Illinois General Assembly - Full Text of HB0840
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Full Text of HB0840  101st General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Public Utilities Act is amended by changing
5Section 8-508.1 as follows:
6    (220 ILCS 5/8-508.1)  (from Ch. 111 2/3, par. 8-508.1)
7    Sec. 8-508.1. (a) As used in this Section:
8        (1) "Decommissioning" means the series of activities
9    undertaken at the time a nuclear power plant is permanently
10    retired from service to ensure that the final entombment,
11    decontamination, dismantlement, removal and disposal of
12    the plant, including the plant site, and of any radioactive
13    components and materials associated with the plant, is
14    accomplished in compliance with all applicable Illinois
15    and federal laws, and to ensure that such final disposition
16    does not pose any threat to the public health and safety.
17        (2) "Decommissioning costs" means all reasonable costs
18    and expenses incurred in connection with the entombment,
19    decontamination, dismantlement, removal and disposal of
20    the structures, systems and components of a nuclear power
21    plant at the time of decommissioning, including all
22    expenses to be incurred in connection with the preparation
23    for decommissioning, such as engineering and other



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1    planning expenses, and to be incurred after the actual
2    decommissioning occurs, such as physical security and
3    radiation monitoring expenses, less proceeds of insurance,
4    salvage or resale of machinery, construction equipment or
5    apparatus the cost of which was charged as a
6    decommissioning expense.
7        (3) "Decommissioning trust" or "trust" means a
8    fiduciary account in a bank or other financial institution
9    established to hold the decommissioning funds provided
10    pursuant to subsection (b)(2) of this Section for the
11    eventual purpose of paying decommissioning costs, which
12    shall be separate from all other accounts and assets of the
13    public utility establishing the trust.
14        (4) "Nuclear power plant" or "plant" means a nuclear
15    fission thermal power plant. Each unit of a multi-unit site
16    shall be considered a separate plant.
17    (b) By 90 days after the effective date of this amendatory
18Act of 1988, or by the date that the unit satisfies the
19criteria used by the Internal Revenue Service for determining
20when depreciation commences for federal income tax purposes on
21a new generating unit, whichever is later, every public utility
22that owns or operates, in whole or in part, a nuclear power
23plant shall:
24        (1) establish 2 decommissioning trusts, which shall be
25    a "tax qualified" decommissioning trust and a "non-tax
26    qualified" decommissioning trust and shall hold the



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1    decommissioning funds established by the public utility
2    for all nuclear power plants pursuant to subsection (b)(2)
3    of this Section;
4        (2) establish 2 decommissioning funds for each such
5    plant, each of which shall be held for a plant as a
6    separate account in a decommissioning trust; and
7        (3) designate an independent trustee, subject to the
8    approval of the Commission, to administer each of the
9    decommissioning trusts.
10    (c) The 2 decommissioning trusts shall be known as the "tax
11qualified" decommissioning trust and the "non-tax qualified"
12decommissioning trust respectively. Each trust shall be
13established and maintained as follows:
14        (1) The "tax qualified" trust shall be established and
15    maintained in accordance with Section 468A of the Internal
16    Revenue Code of 1986 or any successor thereto and shall be
17    funded by the public utility for each such power plant
18    through annual payments by the public utility that shall
19    not exceed the maximum amount allowable as a deduction for
20    federal income tax purposes for the year for which the
21    payments were made, in accordance with Section 468A of the
22    Internal Revenue Code of 1986 or any successor thereto.
23        (2) The "non-tax qualified" decommissioning trust
24    shall be funded by the public utility for each such power
25    plant through annual payments by the public utility that
26    shall consist of the difference between the total amounts



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1    of decommissioning expenses collected after the effective
2    date of this amendatory Act of 1988 through rates and
3    charges from the public utility's customers as provided by
4    the Commission minus the amounts contributed to the "tax
5    qualified" trust as provided by subsection (c)(1) of this
6    Section and deductible for federal income tax purposes in
7    accordance with Section 468A of the Internal Revenue Code
8    of 1986 or any successor thereto.
9        (3) The following restrictions shall apply in regard to
10    administration of each decommissioning trust:
11            (i) Distributions may be made from a nuclear
12        decommissioning trust only to satisfy the liabilities
13        of the public utility for nuclear decommissioning
14        costs relating to the nuclear power plant for which the
15        decommissioning fund was established and to pay
16        administrative costs, income taxes and other
17        incidental expenses of the trust.
18            (ii) Any assets in a nuclear decommissioning trust
19        that exceed the amount necessary to pay the nuclear
20        decommissioning costs of the nuclear power plant for
21        which the decommissioning fund was established shall
22        be refunded to the public utility that established the
23        fund for the purpose of refunds or credits, as soon as
24        practicable, to the utility's customers.
25            (iii) In the event a public utility sells or
26        otherwise disposes of its direct ownership interest,



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1        or any part thereof, in a nuclear power plant with
2        respect to which a nuclear decommissioning fund has
3        been established, the assets of the fund shall be
4        distributed to the public utility to the extent of the
5        reductions in its liability for future decommissioning
6        after taking into account the liabilities of the public
7        utility for future decommissioning of such nuclear
8        power plant and the liabilities that have been assumed
9        by another entity. The public utility shall, as soon as
10        practicable, provide refunds or credits to its
11        customers representing the full amount of the
12        reductions in its liability for future
13        decommissioning.
14            (iv) The trustee shall invest the "tax qualified"
15        trust assets only in secure assets that are prudent
16        investments for assets held in trust and in such a way
17        as to attempt to maximize the after-tax return on funds
18        invested, subject to the limitations specified in
19        Section 468A of the Internal Revenue Code of 1986 or
20        any successor thereto.
21            (v) The trustee shall invest the "non-tax
22        qualified" trust assets only in secure assets that are
23        prudent investments for assets held in trust and in
24        such a way as to attempt to maximize the after-tax
25        return on funds invested. However the trustee shall not
26        invest any portion of the "non-tax qualified" trust's



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1        funds in the securities or assets of any operator of a
2        nuclear power plant.
3            (vi) The "non-tax qualified" trust shall be
4        subject to the prohibitions against self-dealing
5        applicable to the "tax qualified" trust as specified in
6        Section 468A of the Internal Revenue Code of 1986, or
7        any successor thereto.
8            (vii) All income earned by the trust's funds shall
9        become a part of the trust's funds and subject to the
10        provisions of this Section.
11            (viii) The Commission may adopt by rule or
12        regulation such further restrictions as it deems
13        necessary for the sound management of the trust's
14        funds, consistent with the purposes of this Section.
15    (d) By 90 days after the effective date of this amendatory
16Act of 1988, the Commission shall determine an appropriate
17method to segregate, either internally or externally, all
18decommissioning funds collected prior to the effective date of
19this amendatory Act of 1988 by the utility from its customers,
20and shall order any change in past decommissioning funding
21methods that the Commission finds necessary. In making its
22determination of the appropriate funding method, the
23Commission shall give consideration to, but not be limited by,
24all applicable federal regulations. The change in funding
25method shall be phased-in over an appropriate period of time.
26    (e) The trustee of a trust shall report annually to the



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1Commission, or more frequently if ordered by the Commission.
2The report shall include:
3        (1) the trust's State and federal tax returns;
4        (2) a report on the trust's portfolio of investments
5    and the return thereon;
6        (3) the date and amount of payments received by the
7    trust from the public utility;
8        (4) a copy of all correspondence between the trust and
9    the Internal Revenue Service; and
10        (5) any other information the Commission orders the
11    trust to provide.
12    (f) A nuclear decommissioning trust established pursuant
13to this Section shall be exempt from taxation in Illinois.
14    (g) Beginning on or before May 1, 2020, and every 2 years
15thereafter, the owner or operator of each nuclear power plant
16in this State shall provide the Commission with a copy of the
17nuclear decommissioning funding assurance status report
18submitted to the Nuclear Regulatory Commission and, as
19applicable, to the Federal Energy Regulatory Commission.
20Beginning June 1, 2020, and every 2 years thereafter, the
21Commission shall provide the General Assembly with a copy of
22the nuclear decommissioning funding assurance status report
23for shutdown units as submitted by the owner or operator of a
24nuclear power plant in this State to the Nuclear Regulatory
25Commission and, as applicable, to the Federal Energy Regulatory



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1(Source: P.A. 85-1400.)