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Public Act 92-0435
SB724 Enrolled LRB9207881JScs
AN ACT concerning public utilities.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by
changing Section 8-403.1 as follows:
(220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
Sec. 8-403.1. Electricity purchased from qualified solid
waste energy facility; tax credit; distributions for economic
development.
(a) It is hereby declared to be the policy of this State
to encourage the development of alternate energy production
facilities in order to conserve our energy resources and to
provide for their most efficient use.
(b) For the purpose of this Section and Section 9-215.1,
"qualified solid waste energy facility" means a facility
determined by the Illinois Commerce Commission to qualify as
such under the Local Solid Waste Disposal Act, to use methane
gas generated from landfills as its primary fuel, and to
possess characteristics that would enable it to qualify as a
cogeneration or small power production facility under federal
law.
(c) In furtherance of the policy declared in this
Section, the Illinois Commerce Commission shall require
electric utilities to enter into long-term contracts to
purchase electricity from qualified solid waste energy
facilities located in the electric utility's service area,
for a period beginning on the date that the facility begins
generating electricity and having a duration of not less than
10 years in the case of facilities fueled by
landfill-generated methane, or 20 years in the case of
facilities fueled by methane generated from a landfill owned
by a forest preserve district. The purchase rate contained
in such contracts shall be equal to the average amount per
kilowatt-hour paid from time to time by the unit or units of
local government in which the electricity generating
facilities are located, excluding amounts paid for street
lighting and pumping service.
(d) Whenever a public utility is required to purchase
electricity pursuant to subsection (c) above, it shall be
entitled to credits in respect of its obligations to remit to
the State taxes it has collected under the Electricity Excise
Tax Law equal to the amounts, if any, by which payments for
such electricity exceed (i) the then current rate at which
the utility must purchase the output of qualified facilities
pursuant to the federal Public Utility Regulatory Policies
Act of 1978, less (ii) any costs, expenses, losses, damages
or other amounts incurred by the utility, or for which it
becomes liable, arising out of its failure to obtain such
electricity from such other sources. The amount of any such
credit shall, in the first instance, be determined by the
utility, which shall make a monthly report of such credits to
the Illinois Commerce Commission and, on its monthly tax
return, to the Illinois Department of Revenue. Under no
circumstances shall a utility be required to purchase
electricity from a qualified solid waste energy facility at
the rate prescribed in subsection (c) of this Section if such
purchase would result in estimated tax credits that exceed,
on a monthly basis, the utility's estimated obligation to
remit to the State taxes it has collected under the
Electricity Excise Tax Law. The owner or operator shall
negotiate facility operating conditions with the purchasing
utility in accordance with that utility's posted standard
terms and conditions for small power producers. If the
Department of Revenue disputes the amount of any such credit,
such dispute shall be decided by the Illinois Commerce
Commission. Whenever a qualified solid waste energy facility
has paid or otherwise satisfied in full the capital costs or
indebtedness incurred in developing and implementing the
qualified facility, the qualified facility shall reimburse
the Public Utility Fund and the General Revenue Fund in the
State treasury for the actual reduction in payments to those
Funds caused by this subsection (d) in a manner to be
determined by the Illinois Commerce Commission and based on
the manner in which revenues for those Funds were reduced.
(e) The Illinois Commerce Commission shall not require
an electric utility to purchase electricity from any
qualified solid waste energy facility which is owned or
operated by an entity that is primarily engaged in the
business of producing or selling electricity, gas, or useful
thermal energy from a source other than one or more qualified
solid waste energy facilities.
(f) This Section does not require an electric utility to
construct additional facilities unless those facilities are
paid for by the owner or operator of the affected qualified
solid waste energy facility.
(g) The Illinois Commerce Commission shall require that:
(1) electric utilities use the electricity purchased from a
qualified solid waste energy facility to displace electricity
generated from nuclear power or coal mined and purchased
outside the boundaries of the State of Illinois before
displacing electricity generated from coal mined and
purchased within the State of Illinois, to the extent
possible, and (2) electric utilities report annually to the
Commission on the extent of such displacements.
(h) Nothing in this Section is intended to cause an
electric utility that is required to purchase power hereunder
to incur any economic loss as a result of its purchase. All
amounts paid for power which a utility is required to
purchase pursuant to subparagraph (c) shall be deemed to be
costs prudently incurred for purposes of computing charges
under rates authorized by Section 9-220 of this Act. Tax
credits provided for herein shall be reflected in charges
made pursuant to rates so authorized to the extent such
credits are based upon a cost which is also reflected in such
charges.
(i) Beginning in February 1999 and through January 2009,
each qualified solid waste energy facility that sells
electricity to an electric utility at the purchase rate
described in subsection (c) shall file with the Department of
Revenue on or before the 15th of each month a form,
prescribed by the Department of Revenue, that states the
number of kilowatt hours of electricity for which payment was
received at that purchase rate from electric utilities in
Illinois during the immediately preceding month. This form
shall be accompanied by a payment from the qualified solid
waste energy facility in an amount equal to six-tenths of a
mill ($0.0006) per kilowatt hour of electricity stated on the
form. Beginning on the effective date of this amendatory Act
of the 92nd General Assembly, a qualified solid waste energy
facility must file the form required under this subsection
(i) before the 15th of each month regardless of whether the
facility received any payment in the previous month. Payments
received by the Department of Revenue shall be deposited into
the Municipal Economic Development Fund, a trust fund created
outside the State treasury. The State Treasurer may invest
the moneys in the Fund in any investment authorized by the
Public Funds Investment Act, and investment income shall be
deposited into and become part of the Fund. Moneys in the
Fund shall be used by the State Treasurer as provided in
subsection (j). The obligation of a qualified solid waste
energy facility to make payments into the Municipal Economic
Development Fund shall terminate upon either: (1) expiration
or termination of a facility's contract to sell electricity
to an electric utility at the purchase rate described in
subsection (c); or (2) entry of an enforceable, final, and
non-appealable order by a court of competent jurisdiction
that Public Act 89-448 is invalid. Payments by a qualified
solid waste energy facility into the Municipal Economic
Development Fund do not relieve the qualified solid waste
energy facility of its obligation to reimburse the Public
Utility Fund and the General Revenue Fund for the actual
reduction in payments to those Funds as a result of credits
received by electric utilities under subsection (d).
A qualified solid waste energy facility that fails to
timely file the requisite form and payment as required by
this subsection (i) shall be subject to penalties and
interest in conformance with the provisions of the Illinois
Uniform Penalty and Interest Act.
Every qualified solid waste energy facility subject to
the provisions of this subsection (i) shall keep and maintain
records and books of its sales pursuant to subsection (c),
including payments received from those sales and the
corresponding tax payments made in accordance with this
subsection (i), and for purposes of enforcement of this
subsection (i) all such books and records shall be subject to
inspection by the Department of Revenue or its duly
authorized agents or employees.
When a qualified solid waste energy facility fails to
file the form or make the payment required under this
subsection (i), the Department of Revenue, to the extent that
it is practical, may enforce the payment obligation in a
manner consistent with Section 5 of the Retailers' Occupation
Tax Act, and if necessary may impose and enforce a tax lien
in a manner consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f,
5g, and 5i of the Retailers' Occupation Tax Act. No tax lien
may be imposed or enforced, however, unless a qualified solid
waste energy facility fails to make the payment required
under this subsection (i). Only to the extent necessary and
for the purpose of enforcing this subsection (i), the
Department of Revenue may secure necessary information from a
qualified solid waste energy facility in a manner consistent
with Section 10 of the Retailers' Occupation Tax Act.
All information received by the Department of Revenue in
its administration and enforcement of this subsection (i)
shall be confidential in a manner consistent with Section 11
of the Retailers' Occupation Tax Act. The Department of
Revenue may adopt rules to implement the provisions of this
subsection (i).
For purposes of implementing the maximum aggregate
distribution provisions in subsections (j) and (k), when a
qualified solid waste energy facility makes a late payment to
the Department of Revenue for deposit into the Municipal
Economic Development Fund, that payment and deposit shall be
attributed to the month and corresponding quarter in which
the payment should have been made, and the Treasurer shall
make retroactive distributions or refunds, as the case may
be, whenever such late payments so require.
(j) The State Treasurer, without appropriation, must
make distributions immediately after January 15, April 15,
July 15, and October 15 of each year, up to maximum aggregate
distributions of $500,000 for the distributions made in the 4
quarters beginning with the April distribution and ending
with the January distribution, from the Municipal Economic
Development Fund to each city, village, or incorporated town
that has within its boundaries an incinerator that: (1) uses
or, on the effective date of Public Act 90-813, used
municipal waste as its primary fuel to generate electricity;
(2) was determined by the Illinois Commerce Commission to
qualify as a qualified solid waste energy facility prior to
the effective date of Public Act 89-448; and (3) commenced
operation prior to January 1, 1998. Total distributions in
the aggregate to all qualified cities, villages, and
incorporated towns in the 4 quarters beginning with the April
distribution and ending with the January distribution shall
not exceed $500,000. The amount of each distribution shall
be determined pro rata based on the population of the city,
village, or incorporated town compared to the total
population of all cities, villages, and incorporated towns
eligible to receive a distribution. Distributions received
by a city, village, or incorporated town must be held in a
separate account and may be used only to promote and enhance
industrial, commercial, residential, service, transportation,
and recreational activities and facilities within its
boundaries, thereby enhancing the employment opportunities,
public health and general welfare, and economic development
within the community, including administrative expenditures
exclusively to further these activities. These funds,
however, shall not be used by the city, village, or
incorporated town, directly or indirectly, to purchase,
lease, operate, or in any way subsidize the operation of any
incinerator, and these funds shall not be paid, directly or
indirectly, by the city, village, or incorporated town to the
owner, operator, lessee, shareholder, or bondholder of any
incinerator. Moreover, these funds shall not be used to pay
attorneys fees in any litigation relating to the validity of
Public Act 89-448. Nothing in this Section prevents a city,
village, or incorporated town from using other corporate
funds for any legitimate purpose. For purposes of this
subsection, the term "municipal waste" has the meaning
ascribed to it in Section 3.21 of the Environmental
Protection Act.
(k) If maximum aggregate distributions of $500,000 under
subsection (j) have been made after the January distribution
from the Municipal Economic Development Fund, then the
balance in the Fund shall be refunded to the qualified solid
waste energy facilities that made payments that were
deposited into the Fund during the previous 12-month period.
The refunds shall be prorated based upon the facility's
payments in relation to total payments for that 12-month
period.
(l) Beginning January 1, 2000, and each January 1
thereafter, each city, village, or incorporated town that
received distributions from the Municipal Economic
Development Fund, continued to hold any of those
distributions, or made expenditures from those distributions
during the immediately preceding year shall submit to a
financial and compliance and program audit of those
distributions performed by the Auditor General at no cost to
the city, village, or incorporated town that received the
distributions. The audit should be completed by June 30 or
as soon thereafter as possible. The audit shall be submitted
to the State Treasurer and those officers enumerated in
Section 3-14 of the Illinois State Auditing Act. If the
Auditor General finds that distributions have been expended
in violation of this Section, the Auditor General shall refer
the matter to the Attorney General. The Attorney General may
recover, in a civil action, 3 times the amount of any
distributions illegally expended. For purposes of this
subsection, the terms "financial audit," "compliance audit",
and "program audit" have the meanings ascribed to them in
Sections 1-13 and 1-15 of the Illinois State Auditing Act.
(Source: P.A. 90-813, eff. 1-29-99; 91-901, eff. 1-1-01.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 22, 2001.
Approved August 17, 2001.
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