ORDINANCE 1325ORDINANCE NO. 112 S
AN ORDINANCE OF THE PEOPLE OF THE CITY OF
EL SEGUNDO, CALIFORNIA, AMENDING CHAPTER
3.24, ENTITLED "UTILITY USERS TAX," BY ADDING
SECTION 3.24.125, ENTITLED "VIOLATION OF
RECORDS REQUIREMENT; PENALTY,"
SUBSECTION (F), TO SECTION 3.24.130, ENTITLED
"REFUNDS," AND SECTION 3.24.170, ENTITLED
"APPEALS
THE CITY COUNCIL OF THE CITY OF EL SEGUNDO ORDAINS AS
FOLLOWS:
Section 1. Chapter 3.24, entitled "UTILITY USERS TAX" of Title 3 of the
El Segundo Municipal Code is hereby amended by adding Section 3.24.125, entitled
"VIOLATION OF RECORDS PROVISION; PENALTY" to read as follows:
"3.24.125 VIOLATION OF RECORDS
REQUIREMENT; PENALTY. If any person subject to
record - keeping under this Chapter unreasonably denies the
Tax Administrator, or the Tax Administrator's designated
representative, access to such records, the person
unreasonably denying access shall be subject to a penalty
of five hundred dollars ($500) for each violation. The
person shall be guilty of a separate offense for each and
every day during any portion of which denial of access is
committed, continued or permitted by such person. This
penalty shall be in addition to any other penalty imposed
under this Code."
Section 2. Chapter 3.24, entitled "UTILITY USERS TAX" of Title 3 of the
El Segundo Municipal Code is hereby amended by adding subsection (f) to Section
3.24.130, entitled "REFUNDS" to read as follows:
"(f) Nothing herein shall permit the filing of a claim on
behalf of a class or group of taxpayers."
Section 3. Chapter 3.24, entitled "UTILITY USERS TAX" of Title 3 of the
El Segundo Municipal Code is hereby amended by adding Section 3.24.170, entitled
"APPEALS" to read as follows:
ORDINANCE NO. 1325
UTILITY USERS TAX
PAGE NO. 1
"3.24.170 APPEALS.
A. If the service user or service supplier is
aggrieved by any decision or administrative ruling of the
Tax Administrator, or with the failure to grant a refund or
exemption as provided for under Chapter 3.24 of the El
Segundo Municipal Code, he may appeal to the City
Manager, or his or her duly authorized designee, by filing a
notice of appeal with the City Clerk within fourteen (14)
days of the decision or administrative ruling which
aggrieved the service user or service supplier. The City
Clerk shall thereupon fix a time and place for a hearing of
such appeal. The City Clerk shall give notice to such
person of the time and place of hearing as herein provided.
B. The decision of the City Manager, or his or
her duly authorized designee, shall be final unless appealed
to the City Council, in the manner provided for in this
subsection, no later than ten calendar days after the date of
the decision.
(1) The Notice of appeal shall contain
the name and address of the person appealing the action,
the decision appealed from and the grounds for the appeal.
A defect in the form of the notice does not affect the
validity or right to an appeal. The notice of appeal shall be
accompanied by the fee fixed by resolution of the City
Council.
(2) A City Council member may appeal
a decision of the City Manager. The appeal shall be
processed in the same manner as an appeal by any other
person but need not be accompanied by the fee prescribed
for an appeal. The City Council member appealing the
decision is not disqualified by that action from participating
in the appeal hearing and the deliberations nor from voting
as a member of the City Council.
(3) The City Clerk shall set the matter
for hearing before the City Council and shall give notice of
the hearing on the appeal.
ORDINANCE NO. 1325
UTILITY USERS TAX
PAGE NO.2
(4) The City Council shall hear the
appeal as a new matter. The original applicant has the
burden of proof. The City Council may reverse or affirm
the City Manager's decision in whole or in part, or may
modify the decision that is being appealed, irrespective of
the precise grounds or scope of the appeal. In addition to
considering the testimony and evidence presented at the
hearing on the appeal, the City Council shall consider all
pertinent information from the file as a result of the
previous actions from which the appeal is taken.
C. No injunction or writ of mandate or other
legal or equitable process shall issue in any suit, action, or
proceeding in any court against this City or against any
officer of the City to prevent or enjoin the collection under
Chapter 3.24 of the El Segundo Municipal Code of any tax
or any amount of tax required to be collected and/or
remitted."
Section 4. 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.
Section 5. The City Clerk shall certify to the passage and adoption of this
Ordinance and enter it into the book of original Ordinances.
Section 6. The City Clerk shall publish or post the ordinance according to
law.
ORDINANCE NO. 1-12 5
UTILITY USERS TAX
PAGE NO. 3
PASSED, APPROVED AND ADOPTED this 19tday of September 2000.
Mike Gordon, Mayor
ATTEST:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF EL SEGUNDO )
I, Cindy Mortesen, City Clerk of the City of El Segundo, California, do
hereby certify that the whole number of members of the City Council of said City
is five; that the foregoing Ordinance No. 1325 was duly introduced by said
City Council at a regular meeting held on the 5th day of September 2000,
and was duly passed and adopted by said City Council, approved and signed by
the Mayor, and attested to by the City Clerk, all at a regular meeting of said
Council held on the 19th day of _September 2000, and the same was so
passed and adopted by the following vote:
AYES: Gordon, Jacobs, Gaines, McDowell, Wernick
NOES: None
ABSENT: None
ABSTAIN: None
NOT PARTIC7/hz�--
: None
yrd-ldy Mo "s6, C' y Clerk
APPROVED AS TO FORM:
ark D. H sley, City Aft6rKey
ORDINANCE NO. 1325
UTILITY USERS TAX
PAGE NO. 4
CITY OF EL SEGUNDO
COMMERCIAL AND INDUSTRIAL UTILITY USERS TAX
ADMINISTRATIVE REGULATIONS
AND
ADMINISTRATIVE RULES
ARTICLE I. ADMINISTRATIVE REGULATIONS
Pursuant to Section 3.24. 100 of the City of El Segundo ( "City ") Commercial and
Industrial Utility Users Tax ( "UUT ") Ordinance, the Tax Administrator has the power
and duty to (i) enforce each and all of the provisions of the UUT Ordinance, and (ii)
adopt rules and regulations not inconsistent with the provisions of the UUT Ordinance for
the purpose of carrying out and enforcing the payment, collection and remittance of the
taxes imposed therein. In accordance therewith, the Tax Administrator has promulgated
the administrative regulations set forth hereinbelow. These administrative regulations are
clarifications of the City's existing UUT Ordinance, and do not impose a new tax, revise
an existing tax methodology, or increase an existing tax. The City will attempt to give
interested parties 30 days prior written notice of any proposed revisions to these
regulations, or if the Tax Administrator issues a new administrative ruling. All revisions
to these regulations must be approved by the City Council.
I. Definitions
Except where the context otherwise requires, the definitions set forth herein shall
govern the application and interpretation of these administrative regulations.
A. Billing Address. "Billing Address" shall mean the mailing address of the
service user where the service supplier submits invoices or bills for payment by the
customer.
B. Cam. "City" shall mean the City of El Segundo.
C. Charges. As used in Section 3.24.030(a), 3.24.040(a), 3.24.050(a), and
3.24.055(a) of the UUT Ordinance, the term "charges" shall also include the value of any
other services, credits, property of every kind or nature, or other consideration provided
by the service user in exchange for the electricity, gas, water or telecommunications
services.
D. Non - Utility Service Supplier. "Non- Utility Service Supplier" shall mean:
(1) A service supplier, other than a supplier of electric distribution
services to all or a significant portion of the City, which generates electricity for sale to
others, and shall include but is not limited to any publicly -owned electric utility, investor -
owned utility, cogenerator, distributed generation provider, exempt wholesale generator,
municipal utility district, federal power marketing agency, electric rural cooperative, or
other supplier or seller of electricity;
(2) An electric service provider ( "ESP "), electricity broker, other than
a supplier of gas distribution services to all or a significant portion of the City, which
sells or supplies electricity or supplemental services to electricity users within the City;
and
(3) A gas service supplier, aggregator, marketer or broker, other than a
supplier of gas distribution services to all or a significant portion of the City, which sells
or supplies gas or supplemental services to gas users within the City.
E. Service Address. "Service Address" shall mean the street address of the
service user's primary place of usage.
F. Service Supplier. In addition to the definition stated in Section
3.24.010(d) of the UUT Ordinance, the term "service supplier" shall include any entity or
person required to collect, or self - collect under Section V of these Administrative
Regulations, and remit a tax, including its billing agent in the case of electric, gas, or
water service suppliers.
G. Telephone Communication Services. As used in Section 3.24.055 of the
UUT Ordinance, the term "Telephone Communication Services" shall mean
"communications services" as defined in Sections 4251 and 4252 of the Internal Revenue
Code, and the regulations thereunder, and shall include any telephonic quality
communication for the purpose of transmitting messages or information (including but
not limited to voice, telegraph, teletypewriter, data, facsimile, video, or text) by
electronic, radio or similar means through "interconnected service" with the "public
switched network" [as these terms are commonly used in the Federal Communications
Act and the regulations of the Federal Communications Commission — see 47 U.S.C.A.
Section 332(d)], whether such transmission occurs by wire, cable, fiber - optic, light wave,
laser, microwave, radio wave [including, but not limited to, cellular service, commercial
mobile service, personal communications service (PCS), specialized mobile radio (SMR),
and other types of mobile telecommunications regardless of radio spectrum used],
switching facilities, satellite or any other similar facilities. The term "telephone
communication services" shall not include "private mobile radio service" [as defined in
Part 20 of Title 47 of the Code of Federal Regulations] or "private mobile service" [as
defined in 47 U.S.C.A. Section 332(d)] which is not interconnected to the public
switched network. The tax imposed under section 3.24.055(a) of the UUT Ordinance
shall not be imposed upon any person for using telephone communication services to the
extent that, pursuant to Sections 4252 and 4253 of the Internal Revenue Code, the
amounts paid for such communication services are not subject to or are exempt from the
tax imposed under Section 4251 of the Internal Revenue Code. In the event that the
federal excise tax on "communication services" as provided in Sections 4251, 4252 and
4253 of the Internal Revenue Code is subsequently repealed, any reference in the UUT
Ordinance or in these administrative regulations to such law, including any related
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federal regulations, private letter rulings, case law, and other opinions interpreting these
sections, shall refer to that body of law that existed immediately prior to the date of
repeal, as well as to any judicial or administrative decision interpreting such federal
excise tax law which is published or rendered after the date of repeal.
II.
Exemptions.
A. Nothing in Chapter 3.24 of the Code shall be construed as imposing a tax
upon the City or any of its departments, agencies, boards or commissions or upon the El
Segundo Unified School District, Centinela Valley Union High School District or the
Wiseburn School District, or upon any other person or service when imposition of such
tax upon that person or service would be in violation of the Constitution of the United
States or the Constitution of the State of California.
B. Any service user that is exempt from the tax imposed by Chapter 3.24 of
the Code shall file an application with the Tax Administrator for an exemption; provided,
however, this requirement shall not apply to a service user that is a state or federal agency
or subdivision with a commonly recognized name, or is a service user of telephone
communication services that has received a federal excise tax exemption certificate for
such service. Said application shall be made upon a form approved by the Tax
Administrator and shall state those facts, declared under penalty of perjury, which qualify
the applicant for an exemption, and shall include the names of all utility service suppliers
serving the service user. If deemed exempt by the Tax Administrator, such service user
shall give the Tax Administrator timely notice of any change in utility service suppliers
so that the Tax Administrator can properly notify the new utility service supplier of the
service user's tax exempt status. A service user that fails to comply with this Rule shall
not be entitled to a refund of utility users' taxes collected and remitted to the Tax
Administrator from such service user as a result of such non - compliance. Upon request
of the Tax Administrator, a service supplier or non - utility service supplier, or its billing
agent, shall provide a list of the names and addresses of those customers which,
according to its billing records, are deemed exempt from the utility users' tax. With
respect to a service user of telephone communication services, a service supplier of such
telephone communication services doing business in the City shall, upon request of the
Tax Administrator, provide a copy of the federal exemption certificate for each exempt
customer within the City that is served by such services supplier. Notwithstanding
anything to the contrary set forth herein, a residential service user that is not subject to
the tax imposed by Chapter 3.24 of the Code shall not be required to file an application
with the Tax Administrator for an exemption pursuant to this section.
III. Electricity Users Tax.
A. The tax imposed by Section 3.24.030 of the UUT Ordinance applies to the
charges made for electricity, and for any supplemental services or other associated
activities directly related to and /or necessary for the provision of electricity to the service
user, which are provided by a service supplier or non - utility service supplier to a service
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user. The tax shall be collected from the service user by the service supplier or non-
utility service supplier, or its billing agent.
B. The Tax Administrator, from time to time, may survey the electric
suppliers to identify the various unbundled billing components of electric retail service
that they commonly provide to residential and commercial /industrial customers in the
City, and the charges therefor, including those items that are mandated by state or federal
regulatory agencies as a condition of providing such electric service. The Tax
Administrator, thereafter, may issue and disseminate to such electric service suppliers an
administrative ruling identifying those components and items which are: i) necessary or
common to the receipt, use or enjoyment of electric service; or, ii) currently, or
historically have been, included in a single or bundled rate for electric service by a local
distribution company to a class of retail customers. Unbundled charges for such
components and items shall be subject to the tax imposed by Section 3.24.030 of the
UUT Ordinance.
C. If a non - taxable service and a taxable service are billed together under a
single charge, the entire charge shall be deemed taxable unless the service supplier can
reasonably identify charges not subject to the utility users tax based upon its books and
records that are kept in the regular course of business, which shall be consistent with
generally accepted accounting principles.
D. The tax on electricity provided by a non - utility service supplier not under
the jurisdiction of Chapter 3.24 of the El Segundo Municipal Code shall be collected and
remitted in the manner set forth in Section V of these UUT Administrative Regulations.
All other taxes on charges for electricity imposed by Section 3.24.030 of the UUT
Ordinance shall be collected from the service user by the electric service supplier or its
billing agent. The amount of tax collected in one (1) month shall be remitted to the Tax
Administrator, and must be received by the Tax Administrator on or before the last day of
the following month; or, at the option of the person required to collect and/or remit the
tax, such person shall remit an estimated amount of tax measured by the tax billed in the
previous month or upon the payment patters of the service user, which must be received
by the Tax Administrator on or before the twentieth (20th) day of the following month,
provided that the service user shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter. The credit, if
approved by the Tax Administrator, may be applied against any subsequent tax bill that
becomes due.
IV. Gas Users Tax.
A. The tax imposed by Section 3.24.040 of the UUT Ordinance applies to the
charges made for gas, including all services related to the storage, transportation and
delivery of such gas. The tax shall be collected from the service user by the service
supplier or non - utility service supplier, or its billing agent.
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B. The Tax Administrator, from time to time, may survey the gas service
suppliers to identify the various unbundled billing components of gas retail service that
they commonly provide to residential and commercial/industrial customers in the City,
and the charges therefor, including those items that are mandated by state or federal
regulatory agencies as a condition of providing such gas service. The Tax Administrator,
thereafter, may issue and disseminate to such gas service suppliers an administrative
ruling identifying those components and items which are: i) necessary or common to the
receipt, use or enjoyment of gas service; or, ii) currently, or historically have been,
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers. Unbundled charges for such components and items shall be
subject to the tax imposed by Section 3.24.040 of the UUT Ordinance.
C. If a non - taxable service and a taxable service are billed together under a
single charge, the entire charge shall be deemed taxable unless the service supplier can
reasonably identify charges not subject to the utility users tax based upon its books and
records that are kept in the regular course of business, which shall be consistent with
generally accepted accounting principles.
D. The tax that is calculated on charges for gas provided by self - production
or by a non - utility service supplier not under the jurisdiction of Chapter 3.24 of the El
Segundo Municipal Code shall be collected and remitted in the manner set forth in
Section V of these UUT Administrative Regulations. All other taxes on charges for gas
imposed by Section 3.24.040 shall be collected from the service user by the gas service
supplier or its billing agent. The amount of tax collected in one (1) month shall be
remitted to the Tax Administrator, and must be received by the Tax Administrator, on or
before the last day of the following month; or, at the option of the person required to
collect and/or remit the tax, such person shall remit an estimated amount of tax measured
by the tax billed in the previous month or upon the payment pattern of the service user,
which must be received by the Tax Administrator on or before the twentieth (20th) day of
the following month, provided that the service user shall submit an adjusted payment or
request for credit, as appropriate, within sixty (60) days following each calendar quarter.
The credit, if approved by the Tax Administrator, may be applied against any subsequent
tax bill that becomes due.
V. Collection of Tax From Service Users Receiving Direct Purchase of Gas or
Electricity.
A. Any service user subject to the tax imposed by Section 3.24.030 or Section
3.24.040 of the UUT Ordinance, which produces gas or electricity for self -use; which
receives gas or electricity, including any related supplemental services, directly from a
non - utility service supplier not under the jurisdiction of Chapter 3.24 of the El Segundo
Municipal Code; or which, for any other reason, is not having the full tax collected and
remitted by its service supplier, a non - utility service supplier, or its billing agent on the
use of gas or electricity, including any related supplemental services, in the City, shall
report said fact to the Tax Administrator and shall remit the tax due directly to the Tax
Administrator within thirty (30) days of such use. In lieu of paying said actual tax, the
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service user may, at its option, remit to the Tax Administrator within thrity (30) days of
such use an estimated amount of tax measured by the tax billed in the previous month, or
upon the payment pattern of similar customers of the service supplier using similar
amounts of gas or electricity, provided that the service user shall submit an adjusted
payment or request for credit, as appropriate, within sixty (60) days following each
calendar quarter. The credit, if approved by the Tax Administrator, may be applied
against any subsequent tax bill that becomes due.
B. The Tax Administrator may require said service user to identify its non-
utility service supplier and provide, subject to audit, invoices, books of account, or other
satisfactory evidence documenting the quantity of gas or electricity used, including any
related supplemental services, and the cost or price thereof. If the service user is unable
to provide such satisfactory evidence, or, if the administrative cost of calculating the tax
in the opinion of the Tax Administrator is excessive, the Tax Administrator may
determine the tax by applying the tax rate to the equivalent charges the service user
would have incurred if the gas or electricity used, including any related supplemental
services, had been provided by the service supplier that is the primary supplier of gas or
electricity with the City. Rate schedules for this purpose shall be available from the City.
VI. Telephone Users Tax.
A. To the extent allowed by law, the tax on telephone communication
services shall apply to a service user if the billing or service address of the service user is
within the City's boundaries. If the billing address of the service user is different from
the service address, the service address of the service user shall be used.
B. The Tax Administrator, from time to time, may issue and disseminate to
telecommunications service suppliers, which are subject to the tax collection
requirements of the UUT Ordinance, an administrative ruling identifying those
telecommunication services that are subject to the tax imposed in Section 3.24.055(a) of
the UUT Ordinance. This administrative ruling shall be consistent with legal nexus and
the federal excise tax rules, regulations, and laws pertaining to "communication services"
and shall not impose a new tax, revise an existing methodology, or increase an existing
tax.
C. If a non - taxable service and a taxable service are billed together under a
single charge, the entire charge shall be deemed taxable unless the service supplier can
reasonably identify charges not subject to the UUT based upon its books and records that
are kept in the regular course of business, which shall be consistent with generally
accepted accounting principles.
D. To prevent actual multi jurisdictional taxation of telephone
communication services subject to tax under this Section, any service user, upon proof to
the Tax Administrator that the service user has previously paid the same tax in another
state or city on such telephone communication services, shall be allowed a credit against
the tax imposed to the extent of the amount of such tax legally imposed in such other
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state or city; provided, however, the amount of credit shall not exceed the tax owed to the
City under this Section. For purposes of establishing sufficient legal nexus for the
imposition and collection of the UUT on charges for telephone communications services
pursuant to Chapter 3.24 of the El Segundo Municipal Code, "minimum contacts" shall
be construed broadly in favor of imposition and collection of the UUT to the fullest
extent permitted by California and federal law, and as it may change from time to time.
VII. Filing Requirements.
Each person required to remit a tax shall file a return with the Tax Administrator
on forms approved by the Tax Administrator on or before the due date. The full amount
of the tax owed shall be included with the return and filed with the Tax Administrator.
The Tax Administrator is authorized to require such additional information as he or she
deems necessary to determine if the tax is being levied, collected and remitted properly.
Returns are due immediately upon cessation of business for any reason. Pursuant to
California Revenue and Taxation Code Section 7284.6, the Tax Administrator, and its
agents, shall maintain such filing returns as confidential information, and not subject to
the Public Records Act. A direct deposit, including electronic fund transfers and other
similar methods of electronically exchanging monies between financial accounts, made
by a services supplier in satisfaction of its oblications under this subsection 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.
VIII. Service User Assessments.
A. Pursuant to Section 3.24.110(b) of the UUT Ordinance, the Tax
Administrator may relieve a service supplier of the obligation to collect the taxes due
from certain named service users for specific billing periods 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 the service supplier required to collect the
tax, or that a service user has refused to pay the amount of tax to such service supplier, or
whenever the Tax Administrator deems it in the best interest of the City. In such event,
the service supplier shall provide the Tax Administrator with the names and addresses of
such service users and the amounts of the tax owed.
IX. Service User Assessments.
The Tax Administrator may make an assessment for taxes not paid or remitted by
a service user required to pay or remit, pursuant to Section 3.24.110 of the UUT
Ordinance. A public hearing on the assessment shall be held. The City Clerk shall mail a
copy of a notice of the assessment and hearing to the service supplier and to the service
user at least ten (10) days prior to the date of the hearing and shall post such notice for at
least five (5) continuous days prior to the date of the hearing. Any interested party
having any objections may appear and be heard at the hearing provided his objection is
filed in writing with the City Clerk prior to the time of the hearing. At the time fixed for
considering such assessment, the Tax Administrator shall hear the same, together with
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any objections filed as provided in this Section, and thereupon may confirm or modify
such assessment by motion.
X. Records.
A. It shall be the duty of every person required to collect and /or remit to the
City any tax imposed by Chapter 3.24 of the El Segundo Municipal Code to keep and
preserve, for a period of at least three (3) years, all records as may be necessary to
determine the amount of such tax as he or she may have been liable for the collection of
and/or remittance to the Tax Administrator, which records the Tax Administrator, or the
Tax Administrator's designated representative, shall have the right to inspect at a
reasonable time.
B. The City may issue an administrative subpoena to compel a person to
deliver, to the Tax Administrator, copies of all records deemed necessary by the Tax
Administrator to establish compliance with the UUT Ordinance and these regulations,
including the delivery of records in a common electronic format on readily available
media if such records are kept electronically by the person in the usual and ordinary
course of business. As an alternative to delivering the subpoenaed records to the Tax
Administrator on or before the due date provided in the administrative subpoena, such
person may provide access to such records outside the City on or before the due date,
provided that such person shall reimburse the City for all reasonable travel expenses
incurred by the City to inspect those records, including travel, lodging, meals, and other
similar expenses, but excluding the normal salary or hourly wages of those persons
designated by the City to conduct the inspection.
C. The Tax Administrator, or the Tax Administrator's designated
representative, is authorized to execute a non - disclosure agreement approved by the City
Attorney to protect the confidentiality of customer information pursuant to California
Revenue and Taxation Code Sections 7284.6 and 7284.7. The Tax Administrator, or the
Tax Administrator's designated representative, may request from a person providing
transportation or distribution services of gas or electricity to service users within the City,
a list of the names, billing and service addresses, quantities of gas or electricity delivered,
and other pertinent information, of its transportation customers within the City pursuant
to Section 6354(e) of the California Public Utilities Code.
D. If a service supplier uses a billing agent or billing aggregator to bill,
collect, and /or remit the 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 b ill, collect, and/or remit the
tax to the City; and, (ii) upon request of the Tax Administrator, deliver, or effect the
delivery of, any information or records in the possession of such billing agent or billing
aggregator that, in the opinion of the Tax Administrator, is necessary to verify the proper
application, calculation, collection and/or remittance of such tax to the City.
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XI. Refunds.
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
(3) years next preceding a notice of tax deficiency or assessment by the Tax
Administrator, or during any year for which the services supplier, at the request of the
Tax Administrator, has executed a waiver of the defense of the statute of limitations with
regard to any claim the City may have for a utility users tax. Under no circumstances
shall an overpayment taken as a credit against an underpayment qualify a service supplier
for a refund to which it would otherwise not be entitled under the one -year written claim
requirement of Section 3.24.120 of the UUT Ordinance.
ARTICLE H. ADMINISTRATIVE RULES
I. Obligations of Citv.
A. The City will assume the following responsibilities:
(1) For existing taxes, and prior to the implementation of a new UUT
administrative rule, City will assure the accuracy of its boundary information (including
the reflection of the latest annexation and municipal reorganizations) needed for utility
billing and tax collection purposes, by offering to review and correct the service
provider's computerized billing data no less than once a year. City will also make
available, upon request by a service provider, its current boundary information. The
service provider shall not be responsible or liable for the collection or payment of any
past UUT taxes that were not collected due to the inaccuracy of information provided by
the City or due to the City's failure to make appropriate corrections to the service
provider's billing data to the extent that the City reviews such data at the request of the
service provider.
(2) Provide service providers with accurate and timely ordinance
information, including ordinance amendments, at a central location (currently the MBIA
MuniServices Company (MMC) website: http: / /www.munisolutions.com. City will
provide written notice of changes to its UUT Administrative Rules to persons designated
by the service provider. In the absence of special circumstances, the service provider
shall begin implementation of the UUT Administrative Rule change within sixty (60)
days from the date on which the service provider receives the written notification from
the City. If the 60th day is not the first day of the month, then the service provider shall
implement the changes no later than the first billing cycle of the month following the
month in which the 60T" day occurs. To "begin implementation" means to calculate and
place the UUT tax in the customer billing.
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(3) As provided in Public Utilities Code Section 799, City shall
assume sole responsibility for defending any legal challenge regarding the validity of the
UUT Ordinance and the UUT Administrative Rules, any part thereof, or any collection
thereunder, and shall defend and hold harmless any tax collecting agent named in such
action for properly performing its legal obligations set out in the UUT Ordinance and the
UUT Administrative Rules.
(4) Reimburse service providers for the reasonable costs associated
with an extraordinary audit request (including but not limited to significant modifications
to existing billing software in order to respond to an audit request).
(5) Take reasonable steps to assure that all service providers, including
new market entrants, are correctly applying and collecting the UUT tax.
(6) To the extent feasible, permit service providers to follow the same
payment and remittance protocol for UUT collections that is generally employed by other
California public agencies, provided that such protocol is agreed to and reflected in these
administrative rules by the Tax Administrator.
(7) UUT taxes may be remitted by electronic funds transfer (EFT) in
lieu of U.S. Mail, provided that such protocol is agreed to by the Tax Administrator.
(8) Following the effective date of these administrative rules, the Tax
Administrator shall notify the service providers within the City that they may request that
the Tax Administrator and City Attorney render a determination of the application of the
UUT tax to their various existing services. If such request is made within ninety (90)
days of the notice, then any determination by the Tax Administrator and the City
Attorney shall apply prospectively. The Tax Administrator shall give the service
provider at least a sixty (60) day written notice following the determination of tax
application before implementation of such changes shall be required. If the 60th day is
not the first day of a month, then the service provider shall implement the changes on the
first day of the month following the month in which the 60th day occurs. To begin
implementation means to calculate and place the UUT tax in the customer billing. The
Tax Administrator and City Attorney shall not be required to render a determination with
prospective effect under this subsection where a service provider fails to apply the UUT
tax at all, or fails to apply the tax to a service which is predominantly viewed by the
service provider's industry as being subject to the UUT tax or, in the case of
telecommunication services, has been directly determined by the IRS within the past six
months or more, to be subject to the federal excise tax.
(9) Where new utility technologies are employed or new utility
services are being offered, a service provider may request that the Tax Administrator and
City Attorney render a determination of applicability within ninety (90) days of providing
such services or technologies. Upon rendering a determination of applicability, the Tax
Administrator shall seek prospective application of the UUT tax ordinance to such
technologies or services. The Tax Administrator shall give the service provider at least a
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sixty (60) day written notice before implementation of such changes shall be required. If
the 60'1 day is not the first day of the month, then the service provider shall im lenient
the changes on the first day of the month following the month in which the 60t day
occurs. To "begin implementation" means to calculate and place the WT tax in the
customer billing.
(10) Regarding Paragraphs 8 and 9 above, the Tax Administrator and
City Attorney may participate in an advisory committee, comprised of representatives of
public agencies with WT ordinances, to develop and recommend to such public
agencies (after meeting and conferring with service provider representatives): uniform
applications of the WT tax to various utility services and technologies; uniform
implementation protocols; and appropriate amendments to WT ordinances to reflect
industry, regulatory, and technological changes.
(11) Tax Administrator and City Attorney shall take reasonable steps to
notify all service providers providing similar services of any determination made under
paragraph 8 or 9.
11. City Contractors
The Tax Administrator has the right and obligation to assure fair and reasonable
compliance with the WT ordinance. Due to the complexity of utility services,
technologies, and tax administration, the Tax Administrator may require special outside
expertise ( "Contractor ") to assist in performing compliance review of the UUT
ordinance. Service providers have a legitimate interest in assuring that such Contractors
maintain the confidentiality of utility customer information and conduct their compliance
reviews in a professional and efficient manner. The Tax Administrator's use of a
Contractor shall therefore be subject to the following rules:
A. The Contractor will provide, at the beginning of each and every audit
engagement, a letter or resolution from the City to the service supplier that identifies the
Contractor as an authorized agent of the City.
B. The Contractor will execute a non - disclosure agreement (approved by the
City Attorney) in which the Contractor agrees to maintain the confidentiality of customer
information and not to use individual customer information for any purpose other than
the IIUT compliance review of this City.
C. The Contractor shall fully disclose to the City any potential conflict of
interest (e.g., prior or proposed representation of private utility customers within the
City).
D. The Contractor shall not make any data requests of a service provider
unless the Contractor first receives the review and written approval of the Tax
Administrator of said request prior to the request being made to the service provider.
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E. The Contractor will be authorized to perform a compliance review
(including sampling audits and computerized reviews) which, in its professional opinion,
is reasonably necessary to perform its contractual obligation to the City. If a service
provider refuses to cooperate in connection with such compliance review, the Contractor
shall immediately advise the Tax Administrator so that the Tax Administrator may take
appropriate remedial steps.
F. The Contractor will use its best efforts to accurately identify all errors,
whether such corrections are in favor of the customer, the City, another public agency, or
the service provider.
G. The Tax Administrator shall mail to the service provider a copy of the
draft compliance report prepared by the Contractor regarding such service provider. The
service provider shall have thirty (30) days from the date of mailing to respond in writing
to any aspect of the draft report before such report becomes final. The final report will
identify and address all substantive written comments on the draft report submitted by the
service provider.
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