Ordinance No. 1196ORDINANCE NO. 1196
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
VERNON DECLARING AN EMERGENCY AND ESTABLISHING A
DATE FOR A SPECIAL ELECTION TO SUBMIT TO THE VOTERS
OF THE CITY A PROPOSITION TO LEVY A UTILITY USERS
TAX, ESTABLISHING PROCEDURES IN CONNECTION WITH
SUCH ELECTION, ADDING ARTICLE VII TO CHAPTER 5 OF
THE CODE OF THE CITY OF VERNON TO CODIFY SUCH
UTILITY USERS TAX UPON APPROVAL OF SUCH PROPOSITION
BY SUCH VOTERS, ESTABLISHING PROCEDURES FOR THE
LEVY AND COLLECTION OF SUCH UTILITY USERS TAX UPON
SUCH APPROVAL, AND OTHER RELATED MATTERS
WHEREAS, the City of Vernon (the "City") has suffered a
decline in amounts available for general fund expenditures and a
depletion of its reserve funds due to, among other causes, increased
expenditures, the recession, substantially reduced economic activity
during the last several years, the dissolution of the Vernon
Redevelopment Agency and reductions in transfers from the City's Light
and Power Department; and
WHEREAS, the City projects that there will be a $12 million
shortfall in general fund revenues for fiscal year 2012-13 and
shortfalls in general fund revenues in the next several fiscal years;
and
WHEREAS, the City Council of the City (the "City Council")
has determined that, without an additional source of revenues in fiscal
year 2012-13, it will be necessary for the City to make substantial
reductions in the City's municipal services and projects; 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, subdivision (b) of Section 2 of Article XIIIC of the
California Constitution provides that the election required by such
subdivision be consolidated with a regularly scheduled general election
for members of the governing body of the local government, except in
cases of emergency declared by a unanimous vote of the governing body
of the local government; and
WHEREAS, the City Council desires to declare such an
emergency; and
WHEREAS, the City Council desires to submit to the voters of
the City, pursuant to this Ordinance, a proposition to levy a general
utility users tax on most utilities in the City as described herein
(the "Utility Users Tax"), the proceeds of which Utility Users Tax will
be deposited in the City's general fund for general government
purposes; and
WHEREAS, pursuant to Chapter 5.3 of the Charter of the City
and Section 2.118 of Article XV of Chapter 2 of the Code of the City,
the City Council desires to order a special election of the City to be
held on September 18, 2012, and to submit a proposition to levy the
Utility Users Tax to the voters of the City at such special election;
and
WHEREAS, in order to reduce election costs and to increase
voter participation, pursuant to Section 4000 et. seq. of the
California Elections Code (the "Elections Code) and Chapter 5.3 of the
Charter of the City, the City Council desires that said special
election be conducted as an all mailed ballot election;
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ORDAINS:
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VERNON HEREBY
SECTION 1.
Recitals. The City Council hereby finds and
determines that all of the foregoing recitals are true and correct.
SECTION 2.
Declaration of Emergency. The City Council
hereby declares that, as a result of the projected $12 million
shortfall in general fund revenues for fiscal year 2012-13, a fiscal
emergency exists in the City.
SECTION 3.
Special Election. Pursuant to subdivision (b) of
Section 2 of Article XIIIC of the California Constitution, Section
53720 et. seq. of the Government Code, Chapter 5.3 of the Charter of
the City and Section 2.118 of Article XV of Chapter 2 of the Code of
the City, the City Council hereby orders a special municipal election
to be held on September 18, 2012, at which there shall be submitted to
the voters of the City the proposition described in Section 4 hereof,
as abbreviated in Section 5 hereof (the "Proposition"). The City
Council designates the City Clerk of the City to act as the elections
official (the "Elections Official") to conduct such election.
SECTION 4. Complete Text of Utility Users Tax. The complete
text of the Proposition, which includes the type of tax, rate of tax
and the method of its collection, and which shall become effective upon
approval.of a majority of the votes cast by the voters voting upon the
Proposition, is set forth in Exhibit A attached hereto and hereby
incorporated herein.
SECTION 5. Abbreviation of Proposition. Pursuant to
Sections 9051 and 13247 of the Elections Code, the Elections Official
shall submit to the voters of the City the following abbreviation of
the Proposition:
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PROPOSITION: UTILITY USERS TAX
Shall the City of Vernon be authorized to levy
a utility users tax to fund general government
YES
purposes at the rate of not to exceed 9.80 of
utility charges for electricity, gas,
telecommunications, video and water utility
services provided in the City of Vernon for a
period of two years, commencing in fiscal year
NO
2012-13, all as further described in Ordinance
No. 1196 adopted on June 19, 2012?
SECTION 6. Approval; Codification. (a) The Proposition
shall not take effect, and the Utility Users Tax shall not be levied,
unless and until the Proposition receives the approval of a majority of
the votes cast by the voters of the City voting upon such Proposition
at the September 18, 2012 special election.
(b) If the Proposition is so approved, the Proposition shall
be codified as Article VII of Chapter 5 of the Code of the City.
SECTION 7. Election Procedures; All Mailed Ballot Election.
(a) The election on the Proposition shall be held and conducted as
provided herein. Pursuant to Section 4000 et. seq. of the Elections
Code, the election shall be conducted as an all mailed ballot election;
provided, that, pursuant to Chapter 5.3 of the Charter of the City,
such all mailed.ballot election shall be held on September 18, 2012
rather than one of the mailed ballot election dates set forth in
Section 1500 of the Elections Code.
(b) In all particulars not prescribed in this Ordinance, the
election shall be held as provided by law for the holding of a special
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municipal all mailed ballot election in the City and in accordance with
the Elections Code.
(c) The Elections Official shall render all services to the
City relating to the election. The Elections Official is hereby
authorized, instructed and directed to procure and furnish any and all
official ballot notices and printed matter and all supplies and
equipment that may be necessary to prepare and lawfully conduct the
special municipal all mailed ballot election called by this Ordinance,
including the preparation of the ballot.
(d) _Pursuant to Section 4101 of the Elections Code, the
Elections Official shall mail a combined sample ballot and mail ballot
not sooner than 29 days before the election date and not later than 10
days before the election date.
(e) Pursuant to Section 3018 of the Elections Code, the
Elections Official shall designate certain location(s) where a voter
may return the mailed ballot in person rather than returning the mailed
ballot by United States mail, and shall give notice by the issuance of
a general news release of such designated location(s) not later than 14
days prior to the election date.
(f) At the next meeting of the City Council occurring after
the returns of the election have been canvassed and certified by the
Elections Official, the City Council shall adopt a resolution reciting
the fact of the election and a statement of the results of the
election.
SECTION 8. Arguments and Analysis; Public Examination. (a)
The last day for submission of direct arguments for or against the
Proposition shall be by 5:00 p.m. on July 3, 2012. Direct arguments
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shall be submitted to the Elections Official, shall not exceed 300
words and shall be signed by not more than five persons.
(b) The last day for submission of rebuttal arguments for or
against the Proposition shall be by 5:00 p.m. on July 13, 2012.
Rebuttal arguments shall be submitted to the Elections Official, shall
not exceed 250 words and shall be signed by not more than five persons.
Those persons may be different persons than the persons who signed the
direct arguments.
(c) Pursuant to Section 9285 of the Elections Code, when the
Elections Official has selected the arguments for and against the
Proposition, which shall be printed and distributed to the voters, the
Elections Official shall send a copy of the argument in favor of the
Proposition to the authors of any argument against the Proposition, and
a copy of the argument against the Proposition to the authors of any
argument in favor of the Proposition, immediately upon receiving the
arguments. Rebuttal arguments shall be printed in the same manner as
the direct arguments. Each rebuttal argument shall immediately follow
the direct argument which it seeks to rebut.
(d) Pursuant to Section 9280 of the Elections Code, the
Office of the City Attorney shall prepare an impartial analysis of the
Proposition showing the effect of the Proposition on the existing law
and the operation of the Proposition. Said analysis shall not exceed
500 words and shall be submitted to the Elections Official by July 3,
2012. Said analysis shall be printed preceding the arguments for and
against the Proposition.
(e) Pursuant to Section 9295 of the Elections Code, the
Elections Official shall make a copy of the arguments and analysis
referred to in this Section available for public examination in the
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Election Official's office for a period of ten calendar days
immediately following the filing deadline for the submission of such
arguments and analysis. The Elections Official may charge a fee to any
person obtaining a copy of such materials, but such fee may not exceed
the actual cost incurred by the Elections Official in providing the
copy.
SECTION 9. Placement on the Ballot. The Elections Official
is hereby authorized and directed to prepare the ballot for the special
municipal all mailed ballot election in accordance with the Elections
Code. The Elections Official shall take all steps necessary to place
the Proposition on the ballot and to cause the Proposition, as
abbreviated pursuant to Section 5 hereof, to be printed, and shall act
as the filing authority for arguments. The full text of the
Proposition shall not be printed in the ballot, but a statement shall
be printed in the ballot pursuant to Section 9280 of the Elections Code
advising voters that they may obtain a copy of the Proposition upon
request made to the Elections Official.
SECTION 10. Notice of Election. The Elections Official is
hereby requested to publish or post as required by law the `Notice of
Election, Summary of the Proposition to be Voted On and Notice to File
Arguments" in substantially the form attached hereto as Exhibit B and
incorporated herein by reference.
SECTION 11. Severability. The City Council declares that,
should any portion of this Ordinance be rendered or declared invalid by
any final court action in a court of competent jurisdiction or by
reason of any preemptive legislation, the remaining portions of this
Ordinance shall remain in full force and effect.
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SECTION 12. Publication. The City Clerk shall attest and
certify to the adoption of this Ordinance and shall cause this
Ordinance and such certification to be entered in the Book of
Ordinances of the City Council. Pursuant to Section 36933 of the
Government Code, within 15 days of the adoption of this Ordinance, the
City Clerk shall cause this Ordinance to be published or posted with
the names of those City Council members voting for and against the
Ordinance as required by law.
SECTION 13. Effective Date
This Ordinance, which declares
an emergency pursuant to subdivision.(b) of Section 2 of Article XIIIC
of the California Constitution, shall take effect only if approved by
the unanimous vote of the City Council, and, if so approved, this
Ordinance, which relates to an election, shall take immediate effect
from and after such approval pursuant to Section 4.3 of the Charter of
the City; provided, however, that the Proposition submitted to the
voters of the City by this Ordinance shall not take effect unless the
Proposition receives the approval of a majority of the votes cast by
the voters of the City voting upon such Proposition. .
APPROVED and ADOPTED this 19t° day of June, 2012.
Name: William Davis
Title:44a / Mayor Pro-Tem
1�1—
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, WILLARD G. YAMAGUCHI, City Clerk of the City of
Vernon, do hereby certify that the foregoing Ordinance, being
Ordinance No. 1196, was duly passed, approved and adopted by the
City Council of the City of Vernon at a regular meeting of the
City Council duly held in the City of Vernon on Tuesday, June 19,
2012, and thereafter adopted at a meeting of said City Council by
the following vote:
AYES: Councilmembers: Mayor Pro-Tem Davis,
Maisano, McCormick,
Ybarra
NOES: Councilmembers: None
ABSENT: Councilmembers: None
And thereafter was duly signed by the Mayor or Mayor
Pro-Tem of the City of Vernon.
Executed this ✓1
(SEAL)
day of June,/2'012, at
City Cler
Cali
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EXHIBIT A
EXHIBIT A
PROPOSITION
Chapter 5. Business License Taxes and Other City Taxes
Article VII. Utility Users Tax
Section 5.110. Title. This Article shall be known as the
"Utility Users Tax of the City of Vernon."
Section 5.111. Purpose. This Article is enacted solely to
raise revenues for general governmental purposes of the City of
Vernon and is not enacted for regulatory purposes. All proceeds
from the Utility Users Tax of the City of Vernon shall be
deposited in the general fund of the City of Vernon and used for
general governmental purposes.
Section 5.112. Definitions. As used in this Article, the
following terms have the meanings indicated:
(a) "Ancillary Telecommunications 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: (i)
ancillary services that link two or more participants of an
audio or video conference call and may include the
provision of a telephone number, but not including the
Telecommunications Services used to reach the conference
bridge ("Conference Bridging Services"), (ii) ancillary
services of separately stating information pertaining to
individual calls on a customer's billing statement, (iii)
ancillary services that are offered in connection with one
or more Telecommunications Services, which offer advanced
calling features that allow customers to identify callers
and to manage multiple calls and call connections,
including Conference Bridging Services ("Directory
Assistance"), (iv) ancillary services that are offered in
connection with one or more Telecommunications Services,
which offer advanced calling features that allow customers
to identify callers and to manage multiple calls and call
connections, including Conference Bridging Services
("Vertical Services"), and (v) ancillary services that
enable the customer to store, send or receive recorded
messages, but not including any Vertical Services that the
customer may be required to have in order to utilize such
services ("Voice Mail Services").
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(b) "Ancillary Video Services" means services that
are associated with or incidental to the provision, use or
enjoyment of Video Services, including, but not limited to
(i) electronic program guide services, recording services,
search functions or other interactive services, or (ii)
telecommunications that are associated with or incidental
to the provision, use or enjoyment of Video Programming.
(c) "Billing Address" means the mailing address of
the Service User where the Service Supplier submits
invoices or bills for payment by the Service User.
(d) "City" means the City of Vernon, California.
(e) "Code" means the Code of the City.
(f) "Effective Date" has the meaning ascribed thereto
in Section 5.113 of this Article.
(g) "Electrical Charges" means, with respect to the
Electricity Users Tax (i) charges made for metered
electrical energy, (ii) charges for services, including
customer charges, service charges, demand• charges,
luminaire charges, horsepower charges, standby charges,
fuel or other cost adjustments, pass -through charges and
all other annual and monthly charges, and (iii) the value
of any other services, credit, property of every kind or
nature or other consideration provided by the Service User
in exchange for the electrical energy or services related
to the provision of such electrical energy; provided,
however, that "Electrical Charges" does not include any in -
lieu of franchise tax payments collected by the City
together with the foregoing charges.
(h) "Electrical Corporation" has the meaning ascribed
thereto in Section 218 of the Public Utilities Code.
(i) "Electricity Users Tax" means the tax imposed by
Section 5.114 of this Article.
(j ) "Fiscal Year" means the fiscal year of the City,
which is the twelve-month period starting July 1 and ending
on the following June 30.
(k) "Gas Charges" means, with respect to the Gas
Users Tax (i) charges made for commodity gas whether
procured from a Gas Corporation, a Nonutility Supplier or
the City, including natural or manufactured gas or any
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alternative hydrocarbon fuel which may be substituted
therefor, (ii) charges for services, including
transportation charges, customer charges, service charges,
annual and monthly charges and any other charges authorized
by the California Public Utilities Commission, the Federal
Energy Regulatory Commission or any other regulatory body,
as applicable, and (iii) the value of any other services,
credit, 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;
provided, however, that "Gas Charges" does not include any
one-time connection charges.
(1) "Gas Corporation" has the meaning ascribed
thereto in Section 222 of the Public Utilities Code.
(m) "Gas Users Tax" means the tax imposed by Section
5.115 of this Article.
(n) "Government Code" means the California Government
Code.
(o) "Mobile Telecommunications Service" has the
meaning ascribed thereto, and the usage as set forth, in
the Mobile Telecommunications Sourcing Act (4 U.S.C.
Section 124) and the regulations thereunder.
(p) "Nonutility Supplier" means a Service Supplier
within the City, other than a Gas Corporation, which sells
or supplies gas or supplemental services to gas users
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within the City.
(q) "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.
(r) "Person" means, without limitation, any natural
individual, any domestic or foreign corporation, firm,
association, syndicate, joint venture, partnership of any
kind, club, joint stock company, cooperative, common law
trust, trust of any kind, or receiver, trustee, guardian or
other representative appointed by order of any court, or
other entity.
(s) "Place of Primary Use" means, with respect to a
specified Telecommunications Service, the street address
representative of where a Person's use of such
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Telecommunications Service primarily occurs, which must be
the residential street address or the primary business
street address of such Person.
(t) "Postpaid Telecommunications Service" means the
Telecommunications Service obtained by making a payment on
a telecommunication -by -telecommunication 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
Telecommunications Service.
(u) "Prepaid Telecommunications Service means the
right to access Telecommunications Services, which must be
paid for in advance and which enables the origination of
telecommunications 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.
(v) "Private Telecommunications Service" means a
Telecommunications Service that entitles the customer to
exclusive or priority use of a telecommunications 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 telecommunications channel is a physical or
virtual path of telecommunications over which signals are
transmitted between or among customer channel termination
points (i.e., the location where the customer either inputs
or receives the telecommunications).
(w) "Proposition" has the meaning ascribed thereto in
Ordinance No. 1196 of the City.
(x) "Public Utilities Code" means the California
Public Utilities Code.
(y) "Service Address" means either (i) the location
of the Service User's telecommunications equipment from
which the telecommunications originate or terminate,
regardless of where the telecommunications are billed or
paid, (ii) if the location described in clause (i) of this
definition is unknown (such as with Mobile
Telecommunications Services or VoIP services), the location
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of the Service User's Place of Primary Use, or (iii) for
Prepaid Telecommunications Services, the location
associated with the service number.
(z) "Service Supplier" means any Person required to
collect or self -impose and remit the Utility Users Tax.
(aa) "Service User" means any Person required to pay
the Utility Users Tax.
(bb) "State" means the State of California.
(cc) "Tax Administrator" means the Finance Director of
the City, or his or her appointed designee; provided,
however, that if such .official position of the City is
eliminated, then "Tax Administrator" means the officer of
the City with substantially similar duties and
responsibilities, or his or her appointed designee.
(dd) "Telecommunications Charges" means, with respect
to the Telecommunications Users Tax (i) charges made for
Telecommunications Services and (ii) the value of any other
services, credits, property of any kind or nature, or other
consideration provided by the Service User in exchange for
the Telecommunications Services.
(ee) "Telecommunications Services" 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 VoIP services or are classified
by the Federal Telecommunications Commission as enhanced or
value added, and includes Video Services and/or data
services that are functionally integrated with
telecommunications services. "Telecommunications Services"
include, but are not limited to: Ancillary
Telecommunications Services, Mobile Telecommunications
Services, Prepaid Telecommunications Services (to. the
extent that it is practicable for the Service Supplier to
collect the correct tax imposed under this Article from the
Service Supplier), Postpaid Telecommunications Services,
Private Telecommunications Services, Paging Services, 800
Services (or any other toll -free numbers designated by the
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Federal Telecommunications Commission), 900 Services (or
any other similar numbers designated by the Federal
Telecommunications Commission for services whereby
subscribers who call in to pre-recorded or live service),
charges for connection, reconnection, termination,
movement, or change of telecommunications 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), access and line charges, universal service
charges, regulatory, administrative and other cost recovery
charges, local number portability charges, and text and
instant messaging, regardless of the manner or basis on
which such services are calculated or billed. The term
"Telecommunications Services" shall not include digital
downloads that are not Ancillary Telecommunications.
Services, such as books, music, ringtones, games, and
similar digital products.
(ff) "Telecommunications Users Tax" means the tax
imposed by Section 5.118 of this Article.
(gg) "Utility Charges" means the Electrical Charges,
the Gas Charges, the Telecommunications Charges, the Video
Charges and the Water Charges.
(hh) "Utility Users Tax" means the Electricity Users
Tax, the Gas Users Tax, the Telecommunications Users Tax,
the Video Users Tax and -the Water Users Tax.
(ii) "Video Charges" means, with respect to the Video
Users Tax (i) charges for all Video Programming services
(including basic services, premium services, audio
services, video games, pay -per -view services or on -demand
programming), (ii) .Ancillary Video Services, (iii) charges
for equipment leases, (iii) charges for regulatory fees and
surcharges, franchise fees and access fees, (iv) charges
for initial installation of equipment necessary for
provision and receipt of Video Services, (v) late fees,
collection fees, bad debt recoveries and return check fees,
(vi) activation fees, reactivation fees and reconnection
fees, (vii) charges for service calls, service protection
plans, name changes, changes of services and special
services, and (viii) the value of any other services,
credits, property of any kind or nature, or other
consideration provided by the Service User in exchange for
Video Services.
(jj) "Video Programming" means those programming
services commonly provided to subscribers by a supplier of
Video Services including, but not limited to, basic
services, premium services, audio services, video games,
pay -per -view services, video on 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.
(kk) "Video Services" means any and all services
related to the providing, storing or delivering of Video
Programming (including origination programming and
programming using internet protocol) using one or more
channels by a.supplier of Video Services, 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, Telecommunications Services
or interactive Telecommunications Services that are
functionally integrated with video services.
(11) "Video Users Tax" means the tax imposed by
Section 5.119 of this Article.
(mm) "VoIP" means voice over Internet protocol, which
is the digital process of making and receiving real-time
voice transmissions over any internet protocol network.
(nn) "Water Charges" means, with respect to the Water
Users Tax (i) charges made for metered water, (ii) charges
for service, including customer charges, service charges
and annual and monthly charges and any other charge
authorized by the laws of the State, and (iii) the value of
any other services, credit, property of every kind or
nature or other consideration provided by the Service User
in exchange for the water or services related. to the
delivery of such water.
(oo) "Water Corporation" has the meaning ascribed
thereto in Section 241 of the Public Utilities Code.
(pp) "Water Users Tax" means the tax imposed by
Section 5.116 of this Article.
(qq) "800 Service" means a Telecommunications Service
that allows a caller to dial a toll -free number without
incurring a charge for the call, which service includes
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toll -free calling typically marketed under the name "800,"
"855, "866," "877 and"888" and any subsequent numbers
designated by the Federal Communications Commission.
(rr) "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 pre-recorded announcement or. live service,
which services include toll -free calling typically marketed.
under the name "900" and any subsequent numbers designated
by the Federal Communications Commission; provided,
however, that the term "900 Service" does not include the
charge for collection services provided by the seller of
the Telecommunications Services to the subscriber, or
services or products sold by the subscriber to the
subscriber's customer.
Section 5.113. Effective Date; Sunset. (a) There is
hereby imposed a Utility Users Tax, which is comprised of the
Electricity Users Tax, the Gas Users Tax, the Telecommunications
Users Tax, the Video Users Tax and the Water Users Tax, at a
rate of not to exceed 9.8% of Utility Charges. The Utility Users
Tax shall become effective upon approval of the Proposition by a
majority of the votes cast by the voters of the City voting
thereon and upon the declaration of such voting outcome by the
City Council (the "Effective Date"). Upon such approval and
declaration, the Tax Administrator shall submit, as soon
thereafter as reasonably practicable, written notification to
the. Service Suppliers, in accordance with procedures established
by the Service Suppliers, requesting that the Utility Users Tax
be collected. The Service Suppliers responsible for collecting
and remitting the Utility Users Tax shall have a reasonable
period of time to install and implement necessary billing
changes to effect the collection of the Utility Users Tax, but
in no event to exceed 90 days from the date of receipt .of such
written notification or, if 90 days from the date of receipt of
such written notification is not the first day of a month, then
the first day of the month following the month in which such
90th day occurs.
(b) This Article and the Utility Users Tax shall be of no
further force and effect at 11:59 p.m. (California time) on the
date that is two years after the Effective Date; provided,
however, that nothing herein shall prohibit the City from taking
any action authorized under this Article after such time and
date to collect any Utility Users Tax .accrued and owed as of
.such time and date.
Section 5.114. Electricity Users Tax. (a) There is hereby
imposed a tax upon every Person using electrical energy in the
City hereby called the "Electricity Users Tax." The Electricity
Users Tax shall be at the, rate of not to exceed 9.80 of the
Electrical Charges made for such electrical energy. The initial
rate of the . Electricity Users Tax shall be established and set
forth in a resolution of the. City.Council; provided, that, such
rate may be subsequently adjusted pursuant to Section 5.123 of
this Article. The Electricity Users Tax shall be paid by the
Service User paying for such electrical energy.
(b) As used in this Section, the term "using electrical
energy" shall not be construed to mean (i) the storage of
electrical energy by a Person in a battery that such Person owns
or possesses for use in an automobile or other machinery or
device apart from the premises upon which the electrical energy
was received provided, however, that the term "using electrical
energy" shall include the receiving of such electrical energy
for the purpose of using it in the charging of batteries, (ii)
the mere receiving of such electrical energy by an Electrical
Corporation or governmental agency within the City for resale,
or (iii) the use of such electrical energy in the production or
distribution of water, gas or other utility by a public utility
or 'a governmental agency.
(c) In each Fiscal Year the Electricity Users Tax is in
effect pursuant to this Article, the maximum amount of the
Electricity Users Tax imposed on, and collected from, a Service
User shall be as set forth in Section 5.117 of this Article.
(d) The Electricity Users Tax shall be collected from the
Service User by the Service Supplier providing the electrical
energy or its billing agent. The amount of tax collected in one
month shall be remitted by the Service Supplier or its billing
agent to the Tax Administrator on or before the last day of the
following month, unless the due date occurs on a weekend or a
holiday, in which case the Electricity Users Tax shall be
remitted on or before the next business day thereafter. The
Electricity Users Tax shall be deemed remitted on the date
received by the Tax Administrator, or on the date postmarked if
remitted by first class United States mail with postage fully
prepaid. With the prior written approval of the Tax
Administrator, remittance of the Electricity Users Tax may be
predicated on a formula based upon the payment pattern of the
Service Users.
Section 5.115. Gas Users Tax. (a) There is hereby imposed
a tax upon every Person using gas, including natural or
manufactured gas or any alternative hydrocarbon fuel which may
be substituted therefor, in the City which is delivered through
mains, pipes or mobile transport hereby called the "Gas Users
Tax." The Gas Users Tax shall be at the rate of not to exceed
9.8% of the Gas Charges made for such gas. The initial rate of
the Gas Users Tax shall be established and set forth in a
resolution of the City Council; provided, that, such rate may be
subsequently adjusted pursuant to Section 5.123 of this Article.
The Gas Users Tax shall be paid by the Service User paying for
such gas.
(b) There shall be excluded from the base on which the Gas
Users Tax is computed charges made for gas which is to be resold
and delivered through mains, pipes or mobile transport, and
charges made for gas used by a Nonutility Supplier to generate
electrical energy for its own use or for sale to others,
provided the electrical energy so generated is subject to tax
under Section 5.114 of this Article.
(c) In each Fiscal Year the Gas Users Tax is in effect
pursuant to this Article, the maximum amount of the Gas Users
Tax imposed on, and collected from, a Service User shall be as
set forth in Section 5.117 of this Article.
(d) The Gas Users Tax shall be collected from the Service
User by the Service Supplier providing the gas or its billing
agent. The amount of tax collected in one month shall be
remitted by the Service Supplier or its billing agent to the Tax
Administrator on or before the last day of the following month,
unless the due date occurs on a weekend or a holiday, in which
case the tax shall be remitted on or before the next business
day thereafter. The Gas Users Tax shall be deemed remitted on
the date received by the Tax Administrator, or on the date
postmarked if remitted by first class United States mail with
postage fully prepaid. With the prior written approval of the
Tax Administrator, remittance of the Gas Users Tax may be
predicated on a formula based upon the payment pattern of the
Service Users.
Section 5.116. Water Users Tax. (a) There is hereby
imposed a tax upon every Person using, in the City, water from a
Water Corporation which is delivered through mains or pipes
hereby called the "Water Users Tax." The Water Users Tax shall
be at the rate of not to exceed 9.8% of the Water Charges made
for such water. The initial rate of the Water Users Tax shall be
established and set forth in a resolution of the City Council;
provided, that, such rate may be subsequently adjusted pursuant
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to Section 5.123 of this Article. The Water Users Tax shall be
paid by the Service User paying for such water.
(b) In each Fiscal Year the Water Users Tax is in effect
pursuant to this Article, the maximum amount of the Water Users
Tax imposed on, and collected from, a Service User shall be as
set forth in Section 5.117 of this Article.
(c) The Water Users Tax shall be collected from the
Service User by the Service Supplier providing the water or its
billing agent. The amount of tax collected in one month shall be
remitted by the Service Supplier or its billing agent to the. Tax
Administrator on or before the last day of the following month,
unless the due date occurs on a weekend or a holiday, in which
case the tax shall be remitted on or before the next business
day thereafter. The Water Users Tax shall be deemed remitted on
the date received by the Tax Administrator, or on the date
postmarked if remitted by first class United States mail with
postage fully prepaid. With the prior written approval of the
Tax Administrator, remittance of the Water Users Tax may be
predicated on a formula based upon the payment pattern of the
Service Users.
Section 5.117. Maximum Amount of Electricity Users Tax,
Gas Users Tax and Water Users Tax. In each Fiscal Year the
Utility Users Tax is in effect pursuant to this Article, the
maximum collective amount of the Electricity Users Tax, the Gas
Users Tax and the Water Users Tax imposed on, and collected
from, a Service User pursuant to this Article in such Fiscal
Year shall be $250,000. A Service User with more than one meter
or billing invoice for Electrical Charges, Gas Charges, and/or
Water Charges may combine all billings for purposes of
calculating such maximum collective amount for each Fiscal Year.
Section 5.118. Telecommunications Users Tax. (a) There is
hereby imposed a tax upon every Person using Telecommunications
Services in the City hereby called the "Telecommunications Users
Tax." The Telecommunications Users Tax shall be at the rate of
not to exceed 9.80 of the Telecommunications Charges made for
such Telecommunications Services. The initial rate of the
Telecommunications Users Tax shall be established and set forth
in a resolution of the City Council; provided, that, such rate
may be subsequently adjusted pursuant to Section 3.123 of this
Article. The Telecommunications Users Tax shall be paid by. the
Person paying for such Telecommunications Services. There is a
rebuttable presumption that Telecommunications. Services, which
are billed to a Billing Address or Service Address in the City,
are used, in whole or in part, within the City's boundaries and
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that such services are subject to the Telecommunications Users
Tax. 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 the Telecommunications Users
Tax.
(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 Service Suppliers of.
Telecommunications Services, which are subject to the tax
collection requirements of this Section, sourcing rules for the
taxation of other Telecommunications Services, including, but
not limited to, Postpaid Telecommunications Services, Prepaid
Telecommunications Services, and Private Telecommunications
Services; provided, that, such rules are based upon custom and
common practice that further administrative efficiency and
minimize multi -jurisdictional taxation.
(c) To prevent actual multi -jurisdictional taxation of
Telecommunications Services subject to the Telecommunications
Users Tax, any Service User, upon proof to the Tax Administrator
that the Service User has previously paid the same tax in
another state or local jurisdiction on such Telecommunications
Services, shall be allowed a credit against the
Telecommunications Users Tax to the extent of the amount of such
tax legally imposed in such other state or local jurisdiction;
provided, however, that the amount of credit shall .not exceed
the Telecommunications Users Tax owed to the City.
(d) The Tax Administrator may issue and disseminate to
Service Suppliers of Telecommunications Services that are
subject to the tax collection requirements of this. Section, an
administrative ruling identifying those telecommunications
services, or charges therefor, that are subject to or not
subject to the Telecommunications Users Tax.
(e) The Telecommunications Users Tax shall be collected
from the Service User by the Service Supplier providing the
Telecommunications Services or its billing agent. The amount of
tax collected in one month shall be remitted by the Service
Supplier or its billing agent to the Tax Administrator on or
before the last day of the following month, unless the due date
occurs on a weekend or a holiday, in which case the tax shall be
remitted on or before the next business day thereafter. The
Telecommunications Users Tax shall be deemed remitted on the
date received by the Tax Administrator, or on the date
postmarked if remitted by first class United States mail with
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postage. fully prepaid. With the prior written approval of the
Tax Administrator, remittance of the Telecommunications Users
Tax may be predicated on a formula based upon the payment
.pattern of the Service Users.
Section 5.119. Video Users Tax. (a) There is hereby
imposed a tax upon every Person using Video Services in the City
hereby called the "Video Users Tax." The Video Users Tax shall
be at the rate of not to exceed 9.8% of the Video Charges made
for such Video Services. The initial rate of the Video Users Tax
shall be established and set forth in a resolution of the City
Council; provided, that, such rate may be subsequently adjusted
pursuant to Section 5.123 of this Article. The Video Users Tax
shall be paid by the Service User paying for such Video
Services. There is a rebuttable presumption that Video Services,
which are billed to a Billing Address or Service Address in the
City, are used, in whole or in part, within the City's
boundaries and that such Video Services are subject to the Video
Users Tax. 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 the Video Users Tax.
(b) The Tax Administrator may issue and disseminate to
Service Suppliers of Video Services that are subject to the tax
collection requirements_ of this Section, an administrative
ruling identifying those video services, or charges, therefor,
that are subject to or not subject to the Video Users Tax.
(c) The Video Users Tax shall be collected from the
Service User by the Service Supplier providing the Video
Services or its billing agent. The amount of tax collected in
one month shall be remitted by the Service Supplier or its
billing agent to the Tax Administrator on or before the last day
of the following month, unless the due date occurs on a weekend
or a holiday, in which case the tax shall be remitted on or
before the next business day thereafter. The Video Users Tax
shall be deemed remitted on the date received by the Tax
Administrator, or on the date postmarked if remitted by first
class United States mail with postage fully prepaid. With the
prior written approval of the Tax Administrator, remittance of
the Video Users Tax may be predicated on a formula based upon
the payment pattern of the Service Users.
Section 5.120. Substantial Nexus; Minimum Contacts. For
purposes of imposing the Utility Users Tax or establishing a
duty to collect and remit the Utility Users Tax under this
Article, "substantial nexus" and "minimum contacts" shall be
construed broadly in favor of the imposition, collection and
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remittance of the Utility Users Tax to the fullest extent
permitted by Federal and State law, and as it may change from
time to time by judicial interpretation or by statutory
enactment. Any Telecommunications 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 a substantial nexus and minimum contacts exists for
purposes of imposing the Telecommunications Users Tax, or
establishing a duty to collect and remit the Telecommunications
Users Tax. A Service Supplier, with respect to any Utility Users
Tax, shall be deemed to have sufficientactivity in the City for
tax collection and remittance purposes if its activities
include, without limitation, (i) maintaining or having within
the City, directly or through an agent or subsidiary, a place of
business of any nature, (ii) soliciting business in the City by
employees, independent contractors, resellers, agents or other
representatives, (iii) soliciting 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 (iv) advertising 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.
Section 5.121. Bundling Taxable Items with Nontaxable
Items. If any nontaxable charges are combined with and not
separately stated from taxable Utility Charges on the Service
User's bill or invoice of a Service Supplier, the combined
charge is subject to the Utility Users Tax unless the Service
Supplier identifies, by reasonable and verifiable standards, the
portions of the combined charges 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. The Service Supplier has the burden of proving
the proper apportionment of taxable Utility Charges and
nontaxable charges. If the Service Supplier offers a combination
of services subject to and not subject to the Utility Users Tax,
and the charges are separately stated, then for taxation
purposes, the values assigned the services subject to and not
subject to the Utility Users Tax 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 the
service subject to and not subject to the Utility Users Tax.
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Section 5.122. Exemptions. (a) Nothing in this Article
shall be construed as imposing a tax upon any Person or Utility
Charges when the imposition of such tax upon such Person or
Utility Charges 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 Utility Users
Tax pursuant to subsection (a) of. this Section shall file an
application with the Tax Administrator for an exemption;
provided, however, that such requirement shall not apply to a
Service User that is a Federal or State agency or subsection of
such agency with a name commonly known to be associated with a
Federal or State agency. 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 Section shall not be
entitled to a refund of taxes 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 5.132 of this Article. Filing' an
application with the Tax Administrator and, appeal to the City
Administrator pursuant to Section 5.132 of this Article is a
prerequisite to a suit thereon.
(c) The City Council may, by ordinance or resolution,
establish one or more classes of Persons or one or more classes
of Utility Charges otherwise subject to payment of the Utility
Users Tax and provide that such classes of Persons or Utility
Charges shall be exempt, in whole or in part, from the Utility
Users Tax for a specified period of time.
Section 5.123. Rate of Utility Users Tax; Termination,
Reduction or Suspension of Utility Users Tax. (a) The City
Council may, by ordinance or resolution, establish and adjust
the rate of the Utility Users Tax; provided, however, that such
rate shall not exceed 9.8%. Upon any such adjustment in tax
rate, the Tax Administrator shall submit, as soon thereafter as
reasonably practicable, written notification to the Service
Suppliers, in accordance with procedures established by the
Service Suppliers, of such adjustment in tax rate. The Service
Suppliers responsible for collecting and remitting the Utility
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Users Tax. shall have a reasonable period of time to implement
such change in tax rate, but in no event to exceed 60 days from
the date of receipt of such written notification or, if 60 days
from the date of receipt of such written notification is not on
the first day of a month, then the first day of the month
following the month in which such 60th day occurs.
(b) The City Council may, by ordinance or resolution,
terminate or suspend the Utility Users Tax. Upon any such
termination or suspension, the Tax Administrator shall submit,
as soon thereafter as reasonably practicable, written
notification to the Service Suppliers, in accordance with
procedures established by the Service Suppliers, of such
termination or suspension. The Service Suppliers responsible for
collecting and remitting the Utility Users Tax shall have a
reasonable period of time to implement such termination or
suspension, but in no event to exceed 60 days from the date of
receipt of such written notification or, if 60 days from the
date of receipt of such written notification is not on the first
day, of a month, then the first day of the month following the
month in which such 60th day occurs.
Section 5.124. Collection Penalties. (a) The Utility Users
Tax collected from a Service User is delinquent and subject to
penalties and interest if not received by the Tax Administrator
on or before the due date as specified in this Article. 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 Article 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 a
Utility Users Tax fails to collect such tax (by failing to
properly assess the tax on one or more Utility Charges on the
customer's billing) or fails to remit such tax collected on or
before the due date, the Tax Administrator shall attach a
penalty for such delinquencies or deficiencies at the rate of
10.0% of the total tax that is delinquent or deficient in the
remittance, and shall pay interest at the rate of 0.5% percent
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) When fraud or gross negligence in reporting or
remitting tax collections is discovered, the Tax Administrator
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shall have the power to impose additional penalties upon the
Persons required to collect and/or remit the Utility Users Tax
at the rate of 10.0% of the total Utility Users Tax that is
delinquent or deficient due to such fraud or gross negligence.
(d) For collection purposes only, every penalty imposed
and interest that is accrued under the provisions of this
Section shall become a part of the Utility Users 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
Article 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.
Section 5.125. Duty to Collect; Procedures. (a) The
Utility Users Tax shall be collected by Service Suppliers
insofar as practicable at the same time as, and together with,
the collection of the Utility Charges made in accordance with
the regular billing practice of the Service Supplier. With
respect to any given billing period, where the amount paid by a
Service User to a Service Supplier is less than the full amount
of the Utility Charges and Utility Users Tax accrued for such
billing period, a proportionate share of both the Utility
Charges and Utility Users Tax shall be deemed to have been paid.
In cases where a Service User has notified the Service Supplier
of refusal to pay the Utility Users Tax imposed on said Utility
Charges, Section 5.128 of this Article shall apply.
(b) The duty of a Service Supplier to collect the Utility
Users Tax from a Service User shall commence with the beginning
of the first regular billing period applicable to the Service
User where all Utility Charges normally included in such regular
billing are subject to the provisions of this Article, in
accordance with Section 5.113 of this Article. 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.
(c) Each Person required to remit a Utility Users 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 Utility Users 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
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Utility Users Tax is being levied, collected and remitted in
accordance with this Article. Returns are due immediately upon
cessation of business for any reason. Pursuant to the Section
7284.6 of the California Revenue and Taxation Code, the Tax
Administrator, and its agents, shall maintain such filing
returns as confidential information that is exempt from the
disclosure provisions of the California Public Records Act.
Section 5.126. Actions to Collect. Any Utility Users Tax
required to be paid by a Service User under the provisions of
this Article 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 Service Supplier 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 Article 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 in this Article, together with any
collection costs incurred by the City as a result of the
Person's noncompliance with this Article, including, but not
limited to, reasonable attorney's fees.. Any Utility Users Tax
required to be collected by a Service Supplier or owed by a
Service User is an unsecured priority tax obligation under 11
U.S.C. Section 507(a)(8).
Section 5.127. 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 a Utility Users Tax has failed to
pay, collect and/or remit the proper amount of such tax by
improperly or failing to apply such tax to one or more taxable
Utility Charges. Nothing herein shall require that the Tax
Administrator institute proceedings under this Section if, in
the opinion of the Tax Administrator, the cost of collection or
enforcement likely outweighs the benefit.
(b) The Tax Administrator shall personally deliver or mail
notice of such deficiency determination to the Person allegedly
owing a Utility Users Tax, which notice shall refer briefly to
the amount of such tax owed, plus interest at the rate of 0.5%
percent per month, or any fraction thereof, on the amount of
such tax from the date on which such tax should have been
received by the City. Within 14 calendar days after the date of
service of such notice, the Person allegedly owing such tax may
request in writing to the Tax Administrator for a hearing on the
matter.
Mf
(c) If the Person allegedly owing a Utility Users Tax
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 such Person requests a hearing, the Tax Administrator shall
cause the matter to be set for hearing, which shall be scheduled
within 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 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
the Person owing the Utility Users Tax (or if no Utility Users
Tax is determined to be owed, to the Person who requested the
hearing). The decision of the Tax Administrator may be appealed
pursuant to Section 5.132 of this Article. Filing an application
with the Tax Administrator and an appeal to the City
Administrator pursuant to Section 5..132 of this Article 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 30th day following the date of receipt of the notice of.
final assessment. The penalty for delinquency shall be 10.00 on
the total amount of the assessment, along with interest at the
rate of 0.5% per month, or any fraction thereof, on the amount
of the delinquent Utility. Users 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 Utility Users Tax shall commence from the date of delinquency
as provided in this subsection.
(f) All notices under this Section may be sent by regular
mail, postage prepaid, and shall be deemed received on the date
established by a proof of delivery.
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Section 5.128. Administrative Remedy; Non -Paying Service
Users. (a) Whenever the Tax Administrator determines that a
Service User has deliberately withheld the amount of the Utility
Users Tax owed by such Service User from the amounts remitted to
a Service Supplier required to collect the Utility Users Tax, or
whenever the Tax Administrator deems it in the best interest of
the City, he or she may relieve such Service Supplier of the
obligation to collect the Utility Users Tax from a certain named
Service User for specific billing periods. To the extent such
Service User has failed to pay the amount of Utility Users Tax
owed for a period of two or more billing periods, the Service
Supplier shall be relieved of the obligation to collect the
Utility Users Tax due; provided, that, the Service Supplier
shall continue to include the Utility Users Tax on any
subsequent bills and invoices to such Service User. The Service
Supplier shall provide the City with the names and addresses of
such Service Users and the amounts of Utility Users Tax owed
under the provisions of this Article. Nothing herein shall
require the Tax Administrator to institute proceedings under
this Section if, in the opinion of the Tax Administrator, the
cost of collection or enforcement likely outweighs the benefit.
(b) In addition to the Utility Users Tax owed, the Service
User shall pay a delinquency penalty at the rate of 10.0% of the
total Utility Users Tax that is owed, and shall pay interest at
the rate of 0.5% per month, or any fraction thereof, on the
amount of the delinquent Utility Users Tax, exclusive of
penalties, from the due date, until paid.
(c) The Tax Administrator shall notify the non-paying
Service User, as such non-paying Service User is determined in
accordance with subsection (a) of this Section, that the. Tax
Administrator has assumed the responsibility to collect the
Utility Users Tax due for the stated periods and demand payment
of such tax, including penalties and interest. The notice shall
be served on the Service User by personal delivery or by first
class United States mail, postage prepaid, addressed to the
Service User at the address to which billing was made by the
Service Supplier required to collect the Utility Users Tax, or,
should the Service User have a change of address, to such
Service User's last known address.
(d) If the Service User fails to remit the Utility Users
Tax to the Tax Administrator within 30 days from the date of the
service of the notice upon him or her pursuant to subsection (c)
of this Section, the. Tax Administrator may impose an additional
penalty of 10.0% of the amount of the total Utility Users Tax
that is. owed.
Section 5.129. Additional Powers and Duties of the Tax
Administrator. (a) The Tax Administrator shall have the power
and duty, and is directed, to enforce each and all of the
provisions of this Article.
(b) The Tax Administrator may adopt administrative rules
and regulations consistent with provisions of this Article for
the purpose of interpreting, clarifying, carrying out and
enforcing the payment, collection and remittance of the Utility
Users Tax. The administrative ruling shall not impose a new tax,
revise an existing tax methodology as stated in this Article, or
increase or extend the existing tax, except as allowed by
Section 53750(h)(2) of the Government Code. A copy of such
administrative rules and regulations shall be on file in the Tax
Administrator's office..
(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 Article and thereby (i) conform to the billing procedures
of a particular Service Supplier so long as said agreements
result in the collection of the Utility Users Tax in conformance
with the general purpose and scope of this Article, or (ii) to
avoid a hardship where the administrative costs of collection
and remittance greatly outweigh the benefit. A copy of each such
agreement shall be on file in the Tax Administrator's office and
are voidable, with due notice given to the applicable Service
Supplier, by the Tax Administrator or the City Council at any
time.
(d) The Tax Administrator may conduct an audit, to ensure
proper compliance with the requirements of this Article, of any
Person required to collect and/or remit a tax pursuant to this
Article. 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 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 5.127 of this Article for the Utility Users Tax (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 Article, the Tax Administrator is
authorized to make a reasonable estimate of the deficiency. Said
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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 Article for a
period of not to exceed 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 0.5% per month, prorated for any
portion thereof.
(f) The Tax Administrator shall determine the eligibility
of any Person who asserts a right to exemption from, or a refund
of, the Utility Users Tax.
(g) Notwithstanding any provision in this Article 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 and./or remit the Utility Users Tax if the
non -collection or non -remittance occurred in good faith: In
determining whether the non -collection or non -remittance was in
good faith, the Tax Administrator shall take into consideration
industry practice or other precedence.
Section 5.130. Records. (a) It is the duty of every
Person required to collect and remit to the City any Utility
Users Tax to keep and preserve, for a periodof three years, all
records necessary to determine the amount of Utility Users Tax.
that Person was obliged to collect and remit to the City. The
Tax Administrator or his or her designee shall have the right to
inspect such records at all reasonable times, including through
the issuance of a subpoena pursuant to State law.
(b) The Tax Administrator is authorized to execute a
nondisclosure agreement approved by the City Attorney to protect
the confidentiality of customer information pursuant to Sections
7284.6 and 7284.7 of the California Revenue and Taxation Code.
(c) If a Service Supplier uses a billing agent or billing
aggregator to bill, collect and/or remit the Utility Users Tax,
the Service Supplier shall (i) 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 Utility Users Tax to the City,
and (ii) upon request of the Tax Administrator, deliver, or
effect the delivery of, any information or records in the
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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 Utility Users Tax to the City.
Section 5.131. Refunds. Whenever the amount of any
Utility Users Tax has been overpaid or paid more than once or
has been erroneously or illegally collected or received by the
Tax Administrator under this Article from a Person or Service
Supplier, it may be refunded as provided in this Section..
(a) The Tax Administrator may refund any Utility
Users 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 Article from any Person;
provided, however, 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 Utility Users 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 subsection.
(b) Pursuant to Section 935 of the Government Code,
the filing of a written claim for a refund pursuant to this
Section is a prerequisite to any suit thereon. The Tax
Administrator, or the City Council where the claim is in
excess of $5,000, shall act upon the refund claim within
the time period set forth in Section 912.4 of the
Government Code. If the Tax Administrator or the City
Council, as applicable, fails or refuses to act on a refund
claim within the time prescribed by Section 912.4 of the
Government Code, the claim shall be deemed to have been
rejected by the City Council on the last day of the period
within which the City Council was required to act upon the
claim as provided in Section 912.4 of the Government Code.
The Tax Administrator shall give notice of its action in a
form which substantially complies with that set forth in
Section 913 of the Government Code.
(c) Notwithstanding the notice provisions of
subsection (a) of this Section, the Tax Administrator may,
at his or her discretion, give written permission to a
A-23
Service Supplier, who has collected and remitted any amount
of Utility Users Tax in excess of the amount of Utility
Users Tax imposed by this Article, to claim credit for such
overpayment against the amount of Utility Users Tax which
is due the City upon a subsequent monthly return(s) to the
Tax Administrator, provided that (i) such credit is claimed
in a return dated no later than one year from the date of
overpayment or erroneous collection of said Utility Users
Tax, (ii) the Tax Administrator is satisfied that the
underlying basis and amount of such credit has been
reasonably established, and (iii) 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.
(d) Notwithstanding subsections (a) through (c) of
this Section, a Service Supplier shall be entitled to take
any overpayment as a credit against an underpayment
whenever such overpayment has been received by the City
within the three years next preceding a deficiency
determination or assessment by the Tax Administrator in
connection with an audit instituted by the Tax
Administrator pursuant to Section 5.129 of this Article. A
Service Supplier shall not be entitled to said credit
unless it clearly establishes the right to the credit by
written records showing entitlement thereto. Under no
circumstances shall an overpayment taken as a credit
against an underpayment pursuant to this subsection qualify
a Service Supplier for a refund to which it would not
otherwise be entitled under the one-year written claim
requirement of this Section.
Section 5.132. Appeals. (a) The provisions of this
Section apply to any decision (other than a decision relating to
a refund pursuant to Section 5.131 of this Article), 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 5.131 of
this Article), 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.
Nothing herein shall permit the filing of a claim or action on
behalf of a class or group of taxpayers.
A-24
(b) If any Person is aggrieved by any decision (other than
a decision relating to a refund pursuant to Section 5.131 of
this Article), deficiency determination, assessment, or
administrative ruling of the Tax Administrator; he or she may
appeal to the City Administrator by filing a notice of appeal
with the City Clerk within 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, which independent hearing officer
shall not be an officer, official or employee of the City,
selected by the City Administrator no more than 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 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 Persons may present any
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 selected
pursuant to subsection (c) of this Section 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 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 90 days from the date of
the decision in accordance with Section 1094.6 of the California
Code of Civil Procedure.
(e) All notices under this Section may be sent by regular
mail, postage prepaid, and shall be deemed received on the date
established by a proof of delivery.
Section 5.133. Jurisdiction of the California Public
Utilities Commission. Nothing contained in this Article is
intended to conflict with tariffs of any Service Supplier
subject to the jurisdiction of the California Public Utilities
Commission or with any applicable rules or regulations of said
commission. In the event any such conflict arises, the
provisions of said rules, regulations and tariffs shall control.
A-25
Section 5.134. Amendment of Ordinance. The City Council
may, by ordinance or resolution, amend, repeal, renumber or
recodify any or all of the provisions of this Article; provided,
however, that no ordinance or resolution extending or increasing
the Utility Users Tax shall be effective unless submitted to,
and approved by, the voters of the City as required pursuant to
the applicable law at the time of such action.
Section 5.135. Future Amendments to Cited Statutes.
Unless specifically provided otherwise, any reference to a
Federal or State statute in this Article shall mean such statute
as it may be amended from time to time.
Section 5.136. Independent Audit of Tax Collection,
Exemption, Remittance and Expenditure. The City shall annually
verify that the Utility Users Tax has been properly applied,
exempted, collected and remitted in accordance with this
Article, 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.
Section 5.137. No Injunction or 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 the City or against any officer of the City to
prevent or enjoin the collection under this Article of any
Utility Users Tax or any amount of Utility Users Tax required to
be collected and/or remitted.
Section 5.138. Remedies Cumulative. All remedies and
penalties prescribed by this Article or which are available
under any other provision of law or equity 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 Article.
Section 5.139. Severability. If, for any reason, any
portion of this Article is found to be invalid by a judicial
court or an administrative body of competent jurisdiction, the
balance of this Article shall not be affected.
A-26
EXHIBIT B
EXHIBIT B
FORM OF NOTICE OF ELECTION, SUMMARY OF THE PROPOSITION
TO BE VOTED ON AND NOTICE TO FILE ARGUMENTS
NOTICE OF ELECTION, SUMMARY OF THE PROPOSITION
TO BE VOTED ON AND NOTICE TO FILE ARGUMENTS
NOTICE IS HEREBY GIVEN to the voters of the City of Vernon
(the "City"), that in accordance with the provisions of the
California Constitution, the California Government Code, the
Code of the City and other applicable law, a special municipal
all mailed ballot election will be held in the City on Tuesday,
the 18th day of September, 2012, for the purpose of submitting
to the voters of the City the proposition summarized as follows:
Shall the City of Vernon be authorized .to
levy a utility users tax to fund general
government purposes at the rate of not to
exceed 9.8% of utility charges for
electricity, gas, telecommunications, video
and water utility services provided in the
City of Vernon for a period of two years,
commencing in fiscal year 2012-13, all as
further described in Ordinance No. 1196
adopted on June 19, 2012?
Arguments for and against this proposition may be submitted
with the City Clerk of the City at 4305 South Santa Fe Avenue,
Vernon, California 90058 so long as such arguments are received
on or by 5:00 p.m. on July 3, 2012. Arguments so submitted must
not exceed 300 words and must not be signed by more than five
persons.
IN WITNESS WHEREOF, I have hereunto set my hand this day,
June , 2012.
Willard G. Yamaguchi, City Clerk
M
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: June 21, 2012
TO: Mark Whitworth, City Administrator/Fire Chief
FROM: Willard Yamaguchi, City Clerk/Chief Deputy City Attorney
RE: Ordinance No. 1196 — An Ordinance of the City Council of the City of Vernon Declaring
an Emergency and Establishing a Date for a Special Election to Submit to the Voters of
the City a Proposition to Levy a Utility Users Tax, Establishing Procedures in Connection
With Such Election, Adding Article VII to Chapter 5 of the Code of the City of Vernon to
Codify Such Utility Users Tax Upon Approval of Such Proposition by Such Voters,
Establishing Procedures for the Levy and Collection of Such Utility Users Tax Upon Such
Approval, and Other Related. Matters
Transmitted herewith is a copy of Ordinance No. 1196 referenced above, which was approved by City
Council on June 19, 2012.
Thank you.
WY:dj
Attachment
c: Ana Barcia
Kristen Enomoto
Ordinance No. 1196
aw��
evi/66
RECEIVE®
JUN 1'4 2012 STAFF REPORT
CITY CLERK'S OFFICE CITY ADMINISTRATION
DATE: June 13, 2012
TO: Honorable City Council
FROM: Mark. C. Whitworth, City Administrator '
RE: Utility Users Tax Special Election
Background
The City of Vernon (the "City") has suffered decline in amounts available for general fund
expenditures and a depletion of its reserve funds due to numerous causes, including but not limited to (i)
increased expenditures, (ii) the recession, (iii) substantially reduced economic activity during the last
several years, (iv) recent legislation dissolving the Vernon Redevelopment Agency, and (v) reductions
in transfers from the City's Light and Power Department. The City currently projects a $12 million
general fund deficit in fiscal year 2012-13 and general fund deficits for the next several fiscal years.
[Immediate action is necessary to obtain an additional source of revenue for fiscal year 2012-13 if the
City is to avoid major cuts to its various municipal services and projects].
The attached ordinance provides for a utility users tax, which would be an additional source of
general fund revenue for the City. Specifically, the attached ordinance declares an emergency and
orders a special election on September 18, 2012 (the "Special Election"), at which there would be
submitted to the voters of the City a proposition (the "Proposition") to levy a utility users tax on most
utilities in the City, including electricity, gas, telecommunications, video and water utilities at the rate of
not to exceed 11 % (the "Utility Users Tax"). The attached ordinance also provides for other procedures
and matters relating to the Special Election, the Proposition and the Utility Users Tax.
Analysis
The Utility Users Tax. The City projects a $12 million general fund deficit for fiscal year 2012-
13. Without an additional source of revenue for fiscal year 2012-13, the City projects that it will need to
implement cuts for major municipal services and projects.
In order to avoid such cuts, the City will need to obtain an additional source of revenue for fiscal
year 2012-13. If the Proposition is approved by a majority of the voters at the Special Election and the
Utility Users Tax is enacted at a rate of 11.0%, the Utility Users Tax would provide the City with
approximately $12 million in general fund revenues in fiscal year2012-13. The Utility User Tax would
be capped at $250,000 for electricity, water and natural gas.
Pursuant to subsection (b) of Section 2 of Article XIIIC of the California Constitution and
Section 53720 et. seq. of the California Government Code, the Utility Users Tax would not take effect,
and the Utility Users Tax would not be levied, unless and until the Proposition is approved by a majority
of the votes cast by the voters of the City voting at the Special Election.
Special Election. Pursuant to subsection (b) of Section 2 of Article XIIIC of the California
Constitution, the City must wait until the City's next general election for members of the City Council,
which is in April 2013, to seek approval by the voters of the City of a new general tax, such as the
Utility Users Tax, unless the City Council unanimously declares an emergency.. The attached ordinance
declares an emergency and, if unanimously approved by the City Council, would authorize the City
Council to order the Special Election and to submit the Proposition to the voters of the City at such
Special Election.
Other Matters. The attached Ordinance also sets forth various procedures and other matters
relating to the Special Election, the Proposition and the Utility Users Tax. Among other things, the
attached Ordinance provides that the Special Election be conducted as an all mailed ballot election
pursuant to Section 4000 et. seq. of the California Elections Code and Chapter 5.3 of the Charter of the
City. Conducting the Special Election as an all mailed ballot election would allow the City to reduce
election costs and increase voter participation. The attached Ordinance also designates the City Clerk of
the City to act as the elections official for the Special Election and to conduct the Special Election as
provided by law.
Procedures
If the City Council desires to order the Special Election and to submit the Proposition to the
voters of the City at such Special Election, the attached ordinance must be unanimously approved by the
City Council. If the attached ordinance is not so unanimously approved, the City Council would not be
authorized to order the Special Election.
If the attached ordinance is unanimously approved, the Proposition would be submitted to the
voters of the City at the Special Election. The Special Election is to be held and conducted as provided
by state law for the holding of a special municipal all mailed ballot election in the City, except as
otherwise provided in the attached ordinance or any other City Council ordinance or resolution
pertaining to the Special Election. The elections official would be responsible for seeing that the Special
Election is conducted as provided by law, including the provision of all requisite publication and notice.
At the next regular meeting of. the City Council occurring after the returns of the Special Election
have been canvassed and certified by the elections official, the City Council would need to adopt a
resolution reciting the fact of the Special Election and a statement of the results of the Special Election.
If the Proposition is approved by a majority of the votes cast by the voters of the City voting at the
Special Election, the Utility Users Tax would take effect upon the adoption of such resolution.
Recommendation
It is recommended that the City Council adopted the attached ordinance at its June 19s' City
Council meeting.
PA
Staff Report
City Attorney's Office
DATE: July 3, 2012
TO: City Clerk File
FROM: Willard G. Yamaguchi, Chief Deputy City Attorney
RE: September 18, 2012 Special Election
Impartial Analysis of Proposition A
REc�sV� p
JUL 03 812
CITMERK'SOFFICE
Attached herewith is the City Attorney Impartial Analysis of Proposition A for the September
18, 2012 Special Election.
Attachment
OFFICE OF THE CITY ATTORNEY
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
IMPARTIAL ANALYSIS FROM CITY ATTORNEY
Proposition A seeks approval of a majority of the voters of the City of Vernon (the
"City") to impose a utility users tax at a rate of not to exceed 9.8% of utility charges on
electricity services, gas services, telecommunications services, video services and water services
provided in the City (the "UUT"), all as further described in Ordinance No. 1196 of the City.
The UUT would be a general tax and, as such, must be approved by a simple majority of
the voters of the City voting on the Proposition. The proceeds of the UUT, as a general tax,
would be deposited in the General Fund of the City and used for general governmental purposes.
The City currently does not impose a utility users tax on any utility services provided in the City
and the UUT, if so approved, would be the first utility users tax imposed by the City.
The UUT, if so approved, would automatically expire two years after it becomes
effective. The initial tax rate of the UUT is to be established and set forth in a resolution of the
City Council of the City. The City Council of the City may adjust the tax rate of the UUT while
the UUT is in effect; provided that, the tax rate does not exceed 9.8%. As further described in
Ordinance No. 1196, the UUT specifies collection procedures for taxes, penalties and interest on
delinquent taxes, appeal procedures for disputed taxes and refund procedures for overpaid taxes.
The Finance Director of the City, or his appointed designee, would be responsible for the general
administration and enforcement of the UUT. The application, collection and remittance of the
UUT are to be annually reviewed and verified by a qualified independent third party.
The UUT may be not extended and the UUT tax rate may not be increased above 9.8%
without approval by a majority of the voters of the City.
A "yes" vote on the Proposition. is a vote to approve the UUT. A "no" vote on the
Proposition is a vote not to approve the UUT.
The above statement is an impartial analysis of Proposition A and the proposed
UUT as further described in Ordinance No. 1196. If you desire a copy of Ordinance No.
1196, please contact the City Clerk's office at 4305 South Santa Fe Avenue, Vernon,
California 90058, or via telephone at (323) 583-8811, extension 175, and a copy of
Ordinance No. 1196 will be mailed to you at no cost to you.
�J( y
Date