650 et seq.) and the California Unfair Practices Act
(Business and Professions Code Section 17070 et seq.), are cumulative. The use of one
or more remedies by the City shall not bar the use of any other remedy for the purpose of
enforcing the provisions of this Chapter.
6204. Interaction With Prior Tax.
(a). Collection of Tax by Service Providers. Service providers shall begin to collect the
tax imposed by this amended Chapter 1D as soon as feasible after the effective date of the
Chapter, but in no event later than permitted by Section 799 of the California Public
Utilities Code.
(b). Satisfaction of Tax Obligation by Service Users. Prior to April 1, 2013, any person
who pays the tax levied pursuant to Article VI, Chapter 1D of this Code, as it existed
prior to its amendment as provided herein, with respect to any charge for a service shall
be deemed to have satisfied his or her obligation to pay the tax levied pursuant to Article
VI, Chapter 1D as amended herein, with respect to that charge. The intent of this
paragraph is to prevent the imposition of multiple taxes upon a single utility charge
during the transition period from the prior Utility Users' Tax ordinance to the amended
Utility Users' Tax ordinance (which transition period ends April 1, 2013) and to permit
service providers or other persons with an obligation to remit the tax hereunder, during
that transition period, to satisfy their collection obligations by collecting either tax.
(c) In the event that a final court order should determine that the election enacting this
Article VI, Chapter 1D (as amended herein) is invalid for whatever reason, or that any tax
imposed under this Article VI, Chapter 1D (as amended herein) is invalid in whole or in
part, then the taxes imposed under Article VI, Chapter 1D of this Code, as it existed prior
to its amendment as provided herein, shall automatically continue to apply with respect to
any service for which the tax levied pursuant to this Chapter 1D has been determined to be
invalid. Such automatic continuation shall be effective beginning as of the first date of
service (or billing date) for which the tax imposed by this Chapter is not valid. However,
in the event of an invalidation, any tax (other than a tax that is ordered refunded by the
court or is otherwise refunded by the City) paid by a person with respect to a service and
calculated pursuant to this Article VI, Chapter 1D (as amended herein) shall be deemed to
satisfy the tax imposed under Article VI, Chapter 1D, as it existed prior to its amendment
as provided herein, on that service, so long as the tax is paid with respect to a service
provided no later than six months subsequent to the date on which the final court order is
published.
SECTION 2. Effective Date. This Chapter, if approved by the electorate of the
City of Downey at the General Municipal Election of November 6, 2012 shall become
effective immediately upon the declaration of the results of that election by the City
Council of the City of Downey. The City Clerk shall certify to the adoption of this
Ordinance and cause the same to be published and posted in the manner required by law.
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SECTION 3. Severability. If any section, subsection, sentence, clause, phrase, or
portion of this Ordinance is for any reason held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining portions of this Ordinance shall
nonetheless remain in full force and effect. The People hereby declares that they
would have adopted each section, subsection, sentence, clause, phrase, or portion of
this Ordinance, irrespective of the fact that any one or more sections, subsections,
sentences, clauses, phrases, or portions of this Ordinance be declared invalid or
unenforceable.
SECTION 4. Ratification of Prior Tax. The People of the City of Downey hereby
ratify and approve the past collection of the Utility Users' Tax, Article VI, Chapter
1D of the Downey Municipal Code, as it existed prior to the effective date of this
Ordinance.
SECTION 5. Execution. The Mayor is hereby authorized to attest to the adoption of
the Ordinance by the voters of the City by signing where indicated below.
I hereby certify that the foregoing Ordinance No. was
PASSED, APPROVED and ADOPTED by the People of the City of Downey,
California voting on the 6th day of November, 2012.
Mayor
ATTEST:
City Clerk
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