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HomeMy WebLinkAboutOrdinances - 22-12 - 02/22/2022 - Electric Use Tax CITY OF MCHENRY MCHENRY COUNTY STATE OF ILLINOIS Ordinance 22-12 An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapter 8, Imposing a New Electric Use Tax Passed by the Mayor and City Council Of the City of McHenry McHenry County State of Illinois February 22, 2022 Published in pamphlet form by authority of the Mayor and City Council of the City of McHenry, McHenry County, Illinois this 23d day of February 2022. ORDINANCE NO. 22-12 An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapter 8,Imposing a New Electric Use Tax WHEREAS, the City of McHenry, McHenry County, Illinois (the "City"), is a home rule municipality as contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and the passage of this Ordinance constitutes an exercise of the City's home rule powers and functions as granted in the Constitution of the State of Illinois. WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and WHEREAS, the City Council has determined that additional revenue is needed to fund capital asset maintenance and replacement items included in the Community Investment Plan ; and WHEREAS,pursuant to its home rule powers and Section 8-11-2 of the Illinois Municipal Code, 65 ILCS 5/8-11-2, the Mayor and Aldermen of the City have determined that it is useful, appropriate, and in the best interests of the City to impose a new electric utility tax on the privilege of using or consuming electricity acquired in a purchase at retail and used or consumed with the corporate limits of the City. NOW, THEREFORE, BE IT ORDAINED by the CITY COUNCIL of the CITY OF McHENRY, McHenry County, Illinois, pursuant to its home rule authority, as follows: SECTION 1: The foregoing recitals shall be and are hereby incorporated herewith. SECTION 2: The City Code shall be amended to add a new Title 3, Chapter 8 that shall read as follows: Chapter 8. ELECTRIC USE TAX: 3-8-1 Establishment of Tax: An electric use tax at the rates specified in this subsection is hereby established and levied by the City on all persons engaged in the privilege of using or consuming electricity acquired in a purchase at retail and used or consumed within the corporate limits of the City, calculated on a monthly basis, for each purchaser beginning on the effective date of this ordinance: (i) For the first 2,000 kilowatt-hours used or consumed in a month; 0.61 cents per kilowatt-hour; (ii)For the next 48,000 kilowatt-hours used or consumed in a month; 0.40 cents per kilowatt-hour; (iii) For the next 50,000 kilowatt-hours used or consumed in a month; 0.36 cents per kilowatt-hour; An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page I (iv) For the next 400,000 kilowatt-hours used or consumed in a month; 0.35 cents per kilowatt-hour; (v) For the next 500,000 kilowatt-hours used or consumed in a month; 0.34 cents per kilowatt-hour; (vi)For the next 2,000,000 kilowatt-hours used or consumed in a month; 0.32 cents per kilowatt-hour; (vii) For the next 2,000,000 kilowatt-hours used or consumed in a month; 0.315 cents per kilowatt-hour; (viii) For the next 5,000,000 kilowatt-hours used or consumed in a month; 0.31 cents per kilowatt-hour; (ix) For the next 10,000,000 kilowatt-hours used or consumed in a month; 0.305 cents per kilowatt-hour; and (x) For all electricity used or consumed in excess of 20,000,000 kilowatt-hours in a month, 0.30 cents per kilowatt-hour. 3-8-2 Limitations: No tax is imposed by this Chapter with respect to any transaction in interstate commerce or otherwise to the extent to which that business or privilege may not be made the subject of taxation by the state of Illinois or this City under the constitution and statutes of the United States. Nor will any persons engaged in using or consuming electricity acquired in a purchase at retail and used or consumed within the corporate limits of the City be subject to taxation under the provisions of this Chapter for such transactions as are or may become subject to taxation under the provisions of the Illinois Municipal Retailers' Occupation Tax Act. 3-8-3 Tax in Addition to Other Compensation: This tax is in addition to all taxes, fees, franchise agreements, payments for use of streets, alleys or other public places, use of wires, poles or other infrastructure and equipment, and any other revenue measures and agreements imposed by the City, the State of Illinois or any other political subdivision of the State. 3-8-4 Definitions: For the purposes of this Chapter, the definitions shall be those used in 65 ILCS 5/8-11-2, as may be subsequently amended. 3-8-5 Payment of Tax to the City/Returns: 1. Collection Of Tax: The person maintaining a place of business in the state of Illinois who delivers the electricity to the purchaser shall collect the tax authorized by this Chapter from the purchaser and shall file a return with, and pay the amount of the tax collected to,the City. This tax constitutes a debt of the purchaser to the person who delivers the electricity to the purchaser and is recoverable at the same time and in the same manner as the original charge for delivering the electricity. 2. Persons delivering electricity may collect the tax from the purchaser by adding the tax to the gross charge for delivering the electricity. Persons delivering electricity also are authorized to add to the gross charge an amount equal to three percent(3%) of the tax to reimburse An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page 2 the person delivering electricity for the expense incurred in keeping records, billing customers, preparing and filing returns, remitting the tax, and supplying data to the City on the City's request. 3. Any tax required to be collected pursuant to this Chapter and any such tax collected by a person delivering electricity constitutes a debt owed to the City by the person delivering the electricity. With respect to such debt owed to the City, the person delivering electricity may be allowed a credit against such debt to the extent the tax related to deliveries of electricity is not collected because the charges for such electricity are written off as uncollectible; except that if such charges are thereafter collected by the person delivering electricity, then that person must remit the tax to the City. Any partial payment not specifically identified by the purchaser will be deemed to be for the delivery of electricity. 4. Every person who delivers electricity to a purchaser shall on a monthly basis file a return in a form and manner prescribed by the City's Finance Director. The return and accompanying payment shall be due on or before the last day of the month following the month during which the tax is collected or is required to be collected under this Chapter. 5. If the person delivering electricity fails to collect the tax from`the purchaser, then the purchaser will be required to pay the tax directly to the City, on or before the last day of the month following the month during which electricity is used or consumed, by filing a tax return in the form and manner that the City Finance Director will prescribe. 3-8-6 Credits For Overpayment; Limitation: If it appears that an amount of tax has been paid that was not due under the provisions of this Chapter, whether as a result of a mistake of fact or an error of law, then that amount will be credited against any tax due, or to become due, under this Chapter from the person who made the erroneous payment on a filing of a claim for a credit by that person with the City, except that no amount erroneously paid will be credited if that amount was paid more than one (1) year prior to the filing of a claim for a credit. 3-8-7 Actions for Past Due Amounts: No action to recover any amount of tax due under the provisions of this Chapter may be commenced more than one (1)year after the due date of that amount. 3-8-8 Books and Records: The person maintaining the place of business in the state of Illinois who collects the tax authorized by this Chapter from the purchaser is required to keep accurate books and records of its business or activity, including contemporaneous books and records denoting the transactions that gave rise, or may have given rise, to any tax liability under this Chapter. The books and records are subject to and available for inspection by the City at reasonable times during normal business hours. 3-8-9 Resales: 1. Electricity that is delivered to a person in the City shall be considered to be for use and consumption by that person unless the person receiving the electricity has an active resale number issued by the City Finance Director and furnishes that number to the person who delivers the electricity and certifies to that person that the sale is either entirely or partially nontaxable as a sale An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page 3 for resale. 2. If a person who receives electricity in the City claims to be an authorized reseller of electricity, that person shall apply to the City Finance Director for a resale number. The applicant shall state facts showing why it is not liable for the tax imposed by this section on any purchases of electricity and shall furnish such additional information as the City Finance Director may reasonably require. 3. Upon approval of the application,the City Finance Director shall assign a resale number to the applicant and shall certify the number to the applicant. 4. The City Finance Director may cancel the resale number of any person if the person fails to pay any tax payable under this Chapter for electricity used or consumed by the person, or if the number was either (1) obtained through misrepresentation, or (2) no longer necessary because the person has discontinued making resales. 5. If a reseller had acquired electricity partly for use or consumption and partly for resale, the reseller shall collect and remit the tax imposed by this Chapter directly to the City Finance Director,under the rules prescribed by this Chapter,on any amount that is used or consumed by the reseller and any amount delivered by the reseller for use and consumption and not as a sale for resale. 6. Any person who delivers electricity to a reseller having an active resale number and complying with all other conditions in this Chapter shall be excused from collecting and remitting the tax on any portion of the electricity delivered to the reseller, provided that the person reports the total amount of electricity delivered to the reseller, and such other information that the City Finance Director may reasonably require. 3-8-10 Exemption for Local Governments: The taxes described in this article shall not be applicable to any school districts, or any unit of local government or taxing body located in whole or in part within the corporate limits of the City. The City Finance Director is authorized to prepare and maintain a list of properties exempt from the taxes described in this Chapter so long as the property is in possession by any school district, or any unit of local government or taxing body located in whole or in part within the corporate limits of the City. 3-8-11 Administration and Implementation: The City Finance Director, or his or her designee, may prescribe reasonable rules, definitions and regulations to collect this fee. 3-8-12 Use: The proceeds of this tax shall be used exclusively to fund capital asset maintenance and replacement items included in the Community Investment Plan and as approved as part of the annual budget process by City Council. No operating costs are to be paid from these revenues. 3-8-13 Violations; Penalty: Any person found guilty of violating any provision of this Chapter may, in addition to any fee or penalty due, be assessed a fine up to seven hundred fifty dollars ($750.00). Each day a violation continues to exist shall be a separate offense. Citations for An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page 4 violations of this Chapter shall be adjudicated by the City's administrative adjudication hearing officer, or at the choice of the City, by any court of competent jurisdiction. SECTION 3: Communication to Commonwealth Edison. Prior to the effective date of this Ordinance, the City Finance Director is hereby authorized and directed to send a certified copy of this Ordinance to Commonwealth Edison along with a list indicating the properties that will be exempt from the provisions of Section 10 of this Ordinance. SECTION 4: Severability. If any section, paragraph, clause, or provision of this Ordinance shall be held invalid, the invalidity thereof shall not affect any of the other provisions of this Ordinance. SECTION 5: Repeal of Prior Ordinances. All ordinances or parts of ordinances in conflict herewith are repealed to the extent of such conflict. SECTION 6: Effective Date. This Ordinance shall be in full force and effect upon its passage, approval and publication in pamphlet form (which publication is hereby authorized) as provided by law. Ayes Nays Absent Abstain Alderman Devine x Alderman Glab x Alderman Harding x Alderman Strach x Alderwoman Miller x Alderman Santi x Alderman McClatchey x APPROVED: (SEAL) Mayor ett ATTEST: *tIl► AY / *a' ^— City Clerk Trisha Ramel C44 Passed: February 22, 2022 Approved: February 22, 2022 Z:\M\McHenryCityof\Ordinances\Electric Utility Tax.CLEAN 2 17 22.docx An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page 5 CERTIFICATION I, Monte Johnson, do hereby certify that I am the duly appointed, acting and qualified Deputy Clerk of the City of McHenry, McHenry County, Illinois, and that as such Clerk, I am the keeper of the records and minutes and proceedings of the Mayor and Aldermen of said City of McHenry. I do hereby further certify that at a regular meeting of the Mayor and Aldermen of the City of McHenry, held on the 22nd day of February, 2022, the foregoing Ordinance entitled An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax, was duly passed by the City Council of the City of McHenry. The pamphlet form of Ordinance No. 22-121 including the Ordinance and a cover sheet thereof, was prepared, and a copy of such Ordinance was posted in the City Hall, commencing on the 23rd day of February 2022, and will continue for at least 10 days thereafter. Copies of such Ordinance are also available for public inspection upon request in the office of the City Clerk. I do further certify that the original, of which the attached is a true and correct copy, is entrusted to me as the Clerk of said City for safekeeping, and that I am the lawful custodian and keeper of the same. GIVEN under my hand and seal this 23rd day of February 2022. Monte Johnson, Deputy City Clerk City of McHenry, McHenry County, Illinois (SEAL) An Ordinance Amending the McHenry City Code to Create a New Title 3, Chapters 8,Imposing a New Electric Use Tax,Page 6