HomeMy WebLinkAbout50A - ORD AND RESO UUTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
APRIL 15, 2014
TITLE:
RESOLUTIONS AND RELATED DOCUMENTS
REQUIRED TO SUBMIT TO VOTERS AT THE
NOVEMBER 4, 2014 MUNICIPAL ELECTION:
AN ORDINANCE MODERNIZING THE UTILITY
USERS'TAX
CITY MANAGER
10 1WRA►1�7rT_C«il
CLERK OF COUNCIL USE ONLY:
❑ As Recommended
❑ As Amended
❑ Ordinance on 15' Reading
❑ Ordinance on 2ntl Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
On January 21, 2014, the City Council unanimously voted to direct the City Manager and staff to
prepare the required resolutions, documents, and guidelines necessary to proceed with a ballot
measure to modernize the Utility Users' Tax (UUT), including, but not limited to, all of the following:
a) a resolution giving notice of the City's General Municipal Election to be held in the
City of Santa Ana on November 4, 2014 for the submission of questions to the
voters relating to changes in the City's UUT;
b) a resolution containing the ballot question and related proposed UUT ordinance;
c) a resolution authorizing Councilmembers to file written arguments for or against the
amendments;
d) guidelines for preparation of arguments for or against the proposed amendments;
e) all other documents required to proceed with the UUT modernization.
DISCUSSION
The City of Santa Ana currently receives approximately $24 million in UUT revenue which
constitutes the third largest revenue source for the City. The UUT is applied to four categories:
electricity, telephone, water, and gas. Electricity represents 44% ($10.5 million) of the total
revenue received while telephone represents 37% ($9 million), with water and gas at 11% ($2.6
million) and 8% ($1.9 million) respectively.
In 1975, the City adopted the UUT to support public safety efforts. Currently the UUT is applied to
electricity, gas, telephone and water utilities at the rate of 6 percent. In addition, the tax places a
maximum UUT cap of $11,000 on total UUT remittances by a single service user.
50A -1
Resolutions and Other Required Documents to Submit
To Voters at the November 4, 2014 Election
April 15, 2014
Page 2
In recent years, there have been substantial changes in communication technology and how the
industry charges for these services. Telephone service users who may have had a traditional
landline telephone may now use new electronic communication technologies (Telecom), such as
VOIP (Voice Over Internet Protocol) and prepaid wireless. Where previously charges were based
on time and distance, they may now be bundled or use a prepaid format. It is currently estimated
that on a statewide basis up to 25% of individuals use prepaid wireless services. In Santa Ana,
the estimated percentage is 40 %.
In order to ensure proper inclusion of language to capture a changing legislative and technological
environment, City staff surveyed all California UUT ballot measures /initiatives from 2006 to
present. In addition, staff worked with Muniservices to review the various initiatives in order to
capture modern ordinance language. From survey data, it was apparent that all the prominent
categories included expanding the UUT language to address the modernization of local agency
UUT ordinances.
A survey of California UUT rates was also conducted and indicated that rates range from 1% to
11 %. However, the average rate statewide is 5.5 %. As such, staff is recommending a reduction of
the City's Utility User Tax rate from 6% to 5.5 %. All thirty nine cities that expanded the UUT
language and provided a rate reduction in their ballot initiative were adopted by their electorate.
This request for City Council action will initiate the process to modernize the City's UUT, and
protect and ensure ongoing receipt of UUT revenue. The recommended ordinance has been
developed so that it: (1) is consistent with best practices that have been recommended and
adopted by voters in other jurisdictions, (2) is consistent with current law and proposed Federal
and State legislation, (3) reflects the continuing evolution of Telecom from telephone service to
telecommunications service; and (4) protects a revenue source that is vital in providing much
needed programs and services to the Santa Ana community.
In addition to the initiative reducing the UUT rate from the current level of 6% to 5.5 %, the
proposed UUT ordinance also eliminates the maximum tax cap of $11,000. The cap has not been
raised since 2003 and is currently out of date. Most cities do not impose a maximum tax cap. It is
estimated that the combined modernization and reduction will result in a revenue neutral impact to
the City in FY 2014 -15. The recommended actions comply with California Election Code
requirements regarding adoption of certain resolutions to call the election and place the proposed
question to the City's voters.
FISCAL IMPACT
The County Registrar of Voters office has estimated that the additional cost of adding a ballot
measure to the City's consolidated general municipal election would be approximately $15,000
based on current voter registration in the City. Funds for these administrative costs will be
available in the 2014 -15 fiscal year budget in the Clerk of the Council Other Agency Services
Account (no. 01107031- 62300).
50A -2
Resolutions and Other Required Documents to Submit
To Voters at the November 4, 2014 Election
April 15, 2014
Page 3
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
y II W
J
y' 1 I
RESOLUTION GIVING NOTICE OF ELECTION
y 1
RESOLUTION NO. 2014 -XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR AND GIVING NOTICE OF A
GENERAL MUNICIPAL ELECTION TO BE HELD IN THE
CITY OF SANTA ANA ON NOVEMBER 4, 2014 FOR
SUBMISSION TO THE VOTERS OF A BALLOT MEASURE
RELATING TO UTILITY USERS TAX AND REQUESTING
THE BOARD OF SUPERVISORS OF ORANGE COUNTY
TO CONSOLIDATE THE GENERAL MUNICIPAL
ELECTION WITH THE STATE'S GENERAL ELECTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. A general election of the City of Santa Ana will be held on November 4,
2014, for the purpose of voting on a ballot measures relating to Utility
Users Tax.
B. There will be a statewide general election held on November 4, 2014.
C. It is desirable that said general election of the City of Santa Ana be
consolidated with the statewide general election to be held on the same
date and; that within the City of Santa Ana, the precincts, polling places
and election officers be the same, and that the Board of Supervisors of the
County of Orange canvass the returns of both elections, in all respects as
if there were only one election.
Section 2. That pursuant to the requirements of Section 10403 of the Elections
Code of the State of California, the Board of Supervisors of the County of Orange is
hereby requested to consent to and order the consolidation of the November 4, 2014
general election of the City of Santa Ana for the purpose of voting on a ballot measure
relating to Utility User Tax with the statewide general election to be held on the same
date.
Section 3. The Board of Supervisors of the County of Orange is hereby
authorized to canvass the returns of said general municipal election pursuant to Section
10411 of the Elections Code of the State of California.
Section 4. The City of Santa Ana recognizes that additional costs will be
incurred by the County by reason of this consolidation and agrees to reimburse the
County of Orange for any such costs.
50A -6 Resolution NoPage 1 4xof2
Section 5. The Clerk of the Council is hereby directed to file a certified copy of
this resolution with the Board of Supervisors of the County of Orange and a certified
copy of this resolution with the Registrar of Voters of the County of Orange.
Section 6. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this day of , 2014.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
BV:
Jose Sandoval,
Chief Assistant City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the
attached Resolution No. 2014 -XXX to be the original resolution adopted by the City
Council of the City of Santa Ana on
Date:
Resolution No. 2014 -XXX
Page 2 of 2
50A -7
Maria D. Huizar,
Clerk of the Council
RESOLUTION CONTAING THE BALLOT QUESTION
y 1 m •
RESOLUTION N0, 2014 -XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA CALLING FOR THE PLACEMENT OF A
GENERAL TAX MEASURE TO BE PLACED ON THE
BALLOT OF THE GENERAL MUNICIPAL ELECTION TO
BE HELD ON TUESDAY, NOVEMBER 4, 2014 FOR
SUBMISSION TO THE VOTERS OF A PROPOSED
ORDINANCE TO UPDATE AND MODERNIZE THE CITY'S
UTILITY USERS TAX AS IT RELATES TO
TELECOMMUNICATIONS AND REDUCING THE TAX AS
IT RELATES TO ALL UTILITY USERS TAX CHARGES;
AND DIRECTING THE CITY ATTORNEY TO DRAFT AN
IMPARTIAL ANALYSIS
WHEREAS, pursuant to Sections 35 -155, 35 -156, 35 -157 and 35 -159 of the
Santa Ana Municipal Code, the City currently levies a Utility Users Tax ( "UUT ") at the
rate of six (6) percent of all charges made for telephone, electricity, gas and water
services; and
WHEREAS, if approved by the voters, the proposed ordinance modernizing and
reducing the UUT across the board to the rate of five and one -half (5 1/2) percent of all
charges made for telecommunication, electricity, gas and water services would be on
par with the State average and will help ensure stability in budget planning and reduce
the risk of legal challenges; and
WHEREAS, the UUT is a general tax which funds the City general fund. The
general fund pays for essential City services such as police protection, fire and
paramedic services, street operations and maintenance, library services, parks and
recreation services and general municipal services to the public; and
WHEREAS, the City of Santa Ana has already taken a variety of measures to
reduce spending, including avoiding filling vacant positions, implementing furlough days
for City employees, closing City facilities on certain days, and reducing services, and
whereas further reductions in spending will have real and noticeable impacts on public
safety, the quality of life enjoyed by Santa Ana residents, and Santa Ana's
attractiveness as a place to live, work and do business; and
WHEREAS, the City currently receives approximately $24 million per year in
UUT, approximately $9 million which is generated solely from telephone communication
services, and such revenues are critical to the public welfare and the City's financial
ability to provide essential municipal services; and
Resolution No. 2014 -XXX
Page 1 of 5
m •
y
WHEREAS, several lawsuits have been filed in other jurisdictions challenging the
application of the JUT to certain telephone /telecommunication services as a result of
outdated ordinance definitions or references to outdated federal laws; and
WHEREAS, the different rulings in these cases has caused some ambiguity in
the City's application of its UUT to telephone and other telecommunications services
which could result in the elimination of 37% or more of the City's UUT revenue,
amounting to over $9 million of loss general fund revenue per year; and
WHEREAS, a number of telephone companies are applying the City's UUT
inconsistently due to outdated definitions and legal uncertainty, exposing the City to
refund claims and legal challenges regarding inconsistent application of the City's
telephone communications tax; and
WHEREAS, without immediate voter approval of the City's telephone
communications UUT, the City will increase its exposure to claims for refunds on the
City telephone communications UUT that could adversely affect its budget; and
WHEREAS, without immediate voter approval of the City's telephone
communications UUT, the City's budget could be vulnerable to serious financial
shortfalls due to adverse court rulings (existing and /or imminent) regarding the City's
telephone communications UUT that cannot be covered by current City reserves or by
readily available alternative revenue sources; and
WHEREAS, such financial shortfalls may force the reduction of essential
municipal services, which will endanger the health, safety and general welfare of the
City and its citizens; and there is a need to amend the UUT in order to maintain funding
for City services at existing levels for the health, safety and general welfare of the
citizens of the City; and
WHEREAS, the City desires reasonable certainty in the collection and receipt of
its UUT and budgetary planning; consistent application of its telephone communications
UUT; and the elimination of current risks associated with its existing telephone
communications UUT: and
WHEREAS, on November 6, 1996, the voters of the State of California approved
Proposition 218 (California Constitution, Article XIIC), an amendment to the State
Constitution which requires that all general taxes which are imposed, extended or
increased must be approved by a majority vote of the voters; and
WHEREAS, the amendments proposed may be characterized as an imposition
or extension of the UUT under Proposition 218; and
WHEREAS, Proposition 218 permits the City Council to call an election to
impose, increase or extend a general tax; and
Resolution No. 2014 -XXX
Page 2 of 5
50A -10
WHEREAS, as described above, modernization of the telephone
communications UUT will have a positive effect on the health, safety and general
welfare of the citizens of the City by eradicating all ambiguities related to the telephone
communications UUT.
WHEREAS, based on all of the information presented at the April 15, 2014
meeting of the City Council, both written and oral, including the staff reports, minutes,
and other relevant materials, the City Council finds that under CEQA Guidelines
15060(c)(2) and 15378 (b), subdivisions (2) and (4), this tax does not constitute a
project under CEQA and therefore review under CEQA is not required.
NOW, THEREFORE, the City Council of the City of Santa Ana hereby finds,
determines and declares as follows that:
Section 1. The foregoing recitals are true and correct and are hereby
incorporated by reference.
Section 2. Submission of Ordinance. Pursuant to Government Code Section
53724 and any other applicable requirements of laws of the State of California, the City
Council hereby orders the following proposed ordinance to be submitted to the voters of
the City of Santa Ana at the general municipal election to be held on November 4, 2014:
"Shall the ordinance reducing and reforming the utility users
YES
tax for telephone, electricity, gas and water services from six
(6) percent to five and one -half (5 1/2) percent be adopted ?"
NO
Section 3. Text of Ordinance. The full text of the proposed ordinance to be
submitted to the voters is attached as Exhibit 1 (the "Ordinance ") hereto and shall be
made available to the public upon request. If a simple majority of the qualified voters
voting on the Measure vote in favor therefore, the Measure shall be deemed adopted
upon the City Council's declaration of the results of the election and effective 10 days
thereafter.
Section 4. Conduct of Election. The Clerk of the Council is authorized,
instructed and directed to procure and furnish any and all official ballots, printed matter
and all supplies, equipment and paraphernalia that may be necessary in order to
properly and lawfully conduct the election. In all particulars not recited in this
Resolution, the election shall be held and conducted as provided by law for holding
municipal elections.
Resolution No. 2014 -XXX
Page 3 of 5
50A -11
Section 5. Notice of Election. Notice of time and place of holding the
election is hereby given, and the Clerk of the Council is authorized, instructed and
directed to five further or additional notice of the election, in time, form and manner as
required by law.
Section 6. Impartial Analysis. Pursuant to Elections Code section 9280, the
City Council hereby directs the Clerk of the Council to transmit a copy of the ordinance
to the City Attorney. The City Attorney shall prepare an impartial analysis of the
ordinance, not to exceed 500 words in length, showing the effect of the ordinance on
the existing law and the operation of the ordinance, and transmit such impartial analysis
to the Clerk of the Council within ten (10) days following the adoption of this Resolution.
Section 7. Certification. This Resolution shall take effect immediately upon
its adoption by the City Council, and the Clerk of the Council shall attest to and certify
the vote adopting this Resolution.
ADOPTED this day of , 2014.
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
M
Jose Sandoval,
Chief Assistant City Attorney
AYES:
NOES:
ABSTAIN:
NOT PRESENT
Councilmembers:
Councilmembers:
Councilmembers:
Councilmembers:
Resolution No. 2014 -XXX
Page 4 of 5
50A -12
Miguel A. Pulido
Mayor
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the
attached Resolution No. 2014 -XXX to be the original resolution adopted by the City
Council of the City of Santa Ana on
Date:
50A -13
Maria D. Huizar,
Clerk of the Council
Resolution No. 2014 -XXX
Page 5 of 5
RESOLUTION AUTHORIZING CITY COUNCIL
MEMBERS TO SUBMIT ARGUMENTS
50A -14
RESOLUTION NO. 2014 -XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING CITY COUNCIL MEMBERS
TO SUBMIT WRITTEN ARGUMENTS FOR OR AGAINST
THE PROPOSED ORDINANCE TO UPDATE AND
MODERNIZE THE CITY'S UTILITY USERS TAX WHICH IS
TO BE PLACED ON THE BALLOT OF THE GENERAL
MUNICIPAL ELECTION TO BE HELD ON TUESDAY,
NOVEMBER 4, 2014
WHEREAS, California Elections Code Section 9282 authorizes the filing of
written arguments for or against City measures, and Elections Code Section 9287
establishes priorities for filing written arguments in favor of and against City measures;
and
WHEREAS, on April 15, 2014, the City Council adopted Resolution No. 2014- -
authorizing the calling and placement on the ballot a proposed ordinance modernizing
and reducing the UUT across the board to the rate of five and one -half (5 1/2) percent of
all charges made for telecommunication, electricity, gas and water services to be
submitted to the electors at the November 4, 2014 general municipal election; and
WHEREAS, the City Council desires to authorize the filing of written arguments
for and /or against the adoption of the following ballot measure proposing amendments
to the Santa Ana City Municipal Code by the Mayor and /or other members of the City
Council in accordance with Elections Code section 9282(b):
"Shall the ordinance reducing and reforming the utility users tax
YES
for telephone, electricity, gas and water services from six (6)
percent to five and one -half (5 1/2) percent be adopted ?"
NO
NOW, THEREFORE, the City Council of the City of Santa Ana hereby finds,
determines and declares as follows that:
Section 1. The foregoing recitals are true and correct and are hereby
incorporated by reference.
Section 2. Authorization to Submit Arguments. Section 9282(b) of the
Elections Code of the State of California provides that in a local election, the legislative
body may authorize any member(s) of the City Council to write arguments for or against
Resolution No. 2014 -XXX
Page 1 of 3
50A -15
any measure placed on the ballot by the City Council. The City Council hereby
authorizes the Mayor and /or City Council members to prepare and file written
arguments in favor of or against the proposed ordinance described above
Section 3. Authors. That, in accordance with Section 9283 of the Elections
Code, the printed names and signatures of not more than five authors shall appear with
any argument submitted in accordance with this resolution.
Section 4. Argument not exceed 300 words. That, in accordance with
Section 9282(c) of the Elections Code, any written argument in favor of or against the
proposed ordinance described above shall not exceed 300 words.
Section 5. City Council Preference and Priority. The City Council hereby
authorizes and directs the Clerk of the Council to give preference and priority to any
written argument for or against the City ordinance set forth above that includes a
member or members of the City Council (up to five members), and then to other
arguments as set forth in California Elections Code section 9287.
Section 6. Deadline for Arguments. In accordance with California Elections
Code section 9286(b), the deadline for filing with the City Clerk (and changing or
withdrawing) arguments for or against the proposed ordinance described above shall be
not later than 5:00 p.m. on April 29, 2014.
Section 7. Certification. This Resolution shall take effect immediately upon its
adoption by the City Council, and the Clerk of the Council shall attest to and certify the
vote adopting this Resolution.
ADOPTED this day of , 2014.
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
In
Jose Sandoval,
Chief Assistant City Attorney
Resolution No. 2014 -XXX
Page 2 of 3
50A -16
Miguel A. Pulido
Mayor
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the
attached Resolution No. 2014 -XXX to be the original resolution adopted by the City
Council of the City of Santa Ana on
Date:
50A -17
Maria D. Huizar,
Clerk of the Council
Resolution No. 2014 -XXX
Page 3 of 3
ORDINANCE FOR VOTER CONSIDERATION
50A -18
Exhibit A
ORDINANCE NO. NS -XXX
AN ORDINANCE OF THE PEOPLE OF SANTA ANA
MODERNIZING THE TELECOMMUNICATIONS UTILITY USERS
TAX AND REDUCING THE UTILITY USERS TAX RATE FOR
TELECOMMUNICATIONS, ELECTRICITY, GAS AND WATER
FROM 6% TO 5'/2 %
THE PEOPLE OF THE CITY OF SANTA ANA DO ORDAIN AS FOLLOWS:
SECTION 1: Section 35 -151 of the Santa Ana Municipal Code is hereby amended such
that it reads as follows:
Sec. 35 -151. Short title.
This article shall be known as the "Utility Users Tax Ordinance of the City of Santa Ana."
The word "ordinance ", "code" or "article" as used in this article shall mean the "Utility Users Tax
Ordinance" unless otherwise so indicated.
SECTION 2: Section 35 -152 of the Santa Ana Municipal Code is hereby amended such
that it reads as follows:
Sec. 35 -152. Purpose.
This article is required for the purpose of fixing the rate of taxation for the utility users'
tax, and for the purpose of providing a tax levy for the usual and current expenses of the City of
Santa Ana.
SECTION 3: Section 35 -153 of the Santa Ana Municipal Code is hereby amended such
that it reads as follows:
Sec. 35 -153, Definitions.
The following words and phrases whenever used in this article shall be construed as
defined in this section, unless otherwise indicated.
(a) "Ancillary telecommunication services" means services that are associated with or
incidental to the provision, use or enjoyment of telecommunications services,
including but not limited to the following services:
Ordinance No. NS -XXX
Page 1 of 11
50A -19
(1) "Conference bridging service" means an ancillary service that links two (2) or
more participants of an audio or video conference call and may include the
provision of a telephone number. Conference bridging service does not include
the telecommunications services used to reach the conference bridge.
(2) "Detailed telecommunications billing service" means an ancillary service of
separately stating information pertaining to individual calls on a customer's billing
statement.
(3) "Directory assistance" means an ancillary service of providing telephone number
information, and /or address information.
(4) "Vertical service" means an ancillary service that is offered in connection with
one or more telecommunications services, which offers advanced calling features
that allow customers to identify callers and to manage multiple calls and call
connections, including conference bridging services.
(5) "Voice mail service" means an ancillary service that enables the customer to
store, send or receive recorded messages. Voice mail service does not include
any vertical services that the customer may be required to have in order to utilize
the voice mail service.
(b) "Billing address" shall mean the mailing address of the service user where the
service supplier submits invoices or bills for payment by the customer.
(c) "City" shall mean the City of Santa Ana.
(d) "Day" shall mean a calendar day.
(e) "Gas" shall mean natural or manufactured gas or any alternate hydrocarbon fuel that
may be substituted therefore.
(f) "Mobile telecommunications service" shall mean commercial mobile radio service, as
defined in Section 20.3 of Title 47 of the Code of Federal Regulations and as set
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the
regulations thereunder.
(g) "Month" shall mean a calendar month.
(h) "Non- utility service supplier" means:
(1) a service supplier, other than a supplier of electric distribution services to all
or a significant portion of the city, which generates electricity for sale to
others, and shall include but is not limited to any publicly -owned electric
utility, investor -owned utility, cogenerator, distributed generation provider,
exempt wholesale generator (15 U.S.C. Section 79z -5a), municipal utility
district, federal power marketing agency, electric rural cooperative, or other
supplier or seller of electricity;
Resolution No. 2014 -XXX
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50A -20
(2) an electric service provider (ESP), electricity broker, marketer, aggregator,
pool operator, or other electricity supplier other than a provider of electric
distribution services to all or a significant portion of the city, which sells or
supplies electricity or supplemental services to electricity users within the city;
and
(3) a gas service supplier, aggregator, marketer or broker, other than a supplier
of gas distribution services to all or a significant portion of the city, which sells
or supplies gas or supplemental services to gas users within the city.
(i) "Paging service" means a "telecommunications service" that provides transmission of
coded radio signals for the purpose of activating specific pagers; such transmissions
may include messages and /or sounds.
Q) "Person" shall mean, without limitation, any natural individual, firm, trust, common law
trust, estate, partnership of any kind, association, syndicate, club, joint stock
company, joint venture, limited liability company, corporation (including foreign,
domestic, and non - profit), joint power agency, municipal district or municipal
corporation (other than the city), cooperative, receiver, trustee, guardian, or other
representative appointed by order of any court.
(k) "Place of primary use" means the street address representative of where the
customer's use of the telecommunications service primarily occurs, which must be
the residential street address or the primary business street address of the customer.
(1) "Post -paid telecommunication service" means the telecommunication service
obtained by making a payment on a communication -by- communication basis either
through the use of a credit card or payment mechanism such as a bank card, travel
card, credit card, or debit card, or by charge made to a service number which is not
associated with the origination or termination of the telecommunication service.
(m) "Prepaid telecommunication service" (including prepaid mobile telecommunication
service) shall mean the right to access telecommunication services, which must be
paid for in advance and which enables the origination of communications using an
access number or authorization code, whether manually or electronically dialed.
(n) "Private telecommunication service" means a telecommunication service that entitles
the customer to exclusive or priority use of a communications channel or group of
channels between or among termination points, regardless of the manner in which
such channel or channels are connected, and includes switching capacity, extension
lines, stations, and any other associated services that are provided in connection
with the use of such channel or channels. A communications channel is a physical
or virtual path of communications over which signals are transmitted between or
among customer channel termination points (i. e., the location where the customer
either inputs or receives the communications).
Ordinance No. NS -XXX
Page 3 of 11
50A -21
(o) "Service address" means the residential street address or the business street
address of the service user. For a telecommunication service user, "service address"
means either:
(1) The location of the service user's telecommunication equipment from which the
telecommunication originates or terminates, regardless of where the
telecommunication is billed or paid; or,
(2) If the location in subsection (1) of this definition is unknown (e.g., mobile
telecommunications service or VoIP service), the service address means the
location of the service user's place of primary use.
(3) For prepaid telecommunication service, "service address" means the point of
sale of the services where the point of sale is within the city, or if unknown, the
known address of the service user (e.g., billing address or location associated
with the service number), which locations shall be presumed to be the place of
primary use.
(p) "Service supplier" shall mean any entity or person, including the city that provides,
sells, or resells a utility service to a user of such service within the city.
(q) "Service user" shall mean a person required to pay a tax imposed under the
provisions of this article.
(r) "State" shall mean the State of California.
(s) "Streamlined Sales and Use Tax Agreement" means the multi -state agreement
commonly known and referred to as the Streamlined Sales and Use Tax Agreement,
as it is amended from time to time.
(t) "Tax administrator" shall mean the Finance Director, or his or her designee.
(u) "Telecommunications service" means the transmission, conveyance, or routing of
voice, data, audio, video, or any other information or signals to a point, or between or
among points, whatever the technology used. The term "telecommunications
services" includes such transmission, conveyance, or routing in which computer
processing applications are used to act on the form, code or protocol of the content
for purposes of transmission, conveyance or routing without regard to whether such
services are referred to as voice over internet protocol (VoIP) services or are
classified by the Federal Communications Commission as enhanced or value added,
and includes video and /or data services that are functionally integrated with
"telecommunication services." "Telecommunications services" include, but are not
limited to the following services, regardless of the manner or basis on which such
services are calculated or billed: ancillary telecommunication services; intrastate,
interstate, and international telecommunication services; mobile telecommunications
service; prepaid telecommunication service; post -paid telecommunication service;
private telecommunication service; paging service; 800 service (or any other toll -free
numbers designated by the Federal Communications Commission); 900 service (or
any other similar numbers designated by the Federal Communications Commission
for services whereby subscribers who call in to pre- recorded or live service). The
term "telecommunication services" shall include, but is not limited to, charges for:
Resolution No. 2014 -XXX
Page 4 of 11
50A -22
connection, reconnection, termination, movement, or change of telecommunication
services; late payment fees; detailed billing; central office and custom calling
features (including but not limited to call waiting, call forwarding, caller identification
and three -way calling); voice mail and other messaging services; directory
assistance; access and line charges; universal service charges; regulatory or
administrative fees, charges or surcharges, including charges or surcharges for
programs imposed by state or federal law (whether such charges or surcharges are
imposed on the service supplier or the customer); local number portability charges;
and text and instant messaging. "Telecommunication services" shall not include
digital downloads that are not "ancillary telecommunication services," such as music,
ringtones, games, and similar digital products.
(v) "VolP (Voice Over Internet Protocol)" means the digital process of making and
receiving real -time voice transmissions over any Internet Protocol network.
(w) "800 Service" means a "telecommunications service" that allows a caller to dial a
toll -free number without incurring a charge for the call. The service is typically
marketed under the name "800," "855," "866," "877," and "888" toll -free calling, and
any subsequent numbers designated by the Federal Communications Commission.
(x) "900 Service" means an inbound toll "telecommunications service" purchased by a
subscriber that allows the subscriber's customers to call in to the subscriber's
prerecorded announcement or live service. "900 service" does not include the
charge for: collection services provided by the seller of the "telecommunications
services" to the subscriber, or service or product sold by the subscriber to the
subscriber's customer. The service is typically marketed under the name "900"
service, and any subsequent numbers designated by the Federal Communications
Commission.
SECTION 4: Section 35 -155 of the Santa Ana Municipal Code is hereby amended such
that it reads as follows:
Sec. 35 -155. Telecommunication Users' Tax.
(a) There is hereby imposed a tax upon every person in the city using
telecommunication services. The tax imposed by this Section shall be at the rate of
five and one half percent (5.5 %) of the charges made for such services and shall be
collected from the service user by the telecommunication services supplier or its
billing agent. There is a rebuttable presumption that telecommunication services,
which are billed to a billing or service address in the city, are used, in whole or in
part, within the city's boundaries, and such services are subject to taxation under this
Section. There is also a rebuttable presumption that prepaid telecommunication
services sold within the city are used, in whole or in part, within the city and are
therefore subject to taxation under this Section. If the billing address of the service
user is different from the service address, the service address of the service user
shall be used for purposes of imposing the tax. As used in this Section, the term
"charges" shall include the value of any other services, credits, property of every kind
Ordinance No. NS -XXX
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or nature, or other consideration provided by the service user in exchange for the
telecommunication services.
(b) "Mobile telecommunications service" shall be sourced in accordance with the
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C.
Section 124). The tax administrator may issue and disseminate to telecommunication
service suppliers, which are subject to the tax collection requirements of this article,
sourcing rules for the taxation of other telecommunication services, including but not
limited to post -paid telecommunication services, prepaid telecommunication
services, VolP, and private communication services, provided that such rules are
based upon custom and common practice that further administrative efficiency and
minimize multi jurisdictional taxation (e.g., Streamlined Sales and Use Tax
Agreement).
(c) The tax administrator may issue and disseminate to telecommunication service
suppliers, which are subject to the tax collection requirements of this article, an
administrative ruling identifying those telecommunication services, or charges
therefore, that are subject to or not subject to the tax of subsection (a) above.
(d) To prevent actual multi jurisdictional taxation of telecommunication services subject
to tax under this Section, any service user, upon proof to the tax administrator that
the service user has previously paid the same tax in another state or city on such
telecommunication services, shall be allowed a credit against the tax imposed to the
extent of the amount of such tax legally imposed in such other state or city; provided,
however, the amount of credit shall not exceed the tax owed to the city under this
Section.
(e) The tax on telecommunication services imposed by this Section shall be collected
from the service user by the service supplier. The amount of tax collected in one
month shall be remitted to the tax administrator, and must be received by the tax
administrator on or before the twentieth (20th) day of the following month.
SECTION 5: Section 35 -155.1 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35- 155.1. Bundling Taxable Items.
If any nontaxable charges are combined with and not separately stated from taxable
service charges on the customer bill or invoice of a service supplier, the combined charge is
subject to tax unless the service supplier identifies, by reasonable and verifiable standards,
the portions of the combined charge that are nontaxable and taxable through the service
supplier's books and records kept in the regular course of business, and in accordance with
generally accepted accounting principles, and not created and maintained for tax purposes.
If the service supplier offers a combination of taxable and non - taxable services, and the
charges are separately stated, then for taxation purposes, the values assigned the taxable
and non - taxable services shall be based on its books and records kept in the regular course
of business and in accordance with generally accepted accounting principles, and not
created and maintained for tax purposes. The service supplier has the burden of proving
the proper valuation and apportionment of taxable and non - taxable charges.
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SECTION 6: Section 35 -155.2 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35- 155.2. Substantial Nexus /Minimum Contact.
For purposes of imposing a tax or establishing a duty to collect and remit a tax under
this article, "substantial nexus" and "minimum contacts" shall be construed broadly in favor
of the imposition, collection and /or remittance of the utility users' tax to the fullest extent
permitted by State and Federal law, and as it may change from time to time by judicial
interpretation or by statutory enactment. Any telecommunication service (including VoIP)
used by a person with a service address in the city, which service is capable of terminating a
call to another person on the general telephone network, shall be subject to a rebuttable
presumption that "substantial nexus /minimum contacts" exists for purposes of imposing a
tax, or establishing a duty to collect and remit a tax, under this article. A service supplier
shall be deemed to have sufficient activity in the city for tax collection and remittance
purposes if its activities include, but are not limited to, any of the following: maintains or has
within the city, directly or through an agent, affiliate, or subsidiary, a place of business of any
nature; solicits business in the city by employees, independent contractors, resellers, agents
or other representatives; solicits business in the city on a continuous, regular, seasonal or
systematic basis by means of advertising that is broadcast or relayed from a transmitter with
the city or distributed from a location with the city; or advertises in newspapers or other
periodicals printed and published within the city or through materials distributed in the city by
means other than the United States mail; or if there are activities performed in the city on
behalf of the service supplier that are significantly associated with the service supplier's
ability to establish and maintain a market in the city for the provision of utility services that
are subject to a tax under this article (e.g., an affiliated person engaging in activities in the
city that inure to the benefit of the service supplier in its development or maintenance of a
market for its services in the city).
SECTION 7: Section 35 -156.1 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35- 156.1. Reduction in Rate.
The Electricity Users Tax imposed under section 35 -156 shall be reduced from six (6)
percent to five and one half (5'/) percent.
SECTION 8: Section 35 -157.1 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35- 157.1. Reduction in Rate.
The Gas User Tax imposed under section 35 -157 shall be reduced from six (6) percent
to five and one half (51/2) percent.
SECTION 9: Section 35 -159.1 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
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Sec. 35- 159.1. Reduction in Rate.
The Water User Tax imposed under section 35 -159 shall be reduced from six (6) percent
to five and one half (51/2) percent.
SECTION 10: Section 35 -172 of the Santa Ana Municipal Code is hereby amended
such that it reads as follows:
Sec. 35 -172. RESERVED
SECTION 11: Section 35 -178 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35 -178. Effect of State and Federal Reference /Authorization.
Unless specifically provided otherwise, any reference to a State or Federal statute in
this article shall mean such statute as it may be amended from time to time, provided that
such reference to a statute herein shall not include any subsequent amendment thereto, or
to any subsequent change of interpretation thereto by a State or Federal agency or court of
law with the duty to interpret such law, to the extent that such amendment or change of
interpretation would require voter approval under California law, or to the extent that such
change would result in a tax decrease (as a result of excluding all or a part of a utility
service, or charge therefor, from taxation). Only to the extent voter approval would
otherwise be required or a tax decrease would result, the prior version of the statute (or
interpretation) shall remain applicable; for any application or situation that would not require
voter approval or result in a decrease of a tax, provisions of the amended statute (or new
interpretation) shall be applicable to the maximum possible extent.
To the extent that the city's authorization to collect or impose any tax imposed under
this article is expanded or limited as a result of changes in State or Federal law, no
amendment or modification of this article shall be required to conform the tax to those
changes, and the tax shall be imposed and collected to the full extent of the authorization up
to the full amount of the tax imposed under this article.
SECTION 12: Section 35 -179 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35 -179. No Increase in Tax Percentage or Change in Methodology Without Voter
Approval; Amendment or Repeal.
This article of the Santa Ana Municipal Code may be repealed or amended by the
city council without a vote of the People. However, as required by Chapter XIIIC of the
California Constitution, voter approval is required for any amendment provision that would
increase the rate of any tax levied pursuant to this article. The People of the City of Santa
Ana affirm that the following actions shall not constitute an increase of the rate of a tax:
(1) The restoration of the rate of the tax to a rate that is no higher than that set by
this article, if the city council has acted to reduce the rate of the tax;
(2) An administrative or legislative action that interprets or clarifies the methodology
of the tax, or any definition applicable to the tax, so long as such interpretation or
Resolution No. 2014 -XXX
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clarification (even if contrary to some prior interpretation or clarification) is not
inconsistent with the language of this article;
(3) The establishment a class of persons or class of service that is exempt or
excepted from the tax or the discontinuation of any such exemption or exception
(other than the discontinuation of an exemption or exception specifically set forth
in this article); or
(4) The collection of the tax imposed by this article, even if the city had, for some
period of time, failed to collect the tax.
SECTION 13: Section 35 -180 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35 -180. Remedies Cumulative.
All remedies and penalties prescribed by this article or which are available under any
other provision of law or equity, including but not limited to the California False Claims Act
(Government Code Section 12650 et seq.) and the California Unfair Practices Act (Business
and Professions Code Section 17070 et seq.), are cumulative. The use of one or more
remedies by the city shall not bar the use of any other remedy for the purpose of enforcing
the provisions of this article.
SECTION 14: Section 35 -181 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35 -181. Interaction with Prior Tax.
(a) Collection of Tax by Service Providers. Service providers shall begin to collect the
tax imposed by this amended article as soon as feasible after the effective date of
this article, but in no event later than permitted by Section 799 of the California
Public Utilities Code.
(b) Satisfaction of Tax Obligation by Service Users. Prior to April 1, 2015, any person
who pays the tax levied pursuant to this article, as it existed prior to its amendment
as provided herein, with respect to any charge for a service shall be deemed to have
satisfied his or her obligation to pay the tax levied pursuant to this article as
amended herein, with respect to that charge. The intent of this paragraph is to
prevent the imposition of multiple taxes upon a single utility charge during the
transition period from the prior Utility Users' Tax Code to the amended Utility Users'
Tax Ordinance (which transition period ends April 1, 2015) and to permit service
providers or other persons with an obligation to remit the tax hereunder, during that
transition period, to satisfy their collection obligations by collecting either tax.
(c) Satisfaction of Tax Obligation by Service Users Paying the Prior Maximum Utility
Users Tax. Prior to July 1, 2015, any person who pays the maximum tax amount
payable under the utility users tax pursuant to this article, as it existed prior to its
amendment as provided herein, shall be deemed to have satisfied his or her
Ordinance No. NS -XXX
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obligation to pay the tax levied pursuant to this article as amended herein for the
period of July 1, 2014 through June 30, 2015.
(d) In the event that a final court order should determine that the election enacting this
article (as amended herein) is invalid for whatever reason, or that any tax imposed
under this article (as amended herein) is invalid in whole or in part, then the taxes
imposed under this article, as it existed prior to its amendment as provided herein,
shall automatically continue to apply with respect to any service for which the tax
levied pursuant to this article has been determined to be invalid. Such automatic
continuation shall be effective beginning as of the first date of service (or billing date)
for which the tax imposed by this article is not valid. However, in the event of an
invalidation, any tax (other than a tax that is ordered refunded by the court or is
otherwise refunded by the city) paid by a person with respect to a service and
calculated pursuant to this article (as amended herein) shall be deemed to satisfy the
tax imposed under this article, as it existed prior to its amendment as provided herein,
on that service, so long as the tax is paid with respect to a service provided no later
than six months subsequent to the date on which the final court order is published.
SECTION 15: Section 35 -182 of the Santa Ana Municipal Code is hereby added such
that it reads as follows:
Sec. 35 -182. Ratification of Prior Tax.
The voters of the City of Santa Ana hereby ratify and approve the past collection of
the Utility Users Tax as imposed by Chapter 35, Article VI, of the Santa Ana Municipal Code
as it existed prior to the effective date of this Ordinance.
SECTION 16: Section 35 -183 to 35 -199 of the Santa Ana Municipal Code is hereby
amended such that it reads as follows:
Secs. 35- 183 -35 -199. Reserved.
SECTION 17: If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining portions of this
ordinance. The People of the City of Santa Ana hereby declare that they would have adopted
this ordinance and each section, subsection, sentence, clause, phrase or portion thereof
irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases,
or portions be declared invalid or unconstitutional.
SECTION 18: Neither the adoption of this ordinance nor the repeal hereby of any
ordinance shall in any manner affect the prosecution for violation of ordinances, which violations
were committed prior to the effective date hereof, nor be construed as affecting any of the
provisions of such ordinance relating to the collection of any tax or penalty or the penal
provision applicable to any violation thereof, nor to affect the validity of any bond or cash deposit
in lieu thereof, required to be posted, filed or deposited pursuant to any ordinance and all rights
and obligations thereunder appertaining shall continue in full force and effect.
Resolution No. 2014 -XXX
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SECTION 19: Upon the approval by the majority of the voters of the City of Santa Ana
at the November 4, 2014 general election, service providers shall begin to collect the tax
imposed by this amended article as soon as feasible after the effective date, but in no event
later than permitted by Section 799 of the California Public Utilities Code.
AYES:
ADOPTED this day of
Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
2014.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
M
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Jose Sandoval
Chief Assistant City Attorney
Ordinance No. NS -XXX
Page 11 of 11
GUIDELINES FOR ARGUMENTS
50A -30
TIME LIMIT TO SUBMIT BALLOT ARGUMENTS
(California Elections Code §9280 -9287)
PLEASE TAKE NOTICE that Arguments with respect to the following ballot measure will
be received according to the following procedures:
1. The City Council or any member(s) of the Council authorized by the City Council, or bona
fide association of citizens, or any individual voter who is eligible to vote on the Measure,
or any combination of voters and associations, may file a written argument for or against
the measure on the ballot. No argument shall exceed 300 words in length.
2. A ballot argument shall not be accepted unless accompanied by the name(s) of the
person(s) submitting it, or, if submitted on behalf of an organization, the name of the
organization and the name of at least one of its principal officers.
3. No more than five authors may sign any argument. If an argument is signed by more
than five individuals, the names of only the first five persons signing, determined by the
order in which their signatures appear, shall be printed on the argument appearing in the
Voter Information Pamphlet.
4. The Clerk of the Council shall cause an argument for and an argument against the
measure, if submitted, to be printed and shall transmit the arguments to the qualified
electors in addition to any necessary ballot materials. Arguments for and against the
measure shall be submitted to the Office of the Clerk of the Council, 20 Civic Center
Plaza, Santa Ana, California 92701, not later than 14 days after City Council calls for the
Election.
5. Arguments may be changed or withdrawn by their authors by specified date.
6. Printed arguments submitted to the voters shall be titled either "Argument In Favor of
Measure_" or "Argument Against Measure_ ", accordingly. The blank space will be
assigned a number or letter by the Orange County Registrar of Voters. Words used in
the title shall not be counted when determining the length of the argument.
7. If more than one argument for or more than one argument against the ballot measure is
submitted to the Clerk of the Council within the time prescribed above, the Clerk of the
Council shall select one of the arguments for printing and distribution to voters. In such
selection, preference and priority shall be given as follows: 1) member(s), of the
legislative body authorized by that body, 2) bona fide associations of citizens, and, 3)
individual voters who are eligible to vote on the measure. If more than one argument for
a measure is received from individuals or groups with the same preference and priority,
the first argument submitted to the Clerk of the Council will be selected if no other
arguments from an individual or group with a higher priority are received.
8. At the time of filing an argument, a certificate is also required that states that the facts
contained in the argument are true and correct. The certificate must be signed by each
author of the argument. (A certificate form is available from the Clerk of the Council)
50A -31
Copies of arguments for and against the measure shall be open for public examination at
the Clerk of the Council Office, 20 Civic Center Plaza, Santa Ana, California, 92701
during normal business hours (Monday through Thursday and alternating Fridays, 8:00
A.M. to 5:00 P.M.) during the Public Review Period. Any individual may obtain a copy of
such materials for use outside of said office. A fee, not to exceed the actual costs
incurred in providing such copies, will be charged at the time of provision of such copies.
10. Questions concerning this notice shall be directed to the Clerk of the Council, City of
Santa Ana, telephone number (714)647 -6520.
11. Copies of the text of the Measure to be submitted to the voters of the city of Santa Ana
may be obtained from the Clerk of the Council, telephone number (714) 647 -6520.
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