Full Text of SB2095 95th General Assembly
SB2095 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB2095
Introduced 2/14/2008, by Sen. John J. Cullerton 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. Requires at least 15% of a nuclear decommissioning trust's funds to be invested in Illinois-based companies whose businesses are primarily devoted to (A) developing new technologies for producing or storing renewable energy or (B) reducing electricity usage. Provides an exception if a nuclear power plant is actively being decommissioned. Provides that an investment of the funds in a nuclear decommissioning trust fund shall be deemed prudent if it meets the prudent investor standards under specified federal regulations.
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A BILL FOR
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SB2095 |
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LRB095 19296 AMC 45588 b |
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| AN ACT concerning regulation.
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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 Public Utilities Act is amended by changing | 5 |
| Section 8-508.1 as follows:
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| (220 ILCS 5/8-508.1) (from Ch. 111 2/3, par. 8-508.1)
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| Sec. 8-508.1. (a) As used in this Section:
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| (1) "Decommissioning" means 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
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| 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.
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| (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
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| incurred in connection with the preparation for | 23 |
| decommissioning, such as
engineering and other planning |
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LRB095 19296 AMC 45588 b |
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| 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
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| machinery, construction equipment or apparatus the cost of | 5 |
| which was
charged as a decommissioning expense.
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| (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.
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| (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.
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| (5) "Illinois-based company" means a company that is | 17 |
| incorporated under the laws of Illinois or whose corporate | 18 |
| headquarters are located in Illinois. | 19 |
| (6) "Renewable energy" means energy sources that are | 20 |
| replenished by natural processes on a sufficiently rapid time | 21 |
| scale. | 22 |
| (b) By 90 days after the effective date of this amendatory | 23 |
| Act of 1988,
or by the date that the unit satisfies the | 24 |
| criteria used by the Internal
Revenue Service for determining | 25 |
| when depreciation commences for federal
income tax purposes on | 26 |
| a new generating unit, whichever is later, every
public utility |
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LRB095 19296 AMC 45588 b |
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| that owns or operates, in whole or in part, a nuclear
power | 2 |
| plant shall:
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| (1) establish 2 decommissioning trusts, which shall be a | 4 |
| "tax qualified"
decommissioning trust and a "non-tax | 5 |
| qualified" decommissioning trust and
shall hold the | 6 |
| decommissioning funds established by the public utility for
all | 7 |
| nuclear power plants pursuant to subsection (b)(2) of this | 8 |
| Section;
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| (2) establish 2 decommissioning funds for each such plant, | 10 |
| each of which
shall be held for a plant as a separate account | 11 |
| in a decommissioning trust; and
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| (3) designate an independent trustee, subject to the | 13 |
| approval of the
Commission, to administer each of the | 14 |
| decommissioning trusts.
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| (c) The 2 decommissioning trusts shall be known as the "tax | 16 |
| qualified"
decommissioning trust and the "non-tax qualified" | 17 |
| decommissioning trust
respectively. Each trust shall be | 18 |
| established and maintained as follows:
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| (1) The "tax qualified" trust shall be established and | 20 |
| maintained in
accordance with Section 468A of the Internal | 21 |
| Revenue Code of 1986 or any
successor thereto and shall be | 22 |
| funded by the public utility for each such
power plant through | 23 |
| annual payments by the public utility that shall not
exceed the | 24 |
| maximum amount allowable as a deduction for federal income tax
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| purposes for the year for which the payments were made, in | 26 |
| accordance with
Section 468A of the Internal Revenue Code of |
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| 1986 or any successor thereto.
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| (2) The "non-tax qualified" decommissioning trust shall be | 3 |
| funded by
the public utility for each such power plant through | 4 |
| annual payments by the
public utility that shall consist of the | 5 |
| difference between the total
amounts of decommissioning | 6 |
| expenses collected after the effective date of
this amendatory | 7 |
| Act of 1988 through rates and charges from the public
utility's | 8 |
| customers as provided by the Commission minus the amounts
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| contributed to the "tax qualified" trust as provided by | 10 |
| subsection (c)(1)
of this Section and deductible for federal | 11 |
| income tax purposes in
accordance with Section 468A of the | 12 |
| Internal Revenue Code of 1986 or any
successor thereto.
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| (3) The following restrictions shall apply in regard to | 14 |
| administration
of each decommissioning trust:
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| (i) Distributions may be made from a nuclear | 16 |
| decommissioning trust only
to satisfy the liabilities of the | 17 |
| public utility for nuclear
decommissioning costs relating to | 18 |
| the nuclear power plant for which the
decommissioning fund was | 19 |
| established and to pay administrative costs,
income taxes and | 20 |
| other incidental expenses of the trust.
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| (ii) Any assets in a nuclear decommissioning trust that | 22 |
| exceed the
amount necessary to pay the nuclear decommissioning | 23 |
| costs of the nuclear
power plant for which the decommissioning | 24 |
| fund was established shall be
refunded to the public utility | 25 |
| that established the fund for the purpose of
refunds or | 26 |
| credits, as soon as practicable, to the utility's customers.
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| (iii) In the event a public utility sells or otherwise | 2 |
| disposes of its
direct ownership interest, or any part thereof, | 3 |
| in a nuclear power plant
with respect to which a nuclear | 4 |
| decommissioning fund has been established,
the assets of the | 5 |
| fund shall be distributed to the public utility to the
extent | 6 |
| of the reductions in its liability for future decommissioning | 7 |
| after
taking into account the liabilities of the public utility | 8 |
| for future
decommissioning of such nuclear power plant and the | 9 |
| liabilities that have
been assumed by another entity. The | 10 |
| public utility shall, as soon as
practicable, provide refunds | 11 |
| or credits to its customers representing the
full amount of the | 12 |
| reductions in its liability for future decommissioning.
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| (iv) The trustee shall invest the "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, subject to the | 17 |
| limitations specified in Section 468A of the
Internal Revenue | 18 |
| Code of 1986 or any successor thereto. For the purposes of this | 19 |
| item (iv), an investment shall be deemed a prudent investment | 20 |
| if it meets the prudent investor standards under 10 C.F.R. | 21 |
| 50.75 and 18 C.F.R. 35.32(a).
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| (v) The trustee shall invest the "non-tax qualified" trust | 23 |
| assets only
in secure assets that are prudent investments for | 24 |
| assets held in trust and
in such a way as to attempt to | 25 |
| maximize the after-tax return on funds
invested. However the | 26 |
| trustee shall not invest any portion of the "non-tax
qualified" |
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| trust's funds in the securities or assets of any operator of a
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| nuclear power plant. For the purposes of this item (v), an | 3 |
| investment shall be deemed a prudent investment if it meets the | 4 |
| prudent investor standards under 10 C.F.R. 50.75 and 18 C.F.R. | 5 |
| 35.32(a).
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| (vi) The "non-tax qualified" trust shall be subject to the | 7 |
| prohibitions
against self-dealing applicable to the "tax | 8 |
| qualified" trust as specified
in Section 468A of the Internal | 9 |
| Revenue Code of 1986, or any successor thereto.
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| (vii) All income earned by the trust's funds shall become a | 11 |
| part of the
trust's funds and subject to the provisions of this | 12 |
| Section.
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| (viii) At least 15% of the trust's funds must be invested | 14 |
| in Illinois-based companies whose businesses are primarily | 15 |
| devoted to (A) developing new technologies for producing or | 16 |
| storing renewable energy or (B) reducing electricity usage, | 17 |
| including without limitation companies that manufacture energy | 18 |
| conservation items such as hybrid automobiles, green | 19 |
| lightbulbs, and Leadership in Energy and Environmental Design | 20 |
| certified green buildings. If a plant is actively being | 21 |
| decommissioned, then this requirement is waived for that | 22 |
| plant's funds, but only during the time that the plant is | 23 |
| actively being decommissioned. | 24 |
| (ix) The Commission may adopt by rule or regulation such | 25 |
| further
restrictions as it deems necessary for the sound | 26 |
| management of the trust's
funds, consistent with the purposes |
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| of this Section.
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| (d) By 90 days after the effective date of this amendatory | 3 |
| Act of 1988,
the Commission shall determine an appropriate | 4 |
| method to segregate, either
internally or externally, all | 5 |
| decommissioning funds collected prior to the
effective date of | 6 |
| this amendatory Act of 1988 by the utility from its
customers, | 7 |
| and shall order any change in past decommissioning funding
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| methods that the Commission finds necessary. In making its | 9 |
| determination
of the appropriate funding method, the | 10 |
| Commission shall give consideration
to, but not be limited by, | 11 |
| all applicable federal regulations. The change
in funding | 12 |
| method shall be phased-in over an appropriate period of time.
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| (e) The trustee of a trust shall report annually to the | 14 |
| Commission, or
more frequently if ordered by the Commission. | 15 |
| The report shall include:
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| (1) the trust's State and federal tax returns;
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| (2) a report on the trust's portfolio of investments and | 18 |
| the return thereon;
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| (3) the date and amount of payments received by the trust | 20 |
| from the public utility;
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| (4) a copy of all correspondence between the trust and the | 22 |
| Internal Revenue Service; and
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| (5) any other information the Commission orders the trust | 24 |
| to provide.
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| (f) A nuclear decommissioning trust established pursuant | 26 |
| to this Section
shall be exempt from taxation in Illinois.
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| (Source: P.A. 85-1400.)
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