City of Union City

Measure WW - Majority Approval Required

CITY ATTORNEY’S IMPARTIAL ANALYSIS 

The City Council of the City of Union City is submitting to the voters the question of whether to approve an ordinance that would establish a five percent (5%) Utility Users Tax (“UUT”) on telecommunication (including landline telephone and cell phone services), video (including cable television), and electricity and gas services within the City.  The UUT is based upon the amount charged by each service provider for the services used.  Service providers would collect the UUT on service user bills and remit the revenue collected to the City. 

The UUT would terminate automatically on December 31, 2028, unless extended by the voters. 

Because Measure WW does not limit the use of UUT revenue, it is a “general tax,” and the funds provided are available for any legitimate governmental purpose.  As noted in the ballot question, examples of uses of revenue from the UUT include senior citizen support and meal programs during the COVID-19 crisis and recovery, 911 emergency services and paramedic response, streets and pothole repair, fire protection services, disaster and health crisis preparedness, youth violence prevention and drug intervention programs, and other city services.  Measure WW would generate approximately $6.1 million in funds annually. California law prevents the State and Alameda County from directing revenue from the UUT to the State or County for their use.  

Measure WW would provide approved applicants with an exemption from payment of the UUT for: 1) senior citizens who are seventy (70) years or older living alone or with a spouse or domestic partner and at least one spouse or partner meets the age criteria for the exemption; 2) low-income persons of any age who are enrolled in the Pacific Gas & Electric Company CARE Program (“California Alternate Rates for Energy”); and 3) households with a household income of less than fifty percent (50%) of the area median family income for the County of Alameda as established by the United States Department of Housing and Urban Development.   

Measure WW requires the City Council to establish a five-member citizens’ oversight committee to review and annually report on the receipt of revenue and expenditure of UUT funds.  The Measure requires annual independent audits to verify that the UUT has been properly applied, collected, and remitted.  

A “Yes” vote is a vote to approve a five percent (5%) tax for eight (8) years on telecommunication, video, and electricity and gas services, with annual audits and review by a citizens’ oversight committee. A “No” vote is a vote against the UUT. Measure WW will be approved if it receives a simple majority of “Yes” votes of those voting on the Measure. 

The above statement is an impartial analysis of Measure WW. If you desire a copy of the proposed ordinance, please call the City Clerk’s office at (510) 675-5448 and a copy will be mailed at no cost to you. 

DATED: August 19, 2020 

Kristopher J. Kokotaylo, City Attorney 

FULL TEXT OF MEASURE WW

ORDINANCE NO.___

AN ORDINANCE OF THE CITY OF UNION CITY TO ADD CHAPTER 3.28 TO THE UNION CITY MUNICIPAL CODE TO ESTABLISH A UTILITY USERS TAX

 

WHEREAS, like most cities across the Bay Area and the State, Union City has been greatly affected by the COVID-19 pandemic and related steep downturn in economic activity; and

 

WHEREAS, prior to the COVID-19 pandemic's impact on the local economy, Union City was experiencing a budget deficit of $3.5 million in 2019-20 and projected to grow to more than $14 million annually over the next five years; and

 

WHEREAS, to address the deficit, Union City made significant cuts, including closing an underutilized fire station, reducing library and community center hours and eliminating community policing services and school resource officers; and

 

WHEREAS, for the last 16 years, Union City has relied upon funding from a Public Safety Parcel Tax that has provided approximately $4 million annually to fund 911 emergency response, fire, police, and youth and family services and this funding will expire in June 2021; and

 

WHEREAS, the loss of funding from the Public Safety Parcel Tax in addition to Union City's ongoing structural deficit plus decreased revenue from COVID-19 reduced economic activity will result in a projected revenue loss of $26 million over the next four years; and

 

WHEREAS, revenue loss of this magnitude will require cuts of approximately 20% of Union City's General Fund operations budget; and

 

WHEREAS, budget reductions of this magnitude will require deep and devastating cuts to city services including essential 9-1-1 emergency response services, fire protection, crime prevention, road and pothole repair and services for youth, families and seniors; and

 

WHEREAS, the City Council believes that locally-controlled revenue is needed to prevent the most devastating cuts to essential city services that Union City residents rely upon; and

 

WHEREAS, passage of a temporary and modest utility users tax will provide approximately $6 million annually to preserve the most essential city services that keep Union City safe and maintain quality of life for residents; and

 

WHEREAS, local businesses will pay their fair share of the cost of this measure so homeowners don't shoulder the entire burden; and

 

WHEREAS, additional local revenue is needed to maintain paramedic and fire protection services, 9-1-1 emergency response and emergency and disaster preparedness programs, including for a public health crisis; and

 

WHEREAS, additional local revenue is needed to ensure senior citizens receive support and access to food during the COVID-19 crisis and during the recovery; and

 

WHEREAS, additional local revenue is needed to maintain street and pothole repair; and

 

WHEREAS, additional local revenue is needed to preserve youth violence prevention and drug and gang intervention programs to keep kids off the street and maintain community safety; and

 

WHEREAS, all funds from this measure are subject to strict fiscal accountability protections, including an independent citizens' oversight committee, mandatory financial audits, and yearly reports to the community to ensure that all funds are spent properly; and

 

WHEREAS, this measure will give Union City local control over local funds for local needs and no funds can be taken by Sacramento; and

 

WHEREAS, the proposed measure would approve a utility users tax on electricity, gas, telecommunications and video services at a 5% rate until December 31, 2028. The tax shall be approved if the measure receives at least a simple majority of affirmative votes of those voting on the measure; and

 

WHEREAS, the People of the City of Union City desire to establish the utility users tax at a 5% rate for an eight (8) year period.

 

NOW, THEREFORE, the People of the City of Union City do ordain as follows:

 

SECTION 1. Recitals.

 

The above recitals are true and correct and made a part of this Ordinance.

 

SECTION 2. Municipal Code Amendment.

 

The Union City Municipal Code is amended as provided in Exhibit A, attached hereto and incorporated herein by reference.

 

SECTION 3. Adjustment of Appropriations Limit. Pursuant to Article XIIIB of the Constitution of the State of California and applicable laws, the appropriations limit for the City is hereby increased by the aggregate sum authorized to be levied by this tax for fiscal year 2020-21 and each year thereafter.

 

SECTION 4. Compliance with the California Environmental Quality Act. The approval of this ordinance is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., "CEQA," and 14 Cal. Code Reg. §§ 15000 et seq., "CEQA Guidelines"). This ordinance imposes a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular action. As such, under CEQA Guidelines section 15378(b)(4), the ordinance is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax were used for a purpose that would have either such effect, the city would undertake the required CEQA review for that particular project. Therefore, pursuant to CEQA Guidelines section 15060, CEQA analysis is not required.

 

SECTION 5. Severability.

If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the Ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable. The People of the City of Union City hereby declare that they would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable.

 

SECTION 6. Amendment or Repeal.

Chapter 3.28 of title 3 of the Union City Municipal Code may be repealed or amended by the City Council without a vote of the People. However, as required by Article XIII C of the California Constitution, voter approval is required for any amendment of any provision that would increase the rate of any tax levied pursuant to this Ordinance. The People of the City of Union City affirm that the following actions shall not constitute an increase of the rate of a tax:

 

A. The restoration of the rate of the tax to a rate that is no higher than that set by this Ordinance if the City Council has acted to reduce the rate of the tax;

 

B. An action that interprets 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 clarification) is not inconsistent with the language of this Ordinance;

 

C. 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,

 

D. The collection of the tax imposed by this Ordinance, even if the City had for some period of time failed to collect the tax.

 

SECTION 7. Codification.

Upon adoption of this Ordinance pursuant to the voter approval referenced above, the City Clerk, in consultation with the City Attorney, is hereby authorized and directed to codify this Ordinance in the Union City Municipal Code.

 

SECTION 8. Publication and Effective Date.

 

Within fifteen (15) days from and after adoption, this Ordinance shall be published once in the Tri-City Voice, a newspaper of general circulation printed and published in Alameda County and circulated in the City of Union City, in accordance with California Government Code Section 36933. If this Ordinance is approved by a majority of the voters voting on the issue at the November 3, 2020 election, pursuant to Elections Code Section 9217, this Ordinance shall become effective ten (10) days after the Council declares the results of the election.

 

Exhibit A

 

Chapter 3.28 - Utility Users Tax

 

3.28.010 - Ordinance title.

 

This Chapter shall be known as the "Utility Users Tax" of the City of Union City.

 

3.28.020 - Definitions.

 

The following words and phrases whenever used in this chapter shall be construed as defined in this section.

 

"Ancillary telecommunication services" mean services that are associated with or incidental to the provision, use or enjoyment of telecommunications services, including but not limited to the following services:

 

A. "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 service does not include the telecommunications services used to reach the conference bridge.

 

B. "Detailed telecommunications billing service" means an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement.

 

C. "Directory assistance" means an ancillary service of providing telephone number information and/or address information.

 

D. "Vertical service" means an ancillary service that is offered in connection with one or more telecommunications services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services.

 

E. "Voice mail service" means an ancillary service that enables the customer to store, send, or receive recorded messages. Voice mail service does not include any vertical services that the customer may be required to have in order to utilize the voice mail service.

 

"Ancillary video services" mean services that are associated with or incidental to the provision or delivery of video services, including but not limited to electronic program guid. services, search functions, recording services, or other interactive services or communications that are associated with or incidental to the provision, use or enjoyment of video services.

 

"Billing address" means the mailing address of the service user where the service supplier submits invoices or bills for payment by the customer.

 

"City" means the City of Union City.

 

"City Manager" shall mean the City Manager, or his or her authorized representative.

 

"Gas" means natural or manufactured gas or any alternate hydrocarbon fuel that may be substituted therefore.

 

"Mobile telecommunications service" means commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations and as set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations there under.

 

"Month" means a calendar month.

 

"Non-utility service supplier" means the following:

A. A service supplier, other than a provider of electric distribution services to all or a significant portion of the City that generates electricity for sale to others, including, but not limited to, any publicly-owned electric utility, investor-owned utility, co-generator, distributed generation provider, exempt wholesale generator, municipal utility district, federal power marketing agency, electric rural cooperative, or other supplier or seller of electricity.

 

B. An electric service provider (ESP), electricity broker, marketer, aggregator (including a community choice aggregator), pool, operator, or other electricity supplier other than a provider of electric distribution services to all or a significant portion of the City that sells or supplies electricity or supplemental services to electricity users within the City.

 

C. A gas service supplier, aggregator, marketer or broker, other than a provider of gas distribution services to all or a significant portion of the City that sells or supplies gas or supplemental services to gas users within the City.

 

"Paging service" means a telecommunications service that provides transmission of coded radio signals for the purpose of activating specific pagers; such transmissions may include messages and/or sounds.

 

"Person" means, without limitation, any natural individual, firm, trust, common law trust, estate, partnership of any kind, association, syndicate, club, joint stock company, joint venture, joint power authority, limited liability company, corporation (including foreign, domestic, and non-profit), municipal district or municipal corporation (other than the City), special district, school district, cooperative, receiver, trustee, guardian, or other representative appointed by order of any court.

 

"Place of primary use" means the street address where the customer's use of a taxable service primarily occurs, which must be the residential street address or the primary business street address of the customer.

 

"Post-paid telecommunication service" means the telecommunication service obtained by making a payment on a telecommunication-by-telecommunication basis either through the use of a payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a service number which is not associated with the origination or termination of the telecommunication service.

 

"Prepaid telecommunication service" (including prepaid mobile telecommunication service) means the right to access telecommunication services, which must be paid for in advance and which enables the origination of communications using an access number or authorization code, whether manually or electronically dialed.

 

"Private telecommunication service" means a telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels. A communications channel is a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points (i.e., the location where the customer either inputs or receives the communications).

 

"Service address" means the residential street address or the business street address of the service user. For a telecommunication service user, "service address" means either:

 

A. The location of the service user's communication equipment from which the communication originates or terminates, regardless of where the communication is billed or paid; or,

 

B. If the location in subsection (A) of this definition is unknown (e.g., mobile telecommunications service or VoIP service), the service address means the location of the service user's place of primary use.

 

C. For prepaid telecommunication service, "service address" means the point of sale of the services where the point of sale is within the City, or if unknown, the known address of the service user (e.g., billing address or location associated with the service number), which locations shall be presumed to be the place of primary use.

 

"Service supplier" means any entity or person, including the City, that provides or sells telecommunication, video, gas, or electrical service to a user of such service within the City.

 

"Service user" means a person required to pay a tax imposed under the provisions of this chapter.

 

"Tax Administrator" means the finance director of the City or his or her designee.

 

"Telecommunications service" means the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points, whatever the technology used. The term "telecommunications services" includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing without regard to whether such services are referred to as voice over internet protocol (VoIP) services or are classified by the Federal Communications Commission as enhanced or value added, and includes video and/or data services that is functionally integrated with "telecommunication services". "Telecommunications services" include, but are not limited to the following services, regardless of the manner or basis on which such services are calculated or billed; ancillary telecommunication services; intrastate, interstate, and international telecommunication services; mobile telecommunications service; prepaid telecommunication service; post-paid telecommunication service; private telecommunication service; paging service; 800 service (or any other toll-free numbers designated by the Federal Communications Commission); 900 service (or any other similar numbers designated by the Federal Communications Commission for services whereby subscribers who call in to pre-recorded or live service).

 

"Video programming" means those programming services commonly provided to subscribers by a "video service supplier" including but not limited to basic services, premium services, audio services, video games, pay-per-view services, video on demand, origination

programming, or any other similar services, regardless of the content of such video programming, or the technology used to deliver such services, and regardless of the manner or basis on which such services are calculated or billed.

 

"Video services" mean video programming and any and all services related to the providing, recording, delivering, use or enjoyment of video programming (including origination programming and programming using Internet Protocol, e.g., IP-TV and IP-Video) using one or more channels by a "video service supplier," regardless of the technology used to deliver, store or provide such services, and regardless of the manner or basis on which such services are calculated or billed, and includes ancillary video services, data services, telecommunication services, or interactive communication services that are functionally integrated with video services.

 

"Video service supplier" means any person or service that provides or sells video programming, or provides or sells the capability to receive video programming, including any telecommunications that are ancillary, necessary or common to the provision, use or enjoyment of the video programming, to or from a business or residential address in the City, where some fee is paid, whether directly or included in dues or rental charges for that service, whether or not public rights-of-way are utilized in the delivery of the video programming or telecommunications. A "video service supplier" includes, but is not limited to, multi-channel video programming distributors (as defined in 47 U.S.C.A. Section 522(13); open video systems (OVS) suppliers; and suppliers of cable television; master antenna television; satellite master antenna television; multi-channel multipoint distribution services (MMDS); video services using Internet Protocol (e.g., IP-TV and IP-Video, which provide, among other things, broadcasting and video on demand), direct broadcast satellite to the extent federal law permits taxation of its video services, now or in the future; and other suppliers of video services (including two-way communications), whatever their technology.

 

"VoIP (Voice over Internet Protocol) means the digital process of making and receiving real-time voice transmissions over any Internet Protocol network.

 

"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" or "888" toll-free calling, and any subsequent numbers designated by the Federal Communications Commission.

 

"900 service" means an inbound toll telecommunications service purchased by a subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded announcement or live service. "900 service" does not include 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 for pay for services calls.

 

3.28.030 - Statutory, Constitutional and Other Exemptions.

 

A. Consistency with State and Federal Law. 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 of California.

 

B. Exemption Application. Any service user that is exempt pursuant to subsection (A) from any tax imposed by this chapter pursuant 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 (such as a public school district or a community college district) 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 utility 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 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 apply and obtain an exemption pursuant to this section shall not be entitled to a refund of utility user taxes collected and remitted to the Tax Administrator from such service user as a result of such noncompliance. The decision of the Tax Administrator may be appealed pursuant to Section 3.28.190(A) of this chapter. Filing an application with the Tax Administrator and appeal to the City Manager pursuant to Section 3.28. l 90(B) of this chapter is a prerequisite to a suit thereon.

 

C. The City. Nothing in this chapter shall be construed as imposing a tax upon the City of Union City.

 

D. Low Income Exemptions.

1. The taxes imposed by this chapter shall not apply to any household within the City with a household income of less than fifty percent (50%) of the area median family income for the County of Alameda as adjusted for household size, as most recently established by the United States Department of Housing and Urban Development ("HUD"), upon presentation to the Tax Administrator of a written request for such exemption and reasonable proof of qualification for the exemption. The Tax Administrator will advise such service suppliers of the exempt status of its customer. In the event that HUD ceases to publish the area median income for the County of Alameda, the Tax Administrator shall use data equivalent data published by another state or federal agency. Individuals receiving the exemption granted by this subsection must reside at the location receiving the service; the exemption shall not apply to any nonresidential service location .

2. A residential service user shall be exempt from the gas, electric, telecommunications, and video tax of this chapter if he or she is qualified and is enrolled in Pacific Gas and Electric Company's (PG&E) CARE Program ("California Alternate Rates for Energy" program). Individuals receiving the exemption granted by this subsection must reside at the location receiving the service; the exemption shall not apply to any nonresidential service location. A residential service user that is qualified and is enrolled in the CARE Program shall be exempted from the gas, electric, telecommunications and video tax of this chapter upon presentation to the Tax Administrator of a written request for such exemption. The Tax Administrator will advise such service suppliers of the exempt status of its customer.

 

E. Senior Citizen Exemption.

1. An exemption from any tax imposed under this chapter shall be granted to any residential service user who is seventy years of age or older if such service user resides alone or if he or she shares his or her residence with a spouse or a registered domestic partner, and at least one spouse or partner meets the age criteria for the exemption.

2. Any service user seeking an exemption pursuant to this subsection (E) from any tax imposed by this chapter shall file an application with the Tax Administrator for an exemption. Said application shall be made upon a form approved by the Tax Administrator and shall state those facts, declared under penalty of perjury, which qualify the applicant for an exemption, and shall include the names of all service suppliers serving that service user. A driver's license or identification (ID) Card issued by the California Department of Motor Vehicles shall be prima facie proof of age. The Tax Administrator will advise such service suppliers of the exempt status of its customer.

 

F. Application Processing.

1. The Tax Administrator shall within sixty days of receipt of an application for exemption determine whether the exemption is granted, and if so notify the service supplier. The exemption shall apply from the date of the Tax Administrator's determination that the household qualifies.

2. If the Tax Administrator determines that an application for exemption is faulty, that the applicant has failed to truthfully set forth facts, or that the facts do not support the application for exemption, the application shall be denied in writing to the applicant. The applicant shall thereafter have a right to file an amended application, or to appeal the Tax Administrator's decision to the City Manager within a ten-day period after the mailing date of the Tax Administrator's notification. In the case of an appeal, the City Manager shall review the facts in consultation with the City Attorney, and shall render a final determination on such appeal.

 

G. Effective Date of Exemption. The exemption granted to a person pursuant to this section shall become effective on the beginning of the first regular billing period which commences after the Tax Administrator has notified the service supplier that an exemption has been granted. Upon a showing of hardship by a service supplier, the Tax Administrator may, as an alternative implement this section by requiring the exempt person to pay the tax and seek a refund under Section 3.28.180. The Tax Administrator shall provide a refund claim form for this purpose.

 

H. Continuing Eligibility. The Tax Administrator in his or her sole discretion may require annual written verification from the service user of his or her continuing eligibility for any exemption granted under this section.

 

3.28.040 - Telecommunications users tax.

 

A. Telecommunications User's Tax Rate. There is hereby imposed a tax upon every person in the City using telecommunication services. The tax imposed by this section shall be at the rate of five percent of the charges made for such services and shall be collected from the service user by the telecommunication services supplier or its billing agent. There is a rebuttable presumption that telecommunication services, which are billed to a billing or service address in the City, are used, in whole or in part, within the City's boundaries and such services are subject to taxation under this chapter. There is also a rebuttable presumption that prepaid telecommunication services sold within the City are used, in whole or in part, within the City and are therefore subject to taxation under this chapter. If the billing address of the service user is different from the service address, the service address of the service user shall be used for purposes of imposing

the tax. 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. Sourcing Rules. "Mobile telecommunications service" shall be sourced in accordance with the sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124). The Tax Administrator may issue and disseminate to communication service suppliers, which are subject to the tax collection requirements of this chapter, sourcing rules for the taxation of other communication services, including but not limited to post-paid communication services, prepaid communication services, VoIP and private communication services. In promulgating any sourcing rules hereunder the Tax Administrator shall take into account but shall not be legally bound by custom and common practice that furthers administrative efficiency and minimizes taxation by more than one state of the same service usage, commonly referred to as multi-jurisdictional taxation. In doing so the Tax Administrator may refer to and/or rely upon the Streamlined Sales and Use Tax Agreement, and/or any other reasonable precedent or resource.

 

C. Authority for Administrative Rulings. The Tax Administrator may issue and disseminate to telecommunication service suppliers which are subject to the tax collection requirements of this chapter, an administrative ruling identifying those telecommunication services, or charges therefore, that are subject to the tax of subsection (A) above.

 

D. Specific Inclusions in Telecommunication Services. As used in this section, the term "telecommunication services" shall include, but are not limited to, charges for the following: connection, reconnection, termination, movement, or change of telecommunication services; late payment fees; detailed billing; central office and custom calling features (including, but not limited to, call waiting, call forwarding, caller identification, and three-way calling); voice mail and other messaging services; directory assistance; access and line charges; universal service charges ; all fees, charges and surcharges, including those mandated by state or federal regulatory agencies to fund such agencies or various mandated programs (whether such charges or surcharges are imposed on the service supplier or the customer); local number portability charges; and text and instant messaging.

 

E. Specific Exclusions from Telecommunications Services. As used in this section, "telecommunications services," shall not include digital downloads that are not ancillary telecommunications services such as books, music, ringtones, games, and similar digital products.

 

F. Multi-Jurisdictional Taxation. 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 in such other state or local jurisdiction; provided, however, the amount of credit shall not exceed the tax owed to the City under this section.

 

G. Collection of Telecommunication Users Tax. The telecommunication user tax imposed by this section shall be collected from the service user by the service supplier. The amount of tax collected in one month shall be remitted to the Tax Administrator , and must be received by the Tax Administrator on or before the twentieth day of the following month.

 

3.28.050 - Video users tax.

 

A. Video Users Tax Rate. There is hereby imposed a tax upon every person in the City using video services from a video provider. The tax imposed by this section shall be at the rate of five percent of the charges made for such services and shall be collected from the service user by the video service supplier or its billing agent. There is a rebuttable presumption that video services that are billed to a billing or service address in the City, are used, in whole or in part, within the City's boundaries, and such services are subject to taxation under this chapter. If the billing address of the service user is different from the service address, the service address of the service user shall be used for purposes of imposing the tax.

 

B. Video Charges. As used in this section, the term "charges" shall include , but is not limited to, charges for the following:

1. Regulatory fees and surcharges, franchise fees, and access fees (e.g., "PEG" fees), whether designated on the customer's bill or not, or whether they are imposed on the service provider or the customer.

2. Initial installation of equipment necessary for provision and receipt of video services.

3. Late fees, collection fees, bad debt recoveries, and return check fees.

4. Activation fees, reactivation fees, and reconnection fees.

5. Video programming and video services.

6. Ancillary video services (e.g., electronic program guide services, recording functions, search functions, or other interactive services or communications that are ancillary, necessary or common to the use or enjoyment of video services) .

7. Equipment leases (e.g., remote, recording or search devices, converters, remote devices).

8. Service calls, service protection plans, name changes, changes of services, and special services.

 

C. Charges Further Defined. As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the video services.

 

D. Authority for Administrative Rulings. The Tax Administrator may issue and disseminate to video service suppliers which are subject to the tax collection requirements of this chapter an administrative ruling identifying those video services or charges therefor that are subject to or not subject to the tax of subsection (A) above

 

E. Collection of Video Users Tax. The tax imposed by this section shall be collected from the service user by the video service supplier, its billing agent, or a reseller of such services. In the case of video service, the service user shall be deemed to be the purchaser of the bulk video service (e.g., an apartment owner), unless such service is resold to individual users, in which case the service user shall be the ultimate purchaser of the video service. The amount of tax collected in one month shall be remitted to the Tax Administrator, and must be received by the Tax Administrator on or before the twentieth day of the following month.

 

3.28.060 - Electricity users tax.

 

A. Electricity Users Tax Rate. There is hereby imposed a tax upon every person in the City using electricity. The tax imposed by this section shall be at the rate of five percent of the charges made for such electricity, and for any supplemental services or other associated activities directly related to and/or necessary for the provision of electricity to the service users that are provided by a service supplier or non-utility service supplier to a service user.

 

B. Electricity Charges. As used in this section, the term "charges" shall include, but is not limited to, the following charges:

1. Energy charges.

2. Distribution or transmission charges.

3. Metering charges.

4. Stand-by, reserves, firming, ramping, voltage support, regulation, emergency or other similar minimum charges for services.

5. Customer charges, late charges, service establishment or reestablishment charges, demand charges, fuel or other cost adjustments, power exchange charges, independent system operator (ISO) charges, stranded investment or competitive transition charges (CTC), public purpose program charges, nuclear decommissioning charges, trust transfer amounts (bond financing charges), franchise fees, franchise surcharges, annual and monthly charges, and other charges, fees, or surcharges which are necessary for or common to the receipt use or enjoyment of electric service; and,

6. Charges, fees, or surcharges for electric services or programs, which are mandated by the California Public Utilities Commission or the Federal Energy Regulatory Commission, whether or not such charges, fees, or surcharges appear on a bundled or line item basis on the customer billing, or whether they are imposed on the service provider or the customer.

 

C. Electricity Charges Further Defined. As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the electricity or services related to the provision of such electricity.

 

D. Survey of Electricity Service Suppliers-Authority for Administrative Rulings. The Tax Administrator shall, from time to time, survey the electric service suppliers in the City to identify the various unbundled billing components of the electric retail service that are being offered to customers within the City, and the charges therefore, 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 that are: (1) necessary for or common to the receipt, use and enjoyment of electric service; or (2) currently are or historically have been included in a single or bundled rate for electric service by a local distribution company to a class of retail customers. Charges for such components and items shall be subject to the tax of subsection (A) above.

 

E. "Using Electricity" Further Defined. As used in this section the term "using electricity" shall not include the mere receiving of such electricity by an electrical corporation or governmental agency at a point within the City for resale.

 

F. Collection of Electricity Users Tax. The tax on electricity provided by self-production or by a non-utility service supplier not under the jurisdiction of this chapter shall be collected and remitted in the manner set forth in Section 3.28.080 of this chapter. All other taxes on charges for electricity imposed by this section shall be collected from the service user by the electric service supplier or its billing agent. The amount of tax collected in one month shall be remitted to the Tax Administrator and must be received by the Tax Administrator on or before the twentieth 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 day of the following month provided that such person shall submit an adjusted payment or request for credit as appropriate within sixty days following each calendar quarter. The credit, if approved by the Tax Administrator, may be applied against any subsequent remittance that becomes due.

 

3.28.070 - Gas users tax.

 

A. Gas Users Tax Rate. There is hereby imposed a tax upon every person in the City using gas that is delivered through a distribution system or by mobile transport. The tax imposed by this section shall be at the rate of five percent of the charges made for such gas, including all services related to the storage, transportation and delivery of such gas, and shall apply to all uses of gas, including but not limited to, heating, electricity generation, or the use of gas as a component of a manufactured product.

 

B. Gas Charges. As used in this section, the term "charges" shall apply to all services components and items for gas service that are: (1) necessary for or common to the receipt, use, or enjoyment of gas service; or, (2) currently are or historically have been included in a single or bundled rate for gas service by a local distribution company to a class of retail customers. The term "charges" shall include, but is not limited to, the following charges:

1. The commodity charges for purchased gas, or the cost of gas owned by the service user (including the actual costs attributed to chilling, production, lifting, storage, gathering, trunk-line, pipeline, and other operating costs associated with the production and delivery of such gas), which is delivered through a gas pipeline distribution system or by mobile transportation .

2. Gas transportation charges (including interstate charges to the extent not included in commodity charges).

3. Storage charges; provided, however, that the service supplier shall not be required to apply the tax to any charges for gas storage services when the service supplier cannot, as a practical matter, determine the jurisdiction where such stored gas is ultimately used; but it shall be the obligation of the service user to self-collect the amount of tax not applied to any charge for gas storage by the service supplier and to remit the tax to the appropriate jurisdiction .

4. Capacity or demand charges, late charges, service establishment or reestablishment charges, transition charges, customer charges, minimum charges, annual and monthly

charges, and any other charges, which are necessary or common to the receipt , use and enjoyment of gas service.

5. Charges, fees, or surcharges for gas services or programs, which are mandated by the California Public Utilities Commission or the Federal Energy Regulatory Commission, whether or not such charges, fees, or surcharges appear on a bundled or line item basis on the customer billing, or whether they are imposed on the service provider or the customer.

 

C. Gas Charges Further Defined. As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the gas or services related to the delivery of such gas.

 

D. Survey of Gas Service Suppliers; Authority for Administrative Rulings. The Tax Administrator from time to time may survey the gas 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 therefore, including those items that are mandated by state or federal regulatory agencies as a condition of providing such gas service. The Tax Administrator, therea fter, may issue and disseminate to such gas service suppliers an administrative ruling identifying those components and items which are: (1) necessary for or common to the receipt use or enjoyment of gas service, or, (2) currently are or historically have been included in a single or bundled rate for gas service by a local distribution company to a class of retail customers. Charges for such components and items shall be subject to the tax of subsection (A) above.

E. Exclusion for Resale. There shall be excluded from the calculation of the tax imposed in this section charges made for gas which is to be resold and delivered through a pipeline distribution system.

F. Collection of Gas Users Tax. The tax on gas provided by self-production or by a non­ utility service supplier not under the jurisdiction of this chapter shall be collected and remitted in the manner set forth in Section 3.28.080 of this chapter. All other taxes on charges for gas imposed by this section shall be collected from the service user by the gas service supplier or its billing agent. The amount of tax collected in one month shall be remitted to the Tax Administrator and must be received by the Tax Administrator on or before the twentieth 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 day of the following month provided that such person shall submit an adjusted payment or request for credit as appropriate within sixty days following each calendar quarter. The credit, if approved by the Tax Administrator, may be applied against any subsequent remittance that becomes due.

 

3.28.080 - Collection of Tax from Service Users Receiving Direct Purchase of Gas or Electricity.

 

A. Report to Tax Administrator. Any service user subject to the tax imposed by Sections

3.28.060 or 3.28.070 that produces gas or electricity for self-use, that receives gas or electricity, including any related supplemental services, directly from a non-utility service supplier not under the jurisdiction of this chapter, or that, 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 days of such use. In lieu of paying said actual tax, the service user may, at its option, remit to the Tax Administrator within thirty 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 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. Investigation. 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 within the City. The rate schedule for this purpose shall be available from the City.

 

3.28.090 - Bundling taxable items with non-taxable items.

 

If any non-taxable charges are combined with and not separately stated from taxable service charges on the customer bill or invoice of a service supplier, the combined charge is subject to tax unless the service supplier identifies, by reasonable and verifiable standards, the portions of the combined charge that are 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. If the service supplier offers a combination of taxable and non-taxable services, and the charges are separately stated, then for taxation purposes, the values assigned the taxable and non-taxable services shall be based on its books and records kept in the regular course of business and in accordance with generally accepted accounting principles, and not created and maintained for tax purposes. The service supplier has the burden of proving the proper valuation of the taxable and non-taxable services.

 

3.28.100 - 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 utility users tax to the fullest extent permitted by state and federal law, and as it may change from time to time by judicial interpretation or by statutory enactment. Any telecommunication service (including VoIP) used by a person with a service address in the City which service is capable of terminating a call to another person on the general telephone network shall be subject to a rebuttable presumption that "substantial nexus/minimum contacts" exists for purposes of imposing a tax or establishing a duty to collect

and remit a tax under this chapter. A service supplier shall be deemed to have sufficient activity in the City for tax collection and remittance purposes if its activities include but are not limited to any of the following maintains or has within the City directly or through an agent, affiliate, or subsidiary, a place of business of any nature; solicits business in the City by employees, independent contractors, resellers, agents, or other representatives; solicits business in the City on a continuous regular, seasonal, or systematic basis by means of advertising that is broadcast or relayed from a transmitter within 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 market in the City for the provision of services that are subject to a tax under this chapter.

 

3.28.110 - Duty to collect-Procedures.

 

A. Collection by Service Suppliers. The duty of service suppliers to collect and remit the taxes imposed by the provisions of this chapter shall be performed as follows:

1. The tax shall be collected by service suppliers insofar as practicable at the same time as, and along with, the collection of the charges made in accordance with the regular billing practice of the service supplier. Where the amount paid by a service user to a service supplier is less than the full amount of the charge and tax which was accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid. In those cases where a service user has notified the service supplier of refusal to pay the tax imposed on said charges, Section 3.28.120 shall apply.

2. The duty of a service supplier to collect the tax from a service user shall commence with the beginning of the first regular billing period applicable to the service user where all charges normally included in such regular billing are subject to the provisions of this chapter. Where a service user receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period.

 

B. Filing Return and Payment. Each person required by this chapter to remit a tax shall file a return to the Tax Administrator, on forms approved by the Tax Administrator, on or before the due date. The full amount of the tax collected shall be included with the return and filed with the Tax Administrator. The Tax Administrator is authorized to require such additional information as he or she deems necessary to determine if the tax is being levied, collected, and remitted in accordance with this chapter. Returns are due immediately upon cessation of business for any reason. Pursuant to Revenue and Tax Code Section 7284.6, the Tax Administrator, and its agents, shall maintain such filing returns as confidential information that is exempt from the disclosure provisions of the Public Records Act.

3.28.120 - Collection penalties--Service suppliers.

 

A. Due Date for Taxes--Delinquencies. Taxes collected from a service user are delinquent if not received by the Tax Administrator on or before the due date. Should the due date occur on a weekend or legal holiday, the return must be received by the Tax Administrator on the first regular working day following the weekend or legal holiday. A direct deposit, including

electronic fund transfers and other similar methods of electronically exchanging monies between financial accounts, made by a service supplier in satisfaction of its obligations 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.

B. Failure to Collect or Remit. If the person required to collect and/or remit a tax imposed pursuant to this chapter fails to collect the tax (by failing to properly assess the tax on one or more services or charges on the customer's billing) or fails to remit the tax collected on or before the due date, the Tax Administrator shall attach a penalty for such delinquencies or deficiencies at the rate of fifteen percent of the total tax that is delinquent or deficient in the remittance, and shall pay interest at the rate of and 75/lO0ths percent per month, or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent , until paid.

C. Penalties for Fraud or Gross Negligence in Reporting or Remitting. The Tax Administrator shall have the power to impose additional penalties upon persons required to collect and remit taxes pursuant to the provisions of this chapter for fraud or gross negligence in reporting or remitting at the rate of fifteen percent of the amount of the tax collected and/or required to be remitted, or as recomputed by the Tax Administrator.

 

D. Penalties Due as Tax. For collection purposes only, every 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.

 

E. Authority to Modify Due Dates. Notwithstanding the foregoing, the Tax Administrator may, in his or her discretion, modify the due dates of this chapter to be consistent with any uniform standards or procedures that are mutually agreed upon by other public agencies imposing a utility users tax, or otherwise legally established, to create a central payment location or mechanism.

 

3.28.130 - Actions to collect.

 

Any tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the City. Any such tax collected from a service user which has not been remitted to the Tax Administrator shall be deemed a debt owed to the City by the person required to collect and remit and shall no longer be a debt of the service user. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount, including penalties and interest as provided for in this chapter, along with any collection costs incurred by the City as a result of the person's noncompliance with this chapter, including, but not limited to, reasonable attorneys' fees. Any tax required to be collected by a service supplier or owed by a service user is an unsecured priority excise tax obligation under 11 U.S.C.A. Section 507(a)(8)(C). Service suppliers who seek to collect charges for service in bankruptcy proceedings shall also include in any such claim the amount of taxes due the City for those services, unless the Tax Administrator determines that such duty is in conflict with any federal or state law, rule, or regulation or that such action would be administratively impractical.

 

3.28.140 - Deficiency determination and assessment-Tax application errors.

 

A. Tax Deficiency Determinations. The Tax Administrator shall make a deficiency determination if he or she determines that any service user or service supplier required to pay or collect taxes pursuant to the provisions of this chapter has failed to pay, collect, and/or remit the proper amount of tax by improperly or failing to apply the tax to one or more taxable services or charges. Nothing herein shall require that the Tax Administrator institute proceedings under this section if, in the opinion of the Tax Administrator, the cost of collection or enforcement likely outweighs the tax benefit.

 

B. Notice of Deficiency. The Tax Administrator shall mail a notice of such deficiency determination to the person or entity allegedly owing the tax, which notice shall refer briefly to the amount of the taxes owed, plus interest at the rate of 75/100ths percent per month, or any fraction thereof, on the amount of the tax from the date on which the tax should have been received by the City. Within fourteen calendar days after the date of service of such notice, the person or entity allegedly owing the tax may request in writing to the Tax Administrator a hearing on the matter.

 

C. Hearing on Deficiency. If the person or entity allegedly owing the tax fails to request a hearing within the prescribed time period, the amount of the deficiency determination shall become a final assessment, and shall immediately be due and owing to the City. If such person or entity requests a hearing, the Tax Administrator shall cause the matter to be set for hearing, which shall be scheduled within thirty days after receipt of the written request for hearing. Notice of the time and place of the hearing shall be mailed by the Tax Administrator to such person at least ten calendar days prior to the hearing, and, if the Tax Administrator desires said person to produce specific records at such hearing, such notice may designate the records requested to be produced.

 

D. Determination after Hearing. At the time fixed for the hearing, the Tax Administrator shall hear all relevant testimony and evidence, including that of any other interested parties. At the discretion of the Tax Administrator, the hearing may be continued from time to time for the purpose of allowing the presentation of additional evidence. Within a reasonable time following the conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non-assessment), thereafter, by confirming, modifying or rejecting the original deficiency determination, and shall mail a copy of such final assessment to person or entity owing the tax. The decision of the Tax Administrator may be appealed pursuant to Section 3.28.160 of this chapter. Filing an application with the Tax Administrator and appeal to the City Manager pursuant to Section 3.28.160 of this chapter is a prerequisite to a suit thereon.

 

E. Delinquencies. Payment of the final assessment shall become delinquent if not received by the Tax Administrator on or before the thirtieth day following the date of receipt of the notice of final assessment. The penalty for delinquency shall be fifteen percent on the total amount of the assessment, along with interest at the rate of 75/100ths percent per month, or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date of delinquency, until paid. The applicable statute of limitations regarding a claim by the City seeking payment of a tax assessed under this chapter shall commence from the date of delinquency as provided in this subsection.

 

F. Notice of Delinquency. 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.

 

3.28.150 - Administrative remedy-Non-paying service users.

 

A. Administrative Remedies for the Obligation to Collect Tax. Whenever the Tax Administrator determines that a service user has deliberately withheld the amount of the tax owed by the service user from the amounts remitted to a person required to collect the tax, or whenever the Tax Administrator deems it in the best interest of the City, he or she may relieve such person of the obligation to collect the taxes due under this chapter from certain named service users for specific billing periods. To the extent the service user has failed to pay the amount of tax owed for a period of two or more billing periods, the service supplier shall be relieved of the obligation to collect taxes due. The service supplier shall provide the City with the names and addresses of such service users and the amounts of taxes owed under the provisions of this chapter. Nothing herein shall require that the Tax Administrator institute proceedings under this section if, in the opinion of the Tax Administrator, the cost of collection or enforcement likely outweighs the tax benefit.

 

B. Delinquency Penalty. In addition to the tax owed, the service user shall pay a delinquency penalty at the rate of fifteen percent of the total tax that is owed, and shall pay interest at the rate of 75/IO0ths percent per month, or any fraction thereof, on the amount of the tax, exclusive of penalties, from the due date, until paid.

 

C. Notice to Non-Paying Service User. The Tax Administrator shall notify the non-paying service user that the Tax Administrator has assumed the responsibility to collect the taxes due for the stated periods and demand payment of such taxes, including penalties and interest. The notice shall be served on the service user by personal delivery or by deposit of the notice in the United States mail, postage prepaid, addressed to the service user at the address to which billing was made by the person required to collect the tax; or, should the service user have a change of address, to his or her last known address.

 

D. Additional Penalties. If the service user fails to remit the tax to the Tax Administrator within thirty days from the date of the service of the notice upon him or her, the Tax Administrator may impose an additional penalty of fifteen percent of the amount of the total tax that is owed.

 

3.28.160 - Additional powers and duties of the Tax Administrator.

 

A. Enforcement by Tax Administrator. The Tax Administrator shall have the power and duty, and is hereby directed, to enforce each and all of the provisions of this chapter.

 

B. Administrative Regulations Regarding Payment. The Tax Administrator may adopt administrative rules and regulations consistent with provisions of this chapter for the purpose of interpreting, clarifying, carrying out, and enforcing the payment, collection, and remittance of the taxes herein imposed. A copy of such administrative rules and regulations shall be on file in the Tax Administrator's office. To the extent that the Tax Administrator determines that the tax imposed under this chapter shall not be collected in full for any period of time from any particular service supplier or service user, that determination shall be considered an exercise of the Tax Administrator's discretion to settle disputes and shall not constitute a change in taxing methodology for purposes of Government Code Section 53750 or otherwise. The Tax Administrator is not authorized to amend the City's methodology for purposes of Government Code Section 53750, and the City does not waive or abrogate its ability to impose the utility users tax in full as a result of promulgating administrative rulings or entering into agreements.

 

C. Administrative Agreements Regarding Billing Procedures. Upon a proper showing of good cause, the Tax Administrator may make administrative agreements, with appropriate conditions, to vary from the strict requirements of this chapter and thereby: (1) conform to the billing procedures of a particular service supplier so long as said agreements result in the collection of the tax in conformance with the general purpose and scope of this chapter; or (2) to avoid a hardship where the administrative costs of collection and remittance greatly outweigh the tax benefit. A copy of each such agreement shall be on file in the Tax Administrator's office, and are voidable by the Tax Administrator or the City at any time.

 

D. Compliance Audits. The Tax Administrator may conduct an audit, to ensure proper compliance with the requirements of this chapter, of any person required to collect and/or remit a tax pursuant to this chapter. The Tax Administrator shall notify said person of the initiation of an audit in writing. In the absence of fraud or other intentional misconduct, the audit period of review shall not exceed a period of three years next preceding the date of receipt of the written notice by said person from the Tax Administrator. Upon completion of the audit, the Tax Administrator may make a deficiency determination pursuant to Section 3.28.140 of this chapter for all taxes (and applicable penalties and interest) owed and not paid, as evidenced by information provided by such person to the Tax Administrator. If said person is unable or unwilling to provide sufficient records to enable the Tax Administrator to verify compliance with this chapter, the Tax Administrator is authorized to make a reasonable estimate of the deficiency. Said reasonable estimate shall be entitled to a rebuttable presumption of correctness.

 

E. Extension of Time. 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 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/lO0ths percent per month, prorated for any portion thereof.

 

F. Eligibility for Exemption. The Tax Administrator shall determine the eligibility of any person who asserts a right to exemption from, or a refund of, the tax imposed by this chapter.

 

G. Waiver of Penalties and Interest. Notwithstanding any provision in this Chapter 3.28 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 3.28 if the non-collection occurred in good faith. In determining whether the non-collection was in good faith, the Tax Administrator shall take into consideration the uniqueness of the product or service, industry practice or other precedence, or whether the person offers to voluntarily disclose its tax liability. The Tax Administrator may also participate with other utility users tax public agencies in conducting coordinated compliance reviews with the goal of achieving administrative efficiency and uniform tax application determinations, where possible. To encourage voluntary full disclosure and on-going cooperation on tax collection and remittance, the Tax Administrator, and its agents, may enter into agreements with the tax-collecting service providers and grant prospective only effect on any changes regarding the taxation of services or charges that were previously deemed by the service provider, in good faith and without gross negligence, to be non-taxable. In determining whether the non-collection was in good faith and without gross negligence, the Tax Administrator shall take into consideration the uniqueness of the product or service, industry practice or other precedence, and whether the disclosure was voluntarily made by the service provider or its agent.

 

3.28.170 - Records.

 

A. Retention of Necessary Tax Records. 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 years, all records as may be necessary to determine the amount of such tax as he/she may have been liable for the collection of and remittance to the Tax Administrator, which records the Tax Administrator shall have the right to inspect at a reasonable time.

 

B. Administrative Subpoenas. The City through the City council may issue an administrative subpoena to compel a person to deliver to the Tax Administrator copies of all records deemed necessary by the Tax Administrator to establish compliance with this chapter, including the delivery of records in a common electronic format on readily available media if such records are kept electronically by the person in the usual and ordinary course of business. As an alternative to delivering the subpoenaed records to the Tax Administrator on or before the due date provided in the administrative subpoena, such person may provide access to such records outside the City on or before the due date, provided that such person shall reimburse the City for all reasonable travel expenses incurred by the City to inspect those records, including travel, lodging, meals, and other similar expenses, but excluding the normal salary or hourly wages of those persons designated by the City to conduct the inspection.

 

C. Non-Disclosure Agreements. The Tax Administrator is authorized to execute a non­ disclosure agreement approved by the City Attorney to protect the confidentiality of customer information pursuant to California Revenue and Tax Code Sections 7284.6 and 7284.7.

 

D. Use of Billing Agents. If a service supplier uses a billing agent or billing aggregator to bill, collect, and/or remit the tax, the service supplier shall: (1) provide to the Tax Administrator the name, address and telephone number of each billing agent and billing aggregator currently authorized by the service supplier to bill, collect, and/or remit the tax to the City; and (2) upon request of the Tax Administrator, deliver, or effect the delivery of, any information or records in the possession of such billing agent or billing aggregator that, in the opinion of the Tax Administrator, is necessary to verify the proper application, calculation, collection and/or remittance of such tax to the City.

 

E. Access to Necessary Records. 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 requested in an administrative subpoena within the time specified, then the Tax Administrator may impose a penalty of five hundred dollars on such person for each day following: (1) the initial date that the person refuses to provide such access; or (2) the due date for production of records as set forth in the administrative subpoena. This penalty shall be in addition to any other penalty imposed under this chapter.

 

3.28.180 - Refunds.

 

Whenever the amount of any tax has been overpaid or paid more than once or has been erroneously or illegally collected or received by the Tax Administrator under this chapter from a person or service supplier, it may be refunded as provided in this section as follows:

 

A. Tax Administrator Authority. The Tax Administrator may refund any tax that has been overpaid or paid more than once or has been erroneously or illegally collected or received by the Tax Administrator under this chapter from a service user or service supplier provided that no

refund shall be paid under the provisions of this section unless the claimant or his or her guardian, conservator, executor, or administrator has submitted a written claim to the Tax Administrator within one year of the overpayment or erroneous or illegal collection of said tax. Such claim must clearly establish claimant's right to the refund by written records showing entitlement thereto. To the extent allowed by law, nothing herein shall permit the filing of a claim on behalf of a class or group of taxpayers unless each member of the class has submitted a written claim under penalty of perjury as provided by this subsection.

 

B. Action on Claim for Refund. The Tax Administrator, where the claim is within his or her settlement authority as established by ordinance or by resolution of the City council from time to time, or the City council where the claim is in excess of that amount, shall act upon the refund claim within forty-five calendar days of the initial receipt of the refund claim. Said decision shall be final. If the Tax Administrator/city council fails or refuses to act on a refund claim within the forty-five calendar day period, the claim shall be deemed to have been rejected by the Tax Administrator/city council on the forty-fifth day. The Tax Administrator shall give notice of the action in a form which substantially complies with that set forth in Government Code Section 913.

 

C. Written Claim for Refund. The filing of a written claim pursuant to Government Code Section 935 is a prerequisite to any suit thereon. Any action brought against the City pursuant to this section shall be subject to the provisions of Government Code Section 945.6 and 946.

 

D. Refunds to Service Suppliers. Notwithstanding subsections (A) through (C) above, the Tax Administrator may, at his or her discretion, give written permission to a service supplier, who has collected and remitted any amount of tax in excess of the amount of tax imposed by this chapter, to claim credit for such overpayment against the amount of tax which is due the City upon a subsequent monthly return(s) to the Tax Administrator, provided that: (1) such credit is claimed in a return dated no later than one year from the date of overpayment or erroneous collection of said tax; (2) the Tax Administrator is satisfied that the underlying basis and amount of such credit has been reasonably established; and, (3) in the case of an overpayment by a service user to the service supplier that has been remitted to the City, the Tax Administrator has received proof, to his or her satisfaction, that the overpayment has been refunded by the service supplier to the service user in an amount equal to the requested credit.

 

3.28.190 - Appeals.

 

A. Administrative Appeals. The provisions of this section apply to any decision (other than a decision relating to a refund pursuant to Section 3.28.180 of this chapter), deficiency determination, assessment, or administrative ruling of the Tax Administrator. Any person aggrieved by any decision (other than a decision relating to a refund pursuant to Section 3.28.180 of this chapter), deficiency determination, assessment, or administrative ruling of the Tax Administrator, shall be required to comply with the appeals procedure of this section. Compliance with this section shall be a prerequisite to a suit thereon. (See Government Code Section 935(b)). To the extent allowed by law, nothing herein shall permit the filing of a claim or action on behalf of a class or group of taxpayers.

 

B. Appeal to City Manager. If any person is aggrieved by any decision (other than a decision relating to a refund pursuant to Section 3.28.180 of this chapter), deficiency determination, assessment, or administrative ruling of the Tax Administrator, he or she may appeal to the City

Manager by filing a notice of appeal with the City clerk within fourteen days of the date of the decision, deficiency determination, assessment, or administrative ruling of the Tax Administrator which aggrieved said person.

 

C. Scheduling of Administrative Appeal Hearing. The matter shall be scheduled for hearing before an independent hearing officer selected by the City Manager, no more than thirty days from the receipt of the appeal. The appellant shall be served with notice of the time and place of the hearing, as well as any relevant materials, at least five calendar days prior to the hearing. The hearing may be continued from time to time upon mutual consent. At the time of the hearing, the appealing party, the Tax Administrator, and any other interested person may present such relevant evidence as he or she may have relating to the determination from which the appeal is taken.

 

D. Notice of Decision. 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 days after the conclusion of the hearing and shall state the reasons for the decision. The notice shall specify that the decision is final and that any petition for judicial review shall be filed within ninety days from the date of the decision in accordance with Code of Civil Procedure Section 1094.6.

 

E. Manner of Notice. 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.

 

3.28.200 - No injunction/writ of mandate.

 

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against this city or against any officer of the City to prevent or enjoin the collection under this chapter of any tax or any amount of tax required to be collected and/or remitted.

 

3.28.210 - Notice of changes to ordinance.

 

If a tax under this chapter is added repealed , increased, reduced, or the tax base is changed, the Tax Administrator shall follow the notice requirements of California Public Utilities Code Section 799.

 

3.28.220 - Effect of state and federal reference-Authorization.

 

Unless specifically provided otherwise, any reference to a state or federal statute in this chapter shall mean such statute as it may be amended from time to time, provided that such reference to a statute herein shall not include any subsequent amendment thereto, or to any subsequent change of interpretation thereto by a state or federal agency or court of law with the duty to interpret such law, to the extent that such amendment or change of interpretation would require voter approval under California law, or to the extent that such change would result in a tax decrease (as a result of excluding all or a part of a utility service, or charge therefore, 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.

 

3.28.230 - Citizens Oversight Committee and Independent audit.

 

A. Citizens Oversight Committee. There shall be a five-person committee of members of the public to review and annually report on the revenue and expenditure of funds from the tax adopted by this chapter. Prior to the operative date, the City Council shall adopt a resolution establishing the composition of the committee and defining the scope of its responsibilities. Also prior to the operative date, the City Council shall appoint at least a quorum of the members of the committee; the Council shall complete the appointment of members of the committee by the end of fiscal year 2020-2021.

 

B. Independent Audit. The City shall annually verify that the taxes owed under this chapter have been properly applied, collected, and remitted in accordance with this chapter, and properly expended according to applicable law. The annual verification shall be performed by a qualified, independent third party, and the review shall employ reasonable, cost-effective steps to assure compliance, including the use of sampling audits. The verification shall not be required of tax remitters where the cost of the verification may exceed the tax revenues to be received.

 

3.28.240 - Remedies cumulative.

 

All remedies and penalties prescribed by this chapter or which are available under any other provision of law or equity, including but not limited to the California False Claims Act (Government Code Section 12650 et seq.) and the California Unfair Practices Act (Business and Professions Code Section 17070 et seq.), are cumulative. The use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.

 

3.28.250 - Termination of utility users tax.

 

The levy of taxes as provided in this chapter shall expire on December 31, 2028, unless reenacted by a separate ordinance approved by a vote of the People of the City of Union City conducted pursuant to law. The termination of the levy of taxes as provided herein shall not terminate the obligation to pay taxes levied on services used prior to such date. Taxes levied prior to December 31, 2028, shall remain a debt payable to the City. All provisions of this chapter except those relating to the levy of taxes shall continue in full force and effect after such date.