SB1820sam001 102ND GENERAL ASSEMBLY

Sen. David Koehler

Filed: 3/24/2021

10200SB1820sam001 LRB102 17023 HLH 23563 a

AMENDMENT TO SENATE BILL 1820

AMENDMENT NO. ______. Amend Senate Bill 1820 on page 1, by replacing lines 4 through 15 with the following:

"Section 1. Short title. This Act may be cited as the Energy Community Reinvestment Act.

Section 5. Energy Community Transition Payments.

(a) For purposes of this Section:

"Generation facility" means a plant or equipment used to produce, manufacture, or otherwise generate electricity that is not a transmission facility or an energy storage system procured by a distribution company for support in delivering energy services to end users.

"Wholesale generation company" means a company engaged in the business of producing, manufacturing, or generating electricity for sale at wholesale only.

(b) Any wholesale generation company that does not rely on a renewable, or such company's affiliate, subsidiary, or parent company, that currently has no binding agreement for payments in lieu of transition payments to all taxing districts in which the company's generation facilities are located shall be required to make transition payments to any taxing district in which an affiliated generation facility, or part thereof, is located and has been devalued for property tax payment purposes; provided, however, that where such a binding agreement for the payment in lieu of transition payments has been entered into on or after the effective date of this Act, that agreement shall govern, and that generation facility shall be exempt from the provisions of this Act. Those payments shall offset any reductions of property taxes as a result of any devaluation of that generation facility. This Section does not provide for any exemption from property tax and is in addition to any property tax obligations.

(c) For the taxable year in which the wholesale generation company begins decommissioning and for the 3 subsequent taxable years, transition payments shall be the difference between the property taxes due for that property for the current taxable year and the property taxes due for that property for taxable year 2020. From the fifth taxable year following the beginning of the decommissioning process until the tenth taxable year, transition payments shall be calculated as follows:

(1) For taxable year 5, the amount shall be equivalent to 90% of the difference between the equalized assessed value of the property as of January 1, 2020 and the equalized assessed value of the property as of taxable year 5, multiplied by the applicable tax rate for that property for the taxable year;

(2) For taxable year 6, the amount shall be equivalent to 80% of the difference between the equalized assessed value of the property as of January 1, 2020 and the equalized assessed value of the property as of taxable year 6, multiplied by the applicable tax rate for that property for the taxable year;

(3) For taxable year 7, the amount shall be equivalent to 70% of the difference between the equalized assessed value of the property as of January 1, 2020 and the fair cash value of the property as of taxable year 7, multiplied by the applicable tax rate for that property for the taxable year;

(4) For taxable year 8, the amount shall be equivalent to 60% of the difference between the equalized assessed value of the property as of January 1, 2020 and the equalized assessed value of the property as of taxable year 8, multiplied by the applicable tax rate for that property for the taxable year;

(5) For taxable year 9, the amount shall be equivalent to 50% of the difference between the equalized assessed value of the property as of January 1, 2020 and the equalized assessed value of the property as of taxable year 9, multiplied by the applicable tax rate for the property for the taxable year; and

(6) For taxable year 10, the amount shall be equivalent to 40% of the difference between the equalized assessed value of the property as of January 1, 2020 and the equalized assessed value of the property as of taxable year 10, multiplied by the applicable tax rate for the property for the taxable year.

(d) Any such transition payments shall be included in the tax base for purposes of determining the taxing district's levy. The Department of Revenue may issue rules and guidelines for implementing the provisions of this Section consistent with preserving the transition payment amounts in the local tax base for such purposes.

(e) A generation company or wholesale generation company may, in order to comply with its transition payment liability obligation, execute an agreement for payment in lieu of transition payments with the taxing districts in which such generation facility is sitting, and said company shall be exempt from transition payments, in whole or in part, as provided in any such agreements during terms thereof. Any such agreement shall be the result of good faith negotiations and shall be the equivalent of the property tax obligation based on full and fair cash valuation. Any such negotiated amount shall be included in the tax base for purposes of determining the levy. The Department of Revenue may issue rules and guidelines for implementing the provisions of this Section consistent with preserving the negotiated payment amount in the local tax base for such purpose.

(f) A taxing district, acting by and through its governing body and assessors, is hereby authorized to enter into an agreement with a wholesale energy generator concerning payments in lieu of transition payments. A taxing district and wholesale energy generator may agree to ratify any such agreement entered into and in effect prior to the enactment of this act in all respects and as though this Act had been in full force and effect at the time of the execution of said agreement.

(g) Agreements between wholesale generation companies and host taxing districts shall be executed as a result of good faith negotiations. Such agreements shall cover a period of time equal to a minimum of ten years. If an agreement on such payment in lieu of transition payments cannot be effected through good faith negotiations, the parties shall submit to arbitration and such arbitration shall be performed by the Department of Revenue or a state-certified professional arbitrator or arbitration firm appointed by the Department of Revenue.

(h) The Department of Revenue may adopt rules and may issue guidance for implementing the provisions of this Section consistent with the goal of preserving the transition payment and in lieu of transition payment in the local tax base.".