SB1400sam002 95TH GENERAL ASSEMBLY

Sen. Mike Jacobs

Filed: 3/21/2007

09500SB1400sam002 LRB095 11080 BDD 34270 a

AMENDMENT TO SENATE BILL 1400

AMENDMENT NO. ______. Amend Senate Bill 1400, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Wind Energy Indemnity Fund Act.

Section 5. Definitions.As used in this Act: "Abandonment" means (a) in the case of a landowner: (i) failure by the wind energy company to operate a wind turbine or wind turbines for the purpose for which they were designed and installed, for a period of 12 consecutive months, and (ii) failure to pay the landowner moneys owed to him or her in accordance with the underlying agreement, for a period of 6 consecutive months; (b) in the case of a county board: (i) failure by the wind energy company to operate a wind turbine or wind turbines for the purposes for which they were designed and installed, for a period of 12 consecutive months, and (ii) failure to adhere to any or all of the restrictions and conditions that were part of the approval process of the appropriate county authority for the granting of the special use permit, conditional use permit, zoning change, or zoning or permitting ordinance of any kind given in order to allow the installation and operation of the wind turbine or wind turbines.

"Board" means the governing body of the Wind Energy Indemnity Fund Corporation.

"Claimant" means either a landowner or a county board seeking to have a deconstruction paid for from the Fund and carried out by the Department.

"Corporation" means the Wind Energy Indemnity Fund Corporation, as established in this Act.

"County board" has the meaning set forth in Section 1.07 of the Statute on Statutes.

"Deconstruction" means removal of all property comprising a wind energy generation facility from the property of a landowner and restoration of the property to the condition in which it existed immediately prior to the construction of the facility, including, but not limited to, soil type and topography; provided, however, that foundations, pads, electrical lines, and any other underground facilities must be removed to a depth of 4 feet below the surface of the ground.

"Department" means the Department of Agriculture.

"Director", unless otherwise provided, means the Director of Agriculture, or the Director's designee.

"Fund" means the Wind Energy Indemnity Fund.

"Landowner" means any person with an ownership interest in property subject to an underlying agreement.

"Person" means any individual or entity, including, but not limited to, a sole proprietorship, a partnership, a corporation, a cooperative, an association, a limited liability company, an estate, a trust, or a governmental agency.

"Underlying agreement" means a written arrangement with a landowner, including, but not limited to, an easement, under the terms of which a person constructs or intends to construct a wind energy generation facility on the property of the landowner.

"Wind energy generation facility" means all property of any nature whatsoever comprising an operation designed to harness wind energy and create electricity therefrom, including, but not limited to, turbines, towers, roadways, concrete foundations, transmission lines, and poles, all situated on, under, or over the property of a landowner.

"Wind energy indemnity trust account" means a trust account established by the Director that is used for the receipt and disbursement of moneys paid from the Fund.

"Wind turbine" means each tower, blade, and propeller housing designed for wind energy generation.

Section 10. Powers and duties of the Director. The Director has all powers necessary and proper to fully and effectively execute the provisions of this Act and has the general duty to implement this Act. The Director's powers and duties include, but are not limited to, the following:

1. The Director shall personally serve as president of the Corporation.

2. The Director may take any action that may be reasonable or appropriate to enforce this Act and its rules.

Section 15. Administrative procedure. The Illinois Administrative Procedure Act applies to this Act.

Section 20. Administrative review and venue. Final administrative decisions of the Department are subject to judicial review under Article III of the Code of Civil Procedure and its rules. The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure. An action to review a final administrative decision under this Act may be commenced in the circuit court of any county in which any part of the transaction occurred that gave rise to the claim that was the subject of the proceedings before the Department.

Section 25. Rules. The Department may promulgate rules that are necessary for the implementation and administration of this Act.

Section 30. Fund assessments. There is an assessment of $10,000 for each wind turbine constructed or under construction as of the effective date of this Act and for each turbine constructed thereafter, under the provisions of an underlying agreement. The assessment is an obligation of the owner of each wind turbine and is payable in one initial payment of $5,000 and $5,000 in equal annual installments of $250 over a period of 20 years; provided, however, that the subsequent annual installments must be adjusted based on inflation, as reflected in the Consumer Price Index, on an annual basis. The initial payment is payable within 90 days after the effective date of this Act for wind turbines already constructed or under construction, and, in all other cases, prior to the commencement of construction.

All installments under this Section must be sent to the Department and made payable to the Corporation.

It is the responsibility of all parties to an underlying agreement to report the existence and specific provisions of the underlying agreement to the Department.

The Department shall mail all assessment notices to owners of wind energy generation facilities at least 30 days before the assessment installment is due.

All wind turbines already constructed, under construction, or issued a building permit before the effective date of this Act are to provide proof to the county of payment to the Fund within 95 days of the effective date of this Act. If such proof of payment is not provided, then the county must order the wind energy company to stop all operation and construction activities until the county receives proof of payment to the Fund. For all other wind turbines, no county may issue a building permit without being provided proof that the above assessment has been paid to the Fund.

Section 35. Abandonment. Upon an administrative finding in a hearing held by the Department that a deconstruction has been validly determined and ordered by either a court of competent jurisdiction or an arbitrator in binding arbitration, and deconstruction, after a period of at least 8 months, has not been completed satisfactorily, the Director has all the powers for the benefit of claimants as established under this Act, including, but not limited to, the power to do the following:

1. request the transfer of moneys from the Fund to the Trust Account for the purpose of paying the cost of deconstruction in accordance with this Act;

2. disburse the funds in the Trust Account for the deconstruction in accordance with this Act;

3. cause the sale of the deconstructed assets;

4. retain from the sale of the deconstructed assets moneys adequate to cover the costs to the Department of the deconstruction, and pay those amounts to the Fund;

5. return all moneys over and above the costs to the Department for the deconstruction to the owner or owners of the deconstructed assets, or to the holders of valid liens on those assets.

Section 40. Statutory lien. The Department has a lien prior and paramount to all other liens of any sort on the assets of the wind energy system to the extent of the costs incurred by the Department to accomplish the deconstruction of the abandoned wind energy system, which arises and attach upon construction of said wind energy system; provided, however, that the lien herein granted to the Department is not prior and paramount to the statutory lien in favor of real property taxes.

Section 45. Claims.

(a) A claimant shall file a complaint, on forms supplied by the Department, that contains at least the following:

(1) the name and address of the claimant;

(2) the name and address of the owner of the wind energy generation facility in question;

(3) the location of the wind energy generation facility in question;

(4) a copy of either a court decision, or the finding of an arbitrator in a binding arbitration proceeding, that indicates a finding of abandonment of the wind energy generation facility in question; a determination that the underlying agreement is null, void, and of no further force and effect; and an order for deconstruction of same. The court order or arbitration decision must have been rendered at least 8 months previously, and the time for all appeals and related proceedings must have lapsed.

(5) evidence showing that the deconstruction ordered by a court, or by an arbitrator in a proceeding for binding arbitration, has not been carried to a satisfactory conclusion, as defined in this Act; and

(6) a request that the funds necessary to perform the deconstruction be paid to the Department from the Fund and that the Department carry out the deconstruction in accordance with the order of the court or the arbitrator and in accordance with the definition of deconstruction as contained in this Act.

(b) A hearing shall be held by the Department and a decision rendered as to the validity of the claimant's complaint. In the event of a finding that the complaint is valid, then, within 90 days after the date, the Department shall obtain at least 2 bids from contractors to carry out the specific deconstruction. One bidder must be chosen by the Department within the following 60 days, and the Department, within 60 days thereafter, shall enter into a written agreement with the successful bidder for the deconstruction, which must be accomplished within 6 months thereafter.

(c) It is the responsibility of the Department to monitor the progress of the deconstruction and provide the necessary supervisory oversight to ensure that it is accomplished in accordance with the deconstruction agreement and the provisions of this Act.

Section 50. Illinois Wind Energy Indemnity Fund Corporation; creation; powers.

(a) There is hereby created the Illinois Wind Energy Indemnity Fund Corporation, a political subdivision, body politic, and public corporation. The governing powers of the Corporation are vested in the Board of Directors composed of the Director, who shall personally serve as President; the Attorney General or his or her designee, who shall serve as Secretary; the State Treasurer or his or her designee, who shall serve as Treasurer; and the Chairman of the Illinois Commerce Commission, or his or her designee. Three members of the Board constitute a quorum at any meeting of the Board, and the affirmative vote of 3 members is necessary for any action taken by the Board at a meeting, except that a lesser number may adjourn a meeting from time to time. A vacancy in the membership of the Board does not impair the right of a quorum to exercise all the rights and perform all the duties of the Board and Corporation.

(b) The Corporation has the following powers, together with all powers incidental or necessary to the discharge of those powers in corporate form:

(1) To have perpetual succession by its corporate name as a corporate body.

(2) To adopt, alter, and repeal by-laws, not inconsistent with the provisions of this Act, for the regulation and conduct of its affairs and business.

(3) To adopt and make use of a corporate seal and to alter the seal at pleasure.

(4) To avail itself of the use of information, services, facilities, and employees of the State of Illinois in carrying out the provisions of this Act.

(5) To receive funds assessed by the Department under this Act.

(6) To administer the Fund by investing funds of the Corporation that the Board may determine are not presently needed for its corporate purposes.

(7) Upon the request of the Director, to make payment from the Fund to the Trust Account when payment is necessary to pay costs of deconstruction in accordance with the provisions of this Act.

(8) To authorize, receive, and disburse funds by electronic means.

(9) To have those powers that are necessary or appropriate for the exercise of the powers specifically conferred upon the Corporation and all incidental powers that are customary in corporations.

(c) All assessments by the Department must be held by the Corporation in the Fund.

(d) Subject to applicable law, the assets of the Fund may be invested and reinvested at the discretion of the Corporation, and the income from these investments must be deposited into the Fund and must be available for the same purposes as all other assets of the Fund.

(e) The assets of the Fund may not be available for any purposes other than the payment of deconstruction costs under this Act and the payment of refunds of amounts that the Board determines have been inappropriately paid into the Fund, and may not be transferred to any other fund, other than the Trust Account when necessary to pay deconstruction costs under this Act or to pay refunds authorized by the Board.

Section 55. No waiver. The provisions of this Act, including the definitions, may not be altered, varied, or revised by agreement.

Section 900. The Illinois Resource Development and Energy Security Act is amended by adding Section 21 as follows:

(20 ILCS 688/21 new)

Sec. 21. Legislative findings. The General Assembly finds and declares that:

(1) a wind energy Act that provides for a renewable portfolio standard, a consistent property valuation method, a restoration indemnity fund, and mechanic's lien clarification will provide a favorable environmental and economic climate for development of wind energy;

(2) it is desirable to develop both renewable and alternative energy resources to obtain environmental quality and public health benefit;

(3) the benefits of electricity from renewable and alternative energy resources accrue to the public at large, thus consumers and electric utilities and alternative retail electric suppliers share an interest in developing and using a significant level of these environmentally preferable resources in the State's electricity supply portfolio and stability of taxes for extended periods of time;

(4) encouraging energy efficiency will improve the environmental quality and public health in the State of Illinois;

(5) wind energy is one alternative energy source that can be used to provide electricity to utility consumers;

(6) some regions in the State are ideal locations for wind energy system development;

(7) as the facilities are typically constructed on property owned by others, and deconstruction of the facilities is costly, it is desirable to create an indemnity fund to pay for deconstruction in the event that the wind energy company fails to do so in a timely manner; and

(8) it is appropriate to protect the owners of the underlying lands from mechanics liens imposed on those lands in the event that the entities constructing the wind energy facilities fail to pay suppliers of labor and materials.

Section 905. The Public Utilities Act is amended by adding Section 9-220.3 as follows:

(220 ILCS 5/9-220.3 new)

Sec. 9-220.3. Renewable energy portfolio standards.

(a) "Renewable energy resources" has the meaning set forth in subsection (f) of Section 6-3 of The Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997. However, for the limited purposes of this Section, energy produced by methane recovered from landfills in Illinois may be counted as a renewable energy resource for up to, but no more than, 25% of the amount of renewable energy resources provided by the electric utility or alternative retail electric supplier in meeting the standards set forth in subsection (c).

(b) The objective of this Section is to ensure the development and use of renewable energy resources to advance the goals stated in Section 5 of the Illinois Resource Development and Energy Security Act.

(c) Each electric utility or alternative retail electric supplier shall provide sufficient renewable energy resources to comprise:

(1) at least 2% of the total electricity (megawatthours) that it supplies to its Illinois customers as of December 31, 2007;

(2) at least 3% of the total electricity (megawatthours) that it supplies to its Illinois customers as of December 31, 2008;

(3) at least 4% of the total electricity (megawatthours) that it supplies to its Illinois customers as of December 31, 2009;

(4) at least 5% of the total electricity (megawatthours) that it supplies to its Illinois customers as of December 31, 2010;

(5) at least 6% of the total electricity (megawattshours) that it supplies to its Illinois customers as of December 31, 2011;

(6) at least 7% of the total electricity (megawattshours) that it supplies to its Illinois customers as of December 31, 2012;

(7) at least 8% of the total electricity (megawattshours) that it supplies to its Illinois customers as of December 31, 2013;

(8) at least 9% of the total electricity (megawattshours) that it supplies to its Illinois customers as of December 31, 2014;

(9) and at least 10% of the total electricity (megawattshours) that it supplies to its Illinois customers as of December 31, 2015.

The electric utilities or alternative retail electric suppliers shall report to the Commission on their compliance with these standards by April 1, 2008 and by April 1st of each succeeding year.

(d) In order to help achieve improved air quality, public health, and environmental quality for Illinois, renewable energy resources may be counted for purposes of meeting the renewable energy portfolio standards set forth in subsection (c) only if they are generated from facilities located in this State or in a directly adjacent serious or severe ozone non-attainment area as designated by the United States Environmental Protection Agency. However, the renewable energy resources may be counted for purposes of the renewable energy portfolio standards after January 1, 2007 if generated from a facility in an adjacent state that has entered into an agreement with Illinois as provided in subsection (e) and the renewable energy resource provided meets the definition set forth in subsection (f) of Section 6-3 of the Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997.

(e) Illinois officials may work with public officials in adjacent states to develop a regional agreement in which Illinois electric utilities and alternative retail electricity suppliers will be allowed, after January 1, 2007, to count for purposes of meeting the designated renewable energy portfolio standards set forth in subsection (c) some renewable energy resources generated in an adjacent state if that other state has enacted statutory renewable energy portfolio standards that are similar to the standards set forth in subsection (c) and that other state also allows renewable energy resources generated in Illinois to be counted toward meeting its statutory renewable energy portfolio standards on a similar basis. For the purposes of such an agreement, only those renewable energy resources meeting the definition set forth in subsection (f) of Section 6-3 of the Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997 may be included.

(f) Costs of obtaining renewable energy resources to meet the renewable energy portfolio standards, after January 1, 2007, pursuant to subsection (c), shall be recoverable by a utility from its ratepayers to the same extent as other fuel or purchase power costs as allowed by law after January 1, 2007.

(g) If an electric utility or alternative retail electric supplier does not purchase and supply all of the amounts of renewable energy specified by the standards in subsection (c), then the electric utility or alternative retail electric supplier shall pay a penalty of $25 per megawatthour each year for any shortfall in supply. That payment shall be deposited into the Renewable Energy Resources Trust Fund to be used by the Department of Commerce and Economic Opportunity for the purposes of supporting the actual development, construction, and utilization of renewable energy projects in Illinois. However, if the electric utility or alternative retail electric supplier compellingly demonstrates that renewable energy resources are not available in sufficient quantities to meet the renewable energy portfolio standards set forth in subsection (c), and makes such a force majeure showing as to the shortfall and any obstacles to availability, and if the Illinois Commerce Commission finds that the electric utility or alternative retail electric supplier, after notice and a hearing with an opportunity for the public to be heard, has, in fact, made such a compelling demonstration, then the electric utility or alternative retail electric supplier may avoid paying the penalty. The penalty payments shall be set aside in a separate escrow fund pending the hearing. In any case where the Commission finds that such a compelling demonstration has been made, the electric utility or alternative retail electric supplier must provide a mutually acceptable alternative means of developing and utilizing renewable energy resources in the State, subject to the review and approval of the Illinois Commerce Commission and the Department of Commerce and Economic Opportunity.

(h) This Act exempts any public utility with fewer than 200,000 electric customers in Illinois on January 1, 2007.

Section 910. The Mechanics Lien Act is amended by adding Section 1.01 as follows:

(770 ILCS 60/1.01 new)

Sec. 1.01. Definitions. Person entitled to lien; extent of lien on wind energy parcel.

(a) Definitions.

"Wind energy conversion device" means any device including, but not limited to, a wind charger, windmill, or wind turbine that coverts wind energy to a form of usable energy.

"Wind energy conversion parcel" means all property rights obtained by the wind energy system owner to the platted parcel including the wind energy conversion devices, associated equipment, easements, contracts, and leases.

(b) A lien for work or materials on wind energy conversion parcels is limited to the platted parcel, including all property rights obtained by the wind energy system owner to the platted parcel including the wind energy conversion devices, associated equipment, easements, contracts, and leases.

Section 999. Effective date. This Act takes effect upon becoming law.".