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92_SB0724eng SB724 Engrossed 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 Engrossed -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 Engrossed -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 Engrossed -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. Payments received by the Department of Revenue shall be 20 deposited into the Municipal Economic Development Fund, a 21 trust fund created outside the State treasury. The State 22 Treasurer may invest the moneys in the Fund in any investment 23 authorized by the Public Funds Investment Act, and investment 24 income shall be deposited into and become part of the Fund. 25 Moneys in the Fund shall be used by the State Treasurer as 26 provided in subsection (j). The obligation of a qualified 27 solid waste energy facility to make payments into the 28 Municipal Economic Development Fund shall terminate upon 29 either: (1) expiration or termination of a facility's 30 contract to sell electricity to an electric utility at the 31 purchase rate described in subsection (c); or (2) entry of an 32 enforceable, final, and non-appealable order by a court of 33 competent jurisdiction that Public Act 89-448 is invalid. 34 Payments by a qualified solid waste energy facility into the SB724 Engrossed -5- LRB9207881JScs 1 Municipal Economic Development Fund do not relieve the 2 qualified solid waste energy facility of its obligation to 3 reimburse the Public Utility Fund and the General Revenue 4 Fund for the actual reduction in payments to those Funds as a 5 result of credits received by electric utilities under 6 subsection (d). 7 A qualified solid waste energy facility that fails to 8 timely file the requisite form and payment as required by 9 this subsection (i) shall be subject to penalties and 10 interest in conformance with the provisions of the Illinois 11 Uniform Penalty and Interest Act. 12 Every qualified solid waste energy facility subject to 13 the provisions of this subsection (i) shall keep and maintain 14 records and books of its sales pursuant to subsection (c), 15 including payments received from those sales and the 16 corresponding tax payments made in accordance with this 17 subsection (i), and for purposes of enforcement of this 18 subsection (i) all such books and records shall be subject to 19 inspection by the Department of Revenue or its duly 20 authorized agents or employees. 21 When a qualified solid waste energy facility fails to 22 file the form or make the payment required under this 23 subsection (i), the Department of Revenue, to the extent that 24 it is practical, may enforce the payment obligation in a 25 manner consistent with Section 5 of the Retailers' Occupation 26 Tax Act, and if necessary may impose and enforce a tax lien 27 in a manner consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f, 28 5g, and 5i of the Retailers' Occupation Tax Act. For 29 purposes of enforcing this subsection (i), and to the extent 30 that it is practical, the Department of Revenue may secure 31 necessary information from a qualified solid waste energy 32 facility in a manner consistent with Section 10 of the 33 Retailers' Occupation Tax Act. 34 All information received by the Department of Revenue in SB724 Engrossed -6- LRB9207881JScs 1 its administration and enforcement of this subsection (i) 2 shall be confidential in a manner consistent with Section 11 3 of the Retailers' Occupation Tax Act. The Department of 4 Revenue may adopt rules to implement the provisions of this 5 subsection (i). 6 For purposes of implementing the maximum aggregate 7 distribution provisions in subsections (j) and (k), when a 8 qualified solid waste energy facility makes a late payment to 9 the Department of Revenue for deposit into the Municipal 10 Economic Development Fund, that payment and deposit shall be 11 attributed to the month and corresponding quarter in which 12 the payment should have been made, and the Treasurer shall 13 make retroactive distributions or refunds, as the case may 14 be, whenever such late payments so require. 15 (j) The State Treasurer, without appropriation, must 16 make distributions immediately after January 15, April 15, 17 July 15, and October 15 of each year, up to maximum aggregate 18 distributions of $500,000 for the distributions made in the 4 19 quarters beginning with the April distribution and ending 20 with the January distribution, from the Municipal Economic 21 Development Fund to each city, village, or incorporated town 22 that has within its boundaries an incinerator that: (1) uses 23 municipal waste as its primary fuel to generate electricity; 24 (2) was determined by the Illinois Commerce Commission to 25 qualify as a qualified solid waste energy facility prior to 26 the effective date of Public Act 89-448; and (3) commenced 27 operation prior to January 1, 1998. Total distributions in 28 the aggregate to all qualified cities, villages, and 29 incorporated towns in the 4 quarters beginning with the April 30 distribution and ending with the January distribution shall 31 not exceed $500,000. The amount of each distribution shall 32 be determined pro rata based on the population of the city, 33 village, or incorporated town compared to the total 34 population of all cities, villages, and incorporated towns SB724 Engrossed -7- LRB9207881JScs 1 eligible to receive a distribution. Distributions received 2 by a city, village, or incorporated town must be held in a 3 separate account and may be used only to promote and enhance 4 industrial, commercial, residential, service, transportation, 5 and recreational activities and facilities within its 6 boundaries, thereby enhancing the employment opportunities, 7 public health and general welfare, and economic development 8 within the community, including administrative expenditures 9 exclusively to further these activities. These funds, 10 however, shall not be used by the city, village, or 11 incorporated town, directly or indirectly, to purchase, 12 lease, operate, or in any way subsidize the operation of any 13 incinerator, and these funds shall not be paid, directly or 14 indirectly, by the city, village, or incorporated town to the 15 owner, operator, lessee, shareholder, or bondholder of any 16 incinerator. Moreover, these funds shall not be used to pay 17 attorneys fees in any litigation relating to the validity of 18 Public Act 89-448. Nothing in this Section prevents a city, 19 village, or incorporated town from using other corporate 20 funds for any legitimate purpose. For purposes of this 21 subsection, the term "municipal waste" has the meaning 22 ascribed to it in Section 3.21 of the Environmental 23 Protection Act. 24 (k) If maximum aggregate distributions of $500,000 under 25 subsection (j) have been made after the January distribution 26 from the Municipal Economic Development Fund, then the 27 balance in the Fund shall be refunded to the qualified solid 28 waste energy facilities that made payments that were 29 deposited into the Fund during the previous 12-month period. 30 The refunds shall be prorated based upon the facility's 31 payments in relation to total payments for that 12-month 32 period. 33 (l) Beginning January 1, 2000, and each January 1 34 thereafter, each city, village, or incorporated town that SB724 Engrossed -8- LRB9207881JScs 1 received distributions from the Municipal Economic 2 Development Fund, continued to hold any of those 3 distributions, or made expenditures from those distributions 4 during the immediately preceding year shall submit to a 5 financial and compliance and program audit of those 6 distributions performed by the Auditor General at no cost to 7 the city, village, or incorporated town that received the 8 distributions. The audit should be completed by June 30 or 9 as soon thereafter as possible. The audit shall be submitted 10 to the State Treasurer and those officers enumerated in 11 Section 3-14 of the Illinois State Auditing Act. If the 12 Auditor General finds that distributions have been expended 13 in violation of this Section, the Auditor General shall refer 14 the matter to the Attorney General. The Attorney General may 15 recover, in a civil action, 3 times the amount of any 16 distributions illegally expended. For purposes of this 17 subsection, the terms "financial audit," "compliance audit", 18 and "program audit" have the meanings ascribed to them in 19 Sections 1-13 and 1-15 of the Illinois State Auditing Act. 20 (Source: P.A. 90-813, eff. 1-29-99; 91-901, eff. 1-1-01.) 21 Section 99. Effective date. This Act takes effect upon 22 becoming law.