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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Property Tax Code is amended by adding | ||||||||||||||||||||||||||||||||||||||||||
5 | Division 5 to Article 11 as follows: | ||||||||||||||||||||||||||||||||||||||||||
6 | (35 ILCS 200/Art. 11 Div. 5 heading new) | ||||||||||||||||||||||||||||||||||||||||||
7 | DIVISION 5. WIND ENERGY PRODUCTION | ||||||||||||||||||||||||||||||||||||||||||
8 | (35 ILCS 200/11-180 new) | ||||||||||||||||||||||||||||||||||||||||||
9 | Sec. 11-180. Legislative findings. The General Assembly | ||||||||||||||||||||||||||||||||||||||||||
10 | finds and declares that: | ||||||||||||||||||||||||||||||||||||||||||
11 | (1) it is desirable to develop both renewable and | ||||||||||||||||||||||||||||||||||||||||||
12 | alternative energy resources to obtain environmental | ||||||||||||||||||||||||||||||||||||||||||
13 | quality and public health benefit;
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14 | (2) the benefits of electricity from renewable and | ||||||||||||||||||||||||||||||||||||||||||
15 | alternative energy resources accrue to the public at large, | ||||||||||||||||||||||||||||||||||||||||||
16 | thus consumers and electric utilities and alternative | ||||||||||||||||||||||||||||||||||||||||||
17 | retail electric suppliers share an interest in developing | ||||||||||||||||||||||||||||||||||||||||||
18 | and using a significant level of these environmentally | ||||||||||||||||||||||||||||||||||||||||||
19 | preferable resources in the State's electricity supply | ||||||||||||||||||||||||||||||||||||||||||
20 | portfolio;
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21 | (3) encouraging energy efficiency will improve the | ||||||||||||||||||||||||||||||||||||||||||
22 | environmental quality and public health in the State of |
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1 | Illinois;
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2 | (4) wind energy is one alternative energy source that | ||||||
3 | can be used to provide electricity to utility consumers;
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4 | (5) some regions in the State are ideal locations for | ||||||
5 | wind energy system development;
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6 | (6) a consistent property valuation method must be used | ||||||
7 | statewide to ensure uniform, equitable assessments and to | ||||||
8 | create an equal distribution of the tax burden among | ||||||
9 | taxpayers, especially in taxing districts located in more | ||||||
10 | than one county; and | ||||||
11 | (7) the cost or market valuation methods for wind | ||||||
12 | energy systems result in valuations that are neither | ||||||
13 | uniform nor just and equal because of wide variations in | ||||||
14 | the production of energy from wind turbines, which are a | ||||||
15 | result of the uncertainty of the availability of wind for | ||||||
16 | energy production.
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17 | (35 ILCS 200/11-185 new) | ||||||
18 | Sec. 11-185. Definitions. For purposes of this Division 5: | ||||||
19 | "Wind energy conversion device" means any device | ||||||
20 | including, but not limited to, a wind charger, windmill, or | ||||||
21 | wind turbine that converts wind energy to a form of usable | ||||||
22 | energy. | ||||||
23 | "Wind energy conversion system" is all wind energy | ||||||
24 | conversion devices owned by a person who has executed a lease, | ||||||
25 | contract, or other written agreement or who has purchased or |
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1 | acquired property so that one or more wind energy conversion | ||||||
2 | devices can be erected, built, or otherwise installed on that | ||||||
3 | property. These devices do not need to be on contiguous parcels | ||||||
4 | of property to be considered a part of a total wind energy | ||||||
5 | conversion system.
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6 | (35 ILCS 200/11-190 new)
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7 | Sec. 11-190. Applicability. The provisions of this | ||||||
8 | Division 5 do not apply to wind energy conversion systems that | ||||||
9 | are owned by an individual strictly for personal use or to any | ||||||
10 | person that is otherwise exempt from taxation under the | ||||||
11 | Property Tax Code. For the purposes of this Section, "personal | ||||||
12 | use" means the use of any wind energy conversion system with a | ||||||
13 | nameplate capacity of less than 2 megawatts. | ||||||
14 | (35 ILCS 200/11-195 new) | ||||||
15 | Sec. 11-195. Platting requirements. Upon the completion of | ||||||
16 | construction, the owner of a wind energy conversion system, at | ||||||
17 | his or her own expense, shall cause the wind turbine facilities | ||||||
18 | to be platted by an Illinois registered land surveyor. The plat | ||||||
19 | must include access routes, together with a metes and bounds | ||||||
20 | description of the area surrounding each wind turbine. The | ||||||
21 | system owner must record the plat and deliver a copy of it to | ||||||
22 | the property owner and to the chief county assessment officer | ||||||
23 | within 60 days after the completion of the construction. Upon | ||||||
24 | receiving a copy of the plat, the chief county assessment |
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1 | officer must issue a separate parcel identification number or | ||||||
2 | numbers for the wind energy conversion system to apportion the | ||||||
3 | value to each taxing district in which the system is physically | ||||||
4 | located. | ||||||
5 | (35 ILCS 200/11-200 new) | ||||||
6 | Sec. 11-200. Wind energy conversion system size and | ||||||
7 | capacity. The Department must determine the total size of the | ||||||
8 | device. Unless the systems are interconnected with different | ||||||
9 | distribution systems, the nameplate capacity of one wind energy | ||||||
10 | conversion device must be combined with the nameplate capacity | ||||||
11 | of any other wind energy conversion device that is under common | ||||||
12 | ownership. In the case of a dispute, the Department must draw | ||||||
13 | all reasonable inferences in favor of combining the devices | ||||||
14 | into one system. In making a determination, the Department may | ||||||
15 | decide that 2 wind energy conversion devices or systems are | ||||||
16 | under common ownership when the underlying ownership structure | ||||||
17 | contains similar persons or entities, even if the ownership | ||||||
18 | shares differ. Wind energy conversion devices or systems are | ||||||
19 | not under common ownership solely because the same person or | ||||||
20 | entity provided equity financing for the systems. | ||||||
21 | (35 ILCS 200/11-203 new)
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22 | Sec. 11-203. Certification of electricity generated. For | ||||||
23 | each wind energy conversion system the Department, on or before | ||||||
24 | May 1 of each year, must certify to each chief county |
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1 | assessment officer for any county in which the system is | ||||||
2 | located the amount of kilowatt-hours of electricity generated | ||||||
3 | per turbine in the prior calendar year and the value of the | ||||||
4 | system per kilowatt-hour, as calculated under Section 11-210. | ||||||
5 | (35 ILCS 200/11-205 new) | ||||||
6 | Sec. 11-205. Method of valuation for wind energy conversion | ||||||
7 | systems. | ||||||
8 | (a) It is the policy of this State that, beginning on and | ||||||
9 | after January 1, 2007, a wind energy conversion system that is | ||||||
10 | used as an electric power source must be valued on the per | ||||||
11 | kilowatt-hour of electricity produced each calendar year. If, | ||||||
12 | however, a wind energy conversion system ceases to operate for | ||||||
13 | any reason, the minimum assessed value of the system is 10% of | ||||||
14 | the cost of replacing the system with a new wind energy | ||||||
15 | conversion system.
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16 | (b) On or before February 1 of each year, the owner of a | ||||||
17 | wind energy conversion system shall file a report with the | ||||||
18 | Department setting forth, for each system: | ||||||
19 | (1) the nameplate capacity; | ||||||
20 | (2) the total kilowatt-hours of electricity produced | ||||||
21 | per turbine during the previous calendar year; | ||||||
22 | (3) the amount of any federal income tax credit awarded | ||||||
23 | for electricity produced in the previous calendar year | ||||||
24 | under Section 45 of the Internal Revenue Code of 1986 for | ||||||
25 | electricity produced by the system; and |
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1 | (4) any other information that is deemed necessary by | ||||||
2 | the Department to enable it to comply with its | ||||||
3 | responsibilities under this Section. | ||||||
4 | The report under this subsection (b) must also include a | ||||||
5 | copy of any wind energy system's current power purchase | ||||||
6 | agreement with the purchaser of power that is generated at the | ||||||
7 | system. The Department must treat each such agreement as | ||||||
8 | confidential and proprietary information.
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9 | The Department must prescribe the form of the report. If an | ||||||
10 | owner of a wind energy conversion system subject to taxation | ||||||
11 | under this Division 5 does not file the report by the due date, | ||||||
12 | then the Department must determine the kilowatt-hours of | ||||||
13 | electricity produced based on the full nameplate capacity | ||||||
14 | certified by the Department.
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15 | (35 ILCS 200/11-210 new) | ||||||
16 | Sec. 11-210. Valuation. | ||||||
17 | (a) The Department shall value a wind energy conversion | ||||||
18 | system by using an income-capitalization approach. To | ||||||
19 | determine the fair-cash value of the system, the net operating | ||||||
20 | income is divided by the wind-energy capitalization rate. | ||||||
21 | (b) For the purposes of this Section: | ||||||
22 | "Net operating income" means an amount equal to | ||||||
23 | (1) the prevailing power purchase agreement rate per | ||||||
24 | kilowatt-hour multiplied by the number of kilowatt-hours | ||||||
25 | of electricity generated by the system in the previous |
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1 | calendar year; plus | ||||||
2 | (2) the amount of any federal income tax credit awarded | ||||||
3 | for electricity produced in the previous calendar year | ||||||
4 | under Section 45 of the Internal Revenue Code of 1986 for | ||||||
5 | electricity produced by the system; less | ||||||
6 | (3) the prevailing annual wind-energy expense per | ||||||
7 | kilowatt-hour multiplied by the number of kilowatt-hours | ||||||
8 | of electricity generated by the system in the previous | ||||||
9 | calendar year. | ||||||
10 | "Prevailing power purchase agreement rate per | ||||||
11 | kilowatt-hour" means the average power purchase agreement rate | ||||||
12 | for all of the wind energy conversion systems in the State | ||||||
13 | during the previous calendar year divided by the number of | ||||||
14 | kilowatt-hours of electricity generated by all of the wind | ||||||
15 | energy conversion systems in the State in the previous calendar | ||||||
16 | year.
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17 | "Prevailing wind-energy expense per kilowatt-hour" means | ||||||
18 | the average amount of expenses incurred from the operation of | ||||||
19 | all of the wind energy conversion systems in the State during | ||||||
20 | the previous calendar year divided by the number of | ||||||
21 | kilowatt-hours of electricity generated by all of the wind | ||||||
22 | energy conversion systems in the State in the previous calendar | ||||||
23 | year.
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24 | "Wind-energy capitalization rate" means a rate equal to the | ||||||
25 | sum of: (i) the capitalization rate for nondepreciating assets | ||||||
26 | that is used by the Department in farmland evaluation; (ii) the |
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1 | recapture rate, which is one divided by the typical life | ||||||
2 | expectancy of the system; and (iii) the average effective tax | ||||||
3 | rate in the State.
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4 | (c) The annual kilowatt-hours of electricity for the first | ||||||
5 | assessment year is determined by multiplying: (i) the nameplate | ||||||
6 | capacity per kilowatt-hour; (ii) the industry standard rate of | ||||||
7 | efficiency; and (iii) 8,760, which is the number of hours in | ||||||
8 | 365 days. | ||||||
9 | (35 ILCS 200/11-215 new) | ||||||
10 | Sec. 11-215. Assessments of wind energy conversion | ||||||
11 | systems. | ||||||
12 | (a) A wind energy conversion system must be assessed at 33 | ||||||
13 | 1/3% of the fair cash value determined under Section 11-210. | ||||||
14 | The chief county assessment officer shall apportion the value | ||||||
15 | to each wind energy conversion parcel in which the wind energy | ||||||
16 | system is physically located. | ||||||
17 | (b) A wind energy conversion system is not subject to | ||||||
18 | equalization by the Department, the county, or the board of | ||||||
19 | review.
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20 | Section 99. Effective date. This Act takes effect upon | ||||||
21 | becoming law.
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