093_HB2866eng

 
HB2866 Engrossed                     LRB093 09861 SJM 10109 b

 1        AN ACT concerning coal.

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

 4        Section  5.  The  Department  of  Commerce  and Community
 5    Affairs Law of the Civil Administrative Code of  Illinois  is
 6    amended by changing Section 605-332 as follows:

 7        (20 ILCS 605/605-332)
 8        Sec.  605-332.  Financial assistance to energy generation
 9    facilities.
10        (a)  As used in this Section:
11        "New    electric    generating    facility"    means    a
12    newly-constructed  electric  generation  plant  or  a   newly
13    constructed  generation  capacity  expansion  at  an existing
14    facility, including the  transmission  lines  and  associated
15    equipment that transfers electricity from points of supply to
16    points  of  delivery,  and  for which foundation construction
17    commenced not sooner than July 1, 2001, which is designed  to
18    provide   baseload   electric   generation   operating  on  a
19    continuous basis  throughout  the  year;  and  which  has  an
20    aggregate rated generating capacity of at least 400 megawatts
21    for  all  new  units  at one site, uses coal or gases derived
22    from coal as  its  primary  fuel  source,  and  supports  the
23    creation of at least 150 new Illinois coal mining jobs.
24        "Eligible  business"  means  an  entity  that proposes to
25    construct a new electric generating  facility  and  that  has
26    applied  to  the  Department  to receive financial assistance
27    pursuant to this Section. With respect to use and  occupation
28    taxes, wherever there is a reference to taxes, that reference
29    means  only those taxes paid on Illinois-mined coal used in a
30    new electric generating facility.
31        "Department" means the Illinois  Department  of  Commerce
 
HB2866 Engrossed            -2-      LRB093 09861 SJM 10109 b
 1    and Community Affairs.
 2        (b)  The  Department  is  authorized to provide financial
 3    assistance to eligible businesses for new electric generating
 4    facilities from funds appropriated by the General Assembly as
 5    further provided in this Section.
 6        An eligible business seeking qualification for  financial
 7    assistance  for  a  new  electric  generating  facility,  for
 8    purposes  of this Section only, shall apply to the Department
 9    in the manner specified by the  Department.  Any  projections
10    provided  by  an eligible business as part of the application
11    shall be independently verified in a manner as set  forth  by
12    the  Department.  An  application  shall  include, but not be
13    limited to:
14             (1)  the projected or actual completion date of  the
15        new  electric  generating  facility  for  which financial
16        assistance is sought;
17             (2)  copies of documentation  deemed  acceptable  by
18        the  Department  establishing  either (i) the total State
19        occupation and use taxes paid on Illinois-mined coal used
20        at the new electric generating facility for a minimum  of
21        4  preceding  calendar  quarters  or  (ii)  the projected
22        amount  of  State  occupation  and  use  taxes  paid   on
23        Illinois-mined  coal  used at the new electric generating
24        facility in 4 calendar year quarters after completion  of
25        the  new  electric  generating  facility.  Bond  proceeds
26        subject  to  this  Section  shall  not be allocated to an
27        eligible  business  until  the  eligible   business   has
28        demonstrated the revenue stream sufficient to service the
29        debt on the bonds; and
30             (3)  the  actual  or  projected  amount  of  capital
31        investment  by  the eligible business in the new electric
32        generating facility.
33        The Department shall  determine  the  maximum  amount  of
34    financial  assistance  for  eligible businesses in accordance
 
HB2866 Engrossed            -3-      LRB093 09861 SJM 10109 b
 1    with  this  paragraph.   The  Department  shall  not  provide
 2    financial assistance from general obligation  bond  funds  to
 3    any   eligible   business   unless   it  receives  a  written
 4    certification from the Director of the Bureau of  the  Budget
 5    that  80%  of the State occupation and use tax receipts for a
 6    minimum of the preceding 4 calendar quarters for all eligible
 7    businesses  or  as  included  in  projections   on   approved
 8    applications  by  eligible businesses equal or exceed 110% of
 9    the maximum annual debt  service  required  with  respect  to
10    general  obligation  bonds  issued  for  that  purpose.   The
11    Department may provide financial assistance not to exceed the
12    amount  of State general obligation debt calculated as above,
13    the amount of actual or projected capital investment  in  the
14    energy  generation  facility,  or  $100,000,000, whichever is
15    less. Financial assistance received pursuant to this  Section
16    may  be  used for capital facilities consisting of buildings,
17    structures, durable equipment, and land at the  new  electric
18    generating   facility.  Subject  to  the  provisions  of  the
19    agreement covering the financial assistance, a portion of the
20    financial assistance may be required  to  be  repaid  to  the
21    State  if  certain conditions for the governmental purpose of
22    the assistance were not met.
23        An eligible business shall file a monthly report with the
24    Illinois  Department  of  Revenue  stating  the   amount   of
25    Illinois-mined  coal  purchased during the previous month for
26    use in the new electric  generating  facility,  the  purchase
27    price  of  that  coal, the amount of State occupation and use
28    taxes  paid  on  that  purchase  to   the   seller   of   the
29    Illinois-mined  coal,  and  such  other  information  as that
30    Department   may   reasonably   require.    In    sales    of
31    Illinois-mined  coal  between  related  parties, the purchase
32    price of the coal must have been determined in an arms-length
33    transaction.  The report shall be  filed  with  the  Illinois
34    Department of Revenue on or before the 20th day of each month
 
HB2866 Engrossed            -4-      LRB093 09861 SJM 10109 b
 1    on  a  form  provided by that Department.  However, no report
 2    need be filed by an eligible business in a month when it made
 3    no reportable purchases of coal in the  previous  month.  The
 4    Illinois  Department  of  Revenue  shall provide a summary of
 5    such reports to the Bureau of the Budget.
 6        Upon  granting  financial  assistance  to   an   eligible
 7    business,  the  Department  shall  certify  the  name  of the
 8    eligible business to  the  Illinois  Department  of  Revenue.
 9    Beginning  with  the  receipt  of  the  first report of State
10    occupation and use taxes paid by  an  eligible  business  and
11    continuing  for  a 25-year period, the Illinois Department of
12    Revenue shall each month pay into the  Energy  Infrastructure
13    Fund  80%  of the net revenue realized from the 6.25% general
14    rate on the selling price of  Illinois-mined  coal  that  was
15    sold to an eligible business.
16    (Source: P.A. 92-12, eff. 7-1-01.)

17        Section  10.   The Illinois Development Finance Authority
18    Act is amended by changing Section 7.90 as follows:

19        (20 ILCS 3505/7.90)
20        Sec. 7.90.  Clean Coal and Energy Project Financing.
21        (a)  Findings and declaration of policy.   It  is  hereby
22    found  and declared that Illinois has abundant coal resources
23    and, in some areas of Illinois, the demand for power  exceeds
24    the   generating   capacity.   Incentives  to  encourage  the
25    construction of  coal-fired  electric  generating  plants  in
26    Illinois  to ensure power-generating capacity into the future
27    are in the best interests of all of the citizens of Illinois.
28    The Authority is authorized to issue bonds  to  help  finance
29    Clean  Coal  and Energy projects pursuant to this Section and
30    under this Act.
31        (b)  Definition. "Clean Coal and Energy  projects"  means
32    new  electric  generating  facilities,  as defined in Section
 
HB2866 Engrossed            -5-      LRB093 09861 SJM 10109 b
 1    605-332 of the Department of Commerce and  Community  Affairs
 2    Law  of  the Civil Administrative Code of Illinois, which may
 3    include mine-mouth power plants, projects that employ the use
 4    of clean coal technology,  projects  to  develop  alternative
 5    energy sources, including renewable energy projects, projects
 6    to provide scrubber technology for existing energy generating
 7    plants,   or   projects   to  provide  electric  transmission
 8    facilities.
 9        (c)  Creation  of  reserve  funds.   The  Authority   may
10    establish  and  maintain one or more reserve funds to enhance
11    bonds issued by the  Authority  for  Clean  Coal  and  Energy
12    projects  under  this  Section.   There  may  be  one or more
13    accounts in  these  reserve  funds  in  which  there  may  be
14    deposited:
15             (1)  any  proceeds  of bonds issued by the Authority
16        required to be deposited therein  by  the  terms  of  any
17        contract between the Authority and its bondholders or any
18        resolution of the Authority;
19             (2)  any other moneys or funds of the Authority that
20        it  may  determine  to  deposit  therein  from  any other
21        source; and
22             (3)  any other moneys or funds made available to the
23        Authority.
24        Subject to the terms of any pledge to the owners  of  any
25    bonds,  moneys in any reserve fund may be held and applied to
26    the payment of the interest, premium, if any, or principal of
27    bonds or for any other purpose authorized by the Authority.
28        (d)  Powers and duties.  The Authority has the power:
29             (1)  To issue bonds in one or more  series  pursuant
30        to one or more resolutions of the Authority for any Clean
31        Coal  and  Energy projects authorized under this Section,
32        within  the  authorization  set  forth   in   subsections
33        subsection (e) and (e-5).
34             (2)  To  provide  for the funding of any reserves or
 
HB2866 Engrossed            -6-      LRB093 09861 SJM 10109 b
 1        other funds or accounts deemed necessary by the Authority
 2        in connection with any bonds issued by the Authority.
 3             (3)  To pledge any funds of the Authority  or  funds
 4        made  available  to  the Authority that may be applied to
 5        such purpose as security for any bonds or any guarantees,
 6        letters of credit, insurance contracts, or similar credit
 7        support or liquidity instruments securing the bonds.
 8             (4)  To enter  into  agreements  or  contracts  with
 9        third  parties,  whether  public  or  private, including,
10        without limitation, the United  States  of  America,  the
11        State, or any department or agency thereof, to obtain any
12        appropriations,  grants,  loans,  or  guarantees that are
13        deemed necessary or desirable by the Authority.  Any such
14        guarantee, agreement, or contract may contain  terms  and
15        provisions  necessary or desirable in connection with the
16        program, subject to the requirements established  by  the
17        Act.
18             (5)  To  exercise such other powers as are necessary
19        or incidental to the foregoing.
20        (e)  Clean  Coal  and  Energy  bond   authorization   and
21    financing  limits.  In addition to any other bonds authorized
22    to  be  issued  under  this  Act,  the  Authority  may   have
23    outstanding, at any time, bonds for the purpose enumerated in
24    this  subsection (e) Section in an aggregate principal amount
25    that shall not exceed $3,000,000,000, of which no  more  than
26    $300,000,000   may   be   issued   to   finance  transmission
27    facilities, no  more  than  $500,000,000  may  be  issued  to
28    finance scrubbers at existing generating plants, no more than
29    $500,000,000  may  be  issued  to  finance alternative energy
30    sources, including renewable energy  projects,  and  no  more
31    than  $1,700,000,000  may  be  issued to finance new electric
32    generating facilities, as defined in Section 605-332  of  the
33    Department of Commerce and Community Affairs Law of the Civil
34    Administrative Code of Illinois, which may include mine-mouth
 
HB2866 Engrossed            -7-      LRB093 09861 SJM 10109 b
 1    power  plants.   An application for a loan financed from bond
 2    proceeds from a borrower or its affiliates for a  Clean  Coal
 3    and  Energy  project may not be approved by the Authority for
 4    an amount in excess of $450,000,000 for any borrower  or  its
 5    affiliates.  These bonds shall not constitute an indebtedness
 6    or  obligation  of  the  State  of  Illinois  and it shall be
 7    plainly stated on the face of each  bond  that  it  does  not
 8    constitute  an  indebtedness  or  obligation  of the State of
 9    Illinois but is payable solely from the revenues, income,  or
10    other assets of the Authority pledged therefor.
11        (e-5) Additional Clean Coal and Energy bond authorization
12    and   financing  limits.  In  addition  to  any  other  bonds
13    authorized to be issued under subsection (e),  the  Authority
14    may issue bonds for the purposes enumerated in subsection (e)
15    in  an  aggregate  principal  amount  that  shall  not exceed
16    $300,000,000.
17        In the event that the Authority determines that the funds
18    pledged, intercepted, or otherwise received or to be received
19    by the Authority for the payment of the  principal,  premium,
20    if any, and interest during the next State fiscal year on any
21    bonds issued by the Authority under this subsection (e-5) for
22    the  specific  purposes  identified  in this subsection (e-5)
23    will not be sufficient for those payments, the  Chairman,  as
24    soon  as  is  practical,  shall  certify  to the Governor the
25    amount required by the Authority to  enable  it  to  pay  the
26    principal,  premium,  if any, and interest falling due on the
27    bonds. The Governor shall submit the amount so  certified  to
28    the  General Assembly as soon as practical, but no later than
29    the end of the current  State  fiscal  year.  This  paragraph
30    shall  not apply to any bonds as to which the Authority shall
31    have  determined,  in  the   resolution   authorizing   their
32    issuance,  that  this paragraph shall not apply. Whenever the
33    Authority makes such a  determination,  that  fact  shall  be
34    plainly  stated  on the face of the bonds and that fact shall
 
HB2866 Engrossed            -8-      LRB093 09861 SJM 10109 b
 1    also be reported to the Governor.
 2        In the event of  a  withdrawal  of  moneys  from  a  debt
 3    service reserve fund established with respect to any issue or
 4    issues  of bonds of the Authority under this subsection (e-5)
 5    to pay principal and interest on those bonds,  the  Chairman,
 6    as  soon  as  is practical, shall certify to the Governor the
 7    amount required to restore the  reserve  fund  to  the  level
 8    required  in  the resolution or indenture securing the bonds.
 9    The Governor shall submit the  amount  so  certified  to  the
10    General Assembly as soon as practical, but not later than the
11    end of the current State fiscal year.
12        (f)  Criteria   for   participation   in   the   program.
13    Applications to the Authority for financing of any Clean Coal
14    and  Energy project shall be reviewed by the Authority.  Upon
15    submission of any such application, the Authority staff shall
16    review the application for its completeness and may,  at  the
17    discretion  of  the  Authority staff, request such additional
18    information as it deems necessary  or  advisable  to  aid  in
19    review.  If the Authority receives applications for financing
20    for  Clean  Coal  and  Energy  projects in excess of the bond
21    authorization available for such financing at any  one  time,
22    it shall consider applications in the order of priority as it
23    shall determine, in consultation with other State agencies.
24    (Source: P.A. 92-12, eff. 7-1-01.)

25        Section  99.  Effective  date.   This Act takes effect on
26    July 1, 2003.