Illinois General Assembly - Full Text of SB1851
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Full Text of SB1851  101st General Assembly




State of Illinois
2019 and 2020


Introduced 2/15/2019, by Sen. Sue Rezin


220 ILCS 5/8-508.1  from Ch. 111 2/3, par. 8-508.1

    Amends the Public Utilities Act. Makes a technical change in the definition of "decommissioning".

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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Public Utilities Act is amended by changing
5Section 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
9undertaken at the time a nuclear power plant is permanently
10retired from service to ensure that the final entombment,
11decontamination, dismantlement, removal and disposal of the
12plant, including the plant site, and of any radioactive
13components and materials associated with the plant, is
14accomplished in compliance with all applicable Illinois and
15federal laws, and to ensure that such final disposition does
16not pose any threat to the public health and safety.
17    (2) "Decommissioning costs" means all reasonable costs and
18expenses incurred in connection with the entombment,
19decontamination, dismantlement, removal and disposal of the
20structures, systems and components of a nuclear power plant at
21the time of decommissioning, including all expenses to be
22incurred in connection with the preparation for
23decommissioning, such as engineering and other planning



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1expenses, and to be incurred after the actual decommissioning
2occurs, such as physical security and radiation monitoring
3expenses, less proceeds of insurance, salvage or resale of
4machinery, construction equipment or apparatus the cost of
5which was charged as a decommissioning expense.
6    (3) "Decommissioning trust" or "trust" means a fiduciary
7account in a bank or other financial institution established to
8hold the decommissioning funds provided pursuant to subsection
9(b)(2) of this Section for the eventual purpose of paying
10decommissioning costs, which shall be separate from all other
11accounts and assets of the public utility establishing the
13    (4) "Nuclear power plant" or "plant" means a nuclear
14fission thermal power plant. Each unit of a multi-unit site
15shall be considered a separate plant.
16    (b) By 90 days after the effective date of this amendatory
17Act of 1988, or by the date that the unit satisfies the
18criteria used by the Internal Revenue Service for determining
19when depreciation commences for federal income tax purposes on
20a new generating unit, whichever is later, every public utility
21that owns or operates, in whole or in part, a nuclear power
22plant shall:
23    (1) establish 2 decommissioning trusts, which shall be a
24"tax qualified" decommissioning trust and a "non-tax
25qualified" decommissioning trust and shall hold the
26decommissioning funds established by the public utility for all



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1nuclear power plants pursuant to subsection (b)(2) of this
3    (2) establish 2 decommissioning funds for each such plant,
4each of which shall be held for a plant as a separate account
5in a decommissioning trust; and
6    (3) designate an independent trustee, subject to the
7approval of the Commission, to administer each of the
8decommissioning trusts.
9    (c) The 2 decommissioning trusts shall be known as the "tax
10qualified" decommissioning trust and the "non-tax qualified"
11decommissioning trust respectively. Each trust shall be
12established and maintained as follows:
13    (1) The "tax qualified" trust shall be established and
14maintained in accordance with Section 468A of the Internal
15Revenue Code of 1986 or any successor thereto and shall be
16funded by the public utility for each such power plant through
17annual payments by the public utility that shall not exceed the
18maximum amount allowable as a deduction for federal income tax
19purposes for the year for which the payments were made, in
20accordance with Section 468A of the Internal Revenue Code of
211986 or any successor thereto.
22    (2) The "non-tax qualified" decommissioning trust shall be
23funded by the public utility for each such power plant through
24annual payments by the public utility that shall consist of the
25difference between the total amounts of decommissioning
26expenses collected after the effective date of this amendatory



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1Act of 1988 through rates and charges from the public utility's
2customers as provided by the Commission minus the amounts
3contributed to the "tax qualified" trust as provided by
4subsection (c)(1) of this Section and deductible for federal
5income tax purposes in accordance with Section 468A of the
6Internal Revenue Code of 1986 or any successor thereto.
7    (3) The following restrictions shall apply in regard to
8administration of each decommissioning trust:
9    (i) Distributions may be made from a nuclear
10decommissioning trust only to satisfy the liabilities of the
11public utility for nuclear decommissioning costs relating to
12the nuclear power plant for which the decommissioning fund was
13established and to pay administrative costs, income taxes and
14other incidental expenses of the trust.
15    (ii) Any assets in a nuclear decommissioning trust that
16exceed the amount necessary to pay the nuclear decommissioning
17costs of the nuclear power plant for which the decommissioning
18fund was established shall be refunded to the public utility
19that established the fund for the purpose of refunds or
20credits, as soon as practicable, to the utility's customers.
21    (iii) In the event a public utility sells or otherwise
22disposes of its direct ownership interest, or any part thereof,
23in a nuclear power plant with respect to which a nuclear
24decommissioning fund has been established, the assets of the
25fund shall be distributed to the public utility to the extent
26of the reductions in its liability for future decommissioning



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1after taking into account the liabilities of the public utility
2for future decommissioning of such nuclear power plant and the
3liabilities that have been assumed by another entity. The
4public utility shall, as soon as practicable, provide refunds
5or credits to its customers representing the full amount of the
6reductions in its liability for future decommissioning.
7    (iv) The trustee shall invest the "tax qualified" trust
8assets only in secure assets that are prudent investments for
9assets held in trust and in such a way as to attempt to
10maximize the after-tax return on funds invested, subject to the
11limitations specified in Section 468A of the Internal Revenue
12Code of 1986 or any successor thereto.
13    (v) The trustee shall invest the "non-tax qualified" trust
14assets only in secure assets that are prudent investments for
15assets held in trust and in such a way as to attempt to
16maximize the after-tax return on funds invested. However the
17trustee shall not invest any portion of the "non-tax qualified"
18trust's funds in the securities or assets of any operator of a
19nuclear power plant.
20    (vi) The "non-tax qualified" trust shall be subject to the
21prohibitions against self-dealing applicable to the "tax
22qualified" trust as specified in Section 468A of the Internal
23Revenue Code of 1986, or any successor thereto.
24    (vii) All income earned by the trust's funds shall become a
25part of the trust's funds and subject to the provisions of this



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1    (viii) The Commission may adopt by rule or regulation such
2further restrictions as it deems necessary for the sound
3management of the trust's funds, consistent with the purposes
4of this Section.
5    (d) By 90 days after the effective date of this amendatory
6Act of 1988, the Commission shall determine an appropriate
7method to segregate, either internally or externally, all
8decommissioning funds collected prior to the effective date of
9this amendatory Act of 1988 by the utility from its customers,
10and shall order any change in past decommissioning funding
11methods that the Commission finds necessary. In making its
12determination of the appropriate funding method, the
13Commission shall give consideration to, but not be limited by,
14all applicable federal regulations. The change in funding
15method shall be phased-in over an appropriate period of time.
16    (e) The trustee of a trust shall report annually to the
17Commission, or more frequently if ordered by the Commission.
18The 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
21the return thereon;
22    (3) the date and amount of payments received by the trust
23from the public utility;
24    (4) a copy of all correspondence between the trust and the
25Internal Revenue Service; and
26    (5) any other information the Commission orders the trust



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1to provide.
2    (f) A nuclear decommissioning trust established pursuant
3to this Section shall be exempt from taxation in Illinois.
4(Source: P.A. 85-1400.)