093_SB2131

                                     LRB093 14419 AMC 20093 b

 1        AN ACT concerning utilities.

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

 4        Section  1.  Short  title.  This  Act may be cited as the
 5    Illinois Transmission Authority Act.

 6        Section 5.  Purpose.  The  purpose  of  this  Act  is  to
 7    develop  new  electric  transmission  facilities  within this
 8    State  so  as  to  ensure  the  provision  of  adequate   and
 9    economical  supplies of electricity to Illinois consumers, to
10    promote the development of new coal based electric generation
11    and to ensure that the electric transmission grid within this
12    State is capable of  meeting  existing  and  future  electric
13    supply needs.

14        Section  10.  Findings.  The  General  Assembly finds the
15    following:
16             (1)  The provision  of  a  reliable  and  affordable
17        supply  of  electricity  in  Illinois  is  vital  to  the
18        well-being  of  Illinois'  citizens and to the economy of
19        the State.
20             (2)  Current  and  future  shortages   of   electric
21        transmission   capacity   threaten  the  availability  of
22        reliable and affordable electric supplies.
23             (3)  Regulatory uncertainty, the high  capital  cost
24        of  constructing  high voltage electric transmission, and
25        other factors have discouraged  private  enterprise  from
26        constructing      necessary     electric     transmission
27        infrastructure.
28             (4)  The  creation  of  an   Illinois   Transmission
29        Authority  is  in  the public interest for the purpose of
30        investigating needed transmission  facilities,  acquiring
 
                            -2-      LRB093 14419 AMC 20093 b
 1        the necessary rights-of-way and other property interests,
 2        constructing  such  transmission  facilities and entering
 3        into contracts with third parties to operate and maintain
 4        such facilities, and to provide for  the  utilization  of
 5        the    transmission   capacity   on   an   open   access,
 6        non-discriminatory basis.

 7        Section 15.  Definitions. As used in this Act:
 8        "Authority" means  the  Illinois  Transmission  Authority
 9    created by this Act.
10        "Board" means the Board of Directors of the Authority.
11        "Costs  incurred  in connection with the development of a
12    Transmission project" includes the cost of  purchase  of  all
13    lands  and  related  improvements and other property, rights,
14    easements, and rights of way that are deemed necessary for  a
15    transmission  project; costs of construction and installation
16    of necessary equipment  and  facilities;  financing  charges;
17    interest  costs  with  respect  to  revenue bonds, notes, and
18    other evidence of indebtedness of the Authority;  engineering
19    and   legal   costs   and   expenses;  the  costs  of  plans,
20    specifications, surveys, and feasibility analyses;  the  cost
21    of   permitting  and  licensing  and  the  obtaining  of  any
22    necessary approvals; other costs and  expenses  necessary  or
23    incident  to determining the feasibility or practicability of
24    any transmission project; the costs of preparing and entering
25    into transmission agreements; and such other expenses as  may
26    be   necessary   or  incident  to  the  financing,  insuring,
27    acquisition, and  construction  of  a  specific  transmission
28    project  and  the  placing  of  the  transmission  project in
29    operation.
30        "Governmental agency" means any federal, State, or  local
31    governmental body, and any agency or instrumentality thereof,
32    corporate or otherwise.
33        "Governor" means the Governor of the State of Illinois.
 
                            -3-      LRB093 14419 AMC 20093 b
 1        "Person"  includes  without  limitation  any  individual,
 2    corporation, partnership, unincorporated association, and any
 3    other  legal entity, including a trustee, receiver, assignee,
 4    or personal representative of the entity.
 5        "Revenue bond" means any bond issued  by  the  Authority,
 6    the  principal  and interest of which are payable solely from
 7    revenues or income derived from any transmission project.
 8        "Transmission agreement" means an agreement  between  the
 9    Authority  and a third party (including but not limited to an
10    independent  system  operator  or  a  regional   transmission
11    organization) under which:
12             (1)  the   Authority   sells,   leases,  or  assigns
13        operational   control   of   or   otherwise   makes   the
14        transmission project available to a third party; and
15             (2)  the third party commits:
16                  (A)  to operate and maintain  the  transmission
17             project  in  compliance with all applicable federal,
18             State, and local requirements  and  consistent  with
19             normal  and  customary industry safety, operational,
20             and other standards and with  appropriate  indemnity
21             therefore to the Authority;
22                  (B)  to    make    the   transmission   project
23             transmission facilities available for public use  on
24             an  open access, non-discriminatory basis consistent
25             with the principles set forth  in  Orders  No.  888,
26             889,  and  2000  of  the  Federal  Energy Regulatory
27             Commission; and
28                  (C)  to  compensate  the  Authority   for   the
29             Authority's  costs  incurred  in connection with the
30             development of the transmission project.
31        "Transmission project" means the construction of electric
32    transmission lines within or at the border of  the  State  of
33    Illinois and installation of appurtenant equipment to connect
34    such  transmission  lines to electric generating stations and
 
                            -4-      LRB093 14419 AMC 20093 b
 1    to other  electric  transmission  and  distribution  systems,
 2    including  the  necessary  study,  design, and engineering of
 3    such  transmission  lines,  the  acquisition   of   necessary
 4    property and rights of way, construction of such transmission
 5    lines,  and the entering into of transmission agreements with
 6    third parties.

 7        Section  20.  Creation  of  authority;   board   members;
 8    officers.
 9        (a)  The  Illinois Transmission Authority is created as a
10    political   subdivision,   body   politic,   and    municipal
11    corporation.
12        (b)  The  governing  and  administrative  powers  of  the
13    Authority  shall  be  vested  in  its Board of Directors. The
14    Board of Directors shall be comprised of 5 members,  each  of
15    whom  shall  be appointed by the Governor with the advice and
16    consent of the Senate. All persons appointed  as  members  of
17    the Board shall have recognized ability and experience in one
18    or  more  of the following areas: electric utility operations
19    and  management,  engineering,  public  finance,  or   public
20    development.
21        (c)  The  terms  of the 5 initial appointees to the Board
22    of the Authority shall commence 30 days after  the  effective
23    date  of  this Act. Of the Board members initially appointed,
24    one shall serve until the third Monday  in  January  2005,  2
25    shall  serve  until  the  third Monday in January 2006, and 2
26    shall serve until the  third  Monday  in  January  2007.  All
27    successors shall be appointed by the Governor with the advice
28    and  consent  of  the  Senate and hold office for a term of 3
29    years commencing the third Monday in January of the  year  in
30    which  their  term  commences,  except  in  the  case  of  an
31    appointment  to fill a vacancy. Vacancies shall be filled for
32    the remainder of the term. In case of vacancy when the Senate
33    is  not  in  session,  the  Governor  may  make  a  temporary
 
                            -5-      LRB093 14419 AMC 20093 b
 1    appointment until the next  meeting  of  the  Senate  when  a
 2    person shall be nominated to fill such office, and any person
 3    so nominated who is confirmed by the Senate shall hold office
 4    during  the remainder of the term and until a successor shall
 5    be appointed and qualified.
 6        (d)  Members of the Board of the Authority shall  not  be
 7    entitled  to  compensation for their services as members, but
 8    may be reimbursed for  all  necessary  expenses  incurred  in
 9    connection with the performance of their duties as members.
10        (e)  The  Governor  may remove any member of the Board of
11    the Authority in case of incompetency, neglect  of  duty,  or
12    malfeasance in office.
13        (f)  The  Chairperson  of the Board shall be appointed by
14    the Governor from among the Board's members.
15        (g)  The Board may appoint  an  Executive  Director,  who
16    shall have a background in electric transmission development,
17    including    regulatory    and   construction   requirements;
18    familiarity with the legal  and  procedural  requirements  of
19    issuing  bonds;  and  administration.  The Executive Director
20    shall hold  office  at  the  discretion  of  the  Board.  The
21    Executive  Director  shall  be  the  chief administrative and
22    operational  officer  of  the  Authority,  shall  direct  and
23    supervise its administrative affairs and general  management,
24    shall  perform  such other duties as may be prescribed by the
25    Board, and shall receive compensation fixed by the Board. The
26    Executive Director shall attend all meetings  of  the  Board;
27    however,  no action of the Board or of the Authority shall be
28    invalid on account of the absence of the  Executive  Director
29    from  a  meeting.  The  Board  may  delegate to the Executive
30    Director such responsibilities and  authority  as  the  Board
31    determines  appropriate  for  the  proper  functioning of the
32    Authority, except that the Board  may  not  delegate  to  the
33    Executive  Director such responsibilities as are specifically
34    assigned to the Board or the Chairperson under this Act.
 
                            -6-      LRB093 14419 AMC 20093 b
 1        (h)  The Board may appoint such  other  officers  as  the
 2    Board  determines  appropriate for the conduct of the affairs
 3    of the Authority.
 4        (i)  The Authority may engage the services of such  other
 5    agents  and  employees as the Authority determines necessary,
 6    including  attorneys,  appraisers,  engineers,   accountants,
 7    credit  analysts,  and  other  consultants  and may prescribe
 8    their duties and fix their compensation.
 9        (j)  The Board shall meet on the call of its  Chairperson
10    or  upon  written notice of 3 members of the Board. The Board
11    may conduct meetings by telephonic or other electronic medium
12    so long as all Board members can hear and  be  heard  by  one
13    another.

14        Section  25.  Actions  and  duties  of the Authority. All
15    official acts of the Authority shall require the  affirmative
16    vote  of at least 3 members of the Board at which the members
17    casting those affirmative votes  are  present  in  person  or
18    participating  by  electronic  media.  It  is the duty of the
19    Authority to develop new electric transmission  lines  within
20    the  State  where  needed  and  feasible  and as otherwise in
21    compliance with the standards set forth in this Act.

22        Section 30.  Powers. The Authority possesses  all  powers
23    of  a  body  corporate necessary and convenient to accomplish
24    the purpose of this Act, including without limitation all  of
25    the following:
26             (1)  To enter into loans, contracts, agreements, and
27        mortgages  in  any  matter  connected  with  any  of  its
28        corporate purpose and to invest its funds.
29             (2)  To sue and be sued.
30             (3)  To  employ  agents  and  employees necessary to
31        carry out its purposes.
32             (4)  To have and use a common  seal  and  alter  the
 
                            -7-      LRB093 14419 AMC 20093 b
 1        same at its discretion.
 2             (5)  To  adopt  all needful resolutions, ordinances,
 3        by-laws, and rules for the conduct of  its  business  and
 4        affairs  and  for the development, management, and use of
 5        transmission projects.
 6             (6)  To designate the fiscal year for the Authority.
 7             (7)  To accept and expend appropriations.
 8             (8)  To have and exercise all powers and be  subject
 9        to all duties usually incident to corporations.
10             (9)  To  acquire,  own,  lease,  sell,  or otherwise
11        dispose of interests in and to real property  within  and
12        without  the  State of Illinois and improvements situated
13        thereon and in personal property necessary to fulfill the
14        purposes of the Authority.
15             (10)  To engage in any activity or operation that is
16        incidental to and in furtherance of  efficient  operation
17        to accomplish the Authority's primary purpose.
18             (11)  To   determine   the  locations  of,  develop,
19        design,  establish,  construct,  erect,   acquire,   own,
20        repair,  reconstruct,  renovate, remodel, add to, extend,
21        improve,   equip,   operate,   regulate,   and   maintain
22        transmission projects  and  to  enter  into  transmission
23        agreements.
24             (12)  To accept and expend appropriations.
25             (13)  To  borrow  money  from  any  source  for  any
26        corporate  purpose,  including  working  capital  for its
27        operations, reserve funds, or interest, and to  mortgage,
28        pledge  or  otherwise  encumber  property or funds of the
29        Authority, and to contract with or engage the services of
30        any person in connection with  any  financing,  including
31        financial  institutions, issuers of letters of credit, or
32        insurers, and to issue revenue  bonds,  notes,  or  other
33        evidence  of  indebtedness  as  provided in Section 35 of
34        this Act to evidence the obligation of the  Authority  to
 
                            -8-      LRB093 14419 AMC 20093 b
 1        repay the borrowings.

 2        Section 35.  Revenue bonds.
 3        (a)  The  Authority  shall  have  the continuing power to
 4    issue revenue bonds, notes, or other evidence of indebtedness
 5    in an aggregate amount not to  exceed  $500,000,000  for  the
 6    purpose of developing, constructing, acquiring, improving, or
 7    maintaining  transmission projects, for acquiring, improving,
 8    and maintaining any property  in  connection  therewith,  and
 9    otherwise  for  the  purposes  for  which  the  Authority was
10    created. For the purpose of evidencing the obligations of the
11    Authority to repay any money  borrowed,  the  Authority  may,
12    pursuant to ordinance adopted by the Board, from time to time
13    issue  and  dispose  of  its  interest bearing revenue bonds,
14    notes, or other evidences of indebtedness and may  also  from
15    time to time issue and dispose of such bonds, notes, or other
16    evidences  of  indebtedness  to  refund,  at  maturity,  at a
17    redemption date, or in advance of either, any revenue  bonds,
18    notes,   or  other  evidences  of  indebtedness  pursuant  to
19    redemption provisions or at any  time  before  maturity.  All
20    such revenue bonds, notes, or other evidences of indebtedness
21    shall  be  payable  solely  from the revenues or income to be
22    derived from the lease or sale of rights by the Authority  to
23    third  persons  to  maintain,  operate,  and use the electric
24    transmission provided by the transmission  projects  pursuant
25    to  transmission agreements or from any lease, sale, or other
26    disposition of the transmission projects. The revenue  bonds,
27    notes, or other evidences of indebtedness may bear such date,
28    may  mature  at  such  time not exceeding 40 years from their
29    respective dates, may bear interest at such rate or rates not
30    exceeding  the   maximum   rate   permitted   by   the   Bond
31    Authorization  Act,  may  be  in  such  form,  may carry such
32    registration privileges, may be executed in such manner,  may
33    be  payable  at  such place or places, may be made subject to
 
                            -9-      LRB093 14419 AMC 20093 b
 1    redemption in such  manner  and  upon  such  terms,  with  or
 2    without  premium  as  is  stated  on the face thereof, may be
 3    authenticated in such manner, and may contain such terms  and
 4    covenants as may be provided by an applicable ordinance.
 5        (b)  The  holder  of  any  revenue bonds, notes, or other
 6    evidences of indebtedness issued by the Authority  may  bring
 7    suits   at  law  or  proceedings  in  equity  to  compel  the
 8    performance and observance by any corporation or person or by
 9    the Authority or any  of  its  agents  or  employees  of  any
10    contract  or  covenant  made with the holders of such revenue
11    bonds, notes, or other evidences of indebtedness,  to  compel
12    such  corporation,  person,  the Authority, and any agents or
13    employees thereof  to  perform  any  duties  required  to  be
14    performed  for the benefit of the holders of any such revenue
15    bonds, notes, or  other  evidences  of  indebtedness  by  the
16    provision  of  the ordinance authorizing their issuance or by
17    such contract or covenant, and to  enjoin  such  corporation,
18    person,  the  Authority,  and  any of its agents or employees
19    from taking any action in conflict with any  such  ordinance,
20    contract, or covenant.
21        (c)  If  the  Authority  fails to pay the principal of or
22    interest on any of the revenue bonds or premium, if  any,  as
23    the same becomes due, a civil action to compel payment may be
24    instituted  in the appropriate circuit court by the holder or
25    holders of the revenue bonds on which such default or payment
26    exists or by an indenture trustee acting on  behalf  of  such
27    holders. Delivery of a summons and a copy of the complaint to
28    the  Chairperson  of  the  Board  shall constitute sufficient
29    service to give  the  circuit  court  jurisdiction  over  the
30    Authority  and  its  officers  named  as  defendants  for the
31    purpose of compelling such payment. Any case, controversy, or
32    cause of action concerning the validity of this  Act  relates
33    to the revenue of the State of Illinois.
34        (d)  Notwithstanding  the  form  and  tenor  of  any such
 
                            -10-     LRB093 14419 AMC 20093 b
 1    revenue bonds, notes, or other evidences of indebtedness  and
 2    in the absence of any express recital on the face of any such
 3    revenue  bond,  note, or other evidences of indebtedness that
 4    it is non-negotiable, all  such  revenue  bonds,  notes,  and
 5    other   evidences   of   indebtedness   shall  be  negotiable
 6    instruments. Pending the preparation  and  execution  of  any
 7    such   revenue   bonds,   notes,   or   other   evidences  of
 8    indebtedness,  temporary  revenue  bonds,  notes,  or   other
 9    evidences  of  indebtedness  may  be  issued  as  provided by
10    ordinance adopted by the Board.
11        (e)  To secure the payment of any or all of such  revenue
12    bonds,   notes,  or  other  evidences  of  indebtedness,  the
13    revenues to be received by  the  Authority  from  any  lease,
14    sale,  or  other  disposition of the transmission projects or
15    rights to use transmission in the transmission projects shall
16    be  pledged,  and  for  the  purpose  of  setting  forth  the
17    covenants and undertakings of  the  Authority  in  connection
18    with  the issuance thereof and the issuance of any additional
19    revenue bonds,  notes  or  other  evidences  of  indebtedness
20    payable  from  the  revenues,  income,  or  other funds to be
21    derived from the transmission projects,  the  Authority  may,
22    pursuant  to  resolution  of the Board, execute and deliver a
23    mortgage or trust agreement.  A  remedy  for  any  breach  or
24    default  of the terms of any such mortgage or trust agreement
25    by the Authority  may  be  by  mandamus  proceedings  in  the
26    appropriate  circuit  court  to  compel  the  performance and
27    compliance therewith, but the trust agreement  may  prescribe
28    by whom or on whose behalf the action may be instituted.
29        (f)  The  revenue  bonds  or  notes  shall  be secured as
30    provided   in   the   authorizing   ordinance   which    may,
31    notwithstanding  any other provision of this Act, include, in
32    addition  to  any  other  security,  a  specific  pledge   or
33    assignment  of and lien on or security interest in any or all
34    revenues or money of the Authority from whatever source  that
 
                            -11-     LRB093 14419 AMC 20093 b
 1    may  by  law be used for debt service purposes and a specific
 2    pledge or assignment of and lien on or security  interest  in
 3    any  funds  or  accounts  established  or provided for by the
 4    ordinance authorizing the issuance of such revenue  bonds  or
 5    notes.
 6        (g)  The State of Illinois pledges to and agrees with the
 7    holders  of  the  revenues  bonds  and notes of the Authority
 8    issued pursuant to this Section that the State will not limit
 9    or alter the rights and powers vested  in  the  Authority  by
10    this  Act  so  as to impair the terms of any contract made by
11    the Authority with such holders or  in  any  way  impair  the
12    rights  and remedies of such holders until such revenue bonds
13    and notes, together with the interest thereon, with  interest
14    on  any  unpaid  installments  of interest, and all costs and
15    expenses in connection with any action or proceedings  by  or
16    on  behalf of such holders, are fully met and discharged. The
17    Authority  is  authorized  to  include  these   pledges   and
18    agreements  of  the State in any contract with the holders of
19    revenue bonds or notes issued pursuant to this Section.
20        (h)  The revenue bonds, notes,  and  other  evidences  of
21    indebtedness authorized by this Act are not, and shall not be
22    construed  to  be, State debt within the meaning of Section 9
23    of Article IX of the Illinois Constitution, are  not  secured
24    by  the  full  faith  and  credit  of  the State, and are not
25    required to be  repaid,  directly  or  indirectly,  from  tax
26    revenue.

27        Section  40.  Acquisition  of property. The Authority may
28    acquire in its own name, by gift,  purchase,  eminent  domain
29    (by  complaint  filed  pursuant to Article VII of the Code of
30    Civil  Procedure),  immediate  vesting  of  title   (commonly
31    referred  to  as  "quick  take,"  pursuant  to Sections 7-103
32    through 7-112 of the Code of Civil Procedure),  or  otherwise
33    real  or personal property that is necessary or convenient to
 
                            -12-     LRB093 14419 AMC 20093 b
 1    carry out its corporate purposes.

 2        Section 45.  Transmission projects.
 3        (a)  The  Authority  shall,  within  one  year   of   the
 4    enactment  of  this  Act,  conduct  a  comprehensive study of
 5    electric transmission needs within the State of Illinois.
 6        (b)  If  the   Authority   determines   that   additional
 7    transmission  projects  are  needed  in  order  to  ensure an
 8    adequate and reliable supply of electricity in Illinois,  the
 9    Authority  may  undertake  the following activities to ensure
10    that it is able to develop such transmission projects  in  an
11    expeditious and economical fashion:
12             (1)  Identify  suitable  sites  for the transmission
13        projects,  taking  into  account  engineering,  economic,
14        environmental, and community factors.
15             (2)  Secure  rights   to   the   sites   identified,
16        including  transmission  rights-of-way  or acquisition of
17        options for such rights-of-way.
18             (3)  Conduct any studies that may  be  necessary  to
19        construct   and   operate   the   transmission  projects,
20        including but not limited  to  engineering  and  economic
21        studies.
22             (4)  Apply  for  permits,  licenses, or other local,
23        State, or federal approvals.
24        (c)  The Authority may not commit funds for  construction
25    of  a  transmission  project  until the Authority has entered
26    into a transmission agreement  related  to  the  transmission
27    project.

28        Section  50.  Designation  of  depository.  The Authority
29    shall biennially designate a national or State bank or  banks
30    located  within  the State of Illinois as depositories of its
31    money. Those depositories shall be designated upon  condition
32    that  bonds  approved  as to form and surety by the Authority
 
                            -13-     LRB093 14419 AMC 20093 b
 1    and at least equal in amount to the maximum sum  expected  to
 2    be  on  deposit  at  any one time shall be first given by the
 3    depositories to the Authority, those bonds to be  conditioned
 4    for  the  safekeeping  and  prompt repayment of the deposits.
 5    When any of the funds of the Authority shall be deposited  by
 6    the  treasurer  in any such depository, the treasurer and the
 7    sureties on his official  bond  shall,  to  that  extent,  be
 8    exempt  from  liability  for the loss of any of the deposited
 9    funds by reason of the failure, bankruptcy, or any other  act
10    or  default  of  the  depository.  However, the Authority may
11    accept assignments of collateral by and  conditioned  in  the
12    same manner as assignments of collateral are permitted by law
13    to secure deposits of the funds of any city.

14        Section 55.  Reports. The Authority shall annually submit
15    a  report  of  its  finances  to  the  Auditor  General.  The
16    Authority shall annually submit a report of its activities to
17    the Governor and General Assembly.

18        Section  60.  Public  utility.  The  Authority is not and
19    shall not be deemed  to  be  a  public  utility  or  electric
20    supplier for purposes of the laws of this State or otherwise.

21        Section 65.  Exemption from taxation. All property, real,
22    personal, or mixed, owned by the Authority that is located in
23    the  State of Illinois is exempt from taxation under the laws
24    of the State of Illinois to the extent such property is  used
25    for the public purpose of developing transmission projects.