Rancho Palos Verdes Municipal Code Ch. 3.30 Utility User Tax

Footnotes:

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Prior ordinance history—Ordinance Nos. 204 and 225.

The ordinance codified in this chapter shall be known as the "utility user tax ordinance."

(Code 1981, § 3.30.010; Ord. No. 292, § 1(part), 1993)

The following words and phrases, whenever used in this chapter, shall be construed as defined in this section, except where the context clearly requires otherwise:

City means the City of Rancho Palos Verdes.

Cogeneration electrical energy means the use for the generation of electricity of exhaust steam, waste steam, heat, or resultant energy from an industrial, commercial or manufacturing plant or process, or the use of exhaust steam, waste steam, or heat from a thermal power plant for an industrial, commercial, or manufacturing plant or process.

Electrical corporation, gas corporation, and water corporation shall have the same meanings as defined in Public Utilities Code §§ 218, 222 and 241, respectively, or any successor statute.

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

Month means a calendar month.

Person means all domestic and foreign corporations, firms, associations, syndicates, joint stock companies, partnerships of every kind, joint ventures, clubs, Massachusetts business or common-law trusts, societies and individuals. For the purposes of this chapter, the term "person" shall not include any public entity which purchases and uses utility services in the performance of governmental functions.

Service supplier means any person required to collect and remit a tax imposed by this chapter.

Service user means a person required to pay a tax imposed under the provisions of this chapter.

Tax administrator means the director of finance of the city or other person designated by the city manager to administer the provisions of this chapter.

(Code 1981, § 3.30.020; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 4, 2004; Ord. No. 443, § 1, 2006; Ord. No. 444U, § 1, 2006; Ord. No. 568, § 1, 5-19-2015)

A. Nothing in this chapter shall be construed as imposing a tax upon any person when the imposition of such tax upon that person would be in violation of the Constitution of the United States or the constitution of the state, or any federal or state statute.

B. The city council may, by resolution, establish one or more classes of persons or one or more classes of utility services otherwise subject to payment of the tax imposed by this chapter and to provide that such classes of persons shall be exempt, in whole or in part from the payment of the tax imposed by this chapter.

C. Charges made for energy used in the propulsion of a low emission motor vehicle, as defined in the Vehicle Code, shall be exempt, provided that the owner of such vehicle installs and maintains a separate metering system for the energy provided to the vehicle.

D. Notwithstanding the foregoing, the exemptions provided by subsections B and C of this section shall not be applicable unless and until applied for by the service user and granted in accordance with the provisions of subsections E and F of this section.

E. Any service user who becomes eligible for an exemption from the taxes imposed by this chapter because of the provisions of subsections B and C of this section, may file an application with the tax administrator for an exemption. Such application shall be made upon forms supplied by the tax administrator and shall recite facts under penalty of perjury which qualify the applicant for an exemption. The tax administrator shall review all such applications and shall certify as exempt those applicants determined to qualify therefor and shall notify all service suppliers 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 is given by the tax administrator. The service supplier shall eliminate such exempt service user from its tax billing procedure not later than 60 days after receipt of such notice from the tax administrator.

F. All exemptions certified by the tax administrator shall be effective for a period of two years and may thereafter be renewed by the tax administrator upon application to the tax administrator showing that the prerequisite facts supporting the initial qualification for exemption still continue; provided, however, that the exemption shall automatically terminate with any change in the service address or residence of the exempt individual. If the new address or residence is still within the city, such individual may apply for a new exemption with each change of address or residence. Any individual exempt from the tax shall notify the tax administrator within ten days of any change in fact or circumstance which 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.

G. Every service supplier is authorized to bill the tax imposed by this chapter to any new service user or to any account on which the service user's name has been changed (excluding changes attributable to spelling errors or other clerical errors) until such time as the service supplier receives notification from the tax administrator that an exemption has been granted pursuant to this section.

H. Notwithstanding any of the provisions of this section, 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 tax administrator of such fact and the tax administrator 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.

I. Corporations defined under section 3.30.020 shall be exempt from this tax.

(Code 1981, § 3.30.030; Ord. No. 292, § 1(part), 1993)

A. There is imposed a tax upon every person using electrical energy in the city. The tax imposed by this section shall be at the rate of three percent of the charges made for such energy and shall be paid by the person paying for such energy. The tax applicable to electrical energy provided by a nonutility supplier shall be determined by applying the tax rate to the equivalent charges the service user would have incurred if the energy used had been provided by an electrical corporation franchised by the city. Nonutility suppliers shall install and maintain an appropriate utility-type metering system which will enable compliance with this section.

B. The term "charges," as used in this section, shall include charges made for:

(1) Metered energy; and

(2) Minimum charges for service, including customer charges, service charges, standby charges, charges for temporary services, demand charges and annual and monthly charges and any other charges, fees and surcharges that are necessary to or common for the receipt, use or enjoyment of electric service; which are authorized or mandated by the state 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.

C. As used in this section, the term "using electrical energy" is not intended to, and does not, mean:

(1) The storage of such energy by a person in a battery owned or possessed by them for use in an automobile or other machinery or 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;

(2) The mere receiving of such energy by an electrical public utility or governmental agency at a point within the city for resale; or

(3) The use of such energy in the production or distribution of water by a public utility or a governmental agency.

(Code 1981, § 3.30.050; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 5, 2004)

A. There is imposed a tax upon every person using cogenerated electrical energy in the city at the rate specified in section 3.30.050 (Electricity user tax). The tax applicable to cogenerated electrical energy used on site shall be determined by applying the tax rate to the equivalent charges the cogenerator would have incurred if the energy used had been provided to the service user by an electrical corporation franchised by the city.

B. The cogenerator shall install and maintain an appropriate metering system which will enable compliance with this section.

C. If the cogenerator sells the energy for consumption in the city, the tax will be imposed by applying the tax rate to the equivalent charges for such service the service user would have incurred if the energy used had been provided by the electrical corporation franchised by the city and shall be collected from the service user by the service supplier.

(Code 1981, § 3.30.060; Ord. No. 292, § 1(part), 1993)

A. There is imposed a tax upon every person using gas energy in the city, which is delivered through mains or pipes or by mobile transport. The tax imposed by this section shall be at the rate of three percent of the charges made for such gas and shall be paid by the person paying for such gas.

B. The term "charges," as used in this section, shall include charges made for:

(1) Metered gas or mobile transport;

(2) Gas transportation charges; and

(3) Charges for service, including customer charges, service charges, minimum charges, demand charges, and annual and monthly charges and any other charge authorized or mandated by the state 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.

C. As used in this section, the term "using gas energy" is not intended to, and does not, mean:

(1) Charges made for gas which is to be resold and which is delivered through a gas pipeline distribution system or mobile transport;

(2) Charges made for gas used by a cogenerator or as the primary fuel in a fuel cell to generate electricity; or

(3) The use of gas energy in the production or distribution of water by a public utility or governmental agency.

(Code 1981, § 3.30.070; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 6, 2004)

A. There is imposed a tax upon every person using water in the city which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of three percent of the charges made for such water and shall be paid by the person paying for such water.

B. The term "charges," as used in this section, shall include charges made for:

(1) Metered water; and

(2) Minimum charges for service, including customer charges, ready to serve charges, standby charges and annual and monthly charges and any other charges, fees and surcharges that are necessary to or common for the receipt, use or enjoyment of water service, whether or not such charges, fees or surcharges appeal on a bundled or line item basis on the customer billing.

C. There shall be excluded from the bases on which the tax imposed by this section is computed charges for water which is to be resold and which is delivered through mains or pipes.

(Code 1981, § 3.30.080; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 7, 2004)

The taxes imposed by this chapter are 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 at the discretion of the city council.

(Code 1981, § 3.30.090; Ord. No. 292, § 1(part), 1993)

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

A. The tax imposed by this chapter shall be collected from the service user by the service suppliers. The amount collected in one month shall be remitted to the city and shall be due on or before the 20th day of the following month. If remitted by mail, such remittance shall be postmarked on or before the 20th day of the following month; provided, however, that if the 20th day falls on a weekend or legal holiday, and the remittance is made by mail, the remittance shall be postmarked as of the first business day following such weekend or legal holiday.

B. The tax shall be collected at the same time as, and along with, the charges made in accordance with the service supplier's regular billing practice. If the amount paid by a service user is less than the full amount of the charge and tax which has accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid.

C. The duty to collect the tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of this chapter. The operative date of this chapter shall be December 20, 1993. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall commence separately for each billing.

D. Any service user subject to the tax imposed by section 3.30.050 (Electricity user tax) or 3.30.070 (Gas user tax) who receives gas or electricity, including any related supplemental services, directly from a non-utility service supplier not under the jurisdiction of this chapter or who, 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 electricity or gas in the city 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.

(Code 1981, § 3.30.100; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 8, 2004)

A. Taxes collected from a service user by the service supplier which are not remitted to the tax administrator on or before the due dates provided in this chapter are delinquent and are subject to penalties and interest.

B. Penalties for delinquency in remittance of any tax collected or any deficiency determination, shall attach and be paid by the persons required to collect and remit at the rate of 15 percent of the total delinquent tax collected or imposed herein. Whenever fraud or gross negligence in reporting and remitting tax collections is discovered, the tax administrator shall have the power to impose additional penalties of 20 percent of taxes owed upon persons required to collect and remit taxes under the provisions of this section.

C. Every penalty imposed under the provisions of this section shall become a part of the tax owed and required to be remitted.

D. Any person required to remit to the tax administrator delinquent taxes as required in this section, shall pay interest at the rate of 1½ percent per month or portion thereof on the amount of tax owed exclusive of penalties from the date on which the tax first became delinquent until paid.

E. Notwithstanding the provisions of this section, no penalty or interest shall be applied if delinquencies are the result of natural disasters or other phenomena beyond the control of the person charged with collecting and remitting the tax, provided the person required to remit the tax notifies the tax administrator as soon as normal communications permit.

(Code 1981, § 3.30.110; Ord. No. 292, § 1(part), 1993)

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 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 service supplier. Any person owing money to the city under the provisions of this chapter shall be liable in an action brought by the city attorney in the name of the city for the recovery of such amount.

(Code 1981, § 3.30.120; Ord. No. 292, § 1(part), 1993)

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 the provisions of this chapter for the purpose of carrying out and enforcing the payment, collection, and remittance of the taxes imposed herein. A copy of such rules and regulations shall be maintained on file in the office of the tax administrator.

C. The tax administrator may enter into administrative agreements to vary the strict requirements of this chapter so that collection of any tax billing imposed hereby may be made in conformance with the billing procedures of a particular service supplier, so long as said agreements result in collection of the taxes imposed herein in conformance with the general purpose and scope of this chapter. A copy of each such agreement shall be maintained on file in the office of the tax administrator.

D. The tax administrator may make a special assessment for taxes not paid or remitted by a person required to pay or remit. A notice of the assessment shall include the amount of the taxes owned, penalties imposed and the time and place when such an assessment shall be heard by the city council for confirmation or modification. The tax administrator shall mail a copy of such notice to the service supplier and to the service user at least ten days prior to the date of the hearing and shall post such notice for at least five days continuously prior to the date of the hearing at those places in the city normally designated for the posting of such notices. Any interested party having any objections may appear and be heard at the hearing, provided the objection is filed in writing with the tax administrator prior to the time set for the hearing. At the time fixed for considering said assessment, the city council shall hear the same together with any objection timely filed and thereupon may confirm or modify said assessment by resolution.

E. 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 that a service user has failed to pay the amount of the tax to a service supplier for a period of two or more billing periods, or whenever the tax administrator deems it in the best interest of the city, the tax administrator may relieve the service supplier of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods. The tax administrator shall notify the service user that the tax administrator has assumed responsibility to collect the taxes due for the stated periods and shall demand payment of such taxes. The notice shall be served on the service user by handing it to them personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the person required to collect the tax; or, should the service user have changed their address, to their 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 them, 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 owed.

F. The tax administrator may waive any of the penalties and interest established by this chapter when the tax administrator determines that such a waiver is appropriate and in accordance with the intent of this chapter.

G. The tax administrator, from time to time, may survey the providers of the various utility services, which are subject to the provisions of this chapter, to identify the various unbundled billing components of such service that they commonly provide to residential and commercial 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 service. Thereafter, the tax administrator may issue and disseminate to such service providers an administrative ruling identifying those components and items that are:

(1) Necessary for or common to the receipt, use or enjoyment of such service; or

(2) Currently, or historically have been, included in a single or bundled rate for such service by a provider to a class of retail customers. Charges for such components and items shall be subject to the tax that is imposed by this chapter.

H. If one or more non-taxable items are bundled or billed together with one or more taxable items under a single charge on a customer's bill, the entire single charge shall be deemed taxable by the tax administrator unless, upon the written request of the customer, the service supplier can reasonably identify the non-taxable component of the single charge based upon one or more of the following methodologies, as selected by the tax administrator:

(1) The average industry charges for the individual non-taxable items included in the entire single charge;

(2) The amount of the entire single charge less the average industry charges for the individual taxable items included in the entire single charge; or

(3) The service supplier's books and records that are kept in the regular course of business, which must be consistent with generally accepted accounting principles.

(Code 1981, § 3.30.130; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 9, 2004)

It shall be the duty of every person required to collect and remit to the city 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 they may have been liable for the collection of and remittance to the tax administrator, which records the tax administrator or their designee shall have the right to inspect at all reasonable times.

(Code 1981, § 3.30.140; Ord. No. 292, § 1(part), 1993)

A. Whenever the amount of any tax, interest or penalty has been overpaid, paid more than once, or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subsection B of this section, provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within one year of the date of payment. Any action brought against the city pursuant to this section shall be subject to the provisions of Government Code §§ 945.6 and 946. Compliance with this section shall be a prerequisite to a suit thereon. The claim shall be on forms furnished by the tax administrator, shall be presented in accordance with the requirements of section 3.24.030 and shall clearly establish the claimant's right to the refund by written records demonstrating entitlement thereto. It is the intent of the city that the one-year claim requirement of this subsection be given retroactive effect; provided, however, that any claims that arose prior to the enactment date of the one-year claims period set forth in the subsection, which are not otherwise barred by the then-applicable statute of limitations or claim procedure, must be filed with the tax administrator as provided in this title within 90 days following the effective date of the ordinance from which this section is derived.

B. A person required to collect and remit taxes imposed under this chapter may claim a refund or take a credit against taxes collected and not yet remitted in the amount overpaid, paid more than once, or erroneously or illegally collected or received, when it is established in a manner prescribed by the tax administrator 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 so collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the person required to collect and remit.

C. No refund shall be paid under the provisions of this section unless the claimant establishes their right thereto by written records.

D. Notwithstanding other provisions of this section, whenever a service supplier, pursuant to an order of the state public utilities commission or a court of competent jurisdiction, makes any refund to service users of charges for past utility services, the taxes paid pursuant to this Code on the amount of such refunded charges shall also be refunded to service users, and the service supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax which is due upon the next monthly returns. In the event this chapter is repealed, the amount of any refundable taxes will be borne by the city.

(Code 1981, § 3.30.150; Ord. No. 292, § 1(part), 1993; Ord. No. 403, § 10, 2004)

Any person who is aggrieved by any decision of the tax administrator with respect to the amount of such tax, interest and penalties, if any, or any other determination of the tax administrator made pursuant to section 3.30.130 may appeal to the city council by filing a notice of appeal with the city clerk within 15 days of the serving or mailing of the tax administrator's determination. The city clerk shall fix a time and date for hearing such appeal and shall give notice in writing to the appellant in the manner prescribed in section 3.30.130(D) for service of notice of hearing. The findings of the city council shall be final and conclusive and shall be served upon the appellant in the manner prescribed in section 3.30.130(D). Any amount found to be due shall be immediately due and payable upon the service of the notice.

(Code 1981, § 3.30.160; Ord. No. 403, § 11(part), 2004)

Any person who violates any of the foregoing provisions of this chapter is guilty of a misdemeanor and shall be punished therefor in conformance with section 1.08.010.

(Code 1981, § 3.30.170; Ord. No. 292, § 1(part), 1993)

Beginning in 1998, and every year thereafter, the city manager shall submit for consideration by the city council, in connection with the preparation of the city's annual budget for the following fiscal year, an analysis of the revenues derived from the taxes imposed by this chapter. Based on the needs of the city, the city council shall determine whether any modification to the rate of the tax is necessary or if the tax imposed by this chapter is unnecessary. However, in no event shall the rate of the tax exceed three percent without a prior vote of the people in favor of such increase. The review required by this section shall be completed by the city council prior to the adoption at each year's annual budget, which shall occur by June 30. If the city council fails to conduct the periodic review of the tax as required by this section, the city shall not cause the tax to be collected until the review has been conducted by the city council.

(Code 1981, § 3.30.190; Ord. No. 292, § 1(part), 1993; proposition CC, 11-5-1996)