Rep. George Scully Jr.

Filed: 5/23/2007

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1592

2     AMENDMENT NO. ______. Amend Senate Bill 1592 by inserting
3 immediately above the enacting clause the following:
4     "WHEREAS, This Act shall be known as the Electricity Rate
5 Relief Act of 2007; therefore,"; and
 
6 by replacing everything after the enacting clause with the
7 following:
 
8
"ARTICLE 1. LEGISLATIVE INTENT

 
9     Section 1-5. Legislative intent. In the Electric Service
10 Customer Choice and Rate Relief Law of 1997, the General
11 Assembly authorized market-based electric rates only if retail
12 and wholesale competition developed in Illinois and if the
13 Illinois Commerce Commission declared electric service to be
14 "competitive".
15     In 2006, however, the Illinois Commerce Commission

 

 

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1 authorized market-based rates for electric service that had
2 not, and still has not, been declared competitive.
3     As a result, the General Assembly finds it necessary to
4 take the steps set forth in this amendatory Act to provide
5 immediate relief to consumers, who have been harmed by the
6 Illinois Commerce Commission's approval of market-based rates
7 in the absence of a competitive declaration.
 
8
ARTICLE 3. AMENDATORY PROVISIONS

 
9     Section 3-5. The Public Utilities Act is amended by
10 changing Sections 16-102, 16-103, 16-111, and 16-113 and by
11 adding Sections 8-205.5 and 16-135 as follows:
 
12     (220 ILCS 5/8-205.5 new)
13     Sec. 8-205.5. Termination of utility service prior to March
14 31, 2008. Notwithstanding any other provision of this Act or
15 any other law to the contrary, a public utility that, on
16 December 31, 2005, served at least 100,000 electric customers
17 in Illinois may not terminate electric service to a residential
18 customer for nonpayment prior to March 31, 2008.
 
19     (220 ILCS 5/16-102)
20     Sec. 16-102. Definitions. For the purposes of this Article
21 the following terms shall be defined as set forth in this
22 Section.

 

 

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1     "Alternative retail electric supplier" means every person,
2 cooperative, corporation, municipal corporation, company,
3 association, joint stock company or association, firm,
4 partnership, individual, or other entity, their lessees,
5 trustees, or receivers appointed by any court whatsoever, that
6 offers electric power or energy for sale, lease or in exchange
7 for other value received to one or more retail customers, or
8 that engages in the delivery or furnishing of electric power or
9 energy to such retail customers, and shall include, without
10 limitation, resellers, aggregators and power marketers, but
11 shall not include (i) electric utilities (or any agent of the
12 electric utility to the extent the electric utility provides
13 tariffed services to retail customers through that agent), (ii)
14 any electric cooperative or municipal system as defined in
15 Section 17-100 to the extent that the electric cooperative or
16 municipal system is serving retail customers within any area in
17 which it is or would be entitled to provide service under the
18 law in effect immediately prior to the effective date of this
19 amendatory Act of 1997, (iii) a public utility that is owned
20 and operated by any public institution of higher education of
21 this State, or a public utility that is owned by such public
22 institution of higher education and operated by any of its
23 lessees or operating agents, within any area in which it is or
24 would be entitled to provide service under the law in effect
25 immediately prior to the effective date of this amendatory Act
26 of 1997, (iv) a retail customer to the extent that customer

 

 

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1 obtains its electric power and energy from that customer's own
2 cogeneration or self-generation facilities, (v) an entity that
3 owns, operates, sells, or arranges for the installation of a
4 customer's own cogeneration or self-generation facilities, but
5 only to the extent the entity is engaged in owning, selling or
6 arranging for the installation of such facility, or operating
7 the facility on behalf of such customer, provided however that
8 any such third party owner or operator of a facility built
9 after January 1, 1999, complies with the labor provisions of
10 Section 16-128(a) as though such third party were an
11 alternative retail electric supplier, or (vi) an industrial or
12 manufacturing customer that owns its own distribution
13 facilities, to the extent that the customer provides service
14 from that distribution system to a third-party contractor
15 located on the customer's premises that is integrally and
16 predominantly engaged in the customer's industrial or
17 manufacturing process; provided, that if the industrial or
18 manufacturing customer has elected delivery services, the
19 customer shall pay transition charges applicable to the
20 electric power and energy consumed by the third-party
21 contractor unless such charges are otherwise paid by the third
22 party contractor, which shall be calculated based on the usage
23 of, and the base rates or the contract rates applicable to, the
24 third-party contractor in accordance with Section 16-102.
25     "Base rates" means the rates for those tariffed services
26 that the electric utility is required to offer pursuant to

 

 

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1 subsection (a) of Section 16-103 and that were identified in a
2 rate order for collection of the electric utility's base rate
3 revenue requirement, excluding (i) separate automatic rate
4 adjustment riders then in effect, (ii) special or negotiated
5 contract rates, (iii) delivery services tariffs filed pursuant
6 to Section 16-108, (iv) real-time pricing, or (v) tariffs that
7 were in effect prior to October 1, 1996 and that based charges
8 for services on an index or average of other utilities'
9 charges, but including (vi) any subsequent redesign of such
10 rates for tariffed services that is authorized by the
11 Commission after notice and hearing.
12     "Competitive service" includes (i) any service that has
13 been declared to be competitive pursuant to Section 16-113 of
14 this Act, (ii) contract service, and (iii) services, other than
15 tariffed services, that are related to, but not necessary for,
16 the provision of electric power and energy or delivery
17 services.
18     "Contract service" means (1) services, including the
19 provision of electric power and energy or other services, that
20 are provided by mutual agreement between an electric utility
21 and a retail customer that is located in the electric utility's
22 service area, provided that, delivery services shall not be a
23 contract service until such services are declared competitive
24 pursuant to Section 16-113; and also means (2) the provision of
25 electric power and energy by an electric utility to retail
26 customers outside the electric utility's service area pursuant

 

 

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1 to Section 16-116. Provided, however, contract service does not
2 include electric utility services provided pursuant to (i)
3 contracts that retail customers are required to execute as a
4 condition of receiving tariffed services, or (ii) special or
5 negotiated rate contracts for electric utility services that
6 were entered into between an electric utility and a retail
7 customer prior to the effective date of this amendatory Act of
8 1997 and filed with the Commission.
9     "Delivery services" means those services provided by the
10 electric utility that are necessary in order for the
11 transmission and distribution systems to function so that
12 retail customers located in the electric utility's service area
13 can receive electric power and energy from suppliers other than
14 the electric utility, and shall include, without limitation,
15 standard metering and billing services.
16     "Electric utility" means a public utility, as defined in
17 Section 3-105 of this Act, that has a franchise, license,
18 permit or right to furnish or sell electricity to retail
19 customers within a service area.
20     "Mandatory transition period" means the period from the
21 effective date of Public Act 90-561 this amendatory Act of 1997
22 through January 1, 2007 and from the effective date of this
23 amendatory Act of the 95th General Assembly through the date on
24 which the Commission has approved declarations of competitive
25 service, pursuant to Section 16-113, for all classes of service
26 offered in the service areas of all electric utilities that, on

 

 

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1 December 31, 2005, served at least 100,000 residential
2 customers.
3     "Municipal system" shall have the meaning set forth in
4 Section 17-100.
5     "Real-time pricing" means tariffed retail charges for
6 delivered electric power and energy that vary hour-to-hour and
7 are determined from wholesale market prices using a methodology
8 approved by the Illinois Commerce Commission.
9     "Residential customer" means those retail customers of an
10 electric utility that receive (i) electric utility service for
11 household purposes distributed to a dwelling of 2 or fewer
12 units that is billed under a residential rate or (ii) electric
13 utility service for household purposes distributed to a
14 dwelling unit or units that is billed under a residential rate
15 and is registered by a separate meter for each dwelling unit.
16     "Retail customer" means a single entity using electric
17 power or energy at a single premises and that (A) either (i) is
18 receiving or is eligible to receive tariffed services from an
19 electric utility, or (ii) that is served by a municipal system
20 or electric cooperative within any area in which the municipal
21 system or electric cooperative is or would be entitled to
22 provide service under the law in effect immediately prior to
23 the effective date of this amendatory Act of 1997, or (B) an
24 entity which on the effective date of this Act was receiving
25 electric service from a public utility and (i) was engaged in
26 the practice of resale and redistribution of such electricity

 

 

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1 within a building prior to January 2, 1957, or (ii) was
2 providing lighting services to tenants in a multi-occupancy
3 building, but only to the extent such resale, redistribution or
4 lighting service is authorized by the electric utility's
5 tariffs that were on file with the Commission on the effective
6 date of this Act.
7     "Service area" means (i) the geographic area within which
8 an electric utility was lawfully entitled to provide electric
9 power and energy to retail customers as of the effective date
10 of this amendatory Act of 1997, and includes (ii) the location
11 of any retail customer to which the electric utility was
12 lawfully providing electric utility services on such effective
13 date.
14     "Small commercial retail customer" means those
15 nonresidential retail customers of an electric utility
16 consuming 15,000 kilowatt-hours or less of electricity
17 annually in its service area.
18     "Tariffed service" means services provided to retail
19 customers by an electric utility as defined by its rates on
20 file with the Commission pursuant to the provisions of Article
21 IX of this Act, but shall not include competitive services.
22     "Transition charge" means a charge expressed in cents per
23 kilowatt-hour that is calculated for a customer or class of
24 customers as follows for each year in which an electric utility
25 is entitled to recover transition charges as provided in
26 Section 16-108:

 

 

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1         (1) the amount of revenue that an electric utility
2     would receive from the retail customer or customers if it
3     were serving such customers' electric power and energy
4     requirements as a tariffed service based on (A) all of the
5     customers' actual usage during the 3 years ending 90 days
6     prior to the date on which such customers were first
7     eligible for delivery services pursuant to Section 16-104,
8     and (B) on (i) the base rates in effect on October 1, 1996
9     (adjusted for the reductions required by subsection (b) of
10     Section 16-111, for any reduction resulting from a rate
11     decrease under Section 16-101(b), for any restatement of
12     base rates made in conjunction with an elimination of the
13     fuel adjustment clause pursuant to subsection (b), (d), or
14     (f) of Section 9-220 and for any removal of decommissioning
15     costs from base rates pursuant to Section 16-114) and any
16     separate automatic rate adjustment riders (other than a
17     decommissioning rate as defined in Section 16-114) under
18     which the customers were receiving or, had they been
19     customers, would have received electric power and energy
20     from the electric utility during the year immediately
21     preceding the date on which such customers were first
22     eligible for delivery service pursuant to Section 16-104,
23     or (ii) to the extent applicable, any contract rates,
24     including contracts or rates for consolidated or
25     aggregated billing, under which such customers were
26     receiving electric power and energy from the electric

 

 

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1     utility during such year;
2         (2) less the amount of revenue, other than revenue from
3     transition charges and decommissioning rates, that the
4     electric utility would receive from such retail customers
5     for delivery services provided by the electric utility,
6     assuming such customers were taking delivery services for
7     all of their usage, based on the delivery services tariffs
8     in effect during the year for which the transition charge
9     is being calculated and on the usage identified in
10     paragraph (1);
11         (3) less the market value for the electric power and
12     energy that the electric utility would have used to supply
13     all of such customers' electric power and energy
14     requirements, as a tariffed service, based on the usage
15     identified in paragraph (1), with such market value
16     determined in accordance with Section 16-112 of this Act;
17         (4) less the following amount which represents the
18     amount to be attributed to new revenue sources and cost
19     reductions by the electric utility through the end of the
20     period for which transition costs are recovered pursuant to
21     Section 16-108, referred to in this Article XVI as a
22     "mitigation factor":
23             (A) for nonresidential retail customers, an amount
24         equal to the greater of (i) 0.5 cents per kilowatt-hour
25         during the period October 1, 1999 through December 31,
26         2004, 0.6 cents per kilowatt-hour in calendar year

 

 

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1         2005, and 0.9 cents per kilowatt-hour in calendar year
2         2006, multiplied in each year by the usage identified
3         in paragraph (1), or (ii) an amount equal to the
4         following percentages of the amount produced by
5         applying the applicable base rates (adjusted as
6         described in subparagraph (1)(B)) or contract rate to
7         the usage identified in paragraph (1): 8% for the
8         period October 1, 1999 through December 31, 2002, 10%
9         in calendar years 2003 and 2004, 11% in calendar year
10         2005 and 12% in calendar year 2006; and
11             (B) for residential retail customers, an amount
12         equal to the following percentages of the amount
13         produced by applying the base rates in effect on
14         October 1, 1996 (adjusted as described in subparagraph
15         (1)(B)) to the usage identified in paragraph (1): (i)
16         6% from May 1, 2002 through December 31, 2002, (ii) 7%
17         in calendar years 2003 and 2004, (iii) 8% in calendar
18         year 2005, and (iv) 10% in calendar year 2006;
19         (5) divided by the usage of such customers identified
20     in paragraph (1),
21 provided that the transition charge shall never be less than
22 zero.
23     "Unbundled service" means a component or constituent part
24 of a tariffed service which the electric utility subsequently
25 offers separately to its customers.
26 (Source: P.A. 94-977, eff. 6-30-06.)
 

 

 

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1     (220 ILCS 5/16-103)
2     Sec. 16-103. Service obligations of electric utilities.
3     (a) An electric utility shall continue offering to retail
4 customers each tariffed service that it offered as a distinct
5 and identifiable service on the effective date of this
6 amendatory Act of 1997 until the service is (i) declared
7 competitive pursuant to Section 16-113, or (ii) abandoned
8 pursuant to Section 8-508. Nothing in this subsection shall be
9 construed as limiting an electric utility's right to propose,
10 or the Commission's power to approve, allow or order
11 modifications in the rates, terms and conditions for such
12 services pursuant to Article IX or Section 16-111 of this Act.
13     (b) An electric utility shall also offer, as tariffed
14 services, delivery services in accordance with this Article,
15 the power purchase options described in Section 16-110 and
16 real-time pricing as provided in Section 16-107.
17     (c) Notwithstanding any other provision of this Article,
18 each electric utility shall continue offering to all
19 residential customers and to all small commercial retail
20 customers in its service area, as a tariffed service, bundled
21 electric power and energy delivered to the customer's premises
22 consistent with the bundled utility service provided by the
23 electric utility on the effective date of this amendatory Act
24 of 1997. Upon declaration of the provision of electric power
25 and energy as competitive, the electric utility shall continue

 

 

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1 to offer to such customers, as a tariffed service, bundled
2 service options at rates which reflect recovery of all cost
3 components for providing the service. For those components of
4 the service which have been declared competitive, cost shall be
5 the market based prices. Market based prices as referred to
6 herein shall mean, for electric power and energy, either (i)
7 those prices for electric power and energy determined as
8 provided in Section 16-112, or (ii) the electric utility's cost
9 of obtaining the electric power and energy at wholesale through
10 a competitive bidding or other arms-length acquisition
11 process.
12     (c-1) Electric utilities that serve at least 1,000,000
13 customers must provide tariffed service to Unit Owners'
14 Associations, as defined by Section 2 of the Condominium
15 Property Act, for condominium properties that are not
16 restricted to nonresidential use at rates that do not exceed
17 the rates offered to residential customers. Within 10 days
18 after the effective date of this amendatory Act of the 95th
19 General Assembly, each electric utility shall provide the
20 tariffed service to Unit Owners' Associations required by this
21 subsection and shall reinstate any all-electric discount
22 applicable to any Unit Owners' Association that received such a
23 discount on December 31, 2006.
24     (d) Any residential or small commercial retail customer
25 which elects delivery services is entitled to return to the
26 electric utility's bundled utility tariffed service offering

 

 

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1 provided in accordance with subsection (c) of this Section upon
2 payment of a reasonable administrative fee which shall be set
3 forth in the tariff, provided, however, that the electric
4 utility shall be entitled to impose the condition that such
5 customer may not elect delivery services for up to 24 months
6 thereafter.
7     (e) (Blank). The Commission shall not require an electric
8 utility to offer any tariffed service other than the services
9 required by this Section, and shall not require an electric
10 utility to offer any competitive service.
11 (Source: P.A. 90-561, eff. 12-16-97.)
 
12     (220 ILCS 5/16-111)
13     Sec. 16-111. Rates and restructuring transactions during
14 mandatory transition period.
15     (a) During the mandatory transition period,
16 notwithstanding any provision of Article IX of this Act, and
17 except as provided in subsections (b), (d), (e), and (f) of
18 this Section, the Commission shall order each electric utility
19 that, on December 31, 2005, served at least 100,000 customers
20 in this State to file and implement tariffs: (A) to reinstate,
21 within 10 days after the effective date of this amendatory Act
22 of the 95th General Assembly, all rates charged to the electric
23 utility's customers on December 31, 2006, except that the
24 utility may charge any rate under any delivery services tariff
25 of the utility that became effective on or after January 2,

 

 

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1 2007; and (B) to refund to the utility's customers any amounts
2 charged to those customers, from January 2, 2007 until 10 days
3 after the effective date of this amendatory Act of the 95th
4 General Assembly, that exceed the rates charged to the electric
5 utility's customers on December 31, 2006, not including any
6 rate charged under any delivery services tariff of the utility
7 that became effective on or after January 2, 2007. This refund:
8         (1) must be issued no later than December 1, 2007;
9         (2) must be made by a negotiable check of the utility
10     to be paid to the order of the customer;
11         (3) must include interest on the full amount of the
12     refund, beginning January 2, 2007, at the same interest
13     rate the Commission requires utilities to pay on customer
14     deposits; and
15         (4) must be accompanied by a notice that states, in at
16     least 14-point bold type, "THIS REFUND IS MADE IN
17     ACCORDANCE WITH A MANDATE OF THE GENERAL ASSEMBLY OF THE
18     STATE OF ILLINOIS." No other communication may be contained
19     in the envelope with the refund check and no other
20     communication concerning the refund may be contained on the
21     notice, check, or envelope.
22 After electric rates are reinstated in accordance with this
23 subsection (a), the Commission shall not, prior to July 1,
24 2008, (i) initiate, authorize or order any change by way of
25 increase to those components of the reinstated rates that
26 reflect the cost of electric energy (other than in connection

 

 

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1 with a request for rate increase which was filed after
2 September 1, 1997 but prior to October 15, 1997, by an electric
3 utility serving less than 12,500 customers in this State) or
4 (ii) , (ii) initiate or, unless requested by the electric
5 utility, authorize or order any change by way of decrease,
6 restructuring or unbundling (except as provided in Section
7 16-109A), in the rates of any electric utility that were in
8 effect on October 1, 1996, or (iii) in any order approving any
9 application for a merger pursuant to Section 7-204 that was
10 pending as of May 16, 1997, impose any condition requiring any
11 filing for an increase, decrease, or change in, or other review
12 of, an electric utility's rates or enforce any such condition
13 of any such order. However, ; provided, however, that this
14 subsection shall not prohibit the Commission from:
15         (1) (blank); approving the application of an electric
16     utility to implement an alternative to rate of return
17     regulation or a regulatory mechanism that rewards or
18     penalizes the electric utility through adjustment of rates
19     based on utility performance, pursuant to Section 9-244;
20         (2) authorizing an electric utility to eliminate its
21     fuel adjustment clause and adjust its base rate tariffs in
22     accordance with subsection (b), (d), or (f) of Section
23     9-220 of this Act, to fix its fuel adjustment factor in
24     accordance with subsection (c) of Section 9-220 of this
25     Act, or to eliminate its fuel adjustment clause in
26     accordance with subsection (e) of Section 9-220 of this

 

 

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1     Act;
2         (3) ordering into effect tariffs for delivery services
3     and transition charges in accordance with Sections 16-104
4     and 16-108, for real-time pricing in accordance with
5     Section 16-107, or the options required by Section 16-110
6     and subsection (n) of 16-112, allowing a billing experiment
7     in accordance with Section 16-106, or modifying delivery
8     services tariffs in accordance with Section 16-109; or
9         (4) ordering or allowing into effect any tariff to
10     recover charges pursuant to Sections 9-201.5, 9-220.1,
11     9-221, 9-222 (except as provided in Section 9-222.1),
12     16-108, and 16-114 of this Act, Section 5-5 of the
13     Electricity Infrastructure Maintenance Fee Law, Section
14     6-5 of the Renewable Energy, Energy Efficiency, and Coal
15     Resources Development Law of 1997, and Section 13 of the
16     Energy Assistance Act.
17     After December 31, 2004, the provisions of this subsection
18 (a) shall not apply to an electric utility whose average
19 residential retail rate was less than or equal to 90% of the
20 average residential retail rate for the "Midwest Utilities", as
21 that term is defined in subsection (b) of this Section, based
22 on data reported on Form 1 to the Federal Energy Regulatory
23 Commission for calendar year 1995, and which served between
24 150,000 and 250,000 retail customers in this State on January
25 1, 1995 unless the electric utility or its holding company has
26 been acquired by or merged with an affiliate of another

 

 

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1 electric utility subsequent to January 1, 2002. This exemption
2 shall be limited to this subsection (a) and shall not extend to
3 any other provisions of this Act.
4     (a-5) During the remainder of the mandatory transition
5 period, if any, the Commission may modify rates only in
6 accordance with Article IX of this Act.
7     (b) Notwithstanding the provisions of subsection (a), each
8 Illinois electric utility serving more than 12,500 customers in
9 Illinois shall file tariffs (i) reducing, effective August 1,
10 1998, each component of its base rates to residential retail
11 customers by 15% from the base rates in effect immediately
12 prior to January 1, 1998 and (ii) if the public utility
13 provides electric service to (A) more than 500,000 customers
14 but less than 1,000,000 customers in this State on January 1,
15 1999, reducing, effective May 1, 2002, each component of its
16 base rates to residential retail customers by an additional 5%
17 from the base rates in effect immediately prior to January 1,
18 1998, or (B) at least 1,000,000 customers in this State on
19 January 1, 1999, reducing, effective October 1, 2001, each
20 component of its base rates to residential retail customers by
21 an additional 5% from the base rates in effect immediately
22 prior to January 1, 1998. Provided, however, that (A) if an
23 electric utility's average residential retail rate is less than
24 or equal to the average residential retail rate for a group of
25 Midwest Utilities (consisting of all investor-owned electric
26 utilities with annual system peaks in excess of 1000 megawatts

 

 

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1 in the States of Illinois, Indiana, Iowa, Kentucky, Michigan,
2 Missouri, Ohio, and Wisconsin), based on data reported on Form
3 1 to the Federal Energy Regulatory Commission for calendar year
4 1995, then it shall only be required to file tariffs (i)
5 reducing, effective August 1, 1998, each component of its base
6 rates to residential retail customers by 5% from the base rates
7 in effect immediately prior to January 1, 1998, (ii) reducing,
8 effective October 1, 2000, each component of its base rates to
9 residential retail customers by the lesser of 5% of the base
10 rates in effect immediately prior to January 1, 1998 or the
11 percentage by which the electric utility's average residential
12 retail rate exceeds the average residential retail rate of the
13 Midwest Utilities, based on data reported on Form 1 to the
14 Federal Energy Regulatory Commission for calendar year 1999,
15 and (iii) reducing, effective October 1, 2002, each component
16 of its base rates to residential retail customers by an
17 additional amount equal to the lesser of 5% of the base rates
18 in effect immediately prior to January 1, 1998 or the
19 percentage by which the electric utility's average residential
20 retail rate exceeds the average residential retail rate of the
21 Midwest Utilities, based on data reported on Form 1 to the
22 Federal Energy Regulatory Commission for calendar year 2001;
23 and (B) if the average residential retail rate of an electric
24 utility serving between 150,000 and 250,000 retail customers in
25 this State on January 1, 1995 is less than or equal to 90% of
26 the average residential retail rate for the Midwest Utilities,

 

 

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1 based on data reported on Form 1 to the Federal Energy
2 Regulatory Commission for calendar year 1995, then it shall
3 only be required to file tariffs (i) reducing, effective August
4 1, 1998, each component of its base rates to residential retail
5 customers by 2% from the base rates in effect immediately prior
6 to January 1, 1998; (ii) reducing, effective October 1, 2000,
7 each component of its base rates to residential retail
8 customers by 2% from the base rate in effect immediately prior
9 to January 1, 1998; and (iii) reducing, effective October 1,
10 2002, each component of its base rates to residential retail
11 customers by 1% from the base rates in effect immediately prior
12 to January 1, 1998. Provided, further, that any electric
13 utility for which a decrease in base rates has been or is
14 placed into effect between October 1, 1996 and the dates
15 specified in the preceding sentences of this subsection, other
16 than pursuant to the requirements of this subsection, shall be
17 entitled to reduce the amount of any reduction or reductions in
18 its base rates required by this subsection by the amount of
19 such other decrease. The tariffs required under this subsection
20 shall be filed 45 days in advance of the effective date.
21 Notwithstanding anything to the contrary in Section 9-220 of
22 this Act, no restatement of base rates in conjunction with the
23 elimination of a fuel adjustment clause under that Section
24 shall result in a lesser decrease in base rates than customers
25 would otherwise receive under this subsection had the electric
26 utility's fuel adjustment clause not been eliminated.

 

 

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1     (c) Any utility reducing its base rates by 15% on August 1,
2 1998 pursuant to subsection (b) shall include the following
3 statement on its bills for residential customers from August 1
4 through December 31, 1998: "Effective August 1, 1998, your
5 rates have been reduced by 15% by the Electric Service Customer
6 Choice and Rate Relief Law of 1997 passed by the Illinois
7 General Assembly.". Any utility reducing its base rates by 5%
8 on August 1, 1998, pursuant to subsection (b) shall include the
9 following statement on its bills for residential customers from
10 August 1 through December 31, 1998: "Effective August 1, 1998,
11 your rates have been reduced by 5% by the Electric Service
12 Customer Choice and Rate Relief Law of 1997 passed by the
13 Illinois General Assembly.".
14     Any utility reducing its base rates by 2% on August 1, 1998
15 pursuant to subsection (b) shall include the following
16 statement on its bills for residential customers from August 1
17 through December 31, 1998: "Effective August 1, 1998, your
18 rates have been reduced by 2% by the Electric Service Customer
19 Choice and Rate Relief Law of 1997 passed by the Illinois
20 General Assembly.".
21     (d) (Blank). During the mandatory transition period, but
22 not before January 1, 2000, and notwithstanding the provisions
23 of subsection (a), an electric utility may request an increase
24 in its base rates if the electric utility demonstrates that the
25 2-year average of its earned rate of return on common equity,
26 calculated as its net income applicable to common stock divided

 

 

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1 by the average of its beginning and ending balances of common
2 equity using data reported in the electric utility's Form 1
3 report to the Federal Energy Regulatory Commission but adjusted
4 to remove the effects of accelerated depreciation or
5 amortization or other transition or mitigation measures
6 implemented by the electric utility pursuant to subsection (g)
7 of this Section and the effect of any refund paid pursuant to
8 subsection (e) of this Section, is below the 2-year average for
9 the same 2 years of the monthly average yields of 30-year U.S.
10 Treasury bonds published by the Board of Governors of the
11 Federal Reserve System in its weekly H.15 Statistical Release
12 or successor publication. The Commission shall review the
13 electric utility's request, and may review the justness and
14 reasonableness of all rates for tariffed services, in
15 accordance with the provisions of Article IX of this Act,
16 provided that the Commission shall consider any special or
17 negotiated adjustments to the revenue requirement agreed to
18 between the electric utility and the other parties to the
19 proceeding. In setting rates under this Section, the Commission
20 shall exclude the costs and revenues that are associated with
21 competitive services and any billing or pricing experiments
22 conducted under Section 16-106.
23     (e) (Blank). For the purposes of this subsection (e) all
24 calculations and comparisons shall be performed for the
25 Illinois operations of multijurisdictional utilities. During
26 the mandatory transition period, notwithstanding the

 

 

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1 provisions of subsection (a), if the 2-year average of an
2 electric utility's earned rate of return on common equity,
3 calculated as its net income applicable to common stock divided
4 by the average of its beginning and ending balances of common
5 equity using data reported in the electric utility's Form 1
6 report to the Federal Energy Regulatory Commission but adjusted
7 to remove the effect of any refund paid under this subsection
8 (e), and further adjusted to include the annual amortization of
9 any difference between the consideration received by an
10 affiliated interest of the electric utility in the sale of an
11 asset which had been sold or transferred by the electric
12 utility to the affiliated interest subsequent to the effective
13 date of this amendatory Act of 1997 and the consideration for
14 which such asset had been sold or transferred to the affiliated
15 interest, with such difference to be amortized ratably from the
16 date of the sale by the affiliated interest to December 31,
17 2006, exceeds the 2-year average of the Index for the same 2
18 years by 1.5 or more percentage points, the electric utility
19 shall make refunds to customers beginning the first billing day
20 of April in the following year in the manner described in
21 paragraph (3) of this subsection. For purposes of this
22 subsection (e), the "Index" shall be the sum of (A) the average
23 for the 12 months ended September 30 of the monthly average
24 yields of 30-year U.S. Treasury bonds published by the Board of
25 Governors of the Federal Reserve System in its weekly H.15
26 Statistical Release or successor publication for each year 1998

 

 

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1 through 2006, and (B) (i) 4.00 percentage points for each of
2 the 12-month periods ending September 30, 1998 through
3 September 30, 1999 or 8.00 percentage points if the electric
4 utility's average residential retail rate is less than or equal
5 to 90% of the average residential retail rate for the "Midwest
6 Utilities", as that term is defined in subsection (b) of this
7 Section, based on data reported on Form 1 to the Federal Energy
8 Regulatory Commission for calendar year 1995, and the electric
9 utility served between 150,000 and 250,000 retail customers on
10 January 1, 1995, (ii) 7.00 percentage points for each of the
11 12-month periods ending September 30, 2000 through September
12 30, 2006 if the electric utility was providing service to at
13 least 1,000,000 customers in this State on January 1, 1999, or
14 9.00 percentage points if the electric utility's average
15 residential retail rate is less than or equal to 90% of the
16 average residential retail rate for the "Midwest Utilities", as
17 that term is defined in subsection (b) of this Section, based
18 on data reported on Form 1 to the Federal Energy Regulatory
19 Commission for calendar year 1995 and the electric utility
20 served between 150,000 and 250,000 retail customers in this
21 State on January 1, 1995, (iii) 11.00 percentage points for
22 each of the 12-month periods ending September 30, 2000 through
23 September 30, 2006, but only if the electric utility's average
24 residential retail rate is less than or equal to 90% of the
25 average residential retail rate for the "Midwest Utilities", as
26 that term is defined in subsection (b) of this Section, based

 

 

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1 on data reported on Form 1 to the Federal Energy Regulatory
2 Commission for calendar year 1995, the electric utility served
3 between 150,000 and 250,000 retail customers in this State on
4 January 1, 1995, and the electric utility offers delivery
5 services on or before June 1, 2000 to retail customers whose
6 annual electric energy use comprises 33% of the kilowatt hour
7 sales to that group of retail customers that are classified
8 under Division D, Groups 20 through 39 of the Standard
9 Industrial Classifications set forth in the Standard
10 Industrial Classification Manual published by the United
11 States Office of Management and Budget, excluding the kilowatt
12 hour sales to those customers that are eligible for delivery
13 services pursuant to Section 16-104(a)(1)(i), and offers
14 delivery services to its remaining retail customers classified
15 under Division D, Groups 20 through 39 on or before October 1,
16 2000, and, provided further, that the electric utility commits
17 not to petition pursuant to Section 16-108(f) for entry of an
18 order by the Commission authorizing the electric utility to
19 implement transition charges for an additional period after
20 December 31, 2006, or (iv) 5.00 percentage points for each of
21 the 12-month periods ending September 30, 2000 through
22 September 30, 2006 for all other electric utilities or 7.00
23 percentage points for such utilities for each of the 12-month
24 periods ending September 30, 2000 through September 30, 2006
25 for any such utility that commits not to petition pursuant to
26 Section 16-108(f) for entry of an order by the Commission

 

 

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1 authorizing the electric utility to implement transition
2 charges for an additional period after December 31, 2006 or
3 11.00 percentage points for each of the 12-month periods ending
4 September 30, 2005 and September 30, 2006 for each electric
5 utility providing service to fewer than 6,500, or between
6 75,000 and 150,000, electric retail customers in this State on
7 January 1, 1995 if such utility commits not to petition
8 pursuant to Section 16-108(f) for entry of an order by the
9 Commission authorizing the electric utility to implement
10 transition charges for an additional period after December 31,
11 2006.
12         (1) For purposes of this subsection (e), "excess
13     earnings" means the difference between (A) the 2-year
14     average of the electric utility's earned rate of return on
15     common equity, less (B) the 2-year average of the sum of
16     (i) the Index applicable to each of the 2 years and (ii)
17     1.5 percentage points; provided, that "excess earnings"
18     shall never be less than zero.
19         (2) On or before March 31 of each year 2000 through
20     2007 each electric utility shall file a report with the
21     Commission showing its earned rate of return on common
22     equity, calculated in accordance with this subsection, for
23     the preceding calendar year and the average for the
24     preceding 2 calendar years.
25         (3) If an electric utility has excess earnings,
26     determined in accordance with paragraphs (1) and (2) of

 

 

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1     this subsection, the refunds which the electric utility
2     shall pay to its customers beginning the first billing day
3     of April in the following year shall be calculated and
4     applied as follows:
5             (i) The electric utility's excess earnings shall
6         be multiplied by the average of the beginning and
7         ending balances of the electric utility's common
8         equity for the 2-year period in which excess earnings
9         occurred.
10             (ii) The result of the calculation in (i) shall be
11         multiplied by 0.50 and then divided by a number equal
12         to 1 minus the electric utility's composite federal and
13         State income tax rate.
14             (iii) The result of the calculation in (ii) shall
15         be divided by the sum of the electric utility's
16         projected total kilowatt-hour sales to retail
17         customers plus projected kilowatt-hours to be
18         delivered to delivery services customers over a one
19         year period beginning with the first billing date in
20         April in the succeeding year to determine a cents per
21         kilowatt-hour refund factor.
22             (iv) The cents per kilowatt-hour refund factor
23         calculated in (iii) shall be credited to the electric
24         utility's customers by applying the factor on the
25         customer's monthly bills to each kilowatt-hour sold or
26         delivered until the total amount calculated in (ii) has

 

 

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1         been paid to customers.
2     (f) During the mandatory transition period, an electric
3 utility may file revised tariffs reducing the price of any
4 tariffed service offered by the electric utility for all
5 customers taking that tariffed service, which shall be
6 effective 7 days after filing.
7     (g) During the mandatory transition period, an electric
8 utility may, without obtaining any approval of the Commission
9 other than that provided for in this subsection and
10 notwithstanding any other provision of this Act or any rule or
11 regulation of the Commission that would require such approval:
12         (1) implement a reorganization, other than a merger of
13     2 or more public utilities as defined in Section 3-105 or
14     their holding companies;
15         (2) retire generating plants from service;
16         (3) sell, assign, lease or otherwise transfer assets to
17     an affiliated or unaffiliated entity and as part of such
18     transaction enter into service agreements, power purchase
19     agreements, or other agreements with the transferee;
20     provided, however, that the prices, terms and conditions of
21     any power purchase agreement must be approved or allowed
22     into effect by the Federal Energy Regulatory Commission; or
23         (4) use any accelerated cost recovery method including
24     accelerated depreciation, accelerated amortization or
25     other capital recovery methods, or record reductions to the
26     original cost of its assets.

 

 

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1     In order to implement a reorganization, retire generating
2 plants from service, or sell, assign, lease or otherwise
3 transfer assets pursuant to this Section, the electric utility
4 shall comply with subsections (c) and (d) of Section 16-128, if
5 applicable, and subsection (k) of this Section, if applicable,
6 and provide the Commission with at least 30 days notice of the
7 proposed reorganization or transaction, which notice shall
8 include the following information:
9             (i) a complete statement of the entries that the
10         electric utility will make on its books and records of
11         account to implement the proposed reorganization or
12         transaction together with a certification from an
13         independent certified public accountant that such
14         entries are in accord with generally accepted
15         accounting principles and, if the Commission has
16         previously approved guidelines for cost allocations
17         between the utility and its affiliates, a
18         certification from the chief accounting officer of the
19         utility that such entries are in accord with those cost
20         allocation guidelines;
21             (ii) a description of how the electric utility will
22         use proceeds of any sale, assignment, lease or transfer
23         to retire debt or otherwise reduce or recover the costs
24         of services provided by such electric utility;
25             (iii) a list of all federal approvals or approvals
26         required from departments and agencies of this State,

 

 

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1         other than the Commission, that the electric utility
2         has or will obtain before implementing the
3         reorganization or transaction;
4             (iv) an irrevocable commitment by the electric
5         utility that it will not, as a result of the
6         transaction, impose any stranded cost charges that it
7         might otherwise be allowed to charge retail customers
8         under federal law or increase the transition charges
9         that it is otherwise entitled to collect under this
10         Article XVI; and
11             (v) if the electric utility proposes to sell,
12         assign, lease or otherwise transfer a generating plant
13         that brings the amount of net dependable generating
14         capacity transferred pursuant to this subsection to an
15         amount equal to or greater than 15% of the electric
16         utility's net dependable capacity as of the effective
17         date of this amendatory Act of 1997, and enters into a
18         power purchase agreement with the entity to which such
19         generating plant is sold, assigned, leased, or
20         otherwise transferred, the electric utility also
21         agrees, if its fuel adjustment clause has not already
22         been eliminated, to eliminate its fuel adjustment
23         clause in accordance with subsection (b) of Section
24         9-220 for a period of time equal to the length of any
25         such power purchase agreement or successor agreement,
26         or until January 1, 2005, whichever is longer; if the

 

 

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1         capacity of the generating plant so transferred and
2         related power purchase agreement does not result in the
3         elimination of the fuel adjustment clause under this
4         subsection, and the fuel adjustment clause has not
5         already been eliminated, the electric utility shall
6         agree that the costs associated with the transferred
7         plant that are included in the calculation of the rate
8         per kilowatt-hour to be applied pursuant to the
9         electric utility's fuel adjustment clause during such
10         period shall not exceed the per kilowatt-hour cost
11         associated with such generating plant included in the
12         electric utility's fuel adjustment clause during the
13         full calendar year preceding the transfer, with such
14         limit to be adjusted each year thereafter by the Gross
15         Domestic Product Implicit Price Deflator.
16             (vi) In addition, if the electric utility proposes
17         to sell, assign, or lease, (A) either (1) an amount of
18         generating plant that brings the amount of net
19         dependable generating capacity transferred pursuant to
20         this subsection to an amount equal to or greater than
21         15% of its net dependable capacity on the effective
22         date of this amendatory Act of 1997, or (2) one or more
23         generating plants with a total net dependable capacity
24         of 1100 megawatts, or (B) transmission and
25         distribution facilities that either (1) bring the
26         amount of transmission and distribution facilities

 

 

09500SB1592ham003 - 32 - LRB095 11114 BDD 36924 a

1         transferred pursuant to this subsection to an amount
2         equal to or greater than 15% of the electric utility's
3         total depreciated original cost investment in such
4         facilities, or (2) represent an investment of
5         $25,000,000 in terms of total depreciated original
6         cost, the electric utility shall provide, in addition
7         to the information listed in subparagraphs (i) through
8         (v), the following information: (A) a description of
9         how the electric utility will meet its service
10         obligations under this Act in a safe and reliable
11         manner and (B) the electric utility's projected earned
12         rate of return on common equity, calculated in
13         accordance with subsection (d) of this Section, for
14         each year from the date of the notice through December
15         31, 2006 both with and without the proposed
16         transaction. If the Commission has not issued an order
17         initiating a hearing on the proposed transaction
18         within 30 days after the date the electric utility's
19         notice is filed, the transaction shall be deemed
20         approved. The Commission may, after notice and
21         hearing, prohibit the proposed transaction if it makes
22         either or both of the following findings: (1) that the
23         proposed transaction will render the electric utility
24         unable to provide its tariffed services in a safe and
25         reliable manner, or (2) that there is a strong
26         likelihood that consummation of the proposed

 

 

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1         transaction will result in the electric utility being
2         entitled to request an increase in its base rates
3         during the mandatory transition period pursuant to
4         subsection (d) of this Section. Any hearing initiated
5         by the Commission into the proposed transaction shall
6         be completed, and the Commission's final order
7         approving or prohibiting the proposed transaction
8         shall be entered, within 90 days after the date the
9         electric utility's notice was filed. Provided,
10         however, that a sale, assignment, or lease of
11         transmission facilities to an independent system
12         operator that meets the requirements of Section 16-126
13         shall not be subject to Commission approval under this
14         Section.
15             In any proceeding conducted by the Commission
16         pursuant to this subparagraph (vi), intervention shall
17         be limited to parties with a direct interest in the
18         transaction which is the subject of the hearing and any
19         statutory consumer protection agency as defined in
20         subsection (d) of Section 9-102.1. Notwithstanding the
21         provisions of Section 10-113 of this Act, any
22         application seeking rehearing of an order issued under
23         this subparagraph (vi), whether filed by the electric
24         utility or by an intervening party, shall be filed
25         within 10 days after service of the order.
26     The Commission shall not in any subsequent proceeding or

 

 

09500SB1592ham003 - 34 - LRB095 11114 BDD 36924 a

1 otherwise, review such a reorganization or other transaction
2 authorized by this Section, but shall retain the authority to
3 allocate costs as stated in Section 16-111(i). An entity to
4 which an electric utility sells, assigns, leases or transfers
5 assets pursuant to this subsection (g) shall not, as a result
6 of the transactions specified in this subsection (g), be deemed
7 a public utility as defined in Section 3-105. Nothing in this
8 subsection (g) shall change any requirement under the
9 jurisdiction of the Illinois Department of Nuclear Safety
10 including, but not limited to, the payment of fees. Nothing in
11 this subsection (g) shall exempt a utility from obtaining a
12 certificate pursuant to Section 8-406 of this Act for the
13 construction of a new electric generating facility. Nothing in
14 this subsection (g) is intended to exempt the transactions
15 hereunder from the operation of the federal or State antitrust
16 laws. Nothing in this subsection (g) shall require an electric
17 utility to use the procedures specified in this subsection for
18 any of the transactions specified herein. Any other procedure
19 available under this Act may, at the electric utility's
20 election, be used for any such transaction.
21     (h) During the mandatory transition period, the Commission
22 shall not establish or use any rates of depreciation, which for
23 purposes of this subsection shall include amortization, for any
24 electric utility other than those established pursuant to
25 subsection (c) of Section 5-104 of this Act or utilized
26 pursuant to subsection (g) of this Section. Provided, however,

 

 

09500SB1592ham003 - 35 - LRB095 11114 BDD 36924 a

1 that in any proceeding to review an electric utility's rates
2 for tariffed services pursuant to Section 9-201, 9-202, 9-250
3 or 16-111(d) of this Act, the Commission may establish new
4 rates of depreciation for the electric utility in the same
5 manner provided in subsection (d) of Section 5-104 of this Act.
6 An electric utility implementing an accelerated cost recovery
7 method including accelerated depreciation, accelerated
8 amortization or other capital recovery methods, or recording
9 reductions to the original cost of its assets, pursuant to
10 subsection (g) of this Section, shall file a statement with the
11 Commission describing the accelerated cost recovery method to
12 be implemented or the reduction in the original cost of its
13 assets to be recorded. Upon the filing of such statement, the
14 accelerated cost recovery method or the reduction in the
15 original cost of assets shall be deemed to be approved by the
16 Commission as though an order had been entered by the
17 Commission.
18     (i) Subsequent to the mandatory transition period, the
19 Commission, in any proceeding to establish rates and charges
20 for tariffed services offered by an electric utility, may shall
21 consider, among other factors, only (1) the then current or
22 projected revenues, costs, investments and cost of capital
23 directly or indirectly associated with the provision of such
24 tariffed services; (2) collection of transition charges in
25 accordance with Sections 16-102 and 16-108 of this Act; (3)
26 recovery of any employee transition costs as described in

 

 

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1 Section 16-128 which the electric utility is continuing to
2 incur, including recovery of any unamortized portion of such
3 costs previously incurred or committed, with such costs to be
4 equitably allocated among bundled services, delivery services,
5 and contracts with alternative retail electric suppliers; and
6 (4) recovery of the costs associated with the electric
7 utility's compliance with decommissioning funding
8 requirements; and shall not consider any other revenues, costs,
9 investments or cost of capital of either the electric utility
10 or of any affiliate of the electric utility that are not
11 associated with the provision of tariffed services. In setting
12 rates for tariffed services, the Commission shall equitably
13 allocate joint and common costs and investments between the
14 electric utility's competitive and tariffed services. In
15 determining the justness and reasonableness of the electric
16 power and energy component of an electric utility's rates for
17 tariffed services subsequent to the mandatory transition
18 period and prior to the time that the provision of such
19 electric power and energy is declared competitive, the
20 Commission shall consider the extent to which the electric
21 utility's tariffed rates for such component for each customer
22 class exceed the market value determined pursuant to Section
23 16-112, and, if the electric power and energy component of such
24 tariffed rate exceeds the market value by more than 10% for any
25 customer class, may establish such electric power and energy
26 component at a rate equal to the market value plus 10%. In any

 

 

09500SB1592ham003 - 37 - LRB095 11114 BDD 36924 a

1 such case, the Commission may also elect to extend the
2 provisions of Section 16-111(e) for any period in which the
3 electric utility is collecting transition charges, using
4 information applicable to such period.
5     (j) During the mandatory transition period, an electric
6 utility may elect to transfer to a non-operating income account
7 under the Commission's Uniform System of Accounts either or
8 both of (i) an amount of unamortized investment tax credit that
9 is in addition to the ratable amount which is credited to the
10 electric utility's operating income account for the year in
11 accordance with Section 46(f)(2) of the federal Internal
12 Revenue Code of 1986, as in effect prior to P.L. 101-508, or
13 (ii) "excess tax reserves", as that term is defined in Section
14 203(e)(2)(A) of the federal Tax Reform Act of 1986, provided
15 that (A) the amount transferred may not exceed the amount of
16 the electric utility's assets that were created pursuant to
17 Statement of Financial Accounting Standards No. 71 which the
18 electric utility has written off during the mandatory
19 transition period, and (B) the transfer shall not be effective
20 until approved by the Internal Revenue Service. An electric
21 utility electing to make such a transfer shall file a statement
22 with the Commission stating the amount and timing of the
23 transfer for which it intends to request approval of the
24 Internal Revenue Service, along with a copy of its proposed
25 request to the Internal Revenue Service for a ruling. The
26 Commission shall issue an order within 14 days after the

 

 

09500SB1592ham003 - 38 - LRB095 11114 BDD 36924 a

1 electric utility's filing approving, subject to receipt of
2 approval from the Internal Revenue Service, the proposed
3 transfer.
4     (k) If an electric utility is selling or transferring to a
5 single buyer 5 or more generating plants located in this State
6 with a total net dependable capacity of 5000 megawatts or more
7 pursuant to subsection (g) of this Section and has obtained a
8 sale price or consideration that exceeds 200% of the book value
9 of such plants, the electric utility must provide to the
10 Governor, the President of the Illinois Senate, the Minority
11 Leader of the Illinois Senate, the Speaker of the Illinois
12 House of Representatives, and the Minority Leader of the
13 Illinois House of Representatives no later than 15 days after
14 filing its notice under subsection (g) of this Section or 5
15 days after the date on which this subsection (k) becomes law,
16 whichever is later, a written commitment in which such electric
17 utility agrees to expend $2 billion outside the corporate
18 limits of any municipality with 1,000,000 or more inhabitants
19 within such electric utility's service area, over a 6-year
20 period beginning with the calendar year in which the notice is
21 filed, on projects, programs, and improvements within its
22 service area relating to transmission and distribution
23 including, without limitation, infrastructure expansion,
24 repair and replacement, capital investments, operations and
25 maintenance, and vegetation management.
26     (l) The provisions of this amendatory Act of the 95th

 

 

09500SB1592ham003 - 39 - LRB095 11114 BDD 36924 a

1 General Assembly relating to (i) the reinstatement of rates and
2 (ii) refunds to customers are separate issues and severable. If
3 either of those provisions or its application to any person or
4 circumstance is held invalid, then the invalidity of that
5 provision or application does not affect the other provision or
6 its application. This subsection (l) does not in any way limit
7 the general severability clause of Section 99-97 of this
8 amendatory Act of the 95th General Assembly.
9 (Source: P.A. 91-50, eff. 6-30-99; 92-537, eff. 6-6-02; 92-690,
10 eff. 7-18-02; revised 9-10-02.)
 
11     (220 ILCS 5/16-113)
12     Sec. 16-113. Declaration of service as a competitive
13 service.
14     (a) An electric utility may, by petition, request the
15 Commission to declare a tariffed service provided by the
16 electric utility to be a competitive service. The electric
17 utility shall give notice of its petition to the public in the
18 same manner that public notice is provided for proposed general
19 increases in rates for tariffed services, in accordance with
20 rules and regulations prescribed by the Commission. The
21 Commission shall hold a hearing and on the petition if a
22 hearing is deemed necessary by the Commission. The Commission
23 shall declare the class of tariffed service to be a competitive
24 service for some identifiable customer segment or group of
25 customers, or some clearly defined geographical area within the

 

 

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1 electric utility's service area, only after the electric
2 utility demonstrates that at least 33% of the customers in the
3 electric utility's service area that are eligible to take the
4 class of tariffed service instead take service from alternative
5 retail electric suppliers, as defined in Section 16-102, and
6 that at least 3 alternative retail electric suppliers provide
7 service that is comparable to the class of tariffed service to
8 those customers in the utility's service area that do not take
9 service from the electric utility; if the service or a
10 reasonably equivalent substitute service is reasonably
11 available to the customer segment or group or in the defined
12 geographical area at a comparable price from one or more
13 providers other than the electric utility or an affiliate of
14 the electric utility, and the electric utility has lost or
15 there is a reasonable likelihood that the electric utility will
16 lose business for the service to the other provider or
17 providers; provided, that the Commission may not declare the
18 provision of electric power and energy to be competitive
19 pursuant to this subsection with respect to (i) any retail
20 customer or group of retail customers that is not eligible
21 pursuant to Section 16-104 to take delivery services provided
22 by the electric utility and (ii) any residential and small
23 commercial retail customers prior to the last date on which
24 such customers are required to pay transition charges. In
25 determining whether to grant or deny a petition to declare the
26 provision of electric power and energy competitive, the

 

 

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1 Commission shall consider, in applying the above criteria,
2 whether there is adequate transmission capacity into the
3 service area of the petitioning electric utility to make
4 electric power and energy reasonably available to the customer
5 segment or group or in the defined geographical area from one
6 or more providers other than the electric utility or an
7 affiliate of the electric utility, in accordance with this
8 subsection. The Commission shall make its determination and
9 issue its final order declaring or refusing to declare the
10 service to be a competitive service within 180 120 days
11 following the date that the petition is filed, or otherwise the
12 petition shall be deemed to be granted; provided, that if the
13 petition is deemed to be granted by operation of law, the
14 Commission shall not thereby be precluded from finding and
15 ordering, in a subsequent proceeding initiated by the
16 Commission, and after notice and hearing, that the service is
17 not competitive based on the criteria set forth in this
18 subsection.
19     (b) Any customer except a customer identified in subsection
20 (c) of Section 16-103 who is taking a tariffed service that is
21 declared to be a competitive service pursuant to subsection (a)
22 of this Section shall be entitled to continue to take the
23 service from the electric utility on a tariffed basis for a
24 period of 3 years following the date that the service is
25 declared competitive, or such other period as is stated in the
26 electric utility's tariff pursuant to Section 16-110. This

 

 

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1 subsection shall not require the electric utility to offer or
2 provide on a tariffed basis any service to any customer (except
3 those customers identified in subsection (c) of Section 16-103)
4 that was not taking such service on a tariffed basis on the
5 date the service was declared to be competitive.
6     (c) If the Commission denies a petition to declare a
7 service to be a competitive service, or determines in a
8 separate proceeding that a service is not competitive based on
9 the criteria set forth in subsection (a), the electric utility
10 may file a new petition no earlier than 6 months following the
11 date of the Commission's order, requesting, on the basis of
12 additional or different facts and circumstances, that the
13 service be declared to be a competitive service.
14     (d) The Commission shall not deny a petition to declare a
15 service to be a competitive service, and shall not find that a
16 service is not a competitive service, on the grounds that it
17 has previously denied the petition of another electric utility
18 to declare the same or a similar service to be a competitive
19 service or has previously determined that the same or a similar
20 service provided by another electric utility is not a
21 competitive service.
22     (e) An electric utility may declare a service, other than
23 delivery services or the provision of electric power or energy,
24 to be competitive by filing with the Commission at least 14
25 days prior to the date on which the service is to become
26 competitive a notice describing the service that is being

 

 

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1 declared competitive and the date on which it will become
2 competitive; provided, that any customer who is taking a
3 tariffed service that is declared to be a competitive service
4 pursuant to this subsection (e) shall be entitled to continue
5 to take the service from the electric utility on a tariffed
6 basis until the electric utility files, and the Commission
7 grants, a petition to declare the service competitive in
8 accordance with subsection (a) of this Section. The Commission
9 shall be authorized to find and order, after notice and hearing
10 in a subsequent proceeding initiated by the Commission, that
11 any service declared to be competitive pursuant to this
12 subsection (e) is not competitive in accordance with the
13 criteria set forth in subsection (a) of this Section.
14 (Source: P.A. 90-561, eff. 12-16-97.)
 
15     (220 ILCS 5/16-135 new)
16     Sec. 16-135. The Consumers Overbilled and Reimbursed for
17 Electricity Fund.
18     (a) The Consumers Overbilled and Reimbursed for
19 Electricity Fund is created as a special fund in the State
20 treasury. Subject to appropriation, moneys in the Fund shall be
21 distributed and paid or credited as provided in this Section.
22 Income earned on amounts in the Fund shall be deposited into
23 the Fund.
24     (b) In January 2008, or as soon thereafter as practical,
25 the Department of Revenue shall make payments from the Fund to

 

 

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1 each utility that has made refunds under item (B) in subsection
2 (a) of Section 16-111 in the amount of those refunds made by
3 the utility together with interest that is reasonably incurred
4 from the date that the refunds were made to the date of payment
5 to the utility under this subsection.
6     (c) Beginning 10 days after the effective date of this
7 amendatory Act of the 95th General Assembly and through the end
8 of the calendar month in which that date occurs constitutes the
9 first rate-reduction month. Thereafter, each calendar month
10 constitutes a rate-reduction month.
11     (d) For each rate-reduction month, the Department of
12 Revenue shall make a payment from the Fund to each utility that
13 is subject to subsection (a) of Section 16-111. Payments shall
14 be made each calendar month beginning February 2008. The
15 payment to each such utility for a rate-reduction month shall
16 be in an amount equal to (i) the number of total kilowatt hours
17 used by the utility's customers during the billing periods
18 ending in the rate-reduction month, multiplied by (ii) a rate
19 determined by subtracting the rate charged to the utility's
20 customers on December 31, 2006 from the rate charged to the
21 utility's customers on January 2, 2007 for each rate-reduction
22 month through the rate-reduction month of December 2008; 90% of
23 that amount for each rate-reduction month in 2009; 80% of that
24 amount for each rate-reduction month in 2010; 70% of that
25 amount for each rate-reduction month in 2011; 60% of that
26 amount for each rate-reduction month in 2012; and 50% of that

 

 

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1 amount for each rate-reduction month beginning on or after
2 January 1, 2013. For the purpose of calculating the payment
3 under this subsection, the rate charged to the utility's
4 customers on January 2, 2007 does not include the portion of
5 the rate charged under any delivery services tariff of the
6 utility that became effective on January 2, 2007.
7     Payments under this subsection (d) shall include interest
8 that is reasonably incurred; interest shall be calculated on
9 the remaining balance beginning 10 days after the end of the
10 rate-reduction month through the date of payment. If there is
11 not a sufficient balance in the Fund to make the payment
12 required under this subsection (d), then the Department of
13 Revenue shall pay each utility a pro-rata share of the balance
14 of the Fund (less any amount necessary to make refunds under
15 Section 5-65 of the Electricity Generator Tax Act) based on the
16 amount of the payment owing to that utility compared to the
17 total of payments owing to all such utilities. Payments shall
18 be made first with respect to the earliest rate-reduction month
19 for which payment has not been made in full.
20     (e) For each rate-reduction month through and including
21 June 2008, if, during the entire rate-reduction month, the
22 utility charged its customers the same rates charged to its
23 customers on December 31, 2006 (plus any rate charged under any
24 of the utility's delivery services tariffs that became
25 effective on or after January 2, 2007), then the amount paid to
26 the utility for that rate-reduction month shall be retained by

 

 

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1 the utility. Otherwise, the amount paid to the utility for that
2 rate-reduction month shall immediately be credited to the
3 customers of the utility prorated based on the total kilowatt
4 hours used by the customer during the rate-reduction month as
5 compared to the total kilowatt hours used by all customers of
6 that utility during the rate-reduction month. The utility must
7 identify the credit on the bill as a STATE FUNDED CREDIT and
8 must insert a separate notice with the bill to the customer
9 showing the credit. That notice must state the following in at
10 least 14-point bold type:
11     THE "STATE FUNDED CREDIT" SHOWN ON THIS BILL WAS FUNDED IN
12     ACCORDANCE WITH A MANDATE OF THE GENERAL ASSEMBLY OF THE
13     STATE OF ILLINOIS.
14 No other communication concerning the credit may be contained
15 on the notice or the bill or any other material sent with the
16 bill.
17     (f) All information necessary to implement and administer
18 this Section must be provided by each utility to the Commission
19 within 10 days after the end of each calendar month. The
20 Commission shall then verify the information and make
21 certifications to the Department of Revenue necessary for the
22 Department to make payments under this Section.
23     If a utility, without good cause shown, does not provide
24 accurate information within the 10-day period and the payment
25 based on that information is required to be credited to its
26 customers under subsection (e), then the utility must

 

 

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1 additionally credit its customers with interest, at the
2 utility's expense, for the period during which the application
3 of the credit is delayed. The interest shall be at the same
4 rate that the Commission requires the utility to pay on
5 customer deposits.
6     The Commission must, and has all powers necessary to, (i)
7 fully enforce this Section and (ii) examine and audit the books
8 and records of utilities to ensure compliance with this
9 Section.
10     For the public interest, safety, and welfare, in order to
11 initially implement this Section, the Commission is authorized
12 to adopt emergency rules under Section 5-45 of the Illinois
13 Administrative Procedure Act.
 
14     Section 3-10. The State Finance Act is amended by changing
15 Section 8h and by adding Section 5.675 as follows:
 
16     (30 ILCS 105/5.675 new)
17     Sec. 5.675. The Consumers Overbilled and Reimbursed for
18 Electricity Fund.
 
19     (30 ILCS 105/8h)
20     Sec. 8h. Transfers to General Revenue Fund.
21     (a) Except as otherwise provided in this Section and
22 Section 8n of this Act, and (c), (d), or (e), notwithstanding
23 any other State law to the contrary, the Governor may, through

 

 

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1 June 30, 2007, from time to time direct the State Treasurer and
2 Comptroller to transfer a specified sum from any fund held by
3 the State Treasurer to the General Revenue Fund in order to
4 help defray the State's operating costs for the fiscal year.
5 The total transfer under this Section from any fund in any
6 fiscal year shall not exceed the lesser of (i) 8% of the
7 revenues to be deposited into the fund during that fiscal year
8 or (ii) an amount that leaves a remaining fund balance of 25%
9 of the July 1 fund balance of that fiscal year. In fiscal year
10 2005 only, prior to calculating the July 1, 2004 final
11 balances, the Governor may calculate and direct the State
12 Treasurer with the Comptroller to transfer additional amounts
13 determined by applying the formula authorized in Public Act
14 93-839 to the funds balances on July 1, 2003. No transfer may
15 be made from a fund under this Section that would have the
16 effect of reducing the available balance in the fund to an
17 amount less than the amount remaining unexpended and unreserved
18 from the total appropriation from that fund estimated to be
19 expended for that fiscal year. This Section does not apply to
20 any funds that are restricted by federal law to a specific use,
21 to any funds in the Motor Fuel Tax Fund, the Intercity
22 Passenger Rail Fund, the Hospital Provider Fund, the Medicaid
23 Provider Relief Fund, the Teacher Health Insurance Security
24 Fund, the Reviewing Court Alternative Dispute Resolution Fund,
25 the Voters' Guide Fund, the Foreign Language Interpreter Fund,
26 the Lawyers' Assistance Program Fund, the Supreme Court Federal

 

 

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1 Projects Fund, the Supreme Court Special State Projects Fund,
2 the Supplemental Low-Income Energy Assistance Fund, the Good
3 Samaritan Energy Trust Fund, the Low-Level Radioactive Waste
4 Facility Development and Operation Fund, the Horse Racing
5 Equity Trust Fund, or the Hospital Basic Services Preservation
6 Fund, or to any funds to which subsection (f) of Section 20-40
7 of the Nursing and Advanced Practice Nursing Act applies. No
8 transfers may be made under this Section from the Pet
9 Population Control Fund. Notwithstanding any other provision
10 of this Section, for fiscal year 2004, the total transfer under
11 this Section from the Road Fund or the State Construction
12 Account Fund shall not exceed the lesser of (i) 5% of the
13 revenues to be deposited into the fund during that fiscal year
14 or (ii) 25% of the beginning balance in the fund. For fiscal
15 year 2005 through fiscal year 2007, no amounts may be
16 transferred under this Section from the Road Fund, the State
17 Construction Account Fund, the Criminal Justice Information
18 Systems Trust Fund, the Wireless Service Emergency Fund, or the
19 Mandatory Arbitration Fund.
20     In determining the available balance in a fund, the
21 Governor may include receipts, transfers into the fund, and
22 other resources anticipated to be available in the fund in that
23 fiscal year.
24     The State Treasurer and Comptroller shall transfer the
25 amounts designated under this Section as soon as may be
26 practicable after receiving the direction to transfer from the

 

 

09500SB1592ham003 - 50 - LRB095 11114 BDD 36924 a

1 Governor.
2     (a-5) Transfers directed to be made under this Section on
3 or before February 28, 2006 that are still pending on May 19,
4 2006 (the effective date of Public Act 94-774) this amendatory
5 Act of the 94th General Assembly shall be redirected as
6 provided in Section 8n of this Act.
7     (b) This Section does not apply to: (i) the Ticket For The
8 Cure Fund; (ii) any fund established under the Community Senior
9 Services and Resources Act; or (iii) on or after January 1,
10 2006 (the effective date of Public Act 94-511), the Child Labor
11 and Day and Temporary Labor Enforcement Fund.
12     (c) This Section does not apply to the Demutualization
13 Trust Fund established under the Uniform Disposition of
14 Unclaimed Property Act.
15     (d) This Section does not apply to moneys set aside in the
16 Illinois State Podiatric Disciplinary Fund for podiatric
17 scholarships and residency programs under the Podiatric
18 Scholarship and Residency Act.
19     (e) Subsection (a) does not apply to, and no transfer may
20 be made under this Section from, the Pension Stabilization
21 Fund.
22     (f) This Section does not apply to the Consumers Overbilled
23 and Reimbursed for Electricity Fund.
24 (Source: P.A. 93-32, eff. 6-20-03; 93-659, eff. 2-3-04; 93-674,
25 eff. 6-10-04; 93-714, eff. 7-12-04; 93-801, eff. 7-22-04;
26 93-839, eff. 7-30-04; 93-1054, eff. 11-18-04; 93-1067, eff.

 

 

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1 1-15-05; 94-91, eff. 7-1-05; 94-120, eff. 7-6-05; 94-511, eff.
2 1-1-06; 94-535, eff. 8-10-05; 94-639, eff. 8-22-05; 94-645,
3 eff. 8-22-05; 94-648, eff. 1-1-06; 94-686, eff. 11-2-05;
4 94-691, eff. 11-2-05; 94-726, eff. 1-20-06; 94-773, eff.
5 5-18-06; 94-774, eff. 5-19-06; 94-804, eff. 5-26-06; 94-839,
6 eff. 6-6-06; revised 6-19-06.)
 
7     Section 3-15. "An Act in relation to the competitive
8 provision of utility services, amending named Acts", Public Act
9 90-561, approved December 16, 1997, is amended by changing
10 Section 15 of Article I as follows:
 
11     (P.A. 90-561, Art. I, Sec. 15)
12     Sec. 15.
13     (a) If any provision added by this amendatory Act of 1997
14 is held invalid, this entire amendatory Act of 1997 shall be
15 deemed invalid, and the provisions of Section 1.31,
16 "Severability", of the Statute on Statutes are hereby expressly
17 declared not applicable to this amendatory Act of 1997;
18 provided, however (i) that any contracts entered into and
19 performed, transactions completed, orders issued, services
20 provided, billings rendered, or payments made in accordance
21 with the provisions of this amendatory Act of 1997, other than
22 as provided in clause (ii) below, prior to the date of the
23 determination of such invalidity, shall not thereby be rendered
24 invalid; (ii) that no presumption as to the validity or

 

 

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1 invalidity of any contracts, transactions, orders, billings,
2 or payments pursuant to Article XVIII of the Public Utilities
3 Act shall result from a determination of invalidity of this
4 amendatory Act of 1997; and (iii) that the provisions of
5 proviso (i) shall not be deemed to preserve the validity of any
6 executory contracts or transactions, of any actions to be taken
7 pursuant to orders issued, or of any services to be performed,
8 billings to be rendered, or payments to be made, pursuant to
9 provisions of this amendatory Act of 1997 subsequent to the
10 date of determination of such invalidity.
11     (b) This Section applies only to Public Act 90-561; this
12 Section does not apply to any Public Act (i) with an effective
13 date after the effective date of Public Act 90-561 and (ii)
14 that amends, adds to, or otherwise affects the provisions added
15 by Public Act 90-561.
16 (Source: P.A. 90-561.)
 
17
ARTICLE 5. ELECTRICITY GENERATOR TAX ACT

 
18     Section 5-1. Short title. This Act may be cited as the
19 Electricity Generator Tax Act.
 
20     Section 5-3. Definitions. As used in this Act:
21     "Department" means the Department of Revenue.
22     "Generating unit" means a nuclear reactor, coal-fired
23 boiler, coal-fired combustion turbine, or natural gas-fired

 

 

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1 turbine that produces electricity.
2     "Nameplate capacity" means the maximum rated output of a
3 generating unit under specific conditions, as designated by the
4 manufacturer on a nameplate that is physically attached to the
5 generating unit.
6     "Taxable year" means a calendar year. For 2007, however,
7 taxable year means the effective date of this Act through and
8 including December 31, 2007.
9     "Taxpayer" means a person who operates a generating unit in
10 this State at any time during the taxable year.
11     "Vertically integrated utility" means a public utility
12 that owns generating units, a transmission system, and
13 distribution lines to provide all aspects of electric service
14 in the utility's service territory.
 
15     Section 5-5. Tax imposed.
16     (a) A tax is imposed on the privilege of operating, at any
17 time during the taxable year, a generating unit within this
18 State.
19     (b) The tax imposed under this Act applies to taxable years
20 beginning on or after the effective date of this Act.
21     (c) No tax under this Act is imposed on any of the
22 following:
23         (1) a generating unit owned by a municipality or an
24     electric cooperative;
25         (2) a generating unit that generates electricity from a

 

 

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1     renewable energy resource, as defined in the Renewable
2     Energy, Energy Efficiency, and Coal Resources Development
3     Law of 1997;
4         (3) a generating unit designed to produce both heat and
5     electricity from a single heat source;
6         (4) a generating unit that has a nameplate capacity of
7     less than 100 megawatts;
8         (5) a generating unit operated fewer than 876 hours
9     during the taxable year (or fewer than 438 hours during
10     taxable year 2007); or
11         (6) any portion of the nameplate capacity of a
12     generating unit that is owned by a vertically integrated
13     utility.
 
14     Section 5-10. Rate. For each generating unit that is not
15 exempt under subsection (c) of Section 5-5, the tax under this
16 Act is imposed annually in the amount equal to $70,000 per
17 megawatt of nameplate capacity of the generating unit.
 
18     Section 5-15. Returns and notices.
19     (a) Each taxpayer subject to the tax imposed under this Act
20 shall make a return under this Act for that taxable year.
21     (b) Each taxpayer shall keep any record, render any
22 statement, make any return and notice, and comply with any rule
23 that the Department may, from time to time, adopt. If, in the
24 judgment of the Director of Revenue it is necessary, he or she

 

 

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1 may require any person, by notice served upon that person or by
2 rule, to make any return and notice, render any statement, or
3 keep any record that the Director deems sufficient to show
4 whether or not that person is liable for tax under this Act.
 
5     Section 5-20. Time and place for filing returns.
6     (a) Returns required by this Act must be filed at the place
7 that the Department may require by rule.
8     (b) A return due under this Act for any taxable year must
9 be filed on or before the 15th day of the third month following
10 the close of the taxable year.
11     (c) The fact that an individual's name is signed to a
12 return or notice is prima facie evidence for all purposes that
13 the document was actually signed by that individual. If a
14 return is prepared by an income tax return preparer for a
15 taxpayer, then that preparer shall sign the return as the
16 preparer of that return. If a return is transmitted to the
17 Department electronically, then the Department may presume
18 that the electronic return originator has obtained and is
19 transmitting a valid signature document pursuant to the rules
20 adopted by the Department for the electronic filing of tax
21 returns, or the Department may authorize electronic return
22 originators to maintain the signature documents and associated
23 documentation, subject to the Department's right of inspection
24 at any time without notice, rather than transmitting those
25 documents to the Department, and the Department may process the

 

 

09500SB1592ham003 - 56 - LRB095 11114 BDD 36924 a

1 return.
2     A return or notice required of a corporation must be signed
3 by the president, vice-president, treasurer, or any other
4 officer duly authorized so to act or, in the case of a limited
5 liability company, by a manager or member. In the case of a
6 return or notice made for a corporation by a fiduciary, the
7 fiduciary shall sign the document. The fact that an
8 individual's name is signed to a return or notice is prima
9 facie evidence that the individual is authorized to sign the
10 document on behalf of the taxpayer.
11     A return or notice of a partnership must be signed by any
12 one of the partners or, in the case of a limited liability
13 company, by a manager or member. The fact that a person's name
14 is signed to a return or notice is prima facie evidence that
15 the individual is authorized to sign the document on behalf of
16 the partnership or limited liability company.
17     (d) If a taxpayer fails to sign a return within 30 days
18 after proper notice and demand for signature by the Department,
19 the return is considered valid, and any amount shown to be due
20 on the return is deemed assessed. Any overpayment of tax shown
21 on the face of an unsigned return is considered forfeited if,
22 after notice and demand for signature by the Department, the
23 taxpayer fails to provide a signature and 3 years have passed
24 from the date the return was filed.
25     (e) Each return required to be filed under this Act must
26 contain or be verified by a written declaration that it is made

 

 

09500SB1592ham003 - 57 - LRB095 11114 BDD 36924 a

1 under the penalties of perjury. A taxpayer's signing a
2 fraudulent return under this Act is perjury, as defined in
3 Section 32-2 of the Criminal Code of 1961.
4     (f) The Department may require electronic filing of any
5 return due under this Act.
 
6     Section 5-25. Payment on due date of return.
7     (a) Each taxpayer required to file a return under this Act
8 shall, without assessment, notice, or demand, pay any tax due
9 thereon to the Department at the place fixed by rules adopted
10 by the Department for filing on or before the date fixed for
11 filing the return (determined without regard to any extension
12 of time for filing the return). In making payment as provided
13 in this Section, there remains payable only the balance of the
14 tax remaining due after giving effect to payments of estimated
15 tax made by the taxpayer under Section 5-30 of this Act for the
16 taxable year and to tentative payments under subsection (b) of
17 this Section for the taxable year.
18     (b) The taxpayer shall file a tentative tax return and pay,
19 on or before the date required by law for the filing of the
20 return the amount properly estimated as his or her tax for the
21 taxable year.
22     (c) Interest and penalty on any amount of tax due and
23 unpaid for the period of any extension is payable as provided
24 by the Uniform Penalty and Interest Act.
25     (d) The Department may, by rule, require any taxpayer to

 

 

09500SB1592ham003 - 58 - LRB095 11114 BDD 36924 a

1 make payments due under this Act by electronic funds transfer.
 
2     Section 5-30. Payment of estimated tax.
3     (a) Beginning July 1, 2007, each taxpayer is required to
4 pay estimated tax for the taxable year in the form and manner
5 that the Department requires by rule. Each installment of
6 estimated tax must be paid on or before the 10th day of each
7 calendar month.
8     (b) The amount of each required installment is an amount
9 equal to:
10         (1) the total amount of the tax that is estimated to be
11     due for the taxable year under Section 5-10 less the amount
12     of all estimated payments previously paid by the taxpayer
13     for that taxable year; divided by
14         (2) the number of calendar months remaining in the
15     taxable year, including the current calendar month.
16     (c) In case of any underpayment of estimated tax by a
17 taxpayer, the taxpayer is liable to a penalty in an amount
18 determined at the rate set forth under Section 3-3 of the
19 Uniform Penalty and Interest Act upon the amount of the
20 underpayment, determined under subsection (b), for each
21 required installment. For the purposes of this subsection (c),
22 the amount of the underpayment is the excess of:
23         (1) the amount of the installment that would be
24     required to be paid under subsection (b); less
25         (2) the amount, if any, of the installment paid on or

 

 

09500SB1592ham003 - 59 - LRB095 11114 BDD 36924 a

1     before the last date prescribed for payment.
 
2     Section 5-35. Collection authority. The Department shall
3 collect the taxes imposed by this Act and shall deposit the
4 amounts collected under this Act into the Consumers Overbilled
5 and Reimbursed for Electricity Fund in the State treasury.
 
6     Section 5-40. Notice and demand.
7     (a) Except as provided in subsection (b), the Director of
8 Revenue shall, as soon as practical after an amount payable
9 under this Act is deemed assessed (as provided in Section 5-45
10 of this Act), give notice to each person liable for any unpaid
11 portion of that assessment, stating the amount unpaid and
12 demanding payment thereof. In the case of tax deemed assessed
13 with the filing of a return, the Director shall give notice no
14 later than 3 years after the date the return was filed. Upon
15 receipt of any notice and demand, there must be paid, at the
16 place and time stated in the notice, the amount stated in the
17 notice. The notice must be left at the dwelling or usual place
18 of business of the person or shall be sent by mail to the
19 person's last known address.
20     (b) In the case of a deficiency deemed assessed under
21 Section 5-45 of this Act, after the filing of a protest, notice
22 and demand may not be made with respect to the assessment until
23 all proceedings in court for the review of the assessment have
24 terminated or the time for the taking thereof has expired

 

 

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1 without the proceedings being instituted.
2     (c) The Department may bring an action in any court of
3 competent jurisdiction within or without this State in the name
4 of the people of this State to recover the amount of any taxes,
5 penalties, and interest due and unpaid under this Act. In that
6 action, the certificate of the Department showing the amount of
7 the delinquency is prima facie evidence of the correctness of
8 the amount, its assessment, and of the compliance by the
9 Department with all the provisions of this Act.
 
10     Section 5-45. Assessment.
11     (a) The amount of tax that is shown to be due on the return
12 is deemed to be assessed on the date of filing of the return
13 (including any amended returns showing an increase of tax). If
14 the amount of tax is understated on the taxpayer's return due
15 to a mathematical error, the Department shall notify the
16 taxpayer that the amount of tax in excess of that shown on the
17 return is due and has been assessed. The notice of additional
18 tax due must be issued no later than 3 years after the date the
19 return was filed. The notice of additional tax due is not
20 considered to be a notice of deficiency nor does the taxpayer
21 have any right of protest. In the case of a return properly
22 filed without the computation of the tax, the tax computed by
23 the Department is deemed to be assessed on the date when
24 payment is due.
25     (b) If a notice of deficiency has been issued, the amount

 

 

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1 of the deficiency is deemed assessed on the date provided in
2 Section 5-50 if no protest is filed or, if a protest is filed,
3 then upon the date when the decision of the Department becomes
4 final.
5     (c) Any amount paid as tax or in respect of tax paid under
6 this Act, other than amounts paid as estimated tax under
7 Section 5-30, are deemed to be assessed upon the date of
8 receipt of payment, notwithstanding any other provisions of
9 this Act.
10     (d) No deficiency may be assessed with respect to a taxable
11 year for which a return was filed unless a notice of deficiency
12 for that year was issued not later than the date prescribed in
13 Section 5-55.
 
14     Section 5-50. Deficiencies and overpayments.
15     (a) As soon as practical after a return is filed, the
16 Department shall examine it to determine the correct amount of
17 tax. If the Department finds that the amount of tax shown on
18 the return is less than the correct amount, it shall issue a
19 notice of deficiency to the taxpayer that sets forth the amount
20 of tax and penalties proposed to be assessed. If the Department
21 finds that the tax paid is more than the correct amount, it
22 shall credit or refund the overpayment as provided by Section
23 5-65. The findings of the Department under this subsection are
24 prima facie correct and are prima facie evidence of the
25 correctness of the amount of tax and penalties due.

 

 

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1     (b) If the taxpayer fails to file a tax return, the
2 Department shall determine the amount of tax due according to
3 its best judgment and information, and the amount so fixed by
4 the Department is prima facie correct and is prima facie
5 evidence of the correctness of the amount of tax due. The
6 Department shall issue a notice of deficiency to the taxpayer
7 that sets forth the amount of tax and penalties proposed to be
8 assessed.
9     (c) A notice of deficiency issued under this Act must set
10 forth the adjustments giving rise to the proposed assessment
11 and the reasons therefor.
12     (d) Assessment when no protest. Upon the expiration of 60
13 days after the date on which it was issued, a notice of
14 deficiency constitutes an assessment of the amount of tax and
15 penalties specified therein, except only for such amounts as to
16 which the taxpayer has filed a protest with the Department.
 
17     Section 5-55. Limitations on notices of deficiency and
18 assessments.
19     (a) A notice of deficiency must be issued not later than 3
20 years after the date that the return was filed. No deficiency
21 may be assessed or collected with respect to the year for which
22 the return was filed unless the notice is issued within that
23 period.
24     (b) If no return is filed or a false and fraudulent return
25 is filed with intent to evade the tax imposed by this Act, a

 

 

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1 notice of deficiency may be issued at any time.
2     (c) In any case in which there has been an erroneous refund
3 of tax payable under this Act, a notice of deficiency may be
4 issued at any time within 2 years from the making of the
5 refund, or within 5 years from the making of the refund if it
6 appears that any part of the refund was induced by fraud or the
7 misrepresentation of a material fact, but the amount of any
8 proposed assessment set forth in the notice is limited to the
9 amount of the erroneous refund.
10     (d) If a protest has been filed with respect to a notice of
11 deficiency issued by the Department with respect to a taxable
12 year and the decision of the Department on the protest has
13 become final, the Department is barred from issuing a further
14 or additional notice of deficiency for that taxable year,
15 except in the case of fraud, mathematical error, or a return
16 that is not considered processable, as the term is defined in
17 Section 3-2 of the Uniform Penalty and Interest Act.
18     (e) The taxpayer at any time, whether or not a notice of
19 deficiency has been issued, has the right to waive the
20 restrictions on assessment and collection of the whole or any
21 part of any proposed assessment under this Act by a signed
22 notice in writing filed with the Department in the form and
23 manner that the Department may provide by rule.
 
24     Section 5-60. Procedure on protest.
25     (a) Within 60 days after the issuance of a notice of

 

 

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1 deficiency, the taxpayer may file with the Department of
2 Revenue a written protest against the proposed assessment, in
3 the form and manner that the Department may provide by rule,
4 setting forth the grounds on which the protest is based. If a
5 protest is filed, the Department shall reconsider the proposed
6 assessment and, if the taxpayer has so requested, shall grant
7 the taxpayer or his or her authorized representative a hearing.
8     (b) As soon as practical after the reconsideration and
9 hearing, if any, the Department shall issue a notice of
10 decision by mailing the notice by certified or registered mail.
11 The notice must set forth briefly the Department's findings of
12 fact and the basis of decision in each case decided in whole or
13 in part adversely to the taxpayer.
14     (c) Within 30 days after the mailing of a notice of
15 decision, the taxpayer may file with a Department a written
16 request for rehearing in the form and manner that the
17 Department may provide by rule, setting forth the grounds on
18 which the rehearing is requested. In any such case, the
19 Department shall, in its discretion, grant either a rehearing
20 or Departmental review unless, within 10 days after receipt of
21 the request, it issues a denial of the request by mailing the
22 denial to the taxpayer by certified or registered mail. If
23 rehearing or Departmental review is granted, as soon as
24 practical after the rehearing or Departmental review, the
25 Department shall issue a notice of final decision as provided
26 in subsection (b).

 

 

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1     (d) The action of the Department on the taxpayer's protest
2 becomes final:
3         (1) 30 days after the issuance of a notice of decision
4     as provided in subsection (b); or
5         (2) if a timely request for rehearing was made, upon
6     the issuance of a denial of the request or the issuance of
7     a notice of final decision, as provided in subsection (c).
 
8     Section 5-65. Credits and refunds.
9     (a) In the case of any overpayment, the Department of
10 Revenue may credit the amount of the overpayment, including any
11 interest allowed thereon, against any liability in respect of
12 the tax imposed by this Act or any other act administered by
13 the Department or against any liability of the taxpayer
14 collectible by the Department, regardless of whether other
15 collection remedies are closed to the Department on the part of
16 the person who made the overpayment and shall refund any
17 balance to that person.
18     (b) The Department may adopt rules providing for the
19 crediting against the estimated tax for any taxable year of the
20 amount determined by the taxpayer or the Department to be an
21 overpayment of the tax imposed by this Act for a preceding
22 taxable year.
23     (c) Interest is allowed and paid at the rate and in the
24 manner set forth under Section 3-2 of the Uniform Penalty and
25 Interest Act upon any overpayment in respect of the tax imposed

 

 

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1 by this Act. For purposes of this subsection, no amount of tax,
2 for any taxable year, may be treated as having been paid before
3 the date on which the tax return for that year was due under
4 Section 5-20.
5     (d) Every claim for refund must be filed with the
6 Department in writing in the form and manner that the
7 Department may provide by rule, and must state the specific
8 grounds upon which it is founded.
9     (e) As soon as practical after a claim for refund is filed,
10 the Department shall examine it and either issue a notice of
11 refund, abatement, or credit to the claimant or issue a notice
12 of denial. If the Department has failed to approve or deny the
13 claim before the expiration of 6 months after the date the
14 claim was filed, then the claimant may nevertheless thereafter
15 file with the Department a written protest in the form and
16 manner that the Department may provide by rule. If a protest is
17 filed, the Department shall consider the claim and, if the
18 taxpayer has so requested, shall grant the taxpayer or the
19 taxpayer's authorized representative a hearing within 6 months
20 after the date the request is filed.
21     A denial of a claim for refund becomes final 60 days after
22 the date of issuance of the notice of the denial except for
23 those amounts denied as to which the claimant has filed a
24 protest with the Department under Section 5-70.
25     (f) An overpayment of tax shown on the face of an unsigned
26 return is considered forfeited to the State if, after notice

 

 

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1 and demand for signature by the Department, the taxpayer fails
2 to provide a signature and 3 years have passed after the date
3 the return was filed. An overpayment of tax refunded to a
4 taxpayer whose return was filed electronically is considered an
5 erroneous refund if, after proper notice and demand by the
6 Department, the taxpayer fails to provide a required signature
7 document. A notice and demand for signature in the case of a
8 return reflecting an overpayment may be made by first class
9 mail.
10     (g) The Department shall pay refunds from the Consumers
11 Overbilled and Reimbursed for Electricity Fund.
 
12     Section 5-70. Procedure on denial of claim for refund.
13     (a) Within 60 days after the denial of the claim, the
14 claimant may file with the Department a written protest against
15 the denial in the form and manner that the Department may
16 provide by rule, setting forth the grounds on which the protest
17 is based. If a protest is filed, the Department shall
18 reconsider the denial and, if the taxpayer has so requested,
19 shall grant the taxpayer or the taxpayer's authorized
20 representative a hearing.
21     (b) As soon as practical after the reconsideration and
22 hearing, if any, the Department shall issue a notice of
23 decision by mailing the notice by certified or registered mail.
24 The notice must set forth briefly the Department's findings of
25 fact and the basis of decision in each case decided in whole or

 

 

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1 in part adversely to the claimant.
2     (c) Within 30 days after the mailing of a notice of
3 decision, the claimant may file with the Department a written
4 request for rehearing in the form and manner that the
5 Department may provide by rule, setting forth the grounds on
6 which rehearing is requested. In any such case, the Department
7 shall, in its discretion, grant either a rehearing or
8 Departmental review unless, within 10 days after the receipt of
9 the request, it issues a denial of the request by mailing the
10 denial to the claimant by certified or registered mail. If
11 rehearing or Departmental review is granted, as soon as
12 practical after the rehearing or Departmental review, the
13 Department shall issue a notice of final decision as provided
14 in subsection (b).
15     (d) The action of the Department on the claimant's protest
16 becomes final:
17         (1) 30 days after issuance of a notice of decision as
18     provided in subsection (b); or
19         (2) if a timely request for rehearing was made, upon
20     the issuance of a denial of the request or the issuance of
21     a notice of final decision as provided in subsection (c).
 
22     Section 5-75. Limitations on claims for refund.
23     (a) A claim for refund must be filed no later than 3 years
24 after the date that the return was filed or one year after the
25 date that the tax was paid, whichever is the later. No credit

 

 

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1 or refund is allowed or made with respect to the year for which
2 the claim was filed unless the claim is filed within that
3 period.
4     (b) If the claim was filed by the claimant during the
5 3-year period set forth in subsection (a), then the amount of
6 the credit or refund may not exceed the portion of the tax paid
7 within the period, immediately preceding the filing of the
8 claim, equal to 3 years plus the period of any extension of
9 time for filing the return. If the claim was not filed within
10 that 3-year period, then the amount of the credit or refund may
11 not exceed the portion of the tax paid during the one year
12 immediately preceding the filing of the claim.
 
13     Section 5-80. Recovery of erroneous refund. An erroneous
14 refund is considered to be a deficiency of tax on the date made
15 and is deemed to be assessed and must be collected as provided
16 in Sections 5-45 and 5-50.
 
17     Section 5-85. Lien for tax.
18     (a) If any taxpayer neglects or refuses to pay the tax due
19 under this Act after demand, then the amount (including any
20 interest, additional amount, addition to tax, or assessable
21 penalty, together with any costs that may accrue in addition
22 thereto) is a lien in favor of the State of Illinois upon all
23 property and rights to property, whether real or personal,
24 belonging to that person.

 

 

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1     (b) Unless another date is specifically fixed by law, the
2 lien imposed by subsection (a) of this Section arises at the
3 time the assessment is made and continues until the liability
4 for the amount so assessed (or a judgment against the taxpayer
5 arising out of such liability) is satisfied or becomes
6 unenforceable by reason of lapse of time.
7     (c) If the lien arises from an assessment pursuant to a
8 notice of deficiency, then the lien does not attach and the
9 notice referred to in this Section may not be filed until all
10 proceedings in court for review of the assessment have
11 terminated or the time for the taking thereof has expired
12 without the proceedings being instituted.
13     (d) Notice of lien. The lien created by assessment
14 terminates unless a notice of lien is filed, as provided in
15 Section 5-95, within 3 years after the date all proceedings in
16 court for the review of the assessment have terminated or the
17 time for the taking thereof has expired without the proceedings
18 being instituted. If the lien results from the filing of a
19 return without payment of the tax or penalty shown therein to
20 be due, then the lien terminates unless a notice of lien is
21 filed within 3 years after the date the return was filed with
22 the Department. For the purposes of this subsection (c), a tax
23 return filed before the last day prescribed by law, including
24 any extension thereof, is deemed to have been filed on that
25 last day.
 

 

 

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1     Section 5-90. Jeopardy assessment and lien.
2     (a) Assessment. If the Department finds that a taxpayer is
3 about to conceal property or to do any other act tending to
4 prejudice or to render wholly or partly ineffectual proceedings
5 to collect any amount of tax or penalties imposed under this
6 Act unless court proceedings are brought without delay or if
7 the Department finds that the collection of that amount will be
8 jeopardized by delay, the Department shall give the taxpayer
9 notice of those findings and shall make demand for immediate
10 return and payment of that amount, whereupon that amount is
11 deemed to be assessed and becomes immediately due and payable.
12     (b) If the taxpayer, within 5 days after the notice under
13 subsection (a) does not comply with the notice or show to the
14 Department that the findings in such notice are erroneous, then
15 the Department may file a notice of jeopardy assessment lien in
16 the office of the recorder of the county in which any property
17 of the taxpayer may be located and shall notify the taxpayer of
18 the filing. The jeopardy assessment lien has the same scope and
19 effect as a statutory lien under this Act. The taxpayer is
20 liable for the filing fee incurred by the Department for filing
21 the lien and the filing fee incurred by the Department to file
22 the release of that lien. The filing fees must be paid to the
23 Department in addition to payment of the tax, penalty, and
24 interest included in the amount of the lien.
25     (c) In the case of a tax for a current taxable year, the
26 Director shall declare the taxable period of the taxpayer

 

 

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1 immediately terminated and his or her notice and demand for a
2 return and immediate payment of the tax relates to the period
3 declared terminated.
4     (d) If the taxpayer believes that he or she does not owe
5 some or all of the amount for which the jeopardy assessment
6 lien against him or her has been filed or that no jeopardy to
7 the revenue in fact exists, he or she may protest within 20
8 days after being notified by the Department of the filing of
9 the jeopardy assessment lien and request a hearing, whereupon
10 the Department shall hold a hearing in conformity with the
11 provisions of Section 5-120 and, pursuant thereto, shall notify
12 the taxpayer of its decision as to whether the jeopardy
13 assessment lien will be released.
 
14     Section 5-95. Filing and priority of liens.
15     (a) Nothing in this Act may be construed to give the
16 Department a preference over the rights of any bona fide
17 purchaser, holder of a security interest, mechanics lienor,
18 mortgagee, or judgment lien creditor arising prior to the
19 filing of a regular notice of lien or a notice of jeopardy
20 assessment lien in the office of the recorder in the county in
21 which the property subject to the lien is located. For purposes
22 of this Section, the term "bona fide" does not include any
23 mortgage of real or personal property or any other credit
24 transaction that results in the mortgagee or the holder of the
25 security acting as trustee for unsecured creditors of the

 

 

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1 taxpayer mentioned in the notice of lien who executed the
2 chattel or real property mortgage or the document evidencing
3 the credit transaction. The lien is inferior to the lien of
4 general taxes, special assessments, and special taxes
5 heretofore or hereafter levied by any political subdivision of
6 this State.
7     (b) If title to land to be affected by the notice of lien
8 or notice of jeopardy assessment lien is registered under the
9 provisions of the Registered Titles (Torrens) Act, then the
10 notice must be filed in the office of the registrar of titles
11 of the county within which the property subject to the lien is
12 situated and must be entered upon the register of titles as a
13 memorial of charge upon each folium of the register of titles
14 affected by such notice, and the Department does not have a
15 preference over the rights of any bona fide purchaser,
16 mortgagee, judgment creditor, or other lien holder arising
17 prior to the registration of the notice.
18     (c) The recorder of each county shall procure a file
19 labeled "State Tax Lien Notices" and an index book labeled
20 "State Tax Lien Index". When notice of any lien or jeopardy
21 assessment lien is presented to him or her for filing, he or
22 she shall file it in numerical order in the file and shall
23 enter it alphabetically in the index. The entry must show the
24 name and last known address of the person named in the notice,
25 the serial number of the notice, the date and hour of filing,
26 whether it is a regular lien or a jeopardy assessment lien, and

 

 

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1 the amount of tax and penalty due and unpaid, plus the amount
2 of interest due at the time when the notice of lien or jeopardy
3 assessment is filed.
4     (d) No recorder or registrar of titles of any county may
5 require that the Department pay any costs or fees in connection
6 with recordation of any notice or other document filed by the
7 Department under this Act at the time the notice or other
8 document is presented for recordation. The recorder or
9 registrar of each county, in order to receive payment for fees
10 or costs incurred by the Department, may present the Department
11 with monthly statements indicating the amount of fees and costs
12 incurred by the Department and for which no payment has been
13 received.
14     (e) The taxpayer is liable for the filing fee incurred by
15 the Department for filing the lien and the filing fee incurred
16 by the Department to file the release of that lien. The filing
17 fees must be paid to the Department in addition to payment of
18 the tax, penalty, and interest included in the amount of the
19 lien.
 
20     Section 5-100. Duration of lien. The lien provided under
21 this Act continues for 20 years from the date of filing the
22 notice of lien under the provisions of Section 5-95 unless
23 sooner released or otherwise discharged.
 
24     Section 5-105. Release of liens.

 

 

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1     (a) In general. Upon payment by the taxpayer to the
2 Department in cash or by guaranteed remittance of an amount
3 representing the filing fees and charges for the lien and the
4 filing fees and charges for the release of that lien, the
5 Department shall release all or any portion of the property
6 subject to any lien provided for in this Act and file that
7 complete or partial release of lien with the recorder of the
8 county where that lien was filed if it determines that the
9 release will not endanger or jeopardize the collection of the
10 amount secured thereby.
11     (b) If, on judicial review, the final judgment of the court
12 is that the taxpayer does not owe some or all of the amount
13 secured by the lien against him or her, or that no jeopardy to
14 the revenue exists, then the Department shall release its lien
15 to the extent of that finding of nonliability or to the extent
16 of that finding of no jeopardy to the revenue. The taxpayer is,
17 however, liable for the filing fee paid by the Department to
18 file the lien and the filing fee required to file a release of
19 the lien. The filing fees must be paid to the Department.
20     (c) The Department shall also release its jeopardy
21 assessment lien against the taxpayer if the tax and penalty
22 covered by the lien, plus any interest that may be due and an
23 amount representing the filing fee to file the lien and the
24 filing fee required to file a release of that lien, are paid by
25 the taxpayer to the Department in cash or by guaranteed
26 remittance.

 

 

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1     (d) The Department shall issue a certificate of complete or
2 partial release of the lien upon payment by the taxpayer to the
3 Department in cash or by guaranteed remittance of an amount
4 representing the filing fee paid by the Department to file the
5 lien and the filing fee required to file the release of that
6 lien:
7         (1) to the extent that the fair market value of any
8     property subject to the lien exceeds the amount of the lien
9     plus the amount of all prior liens upon the property;
10         (2) to the extent that the lien becomes unenforceable;
11         (3) to the extent that the amount of the lien is paid
12     by the person whose property is subject to the lien,
13     together with any interest and penalty which may become due
14     under this Act between the date when the notice of lien is
15     filed and the date when the amount of the lien is paid;
16         (4) to the extent that there is furnished to the
17     Department, on a form to be approved and with a surety or
18     sureties satisfactory to the Department, a bond that is
19     conditioned upon the payment of the amount of the lien,
20     together with any interest which may become due under this
21     Act after the notice of lien is filed, but before the
22     amount thereof is fully paid; and
23         (5) to the extent and under the circumstances specified
24     in this Section.
25     A certificate of complete or partial release of any lien is
26 held to be conclusive that the lien upon the property covered

 

 

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1 by the certificate is extinguished to the extent indicated by
2 the certificate. The release of lien must be issued to the
3 person, or his or her agent, against whom the lien was obtained
4 and must contain in legible letters a statement as follows:
5     FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL BE
6     FILED WITH THE RECORDER OR THE REGISTRAR OF TITLES IN WHOSE
7     OFFICE THE LIEN WAS FILED.
8     (e) If a certificate of complete or partial release of lien
9 issued by the Department is presented for filing in the office
10 of the recorder or registrar of titles where a notice of lien
11 or notice of jeopardy assessment lien was filed, then:
12         (1) the recorder, in the case of nonregistered
13     property, shall permanently attach the certificate of
14     release to the notice of lien or notice of jeopardy
15     assessment lien and shall enter the certificate of release
16     and the date in the "State Tax Lien Index" on the line
17     where the notice of lien or notice of jeopardy assessment
18     lien is entered; and
19         (2) in the case of registered property, the registrar
20     of titles shall file and enter upon each folium of the
21     register of titles affected thereby a memorial of the
22     certificate of release, which when so entered, acts as a
23     release pro tanto of any memorial of the notice of lien or
24     notice of jeopardy assessment lien previously filed and
25     registered.
 

 

 

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1     Section 5-110. Nonliability for costs of legal
2 proceedings. The Department is not be required to furnish any
3 bond nor to make a deposit for or pay any costs or fees of any
4 court or officer thereof in any legal proceedings pursuant to
5 the provisions of this Act.
 
6     Section 5-115. Claim to property. If any process issued
7 from any court for the enforcement or collection of any
8 liability created by this Act is levied by any sheriff or other
9 authorized person upon any personal property and the property
10 is claimed by any person other than the defendant as exempt
11 from enforcement of a judgment thereon by virtue of the
12 exemption laws of this State, then it is the duty of the person
13 making the claim to give notice in writing of his or her claim
14 and of his or her intention to prosecute the same to the
15 sheriff or other person within 10 days after the making of the
16 levy. On receiving such a notice, the sheriff or other person
17 shall proceed in accordance with the provisions of Part 2 of
18 Article XII of the Code of Civil Procedure. The giving of the
19 notice within the 10-day period is a condition precedent to any
20 judicial action against the sheriff or other authorized person
21 for wrongfully levying, seizing, or selling the property and
22 any such person who fails to give notice within the time is
23 forever barred from bringing any judicial action against the
24 sheriff or other person for injury or damages to or conversion
25 of the property.
 

 

 

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1     Section 5-120. Foreclosure on real property. In addition to
2 any other remedy provided for by the laws of this State, and
3 provided that no hearing or proceedings for review provided by
4 this Act is pending and the time for the taking thereof has
5 expired, the Department may foreclose in the circuit court any
6 lien on real property for any tax or penalty imposed by this
7 Act to the same extent and in the same manner as in the
8 enforcement of other liens. The proceedings to foreclose may
9 not be instituted more than 5 years after the filing of the
10 notice of lien under the provisions of Section 5-95. The
11 process, practice, and procedure for the foreclosure is the
12 same as provided in the Civil Practice Law.
 
13     Section 5-125. Demand and seizure. In addition to any other
14 remedy provided for by the laws of this State, if the tax
15 imposed by this Act is not paid within the time required by
16 this Act, the Department, or some person designated by it, may
17 cause a demand to be made on the taxpayer for the payment
18 thereof. If the tax remains unpaid for 10 days after such a
19 demand has been made and no proceedings have been taken to
20 review the same, then the Department may issue a warrant
21 directed to any sheriff or other person authorized to serve
22 process, commanding the sheriff or other person to levy upon
23 the property and rights to property (whether real or personal,
24 tangible or intangible) of the taxpayer, without exemption,

 

 

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1 found within his or her jurisdiction, for the payment of the
2 amount thereof with the added penalties, interest, and the cost
3 of executing the warrant. The term "levy" includes the power of
4 distraint and seizure by any means. In any case in which the
5 warrant to levy has been issued, the sheriff or other person to
6 whom the warrant was directed may seize and sell the property
7 or rights to property. The warrant must be returned to the
8 Department together with the money collected by virtue thereof
9 within the time therein specified, which may not be less than
10 20 nor more than 90 days after the date of the warrant. The
11 sheriff or other person to whom the warrant is directed shall
12 proceed in the same manner as prescribed by law in respect to
13 the enforcement against property upon judgments by a court, and
14 is entitled to the same fees for his or her services in
15 executing the warrant, to be collected in the same manner. The
16 Department, or some officer, employee, or agent designated by
17 it, is hereby authorized to bid for and purchase any property
18 sold under the provisions of this Section. No proceedings for a
19 levy under this Section may be commenced more than 20 years
20 after the latest date for filing of the notice of lien under
21 the provisions of Section 5-95, without regard to whether the
22 notice was actually filed.
23     Any officer or employee of the Department designated in
24 writing by the Director is authorized to serve process under
25 this Section to levy upon accounts or other intangible assets
26 of a taxpayer held by a financial organization, as defined in

 

 

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1 Section 1501 of the Illinois Income Tax Act. In addition to any
2 other provisions of this Section, any officer or employee of
3 the Department designated in writing by the Director may levy
4 upon the following property and rights to property belonging to
5 a taxpayer: contractual payments, accounts and notes
6 receivable and other evidences of debt, and interest on bonds
7 by serving a notice of levy on the person making the payment.
8 The levy may not be made until the Department has caused a
9 demand to be made on the taxpayer in the manner provided in
10 this Section. A lien obtained hereunder has priority over any
11 subsequent lien obtained pursuant to Section 12-808 of the Code
12 of Civil Procedure.
13     Any officer or employee of the Department designated in
14 writing by the Director is authorized to serve process under
15 this Section to levy upon accounts or other intangible assets
16 of a taxpayer held by a financial organization, as defined in
17 Section 1501 of the Illinois Income Tax Act. In addition to any
18 other provisions of this Section, any officer or employee of
19 the Department designated in writing by the Director may levy
20 upon the following property and rights to property belonging to
21 a taxpayer: contractual payments, accounts and notes
22 receivable and other evidences of debt, and interest on bonds
23 by serving a notice of levy on the person making the payment.
24 The levy may not be made until the Department has caused a
25 demand to be made on the taxpayer in the manner provided in
26 this Section. A lien obtained hereunder has priority over any

 

 

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1 subsequent lien obtained pursuant to Section 12-808 of the Code
2 of Civil Procedure.
3     In any case where property or rights to property have been
4 seized by an officer of the Department of State Police, or
5 successor agency thereto, under the authority of a warrant to
6 levy issued by the Department of Revenue, the Department of
7 Revenue may take possession of and may sell the property or
8 rights to property and the Department of Revenue may contract
9 with third persons to conduct sales of the property or rights
10 to the property. In the conduct of these sales, the Department
11 of Revenue shall proceed in the same manner as is prescribed by
12 law for proceeding against property to enforce judgments that
13 are entered by a circuit court of this State. If, in the
14 Department of Revenue's opinion, no offer to purchase at the
15 sale is acceptable and the State's interest would be better
16 served by retaining the property for sale at a later date, then
17 the Department may decline to accept any bid and may retain the
18 property for sale at a later date.
 
19     Section 5-130. Redemption by State. The provisions of
20 Section 5g of the Retailers' Occupation Tax Act (relating to
21 time for redemption by the State of real estate sold at
22 judicial or execution sale) apply for purposes of this Act as
23 if those provisions were set forth in this Act in their
24 entirety.
 

 

 

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1     Section 5-135. Access to books and records. All books and
2 records and other papers and documents that are required by
3 this Act to be kept must, at all times during business hours of
4 the day, be subject to inspection by the Department or its duly
5 authorized agents and employees. If, during the course of any
6 audit, investigation, or hearing, the Department determines
7 that a taxpayer lacks necessary documentary evidence, the
8 Department is authorized to notify the taxpayer, in writing, to
9 produce the evidence. The taxpayer has 60 days, subject to the
10 right of the Department to extend this period either on request
11 for good cause shown or on its own motion, after the date the
12 notice is personally delivered or sent to the taxpayer by
13 certified or registered mail in which to obtain and produce the
14 evidence for the Department's inspection. The failure to
15 provide the requested evidence within the 60-day period
16 precludes the taxpayer from providing the evidence at a later
17 date during the audit, investigation, or hearing.
 
18     Section 5-140. Conduct of investigations and hearings. For
19 the purpose of administering and enforcing the provisions of
20 this Act, the Department, or any officer or employee of the
21 Department designated, in writing, by the Director may hold
22 investigations and hearings concerning any matters covered by
23 this Act and may examine any books, papers, records, or
24 memoranda bearing upon such matters, and may require the
25 attendance of any person, or any officer or employee of that

 

 

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1 person, having knowledge of such matters, and may take
2 testimony and require proof for its information. In the conduct
3 of any investigation or hearing, neither the Department nor any
4 officer or employee thereof is bound by the technical rules of
5 evidence, and no informality in any proceeding, or in the
6 manner of taking testimony, invalidates any order, decision,
7 rule, or regulation made or approved or confirmed by the
8 Department. The Director, or any officer or employee of the
9 Department authorized by the Director has power to administer
10 oaths to those persons. The books, papers, records, and
11 memoranda of the Department, or parts thereof, may be proved in
12 any hearing, investigation, or legal proceeding by a reproduced
13 copy thereof or by a computer print-out of Department records,
14 under the certificate of the Director. If reproduced copies of
15 the Department's books, papers, records, or memoranda are
16 offered as proof, then the Director must certify that those
17 copies are true and exact copies of the records on file with
18 the Department. If computer print-outs of records of the
19 Department are offered as proof, then the Director must certify
20 that those computer print-outs are true and exact
21 representations of records properly entered into standard
22 electronic computing equipment, in the regular course of the
23 Department's business, at or reasonably near the time of the
24 occurrence of the facts recorded, from trustworthy and reliable
25 information. The reproduced copy shall, without further proof,
26 be admitted into evidence before the Department or in any legal

 

 

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1 proceeding.
 
2     Section 5-145. Immunity of witnesses. No person is excused
3 from testifying or from producing any books, papers, records,
4 or memoranda in any investigation or upon any hearing, when
5 ordered to do so by the Department or any officer or employee
6 thereof, upon the ground that the testimony or evidence,
7 documentary or otherwise, may tend to incriminate him or her or
8 subject him or her to a criminal penalty, but no person may be
9 prosecuted or subjected to any criminal penalty for, or on
10 account of, any transaction made or thing concerning which he
11 or she may testify or produce evidence, documentary or
12 otherwise, before the Department or an officer or employee
13 thereof; provided, that the immunity extends only to a natural
14 person who, in obedience to a subpoena, gives testimony under
15 oath or produces evidence, documentary or otherwise, under
16 oath. No person so testifying is exempt from prosecution and
17 punishment for perjury committed in so testifying.
 
18     Section 5-150. Production of witnesses and records.
19     (a) The Department or any officer or employee of the
20 Department designated in writing by the Director, shall at its
21 or his or her own instance, or on the written request of any
22 other party to the proceeding, issue subpoenas requiring the
23 attendance of and the giving of testimony by witnesses, and
24 subpoenas duces tecum requiring the production of books,

 

 

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1 papers, records, or memoranda. All subpoenas and subpoenas
2 duces tecum issued under this Act may be served by any person
3 of full age.
4     (b) The fees of witnesses for attendance and travel are the
5 same as the fees of witnesses before a Circuit Court of this
6 State, such fees to be paid when the witness is excused from
7 further attendance. When the witness is subpoenaed at the
8 instance of the Department or any officer or employee thereof,
9 the fees must be paid in the same manner as other expenses of
10 the Department, and when the witness is subpoenaed at the
11 instance of any other party to any such proceeding, the
12 Department may require that the cost of service of the subpoena
13 or subpoenas duces tecum and the fee of the witness be borne by
14 the party at whose instance the witness is summoned. In such
15 case, the Department, in its discretion, may require a deposit
16 to cover the cost of the service and witness fees. A subpoena
17 or subpoena duces tecum so issued must be served in the same
18 manner as a subpoena issued out of a court.
19     (c) Any Circuit Court of this State, upon the application
20 of the Department or any officer or employee thereof, or upon
21 the application of any other party to the proceeding may, in
22 its discretion, compel the attendance of witnesses, the
23 production of books, papers, records, or memoranda and the
24 giving of testimony before the Department or any officer or
25 employee thereof conducting an investigation or holding a
26 hearing authorized by this Act, by an attachment for contempt,

 

 

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1 or otherwise, in the same manner as production of evidence may
2 be compelled before the Court.
 
3     Section 5-155. Place of hearings. All hearings provided
4 for in this Act with respect to or concerning a taxpayer having
5 a residence or its commercial domicile in this State must be
6 held at the Department of Revenue's office nearest to the
7 location of that residence or domicile, except that, if the
8 taxpayer has its commercial domicile in Cook County, the
9 hearing must be held in Cook County. If the taxpayer does not
10 have its commercial domicile in this State, the hearing must be
11 held in Cook County.
 
12     Section 5-160. Penalties and interest.
13     (a) Penalties and interest imposed by the Uniform Penalty
14 and Interest Act with respect to the obligations of a taxpayer
15 under this Act must be paid upon notice and demand and, except
16 as provided in subsection (b), must be assessed, collected, and
17 paid in the same manner as the tax imposed by this Act, and any
18 reference in this Act to the tax imposed by this Act refers
19 also to interest and penalties imposed by the Uniform Penalty
20 and Interest Act.
21     (b) Interest is deemed to be assessed upon the assessment
22 of the tax to which the interest relates. Penalties for late
23 payment or underpayment are deemed to be assessed upon
24 assessment of the tax to which the penalty relates.
 

 

 

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1      Section 5-165. Administrative Review Law. The provisions
2 of the Administrative Review Law, and the rules adopted
3 pursuant thereto, apply to and govern all proceedings for the
4 judicial review of final actions of the Department. These final
5 actions constitute "administrative decisions", as defined in
6 Section 3-101 of the Code of Civil Procedure.
 
7     Section 5-170. Venue. The Circuit Court of the county
8 where the taxpayer has his or her residence or commercial
9 domicile, or of Cook County in those cases where the taxpayer
10 does not have his or her residence or commercial domicile in
11 this State, has the power to review all final administrative
12 decisions of the Department in administering the provisions of
13 this Act.
 
14     Section 5-175. Service, certification, and dismissal.
15     (a) Service upon the Director or the Assistant Director of
16 Revenue of summons issued in an action to review a final
17 administrative decision of the Department is service upon the
18 Department.
19     (b) The Department shall certify the record of its
20 proceedings if the taxpayer pays to it the sum of $0.75 per
21 page of testimony taken before the Department and $0.25 per
22 page of all other matters contained in the record, except that
23 these charges may be waived if the Department is satisfied that

 

 

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1 the aggrieved party is a poor person who cannot afford to pay
2 the charges.
3     (c) If payment for the record is not made by the taxpayer
4 within 30 days after notice from the Department or the Attorney
5 General of the cost thereof, the court in which the proceeding
6 is pending, on motion of the Department, shall dismiss the
7 complaint and shall enter judgment against the taxpayer and in
8 favor of the Department in accordance with the final action of
9 the Department, together with interest on any deficiency to the
10 date of entry of the judgment, and also for costs.
 
11     Section 5-180. Crimes.
12     (a) Any person who is subject to the provisions of this Act
13 and who willfully fails to file a return, who files a
14 fraudulent return, or who willfully attempts in any other
15 manner to evade or defeat any tax imposed by this Act or the
16 payment thereof or any accountant or other agent who knowingly
17 enters false information on the return of any taxpayer under
18 this Act, is, in addition to other penalties, guilty of a Class
19 4 felony for the first offense and a Class 3 felony for each
20 subsequent offense. Any person who is subject to this Act and
21 who willfully violates any rule or regulation of the Department
22 of Revenue for the administration and enforcement of this Act
23 or who fails to keep books and records as required in this Act
24 is, in addition to other penalties, guilty of a Class A
25 misdemeanor.

 

 

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1     (b) Any person who accepts money that is due to the
2 Department under this Act from a taxpayer for the purpose of
3 acting as the taxpayer's agent to make the payment to the
4 Department, but who willfully fails to remit that payment to
5 the Department when due, is guilty of a Class A misdemeanor.
6 Any such person who purports to make that payment by issuing or
7 delivering a check or other order upon a real or fictitious
8 depository for the payment of money, knowing that it will not
9 be paid by the depository, is guilty of a deceptive practice in
10 violation of Section 17-1 of the Criminal Code of 1961.
11     (c) Any person whose commercial domicile or whose residence
12 is in this State and who is charged with a violation under this
13 Section must be tried in the county where his or her commercial
14 domicile or his or her residence is located unless he or she
15 asserts a right to be tried in another venue. A prosecution for
16 any act or omission in violation of this Section may be
17 commenced at any time within 5 years after the commission of
18 that act or failure to act.
 
19     Section 5-185. Adoption of rules. The Department is
20 authorized to make, adopt, and enforce such reasonable rules
21 and regulations, and to prescribe such forms, relating to the
22 administration and enforcement of the provisions of this Act,
23 as it may deem appropriate.
 
24     Section 5-190. Notice. If notice is required by this Act,

 

 

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1 then the notice must, if not otherwise provided, be given or
2 issued by mailing it by registered or certified mail addressed
3 to the person concerned at his or her last known address.
 
4     Section 5-195. Amounts less than $1.
5     (a) Payments, refunds, etc. The Department may by rule
6 provide that, if a total amount of less than $1 is payable,
7 refundable, or creditable, then the amount may be disregarded
8 or, alternatively, is disregarded if it is less than $0.50 and
9 is increased to $1 if it is $0.50 or more.
10     (b) The Department may by rule provide that any amount that
11 is required to be shown or reported on any return or other
12 document under this Act is, if that amount is not a
13 whole-dollar amount, increased to the nearest whole-dollar
14 amount in any case where the fractional part of a dollar is
15 $0.50 or more and decreased to the nearest whole-dollar amount
16 when the fractional part of a dollar is less than $0.50.
 
17     Section 5-200. Administrative Procedure Act; application.
18     (a) The Illinois Administrative Procedure Act is hereby
19 expressly adopted and applies to all administrative rules and
20 procedures of the Department under this Act, except that: (1)
21 paragraph (b) of Section 5-10 of the Illinois Administrative
22 Procedure Act does not apply to final orders, decisions, and
23 opinions of the Department; (2) subparagraph (a)(2) of Section
24 5-10 of the Illinois Administrative Procedure Act does not

 

 

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1 apply to forms established by the Department for use under this
2 Act; and (3) the provisions of Section 10-45 of the Illinois
3 Administrative Procedure Act regarding proposals for decision
4 are excluded and not applicable to the Department under this
5 Act.
6     (b) For the public interest, safety, and welfare, in order
7 to initially implement this Act, the Department is authorized
8 to adopt emergency rules under Section 5-45 of the Illinois
9 Administrative Procedure Act.
 
10
ARTICLE 99. SEVERABILITY; EFFECTIVE DATE

 
11     Section 99-97. Severability. The provisions of this Act are
12 severable under Section 1.31 of the Statute on Statutes.
 
13     Section 99-99. Effective date. This Act takes effect upon
14 becoming law.".