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IsYour Utility Users Tax Ordinance � Ready for the 21st Century ? by Donald H. Maynor xtraordinary changes are taking place in many of the utility industries. To accommo- date these changes, California cities need to modernize their utility users tax (UUT) ordi- nances or run the risk of losing existing and future tax revenues. This article discusses the nature of the industry changes, the im- portance of periodically updat- Ing the UUT ordinance, and the need for an effective tax en- forcement program. Major Changes In Utility Regulation, Competition and Technology About 35 years ago, a small number of Califor- nia cities began imposing an excise tax, known as a utility users tax, on the use of certain util- ity services within their cities. Today, more than 160 cities and counties have enacted util- ity users tax ordinances, imposing a UUr on such services as electricity, gas, water, tele- phone, telegraph, cable television and garbage service. These California public agencies re- ceive more than $12 billion in tax revenue from this source to help pay for essential govern- mental services. As some may recall, there were only ahand- ful of monopoly (Le., regulated) utility provid- ers in California in the early 1970s. These quasi - public institutions were willing to tolled the cities' utility users taxes from the utility cus- tomers, and diligently remit the UUr to the city where the usage took place. Thanks to the cooperation of these large, regulated utility companies, the UUr collection process was eb ficient and dependable. Donald H. Maynor is an Atherton-based attor ney u*o specializes in utility law He also assists Municipal Resource Consultants, a subsidiary ofMBU, in providing tax compliance services to mom than 60 California public agencies rr garding their utility users tax ordinances and utilityJraachises.