SB1814ham004 94TH GENERAL ASSEMBLY

Rep. Dan Reitz

Filed: 5/30/2005

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1814

2     AMENDMENT NO. ______. Amend Senate Bill 1814 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Department of Commerce and Economic
5 Opportunity 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 continuous
19 basis throughout the year and:
20         (1) has an aggregate rated generating capacity of at
21     least 400 megawatts for all new units at one site, uses
22     coal or gases derived from coal as its primary fuel source,
23     and supports the creation of at least 150 new Illinois coal
24     mining jobs; or

 

 

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1         (2) is (i) funded through a federal Department of
2     Energy grant before July 1, 2006 and supports the creation
3     of Illinois coal-mining jobs; or 2005, and (ii)
4         (3) uses coal gasification or integrated
5     gasification-combined cycle units that generate
6     electricity or chemicals, or both, and that supports the
7     creation of Illinois coal-mining jobs.
8     "New gasification facility" means a newly constructed coal
9 gasification facility that generates chemical feedstocks or
10 transportation fuels derived from coal (which may include, but
11 are not limited to, methane, methanol, and nitrogen
12 fertilizer), that supports the creation or retention of
13 Illinois coal-mining jobs, and that qualifies for financial
14 assistance from the Department before December 31, 2006. A new
15 gasification facility does not include a pilot project located
16 within Jefferson County or within a county adjacent to
17 Jefferson County for synthetic natural gas from coal.
18     "New facility" means a new electric generating facility or
19 a new gasification facility. A new facility does not include a
20 pilot project located within Jefferson County or within a
21 county adjacent to Jefferson County for synthetic natural gas
22 from coal.
23     "Eligible business" means an entity that proposes to
24 construct a new electric generating facility and that has
25 applied to the Department to receive financial assistance
26 pursuant to this Section. With respect to use and occupation
27 taxes, wherever there is a reference to taxes, that reference
28 means only those taxes paid on Illinois-mined coal used in a
29 new electric generating facility.
30     "Department" means the Illinois Department of Commerce and
31 Economic Opportunity.
32     (b) The Department is authorized to provide financial
33 assistance to eligible businesses for new electric generating
34 facilities from funds appropriated by the General Assembly as

 

 

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1 further provided in this Section.
2     An eligible business seeking qualification for financial
3 assistance for a new electric generating facility, for purposes
4 of this Section only, shall apply to the Department in the
5 manner specified by the Department. Any projections provided by
6 an eligible business as part of the application shall be
7 independently verified in a manner as set forth by the
8 Department. An application shall include, but not be limited
9 to:
10         (1) the projected or actual completion date of the new
11     electric generating facility for which financial
12     assistance is sought;
13         (2) copies of documentation deemed acceptable by the
14     Department establishing either (i) the total State
15     occupation and use taxes paid on Illinois-mined coal used
16     at the new electric generating facility for a minimum of 4
17     preceding calendar quarters or (ii) the projected amount of
18     State occupation and use taxes paid on Illinois-mined coal
19     used at the new electric generating facility in 4 calendar
20     year quarters after completion of the new electric
21     generating facility. Bond proceeds subject to this Section
22     shall not be allocated to an eligible business until the
23     eligible business has demonstrated the revenue stream
24     sufficient to service the debt on the bonds; and
25         (3) the actual or projected amount of capital
26     investment by the eligible business in the new electric
27     generating facility.
28     The Department shall determine the maximum amount of
29 financial assistance for eligible businesses in accordance
30 with this paragraph. The Department shall not provide financial
31 assistance from general obligation bond funds to any eligible
32 business unless it receives a written certification from the
33 Director of the Bureau of the Budget (now Governor's Office of
34 Management and Budget) that 80% of the State occupation and use

 

 

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1 tax receipts for a minimum of the preceding 4 calendar quarters
2 for all eligible businesses or as included in projections on
3 approved applications by eligible businesses equal or exceed
4 110% of the maximum annual debt service required with respect
5 to general obligation bonds issued for that purpose. The
6 Department may provide financial assistance not to exceed the
7 amount of State general obligation debt calculated as above,
8 the amount of actual or projected capital investment in the
9 energy generation facility, or $100,000,000, whichever is
10 less. Financial assistance received pursuant to this Section
11 may be used for capital facilities consisting of buildings,
12 structures, durable equipment, and land at the new electric
13 generating facility. Subject to the provisions of the agreement
14 covering the financial assistance, a portion of the financial
15 assistance may be required to be repaid to the State if certain
16 conditions for the governmental purpose of the assistance were
17 not met.
18     An eligible business shall file a monthly report with the
19 Illinois Department of Revenue stating the amount of
20 Illinois-mined coal purchased during the previous month for use
21 in the new electric generating facility, the purchase price of
22 that coal, the amount of State occupation and use taxes paid on
23 that purchase to the seller of the Illinois-mined coal, and
24 such other information as that Department may reasonably
25 require. In sales of Illinois-mined coal between related
26 parties, the purchase price of the coal must have been
27 determined in an arms-length transaction. The report shall be
28 filed with the Illinois Department of Revenue on or before the
29 20th day of each month on a form provided by that Department.
30 However, no report need be filed by an eligible business in a
31 month when it made no reportable purchases of coal in the
32 previous month. The Illinois Department of Revenue shall
33 provide a summary of such reports to the Governor's Office of
34 Management and Budget.

 

 

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1     Upon granting financial assistance to an eligible
2 business, the Department shall certify the name of the eligible
3 business to the Illinois Department of Revenue. Beginning with
4 the receipt of the first report of State occupation and use
5 taxes paid by an eligible business and continuing for a 25-year
6 period, the Illinois Department of Revenue shall each month pay
7 into the Energy Infrastructure Fund 80% of the net revenue
8 realized from the 6.25% general rate on the selling price of
9 Illinois-mined coal that was sold to an eligible business.
10 (Source: P.A. 92-12, eff. 7-1-01; 93-167, eff. 7-10-03;
11 93-1064, eff. 1-13-05.)
 
12     Section 10. The Illinois Enterprise Zone Act is amended by
13 changing Section 5.5 as follows:
 
14     (20 ILCS 655/5.5)   (from Ch. 67 1/2, par. 609.1)
15     Sec. 5.5. High Impact Business.
16     (a) In order to respond to unique opportunities to assist
17 in the encouragement, development, growth and expansion of the
18 private sector through large scale investment and development
19 projects, the Department is authorized to receive and approve
20 applications for the designation of "High Impact Businesses" in
21 Illinois subject to the following conditions:
22         (1) such applications may be submitted at any time
23     during the year;
24         (2) such business is not located, at the time of
25     designation, in an enterprise zone designated pursuant to
26     this Act;
27         (3) the business intends to do one or more of the
28     following:
29             (A) the business intends to make a minimum
30         investment of $12,000,000 which will be placed in
31         service in qualified property and intends to create 500
32         full-time equivalent jobs at a designated location in

 

 

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1         Illinois or intends to make a minimum investment of
2         $30,000,000 which will be placed in service in
3         qualified property and intends to retain 1,500
4         full-time jobs at a designated location in Illinois.
5         The business must certify in writing that the
6         investments would not be placed in service in qualified
7         property and the job creation or job retention would
8         not occur without the tax credits and exemptions set
9         forth in subsection (b) of this Section. The terms
10         "placed in service" and "qualified property" have the
11         same meanings as described in subsection (h) of Section
12         201 of the Illinois Income Tax Act; or
13             (B) the business intends to establish a new
14         electric generating facility at a designated location
15         in Illinois. "New electric generating facility", for
16         purposes of this Section, means a newly-constructed
17         electric generation plant or a newly-constructed
18         generation capacity expansion at an existing electric
19         generation plant, including the transmission lines and
20         associated equipment that transfers electricity from
21         points of supply to points of delivery, and for which
22         such new foundation construction commenced not sooner
23         than July 1, 2001. Such facility shall be designed to
24         provide baseload electric generation and shall operate
25         on a continuous basis throughout the year; and (i)
26         shall have an aggregate rated generating capacity of at
27         least 1,000 megawatts for all new units at one site if
28         it uses natural gas as its primary fuel and foundation
29         construction of the facility is commenced on or before
30         December 31, 2004, or shall have an aggregate rated
31         generating capacity of at least 400 megawatts for all
32         new units at one site if it uses coal or gases derived
33         from coal as its primary fuel and shall support the
34         creation of at least 150 new Illinois coal mining jobs,

 

 

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1         or, (ii) shall be is (i) funded through a federal
2         Department of Energy grant before July 1, 2006 and
3         shall support the creation of Illinois coal-mining
4         jobs, or (iii) shall use 2005, and (ii) uses coal
5         gasification or integrated gasification-combined cycle
6         units that generate electricity or chemicals, or both,
7         and shall support the creation of Illinois coal-mining
8         jobs. The business must certify in writing that the
9         investments necessary to establish a new electric
10         generating facility would not be placed in service and
11         the job creation in the case of a coal-fueled plant
12         would not occur without the tax credits and exemptions
13         set forth in subsection (b-5) of this Section. The term
14         "placed in service" has the same meaning as described
15         in subsection (h) of Section 201 of the Illinois Income
16         Tax Act; or
17             (B-5) the business intends to establish a new
18         gasification facility at a designated location in
19         Illinois. As used in this Section, "new gasification
20         facility" means a newly constructed coal gasification
21         facility that generates chemical feedstocks or
22         transportation fuels derived from coal (which may
23         include, but are not limited to, methane, methanol, and
24         nitrogen fertilizer), that supports the creation or
25         retention of Illinois coal-mining jobs, and that
26         qualifies for financial assistance from the Department
27         before December 31, 2006. A new gasification facility
28         does not include a pilot project located within
29         Jefferson County or within a county adjacent to
30         Jefferson County for synthetic natural gas from coal;
31         or
32             (C) the business intends to establish production
33         operations at a new coal mine, re-establish production
34         operations at a closed coal mine, or expand production

 

 

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1         at an existing coal mine at a designated location in
2         Illinois not sooner than July 1, 2001; provided that
3         the production operations result in the creation of 150
4         new Illinois coal mining jobs as described in
5         subdivision (a)(3)(B) of this Section, and further
6         provided that the coal extracted from such mine is
7         utilized as the predominant source for a new electric
8         generating facility. The business must certify in
9         writing that the investments necessary to establish a
10         new, expanded, or reopened coal mine would not be
11         placed in service and the job creation would not occur
12         without the tax credits and exemptions set forth in
13         subsection (b-5) of this Section. The term "placed in
14         service" has the same meaning as described in
15         subsection (h) of Section 201 of the Illinois Income
16         Tax Act; or
17             (D) the business intends to construct new
18         transmission facilities or upgrade existing
19         transmission facilities at designated locations in
20         Illinois, for which construction commenced not sooner
21         than July 1, 2001. For the purposes of this Section,
22         "transmission facilities" means transmission lines
23         with a voltage rating of 115 kilovolts or above,
24         including associated equipment, that transfer
25         electricity from points of supply to points of delivery
26         and that transmit a majority of the electricity
27         generated by a new electric generating facility
28         designated as a High Impact Business in accordance with
29         this Section. The business must certify in writing that
30         the investments necessary to construct new
31         transmission facilities or upgrade existing
32         transmission facilities would not be placed in service
33         without the tax credits and exemptions set forth in
34         subsection (b-5) of this Section. The term "placed in

 

 

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1         service" has the same meaning as described in
2         subsection (h) of Section 201 of the Illinois Income
3         Tax Act; and
4         (4) no later than 90 days after an application is
5     submitted, the Department shall notify the applicant of the
6     Department's determination of the qualification of the
7     proposed High Impact Business under this Section.
8     (b) Businesses designated as High Impact Businesses
9 pursuant to subdivision (a)(3)(A) of this Section shall qualify
10 for the credits and exemptions described in the following Acts:
11 Section 9-222 and Section 9-222.1A of the Public Utilities Act,
12 subsection (h) of Section 201 of the Illinois Income Tax Act,
13 and Section 1d of the Retailers' Occupation Tax Act; provided
14 that these credits and exemptions described in these Acts shall
15 not be authorized until the minimum investments set forth in
16 subdivision (a)(3)(A) of this Section have been placed in
17 service in qualified properties and, in the case of the
18 exemptions described in the Public Utilities Act and Section 1d
19 of the Retailers' Occupation Tax Act, the minimum full-time
20 equivalent jobs or full-time jobs set forth in subdivision
21 (a)(3)(A) of this Section have been created or retained.
22 Businesses designated as High Impact Businesses under this
23 Section shall also qualify for the exemption described in
24 Section 5l of the Retailers' Occupation Tax Act. The credit
25 provided in subsection (h) of Section 201 of the Illinois
26 Income Tax Act shall be applicable to investments in qualified
27 property as set forth in subdivision (a)(3)(A) of this Section.
28     (b-5) Businesses designated as High Impact Businesses
29 pursuant to subdivisions (a)(3)(B), (a)(3)(B-5), (a)(3)(C),
30 and (a)(3)(D) of this Section shall qualify for the credits and
31 exemptions described in the following Acts: Section 51 of the
32 Retailers' Occupation Tax Act, Section 9-222 and Section
33 9-222.1A of the Public Utilities Act, and subsection (h) of
34 Section 201 of the Illinois Income Tax Act; however, the

 

 

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1 credits and exemptions authorized under Section 9-222 and
2 Section 9-222.1A of the Public Utilities Act, and subsection
3 (h) of Section 201 of the Illinois Income Tax Act shall not be
4 authorized until the new electric generating facility, the new
5 gasification facility, the new transmission facility, or the
6 new, expanded, or reopened coal mine is operational, except
7 that a new electric generating facility whose primary fuel
8 source is natural gas is eligible only for the exemption under
9 Section 5l of the Retailers' Occupation Tax Act.
10     (c) High Impact Businesses located in federally designated
11 foreign trade zones or sub-zones are also eligible for
12 additional credits, exemptions and deductions as described in
13 the following Acts: Section 9-221 and Section 9-222.1 of the
14 Public Utilities Act; and subsection (g) of Section 201, and
15 Section 203 of the Illinois Income Tax Act.
16     (d) Existing Illinois businesses which apply for
17 designation as a High Impact Business must provide the
18 Department with the prospective plan for which 1,500 full-time
19 jobs would be eliminated in the event that the business is not
20 designated.
21     (e) New proposed facilities which apply for designation as
22 High Impact Business must provide the Department with proof of
23 alternative non-Illinois sites which would receive the
24 proposed investment and job creation in the event that the
25 business is not designated as a High Impact Business.
26     (f) In the event that a business is designated a High
27 Impact Business and it is later determined after reasonable
28 notice and an opportunity for a hearing as provided under the
29 Illinois Administrative Procedure Act, that the business would
30 have placed in service in qualified property the investments
31 and created or retained the requisite number of jobs without
32 the benefits of the High Impact Business designation, the
33 Department shall be required to immediately revoke the
34 designation and notify the Director of the Department of

 

 

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1 Revenue who shall begin proceedings to recover all wrongfully
2 exempted State taxes with interest. The business shall also be
3 ineligible for all State funded Department programs for a
4 period of 10 years.
5     (g) The Department shall revoke a High Impact Business
6 designation if the participating business fails to comply with
7 the terms and conditions of the designation.
8     (h) Prior to designating a business, the Department shall
9 provide the members of the General Assembly and Commission on
10 Government Forecasting and Accountability with a report
11 setting forth the terms and conditions of the designation and
12 guarantees that have been received by the Department in
13 relation to the proposed business being designated.
14 (Source: P.A. 92-12, eff. 7-1-01; 93-1064, eff. 1-13-05;
15 93-1067, eff. 1-15-05; revised 1-25-05.)
 
16     Section 99. Effective date. This Act takes effect upon
17 becoming law.".