2013-35 RESOLUTION NO. 2013-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE, CALIFORNIA, SUBMITTING TO THE VOTERS A QUESTION
WHETHER THE CITY SHALL ENACT A UTILITY USERS' TAX
WHEREAS, the City of Grand Terrace has sustained significant financial losses
as a result of the state-wide dissolution of redevelopment agencies effective February 1,
2012; and
WHEREAS, the loss of redevelopment funds has resulted in a significant
projected General Fund budgetary deficit for Fiscal Year 2013-14 and the ensuing
years; and
WHEREAS, in response to the projected General Fund budgetary deficit,
significant expenditure reductions were approved for Fiscal Year 2013-14 including the
reduction of two sheriff's deputies, the closure of Rollins and Pico Parks, the reduction
of funding for legal and financial contract services, the elimination of funding for the
Senior..Center, the reduction of funding for emergency services, and a significant
reduction in City Administration personnel-related expense to be implemented through
some combination of outsourcing, wage/benefit reductions, work schedule reductions,
and/or workforce reductions (lay-offs), subject to the meet-and-confer process; and
I
WHEREAS, in order to prevent the expenditure reductions enumerated above,
additional revenues are needed through the enactment of a local tax measure; and .
WHEREAS, on June 25, 2013, the City Council adopted Resolution 2013-28,
declaring a Fiscal Emergency, by unanimous vote of the City Council Members; and
WHEREAS, pursuant to subdivision (b) of Section 2 of Article XIIIC of the
California Constitution and Section 53720 et. Seq. of the California Government Code
(the "Government Code"), the City Council is authorized to impose a general tax upon
submission of such general tax to the voters of the City and approval by a majority of
the voters voting on the issue; and
WHEREAS, the City Council desires to submit to the voters of the City, pursuant
to this Resolution, a ballot measure to levy a general Utility Users' Tax on utilities in the
City, as described in the attached Ordinance, which is incorporated in this Resolution as
Exhibit A, the proceeds of which Utility Users' Tax will be deposited in the City's General
Fund for general governmental purposes; and
WHEREAS, the City Council desires to order a special municipal election of the
City to be held on November 5, 2013, and to submit a ballot measure to levy the Utility
Users' Tax to the voters of the City at such special municipal election; and
r ,
WHEREAS, the City Council hereby authorizes -the City Clerk, as the Elections
r Official, to coordinate such a special municipal election with the County of San
Bernardino Registrar of Voters.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF .GRAND
TERRACE, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Pursuant to Elections Code 9222, the. City Council- hereby
authorizes the following question to be submitted to the voters at the special municipal
election to be held on November 5, 2013:
Measure Utility Users' Tax Response Vote
To ensure Grand Terrace has the funds necessary to
-remain an independent city and able to, provide
essential services to residents including rapid response. Yes
to-9-1-1 police emergencies, maintenance/repair of local
streets, adequate police services, and maintaining parks
and public facilities, shall the City of Grand Terrace
establish a utility users' tax of 5% for six_years only with No
independent citizen oversight, all money staying local,
and an.exemption for low-income seniors?
SECTION 2. The complete text of the Ordinance, which includes a description of
the. Utility Users' Tax ("Tax"), the rate of the Tax, the. method of.its collection, and
exemptions from the Tax, and which shall become effective upon approval of a majority
of the votes. cast by the voters voting upon the ballot measure, is set:forth in Exhibit A,
attached 'hereto and 'hereby. incorporated herein. Anyone requesting a copy of the
document will be provided one at no cost.
SECTION 3. The ballot measure shall not take.effect, .and the Utility Users' Tax
shall not be levied, unless and until the ballot measure receives the approval of a
majority of the votes-cast by the voters,of.the City voting upon such ballot measure at
the November 5, 2013 special municipal election.
SECTION 4. If the ballot measure is so approved, the attached Ordinance shall
be codified as Chapter 3.10 of the City of Grand Terrace Municipal Code.
SECTION 5. The City Clerk, as the Elections Official, is hereby directed to file
certified copies of this Resolution with the County of San Bernardino Board of
Supervisors and the County Clerk and to take all other actions necessary to carry out
this Resolution.
r SECTION 6. The funds necessary to pay for the cost of the Special. Municipal
Election have been appropriated in the City of Grand Terrace Adopted Budget for Fiscal
\J Year 2013-1.4.
SECTION 7. In all particulars not recited in this Resolution., the Special Municipal
Election shall be held and conducted as provided by law for holding municipal elections.
BE IT .FURTHER RESOLVED that this Resolution shall take effect immediately
upon the date of its adoption. -
PASSED, APPROVED AND ADOPTED by the City Council of Grand Terrace at a,
regular meeting held on the 23rd.day of July, 2013.
16a"x
Mayor of the i y of Grand Terrace
and the City. Council thereof
ATTEST:
rwz 1A
City Clerk the City. of Grand rrace
I, TRACEY R:.MARTINEZ, CITY CLERK of the City of Grand Terrace, California.,
do hereby certify that the foregoing Resolution was adopted at a regular.meeting of the
City Council of the.City of Grand Terrace held on the 23rd day of July, 2013, by the
following vote:
AYES: . councilmembers McNaboe,. Mitchell and Robles;' Mayor Pro Tem Sandovalaand
Mayor Stanckiewitz
NOES: None
ABSENT: None.
ABSTAIN: None ;
Tracey R. larti ez,. City Cle
APPROVED AS TO FORM:
{
City Attorney
Exhibit A
MEASURE
AN ORDINANCE OF THE PEOPLE OF THE CITY OF
GRAND TERRACE, CALIFORNIA APPROVING A UTILITY
USERS' TAX
THE PEOPLE OF THE CITY OF GRAND TERRACE, CALIFORNIA DO
ORDAIN AS FOLLOWS:
Title 3, Chapter 3.10 of the Grand Terrace Municipal Code is hereby adopted, and it shall
read as follows:
Chapter 3.10
Utility Users' Tax
3.10.010 Short Title
3.10.020 Definitions
3.10.030 Constitutional, Statutory, and Other Exemptions
3.10.040 Telecommunication Users' Tax
3.10.050 Electricity Users' Tax
3.10.060 Gas Users' Tax
3.10.070 Collection of Tax from Service Users Receiving Direct Purchase of Gas or
Electricity
3.10.080 Video Users' Tax
3.10.090 Water Users' Tax
3.10.100 Sewer Users' Tax
3.10.110 Refuse Users' Tax
3.10.120 Maximum Tax
3.10.130 Senior Low-Income Exemption
3.10.140 Bundling Taxable Items with Nontaxable Items
3.10.150 Substantial Nexus/Minimum Contacts
3.10.160 Duty to Collect—Procedures
3.10.170 Collection Penalties—Service Suppliers
3.10.180 Actions to Collect
3.10.190 Deficiency Determination and Assessment—Tax Application Errors
3.10.200 Administrative Remedy—Nonpaying Service Users
3.10.210 Additional Powers and Duties of the Tax Administrator
3.10.220 Records
3.10.230 Refunds
3.10.240 Appeals
3.10.250 No Injunction/Writ of Mandate
3.10.260 Notice of Change to Ordinance
3.10.270 Effect of State and Federal Reference/Authorization
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Exhibit A
3.10.280 No Increase in Tax Percentage or Change in Methodology without Voter
Approval
3.10.290 Independent Audit of Tax Collection, Exemption,Remittance, and Expenditure
3.10.300 Citizens Oversight Committee
3.10.310 Remedies Cumulative
3.10.320 Sunset of Tax
3.10.010 Purpose.
The purpose of this ordinance is to impose a utility users' excise tax as a revenue measure
necessary to pay the usual and current expenses of conducting the municipal government
of the City. This ordinance shall be known and may be cited as the Utility Users' Tax
Ordinance.
3.10.020 - Title of ordinance.
The ordinance codified in this title shall be known as the Utility Users' Tax Ordinance.
Section 3.10.030—Definitions.
The following words and phrases whenever used in this Chapter 3.10 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.
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Exhibit A
(b) "Ancillary video services" means services that are associated with or
i incidental to the provision or delivery of video services, including but not limited to
electronic program guide services, recording services, search functions, or other
interactive services or communications that are associated with or incidental to the
provision, use or enjoyment of video services.
(c) `Billing address" shall mean the mailing address of the service user
where the service supplier submits invoices or bills for payment by the customer.
(d) "City" shall mean the City of Grand Terrace.
(e) "Gas" shall mean natural or manufactured gas or any alternate
hydrocarbon fuel which may be substituted therefor.
(f) "Individual Service" shall mean utility service at a single contiguous
location. A service user with more than one meter or billing invoice per utility service at
a single contiguous location may combine all billings for purposes of calculating the
maximum tax amount.
(g) "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.
(h) "Month" shall mean a calendar month.
(i) "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.
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Exhibit A
(j) "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.
(k) "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
and domestic),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.
(1) "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.
(m) "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.
(n) "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.
(o) "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).
(p) "Service address" means the residential street address or the business
street address of the service user. For a telecommunication or video 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,
�i
4
Exhibit A
(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 point of
sale of the services where the point of sale is within the City, or if unknown, the known
address of the service user (e.g., billing address or location associated with the service
number), which locations shall be presumed to be the place of primary use.
(q) "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.
(r) "Service user" shall mean a person required to pay a tax imposed under
the provisions of this Chapter.
(s) "State" shall mean the State of California.
(t) "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.
(u) "Tax Administrator" shall be the Finance Director, or his or her
- designee.
(v) "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).
(w) "Video programming" means those programming services commonly
provided to subscribers by a"video service supplier" including but not limited to basic
services, premium services, audio services, video games, pay-per-view services, video on
5
Exhibit A
demand, origination programming, or any other similar services, regardless of the content
of such video programming, or the technology used to deliver such services, and
regardless of the manner or basis on which such services are calculated or billed.
(x) "Video services"means "video programming" and any and all services
related to,the providing, recording, delivering, use or enjoyment of"video programming"
(including origination programming and programming using Internet Protocol, e.g., IP-
TV and IP-Video), regardless of the technology used to deliver, store or provide such
services, and regardless of the manner or basis on which such services are calculated or
billed, and includes ancillary video services, data services, "telecommunication services,"
or interactive communication services that are functionally integrated with "video
services."
(y) "Video service supplier" means any person, company, or service which
provides or sells video programming, or provides or sells the capability to receive video
programming, including any communications that are ancillary, necessary or common to
the provision, use or enjoyment of the video programming, to or from a business or
residential address in the City, where some fee is paid, whether directly or included in
dues or rental charges for that service, whether or not public rights-of-way are utilized in
the delivery of the video programming or communications. A "video service supplier"
includes, but is not limited to, multichannel video programming distributors (as defined
in 47 U.S.C.A. Section 522(13)); open video systems (OVS) suppliers; and suppliers of
\. cable television; master antenna television; satellite master antenna television;
multichannel multipoint distribution services (MMDS); video services using internet
protocol (e.g., IP-TV and IP-Video, which provide, among other things,broadcasting and
video on demand), direct broadcast satellite to the extent federal law permits taxation of
/ its video services, now or in the future; and other suppliers of video services (including
two-way communications), whatever their technology.
(z) "VoIP (Voice Over Internet Protocol)" means the digital process of
making and receiving real-time voice transmissions over any Internet Protocol network.
(aa) "Water Corporation,Electrical Corporation" have the same meanings
as defined in Sections 241 and 218 respectively, of the Public Utilities Code of the State
of California. "Electrical corporation" and "water corporation" includes any organization,
municipality or agency engaged in the selling or supplying of electrical power or water to
a service user.
(bb) "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," 66866," "877," and "888" toll-free calling, and
any subsequent numbers designated by the Federal Communications Commission.
(cc) "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
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Exhibit A
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.
3.10.030 Constitutional,statutory, and other exemptions.
(a) Nothing in this Chapter shall be construed as imposing a tax upon: (1) 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; (2) the City; or(3) any religious or nonprofit organizations
which are exempt from taxation pursuant to state or federal law, and which have applied
for and received tax-exempt status from either the State or the federal government.
(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
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 3.10.240 of
this Chapter. Filing an application with the Tax Administrator and appeal to the City
Manager, or designee, pursuant to Section 3.10.240 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.
3.10.040 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 five
percent (5%) 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,
7
Exhibit A
and such services are subject to taxation under this Section. There is also a rebuttable
presumption that prepaid telecommunication services sold within the City, or if the
known address of the service user is in the City, that such services 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,
Vo P, 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).
(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.
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Exhibit A
(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.
3.10.050 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:
(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.
9
Exhibit A
(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 electricity
used in water pumping by a water corporation or mutual water company, or the mere
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale.
The tax on electricity provided b self-production or a non-utility service supplier
(fl Y P Y P Y Y PP
not under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner
set forth in Section 3.10.070 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
( before the twentieth (201h) 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
(201h) 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.
3.10.060 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
10
Exhibit 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
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 which is to be resold and delivered through a pipeline distribution
system.
11
Exhibit A
(f) The tax on gas provided by self-production or by a non-utility service supplier not
under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner set
forth in Section 3.10.070. 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 (201h) 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 (201h) 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.
3.10.070 Collection of Tax from Service Users Receiving Direct Purchase of Gas or
Electricity.
(a) Any service user subject to the tax imposed by Section 3.10.050 or by Section
3.10.060 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 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
12
Exhibit A
electricity within the City. Rate schedules for this purpose shall be available from the
City.
3.10.080 Video Users' Tax.
(a) There is hereby imposed a tax upon every person in the City using video services.
The tax imposed by this section shall be at the rate of five percent(5%) of the charges
made for such services and shall be collected from the service user by the video service
supplier, or its billing agent. There is a rebuttable presumption that video 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 Chapter. 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.
(b) As used in this section, the term"charges" shall include,but is not limited to, charges
for the following:
(1) regulatory fees and surcharges, franchise fees and access fees (PEG);
(2) initial installation of equipment necessary for provision and receipt of video
services;
�\ (3) late fees, collection fees,bad debt recoveries, and return check fees;
(4) activation fees, reactivation fees, and reconnection fees;
(5) video programming and video services;
(6) ancillary video programming services (e.g., electronic program guide
services, search functions, recording functions, or other interactive services or
communications that are ancillary, necessary or common to the use or enjoyment
of the video services);
(7) equipment leases (e.g., remote, recording and/or search devises; converters);
and,
(8) service calls, service protection plans, name changes, changes of services, and
special services.
(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 video services.
(d) The Tax Administrator may issue and disseminate to video service suppliers, which
are subject to the tax collection requirements of this Chapter, an administrative ruling
13
Exhibit A
-.t identifying those video services, or charges therefor, that are subject to or not subject to
( the tax of subsection (a) above.
(e) The tax imposed by this section shall be collected from the service user by the video
service supplier, its billing agent, or a reseller of such services. In the case of video
service, the service user shall be deemed to be the purchaser of the bulk video service
(e.g., an apartment owner),unless such service is resold to individual users, in which case
the service user shall be the ultimate purchaser of the video service. 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 (20th) day of the following
month.
3.10.090 Water Users' Tax.
(a) There is imposed a tax upon every person using water in the City which is
transported and delivered through a pipeline distribution system. The tax imposed by this
section shall be at the rate of five percent (5%) of the charges made for such water.
(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 water
service; or, ii) currently are or historically have been included in a single or bundled rate
for water 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: water commodity
charges (potable and non-potable); distribution or transmission charges; metering
charges; customer charges; fire protection services; late charges; service establishment or
reestablishment charges; franchise fees; franchise surcharges; annual and monthly
charges; and other charges, fees and surcharges which are necessary for or common to
the receipt, use or enjoyment of water service; and, charges, fees, or surcharges for water
services or programs, which are mandated by a water district or a state or federal agency,
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 water services.
(d) The Tax Administrator, from time to time, may survey the water service suppliers in
the City to identify the various unbundled billing components of water 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 a water district or a
state or federal agency as a condition of providing such water service. The Tax
Administrator, thereafter, may issue and disseminate to such water service suppliers an
administrative ruling identifying those components and items which are: i) necessary for
or common to the receipt, use or enjoyment of water service; or, ii) currently are or
historically have been included in a single or bundled rate for water service by a local
14
Exhibit A
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) The tax on water service imposed by this section shall be collected from the service
user by the water 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 (20th) day of the following month.
3.10.100 Sewer Users' Tax
(a) There is hereby imposed a tax upon every person in the City using sewer services
within the City. The tax imposed by this section shall be at the rate of five percent (5%)
of the charges made for such sewer service. The tax shall be paid by the person using
such sewer service.
(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 sewer
service; or, ii) currently are or historically have been included in a single or bundled rate
for sewer service to retail customers. The term "charges" shall include, but is not limited
to, the following charges: customer charges, late charges, service establishment or
reestablishment charges, annual and monthly charges, and other charges, fees and
surcharges which are necessary for or common to the receipt, use or enjoyment of sewer
service; and, charges, fees, or surcharges for sewer services or programs, which are
mandated by the City, a state or federal agency, whether or not such charges, fees, or
_ surcharges appear on a bundled or line item basis on the customer billing.
(c) The tax on sewer service imposed by this section shall be collected from the service
user by the sewer 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 (20th) day of the following month.
3.10.110 Refuse Collection and Disposal Users' Tax.
(a) There is imposed a tax upon every person using refuse collection and disposal
services provided by a refuse collector in the City. There is also imposed a tax upon
every person in the City that delivers refuse directly to a transfer station or disposes of
trash or refuse at any City-owned landfill. The tax imposed by this section shall be at the
rate of five percent (5%) of the charges for the collection and disposal of refuse. The tax
shall be paid by the person using such refuse and trash collection or disposal service.
(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 refuse
collection and disposal services; or, ii) currently are or historically have been included in
a single or bundled rate for refuse collection and disposal services to retail customers.
The term"charges" shall include, but is not limited to, the following charges: customer
charges, late charges, service establishment or reestablishment charges, annual and
15
Exhibit A
monthly charges, and other charges, fees and surcharges which are necessary for or
common to the receipt, use or enjoyment of refuse collection and disposal services; and,
charges, fees, or surcharges for refuse collection and disposal services or programs,
which are mandated by the City, a state or federal agency, whether or not such charges,
fees, or surcharges appear on a bundled or line item basis on the customer billing.
(c) The tax imposed upon every person in the City that delivers refuse directly to a
transfer station or city-owned landfill shall be collected from the service user by the
operator of the transfer station. The transport station or City-owned landfill operator shall
not collect the tax from any person who shows proof, in a form deemed satisfactory by
the tax administrator, that the person's place of primary use is outside the City's
jurisdiction. The amount of tax collected by the transfer station or city-owned landfill
operator in one month shall be remitted to the tax administrator, and must be received by
the tax administrator on or before the twentieth (201h) day of the following month.
(d) The tax on imposed by this section on every person in the City using refuse
collection and disposal services provided by the refuse collector shall be collected from
the service user by the refuse collector 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`h) day of the following month.
3.10.120 Maximum tax payable.
(a) In an effort to mitigate the impact that a utility users' tax may have on a given
service user, limits may be set on the total amount of taxes to be paid annually by a
service user at one location under the provisions of this.Chapter. Any such limits (annual
maximum amount) shall be established by City Council Resolution.
(b) A service user may deposit the maximum tax per subsection (a) of this section with
the Tax Administrator during the month of April each year as payment in advance of
taxes due under this chapter for the twelve-month period commencing the first day of that
month and ending on March 31 thereafter. Any service user making a deposit of
maximum tax shall not thereafter be billed for any tax under this chapter for that twelve-
month period. The Tax Administrator shall notify each service supplier when to cease
and when to resume billing the tax to such service users.
(c). Any Service User paying more than a maximum tax provided for in subsection (a) of
this section during any twelve-month period commencing April 1 and ending March 31,
may claim a refund or credit for such overpayment from the Tax Administrator.
(d). The term "one location" as used in subsection (a) of this section shall mean one or
more contiguous sites from which the service user receives one or more utility billings.
3.10.130 Senior low-income exemption.
(a) The taxes imposed by this Chapter shall not apply to any person who is the head of a
household and both: (1) 65 years of age or older; and (2) meets the low-income
requirements for residents of San Bernardino County as established annually by the
' California Department of Housing and Community Development.
16
Exhibit A
(b) To qualify for the exemption set forth in this section, the person shall file an
application in the form, time and manner prescribed by the Tax Administrator.
(c The tax Administrator shall, within 60 days of receipt of an application for exemption,
determine whether the exemption is granted, and if so, notify the service supplier.
(d) The exemption granted to a person pursuant to this section shall become effective on
the beginning of the first regular billing period which commences after the tax
administrator has notified the service supplier that an exemption has been granted. Upon
a showing of hardship by a service supplier or the City, the Tax Administrator may, as an
alternative, implement this Section 3.10.130 by requiring the exempt person to pay the
tax and seek a refund under Section 3.10.230. The Tax Administrator shall provide a
refund claim form for this purpose.
3.10.140 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.
3.10.150 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
permitted by State and Federal law, and as it may change from time to time by judicial
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 with the City or distributed from a location with the City; or
17
Exhibit A
- 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
t_ 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.
3.10.160 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 3.10.916 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
t 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
immediately upon cessation of business for any reason. Pursuant to Revenue and Tax
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.
3.10.170 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
Lam=
between financial accounts, made by a service supplier in satisfaction of its obligations
18
Exhibit A
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 (0.75%) 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.
3.10.180 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
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.
19
Exhibit A
3.10.190 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 3.10.190 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-
assessment), thereafter, by confirming, modifying or rejecting the original deficiency
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 3.10.240 of
this Chapter. Filing an application with the Tax Administrator and appeal to the City
Administrator, or designee,pursuant to Section 3.10.240 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
20
Exhibit A
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).
1,
(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.
3.10.200 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 3.10.200 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
1i 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
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.
3.10.210 Additional Powers and Duties of the Tax Administrator.
(a) Tl e Tax Administrator shall have the power and duty, and is hereby directed, to
enforce each and all of the provisions of this Chapter.
21
Exhibit A
(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 53750 or otherwise. The Tax Administrator is not authorized
to amend the City's methodology for purposes of Government Code Section 53750 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
3.10.190 of this Chapter for all taxes (and applicable penalties and interest) owed and 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.
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Exhibit A
(f) 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.
3.10.220 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
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,
23
Exhibit A
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.
3.10.230 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.
(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, City Manager or the City Council shall
act upon the refund claim within the time period set forth in Government Code Section
912.4 based on the following claim amounts: (1) claims up to $1,000.00—Tax
Administrator; (2) claims over$1,000.00 but less than $5,000.00—City Manager; (3)
claims of$5,000.00 or more—City Council. If the Tax Administrator/City Manager/City
Council 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 City
on the last day of the period within which the City was required to act upon the claim as
provided in Government Code Section 912.4. The Tax Administrator shall give notice of
24
Exhibit A
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.
3.10.240 Appeals.
(a) The provisions of this Section apply to any decision (other than a decision relating to
a refund pursuant to Section 3.10.230 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 3.10.230 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 3.10.230 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.
(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.
25
Exhibit A
(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.
3.10.250 No Injunction/Writ of Mandate.
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.
3.10.260 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.
3.10.270 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
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.
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Exhibit A
3.10.280 No Increase in Tax Percentage or Change in Methodology Without Voter
Approval; Amendment or Repeal.
This Title 3, Chapter 3.10 of the Grand Terrace 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 Grand Terrace 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.
3.10.290 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.
3.10.300 Citizens Oversight Committee
As soon as practical after the adoption of the ordinance codified in this Chapter, the City
Council shall appoint a Citizens Oversight Committee, which shall receive reports from
the Tax Administrator at least annually on the implementation of this Chapter, the funds
collected, and how funds collected are spent. The Citizens Oversight Committee, which
may make recommendations to the City Council on any matter relating to this Chapter,
shall hold all meetings in compliance with the Ralph M. Brown Act. (California
Government Code Section 54950, et seq.)
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Exhibit A
3.10.310 Remedies Cumulative.
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.
3.10.320 Sunset of Tax.
This Chapter 3.10 shall automatically sunset, and its provisions shall become ineffective,
six years from the date of passage and approval by a majority of the electorate of the City
of Grand Terrace, or November 5, 2019, whichever occurs first, provided that the
provisions of Chapter 3.10 shall continue to apply for purposes of collection and
enforcement of all taxes owed prior to such termination date.
SECTION 2. Effective Date. This Chapter, if approved by the electorate of the City
of Grand Terrace at the General Municipal Election of November 5, 2013 shall
become effective immediately upon the declaration of the results of that election by
the City Council of the City of Grand Terrace.
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 declare 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. 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 was PASSED, APPROVED
and ADOPTED by the People of the City of Grand Terrace, California voting on the
5th day of November, 2013.
Mayor
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Exhibit A
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
29