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R-9202 . . FD RB DC Ig \finance\treas\share\uutrures Council Meetmg September 23, 1997 Santa Monica, California RESOLUTION NUMBER 9202 (ees) (City Council Senes) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING THE CITY'S UTILITY USER TAX ADMINISTRATIVE RULES WHEREAS, the City of Santa MOnica's Utility Tax (UUT) Ordmance (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 m Section 672 010(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 U UT ordmance, WHEREAS, the City Council adopted Resolution No 9086 (CCS) on September 10, 1996 which established and approved the City'S UUT Administrative Rules. WHEREAS, the City now proposes to amend the UUT Admmlstratlve Rules to further faCIlitate Implementation of the City's UUT ordmance, . . NOW. THEREFORE, the City Council of the CITY OF SANTA MONICA does hereby resolve SECTION 1 The UUT Administrative Rules are hereby amended as detailed In Attachment "A" to this resolution. and shall be followed and Implemented by the Tax AdminIstrator of the City's Utility Tax Ordmance SECTION 2 A copy of the amended UUT Administrative Rules shall be dlstnbuted, Within thirty days hereof, to all utility Service Suppliers that conduct business wlthm the City SECTION 3 The City Clerk shall certrfy to the adoptIon of this Resolution, and thenceforth and thereafter the same shall be In full force and effect APPROVED AS TO FORM .. i I I. ,11 -{ ~ f ~: ~U..l-L~([.:'--~1 j~-1I{j /,\'fL--k (..f MARSHA JONES MOUTRIE City Attorney . . Attachment A Utility Tax Administrative Rules I To assist utrltty Service Suppliers that perform the valuable public service of collectmg the City's UtlMy Users Tax (UUT), City will assume the followmg responsibilities A Subsequent to adoption of these administrative rules, City Will assure the accuracy of Its boundary information needed for utility billing and tax collectron purposes, by offering to revlewiiig and correctfflg the utrllty Service Supplier's computenzed billing data no less than once a year The City will also make available, upon request by a utility Service Sup~lier. its current boundary information. The utility Service Supplier shall not be responsible or liable for the collection or payment of any UUT taxes that were due pnor to the adoption of these Admlnlstratlve Rules that were not collected due to the maccuracy of information provided by the City or due to the City's faIlure to make appropnate corrections to the utility Service Supplier's billing data to the extent that the City reviewed such data at the request of the utility Service Su~plier B The City Will proVide utility Service Suppliers With accurate and timely ordinance mformatlon, Including ordinance amendments, at a central location (currently the Municioal Resource Web site: http:\www.mrc-usa.com e 9 , 'Neb Page on Internet) City Will proVide wntten 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 SeNlce Supplier shall begin ImplementatIon of the UUT tax change WIthin sIxty (60) days from the date on which the utility Service Supplier receives the wntten 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 - ----: - : _ - :- _ cycle 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 As provided in Public Utilities Code Section 799. =Fthe 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 SeNlce 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 extraordmary audit request (includIng, but not limited to 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 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 UUT taxes may be remitted by electronic funds transfer (EFT) in lieu of U.S. Mail. orovided that such orotocol IS aareed to bv the Tax Adminstrator. For - - - example: The utility will initiate an Automated Clearinghouse (ACH) credit transfer on the due date that will be received by the City's bank on the followina business dav. The ACH will be in a format that identifies the - - type of payment being made. A monthly written report of amounts remitted. including amounts billed. write-offs, unpaid liability, adiustments and net tax oavable will be orovided bv U.S. Mail. - - - 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 followmg 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 The Tax Administrator and City Attornev shall not be reauired to render a - - - determination With orosoectlve effect under this subsection where a utilitv - - - Service Suoolier fails to apply the UUT at all. or fails to apply the tax to a service that the utility Service Supplier, in good faith, b$lieves to be taxable. A utilitv Service Suoolier's failure to aoolv the UUT tax to a service shall not - - - - - - be deemed in good faith, for purpose$ Qf this $ubsection, if the servic~ is oredominantlv viewed bv the utilitv Service Suoolier's industrv as beina - - - - -- - - subject to the UUT tax or, In the case of telecommunication servIces, has been directly determined by the IRS within the past six months or moret to be subiect to the federal excise tax. . . 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 rendenng a determinatIOn of applicability, 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 wntten 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 I 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 appropnate amendments to UUT ordinances to reflect Industry, regulatory, and technological changes J The Tax Administrator shall not reduce or waive any obligation to collect any tax or any obligation to pay any penalty 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 ofthe requested determination, the utIlity Service Supplier shall continue to collect all applicable taxes K. The Tax Administrator shall take reasonable steps to notify all Service Suppliers providing similar services of any determination made under paragraph G. or H. /I The Tax Administrator has the nght and obligatIOn to assure fair and reasonable compIJance wlfh the UUT Ordinance Due to the compleXity of utility services. technologies, and tax admln/stratlon, the Tax Administrator may reqUIre speCial outSide expertise to assist In performing compliance review of the UUT ordmance Utlltty Service Supplters have a legltJmate Interest In assunng that such outSide ftrms mamtaln the conftdent/abty of uf1llty customer information and conduct their compliance reviews In a profess/onal and effiCient manner The Tax Admln/strator's use of speCial outSide expertise shall therefore be subject to the fol/owlng rules . . A. The outside firm will Drovide. at the beainnina of each and everv audit - - - - enaaaement. a letter or resolution from the Citv to the Service SUDDlier that - - - identifies the outside firm as an authorized agent of the City. AS 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 malntam the confidentIality of customer Information and not to use mdlvldual customer Information for any purpose other than the UUT compliance review of thiS City BC The outside firm will not Initiate contact with a utility customer In the course of performing ItS compliance actiVities, except With the pnor written consent of the utility Service Supplier GO The outside firm shall fully disclose to the City any potential conflict of mterest (e g , prior or proposed representation of private utility customers Within the City) BE The outside firm shall not make any data requests of a utIlity Service Supplier by a City issued subpoena unless the outside firm first receives the review and approval of the Tax Administrator prior to the request berng made to the utility Service Supplier EF The outside firm shall be authOrized to perform any compliance revIew (including sampling audits and computenzed 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 FG 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 GH The Tax Administrator shall make available to the utility Service Supplier a copy of any compl1ance report prepared by the outSide firm regardmg such utll1ty 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 The final reDort will identifv and address all substantive written - - comments on the draft report submitted by the utility Service Supplier. . . III Dispute ResolutIOn Process A If a utility Service Supplier disputes an applicatIon of these Administrative Rules, an Interpretation of the UUT 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 m his or her sole dlscretlon agrees to submit the matter to voluntary non-binding mediation. and If the matter IS not resolved wlthm thirty (30) days followrng the conclusion of any mediation. the protestrng utility Service Supplier may request that the matter be set for a hearing before the City Council at the next available City Council meetmg 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 16010 et seq If a heanng examiner hears the matter, the deCISion of the hearing examiner shall be reViewed by the City Council at the next available City Council meeting followmg 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 g \flnance\treas\share\uutattac b . . Adopted and approved thlS 23rd of September 1997 4-/-:~ Robert Holbrook, Mayor Pro Tern I. Mana M Stewart, Clty Clerk of the Cny of Santa Momca, do hereby cemfy that the foregomg ResolutIon 9202 (CCS) was duly adopted at a meetmg of the Clty Councll held on the 23rd of September, 1997 by the followmg vote Ayes Councllmembers Ebner. Femstem, Genser, Greenberg, Holbrook, Rosenstem Noes Councllmembers None Abstam Counct1members None Absent Councllmembers O'Connor ATTEST '---- , '-~ ~uo..Jr ~I.A-.. W.- Mana M Stewart, Cny Clerk