SB3111 102ND GENERAL ASSEMBLY

LRB102 22396 SPS 31536 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3111

Introduced 1/11/2022, by Sen. Donald P. DeWitte - Chapin Rose

SYNOPSIS AS INTRODUCED:

5 ILCS 100/5-45.21 new
220 ILCS 5/4-604.1 new

Amends the Public Utilities Act. Creates ethical standards applicable to renewable energy companies. Establishes a Renewable Energy Company Ethics and Compliance Monitor to oversee compliance by renewable energy companies as part of the Ethics and Accountability Division of the Illinois Commerce Commission. Provides that no later than 60 days after the effective date of the amendatory Act, each renewable energy company shall establish a position of Chief Ethics and Compliance Officer to ensure that the renewable energy company complies with the highest standards of ethical conduct. Provides that each renewable energy company shall be required to submit an annual ethics and compliance report to the Commission no later than May 1 of each year. Amends the Illinois Administrative Procedure Act to allow the Commission to adopt emergency rules. Effective immediately.

A BILL FOR

AN ACT concerning regulation.

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

Section 5. The Illinois Administrative Procedure Act is amended by adding Section 5-45.21 as follows:

(5 ILCS 100/5-45.21 new)

Sec. 5-45.21. Emergency rulemaking; Illinois Commerce Commission. To provide for the expeditious and timely implementation of this amendatory Act of the 102nd General Assembly, emergency rules implementing this amendatory Act of the 102nd General Assembly may be adopted in accordance with Section 5-45 by the Illinois Commerce Commission. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

This Section is repealed one year after the effective date of this amendatory Act of the 102nd General Assembly.

Section 10. The Public Utilities Act is amended by adding Section 4-604.1 as follows:

(220 ILCS 5/4-604.1 new)

Sec. 4-604.1. Renewable energy companies ethical conduct and transparency.

(a) The standards set forth in this Section and the Illinois Administrative Code rules implementing this Section shall apply, to the extent practicable, to renewable energy companies.

(b) Renewable Energy Company Ethics and Compliance Monitor. To ensure that renewable energy companies meet the highest level of ethical standards, including, but not limited to, those standards established in this Section, the Commission shall, within 60 days after the effective date of this amendatory Act of the 102nd General Assembly, shall create a new position of Renewable Energy Company Ethics and Compliance Monitor as part of the Ethics and Accountability Division who reports to the Executive Director of the Commission. The role of the Renewable Energy Company Ethics and Compliance Monitor shall be to oversee renewable energy companies' compliance with the standards established in this Section, the Illinois Administrative Code, and any other regulatory or statutory obligation regarding standards of ethical conduct. The responsibilities of the Renewable Energy Company Ethics and Compliance Monitor shall include:

(1) Hiring additional staff for the Ethics and Accountability Division, as deemed necessary to fulfill the duties imposed under this Section.

(2) Overseeing each renewable energy company's Chief Compliance and Ethics Officer's monitoring, auditing, investigation, enforcement, reporting, disciplinary activities, and any other actions required of the Chief Compliance and Ethics Officer pursuant to subsection (c). If the Renewable Energy Company Ethics and Compliance Monitor finds a renewable energy company has not complied with the standards set forth in this Section, or with administrative rules implementing this Section, the Renewable Energy Company Ethics and Compliance Monitor shall detail such deficiencies in a report to the Commission and shall include a recommendation for Commission action.

(3) Documenting violations of the standards in this Section or in related Sections of the Illinois Administrative Code and, in coordination with the renewable energy company's Chief Compliance and Ethics Officer, ensuring each renewable energy company administers appropriate internal disciplinary actions and provides transparent reporting to the Commission. If there are violations of the standards in this Section or in related Sections of the Illinois Administrative Code where the renewable energy company does not take disciplinary action or where that action is not aligned with the recommendation of the Renewable Energy Company Ethics and Compliance Monitor, the Renewable Energy Company Ethics and Compliance Monitor shall, within 30 days, report the violation, the recommended disciplinary action, and the renewable energy company's actual disciplinary action, to the Executive Director of the Commission. Such reports shall be included in the annual ethics report required by paragraph (5) and must describe the violation and related recommendations.

(4) Reviewing and keeping informed regarding internal controls, code of ethical conduct, practices, procedures, and conduct of each renewable energy company. The Renewable Energy Company Ethics and Compliance Monitor may recommend any new internal controls, policies, practices, or procedures the renewable energy company should undertake in order to ensure compliance with this Section and with relevant Sections of the Illinois Administrative Code.

(5) Publishing an annual ethics audit for each renewable energy company describing the renewable energy company's internal controls, policies, practices, and procedures to comply with statutes, rules, court orders, or other applicable authority. The report shall include a record of any disciplinary actions taken related to unethical conduct as well as any recommendations made by the Renewable Energy Company Ethics and Compliance Monitor and the renewable energy company's response to each recommendation. This report must be made public and the Commission may make necessary redactions.

(6) Monitoring, auditing, and subpoenaing all records necessary for the Renewable Energy Company Ethics and Compliance Monitor to meet the responsibilities imposed under this Section and related rules, including, but not limited to, contracts with third party entities, accounting records, communication with public officials or their staff, lobbying activities, expenses on lobbyists and consultants, legal expenses, and internal compliance policies.

(c)(1) No later than 60 days after the effective date of this amendatory Act of the 102nd General Assembly, each renewable energy company shall establish a position of Chief Ethics and Compliance Officer if such position does not already exist within the renewable energy company or at an affiliated company, provided that if the position exists at an affiliated company such individual may be designated to serve in this role for the renewable energy company. The Chief Ethics and Compliance Officer shall be responsible for ensuring that the renewable energy company complies with the highest standards of ethical conduct, including, but not limited to, complying with the standards imposed under this Section, those adopted pursuant to a rulemaking authorized by this Section, and other applicable requirements of Illinois law and rules.

(2) Each renewable energy company's Chief Ethics and Compliance Officer shall:

(A) oversee creation and implementation of a code of ethical conduct for the renewable energy company, applicable to all directors, officers, employees, and lobbyists of the renewable energy company, as well as to all contractors, consultants, agents, vendors, and business partners of the renewable energy company in connection with their activities with or on behalf of the renewable energy company;

(B) oversee training for renewable energy company directors, officers, and employees, as well as contractors, consultants, lobbyists, and political consultants, on the renewable energy company's code of ethical conduct, practices, and procedures to advise agents, vendors, and business partners of the renewable energy company of the applicability of the code of ethical conduct to their activities with or on behalf of the renewable energy company;

(C) oversee the ongoing monitoring of all contractors, consultants, and vendors who are contracted for the purpose of carrying out lobbying activities to ensure their continued compliance with applicable ethical standards;

(D) at least annually, oversee a review of the renewable energy company's internal controls, code of ethical conduct, practices, and procedures to assess their continued effectiveness to ensure the highest standards of ethical conduct among the renewable energy company's directors, officers, employees, contractors, consultants, lobbyists, vendors, agents and business partners; and

(E) maintain records of all conduct determined to be in violation of Illinois law, rules, and regulations, and the renewable energy company's response to that conduct, and make such records available for inspection by the Renewable Energy Company Ethics and Compliance Monitor.

(d) In addition to those standards established under this Section, those adopted pursuant to a rulemaking authorized by this Section, and other applicable requirements of Illinois law and rules, each renewable energy company Chief Ethics and Compliance Officer shall oversee and ensure the development and implementation of internal controls, policies, and procedures to achieve the objectives set forth in paragraphs (1) through (3). Such implementation shall begin no later than 90 days after the effective date of this amendatory Act of the 102nd General Assembly.

(1) The hiring of contractors, consultants, and vendors for the purpose of carrying out lobbying pursuant to the Lobbyist Registration Act shall be reviewed and approved by the Chief Ethics and Compliance Officer.

(2) No agreement between a renewable energy company and a contractor, consultant, or vendor engaged for the purpose of carrying out lobbying pursuant to the Lobbyist Registration Act shall permit that contractor, consultant, or vendor to subcontract any portion of that work.

(3) Renewable energy companies shall require contractors, consultants, and vendors who are contracted for the purpose of carrying out lobbying pursuant to the Lobbyist Registration Act to provide detailed invoices and reports describing activities taken and amounts billed for such activities, including all persons involved and anything of value requested or solicited or provided to public officials or their staff, including hiring requests. No such contractor, consultant, or vendor shall be paid without having first submitted a detailed invoice or report.

For purposes of this Section, "anything of value" includes, but is not limited to, money, gifts, entertainment, hiring referrals, and recommendations to the renewable energy company, campaign contributions, vendor referrals, and contributions to charitable organizations solicited by or on behalf of the public official.

(e) Each renewable energy company shall be required to submit an annual ethics and compliance report to the Commission no later than May 1 of each year, beginning May 1, 2022. The renewable energy company's Chief Ethics and Compliance Officer shall oversee the preparation and submission of the report and shall certify it. Each report shall describe in detail the renewable energy company's internal controls, codes of ethical conduct, practices, and procedures. The reporting implemented during the reporting period to comply with the standards set forth in this Section, rules adopted by the Commission, and other applicable requirements of Illinois law and rules. Each report shall also identify any material changes implemented to such internal controls, code of ethical conduct, practices, and procedures during the reporting period, as well as any material changes implemented, or anticipated to be implemented, in the calendar year in which the report is filed. Each report shall, for the applicable reporting period include at least the following information:

(1) a summary and description of the renewable energy company's system of financial and accounting procedures, internal controls, and practices, including an explanation of how this system is reasonably designed to ensure the maintenance of fair and accurate books, records, and accounts and to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and Commission requirements and to maintain accountability for assets;

(2) a summary and description of the renewable energy company's process for conducting an assessment of ethics and compliance risks and a representation that an assessment was conducted in accordance with those risks and shared with the renewable energy company's senior management and board of directors;

(3) a summary of the renewable energy company's implementation of mechanisms, including, but not limited to, training programs designed to ensure that its internal controls, code of ethical conduct, practices, and procedures are effectively communicated to all directors, officers, employees, contractors, consultants, lobbyists, vendors, agents, and business partners;

(4) a summary of the renewable energy company's efforts to ensure that its directors and senior management provide strong, explicit, and visible support and commitment to its corporate policy against violations of federal and State law;

(5) a summary of the renewable energy company's implementation of mechanisms designed to effectively enforce its internal controls, code of ethical conduct, practices, and procedures, including appropriately providing incentives for compliance, disciplining violators, and applying such code, controls, policies, practices, and procedures consistently and fairly regardless of the position held by, or the importance of, the director, officer, or employee; and

(6) a summary of the renewable energy company's implementation of procedures to ensure that, where misconduct is discovered, reasonable steps are taken to remedy the harm resulting from such misconduct, including disciplinary action, logging the conduct and the renewable energy company's response as required by item (E) of paragraph (2) of subsection (c) and assessing and modifying as appropriate the internal controls, code, policies, practices, and procedures necessary to ensure that the compliance program is effective.

For purposes of this Section, "reporting period" means the most recent 12-month calendar year period preceding the applicable May 1 annual report filing date.

(f) Each renewable energy company that files a report pursuant to subsection (e) must submit the specified filing fee at the time the Chief Clerk of the Commission accepts the filing. The filing fee applicable to each annual report is $15,000.

(g) In the event the Renewable Energy Company Ethics and Compliance Monitor finds a renewable energy company does not comply with any portion of this Section, or with the rules adopted under this Section, the Renewable Energy Company Ethics and Compliance Monitor shall issue a report to the Commission detailing the renewable energy company's deficiencies. The Commission shall have authority to open an investigation and shall order remediation and penalties, including fines, as appropriate.

(h) Each year, each renewable energy company in the State shall remit amounts necessary for the Commission to pay the wages, overhead, travel expenses, and other costs of the Renewable Energy Company Ethics and Compliance Monitor. The renewable energy company shall remit payment to the Commission in an amount determined by the Commission based on that renewable energy company's proportional share, by number of customers.

(i) The costs of a renewable energy company that arise from a criminal investigation or result from an investigation initiated by the Commission as the result of an ethics violation are not costs of service and shall not be recoverable in rates.

(j) The Commission shall have the authority to adopt rules and emergency rules where applicable to implement this Section.

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