Chapter 3.18 — MOBILITY, RECREATION, ARTS AND CULTURE UTILITY USERS TAX

It is the purpose and intent of this chapter to impose a tax upon the users of electrical, liquid petroleum gas and telephone utilities, pursuant to State law. The proceeds of such tax shall be placed in the Town's general fund and utilized for payment of the costs to provide essential governmental services.

(Code 1990, § 3.44.010; Ord. No. 94-12, § 1, 1994)

The Town Council finds and determines as follows:

(1)

The Town is presently confronted with a fiscal crisis that threatens the continued operation and viability of the Town as a governmental organization. The projected operating deficit for the current fiscal year exceeds $880,000.00 and the Town also has a minimal reserve fund under the $1,500,000.00 level. There is a minimal level of administrative and staff personnel in every department of the Town and further cutbacks will be required within the immediate future unless general revenues are increased beyond existing levels. The Town, as a result of its dependency upon transient occupancy taxes, which, in turn, are dependent on factors beyond Town's control, must stabilize its tax base.

(2)

The fiscal crisis will seriously impair the ability of the Town to deliver basic and essential governmental services, including, but not limited to, police protection, Code enforcement to abate public nuisances, and public works programs to maintain, repair and replace streets, sidewalks, light fixtures, and other public facilities and provide for snow removal, as well as required planning and needed recreational services. The lack of these services will result in a general deterioration of the physical and social condition of the Town, a depression of property values, a serious threat to the health, safety and welfare of residents and visitors and a significant decline in the quality of life experienced by those who live or work within the Town. These services directly affect every owner or occupant of real property within the Town and must be provided by any municipal government as a matter of necessity and not individual choice.

(Code 1990, § 3.44.020; Ord. No. 94-12, § 1, 1994)

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Gas means natural or manufactured gas or any alternate hydrocarbon fuel which may be substituted therefor.

Month means a calendar month.

Nonutility supplier means:

(1)

A service supplier, other than an electrical corporation serving within the Town, which generates electrical energy in capacities of at least 50 kilowatts for its own use or for sale to others; or

(2)

A gas supplier other than a gas corporation, that sells or supplies gas to users within the Town.

Service supplier means any entity required to collect or self-impose and remit a tax as imposed by this chapter.

Service user means a person required to pay a tax imposed by this chapter.

Tax administrator means the Finance Director of the Town.

Telephone corporation, electrical corporation, gas corporation, water corporation and cable television corporation shall have the same meanings as defined in Public Utilities Code §§ 234, 218, 222, 241 and 216.4, respectively, except, the terms "electrical corporation" and "gas corporation" shall also be construed to include any Town, public agency or person engaged in the selling or supplying of electrical power or gas or water to a service user.

(Code 1990, § 3.44.030; Ord. No. 94-12, § 1, 1994)

(a)

Nothing in this chapter shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violation of the State or Federal Constitution.

(b)

The Town Council may, by order or 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.

(c)

The Tax Administrator shall prepare a list of the persons exempt from the provisions of this chapter by virtue of this section and furnish a copy thereof to each service supplier.

(Code 1990, § 3.44.040; Ord. No. 94-12, § 1, 1994)

(a)

There is imposed a tax on the amounts paid for any intrastate telephone services by every person in the Town using such services. The tax imposed by this section shall be at the rate of 3½ percent of charges made for such services and shall be paid by the person paying for such services.

(b)

Notwithstanding the foregoing, on and after July 1, 1997, the tax imposed by this section shall be at the rate of 2½ percent of charges made for such services and shall be paid by the person paying for such services.

(c)

As used in this section, the term "charges" shall not include charges for directory advertising; nor shall the term "charges" include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated service is furnished for a guaranteed amount, the amounts paid under such guarantee, plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "charges" include charges for any type of service or equipment furnished by a service supplied subject to public utility regulations during a period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulation; nor shall the term "telephone communication services" include land mobile service or maritime mobile services as defined in 47 CFR 2.1 as it existed on January 1, 1970. The term "telephone communication services" refers to that service which provides access to a telephone system and the privilege of telephone quality communication with substantially all persons having telephone stations which are part of such telephone system. The telephone users' tax is intended to, and does, apply to all charges billed to a telephone account having a situs in the Town irrespective of whether a particular communication service originates or terminates within the Town.

(d)

The tax imposed by this section shall be collected from the service user by the person providing the intrastate telephone communication services, or the person receiving payment for such services. The amount of the tax collected in one month shall be remitted to the Tax Administrator on or before the last day of the following month; or at the option of the person required to collect and remit the tax, an estimated amount of tax collected, measured by the tax bill in the previous month, shall be remitted to the Tax Administrator on or before the last day of each month.

(e)

Notwithstanding the provisions of Subsection (a) of this section, the tax imposed under this section shall not be imposed upon any person for using intrastate telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under the

Emergency Telephone Users Surcharge Act, Revenue and Taxation Code § 41001 et seq. or the tax imposed under Internal Revenue Code § 4251.

(Code 1990, § 3.44.050; Ord. No. 94-12, § 1, 1994; Ord. No. 95-04, § 1, 1995; Ord. No. 96-08, § 1, 1996; Ord. No. 96-12, § 1, 1996)

(a)

There is imposed a tax upon every person other than an electric or gas corporation using electrical energy in the Town. The tax imposed by this section shall be at the rate of 3½ percent of the charges made for such energy by an electrical corporation providing service in the Town and shall be billed to and paid by the person using the energy.

(1)

Notwithstanding the foregoing, on and after July 1, 1997, the tax imposed by this section shall be at the rate of 2½ percent of charges made for such services and shall be paid by the person paying for such services.

(2)

The tax applicable to electrical energy provided by a nonutility supplier shall be determined by applying the tax rate to the equivalent charge the service user would have incurred if the energy used had been provided by the electrical corporation franchised by the Town. Rate schedules for this purpose shall be available from the Town. Non-utility suppliers shall install, maintain and use an appropriate utility-type metering system which will enable compliance with this section. The term "charges," as used in this section, shall include charges made for:

a.

Metered energy; and

b.

Minimum charges for service, including customer charges, service charges, demand charges, standby charges and all other annual or monthly charges, fuel or other cost adjustments, authorized by the State Public Utilities Commission or the Federal Energy Regulatory Commission.

(b)

As used in this section, the term "using electrical energy" shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by same for use in an automobile or other machinery device apart from the premises upon which the energy was received; provided, however, that the term "using electrical energy" shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term "using electrical energy" include electricity used and consumed by an electric utility supplier in the conduct of its business; nor shall the term "using electrical energy" include the mere receiving of such energy by an electric corporation or governmental agency at a point within the

Town for resale; nor shall the term "using electrical energy" include the use of such energy in the production or distribution of water by a water utility or a governmental agency.

(c)

The tax imposed in this section shall be collected from the service user by the service supplier or nonutility supplier. The tax imposed in this section on use supplied by self-generation or from a nonutility supplier not subject to the jurisdiction of this chapter, shall be collected and remitted to the Tax Administrator in the manner set forth in Section 3.44.080. The amount of tax collected by a service supplier or a nonutility supplier in one month shall be remitted by United States mail to the Tax Administrator, postmarked on or before the last day of the following month; or at the option of the person required to collect and remit the tax, an estimated amount of tax measured by the tax billed in the previous month, shall be remitted by United States mail to the Tax Administrator, postmarked on or before the last day of each month.

(Code 1990, § 3.44.060; Ord. No. 94-12, § 1, 1994; Ord. No. 96-08, § 1, 1996; Ord. No. 96-12, § 1, 1996)

(a)

There is imposed a tax upon every person in the Town other than a gas corporation or electrical corporation, using, in the Town, gas which is transported through mains or pipes or by mobile transport. The tax imposed by this section shall be at the rate of 3½ percent of the charges made for the gas and shall be billed to and paid by the person using the gas.

(1)

Notwithstanding the foregoing, on and after July 1, 1997, the tax imposed by this section shall be at the rate of 2½ percent of charges made for such services and shall be paid by the person paying for such services.

(2)

The tax applicable to gas or gas transportation provided by nonutility suppliers shall be determined by applying the tax rate to the equivalent charges the service user would have incurred if the gas or gas transportation had been provided by the gas corporation franchised by the Town. The term "charges," as used in this section, shall include:

a.

That billed for gas which is delivered through mains or pipes;

b.

Gas transportation charges; and

c.

Demand charges, service charges, customer charges, minimum charges, annual and monthly charges, and any other charge authorized by the State Public Utilities Commission or the Federal Energy Regulatory

Commission.

(b)

The tax otherwise imposed by this section is not applicable to:

(1)

Charges made for gas which is to be resold and delivered through mains and pipes;

(2)

Charges made for gas used and consumed by a public utility or governmental agency in the conduct of its business;

(3)

Charges made by a gas public utility or gas used and consumed in the course of its public utility business; and

(4)

Charges made for gas used in the propulsion of a motor vehicle, as authorized in the State Vehicle Code.

(c)

The tax imposed in this section shall be collected from the service user by the person selling or transporting the gas. A person selling only transportation services to a user for delivery of gas through mains or pipes shall collect the tax from the service user based on the transportation charges. The person selling or transporting the gas shall, on or before the 20th day of each calendar month, commencing on the 20th day of the calendar month after the effective date of the ordinance from which this chapter is derived, make a return to the Tax Administrator stating the amount of taxes billed during the preceding calendar month. At the time such returns are filed, the person selling or transporting the gas shall remit tax payments to the Tax Administrator in accordance with schedules established or approved by the Tax Administrator. The tax imposed in this section on use supplied by self-production or a nonutility supplier not subject to the jurisdiction of this chapter, shall be collected and remitted to the Tax Administrator in the manner set forth in Section 3.44.090.

(Code 1990, § 3.44.070; Ord. No. 94-12, § 1, 1994; Ord. No. 96-12, § 1, 1996; Ord. No. 96-08, § 1, 1996)

(a)

Notwithstanding any other provision of this chapter, a service user receiving gas or electricity directly from a nonutility supplier not under the jurisdiction of this chapter, or otherwise not having the full tax due on the use of gas or electricity in the Town directly billed and collected by the service supplier, shall report the fact to the Tax Administrator within 30 days of the use and shall directly remit to the Town the amount of tax due.

(b)

The Tax Administrator may require the service user to provide, subject to audit, filed tax returns or other satisfactory evidence documenting the quantity of gas or electricity used and the price thereof.

(Code 1990, § 3.44.080; Ord. No. 94-12, § 1, 1994)

Taxes collected from a service user which are not remitted to the Tax Administrator on or before the due dates provided in this chapter are delinquent. Should the due date occur on a weekend or legal holiday, the return may be postmarked on the first regular working day following a Saturday/Sunday or legal holiday.

(Code 1990, § 3.44.090; Ord. No. 94-12, § 1, 1994)

Any tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the Town. Any such tax collected from a service user which has willfully been withheld from the Tax Administrator shall be deemed a debt owed to the Town by the person required to collect and remit. Any person owing money to the Town under the provisions of this chapter shall be liable to an action brought in the name of the Town for the recovery of such amount.

(Code 1990, § 3.44.100; Ord. No. 94-12, § 1, 1994)

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the Town or an officer thereof, to prevent or enjoin the collection of taxes sought to be collected pursuant to this chapter and payment of all tax, interest and penalties shall be required as a condition precedent to seeking judicial review of any tax liability.

(Code 1990, § 3.44.105; Ord. No. 10-10, 9-22-2010)

The duty to collect and remit the taxes imposed by this chapter shall be performed as follows:

(1)

Notwithstanding the provisions of Section 3.44.090, the tax shall be collected insofar as practicable at the same time as and along with the charges made in accordance with the regular billing practices of the service supplier. When the amount paid by a service user to a service supplier is less than the full amount of the service charge and tax which has accrued for the billing period, such amount and any subsequent payments by a service user shall be applied to the utility charge first until such charge has been fully satisfied. Any remaining balance shall be applied to taxes due. In those cases where a service user has notified the service supplier of his or her refusal to pay the tax imposed on the energy charges Section 3.44.160(c) will apply.

(2)

The duty to collect tax from a service user shall commence with the beginning of the first full regular billing period applicable to the service user where all charges normally included in such regular billing are subject to the provisions of this chapter. When 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.

(Code 1990, § 3.44.110; Ord. No. 94-12, § 1, 1994)

(a)

The Tax Administrator shall have the power and duty and is directed to enforce each and all of the provisions of this chapter.

(b)

The Tax Administrator shall have the power to adopt rules and regulations not inconsistent with provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the Tax Administrator's office.

(c)

The Tax Administrator may make administrative agreements to vary the strict requirements of this chapter so that collection of any tax imposed here may be made in conformance with the billing procedures of particular service supplier so long as the agreements result in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of each such agreement shall be on file in the Tax Administrator's office.

(d)

The Tax Administrator shall determine the eligibility of any person who asserts a right to exemption from the tax imposed by this chapter. The Tax Administrator shall provide the service supplier with the name of any person who the Tax Administrator determines is exempt from the tax imposed hereby, together with the address and account number to which service is supplied to any such exempt person. The Tax Administrator shall notify the service supplier of termination of any person's right to exemption hereunder, or the change of any address to which service is supplied to any exempt person.

(e)

The Tax Administrator shall provide notice to all service suppliers, at least 90 days prior to any annexation or other change in the Town's boundaries. The notice shall set forth the revised boundaries by street and address, along with a copy of the final annexation order from the Local Agency Formation Commission.

(Code 1990, § 3.44.120; Ord. No. 94-12, § 1, 1994)

(a)

When the Tax Administrator determines that a service user has deliberately withheld the amount of the tax owed from the amounts remitted to a person required to collect the tax, or that a service user has refused to pay the amount of tax, such person may be relieved of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods as set forth below.

(b)

The service supplier shall provide the Town with amounts refused or unpaid along with the names and addresses of the service users neglecting to pay the tax imposed under provisions of this chapter. When the service user has failed to pay the amount of tax for a period of two or more billing periods, the service supplier shall be relieved of the obligation to collect taxes due.

(c)

The Tax Administrator shall notify the service user that the Tax Administrator assumed responsibility to collect the taxes due for the Stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to said user personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the person required to collect the tax; or should the service user's address change, to the last known address. If a service user fails to remit the tax to the Tax Administrator within 15 days from the date of the service of the notice upon said user, which shall be the date of mailing if service is not accomplished in person, a penalty of 25 percent of the amount of the tax set forth in the notice shall be imposed, but not less than $5.00. The penalty shall become part of the tax herein required to be paid.

(Code 1990, § 3.44.130; Ord. No. 94-12, § 1, 1994)

It is the duty of every person required to collect and remit to the Town any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as the person may have been liable for the remittance to the Tax Administrator, which records the Tax Administrator shall have the right to inspect at all reasonable times.

(Code 1990, § 3.44.140; Ord. No. 94-12, § 1, 1994)

(a)

When 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, it may be refunded as provided in this section.

(b)

Notwithstanding the provisions of Subsection (a) of this section, a service supplier may claim a refund; or take as credit against taxes remitted the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established that the service user from whom the tax has been collected did not owe the tax; provided, however, that neither a refund nor a credit shall be allowed unless the amount of

the tax erroneously or illegally collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the person required to collect and remit. A service supplier that has collected any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user, may refund such amount to the service user and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns, provided such credit is claimed in a return dated no later than three years from the date of overpayment.

(c)

Notwithstanding other provisions of this section, when a service supplier, pursuant to an order of the State Public Utilities Commission or a court of competent jurisdiction, makes a refund to service users of charges for past utility services, the taxes paid pursuant to this chapter on the amount of such refunded charges shall also be refunded to service users, and the service supplier shall be entitled to claim a credit or such refunded taxes against the amount of tax which is due upon the next monthly returns. In the event this chapter is repealed, the amounts of any refundable taxes will be borne by the Town.

(d)

A service supplier may refund the taxes collected to the service user in accordance with this section or by the service supplier's customary practice.

(Code 1990, § 3.44.150; Ord. No. 94-12, § 1, 1994)

The service supplier shall, upon notification, terminate or suspend any utility user's tax commencing with the first full billing period which occurs after the effective date of such action by the Town Council.

(Code 1990, § 3.44.160; Ord. No. 94-12, § 1, 1994)

The tax imposed by this chapter shall go into effect on March 1, 1995.

(Code 1990, § 3.44.170; Ord. No. 94-12, § 1, 1994)

(a)

On and after July 1, 2011, all proceeds of the tax levied and imposed hereunder shall be accounted for and paid into a special fund designated for use by the Town, and used only for the following purposes: planning, construction, operation, maintenance, programming and administration of facilities and projects for mobility, recreation, and arts and culture. Such tax proceeds shall not supplant existing funds used for the purposes set forth above.

(b)

The Town is hereby authorized to incur indebtedness in the form of bonds, notes, contractual obligations or other evidences of indebtedness authorized by law to finance or refinance the costs associated with the

purposes set forth in Subsection (a) of this section, and to pay any costs of issuing or incurring such indebtedness, to fund reserve funds, capitalized interest, costs of credit enhancement, costs of interest rate hedging arrangements or any other financing costs associated with such indebtedness. Such indebtedness shall be solely payable from and may be secured by a pledge and lien on, the proceeds of the tax levied and imposed hereunder.

(Code 1990, § 3.44.190; Ord. No. [20]10-04, § 2, 3-17-2010)

On or before December 31 of each year, the Town's independent auditors shall complete a Town mobility, recreation, and arts and culture utility user tax audit report. Such report shall review whether the tax revenue collected hereunder is properly managed and expended in accordance with the provisions of this chapter. The report shall be reviewed by the Tourism and Recreation Commission, or such other commission or committee as is hereafter designated by the Town Council, sitting as an audit committee. Such review shall include confirmation that all tax proceeds of the Town's mobility, recreation, and arts and culture utility users tax ordinance are used for the purposes specified in Section 3.44.190.

(Code 1990, § 3.44.200; Ord. No. [20]10-04, § 3, 3-17-2010)

The Tourism and Recreation Commission, or such other commission or committee as is hereafter designated by the Town Council, shall annually conduct at least one public hearing where it takes public testimony as to how tax revenues collected under the Town mobility, recreation, and arts and culture utility user tax should be expended. After accepting such public input, such commission or committee shall make written recommendations to the Town Council as to how such tax revenues should be expended. Prior to expending such tax revenues as have not been earlier committed, the Town Council shall consider the recommendations of such commission or committee report.

(Code 1990, § 3.44.210; Ord. No. [20]10-04, § 4, 3-17-2010)