HomeMy WebLinkAbout2008/07/23 Additional Information
RESOLUTION NO. 2008-
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA ORDERING THE SUBMISSION TO
THE QUALIFIED ELECTORS OF THE CITY OF A
MEASURE RELATING TO THE CITY'S PUBLIC
SAFETY TELECOMMUNICATIONS USERS' TAX AT
TI-IE SPECIAL MUNICIPAL ELECTION TO BE HELD
ON TUESDAY, NOVEMBER 4, 2008; DECLARING
THE EXISTENCE OF i\.N EMERGENCY
NECESSIT"^.TING SUCH "^.CTION; _AND DIRECTING
TI-IE CITY ATTORNEY TO PREPARE AN IMPARTIAL
ANALYSIS OF THE MEASURE
WHEREAS, pursuant to Chula Vista Municipal Codc Chaptcr 3.44, the City
currently Icvics a Utility Uscrs' Tax CUUT"); and
WHEREAS, the City Council desircs to adjust the rate of the Tclcphone Users'
Tax (a component ofthc Utility Users' Tax) from 5% to 4.75%; to rename the Tclephone
Users' Tax as the Telccommunications Users' Tax; to modernize the tax base so that
different telecommunications technologies are treated similarly; to apply thc tax to
interstate and international calls for all customcrs; to require that all proceeds of the
Telecommunications Users' Tax be used exclusive Iv for public safetv purposes; and to
make other revisions to the method of calculating and collecting the tax to reflect
technological advances in tclecommunications serviccs, and changes in federal law; and
WHEREAS, thc proposed ordinance, attached hercto and incorporatcd herein as
Exhibit "A,"i would implement these proposed revisions to the tax (the "Ordinance"),
and if approved by voters the earliest implementation date will be Fcbruary 1,2009; and
WHEREAS, by its Resolution 1'10.2008-016, adopted on January 15,2008, thc
City Council has called a Special Municipal Election for Tuesday, Novembcr 4, 2008;
and
WHEREAS, pursuant to Governmcnt Code section 53724 and California
Elections Codc section 9222, the City Council desircs to submit the Ordinance to the
electorate at the Special Municipal Elcction.
NOW, THEREFORE, BE IT RESOLVED by the City Council of thc City of
Chula Vista as follows;
SECTION I. All of the foregoing recitals are true and correct.
SECTION 2. That the City Council, pursuant to its right and authority, does
order submitted to the voters at the Special Municipal Election on November 4, 2008, the
following question:
Shall an ordinance be adopted to reduce the rate of the City
of Chula Vista's Public Safetv Telecommunications Users' YES I
Tax (currently the Telephone Users' Tax) Irom 5% to
4.75% while maintaining exemptions for low-income
senior citizens; to ensure that Tm( proeeeds continue to be
available for general municipal purposes, s:leh as police,
fire, streets and parksdedieate the Telecommunications NO
Users' Tax proceeds exelusively to police. tire and public
safety purposes; to establish accountability provisions: and
to revise the method for calculating and collecting the Tax
to reflect technological advances and changes 111 federal
law?
This measure requires a two-thirds vote of the electorate for adoption.
SECTION 3. That the proposed Ordinance to be submitted to the voters IS
attached as Exhibit "Af
SECTION 4. That notice of the time and place of holding the election is given
and the City Clerk is authorized, instructed, and directed to give further or additional
notice of the election, in time, form and manner as required by law.
SECTION 5. That pursuant to California Elections Code 99280, the City Clerk
is directed to transmit a copy of the measure to the City Attorney. The City Attorney is
directed to prepare an impartial analysis of the measure, not to exceed 500 words in
length, showing the effect of the measure on the existing law and the operation of the
measure, and transmit such impartial analysis to the City Clerk within ten days of the
adoption of this Resolution.
SECTION 13. That p:lrsuant to Califomia Constitution :\rtide XlfIC ~2(b), the
City Council declares, by a unanimous 'iote of its membership, that a li:;cal emergency
exists necessitating that the Ordinance be submitted to the voters at the November 'I,
200S Special Election. The circumstances gi'ling rise to this emergency are a:; follows:
A. The City currently receives $1.13 million a year in UUT proceeds from
telecommunication services, and such lax revenues are critical to the public welfare mill
the City's financial ability to \3rovide essential municipal ser'lices such as police, lire,
street repair, parks and libraries.
B. Lawsuits have beell tiled against other jurisdictions challcnging the
application of the ~Itility users tall to certain tclecomFllHllicatioll services based HpOIl
detinitions contained in the ordinallees go'/emillg SHch talles alld/or referellces to
allegedly inapplicable federal laws.
C. Legislation (H.R. 5793) has been introduced in the United States
Congress, which would impose a five year moratorium on new local wireless taxes, and
could limit the ability of the City to respond to possible fut~lre adverse court rulings
regarding the City's ellisting utility users' tax on wireless communications.
D. Due to a significant, and unexpected, decline ill revellue growth over the
past 18 months, the City has undergone signiticant budgetary cuts ill order to balance the
Fiscal Year 2008 09 general fund operating budget, which assume~; the continued
collection of Utility Users T(l)[. The Fiscal Year 2009 10 bHdgetary gap is projected to be
$3.1 million; this gap ..vould be exacerbated by any loss in UUT re'/eIlHe.
E. General fund operating reserves are projected at 1.8% for the fiscal year
ending June 30, 2008. This is below the 8% reserve goal established by the City Council,
and makes the City finances especially sellsitive to a loss of substantial expected
revenues.
F. ,'\dditional budgetary cuts resulting from a loss of the Utility Users Tml
would likely have a significant impact upon the City's ability to provide essential public
services including public safety.
G.
to reduce
stream.
Therefore, it is urgently important that the City amend its UUT ordinance
the legal and legislati'/e risks that currently endanger this critical funding
H. These circumstallces are such that it .....ould be imprudellt to delay the
revision of the UUT ordinance until JHlle 8, 2010, which is the date of the neJlt Municipal
General Mllflicipal Election.
SECTION Q+. That the City Clerk shall certify to the adoption of this resolution,
and tile it with the City's original resolutions.
Presented by
Approved as to fonn by
Maria Kachadoorian
Finance Director
Bart Miesfeld
Interim City Attorney
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF CHULA VISTA ADDING CHAPTER
3.42 TO TITLE 3 OF THE CHULA VISTA MUNICIPAL CODE
REGARDING A PUBLIC SAFETY TELECOMMUNICATION USERS' TAxi
THE PEOPLE OF THE CITY OF CHULA VISTA DO ORDAIN AS FOLLOWS:
SECTION 1: Chapter 3.42 is hereby added to Title 3 of the Chula Vista Municipal
Code, and it shall read as follows:
Chapter 3.42
PUBLIC SAFETY TELECOMMUNICATION USERS' TAX
3.42.010 Definitions.
3.42.020 Constitutional, Statutory, and Other Exemptions.
3.42.030 Exemptions - Senior Citizens
3.42.040 Special Telecommunication Users' Tax.
3.42.050 Bundling Taxable Items with Non-taxable Items.
3.42.060 Substantial Nexus / Minimum Contacts.
3.42.070 Duty to collect--Procedures.
3.42.080 Collection Penalties - Service Suppliers.
3.42.090 Actions to Collect.
3.42.100 Deficiency Determination and Assessment - Tax Application Errors.
3.42.110 Administrative Remedy - Non-Paying Service Users.
3.42.120 Additional powers and duties of the Tax Administrator.
3.42.130 Records.
3.42.140 Refunds.
3.42.150 Appeals.
3.42.160 Notice No Injunction/Writ of Mandate.
3.42.170 Notice of Changes to Ordinance.
3.42.180 Effect of State and Federal Reference/Authorization.
3.42.190 Independent Audit ofTllx Colleetion, Exemption, Remittllnee, IInd
ExpenditureCreation of Fund and Use of Tax Proceeds.
3.42.200 Interaction with Prior Tax.
3.42.210 Remedies Cumulative.
3.42.220 Violations deemed infractions.
3.42.230 Annual Review.
3.42.240 Accountability Measures.
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3.42.010 Definitions.
The following words and phrases whenever used in this Chapter shall be construed as
defined in this section.
(a) "Ancillary telecommunication services means services that are associated with or
incidental to the provision, use or enjoyment of telecommunications services, including but
not limited to the following services:
(I) "Conference bridging service" means an ancillary service that links two or
more participants of an audio or video conference call and may include the
provision of a telephone number. "Conference bridging servicc" docs not includc
the telccommunications scrvices uscd to rcach the conference bridge.
(2) "Detailed telecommunications billing service" mcans an ancillary servicc of
separatcly stating inlomlation pertaining to individual calls on a customer's billing
statement.
(3) "Directory assistance" means an ancillary scrvlce of providing telcphonc
number intormation, and/or address information.
(4) "Vertical scrvice" means an ancillary scrvicc that is offered in connection with
one or morc telecommunications services, which offers advanced calling leaturcs
that allow customers to identify callcrs and to manage multiple calls and call
connections, ineluding confercncc bridging scrvices.
(5) "Voice mail scrvice" means an ancillary scrvice that enables the eustomcr to
store, send or receive recorded mcssages. "Voice mail service" does not include
any vcrtical scrvices that the customer may be rcquircd to havc in order to utilizc
the voice mail service.
(b) "Billing Address" shall mean the mailing addrcss of the service uscr where the service
supplier submits invoices or bills lor payment by the customer.
(c) "City" shall mcan the City ofChula Vista.
(d) "Mobile Telecommunications Service" has the meaning and usage as sct forth in the
Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations
thereundcr.
(c) "Month" shall mcan a calendar month.
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(I) "Paging service" means a "telecommunications service" that provides transmission of
coded radio signals for the purpose of activating speeiflc pagers; such transmissions may
include messages and/or sounds.
(g) "Person" shall mean, without limitation, any natural individual, firm, trust, common
law trust, estate, partnership of any kind, association, syndicate, club, joint stock company,
joint venture, limited liability company, corporation (including foreign, domestic, and non-
profit), municipal district or municipal corporation (other than the City) cooperative,
receiver, trustee, guardian, or other representative appointed by order of any court.
(h) "Place of Primary Use" means the street address representative of where the customer's
use of the telecommunications service primarily occurs, which must be the residential street
address or the primary business street address of the customer.
(i) "Post-paid telecommunication service" means the telecommunication service obtained
by making a payment on a telecommunication-by-teleeommunication 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 scrvice number which is not associated with the
origination or termination of the telecommunication service.
CD "Prepaid telecommunication service" means the right to access telecommunication
services, which must be paid for in advance and which enables the origination of
telecommunications using an access number or authorization code, whethcr manually or
electronically dialed, and that is sold in prcdetermined units or dollars of which the number
declines with use in a known amount.
(k) "Private telecommunication service" means a telecommunication 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).
(I) "Service Address" means either:
(I) The location of the service user's telecommunication equipment from which the
telecommunication originates or terminates, regardless of where the
telecommunication is billed or paid; or,
(2) If the location in subsection (1) of this definition is unknown (e.g., mobile
telecommunications service or V 011' service), the service address means the
location of the service user's place of primary use.
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(3) For prepaid telecommunication service, "service address" means the location
associated with the service number.
(m) "Service Supplier" shall mean any entity or person, including the City, that provides
telecommunication service to a user of such service within the City.
(n) "Service User" shall mean a person required to pay a tax imposed under the provisions
of this Chapter.
(0) "State" shall mean the State of California.
(p) "Streamlined Sales and Use Tax Agreement" shall mean the multi-state agreement
commonly known and referred to as the Streamlined Sales and Use Tax Agreement, and as
it is amended from time to time.
(q) "Tax Administrator" means the Finance Director of the City or his or her designee.
(r) "Telecommunications services" means the transmission, conveyance, or routing of
voice, data, audio, video, or any other infurmation or signals to a point, or between or
among points, whatever the technology used. The term "telecommunications services"
ineludes such transmission, conveyance, or routing in which computer processing
applications are used to act on the lurm, code or protocol of the content Jur purposes of
transmission, conveyance or routing without regard to whether such services are referred to
as voice over internet protocol (Vol 1') services or are classified by the Federal
Telecommunications Commission as enhanced or value added, and ineludes video and/or
data services that is functionally integrated with "telecommunication services.
"Telecommunications services" include, but are not limited to the lullowing services,
regardless of the manner or basis on which such services are calculated or billed: intrastate,
interstate, and international telecommunication services; ancillary telecommunication
services; mobile telecommunications service; pre-paid telecommunication service; post-
paid telecommunication service; private telecommunication service; paging service; 800
service (or any other toll-Jree numbers designated by the Federal Telecommunications
Commission); 900 service (or any other similar numbers designated by the Federal
Telecommunications Commission lur services whereby subscribers call in to pre-recorded
or live service). "Telecommunication services" docs not include cable or video
programming services that arc subject to a cable or video service franchise fee.
(s) "VoIP" (voice over internet protocol) means the digital process of making and
receiving real-lime voice transmissions over any Internet Protocol network.
(t) "800 service" means a "telecommunications service" that allows a caller to dial a toll-
free number without incurring a charge for the call. The service is typically marketed
under the name "800," "855," "866," "877," and "888" toll-free calling, and any
subsequent numbers designated by the Federal Communications Commission.
(u) "900 service" means an inbound toll "telecommunications service" purchased by a
subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded
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announccment or live service. "900 scrvice" does not include the charge for: collection
services provided by the seller of the "telecommunications services" to the subscriber, or
service or product sold by the subscriber to the subscriber's customer. The service is
typically marketed under the name "900" service, and any subsequent numbers
designated by the Federal Communications Commission.
3.42.020 Constitutional, statutory, and other exemptions.
(a) Nothing in this Chapter shall be construed as imposing a tax upon any person or service
when the imposition of such tax upon such person or service would be in violation of a
federal or state statute, the Constitution of the United States or the Constitution of the State.
(b) Any service user that is exempt trom the tax imposed by this Chapter pursuant to
subsection (a) of this section shall tile an application with the Tax Administrator for an
exemption; provided, however, this requirement shall not apply to a service user that is a
state or federal agency or subdivision with a commonly recognized name for such service.
Said application shall be made upon a form approved by the Tax Administrator and shall
state those facts, declared under penalty of perjury, which qualify the applicant for an
exemption, and shall include the names of all telecommunication 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 telecommunication service
suppliers so that the Tax Administrator can properly notify the new tcleeommunieation
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 telecommunication users' taxes
collected and remitted to the Tax Administrator li'om such service user as a result of such
noncompliance. The decision of the Tax Administrator regarding an application r'nay be
appealed pursuant to Section 3.42.150 of this Chapter. Filing an application with the Tax
Administrator and appeal to the City Administrator pursuant to Section 3.42.150 of this
Chapter is a prerequisite to a suit thereon.
(c) The City Council may, by resolution, establish one or more classes of persons or one or
more classes of utility service otherwise subject to payment of a tax imposed by this
Chapter and provide that such classes of persons or service shall be exempt, in whole or in
part from such tax for a specified period of time.
3.42.030 Exemptions - Senior citizens.
Any individual who qualifies for an exemption under Section 3.44.021 of Chapter 3.44
shall be exempt from the tax imposed by Section 3.42.040. The procedures for obtaining
such an exemption shall be followed as set forth in Section 3.44.021.
3.42.040 Soecial Telecommunication Users' Tax.
(a). There is hereby imposed a special tax upon every person in the City usin~
telecommunication services. The tax imposed by this section shall be at the rate of lour
and 75/100 percent (4.75 %) of the charges made for such services and shall be collected
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from the service user by the telecommunication services supplier or its billing agent. There
is a rebuttable presumption that telecommunication services, which are billed to a billing or
service address in the City, are used, in whole or in part, within the City's boundaries, and
such services arc subjcctto taxation undcr this Chapter. If the billing address ofthc servicc
user is different from the service address, the service address of the service user shall be
used for purposes of imposing the tax. As used in this Section, the term "charges" shall
include the value of any other services, credits, property of every kind or nature, or other
consideration provided by the service user in exchange for the telecommunication services.
(b) "Mobile Telecommunications Service" shall be sourced in accordance with the
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 u.s.e. Section
124). The Tax Administrator may issue and disseminate to telecommunication service
suppliers, which are subject to the tax collection requirements of this Chapter, sourcing
rules for the taxation of other telecommunication services, including but not limited to
post-paid telecommunication services, prepaid telecommunication scrvices, and private
telecommunication services, provided that such rules are based upon custom and common
practice that further administrative eflieiency and minimize multi-jurisdictional taxation
(e.g.. Streamline Sales and Use Tax Agreement).
(c) The Tax Administrator may issue and disseminate to tclccommunication service
suppliers, which are subject to the tax collection requirements of this Chapter, an
administrative ruling identifying those telecommunication services, or charges therefor,
that are subject to or not subjeet to the tax of subsection (a) above.
(d) As used in this section, the tenn "telecommunication services" shall include, but is not
limited to charges lor: connection, reeonnection, termination, movement, or change of
telecommunication services; late payment fees; detailed billing; central office and custom
calling featurcs (including but not limited to call waiting, call forwarding, caller
identification and three-way calling); voice mail and other messaging services; directory
assistance; access and line ehargcs; universal service charges; regulatory, administrative
and other cost recovery charges; local number portability charges; and text and instant
messaging. "Telecommunication services" shall not include digital downloads that are not
"ancillary telecommunication services" such as, music, ringtones, games, and similar
digital products.
(e) To prevent actual multi-jurisdictional taxation of telecommunication services subject to
tax under this section, any service user, upon proof to the Tax Administrator that the
service user has previously paid the same tax in another state or local jurisdiction on such
telecommunication services, shall be allowed a credit against the tax imposed to the extent
of the amount of such tax legally imposed on, and paid by, the service user in such other
state or local jurisdiction; provided, however, the amount of credit shall not excecd the tax
owed to the City under this section.
(t) The tax on telecommunication services imposed by this section shall be collected from
the service user by the service supplier. The amount of tax collected in onc (I) month shall
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be remittcd to the Tax Administrator, and must bc rcccived by thc Tax Administrator on or
beforc thc twentieth (20th) day ofthe following month.
3.42.050 Bundling Taxable Items with Non-Taxable Items.
If any non-taxable chargcs are combined with and not separately stated trom taxable
service charges on thc customer bill or invoicc of a scrvice supplicr, the combincd charge is
subjcct to tax unless the service supplier identifies, by rcasonable and verifiable standards,
the portions of the combined charge that are non-taxable 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 and
non-taxable charges. If the service supplier offers a combination of taxable and non-
taxable services, and the charges arc separately stated, then for taxation purposes, the
values assigned the taxable and non-taxable services shall be bascd 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 of the taxable and non-taxable
servIces.
3.42.060 Substantial Nexus / Minimum Contacts.
For purposes of imposing a tax or establishing a duty to collect and remit a tax under this
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor
of the imposition, collection and/or remittance of the telecommunication users' tax to the
fullest extent permitted by state and federal law, and as it may change li'om time to time by
judicial interpretation or by statutory enactment. Any telecommunication service
(including VolP) uscd by a person with a service addrcss in the City, which service is
capablc of tcrminating a call to another person on the general telephone network, shall be
subjcct to a rcbuttable presumption that "substantial nexus/minimum contacts" exists for
purposes of imposing a tax, or establishing a duty to collect and remit a tax, undcr this
Chaptcr. A scrvice supplicr shall be deemed to have sufficient activity in thc City for tax
collection and remittancc purposes if its activities includc, but arc not limited to, any of the
following: maintains or has within the City, directly or through an agent or subsidiary, a
place of busincss of any nature; solicits business in thc City by employecs, indepcndent
contractors, rescllers, agcnts or other reprcsentatives; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advcrtising that is broadcast
or relayed from a transmitter with the City or distributed from a location within the City; or
advertises in newspapers or other periodicals printed and published within the City or
through materials distributed in the City by means other than the United States mail; or if
there are activities performed in the City on behalf of the service supplier that are
significantly associated with the service supplier's ability to establish and maintain a
markct in the City for the provision of scrvices that are subjcet to a tax under this Chapter.
3.42.070 Duty to Collcct--Proccdures.
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(a) Collection by Service Suppliers. The duty of service suppliers to collect and remit the
taxcs imposed by the provisions of this Chapter shall be performed as follows:
(1) The tax shall be collected by service suppliers insofar as practicable at the same
time as, and along with, the collection of the charges made in accordance with the
regular billing practice of the service supplier. Where the amount paid by a service
user to a service supplier is less than the full amount of the charge and tax which
was accrued for the billing period, a proportionate share of both the charge and the
tax shall be deemed to have been paid. In those cases where a service user has
notified the service supplier of refusal to pay the tax imposed on said charges,
Section 3.42.110 shall apply.
(2) The duty of a servicc supplier to collcct thc tax trom a scrvice user shall
commence with the beginning of the lirst regular billing period applicable to the
service uscr wherc all charges normally includcd in such regular billing are subject
to the provisions of this Chapter. Whcre a service user receives more than onc
billing, one or more being for different periods than another, the duty to collect
shall arise separatcly for each billing period.
(b) Filing Return and Payment. Each pcrson required by this Chaptcr to remit a tax shall
file a return to the Tax Administrator, on forms approvcd by the Tax Administrator, on or
beforc the due date. The full amount of the tax collected shall be included with the return
and filed with the Tax Administrator. The Tax Administrator is authorized to require such
additional information as he or she deems necessary to determine if the tax is being levied,
collected, and remitted in accordance with this Chaptcr. Returns are due immediatcly upon
cessation of business for any reason. Pursuant to Revenue and Tax Code Section 7284.6,
such filing returns are confidential information and are exempt from the disclosure
provisions of the Public Records Act.
3.42.080 Collection Penalties - Service Suppliers.
(a) Taxes eollected from a service user are dclinquent if not reeeived by thc Tax
Administrator on or before the due date. Should the due date oecur on a weekend or legal
holiday, the return must be reeeived by the Tax Administriltor on the lirst regular working
day following the weekend or legal holiday. A direct deposit, including electronie fund
transfers and other similar methods of electronieally exchanging monics between linaneial
accounts, made by a service supplier in satisfaetion of its obligations under this subseetion
shall be eonsidered timcly if the transfer is initiated on or before the due date, and the
transfer settles into the City's aeeount on the following business day.
(b) If the person required to colleet and/or remit the telecommunication users' tax fails to
eollect the tax (by failing to properly assess the tax on one or more services or charges on
the customer's billing) or fails to remit the tax eollected on or before the duc date, the Tax
Administrator shall attaeh a penalty for sueh delinquencies or defieiencies at the rate of
fifteen (15%) percent of the total tax that is delinquent or delieient in the remittanee, and
8
shall pay interest at the rate of and 75/1 OOths (0.75%) percent per month, or any fraction
thereof: on the amount of the tax, exclusive of penalties, 11'om the date on which the
remittance first became delinquent, until paid.
(c) The Tax Administrator shall have the power to impose additional penalties upon
persons required to collect and remit taxes pursuant to the provisions of this Chapter for
fraud or gross negligence in reporting or remitting at the rate of fifteen (15%) percent of the
amount of the tax collected and/or required to be remitted, or as recomputed by the Tax
Administrator.
(d) For collection purposes only, cvery penalty imposed and such interest that is accrued
under the provisions of this section shall become a part of the tax herein required to be
paid.
(c) Notwithstanding the foregoing, the Tax Administrator may, in his or her discretion,
modify the due dates of this Chapter to be consistent with any uniform standards or
procedures that arc mutually agreed upon by other public agencies imposing a utility users'
tax, or otherwise legally established, to create a central payment location or mechanism.
3.42.090 Actions to Collect.
Any tax required to be paid by a service user undcr the provisions of this Chapter shall be
deemed a debt owed by the service user to the City. Any such tax collected from a service
user which has not been remitted to the Tax Administrator shall be deemed a debt owed to
the City by the person required to collect and remit and shall no longer be a debt of the
service user. Any person owing money to the City under the provisions of this Chapter
shall be liable to an action brought in the name of the City for the recovery of such amount,
including penalties and interest as provided for in this Chapter, along with any collection
costs incurred by the City as a result of the person's noncompliance with this Chapter,
including, but not limited to, reasonable attorneys' fees. Any tax required to be collected
by a service supplier or owed by a service user is an unsecured priority excise tax
obligation under II U.S.CA. Seclion507(a)(8)(C).
3.42.100 Deficiency Determination and Assessment - Tax Application Errors.
(a) The Tax Administrator shall make a dclieieney determination if he or she determines
that any service user or service supplier required to payor collect taxes pursuant to the
provisions of this Chapter has failed to pay, collect, and/or remit the proper amount of tax
by improperly applying, or failing to apply, the tax to one or more taxable services or
charges. Nothing herein shall require that the Tax Administrator institute proceedings
undcr this Section 3.42.100.
(b) Thc Tax Administrator shall mail a notice of such deficiency determination to the
person or cntity allegcdly owing the tax, which notice shall refcr briefly to the amount of
the taxes owed, plus interest at thc rate of 75/100ths (0.75%) percent per month, or any
Iraction thereof, on the amount of the tax from the datc on which the tax should have becn
9
reccived by thc City. Within fourtecn (14) calendar days after the datc of scrvicc of such
notice, the pcrson or entity allegedly owing the tax may requcst in writing to the Tax
Administrator for a hearing on the matter.
(c) If the pcrson or entity allcgedly owing thc tax fails to requcst a hearing within the
prcscribed time pcriod, the amount of thc deficiency determination shall bccomc a flnal
assessmcnt and shall immediatefy bc due and owing to thc City. If such pcrson or cntity
requests a hearing, the Tax Administrator shall cause thc matter to be sct for hearing, which
shall be scheduled within thirty (30) days aftcr receipt of the written rcquest for hearing.
Notice of the time and placc of thc hearing shall be mailed by thc Tax Administrator to
such person at least ten (10) calendar days prior to the hcaring, and, if the Tax
Administrator desires said person to produce speciflc records at such hearing, such notice
may designate the rccords 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 lor the purpose of
allowing the presentation of additional evidence. Within a reasonable timc following the
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non-
assessment), thereafter, by conflrming, modifying or rejecting the original defieiency
determination, and shall mail a copy of such final assessment to the person or entity owing
the tax. The deeision of the Tax Administrator may be appealed pursuant to Section
3.42.150 of this Chapter. Filing an application with the Tax Administrator and appeal to
the City Manager pursuant to Section 3.42.150 of this Chapter is a prerequisite to a suit
thereon.
(e) Payment of thc final assessment shall become dclinquent if not reeeived by the Tax
Administrator on or before the thirtieth (30th) day following the date of receipt of the
notice of final assessment The penalty for dclinquency shall be flfteen percent (15%) on
the total amount of the assessment, along with intercst at the rate of 751100ths (0.75%)
percent per month, or any fraction thereof, on the amount of the tax, exclusive of penalties,
from the date of dclinquency, until paid. The applicable statute of limitations regarding a
claim by the City seeking payment of a tax asscssed under this Chapter shall commence
from the date of delinqucncy as provided in this subsection (e).
(1) All notices under this section may be sent by regular mail, postage prepaid, and shall be
deemed received on the third calendar day following the date of mailing, as established by
a proof of mailing.
3.42.110 Administrative Remedy - Non-Paying Service Users.
(a) Whenever the Tax Administrator determines that a service user has deliberately
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whcnever the Tax Administrator deems it in the best
interest of thc City, he or she may relieve such person of the obligation to collect the taxes
due under this Chapter {i'om ccrtain named service users for specific billing pcriods. To the
10
extent the service user has failed to pay the amount of tax owed for a period of two (2) or
more billing periods, thc service supplier shall be relicved of the obligation to collect taxes
due. The service supplier shall provide the City with the names and addresses of such
service users and the amounts of taxes owed under the provisions of this Chapter. Nothing
herein shall require that the Tax Administrator institute proceedings under this Section
3.42.110.
(b) In addition to the tax owed, the service user shall pay a delinquency penalty at the ratc
of fifteen percent (15%) of the total tax that is owcd, and shall pay interest at the rate of
75/1 OOths (0.75%) perccnt pcr month, or any fraction thcreoe on the amount of the tax,
exclusive of pcnalties, Irom the due date, until paid.
(c) The Tax Administrator shall notify the non-paying servicc user that the Tax
Administrator has assumed the responsibility to collect the taxes due for the stated periods
and demand payment of such taxes, including penalties and interest. Thc notice shall bc
served on the service user by personal delivery or by deposit of the notice in the United
States mail, postage prepaid, addressed to the service user at the address to which billing
was made by the person required to collect the tax; or, should the service user have a
change of address, to his or her last known address.
(d) If the service user fails to remit the tax to the Tax Administrator within thirty (30) days
trom the date of the service of the notice upon him or her, the Tax Administrator may
impose an additional penalty of fiftecn percent (15%) of the amount of the total tax that is
owed.
3.42.120 Additional Powers and Duties of the Tax Administrator.
(a) The Tax Administrator shall have the power and duty to enforce each and all of the
provisions of this Chapter.
(b) The Tax Administrator may adopt administrative rules and regulations consistent with
provisions of this Chapter for the purpose of interpreting, clarifying, carrying out and
enforcing the payment, collection and remittance of the taxes hcrein imposed. The
administrative rules and regulations shall not impose a new tax, revise an existing tax
methodology as stated in this Section, or increase an existing tax, except as allowed by
California Government Code Section 53750(h)(2). A copy of such administrative rules and
regulations shall be on me in the Tax Administrator's office. To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected in
filII for any period of time trom any particular service supplier or service user, that
determination shall be considered an exercise of the Tax Administrator's discretion to settle
disputes and shall not constitute a change in taxing methodology for purposes of
Government Code Section 53750 or otherwise. The Tax Administrator is not authorized to
amend the City's methodology for purposes of Government Codc Section 53750 and the
City does not waive or abrogate its ability to imposc the communication users' tax in full as
a result of promulgating administrative rulings or entering into agreements.
11
(c) Upon a proper showing of good cause, the Tax Administrator may make administrative
agrecmcnts, with appropriate conditions, to vary Ii'om thc strict requirements of this
Chapter and thereby: (1) conform to the billing procedures of a particular service supplier
so long as said agreements result in the collection of the tax in conformance with the
general purpose and scope of this Chapter; or, (2) to avoid a hardship where the
administrative costs of collection and remittance greatly outweigh the tax benefit. A copy
of each such agreement shall be on file in the Tax Administrator's of1iee, and arc voidable
by the Tax Administrator or the City at any time.
(d) The Tax Administrator may conduct an audit, to ensure proper compliance with the
requirements of this Chapter, of any person required to collect and/or remit a tax pursuant
to this Chapter. The Tax Administrator shall notify said pcrson of the initiation of an audit
in writing. In the absencc of fraud or other intentional misconduct, thc audit period of
review shall not exceed a period of thrcc (3) years immediately preceding the date of
receipt of the writtcn notice by said person from the Tax Administrator. Upon completion
of the audit, the Tax Administrator may make a deficiency determination pursuant to
Section 3.42.100(d) of this Chapter for all taxes (and applicable pcnalties and interest)
owed and not paid, as evidcnccd by information provided by such person to the Tax
Administrator. If said pcrson is unable or unwilling to provide sufficient records to enable
the Tax Administrator to verify compliance with this Chapter, the Tax Administrator is
authorizcd to make a reasonable estimate of the deficiency. Said reasonable estimate shall
be entitled to a rebuttable presumption of correctness.
(e) Upon receipt of a written request of a taxpayer, and for good cause, the Tax
Administrator may extend the time for filing any statement required pursuant to this
Chapter for a period of not to exceed forty-five (45) days, provided that the time for filing
the required statement has not already passed when the request is received. No penalty for
delinquent payment shall accrue by reason of such extension. Interest shall accrue during
said extension at the rate of 75/100ths (0.75%) percent per month, prorated for any portion
thereo f.
(I) The Tax Administrator shall determine the eligibility of any person who asserts a right
to exemption from, or a refund oC the tax imposed by this Chapter.
(g) Notwithstanding any provision in this Chapter to the contrary, the Tax Administrator
may waive any penalty or interest imposed upon a person required to collect and/or remit
for failure to collect the tax imposed by this Chapter if the non-collection occurred in good
faith. In determining whether the non-collection was in good faith, the Tax Administrator
shall take into consideration industry practice or other precedence.
3.42.130 Records.
(a) It shall be the duty of every person required to collect and/or remit to the City any tax
imposed by this Chapter to keep and preserve, for a period of at least three (3) years, all
records as may be necessary to determine the amount of such tax as he/she may have been
12
liable for the collection of and remittance to the Tax Administrator, which records the Tax
Administrator shall have the right to inspect at a reasonable time.
(b) The City may issue an administrative subpoena to compel a person to deliver, to the
Tax Administrator, copies of all records deemed necessary by the Tax Administrator to
establish compliance with this Chapter, including the delivery of records in a common
electronic format on readily available media if such records arc 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 travcl,
lodging, meals, and other similar expenses, but excluding the normal salary or hourly
wages of those persons designated by the City to conduct the inspection.
(c) The Tax Administrator is authorized to execute a non-disclosure agreement approved
by the City Attorney to protect the conlidentiality of customer infonnation pursuant to
CalifiJrnia Revenue and Tax Code Sections 72134. 6 and 7284.7.
(d) II' 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 tclephone number of each billing agent and billing aggregator currently
authorized by the service supplier to bill, collcet, 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 propcr application, calculation, collection
and/or remittance of such tax to the City.
(e) If any person subject to record-keeping under this section unreasonably denies the Tax
Administrator access to such records, or fails to produce the information requcsted in an
administrativc subpoena within the time specilied, then the Tax Administrator may impose
a penalty of $500 on such person for each day following: i) the initial datc that the person
refuses to providc such access; or, ii) the due date for production of records as set forth in
the administrative subpoena. This penalty shall be in addition to any other penalty imposed
under this Chapter.
3.42.140 Refunds.
Whenever the amount of any tax has been overpaid or paid more than once or has been
erroncously or illegally collected or received by the Tax Administrator under this Chapter
from a person or service supplier, it may be refunded as provided in this section:
(a) The Tax Administrator may refund any tax that has been overpaid or paid more than
onee or has been crroneously or illegally collected or received by the Tax Administrator
under this Chapter from a person or service supplier, provided that no refund shall be paid
under the provisions of this section unless the claimant or his or her guardian, conservator,
13
executor, or administrator has submitted a written claim to the Tax Administrator within
one year of the overpayment or erroneous or illegal collection of said tax. Such claim must
clearly establish claimant's right to the rcfund by written records showing entitlemcnt
thereto. Nothing hercin shall permit the tiling 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) The filing of a written claim pursuant to Governmen/ Code See/ion 935 is a prerequisite
to any suit thereon. Any action brought against the City pursuant to this section shall be
subject to the provisions of Government Code Sections 945.6 and 946. The Tax
Administrator, or the City Council where the claim is in excess of five thousand dollars
($5,000), shall act upon the refund claim within the time period set forth in Government
Code Section 912.4. If the Tax Administrator/City Council fails or refuses to act on a
rcfund claim within the time prescribed by Government Section 912.4, the claim shall be
dccmcd to have been rejected by the City Council on the last day of thc period within
which the City Council was requircd to act upon the claim as provided in Governmen/
Code Seclion 912.4. The Tax Administrator shall give notiee of the aetion in a form whieh
substantially complies with that set forth in Governmen/ Code Section 913.
(c). Notwithstanding the notice provisions of subsection (a) of this Section, the Tax
Administrator may, at his or her discretion, give writtcn permission to a servicc supplier,
who has collected and remitted any amount of tax in cxccss of thc amount of tax imposed
by this Chapter, to claim credit for such overpayment against the amount of tax which is
due the City upon a subsequent monthly return(s) to the Tax Administrator, provided that:
i) such credit is claimed in a return datcd no later than one year Irom the date of
overpayment or erroneous collection of said tax; ii) the Tax Administrator is satisfied that
the underlying basis and amount of such credit has bcen reasonably established; and, iii) in
the case of an overpayment by a service user to the service supplier that has becn remitted
to the City, the Tax Administrator has received proof; to his or her satisfaction, that the
overpayment has been rdunded by the service supplier to the service uscr in an amount
equal to the requested credit.
(d) Notwithstanding subsections (a) through (c) above, a service supplier shall be entitled
to take any overpayment as a credit against an undcrpayment whenever such overpayment
has been received by the City within the thrce (3) ycars immediately preceding a defieiency
determination or assessment by the Tax Administrator in connection with an audit
instituted by the Tax Administrator pursuant to Section 3.42.120(d). A service supplier
shall not be entitled to said credit unless it first c1carly establishes, to the satisfaction of the
Tax Administrator, the right to the credit by writtcn records showing entitlement thereto.
Under no circumstanccs 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.
3.42.150 Appeals.
14
(a) The provisions of this section apply to any decision (other than a decision relating to a
refund pursuant to Section 3.42.140 of this Chapter), de1iciency determination, assessment,
or administrative ruling of the Tax Administrator. Any person aggrieved by any decision
(other than a decision relating to a refund pursuant to Section 3.42.140 of this Chapter),
delieiency determination, assessment, or administrativc ruling of the Tax Administrator,
shall be required to comply with the appeals procedurc of this section. Compliance with
this section shall be a prerequisite to a suit thcreon. [See Government Code Section
935 (b). ] Nothing herein shall permit the tiling of a claim or action on behalf of a class or
group of taxpayers.
(b) If any person is aggrieved by any decision (other than a decision relating to a refund
pursuant to Section 3.42.] 40 of this Chapter), deticiency determination, asscssment, or
administrative ruling of the Tax Administrator; hc or shc may appeal to the City Manager
by filing a notice of appeal with the City Clerk within fourteen (14) days of the date of the
decision, delieieney determination, assessment, or administrative ruling of the Tax
Administrator which aggrieved the service uscr or service supplier.
(c) The mattcr shall be scheduled for hearing before an independent hearing oflicer selectcd
by the City Manager, no more than thirty (30) days from the receipt of the appeal. The
appellant shall be served with notice of the time and place of the hearing, as well as any
rclevant materials, at least five (5) calendar days prior to the hearing. The hearing may be
continued from time to time upon mutual consent. At the time of the hearing, the appealing
party, the Tax Administrator, and any other interested person may present such rclevant
evidence as he or she may have relating to the determination from which the appeal is
taken.
(d) Based upon the submission of such evidence and the review of the City's files, the
hearing officer shall issue a written notice and order upholding, modifying or reversing the
determination from which the appeal is taken. The notice shall be given within fourteen
(14) days after the conclusion of the hearing and shall state the reasons for the decision.
The notice shall specify that the decision is final and that any pctition for judicial review
shall be tiled within ninety (90) days l1'om the date of the decision in accordance with Code
o{Civil Procedure Seetion/094.6. ]n the event the hearing o11icer's decision is in favor of
the City, all costs of the hearing shall be borne by the appellant.
(e) All notices under this section may be sent by regular mail, postage prepaid, and shall be
deemed received on the third calendar day following the date of mailing, as established by
a proof of mailing.
3.42.160 No InjunctionIWrit of Mandate.
No injunction or writ of mandate or other legal or equitable process shall issue in any suit,
action, or proceeding in any court against this City or against any oflieer of the City to
prevent or enjoin the collection under this Chapter of any tax or any amount of tax requircd
to be collected and/or remittcd.
15
3.42.170 Notice of Changes to Ordinance.
If a tax under this Chapter is added repealed, increased, reduced, or the tax base is changed,
the Tax Administrator shall follow the notice requirements of Califimlia Public Utilities
Code Section 799.
3.42.180 Effect of State and Federal Referencel Authorization.
Unless specifically provided otherwise, any reference to a state or federal statute in this
Chapter shall mean such statute as it may be amended from time to time, provided that such
reference to a statute herein shall not include any subsequent amendment thereto, or to any
subsequent change of interpretation thereto by a state or federal agency or court of law with
the duty to interpret such law, to the extent that such amendment or change of
interpretation would require voter approval under Califomia law, or to the extent that such
change would result in a tax decrease (as a result of excluding all or a part of a
communication service, or charge therefor, from taxation). Only to the extent voter
approval would otherwise be required or a tax decrease would result, the prior version of
the statute (or interpretation) shall remain applicable; for any application or situation that
would not require voter approval or result in a decrease of a tax, provisions of the amended
statute (or new interpretation) shall be applicable to the maximum possible extent.
To the extent that the City's authorization to collect or impose any tax imposed under this
Chapter is expanded or limited as a result of changes in state or federal law, no amendment
or modification of this Chapter shall be required to conform the tax to those changes, and
the tax shall be imposed and collected to the full extent of the authorization up to the full
amount of the tax imposed under this Chapter.
3.42.190 Independent ,A.udit of Tax Colleetion, Exemption,
ExpenditureCreation of Fund and Use of Tax Proceeds.
Remittance, an1
a Proceeds of the tax im osed under this Cha ter shall be de osited into a s eeial
fund desi nated "Public Safet S eeial Tax Fund" which is hereb created. Monies in th
fund shall be se aratcl accounted for trom the other f~mds of the Cit and interest earned
on f~md balances shall aeerue to the f~md upon which such interest was earned.
b Tax roeeeds and interest thereon in the "Public Safet S eeial Tax Fund" ma be
used onlv to fund police. tire and other public safetv programs and for no other purposes.
e This Section shall constitute the statement indieatin the s ccitic mr oses of
special tax as required bv Government Code Section 50075.1 (a). Proceeds of the tax
im osed b this Cha ter. and thc interest thereon. shall be ex ended onl as set forth in thi'
Section.
applied, e)(empted, collected, and remitted in a'
16
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verilieatioR SHull not be required of tal[ remitters where the cost of tH
eJ:ceed the tal[ revenues to be reviewed.
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3.42.200 Interaction with Prior Tax.
(a) Satisfaction of Tax Obligation by Service Users. Any person who pays the tax levied
pursuant to Section 3.42.040 of this Chapter with respect to any charge for a
telecommunication service shall be deemed to have satisfied his or her obligation to pay the
tax levied pursuant to Section 3.44.030 of this Code with respect to that charge. Likewise,
prior to April 1,2009, any person who pays the tax levied pursuant to Section 3.44.030 of
this Code with respect to any charge for a servicc subject to taxation pursuant to this
Chapter shall be deemed to have satisfied his or her obligation to pay the tax levied
pursuant to Section 3.42.040 of this Chapter with respect to that charge. The intent of this
paragraph is to prevent the imposition of multiple taxes upon a single utility charge during
the transition period from the prior telecommunication users' tax to the new
telecommunication users' tax (which transition period ends April I, 2009) and to permit
telecommunication service providers, during that transition period, to satisfy their
collection obligations by collecting either tax.
(b) Collection of Tax by Service Providers. Service providers shall begin to collect the tax
imposed by this Chapter as soon as feasible aJ1er the effective date of the Chapter, but in no
event later than permitted by Section 799 of the CalifiJl'/lia Public Utilities Code.
(c) In the event that a linal court order should determine that the election enacting this
Chapter 3.42 is invalid for whatever reason, or that any tax imposed under this Chapter
3.42 is invalid in whole or in part, then the tax imposed under Sections 3.44.030 (unless
repealed) shall automatically continue to apply with respect to any service for which the tax
levied pursuant to this Chapter has been determined to be invalid. Such automatic
continuation shall be effective beginning as of the lirst date of service (or billing date) for
which the tax imposed by this Chapter is not valid. However, in the event of an
invalidation, any tax (other than a tax that is ordered refunded by the court or is otherwisc
refunded by the City) paid by a person with respect to a service and calculated pursuant to
this Chapter shall be deemed to satisfy the tax imposed under Section 3.44.030 on that
service, so long as the tax is paid with respect to a service provided no later than six months
subsequent to the date on which the linal court order is published.
3.42.210 Remedies Cumulative.
All remedies and penalties prescribed by this Chapter or which are available under any
other provision of law or equity, ineluding but not limited to the CalifiJrnia False Claims
Act (Governmen/ Code Section 12650 e/ seq.) and the CalifiJrnia Unfclir Practices Acl
(Business and Professions Code Section 17000 et seq.), are cumulative. The use of one or
17
more remedies by the City shall not bar the use of any other remedy for the purpose of
enforcing the provisions of this Chapter.
3.42.220 Violations Deemed Infractions. Any person who willfully. attempts in any
manner to avoid or defcat the tax imposed by this Chapter or the payment of all or any part
thereoC or any pcrson required by this Chaptcr to pay the tax, to make a return, to kecp any
rccords, or to supply any information who willfully t~lils to pay all or any part of such tax,
make such return, keep such records, or supply such information at the timc or times
requircd by this Chaptcr, shall bc guilty of an infraction.
3.42.230
Annual Review.
(a) As part of the annual budget process, the City Council shall annually review thc
amount of rcvenues derived by the City from the Telecommunications Uscrs' Tax
imposcd by this Chapter. The lirst review shall occur no later than June 30, 2010, and
each subsequcnt review shall occur no later than June 30 of each liscal year. ,-Prior to
the review, thc Finance Director shall provide thc City Council with the following
information:
(i) the total tax revcnuc reccived by the City as proceeds of the
Telecommunications Users' Tax, as of Deccmber 31 sl of the calendar year preceding the
date of the meeting; and
(ii) thc Finance Director's recommendation as to whether an adjustment to the
rate of the tax imposed by this Chapter is indicated in light of the linancial condition of
the City.
(b) Following its rcview, the City Council may adopt an ordinance modifying (either
indelinitely or for a fixcd period) the rate of the tax imposed by the Chapter or
terminating or suspending imposition of the tax. The City Council may reduce, maintain
or modify the rate in existence at the time of thc annual review, but in no event shall the
rate be increased to exceed 4.75%. .
(c) If thc City Council adopts an ordinance terminating the tax" that tcrmination
shall not affect thc obligation to pay taxes levied on services used prior to the date of
termination. Taxes levied prior to that date shall remain a debt payable to the City. All
provisions in this Chapter, cxeept those relating to the levy of taxes, shall continuc with
full force and effect after such date.
(d) Nothing in this Chapter is intended to constitute an cxtension or an increase in a tax
rcquiring votcr approval under CalifiJrnia Conslilulion Arlicle X/IIC; and to the extent that
this Scction 3.42.230 is found to invoke such a rcquirement, this Section 3.42.230 shall be
deemed null and void ab initio.
3.42.190 Accountability Measures.
18
a The Cit ' s cx enditurc of the roceeds of the taxes im oscd b this Cha ter an
the interest thereon shall be reviewed annuall b an inde endent auditor in con' unction
with. and as art of thc Cit 's usual annual financial audit. and the rcsults of such review
shall be made available for inspection bv thc public.
SECTION 2. Effective Date. This Chapter shall become effective immediately upon the
date that this Ordinance is conlirmcd and approved by the voters of Chula Vista at the
Municipal Election of November 4, 2008. Scrvice Supplicrs will not bc required to
implcment the provisions of this ordinancc prior to February 1,2009.
SECTION 3. Amendment or Repeal. Chaptcr 3.42 of Articlc XlIITitle 3 of the Chul~
Vista Municipal Code. cxcept for Section 3.42.190 thereot: may be repealed or amended[
by thc City Council without a vore of the peoplc. Howcver, as required by Chapter XlIlC
of the California Constitution, voter approval is required for any amendment provision that
would incrcase the rate of any tax levied pursuant to this Ordinancc. Thc People of the
City of Chula Vista affirm that the following actions shall not constitute an increase of the
ratc of a tax:
I. The rcstoration of the ratc of thc tax to a ratc that is no higher than that set by this
Ordinance, if the City Council has acted to reduce the rate of the tax;
2. An action that intcrprets or clarifies the methodology of the tax, or any definition
applicable to the tax, so long as interpretation or clarification (even if contrary to
some prior interpretation or c1aritication) is not inconsistent with the language of
this Ordinance.
3. The establishment of a class of person that is exempt or excepted from the tax or
the discontinuation of any such exemption or exception (other than the
discontinuation of an exemption or exception specifically set forth in this
Ordinance); and
4. The collection of the tax imposed by this Ordinance, even if the City had, I{)r
some period of time, failed to collcct thc tax. [
SECTION 4. Severability. If any scction, subsection, sentence, clause, phrase, or portion
of this Ordinance is for any reason hcld to bc invalid or unenforceable by a court of
competent jurisdiction, thc rcmaining portions of this Ordinance shall noncthelcss rcmain
in full forcc and effect. The people hereby dcclares that thcy would have adopted each
section, subsection, sentence, c1ausc, phrase, or portion of this Ordinance, irrcspectivc of
19
,"
the fact that any onc or morc sections, subscctions, scntences, c1auscs, phrases, or portions
of this Ordinance be declared invalid or unenforceable.
SECTION 5. Execution. The Mayor is hereby authorized to attest to the adoption of this
Ordinance by the voters of the City by signing where indicated below.
I hereby certify that the foregoing Ordinance was PASSED, APPROVED and ADOPTED
by the people of the City ofChula Vista voting on the day of ,2008.
Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
APPROVED AS TO FORM:
20
Website: htlIl ://vvww. uutinfo.org/table/Sum mary _Listing.htm
146 cities with a UUT intrastate rate:
l-k-m 1 '7/Z3/0B
4ddi+:oncJ f"torrYlCL-hon
d.t ~+rilolA.ted dt.>r;n'J
Yhee+i <3 '
. 99 out of 146 (67%) of the jurisdictions with intrastate UUT have a rate greater
than4.75% (3 more have an average rate over 4.75%)
. 5.27 is the average UUT for those cities
. 92 have an interstate UUT
. 85 have an intemational (JUT
. ]20 have a mobile UUT
When you adjust for population, California (JUT cities with] 00,000 people or more:
. 25 of the 30 City's (83%) UUT is greater than 4.75%
. 25 of the 30 apply UUT to interstate and international calls
. The average (JUT rate for all 30 is 7.39%
t+ervt 1 7/z.3/fY8
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ORDINANCE NO.
AN ORDINANCE OF THE CITY OF CHULA VISTA ADDING CHAPTER
3.42 TO TITLE 3 OF THE CHULA VISTA MUNICIPAL CODE
REGARDING A TELECOMMUNICATION USERS' TAX
THE PEOPLE OF THE CITY OF CHULA VISTA DO ORDAIN AS FOLLOWS:
SECTION 1: Chapter 3.42 is hereby added to Title 3 of the Chula Vista Municipal
Code, and it shall read as follows:
Chapter 3.42
TELECOMMUNICATION USERS' TAX
3.42.010 Definitions.
3.42.020 Constitutional, Statutory, and Other Exemptions.
3.42.030 Exemptions - Senior Citizens
3.42.040 Teleeommunication Users' Tax.
3.42.050 Bundling Taxable Items with Non-taxable Items.
3.42.060 Substantial Nexus / Minimum Contacts.
3.42.070 Duty to coIlect--Procedures.
3.42.080 Collection Penalties - Service Suppliers.
3.42.090 Actions to Collect.
3.42.100 Deficiency Determination and Assessment - Tax Application Errors.
3.42.110 Administrative Remedy - Non-Paying Service Users.
3.42.120 Additional powers and dutics of the Tax Administrator.
3.42.130 Records.
3.42.140 Refunds.
3.42.150 Appeals.
3.42.160 Notice No Injunction/Writ of Mandate.
3.42.170 Notice of Changes to Ordinance.
3.42.180 Effcct of State and Fedcral Reference/Authorization.
3.42.190 Independent Audit of Tax Collection, Exemption, Remittance, and
Expenditure.
3.42.200 Interaction with Prior Tax.
3.42.210 Remcdies Cumulative.
3.42.220 Violations dcemed infractions.
3.42.230 Annual Review.
1
(i) the total tax revenue received by the City as proceeds of the
Telecommunications Users' Tax, as of Dceember 31 st of the calendar year preceding the
date of the meeting; and
(ii) the Finance Director's recommendation as to whether an adj ustmcnt to the
rate of the tax imposed by this Chapter is indicated in light of the I1naneial condition of
the City.
(b) Following its review, the City Council may adopt an ordinance modifying (either
indefinitely or for a lixed period) the ratc of the tax imposed by the Chapter or
terminating or suspcnding imposition of the tax. The City Council may reduce, maintain
or modify the rate in existence at the time of the annual review, but in no event shall the
rate be increased to exceed 4.75%. ~
(e) If thc City Council adopts an ordinancc terminating the tax,~ that tel1l1ination
shall not affect the obligation to pay taxes levicd on scrvices used prior to the date of
termination. Taxes levied prior to that date shall rcmain a debt payable to the City. All
provisions in this Chapter, except those relating to the levy of taxes, shall continue with
full force and ctIee! after such date.
(d) Nothing in this Chapter is intended to constitute an extension or an increase in a tax
requiring voter approval under Cafifornia COllstifutioll Article Xl/IC; and to the extent that
this Section 3.42.230 is found to invoke such a requirement, this Section 3.42.230 shall be
deemed null and void ab illitio.
SECTION 2. Effective Date. This Chapter shall become effective immediately upon the
date that this Ordinance is confirmed and approved by the voters of Chula Vista at the
Municipal Election of November 4, 2008. Service Suppliers will not be required to
implement the provisions of this ordinance prior to February 1,2009.
SECTION 3. Amendment or Repeal. Chapter 3.42 of Title 3/.rtiele XIII of the Chul~
Vista Municipal Code may be repealed or amended by the City Council without a vote of
the people. However, as required by Chapter XlllC of the California Constitution, voter
approval is required for any amendment provision that would increase the rate of any tax
levied pursuant to this Ordinance. The People of the City of Chula Vista afJirm that the
following actions shall not constitute an increase of the rate of a tax:
I. The restoration of the rate of the tax to a rate that is no higher than that set by this
Ordinance, if the City Council has acted to rcduce the rate of the tax;
2. An action that interprets or c1aril1es the methodology of the tax, or any delinition
applicable to the tax, so long as interpretation or claritication (even if contrary to
some prior interpretation or clarification) is not inconsistent with the language of
this Ordinance.
3. Thc establishment of a class of person that is exempt or excepted from the tax or
the discontinuation of any such exemption or exception (othcr than the
18
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July] 7, 2008
To: John McCann and Chula Vista City Council
From: David Krogh
Re: Tuesday night's Utility Tax Update ballot language issue (agenda item #12)
1 was interested in agenda item #12. did not attend Tuesday evening's citv council
meeting, but watched on cable TV delay broadcast last night. I respect the serious
consideration ofthe issues involved bv all members of the council during the meeting.
Therefore, recognizing your re-scheduling the issue for July 23, 1 submit for your
consideration, and for consideration by staff and council:
Suggested Improved Ballot Short Description language (74 words)
This measure will modernize city's utility tax in recognition of changes in
telecommunication technology since its inception 38 years ago, along lines
of California League of Cities model lanfruage already adopted by two
dozen other California cities, in order to assure reliability of future city
revenues. It is intended to improve equity (consistency) of tax across all
telecommunication users, while adjusting current 5% tax rate to rate
estimated to be revenue neutral overall (4.75%).
You all are beaded in the right direction and can probably solve the issue without my
help, but thought 1 would wordsmith a little bit anyway. I'm available to discuss if
desired, and will be off work on Friday this week.
Respectfully submitted,
~0r~
n:::.virl W K r()crh
~.6530
W:
H:
C:
File: CV _Utility- Tax_Amendment_200807
printed: 1:00 AM 711712008