R-9086
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FD:MD:sd:br/f:\finance\admin\stfrpts\sruut2
Council Meeting: September 10, 1996
Santa Monica, California
(city Council Series)
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113tJ # 92-02.. CC5
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RESOLUTION NUMBER 9086 (CCS)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
APPROVING UTILITY USER TAX ADMINISTRATIVE RULES
WHEREAS, the city of Santa Monica's utility Tax (UUT) Ordinance
(Chapter 6.72 of the Municipal Code) places a utility users tax on
the use of certain utility services within the city;
WHEREAS, the utility Service supplier (as that term is defined
in section 6.72.010(e) of the Municipal Code) is required to impose
and collect the UUT tax from its customers, and remit the tax to
the City;
WHEREAS, the cooperation of the utility Service supplier is of
great importance to the appropriate implementation of the City'S
UUT ordinance;
WHEREAS, a number of utility Service Suppliers have raised
concerns regarding their role as tax collector, associated
liability, audits and third party auditors, and the need for
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uniformity in the application of the UUT ordinances among the many
public agencies with such ordinancesi
WHEREAS, this city has met and conferred with other public
agencies
and
utility
industry
representatives
to
develop
administrative rules to address such concerns and to facilitate the
implementation of the UUT Ordinancei
NOW, THEREFORE, the city council of the CITY OF SANTA MONICA
does hereby resolve:
SECTION 1.
This Resolution shall only become effective upon
adoption of the ordinance amending the city utility Tax ordinance
(Sections 6.72.010(d), 6.72.070 and 6.72.090 of the Municipal Code)
by the City Council.
SECTION 2. The UUT Administrative Rules attached hereto as
Attachment "A" are hereby adopted by this city Council, and shall
be followed and implemented by the Tax Administrator of the City
utility Tax Ordinance.
SECTION 3. A copy of the UUT Administrative Rules shall be
distributed, within thirty days hereof, to all utility service
suppliers that conduct business within the city.
SECTION 4. The City Clerk shall certify to the adoption of this
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Resolution, and thenceforth and thereafter the same shall be in
full force and effect.
APPROVED AS TO FORM:
~~~ Ll~.-~
MARSHA JONES M~RIE
City Attorney
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Adopted and approved thts lOth of September. 1996
4J~~
Mayor
I hereby certIfy that the foregomg ResolutIOn 9086 (CCS) was duly adopted at a meetmg
of the CIty CouncIl held on the lOth of September, 1996 by the follO\vmg vote
Ayes
Councllmembers
Abdo, Ebner, Genser. Greenberg, Holbrook, O'Connor.
Rosenstem
i'\ oes
Counctlmembers
None
Abstam
CouncIlmembers
None
Absent
Councllmembers.
None
ATTEST
~~~~
CIty Clerk
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Attachment A
Utility Tax Administrative RUles
I. To assist utility Service Suppliers that perform the valuable
public service of collecting the city's utility Users Tax (UUT),
city will assume the following responsibilities:
A. Subsequent to adoption of these administrative rules, city
will assure the accuracy of its boundary information needed
for utility billing and tax collection purposes, by reviewing
and correcting the utility Service supplier's computerized
billing data no less than once a year. The utility Service
Supplier shall not be responsible or liable for the collection
or payment of any UUT taxes that were due prior to the
adoption of these Administrative Rules that were not collected
due to the inaccuracy of information provided by the City or
due to the city's failure to make appropriate corrections to
the utili~y Service supplier's billing data.
B. The City will provide utility Service suppliers with
accurate and timely ordinance information, including ordinance
amendments, at a central location (e.g., Web Page on
Internet) . City will provide written notice of ordinance
changes to persons designated by the utility Service Supplier.
In the absence of special circumstances, as determined by the
Tax Administrator in his or her sole discretion, the utility
Service Supplier shall begin implementation of the UUT tax
change wi thin sixty (60) days from the date on which the
utility Service Supplier receives the written notification
from the City. If the 60th day is not the first day of a
month, then the utility Service supplier shall implement the
changes on the first day of the month following the month in
which the 60th day occurs. To "begin implementation" means to
calculate and place the UUT tax in the customer billing.
C. The city will assume sole responsibility for defending any
legal challenge regarding the validity of the City's UUT
Ordinance, any part thereof, or any collection thereunder, and
shall defend and hold harmless any tax collecting agent
(utility Service Supplier) named in such action for properly
performing its legal obligations set out in the UUT Ordinance.
D. The City, in its sole discretion, will reimburse utility
service Suppliers for the reasonable costs associated with an
extraordinary audit request (e.g., modifications to existing
billing software in order to respond to an audit request) .
E. The City will take reasonable steps to assure that all
utility Service Suppliers, including new market entrants, are
correctly applying and collecting the UUT tax.
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F. To the extent feasible, the City will permit utility
Service Suppliers to follow the same payment and remittance
protocol for UUT collections that is generally employed by
other California public agencies, provided that such protocol
is consistent with the City's UUT Ordinance.
G. Following the effective date of these Administrative
Rules, the Tax Administrator shall give notice to the utility
Service Suppliers within the City that they may request that
the Tax Administrator, in consultation with the City Attorney,
render a determination of the application of the UUT tax to
their various existing services. If such request is made
within ninety (90) days of the notice by the Tax Administrator
to the utility service Supplier of these Administrative Rules,
then any determination by the Tax Administrator shall apply
prospectively. The Tax Administrator shall give the utility
service supplier at least sixty (60) days written notice
following the determination of tax application before
implementation of such changes shall be required. If the 60th
day is not the first day of a month, then the utility service
Supplier shall implement the changes on the first day of the
month following the month in which the 60th day occurs. To
"begin implementation" means to calculate and place the UUT
tax in the customer billing.
H. Where new utility technologies are employed or new
utility services are being offered, a utility service Supplier
may request that the Tax Administrator, in consultation with
the City Attorney, render a determination of the application
of the UUT tax to such new technology or service within ninety
(90) days of providing such services or technologies. Upon
rendering a determination of applicability t the Tax
Administrator shall seek prospective application of the UUT
tax Ordinance to such technologies or services. The Tax
Administrator shall give the utility Service Supplier at least
sixty (60) days written notice before implementation of such
changes shall be required. If the 60th day is not the first
day of the month, then the utility Service Supplier shall
implement the changes on the first day of the month following
the month in which the 60th day occurs. To "begin
implementation" means to calculate and place the UUT tax in
the customer billing.
1. Regarding Paragraphs G and H above, the Tax Administrator,
in his or her sole discretion and upon consultation with the
City Attorney, may participate in an advisory committee,
comprised of representatives of public agencies with UUT
ordinances, to develop and recommend to such public agencies
(after meeting and conferring with utility representatives):
uniform applications of the UUT tax to various utility
services and technologies; uniform implementation protocols;
and appropriate amendments to UUT ordinances to reflect
industry, regulatory, and technological changes.
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J. The Tax Administrator shall not reduce or waive any
obligation to collect any tax or any obligation to pay any
penal ty pursuant to Santa Monica Municipal Code Sections
6.72.070(d) and 6.72.090(e), unless the affected utility
Service Supplier requests a determination as is provided for
in Paragraphs G and H above. Pending completion of the
requested determination, the utility Service Supplier shall
continue to collect all applicable taxes.
II. The Tax Administrator has the right and obligation to assure
fair and reasonable compliance wi th the UUT Ordinance. Due to the
complexity of utility services, technologies, and tax
administration, the Tax Administrator may require special outside
expertise to assist in performing compliance review of the UUT
ordinance. utility service Suppliers have a legitimate interest
in assuring that such outside firms maintain the confidentiali ty of
utility customer information and conduct their compliance reviews
in a professional and efficient manner. The Tax Administrator's
use of specialCoutside expertise shall therefore be subject to the
following rules:
A. The outside firm will execute a non-disclosure agreement
(in a form acceptable to the City Attorney) in which the
outside firm shall agree to maintain the confidentiality of
customer information and not to use individual customer
information for any purpose other than the UUT compliance
review of this city.
B. The outside firm will not initiate contact with a utility
customer in the course of performing its compliance
activities, except with the prior written consent of the
utility Service supplier.
C. The outside firm shall fully disclose to the City any
potential conflict of interest (e.g., prior or proposed
representation of private utility customers within the City) .
D. The outside firm shall not make any data requests of a
utility Service Supplier by subpoena unless the outside firm
first receives the review and approval of the Tax
Administrator prior to the request being made to the utility
service Supplier.
E. The outside firm shall be authorized to perform any
compliance review (including sampling audits and computerized
reviews) which, in its professional opinion, is reasonably
necessary to perform its contractual obligation to the City.
If a utility Service Supplier refuses to cooperate in
connection with such compliance review, the outside firm shall
immediately advise the Tax Administrator so that the Tax
Administrator may take appropriate remedial steps.
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F. The outside firm will use its best efforts to accurately
identify all errors, whether such corrections are in favor of
the customer, the City, another public agency, or the utility
Service supplier.
G. The Tax Administrator shall make available to the utility
Service Supplier a copy of any compliance report prepared by
the outside firm regarding such utility Service Supplier. The
utility Service Supplier shall be afforded an opportunity (at
least thirty (30) days) to respond to any aspect of the report
before such report becomes final.
III. Dispute Resolution Process
A. If a utility service Supplier disputes an application of
these Administrati ve Rules, an interpretation of the OUT
Ordinance, or any other action by the Tax Administrator
(including its outside firm), the protesting utility Service
Supplier may request a hearing pursuant to Paragraph B below
and in addition to any other request for relief may request to
the Tax "Administrator that the matter be submitted to
voluntary non-binding mediation within thirty (30) days of the
Tax Administrator's actions. If the Tax Administrator in his
or her sole discretion agrees to submit the matter to
voluntary non-binding mediation, and if the matter is not
resolved within thirty (30) days following the conclusion of
any mediation, the protesting utility Service Supplier may
request that the matter be set for a hearing before the City
Council at the next available City Council meeting.
B. If a hearing before the City Council is requested, the
City councilor at the City Council's direction, a hearing
officer, shall hear the matter pursuant to Santa Monica
Municipal Code section 6.16.010 et seq. If a hearing examiner
hears the matter, the decision of the hearing examiner shall
be reviewed by the City council at the next available City
Council meeting following the hearing examiner's decision and
shall be accepted, rejected or modified following arguments
from all parties concerned. The City Council's decision shall
be final and subject to judicial review pursuant to CCP
Section 1094.5.
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