Chapter 3.44
UTILITY USERS’ TAX

Sections:

3.44.010    Purpose and intent – Definitions.

3.44.020    Exemptions – Generally.

3.44.021    Exemptions – Senior citizens.

3.44.022    Repealed.

3.44.030    Telephone users’ tax – Imposition – Rate – Collection – Exemptions – Charges defined.

3.44.040    Electricity users’ tax – Imposition – Rate – Collection – Exemptions – Rebates.

3.44.050    Gas users’ tax – Imposition – Rate – Collection – Exemptions – Rebates.

3.44.060    Delinquent payments – Determination – Interest and penalties.

3.44.070    Actions to collect.

3.44.080    Duty to collect and remit – Billing procedure.

3.44.090    Administration and enforcement.

3.44.100    Assessment for taxes not remitted – Notice – Hearing – Exceptions.

3.44.110    Recordkeeping duty.

3.44.120    Refunds.

3.44.130    Disposition of revenues – Utilization.

3.44.140    Effective date – Billing procedure.

3.44.150    Establishment of rate – Public hearing requirements – Power to abate.

3.44.160    Violations deemed infractions.

3.44.010 Purpose and intent – Definitions.

A. In amending the utility users’ tax ordinance, it is the purpose and intent of the city council to achieve three major goals. First, it is necessary and desirable to generate for fiscal year 1978-79 a minor increase in revenue from the utility tax while retaining the program of basing the taxation on units of energy, used to benefit both business enterprises and smaller utility using taxpayers, to supplement the revenues derived from the distribution of the surplus by the state of California. Second, it is essential to provide an additional increase in the utility users’ tax in order to insure a reasonable level of revenue for the necessary operations of the city of Chula Vista in fiscal year 1979-80 and beyond, if no state surplus assistance is then available, and if there has been no governmental reorganization achieved which would provide necessary tax relief to local governments. Third, both the major commercial and industrial enterprises of the city utilizing energy and providing both productivity and employment, as well as the smaller utility using taxpayers, must be protected from increases in the tax brought about by the increases of rates granted by the Public Utilities Commission. These goals can best be accomplished by establishing an increase in the present factor to .00250 per kilowatt of electricity and .00919 per therm of gas for fiscal year 1978-79, and secondly, by establishing a second increase in said factors to .00300 per kilowatt of electricity and .01103 per therm of gas commencing on July 1, 1979, and establishing a five percent tax rate based upon gross receipts for fiscal year 1978-79, and six percent commencing on July 1, 1979, for telephone, and subjecting said tax rates to semi-annual adjustments after appropriate public hearings are conducted by the city council. In addition, the city council is authorized to waive all or a portion of the tax for major commercial and industrial enterprises as well as to provide a clear exemption for senior citizens in order to insure the most equitable application of the tax.

B. Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:

1. “Month” means a calendar month for purposes of the delivery of collected taxes by the utility companies to the city, and the billing period for the service user for the purpose of collection of tax by the utility companies from the service user.

2. “Person” means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation (except public utilities), estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.

3. “Public utility” as used herein has the same meanings as defined in Sections 218, 222 and 234, respectively, of the Public Utilities Code of the state of California, as said sections existed on September 1, 1970.

4. “Service user” means a person required to pay a tax imposed under the provisions of this chapter. (Ord. 2423 § 1, 1990; Ord. 2414 § 1, 1990; Ord. 1803 § 1, 1978; Ord. 1754 § 1, 1977; Ord. 1288 § 1, 1970; prior code § 30.501).

3.44.020 Exemptions – Generally.

Nothing in this chapter shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the state of California. (Ord. 1288 § 1, 1970; prior code § 30.502).

3.44.021 Exemptions – Senior citizens.

A. The tax imposed by this chapter shall not apply to any individual 62 years of age or older who uses telephone, electric and gas in or upon any premises occupied by such individual; provided, the combined gross income of all members of the household in which such individual resided was less than 50 percent of the median family income for the given household size for the calendar year prior to the fiscal year (July 1st through June 30th) for which the exemption provided in this chapter is applied. Said income statistics shall be as determined annually for San Diego Metropolitan Statistical Area by the federal Department of Housing and Urban Development (HUD).

The exemption granted by this section shall not eliminate the duty of the service suppliers from collecting taxes from such exempt individuals or the duty of such exempt individuals from paying such taxes to the service suppliers, unless an exemption is applied for by the service user and granted in accordance with the provisions of subsection (B) of this section.

B. Any service user exempt from the taxes imposed by this chapter because of the provisions of subsection (A) of this section may file an application with the director of finance for an exemption. Such an application shall be made upon forms supplied by the director of finance and shall recite facts verified by declaration under penalty of perjury which qualify the applicant for an exemption. The director of finance shall review all such applications and certify as exempt those applicants determined to qualify therefor and shall notify all service suppliers affected that such exemption has been approved, stating the name of the applicant, the address to which such exempt service is being supplied, the account number, if any, and such other information as may be necessary for the service supplier to remove the exempt service user from its tax billing procedure. The certification of such application for exemption shall be granted if the eligibility requirements of subsection (A) of this section are met, except that no exemption shall be granted to an applicant who is receiving service from a service supplier through a master meter, or who is sharing or prorating service with other service users, even though such service users qualify under the provisions of subsection (A) of this section; provided, however, that the person receiving service through a master meter or sharing or prorating service with other service users shall be eligible for a rebate of the utility users’ tax in the amount of $12.00 per year, or any larger amount, upon a showing of actual billing from the person having control of said master meter, to be paid at the beginning of each fiscal year for the preceding fiscal year, commencing on July 1, 1977. Such person seeking said rebate must file the application therefor on or before September 1st of each year to receive said rebate for the preceding fiscal year. It is further provided that said rebate may be prorated if the applicant has not resided in the same location for the full preceding fiscal year. No exemption shall be granted with respect to any tax imposed by this chapter which is or has been paid by a public agency or where the applicant receives funds from a public agency specifically for the payment of such tax.

Upon receipt of such notice, the service supplier shall not be required to continue to bill any further tax imposed by this chapter from such exempt service user until further notice by the director of finance is given. The service supplier shall eliminate such exempt service user from its tax billing procedure for bills dated on or after July 1, 1976 upon receipt of such notice from the director of finance prior to July 1, 1976, and thereafter, from bills dated no later than 60 days after receipt of such notice from the director of finance.

All exemptions shall continue and be renewed automatically by the director of finance so long as the prerequisite facts supporting the initial qualification for exemption continue; provided, however, that the exemption shall automatically terminate with any change in the service address or residence of the exempt individual; and further provided, that such individual may nevertheless apply for a new exemption with each change of address or residence. Any individual exempt from the tax shall notify the director of finance within 10 days of any change in fact or circumstance which might disqualify said individual from receiving such exemption. It shall be a misdemeanor for any person to knowingly receive the benefits of the exemptions provided by this section when the basis for such exemption either does not exist or ceases to exist.

Notwithstanding any of the provisions of this subsection, however, any service supplier who determines by any means that a new or nonexempt service user is receiving service through a meter or connection exempt by virtue of any exemption issued to a previous user or exempt user of the same meter or connection, such service supplier shall immediately notify the director of finance of such fact, and the director of finance shall conduct an investigation to ascertain whether or not the provisions of this section have been complied with and, where appropriate, order the service supplier to commence collecting the tax from the nonexempt service user. (Ord. 2547 § 1, 1993; Ord. 1717 § 1, 1976; Ord. 1690 § 1, 1976).

3.44.022 Maximum limitations.

Repealed by Ord. 1803 § 2, 1978. (Ord. 1754 § 1, 1977).

3.44.030 Telephone users’ tax – Imposition – Rate – Collection – Exemptions – Charges defined.

A. There is imposed a tax upon every person in the city using intrastate telephone communication services in the city. The tax imposed by this section shall be at the rate of five percent of the charges made for such services, and shall be paid by the person paying for such services. Effective on July 1, 1979, said rate shall be increased to six percent of the charges made for such services and shall be paid by the person paying for such service.

B. As used in this section, the term “charges” shall not include charges for services paid for by inserting coins in coin-operated telephones, except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due. The term “charges” shall not include charges for services paid for by users of mobile telephone and marine telephone service.

C. Notwithstanding the provisions of subsection (A) of this section, the tax imposed under this section shall not be imposed upon any person for using intrastate telephone communications services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Sections 4251, 4252 and 4253 of Title 26 of the United States Code (“federal excise tax”). In the event that the federal excise tax is repealed, this reference to such law, including any related federal regulations, private letter rulings, case law and other opinions interpreting these sections shall refer to that body of law that existed immediately prior to the effective date of such repeal.

D. The tax imposed in this section shall be collected from the service user by the person providing the intrastate telephone communications services. The amount of tax collected in one month shall be remitted to the city finance officer on or before the twentieth day of the following month. (Ord. 2816 § 1, 2000; Ord. 2423 § 1, 1990; Ord. 2414 § 2, 1990; Ord. 1803 § 1, 1978; Ord. 1690 § 1, 1976; Ord. 1288 § 1, 1970; prior code § 30.503).

3.44.040 Electricity users’ tax – Imposition – Rate – Collection – Exemptions – Rebates.

A. There is imposed a tax upon every person in the city using electrical energy in the city. The tax imposed by this section shall be at a rate established by the imposition of the factor of .00250 for each kilowatt of such energy used and shall be paid by the person paying for such energy. Effective on July 1, 1979, the tax imposed by this section shall be at a rate established by the imposition of the factor of .00300 for each kilowatt of such energy used and shall be paid by the person paying for such energy. “Charges” as used in this section shall include charges made for metered energy and minimum charges for service, including customer charges, service charges, service establishment charges, demand charges, standby charges, and annual and monthly charges.

B. As used in this section, the term “using electrical energy” shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him for use in an automobile or other machinery or device, apart from the premises upon which the energy was received; provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include the mere receiving of such energy by an electric public utility at a point within the city for resale.

C. There shall be excluded from such tax all electricity used by public utility in the conduct of its business.

D. The tax imposed in this section shall be collected from the service user by the person supplying such energy. The amount of tax, computed by application of the factors set forth hereinabove for each kilowatt of energy used each month, less the tax-exempt accounts and reduced by previous months’ uncollectible accounts upon which said tax was applied, shall be remitted to the city finance officer on or before the last day of the month following the close of the taxing period. It is understood that the amount of said uncollectible accounts or “bad debts” shall be determined on the basis of the current month’s bad debts, less collections of previously deducted bad debts.

E. The city shall assume full responsibility for rebates to any fully or partially exempted users after the utility company has collected and remitted said accounts in full to the city. (Ord. 2423 § 1, 1990; Ord. 2414 § 3, 1990; Ord. 1803 § 1, 1978; Ord. 1754 § 1, 1977; Ord. 1690 § 1, 1976; Ord. 1288 § 1, 1970; prior code § 30.504).

3.44.050 Gas users’ tax – Imposition – Rate – Collection – Exemptions – Rebates.

A. There is imposed a tax upon every person in the city using in said city gas which is delivered through mains or pipes. The tax imposed by this section shall be at a rate established by the imposition of the factor of .00919 for each therm of such energy used and shall be paid by the person paying for such energy. Effective on July 1, 1979, the tax imposed by this section shall be at a rate established by the imposition of the factor of .01103 for each therm of such energy used and shall be paid by the person paying for such energy. “Charges” as used in this section shall include charges for service, including customer charges, service charges, service establishment charges, demand charges, standby charges, and annual and monthly charges.

B. There shall be excluded from such tax all gas used by a public utility in the conduct of its business.

C. The tax imposed in this section shall be collected from the service user by the person selling the gas. The amount of tax, computed by application of the factors set forth hereinabove for therms of energy used each month, less the tax exempt accounts and reduced by previous months’ uncollectible accounts upon which said tax was applied, shall be remitted to the city finance officer on or before the last day of the month following the close of the taxing period. It is understood that the amount of said uncollectible accounts for bad debts shall be determined on the basis of the current month’s bad debts, less collections of previously deducted bad debts.

D. The city shall assume full responsibility for rebates to any fully or partially exempted users after the utility company has collected and remitted said accounts in full to the city. (Ord. 2423 § 1, 1990; Ord. 2414 § 4, 1990; Ord. 1803 § 1, 1978; Ord. 1754 § 1, 1977; Ord. 1690 § 1, 1976; Ord. 1288 § 1, 1970; prior code § 30.505).

3.44.060 Delinquent payments – Determination – Interest and penalties.

A. Taxes collected from a service user which are not remitted to the city finance officer on or before the due dates provided in this chapter are delinquent.

B. Interest and penalties for delinquency in remittance of any tax collected, or any deficiency determination, shall attach and be paid by the person required to collect and remit at the rates and in the same manner as is provided in this title for delinquency in payment of transient occupancy tax.

C. The city finance officer shall have power to impose additional penalties upon persons required to collect and remit taxes under the provisions of this chapter for fraud and negligence in reporting and remitting, in the same manner and at the same rates as are provided in this title for such penalties upon persons required to pay transient occupancy tax.

D. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax required to be remitted. (Ord. 1288 § 1, 1970; prior code § 30.507).

3.44.070 Actions to collect.

A. Any tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the city. Any such tax not paid by said service user to the person required to collect and remit, although the amount of such tax may have been remitted pursuant to the terms of this chapter, shall be deemed a debt owed by the service user to the city.

B. Any such tax collected from a service user which has not been remitted to the city finance officer shall be deemed a debt owed to the city by the person required to collect and remit.

C. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. (Ord. 1288 § 1, 1970; prior code § 30.508).

3.44.080 Duty to collect and remit – Billing procedure.

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

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

B. The duty to collect tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period. (Ord. 1288 § 1, 1970; prior code § 30.509).

3.44.090 Administration and enforcement.

The City Finance Officer shall have the power and duty, and is hereby directed, to enforce each and all of the provisions of this chapter. In administering and enforcing the provisions of this chapter, the City Finance Officer shall have the same powers and duties with respect to collecting provided herein as he has with respect to the collection of the transient occupancy tax, Chapter 3.40 CVMC. (Ord. 1288 § 1, 1970; prior code § 30.510).

3.44.100 Assessment for taxes not remitted – Notice – Hearing – Exceptions.

The City Finance Officer may make an assessment for taxes not remitted by a person required to remit for any reason. The manner of making and providing notice of such assessment, the right to a hearing and the conduct of such hearing, the preparation and service of findings, filing exceptions and passing upon exceptions shall be the same as provided in this title for transient occupancy tax. (Ord. 1288 § 1, 1970; prior code § 30.511).

3.44.110 Recordkeeping duty.

It is the duty of every person required to collect and remit to the City any tax imposed by this chapter to keep and preserve for a period of three years all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and remittance to the city finance officer, which records the City Finance Officer shall have the right to inspect at all reasonable times. (Ord. 1288 § 1, 1970; prior code § 30.512).

3.44.120 Refunds.

A. Whenever the amount of any tax has been overpaid, paid more than once, or has been erroneously or illegally collected or received by the Finance Director under this chapter, it may be refunded as provided in this section.

B. The Finance Director may refund any tax that has been overpaid, paid more than once or erroneously or illegally collected or received by the Finance Director under this chapter; provided, that no refund shall be paid under the provisions of this section unless the claimant or his or her guardian, conservator, executor or administrator has submitted a written claim, under penalty of perjury, to the Finance Director within one year of the overpayment or erroneous or illegal collection of said tax. Such claim must clearly establish claimant’s right to the refund by written records showing entitlement thereto. Nothing herein shall permit the filing of a refund claim on behalf of a class or group of taxpayers. Where the amount of any individual refund claim is in excess of the amount set by separate resolution of the City Council relating to the settlement of general liability claims against the City, City Council approval shall be required.

C. It is the intent of the City that the one-year written claim requirement of this section be given retroactive effect; provided, however, that any claims which arose prior to the enactment of the one-year claims period of this section, and which are not otherwise barred by a then-applicable statute of limitations or claims procedure, must be filed with the Finance Director as provided in this subsection within 90 days following the effective date of the ordinance codified in this section.

D. The City Manager, or his or her designee, or the City Council where the claim is in excess of $50,000, shall act upon the refund claim within 45 days of the initial receipt of the refund claim, or, if the claim is amended, within 45 days after the amended claim is presented. Said decision shall be final. If the City Manager/designee/City Council fails or refuses to act on a refund claim within the 45-day period, the claim shall be deemed to have been rejected by the City on the forty-fifth day. The Finance Director shall give notice of the action in a form that substantially complies with that set forth in Government Code Section 913.

E. The filing of a written claim pursuant to Government Code Section 935 is a prerequisite to any suit thereon. Any action brought against the City pursuant to this section shall be subject to the provisions of Government Code Sections 945.6 and 946.

F. Notwithstanding the notice provisions of this section, in the event that a service supplier remits a tax to the City in excess of the amount of tax imposed by this chapter, that supplier may claim credit for such overpayment against the amount of tax which is due upon any other monthly returns to the Finance Director, provided such credit is claimed in writing no later than one year from the date of the claimed overpayment. The Finance Director shall first determine the validity of the claim, and the underlying basis for the claim.

G. Notwithstanding the notice provisions of this section, a service supplier that has collected and remitted to the City any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user (whether due to overpayment or erroneous or illegal collection of said tax), may refund such amount to the service user, or credit to charges subsequently payable by the service user to the service supplier, and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns to the City, provided such credit is claimed in a return dated no later than one year from the date of overpayment or erroneous or illegal collection of said tax. The Finance Director shall first determine the validity of the service user’s claim of credit, and the underlying basis for such claim. (Ord. 3057 § 1, 2007; Ord. 1288 § 1, 1970; prior code § 30.513).

3.44.130 Disposition of revenues – Utilization.

All revenues collected by the City under this chapter and remaining after payment of the costs incurred in the administration of this chapter shall be deposited in the general fund and the council may, from time to time, by resolution, specifically designate the purpose for which these revenues may be utilized. (Ord. 1288 § 1, 1970; prior code § 30.514).

3.44.140 Effective date – Billing procedure.

The taxes for fiscal year 1978-79 imposed by this chapter shall become operative as of July 1, 1978; provided, however, that the utility companies shall compute and impose the utility users’ tax upon said users for the charges set forth in this chapter at the commencement of the billing period for said users arising from and after July 1, 1978 for services provided to said users in accordance with accepted billing practices of said utility companies, so that there will be no need to prorate said utility users’ tax. The tax imposed for fiscal years 1979-80 and beyond shall be operative as of July 1, 1979. (Ord. 1803 § 1, 1978; Ord. 1288 § 2, 1970).

3.44.150 Establishment of rate – Public hearing requirements – Power to abate.

Without affecting the maximum amount authorized by this chapter, the City Council sets the utility users’ tax rate at .00250 per kilowatt-hour of electricity, .00919 per therm of gas, and five percent for telephone based upon gross receipts. Any change to increase this amount to the maximum authorized or decrease it to any other amount shall be subject to the requirement for a public hearing before the City Council. (Ord. 2423 § 1, 1990; Ord. 2409 § 1, 1990; Ord. 2208 § 1, 1987; Ord. 1803 § 1, 1978; Ord. 1288 § 3, 1970).

3.44.160 Violations deemed infractions.

Any person who willfully attempts in any manner to avoid or defeat the tax imposed by this chapter or the payment of all or any part thereof, or any person required by this chapter to pay the tax, to make a return, to keep any records, or to supply any information who willfully fails to pay all or any part of such tax, make such return, keep such records, or supply such information at the time or times required by this chapter, shall be guilty of an infraction. (Ord. 1803 § 1, 1978).