HomeMy WebLinkAbout2014-016 - Calling for the Placement of a General Tax MeasureRESOLUTION NO. 2014 -016
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 -016
Page 1 of 5
WHEREAS, several lawsuits have been filed in other jurisdictions challenging the
application of the UUT 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 -016
Page 2 of 5
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 tax for telephone, electricity, gas and water services from six
(6) percent to five and one -half (5 1/2) percent be adopted ?"
YES 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 -016
Page 3 of 5
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 15th day of April, 2014.
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By
se Sandoval,
ief Assistant ity Attorney
AYES: Councilmembers: Amezcua, Benavides, Martinez, Pulido, Reyna,
Sarmiento Tinaiero U
NOES: Councilmembers:
ABSTAIN: Councilmembers: None U
NOT PRESENT: Councilmembers: None (0)
Resolution No. 2014 -016
Page 4 of 5
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 -016 to be the original resolution adopted by the City
Council of the City of Santa Ana on April 15, 2014.
Date: ! %l3f w/y
Maria D. Huizar,
Clerk of the Council
Resolution No. 2014 -016
Page 5 of 5
PROPOSED ORDINANCE FOR VOTER CONSIDERATION
AT THE NOVEMBER 4, 2014 GENERAL MUNICIPAL ELECTION
ORDINANCE
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' /z %
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:
(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;
(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).
(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 VolP 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:
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) "VoIP (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 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, VoIP, 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.
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'/2) 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 (5'/z) percent.
SECTION 9: Section 35 -159.1 of the Santa Ana Municipal Code is hereby added
such that it reads as follows:
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 (5' /z) 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 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 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.
SECTION 1.9: —Upon the approval-by the majority of the voters of the C-ity -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.
ADOPTED this day of 2014.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
Jose Sandoval
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers