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91_SB0334eng SB334 Engrossed LRB9102941NTsb 1 AN ACT regarding electricity excise taxes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Enterprise Zone Act is amended 5 by changing Section 5.5 as follows: 6 (20 ILCS 655/5.5) (from Ch. 67 1/2, par. 609.1) 7 Sec. 5.5. High Impact Business. 8 (a) In order to respond to unique opportunities to 9 assist in the encouragement, development, growth and 10 expansion of the private sector through large scale 11 investment and development projects, the Department is 12 authorized to receive and approve applications for the 13 designation of "High Impact Businesses" in Illinois subject 14 to the following conditions: 15 (1) such applications may be submitted at any time 16 during the year; 17 (2) such business is not located, at the time of 18 designation, in an enterprise zone designated pursuant to 19 this Act; 20 (3) the business intends to make a minimum 21 investment of $12,000,000 which will be placed in service 22 in qualified property and intends to create 500 full-time 23 equivalent jobs at a designated location in Illinois or 24 intends to make a minimum investment of $30,000,000 which 25 will be placed in service in qualified property and 26 intends to retain 1,500 full-time jobs at a designated 27 location in Illinois. The business must certify in 28 writing that the investments would not be placed in 29 service in qualified property and the job creation or job 30 retention would not occur without the tax credits and 31 exemptions set forth in subsection (b) of this Section. SB334 Engrossed -2- LRB9102941NTsb 1 The terms "placed in service" and "qualified property" 2 have the same meanings as described in subsection (h) of 3 Section 201 of the Illinois Income Tax Act; and 4 (4) no later than 90 days after an application is 5 submitted, the Department shall notify the applicant of 6 the Department's determination of the qualification of 7 the proposed High Impact Business under this Section. 8 (b) Businesses designated as High Impact Businesses 9 pursuant to this Section shall qualify for the credits and 10 exemptions described in the following Acts: Section 9-222 and 11 Section 9-222.1A of The Public Utilities Act, subsection (h) 12 of Section 201 of the Illinois Income Tax Act; and, Section 13 1d of the Retailers' Occupation Tax Act, provided that these 14 credits and exemptions described in these Acts shall not be 15 authorized until the minimum investments set forth in 16 subsection (a) of this Section have been placed in service in 17 qualified properties and, in the case of the exemptions 18 described in the Public Utilities Act and Section 1d of the 19 Retailers' Occupation Tax Act, the minimum full-time 20 equivalent jobs or full-time jobs set forth in subsection (a) 21 of this Section have been created or retained. Businesses 22 designated as High Impact Businesses under this Section shall 23 also qualify for the exemption described in Section 5l of the 24 Retailers' Occupation Tax Act. The credit provided in 25 subsection (h) of Section 201 of the Illinois Income Tax Act 26 shall be applicable to investments in qualified property as 27 set forth in subsection (a) of this Section. 28 (c) High Impact Businesses located in federally 29 designated foreign trade zones or sub-zones are also eligible 30 for additional credits, exemptions and deductions as 31 described in the following Acts: Section 9-221 and Section 32 9-222.1 of the Public Utilities Act; and subsection (g) of 33 Section 201, and Section 203 of the Illinois Income Tax Act. 34 (d) Existing Illinois businesses which apply for SB334 Engrossed -3- LRB9102941NTsb 1 designation as a High Impact Business must provide the 2 Department with the prospective plan for which 1,500 3 full-time jobs would be eliminated in the event that the 4 business is not designated. 5 (e) New proposed facilities which apply for designation 6 as High Impact Business must provide the Department with 7 proof of alternative non-Illinois sites which would receive 8 the proposed investment and job creation in the event that 9 the business is not designated as a High Impact Business. 10 (f) In the event that a business is designated a High 11 Impact Business and it is later determined after reasonable 12 notice and an opportunity for a hearing as provided under The 13 Illinois Administrative Procedure Act, that the business 14 would have placed in service in qualified property the 15 investments and created or retained the requisite number of 16 jobs without the benefits of the High Impact Business 17 designation, the Department shall be required to immediately 18 revoke the designation and notify the Director of the 19 Department of Revenue who shall begin proceedings to recover 20 all wrongfully exempted State taxes with interest. The 21 business shall also be ineligible for all State funded 22 Department programs for a period of 10 years. 23 (g) The Department shall revoke a High Impact Business 24 designation if the participating business fails to comply 25 with the terms and conditions of the designation. 26 (h) Prior to designating a business, the Department 27 shall provide the members of the General Assembly and 28 Illinois Economic and Fiscal Commission with a report setting 29 forth the terms and conditions of the designation and 30 guarantees that have been received by the Department in 31 relation to the proposed business being designated. 32 (Source: P.A. 89-89, eff. 6-30-95.) 33 Section 10. The Electricity Excise Tax Law is amended by SB334 Engrossed -4- LRB9102941NTsb 1 changing Sections 2-3 and 2-4 as follows: 2 (35 ILCS 640/2-3) 3 Sec. 2-3. Definitions. As used in this Law, unless the 4 context clearly requires otherwise: 5 (a) "Department" means the Department of Revenue of the 6 State of Illinois. 7 (b) "Director" means the Director of the Department of 8 Revenue of the State of Illinois. 9 (c) "Person" means any natural individual, firm, trust, 10 estate, partnership, association, joint stock company, joint 11 venture, corporation, limited liability company, or a 12 receiver, trustee, guardian, or other representative 13 appointed by order of any court, or any city, town, village, 14 county, or other political subdivision of this State. 15 (d) "Purchase price" means the consideration paid for 16 the distribution, supply, furnishing, sale, transmission or 17 delivery of electricity to a person for non-residential use 18 or consumption (and for both residential and non-residential 19 use or consumption in the case of electricity purchased from 20 a municipal system or electric cooperative described in 21 subsection (b) of Section 2-4) and not for resale, and for 22 all services directly related to the production, transmission 23 or distribution of electricity distributed, supplied, 24 furnished, sold, transmitted or delivered for non-residential 25 use or consumption, and includes transition charges imposed 26 in accordance with Article XVI of the Public Utilities Act 27 and instrument funding charges imposed in accordance with 28 Article XVIII of the Public Utilities Act, as well as cash, 29 services and property of every kind or nature, and shall be 30 determined without any deduction on account of the cost of 31 the service, product or commodity supplied, the cost of 32 materials used, labor or service costs, or any other expense 33 whatsoever. However, "purchase price" shall not include SB334 Engrossed -5- LRB9102941NTsb 1 consideration paid for: 2 (i) any charge for a dishonored check; 3 (ii) any finance or credit charge, penalty or 4 charge for delayed payment, or discount for prompt 5 payment; 6 (iii) any charge for reconnection of service or for 7 replacement or relocation of facilities; 8 (iv) any advance or contribution in aid of 9 construction; 10 (v) repair, inspection or servicing of equipment 11 located on customer premises; 12 (vi) leasing or rental of equipment, the leasing or 13 rental of which is not necessary to furnishing, supplying 14 or selling electricity; 15 (vii) any purchase by a purchaser if the supplier 16 is prohibited by federal or State constitution, treaty, 17 convention, statute or court decision from recovering the 18 related tax liability from such purchaser; and 19 (viii) any amounts added to purchasers' bills 20 because of charges made pursuant to the tax imposed by 21 this Law. 22 In case credit is extended, the amount thereof shall be 23 included only as and when payments are made. 24 "Purchase price" shall not include consideration received 25 from business enterprises certified under Section 9-222.1 or 26 9-222.1A of the Public Utilities Act, as amended, to the 27 extent of such exemption and during the period of time 28 specified by the Department of Commerce and Community 29 Affairs. 30 (e) "Purchaser" means any person who acquires 31 electricity for use or consumption and not for resale, for a 32 valuable consideration. 33 (f) "Non-residential electric use" means any use or 34 consumption of electricity which is not residential electric SB334 Engrossed -6- LRB9102941NTsb 1 use. 2 (g) "Residential electric use" means electricity used or 3 consumed at a dwelling of 2 or fewer units, or electricity 4 for household purposes used or consumed at a building with 5 multiple dwelling units where the electricity is registered 6 by a separate meter for each dwelling unit. 7 (h) "Self-assessing purchaser" means a purchaser for 8 non-residential electric use who elects to register with and 9 to pay tax directly to the Department in accordance with 10 Sections 2-10 and 2-11 of this Law. 11 (i) "Delivering supplier" means any person engaged in 12 the business of delivering electricity to persons for use or 13 consumption and not for resale and who, in any case where 14 more than one person participates in the delivery of 15 electricity to a specific purchaser, is the last of the 16 suppliers engaged in delivering the electricity prior to its 17 receipt by the purchaser. 18 (j) "Delivering supplier maintaining a place of business 19 in this State", or any like term, means any delivering 20 supplier having or maintaining within this State, directly or 21 by a subsidiary, an office, generation facility, transmission 22 facility, distribution facility, sales office or other place 23 of business, or any employee, agent or other representative 24 operating within this State under the authority of such 25 delivering supplier or such delivering supplier's subsidiary, 26 irrespective of whether such place of business or agent or 27 other representative is located in this State permanently or 28 temporarily, or whether such delivering supplier or such 29 delivering supplier's subsidiary is licensed to do business 30 in this State. 31 (k) "Use" means the exercise by any person of any right 32 or power over electricity incident to the ownership of that 33 electricity, except that it does not include the generation, 34 production, transmission, distribution, delivery or sale of SB334 Engrossed -7- LRB9102941NTsb 1 electricity in the regular course of business or the use of 2 electricity for such purposes. 3 (Source: P.A. 90-561, eff. 8-1-98.) 4 (35 ILCS 640/2-4) 5 Sec. 2-4. Tax imposed. 6 (a) Except as provided in subsection (b), a tax is 7 imposed on the privilege of using in this State electricity 8 purchased for use or consumption and not for resale, other 9 than by municipal corporations owning and operating a local 10 transportation system for public service, at the following 11 rates per kilowatt-hour delivered to the purchaser: 12 (i) For the first 2000 kilowatt-hours used or 13 consumed in a month: 0.330 cents per kilowatt-hour; 14 (ii) For the next 48,000 kilowatt-hours used or 15 consumed in a month: 0.319 cents per kilowatt-hour; 16 (iii) For the next 50,000 kilowatt-hours used or 17 consumed in a month: 0.303 cents per kilowatt-hour; 18 (iv) For the next 400,000 kilowatt-hours used or 19 consumed in a month: 0.297 cents per kilowatt-hour; 20 (v) For the next 500,000 kilowatt-hours used or 21 consumed in a month: 0.286 cents per kilowatt-hour; 22 (vi) For the next 2,000,000 kilowatt-hours used or 23 consumed in a month: 0.270 cents per kilowatt-hour; 24 (vii) For the next 2,000,000 kilowatt-hours used or 25 consumed in a month: 0.254 cents per kilowatt-hour; 26 (viii) For the next 5,000,000 kilowatt-hours used 27 or consumed in a month: 0.233 cents per kilowatt-hour; 28 (ix) For the next 10,000,000 kilowatt-hours used or 29 consumed in a month: 0.207 cents per kilowatt-hour; 30 (x) For all electricity in excess of 20,000,000 31 kilowatt-hours used or consumed in a month: 0.202 cents 32 per kilowatt-hour. 33 Provided, that in lieu of the foregoing rates, the tax is SB334 Engrossed -8- LRB9102941NTsb 1 imposed on a self-assessing purchaser at the rate of 5.1% of 2 the self-assessing purchaser's purchase price for all 3 electricity distributed, supplied, furnished, sold, 4 transmitted and delivered to the self-assessing purchaser in 5 a month. 6 (b) A tax is imposed on the privilege of using in this 7 State electricity purchased from a municipal system or 8 electric cooperative, as defined in Article XVII of the 9 Public Utilities Act, which has not made an election as 10 permitted by either Section 17-200 or Section 17-300 of such 11 Act, at the lesser of 0.32 cents per kilowatt hour of all 12 electricity distributed, supplied, furnished, sold, 13 transmitted, and delivered by such municipal system or 14 electric cooperative to the purchaser or 5% of each such 15 purchaser's purchase price for all electricity distributed, 16 supplied, furnished, sold, transmitted, and delivered by such 17 municipal system or electric cooperative to the purchaser, 18 whichever is the lower rate as applied to each purchaser in 19 each billing period. 20 (c) The tax imposed by this Section 2-4 is not imposed 21 with respect to any use of electricity by business 22 enterprises certified under Section 9-222.1 or 9-222.1A of 23 the Public Utilities Act, as amended, to the extent of such 24 exemption and during the time specified by the Department of 25 Commerce and Community Affairs; or with respect to any 26 transaction in interstate commerce, or otherwise, to the 27 extent to which such transaction may not, under the 28 Constitution and statutes of the United States, be made the 29 subject of taxation by this State. 30 (Source: P.A. 90-561, eff. 8-1-98.) 31 Section 15. The Public Utilities Act is amended by 32 changing Section 9-222 and adding Section 9-222.1A as 33 follows: SB334 Engrossed -9- LRB9102941NTsb 1 (220 ILCS 5/9-222) (from Ch. 111 2/3, par. 9-222) 2 Sec. 9-222. Whenever a tax is imposed upon a public 3 utility engaged in the business of distributing, supplying, 4 furnishing, or selling gas for use or consumption pursuant to 5 Section 2 of the Gas Revenue Tax Act, or whenever a tax is 6 required to be collected by a delivering supplier pursuant to 7 Section 2-7 of the Electricity Excise Tax Actimposed upon a8public utility in the business of distributing, supplying,9furnishing or selling electricity for use or consumption10pursuant to Section 2 of The Public Utilities Revenue Act, or 11 whenever a tax is imposed upon a public utility pursuant to 12 Section 2-202 of this Act, such utility may charge its 13 customers, other than customers who are high impact 14 businesses under Section 5.5 of the Illinois Enterprise Zone 15 Act, or certified business enterprises under Section 9-222.1 16 of this Act, to the extent of such exemption and during the 17 period in which such exemption is in effect, in addition to 18 any rate authorized by this Act, an additional charge equal 19 to the total amount of such taxes. The exemption of this 20 Section relating to high impact businesses shall be subject 21 to the provisions of subsections (a) and (b) of Section 5.5 22 of the Illinois Enterprise Zone Act. This requirement shall 23 not apply to taxes on invested capital imposed pursuant to 24 the Messages Tax Act, the Gas Revenue Tax Act and the Public 25 Utilities Revenue Act. Such utility shall file with the 26 Commission a supplemental schedule which shall specify such 27 additional charge and which shall become effective upon 28 filing without further notice. Such additional charge shall 29 be shown separately on the utility bill to each customer. 30 The Commission shall have the power to investigate whether or 31 not such supplemental schedule correctly specifies such 32 additional charge, but shall have no power to suspend such 33 supplemental schedule. If the Commission finds, after a 34 hearing, that such supplemental schedule does not correctly SB334 Engrossed -10- LRB9102941NTsb 1 specify such additional charge, it shall by order require a 2 refund to the appropriate customers of the excess, if any, 3 with interest, in such manner as it shall deem just and 4 reasonable, and in and by such order shall require the 5 utility to file an amended supplemental schedule 6 corresponding to the finding and order of the Commission. 7 Except with respect to taxes imposed on invested capital, 8 such tax liabilities shall be recovered from customers solely 9 by means of the additional charges authorized by this 10 Section. 11 (Source: P.A. 85-1182.) 12 (220 ILCS 5/9-222.1A new) 13 Sec. 9-222.1A. High impact business. Beginning on August 14 1, 1998 and thereafter, a business enterprise that is 15 certified as a High Impact Business by the Department of 16 Commerce and Community Affairs is exempt from the tax 17 imposed by Section 2-4 of the Electricity Excise Tax Law, if 18 the High Impact Business is registered to self-assess that 19 tax, and is exempt from any additional charges added to the 20 business enterprise's utility bills as a pass-on of State 21 utility taxes under Section 9-222 of this Act, to the extent 22 the tax or charges are exempted by the percentage specified 23 by the Department of Commerce and Community Affairs for 24 State utility taxes, provided the business enterprise meets 25 the following criteria: 26 (1) it intends either (i) to make a minimum 27 eligible investment of $12,000,000 that will be placed in 28 service in qualified property in Illinois and is intended 29 to create at least 500 full-time equivalent jobs at a 30 designated location in Illinois; or (ii) to make a 31 minimum eligible investment of $30,000,000 that will be 32 placed in service in qualified property in Illinois and 33 is intended to retain at least 1,500 full-time equivalent SB334 Engrossed -11- LRB9102941NTsb 1 jobs at a designated location in Illinois; 2 (2) it is designated as a High Impact Business by 3 the Department of Commerce and Community Affairs; and 4 (3) it is certified by the Department of Commerce 5 and Community Affairs as complying with the requirements 6 specified in clauses (1) and (2) of this Section. 7 The Department of Commerce and Community Affairs shall 8 determine the period during which the exemption from the 9 Electricity Excise Tax Law and the charges imposed under 10 Section 9-222 are in effect, which shall not exceed 20 years 11 from the date of initial certification, and shall specify the 12 percentage of the exemption from those taxes or additional 13 charges. 14 The Department of Commerce and Community Affairs is 15 authorized to promulgate rules and regulations to carry out 16 the provisions of this Section, including procedures for 17 complying with the requirements specified in clauses (1) 18 and (2) of this Section and procedures for applying for the 19 exemptions authorized under this Section; to define the 20 amounts and types of eligible investments that business 21 enterprises must make in order to receive State utility tax 22 exemptions or exemptions from the additional charges imposed 23 under Section 9-222 and this Section; to approve such utility 24 tax exemptions for business enterprises whose investments are 25 not yet placed in service; and to require that business 26 enterprises granted tax exemptions or exemptions from 27 additional charges under Section 9-222 repay the exempted 28 amount if the business enterprise fails to comply with the 29 terms and conditions of the certification. 30 Upon certification of the business enterprises by the 31 Department of Commerce and Community Affairs, the Department 32 of Commerce and Community Affairs shall notify the Department 33 of Revenue of the certification. The Department of Revenue 34 shall notify the public utilities of the exemption status of SB334 Engrossed -12- LRB9102941NTsb 1 business enterprises from the tax or pass-on charges of State 2 utility taxes. The exemption status shall take effect within 3 3 months after certification of the business enterprise. 4 Section 99. Effective date. This Act takes effect upon 5 becoming law.