League of Women Voters of California Education Fund
	Butte County, CA November 6, 2012 Election
	Measure J Ordinance to amend the City's Telephone User's Tax City of Chico Majority Approval Required Fail: 14257 / 46.38% Yes votes ...... 16481 / 53.62% No votes See Also: Index of all Measures

Arguments For Measure J

Arguments Against Measure J

We recommend approval of Measure to protect existing revenue to continue vital services for the residents of the City of Chico. The City of Chico is at risk of losing $900,000 each year if voters do not approve Measure to modernize the language of its current Users Utility Tax (UUT) ordinance. This would represent a significant reduction in General Fund revenue. The primary purpose of amending the telephone users' tax is to protect existing revenue for the General Fund. A loss of $900,000 a year would result in reduced police and fire services, road maintenance and park funds. In recent years, there have been significant changes in both technology and billing practices. The use of wireless services and voice over internet protocol has become widespread, billing for local and long distance services is frequently bundled, and long distance calls are not always billed based on time and distance, even for land lines. To protect against the risk of losing tax revenues in the face of legal issues, approval of Measure will modernize this existing tax to ensure that all users of communication services are treated the same, regardless of the type of technology they are using or billing practices employed by their providers. This proposed amendment includes a slight rate reduction, from 5% to 4.5%. This rate, if applied to the average cell phone bill of $50 per month, would equate to a monthly charge of $2.25 as opposed to the current charge of $2.50. Vote yes for Measure and protect existing police, fire, roads and parks in the City of Chico. s/ Ann Schwab, Mayor s/ Jim Walker, Vice Mayor s/ Mary Goloff, Council Member s/ Andy Holcombe, Council Member s/ Scott Gruendl, Council Member FOR INFORMATION PLEASE CONTACT: Ann Schwab 555 Vallombrosa Ave, Chico, CA 95926 Phone: 530-518-7383 Email: friendsofannschwab@yahoo.com Rebuttal to Arguments For Vote NO for a cell phone tax. Vote NO for a new tax on all other forms of electronic communications services. Vote NO on Measure. The city already collects many millions of dollars in taxes on basic life necessities such as water, natural gas and electricity. Now the city bureaucrats want to perfect their tax on cell phone services and create a new tax on all other forms electronic communication services. Vote NO. The businesses, and the men, women and children ofChico already spend over $18 million per year for cellular phone services, and the city bureaucrats want a 4,5% city tax on those services? Vote NO. Vote NO on Measure ____. s/ Mark Sorensen, Council Member, Business Owner s/ Robert W. Evans, Council Member s/ Andrew Coolidge, Council Candidate/Business Owner FOR INFORMATION PLEASE CONTACT: Mark Sorensen 1789 Manzanita, Chico, 95928 Phone: 530-588-0020 Email: mark@marksorensen.net

Vote NO for more taxation, vote NO on Measure The bloated Chico bureaucracy already extracts over $6.5 million per year from its struggling businesses and citizens by taxing basic life necessities such as water, electricity, natural gas and traditional telephone services, and now the Chico bureaucracy wants to expand that tax to apply to cellular phone services and every form of electronic communication service existing now, and those yet to be invented. The sales pitch of a supposed reduction in tax rate (only on telephone services) diverts your attention from the goal of expanding the tax to new communications services, and the resultant tax revenue increases. Taxing life's basic necessities must stop. These regressive taxes disproportionately harm lower income families at a time when they already struggle to pay for ever increasing service costs. Chico City Taxes on water, electricity, natural gas and phone services are bleeding Chico's citizens and businesses dry. It is time to say no more. Chico is at a competitive business disadvantage to other communities. City government must tighten its belt by cutting back on nonessential programs and services. Do not be fooled, Measure ____would expand the Utility Tax to cell phone services and all other forms of electronic communications. We just cannot afford it. Vote no on Measure ____ s/ Mark Sorensen, Council Member s/ Robert W. Evans FOR INFORMATION PLEASE CONTACT: Mark Sorensen 1789 Manzanita Ave, Chico 95926 Phone: 530-588-0020 Email: mark@marksorensen.net Rebuttal to Arguments Against Measure is the right thing to do to keep Chico solvent. The measure merely modernizes an existing tax to maintain current revenues that directly support public safety and roads. Technology has changed so the way that it is taxed must change just to maintain existing revenue. Utility User Tax funding has decreased since cell phone couriers have stopped collecting the tax because our code is out dated. Fiscal crises are best avoided through a mix of cuts and revenue. The City Council has implemented cuts, including twenty percent less city staff, elimination of formula pay raise schemes, and employees have reduced salaries and benefits, just to name a few. Compared to the past, the city's budgets are a third smaller yet balanced. Measure ____ opponents cannot point to many examples of waste. Measure ____ is cost neutral because existing revenue levels can be maintained with a lower tax rate. This is helpful to taxpayers and helps the city deal with difficult economic times. There is absolutely nothing deceitful about the measure as the opponents argue. If we eliminate the tax as the opponents suggest then there will be less police and fire protection, as well as worse road conditions. Is that really worth saving about $30 a year? Don't be misled, there is a reason why Chico has remained solvent during a time of municipal bankruptcies. Measure ____ is your chance to help. Keep our community healthy and vibrant, vote YES on Measure ___. s/ Scott Gruendl, Council Member s/ Ann Schwab, Mayor s/ Jim Walker, Vice Mayor s/ Andy Holcombe, Council Member FOR INFORMATION PLEASE CONTACT: Scott Gruendl 2368 England St., Chico, 95928 Phone: 624-0456 Email: scott_gruendl@yahoo.com

Full Text of Measure J

RESOLUTION NO. 29-12 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHICO CALLING A GENERAL MUNICIPAL ELECTION ON TUESDAY, NOVEMBER 6, 2012, TO CONSIDER AN ORDINANCE TO MODERNIZE THE CITY'S TELEPHONE USERS' TAX WHEREAS, residents of the City of Chico currently pay a telephone users' tax (UUT); and WHEREAS, the City uses the revenue from this tax to provide important and essential public services; and WHEREAS, communications technology has advanced significantly over the years since the UUT was imposed, and the City must update its UUT ordinance to match current technology, including definitions for new communications technologies, to ensure all taxpayers are treated alike regardless of the type of telecommunications technology that they choose to use; and WHEREAS, the amendments would provide for a reduction in the tax rate from 5% to 4.5%, provide technical changes that reflect the changes in technology and billing practices that have occurred in the provision of telephone and telecommunications services: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CHICO AS FOLLOWS: 1. Pursuant to Section 500 of the City Charter and Elections Code § 9222 a general municipal election is hereby called to be held on November 6, 2012, to submit to the voters a proposed amendment to the Chico Municipal Code as set forth below: Measure A Shall an ordinance be adopted to amend the City's Telephone User's Tax in order to: 1) reduce the tax rate from 5% to 4.5%; 2) modernize the definition of telephone communication services subject to the tax to include new technologies such as wireless and voice over interne services; 3) apply the tax to all telephone communications services regardless of the type of technology used; and 4) reflect changes to federal and state law? Yes [ ] No [ ] 2. The text of the proposed amendment is set forth in the Ordinance attached hereto as Exhibit "A" 3. Pursuant to Elections Code § 10403, the Board of Supervisors of the County of Butte is requested to order consolidation of this general municipal election with the statewide election called for November 6, 2012, in all precincts within the City of Chico. 4. Pursuant to Elections Code § 10002, the Board of Supervisors of the County of Butte is requested to authorize the County Clerk to cause all necessary ballots to be printed, prepare and distribute all sample ballot pamphlets and all absentee ballots, appoint all necessary election officials, make arrangements for precinct polls, procure and furnish to election officials all necessary supplies and equipment, and perform all other acts required to conduct this election on behalf of the City of Chico. 5. Pursuant to Elections Code § 10411, the Board of Supervisors of the County of Butte is further requested and authorized to canvass the returns of the election. 6. The City Clerk is directed to set a date for the submission of arguments for and against the measure, pursuant to the Elections Code, and to transmit a certified copy of this resolution to the Board of Supervisors and the County Clerk of the County of Butte. THE FOREGOING RESOLUTION WAS ADOPTED at a meeting of the City Council of the City of Chico held on May 15, 2012, by the following vote: AYES: Goloff, Holcombe, Walker, Schwab NOES: Evans, Sorenson ABSENT: Gruendl ABSTAIN: None ATTEST: s/ DEBORAH R. PRESSON, City Clerk APPROVED AS TO FORM: LORI J. BARKER, City Attorney I, DEBORAH R. PRESSON, City Clerk of the City of Chico, hereby certify that this is a true and correct copy of the document on file in the City Clerk's office. s/ DEBORAH R. PRESSON, MMC, City Clerk ORDINANCE NO. ORDINANCE OF THE CITY OF CHICO AMENDING CHAPTER 3.56 OF THE CHICO MUNICIPAL CODE REGARDING MODERNIZING THE APPLICATION OF THE TELEPHONE USER'S TAX BE IT ORDAINED by the People of the City of Chico as follows: Section 1. That section 3.56.010 of the Chico Municipal Code, entitled "Definitions," is amended to add a new subsection D to read as follows: D. 'Telephone communication services' shall mean and include the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between. or among points, whether or not such information is transmitted through interconnected service with the public switched network, whatever the technology used, whether such transmission, conveyance or routing occurs by wire, cable, fiber-optic, light wave, laser, microwave, radio wave (including, but not limited to, cellular service, commercial mobile service, personal communications service (PCS), specialized mobile radio (SMR), and other types of personal wireless service--see 47 USCA § 332(e)(7)(C)(i)----regardless of radio spectrum used), switching facilities, satellite or any other technology now existing or developed after the adoption of the ordinance codified in this chapter, and includes, without limitation, fiber optic, coaxial cable, and wireless. The term 'telephone communication 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 telecommunications services. 'Telephone communication services' include, but are not limited to, the following services regardless of the manner or basis on which such services are calculated or billed: central office and custom calling features (including but not limited to call waiting, call forwarding, caller identification and three-way calling), local number portability, text messaging, ancillary telecommunication services, prepaid and post-paid telecommunications services (including but not limited to prepaid calling cards); mobile telecommunications service; private telecommunication service; paging service; 800 service (or any other toll-free numbers designated by the Federal Communications Commission); and value-added non-voice data service. For purposes of this section, `private telecommunication service' means any dedicated telephone communications service that entities a user to exclusive or priority use of communications channels. `Telephone communication service' does not include: internet access services to the extent they are exempt from taxation under the Internet Tax Freedom Act, 47 U.S.C. 151 note; video programming services; and digital downloads, such as downloads of books, music, ringtones, games and similar digital products. Section 2, That section 3.56.010 of the Chico Municipal Code, entitled "Definitions," is amended to add a new subsection E., to read as follows: E. 'Ancillary telephone communication services' shall mean services that are associated with or incidental to the provision, use or enjoyment of telephone communication services including, but not limited to, the following: 1. Services that link two or more participants of an audio or video conference call, including the provision of a telephone number. 2. Services that separately state information pertaining to individual calls on a customer's billing statement. 3. Services that provide telephone number information, and/or address information. 4. Services offered in connection with one or more telephone communications services, which offer advanced calling features that allow customers to identify callers and to manage multiple calls and call connections. 5. Services that enable customers to store, send or receive recorded messages. Section 3. That section 3.56.030 of the Chico Municipal Code, entitled "Telephone users' tax," is amended to read as follows: 3.56.030 Telephone users' tax. A. There is hereby imposed a tax upon every person other than a telephone corporation who uses any international, interstate and/or intrastate telephone communication services in the City. Interstate calls shall include calls to and from the District of Columbia or any U.S. territory. The tax imposed by this section shall be at the rate of four and one-half percent (4.5%) of the charges made for such telephone communication services. The tax shall be collected from the service user by the telephone communication services supplier or its billing agent. To the extent allowed by federal and state law, the tax on telephone communication services is intended to, and does, apply to all charges within the city's tax jurisdiction, such as charges billed to a telephone account having a situ.s in the city as permitted by the Mobile Telecommunications Sourcing Act of 2000, 4 U.S.C. § 116 et seq. There are rebuttable presumptions that telephone communication services billed to a billing or service address in the city are used, in whole or in part, within the city's boundaries, and that such services are subject to taxation under this chapter. There is also a rebuttable presumption that telephone communication services sold within the city that are not billed to a billing address or provided to a primary physical location are used, in whole or in part, within the city's boundaries and that such services are subject to taxation under this chapter. B. The following shall be exempt from the tax imposed by this section: 1. 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; nor shall the term "telephone communication services" include land mobile services or maritime mobile services as defined in § 2.1 of Title 47 of the Code of Federal Regulations, as such section existed on October 1, 1967, 2. Telephones used by a telephone company in the conduct of its business pursuant to § 3.56.180 of this Code. 3. Low income persons as provided in § 3.56.200 of this Code. C. The tax on. telephone communication 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 finance director on or before the last day of the following month; and must be received by the finance director on or before that date. D. 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 telephone communication services. if a non-taxable service and a taxable service are billed together under a single charge, the entire charge shall be deemed taxable unless the service supplier identifies non-taxable charges by verifiable data reflected in its books and records that are kept in the regular course of business and consistently with generally accepted accounting principles. The service supplier has the burden of proving the proper apportionment of taxable and non-taxable charges, E. As used in this section, the term charges" shall not include charges for any type of service or equipment furnished by a service supplier subject to public utility regulation during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulation. F. To prevent actual multi-jurisdictional taxation of telephone communication services subject to tax under this section, any service user, upon proof to the finance director that the service user has previously paid. the same tax in another American jurisdiction on such telephone communication services, shall be allowed a credit against the tax imposed to the extent of the amount of such tax legally imposed in such other American jurisdiction; provided, however, the amountt of credit shall not exceed the tax owed to the city under this section. G. The finance director may, from time to time, issue and disseminate to telephone communication service suppliers which are subject to the tax collection requirements of this chapter administrative determinations identifying those telephone communication services that are subject to the tax of subsection (A) above. The administrative determinations shall implement the intent of the city council that the telephone users' tax be imposed on any person who initiates or receives high-quality voice communications without regard to the type or kind of transmission media or technology that exists on the date the amendments to this section became effective or which may be developed in the future. Such administrative rulings shall be consistent with legal nexus and laws pertaining to telephone communications services and shall not impose a new tax, revise an existing tax methodology, or increase an existing tax, except as allowed by California Government Code § 53750(h)(2) and (h)(3) or other law. The finance director may consider state-wide interpretive rules and guidelines promulgated by any government agency or association of government agencies as a factor in determining the intent of voters adopting this section. To the extent that the finance director determines that the tax imposed under this section shall not be collected in full for any period of time, such an administrative determination falls within the finance director's discretion to settle disputes. The finance director's exercise of discretion. under this chapter does not constitute a change in taxing methodology for purposes of Government Code § 53750(h), and the city does not waive or abrogate its right to collect the telephone users' tax in full as a result of issuing such administrative determinations and may suspend such determination and recommence collection of the tax without additional voter approval. The administrative determination shall be consistent with and shall not impose a new tax or increase an existing tax without voter approval. H.1. For purposes of imposing a tax or establishing a duty to collect and remit a tax under this section, "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 that law may change from time to time. Any telephone communication service (including Vol?) 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" exists or "minimum contacts" exist for purposes of imposing a tax or establishing a duty to collect and remit a tax under this chapter. 2. A service supplier shall be deemed to have sufficient activity in the city to be obligated to collect and remit the tax imposed by this chapter if it does any of the following: maintains or has within the city, directly or through an agent 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 by means of advertising that is broadcast or relayed from a transmitter within the city or distributed from a location within 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. Section 4. That section 3.56.220 is added to Chico Municipal Code, entitled to read as follows: 3.56.220 Effect of state and federal authorization. To the extent that the city's authorization to impose or collect any tax imposed under this chapter is expanded or limited as a result of changes in state or federal law, no amendment or modification of this chapter shall be required to conform the tax to those changes, and the tax shall be imposed and collected. to the full extent of the city's authorization up to the full. amount of the tax imposed under this chapter, Section 5. Amendment of Ordinance. Chapter 3.56 of the Chico Municipal Code as amended by this Ordinance may be repealed or amended by the City Council without a vote of the people except as follows: as required by Proposition 218, any amendment to that chapter that increases the amount or rate of tax beyond the levels authorized by this Ordinance may not take effect unless approved by a vote of the people. The City Council may impose the taxes authorized by that chapter in any amount or rate which does not exceed the rate approved by the voters of the City. Section 6. Severability. If any section, sentence, clause, phrase, or portion of this Ordinance is held to be invalid or unenforceable by a court of competent jurisdiction for any reason, the remaining sections, sentences, clauses, phrases, or portions of this ordinance shall nonetheless remain in full force and effect. The People of the City of Chico hereby declare that they would have adopted each section, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable and, to that end, the provisions of this Ordinance are severable. Section 7. Majority Approval; Effective Date; Execution. This Ordinance shall be effective only if approved by a majority of the voters voting thereon and shall go into effect ten (10) days after the vote is declared by the City Council. The City Clerk is hereby authorized to attest to the adoption of this Ordinance where indicated below. I HEREBY ATTEST THAT THIS ORDINANCE WAS ADOPTED by the voters of the City of Chico in an election held for that purpose on ______________, 2012. ATTEST: Deborah R. Pressor, City Clerk APPROVED AS TO FORM: /s Lori J. Barker, City Attorney