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Ordinance 927 ORDINANCE NO. 927 ORDINANCE OF THE CITY OF GILROY ADOPTING AS CHAPTER 26B OF THE GILROY CITY CODE A TELEPHONE, GAS, ELECTRICITY AND TELEVISION CABLE USERS TAX, TO BE KNOWN AS A UTILITY USERS TAX, ESTABLISHING THE RATES OF SAID TAX, PROVIDING FOR THE ADMINISTRATION AND COLLECTION THEREOF AND PROVIDING PENALTIES FOR VIOLATION. THE CITY COUNCIL OF THE CITY OF GILROY DOES ORDAIN AS FOLLOWS: SECTION I: ARTICLE I. GENERAL PROVISIONS. Sec. 26B.l Title. This Chapter shall be known as the "Utility Users Tax Ordinance of the City of Gilroy. If Sec. 26B.2 Adoption; Charter authority. This Chapter is adopted pursuant to the powers of the City of Gilroy as a charter city as provided in Article II, Section 200, of the City Charter, and as authorized by Section 6 of Article XI of the Constitution of the State of California. Sec. 26B.3 Definittons. Except where the context otherwise requires, the definitions contained in this Section shall govern the construction of this Chapter. The word "may" is always directory and discretionary and not mandatory; the word "shall" is always mandatory and not directory or discretion- ary. City. "City" shall mean the City of Gilroy, 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. Collector. "Collector" shall mean the Director of Finance ORDINANCE NO. 927 of the City of Gilroy. Director. "Director" shall mean the Director of Finance of the City of Gilroy. Electrical Corporation, Gas Corporation and Telephone Corporation. "Electrical Corporation", "Gas Corporation" and "Telephone CorporationU shall have the same meanings as defined in Sections 218, 222, 234, respectively, of the Public Utilties Code of the State of California. Month. ''Month'' shall mean a calendar month. Person. tfperson" shall mean all domestic and foreign corporations, associations, syndicates, joint stock companies, partnerships of every kind, joint ventures, clubs, Massachusetts business or common law trusts, societies, and individuals, and shall include a municipal corporation. Service Supplier. "Service Supplieru shall mean a person required to collect and remit a tax under the provisions of this Chapter. Service User. "Service User" shall mean a person required to pay a tax imposed under the provisions of this Chapter. Sec. 26B.4. Exemptions. Nothing contained in this Chapter shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violqtion of the Constitution of the United States or that of the State of California. Sec. 26B.5. Conflicts. 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 provisions of said rules, regulations and tariffs shall -2- ORDINANCE NO. 927 control. Sec. 26B.6. Tax; effective date. The taxes imposed by this Chapter shall become operative November 1, 1971. ARTICLE II. TELEPHONE USERS TAX. Sec. 26B.7. Tax imposed. There is hereby imposed a tax upon every person in the City, other than a telephone corporation, using intrastate telephone communication services in the City. The tax imposed by this Article shall be at the rate of five (5) percent of the charges made for such services, and shall be paid by the person paying for such services. Sec. 26B.8. Exemptions. Notwithstanding the provisions of Section 26B.7 the tax imposed under this Article 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 Section 4251 of Title 26 of the United States Code, as said section existed on November 1, 1967. Sec. 26B.9. Exclusions. As used in this Article, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin- operated telephone 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. The words "telephone Communication services" shall not include land mobile services or maritime mobile services as defined in -3- ORDINANCE NO. 927 Section 2.1 of Title 47 of the Code of Federal Regulations, as said section existed on October 1, 1967. Sec. 26B. 10. Tax. collection. , The tax imposed in this Article shall be collected from the service user by the person providing the intrastate telephone communication services. The amount of tax collected in one month shall be remitted to the Collector on or before the last day of the following month. ARTICLE III. ELECTRICITY USERS TAX. Sec. 26B.ll. Tax imposed. There is hereby imposed a tax upon every person in the City, other than an electrical corporqtion or a gas corporation, using electrical energy in the City. The tax imposed by this Article shall be at the rate of five (5) percent of the charges made for such energy, including minimum charges for service, and shall be paid by the person paying for such energy. Sec. 26B.12. Exclusions. As used in this Article, the words "using electrical energy" shall not be construed to mean: (a) The storage of such energy by a person in a battery owned or possessed by him for use in an automobile or other machinery or device apart fromthe premises upon which the energy was received; provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; or (b) the mere receiving of such energy by an electrical corporation or a government agency at a point within the City for resale. Sec. 26B.13. Tax; collection. The tax imposed in this Article shall be collected from the -4- ORDINANCE NO. 927 service user by the person selling such electrical energy. The amount of tax collected in one month shall be remitted to the Collector on or before the last day of the following month. ARTICLE IV. GAS USERS TAX. Sec. 26B.14. Tax imposed. There is hereby imposed a tax upon every person in the City, other than a gas corporation or an electric corporation, using gas in the City which is delivered through mains or pipeso The tax imposed by this Article shall be at the rate of five (5) percent of the charges made for such gas, including minimum charges for service, and shall be paid by the person paying for such gas. Sec. 26B.15. Exclusions. As used in this Article, the term "charges" shall not include charges made for gas used in the generation of electrical energy by a public utility or a governmental agency, and the term "using gas" shall not be construed to mean the mere receiving of such gas by a gas corporation or governmental agency at a point within the City for resale. Sec. 26B.16. Tax; collection. The tax imposed in this Article shall be collected from the service user by the person selling the gas. The amount collected in one month shall be remitted to the Collector on or before the last day of the following month. ARTICLE Vo CABLE: TELEVISION USERS TAX Seco 26B.17. Tax imposed. There is hereby imposed a tax upon every person in the City using cable television service in the City. The tax imposed by this Article shall be at the rate of five (5) -5- ORDINANCE NO. 927 percent of the charges made for such service and shall be paid by the person paying for such service. Sec. 26B.18. Tax. collection. , The tax imposed in this Article shall be collected from the service user by the person providing such cable television service. The amount of tax collected in one month shall be remitted to the Collector on or before the last day of the following month. ARTICLE VI. COLLECTION OF TAX. Sec. 26B.19. Suit by City. 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 Collector shall be deemed a debt owed to the City by the person required to collect and remit. Any person owing money to the City under the provisions of this Chapter shall be liable to an action brought in the name of the City for the recovery of such amount. Sec. 26B.20. Duty to collect; procedures. The duty to collect and remit the taxes imposed by this Chapter shall be performed as follows: (a) The tax shall be collected insofar as practicable at the same time as and along with the charges made in accordance with regular billing practice of the service supplier. Except in those cases where a service user pays the full amount of said charges but does not pay any portion of a tax imposed by this Chapter, or where a service user has notified a service supplier that he is refusing to pay a tax imposed by this Chapter which said service supplier is required to collect, if the amount paid by a service user -6- ORDINANCE NOo 927 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. (b) The duty to collect 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. Where 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 period. Sec. 26B.2l. Administrative agreements. The Director may make administrative agreements to vary the strict requirements of this Chapter so that collection of any tax imposed herein may be made in conformance with the billing procedures of a particular service supplier so long as the overall result of said agreements results in collection of tax in conformance with the general purpose and scope of this Chapter. A copy of each such agreement shall be on file and available for public examination in the Director's office. ARTICLE VII. DELINQUENT TAXES Sec. 26B.22. Taxes; when delinquent. Taxes collected from a service user which are not remitted to the Collector on or before the due dates provided in this Chapter are delinquent. Sec. 26B.23. Service supplier; penalty. In addition to remitting the amount of the tax, any service supplier who fails to remit any tax imposed by this Chapter within the time required and upon five (5) days written -7- > ORDINANCE NO. ,. 297 I notice ID the service supplier of its failure to remit, shall pay a penalty of ten percent (10%) of the amount of the tax which shall be added on the last day of each month following the date on which remittance was due until the tax and penalties are remitted. Sec. 26B.24. Service supplier; fraud; penalty. If the Collector determines that the non-payment by any service supplier of any remittance due under this Chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the tax shall be added thereto in addition to the penqlty imposed by Section 26B.23. Sec. 26B.25. Service supplier; interest. In addition to the penalties imposed by Section 26:6.23. and 26B.24., any service supplier who fails to remit any tax imposed by this Chapter shall pay interest at the rate of one percent (1%) per month, or fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid. Sec. 26B.26. Service supplier; penalty and interest part of tax. Every penalty imposed upon a service supplier and such interest as accrues, under the provisions of Section 26B.23. to 26B.25., inclusive, shall become a part of the tax required to be remitted. Sec. 26B.27. Service user; penalty. In addition to paying the amount of the tax, any service user who fails to pay any tax imposed by this Chapter within sixty (60) days of the date of the receipt of notice of the amount of tax due from the service supplier shall pay a penalty of ten percent (10%) of the amount of the tax which shall be added on the last day of each month following the -8- ORDINANCE NO. 927 date on which payment was due until the tax and penalties are paid. Sec. 26B.28. Service user; fraud; penalty. If the Collector determines that the non-payment by any service user of any tax imposed by this Chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the tax shall be added thereto in addition to the penalty imposed by Section 26B.27. Sec. 26B.29. Service user; interest. In addition to the penalties imposed by Sections 26B.27. and 26B.28., any service user who fails to pay any tax imposed by this Chapter, shall pay interest at the rate of one percent (1%) per month, or fraction thereof, exclusive of penalties, from the date on which the remittance first became delinquent until paid, and a collection charge of ten dollars ($10.00) for each delinquent account. Sec. 26B.30. Service user; penalty and interest part of tax. Every penalty imposed upon a service user, and such interest as accrues, under the provisions of Sections 26B.27. to 26B.29., inclusive, shall became a part of the tax required to be paid. Sec. 26B.3l. Service user; penalties and interest collected by City. The penalties, interest, and collection charges imposed in Sections 26B.27. to 26B.29., inclusive, shall not be collected by the service supplier, but by the City. ARTICLE VII. FAILURE TO COLLECT AND REPORT TAX. Sec. 26B.32. Determination of tax by collector; notice. If any service supplier shall fail to make, within the time provided in this Chapter, any report and remittance of said tax or any portion thereof required by this Chapter, the -9- ORDINANCE NO. 927 Collector shall proceed in such manner as he may deem best to obtain facts and information on which to base his esti- mate of the tax due. As soon as the Collector shall procure such facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this Chapter and payable by any service supplier who has failed or refused to make such report and remittance, he shall proceed to determine and assess against such service supplier the tax, interest and penalties provided for by this Chapter. In case such determination is made, the Collector shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the service supplier so assessed at his last known place of address. Sec. 26B.33. Hearing on determination of tax; application; notice. The service supplier may within ten (10) days after the serving or mailing of the notice referred to in Section 26B.32. make application in writing to the Collector for a hearing on the amount assessed. If application by the service supplier for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the Collector shall become final and conslusive and immediately due and payable. If such application is made, the Collector shall give not less than five (5) days written notice in the manner prescribed herein to the service supplier to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such tax, interest and penalties. At such hearing, the service supplier may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. -10- ORDINANCE NO. 927 Sec. 26B.34. Determination of tax following hearing; notice; when due. After a hearing on the amount of tax assessed, the Collector shall determine the proper tax to be remitted, and shall thereafter give written notice to the service supplier in the manner prescribed above of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen (15) days unless an appeal is taken as provided in this Chapter. Sec. 26B.35. Collection of taxes from service user by City; Conditions; notice. Whenever the Collector determines that a service user has deliberately withheld the amount of any tax imposed on him by the provisions of this Chapter from the amounts remitted to a service supplier required to collect the tax, or that a service user has failed to pay the amount of the tax to such service s~pplier for a period of four (4) or more billing periods, or whenever the Collector deems it in the best interest of the City, he may relieve such service supplier of the obligation to collect taxes due under this Chapter from certain named service users for specified billing periods. The Collector shall notify the service user that he has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes, plus any penalty imposed and such interest as may be due pursuant to the provisions of Article VII of this Chapter. The notice shall be served on the service user by handing it to him 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 service supplier required to collect the tax; or, should the service user have changed his address, to his last known -11- ORDINANCE NO. 927 address. ARTICLE IX. AfPEALS. Sec. 26B.36. Who may appeal. Any person aggrieved by any decision of the Collector pursuant to this Chapter may appeal to the Director by filing a notice of appeal with the Director within fifteen (15) days of the serving or mailing of the decision. Sec. 26B.37. Hearing; notice. The Director shall fix a time and place for hearing such appeal. The Director shall give notice thereof in writing to such person by serving it personally or by depositing it in the United States Mail, postage prepaid, addressed to such person at his last known place of address. Sec. 26B.38. Hearing; determination. The Director shall have authority to determine all questions raised on such appeal at the time of the hearing. No determination so made by the Director shall conflict with any substantive provision of this Chapter. Sec. 26B.39. Hearing; penalties suspended. No penalty provided for in this Chapter shall be imposed after the filing of an appeal or prior to the completion of the hearing on the appeal and the making of a determination on the subject of the appeal by the Director. ARTICLE X. RECORDS Seco 26B.40. Retention J?eriod; access. It shall be the duty of every service supplier required to collect and remit to the City any tax imposed by this Chapter to keep and preserve, for a period of three (3) years, all records as may be necessary to determine the amount of such tax that such service supplier may have been required to -12- ORDINANCE NO. 927 collect and remit to the City, which records the Collector shall have the right to inspect at all reasonable times. ARTICLE Xlo REFUNDS. Sec. 26B.4l. Claim; filing period. Whenever the amount of any tax, interest or penalty has been overpaid or 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 this Article provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon whkh the claim is founded, is filed with the Collector within three (3) years of the date of paYment. The claim shall be on forms furnished by the Collector. Sec. 26B.42. Service supplier; refund. A service supplier may claim a refund or take as credit against taxes collected and remitted an amount overpaid, paid more than once, or erroneously or illegally collected or received, when it is established in a manner prescribed by the Collector that the person from whom the tax has been collected was not a service user. Sec. 26B.43. Service user; refund. Any service user may obtain a refund of taxes overpaid, or paid more than once, or erroneously or illegally collected or received by the City by filing a claim in the manner provided in Section 26B.4l., but only when the service user having paid the tax to the service supplier establishes to the satisfaction of the Collector that the service user has been unable to obtain a refund from the service supplier who collected the tax. Sec. 26B.44. Claim; proof requiredo No refund shall be paid under the provisions of this -13- ORDINANCE NOo 927 Article unless the claimant establishes his right thereto by written records showing entitlement thereto. SECTION II: All ordinances and parts of ordinances in conflict herewith are hereby repealed. SECTION III: This ordinance shall take effect and be in full force thirty (30) days from and after its adoption and approval. PASSED AND ADOPTED this 19th day of July, 1971, by the following vote: AYES: COUNCILMEMBERS: BATREZ, DUFFIN, HUGHAN, PATE, SILVA and GOODRICH NOES: COUNCILMEMBERS: STOUT ABSENT: COUNCILMEMBERS: None A/l. VD: ~ /Ih~(, . ayor ATTES:r: ! > ; ;.'{"l...,i~'~ is-li(. City Clerk I ( -14- ORDINANCE NO. 927 ...,..... .. " I, SUSANNE E. STEINMETZ, City Clerk of the City of Gilroy, do hereby certify that the attached Ordinance No. 927 is an original ordinance, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council held on the 19th day of July , 19~, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Gilroy. this 22nd day of July , 19 l..!... J , I / ", I ~'_ ~-.t- ~ ~ _, , {- /1 ~-.<;j ,/,. I ' t - ( I ,,_ ~- . _.. (( ! ,City Clerk of the City of Gilroy . ~ ~