102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1794

 

Introduced 2/26/2021, by Sen. Laura M. Murphy

 

SYNOPSIS AS INTRODUCED:
 
50 ILCS 45/30
65 ILCS 5/8-11-2.5

    Amends the Local Government Taxpayers' Bill of Rights Act. Provides that the statute of limitations set by a unit of local government for the determination and assessment of taxes covered by the Act may not exceed 10 years (currently, 4 years) after the end of the calendar year for which the return for the period was filed or the end of the calendar year in which the return for the period was due, whichever occurs later. Makes conforming changes concerning the tolling of this 10-year period. Amends the Illinois Municipal Code. In a Section concerning municipal audits of public utilities, provides that municipalities may request information from public utilities no more than annually (currently, no more than once every 2 years). Provides that, if the public utility fails to respond in a timely manner to the request for information with complete information, the public utility shall be liable to the municipality for a penalty of $1,000 for each day it fails to produce the requested information. Provides that, if a public utility is liable for any error in past tax payments in excess of $5,000 that were unknown prior to an audit from the municipality, then the public utility shall reimburse the municipality for the cost of the audit. Sets forth conditions under which the public utility may be liable for attorney's fees incurred by the municipality.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1794LRB102 15982 HLH 21352 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 Local Government Taxpayers' Bill of Rights
5Act is amended by changing Section 30 as follows:
 
6    (50 ILCS 45/30)
7    Sec. 30. Statute of limitations. Units of local government
8have an obligation to review tax returns in a timely manner and
9issue any determination of tax due as promptly as possible so
10that taxpayers may make timely corrections of future returns
11and minimize any interest charges applied to tax
12underpayments. Each unit of local government must provide
13appropriate statutes of limitation for the determination and
14assessment of taxes covered by this Act, provided, however,
15that a statute of limitations may not exceed the following:
16        (1) No notice of determination of tax due or
17    assessment may be issued more than 10 4 years after the end
18    of the calendar year for which the return for the period
19    was filed or the end of the calendar year in which the
20    return for the period was due, whichever occurs later. An
21    audit or review pursuant to Section 35 of this Act or
22    Section 8-11-2.5 of the Illinois Municipal Code shall toll
23    this 10-year period.

 

 

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1        (2) If any tax return was not filed or if during any
2    4-year period for which a notice of tax determination or
3    assessment may be issued by the unit of local government
4    the tax paid or remitted was less than 75% of the tax due
5    for that period, the statute of limitations shall be no
6    more than 6 years after the end of the calendar year in
7    which the return for the period was due or the end of the
8    calendar year in which the return for the period was
9    filed, whichever occurs later. In the event that a unit of
10    local government fails to provide a statute of
11    limitations, the maximum statutory period provided in this
12    Section applies.
13        The changes to this Section made by this amendatory
14    Act of the 102nd General Assembly do not revive any
15    determination and assessment of tax due where the statute
16    of limitations has expired, but do extend the current
17    statute of limitations for the determination and
18    assessment of taxes that have not yet expired.
19    This Section does not place any limitation on a unit of
20local government if a fraudulent tax return is filed.
21(Source: P.A. 91-920, eff. 1-1-01.)
 
22    Section 10. The Illinois Municipal Code is amended by
23changing Section 8-11-2.5 as follows:
 
24    (65 ILCS 5/8-11-2.5)

 

 

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1    Sec. 8-11-2.5. Municipal tax review; requests for
2information.
3    (a) If a municipality has imposed a tax under Section
48-11-2, then the municipality may conduct an audit of tax
5receipts collected from the public utility that is subject to
6the tax or that collects the tax from purchasers on behalf of
7the municipality to determine whether the amount of tax that
8was paid by the public utility was accurate.
9    (b) Not more than once annually every 2 years, a
10municipality that has imposed a tax under this Act may,
11subject to the limitations and protections stated in Section
1216-122 of the Public Utilities Act and in the Local Government
13Taxpayers' Bill of Rights Act, request any information from a
14utility in the format maintained by the public utility in the
15ordinary course of its business that the municipality
16reasonably requires in order to perform an audit under
17subsection (a). The information that may be requested by the
18municipality includes, without limitation:
19        (1) in an electronic format used by the public utility
20    in the ordinary course of its business, the database used
21    by the public utility to determine the amount of tax due to
22    the municipality; provided, however, that, if the
23    municipality has requested customer-specific billing,
24    usage, and load shape data from a public utility that is an
25    electric utility and has not provided the electric utility
26    with the verifiable authorization required by Section

 

 

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1    16-122 of the Public Utilities Act, then the electric
2    utility shall remove from the database all
3    customer-specific billing, usage, and load shape data
4    before providing it to the municipality; and
5        (2) in a format used by the public utility in the
6    ordinary course of its business, summary data, as needed
7    by the municipality, to determine the unit consumption of
8    utility services by providing the gross therms, kilowatts,
9    minutes, or other units of measurement being taxed within
10    the municipal jurisdiction and the gross revenues
11    collected and the associated taxes assessed.
12    (c) Each public utility must provide the information
13requested under subsection (b) within:
14        (1) 60 days after the date of the request if the
15    population of the requesting municipality is 500,000 or
16    less; or
17        (2) 90 days after the date of the request if the
18    population of the requesting municipality exceeds 500,000.
19    The time in which a public utility must provide the
20information requested under subsection (b) may be extended by
21an agreement between the municipality and the public utility.
22If the public utility fails to respond to the request for
23information with complete information pursuant to the timeline
24established by this Section, the public utility shall be
25liable to the municipality for a penalty of $1,000 for each day
26it fails to produce the requested information. If a public

 

 

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1utility receives, during a single month, information requests
2from more than 2 municipalities, or the aggregate population
3of the requesting municipalities is 100,000 customers or more,
4the public utility is entitled to an additional 30 days to
5respond to those requests.
6    (d) If an audit by the municipality or its agents finds an
7error by the public utility in the amount of taxes paid by the
8public utility, then the municipality must notify the public
9utility of the error. Any such notice must be issued pursuant
10to Section 30 of the Local Government Taxpayers' Bill of
11Rights Act or a lesser period of time from the date the tax was
12due that may be specified in the municipal ordinance imposing
13the tax. Upon such a notice, any audit shall be conducted
14pursuant to Section 35 of the Local Government Taxpayers' Bill
15of Rights Act subject to the timelines set forth in this
16subsection (d). The public utility must submit a written
17response within 60 days after the date the notice was
18postmarked stating that it has corrected the error or stating
19the reason that the error is inapplicable or inaccurate. The
20municipality then has 60 days after the receipt of the public
21utility's response to review and contest the conclusion of the
22public utility. If the parties are unable to agree on the
23disposition of the audit findings within 120 days after the
24notification of the error to the public utility, then either
25party may submit the matter for appeal as outlined in Section
2640 of the Local Government Taxpayers' Bill of Rights Act. If

 

 

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1the appeals process does not produce a satisfactory result,
2then either party may pursue the alleged error in a court of
3competent jurisdiction. If the municipality prevails and
4receives at least 50% of the relief requested in court, the
5public utility is liable for the attorney's fees and costs of
6the municipality.
7    (d-5) If a public utility is liable for any error or errors
8in past tax payments cumulatively in excess of $5,000 that
9were unknown prior to an audit from the municipality, the
10public utility shall reimburse the municipality for the cost
11of the audit in addition to any interest and penalties
12imposed.
13    (e) (Blank). No public utility is liable for any error in
14past collections and payments that was unknown by it prior to
15the audit process unless (i) the error was due to negligence by
16the public utility in the collection or processing of required
17data and (ii) the municipality had not failed to respond in
18writing on an accurate and timely basis to any written request
19of the public utility to review and correct information used
20by the public utility to collect the municipality's tax if a
21diligent review of such information by the municipality
22reasonably could have been expected to discover such error.
23If, however, an error in past collections or payments resulted
24in a customer, who should not have owed a tax to any
25municipality, having paid a tax to a municipality, then the
26customer may, to the extent allowed by Section 9-252 of the

 

 

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1Public Utilities Act, recover the tax from the public utility,
2and any amount so paid by the public utility may be deducted by
3that public utility from any taxes then or thereafter owed by
4the public utility to that municipality.
5    (f) All account specific information provided by a public
6utility under this Section may be used only for the purpose of
7an audit of taxes conducted under this Section and the
8enforcement of any related tax claim. All such information
9must be held in strict confidence by the municipality and its
10agents and may not be disclosed to the public under the Freedom
11of Information Act or under any other similar statutes
12allowing for or requiring public disclosure.
13    (g) The provisions of this Section shall not be construed
14as diminishing or replacing any civil remedy available to a
15municipality, taxpayer, or tax collector.
16    (h) This Section does not apply to any municipality having
17a population greater than 1,000,000.
18(Source: P.A. 96-1422, eff. 8-3-10.)