HB4599ham001 96TH GENERAL ASSEMBLY

Rep. Careen M. Gordon

Filed: 10/15/2009

09600HB4599ham001 LRB096 13427 HLH 30089 a

AMENDMENT TO HOUSE BILL 4599

AMENDMENT NO. ______. Amend House Bill 4599 by replacing everything from line 4 on page 1 through line 19 on page 6 with the following:

"Section 5. The Gas Use Tax Law is amended by changing Section 5-50 as follows:

(35 ILCS 173/5-50)

Sec. 5-50. Exemptions. The tax imposed under this Act shall not apply to:

(1) Gas used by business enterprises located in an enterprise zone certified by the Department of Commerce and Economic Opportunity pursuant to the Illinois Enterprise Zone Act;

(2) Gas used by governmental bodies, or a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes. Such use shall not be exempt unless the government body, or corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes has first been issued a tax exemption identification number by the Department of Revenue pursuant to Section 1g of the Retailers' Occupation Tax Act. A limited liability company may qualify for the exemption under this Section only if the limited liability company is organized and operated exclusively for educational purposes. The term "educational purposes" shall have the same meaning as that set forth in Section 2h of the Retailers' Occupation Tax Act;

(3) Gas used in the production of electric energy. This exemption does not include gas used in the general maintenance or heating of an electric energy production facility or other structure;

(4) Gas used in a petroleum refinery operation;

(5) Gas purchased by persons for use in liquefaction and fractionation processes that produce value added natural gas byproducts for resale;

(6) Gas used in the production of anhydrous ammonia and downstream nitrogen fertilizer products for resale.

(7) Gas used by any business enterprise that is properly assigned or included within one of the following Standard Industrial Classifications, as designated in the Standard Industrial Classification Manual prepared by the federal Office of Management and Budget: 10; 12; 13; 14; 15; 16; 17; 20; 21; 22; 23; 24; 25; 26; 27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.

The Department may adopt rules to implement the provisions of this Section.

(Source: P.A. 93-31, eff. 10-1-03.)

Section 10. The Gas Revenue Tax Act is amended by changing Section 1 as follows:

(35 ILCS 615/1) (from Ch. 120, par. 467.16)

Sec. 1. For the purposes of this Act: "Gross receipts" means the consideration received for gas distributed, supplied, furnished or sold to persons for use or consumption and not for resale, and for all services (including the transportation or storage of gas for an end-user) rendered in connection therewith, and shall include cash, services and property of every kind or nature, and shall be determined without any deduction on account of the cost of the service, product or commodity supplied, the cost of materials used, labor or service costs, or any other expense whatsoever. However, "gross receipts" shall not include receipts from:

(i) any minimum or other charge for gas or gas service where the customer has taken no therms of gas;

(ii) any charge for a dishonored check;

(iii) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(iv) any charge for reconnection of service or for replacement or relocation of facilities;

(v) any advance or contribution in aid of construction;

(vi) repair, inspection or servicing of equipment located on customer premises;

(vii) leasing or rental of equipment, the leasing or rental of which is not necessary to distributing, furnishing, supplying, selling, transporting or storing gas;

(viii) any sale to a customer if the taxpayer is prohibited by federal or State constitution, treaty, convention, statute or court decision from recovering the related tax liability from such customer;

(ix) any charges added to customers' bills pursuant to the provisions of Section 9-221 or Section 9-222 of the Public Utilities Act, as amended, or any charges added to customers' bills by taxpayers who are not subject to rate regulation by the Illinois Commerce Commission for the purpose of recovering any of the tax liabilities or other amounts specified in such provisions of such Act; and

(x) prior to October 1, 2003, any charge for gas or gas services to a customer who acquired contractual rights for the direct purchase of gas or gas services originating from an out-of-state supplier or source on or before March 1, 1995, except for those charges solely related to the local distribution of gas by a public utility. This exemption includes any charge for gas or gas service, except for those charges solely related to the local distribution of gas by a public utility, to a customer who maintained an account with a public utility (as defined in Section 3-105 of the Public Utilities Act) for the transportation of customer-owned gas on or before March 1, 1995. The provisions of this amendatory Act of 1997 are intended to clarify, rather than change, existing law as to the meaning and scope of this exemption. This exemption (x) expires on September 30, 2003.

In case credit is extended, the amount thereof shall be included only as and when payments are received.

"Gross receipts" shall not include consideration received from business enterprises certified under Section 9-222.1 of the Public Utilities Act, as amended, to the extent of such exemption and during the period of time specified by the Department of Commerce and Economic Opportunity.

"Gross receipts" does not include consideration received from any business enterprise that is properly assigned or included within one of the following Standard Industrial Classifications, as designated in the Standard Industrial Classification Manual prepared by the federal Office of Management and Budget: 10; 12; 13; 14; 15; 16; 17; 20; 21; 22; 23; 24; 25; 26; 27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39, during the period in time in which such business enterprise provides a valid exemption certificate (as determined by the Illinois Department of Revenue) to their gas supplier and delivering gas utility. Gas suppliers and delivering gas utilities may reasonably rely on exemption certificates provided by those business enterprises.

"Department" means the Department of Revenue of the State of Illinois.

"Director" means the Director of Revenue for the Department of Revenue of the State of Illinois.

"Taxpayer" means a person engaged in the business of distributing, supplying, furnishing or selling gas for use or consumption and not for resale.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint adventure, corporation, limited liability company, or a receiver, trustee, guardian or other representative appointed by order of any court, or any city, town, county or other political subdivision of this State.

"Invested capital" means that amount equal to (i) the average of the balances at the beginning and end of each taxable period of the taxpayer's total stockholder's equity and total long-term debt, less investments in and advances to all corporations, as set forth on the balance sheets included in the taxpayer's annual report to the Illinois Commerce Commission for the taxable period; (ii) multiplied by a fraction determined under Sections 301 and 304(a) of the "Illinois Income Tax Act" and reported on the Illinois income tax return for the taxable period ending in or with the taxable period in question. However, notwithstanding the income tax return reporting requirement stated above, beginning July 1, 1979, no taxpayer's denominators used to compute the sales, property or payroll factors under subsection (a) of Section 304 of the Illinois Income Tax Act shall include payroll, property or sales of any corporate entity other than the taxpayer for the purposes of determining an allocation for the invested capital tax. This amendatory Act of 1982, Public Act 82-1024, is not intended to and does not make any change in the meaning of any provision of this Act, it having been the intent of the General Assembly in initially enacting the definition of "invested capital" to provide for apportionment of the invested capital of each company, based solely upon the sales, property and payroll of that company.

"Taxable period" means each period which ends after the effective date of this Act and which is covered by an annual report filed by the taxpayer with the Illinois Commerce Commission.

(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)".