Full Text of SB0698 95th General Assembly
SB0698 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB0698
Introduced 2/8/2007, by Sen. John M. Sullivan SYNOPSIS AS INTRODUCED: |
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35 ILCS 200/Art. 11 Div. 5 heading new |
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35 ILCS 200/11-180 new |
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35 ILCS 200/11-185 new |
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35 ILCS 200/11-190 new |
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35 ILCS 200/11-195 new |
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35 ILCS 200/11-200 new |
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35 ILCS 200/11-203 new |
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35 ILCS 200/11-205 new |
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35 ILCS 200/11-210 new |
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35 ILCS 200/11-215 new |
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Amends the Property Tax Code. Sets forth procedures for the valuation of property used for wind energy conversion systems based on kilowatt-hours of electricity produced. Effective immediately.
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FISCAL NOTE ACT MAY APPLY | |
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY |
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A BILL FOR
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SB0698 |
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Property Tax Code is amended by adding | 5 |
| Division 5 to Article 11 as follows: | 6 |
| (35 ILCS 200/Art. 11 Div. 5 heading new) | 7 |
| DIVISION 5. WIND ENERGY PRODUCTION | 8 |
| (35 ILCS 200/11-180 new) | 9 |
| Sec. 11-180. Legislative findings. The General Assembly | 10 |
| finds and declares that: | 11 |
| (1) it is desirable to develop both renewable and | 12 |
| alternative energy resources to obtain environmental | 13 |
| quality and public health benefit;
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| (2) the benefits of electricity from renewable and | 15 |
| alternative energy resources accrue to the public at large, | 16 |
| thus consumers and electric utilities and alternative | 17 |
| retail electric suppliers share an interest in developing | 18 |
| and using a significant level of these environmentally | 19 |
| preferable resources in the State's electricity supply | 20 |
| portfolio;
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| (3) encouraging energy efficiency will improve the | 22 |
| environmental quality and public health in the State of |
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| Illinois;
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| (4) wind energy is one alternative energy source that | 3 |
| can be used to provide electricity to utility consumers;
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| (5) some regions in the State are ideal locations for | 5 |
| wind energy system development;
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| (6) a consistent property valuation method must be used | 7 |
| statewide to ensure uniform, equitable assessments and to | 8 |
| create an equal distribution of the tax burden among | 9 |
| taxpayers, especially in taxing districts located in more | 10 |
| than one county; and | 11 |
| (7) the cost or market valuation methods for wind | 12 |
| energy systems result in valuations that are neither | 13 |
| uniform nor just and equal because of wide variations in | 14 |
| the production of energy from wind turbines, which are a | 15 |
| result of the uncertainty of the availability of wind for | 16 |
| energy production.
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| (35 ILCS 200/11-185 new) | 18 |
| Sec. 11-185. Definitions. For purposes of this Division 5: | 19 |
| "Wind energy conversion device" means any device | 20 |
| including, but not limited to, a wind charger, windmill, or | 21 |
| wind turbine that converts wind energy to a form of usable | 22 |
| energy. | 23 |
| "Wind energy conversion system" is all wind energy | 24 |
| conversion devices owned by a person who has executed a lease, | 25 |
| contract, or other written agreement or who has purchased or |
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| acquired property so that one or more wind energy conversion | 2 |
| devices can be erected, built, or otherwise installed on that | 3 |
| property. These devices do not need to be on contiguous parcels | 4 |
| of property to be considered a part of a total wind energy | 5 |
| conversion system.
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| (35 ILCS 200/11-190 new)
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| Sec. 11-190. Applicability. The provisions of this | 8 |
| Division 5 do not apply to wind energy conversion systems that | 9 |
| are owned by an individual strictly for personal use or to any | 10 |
| person that is otherwise exempt from taxation under the | 11 |
| Property Tax Code. For the purposes of this Section, "personal | 12 |
| use" means the use of any wind energy conversion system with a | 13 |
| nameplate capacity of less than 2 megawatts. | 14 |
| (35 ILCS 200/11-195 new) | 15 |
| Sec. 11-195. Platting requirements. Upon the completion of | 16 |
| construction, the owner of a wind energy conversion system, at | 17 |
| his or her own expense, shall cause the wind turbine facilities | 18 |
| to be platted by an Illinois registered land surveyor. The plat | 19 |
| must include access routes, together with a metes and bounds | 20 |
| description of the area surrounding each wind turbine. The | 21 |
| system owner must record the plat and deliver a copy of it to | 22 |
| the property owner and to the chief county assessment officer | 23 |
| within 60 days after the completion of the construction. Upon | 24 |
| receiving a copy of the plat, the chief county assessment |
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| officer must issue a separate parcel identification number or | 2 |
| numbers for the wind energy conversion system to apportion the | 3 |
| value to each taxing district in which the system is physically | 4 |
| located. | 5 |
| (35 ILCS 200/11-200 new) | 6 |
| Sec. 11-200. Wind energy conversion system size and | 7 |
| capacity. The Department must determine the total size of the | 8 |
| device. Unless the systems are interconnected with different | 9 |
| distribution systems, the nameplate capacity of one wind energy | 10 |
| conversion device must be combined with the nameplate capacity | 11 |
| of any other wind energy conversion device that is under common | 12 |
| ownership. In the case of a dispute, the Department must draw | 13 |
| all reasonable inferences in favor of combining the devices | 14 |
| into one system. In making a determination, the Department may | 15 |
| decide that 2 wind energy conversion devices or systems are | 16 |
| under common ownership when the underlying ownership structure | 17 |
| contains similar persons or entities, even if the ownership | 18 |
| shares differ. Wind energy conversion devices or systems are | 19 |
| not under common ownership solely because the same person or | 20 |
| entity provided equity financing for the systems. | 21 |
| (35 ILCS 200/11-203 new)
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| Sec. 11-203. Certification of electricity generated. For | 23 |
| each wind energy conversion system the Department, on or before | 24 |
| May 1 of each year, must certify to each chief county |
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| assessment officer for any county in which the system is | 2 |
| located the amount of kilowatt-hours of electricity generated | 3 |
| per turbine in the prior calendar year and the value of the | 4 |
| system per kilowatt-hour, as calculated under Section 11-210. | 5 |
| (35 ILCS 200/11-205 new) | 6 |
| Sec. 11-205. Method of valuation for wind energy conversion | 7 |
| systems. | 8 |
| (a) It is the policy of this State that, beginning on and | 9 |
| after January 1, 2007, a wind energy conversion system that is | 10 |
| used as an electric power source must be valued on the per | 11 |
| kilowatt-hour of electricity produced each calendar year. If, | 12 |
| however, a wind energy conversion system ceases to operate for | 13 |
| any reason, the minimum assessed value of the system is 10% of | 14 |
| the cost of replacing the system with a new wind energy | 15 |
| conversion system.
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| (b) On or before February 1 of each year, the owner of a | 17 |
| wind energy conversion system shall file a report with the | 18 |
| Department setting forth, for each system: | 19 |
| (1) the nameplate capacity; | 20 |
| (2) the total kilowatt-hours of electricity produced | 21 |
| per turbine during the previous calendar year; | 22 |
| (3) the amount of any federal income tax credit awarded | 23 |
| for electricity produced in the previous calendar year | 24 |
| under Section 45 of the Internal Revenue Code of 1986 for | 25 |
| electricity produced by the system; and |
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| (4) any other information that is deemed necessary by | 2 |
| the Department to enable it to comply with its | 3 |
| responsibilities under this Section. | 4 |
| The report under this subsection (b) must also include a | 5 |
| copy of any wind energy system's current power purchase | 6 |
| agreement with the purchaser of power that is generated at the | 7 |
| system. The Department must treat each such agreement as | 8 |
| confidential and proprietary information.
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| The Department must prescribe the form of the report. If an | 10 |
| owner of a wind energy conversion system subject to taxation | 11 |
| under this Division 5 does not file the report by the due date, | 12 |
| then the Department must determine the kilowatt-hours of | 13 |
| electricity produced based on the full nameplate capacity | 14 |
| certified by the Department.
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| (35 ILCS 200/11-210 new) | 16 |
| Sec. 11-210. Valuation. | 17 |
| (a) The Department shall value a wind energy conversion | 18 |
| system by using an income-capitalization approach. To | 19 |
| determine the fair-cash value of the system, the net operating | 20 |
| income is divided by the wind-energy capitalization rate. | 21 |
| (b) For the purposes of this Section: | 22 |
| "Net operating income" means an amount equal to | 23 |
| (1) the prevailing power purchase agreement rate per | 24 |
| kilowatt-hour multiplied by the number of kilowatt-hours | 25 |
| of electricity generated by the system in the previous |
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| calendar year; plus | 2 |
| (2) the amount of any federal income tax credit awarded | 3 |
| for electricity produced in the previous calendar year | 4 |
| under Section 45 of the Internal Revenue Code of 1986 for | 5 |
| electricity produced by the system; less | 6 |
| (3) the prevailing annual wind-energy expense per | 7 |
| kilowatt-hour multiplied by the number of kilowatt-hours | 8 |
| of electricity generated by the system in the previous | 9 |
| calendar year. | 10 |
| "Prevailing power purchase agreement rate per | 11 |
| kilowatt-hour" means the average power purchase agreement rate | 12 |
| for all of the wind energy conversion systems in the State | 13 |
| during the previous calendar year divided by the number of | 14 |
| kilowatt-hours of electricity generated by all of the wind | 15 |
| energy conversion systems in the State in the previous calendar | 16 |
| year.
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| "Prevailing wind-energy expense per kilowatt-hour" means | 18 |
| the average amount of expenses incurred from the operation of | 19 |
| all of the wind energy conversion systems in the State during | 20 |
| the previous calendar year divided by the number of | 21 |
| kilowatt-hours of electricity generated by all of the wind | 22 |
| energy conversion systems in the State in the previous calendar | 23 |
| year.
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| "Wind-energy capitalization rate" means a rate equal to the | 25 |
| sum of: (i) the capitalization rate for nondepreciating assets | 26 |
| that is used by the Department in farmland evaluation; (ii) the |
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| recapture rate, which is one divided by the typical life | 2 |
| expectancy of the system; and (iii) the average effective tax | 3 |
| rate in the State.
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| (c) The annual kilowatt-hours of electricity for the first | 5 |
| assessment year is determined by multiplying: (i) the nameplate | 6 |
| capacity per kilowatt-hour; (ii) the industry standard rate of | 7 |
| efficiency; and (iii) 8,760, which is the number of hours in | 8 |
| 365 days. | 9 |
| (35 ILCS 200/11-215 new) | 10 |
| Sec. 11-215. Assessments of wind energy conversion | 11 |
| systems. | 12 |
| (a) A wind energy conversion system must be assessed at 33 | 13 |
| 1/3% of the fair cash value determined under Section 11-210. | 14 |
| The chief county assessment officer shall apportion the value | 15 |
| to each wind energy conversion parcel in which the wind energy | 16 |
| system is physically located. | 17 |
| (b) A wind energy conversion system is not subject to | 18 |
| equalization by the Department, the county, or the board of | 19 |
| review.
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| Section 99. Effective date. This Act takes effect upon | 21 |
| becoming law.
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