§ 8-11-2.5 — Municipal tax review; requests for information

Illinois § 8-11-2.5

• Jurisdiction: Illinois
• Topic: GOVERNMENT
• Ch. 65: MUNICIPALITIES
• Act 65 ILCS 5/: Illinois Municipal Code.
• Art.: Article 8 - Finance

Text

(a) If a municipality has imposed a tax under Section 8-11-2, then the municipality, which may act through its designated auditor or agent, may conduct an audit of tax receipts collected from the public utility that is subject to the tax or that collects the tax from purchasers on behalf of the municipality to determine whether the amount of tax that was paid by the public utility was accurate. (b) Not more than once every 2 years, a municipality that has imposed a tax under Section 8-11-2 of this Code may, subject to the limitations and protections stated in the Local Government Taxpayers' Bill of Rights Act, make a written request via e-mail to an e-mail address provided by the utility for any information from a utility in the format maintained by the public utility in the ordinary course of its business that the municipality reasonably requires in order to perform an audit under subsection (a). The information that may be requested by the municipality includes, without limitation: (1) in an electronic format used by the public utility in the ordinary course of its business, the premises-specific and other information used by the public utility to determine the amount of tax due to the municipality, for a time period that includes the year in which the request is made and not more than 6 years immediately preceding that year, as appropriate for the period being audited, and which shall include for each customer premises in the municipality: (i) the premises address and zip code; (ii) the classification of the premises as designated by the public utility, such as residential, commercial, or industrial; (iii) monthly usage information sufficient to calculate taxes due, in therms, kilowatts, minutes, or other such other unit of measurement used to calculate the taxes; (iv) the taxes actually assessed, collected, and remitted to the municipality; (v) the first date of service for the premises, if that date occurred within the period being audited; and (vi) any tax exemption claimed for the premises and any additional information that supports a specific tax exemption, if the municipality requests that information, including the customer name and other relevant data; however, a public utility that is an electric utility may not provide other customer-specific information to the municipality; and (2) the premises address for customer accounts that the public utility's records indicate are: (i) in a bordering municipality, township, or unincorporated area (other than the City of Chicago), provided that the municipality provides the public utility a list of such bordering jurisdictions; or (ii) in any zip code with boundaries that include or are adjacent to the requesting municipality provided that the municipality provides the public utility a list of those zip codes; this item (ii) applies to requests made on or after September 1, 2022. If any such customer is determined by the municipality and the utility to be located within the requesting municipality, then the public utility shall provide the additional information provided in paragraph (1) of this subsection (b). Following the municipality's receipt of the information provided by the public utility pursuant to paragraphs (1) or (2) of this subsection (b), if a question or issue arises that can only be addressed by accessing customer-specific or additional information not described in this Section, then the utility shall attempt to resolve the question or issue without disclosing any customer-specific information. (c) Each public utility must provide the information requested under subsection (b) within 45 days after the date of the request. The time in which a public utility must provide the information requested under subsection (b) may be extended by an agreement between the municipality and the public utility. (d) If an audit by the municipality or its agents finds an error by the public utility in the amount of taxes paid by the public utility, then the municipality must notify the public utility of the error. Any such notice must be issued pursuant to Section 30 of the Local Government Taxpayers' Bill of Rights Act or a lesser period of time from the date the tax was due that may be specified in the municipal ordinance imposing the tax. Upon such a notice, any audit shall be conducted pursuant to Section 35 of the Local Government Taxpayers' Bill of Rights Act subject to the timelines set forth in this subsection (d). The public utility must submit a written response within 60 days after the date the notice was postmarked stating that it has corrected the error or stating the reason that the error is inapplicable or inaccurate. The municipality then has 60 days after the receipt of the public utility's response to review and contest the conclusion of the public utility. If the parties are unable to agree on the disposition of the audit findings within 120 days after the notification of the error to the public utility, then either party may submit the matter for appeal as outlined in Section 40 of the Local Government Taxpayers' Bill of Rights Act. If the appeals process does not produce a satisfactory result, then either party may pursue the alleged error in a court of competent jurisdiction. (e) The public utility shall be liable to the municipality for unpaid taxes, including taxes that the public utility failed to properly bill to the customer subject to paragraph (2) of subsection (e-10) of this Section. This subsection (e) does not limit a utility's right to an offsetting credit it would otherwise be entitled to, including that authorized by subsection (c) of Section 8-11-2 of this Code. To the extent that a public utility's errors in past tax collections and payments relate to premises located in an area of the municipality that was annexed on or after March 17, 2023 (the effective date of Public Act 102-1144), however, the public utility shall only be liable for such errors beginning 60 days after the date that the municipality provided the public utility notice of the annexation, provided that the public utility provides municipalities with an email address to send annexation notices. A copy of the annexation ordinance and the map filed with the County Clerk sent to the email address provided by the public utility shall be deemed sufficient notice, but other forms of notice may also be sufficient. (e-5) Upon mutual agreement, a utility and municipality may use a web portal in lieu of email to receive notice of annexations and boundary changes. After December 31, 2025 for a gas public utility that serves more than 2,000,000 customers in Illinois and after December 31, 2022 for all other public utilities that serve more than 1,000,000 retail customers in Illinois, the public utilities shall provide a secure web portal for municipalities to use, and, thereafter, the web portals shall be used by all municipalities to notify the public utilities of annexations. The web portal must provide the municipality with an electronic record of all communications and attached documents that the municipality has submitted through the portal. (e-10) (1) No later than August 1, 2023, the Department of Revenue shall develop and publish a written process to be used by each public utility and each municipality that imposes a tax under Section 8-11-2 of this Code, which may act through its designated auditor or agent, under which: (A) by December 31, 2024, and on a regular schedule thereafter to occur approximately every 5 years, each public utility shall work collaboratively with each municipality to develop and file with the Department of Revenue, a master list of all premises addresses in the municipality (including premises addresses with inactive accounts) that are subject to such tax and all accounts in the municipality that are exempt from such tax, provided that the final date for the first master list shall be extended, at the utility's request, to no later than December 31, 2026; (B) information is provided to the municipality to facilitate development of the master list including information described in paragraph (1) of subsection (b) of this Section regarding all accounts (including premises addresses with inactive accounts) that the public utility's records show are in the municipality and the premises addresses in (i) any bordering municipality, (ii) any bordering township, or (iii) any zip code that is in any part in the municipality or that borders the municipality; (C) any dispute between the public utility and the municipality related to the master list will be resolved; (D) on a semi-annual basis following the development of the master list, each public utility shall provide to each municipality certain information that the municipality can use to nominate changes to the master list, including, but not limited to: (i) a list of any tax-related changes, such as the addition or removal of an exemption, or to the taxing jurisdiction, to any account on the master list; and (ii) new premises addresses within the municipality, any bordering municipality, in any bordering township, or in any zip code that is in any part in the municipality or that borders the municipality; (E) accounts nominated by the municipality to be added or deleted from the master list may be submitted to the public utility and related disputes will be resolved; (F) changes may be made to the master list; and (G) the utility may file a master list based solely on its records if the municipality fails to participate and such a municipality may request to restart the process prior to the end of the 5-year cycle. (2) No public utility is liable for any error in tax collections or payments due more than 60 days after the date that the first master list for the relevant municipality is filed with the Department of Revenue unless such error in tax collection or payment: (A) was related to a premises address on the master list at the time of the error; (B) was related to an area of the municipality annexed on or after March 17, 2023 (the effective date of Public Act 102-1144), notice of which was properly provided to the public utility pursuant to the procedures set forth in subsection (e); or (C) resulted from the public utility's failure to comply with the process established in this subsection (e-10). (3) If the public utility uses a portal as set forth in subsection (e-5), all lists, changes affecting tax collection and remission, proposed corrections, and reports shall be provided through such portal. (e-15) If a customer paid a tax to a municipality that the customer did not owe or was in excess of the tax the customer owed, then the customer may, to the extent allowed by Section 9-252 of the Public Utilities Act, recover the tax or over payment from the public utility, and any amount so paid by the public utility may be deducted by that public utility from any taxes then or thereafter owed by the public utility to that municipality. (e-20) (1) Any court of competent jurisdiction shall have the authority to resolve a claim by a municipality that a public utility materially failed to comply with the requirements of subsections (b) or (c) of this Section If a court finds, after notice and hearing, that a public utility (i) caused a material delay in providing information properly requested under such subsections or (ii) omitted a material portion of information properly requested, then, if the claim relates to subsections (b) or (c), the court shall assess a penalty on the utility of up to $50,000 per audit, or up to $10,000 per audit for a utility that served less than 100,000 retail customers on the date of the audit notice, or, if the claim relates to subsection (e-10), up to $50,000 per 5-year master list cycle or up to $10,000 per cycle for a utility that served less than 100,000 retail customers on the date such master list was filed with the Department, which penalty shall be paid by the public utility to the municipality. Notwithstanding anything to the contrary, a penalty assessed pursuant to this subsection shall be the exclusive remedy for the conduct that is the subject of the claim. A penalty assessed under this subsection shall bar and prohibit pursuit of any other penalty, fine, or recovery related to the conduct for which the penalty was assessed. (2) No penalty shall be assessed by the Department pursuant to this subsection if the Department finds that a delay or omission was immaterial or de minimis. (3) Any penalties or fines paid by a public utility pursuant to this subsection shall not be recoverable through the utility's rates. (4) (Blank). (f) All account-specific and premises-specific information provided by a public utility under this Section may be used only for the purpose of an audit of taxes conducted under this Section and the enforcement of any related tax claim. All such information must be held in strict confidence by the municipality and its agents and may not be disclosed to the public under the Freedom of Information Act or under any other similar statutes allowing for or requiring public disclosure. (g) The provisions of this Section shall not be construed as diminishing or replacing any civil remedy available to a municipality, taxpayer, or tax collector. (h) This Section does not apply to any municipality having a population greater than 1,000,000. (i) The changes to subsection (e) and paragraph (2) of subsection (e-10) of this Section made by Public Act 102-1144 apply to taxes due on or after August 1, 2022. The remaining changes to this Section made by Public Act 102-1144 apply on or after March 17, 2023 (the effective date of Public Act 102-1144). (j) As used in this Section: "Customer-specific information" means the name, phone number, email address, and banking information of a customer. "Customer-specific information" includes the load-shape data associated with a customer account. "Customer-specific information" does not include the tax-exempt status of the premises and the name of tax-exempt customers. "Premises-specific information" means any information, including billing and usage data, associated with a premises address that is not customer-specific information. "Premises address" includes the jurisdiction to which the address is currently coded by the public utility for municipal tax purposes.

Legislative History

(Source: P.A. 102-1144, eff. 3-17-23; 103-9, eff. 6-7-23.)