Section 120.10  Purpose

 

a)         The Illinois Resource Development and Energy Security Act [20 ILCS 688] authorizes the State of Illinois, through the Department of Commerce and Economic Opportunity, formerly known as the Department of Commerce and Community Affairs, to promote the development of new, coal-fired electric generation capacity in Illinois.  The purpose and scope of the Act is the enhancement of the State's energy security by insuring that:

 

1)         the State's vast and underutilized coal resources are tapped as a fuel source for new electric generating plants;

 

2)         the electric transmission system within the State is upgraded to more efficiently distribute additional amounts of electricity;

 

3)         well-paying jobs are created as new electric plants are built in regions of the State with relatively high unemployment; and

 

4)         substantial grant funds and the full faith and credit of the State of Illinois are made available to facilitate investments in the State's energy infrastructure to achieve economic development within the Illinois coal industry and insure energy security for Illinois citizens.

 

b)         The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code [20 ILCS 605/605-332] authorizes the Department to provide financial assistance to eligible businesses for new electric generating facilities from funds appropriated by the General Assembly.  Financial assistance  will be provided to eligible applicants in the form of a grant through the Coal Revival Program.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.20  Definitions

 

The following definitions are applicable to this Part:

 

"Act" means the Illinois Resource Development and Energy Security Act [20 ILCS 688].

 

"Agreement" means a written document executed between the grantee and the Department defining the rights and obligations with respect to the project.

 

"Applicant" means an entity, as defined in Section 120.30 of this Part, submitting a written request for program funds appropriated under the Act.

 

"Baseload" means the minimum amount of power delivered or required over a given period of time at a steady state.

 

"Coal Revival Program" means the Illinois Resource Development and Energy Security Act grant program described in this Part.

 

"Department" means the Department of Commerce and Economic Opportunity, formerly known as the Department of Commerce and Community Affairs.

 

"Director" means the Director of the Department of Commerce and Economic Opportunity, formerly known as the Department of Commerce and Community Affairs.

 

"Eligible business" means an entity that proposes to construct a new electric generating facility and that has applied to the Department to receive financial assistance pursuant to this Part.  [20 ILCS 605/605-332(a)]

 

"Full-time equivalent job" means the number of employees required to equal one full-time employee.  For purposes of this definition, employee means a person who works a minimum of 35 hours per week for a minimum of 13 consecutive weeks.

 

"Grant amount" means an amount that the Department shall pay to a grantee for its use on an eligible project.

 

"Grantee" means an entity, as defined in Section 120.30 of this Part, eligible to receive program funds appropriated under the Act.

 

"Illinois coal mining job" means:

 

a full-time equivalent job in an Illinois coal mine, not including a call back from a layoff, created after July 1, 2001; or

 

after July 1, 2001, an additional purchase of 9,691 tons of Illinois-mined coal per year (an amount equal to the average annual coal produced per Illinois coal miner, calculated by dividing the total Illinois coal production by the total number of Illinois miners, as reported to the Department of Natural Resources for inclusion in the Office of Mines and Minerals Annual Statistical Report for calendar year 2000).

 

"New electric generating facility" means a newly-constructed electric generation plant or a newly constructed generation capacity expansion at an existing facility, including the transmission lines and associated equipment that transfers electricity from points of supply to points of delivery, and for which foundation construction commenced not sooner than July 1, 2001, which is designed to provide baseload electric generation operating on a continuous basis throughout the year, and which has an aggregate rated generating capacity of at least 400 megawatts for all new units at one site, uses coal or gases derived from coal as its primary fuel source, and supports the creation of at least 150 new Illinois coal mining jobs. [20 ILCS 605/605-332(a)]

 

"Project" means the activities described by the applicant in the grant application and approved by the Department.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.30  Eligible Applicants

 

Businesses eligible for funding consideration under the Coal Revival Program must meet all of the following criteria:

 

a)         construct a new electric generating facility or a new expansion at an electric generating facility, including transmission lines and associated equipment that transfers electricity from the points of supply to points of delivery;

 

b)         provide baseload electric power operating on a continuous basis throughout the year;

 

c)         construct a new facility or facility expansion that will have an aggregate nameplate generating capacity of 400 megawatts (MW) or more for all units at one site;

 

d)         commence foundation construction on or after July 1, 2001;

 

e)         use Illinois coal or gases derived from coal as its primary fuel source at the proposed facility; and

 

f)         propose a facility or facility expansion that supports the creation of at least 150 new Illinois coal mining jobs.

 

As an alternative means of determining minimum eligibility under the program, job creation may be indirectly determined from quantities of coal purchased annually, based on the average amount of coal produced per Illinois miner in calendar year 2000, as published in the Annual Statistical Report of the Division of Mines and Minerals, Illinois Department of Natural Resources.  The average Illinois miner produced 9,691 tons of coal in calendar year 2000.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.40  Eligible Uses of Grant Funds

 

a)         The grant amount may be used for capital facilities consisting of buildings, structures, durable equipment and land at the new electric generating facility.

 

b)         Funding for the Coal Revival Program is derived from the sale of general obligation bonds issued by the State of Illinois.  This funding source imposes limits on the use of program funds.  When authorized, general obligation bonds will be sold in increments and grants awarded to successful applicants upon certification by the Governor's Office of Management and Budget that the State portion of the projected tax receipts will equal or exceed 110% of the maximum annual debt service over the 25-year life of the bonds.  State sales taxes from coal used by new plants will be set aside and transferred to the general obligation bond retirement and interest fund to retire these bonds.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.50  Allocation of Appropriations

 

Annual appropriations made by the General Assembly to the Department for the purpose of providing grants under Section 605-332 of the Civil Administrative Code of Illinois [20 ILCS 605/605-332] for new electric generating facilities are allocated by the Department.

 

Section 120.60  Funding Limitation

 

In accordance with Section 605-332 of the Civil Administrative Code of Illinois [20 ILCS 605/605-332], the Department may provide financial assistance not to exceed the amount of State general obligation debt as certified by the Governor's Office of Management and  Budget, the amount of capital investment in the energy generation facility, or $100,000,000, whichever is less.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.70  Pre-Qualification Request (Repealed)

 

(Source:  Repealed at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.80  Form of Pre-Qualification Request (Repealed)

 

(Source:  Repealed at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.90  Pre-Qualification Evaluation Procedure (Repealed)

 

(Source:  Repealed at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.100  Application Request

 

a)         Potential applicants are encouraged to advise the Department of their intent to apply to the program prior to submitting a formal application.  The Department may request a written or oral description of the proposed project and other information regarding the likely economic and environmental impacts of the project.  The Department may, at its discretion, provide potential applicants with a preliminary assessment of their eligibility for the program provided that sufficient project information is presented by the applicant.   

 

b)         Grant applications should be submitted in accordance with the following guidelines:

 

1)         Application to the Coal Revival Program can be made only after the Illinois Environmental Protection Agency has issued a draft construction permit for the facility.

 

2)         Applicants may submit brochures and other presentations only as necessary to present a complete and effective application.

 

3)         The Department may require applications to be clarified or supplemented through additional written submissions or oral presentations.

 

4)         One original and 5 copies of each grant application shall be submitted to the Coal Revival Program Coordinator, Office of Coal Development, Illinois Department of Commerce and Economic Opportunity, 620 East Adams Street, Springfield IL 62701-1615.

 

5)         Applicants are discouraged from submitting confidential information since materials submitted in conjunction with an approved Coal Revival Program funding request are subject to disclosure, in response to requests received under provisions of the Freedom of Information Act [5 ILCS 140].  Information that could reasonably be considered to be proprietary, privileged or confidential commercial or financial information should be identified as such in the application.  The Department will maintain the confidentiality of that information only to the extent permitted by law.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.110  Form of Application

 

a)         Applications to the Coal Revival Program for grant funds may be submitted to the Department at any time.

 

b)         The grant application should include, but not be limited to, the following information:

 

1)         Grant Application Cover Page.  Form to be obtained from the Department's Office of Coal Development and completed by the applicant;

 

2)         Ownership Disclosure.  Identification by name of those businesses or entities with 10% or more ownership of the new electric generating facility, with the percent ownership for each set forth;

 

3)         Performance Disclosure.  As asserted against the applicant, or any parent organization or holding company of the applicant, identification of all pending or unresolved violations of State or federal laws or regulations that could result in legal or regulatory impact on the operation of the electric generating facility.  All State and federal permits required for the operation of the facility should be identified.  If the applicant does not have relevant or necessary operating permits, identification of the status of any permit applications and anticipated date of permit issuance;

 

4)         Executive Summary.  A brief and concise overview of the proposed electric generating facility;

 

5)         Facility Description.  A description of the proposed electric generating facility, including a description of the scope and nature of the proposed facility; a description of equipment, technologies and processes used; a description of the generation capacity, availability and dispatch; a location map showing project site and connections to existing transportation routes, transmission lines, and water supplies; a description of the facility inputs and outputs; and a description of all permits, rights and agreements necessary for plant construction and operation;

 

6)         Facility Benefits.  Economic justification for the facility that includes a summary of the social or economic benefits of the facility to Illinois; identification of those communities, businesses and other entities likely to benefit from the facility; identification of employment impacts such as  jobs created or retained by the facility itself and projected payrolls; the existing and/or new coal markets that would be affected by the project; and identification of potential impacts on local and State electric rates and reliability.  The discussion on facility employment impacts should include:

 

A)        current employment levels,

 

B)        projections of temporary jobs created (construction, project managers, etc.) that will be created during the project,

 

C)        full-time equivalent jobs to be created at the facility,

 

D)        full-time equivalent jobs retained as a direct result of completing the project, and

 

E)        Illinois coal mining jobs created as a result of new coal purchases for the facility;

 

7)         Facility Capital and O&M Costs.  Financial aspects of the facility, including capital cost, operation and maintenance costs, financing, debt service and retirement, and expected return on investment.  For purposes of this subsection (b)(7), operation and maintenance costs are defined as those variable costs attendant to the day to day operation and scheduled maintenance of the new electric generating facility; and

 

8)         State Sales Taxes.  A certification of the amount of Illinois coal used at the new electric generating facility and the State occupation and use taxes paid on Illinois-mined coal used at the facility for a minimum of four preceding calendar quarters, or the projected amount of Illinois coal to be used at the new electric generating facility and the State occupation and use taxes paid on Illinois-mined coal to be used at the facility.  Applicant must provide reasonable documentation of a long-term commitment to Illinois coal use at the facility through binding coal purchase agreements with suppliers, including documentation of coal supply contracts, detailing the terms and duration of each agreement.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.120  Application Evaluation Procedure

 

a)         All grant applications submitted will undergo a substantive evaluation in terms of the technical, economic, environmental and management components of the new electric generating facility by Department staff.  The criteria used in determining whether a grant will be awarded include, but are not limited to, the following:

 

1)         creation of at least 150 new Illinois coal mining jobs;

 

2)         creation of a new electric generating facility that has an aggregate rated generating capacity of at least 400 megawatts for all new units at one site and uses coal or gases derived from coal as its primary fuel source;

 

3)         commitment to provide baseload electric generation operating on a continuous basis throughout the year, including times of significant area load fluctuations and high demand;

 

4)         the total State occupation and use taxes paid on Illinois-mined coal used at the new electric generating facility for a minimum of 4 preceding calendar quarters, or the projected total State occupation and use taxes to be paid annually on Illinois-mined coal used at the new electric generating facility;

 

5)         the beginning and completion construction dates of the electric generating facility; and

 

6)         the amount of capital investment by the eligible business in the new electric generating facility.

 

b)         The Department may obtain the assistance of other persons either within or outside of State government in reviewing part or all of any application.  If the Department elects to obtain such assistance, the Department shall select persons that possess a higher degree of environmental, technical or engineering experience and understanding than readily found within the Department and shall use such persons to evaluate only when, in the opinion of the Department, to do so would promote a more thorough and fair understanding of the applicant's statements, plans and processes to be employed.

 

c)         The Department reserves the right to make on-site survey inspections during the review period when, in the opinion of the Department, to do so would promote a more thorough and fair understanding of the applicant's statements, plans and processes to be employed.

 

d)         In addition to compliance with any federal, State or local permitting requirements, funded projects will be subject to review by the following Illinois agencies:  Department of Natural Resources, Historic Preservation Agency, Department of Agriculture, and Illinois Environmental Protection Agency.  Grantees will be required to comply with requirements established by these agencies relative to their respective reviews.  Grantees will be responsible for coordinating directly with the applicable external agencies.  Any requirements communicated to the Department shall be incorporated into any grant agreement awarded  as of its execution date, or if received from the applicable agency subsequent to execution, as an addendum to the grant agreement.  Grantees will be contractually obligated to comply with these requirements.  Prior to notification of compliance by the applicable external agency, grantees may request disbursement of funds only for the following purposes:  administrative, contractual, legal, engineering or architectural/engineering costs incurred that are necessary to allow for compliance by the grantee with requirements established by the external agency.  Funds will not be disbursed for land acquisition or any activity that physically impacts the project site until the Department receives the appropriate sign-off from the applicable agencies.

 

e)         Upon completion of the review, the Department staff shall recommend applications meeting all criteria set forth in subsection (a).  Department staff will then forward all applications, together with its recommendations, to the Director for final determination.  During the final review process, the Director will determine whether an applicant is awarded a grant.  Applicants will be notified in writing as to whether the entity is eligible to receive financial assistance through the Coal Revival Program.  If an application is denied, the notification shall state the reasons for that determination.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.130  Grant Agreement

 

a)         When a grant has been awarded, the grantee and the Department shall execute an Agreement.  The Agreement shall be executed between the grantee and the Director or the Director's designee on behalf of the Department.

 

b)         The Agreement shall contain substantive provisions, including, but not limited to, the following:

 

1)         A recitation of legal authority pursuant to which the Agreement is made;

 

2)         An identification of the project scope and schedule, and the work or services to be performed or conducted by the grantee;

 

3)         An identification of the grant amount;

 

4)         The conditions and manner in which the Department shall pay the grant amount subject at all times to annual appropriation by the General Assembly;

 

5)         A promise by the grantee not to assign or transfer any of the rights, duties or obligations of the grantee without the written consent of the Department;

 

6)         A promise by the grantee not to amend the Agreement without the written consent of the Department.  Failure to do so will result in a cost disallowance.  The project must be completed by the completion date in the Agreement unless a written request for an extension is submitted no later than 30 days prior to the award completion date;

 

7)         A covenant that the grantee shall expend the grant amount and any accrued interest only for the purposes of the project as stated in the Agreement and approved by the Department;

 

8)         A covenant that the grantee shall refrain from entering into any written or oral agreement or understanding with any party that might be construed as an obligation of the State of Illinois or the Department for the payment of any funds under the Act; and

 

9)         A covenant that no grant funds will be disbursed until the eligible business has satisfactorily demonstrated to the Department that the revenue stream will be sufficient to service the debt on General Obligation Bonds issued in support of the project.

 

(Source:  Amended at 29 Ill. Reg. 1195, effective January 5, 2005)

 

Section 120.140  Severability

 

If any Section, subsection, subdivision, paragraph, sentence, clause or phrase in this Part or any portion thereof is for any reason held to be unconstitutional or invalid or ineffective by any forum of competent jurisdiction, that decision shall not affect the validity or effectiveness of the remaining portions of this Part.

 

Section 120.150  Administrative Requirements for Grants

 

a)         Termination of Grant − Grants shall be terminated for the following reasons:

 

1)         Termination Due to Loss of Funding − In the absence of State funding for a fiscal year, all grants for that year will be terminated in full.  In the event of a partial loss of State funding, the Department will make proportionate cuts to all grantees.  In the event the Department suffers such a loss of funding in full or part, the Department will give the grantee written notice setting forth the effective date of full or partial termination or, if a change in funding is required, setting forth the change in funding and changes in the approved budget.

 

2)         Termination for Cause

 

A)        If the Department determines that the grantee has failed to comply with the terms and conditions of the grant, the Department shall terminate the grant in whole, or in part, at any time before the date of completion.  Circumstances that will result in the termination of a grant include, but are not necessarily limited to, the following: consistent failure to submit required reports; failure to maintain required records; evidence of fraud and abuse; and consistent failure to meet performance standards.  These circumstances are explained in the Agreement.

 

B)        The Department shall notify the grantee in writing, within 10 working days after the determination to terminate, of the reasons for the termination and the effective date of the termination.  Payments made to the grantee or recoveries by the Department shall be made in accordance with legal rights and liabilities in the Agreement.

 

3)         Termination by Agreement − The Department and the grantee shall terminate the grant in whole or in part when the Department and the grantee agree that the continuation of the program objectives would not produce beneficial results commensurate with the future expenditure of funds.  The Department and the grantee shall agree upon termination conditions, including the effective date, and, in the case of partial termination, the portion to be terminated.  The grantee shall not incur new obligations for the terminated portion after the effective date, and shall cancel as many outstanding obligations as possible. The Department shall allow full credit to the grantee for the Department's share of the noncancelable obligations, properly incurred by the grantee prior to termination.

 

b)         Interest on Grant Funds − In accordance with Section 10 of the Illinois Grant Funds Recovery Act [30 ILCS 705/10], all interest earned on funds held by the grantee under the grant shall become part of the grant when earned, as long as this amount does not exceed the maximum allowable grant award.  Any interest earned under the grant, and not expended as grant principal during the term of the grant, shall be returned to the Department.

 

c)         Grant Close-out − In accordance with Section 4 of the Illinois Grant Funds Recovery Act [30 ILCS 705/4], all funds, including any interest, remaining at the end of the grant period or at the expiration of the period of time grant funds are available for expenditure or obligation by the Grantee, shall be returned to the Department within 45 days after the end of the relevant period. The grantee agrees to repay the Department for any funds that are determined by the Department to have been spent in violation of the Agreement.

 

d)         Audits − A grantee shall be responsible for securing a compliance audit for any grant award exceeding $300,000.  Additionally, an audit may be required when certain risk conditions exist, including, but not limited to, a negative compliance history and disclosure of previous material audit findings.  The audit shall be performed by an independent certified public accountant, licensed by authority of the State of Illinois pursuant to the Illinois Public Accounting Act [225 ILCS 450].  The audit shall be conducted in accordance with generally accepted auditing standards contained in the publication entitled AICPA Professional Standards, American Institute of Certified Public Accountants, Harborside Financial Center, 201 Plaza 3, Jersey City, New Jersey 07311 (June 2001, no later editions are incorporated).

 

e)         Special Audits − The Department reserves the right to conduct special audits, including but not limited to an agency-wide audit, at any time during normal working hours, of the funds expended under Department grants.

 

f)         Monitoring and Evaluation − Grantee shall permit any agent authorized by the Department, upon presentation of credentials, in accordance with the constitutional limitation on administrative searches, to have full access to, and the right to examine, any documents, papers, and records of the grantee involving transactions related to a grant from the Department.  Once the Department has concluded its monitoring activities, the grantee will be notified of the Department's findings.  If a determination of noncompliance has been made by the Department, the grantee will be allowed an opportunity to cure any and all noncompliance issues.  If any noncompliance issues cannot be resolved, the Department will issue a notice requesting that the grantee repay any funds that are determined by the Department to have been spent in violation of the Agreement.  If the grantee fails to comply with the Department's notice, the Department shall issue a final notice providing the grantee the opportunity to request an administrative hearing pursuant to the Department's Administrative Hearing Rules found at 56 Ill. Adm. Code 2605.

 

g)         Complaint Process − An administrative hearing is initiated by a party serving a Petition for Hearing on the Department, or by the Department serving a Notice of Charges on the grantee.  In either case, the Department and the grantee shall follow the Administrative Hearing Rules as set forth in 56 Ill. Adm. Code 2605.

 

h)         Certifications − The grantee shall certify that it has not been barred from contracting with a unit of State or local government as a result of a violation of 720 ILCS 5/33E-3 and 33E-4.

 

i)          Reports − Grantee shall submit, as required by the Department, reports on the financial status of the project and reports on outcomes and results of the project.