Chapter 3.28
VISITOR’S SERVICE FEE*
Sections:
3.28.005 Findings and Purpose.
3.28.030 Operator’s Collection Duties.
3.28.040 Reporting and Remitting, Collection.
3.28.045 Penalties and Interest.
3.28.055 Enforcement Procedures—Appeal.
3.28.060 Duty of Successor of Operator.
3.28.065 Divulging Information Prohibited.
3.28.080 Fee Declared a Debt—Action to Collect.
3.28.085 Penalty for Violations.
* Prior ordinance history: Ords. 86-5 and 93-15.
3.28.005 Findings and Purpose.
The City Council finds and declares as follows:
A. The natural, recreational and cultural resources of Newport Beach make it a popular destination for business travelers and vacationers;
B. Visitor serving businesses, such as hotels, restaurants and retail shops, comprise a large segment of the economy of the City of Newport Beach;
C. The existing visitor serving businesses within Newport Beach are subject to increased competition due to the construction of numerous hotels and restaurants in cities near Newport Beach;
D. To maintain the economic viability of the existing visitor serving businesses it is necessary to provide those visitors with information about the resources and businesses available to serve their needs, and to encourage persons to visit Newport Beach during the off-season;
E. Businesses that provide lodging for visitors will play a key role in dispensing information to visitors, and the guests of hotels, motels and inns will be the principal beneficiaries of the program;
F. The program for providing services to visitors and encouraging others to visit Newport Beach should be funded by fees charged to the guests of hotels and motels;
G. A program for providing services to visitors and informing potential visitors of the advantages of Newport Beach is likely to generate additional transient occupancy tax and sales tax revenues that can be used by the City to provide services and make improvements that will benefit residents and visitors alike;
H. The visitor service fee required by this chapter is equivalent to the costs incurred by the City in providing services and is representative of the benefit to those visiting Newport Beach. (Ord. 2023-22 § 117, 2023; Ord. 2003-13 § 1 (part), 2003)
3.28.010 Definitions.
Except where the context otherwise requires, the definitions given in this section shall govern the construction of this chapter:
City Collector. The term “City Collector” shall mean the Finance Director.
Guest. The term “guest” shall mean any individual who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive days or less, counting portions of days as full days. Any individual occupying space in a hotel shall be deemed to be a guest until the period of thirty (30) days has expired, unless there is a qualifying rental agreement between the operator and the guest providing for a longer period of occupancy.
Hotel. The term “hotel” shall mean any structure or any portion of any structure or the air space within any structure which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes for periods of thirty (30) days or less. The term “hotel” includes any inn, residential dwelling unit, motel, group residential or lodging house, bed and breakfast inn, single room occupancy hotel, hostel, rental unit, public or private residential club, mobile home, time-share project, house trailer at a fixed location, or other structure or portion of a structure.
Individual. The term “individual” shall mean any natural person.
Occupancy. The term “occupancy” shall mean the use or possession, or the right to use or possession, of a specific room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping purposes.
Operator. The term “operator” shall mean the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, time-share project owner’s association or any other capacity. Where the operator performs his functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.
Person. Except as used in the term “guest,” the term “person” shall have the same meaning as set forth in Section 1.08.120.
Qualifying Rental Agreement. The term “qualifying rental agreement” shall mean a written leasehold agreement signed by both the operator and guest obligating the guest to pay rent for use and possession of a room or space in a hotel for a period of not less than thirty-one (31) consecutive days. The “qualifying rental agreement” shall be legally enforceable by both the operator and guest and shall include in its terms both the right to occupy and the obligation to pay for a room and/or rooms for thirty-one (31) days or more. “Qualifying rental agreement” expressly excludes:
A. Any agreement, regardless of the rental term, which is terminated for any reason, by either party, or by mutual consent, prior to the thirty-first consecutive day of occupancy; or
B. Any agreement that would be unlawful or constitute a violation of law.
Rent. The term “rent” shall mean the consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction.
Time-Share Interest. The term “time-share interest” shall mean either a time-share estate or a time-share use (as those terms are defined in California Business and Professions Code Section 11212) and any similar form of ownership involving a right in perpetuity, for life, or for a term of years, to occupy any room, space or area in a time-share project.
Time-Share Project. The term “time-share project” shall mean a structure or real property (including air space) in which a time-share interest has been sold. (Ord. 2023-22 § 118, 2023; Ord. 2012-18 § 13, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.015 Visitor Services.
The City, or an entity under contract to the City, shall develop, plan, carry out and supervise a program to serve the needs of visitors to, and promote tourism in, the City of Newport Beach. The City, or the entity retained by the City, in implementing this plan shall, at a minimum:
A. Employ, and provide suitable quarters for, competent personnel to carry out the services described above;
B. Prepare and distribute information, by way of brochures, publications, guides, direct mail and the media that informs visitors, and prospective visitors, of the resources of Newport Beach and the businesses available to serve their needs;
C. Develop and implement marketing programs with an emphasis on increasing business and visitor trade during the off-peak season (October through May). (Ord. 2003-13 § 1 (part), 2003)
3.28.020 Service Fee.
Each guest shall pay a fee of one percent (1%) of the rent charged by the operator as consideration for, and to defray the cost of, the services provided by the City. The fee constitutes a debt owed by the guest to the City which is extinguished only by a payment to the operator or directly to the City. The guest shall pay the fee to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the fee shall be paid with each installment. Any unpaid fee shall be due upon the guest’s termination of tenancy. (Ord. 2003-13 § 1 (part), 2003)
3.28.025 Use of Service Fee.
Funds received by the City pursuant to this chapter shall be used solely for the purposes described in Section 3.28.015. All fees received pursuant to this chapter shall be deposited into a special account designated the “visitor service fee fund.” (Ord. 2003-13 § 1 (part), 2003)
3.28.030 Operator’s Collection Duties.
Each operator shall collect the fee imposed by this chapter to the same extent, and at the same time, as rent is collected from each guest. The fee shall be separately stated from the amount of the rent charged, and each guest shall receive a receipt for payment from the operator. However, the operator shall not be required to separately state the fee if the operator complies with the provisions of Section 3.16.050 of Chapter 3.16 related to special packages. (Ord. 2003-13 § 1 (part), 2003)
3.28.035 Exemptions.
No fee shall be imposed upon:
A. Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the fee specified in this chapter, and only when in the performance of official duties thereof;
B. Any officer or employee of a foreign government who is exempt by reason of express provision of Federal law or international treaty;
C. A transient occupying a hotel pursuant to a qualifying rental agreement entered into prior to the first day of occupancy;
D. An employee of an airline company who is occupying a hotel room in the course of his or her employment, but only when the room is rented by the airline employer pursuant to a qualifying rental agreement that has been preapproved by the Finance Director;
E. Any person or guest occupying a hotel room provided without rent charged (complimentary) to the person or guest by the operator, including but not limited to:
1. Rooms provided to charitable organizations;
2. Rooms provided to meeting planners who may book future hotel rooms and provide business and conferencing opportunities for the economic benefit of the City;
3. Rooms provided to displeased guests; and/or
4. Rooms provided to hotel employees;
F. No exemption shall be granted except pursuant to an application filed when the rent is collected and under penalty of perjury upon a form prescribed by the Finance Director. It is the guest’s responsibility to provide necessary proof of the exemption. (Ord. 2012-18 § 14, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.040 Reporting and Remitting, Collection.
The operator shall be required to collect, report and remit all fees paid pursuant to this chapter in the same manner as required by Section 3.16.070. (Ord. 2023-22 § 119, 2023; Ord. 2003-13 § 1 (part), 2003)
3.28.045 Penalties and Interest.
Any operator who fails to collect and remit any fee imposed by this chapter within the time required shall be required to pay penalties and interest in the same manner and amounts as provided in Section 3.16.080. (Ord. 2023-22 § 120, 2023; Ord. 2003-13 § 1 (part), 2003)
3.28.050 Records.
It shall be the duty of every operator liable for the collection and payment to the City of any fee imposed by this chapter to keep and preserve, for a period of not less than four years, all records necessary to determine the amount of fees the operator was required to collect and pay to the City. All retained records shall be subject to audit as provided in Section 3.16.070. The Finance Director shall have the right to inspect and/or audit these records at any time during normal business hours on twenty-four (24) hours’ written notice. The records shall be maintained at the operator’s premises or at a location convenient to the Finance Director. The records shall include at least the following:
A. Daily summaries of room occupancies;
B. A record of each occupancy charge for which exemption is claimed, the City provided exemption form, if applicable, including the name of the individual occupying the room, dates for occupancy and reasons for exemption; and
C. All qualifying rental agreements. (Ord. 2012-18 § 15, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.055 Enforcement Procedures—Appeal.
The Finance Director shall enforce any failure or refusal of any operator to collect the fee, or make any report or remittance of the fee, required by this chapter in the same manner and subject to the same conditions and procedures as provided in Section 3.16.090. (Ord. 2012-18 § 16, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.057 Payment Required.
No injunction, writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the City, or an officer thereof, to prevent or enjoin the collection of fees sought to be collected pursuant to this chapter. Payment of all fees, interest and penalties is a required condition precedent to seeking judicial review of any liability under this chapter. (Ord. 2023-22 § 121, 2023; Ord. 2009-17 § 2, 2009)
3.28.060 Duty of Successor of Operator.
A. If an operator who is liable for any fee or penalties under this chapter sells or otherwise disposes of the hotel operation, his/her successor shall notify the Finance Director of the date of sale at least thirty (30) days before the date of sale, or, if the decision to sell was made less than thirty (30) days prior to the actual sale, shall then immediately upon the sale withhold a sufficient portion of the purchase price to equal the amount of any unpaid fees or penalty until the selling operator produces a receipt from the Finance Director showing that the fees or penalties have been paid or a clearance certificate from the Finance Director stating that no fee or penalty is due. If the seller does not present a receipt or clearance certificate within thirty (30) days after such successor commences to conduct business, the successor shall deposit the withheld amount with the Finance Director pending settlement of the account of the seller.
B. If the successor operator fails to withhold a portion of the purchase price as required in subsection (A) of this section, the successor operator shall be liable to the City for the payment of the amount required to be withheld. Within thirty (30) days after receiving a written request from the successor for a clearance certificate stating that no fee or penalty is due, the City Collector shall either issue the certificate or mail notice to the successor at its address as it appears on the records of the City Collector of the estimated amount of the fee and penalty that must be paid as a condition of issuing the certificate. (Ord. 2023-22 § 122, 2023; Ord. 2012-18 § 17, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.065 Divulging Information Prohibited.
Returns filed with the City pursuant to this chapter, and information regarding the amount of gross receipts, adjustments, credits, over collections, taxes, fees, penalties and interest, shall be and remain confidential. No person having an administrative duty under this chapter shall make known in any manner whatsoever the business affairs, operations, or information obtained by an investigation or audit of the records of any operator or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, of the operator, set forth or to knowingly permit any return or any abstract, or copy of the return to be seen or examined by any person, except this section shall not apply to (i) any disclosures made in connection with any hearing, appeal, or any civil action or proceeding relating to the determination or recovery of the fee; (ii) any prosecution of any person for violation of any provision of this chapter; or (iii) any criminal or civil proceeding pertaining to the fee. This subsection shall not prohibit, nor be construed to prohibit, disclosure of statistical or cumulative information derived from tax returns, when the information disclosed does not identify or relate to any particular operator. This subsection shall not prohibit, nor be construed to prohibit, any disclosure of tax returns or other information when disclosure is compelled by an order of court or other judicial process. (Ord. 2003-13 § 1 (part), 2003)
3.28.070 Refunds.
A. Claim Required. Whenever the amount of any fee, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the City under this chapter, it may be refunded as provided in subsections (B) and (C) of this section; provided, that a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Finance Director within one year of the date of payment. The claim shall be on forms furnished by the Finance Director.
B. Claim by Operator. An operator may claim a refund, or take as credit against visitor service fees collected and remitted, the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the Finance Director that the person from whom the fee has been collected was not a guest; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the fee so collected has either been refunded to the guest or credited to rent subsequently payable by the guest to the operator.
C. Claim by Guest. A guest may obtain a refund of visitor service fees overpaid or paid more than once or erroneously or illegally collected or received by the City by filing a claim in the manner provided in subsection (A) of this section, but only when the fee was paid by the guest directly to the Finance Director, or when the guest, having paid the fee to the operator, establishes to the satisfaction of the Finance Director that the guest has been unable to obtain a refund from the operator who collected the fee.
D. Evidence. No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto. (Ord. 2023-22 § 123, 2023; Ord. 2012-18 § 18, 2012: Ord. 2003-13 § 1 (part), 2003)
3.28.075 Notice.
Any notice required to be given pursuant to this chapter shall be deemed given if served on the operator or the operator’s representative in the manner provided in Section 1.08.080 and addressed to the operator at the address shown on the transient occupancy registration certificate. (Ord. 2023-22 § 124, 2023; Ord. 2003-13 § 1 (part), 2003)
3.28.080 Fee Declared a Debt—Action to Collect.
Any fee collected by an operator pursuant to this chapter that has not been paid to the City, fee an operator has failed to collect, or penalty or interest due from an operator shall be deemed a debt owed by the operator to the City and the operator shall be liable in an action brought in the name of the City of Newport Beach for the recovery of such amount. (Ord. 2023-22 § 125, 2023; Ord. 2003-13 § 1 (part), 2003)
3.28.085 Penalty for Violations.
No operator or other person shall willfully: (A) fail or refuse to register as required by this chapter; (B) fail to make any return required by this chapter; (C) fail or refuse to furnish a supplemental return or other data required by the Finance Director; or (D) make a false or fraudulent return or claim. (Ord. 2023-22 § 126, 2023; Ord. 2012-18 § 19, 2012: Ord. 2003-13 § 1 (part), 2003)