Scotts Valley Municipal Code Ch. 3.35 Utility Users' Tax

The taxes imposed and levied by the provisions of this chapter are solely for the purpose of providing revenue for the usual current expenses of the city. The provisions of this chapter are not enacted for regulatory purposes.

(Ord. 109.3 § 1 (part), 1992)

Except where the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter:

A. "City" means the city of Scotts Valley, California, including all of the territory and jurisdiction thereof as presently constituted, and any and all of the same which shall later come into existence by any manner or means whatsoever.

B. "Director" means the director of finance or his/her designee of the city.

C. "Electrical corporation" and "gas corporation" shall have the same meanings as defined in Sections 216, 218 and 222 respectively of the Public Utilities Code of the state of California as those sections may be amended from time to time.

D. "Master meter user" means any person who receives gas, electric or water service from a service supplier through a master meter and who distributes that service to customers or tenants through a submeter which measures the customers' or tenants' individual use.

E. "Month" means a calendar month.

F. "Person" means all domestic and foreign corporations, associations, syndications, joint stock companies, partnerships of every kind, joint ventures, clubs, business or common law trusts, societies and individuals.

G. "Service supplier" means a person who does any of the following:

1. Sells electrical energy to a source user in the city;

2. Sells gas which is delivered through mains or pipes to a service user in the city;

3. Transports and delivers electrical energy or delivers gas through mains or pipes to a service user in the city and who charges the service user for such transportation and delivery.

H. "Service user" means a person who does any of the following:

1. Uses electrical energy in the city;

2. Uses gas in the city which is delivered through mains or pipes.

(Ord. 109.3 § 1 (part), 1992)

A. Exempted Users. This chapter shall not apply where the director determines that a service user is one of the following:

1. The city;

2. Any person when imposition of a tax imposed by this chapter upon that person would be in violation of the constitution of the United States or state of California;

3. The state, any county, municipal corporation, city and county, district or any political subdivision of the state;

4. Service users qualified for and participating in the local electrical and gas corporation "Low Income Rate Assistance" program (LIRA);

5. The United States or any agency or instrumentality thereof; or

6. Any person otherwise exempted by this chapter from payment of a tax imposed by this chapter.

B. Filing Application. Except those persons determined to be exempt pursuant to the rules and regulations adopted by the director, no exemption shall be granted by the director unless an application in writing, stating under penalty of perjury the specific grounds for the exemption, is filed with the director. The application shall be submitted on forms furnished by the director.

C. Proof Required. No exemption shall be granted by the director unless the applicant establishes, to the satisfaction of the director, a right thereto by written records demonstrating entitlement.

D. Determination By Director. Within a reasonable time following receipt of a properly completed application, the director shall notify the applicant in writing of the director's determination on exemption. In the event of approval, the director shall also give written notice to the applicants service supplier. The director 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.

E. Action by Service Supplier(s). If the director grants an exemption to a service user, the service supplier(s) shall discontinue collecting taxes imposed by this chapter from the service user within sixty days of receipt of the director's written notice.

F. Refund. In the event a service user who has paid the tax is granted an exemption, that service user may apply for a refund of the tax paid under Section 3.35.170.

G. Finality. Any decision of the director made under this section shall be final.

(Ord. 109.3 § 1 (part), 1992)

Nothing contained in this chapter is intended to conflict with applicable rules, regulations and tariffs of any service supplier subject to the jurisdiction of the California Public Utilities Commission. In the event of any conflict, the provision of said rules, regulations and tariffs shall control.

(Ord. 109.3 § 1 (part), 1992)

A. Imposition of Tax. Every person using electrical energy in the city, other than an electrical or gas corporation, shall pay a tax at the rate of four percent of the charges billed for such energy, including charges for service, transportation and delivery. The service user shall pay the tax to the service supplier or master meter user at the same time as and along with payment of the charges billed for the energy.

B. Duty of Seller. If the person selling electrical energy, also transports and delivers such energy to the service user, then that person shall collect from the service user four percent of the charges billed for the energy and shall remit the tax to the director.

C. Duty of Deliverer. The person transporting and delivering the electrical energy, if different from the person selling such energy, shall collect from the service user four percent of the charges billed for such transportation and delivery and shall remit the tax to the director.

D. Procedure. The procedure for collection and remittance of the tax is set forth in Section 3.35.070. Ord. 109.3 § 1 (part), 1992)

A. Imposition of Tax. Every person in the city using gas which is delivered through mains or pipes, other than an electrical corporation or gas corporation, shall pay a tax at the rate of four percent of the charges billed for such gas, including charges for service, transportation and delivery. The service user shall pay the tax to the service supplier or master meter user at the same time as and along with payment of the charges billed for the gas.

B. Duty of Seller. If the person selling gas also transports and delivers such gas to the service user, that person shall collect from the service user four percent of the charges for the gas by that service supplier and shall remit the tax to the director.

C. Duty of Deliverer. The person transporting and delivering the gas, if different from the person selling such gas, shall collect from the service user four percent of the charges billed for transportation and delivery and shall remit the tax to the director.

D. Procedure. The procedure for collection and remittance of the tax is set forth in Section 3.35.070.

(Ord. 109.3 § 1 (part), 1992)

Whenever a master meter service user submeters electrical or gas energy to residents or tenants of an apartment house, mobilehome park or other residential multifamily accommodation, or to nonresidential premises, the following provisions shall apply:

A. The master meter user shall collect the tax from the submetered tenants or customers at the same time and along with the same charges imposed in accordance with the regular billing practice of the master meter user.

B. The master meter user shall pay to the service supplier four percent of the charges billed by the service supplier to the master meter user.

C. The master meter user shall remit to the director the full amount of taxes collected from submetered tenants or customers in excess of the amount of taxes paid to the service supplier. Such remittance shall be made semi-annually for each six months in which there was an excess. Such remittance shall be made on January 31st of each calendar year for any and all excess in the period July 1st through December 31st, and on July 31st for any and all excess in the period January 1st through June 30th. Concurrently with each remittance of taxes, the master meter user shall file a report with the director on a form furnished by the director. The report shall include such information required by the director.

(Ord. 109.3 § 1 (part), 1992)

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

A. Collection by Service Supplier. Except as provided in Section 3.35.070(E), the service supplier shall collect the tax from the service user at the same time as and along with the charges made in accordance with the regular billing practice of the service supplier. In the event the amount paid by a service user is less than the full amount of the charges and the taxes which have accrued for any billing period, a proportionate share of both the charges and the tax shall be deemed to have been paid unless:

1. The amount paid is equal to the full amount of the charges due; or

2. The service user has notified the service supplier of the service user's refusal to pay all or any portion of the tax due.

B. First Regular Billing Period. Except as provided in Subsection (C) of this section, the duty of a service supplier to collect the tax from a service user shall commence with the regular billing period applicable to that service user on or before July 1, 1992.

C. Annexations. Whenever the city annexes property, it shall provide notice to service suppliers of the addresses of service users within the boundaries of the newly annexed area. The duty of a service supplier to collect the tax from a service user within the newly annexed area shall commence no later than the third regular billing period applicable to that service user after the service supplier receives the notice provided for in this subsection. However, the time to commence collection may be extended by the director, for good cause, upon a prior written request.

D. Remittance by Service Supplier. The service supplier shall remit to the director either the amount of taxes collected or the amount of taxes billed each month, including delinquent taxes collected or billed at the same time as and along with collection of the delinquent service charges, on or before the twenty-fifth day of the following month. Concurrently with each remittance of taxes, the service supplier shall file a return with the director on forms furnished by the director. The information to be provided with the return shall include such information as the director may reasonably require in rules and regulations adopted by the director to ensure proper administration of this chapter.

E. Timely Remittance. If remittance by service supplier is made by personal delivery, then remittance is timely if delivered on or before the due date provided in this section. Whenever remittance is by mail or other delivery service, the director shall consider the remittance as timely if:

1. The envelope containing the remittance bears a postmark or receipt showing that the remittance was mailed or sent on or before the due dates provided in this section or if the due date occurs on a weekend or legal holiday, the remittance was postmarked on the first regular working day following a Saturday/Sunday, or legal holiday; or

2. Proof satisfactory to the director is furnished that the remittance was, in fact, sent or deposited in the mail on or before the due date.

(Ord. 109.3 § 1 (part), 1992)

The director is authorized to establish rules and regulations consistent with the provisions of this chapter concerning payment, collection, and remittance of the taxes imposed herein. Such rules and regulations shall be on file and available for public examination in the office of the director.

(Ord. 109.3 § 1 (part), 1992)

A. Every service supplier required to collect and remit to the director any tax imposed by this chapter and every master meter user required under Section 3.35.060 to remit taxes collected from service users in excess of those taxes paid to service providers, shall keep and preserve, for a period of three years from the date of remittance, all records as may be necessary to determine the amount of any tax such service supplier, service user or master meter user may have collected or been required to remit.

B. All such records shall be made available for inspection, audit or copying by the city's authorized representative at any time during regular business hours upon written request by the city.

(Ord. 109.3 § 1 (part), 1992)

A. Delinquent Remittance. Taxes billed or required to be collected from a service user by a service supplier or excess taxes collected by a master meter user which are not remitted to the director on or before due dates provided in Sections 3.35.060 and 3.35.070 are delinquent.

B. Penalties and Interest. Penalties and interest for delinquent remittance of any tax shall be assessed as follows:

1. Any service supplier or master meter user who fails to remit any tax imposed by or required to be collected pursuant to this chapter within the time required shall pay a penalty of ten percent of the amount of delinquent remittance.

2. If the director determines that nonpayment of any remittance is due to intentional misrepresentation or intentional material omission by the service supplier or master meter user, a penalty of twenty-five percent of the amount of the delinquent remittance shall be added in addition to the penalty imposed by Section 3.35.100 (B)(1).

3. In addition to the penalties imposed by Subsection (B)(1) and (2) of this section, any service supplier or master meter user who fails to remit any tax imposed by this chapter on or before the due dates shall pay interest at an annual rate established by the city to be one percent per month on the unpaid balance.

(Ord. 109.3 § 1 (part), 1992)

A. Delinquent Tax. Any tax imposed on a service user by this chapter which is not paid to a service supplier, master meter user or the director on or before the due dates provided in this chapter is delinquent.

B. Delinquent Service Charges. Whenever a service user has not timely paid the service charges and the tax billed by the service supplier or master meter user, the service supplier or master meter user shall pursue collection of the delinquent tax in the same manner as and along with the pursuit of the delinquent service charges. The service supplier or master meter user shall impose, and the service user shall pay, interest on such tax at the same rate of interest as charged by the service supplier or master meter user on the delinquent service charges. The interest imposed on the tax shall become a part of the tax to be paid by the service user and remitted to the director by the service supplier or master meter user. When collected, the service supplier or master meter user shall remit the delinquent tax and all accrued interest thereon to the director in the same manner as provided in Sections 3.35.060, 3.35.070(C) and (D).

C. Refusal to Pay Tax. Whenever the director determines that a service user has paid for the service but has not paid or refuses to pay to a service supplier or master meter user any tax imposed by this chapter, the following provisions shall apply:

1. Collection by Director. The director shall relieve the service supplier or master meter user of the duty to collect the delinquent tax from such service user for those billing periods for which the tax was not paid.

2. Demand for Payment. The director shall notify the service user in writing that the director has assumed responsibility to collect the delinquent tax for the stated periods and shall demand payment of such tax from the service user.

3. Penalties and Interest. If the service user fails to remit the delinquent tax to the director within fifteen days from the date of mailing of such notice, the service user shall pay a penalty of ten percent of the amount of tax set forth in the notice or ten dollars, whichever is the greater amount. In addition to the penalty imposed by this subsection, any service user who fails to remit the delinquent tax and penalty to the director within the time specified shall pay interest on the amount of tax and penalty at an annual rate established by the city to be one percent per month on the unpaid balance. All penalties and interest imposed upon a service user under this subsection shall become a part of the tax required to be paid and remitted.

D. Failure to Pay Tax to Director. Penalties and interest for the delinquent remittance of any tax required to be paid to the director shall be assessed as follows:

1. Any service user who fails to remit a tax imposed by Sections 3.35.040 or 3.35.050 within the time required in Section 3.35.070 shall pay a penalty of ten percent of the amount of the tax or ten dollars whichever amount is greater.

2. If the director determines that nonpayment of any tax is due to either intentional misrepresentation or intentional material omission, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalty imposed in Section 3.35.110(D)(1).

3. In addition to the penalties imposed in this section, the service user shall pay interest as established by the city in Section 3.35.110(C)(3) on the amount of the tax and penalties beginning from the date on which the tax first became delinquent and shall remain until the full amount owing is paid.

4. All penalties and interest imposed upon a service user under this subsection shall become a part of the tax required to be paid and remitted.

(Ord. 109.3 § 1 (part), 1992)

A. Assessment. If any service supplier, master meter user or service user required pursuant this chapter to pay a tax to the director, fails to timely remit any tax imposed by this chapter, the director shall obtain the necessary facts and information on which to base a reasonable estimate of the tax due. The director shall establish the assessment amount due from the service supplier, master meter user or service user for the tax and the interest and penalties due on the delinquent tax.

B. Notice of Assessment. The director shall give written notice to the service supplier, master meter user or service user of the amount assessed as delinquent taxes including penalties and interest. The service supplier, master meter user or service user may, within fifteen days from the date of mailing such assessment notice, make application, in writing, to the director for a hearing on the amount of the assessment.

C. Hearing.

1. Application. If an application for hearing is received by the director within the prescribed time, the director shall give not less than five days' written notice to the service supplier, master meter user or service user of the time and place in which to appear and show cause as to why the assessed amount should not be fixed. If an application for hearing has not been received by the director within the time specified in Section 3.35.120(B), the tax, interest and penalties assessed by the director shall become final and conclusive and immediately due and payable.

2. Notice of Determination. After the hearing, the director shall notify service supplier, master meter user or service user of the amount determined to be due and payable. The amount shall be deemed due and payable fifteen days after the mailing of the notice of determination stating the amount assessed and payable.

(Ord. 109.3 § 1 (part), 1992)

A. Any person aggrieved by any decision of the director pursuant to Sections 3.35.100, 3.35.110 or 3.35.120 may appeal to the city council by filing a notice of appeal with the city clerk and the director. The notice shall be received by the city clerk within fifteen days of the mailing of the notice of determination set forth in Section 3.35.120. The council shall fix a time and place for the hearing of the appeal and the city clerk shall give written notice to the applicant.

B. The city council shall hear and determine all questions raised on the appeal and may affirm, reverse or modify the decision of the director. The decision of the council shall be final and any amount found to be owing by the council shall be immediately due and payable. The city clerk shall mail a written notice of the council's decision to the applicant.

(Ord. 109.3 § 1 (part), 1992)

A. Debt Owed by Service User. Any debt resulting from the tax, penalty and interest, required to be paid by a service user under this chapter shall be deemed a debt owned by the service user to the city.

B. Debt Owed by Service Supplier or Master Meter User.

1. Any tax required to be collected under this chapter by a service supplier which is not billed to the service user shall be deemed a debt owed to the city by the service supplier.

2. Any tax collected from a service user by a service supplier which has not been remitted to the director shall be deemed a debt owed to the city by the service supplier.

3. Any excess tax collected by a master meter user and not remitted to the director when due and payable shall be deemed a debt owed to the city by the master meter user.

C. Action. Any person owing money to the city under this chapter shall be liable to the city for the recovery of the amount, together with all costs and attorneys' fees for any action brought by the city to recover the tax, penalty, interest and other fees due the city.

D. Nonexclusive Remedy. The remedy provided in this section is not exclusive but is in addition to all other legal remedies available to the city, whether civil or criminal to recover the nonpayment of taxes and recovery of debt owed to city.

(Ord. 109.3 § 1 (part), 1992)

A. Service suppliers or master meter users who seek to collect charges from parties in bankruptcy proceedings shall also include in any such claim the amount of taxes due city for those services, unless the director determines that such duty is in conflict with any federal or state law, rule, or regulation, or that such action would be administratively impractical.

B. All service suppliers and master meter users not required to collect taxes in connection with pursuit of claims for service charges in bankruptcy proceedings pursuant to Section 3.35.150(A), shall notify the director in writing within forty-five days after receipt of notice that a service user has initiated bankruptcy proceedings.

C. All service suppliers or master meter users who do not seek to collect charges for service in bankruptcy proceedings shall notify the director in writing within forty-five days after receipt of notice that a service user has initiated bankruptcy proceedings.

D. All service suppliers and master meter users who receive notice of a service user's refusal to pay shall notify the director in writing within forty-five days after receipt of such notice.

E. All persons who have notified the director of a refusal or bankruptcy proceeding to Subsections (B), (C) and (D) of this section shall be relieved of the duty to collect and remit any tax owed by the service user.

F. All remittances of taxes collected pursuant to this section shall be remitted on or before the twenty-fifth day of the month following collection.

(Ord. 109.3 § 1 (part), 1992)

Payment of delinquent taxes by service suppliers, master meter users and service users shall be applied by the director to the oldest outstanding obligation of the service supplier or service user.

(Ord. 109.3 § 1 (part), 1992)

A. Filing Claim.

1. Any tax imposed by this chapter, including any interest or penalty added thereto, may be refunded by the director as provided in Sections 3.35.170(B) and 3.35.170(C) whenever such tax has been:

a. Overpaid;

b. Paid more than once; or

c. Erroneously collected or received by the city, including any instance where a service supplier, pursuant to an order by the California Public Utilities Commission or a court of competent jurisdiction refunds to its service users taxes paid on refunded charges.

2. No refund shall be paid by the director unless a written claim stating, under penalty of perjury, the specific grounds upon which the refund is sought and is filed with the director within three years of the date of payment of such tax. The claim shall be submitted on forms furnished by the director. The director may require such additional information or documentation to support a claim for refund or credit as set forth in the rules and regulations adopted by the director.

B. Refund or Credit to Service Supplier. A service supplier may obtain a refund or take credit against taxes to be remitted for any amount overpaid, paid more than once, or erroneously collected or received by the city. Neither a refund nor a credit shall be allowed unless the tax has either been refunded to the service user or credited to charges subsequently payable by the service user to the service supplier.

C. Refund to Service User. A service user may obtain a refund of any tax, interest or penalty when:

1. The service user was required to remit to the director a tax imposed by Sections 3.35.040 and 3.35.050 and the service user establishes to the satisfaction of the director that the amount was overpaid, paid more than once, or erroneously collected; or

2. The service user establishes that the amount was overpaid, paid more than once, or erroneously collected and has paid the tax to the service supplier but is unable to obtain a refund or credit from the service supplier who collected the tax.

D. Finality. Any decision of the director made under this section shall be final.

(Ord. 109.3 § 1 (part), 1992)

The city council shall review the continued implementation of this tax on an annual basis at the same time as the city council reviews its annual budget. The collection of the tax shall be renewed each year on or before the first day of the city's fiscal year by a majority vote of the council. Should the council fail to garner a majority vote, collection shall be suspended until renewed by a majority vote of council.

(Ord. 109.3 § 1 (part), 1992)