Explanation
The Electric Industry Restructuring Act, which became effective on July 6, 1999, levied a kilowatt-hour distribution (KWH) tax to electricity end users. In accordance with Ohio Revised Codes Section 5727.81, the Division of Electricity, as a municipal utility, was to pay the KWH tax to the city's general fund for "purchaser['s]
within the municipal corporation's corporate limits." For end users falling outside the corporate limits, the KWH proceeds were to be remitted to the State of Ohio's Department of Taxation.
Ordinance 0872-2001 authorized the City Auditor to transfer 100 percent of the allowable KWH funds from the general fund to the Electricity Operating fund. In 2004 however, passage of ordinance 1702-2004 repealed certain sections of ordinance 0872-2001, thereby directing 100 percent of the KWH distribution tax moneys to remain in the general fund.
While it is now the city's intent to deposit these funds equally between the general and the electricity operating funds, there is no formal or legal mechanism to do so. Passage of this ordinance, which amends the previous two ordinances, will provide this vehicle.
FISCAL IMPACT
The actions taken herein do not change the amount of the KWH distribution tax proceeds that are available but do authorize a change in how these funds are distributed within the city. As such there is no net fiscal impact.
Title
To amend ordinances 0872-2001 and 1702-2004 to allow the City Auditor to transfer fifty percent or an amount authorized by the Director of Finance and Management of those moneys paid on an annual basis to the city's general fund for the kilowatt-hour distribution tax by the Division of Electricity to the electricity operating fund. (AMENDED BY ORD. 3050-2014 PASSED 1/26/2015)
Body
WHEREAS, Senate bill 3, which became effective July 6, 1999 established a kilowatt-hour distribution tax; and
WHEREAS, the City of Columbus, Division of Electricity, operates a municipal electric utility that is required to calculate the tax on the kilowatt hours of electricity distributed to end users located inside and outside the corporate boundaries of the City of Columbus; and
WHEREAS, Ohio Revised Code §5727.81 (A)(2) states that a municipal electric utility is required to calculate the kilowatt-hour distribution tax may retain in the municipality's general fund that portion of the tax calculated on kilowatt hours of electricity distribution to end users within the boundaries of the municipal corporation.
WHEREAS, it is the desire of the City of Columbus to transfer half of the kilowatt-hour distribution tax to the Division of Electricity, electricity operating fund and retain the balance in the city's general fund; and
WHEREAS, it is necessary to amend ordinances 0872-2001 and 1702-2004 to enable this change; and
WHEREAS, an emergency exists in the usual daily operation of the City of Columbus in that it is necessary to authorize the amendment of ordinances 0872-2001 and 1702-2004 to enable the afore-described actions in order to preserve the public health, peace, property, safety and welfare; Now therefore:
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS
SECTION 1. Notwithstanding provisions of ordinance 0872-2011 and 1702-2004,the City Auditor is hereby authorized and director to transfer 50 100 percent or an amount authorized by the Director of the Department of Finance and Management of the aforementioned funds generated by the kilowatt-hour distribution tax on an annual basis for the year 2001 from the General Fund to the Division of Electricity Operating Fund, Fund Number 550, pursuant to the authority found in Ohio Revised Code Chapter 5705.
SECTION 2. That both amendments are retroactively effective to January 1, 2011.
SECTION 3. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.