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.