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Substituted Copy May 24, 2010
ORDINANCE NO. 8187
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV
OF PUEBLO MUNICIPAL CODE RELATING TO SALES
AND USE TAX AND EXEMPTING THEREFROM NEWLY
CONSTRUCTED 200 OR MORE MEGAWATT ELECTRIC
POWER GENERATION FACILITIES LOCATED IN AN
ENTERPRISE ZONE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate
matter being deleted, underscoring indicates matter being added)
SECTION 1.
The City Council hereby finds and determines that it would be in the best interest
of the City and its citizens to provide short term sales and use tax incentives to
encourage the construction of 200 or more megawatt electric power generation facilities
located in an enterprise zone within the City thereby increasing the City’s tax base,
availability of electric energy, and opportunities for employment for the citizens of the
City. The City Council further finds and determines that granting the exemptions to the
sales and use tax set forth in this Ordinance constitutes a reduction in the sales and use
tax imposed by Chapter 4, Title XIV of the Pueblo Municipal Code, is consistent with the
intent and purpose of §39-30-107.5, C.R.S. and makes uniform the provisions of said
Chapter 4 with the laws of the State of Colorado.
SECTION 2.
Section 14-4-76 of Chapter 4, Title XIV of the Pueblo Municipal Code, as
amended, is amended by the addition of the following new subsection (19) thereto, to
read as follows:
Sec. 14-4-76. Items exempt.
The following classes of tangible personal property are exempt from
taxation under this Chapter:
. . .
(19) Sales of tangible personal property purchased for use in the
initial construction and equipping of a new 200 or more megawatt electric
power generation facility located within an enterprise zone and constructed
on or after June 1, 2010 and prior to January 1, 2012 (“electric power
generation facility”.
Substituted Copy May 24, 2010
SECTION 3.
Section 14-4-77 of Chapter 4, Title XIV of the Pueblo Municipal Code, as
amended, is amended by the addition of the following new subsection (15) thereto, to
read as follows:
Sec. 14-4-77. Items exempt from use tax.
This tax or excise of the storage, consumption and use of tangible
personal property is hereby declared to be supplementary to the City tax on retail
sales as provided in this Chapter and shall not apply:
. . .
(15) To the storage, use or consumption of tangible personal
property used in the initial construction and equipping of a new 200 or
more megawatt electric power generation facility located within an
enterprise zone and constructed on or after June 1, 2010 and prior to
January 1, 2012 (“electric power generation facility”.
SECTION 4.
If any provision of this Ordinance or Sections of the Pueblo Municipal Code
hereby adopted or amended is determined by a court of competent jurisdiction to be
invalid, such determination shall not invalidate the remaining provisions thereof.
SECTION 5.
This Ordinance shall become effective upon final passage and approval.
INTRODUCED: May 24, 2010
BY: Vera Ortegon
COUNCILPERSON
PASSED AND APPROVED: June 14, 2010
Background Paper for Proposed
ORDINANCE
DATE: May 24, 2010 AGENDA ITEM # R-4
DEPARTMENT: Law Department
Thomas J. Florczak, City Attorney
TITLE
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF PUEBLO MUNICIPAL CODE
RELATING TO SALES AND USE TAX AND EXEMPTING THEREFROM NEWLY
CONSTRUCTED 200 OR MORE MEGAWATT ELECTRIC POWER GENERATION
FACILITIES LOCATED IN AN ENTERPRISE ZONE
ISSUE
Should the City Council approve the Ordinance granting exemption from sales and use tax
for tangible personal property purchased for or used in the construction and equipping of
200 or more megawatt electric power generation facilities located within an enterprise zone
and constructed on or after June1, 2010 and prior to January 1, 2012?
RECOMMENDATION
This Ordinance should be approved to implement the incentive commitments made in the
Annexation Agreement for the Black Hills power plant site.
BACKGROUND
The Ordinance grants sales and use tax incentives and exemptions for tangible personal
property purchased or used in the initial construction and equipping of new 200 or more
megawatt electrical power generation facilities located within an enterprise zone and
constructed between June 2, 2010 and January 1, 2012. The granting of such exemption
would encourage the construction and development of such facilities in an enterprise zone
within the City thereby increasing the City’s tax base, availability of electric energy, and
opportunities for employment for the citizens of the City.
FINANCIAL IMPACT
Under the Pre-Annexation Agreement with Black Hills/Colorado Electric Utility Company, LP
and an affiliated company (collectively "Black Hills") the Company had paid the City $4.6
million in 2009 and will pay an additional $2.9 million in 2010 (total $7.5 million) in lieu of
City sales and use taxes on the construction of the new power generation facilities located
upon the annexed property. Upon annexation, the Black Hills facilities, which are located
within the enterprise zone, will qualify for the exemption.