101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4726

 

Introduced 2/18/2020, by Rep. Jay Hoffman

 

SYNOPSIS AS INTRODUCED:
 
65 ILCS 5/11-124-5
65 ILCS 5/11-139-12  from Ch. 24, par. 11-139-12
735 ILCS 30/10-5-10  was 735 ILCS 5/7-102

    Amends the Illinois Municipal Code and the Eminent Domain Act. Provides that no property belonging to a public utility providing water or sewer service subject to the jurisdiction of the Illinois Commerce Commission may be taken or damaged by eminent domain without prior approval of the Illinois Commerce Commission. Excludes eminent domain actions commenced prior to the effective date of the amendatory Act. Effective immediately.


LRB101 15672 AWJ 65021 b

 

 

A BILL FOR

 

HB4726LRB101 15672 AWJ 65021 b

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 Sections 11-124-5 and 11-139-12 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

 

 

HB4726- 2 -LRB101 15672 AWJ 65021 b

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

 

 

HB4726- 3 -LRB101 15672 AWJ 65021 b

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

 

 

HB4726- 4 -LRB101 15672 AWJ 65021 b

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

 

 

HB4726- 5 -LRB101 15672 AWJ 65021 b

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

 

 

HB4726- 6 -LRB101 15672 AWJ 65021 b

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

 

 

HB4726- 7 -LRB101 15672 AWJ 65021 b

1    (g-5) No property belonging to a public utility providing
2water or sewer service subject to the jurisdiction of the
3Illinois Commerce Commission may be taken or damaged under the
4provisions of this Section without prior approval of the
5Illinois Commerce Commission. This subsection does not apply to
6any action under this Section commenced prior to the effective
7date of this amendatory Act of the 101st General Assembly.
8    (h) The provisions of this Section are severable under
9Section 1.31 of the Statute on Statutes.
10    (i) This Section does not apply to any public utility
11company that, on January 1, 2006, supplied a total of 70,000 or
12fewer meter connections in the State unless and until (i) that
13public utility company receives approval from the Illinois
14Commerce Commission under Section 7-204 of the Public Utilities
15Act for the reorganization of the public utility company or
16(ii) the majority control of the company changes through a
17stock sale, a sale of assets, a merger (other than an internal
18reorganization) or otherwise. For the purpose of this Section,
19"public utility company" means the public utility providing
20water service and includes any of its corporate parents,
21subsidiaries, or affiliates possessing a franchised water
22service in the State.
23    (j) Any contractor or subcontractor that performs work on a
24water system acquired by a municipality or municipalities under
25this Section shall comply with the requirements of Section
2630-22 of the Illinois Procurement Code. The contractor or

 

 

HB4726- 8 -LRB101 15672 AWJ 65021 b

1subcontractor shall submit evidence of compliance with Section
230-22 to the municipality or municipalities.
3    (k) The municipality or municipalities acquiring the water
4system shall offer available employee positions to the
5qualified employees of the acquired water system.
6(Source: P.A. 97-586, eff. 8-26-11; 97-813, eff. 7-13-12.)
 
7    (65 ILCS 5/11-139-12)  (from Ch. 24, par. 11-139-12)
8    Sec. 11-139-12. (a) For the purpose of acquiring,
9constructing, extending, or improving any combined waterworks
10and sewerage system under this Division 139, or any property
11necessary or appropriate therefor, any municipality has the
12right of eminent domain, as provided by the Eminent Domain Act.
13    The fair cash market value of an existing waterworks and
14sewerage system, or portion thereof, acquired under this
15Division 139, which existing system is a special use property,
16may be determined by considering Section 15 of Article I of the
17Illinois Constitution, the Eminent Domain Act, and the Uniform
18Standards of Professional Appraisal Practice and giving due
19consideration to the income, cost, and market approaches to
20valuation based on the type and character of the assets being
21acquired. In making the valuation determination, the
22historical and projected revenue attributable to the assets,
23the costs of the assets, and the condition and remaining useful
24life of the assets may be considered while giving due account
25to the special use nature of the property as used for water and

 

 

HB4726- 9 -LRB101 15672 AWJ 65021 b

1sewerage purposes.
2    Additionally, in determining the fair cash market value of
3existing utility facilities, whether real or personal,
4consideration may be given to the depreciated value of all
5facilities and fixtures constructed by the utility company and
6payments made by the utility company in connection with the
7acquisition or donation of any waterworks or sanitary sewage
8system.
9    For the purposes of this Section no prior approval of the
10Illinois Commerce Commission, or any other body having
11jurisdiction over the existing system, shall be required,
12except as provided in subsection (b).
13    (b) No property belonging to a public utility providing
14water or sewer service subject to the jurisdiction of the
15Illinois Commerce Commission may be taken or damaged under the
16provisions of this Section without prior approval of the
17Illinois Commerce Commission. This subsection does not apply to
18any action under this Section commenced prior to the effective
19date of this amendatory Act of the 101st General Assembly.
20(Source: P.A. 96-1468, eff. 8-20-10.)
 
21    Section 10. The Eminent Domain Act is amended by changing
22Section 10-5-10 as follows:
 
23    (735 ILCS 30/10-5-10)  (was 735 ILCS 5/7-102)
24    Sec. 10-5-10. Parties.

 

 

HB4726- 10 -LRB101 15672 AWJ 65021 b

1    (a) When the right (i) to take private property for public
2use, without the owner's consent, (ii) to construct or maintain
3any public road, railroad, plankroad, turnpike road, canal, or
4other public work or improvement, or (iii) to damage property
5not actually taken has been or is conferred by general law or
6special charter upon any corporate or municipal authority,
7public body, officer or agent, person, commissioner, or
8corporation and when (i) the compensation to be paid for or in
9respect of the property sought to be appropriated or damaged
10for the purposes mentioned cannot be agreed upon by the parties
11interested, (ii) the owner of the property is incapable of
12consenting, (iii) the owner's name or residence is unknown, or
13(iv) the owner is a nonresident of the State, then the party
14authorized to take or damage the property so required, or to
15construct, operate, and maintain any public road, railroad,
16plankroad, turnpike road, canal, or other public work or
17improvement, may apply to the circuit court of the county where
18the property or any part of the property is situated, by filing
19with the clerk a complaint. The complaint shall set forth, by
20reference, (i) the complainant's authority in the premises,
21(ii) the purpose for which the property is sought to be taken
22or damaged, (iii) a description of the property, and (iv) the
23names of all persons interested in the property as owners or
24otherwise, as appearing of record, if known, or if not known
25stating that fact; and shall pray the court to cause the
26compensation to be paid to the owner to be assessed.

 

 

HB4726- 11 -LRB101 15672 AWJ 65021 b

1    (b) If it appears that any person not in being, upon coming
2into being, is, or may become or may claim to be, entitled to
3any interest in the property sought to be appropriated or
4damaged, the court shall appoint some competent and
5disinterested person as guardian ad litem to appear for and
6represent that interest in the proceeding and to defend the
7proceeding on behalf of the person not in being. Any judgment
8entered in the proceeding shall be as effectual for all
9purposes as though the person was in being and was a party to
10the proceeding.
11    (c) If the proceeding seeks to affect the property of
12persons under guardianship, the guardians shall be made parties
13defendant.
14    (d) Any interested persons whose names are unknown may be
15made parties defendant by the same descriptions and in the same
16manner as provided in other civil cases.
17    (e) When the property to be taken or damaged is a common
18element of property subject to a declaration of condominium
19ownership, pursuant to the Condominium Property Act, or of a
20common interest community, the complaint shall name the unit
21owners' association in lieu of naming the individual unit
22owners and lienholders on individual units. Unit owners,
23mortgagees, and other lienholders may intervene as parties
24defendant. For the purposes of this Section, "common interest
25community" has the same meaning as set forth in subsection (c)
26of Section 9-102 of the Code of Civil Procedure. "Unit owners'

 

 

HB4726- 12 -LRB101 15672 AWJ 65021 b

1association" or "association" shall refer to both the
2definition contained in Section 2 of the Condominium Property
3Act and subsection (c) of Section 9-102 of the Code of Civil
4Procedure.
5    (f) When the property is sought to be taken or damaged by
6the State for the purposes of establishing, operating, or
7maintaining any State house or State charitable or other
8institutions or improvements, the complaint shall be signed by
9the Governor, or the Governor's designee, or as otherwise
10provided by law.
11    (g) No property, except property described in Section 3 of
12the Sports Stadium Act, property to be acquired in furtherance
13of actions under Article 11, Divisions 124, 126, 128, 130, 135,
14136, and 139, of the Illinois Municipal Code, property to be
15acquired in furtherance of actions under Section 3.1 of the
16Intergovernmental Cooperation Act, property to be acquired
17that is a water system or waterworks pursuant to the home rule
18powers of a unit of local government (other than as provided in
19subsection (h)), and property described as Site B in Section 2
20of the Metropolitan Pier and Exposition Authority Act, and
21property that may be taken as provided in the Public-Private
22Agreements for the South Suburban Airport Act belonging to a
23railroad or other public utility subject to the jurisdiction of
24the Illinois Commerce Commission, may be taken or damaged,
25pursuant to the provisions of this Act, without the prior
26approval of the Illinois Commerce Commission.

 

 

HB4726- 13 -LRB101 15672 AWJ 65021 b

1    (h) No property belonging to a public utility providing
2water or sewer service subject to the jurisdiction of the
3Illinois Commerce Commission may be taken or damaged by eminent
4domain without prior approval of the Illinois Commerce
5Commission. This subsection does not apply to any action under
6this Section commenced prior to the effective date of this
7amendatory Act of the 101st General Assembly.
8(Source: P.A. 98-109, eff. 7-25-13.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.