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HomeMy WebLinkAbout07347ORDINANCE NO. 7347 AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING THEREFROM NEWLY CON- STRUCTED 600 OR MORE - MEGAWATT ELECTRIC POWER GENERATION FACILITIES AND CLARIFYING THAT COAL AND WATER USED IN THE GENERATION OF ELECTRICITY ARE EXEMPT FROM USE TAXES BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate matter deleted, underscoring indicates matter 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 create sales and use tax economic development incentives to encourage the construction of 600 or more - megawatt electric power generation facilities 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 and makes uniform the provisions of said Chapter 4 with the laws of the State of Colorado. SECTION 2 Section 76 of Chapter 4, Title XIV of the Pueblo Municipal Code is amended by the addition of the following new subsection (17): Sales of tangible personal property purchased for use in the initial construction and equipping of a new 600 or more - megawatt electric power generation facility constructed on or after January 1, 2005 ('electric power generation facility "). This exemption shall also apply for a period of ten (10) years after such an electric power generation facility becomes operational for sales of tangible personal property purchased for use in the maintenance, repair, refurbishing, remodeling, substitution, relocation, or replacement of such an electric power generation facility, or any part thereof. a. Operational means the date the electric power generation facility is deemed by its owner or any regulatory agency with appropriate jurisdiction to be placed into commercial operation pursuant to standards published by the Federal Energy Regulatory Commission and Financial Accounting Standards Board applicable to electric power generation facilities. SECTION 3 Section 77 of Chapter 4, Title XIV of the Pueblo Municipal Code is amended by the addition of the following new subsection (13): To the storage, use or consumption of tangible personal property used in the initial construction and equipping of a new 600 or more - megawatt electric power generation facility constructed on or after January 1, 2005 (electric power generation facility "). This exemption shall also apply for a period of ten (10) years after such an electric power generation facility becomes operational to tangible personal property stored, used or consumed in the maintenance, repair, refurbishing, remodeling, substitution, relocation or replacement of such an electric power generation facility, or any part thereof. a. Operational means the date the electric power generation facility is deemed by its owner or any regulatory agency with appropriate jurisdiction to be placed into commercial operation pursuant to standards published by the Federal Energy Regulatory Commission and Financial Accounting Standards Board applicable to electric power generation facilities. SECTION 4 Subsection (7) of Section 77 of Chapter 4, Title XIV of the Pueblo Municipal Code is amended to read as follows: (7) To the storage, use or consumption of electricity, coal, coke, fuel oil, steam, water, or gas for use in processing, manufacturing, mining, refining, irrigation, telegraph, telephone and radio communication, street and railroad transportation services electric power generation, and all industrial uses; except that electricity, gas, coal, fuel oil steam, water, or coke used for lighting or space heating in these operations shall not be exempt. SECTION 5 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 6. This Ordinance shall become effective upon final passage and approval. INTRODUCED August 22, 2005 BY Michael Occhiato Councilperson APPROVED: PRES1DENT 9F CITY CPWCIL ATTESTED BY: CITY CLERK PASSED AND APPROVED September 12, 2005 119347 o e IRIEW Background Paper for Proposed ORDINANCE AGENDA ITEM # aZ O DATE: August 22, 2005 DEPARTMENT: Law Department TITLE AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING THEREFROM NEWLY CONSTRUCTED 600 OR MORE - MEGAWATT ELECTRIC POWER GENERATION FACILITIESAND CLARIFYING THAT COAL AND WATER USED IN THE GENERATION OF ELECTRICITY ARE EXEMPT FROM USE TAXES 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 600 or more - megawatt electric power generation facilities constructed on or after January 1, 2005? RECOMMENDATION Approve the Ordinance. BACKGROUND The Ordinance grants sales and use tax economic development incentives and exemptions for tangible personal property purchased or used in the initial construction and equipping of new 600 or more - megawatt electrical power generation facilities or purchased or used in remodeling, repair and replacement and for 10 years after such facilities become operational. The granting of such exemption would encourage the construction and development of such facilities 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 As applicable to Public Service Company of Colorado ( "PSCO ") annexation and construction of Unit 3 within the City, PSCO will pay to the City a single lump sum payment of $13 million upon commencement of construction of Unit 3 in lieu of sales and use taxes related to construction, installation and acquisition of Unit 3.