HomeMy WebLinkAboutNS-2436 - Amending Chapter 35, Article VI, the Utility Users Tax Code95
ORDINANCE NO. NS-2436
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SANTA ANA AMENDING CHAPTER 35, ARTICLE VI,
THE UTILITY USERS TAX CODE
THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY ORDAIN
AS FOLLOWS:
SECTION 1: The City Council hereby finds, determines and declares as follows:
A. The City has imposed a tax for many years on the use of electricity, gas,
telephone communication, and water utility services in order to provide a portion of the
general fund revenues required to provide police, fire, general government and a host of
other essential services to the community; and,
B. State and federal regulators are encouraging competition in the provision of
traditional utility services by deregulating monopoly providers and by unbundling the
billing charges for the various components of these services; and,
C. In recent years there has been a substantial increase in the number of providers
of telephone, electric, and gas services in the City, and in the technologies used; all of
which has caused dramatic changes in the manner in which the services are produced,
marketed and distributed; and,
D. Due to these changes, and in order to give guidance to the many new utility
service providers regarding their collection and remittance obligations, it is appropriate
for the City to update its utility users tax ordinance with needed clarifications regarding
the scope of the City's existing taxes and the responsibilities of the various utility service
providers; and,
E. In order to assure fair and equal application of the law, the City's utility users tax
ordinance should be applied to similar utility services, regardless of the provider or the
technology used to provide it; and,
F. In the course of modifying the City's utility users tax ordinance in the manner
provided herein, it is not the intent of the city council to either impose a new tax or tax
rate, or to extend or to increase the tax percentage imposed on charges for utility use,
or to expand the base rate of the tax.
SECTION 2: That Chapter 35, Article VI. of the Santa Ana Municipal Code is
hereby amended and shall read as follows:
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ARTICLE VI. UTILITY USERS TAX CODE
Sec. 35-151. Short Title.
This article shall be known as the "Utility Users Tax Code." The word "code", as used in
this article shall mean the "Utility Users Tax Code" unless otherwise so indicated.
Sec. 35-152. Purpose.
This code is required for the purpose of fixing the rate of taxation for the utility users tax,
and for the purpose of providing a tax levy for the usual and current expenses of the
City of Santa Ana.
Sec. 35-153. Definitions.
The following words and phrases whenever used in this code shall be construed as
defined in this section, unless otherwise indicated.
(a) "Person" shall mean, without limitation, all domestic and foreign corporations,
firms, trusts, common law trusts, estates, associations, syndicates, clubs, joint-stock
companies, partnerships of every kind, joint ventures, societies, limited liability
companies, Massachusetts business or common law trusts, corporations (including
foreign, domestic, and non-profit), municipal corporations (other than the City),
municipal districts, cooperatives, receivers, trustees, guardians or other representatives
appointed by order of any court, and any natural individuals.
(b) "City" shall mean the City of Santa Ana, a charter city and municipal corporation
duly organized and existing under the Constitution and laws of the State of California.
(c) "Telephone corporation," "electrical corporation,' "gas corporation" and "water
corporation" shall mean a corporation or person as defined in Sections 234, 218, 222
and 241, respectively, of the Public Utilities Code of the State of California as said
sections existed on January 1, 1975. "Electrical corporation" shall be construed to
include any municipality or franchised agency engaged in the selling or supplying of
electricity to a service user.
(d) "Tax administratod' shall mean the finance director of the City of Santa Ana, or
his or her authorized representative.
(e) ~Service supplied' shall mean any entity or person that provides telephone
communication, electric, gas or water service to a user of such services within the City.
The term shall include an entity or person required to collect or self-collect under this
code, and remit a tax imposed by this code, including its billing agent.
(f) =Service used' shall mean a person required to pay a tax imposed by this code.
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(g) "Month" shall mean a calendar month.
(h) "Service Address" shall mean the residential street address or the business
street address of the service user's primary place of usage.
(i) "Billing Address" shall mean the mailing address of the service user where the
service supplier submits invoices or bills for payment by the customer.
(j) "State" shall mean the State of California.
(k) "Exempt wholesale generatoF' shall have the same meaning as set forth in the
Federal Power Act (15 U.S.C. Section 79z-5a as amended from time to time) and
regulations thereunder.
(I) "Non-utility service supplier" shall mean:
(1) a service supplier, other than a provider of electric distribution services to
all or a significant portion of the City, which generates electricity for sale to
others, and shall include but is not limited to any publicly-owned electric utility,
investor-owned utility, cogenerator, exempt wholesale generator, municipal utility
district, federal power marketing agency, electric rural cooperative, or other
supplier or seller of electricity;
(2) an electric service provider (ESP), electricity broker, marketer, aggregator,
pool operator, or other electricity supplier other than a provider of electric
distribution services to all or a significant portion of the City, which sells or
supplies electricity or supplemental services to electricity users within the City;
and
(3) a gas service supplier, aggregator, marketer or broker, other than a
provider of gas distribution services to all or a significant portion of the City,
which sells or supplies gas or supplemental services to gas users within the City.
(m) "Gas" shall mean natural or manufactured gas or any alternate hydrocarbon fuel,
which may be substituted therefor.
(n) "Telephone communication services" shall mean any telephonic quality
communication that is intemonnected to the public switched network, and shall include,
without limitation, the transmission of messages or information (including but not limited
to voice, telegraph, teletypewriter, data, facsimile, video, or text) or any other
transmission of messages or information by electronic, radio or similar means through
"interconnected service" with the "public switched network" [as these terms are
commonly used in the Federal Communications Act and the regulations of the Federal
Communications Commission - see 47 U.S.C.A. Section 332(d) as amended from time
to time], whether such transmission occurs by wire, cable, fiber-optic, light wave, laser,
microwave, radio wave [including, but not limited to, cellular service, personal
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communications service (PCS), specialized mobile radio (SMR), and other types of
mobile telecommunications regardless of radio spectrum used], switching facilities,
satellite or any other similar facilities.
Sec. 35-154. Constitutional exemptions.
(a) Nothing in this code shall be construed as imposing a tax upon:
(1) any person or service when imposition of such tax upon that person or service
would be in violation of a federal or state statute, the Constitution of the United
States or that of the State of California; and
(2) the City.
(b) Any service user that is exempt from the taxes imposed by this code pursuant to
subsection (a) shall file an application with the tax administrator for an exemption;
provided, however, this requirement shall not apply to a service user that is a state or
federal agency or subdivision with a commonly recognized name, or is a service user of
telephone communication services that has received a federal excise tax exemption
certificate for such service. Said application shall be made upon a form approved by
the tax administrator and shall state those facts, declared under penalty of perjury,
which qualify the applicant for an exemption, and shall include the names of all utility
service providers 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 providers so that the tax administrator can properly notify the new utility
service provider 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 utility users taxes collected
and remitted to the tax administrator from such service user as a result of such non-
compliance. Upon request of the tax administrator, a service supplier or non-utility
service supplier, or its billing agent, shall provide a list of the names and addresses of
those customers which, according to its billing records, are deemed exempt from the
utility users tax. W~th respect to a service user of telephone communication service, a
service supplier of such telephone communication services doing business in the City
shall, upon the request of the tax administrator, provide a copy of the federal exemption
for each exempt customer within the City that is served by such service supplier.
Sec. 35-155. Telephone users tax.
(a) There is hereby imposed a tax upon every person in the City of Santa Aha using
telephone communication services, including services for intrastate, interstate or
international calls. The tax imposed by this section shall be at the rate of six (6%)
percent of all charges made for such telephone communication services and shall be
collected from the service user by the telephone communication services supplier or its
billing agent. To the extent allowed by law, the tax on telephone communication
services shall apply to a service user if the billing or service address of the service user
is within the City's boundaries. If the billing address of the service user is different from
the service address, the service address of the service user shall be used.
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(b) Except as otherwise provided herein, the words "telephone communication
services" shall mean "communications services" as defined in Sections 4251 and 4252
of the Internal Revenue Code, and the regulations thereunder, regardless of the means
or technology used to provide such services. "Telecommunication services" shall not
include "private mobile radio service" [as defined in Part 20 of Title 47 of the Code of
Federal Regulations as amended from time to time], which is not interconnected to the
public switched network. The tax imposed under subsection (a), above, shall not be
imposed upon any person for using telephone communication services to the extent
that, pursuant to Sections 4252 and 4253 of the Internal Revenue Code, the amounts
paid for such communication services are exempt from or are not subject to the tax
imposed under Section 4251 of the Internal Revenue Code. In the event that the
federal excise tax on "communication services" as provided in Sections 4251, 4252 and
4253 of the Internal Revenue Code is subsequently repealed, any reference in this
section to such law, including any related federal regulations, private letter rulings, case
law, and other opinions interpreting these sections, shall refer to that body of law that
existed immediately prior to the date of repeal, as well as any judicial or administrative
decision interpreting such federal excise tax law, which is published or rendered after
the date of repeal.
(c) The tax administrator, from time to time, may issue and disseminate to
telecommunication service suppliers, which are subject to the tax collection
requirements of this code, an administrative ruling identifying those telecommunication
services that are subject to the tax of subsection (a) above. This administrative ruling
shall be consistent with legal nexus and the federal excise tax rules, regulations, and
laws pertaining to "communications services" and shall not impose a new tax, revise an
existing tax methodology, or increase an existing tax. In the event that the federal
excise tax on telecommunications is repealed, this administrative ruling shall refer to the
federal excise tax law on telecommunications that existed immediately prior to the date
of repeal, as well as any judicial or administrative decision interpreting such federal
excise tax law, which is published or rendered after the date of repeal.
(d) 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 telephone communication services. If a non-taxable
service and a taxable service are billed together under a single charge, the entire
charge shall be deemed taxable unless the service supplier can reasonably identify
charges not subject to the utility users tax based upon its books and records that are
kept in the regular course of business, which shall be consistent with generally accepted
accounting principles. The term "charges" shall not include charges for services paid for
by inserting coins in coin-operated telephones except that where such coin-operated
telephone service is furnished for a guaranteed amount, the amounts paid under such
guarantee plus any fixed monthly or other periodic charge shall be included in the base
for computing the amount of tax due.
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(e) To prevent actual multi-jurisdictional taxation of telephone communication
services subject to tax under this section, any service user, upon proof to the tax
administrator that the service user has previously paid the same tax in another state or
city on such telephone communication service, 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
city; provided, however, the amount of credit shall not exceed the tax owed to the City
under this section. For purposes of establishing sufficient legal nexus for the imposition
and collection of utility users tax on charges for telephone communication services
pursuant to this code, "minimum contacts" shall be construed broadly in favor of the
imposition and collection of the utility users tax to the fullest extent permitted by
California and federal law, and as it may change from time to time.
(f) The tax imposed in this section shall be collected from the service user by the
service supplier or its billing agent. The amount of tax collected in one (1) month shall
be remitted to the tax administrator on or before the twentieth (20th) day of the following
month in accordance with section 35-163 of this code.
Sec. 35-156. Electricity users tax.
(a) There is hereby imposed a tax upon every person in the City of Santa Ana using
electricity in the City. The tax imposed by this section shall be at the rate of six (6%)
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 user, which are provided by a service supplier or non-utility
service supplier to a service user. The tax shall be collected from the service user by
the service supplier or non-utility service supplier, or its billing agent.
(b) As used in this section, the term "charges" shall apply to all services,
components and items that are: i) necessary or common to the receipt, use and
enjoyment of electric service; or, ii) historically have been, included in a single or
bundled rate for electric 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) 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 and surcharges which are necessary to or common for the receipt,
use and enjoyment of electric service; and,
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(6) charges, fees or surcharges for electricity 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.
(c) As used in this section, the term "charges" shall also include the value of any
other services, credits, property of every kind or nature, or other consideration provided
by the service user in exchange for the electricity or services related to the provision of
such electricity. If a non-taxable service and a taxable service are billed together under
a single charge, the entire charge shall be deemed taxable unless the service supplier
can reasonably identify charges not subject to the utility users tax based upon its books
and records that are kept in the regular course of business, which shall be consistent
with generally accepted accounting principles.
(d) The tax administrator, from time to time, may survey the electric service suppliers
to identify the various unbundled billing components of electrical retail service that they
commonly provide to residential and commercial/industrial customers in the City, and
the charges therefor, including those items that are mandated by state or federal
regulatory agencies as a condition of providing such electric service. The tax
administrator, thereafter, may issue and disseminate to such electric service suppliers
an administrative ruling identifying those components and items which are: i) necessary
or common to the receipt, use and enjoyment of electric service; or, ii) currently, or
historically have been, included in a single or bundled rate for electric service by a local
distribution company to a class of retail customers. Unbundled charges for such
components and items shall be subject to the tax of subsection (a) above.
(e) As used in this section, the term "using electricity" shall not be construed to
include the mere receiving of such electricity by an electric public utility or governmental
agency at a point within the City for resale; or the use of such electricity in the
production or distribution of water by a public utility or a governmental agency.
(f) The tax on electricity provided by a non-utility service supplier not under the
jurisdiction of this code shall be collected and remitted in the manner set forth in section
35-158 of this code. All other taxes on charges for electricity imposed in 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 (1) month shall be remitted to the tax
administrator on or before the twentieth (20th) day of the following month in accordance
with section 35-163 of this code; 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 on or
before the twentieth (20th) day of the following month in accordance with section 35-163
of this code.
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Sec. 35-157. Gas ueertax.
(a) There is hereby imposed a tax upon every person in the City of Santa Ana, other
than a gas corporation or electrical corporation, using gas in the City which is delivered
through a pipeline distribution system. The tax imposed by this section shall be at a
rate of six (6%) percent of the charges made for such gas, including all services related
to the storage, transportation and delivery of such gas, and shall be collected from the
service user by the service supplier or non-utility service supplier, or its billing agent.
(b) As used in this section, the term "charges" shall apply to all services,
components and items for gas service that are: i) necessary or common to the receipt,
use and enjoyment of gas service; or, ii) currently, or historically have been, included in
a single or bundled rate for gas service by a local distribution company to a class of
retail customers. The term "charges" shall include, but is not limited to, the following
charges:
(1) the commodity charges for pumhased gas, or the cost of gas owned by
the service user (including the actual costs attributed to drilling, production, lifting,
storage, gathering, trunkline, pipeline, and other operating costs associated with
the production and delivery of such gas), which is delivered through a gas
pipeline distribution system;
(2) gas transportation charges (including interstate charges to the extent not
included in commodity charges);
(3) storage charges; provided, however, that the service provider shall not be
required to apply the tax to any charges for gas storage services when the
service provider 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 provider and to remit the tax to the appropriate jurisdiction; and,
(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, and,
(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.
(c) 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. If a
non-taxable service and a taxable service are billed together under a single charge, the
entire charge shall be deemed taxable unless the service supplier can reasonably
identify charges not subject to the utility users tax based upon its books and records
that are kept in the regular course of business, which shall be consistent with generally
accepted accounting principles.
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(d) The tax administrator, from time to time, may survey the gas service suppliers to
identify the various unbundled billing components of gas retail service that they
commonly provide to residential and commemial/industrial customers in the City, and
the charges therefor, including those items that are mandated by state or federal
regulatory agencies as a condition of providing such gas service. The tax administrator,
thereafter, may issue and disseminate to such gas service suppliers an administrative
ruling identifying those components and items which are: i) necessary or common to
the receipt, use and enjoyment of gas service; or, ii) currently, or historically have been,
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers. Unbundled charges for such components and items shall be
subject to the tax of subsection (a) above.
(e) There shall be excluded from the base on which the tax imposed in this section is
computed:
(1) Charges made for gas which is to be resold and delivered through a
pipeline distribution system;
(2) Charges made for gas sold for use in the generation of electricity or for the
production or distribution of water by a public utility or governmental agency; and
(3) Charges made by a gas public utility for gas used and consumed in the
conduct of the business of gas public utilities.
(f) The tax that is calculated on charges for gas provided by self-production or by a
non-utility service supplier not under the jurisdiction of this code shall be collected and
remitted in the manner set forth in section 35-158 of this code. All other taxes imposed
in 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 (1) month shall be remitted to the tax
administrator on or before the twentieth (20th) day of the following month in accordance
with section 35-163 of this code; or, at the option of the person required to collect 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 on or
before the twentieth (20th) day of the following month in accordance with section 35-163
of this code.
Sec. 35-158. Collection of tax from service users receiving direct purchase
of gas or electricity.
(a) Any service user subject to the tax imposed by section 35-156 or by section 35-
157 of this code, which produces gas or electricity for self-use, or which receives gas or
electricity, including any related supplemental services, directly from a non-utility service
supplier not under the jurisdiction of this ordinance, or which, for any other reason, is
not having the full tax collected and remitted by its service supplier, a non-utility service
supplier, or its billing agent on the use of gas or electricity, including any related
supplemental services, in the City, shall report said fact to the tax administrator and
shall remit the tax due directly to the tax administrator within thirty (30) days of such
use. In lieu of paying said actual tax, the service user may, at its option, remit to the tax
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administrator within thirty (30) days of such use an estimated amount of tax measured
by the tax billed in the previous month, or upon the payment pattern of similar
customers of the service supplier using similar amounts of gas or electricity, provided
that the service user shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter. The credit, if
approved by the tax administrator, may be applied against any subsequent tax bill that
becomes due.
(b) The tax administrator may require said service user to identify its non-utility
service supplier and provide, subject to audit, invoices, books of account, or other
satisfactory evidence documenting the quantity of gas or electricity used, including any
related supplemental services, and the cost or price thereof. If the service user is
unable to provide such satisfactory evidence, or, if the administrative cost of calculating
the tax in the opinion of the tax administrator is excessive, the tax administrator may
determine the tax by applying the tax rate to the equivalent charges the service user
would have incurred if the gas or electricity used, including any related supplemental
services, had been provided by the service supplier that is the primary provider of gas
or electricity within the City. Rate schedules for this purpose shall be available from the
city.
Sec. 35-159. Water User Tax.
(a) There is hereby imposed a tax upon every person in the City of Santa Ana using
water in the City which is delivered through a pipeline distribution system. The tax
imposed by this section shall be at the rate of six (6%) percent of the charges made for
such water and shall be collected from the service user by the service supplier, or its
billing agent.
(b) As used in this section, the term "charges" shall apply to all services,
components and items that are: i) necessary or common to the receipt, use and
enjoyment of water service; or, ii) currently, or historically have been, included in a
single or bundled rate for water 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) water commodity charges (potable and non-potable);
(2) distribution or transmission charges;
(3) metering charges;
(4) customer charges, late charges, service establishment or reestablishment
charges, franchise fees, franchise surcharges, annual and monthly charges, and
other charges, fees and surcharges which are necessary for or common to the
receipt, use and enjoyment of water service; and,
(5) charges, fees, or surcharges for water services or programs, which are
mandated by a water district or a state or federal agency, whether or not such
charges, fees, or surcharges appear on a bundled or line item basis on the
customer billing.
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(c) 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 water services. If a non-taxable service and a taxable
service are billed together under a single charge, the entire charge shall be deemed
taxable unless the service supplier can reasonably identify charges not subject to the
utility users tax based upon its books and records that are kept in the regular course of
business, which shall be consistent with generally accepted accounting principles.
(d) There shall be excluded from the base on which the tax imposed in this section is
computed charges made for water which is to be resold and delivered threugh a
pipeline distribution system.
(e) The tax on water service imposed by this section shall be collected from the
service user by the service supplier or its billing agent. The amount of tax collected in
one (1) month shall be remitted to the tax administrator on or before the twentieth (20th)
day of the following month in accordance with section 35-163 of this code.
(f) Notwithstanding subsection (e), above, the City, when acting as the service
supplier or billing agent, may remit the amount of tax collected to the tax administretor in
accordance with any administrative rules established by the tax administrator.
Sec. 35-160. Decisions on amounts imposed.
If any tax, penalty, or interest charge imposed by this code is for any reason held to be
discriminatory or invalid in amount, by the decision of any court of competent
jurisdiction, such decision shall not affect the validity of a lesser amount imposed by the
tax administrator with the concurrence of the city attorney. The city council hereby
declares that it would have imposed a valid utility users tax, penalty, or interest charge
of the maximum nondiscriminatory amount permitted by law, up to but not exceeding,
the amount provided under this code on the person or persons in question, irrespective
of the fact that any one or more of the taxes, penalties, or interest charges imposed
herein may be declared discriminatory or invalid in amount.
Sec. 35-161. Duty to collect; procedures.
The duty of service suppliers to collect and remit the taxes imposed by this code shall
be performed as follows:
(a) The tax shall be collected insofar as practicable at the same time as and along
with the charges made in accordance with the regular billing practice of the service
supplier.
(b) In those cases where a service user has notified the service supplier of refusal to
pay the tax imposed on said charges, section 35-167(b) of this code shall apply,
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(c) The duty to collect tax from a service user shall commence with the beginning of
the first full regular billing period applicable to that person which starts on or after the
operative date of this code. Where a person receives more than one (1) billing for
different periods, the duty to collect shall arise separately for each billing period.
(d) Whenever a service supplier negligently fails in its duty to determine and collect
the required tax from a service user, any other amount collected by the service supplier
from the service user shall then be subject to a constructive trust in the favor of the City
for the full amount of the uncollected tax.
Sec. 35-162. Duty to Remit- Procedures.
(a) Each person required by this code to remit a tax shall file a return with the tax
administrator on forms approved by the tax administrator on or before the due date in
accordance with section 35-163 of this code. The full amount of the tax owed shall be
included with the return and filed with the tax administrator. The tax administrator is
authorized to require such additional information as he or she deems necessary to
determine if the tax is being levied and collected in accordance with this code. Returns
are due immediately upon cessation of business for any reason. Pursuant to state
Revenue and Taxation Code Section 7284.6 as amended from time to time, the tax
administrator, and his or her agents, shall maintain such filing returns as confidential
information not subject to the Public Records Act.
(b) If a service supplier uses a billing agent or billing aggregator to bill, collect, and/or
remit the tax, the service supplier shall: i) provide to the tax administrator the name,
address and telephone number of each billing agent and billing aggregator currently
authorized by the service supplier to bill, collect, and/or remit the tax to the City; and, ii)
upon request of the tax administrator, deliver, or effect the delivery of, any information
or records in the possession of such billing agent or billing aggregator that, in the
opinion of the tax administrator, is necessary to verify the proper application,
calculation, collection and/or remittance of such tax to the City,
Sec. 35-163. Timely filing and remittance.
Returns and taxes may be filed and remitted by the following means: i) in person, ii) by
United States Mail, iii) by express carrier, and iv) by electronic means. Returns filed
and/or taxes remitted monthly, and actually received by the tax administrator on or
before the due dates provided in this code shall be deemed to be timely filed and/or
remitted; otherwise, the taxes are delinquent and subject to the penalties imposed
pursuant to section 35-164. Provided, however, that when the last day upon which a
return may be filed or a tax remitted falls on a Saturday, Sunday, or City, state, or
national holiday, a timely filing and remittance may be made upon the first following
working day,
A direct deposit, including electronic fund transfers and other similar methods of
electronically exchanging monies between financial accounts, made by a service
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supplier in satisfaction of its obligations under this code shall be considered timely if the
transfer is initiated on or before the due dates provided in this code, and settles into the
City's account on the following business day.
Sec. 35-164. Penalty and interest; delinquencies and deficiencies in
collection and remittance.
(a) Taxes collected but not remitted by due date - delinquencies in remittance. If
taxes collected by a service supplier from a service user, or self collected by a service
user subject to section 35-158 of this code are not remitted to the tax administrator on
or before the due dates provided in this code, such taxes shall be delinquent. The tax
administrator shall attach a penalty for such delinquencies in remittance at the rate of
fifteen percent (15%) of the total delinquent amount due.
(b) Taxes not collected- delinquencies in collection. If a service supplier required to
collect any tax hereunder fails to collect such tax, or, if a service user required to self-
collect and remit the tax pursuant to section 35-158 of this code, fails to self collect the
tax, the tax administrator shall attach a penalty for such delinquencies in collection at
the rate of fifteen percent (15%) of the total tax amount that is determined to be due.
(c) Taxes not fully collected- deficiencies in collection. If a service supplier required
to collect and remit any tax hereunder fails to collect the full amount of the tax, or, if a
service user subject to section 35-158 of this code fails to properly self-collect the full
amount of the tax, the tax administrator shall attach a penalty for such deficiencies in
collection at the rate of fifteen percent (15%) of the total tax amount that is determined
to be due.
(d) Taxes not fully remitted - deficiencies in remittance. If a service supplier
required to collect and remit any tax hereunder fails to remit the full amount of the tax
collected, or, if a service user subject to section 35-158 of this code fails to properly
remit the full amount of the tax self-collected, the tax administrator shall attach a penalty
for such deficiencies in remittance at the rate of fifteen percent (15%) of the total tax
amount that is determined to be due.
(e) Fraud or gross negligence - additional penalties. If the tax administrator
determines that the nonpayment of any delinquency or deficiency due by any service
supplier, or service user required to self-collect and remit the tax pursuant to section 35-
158 of this code, is due to fraud or gross negligence, the tax administrator shall have
the power to impose additional penalties upon such persons at the rate of fifteen
percent (15%) of the amount of the remittance due.
(f) Penalties - maximum amount. The cumulative amount of all applicable penalties
imposed under this code shall not exceed an amount equal to the amount of the tax
originally owed.
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(g) Interest - due from date of delinquency. Any person subject to any penalty
imposed hereinabove in this section, shall also pay interest at the rate of three-quarters
of one percent (%%) per month, or any fraction thereof, on the amount subject to
penalty, from the date on which the remittance of such amount first became delinquent
or deficient until paid.
(h) Penalties and interest. All penalties and all interest imposed under this code
shall be subject to the same actions to collect and the same provisions for enforcement
as the tax imposed by this code.
(i) Penalties, interest, delinquencies and deficiencies owed. All penalties and
interest imposed under this cede together with all delinquencies and deficiencies owed
shall be due and payable as of the date of notification which shall be given in the same
manner as administrative assessments in accordance with section 35-167 of this code.
Any person assessed any amount as delinquency, or deficiency, or penalty, or interest
shall have the same right of appeal as provided in the case of administrative
assessments in accordance with section 35-167 of this code and shall be governed by
the same provisions as set forth therein.
Sec. 35-165. Actions to collect.
Any tax, penalty, or interest required to be paid by a service user under the provisions of
this code shall be deemed a debt owed by the service user to the City. Any such tax
collected from a service user together with any penalties or interest due thereon which
have not been remitted to the tax administrator shall be deemed a debt owed to the City
by the service supplier required to collect and remit. The amount of any tax required to
be collected from a service user by a service supplier which is held in constructive trust
in the favor of the City shall be a debt owed by the service supplier to the City. Any
person owing money to the City under the provisions of this cede shall be liable to an
action brought in the name of the City for the recovery of such amount plus related
costs incurred by the City.
Sec. 35-166. Tax administrator, ex officio collector of utility users taxes;
additional powers and duties of tax administrator, etc.
(a) The tax administrator shall be ex officio utility users tax collector.
(b) The tax administrator shall have the power and authority to enforce all of the
provisions of this code.
(c) The tax administrator may adopt administrative rules, regulations, and guidelines,
or make administrative agreements consistent with the intent of the provisions of this
code for the purpose of administering the previsions herein regarding the payment,
collection and remittance of said taxes.
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Sec. 35-167. Assessment; administrative remedy.
The tax administrator may make an assessment for taxes not collected and/or not
remitted or paid by any person required to collect and/or remit or pay.
(a) Service supplier or service user - failure to collect and/or remit tax. If any service
supplier, or any service user subject to section 35-158 of this code, (hereinafter "service
supplier" in this subsection) required to collect and/or remit the tax imposed by this code
shall fail or refuse to collect said tax or to make, within the time provided in this code,
any report and remittance of said tax or any portion thereof required by this code, the
tax administrator shall make a determination of the tax due (tax, interest and penalties
hereinafter "amount assessed" in this subsection). The tax administrator shall give a
written notice of the amount assessed by personal service or by depositing it in the
United States mail, addressed to the service supplier at the service supplier's last
known address. The service supplier may, within ten (10) days after the serving or
mailing of such notice, make application in writing to the tax administrator for a hearing
on the amount assessed in accordance with section 35-173 of this code. If application
by the service supplier for a hearing is not made within the time prescribed, the amount
assessed shall become final and immediately due and payable.
(b) Service user - failure to pay tax. Whenever the tax administrator determines that
a service user has deliberately withheld the amount of the tax owed by him or her from
the amounts remitted to a service supplier required to collect the tax, or that a service
user has failed to pay the amount of the tax to such service supplier for a period of two
(2) or more billing periods, or whenever the tax administrator deems it in the best
interest of the City, he or she may relieve such service supplier of the obligation to
collect taxes due under this code from such service users for specified billing periods.
The service supplier shall provide the City with the names, account numbers, billing and
service addresses, and other required information of such non-paying service users
together with the amounts owed under the provisions of this code and the specified
billing periods for which they are owed. The tax administrator shall give written notice to
the non-paying service user that he or she has assumed responsibility to collect the
taxes due for the stated periods and demand payment of such taxes. The notice shall
be served on the service user by personal service or by deposit of the notice in the
United States mail, addressed to the service user at the address to which billing was
made by the person required to collect the tax; or, should the service user have
changed his address, to his last known address. If a service user fails to remit the tax to
the tax administrator within fifteen (15) days from the date of the service of the notice,
which shall be the date of mailing if service is not accomplished in person, a penalty of
twenty-five (25%) percent of the amount of the tax set forth in the notice shall be
imposed, but not less than five dollars ($5.00), along with interest at the rate of three-
quarters of one 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.
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Sec. 35-168. Records.
(a) It shall be the duty of every person required to collect and/or remit to the City any
tax imposed by this code to keep and preserve, for a period of three (3) years, all
records as may be necessary to determine the amount of such tax as he may have
been liable for the collection of and remittance to the tax administrator, which records
the tax administrator shall have the right to inspect at all reasonable times. 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 code, 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. 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 state Revenue and
Taxation Code Sections 7284.6 and 7284.7, as amended from time to time.
(b) The tax administrator may request from any person providing transportation or
distribution services of gas or electricity to service users within the City, a list of the
names, billing and service addresses, quantities of gas or electricity delivered, and other
pertinent information, of its transportation customers within the City pursuant to section
6354(e) of the state Public Utilities Code, as amended from time to time.
(c) If any person subject to record-keeping under this section unreasonably denies
the tax administrator, or any designated agent of the tax administrator, access to such
records, or fails to produce the information requested in an administrative subpoena
within the time specified, the tax administrator may impose a penalty of five hundred
dollars ($500.00) on such person for each day following the initial date that the person
refuses to provide such access. This penalty shall be in addition to any other penalty
imposed by this code.
Sec. 35-169. Refunds.
(a) Whenever the amount of any tax has been overpaid or paid more than once or
has been erroneously or illegally collected or received by the tax administrator under
this code, it may be refunded as provided in this section. No refund will be considered
by the tax administrator for a period in excess of twelve (12) months prior to the date
application is received.
(b) The tax administrator may refund any tax that has been overpaid, paid more than
once, or has been erroneously or illegally collected or received by the tax administrator
under this code, 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 twelve (12)
months 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
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entitlement thereto. Nothing herein shall permit the filing of a claim on behalf of a class
or group of taxpayers.
(c) The submission of a written claim, which is acted upon by the City, shall be a
prerequisite to a suit thereon as provided in accordance with state Government Code
Section 935, as amended from time to time. The City shall act upon the refund claim
within the time period set forth in state Government Code Section 912.4, as amended
from time to time. If the City fails or refuses to act on a refund claim within the time
prescribed by state Government Section 912.4, the claim shall be deemed to have been
rejected by the City on the last day of the period within which the City was required to
act upon the claim as provided in state Government Code Section 912.4.
(d) Notwithstanding subsection (b) above, a service supplier shall be entitled to take
any overpayment as a credit against an underpayment whenever such overpayment
has been received by the City within the three years next preceding a notice of tax
deficiency or assessment by the tax administrator, or during any year for which the
service supplier, at the request of the tax administrator, has executed a waiver of the
defense of the statute of limitations with regard to any claim the City may have for a
utility users tax. Under no circumstances shall an overpayment taken as a credit
against an underpayment pursuant to this subsection quality a service supplier for a
refund to which it would not otherwise be entitled under the twelve (12) month written
claim requirement of this section.
Sec. 35-170. Low income household exemption.
(a) The utility users tax imposed by this code shall not apply to any service user who
use~ telephone, electric, gas or water services in or upon any premises occupied by
such service user, provided the combined gross income of all members of the
household in which such user resided was less than the iow income household
exemption level for the calendar year prior to the fiscal year (July 1 through June 30) for
which the exemption provided in this section is applied for. The Iow income household
exemption level shall be established by resolution of the city council.
The exemption granted by this section shall not eliminate the duty of the service
supplier to collect taxes from such exempt individual or the duty of such exempt
individual to pay such taxes to the service supplier, unless an exemption is applied for
by the service user and granted in accordance with the provisions of subsection (b)
hereof.
(b) Any service user exempt from the taxes imposed by this code because of the
provisions of subsection (a) above may file an application with the tax administrator for
an exemption. Such application shall be made upon forms supplied by the tax
administrator and shall recite facts under oath which qualify the applicant for an
exemption. The tax administrator shall review all such applications and certify as
exempt those applicants determined to qualify therefor notify all service suppliers
affected that such exemption has been approved, stating the name of the applicant, the
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address to which such exempt service is being supplied, the account number, and such
other information as may be necessary for the service supplier to remove the exempt
service user from its tax billing procedure. Upon receipt of such notice, the service
supplier shall not be required to continue to bill any further tax imposed by this code
from such exempt service user until further notice by the tax administrator is given. The
service supplier shall eliminate such exempt service user from its tax billing procedure
upon receipt of such notice from the tax administrator, no later than sixty (60) days after
receipt of such notice from the tax administrator.
(c) All exemptions shall be renewed annually by the exempt service user during the
renewal period of April 1 through April 30. The tax administrator shall notify all service
suppliers by May 31 of exempt service users who did not renew during the annual
renewal period. Each service supplier shall include the service users specified in such
notice in its tax billing procedure no later than sixty (60) days after receipt of such notice
from the tax administrator. Exemptions shall automatically terminate with any change in
the service address or residence of the exempt individual; provided such individual may
nevertheless apply for a new exemption with each change of address or residence. Any
individual exempt from the tax shall notify the tax administrator within ten (10) days of
any change in fact or circumstance which might disqualify said individual from receiving
such exemption. It shall be a misdemeanor for any person to knowingly receive the
benefits of the exemptions provided by this section when the basis for such exemption
either does not exist or ceases.
(d) Notwithstanding any of the provisions of this subsection, however, any service
supplier who determines by any means that a new or nonexempt service user is
receiving service through a meter or connection exempt by virtue of an exemption
issued to a previous user or exempt user of the same meter or connection, such service
supplier shall immediately notify the tax administrator of such fact and the tax
administrator shall conduct an investigation to ascertain whether or not the provisions of
this section have been complied with and, where appropriate, order the service supplier
to commence collecting the tax from the nonexempt service user.
Sec. 35-171. Violation - misdemeanor; remedies - cumulative.
(a) Any person violating any of the provisions of this code shall be guilty of a
misdemeanor and shall upon conviction be punishable thereafter as provided in section
1-8 of the Santa Ana Municipal Code.
(b) The conviction and fine or imprisonment of any person for violation of this code
shall not relieve such person from paying the utility users tax together with any penalty
or interest amount due under the terms of this code, nor shall the payment of any utility
users tax, or any penalty, or any interest amount due prevent a civil action or criminal
prosecution for the violation of any of the provisions of this code. All remedies
prescribed hereunder shall be cumulative and 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 hereof.
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113
Sec. 36-172. Maximum tax amount payable under the utility users tax.
The following subsections shall be effective for each fiscal year commencing on July 1.
(a) The combined total maximum of electricity, gas and telephone user taxes paid by
any single service user for one (1) location under this utility user tax code shall not
exceed eleven thousand dollars ($11,000.00) during the period of any single fiscal year.
As used herein, "fiscal year" means a twelve-month period between July first of one (1)
calendar year and June thirtieth of the following calendar year.
(b) A service user may deposit the maximum tax specified in subsection (a) with the
tax administrator during the month of July of each year as payment in full and in
advance of taxes due under this code for the twelve-month period commencing on the
first day of said month and ending on June thirtieth thereafter. Any service user making
said payment in July of any given year shall not thereafter be billed for any tax under
this code for said twelve-month period.
(c) No penalty or interest assessment provided for in this code shall be counted in
computing the maximum tax as provided in subsection (a).
(d) Any service user paying more than the maximum tax provided for in subsection
(a) during any twelve-month period commencing July first and ending June thirtieth may
claim a refund or credit for such over payment in the manner provided in section 35-169
of this code.
(e) The phrase "one (1) location" as used in subsection (a) shall mean one (1) or
more contiguous sites for which the service user receives one (1) or more utility billings.
Sec. 35-173. Right to administrative hearing; appeals.
(a) If any service user or service supplier (hereinafter "applicant" in this subsection)
is aggrieved by any decision, administrative assessment, or administrative ruling of the
tax administrator, or with the failure to grant a refund or exemption as provided for under
this code, such applicant may appeal to the tax administrator in writing for an
administrative hearing. If application by the applicant for an administrative hearing is
not made within the time prescribed, the prior decision of the tax administrator shall
become final. If such application is made, the tax administrator shall give at least five
(5) days' written notice scheduling a date, time and place for a hearing. Such notice
shall be given through personal service or by depositing it in the United States mail,
addressed to the applicant's last known address. The applicant may appear before the
tax administrator and/or the tax administrator's authorized administrative hearing officer
(hereinafter "hea#ng office~' in this subsection) and offer evidence appealing the tax
administrator's decision. After such hearing the "hearing officer" shall make a
determination and give written notice to the applicant regarding his or her determination.
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The determination of the "hearing officer" shall become final and shall render any
subsequent appeal null and void and shall further act as a waiver against future action,
unless an appeal is taken pursuant to Chapter 3 of the Santa Ana Municipal Code.
(b) A timely request for an administrative hearing and attendance is required in
accordance with subsection (a) above shall be a prerequisite for an appeal made
pursuant to Chapter 3 of the Santa Ana Municipal Code. The determination of an
applicant's appeal made pursuant to Chapter 3 of the Santa Aha Municipal Code shall
be final.
Sec. 35-174. Nonpayment of tax - bar to writ of mandate or other legal or
equitable process.
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 code of any tax or any amount of tax
required to be collected and/or remitted.
Sec. 35-175. Saving clause.
Neither the adoption of this code nor its superseding of any portion of any other code
shall in any manner be construed to affect prosecution for violation of any chapter,
article, code, or ordinance prior to the effective date hereof, nor be construed as a
waiver of any tax or any penal provision applicable to any such violation, and all rights
and obligations thereunto appertaining shall continue in full force and effect.
Sec. 35-176. Severability.
If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this
code or any part thereof is for any reason held to be unconstitutional, such decision,
and the decision not to enforce such, shall not affect the validity of the remaining portion
of this code or any part thereof. The City Council hereby declares that it would have
passed each section, subsection, subdivision, paragraph, sentence, clause or phrase
thereof, irrespective of .the fact that any one or more sections, subsections,
subdivisions, paragraphs, sentencesl clauses or phrases be declared unconstitutional.
Sec. 35-177. Notice of Changes to Utility Users Tax Code.
If a tax under this code is added, repealed, increased, reduced, or the tax base is
changed, the tax administrator shall follow the notice requirements of state Public
Utilities Code Section 799. Prior to the effective date of the code change, the service
supplier shall provide the tax administrator with a copy of any written procedures
describing the information that the service supplier needs to implement the code
change. If the service provider fails to provide such written instructions, the tax
administrator, or his or her agent, shall send, by first class mail, a copy of the code
Ordinance No. NS-2436
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115
change to all collectors and remitters of the City's utility users taxes according to the
latest payment records of the tax administrator.
Secs. 35-178--35-199. Reserved.
SECTION 2: This ordinance shall come into full force and effect on the first day
of the calendar month following the effective date of this ordinance.
SECTION 3: If any section, subsection, sentence, clause, phrase or portion of
this ordinance is for any reason held to be invalid or unconstitutional by the decision of
any court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this ordinance. The City Council of the City of Santa Ana hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
SECTION 4: Neither the adoption of this ordinance nor the repeal hereby of any
ordinance sha;I in any manner affect the prosecution for violation of ordinances, which
violatior~s were committed prior to the effective date hereof, nor be construed as
affecting any of the provisions of such ordinance relating to the collection of any tax or
penalty or the penal provision applicable to any violation thereof, nor to affect the
validity of any bond or cash deposit in lieu thereof, required to be posted, filed or
deposited pursuant to any ordinance and all rights and obligations thereunder
appertaining shall continue in full force and effect.
ADOPTED this 21 st day of August ,2000.
ATTEST:
Patr~a E.-Healy
Clerk of the Council
Ordinance No. NS-2436
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116
COUNCILMEMBERS:
Pulido Absent
Lutz Aye
Bist Aye
Christy Aye
Franklin Aye
McGuigan Ave
M0ren0 Not Voting
APPROVED AS TO FORM:
Joseph W. Fletcher
City Attorney
Lisa E. Storck
Assistant City Attorney
CERTIFICATE OF ORIGINALITY & PUBLICATION
I, Patricia E. Healy, Clerk of the Council, do hereby certify the attached Ordinance No.
NS-2436 to be .the original ordinance adopted by the City Council of the City of Santa
Ana on ~//,~,or~ ; and that said ordinance was published in accordance with
the Charter or'the'City of Santa Ana.
Date:
CleriC_ _ t-he Council
City of Santa Ana
Ordinance No. NS-2436
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