093_SB1730

 
                                     LRB093 03175 JLS 03192 b

 1        AN ACT concerning public utilities.

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

 4        Section  5.  The  Public  Utilities  Act  is  amended  by
 5    changing Section 8-403.1 as follows:

 6        (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
 7        Sec. 8-403.1.  Electricity purchased from qualified solid
 8    waste energy facility; tax credit; distributions for economic
 9    development.
10        (a)  It is hereby declared to be the policy of this State
11    to encourage the development of alternate  energy  production
12    facilities  in  order to conserve our energy resources and to
13    provide for their most efficient use.
14        (b)  For the purpose of this Section and Section 9-215.1,
15    "qualified solid waste  energy  facility"  means  a  facility
16    determined  by the Illinois Commerce Commission to qualify as
17    such under the Local Solid Waste Disposal Act, to use methane
18    gas generated from landfills as  its  primary  fuel,  and  to
19    possess  characteristics that would enable it to qualify as a
20    cogeneration or small power production facility under federal
21    law.
22        (c)  In  furtherance  of  the  policy  declared  in  this
23    Section,  the  Illinois  Commerce  Commission  shall  require
24    electric utilities  to  enter  into  long-term  contracts  to
25    purchase   electricity  from  qualified  solid  waste  energy
26    facilities located in the electric  utility's  service  area,
27    for  a  period beginning on the date that the facility begins
28    generating electricity and having a duration of not less than
29    10   years   in   the   case   of   facilities   fueled    by
30    landfill-generated  methane,  or  20  years  in  the  case of
31    facilities fueled by methane generated from a landfill  owned
 
                            -2-      LRB093 03175 JLS 03192 b
 1    by  a  forest preserve district.  The purchase rate contained
 2    in such contracts shall be equal to the  average  amount  per
 3    kilowatt-hour  paid from time to time by the unit or units of
 4    local  government  in  which   the   electricity   generating
 5    facilities  are  located,  excluding  amounts paid for street
 6    lighting and pumping service.
 7        (d)  Whenever a public utility is  required  to  purchase
 8    electricity  pursuant  to  subsection  (c) above, it shall be
 9    entitled to credits in respect of its obligations to remit to
10    the State taxes it has collected under the Electricity Excise
11    Tax Law equal to the amounts, if any, by which  payments  for
12    such  electricity  exceed  (i) the then current rate at which
13    the utility must purchase the output of qualified  facilities
14    pursuant  to  the  federal Public Utility Regulatory Policies
15    Act of 1978, less (ii) any costs, expenses,  losses,  damages
16    or  other  amounts  incurred  by the utility, or for which it
17    becomes liable, arising out of its  failure  to  obtain  such
18    electricity  from such other sources.  The amount of any such
19    credit shall, in the first instance,  be  determined  by  the
20    utility, which shall make a monthly report of such credits to
21    the  Illinois  Commerce  Commission  and,  on its monthly tax
22    return, to the  Illinois  Department  of  Revenue.  Under  no
23    circumstances   shall  a  utility  be  required  to  purchase
24    electricity from a qualified solid waste energy  facility  at
25    the rate prescribed in subsection (c) of this Section if such
26    purchase  would  result in estimated tax credits that exceed,
27    on a monthly basis, the  utility's  estimated  obligation  to
28    remit   to  the  State  taxes  it  has  collected  under  the
29    Electricity Excise Tax  Law.  The  owner  or  operator  shall
30    negotiate  facility  operating conditions with the purchasing
31    utility in accordance with  that  utility's  posted  standard
32    terms  and  conditions  for  small  power  producers.  If the
33    Department of Revenue disputes the amount of any such credit,
34    such dispute  shall  be  decided  by  the  Illinois  Commerce
 
                            -3-      LRB093 03175 JLS 03192 b
 1    Commission.  Whenever a qualified solid waste energy facility
 2    has  paid or otherwise satisfied in full the capital costs or
 3    indebtedness incurred  in  developing  and  implementing  the
 4    qualified  facility,  the  qualified facility shall reimburse
 5    the Public Utility Fund and the General Revenue Fund  in  the
 6    State  treasury for the actual reduction in payments to those
 7    Funds caused by  this  subsection  (d)  in  a  manner  to  be
 8    determined  by  the Illinois Commerce Commission and based on
 9    the manner in which revenues for those Funds were reduced.
10        (e)  The Illinois Commerce Commission shall  not  require
11    an   electric   utility  to  purchase  electricity  from  any
12    qualified solid waste  energy  facility  which  is  owned  or
13    operated  by  an  entity  that  is  primarily  engaged in the
14    business of producing or selling electricity, gas, or  useful
15    thermal energy from a source other than one or more qualified
16    solid waste energy facilities.
17        (f)  This Section does not require an electric utility to
18    construct  additional  facilities unless those facilities are
19    paid for by the owner or operator of the  affected  qualified
20    solid waste energy facility.
21        (g)  The Illinois Commerce Commission shall require that:
22    (1)  electric  utilities use the electricity purchased from a
23    qualified solid waste energy facility to displace electricity
24    generated from nuclear power  or  coal  mined  and  purchased
25    outside  the  boundaries  of  the  State  of  Illinois before
26    displacing  electricity  generated  from   coal   mined   and
27    purchased  within  the  State  of  Illinois,  to  the  extent
28    possible,  and  (2) electric utilities report annually to the
29    Commission on the extent of such displacements.
30        (h)  Nothing in this Section  is  intended  to  cause  an
31    electric utility that is required to purchase power hereunder
32    to  incur any economic loss as a result of its purchase.  All
33    amounts paid  for  power  which  a  utility  is  required  to
34    purchase  pursuant  to subparagraph (c) shall be deemed to be
 
                            -4-      LRB093 03175 JLS 03192 b
 1    costs prudently incurred for purposes  of  computing  charges
 2    under  rates  authorized  by  Section 9-220 of this Act.  Tax
 3    credits provided for herein shall  be  reflected  in  charges
 4    made  pursuant  to  rates  so  authorized  to the extent such
 5    credits are based upon a cost which is also reflected in such
 6    charges.
 7        (i)  Beginning in February 1999 and through January 2009,
 8    each  qualified  solid  waste  energy  facility  that   sells
 9    electricity  to  an  electric  utility  at  the purchase rate
10    described in subsection (c) shall file with the Department of
11    Revenue  on  or  before  the  15th  of  each  month  a  form,
12    prescribed by the Department  of  Revenue,  that  states  the
13    number of kilowatt hours of electricity for which payment was
14    received  at  that  purchase  rate from electric utilities in
15    Illinois during the immediately preceding month.   This  form
16    shall  be  accompanied  by a payment from the qualified solid
17    waste energy facility in an amount equal to six-tenths  of  a
18    mill ($0.0006) per kilowatt hour of electricity stated on the
19    form.  Beginning on the effective date of this amendatory Act
20    of  the 92nd General Assembly, a qualified solid waste energy
21    facility must file the form required  under  this  subsection
22    (i)  before  the 15th of each month regardless of whether the
23    facility  received  any  payment  in  the   previous   month.
24    Payments  received  by  the  Department  of  Revenue shall be
25    deposited into the Municipal  Economic  Development  Fund,  a
26    trust  fund  created  outside  the  State treasury. The State
27    Treasurer may invest the moneys in the Fund in any investment
28    authorized by the Public Funds Investment Act, and investment
29    income shall be deposited into and become part of  the  Fund.
30    Moneys  in  the  Fund shall be used by the State Treasurer as
31    provided in subsection (j).  The obligation  of  a  qualified
32    solid  waste  energy  facility  to  make  payments  into  the
33    Municipal  Economic  Development  Fund  shall  terminate upon
34    either:  (1)  expiration  or  termination  of  a   facility's
 
                            -5-      LRB093 03175 JLS 03192 b
 1    contract  to  sell  electricity to an electric utility at the
 2    purchase rate described in subsection (c); or (2) entry of an
 3    enforceable, final, and non-appealable order by  a  court  of
 4    competent  jurisdiction  that  Public  Act 89-448 is invalid.
 5    Payments by a qualified solid waste energy facility into  the
 6    Municipal  Economic  Development  Fund  do  not  relieve  the
 7    qualified  solid  waste  energy facility of its obligation to
 8    reimburse the Public Utility Fund  and  the  General  Revenue
 9    Fund for the actual reduction in payments to those Funds as a
10    result  of  credits  received  by  electric  utilities  under
11    subsection (d).
12        A  qualified  solid  waste  energy facility that fails to
13    timely file the requisite form and  payment  as  required  by
14    this  subsection  (i)  shall  be  subject  to  penalties  and
15    interest  in  conformance with the provisions of the Illinois
16    Uniform Penalty and Interest Act.
17        Every qualified solid waste energy  facility  subject  to
18    the provisions of this subsection (i) shall keep and maintain
19    records  and  books  of its sales pursuant to subsection (c),
20    including  payments  received  from  those  sales   and   the
21    corresponding  tax  payments  made  in  accordance  with this
22    subsection (i), and  for  purposes  of  enforcement  of  this
23    subsection (i) all such books and records shall be subject to
24    inspection   by   the  Department  of  Revenue  or  its  duly
25    authorized agents or employees.
26        When a qualified solid waste  energy  facility  fails  to
27    file  the  form  or  make  the  payment  required  under this
28    subsection (i), the Department of Revenue, to the extent that
29    it is practical, may enforce  the  payment  obligation  in  a
30    manner consistent with Section 5 of the Retailers' Occupation
31    Tax  Act,  and if necessary may impose and enforce a tax lien
32    in a manner consistent with Sections 5a, 5b, 5c, 5d, 5e,  5f,
33    5g, and 5i of the Retailers' Occupation Tax Act.  No tax lien
34    may be imposed or enforced, however, unless a qualified solid
 
                            -6-      LRB093 03175 JLS 03192 b
 1    waste  energy  facility  fails  to  make the payment required
 2    under this subsection (i).  Only to the extent necessary  and
 3    for  the  purpose  of  enforcing  this  subsection  (i),  the
 4    Department of Revenue may secure necessary information from a
 5    qualified  solid waste energy facility in a manner consistent
 6    with Section 10 of the Retailers' Occupation Tax Act.
 7        All information received by the Department of Revenue  in
 8    its  administration  and  enforcement  of this subsection (i)
 9    shall be confidential in a manner consistent with Section  11
10    of  the  Retailers'  Occupation  Tax  Act.  The Department of
11    Revenue may adopt rules to implement the provisions  of  this
12    subsection (i).
13        For   purposes  of  implementing  the  maximum  aggregate
14    distribution provisions in subsections (j) and  (k),  when  a
15    qualified solid waste energy facility makes a late payment to
16    the  Department  of  Revenue  for  deposit into the Municipal
17    Economic Development Fund, that payment and deposit shall  be
18    attributed  to  the  month and corresponding quarter in which
19    the payment should have been made, and  the  Treasurer  shall
20    make  retroactive  distributions  or refunds, as the case may
21    be, whenever such late payments so require.
22        (j)  The State  Treasurer,  without  appropriation,  must
23    make  distributions  immediately  after January 15, April 15,
24    July 15, and October 15 of each year, up to maximum aggregate
25    distributions of $500,000 for the distributions made in the 4
26    quarters beginning with the  April  distribution  and  ending
27    with  the  January  distribution, from the Municipal Economic
28    Development Fund to each city, village, or incorporated  town
29    that  has within its boundaries an incinerator that: (1) uses
30    or,  on  the  effective  date  of  Public  Act  90-813,  used
31    municipal waste as its primary fuel to generate  electricity;
32    (2)  was  determined  by  the Illinois Commerce Commission to
33    qualify as a qualified solid waste energy facility  prior  to
34    the  effective  date  of Public Act 89-448; and (3) commenced
 
                            -7-      LRB093 03175 JLS 03192 b
 1    operation prior to January 1, 1998.  Total  distributions  in
 2    the   aggregate   to  all  qualified  cities,  villages,  and
 3    incorporated towns in the 4 quarters beginning with the April
 4    distribution and ending with the January  distribution  shall
 5    not  exceed  $500,000.  The amount of each distribution shall
 6    be determined pro rata based on the population of  the  city,
 7    village,   or   incorporated   town  compared  to  the  total
 8    population of all cities, villages,  and  incorporated  towns
 9    eligible to receive a distribution. Distributions received by
10    a  city,  village,  or  incorporated  town  must be held in a
11    separate account and may be used only to promote and  enhance
12    industrial, commercial, residential, service, transportation,
13    and   recreational   activities  and  facilities  within  its
14    boundaries, thereby enhancing the  employment  opportunities,
15    public  health  and general welfare, and economic development
16    within the community, including  administrative  expenditures
17    exclusively   to  further  these  activities.   These  funds,
18    however,  shall  not  be  used  by  the  city,  village,   or
19    incorporated  town,  directly  or  indirectly,  to  purchase,
20    lease,  operate, or in any way subsidize the operation of any
21    incinerator, and these funds shall not be paid,  directly  or
22    indirectly, by the city, village, or incorporated town to the
23    owner,  operator,  lessee,  shareholder, or bondholder of any
24    incinerator. Moreover, these funds shall not be used  to  pay
25    attorneys  fees in any litigation relating to the validity of
26    Public Act 89-448.  Nothing in this Section prevents a  city,
27    village,  or  incorporated  town  from  using other corporate
28    funds for any  legitimate  purpose.   For  purposes  of  this
29    subsection,  the  term  "municipal  waste"  has  the  meaning
30    ascribed   to  it  in  Section  3.290  of  the  Environmental
31    Protection Act.
32        (k)  If maximum aggregate distributions of $500,000 under
33    subsection (j) have been made after the January  distribution
34    from  the  Municipal  Economic  Development  Fund,  then  the
 
                            -8-      LRB093 03175 JLS 03192 b
 1    balance  in the Fund shall be refunded to the qualified solid
 2    waste  energy  facilities  that  made  payments   that   were
 3    deposited  into the Fund during the previous 12-month period.
 4    The refunds shall  be  prorated  based  upon  the  facility's
 5    payments  in  relation  to  total  payments for that 12-month
 6    period.
 7        (l)  Beginning  January  1,  2000,  and  each  January  1
 8    thereafter, each city, village,  or  incorporated  town  that
 9    received    distributions   from   the   Municipal   Economic
10    Development  Fund,   continued   to   hold   any   of   those
11    distributions,  or made expenditures from those distributions
12    during the immediately  preceding  year  shall  submit  to  a
13    financial   and   compliance   and  program  audit  of  those
14    distributions performed by the Auditor General at no cost  to
15    the  city,  village,  or  incorporated town that received the
16    distributions.  The audit should be completed by June  30  or
17    as soon thereafter as possible.  The audit shall be submitted
18    to  the  State  Treasurer  and  those  officers enumerated in
19    Section 3-14 of the Illinois State  Auditing  Act.    If  the
20    Auditor  General  finds that distributions have been expended
21    in violation of this Section, the Auditor General shall refer
22    the matter to the Attorney General.  The Attorney General may
23    recover, in a  civil  action,  3  times  the  amount  of  any
24    distributions  illegally  expended.    For  purposes  of this
25    subsection, the terms "financial audit," "compliance  audit",
26    and  "program  audit"  have  the meanings ascribed to them in
27    Sections 1-13 and 1-15 of the Illinois State Auditing Act.
28    (Source: P.A. 91-901,  eff.  1-1-01;  92-435,  eff.  8-17-01;
29    92-574, eff. 6-26-02.)