HomeMy WebLinkAboutCC AG PKT 2015-09-14 #E AGENDA STAFF REPORT
DATE: September 14, 2015
TO: Honorable Mayor and City Council
THRU: Jill Ingram, City Manager
FROM: Victoria L. Beatley, Director of Finance/City Treasurer
SUBJECT: PREPAID WIRELESS UTILITY USERS TAX:
BOARD OF EQUALIZATION IMPLEMENTATION
DOCUMENTS
SUMMARY OF REQUEST:
That the City Council authorize the City Manager to execute the following
documents:
1. Board of Equalization implementation documents for participation in the
Mobile Telephony Service (MTS) collection program,
2. Board of Equalization Authorizing Resolution for MuniServices, and
3. MuniServices, LLC contract amendment
BACKGROUND:
Traditionally, a City's Utility Users Tax (UUT) is collected by wireless service
providers who include the charge on their customers' monthly invoices. In
contrast to this arrangement, customers who purchase pre-paid wireless services
usually avoid paying any UUT due to collection complications. With prepaid
wireless, there is no contract, no monthly invoices, and the prepaid wireless
services are usually sold by retailers, not service providers themselves. It is
estimated that approximately 70% of all prepaid wireless services are sold by
retailers. Since these transactions bypass our local UUT, Seal Beach
experiences a significant loss of revenue. Additionally, traditional phone plan
users are treated disparately and the burden of the UUT is not equally shared
among all telephone users.
Beginning January 1, 2016, AB 1717 will take effect and solve the collection
problem by requiring California retailers and on-line sellers to collect the local
UUT at the same time it collects sales tax on its other retail products, based on
the point of sale (for retail stores in our City). Under this new law, all local
jurisdictions have to contract with the California State Board of Equalization
(BOE) in order to receive UUT imposed on consumers of prepaid wireless phone
service.
Agenda Item E
Page 2
All of the attached documents are required by the State Board of Equalization to
collect the City's UUT on prepaid wireless services. Additionally, a separate
Resolution is required to authorize our UUT revenue consultants, MuniServices,
LLC, to examine the local charge records and surcharges on prepaid mobile
telephone services. Finally, although MuniServices, LLC believes that their
existing contract is sufficient to allow for review of the Board of Equalization's
documents they are recommending that their client cities approve the contract
amendment.
ENVIRONMENTAL IMPACT:
There is no environmental impact related to this item.
LEGAL ANALYSIS:
The City Attorney reviewed the staff report and attachments and has approved
them as to form.
FINANCIAL IMPACT:
Based upon the timing of the implementation for collection, it is expected that the
City of Seal Beach will begin to see an increase in the Utility User's Tax revenue
beginning early in the next fiscal year. The increased revenue could be as much
as $100,000 per MuniServices, LLC estimates. The anticipated revenue will be
offset by corresponding administrative costs to be charged by the BOE.
RECOMMENDATION:
That the City Council authorize the City Manager to execute the following
documents:
1. Board of Equalization implementation documents for participation in the
Mobile Telephony Services (MTS) collection program,
2. Board of Equalization Authorizing Resolution for MuniServices, and
3. MuniServices, LLC contract amendment
SUBMITTED BY` NOTED AND APPROVED:
Victoria L. Beatley 111-(01-1 n g ra m
Director of Finance/City Treasurer City Manager
Page 3
Attachments:
A. Seal Beach Ordinance 1643 Amending Municipal Code Chapter 4.50
B. Agreement for State Collection and Administration of Local Charges
C. Certification
D. Resolution to Authorize the City Manager to Execute the Agreement with the
State Board of Equalization for the Implementation of the Local Prepaid Mobil
Telephony Services Collection Act
E. Resolution Authorizing the Examination of Prepaid Mobile Telephony Services
Surcharge and Local Charge Records
F. MuniServices, LLC Contract Amendment
Attachment A
ORDINANCE NUMBER 1643
AN ORDINANCE OF THE PEOPLE OF THE CITY OF SEAL
BEACH AMENDING SEAL BEACH MUNICIPAL CODE
CHAPTER 4.50 TO DECREASE AND MODERNIZE THE UTILITY
USERS'TAX
WHEREAS, the City Council desires to decrease the City's utility user
taxes;
WHEREAS, over the years the State has taken $4,000,000 from the City
of Seal Beach;
WHEREAS, the City of Seal Beach needs a reliable source of locally-
controlled funds to maintain services such as fast 9-1-1 emergency response
time, by local firefighters and paramedics, serving our significant senior
population and all Seal Beach residents;
WHEREAS, the City's existing but outdated utility users tax ordinance
must be updated to ensure all taxpayers are treated equally regardless of the
technology used;
WHEREAS, funds from this measure will maintain senior programs,
including transit services and also help maintain storm drains and sewers to
prevent toxic pollution from contaminating beaches and coastal waters;
WHEREAS, this measure contains rigorous fiscal oversight and
accountability safeguards such as mandatory annual independent financial
audits;
WHEREAS, these requirements ensure that funds are spent efficiently,
effectively, and as promised,cannot be taken by Sacramento; and
WHEREAS, all funds raised by this measure are legally required to be
used for Seal Beach services, ensuring local control because none of this money
goes to Sacramento.
NOW, THEREFORE, THE PEOPLE OF THE CITY OF SEAL BEACH DO
HEREBY ORDAIN AS FOLLOWS:
"Section 1. Chapter 4.50 (UTILITY USERS' TAX) of the Seal Beach
Municipal Code is hereby amended in its entirety to read as follows:
Chapter 4.50
Utility Users Tax.
§4.50.005 Purpose.
The taxes imposed by this chapter previously have been established solely to
raise revenue for the general governmental purposes of the city. The revenues
generated thereby shall be deposited in the general fund of the city and may be
expended for any proper municipal purpose.
§4.50.010 Definitions.
For the purposes of this Chapter 4.50, unless otherwise apparent from the
context, certain words and phrases used in this Chapter 4.50 are defined as
follows:
Ordinance Number 1643
A. Ancill_y Teiecommu'nicati_on Services: shall 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:
1. Conference Bridging Service shall mean an ancillary service
that links 2 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.
2. Detailed Telecommunications Billing Service shall mean an
ancillary service of separately stating information pertaining to individual calls on
a customer's billing statement.
3. Directory Assistance shall mean an ancillary service of
providing telephone number information, and/or address information.
4. Vertical Service shall mean 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.
5. Voice Mail Service shall mean 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.
B. Billing Address: shall mean the mailing address of the service user
where the service provider submits invoices or bills for payment by the service
users.
C. City: shall mean the City of Seal Beach,
D. City Manage : shall mean the City Manager, or his or her
authorized representative.
E. Gas: shall mean natural or manufactured gas or any alternative
hydrocarbon fuel, which may be substituted therefore.
F. Mobile Telecommunications Service: shall mean 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.
G, Month: shall mean a calendar month.
K Non-utiiity Service Sup tier: shall mean°
1. A service supplier, other than a supplier of electric
distribution services to all or a significant portion of the City of Seal Beach, which
generates electricity for the sale to others, and shall include but not be limited to
any publicly-owned electric utility, investor-owned utility, cogenerator, distributed
generation provider, exempt wholesale generator, (15 U.S.C. Section 79z-5a)
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 of
Seal Beach, which sells or supplies electricity or supplemental services to
electricity users within the City of Seal Beach;and
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Ordinance Number 1643
3. A gas service supplier, aggregator, marketer or broker, other
than a supplier of gas distribution services to all or a significant portion of the City
of Seal Beach, which sells or supplies gas or supplemental services to gas users
within the City of Seal Beach.
I. 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.
J. Person: shall mean, without limitation, any domestic, non-profit or
foreign corporation; firm; association; syndicate;joint stock company; partnership
of any kind; limited liability company; joint venture; club; trust: Massachusetts
business or common law trust; estate; society; cooperative; receiver, trustee,
guardian or other representative appointed by order of any court; any natural
individual; joint power agency, municipal district or municipal corporation, other
than the City of Seal Beach.
K. Place of t rir AMUs„e: shall mean the street address representative
of where the customer's use of the telecommunications service primarily occurs,
which must be the residential street address or the primary business street
address of the customer.
L. Postpaid Telecommunication Service: shall mean the
telecommunication service obtained by making a payment on a communication-
by-communication basis either through the use of a credit card or payment
mechanism such as a bank card, travel card, credit card, or debit card, or by
charge made to a service number which is not associated with the origination or
termination of the telecommunication service.
M. Prepaid Telecommunication Service: (including prepaid mobile
telecommunication service) shall mean 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.
N. Private Telecommunic-ation Service: shall mean 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)
O. Service Address: shall mean the residential street address or the
business street address of the service user. For a telecommunications service
user, "service address"means either:
1. The location of the service user's telecommunication
equipment from which the communication originates or terminates, regardless of
where the communication is billed or paid; or,
2. If the location in paragraph a. of this definition is unknown
(e.g., mobile telecommunications service or VoIP service), the service address
shall mean the location of the service user's place of primary use.
3. 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
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Ordinance Number 1643
location associated with the service number), which locations shall be presumed
to be the place of primary use.
P. 'Service Supplier: shall mean any person, including the City, who
provides or sells telecommunication, electric or gas service to a user of such
services within the City. The term shall include any person required to collect, or
self-collect under subsection 4.50.040 hereof, and remit a tax as imposed by this
Chapter 4.50, including its billing agent in the case of electric or gas suppliers.
Q. Service User: shall mean a person required to pay a tax imposed
by this Chapter 4.50.
R. State: shall mean the State of California.
S. Tax Administrator: shall mean the Seal Beach Finance Director, or
his or her authorized representative.
T. Telecommunications_ Services: shall mean 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,
and includes broadband service (e.g., digital subscriber line (DSL), fiber optic,
coaxial cable, and wireless broadband, including Wi-Fi, WiMAX, and Wireless
MESH) to the extent Federal and/or State law permits taxation of such
broadband services, now or in the future. The term "telecommunications service"
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 service is referred to as voice over internet protocol (VoIP)services
or is classified by the Federal Communications Commission as enhanced or
value added, and includes video and/or data service that is functionally
integrated with "telecommunication services". Telecommunications services
include, but is 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; all forms of VolP service; 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 prerecorded or live service).
U. Vole Voice over Internet Protocol : shall mean the digital process
of making and receiving real-time voice transmissions over any Internet Protocol
network.
V. 800 Service: shall mean a "telecommunications service" that
allows a caller to dial a toll-free number without incurring a charge for the call.
The service is typically marketed under the name "800," "855," "866," "877," and
"888" toll-free calling, and any subsequent numbers designated by the Federal
Communications Commission,
W. 908 Service: shall mean 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.
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Ordinance Number 1643
§4.50.015 Constitutional and Statutory Exemptions.
A. The taxes imposed by this Chapter 4.50 shall not apply to:
1. Any person or service if imposition of such tax upon that
person or service would be in violation of a Federal or State statute or the
Constitution of the State of California, or the Constitution of the United States; or
2. The City,
B. Any service user that is exempt from the tax imposed by this
Chapter 4.50 pursuant to subsection (a) of this Section 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 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 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 service suppliers so that the
Tax Administrator can properly notify the new service supplier of the service
user's tax exempt status. A service user that fails to comply with this Section
shall not be entitled to a refund of a users' tax collected and remitted to the Tax
Administrator from such service user as a result of such noncompliance.
C. The decision of the Tax Administrator may be appealed pursuant to
Section 4.50.095. Filing an application with the Tax Administrator and appeal to
the City Administrator, or designee, pursuant to Section 4.50.095 is a
prerequisite to a suit thereon.
D. The City Council may, by resolution, establish one or more classes
of persons or one or more classes of utility service otherwise subject to payment
of a tax imposed by this Chapter and provide that such classes of persons or
service shall be exempt, in whole or in part from such tax for a specified period of
time.
§4.50.020 Low Income Senior Citizen.
The tax imposed by this Section shall not apply to:
A. Any individual 65 years of age or older who uses telephone,
electric, or gas services, in or upon any premises occupied by such individual,
provided that the combined adjusted gross income (as such term is used for
federal income tax purposes) of all members of the household in which such
individual resides, for the calendar year prior to the fiscal year (July 1st through
June 30th) for which the exemption provided in this section is applied (as
documented by a copy of the current federal income tax return(s) or California
income tax return(s) is below the U.S. Department of Housing and Urban
Development (HUD) Section B Income Limit established for the calendar year
ending within the fiscal year for which the exemption is applied. The income limit
set forth in this subsection in the year 2014 is $45,650. If for any reason, the
HUD Section 8 Income limit is not adjusted in a given year, the income limit for
purposes of the exemption provided in this section shall be established by
reference to an index deemed appropriate for these purposes by the City
Council.
B. Any service user exempt from the taxes imposed by this chapter
because of age and household income, may file an application with the Finance
Director for an exemption. Such application shall be made upon forms supplied
by the Finance Director and shall recite facts under oath that qualify the applicant
for an exemption. The Finance Director shall review all such applications and
certify as exempt those applicants determined to qualify therefore and shall notify
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Ordinance Number 1643
all service suppliers affected that such exemption has been approved, stating the
name of the applicant, the address to which such exempt service is being
supplied, the account number, if any, 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 chapter from such
exempt service user until further notice by the Finance Director is given. The
service supplier shall eliminate such exempt service user from its tax billing
procedure for the 1st regular full billings dated on or after November 1, 1975,
upon receipt of such notice from the Finance Director prior to October 1, 1975,
and thereafter, no later than 60 days after receipt of such notice from the Finance
Director.
C. All exemptions shall continue and be renewed automatically by the
Finance Director so long as the prerequisite facts supporting the initial
qualification for exemption shall continue; provided, however, that the exemption
shall automatically terminate with any change in the service address or residence
of the exempt individual;further 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 Finance Director within 10 days of any
change in fact or circumstance that might disqualify said individual from receiving
such exemption. It shall be a misdemeanor for any person to knowingly receive
the benefits of the exemption provided by this Section when the basis for such
exemption either does not exist or ceases to exist. 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 shall
immediately notify the Finance Director of such fact. The Finance Director 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.
§4.50.025 Telecommunication Users Tax.
A. 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 10% of the charges made for such services and shall be collected from the
service user by the telecommunication services supplier or its billing agent, or as
otherwise provided by law. 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 Section. There is also a rebuttable presumption
that prepaid telecommunication services sold within the city are primarily used, in
whole or in part, within the City and are therefore subject to taxation under this
Section. 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. "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 telecommunication service suppliers, which are subject to the tax
collection requirements of this Section, sourcing rules for the taxation of other
telecommunication services, including but not limited to post-paid
telecommunication services, prepaid telecommunication services, and private
telecommunication services, provided that such rules are based upon custom
and common practice that further administrative efficiency and minimize multi-
jurisdictional taxation.
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Ordinance Number 1643
C. The Tax Administrator may issue and disseminate to
telecommunication service suppliers, which are subject to the tax collection
requirements of this Section, an administrative ruling identifying those
telecommunication services, or charges therefore, that is subject to the tax of
paragraph a. above. This administrative ruling shall not impose a new tax, revise
an existing tax methodology as stated in this Section, or increase an existing tax,
except as allowed by California Government Code Section 53750(h)(2)(A).
D. As used in this Section,the term"telecommunication services"shall
include, but is not limited to, charges for: 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; regulatory or administrative fees, charges or
surcharges; charges or surcharges for programs imposed by state or federal law
(whether such charges or surcharges are imposed on the service supplier or the
customer); local number portability charges; and text and instant messaging.
"Telecommunication services" shall not include digital downloads that are not
"ancillary telecommunication services," such as music, ringtones, games, and
similar digital products.
E. To prevent actual multi-jurisdictional taxation of telecommunication
services subject to tax under this Section, any service user, upon proof to the
Tax Administrator that the service user has previously paid the same tax in
another state or city 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 City; provided, however, the amount of credit
shall not exceed the tax owed to the City under this Section.
F. The tax on telecommunication services imposed by this Section
shall be collected from the service user by the service supplier. The amount of
tax collected in one month shall be remitted to the Tax Administrator, and must
be received by the Tax Administrator on or before the 20th day of the following
month.
§4.50.030 Electricity Users Tax.
A. There is hereby imposed a tax upon every person using electricity
in the City. The tax imposed by this subsection shall be at the rate of 10%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 subsection, 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) 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. The term "charges" shall include, but is
not limited to, the following charges:
1. Energy charges;
2. Distribution or transmission charges;
3. Metering charges;
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Ordinance Number 1643
4. Standby, reserves, firming, voltage support, regulation,
emergency, or other similar charges for supplemental services to self-generation
service users;
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
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, or by any state or federal law,
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. As used in this subsection, 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. The Tax Administrator, from time to time, may survey the electric
service suppliers to identify the various unbundled billing components of electric
retail service that they commonly provide to residential and commercial/industrial
customers in the City, and the charges therefor, including those items that are
mandated by State or Federal regulatory agencies as a condition of providing
such electric service. The Tax Administrator, thereafter, may issue and
disseminate to such electric service providers an administrative ruling identifying
those components and items which are: (i) necessary or common to the receipt,
use or enjoyment of electric service; or, (ii) currently, or historically have been,
included in a single or bundled rate for electric service by a local distribution
company to a class of retail customers. Unbundled charges for such
components and items shall be subject to the tax of paragraph a. above.
E. As used in this subsection, 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 energy in the production or distribution of water by a public utility or a
governmental agency.
F. The tax on electricity provided by self-production or by a non-utility
service supplier not under the jurisdiction of this Chapter 4.50 shall be collected
and remitted in the manner set forth in subsection 4.50.040 hereof. All other
taxes on charges for electricity imposed by this subsection shall be collected
from the service user by the electric service supplier or its billing agent. The
amount of tax collected in 1 month shall be remitted to the Tax Administrator, and
must be received by the Tax Administrator on or before 20th 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 20th day of following
month, provided that the service user shall submit an adjusted payment or
request for credit, as appropriate„within 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.
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Ordinance Number 1643
§4.50.035 Gas Users Tax.
A. There is imposed a tax upon every person using gas in the City of
Seal Beach which is delivered through a pipeline distribution system or by mobile
transport. The tax imposed by this Section shall be at the rate of 10% of the
charges made for such gas, including all services related to the storage,
transportation and delivery of such gas. The tax shall be collected from the
service user by the service supplier or non-utility service supplier, or its billing
agent, and shall apply to all uses of gas, including but not limited to, heating,
electric generation by a non-public utility, and the use of gas as a component of a
manufactured product.
B. As used in this subsection, 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 purchased 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 providers 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, marketing charges, administrative
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, or
whether they are imposed on the service provider or the customer.
C. As used in this subsection, 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. The Tax Administrator, from time to time, may survey the gas
service suppliers to identify the various unbundled billing components of gas
retail service that they commonly provide to residential and commercial/industrial
customers in the City, and the charges therefor, including those items that are
mandated by State or Federal regulatory agencies as a condition of providing
such gas service. The Tax Administrator, thereafter, may issue and disseminate
to such gas service suppliers an administrative ruling identifying those
components and items which are: (i) necessary or common to the receipt, use or
enjoyment of gas service; or, (ii)currently, or historically have been, included in a
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Ordinance Number 1643
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 paragraph a.above.
E. There shall be excluded from the base on which the tax imposed by
this Section is computed charges made for gas sold for use in the generation of
electrical energy or for the production or distribution of water by a public utility or
government agency; and 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 on gas provided by self-production or by a non-utility
service supplier not under the jurisdiction of this Chapter 4.50 shall be collected
and remitted in the manner set forth in subsection 4.50.040 hereof. All other
taxes on charges for gas imposed by this subsection 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 20th 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 20th day of the following
month, provided that the service user shall submit an adjusted payment or
request for credit, as appropriate, within 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.
§4.50.040 Collection of Tax From Service Users Receiving Direct
Purchase of Gas or Electricity.
A. Any service user subject to the tax imposed by subsections
4.50.030 or 4.50.035 hereof, which produces gas or electricity for self-use; which
receives gas or electricity, including any related supplemental services, directly
from a non-utility service supplier not under the jurisdiction of this Chapter 4.50;
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 in the City, including any related supplemental services, shall
report said fact to the Tax Administrator and shall remit the tax due directly to the
Tax Administrator within 30 days of such use. In lieu of paying said actual tax,
the service user may, at its option, remit to the Tax Administrator within 30 days
for such use an estimated amount of tax measured by the tax billed in the
previous month, or upon the payment patter 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 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
nonutility 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. Rate schedules for this purpose shall be
available from the City.
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Ordinance Number 1643
§4.50.045 Effect of Commingling Taxable Items with Nontaxable Items.
If any nontaxable 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 nontaxable 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
and apportionment of taxable and non-taxable charges.
§4.50.050 Substantial Nexus/Minimum Contacts.
For purposes of imposing a tax or establishing a duty to collect and remit a tax
under this Article, "substantial nexus", "substantial economic presence", 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 Vol P) 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 Article. 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, affiliates 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 with the City or distributed from a location with 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 utility services that
are subject to a tax under this Article (e.g., an affiliated person engaging in
activities in the City that inure to the benefit of the service supplier in its
development or maintenance of a market for its services in the City).
§4.50.055 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 4.50 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, subsection 4.50.070 shall apply.
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Ordinance Number 1643
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 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 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.
§4.50.060 Collection Penalties; Service Suppliers or Self-Collectors.
A. Taxes collected from a service user, or owed by a service user
subject to subsection 4.50.040 hereof, 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. If the person required to collect and/or remit the utility users' tax
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, or, in the case of a service user that fails to properly self-
collect and remit the tax under subsection 4.50.040 hereof on or before the due
date, the Tax Administrator shall attach a penalty for such delinquencies or
deficiencies at the rate of 15% of the total tax that is delinquent or deficient in the
remittance, and shall pay interest at the rate of and 0.75% per month, or any
fraction thereof, on the amount of the tax, exclusive of penalties,from the date on
which the remittance first become delinquent, until paid.
C. The Tax Administrator shall have the power to impose additional
penalties upon persons required to collect and remit taxes pursuant to the
provisions of this Chapter 4.50 for fraud or gross negligence in reporting or
remitting at the rate of 15% of the amount of the tax collected and/or required to
be remitted, or as recomputed by the Tax Administrator.
D. For collection purposes only, 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. Notwithstanding the foregoing, the Tax Administrator may, in his or
her discretion, modify the due dates and/or penalty and interest provisions of this
Section to be consistent with any uniform standards or procedures that are
mutually agreed upon by UUT public agencies, or otherwise legally established,
to create a UUT central payment location or mechanism.
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Ordinance Number 1643
§4.50.065 Deficiency Determination and Assessment; Tax Application
Errors.
A. The Tax Administrator shall make a deficiency determination if he
or she determines that any person required to pay or collect taxes pursuant to
the provisions of this Chapter 4.50 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. The Tax Administrator shall mail a notice of such deficiency
determination to the person required to pay or remit the tax, which notice shall
refer briefly to the amount of the taxes owed, plus interest at the rate of 0.75%
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 14 calendar days
after the date of service of such notice, the person may request in writing to the
Tax Administrator for a hearing on the matter.
C. If the person 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 the person
requests a hearing, the Tax Administrator shall cause the matter to be set for
hearing, which shall be scheduled within 30 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 10 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. 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 owing the tax. The decision of
the Tax Administrator may be appealed pursuant to subsection 4.50.095. Filing
an application with the Tax Administrator and appeal to the City Administrator, or
designee, pursuant to subsection 4.50.090 is a prerequisite to a suit thereon.
E. Payment of the final assessment shall become delinquent if not
received by the Tax Administrator on or before the 30th day following the date of
receipt of the notice of final assessment. The penalty for delinquency shall be
15% on the total amount of the assessment, along with interest at the rate of
0.75% 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(e).
F. All notices under this Section 4.50 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.
§4.50.070 Administrative Remedy; Non-paying Service Users.
A. Whenever the Tax Administrator determines that a service user has
deliberately withheld the amount of the tax owed by the service user from the
amounts remitted to a person required to collect the tax, or whenever the Tax
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Ordinance Number 1643
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 Section certain named
service users for specific billing periods. Whenever the service user has failed to
pay the amount of tax owed for a period of 2 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 Section
4.50.070. Nothing herein shall require that the Tax Administrator institute
proceedings under this Section 4.50.070 if, in the opinion of the Tax
Administrator, the cost of collection or enforcement likely outweighs the tax
benefit,
B. In addition to the tax owed,the service user shall pay a delinquency
penalty at the rate of 15% of the total tax that is owed, and shall pay interest at
the rate of three-quarters of one percent (3/4%) per month, or any fraction
thereof, on the amount of the tax, exclusive of penalties, from the due date, until
paid.
C. The Tax Administrator shall notify the nonpaying 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. If the service user fails to remit the tax to the Tax Administrator
within 30 days from the date of the service of the notice upon him or her, the Tax
Administrator may impose an additional penalty of 15%of the amount of the total
tax that is owed.
§4.50.075 Actions to Collect.
Any tax required to be paid by a service user under the provisions of this Chapter
4.50 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 4.50 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 4.50, along with
any collection costs incurred by the City of Seal Beach as a result of the person's
noncompliance with this Chapter 4.50, including, but not limited to, reasonable
attorney's fees. In the event that a service user or service supplier owing a tax
under this Chapter 4.50 files bankruptcy, then such debt to the City shall be
deemed 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.
§4.50.080 Additional Powers and Duties of the Tax Administrator.
A. The Tax Administrator shall have the power and duty, and is hereby
directed,to enforce each and all of the provisions of this Chapter 4.50.
B. The Tax Administrator may adopt administrative rules and
regulations consistent with provisions of this Chapter 4.50 for the purpose of
interpreting, clarifying, carrying out and enforcing the payment, collection and
remittance of the taxes herein imposed. The administrative ruling shall not
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Ordinance Number 1643
impose a new tax, revise an existing tax methodology as stated in this
Chapter 4.50, or increase an existing tax, except as allowed by California
Government Code Section 53750(h)(2). A copy of such administrative rules and
regulations shall be on file in the Tax Administrator's office. To the extent that
the Tax Administrator determines that the tax imposed under this Chapter 4.50
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. 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 4.50 and thereby; (1) conform to the billing
procedures of a particular service supplier(or service user subject to subsection
4.50.040 hereof) so long as said agreements result in the collection of the tax in
conformance with the general purpose and scope of this Chapter 4.50; 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 of Seal Beach at any time.
D. The Tax Administrator may conduct an audit, to ensure proper
compliance with the requirements of this Chapter 4.50, of any person required to
collect and/or remit a tax pursuant to this Chapter 4.50. 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 or review shall not exceed
a period of 3 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 subsection
4.50.060 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 4.50, the Tax Administrator
is authorized to make a reasonable estimate of the deficiency. Said reasonable
estimate shall be entitled to be a rebuttable presumption of correctness.
E. Upon receipt of a written request of a taxpayer,and for good cause,
the Tax Administrator may extend the time for filing any statement required
pursuant to this Chapter 4.50 for a period of not to exceed 45 days, provided that
the time for filing the required statement has not already passed when the
request is received. No penalty for delinquent payment shall accrue by reason of
such extension. Interest shall accrue during said extension at the rate of 0.75%
per month, prorated for any portion thereof.
F. 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 4.50.
�I G. The Tax Administrator, with the written approval of the City
Manager, may compromise a claim pursuant to this Chapter 4.50 where the
portion of the claim proposed to be released is equal to or less than $4,999
dollars; and, with the approval of the City Council, may compromise such a claim
where the portion proposed to be released is greater than$4,999 dollars.
H. Notwithstanding any provision in this Chapter 4.50 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 4.50 if the non-collection occurred in good faith. In determining whether
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Ordinance Number 1643
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 full disclosure and on-going cooperation on
annual compliance reviews, 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.
§4.50.085 Records.
A. It shall be the duty of every person required to collect and/or remit
to the City any tax imposed by this Chapter 4.50 to keep and preserve, for a
period of at least 3 years, all records as may be necessary to determine the
amount of such tax that such person 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. The Tax Administrator 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 4.50, including the delivery of records in a common electronic format on
readily available media if such records are kept electronically by the person in the
usual and ordinary course of business. As an alternative to delivering the
subpoenaed records to the Tax Administrator on or before the due date provided
in the administrative subpoena, such person may provide access to such records
outside the City on or before the due date, provided that such person shall
reimburse the City for all reasonable travel expenses incurred by the City to
inspect those records, including travel, lodging, meals, and other similar
expenses, but excluding the normal salary or hourly wages of those persons
designated by the City to conduct the inspection.
C. The Tax Administrator is authorized to execute a nondisclosure
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. The Tax Administrator may request from a person providing
transportation or distribution services of gas or electricity to service users within
the City, a list of the names, billing and service addresses, quantities of gas or
electricity delivered, and other pertinent information, of its transportation
customers within the City pursuant to Section 6354(e) of the California Public
Utilities Code.
D. If a service supplier uses a billing agent or billing aggregator to bill,
collect, and/or remit the tax, the service supplier shall: (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. If any person subject to record-keeping under this Chapter 4.50
unreasonably denies the Tax Administrator, or the Tax Administrator's
designated representative, access to such records, or fails to produce the
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Ordinance Number 1643
information requested in an administrative subpoena within the time specified,
the Tax Administrator may impose a penalty of$500 dollars on such person for
each day following: i) the initial date that the person refuses to provide such
access; or, ii) the due date for production of records as set forth in the
administrative subpoena. This penalty shall be in addition to any other penalty
imposed under this Chapter 4.50.
§4.50.090 Refunds/Credits,
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 4.50, it may be refunded or credited as provided in this
Section:
A. 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 4.50, 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. 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 Section.
B. The submission of a written claim, which is acted upon by the City
Council, shall be a prerequisite to a suit thereon. (See California Government
Code Section 935). The Tax Administrator, or the City Council where the claim is
in excess of$4,999 dollars shall act upon the refund claim within the time period
set forth in Government Code Section 912.4. If the City Council fails or refuses
to act on a refund claim within the time prescribed by Government Section 912.4,
the claim shall be deemed to have been rejected by the City Council on the last
day of the period within which the City Council was required to act upon the claim
as provided in Government Code Section 912.4. 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. Notwithstanding the notice provisions of subsection (a) of this
Section, 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 4.50, 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, prior to
taking such credit by the service supplier: 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.
§4.50.095 Appeals.
A. The provisions of this Section apply to any decision (other than a
decision relating to a refund pursuant to Section 4.50.085), 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 4.50.085 hereof), 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
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Ordinance Number 1643
prerequisite to a suit thereon. (See Government Code Section 935(b).) Nothing
herein shall permit the filing of a claim or action on behalf of a class or group of
taxpayers.
B. If any person is aggrieved by any decision (other than a decision
relating to a refund pursuant to subsection 4.50.090 hereof), 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 14 days of the date of the decision, deficiency determination,
assessment, or administrative ruling of the Tax Administrator which aggrieved
the service user or service supplier.
C. The matter shall be scheduled for hearing before an independent
hearing officer selected by the City Manager, or designee, no more than 30 days
from the receipt of the appeal. The appellant shall be served with notice of the
time and place of the hearing, as well as any relevant materials, at least 5
calendar days prior to the hearing. The hearing may be continued from time to
time upon mutual consent. At the time of the hearing, the appealing party, the
Tax Administrator, the City Manager, 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. Based upon the submission of such evidence and the review of the
City's files, the City Manager 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 14 days after the conclusion of the hearing and shall
state the reasons for the decision. The notice shall specify that the decision is
final and that any petition for judicial review shall be filed within 90 days from the
date of the decision in accordance with Code of Civil Procedure Section 1094.6.
E. All notices under this Section may be sent by regular mail, postage
prepaid, and shall be deemed received on the third calendar day following the
date of mailing, as established by a proof of mailing.
§4.50.100 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 4.50 of any tax or
any amount of tax required to be collected and/or remitted.
§4.50.106 Remedies Cumulative.
All remedies and penalties prescribed by this Chapter 4.50 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 4.50.
§4-50.110 Notice of Changes to Ordinance.
If a tax under this Chapter 4.50 is added, repealed, increased, reduced, or the
tax base is changed,the Tax Administrator shall follow the notice requirements of
Public Utilities Code Section 799.
§4.50.115 Future Amendment to Cited Statute.
Unless specifically provided otherwise, any reference to a State or Federal
statute in this Chapter 4.50 shall mean such statute as it may be amended from
time to time, provided that such reference to a statute herein shall not include
18
Ordinance Number 1643
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 therefor, from taxation). Only to the extent voter
approval would otherwise be required or a tax decrease would result, the prior
version of the statute (or interpretation) shall remain applicable; for any
application or situation that would not require voter approval or result in a
decrease of a tax, provisions of the amended statute (or new interpretation)shall
be applicable to the maximum possible extent.
To the extent that the City's authorization to collect or impose any tax imposed
under this Chapter 4.50 is expanded or limited as a result of changes in State or
Federal law, no amendment or modification of this Chapter 4.50 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 4.50.
§4.50.120 Penalties.
Any person violating any of the provisions of this Chapter 4.50 shall be deemed
guilty of a misdemeanor, or an infraction at the discretion of the City.
§4.50.125 Annual Rate Review and Independent Audit of Tax Collection,
Exemption, Remittance and Expenditure.
The rates set forth in this chapter shall be reviewed by the City Council on an
annual basis at a regularly scheduled meeting in conjunction with the adoption of
the budget. The City shall annually verify that the taxes owed under this Section
have been properly applied, exempted, collected, and remitted in accordance
with this Section, and properly expended according to applicable municipal 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 reviewed.
§4.50.130 No Increase in Tax Percentage or Change in Methodology
Without Voter Approval; Amendment or Repeal.
This Chapter 4.50 may be repealed or amended by the City Council without a
vote of the People. However, as required by Chapter XIIIC of the California
Constitution, voter approval is required for any amendment provision that would
increase the rate of any tax levied pursuant to this Ordinance, provided however,
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 such interpretation or clarification
(even if contrary to some prior interpretation or clarification) is not inconsistent
with the language of this Ordinance;
C. The establishment a class of persons 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
19
Ordinance Number 1643
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 2. Interaction with Prior Tax.
(a) Collection of Tax by Service Providers. Service providers shall
begin to collect the tax imposed by this amended code as soon as feasible after
the effective date of this code, but in no event later than permitted by Section 799
of the California Public Utilities Code.
(b) Satisfaction of Tax Obligation by Service Users. Prior to April 1,
2015, any person who pays the tax levied pursuant to this code, as it existed
prior to its amendment as provided herein, with respect to any charge for a
service shall be deemed to have satisfied his or her obligation to pay the tax
levied pursuant to this code as amended herein,with respect to that charge. The
intent of this paragraph is to prevent the imposition of multiple taxes upon a
single utility charge during the transition period from the prior Utility Users Tax
code to the amended Utility Users Tax code(which transition period ends April 1,
2015)and to permit service providers or other persons with an obligation to remit
the tax hereunder, during that transition period, to satisfy their collection
obligations by collecting either tax.
Section, ,. If any section, subsection, subdivision, paragraph, sentence, clause
or phrase of this Chapter 4.50 or any part thereof is for any reason held to be
invalid, unlawful or unconstitutional, such decision, and the decision not to
enforce such, shall not affect the validity of the remaining portion of this
Chapter 4.50 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, sentences, clauses or phrases be
declared invalid, unlawful or unconstitutional.
Sectl+oun 4. Effective Date. This ordinance shall be deemed adopted upon the
date that the vote is declared by the City Council and shall go into effect 10 days
after that date, as provided in Section 9217 of the California Elections Code.
Section . Ratification of Prior Tax. The voters of the City of Seal Beach
hereby ratify and approve the past collection of the Utility Users Tax as imposed
by Chapter 4.50 of the Seal Beach Municipal Code as it existed prior to the
effective date of this Ordinance.
Section 6. The City Clerk shall certify to the passage and adoption of this
Ordinance and shall cause this Ordinance to be published in accordance with the
law.
PASSED AND ADOPTED by the voters of the City of Seal Beach at an election
held on November 4, 2014.
Is/Ellery A. Deaton
Mayor
Attest: ,
City Clerk (I �
20
Attachment B
Local Jurisdiction Seal Beach
.....................................
AGREEMENT FOR STATE COLLECTION AND ADMINISTRATION OF
LOCAL CHARGES
This Agreement is for the purpose of implementing the Local Prepaid Mobile Telephony
Services Collection Act (Part 21.1, commencing with Section 42100) of Division 2 of the
Revenue and Taxation Code), hereinafter referred to as the Local Charge Act. The
City of seal Beach and the State Board of Equalization, hereinafter called
the Board, do agree as follows:
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in this
Agreement they shall be interpreted to mean the following:
A. "Administrative Expenses" means all expenses incurred by the Board in the
administration and collection of the local charges, including preparation and wind down
costs which are reimbursable to the Board from the revenues collected by the Board on
behalf of the local jurisdiction.
B. "Contingent Fee" includes, but is not limited to, a fee that is based on a
percentage of the tax liability reported on a return, a fee that is based on a percentage of
the taxes owed, or a fee that depends on the specific tax result attained.
C. "Direct Seller" means a prepaid Mobile Telephony Service (NITS)provider or
service supplier, as defined in section 41007, that makes a sale of prepaid mobile
telephony services directly to a prepaid consumer for any purpose other than resale in the
regular course of business. A direct seller includes, but is not limited to, a telephone
corporation, a person that provides an interconnected Voice over Internet Protocol (VoIP)
service, and a retailer as described in section 42004(b)(1).
D. "Local Charges" means a utility user tax imposed on the consumption of
prepaid mobile telephony services, as described in section 42102, and charges for access
to communication services or to local "911" emergency telephone systems imposed by a
local jurisdiction, as described in section 42102.5.
E. "Local Jurisdiction" or "local agency" means a city, county, or city and
county, which includes a charter city, county, or city and county of this State, which has
adopted an ordinance imposing a local charge of the kind described in Part 21.1 of
Division 2 of the Revenue and Taxation Code and has entered into a contract with the
Board to perform all functions incident to the collection of the local charges.
F. "Ordinance" means an ordinance of a local jurisdiction imposing a local
charge, including any local enactment relating to the filing of a refund or a claim arising
under the ordinance, attached hereto, as amended from time to time.
1
G. "Quarterly local charges" means the total amount of local charges
transmitted by the Board to a local jurisdiction for a calendar quarter, as set forth in
section 42106(a)(1).
H. "Refund" means the amount of local charges deducted by the Board from a
local jurisdiction's quarterly local charges in order to pay that jurisdiction's share of a
local charge refund due to one taxpayer.
I. "Section"—all section references are to the Revenue and Taxation Code.
J. "Seller" means a person that sells prepaid mobile telephony service to a
person in a retail transaction.
ARTICLE II
BOARD ADMINISTRATION AND COLLECTION OF LOCAL CHARGES
A. Administration. The Board and the local jurisdiction agree that the Board
shall perform functions incident to the collection of the local charges from sellers that are
not direct sellers.
B. Collection. The Board shall collect the local charges in the same manner as it
collects the prepaid MTS Surcharge in the Prepaid Mobile Telephony Services Surcharge
Collection Act, subject to specified limitations in the Local Charge Act for which the
local jurisdiction is responsible, as set forth in Article III of this Agreement.
C. Audits. The Board's audit duties shall be limited to verification that the seller
that is not a direct seller complied with the Local Charge Act.
D. Other applicable laws. The Board and the local jurisdiction agree that all
provisions of law applicable to the administration and operation of the Local Charge Act,
Prepaid Mobile Telephony Services Surcharge Collection Act, and the Fee Collection
Procedures Law(FCPL) shall be applicable to the collection of local charges. References
in the FCPL to feepayer include a person required to pay the local charge, including the
seller. All future amendments to applicable laws are automatically incorporated into this
Agreement.
E. Deposit of Local Charges. All local charges collected by the Board shall be
deposited in the Local Charges for Prepaid Mobile Telephony Services Fund in the State
Treasury to be held in trust for the local taxing jurisdiction. Local charges shall consist
of all taxes, charges, interest, penalties, and other amounts collected and paid to the
Board, less payments for refunds and reimbursement to the Board for expenses incurred
in the administration and collection of the local charges, including preparation and wind-
down costs.
F. Allocation of Expenses. The Board shall allocate the total combined annual
expenses incurred for administration and collection pursuant to the Prepaid Mobile
Telephony Services Surcharge Collection Act and the Local Charge Act on a pro rata
basis according to revenues collected for: (1)the emergency telephone users surcharge
portion of the prepaid MTS surcharge, (2)the Public Utilities Commission surcharges
2
portion of the prepaid NITS surcharge, and (3) local charges. The Board shall charge a
local jurisdiction its pro rata share of the Board's cost of collection and administration.
G. Transmittal of money. All local charges collected by the Board shall be
transmitted to the local jurisdiction once in each calendar quarter. Transmittals may be
made by mail or by deposit to the account of the local jurisdiction in a bank designated
by that jurisdiction. The Board shall furnish a statement quarterly indicating the amounts
paid and withheld for expenses of the Board.
H. Rules. The Board shall prescribe and adopt such rules and regulations as in its
judgment are necessary or desirable for the administration and collection of local charges
and the distribution of the local charges collected.
I. Security. The Board agrees that any security which it hereafter requires to be
furnished under the FCPL section 55022 will be upon such terms that it also will be
available for the payment of the claims of the local jurisdiction for local taxes owing to it
as its interest appears. The Board shall not be required to change the terms of any security
now held by it, and the local jurisdiction shall not participate in any security now held by
the Board.
J. Records of the Board.
1. Information obtained by the local jurisdiction from the examination of the
Board's records shall be used by the local jurisdiction only for purposes related to the
collection of the prepaid mobile telephony services surcharge and local charges by the
Board pursuant to this Agreement.
2. When requested by resolution of the legislative body of a local jurisdiction, the
Board shall permit any duly authorized officer or employee or other person designated by
that resolution to examine any information for its own jurisdiction that is reasonably
available to the Board regarding the proper collection and remittance of a local charge of
the local jurisdiction by a seller, including a direct seller, subject to the confidentiality
requirements of sections 7284.6, 7284.7 and 19542. (sections 42110(b), 42103(e).).
3. The resolution of the local jurisdiction shall certify that any person designated
by the resolution, other than an officer and an employee,meets all of the following
conditions:
a. Has an existing contract with the local jurisdiction that authorizes the person
to examine the prepaid MTS surcharge and local charge records.
b. Is required by that contract with the local jurisdiction to disclose information
contained in or derived from,those records only to an officer or employee of
the local jurisdiction authorized by the resolution to examine the information.
c. Is prohibited by that contract from performing consulting services for a seller
during the term of that contract.
d. Is prohibited by that contract from retaining information contained in, or
derived from, those prepaid NITS surcharge and local charge records, after
that contract has expired.
3
4. Any third party contract between the local jurisdiction and an entity or person
authorized by the local jurisdiction to request information from the Board shall be subject
to the following limitations:
a. Any third party shall,to the same extent as the Board,be subject to Section
55381, relating to unlawful disclosures.
b. A third party contract shall not provide, in whole or in part, in any manner a
contingent fee arrangement as payment for services rendered.
5. Information obtained by examination of Board records shall be used only for
purposes related to the collection of the prepaid MTS surcharge and local charges by the
board pursuant to the contract, or for purposes related to other governmental functions of
the local jurisdiction set forth in the resolution.
6. If the Board believes that any information obtained from the Board's records
related to the collection of the prepaid MTS surcharge and local charges has been
disclosed to any person not authorized or designated by the resolution of the local
jurisdiction, or has been used for purposes not permitted by section 42110(b),the board
may impose conditions on access to its local charge records that the board considers
reasonable, in order to protect the confidentiality of those records. (section 42110 (c).)
7. The costs incurred by the Board in complying with a request for information
shall be deducted by the Board from those revenues collected by the Board on behalf of
the local jurisdiction making the request, as authorized by section 42110(b)(1).
ARTICLE III
LOCAL JURISDICTION
ADMINISTRATION AND RESPONSIBILITIES
A. The local jurisdictions shall be solely responsible for all of the following:
1. Defending any claim regarding the validity of the ordinance in its application
to prepaid mobile telephony service. The claim shall be processed in accordance with the
provisions of the local ordinance that allows the claim to be filed.
2. Interpreting any provision of the ordinance, except to the extent specifically
superseded by section 42105 of the Local Charge Act. The claim shall be processed in
accordance with the provisions of the local enactment that allows the claim to be filed.
3. Responding to specified consumer claims for refund involving: (1) rebutting
the presumed location of the retail transaction; (2) a consumer claim of exemption from
the local charge under the ordinance; or (3) any action or claim challenging the validity
of a local tax ordinance, in whole or part. The claim shall be processed in accordance
with the provisions of the local enactment that allows the claim to be filed.
4. Refunding the taxes in the event a local jurisdiction or local government is
ordered to refund the tax under the local ordinance.
4
5. Reallocating local charges as a result of correcting errors relating to the
location of the point of sale of a seller or the known address of a consumer, for up to two
past quarters from the date of knowledge.
6. Collecting local charges on prepaid mobile telephony service and access to
communication services or access to local 911 emergency telephone systems imposed on
direct sellers.
7. Enforcement, including audits, of the collection and remittance of local
charges by direct sellers pursuant to the ordinance.
8. The local jurisdiction shall be the sole necessary party defendant on whose
behalf the local charge is collected in any action seeking to enjoin collection of a local
charge by a seller, in any action seeking declaratory relief concerning a local charge, in
any action seeking a refund of a local charge, or in any action seeking to otherwise
invalidate a local charge. There shall be no recovery from the State for the imposition of
any unconstitutional or otherwise invalid local charge that is collected under the Local
Act.
9. Entering into an agreement with the Board to perform the functions incident to
the collection of the local charges imposed on sellers that are not direct sellers.
10. Submitting an executed Certification to the Board, certifying that:
(a) the local jurisdiction's ordinance applies the local charge to prepaid mobile
telephony services;
(b) the amount of the rate charged for access to local 911 emergency telephone
systems or access to communications services complies with the requirements of section
42102.5; and/or applies the tiered rate for the utility user tax, as identified in section
42102.
(c) The local jurisdiction shall further certify that it agrees to indemnify and to
hold harmless the Board, its officers, agents, and employees for any and all liability for
damages that may result from the Board's collection pursuant to this Agreement.
11. Submitting signed documents to the Board to include agreement(s),
certification, copy of ordinance(s), and resolution(s).
12. Providing payment to the Board of the local jurisdiction's pro rata share of the
Board's cost of collection and administration as established pursuant to subdivision (e) of
section 42020.
5
ARTICLE IV
LOCAL CHARGES
A. Local Charges — Timeliness — This part shall remain in effect until
proposed California Code of Regulations, title 18, section 2460 is adopted by the
Board and approved by the Office of Administrative Law.
1. Ordinances in effect as of September 1,2015.
On or after January 1, 2016, a local charge imposed by a local jurisdiction on prepaid
mobile telephony services shall be collected from the prepaid consumer by a seller at the
same time and in the same manner as the prepaid MTS surcharge is collected under Part
21 (commencing with section 42001) provided that, on or before September 1, 2015, the
local jurisdiction enters into a contract with the Board pursuant to section 42101.5.
Thereafter, all subsequently enacted local charges, increases to local charges, or other
changes thereto, shall become operative pursuant to paragraphs (2), (3), and(4).
2. New charges. When a local jurisdiction adopts a new local charge after
September 1, 2015, the local jurisdiction shall enter into a contract with the Board,
pursuant to section 42101.5, on or before December 1St, with collection of the local
charge to commence April 1St of the next calendar year.
3. Increases in local charges. When a local jurisdiction increases an existing
local charge after September 1, 2015, the local jurisdiction shall provide the Board
written notice of the increase, on or before December 1St, with collection of the local
charge to commence April 1St of the next calendar year.
4. Inaccurate rate posted on the Board's website. When a local jurisdiction
notifies the Board in writing that the rate posted on the Board's Internet Web site (posted
rate) for a local charge imposed by that local jurisdiction is inaccurate, including
scenarios where the local charge was reduced or eliminated, the recalculated rate
applicable to the local jurisdiction shall become operative on the first day of the calendar
quarter commencing more than 60 days from the date the Board receives the local
jurisdiction's written notification that the posted rate is inaccurate.
A. Local Charges — Timeliness — This part shall take effect and supersede
the above "Local Charges — Timeliness section when California Code of
Regulations, title 18, section 2460 is adopted by the Board and approved by the
Office of Administrative Law.
1. Ordinances in effect as of September 1, 2015. On or after January 1, 2016,
a local charge imposed by a local jurisdiction on prepaid mobile telephony services shall
be collected from the prepaid consumer by a seller at the same time and in the same
manner as the prepaid MTS surcharge is collected under Part 21 (commencing with
section 4200 1)provided that, on or before September 1, 2015,the local jurisdiction enters
into a contract with the Board pursuant to section 42101.5.
In the event a local jurisdiction does not enter into a contract with the Board by
September 1, 2015, the local jurisdiction may enter into a contract with the Board,
pursuant to section 42101.5, on or before December 1St, with collection of the local
charge to commence April 1St of the next calendar year. Thereafter, all subsequently
6
enacted local charges, increases to local charges, or other changes thereto, shall become
operative pursuant to paragraphs (2), (3), (4)and (5)of this subdivision.
2. New charges. When a local jurisdiction adopts a new local charge after
September 1, 2015, the local jurisdiction shall enter into a contract with the Board,
pursuant to section 42101.5, on or before December 1St, with collection of the local
charge to commence April 1 st of the next calendar year.
3. Increases in local charges. When a local jurisdiction increases an existing
local charge after September 1, 2015, the local jurisdiction shall provide the Board
written notice of the increase, on or before December 1St, with collection of the local
charge to commence April 1St of the next calendar year.
4. Advance written notification. When a local charge is about to expire or
decrease in rate, the local jurisdiction imposing the local charge shall notify the Board in
writing of the upcoming change, not less than 110 days prior to the date the local charge
is scheduled to expire or decrease. The change shall become operative on the first day of
the calendar quarter commencing after the specified date of expiration or decrease in rate.
If advance written notice is provided less than 110 days prior to the specified date
of expiration or decrease in rate,the change shall become operative on the first day of the
calendar quarter commencing more than 60 days after the specified date of expiration or
decrease.
5. Inaccurate Rate Posted on the Board's Web site. When a local jurisdiction
notifies the Board in writing that the rate posted on the Board's Internet Web site (posted
rate) for a local charge imposed by that local jurisdiction is inaccurate, including
scenarios where the local charge was reduced or eliminated and the local jurisdiction
failed to provide advance written notice pursuant to paragraph 4 of this subdivision, the
recalculated rate applicable to the local jurisdiction shall become operative on the first
day of the calendar quarter commencing more than 60 days from the date the Board
receives the local jurisdiction's written notification that the posted rate is inaccurate. The
local jurisdiction shall promptly notify the Board in writing of any such discrepancies
with the posted rate that are known or discovered by the local jurisdiction.
ARTICLE V
COMPENSATION
The local jurisdiction agrees to pay the Board its pro rata share of the Board's cost of
collection and administration of the local charges, as established pursuant to section
42020, subdivision(e). Such amounts shall be deducted from the local charges collected
by the Board for the local jurisdiction.
ARTICLE VI
MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first-class
United States Mail. A notification is complete when deposited in the mail.
Communications and notices to be sent to the Board shall be addressed to:
7
State Board of Equalization
P.O. Box 942879 MIC: 27
Sacramento, California 94279-0001
Attention: Supervisor,
Local Revenue Allocation Unit
Communications and notices to be sent to the local jurisdiction shall be addressed to:
Tax Administrator(Finance Director)
City of Seal Beach
211 8th Street, Seal Beach CA 90740-6379
B. Term. The date of this Agreement is the date on which it is approved by the
Department of General Services. The Agreement shall take effect on the first day of the
calendar quarter next succeeding the date of such approval, but in no case before the
operative date of the local jurisdiction's ordinance,nor on a day other than the first day of
a calendar quarter. This Agreement shall be renewed automatically from year to year
until January 1, 2020, when the Local Charge Act is repealed, unless a statute enacted
prior to that date extends that date. In such event, this Agreement will continue to renew
automatically from year to year to the date authorized by statute.
STATE BOARD OF EQUALIZATION
By_
Administrator,
Return Analysis and Allocation Section
LOCAL
JURISDICTION Seal Beach
By
(Signature on this line)
Jill R.Ingram
(Type name here)
City Manager
(Type title here)
8
Attachment C
CERTIFICATION
1, Jill R.Ingram am authorized to sign this certification on behalf of Seal Beach
0-on eameof loca Ijmisdietion)
I certify to the following:
Please check all the following that apply to your jurisdiction:
1. 911 Charges/Access to Communication Services - Ordinance No. 1643 of the
Seal Beach imposes the local charge set forth in the ordinance to prepaid mobile
w(1—t game of ioaai jwMi.fio.)
telephony services for access to communication services or to local 911 emergency
telephone systems. As required by section 42102.5, the percentage reflecting the rate for
access to the local 911 emergency telephone systems or access to communications
services is
2. X Utility User Tax - Ordinance No. 1643 of the Seal Beach imposes the local
(tnwtnameofto tjut;scietion)
charge set forth in the ordinance to the consumption of prepaid mobile telephony
services. The tiered rate for the utility user tax, as identified in section 42102 is
9.00%
3. The Seal Beach agrees to indemnify and to hold harmless the Board of
(mse<t came oft—I j"iMieloo)
Equalization (Board), its officers, agents, and employees for any and all liability for
damages that may result from the Board's collection pursuant to this agreement.
Executed in the City of Seal Beach on
(Insert name of local jnrisdiatlon) (Add dente)
Signature
Printed name Jill R.Ingram
Title of person City Manager
Attachment D
RESOLUTION NO. 6592
A Resolution Authorizin the Examination of Pre aid Mobile Telephony Services SurchaMa and
Local Char a Record
WHEREAS,pursuant to Ordinance No., 1643 of the City of Seal Beach and the Local
Prepaid Mobile Telephony Services Collection Act, the City of Seal Beach , hereinafter called
Local Jurisdiction, entered into a contract with the State Board of Equalization, hereafter referred to as
the Board, to perform all functions incident to the administration and collection of the prepaid mobile
telephony services surcharge and local charges (Rev. & Tax. Code, § 42101.5); and
WHEREAS, the Local Jurisdiction deems it desirable and necessary for authorized representatives of
the Local Jurisdiction to examine confidential prepaid mobile telephony services surcharge and local
charge records pertaining to the prepaid mobile telephony services surcharge and local charges
collected by the Board for the Local Jurisdiction pursuant to that contract;
WHEREAS, the Board will make available to the Local Jurisdiction any information that is reasonably
available to the Board regarding the proper collection and remittance of a local charge of the Local
Jurisdiction by a seller, including a direct seller, subject to the confidentiality requirements of Sections
7284.6, 7284.7 and 19542 of the Revenue and Taxation Code; and
WHEREAS, Sections 42110 and 42103 of the Revenue and Taxation Code sets forth certain
requirements and conditions for the disclosure of Board of Equalization records and establishes
criminal penalties for the unlawful disclosure of information contained in or derived from the prepaid
mobile telephony services surcharge and local charge records of the Board;
NOW, THEREFORE IT IS RESOLVED AND ORDERED AS FOLLOWS:
Section 1. That the City Manager and the UUT Tax Administretor(Finance Director) or other officer or employee of the Local Jurisdiction
rd a&aBR w-77.tac'.ynnmRnuwifs.P
designated in writing by the City Manager to the Board is hereby appointed to represent
t o! ep aaaAMeI
the Local Jurisdiction with authority to examine prepaid mobile telephony services surcharge and local
charge records of the Board pertaining to prepaid mobile telephony services surcharge and local
charges collected for the Local Jurisdiction by the Board pursuant to the contract between the Local
Jurisdiction and the Board. The information obtained by examination of Board records shall be used
only for purposes related to the collection of the Local Jurisdiction's prepaid mobile telephony services
surcharge and local charges by the Board pursuant to the contract.
Section 2. That the City Manager and(he UUT Tax Administrator(Finance Director) or other officer or employee of the Local Jurisdiction
�Ra+!MgtIPoGn b,
designated in writing by the CNIy Manager to the Board is hereby appointed to represent
Yb p!�,a 4 L7tl aY a,Amlk ntl Iry 9pa]q(dmGF,
the Local Jurisdiction with authority to examine those prepaid mobile telephony services surcharge and
local charge records of the Board for purposes related to the following governmental functions of the
Local Jurisdiction:
a) compliance and enforcement of the utility users tax(local charge)
b) administrative functions set out in City's utility users tax ordinance
`.) lepal intepreta.ti-and enforcement of'ul.ility.—,W..,din—,including but not limned to refund-,0 defensr..nfeei—ageinxtordi—ce
-1-
The information obtained by examination of Board records shall be used only for those governmental
functions of the Local Jurisdiction listed above.
Section 3. That MuniServices,LLC is hereby designated to examine the prepaid
mobile telephony services surcharge and local charges records of the Board of Equalization pertaining
to prepaid mobile telephony services surcharge and local charges collected for the Local Jurisdiction by
the Board. The person or entity designated by this section meets all of the following conditions (Rev.
&Tax. Code, § 42110, subd. (b)(2)):
a) has an existing contract with the Local Jurisdiction that authorizes the person to examine the
prepaid mobile telephony services surcharge and local charge records;
b) is required by that contract with the Local Jurisdiction to disclose information contained in or
derived from, those records only to an officer or employee of the Local Jurisdiction authorized
by the resolution to examine the information;
c) is prohibited by that contract from performing consulting services for a seller during the term of
that contract;
d) is prohibited by that contract from retaining information contained in, or derived from, those
prepaid mobile telephony services surcharge and local charge records, after that contract has
expired.
The contract between the Local Jurisdiction and MuniServices,LLC designated by the Local
MuniServices,LLC
MuniServices,LLC
14th September 15
�2-
Attachment E
RESOLUTION NO. 6593
A RESOLUTION OF THE City of seal Beach
Local Jwisdiclion
AUTHORIZING THE CITY MANAGER TO EXECUTE
Tide ofAwhoriz'd Position
AGREEMENT WITH THE STATE BOARD OF EQUALIZATION FOR IMPLEMENTATION
OF THE LOCAL PREPAID MOBILE TELEPHONY SERVICES COLLECTION ACT
WHEREAS, on 5'Pt-l-"1,I-,the City of seal Beach certified that Ordinance No. 1643 applies its
Del' Local Jwisdidion
local charge(s) (access to 911 or communication services and/or utility user tax)to prepaid mobile
telephony services; and
WHEREAS,the Local Prepaid Mobile Telephony Services Collection Act, mandates the Board of
Equalization(Board)to administer and collect the local charges for all applicable local jurisdictions
(Rev. & Tax Code section 42103); and
WHEREAS,the Board will perform all functions incident to administration and collection of the local
charges for the City of seal Beaeb ; and
Local Jwisdidicn
WHEREAS,the Board requires that the City of seal Beach enter into an"Agreement for State
1-1 Jwisdiclion
Collection and Administration of Local Charges"prior to implementation of the Local Prepaid Mobile
Telephony Services Collection Act, and
Whereas,the Board requires that the City of seal Beach _authorize the agreement;
Local Jw Wwfion
NOW, THEREFORE BE IT RESOLVED by the City of Seal Beach that the attached"Agreement
Local Jurisdiction
for State Collection and Administration of Local Charges" is hereby approved and the
THE CITY'MANA(J ER is hereby authorized to execute the agreement.
y Title ofAuthmized Position yy y yy y y yy
The foregoing resolution was introduced and adopted at a regular meeting of the City of Seal Beach
Local P.kdieU..
held on by the following vote:
Dale
AYES:
NOES:
ABSENT:
DATED:
ATTEST: (s) (s) .
(Pdi W N—&Title) (Pdtd N—&Title)
ATTACHMENT F
AMENDMENT TO CONTRACT BETWEEN MUNISERVICES, LLC
AND CITY OF SEAL BEACH, DATED SEPTEMBER 14, 2015
THIS CONTRACT AMENDMENT (the "Amendment") is entered into between
City of Seal Beach ("City") and MuniServices, LLC ("MuniServices").
The City and MuniServices agree as follows:
WHEREAS, the City and MuniServices, entered into an agreement, Contract no.
1 dated February 11, 2014 (hereinafter "Contract") to perform, among other things,
certain compliance and protective services in connection with the City's utility users tax
(hereinafter "UUT"), including a telecommunications UUT;
WHEREAS, AB 1717 (Ch. 885, Stat. 2014), the Prepaid Mobile Services
Telephony Service Surcharge Collection Act ("AB 1717") was enacted with an effective
date of January 1, 2015, and a collection date commencing January 1, 2016, and
establishes a statewide method of collecting the City's UUT on prepaid wireless
services;
WHEREAS, AB 1717 imposes certain restrictions on third party consultants of
the City who are designated and authorized by the City to examine certain State Board
of Equalization (hereinafter "BOE") documents relating to the collection of the City's
utility users tax on prepaid wireless services, as covered by AB 1717;
NOW THEREFORE, in order to satisfy the requirements of AB 1717, the parties
agree to amend the Contract by adding the following authorizations and restrictions to
the services described in the Contract:
1. MuniServices is authorized to examine the BOE's records pertaining to the
prepaid local charge (i.e., prepaid wireless UUT (collectively, the "Records") and to use
such information only for purposes related to such collection;
2. MuniServices shall disclose information contained in or derived from, the
Records only to an officer or employee of the City authorized by resolution to examine
the information;
3. MuniServices shall not perform any consulting services for a "seller" (as
defined in AB 1717) during the term of the Contract;
4. MuniServices shall not retain information contained in, or derived from, the
Records after the Contract has expired;
5. MuniServices shall, to the same extent as the Board of Equalization, be
subject to Revenue and Tax Code Section 55381, relating to unlawful disclosures;
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6. The Contract shall not be construed as permitting a contingent fee
arrangement as payment for services rendered pertaining to prepaid local charges; and
any fees paid by City to MuniServices for City specific auditing of a "seller" of prepaid
wireless UUT remitting to the BOE, will only be done pursuant to a separate agreement
which will not involve any contingent fee arrangement.
7. In case of a conflict between the terms of this Amendment and the terms
of the Contract, the terms of this Amendment shall strictly prevail.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized representatives as of the date set forth below.
DATED: September 14, 2015 CITY OF Seal Beach
By:
Name: Jill R. Ingram
Title: City Manager
MUNISERVICES, LLC.
By:
Name:
Title:
APPROVED AS TO FORM:
Craig A. Steele, City Attorney
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