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92_SB0724enr SB724 Enrolled LRB9207881JScs 1 AN ACT concerning public utilities. 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 5 changing Section 8-403.1 as follows: 6 (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1) 7 Sec. 8-403.1. Electricity purchased from qualified solid 8 waste energy facility; tax credit; distributions for economic 9 development. 10 (a) It is hereby declared to be the policy of this State 11 to encourage the development of alternate energy production 12 facilities in order to conserve our energy resources and to 13 provide for their most efficient use. 14 (b) For the purpose of this Section and Section 9-215.1, 15 "qualified solid waste energy facility" means a facility 16 determined by the Illinois Commerce Commission to qualify as 17 such under the Local Solid Waste Disposal Act, to use methane 18 gas generated from landfills as its primary fuel, and to 19 possess characteristics that would enable it to qualify as a 20 cogeneration or small power production facility under federal 21 law. 22 (c) In furtherance of the policy declared in this 23 Section, the Illinois Commerce Commission shall require 24 electric utilities to enter into long-term contracts to 25 purchase electricity from qualified solid waste energy 26 facilities located in the electric utility's service area, 27 for a period beginning on the date that the facility begins 28 generating electricity and having a duration of not less than 29 10 years in the case of facilities fueled by 30 landfill-generated methane, or 20 years in the case of 31 facilities fueled by methane generated from a landfill owned SB724 Enrolled -2- LRB9207881JScs 1 by a forest preserve district. The purchase rate contained 2 in such contracts shall be equal to the average amount per 3 kilowatt-hour paid from time to time by the unit or units of 4 local government in which the electricity generating 5 facilities are located, excluding amounts paid for street 6 lighting and pumping service. 7 (d) Whenever a public utility is required to purchase 8 electricity pursuant to subsection (c) above, it shall be 9 entitled to credits in respect of its obligations to remit to 10 the State taxes it has collected under the Electricity Excise 11 Tax Law equal to the amounts, if any, by which payments for 12 such electricity exceed (i) the then current rate at which 13 the utility must purchase the output of qualified facilities 14 pursuant to the federal Public Utility Regulatory Policies 15 Act of 1978, less (ii) any costs, expenses, losses, damages 16 or other amounts incurred by the utility, or for which it 17 becomes liable, arising out of its failure to obtain such 18 electricity from such other sources. The amount of any such 19 credit shall, in the first instance, be determined by the 20 utility, which shall make a monthly report of such credits to 21 the Illinois Commerce Commission and, on its monthly tax 22 return, to the Illinois Department of Revenue. Under no 23 circumstances shall a utility be required to purchase 24 electricity from a qualified solid waste energy facility at 25 the rate prescribed in subsection (c) of this Section if such 26 purchase would result in estimated tax credits that exceed, 27 on a monthly basis, the utility's estimated obligation to 28 remit to the State taxes it has collected under the 29 Electricity Excise Tax Law. The owner or operator shall 30 negotiate facility operating conditions with the purchasing 31 utility in accordance with that utility's posted standard 32 terms and conditions for small power producers. If the 33 Department of Revenue disputes the amount of any such credit, 34 such dispute shall be decided by the Illinois Commerce SB724 Enrolled -3- LRB9207881JScs 1 Commission. Whenever a qualified solid waste energy facility 2 has paid or otherwise satisfied in full the capital costs or 3 indebtedness incurred in developing and implementing the 4 qualified facility, the qualified facility shall reimburse 5 the Public Utility Fund and the General Revenue Fund in the 6 State treasury for the actual reduction in payments to those 7 Funds caused by this subsection (d) in a manner to be 8 determined by the Illinois Commerce Commission and based on 9 the manner in which revenues for those Funds were reduced. 10 (e) The Illinois Commerce Commission shall not require 11 an electric utility to purchase electricity from any 12 qualified solid waste energy facility which is owned or 13 operated by an entity that is primarily engaged in the 14 business of producing or selling electricity, gas, or useful 15 thermal energy from a source other than one or more qualified 16 solid waste energy facilities. 17 (f) This Section does not require an electric utility to 18 construct additional facilities unless those facilities are 19 paid for by the owner or operator of the affected qualified 20 solid waste energy facility. 21 (g) The Illinois Commerce Commission shall require that: 22 (1) electric utilities use the electricity purchased from a 23 qualified solid waste energy facility to displace electricity 24 generated from nuclear power or coal mined and purchased 25 outside the boundaries of the State of Illinois before 26 displacing electricity generated from coal mined and 27 purchased within the State of Illinois, to the extent 28 possible, and (2) electric utilities report annually to the 29 Commission on the extent of such displacements. 30 (h) Nothing in this Section is intended to cause an 31 electric utility that is required to purchase power hereunder 32 to incur any economic loss as a result of its purchase. All 33 amounts paid for power which a utility is required to 34 purchase pursuant to subparagraph (c) shall be deemed to be SB724 Enrolled -4- LRB9207881JScs 1 costs prudently incurred for purposes of computing charges 2 under rates authorized by Section 9-220 of this Act. Tax 3 credits provided for herein shall be reflected in charges 4 made pursuant to rates so authorized to the extent such 5 credits are based upon a cost which is also reflected in such 6 charges. 7 (i) Beginning in February 1999 and through January 2009, 8 each qualified solid waste energy facility that sells 9 electricity to an electric utility at the purchase rate 10 described in subsection (c) shall file with the Department of 11 Revenue on or before the 15th of each month a form, 12 prescribed by the Department of Revenue, that states the 13 number of kilowatt hours of electricity for which payment was 14 received at that purchase rate from electric utilities in 15 Illinois during the immediately preceding month. This form 16 shall be accompanied by a payment from the qualified solid 17 waste energy facility in an amount equal to six-tenths of a 18 mill ($0.0006) per kilowatt hour of electricity stated on the 19 form. Beginning on the effective date of this amendatory Act 20 of the 92nd General Assembly, a qualified solid waste energy 21 facility must file the form required under this subsection 22 (i) before the 15th of each month regardless of whether the 23 facility received any payment in the previous month. Payments 24 received by the Department of Revenue shall be deposited into 25 the Municipal Economic Development Fund, a trust fund created 26 outside the State treasury. The State Treasurer may invest 27 the moneys in the Fund in any investment authorized by the 28 Public Funds Investment Act, and investment income shall be 29 deposited into and become part of the Fund. Moneys in the 30 Fund shall be used by the State Treasurer as provided in 31 subsection (j). The obligation of a qualified solid waste 32 energy facility to make payments into the Municipal Economic 33 Development Fund shall terminate upon either: (1) expiration 34 or termination of a facility's contract to sell electricity SB724 Enrolled -5- LRB9207881JScs 1 to an electric utility at the purchase rate described in 2 subsection (c); or (2) entry of an enforceable, final, and 3 non-appealable order by a court of competent jurisdiction 4 that Public Act 89-448 is invalid. Payments by a qualified 5 solid waste energy facility into the Municipal Economic 6 Development Fund do not relieve the qualified solid waste 7 energy facility of its obligation to reimburse the Public 8 Utility Fund and the General Revenue Fund for the actual 9 reduction in payments to those Funds as a result of credits 10 received by electric utilities under subsection (d). 11 A qualified solid waste energy facility that fails to 12 timely file the requisite form and payment as required by 13 this subsection (i) shall be subject to penalties and 14 interest in conformance with the provisions of the Illinois 15 Uniform Penalty and Interest Act. 16 Every qualified solid waste energy facility subject to 17 the provisions of this subsection (i) shall keep and maintain 18 records and books of its sales pursuant to subsection (c), 19 including payments received from those sales and the 20 corresponding tax payments made in accordance with this 21 subsection (i), and for purposes of enforcement of this 22 subsection (i) all such books and records shall be subject to 23 inspection by the Department of Revenue or its duly 24 authorized agents or employees. 25 When a qualified solid waste energy facility fails to 26 file the form or make the payment required under this 27 subsection (i), the Department of Revenue, to the extent that 28 it is practical, may enforce the payment obligation in a 29 manner consistent with Section 5 of the Retailers' Occupation 30 Tax Act, and if necessary may impose and enforce a tax lien 31 in a manner consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f, 32 5g, and 5i of the Retailers' Occupation Tax Act. No tax lien 33 may be imposed or enforced, however, unless a qualified solid 34 waste energy facility fails to make the payment required SB724 Enrolled -6- LRB9207881JScs 1 under this subsection (i). Only to the extent necessary and 2 for the purpose of enforcing this subsection (i), the 3 Department of Revenue may secure necessary information from a 4 qualified solid waste energy facility in a manner consistent 5 with Section 10 of the Retailers' Occupation Tax Act. 6 All information received by the Department of Revenue in 7 its administration and enforcement of this subsection (i) 8 shall be confidential in a manner consistent with Section 11 9 of the Retailers' Occupation Tax Act. The Department of 10 Revenue may adopt rules to implement the provisions of this 11 subsection (i). 12 For purposes of implementing the maximum aggregate 13 distribution provisions in subsections (j) and (k), when a 14 qualified solid waste energy facility makes a late payment to 15 the Department of Revenue for deposit into the Municipal 16 Economic Development Fund, that payment and deposit shall be 17 attributed to the month and corresponding quarter in which 18 the payment should have been made, and the Treasurer shall 19 make retroactive distributions or refunds, as the case may 20 be, whenever such late payments so require. 21 (j) The State Treasurer, without appropriation, must 22 make distributions immediately after January 15, April 15, 23 July 15, and October 15 of each year, up to maximum aggregate 24 distributions of $500,000 for the distributions made in the 4 25 quarters beginning with the April distribution and ending 26 with the January distribution, from the Municipal Economic 27 Development Fund to each city, village, or incorporated town 28 that has within its boundaries an incinerator that: (1) uses 29 or, on the effective date of Public Act 90-813, used 30 municipal waste as its primary fuel to generate electricity; 31 (2) was determined by the Illinois Commerce Commission to 32 qualify as a qualified solid waste energy facility prior to 33 the effective date of Public Act 89-448; and (3) commenced 34 operation prior to January 1, 1998. Total distributions in SB724 Enrolled -7- LRB9207881JScs 1 the aggregate to all qualified cities, villages, and 2 incorporated towns in the 4 quarters beginning with the April 3 distribution and ending with the January distribution shall 4 not exceed $500,000. The amount of each distribution shall 5 be determined pro rata based on the population of the city, 6 village, or incorporated town compared to the total 7 population of all cities, villages, and incorporated towns 8 eligible to receive a distribution. Distributions received 9 by a city, village, or incorporated town must be held in a 10 separate account and may be used only to promote and enhance 11 industrial, commercial, residential, service, transportation, 12 and recreational activities and facilities within its 13 boundaries, thereby enhancing the employment opportunities, 14 public health and general welfare, and economic development 15 within the community, including administrative expenditures 16 exclusively to further these activities. These funds, 17 however, shall not be used by the city, village, or 18 incorporated town, directly or indirectly, to purchase, 19 lease, operate, or in any way subsidize the operation of any 20 incinerator, and these funds shall not be paid, directly or 21 indirectly, by the city, village, or incorporated town to the 22 owner, operator, lessee, shareholder, or bondholder of any 23 incinerator. Moreover, these funds shall not be used to pay 24 attorneys fees in any litigation relating to the validity of 25 Public Act 89-448. Nothing in this Section prevents a city, 26 village, or incorporated town from using other corporate 27 funds for any legitimate purpose. For purposes of this 28 subsection, the term "municipal waste" has the meaning 29 ascribed to it in Section 3.21 of the Environmental 30 Protection Act. 31 (k) If maximum aggregate distributions of $500,000 under 32 subsection (j) have been made after the January distribution 33 from the Municipal Economic Development Fund, then the 34 balance in the Fund shall be refunded to the qualified solid SB724 Enrolled -8- LRB9207881JScs 1 waste energy facilities that made payments that were 2 deposited into the Fund during the previous 12-month period. 3 The refunds shall be prorated based upon the facility's 4 payments in relation to total payments for that 12-month 5 period. 6 (l) Beginning January 1, 2000, and each January 1 7 thereafter, each city, village, or incorporated town that 8 received distributions from the Municipal Economic 9 Development Fund, continued to hold any of those 10 distributions, or made expenditures from those distributions 11 during the immediately preceding year shall submit to a 12 financial and compliance and program audit of those 13 distributions performed by the Auditor General at no cost to 14 the city, village, or incorporated town that received the 15 distributions. The audit should be completed by June 30 or 16 as soon thereafter as possible. The audit shall be submitted 17 to the State Treasurer and those officers enumerated in 18 Section 3-14 of the Illinois State Auditing Act. If the 19 Auditor General finds that distributions have been expended 20 in violation of this Section, the Auditor General shall refer 21 the matter to the Attorney General. The Attorney General may 22 recover, in a civil action, 3 times the amount of any 23 distributions illegally expended. For purposes of this 24 subsection, the terms "financial audit," "compliance audit", 25 and "program audit" have the meanings ascribed to them in 26 Sections 1-13 and 1-15 of the Illinois State Auditing Act. 27 (Source: P.A. 90-813, eff. 1-29-99; 91-901, eff. 1-1-01.) 28 Section 99. Effective date. This Act takes effect upon 29 becoming law.