Full Text of SB1851 101st General Assembly
SB1851 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 SB1851 Introduced 2/15/2019, by Sen. Sue Rezin SYNOPSIS AS INTRODUCED: |
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220 ILCS 5/8-508.1 | from Ch. 111 2/3, par. 8-508.1 |
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Amends the Public Utilities Act. Makes a technical change in the definition of "decommissioning".
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Public Utilities Act is amended by changing | 5 | | Section 8-508.1 as follows:
| 6 | | (220 ILCS 5/8-508.1) (from Ch. 111 2/3, par. 8-508.1)
| 7 | | Sec. 8-508.1. (a) As used in this Section:
| 8 | | (1) "Decommissioning" means the the series of activities | 9 | | undertaken at the
time a nuclear power plant is permanently | 10 | | retired from service to ensure
that the final entombment, | 11 | | decontamination, dismantlement, removal and
disposal of the | 12 | | plant, including the plant site, and of any radioactive
| 13 | | components and materials associated with the plant, is | 14 | | accomplished in
compliance with all applicable Illinois and | 15 | | federal laws, and to ensure
that such final disposition does | 16 | | not pose any threat to the public health
and safety.
| 17 | | (2) "Decommissioning costs" means all reasonable costs and | 18 | | expenses
incurred in connection with the entombment, | 19 | | decontamination, dismantlement,
removal and disposal of the | 20 | | structures, systems and components of a nuclear
power plant at | 21 | | the time of decommissioning, including all expenses to be
| 22 | | incurred in connection with the preparation for | 23 | | decommissioning, such as
engineering and other planning |
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| 1 | | expenses, and to be incurred after the
actual decommissioning | 2 | | occurs, such as physical security and radiation
monitoring | 3 | | expenses, less proceeds of insurance, salvage or resale of
| 4 | | machinery, construction equipment or apparatus the cost of | 5 | | which was
charged as a decommissioning expense.
| 6 | | (3) "Decommissioning trust" or "trust" means a fiduciary | 7 | | account in a
bank or other financial institution established to | 8 | | hold the decommissioning
funds provided pursuant to subsection | 9 | | (b)(2) of this Section for the
eventual purpose of paying | 10 | | decommissioning costs, which shall be separate
from all other | 11 | | accounts and assets of the public utility establishing the | 12 | | trust.
| 13 | | (4) "Nuclear power plant" or "plant" means a nuclear | 14 | | fission thermal
power plant. Each unit of a multi-unit site | 15 | | shall be considered a separate plant.
| 16 | | (b) By 90 days after the effective date of this amendatory | 17 | | Act of 1988,
or by the date that the unit satisfies the | 18 | | criteria used by the Internal
Revenue Service for determining | 19 | | when depreciation commences for federal
income tax purposes on | 20 | | a new generating unit, whichever is later, every
public utility | 21 | | that owns or operates, in whole or in part, a nuclear
power | 22 | | plant shall:
| 23 | | (1) establish 2 decommissioning trusts, which shall be a | 24 | | "tax qualified"
decommissioning trust and a "non-tax | 25 | | qualified" decommissioning trust and
shall hold the | 26 | | decommissioning funds established by the public utility for
all |
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| 1 | | nuclear power plants pursuant to subsection (b)(2) of this | 2 | | Section;
| 3 | | (2) establish 2 decommissioning funds for each such plant, | 4 | | each of which
shall be held for a plant as a separate account | 5 | | in a decommissioning trust; and
| 6 | | (3) designate an independent trustee, subject to the | 7 | | approval of the
Commission, to administer each of the | 8 | | decommissioning trusts.
| 9 | | (c) The 2 decommissioning trusts shall be known as the "tax | 10 | | qualified"
decommissioning trust and the "non-tax qualified" | 11 | | decommissioning trust
respectively. Each trust shall be | 12 | | established and maintained as follows:
| 13 | | (1) The "tax qualified" trust shall be established and | 14 | | maintained in
accordance with Section 468A of the Internal | 15 | | Revenue Code of 1986 or any
successor thereto and shall be | 16 | | funded by the public utility for each such
power plant through | 17 | | annual payments by the public utility that shall not
exceed the | 18 | | maximum amount allowable as a deduction for federal income tax
| 19 | | purposes for the year for which the payments were made, in | 20 | | accordance with
Section 468A of the Internal Revenue Code of | 21 | | 1986 or any successor thereto.
| 22 | | (2) The "non-tax qualified" decommissioning trust shall be | 23 | | funded by
the public utility for each such power plant through | 24 | | annual payments by the
public utility that shall consist of the | 25 | | difference between the total
amounts of decommissioning | 26 | | expenses collected after the effective date of
this amendatory |
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| 1 | | Act of 1988 through rates and charges from the public
utility's | 2 | | customers as provided by the Commission minus the amounts
| 3 | | contributed to the "tax qualified" trust as provided by | 4 | | subsection (c)(1)
of this Section and deductible for federal | 5 | | income tax purposes in
accordance with Section 468A of the | 6 | | Internal Revenue Code of 1986 or any
successor thereto.
| 7 | | (3) The following restrictions shall apply in regard to | 8 | | administration
of each decommissioning trust:
| 9 | | (i) Distributions may be made from a nuclear | 10 | | decommissioning trust only
to satisfy the liabilities of the | 11 | | public utility for nuclear
decommissioning costs relating to | 12 | | the nuclear power plant for which the
decommissioning fund was | 13 | | established and to pay administrative costs,
income taxes and | 14 | | other incidental expenses of the trust.
| 15 | | (ii) Any assets in a nuclear decommissioning trust that | 16 | | exceed the
amount necessary to pay the nuclear decommissioning | 17 | | costs of the nuclear
power plant for which the decommissioning | 18 | | fund was established shall be
refunded to the public utility | 19 | | that established the fund for the purpose of
refunds or | 20 | | credits, as soon as practicable, to the utility's customers.
| 21 | | (iii) In the event a public utility sells or otherwise | 22 | | disposes of its
direct ownership interest, or any part thereof, | 23 | | in a nuclear power plant
with respect to which a nuclear | 24 | | decommissioning fund has been established,
the assets of the | 25 | | fund shall be distributed to the public utility to the
extent | 26 | | of the reductions in its liability for future decommissioning |
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| 1 | | after
taking into account the liabilities of the public utility | 2 | | for future
decommissioning of such nuclear power plant and the | 3 | | liabilities that have
been assumed by another entity. The | 4 | | public utility shall, as soon as
practicable, provide refunds | 5 | | or credits to its customers representing the
full amount of the | 6 | | reductions in its liability for future decommissioning.
| 7 | | (iv) The trustee shall invest the "tax qualified" trust | 8 | | assets only in
secure assets that are prudent investments for | 9 | | assets held in trust and in
such a way as to attempt to | 10 | | maximize the after-tax return on funds
invested, subject to the | 11 | | limitations specified in Section 468A of the
Internal Revenue | 12 | | Code of 1986 or any successor thereto.
| 13 | | (v) The trustee shall invest the "non-tax qualified" trust | 14 | | assets only
in secure assets that are prudent investments for | 15 | | assets held in trust and
in such a way as to attempt to | 16 | | maximize the after-tax return on funds
invested. However the | 17 | | trustee shall not invest any portion of the "non-tax
qualified" | 18 | | trust's funds in the securities or assets of any operator of a
| 19 | | nuclear power plant.
| 20 | | (vi) The "non-tax qualified" trust shall be subject to the | 21 | | prohibitions
against self-dealing applicable to the "tax | 22 | | qualified" trust as specified
in Section 468A of the Internal | 23 | | Revenue Code of 1986, or any successor thereto.
| 24 | | (vii) All income earned by the trust's funds shall become a | 25 | | part of the
trust's funds and subject to the provisions of this | 26 | | Section.
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| 1 | | (viii) The Commission may adopt by rule or regulation such | 2 | | further
restrictions as it deems necessary for the sound | 3 | | management of the trust's
funds, consistent with the purposes | 4 | | of this Section.
| 5 | | (d) By 90 days after the effective date of this amendatory | 6 | | Act of 1988,
the Commission shall determine an appropriate | 7 | | method to segregate, either
internally or externally, all | 8 | | decommissioning funds collected prior to the
effective date of | 9 | | this amendatory Act of 1988 by the utility from its
customers, | 10 | | and shall order any change in past decommissioning funding
| 11 | | methods that the Commission finds necessary. In making its | 12 | | determination
of the appropriate funding method, the | 13 | | Commission shall give consideration
to, but not be limited by, | 14 | | all applicable federal regulations. The change
in funding | 15 | | method shall be phased-in over an appropriate period of time.
| 16 | | (e) The trustee of a trust shall report annually to the | 17 | | Commission, or
more frequently if ordered by the Commission. | 18 | | The report shall include:
| 19 | | (1) the trust's State and federal tax returns;
| 20 | | (2) a report on the trust's portfolio of investments and | 21 | | the return thereon;
| 22 | | (3) the date and amount of payments received by the trust | 23 | | from the public utility;
| 24 | | (4) a copy of all correspondence between the trust and the | 25 | | Internal Revenue Service; and
| 26 | | (5) any other information the Commission orders the trust |
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| 1 | | to provide.
| 2 | | (f) A nuclear decommissioning trust established pursuant | 3 | | to this Section
shall be exempt from taxation in Illinois.
| 4 | | (Source: P.A. 85-1400.)
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