CC RES 2014-070 RESOLUTION NO. 2014-70
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES APPROVING A PROCESS FOR REFUNDING UTILITY USER TAX THAT
WAS COLLECTED BY TELECOMMUNICATION PROVIDERS FROM THE CITY'S
TAXPAYERS BETWEEN AUGUST 13, 2013 AND DECEMBER 31, 2014 AND
DIRECTING THAT CLAIMS FOR REFUNDS BE ADMINISTERED AND PAID
PURSUANT TO THAT PROCESS.
WHEREAS, in 1993, the City Council adopted the City's Utility Users Tax ("Tax" or
"UUT"). The amount of the Tax is 3%. It is imposed on City residents who use telephone
service, electricity, co-generated electricity, natural gas, and water; and
WHEREAS, subsequently, the voters of the State of California adopted Proposition
62 and Proposition 218; and
WHEREAS, the City Council placed the Tax on the ballot, and the voters ratified
the existing Tax at the same 3% rate; and
WHEREAS, the City's Tax originally was imposed upon all telephone services that
were subject to the Federal Excise Tax ("FET"). In response to litigation, in 2006, the
Internal Revenue Service issued a ruling stating that the FET does not apply to most
common telephone billing plans; and
WHEREAS, in response to these events, some cities, including Rancho Palos
Verdes, amended their ordinances without voter approval to delete the reference to the
FET and replaced it with other terms to cover telephone services that had been subject
to the FET. Other cities placed their UUT measures on the ballot, and some cities took
no action. Subsequent litigation has claimed that changes to UUT (such as the one made
by the City in 2006) also require voter approval; and
WHEREAS, recently, new legal challenges and claims have been filed against
other cities that did not place their amended utility user taxes on the ballot. Attorneys in
those cases have claimed damages and substantial attorney's fees; and
WHEREAS, on August 19, 2014, the City Council directed Staff to notify the
entities that provide telecommunications services to City residents and businesses to
cease collecting the UUT on behalf of the City until such time as revisions to the City's
Utility User Tax are approved by a majority of the City's voters; the City Council further
directed Staff to establish a separate account commitment encumbrance of the City's
General Fund, which shall be referred to as the "Utility User Tax Telecommunication
Claim Account" or "UUT Claim Account," and to place within that account the estimated
amount of the total Utility User Tax collected by telecommunication providers from
taxpayers in the City and remitted to the City during the twelve (12) month period
beginning August 13, 2013, along with all Utility User Tax received from
telecommunication providers after August 19, 2014, through December 31, 2014; and
WHEREAS, on October 21, 2014, a process for presenting and paying claims for
refunds of UUT was presented to the City Council;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, RESOLVE AND ORDER AS FOLLOWS:
SECTION 1. The following process for administering claims for refunds of UUT on
telecommunications services, which shall be administered by a claims administrator that
will be selected by the City Council, for UUT that was paid and collected during the period
from August 13, 2013 through December 31, 2014, is hereby approved:
Mailed notices shall be sent to every address in the City. In addition, notices shall be
published in both the Palos Verdes Peninsula News and the Daily Breeze and on the
City's website. Claims may be submitted by mail or electronically within six months of the
date of the notice. A City taxpayer may submit a claim for a refund for each
telecommunications account pursuant to any one of the following three options:
1. Submit a claim form provided by the City either electronically or by mail, including
the telecommunications provider(s), account number(s), and a signature releasing
the City from any further claims and costs related to the payment of utility user tax
on telecommunications services. A flat-rate refund of$25 would be issued for each
landline account and wireless account, as applicable.
If a resident or business has paid more than $25 for a telecommunications account during
the claim period and wishes to seek a refund for the higher amount, instead of using
option 1 above, the taxpayer may submit a claim for the account pursuant to one of the
two following options:
2. Submit a claim form provided by the City either electronically or by mail, including
the telecommunications provider(s), account number(s), and a signature releasing
the City from any further claims and costs related to the payment of utility user tax
on telecommunications services, along with a copy of a single bill for each
telecommunications account (note: a single account may include service for
multiple telephone numbers). The UUT listed on the single bill would be multiplied
by 17 months to establish the refund amount.
3. Submit a claim form provided by the City either electronically or by mail, including
the telecommunications provider(s), account number(s), and a signature releasing
the City from any further claims and costs related to the payment of utility user tax
on telecommunications services, along with full documentation of
telecommunications service for each telecommunications account for all of the
months of the claim period to obtain a refund equal to the actual amount of
telecommunications UUT paid during the period covered by the Claim Account.
Resolution No.2014-70
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SECTION 2. Staff is hereby directed to cause claims to be processed and refunds
to be paid pursuant to the process set forth above.
PASSED, APPROVED and ADOPTED this 21st day of October 2014.
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ATTEST:
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )ss
CITY OF RANCHO PALOS VERDES )
I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2014-70 was duly and regularly passed and adopted by the said
City Council at a regular meeting held on October 21, 2014.
• Clerk
Resolution No.2014-70
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