ORDINANCE 1116I
ORDINANCE NO. 1116
AN ORDINANCE OF THE CITY OF EL SEGUNDO,
CALIFORNIA, ESTABLISHING A UTILITY USERS TAX.
THE ELECTORATE OF THE CITY OF EL SEGUNDO DOES ORDAIN AS
FOLLOWS:
SECTION 1. The E1 Segundo Municipal Code is hereby amended
by adding a new Chapter 3.24 to read as follows:
"Title 3
Revenue and Finance
Chapter 3.24
Utility Users Tax
3.24.010: Definitions. The following words and phrases
whenever used in this ordinance shall be construed as defined in
this section.
(a) "Person" shall mean any commercial or industrial
utility user conducting business as described in Chapter 5.08,
Business License Schedule, Sections: 5.08.020, 5.08.078,
5.08.080, 5.08.090, 5.08.140, 5.08.150, 5.08.170, 5.08.180,
5.08.190, 5.08.195, 5.08.220, 5.08.236, 5.08.240, 5.08.360,
5.08.370, 5.08.420, 5.08.440, 5.08.490, 5.08.510, 5.08.520,
5.08.5700, 5.08.580, 5.08.585, 5.08.590, 5.08.600, 5.08.640,
5.08.665, and 5.08.670, of the E1 Segundo Municipal Code.
(b) "City" shall mean the City of E1 Segundo.
(c) "Electrical corporation ", "gas corporation ", and "water
corporation" shall have the same meaning as defined in Sections
218, 222, and 241, respectively, of the Public Utilities Code of
the State of California as said sections existed on January 1,
1975, except "electrical corporation" shall be construed to
include any municipality, franchised agency, or cogenerator
engaged in the selling or supplying of electrical power to a
service user.
(d) "Tax Administrator" shall mean the Finance Director of
the City of E1 Segundo.
(e) "Service supplier" shall mean any entity which receives
taxes paid and remits same as imposed by this ordinance.
(f) "Service user" shall mean a person required to pay a
tax imposed by this ordinance.
(g) "Month" shall mean a calendar month.
(h) " Cogenerator" shall mean any corporation or person
employing cogeneration technology for producing power from other
than a conventional power source for the generation of
electricity for sale to others.
3.24.020: Exemptions. Nothing in this ordinance, shall be
construed as imposing a tax upon any person when imposition of
such tax upon that person would be in violation of the constitu-
tion of the United States or that of the State of CalifOrnia or
upon the City or any of its departments, agencies, boards or
commissions or upon the E1 Segundo Unified School District,
Centinela Valley Union High School District and the Wiseburn
School District, or upon any other person when imposition of such
tax upon that person would be in violation of the Constitution of
the United States or the Constitution of the State of California.
The Tax Administrator shall prepare a list of the persons exempt
from the provisions of this Chapter by virtue of this section and
furnish a copy thereof to each service supplier.
3.24.030: Electricity Users Tax.
(a) There is hereby imposed a tax upon every person in the
City using electrical energy in the City. The tax imposed by
this section shall be at the rate of two percent (2%) of the
charges made for such energy and shall be paid by the person
paying for such energy. "Charges ", as used in this section,
shall include charges made for: (1) metered energy, and (2)
minimum charges for service, including customer charges, service
charges, demand charges, standby charges and annual and monthly
charges, fuel, cost adjustments, etc.
(b) As used in this section, the term "using electrical
energy" shall not be construed to mean the storage of such energy
by a person in a battery owned or possessed by him for use in an
automobile or other machinery or device apart from the premises
upon which the energy was received, provided however, that the
term shall include the receiving of such energy for the purpose
of using it in the charging of batteries; nor shall the term
include electricity used and consumed by an electric utility
supplier in the conduct of its business as an electric public
utility; nor shall the term include the mere receiving of such
energy by an electric public utility or governmental agency at a
point within the City of E1 Segundo for resale; or the use of
such energy in the production or distribution of water by a
public utility or a governmental agency.
(c) The tax imposed by this section shall be collected from
the service user by the person providing such energy. The amount
of the tax collected in one (1) month shall be remitted to
the Tax Administrator on or before the last day of the following
month. Remittance of tax may be predicated on a formula based
upon the payment pattern of the supplier's customer.
3.24.040: Gas Users Tax.
(a) There is hereby imposed a tax upon every person in the
City other than a gas corporation or electrical corporation,
using in the City, gas which is delivered through mains or pipes.
The tax imposed by this section shall be at the rate of two
percent (2 %) of the charges made for such gas and shall be paid
by the person paying for such gas. "Charges ", as used in this
section, shall include: (1) gas which is delivered through mains
or pipes; (2) minimum charges for services, including customer
charges, service charges, and annual and monthly charges.
(b) There shall be excluded from the base on which the tax
imposed in this section is computed: (1) charges made for gas
which is to be resold and delivered through mains or pipes; (2)
charges made for gas sold for use in the generation of electrical
energy or for the production or distribution of water by a public
utility or governmental agency; (3) charges made by a gas public
utility for gas used and consumed in the conduct of the business
of gas public utilities; (4) charges made for gas used in the
propulsion of a motor vehicle, as that phrase is defined in the
Vehicle Code of the State of California, utilizing natural gas;
and (5) charges related to late payments and returned checks.
(c) The tax imposed by this section shall be collected from
the service user by the person selling the gas. The person
selling the gas shall, on or before the 20th of each calendar
month, commencing on the 20th day of the calendar month after the
effective date of this part, make a return to the Tax
Administrator stating the amount of taxes billed during the
preceding calendar month. At the time such returns are filed,
the person selling the gas shall remit tax payments to the Tax
Administrator in accordance with schedules established or
approved by the Tax Administrator.
3.24.050: Water Users Tax.
(a) There is hereby imposed a tax upon every person in the
City using water which is delivered through mains or pipes. The
tax imposed by this section shall be at the rate of two percent
(2 %) of the charges made for such water and shall be paid by the
person paying for such water.
(b) There shall be excluded from the base on which the tax
imposed in this section is computed charges made for water which
is to be resold and delivered through mains or pipes; and charges
made by a municipal water department, public utility or a county
or municipal water district for water used and consumed by such
department, utility or district.
(c) The tax imposed by this section shall be collected from
the service user by the person selling the water. The amount
collected in one (1) month shall be remitted to the Tax
Administrator on or before the last day of the following month.
3.24.060: Reporting and Remitting. Each service supplier
shall, on or before the last day of each month, make a return to
the Tax Administrator on forms provided by him, stating the
amount of taxes billed by the service supplier during the
preceding month, except as provided in section 3.24.040 (c) of
this chapter. At the time the return is filed, the full amount
of the tax collected shall be remitted to the Tax Administrator.
The Tax Administrator is authorized to require such further
information as he deems necessary to determine if the tax imposed
hereby is being levied and collected in accordance with this
chapter.
3.24.070: Interest and Penalty.
(a) Taxes collected from a service user which are not
remitted to the Tax Administrator on or before the due dates
provided in this ordinance are delinquent. Should the due date
occur on a weekend or legal holiday, the return may be postmarked
the first regular working day following a Saturday/ Sunday, or
legal holiday.
(b) Penalties for delinquency in remittance of any tax
collected or any deficiency determination pursuant to this
chapter shall attach to, and be paid by, the person required to
collect and remit at the rate of fifteen percent of the total tax
collected or imposed by this chapter.
(c) The Tax Administrator is hereby empowered to impose
additional penalties upon persons required to collect and remit
taxes under the provisions of this chapter for fraud or
negligence in reporting or remitting at the rate of fifteen
percent of the amount of the tax collected or as recomputed by
the Tax Administrator.
(d) Every penalty imposed under the provisions of this
section shall become a part of the tax required to be remitted.
3.24.080: Actions to Collect. Any such tax received froma
service user which has willfully been withheld from the Tax
Administrator shall be deemed a debt owed to the City by the
person required to collect and remit. Any person holding such
money contrary to the provisions of this ordinance shall be
liable to an action brought in the name of the City for the
recovery of such amount.
3.24.090: Duty to Collect - Procedures. The duty to
collect and remit the taxes imposed by this ordinance shall be
performed as follows:
(a) Notwithstanding the provisions of section 3.24.040 (c),
the tax shall be collected insofar as practicable at the same
time as and along with the charges made in accordance with the
regular billing practices of the service supplier. Where the
amount paid by a service user to a service supplier is less than
the full amount of the energy charge and tax which has accrued
for the billing period, such amount and any subsequent payments
by a service user shall be applied to the utility charge first
until such charge has been fully satisfied. Any remaining
balance shall be applied to taxes due. In those cases where a
Service user has notified the service supplier of his refusal to
pay the tax imposed on said energy charges section 3.24.110 (c)
will apply.
(b) The duty to collect tax from a service user shall
commence with the beginning of the first full regular billing
period applicable to the service user where all charges normally
included in such regular billing are subject to the provisions of
this ordinance. Where a person receives more than one billing,
one or more being for different periods than another, the duty to
collect shall arise separately for each billing.
3.24.100: Additional Power and Duties of Tax Administrator
(a) The Tax Administrator shall have the power and duty,
and is hereby directed to enforce each and all of the provisions
of this ordinance.
(b) The Tax Administrator shall have the power to adopt
rules and regulations not inconsistent with provisions of this
ordinance for the purpose of carrying out and enforcing the pay-
ment, collection and remittance of the taxes herein imposed. A
copy of such rules and regulations shall be on file in the Tax
Administrator's office.
(c) The Tax Administrator may make administrative
agreements to vary the strict requirements of this ordinance so
that collection of any tax imposed here may be made in
conformance with the billing procedures of particular service
supplier so long as said agreements result in collection of the
tax in conformance with the general purpose and scope of this
ordinance. A copy of each such agreement shall be on file in the
Tax Administrator's office.
(d) The Tax Administrator shall determine the eligibility
of any person who asserts a right to exemption from the tax
imposed by this ordinance. The Tax Administrator shall provide
the service supplier with the name of any person who the Tax
Administrator determines is exempt from the tax imposed hereby,
together with the address and account number to which service is
supplied to any such exempt person. The Tax Administrator shall
notify the service supplier of the termination of any person's
right to exemption hereunder, or the change of any address to
which service is supplied to any exempt person.
3.24.110: Assessment - Administrative Remedy.
(a) The Tax Administrator may make an assessment for taxes
not remitted by a person required to remit.
(b) Whenever the Tax Administrator determines that a
service user has deliberately withheld the amount of the tax owed
by him from the amounts remitted to a person required to collect
the tax, or that a service user has refused to pay the amount of
tax to such person, or whenever the Tax Administrator deems it in
the best interest of the City, he may relieve such person of the
obligation to collect taxes due under this ordinance from certain
named service users for specified billing periods.
(c) The service supplier shall provide the City with
amounts refused and /or unpaid along with the names and addresses
of the service users neglecting to pay the tax imposed under pro-
visions of this ordinance. Whenever the service user has failed
to pay the amount of tax for a period of two or more billing
periods, the service supplier shall be relieved of the obligation
to collect taxes due.
(d) The Tax Administrator shall notify the service user
that he has assumed responsibility to collect the taxes due for
the stated periods and demand payment of such taxes. The notice
shall be served on the service user by handing it to him
personally or by deposit of the notice in the United States mail,
postage prepaid thereon, 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 changed his
address, to his last known address. If a service user fails to
remit the tax to the Tax Administrator within fifteen (15) days
from the date of the service of the notice upon him, which shall
be the date of mailing if service is not accomplished in person,
a penalty of twenty -five percent (25 %) of the amount of the tax
set forth in the notice shall be imposed, but not less than
$5.00. The penalty shall become part of the tax herein required
to be paid.
3.24.120: Records. It shall be the duty of every person
required to collect and remit to the City any tax imposed by this
ordinance to keep and preserve, for a period of three (3) years,
all records as may be necessary to determine the amount of such
tax as he may have been liable for the collection of a remittance
to the Tax Administrator, which records the Tax Administrator
shall have the right to inspect at all reasonable times.
3.24.130: Refunds.
(a) Whenever the amount of any tax has been overpaid or
paid more than once or has been erroneously or illegally
collected or received by Tax Administrator under this ordinance,
it may be refunded as provided in subsections (b) and (c) of this
section, provided a claim in writing therefor, stating under
penalty of perjury the specific grounds upon which the claim is
founded, is filed with the Tax Administrator within three years
of the date of payment. The claim shall be on forms furnished by
the Tax Administrator.
(b) Notwithstanding the provisions of subsection (a) of
this section, a service supplier may claim a refund or take as
credit against taxes collected and remitted the amount overpaid,
paid more than once, or erroneously or illegally collected or
received when it is established that the service user from whom
the tax has been collected did not owe the tax; provided,
however, that neither a refund nor a credit shall be allowed
unless the amount of the tax so collected has either been
refunded to the service user or credited to charges subsequently
payable by the service user to the person required to collect and
remit. A service supplier that has collected any amount of tax
in excess of the amount of tax imposed by this ordinance and
actually due from a service user, may refund such amount to the
service user and claim credit for such over- payment against the
amount of tax which is due upon any other monthly returns,
provided such credit is claimed in a return dated no later than
three (3) years from the date of overpayment.
(c) No refund shall be paid under the provisions of this
section unless the claimant establishes his right thereto by
written records showing entitlement thereto.
(d) Notwithstanding other provisions of this section,
whenever a service supplier, pursuant to an order of the
California Public Utilities Commission or a court of competent
jurisdiction, makes a refund to service users of charges for past
utility services, the taxes paid pursuant to this ordinance on
the amount of such refunded charges shall also be refunded to
service users, and the service supplier shall be entitled to
claim a credit for such refunded taxes against the amount of tax
which is due upon the next monthly returns. In the event this
ordinance is repealed, the amounts of any refundable taxes will
be borne by the City.
(e) A service supplier may refund the taxes collected to
the service user in accordance with this section or by the
service supplier's customary practice.
3.24.140: Reduction of utility Users Tax Based on Sales Tax
Receipts. Whenever in this Title a utility users tax is imposed
on any person subject to the utility users tax, the amount of the
utility users tax shall be reduced proportionately whenever the
preceding fiscal year exceeds the limit determined by the formula
in subsection (a) of this section.
(a) The sales tax limit which will trigger a reduction in
the utility users tax shall be equal to eighty percent of the
sales tax revenue received in the 1979 -80 fiscal year multiplied
by the appropriations limit established annually since 1980 - 81
under the provisions of Article XIIIB of the California
constitution.
(b) In any year in which sales tax revenue exceeds the
limit established in subsection (a) of this section, the utility
users tax imposed the following July 1, shall be reduced by the
percentage that revenue exceeds the limit.
3.24.150: Utility Users Account. The Tax Administrator
shall establish a "Utility Users Tax Account" within the General
Fund and shall place therein any and all taxes collected under
this ordinance which are in excess of the amounts needed to
balance the adopted General Fund budget during any one fiscal
year.
3.24.160: Annual Review.
(a) Each year in conjunction with the annual budget
deliberations and prior to September 30, the City Council shall
reconsider the provisions and rate of the utility users tax as
well as any taxes that may have been placed in the utility users
tax account as provided in 3.24.150 during the preceding and
current fiscal years. Notwithstanding the provisions of section
3.24.140, the Council may reduce or suspend all or a part of the
tax rate for the current fiscal year; or may provide no tax on
one or more utilities for the current fiscal year.
(b) The City will give the service supplier at least one
month's notification prior to any requested change in the utility
users tax percentage."
SECTION 2: Severability. If any section, subsection,
subdivision, paragraph, sentence, clause or phrase of this
ordinance or any part thereof is for any reason held to be
unconstitutional, such decision shall not affect the validity of
the remaining portion of this ordinance or any part thereof. The
City Council hereby declares that it would have passed each
section, subsection, subdivision, paragraph, sentence, clause or
phrase thereof, irrespective of the fact that any one or more
sections, subsections, subdivisions, paragraphs, sentences,
clauses or phrases be declared unconstitutional.
SECTION 3: Operative Date. This ordinance shall become
effective the day it is adopted by the electorate. The tax
imposed under this ordinance shall apply to services furnished
from the beginning of the first regular billing period commencing
on or after the day this ordinance is adopted by the electorate
or as soon thereafter as the respective utilities are physically
and mechanically able to get "on line" for the imposition of
charges (not less than 60 days).
SECTION 4. Sunset Clause. This ordinance shall become
void, and be of no further force or effect, beginning with the
fiscal year July 1, 1991.
ADOPTED BY THE ELECTORATE AT THE GENERAL MUNICIPAL ELECTION
HELD APRIL 12, 1988.
RONALD L. HART, CMC, CITY CLERK CITY OF EL SEGUNDO
CARL JACOBSON,MAYOR CITY OF EL SEGUNDO