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BACKGROUND California Government Code Section 935 provides that certain claims against a local public entity for money or damages shall be governed by the local public entity if the public entity adopts an ordinance setting forth a procedure for filing claims. The proposed amendments to the Pleasanton Municipal Code will reduce the timeline for filing tax refund claims to the minimums allowed by State law. The amendments will also establish a process for persons who wish to file a tax refund claim and bar claims from being filed on behalf of a class of persons unless verified by every member of the class. DISCUSSION Each year the City receives money from various taxes. Some of those taxes are collected directly by the City (i.e., the business license tax and the transient occupancy tax) while others are collected by the County or the State. The County of Alameda, for example, is responsible for collecting property taxes and documentary transfer taxes and distributing the appropriate amount to the City. The State Board of Equalization, on the other hand, collects sales and use taxes and then distributes the appropriate amount to the City. When a person or business believes that a tax has been collected illegally or that an overpayment was made, the person or business is required to file a claim with the agency that collected the tax. In the case of the business license tax and the transit occupancy tax, persons who want to dispute the tax or seek a refund would need to file a claim with the City. Staff proposes amendments to the City's municipal code that will: (1) tighten up the timeline for persons to file a claim to dispute a business license tax or transient occupancy tax payment; (2) establish a process for filing a claim and the information that must be contained in the claim; and (3) bar claims from being filed on behalf of a class of persons unless verified by every member of the class. The Code Amendments Limit the Time for Filing a Claim for Reimbursement: Following a recent Court of Appeal case (Macy's Department Stores, Inc. v. City and County of San Francisco, 143 Cal. App. 4th 1444), many cities in California are amending their ordinances to limit the time in which persons may file a claim for reimbursement. In Macy's v. City and County of San Francisco, Macy's Department Stores successfully challenged San Francisco's business license program which required businesses to calculate taxes based on in-city payroll and gross receipts and to pay the larger of the two amounts. In awarding damages to Macy's the Court looked to San Francisco's local claim ordinance to determine how many years of tax payments to refund to Macy's. Because San Francisco's claim ordinance required persons (e.g., Macy's) to file a claim within one year from payment of a disputed tax, the City did not have to pay Macy's for all of the years that it had collected the tax; the City only had to refund Macy's for one year. As a result, the City saved millions of dollars. Page 2 of 3