HB4150 94TH GENERAL ASSEMBLY

LRB094 14609 MKM 49559 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4150

Introduced 10/26/2005, by Rep. Kevin Joyce - Thomas Holbrook - William Davis

SYNOPSIS AS INTRODUCED:

35 ILCS 640/2-9
220 ILCS 5/8-403.1	from Ch. 111 2/3, par. 8-403.1

Amends the Electricity Excise Tax Law. Deletes provisions, applicable through June 30, 2004, requiring the Department of Revenue to pay certain amounts each month into the Public Utility Fund. Beginning on July 1, 2006 and through January 31, 2009, requires the Department to pay certain amounts each month into the Municipal Economic Development Fund. Amends the Public Utilities Act. Prohibits the Illinois Commerce Commission from requiring an electric utility to purchase electricity from any qualified solid waste energy facility (QSWEF) that is owned or operated by an entity that is the subject of a bankruptcy proceeding during the pendency of that proceeding. Provides that, as of the first date on which renewable energy certificates or other saleable representations are sold by a QSWEF, with or without the electricity generated by the facility, to an electric utility or to another electric supplier that is required under State law to comply with a renewable energy portfolio standard or required by order of the Illinois Commerce Commission to meet renewable energy portfolio standard requirement, the QSWEF may not sell electricity and shall be exempt from certain requirements concerning the sale of electricity, but shall remain obligated for certain reimbursements to the State. Provides that certain provisions concerning the sale of electricity by QSWEFs shall remain in full force and effect with respect to a QSWEF that sold electricity at any time before July 1, 2006 and that does not sell or transfer renewable energy certificates or other saleable representations in order to meet the requirements of a renewable energy portfolio standard. Provides that, beginning on July 1, 2006, the Illinois Commerce Commission shall not issue any order determining that a facility is a QSWEF unless it was determined by the Illinois Commerce Commission to be a QSWEF before July 1, 2006. Effective immediately.

A BILL FOR

AN ACT concerning utilities.

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

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

(35 ILCS 640/2-9)

Sec. 2-9. Return and payment of tax by delivering supplier.

Each delivering supplier who is required or authorized to collect the tax imposed by this Law shall make a return to the Department on or before the 15th day of each month for the preceding calendar month stating the following:

(1) The delivering supplier's name.

(2) The address of the delivering supplier's principal place of business and the address of the principal place of business (if that is a different address) from which the delivering supplier engaged in the business of delivering electricity in this State.

(3) The total number of kilowatt-hours which the supplier delivered to or for purchasers during the preceding calendar month and upon the basis of which the tax is imposed.

(4) Amount of tax, computed upon Item (3) at the rates stated in Section 2-4.

(5) An adjustment for uncollectible amounts of tax in respect of prior period kilowatt-hour deliveries, determined in accordance with rules and regulations promulgated by the Department.

(5.5) The amount of credits to which the taxpayer is entitled on account of purchases made under Section 8-403.1 of the Public Utilities Act.

(6) Such other information as the Department reasonably may require.

In making such return the delivering supplier may use any reasonable method to derive reportable "kilowatt-hours" from the delivering supplier's records.

If the average monthly tax liability to the Department of the delivering supplier does not exceed $2,500, the Department may authorize the delivering supplier's returns to be filed on a quarter-annual basis, with the return for January, February and March of a given year being due by April 30 of such year; with the return for April, May and June of a given year being due by July 31 of such year; with the return for July, August and September of a given year being due by October 31 of such year; and with the return for October, November and December of a given year being due by January 31 of the following year.

If the average monthly tax liability to the Department of the delivering supplier does not exceed $1,000, the Department may authorize the delivering supplier's returns to be filed on an annual basis, with the return for a given year being due by January 31 of the following year.

Such quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Law concerning the time within which a delivering supplier may file a return, any such delivering supplier who ceases to engage in a kind of business which makes the person responsible for filing returns under this Law shall file a final return under this Law with the Department not more than one month after discontinuing such business.

Each delivering supplier whose average monthly liability to the Department under this Law was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, and who is not operated by a unit of local government, shall make estimated payments to the Department on or before the 7th, 15th, 22nd and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such delivering supplier's actual tax liability for the month or 25% of such delivering supplier's actual tax liability for the same calendar month of the preceding year. The amount of such quarter-monthly payments shall be credited against the final tax liability of such delivering supplier's return for that month. An outstanding credit approved by the Department or a credit memorandum issued by the Department arising from such delivering supplier's overpayment of his or her final tax liability for any month may be applied to reduce the amount of any subsequent quarter-monthly payment or credited against the final tax liability of such delivering supplier's return for any subsequent month. If any quarter-monthly payment is not paid at the time or in the amount required by this Section, such delivering supplier shall be liable for penalty and interest on the difference between the minimum amount due as a payment and the amount of such payment actually and timely paid, except insofar as such delivering supplier has previously made payments for that month to the Department in excess of the minimum payments previously due.

If the Director finds that the information required for the making of an accurate return cannot reasonably be compiled by such delivering supplier within 15 days after the close of the calendar month for which a return is to be made, the Director may grant an extension of time for the filing of such return for a period not to exceed 31 calendar days. The granting of such an extension may be conditioned upon the deposit by such delivering supplier with the Department of an amount of money not exceeding the amount estimated by the Director to be due with the return so extended. All such deposits shall be credited against such delivering supplier's liabilities under this Law. If the deposit exceeds such delivering supplier's present and probable future liabilities under this Law, the Department shall issue to such delivering supplier a credit memorandum, which may be assigned by such delivering supplier to a similar person under this Law, in accordance with reasonable rules and regulations to be prescribed by the Department.

The delivering supplier making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Law.

Until October 1, 2002, a delivering supplier who has an average monthly tax liability of $10,000 or more shall make all payments required by rules of the Department by electronic funds transfer. The term "average monthly tax liability" shall be the sum of the delivering supplier's liabilities under this Law for the immediately preceding calendar year divided by 12. Beginning on October 1, 2002, a taxpayer who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law shall make all payments required by rules of the Department by electronic funds transfer. Any delivering supplier not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All delivering suppliers required to make payments by electronic funds transfer and any delivering suppliers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

Through June 30, 2004, each month the Department shall pay into the Public Utility Fund in the State treasury an amount determined by the Director to be equal to 3.0% of the funds received by the Department pursuant to this Section. Through June 30, 2004, the remainder of all moneys received by the Department under this Section shall be paid into the General Revenue Fund in the State treasury. Beginning on July 1, 2004, of the 3% of the funds received pursuant to this Section, each month the Department shall pay $416,667 into the General Revenue Fund and the balance shall be paid into the Public Utility Fund in the State treasury.

Beginning on July 1, 2006 and through January 31, 2009, each month the Department shall pay into the Municipal Economic Development Fund in the State treasury an amount equal to the difference, if any, between the total amount received by the Department under subsection (i) of Section 8-403.1 of the Public Utilities Act for the immediately preceding month and the total amount received by the Department under subsection (i) of Section 8-403.1 of the Public Utilities Act for the month in calendar year 2002 corresponding with the immediately preceding month. After making the payments required under this paragraph, the remainder of all moneys received by the Department under Section 8-403.1 of the Public Utilities Act shall be paid into the General Revenue Fund in the State treasury.

(Source: P.A. 92-492, eff. 1-1-02; 93-839, eff. 7-30-04.)

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

(220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)

Sec. 8-403.1. Electricity purchased from qualified solid waste energy facility; tax credit; distributions for economic development.

(a) It is hereby declared to be the policy of this State to encourage the development of alternate energy production facilities in order to conserve our energy resources and to provide for their most efficient use.

(b) For the purpose of this Section and Section 9-215.1, "qualified solid waste energy facility" means a facility determined by the Illinois Commerce Commission to qualify as such under the Local Solid Waste Disposal Act, to use methane gas generated from landfills as its primary fuel, and to possess characteristics that would enable it to qualify as a cogeneration or small power production facility under federal law.

(c) In furtherance of the policy declared in this Section, the Illinois Commerce Commission shall require electric utilities to enter into long-term contracts to purchase electricity from qualified solid waste energy facilities located in the electric utility's service area, for a period beginning on the date that the facility begins generating electricity and having a duration of not less than 10 years in the case of facilities fueled by landfill-generated methane, or 20 years in the case of facilities fueled by methane generated from a landfill owned by a forest preserve district. The purchase rate contained in such contracts shall be equal to the average amount per kilowatt-hour paid from time to time by the unit or units of local government in which the electricity generating facilities are located, excluding amounts paid for street lighting and pumping service.

(d) Whenever a public utility is required to purchase electricity pursuant to subsection (c) above, it shall be entitled to credits in respect of its obligations to remit to the State taxes it has collected under the Electricity Excise Tax Law equal to the amounts, if any, by which payments for such electricity exceed (i) the then current rate at which the utility must purchase the output of qualified facilities pursuant to the federal Public Utility Regulatory Policies Act of 1978, less (ii) any costs, expenses, losses, damages or other amounts incurred by the utility, or for which it becomes liable, arising out of its failure to obtain such electricity from such other sources. The amount of any such credit shall, in the first instance, be determined by the utility, which shall make a monthly report of such credits to the Illinois Commerce Commission and, on its monthly tax return, to the Illinois Department of Revenue. Under no circumstances shall a utility be required to purchase electricity from a qualified solid waste energy facility at the rate prescribed in subsection (c) of this Section if such purchase would result in estimated tax credits that exceed, on a monthly basis, the utility's estimated obligation to remit to the State taxes it has collected under the Electricity Excise Tax Law. The owner or operator shall negotiate facility operating conditions with the purchasing utility in accordance with that utility's posted standard terms and conditions for small power producers. If the Department of Revenue disputes the amount of any such credit, such dispute shall be decided by the Illinois Commerce Commission. Whenever a qualified solid waste energy facility has paid or otherwise satisfied in full the capital costs or indebtedness incurred in developing and implementing the qualified facility, the qualified facility shall reimburse the Public Utility Fund and the General Revenue Fund in the State treasury for the actual reduction in payments to those Funds caused by this subsection (d) in a manner to be determined by the Illinois Commerce Commission and based on the manner in which revenues for those Funds were reduced.

(e) The Illinois Commerce Commission shall not require an electric utility to purchase electricity from any qualified solid waste energy facility which is owned or operated by: (i) an entity that is primarily engaged in the business of producing or selling electricity, gas, or useful thermal energy from a source other than one or more qualified solid waste energy facilities or (ii) an entity that is the subject of a bankruptcy proceeding, during the pendency of that proceeding, including any qualified solid waste energy facility that is the subject of a bankruptcy proceeding on the effective date of this amendatory Act of the 94th General Assembly.

(f) This Section does not require an electric utility to construct additional facilities unless those facilities are paid for by the owner or operator of the affected qualified solid waste energy facility.

(g) The Illinois Commerce Commission shall require that: (1) electric utilities use the electricity purchased from a qualified solid waste energy facility to displace electricity generated from nuclear power or coal mined and purchased outside the boundaries of the State of Illinois before displacing electricity generated from coal mined and purchased within the State of Illinois, to the extent possible, and (2) electric utilities report annually to the Commission on the extent of such displacements.

(h) Nothing in this Section is intended to cause an electric utility that is required to purchase power hereunder to incur any economic loss as a result of its purchase. All amounts paid for power which a utility is required to purchase pursuant to subparagraph (c) shall be deemed to be costs prudently incurred for purposes of computing charges under rates authorized by Section 9-220 of this Act. Tax credits provided for herein shall be reflected in charges made pursuant to rates so authorized to the extent such credits are based upon a cost which is also reflected in such charges.

(i) Beginning in February 1999 and through January 2009, each qualified solid waste energy facility that sells electricity to an electric utility at the purchase rate described in subsection (c) shall file with the Department of Revenue on or before the 15th of each month a form, prescribed by the Department of Revenue, that states the number of kilowatt hours of electricity for which payment was received at that purchase rate from electric utilities in Illinois during the immediately preceding month. This form shall be accompanied by a payment from the qualified solid waste energy facility in an amount equal to six-tenths of a mill ($0.0006) per kilowatt hour of electricity stated on the form. Beginning on the effective date of this amendatory Act of the 92nd General Assembly, a qualified solid waste energy facility must file the form required under this subsection (i) before the 15th of each month regardless of whether the facility received any payment in the previous month. Payments received by the Department of Revenue shall be deposited into the Municipal Economic Development Fund, a trust fund created outside the State treasury. The State Treasurer may invest the moneys in the Fund in any investment authorized by the Public Funds Investment Act, and investment income shall be deposited into and become part of the Fund. Moneys in the Fund shall be used by the State Treasurer as provided in subsection (j). The obligation of a qualified solid waste energy facility to make payments into the Municipal Economic Development Fund shall terminate upon either: (1) expiration or termination of a facility's contract to sell electricity to an electric utility at the purchase rate described in subsection (c); or (2) entry of an enforceable, final, and non-appealable order by a court of competent jurisdiction that Public Act 89-448 is invalid. Payments by a qualified solid waste energy facility into the Municipal Economic Development Fund do not relieve the qualified solid waste energy facility of its obligation to reimburse the Public Utility Fund and the General Revenue Fund for the actual reduction in payments to those Funds as a result of credits received by electric utilities under subsection (d).

A qualified solid waste energy facility that fails to timely file the requisite form and payment as required by this subsection (i) shall be subject to penalties and interest in conformance with the provisions of the Illinois Uniform Penalty and Interest Act.

Every qualified solid waste energy facility subject to the provisions of this subsection (i) shall keep and maintain records and books of its sales pursuant to subsection (c), including payments received from those sales and the corresponding tax payments made in accordance with this subsection (i), and for purposes of enforcement of this subsection (i) all such books and records shall be subject to inspection by the Department of Revenue or its duly authorized agents or employees.

When a qualified solid waste energy facility fails to file the form or make the payment required under this subsection (i), the Department of Revenue, to the extent that it is practical, may enforce the payment obligation in a manner consistent with Section 5 of the Retailers' Occupation Tax Act, and if necessary may impose and enforce a tax lien in a manner consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f, 5g, and 5i of the Retailers' Occupation Tax Act. No tax lien may be imposed or enforced, however, unless a qualified solid waste energy facility fails to make the payment required under this subsection (i). Only to the extent necessary and for the purpose of enforcing this subsection (i), the Department of Revenue may secure necessary information from a qualified solid waste energy facility in a manner consistent with Section 10 of the Retailers' Occupation Tax Act.

All information received by the Department of Revenue in its administration and enforcement of this subsection (i) shall be confidential in a manner consistent with Section 11 of the Retailers' Occupation Tax Act. The Department of Revenue may adopt rules to implement the provisions of this subsection (i).

For purposes of implementing the maximum aggregate distribution provisions in subsections (j) and (k), when a qualified solid waste energy facility makes a late payment to the Department of Revenue for deposit into the Municipal Economic Development Fund, that payment and deposit shall be attributed to the month and corresponding quarter in which the payment should have been made, and the Treasurer shall make retroactive distributions or refunds, as the case may be, whenever such late payments so require.

(j) The State Treasurer, without appropriation, must make distributions immediately after January 15, April 15, July 15, and October 15 of each year, up to maximum aggregate distributions of $500,000 for the distributions made in the 4 quarters beginning with the April distribution and ending with the January distribution, from the Municipal Economic Development Fund to each city, village, or incorporated town that has within its boundaries an incinerator that: (1) uses or, on the effective date of Public Act 90-813, used municipal waste as its primary fuel to generate electricity; (2) was determined by the Illinois Commerce Commission to qualify as a qualified solid waste energy facility prior to the effective date of Public Act 89-448; and (3) commenced operation prior to January 1, 1998. Total distributions in the aggregate to all qualified cities, villages, and incorporated towns in the 4 quarters beginning with the April distribution and ending with the January distribution shall not exceed $500,000. The amount of each distribution shall be determined pro rata based on the population of the city, village, or incorporated town compared to the total population of all cities, villages, and incorporated towns eligible to receive a distribution. Distributions received by a city, village, or incorporated town must be held in a separate account and may be used only to promote and enhance industrial, commercial, residential, service, transportation, and recreational activities and facilities within its boundaries, thereby enhancing the employment opportunities, public health and general welfare, and economic development within the community, including administrative expenditures exclusively to further these activities. These funds, however, shall not be used by the city, village, or incorporated town, directly or indirectly, to purchase, lease, operate, or in any way subsidize the operation of any incinerator, and these funds shall not be paid, directly or indirectly, by the city, village, or incorporated town to the owner, operator, lessee, shareholder, or bondholder of any incinerator. Moreover, these funds shall not be used to pay attorneys fees in any litigation relating to the validity of Public Act 89-448. Nothing in this Section prevents a city, village, or incorporated town from using other corporate funds for any legitimate purpose. For purposes of this subsection, the term "municipal waste" has the meaning ascribed to it in Section 3.290 of the Environmental Protection Act.

(k) If maximum aggregate distributions of $500,000 under subsection (j) have been made after the January distribution from the Municipal Economic Development Fund, then the balance in the Fund shall be refunded to the qualified solid waste energy facilities that made payments that were deposited into the Fund during the previous 12-month period. The refunds shall be prorated based upon the facility's payments in relation to total payments for that 12-month period.

(l) Beginning January 1, 2000, and each January 1 thereafter, each city, village, or incorporated town that received distributions from the Municipal Economic Development Fund, continued to hold any of those distributions, or made expenditures from those distributions during the immediately preceding year shall submit to a financial and compliance and program audit of those distributions performed by the Auditor General at no cost to the city, village, or incorporated town that received the distributions. The audit should be completed by June 30 or as soon thereafter as possible. The audit shall be submitted to the State Treasurer and those officers enumerated in Section 3-14 of the Illinois State Auditing Act. If the Auditor General finds that distributions have been expended in violation of this Section, the Auditor General shall refer the matter to the Attorney General. The Attorney General may recover, in a civil action, 3 times the amount of any distributions illegally expended. For purposes of this subsection, the terms "financial audit," "compliance audit", and "program audit" have the meanings ascribed to them in Sections 1-13 and 1-15 of the Illinois State Auditing Act.

(m) On and after the effective date of this amendatory Act of the 94th General Assembly, as of the first date on which renewable energy certificates or other saleable representations are sold or transferred by a qualified solid waste energy facility, with or without the electricity generated by the facility, to an electric utility or to another electric supplier that is required under State law to comply with a renewable energy portfolio standard or that is required by order of the Illinois Commerce Commission to meet a renewable energy portfolio standard requirement, that qualified solid waste energy facility may not sell electricity pursuant to this Section and shall be exempt from the requirements of subsections (a) through (l) of this Section, except that it shall remain obligated for any reimbursements required under subsection (d) of this Section. All of the provisions of this Section shall remain in full force and effect with respect to any qualified solid waste energy facility that sold electric energy pursuant to this Section at any time before July 1, 2006 and that does not sell or transfer renewable energy certificates or other saleable representations to meet the requirements of a renewable energy portfolio standard.

(n) Notwithstanding any other provision of law to the contrary, beginning on July 1, 2006, the Illinois Commerce Commission shall not issue any order determining that a facility is a qualified solid waste energy facility unless the qualified solid waste energy facility was determined by the Illinois Commerce Commission to be a qualified solid waste energy facility before July 1, 2006.

(Source: P.A. 91-901, eff. 1-1-01; 92-435, eff. 8-17-01; 92-574, eff. 6-26-02.)

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