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HomeMy WebLinkAbout1996-193 1 RESOLUTION NO. 96-193 2 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 3 BERNARDINO APPROVING AND IMPLEMENTING THE UTILITY USER TAX (UUT) ADMINISTRATIVE RULES. 4 WHEREAS, The City of San Bernardino's utility Users Tax (UUT) 5 Ordinance places a utility users tax on the use of certain utility 6 7 8 and collect the UUT tax from its customers, and remit the tax to services within the City of San Bernardino; and WHEREAS, the utility service provider is required to impose 9 10 11 12 13 14 15 16 17 18 19 20 21 the City; and WHEREAS, a number of utility service providers have raised concerns regarding their role as tax collector, associated liability, audits and third party auditors, and the need for uniformity in the application of the UUT ordinances among the many public agencies with such ordinances; and WHEREAS, the City of San Bernardino has met and conferred with other public agencies and utility industry representatives to develop administrative rules to address such concerns; NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common Council of the City of San Bernardino hereby adopt and implement the utility User Tax (UUT) Administrative Rules, attached hereto, 22 as Exhibit "A"; and further, that a copy of the utility User Tax 23 (UUT) Administrative Rules be distributed within thirty (30) days 24 hereof, to all utility service providers that conduct business with 25 the City of San Bernardino. 26 27 28 RES 96-193 RESOLUTION APPROVING AND IMPLEMENTING THE.UTILITY USER TAX (UUT) ADMINISTRATIVE RULES. 1 2 I HEREBY CERTIFY that the foregoing resolution was duly 3 adopted by the Mayor and Common Council of the City of San 4 5 Bernardino at a regular meeting thereof, held on the 1st July , 1996, by the following vote, to wit: day of 6 Councilmembers 7 ABSTAIN ABSENT AYES NAYS x x x x x x x NEGRETE 8 CURLIN 9 ARIAS 10 11 12 13 14 15 16 17 18 19 20 21 OBERHELMAN DEVLIN ANDERSON MILLER q~~d ~ city Clerk The foregoing resolution is hereby approved this !--M day of July , 1996. ~'~L ' . /it/ {J~ Tom M n r, Mayor City of San Bernardino Approved as to form and legal content: JAMES F. PENMAN 22 City AttPrney : By' rf- I 25 26 27 28 1 (;~"~1c-~ -2- I RES 96-193 ,96-193 g P.08 A'lTACIIIIBNT'r Ut~lity Users Tax Administrative RUles I. To assist utili ty service providers tha t perform the valuable public service of collecting the City's IJtility', Users Tax (UUT), City will cissume the fOllowing responsibilities: A. Prior to the implementation of a new OUT tax, City will assure the accuracy of its boundary information (including the reflection of the latest annexations and municipal reorganizations) needed for utility billing and tax collection purposes, by reviewing and correcting the utility service provider's computerized billing data no less than once a year. The utility service provider shall not be responsible or liable for the collection or payment of any past OUT taxes that were not collected due to the inaccuracy of information provided by the City or due to the City's failure to make appropriate corrections to the utility service provider's billing data. B. Provide utility service providers with aCCurate and timely ordinance information, including ordinance amendments, at a central location (e.g., Web Page on Internet). City will provide written notice of ordinance changes to persons designated by the utility service provider. In the absence of special circumstances, the utility service provider shall begin implementation of the UUT tax change within sixty (60) days from the date on which the utility service provider receives the written notification from the City. If the 60th day is not the first day of a month, then the utility service provider shall implement the changes on the first day of the month following the month in which the 60th day OCCurs. To "begin implementation" means to calculate and place the UUT tax in the customer billing. C. Assume sole responsibility for defending any legal challenge regarding the validity of the OUT ordinance, any part thereof, or any collection thereunder, and shall defend and hold harmless any tax collecting agent named in such action for properly performing its legal obligations set out in the UUT ordinance. 1 RES 96-193 P.09 D. Reimburse utility service providers for the reasonable costs associated with an extraordinary audit request (e.g., modifications to existing to billing software in order to respond to audit request). " E. Take reasonable steps to assure that all utility service providers, including new market entrants, are correctly applying and collecting the UUT tax. F. To the extent feasible, permit utility service providers to follow the same payment and remittance protocol for UUT collections that is generally employed by other California public agencies, provided that such protocol is agreed to and reflected in these administrative rules by the Tax Administrator. For example: . "The amount of tax collected in one month shall be remitted by U.S. Mail, to the Tax Administrator, and must be received by the Tax Administrator on or before the 20th day of the fOllowing month; or, at the option of the person required to collect or remit the tax, such person shall remit an estimated amount of tax measured by the tax billed in the previous month or upon the payment pattern of the customer(s) of the service supplier, which must be received by the Tax Administrator on or before the 20th day of the following month.H G. FOllowing the effective date of these administrative rules, the Tax Administrator shall notify the utility service providers within the City that they may request that the Tax Administrator lIr . render a determination of the application of the UUT tax to their various existing services. If such request is made within ninety (90) days of the notice, then any determination by the Tax Administrator shall apply prospectively. The Tax Administrator shall give the utility service provider at least a 60 (sixty) day written notice fOllowing the determination of tax application before implementation of such changes shall be required. If the 60th day is not the first day of a month, then the utility service provider shall implement the changes on the first day of the month following the 2 RES 96-19? P.lO month in which the 60th day occurs. To implementation" means to calculate and in the customer billing. "begin place the UUT tax H. Where new utility technologies are employed or new utility services are being offered, a utility service provider may request that the Tax Administrator ........ -~ render a determination of applicability within ninety (90) days of providing such services or technologies. Upon rendering a determination of applicability, the Tax Administrator shall seek prospective application of the UUT tax ordinance to such technologies or services. The Tax Administrator shall give the utility service provider at least a 60 (sixty) day written notice before implementation of such changes shall be required.. If the 60th day is not the first day of a month, then the utility service provider shall implement the changes on the first day of the month following the month in which the 60th day OCcurs. To "begin implementation" means to calculate and place the UUT tax in the customer billing. I. Regarding Para raphs G. and H. above, the Tax Administrator agree to participate in an advisory committee, comprised of representatives of public agencies with OUT ordinances, to develop and recommend to such public agencies (after meeting and conferring with utility representatives); uniform applications of the UUT tax to various utility services and technologies; uniform implementation protocols; and appropriate amendments to OUT ordinances to reflect industry, regulatory, and technological changes. II. The Tax Administrator has the right and obligation to assure fair and reasonable compliance with the UUT ordinance. Due to the complexity of utility services, technologies, and tax administration, the Tax Administrator may require special outside expertise to assist in performing compliance review of the UUT ordinance. Utili ty service providers have a legitimate interest in assuring that such outside firms maintain the confidenticility of utility customer information and conduct their compliance reviews in a professional and efficient manner. The Tax 3 _~" nL ln~ P.ll Administrator's use of special outside expertise shall therefore be subject to the following rules: , A. The outside firm will execute a non-disclosure . agreement (approved by the City Attorney) in whioh the outside firm agrees to maintain the oonfidentiality of oustomer information and not to use individual customer information for any purpose other than the OUT compliance review of this City. B. The outside firm will not initiate contact with a utility customer in the course of performing its compliance activities, except with the prior written consent of the utility service provider. C. The outside fi~m shall fully disclose to the City any potential conflict of interest (e.g., prior or proposed representation of private utility customers within the City) . D. The outside firm shall not make any data requests of a utility service provider by subpoena unless the outside firm first receives the review and approval of Tax Administrator prior to the request being made to the utility service provider. E. The outside firm is authorized to perform a compliance review (including sampling audits and computerized reviews) which, in its professional opinion, is reasonably necessary to perform its contractual obligation to the City. If a utility service provider refuses to cooperate in connection with such compliance review, the outside firm shall immediately advise the Tax Administrator so that the Tax Administrator may take appropriate remedial steps. F. The outside firm will use its best efforts to accurately identify all errors, whether such corrections are in favor of the customer, the City, another public agency, or the utility service provider. G. The Tax Administrator shall make available to the utility service provider a copy of any draft compliance 4 RES 96-193 ., P.12 report prepared by the outside firm regarding S~crr ~ utility service provider. The utility service prqvider Shall be afforded an opportunity (at least thirty (30) days) to respond to any aspect of the draft report " before such report becomes final. III. Dispute Resolution Process A. If a utility disputes an application of these administrative rules, an interpretation of the OUT ordinance, or any other action by the Tax Administrator (includinq its outside firm), the protesting utility may request to the Tax Administrator that the matter be submitted to nonbinding arbitration within thirty (30) days. If the matt~r is not resolved within thirty (30) days following the arbitration decision, the p'rotesting utility may request that the matter be set for a de novo hearing before the City Council at the next available City Council meeting. 5 ---_. - .- RES 96-193 Description of Administrative Rules ATTACHMENT B Section I. A. This provision places the burden on the city to assure that the billing information (customer addresses) of the various utilities is accurate so customers within the City pay the tax and customers outside of the City do not pay the City's tax. The City's current auditor, Municipal Resource Consultant, performs this valuable service at no cost to the utility, and at no increased cost to the City. This provision does not provide retroactive immunity for past errors, which may only be authorized by the City Council on a individual basis depending the extent and cause of the errors. Section I. B. This provision places the burden on the City to provide the utility tax collectors with accurate information regarding its UUT ordinance, including future amendments. Municipal Resource Consultant has agreed to performs this service at no increased cost to the City by placing the City's ordinance in a data base on its Internet Web site. Section I. C. Under this section, the utility collector would not assume any responsibility for legal challenges to the City's UUT ordinance. State law is being proposed that will accomplish the same thing. . Section I. D. The City will reimburse the utility for the cost of responding to "extraordinary" audit requests, where, for example, software modifications become necessary. Section L E. The City will seek to assure UUT compliance by all utility providers including new market entrants. ' Section I. F, The Tax Administrator will attempt in good faith to following . payment and remittance protocols followed by other California public agencies. Section L G. This provision allows utility service providers to obtain "prospective" tax application by cooperatively meeting with the Tax Administrator and City Attorney and fully disclosing the various services provided by the utility. The Tax Administrator and City Attorney will then determine the appropriate application of the UUT ordinance to such services. Under Section I.I. , the Tax Administrator and City Attorney will participate with other public agencies to develop uniform application rules, to the extent feasible. . Section I. H. The provision establishes a similar incentive as Section I. G. for "prospective" application of the UUT ordinance to new services and technologies. Section L I. This section anticipates the creation of an advisory committee representing public agencies with UUT ordinances. It would make non-binding recommendations that are designed to achieve uniformity in UUT application and UUT administration. The advisory committee would also meet with utility representatives to develop industry-supported recommendations. The Tax Administrator and City Attorney would participate in such an advisory committee. Section II contains a series of provisions designed to address utility concerns regarding the City's use of a third party auditor/consultant such as Municipal Resource Consultants (MRC). Those concerns include confidentiality of customer information, conflict of interest, reasonableness of audit requests, scope of audit, and right to review draft audit report. MRC is willing to abide by these requirements. Section III is provides a mechanism (non-binding arbitration) for addressing disputes between the City and Tax Collector regarding the application of the administrative rules and the UUT ordinance. The City Council would have the ultimate authority for resolving such clisnntes. RES 96-193 Description of Administrative Rules ATTACHMENT B Section I. A. This provision places the burden on the city to assure that the billing information (customer addresses) of the various utilities is accurate so customers within the City pay the tax and customers outside of the City do not pay the City's tax. The City's current auditor, Municipal Resource Consultant, performs this valuable service at no cost to the utility, and at no increased cost to the City. This provision does not provide retroactive immunity for past errors, which may only be authorized by the City Council on a individual basis depending the extent and cause of the errors. Section I. B. This provision places the burden on the City to provide the utility tax collectors with accurate infonnation regarding its UUT ordinance, including future amendments. Municipal Resource Consultant has agreed to performs this service at no increased cost to the City by placing the City's ordinance in a data base on its Internet Web site. Section I. C. Under this section, the utility collector would not assume any responsibility for legal challenges to the City's UUT ordinance. State law is being proposed that will accomplish the same thing. . Section I. D. The City will reimburse the utility for the cost of responding to "extraordinary" audit requests, where, for example, software modifications become necessary. Section L E. The City will seek to assure UUT compliance by all utility providers, including new market entrants. Section I. F. The Tax Administrator will attempt in good faith to following payment and remittance protocols followed by other California public agencies. Section I. G. This provision allows utility service providers to obtain "prospective" tax application by cooperatively meeting with the Tax Administrator - . 1. - full _ and y disclosing the various services provided by the utility. The Tax Administrator ,~. _ ' will then determine the appropriate application of the UUT ordinance to such services. Under Section LI. , the Tax Administrator .-.-. will participate with other public agencies to develop uniform application rules, to the extent feasible. . Section I. H. The provision establishes a similar incentive as Section 1.G. for "prospective" application of the UUT ordinance to new services and technologies. Section I. I. This section anticipates the creation of an advisory committee representing public agencies with UUT ordinances. It would make non-binding recommendations that are designed to achieve uniformity in UUT application and UUT administration. The advisory committee would also meet with utility representatives to develop industry-supported recommendations. The Tax Administrator would participate in such an advisory committee. Section II contains a series of provisions designed to address utility concerns regarding the City's use ofa third party auditor/consultant such as Municipal Resource Consultants (MRC). Those concerns include confidentiality of customer information, conflict of interest, reasonableness of audit requests. scope of audit, and right to review draft audit report. MRC is willing to abide by these requirements. Section III is provides a mechanism (non-binding arbitration) for addressing disputes between the City and Tax Collector regarding the application of the administrative rules and the UUT ordinance. The City Council would have the ultimate authority for resolving such rlisnntes.