HB4091 95TH GENERAL ASSEMBLY

LRB095 08900 MJR 34624 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB4091

Introduced , by Rep. Michael J. Madigan

SYNOPSIS AS INTRODUCED:

See Index

Creates the Illinois Power Authority Act. Creates the Authority as a not-for-profit State agency with a 5-member board appointed by the Governor. Grants the Authority powers relating to procurement, generation and distribution of power, and the construction and acquisition of facilities. Requires the use of Illinois coal. Sets forth other powers. Exempts the Authority from the jurisdiction of the Illinois Commerce Commission. Allows acquisition of property by eminent domain and through quick-take powers. Authorizes the acquisition or creation of not-for-profit subsidiaries. Authorizes the issuance of notes and revenue bonds. Contains provisions relating to contracts, deposit and investment of moneys, exemption from taxation, repayment of State appropriations, and equal employment opportunities. Contains other provisions. Amends the Public Utilities Act and the Eminent Domain Act to make conforming changes. Amends the Illinois Pension Code. Encourages the trustees of public employee retirement systems to invest their system's assets to the greatest extent feasible within the bounds of financial and fiduciary prudence in the Illinois Power Authority. Provides that each retirement system subject to the Code shall prepare a report to be submitted to the Governor and the General Assembly by September 1 of each year. Provides that the report shall identify investments in the Illinois Power Authority, the percentage of the system's assets invested in the Illinois Power Authority, and the actions it has undertaken to increase investments in the Illinois Power Authority. Contains a severability clause. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

STATE DEBT IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning economical power.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Illinois Power Authority Act.

Section 5. Legislative findings and declarations. The General Assembly hereby finds and declares all of the following:

(1) The health, welfare, and prosperity of all Illinois citizens require the provision of adequate, efficient, reliable, environmentally safe, and least-cost electric service at prices that accurately reflect the long-term average cost of such services and that are equitable to all citizens, and that public utilities and alternative retail electric suppliers have failed to provide electric service that meets all of these criteria.

(2) Constantly escalating and excessive costs of electricity in the State of Illinois pose a serious threat to the economic well-being, health, and safety of the residents of and the commerce and industry in the State.

(3) There is a lack of confidence that the electricity needs of residents, commerce, and industry can be supplied in a reliable, efficient, and economical manner in Illinois because ComEd and AmerenIP, AmerenCIPS, and AmerenCILCO have (i) increased their rates unreasonably and unnecessarily; (ii) repeatedly threatened bankruptcy; (iii) failed to maintain their transmission and distribution systems in a manner that ensures reliability; and (iv) in some cases, failed to restore power to customers for more than a week after an outage.

(4) These excessive costs and lack of confidence have deterred commerce and industry from locating in Illinois and have caused existing commerce and industry to seriously consider moving out of the State.

(5) The auction that ComEd and Ameren used to procure electricity resulted in rate increases of 26% to 55%, causing consumers' electric bills to skyrocket and straining the budgets of small and large ratepayers in the State. Some bill increases have been between 100% and 300%. Further substantial rate increases have been forecast by the utilities.

(6) For all the these reasons, a situation threatening the economy, health, and safety exists in the State.

(7) Dealing with this situation in an effective manner, assuring the provision of an adequate supply of electricity in a reliable, efficient, and economic manner, and retaining existing commerce and industry in and attracting new commerce and industry to the State are matters of State concern within the scope of the State's powers.

(8) These matters of State concern can best be dealt with by creating a publicly-owned power authority. Such an authority can best accomplish the purposes and objectives of this Act by generating, producing, procuring, and transmitting power to residents and businesses in the State.

The General Assembly therefore finds that it is necessary to create the Illinois Power Authority and that the goals and objectives of such Authority shall be to:

(A) prepare an annual report that identifies the least-cost mix of electric generation, energy-efficiency, and demand-response resources needed to serve Illinois residents and businesses 20 years into the future;

(B) procure least-cost supply-side and demand-side resources through competitive procurement processes to meet the electricity needs of all retail customers in the service territories of electric utilities that on January 2, 2007 served at least 100,000 customers and all other retail customers in those service territories who elect service by the Illinois Power Authority;

(C) construct and operate electric generation and cogeneration facilities that use indigenous coal and renewable resources, financed with bonds issued by the Illinois Power Authority; and

(D) sell electricity at cost to retail customers and to municipal electric utilities and rural electric cooperatives.

The Authority's coal generating facilities will use only Illinois coal and will provide safe and adequate service at rates that will be lower than the rates that would otherwise result and will facilitate investment in more beneficial energy and demand-side management alternatives, resulting in savings for the ratepayers in the State and otherwise restoring the confidence and protecting the interests of ratepayers and the economy in the State. Moreover, the competition with investor-owned utilities by the authority will result in an improved system, and reduction of future costs, a safer, more efficient, reliable, and economical supply of electric energy.

The General Assembly further declares that the Authority shall use, to the fullest extent practical, all economical means of conservation, and technologies that rely on renewable energy resources, cogeneration, and improvements in energy efficiency that will benefit the interests of the ratepayers of the State.

Section 10. Definitions. In this Act, unless a different meaning clearly appears from the context:

"Acquire" means, with respect to any right, title, or interest in or to any property, the act of taking by the exercise of the power of eminent domain, or acquisition by purchase or otherwise.

"Act" means the Illinois Power Authority Act.

"Authority" means the Illinois Power Authority.

"Board" means the board of trustees of the Authority.

"Bonds" or "notes" mean the bonds, notes, or other obligations issued by the Authority pursuant to this Act.

"Demand-side resource" means an energy efficiency or load-management measure.

"Federal government" means the United States of America and any agency or instrumentality, corporate or otherwise, of the United States of America.

"Local government" means any unit of local government, as defined in Section 1 of Article VII of the Illinois Constitution, and any school district.

"Municipal cooperative" means a municipality that owns and operates its own electric distribution system.

"Project" means an action undertaken by the Authority that:

(i) causes the Authority to issue bonds, notes, or other obligations, or shares in any subsidiary corporation;

(ii) significantly modifies the use of an asset valued at more than $1,000,000 owned by the Authority or involves the sale, lease, or other disposition of such an asset; or

(iii) commits the Authority to a contract or agreement with a total consideration of greater than $1,000,000 and does not involve the day-to-day operations of the Authority.

"Prudent industry practices" at a particular time means any of the practices, methods, and acts that, in the exercise of reasonable judgment in light of the facts (including but not limited to the practices, methods, and acts engaged in or approved by a significant portion of the electrical utility industry, as the case may be, prior thereto) known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. Prudent industry practices are not intended to be limited to the optimum practice, method, or act, to the exclusion of all others, but rather to be a spectrum of possible practices, methods, or acts. In evaluating whether any matter conforms to prudent industry practices, the parties shall take into account the fact that the Authority is a State agency with statutory duties and responsibilities.

"Real property" means lands, structures, franchises, and interests in land, including lands under water and riparian rights, and all other things and rights usually included within that term, and includes also all interests in such property less than full title, such as easements, rights-of-way, uses, leases, licenses, and all other incorporeal hereditaments and every estate, interest, or right, legal or equitable, including terms for years and liens thereon by way of judgments, mortgages, or otherwise, and also all claims for damages for that real estate.

"Renewable energy resources" includes energy from wind, solar thermal energy, photovoltaic cells and panels, dedicated crops grown for energy production and organic waste biomass, hydropower that does not involve new construction or significant expansion of hydropower dams, and other alternative sources of environmentally preferable energy. "Renewable energy resources" does not include, however, energy from the incineration, burning, or heating of waste wood, tires, garbage, general household, institutional, and commercial waste, industrial lunchroom or office waste, landscape waste, or construction or demolition debris.

"Rural electric cooperative" means an electric cooperative as defined in Section 3.4 of the Electric Supplier Act.

"Security" means any note, stock (whether common or preferred), bond, debenture, evidence of indebtedness, transferable share, voting-trust certificate, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase any of the foregoing.

"State" means the State of Illinois.

"State agency" means any board, authority, agency, department, commission, public corporation, body politic, or instrumentality of the State.

"Supply-side resource" means an electric generation or cogeneration facility.

"Trustees" means the trustees of the Authority appointed pursuant to Section 20 of this Act.

Section 15. Illinois Power Authority.

(a) For the purpose of effectuating the policy declared in Section 5 of this Act, there is hereby created a State agency to be known as the Illinois Power Authority, which shall be a body corporate and politic, a political subdivision of the State, exercising governmental and public powers, perpetual in duration, capable of suing and being sued, and having a seal, and which shall have the powers and duties enumerated in this Act, together with such others conferred upon it by law.

(b) The Authority shall report annually to the Governor and the General Assembly upon its operations and transactions. The annual report shall identify the Authority by its statutory name, and include a letter of transmittal in the report to the Governor and the General Assembly. The annual report shall also include, but not be limited to, the following: (1) the amount of power and energy produced by each project facility; (2) the quantity and price of any electricity procured by the Authority under wholesale contracts; (3) the kilowatt-hour sales by project facility and by customer, including all sales to investor-owned electric corporations, municipal electric systems, and rural electric cooperatives; (4) the revenues and costs as allocated by the Authority for each project facility; (5) the busbar cost for each facility; (6) the accumulated provision for depreciation for each project facility; and (7) basic financial and operating information specifically detailed for the reporting year and including, but not limited to, income and expense statements, balance sheets, and changes in financial position, all in accordance with generally accepted accounting principles, debt structure, and a summary of funds on a cash basis. The requirement to provide information pursuant to this subsection is not intended to affect the Authority's responsibilities or obligations under this Act.

(c) The Authority is not created or organized, and its operations shall not be conducted, for the purpose of making a profit. No part of the revenues or assets of the Authority shall inure to the benefit of or be distributable to any of its trustees or officers or any other private persons, except as provided in this Act for actual services rendered.

Section 20. Trustees.

(a) The Authority shall consist of 5 trustees, each of whom shall serve respectively for terms of one, 2, 3, 4, or 5 years. Each trustee shall hold office until a successor has been appointed and qualified. The Governor shall appoint all trustees. One appointee shall serve an initial term of one year; the second appointee shall serve an initial term of 2 years; the third appointee shall serve an initial term of 3 years; the fourth appointee shall serve an initial term of 4 years; and the fifth appointee shall serve an initial term of 5 years. Thereafter, all terms shall be for a period of 5 years. Three trustees shall be attorneys, certified public accountants, or professional engineers and shall each have at least 10 years of experience. Two trustees must have at least 10 years of experience in one of the following fields: (i) economics, (ii) finance, (iii) accounting, (iv) physical or natural sciences, (v) natural resources, or (vi) environmental studies.

(b) At the expiration of the term of each trustee, the Governor shall appoint a successor, who shall hold office for a term of 5 years. In the event of a vacancy occurring in the office of the trustee by death, resignation, or otherwise, the Governor shall appoint a successor, who shall hold office for the unexpired term. Three trustees constitute a quorum for the purpose of organizing the Authority and conducting its business.

(c) The trustees shall receive an annual salary of $50,000 or an amount set by the Compensation Review Board, whichever is greater. Each shall be entitled to reimbursement for reasonable expenses in the performance of duties assigned under this Act.

(d) Notwithstanding the provisions of any other law, no trustee, officer, or employee of the State, any State agency, or any local government that is appointed a trustee shall be deemed to have forfeited or shall forfeit his or her office or employment by reason of his or her acceptance of a trusteeship on the Authority, his or her service thereon, or his or her employment therewith.

(e) No trustee shall be employed by a public utility, independent power producer, power marketer, alternative retail electric supplier, or the Authority while serving as a trustee for 2 years prior to appointment or for 2 years after he or she leaves his or her position as a trustee.

(f) Trustees shall be prohibited from all of the following while serving as a trustee and for 2 years prior to the appointment or for 2 years after he or she leaves his or her position as a trustee:

(1) Owning or holding, directly or indirectly, 5% or more of the voting capital stock of the public utility, independent power producer, power marketer, or alternative retail electric supplier.

(2) Being in any chain of successive ownership of 5% or more of the voting capital stock of any public utility, independent power producer, power marketer, or alternative retail electric supplier.

(3) Receiving any form of compensation, fee, payment, or other consideration from a public utility, independent power producer, power marketer, or alternative retail electric supplier, including legal fees, consulting fees, bonuses, or other sums.

Section 25. Officers and employees; expenses. The trustees shall choose from among their own number a chairperson and vice-chairperson. They shall from time to time select such officers and employees, including a chief executive officer, and such engineering, marketing, and legal officers and employees, as they may require for the performance of their duties and shall prescribe the duties and compensation of each officer and employee. They shall adopt by-laws and rules and regulations suitable to the purposes of this Act. As long as and to the extent that the Authority is dependent upon appropriations for the payment of its expenses, it shall incur no obligations for salary, office, or other expenses prior to the making of appropriations adequate to meet those expenses.

Section 30. General powers of the Authority.

(a) The Authority is authorized to procure power and energy through a competitive solicitation process and to generate its own power and energy.

(b) The Authority is authorized to construct, improve, and rehabilitate throughout Illinois (1) coal-fired projects that it deems necessary or desirable to contribute to the adequacy, economy, and reliability of the supply of electric power and energy; (2) cogeneration projects to save fuel and (3) other Illinois facilities using new energy technologies or renewable energy resources that in its judgment are necessary (i) to supply low-cost power and energy to residential and commercial customers; (ii) to supply industrial customers that allow construction of new generation facilities on their property or expansion of existing facilities on their property if heat, power, or energy is made available to such industrial customers; and (iii) to supply the future needs of municipal electric and rural electric cooperative customers.

(c) The first generating facility that the Authority constructs, acquires, or completes shall be a coal-fired project that is specified under item (1) of subsection (b) of this Section. The Authority is authorized to construct, acquire, and complete coal generating, transmission, and related facilities pursuant to this Section that it deems necessary or desirable to assist in maintaining an adequate and dependable supply of electricity; except that (i) only coal from the State of Illinois shall be used at any coal generating facility that is owned or maintained by the Authority and (ii) the price to be paid pursuant to any agreement entered into with respect to the purchase, appropriation, or condemnation of any completed or partially completed facility, as the case may be, shall be subject to the approval of a majority of the trustees. The Authority is further authorized to make energy efficiency services, clean energy technologies, and power and energy available throughout the State. The acquisition of completed or partially completed facilities shall be after public hearing.

(d) Except as otherwise limited by this Act, the Authority shall have all of the powers necessary or convenient to carry out the purposes and provisions of this Act, including without limitation, the power:

(1) To sue and be sued in all courts and to participate in actions and proceedings, whether judicial, administrative, arbitrative, or otherwise.

(2) To have a corporate seal, and to alter that seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner.

(3) To appoint officers, agents, and employees, without regard to the Personnel Code or any other personnel or civil service law, rule, or regulation of the State and in accordance with guidelines adopted by the Authority, prescribe their duties and qualifications, and fix and pay their compensation.

(4) To purchase, receive, take by grant, gift, devise, bequest, or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use, and otherwise deal in and with, real or personal property whether tangible or intangible, or any interest therein, within the State.

(5) To acquire real or personal property, whether tangible or intangible, including without limitation property rights, interests in property, franchises, obligations, contracts, and debt and equity securities, by the exercise of the power of eminent domain; except that any real property acquired by the exercise of the power of eminent domain must be located within the State.

(6) To sell, convey, lease, exchange, transfer, abandon, or otherwise dispose of, or mortgage, pledge, or create a security interest in, any of its assets, properties, or any interest therein, wherever situated.

(7) To purchase, take, receive, subscribe for, or otherwise acquire, hold, make a tender offer for, vote, employ, sell, lend, lease, exchange, transfer, or otherwise dispose of, mortgage, pledge, or grant a security interest in, use and otherwise deal in and with, bonds and other obligations, shares, or other securities (or interests therein) issued by others, whether engaged in a similar or different business or activity.

(8) To make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the Authority under this Act, including contracts with any person, firm, corporation, local government, State agency, or other entity, and all State agencies and all local governments are hereby authorized to enter into and do all things necessary to perform any such agreement, contract, or other instrument with the Authority.

(9) To borrow money at such rate or rates of interest as the Authority may determine, issue its notes, bonds, or other obligations to evidence that indebtedness, and secure any of its obligations by mortgage or pledge of any of its property or any interest therein, wherever situated.

(10) To arrange for guarantees of its bonds, notes, or other obligations by the federal government or by any private insurer or otherwise, and to pay any premiums therefor.

(11) To issue its bonds or notes or other obligations whether or not the income therefrom is exempt from federal income taxation.

(12) To purchase bonds, notes, or other obligations of the Authority at such price or prices as the Authority may determine.

(13) To lend money, invest and reinvest its funds, and take and hold real and personal property as security for the payment of funds loaned or invested.

(14) To procure insurance against any loss in connection with its properties or operations in such amount or amounts and from such insurers, including the federal government, as it may deem necessary or desirable, and to pay any premiums therefor.

(15) To negotiate and enter into agreements with trustees or receivers appointed by United States bankruptcy courts or federal district courts or in other proceedings involving adjustment of debts and authorize legal counsel for the Authority to appear in any such proceedings.

(16) To file a petition under Chapter 9 of Title 11 of the United States Bankruptcy Code or take other similar action for the adjustment of its debts.

(17) To enter into agreements to purchase power from the State, any State agency, any local government, any private entity, or any other available source at such price or prices as may be negotiated for the purchase of that power and on such terms as are consistent with the purposes of this Act.

(18) To enter into management agreements for the operation of any of the property or facilities owned by the Authority.

(19) To transfer any asset of the Authority to one or more municipal or rural electric agencies or cooperatives, for such consideration and upon such terms as the Authority may determine to be in the best interest of the citizens of the State of Illinois.

(20) Subject to subsection (g) of Section 60 of this Act and after holding public hearings upon reasonable public notice, with at least one hearing to be held in Cook County and at least one in Sangamon County, to fix rates and charges for the furnishing or rendition of electric power or of any related service at the lowest level consistent with sound fiscal and operating practices of the Authority and that provide for safe and adequate service.

(21) To enter upon any lands and within any building whenever in its judgment it may be necessary for the purpose of making surveys and examinations to accomplish any purpose authorized by this Act.

(22) To enter into agreements to pay annual sums in lieu of taxes to any local government with respect to any real property that is owned by the Authority and is located in that local government.

(23) To maintain an office or offices at such place or places in the State as it may determine.

(24) To make any inquiry, investigation, survey, or study that the Authority may deem necessary to enable it effectively to carry out the provisions of this Act.

(25) To adopt, revise, amend, and repeal rules and regulations with respect to its operations, properties, and facilities as may be necessary or convenient to carry out the purposes of this Act, subject to the provisions of the Illinois Administrative Procedure Act.

Section 35. Specific powers. Without limiting the generality of the powers conferred upon the Authority by Section 30 of this Act, the Authority shall have the specific power:

(1) To acquire, construct, improve, rehabilitate, maintain, and operate such generating, transmission, and related facilities permitted under this Act as the Authority deems necessary or desirable to maintain an adequate and dependable supply of electric power within the service area.

(2) To determine the location, type, size, construction, lease, purchase, ownership, acquisition, use, and operation of any generating, transmission, or other related facility, except that in making such determinations relating to electric power facilities the Authority shall give primary consideration to the construction of cogeneration and other high-efficiency facilities and implementation of energy conservation and load management programs.

(3) To proceed with the physical construction or completion of any generating, transmission, or related facility.

(4) To apply to the appropriate agencies and officials of the federal and State governments for such licenses, permits, or approval of its plans or projects as it may deem necessary or advisable, and to accept such licenses, permits, or approvals as may be tendered to it by such agencies or officials, upon such terms and conditions as it may deem appropriate.

(5) To institute suit, or to apply to any legislative body for legislation, or to take such other action as it may deem necessary or advisable in the furtherance of the purposes of this Act and for the protection of its rights if for any reason the Authority shall fail to secure any such license, permit, or approval as it may deem necessary or advisable.

(6) To study means of maintaining and attracting commerce and industry to the State.

(7) To develop programs and policies designed to implement net-metering, to promote energy efficiency and demand-response measures to shift demand from periods of high demand to periods of low demand, and to facilitate interconnection of (i) solar and wind generating equipment; (ii) farm waste electric generating equipment; and (iii) cogeneration facilities.

(8) To develop, with public participation, a comprehensive least-cost analysis of demand for electricity in Illinois that considers practical and economical use of conservation, renewable energy resources, and cogeneration for providing service to its customers.

(9) To cooperate with and to enter into contractual arrangements with private companies, public entities, any schools and universities, and municipal and rural electric cooperatives:

(i) with respect to the construction and operation of facilities by the Authority and the sale of all or part of the output therefrom;

(ii) with respect to the construction, completion, acquisition, ownership, and operation of generating facilities, fuel docks, sidings, loading or unloading equipment, storage facilities, and other subsidiary facilities and the disposition of the output of such generating facilities; and

(iii) with respect to the construction, acquisition, ownership, operation, and use of transmission facilities.

(10) To cooperate with and to enter into contractual arrangements with local governments with respect to the construction, improvement, rehabilitation, ownership, and operation of generating facilities.

(11) To cooperate with and to enter into contractual arrangements, in the discretion of the Authority, with the Capital Development Board in connection with the planning, siting, development, construction, operation, and maintenance of generating facilities of the Authority.

Section 40. Acquisition of property by condemnation.

(a) In light of the importance of providing clean, affordable, and reliable power for everyone in the State of Illinois and in furtherance of the goals of this Act, the Authority has the discretionary authorities as set forth in this Section.

(b) In connection with the acquisition, development, and operation of electric generating facilities, the Authority has the right to enter upon, take, or damage private property or any interest therein by exercise of the power of condemnation, including quick-take powers, in the manner provided for under the Eminent Domain Act (735 ILCS 30/), that are necessary and convenient for the operations of the Authority and its subsidiaries. The operations of the Authority and any of its subsidiaries are hereby recognized and declared to be affected with a public interest and all of the property used in those operations is hereby recognized and declared to be a public use.

Section 50. Notes of the Authority. The Authority is authorized from time to time to issue its negotiable notes in conformity with applicable provisions of the Uniform Commercial Code for any corporate purpose and to refund from time to time any notes by the issuance of new notes, whether the notes to be refunded have or have not matured. The Authority may issue notes partly to refund notes or to discharge other obligations then outstanding and partly for any other corporate purpose of the Authority. The notes may be authorized, sold, executed, and delivered in the same manner as bonds. Any resolution authorizing notes of the Authority or any issue thereof may contain any provisions that the Authority is authorized to include in any resolution authorizing bonds of the Authority or any issue thereof, and the Authority may include in any notes any terms, covenants, or conditions that it is authorized to include in any bonds.

Section 55. Contracts for the sale of electricity from facilities owned by the Authority.

(a) Contracts for the sale, transmission, and distribution of power and energy generated by the Authority's projects shall provide for the effectuation of the policies set forth in this Act relating to its projects and shall ensure recovery of:

(1) All operating and maintenance expenses of the projects.

(2) Interest on and amortization and reserve charges sufficient within 50 years after the date of issuance to retire the bonds of the Authority issued for the projects.

(b) The contracts shall also provide that:

(1) Notwithstanding any provisions in the Public Utilities Act, wholesale purchasers of power and energy from an Authority facility shall sell the power and energy to retail customers at the same price paid to purchase power and energy from the Authority.

(2) The purchaser shall make timely payment on all bills rendered by the Authority.

(3) Violation of these contract terms, as well as such other terms as the Authority may specify shall result in cancellation and termination of the contract.

(4) Such other terms not inconsistent with the provisions and policy of this Act as the Authority may deem advisable.

(c) Contracts negotiated by the Authority as provided in subsections (a) and (b) of this Section shall be entered into and executed as follows:

(1) After agreement upon the terms of the contracts has been reached by the Authority and its co-party or co-parties, the Authority shall promptly transmit a copy of the proposed contract to the Governor, the Secretary of State, the Attorney General, the Treasurer, the Comptroller, and the legislative leaders of the General Assembly and shall hold a public hearing or hearings upon the terms thereof. At least 30 days' notice of the hearing shall be given by publication once in each week during such period in each of 6 newspapers within the State to be selected by the Authority. Copies of proposed contracts shall be available for public inspection during that period of 30 days at the office or offices of the Authority and at such other places throughout the State as it may designate.

(2) Following the public hearing, the Authority shall reconsider the terms of the proposed contract or contracts and shall negotiate such changes and modifications in the contract or contracts as the Authority deems necessary or advisable.

(3) When the contract or contracts are finally agreed upon in terms satisfactory to the Authority and its co-party or co-parties, and that the Authority believes to be in the public interest, the Authority shall thereupon report the proposed contract or contracts, together with its recommendations and the record of the public hearings thereon, to the Governor, the Secretary of State, the Attorney General, the Treasurer, the Comptroller, and the General Assembly.

(4) The Attorney General shall review the contract to ensure that it complies with all applicable laws and prudent industry practices. If the Attorney General determines that the contract meets all applicable laws or prudent industry practices, then the trustees shall approve the contract.

(5) The contract, after receiving the required number of votes by the trustees, shall be executed by the chairperson and secretary of the Authority and shall come into full force and effect and be binding upon the Authority and all other parties thereto in accordance with its terms.

Section 60. Revenue bonds.

(a) The Authority shall have the continuing power to issue revenue bonds, notes, or other evidences of indebtedness in an aggregate amount not to exceed $4,000,000,000 for the purpose of developing, constructing, acquiring, or improving projects for acquiring and improving any property necessary and useful in connection therewith, and for the purposes of the Employee Ownership Assistance Act. The bonds must be issued under the supervision of the Illinois Finance Authority, as set forth under Section 825-13 of the Illinois Finance Authority Act. For the purpose of evidencing the obligations of the Authority to repay any money borrowed, the Authority may, pursuant to resolution, from time to time issue and dispose of its interest bearing revenue bonds, notes, or other evidences of indebtedness and may also from time to time issue and dispose of such bonds, notes, or other evidences of indebtedness to refund, at maturity, at a redemption date or in advance of either, any revenue bonds, notes, or other evidences of indebtedness pursuant to redemption provisions or at any time before maturity. All such revenue bonds, notes, or other evidences of indebtedness shall be payable solely from the revenues or income to be derived from loans made with respect to projects, from the leasing or sale of the projects, or from any other funds available to the Authority for such purposes, including, when so provided by ordinance of the Authority authorizing the issuance of revenue bonds or notes. The revenue bonds, notes, or other evidences of indebtedness may bear such date or dates, may mature at such time or times not exceeding 40 years from their respective dates, may bear interest at such rate or rates not exceeding the maximum rate permitted by the Bond Authorization Act, may be in such form, may carry such registration privileges, may be executed in such manner, may be payable at such place or places, may be made subject to redemption in such manner and upon such terms, with or without premium as is stated on the face thereof, may be authenticated in such manner, and may contain such terms and covenants as may be provided by an applicable resolution.

(b) The holder or holders of any revenue bonds, notes, or other evidences of indebtedness issued by the Authority may bring suits at law or proceedings in equity to compel the performance and observance by any corporation or person or by the Authority or any of its agents or employees of any contract or covenant made with the holders of such revenue bonds, notes, or other evidences of indebtedness, to compel such corporation, person, the Authority, and any of its agents or employees to perform any duties required to be performed for the benefit of the holders of any such revenue bonds, notes, or other evidences of indebtedness by the provision of the resolution authorizing their issuance and to enjoin such corporation, person, the Authority, and any of its agents or employees from taking any action in conflict with any such contract or covenant.

(c) If the Authority fails to pay the principal of or interest on any of the revenue bonds or premium, if any, as the same become due, a civil action to compel payment may be instituted in the appropriate circuit court by the holder or holders of the revenue bonds on which such default of payment exists or by an indenture trustee acting on behalf of such holders. Delivery of a summons and a copy of the complaint to the Chairperson of the Board shall constitute sufficient service to give the circuit court jurisdiction of the subject matter of such a suit and jurisdiction over the Authority and its officers named as defendants for the purpose of compelling such payment. Any case, controversy, or cause of action concerning the validity of this Act relates to the revenue of the State of Illinois.

(d) Notwithstanding the form and tenor of any such revenue bonds, notes, or other evidences of indebtedness and in the absence of any express recital on the face of any such revenue bond, note, or other evidence of indebtedness that it is nonnegotiable, all such revenue bonds, notes, and other evidences of indebtedness shall be negotiable instruments. Pending the preparation and execution of any such revenue bonds, notes, or other evidences of indebtedness, temporary revenue bonds, notes, or evidences of indebtedness may be issued as provided by ordinance.

(e) To secure the payment of any or all of such revenue bonds, notes, or other evidences of indebtedness, the revenues to be received by the Authority from a lease agreement or loan agreement shall be pledged, and, for the purpose of setting forth the covenants and undertakings of the Authority in connection with the issuance thereof and the issuance of any additional revenue bonds, notes, or other evidences of indebtedness payable from such revenues, income, or other funds to be derived from projects, the Authority may execute and deliver a mortgage or trust agreement. A remedy for any breach or default of the terms of any such mortgage or trust agreement by the Authority may be by mandamus proceedings in the appropriate circuit court to compel the performance and compliance therewith, but the trust agreement may prescribe by whom or on whose behalf the action may be instituted.

(f) The revenue bonds or notes shall be secured as provided in the authorizing ordinance which may, notwithstanding any other provision of this Act, include in addition to any other security a specific pledge or assignment of and lien on or security interest in any or all revenues or money of the Authority from whatever source which may by law be used for debt service purposes and a specific pledge or assignment of and lien on or security interest in any funds or accounts established or provided for by ordinance of the Authority authorizing the issuance of such revenue bonds or notes.

(g) The State of Illinois pledges to and agrees with the holders of the revenue bonds and notes of the Authority issued pursuant to this Section that the State will not limit or alter the rights and powers vested in the Authority by this Act so as to impair the terms of any contract made by the Authority with such holders or in any way impair the rights and remedies of such holders until such revenue bonds and notes, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of such holders, are fully met and discharged. The Authority is authorized to include these pledges and agreements of the State in any contract with the holders of revenue bonds or notes issued pursuant to this Section.

(h) In the event that the Authority determines that monies of the Authority will not be sufficient for the payment of the principal of and interest on its bonds during the next State fiscal year, the Chairperson, as soon as practicable, shall certify to the Governor the amount required by the Authority to enable it to pay such principal of and interest on the bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. This subsection (h) shall apply only to any bonds or notes as to which the Authority shall have determined, in the resolution authorizing the issuance of the bonds or notes, that this subsection shall apply. Whenever the Authority makes such a determination, that fact shall be plainly stated on the face of the bonds or notes and that fact shall also be reported to the Governor. In the event of a withdrawal of moneys from a reserve fund established with respect to any issue or issues of bonds of the Authority to pay principal or interest on those bonds, the Chairperson of the Authority, as soon as practicable, shall certify to the Governor the amount required to restore the reserve fund to the level required in the resolution or indenture securing those bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. The Authority shall obtain written approval from the Governor for any bonds and notes to be issued under this Section.

Section 65. State and local governments not liable on bonds or notes. The bonds, notes, and other obligations of the Authority shall not be a debt of the State or of any local government, and neither the State nor any local government shall be liable thereon. The Authority shall not have the power to pledge the credit, the revenues, or the taxing power of the State or of any local government, and neither the credit, the revenues, nor the taxing power of the State or of any local government shall be, or shall be deemed to be, pledged to the payment of any bonds, notes, or other obligations of the Authority. Each evidence of indebtedness of the Authority, including the bonds and notes of the Authority, shall contain a clear and explicit statement of the provisions of this Section.

Section 70. Deposit and investment of moneys of the Authority.

(a) All moneys of the Authority from whatever source derived, except as otherwise authorized or provided in this Act, shall be paid to the treasurer of the Authority and shall be deposited forthwith in a bank or banks designated by the Authority. The moneys in such accounts shall be withdrawn on the order of such person or persons as the Authority may authorize.

(b) The Authority may contract with holders of any of its bonds or notes, or any trustee therefor, as to the custody, collection, securing, investment, and payment of any moneys of the Authority and of any moneys held in trust or otherwise for the payment of bonds or notes, and to carry out any such contract. Moneys held in trust or otherwise for the payment of bonds or notes or in any way to secure bonds or notes and deposits of such moneys and all banks and trust companies in the State are authorized to give such security for such deposits.

(c) Subject to agreements with noteholders and bondholders or any trustee therefor, the Authority shall prescribe a uniform system of accounts in accordance with generally accepted accounting principles.

Section 75. Agreement of the State.

(a) The State of Illinois pledges and agrees with the holders of any obligations issued under this Act and the parties to any contracts with the Authority that the State will not limit or alter the rights vested in the Authority until those obligations together with the interest thereon are fully met and discharged and those contracts are fully performed on the part of the Authority, except that nothing in this Act precludes such limitation or alteration if adequate provision is made by law for the protection of the holders of the obligations of the Authority, or those entering into such contracts with the Authority. The Authority as agent for the State is authorized to include this pledge and agreement by the State in all agreements with the holders of such obligations and in all such contracts.

(b) Nothing in this Act shall be construed as diminishing or enlarging any valid existing rights under any license heretofore issued pursuant to the provisions of the Federal Power Act.

Section 80. Exemption from taxation.

(a) It is hereby found and declared that the operation of the Authority is primarily for the benefit of the people of the State of Illinois, for the improvement of their health, welfare, and prosperity, and has a public purpose, and the Authority shall be regarded as performing an essential governmental function in carrying out the provisions of this Act.

(b) The Authority shall not be required to pay taxes or assessments upon any of the property acquired or controlled by it or upon its activities in the operation and maintenance thereof or upon income derived therefrom, except that nothing in this Act shall prevent the Authority from entering into agreements to make payments in lieu of taxes with the governing bodies of local governments with respect to property acquired for any project when those payments are based solely on the value of real property without regard to any improvement thereof by the Authority.

(c) The securities and other obligations issued by the Authority, their transfer, and the income therefrom shall, at all times, be free from taxation by the State or any local government, except for estate and gift taxes.

(d) The securities and other obligations issued by the Authority, their transfer, and the income therefrom shall, at all times, be free from taxation within this State. It is furthermore declared that the object and purpose of this Act is that such projects shall be in all respects self-supporting.

Section 85. Repayment of State appropriations. All appropriations made by the State to the Authority shall be treated as advances by the State to the Authority, and shall be repaid to the State without interest either out of the proceeds of bonds issued by the Authority pursuant to this Act, or by the delivery of non-interest bearing bonds of the Authority to the State for all or any part of such advances, or out of excess revenues of the Authority, at such times and on such conditions as the State and the Authority mutually may agree upon.

Section 90. ICC lacks jurisdiction. The generation, transmission, distribution, and sale by the Authority of electricity authorized by this Act and any other function or duty of the Authority are not subject to the Public Utilities Act or to the jurisdiction of the Illinois Commerce Commission.

Section 95. Equal employment opportunity and minority-owned and women-owned business enterprise programs.

(a) All contracts entered into by the Authority pursuant to this Act of whatever nature and all documents soliciting bids or proposals therefor shall contain or make reference to the following provisions:

(1) The contractor will not discriminate against employees or applicants for employment because of race, creed, color, national origin, sex, age, disability, or marital status, and will undertake or continue existing programs of affirmative action to ensure that minority group persons and women are afforded equal opportunity without discrimination. Such programs shall include, but not be limited to, recruitment, employment, job assignment, promotion, upgrading, demotion, transfer, layoff, termination, rates of pay or other forms of compensation, and selection for training and retraining, including apprenticeship and on-the-job training.

(2) At the request of the Authority, the contractor shall request each employment agency, labor union, or authorized representative of workers with which it has a collective bargaining or other agreement or understanding and that is involved in the performance of the contract with the Authority to furnish a written statement that such employment agency, labor union, or representative shall not discriminate because of race, creed, color, national origin, sex, age, disability, or marital status and that such union or representative will cooperate in the implementation of the contractor's obligations under this Act.

(3) The contractor shall state, in all solicitations or advertisements for employees placed by or on behalf of the contractor in the performance of the contract with the Authority, that all qualified applicants will be afforded equal employment opportunity without discrimination because of race, creed, color, national origin, sex, age, disability, or marital status.

(4) The contractor will include the provisions of paragraphs (1) through (3) of this subsection in every subcontract or purchase order in such a manner that the provisions will be binding upon each subcontractor or vendor as to its work in connection with the contract with the Authority.

(b) The Authority shall establish measures, procedures, and guidelines to ensure that contractors and subcontractors undertake meaningful programs to employ and promote qualified minority group members and women. The procedures may require, after notice in a bid solicitation, the submission of a minority and women workforce utilization program prior to the award of any contract, or at any time thereafter, and may require the submission of compliance reports relating to the operation and implementation of any workforce utilization program. The Authority may take appropriate action, including the imposition of sanctions for non-compliance, to effectuate the provisions of this Section and shall be responsible for monitoring compliance with this Act.

(c) In the performance of projects pursuant to this Act, minority-owned and women-owned business enterprises shall be given the opportunity for meaningful participation. The Authority shall establish quantifiable standards and measures and procedures to secure meaningful participation and identify those contracts and items of work for which minority-owned and women-owned business enterprises may best bid to actively and affirmatively promote and assist their participation in projects, so as to facilitate the award of a fair share of contracts to such enterprises; except that nothing in this Act shall be construed to limit the ability of the Authority to assure that qualified minority-owned and women-owned business enterprises may participate in the program.

The provisions of this subsection shall not be construed to limit the ability of any minority business enterprise to bid on any contract.

(d) In order to implement the requirements and objectives of this Section, the Authority shall establish procedures to monitor contractors compliance with provisions hereof, provide assistance in obtaining competing qualified minority-owned and women-owned business enterprises to perform contracts proposed to be awarded, impose contractual sanctions for non-compliance, and take other appropriate measures to improve the access of minority-owned and women-owned business enterprises to these contracts.

Section 100. Authority subject to other Acts. The Authority is subject to the provisions of the Open Meetings Act and the Freedom of Information Act.

Section 105. Court proceedings; venue.

(a) The venue of any action or proceeding questioning the validity of this Act shall be in the county in which the principal office of the Authority is located.

(b) If any party appeals an award of compensation for the taking by the Authority of stock or assets, that party shall post a bond in such amount, if any, as the court of competent jurisdiction shall deem appropriate to adequately protect the interests of the other party under all the circumstances.

(c) All tort claims are subject to the Court of Claims Act.

Section 905. The Illinois Pension Code is amended by changing Section 1-109.1 as follows:

(40 ILCS 5/1-109.1) (from Ch. 108 1/2, par. 1-109.1)

Sec. 1-109.1. Allocation and Delegation of Fiduciary Duties.

(1) Subject to the provisions of Section 22A-113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may:

(a) Appoint one or more investment managers as fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and

(b) Allocate duties among themselves and designate others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.

(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not transfer its investment authority, nor transfer the assets of the fund to any other person or entity for the purpose of consolidating or merging its assets and management with any other pension fund or public investment authority, unless the board resolution authorizing such transfer is submitted for approval to the contributors and pensioners of the fund at elections held not less than 30 days after the adoption of such resolution by the board, and such resolution is approved by a majority of the votes cast on the question in both the contributors election and the pensioners election. The election procedures and qualifications governing the election of trustees shall govern the submission of resolutions for approval under this paragraph, insofar as they may be made applicable.

(3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted.

(4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $2,000,000,000 and is a "minority owned business" or "female owned business" as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act.

It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems to use emerging investment managers in managing their system's assets to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation of emerging investment managers in investment opportunities afforded by those retirement systems.

Each retirement system subject to this Code shall prepare a report to be submitted to the Governor and the General Assembly by September 1 of each year. The report shall identify the emerging investment managers used by the system, the percentage of the system's assets under the investment control of emerging investment managers, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises.

The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.

(5) For the purposes of this Code, "Illinois Power Authority" means the Authority created under the Illinois Power Authority Act.

It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems to invest their system's assets to the greatest extent feasible within the bounds of financial and fiduciary prudence in the Illinois Power Authority.

Each retirement system subject to this Code shall prepare a report to be submitted to the Governor and the General Assembly by September 1 of each year. The report shall identify investments in the Illinois Power Authority, the percentage of the system's assets invested in the Illinois Power Authority, and the actions it has undertaken to increase investments in the Illinois Power Authority.

(Source: P.A. 94-471, eff. 8-4-05.)

Section 910. The Public Utilities Act is amended by changing Section 3-105 as follows:

(220 ILCS 5/3-105) (from Ch. 111 2/3, par. 3-105)

Sec. 3-105. Public utility. "Public utility" means and includes, except where otherwise expressly provided in this Section, every corporation, company, limited liability company, association, joint stock company or association, firm, partnership or individual, their lessees, trustees, or receivers appointed by any court whatsoever that owns, controls, operates or manages, within this State, directly or indirectly, for public use, any plant, equipment or property used or to be used for or in connection with, or owns or controls any franchise, license, permit or right to engage in:

a. the production, storage, transmission, sale, delivery or furnishing of heat, cold, power, electricity, water, or light, except when used solely for communications purposes;

b. the disposal of sewerage; or

c. the conveyance of oil or gas by pipe line.

"Public utility" does not include, however:

1. public utilities that are owned and operated by any political subdivision, public institution of higher education or municipal corporation of this State, or public utilities that are owned by such political subdivision, public institution of higher education, or municipal corporation and operated by any of its lessees or operating agents;

2. water companies which are purely mutual concerns, having no rates or charges for services, but paying the operating expenses by assessment upon the members of such a company and no other person;

3. electric cooperatives as defined in Section 3-119;

4. the following natural gas cooperatives:

(A) residential natural gas cooperatives that are not-for-profit corporations established for the purpose of administering and operating, on a cooperative basis, the furnishing of natural gas to residences for the benefit of their members who are residential consumers of natural gas. For entities qualifying as residential natural gas cooperatives and recognized by the Illinois Commerce Commission as such, the State shall guarantee legally binding contracts entered into by residential natural gas cooperatives for the express purpose of acquiring natural gas supplies for their members. The Illinois Commerce Commission shall establish rules and regulations providing for such guarantees. The total liability of the State in providing all such guarantees shall not at any time exceed $1,000,000, nor shall the State provide such a guarantee to a residential natural gas cooperative for more than 3 consecutive years; and

(B) natural gas cooperatives that are not-for-profit corporations operated for the purpose of administering, on a cooperative basis, the furnishing of natural gas for the benefit of their members and that, prior to 90 days after the effective date of this amendatory Act of the 94th General Assembly, either had acquired or had entered into an asset purchase agreement to acquire all or substantially all of the operating assets of a public utility or natural gas cooperative with the intention of operating those assets as a natural gas cooperative;

5. sewage disposal companies which provide sewage disposal services on a mutual basis without establishing rates or charges for services, but paying the operating expenses by assessment upon the members of the company and no others;

6. the Illinois Power Authority and its subsidiaries as provided in Section 90 of the Illinois Power Authority Act (Blank);

7. cogeneration facilities, small power production facilities, and other qualifying facilities, as defined in the Public Utility Regulatory Policies Act and regulations promulgated thereunder, except to the extent State regulatory jurisdiction and action is required or authorized by federal law, regulations, regulatory decisions or the decisions of federal or State courts of competent jurisdiction;

8. the ownership or operation of a facility that sells compressed natural gas at retail to the public for use only as a motor vehicle fuel and the selling of compressed natural gas at retail to the public for use only as a motor vehicle fuel; and

9. alternative retail electric suppliers as defined in Article XVI.

(Source: P.A. 94-738, eff. 5-4-06.)

Section 930. The Eminent Domain Act is amended by adding Sections 15-5-45 and 25-5-5 and by changing the heading of Part 5 of Article 25 as follows:

(735 ILCS 30/15-5-45 new)

Sec. 15-5-45. Eminent domain powers in new Acts. The following provisions of law may include express grants of the power to acquire property by condemnation or eminent domain:

Illinois Power Authority Act.

(735 ILCS 30/Art. 25, Pt. 5 heading)

Part 5. New Quick-take Powers

(Reserved)

(Source: P.A. 94-1055, eff. 1-1-07.)

(735 ILCS 30/25-5-5 new)

Sec. 25-5-5. Quick-take; Illinois Power Authority. Quick-take proceedings under Article 20 may be used by the Illinois Power Authority for the purposes specified in the Illinois Power Authority Act.

Section 990. Severability. The provisions of this Act are severable, and if any part or provision of this Act, or the application thereof to any person or circumstance, is adjudged by any court of competent jurisdiction to be invalid or unenforceable, that judgment does not affect, impair, or invalidate the remainder of this Act or the application of that provision to any other person or circumstance, but shall be confined in its operation to the provision, person, or circumstance directly involved in the controversy in which the judgment has been rendered.

Section 999. Effective date. This Act takes effect upon becoming law.