State of Illinois
92nd General Assembly

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SB724 Enrolled                                 LRB9207881JScs

 1        AN ACT concerning public utilities.

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

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

 6        (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
 7        Sec. 8-403.1. Electricity purchased from qualified  solid
 8    waste energy facility; tax credit; distributions for economic
 9    development.
10        (a)  It is hereby declared to be the policy of this State
11    to  encourage  the development of alternate energy production
12    facilities in order to conserve our energy resources  and  to
13    provide for their most efficient use.
14        (b)  For the purpose of this Section and Section 9-215.1,
15    "qualified  solid  waste  energy  facility"  means a facility
16    determined by the Illinois Commerce Commission to qualify  as
17    such under the Local Solid Waste Disposal Act, to use methane
18    gas  generated  from  landfills  as  its primary fuel, and to
19    possess characteristics that would enable it to qualify as  a
20    cogeneration or small power production facility under federal
21    law.
22        (c)  In  furtherance  of  the  policy  declared  in  this
23    Section,  the  Illinois  Commerce  Commission  shall  require
24    electric  utilities  to  enter  into  long-term  contracts to
25    purchase  electricity  from  qualified  solid  waste   energy
26    facilities  located  in  the electric utility's service area,
27    for a period beginning on the date that the  facility  begins
28    generating electricity and having a duration of not less than
29    10    years   in   the   case   of   facilities   fueled   by
30    landfill-generated methane,  or  20  years  in  the  case  of
31    facilities  fueled by methane generated from a landfill owned
SB724 Enrolled             -2-                 LRB9207881JScs
 1    by a forest preserve district.  The purchase  rate  contained
 2    in  such  contracts  shall be equal to the average amount per
 3    kilowatt-hour paid from time to time by the unit or units  of
 4    local   government   in   which  the  electricity  generating
 5    facilities are located, excluding  amounts  paid  for  street
 6    lighting and pumping service.
 7        (d)  Whenever  a  public  utility is required to purchase
 8    electricity pursuant to subsection (c)  above,  it  shall  be
 9    entitled to credits in respect of its obligations to remit to
10    the State taxes it has collected under the Electricity Excise
11    Tax  Law  equal to the amounts, if any, by which payments for
12    such electricity exceed (i) the then current  rate  at  which
13    the  utility must purchase the output of qualified facilities
14    pursuant to the federal Public  Utility  Regulatory  Policies
15    Act  of  1978, less (ii) any costs, expenses, losses, damages
16    or other amounts incurred by the utility,  or  for  which  it
17    becomes  liable,  arising  out  of its failure to obtain such
18    electricity from such other sources.  The amount of any  such
19    credit  shall,  in  the  first instance, be determined by the
20    utility, which shall make a monthly report of such credits to
21    the Illinois Commerce Commission  and,  on  its  monthly  tax
22    return,  to  the  Illinois  Department  of  Revenue. Under no
23    circumstances  shall  a  utility  be  required  to   purchase
24    electricity  from  a qualified solid waste energy facility at
25    the rate prescribed in subsection (c) of this Section if such
26    purchase would result in estimated tax credits  that  exceed,
27    on  a  monthly  basis,  the utility's estimated obligation to
28    remit  to  the  State  taxes  it  has  collected  under   the
29    Electricity  Excise  Tax  Law.  The  owner  or operator shall
30    negotiate facility operating conditions with  the  purchasing
31    utility  in  accordance  with  that utility's posted standard
32    terms and  conditions  for  small  power  producers.  If  the
33    Department of Revenue disputes the amount of any such credit,
34    such  dispute  shall  be  decided  by  the  Illinois Commerce
SB724 Enrolled             -3-                 LRB9207881JScs
 1    Commission.  Whenever a qualified solid waste energy facility
 2    has paid or otherwise satisfied in full the capital costs  or
 3    indebtedness  incurred  in  developing  and  implementing the
 4    qualified facility, the qualified  facility  shall  reimburse
 5    the  Public  Utility Fund and the General Revenue Fund in the
 6    State treasury for the actual reduction in payments to  those
 7    Funds  caused  by  this  subsection  (d)  in  a  manner to be
 8    determined by the Illinois Commerce Commission and  based  on
 9    the manner in which revenues for those Funds were reduced.
10        (e)  The  Illinois  Commerce Commission shall not require
11    an  electric  utility  to  purchase  electricity   from   any
12    qualified  solid  waste  energy  facility  which  is owned or
13    operated by an  entity  that  is  primarily  engaged  in  the
14    business  of producing or selling electricity, gas, or useful
15    thermal energy from a source other than one or more qualified
16    solid waste energy facilities.
17        (f)  This Section does not require an electric utility to
18    construct additional facilities unless those  facilities  are
19    paid  for  by the owner or operator of the affected qualified
20    solid waste energy facility.
21        (g)  The Illinois Commerce Commission shall require that:
22    (1) electric utilities use the electricity purchased  from  a
23    qualified solid waste energy facility to displace electricity
24    generated  from  nuclear  power  or  coal mined and purchased
25    outside the  boundaries  of  the  State  of  Illinois  before
26    displacing   electricity   generated   from  coal  mined  and
27    purchased  within  the  State  of  Illinois,  to  the  extent
28    possible, and (2) electric utilities report annually  to  the
29    Commission on the extent of such displacements.
30        (h)  Nothing  in  this  Section  is  intended to cause an
31    electric utility that is required to purchase power hereunder
32    to incur any economic loss as a result of its purchase.   All
33    amounts  paid  for  power  which  a  utility  is  required to
34    purchase pursuant to subparagraph (c) shall be deemed  to  be
SB724 Enrolled             -4-                 LRB9207881JScs
 1    costs  prudently  incurred  for purposes of computing charges
 2    under rates authorized by Section 9-220  of  this  Act.   Tax
 3    credits  provided  for  herein  shall be reflected in charges
 4    made pursuant to rates  so  authorized  to  the  extent  such
 5    credits are based upon a cost which is also reflected in such
 6    charges.
 7        (i)  Beginning in February 1999 and through January 2009,
 8    each   qualified  solid  waste  energy  facility  that  sells
 9    electricity to an  electric  utility  at  the  purchase  rate
10    described in subsection (c) shall file with the Department of
11    Revenue  on  or  before  the  15th  of  each  month  a  form,
12    prescribed  by  the  Department  of  Revenue, that states the
13    number of kilowatt hours of electricity for which payment was
14    received at that purchase rate  from  electric  utilities  in
15    Illinois  during  the  immediately preceding month. This form
16    shall be accompanied by a payment from  the  qualified  solid
17    waste  energy  facility in an amount equal to six-tenths of a
18    mill ($0.0006) per kilowatt hour of electricity stated on the
19    form. Beginning on the effective date of this amendatory  Act
20    of  the 92nd General Assembly, a qualified solid waste energy
21    facility must file the form required  under  this  subsection
22    (i)  before  the 15th of each month regardless of whether the
23    facility received any payment in the previous month. Payments
24    received by the Department of Revenue shall be deposited into
25    the Municipal Economic Development Fund, a trust fund created
26    outside the State treasury. The State  Treasurer  may  invest
27    the  moneys  in  the Fund in any investment authorized by the
28    Public Funds Investment Act, and investment income  shall  be
29    deposited  into  and  become  part of the Fund. Moneys in the
30    Fund shall be used by the  State  Treasurer  as  provided  in
31    subsection  (j).   The  obligation of a qualified solid waste
32    energy facility to make payments into the Municipal  Economic
33    Development  Fund shall terminate upon either: (1) expiration
34    or termination of a facility's contract to  sell  electricity
SB724 Enrolled             -5-                 LRB9207881JScs
 1    to  an  electric  utility  at  the purchase rate described in
 2    subsection (c); or (2) entry of an  enforceable,  final,  and
 3    non-appealable  order  by  a  court of competent jurisdiction
 4    that Public Act 89-448 is invalid.  Payments by  a  qualified
 5    solid  waste  energy  facility  into  the  Municipal Economic
 6    Development Fund do not relieve  the  qualified  solid  waste
 7    energy  facility  of  its  obligation to reimburse the Public
 8    Utility Fund and the General  Revenue  Fund  for  the  actual
 9    reduction  in  payments to those Funds as a result of credits
10    received by electric utilities under subsection (d).
11        A qualified solid waste energy  facility  that  fails  to
12    timely  file  the  requisite  form and payment as required by
13    this  subsection  (i)  shall  be  subject  to  penalties  and
14    interest in conformance with the provisions of  the  Illinois
15    Uniform Penalty and Interest Act.
16        Every  qualified  solid  waste energy facility subject to
17    the provisions of this subsection (i) shall keep and maintain
18    records and books of its sales pursuant  to  subsection  (c),
19    including   payments   received  from  those  sales  and  the
20    corresponding tax  payments  made  in  accordance  with  this
21    subsection  (i),  and  for  purposes  of  enforcement of this
22    subsection (i) all such books and records shall be subject to
23    inspection  by  the  Department  of  Revenue  or   its   duly
24    authorized agents or employees.
25        When  a  qualified  solid  waste energy facility fails to
26    file the  form  or  make  the  payment  required  under  this
27    subsection (i), the Department of Revenue, to the extent that
28    it  is  practical,  may  enforce  the payment obligation in a
29    manner consistent with Section 5 of the Retailers' Occupation
30    Tax Act, and if necessary may impose and enforce a  tax  lien
31    in  a manner consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f,
32    5g, and 5i of the Retailers' Occupation Tax Act.  No tax lien
33    may be imposed or enforced, however, unless a qualified solid
34    waste energy facility fails  to  make  the  payment  required
SB724 Enrolled             -6-                 LRB9207881JScs
 1    under  this subsection (i).  Only to the extent necessary and
 2    for  the  purpose  of  enforcing  this  subsection  (i),  the
 3    Department of Revenue may secure necessary information from a
 4    qualified solid waste energy facility in a manner  consistent
 5    with Section 10 of the Retailers' Occupation Tax Act.
 6        All  information received by the Department of Revenue in
 7    its administration and enforcement  of  this  subsection  (i)
 8    shall  be confidential in a manner consistent with Section 11
 9    of the Retailers' Occupation  Tax  Act.   The  Department  of
10    Revenue  may  adopt rules to implement the provisions of this
11    subsection (i).
12        For  purposes  of  implementing  the  maximum   aggregate
13    distribution  provisions  in  subsections (j) and (k), when a
14    qualified solid waste energy facility makes a late payment to
15    the Department of Revenue  for  deposit  into  the  Municipal
16    Economic  Development Fund, that payment and deposit shall be
17    attributed to the month and corresponding  quarter  in  which
18    the  payment  should  have been made, and the Treasurer shall
19    make retroactive distributions or refunds, as  the  case  may
20    be, whenever such late payments so require.
21        (j)  The  State  Treasurer,  without  appropriation, must
22    make distributions immediately after January  15,  April  15,
23    July 15, and October 15 of each year, up to maximum aggregate
24    distributions of $500,000 for the distributions made in the 4
25    quarters  beginning  with  the  April distribution and ending
26    with the January distribution, from  the  Municipal  Economic
27    Development  Fund to each city, village, or incorporated town
28    that has within its boundaries an incinerator that: (1)  uses
29    or,  on  the  effective  date  of  Public  Act  90-813,  used
30    municipal  waste as its primary fuel to generate electricity;
31    (2) was determined by the  Illinois  Commerce  Commission  to
32    qualify  as  a qualified solid waste energy facility prior to
33    the effective date of Public Act 89-448;  and  (3)  commenced
34    operation  prior  to January 1, 1998.  Total distributions in
SB724 Enrolled             -7-                 LRB9207881JScs
 1    the  aggregate  to  all  qualified  cities,   villages,   and
 2    incorporated towns in the 4 quarters beginning with the April
 3    distribution  and  ending with the January distribution shall
 4    not exceed $500,000.  The amount of each  distribution  shall
 5    be  determined  pro rata based on the population of the city,
 6    village,  or  incorporated  town  compared   to   the   total
 7    population  of  all  cities, villages, and incorporated towns
 8    eligible to receive a distribution.   Distributions  received
 9    by  a  city,  village, or incorporated town must be held in a
10    separate account and may be used only to promote and  enhance
11    industrial, commercial, residential, service, transportation,
12    and   recreational   activities  and  facilities  within  its
13    boundaries, thereby enhancing the  employment  opportunities,
14    public  health  and general welfare, and economic development
15    within the community, including  administrative  expenditures
16    exclusively   to  further  these  activities.   These  funds,
17    however,  shall  not  be  used  by  the  city,  village,   or
18    incorporated  town,  directly  or  indirectly,  to  purchase,
19    lease,  operate, or in any way subsidize the operation of any
20    incinerator, and these funds shall not be paid,  directly  or
21    indirectly, by the city, village, or incorporated town to the
22    owner,  operator,  lessee,  shareholder, or bondholder of any
23    incinerator. Moreover, these funds shall not be used  to  pay
24    attorneys  fees in any litigation relating to the validity of
25    Public Act 89-448.  Nothing in this Section prevents a  city,
26    village,  or  incorporated  town  from  using other corporate
27    funds for any  legitimate  purpose.   For  purposes  of  this
28    subsection,  the  term  "municipal  waste"  has  the  meaning
29    ascribed   to   it  in  Section  3.21  of  the  Environmental
30    Protection Act.
31        (k)  If maximum aggregate distributions of $500,000 under
32    subsection (j) have been made after the January  distribution
33    from  the  Municipal  Economic  Development  Fund,  then  the
34    balance  in the Fund shall be refunded to the qualified solid
SB724 Enrolled             -8-                 LRB9207881JScs
 1    waste  energy  facilities  that  made  payments   that   were
 2    deposited  into the Fund during the previous 12-month period.
 3    The refunds shall  be  prorated  based  upon  the  facility's
 4    payments  in  relation  to  total  payments for that 12-month
 5    period.
 6        (l)  Beginning  January  1,  2000,  and  each  January  1
 7    thereafter, each city, village,  or  incorporated  town  that
 8    received    distributions   from   the   Municipal   Economic
 9    Development  Fund,   continued   to   hold   any   of   those
10    distributions,  or made expenditures from those distributions
11    during the immediately  preceding  year  shall  submit  to  a
12    financial   and   compliance   and  program  audit  of  those
13    distributions performed by the Auditor General at no cost  to
14    the  city,  village,  or  incorporated town that received the
15    distributions.  The audit should be completed by June  30  or
16    as soon thereafter as possible.  The audit shall be submitted
17    to  the  State  Treasurer  and  those  officers enumerated in
18    Section 3-14 of the Illinois State  Auditing  Act.    If  the
19    Auditor  General  finds that distributions have been expended
20    in violation of this Section, the Auditor General shall refer
21    the matter to the Attorney General.  The Attorney General may
22    recover, in a  civil  action,  3  times  the  amount  of  any
23    distributions   illegally  expended.  For  purposes  of  this
24    subsection, the terms "financial audit," "compliance  audit",
25    and  "program  audit"  have  the meanings ascribed to them in
26    Sections 1-13 and 1-15 of the Illinois State Auditing Act.
27    (Source: P.A. 90-813, eff. 1-29-99; 91-901, eff. 1-1-01.)

28        Section 99.  Effective date.  This Act takes effect  upon
29    becoming law.

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