HomeMy WebLinkAboutOrdinance No. 2003-IAORDINANCE NO. 2 0 0 3 — I a
AN ORDINANCE OF THE CITY OF AZUSA,
CALIFORNIA, RATIFYING, APPROVING,
VALIDATING AND CONTINUING THE CITY'S
UTILITY USER'S TAX WITH AMENDMENTS
WHEREAS, Azusa residents have repeatedly indicated their desire for a well maintained
community and availability of quality services to all citizens regardless of socio-economic status; and
WHEREAS, in 1992, in response to a decline in revenue and the community's demand for
quality municipal services, the City investigated alternative revenue sources and taxation options;
and
WHEREAS, in accordance with its police powers and California Government Code Section
37100.5, the City Council adopted Ordinance No. 92-031 imposing a utility user's tax, which
ordinance has been codified as Article VII of Chapter 70 of the Azusa Municipal Code (the "UUT");
and
WHEREAS, the City Council lawfully adopted the UUT without voter approval in
accordance with the court's ruling in City of Woodlake v. Logan (1991) 230 Cal.App.3rd 1058; and
WHEREAS, in September of 1995 the California Supreme Court created ambiguities in the
assessment and collection of utility users taxes when it rendered its decision Santa Clara County
Local Transportation Authority v. Guardino (1995) 11 CalAth 220; and
WHEREAS, the City Council has adopted Resolution No. 02-C 136 which has placed on the
ballot for the City's March 4, 2003 general election the question as to whether the voters shall
approve of the City validating and continuing to collect the UUT, with amendments to reduce the
residential tax and increase the commercial tax; and
WHEREAS, the placement of this ordinance on the ballot and subsequent approval by the
voters of Azusa is an attempt to satisfy the legal requirements concerning voter approval of taxes as
set forth in Article 3.7 of Chapter 4 of Part 1 of Division 2 of Title 5 of the California Government
Code (Proposition 62) and address any ambiguities created by the Guardino decision.
NOW, THEREFORE, THE PEOPLE OF THE CITY OF AZUSA DO ORDAIN AS
FOLLOWS:
SECTION 1. Article VII, Chapter 70 of the Azusa Municipal Code is hereby deleted in its
entirety and replaced with the following:
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ARTICLE VII
UTILITY USER'S TAX
Sections:
Sec. 70-261
Sec. 70-262
Sec. 70-263
Sec. 70-264
Sec. 70-265
Sec. 70-266
Sec. 70-267
Sec. 70-268
Sec. 70-269
Sec. 70-270
Sec. 70-271
Sec. 70-272
Sec. 70-273
Sec. 70-274
Sec. 70-275
Sec. 70-276
Sec. 70-277
Sec. 70-278
Sec. 70-279
L
Definitions.
Operative date.
Exemptions.
Electricity.
Cogenerated electricity.
Fuel.
Service users receiving direct purchase of
fuel or electricity.
Water.
[Intentionally omitted]
Reporting and remitting.
Interest and penalty.
Actions to collect.
Attorneys' fees.
Duty to collect; procedures.
Additional power and duties of tax
administrator.
Assessment; administrative remedy.
Records.
Refunds.
Termination or suspension.
Sec. 70-261. Definitions. The following words, terms and phrases, when used in this article,
shall have the meanings ascribed to them in this section, except where the context clearly indicates a
different meaning:
Cogenerator means any corporation, including an electrical corporation, or person employing
cogeneration technology for producing power from other than a conventional power source for the
generation of electricity.
Electrical corporation, gas corporation, water corporation and cable television corporation
mean the same as defined in the California Public Utilities Code sections 218, 222, 241 and 215.5,
respectively, as such sections existed on July 1, 1992, except the term "electrical corporation"
includes any franchised agency or cogenerator, and the terms "electrical corporation," "gas
corporation" and "water corporation" include any municipality, public agency, broker/marketer or
person engaged in the selling or supplying of electrical power or gas or water to a service user.
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Fuel means natural or manufactured gas or any alternate hydrocarbon fuel which may be
substituted therefor.
Nonutility supplier means: (1) A service supplier, other than an electrical corporation serving
the city, which generates electrical energy in capacities of at least 50 kilowatts for its own use or for
sale to others; or (2) A gas supplier, other than a gas corporation, that sells or supplies gas to users
within the city.
Person means any residential, commercial or industrial utility user.
Service supplier means any entity which receives taxes paid and remits taxes as imposed by
this article.
Service user means a person required to pay a tax imposed by this article.
Tax administrator means the finance director of the city.
Sec. 70-262. Operative date. This article shall become effective ten days after the
certification of the election results. The tax imposed under this article shall apply to bills rendered
on or after that date.
Sec. 70-263. Exemptions.
(a) Nothing in this article shall be construed as imposing a tax upon any person when
imposition of such tax upon that person would be in violation of the Constitution of the United
States or the constitution of the state or upon the city or any of its departments, agencies, boards or
commissions or upon any school district or upon any other person, when imposition of such tax upon
that person would be in violation of the Constitution of the United States or the constitution of the
state. The tax administrator shall prepare a list of the persons exempt from this article by virtue of
this section and furnish a copy thereof to each service supplier.
(b) There shall also be exempted the following:
(1) Individuals over the age of 61.
(2) Individuals certified as handicapped by the city's light and water department.
(3) Individuals certified as low-income using standards developed by the city's
light and water department.
(4) Organizations classified as exempt from taxation under Chapter 501 of the
Internal Revenue Code.
(c) The tax administrator shall develop regulations for determining eligibility for the
exemptions provided for in this section and shall be charged with the responsibility for developing
forms and procedures and processing applications for exemptions.
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(d) The light and water department shall determine the eligibility of any person who
asserts a right to exemption from the tax imposed by this article. The light and water department
shall provide the tax administrator with the name of any person it determines is exempt from the tax
imposed by this article, together with the address and account number to which service is supplied to
any such exempt person. The tax administrator shall certify the information and shall provide it to
the service provider. The tax administrator shall also notify the service supplier of the termination of
any person's right to exemption under this article or the change of any address to which service is
supplied to any exempt person.
Sec. 70-264. Electricity.
(a) There is imposed a tax upon every person in the city using electrical energy in the
city. The tax imposed by this section shall be at the following rates:
For residential electrical utility users, the rate shall be four percent (4%) of the
charges made for such electricity and shall be paid by the person paying for such
electricity.
For commercial and industrial electrical utility users, the rate shall be eight percent
(8%) of the charges made for such electricity and shall be paid by the person paying
for such electricity.
The charges referred to in this section shall include charges made for:
(1) Metered energy;
(2) Transmission and distribution charges; and
(3) Demand charges, service charges, customer charges, minimum charges,
annual and monthly charges, fuel cost adjustments and any other charge
authorized by the state public utilities commission or the federal energy
regulatory commission.
(b) As used in this section, the term "using electrical energy" shall not be construed to
mean the storage of such energy by a person in a battery owned or possessed by him for use in an
automobile or other machinery or device apart from the premises upon which the energy was
received; provided, however, the term shall include the receiving of such energy for the purpose of
using it in the charging of batteries. The term shall not include electricity used and consumed by an
electric utility supplier in the conduct of its business as an electric public utility nor shall the term
include the mere receiving of such energy by an electric public utility or government agency at a
point within the city for resale or the use of such energy in the production or distribution of water by
a public utility or a governmental agency nor shall the base on which the tax imposed in this section
is computed include reconnect charges, late payment charges, returned check charges, penalties,
broken meter charges, etc.
(c) The tax imposed by this section shall be collected from the service user by the person
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providing such energy. The amount of the tax collected in one month shall be remitted to the tax
administrator on or before the last day of the following month.
Sec. 70-265. Cogenerated electricity.
(a) There is imposed a tax on every person in the city using cogenerated electrical energy
in the city. The tax imposed by this section shall be at the following rates:
For residential cogenerated electrical utility users, the rate shall be four percent
(4%)of the value of the cogenerated electrical energy consumed in the city. The
cogenerator shall install and maintain an appropriate utility type metering system
which will enable compliance with this section.
For commercial and industrial cogenerated electrical utility users, the rate shall be
eight percent (8%) of the value of the cogenerated electrical energy consumed in the
city.- The cogenerator shall install and maintain an appropriate utility type metering
system which will enable compliance with this section.
(b) The tax shall be collected and paid by the cogenerator at the rates indicated in
subsection (a) if the cogenerator consumes the energy. If the cogenerator sells the energy, the tax
shall be paid by the person to whom the energy is sold and collected by the cogenerator at the rates
indicated in subsection (a).
(c) The amount of the tax collected in one month shall be remitted to the tax
administrator on or before the last day of the following month.
Sec. 70-266. Fuel.
(a) There is imposed a tax upon every person in the city, other than a gas corporation or
electrical corporation, using, in the city, natural gas and other hydrocarbon fuel which is transported
through the gas pipeline distribution system or by mobile transport. The tax imposed by this section
shall be at the following rates:
For residential users, the rate shall be four percent (4%) of the amount that will be
paid by the person using the fuel.
For commercial and industrial utility users, the rate shall be eight percent (81/o) of the
amount that will be paid by the person using the fuel.
The tax applicable to fuel provided by nonutility suppliers shall be determined by applying the tax
rate to the actual charges the service user incurred. The term "charges," as used in this section, shall
include the following:
(1) That billed for fuel which is delivered through a gas pipeline distribution
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system or mobile transport;
(2) Fuel transportation charges; and
(3) Demand charges, service charges, customer charges, minimum charges,
annual and monthly charges, fuel cost adjustments and any other charge
authorized by the state public utilities commission or the federal energy
regulatory commission.
(b) The following shall be excluded from the base on which the tax imposed in this
section is computed:
(1) Charges made for gas which is to be resold and delivered through mains or
pipes;
(2) Charges made for gas sold for use in production or distribution of water by a
public utility or governmental agency;
(3) Charges made by a gas public utility for gas used and consumed in the
conduct of the business of gas public utilities;
(4) Charges made for gas used by a cogenerator or fuel cell or in the propulsion
of a motor vehicle, as that phrase is defined in the state Vehicle Code,
utilizing natural gas; and
(5) Reconnect charges, late payment charges, returned check charges, penalties,
broken meter charges, etc.
(c) The tax imposed by this section shall be collected from the service user by the person
selling the gas. The person selling the gas shall, on or before the 20th of each calendar month, make
a return to the tax administrator stating the amount of taxes billed during the preceding calendar
month. At the time such returns are filed, the person selling the gas shall remit tax payments to the
tax administrator in accordance with schedules established or approved by the tax administrator.
Sec. 70-267. Service users receiving direct purchase of fuel or electricity.
(a) Notwithstanding any other section of this article, a service user receiving fuel or
electricity directly from a nonutility supplier not under the jurisdiction of this article or otherwise not
having the full tax due on the use of fuel or electricity in the city (unincorporated/incorporated)
directly billed and collected by the service supplier shall report the fact to the tax administrator
within 30 days of such use and shall directly remit to the city the amount of tax due.
(b) The tax administrator may require the service user to provide, subject to audit, filed
tax returns or other satisfactory evidence documenting the quantity of gas or electricity used and the
actual price thereof.
Sec. 70-268. Water.
(a) There is imposed a tax upon every person in the city using water which is delivered
through mains or pipes. The tax imposed by this section shall be at the following rates:
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For residential water utility users, the rate shall be four percent (4%) of the charges
made for such water.
For commercial and industrial water utility users, the rate shall be eight percent (8%)
of the charges made for such water.
(b) The term "charges," as used in this section, shall include charges made for the
following:
(1) Metered water;
(2) Transmission and distribution charges; and
(3) Demand charges, service charges, customer charges, minimum charges,
annual and monthly charges, water cost adjustments, and any other charge
authorized by the state public utilities commission or the federal energy
regulatory commission.
(c) There shall be excluded from the base on which the tax imposed in this section is
computed charges made for water which is to be resold and delivered through mains or pipes;
charges made by a municipal water department, public utility or a county or municipal water district
for water used and consumed by such department, utility or district; and reconnect charges, late
payment charges, returned check charges, penalties, broken meter charges, etc.
(d) The tax imposed by this section shall be collected from the service user by the person
selling the water. The amount collected in one month shall be remitted to the tax administrator on or
before the last day of the following month.
Sec. 70-269. [Intentionally omitted]
Sec. 70-270. Reporting and remitting. Each service supplier shall, on or before the last day
of each month, make a return to the tax administrator on forms provided by him, stating the amount
of taxes billed by the service supplier during the preceding month, except as provided in section 70-
266(c). At the time the return is filed, the full amount of the tax collected shall be remitted to the tax
administrator. The tax administrator is authorized to require such further information as he deemed
necessary to determine if the tax imposed is being levied and collected in accordance with this
article.
Sec. 70-271. Interest and penalty.
(a) Under this article, taxes collected from a service user which are not remitted to the tax
administrator on or before the due dates provided in this article are delinquent. Should the due date
occur on a weekend or legal holiday, the return may be postmarked the first regular working day
following a Saturday/Sunday or legal holiday.
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(b) Penalties for delinquency in remittance of any tax collected or any deficiency
determination pursuant to this article shall attach to and be paid by the person required to collect and
remit at the rate of 15 percent per month (prorated for periods less than one month) of the total tax
collected or imposed by this article.
(c) The tax administrator is empowered to impose additional penalties for fraud or
negligence in reporting or remitting at the rate of 15 percent per month (prorated for periods less than
one month) of the amount of the tax collected or as recomputed by the tax administrator.
(d) Every penalty imposed under this section shall become a part of the tax required to be
remitted.
Sec. 70-272. Actions to collect. Any tax required to be paid by a service user under this
article shall be deemed a debt owed by the service user to the city. Any such tax received from a
service user which has willfully been withheld from the tax administrator shall be deemed a debt
owed to the city by the person required to collect and remit. Any person holding such money
contrary to this article shall be liable to an action brought in the name of the city for the recovery of
such amount.
Sec. 70-273. Attorneys' fees. The city shall be entitled to recovery of its attorney fees in any
action to enforce this article.
Sec. 70-274. Duty to collect; procedures. The duty to collect and remit the taxes imposed
by this article shall be performed as follows:
(1) Notwithstanding section 70-266(c), the tax shall be collected insofar as practicable at
the same time as and along with the charges made in accordance with the regular billing practices of
the service supplier. Where the amount paid by a service user to a service supplier is less than the
full amount of the utility charge and tax which has accrued for the billing period, such amount and
any subsequent payments by a service user shall be applied to the utility charge first until such charge
has been fully satisfied. Any remaining balance shall be applied to taxes due. If a service user has
notified the service supplier of his refusal to pay the tax imposed on the utility charges, section 70-
274(c) will apply.
(2) The duty to collect tax from a service user shall commence with the beginning of the
first full regular billing period applicable to the service user where all charges normally included in
such regular billing are subject to this article. Where a person receives more than one billing, one or
more being for different periods than another, the duty to collect shall arise separately for each
billing.
Sec. 70-275. Additional power and duties of tax administrator.
(a) The tax administrator shall have the power and duty and is directed to enforce each
and all of the provisions of this article.
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(b) The tax administrator shall have the power to adopt rules and regulations not
inconsistent with this article for the purpose of carrying out and enforcing the payment, collection
and remittance of the taxes imposed in this article. A copy of such rules and regulations shall be on
file in the tax administrator's office.
(c) The tax administrator may make administrative agreements to vary the strict
requirements of this article so that collection of any tax imposed in this article may be made in
conformance with the billing procedures of a particular service supplier so long as the agreements
result in collection of the tax in conformance with the general purpose and scope of this article. A
copy of each such agreement shall be on file in the tax administrator's office.
Sec. 70-276. Assessment; administrative remedy.
(a) Under this article, the tax administrator may make an assessment for taxes not
remitted by a person required to remit.
(b) . Whenever the tax administrator determines that a service user has deliberately
withheld the amount of the tax owed by him from the amounts remitted to a person required to
collect the tax or that a service user has refused to pay the amount of tax to such person or whenever
the tax administrator deems it in the best interest of the city, he may relieve such person of the
obligation to collect taxes due under this article from certain service users for specified billing
periods.
(c) The service supplier shall provide the city with amounts refused and unpaid, along
with the names and addresses of the service users neglecting to pay the tax imposed under this
article. Whenever the service user has failed to pay the amount of tax for a period of two or more
billing periods, the service supplier may be relieved of the obligation to collect taxes due.
(d) The tax administrator shall notify the service user that he has assumed responsibility
to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be
served on the service user by handing it to him personally or by deposit of the notice in the United
States mail, postage prepaid thereon, addressed to the service user at the address to which billing was
made by the person required to collect the tax or, should the service user have changed his address,
to his last known address. If a service user fails to remit the tax to the tax administrator within 15
days from the date of the service of the notice upon him, which shall be the date of mailing if service
is not accomplished in person, a penalty of 25 percent of the amount of the tax set forth in the notice
shall be imposed, but. not less than $5.00. The penalty shall become part of the tax required to be
paid under this article.
Sec. 70-277. Records. It shall be the duty of every person required to collect and remit to the
city any tax imposed by this article to keep and preserve, for a period of three 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
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inspect at city hall at all reasonable times. Failure to provide the tax administrator with documents
requested by the times specified by the tax administrator shall result in a penalty of $250.00 per day
for each day after the date the documents were requested to be produced by the tax administrator and
are withheld.
Sec. 70-278. 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 article, it may
be refunded as provided in subsections (b) and (c) of this section, provided a claim in writing
therefor, stating under penalty of perjury the specific grounds upon which the claim is based, is filed
with the tax administrator within three years of the date of payment. The claim shall be on forms
furnished by the tax administrator.
(b) Notwithstanding subsection (a) of this section, a service supplier may claim a refund
or take as credit against taxes collected and remitted the amount overpaid, paid more than once or
erroneously or illegally collected or received when it is established that the service user from whom
the tax has been collected did not owe the tax; provided, however, neither a refund nor a credit shall
be allowed unless the amount of the tax so collected has either been refunded to the service user or
credited to charges subsequently payable by the service user to the person required to collect and
remit. A service supplier that has collected any amount of tax in excess of the amount of tax
imposed by this article and actually due from a service user may refund such amount to the service
user and claim credit for such overpayment against the amount of tax which is due upon any other
monthly returns, provided such credit is claimed in a return dated no later than three years from the
date of overpayment.
(c) No refund shall be paid under this section, unless the claimant establishes his right
thereto by written record showing entitlement thereto to the satisfaction of the tax administrator.
(d) Notwithstanding other provisions of this section, whenever a service supplier,
pursuant to an order of the state public utilities commission or a court of competent jurisdiction
makes a refund to service users of charges for past utility services, the taxes paid pursuant to this
article on the amount of such refunded charges shall also be refunded to service users, and the
service supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax
which is due upon the next monthly return. If this article is repealed, the amounts of any refundable
taxes will be borne by the city.
(e) A service supplier may refund the taxes collected to the service user in accordance
with this section or by the service supplier's customary practice.
See. 70-279. Termination or suspension. The service supplier shall, upon notification,
terminate or suspend any utility user's tax commencing with the first full billing period which occurs
after the effective date of such action by the city council."
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SECTION 2. Severability. If any section, subsection, sentence, clause phrase or portion of
this ordinance is for any reason deemed or 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
portion of this ordinance. The voters of the City of Azusa hereby declare that they would have
passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof,
irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence,
clause or phrase would be declared invalid, unconstitutional or unenforceable.
SECTION 3. Effective date. This ordinance shall be in full force and effect upon its
approval by the voters of the City of Azusa.
SECTION 4. Summary. A summary of this ordinance shall be published in the manner
required by law.
PASSED, APPROVED AND ADOPTED this 4th day JWch, 2003.
a Cruz -Madrid
Mayor
ATTEST:
Vera Mendoza
City Clerk
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