State of Illinois
91st General Assembly

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SB334 Enrolled                                 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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Enrolled              -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 Act imposed upon  a
 8    public  utility  in  the business of distributing, supplying,
 9    furnishing or selling  electricity  for  use  or  consumption
10    pursuant 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 Enrolled              -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 Enrolled              -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 Enrolled              -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.

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