HomeMy WebLinkAbout2005-056 Natural Gas Utility Tax r r
ORDINANCE NO. 2005 -56
AN ORDINANCE relating to business regulations and utility taxes;
amending utility taxes on companies in the business of
selling or furnishing natural gas; and amending Chapter
5.50 of the City of Yakima Municipal Code, specifically
sections 5.50.020, .030, .050, .060, .065, .070, .080, .090, .095,
.100, .110, .120, .130, .140, .150, .160, .170, .180, and .190.
BE IT ORDAINED BY THE CITY OF YAKIMA.
SECTION 1 Chapter 5.50 of the Yakima Municipal Code is amended to read as
follows:
Chapter 5.50
OCCUPATION TAXES— UTILITIES
Sections:
5.50.010 Exercise of revenue power.
The provisions of this chapter shall be deemed an exercise of the
power of the city of Yakima to license for revenue.
5.50.020 Definitions.
In construing the provisions of this chapter, save when otherwise
plainly declared or clearly apparent from the context, the following
definitions shall be applied.
(a) "Gross ifiEemerevenue" means the value proceeding or accruing from
the sale of tangible property or service, and receipts (including all sums
earned or charged whether received or not) by reason of the investment
of capital in the business engaged in, including, but not limited to
rental, royalties, fees or other emoluments, however, designated
(excluding receipts or proceeds from the use or sale of real property or
any interest therein and proceeds from the sale of notes, bonds,
mortgages, or other evidences of indebtedness, or stock and the like) and
without any deduction on account of the cost of the property sold, the
cost of materials used, labor costs, interest or discount paid, or any
expense whatsoever, and without any deduction on account of losses.
(b) "Person or persons" means persons of either sex, firms,
copartnerships, corporations and other associations of natural persons,
whether acting by themselves or by servants, agents or employees.
(c) "Taxpayer" means any person liable to the license fee or tax imposed
by this chapter
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(d) "Tax year" or "taxable year" means the year commencing January 1st
and ending on the last day of December of the year, or in lieu thereof,
the taxpayer's fiscal year when the taxpayer files with the director of
finance and budget for the city of Yakima a statement indicating that the
taxpayer will pay according to the taxpayer's fiscal year as defined in
that statement.
5.50.030 License required.
No person shall engage in or carry on any business, occupation,
pursuit or privilege for which a license fee or tax is imposed by this
chapter without having first obtained, and being the holder of, a valid
and subsisting license se to do so, to be known as an occupation license
Any person engaging in, or carrying on, more than one such business,
occupation, pursuit or privilege shall pay the license tax so imposed
upon each of the same.
Any taxpayer who engages in, or carries on, any business subject to
tax hereunder without having his or her occupation license so to do shall
be guilty of a violation of this chapter for each day during which the
business is so engaged in or carried on, and any taxpayer who fails or
refuses to pay the license fee or tax or a part thereof on or before the due
dates shall be deemed to be operating without having his or her license
se to do so
5.50.040 License tax year.
All occupation licenses shall be for the tax year for which issued and
shall expire at the end of such tax year
5.50.050 Electric, telephone, gas and steam businesses.
A. There are levied and shall be collected annual license fees or luxes
against the persons on account of business activities, and in the amounts
to be determined by the application of the rates herein prescribed, as
follows:
1 Commencing October 1, 1994, upon every person engaged in or
carrying on the business of selling or furnishing electric light or power, a
fee or tax equal to six percent of the total gross erevenue derived
from such business in the city of Yakima.
2. Commencing July 1, 1989, upon every person engaged in carrying
on a telephone business, a fee or tax equal to six percent of the total
gross ineemerevenue derived from such business m the city of Yakima,
provided, that such fee or tax be subject to the limitations prescribed by
RCW 35.21 714, and provided, further, that the city shall suspend
collection of any franchise fee on a telephone business in excess of the
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rates of fees and taxes permitted under RCW 35.21.870(2), which rate is
six percent.
Total gross incemerevenue for this purpose shall not include charges
which are passed on to the subscribers by a telephone business pursuant
to tariffs required by regulatory order to compensate for the cost to the
telephone business of the tax imposed by the ordinance codified in this
section.
"Telephone business" as used herein means the business of providing
access to a local telephone network, local telephone network switching
service, toll service or coin telephone services, or providing telephonic,
video, data or similar communication or transmission for hire, via a local
telephone network, toll line or channel, or similar communication or
transmission system. It includes cooperative or farmer line telephone
companies or associations operating an exchange. "Telephone business"
does not include the providing of "competitive telephone service" as
defined herein below nor the providing of cable television service or
cellular telephone service.
"Competitive telephone service" as used herein means the providing
by any person of telephone equipment, apparatus, or service, other than
toll service, which is of a type which can be provided by persons that are
not subject to regulation as telephone companies under RCW Title 80
and for which a separate charge is made.
3 Commencing January 1, 1991November 17, 2005, upon every
person engaged in or carrying on the business of selling or furnishing
natural gas for heat, power, light and other purposes, a fee or tax equal
to feursix percent of the total gross i-nFemerevenue derived from such
business in the city of Yakima as explained in subsection E of 5.50.050
4. Commencing January 1, 1985, upon every person engaged in or
carrying on the business of selling or furnishing steam for heating or
other commercial consumption, a fee or tax equal to five and eight -
tenths percent of the total gross incemerevenue derived from such
business in the city of Yakima.
5 Commencing February 1, 1997, upon every person engaging in or
carrying on the cellular telephone service business, a fee or tax equal to
six percent of the total gross incemerevenue derived from conducting
such business within the city of Yakima, as indicated by billings and /or
charges to Yakima customers.
"Cellular telephone service" as used herein means a two -way voice
and data telephone /telecommunications system based in whole, or
substantially in part, on wireless radio communications, and which is
not subject to regulation by the Washington Utilities and Transportation
Commission (WUTC) This includes cellular mobile service. The
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definition of cellular mobile service includes other wireless radio
communications services such as specialized mobile radio (SMR),
personal communications services (PCS), and any other evolving
wireless radio communications technology that accomplishes a purpose
similar to cellular mobile service. "Cellular telephone service" as used
herein also means service provided by means of an electric device that
has the ability to send or receive voice or digital messages transmitted
through the local telephone network, via satellite, or any other form of
voice or data transmission.
B The minimum fee or tax on each such business activity shall not be
less than two hundred fifty dollars per tax year
C. Commencing October 1, 1994, the rates of tax set forth in
subsection A above shall be measured against a maximum of the first
four thousand dollars of the total gross ierevenue attributable to
selling or furnishing telephone services described in the definition of
"telephone business" contained herein, selling or furnishing natural gas,
selling or furnishing steam, or selling or furnishing cellular telephone
services described in the definition of "cellular telephone service"
contained herein to any one customer in any one calendar month or
fraction thereof
D Commencing October 1, 1994, the first four percent of the tax set
forth in subsection A above shall be measured against a maximum of the
first four thousand dollars of the total gross inee revenue attributable
to selling or furnishing electric light or power to any one customer in
any one calendar month or fraction thereof; two percent of the tax set
forth in subsection A above shall be measured against the total gross
ineen}erevenue attributable to selling or furnishing electric light or
power
E. Commencing November 17, 2005, the first four percent of the tax
set forth in subsection A above shall be measured against a maximum of
the first four thousand dollars of the total gross revenue attributable to
selling or furnishing natural gas to any one customer in any one
calendar month or fraction thereof; two percent of the tax set forth in
subsection A above shall be measured against the total gross revenue
attributable to selling or furnishing natural gas.
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5.50.060 Water businesses.
There is levied and shall be collected as an annual license fee or tax
against persons on account of business activities, in the amount to be
determined by application of the rates herein prescribed, as follows:
1 Commencing January 1, 1990, and effective until December 31,
1990, upon every person engaging in or carrying on the business of
selling or furnishing potable water, a fee or tax equal to six percent of
the total gross incemerevenue derived from such business in the city of
Yakima.
2. Commencing January 1, 1991, and effective until December 31,
1992, upon every person engaged in or carrying on the business of
selling or furnishing potable water, a fee or tax equal to twelve percent
of the total gross incemerevenue derived from such business in the city
of Yakima.
3 (a) Commencing January 1, 1993, and effective until December 31,
1993, upon every person engaged in or carrying on the business of
selling or furnishing potable water, a fee or tax equal to fourteen percent
of the total gross iiisemerevenue derived from such business in the city
of Yakima.
(b) Commencing January 1, 1994, and effective thereafter, upon every
person engaged in or carrying on the business of selling or furnishing
potable water, a fee or tax equal to fourteen percent of the total gross
inc-einerevenue derived from such business in the city of Yakima.
The city of Yakima shall not be subject to the license fee or tax
imposed by this section.
5.50.065 Cable Television business - Annual fee.
A. There shall be levied and shall be collected as an annual license
fee or tax against persons on account of business activities, in the amount
determined by application of the rates herein prescribed, as follows:
1 Commencing February 15, 1994 and effective until February' 28,
2005, upon every person engaging in the business of providing cable
television service a fee or tax equal to five percent of the total gross
emerevenue derived from such business in the city of Yakima.
2. Commencing March 1, 2005, and effective thereafter, upon every
person engaging in the business of providing cable television service a
fee or tax equal to six percent of the total gross ine-emerevenue derived
from such business in the city of Yakima.
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B For purposes of this provision, "cable television service" shall be
defined to mean.
1 A system providing service pursuant to a franchise issued by the
City under the Cable Communications Policy Act of 1984 (Public Law
No 98 -549, 47 U.S.C. 521 (Supp )) as it may be amended or superseded,
and
2. Any system that competes directly with such franchised system by
employing antennae, microwave, wires, wave - guides, coaxial cables, or
other conductors, equipment or facilities designed, construed or used for
the purpose of (i) collecting and amplifying local and distant broadcast
television signals and distributing and transmitting them, (ii)
transmitting original cablecast programming not received through
television broadcast signals, or (iii) transmitting television pictures, film
and video-tape programs not received through broadcast television
signals, whether or not encoded or processed to permit reception by
only selected receivers, provided, however, that "cable television
service" shall not include entities that are subject to charges as
"Commercial TV Stations" under 47 U.S.C. Section 158 or providers of
"direct -to -home satellite service" as defined m Section 602 of the
Telecommunications Act of 1996, Pub L. No 104 - 104,110 Stat. 56 (1996)
C. A system "competes directly" within the meaning of subsection B
of this section if it provides one or more functionally equivalent services
at competitive rates, terms and conditions.
5.50.070 Deductions
In computing the license fee or tax imposed by this chapter, there
shall be deducted from gross incennerevenue the amounts derived from
transactions in interstate or foreign commerce or from any business
which the city of Yakima is prohibited from taxing under the
constitutions of the United States or the state of Washington, and the tax
shall not apply to income derived by the taxpayer from the city of
Yakima.
5.50.080 Application for license.
On or before the first day of each tax year, every taxpayer shall apply
to the director of finance and budget for an occupation license upon
blanks or forms of return to be prepared and provided by him or her
requesting such information as may be necessary to enable him or her to
arrive at the lawful amount of the fee or tax. The taxpayer shall, in a
legible manner, write in such blank or form of return the information
required and shall sign the same and by affidavit at the foot thereof shall
swear or affirm that the information therein given is full and true and
that he knows the same to be so.
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Every such application or return shall be accompanied by a
remittance m the amount of the tax or fee or installment thereof required
by the provisions hereof
If the applicant be a partnership, the application or return must be
made by one of the partners, or, if a corporation, by one of the officers
thereof In the event that all the partners in a partnership or all the
officers of a corporation reside outside the city of Yakima, or in the event
the applicant is a nonresident individual, the application or return may
be made by an authorized resident ant or an authorized local manager of
such partnership, corporation or individual.
5.50.090 Payment
Every taxpayer shall pay the fee or tax in this chapter provided on or
before the twenty -fifth day of each and every month hereafter beginning
on February 25, 1962, on said total gross incemerevenue derived from
any such business activity during the next preceding calendar or related
billing month. Every taxpayer also shall file with the director of finance
and budget of the city at the time of paying its fee or tax, a return in the
form prepared by the director Such return shall include a schedule of all
revenue, taxable under this chapter and earned for the period payable
under this section, which schedule identifies, by total dollar amount and
number of accounts, gross in€emerevenue in one - thousand - dollar
increments.
5.50.095 Cellular telephone service business— Service location.
A. Service Address. Payments by a customer for the telephone
service from telephones without a fixed location shall be allocated
among taxing jurisdictions to the Location of the customer's principal
service address during the period for which the tax applies, regardless
of the location of the facilities used to provide the service. The
customer's "principal service address" is, with respect to each telephone:
(a) the customer's plant, store, office, or other facility where the
telephone is normally assigned for use in conjunction with the
customer's business activity, or (b) the customer's place of residence if
the telephone is for personal use.
B Presumption. There is a presumption that the service address
shown on the telephone service company's records is current and
accurate, unless the taxpayer has actual knowledge to the contrary
C. Roaming Phones. When the service is provided while a subscriber
is roaming outside the subscriber's normal cellular network area, the
gross incemerevenue shall be assigned consistent with the taxpayer's
accounting system to the location of the origmatmg cell site of the call, or
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to the location of the originating cell site of the call, or to the location of
the main cellular switching office that switched the call.
D Dispute Resolution. If there is a dispute between or among the city
of Yakima and another city, or cities, as to the service address of a
customer who is receiving cellular telephone services, and the dispute is
not resolved by negotiation among the parties, then the dispute shall be
resolved by the city and the other city or cities by submitting the issue
for settlement to the Association of Washington Cities ( "AWC ") Once
taxes on the disputed revenues have been paid to one of the contesting
cities, the cellular telephone service company shall have no further
liability with respect to additional taxes, penalties or interest on the
disputed revenues so long as it promptly changes its billing records for
future revenues to comport with the settlement facilitated by AWC.
5.50.100 Commencement of business during tax year.
Where a business, occupation or pursuit, subject to tax upon gross
i-ncemerevenue has not been carried on for the full calendar or fiscal
year next preceding the tax year for which license is required, the license
fee or tax shall be paid monthly in installments during the life of the
license on or before the tenth day of the month, and shall be based upon
the gross ineemerevenue for the month next preceding that in which
payment is due In such cases the taxpayer shall make monthly returns
similar to the annual returns provided for herein on or before the tenth
day of the month, under oath or affirmation covering the business of the
previous month.
In all other cases where a person commences during any tax year to
engage m any business, occupation, pursuit, or privilege, he or she is
entitled to a license for the remainder of such tax year for the required
fee apportioned in the ratio of the remainder to a full tax year
5.50.110 Prerequisite for monthly payments.
In any case where the taxpayer pays his or her license fee or tax
monthly he or she shall nevertheless first procure his or her occupation
license in the manner herein required before commencing or continuing
in business, and shall pay the premium fee or tax therefor, which shall
be credited against future installments.
5.50.120 Sale or transfer of business.
Upon the sale or transfer during any tax year of a business on account
of which a fee or tax is required, the purchaser or transferee shall, if the
fee or tax has not been paid m full for the year, be responsible for its
payment for that portion of the year during which he or she carries on
such business.
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5.50.130 Taxpayer to keep record—Returns to be kept confidential.
It shall be the duty of each taxpayer taxed upon his or her gross
incemerevenue to keep and enter in a proper book or set of books or
records an account which shall accurately reflect the amount of his or
her gross ineemerevenue, which account shall always be open to the
inspection of the director of finance and budget of the city, or his or her
duly authorized agent, and from which said officer or his or her agent
may verify the return made by the taxpayer
The applications, statements or returns made to the director of finance
and budget, pursuant to this chapter, shall be subject to disclosure as
provided by state law
5.50.140 Authority of clerk to investigate.
If any taxpayer fails to apply for license or make his or her return, or
if the director of finance and budget of the city is dissatisfied as to the
correctness of the statements made m the application or return of any
taxpayer, said officer, or his or her authorized agent, may enter the
premises of such taxpayer at any reasonable time for the purpose of
auditing or otherwise inspecting his or her books or records of account
to ascertain the amount of the fee or tax or to determine the correctness
of such statements, as the case may be, and may examine any person
under oath administered by said officer, or his or her agent, touching the
matters inquired into, or said officer, or his or her authorized agent, may
fix a time and place for an investigation of the correctness of the return
and may issue a subpoena to the taxpayer, or any other person, to attend
upon such investigation and there testify, under oath administered by
said officer, or his or her agent, in regard to the matters inquired into
and may, by subpoena, require him or her, or any person, to bring with
him or her such books, records and papers as may be necessary
5.50.150 Over or under payment.
If the director of finance and budget upon investigation or upon
checking returns finds that the fee or tax paid on any of them is more
than the amount required of the taxpayer, he or she shall refund the
amount overpaid by a warrant upon the general fund. If the director of
finance and budget finds that the fee or tax paid is less than required, he
or she shall send a statement to the taxpayer showing the balance due,
who shall within thrcethirty days pay the amount shown thereon.
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5.50.160 Remedy for nonpayment.
If any taxpayer fails to apply for license, or make his or her return, or
to pay the fee or tax therefor, or any part thereof, within three days after
the same shall have become due, the director of finance and budget shall
ascertain the amount of the fee or tax or installment thereof due and
shall notify such taxpayer thereof, who shall be liable therefor in any
suit or action by the city for the collection thereof. The director of finance
and budget shall also notify the city attorney m writing of the name of
such delinquent taxpayer and the amount due from him or her and said
officer shall, with the assistance of the director of finance and budget,
collect the same by any appropriate means or by suit or action in the
name of the city
5.50.170 Appeals
Any taxpayer aggrieved by the amount of the fee or tax found by the
director of finance and budget to be required under the provisions of
this chapter, may appeal to the city council from such finding by filing a
written notice of appeal with the director of finance and budget within
five days from the time such taxpayer was given notice of such amount.
The director of finance and budget shall, as soon as is practicable, fix a
time and place for the hearing of such appeal, which time shall not be
more than ten thirty days after the filing of the notice of appeal, and he
or she shall cause a notice of the time and place thereof to be delivered
or mailed to the appellant. At such hearing, the taxpayer shall be
entitled to be heard and to introduce evidence on his or her own behalf
The city council shall thereupon ascertain the correct amount of the fee
or tax by resolution and the director of finance and budget shall
immediately notify the appellant thereof, which amount, together with
costs of the appeal, if appellant is unsuccessful therein, must be paid
within three days after such notice is given.
The city manager of the city of Yakima may, by subpoena, require the
attendance thereat of any person, anyand may also require him or her to
produce any pertinent books and records. Any person served with such
subpoena shall appear at the time and place therein stated and produce
the books and records required, if any, and shall testify truthfully under
oath administered by the city manager as to any matter required of him
or her pertinent to the appeal, and it shall be unlawful for him or her to
fail or refuse so to do
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5.50.180 Director of finance and budget authorized to make rules.
The director of finance and budget shall have the power and it shall
be his or her duty, from time to time, to adopt, publish, and enforce
rules and regulations not inconsistent with this chapter or with law for
the purpose of carrying out the provisions thereof, and it shall be
unlawful to violate or fail to comply with, any such rule or regulation.
5.50.190 Posting of license — Unlawful use.
All licenses issued pursuant to the provisions of this chapter shall be
kept posted by the licensee m a conspicuous place in his or her principal
place of business in the city
No person to whom a license has been issued, pursuant to this
chapter, shall suffer or allow any other person chargeable with a
separate license to operate under or display his or her license, nor shall
such other person operate under or display such license.
5.50.200 Unlawful acts.
It shall be unlawful for any person liable to tax hereunder to fail or
refuse to make application or return for a license or to pay the fee or tax
or installment thereof when due, or for any person to make any false or
fraudulent application or return or any false statement or representation
m, or in connection with, any such application or return, or to aid or abet
another m any attempt to evade payment of the fee or tax, or any part
thereof, or for any person to fail to appear and /or testify in response to
subpoena issued pursuant hereto, or to testify falsely upon any
investigation of the correctness of a return, or upon the hearing of any
appeal, or in any manner to hinder or delay the city or any of its officers
in carrying out the provisions of this chapter
5.50.205 Referendum procedure.
A special referendum procedure shall apply to all business and
occupation taxes first imposed by the city and to all increases in the rates
of such taxes. The city intends this procedure to conform to the
requirements of RCW 35.21 706 as presently enacted. If RCW 35.21 706 is
repealed, the referendum procedure contained in Article IV Section 3 of
the City Charter shall apply If RCW 35.21 706 is amended, such
amendments shall be deemed to be incorporated herein.
A referendum petition may be filed with the city clerk (the "filing
officer "), within seven days of passage of any ordinance first imposing
or increasing the rate of a business and occupation tax; provided, that
with respect to Ordinance No 3163, a referendum petition may be filed
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within seven days of passage of this ordinance. Within ten days, the
filing officer shall confer with the petitioner concerning form and style
of the petition, issue the petition an identification number, and secure an
accurate, concise, and positive ballot title from the city clerk. The
petitioner shall have thirty days in which to secure the signatures of not
less than fifteen percent of the registered voters of the city, as of the last
municipal general election, upon petition forms which contain the ballot
title and full text of the measure to be referred. The filing officer shall
verify the sufficiency of the signatures on the petition and, if sufficient
signatures are properly submitted, shall certify the referendum measure
to the next election ballot within the city or at a special election ballot as
provided pursuant to RCW 35 17.260(2)
5.50.210 Severability.
If any provision or section of this chapter shall be held void or
unconstitutional, all other parts, provisions and sections of this chapter
not expressly so held to be void or unconstitutional shall continue in full
force and effect.
SECTION 2. If any section, subsection, paragraph, sentence, clause or phrase of
this ordinance is declared invalid or unconstitutional for any reason, such
decision shall not affect the validity of the remaining portions of this ordinance.
SECTION 3. This ordinance shall be in full force and effect 30 days after its
passage, approval, and publication as provided by law and by the City Charter
PASSED BY THE CITY COUNCIL, signed and approved this 4th day of
October, 2005
t
e 'r
Paul P George, Mayor
ATTEST
City Clerk
Effective Date: 11/6/05
Publication Date: 10/7/05
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
"--
Item No �s
For Meeting Of October 4, 2005
ITEM TITLE Consideration of an ordinance relating to business regulations and utility
taxes, amending utility taxes on companies in the business of selling or
furnishing natural gas, and amending Chapter 5 50 of the City of Yakima
Municipal Code, specifically sections 5 50 020, 030, 050, 060, 065,
070, 080, 090, 095, 100, 110, 120, 130, 140, 150, 160, 170, 180,
and 190
SUBMITTED BY Finance Department
CONTACT PERSON /TELEPHONE. Rita Anson, Finance Director, 575- 60 03tY
Tim Jensen, Treasury Services Officer, 575 -60'
SUMMARY EXPLANATION On September 20, 2005, the City Council passed Ordinance
No 2005 -51 approving a ten -year franchise with Cascade Natural Gas Corporation (CNG),
subject to a vote of the electors at an election on November 8, 2005 On September 20, 2005, the
City Council also adopted Resolution No 2005 -150, which provides for the submittal to the
electors of the City of Yakima of a proposition as to whether a franchise shall be granted to
Cascade Natural Gas Corporation.
RCW 35.21 860 no longer allows the City to impose a franchise fee on CNG, therefore, the City
tax code, which currently imposes a 2% franchise fee based on the previous franchise agreement,
needs to be revised. In addition to the franchise fee, the City currently imposes a 4% utility tax on
CNG revenues. The enclosed ordinance will eliminate the 2% franchise fee and will increase the
utility tax by a like amount. The attached Ordinance amending Chapter 5 50 of the Yakima
Municipal Code (YMC) adjusts the utility tax rate to preserve revenue neutrality The
amendment will maintain the status quo in terms of revenue to the City from CNG's business
activities in the City of Yakima. (Note A similar adjustment was made in Section 5.50 050 of the
YMC in past years when a 2% franchise fee was replaced with an additional 2% utility tax on telephone
and electric utilities) In addition to YMC changes in the franchise fee and utility tax, as noted
above, there are also language changes that revise and update the wording in Chapter 5 50' in the
attached proposed amendments to the Yakima Municipal Code
Resolution Ordinance X Other (Specify)
Contract Mail to (name and address)
Phone
Funding Source
APPROVED FOR SUBMITTAL J� City Manager
STAFF RECOMMENDATION Pass Ordinance
BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION Ordinance passed. ORDINANCE NO. 2005-56