97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1934

 

Introduced , by Rep. Emily McAsey

 

SYNOPSIS AS INTRODUCED:
 
65 ILCS 5/11-124-5

    Amends the Illinois Municipal Code. Provides that if a water system owned by a public utility is to be acquired by a majority of the affected municipalities by eminent domain, then there must be an intergovernmental agreement in existence between the acquiring municipalities providing for the acquisition. Effective July 1, 2011.


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A BILL FOR

 

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1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Municipal Code is amended by
5changing Section 11-124-5 as follows:
 
6    (65 ILCS 5/11-124-5)
7    Sec. 11-124-5. Acquisition of water systems by eminent
8domain.
9    (a) In addition to other provisions providing for the
10acquisition of water systems or water works, whenever a public
11utility subject to the Public Utilities Act utilizes public
12property (including, but not limited to, right-of-way) of a
13municipality for the installation or maintenance of all or part
14of its water distribution system, the municipality has the
15right to exercise eminent domain to acquire all or part of the
16water system, in accordance with this Section. Unless it
17complies with the provisions set forth in this Section, a
18municipality is not permitted to acquire by eminent domain that
19portion of a system located in another incorporated
20municipality without agreement of that municipality, but this
21provision shall not prevent the acquisition of that portion of
22the water system existing within the acquiring municipality.
23    (b) Where a water system that is owned by a public utility

 

 

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1(as defined in the Public 16 Utilities Act) provides water to
2customers located in 2 or more municipalities, the system may
3be acquired by a majority either or all of the municipalities
4by eminent domain if there is in existence an intergovernmental
5agreement between the municipalities served providing for
6acquisition. If the system is to be acquired by more than one
7municipality, then there must be an intergovernmental
8agreement in existence between the acquiring municipalities
9providing for the acquisition.
10    (c) If a water system that is owned by a public utility
11provides water to customers located in one or more
12municipalities and also to customers in an unincorporated area
13and if at least 70% of the customers of the system or portion
14thereof are located within the municipality or municipalities,
15then the system, or portion thereof as determined by the
16corporate authorities, may be acquired, using eminent domain or
17otherwise, by either a municipality under subsection (a) or an
18entity created by agreement between municipalities where at
19least 70% of the customers reside. For the purposes of
20determining "customers of the system", only retail customers
21directly billed by the company shall be included in the
22computation. The number of customers of the system most
23recently reported to the Illinois Commerce Commission for any
24calendar year preceding the year a resolution is passed by a
25municipality or municipalities expressing preliminary intent
26to purchase the water system or portion thereof shall be

 

 

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1presumed to be the total number of customers within the system.
2The public utility shall provide information relative to the
3number of customers within each municipality and within the
4system within 60 days after any such request by a municipality.
5    (d) In the case of acquisition by a municipality or
6municipalities or a public entity created by law to own or
7operate a water system under this Section, service and water
8supply must be provided to persons who are customers of the
9system on the effective date of this amendatory Act of the 94th
10General Assembly without discrimination based on whether the
11customer is located within or outside of the boundaries of the
12acquiring municipality or municipalities or entity, and a
13supply contract existing on the effective date of this
14amendatory Act of the 94th General Assembly must be honored by
15an acquiring municipality, municipalities, or entity according
16to the terms so long as the agreement does not conflict with
17any other existing agreement.
18    (e) For the purposes of this Section, "system" includes all
19assets reasonably necessary to provide water service to a
20contiguous or compact geographical service area or to an area
21served by a common pipeline and include, but are not limited
22to, interests in real estate, all wells, pipes, treatment
23plants, pumps and other physical apparatus, data and records of
24facilities and customers, fire hydrants, equipment, or
25vehicles and also includes service agreements and obligations
26derived from use of the assets, whether or not the assets are

 

 

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1contiguous to the municipality, municipalities, or entity
2created for the purpose of owning or operating a water system.
3    (f) Before making a good faith offer, a municipality may
4pass a resolution of intent to study the feasibility of
5purchasing or exercising its power of eminent domain to acquire
6any water system or water works, sewer system or sewer works,
7or combined water and sewer system or works, or part thereof.
8Upon the passage of such a resolution, the municipality shall
9have the right to review and inspect all financial and other
10records, and both corporeal and incorporeal assets of such
11utility related to the condition and the operation of the
12system or works, or part thereof, as part of the study and
13determination of feasibility of the proposed acquisition by
14purchase or exercise of the power of eminent domain, and the
15utility shall make knowledgeable persons who have access to all
16relevant facts and information regarding the subject system or
17works available to answer inquiries related to the study and
18determination.
19    The right to review and inspect shall be upon reasonable
20notice to the utility, with reasonable inspection and review
21time limitations and reasonable response times for production,
22copying, and answer. In addition, the utility may utilize a
23reasonable security protocol for personnel on the
24municipality's physical inspection team.
25    In the absence of other agreement, the utility must respond
26to any notice by the municipality concerning its review and

 

 

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1inspection within 21 days after receiving the notice. The
2review and inspection of the assets of the company shall be
3over such period of time and carried out in such manner as is
4reasonable under the circumstances.
5    Information requested that is not privileged or protected
6from discovery under the Illinois Code of Civil Procedure but
7is reasonably claimed to be proprietary, including, without
8limitation, information that constitutes trade secrets or
9information that involves system security concerns, shall be
10provided, but shall not be considered a public record and shall
11be kept confidential by the municipality.
12    In addition, the municipality must, upon request,
13reimburse the utility for the actual, reasonable costs and
14expenses, excluding attorneys' fees, incurred by the utility as
15a result of the municipality's inspection and requests for
16information. Upon written request, the utility shall issue a
17statement itemizing, with reasonable detail, the costs and
18expenses for which reimbursement is sought by the utility.
19Where such written request for a statement has been made, no
20payment shall be required until 30 days after receipt of the
21statement. Such reimbursement by the municipality shall be
22considered income for purposes of any rate proceeding or other
23financial request before the Illinois Commerce Commission by
24the utility.
25    The municipality and the utility shall cooperate to resolve
26any dispute arising under this subsection. In the event the

 

 

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1dispute under this subsection cannot be resolved, either party
2may request relief from the circuit court in any county in
3which the water system is located, with the prevailing party to
4be awarded such relief as the court deems appropriate under the
5discovery abuse sanctions currently set forth in the Illinois
6Code of Civil Procedure.
7    The municipality's right to inspect physical assets and
8records in connection with the purpose of this Section shall
9not be exercised with respect to any system more than one time
10during a 5-year period, unless a substantial change in the size
11of the system or condition of the operating assets of the
12system has occurred since the previous inspection. Rights under
13franchise agreements and other agreements or statutory or
14regulatory provisions are not limited by this Section and are
15preserved.
16    The passage of time between an inspection of the utilities
17and physical assets and the making of a good faith offer or
18initiation of an eminent domain action because of the limit
19placed on inspections by this subsection shall not be used as a
20basis for challenging the good faith of any offer or be used as
21the basis for attacking any appraisal, expert, argument, or
22position before a court related to an acquisition by purchase
23or eminent domain.
24    (g) Notwithstanding any other provision of law, the
25Illinois Commerce Commission has no approval authority of any
26eminent domain action brought by any governmental entity or

 

 

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1combination of such entities to acquire water systems or water
2works.
3    (h) The provisions of this Section are severable under
4Section 1.31 of the Statute on Statutes.
5    (i) This Section does not apply to any public utility
6company that, on January 1, 2006, supplied a total of 70,000 or
7fewer meter connections in the State unless and until (i) that
8public utility company receives approval from the Illinois
9Commerce Commission under Section 7-204 of the Public Utilities
10Act for the reorganization of the public utility company or
11(ii) the majority control of the company changes through a
12stock sale, a sale of assets, a merger (other than an internal
13reorganization) or otherwise. For the purpose of this Section,
14"public utility company" means the public utility providing
15water service and includes any of its corporate parents,
16subsidiaries, or affiliates possessing a franchised water
17service in the State.
18(Source: P.A. 94-1007, eff. 1-1-07.)
 
19    Section 99. Effective date. This Act takes effect July 1,
202011.