State of Illinois
91st General Assembly

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 1        AN  ACT  in  relation to public utilities, amending named
 2    Acts.

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

 5        Section  5.  The Electricity Excise Tax Law is amended by
 6    changing Sections 2-7 and 2-9 as follows:

 7        (35 ILCS 640/2-7)
 8        Sec. 2-7.  Collection of electricity excise tax.
 9        (a)  Beginning with bills  for  electricity  or  electric
10    service  issued  on and after August 1, 1998, the tax imposed
11    by this Law shall be collected from the purchaser, other than
12    a self-assessing purchaser where the delivering  supplier  or
13    suppliers  are  notified by the Department that the purchaser
14    has been registered as a  self-assessing  purchaser  for  the
15    accounts  listed by the self-assessing purchaser as described
16    in Section 2-10 of  this  Law,  by  any  delivering  supplier
17    maintaining  a  place  of business in this State at the rates
18    stated  in  Section  2-4  with  respect  to  the  electricity
19    delivered  by  such  delivering  supplier  to  or   for   the
20    purchaser,  and  shall  be  remitted  to  the  Department  as
21    provided in Section 2-9 of this Law. All sales to a purchaser
22    are  presumed subject to tax collection unless the Department
23    notifies the delivering supplier that the purchaser has  been
24    registered  as  a  self-assessing  purchaser for the accounts
25    listed  by  the  self-assessing  purchaser  as  described  in
26    Section 2-10 of this Law.  Upon receipt  of  notification  by
27    the  Department,  the  delivering supplier is relieved of all
28    liability for the collection and remittance of tax  from  the
29    self-assessing  purchaser for which notification was provided
30    by the Department.  The delivering supplier  is  relieved  of
31    the   liability   for  the  collection  of  the  tax  from  a
                            -2-                LRB9112169LDpk
 1    self-assessing purchaser until such time  as  the  delivering
 2    supplier  is  notified  in writing by the Department that the
 3    purchaser's certification as a self-assessing purchaser is no
 4    longer in effect. Delivering suppliers shall collect the  tax
 5    from  purchasers  by  adding  the  tax  to  the amount of the
 6    purchase price received from  the  purchaser  for  delivering
 7    electricity  for  or  to  the  purchaser.  Where a delivering
 8    supplier does not collect the tax  from  a  purchaser,  other
 9    than  a  self-assessing  purchaser,  as provided herein, such
10    purchaser shall pay the tax directly to the Department.
11        (b)  The credit allowed to a public utility  pursuant  to
12    under  Section  8-403.1  of the Public Utilities Act shall be
13    allowed as a credit against the public  utility's  obligation
14    to remit electricity excise tax described in Section 2-9.
15    (Source:  P.A.  90-561,  eff.  8-1-98;  90-624, eff. 7-10-98;
16    90-813, eff. 1-29-99.)

17        (35 ILCS 640/2-9)
18        Sec. 2-9.   Return  and  payment  of  tax  by  delivering
19    supplier.    Each  delivering  supplier  who  is  required or
20    authorized to collect the tax imposed by this Law shall  make
21    a  return to the Department on or before the 15th day of each
22    month for the preceding calendar month stating the following:
23             (1)  The delivering supplier's name.
24             (2)  The  address  of  the   delivering   supplier's
25        principal  place  of  business  and  the  address  of the
26        principal place of  business  (if  that  is  a  different
27        address)  from  which  the delivering supplier engaged in
28        the business of delivering electricity in this State.
29             (3)  The total number of  kilowatt-hours  which  the
30        supplier  delivered  to  or  for  purchasers  during  the
31        preceding  calendar month and upon the basis of which the
32        tax is imposed.
33             (4)  Amount of tax, computed upon Item  (3)  at  the
                            -3-                LRB9112169LDpk
 1        rates stated in Section 2-4.
 2             (5)  An  adjustment for uncollectible amounts of tax
 3        in respect  of  prior  period  kilowatt-hour  deliveries,
 4        determined  in  accordance  with  rules  and  regulations
 5        promulgated by the Department.
 6             (5.5)  The  amount  of credits to which the taxpayer
 7        is entitled on account  of  purchases  made  pursuant  to
 8        under Section 8-403.1 of the Public  Utilities Act.
 9             (6)  Such   other   information  as  the  Department
10        reasonably may require.
11        In making such return the delivering supplier may use any
12    reasonable method to derive reportable "kilowatt-hours"  from
13    the delivering supplier's records.
14        If the average monthly tax liability to the Department of
15    the   delivering   supplier   does  not  exceed  $2,500,  the
16    Department may authorize the delivering supplier's returns to
17    be filed on a  quarter-annual  basis,  with  the  return  for
18    January,  February  and  March  of  a given year being due by
19    April 30 of such year; with the return  for  April,  May  and
20    June  of a given year being due by July 31 of such year; with
21    the return for July, August and September  of  a  given  year
22    being due by October 31 of such year; and with the return for
23    October,  November  and December of a given year being due by
24    January 31 of the following year.
25        If the average monthly tax liability to the Department of
26    the  delivering  supplier  does  not   exceed   $1,000,   the
27    Department may authorize the delivering supplier's returns to
28    be filed on an annual basis, with the return for a given year
29    being due by January 31 of the following year.
30        Such  quarter-annual  and  annual returns, as to form and
31    substance, shall be  subject  to  the  same  requirements  as
32    monthly returns.
33        Notwithstanding   any   other   provision   in  this  Law
34    concerning the time within which a  delivering  supplier  may
                            -4-                LRB9112169LDpk
 1    file  a  return,  any  such delivering supplier who ceases to
 2    engage  in  a  kind  of  business  which  makes  the   person
 3    responsible  for  filing  returns under this Law shall file a
 4    final return under this Law with the Department not more than
 5    one month after discontinuing such business.
 6        Each delivering supplier whose average monthly  liability
 7    to  the  Department under this Law was $10,000 or more during
 8    the preceding calendar year, excluding the month  of  highest
 9    liability  and the month of lowest liability in such calendar
10    year, and who is not operated by a unit of local  government,
11    shall  make estimated payments to the Department on or before
12    the 7th, 15th, 22nd and last day of the  month  during  which
13    tax  liability to the Department is incurred in an amount not
14    less than the  lower  of  either  22.5%  of  such  delivering
15    supplier's  actual tax liability for the month or 25% of such
16    delivering supplier's  actual  tax  liability  for  the  same
17    calendar  month  of  the  preceding year.  The amount of such
18    quarter-monthly payments shall be credited against the  final
19    tax  liability  of such delivering supplier's return for that
20    month.  An outstanding credit approved by the Department or a
21    credit memorandum issued by the Department arising from  such
22    delivering  supplier's  overpayment  of  his or her final tax
23    liability for any month may be applied to reduce  the  amount
24    of any subsequent quarter-monthly payment or credited against
25    the  final tax liability of such delivering supplier's return
26    for any subsequent month.  If any quarter-monthly payment  is
27    not  paid  at  the  time  or  in  the amount required by this
28    Section, such delivering supplier shall be liable for penalty
29    and interest on the difference between the minimum amount due
30    as a payment and the amount  of  such  payment  actually  and
31    timely  paid,  except insofar as such delivering supplier has
32    previously made payments for that month to the Department  in
33    excess of the minimum payments previously due.
34        If  the  Director finds that the information required for
                            -5-                LRB9112169LDpk
 1    the  making  of  an  accurate  return  cannot  reasonably  be
 2    compiled by such delivering supplier within 15 days after the
 3    close of the calendar month for which a return is to be made,
 4    the Director may grant an extension of time for the filing of
 5    such return for a period not to exceed 31 calendar days.  The
 6    granting of such an extension may  be  conditioned  upon  the
 7    deposit by such delivering supplier with the Department of an
 8    amount  of  money  not  exceeding the amount estimated by the
 9    Director to be due with the return  so  extended.   All  such
10    deposits shall be credited against such delivering supplier's
11    liabilities  under  this  Law.   If  the deposit exceeds such
12    delivering supplier's present and probable future liabilities
13    under this Law, the Department shall issue to such delivering
14    supplier a credit memorandum, which may be assigned  by  such
15    delivering  supplier  to  a similar person under this Law, in
16    accordance  with  reasonable  rules  and  regulations  to  be
17    prescribed by the Department.
18        The delivering supplier making the return provided for in
19    this Section shall, at the time of making such return, pay to
20    the Department the amount of tax imposed by this Law.
21        A delivering supplier who  has  an  average  monthly  tax
22    liability   of  $10,000  or  more  shall  make  all  payments
23    required by rules  of  the  Department  by  electronic  funds
24    transfer.  The term "average monthly tax liability" shall be
25    the  sum  of the delivering supplier's liabilities under this
26    Law for the immediately preceding calendar  year  divided  by
27    12.   Any  delivering  supplier not required to make payments
28    by electronic funds transfer may make payments by electronic
29    funds transfer with the permission of  the  Department.   All
30    delivering suppliers required to make payments by electronic
31    funds  transfer  and  any  delivering suppliers authorized to
32    voluntarily make payments by electronic funds transfer shall
33    make  those  payments  in  the  manner  authorized   by   the
34    Department.
                            -6-                LRB9112169LDpk
 1        Each  month  the  Department  shall  pay  into the Public
 2    Utility Fund in the State treasury an  amount  determined  by
 3    the Director to be equal to 3.0% of the funds received by the
 4    Department  pursuant  to  this Section.  The remainder of all
 5    moneys received by the Department under this Section shall be
 6    paid into the General Revenue Fund in the State treasury.
 7    (Source: P.A. 90-561, eff. 8-1-98; 90-813, eff. 1-29-99.)

 8        Section 10.  The  Public  Utilities  Act  is  amended  by
 9    changing Section 8-403.1 as follows:

10        (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
11        Sec.  8-403.1. Electricity purchased from qualified solid
12    waste energy facility; tax credit; distributions for economic
13    development.
14        (a)  It is hereby declared to be the policy of this State
15    to encourage the development of alternate  energy  production
16    facilities  in  order to conserve our energy resources and to
17    provide for their most efficient use.
18        (b)  For the purpose of this Section and Section 9-215.1,
19    "qualified solid waste  energy  facility"  means  a  facility
20    determined  by the Illinois Commerce Commission to qualify as
21    such under the Local Solid Waste Disposal Act, to use methane
22    gas generated from landfills as  its  primary  fuel,  and  to
23    possess  characteristics that would enable it to qualify as a
24    cogeneration or small power production facility under federal
25    law.
26        (c)  In  furtherance  of  the  policy  declared  in  this
27    Section,  the  Illinois  Commerce  Commission  shall  require
28    electric utilities  to  enter  into  long-term  contracts  to
29    purchase   electricity  from  qualified  solid  waste  energy
30    facilities located in the electric  utility's  service  area,
31    for  a  period beginning on the date that the facility begins
32    generating electricity and having a duration of not less than
                            -7-                LRB9112169LDpk
 1    10   years   in   the   case   of   facilities   fueled    by
 2    landfill-generated  methane,  or  20  years  in  the  case of
 3    facilities fueled by methane generated from a landfill  owned
 4    by  a  forest preserve district.  The purchase rate contained
 5    in such contracts shall be equal to the  average  amount  per
 6    kilowatt-hour  paid from time to time by the unit or units of
 7    local  government  in  which   the   electricity   generating
 8    facilities  are  located,  excluding  amounts paid for street
 9    lighting and pumping service.
10        (d)  Whenever a public utility is  required  to  purchase
11    electricity  pursuant  to  subsection  (c) above, it shall be
12    entitled to credits in respect of its obligations to remit to
13    the State taxes it has collected under the Electricity Excise
14    Tax Law equal to the amounts, if any, by which  payments  for
15    such  electricity  exceed  (i) the then current rate at which
16    the utility must purchase the output of qualified  facilities
17    pursuant  to  the  federal Public Utility Regulatory Policies
18    Act of 1978, less (ii) any costs, expenses,  losses,  damages
19    or  other  amounts  incurred  by the utility, or for which it
20    becomes liable, arising out of its  failure  to  obtain  such
21    electricity  from such other sources.  The amount of any such
22    credit shall, in the first instance,  be  determined  by  the
23    utility, which shall make a monthly report of such credits to
24    the  Illinois  Commerce  Commission  and,  on its monthly tax
25    return, to the  Illinois  Department  of  Revenue.  Under  no
26    circumstances   shall  a  utility  be  required  to  purchase
27    electricity from a qualified solid waste energy  facility  at
28    the rate prescribed in subsection (c) of this Section if such
29    purchase  would  result in estimated tax credits that exceed,
30    on a monthly basis, the  utility's  estimated  obligation  to
31    remit   to  the  State  taxes  it  has  collected  under  the
32    Electricity Excise Tax  Law.  The  owner  or  operator  shall
33    negotiate  facility  operating conditions with the purchasing
34    utility in accordance with  that  utility's  posted  standard
                            -8-                LRB9112169LDpk
 1    terms  and  conditions  for  small  power  producers.  If the
 2    Department of Revenue disputes the amount of any such credit,
 3    such dispute  shall  be  decided  by  the  Illinois  Commerce
 4    Commission.  Whenever a qualified solid waste energy facility
 5    has  paid or otherwise satisfied in full the capital costs or
 6    indebtedness incurred  in  developing  and  implementing  the
 7    qualified  facility,  the  qualified facility shall reimburse
 8    the Public Utility Fund and the General Revenue Fund  in  the
 9    State  treasury for the actual reduction in payments to those
10    Funds caused by  this  subsection  (d)  in  a  manner  to  be
11    determined  by  the Illinois Commerce Commission and based on
12    the manner in which revenues for those Funds were reduced.
13        (e)  The Illinois Commerce Commission shall  not  require
14    an   electric   utility  to  purchase  electricity  from  any
15    qualified solid waste  energy  facility  which  is  owned  or
16    operated  by  an  entity  that  is  primarily  engaged in the
17    business of producing or selling electricity, gas, or  useful
18    thermal energy from a source other than one or more qualified
19    solid waste energy facilities.
20        (f)  This Section does not require an electric utility to
21    construct  additional  facilities unless those facilities are
22    paid for by the owner or operator of the  affected  qualified
23    solid waste energy facility.
24        (g)  The Illinois Commerce Commission shall require that:
25    (1)  electric  utilities use the electricity purchased from a
26    qualified solid waste energy facility to displace electricity
27    generated from nuclear power  or  coal  mined  and  purchased
28    outside  the  boundaries  of  the  State  of  Illinois before
29    displacing  electricity  generated  from   coal   mined   and
30    purchased  within  the  State  of  Illinois,  to  the  extent
31    possible,  and  (2) electric utilities report annually to the
32    Commission on the extent of such displacements.
33        (h)  Nothing in this Section  is  intended  to  cause  an
34    electric utility that is required to purchase power hereunder
                            -9-                LRB9112169LDpk
 1    to  incur any economic loss as a result of its purchase.  All
 2    amounts paid  for  power  which  a  utility  is  required  to
 3    purchase  pursuant  to subparagraph (c) shall be deemed to be
 4    costs prudently incurred for purposes  of  computing  charges
 5    under  rates  authorized  by  Section 9-220 of this Act.  Tax
 6    credits provided for herein shall  be  reflected  in  charges
 7    made  pursuant  to  rates  so  authorized  to the extent such
 8    credits are based upon a cost which is also reflected in such
 9    charges.
10        (i)  Beginning in February 1999 and through January 2009,
11    each  qualified  solid  waste  energy  facility  that   sells
12    electricity  to  an  electric  utility  at  the purchase rate
13    described  in  subsection  (c)  shall  file  with  the  State
14    Treasurer on or before the 1st 15th of  each  month  a  form,
15    prescribed  by the State Treasurer, that states the number of
16    kilowatt hours of electricity for which payment was  received
17    at  that  purchase  rate  from electric utilities in Illinois
18    during the immediately preceding month. This  form  shall  be
19    accompanied  by  a  payment  from  the  qualified solid waste
20    energy facility in an amount equal to six-tenths  of  a  mill
21    ($0.0006)  per  kilowatt  hour  of  electricity stated on the
22    form. Payments received  by  the  State  Treasurer  shall  be
23    deposited  into  the  Municipal  Economic Development Fund, a
24    trust fund created outside  the  State  treasury.  The  State
25    Treasurer may invest the moneys in the Fund in any investment
26    authorized by the Public Funds Investment Act, and investment
27    income  shall  be deposited into and become part of the Fund.
28    Moneys in the Fund shall be used by the  State  Treasurer  as
29    provided  in  subsection  (j).  The obligation of a qualified
30    solid  waste  energy  facility  to  make  payments  into  the
31    Municipal Economic  Development  Fund  shall  terminate  upon
32    either:   (1)  expiration  or  termination  of  a  facility's
33    contract to sell electricity to an electric  utility  at  the
34    purchase rate described in subsection (c); or (2) entry of an
                            -10-               LRB9112169LDpk
 1    enforceable,  final,  and  non-appealable order by a court of
 2    competent jurisdiction that Public  Act  89-448  is  invalid.
 3    Payments  by a qualified solid waste energy facility into the
 4    Municipal  Economic  Development  Fund  do  not  relieve  the
 5    qualified solid waste energy facility of  its  obligation  to
 6    reimburse  the  Public  Utility  Fund and the General Revenue
 7    Fund for the actual reduction in payments to those Funds as a
 8    result  of  credits  received  by  electric  utilities  under
 9    subsection (d).
10        (j)  The State  Treasurer,  without  appropriation,  must
11    make  distributions  immediately  after January 1 15, April 1
12    15, July 1 15, and October 1 15 of each year, up  to  maximum
13    aggregate  distributions  of  $500,000  for the distributions
14    made in the 4 quarters beginning with the April  distribution
15    and  ending with the January distribution, from the Municipal
16    Economic  Development  Fund  to  each   city,   village,   or
17    incorporated   town   that   has  within  its  boundaries  an
18    incinerator that: (1) uses municipal  waste  as  its  primary
19    fuel  to  generate  electricity;  (2)  was  determined by the
20    Illinois Commerce Commission to qualify as a qualified  solid
21    waste  energy  facility prior to the effective date of Public
22    Act 89-448; and (3) commenced operation prior to  January  1,
23    1998.   Total distributions in the aggregate to all qualified
24    cities, villages, and incorporated towns in  the  4  quarters
25    beginning  with  the  April  distribution and ending with the
26    January distribution shall not exceed $500,000.   The  amount
27    of  each  distribution  shall be determined pro rata based on
28    the population of the city,  village,  or  incorporated  town
29    compared to the total population of all cities, villages, and
30    incorporated   towns  eligible  to  receive  a  distribution.
31    Distributions received by a city,  village,  or  incorporated
32    town  must be held in a separate account and may be used only
33    to promote and enhance industrial,  commercial,  residential,
34    service,  transportation,  and  recreational  activities  and
                            -11-               LRB9112169LDpk
 1    facilities  within  its  boundaries,  thereby  enhancing  the
 2    employment  opportunities, public health and general welfare,
 3    and economic  development  within  the  community,  including
 4    administrative  expenditures  exclusively  to  further  these
 5    activities.   These  funds, however, shall not be used by the
 6    city, village, or incorporated town, directly or  indirectly,
 7    to  purchase,  lease,  operate,  or  in any way subsidize the
 8    operation of any incinerator, and these funds  shall  not  be
 9    paid,  directly  or  indirectly,  by  the  city,  village, or
10    incorporated   town   to   the   owner,   operator,   lessee,
11    shareholder, or  bondholder  of  any  incinerator.  Moreover,
12    these  funds  shall  not be used to pay attorneys fees in any
13    litigation relating to the validity  of  Public  Act  89-448.
14    Nothing   in  this  Section  prevents  a  city,  village,  or
15    incorporated town from using other corporate  funds  for  any
16    legitimate  purpose.   For  purposes  of this subsection, the
17    term "municipal waste" has the  meaning  ascribed  to  it  in
18    Section 3.21 of the Environmental Protection Act.
19        (k)  If maximum aggregate distributions of $500,000 under
20    subsection  (j) have been made after the January distribution
21    from  the  Municipal  Economic  Development  Fund,  then  the
22    balance in the Fund shall be refunded to the qualified  solid
23    waste   energy   facilities  that  made  payments  that  were
24    deposited into the Fund during the previous 12-month  period.
25    The  refunds  shall  be  prorated  based  upon the facility's
26    payments in relation to  total  payments  for  that  12-month
27    period.
28        (l)  Beginning  January  1,  2000,  and  each  January  1
29    thereafter,  each  city,  village,  or incorporated town that
30    received   distributions   from   the   Municipal    Economic
31    Development   Fund,   continued   to   hold   any   of  those
32    distributions, or made expenditures from those  distributions
33    during  the  immediately  preceding  year  shall  submit to a
34    financial  and  compliance  and  program   audit   of   those
                            -12-               LRB9112169LDpk
 1    distributions  performed by the Auditor General at no cost to
 2    the city, village, or incorporated  town  that  received  the
 3    distributions.   The  audit should be completed by June 30 or
 4    as soon thereafter as possible.  The audit shall be submitted
 5    to the State  Treasurer  and  those  officers  enumerated  in
 6    Section  3-14  of  the  Illinois  State Auditing Act.  If the
 7    Auditor General finds that distributions have  been  expended
 8    in violation of this Section, the Auditor General shall refer
 9    the matter to the Attorney General.  The Attorney General may
10    recover,  in  a  civil  action,  3  times  the  amount of any
11    distributions  illegally  expended.  For  purposes  of   this
12    subsection,  the terms "financial audit," "compliance audit",
13    and "program audit" have the meanings  ascribed  to  them  in
14    Sections 1-13 and 1-15 of the Illinois State Auditing Act.
15    (Source: P.A. 89-448, eff. 3-14-96; 90-813, eff. 1-29-99.)

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