99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB0785

 

Introduced , by Rep. Michael J. Madigan

 

SYNOPSIS AS INTRODUCED:
 
65 ILCS 5/8-11-2  from Ch. 24, par. 8-11-2

    Amends the Illinois Municipal Code. Makes a technical change in a Section concerning municipal occupation and privilege taxes.


LRB099 04598 AWJ 24626 b

 

 

A BILL FOR

 

HB0785LRB099 04598 AWJ 24626 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Municipal Code is amended by
5changing Section 8-11-2 as follows:
 
6    (65 ILCS 5/8-11-2)  (from Ch. 24, par. 8-11-2)
7    Sec. 8-11-2. The The corporate authorities of any
8municipality may tax any or all of the following occupations or
9privileges:
10        1. (Blank).
11        2. Persons engaged in the business of distributing,
12    supplying, furnishing, or selling gas for use or
13    consumption within the corporate limits of a municipality
14    of 500,000 or fewer population, and not for resale, at a
15    rate not to exceed 5% of the gross receipts therefrom.
16        2a. Persons engaged in the business of distributing,
17    supplying, furnishing, or selling gas for use or
18    consumption within the corporate limits of a municipality
19    of over 500,000 population, and not for resale, at a rate
20    not to exceed 8% of the gross receipts therefrom. If
21    imposed, this tax shall be paid in monthly payments.
22        3. The privilege of using or consuming electricity
23    acquired in a purchase at retail and used or consumed

 

 

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1    within the corporate limits of the municipality at rates
2    not to exceed the following maximum rates, calculated on a
3    monthly basis for each purchaser:
4            (i) For the first 2,000 kilowatt-hours used or
5        consumed in a month; 0.61 cents per kilowatt-hour;
6            (ii) For the next 48,000 kilowatt-hours used or
7        consumed in a month; 0.40 cents per kilowatt-hour;
8            (iii) For the next 50,000 kilowatt-hours used or
9        consumed in a month; 0.36 cents per kilowatt-hour;
10            (iv) For the next 400,000 kilowatt-hours used or
11        consumed in a month; 0.35 cents per kilowatt-hour;
12            (v) For the next 500,000 kilowatt-hours used or
13        consumed in a month; 0.34 cents per kilowatt-hour;
14            (vi) For the next 2,000,000 kilowatt-hours used or
15        consumed in a month; 0.32 cents per kilowatt-hour;
16            (vii) For the next 2,000,000 kilowatt-hours used
17        or consumed in a month; 0.315 cents per kilowatt-hour;
18            (viii) For the next 5,000,000 kilowatt-hours used
19        or consumed in a month; 0.31 cents per kilowatt-hour;
20            (ix) For the next 10,000,000 kilowatt-hours used
21        or consumed in a month; 0.305 cents per kilowatt-hour;
22        and
23            (x) For all electricity used or consumed in excess
24        of 20,000,000 kilowatt-hours in a month, 0.30 cents per
25        kilowatt-hour.
26        If a municipality imposes a tax at rates lower than

 

 

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1    either the maximum rates specified in this Section or the
2    alternative maximum rates promulgated by the Illinois
3    Commerce Commission, as provided below, the tax rates shall
4    be imposed upon the kilowatt hour categories set forth
5    above with the same proportional relationship as that which
6    exists among such maximum rates. Notwithstanding the
7    foregoing, until December 31, 2008, no municipality shall
8    establish rates that are in excess of rates reasonably
9    calculated to produce revenues that equal the maximum total
10    revenues such municipality could have received under the
11    tax authorized by this subparagraph in the last full
12    calendar year prior to the effective date of Section 65 of
13    this amendatory Act of 1997; provided that this shall not
14    be a limitation on the amount of tax revenues actually
15    collected by such municipality.
16        Upon the request of the corporate authorities of a
17    municipality, the Illinois Commerce Commission shall,
18    within 90 days after receipt of such request, promulgate
19    alternative rates for each of these kilowatt-hour
20    categories that will reflect, as closely as reasonably
21    practical for that municipality, the distribution of the
22    tax among classes of purchasers as if the tax were based on
23    a uniform percentage of the purchase price of electricity.
24    A municipality that has adopted an ordinance imposing a tax
25    pursuant to subparagraph 3 as it existed prior to the
26    effective date of Section 65 of this amendatory Act of 1997

 

 

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1    may, rather than imposing the tax permitted by this
2    amendatory Act of 1997, continue to impose the tax pursuant
3    to that ordinance with respect to gross receipts received
4    from residential customers through July 31, 1999, and with
5    respect to gross receipts from any non-residential
6    customer until the first bill issued to such customer for
7    delivery services in accordance with Section 16-104 of the
8    Public Utilities Act but in no case later than the last
9    bill issued to such customer before December 31, 2000. No
10    ordinance imposing the tax permitted by this amendatory Act
11    of 1997 shall be applicable to any non-residential customer
12    until the first bill issued to such customer for delivery
13    services in accordance with Section 16-104 of the Public
14    Utilities Act but in no case later than the last bill
15    issued to such non-residential customer before December
16    31, 2000.
17        4. Persons engaged in the business of distributing,
18    supplying, furnishing, or selling water for use or
19    consumption within the corporate limits of the
20    municipality, and not for resale, at a rate not to exceed
21    5% of the gross receipts therefrom.
22    None of the taxes authorized by this Section may be imposed
23with respect to any transaction in interstate commerce or
24otherwise to the extent to which the business or privilege may
25not, under the constitution and statutes of the United States,
26be made the subject of taxation by this State or any political

 

 

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1sub-division thereof; nor shall any persons engaged in the
2business of distributing, supplying, furnishing, selling or
3transmitting gas, water, or electricity, or using or consuming
4electricity acquired in a purchase at retail, be subject to
5taxation under the provisions of this Section for those
6transactions that are or may become subject to taxation under
7the provisions of the "Municipal Retailers' Occupation Tax Act"
8authorized by Section 8-11-1; nor shall any tax authorized by
9this Section be imposed upon any person engaged in a business
10or on any privilege unless the tax is imposed in like manner
11and at the same rate upon all persons engaged in businesses of
12the same class in the municipality, whether privately or
13municipally owned or operated, or exercising the same privilege
14within the municipality.
15    Any of the taxes enumerated in this Section may be in
16addition to the payment of money, or value of products or
17services furnished to the municipality by the taxpayer as
18compensation for the use of its streets, alleys, or other
19public places, or installation and maintenance therein,
20thereon or thereunder of poles, wires, pipes or other equipment
21used in the operation of the taxpayer's business.
22    (a) If the corporate authorities of any home rule
23municipality have adopted an ordinance that imposed a tax on
24public utility customers, between July 1, 1971, and October 1,
251981, on the good faith belief that they were exercising
26authority pursuant to Section 6 of Article VII of the 1970

 

 

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1Illinois Constitution, that action of the corporate
2authorities shall be declared legal and valid, notwithstanding
3a later decision of a judicial tribunal declaring the ordinance
4invalid. No municipality shall be required to rebate, refund,
5or issue credits for any taxes described in this paragraph, and
6those taxes shall be deemed to have been levied and collected
7in accordance with the Constitution and laws of this State.
8    (b) In any case in which (i) prior to October 19, 1979, the
9corporate authorities of any municipality have adopted an
10ordinance imposing a tax authorized by this Section (or by the
11predecessor provision of the "Revised Cities and Villages Act")
12and have explicitly or in practice interpreted gross receipts
13to include either charges added to customers' bills pursuant to
14the provision of paragraph (a) of Section 36 of the Public
15Utilities Act or charges added to customers' bills by taxpayers
16who are not subject to rate regulation by the Illinois Commerce
17Commission for the purpose of recovering any of the tax
18liabilities or other amounts specified in such paragraph (a) of
19Section 36 of that Act, and (ii) on or after October 19, 1979,
20a judicial tribunal has construed gross receipts to exclude all
21or part of those charges, then neither those municipality nor
22any taxpayer who paid the tax shall be required to rebate,
23refund, or issue credits for any tax imposed or charge
24collected from customers pursuant to the municipality's
25interpretation prior to October 19, 1979. This paragraph
26reflects a legislative finding that it would be contrary to the

 

 

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1public interest to require a municipality or its taxpayers to
2refund taxes or charges attributable to the municipality's more
3inclusive interpretation of gross receipts prior to October 19,
41979, and is not intended to prescribe or limit judicial
5construction of this Section. The legislative finding set forth
6in this subsection does not apply to taxes imposed after the
7effective date of this amendatory Act of 1995.
8    (c) The tax authorized by subparagraph 3 shall be collected
9from the purchaser by the person maintaining a place of
10business in this State who delivers the electricity to the
11purchaser. This tax shall constitute a debt of the purchaser to
12the person who delivers the electricity to the purchaser and if
13unpaid, is recoverable in the same manner as the original
14charge for delivering the electricity. Any tax required to be
15collected pursuant to an ordinance authorized by subparagraph 3
16and any such tax collected by a person delivering electricity
17shall constitute a debt owed to the municipality by such person
18delivering the electricity, provided, that the person
19delivering electricity shall be allowed credit for such tax
20related to deliveries of electricity the charges for which are
21written off as uncollectible, and provided further, that if
22such charges are thereafter collected, the delivering supplier
23shall be obligated to remit such tax. For purposes of this
24subsection (c), any partial payment not specifically
25identified by the purchaser shall be deemed to be for the
26delivery of electricity. Persons delivering electricity shall

 

 

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1collect the tax from the purchaser by adding such tax to the
2gross charge for delivering the electricity, in the manner
3prescribed by the municipality. Persons delivering electricity
4shall also be authorized to add to such gross charge an amount
5equal to 3% of the tax to reimburse the person delivering
6electricity for the expenses incurred in keeping records,
7billing customers, preparing and filing returns, remitting the
8tax and supplying data to the municipality upon request. If the
9person delivering electricity fails to collect the tax from the
10purchaser, then the purchaser shall be required to pay the tax
11directly to the municipality in the manner prescribed by the
12municipality. Persons delivering electricity who file returns
13pursuant to this paragraph (c) shall, at the time of filing
14such return, pay the municipality the amount of the tax
15collected pursuant to subparagraph 3.
16    (d) For the purpose of the taxes enumerated in this
17Section:
18    "Gross receipts" means the consideration received for
19distributing, supplying, furnishing or selling gas for use or
20consumption and not for resale, and the consideration received
21for distributing, supplying, furnishing or selling water for
22use or consumption and not for resale, and for all services
23rendered in connection therewith valued in money, whether
24received in money or otherwise, including cash, credit,
25services and property of every kind and material and for all
26services rendered therewith, and shall be determined without

 

 

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1any deduction on account of the cost of the service, product or
2commodity supplied, the cost of materials used, labor or
3service cost, or any other expenses whatsoever. "Gross
4receipts" shall not include that portion of the consideration
5received for distributing, supplying, furnishing, or selling
6gas or water to business enterprises described in paragraph (e)
7of this Section to the extent and during the period in which
8the exemption authorized by paragraph (e) is in effect or for
9school districts or units of local government described in
10paragraph (f) during the period in which the exemption
11authorized in paragraph (f) is in effect.
12    For utility bills issued on or after May 1, 1996, but
13before May 1, 1997, and for receipts from those utility bills,
14"gross receipts" does not include one-third of (i) amounts
15added to customers' bills under Section 9-222 of the Public
16Utilities Act, or (ii) amounts added to customers' bills by
17taxpayers who are not subject to rate regulation by the
18Illinois Commerce Commission for the purpose of recovering any
19of the tax liabilities described in Section 9-222 of the Public
20Utilities Act. For utility bills issued on or after May 1,
211997, but before May 1, 1998, and for receipts from those
22utility bills, "gross receipts" does not include two-thirds of
23(i) amounts added to customers' bills under Section 9-222 of
24the Public Utilities Act, or (ii) amount added to customers'
25bills by taxpayers who are not subject to rate regulation by
26the Illinois Commerce Commission for the purpose of recovering

 

 

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1any of the tax liabilities described in Section 9-222 of the
2Public Utilities Act. For utility bills issued on or after May
31, 1998, and for receipts from those utility bills, "gross
4receipts" does not include (i) amounts added to customers'
5bills under Section 9-222 of the Public Utilities Act, or (ii)
6amounts added to customers' bills by taxpayers who are not
7subject to rate regulation by the Illinois Commerce Commission
8for the purpose of recovering any of the tax liabilities
9described in Section 9-222 of the Public Utilities Act.
10    For purposes of this Section "gross receipts" shall not
11include amounts added to customers' bills under Section 9-221
12of the Public Utilities Act. This paragraph is not intended to
13nor does it make any change in the meaning of "gross receipts"
14for the purposes of this Section, but is intended to remove
15possible ambiguities, thereby confirming the existing meaning
16of "gross receipts" prior to the effective date of this
17amendatory Act of 1995.
18    "Person" as used in this Section means any natural
19individual, firm, trust, estate, partnership, association,
20joint stock company, joint adventure, corporation, limited
21liability company, municipal corporation, the State or any of
22its political subdivisions, any State university created by
23statute, or a receiver, trustee, guardian or other
24representative appointed by order of any court.
25    "Person maintaining a place of business in this State"
26shall mean any person having or maintaining within this State,

 

 

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1directly or by a subsidiary or other affiliate, an office,
2generation facility, distribution facility, transmission
3facility, sales office or other place of business, or any
4employee, agent, or other representative operating within this
5State under the authority of the person or its subsidiary or
6other affiliate, irrespective of whether such place of business
7or agent or other representative is located in this State
8permanently or temporarily, or whether such person, subsidiary
9or other affiliate is licensed or qualified to do business in
10this State.
11    "Public utility" shall have the meaning ascribed to it in
12Section 3-105 of the Public Utilities Act and shall include
13alternative retail electric suppliers as defined in Section
1416-102 of that Act.
15    "Purchase at retail" shall mean any acquisition of
16electricity by a purchaser for purposes of use or consumption,
17and not for resale, but shall not include the use of
18electricity by a public utility directly in the generation,
19production, transmission, delivery or sale of electricity.
20    "Purchaser" shall mean any person who uses or consumes,
21within the corporate limits of the municipality, electricity
22acquired in a purchase at retail.
23    (e) Any municipality that imposes taxes upon public
24utilities or upon the privilege of using or consuming
25electricity pursuant to this Section whose territory includes
26any part of an enterprise zone or federally designated Foreign

 

 

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1Trade Zone or Sub-Zone may, by a majority vote of its corporate
2authorities, exempt from those taxes for a period not exceeding
320 years any specified percentage of gross receipts of public
4utilities received from, or electricity used or consumed by,
5business enterprises that:
6        (1) either (i) make investments that cause the creation
7    of a minimum of 200 full-time equivalent jobs in Illinois,
8    (ii) make investments of at least $175,000,000 that cause
9    the creation of a minimum of 150 full-time equivalent jobs
10    in Illinois, or (iii) make investments that cause the
11    retention of a minimum of 1,000 full-time jobs in Illinois;
12    and
13        (2) are either (i) located in an Enterprise Zone
14    established pursuant to the Illinois Enterprise Zone Act or
15    (ii) Department of Commerce and Economic Opportunity
16    designated High Impact Businesses located in a federally
17    designated Foreign Trade Zone or Sub-Zone; and
18        (3) are certified by the Department of Commerce and
19    Economic Opportunity as complying with the requirements
20    specified in clauses (1) and (2) of this paragraph (e).
21    Upon adoption of the ordinance authorizing the exemption,
22the municipal clerk shall transmit a copy of that ordinance to
23the Department of Commerce and Economic Opportunity. The
24Department of Commerce and Economic Opportunity shall
25determine whether the business enterprises located in the
26municipality meet the criteria prescribed in this paragraph. If

 

 

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1the Department of Commerce and Economic Opportunity determines
2that the business enterprises meet the criteria, it shall grant
3certification. The Department of Commerce and Economic
4Opportunity shall act upon certification requests within 30
5days after receipt of the ordinance.
6    Upon certification of the business enterprise by the
7Department of Commerce and Economic Opportunity, the
8Department of Commerce and Economic Opportunity shall notify
9the Department of Revenue of the certification. The Department
10of Revenue shall notify the public utilities of the exemption
11status of the gross receipts received from, and the electricity
12used or consumed by, the certified business enterprises. Such
13exemption status shall be effective within 3 months after
14certification.
15    (f) A municipality that imposes taxes upon public utilities
16or upon the privilege of using or consuming electricity under
17this Section and whose territory includes part of another unit
18of local government or a school district may by ordinance
19exempt the other unit of local government or school district
20from those taxes.
21    (g) The amendment of this Section by Public Act 84-127
22shall take precedence over any other amendment of this Section
23by any other amendatory Act passed by the 84th General Assembly
24before the effective date of Public Act 84-127.
25    (h) In any case in which, before July 1, 1992, a person
26engaged in the business of transmitting messages through the

 

 

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1use of mobile equipment, such as cellular phones and paging
2systems, has determined the municipality within which the gross
3receipts from the business originated by reference to the
4location of its transmitting or switching equipment, then (i)
5neither the municipality to which tax was paid on that basis
6nor the taxpayer that paid tax on that basis shall be required
7to rebate, refund, or issue credits for any such tax or charge
8collected from customers to reimburse the taxpayer for the tax
9and (ii) no municipality to which tax would have been paid with
10respect to those gross receipts if the provisions of this
11amendatory Act of 1991 had been in effect before July 1, 1992,
12shall have any claim against the taxpayer for any amount of the
13tax.
14(Source: P.A. 94-793, eff. 5-19-06.)